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[2016] ZAGPPHC 844
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Kilian NO v Road Accident Fund (34116/2016) [2016] ZAGPPHC 844 (15 September 2016)
SAFLII
Note:
Certain
personal/private details of parties or witnesses have been
redacted from this document in compliance with the law
and
SAFLII
Policy
IN
THE HIGH COURT OF SOUTH AFRICA
(
GAUTENG
DIVISION, PRETORIA)
Case
no. 34116/2016
15/9/2016
Reportable:
Yes
Of
interest to other judges: Yes
Revised.
IN
THE MATTER BETWEEN:
ADV
JOHAN MALHERBE KILIAN
N.O Plaintiff
In
his capacity as curator ad litem to
JANSEN
VAN RENSBURG
: ANDRE ABRAHAM PETRUS LE GRANGE
and
ROAD
ACCIDENT
FUND Defendant
JUDGMENT
LEGODI
J;
HEARD
ON: 7 September 2016
JUDGMENT
HANDED DOWN ON: 15 September 2016
[1]
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 estimate,
which
is often a very rough estimate, of the present value of loss.
It has open to it, two possible approaches: One
is for the
judge to make a round estimate of an amount which seems to him to be
fair and reasonable. That is entirely a matter
of guesswork, a
blind plunge into the unknown. The other is to try 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.
[1]
[2]
It is manifest that either approach involves guesswork to a greater
or lesser extent.
[2]
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.
[3]
[3]
In the 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 was the advantage of an attempt to ascertain the value of what was
lost on a logical basis, whereas the trial Judge’s
“
gut
feeling
”
as to what is fair and reasonable is nothing more than a blind
guess.
[4]
[4]
This case is about damages for loss of earnings capacity placed
before me as a stated case, the question ‘to be decided
being
to determine the patient’s loss of income, with specific regard
to the contingency to be applied within the parameter
of the parties
submissions.’
[5]
A stated case is a formal written statement of the facts in the case,
which is submitted to the court by the parties jointly
so that a
decision may be rendered without a trial. This is what has
happened in the present case, the parties having agreed
to tender no
evidence.
[6]
I must however emphasis that because of the speculative nature of the
enquiry, when parties elect to approach the court on a
stated case
and lump sum of money is claimed, in the present case, R6 653 636.00
from the public coffers, it is incumbent
on the parties to place
before the court sufficient evidence in the form of admissions and
other admitted information, that will
enable the court, to give fair
and reasonable estimate, rough as it might be of the present and or
future loss.
[7]
The extent of the contingency deductions, as is what this court is
been called upon to determine, has to be determined on guesswork,
and
blindly plunge into the unknown, more so if parties elected to tender
no evidence. The nature of the enquiry is mathematical
calculation which ideally must be based on assumption resting on
evidence that is helpful to the court.
[8]
A young boy who was born on 18 February1997 and named Andre Abraham
Petrus Le Grange Jansen van Rensburg and who is represented
in these
proceedings by Advocate Johan Malherbe Killian NO who is acting in
his capacity as curator ad litem, was involved in a
motor vehicle
accident on 28 April 2011 at the T-junction between Esterhuizen
Street and R546 road between Standerton and Evander.
He was at the
time, a passenger in a motor vehicle bearing registration letters and
number […] FS, which collided with another
vehicle.
[9]
As a result of the collision, he suffered serious head injuries and
had collapsed left long, which resulted in a post-traumatic
organic
brain syndrome and chronic headaches, the residual neurological
sequelae of his brain, which is said to have stabilised
and became
permanent. His injuries are also said to have resulted in
vertigo, photosensitivity, a disfiguring tracheostomy
scar, and
depression and that the sequelae of his injuries have resulted in
permanent losses of learning capacity, employment capacity,
amenties,
independency and enjoyment of life.
[10]
The effects of these injuries as set out above, are reflected in
joint minutes by neurologists Drs AB Maswi and HJ Edeling.
