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[2016] ZAKZPHC 70
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G.R.R and Another v Netcare (Pty) Ltd t/a Umhlanga Hospital and Others (8164/07) [2016] ZAKZPHC 70; [2016] 4 All SA 195 (KZP) (8 August 2016)
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Certain
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IN
THE HIGH COURT OF SOUTH AFRICA
KWAZULU-NATAL
DIVISION, PIETERMARITZBURG
CASE
NO: 8164/07
DATE:
8 OCTOBER 2016
In
the matter between
G.
R. R.
First
Plaintiff
J.
G. R.
Second
Plaintiff
and
NETCARE
(PTY) LTD t/a UMHLANGA HOSPITAL
First Defendant
ALEXANDER
JOHN MACKINLEY
Second Defendant
SERGIO
DIEZ
Third
Defendant
ISMAIL GOOLAM HOOSED
RANDEREE
Fourth Defendant
SUMMARY OF DIRECTIONS TO THE
ACTUARIES
The
directions issued to the Actuaries, which are to be used as the basis
for their calculations, are summarized in the penultimate
paragraph
of this ruling.
If any aspect thereof is unclear, then
the reader is referred to the full text of this ruling.
RULING
KOEN
J:
INTRODUCTION:
[1]
The First Plaintiff
[1]
in his personal
capacity (hereinafter referred to as ‘G.’), his son J. G.
R.
[2]
(the Second
Plaintiff, hereinafter referred to as ‘J.’), and the
First Plaintiff in his representative capacity on behalf
of his minor
son T. B. R.
[3]
(hereinafter
referred to as ‘T.’) claim damages
[4]
arising from the
death of their wife and mother, B. R. (hereinafter referred to as
‘Mrs R.’)
[5]
who died on 4
October 2004
[6]
as a result of
acute intra-abdominal bleeding. The merits of the dispute were
settled by the Second Defendant
[7]
agreeing to
compensate G., J. and T. R. by payment of 75% of any damages suffered
by them by reason of any loss of support arising
from Mrs R.’s
death. What remains to be determined is the quantum of damages to
which G., J. and T. are entitled from the
Defendant. These are
claimed under the heading of loss of support and general damages.
[2]
The parties have agreed that the calculation of the appropriate
quantum for loss of support shall require input also from actuaries
and have therefore requested, based on the evidence I have heard to
date, that I determine the basis of the calculation pertaining
to the
loss of support to enable the actuaries to determine the loss. To
that end I am required to specify such directions and
assumptions
necessary to hopefully enable an actuarial quantification of the loss
(or for the quantum to be agreed after possible
compromise between
the parties based on their respective actuary’s calculations).
Alternatively, a further approach to this
court to determine a final
judgment sounding in money might be required.
[3]
In
Southern
Insurance Association Limited v Bailey
[8]
the approach
to be followed in a case of this nature was said to be as follows:
‘
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 day 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 guess
work, 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. See
Hersman
v Shapiro
& Co
1926 TPD 367
at 379
per
STRATFORD
J:
"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 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."
And
in
Anthony
and Another v Cape Town Municipality
1967
(4) SA 445
(A) HOLMES JA is reported as saying at 451B - C:
"I
therefore turn to the assessment of damages. When it comes to
scanning the uncertain future, the Court is virtually pondering
the
imponderable, but must do the best it can on the material available,
even if the result may not inappropriately be described
as an
informed guess, for no better system has yet been devised for
assessing general damages for future loss; see
Pitt
v Economic Insurance Co Ltd
1957
(3) SA 284
(N) at 287 and
Turkstra
Ltd v Richards
1926
TPD at 282
in
fin
-
283."
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. (Cf
Goldie
v City Council of Johannesburg
1948
(2) SA 913
(W) at 920.)’
[4]
This ruling deals with the aspect of loss of support only and is
specifically limited to the directions and assumptions on which
the
actuarial calculations should be based. Normally I would also
determine the contingencies to be applied to past and future
losses
of income as part of such direction. I have however not been privy to
the reasons why the merits were conceded at 75%. I
believe that it is
only fair that the parties be afforded the opportunity, once the
actuaries have attended to their calculations,
to address me or
alternatively place an agreed statement of those considerations which
resulted in liability being fixed at 75%
before me, lest any
considerations which I might possibly include as relevant, in
determining appropriate contingencies to be applied;
and that these
considerations have alR. been included in the 25% deduction from full
liability. Further, I shall not deal with
the issue of general
damages herein. The general damages shall be dealt with in my final
judgment, after receiving the actuarial
calculations and adjudicating
on any dispute between them (assuming they cannot reach agreement on
their calculations or the parties
cannot arrive at an agreed
compromised settlement regarding any difference in opinion between
them), receiving the input of the
actuaries on the issue of
accelerated benefits (again unless agreement is reached), and the
aforesaid agreed statement of factors
accounting for the 25%
deduction from liability being presented to me (or hearing
submissions/evidence in relation thereto).
[5]
Although the question of liability has been settled, it is
appropriate to set out the circumstances
[9]
to this ruling of
the events which culminated in Mrs R.’s demise:
(a)
Mrs R. had taken ill on or about 24 September 2004 complaining that
her glands were
swollen and that she did not feel well. Initially her
condition was diagnosed by her general practitioner as glandular
fever.
(b)
Her condition however deteriorated further and she developed a fever
and a rash a
few days later, she was then admitted to the Umhlanga
Rocks Hospital where she was diagnosed by the former Third Defendant
with
gastroenteritis and placed on a drip.
(c)
After four days on 30 September 2004 her condition had not improved
and she was sent
for an ultrasound by the former Fourth Defendant and
an abnormal lining around her gall bladder was detected suggesting an
infection
of the gall bladder.
(d)
She was placed in the intensive care unit and surgery was scheduled
for later that
day where her gall bladder, which was found to be
‘rotten’, was removed.
(e)
Mrs R. went into toxic shock and had to go onto a life support system
and ventilator.
She was placed in an induced coma.
(f)
G. took his two sons to see their mother in hospital the next day
after meeting
with a social worker at the hospital.
(g)
Mrs R. remained in the intensive care unit for the next four days and
never regained
consciousness. G. and his sons visited her daily
although she was unresponsive.
(h)
G. felt her condition was improving; however, she then developed a
‘renal problem’
manifesting itself in erratic kidney
readings. Her kidneys were to be flushed the next day. It was during
this time that the Defendant
administered an incorrect dosage of
medication.
(i)
Mrs R. was moved to an isolation ward for the dialysis. Later that
day G. was
summoned urgently to the hospital. His wife had gone into
a spasm and bit her tongue.
(j)
G. and his sons watched her die. He remarked that ‘Not once did
I see
any doctor come to my wife’s side’.
(k)
Subsequently G. was also required to attend upon the Phoenix Mortuary
to identify
Mrs R.’s body ‘because the doctor had not
signed the death certificate’, an experience he said he would
‘never
forget’.
[6]
A claim for loss of support should depend insofar as possible on
objective available and acceptable evidence.
In
Van
Staden v President Versekeringsmaatskappy Beperk
[10]
the court held:
‘
Na
die beste van sy vermoë moet 'n hof 'n waardebepaling maak van
die verdienvermoë van 'n oorledene sodat daaruit 'n
bepaling en
'n beraming gemaak kan word van welke onderhoud sy afhanklikes sou
toegekom het, ten einde 'n toekenning aan die afhanklikes
te maak.
Daar moet met ander woorde, na die beste van die hof se vermoë,
'n premie geplaas word op die verdienvermoe van 'n
oorledene. Om dit
te doen op die wyse waarop mnr Potgieter hom beroep het is 'n metode
om 'n bepaling te maak, dis egter nie die
enigste metode nie. Daar is
ander metodes ook. So kan daar, met verwysing na potensiële
verdienste wat 'n oorledene kon verdien
het indien hy verbandhoudende
beroepsrigtings as waarvoor hy gekwalifiseer was of wat hy inderdaad
gedoen het, gevolg het, ook
'n beraming gemaak word. In geëigende
gevalle mag dit 'n moeilike beraming wees. Dit neem nog nie weg dat
'n hof, na die beste
van sy vermoë op die beskikbare getuienis,
'n beraming moet maak van die verdienpotensiaal van die oorledene
sodat daaruit
bepaal kan word wat die omvang van die afhanklikes se
verlies is nie.
’
[7]
As regards assessing the objective evidence relating to the claim for
loss of support, it is necessary firstly to establish
the financial
support G., J. and T. received and were accustomed to receive from
Mrs R. and which was lost as a result of her death.
