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[2018] ZASCA 151
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Road Accident Fund v C K (1024/2017) [2018] ZASCA 151; [2019] 1 All SA 92 (SCA); 2019 (2) SA 233 (SCA) (1 November 2018)
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THE
SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Reportable
Case no: 1024/2017
In
the matter between:
THE
ROAD ACCIDENT
FUND APPELLANT
and
C
K RESPONDENT
Neutral
citation:
RAF v C K
(1024/2017)
[2018] ZASCA 151
(01
November 2018)
Coram:
Shongwe ADP, Dambuza, Mocumie and
Schippers JJA and Nicholls AJA
Heard:
21 August 2018
Delivered:
01 November 2018
Summary:
Damages – bodily injuries –
loss of income and income earning capacity must be proved –
where loss is established
the court must use available evidence to
determine quantum of loss – determination by trial court of
quantum based on undisputed
factual findings may not be set aside on
appeal, unless the trial court is clearly wrong. Trial court clearly
wrong in relying
on salary scales that were not compatible with the
evidence and failing to take into account the claimant’s age
and pre-morbid
career – post morbid contingencies
increased to 35%.
ORDER
On
appeal from
:
Eastern
Cape Division of the High Court, Grahamstown (Makaula and Smith JJ
and Mageza AJ sitting as court of appeal):
1
The appeal is upheld.
2 Each party is to pay their own
costs.
3 The order of the court a quo is set
aside and replaced with the following:
‘
The
appeal succeeds to the extent set out below.
The defendant is to pay the plaintiff
the sum of R3 038 137 in respect of past and future loss of earnings.
Each party is to pay their own costs’
JUDGMENT
Dambuza
JA (Mocumie JA concurring):
Introduction
[1]
On 28 November 2009 the respondent, Mr C K sustained serious bodily
injuries in a motor vehicle collision near Blue Horizon
Bay in Port
Elizabeth. He then instituted an action against the appellant, the
Road Accident Fund (the Fund), claiming damages
for serious bodily
injuries he sustained in the collision.
[2]
On the day of the trial the merits were settled between the parties,
the Fund having conceded liability for 100 per cent of
the damages
which Mr K would prove to have suffered as a result of the collision.
The Fund agreed to pay R231 891.77 in settlement
of past medical and
hospital expenses suffered by Mr K. It also promised to furnish a
written undertaking assuming liability for
Mr K’s future
medical and hospital expenses as provided in
s 17
(4)(a) of the
Road
Accident Fund Act, 56 of 1996
. The matter then proceeded to trial for
determination of the quantum of general damages, past and future loss
of income or income
earning capacity, and costs of suit.
[3]
Following a five day trial on those issues the Eastern Cape Division
of the High Court, Port Elizabeth (the trial court) determined
that
the Fund had to pay Mr K R700 000.00 for general damages, R4 562
306.00 for past and future loss of earnings, interest on
the awarded
damages, and costs of suit, including the qualifying costs of certain
medical expert witnesses.
[4]
With the leave of the trial court the Fund appealed to the Full Bench
of the Eastern Cape Division of the High Court (the court
a quo),
against the award made in respect of past and future loss of earnings
or earning capacity and costs. The court a quo dismissed
the appeal
with costs. The appeal against the order of the court a quo is before
us with the leave of this court.
Background
facts
[5]
Mr K was a student at the time of the collision. He was enrolled at
the East Cape Midlands College in Uitenhage for Engineering
studies.
His ambition was to be a diesel mechanic. Whilst registered as a
student, Mr K also assisted his father in his laundry
business. At
the same time he co-owned a business known as R-Tec Motorsports
together with his brother. The business sold car accessories
and
spare parts. It was operated from the garage at the home of Mr K’s
parents.
[6]
About a year after the collision Mr K returned to work at R-Tec
Motorsport on a full time basis. He was no longer able to assist
his
father at the laundry with duties such as delivery, as his arms and
hip were in a cast. At some stage his brother left the
business as he
had secured employment elsewhere. Mr K was still running the business
at the time of trial with the assistance of
Mrs K who managed the
business finances and administration.
