Summary of Judgment

Introduction

This judgment concerned a quantum-only determination in a claim for damages for loss of support arising from a fatal motor vehicle collision. The proceedings were brought in the Free State High Court, Bloemfontein, before Hefer AJ, with the matter heard on 15 August 2018 and judgment delivered on 25 October 2018.

The parties were Salmina Herculina Johanna Oosthuizen (the first plaintiff, the deceased’s widow) and Zane Oosthuizen (the second plaintiff, the deceased’s grandchild) against the Road Accident Fund (the defendant). The claim arose from the death of Mr Jakobus Hendrikus Oosthuyzen, who was killed as a pedestrian when struck by a vehicle driven by the insured driver.

The procedural position at trial was that liability had already been resolved on the basis of 100% in favour of the plaintiffs. The defendant conceded that the insured driver’s negligence caused the fatal incident on 1 April 2011. The remaining dispute concerned the proper assessment of damages, particularly whether certain post-death financial consequences should affect the quantification of the plaintiffs’ loss of support and which actuarial calculation should be adopted.

Material Facts

It was common cause that the deceased and the first plaintiff were husband and wife, and that the second plaintiff was their grandchild. It was further common cause that the deceased owed a legal duty to maintain and support both plaintiffs, that he did so during his lifetime (including at the time of the collision), and that he would have continued supporting them had he not died in the collision.

The deceased died as a result of the collision on 1 April 2011 in Collins Street, Arboretum, Bloemfontein, when he was struck by the insured driver’s vehicle. The plaintiffs were deprived of the deceased’s financial support due to his death. The deceased had the financial ability to support them, and his income comprised employment income averaging R3 559,00 per month, a pension of R15 279,00 per year, and a medical subsidy of R12 168,00 per year.

The first plaintiff was not employed during the marriage and remained unemployed. After the deceased’s death, the first plaintiff received half of the deceased’s monthly pension, and it was agreed that she would continue to receive this portion until her death.

It was also common cause that the first and second plaintiffs inherited the property where they resided. The deceased was 71 years old at death and would have retired at 75. The first plaintiff was 69 at the time of the incident. The second plaintiff was 18 at the time of the incident.

A further factual aspect relevant to quantification was that an actuarial report prepared by Munro Actuaries presented two scenarios regarding the second plaintiff’s period of dependency, namely dependency ending at age 18 or at age 21. The second plaintiff’s evidence was that he did not complete Grade 12, attended a college where he qualified as an apprentice, and later obtained employment earning about R3 600,00 per month, with his first employment obtained at about age 20. He resided with his grandmother and, on his evidence as assessed by the court, was not fully self-sufficient at the time he began earning.

Legal Issues

The court was required to determine, as the issues remaining after the concession on liability, how the plaintiffs’ loss of support should be quantified in light of certain financial consequences following the death.

The central legal questions were, first, whether the pension payment received by the first plaintiff after the deceased’s death should be treated as income in a manner that reduces the damages for loss of support, having regard to the Assessment of Damages Act 9 of 1969. This was primarily a question of law (statutory interpretation and application) applied to largely common-cause facts.

Second, the court had to decide whether the inheritance of the immovable property (the plaintiffs’ home) constituted an “accelerated benefit” that should be deducted from damages, and if so, how it should be valued. This was a question involving the application of legal principles to facts, including an evaluative assessment of whether the inheritance left the first plaintiff in a better financial position attributable to the death.

Third, the court had to choose between actuarial scenarios by determining the appropriate dependency age for the second plaintiff (18 versus 21). This involved a factual and evaluative judgment based on the evidence of the second plaintiff’s circumstances and the court’s discretion in assessing loss.

Court’s Reasoning

The court approached the dispute by identifying the governing principles for assessing damages for loss of support and then determining whether the financial consequences relied upon by the defendant were of a kind that should reduce the award.

On the pension issue, the court accepted that after the deceased’s death the first plaintiff’s receipt of half the deceased’s pension constituted income that accrued to her and indirectly benefited the second plaintiff. However, the court held that the Assessment of Damages Act 9 of 1969, and specifically section 1, expressly provides that when damages are assessed for loss of support resulting from a person’s death, no pension (as defined in the Act) that has been or will or may be paid as a result of the death shall be taken into account. The court therefore concluded that although the pension payment was indeed an income stream to the first plaintiff after death, the statute required that it not be deducted from the damages awarded for loss of support.

On the “accelerated benefit” argument concerning the inherited home, the defendant contended that the value of the property (reflected in the liquidation account as R463 640,00) should be treated as an accelerated benefit and deducted from the loss of support, on the basis that inheritance advanced benefits that would otherwise have accrued later and could reduce indebtedness earlier than would have occurred but for the death.