[11]
[8]
The onus of proof in this regard rested upon the Plaintiffs
throughout and they were required to produce such evidence as was
available to discharge the onus.
EVIDENCE
NOT IN DISPUTE:
[9]
The following are common cause or not disputed:
(a)
G. was married to Mrs R. by ante-nuptial contract with the
application of the accrual system;
(b)
J. and Tyron were born from this marriage;
(c)
At the time of Mrs R.’s death:
(i)
she was some 18 days short of being 43 years and 11 months old (she
was born
on [......] 1960 and died on 4 October 2004);
(ii)
G. was 50 years and 9 months old (he was born on [......] 1953);
(iii)
J. was 15 years old (he was born on [......] 1989);
(iv)
Tyron was 13 years old (he was born on [......] 1991);
(v)
Mrs R. was employed as a senior software developer with Business
Connexion/Comparex
Africa in a part time capacity where she was
expected to work 6 hours per day for a 5 day week, this amounts to 30
hours per week.
The hourly tariff of pay was R160.03, which rate was
increased slightly shortly before her death. She had initially been
employed
full time, working 8 hours per day or amounting to 40 hours
per week with Comparex, but at her request this was reduced to 6
hours
per day / 30 hours per week as she had expressed the wish to
work from home and be of more assistance to her growing children at
that point in time. That situation endured to the date of her
death;
[12]
(vi)
G. was running his own business;
(vii)
Both boys were at school;
(ix)
G. earned a nett monthly income of around R18 000.00;
(x)
G. and Mrs R. contributed equally to the common household;
(d)
subsequent to Mrs R.’s death, G. sold his business for
R400 000.00;
[13]
(e)
thereafter G. was employed by a business called Space for the period
from January 2010 to
September 2014
[14]
during which he
earned an average monthly gross income of about R34 000.00.
[15]
That employment
relationship terminated with G. in September 2014 concluding a
separation agreement with his employer,
[16]
resulting in him
receiving three months’ salary thereafter;
[17]
(f)
Subsequent thereto G. has been unemployed, waiting to possibly start
his own business
again.
ISSUES:
[10]
The Defendant contends, correctly in my view, that the main issues
which influence the Plaintiff’s claims can conveniently
be
categorized as follows:
(a)
Mrs R.’s income potential;
(b)
Mrs R.’s income duration;
(c)
G.’s actual income to date;
(d)
G.’s income potential;
(e)
G.’s income duration;
(f)
G.’s financial needs;
(g)
J.’s period of dependency;
(h)
J.’s financial needs;
(i)
J.’s actual past income;
(j)
T.’s period of dependency;
(k)
T.’s financial needs;
(l)
T.’s actual past income;
(m)
The facts relevant to contingency (which will stand over for
subsequent determination).
G.,
J. AND T.’S FINANCIAL NEEDS / THE EXTENT OF THEIR LOSS OF
SUPPORT:
[11]
This is a crucial point of departure to the calculations. The
determination of any loss of support suffered by the Plaintiffs
by
virtue of the death of Mrs R. should be determined firstly on the
basis of objective evidence, which should be available, of
the actual
financial support they enjoyed and were accustomed to receive, and
which they were deprived of by her untimely death.
[18]
It is an issue on
which specific evidence should be available and which should have
been adduced. The Plaintiffs did not adduce
such evidence. Instead,
they have in the main simply contented themselves with apportioning
the joint income of G. and Mrs R. available
from time to time in the
proportions of 2 parts for G., 2 parts to Mrs R. and 1 part each to
J. and T., often used and adopted
in support and maintenance claims.
That is not desirable and should at best have been a fall-back
position, and then only provided
the limitations of adopting such an
approach are clearly understood. Whilst such an apportionment might
in some instances not be
inappropriate, for example where the total
available income would be depleted by the needs of those dependant on
that joint income,
it permits of no savings and would result in an
inaccurate calculation of loss of support where the actual costs of
support of
G., J. and T. amounted to less than 4/6ths of the total
combined incomes of G. and his wife.
[19]
The Defendant,
perforce, because no alternative evidential basis presents itself,
has had to conduct its own calculations also on
that basis. The
Plaintiffs are fortunate that such an approach was adopted by the
Defendant because no reason was advanced why
objective evidence of
the actual support Mrs R. provided and the actual support G. and his
two sons were accustomed to receive,
were not placed before this
court. I shall therefore likewise adopt that approach whilst very
mindful of
inter
alia
the
reservations and concerns I have expressed earlier and other
limitations which will present themselves and which I shall allude
to
further in this ruling, or when dealing with contingencies in my
final judgment in due course. I mention in passing that in
Mentz
v Simpson
,
[20]
dealing with a
claim for maintenance based on the support requirements of minor
children, the court held that for a trial court
first to estimate
what a parent can afford, and then to adapt the children’s
needs accordingly is clearly a wrong approach.
That is the very much
the approach the Plaintiffs have adopted, no doubt because of the
lack of evidence of the actual support
received from Mrs R.. That
approach has been followed as giving the best indication of the loss
of support they suffered, because
it is not disputed that they have
suffered some loss of support as a result of her death. That fact
nevertheless does not make
the approach adopted a sound one and it is
an aspect that has introduced unnecessary complexity. The Defendant
submits that the
result is that a generous approach to the Plaintiffs
has been adopted. I agree. Suitable adjustments might be required to
be made
in the future when determining appropriate contingencies to
be applied to encompass some of the vagaries this approach has
introduced.
[12]
Accepting then the aforesaid ‘rough’ approach to the
measure of the loss of support suffered, it is necessary to
determine
the respective contributions by Mrs R. (determined by the income she
earned and could earn) and G. (determined by the
income he earned and
could earn) to the joint household. This will firstly require
considering Mrs R.’s likely career path
had she not passed away
and the income she would likely have earned, until her boys both
became self-supporting, then G.’s
career path and the income he
did and could earn and how that would have been applied, then G.’s
future needs, is retirement
date and the retirement date of Mrs R.
and the extent to which Mrs R. would have contributed to his support
until she would no
longer have been earning an income.
MRS
R.’S CAREER PATH UNTIL THE END OF 2009:
[13]
There is scant detailed information pertaining to her curriculum
vitae, in particular her qualifications and the vocational
courses
she had attended during the course of her employment. The evidence
however revealed that Mrs R. was a very capable employee.
It is
apparent from her career path that she had progressed through the
ranks in the computer programming industry since she commenced
employment in 1981 with Barlows Heavy Duty Machinery, to 2003 when
she was a Senior Software Developer. She had been employed in
the
Information Technology field for at least 20 years by the time of her
death. She was sufficiently skilled to have remained
in employment
and to enjoy some of the promotions that presented themselves to her.
[14]
The reality however is that at the time of her death she was working
in a part time capacity from home on a limited income
with limited or
probably no prospects of promotion as long as she remained in that
capacity. Although her election to work for
limited hours from home
was obviously not something cast in stone to last forever, it
remained a deliberate choice on her part,
taken as a caring mother in
the best interests of her family. G.
testified
that his wife had indicated that this arrangement was of a temporary
nature. He maintained that once the two sons were
enrolled at the
same high school she would have had more time on her hands and she
would have reverted again to full time employment.
Mr Dand, with whom
Mrs R. had worked, testified that it is a normal, certainly not
unusual, phenomenon for many mothers in that
industry to prefer to
work from home while their children are schooling. Mr Dand mentioned
that he would have accepted Mrs R. back
with open arms had she
decided to return to full time employment.
[15]
Having regard to her entire employment history where she was in full
time employment for many years, it is unlikely that she
would never
have returned to full time employment. The issue is when she would
have returned to full time employment. The objective
evidence of her
colleagues clearly suggests that she showed no immediate desire to
obtain permanent employment, work full days
or be promoted into more
lucrative permanent positions
[21]
if it meant her not
being able to stay at home and work a limited working day which
allowed her time with her sons. She was very
fond of them and
particularly keen to be a part of their lives, also assisting them
with homework, extra mural activities and other
interests. The
parties are
ad
idem
on
that aspect. Specifically the point of difference between the parties
is whether she would have remained at home in part time
employment as
she had done, only until T. went to High School (the Plaintiff’s
contention) or whether she would have done
so until both boys had
completed their schooling (the Defendant’s contention). The
Defendant submits that if it is borne
in mind that Mrs R. was
motivated to devote afternoons with the boys, that their high school
years would have been even more demanding,
that she was happy with
her part time employment, comfortable with the hours required,
satisfied with the close proximity of her
place of employment to her
home, and content with the income earned from the limited hours, this
state of affairs was unlikely
to change at least until T. had
completed grade 12 at the end of 2009. Specifically, it was submitted
that generally, high school
scholars require even more support and
involvement by the primarily caring parent – which, by his own
admission, G. was not.
