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[2016] ZAGPPHC 494
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D.K v Road Accident Fund (A913/2014) [2016] ZAGPPHC 494; [2016] 3 All SA 850 (GP) (30 June 2016)
SAFLII
Note:
Certain
personal/private details of parties or witnesses have been
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Policy
IN
THE HIGH COURT OF SOUTH AFRICA
/ES
(
GAUTENG
DIVISION, PRETORIA
)
CASE
NO: A913/2014
COURT
A
QUO
NO: 456/2013
DATE:
30/6/2016
Not
reportable
Not of
interest to other judges
Revised.
IN
THE MATTER BETWEEN
D
K APPELLANT/PLAINTIFF
A QUO
AND
THE
ROAD ACCIDENT
FUND RESPONDENT/DEFENDANT
A QUO
JUDGMENT
PRINSLOO,
J
[1]
This is a typical claim for compensation for damages flowing from
injuries sustained in a motor collision which, in this case,
occurred
on 23 July 2011.
Brief
introduction
[2]
From the record, it appears that the trial came before our brother
Mavundla on 3 June 2014.
On
that occasion, the question of liability was settled (100% in favour
of the appellant) and all the heads of damages normally
to be found
in claims of this nature were also settled with the exception of the
claim for loss of earnings.
[3]
The trial involving determination of the sole issue of what award, if
any, should be made to the appellant, as plaintiff, for
loss of
earnings, came before our sister Kubushi (the learned Judge
a quo
for present purposes) on 18 August 2014.
[4] On
23 September 2014 the learned Judge handed down the written judgment
in which she ruled that no award should be granted in
respect of loss
of earnings and the claim for that alleged loss was dismissed with
costs.
[5] On
19 November 2014, the learned Judge granted leave to appeal to the
Full Court of this Division. This appeal came before
us on 15
June 2016.
Brief
remarks about the curtailment of proceedings, admissions made and
evidence considered during the trial
[6]
During a pre-trial conference held on 28 May 2014, the following was
minuted:
"5.1.2 The defendant's attorney has delivered no expert reports
on behalf of the defendant to date hereof.
5.1.3 The defendant was requested to admit the contents of the
reports of the plaintiff's experts in the fields of expertise where
the defendant has not delivered reports of opposing experts.
ANSWER
: The defendant's attorney indicated that the
defendant admits the contents of the reports of the plaintiff's
experts."
[7] As
a result of these admissions, the medico-legal reports of the
following experts, engaged by the appellant (as plaintiff)
were
presented to the court and considered for purposes of the judgment:
Dr Birrell (orthopaedic surgeon)
Dr Truter (clinical psychologist)
Dr Botha (specialist physician)
Ms Heyns (occupational therapist)
Ms E Noble (industrial psychologist)
Dr Van Heerden (urologist)
Mr G Whittaker (actuary).
[8] No
viva voce
evidence was presented to the court and the learned
Judge was addressed at length by the two opposing counsel, Mr Grobler
and Mr
Hattingh.
[9] On
behalf of the respondent submissions were made about purported
contradictory observations made by the experts in their medico-legal
reports. On a general reading of the reports, I could find no
material observations by the experts which could be described
as
being of such a contradictory nature that it may redound to the
prejudice of the appellant in the presentation of his case.
In
the main, the "contradictions" which I detected, had to do
with issues such a sick leave, paid and unpaid, dates when
the
appellant returned to work after lengthy periods of absence and
related issues. These "contradictions" such
as they
may have been, were, in my view, adequately investigated and
addressed by Ms Noble, the industrial psychologist, who, by
the
nature of her report, had to consider all the medico-legal reports,
identify any "contradictions" and clarify the
material
uncertainties by telephonic consultations with the erstwhile
employers of the appellant.
[10]
In this regard, the learned Judge said the following in her judgment:
"[13] According to the defendant's counsel, the plaintiff failed
to discharge the burden of proof, on a balance of probabilities,
of
the manifestation of any loss and the quantification thereof, due to
the vastly contradictory nature of the collateral information
so
admitted and as contained in the various reports. Counsel's
submission is that the plaintiff should have presented
viva voce
evidence to cure the discrepancies and without doing so, counsel's
contention is that plaintiff failed to prove his past and future
loss
of income. In particular, the evidence in respect of the
actuarial report, which the defendant did not admit, remains
not
proved without the oral evidence of the actuary. It was
therefore, according to counsel, imperative for the actuary
to come
and prove his calculations for the quantification of the loss.
[14] The submission by the plaintiff's counsel that the defendant's
admission of the reports limits the issues which a court is
required
to consider, is correct. As such, where a court is not required
to consider and decide a particular issue it means
that it is not
necessary for either party to present any further evidence on that
particular issue. Consequently, I rule
that, except for
the actuarial there was no need for the plaintiff to have led any
viva voce
evidence either on his own or that of the experts
who compiled the reports."
[11]
As to the presentation of the report of the actuary, Mr Whittaker,
the following was recorded in the pre trial minute:
"5.1.4 The defendant was requested to admit the actuarial
principles utilised in the actuarial calculations of Mr Whittaker
and
to confirm that it would not be necessary to call Mr Whittaker during
the trial to give
viva voce
evidence in substantiation of his
calculations?
ANSWER
: The defendant's attorney undertook to revert
before 16:30 on 30 May 2014."
[12]
It is common cause that the defendant's attorney never "reverted".
It appears from submissions made by
counsel on behalf of the
appellant, during the trial, that there was never any indication by
the respondent/defendant that the
methods employed by the actuary,
and the correctness of his calculations would be challenged.
