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[2009] ZAGPPHC 16
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Member of the Executive Council Responsible for the Department of Roads and Public Works North West Province and Another v Oosthuizen (A671/07) [2009] ZAGPPHC 16 (2 April 2009)
IN THE HIGH COURT OF SOUTH
AFRICA
(IN THE NORTH AND SOUTH GAUTENG
HIGH COURT, PRETORIA)
NOT
REPORTABLE
Date:
2009-04-02
Appeal
Case
Number: A671/07
TPD Case No:
33736/2003
In the matter between:
THE MEMBER OF THE EXECUTIVE COUNCIL
RESPONSIBLE FOR THE DEPARTMENT OF
ROADS AND PUBLIC WORKS, NORTH WEST
PROVINCE
First
Appellant
THE MEMBER OF THE EXECUTIVE COUNCIL
RESPONSIBLE FOR THE DEPARTMENT OF
PUBLIC TRANSPORT, ROADS AND WORKS,
GAUTENG
Second
Appellant
and
LIZE MARIE
OOSTHUIZEN
Respondent
JUDGMENT
SOUTHWOOD J
[1]
The
appellants appeal against the award of damages (in the sum of R2 198
514,00) to the respondent in her personal capacity and
in her
capacity as mother and natural guardian of C H Oosthuizen (‘C’)
for loss of support arising out of the death
of the respondent’s
husband, Pieter Wilfred Oosthuizen (‘the deceased’), in
a collision on the Old Brits Road
on the night of 12/13 March 2003.
The agreed amount of R9 111,63 for funeral expenses is not a subject
of this appeal and has
already been paid to the respondent.
Interlocutory
applications
[2] Before dealing
with the merits of the appeal it is necessary to deal with
–
(1) the appellant
s’
application for condonation for their failure to apply for a date for
the hearing of the appeals and their failure to file
the appeal
record timeously and for reinstatement of the appeal;
(2) the
respondent’s application in terms of Rule 30 to set aside, as
irregular steps, the appellants’ application
dated 16 August
2007 for the allocation of a date for the hearing of the appeal and
the appellants’ application dated 20
August 2007 for
condonation of the appellants’ failure to apply for a date for
the hearing of the appeal and to file the
appeal record timeously
and for the appeal to be reinstated; and
(3) the reserved
costs of 14 April 2008 in the respondent’s application in
terms of Rule 30.
[3] The facts
relevant to these matters are as follows:
(1) On 21 August
2006 the court
a
quo
(Patel
J) gave judgment in favour of the respondent and awarded her the
aforementioned damages.
(2) On 7 December
2006 the appellants unsuccessfully applied to the court
a
quo
for
leave to appeal.
(3) On 2 April
2007 the Supreme Court of Appeal granted the appellants leave to
appeal to this court against the award of damages
by the court
a
quo.
(4) On
2 May 2007 the appellants delivered their notice of appeal. (In
terms of Rule 49(6) and (7) the appellants were required
to apply in
writing to the Registrar for a date for the hearing of the appeal
and to deliver three copies of the appeal record
to the Registrar
and two copies of the appeal record to the respondent within 60 days
after delivery of the notice of appeal.
In terms of Rule 49(6) if
no application for the date for the hearing of the appeal is
submitted the appeal is deemed to have
lapsed. In terms of Rule
49(7) if the copies of the record are not available when the
appellant applies for a date of hearing
the appellant may deliver
the application together with an affidavit in which the reasons for
the omission to deliver copies
of the record timeously are set out
and in which is indicated that an application for condonation of the
omission will be made
at the hearing of the appeal.)
(5) The
60 days contemplated by Rule 49(6) expired on 26 July 2007.
(6) (a) The
appellants’ attorney, Mr S.M. Dawood of the State Attorney,
experienced difficulty in preparing the appeal
record. Some of the
original documents were missing and Mr Dawood was obliged to
reconstruct the record using copies. Mr
Dawood had to obtain a
copy of the appellants’ expert’s (Mr Tonge of
PriceWaterhouse- Coopers) supplementary report
and a copy of the
pre- trial minute from the respondent’s attorney, Adams &
Adams.
(b) On 24 May
2007 Mr Dawood addressed a letter to Mr Tonge to request a copy of
the report and on the same day Mr Tonge furnished
a copy. On 24 May
2007 Mr Dawood addressed another letter to the respondent’s
attorney, Ms Koch of Adams & Adams, to
request a copy of the
pre-trial minute. Ms Koch did not respond immediately and Mr Dawood
addressed letters to her on 18 June
2007 and 25 June 2007 requesting
the copy of the pre-trial minute. Eventually, on 25 June 2007, Ms
Koch furnished Mr Dawood with
a copy of the pre-trial minute.
(c)
On
4 July 2007 Mr Dawood addressed a letter to LOM Business Solutions
(‘LOM’) with an instruction to prepare the appeal
record.
Mr Dawood told LOM that the matter was extremely urgent as the
record had to be filed by 19 July 2007. Mr Dawood stipulated
an
earlier date as he wished to have time to rectify any defects in the
record. On 24 July 2007 LOM informed Mr Dawood that they
would need
another 6 weeks to prepare the record.
(d) On 31 July 2007
Mr Dawood addressed a letter to Ms Koch to request an extension of
time for the filing of the appeal record
until 14 September 2007. Ms
Koch did not reply immediately.
(7
) Mr
Dawood was so involved in the preparation of the appeal record that
he forgot to apply for a date for the hearing of the
appeal. Mr
Dawood’s undisputed evidence is that he ‘was consumed
with ensuring the preparation of the record as a
first priority and
(his) omission to apply for a date for the hearing of the appeal was
unintentional and
bona
fide
and
not with the intention of delaying the finalisation of this matter.’
(8
) In
the meantime, the attorneys had been communicating with each other
about a possible settlement of the appeal. On 17 May
2007, in
response to the appellants’ notice of appeal, Ms Koch
addressed a letter to the appellants’ attorney asking
for a
settlement proposal to avoid an appeal. On 19 July 2007 Mr Dawood
addressed a letter to Ms Koch in which he invited the
respondent to
suggest a basis for settlement. On 14 August 2007 Ms Koch replied
to this letter and pointed out that because
the appellants had not
complied with Rule 49(6) the appeal had lapsed, that the respondent
would not condone the late filing
of the appeal record and that the
respondent demanded payment of the judgment debt of R2 207 627,63
and taxed costs of R603
623,27 within 14 days failing which the
respondent would take steps to enforce the judgment.
(9
) On
16 August 2007 (i.e. 14 days after the appeal lapsed) the
appellants’ attorney delivered a formal notice of application
for the allocation of a date for the hearing of the appeal
accompanied by an affidavit deposed to by Mr Dawood in compliance
with Rule 49(7)(a)(ii). In the affidavit Mr Dawood set out the
difficulties he had experienced in preparing the record –
already outlined – and notified the Registrar that an
application for condonation of the appellants’ failure to
apply for a date for the hearing of the appeal and file the appeal
record timeously and for reinstatement of the appeal would
be made
at the hearing of the appeal.
(10) On 20 August
2007 (i.e. 18 days after the appeal lapsed)
the
appellants’ launched an application in which they sought –
(i) an order that
the appellants’ failure to apply for a date for the hearing
of the appeal and to file the record of the
appeal timeously be
condoned; and
(ii) an order that the appeal be
reinstated.
In support of this
application
Mr
Dawood deposed to an affidavit in which he set out the difficulties
he had experienced in preparing the appeal record and the
reason why
he did not apply for a date for the hearing of the appeal.
(11
) On
4 September 2007 (i.e. 26 days late) the appellants delivered and
filed copies of the appeal record.
