Bee v Road Accident Fund (093/2017) [2018] ZASCA 52; 2018 (4) SA 366 (SCA) (29 March 2018)

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[2018] ZASCA 52
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Bee v Road Accident Fund (093/2017) [2018] ZASCA 52; 2018 (4) SA 366 (SCA) (29 March 2018)

SUPREME
COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Reportable
Case
No: 093/2017
In
the matter between:
GLENN
MARC BEE

APPELLANT
and
THE
ROAD ACCIDENT FUND

RESPONDENT
Neutral
citation:
Glenn
Marc Bee
v
The
Road Accident Fun
d
(093
/2017
)
[2018] ZASCA 52
(29 March 2018)
Coram:
Seriti
and Mathopo JJA and Rogers, Hughes and Schippers AJJA
Heard:
5
March
2018
Delivered:
29
March 2018
Summary:
Delict
– claim for damage to earning capacity – plaintiff and
his brother each owned 50 per cent of close corporation
–
present case distinguishable from
Rudman
–
plaintiff’s claim permissibly quantified with reference to
corporation’s diminished profits.
Delict –
collateral source rule – plaintiff’s post-injury
earnings, to extent they exceeded a market related salary
for his
reduced role, the result of benevolence – correctly
disregarded.
Practice –
effective case management – joint minute of experts reflecting
agreement on various matters and isolating
matters still in dispute –
such agreement defines issues for trial in absence of timeous
repudiation by a party.
ORDER
On
appeal from:
A
full court of the Western Cape Division, Cape Town (Nuku J, Hlophe JP
and Steyn J concurring), sitting on appeal from a judgment
of the
same division (Van Staden AJ).
(a)  The
appeal is upheld with costs, including the costs of two counsel.
(b)  The
order of the court a quo is set aside and replaced with the following
order:
‘
(i)  The
appeal succeeds to the extent set out below.
(ii)
Para 1 of the trial court’s order is amended by substituting,
for the amount of R7 532 400 in respect
of future loss of
earnings, the amount of R7 061 625.
(iii)
Save as aforesaid, the appeal is dismissed.
(iv)  The
appellant shall pay the respondent’s costs of appeal, including
the costs of two counsel to the extent
that two counsel where
employed.’
JUDGMENT
Seriti
JA:
[1]
On 24 November 2007, the appellant, a 48 year old male, was knocked
down by a motor vehicle whilst cycling. He sustained severe
physical
injuries and was hospitalized until 21 December 2007. He continued
receiving treatment at home and returned to work on
an ad hoc basis
from January 2009.
[2]
As a result of the accident, the appellant instituted an action in
the Western Cape Division of the High Court of South Africa.
Merits
were conceded and on 16 October 2014 the trial proceeded only on
quantum. On 17 April 2015 the trial court (per Van Staden
AJ) granted
an order in terms whereof the respondent was directed to pay the
appellant an amount of R12 894 600.12 being
the sum of R412
586.12 for medical expenses, R900 000 for general damages, R4 049 614
for past loss of earnings and R
7 532 400 for future loss
of earnings, and costs.
[3]
Thereafter, with the leave of the trial court, the respondent
appealed to the full court of the Western Cape Division against
the
award for damages in respect of past and future loss of earnings
only.
[4]
On 20 September 2016, the full court (Nuku J, with Hlophe JP and
Steyn J concurring) granted an order in terms of which the
appeal was
upheld with costs and the award for past and future loss of earnings
were set aside. With special leave granted by this
court, the
appellant appeals against the decision of the full court.
[5]
At the time of the accident the appellant worked for Bee Painters and
Waterproofing CC (BPW). He worked with his brother Mr
Russ Bee (Russ)
and they each held 50 per cent of the member’s interest in BPW.
The business had two offices, one in Cape
Town and the other in
Durbanville. The appellant was running the former office and Russ was
running the latter office. The major
work of the business was the
painting of residential, commercial and industrial properties. BPW
had a small permanent labour force
and internal labour force of
painters and decorators. They largely relied on a subcontracted
labour force.
[6]
The appellant was the face of the business. He attended to the
marketing of BPW, visiting clients and potential
clients,
preparing quotations and dealing with staff matters. In addition, he
also conducted site inspections.
[7]
The business also employed sales staff. One of them was Mr Brandon
Swartz (Swartz) who was a senior sales executive. He earned
a basic
salary of R 15 000 per month. He worked for BPW for about 12
years, from the year 2000 to 2011. His functions were
almost the same
as those of the appellant. At BPW he was the only one who worked with
roofing. He testified that after the accident
the appellant performed
the same functions but at a lower level. He further testified that
they all handled their projects individually,
all invoiced separately
and their names appeared on those invoices. BPW kept a very strict
record of invoices, so it was convenient,
at the end of each month,
to ascertain which individual was responsible for which portion of
turn over. As stated earlier Swartz
earned a basic salary of R15 000
per month and also earned a commission of about 40 per cent for any
sales above the target of
R70 000. He confirmed the correctness of
the sales and salary analysis mentioned hereunder relating to him.
[8]
Mr
Jarrad
Bee (Jarrad), the son of Russ was employed by the business, on a full
time basis from the end of 2010. He has taken over
some of the
appellant's duties and also assisted the appellant in carrying out
some of his duties. In fact, Russ testified that
Jarrad did
everything that the appellant was doing and even more. Jarrad was
earning about R25 000 per month and he was not
earning a
commission. The salaries or drawings of the appellant and Russ were
determined by the two of them. They were determined
at the beginning
of the year.
[9]
Jean-Marie van der Elst (Van der Elst), a forensic accountant who
testified on behalf of the respondent, prepared sales and
salary
analysis report. He testified that when they prepared the said report
they considered financial information they obtained
from BPW and Mark
Dale Edwards (Edwards), a forensic accountant who testified on behalf
of the appellant. The documents they perused
included annual
financial statements for the financial years 2002-2013; draft income
statements for the financial years 2007-2014,
draft trial balance for
the financial years 2013-2014, salary records, including IRP forms,
tax returns and assessment forms of
the appellant, Russ and Swartz.
The sales revenue analysis indicates that the appellant and his
brother were contributing almost
evenly to the generation of revenue
of BPW.
[10]
The sales revenue analysis prepared by Van der Elst for the period
2007 to 2014 indicated that the appellant generated sales
worth
R11 550 302 and his brother Russ generated sales worth
R12 292 095. Between 2007 to 2010 and 2012 and
2013, the
appellant generated sales worth more than those generated by Russ.
Only in 2011 and 2014 did Russ generate sales worth
more than those
generated by the appellant.
[11]
The salary analysis further indicated that in 2008, the appellant
earned almost 50 per cent of his brother’s salary and
between
2009 to 2013, the appellant and Russ earned almost same salaries and
in 2014 appellant earned far less than what his brother
earned.
[12]
Jarrad and Russ attempted to dispute the correctness of the sales
analysis mentioned earlier. They suggested that the sales
allocated
to the appellant were actually not his sales but they failed to
provide any justifiable reasons for their suggestion
that the
appellant was not entitled to the allocation of the said sales.
Edwards, who testified on behalf of the appellant could
also not
provide a sound reason why the sales were allocated to the appellant
if they were not his sales. As stated earlier, Swartz
testified that
BPW kept a strict record of the invoices.
[13]
As stated earlier, Van der Elst testified that the sales analysis and
salary analysis were compiled by them from the documents
they
obtained from the business. They requested other financial documents
but they were not provided with same. The documents which
were not
given to them despite request thereof are journals, sales ledgers and
salary ledgers for the financial years 2008-2014
and order books for
financial years 2007-2008. Van der Elst during his testimony referred
to an IRP5 certificate which pertained
to the appellant’s
salary for the 2012 financial year. It reflected a total figure of
R670 161, and the same figure
appeared on the salary analysis
referred to earlier. In my view, the figures as reflected in the
sales and salary analysis contained
information obtained from the
business and therefore can be relied upon. There is no reliable
evidence which suggests that the
salary and revenue analysis prepared
by Van der Elst are not reliable.
[14]
There is no reason to doubt the correctness of the information
contained in the sales and salary analysis document mentioned