As I mentioned, the respondent
did not consult an actuary and,
on my reading of the record, there was no rebuttal of the actuarial
methods adopted by Mr Whittaker
neither were the correctness of his
calculations challenged in any way. It is, in my view, a common
experience that the assumptions
made by an actuary may be
challenged. These are the assumptions on which the calculations
are based. In the present
case, the assumptions flow from the
uncontested evidence of Ms Noble who also incorporated the
uncontested evidence of the other
experts in her report.
[13]
Against this background, I see no reason why, in the event of a
finding that the appellant did suffer a loss of income or a
loss of
earning capacity as a result of the
sequelae
of the injuries
sustained in the collision, the calculations of actuary Whittaker
cannot be taken into account in order to determine
a just and
reasonable and realistic amount to represent an award for those
damages.
[14]
This subject received some attention in the well-known case of
Southern Insurance Association v Bailey NO
1984 1 SA 98.
It is convenient to quote the following passage which appears at
113F 114E:
"The second attack on the judgment of the trial court was that
an actuarial computation was inappropriate in the present case
for
the reason that it was based on assumptions and hypotheses so
speculative, so conjectural, that it did not afford any sound
guide
to the damages which should be awarded.
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, augurs or
oracles. All that the court can do is to make an estimate,
which is often a very rough estimate, of the present value of the
loss.
It has open to it two possible approaches.
One is for the Judge to make a round estimate of an amount which
seems to him to be fair and reasonable. That is entirely
a
matter of 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 guess-work 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 and Company
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 ...'
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 ..."
It
should be added that in
Bailey
, where the court opted for an
actuarial calculation in order to determine the loss, subject, of
course, to some modifications,
the injured child, who rejoiced in the
name of Danderine, was only 2 years old when the collision
occurred.
In the
present matter, of course, the facts and details, on the uncontested
evidence, on the strength of which the actuarial assumptions
could be
made, are far more settled than was the case with Danderine: the
appellant was already 43 years old when the collision
occurred,
and his career path and other particulars were determinable with
relative ease, subject to some areas of uncertainty.
Consequently, this is, in my view, a clear case where the actuarial
calculations can be applied in order to determine an award,
if it
were to be found that the appellant did, indeed, suffer a loss of
income or a loss of earning capacity.
Brief
remarks about the medico-legal evidence, with emphasis on the
evidence of Ms Esmé Noble, industrial psychologist,
who
incorporated all the medico-legal reports for purposes of her own
assessment
[15] I
turn to a brief summary of the medico-legal evidence, and my remarks
will be confined to what appears to me to be of direct
relevance for
purposes of assessing the loss of earnings or earning capacity.
(i)
Dr
D A (Tony) Birrell, orthopaedic surgeon.
[16]
Dr Birrell confirmed the fracture of the right acetabulum, which was
sustained in the collision. The acetabulum is the
socket of the
hip bone, with which the head of the femur articulates.
There was also a fracture of the inferior pubic
ramus. On
29 July 2011, some six days after the collision, an open
reduction and internal fixation of the right acetabulum
fracture was
performed. A soft tissue injury of the left hand was also
placed in a splint. The appellant was immobilised
with two
crutches for six months. The appellant also complained of lower
back pain.
At the
time of the injury, the appellant had been a bus driver in the employ
of the Pretoria municipality for about thirteen years.
He also
ran a concomitant panel-beating and spray-painting business on the
side. This he started before he became employed
as a bus
driver. He was in permanent employment in that capacity.
As to
his past medical history, he had been treated for hypertension and he
suffered from ischaemic heart disease. Prior to
the collision,
in December 2010, he had received a coronary by-pass graft operation.
After
the collision he experienced erectile dysfunction and in general, his
level of activity became much reduced. There was
a significant
change to his normal lifestyle.
It
appeared that the back ache experienced by the appellant had to do
with the fact that he was walking with a limp and it was also
related
to the fractured hip.
As to
the appellant's work capacity, he told Dr Birrell that before the
injury, he attended to his panel-beating work from 05:00
to 08:00 and
he used to do the shift as a bus driver from 14:00 to 18:00,
excluding Saturdays and Sundays.
When
he saw the doctor in January 2013, some 18 months after the
collision, he said that he was no longer able to do the physical
work
of a panel-beater but attended to some administrative work in that
business and also at the Pretoria municipality because
he had not
yet, by then, returned to bus driving. He also lost his
allowances, so that his remuneration was at a lower
level. He
told the doctor that he was unable to drive a bus.
[17]
The following passage from Dr Birrell's report, when he deals with
the X ray findings, is, in my view, of particular importance
for
present purposes:
"I remain with my view that the patient has sustained a serious
injury as a result of the accident, ie he qualifies under
the
Narrative Test as a serious injury. Whilst he only reaches 11%
because of his acetabular fracture and the soft tissue
injury to the
lumbar spine, noting that 90%, at least, of pelvic fractured patients
have concomitant lumber symptoms, this right
acetabular injury still
represents a serious problem for this patient. He has
considerable loss of movement in the right
hip.
The fact
that his right hip has diminished movement and pain means he can no
longer work as a bus driver
and this also hinders his work to
some extent, as I will discuss shortly, relating to his panel-beating
business." (Emphasis
added.)
The fact that the injuries sustained in the collision rendered the
appellant incapable of continuing with his work as a bus driver
which
was his primary profession, apart from the part-time panel-beating
business, must, in my view, point to a clear loss of earning
capacity
sustained by the appellant. I add that he appears to have been
working as a bus driver for most of his career, because,
according to
his work history analysed by Ms Noble, he also worked for the
Johannesburg metro bus company as a bus driver
for 15 years between
April 1989 and April 1995 (the dates could be wrong as the period
does not come to fifteen years).
