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[2019] ZAGPPHC 334
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Khathwane v Road Accident Fund (71956/2014) [2019] ZAGPPHC 334 (18 July 2019)
SAFLII
Note:
Certain
personal/private details of parties or witnesses have been
redacted from this document in compliance with the law
and
SAFLII
Policy
IN THE HIGH COURT OF SOUTH AFRICA
GAUTENG DIVISION, PRETORIA
CASE
NO: 71956/2014
18/7/2019
In
the matter between:
O.N
KHATHWANE
Plaintiff
and
ROAD
ACCIDENT FUND
Defendant
JUDGMENT
STRYDOM
(AJ)
1.
The
matter stood down for a recess allocation from the 26
th
of April 2019.
2.
The
parties have agreed on all heads of damages, save for the issue for
the loss of income.
3.
It
was confirmed that the reports and the joint minutes are common cause
and that argument would proceed on the issue of the contingencies
to
be applied.
INJURIES AND
SEQUALAE:
4.
The
Plaintiff, in this instance, sustained a severe injury to the ulnar
nerve of his left arm, which has consequently resulted in
a
"claw-like"
contracture
of the hand. This is caused by the paralysis and atrophy of his
intrinsic hand muscles (which is supplied by the ulnar
nerve) and
therefore the extrinsic hand muscles pull the fingers into a claw
configuration, as they are unopposed. This has caused
a significant
loss of left hand function and grip strength. It being 9 years since
the accident, a primary repair of the nerve
will not be possible and,
as such, the condition is permanent.
5.
The
Plaintiff was in Grade 11 when the accident occurred in 2010. He was
19 years old at that stage. He returned to school and managed
to
obtain his Grade 12 in 2011 and proceeded to complete a certificate
of competence in slinging and rigging in 2013.
6.
The
occupational therapists are in agreement that he is unable to work as
a rigger in that he is, following the accident, only able
to perform
sedentary to light physical work and he is no longer able to function
in a medium, heavy or very heavy work capacity.
Even though he can
manage some mid-level medium work it will aggravate his symptoms.
7.
In
their joint minutes, the industrial psychologists (with regards to
his uninjured income potential) referring to the fact that
the
Plaintiff obtained a Grade 12, as well as a certificate, agreed that
he would probably have entered the labour market as a
semi-skilled
worker, after completing his Grade 12 and a certificate.
8.
In
that event, having established himself in the corporate labour market
sector, he potentially may have entered on the lower quartile
of
Patterson A3 level and progressed in a straight line to the medium
quartile of a Patterson B4 level, at the age of approximately
45.
9.
They further note that it would not have been easy for the Plaintiff
to secure
employment in the corporate sector given the fact that the
corporate sector accounts for 25% of the workforce.
10.
They
are further in agreement that he would have struggled to obtain an
appropriate position and would have experienced periods
of
unemployment. These risks are best addressed by way of way of an
appropriate pre-accident contingency.
11.
Following
the accident they agree that he will be able to follow a career
progression as postulated pre-accident, but due to the
limited job
opportunities that would accommodate his injuries he may experience
longer periods of unemployment and will no longer
be able to reach
his pre-accident potential employment ceiling.
12.
The
industrial psychologists, again, agree that this needs to be
addressed by means of higher contingency deduction than pre-accident
in the post-morbid scenario.
13.
During
argument, counsel for the Plaintiff sought to apply a so-called
"spread"
of
50% between the pre- and post-morbid income to countenance the effect
of the Plaintiff's injuries on his earning potential. Counsel
for the
Defendant contended that this spread should be in the region of 20%.
14.
It
is important to note, at this juncture, that the concept of a
"spread"
merely
refers to the differential between pre-morbid contingency and the
post-morbid contingency.
15.
In
instances such as the present one, where the base earnings are
exactly the same pre- and post-accident, mathematically the straight
deduction of this
"spread"
comes to the exact same figures as
it would have, had contingencies been applied to the pre- and
post-morbid scenarios individually,
before deducting the post-morbid
income from the pre-morbid. (In the case where there is a difference
between the earnings pre-morbid
and post-morbid, naturally, one would
apply specific contingencies to each of the scenarios first).
16.
The
Plaintiff's counsel led the oral evidence of the Plaintiff. The
Plaintiff indicated that he did, in fact, study for the rigging
certificate after the accident and that there was a theoretical
component, as well as a written exam involved. This course took
six
(6) months.
17.
The
Plaintiff, furthermore, showed the Court the
sequelae
of the injuries to his ulnar nerve,
and it was noted that his fingers are unable to extend and are fixed
in a permanent claw-like
position.
18.
The
Plaintiff testified that he had previously worked as a gardener, but
that he found it difficult and, upon questioning by the
Defendant's
counsel, stated that, he could do other work, but he
"thinks"
that it would be too difficult for
him.
EVALUATIONS
OF EVIDENCE AND ARGUMENTS:
19.
The
issue of contingencies, as well as the correct application thereof,
is one that has plagued practitioners since the inception
of the
mathematical approach and seems to be one of the main bones of
contention in these types of matters before Court on a daily
basis.