The
trial
[7]
The injuries sustained by Mr K and the sequelae thereof were not in
dispute at the trial. He had sustained a closed head injury,
a
compound fracture of the right forearm, a left upper arm brachial
plexus, and a fracture of the spine with attendant mechanical
backache and persistent lower back pain. These injuries resulted in
Mr K being unable to finish his studies and pursue the
type of
work that he was interested in. The prognosis was that he would
probably only be able to perform mild and light sedentary
work.
[8]
Despite admitting the extent of the injuries and the effect thereof
on Mr K’s future income earning capacity, the Fund
contested
the quantum of his claim for future loss of income, contending that
he had not, in effect, suffered any loss of income.
This argument was
based on his ownership of R-Tec Motorsport and the income he derived
from that business. The complaint was that
Mr K had produced no
evidence to establish his earnings from R–Tec Motorsport. There
was therefore no basis on which it could
be concluded that his past
income or future patrimony had been reduced or if it had been
reduced, the extent of such reduction,
so it was contended.
[9]
The case advanced by Mr K before the trial court was that prior to
the collision he had aspired to be a diesel mechanic, an
ambition he
would have fulfilled but for the accident. It was alleged that on
finishing his studies he would have been able to
do an apprenticeship
for such vocation and thereafter work as a skilled diesel mechanic.
Because of the injuries he sustained in
the collision, he could not
finish his studies and would therefore not be employable as a diesel
mechanic or in any similar occupation
in the future. He contended
that he would have worked as a diesel mechanic, earning an income
that would increase in line with
inflation, until the retirement age
of 65 years.
Evidence
[10]
At the trial the following witnesses testified on behalf of Mr K: Mrs
M K, Mr Ian Meyer, a clinical psychologist, Ms Ansie
van Zyl, an
occupational therapist, Mr Martiny, an industrial psychologist, and
Mr Brown, a lecturer at Eastern Cape Midlands College.
On behalf of
the Fund, Mr de Vos testified as an expert motor mechanic and
businessman and Mr Olivier gave evidence as an employee
of the
Eastern Cape Midlands College. The plaintiff did not testify.
[11]
For the purpose of this appeal only portions of the evidence of these
witnesses bears reference. According to Mrs K she had
known Mr K for
nine months at the time of the collision. They later got married.
From 2005 Mr K had been running the ‘garage
shop’ (R-Tec
Motorsport) together with his brother. The shop sold ‘motor
sport accessories [such as] rims and speakers’.
In some case Mr
K would also do installations of these accessories into his
customers’ cars. The ownership of the business
was held through
a close corporation of which Mr K became the sole member after his
brother left the business. Mrs K assisted her
husband in running the
business, particularly with bookkeeping and administration.
[12]
Mr Meyer described Mr K as ‘no longer competitive in terms of
what he could have done and could have achieved whether
as a mechanic
or as in other aspects and . . . not competitive in the open labour
market or to run a business . . .’ His
opinion was that Mr K
had suffered a moderate-severe frontal lobe head injury from the
collision, resulting in extensive neurocognitive
deficits. Hence he
would not be able to complete his studies and was unemployable in the
open labour market.
[13]
The nub of Mr Martiny’s opinion was that had the accident not
happened Mr K would have completed his studies and would
have
proceeded to work as a diesel mechanic. He would probably have
continued running the business in addition to his full time
employment, albeit on a small scale.
[14]
According to Mr Martiny, Mr K would have completed his studies,
including his trade tests, by 2012 and he would then begin
his
apprenticeship. By 2016 he would have started employment as a skilled
employee at the Paterson C1/C2 level. At the age of 45
to 50 years he
would have advanced to the Paterson C3/C4 level where he would remain
until retirement age of 65 years.
[15]
All this evidence was not disputed. Cross examination did not reveal
any significant weaknesses and the Fund did not tender
any expert
evidence to the contrary. An actuarial calculation to estimate
pre-morbid and post-morbid past and future loss of earnings
was done
based on the scenario mapped out by Mr Martiny. A contingency of 5%
and 15% was applied in respect of past and future
loss of earnings,
respectively.
[16]
Mr Martiny postulated three scenarios for projection of Mr K’s
income earning capacity, starting from 2012 until he reached
65
years. The first was based on basic salary packages. The second was
based on package rates offered by large corporations. The
third,
which was considered to be conservative, postulated a late entry into
the open labour market. Both the trial court and the
court a quo
found that the chosen earnings scenario was founded on a logical and
reasonable basis.
