About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Supreme Court of Appeal
SAFLII
>>
Databases
>>
South Africa: Supreme Court of Appeal
>>
1987
>>
[1987] ZASCA 143
|
|
Mutual and Federal Insurance Company Ltd. v Swanepoel (446/1986) [1987] ZASCA 143; [1988] 4 All SA 228 (AD) (30 November 1987)
Case No 446/1986
IN THE
SUPREME COURT OF SOUTH AFRICA
APPELLATE DIVISION
In the appeal of:
MUTUAL AND FEDERAL INSURANCE
COMPANY
LIMITED
Appellant
and
PIETER SWANEPOEL
Respondent
CORAM
: RABIE ACJ, CORBETT, VILJOEN, VAN
HEERDEN, JJA et STEYN AJA
HEARD
: 12 NOVEMBER 1987
DELIVERED
: 30 NOVEMBER 1987
JUDGMENT
/
VAN HEERDEN JA
...
2.
VAN HEERDEN JA
:
As a result of a collision which took place between a motor vehicle driven by
the respondent (the plain-tiff in the court a
quo
) and a second vehicle
the respon-dent sustained serious bodily injuries, rendering him a permanent
quadruplegic. The second vehicle
was insured by the appellant (the defendant in
the court a
quo
) in terms of Act 56 of 1972 and the respondent proceeded
to claim damages from the appellant in the Witwatersrand Local Division,
alleging that the collision was due to the negli-gence of the driver of the
insured vehicle. Apart from one aspect, the claim was
eventually settled by the
parties who in effect agreed that the total damages suffered by the respondent
amounted to R750 000. The
respondent con-tended, however, that the sum of R100
000 should be de-ducted from such damages. This sum represented the capi-talised
value of a pension accruing to the respondent. The appellant consequently
unconditionally undertook to
/pay ...
3.
pay to the respondent the sum of R650 000. It was furthermore
agreed that an additional amount of R100 000 would be payable to the
respondent
should it be found that the pension was not deductible from the respondent's
total damages. The matter accordingly went
to trial on this issue only.
The salient facts relating to the pension were summarised as follows by the
court a
quo
:
"(a) At the time of the collision plaintiff was performing his military
service as a national serviceman in the Citizen Force in terms
of the Defence
Act.
(b) His disability was caused by military
service as contemplated by Section 2
(a) (iii) of the Military Pensions Act
no. 84 of 1976.
(c)
As a result of the bodily
injuries sus-tained by plaintiff and his ensuing disability he applied for and
was awarded a pension.
(d)
The degree of
disability and the amount of the award was determined by the Director-General,
Health and Welfare,
in terms of Sections 6 and 7 of
the
Military Pensions Act no. 84 of 1976.
(e) The capitalised value of the pension so
/determined ...
4.
determined is R100 000.
(f)
The plaintiff made no
contributions to the fund, either by actual payment or by way of deductions from
his monthly pay.
(g)
The pension gratuity
allowance and the cost of any medical treatment, the amount and extent of which
is deter-mined by the Director-General,
is paid from monies appropriated by
Parliament for this purpose in terms of Section 3 (1) of the
Act.
(h) The plaintiff did not, in computing his
damages and in particular his claim for loss of earnings or loss of earning
ca-pacity,
rely upon his contract of ser-vice (if it can be termed that) with
the Defence Force.
His claim is based on the premise that he would have taken up employment in
the private sector upon completion of his two years' national
service."
In terms of s 3 (1) of the Military Pensions Act 84 of 1976 (the "Act") the
Minister of Health and Wel-fare may, with the concurrence
of the Minister of
Finance and out of moneys appropriated by Parliament for the pur-pose, pay
inter alia
pensions to members of the Citizen Force who suffer from a
pensionable disability. S 4,
/read ...
5.
read with s 1, provides that a
member who suffers from a
pensionable disability which has been determined at
not
less than 20% in terms of the Act shall be entitled to
an annual
pension which shall be calculated in accordance
with formula A x B. In this
formula A represents the
amount which the Minister of Health and Welfare
may, with
the concurrence of the Minister of Finance, determine
from time
to time, and B represents the percentage at
which the pensionable disability
of a member has been
determined. In terms of s 7 (1) and (5) the degree
of
such disability is to be determined by the Director-
General of Health
and Welfare by comparison, subject
to the provisions of s 7 (6), of the
physical and mental
condition of the applicant for a pension with that of
a
normal and healthy person of the same age and sex, and
by establishing
as nearly as possible the percentage by
which his physical and mental
condition differ in accord-
ance with the Schedule to the Act from that of such a
/normal ...