earlier. The sales allocated to the appellant in 2008 when he was at
home could be sales from one or some of his old clients who
came to
the business during his absence. Repeat business could possibly
account for the 2008 sales allocated to the appellant.
Jarrad
testified that the sales allocated to the appellant could be business
from the appellant’s old clients.
[15]
There is evidence that the appellant expressed the view that he was
still employable in the sales sector as a result of his
extensive
knowledge of the technical side of the paint business, as well as the
fact that he was renowned in the industry and had
a good name,
although he could not work at the same levels or function with the
same capacity as before. BPW’s website, at
the time of the
trial, which was several years after the accident still represented
that the appellant was the 'CEO' of the business.
The appellant’s
pre-accident roles in BPW were represented as Technical Officer and
Sales, whereas his post-accident position
focuses on Sales and
Project Management.
[16]
It is interesting to note that the further particulars delivered to
the respondent and signed on 23 January 2014 stated that
'[s]ince
1980 to the current date plaintiff has been employed as the chief
executive officer of BEE Painters and Waterproofers'.
It is further
stated that '[a]fter the accident Plaintiff continued to receive his
full salary from BEE in the form of ex gratia
payments'.
[17]
Jarrad's appointment and his taking over the many of the functions of
the appellant had enabled BPW, to a very large extent,
to function
normally despite the appellant’s injuries. The appellant
contributed immensely to the revenue stream as pointed
out in the
sales revenue analysis. In the financial years, 2009, 2010, 2012 and
2013 the appellant generated more sales than those
generated by Russ
despite the sequelae of the accident. The salary analysis indicates
that the appellant and his brother were paid
reasonably consistent
salaries from 2006 to 2014. The 2012 income statement confirmed that
in 2012 the appellant generated sales
worth R2 072 234 and
his brother generated sales worth R1 778 677.44. The
evidence suggests that the appellant’s
contribution to the
business remained substantial and consistent justifying the sales
revenue allocated to him and the salary that
was paid to him. There
are also clients' testimonials dated 21 October 2014 which showed
that the appellant was still fully functional
prior to and after the
accident, during which period, the appellant generated a significant
portion of BPW's sales revenue.
[18]
In his heads of argument the respondent’s counsel, correctly
so, contended that the evidence tendered and the financial
documents
of BPW indicated that BPW’s average revenue turnover remained
constant throughout the period preceding and subsequent
to the
accident. In 2007 the turnover was R7 083 183 and in
subsequent years remained generally constant averaging between
R4
million to R9 million per annum. The proposition that post-accident
these figures would have been higher and in line with the
building
index has no factual basis. There is neither evidence nor historical
data to support the proposition that post- accident
the financial
performance of BPW would have been higher than they were and in line
with the building index.
[19]
The financial documents of BPW indicate that the appellant received a
certain amount of money, over the relevant period as
a salary. There
is no indication of any profits received by the appellant. If the
salary included profits, there is no indication
of what portion of
the money paid to the appellant constituted profit and what portion
was his salary.
[20]
In his heads of argument and during oral argument, the appellant’s
counsel relied on the pre-trial and joint minutes,
particularly the
joint minutes of the forensic accountants. He further submitted that
in open court, during the trial the respondent’s
counsel agreed
to an order that no evidence could be led which contradicted the
content of the joint minute signed by Edwards and
Van der Elst. Some
of the agreed facts as contained in the pre-trial minutes and the
joint report of forensic accountants are inconsistent
with the
reliable and admissible evidence led before the court.  In my
view, it was incorrect for the respondent’s counsel
to make the
concession referred to above and it was also incorrect for the court
to make such an order as the order and the concession
are not
consistent with the reliable evidence led in this case. In the
following paragraphs I shall deal with the joint minutes
of the
forensic experts.
[21]
The appellant’s counsel further submitted that what was paid to
the appellant from the time of his injuries until his
return to work
in January 2009 was entirely gratuitous and that fact was admitted to
during the trial by the respondent’s
counsel. Counsel for the
appellant further referred to the joint minutes of the appellants and
respondent’s experts wherein
it was agreed that part of what
the appellant received after his injuries was gratuitous. I do not
agree with this submission.
The evidence led in this case does not
support that proposition. The financial records of BPW only indicates
revenue generated
by the appellant and the salaries paid to him.
There is no indication of any gratuitous payments made to the
appellant.
[22]
It is trite that an expert witness is required to assist the court
and not to usurp the function of the court. Expert witnesses
are
required to lay a factual basis for their conclusions and explain
their reasoning to the court. The court must satisfy itself
as to the
correctness of the expert’s reasoning. In
Masstores
(Pty) Ltd v Pick ‘n Pay Retailers (Pty) Ltd
[2015]
ZASCA 164
;
2016 (2) SA 586
(SCA) para 15, this court said '[l]astly,
the expert evidence lacked any reasoning. An expert’s opinion
must be underpinned
by proper reasoning in order for a court to
assess the cogency of that opinion. Absent any reasoning the opinion
is inadmissible'.
In
Road
Accident Appeal Tribunal & others v Gouws & another
[2017] ZASCA 188
;
[2018] 1 ALL SA 701
(SCA) para 33, this court said
'[c]ourts are not bound by the view of any expert. They make the
ultimate decision on issues on
which experts provide an opinion'.
(See also
Michael
& another v Linksfield Park Clinic (Pty) Ltd & another
[2002] 1 All SA 384
(A) para 34.)
[23]
The facts on which the expert witness expresses an opinion must be
capable of being reconciled with all other evidence in the
case. For
an opinion to be underpinned by proper reasoning, it must be based on
correct facts. Incorrect facts militates against
proper reasoning and
the correct analysis of the facts is paramount for proper reasoning,
failing which the court will not be able
to properly assess the
cogency of that opinion. An expert opinion which lacks proper
reasoning is not helpful to the court. (See
also
Jacobs
v Transnet Ltd t/a Metrorail
[2014] ZASCA 113
;
2015 (1) SA 139
(SCA) paras 15 and 16; see also
Coopers
(South Africa) (Pty) Ltd v Deutsche
Gesellschaft
Für Schädlingsbekämpfung mbH
1976
(3
)
SA 352 (A) at 371F.
[24]
In
Thomas
v BD Sarens (Pty) Ltd
[2012] ZAGPJHC 161 para 13, Sutherland J said: '[w]here two or more
experts meet and agree on an opinion, although the parties
are not at
liberty to repudiate such an agreement placed before the court, it
does not follow that a court is bound to defer to
the agreed opinion.
In practice, doubtlessly rare, a court may reject an agreed opinion
on any of a number of grounds all amounting
to the same thing; ie the
proffered opinion was unconvincing'. In
Malema
v Road Accident Fund
[2017] ZAGPJHC 275 para 94 Molahlehi J expressed the same view.
[25]
In
Daubert
v Merrell Dow Pharmaceuticals Inc
[1993] USSC 99
;
509 US 579
;
113 S. Ct 2786
(1992), which  concerned
scientific testimony, the Supreme Court of the United States dealt
with, inter alia, the admissibility
of expert opinion in terms of the
Federal Rules of Evidence and particularly rule 702. In its summary
at 507 the court said 'but
the Rules of Evidence especially Rule 702
do assign to the trial judge the task of ensuring that an expert’s
testimony both
rests on a reliable foundation and is relevant to the
task at hand'.
[26]
In the European Union and United States Antitrust Arbitration cases
expert evidence is utilised. The tribunal, if it deems
fit, can
appoint an expert to prepare a report and lead evidence before the
tribunal. The expert evidence is not binding on the
tribunal even if
the evidence is led by the tribunal appointed expert. The tribunal is
required to give reasons, if it rejects
the evidence of an expert
witness. The evidence of an expert witness, even if such expert
witness is appointed by the tribunal,
is not binding on the tribunal
unless the tribunal is satisfied that such evidence is reliable. (See
G B P Landolt and W Kluwen
(eds)
EU
and US Antitrust Arbitration
(2011)
vol 1 at 284; and J F Poudret and S Besson
Comparative
Law of International Arbitration
2 ed (2007))
[27]
The England and Wales Court of Appeal (Civil Division), in
Huntley
(also known as Joseph Paul Hopkins)(A Protected Party by his
Litigation Friend, Alison Jane McClure) v Simmons
[2010] EWCA Civ 54
, dealt with expert opinion and the joint statement
of two neuropsychologists. One of the parties made the point that the
judge
was bound by the joint statement as to the conclusion that the
judge should reach. The judge rejected this submission, holding that

the joint statement was only part of the evidence before the court.
The court of appeal, civil division agreed with the view of
the trial
judge.
[28]
In
Moloi v The State
[1995] BWCA 30
;
1995 BLR 439
(CA), the court of appeal
dealt with the admissibility of expert witnesses. The court said that
such witnesses must speak in detail
to the facts upon which their
opinions and conclusions are based. The court went further and quoted
with approval the statement
of Ramsbottom J in
R v Jacobs
1940
TPD 142
at 14-7 where he said:
'Expert
witnesses are witnesses who are allowed to speak as to their opinion,
but they are not the judges of the fact in relation
to which they
express an opinion, the court . . . is the judge of the fact . . . .
In cases of this sort it is of the greatest
importance that the value
of the opinion should be capable of being tested, and unless the
expert witness states the grounds upon
which he bases his opinion it
is not possible to test its correctness, so as to form a proper
judgment upon it.'
[29]
In
The State v Thomas
(CC 19/2015) [2016] NAHCMD 320 (19
October 2016), the mental condition of the accused, which was in
question, was enquired into
by two psychiatrists and they produced
reports. In respect of the experts' reports, the court at para 29
said:
'When
dealing with expert evidence the court is guided by the expert
witness when deciding issues falling outside the knowledge
of the
court but within the expert’s field of expertise; information
the court otherwise does not have access to. It is however
of great
importance that the value of the expert opinion should be capable of
being tested. This would only be possible when the
grounds on which
the opinion is based is stated.7 It remains ultimately the decision
of the court and, although it would pay high
regard to the views and
opinion of the expert, the court must, by considering all the
evidence and circumstances in the particular
case, still decide
whether the expert opinion is correct and reliable.'
See
also
State
v Apadile
2011 1 BLR HC.
[30]
In my view these pronouncements indicate that if an expert witness
cannot convince the court of the reliability of the opinion,
and his
report the opinion will not be admitted. The joint report of experts
is a document which encapsulates the opinions of the
experts and it
does not lose the characteristic of expert opinion. The joint report
must therefore be treated as expert opinion.
The fact that it is
signed by two or more experts does not alter its characteristic of
expert opinion. The principles applicable
to expert evidence or
reports are also applicable to a joint report. The joint report
before the court is consequently part of
evidential material which
the court must consider in order to arrive at a just decision. The
court, in such instance, will be entitled
to test the reliability of
the joint opinion, and if the court finds the joint opinion to be
unreliable, the court will be entitled
to reject the joint opinion.
The court is entitled to reject the joint report or agreed opinion if
the court is of the view that
the joint report or opinion is based on
incorrect facts, incorrect assumptions or is unconvincing.
[31]
The court cannot base its decision on unreliable evidence. There is
no valid reason why a court should be precluded from considering
and
taking into account reliable evidence placed before it. For the court
to ignore reliable and credible evidence tendered, in
my view,
defeats the ends of justice. The purpose of the
Road Accident Fund
Act 56 of 1996
is to compensate victims of motor vehicle accidents
for loss or damage caused by the driving of a motor vehicle. The
court can
only make a proper determination of the appropriate
compensation to award if it takes into account all the relevant
evidential
material and not be restricted to the joint minute of
experts, which joint minute is based on erroneous assumptions and
incorrect
facts. If the court ignores reliable and credible evidence
placed before it, that would undermine the purpose of the Road
Accident
Fund. The Road Accident Fund is a State organ which is
funded by a fuel levy and it must disburse its fund strictly in
accordance
with its enabling legislation.
[32]
The forensic accountants Edwards and Van der Elst prepared and signed
the joint minute. The joint minute contains various assumptions,
some
of which are not supported by any evidence or are inconsistent with
the evidence led. They agreed that certain portion of
the appellant's
earnings is deemed to be gratuitous in nature despite the fact that
there is no evidence to support such suggestion.
Further they averred
that the appellant’s earnings prior to the accident include
both his salary and share of the profits
despite the fact that there
was no oral or documentary evidence which indicates what profits,
over the relevant period was earned
by the appellant. The financial
records of BPW refer only to the salary the appellant earned. The
forensic accountants agreed that
the appellant's pre-accident salary
would have grown at the level of the 2008 financial year, adjusted to
accommodate the Consumer
Price Index during the post-accident period.
There is no evidence to support these assumptions. The salary of the
appellant after
the accident is known and there is no reason why the
known salary of the appellant from financial years 2008 to 2014
should not
have been utilised.
[33]
At the end of the joint minute, the accountants state that the joint
minute is based on the information made available to them.
They
further stated that 'should additional information become available,
we reserve the right to amend our report and conclusions