[22]
[16]
I agree with these submissions made by the Defendant. They accord
with and correspond to my assessment of the personality of
Mrs R. as
gleaned from the evidence. With there seemingly being no undue
financial crisis in the family’s financial affairs
at that
point (indeed G. was not even aware what his wife earned, and did not
refer to any financial crisis), she would at the
level of parity of
treatment of both sons have been more inclined to want to be
available also to T. in the afternoons until he
completed matric, to
also support him in his extra mural activities, as she was, would
have been and would have done for J. until
the completion of his high
school career. The probabilities favour the finding that the most
likely hypothesis is that Mrs R. would
not have changed her working
structure and hours until T. also completed matric.
[23]
MRS
R.’S INCOME
[17]
The evidence as to what Mrs R. earned up to the time of her death and
what G. and his sons have earned to the date of the trial
which
commenced on 7 December 2015, is factual. What Mrs R. might have
earned had she not died, and what G. can earn in the future,
is
speculative. Such prospective future income must be predicted as best
possible in the light of the probabilities and the most
likely
factual scenario which would have followed had Mrs R. not died.
MRS
R.’S INCOME UNTIL 31 December 2009:
[18]
The undisputed evidence of Mrs R.’s erstwhile colleagues
confirmed that Business Connexion offered no more than inflationary
adjusted increases and that she would not realistically have received
any promotion unless she obtained permanent employment.
[24]
For her to remain
involved with her boys, Mrs R. was limited to continue her employment
without promotion in terms of the reduced
hours at annually renewable
inflationary adjusted fixed term agreements until T. completed matric
at the end of 2009.
[19]
Mrs R.’s past income up to her date of death is partly
documented and has been referred to in paragraph 9(c)(v) above.
Only
four of her salary advices were produced, namely those dated 31 March
2004, 30 April 2004, 31 May 2004 and 30 June 2004.
[25]
From these it is
apparent that Mrs R. in fact did not work 30 hours per week. She
earned R82 202.73 in total for those four months,
equating to an
average of R20 550.68 gross salary per month and R246, 608.16 gross
per annum.
[26]
This figure does
not include any so called benefits such as medical aid and the like.
These benefits should be taken into account
to determine the
potential total earning capacity of Mrs R..
[27]
The benefits
received by the deceased for the aforesaid four months were for March
- R2 832.65, for April –R4 354.02, for
May 2004 – R7
793.75 and June 2004 – R2 262.16, giving a monthly average of
R4 310.64 per month or R51 727.74 per annum
in 2004. Her total
monthly income including benefits based on these figures was
therefore some R24 861,32 before provision is made
for taxation. The
Defendant has accepted for the purpose of the calculation that Mrs R.
at the time of her death earned a nett
monthly income after taxation
of approximately R18 000.00. It seems fair to use this figure as
the income she would have earned
after taxation and taking into
account uncertainties regarding actual working hours and additional
benefits at the time of her
death. The R18 000,00 per month would
escalate post her death until 31 December 2009 only by annual
adjustments for inflation.
The figures resulting from that
calculation must be used to calculate the loss of support suffered on
the basis of two sixths representing
the loss of support suffered by
G. and one sixth each to J. and T. until the end of 2009.
MRS
R.’S PROBABLE CAREER PATH AND INCOME POST 2009:
[20]
In considering Mrs R.’s income earning potential after the end
of 2009 the position is more problematic. In
Road
Accident Fund v Monani and another
[28]
Hurt AJA, restated
the test to be applied in computing the amount of the award as
follows:
‘
The
computation of the award in a claim by dependants is, in a sense,
dichotomous. The first part of the exercise is
to
assess what the breadwinner would probably have earned
had
he not died when he did. The gross amount is appropriately adjusted
and discounted to arrive at a “present day value”.’
(my underlining)
[21]
From the beginning of 2010 Mrs R. would in all probability have
returned to full time employment with the opportunities that
it could
bring. She, G. and their sons (although her sons would by 2010 both
have left school and therefore could be territorially
more mobile)
were established and entrenched in Durban. Durban was their home,
their place of employment, the place where they
have their friends,
and generally their playground. The sons enjoyed the sea, it being
mentioned by G. in evidence that T. took
off time post matric to
surf, and Mrs R. was part of a book club and no doubt otherwise
involved in an established social circle
of friends. The fact that
both sons remained in the greater Durban area following completion of
their secondary education confirms
the probability that Mrs R. would
also have preferred to have remained in Durban and in all likelihood
with her employer. It seems
highly improbable that Mrs R. would have
uprooted her immediate family support structure to relocate
elsewhere, for example Gauteng,
[29]
purely for greater
financial gain or employment opportunities. She would, on
probability, have continued with her same employer
from the start of
2010, but now in a full time employment capacity with annual
inflation adjustment increases and would have aspired
only for such
promotion as might have been presented to her in that employment
relationship until her retirement. In my view there
would be a very
limited prospect that she would have left the employment in which she
had established herself and the employer
to which she had been loyal
(and the employer to her) in favour of a similar form of employment
away from Durban. She would by
the end of 2009 have been employed
with that entity under the guise of the different names assigned to
it from time to time, for
a considerable period of time. It had kept
her on in a part time capacity and although no legally enforceable
reciprocity existed
she would probably have joined it when wanting to
resume full time employment. She was familiar with that business and
its people
and they were familiar with her. She had and would have
been with Business Connexion for a long time and was entirely happy
with
Business Connexion. I did not gain the impression that she would
flit from one business to another purely for career advancement
as
one might find with a very ambitious and aggressive career woman,
permanence being more important to her. Although her particular
skills might have made her professionally mobile, she was in my
opinion, an employee likely to have remained with her employer.
[22]
It was argued, by analogy with the position of Mrs Steyn, that Mrs R.
could also have improved her income to equal the R828 000.00
now
earned by Mrs Steyn. Not only is this suggestion speculative
but it is also improbable. As stated above, Mrs R. is very
unlikely
to have pursued a career by moving to Gauteng like Mrs Steyn at age
49 to 50 (in 2010 after T. would have matriculated)
especially where
G. would have his business or be employed in Durban and her sons were
also around in Durban, and she had an established
home and circle of
friends in Durban. As much as Mrs R. might have had the potential to
achieve what Steyn has, the latter fits
a different personality
profile. But most importantly, achieving Mrs Steyn’s kind of
success inevitably would probably have
required relocation to
Gauteng, a move which Mrs R. was unlikely to have entertained. If she
did entertain any move from her existing
employer, which I consider
unlikely, it would most probably be in the greater Durban area, to an
employer in the same or a similar
industry and at best for marginally
better prospects regarding promotion and income (due to the
competitiveness of the industry),
which limited additional benefits
in themselves would have made it unlikely that she would have left
her employer for another in
Durban. Mrs Steyn is exceptionally well
qualified, absolutely passionate about her work. She is employed in
Johannesburg and has
successfully completed numerous courses. Mrs
Steyn is the head of a large IT company and responsible also for
hardware and telephone
systems. She has an entirely different
employment history and has moved through the ranks.
[30]
Most significantly,
her evidence revealed no similarity to enable me to conclude
confidently that Mrs R. would have followed the
exact same path. Mrs
Steyn, it would appear, has been a uniquely successful individual.
Mrs R. might also have had that potential
but with where she was in
life and with her priorities that is where the comparison ends. Mrs
Steyn’s position today is of
limited, if any, relevance.
[31]
I agree with the
Defendant’s submission that Mrs Steyn’s evidence simply
demonstrated that, like everywhere else in
life, there are success
stories, failures (which Mrs R. certainly was not) and a wide variety
in-between of professionals who might
also pursue other priorities,
such as family life or happiness, rather than just their chosen
professions. No justifiable inferences
about Mrs R.’s future
can be drawn from Mrs Steyn’s success.
[23]
However, exactly how Mrs R. would have progressed after assuming full
time employment with her employer, is uncertain. There
is no doubt
that she was very capable.
[32]
A software
developer in permanent employment currently with Business Connexion
could earn between R460 000.00 and R528 000.00,
per
annum.
[33]
That is evidence
from the very employer she was employed with and hence the most
likely salary band which would have been available
to her.
[24]
Whether and how speedily she would have progressed along the ladder
of promotion is more speculative, but must be assessed
in the light
of the probabilities. She had obtained the same qualifications as Mr
Dand and Mr Cashmore. They had both progressed
to a Managerial level.