I add the following passage from Dr Birrell's report:
"In his work as a bus driver he is 100% disabled and this is
permanent. In his panel-beating work I would estimate again
that a period of six months of sick leave would have been ample and,
indeed, this is fairly liberal. Here I would estimate
that in
an administrative type position, ie doing quotes, he has a loss of
work capacity at present of 10%. He is a good
candidate for a
total hip replacement and this would push his loss of work capacity
up 15%."
I add that Dr Birrell was asked to furnish an addendum to his earlier
report dealing with the appellant's retirement age/loss of
work
capacity. The addendum is dated 13 February 2014 about a
year after the appellant resigned from the City Council
which
resignation came after Dr Birrell's first report.
The following remarks are made by Dr Birrell:
"Concerning this patient's retirement, in fact, he took a
so called package and not a pension. I cannot support
his
resignation at the City Council of Tshwane in February 2013 due to
the accident! He was already on light duty.
He had the
benefit of a medical aid and he should have sought orthopaedic advice
as to the possible removal of the internal fixation
from the
acetabulum or even the possibility of a total hip replacement or
receiving more intense conservative therapy.
I find no reason at all to support medically this patient's
resignation.
I have already stated previously that his overweight status and poor
cardiac history will force him into early retirement before
any
sequelae
of the accident."
As to the retirement from the panel-beating business the doctor said:
"I cannot find that this patient is justified in 'retiring'
because of the accident. He stated that he only occasionally
supervises. I understand his son and daughter are running the
business, so possibly his services are not required, but I
gather he
is available to supervise when needed.
There is no loss of note that he sustained as a supervisor because of
the accident."
(ii)
Dr Izak J van Heerden, urologist
.
[18]
The doctor dealt,
inter alia
, with the erectile dysfunction
which he pointed out was an early sign of cardio-vascular disease.
There were no other urological
implications to the injury, and from a
urological view point his life expectancy "should be normal".
(iii)
Dr Kobus Truter, clinical psychologist
.
[19]
Referring to the July 2011 collision and the injuries sustained, the
doctor concluded that the appellant suffers from an anxiety
disorder. He ought to benefit from certain proposed
psychological treatment.
"He presents minor symptoms of a depressed mood, which are
unfortunately partially entwined with his anxiety as well as his
pain
and limitations. Some of these symptoms may therefore prove to
be resistant to change."
(iv)
Dr A P J Botha, specialist physician.
[20]
The doctor dealt with the medical history of the appellant, including
certain "positive prognostic factors" such
as the fact that
he had successful by-pass surgery, stopped smoking and was on
treatment for ischaemic heart disease. Certain
"negative
factors" include that he is significantly overweight bordering
on morbid obesity, there could be underlying
glucose intolerance or
diabetes, he is not on cholesterol-lowering therapy and has a
low-normal left ventricular ejection fraction.
Against
this background, and according to certain guide-lines consulted by
the doctor, he came to the conclusion that "based
on the current
clinical findings and risk profile, he would most likely not have
been considered fit to work as a bus driver beyond
the age of 55".
I add that this was taken into account by Actuary Whittaker when
preparing his calculations.
[21]
As to the panel-beating work, the doctor said the following:
"When one considers the inevitable progression of the
atherosclerosis and worsening obesity, I estimate that he would not
have been physically capable of doing administrative work and
performing the other duties required of panel beating work such
as doing quotes after the age of about 60 years."
Again,
I add that the actuary was instructed to work on a pre-trauma
scenario of an overall employment career (bus driver and
panel-beater)
which would end at age 55.
[22]
The doctor also indicated that in the context of early retirement,
the life expectancy of the appellant also had to be considered
"as
these two aspects are usually proportionally truncated".
The doctor felt that there was a 10 year shorter life
expectancy.
(v)
Nicola Heyns, occupational therapist.
[23]
The following passage from the report of Ms Heyns appears to me to be
of relevance for present purposes:
"Mr
K thus does not meet the frequent sitting demands of his job as bus
driver nor the frequent standing and stooping and the
occasional low
work demands of his job as spray-painter at the Jay Dean Auto
Body (family owned) due to accident-related
sequelae
.
This justifies his resignation as bus driver after the accident and
that he has been unable to work as a spray-painter due
to injuries
sustained in the accident. Mr K’Ss son has since taken
over the managerial responsibilities at Jay Dean
Auto Body, while
Mr K has been accommodated in a flexible
administrative/driver/supervisor position in this sympathetic work
environment."
[24]
Ms Heyns also remarks that the appellant would be able to continue to
assist in an administrative, supervising and/or managerial
capacity
if accommodated in his job within his residual work capacity on an
ongoing basis even after a total right hip replacement.
She
felt that the psychological
sequelae
reported on by Dr Truter,
should the depression worsen, could contribute to fluctuation in
performance within a work place, contributing
to his vulnerability as
employee.
[25]
She expressed the view that having regard to his pre-existing medical
conditions, the appellant is now a vulnerable employee
in the open
labour market and his job options and occupational potential have
been curtailed because of injuries sustained in the
accident.
She expressed the view that the appellant has sustained long term
functional impairment as a result of the accident
which "impacts
significantly on his occupational performance".
[26]
Against this background, I repeat my earlier conclusion that, on the
probabilities, the appellant has suffered a loss of earning
capacity/future loss of earnings due to the
sequelae
of the
injuries sustained in the collision.
(vi)
Ms Esmé Noble, industrial psychologist.
[27]
Ms Noble prepared a very comprehensive report, dealing with the work
history of the appellant, his personal history, including
details of
his immediate family, academical background and so on. In the
latter regard, I have to add that he only went to
school up to Grade
11 (which he failed) and has no other formal qualifications. He
is also not a qualified panel-beater.
