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[2015] ZAGPPHC 625
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I.M obo K.M v Road Accident Fund (66472/13) [2015] ZAGPPHC 625 (21 August 2015)
SAFLII
Note:
Certain
personal/private details of parties or witnesses have been
redacted from this document in compliance with the law
and
SAFLII
Policy
OFFICE
OF THE CHIEF JUSTICE
REPUBLIC
OF SOUTH AFRICA
IN THE HIGH COURT OF
SOUTH AFRICA
(
GAUTENG DIVISION,
PRETORIA)
CASE NO: 66472/13
IN THE
MATTER BETWEEN
I.
M. obo K. M.
Plaintiff
and
THE
ROAD ACCIDENT FUND
Defendant
JUDGMENT
LEGODI
J
[1]
Before me is an action against the Road Accident Fund instituted by
Mrs I. M. in her personal capacity as a biological mother
of one K.
M. a minor child who was injured in a motor vehicle collision which
occurred on the 9 August 2011.
[2]
When this matter was laid before me on 29 July 2015 parties indicated
that merits, general damages and past medical expenses
in the amount
of R27 724.50 and R800 000 respectively have been settled.
What remained to be determined was the
amount payable for loss of
earning or earning capacity. For this purpose, I was informed
that submissions would be made based
on the reports procured on
behalf of the plaintiff.
[3]
Three scenarios have been postulated by GRS Actuarial Consulting as
follows:
Scenario
1
Scenario
2
Scenario
3
Income
if accident did not occur
Less
contingency deduction
3’409’524
511’429
2’898’095
3’409’524
511’429
2’898’095
3’409’524
511’429
2’898’095
Income
given accident did occur
Less
contingency deduction
-
-
-
2’053’708
1’642’966
410’742
534’984
427’987
106’997
Loss
of Income
2’898’095
2’487’353
2’797’098
[4]
The defendant wanted to rely on scenario 2, but, in doing so, argued
that less contingency deductions of about 30% must be applied
and not
80% contingency deductions. Using scenario 2, the amount
suggested or proposed by counsel on behalf of the defendant
came to
R1 460 55.60.
[5]
On the other hand, counsel for the plaintiff felt that in the
circumstances of the case, an average contingency deduction to
the
three scenarios, would be appropriate and for this, an amount of
R2 487 353.00 was proposed which was subject to
confirmation by an actuary.
[6]
On 29 July 2015 after the matter was argued, I directed the parties
to submit their proposed calculations to the actuary for
confirmation
of the correctness thereof. I further requested the parties to
file written heads of argument. That has
been done and the
other calculations by the actuary are at hand.
[7]
The difficulty in dealing with contingency deductions and percentages
that must be applied thereto is that, is based on uncertainty
and
speculation as to what might happen or may not happen. It is
not an easy exercise. Courts rely mostly on expert
reports to
come to an informed decision.
[8]
Starting with the scenario 2, industrial psychologist Cornel J
Schoombie, dealing with neuro-psychological perspective of the
injured, inter alia, stated:
“
It
is quite clear, that K. is not to regain at her pre-accident level of
potential and will not achieve the per-accident educational
levels.
She requires remedial educational therapies, speech / language
therapy, occupational therapy, and psychological therapy
/ counseling
all of which are viewed to be supportive in terms of further
scholastic and occupational functioning.
Such
lower functioning resulting in lower educational achievement will
have direct and significant impact on K.’s career prospects.
A person who has completed a sub-standard matric (with a lot of
remedial support) can theoretically enter the labour market at
Paterson level A3 (lower quartile), with maximum level approximately
at B3/B4 (median, basic). However, qualitative impact
by means
of deficient cognitive, psychological and behavioural aspects are
very likely going to serve as barriers for Client.
Should the
remedial support fall away, she is likely going to experience
significant problems to sustain work performance. Specific
work
environments are indicated for K., i.e. routine, support and
supervision as well as sympathetic employer. Ongoing
psychological
support is recommended by Dr Van der Ryst. Should
this scenario be considered, appropriate (substantially) higher
contingency
deductions are required”.
[9]
What is stated above is also supported by the educational
psychologist, Dr M vd Ryst, who in her report, of relevance, stated:
“
Formal
academic testing revealed that her academic skills are far below the
level expected for a learner of her age-and educational
background.
Her English scholastic skills comprising, reading and writing have
not yet been mastered age-appropriately.
Without remedial
support it is unlikely that she will cope with the higher academic
demands of the intermediate and senior phase
eg Grade 4 to 7.
She requires remedial support, occupational therapy as well as speech
and language therapy. Available
school records confirmed that
she will struggle once the cognitive demands and the workload at
school increased. She loses
her books and assignments.
She experiences learning problems and she fails to complete her
assignments. The identified
neuropsychological/cognitive
deficits probably would have comprised her progress at school, but
due to the supportive nature of
the foundation phase, it has not
impacted significantly on her overall performance level.
However, it is expected that the
impact of the identified
difficulties will become more noticeable in the higher grades eg
intermediate phase. Testing showed
a discrepancy between her
measured intelligence and her achievement levels in academic tests;
which confirms the need for supportive
therapies to enable her to
optimize her potential”
[10]
Further the industrial psychologist in the report relevant to
scenario 2, stated:
“
A
factor that should not be underestimated involves a
neuro-psychological component, specifically behavioral and social in
nature.
Should K.’s impulsiveness not be contained or
controlled, she is likely to be disinhibited, which may pose
behavioral challenges
within social settings. She may act
impulsively, and therefore do or say the wrong things within the
wrong situation and
in the wrong manner. She is likely to be
ineffective regarding social integration, which may have a direct
impact on her
interpersonal relationships at work as well. Such
factors, in combination with her neuro-cognitive difficulties as well
as
speech/language problems are likely to contribute towards a higher
risk not to be able to sustain employment. Should she lose
jobs
for this type of reasons, prospective employers may rather quickly be
deterred to employ her noting the negative work record.
