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[2026] ZAGPJHC 1052
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Duvel v Minister of Police (18/27561) [2026] ZAGPJHC 1052 (10 September 2026)
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FLYNOTES:
PERSONAL INJURY – Unlawful arrest and detention –
Loss
of income
–
Respected
businessman arrested publicly and detained overnight –
Arrest causing reputational harm and decline of museum,
restaurant
and associated activities – Financial expert tracing
substantial post-arrest revenue decline – Future
loss
calculations accepted subject to additional contingency –
Past earnings claim failing because evidence concerned
unpleaded
loss of loan asset – Damages awarded for deprivation of
liberty, reputation and future earnings – R4,145,726.05
for
future loss of earnings.
REPUBLIC
OF SOUTH AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
LOCAL DIVISION, JOHANNESBURG
Case
Number: 18/27561
(1)
REPORTABLE: YES / NO
(2)
OF INTEREST TO OTHER JUDGES: YES/NO
(3)
REVISED: YES/NO
In
the matter between: -
SIEGHART
ERNEST DUVEL
Plaintiff
and
MINISTER
OF
POLICE
1
st
Defendant
WARRANT
OFFICER BRIJLALL
2
nd
Defendant
MONICA
KHALEMA
3
rd
Defendant
PAULE
MPETE
4
th
Defendant
NATIONAL
DIRECTOR OF
PUBLIC
PROSECUTIONS
5
th
Defendant
JUDGMENT
Van
Aswegen AJ
INTRODUCTION:
[1]
The Plaintiff
instituted claims
against the Defendants for his unlawful arrest and detention on
10
February 2016
.
The action came before S Kruger AJ who separated the issues of merits
and quantum. The trial focused on the merits and ultimately
ruled in
favour of the Plaintiff concerning Claims A, C, and D.
[2]
The First, Second and Fifth Defendants were held jointly and
severally liable for:
[2.1]
claim A - payment of damages resulting from the wrongful and unlawful
arrest and detention of the Plaintiff in respect
of
contumelia,
deprivation of bodily freedom, liberty and discomfort including
damages caused to the Plaintiff's good name, dignity, reputation
and
standing in community.
[2.2]
claim C - the Plaintiff’s past loss of earnings and
[2.3]
claim D - loss of profit suffered by the Plaintiff from loss of
income through the restaurant, pub and museum because
of the unlawful
arrest and detention of the Plaintiff.
[3]
The current case, before me, is solely focused on ascertaining the
monetary value associated with these particular claims.
[4]
the commencement of this trial, the Plaintiff sought leave to amend
paragraphs 46 and 49 of its Particulars of Claim.
The amendment
[1]
related to:
[4.1]
deletion of paragraphs 46, substituting it with a new paragraph 46 as
well as the quantum claimed, namely
R1 406 594.00
in
respect of Claim C and
[4.2]
deletion of paragraph 49 , substituting it with a new paragraph 49 as
well as the quantum claimed, namely
R4 500 000.00
in
respect of Claim D.
[5]
The amendment was not opposed and was granted. The Plaintiff
therefore contends that the amounts set out below are reasonable
in
respect of each claim:
CLAIM
A
[5.1]
Payment of the amount of
R130 000.00
in respect of damages for
l and depravation of bodily freedom, and liberty and discomfort
suffered by the Plaintiff and
[5.2]
Payment of
R250 000.00
in respect of the damages caused to the
Plaintiff's good name, dignity, reputation and standing in the
community.
CLAIM
C
[5.3]
R1 406 594.00
for
past loss of earnings.
CLAIM
D
[5.4]
R4 500 000. 00
for future loss of earnings.
FACTUAL
MATRIX:
[6]
The Plaintiff, is an engineer with a MBA, an elderly person with
weakened leg muscles and diabetes, who was arrested on
10 February
2016
between
16h00 and 17h00.
[7]
Before his arrest, the Plaintiff enjoyed a good reputation and
standing in the community and rendered services to charitable
organisations. The arrest took place in the presence of patrons of
the Plaintiff’s museum, restaurant and pub.
[8]
The Plaintiff was detained at the Vanderbijlpark
Police Station from approximately
18:00
on
10 February 2016
to 08:30 on
11
February 2016
. He described the
conditions as humiliating, inhumane and uncomfortable. He was then
taken to the Vanderbijlpark Magistrate’s
Court where he was
further detained in the court cells. Bail was granted and he was
released on
11 February 2016
at
13:00
after paying the bail amount.
[9]
During the trial on the merits, the Plaintiff called two witnesses:
himself and Ms. Callow. The Defendant chose not to
call any witnesses
and did not challenge the evidence presented by these witnesses or
the concessions made by Mr. Mpete and Warrant
Officer Brijlall.
EVIDENCE
ACCEPTED BY TRIAL COURT ON MERITS
[10]
Acting Justice S Kruger in his judgment based on the merits had
accepted the following undisputed evidence, namely that:
PLAINTIFF’S
EVIDENCE:
[10.1]
The Plaintiff testified that he was born in
September 1952
. He
further testified that he is a civil engineer and holds an MBA from
the University of the Witwatersrand.
[10.2]
He conducted business from the premises where he was arrested, namely
a Heritage Museum (which takes up some 3000 square
metres under
roof), a restaurant known as
Urban Vibes
, and a pub known as
Cock & Bull
. The premises were situated on agricultural
holdings west of Vanderbijlpark.
[10.3]
Objects of a cultural nature portraying development of household
items, fashion, technological aspects, toys and the
like were
displayed in the museum. The toy section included a display of rare
dolls. Many vintage; classic and exotic cars were
available for
display to the public such as a collection of up to 12 Model T Fords
and the like.
[10.4]
The restaurant and pub were located to the left and right side of
the
museum.
[10.5]
The pub is around 20 meters and the restaurant some 40 meters from an
office from where the Plaintiff conducted the
businesses. There is a
court yard which borders the museum, pub and restaurant where around
60 patrons can sit on benches under
a multitude of trees.
[10.6]
The Plaintiff testified that, on
10 February 2016
, he was in
his office when Warrant Officer Brijlall arrived at approximately
16:00
and informed him that he intended to arrest him. Warrant
Officer Brijlall did not have a warrant at that stage and left to
obtain
one. He returned at approximately
17:00
, accompanied by
other uniformed police officers. The Plaintiff was then arrested.
Warrant Officer Brijlall took him by the sleeve
and led him through
the courtyard to a vehicle parked just outside it. At the time, the
courtyard was full of patrons, including
Rotarians who were present
with visitors from the United States of America. Many were seated on
benches under the trees and observed
the arrest. On a later occasion,
the Plaintiff was shown a text message from a Texan visitor stating
that he had witnessed the
arrest.
[10.7]
The Plaintiff further testified that he was detained in a police cell
with seven other persons. Two indicated that
they were detained on
assault charges, and another on a fraud charge. He slept on a
mattress approximately 50 mm thick and was
given two blankets, one of
which he used as a cushion. The other blanket he had used to urinate
in frequently. He described the
experience as daunting and
unpleasant. Ms Callow brought him his medication. The following
morning, he was taken to court, where
the charges were read to him at
approximately
12:00
. Bail was granted in the amount of
R20
000.00
, which he could not afford. It was eventually paid by
another person, after which he was released. He was thereafter
required to
appear in court on five occasions, the last of which was
in
November 2016
.
[10.8]
The Plaintiff testified that the arrest, detention and prosecution
emotionally affected him to the extent that he became
despondent and
depressed. Prior to his arrest, detention and prosecution he held a
positive view of South Africa and its people.