[28]
Importantly, details of the appellant's salary which he earned as a
bus driver including the 13
th
cheque and other
allowances as well as overtime payments and a housing allowance,
medical plan and pension fund were properly
investigated by Ms Noble
and recorded by her after telephonic discussions with the Human
Resources officer of the Tshwane
municipality, Mr Stefan Roos.
She also had a discussion with the driver's supervisor, Mr J
Ramalepa. All this information
was properly conveyed to Actuary
Whittaker.
[29]
As I already indicated, Ms Noble dealt comprehensively with the
undisputed medical evidence. Where I have already attempted
to
perform a similar exercise, I find it unnecessary to embark upon
unnecessary repetition.
[30]
True to her mandate as an industrial psychologist, Ms Noble then
offered certain guidelines as to the projected career paths
of the
appellant into the future, both but for the injuries sustained in the
collision and, secondly, in view thereof:
•
Projected career path but for the collision.
Ms Noble dealt with the opinion of Dr Botha, to which I have
referred, and concluded that the appellant would in any event, on
the
probabilities, not have worked for the City of Tshwane as a bus
driver beyond the age of 55 whereafter he would have been forced
to
go on early retirement without penalty ("vervroegde aftrede
sonder penalisasie"). These details she cleared
with
Mr Roos, the Human Resources Manager. She obtained the
exact salary figures, as I have indicated, for the year
2010/2011
which she postulated would have to be adjusted in accordance with the
Consumer Price Index for purposes of this calculation.
She
obtained collateral information in the form of a salary advice and,
in consultation with Mr Roos, recorded all the salary details
including allowances and so on to which I have referred.
Ms Noble then postulated that after the early retirement the
appellant would have continued with his involvement with the family
panel-beating business and, on the probabilities, the son would have
taken over the business in due course. The appellant
would then
have carried on with his administrative contributions up to the age
of 60 years as recommended by Dr Botha.
As I
indicated earlier, the actuary was instructed to base his
calculations on a retirement age of 55.
It should be added, that Ms Noble advised that the projected earnings
of the appellant from this family business could be determined
by a
forensic auditor. It appears from an addendum report of Ms
Noble, dated 19 May 2014, that the forensic auditor
consulted by the
appellant's legal representatives found that, on the available
information, he was unable to determine the required
details of the
projected earnings. As an alternative approach, Ms Noble
advised that the loss may be equated to the expense
which the
appellant would have to incur by employing another person to do the
work which the appellant would have been able to
do, up to age 55,
but for the injuries sustained. Ms Noble puts it as
follows:
"Soos in die skrywer se eerste verslag genoem is sy enigste kans
op 'n inkomste uit self-emplojering en sou hy iemand moes
aanstel om
die spuitverfwerk te verrig wat klaarblyklik voorheen deur hom verrig
is. Sy voorafbestaande obesiteit en mediese
kondisie in ag
genome is die skrywer van mening dat 'n jonger persoon meer
produktief sou/sal wees as wat vir hom moontlik sou/sal
wees en sal
die koste aan 'n ongekwalifiseerde spuitverwer verdeel moet word na
gelang van die persentasie toegeken om sy inset
te vervang, en wat
die persoon addisioneel sal kan uitsit.
Aangesien mnr K self nie 'n gekwalifiseerde spuitverwer is nie maar
oor die nodige vaardighede en ondervinding beskik om die werk
te kan
verrig, word markverwante basiese salarisse vir geskoolde operateurs
(nie-gekwalifiseerde ambagsman) vir kwantifiserings-
doeleindes
aanbeveel synde die botsing tot gevolg gehad het dat hy nie meer as
spuitverwer kan werk nie. Aangesien dit 'n
klein werkswinkel is
maar hy 'n mededingende salaris sal moet betaal om 'n goeie standaard
aanstelling te maak, en die persoon
te behou, word die onderste
kwartiel basiese salaris vir kwantifiseringsdoeleindes aanbeveel."
In this regard, the salary for such a replacement unqualified
panel-beater was then fixed by Ms Noble at the Paterson B3 level
on
the lowest quartile. This information was then conveyed to
Actuary Whittaker who said the following in his report:
"On the basis of an addendum report by Ms Noble dated 19 May
2014, we have determined Mr K’Ss loss from the Auto
Body
business as being equal to the cost of an assistant."
I add that it is trite that there is no reason in principle why, in
an appropriate case, the cost of employing a substitute should
not
form the basis of a claim for damages arising from a plaintiff's
inability to carry on his pre-collision trade or profession
–
see
Terblanche v Minister of Safety and Security
2016 2 SA 109
at 113E H and the case there mentioned, notably
President
Insurance Co Ltd v Mathews
1992 1 SA 1
(A) at 5E G.
•
Projected career path having regard to the accident
Based on all the salary details and allowances applicable to the
appellant's earnings as a bus driver, the actuary then calculated
the
loss of earnings from the date that the appellant resigned, namely 6
August 2012 until age 55. From 1 July
2014, provision
was made for inflationary increases, concisely described in paragraph
3.2.1 of the actuarial report, until retirement
age at 55.
[31]
As to the loss of earnings from the Auto Body business, this was
determined from the date of the accident until age 55 on the
basis as
I have indicated, that the loss from the Auto Body business would be
equal to the cost of the assistant, employed at the
relevant Paterson
level as advised by Ms Noble. Of course, Ms Noble's evidence is
not in dispute.
(vii)
Mr Gregory Whittaker, consulting actuary
.
[32] I
have dealt with most of the relevant aspects of the actuary's report.
