• Law Reports
  • Setati v Road Accident Fund (1963/2014) [2018] ZALMPPHC …

Setati v Road Accident Fund (1963/2014) [2018] ZALMPPHC 36 (29 March 2018)

80 Reportability
Personal Injury Law - Road Accident Fund
View PDF SAFLII Source
Share WhatsApp LinkedIn X Email

Brief Summary

Damages — Loss of earnings — Collision involving donkey cart and motor vehicle — Plaintiff, a self-employed hawker, sustained injuries resulting in loss of income — Defendant admitted 100% liability — Court tasked with determining the extent of loss of earnings based on expert reports — Discrepancies in expert opinions regarding potential earnings and retirement age — Court ultimately accepted actuarial calculations reflecting total loss of R269,567 after deductions for disability grant and contingencies — Award granted based on realistic assessment of plaintiff's earning capacity post-accident.

Comprehensive Summary

Summary of Judgment


1. Introduction


This was a delictual damages action arising from a road traffic collision in which the plaintiff claimed compensation from the Road Accident Fund for losses allegedly suffered as a consequence of bodily injuries sustained in the collision.


The parties were Manoko Walter Setati (plaintiff) and the Road Accident Fund (defendant). The matter served before the High Court of South Africa, Limpopo Division, Polokwane, with Semenya J delivering judgment on 29 March 2018.


The procedural posture was that merits and quantum had been separated, and the merits were settled on the basis that the defendant admitted 100% liability for such damages as the plaintiff could prove. The judgment dealt only with quantum, and specifically with the plaintiff’s claim for loss of earnings / loss of earning capacity, in respect of which the plaintiff sought R2 000 000.00.


The general subject-matter of the dispute concerned the quantification of the plaintiff’s patrimonial loss attributable to diminished earning capacity, including the selection of appropriate earnings assumptions (given self-employment), the impact of pre-existing conditions, retirement age assumptions, and the proper approach to contingencies and deductions (including a disability grant received post-accident).


2. Material Facts


The collision occurred on 16 May 2013 on the Bochum–Mydarling public road, involving a donkey cart and a motor vehicle. The plaintiff was a passenger on the donkey cart and sustained injuries in the collision.


At the time of the accident, the plaintiff was 31 years old, with education up to Grade 11, and was self-employed as a hawker, selling items such as hair accessories by walking from house to house. It was also recorded that he received a government disability grant on an occasional basis.


Following the accident, the plaintiff stopped hawking and generated no income until approximately August 2015, when he opened a spaza shop with the assistance of two other people. The fact that the plaintiff was operating a spaza shop was treated as not in dispute.


The plaintiff’s pre-accident work history included short periods of employment as a bricklayer (February to April 2009, earning R900 per month) and as a recycling worker (2011 to 2012, earning R800 per month). It was noted that he left the recycling job because his foot was giving him problems, which became relevant to the assessment of retirement age and overall vocational vulnerability.


As to injuries, the orthopaedic experts recorded multiple injuries including a fracture of the left clavicle, soft tissue injuries, and back/spinal strain-type complaints. A central factual consideration emerging from the defence orthopaedic report was the plaintiff’s severe pre-accident deformity of the left foot, along with evidence of partial blindness/short-sightedness, which the court considered material to assumptions about work capacity and retirement.


The parties conducted the trial on an agreed basis that no oral evidence would be led and that the matter would be determined on the papers, specifically the joint minutes and reports of the orthopaedic surgeons, occupational therapists, and industrial psychologists, admitted by consent.


It was expressly treated as common cause that the plaintiff suffered a loss of income as a result of the collision. The dispute concerned the extent of that loss and the correct assumptions for actuarial computation.


3. Legal Issues


The central legal questions were concerned with the assessment and quantification of damages for loss of earnings / earning capacity, namely how to determine, on the accepted evidentiary material, the monetary difference between the plaintiff’s patrimonial position but for the collision and his position after the collision.


The dispute primarily involved the application of law to fact and a measure of evaluative judgment, because the court was required to choose between competing assumptions and models (including actuarial scenarios), in a context where future earnings assessments are inherently uncertain and require contingencies.