The
events disappointed and traumatised him to the extent that he lost
faith in the country. He could not understand how such events
could
occur in South Africa. News of his arrest in front of patrons, his
detention and the prosecution spread on social media.
The Plaintiff
was unjustly stigmatised as being involved in criminal activity. He
was prescribed further medication following the
trauma he suffered as
a result of what he had been subjected to.
[10.9]
Mr Duvel further testified that the arrest and detention had a
devastating effect on the museum, pub and restaurant,
causing him
substantial financial stress. The pub and museum had been established
around
2000
, and the restaurant around
2013
. Before the
arrest, detention and prosecution, the businesses were financially
sound. Although they continued to be operated in
the same manner as
before, patrons no longer frequented them as they had previously
done. The Plaintiff did not recall the Rotarians
ever returning to
the premises. Owners whose cultural items and other objects were
displayed at the premises were also unwilling
to continue doing so
because of the arrest, detention and prosecution.
[10.10]
In an attempt to keep the businesses afloat, various items, including
most of the vintage cars, were auctioned or
sold to generate income,
but without success. The Plaintiff also hosted the annual two-day
Wheels at the Vaal Motor Show
at the premises, which benefited
his businesses. Participants were invited to display classic and
vintage vehicles, together with
other items associated with different
eras. Vendors paid a fee to set up stalls and sell their goods to
patrons and visitors. Before
the Plaintiff’s arrest and
detention, the event was popular and generated approximately
R100
000.00
per show. Thereafter, sponsors lost interest and potential
vendors stopped applying for stalls. The
2016
show was the
last, as sponsors and vendors could no longer be attracted in
sufficient numbers for the event to continue. The Plaintiff
became a
recluse.
[10.11]
The Plaintiff was unaware of any complaint against him and was not
consulted before the arrest.
MS
CALLOWS EVIDENCE:
[10.12]
Ms Callow testified that she had been employed by the Plaintiff for
many years in an administrative capacity. Her
duties included
capturing income and expense data for the businesses and preparing
their submissions to the South African Revenue
Service. She witnessed
the Plaintiff’s arrest on
10 February 2016
at his
business premises, in the presence of members of the public,
particularly patrons of the businesses. She also compiled and
prepared the budgets for the Plaintiff’s businesses, namely the
pub, restaurant and museum. In relation to the
Wheels at the Vaal
Motor Show
, she was closely involved in organising the annual
event, including securing sponsors and vendors. The event usually
took place
around September and required approximately six months of
preparation.
[10.13]
Ms. Callow further testified that, before the Plaintiff’s
arrest, the businesses were popular and financially
successful. The
same applied to the annual motor show held at the business premises.
Sponsors and vendors were readily secured
for the event, and its
popularity was such that vendors often approached the organisers to
book stalls. Some vendors even reserved
stalls for the following year
shortly after participating in the current event. Ms. Callow
described the relationship with the
vendors as being like family.
[10.14]
Ms Callow testified that the position changed dramatically after the
Plaintiff’s arrest. Vendors who had already
booked stalls
cancelled their participation, and sponsors lost interest, with many
unwilling to continue their support. Vendors
who had participated in
previous years also failed to return. Unlike in earlier years, the
2016
motor show was unsuccessful and was the last event to be
held.
[10.15]
Ms. Callow testified that the downturn in the businesses was
attributable to the Plaintiff’s arrest, detention
and
prosecution. She stated that the arrest created a negative public
perception and attached a stigma to the Plaintiff, causing
patronage
to decline. Even regular patrons stopped supporting the businesses,
including the Rotarians who had previously made regular
bookings at
the premises. According to Ms. Callow, the Plaintiff suffered
financial loss as a result of the decline and eventual
loss of the
businesses. Within approximately six months of the arrest, supporters
requested the return of artefacts they had provided
for display, and
collections exhibited at the museum had to be auctioned. None of the
businesses survived. Ms. Callow further testified
that she took
medication to the Plaintiff during his detention and collected him
after his release. She observed marked emotional
trauma in him: he
became quiet and withdrawn. In her view, the Plaintiff spoke about
what had happened to him as a way of trying
to deal with the trauma
caused by his arrest.
LEGAL
PRINCIPLES
APPLICABLE TO ASSESSMENT OF DAMAGES FOR UNLAWFUL
ARREST
[11]
In South Africa, unlawful arrest and detention represent a grave
violation of fundamental constitutional rights. Section
12 of the
Constitution safeguards every individual's entitlement to freedom and
personal security, encompassing the right to be
free from arbitrary
deprivation of freedom or without just cause. This safeguard is
intrinsically connected to the right to human
dignity, as outlined in
section 10 of the Constitution.
[12]
In assessing quantum in unlawful arrest and detention cases, it is
imperative to strike a delicate balance between the
infringement of
liberty, dignity, and reputation suffered by the Plaintiff, and the
compensation awarded. This balance must ensure
that the State is not
penalized through excessive compensation, nor is the Plaintiff
unjustly enriched.
[13]
The assessment of damages for unlawful arrest and detention is a
matter within the court’s discretion, guided by
established
principles.
[14]
In
Minister
of Safety and Security v Tyulu
(327/2008)
[2009]
ZASCA 55
(27
May 2009)
,
the Supreme Court of Appeal held as follows:
‘
In
the assessment of damages for unlawful arrest and detention, it is
important to bear in mind that
the
primary purpose is not to enrich the aggrieved party but to offer him
or her some much-needed solatium for his or her injured
feelings. It
is therefore crucial that serious attempts be made to ensure that the
damages awarded are commensurate with the injury
inflicted
.
However,
our courts should be astute to ensure that the awards they make for
such infractions reflect the importance of the right
to personal
liberty and the seriousness with which any arbitrary deprivation of
personal liberty is viewed in our law. I readily
concede that it is
impossible to determine an award of damages for this kind of injuria
with any kind of mathematical accuracy.
Although it is always helpful
to have regard to awards made in previous cases to serve as a guide,
such an approach, if slavishly
followed, can prove to be treacherous.
The correct approach is to have regard to all the facts of the
particular case and to determine
the quantum of damages on such
facts. .
.
’ (my emphasis)
[15]
The correct approach is to consider all the facts of the particular
case. In
Minister
of Safety and Security v Seymour
[2]
the
Supreme Court of Appeal stated that a trial court must have regard to
all the facts of the particular case to determine the
quantum of
damages on such facts. This case stated that
the
primary purpose of damages in unlawful arrest and detention claims is
not punitive, but rather to provide a solatium for injured
feelings
and the infringement of constitutional rights.
[16]
While the length of detention is indeed a significant factor in
evaluating damages, it is not sufficient to calculate
the quantum of
damages through a simple count of the days spent in custody. A
comprehensive assessment must be carried out, encompassing
all
pertinent factors. These include the method of arrest, the level of
humiliation endured, the loss of freedom, the Plaintiff's
personal
circumstances, and the conditions under which detention occurred.
[17]
The Supreme Court of Appeal has repeatedly cautioned against a
mechanical approach to assessing damages.
[17.1]
In
Motladile
v Minister of Police
[3]
,
the Supreme Court of Appeal stated:
‘
The
assessment of the amount of damages to award a plaintiff who was
unlawfully arrested and detained, is not a mechanical exercise
that
has regard only to the number of days that a plaintiff had spent in
detention. Significantly, the duration of the detention
is not the
only factor that a court must consider in determining what would be
fair and reasonable compensation to award. Other
factors that a court
must take into account would include (a) the circumstances under
which the arrest and detention occurred;
(b) the presence or absence
of improper motive or malice on the part of the defendant; (c) the
conduct of the defendant; (d) the
nature of the deprivation; (e) the
status and standing of the plaintiff; (f) the presence or absence of
an apology or satisfactory
explanation of the events by the
defendant; (g) awards in comparable cases; (h) publicity given to the
arrest; (i) the simultaneous
invasion of other personality and
constitutional rights; and (j) the contributory action or inaction of
the plaintiff.’