[33]
In addition, it can be stated that income tax was taken into account
at a maximum marginal rate of 40% and further assumptions
with regard
to inflation, net discount rate and taxation appear from the report.
[34]
As to the necessary contingency deductions, the actuary was
instructed to make certain general contingency deductions which
would
make allowance for items such as loss of earnings due to illness,
savings in relation to travel to and from work and risk
of future
retrenchment and resultant unemployment. Mr Whittaker was
instructed to reduce his calculations of the loss
of earnings on the
basis of 10% for past loss of earnings (bearing in mind that the
calculation date employed was 1 July 2014,
almost three years
after the accident) and 20% for future loss of earnings.
Bearing
in mind the relatively short period anticipated to elapse between the
calculation date (when the appellant would have been
46 years of age)
and the expected retirement age of 55, some nine years later, it
seems to me that these contingency deductions
with regard to the
income as a bus driver are generous and, if anything, redound to the
advantage of the respondent. The
same applies to the truncated
retirement age of 55 from the panel-beating business despite Dr
Botha's projection of age 60, except
that the contingency deductions
in respect of the loss flowing from the spray-painting career appears
to me to be too generous,
for reasons mentioned hereunder.
[35]
In his very comprehensive report, Actuary Whittaker also took into
account the effect of the loss limits imposed in terms of
section
17(4)(c) of the Road Accident Fund Amendment Act 19 of 2005 ("the
Amendment Act") which has a bearing on accidents
occurring after
1 August 2008. The actuary pointed out that in terms of section
17(4A)(a) of the Amendment Act, the loss
limit of R160 000,00
per year is adjusted quarterly. The loss limit in place at the
date of the accident was taken as
R185,289 per annum.
In the
summary of the results presented by the actuary, the losses have been
shown before the application of the Amendment Act and
after the
application of the Amendment Act.
Summary
of the results
[36]
Losses before the application of the Amendment Act.
Past loss
Gross past loss
R645,672
Less contingency deduction: 10%
R64,567
Net past loss:
R581,105
Future loss
Gross future loss
R2,405,593
Less contingency deduction: 20%
R481,119
Net future loss
R1,924,474
Total net loss
R2,505,579
Losses after the application of the Amendment Act
Net past loss
R416,491
Net future loss
R1,633,141
Total net loss
R2,049,633
[37]
The actuary prepared an addendum report dated 19 August 2014, three
months after the first report of 19 May 2014.
In the
addendum, the details and assumptions as well as the final figure
remain the same. The calculation date also remains
at 1 July
2014 and the losses are also deducted after the application of the
Amendment Act.
As I
mentioned earlier, the actuary also deducted a maximum marginal rate
of tax of 40% from the cost of employing the replacement
unqualified
spray-painter.
The
contingency deductions (10% for past loss and 20% for future loss,
both as regards the bus driver salary and the auto business
salary)
also remain the same.
[38]
What is convenient about the addendum, is that the actuary gave a
break-down, distinguishing between the loss with regard to
the bus
driver salary and the loss with regard to the auto business salary.
It is
convenient then, to tabulate the projected loss in respect of the two
fields of endeavour:
Net past loss (bus driver)
R330,133
Net past loss (auto business)
R86,359
Net future loss (bus driver)
R1,226,088
Net future loss (auto business)
R407,053
Total net
loss
R2,049,633
The
judgment refusing any award for loss of earnings or loss of earning
capacity: Is there room for this Court of Appeal to
interfere?
[39]
In
Prinsloo v Road Accident Fund
2009 5 SA 406
(SECLD) the
learned Judge, at 409C, observed that the legal position relating to
a claim for diminished earning capacity is trite.
At 409C-410A,
the learned Judge quoted extracts from the leading judgments on the
subject. For the sake of convenience, I
repeat passages from
those judgments:
• In
Santam Versekeringsmaatskappy Bpk v Byleveldt
1973 2
SA 146
(A) the following was said at 150B-D:
"In 'n saak soos die onderhawige word daar namens die benadeelde
skadevergoeding geëis en skade beteken die verskil tussen
die
vermoënsposisie van die benadeelde vóór die
onregmatige daad en daarna. Kyk, bv,
Union Government v
Warneke
1911 AD 657
op bl 665 ... Skade is die
ongunstige verskil wat deur die onregmatige daad ontstaan het.
Die vermoënsvermindering
moet wees ten opsigte van iets wat op
geld waardeerbaar is en sou insluit die vermindering veroorsaak deur
'n besering as gevolg
waarvan die benadeelde nie meer enige inkomste
kan verdien nie of alleen maar 'n laer inkomste verdien."
• In
Dippenaar v Shield Insurance Co Ltd
1979 2 SA 904
(A) the same learned Judge of Appeal (by now the Chief Justice) said
the following at 917B D:
"In our law, under the
lex Aquilia
, the defendant must
make good the difference between the value of the plaintiff's estate
after the commission of the
delict
and the value it would have
had if the
delict
had not been committed. The capacity
to earn money is considered to be part of a person's estate and the
loss or impairment
of that capacity constitutes a loss, if such loss
diminishes the estate."
[40]
In view of the aforegoing, it therefore seems that the principle to
be applied for present purposes is to recognise, as held
by the
learned Chief Justice in
Dippenaar
, that the capacity to earn
money is considered to be part of a person's estate and the loss or
impairment of that capacity constitutes
a loss, if such loss
diminishes the estate.
[41]
In dismissing the claim for loss of earnings, the learned Judge
a quo
, in the present matter, said the following:
"Although the plaintiff has proved disabilities which,
potentially, could give rise to a reduction in his earning capacity,
he has, however, failed to prove that this has resulted in
patrimonial loss. He has failed to discharge the
onus
of
proving that he suffered a loss or reduction of earning capacity as
his post-accident has improved.