[17]
The actuary calculated the past loss of earnings suffered by Mr K
from January 2010 up to December 2011 on the basis of his
half-share
of the business profits in an amount of R30 000.00 per year. This
figure was based on the evidence of Ms Van Zyl who
testified that
when she visited the business she had sight of Mr K’s financial
statements and an invoice book from which
Mr K provided information
relating to his recent sales and turnover. There she learnt that Mr K
drew a salary of R5 000.00 per
month from the business.
Findings
of the trial court
[18]
The trial court found that the failure by Mr K to produce evidence
relating to his income from R-Tec Motorsport had no bearing
on the
determination of his future loss of income. This finding was based on
Mr Martiny’s undisputed opinion, drawn from
Ms Van Zyl’s
evidence that, for assessment of Mr K’s future loss of income
earning capacity, the income derived from
the business should be
regarded as being the same as if the accident had not happened; the
reason being that the Ks would have
continued with the business even
if Mr K would have qualified and worked as a diesel mechanic.
[19]
The trial court also considered the evidence by Ms Van Zyl that
cognitive and behavioural deficits suffered by Mr K as a result
of
the accident compromised his short term memory and executive
functioning impairment. As a result he had great difficulty planning
and executing work related to the business. He had to keep written
reminders of what he had to do and was dependant on his wife
for the
administration of the business and its finances. The Ks did not
consider the business financially viable.
In
the court a quo
[20]
The appeal before the court a quo was, in the main, founded on the
same narrow basis as the opposition to the claim for loss
of income
or income earning capacity in the trial court. The only other
contentions related to the propriety of the contingencies
determined
by the trial court and the award of costs of two counsel. Regarding
contingencies, it was submitted on behalf of the
Fund, that the trial
court, having made the award for loss of income earning capacity
despite the absence of acceptable evidence
of loss of future income,
should have applied higher contingencies than it did.
[21]
The court a quo confirmed the order of the trial court and the
findings on which it was based. It remarked that Mr Martiny
and the
actuary had based their calculations in respect of past loss of
earnings and future loss of earning capacity on the best
available
evidence (ie, the drawings of R5 000.00 per month). Once it was
established that Mr K had suffered damages in the form
of loss of
earnings or loss of future earning capacity, it was incumbent upon
the trial court to determine reasonable damages on
the basis of the
available evidence. For these reasons the court a quo then dismissed
the appeal with costs.
In
this court
[22]
In this court the same issues considered by the court a quo were
raised as grounds for the appeal, save that the contention
for
increased contingencies assumed more stature. It was, again, conceded
that Mr K would have pursued his chosen career and followed
the path
set out by Mr Martiny. However, he still had not proved that he
suffered actual loss of income in the past or that he
would suffer
such loss in the future. He failed to produce the evidence even
though it was available. Consequently the whole award
made by the
trial court should be reversed.
[23]
The main point of difference between the parties, it was stressed,
was the failure to provide evidence of income derived from
R-Tec
Motorsport. Further, the effect of Mr K’s slow progress in his
studies was a relevant factor in the determination of
contingencies.
And, compensating Mr K for loss of income for two years would be
overcompensation, because he resumed the running
of the business one
year after the accident. The starting point therefore, in respect of
the pre-morbid scenario should be 20 per
cent.
[24]
In respect of post-morbid contingencies the submission on
behalf of the Fund was that a contingency of 50 per cent or more
should
be applied to future loss of earnings. In support thereof an
illustration was made that on the suggested income of R5 000.00 per
month, over Mr K’s remaining working years (39 years reckoned
from 2012), he would earn R2 340 000.00. In light thereof the
figure
of R4 354 766.00 was unjustified, so it was argued. In addition the
Fund contended that the trial court erred in accepting
the income
projection based on scenario 3, ie the conservative scenario.
Calculation
of past and future loss of income earning capacity
[25]
Indeed, a physical disability which impacts on the capacity to an
income does not, on its own, reduce the patrimony of an injured
person. There must be proof that the reduction in the income earning
capacity will result in actual loss of income.