(12
) The
respondent did not oppose the appellants’ application for
condonation and for reinstatement of the appeal. Instead,
on 30
August 2007, the respondent delivered a notice in terms of Rule
30(2)(b) in which the respondent gave notice to the appellants
that
the appellants’ application for condonation and reinstatement
dated 20 August 2007 constitutes an irregular step
– (i)
because the notice of motion should have been in accordance with
form 2(a) and (ii) because the notice of motion
gives notice that
the application will be brought at the hearing of the appeal whereas
the application for reinstatement of the
appeal must be decided in a
separate application in the motion court heard before the date of
the appeal.
(13
) The
appellants did not remove the alleged cause of complaint and on 3
October 2007 the respondent launched an application in
which she
sought,
inter
alia,
an
order setting aside, as irregular steps, in terms of Rule 30(1) –
(i) the appellants’
application dated 16 August 2007 for the allocation of a date for
the hearing of the appeal;
(ii) the
appellants’ application dated 20 August 2007 for con- donation
and reinstatement of the appeal.
(14
) On
24 October 2007 the appellants gave notice of their intention to
oppose the respondent’s application in terms of Rule
30(1) and
on 14 November 2007 delivered their answering affidavit and counter
application. In the answering affidavit Mr Dawood
states that the
appellants had filed the appeal record on 4 September 2007, that the
reasons for launching the application were
spurious and puerile and
that the respondent appeared to be attempting to prevent the
appellants from being heard when they had
a compelling case. Mr
Dawood requested the court to dismiss the application and to order
the respondent’s attorney to
pay the costs
de
bonis propriis
on
an attorney and own client scale and to grant the relief sought in
the counter application: i.e. the relief sought in the
appellants’
applications dated 20 August 2008. The respondent filed a replying
affidavit and enrolled the application
for hearing in the opposed
motion court on 14 April 2008.
(15) On 14 April
2008 the respondents applied for the postponement of the hearing of
the application to the date on which the appeal
is heard together
with the appellants’ application for condonation. On 14 April
2008 the court ordered that all the applications
be postponed
sine
die
and that all costs (including the costs of the application for
postponement) be reserved for determination by the court hearing
the
appeal.
[4]
In
their heads of argument the respondent’s counsel have not dealt
with the respondent’s application in terms of Rule
30(1), the
postponement of the applications on 14 April 2008 or the costs of
the applications and the costs order made on 14
April 2008. Instead
the respondent’s counsel have dealt only with the question of
whether condonation should be granted.
They state, wrongly, that
the respondent has at all times opposed the granting of condonation
and they make certain ‘observations’.
They submit that
the appellants failed to set out clearly what caused the delay and
that the appellants’ attorney lied
to LOM so that the record
could be completed in time. They ask that condonation be refused.
[5
] In
the absence of a notice of intention to oppose and an answering
affidavit the respondent is not entitled to oppose the appellants’
application for condonation and reinstatement. The respondent sought
only the setting aside of the application. The failure to
deal with
the application in the heads of argument indicates that the
respondent no longer seeks that relief. In oral argument
Mr Neser
SC, on behalf of the respondent, stated that the respondent had
abandoned the application. He conceded that the abandonment
of an
application will usually result in a costs order against the
applicant. He did not argue that the court should not make
such a
costs order. In any event the application was clearly without merit
and should be dismissed with costs. It was not an
irregular step to
use the short form for the application and it is well-established
that where the prospects of success in the
appeal will have to be
considered the application for condonation and reinstatement should
be brought at the hearing of the appeal
–
Meyer
v Dowson & Dobson Ltd
1967
(4) SA 628
(T)
at
628F-G;
De
Sousa v Cappy’s Stall
1975
(4) SA 959
(T)
at
960G-961F;
Lipshitz
NO v Saambou-Nasionale Bouvereniging
1979
(1) SA 527
(T)
at
529C-E. In my view the respondent’s application in terms of
Rule 30(1) was ill-founded, ill-advised and did not comply
with the
rule. The respondent obviously thought she could prevent the appeal
from being heard by relying on the perceived technical
deficiencies
in the appellants’ case. Copious affidavits have been filed at
considerable expense. All this could have been
avoided by the
respondent simply agreeing to the extension of time sought and not
opposing the appellants’ application for
reinstatement.
[6
] The
respondent’s application in terms of Rule 30(1) will therefore
be dismissed with costs including the costs of two counsel.
The
costs will also include the costs of 14 April 2008 (including the
costs of two counsel). The appellants’ application
for
condonation of the appellants’ failure to apply for a date for
the hearing and file the appeal record timeously and for
reinstatement of the appeal will be granted.
The
merits: the basis of the respondent’s claim
[7
] A
claim for damages for loss of support is based on the legal duty to
provide such support owed by the deceased during his/her
lifetime to
the plaintiff –
Union
Government v Warneke
1911
AD 657
at
666:
Oosthuizen
v Stanley
1938
AD 322
at
327. Normally a wife will have no difficulty in establishing that
she has a right to support but she will not do so where
she was
earning more than her husband –
Gildenhuys
v Transvaal Hindu Educational Council
1938
WLD 260
at
262-3. It is clear that the plaintiff must prove actual loss.
(1) In
Legal
Insurance Company Ltd v Botes
1963
(1) SA 608
(A)
at
614F-G the court said:
‘
The remedy
relates to material loss “caused to the dependants of the
deceased man at his death”. It aims at placing
them in as good
a position, as regards maintenance, as they would have been in if the
deceased had not been killed. To this end
material losses as well as
benefits and prospects must be considered. The remedy has been
described as anomalous, peculiar and
sui
generis
–
but it is effective.’
(2)
In
Evins
v Shield Insurance Co Ltd
1980
(2) SA 814
(A)
at
838A-B the court said:
‘Only a dependant to whom the
deceased was under a legal duty to provide maintenance and support
may sue and in such action
the dependant must establish actual
patrimonial loss, accrued and prospective, as a consequence of the
death of the breadwinner’.
At
839B-C the court said:
‘…
in
the case of an action for damages for loss of support, the basic
ingredients of the plaintiff’s cause of action would be
(a) a
wrongful act by the defendant causing the death of the deceased, (b)
concomitant
culpa
(or
dolus
)
on the part of the defendant,
(c)
a legal right to be supported by the deceased, vested in the
plaintiff prior to the death of the deceased and (d)
damnum,
in
the sense of a real deprivation of anticipated support.
(Emphasis
added)
(3) In
Santam
Insurance Co Ltd v Fourie
[1996] ZASCA 122
;
1997
(1) SA 611
(A)
at
614F-G the court said:
‘However,
before coming to the computation of loss, one must first ascertain
whether any loss at all has in fact been suffered.
In
Evins
v Shield Insurance Co Ltd
1980
(2) SA 814
(A)
at
838A Corbett JA described as “trite” the following
principle relating to a claim for damages by a dependant:
“…
(T)he dependant must establish actual patrimonial loss, accrued and
prospective, as a consequence of the loss of
the breadwinner”’
The court pointed
out that the question of whether the dependant has established such
loss is a ‘pure question of fact’
(615D-E) and dismissed
the dependant’s claim for loss of support where the deceased
contributed less to the common household
than she received and the
family was, financially speaking, better off after her death
(615J-616B).
[8] The princip
al
issue before the court
a
quo
and
before this court is the deceased’s earnings at the time of
his death and his probable earnings during the time he would
have
supported the plaintiff and C. The respondent sought to prove the
deceased’s earnings on an actuarial basis, starting
with his
probable earnings in 2005: i.e. two years after his death.