Consequently, I have to rule that no award should be granted on this
specific head of damages. The plaintiff's claim for
loss of
earnings is dismissed with costs."
[42]
In deciding whether or not to interfere with this judgment, one has
to bear in mind the trite principle, as I do, that when
dealing with
a so-called "appeal on fact" which is, by and large, the
situation in the present matter, a Court of Appeal
will be slow to
interfere with the findings of fact of the trial Judge.
The
well-known principles were tabulated (and endorsed with approval in
many cases thereafter) in
Rex v Dhlumayo and another
1948 2 SA
677
(AD) at 705 706.
One of
these well-recognised principles is:
"3. The trial Judge has advantages – which the Appellate
Court cannot have – in seeing and hearing the witnesses
and in
being steeped in the atmosphere of the trial. Not only has he
had the opportunity of observing their demeanour, but
also their
appearance and whole personality. This should never be
overlooked."
In the
present case, there was no
viva voce
evidence. All the
evidence, produced by the experts, was admitted as being correct.
For obvious reasons, there could
be no adverse credibility findings
from the point of view of the appellant.
As
held in
Dhlumayo
, the Court of Appeal may interfere where
there was a misdirection on the part of the trial Judge. The
learned Judge of Appeal
puts it as follows at 706:
"10. There may be a misdirection on fact by the trial Judge
where the reasons are either on their face unsatisfactory or where
the record shows them to be such; there may be such a misdirection
also where, though the reasons as far as they go are satisfactory,
he
is shown to have overlooked other facts or probabilities.
11. The Appellate Court is then at large to disregard his findings on
fact, even though based on credibility, in whole or in part
according
to the nature of the misdirection and the circumstances of the
particular case, and so come to its own conclusion on
the matter."
It is
also trite that "subject to the difference as to
onus
,
the same general principles will guide an Appellate Court both in
civil and criminal cases" –
Dhlumayo
at 706.
See also
State v Francis
1991(1) SACR 198 (A) at 204c e.
[43]
The learned Judge, correctly in my view, made a number of findings of
fact on crucial aspects by endorsing the undisputed evidence
of the
experts:
• The weight of the evidence, as also endorsed by the learned
Judge, is that after the appellant returned to work following
the
collision, he was accommodated in an administrative position but
later, in early August 2012, asked to resume his job as a
bus
driver. He could not cope in that capacity and decided to
resign.
Occupational therapist Heyns puts it as follows:
"He returned to work as a bus driver in July 2012 (one year
after the accident) during which time he received full salary.
He reported that after having been accommodated in an administrative
position, he was reportedly asked to resume his job as bus
driver in
early August 2012. He could barely complete the morning shift
(05:00 to 08:00) due to lower back and right hip
pain and
subsequently was unable to return for the afternoon shift. He
reportedly decided to resign and remained absent from
work as he did
not consider going back to the administrative position. His
work contract was formally terminated in February
2013."
The learned Judge recognised the inability of the appellant to return
to work as a bus driver and held as follows:
"On 2 August 2012, an Occupational Health Panel (OHP) found him
fit to commence work as a bus driver and he was ordered to
leave the
administrative work and go back to his old job. It only
transpired much later after an explanation from Mr Ramalepa,
the
plaintiff's supervisor, that a report of the OHP did not take the
plaintiff's collision injuries into account and pertained
to his
condition after the heart surgery. By that time and on 6
August 2012 he had applied for leave and thereafter
absconded (on the
evidence, this may be putting it too strongly). In February
2013 he was asked to come back to work
but because of the hip pain he
could not cope to do work as a bus driver and opted to resign.
The city accommodated him by
back dating his resignation by six
months to 6 August 2012 because of the huge debt he owed them."
I already pointed out that Dr Birrell declared that the appellant was
100% unfit, because of the
sequelae
of the injuries sustained,
to work as a bus driver and that this condition was permanent.
• The learned Judge, correctly, found, based on the undisputed
expert evidence, that the appellant was not suitable anymore
to work
as a bus driver or a spray painter "or to any physically
demanding work due to the accident".
• In this regard, it is useful to revisit the remarks of Dr
Birrell that -
"... I remain with my view that the patient has sustained a
serious injury as a result of the accident, ie he qualifies
under the
Narrative Test as a serious injury. Whilst he only reaches 11%
because of his acetabular fracture and his soft
tissue injury to the
lumbar spine, noting that 90%, at least, of pelvic fractured patients
have concomitant lumbar symptoms, this
right acetabular injury still
represents a serious problem for this patient. He has
considerable loss of movement in the
right hip. The fact that
his right hip has diminished movement and pain means he can no longer
work as a bus driver and this
also hinders his work to some extent,
as I will discuss shortly, relating to his panel-beating business."
[44] I
have already pointed out that the plaintiff worked for the City
Council of Tshwane as a bus driver for about thirteen years
before
his resignation following the accident and he also worked for the
Johannesburg metro bus company as a bus driver for about
fifteen
years between April 1989 and April 1995. (I mentioned earlier
that the dates may be wrong.) When the collision
occurred, when
he was about 43 years old, he had, therefore, worked as a bus driver
for most of his adult life namely a period
of some twenty eight
years. This was obviously his main occupation. It is
common cause that, because of serious
physical impairment, following
the injuries sustained, he can no longer pursue this occupation.
It also appears from the
actuarial calculations that the postulated
loss of earnings due to his inability to continue as a bus driver,
constitutes the bulk
of his claim as actuarially calculated: some
R1,55 million compared to some R493 000,00 in respect of the
predicted future
loss flowing from the inability to work as a
spray-painter.
