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[2019] ZAGPPHC 335
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Nkuna obo N v Road Accident Fund (96671/2015) [2019] ZAGPPHC 335 (16 July 2019)
SAFLII
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Certain
personal/private details of parties or witnesses have been
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IN THE HIGH COURT OF SOUTH AFRICA
GAUTENG DIVISION, PRETORIA
(1)
REPORTABLE:
YES
/NO
(2)
OF INTEREST TO
OTHER JUDGES:
YES
/NO
(3)
REVISED.
CASE NO: 96671/2015
16/7/2019
In
the matter between:
DIMAKATSO
V. NKUNA obo PTN
N[….]
Plaintiff
and
ROAD
ACCIDENT FUND
Defendant
JUDGMENT
STRYDOM AJ
BACKGROUND:
1.
The
Plaintiffs claims on behalf of a male minor child who was involved in
a motor vehicle collision on the 5
th
of June 2015. The minor at that stage was 12 years old and was in
Grade 5. He is currently 16 year old.
2.
The
parties have previously settled merits, as well as general damages
and have requested this Court to make a finding as to loss
of
earnings. Counsel for the parties submitted an averaged earnings as
per the Plaintiffs actuarial calculations, which, they both
agreed,
represents the base pre-morbid, as well as post-morbid earnings. I
have been requested to determine the contingency to
be applied to
these figures.
INJURIES
AND
SEQUALAE:
3.
In
general for the determination of contingencies one must look at
matters on case by case basis.
4.
The
extent of the injuries sustained are largely common cause: The minor
sustained a mild to moderate and/or severe head injury,
with a
secondary hypoxic brain injury due to uncontrolled epilepsy, that is
a result of the trauma to the head. In addition thereto,
the minor
has suffered neurocognitive deficits as well as neurobehavioral
problems.
5.
He
has been left emotionally vulnerable and is at risk of depression.
These emotional difficulties will probably exacerbate his
cognitive
difficulties, impact his academic function, impact his motivation to
secure employment and affect his overall occupation
functioning
(according to the clinical psychologist).
6.
It
is evident from the joint minute of the educational psychologists,
that they agreed on neither the pre-morbid nor the post-morbid
income
potential of the minor child.
7.
The
Plaintiffs educational psychologist was of the view that the
Plaintiff could have obtained a Grade 12, as well as a diploma
on a
part-time basis, whereas the Defendant's educational psychologist was
of the view that he could have completed a certificate
on a part-time
basis.
8.
Post-morbidly
the Plaintiff's expert was of the view that he will fail Grade 12,
whereas the Defendant's expert was of the view
that, with help and if
his epilepsy was controlled he would obtain a certificate.
ARGUMENT:
9.
The
counsel for the Plaintiff submitted that a 20% pre-morbid contingency
deduction and a 40% post-morbid contingency deduction
should be
applied. The counsel for the Defendant on the other hand was of the
view that 30% should be deduction in the pre-morbid
scenario and 40%
in the post-morbid scenario.
10.
The
Defendant supplied Heads of Argument and I am indebted to counsel for
the Defendant in this regard. During argument, counsel
for the
Defendant cited the following factors which should serve increase the
pre-morbid contingency deduction:
10.1
The minor had failed 2 grades prior to
the accident and the likelihood of academic achievement, at the level
as per the calculations,
should be discounted against. In this regard
the counsel for the Defendant conceded that where the parties had
agreed to use the
average of a certificate and a diploma earnings,
this in itself is a type of
"contingency
'
and should therefore lower the
contingency factor or at least be taken into account as a whole;
10.2
The Defendant's counsel further
submitted that the socio economic circumstances of the minor should
be taken into account and stated,
that no one in the Plaintiff's
family has achieved a diploma. Counsel for the Plaintiff however did
indicate that the minor's sister
completed a matric and is culinary
student.
10.3
The argument based on socio economic
circumstances of a particular child is one that must be considered
with great circumspect and
applied very cautiously. It is known that
children tend to perform better than their parents and that, in
specifically the South
African context (with the amount of
availability of educational resources becoming available to more and
more children), the fact
that parents could not complete school or
could not study should not be countenanced against children
per
se.
However, it is also a fact that
finances do affect a person's ability to proceed, specifically, to
tertiary studies. In this regard,
it is noted that the educational
psychologists agreed that, whichever tertiary study they propose the
minor could have obtained,
would have taken place over a period of
time, with the minor studying part-time. The calculations presented
do, in fact, take that
into account already.