According to the respondent, the records of the deceased,
who had
practised as an advocate for 6 years prior to his death, were
deficient and did not give an accurate picture of the deceased’s
earnings during the 3 years immediately preceding his death. The
court
a
quo
therefore
first had to make a finding as to the deceased’s probable
earnings in 2005 and this was used as the starting point
for the
actuarial calculation of the deceased’s earnings during the
rest of the relevant period.
[9] The
difficulties inherent in the actuarial calculation of future earnings
were spelled out by the court
in
Southern
Insurance Association v Bailey NO
1984
(1) SA 98
(A)
where
the court was concerned with a claim for loss of earning capacity of
a two year old child. At 113G-H the court said:
‘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 an estimate,
which is often a very rough estimate,
of the present value of the 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.
It is manifest
that either approach involves guesswork to a greater or lesser extent
but the Court cannot for this reason adopt
a
non
possumus
attitude
and make no award.
…
In a 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 has the advantage of an attempt to ascertain the
value of what was lost on a logical basis;
whereas the trial judge’s
“gut feeling” (to use the word of appellant’s
counsel) as to what is fair and
reasonable is nothing more than a
blind guess. (Cf
Goldie
v City Council of Johannesburg
1948
(2) SA 913
(W)
at
920.)’
It must be
emphasised that i
n
the present case the court
a
quo
was
not dealing with a young child’s loss of earning capacity which
is clearly ‘speculative in the extreme’ (
Bailey’s
case
at
114E). It was dealing with the earning capacity of an advocate who
had been practising for some six years and had records of
his income
and expenses, financial statements and income tax returns.
Repondent’s case on the
pleadings
[10
] (1) The
respondent’s case on the pleadings was clearly that the
deceased was making a good living at the Bar and consequently
that she would suffer a substantial loss of support.
(2) In her initial
particulars of claim dated 21 November 2003 the respondent, in her
personal capacity, claimed damages in the
sum of R1 430 000 and in
her capacity as mother and natural guardian of C, R2 267 000.
According to the particulars these claims
were calculated on the
basis that the deceased earned a net income of approximately R340 000
per year and the plaintiff a net income
of approximately R100 000 per
year and that the common division of the deceased’s income in
matters of this nature is two
fractions for the deceased, two
fractions for the plaintiff and one fraction for the child. It was
postulated that a second child
would have been born to the family
during or about 2006/7.
(3) In her amended
particulars of claim dated 19 April 2005 (i.e. after the respondent
received the report of her expert Mr Jacot-Guillarmod)
the
respondent, in her personal capacity, claimed damages in the sum of
R3 638 371 and, in her capacity as mother and natural guardian
of C,
R2 284 350, as set out in the actuary’s report, annexure A to
the particulars of claim. According to the actuary’s
report he
was to use a base net income for the deceased for the 2005 tax year
of R515 000 (the figure arrived at by Mr Jacot-Guillarmod)
and a
gross income for the respondent of R242 403. He was also to assume
that there was a 50 % chance of an additional child born
on 1 January
2007. There is no reference to the respondent’s loss of
support being claimed on any other basis.
Respondent’s claim on the
evidence
[11
] Persisting
in the contention that the deceased would have earned a net income
of R515 000 in the 2005 tax year the respondent
sought to establish
this in three ways:
(1) By proving that
on the deceased’s own figures, suitably adjusted to provide for
certain contingencies (i.e. unbilled fees;
cash receipts and
defective records), the deceased would have earned R515 000 net in
the 2005 tax year;
(2) By proving that the deceased’s
practice was comparable to that of Adv. Naudé de Wet who
earned R515 000 net in
the 2005 tax year;
(3) By proving that If the deceased
left the Bar and became a legal services manager his net earnings
would have been R500 000
in the 2005 tax year.
[1
2] To
prove the deceased’s net income in 2003 and 2005 the respondent
testified and tendered the evidence of two advocates
and former
colleagues of the deceased, Adv. Naudé and Adv. De Wet, the
evidence of the deceased’s secretary, Susanna
Swart, and the
evidence of a Chartered Accountant Mr Jacot-Guillarmod and an
Industrial and Consulting Psychologist, Ms Barbara
Donaldson. The
respondent delivered a summary in terms of Rule 36(9)(b) dated 14
April 2005 and an addendum thereto dated 19 April
2006 in respect of
Mr Jacot-Guillarmod’s evidence. To counter this evidence the
appellants tendered the evidence of Mr C.
Tonge a Chartered
Accountant who is a partner in the Forensic Services Department of
PriceWaterhouseCoopers and Pieter Jan Hendrik
Harmse, an Industrial
Psychologist. The appellants made available to the court
a
quo
Mr
Tonge’s entire report (with appendices). Both Mr
Jacot-Guillarmod and Mr Tonge testified as expert witnesses.
[13
] In
Coopers
(South Africa) (Pty) Ltd v Deutsche Gesellschaft Fϋr
Schädlingsbekämpfung MBH
1976
(3) SA 352
(A)
the
court summarised the purpose of expert evidence as follows:
‘There are,
however, cases where the court is, by reason of a lack of special
knowledge and skill, not sufficiently informed
to enable it to
undertake the task of drawing properly reasoned inferences from the
facts established by the evidence. In such
cases, subject to the
observations in the
Gentiruco
case,
loc
cit,
the
evidence of expert witnesses may be received because, by reason of
their special knowledge and skill, they are better qualified
to draw
inferences than the trier of fact. There are some subjects upon
which the court is usually quite incapable of forming
an opinion
unassisted, and others upon which it could come to some kind of
independent conclusion, but the help of an expert witness
would be
useful (see, Hoffman, SA Law of Evidence, 2
nd
ed, p78). For an example of evidence held to be admissible because
it “would be of great assistance to the court”
in drawing
the inference it was required to draw, see
R
v Vilbro and Another,
1957
(3) SA 223
(AD)
at
p228G-H. If a party intends calling a witness to give expert
evidence of the kind described above, he is required to furnish
the
other party with “a summary” of such witness’
opinions and his reasons therefor’ (370F-H).
and:
‘… an
expert’s opinion represents his reasoned conclusion based on
certain facts or data, which are either common
cause, or established
by his own evidence or that of some other competent witness. Except
possibly where it is not contraverted,
an expert’s bald
statement of his opinion is not of any real assistance. Proper
evaluation of the opinion can only be undertaken
if the process of
reasoning which led to the conclusion, including the premises from
which the reasoning proceeds are detailed
by the expert’
(371G-H).
[14
] According
to Mr Jacot-Guillarmod’s summary he was requested to determine
–
(a) what the income of the deceased’s
husband may reasonably have been expected to be had it not been for
his untimely death
on 13 March 2003 caused by a motor accident; and
(b) what the income of the plaintiff
is that should be taken into account when calculating her claim for
loss of support.
On the face of it
b
oth
matters are factual. However Mr Jacot-Guillarmod did not determine
the deceased’s earnings at the date of his death.