[1]
However,
where
loss of income has been established but proof of the quantum thereof
cannot be produced in the usual manner, the courts have
shunned the
non-suiting of a claimant and have preferred to make the best of the
evidence tendered to give effect to the finding
of proved reduction
in loss of income earning capacity. As long as almost a century ago,
in
Herman
v Shapiro
[2]
the court
said
the following:
‘
Monetary
damage having been suffered, it is necessary for the Court to assess
the amount and make the best use it can of the evidence
before it.
There are cases where the assessment by the Court is very little more
than an estimate; but even so, if it is certain
that pecuniary damage
has been suffered, the Court is bound to award damages.’
[26]
Since then this dictum has been quoted with approval in a number of
cases.
[3]
In
Esso Standards SA (Pty)
Ltd v Katz
[4]
the court held that ‘where the best available evidence to the
plaintiff has been produced, though it is not entirely of a
conclusive character and does not permit a mathematical calculation
of the damages suffered still, if it is the best evidence available
the court must use it and arrive at a conclusion based on it.’
[27]
In this case it was established that Mr K had suffered past loss of
income and loss of future income earning capacity. It was
incumbent
upon the trial court to assess the quantum thereof on the best
available evidence. In doing so the trial court considered
the
undisputed evidence of Mr Martiny and Ms Van Zyl. It made factual
findings thereon which the court a quo, quite correctly,
found no
reason to interfere with. Those findings remain extant and unless the
trial court was clearly wrong in making them we
also are not at
liberty to interfere with them. In any event, no such contention was
made by the Fund.
[28]
Importantly, it must be remembered that, as both the trial court and
the Full Bench said, it is only in respect of
past
loss of
earnings that the income derived from R-Tec Motorsport was relevant.
The income of R5 000.00 was only relevant in respect
of past loss of
earnings.
[29]
Mr K’s claim for future loss of income was predicated on the
income he would have earned as a diesel motor mechanic.
Calculation
of future loss of income was postulated on this scenario. The
undisputed evidence was that, even as a diesel mechanic,
he would
have continued running the business, on a smaller scale, with the
assistance of his wife. It was never Mr K’s case
that his
patrimony had been reduced to the extent of future revenue losses in
R-Tec Motorsport. Hence the finding by the trial
court, that income
from the business should play no role in determination of his future
loss of earnings, was the correct one.
Again there is no valid basis
to interfere with the finding of the trial court in this regard. The
post-morbid actuarial calculation
was made on the following factual
basis:
‘
Now
that the accident has occurred, it is assumed that the Claimant has
not yet earned any income to date and he has no future residual
earning capacity. Any residual earning capacity can be allowed for by
applying higher general contingency deductions’.
On
the record, there is no valid basis for this court to interfere with
an assessment of damages that is based on this factual basis.
Contingencies
[30]
It is trite that general contingencies cover a wide range of
considerations which vary from case to case.
[5]
Five per cent and 15 per cent for past and future loss, respectively,
have become accepted as ‘normal contingencies’.
[6]
The usual considerations include, taxation, early death, saved travel
costs, loss of employment, promotion prospects divorce, etc.
[7]
The actuarial assessment, done on 15 May 2015, took these factors
into account.
[31]
Mr K’s age, it was submitted, should be taken into account in
respect of both pre-morbid and post-morbid contingencies.
The
argument was that his pre-morbid job as a mechanic would have been
high risk. Further, the many uncertainties in respect of
Mr K’s
post-morbid circumstances should aggravate contingencies.
Alternatively the higher contingency ought to have been
applied based
purely on his failure to prove his income from R-Tec Motorsport.
[32]
Indeed the factors raised on behalf of the Fund, including age, are
relevant considerations in determining contingencies. As
this court
said recently, in
Bee v Road
Accident Fund
[8]
the younger the victim the longer the period over which the
vicissitudes of life will operate and the greater the uncertainty in
assessing the claimant’s likely career path. In that case a
contingency of 15 per cent for future loss of earnings over a
work
lifespan of 11 years was appropriate.
[33]
It does not appear that the contentions made before us were made
before the trial court. This may have been grounded in the
‘all
or nothing’ stance that the Fund took in presenting its case.