10.4
With regards to the pre-morbid
contingency deduction, Defendant's counsel referred me to the offed
quoted 0.5% per annum deduction
as proposed by Koch.
LEGAL
FRAMEWORK:
11.
I was also referred to various cases by
the Defendant's Counsel, where contingencies had been applied which
have been of assistance.
In this regard I referred to the following
cases:
11.1
Titus v RAF 5 C&B E 7 – 9
11.2
Benesse v RAF 2014 7A3 QOD
11.3
Makapula v RAF 2011 684 QOD.
11.4
Ian Christopher Hall v Road Accident
Fund.
[1]
12
I have also noted that in the matter of
Ian Christopher Hall v Road
Accident Fund
the
Court was confronted with a situation where the Plaintiff following
the accident was still employed, however, from a way of
the various
sequelae
of
his injuries and the effect on his income potential, it became
apparent that the Plaintiff may or may not in fact loose his
position. Should the Plaintiff have lost his position he would have
remained unemployable.
13
The learned Judge expressed the
following in paragraph 54:
"However,
in my view, the Defendant's assumptions regarding the Plaintiff's
future employability prospects were rather over
optimistic in the
circumstances of case... having regards to the accident scenario
...
it appears most appropriate and fair
that 50% be deducted from the future employment scenario..."
14
In
Southern
Insurance Association Ltd v Bailey NO
1984(1) SA 98 AD at 113F- 114A the following is stated:
14.1
“Any
enquiry into damages for loss of earning capacity is of its nature
speculative, because it involves a prediction as to
the future
without the benefit of crystal balls, soothsayers, augers or oracles.
All that the court can do is to make an estimate,
which is often
a
very
rough estimate, of the present value of
a
loss
14.2
It
has open to it, two possible approaches.
14.2.1
One
is for the Judge to make
a
round
estimate on an amount which seems to him to be fair and reasonable.
That is entirely
a
matter
of guesswork,
a
blind
plunge into the unknown.
14.2.2
The
other is to try and make an assessment, by way of mathematical
calculations on the basis of assumptions resting on the evidence.
The
validity of this approach depends of course upon the soundness of the
assumptions and these may vary from the strongly probable
to the
speculative.
14.2.3
It
is manifest that either approach involves guesswork to
a
greater or lesser extent. But the
court cannot for this reason adopt
a
non-possumus attitude and make no
award."
15
In
RAF
v Guedes
2006(5) SCA 583 the
court held:
"In essence the trial
court exercises
a
discretion,
and attempts to achieve the best estimate of
a
plaintiff's Joss: Southern Insurance
Association v Bailey NO. It is trite that
a
person is entitled to be compensated to
the extent that the person's patrimony has been diminished in
consequence of another's negligence.
Such damage include Joss of
future earning capacity (see for example President Insurance
Co
Ltd v Mathews). The calculation of the
quantum of
a
future
amount, such as Joss of earning capacity, is not, as I have already
indicated a matter of exact mathematical calculation.
By its nature
such an enquiry is speculative and a court can therefore only make an
estimate of the present value of the loss which
is often a
very
rough estimate (see for example Southern Insurance Association v
Bailey NO). The court necessarily exercises
a
wide discretion when it assesses the
quantum of damages due to loss of earning capacity and has
a
large discretion to award what it
considers right. Courts have adopted the approach that in order to
assist in such
a
calculation,
an actuarial computation is
a
useful
basis for establishing the quantum of damages. Even then, the trial
court has a wide discretion to award what it believes
is just."
(Court's emphasis)
16
The following is relevant with regards
to the application of contingencies:
16.1
Matters which cannot otherwise be
provided for or cannot be calculated exactly, but which may impact
upon the damages claimed, are
considered to be contingencies, and are
usually provided for by deducting a stated percentage of the amount
or specific claims.
[2]
16.2.
Contingencies include any possible relevant future event which might
cause damage or a part thereof or which
may otherwise influence the
extent of the plaintiff's damage.
[3]
16.3
In
a wide sense contingencies are described as "the hazards that
normally beset the lives and circumstances of ordinary people.
[4]
Contingencies have also been described as "unforeseen
circumstances of life".
[5]
16.4
Contingencies
are usually taken into account over a particular period of time,
generally until the retirement age of the Plaintiff.