In
paragraphs 4,5 6 and 7 of the stated case, the following are
recorded:
“
4. As a result
of the accident, the patient did not complete school and is
unemployed.
5. But for the
accident the patient would have completed his grade 12 in 2014,
thereafter the patient would have studied further
and obtained a
qualification as an engineer to wit a BTech degree in 2018.
6. After having
obtained a degree, the patient would have earned R6500.00 per month
from January 2019 to September 2019. From 1
October 2019 the patient
would have progressed to the lower quarter of Patterson B4 earning
R206 000.00 per annum. At
age 42.5 the patient would have
reached his career plateau earning R701 500.00 per annum
(straight line increase having been
implied).
7. Thereafter the
Patient would have received inflationary increases until retirement
at age 65.”
[11]
To the stated case document, an actuarial report by Algorithm is
attached. Basic II of the report deals with calculation
based
on the attainment of BTech degree. What is quoted in paragraph 10
above is distilled from the aforesaid paragraph 4.1 of
the report
which deals with general contingency and of relevance, is stated:
“
It is general
practice to adjust the result of the computation of loss of income
with general contingency deductions. The
deductions for general
contingency deductions typically make allowance for items such as:
(1)
Loss
of earnings due to illness;
(2)
Saving in relation to travel to and from work;
(3)
Risk
of future retrenchment and resultant unemployment.
We have been
instructed to make the following deductions for general
contingencies.”
[12]
Algorithm Consultants and Associates were instructed to make 25%
deductions general contingency for future loss regarding uninjured
earnings. Future loss value of income uninjured, is calculated
as R 9 630 797.00 to which 25% in the amount of
R2 407 745.00 is deducted leaving a balance of
R7 223 234.00, less application of the limit and the total
future loss is calculated as R 6 953 636.00.
[13]
It is the extent of the contingency deduction based on value of
income uninjured, which is the subject of a dispute in these
proceedings, the allegation on behalf of the injured being that 20%
deductions (uninjured) should apply, whilst on behalf of the
defendant is contended that 50% contingency deductions should apply.
Loss
of earnings due to illness.
[14]
As indicated in the quotation in paragraph 11 of this judgment, in
making allowance for general contingency deductions, a number
of
factors must be taken into account. One of these factors is
‘loss of earnings due to illness’. In the
course of
the oral submissions, Counsel for the plaintiff avoided any attempt
to bring to the attention of this court, any medical
and or other
expert reports.
[15]
What this court was provided with is a document: ‘Pre-Trial
Minutes”, which contains pre-trial minutes of 12 June
2014, 18
September 2015 and 5 July 2016, joint minutes of neuro-surgeons,
occupational therapists industrial and educational psychologists.
In paragraph 1.1 of the neuro-surgeons’ joint minutes, a
statement is made as follows:
“
We have found
no evidence of any pre-existing neuro-logical pathological
conditions
.”
15.1 The statement is
made without giving more details about what is meant by pre-existing
neurological pathological condition as
a disability insofar as it
might be relevant to loss of earnings due to illness, bearing in mind
that the plaintiff for the present
case, relies on admissions made in
a stated case and the only reference made thereto is the actuarial
report.
15.2 In my view, without
the benefit of complete reports by both neuro-surgeons, it would be
difficult to go about the guesswork
exercise. Some information
is required to avoid totally blind plunging into the unknown. In
order to make fair and reasonable
estimate of an amount based on
contingency deductions, one needs to be provided with facts for
making calculations on the basis
of assumptions. For example,
apart from non-existence of neurological pathological condition of
disability, what about genetical
conditions and other conditions
unrelated to the existence of neurological pathological condition or
disability that could have
occasioned “loss of earnings due to
illness.