The Fund maintained the position that Mr K was not
entitled to any
damages because of his failure to prove the income derived from R-Tec
Motorsport. But the relevance of indeterminate
mitigatory factors
were not lost to the trial court. It is in this context that it
considered the most conservative of the proposed
scenarios to reach
the award it made. It cannot be said that that court failed to take
relevant factors into account.
[34]
It is important to highlight that this court’s determination of
the contingency at 15 per cent, which it considered to
be somewhat
high, was driven by factors peculiar to that case, such as that
claimant’s adverse health condition and participation
in sport
that was considered dangerous. Indeed at 29 years Mr K was young. But
he was almost halfway through his work lifespan.
And although, as a
motor mechanic he would have worked with relatively heavy machinery,
I do not think his occupation would be
considered as high risk as the
surfing and cycling pastime that the claimant in
Bee
engaged
in pre-morbidly.
Costs
[35]
Lastly, it was submitted on behalf of the Fund that the award of
costs of two counsel was not warranted in this case. It is
trite that
the award of costs is a matter within the discretion of the trial
court. Such discretion must, of course, be exercised
judicially. In
its judgment the trial court considered pertinently the same
submission made on behalf of the Fund. It found this
matter
comparable to
Maritz v Road
Accident Fund
.
[9]
[36]
The Full Bench found that: ‘having regard to the issues that
fell for determination, the evidence adduced in this matter,
and the
complexity of the expert witnesses’ testimonies, Goosen J’s
award in this regard is pre-eminently defensible’.
I can
accordingly not find any ground on which this court can interfere
with that award’.
[37]
It is not the Fund’s contention that the trial court, in
awarding costs as it did, failed to exercise its discretion
judiciously or was patently wrong in some way. The contention merely
was an invitation for this court to reconsider the issue.
Ironically,
the submission on behalf of the Fund was that should it be successful
in the appeal costs of two counsel should be
awarded in its favour. I
cannot find any valid basis for this court to interfere with the
costs order of the two courts below.
[38]
In the circumstances I would have dismissed the appeal with costs,
including the costs consequent upon the employment of two
counsel.
_________________
N Dambuza
Judge of Appeal
Nicholls
AJA (Shongwe and Schippers JJA concurring)
[39]
I have read the judgment of my colleague, Dambuza JA, and I am
largely in agreement with the contents thereof except insofar
as it
relates to the applicable contingency deduction. My point of
departure is the factual basis for the three scenarios set out
in the
actuarial report and the supposed undisputed findings that the
accident rendered Mr K unemployable.
[40]
Any claim for future loss of earning capacity requires a comparison
of what a claimant would have earned had the accident not
occurred
with what a claimant is likely to earn thereafter. The loss is the
difference between the monetary value of the earning
capacity
immediately prior to the injury and immediately thereafter. This can
never be a matter of exact mathematical calculation
and is, of its
nature, a highly speculative inquiry. All the court can do is make an
estimate, which is often a very rough estimate,
of the present value
of the loss.
[10]
[41]
Courts have used actuarial calculations in an attempt to estimate the
monetary value of the loss. These calculations are obviously
dependent on the accuracy of the factual information provided by the
various witnesses. In order to address life’s unknown
future
hazards, an actuary will usually suggest that a court should
determine the appropriate contingency deduction. Often a claimant,
as
a result of the injury, has to engage in less lucrative employment.
The nature of the risks associated with the two career paths
may
differ widely. It is therefore appropriate to make different
contingency deductions in respect of the pre-morbid and the
post-morbid
scenarios. The future loss will therefore be the
shortfall between the two, once the appropriate contingencies have
been applied.
[42]
Contingencies are arbitrary and also highly subjective. It can be
described no better than the oft-quoted passage in
Goodall
v President Insurance Co Ltd
[11]
where the
court said:
‘
In
the assessment of a proper allowance for contingencies, arbitrary
considerations must inevitably play a part, for the art or
science of
foretelling the future, so confidently practiced by ancient prophets
and soothsayers, and by authors of a certain type
of almanack, is not
numbered among the qualifications for judicial office.’