More specifically, the court was required to determine, on the expert material, appropriate assumptions regarding the plaintiff’s pre-accident earnings (as a self-employed hawker), the effect of the plaintiff’s post-accident spaza shop income, whether there was room for business progression, the appropriate retirement age (given the plaintiff’s pre-existing conditions and partial blindness), and the extent to which the plaintiff’s post-accident disability grant should be deducted.


4. Court’s Reasoning


The court approached the matter from the established principle that, under the lex Aquilia, a defendant must compensate the plaintiff for the difference between the value of the plaintiff’s estate after the delict and what it would have been had the delict not occurred, and that earning capacity forms part of a person’s estate. The court referenced authority confirming that loss or impairment of earning capacity constitutes patrimonial loss where it diminishes the estate.


In addressing the quantification exercise, the court relied on the proposition that damages for loss of earning capacity are inherently speculative, requiring a forward-looking estimate. In line with the cited authority, the court emphasised that where actuarial calculation can be usefully applied on the basis of evidence-based assumptions, it offers a logically structured method for estimating loss (even if it remains an “informed guess”), rather than a purely impressionistic award.


On the expert evidence, the court noted that occupational therapists agreed the plaintiff was suited to sedentary to light work, and that operating a spaza shop was considered light work. The industrial psychologists differed materially on the appropriate baseline and future progression assumptions for a self-employed hawker. The plaintiff’s industrial psychologist proposed using generalised earnings ranges for self-employed persons and suggested room for progression; the defendant’s industrial psychologist advocated a calculation based on the plaintiff’s reported earnings, and considered progression limited due to high unemployment and competition in informal trading.


A key evaluative step in the reasoning was the court’s treatment of pre-existing vulnerabilities. The court accepted that assumptions about working life expectancy and retirement age had to take account of the plaintiff’s deformed left foot and partial blindness/short-sightedness, particularly because one prior job was left due to foot pain. The court found credible the submission that it was unlikely the plaintiff would work to an advanced age such as 67, and accepted that retirement at around 60 (when a state pension grant would become available) was more realistic given the plaintiff’s underlying conditions and the likelihood of worsening difficulties with age.


This factual evaluation led to the rejection of the plaintiff’s actuarial approach to the extent it relied on assumptions derived from the plaintiff’s industrial psychologist’s model, which (as the court saw it) did not adequately incorporate the plaintiff’s pre-existing deformity and visual limitations. The court also considered it unreasonable, on the facts, to calculate pre-accident income on the basis of generalised earnings for self-employed persons rather than on the plaintiff’s actual reported earnings history. Where there were differences in the amounts the plaintiff reported to experts, the court accepted an average figure of R1 500.00 per month as the most appropriate estimate of pre-accident income.


Regarding post-accident income, the court rejected the suggestion that the plaintiff would probably generate more income from the spaza shop than he did as a hawker, noting the actuarial concern that a higher income assumption would require corresponding allowance for capital/stock necessary to achieve that turnover and profit. The court further accepted that the plaintiff was disadvantaged by the need to share income with others who assisted him in running the business.


The court then selected, from the defendant’s actuarial report, the scenario it regarded as best aligned with the common-cause fact of the spaza shop and with realistic deductions for assistance costs. It preferred scenario 2 in the defendant’s actuarial calculations because it allowed for spaza shop earnings of R650 per month, with 30% attributed to the cost of two assistants, and it also incorporated a deduction for the plaintiff’s post-accident disability grant (recorded as R68 915.00). The court accepted the contingencies proposed in that scenario, namely 5% for past loss and 25% for future loss, treating contingencies as part of the court’s discretionary assessment of life’s uncertainties (“hazards of life”).


Ultimately, applying these principles and assumptions, the court found the defendant’s actuarial outcome fair and reasonable as the best logical estimate on the material before it, and held that the plaintiff had proved a compensable impairment of earning capacity that diminished his estate.


5. Outcome and Relief


The court found that the plaintiff had suffered a compensable loss/impairment of earning capacity arising from the collision and that the defendant was obliged to compensate that loss.