The summary
records Mr Jacot-Guillarmod’s conclusion that the deceased’s
annual base income for the 2005 tax year
would have been R515 000 and
the respondent’s annual base income for the same year would
have been R242 403,00. (The respondent’s
income is not
controversial and need not be considered further.) However, in order
to arrive at the figure of R515 000 for the
2005 tax year, Mr
Jacot-Guillarmod ignored the deceased’s own net earnings as
they appear from the deceased’s financial
statements –
because, he said, they are not reliable – and accepted that the
deceased’s earnings in the 2004
and 2005 years would exceed
those of a colleague Adv. Naudé de Wet. Mr Jacot-Guillarmod
then calculated the deceased’s
net earnings for the 2005 tax
year by deducting the deceased’s practice expenses (which are
lower than those of Adv. De Wet)
from the gross income of Adv. De
Wet. It is striking that apart from vague references to ‘certain’
documents Mr Jacot-Guillarmod’s
summary of expert evidence
contains no facts or data which are agreed or established by any
evidence. In order to arrive at the
conclusion that the deceased
earned as much as Adv. De Wet Mr Jacot-Guillarmod accepted the
following statements made by Adv. De
Wet (who had been in practice
for 9 months when the deceased died) –
(1) the deceased was a very busy
advocate specialising in family law and doing many urgent
applications;
(2) the deceased would have been paid
in cash for many of the urgent applications;
(3) he, Adv. De Wet, was of the
opinion that the deceased received substantial amounts in cash from
attorney for services rendered
and the typist of the deceased had
confirmed this to him;
(4) he, Adv. De Wet, was in his third
year of practice at the Bar and from his personal knowledge of the
busy practice that the
deceased had and taking into account the
seniority of the deceased in comparison to himself, he estimates
that the deceased
would have had a greater income than his;
(5) his, i.e. Adv.
De Wet’s, fees for the 2005 (i.e. his second complete year of
practice) tax year amounted to R683 951,50.
[15
] According
to the addendum to Mr Jacot-Guillarmod’s summary dated 19
April 2006 he had examined a number of documents relating
to Adv. De
Wet’s income and the report of another expert, Ms Barbara
Donaldson. Mr Jacot-Guillarmod was now of the view
that the
deceased’s gross income for the 2006 tax year would be R740
000, his expenses would be R176 000 and his net income
would be R564
000. Once again Mr Jacot-Guillarmod used Adv. De Wet’s income
and the deceased’s expenses, adapted
from the 2003 tax year,
to calculate his net income.
[16
] The
court
a
quo
regarded
the respondent’s evidence as compelling and found that the
deceased had built up a substantial practice (where he
appeared
three to four times a week in opposed applications at a day fee of
R4 500 to R5 000); that he stood on the threshold
of an ‘enhanced
career prospect’ when he died and that he would have become
more involved in Constitutional Family
Law disputes; that his
practice records and income tax information did not reflect the
deceased’s earnings; that the
deceased’s earnings could
be compared to those of Adv. Naudé de Wet who had a
comparable practice and who earned
a net income of R515 000 in 2005
and that even if the deceased left the Bar and became a legal
services manager he would earn
R500 000 net in 2005.
[17] The respondent
contends that
this
court cannot interfere with the factual findings of the court
a
quo
relating
to the deceased’s practice and his income therefrom because the
evidence was not challenged and the court accepted
it, finding it to
be cogent. While it is true that a court of appeal usually will not
interfere with a finding of fact made by
the trial court it will
interfere where there is a misdirection on fact by the trial judge,
where the reasons are on their face
unsatisfactory or where the
record shows them to be such; there may be such a misdirection also,
where, though the reasons as
far as they go are satisfactory, the
trial judge is shown to have overlooked other factual probabilities.
The appellate court
is then at large to disregard the trial judge’s
findings of fact, even though based on credibility, in whole or in
part according
to the nature of the misdirection and the
circumstances of the particular case, and so come to its own
conclusion on the matter
–
R
v Dhlumayo and Another
1948
(2) SA 677
(A)
at
705-706. The approach that a court of appeal will not lightly
interfere with a factual finding of the trial court, even one
involving an inference from established facts, is a guideline and not
a rule of law –
R
v Dhlumayo supra
at
695. Where a court of appeal is convinced that the trial court has
made a wrong finding of fact the court of appeal will rectify
the
finding –
President
of the Republic of South Africa and Others v South African Rugby
Football Union and Others
2001
(1) SA 1
(CC)
paras
78-81;
S
v Mkohle
1990
(1) SACR 95
(A)
at
100e-f;
S
v Mafaladiso en Andere
2003
(1) SACR 583
(SCA)
at
595b-d.
[18]
It
is trite that ordinarily, the party bearing the onus can discharge it
only by adducing credible evidence –
National
Employers’ General Insurance v Jagers
1984
(4) 437 (E)
at
440D-E. It must also be borne in mind that simply because the
evidence of the respondent and Adv. Naudé and Adv. De Wet
was
not contradicted, as it obviously could not be, it must be accepted.
As pointed out by the court in
Shenker
Bros v Bester
1952
(3) SA 664
(A)
at
670E-G:
‘
The evidence
of these two witnesses, as was to be expected, has not been
contradicted by any evidence led on behalf of the defendants,
but
this fact does not relieve the plaintiff of the obligation to
discharge the
onus
resting
on him (see
Siffman
v Kriel,
1909
T.S. 538
;
Katz
v Bloomfield & Keith,
1914
T.P.D. 379
;
Nelson
v Marich
–
A.D.
May 1952, not yet reported). In the first of these cases, Innes,
C.J. said:
“It
does not follow, because evidence is uncontradicted, that therefore
it is true … The story told by the person on
whom the
onus
rests
may be so improbable as not to discharge it.”
Similarly,
the circumstance that evidence is uncontradicted is no justification
for shutting one’s eyes to the fact, if it
be a fact, that it
is too vague and contradictory to serve as proof of the question in
issue.’
[19
] The
court
a
quo
found
that there were two possibilities regarding the deceased’s
future earnings –
(1) he would have continued to
practise at the Bar until the age of 70 and his net earnings in the
2005 tax year would have been
R515 000;
(2) if the deceased
was
compelled to leave the Bar by force of circumstances, with six years
of experience as an advocate he would have found employment
as a
legal services manager and he would have earned around R500 000 per
annum.
Nevertheless, t
he
court
a
quo
found
that there was compelling evidence that the deceased would have
remained at the Bar
inter
alia
because
he was beginning to enhance his career in the field of Constitutional
Family Law.
[20
] The
crucial finding is that the deceased would have earned a net income
of R515 000 as an advocate in the 2005 tax year or R500
000 as a
legal services manager in the private sector. In my view neither
finding is supported by the evidence and, in any event,
the second
finding is irrelevant.
[
21] It
will be remembered that the theory of the plaintiff’s claim is
that the deceased was a competent advocate who had
a busy practice.
He appeared in opposed applications three or four days per week and
he charged either R4 500 or R5 000 for
such an appearance.
According to the respondent’s witnesses, the fact that the
deceased’s records did not reflect
these fees was due to three
factors: (a) the deceased did not keep a fee book from the end of
the 2001 tax year; (b) the deceased
was paid with cheques which he
did not deposit but cashed; (c) the deceased was paid in cash.
According to the respondent’s
evidence a further indication
that the deceased’s fees were not all recorded is that after
his death it was found that
a number of attorneys owed him R282 000.
[22
]
(1) Against that background it is a remarkable feature of this
case that the respondent presented virtually no documentary
evidence
to establish the deceased’s gross income in 2003. There is
also no evidence as to who and how the debtors list
of R282 000 was
compiled.
(2) It was accepted
that the deceased did not keep a proper fee book after the 2001 tax
year: i.e. during the 2002 and 2003 tax
years, and it appears to
have been accepted that the deceased’s financial statements and
income tax returns for the 2001,
2002 and 2003 tax years were
prepared after his death using the deposits in his bank statements to
calculate his gross income.