6.
normal and healthy person as a result of his disability. In so far as s 7 (6)
is relevant for present purposes, it provides that the
degree of disability
which corresponds with a disability specified in the Schedule, shall be
determined at the percentage of disability
specified in the Schedule, and that
the degree of the disability of a member shall be determined without regard to
his earning capacity
in any particular occupation.
The Schedule prescribes various percentages of disability for specified
injuries, i e, loss of upper and lower limbs or parts thereof,
defective vision,
defec-tive hearing, facial disfigurement, other disabilities and a combination
of certain disabilities. Thus a
100% disability is prescribed for the loss of
both feet or hands, the total loss of sight, total deafness and wounds or
injuries
resulting in the member being permanently bed-ridden.
The court a
quo
was of the view that the true
/test ...
7.
test whether benefits accruing to a plaintiff as a result of a
delict fall to be deducted from the damages suffered by him "is simply
whether
it can be said that such pay-ments are made to compensate the victim for the
loss which he suffered as a result of the impairment
of his capacity to earn."
Having analysed a number of the provisions of the Act, the court concluded that
the pension payable to
the respondent was not intended to be a substitute . for
earnings, but "a gratuitous payment made from consider-ations of compassion
and/or welfare". Accordingly the court awarded the respondent a further amount
of R100 000 but granted the appellant leave to appeal
to this court.
Counsel for the appellant submitted that the rule that so-called extraneous
benefits should be disre-garded in assessing recoverable
damages is based upon
two fundamental propositions, viz i) that there is a wrong-doer who ought not,
on moral and public policy grounds,
to benefit from the largess of another, and
ii) that the
/person ...
8.
person who confers the benefit on the plaintiff is a third party. In
casu
, so it was further submitted, these pro-positions do not apply. This
is so because the compensa-tion is not to be paid by the wrongdoer
but by the
Motor Vehicle Insurance Fund whilst the pensionable allowance payable under the
Act also flows from the State's coffers.
In this regard counsel for the appellant argued that the
ratio
of the
collateral source rule appears from the following
dictum
of Lord Reid in
Parry v Cleaver
(1969) 1 All E R 555
, 558:
"It would be revolting to the ordinary man's sense of justice, and therefore
contrary to public policy, that the sufferer should have
his damages reduced so
that he would gain nothing from the benevolence of his friends or relations or
of the public at large, and
that the only gainer would be the wrongdoer."
I do not think that Lord Reid had in mind that charitable gifts to the victim
of a wrong should be dis-regarded only if the actual
wrongdoer is the person
liable for the damages suffered by the victim. If, for instance,
/an ...
9.
an employer is vicariously liable for a delict committed by his employee,
such gifts should clearly not be deducted from the victim's
damages. The same
holds good if dama-ges may be claimed from the wrongdoer's insurer or, for that
matter, from any other person against
whom an action for damages lies (cf
Browning v War Office
(1962) 3 All E R 1089
, per Diplock LJ, at pp
1094-5).
Nor does the fact that the defendant is the very person who conferred a
benefit upon the plaintiff necessarily prevent the benefit
from being regarded
as extraneous. It is trite law that insurance benefits are not to be set off
against a plaintiff's damages. If,
therefore, a plaintiff takes out an accident
policy with company A, and is then injured under circumstances giving rise to an
action
for damages against that company as the third party insurer of the
wrongdoer, any payment in terms of the policy will still be
res inter alios
acta
as far as the claim for damages is concerned. This is so because
/the ....
10.
the capacity in which company A becomes obliged to pay the insurance benefit
is different from that in which it be-comes liable for
the damages suffered by
the plaintiff.
In
casu
there is moreover the consideration that the State which is
liable for the payment of the pension cannot be equated with the Motor
Vehicle
Insurance Fund, a body corporate estabiished in terms of s 5 of Act
56 of
1972 to administer third party insurance through authorised insurers. In any
event, it is the author-ised insurer who is primarily
liable for recoverable
damages caused by the negligence of the owner or driver of an in-sured vehicle,
and who is the real defendant
in a matter such as the present.
The main submission of counsel for the appel-lant, as I understood it, was
that in so far as the pen-sion to which the respondent
has become entitled is
in-tended to compensate him for loss of earnings, the benefit must be deducted
from his patrimonial loss,
and that in
/so ...
11.
so f ar as the pension serves to compensate the appellant for pain and
suffering, disability etc, that component of the pension falls
to be deducted
from his general damages; the result being that the whole pension is de-ductible
from the totality of the appellant's
damages.