She would therefore have been eligible and qualified to have been
promoted probably to the same extent,
or possibly better, in view of
her gender and transformation objectives and the empowerment of
women, than they had. The possibility
of promotion was certainly
there, and could not be ruled out by the witnesses called by the
Defendant. Mrs R. was well proficient
in the computer language
Natural Adabas.
[34]
In the words of Mr
Dand, the manager under whom Mrs R. worked, she was a capable
employee and an excellent worker at a technical
level, she had
‘certain qualities’, she was proficient in the same
computer language as him, she was ‘very
capable, very
proficient’, she was alR. at ‘the top of the
software development positions’, she had ‘supervisory
skills’, she was ‘capable of being either a project or
team leader’, and she had the ‘capabilities’
and
‘interpersonal skills’ to become a manager one day. The
career progression is from a senior software developer,
to a systems
analyst and then to a project team leader. Mr Dand concluded that Mrs
R. was capable of being employed in these capacities
and in
particular as a team leader. I have no reason to doubt that
conclusion. The position of a team leader is just below that
of a
software manager. Mrs Wilkinson, who has achieved the level of
manager also readily accepted that Mrs R. would have managed
other
computer programming languages, other than those she was proficient
in, because of her way of thinking and intelligence,
and that Mrs R.
would have been promoted to a more senior position. According to her
a senior software developer in 2015 earned
R275.00 per hour excluding
any benefits. Based on 8 hours per day, for 5 days per week, and 52
weeks per year, this amounts to
R572.000.00 per year in 2015 terms.
Having regard to the average benefits Mrs R. received in 2004
amounting to R4 310.00 per month
and assuming those to increase at 8%
per year, in 2015 this will amount to an extra R3 792.80 per month
and therefore a total of
R8,102.80 per month or R97,233.60 per year.
The total package (including benefits) would, on this basis amount to
R669,233.60 before
taxation.
[25]
The Plaintiffs believe a financially more optimistic progression to
that outlined above to be probable. They refer to the fact
that the
two experts, industrial psychologists Dr de Kock (for the
Plaintiffs) and Ms Rossouw (for the Defendant), compromised
on
a progression resulting in Mrs R. at the age of 58 years in all
probability earning R790,000.00 per annum as a total, which
would be
the mean on the D2 Patterson scale. The Plaintiffs also point out by
comparison that Mrs Steyn in 2015 earned R828,000.00
gross per year,
including benefits.
[26]
The Plaintiffs further postulate Mrs R.’s subsequent potential
earnings with reference to Koch’s
Quantum Yearbook
as
follows:
(a)
In the
Quantum Yearbook
of 2003 a salary of R249,000.00 per
year (i.e. without benefits) is categorised to be Patterson D3, which
is referred to as ‘middle
management’.
(b)
A salary of R300,000.00 per year (including benefits) is categorised
to be Patterson
D2 of which the lower end is R289,000.00 and the
higher end is R389,000.00. That would be on 30 hours per week.
(c)
On a 40 hours per week basis in 2003 the position is R332,800.00
(without benefits)
and R384,520.00 (with benefits), categorised as
D3, or the upper quartile of Patterson D2.
(d)
The
Quantum
Yearbook
of
2015 reveals the upper quartile of Patterson D3 to be R808,000.00,
excluding benefits, while the package including benefits for
Patterson D2 in 2015 (upper quartile) is R974.000.00 including
benefits. The package including benefits for Patterson D3 in 2015
(upper quartile) is R1,188,000.00. They also submit that Dr de Kock
is conservative
[35]
in his approach.
[27]
With reference to the income of Mrs Wilkinson the Plaintiffs submit
that she in the capacity of a Software Development Manger
earns
R390,00 per hour or R812,000.00 per annum; being the gross salary,
which they contend must be without benefits. Her R390.00
per hour for
40 hours per week times 52 weeks equates to R811,200,00 per annum.
Compared with 2015 salaries this falls into the
upper quartile
(R808,000.00) of D3. If regard is had to the total package, they
contend it will amount to R1,188,000.00. Mrs Wilkinson
presently
earns R812,000.00 gross. They believe that no information had been
made available as to the benefits that she receives
over and above
the gross salary. This must therefore be what she earns without
benefits. If regard is had to the 2015 table of
Koch it would amount
to R1,188,000.00 per year, with benefits. They therefore contend for
a gradual progression of Mrs R.’s
income from 1 January 2010 to
2015 to culminate in that figure.
[28]
The joint minute by the experts provided for a progression to the
median of D2 Patterson. That minute was presented to the
court as
exhibit “H”. They had compromised that by the age of 58,
the deceased could have earned R790,000.00 per year
which is the mean
package of Patterson D2, Dr de Kock testified. The Defendant’s
expert to that minute did not. If
regard is had to the minute then it
seems to me that it was presented purely as what the experts had
agreed, but not that the Defendant
admitted the contents thereof.
Ultimately, the likely progression that Mrs R.’s career might
have followed remains for this
court to determine. In doing so, I can
obviously have regard to the contents of the joint minute, but only
to the extent that I
am satisfied that the underlying reasons for the
experts reaching a certain conclusion, in fact supports their
agreement.
[29]
What detracts from Dr de Kock’s evidence (and hence the basis
of any agreed compromises recorded in the joint summary
of the
experts) is that he made no direct enquiries with Mrs R.’s
employers as to her likely prospects of promotion and salary
bands.
He based his prognostication purely on a comparison to the Patterson
scales, and at times on somewhat controversial assumptions.
All Dr de
Kock considered was the wording in her employment contract and then
sought to support his views by interpreting the title
and duty
descriptions contained therein. Specifically he also failed to
determine Mrs R.’s qualifications, failed to
investigate the
general state of the industry, failed to determine the nature of Mrs
R.’s duties, failed to establish employment
and promotional
prospects within the industry,
[36]
failed to assess
the market, failed to consider the complexity of her work, and failed
to investigate the actual facts relating
to Mrs R.’s
employment.
[37]
These are important
because there is absolutely no evidence of any desire by Mrs R. to
relocate, change employers or go into her
own business, except for
the tentative social discussions, if they amounted to that and were
not dreams, between her and Mrs Steyn
of starting a business
together. Mrs R. had been employed with the core of the business
known at the time of her death as Business
Connexion for a long time,
enjoyed its close proximity to her home, got on well with the people
at work and, on all accounts, was
entirely happy with Business
Connexion. Dr de Kock’s evidence accordingly remained simply
focused on the Patterson levels
and was factually speculative. His
estimate was contradicted by the recruitment agency, Mrs Steyn’s
own experience and the
facts relating to Mrs R.’s employment at
Business Connexion.
[38]
What he suggested
was not the real situation that applies in the market. Not even a ‘go
getter’ career woman like Mrs
Steyn in the competitive
commercial milieu of Johannesburg has been able to command the income
levels postulated by an application
of the Patterson scales and
contended for by the Plaintiffs. A prognostication based purely on
those scales with no regard to reality
leads to an artificial
analysis.
[30]
The reality of the situation, in my view, is that Mrs R.’s
position is perhaps best compared to that of Mrs Wilkinson.
Like Mrs
R., Mrs Wilkinson clearly is a very capable person in the same
industry Mrs R. operated in. On the evidence of Mrs Wilkinson,
the
entire software development section at the firm which employed Mrs R.
at the time of her death comprised of more than forty
employees.
Now there are less than five left. Furthermore, Mrs R. was on a short
term and short time contract.
[39]
Mrs Wilkinson is a
regional manager. On her evidence a large number of employees would
have vied for promotional positions which
would become available from
time to time. Therefore Mrs R.’s promotion to higher
promotional echelons would by no means have
been guaranteed and
probably limited by having to wait for promotion positions becoming
vacant. As a well-qualified managerially
skilled worker, Mrs
Wilkinson currently is the KZN software development manager in her
company. She only earns around R720 000.00
per annum. That
is less than what Mrs Steyn earns and considerably less than what the
industrial psychologists opine on a simple
agreed application of the
Patterson scales. Significantly also, Mr Dand testified that a senior
software developer could earn on
average R450 000.00 per annum
(at 2015 values). According to Mrs Wilkinson the present day salary
of a senior software developer
is R275.00 per hour and according to
her this equates to R528,000.00 per annum. One must however take into
account that this amount
does not include any benefits which the
deceased in fact received at the time of her death. Provision should
be made for benefits
to determine the annual package that she would
have been entitled to had she not died. At the time of her death, the
average over
the four months of March, April, May and June 2004 in
respect of the benefits, amounted to R4 310.00 per month. This amount
no
doubt would have to be escalated in line with inflation which
should be added to the amount of R572,000.00.