Nevertheless it was not disputed that
during an inspection on 20 April 2005, Mr Tonge found the deceased’s
fee statements
to attorneys for the period 1999 to 2003. There is no
evidence to suggest that these fee statements were incomplete or did
not
reflect all fees earned by the deceased. The overwhelming
probability is that the fee statements are a reliable record of the
deceased’s fees. A practising advocate is required to keep a
record of all fees charged and this would be necessary
not
only for purposes of income tax (and, if registered, for VAT) but
would also be vital for the advocate in order to recover fees
from
his instructing attorneys. These fee statements should have been the
starting point for the respondent’s claim. In
terms of section
11 of the Income Tax Act 58 of 1962 read with the definitions of
‘gross income’ and ‘income’
in section 1 the
first step in the calculation of the taxpayer’s taxable income
is the determination of the taxpayer’s
gross income. And in
determining the taxpayer’s gross income all amounts which
accrued to the taxpayer in the year of taxation
must be taken into
account: i.e. all amounts to which the taxpayer becomes entitled in
the year constitute gross income –
Lategan
v Commissioner for Inland Revenue
1926
CPD 203
(2 SATC 16)
at
207-10 (
SATC
at
18-21);
Commissioner
for Inland Revenue v Peoples Stores (Pty) Ltd
[1990] ZASCA 1
;
1990
(2) SA 353
(A)
at
367D. Accordingly, using the fees deposited in the deceased’s
bank account to calculate the deceased’s gross income
is not a
proper method of calculating gross income. It is also irrelevant
that the deceased did work in the tax year but did not
charge a fee.
The deceased only became entitled to the fee when he had marked the
fee and rendered a statement of account to his
attorney.
(3) Using the
deceased’s fee statements Mr Tonge prepared a schedule of fees
for the period 2002-2003 which reflects the deceased’s
gross
income as R295 071 in 2002
and R277 830 in 2003. In the absence of any reliable evidence that
the deceased did not record the fees he earned while acting
for some
attorneys who paid him in cash, these figures must be accepted as the
correct figures for 2002 and 2003.
(4) The mysterious
list of outstanding debtors can also be ignored. There is no
evidence as to who compiled the list and how this
was done. Even if
it is genuine it must have been prepared on the strength of
information in the deceased’s fee statements
and other records.
It was therefore accounted for in the calculation of the gross
income for 2002 and 2003. There is no evidence
that the list
contained fees not found in the existing records.
[23] Before
considering the reliability of the respondent’s evidence
regarding the deceased’s earnings it is essential
that the
objective evidence relating to the deceased’s financial
position be analysed. The evidence that he had a substantial
practice and received substantial amounts of cash must be considered
against the background of this objective evidence. The
court
a
quo
did
not do so and did not consider how these facts affected the
credibility and reliability of the witnesses and the cogency of
their evidence.
Deceased’s
financial position – practice income and expenditure
[24
] According
to the financial statements prepared for the deceased his practice
income and expenditure and net earnings for the
years that he
practised were as follows:
Year
Income
Expenses
Net
Earnings
1998
R61
147
R60
611
R536,33
1999
R113
360,13
R94
896
R18
463,33
2000
R124
457,76
R105
198
R19
258,37
2001
R143
726
R93
762
R49
963,99
2002
R205
917,39
R146
689
R59
228,11
2003
R240
584
R144
283
R96
301,59
(As already mentioned the income for
2002 and 2003 is not correct)
[25
] During
the period 1999 to 2003 the deceased had three Absa bank accounts: a
student loan account, a personal cheque account and
a practice cheque
account. During this period these accounts were generally overdrawn.
At the time of his death the deceased
owed a total of R21 434,24 on
these accounts (R2 261,35 on the student loan account: R13 491,64 on
the personal cheque account:
R5 681,25 on the practice cheque
account). At the beginning of 2001 the deceased had a combined
overdraft facility of R42 360
which the bank gradually reduced to R26
390.
[26
] As
from 24 November 1999 a vendor was required to register for Value
Added Tax (‘VAT’) when his turnover (i.e. gross
fees) in
a 12 month period was likely to exceed R300 000 (s 23(1) of the Value
Added Tax Act 89 of 1991). A vendor could deregister
if his turnover
would not exceed that amount (s 24(1) of the Act). On 28 July 1997
(i.e. just after he started practising) the
deceased’s
accountant, Brino Britz, applied for the deceased to be registered
for VAT and SARS duly registered the deceased.
During about June
2001 the deceased deregistered for VAT. There is no evidence that he
re-registered for VAT before his death.
The deregistration for VAT
indicates that the deceased satisfied the Commissioner for SARS that
his gross income would not exceed
R300 000. This is entirely
consistent with the information in his financial statements and other
evidence which indicates that
by his sixth year at the Bar the
deceased’s gross income had not exceeded R300 000 in any one
year.
[27
] According
to the evidence of Adv. De Wet and Suzie Swart the deceased was
involved mainly in Family Law disputes and urgent
applications.
Adv. De Wet emphasised that the deceased did a lot of urgent
applications. He even went so far as to state that
the deceased was
known as an advocate who specialises in urgent applications. He was
someone that attorneys could rely on to
do an urgent application at
extremely short notice and he was almost a trouble-shooter for
attorneys. Adv. De Wet further testified
that these urgent
applications generally related to Family Law matters. He testified
that the deceased struggled to collect
his fees and that he
discounted fees owing to him. Adv. Naudé testified that the
deceased’s fee structure made him
attractive to attorneys to
instruct in Family Law matters. All these factors indicate that the
deceased did not have a substantial
practice.
Deceased’s
general financial position
[28
] (1) In
about November 1997 the deceased and the respondent purchased
their residence at Erf 3554, Portion 7, Faerie Glen
(‘the
property’) with a loan from NBS for R331 836,75. The loan
was repayable over 20 years in instalments of
R5 438 per month.
In early 1998 a mortgage bond was registered over the property and
instalments were to commence on 1 March
1998.
(2) By April 1999
the deceased and the respondent were in arrears with their bond
in
stalments
in the amount of approximately R48 000 (i.e. about eight instalments)
and on 26 April 1999 the NBS, the bondholder, notified
the deceased
and the respondent that since they had not reacted to previous
correspondence requesting payment of the arrear instalments
the NBS
was calling up the bond and the whole outstanding balance (now R385
868,30) was due and payable. This notice seems to
have prompted the
deceased and the respondent to make arrangements with the NBS to pay
off their indebtedness. On 26 April 1999
they entered into an
agreement with the NBS to pay off their indebtedness of R394 051,33
in 39 months in instalments of R14 000
per month commencing on 1 May
1999.
(3) The deceased
and the respondent failed to pay these instalments and by 21 June
2000 their indebtedness had grown to R425 892,94.
On 21 June 2000
the deceased and the respondent entered into another written
agreement in terms of which they undertook to pay
the debt of R425
892,94 in 217 months in instalments of R5 470 commencing on 1 July
2000.
(4) The deceased
and the respondent failed to pay these instalments and on 24 May 2002
BOE Bank Limited (‘BOE’) (formerly
the NBS) instituted
action against the deceased and the respondent claiming payment of
R430 602,08 being the balance owing in terms
of the mortgage bond on
the grounds of the failure to pay the instalments due under the bond.
BOE also claimed interest and an
order declaring the property
executable. BOE served the summons on the deceased and the
respondent at their
domicilium
citandi
by
attaching a copy to the main entrance of their residence. The
deceased and the respondent did not enter appearance to defend
the
action and on 28 January 2003 (8 months later) BOE obtained judgment
by default against them for payment of R430 602,08, interest
and an
order declaring the property executable. On the same date BOE issued
a writ of attachment against the property.
(5) The BOE
statement of account in respect of the deceased and the respondent
for the period 22 September 2002 to 18 January 2003
reflects four
debits for interest (each for about R6 000), one cheque payment of R8
000 on 4 November 2002 and a cheque payment
of R16 000 on 2 December
2002 which was immediately reversed. On 18 January 2003 the deceased
and the respondent were R49 679,01
in arrears.