As regards compensation for loss of earnings or earning capacity, counsel for
the appellant relied upon the decision in
Dippenaar v Shield Insurance
Company Ltd
1979 (2) SA 904
(A), for the propositions i) that all a
defendant in a delictual action has to do is to make good the difference between
the value
of the plaintiff's estate after the commission of a delict and the
value it would have had if the delict had not been committed,
and ii) that the
real question in determining whether a benefit is extraneous is whether it flows
from the same source as the plaintiff's
wages at the time of the commission of
the delict.
In
Dippenaar
's case it was common cause that
/the ...
12.
the plaintiff, who had been injured in a collision caused bythe negligence of
a driver of a vehicle which was in-sured by the defendant,
was entitled to claim
damages from the defendant. The plaintiff was a civil servant who throughout the
years that he had been employed
as such had contributed towards a pension fund
for State employees. Had the plaintiff not been injured he would have remained
in
the civil service for a further period of seven years, but the collision
rendered him totally unemployable. In formulating his claim
for damages the
plaintiff assessed his loss of earnings on the basis of the income which he
would have earned during the aforesaid
period. The only dispute between the
parties was whether the value of the plaintiff's retirement benefits, received
and receivable
from the State Pension Fund. should be deducted from his
capitalised loss of earnings.
In holdina for the defendant Rumpff CJ said (at p 920):
/"When ...
13.
"When the capacity to earn is sought to be proved by the plaintiff by means
of a con-tract of employment, the monetary value of the
contract can only be
assessed when one looks at the contract as a whole. In this regard it seems
clear that, if in terms of such
contract there is a compulsory deduction from
salary plus a contribution by the employ-er in order to pay the employee money
as sick
leave or as a pension, it is the intention of the parties that that
money shall be paid when it is due, in terms of the contract.
In fact the
'income' of the employee is in terms of the contract not confined to his salary
(in its ordinary connotation) but includes
also sick pay or pension when such
pay or pension is due. If a monetary value is sought to be put on the earning
capacity based on
this con-tract, every benefit received under the con-tract,
such as a pension, must therefore be considered, as was done by the trial
Court
in the present case. If the plaintiff were to be allowed to say that, although
the pension is included in the monetary value
of the con-tract as at the date of
the delict, the defend-ant must nevertheless pay him as though he had lost this
benefit, the result
would be so startling that one wonders why the problem had
caused such conflicting views."
In my view this passage relates to the a case in which a plaintiff assesses
his loss of earnings on the basis that but for his injuries,
he would have
/continued ...
14.
continued to earn income in terms of an existing contract of employment. In
such a case benefits due under or arising from that very
contract fall to be
deducted from the loss of earnings. The passage is therefore not authority for
the wider proposition that merely
because at the time of the delict a plaintiff
was in receipt of wages, a benefit flowing from the relationship of employ-ment
accrues
to the benefit of the defendant.
In the present case the respondent did not assess his loss of earnings on the
basis of what he would have earned had he remained "employed"
by the Defence
Force. His claim was in fact based on the premise that he would have been
employed in the private sector upon completion
of his national service. As the
court a
quo
correctly pointed out, the period served as a national
serviceman and the conditions and terms of his service were completely
irrelevant
to his claim for loss of earn-ings. The actual decision in
Dippenaar
's case is
/consequently ...
15.
consequently no authority for holding that any part of
the
respondent's pension must be deducted from his loss
of earnings or the total
damages suffered by him.
Counsel for the appellant, however,
placed
particular reliance on the following
dictum
of Rumpff CJ ;
(at p 917):
"It is correctly argued that, in a
case of personal injury as a result of a
delict, the Court must calculate, on the
one hand, the present monetary value of
all that the plaintiff would have brought
into his estate had he not been
injured,
and, on the other hand, the total present
monetary value of all that the plaintiff
would be able to bring into his estate
whilst incapacitated by his injury."
It is in the first place clear that the Chief Justice did not intend to
formulate an inflexible rule. This appears from a later passage
in his judgment
where he states (at p 918) that the notion of "capacity to earn" excludes
receipts and benefits from benevolence
or ordinary contracts of insurance, and
that that is the real
/reason ...
16.
reason why such receipts and benefits are generally ex-cluded. In the second
place it should be emphasised that the
dictum
relates only to Aquilian,
or patrimonial, loss. For it is only in regard to such loss that a com-parison
can be made between the
monetary value of a plaintiff's estate before the
commission of a delict and its value as a result of the delict. In particular,
freedom from pain and the enjoyment of the pleasures of life do not have a
monetary value which form part of the
universitas
of a human being.