The defendant was ordered to pay the plaintiff R267 567.00, together with interest at 15.5% per annum calculated from 14 days after judgment to date of payment.


The defendant was further ordered to pay the plaintiff’s costs of suit on the High Court party-and-party scale, including (as specified in the order) the qualifying and related costs of the expert witnesses whose medico-legal reports were referred to in argument, travel expenses for medico-legal examinations, costs associated with attending examinations and obtaining reports and joint reports, the reasonable taxable transportation costs to examinations, the costs of preparation of the trial bundle, and specified reasonable costs of the plaintiff’s attorneys including travel and pre-trial preparation and attendance.


Cases Cited


Dieppenaar v Shield Insurance Co Ltd 1979 (2) SA 904 (A)


Rudman v Road Accident Fund 2003 (2) SA 234 (SCA)


Southern Insurance Association Limited v Bailey NO 1984 (1) SA 98 (A)


Road Accident Fund v Sweatman (162/2014) [2015] ZASCA 22 (20 March 2015)


Legislation Cited


No legislation was cited in the judgment text provided.


Rules of Court Cited


No rules of court were cited in the judgment text provided.


Held


The court held that the plaintiff had established a compensable loss of earnings / loss of earning capacity resulting from the collision and that such impairment diminished his estate.


In quantifying the loss, the court preferred the defendant’s actuarial approach (particularly the scenario incorporating spaza shop earnings, deduction for assistants’ costs, deduction of the post-accident disability grant, and contingencies) and rejected the plaintiff’s higher-loss scenario to the extent it relied on assumptions not adequately accounting for the plaintiff’s pre-existing left foot deformity and visual impairment, and to the extent it relied on generalised self-employed earnings rather than the plaintiff’s reported actual earnings.


The court awarded monetary compensation in the amount stated in the order, together with interest and costs on the terms set out.


LEGAL PRINCIPLES


The judgment applied the principle that, under the lex Aquilia, a defendant must compensate for the patrimonial difference between the plaintiff’s estate after the delict and the hypothetical estate absent the delict, and that earning capacity is an asset forming part of the estate; impairment of that capacity constitutes recoverable loss where it diminishes the estate.


The judgment applied the principle that quantifying loss of earning capacity is inherently predictive and speculative, but a court must nonetheless make an award based on the best available estimate; where there is sufficient material for actuarial computation, actuarial methods provide a structured basis for an “informed guess” rather than a purely impressionistic assessment.


The judgment further reflected that determining appropriate assumptions for future loss involves evaluative choices about matters such as likely retirement age, contingencies, and realistic income projections, and that such choices must be grounded in the proved facts, including pre-existing vulnerabilities and the plaintiff’s actual earning history, rather than optimistic generalisations not supported on the evidentiary record.

About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Limpopo High Court, Polokwane
SAFLII
>>
Databases
>>
South Africa: Limpopo High Court, Polokwane
>>
2018
>>
[2018] ZALMPPHC 36
|

|

Setati v Road Accident Fund (1963/2014) [2018] ZALMPPHC 36 (29 March 2018)

SAFLII
Note:
Certain
personal/private details of parties or witnesses have been
redacted from this document in compliance with the law
and
SAFLII
Policy
REPUBLIC
OF SOUTH AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA
LIMPOPO
DIVISION, POLOKWANE
CASE NO:1963/2014
In
the matter between:
MANOKO WALTER
SETATI:

PLAINTIFF
And
THE ROAD ACCIDENT
FUND:

DEFENDANT
JUDGEMENT
SEMENYA J:
[1]
This action arises out of a collision that occurred along
Bochum-Mydarling public road on the 16 May 2013, between a donkey