accordingly'. As stated earlier Van der Elst testified that they
requested other financial documents but they were not given the
said
documents. The documents requested by Van der Elst included salary
ledgers and source documents of the company such as order
books and
sales ledgers. Edwards, when testifying, said that since they have
reached an agreement, the documents requested by Van
der Elst were no
longer necessary. This suggests that the joint minute was concluded
and signed despite the fact that BPW failed
to and or refused to
provide Van der Elst with the financial documents he requested. It is
not known whether Van der Elst would
have signed the joint minute if
he had received the requested documents.
[34]
The accountants agreed that for financial years 2007 and 2008, the
appellant earned certain amounts of money, which figures
are not
consistent with the figures obtained by Van der Elst from the
financial records of BPW. The joint statement is therefore
not
reliable and the court cannot rely on it. It contains incorrect
information and incorrect assumptions, and was also completed
without
certain important information being taken into account, which Van der
Elst thought was necessary. There is no justifiable
reason why
Edwards or BPW failed to provide Van der Elst with the requested
documents. The underlying facts and assumptions which
underpins the
joint minute are erroneous and consequently the court cannot rely on
these joint minutes.
[35]
The appellant is not an ordinary employee of BPW. He held 50 per cent
of the member’s interest in BPW and he would have
been entitled
to 50 per cent of the profits of the close corporation. There is no
evidence which indicates which portion of the
amounts received by
appellant was profit or salary or gratuitous payments. Gratuitous
payments are not applicable to the appellant
because of his interest
in the close corporation and revenue he generated over the relevant
period. The financial documents of
BPW, including the IRP5
certificate made no mention of any gratuitous payments paid to the
appellant. The suggestion that portion
of his salary constituted
gratuitous payments has no legal nor factual basis.
[36]
The appellant’s counsel submitted that the medical evidence of
Dr Zayne Domingo (a neurosurgeon) and Dr Theo le Roux
(an orthopaedic
surgeon) suggested that the appellant should retire early. Dr Le Roux
suggested that the appellant would probably
have to retire at age 60.
On the other hand Ms Joan Andrews and Ms Julia Buchanan, the
appellant's and respondent's occupational
therapists, in their joint
minute agreed that the appellant should manage to continue working in
his current accommodated position
until the age of retirement.
Furthermore, the industrial psychologists Mr Richard Hunter and Mr
Dawie Malherbe are of the view
that the appellant might work until
normal retirement age.
[37]
In the 2013 financial year, which is six years after the accident,
the appellant generated substantive revenue, which was higher
than
the revenue generated by his brother. In the 2014 financial year,
which is seven years after the accident, the appellant generated

moderate revenue which was less than the revenue generated by his
brother.
[38]
The respondent’s counsel contended that the generally accepted
principle is that injuries and the sequelae thereof are
most acute
closer to the occurrence, whereafter they stabilise until a plateau
is reached where no significant improvement or deterioration
is
expected.
[39]
The appellant, six to seven years after the accident, was still
generating decent revenue for BPW. In 2008 when he was not
at work,
his old clients, probably because of his reputation in the industry,
made it possible for him to be allocated sales revenue
in the amount
of R878 554 which was higher than the R566 716 sales
revenue allocated to his brother. In 2013 financial
year, the
appellant generated sales worth R1 455 698 and his brother
generated sales worth R1 305 026. From
an analysis of the
evidence, the appellant has failed to prove that he will, as a result
of the injuries retire early. There is
no reason why the appellant
should not continue working until 65 years of age, as the historical
data, namely revenue that he generated
from 2009 to 2014 suggests
that he will be able to work until normal retirement age and also
maintain his interest in the close
corporation until he retires.
[40]
Brandon Swartz, who was referred to as the managing director and the
general manager of the business was involved with the
business since
before the appellant's accident - Swartz left the business in 2011 -
considering his role in the business as stated
above, and his
contribution to the company, his departure from the company could be
part of the reasons for the drop in revenue
in the 2012 financial
year. In the 2012 financial year, the appellant’s efforts
contributed to the revenue of BPW more than
that of Russ. So the
appellant’s injuries could not have been the reason for the
poor performance of BPW in the 2012 financial
year. It is also not
clear what was the correct financial position of BPW in the 2012
financial year. The income statement indicates
that he earned
R392 768.99 and the IRP5 certificate of the same year indicates
that he earned R670 161.
[41]
With regard to the determination of whether the appellant was
entitled to past loss of earnings, the appellant failed to prove
what
salary was actually paid to him over the relevant period. It is
therefore not possible to determine whether any gratuitous
payments
were made to the appellant and if so, how much was paid to the
appellant in this respect. This is one of the reasons why
the
appellant should not have been awarded any amount for past loss of
earnings.
[42]
The appellant based his claim for past as well as future loss of
earnings on the salary he allegedly received or allegedly
would have
received from BPW as well as profits he would have shared in. The
appellant has failed to prove his salary pre and post-accident
nor
any profits that he received from BPW over the relevant period. In
order for the appellant to succeed, he needed to prove his
salary and
profits over the relevant period which he failed to do.
[43]
There is no evidence which suggests that BPW had actually suffered
loss of turnover due to the appellant’s injuries.
The
performance of BPW remained almost constant pre and post the injuries
of the appellant. The sales generated by the appellant
both before
and after the accident were consistent and he received almost
constant payments or salaries throughout the relevant
period. The
appellant has failed to prove that BPW had actually suffered a loss
of income due to his injuries and that his patrimony
was, as a
result, diminished. The appellant’s appeal cannot succeed.
[44]
In the result I would order that the appeal be dismissed with costs,
which costs would include costs of two counsel.
__________________
L W Seriti
Judge
of Appeal
Rogers
AJA (Mathopo JA and Hughes and Schippers AJJA concurring)
[45]
I
differ from Seriti JA’s conclusion. In my view the appeal
should be upheld and the trial court’s award should, save
for
at downward adjustment, be reinstated. I shall use the same
abbreviated references appearing in my colleague’s judgment.
Approach on
appeal
[46]
I
start by emphasising two interrelated principles to be observed by an
appellate court in an appeal against an award of damages.
Firstly,
the trial court’s factual findings are presumed to be correct
in the absence of demonstrable error. To overcome
the presumption, an
appellant must convince the appellate court on adequate grounds that
the trial court’s factual findings
were plainly wrong. Bearing
in mind the advantages enjoyed by the trial court of seeing, hearing
and appraising the witnesses,
it is only in exceptional circumstances
that an appellate court will interfere with the trial court’s
evaluation of oral
evidence (
R
v Dhlumayo & another
1948
(2) SA 677
(A) at 705-706;
Sanlam
Bpk v Biddulph
2004
(5) SA 586
(SCA) para 5;
Roux
v Hattingh
[2012]
ZASCA 132
; 2012 (6) 428 (SCA) para 12).
[47]
Second,
where damages are a matter of estimate, an appellate court will not
interfere with the trial court’s assessment unless
there was a
misdirection or unless there is a substantial variation between the
trial court’s award and what the appellate
court would have
awarded or unless the appellate court thinks that there is no sound
basis for the award (
Sandler
v Wholesale Coal Supplies Ltd
1941
AD 194
at 200;
AA
Mutual Insurance Association Ltd v
Maqula
1978 (1) SA 805
(A)
at 809B-D).
[48]
In the
present case the calculation of damages (prior to the application of
contingencies) rests on underlying assumptions which
are matters of
estimation. Among these are (a) the market-related salary the
appellant could command in his injured condition;
(b) how much
better BPW would have performed if the appellant had continued at the
helm in an uninjured condition; (c) when
the appellant would have
retired in his uninjured condition and when he is likely to retire in
his injured condition. In keeping
with the authorities I have cited,
an appellate court should not interfere merely because it would have
been inclined to estimate
these matters differently to the trial
court. The appellate court may only interfere if there was
misdirection on the part of the
trial court in arriving at the
assumptions or if the assumptions were substantially different from
those the appellate court would
have used. A different way of putting
this is that if, in the absence of misdirection, the trial court’s
assumptions are
within a reasonable range, the appellate court should
not interfere just because it would have adopted other reasonable
assumptions.
Background
[49]
The
appellant’s claim for loss of earnings proceeded along the
following lines:
(a)  His
injuries substantially impaired his ability to perform the functions
he previously performed as BPW’s chief
executive officer and as
a 50 per cent member of the corporation.
(b)  As
a result, BPW generated a lower turnover and profit than it would
have done had he not been injured.
(c)  But
for his injury, he would have received half of the additional profit
BPW would have earned over and above the
profit it actually earned.
(d)  The
additional profit BPW would have earned would be fairly assessed by
assuming that BPW’s turnover immediately
prior the accident
would have fluctuated thereafter in accordance with the Western Cape
Building Index (WCBI) and by making reasonable
assumptions as to the
gross profit margin applicable to the additional turnover and as to
the additional variable expenses that
would have been incurred to
earn the additional turnover.
(e)  As
to the lower profit that BPW actually earned, the half share that BPW
paid him was not earned by him but was paid
to him out of
benevolence.
(f)  Because
he nevertheless did render some service to BPW in his injured state,
albeit at a very reduced level, he accepted,
for purposes of his
claim, that a portion of the half share that BPW paid him should be
reckoned as true earnings rather than as
benevolent payments, such
portion to be determined by a market-related salary for the reduced
functions he performed. This would
be deducted in calculating his
loss of income.
(g)  The
balance of the payments which BPW made to him were benevolent
payments and should, in accordance with the collateral
source rule,
be disregarded in determining his loss of income.
[50]
The
non-expert evidence tendered in support of the appellant’s case
came from the appellant himself, his wife Cathy, his brother
Russ and
his nephew Jarrad. The only non-expert evidence adduced by the
respondent was that of Swartz, a former employee of BPW.
[51]
Each
side engaged experts in the following disciplines: forensic
accountancy; neurosurgery; orthopaedic surgery; industrial
psychology;
occupational therapy and clinical neuropsychology. The
appellant did not call his occupational therapist and neither side
called
their clinical neuropsychologists. In accordance with the
trial management procedures applicable in the Western Cape High
Court,
the matter could not be certified as ready for trial until the
experts had met and signed joint minutes. This was done. The joint