[43]
It is for this reason that a trial court has a wide discretion when
it comes to determining contingencies. An appeal court
will therefore
be slow to interfere with a contingency award of a trial court and
impose its own subjective estimates. This court
in
Road
Accident Fund v Guedes
[12]
set out the
circumstances under which an appeal court is entitled to interfere
with the trial court’s assessment of the appropriate
contingency deduction. These are where: (a) there has been an
irregularity or misdirection (for example the court considered
irrelevant
facts or ignored relevant facts; (b) the appeal court is
of the opinion that no sound basis exists for the award made by the
trial
court; (c) where there is a substantial variation and striking
disparity between the award made by the trial court and the award
which the appeal court should have made.
[44]
Some general rules have been established in regard to contingency
deductions, one being the age of a claimant. The younger
a claimant,
the more time he or she has to fall prey to vicissitudes and
imponderables of life. These are impossible to enumerate
but as
regards future loss of earnings they include, inter alia, a downturn
in the economy leading to reduction in salary, retrenchment,
unemployment, ill health, death, and the myriad of events that may
occur in one’s everyday life. The longer the remaining
working
life of a claimant, the more likely the possibility of an unforeseen
event impacting on the assumed trajectory of his or
her remaining
career. Bearing this in mind, courts have, in a pre-morbid scenario,
generally awarded higher contingencies, the
younger the age of the
claimant. This court, in
Guedes,
relying on
Koch’s
Quantum
Yearbook
2004,
found the appropriate pre morbid contingency for a young man of
26 years was 20 per cent which would decrease on a sliding
scale as
the claimant got older.
[13]
This, of
course, depends on the specific circumstances of each case but is a
convenient starting point.
[45]
In this matter Mr K was 23 years old when the accident took place.
The court a quo was of the view that 15 per cent was the
appropriate
pre-morbid contingency deduction. This was upheld by the full court
who were of the view that of the three scenarios
postulated by the
experts, this was the most conservative, a factor which had
‘obviously’ been taken into account by
the trial court in
coming to its conclusion.
[46]
At the time of the accident Mr K was enrolled at a Technical College
training to be a motor mechanic. It was common cause that
a National
Training Certificate (N1 or NTC1) is the equivalent of a Technical
grade 10, N2 the equivalent of a Technical grade
11 and N3 the
equivalent of a Technical grade 12 or matric. Up to that point Mr K
had taken 7 years to complete his N1 certificate
and had passed only
2 courses towards his N2 certificate, despite being described by his
wife as a diligent and dedicated student
in the 9 months that she
knew him prior to the accident. His academic record indicates that of
the 18 subjects that he had registered
for, he wrote only six of the
exams. Of these he passed three with the following results: 83 per
cent (Motor Trade Theory N1),
86 per cent (Engineering Drawing N1)
and 45 per cent (Motor Trade Theory N2) respectively.
[47]
The ‘conservative’ scenario referred to by the court a
quo was calculated on information provided by the industrial
psychologist, Mr Martiny. This assumes that Mr K would complete
his N3 within three years of the accident and would enter
the job
market as a first year apprentice at a salary of R48 000 per annum
which would progressively increase to a salary level
of R246 000 per
annum, nine years after the accident. He would take his trade tests
after five and a half years and thereafter
be employed as a qualified
diesel mechanic. These are highly optimistic assumptions. Based on
his past academic endeavors, the
likelihood that Mr K would have
obtained an N3 in that time period, or at all, is in my view remote.
The undisputed evidence of
Mr de Vos, a qualified motor mechanic and
businessman with 24 years of experience in the motor industry in the
Port Elizabeth area,
was that after an N3 qualification it would take
a person approximately two and a half years to do the voluntary trade
test. The
major dealerships which he had contacted required an NTC3
Grade 12 with Mathematics and Science to qualify as a diesel
mechanic.
None would employ anyone with an N1.
[48]
Further, the assumed salary scales are not compatible with the
evidence. Mr de Vos testified that he had contacted the major
dealerships referred to by Mr Martiny to ascertain the relevant
salary levels. A first year apprentice would earn between R900
to
R980 per week at one of the larger dealerships in Port Elizabeth. At
the franchise business which Mr de Vos owns, qualified
mechanics with
between 3 and 9 years’ experience, earned a gross salary of R12
000 per month to R14 000 per month. Nonetheless
the actuarial
calculation was based on the plaintiff obtaining his N3 within 2
years and earning a first years’ apprentice
salary of R48 000
per annum, 2
nd
year R54 000 per annum, 3
rd
year R60 000 per annum, then passing the trade test and being
employed as a qualified diesel mechanic within 6 years and earning
R184 000 the following year.