cart and a motor vehicle with registration numbers and letters
[B...]. The plaintiff, who was a passenger on the donkey cart at
the
time of the collision, instituted action for damages suffered as a
result of the injuries he sustained due to the collision.
[2]
The issue of merits and quantum were separated. The merits were
settled in that the defendant admitted 100% liability as may
be
proved by the plaintiff. This judgement is only on the issue of loss
of earnings/earning capacity for which the plaintiff claims
an amount
of R2 000 000.00
[3]
As at the date of the collision, the plaintiff was 31years old and
self-employed as a hawker selling accessories such as hair
piece
walking from house to house.  He also received government
disability grant on occasional basis. Following the accident,
the
plaintiff stopped selling and did not generate any income until
August 2015 when he opened a spaza shop with the assistance
of two
other people. His highest educational standard passed is Grade 11.
[4]
Apart from earning a living as a hawker pre-accident, the plaintiff
was previously employed as a brick layer between February
and April
2009 where he was earning R900 per month. He left the job because the
employer was not paying him on time. Between 2011
and 2012, the
plaintiff worked for one Mr Thupana as a recycling man where he was
earning R800.00 per month. He quit his job because
his foot was
giving him problems.
[5]
It is common cause that the plaintiff suffered loss of income
as a result of the collision. In the case of
Dieppenaar v Shield
Insurance Co Ltd
1979 (2) SA 904
(A)
at par 9 it was held that:
“
In
our law under the lex Aquilia, the defendant must make good the
difference between the value of the plaintiff’s estate
after
the commission of the delict and the value it would have had if the
delict had not been committed. The capacity to earn money
is
considered to be part of a person’s estate and the loss or
impairment of that capacity constitutes a loss, if such loss

diminishes that estate.”—See also Rudman v Road Accident
Fund
2003 (2) SA 234
SCA.
[6]
I am called upon to determine the nature and extent of the loss
suffered by the plaintiff on the basis of the evidence presented

before me in the form of expert reports and the amount the defendant
should be ordered to pay to make good the difference between
the
value of his estate pre and post the commission of the delict.
[7]
The parties agreed that the case will be argued only on the basis of
the joint minutes prepared by the following experts:
Orthopaedics Dr P T Kumbirai (Kumirai)
o.b.o plaintiff and Dr W E Williams (Williams) –  o.b.o
the defendant;
Industrial Psychologists  Moiponi
Kheswa (Kheswa) o.b.o plaintiff and Nicoline Kotze (Kotze) o.b.o
defendant.
Occupational therapists Ms P S Tom
(Tom) o.b.o plaintiff and Ms K Montwedi (Montwedi)-  o.b.o the
defendant.
These
reports were admitted as evidence by consent of the parties. No oral
evidence was therefore heard.
[8]
The injuries noted by Dr Kumburai are a fracture of the left
clavicle, low back pain, injury left zygoma-opinion deferred to

maxillo-facial surgeon, loss of teeth- opinion deferred to dentist,
abrasions right medial malleolus, laceration dorsum left wrist
and
laceration right elbow.
[9]
Dr Williams on the other hand recorded the following injuries: a
fracture of the proximal one third of the shaft of the left
clavicle,
an impact injury of the left hemithorax, possibly fracture of the 2
nd
rib, abrasions over the superior aspect of the left shoulder,
lacerations at the left wrist and right elbow, impact/straining
injury of the right ankle and hind foot and straining injury of the
thoracolumbar spine. In addition, Dr Williams further make note
of
the plaintiff’s severe pre- accident deformity on his left
foot. The importance of this deformity will become evident
later in
this judgement.
[10]
Occupational psychologists agree that the plaintiff is, as a result
of the injuries that he has sustained, suited for work
with sedentary
to light physical demands.  Ms Tom opines that should it be
confirmed that the plaintiff owns a spaza shop,
which is considered
to be light work in nature, this will in effect mean that he has
retained adequate physical capacity to continue
with his business. Ms
Montwedi on the other hand opines that the plaintiff is a fair
competitor in the open market.
[11]
Industrial psychologists agree that it is difficult to postulate on
the earning structure for self-employed persons such as
the plaintiff
in this matter. Kheswa suggests that the earnings of self-employed
persons in general, should be employed for purposes
of calculation of
loss. She states that according to Koch (2015), these earnings will
be in the range of R7 300. 00 –
R18 600 - R53 500.00
per annum. She further reports that there is room for progression in
that the plaintiff managed
to establish himself as a business owner
at a very young age.
[12]
Ms Kotze on the other hand suggests that the calculations should be
based on the plaintiff’s reported earnings, being
in the
average of R1500.00 per month. Contrary to the views of Kheswa, Kotze
is of the opinion that, due to the high rate of unemployment,
there
is very little room for the plaintiff’s business to progress in
that  many people try to earn a living as hawkers
and this has
the effect of increasing competition and decreasing profit.
[13]
The two psychologists differ with regard to the retirement age of the
plaintiff, with Kheswa suggesting that he can work up
to 65 years up
to 75 depending on his general health. Kotze on the other hand,
states that the plaintiff’s deformity in the
form of partial
blindness and deformed left foot, should be considered.
[14]
Kotze stated in the joint minutes that the plaintiff did not disclose
the fact that he is running a spaza shop during consultation.
She
however opines that if this fact is accepted, the court should find
that the plaintiff would be able to generate the same income
as he
has generated before the accident, if not more, from the spaza shop
with the assistance of his nephew and sister. It is necessary
to
state that the fact that the plaintiff is running a spaza shop is not
in dispute.
[15]
With regard to the possibility of growing the business, it was argued
on behalf of the defendant that the court should take
the plaintiff
as is,
i.e
a semi blind person with a sever  left foot deformity. It was
submitted further that it would be unreasonable to expect the