[18]
In
Minister
of Safety and Security v Seymour
2006
(6) SA 320
(SCA),
a
judgment penned by Nugent JA he aptly noted:
“
[20]
Money can never be more than a crude solatium for the
deprivation of what in truth can never be restored. There
is no
empirical measure for the loss.”
[19]
This court also acknowledges Carelse J's caution regarding the
propensity to overstate damages claims without a solid
basis as
stated in the case of Diljan v Minister of Police
(2023) SACR 100
(GJ):
“
[23]
A word has to be said about the progressively exorbitant amounts that
are claimed by litigants lately in comparable cases
and sometimes
awarded lavishly by our courts. Legal practitioners should
exercise caution not to lend credence to the incredible
practice of
claiming unsubstantiated and excessive amounts in the particulars of
claim. Amounts in monetary claims…
should not be
‘thumb-sucked’ without due regard to the facts and
circumstances of each case.”
FACTORS
TO DETERMINE QUANTUM:
[20]
The factors set out here in below are taken into account in assessing
the quantum of damages:
PLAINTIFF’S
AGE
[21]
At the time of the arrest the Plaintiff was a 64-year-old elderly
civil engineer with an MBA qualification. The Plaintiff's
health was
not optimal; he was diabetic, significantly overweight, and had
weakened leg muscles which impeded his ability to stand
from a prone
position without assistance.
POSSIBLE
EXTENT OF HARM
[22]
The Plaintiff was detained with seven other arrested individuals all
younger than himself. He was detained in a cell
with no beds.
However, he was provided with a 50 mm mattress and two blankets.
There was a toilet in the corner of the cell. After
his detention,
the Plaintiff experienced psychological issues which needed
treatment.
DEGREE
OF RISK OF HARM MATERIALISING
[23]
Following the Plaintiff's release, a sense of suspicion arose within
the community, associating him with fraudulent activities
and money
laundering. This led to a wave of gossip that caused individuals to
distance themselves, unwilling to be linked with
him. The Plaintiff
subsequently experienced feelings of despondency and depression. It
is evident that the Plaintiff's arrest resulted
in detrimental
consequences.
PLAINTIFF’S
STANDING IN THE COMMUNITY
[24]
Prior to his arrest, the Plaintiff maintained an exemplary standing
and a commendable reputation within the community.
He was recognized
as a reputable businessman who actively contributed to the community,
notably by supporting and establishing
the Museum. However, following
his arrest, the community's perception of him underwent a significant
transformation. The public
began demanding the restitution of the
artefacts displayed in the Museum, prompted by damaging rumors
circulating both in the community
and on social media platforms.
These allegations led to the Plaintiff being portrayed as a fraudster
and linked with money laundering
PLACE
OF ARREST
[25]
The Plaintiff was arrested on the premises of his business, visible
to patrons and members of the Rotarian community
who frequented the
establishment. The incident occurred during a busy late afternoon
when the Rotary Club members were enjoying
sundowners with visitors
from America. The Plaintiff perceived the arrest as a public
spectacle. Uniformed police officers led
him through the courtyard,
in full view of the patrons, and forced him into the back of a police
vehicle. The Plaintiff expressed
feelings of shock and humiliation
arising from the incident.
HUMILIATION
SUFFERED
[26]
The Plaintiff endured considerable embarrassment. As previously
detailed, he was labeled a criminal, which subsequently
led to his
withdrawal from both societal engagement and his professional
ventures.
DISTRESS
ON PLAINTIFF AND HIS STANDING
[27]
The detention adversely affected the Plaintiff, leading to the
development of anxiety and depression. Consequently, he
ceased his
business activities, and within the community, he was erroneously
linked to allegations of fraud and money laundering.
PERIOD
OF INCARCERATION
[28]
On
10 February 2016
, the Plaintiff was incarcerated between
18:00 and 08:30
the next day he was transported to the
Vanderbijlpark Magistrate’s Court and subsequently detained in
the court cells. Bail
was subsequently granted and the Plaintiff was
released at
13:00
on the same day, post-payment of the bail
amount. Consequently, the Plaintiff was detained for an overnight
period.
PREVIOUS
COMPARABLE AWARDS
[29]
While it's beneficial to consider prior awards in similar cases, we
must remember that their scope is inherently limited.
These awards
primarily function as guiding principles rather than definitive
precedents. Therefore, they should not be applied
rigidly without
careful analysis.
[30]
In
Brits
v Minister of Police & Another
,
[4]
the Court held:
‘
Although
awards of damages made in previous decisions may serve as a guide in
the consideration of an appropriate amount of damages
for the injury
resulting from unlawful arrest and detention, such awards are not to
be followed slavishly, for every case must
be determined on its
facts. It must be borne in mind that the primary purpose of an award
of damages for unlawful arrest and detention
is not to enrich the
aggrieved party but to offer him or her some solatium for their
injured feelings.”
[31]
In unlawful arrest cases the
following awards were made by courts:
[31.1]
In
Motladile
v
Minister of Police
[5]
the
Supreme Court of Appeal awarded
R200
000
for
a four-day detention. This equates to
R50 000.00
per
day. In that matter, the court considered several aggravating factors
that are not present in the case before me. The Plaintiff
in
Motladile
had
voluntarily offered to assist the police and was arrested on
Christmas Day; he was denied access to his family and legal
representation;
he was assaulted by fellow inmates in the cells; he
suffered humiliation and degradation; and there was evidence of
improper motive
and malice on the part of the investigating officer.
[31.2]
The court awarded an amount of
R250 000.00
for
unlawful arrest and detention for approximately three days in
Khanyi
v Minister of Police
[6]
.
In Mhlanza
v
Minister of Police
[7]
the
Plaintiff was awarded
R75 000.00
for
detention overnight (from
13:00
on
the day of arrest until the morning of the next day after appearance
in court).
[31.3]
In
Diljan
v Minister of Police
[8]
for
the unlawful arrest and detention for four nights, this Court, on
appeal, awarded damages in the amount of
R120 000.
In
Minister
of Police v Page
[9]
for
the unlawful arrest and detention for one night,
R30 000
was
awarded as damages.
[31.4]
On appeal the court in
Shode
v Minister of Police
[10]
awarded
R40 000.00
where
the appellant was arrested and detained for one day.
[31.5]
In
Van
der Nest NO v Minister of Police
[11]
the
Plaintiff was detained for 20 hours and the Supreme Court of Appeal
awarded
R50 000.00
as
fair compensation.
[31.6]
In
Mojola
v Minister of Police
[12]
Reid
J had awarded
R40 000.00
as
compensation where the Plaintiff was detained for 15 hours, also in
view of members of the public, the Plaintiff isolated himself
as he
was viewed as a criminal, the conditions of the cell were untenable
and the Plaintiff perceived his safety to be at risk.
[31.7]
Similarly, in
Lekalakala
v Minister of Police and Another
[13]
the Plaintiff was arrested in the presence of family and community
members and was subjected to manhandling by police officers.
The
court regarded the public nature of the arrest and the humiliating
treatment as aggravating factors and awarded damages of
R120
000.00
.
The Plaintiff was detained from
23
August 2019 to 26 August 2019
.