minutes reflected a large measure of agreement among the experts. The
most important differences were those between the forensic

accountants, Edwards for the appellant, Van der Elst for the
respondent. Although there were some differences among the other
experts, it was not suggested during argument that these differences
were of great moment.
The forensic
experts and pre-trial procedure
[52]
The
appellant’s approach to the computation of his loss of earnings
called for an investigation of BPW’s financial affairs
and
performance prior and subsequent to the accident. This was done by
the forensic accountants. Edwards’ report was served
on 4
September 2013. In a pre-trial minute signed by the attorneys on 14
March 2014 it was recorded that the respondent had engaged
Van der
Elst to conduct investigations and that upon receipt of his report
the forensic accountants would meet ‘with a view
to identifying
areas of common ground and issues of difference for resolution’.
[53]
Van
der Elst completed his report on 9 May 2014. He recorded the
information available to him, including BPW’s annual financial

statements for the years 2002 to 2013, its draft income statements
for the years 2007 to 2014, its draft trial balances for the
years
2013 and 2014 and salary records, including IRP5 forms, tax returns
and assessments for the appellant, Russ and Swartz. He
also recorded
that he had requested, but not received, BPW’s general, sales,
debtors and salary ledgers for the years 2008
to 2014 and its
quotation and/or order books for the years 2007 and 2008. (In
relation to BPW’s financial affairs, the years
referred to are
its financial years ending on the last day of February.) The
concluding paragraph of his report stated that, should
this or other
additional information be made available, it could have a material
impact on his conclusions and he reserved the
right to amend his
report accordingly.
[54]
As
envisaged in the pre-trial minute of 14 March 2014, Edwards and Van
der Elst met and signed a joint minute on 16 May 2014. They
recorded
in the opening paragraph that they had received additional financial
and operational information not available at the
time of writing
their initial reports. Based on all the information to which they had
access, they agreed on the following aspects
of the appellant’s
claim:
(a)
the figures for BPW’s turnover, gross profit, variable expenses
and net profit for the three years preceding the accident

(2006-2008);
(b)  that,
following the accident, BPW had underperformed, having regard to its
pre-accident performance and the WCBI;
(c) that
this underperformance is likely to have been caused by the
appellant’s injuries, save for a once-off disruption
in the
2012 financial year when Swartz was dismissed and in respect of which
the experts made an agreed adjustment;
(d) that
the WCBI report of March 2014 should be used to determine how, if the
appellant had not been injured, BPW’s
turnover would have
fluctuated after the accident and until 28 February 2014;
(e)
that as from 1 March 2014 a more conservative growth figure should be
assumed, a matter on which they deferred to the actuaries
(in the
event the appellant did not press for more than an annual adjustment
to keep pace with inflation and this assumption was
not challenged);
(f) that
it was reasonable to assume that variable expenses would amount to 25
per cent of the additional turnover;
(g) that
it was reasonable to assume that fixed costs would increase at 7.5
per cent above inflation;
(h) the
amounts BPW paid the appellant as ‘salary’ in the years
2009 to 2014;
(i) that
there was a gratuitous (ie benevolent) element in the payments so
made to the appellant.
[55]
According
to the joint minute, there were three matters on which they
disagreed:
(a) the
gross profit margin to apply to the additional turnover BPW would
have earned but for the appellant’s injuries;
(b)
how to determine the gratuitous element of the payments BPW made to
the appellant;
(c) the
application of the
Rudman
decision to the losses sustained by
BPW in its 2009 and 2012 years.
[56]
The
last of these points concerned the decision of this court in
Rudman
v The Road Accident Fund
2003
(2) SA 234
(SCA). In that case it was accepted that in appropriate
circumstances the loss suffered by a company or corporation through
which
the claimant conducted business could provide a measure of the
claimant’s loss but the court cautioned that this would not

always be justified. On the facts of the
Rudman
case,
this court held that the claimant had failed to establish that he
suffered any loss of income.
[57]
In the
present case, the facts which the experts agreed showed that this was
an appropriate case in which to assess the appellant’s
loss of
income with reference to the financial affairs of BPW. This is what
they both did. Because of their differing assumptions
on the
appropriate gross profit margin and the gratuitous element of the
appellant’s post-injury ‘salary’, and
because of
their differing approaches to the 2009 and 2012 losses, they arrived
at different amounts for the appellant’s
past losses over the
period 2009 to 2014 but both of them accepted that the appellant had
suffered a past loss, computed in accordance
with the methodology I
have described. Their calculations of the future loss (ie as from 1
March 2014) also differed because of
the same differences in
assumptions but again they both agreed that that the appellant had
suffered a loss of future income.
[58]
In
regard to the past loss, the methodology was uncontentious for those
years in which BPW made a net profit. For those years they
agreed
that the appellant’s loss was half of the additional net profit
which BPW would have earned plus so much of the appellant’s

half share of the actual net profit as represented a gratuitous
payment. However in 2009 and 2012 BPW suffered a net loss. If the

experts had followed a consistent methodology, the appellant’s
loss of income in those years would have been determined by
the
difference between the net profit BPW would have made and the
negative losses it in fact suffered. Van der Elst, however, was

instructed by the respondent’s legal team that for 2009 and
2012 he was to ‘apply
Rudman
’,
apparently meaning that a half-share of BPW’s net losses should
not be attributed to the appellant. Van der Elst
did not say that the
appellant suffered no loss of income in those years; he understood
the effect of his instructions to be that,
for the purpose of
determining the appellant’s loss in those two years, BPW’s
net profit/loss should be taken as zero
rather than as a negative
number. This naturally reduced the appellant’s claim for loss
of income for 2009 and 2012.
[59]
In the
final paragraph of the joint minute the experts recorded that the
content of their minute was based on the information made
available
to them and excluded relevant contingencies. There was then this
concluding sentence:
‘
Should
additional information become available, we reserve the right to
amend our report and conclusions accordingly.’
[60]
On 10
June 2014 the parties’ attorneys signed a further pre-trial
minute which recorded that joint minutes by the various
experts had
been filed. In regard to the forensic accountants, the minute
recorded that there was a difference of opinion between
the forensic
accountants with regard to the calculation of the appellant’s
claims for accrued and future loss of income,
the differing results
of their analyses being reflected on the last two pages of the
experts’ joint minute. The judge presiding
at the case
management meeting certified the case trial-ready.
[61]
On 8
October 2014 a supplementary report by Van der Elst was served. Van
der Elst confirmed the views expressed by him in the joint
minute.
The main purpose of the supplementary report was to deal with the
claim for future loss of earnings in the light of the
actuarial
report the respondent’s attorneys had commissioned.
The trial
[62]
The
trial got underway on 16 October 2014, Edwards being the appellant’s
first witness. No mention was made of any ‘additional

