Brief Summary

Tort — Road Accident Fund — Claim for damages — Plaintiff sustained severe injuries in a motor vehicle accident while crossing the road — Defendant admitted full liability for damages — Agreement reached on general damages and future medical expenses — Remaining issues pertained to past and future loss of earnings — Court to determine quantum based on admitted facts and expert evidence — Plaintiff's cognitive and functional impairments established as a result of the accident, impacting earning capacity.

Comprehensive Summary

Summary of Judgment

Introduction

This was a quantum determination in a delictual damages claim brought against the Road Accident Fund arising from a motor vehicle accident in which the injured person, Mr Hezekiel Sibusiso Phasha, was struck as a pedestrian. The plaintiff, Van Antwerpen N.O., acted in the capacity of curator ad litem on behalf of Mr Phasha.

The matter came before the North Gauteng High Court, Pretoria (Teffo J). By the time of trial, the parties had reached agreement on merits and on several heads of damages. The defendant admitted 100% liability for the plaintiff’s proven or agreed damages. Past medical expenses were abandoned as not provable, future medical expenses were resolved by a statutory undertaking, and general damages were settled in a fixed amount. The only remaining dispute was the appropriate award for past and future loss of earnings / loss of earning capacity.

Procedurally, the parties did not lead viva voce evidence. They agreed to present the dispute as a stated case on the basis of admitted facts, expert medico-legal reports, and actuarial calculations admitted by consent. The judgment therefore turned on the court’s evaluation of the expert material and the appropriate approach to contingencies in quantifying diminished earning capacity.

Material Facts

On 14 September 2008, Mr Phasha (born 29 May 1981) was involved in a collision at or near Haig Street, Witbank. He was a pedestrian crossing the road at a four-way stop intersection after alighting from a taxi. He saw an approaching vehicle, continued to cross because he considered that he had the right of way, felt an impact, and thereafter had no recollection of events until later. It was reported to him that the insured vehicle accelerated, failed to stop, and struck him. He was transported to Witbank Hospital and discharged on 25 September 2008.

It was common cause that after hospital discharge Mr Phasha fatigued easily, slept a lot, and for about two weeks used crutches and required assistance with walking.

The injuries relied upon by the court were principally a severe traumatic brain injury, described by the neurosurgeon as a severe diffuse axonal injury with permanent neurocognitive and neuropsychiatric sequelae. The record also reflected CT evidence of intracerebral haemorrhages and contusions, and soft tissue injuries to the neck and lumbar spine. The expert consensus accepted by the court was that no significant improvement could be expected in future and that Mr Phasha’s emotional, behavioural, and cognitive difficulties were substantial.

In relation to pre-accident circumstances relevant to earnings capacity, the court relied on evidence that Mr Phasha had completed Grade 12, had N1, and at the time of the accident was studying N3 (Diesel Mechanic). The court further relied on the occupational therapist’s account of a fragmented and unstable educational history, including an incomplete diploma attempt in Human Resources Management (2001–2003), periods of unemployment at home (2004–2005), later vocational attempts, and difficulty progressing consistently through courses. The court emphasised that there was no documentary proof of tertiary achievements beyond registration proof, and that some assertions in the reports about grades passed and N2 completion were not supported when the reports were compared.

On the post-accident position, the court accepted the expert evidence that Mr Phasha was unemployable in the open labour market due primarily to the cognitive and behavioural sequelae of the brain injury. Orthopaedically, he could perform physical work of a light to medium nature, but the brain injury was treated as determinative of employability.

As to disputed versus undisputed aspects, employability post-accident was effectively common cause at the level of the parties’ submissions: the defendant accepted the plaintiff’s expert evidence that Mr Phasha was unemployable. The key dispute concerned the correct pre-morbid career and earnings scenario to use as the comparator for quantification, given uncertainty in educational progression and lack of documentary support.

Legal Issues

The central legal question was the appropriate assessment of damages for past and future loss of earnings / diminished earning capacity, given that liability was conceded and other heads of damages were settled or resolved.

The dispute primarily involved the application of law to fact and an evaluative assessment rather than a pure question of law. The court had to determine, on the basis of expert opinion and admitted facts, what Mr Phasha would probably have earned but for the accident, what he would earn after the accident (accepted as effectively nil in open labour market employment), and what contingencies should be applied to reflect uncertainties and vicissitudes of life.

A further practical issue within the quantification exercise was whether the plaintiff had established a sufficiently reliable factual foundation for the more optimistic pre-accident career path (including the likelihood of completing artisan training), or whether a more conservative scenario should be preferred due to instability, lack of documentary proof, and the absence of an educational psychologist report addressing likely educational progression.

Court’s Reasoning

The court approached the claim as one for diminution in earning capacity, applying the general delictual principle that the defendant must compensate the difference between the plaintiff’s patrimonial position after the delict and what it would have been without the delict, and recognising that earning capacity forms part of a person’s estate.

In assessing quantum, the court adopted the approach that actuarial calculations can assist but do not bind the court. The court noted the trial judge’s discretion to award what is considered right, including the ability to apply a contingency discount to account for the vicissitudes of life, and that such a discount is inherently impressionistic and case-specific.

On the factual evaluation of employability, the court accepted the expert consensus that Mr Phasha suffered a severe diffuse axonal injury with permanent sequelae and poor prognosis, and that he was rendered unemployable in the open labour market. This finding was supported by the convergence of opinions from the psychiatrist, neuropsychologist/psychologist evidence, and the industrial psychologist’s conclusion that provision should be made for total loss of earnings.