[31]
At best it may therefore be postulated on the probabilities that Mrs
R. would have taken up permanent employment during the
post-matric
period (from 1 January 2010) to retirement at age 60 (2020)
[40]
and that during
this period she would have progressed to a senior development manager
earning an annual salary of R528 000.00
(2015 value). At the
lower end one has the amount of R572,000.00 (excluding benefits) of a
senior software developer in 2015 terms
and at the higher end of the
scale an amount of R828,000.00 earned by Mrs Steyn (alternatively the
amount of R790,000.00 as determined
by the experts). One also has as
a guideline, the corporate survey earnings annexed hereto which
determines the basic salary of
a Patterson D3 being R579,000.00 (the
basic salary) and the total package being R856,000.00. Although I am
not in a position to
determine the benefits which Mrs R. would have
received, I, at best, estimate as a matter of probability that the
benefits which
she received in 2004 of R21 551.00, which was
approximately a fifth of her salary, would result in a total package
in the region
of R790,000.00.
[41]
Provision should
accordingly be made for Mrs R.’s income to have progressed
linearly from R18 000 per month net as at 1 January
2010 to R790
000,00 per annum before taxation at the end of 2015, with further
inflationary adjustments to her retirement on 31
December 2020.
G.’S
CAREER PATH, INCOME, AND THE IMPLICATIONS THEREOF FOR THE VARIOUS
LOSS OF SUPPORT CLAIMS:
[32]
Post Mrs R.’s death G.’s income and income potential can
conveniently be separated into four periods, namely the
period of his
business until 31 December 2009, the period of his employment from
January 2010 to September 2013, the period of
his unemployment from
October 2013 to the date of the trial (December 2015, as a reference
point), and the period into the future
from January 2016.
[33]
Ordinarily, the first period should not present any problem as there
should be evidence of his actual income. Documentary proof
of his
actual income was however sparse. Nevertheless, on his own version a
nett income of about R18 000.00 per month would
as a minimum
represent his own income from his business fairly accurately.
[42]
As I understood his
evidence, he accepted that his income during the period of his
business averaged at approximately R18 000.00
per month, nett,
and that is the figure that should be used. To this figure must be
added the R400 000.00 income realised
from the sale of his
business at the end of this period.
[34]
Accepting the 2:2:1:1 apportionment, and notwithstanding G.’s
evidence that he and his wife met their on-going expenses
on a 50:50
basis, it follows from his evidence that his nett income during the
period from his wife’s death to the sale of
his business would
have equalled her income or might even be more. He would, in all
likelihood, have contributed roughly a similar
amount to hers to the
common household. That would mean that G. suffered no loss of support
himself during this period. Further,
insofar as the loss of any
support in respect of J. and T. is concerned, he would probably have
contributed roughly the same as
she could have contributed. A
calculation based on the assumption of an equal contribution by each
of them to their sons’
two sixth share (or her one sixth
contribution in respect of each) would be fair, if not possibly
generous. On the basis of the
2:2:1:1 part rule, G. and Mrs R. might
(at best) have contributed R3 000.00 (the value in 2004 and subject
to annual inflation
increases) each per month, per child, towards the
maintenance and support of J. and T., to the year that T., the
youngest, matriculated.
Whether a full one sixth of their combined
incomes would have been required to support each of J. and T. might
be open to debate
and might have to be recognized in determining an
appropriate contingency adjustment in due course.
[35]
In respect of the next period (from the sale of G.’s business
to September 2013) G. earned the following gross income
before tax:
In
2010:
January:
R21 281.64
April:
R22 445.71
May:
R19 412.02
June:
R28 829.00
July:
R28 404.07
August:
R18 067.17
September:
R18 372.38
October:
R28 919.45
November:
R32 418.62
In
2011:
January:
R44 388.77
February:
R18 996.11
March:
R27 686.49
April:
R28 091.12
May:
R28 858.34
June:
R30 206.74
August:
R35 737.96
September:
R34 824.04
October:
R36 936.97
November:
R39 276.74
December:
R44 607.48
In
2012:
January:
R37 992.18
February:
R32 712.35
March:
R35 701.74
April:
R37 140.51
May:
R37 179.62
June:
R39 273.2
July:
R46 073.91
August:
R34 610.89
September:
R36 161.20
October:
R35 579.99
November:
R37 718.85
December
: R51 504.11
In
2013:
January:
R38 614.51
February:
R39 389.99
March:
R40 173.18
April:
R35 445.40
May:
R37 966.88
June:
R39 363.29
July:
R36 858.11
August
:
R39 252.74
September:
R35 880.96
This
translates into the following averaged gross monthly income for the
corresponding calendar years:
[43]
2010:
R25 236.00
2011:
R33 567.00
2012:
R38 470.00
2013:
R38 104.00
[36]
During this time Mrs R. would have resumed full time employment and
would have earned the incomes referred to above.
[37]
Again, on the 2:2:1:1 apportionment, and G.’s evidence that he
and his wife met their on-going expenses on a 50:50 basis,
to the
extent that his nett income during the period of his employment
exceeded that of his wife he would, in all likelihood, have
contributed more to the common household than she did and would have
suffered no loss of support himself. Further, insofar as the
loss of
any support in respect of J. and T. is concerned, he would probably
have contributed more than she could have contributed.
A calculation
based on the assumption of an equal contribution by each of them to
their sons’ two sixth share (or her one
sixth contribution in
respect of each) based on her income would be fair in calculating the
sons’ actual loss of support.
An appropriate contingency
adjustment, which I shall determine in due course, will have to take
into account the fact that not
a full sixth of her income would
actually have been expended on the support of each son.
[38]
For the third period from October 2014 to the date of the trial in
December 2015, G. has been unemployed. This is accepted
by the
Defendant. G.’s income is therefore taken to be nil for this
period.
[39]
Accordingly, during this period:
(a)
G. suffered a loss of support which on an apportionment of 2:2:1:1
may be quantified
as one third of Mrs R.’s projected net income
per month during this period;
(b)
The loss of support in respect of each of J. and T. will be one sixth
of Mrs R.’s
net income per month, less such income as they
earned during that period, or are deemed as being capable of earning
(for example
in respect of the gap year taken by T.) as set out
below.
[40]
The fourth and final period from January 2016 to G.’s
retirement is more uncertain. G. contends that he is entirely
unemployable for the rest of his life, alternatively that it is
unlikely that he would be able to find employment in the near future
or at all. He testified about possibilities in the market, but
contends that the prospects of him either being employed at his
age
or that he could start up a new business is slim. G. stated that one
requires capital to do so which he does not have. It was
submitted on
his behalf that his income for 2010 to 2013 cannot be used as a basis
of determining his earnings potential if regard
is had to his factual
situation. G. argues that as the deceased was 7 years younger than
him, and assuming that they would retire
at the same age (60), or if
he stopped working at an earlier age she would have been obliged to
support him in full, he was entirely
dependent upon Mrs R. for his
own maintenance during this period, until her retirement.
[41]
The Defendant contends that this is unrealistic. The sad reality of
modern life is that careers often no longer terminate at
60. Very few
individuals are able to make adequate financial provision during
their working lives to retire at age 60 or to sustain
themselves as
financially independent until their eventual demise. Inasmuch as it
might be contended that Mrs R. would have worked
until her retirement
age at 60, or possibly beyond as circumstances might demand, the same
would apply to G., subject to any unsuitability
to employment.
[42]
On G.’s own evidence he is a well-qualified, experienced and an
effective salesman and businessman. On his evidence R500 000.00
is likely to set him onto his feet and enable him successfully to run
a business and generate an income of the kind that he was
accustomed
to. In fact, he testified that with his good connections and capital
of R500 000.00, he would probably be back
to where he was. If he
established such a business he could also presumably later sell it at
the same current value, if not for
more.
[43]
The Plaintiffs submits that G.’s prospect of resuming and/or
successfully pursuing a career at his present age of 62
years as a
senior white male in South Africa, given employment equity
requirements, are dismal or at least limited. It is no doubt
so that
he will be at a disadvantage in the employment field, and that his
opportunities will be very limited. He has however apparently
made no
attempts in this regard, possibly because he considers it futile. But
it would not necessarily impact on his entrepreneurial
ability if he
was to start a business. For the purpose of this trial his total
un-employability cannot simply be assumed. In fact
he testified that
he could have joined the business Switch Digital at a basic monthly
salary of R50 000.00 plus commission,
giving a nett income of at
least R28 000.00 in 2014. It is unfortunate that in spite of
being pressed on three different occasions
about attempts to find
employment elsewhere, G. remained coy with his answers, and in one
instance, seemingly flippantly, retorted
that he would prefer to ‘go
fishing’.
