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[2016] ZAGPPHC 365
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Fotheringham v Road Accident Fund (70534/2013) [2016] ZAGPPHC 365 (23 May 2016)
REPUBLIC OF SOUTH
AFRICA
IN THE HIGH COURT OF
SOUTH AFRICA
(GAUTENG DIVISION,
PRETORIA)
CASE NO: 70534/2013
DATE: 23 MAY 2016
In the matter between:
FOTHERINGHAM, CHRISTOPHER
THOMAS
....................................................................
Plaintiff
And
ROAD ACCIDENT
FUND
.......................................................................................................
Defendant
JUDGMENT
NONYANE. AJ
:
[1]
This is an action for damages arising
out of the injuries sustained by the plaintiff in a motor vehicle
accident which occurred
on 16 December 2010.
[2]
The defendant has previously conceded
the merits in full and the plaintiff is entitled to 100% of his
proven damages.
[3]
At the commencement of the trial the
parties informed me that they have reached agreement in respect of
general damages, future
loss of earnings and future medical expenses.
[4]
The amounts agreed upon is R750 000.00
for general damages and R249 585.00 for past medical expenses. It was
also agreed between
the parties that the defendant will also furnish
the plaintiff with an undertaking in terms of
Section 17(4)(a)
of the
Road Accident Fund Act of 1996
, as amended (hereinafter referred to
as “the RAF Act”) for future medical expenses.
[5]
The issues that I was to determine at
the beginning of the trial were past and future loss of income.
[6]
The plaintiff claims an amount of R887
791 for past loss of income and an amount of R807 400.00 for future
loss of income.
[7]
The defendant counsel in his opening
address stated that he was contesting the amount the plaintiff was
earning at the time of the
accident and the age at which he would
have retired.
[8]
The plaintiff procured medico-legal
reports from the following experts:
Dr Marus, the neurosurgeon
Mr
Mallinson, the neuropsychologist
Ms
Murcott, the occupational therapist
Mr
Whittaker, the actuary
Mrs
B Donaldson, the industrial psychologist.
[9]
The defendant did not procure any
medical report but admitted the plaintiff’s medico-legal report
except the report of the
industrial psychologist.
[10]The reports that were
admitted by the defendants were admitted into evidence without the
need to call the individual experts.
[11]Evidence was led on behalf of
the plaintiff only and the following witnesses were called:
Mrs
Fortheringham, the plaintiff’s wife
Mrs
B Donaldson, the industrial psychologist
Mr
Christopher Thomas Fotheringham, the plaintiff
[12]Mrs Donaldson testified that
he consulted and assessed the plaintiff on 26 August 2015 for
purposes of evaluating the plaintiff’s
work potential prior and
post the accident.
[13]He testified that Mr
Fortheringham would probably have continued working to the age of 75
years. This testimony was corroborated
by both the plaintiff and his
wife.
[14]The defendants counsel in
argument conceded to the evidence led on behalf of the plaintiff that
he would have worked to an age
well beyond the normal retirement age.
[15]He also conceded to an amount
of R807 420.00 reflected in the actuarial report as the figure which
represents the plaintiff’s
future loss of earning calculated to
the age of 75 years.
[16]I agree with the plaintiff’s
counsel that the aforementioned concession and admission by the
defendant’s counsel
resolves the issue of the plaintiff’s
earnings at the time of the accident and the issue of the age at
which the he would
have retired.
[17]The defendant’s counsel
after having made those concessions disputed whether the plaintiff
suffered any past loss.
[18]This issue was raised after
evidence had been led that the plaintiff has, after the accident,
merged his business with that
of his competitor, Mr Dudley Palmer,
who paid him 70% of the commission stemming from his clients in the
first year, 60% of the
commission in the second year and 50% in the
third year. This information is contained in the Industrial
Psychologist’s report.
[19]The industrial psychologist’s
testimony in relation to the payment was that these payments were
made in respect of the
sale of the plaintiff’s business to Mr
Dudley Palmer because he could not work anymore. The plaintiff also
confirmed in his
testimony that such payments were made in lieu of
the sale of his business.
[20]Counsel for the defendant
placed in dispute whether the commission that the plaintiff received
in lieu of the sale of his business
is a benefit which is deductible
from the damages recoverable from the defendant.
[21]The defendant’s counsel
argued that the income that the plaintiff received from the sale of
the business is a deductible
benefit and as such should be deducted
from the plaintiff’s recoverable damages.
[22]She further argued that since
there was no evidence as to the precise amount that the plaintiff
received as such benefit; the
court had to conclude that the
plaintiff has not proved his past loss of earnings
[23]Counsel for the plaintiff
contended that the sale of the business cannot possibly be equated
with income or a benefit gained
as a result of the accident. The
plaintiff would have benefitted from such income even if the accident
had not occurred.
[24]The plaintiff’s counsel
further contended that the monies received were not simply as a
consequence of the injuries sustained
but were as a result of the
sale of his business, inclusive of (amongst others) his clients, the
goodwill, and liabilities that
he had built up over the years and as
a result cannot be equated with monthly salary which is earned as
income.
[25]In this matter it is
important to distinguish the sale of the plaintiff’s business
from the loss of income sustained by
the plaintiff. It is clear from
the evidence that the payments received by the plaintiff were in
respect of the sale of the business
and are accordingly not to be
taken into account as commission. This can be deduced from the simple
fact that the plaintiff did
not have to do any work to earn the
payments, which would have been the case had it been intended to be a
commission.