The reason for this is, naturally, that because of the speculative
"crystal ball"
approach
to be applied to determine the relative risks influencing the
probability of an individual obtaining a hypothesised income
in
future.
20.
While
it may be so that there are general
"rules
of thumb"
to apply to guide the
Court as to the contingencies, each case has to be dealt with on its
own merits.
21.
Counsel
for the Defendant calculated his 20%
"spread'
with reference to the so-called
"0.5% rule"
up
to year of retirement, as per Koch, for instance. However, this
reliance is incorrect: Koch's assertion applies to the
"general"
contingencies to be applied to each
scenario pre- and post-morbidly and, specifically, relates to what
one can consider as being
a person's
"general"
risks of obtaining income
(regardless of the compounding
sequelae
of the injury sustained).
22.
One
would use Koch's rule to determine, for instance, what a base
contingency should be. Having determine the
"general"
risk, as such, one would then
determine whether the proposed income, and chance of obtaining same,
is higher or lower than the
"general"
risk as per Koch. Usually it is
higher and the difference between these contingency percentages is
referred to as the so-called
"spread".
Accordingly one cannot use Koch's
0.5% (half) percent a year to determine a
"spread
"as it is merely a basis to
determine
"general"
risks.
23.
Much
reliance was placed by counsel for the Plaintiff, on the fact that
the Plaintiff can no longer work as a rigger, however counsel
for the
Plaintiff correctly conceded that, while it was ill-advised for the
Plaintiff to study rigging after the accident (given
his injury), the
Plaintiff has, in fact, shown that he can obtain some form of
qualification.
24.
Given
the fact that the industrial psychologists quantify the Plaintiff's
pre- and post-morbid earnings on the basis of a semi-skilled
worker
in the corporate sector, one has to have regard for the fact that, he
is not only reliant on his physical capabilities to
obtain
employment.
25.
The
converse, however, is also true; it is undisputed that the Plaintiff
has, since the accident and completion of his rigging certificate,
not been able to obtain any employment in the corporate sector and
has, in fact, only worked as a piecemeal gardener/labourer.
26.
A
careful balancing of the hypothetical and the
de
facto
scenarios needs to be done, to
ensure that justice is done between parties alike.
27.
Both
counsels in court (correctly, in my view) conceded that, their
initial assessments should be adjusted; counsel for the Plaintiff
was
of the view that the
"spread"
should now be 40% whilst the
Defendant's counsel raised his
"spread"
percentage to a 25 - 30%.
FINDINGS AT TO CONTINGECIES:
28.
It
is clear that the accident has in fact had a devastating effect on
the Plaintiff's potential to earn income, especially in view
of the
realities of the labour market. However, the Plaintiff retains the
capacity to study and to perform sedentary to light work.
29.
I
am accordingly of the view that a 35% so-called "spread"
should be applied; i.e. the Plaintiff should be compensated
for the
"loss"
of
35% of his projected earnings; that being the increase in risk of not
obtaining the said earning level, now that the accident
has occurred.
30.
As
such, with reference to the actuarial calculation, the following
figure would arrive at: R4 067 991.00 less 35% = R1 434 296,85.
31.
I
accordingly make the following order:
31.1
The order made on the 16
th
of July 2019 is hereby recalled and replaced with the following
order.
31.2
The Defendant pays the Plaintiff the sum
of R1 424 296,85 (One million four hundred and thirty-four thousand
two hundred and ninety
six rand and eighty five cents) with regard to
loss of earnings directly into the trust account of Plaintiff's
attorneys of record:
NELL KOTZE & VAN DYK ATTORNEYS, ABSA BANK,
ARCADIA BRANCH (BRANCH CODE: 334 945), ACCOUNT NUMBER: [….] ,
(Reference
Number: AK0152) by no later than 30 August 2019.
31.3
The Defendant must pay the Plaintiff's
taxed or agreed party and party costs of suit, on the High Court
scale including the fees
of counsel Adv G Lubbe, the reasonable
travelling and subsistence costs for the Plaintiff attending court,
the costs of the interpreter
Ms JN Sithole, the costs of the reports
and consultations with attorneys, joint minutes, as well as
reservation and qualifying
fees (if any) of the expert:
•
Dr Troskie
•
C Cruickshank
•
AF Kok
•
GRS Actuarial Consulting (all
calculations and recalculations)
Subject to the following conditions:
•
The
Plaintiff shall, in the event that costs are not agreed, serve the
notice of taxation of the Defendant's attorney of record;
and
•
The
Plaintiff shall allow the Defendant 14 (fourteen) days to make
payment of the taxed costs.
31.4
It is noted that there is no contingency
fee agreement applicable.
K STRYDOM
ACTING JUDGE OF THE HIGH COURT
OF SOUTH AFRICA GAUTENG
DIVISION,
PRETORIA
Heard
on: 2 July 2019
Judgement
delivered:
Appearances:
For
the Plaintiff: ADV G LUBBE
Instructed
by:
For
the Defendant: ADV SINGQWENYANE
Instructed
by: