Summary of Judgment

Introduction

The matter concerned a dependants’ claim for loss of support instituted against the Road Accident Fund following the death of the plaintiff’s husband in a motor vehicle collision. The plaintiff, H.B.A, sued in her capacity as the mother and guardian of three minor children who were dependants of the deceased during his lifetime.

The proceedings were heard in the KwaZulu-Natal High Court, Durban Local Division, under case number 6070/2013, with judgment delivered by Jeffrey AJ on 26 May 2015 (heard on 13 May 2015). By the commencement of trial, the parties had reached agreement on merits/liability, namely that the defendant would compensate the plaintiff for proven loss of support. The litigation therefore proceeded solely on quantum, and more particularly on certain disputed actuarial assumptions requiring determination before the actuary could finalise the quantification.

The general subject-matter of the dispute was the quantification of damages for loss of support arising from the death of the deceased breadwinner, including the determination of the deceased’s actual earnings at death, the probable duration of support for the children, the allocation of income for support, and the contingencies applicable to past and future loss calculations.

Material Facts

It was undisputed that the plaintiff’s late husband, Mr S[…] A[…] A[…] (born in 1972), died on 28 May 2010 in a motor vehicle collision in Durban while he was a passenger in a motor vehicle. It was also common cause that the plaintiff and the deceased had three minor children who had been dependants of the deceased, namely U[…] A[…] (born 1999) and twin daughters J[…] A[…] and J[…] A[…] (born 2005). The defendant’s liability to compensate the plaintiff for the children’s proven loss of support was agreed.

For purposes of quantification, certain assumptions were treated as undisputed, including the children’s dates of birth, the plaintiff’s earnings as at the date of death (R13 250.00 gross per month) and as at May 2015 (R19 000.00 gross per month), and that both the plaintiff’s and the deceased’s monthly incomes would have attracted inflation-adjusted increases.

The disputed factual assumptions concerned the deceased’s actual gross earnings at the date of death, the age up to which the deceased would probably have supported the minor children (18 or 21), the manner in which parents’ earnings would have been applied toward the children, and the contingencies to be applied to past and future loss.

On the deceased’s earnings, the evidence accepted by the court established that the deceased was a partner in S N Recovery Works, a precious metal recovery business in which many transactions and household outgoings were cash-based. Although the business financial statements reflected drawings of approximately R615 per month, the plaintiff conceded that this reflected figure was incorrect and testified that the deceased brought home substantially more in cash, with amounts varying but being around R10 000.00 in January 2010 and about R20 000.00 per month in February, March, and April 2010, with a concession under cross-examination that April 2010 may have been about R12 000.00. The deceased’s business partner, Mr Pranash Udit, corroborated that he and the deceased drew approximately equal amounts and that, by 2010, drawings were in the range of R10 000.00 to R15 000.00 per month, with Mr Udit drawing an average of R15 000.00 per month in 2010. On this body of evidence, the court made a probabilistic finding as to earnings.

On the probable duration of support, the plaintiff’s evidence accepted by the court was that the eldest child was performing well academically and that it was probable she would proceed to tertiary education after completing Grade 12, with the twins also doing well and there being no reason to believe they would not follow a similar educational path. The plaintiff further testified that both parents had intended the children to receive tertiary education. Based on these circumstances, the court made a finding as to the likely duration of support.

On contingencies, it was not challenged that the deceased had been in good health prior to his death and there was no evidence suggesting he would not have remained commercially active until age 65. The court therefore approached contingencies on the basis of the “usual” deductions for past and future income in this context.

Legal Issues

The central questions the court was required to determine were confined to quantum, and specifically to fact-sensitive determinations necessary to instruct an actuary on the computation of damages for loss of support. These questions were whether, on the evidence, the court should find that the deceased earned R15 000.00 per month at death (or some other figure), whether the deceased would probably have supported the children until age 18 or age 21, and what contingencies should fairly be applied to past and future loss.

The dispute primarily concerned findings of fact (or probabilistic factual findings) and the application of settled quantification approaches to those facts. The selection of contingency deductions involved a value judgment as to fairness in the absence of evidence pointing to unusual risks or deviations from typical assumptions.