(6) The deceased
and the respondent’s indebtedness to BOE was secured by an
insurance policy for R340 000 on the deceased’s
life which paid
out on the deceased’s death and was utilised to reduce the
indebtedness under the mortgage bond.
(7)
On
the date of his death the deceased was indebted to the City of
Tshwane in the sum of about R23 000 in respect of rates and taxes.
At about R900 per month this means that the deceased and the
respondent failed to pay rates and taxes for about 26 months. There
is no admissible evidence to explain why the deceased and the
respondent did not pay the monthly account for rates and taxes or
why
the deceased did not immediately pay the full amount reflected in the
statement of account.
(8)
When
he died the deceased had no investments and, apart from the mortgage
bond insurance, no insurance policies. He also did not
appear to
have disability insurance such as that provided by the Professional
Provident Society.
(9)
The
deceased died while driving a motor vehicle, a 1989 Nissan one ton
LDV, which he purchased in 2002 for R25 000 but which was
not
registered in his name. There is no proof that the deceased paid the
purchase price and received the relevant registration
documents.
There is no explanation for the fact that the vehicle was not
registered in the deceased’s name. The executor
apparently
sold the wreck of this vehicle for R5 000.
(10)
According
to the plaintiff’s further particulars for trial the respondent
had a 1998 Toyota Tazz which she purchased in 1998
for R42 000. At
the time of the trial in 2006 this vehicle was 8 years old.
(11) In
cross-examination the respondent conceded that at the time of the
deceased’s death she was the breadwinner and that
she had been
the breadwinner during the six years that the deceased had been at
the Bar.
(12) There is no
evidence that the deceased spent money on hobbies or any outside
interests. In fact there is no evidence that
he had outside
interests. According to his wife and colleagues he applied himself
diligently to his practice. He worked at it
during the day and very
often during the evenings. He relieved this routine with the
occasional game of action cricket.
[29] On the
strength of these objective facts the only reasonable inference is
that the deceased was struggling to make a living
at the Bar. See
AA
Onderlinge Assosiasie Beperk v De Beer
1982
(2) SA 603
(A)
at
614H and 614H-615B;
Govan
v Skidmore
1951
(1) SA 732
(N)
at
734C-D:
Ocean
Accident and Guarantee Corporation Ltd v Koch
1963
(4) SA 147
(A)
at
159C-D:
Spes
Bona Bank Ltd v Portals Water Treatment South Africa (Pty) Ltd
1983
(1) SA 978
(A)
at
981A-D.
[30
] In
view of this cogent objective evidence the views of his colleagues,
Adv. Naudé and Adv. De Wet, simply do not bear
scrutiny.
Their evidence that the deceased had a substantial practice and
appeared three to four days a week in opposed applications
and
earned appearance fees of R4 500 to R5 000 per day simply cannot be
accepted. Apart from the fact that this evidence is
not supported
(and in fact is contradicted) by the schedule of fees compiled by Mr
Tonge it is highly improbable. If the deceased
was earning between
R15 000 and R20 000 per week the overwhelming probability is that
the deceased would have paid the mortgage
bond instalments and the
municipal accounts as and when they fell due. These were clearly
the deceased’s most important
financial obligations.
[31
] The
respondent also failed to prove that the deceased’s practice
was comparable to that of Adv. De Wet. Simply judging
by gross fees
earned, for reasons which do not appear from the record, Adv. De
Wet’s financial progress at the Bar was far
faster than that of
the deceased. In his first full year of practice (2004) his gross
earnings were R383 750 (i.e. about 3
1
/
2
times that of the deceased in his first full year) and in his second
full year of practice (2005) his gross earnings were R683
151 (i.e.
six times that of the deceased in his second full year in practice).
The deceased and Adv. De Wet commenced practice
at the Bar at
different times and there is no evidence that Adv. De Wet’s
practice consisted mainly of family law cases and
urgent
applications, usually in family law disputes. It appears that Adv.
De Wet was more involved in commercial and Road Accident
Fund cases.
[32] Against that
background the reasoning of the court
a
quo
will
be considered.
[33
] The
court
a
quo
identified
the key factual issues in the case as –
(1) the deceased’s earning
capacity; and
(2) the contingencies to be allowed.
With regard to the
first key issue the court
a
quo
noted
that it was common cause that the deceased’s financial
information was deficient and that there were three bases on
which to
determine the deceased’s earning capacity –
(i) the earnings of
Adv. Naudé de Wet whose practice ‘in certain respects’
is comparable to that of the deceased;
(ii) the earning capacity of the
deceased in the private sector; and
(iii) the earnings reflected in the
deceased’s available (deficient) financial information and to
make certain assumptions.
[34
] The
court
a
quo
said
that it was necessary to consider all the evidence to decide which
basis was most appropriate to determine the deceased’s
earnings
had he not been killed.
[35
] In
my view the trial court erred in identifying the one key factual
issue as the deceased’s earning capacity in general
and in
adopting the approach which he did. The key factual issue was what
the deceased would probably have earned as an advocate
had he not
been killed. The evidence, particularly that of the respondent, was
clear: the deceased would have continued to practise
at the Bar
despite his lack of success and the financial implications thereof.
This was so clear that the parties agreed in argument
before the
court
a
quo
that
the deceased would have remained at the Bar as an advocate until the
age of 70. Accordingly it was wrong to attempt to determine
the
respondent’s loss by reference to what the deceased could have
earned in another occupation –
Minister
van Veiligheid en Sekuriteit v Geldenhuys
2004
(1) SA 515
(SCA)
at
536H-537A;
Griffiths
v Mutual & Federal Insurance Co Ltd
[1993] ZASCA 121
;
1994
(1) SA 535
(A)
at
544G-547E;
Carstens
NO v Southern Insurance Association Ltd
1985
(3) SA 1010
(C)
at
1020B-G.
[36
] It
was also wrong to use the earnings of another advocate with a
practice (allegedly) comparable to that of the deceased to determine
the deceased’s probable earnings. Success at the Bar is,
unfortunately, very often solely measured by the size of the
advocate’s
income rather than the complexity and difficulty of
the cases which the advocate handles and the advocate’s
forensic ability.
The advocates’ profession is
sui
generis
and
it may fairly be described as one of, if not the most,
individualistic of professions. No two advocates are the same. No
two advocates have the same intelligence, legal knowledge and
expertise, forensic ability and personal qualities or the same
professional
and social advantages. All these factors play a role in
an advocate’s advancement at the Bar. This has been recognised
by the courts. In
Griffiths
v Mutual & Federal Insurance Co Ltd supra
at
546C-F the court said:
‘
In the
present case it was obviously not possible for the plaintiff herself
to state what she would have earned at the Cape Bar
as she had not
practiced at the Bar before. It is furthermore doubtful whether the
evidence of the earnings of other members of
the Cape Bar or of their
average or mean earnings would have been of much assistance in
determining the plaintiff’s probable
potential earnings.
Skills, fees and earnings at the Bar vary from one individual to the
other, there are many reasons for success
at the Bar and one member’s
earnings may not be a reliable yardstick of what another member would
earn. In
Reef
Lefebvre (Pty) Ltd v SA Railways and Harbours
1978
(4) SA 961
(W)
Coetzee
J said in a review of taxation involving counsel’s fees at 963H
that:
“
Perhaps more so than in other
professions, skills at the Bar vary enormously over a wide spectrum;
from fumbling apprenticeship
to sheer artistry. And so do the fees.
Particularly is this so at the junior Bar.”
In
view of the many imponderables, evidence of actual earnings at the
Cape Bar would probably not have been sufficient for a relatively
accurate actuarial calculation of the plaintiff’s future loss
of earning capacity.’
