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1991
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[1991] ZASCA 113
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President Insurance Company Ltd. v Mathews (531/89) [1991] ZASCA 113; [1992] 1 All SA 179 (A) (20 September 1991)
531/89 N v H
IN THE SUPREME COURT OF SOUTH AFRICA
(
APPELLATE DIVISION
)
In the matter between
PRESIDENT INSURANCE COMPANY
LIMITED
Appellant
and
HENRY EDWARD MORLAND
MATHEWS
Respondent
CORAM
: VAN HEERDEN, SMALBERGER,
et
GOLDSTONE, JJA
HEARD
: 23 August 1991
DELIVERED
: 20 September 1991
JUDGMENT
SMALBERGER, JA :-
It will be convenient, for the purposes of
this judgment, to refer to the parties as in the Court
a
quo
. The
plaintiff (respondent) was severely
injured in a motor vehicle collision on 8 November
2/
2
1986. It is common cause that the collision occurred in circumstances
rendering the defendant (appellant) liable to compensate the
plaintiff for any
damages sustained by him. In due course the plaintiff instituted an action for
damages against the defendant in
the Witwatersrand Local Division. His claim for
damages, under various heads, totalled R927 317-63. Prior to the eventual trial,
agreement was reached in respect of certain of the amounts claimed by the
plaintiff. This left only a limited number of issues for
decision at the trial.
One such issue related to the plaintiff's claim for future loss arising out of
his incapacity to carry on
his farming activities. In respect thereof the
learned trial judge, GOLDBLATT, AJ, awarded the plaintiff the sum of R317 349
for
"future loss of earning capacity". It is this award which forms the subject
of the present
3/
3 appeal, the reguired leave to appeal having been granted by
this Court.
The plaintiff is a farmer. He is at present 57 years of age.
Apart from the period 1976 to 1982, when he embarked upon an engineering
venture, he has been farming all his adult life. He acquired the family farm
"Silverton", in the Lichtenburg district, from his father
in 1961. Since then he
has purchased three adjoining farms. His farming operations are of a general
nature and include both crop
and livestock farming. Prior to the collision the
plaintiff was actively engaged in the running of his farms. He personally
supervised
the work being done by his staff on the lands. He also carried out
all the mechanical repairs on his vehicles and machinery. These
included 6 motor
vechicles, 12 tractors, and various harvesters, planters, trailers,
4/
4
ploughs and other assorted farming implements. To
this end he had a fully
equipped workshop on the main
farm. He was qualified to do mechanical work
by
dint of experience gained over the years. His
health was excellent and
he worked a full day and often
a full week. The work he did involved
physical
strength and vigour. He had to climb under and over
heavy machinery,
assume awkward positions while doing
mechanical repairs, and was required to
walk long
distances over rough and uneven ground, much of it
ploughed
lands.
The plaintiff's injuries and their
sequelae
are summed up as f ollows by the judge a
quo
in his
judgment:
"Consequent upon the collision the plaintiff suffered an abdominal injury, a
chestwall injury, a head injury, a serious fracture
of his hemi-pelvis, and an
intra-articular fracture of his left hip. His left leg is now some 3 cm shorter
than the right leg and
5/
5
he has a blurring of vision in his left eye due to a corneal scar.
It was common cause that the plaintiff will eventually develop post-traumatic
osteoarthritis of his left hip joint. This is a slowly
progressive condition
resulting in increasing pain and stiffness of the hip. It was agreed by the
medical experts that treatment
in the first instance would be conservative in
nature and would involve the use of analgesics, anti-inflammatories and
physiotherapy
from time to time. Thereafter, so the experts say, the plaintiff
would at about 60 years of age, require a hip
replacement."