[16]
One does not to have to leave things for chance in dealing with
litigation especially in the present case where an large sum
of money
in damages is claimed. General contingency deductions at 20% as
it is now claimed by the plaintiff, ought to be
supported by reliable
evidence, speculative as it might be. On 5 September 2016, that
is, during the course of the hearing,
I requested the parties to
obtain actuarial calculations based on 20%, 30%, 40% and 50%
deductions. What the plaintiff is
now claiming comes to a
figure of R7 182 301.00, that is, based on 20% contingency
deductions. This claim should
be seen in the context of what is
cumulatively placed before me, which in my view, lacks the
information necessary to make factual
assumptions, loss of earnings
capacity due to illness, being one of the assumptions to support 20%
or 25% contingency deductions.
I now turn to the other factor
to be considered.
Savings
in relation to travel to and from work.
[17]
Information around this aspect is also scanty and unhelpful. It is
not clear what factors are to be considered regarding deductions
which ‘typically make allowance for items such as, ‘savings
in relation to travel to and from work’, identified
in
paragraph 4.1 of the actuarial report as item (2) and quoted in
paragraph 11 above.
[18]
In my view, a short-cut was taken in seeking to conclude on this
matter. Resorting to stated case, and thus excused every
possible witness, was a risk which the plaintiff should have
contemplated. For example, where the injured could possibly
have worked had it not have been for the accident and what would have
been the nature of travel to and from work should have been
explained
or investigated. Inasmuch as the loss of work capacity is based on
uncertainties, assumptions and guesswork, every reasonable
and fair
eventuality ought to be investigated based on the material or
information available.
[19]
The 25 % contingency deductions applied by the actuaries was not of
their own accord. They were instructed by the plaintiff’s
attorneys to work on 25% contingency deductions. That being so,
their mandate was to do simple mathematical calculations,
without
regard to factual assumptions based on evidence. It is not
quite clear why would the plaintiff now want to argue
the loss of
earnings to be quantified on a 20% contingency deductions. I am
however not satisfied that the plaintiff has
placed sufficient
evidence or material to justify either 25% or 20% contingency
deductions based on consideration of “savings
in relation to
travel to and from work.” I now turn to the last factor
to be considered as postulated by the actuaries
on behalf of the
plaintiff in their report.
Risk
of factual retrenchment and resultant unemployment.
[20]
Perhaps, it does not start with retrenchment and then the resultant
unemployment as this gives the impression that every person
who has
completed a BTech degree will find employment. The rate of
employment is shocking in South Africa especially with
regard to the
young qualified generation. This aspect is not dealt with in a
more comprehensive manner in the joint minutes
of the industrial
psychologists. In paragraph 3 of their joint minutes they state
of relevance, as follows:
“
Andre would
probably have taken six months to a year to secure full time
employment after three years of full-time studies
.
During this period of time he would have functioned in contract
positive earnings within the basic salary of the A1 on the
Paterson
derived grading scale. Andre would then have entered the open
labour marked in a position within the Patterson C3/C$
levels.
For the purposes of quantification Andre’ would have progressed
in a straight line reaching the C3/C4 levels
by the age of 40 to 45
years. This would have been his ceiling until retirement.”
(My emphasis).
[21]
It is not clear where and in which country the injured would possibly
have worked, had it not have been for the accident and
what are the
possibilities of remaining unemployed for a longer period or not
employed at all.
[22]
Employment for the young generation in this county is a worrying
factor. The difficulty in the present case is that,
because of
the short-cut taken by the parties, no facts were placed before this
court to show the demand or otherwise of those
who have completed or
are still to complete BTech degree. It is said, the injured
would have been an engineer with BTech
degree had it not have been
for the accident. Engineer in what, is a factor that should
have been revealed insofar as it
might have been relevant to
assessing the probabilities of employment or remaining unemployed
upon completion of a BTech degree
in 2018.