[
37] In
my view these remarks are particularly apposite on the facts of this
case. The two advocates are not comparable in age,
education,
background or experience. They were at different stages of their
professional careers when the comparison was made:
the deceased was
in his sixth year and Adv. De Wet in his second. The evidence does
not reveal the nature and quality of the
work which Adv. De Wet was
doing and the evidence is too vague to find that the deceased and
Adv. De Wet were involved in the same
area of practice or expertise
and doing the same amount and type of work. It anything it indicates
the apposite.
[38
] In
my view the approach of the appellants’ expert, Tonge, was
correct. The court should have determined the deceased’s
earnings at the time of his death by reference to his records and
then made whatever adjustments were required by the evidence.
This
is preferable to the evidence of the respondent’s expert which
is based on the vague and unsubstantiated evidence of
Adv. De Wet,
the flawed comparison between the deceased and Adv. De Wet’s
practices and earnings and which illogically uses
Adv. De Wet’s
gross earnings and the deceased’s expenses to calculate the
deceased’s net income.
[39
] In
order to arrive at the conclusion that the deceased would have earned
a net income of R515 000 in the 2005 tax year the court
a
quo
made
the following findings:
(1) it is common cause that the
deceased’s financial information was deficient;
(2) the deceased had a substantial and
busy practice;
(3) the deceased had a comparable
practice to that of Adv. Naudé de Wet;
(4) the deceased was paid in cash and
he cashed cheques for fees which are not reflected in his financial
statements;
(5) the deceased’s higher typing
costs were indicative of a busier practice than that of Adv. De Wet;
(6) the deceased had outstanding
debtors amounting to R282 633,80 at the time of his death.
These findings will be considered in
turn.
[
40] Reference
has already been made to the respondent’s failure to place
documentary evidence before the court to establish
essential facts.
It is not in issue that the deceased’s financial statements
for the 1998, 1999 and 2000 tax years are
reliable. The
respondent’s contention is that the deceased’s financial
statements for 2001, 2002 and 2003 tax years
are not reliable
because the deceased did not keep proper records of his fees.
Nevertheless, the respondent, as executrix in
the deceased’s
estate, signed the financial statements prepared by the deceased’s
accountant, Brino Britz, for the
2001, 2002 and 2003 tax years.
Each set of financial statements records that it was prepared from
the books, information and
explanations received from the taxpayer.
Brino Britz did not testify and there is therefore no explanation as
to the deficiencies.
If someone examined the deceased’s
practice books and records and concluded that a number of attorneys
owed the deceased
approximately R282 000 for fees earned during the
2000, 2001, 2002 and 2003 tax years; that the fees owing for 2001
were R27
882,00, for 2002 were R77 885,00 and for 2003 were R150
580,00 and that these fees were not reflected in the financial
statements
for those years the relevant documents should have been
produced and this should have been explained. There should also
have
been an analysis of the books and records to demonstrate that
these fees were still due and payable. According to Brino Britz’s
letter to the respondent dated 8 August 2003, from the deceased’s
books and records, he could not determine the debtors
at the end of
each year. He also stated that he understood that at the date of
the deceased’s death debtors amounted to
R289 000,00 but that
it was uncertain whether these debts could be recovered. It is
clear that Brino Britz did not establish
this figure. It also does
not appear that Mr Jacot-Guillarmod examined the books and records
for 2001-2003 and Mr Tonge, who
did, did not consider that the
records were deficient. From the deceased’s fee statements to
attorneys he was able to
compile a schedule of fees for 2002 and
2003 and calculate the deceased’s gross income (turnover) in
those years. As already
mentioned he concluded that the gross
income was understated in the financial statements. The court
a
quo
therefore
erred in concluding that the deceased’s records were
deficient.
[41
] The
objective facts relating to the deceased’s practice, practice
income and financial position contradict the findings
that the
deceased had a substantial and busy practice comparable to that of
Adv. De Wet. As already mentioned, the facts do not
support a
finding that the deceased’s practice was comparable to that of
Adv. De Wet and, in any event, this is not a proper
basis to
determine the deceased’s earnings. The findings of the court
a
quo
therefore
cannot be supported.
[42
] The
evidence pertaining to the cash received and cheques cashed by the
deceased is so vague that no finding can be based on it.
On the
strength of this evidence it was contended that the deceased received
substantial amounts of cash. Even if he did, this
cannot justify a
finding that the deceased earned substantial amounts which he did not
record his books and records.
[43
] The
typing costs also do not indicate that the deceased was earning
substantially more than was reflected in the financial statements
and
that the deceased had a busier practice than Adv. De Wet. This
finding cannot be supported.
[44
] Reference
has already been made to the unsatisfactory evidence relating to the
alleged outstanding debtors of R282 633,80. The
deceased’s
accountant, Brino Britz, stated in the letter that he was not able to
determine the debtors at the end of each
year and that he understood
that an amount of approximately R289 000,00 was owing. But the
person who determined these figures
did not testify to explain how
these figures had been determined. According to the statement handed
to the court, specific amounts
were owing by specific attorneys.
This demonstrates that the records were not deficient and the
attorneys could be pressed for
payment of the amounts owing. It is
astonishing that there is no evidence relating to the steps taken to
recover these large amounts
and what resulted from such steps. In my
view the evidence is unconvincing and improbable and the finding
based thereon cannot
be supported. To summarise, Mr Tonge’s
evidence which coherently and objectively reviewed the relevant facts
as they emerged
from the documents was more realistic and was
preferable to that of the respondent’s witnesses and should
have been accepted
by the court
a
quo
.
Remarriage
contingency
[45
] (1) In
argument the respondent’s counsel contend that the
remarriage contingency should be struck down by this court
because it is unconstitutional. They argue that the contingency
is unconstitutional because it offends against the equality
provisions of the Constitution; that essentially the court is
called upon to assess the woman’s prospects of remarriage
on
the strength of her appearance and then decide what the prospects
are of a man wanting to marry her in the future; that
the
application of a remarriage contingency is discriminatory and
demeaning. They point out that in some jurisdictions the
prospects of remarriage is not a permissible consideration and
in support of the argument refer to section 4 of the Law Reform
(Miscellaneous Provisions) Act of 1971 as substituted by section
3(3) of the Fatal Accidents Act of 1979 (United Kingdom);
22 Am
Jur 2d para 164 (United States of America); section 10(4)(h) of
the Northern Territory Compensation (Fatal Injury)
Act (Australia);
and the foreign judgments referred to by the court
a
quo
.
The appellants’ counsel did not deal with the issue in their
heads of argument or in oral argument.
(2) It is clear
from the judgment of the court
a
quo
that
it simply made provision for the contingency of remarriage. The
court did not refer to the respondent’s appearance
or express
a view as to whether she would remarry or not. It seems that the
court
a
quo
was
concerned simply with the reality of the respondent’s position:
she is a young woman with tertiary qualifications
qualified to
practise as an attorney and has a young child.
(3) According to
the respondent’s counsel the point was not pressed in the court
a
quo
because
the respondent wished to avoid an appeal on the issue. Despite the
fact that the court
a
quo
did
not assess the prospects of the respondent remarrying on the basis of
her appearance and the fact that this court has not seen
the
respondent (she was not present during the appeal) the respondent now
seeks to resurrect the argument.
(4) In the absence of full argument I
am not prepared to accede to the request. This court has not been
addressed on the law as
it is applied in the foreign jurisdictions
and what the reasons were for the statutory intervention.
(5) In South
Africa the contingency of remarriage is usually taken into account.
If the purpose of an award for damages for loss
of support if borne
in mind the possibility of the plaintiff remarrying is a very real
consideration.