[6]
17
Margo J in
Goodwill
v President Insurance Co Ltd
1978(1)
SA 389 W at 392H stated:
"In the assessment of
a
proper allowance
for contingencies, arbitrary considerations must inevitably play
a
part, for the art
of science of foretelling the future, so confidently practiced by
ancient prophets and soothsayers, and by modern
authors of a certain
type of almanac, is not numbered among the qualifications for
judicial office".
18
The advantage of applying actuarial
calculations to assist in this task was emphasised in the leading
case of Southern Insurance
Association
Ltd
v Bailey
1984
1 SA 98
(A)
113H-114E , where the Court stated :
18.1
“
Any
enquiry into damages for loss of earning capacity is of its nature
speculative
18.2
All that the Court can do is to make
an estimate, which is often a very rough estimate, of the present
value of the loss. It has
open to it two possible approaches. One is
for the Judge to make a round estimate of an amount which seems to
him to be fair and
reasonable. That is entirely
a
matter of guesswork,
a
blind plunge into the unknown. The
other is to try to make an assessment, by way of mathematical
calculations, on the basis of assumptions
resting on the evidence.
The validity of this approach depends of course upon the soundness of
the assumptions, and these may vary
from the strongly probable to the
speculative. It is manifest that either approach involves guesswork
to a greater or lesser extent.
But the Court cannot for this reason
adopt a non possumus attitude and make no award.
18.3
In
a
case where the Court has before it
material on which an actuarial calculation can usefully be made, I do
not think that the first
approach offers any advantage over the
second. On the contrary, while the result of an actuarial computation
may be no more than
an 'informed guess' it has the advantage of an
attempt to ascertain the value of what was lost on
a
logical basis; whereas the trial
Judge's 'gut feeling' (to use the words of appellant's counsel) as to
what is fair and reasonable
is nothing more than a blind guess."
18.4
But the Court emphasised that provision
for contingencies falls squarely within the subjective discretion of
the court as to what
is reasonable and fair. This will depend upon
the underlying assumptions made which are not the domain of the
actuary.
[7]
19
The
learned author Koch has suggested the following well-followed
approach: "what is described as a "sliding scale"
is
used, under which it is allocated a "1/2% for year to retirement
age, i.e 25% for a child, 20% for a youth and 10% in middle
age".
CONTINGENCIES TO BE APPLIED:
PRE-MORBID:
20
With
regards to the minor
in casu
and
his specific capabilities, I am of the view that, a 25% pre-morbid
contingency deduction would cater for the risk that he might
not have
(even if the accident had not occurred) obtained the
certificate/diploma level. This caters
inter
a/ia
for the eventualities that his
studies may have taken longer, financial restrictions or that he
would have failed more grades, given
the pre-existing learning
disabilities.
POST-MORBID:
21
In
the post-morbid scenario, it seems as if, the parties are
ad
idem
that the minor has a 40% risk
of not obtaining the earnings as per the post morbid scenario
(earnings on obtaining a certificate
only).
22
Neither
party presented a case, where calculations had been done on the basis
that, the minor would not have obtained a certificate
and merely have
completed a matric. The educational psychologists, as stated
supra,
have varied conclusions as to the
future (injured) potential of the minor; the Plaintiff's expert, in
fact, concluded that he would
not obtain a matric and the Defendant's
expert is of the view that, with treatment and assistance, he might
obtain a certificate.
23
It
is accordingly evident that, the post-morbid scenario, as agreed by
the parties, is an over estimation of what the minor might
still
achieve, similar to, as submitted by Defendant's counsel, the over
estimation of his pre morbid capacity.
24
The
period for which the minor is to be compensated is a period of some
odd 40 years. The impact of the
"once
and for all rule"
in the South
African law of damages, is that Courts should be mindful of the fact
that the consequences of any order may be felt
for many years to
come.
25
I
am aware that both parties have contended that a post-morbid
contingency deduction of 40% should be applied. However, the
deduction
of contingencies falls within the discretion of the Court.
From a reading of the common cause reports as well as the argument in
Court, it would seem that whether or not the Plaintiff would in fact
achieve the postulated post morbid earnings, as per the
actuarial calculation, remains in doubt. In this regard I share the
sentiment expressed by the Court in the
Hall
v RAF
matter
supra;
the
experts are of the view that he may or may not achieve any form of
qualification, all things considered.