The court set out the general measure of damages for loss of support as the difference between the dependent’s position after the loss and the position the dependent could reasonably have expected had the deceased not died, together with the proposition that any addition to the dependent’s income arising from the death must ordinarily be deducted. Against that general approach, the court relied on authority dealing specifically with inheritance and accelerated benefits.

Applying Lambrakis v Santam Ltd 2002 (3) SA 710 (SCA), the court noted that where property is inherited by a dependent, the relevant inquiry is not the property’s face value but the value of the accelerated accrual, which requires assessing the probabilities that the dependent would have inherited the property had the deceased died later from another cause. The court also referred to Maasberg v Hunt ARS & Hepburn Ltd 1944 WLD, where it was reasoned that if a widow inherits an interest in the matrimonial home, the accelerated receipt may be set off against the loss of accommodation that the deceased provided, and that selling the property would merely require the widow to procure alternative accommodation, meaning no net benefit is necessarily shown.

The court further relied on Mohan and Others v Road Accident Fund 2008 (5) SA 305 (D), where no deduction was made in similar circumstances when the widow and a child continued to reside in the matrimonial home and there was no indication of the home being sold or let to create a new benefit attributable to the death. The court adopted the reasoning that where the dependent remains in the home and would need to replace accommodation if the home were sold, the dependent may be in no better position than before.

On the facts before it, the court found that the indications were that the first plaintiff and her grandson would remain in the inherited home for the foreseeable future. Although the court acknowledged that the second plaintiff might move out at some stage, there was no indication that the first plaintiff would not continue living there, nor that the inheritance would translate into a tangible, additional financial benefit that should reduce support damages. On this basis, the court concluded that the inheritance of the house did not constitute an accelerated benefit requiring deduction from the damages award.

Finally, in selecting the appropriate actuarial scenario, the court considered the second plaintiff’s evidence about his education, apprenticeship, employment history, earnings, and ongoing residence with the first plaintiff. Although he obtained employment around age 20, the court accepted that he was not yet able fully to look after himself at that stage, and that dependency therefore appropriately extended to age 21. In doing so, the court referenced the discretionary nature of quantifying loss, consistent with the principle that the trial judge has a discretion to award what is right in the circumstances.

Outcome and Relief

The court ordered the defendant to pay the plaintiffs R905 405,00 in damages for loss of support.

The court further ordered that if payment was not made within 14 days from the date of judgment, interest at the applicable rate of interest a tempore morae would be payable.

The defendant was ordered to pay the costs of suit.

Cases Cited

Jameson’s Miners v Central South African Railways 1908 TS 575.

Hulley v Cox 1923 AD 234.

Legal Insurance Co Ltd v Botes 1963 (1) SA 608 (A).

Lambrakis v Santam Ltd 2002 (3) SA 710 (SCA).

Maasberg v Hunt ARS & Hepburn Ltd 1944 WLD.

Mohan and Others v Road Accident Fund 2008 (5) SA 305 (D).

Legislation Cited

Assessment of Damages Act 9 of 1969 (section 1).

Rules of Court Cited

No rules of court were cited in the judgment.

Held

The court held that the portion of the deceased’s pension received by the first plaintiff after his death constituted income in fact but, by operation of section 1 of the Assessment of Damages Act 9 of 1969, it could not be taken into account to reduce damages for loss of support.

The court held further that the inheritance of the matrimonial home by the first plaintiff did not, on the facts, constitute an accelerated benefit justifying a deduction from the loss of support damages, particularly where the first plaintiff and second plaintiff were to remain living in the property and no tangible additional benefit attributable to the death was established.

The court held that the appropriate dependency age for the second plaintiff on the evidence and actuarial scenarios was 21, and it awarded damages accordingly, together with interest (if unpaid within 14 days) and costs.

LEGAL PRINCIPLES

The Assessment of Damages Act 9 of 1969 establishes that, in assessing damages for loss of support arising from death, certain categories of payments consequent upon death, including pensions as defined, must not be taken into account in reduction of the award, even where such payments accrue to a dependent after the death.

The general measure of damages for loss of support is the comparison between the dependent’s financial position after the death and the position that would reasonably have been expected had the deceased lived, subject to an equitable adjustment and the trial court’s discretion to award what is right in the circumstances.

Where a dependent inherits property upon the deceased’s death, the relevant inquiry is not automatically the market value of the inherited asset, but whether there is an accelerated accrual constituting a real benefit attributable to the death, assessed by reference to probabilities about later inheritance and the dependent’s actual position. In circumstances where continued occupation of the inherited home merely replaces accommodation the deceased would have provided and does not leave the dependent materially better off, a deduction for accelerated benefit may be inappropriate.

In determining the duration of a dependent child’s support, the court may make an evaluative determination (informed by actuarial scenarios and evidence) as to when the dependent is likely to become self-sufficient, and may extend dependency beyond the age of majority where the facts justify that conclusion.