[31.8]
In
Mmadu
v Minister of Police
[14]
,
the Plaintiff was arrested without a warrant and detained for
approximately 4 days. The court noted that the detention occurred
under appalling conditions in police cells that were overcrowded,
unhygienic, and lacked proper bedding, forcing the plaintiff
to sleep
on a thin, dirty mattress on the floor. These conditions, coupled
with the deprivation of liberty and the resulting
contumelia
,
significantly influenced the court's decision to award
R60 000.00
for
the unlawful arrest and detention and
R100 000.00
for
the assault.
[32]
Upon reviewing the aforementioned cases, it is reasonable to infer,
without imposing a strict precedent, that the courts
have allocated
compensatory damages within the range of
R30 000.00
to
R75
000.00
. The awarded sums fluctuate based on the specific
circumstances and nuances of each case.
[33]
However,
in
Van
der Berg v Coopers & Lybrand Trust (Pty) Ltd and others
[2000]
ZASCA 77
;
2001
(2) SA 242
SCA
at 260E-H, the court cautioned that:
“…
In
the nature of things no two cases are likely to be identical or
sufficiently similar so that the award in one can be used as
an
accurate yardstick in the other. Nor will the simple application of
an inflationary factor necessarily to an acceptable result.
The award
in each case must depend upon the facts of the particular case seen
against the background of prevailing attitudes in
the community.
Ultimately a Court must, as best it can, make a realistic assessment
of what it considers to be fair and just in
all the circumstances.
The result represents little more than an enlightened guess. Care
must be taken not to award large sums
of damages too readily lest
doing so inhibits freedom of speech or encourages intolerance to it
and thereby fosters litigation.
Having said that that does not
detract from the fact that a person whose dignity has unlawfully been
impugned deserves appropriate
financial recompense to assuage his or
her wounded feelings.”
[34]
In the matter before me the Plaintiff was detained overnight from
18:00 to 08:30
the next morning (14.5 hours) when he was taken
to the magistrate’s court. Subsequently, the Plaintiff was
detained in the
court cells from approximately
09:00 to 12:00.
The latter detention was however, awaiting his appearance in court.
[35]
After a comprehensive assessment of the Plaintiff's personal
circumstances and the various factors mentioned, it is clear
that the
individual was a 64-year-old man widely regarded as a respected
businessman who actively supported welfare organizations.
The arrest
occurred at the Plaintiff's business, in front of patrons,
particularly the Rotarian community that regularly visited
his
establishments. While these factors undeniably caused him
embarrassment and distress, there is no substantiated evidence
indicating
any physical maltreatment. The Plaintiff was held
for 14.5 hours in a cell alongside seven others, provided with a
mattress
and two blankets, and had access to a toilet in one corner.
Given his diabetic condition, his assistant, Ms. Callow, was allowed
to deliver his medication to him. Importantly, the Plaintiff was not
subjected to the degrading treatment experienced in cases
such as
Motladile
or
Mmadu
, where detainees were confined to
overcrowded, unhygienic cells lacking proper bedding.
[36]
Considering the tenets elucidated in
Motladile
, and
acknowledging the unique facts and circumstances of this case, this
court adopts a perspective that compensatory damages for
unlawful
arrest and detention primarily serve as solatium, rather than
punitive enrichment, while still acknowledging the gravity
of the
liberty infringement. This approach is informed by the precedent set
by the case of
Minister of Safety and Security v Tyulu
(2009) 5 SA
85
(SCA).
Additionally, the court takes note of
Woji v
Minister of Police
(2015) 1 SACR 409
(SCA)
and the constitutional
orientation of state obligations to respect entrenched rights,
viewing this case as a matter involving an
unlawful encroachment on
constitutional rights, thereby warranting compensation.
[37]
Having regard to the humiliating manner in which the arrest was
conducted, at the Plaintiff's business premises
under the
watchful eyes of patrons, the overnight detention, and the violation
of dignity and personal liberty, I believe a fitting
compensation for
contumelia, deprivation of bodily freedom, liberty, and discomfort
would be
R40 000.00.
PLAINTIFF’S
GOOD NAME, DIGNITY AND REPUTATION:
[38]
The manner of arrest is closely linked to the humiliation experienced
by the Plaintiff. An unlawful arrest not only infringes
upon physical
liberty but also significantly impacts an individual's dignity,
self-esteem, and reputation.
[39]
The extent of damages awarded to the Plaintiff is often
influenced by the gravity of the humiliation they endure,
particularly when
this humiliation is experienced by individuals who
hold esteemed positions in society, are professionals, elderly, or
belong to
a community of considerable standing. Various factors,
including the Plaintiff's age, occupation, social standing, and
personal
circumstances, are taken into account in order to determine
the appropriate level of compensation.
[40]
In the matter of
Motladile
,
the court highlighted the importance of considering the impact of
detention on the Plaintiff’s dignity and standing in society.
In
Diljan
v Minister of Police,
the
Supreme Court of Appeal held that the acceptable method of assessing
damages includes consideration of ‘
the
manner of the arrest’
and
‘
the
degree of humiliation’
suffered
by the Plaintiff. The court recognised that public embarrassment and
degrading treatment intensify the infringement of
dignity and justify
higher compensation.
[41]
The severity of humiliation escalates particularly when the arrest
lacks justification, remains unexplained, or is coupled
with damaging
allegations against the Plaintiff's character. Courts acknowledge
that the societal stigma associated with such an
arrest can endure
beyond the immediate release of the Plaintiff.
[42]
In
Masetla v President of South Africa and Another
[2007] ZACC 20
;
2008 (1) SA 566
(CC)
the following was stated in connection with the career and
reputation of an individual:
“ …
People
live not by bread alone; indeed, in the case of career functionaries,
reputation and bread are often inseparable.”
and
at
paragraph
82:
“
Reputation
and dignity are discrete concepts. Respect for reputation and dignity
of others is a requirement of our law with unfortunate
consequences
for defaulters.”
[43]
Reputational damage to an individual protects a person's right to a
good name and reputation.
Unlawful arrest affects not only physical liberty but also
dignity, self-worth, and reputation.
[44]
It is evident that the Plaintiff
faced an embarrassing public arrest at his place of business,
witnessed by patrons and community
members. This humiliating
experience significantly damaged his reputation, weakened his
authority within the community, and led
to enduring emotional
distress.
[45]
The computation of reputational damage is determined on a
case-by-case basis by looking at specific aggravating and mitigating
factors. It is not determined through a standard mathematical formula
or tariff.
[15]
Rather,
courts evaluate the "
quantum
"
of damages on a global scale as a form of solatium, which serves as
monetary compensation for injured feelings, dignity,
and reputation.
This assessment is carried out on an individual case basis, taking
into consideration specific aggravating and
mitigating factors.
[46]
In assessing the reputational damage I take cognizance of the social
standing of the Plaintiff, the manner and location
of the arrest, the
nature of the alleged committed crime, the publicity of the arrest
and the duration of the arrest:
[46.1]
The Plaintiff is an elderly (64 years old at the time of arrest)
engineer which served his community via his businesses,
the Museum
and the yearly vehicle show.
[46.2]
The arrest was executed in full view of the patrons at the
Plaintiff’s business.
[46.3]
The accusation against the Plaintiff involved highly stigmatized
crimes (e.g., fraud, theft and money launderings)
which leave a
lasting social stain.
[46.4]
The Plaintiff’s arrest or the subsequent groundless charges
took place in full view of patrons on a busy day
and trended on
social media.
[46.5]
The Plaintiff was detained for 14.5 hours at the police station
before going to court.
[47]
After conducting a comprehensive assessment of all available evidence
and considering the aforementioned factors, my
professional opinion
is that
R50
000.00
is
an equitable and fair compensation for the Plaintiff's reputation.