[49]
These salary figures are not even borne out by Mr Martiny’s own
evidence. Mr Martiny testified that after looking at
advertisements
for apprentices in the area and speaking to ‘some people’,
he saw that starting salaries for apprentices
ranged between R800 and
R1200 per week so he ‘just took that average’. But the
level was clearly not the ‘average’.
Instead of pitching
Mr K’s salary in the average median, he assumed that it would
have been R4800 per month, the highest
level and one not in line with
the major dealerships. From this one can deduce that the
‘conservative’ scenario is
far from conservative.
[50]
The role of experts in matters such as these and the opinions they
provide can only be as reliable as the facts on which they
rely for
this information. Too readily, our courts tend to accept the
assumptions and figures provided by expert witnesses in personal
injury matters without demure. The facts upon which the experts rely
can only be determined by the judicial officer concerned.
An expert
cannot usurp the function of the judicial officer who is not
permitted to abdicate this responsibility – the court
should
actively evaluate the evidence.
[14]
Ideally,
expert evidence should be independent and should be presented for the
benefit of the court. It is not the function of an
expert witness to
advocate the client’s cause and attempt to get the maximum
payout, as most seem to believe.
[15]
This problem
is exacerbated by the Road Accident Fund (the Fund) which fails to
properly investigate the true situation of a claimant
and is content
to rely on projections and assumptions of experts with no factual
basis.
[51]
The additional difficulty I have with Mr K’s case is the
question of residual earning capacity. On no version has it
been
stated that the plaintiff has no residual earning capacity
whatsoever. Nor, indeed, can it be, because Mr K’s case is
that
he is earning R5000 per month assisting in the R-Tec Motorsport shop.
Ian Meyer, the clinical psychologist opined in his report
that Mr K
‘is unemployable on the open market in a competitive position,
although he may be able to continue in his current
capacity for some
time yet.’ In his evidence Mr Meyer said that the accident had
limited his ‘flexibility of choice’
and that he would not
be able to open a ‘High Street’ store. He also suggested
that the injury may have a bearing on
his retirement age.
[52]
Mr Martiny, stated: ‘The claimant will probably continue with
his business selling motor car accessories. His earning
for the last
6 months will probably suffice as a basis for calculating his future
earnings in this regard.’ Because of the
claimant’s
refusal to provide the financial statements of the business, no
proper assessment could be made of how viable
the business was, and
would be in the future.
[53]
None of the above is suggestive of an individual who is unable to
work in any capacity. Even his wife agreed that Mr K ‘handles
[himself] very well’, ‘has learnt to live with [the
situation] and adapted to his shortcomings.’ As a result
of the
Fund’s all or nothing approach, no expert evidence was led on
its behalf as to the claimant’s residual earning
capacity. Had
this been done, the court would have been in a more favourable
position to assess the damages suffered by comparing
the monetary
value of the pre morbid earnings with those of the post-morbid
scenario. The shortfall, once the relevant contingencies
had been
applied to both hypothetical scenarios would be the total sum of Mr
K’s damages for future loss of earnings capacity.
[54]
Instead we are faced with a situation where our only option is to
apply random contingencies to the pre-morbid scenario on
an ad hoc
and uninformed basis to compensate for any possible post-morbid
residual earnings capacity. This is precisely what was
suggested in
the final actuarial report – to apply higher general
contingency deductions to allow for any residual earning
capacity.
This court in
Bee
[16]
increased
the general pre-morbid contingency deductions for future loss of
earnings to 25 per cent notwithstanding the claimant
in that matter
was 54 years old and therefore in the latter half of his working
career. The court took into account various factors
including that
the claimant was diabetic and involved in adventure sports.
[55]
In this matter there are various considerations which impact on the
contingency deduction. Firstly, Mr K was 23 when the collision
occurred on 28 Nov 2009. He has a greater chance of being
subjected to the vicissitudes of life. Further, given his limited
employment history, there is greater uncertainty in assessing his
career path.