[44]
It seems that he
has either never really bothered to find employment or possibly that
the whole truth was withheld from this Court.
[45]
G.’s
prospects will be significantly better in the entrepreneurial field.
Having regard to his income earning potential estimated
in 2004
values as at least R18 000.00 per month nett, although he is now
older and possibly less energetic, he nevertheless
appears well
qualified to run his own business again. It appears not without
significance that G. had alR. commenced working towards
his own
business and that he had instructed his attorney that he should be
able to generate around R40 000.00 per month, in
the event of
success.
[46]
Having regard to
G.’s successful business history and his ability to find and
retain employment in the industry for a relatively
long period, it
would not seem unfair to assume that G. would have received two
sixth’s of the income of Mrs R. in support
for the period up to
her retirement until December 2020 (subject to a contingency
adjustment that he could also have taken steps
to maintain himself by
generating an income), but thereafter they would each have looked
after themselves, and would have been
forced to look after
themselves, during the remainder of the fourth period, G. by
having established his own new business.
[44]
Once calculated, the value of G.’s quantum should be reduced by
the amount of R400 000 paid to him in advance, and the
value of the
accelerated benefits enjoyed directly or indirectly as a result of
Mrs R.’s death (dealt with below).
J.
AND T.:
[45]
It was rightly argued that the duration of their dependence is
limited by the actual facts and the principle of reasonableness;
it
would be unreasonable to expect a Defendant to compensate for loss of
support where the dependents continue to remain unemployed
and
without income beyond a reasonable time. Both boys studied towards
degrees. The Plaintiffs have accepted that the year in which
they
turned 23 years of age would be acceptable as the cessation date for
the payment of support in respect of both in the circumstances.
In
respect of J. that would be the end of 2012 and in respect of T. it
would be the end of 2014.
[46]
Neither J. nor T. testified. G. initially testified that they were
entirely dependent until they turned 23 years of age. But
that turned
out to be incorrect. J. became employed as a representative with
Killer Deals at a rate of R4 000.00 per month
from age 20 and,
continued in such employment until he joined Space at age 23.
[47]
Any dependence
claim by J., even assuming him to have remained dependent until age
23, accordingly falls to be reduced during
his years from age
20 to 23 years, by the income of R4 000.00 per month earned by
him. From age 23 he earned about R12 500.00
to R14 000.00
per month.
[48]
That is a fact
strictly irrelevant to this ruling save that it suggests that the
assumption of dependency until 23 years of age
for J. is perhaps
generous.
[47]
In T.’s case he took a gap holiday year in 2010. Although there
was evidence that T. was traumatised by his mother’s
death and
at one stage exhibited suicidal tendencies, there is no evidence that
the taking of the gap year was a necessary consequence
of the death
of Mrs R.. The gap year was a voluntary act and the Defendant cannot
be expected to pay T. for that holiday. During
the period from
January 2011 to December 2013, T. worked as a lifeguard and a waiter.
G. was dismissive about T.’s income
during this period. The
Defendant has indicated, with some generosity, that he accepts that
T. remained dependent during this period
when he appears to have been
floating around somewhat aimlessly in the employment field, and that
T. was maintenance dependent
until 2009, not dependant during 2010,
and was again dependant from 2011. T. turned 23 at the end of August
2014. During that period
(beginning of 2010 to the end of 2013) G.
continued to earn a good salary and would probably have been able to
contribute the largest
share of the support required for T.. The
calculation should be made on the basis that T. during these periods
of dependency would
receive one sixth of Mrs R.’s income for
support.
[48]
In my view the calculation of the loss of support for both J. and T.
should be on the basis of one sixth of the income of Mrs
R. being
applied to that purpose (save for the excluded periods relating to T.
referred to earlier) until they turned 23 years
of age, which will
then be subject to an appropriate contingency adjustment in due
course to take account of factors such as whether
one sixth of the
entire combined incomes of both G. and Mrs R. would actually have
been required and applied to their support.
[49]
ACCELERATED
BENEFITS:
[49]
As a matter of principle, any addition to a dependent’s income
arising from the death of the deceased, such as benefits
received by
dependents on the death of their bread-winner or inheritances,
[50]
must be deducted
from the total amount of the loss.
[51]
Where property is
inherited by any dependent, the extent of the loss is calculated
taking into account not the value of the property
but that of the
accelerated accrual. This
inter
alia
entails
assessing the probabilities of the dependent inheriting the property
should the deceased not have been killed through the
wrongdoing of
the Defendant, but dying from a different cause at a later date.
[52]
In short, the
additional income or value of the benefit received by a dependent
must be taken into account to reduce the loss. Insurance
policies
which become payable constitute a recognised exception to this rule.
[50]
Whilst the principle relating to taking into account the value of
accelerated benefits appears simple, its application is more
problematic. I was encouraged by the Defendant to adopt one of two
approaches, namely to give directions to the actuary, or to
invite
actuarial response and evidence on this issue (before making the
final award). Actuarial input will certainly assist in
the
determination of this issue and the actuaries are accordingly invited
to comment as fully as possible as to what provision,
if any should
be made for the accelerated value of benefits received as a result of
the death of the deceased, having regard to
the following. The
possible benefits include:
[53]
(a)
G.’s accrual claim:
R 282 076.84
(b)
G.’s maintenance claim:
[54]
R
432 372.10
(c)
The value of the house inherited:
[55]
R1 470 000.00
[56]
[51]
It seems that deductions for accelerated inheritances fall to be
determined by determining the value of inherited assets (had
the
death not occurred) minus the value of the chance of inheriting the
assets had the deceased lived out her normal lifespan.
The following
is probably reasonable in determining a deduction for the accelerated
receipt of G.’s inheritance:
(a)
inherited assets are assumed to escalate in line with headline
inflation from the date of
death;
(b)
discounting is done to the date of trial;
(c)
allowance is made for the widower’s survival to the date of
trial;
(d)
the family home is included with the assets subject to explicit
allowance for the use by
way of the real rate of return which has the
effect that for a marriage out of community of property, there is a
deduction for
the family home.
[52]
Mrs R. died intestate. G. instituted an accrual claim, as he was
entitled to do. He also lodged a claim for maintenance. The
effect
thereof was essentially to render Mrs R.’s estate insolvent.
Effectively what G. received from the estate in respect
of his
maintenance claim, accrual and inheritance was the residential home.
The accrual claim is something he was entitled to as
of right and the
only possible considerations would appear to be that the right to
receive same has now been accelerated and became
a reality as opposed
to the mere prospect G. previously had simply to share in such
accrual as might have remained had the deceased
lived a full life and
only died much later from natural causes. I invite the comments of
the actuaries as to what provision, if
any, should be made for these
accelerated benefits.
DISCOUNT
RATE, INFLATION AND LIFE EXPECTANCY
[53]
These are actuarial issues to be determined or agreed by the
actuaries.
TAXATION
[54]
The relevant tax table applicable for each year would apply.
DIRECTIONS
TO THE ACTUARIES:
[55]
Accordingly, the following directions are made to the actuaries:
(a)
Mrs R.’s expected income from 4 October 2004 to 31 December
2009: R18 000.00 (nett
after taxation) per month in October 2004 with
annual inflationary increases until 31 December 2009;
(b)
Mrs R.’s expected income or income potential for the period 1
January 2010 to 31 December
2020:
(i)
R460 000.00 per annum (gross) (2015 value and therefore reduced
by inflationary
adjusted decreases) to 2010, and
(ii)
increasing to R790 000.00 (2015 value) in December 2015, and
increasing thereafter,
at inflationary rate adjustments, to
retirement on 31 December 2020;
(c)
G.’s income for the period 4 October 2004 to 31 December 2009:
R18 000.00
(nett) per month
plus
a once off income
of R400 000.00;
(d)
G.’s gross monthly income for the period January 2010 to
September 2013:
(i)
in 2010 R25 236.00
(ii)
in 2011 R33 567.00
(ii)
in 2012 R38 470.00 and
(iv)
in 2013 R38 104.00.
(e)
G.’s income for the period October 2013 to 31 December 2015:
nil.
(f)
G.’s expected income or income potential for the period 1
January 2016 to 31
December 2020: nil.