This sum aims to find a harmonious balance between the essence
of
liberty and human dignity, all the while preventing an excessive
compensation for the loss of liberty, a principle supported
by the
judgment of Petersen J in
Mbatha
v Minister of Police (CIV APP MG 20/22)
[2023] ZANWHC 127
(12 April
2023),
a
decision delivered by a full bench of the court.
[48]
I now proceed to address claims C and D relating to past and future
loss of earnings.
CLAIMS
C AND D
[49]
The only evidence led in respect of claims C and D was by the
Plaintiff.
[50] The
Plaintiff called an expert to testify, namely Mr. Paul T Koski, a
chartered accountant, who practises from
22 7
th
Avenue, Parktown North,
Johannesburg
. He testified that
his objective was to identify the lost turnover as a result of the
Plaintiff’s unlawful arrest. He further
stated that:
[50.1]
He
qualified in
1986
as a chartered accountant.
[50.2]
He holds a Bachelor of Accounting Degree.
[50.3]
He is a member of The South African Institute of Chartered
Accountants since
1986;
[50.4]
He is a member of the Independent Regulatory Board of Auditors since
1990
(Formerly,
PAAB);
[50.5]
He has been in private practice as a Chartered Accountant since
1990;
[50.6]
He has
30 (thirty) years
litigation support experience.
[50.7]
He gives support and expert testimony as an expert witness in many
High Court cases;
[50.8]
In addition
he holds a position as an
Associate member of the Association of
Arbitrators;
[50.9]
He is experienced in all financial, commercial and business-related
matters and have had extensive experience in the
financial management
field, computing many damages claims and valuations. for various
dispute matters, matrimonial matters and
similar matters which the
courts have relied upon.
[50.10]
He is qualified and an expert in the analysis of financial
information, auditing and the processes and procedures
used in the
auditing environment.
[51]
Mr. Koski applied the following background information to the
Plaintiff’s finances:
[51.1]
The Plaintiff operated a number of businesses at the premises where
he was allegedly unlawfully arrested being a bar
and restaurant and a
very large annual motoring event.
[51.2]
In consequence of the unlawful arrest on
10
February 2016
Mr. Koski was advised
that the Plaintiff’s good reputation suffered damages and in
consequence therefrom he suffered financial
losses arising from:
[51.2.1]
being unable to earn a livelihood,
[51.2.2]
unable to recover his loans from his businesses and
[51.2.3]
ultimately the closure of the businesses.
[51.3]
The Plaintiff suffered three major losses, namely:
[51.3.1]
loss of personal remuneration earned from bar revenues;
[51.3.2]
loss of personal remuneration from the annual motoring event and
[51.3.3]
loss of the ability to recover his loans in the trading companies and
entities where he invested and earned remuneration.
[51.4]
Shortly after the arrest, the Plaintiff advises that patrons stopped
patronising the bar and restaurant, as long as
the Plaintiff was in
occupation and present on the premises.
[51.5]
Although the Plaintiff continued to operate the companies and tried
to resurrect his reputation, he was unable to generate
any further
growth in the businesses in order to satisfy his personal income
needs or be able to repay the loans that he invested
in these
businesses.
[51.6]
The Plaintiff advised that, despite his endeavours to explain to his
patrons that the arrest was unlawful, being a
small community,
operations were significantly curtailed almost immediately and
patrons went elsewhere. The Plaintiff further advised
that he was not
welcomed in other establishments either.
[52]
The testimony of Mr. Koski indicates that the Plaintiff's business
underwent a substantial and swift expansion post its
inception.
However, subsequent to the arrest in
2016
, a discernible
decline in the business's efficiency was noted. This downward trend
endured throughout the initial year, ultimately
resulting in the
business's ultimate collapse.
[53]
Mr. Koski indicated that there was no reason for the radical decline
of the business. Conservatively, based upon the
presumption that the
Plaintiff’s business was expanding as it grew, a
10%
increase was allowed.
[54]
Mr. Koski testified that he calculated and determined the Plaintiff’s
losses sustained as a result of the unlawful
arrest utilising the
following materials:
[54.1]
raw data that originates from
VAT 201
submissions
made for the period
March/April 2014
to
January/February 2016
and
[54.2]
the
annual financial statements of the
Sylviavale Heritage and Preservation Trust
up
to
February 2014
.
[55]
Mr. Koski testified that the Plaintiff suffered losses as specified
here in below:
LOSS
OF ASSET
A.
LOAN TO SYLVIAVALE HERITAGE AND PRESERVATION
TRUST
[56]
The Plaintiff was unable to recover the loan he made to the
Sylviavale
Heritage and Preservation Trust
,
which balance as at
28
February 2014
was
R1
406 594.00
[16]
and
which remained the same value at the date of the unlawful arrest.
B.
LOSS OF RENUMERATION AND BENEFITS ARISING FROM THE
REVENUE OF THE MUSEUM
[57]
Mr. Koski conducted an analysis of the financial data pertaining to
the Plaintiff, which constituted the primary source
of income for the
Plaintiff. He testified that, given the nature of the events and
activities, it was reasonable to expect that
the Plaintiff's
operations would persist until at least
February 2027
,
representing an operational period of
11 years
. It is
important to note that Mr. Koski's calculations did not factor in the
COVID-19 pandemic, considering it a natural disaster
beyond anyone's
predictive capacity.
[58]
The Plaintiff’s remuneration was derived through
the
Sylviavale Heritage & Preservation Trust
of which he was a
beneficiary.
[59]
The average annual turnover of the Museum declared for the two years
before the arrest amounted to
R1 794 539.00
(
during
2014
) and
R1 924 392.00
(
during 2015).
[60]
In the subsequent year following the arrest, the Museum's annual
turnover and related activities experienced a significant
downturn,
resulting in substantial losses. Despite these setbacks, the
Plaintiff was actively developing and reinvesting in the
Museum, the
facilities, as well as in an annual motoring event that had gained
considerable patronage and attendance.
[61]
The quantum claim was determined by analysing the Museum's past
turnovers and extrapolating future turnovers and profits
as follows:
Turnover
2013
R
625 514.00
Turnover
2014
R1
320 858.00
Turnover
2015
R
1 794 539.00
Turnover
2016
R1
924 392.00
[62]
Mr. Koski had calculated the projected loss of future revenues over
an
11-year
period, starting with an estimated base figure of
R1 700 000.00
per annum, which represents a reasonable
income level.
[63]
The museum witnessed a significant surge in growth. Specifically, the
growth rates were as follows: over
100%
between 2013 and 2014,
19.18%
between 2014 and 2015, and
8.22%
between 2015
and 2016. Recognizing the need to maintain and escalate these growth
rates, Mr. Koski set a target of achieving at
least a
10%
annual growth rate. The cost savings generated from these growth
initiatives amounted to
R442 997.0
0 per annum and were
projected to grow at a rate of
7%
annually. To evaluate the
present value of these future savings, a net present value
calculation was performed, discounting the
projected amounts at a
rate of
15.5%
per annum.
[63.1]
Mr. Koski analysed the data - the VAT 201 Output Tax from
March/April
2014
until
January/February
2018 - and
tracked the decline of the
Museum income over a period of
24 months
from the Plaintiff’s date of the arrest.
[63.2]
The decline in the revenues was clearly evident ultimately resulting
in the closure of the Museum and all its allied
activities.
[64]
The Museum and its associated facilities were situated along the
banks of the Vaal River, an unusual and advantageous
location. The
annual motoring event, which spans over a Saturday and a Sunday,
draws attendance ranging from
2 000 to 2 500
people. This
event generates revenue through gate fees and remuneration earned at
the facilities.