Should
K. move around (“job-hopping) within a relative short period of
time, prospective employers will rather not invest
in her in terms of
employment. She will therefore become less competitive over a
period of time, and may in fact have a probability
to remain
unemployed regarding formal corporate environments”.
[11]
The conclusions by both the educational and industrial psychologists
are based on a number of reports, in particular, the report
by Rita
Du Plessis, counseling Psychologist, whose report is also based on
other medical reports, for example, medico-legal report
by Dr JJ Du
Plessis, a neurosurgeon.
[12]
Accepting that the opinions expressed in the reports by experts on
behalf of the plaintiff, are correct, then one moves from
the premise
that, in consideration of scenario 2, ‘appropriate
(substantially) higher contingency deductions are required’.
However, the 80% general contingency deductions and the amount of
R2 487 353.00 regarding scenario 2 seems to have been
prompted by the instruction to the GRS Actuarial Consulting.
This appears from paragraph 1.3 of the actuarial report in which
is
stated:
“
1.3
General contingency deductions:
I
was instructed to apply the following general contingency deduction
:
Future
Income
Had
the accident not occurred
15%
Having
regard to the accident
80%
[13]
The calculations as per the three scenarios must therefore be seen in
that context. Both parties seem to have accepted
that the
plaintiff’s loss must be based on scenario 2. That is, a
person who has completed a sub-standard matric, but
who requires a
lot of remedial support which includes, routine work, support and
supervision as well as a sympathetic employer.
[14]
The contention for the higher substantial contingency deductions, is
that, should the remedial support fall away, the injured
is likely to
experience significant problems to sustain work performance, seen in
the context of qualitative impact by means of
deficient cognitive,
psychological and behavioral aspects already articulated by other
experts is very likely to serve as barriers
for the injured.
Accepting all of the above, the issue now is whether the 30% general
contingency deductions as suggested
on behalf of the defendant or
average contingency deductions as suggested on behalf of the
plaintiff is appropriate.
[15]
The proposals by both parties have been subjected to calculations or
comment by the actuary. On behalf of the plaintiff,
it was
contended that having applied a 20% contingency deduction on the
pre-morbid scenario with a 80% contingency deduction on
the
post-morbid scenario, the average of the three scenarios should be
taken as the total loss of income of the minor child, which
total
loss is calculated as R2 555 093.53
[16]
The calculation is said to be founded on
inter
alia
the following set of facts:
16.1
That the minor child sustained a focal brain injury in the right
frontal lobe of her brain;
16.2
That the minor child presents with various neurocognitive,
neuro-psychological and psychiatric difficulties
as well as speech
and language difficulties.
16.3
That the minor child would require on-going support and supervision
and will need to work in a sympathetic
environment, regardless of the
benefit of practical or skills training; and
16.4
That as a result of the minor child’s cognitive difficulties,
she will remain to face barriers
and that this would impact on the
quality of education she might obtain and also impact negatively on
her work performance in the
open labour market.
[17]
The average calculation based on the 80% general contingency
deductions and the calculations using scenario 2, but based on
30%
deductions, is R2 55 039 and R1 460 499 respectively.
These are as per actuary calculations dated the
29 July 2015.
[18]
I think it would be wrong to deal with this matter as if the proposed
general contingency deduction of 80% is a foregone conclusion.
The 80% did not come from the actuary or from any of the experts.
It was rather an instruction given to the actuary by the
plaintiff’s
attorneys. High or substantial general contingency deduction
would not necessarily be 80%.
[19]
As argued by counsel on behalf of the defendant, the normal
contingency deductions for post-morbid is between 15% and 20% and
that therefore 30% deductions will be substantially higher.
Whilst I do not agree with the 80% deduction, I cannot agree
with 30%
deduction either as suggested by counsel on behalf of the defendant.
The injuries sustained and the risk at hand,
justify a higher
contingency deduction than 30%.
[20]
55% based on scenario 2 in the circumstances of the case would be
reasonable. At the present moment, there is no indication
that
the changes are that the minor child will not fit within scenario 2.
She is presently receiving a special care and the
necessary support.
The fear of falling away of the support in the working environment as
intimated in the reports by the
industrial and educational
psychologists in my view, does not justify the 80% contingency
deductions. 55% general contingency
deduction in my view, is
substantially higher to cater for the risk or uncertainties.
[21]
It is common cause that before any deduction is made, the estimated
value of the income, if the accident did not occur is R3 409 524
and R2 053 708 post the accident. Applying the 55%
general contingency deductions, this will bring the loss of
earning
or earning capacity to R1 973 926.00
[22]
A draft order has been prepared for the convenience of the court
which draft will now include the amount of R1 973 926.00,
trust deed and an undertaking in terms of section 17(4)(a) of the
Act.
[23]
Consequently a draft order marked X is hereby made an order of the
court.
M
F LEGODI
JUDGE
OF THE HIGH COURT
FOR
THE PLAINTIFF:
ADV M VAN ANTWERPEN
INSTRUCTED
BY:
ERASMUS SCHEEPERS ATTORNEYS
172
Bronkhorst Street
Nieuw
Muckleneuk
PRETORIA
Ref:
F Scheepers/sj/M1626/12
Tel:
012 460 0396
FOR
THE DEFENDANT:
ADV.
M R NEMUTANDANI
INSTRUCTED
BY:
SEKATI MONYANE INC.
935
Jan Shoba Street
Brooklyn,
PRETORIA
Ref:
Mogal/ME/RC1490
Tel:
012 460 9710