The principal evaluative reasoning concerned the selection between the industrial psychologist’s proposed pre-morbid earnings scenarios. The plaintiff advocated for an average of two scenarios (one involving artisan qualification and progression, and one involving a one-year certificate route). The defendant contended that a more conservative scenario should be used, criticising assumptions in certain expert reports about educational progression and past academic performance.

The court identified and accepted several concerns affecting the reliability of the more optimistic pre-accident scenario. It found that Mr Phasha’s pre-morbid educational history was not stable, that it was not substantiated that he had passed all grades without failure, and that it was incorrect to suggest he had completed N2 pre-accident. The court stressed that no documentary proof of tertiary achievements (beyond registrations) had been produced, and that the industrial psychologist’s projections were partly premised on opinions and assumptions not supported by documents.

The court further accepted the criticism that a clinical psychologist was not competent to provide a specialist opinion on likely educational progression in the way an educational psychologist would be, and considered the absence of such a report significant in circumstances where the pre-accident career path was uncertain and the individual had repeatedly changed courses without completing them. The court treated these uncertainties as materially affecting the “but for” earnings path, and therefore the appropriate scenario for quantification.

Having weighed the expert reports and these uncertainties, the court concluded that Scenario 2 (the more conservative pre-morbid career scenario) was the better basis to compensate the plaintiff for loss of earnings. The court then exercised its discretion on contingencies, allowing a relatively modest contingency deduction for past loss and a substantial deduction for future loss to reflect the significant uncertainty surrounding the pre-accident career trajectory and the vicissitudes applicable to that hypothetical path.

Applying those contingency deductions to the actuarial figures admitted, the court calculated the awards for past and future loss, and then combined those with the agreed general damages and the statutory undertaking for future medical and related expenses.

Outcome and Relief

The court granted judgment for the plaintiff and ordered the defendant to pay R2 815 863,50 in full and final settlement of the claim, comprising the agreed general damages amount, the assessed past and future loss of earnings/loss of earning capacity, and supported by an undertaking for future medical and related expenses.

The defendant was ordered to pay interest on the judgment amount at 15,5% per annum, calculated from 14 days after the date of judgment to the date of final payment. Payment was directed to the trust account of the plaintiff’s attorneys, with provision that after deduction of disbursements and attorney-and-client fees, the net amount would be paid to the relevant trust.

The court further ordered the defendant to furnish an undertaking in terms of section 17(4)(a) of the Road Accident Fund Act 56 of 1996 for future accommodation, treatment, services, or goods arising from the injuries, after costs are incurred and on proof thereof. The judgment recorded that the undertaking covered the full costs of a single trustee of the trust, as if that trustee were a curator bonis under the referenced estates/property control legislation.

On costs, the defendant was ordered to pay the plaintiff’s costs of suit, including the costs of senior counsel, the reasonable taxable expert fees (including consultations, preparation, qualifying and reservation fees where applicable), the costs of actuarial calculations, reasonable travel and accommodation-related expenses for medico-legal consultations and court attendance, the costs of the curator ad litem appointment application, and the costs of the curator ad litem. The plaintiff was ordered to give the defendant at least seven days’ written notice of taxation.

The court noted that Mr Phasha was incapable of managing his affairs and appointed Jacobus Frederick De Beer as trustee for the relevant trust to receive and administer the net proceeds.

Cases Cited

Dippenaar v Shield Insurance Co Ltd 1979 (2) SA 904 (A)

Southern Insurance Association v Bailey 1984 (1) All SA 98 (A)

Legislation Cited

Road Accident Fund Act 56 of 1996, section 17(4)(a)

Administration of Estates and/or Property Control Act (as referenced in the judgment in relation to trustee costs under the undertaking)

Rules of Court Cited

No rules of court were cited in the judgment.

Held

The court held that the plaintiff proved that Mr Phasha sustained a severe diffuse axonal brain injury with permanent neurocognitive and neuropsychiatric sequelae, resulting in his being unemployable in the open labour market, and that damages should therefore be assessed on the basis of total loss of earnings post-accident.

For purposes of quantifying the “but for” position, the court held that the evidence established a materially uncertain and unstable pre-morbid educational and career trajectory, with inadequate documentary support for some asserted achievements and with no educational psychologist evidence to substantiate optimistic educational progression. In the exercise of its discretion, the court therefore preferred the industrial psychologist’s Scenario 2 as the appropriate pre-morbid earnings model.

The court held that contingencies of 5% (past loss) and 40% (future loss) were fair and appropriate on the accepted facts and uncertainties, and it granted judgment for payment of R2 815 863,50, together with a section 17(4)(a) undertaking, interest, and costs.

LEGAL PRINCIPLES

Damages for diminished earning capacity are assessed as part of patrimonial loss by comparing the value of the plaintiff’s estate after the delict with the hypothetical value it would have had absent the delict, recognising that earning capacity is an asset capable of forming part of the estate and that impairment of that capacity may constitute compensable loss.

Where actuarial computation is used to quantify loss of earning capacity, the court retains a wide discretion and is not bound by actuarial figures. The court may adjust the award through contingency deductions reflecting vicissitudes of life and uncertainties inherent in predicting future events, including employment prospects and career trajectory.

The selection of a pre-morbid earnings scenario is a factual and evaluative exercise that must be grounded in the evidence accepted by the court. Where pre-accident educational progression and career prospects are uncertain, unstable, or inadequately documented, the court may prefer a more conservative scenario and may apply higher contingencies to reflect that uncertainty.

Van Antwerpen N.O. v Road Accident Fund (19291/2011) [2013] ZAGPPHC 393 (15 November 2013)