[65]
According to Mr. Koski's present value calculations, the loss of
earnings amounts to
R4 481 866.00
. For simplicity, this
figure has been rounded off by him to
000.00 (FOUR MILLION
FIVE HUNDRED THOUSAND RAND).
[66]
Mr. Koski determined that the Museum's primary sources of income were
derived from its bar and restaurant revenues, the
weekly market, and
various functions and events, as reported by the Plaintiff. After a
thorough analysis of the data presented
in paragraph 11 of his
report, Mr. Koski reached the following conclusions:
[66.1]
The income generated by the Pub and Restaurant
decreased from:
[66.1.1]
R1 583 373.00
for
May 2015 to April 2016
(period
1)
to
[66.1.2]
R893 712.00
for
the period
May 2016 to April 2017
(period 2),
and
to
[66.1.3]
nil
for period of
May 2017 to April 2018
(period
3). The Pub and Restaurant had to be closed.
[17]
[66.2]
In respect of the Village & Country Market the
income:
[66.2.1]
in period (1) was
R48 175.00
[66.2.2]
in period (2) the income reduced to
R12 721.00
and
[66.2.3]
in period (3) the income declined to
nil
.
The market had to be closed down.
[18]
[66.3]
Functions are shown as receiving income which
comprised of rent received and services rendered. Events are also
shown as receiving
income and half is allocated to events and the
other half to functions.
[66.4]
Mr. Koski’s analysis of the total income for periods (1) and
(2) revealed that the total income for period (1)
from May 2015 to
April 2016 is
R1
980 564.00
whilst
that for period (2) comes to
R1
107 528.00
.
[19]
[66.4.1]
The difference in total income is
R873
036.00
.
[66.4.2]
If the income for period (3) is taken to be
R151 821.00
the
difference between period (1) and period (3) exceeds
R1
827 000.00.
[66.5]
Mr. Koski summarised and concluded that the fair
and reasonable total losses suffered by the Plaintiff are
R5 906 594.00
calculated as follows:
[66.5.1]
Direct Asset Loss - Loan
R1 406 594.00
[66.5.2]
Loss of income
R4 500 000.00
TOTAL
LOSS
R5 906 594.00
[67]
T
he Plaintiff's expert evidence remained
unchallenged as no expert testimony was presented by the Defendant.
The Defendant's legal
representative engaged in a cross-examination
of Mr. Koski, the expert witness.
[68]
The Defendant’s counsel cross- examination alluded to the
following:
[68.1]
The loan classified as loss of asset obtained
on
28 February 2014
in
the sum of
R1 406 594.00
remained unpaid at the time of the arrest. The
counsel argued that the arrest and subsequent detention did not
influence the
recovery of the loan advanced by the Plaintiff to the
Museum (the asset). The Defendant's counsel further posited that the
Museum
had been operating profitably for two years prior to the
Plaintiff's arrest, and no evidence was provided to substantiate the
claim
that the Plaintiff would have recovered the loan amount before
the arrest. The counsel asserted that Mr. Koski's opinion, suggesting
that the Plaintiff could have recovered his loan, cannot stand,
especially in light of the duration of the arrest.
[68.2]
The Defendant’s counsel argued that the loan had prior and post
the arrest never been
repaid. The loan had
funded the businesses which ran as going concerns. The statement in
respect of the Trust’s financial
position as at
28
February 2014
reflects
the loan of
R1 406 594.00
.
[20]
The loan was not to be re-paid during
2014
.
[68.3]
Additionally, it was put to Mr. Koski that the assets were dissipated
and that the loan was written off. The business
had been trading in a
trust vehicle. The Defendant’s Counsel had asserted that the
issue of the arrest had no bearing on
the loan.
[69]
Mr. Koski testified that the loan account was an asset recoverable
over a few years. The close of the businesses ultimately
resulted in
the loss of an asset being the loan. The Plaintiff had injected
capital into the trust to get the Museum going.
As a result of
the arrest the loan were not repaid.
CLAIM
C:
[70]
The Plaintiff’s Particulars of Claim depicts in bold that claim
C is in respect of Past Loss of Earnings.
[21]
[70.1]
Paragraph 46 of the Particulars of Claim (after the amendment was
granted) reads as follows:
“
46.
As
a result of the above including the closure and handover
the
Plaintiff suffered loss of income of
R
1 406 594.00
due
to a decline in the businesses, including the restaurant, pub museum,
markets and the “Wheels at the Vaal” show
.”
(my emphasis)
[71]
The Plaintiff's claim C is accordingly contingent upon a Loss of
Income amounting to
R1 406 594.00
due to a decline
in the businesses.
[72]
Mr. Koski's evidence is unequivocal, specifically highlighting
the
direct asset loss
,
which is quantified as the loan provided to the Sylviavale Heritage
and Preservation Trust amounting to
R1 406 594.00.
[22]
[73]
It is abundantly evident from Mr. Koski’s evidence that the
Loan is not a Loss of Income, but a Loss of an Asset.
[74]
It is trite that every pleading must contain a clear and concise
statement of material facts upon which the pleader relies
for his or
her claim, defence or answer to any pleading, with sufficient
particularity to enable the opposite party to reply thereto.
[74.1]
In
Trope
v South African Reserve Bank
[23]
it
was held that pleadings must be lucid and logical and in an
intelligent form; the cause of action or defence must appear clearly
from the factual allegations made. This is a basic requirement of
pleading that is designed to enable the opposite party to formulate
an adequate response to the claim in the form of a plea.
[75]
It
is imperative to note that the Plaintiff did not, in its Particulars
of Claim
[24]
specify that
claim C pertains to a Loss of an Asset specifically a Loan. Instead,
the Particulars of Claim clearly reflects that
claim C relates to
Past Loss of Earnings as indicated in bold by its heading.
[25]
Consequently, the Plaintiff's pleading is based on a claim for Loss
of Past Earnings.
[76]
In
Masibulele
Rautini and Passenger Rail Agency of South Africa
[26]
reliant on the findings of
Minister
of Safety and Security v Slabbert
[27]
the
Supreme Court of Appeal stated that a party has a duty to allege in
the pleadings the material facts upon which it relies.
“
It
is impermissible for a Plaintiff, the court held, to plead a
particular case and seek to establish a different case at trial.
It
is equally impermissible, the discussion continued, for the trial
court to have a recourse to issues falling outside the pleadings
when
deciding a case.”
(my emphasis)
[77]
The purpose of pleadings is to define the issues for the other party
and the court. A court is called upon to adjudicate
the disputes that
arise from the pleadings and those disputes alone.
[77.1]
In
Minister of Safety and Security v Slabbert
[2010] 2 ALL
SA 474
(SCA)
and
Notyawa v Makana Municipality and Others
2020
(2) BCLR 136
(CC); (2020) 41 ILJ 1069 (CC
) it was held that
courts are bound not to decide issues falling outside the pleadings,
without determining issues of fairness and
prejudice. It is
impermissible for a party to plead a particular case and seek and
establish a different case at the trial. At
the end of the day, the
issues between the parties are defined by and confined to those
pleaded.
[78]
Accordingly,
it is impermissible to plead one particular issue and seek to pursue
another at the trial. (
Minister
of Agriculture and Land Affairs and Another v De Klerk and Others
[2014]
1 All SA 158
(SCA)
at para 39; Gusha v Road Accident Fund 2012(2) SA 371 (SCA) at
para 7; Imprefed (Pty) Ltd v National Transport Commission
1993
(3) SA 94
(A)
at 107G-H also reported as
(1993) 2 ALL SA 179
(A) and
Robinson v Randfontein Estates GM Co Ltd
1925
AD 173
at
198).
[79]
This principle was re-stated in
Home
Talk Developments (Pty) Ltd v Ekurhuleni Metropolitan Municipality
(225/2016)
[2017]
ZASCA 77
(2
June 2017) at paragraphs 28-29
as
follows (own emphasis added):
“
[28]
…One knows that such address can never be a substitute for
pleadings. In any event, it did not serve to forewarn
the
Respondent of the evidence that would eventually be relied upon. What
is important is that the pleadings should clarify the
general nature
of the pleader's case. They are meant to mark out the parameters of
the case sought to be advanced and define the
issues between the
litigants. In that regard, it is a basic principle that a pleading
should be so framed as to enable the other
party to fairly and
reasonably know the case they are called upon to meet. These
requirements in respect of pleadings are
the very essence of the
adversarial system.
The
prime function of a judge is to hear evidence in terms of the
pleadings, to hear arguments and to give his decision
accordingly.
In
Imprefed (Pty) Ltd v National Transport Co
1993
(3) SA 94
(A)
at 107G-H, it was stated: 'At the outset, it need hardly be stressed
that: “The whole purpose of pleadings is to bring
clearly to
the notice of the Court and the parties to an action the issues upon
which reliance is to be placed. (Durbach v Fairway
Hotel Ltd 1949(3)
SA 1081 (SR) at 1082.) (my emphasis)
[80]
The Plaintiff has failed to substantiate and proof the damages
pertaining to Claim C, because he has not explicitly pleaded
the Loss
of an Asset (specifically, the Loan) within their Particulars of
Claim. Claim C pertains to Past Loss of Income, which
is detailed in
paragraph 46 of the Particulars of Claim. Consequently, the Plaintiff
has not pleaded a proper case and cannot claim
the amount of
R1 406 594.00
. I therefore find it unnecessary to
address the arguments presented by the Defendant's Counsel concerning
the lack of connection
between the arrest and the loan, and the
potential denial of damages in relation to Claim C.
CLAIM
D:
[81]
Lastly, I shall deal with the loss of earnings as set out in claim D.
[82]
In the testimony provided by Mr. Koski, he quantified that the
Plaintiff had incurred losses amounting to
R4 481 866.00
which he rounded off to
R4 500 000.00
in relation to
claim D, resulting from the Plaintiff’s unlawful arrest.
[83]
This court will for fairness work with the exact
amount of
R4 481 866.00.
[84]
In accordance with Mr. Koski's methodology, the
calculations were predicated upon the assumption that the Plaintiff's
events and
activities would persist until at least
February
2027
, encompassing a
11-year
period
. He determined the loss of
future revenue over this 11-year span, initiating from a base rate of
R1 700 000.00
annually.
This base rate was established by considering the historical
turnovers from
2013 to 2016
.
Furthermore, the exponential growth of the Museum was projected into
an increase at a minimum rate of
10%.
[85]
Mr. Koski also utilized a Net Present Value (NPV) calculation,
applying a discount rate of
15.5%
per annum to determine the
net present value.
[86]
Having regard to Mr. Koski’s report
[28]
it is evident that his calculations did not allow for contingencies.
[87]
The court has, nevertheless, required both parties to comment on the
following statements:
[87.1]
The discount rate of
15.5%
applied is distinct from a
contingency. The discount rate is the expected rate of return or
cost of capital used
to convert future cash flows
into today's money.
It accounts for the time
value of money. Whilst a contingency is a potential future
event or circumstances
that is possible but uncertain.
[87.2]
Mr. Koski did not make allowance for contingencies in his
calculation.
[88]
In reply, Mr. Koski confirmed the Court's characterisation and agreed
that the discount rate is distinct from a contingency.
The
15.5%
per annum discount rate applied (in paragraph 8 of his report) is a
net present value calculation: it converts the projected future
annual losses - escalated at a minimum of
10%
per annum for
revenue and
7%
per annum for costs - into a present-day
capital value as at the date of my calculation. It reflects the time
value of money and
an appropriate rate of return/cost of capital.
[89]
Mr. Koski however clarified that the
15.5%
comprises:
[89.1]
a base return for the time value of money together with
[89.2]
a risk premium.
[90]
He explained that the risk premium exists precisely to account for
the possibility that the projected cash flows may,
or may not,
materialise as forecast. In that sense he stated that the discount
rate inherently prices in a probability-weighted
assessment of risk.
[90.1]
The risk is directional and forward-looking in the same way a
contingency is, but it operates on the rate of return
applied to the
whole cash flow stream, rather than as a standalone deduction
from the outcome.
[90.2]
The risk captured within the discount rate in his calculation is
business risk - the risk inherent in the museum and
its related
trading activities achieving the growth and income levels projected -
as opposed to external or extraneous risk unconnected
to the business
itself.
[90.2.1]
As an example Mr. Koski asserted that the base line risk is a
risk
free rate of return
such as a bank interest rate of say
8%
,
or a government bond at now approximately
8.75%,
the increase
to
15.5%,
takes into account contingencies for business
uncertainty. If he were to have no risk of a contingent business
event (a risk) taking
place, Mr. Koski indicated that he would
discount at
8%
and not
15.5%.
[91]
Mr. Koski elaborated that the risk premium of
7.5%
reflects
the specific business risks attaching to the projected income stream
in this matter, including, in particular:
[91.1]
the concentration of income in a single, owner-operated business
without diversification across multiple sites or revenue
sources;
[91.2]
the dependence of a material portion of projected income on a single
annual motoring event, itself dependent on weather,
attendance, and
continued patronage;
[91.3]
the reliance of the business on the personal reputation and continued
presence of the Plaintiff, which the underlying
facts in this matter
show to be a live and material risk;
[91.4]
the historical volatility already evident in the Museum's turnover
figures over the years analysed in my report; and
[91.5]
the general risk inherent in a small, owner-managed trading entity of
this kind failing to sustain projected growth
over an 11-year
projection period.
[92]
Mr. Koski confirmed that save for the risk premium featured into the
discount rate he did not make any separate contingency
allowance. He
elaborated that it was not an oversight as the risk that the
projected income may not be achieved was already accounted
for within
the
15.5%
discount rate itself, through the risk premium
embedded in that rate.
[93]
If the court had to apply a further, separate contingency deduction
on top of a risk-adjusted discount rate it would,
in his professional
view, risk double-counting the same underlying business risk once
within the discount rate used to determine
present value, and again
as a standalone reduction to the result.
[94]
Mr. Koski opined that his application of the discount rate in his
assessment is an appropriate and sufficient mechanism
to account for
the uncertainty inherent in the projection, without
additionally discounting for a contingency.
[95]
The Defendant in response to the statements made in paragraph [88]
here in before expressed and emphasized the following:
[95.1]
A discount rate is conceptually and methodologically distinct from a
contingency allowance. A discount rate converts
projected future cash
flows into present value and accounts, among other matters, for the
time value of money and the required
rate of return. A contingency
allowance, by contrast, addresses the possibility of uncertain future
events or circumstances affecting
whether the projected loss will
materialise as assumed.
[95.2]
Mr Koski expressly confirmed that he did not apply a separate
contingency allowance or deduction in his calculation.
[95.3]
The Defendant noted, however, that Mr Koski in response stated that
the increase from what he describes as a risk-free
rate to
15.5%
takes account of “
contingencies for business uncertainty
.”
He accordingly seeks to characterise the risk premium embedded in the
discount rate as also performing the function of
a contingency
allowance.