[23]
That being so, the plaintiff is, in my view, to be blamed for not
providing sufficient information regarding what the actuaries
refer
to as one of the items in paragraph 4.1 of their report and quoted in
paragraph 11 of this judgment. The admitted earnings
of R 6
500.00 from January to September 2019, R206 000.00 per annum
from 1 October 2019, and progression to the lower quartile
of
Patterson B4, and reaching career plateau earnings of R701 500,00
per annum and straight line increases having been applied
at the age
of 42,5, are all speculations which require more than just admissions
contained in a stated case document. Twenty percent
contingency
deductions to be applied as a general contingency deductions, has to
be based on some information favourable to the
conclusion. The
plaintiff has failed to provide evidence or material in this regard.
[24]
Similarly, the defendant has not been helpful in the contention that
50% contingency deductions have to be applied. For
this
consideration, I was urged to have regard to the fact that the
injured was 14 years old at the time of the accident, he was
still
attending school doing grade 9, that he managed to proceed to grade
10 but never succeeded to go further in his studies due
to the
injuries, and that he sustained serious injuries which render him
completely unemployment in the future. All of this,
are
admitted facts and in my view, their motivation for the contingency
deductions of 50% without more, plunges one into the unknown
with
both eyes covered.
[25]
I was however referred to some literatures on general contingency and
in particular dealing with “the unemployed victim”
wherein the following is stated:
“
The actuarial
calculations will usually be based on the earnings in the last known
occupation. Deductions can be as high as
50% (see AA Mutaul v
Magula
1978 (1) SA 805(A)
, but 35%, and even less can be justified
depending on employment history and occupation. In Gwatula v
RAF 2013 (SGH unreported
25.9.2013 case 41896\2009) 30% was
deducted
.”
[5]
[26]
In the same book cited in footnote 5, Robert Koch dealing with
“General Contingency” states:
“…
The
deduction is the prerogative of the court. However, most
matters do not go to court, so, the relevant deductions become
a
matter for negotiations. Even when matters do go to court
,
some judges seek advice from the expert witnesses as regards the
appropriate deduction to make. General contingencies cover
a
wide range of consideration
which vary from case to case
and may include: taxation, early death, saved travel costs,
loss of employment, promotion prospects, divorce ect
.
There are no fixed rules as regards general contingencies…”
[27]
Determination of contingency deductions should never be allowed to be
used as chess-board because of its uncertainties, assumptions
and
guesswork. Anything to this effect will amount to an
abuse. Moving from 25% contingency deductions to 20%
and
pulling out a red card for deductions based on 50% contingency, is
almost like moving from one spot to another on a chess-board
without
more information, and this has to be discouraged especially when an
attempt is made to lay down fixed rules by way of stated
cases as is
the case in the present proceedings.
[28]
This court was confined to the stated case and joint minutes of
experts as outlined in paragraph 15 of this judgment, thus
making it
difficult for this court to cover a wide range considerations, which
as we know vary from case to case. It was
concerning for this
court to hear a submission by counsel on behalf of the plaintiff
stating that reports should not be made
available to the court as
there are disagreements in the reports and that witnesses have been
excused due to the signing of
stated case document.
[29]
Having considered all the facts placed before me I am of the view
that 35% contingency deductions should be appropriate which
amount is
computed by the actuary as being the sum of R6 260 136.00 on Basis
II.
[30]
Consequently a judgment is hereby granted in the sum of R 6 260
136.00 including terms of the order hereto marked “A”
__________________________
M
F LEGODI
JUDGE
OF THE HIGH COURT
For
the Plaintiffs: Adv
JJ Combrink
Instructed
by:
Erasmus De Klerk Incorporated
For
the Defendants Adv F Matika
Instructed
by:
Mothle Jooma Sabdia Inc
[1]
Southern Insurance Association LTD v Bailey NO
1984 (1) SA 98
(A) at
113 G-I
[2]
Southern Insurance Association LTD supra at 114
[3]
Anthony and Another v Cape Town Municipality
1967 (4) SA 445
A at
451 B-C
[4]
Goldie v City Council of Johannesburg
1948 (2) SA 913
(W) at 920;
Southern Insurance Association LTD supra at 114
[5]
Robert Koch, the Quntum Gearbook 2016 at 124