[45]
Against this background, it seems to me, with respect, that the
learned Judge misdirected herself by finding that the appellant
had
failed to prove a loss of earnings/earning capacity following his
inability to continue working as a bus driver. It seems
to
me, in the words of the learned Chief Justice in
Dippenaar
,
that the capacity which the appellant had to earn money as a bus
driver is now no longer available to him, and this lost capacity,
considered in law to be part of the appellant's estate, must be seen
as a loss diminishing his estate in view of the authorities
quoted.
Moreover,
in the spirit of
Bailey, supra,
there appears to be no reason
to reject the meticulous actuarial calculations establishing the
monetary value of this loss and
details of which I have remarked
upon. I repeat my earlier remarks that the loss, as
calculated, was also properly mitigated,
in my opinion, by reducing
the retirement age to only 55, applying a 20% contingency deduction
to future loss and applying the
40% maximum marginal rate of tax
deduction.
[46]
For these reasons, I have come to the conclusion that the learned
Judge erred in not allowing an award in respect of loss of
earnings
or loss of earning capacity flowing from the truncation of the
appellant's career as a bus driver.
[47] I
turn to the claim for loss of earnings flowing from the appellant's
inability to continue working as a spray-painter:
• It is common cause that the plaintiff worked as a
spray-painter before the collision and that, as a result of the
sequelae
of the injuries sustained, he can no longer work as
such. This was, correctly, held by the learned Judge to be the
case.
• As I indicated earlier, there was insufficient information
available for the forensic auditor to calculate the appellant's
income from the family panel-beating business. The resultant
advice from Ms Noble was to equate the loss to the costs of
employing
a replacement spray-painter. I have dealt fully with this
subject and also with the fact that the actuary made
his calculations
on this basis and reduced the projected costs of such employment of a
replacement by the maximum marginal rate
of tax of 40%. The
best available evidence, in the absence of calculations by a forensic
auditor, which calculations could
not be made through a lack of
information, was employed to obtain a well informed actuarial
calculation. As I indicated
earlier, the technique of
calculating a loss of income by providing for the employment of a
substitute is also well recognised
in our law. Moreover, the
evidence of Ms Noble about the projected salary for an unqualified
artisan at the Paterson B3 level
was also admitted by the respondent
as correct. In the circumstances, I, respectfully,
consider the rejection by the
learned Judge of the proposition by Ms
Noble to conduct the calculation as explained, to be a misdirection.
• The learned Judge also found that there was no evidence that
the appellant earned any income from the panel-beating business
pre-trauma. I consider this to be a misdirection: on the
overwhelming probabilities he must have earned an income from his
panel-beating activities. He told Dr Birrell that he ran
the concomitant panel-beating and spray-painting business while
working as a bus driver. He walked to work, the bus depot being
approximately 2 minutes walk from his home. He
started the
panel-beating and spray-painting business before he was employed as a
bus driver. It must be inherently improbable
that he did not
earn an income from this business. In any event, the loss of
income, as claimed, is not based on previous
income as a panel-beater
but, as explained, on the cost of employing a substitute. The
learned Judge, correctly, also found
that –
"It is common cause that at the moment he is employed and
continues to be employed in the family business. He does no
longer do the spray-painting job because of his injuries but has been
sympathetically accommodated in a flexible
administrative/driver/supervisor
position in a sympathetic work
environment."
The learned Judge emphasised the fact that the appellant told Ms
Noble that he does not receive a fixed salary from the panel-beating
business but he receives 10% of the profits which, at an average,
comes to some R20 000,00 per month. Compared to the
R13 000,00 per month earned as a bus driver, the learned Judge
held that the appellant was now better off than what he was
pre accident so that he failed to prove a claim for loss of
earnings flowing from his inability to continue working as a
panel-beater. I am of the respectful view that this approach
represents a misdirection: there was no evidence to the effect
that
the appellant earned less than R20 000,00 per month from the
panel-beating business while he could still do spray-painting
himself. This also ignores the fact that, in addition, he
earned some R13 000,00 per month as a bus driver. Indeed,
Ms
Noble's research, after consultation with the Tshwane officials,
revealed that he was earning some R15 000,00 per month gross
together
with certain allowances and a 13
th
cheque prior to the
injury.
• In my view, the common cause fact that the appellant was
rendered unfit to continue with his occupation as a spray-painter
as
a result of the injuries sustained in the collision, and rendered
unfit to do so at least until the age of 55, must,
on the
probabilities, represent a loss of earnings or loss of earning
capacity.
Where the best evidence available was employed to prepare a proper
actuarial calculation with reasonable mitigating features, and
where
a method was employed, namely calculating the cost of engaging the
services of a substitute, which is well recognised in
our law, I
consider that the learned Judge misdirected herself by disallowing a
claim for loss of earnings as a spray-painter
in toto
.
• During the proceedings before us, Ms Bezuidenhout, for the
appellant, with some emphasis, invited our attention to what
the
appellant told Ms Noble about his future plans, with particular
reference to the panel-beating business. It is convenient
to
quote from Ms Noble's report:
"... Mr K reported that his wife plans to start a catering
business in June/July 2014 on a part-time basis in the local area
and
he will be assisting her as a driver ('ek gaan haar rondry').
Hy wil 'nie rêrig' dit doen tot aftrede. 'As al my goete
oraait is gaan ek Katu toe trek. Ek soek daai rustigheid
weer.
'n Klein winkel oopmaak, iets klein. Dat jy verkoop, iemand
betaal en hy is weg.' Hy bedoel hy sal wil
trek as sy kinders
klaar gekwalifiseer is 'dan gaan ek in die Noord Kaap want ek
wil nie rêrig oud word, panel-beating
te doen nie.' Sy
huidige werk is groot en veeleisend."