The
possibility of a young widow remarrying shortly after the death of
her husband and receiving damages for loss of support calculated
over
a period of 40 years is completely unrealistic. Allowing for the
contingency is obviously realistic. In
Hulley
v Cox
1923
AD 234
at
244 the court said:
‘
The dependants are entitled to
be compensated for the pecuniary loss involved in a reduced income
and a restricted provision for
the supply of what they had been
accustomed to. But the object being to compensate them for material
loss, not to improve their
material prospects, it follows that
allowance must be made for such factors as the possibility of
remarriage’.
In
Peri-Urban
Areas Health Board v Munarin
1965
(3) SA 367
(A)
at
376B-D the court summarised the position as follows:
‘A
widow is therefore entitled to compensation for loss of maintenance
consequent upon the death of her husband, but any pecuniary
benefits,
similarly consequent, must be taken into account…. What she
has lost is a right to support … Marriage
prospects are
relevant because marriage would reinstate her right of support. The
propriety of taking such prospects into account
was recognised by
this court in
Hulley
v Cox,
1923
AD 234
at
244 and
Botha’s
case,
supra,
at
pp616-8.’
These, and other
judgments, reflect the approach of South African courts to the
question of damages: that they should be fairly
assessed in the
light of the realities of the case.
(6)
These
judgments do not suggest anything other than that the possibility of
remarriage must be taken into account. They do not,
in terms,
require that a trial court assess the likelihood of the plaintiff
remarrying on the strength of her physical appearance.
The
respondent has not referred to a judgment in South Africa where this
has been stated as a requirement in determining the possibility
of
the plaintiff remarrying. If it is the law that this be done I agree
with the respondent that this would be offensive and should
not be
part of the law. But the respondent has not been so assessed in this
case and this court has not seen her. It therefore
plays no role in
the case. It is a simple actuarial contingency.
[46
] In
the premises the appeal must be upheld and the award of the trial
court must be set aside and substituted with a new award
calculated
on the basis of the deceased’s earnings as set out in this
judgment. The facts relating to the plaintiff and
her earnings and C
and the various contingencies to be taken into account are not
contentious. The relevant facts to be taken
into account are as
follows:
The
respondent (plaintiff)
(1) The respondent was born on 25
December 1972 and is qualified as an attorney. Since about 2001, the
respondent has practised
at Brugman’s Attorneys. She became a
director of the firm before the trial in 2006.
(2) During the
2003, 2004, 2005 and 2006 tax years the respondent’s gross
income was R167 268,00, R190 564,00, R262 000,00
and R306 972,00
respectively.
(3) The respondent
would have interrupted her professional career for two years after
the birth of C on 21 September 2003 and thereafter
continued to
practise as an attorney until she retired at the age of 60.
C
C
was born on 25 December 2003 and would have been dependent on the
defendant until the completion of her tertiary education at
the age
of 22 (i.e. 31 December 2025).
Deceased
(1) The deceased was born on 1 January
1971 and after qualifying as an advocate practised as such as a
member of the Pretoria Society
of Advocates from July 1997 until his
death on 12/13 March 2003.
(2) The deceased would have continued
to practise as an advocate until the age of 70.
(3) According to his financial
statements the deceased’s gross and net income during the years
he practised were as follows:
Year
Gross
Income
Expenses
Net
Income
1998
R61
147
R60
611
R563,33
1999
R113
360,13
R94
896
R18
463,33
2000
R124
457,76
R105
198
R19
258,37
2001
R143
726
R93
762
R49
963,99
2002
R205
917,39
R146
689
R59
228,11
2003
R240
584
R144
283
R96
301,59
(4) The figures for the deceased’s
gross income in 2002 and 2003 must be substituted with the figures of
R297 071 and R277
830 respectively. (Calculated by Mr Tonge from the
information in the deceased’s fee statements.)
(5) The deceased’s
gross income would have increased at the rate of 20 % per annum for
the next four years (i.e. until his
10
th
year at the Bar) and thereafter at the rate of inflation being 7 %
per annum until he reached the age of 70. The deceased’s
expenses would have increased at the same rate of inflation.
Contingencies/Allowances
(1) A contingency of 7,5 % should be
applied to the respondent’s past loss of support.
(2) An allowance should be made for a
50 % chance of a second child.
(3) A contingency of 17,5 % should be
allowed in respect of the respondent’s prospects of remarriage.
(4) A contingency of 17,5 % should be
applied in respect of future loss of support.
Recalculation
of the plaintiff’s damages
[47
] During
the hearing it became clear that if the appeal is upheld and the
respondent’s damages must be calculated on different
facts an
actuary will be required to do the calculation. Accordingly the
parties agreed that if the appeal is upheld the court
must give
instructions to an actuary to calculate the quantum of the
respondent’s claims. On 5 September 2008 the parties
agreed
that the court should furnish actuary Robert Koch with the necessary
instructions and that he should be requested to send
his account to
the respondent’s attorney, Adams & Adams. On 23 February
2009 the court faxed to Robert Koch its draft
judgment and requested
him to recalculate the damages in the light of the judgment. The
court received Robert Koch’s calculations
on
27 February 2009. As there appeared to be a
misunderstanding about the court’s instructions
the court sent
a fax to Robert Koch on 6 March 2009 to clarify its instructions and
request a recalculation and on 26 March 2009
received the final
calculations. These are incorporated in this judgment. The
correspondence between the court and Robert Koch
is incorporated in
a bundle in the court file marked ‘X’.
Order
[48
] I The
respondent’s application in terms of Rule 30(1) (to set aside
the appellant’s applications for the allocation
of a date of
the hearing of the appeal; for condonation of the failures to
apply timeously for the allocation of a date for
the hearing of the
appeal; to file timeously the record of the appeal and to
reinstate the appeal) is dismissed with costs,
such costs to
include the costs consequent upon the employment of two counsel
and the wasted costs of the postponement of
the application on 14
April 2008 which shall also include the costs consequent upon the
employment of two counsel.
II The appellants’ failure to
apply timeously for a date for the hearing in accordance with Rule
49(6) is condoned.
III The appellants’ failure to
deliver timeously the copies of the record in accordance with Rule
49(7) is condoned.
IV The appellants’ appeal is
reinstated.
V The appeal is
upheld and the orders that the appellants (defendants) pay to the
respondent (plaintiff) R2 198 514,00 for loss
of support
(and
interest on R2 198 514,00
a
temporae morae
)
are set aside and substituted with the following orders:
‘(a) Payment
of the sum of R735 192,63 which is made up as follows:
(i) funeral expenses R9 111,63;
(ii) plaintiff’s
loss of support R274 364,00;
(iii) C H
Oosthuizen’s
loss of support
R451 717,00;
(b) Payment of
interest on the amount of R726 081,00 (i.e. R735 192,63 less the
funeral expenses of R9 111,63) calculated at
the rate of 15,5 % per
annum from the date of this judgment until the date of payment.’
VI The respondent is ordered to pay
the costs of the appeal which costs shall include the costs
consequent upon the employment of
two counsel.
_______________________
B.R. SOUTHWOOD
JUDGE OF THE HIGH COURT
I agree
________________________
N.M. MAVUNDLA
JUDGE OF THE HIGH COURT
I agree
________________________
P.M. MABUSE
ACTING JUDGE OF THE HIGH COURT
CASE NO:
A671/07
HEARD
ON: 3 September 2008
FOR
THE APPELLANTS: ADV. R. BUDHESI SC
ADV.
M. ZULU
INSTRUCTED
BY: Mr S.M. Dawood
FOR
THE RESPONDENT: ADV. D.A. NESER SC
ADV.
E.C. LABUSCHAGNE SC
INSTRUCTED
BY: Ms. N. Koch of Adams & Adams
DATE
OF JUDGMENT: 2 April 2009