The plaintiff's
evidence, supported by expert
medical testimony, is to the effect that he will
neither now nor in the
future be able to perform
adequately the functions he previously performed on
his
farms. He cannot traverse rough or uneven ground on
foot and is unable to properly supervise work on the
lands. He can no longer carry out the mechanical
repairs he did previously. To the extent that he
was able to do anything
at all in this regard he was
6/
6
"more of a ,nuisance than a help" to his son
who
temporarily assisted him in his farming operations
after the
collision. That the plaintiff is
handicapped to the extent set out above is
not
seriously in dispute. The plaintiff contends
that because of his
physical disability he requires the services of a farm manager-cum-mechanic to
do the work he previously did in
order that he may continue with his farming
operations. His claim for his resultant future loss is based upon the cost of
employing
someone in that capacity until the age of 67 years, it having been
agreed between the parties that, but for his injuries, the plaintiff
would have
continued to perform his pre-collision duties and functions until that age. The
evidence at the trial was that the then
cost of employing such a person would
amount to R58 600 per annum. The plaintiff concedes that he will still be
7/
7
able to take decisions affecting the overall
farm
strategy as opposed to overseeing the day to day
running of the
farming operations. The plaintiff
also concedes that he has not suffered any
impairment
of his expertise and ability in engineering design
which led
him to embark on his earlier manufacturing
venture. The judge a
quo
accepted the
plaintiff's evidence, and based his award for future loss of
earning capacity on actuarial calculations of the value at the time of
the trial
of the cost of employing a manager/mechanic at R58 600 per annum. The essential
issue on appeal is whether or not that
was a proper bais on which to calculate
the loss.
The plaintiff's action is one for damages based on negligence. Under the
lex Aquilia
, as developed in our law, he is entitled to be compensated to
the extent that his patrimony has been diminished in
8/
8
consequence of such negligence. This also takes into account future loss. His
damages therefore include any loss of future earnings
or future earning capacity
he may have suffered. (See
Santam Versekeringsmaatskappy Bpk v Byleveldt
1973(2) SA 146 (A) at 150 A - C. ) A precise mathematical calculation of such a
loss is seldom possible because of the large number
of variable factors and
imponderables which come into play. It is recognised, however, that "[T]he
monetary value of loss of earning
capacity may be proved in a variety of ways,
depending on the facts of each case". (Per RUMPFF, CJ, in
Dippenaar v Shield
Insurance Co Ltd
1979(2) SA 904 (A) at 917 F.)
There is no reason in
principle why, in an appropriate case, the cost of employing a substitute should
not form the basis of a claim
for damages
9/
9 arising from a plaintiff's inability to carry on his
pre-collision trade or profession. See Luntz,
Assessment of Damages for
Personal Injury and Death
, 2nd edition, 259. Thus a doctor who has been
temporarily incapacitated and thereby prevented from conducting his practice
could
recover the cost of employing a
locum tenens
, assuming always that
the cost of employing such
locum tenens
would be less than the loss of
income or profits he would otherwise have sustained. By adopting such course he
is effectively mitigating
his damages, as he is obliged to do. He would,
however, be precluded from claiming compensation for loss of profits over the
same
period unless he can prove that by reason of his personal absence his
profits have fallen below their proper level. See Munkman,
Damages for
Personal Injuries and Death
, 8th edition, 85. The same position
10/
10 would pertain in the case of a commercial traveller who
as a result of his injuries is no longer able to drive his motor car. He
would
be entitled to recover the cost of employing a substitute driver. There is no
reason why this principle should not also be
extended, where the facts warrant
it, to future loss. To take the case of the commercial traveller, if his
incapacity is permanent,
why should the cost of employing a substitute driver in
future not also be recovered? His future earnings would be reduced to the
extent
of the cost of employing such driver. The recovery of such cost would put him
back, as far as his f uture earnings are concerned,
in the position he would
have been but for his injuries (cf
Daly v General Steam Naviqation Co Ltd
[1980] 3 ALL ER 696
(CA).) Whether such claim would properly be brought under
the head of loss of earning capacity or some separate head
11/
11
of damage matters not for the present - the entitlement thereto remains. (I
pause here to mention that a claim for a substitute is
properly made out on the
plaintiff's pleadings.) Whether or not a plaintiff will be entitled to
compensation on this basis must needs
depend upon the facts of each particular
case.
The above principle appears to underlie the decision of the Rhodesian
Appellate Division in the case of
Estate De Villiers v Bell
which is only
reported in Corbett and Buchanan,
The Quantum of Damages in Bodily and Fatal
Injury Cases
, vol 2, 454. Bell was a farmer who lost a leg in a shooting
incident which gave rise to a claim for damages by him. He was awarded
compensation for future loss of earnings. With regard to the computation thereof
the following was said on appeal :
12/
12
"Expert evidence was led, it was scarcely necessary to do so, that an active
farmer who lost the use of one leg would unquestionably
have his capacity as a
farmer diminished. He certainly would not be as efficient a farmer as he would
be if he had the use of both
his legs. Farming, it is common knowledge, is an
occupation which requires the farmer to be reasonably mobile in moving about his
farm, and a farmer who has only one leg is not likely to be as efficient as a
farmer who is not crippled in any way. The trial Court
accepted this.
The question is: How to compensate a farmer who has lost a leg for the loss
of the use of that leg? The suggestion by the expert was
this: If the respondent
employed an extremely good African assistant from an Agricultural College or an
European assistant, the engagement
of this assistant would make up the loss in
efficiency suffered by the respondent as a result of his injuries. In other
words, the
loss of a leg could be put right, so far as future earning capacity
is concerned, by the employment either of a skilled African or
a skilled
European assistant Now, it seems to
me that the cost of employing an assistant is a sensible way of measuring in
terms of money the diminution of the respondent's future
earning capacity. It
has the effect of putting him back, as far as money can do so, into the position
he would have been in had
13/
13
he had two good legs. The employment of the assistant makes up for the loss of
the leg.
It has been argued that the respondent may adopt a different type of farming
from that previously practised and that, if he does
this, he may not require an
assistant at all. But that is neither here nor there in my estimation. As a
farmer he has undoubtedly
suffered a diminution of his earning capacity as a
result of losing a leg and the only way to compensate him for the loss of that
leg is, as is suggested by the expert evidence, to provide him with sufficient
damages to enable him to employ an assistant"
On
behalf of the defendant it was contended that this
approach was not approved
by this Court in
Blyth v Van
den Heever
1980(1 ) SA 191 (A) . I
do not agree.
What was said in
Blyth's
case at 226 E - H was the
following:
"The claim in respect of reduction in earning capacity (head (4)) was computed
in appellant's heads of argument and in the evidence
on the following basis.
Appellant is a farmer. Whether he continues with his present disablement (with
the possibility of slight
improvement as a result of reconstructive surgery) or
opts for
14/
14
amputation and an electronic arm, he will be severely handicapped in his
day-to-day farming activities. In order to compensate for
this he could be
provided with a semi-skilled Black assistant to supplement this deficiency in
his working effectiveness. The claim
of R52 630 represents the capitalized cost
of providing such an assistant for appellant until he reaches the age of 70
years. I do
not think this is a realistic basis for computing this head of
damage. In the ordinary course of his farming activities, appellant
would
probably have the necessary assistance from his farm labourers in any event. In
argument appellant's counsel conceded this
and contended that the Court should
award an arbitrary amount to compensate appellant for his working disability and
his disadvantage
in the labour market should he, owing to unforeseen
circumstances, be foreced to give up farming on his own account. Appellant's
counsel suggested an amount of R15 000. Respondent's counsel, on the same basis,
submitted that R5 000 would be adeguate compensation.
In my view, an award of R7
500 would provide fair and adequate compensation under this
head."
As appears from the above passage, this Court
did not
express any view on the principle of whether or not the
cost of
substitute labour could form the basis for
15/
15 computing a claim for future loss based on an inability
to work as before. It did no more than hold that on the facts of that case
it
was not a realistic approach to adopt. It follows, in my view, that in an
appropriate case, where the facts warrant it, an award
for future loss arising
from an incapacity to work or earn as before, can be made on the basis of the
cost of substitute labour.
I turn now to the facts of the present matter. It
is not suggested that it was unreasonable for the plaintiff to have continued
farming.
It is true that in all but one of the years immediately preceding and
following upon the collision the plaintiff farmed at a loss.
This was apparently
due to a protracted drought. Farming, being cyclical in nature, is heavily
dependent for success upon the elements
being favourable. In good years the
16/
16 plaintiff's farms are capable of earning substantial
profits. When the plaintiff testified at the trial he was expecting a net
profit
of approximately R300 000-00 for that year. (His son had been assisting on the
farms doing the work the plaintiff had done
previously.) His evidence in that
regard was not challenged. There was thus no call for the plaintiff to leave his
farms and seek
employment elsewhere.
The plaintiff's disability goes to the very root of his working ability
relative to the earning of farming income and the curtailment
of farming
expenses, particularly with regard to mechanical repairs. He is no longer
capable of his previous input into the whole
farming operation. In order to best
preserve his capital assets and to ensure maximum profitability he needs
substitute labour to
perform the tasks which he can no longer do. On the
evidence this will
17/
17 reguire the services of a manager/mechanic. His losses,
without such substitute labour, could reasonably and probably be expected
to be
greater than the cost of employing such labour. By employing substitute labour
he would in effect be mitigating his loss.
The defendant contends that if the
plaintiff is compensated on the basis on which the trial judge awarded him
damages he will be better
off than before the collision as, notwithstanding his
disability, he is capable of making some contribution to the overall farming
operations. Notionally this is so. There could conceivably be instances where a
plaintiff's residual ability to work could complement
the efforts of a
substitute to the extent of generating greater profits than would have been
achieved through the labours of the
uninjured plaintiff alone. In such a
18/
18 case an adjustment would be required to offset such
benefit (or potential benefit) against the cost of
employing substitute
labour. On the evidence, however, this is not such a case. The limited input the
plaintiff is capable of making
is unlikely, once he has employed a substitute of
the kind envisaged (which he needs to do), to increase the level of farming
income
or reduce the level of farming expenditure. In money terms, therefore, it
will not lessen his loss. At best for the defendant, the
fact that the plaintiff
can still to a limited extent involve himself in the farming operations
precludes any claim for loss of profits
arising from his personal absence from
essential farming activities.
The question whether the plaintiff could have
mitigated his loss by deploying his labour elsewhere (e g in the field of
engineering
design), and whether
19/
19 it would have been reasonable to require him to do so,
does not arise. It was never suggested by the defendant, either at the trial
or
on appeal, and accordingly never in issue, that there were alternatives open to
a man of the plaintiff's age and disability which
he could reasonably have
pursued to mitigate his loss.
In the circumstances I am satisfied, having
regard to the facts of the present matter, that the judge a
quo
was
entitled to hold that the only realistic way of calculating the plaintiff's loss
was to award him damages based on the future
cost of employing a
manager/mechanic to do the work previously done by him.
Actuarial evidence was led to establish the capitalized value of such cost at
the time of the trial. The actuary was asked to assess
what the
20/
20
plaintiff's loss would be if he had to employ a manager/mechanic at a salary
of R58 600 per annum until he (the plaintiff) turns 67.
It is not necessary to
embark upon a discussion of the details of how the actuary proceeded to
calculate the loss. The defendant
only sought to challenge the underlying
premise for the calculations,
viz
, that the loss should be calculated on
the payment of a salary of R58 600 per annum. This challenge has failed. Apart
from that no
alternative challenge was directed at the method employed to make
the calculations, or the correctness thereof. The assessed amount
of R317 349
represents the plaintiff's net prospective loss after a 15% contingency
deduction. It was never contended by the defendant,
either at the trial or on
appeal, that the contingency deduction should have been greater. There is
accordingly no basis for interfering
with the award
21/
21
made.
In the result the appeal is dismissed with costs, such costs to include the
costs attehdant upon the application for leave to appeal
in the Court a
quo
and to this Court.
J W SMALBERGER JUDGE OF APPEAL
VAN HEERDEN, JA )
) CONCUR GOLDSTONE, JA )