plaintiff, who is physically challenged, to work up to 70 years. It
was argued that in view of the fact that the plaintiff was
the owner
of a spaza shop from which he generated income of R700. 00, the court
should conclude that his loss is R800. 00.
[16]
In
Southern
Insurance Association Limited v Bailey NO
1984 (1) SA 98
(A)
at 113F-114E, Nicholus JA stated as follows:
“
Any
inquiry into damages for loss of earning capacity is of its nature
speculative, because it involves a prediction as to the future,

without the benefits of crystal balls, soothsayers, augurs 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 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 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 on the soundness of
the assumption, and these may vary from strongly probable to
the
speculative.
It
is manifest that either approach revolves on guesswork to a greater
or lesser extent. But court cannot for this reason adopt
a non possum
attitude and make no award…In a case where the court has
before it material on which 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 the
appellant’s counsel) as to what is
fair and reasonable is nothing more than a blind guess…”
-See
also the unreported case of
The
RAF v Sweatman (162/2014)
[2015] ZASCA
22
(20 March 2015).
[17]
For actuarial calculations, the plaintiff is relying on the report
compiled by Koch. The defendant on the other hand is relying
on that
compiled by Robert Oketch of NBC. Of the two scenarios referred to in
the report compiled by  Oketch, I am of the
view that it would
be appropriate to have regard to scenario 2, in view of the fact that
it allows for spaza shop earnings of R650
per month, of which 30%
goes towards costs of two assistants. That he owns a spaza shop is in
any event a matter of common cause.
Allowance for the deduction of an
amount of R68 915.00 the plaintiff received as disability grant
post-accident is also made
in this scenario 2.
[18]
Both actuaries reject the view expressed by Kotze that the plaintiff
is likely to generate more income from the spaza shop
than the one he
used to make as a hawker. Oketch is of the view that it is not
realistic to allow for this higher income without
simultaneously
allowing for capital to stock the spaza in order to produce that same
higher income. I tend to agree with them in
this regard. It is my
view that the plaintiff is disadvantaged in that he will now be
required to share the money that he will
generate with other two
people. Oketch calculated the total loss suffered by the plaintiff as
R269 567 after allowing deductions
for contingency of 5% for
past loss and 25% for future loss of earnings.
[19]
With regard to the report compiled by Koch, the total loss as
calculated on the basis of the report compiled by Kheswa, is