[26]The question I now have to
determine is whether the proceeds of the sale of a business is a
benefit that has to be deducted
from the plaintiff’s past loss
of income and or earning capacity.
[27]In determining whether
accrual of benefits resulting from a motor vehicle accident is a
deductible or non-deductible benefit,
the following broad principles
apply:
[27.1]
A benefit which accrued purely as a
result of the injury or death and for no other reason falls to be
deducted from the recoverable
damage.
[27.2]
If the accrued benefit is inappropriate
according to public policy and reasonableness it should be ignored
when assessing damages.
[27.3]
In determining whether the benefit
accrued as a direct consequence of the accident and falls to be
deducted from the damages recoverable,
the court must distinguish
between the duty of the claimant to mitigate his damage from the
accrual and deriving of benefits resulting
from the accident.
(See
HB Klopper “The Law of Third-Party Compensation” Third
Edition at page 142)
[28]The plaintiff in mitigation
of damage is required to attempt to limit his own losses resulting
from the breach of another party.
The principle of mitigation of
damages operates as follows:
[28.1]
The plaintiff must take all steps to
mitigate his losses. Losses that the plaintiff should have mitigated,
but failed to do so will
not be recovered from the defendant and the
onus to prove that mitigation has not taken place rests with the
defendant.
[28.2]
The plaintiff may recover any loss
incurred as a result of his reasonable attempt to mitigation.
[28.3]
The plaintiff cannot claim for losses
that have been successfully mitigated.
[29]The question that need to be
asked is what is the loss that the plaintiff has actually suffered as
a result of the accident.
In the present case, the plaintiff’s
loss is the loss of income in the form of his monthly salary that he
would have earned
but for the accident.
[30]The plaintiff in this
instance did attempt to mitigate his damages by going back to work
but could not cope with the work load
and had to leave. This is not
in dispute as the defendant has already conceded to the plaintiff’s
unemployability.
[31]In Everett and Another v
Marian Heights (Pty) Ltd
1970 (1) SA 198
(C) the court held that the
rental received after 31 January was a deductible benefit flowing
from the breach of contract which
the respondent would not have
received had the contract been performed.
[32]In the present case the sale
of the plaintiff’s business would have taken place even if the
plaintiff had not been involved
in the accident and therefore this
benefit did not accrue as a direct consequence of the accident.
[33]The proceeds of the sale of
the plaintiff’s business did not increase his patrimony and
cannot be considered as a double
benefit which he obtained as a
direct result of the accident. Pre-accident, the plaintiff was
earning a monthly salary whilst at
the same time owning the business.
Had the accident not occurred, he would have continued to earn his
monthly salary and grow his
business which he might have sold, when
he retires, at a much higher price than he sold it for.
[34]I am of the view that
deducting the proceeds of the sale of the business or holding the
benefit derived therefrom as deductible
benefit will have the effect
of unduly reducing the plaintiff’s patrimony. It will be
unreasonable and not equitous to the
plaintiff and not serve the
purpose of compensation, which is to put a plaintiff in a position in
which he would have been had
the accident not occurred.
[35]Having heard arguments from
both counsel for the plaintiff and the defendant, considered the
cases cited by both plaintiff’s
and defendant’s counsel
and taking all relevant factors in assessing the quantum of both past
and future loss of income,
I deem the following amount as adequate
compensation:
a.Past
loss of income R 887 791.00
b.Future
loss of earnings R807 420.00
[36]The defendant admitted to the
liability of the following heads of damages and their respective
quantum in addition to an undertaking
in terms of Section 17(4)(a) of
the Road Accident Fund Act 1996 (as amended):
a.
Past hospital and medical expenses R249
585.00
b.
General damages R750 000.00
[37]It is trite that costs should
follow the cause. In this case the costs of suit are awarded to the
plaintiff including the costs
of counsel and costs of attending to
the examination and obtaining expert reports.
[38]In the result the following
order is made:
1.
Judgment is granted in favour of the
plaintiff for payment of the sum of R2 694 776.00 within 30 days from
the date of this order.
2.
The defendant is ordered to pay interest
on the sum of R2 694 776.00 at the rate of 9% from 31 days after the
date of this order
to date of payment.
3.
An undertaking in terms of Section
17(4)(a) the Road Accident Fund Act 1996 (as amended) to be furnished
by the defendant for the
plaintiff’s future medical expenses.
4.
The defendant is ordered to pay the
plaintiff’s costs of suit including the costs of the following
experts:
a.
Dr Marus, the neurosurgeon
b.
Mr Mallinson, the neuropsychologist
c.
Ms Murcott, the occupational therapist
d.
Mr Whittaker, the actuary
e.
Mrs B Donaldson, the industrial
psychologist.
NONYANE AJ ACTING JUDGE OF THE HIGH
COURT OF SOUTH AFRICA, GAUTENG DIVISION, PRETORIA
Counsel
for the Plaintiff Adv C Vallaro
Instructed
by Munro Flowers & Vermaak
C/O
Friedman Hart Solomon & Nicolson
Counsel
for the Defendant: Adv L Coetzee
Instructed
by TM Chauke Inc.
Date
of trial 26 October 2015
Date
of Judgement May 2016