(g)
Usage of the income of Mrs R. and G.: Assume that the income of the
two parties was pooled
and that their joint income was used two parts
for each adult and one part for each of the two children.
(h)
Posssible reduction to G.’s claim: Actuarial quantification of
the accelerated value
of:
(i)
R282 076.84 received in respect of early accrual,
(ii)
R432 372.10 received in respect of the maintenance claim, and
(ii)
R1 470 000.00 received by reason of his inheritance of the
house, minus
the discounted value of the chance of inheritance.
(i)
Value of the maintenance needed by J. to be calculated in accordance
(i)
with the assumption in sub-paragraph (e) above for the period of his
dependence
from 5 October 2004 (15 years old) to 31 December 2009 (20
years old),
(ii)
less deductions for the benefits received by him during this period
being R4 000.00
per month for the last 3 years (from age 20 to
23).
(j)
Value of the maintenance needed by T. to be calculated in accordance
with the
assumptions above for the period of his dependence from 5
October 2004 to 31 December 2009, and again from 1 January 2011 to 31
December 2014 (aged 23);
(k)
The actuaries are requested to comment on and offer any suggested
advice on what allowance,
if any, should be made in respect of the
accelerated benefits received in regard to G.’s accrual claim,
his claim for maintenance
against the estate, and the inheritance of
the house.
(l)
A final deduction of R400 000.00 must be made from the loss of
support claims
of G. (and T.) to account for a preliminary payment
alR. made by the Defendant.
ORDER:
[56]
In the instance, I make the following order:
‘
The
trial is adjourned
sine
die
pending
the results of the actuaries’ calculations and comments.’
___________________________
KOEN
J
APPEARANCES
PLAINTIFF’S
COUNSEL: ADV. M G ROBERTS SC WITH R RAMDASS
PLAINTIFF’S
ATTORNEYS: ATTORNEYS ANAND-NEPAUL
C/O
CAJEE SETSUBI CHETTY
REF.:
MR A. ESSA
SECOND
DEFENDANT’S COUNSEL: ADV. J MARAIS SC
SECOND
DEFENDANT’S ATTORNEYS: MACROBERT ATTORNEYS
REF.:
MR ALTUS JANSE VAN RENSBURG
[1]
The
First Plaintiff was born on 29 December 1953.
[2]
Jarred
was born on 6 April 1989.
[3]
Tyrone
was born on [......] 1991.
[4]
Ex
facie
in
the particulars of claim, the First Plaintiff in his personal
capacity claimed R4,208,000.00 for loss of support as a result
of
the death of his wife, funeral expenses, past medical expenses and
general damages in an amount of R500,000.00. The First
Plaintiff in
his representative capacity on behalf the child, Tyrone born on
[......] 1991 (who is presently a major and should
strictly be
substituted as Plaintiff) claimed an amount of R1 150,000.00 in
respect of loss of support and R500,000.00 for general
damages. The
Second Plaintiff claimed an amount of R735 000.00 in respect of loss
of support and R500,000.00 in respect of general
damages. The
Plaintiffs abandoned the claim for past medical expenses as well as
the claim for funeral expenses. The evidence
of Professor Pillay
alluded to possible future medical costs in respect of counselling.
No formal claim was however pursued in
respect thereof.
[5]
The
First Plaintiff and his two sons are referred to by their first
names to avoid any confusion which might arise if they were
all
referred to more formally as Mr Graeme Reay, Mr Jarred Reay and Mr
Tyrone Reay. No disrespect is intended.
[6]
Mrs
Reay was born on 22 November 1960 and accordingly 43 years and 11
months old at the time of her death.
[7]
Dr
MacKinley, the Second Defendant, being the only Defendant against
whom the trial continues, shall hereinafter simply be referred
to as
‘the Defendant’.
[8]
1984
(1) SA 98
(A) at 113F – 114E.
[9]
I do
not intend repeating the evidence adduced in any greater detail
whether in this respect or other respects elsewhere in this
judgment, but shall only refer to such evidence as material to the
conclusions I have arrived at. In doing so I have however
had regard
to the full conspectus of all the evidence led and weighed up the
merits and demerits where in conflict very carefully.
[10]
1990 (4L2) QOD 1 (W)
per
Mynhardt J at page 19.
[11]
A
general starting point is to establish the difference between the
position of the dependent as a result of the loss of support
and the
position the dependent could reasonably expect to have been in had
the deceased not died – see Legal Insurance
Company Limited v
Botes
1963 (1) SA 608
A.
[12]
She
had effectively been employed in the information technology field
from 1981 to the time of her death, save for when she took
maternity
leave in 1989 and 1991 and during a short period in 1992 when she
was unemployed after she and her family relocated
to Durban.
[13]
Record
at 156, at lines 1 – 8.
[14]
Record
at 150, at lines 16 – 24; Record at 151, at lines 1 – 8.
[15]
Exhibit
“F”.
[16]
Record
at 151, at lines 1 – 8.
[17]
Record
at 66, at line 1.
[18]
In
Hulley
v Cox
1923
AD 234
at 243 – 244 Innes CJ stated the following pertaining
to the approach that must be followed: ‘
Voet
on
the other hand favours a more general estimate. Such damages, he
thinks should be awarded as the sense of equity of the judge
may
determine, account being taken of the maintenance which the deceased
would have been able to afford and has usually afforded
to his wife
and children … That would seem to be the preferable view.’
[19]
On
that basis Graeme and Mrs Reay did not save any money and spent all
their available income towards the maintenance of themselves
and the
minor children as well as other household expenses. The impression I
gained of Mrs Reay’s character is that she
was a prudent woman
who would, no matter how difficult the circumstances, have set aside
some money for a ‘rainy day’.
[20]
1990
(4) SA 455 (A).
[21]
Record
at 295, at lines 12 – 17.
[22]
This
statement is possibly controversial. High school is generally
typified by schools encouraging learners to assume greater
independence and responsibility for independent work, unsupervised
by a parent. But extra mural activities generally assume even
greater significance during high school which probably cancels out
the time previously spent on closer personal monitoring.
[23]
Which
he completed at the end of 2009. Jarred completed his matric at the
end of 2007.
[24]
Compare
Wilkenson’s evidence at record 350 – 351.
[25]
The
earnings of Mrs Reay were at 31 March 2004 - R16 879.86, (for 106
hours), 30 April 2004 (for 121 hours) - R18 445.45, 31 May
2004 (for
124 hours) - R24 011.06, 30 June 2004 (for 118,5 hours) - R20
866.36.
16.
The Plaintiffs argue that if she had worked the full 30 hours per
week her income would obviously have been more. However
there was no
evidence that she in fact worked the full 30 hours. The support she
provided is confined to that which she actually
provided. The
Plaintiffs have however with reference to the projected income she
could have earned for a full 30 hour period,
resulting in an income
of R332,800 for 52 weeks argued that this placed her in the mean of
Patterson D2 category. That categorization
however does not accord
with the actual objective evidence, and is at the very best merely a
guide.
[27]
Dippenaar
v Shield Insurance Co Ltd
1979
(2) SA 904
(A) at 920Cffg.
[28]
2009
(4) SA 327
(SCA) para 3.
[29]
Graeme
himself confirmed that he would not have been at all happy to see
Brenda relocate to Johannesburg to pursue her career
there.
[30]
Mrs
Steyn’s evidence is also inconsistent with evidence about the
industry and the salaries earned.
[31]
Another
purpose to Steyn’s evidence was to demonstrate that she and
Mrs Reay would have gone into a joint business of sorts.
This
amounted to pure speculation. On her own evidence, they were simply
talking about the possibility, thinking that they could
go with it.
Further she, in any event, never implemented this own business or
joint venture anyway – record page 114 line
19 to 115 at line
6.
[32]
The
Plaintiffs submit that by virtue of the fact that the deceased had
been employed in the information technology field for many
years at
the time of her death that on the probabilities she would have
acquired further qualifications. There was also evidence
that she
was enrolled at Wits University many years ago and she was also at
the time of her death enrolled for a university course.
It is
apparent that she is university material which is indicative of her
ability. There is no indication that she did not have
the ability to
acquire knowledge in further languages or that she would have been
unable to acquire those courses, by virtue
of a lack of intellect.
The fact that she was enrolled for further courses at a university
not in computer programming might
also suggest that she might have
been considering other fields, but alternatively might also suggest
more diversified training
for her field of expertise.
[33]
Record
at 367, at lines 7 – 8; Record at 354, at lines 20 – 23;
Record at 355, at lines 1 – 15.