R808 626.  He calculated the loss as R241 066, as
calculated on the basis of the report compiled by Kotze. No general

contingencies have been applied by Koch except for allowance for
early death.
[20]
Counsel for the defendant argued that it would be unreasonable for
the court to accept that the plaintiff would most likely
retire at
age 67. It was contended that the court should have regard to the
fact that the plaintiff would most likely retire earlier
due to
severe disability on the right foot as well as the fact that he is
partially blind. It was submitted that the likelihood
is that he will
retire at age 60 when he will be eligible for pension grant from the
government. I find this argument to be credible
in that the
likelihood is that the older the plaintiff grows, the more the
chances that his foot will give him problems. It is
reported that he
left one of his previous employment because his foot was painful.
[21]
Koch’s calculations based on Kheswa’s calculations, which
suggests that the plaintiff will be able to continue
to work up to
age 65-70, is rejected on the basis that the plaintiff’s
deformity on his left foot and the fact that he is
short sighted was
not taken into account when that report was compiled. It is however
understandable in view of the fact that Kheswa
did not have the
advantage of the report compiled by Williams in which the deformity
is clearly depicted on the photos.
[22]
One other aspect that persuades me to reject the calculations based
on Kheswa’s report is that it will be unreasonable
to calculate
the loss based on the general earnings of self-employed persons as
opposed to the actual earnings of the plaintiff
pre-accident. I agree
with Kotze’s reasoning that the plaintiff provided the
Industrial psychologists with certain amounts
as the money he earned
as a hawker and that the court should make its findings based on that
aspect. As the amounts furnished to
the two Industrial Psychologists
differ, I am inclined to accept that the average of the two amounts,
being R1 500.00 is what the
plaintiff was earning.
[23]
It was argued on behalf of the plaintiff that the court must take
into consideration the fact that the plaintiff has managed
to start a
business at an early age in spite of his disabilities and that on
that basis alone, the court must accept that the business
was bound
to grow. I however agree with Kotze’s opinion that the level of
unemployment in this country has left many people
with little option
but to resort to the type of business run by the plaintiff. It is
indeed so that this increases competition
and limits the possibility
of growth.
[24]
I accept that the plaintiff was unable to operate as a hawker and to
generate income for some time as a result of the collision.
This
constitutes loss of earnings. I however agree with actuaries that a
deduction in the amount he received as grant from government
must be
made. It is indeed correct so that deduction of general
contingencies, what are referred to in Sweatman (above) as the

hazards of life, is the prerogative of the courts. Having said so, I
however align myself with the deductions as suggested by Oketch
as it
is substantiated and supported by the facts.
[25]
With reference to the statement made by Nicholus JA in Bailey above I
am also of the view that while the calculations made
by the actuaries
may be no more than an informed guess, they have are an attempt
to ascertain the value of what was lost
on a logical basis.  The
amount of R269 567 arrived at by Oketch as the total loss suffered by
the Plaintiff is found to be
fair and reasonable.
[26]
I am satisfied that the plaintiff has suffered loss or impairment of
his capacity to earn money post the collision. I am further
satisfied
that this loss has diminished his estate and the defendant is
required to make good that loss.
[27]
I make the following order:
27 .1 The defendant shall pay to the
plaintiff the amount of R267 567.00 together with interest
thereon calculated at the rate
of 15.5% per annum from a date 14 days
after the judgement to the date of payment;
27.2. The defendant shall the
plaintiff’s costs of suit on the High court party and party
scale. Such costs shall include
the fees and qualifying expenses of
all expert witnesses that prepared medico-legal reports that were
referred to during argument;
27.3 payment of travelling expenses of
the plaintiff to attend the medico-legal examinations with the
defendant’s experts;
26.4 the reasonable costs of attending
to the examinations and obtaining the medico-legal, and such reports,
addendum reports and
any joint reports;
27.5 The reasonable taxable costs of
transportation of the plaintiff to the medico-legal examinations;
27.6 The costs of preparation of the
trial bundle; and
27.7
the reasonable costs of the plaintiff’s attorney which shall
include travelling costs, attendance to court,, costs of
preparation
for pre-trial conferences and formulation of pre-trial minutes and
the costs for actual attendance to pre-trial conferences.
M.V SEMENYA
JUDGE
OF THE HIGH COURT POLOKWANE, LIMPOPO DIVISION
APPEARANCES
Attorneys
for the Plaintiff
: Chueu Attorneys
Counsel
for the   Plaintiff
:
Attorney
for the Defendant
: Hamman-Moosa
Counsel
for the Defendant
:
Date
Reserved

: 13 February 2018
Date
of Judgment

: 29 March 2018

Back to Law Reports