Court’s Reasoning

In assessing the deceased’s earnings, the court noted that the financial records placed before it did not reflect the true position, given the cash-based nature of the business and household expenditure. The court adopted the approach that, in such circumstances, it must make the best assessment possible on the material presented. The court relied on the plaintiff’s testimony, expressly finding her to be a credible witness whose evidence was given openly and was not shaken under cross-examination. The court further relied on the corroboration provided by Mr Udit regarding the level of drawings taken by the partners in 2010.

On that evidentiary footing, and despite the documented drawings in the financial statements being materially inconsistent with the oral evidence, the court reached a probabilistic conclusion that the deceased probably had an average gross income of R15 000.00 per month as at 28 May 2010, and it made a finding accordingly for actuarial purposes.

In determining the period for which the deceased would likely have supported the children, the court evaluated the evidence relating to the children’s school performance and the parents’ intentions. The court accepted that the eldest child’s strong academic performance made it probable she would pursue tertiary education, and that the twins were similarly progressing well. On that basis, together with the evidence that both parents had intended tertiary education for the children, the court found it probable that the deceased would have contributed to their support until age 21, rather than terminating support at age 18.

In relation to contingencies, the court considered whether there was any basis to depart from standard contingency deductions. It found no evidence suggesting that the deceased would not have remained economically active until age 65, and accepted the unchallenged evidence that he had been in good health prior to death. The court therefore considered it fair to apply the “usual” contingencies, namely 5% on past income and 10% on future income.

Regarding the portion of the deceased’s income allocable to the children’s support, the court recorded the submission that the ordinary 2:1 ratio (two parts for each adult and one part for each child) should be used in determining the share of income directed toward the minor children, and noted that this was properly conceded by the defendant’s counsel. The court then incorporated this allocation into the directions, stating that a 1/7th proportion of the deceased’s gross monthly income would have been allocated to the support of each child.

Finally, the court did not itself fix a lump sum award. Instead, it issued detailed directions to be incorporated by the actuary in calculating past and future loss on the stated assumptions, and then structured a procedural mechanism for the parties to return to court for further directions or a consent order once calculations were complete.

Outcome and Relief

The court made factual findings and issued directions for the actuarial computation of the loss of support. It found that the deceased’s average gross income at death was R15 000.00 per month, that the deceased would probably have supported the children until age 21, and that contingencies of 5% (past) and 10% (future) should be applied. It directed that the deceased’s earnings be assumed to have increased annually in line with inflation, and that the calculation should proceed to the deceased’s notional retirement age of 65.

The action was adjourned sine die, with leave for the parties to approach the court for further actuarial directions if needed, and otherwise to approach the court for a consent order on quantum once the actuarial calculations were finalised. The costs to date were reserved.

Cases Cited

No cases were cited in the judgment.

Legislation Cited

No legislation was cited in the judgment.

Rules of Court Cited

No rules of court were cited in the judgment.

Held

The court held, for purposes of quantifying a dependants’ claim for loss of support against the Road Accident Fund, that the deceased probably earned R15 000.00 gross per month at the date of death and that, given the children’s educational prospects and the parents’ intentions, he would probably have supported the minor children until age 21. The court further held that there was no evidential basis for atypical contingencies and that it was fair to apply the usual deductions of 5% to past loss and 10% to future loss, with inflationary adjustments and a notional retirement age of 65. It directed that a 1/7th share of the deceased’s income be allocated to the support of each child for actuarial calculation, adjourned the matter sine die, and reserved costs.

LEGAL PRINCIPLES

The judgment applied the principle that, in quantifying loss of support, the court must make probabilistic factual findings on disputed assumptions (such as earnings and duration of support) based on the available evidence, particularly where documentary records do not reflect the true financial position due to the practical manner in which income is earned and expenses are paid.

It further applied the principle that the likely duration of support is determined with reference to the dependants’ circumstances and probabilities, including educational prospects and parental intention, and that support may extend beyond majority where the evidence supports a probability of continued dependency, such as through tertiary education.

The judgment also applied the general approach that contingency deductions are a matter of fairness and are commonly applied at standard levels in the absence of evidence justifying deviation, with separate treatment of past and future loss and continued earning capacity assumed up to a notional retirement age where no contrary evidence exists.

Finally, it applied an accepted method of allocating the deceased’s income for household dependency purposes by utilising the conventional 2:1 adult-child apportionment, operationalised in this case as a fixed proportion of the deceased’s income attributable to each child for purposes of actuarial computation.