Against this background, it appears that there is a realistic
possibility (I cannot put it stronger than that, because of
the
inevitable degree of speculation involved) that the appellant will
terminate his involvement with the panel-beating business
in the
foreseeable future, and perhaps well before he reaches the age of 55,
some seven years from now. The shop he plans
to open in Katu
does not appear to have the remotest connection with panel-beating
activities. On that scenario, it
may happen that the
employment of a replacement panel beater, provided for by
Actuary Whittaker, and Ms Noble, will never
become a reality.
Bearing in mind that Ms Noble's report is dated 3 April 2014, no
evidence was presented as to whether or not the appellant's wife's
planned catering business due to start in June/July 2014, ever became
a reality. On the other hand, provision must be made
for the
contingency that it may become a reality (if this has not
happened yet) in which event there may also be a scaling
down of the
appellant's panel beating activities.
Where Mr Whittaker's calculation date already goes back to 1 July
2014, it seems to me to be reasonable to reduce the projected
loss of
income from the panel beating business as follows:
in respect of the past loss a reduction by 50%; and
in respect of the future loss a reduction by 70%.
According to my calculations, these awards should be reduced as
follows because of the greater contingency deduction:
past loss to R47,498 (from the existing R86,359); and
in respect of the future loss, R146,539 (reduced from the present
amount of R407,053).
In the result, the award, reduced from Actuary Whittaker's
tabulation, should be as follows:
net past loss (bus driver)
R330,133
net past loss (auto business)
R47,498
net future loss (bus driver)
R1,226,088
net future loss (auto business)
R146,539
Total net loss
R1,750,258
• In all the circumstances, it seems to me that it would not be
inappropriate to allow the claim for loss of earnings as calculated
by the actuary, but reduced by increasing the percentage deduction
for contingencies in respect of the panel-beating pursuits.
Conclusion
[48]
In the result, I have come to the conclusion that the appeal ought to
be upheld and an award falls to be made along the lines
as calculated
by the actuary, subject to the reductions applied in regard to the
spray-painter income.
Costs
[49]
There appears to be no reason why the costs should not follow the
result.
The
order
[50]
The rather lengthy order which follows, is based on a draft submitted
by the appellant's counsel during the trial containing
the relevant
provisions generally found in orders of this nature. I decided
to omit a few small items which I consider to
be in the province of
the taxing master and I do not wish to usurp the functions of that
official.
[51] I
make the following order:
1. The appeal is upheld with costs.
2. The order of the learned Judge
a quo
is set aside and
replaced with what follows hereunder:
2.1 The defendant is ordered to pay the sum of R1,750,258 to the
plaintiff's attorneys, Adams & Adams, in settlement of the
plaintiff's claim for past and future loss of earnings, which amount
shall be payable by direct transfer into their trust account,
details
of which are as follows:
Nedbank
Account no: […]
Branch no: 198765
Pretoria
Reference: NK/KR/P333
2.2 The capital amount referred to in 2.1 above will not bear
interest unless the defendant fails to effect payment thereof within
fourteen calendar days of the date of this order, in which event the
capital amount will bear interest at the rate of 10.25% per
annum (or
the applicable
mora
rate) calculated from and including the
15
th
calendar day after the date of this order to and
including the date of payment thereof.
2.3 The defendant must make payment of the plaintiff's taxed or
agreed party and party costs on the High Court scale which costs
shall include the following:
2.3.1 all the fees of senior/junior counsel, inclusive of:
2.3.1.1 his full day fees for 18 and 19 August 2014;
2.3.1.2 his fees for preparation of heads of argument and preparing a
reply to the defendant's heads of argument, as directed by
the Court;
2.3.2 the reasonable taxable preparation and reservation fees, if
any, of the following experts of whom notice had been given,
being:
2.3.2.1 Dr Birrell (orthopaedic surgeon);
2.3.2.2 Dr Truter (clinical psychologist);
2.3.2.3 Dr Botha (specialist physician);
2.3.2.4 Ms Heyns (occupational therapist);
2.3.2.5 Ms E Noble (industrial psychologist);
2.3.2.6 Dr Van Heerden (urologist);
2.3.2.7 Mr G Whittaker (actuary).
There shall be no duplication of any costs already allowed in the
order of 3 June 2014.
2.3.3 The above costs will also be paid into the aforementioned trust
account.
2.4 The following provisions will apply with regard to the
determination of the aforementioned taxed or agreed costs:
2.4.1 the plaintiff's attorney shall serve the notice of taxation on
the defendant's attorney of record;
2.4.2 the plaintiff shall allow the defendant 7 (seven) court days to
make payment of the taxed costs from date of settlement or
taxation
thereof;
2.4.3 should payment not be effected timeously, the plaintiff will be
entitled to recover interest at the rate of 10.25% (alternatively
the
applicable
mora
rate) on the taxed or agreed costs from date
of
allocatur
to date of final payment.
W R C PRINSLOO
JUDGE OF THE GAUTENG DIVISION, PRETORIA
I
agree
H J FABRICIUS
JUDGE OF THE GAUTENG DIVISION, PRETORIA
I
agree
N V KHUMALO
JUDGE OF THE GAUTENG DIVISION, PRETORIA
HEARD
ON: 15 JUNE 2016
FOR
THE APPELLANT: J F GROBLER
INSTRUCTED
BY: ADAMS & ADAMS
FOR
THE RESPONDENT: Ms F BEZUIDENHOUT
INSTRUCTED
BY: MATHIPANE TSEBANE ATTORNEYS