[34]
On
the undisputed evidence of Mr Dand and Mr Cashmore the deceased had
attained the qualifications of Natural Adabas, which was
at the time
of her death the language that was used by Mr Dand as well as Mr
Cashmore and who occupied managerial positions and
that of Mrs
Wilkinson that the deceased had the ability to become proficient in
other languages.
[35]
To
summarize, they contend that the deceased, based on the income
received in 2004 and (based on Koch’s
Quantum
Yearbook
of
2004) could have earned (with benefits) R384,520.00 in a 40 hour
week. That income is categorised by Koch as middle management
and
the upper quartile of Patterson D2. Dr de Kock maintains that this
is the basis upon which the income of the deceased should
be
determined. The upper quartile of D2 in 2015 is R974,000 including
benefits. The upper quartile of D2 in 2016 is R1,045,000.00.
Dr de
Kock’s view was that by 2015 the deceased could have
progressed to Patterson D1. The mean of Patterson D1 in
2005
is R303,250.00. This is less than what she could have earned on a 40
hour week namely R384,520.00 while a 30 hour week would
give
R300,720.00. Accordingly, he is of the view that in 2015 the
deceased could have earned R1,101,000.00 per year which is
the mean
of Patterson D2. If this view is compared with the upper quartile of
D2 (in 2015 – R974,000.00) and D2 (in 2016
–
R1,045,000.00) the Plaintiffs maintain that it compares favourably.
[36]
When
Dr de Kock was asked why he believed that Mrs Reay would have earned
such an exceptional income as he predicted, he explained
that it was
because of her progress when, he actually knew very little, if
anything, about her progress as he had not investigated
her
promotional prospects.
[37]
Dr de
Kock’s evidence about her retirement age appears wrong and
speculative. See the Record at 256, at lines 4 –
24, and
at 370, at lines 5 – 9. He wrongly assumed that Mrs Reay
was a project leader, a team leader or a supervisor
(which she was
not at the time of her death).
[38]
Dr de
Kock’s only independent verification, through the Bridget
Jones Recruitment Agency, revealed that Mrs Reay could now
have
earned more than R468 000.00. This estimate was not far off the
mark from his estimate of Mrs Reay’s own inflation
adjusted
income to date.
[39]
Record
at 351, at lines 16 – 20.
[40]
The
experts had agreed on a retirement age of 63 years. That is however
not the retirement age at Comparex Africa. The Plaintiffs
submit
that it is however not unreasonable to accept that there are still
employment prospects beyond the age of 60. Mr Dand
testified that he
is employed after his retirement albeit in a different sphere. The
Plaintiffs therefore urged a retirement
age of 63 years of age being
the mean between 60 and 65. As much as there might be employment
prospects beyond 60, these would
be elsewhere, not necessarily at
the same rates, the same would also apply to Graeme and him having
alternative employment prospects
post age 60. Post Mrs Reay’s
60
th
birthday
the only loss of support would be that of Graeme. Where the
contributions to their joint support was assumed to be 50:50
and it
is recognized that the loss of support is to assessed by the rough
apportionment of 2;2 for each of Mrs Reay and Graeme,
their joint
income would probably be in excess of their actual requirements. Due
to this uncertainty it is possibly best, albeit
a rough adjustment,
to proceed on the basis that no loss of support is provided for post
Mrs Reay’s 60
th
birthday.
[41]
The
Plaintiffs contention that Mrs Reay’s income (including
benefits) would have increased to R1,188,000.00 per annum is
far too
high unrealistic and in my view totally improbable.
[42]
Graeme
in a document compiled and submitted to ABSA Bank stated that his
gross income was R18 000.00 per month. This was refuted
by the
income tax returns of 2005 which reflects his annual income as
R90,000.00. He stated that he inflated the amount of income
when he
applied for the loan and submitted the document with ABSA Bank, but
in truth and in fact his taxable income was only
R90,000.00. His
attempts in re-examination to distance himself from the larger
expected income he represented in an application
to his bankers was
pathetic. The only inference arising from that very disturbing part
of his evidence is that he had lied either
to the bank, or this
Court, or possibly both.
[43]
The
income which the First Plaintiff earned since at least 2005 have
been vouched for and are set out in the report of Arch Actuarial
Consulting, on page 34 of exhibit C. It is apparent that in 2011,
2012 and 2013 the First Plaintiff earned R383 708.00; R424
201.00
and R492 789.00, respectively.
[44]
Record
at pages 104 – 105.
[45]
Record
at 39, at lines 22 – 25.; Record at 40, at lines 1 –
6.
[46]
Exhibit
D145; Record at pages 104 – 105.
[47]
Record
at page 75, at lines 12 – 17 (read with page 74, at lines 20 –
23).
[48]
Record
at page 75, at lines 18 – 21.
[49]
This
might entail a fairly heavy contingency deduction. As with some of
the other calculations, because Graeme never testified
about and
quantified the specific needs and maintenance requirements of
himself, Mrs Reay and his sons, for example, it is impossible
to
establish whether Jarred needed anything more than R4 000.00
per month and, if so, how much more he needed for his maintenance.
The Defendant submitted that the Plaintiffs should therefore not
complain if for example the loss of support suffered by Jarred
is
determined on the basis that Graeme’s own income coupled with
Jarred’s own income was more than sufficient for
Jarred to
survive during the period 2009 (aged 20) to 2012 (aged 23).
[50]
Groenewald
v Snyders
1966
(3) SA 237 (A).
[51]
Lambrakis
v Santam Limited
2002
(3) SA 710
(SCA) paras 18 and 19: if a deceased estate generates
sufficient income to support the dependents in full, no financial
loss
would be suffered as a result of the death of the deceased.
In
Snyders v Groenewald
1966 (3) SA 785
(C), the Trial Court
concluded that the benefit enjoyed by the surviving spouse from the
occupation of the house before her husband’s
death was
represented by the value of the dominium of the house and that the
accelerated value of this should be a deduction
from the amount due
to the Plaintiff. In quantifying this, the Court concluded that the
deduction would be the accelerated value
of a sum representing the
difference between the value of the house at the date of the
deceased’s death and the amount
of the bond. (The subsequent
appeal to the Supreme Court of Appeal was dismissed, without
specific attention to this issue).
In
Mohan & Others v Road Accident Fund
2008 (5) SA 305
(D),
Nicholson J ignored accelerated benefits arising from the claimant’s
inheritance from her deceased husband with regards
to the half share
of the matrimonial home, on the basis that the claimant was in no
better situation than she was prior to the
death of her husband
since no evidence was directed to showing that she would not have
simply continued to remain in the matrimonial
home. Nicholson J
however delivered the judgment without any reference to the earlier
judgment delivered by the Supreme Court
of Appeal in
Lambrakis
.
He seems to have been influenced by the distinction arising from
less apparent benefits, such as the acquisition of ownership
of a
car or furniture previously used jointly with the deceased but owned
by one or the other party. That distinction however
in my view
ignores that the heir now acquires an additional asset, which
although it may in certain circumstances is required
to be realized
and costs incurred for alternative accommodation, in instances such
as the present, where the Plaintiff continues
to remain on in the
same home although not constituting a cash flow item, represent an
asset against the security of which funds
may be raised, which he
otherwise would not have had at such an earlier stage, or otherwise
never may have had. The accelerated
benefit thereof must be taken
into account.
[52]
Lambrakis
para
13.
[53]
The
Plaintiff was paid two amounts by insurance companies namely R48,
600.00 in respect of an aviation annuity policy. In terms
of this he
received a monthly pension of R1 639.00 which fluctuated between R1
639.00 and R813.00. Subsequent to him having made
a submission to
the ombudsman an amount of R48 600.00 was paid to him. Another
policy was paid out to him in the amount of R45,000.00.
In terms of
the
Assessment of Damages Act No 9 of 1969
al such insurance money
and pension benefits paid as a result of a death, shall not be taken
into account in the assessment of
loss of support.
[54]
There
was a negative balance on the first and final liquidation and
distribution account which amount Graeme paid to ensure the
winding
up of the estate. He received no money from the estate, but did get
transfer of the immovable property awarded to him,
which was bond
free subsequent to the winding up of the estate.
[55]
The
house was the primary residence of the First Plaintiff and the minor
children and is still the primary residence of the First
Plaintiff.
[56]
The
Liquidation and Distribution account however reflected the value as
R900 000.00. The value of R1 470 000.00 is the value placed
on the
land and buildings by Graeme in an application for credit. It seems
optimistic see exhibit D118, 123 – 124, 129;
Record at 107, at
lines 17 – 20.