Payment of general damages therefore does not fill a gap in the estate of the
victim of the tort, but affords him
"the comfort which is assumed to flow from
being put in the possession of a sum of money" (
Hoffa, N 0 v S A Mutual Fire
and General Insurance Co Ltd
1965 (2) SA 944
(C) 954).
It is not clear to me whether in the view of Rumpff CJ all benefits conferred
upon a victim of a wrong to compênsate him for
his pecuniary loss, and
which do not
/partake ...
17.
partake of the nature of benevolence or insurance benefits,
must be set
off against the victim's patrimonial loss.
On the assumption that that was
indeed the approach of
Rumpff CJ, I now turn to the guestion whether the
pension
accruing to the plaintiff is to be regarded as compensa-
tion for
such loss, and more particularly, loss of earn-
ing capacity. I have already
pointed out that s 7 (6)
(f) of the Act enjoins the Director-General of Health and
Welfare not to
have regard to the earning capacity of an
injured member in any particular occupation when deter-
mining his degree
of disability. Counsel for the appel-
lant submitted that the subsection does not preclude the
Director-General from having regard to earning capacity
generally, but merely excludes consideration of such capa-
city in regard to a "particular occupation". The sub-
mission is without
substance since the concept of earning
capacity does not exist in
vacuo
, but is always related
to a particular person and a particular sphere of human
/endeavour ...
18.
endeavour. S 7 (6) (f) consequently affords a strong indication that the
Legislature did not intend a pension under the Act to compensate
an injured
member for loss of earning capacity as such. That this was indeed not the
Legislature's intention, is borne out by the
Schedule to the Act. Thus, the
percentage of disablement ascribed to the loss of all phalanges of three fingers
of the right hand
is 30% irrespective of the use the member in-tended to make of
the hand in any occupation. It is hard-ly necessary to say that such
a loss may
not at all affect the earning capacity of, say, a lawyer, whilst it would spell
an end to the career of a concert pianist.
Again, the loss of an eye, resulting
in a 50% disability, may in many occupations have no effect on a member's
earning capacity.
And as regards the loss of both testicles (50%) or one
testicle (20%), it is indeed difficult to conceive of a situation in which
the
disability would preclude the injured member from pursuing any legitimate
remunerative
/calling ...
19.
calling.
I am therefore of the opinion that a pension under the Act cannot be viewed
as compensation for loss of earnings or earning capacity.
It is rather in the
nature of a
solatium
for the totality of the consequences of the
disablement, and particularly those that cannot readily be measured in monetary
terms.
The final question is whether the pension awarded to the respondent, or part
thereof, should not be deducted from the respondent's
non-pecuniary loss. In
this regard it should be borne in mind that a claim for such loss is not an
Aquilian action (
Government of the Republic of South Africa v Ngubane
1972 (2) SA 601
(A) 606), and that, as has often been stated, an award of money
cannot really compensate a plaintiff for pain and suffering, loss
of amenities,
disfigurement, etc. There is indeed no norm for determining in monetary terms
the extent of such general damages. As
was
/said ...
20.
said by Windeyer J in
Papanayioutou v Heath
(1970) A L R
105, 112 (quoted by Luntz,
Assessment of Damages
, 2nd
ed, p 158, n 6):
"What is a reasonable sum for general damages for personal injuries cannot be
measured and tested as a reasonable price can be, by
the experience of the
market-place."
It follows that there may be even amongst lawyers a marked difference in
their assessment of the monetary va-lue to be placed on loss
of a non-pecuniary
nature. It is for this reason that a court of appeal will not interfere with an
award of general damages made
by a trial court mere-ly because it is considered
to be too high or too low. And in making such an award a court does not have
regard
only to the interests of the plaintiff, it also bears in mind that too
heavy a financial burden should not be placed upon the defendant.
In consequence
it cannot be said that a plaintiff is over-compensated if, when assessing his
general damages, no regard is had to
an extraneous be-nefit conferred upon him
for the purpose of ameliorating
/pain ...
21.
pain and suffering, loss of amenities, disability, etc.
I am accordingly of the view that in so far as the pension accruing to the
respondent serves to com-pensate him for the intangible
consequences of his
dis-ability, it should not be deducted from his non-pecuniary loss. Andsince it
is impossible to determine to
what ex-tent a pension conferred under the Act is
intended to or serves to compensate a member for pecuniary loss, and more
specifically
loss of earnings, the court a
quo
cor-rectly held that the
respondent's pension should not be set off against the totality of the damages
sustained by him.
The appeal is dismissed with costs.
H.J.O. VAN HEERDEN JA
RABIE ACJ
CORBETT JA
CONCUR
VILJOEN JA
STEYN AJA