26
In
coming to this determination I am mindful of the fact that the Court
has the future of a minor child proverbially in its hands.
27
I
accordingly hold that a 50% post-morbid contingency deduction
constitutes a fair and reasonable deduction in the present
circumstances.
FINDING ON CONTINGENCIES:
28
In
view of the aforementioned reasons I accordingly hold that 25%
contingencies should be deducted from the pre-morbid earnings
and 50%
should be deducted from the post-morbid earnings.
29
The
resultant calculation would therefore as follows:
29.2 Pre-morbid
are R5 299 250.00 less 25% = R3 974 437.50;
29.3 Post-morbid
are R1 986 626.00 less 50% = R993 313.00;
29.4 Total loss
(R394 437.50 less R993 313.00): R2 981 124.00.
30
I consequently make the following order:
30.2
The
Defendant shall pay the sum of R2 981 124.00 (Two Million Nine
Hundred and Eighty One One Hundred and Twenty Four Rand Only)
within
14 (fourteen) days of this order to the Plaintiffs attorneys, SB
NGENTO ATI ORNEYS, in settlement of the Plaintiffs claim
for LOSS OF
EARNINGS, which amount shall be payable by direct transfer into the
following trust account:
ACCOUNT HOLDER: SB NGENTO
ATTORNEYS
NAME OF BANK:
STANDARD BANK
ACCOUNT NO: [….]
BRANCH CODE: CARLTON CENTRE
30.3
The
capital amount refers to in paragraph 1
supra
will not bear interest unless the
Defendant fails to effect payment thereof within 14 (fourteen) days,
in which event the capital
amount will bear interest at the rate of
10.25% per annum calculated from date of mora including the date of
payment thereof.
30.4
The
Defendant shall make payment of the Plaintiffs taxed or agreed party
and party costs on the High Court which costs shall include
the
following:
•
The fees of Counsel, including of the
7
th
May 2019;
•
The reasonable taxable costs of all
experts used in this matter.
30.5
The
following provisions will apply with regards to the determination of
the aforementioned taxed or agreed costs:-
•
The Plaintiff shall serve the notice of
taxation on the Defendant's attorney of record;
•
The Plaintiff shall allow the Defendant
14 (fourteen) court days to make payment of the taxed costs from date
of settlement or taxation
thereof;
•
Should
payment not be effected timeously, Plaintiff will be entitled to
recover interest at the rate of 10.25% on the taxed or agreed
from
date of allocator to date of final payment.
K STRYDOM (AJ)
ACTING JUDGE OF THE HIGH COURT
OF SOUTH AFRICA, GAUTENG
DIVISION,
PRETORIA
Heard
on: 2 July 2019
Judgment
delivered: 16 July 2019
Appearances:
For
the Plaintiff: Adv K Mhlanga
Instructed
by: SB Ngento
Attorneys Inc
For
the Defendant: Adv K Phiri
Instructed
by: Rambevha Morobane
Attorneys
[1]
Unreported case: case no 2008/11330 judgment delivered in the South
Gauteng High Court, Johannesburg on the 28
th
of May 2013
[2]
(De Jongh v Gunter 1975(4) SA 78 (W) 80F).
[3]
(Erdmann v SANTAM Insurance Co Ltd
1985 3 SA 402
(C)
404 -405; Burns v National Employers General Insurance Co Ltd
1988
3 SA 355
(C) 365) .
[4]
"(AA Mutual Insurance Association Ltd v Van Jaarsveld
1974
4 SA 729
(A); Van der Plaats v SA Mutual Fire &
General Insurance Co Ltd
1980 3 SA
10
5
(A);
Southern Insurance Association Ltd v Bailey
19841 SA 98 (A)
117).
[5]
(De Jongh v Gunther
1975 (4) SA 78
(W)
80F).
[6]
(Goodal v President Insurance Co Ltd
1978 1 SA 389
(W)
393; Rij NO v Employers' Liability Assurance
1964 (4) SA 737
(W); Sigournay v Gillbanks
1960 2 SA 552
(A)
569; Smith v SA Eagle Insurance Co Ltd
1986 2 SA 314
(SE)
319) .
[7]
(Shield Insurance Co Ltd v Hall
1976 4 SA 431(
A)
444; Pringle v Administrator, Tvl
1990 2 SA 379
(W) 397-398).