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[2011] ZAFSHC 161
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Hughes v Road Accident Fund (4002/2009) [2011] ZAFSHC 161 (22 September 2011)
FREE
STATE HIGH COURT, BLOEMFONTEIN
REPUBLIC
OF SOUTH AFRICA
Case No: 4002/2009
In
the matter between:
ANITA
HUGHES
…..............................................................................
Plaintiff
and
ROAD
ACCIDENT FUND
…............................................................
Defendant
_________________________________________________________
JUDGMENT
BY
: MATHEBULA, AJ
_________________________________________________________
HEARD
ON
: 23 AUGUST 2011
_________________________________________________________
DELIVERED
ON
: 22 SEPTEMBER 2011
_________________________________________________________
[1] The plaintiff
instituted an action against the defendant for loss of support for
herself and her minor daughters. The claim
arose out of a motor
vehicle accident that occurred on the 11
th
April 2006 at
the T-junction of Van Riebeeck Street, Petrus Steyn in which her
husband (“the deceased”) was killed.
The plaintiff
alleged that the deceased carried a duty of support towards her as
well as the minor children and that whilst alive
he maintained them.
[2] At the outset of the
trial, the defendant conceded the merits in favour of the defendant.
The parties also agreed to proceed
with the claim for the plaintiff
because the minor children have since attained the age of majority.
The other important aspect is that the plaintiff amended
paragraph 8.1 of the particulars of claim by substituting the amount
of
R2 557 918,00
with
R3 001 337,00
. The defendant did
not object to the amendment. I accordingly made the appropriate order
on all these issues. The only issue in
dispute to be determined is
the quantum of damages.
[3] The only witness to
take the stand was Leon Gabriel le Roux. He is an Associate General
Accountant registered with the Institute
of Chartered Accountants of
South Africa (SAICA). He has been practicing as such in Ficksburg
since 1989. The deceased was his
client.
[4] Their relationship
started when the deceased was still farming with his father.
According to him the deceased was a good and
successful businessman.
As his farming operations grew from strength to strength, he founded
Maluti Air
and started a flying school. He was both a pilot
and an instructor. He recruited widely including
Europe
and
these trainees stayed at his lodge situated on the
Tati Farm
.
In their interaction, he also got to know his family and was aware
that he provided for them.
[5] In 2004 the deceased
and three others founded
Interactive Trading CC
which was
essentially a dairy venture. At the time of his demise in 2006 about
27 million litres of milk had been delivered. This
business
experienced phenomenal growth under his leadership to an extent that
the net income before tax increased by 770%. An astute
businessman
that he was, he saw a niche in transport and purchased three (3)
trucks. As a result of the growth he was planning
to buy-out others
together with his business partner one
Mr Prinsloo
.
Unfortunately they both perished in the same accident and the
business has since folded after their deaths.
[6] He testified that he
prepared the financial statements of the businesses in accordance
with the
Generally Accepted Accounting Principles
. He referred
to the various businesses conducted by the deceased and that some in
particular
Glen Morgan CC
did not conduct any business. He was
aware that the trusts of which the plaintiff was both the trustee and
income beneficiary were
operating at a loss. As a result there is a
pending action to remove one
Mr Snyman
as a trustee.
[7]
Mr Strydom
submitted that there is uncontested evidence regarding the income of
the deceased at the time of his death. The conclusion as per
the
expert was that an income of
R457 000,00
per annum has been
established. This is based on the outstanding performance of
Interactive Trading CC
which would have been well over the
inflation growth.
[8]
Mr Steenkamp
submitted that the situation of the plaintiff was not a desperate one
and that a contingency deductions of at least 50% must be
applied.
The plaintiff has a possible source of income in the form of the
trusts. She was in control of a substantial amount of
assets and
income because she is a trustee and an income beneficiary. I will
return to this argument at a later stage.
[9]
It was accepted as a trite principle of law that the plaintiff will
be entitled to damages insofar as there has been actual
pecuniary
loss
as a result of the
wrongdoing of the insured driver. See
EVINS
v SHIELD INSURANCE CO LTD
1980
(2) SA 814
(A) at 838 A;
LAMBRAKIS
V SANTAM LTD
2002 (3)
SA 710
at 714 F.
The real
contention between the parties is espoused by
Lewis
AJA
(as she then was) in
LAMBRAKIS
supra
at
714 H [11] – [14]
that
is:
“
A
quantification of the loss and the determination of whether the
income from the deceased’s estate amounted to an accelerated
benefit such that it should be regarded as
negative
or
reducing that loss“.