information’ which had become available and which might affect
the matters agreed in the joint minute. However, when the
respondent
called Van der Elst on 13 November 2014, he testified that the WPBI
report issued in October 2014 (covering the period
to the end of
August 2014) indicated that there had been a significant downturn in
the industry. If this later index report (which
had not been
available when the experts concluded their joint minute) were used,
the base value of  BPW’s uninjured
turnover for purposes
of calculating the appellant’s loss of future income would be
significantly lower than the figure arrived
at by using the WCBI
report of February 2014. Van der Elst also testified that he had
wanted access to additional source documentation
which had not been
forthcoming and that the information which formed the basis of his
agreement with Edwards in the joint minute
was inferior to the source
documents.
[63]
If Van
der Elst considered the information available to him inadequate to
express agreement with the content of the joint minute
(I do not
think it was), he should not have signed it. The concluding paragraph
of the joint minute does not suggest that the available
information
was inadequate; it merely reserved the right to each expert to depart
from the contents of the minute if additional
information became
available. Apart from the WCBI report of October 2014, no additional
information became available. Accordingly,
the precondition for a
departure from the joint minute was not met except perhaps in
relation to the October 2014 report. It did
not assist Van der Elst
to complain that he wanted access to additional source documentation.
If he considered such documentation
important, he should have
insisted that the respondent’s attorneys call for further
discovery or subpoena the documents from
BPW.
Effect of
agreement between experts
[64]
This
raises the question as to the effect of an agreement recorded by
experts in a joint minute. The appellant’s counsel referred
us
to the judgment of Sutherland J in
Thomas
v BD Sarens (Pty) Ltd
[2012]
ZAGPJHC 161. The learned judge said that where certain facts are
agreed between the parties in civil litigation, the court
is bound by
such agreement, even if it is sceptical about those facts (para 9).
Where the parties engage experts who investigate
the facts, and where
those experts meet and agree upon those facts, a litigant may not
repudiate the agreement ‘unless it
does so clearly and, at the
very latest, at the outset of the trial’ (para 11). In the
absence of a timeous repudiation,
the facts agreed by the experts
enjoy the same status as facts which are common cause on the
pleadings or facts agreed in a pre-trial
conference (para 12). Where
the experts reach agreement on a matter of opinion, the litigants are
likewise not at liberty to repudiate
the agreement. The trial court
is not bound to adopt the opinion but the circumstances in which it
would not do so are likely to
be rare (para 13). Sutherland J’s
exposition has been approved in several subsequent cases including in
a decision of the
full court of the Gauteng Division, Pretoria, in
Malema
v The Road Accident Fund
[2017]
ZAGPHC 275
para 92.
[65]
In my
view, we should in general endorse Sutherland J’s approach,
subject to the qualifications which follow. A fundamental
feature of
case management, here and abroad, is that litigants are required to
reach agreement on as many matters as possible so
as to limit the
issues to be tried. Where the matters in question fall within the
realm of the experts rather than lay witnesses,
it is entirely
appropriate to insist that experts in like disciplines meet and sign
joint minutes. Effective case management would
be undermined if there
were an unconstrained liberty to depart from agreements reached
during the course of pre-trial procedures,
including those reached by
the litigants’ respective experts. There would be no incentive
for parties and experts to agree
matters because, despite such
agreement, a litigant would have to prepare as if all matters were in
issue. In the present case
the litigants agreed, in their pre-trial
minute of 14 March 2014, that the purpose of the meeting of the
experts was to identify
areas of common ground and to identify those
issues which called for resolution.
[66]
Facts
and opinions on which the litigants’ experts agree are not
quite the same as admissions by or agreements between the
litigants
themselves (whether directly or, more commonly, through their legal
representatives) because a witness is not an agent
of the litigant
who engages him or her. Expert witnesses nevertheless stand on a
different footing from other witnesses. A party
cannot call an expert
witness without furnishing a summary of the expert’s opinions
and reasons for the opinions. Since it
is common for experts to agree
on some matters and disagree on others, it is desirable, for
efficient case management, that the
experts should meet with a view
to reaching sensible agreement on as much as possible so that the
expert testimony can be confined
to matters truly in dispute. Where,
as here, the court has directed experts to meet and file joint
minutes, and where the experts
have done so, the joint minute will
correctly be understood as limiting the issues on which evidence is
needed. If a litigant for
any reason does not wish to be bound by the
limitation, fair warning must be given. In the absence of repudiation
(ie fair warning),
the other litigant is entitled to run the case on
the basis that the matters agreed between the experts are not in
issue.
[67]
It is
unnecessary, in the present case, to decide whether a litigant needs
to have good cause for repudiating an agreement reached
by his or her
expert. Certainly litigants should not be encouraged to repudiate
agreements for ‘tactical’ reasons.
Whatever may have been
the attitude to litigation in former times, it is not in keeping with
modern ideas to view it as a game.
The object should be just
adjudication, achieved as efficiently and inexpensively as reasonably
possible. Private funds and stretched
judicial resources should only
be expended on genuine issues.
[68]
There
may be cases where the expert rather than the litigant wishes to
depart from what he or she previously agreed. The same rules
of fair
play apply. The expert should notify the attorney through whom he or
she was engaged and due warning should be given to
the other side. In
such a case there will often be a further procedural requirement,
namely the furnishing of a supplementary report
by the expert whose
views have changed.
[69]
The
limits on repudiation, particularly its timing, are matters for the
trial court. The important point for present purposes is
that
repudiation must occur clearly and timeously. The reason for
insisting on timeous repudiation is obvious. If the repudiation
only
occurs during the course of the trial, it might lead to a
postponement to allow facts which were previously uncontentious
to be
further investigated. It might be necessary for a party to recall
witnesses, including his or her expert. Whether a trial
court would
allow this disruption would depend on the circumstances. The trial
court would be entitled to insist on a substantive
application from
the repudiating litigant.
[70]
My
colleague has referred to the passage from
Thomas
dealing with the right of a trial court to depart from an expert’s
opinion. In the present case, however, the important matters
which
Edwards and Van der Elst agreed were, in my view, factual, albeit
facts which forensic accountants are more adept than others
at
uncovering and analysing. In
Thomas
the
court said that facts agreed upon by the experts are binding unless a
litigant timeously repudiates the agreement.
[71]
I
would add that even where the agreed matter is one of opinion, fair
play will, as I have said, generally require that a possible

rejection of the agreed opinion be timeously raised. This is for the
reason that litigants will quite properly not spend their
resources
on establishing matters of expert opinion which are not in dispute.
Indeed, they would rightly be upbraided for wasting
court time by
doing so. If a court is minded to reject the opinion on the available
evidence, the litigants should be alerted to
this so that they can
consider adducing further evidence.
[72]
I
agree with my colleague (para 20) that parties to legal proceedings
cannot, by their agreement, compel the court to decide the
case on
incorrect legal basis. However, that principle is concerned with
agreements or concessions as to the law, not facts and
expert
opinions. In the present case, the joint minute does not in my view
record any agreements on matters of law.
[73]
My
colleague has cited a number of local and foreign cases dealing with
the assessment of contested expert testimony. I agree that
in such
cases a court must determine whether the factual basis of a
particular opinion, if in dispute, has been proved and must
have
regard to the cogency of the expert’s process of reasoning.
Matters are quite different, in my respectful opinion, where
experts
in the same field reach agreement. In such a case, as I have said, a
litigant cannot be expected to adduce evidence on
the agreed matters.
Unless the trial court itself were for any reason dissatisfied with
the agreement and alerted the parties to
the need to adduce evidence
on the agreed material, the trial court would, I think, be bound, and
certainly entitled, to accept
the matters agreed by the experts. In
the present case the trial court did not require the parties to lead
further evidence on
the matters on which the experts agreed. The
trial court was perfectly entitled to act as it did. In
Coopers
(South Africa) (Pty) Ltd v Deutsche
Gesellschaft
Für Schädlingsbekämpfung mbH
1976
(3) SA 353
(A) Wessels JA foreshadowed that an expert’s bald
opinion, if uncontroverted, might carry weight (371G). All the more
so,
where experts for the opposing parties share the same opinion.
[74]
The
judgment of the English Court of Appeal in
Huntley
v Simmons
[2010]
EWCA Civ 54
, cited in para 27 of my colleague’s judgment, is in
my respectful view distinguishable. In that case a joint report by
neuropsychologists
for the plaintiff and defendant respectively was
filed on the question whether a patient reasonably required 24-hour
care for the
rest of his life. However, both sides led other
conflicting expert evidence on the same question. Waller LJ, in
giving the Court
of Appeal’s judgment, emphasised that where a
joint report was filed ‘either party is entitled to make clear
that the
opinion expressed in the joint statement is simply evidence
that must be assessed as part of all the evidence’ (para 9) and

that in the case under consideration ‘those representing the
defendant had made clear that the Joint Statement was not “agreed”

evidence’ (para 14). It was in those circumstances that the
trial court had been entitled to weigh the cogency of all the
expert
evidence. It seems to me that the salutary practice proposed by
Sutherland J in
Thomas
has
as its purpose to make clear what was evidently made clear by the
defendant in
Huntley
,
leaving the plaintiff in no doubt as to what is in issue.
Implications of
the joint minute in the present case
[75]
At no
stage did the respondent repudiate the facts agreed between the
forensic accountants. If Van der Elst wished to testify
inconsistently
with the agreed facts, he should have informed the
respondent’s legal representatives and the latter should in
turn have
clearly and timeously notified the appellant’s legal
representatives. Van der Elst, and no doubt the respondent’s
legal
representatives, knew before the trial began that he had wanted
additional source documents but had not obtained them. If this was
a
valid ground for repudiating the agreement in the joint minute, it
could have been notified to the appellant before the start
of the
trial. This was not done. To make matters worse, Edwards was not
cross-examined on the deviations Van der Elst wished to
introduce.
[76]
Unsurprisingly,
therefore, the appellant’s counsel objected when Van der Elst
began to testify that the WCBI was not an appropriate
benchmark for
determining BPW’s uninjured turnover because of a supposed
inadequate correlation between the index and BPW’s
pre-accident
turnover. The matter stood down so that the issue could be properly
argued. When the trial resumed after the intervening
weekend, the
submissions by counsel led to an agreed ruling that the respondent’s
counsel was not permitted to adduce evidence
from Van der Elst
inconsistent with the joint minute. The appellant’s counsel
also placed on record that if evidence was
going to be adduced from
Van der Elst which was not inconsistent with the joint minute but
which was not foreshadowed in his expert
report, the appellant
insisted on a supplementary expert summary. No supplementary expert
summary was served.
[77]
Even
if the ruling mentioned above was not an agreed one, it would be
accord with the principles laid down in
Thomas
.
It was for the trial court to determine whether Van der Elst should
be permitted to depart from the joint minute. Even after the
ruling,
Van der Elst on occasion sought to cast doubt on agreed facts and the
trial court had to remind him that this was impermissible.
If the
respondent was unhappy with this state of affairs, it should have
brought a substantive application. This would almost certainly
have
required a postponement because, until Van der Elst testified, the
appellant had conducted its case on the basis of the facts
agreed in
the joint minutes.
[78]
Given
the agreed ruling by the trial court, it was not open to the court a
quo, and it is not, I respectfully consider, open to
this court, to
go behind the facts agreed in the forensic accountants’ joint
minutes. Apart from the fact that intervention
by an appellate court
would be impermissible, it is simply not possible to say on the
record whether the facts agreed in the forensic
accountants’
joint minutes are or are not the correct facts. Because the appellant
did not come to court to litigate uncontentious
matters, we cannot
say that we have all the relevant evidence and documents pertaining
to those facts. My colleague’s finding
that the matters agreed
by the experts were refuted by the evidence presupposes that all the
evidence bearing on these matters
was adduced. In view of the joint
minute of the experts, it was unnecessary for the appellant to adduce
all the evidence, so findings
reached on the record are, in my
respectful view, inherently unsafe.
[79]
The
respondent’s argument which found favour with the full court
seems to me to amount to trial by ambush. This is something
which no
court in South Africa can countenance.
[1]
Insofar as damage to earning capacity is concerned, the litigants
went to trial on the basis that the three issues identified in
the
forensic accountants’ joint minute needed to be resolved. After
both sides had closed their cases and for the first time
in argument
before the trial court, the appellant was faced with a contention
that he had failed to prove the fundamental factual
matters accepted
by both forensic accountants in their joint minute. The injustice of
that approach seems to me to be manifest.
The trial may have taken a
very different course had the agreed ruling not been made. One cannot
assume that the appellant would
not have applied to reopen his case.
[80]
In my
opinion, therefore, that the only issues which could legitimately
have been ventilated in the appeal before the court a quo
were
(a) the appropriate gross profit margin assumptions; (b) the
gratuitous component of the appellant’s ‘salary’;

(c) the application of
Rudman
to
the net losses sustained by BPW in 2009 and 2012. The court a quo did
not decide any of these issues. Instead it decided, contrary
to the
facts agreed by the forensic accountants, that the appellant had
failed to prove that BPW’s performance was affected
by his
injuries or that he personally had suffered any loss, and that
accordingly, and as in
Rudman
,
his claim for loss of earnings should have been dismissed. This
disregard of the agreed facts was not permissible.
Rudman v Road
Accident Fund
[81]
It
might be contended that the applicability of
Rudman
is
a legal rather than a factual question and that a court is not bound
by a legal concession. Such a contention is fallacious.
Rudman
did
not lay down new law. The judgment was wholly concerned with the
factual question whether the claimant had proved a patrimonial
loss.
The respondent’s consistent position in
Rudman
was
that the claimant had not suffered a patrimonial loss. The trial
court analysed the evidence and concluded that he had not suffered
a
patrimonial loss; this court agreed with the factual analysis.
[82]
In the
present case, by contrast, the very facts agreed by the experts
established that the appellant had suffered a loss and that
such loss
was directly related to the impaired performance of BPW. Whether that
was so was a factual question, not a legal one.
The experts agreed on
the facts. They differed on three aspects affecting the
quantification, not the existence, of the appellant’s
loss.
[83]
In my
view, the appellant’s situation is distinguishable from the
claimant’s in
Rudman
.
The court there said that a physical disability which impacts upon a
person’s capacity to earn does not necessarily reduce
his
patrimony: ‘It may in some cases follow quite readily that it
does, but not on the facts of this case’ (para 11).
When the
judgment is read as a whole, this conclusion appears to have been
based on the following considerations. Almost all the
shares in the
company were held by a family trust. The claimant himself held only
2.5 per cent of the company (para 2). There was
thus not a necessary
correlation between the company’s profitability and his own
income as the manager of the company’s
business. Although there
was evidence that the company earned less revenue because of the
claimant’s injury, there was no
proof that this reduced the
value of his nominal shareholding in the company or that he received
less from the company than before
(para 13). Indeed the claimant
expressly disavowed any connection between his drawings from the
company and his alleged patrimonial
loss (para 9). Furthermore, the
claimant’s earning capacity had to be considered as a whole.
Although he suffered physical
injuries which affected his ability to
hunt, his intellectual capacities were unimpaired. The claimant was
not employed as a professional
hunter and his earning capacity could
not be confined or compartmentalised as if he were. His real function
was that of the company’s
chief executive officer. That was a
function he still performed. He remained the driving force behind the
entire enterprise. On
the evidence, his injuries did not impair his
ability to do what mattered most – to see to it that the family
empire which
he had founded continued to flourish in all its spheres
for the benefit of himself, the trust, the company and ultimately the
family
(para 13).
[84]
The
present case is quite different. The appellant’s injuries
included brain damage which has impaired his intellectual, mental
and
emotional functioning. The expert and factual evidence was all in one
direction. Before the accident he was BPW’s de
facto chief
executive. Apart from outstanding managerial abilities and an
excellent manner with customers and staff, he was recognised
for his
wide knowledge and expertise in the field of waterproofing and
painting with a unique ability to quote for projects quickly
and
accurately. After the accident the appellant could not remotely
function at his pre-injury level. The work he continued to
perform
was closer to that of a site supervisor though even this work he
could not perform efficiently. He would take several hours
to do
things which previously would have taken him half an hour or less. He
repeated himself when giving instructions to staff.
He became short
tempered and at times abusive. He panicked on the one occasion that
he answered a repeat-customer’s request
to visit a block of
flats to quote on a job.
[85]
It is
as well to recall, here, what some of the experts said:
(a) In
their joint minute the neurosurgeons agreed that the appellant’s
traumatic brain injury, with residual neuropsychological
deficits,
would impact significantly on his employability. In oral evidence
they express themselves more strongly, saying that
the appellant is
unable to work in the open labour market and could not hold down a
job except with a sympathetic employer.
(b) The
occupational therapists agreed that the appellant’s
employability had been compromised, that his current job
was
‘probably sheltered, due to family ownership’, that his
work abilities would probably not improve significantly
in the
future, and that his ability to secure alternative work was likely to
be difficult. The appellant did not call his occupational
therapist.
The respondent’s occupational therapist, who only interviewed
the appellant once, said that, ‘on a borderline
basis only’,
the appellant was able to hold down an appropriate job ‘but
with more than reasonable accommodation’.
Accommodation was
needed because of his reduced physical and mental capacities.
Although BPW was extremely accommodating, the appellant
was still not
able to do his old job.
(c) The
clinical neuropsychologists agreed that the appellant had sustained a
severe traumatic brain injury; that he displayed
dysexecutive
symptomology; that he met the criteria for a diagnosis of Cognitive
Disorder NOS (distractible, dysnomia, inefficient
and borderline new
learning, severely defective recognition, at times defective fine
motor speed and performance); that he had
undergone a personality
change (less tolerant, more agitated, frustrated and anxious); that
he experienced mood swings, fatigued
rapidly and had become socially
withdrawn; that he had been unable to return to his pre-morbid levels
of occupational functioning;
that his continued employment in the
family business ‘was protected employment’; and that he
‘would not be able
to gain employment in the open labour
market’.
(d) The
industrial psychologists concurred that his working ability had been
impacted and that this was permanent though they
did not agree on the
extent of his residual functioning. The view of the respondent’s
industrial psychologist, based on information
from the appellant and
his brother, was that the scope of his work had been reduced to 60
per cent of his pre-morbid functioning
and that this was where it
would remain. The appellant’s industrial psychologist regarded
the appellant as unemployable in
the open market.
[86]
The
evidence of the lay witnesses supported the view of the experts that
the appellant would battle to find alternative employment.
His
brother Russ testified that the appellant definitely was unable to
perform at his previous level. He estimated that the appellant
was
only functioning at around 10 per cent to 15 per cent of pre-morbid
capacity and that BPW’s business had gone backwards.
He did not
think his brother should be working at all:
‘
He
is an absolute nightmare. He is aggressive. As I say he has sworn at
my kids a couple of times. He is not productive. He doesn’t

have logical thinking. He is stressed out. He is an absolute mess. He
is really an absolute mess.’
When
asked in cross-examination whether the appellant still had some
goodwill (ie drawing power for customers), Russ answered:
‘
That’s
a difficult question to answer. Do people like him? Absolutely they
like him. Is he producing? Absolutely not. Can
he produce? Absolutely
not.’
[87]
The
appellant’s nephew was asked whether, in his opinion as a young
man coming into the business, it was worthwhile to have
the appellant
there. Jarrad replied:
‘
Definitely
not, you know the fact that he is, his title is our CEO, he is far
from there. The functions that he performed and the
responsibilities
that [he] held prior to the accident he is not able to fulfil any
more. Currently he is basically a glorified
site supervisor. So
definitely not, we would not employ someone in the price range that
he cost per month and what he does.’
[88]
The
appellant himself testified that he no longer knows about new
products, he cannot adsorb information and he struggles to retain

information. He finds it very frustrating. He could now only quote on
small jobs and do site management. He was asked whether his
injuries
had affected BPW’s business. This was his answer:
‘
Ja,
there’s no question about it. I really believe that had I been
able to put the kind of time and effort into it that
Russie
and Jarrie does and
Sean
does, you’d have someone else powering ahead the way they do
and, as I said, they protect me a lot and it’s wonderful
to
feel wanted in that situation but I’m a frigging drain on the
business.’
[89]
The
witnesses gave many practical examples in support of these general
statements. The respondent’s own lay witness, Swartz,
confirmed
in chief that the appellant’s capacity had definitely been
reduced when he returned to work and it remain so until
Swartz left
the company in the middle of 2011. When asked to explain his answer,
he said:
‘
He
spent a lot less time at the office. He was definitely more at home.
His ability to function was definitely less. He battled
with memory.
He battled with trying to work on the bigger tenders, to work with
the various figures and the calculations... .’
In
cross-examination he agreed that prior to the accident the appellant
had been sharp in all aspects of the business and could
do big quotes
– he could, as Russ put it in a vivid metaphor, ‘quote to
paint Table Mountain’. After the accident
he was unable to do
large quotes and did substantially less office management. When the
joint minute of the neuropsychologists
was put to him, there was
nothing with which he disagreed and he was able to confirm a number
of their findings.
[90]
As to
the fact that at the time of the trial the appellant was still
recorded on BPW’s website as being the corporation’s

chief executive officer, the appellant and Russ were not asked about
this. When the information on the website was put to Jarrad
in
cross-examination, he said a lot of the content was nearly a decade
old and that they intended to create a new website shortly.
He also
said that BPW was a family business: ‘We would want to make him
still feel part of the business, we don’t want
to you know make
him feel insignificant in the business.’
[91]
My
colleague considers that Jarrad’s appointment enabled BPW to a
very large extent to function normally despite the appellant’s

injuries. Even if this conclusion were not foreclosed by the
agreement between the experts, I do not think it is justified on the

evidence, bearing in mind the trial court’s factual findings.
When Jarrad testified in October 2014 he was 25 years old.
He had
joined the business full-time shortly after the appellant’s
accident. Despite having been in the business for more
than four
years, he said he had only been able to take over some of the
appellant’s duties. He had not yet achieved some
of the
appellant’s pre-accident skills. He was asked whether he and
the post-morbid appellant in combination were equal to
the appellant
in his pre-morbid condition:
‘
Definitely
not. Like I say, Glenn had a client base of 30 years, he had 30 years
of work experience in this industry, knowledge
that I haven’t
achieved and obviously only comes with time. So definitely not.’
[92]
The
witnesses called by the appellant impressed the trial court as honest
and credible. The trial court’s assessment of the
appellant
fortified the views expressed about his deficits. The trial judge
noted that the appellant lost concentration on a number
of occasions
and was not able to follow the thread of the questions. The trial
court found as a fact that prior to the accident
the appellant was
functioning as BPW’s chief executive officer; that after the
accident he was not employable in the open
market; and that his
post-accident employment at BPW was functionally at the level of a
site manager for smaller jobs. There were
ample grounds for this
finding and certainly no basis for disturbing it.
[93]
My
colleague says that Swartz’s departure, rather than the
appellant’s injuries, may have been the reason for BPW’s

poor performance in the 2012 financial year. The parties were,
however, alive to this extraneous impact on BPW’s performance.

The experts made an agreed upward adjustment to BPW’s ‘injured’
turnover to reverse the negative effect of Swartz’s
departure.
The figures contained in their joint minute reflect this adjustment.
Despite the adjustment, BPW earned substantially
less turnover than
would have been the case if its business had followed the trajectory
of the agreed WCBI index.
[94]
The
trial court found Edwards to be an impressive witness who was
knowledgeable and applied a degree of conservatism in reaching
his
conclusions. Van der Elst, by contrast, did not impress the trial
court which considered that not much reliance could be placed
in his
evidence. The trial judge noted various justifiable criticisms by the
appellant’s counsel of Van der Elst’s
evidence.
[95]
There
was thus ample evidence, quite apart from the forensic accountants’
joint minute, that the appellant’s reduced
abilities had
negatively affected BPW’s operations. Because he had a 50 per
cent membership of BPW, and because he and his
brother shared BPW’s
net profits (whether by way of salary or distributions), a decrease
in BPW’s net profits would
translate into a loss of income for
the appellant.
The sales
allocated to appellant
[96]
The
respondent’s counsel placed considerable emphasis on the fact
that in BPW’s management accounts for the period 2009-2014
a
significant part of the corporation’s turnover was identified
as sales generated by the appellant. This was said to be
inconsistent
with a contention that the appellant’s injuries had compromised
his ability to earn substantial revenue for
the corporation. Russ and
Jarrad explain this apparent anomaly. They said that the corporation
obtained quite a lot of repeat business.
If persons who had been the
appellant’s customers prior to the accident gave the
corporation repeat business, the sales would
be allocated to the
appellant. However, the quoting for these jobs, if they were larger
assignments, would be done either by Jarrad
or by the appellant with
Jarrad’s assistance. To the extent that the appellant was
involved in setting up the sites for these
jobs, his work suffered
from all the inefficiencies I have already described. The allocation
of the sales to the appellant was
of no practical importance because
neither he nor Russ earned commission on their sales.
[97]
Apart
from the fact that Russ and Jarrad were assessed by the trial court
to be honest and credible (an assessment we have no grounds
on appeal
to disturb), their explanation accords with the known facts. For all
practical purposes the experts were agreed that
the appellant was
unemployable in the open job market. It would be miraculous if, with
all his deficits, he could have continued
to generate the same sales
as before. The truth of their explanation is corroborated by the fact
that sales running into hundreds
of thousands of rands were allocated
to the appellant during the period of more than 13 months immediately
following the accident
when he was not at work at all. I thus cannot,
with respect, agree with my colleague’s finding that the sales
allocations
can be relied upon as evidence of the appellant’s
true earning abilities (paras 13-14).
The three
disputed issues arising from joint minute
The gross
profit margin
[98]
For
the reasons I have given, the parties were bound by the methodology
and factual assumptions agreed in the joint minute between
the
forensic accountants. Of the three points of difference between the
accountants, the respondent’s counsel did not argue
that the
trial court had erred in preferring Edwards’ assumptions
regarding gross profit margins to those of Van der Elst.
Indeed Van
der Elst said in cross-examination that, after Edwards’
testimony, he and Edwards had discussed the gross profit
margin
assumptions. He had told Edwards that he did not think that Edwards’
approach was unreasonable and he believed Edwards
would confirm that
Van der Elst’s approach was also not unreasonable. In truth
Edwards had by this time explained during
his testimony why he
regarded Van der Elst’s approach as unreasonable. At any rate,
and even if Van der Elst’s assumption
was not unreasonable, we
cannot interfere with the trial court’s finding just because he
preferred one reasonable assumption
over another.
The 2009 and
2012 losses
[99]
The
second point of difference, namely the effect of
Rudman
for
the two years where BPW suffered net losses, was also not the subject
of any argument before us. Van der Elst in cross-examination
was
unable to explain why
Rudman
supposedly
had the effect that BPW’s losses should be ignored, stating no
more than that he had followed his instructions.
Gratuitous
component of appellant’s earnings
[100]
The
third point of difference was how to determine the gratuitous
component of the ‘salary’ which the appellant received

from BPW after the accident. The forensic accountants agreed that a
component of this salary was gratuitous and should thus not
be
deducted in arriving at the appellant’s loss of earnings.
Underlying this agreement is one of the well established exceptions

to the general rule that an injured person can recover no more than
his net loss, namely the exception that amounts which the injured

person has received on account of a third party’s benevolence
or charity need not be brought into account. The exception
is founded
on essential notions of justice and fairness. The third party’s
benevolence is directed at the injured person,
not the wrongdoer:
‘
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 relatives or of the public at large
and
that the only gainer would be the wrongdoer.’
(
Parry
v Cleaver
1970 AC 1
at 14, quoted by Rumpff JA in
Santam
Versekeringsmaatskappy Bpk v Byleveldt
1973 (2) SA 146
(A) at
150F-H.)
[101]
If,
out of benevolence, an employer allows an injured employee to return
to work and to perform such limited tasks as he is able
to do, and
continues to pay him a salary, the injured employee is not obliged to
deduct such salary when quantifying his loss of
earnings.
Byleveldt
was
just such a case. It is apparent from the majority judgments that a
court must examine the substance of the matter. The fact
that an
amount labelled as ‘salary’ is paid does not mean that
the recipient has earned it or that it is not in truth
a payment
motivated by benevolence.
[2]
There are judgments to similar effect in England,
[3]
Canada
[4]
and Australia
[5]
where the same exception applies. The judgment of the Court of Appeal
for British Columbia in
Kask
v
Tam & another
1996
CanLII 1929
(BCCA) is quite close to the present case, involving as
it did an injury to one of two brothers who ran a company.
[102]
The
fact that a ‘salary’ of the foregoing kind, paid to an
injured employee out of benevolence, is recorded in a company’s

financial records as a salary rather than a donation is neither here
nor there. I should think it extremely likely that a company
which
pays an injured employee a benevolent salary would record the amount
as a salary, deduct employee’s tax and so forth.
We are not
here concerned with any question which might arise between the
company and the fiscus. In
Byleveldt
Wessels
JA, who delivered one of the two majority judgments, said that it may
have suited the employer to treat his benevolence
as salary for
services rendered since he could record the payments as a business
expense in his books (166G-H). Prof
Boberg
,
commenting on the judgments in this case, including Trollip JA’s
dissenting judgment, observed as follows:
‘
The
approach of Trollip JA, it is respectfully submitted, is unrealistic.
No doubt an employer’s motive for hiring an employee
is
normally irrelevant, and the court cannot concern itself with the
quality of the employee’s counter-performance. If Byleveldt
had
secured employment with a new employer who had perhaps not
appreciated the full extent of his incapacity, and who had thereafter

kept him on the payroll through
contractual
obligation, ignorance or inertia, the learned judge’s reasoning
would have been correct. But it was not so. All
the evidence
indicated that Byleveldt had been re-employed by his former employer
purely as an act of charity. The fact that he
chose to clothe his
bounty in an “employment contract” – whether
because it was economically more advantageous
(as Wessels JA
suggested at 166) or perhaps out of respect for Byleveldt’s
dignity – could make no difference. When
he entered into the
contract with full knowledge of Byleveldt’s inadequacy he gave
charity, and each month that he paid Byleveldt
his “wages”
and tacitly renewed the contract (which he could presumably have
terminated on due notice) he repeated
that charity. Moreover, one may
challenge Trollip JA’s assertion that it was irrelevant that
“those wages were excessive
in relation to the quality of the
services rendered” (169). In another branch of the law, a sale
at a price deliberately
far below the true value of the
merx
constitutes
a donation of the excess. Was this not a donation of the amount by
which the wages exceeded the value of Byleveldt’s
services
(which was nil)?
For
this reason the realistic approach of the majority, who went behind
the “employment contract” and gave effect to
the true
character of the benefit which accrued to Byleveldt, is to be
preferred.’
(P
Q R Boberg
The Law of Delict
at 587.)
[103]
The
legal principle not being in doubt, the question whether the ‘salary’
received by the appellant must be brought
into account is a factual
one, namely whether its receipt was prompted by considerations of
benevolence on the part of BPW. The
appellant and Russ did not have
written employment contracts with BPW. It was not suggested that
there was a pre-existing contractual
arrangement which entitled the
appellant to continue receiving the salary of a chief executive
officer despite his severe impairment.
The respondent’s counsel
submitted that, by virtue of his 50 per cent membership of the close
corporation, the appellant
had a proprietary right to half of the
corporation’s profits. This submission is fallacious and does
not in any event meet
the point that the appellant was not entitled
to receive, as salary (as distinct from profit-share), an amount
equal to what he
received before the accident. His salary entitlement
would have been affected by the reduced functions he was able to
perform.
[104]
The
fallacy in the submission is that it assumes the permanence of BPW
and the appellant’
s 50
per cent membership interest. A domestic
partnership of this kind is anything but permanent. Legally Russ
could not be compelled
to continue in a business in which he and the
appellant each held 50 per cent but to which the appellant could no
longer meaningfully
contribute. A close corporation can be wound up
on the same grounds as a company, including that it is just and
equitable to do
so. If the appellant declined to surrender his
interest in the corporation, Russ could apply for its liquidation and
the application
would inevitably succeed. Russ could then start in
the same line of business for his own account. If the evidence
established that
Russ only continued in a 50/50 arrangement with his
brother out of benevolence, the court should have regard to the
substance of
the matter and treat any payments derived by the
appellant as a member of the corporation as the product of
benevolence.
[105]
Apart
from the fact that the forensic accountants agreed that a portion of
the appellant’s receipts were gratuitous, the trial
court found
this to have been the case and there were ample grounds for that
finding. I have already referred to some of the evidence
describing
the appellant’s abilities prior to the accident and the
devastating effect of his injuries on his post-accident
performance.
It would thus not occasion surprise that Russ only remained in the
50/50 relationship out of benevolence. One would
not have expected
the 50/50 relationship to have endured between persons dealing with
each other at arm’s length. Russ’
evidence was thus
entirely plausible when he testified that the only reason for the
appellant still being involved in the corporation
was that the
appellant is his brother. His evidence was that if the appellant was
not his brother he would definitely not be working
for the
corporation any more. When asked why he kept his brother on, his
reply was: ‘It’s my brother, he would have
done the same
for me.’ If it had been anyone else, he would have ‘pulled
the plug’ a long time ago: ‘I
would have taken that 50
per cent that I own … and I would have called it a day long
ago.’ This evidence was not challenged
in cross-examination.
[106]
One
should also bear in mind that it would be natural for Russ to want to
bring his son Jarrad into the business as a partner, particularly

since the appellant can no longer pull his weight. While I do not
think, on the evidence, that in the years immediately following
the
accident Jarrad was close to being the appellant’s pre-morbid
equal, Jarrad is likely to become an increasingly valuable
member of
staff as he acquires experience and assumes greater responsibilities.
If Jarrad were eventually to become a complete
substitute for the
appellant, it is unrealistic to suppose (except on grounds of
benevolence) that the appellant could continue
as member of the
corporation while Jarrad remained a modestly remunerated employee.
[107]
It is
worth reflecting, for a moment, on the far-reaching and unjust effect
of the court a quo’s decision. The appellant was
not only
deprived of his claim for the loss of past earnings over the period
2009 to 2014. He was also denied any claim for loss
of future
earnings over the eleven-year period from March 2014 until his likely
pre-morbid retirement age of 65. Since the appellant
is effectively
unemployable outside of the family business, he would – if the
court a quo’s judgment stood –
have no income were Russ
to terminate the partnership (ie liquidate the corporation), and he
would have no compensation for the
loss of his income. This loss to
the appellant can be avoided only for as long as Russ maintains his
benevolent disposition. The
responsibility for making good the
appellant’s loss is thereby shifted from the wrongdoer (here
represented by the respondent)
to BPW and Russ. The law should not,
and does not, compel such an unpalatable result.
[108]
The
trial court was thus entitled to find that a part of the appellant’s
post-injury salary was gratuitous, ie the product
of benevolence.
Indeed, the respondent’s counsel during the course of the trial
specifically invited the judge to record
that the respondent admitted
that all the amounts received by the appellant over the period of 24
November 2007 (the date of the
accident) and January 2009 (when the
appellant first returned to work in a reduced capacity) were
gratuitous. In regard to the
period as from January 2009, the only
remaining question was the method of determining the gratuitous
portion. The experts offered
two different methods. In the present
appeal the respondent’s counsel did not argue that the trial
court had fallen into
demonstrable error by preferring Edwards’
method to Van der Elst’s.
Concluding
matters
[109]
In
regard to Van der Elst’s belated introduction of the WCBI
October 2014 report, the respondent’s counsel submitted
that,
if we were to overturn the court a quo’s application of
Rudman
,
we should remit the matter to the trial court for a calculation of
the appellant’s loss of future earnings in accordance
with the
October 2014 report. In view of what I have said concerning the
binding nature of agreements between experts, I do not
think this
course is justified.
[110]
I
gather from the evidence that these reports are issued monthly. When
presenting a case for trial, a cut-off date has to be chosen.
The
experts agreed to choose 28 February 2014 as the cut-off date and to
use the WCBI report of March 2014. No reference was made,
during
Edwards’ testimony, to the possible use of a later date and a
later index report. And despite the clear recordal by
the appellant’s
counsel, no supplementary expert report was filed before Van der Elst
testified in support of the use of
the later index report. From the
limited cross-examination of Van der Elst regarding the later report
(limited, because the appellant’s
legal representatives had not
been timeously notified of the point), its reliability and accuracy
are not beyond doubt. It would
be unfair to use the later report
without affording the appellant the opportunity of reopening his
case. And of course by now there
will be more recent reports. Either
side could cherry pick the report which happened to set the starting
value for the calculation
of the prospective loss at a higher or
lower amount. The parties should thus be held to the agreement of
their experts.
[111]
My
colleague considers that the appellant failed to prove that, in
consequence of his injuries, he would probably retire early.
He bases
this conclusion in part on his finding that over the period 2009 to
2014 the appellant generated the sales allocated to
him in the
management accounts. For reasons I have explained, those allocations
do not, in my opinion, reflect the appellant’s
earning
abilities. If the appellant receives no compensation for the damage
to his earning capacity, he may have no choice but
to soldier on past
the age of 60. It is clear, however, on the evidence that it would
not be reasonable to expect him to do so.
[112]
His
wife described in great detail the fatigue from which he suffers and
how agitated he becomes on Sunday evenings at the prospect
of another
working week. She said that he struggled every day to get up and go
to work. The appellant testified that he felt ‘absolutely

beaten’ at the end of each working day. He has to take a nap
before dinner. Sunday nights were ‘horrid because Monday
comes
again for five days’. He described weekends as being for him a
‘lifesaver’, they made it possible for him
to get
‘through the five days of hell’. Asked why he was still
working, he answered that he had to pay the bills. Neither
the
appellant nor his wife were challenged in cross-examination about
this evidence. The trial court accepted it as truthful. An
appellate
court in my view can have no basis for disturbing the finding.
[113]
As to
the possibility that the appellant, uninjured, may have retired
earlier than 65, it is clear that pre-morbidly he found his
work
enjoyable and energising, quite the opposite of his post-morbid
disposition. The trial court was entitled to find that he
would
probably have retired at 65.
[114]
I
conclude by mentioning the contingency deductions made by the trial
court: 5 per cent in respect of past loss of earnings, 20
per cent in
respect of future loss of earnings. Since the only unknown factor in
regard to the past loss of earnings was how BPW
would have performed
if the appellant had not been injured, the 5 per cent deduction made
allowance for the possibility that the
business might have lagged
behind the WCBI. One should bear in mind that there is the
possibility that BPW’s business might
have out-performed the
index and that the contingencies of life are not always negative.
[115]
In
regard to the future loss of earnings, the standard actuarial
calculation would have taken account of the appellant’s
mortality risk (ie life expectancy). The trial court observed that
the ‘normal’ contingency deduction for future loss
of
earnings is 15 per cent but increased this to 20 per cent because of
the long-term survival risks of the family business and
the
possibility that the appellant premorbidly might have retired before
the age of 65.
[116]
I do
not think, with respect, that one can speak about a ‘normal’
contingency deduction for loss of future earnings,
at least not
without taking into account the age of the claimant. For obvious
reasons, the younger the victim, the longer the period
over which the
vicissitudes of life will operate and the greater the uncertainty in
assessing the claimant’s likely career
path. Since the
appellant’s future loss of earnings only spanned eleven years,
a 15 per cent contingency deduction might,
absent special
circumstances, have been at the high end.
[117]
Nevertheless,
I think the trial court was right to find that in this particular
case there were reasons justifying an above-average
contingency
deduction. And while the factors the trial court mentioned were
certainly relevant, there were additional factors which
seem not to
have been taken into account. These are the following:
(a) Although
the appellant was a very important part of the success of BPW, the
fortunes of the corporation also depended on
the synergies between
himself and Russ. If Russ were to pass away prematurely or become
unable to work, this might affect BPW’s
performance.
(b)
The same may be true in respect of other valuable members of staff,
as illustrated by the impact that Swartz’s departure
in June
2011 had on the business.
(c)  In
regard to the appellant himself, he was – premorbidly –
somewhat more at risk of injury and disability
than the average
54-year-old, given his passionate involvement in cycling and surfing.
These are activities with which he would
have continued, but for the
accident on 24 November 2007.
(d)  The
appellant was and is diabetic. Although the evidence was that his
diabetes was under control, it is a condition
which can give rise to
health complications.
[118]
In all
the circumstances, I consider that the contingency deduction for
future loss of earnings should be increased to 25 per cent.
In regard
to the costs incurred in the court a quo, this limited success for
the present respondent would not have made it the
substantially
successful party in the full court appeal. Its case in the court a
quo was that the appellant was not entitled to
anything in respect of
damage to his earning capacity. That case, as the majority of us
find, should have failed. There is no indication
that in the court a
quo the respondent advanced, in the alternative, that the award
should be reduced by increasing the contingency
deduction
[119]
I thus
make the following order:
(a)  The
appeal is upheld with costs, including the costs of two counsel.
(b)  The
order of the court a quo is set aside and replaced with the following
order:
‘
(i)  The
appeal succeeds to the extent set out below.
(ii)
Para 1 of the trial court’s order is amended by substituting,
for the   amount of R7 532 400
in respect of
future loss of earnings, the amount of R7 061 625.
(iii)
Save as aforesaid, the appeal is dismissed.
(iv)  The
appellant (the Road Accident Fund) shall pay the respondent’s
(Mr GM Bee’s) costs of appeal, including
the costs of two
counsel to the extent that two counsel where employed.’
______________________
O L Rogers
Acting
Judge of Appeal
APPEARANCES
For
Appellant:
M H van Heerden SC and C W
van Niekerk
Instructed
by:
Sohn & Wood
Attorneys, Cape Town
Honey Attorneys,
Bloemfontein
For
Respondent:
D Potgieter SC and C Bisschoff
Instructed by:

Abdurahman Z Attorneys,
Cape Town
Webbers Attorneys,
Bloemfontein
[1]
Minister
of Safety and Security v Slabbert
[2009]
ZASCA 163; [2010] 2 All SA 474 (SCA) para 22;
Molusi
v Voges NO
[2015]
ZASCA 64; [2015] 3 All SA 131 (SCA) para 19
.
[2]
Other cases to similar effect in
this country include:
Henning
v South British Insurance Company Ltd
1963
(1) SA 272
(O);
Campbell
v Van Niekerk
1967
(2) PH J27 (D);
Road
Accident Fund v Coughlan NO
[2011]
ZAWCHC 10
(2 March 2011), a judgment of a full court confirming the
decision of the trial judge that any 'salary' the claimant received
from a family company following his injury was the product of
benevolence (paras 43-45);
Fulton
v Road Accident Fund
2012
(3) SA 255
(GSJ) at 261I-262A.
[3]
Dennis v London Passenger
Transport Board
[1948]
1 All ER 779
;
Cunningham
v Harrison
[1973] 3
All ER 463
(CA) at 468c.
[4]
Gillis v
Breau
(1971) 19 DLR (3d) 615
[5]
Zheng v Cai
[2009]
HCA 52.