[17]
Mr K
has no real work record. Since failing Grade 9 and leaving school at
the age of 15 in 2001 he attended East Cape Midlands
College
(Uitenhage) in 2002 and 2003. He and his brother helped his father in
their laundry business. There is no evidence of how
long they ran the
business while their father was ill in January 2003. Mr K assisted in
the laundry business in 2004 and 2006 to
2009. There is also no
evidence as to whether he worked every day in his father’s
laundry, or the nature and extent of that
work. At the time of the
collision Mr K did not have good prospects of achieving success in
his field, as is evidenced by his academic
record referred to
above.
[18]
And he is
particularly subject to normal negative contingencies relevant to a
wage earner such as employability and loss of employment.
Secondly,
his pre-morbid earnings have, in my view, been inflated, even on the
so-called conservative scenario, for the reasons
set out above.
Finally, there is undoubtedly some residual earning capacity which
was not considered.
[56]
These three factors, in my view, militate against a general
contingency deduction of 15 per cent, in respect of future loss
of
earnings. This I find strikingly disparate with the contingency that
should have been applied. On the facts of this case, I
would apply a
contingency deduction of 35 per cent which would reduce the future
loss earnings from R4 354 766 to an amount of
R2 830 597. To this
should be added the past loss of earnings of R207 540.
[57]
In view of the attitude adopted by the Fund that Mr K had failed to
prove any loss income whatsoever, I am of the view that
it is not
just and equitable that they be awarded costs. Not only were they
unsuccessful on this aspect, but had this matter been
approached
differently Mr K may well have settled for a lesser amount, an
opportunity denied him in the circumstances.
[58]
In the result the following order is issued:
1 The appeal is upheld.
2 Each party is to pay their own
costs.
3 The order of the court a quo is set
aside and replaced with the following:
‘
The
appeal succeeds to the extent set out below.
The defendant is to pay the plaintiff
the sum of R3 038 137 in respect of past and future loss of earnings.
Each party is to pay their own costs’
_________________
C H Nicholls
Acting
Judge of Appeal
APPEARANCE
For
Appellant: H J van der Linde SC (with him T Zietsman)
Instructed
by:
Joubert
Galpin Searle, Port Elizabeth
Honey
Attorneys, Bloemfontein
For
Respondent: A Frost (with him B Westerdale)
Instructed
by:
Roelofse
Meyer Inc, Port Elizabeth
Kramer
Weihmann & Joubert, Bloemfontein
[1]
See
Rudman
v Road Accident Fund
2003 (2) SA 234
(SCA) at para 11.
[2]
Herman v
Shapiro & Co
1926 TPD 367
at 379.
[3]
See
Mkhwanazi
v Van der Merwe
1970 (1) SA 609
A at 631H although in this case this court found
that the award damages should not have been made in motion court
proceedings;
See also
Esso
Standards SA (Pty) Ltd v Katz
1981(1)
SA 964 A at 970 D-H.
[4]
Ibid.
[5]
Robert J
Koch
The
Quantum Yearbook
(2015) at 120
[6]
Ibid
[7]
Ibid
[8]
Bee v Road Accident Fund
2018 (4) SA
366
SCA (
Bee
)
at para 116.
[9]
Maritz v Road Accident Fund
(unreported
case no 2374/2009 delivered on 18 June 2015).
[10]
Southern
Insurance Association Ltd v Bailey NO
1984 (1) SA 98
(A) at 113F-114A.
[11]
Goodall
v President Insurance Co
Ltd
1978 (1) SA 389
(W) (
Goodall
)
at 392H-393A.
[12]
Road
Accident Fund v Guedes
[2006] ZASCA 19
;
2006 (5) SA 583
(SCA) (
Guedes
)
para 8.
[13]
Id para 9.
See also
Goodall
supra
fn 11.
[14]
Twine &
another v Naidoo & others
[2017]
ZAGPJHC 288 para 18 and the cases cited therein.
[15]
Whitehouse
v Jordan
[1980] UKHL 12
;
[1981]
1 All ER 267
(HL) at 276.
[16]
Bee
fn
8
at
118.
[17]
Id
para
116.
[18]
Compare
Minister of Defence
& another v Jackson
1991
(4) SA 23
(ZS) at 35E.