In order to measure such
damages for loss of support one must take into cognisance the
difference between the current position of
the plaintiff and the
position that could have existed had the deceased not died. In coming
to the correct award I must exercise
my discretion judicially and in
the interests of justice.
[10] The submission of
Mr
Steenkamp
is based on the Joint Last Will of the deceased and the
plaintiff.
Clause 1.7.2
reads as follows:-
“
The
trustees of the mentioned trusts shall pay the residue of the net
income, generated from the bequests to my wife for a period
of
10(ten) years from date of my death, after payment of all costs in
relation to the bequeathed trust assets and any business
ventures
which may be conducted and also for necessary and useful
improvements, interest and capital payments on outstanding loans,
payment of debts and income and other taxes.”
The plaintiff is listed
as both the trustee and income beneficiary.
[11] In exercising my
discretion I am guided by the test accepted by the court in assessing
the difference between the past and
the future. In this matter I am
confronted with the uncontested evidence of the accountant who
prepared the Financial Statements
of the deceased. These financial
statements appear on
pages 84 to 235
of the
exhibit “A”.
On the basis of these statements, actuarial calculations were
prepared in the form of a report by a renowned actuary
G.W.
Jacobson.
The report is uncontested by the defendant. As a result
of the report the plaintiff amended the claim amount and there was no
objection
from the defendant.
[12] Apparently the
trusts are not doing well at the moment and there is a dispute
between the trustees. The plaintiff is 53 years
of age and has not
remarried. In terms of the will she will only be maintained up to
2016 in which case she will be 58 years old.
This leaves her with
very little opportunity of finding alternative means of support. The
deceased was an astute businessman who
would have been farming until
well into his 70s or 80s as illustrated by the accountant of a number
of his colleagues. These are
all factors that must be taken into
consideration when assessing the appropriate award for damages. It is
the only yardstick at
my disposal to make an educated guess as per
the court in
LAMBRAKIS
supra
.
[13] In this matter, I
could find no basis upon which I can apply a higher contingency of
fifty (50) percent as suggest by
Mr Steenkamp
. He forcefully
urged me but could not substantiate it with documents or real
figures. His argument was neither based on fact or
expert conclusion.
The defendant with ample time to investigate and assess this matter
did not tender any evidence to the contrary.
On the other hand the
evidence on behalf to the plaintiff remains uncontested and I can
find no blemish. In fact it was submitted
(which aspect was not
denied) that the claim of the other victim namely
Prinsloo
was
admitted and settled by the defendant on the basis of the financial
statements similar to the one before me. I do not place
much reliance
on that aspect. Suffice to mention that there are sufficient reasons
to accept the evidence on behalf of the plaintiff.
I am satisfied
that the plaintiff has discharged the necessary onus of proof and is
entitled to be awarded the damages in accordance
with the particulars
of claim.
[14] The general rule
applicable to costs should apply. The successful plaintiff is
entitled to her costs. It was submitted by
Mr Strydom
that I
should award the costs for the second day that the matter was set
down.
[15] In terms of
section
24 (6) of the Road Accident Act, No 56 of 1996
(as amended)
summons can only be commenced with against the defendant after a
lapse of 120 days after the claim had been lodged
with the defendant.
The purpose of this section is to enable the defendant to
investigate, assess and decide on the claim. This
matter was heard
approximately two (2) years after the issuing of the summons. It is
inconceivable that it will take 2½
years to properly instruct
a legal representative on a matter. The matter was postponed to the
second day in order to obtain the
necessary instructions. On the
second day proper instructions were not provided and counsel had to
bat in the dark. There is no
excuse for a public body to operate in
that manner especially the one entrusted with such an important
mandate. I am in agreement
with
Mr Strydom
that the defendant
must be ordered to pay the costs of the second day.
[16] In the result, I
make the following order:
The defendant must
pay the plaintiff the sum of R3 001,337.00.
Interest at the rate
of 15,5% a tempora morae in the event the amount of R3 001,337.00 is
not paid within 14 days from the date
of this judgment.
The defendant shall
pay the plaintiff taxed or agreed costs which costs shall include
the second day of trial, preparation, qualifying
fees and attendance
of the following expert witnesses:-
G.L. Le Roux; and
G.W. Jacobson
___________________
M.
A. MATHEBULA, AJ
On behalf of the
plaintiff: Adv. S. J. Strydom
Instructed by:
Schoeman Maree Inc.
BLOEMFONTEIN
On behalf of the
defendant: Adv. M. Steenkamp
Instructed by:
Webbers Attorneys
BLOEMFONTEIN