[95.3.1]
The Defendant indicated that this does not alter the fact that no
distinct contingency analysis or deduction was
undertaken. The
expert’s explanation does not separately identify or quantify
the contingencies applicable to the Plaintiff’s
projected loss,
nor does it demonstrate that every relevant uncertainty is captured
by the business-risk premium embedded in the
15.5%
rate.
[95.4]
The Defendant asserts that contingency deductions are separately
considered by courts when quantifying future loss,
and that their
determination involves the Court’s assessment of the evidence
and applicable circumstances.
[95.5]
In
Road
Accident Fund v C K
[29]
(paragraphs
40 – 44), the Supreme Court of Appeal separately considered the
appropriate contingencies applicable to the claimant’s
projected loss of earnings. In this matter Dumbuza JA (Mocumie JA
concurring) held:
[95.5.1]
“
[40]
Any
claim for future loss of earning capacity requires a comparison of
what a claimant would have earned had the accident not occurred
with
what a claimant is likely to earn thereafter. The loss is the
difference between the monetary value of the earning capacity
immediately prior to the injury and immediately thereafter.
This
can never be a matter of exact mathematical calculation and is, of
its nature, a highly speculative inquiry. All the court
can do is
make an estimate, which is often a very rough estimate, of the
present value of the loss.
[41]
Courts
have used actuarial calculations in an attempt to estimate the
monetary value of the loss. These calculations are obviously
dependent on the accuracy of the factual information provided by the
various witnesses. In order to address life’s unknown
future
hazards, an actuary will usually suggest that a court should
determine the appropriate contingency deduction. Often a claimant,
as
a result of the injury, has to engage in less lucrative employment.
The nature of the risks associated with the two career paths
may
differ widely. It is therefore appropriate to make different
contingency deductions in respect of the pre-morbid and the
post-morbid
scenarios. The future loss will therefore be the
shortfall between the two, once the appropriate contingencies have
been applied.
[42]
Contingencies
are arbitrary and also highly subjective
.
It can be described no better than the oft-quoted passage in Goodall
v President Insurance Co Ltd
[30]
where
the court said:
‘
In
the assessment of a proper allowance for contingencies, arbitrary
considerations must inevitably play a part, for the art or
science of
foretelling the future, so confidently practiced by ancient prophets
and soothsayers, and by authors of a certain type
of almanack, is not
numbered among the qualifications for judicial office.’
[43]
It
is for this reason that
a trial court has a wide discretion when it comes to determining
contingencies. An appeal court will therefore
be slow to interfere
with a contingency award of a trial court and impose its own
subjective estimates
.” (
my
emphasis)
[95.6]
The Defendant also contends that the application of an appropriate
contingency deduction would not necessarily amount to
double
counting. It would depend upon whether the particular uncertainty for
which the contingency is allowed was already identified,
quantified
and adequately incorporated into the discount rate. On the
information presently provided by Mr Koski, the Defendant
contends
that this had not been demonstrated.
[96]
The Defendant’s counsel also referred me to
Dlamini v Road Accident Fund
(2019/31573) [2026] ZAGPJHC 560 (26 May 2026),
where
the court made reference to
Southern
Insurance Association Ltd v Bailey NO
1984 (1) SA 98
(A
)
and where it was held that the court must make a fair estimate of the
Plaintiff's prospective loss, taking into account all relevant
facts
and applying appropriate contingencies. The court further held that
the percentage deduction for contingencies should not
be arbitrary
but must be informed by the circumstances of each case.
[96.1]
In South African Law of Delict, a
15%
deduction for future
earnings is widely recognized as the standard or "
normal
"
baseline contingency. Courts apply general contingency deductions to
account for life's uncertainties, such as periods of
unemployment,
sickness, or unexpected changes in the labour market. While
5%
is customary for past loss of income,
15%
is the frequent
benchmark applied to future loss of earning capacity before an
accident or event.
[96.2]
Mr. Koski’s calculation applied no contingency deductions, (as
is evident from his report), leaving those deductions
to the court’s
discretion. Without doubt, contingency deductions are a recognised
tool to account for general risks and vicissitudes
of life that may
affect a person’s earning capacity, such as unemployment,
illness, injury, economic downturns, or early
retirement. However,
the court has a wide discretion in determining appropriate
contingency deductions.
[96.3]
The
Supreme Court of Appeal in
Road
Accident Fund v Kerridge
[31]
opined
as follows:
“
Any
claim for future loss of earning capacity requires a comparison of
what a claimant would have earned had the accident not occurred,
with
what a claimant is likely to earn thereafter. The loss is the
difference between the monetary value of the earning capacity
immediately prior to the injury and immediately thereafter.
This
can never be a matter of exact mathematical calculation and is, of
its nature, a highly speculative inquiry. All the
court can do is
make an estimate, which is often a very rough estimate, of the
present value of the loss
.
(my emphasis)
[96.4]
In
Southern
Insurance Association Ltd v Bailey NO
[32]
,
it was held that contingencies are a practical method of accounting
for the unknown future and are in the discretion of the trial
court.
The Court stated:
“
One
of the elements in exercising that discretion is the making of a
discount for ‘contingencies’ or the ‘vicissitudes
of life’. These include such matters as the possibility that
the plaintiff may in the result have less than a ‘normal’
expectation of life; and that he may experience periods of
unemployment by reason of incapacity due to illness or accident, or
to labour unrest or general economic conditions. The amount of any
discount may vary, depending upon the circumstances of the case
.”
[97]
The Defendant’s counsel further argued that it was evident from
the VAT records that although the Museum's functions
expanded from
February 2016 to June 2016
, its revenue underwent a consistent
decline during the same period. This observation led him to the
inference that the Museum was
facing financial difficulties, despite
its continued operation until
March 2017
.
[97.1]
Mr. Koski responded that functions are typically
pre-arranged.
[98]
Upon reviewing all the financial documentation presented, it was
clear that the unlawful arrest served as a critical
turning point for
the businesses. These businesses had exhibited exponential growth
prior to the arrest.
[99]
Additionally, the Defendant argued that the Plaintiff had an
administrator overseeing event organization, functions,
and
reservations. The Defendant posited that the Plaintiff's brief
detention could not have led to any damages or future loss of
income.
However, this assertion is untenable. The testimony of Mr. Koski
founded on financial documentation, unequivocally established
that
the arrest was the significant factor to the ultimate collapse of the
businesses. This assertion was further substantiated
through a
meticulous analysis of several months' (24) worth of financial
records.
[100]
It was further contended that the municipality had unlawfully seized
the Plaintiff's products, yet the Plaintiff did
not furnish any
evidence to substantiate this claim's connection to the arrest.
Notably, this argument was not presented to the
Plaintiff for the
purpose of rebuttal.
[101]
The Defendant suggested that, should an order be made in respect of
Claim D, it should be set at
R90 000.00
. However, this
proposed figure appears to lack consideration for the financial
documentation and evidence that were presented
to the court. It seems
to be a random and unsubstantiated amount, not supported by the
presented evidence.
[102]
Having considered the aforesaid arguments, this court is of the firm
opinion that Mr. Koski had provided the court with
invaluable
assistance by delivering independent, objective, and unbiased
opinions regarding the loss of income. His methodology
was thoroughly
explained in his evidence and report, and his findings were
articulated in a clear and concise manner. The evidence
he presented
was characterized by both consistency and credibility, significantly
contributing to the understanding of the case.
[103]
I accordingly accept Mr. Koski’s evidence that:
[103.1]
he had factored in a
7.5%
risk premium to the base rate of
8%
in respect of his calculation of future loss of
earnings. The
7.5%
accounts
for
the specific business risks as depicted in paragraph [92]
here in above.
[103.2]
he had indicated that his calculation did not allow for
contingencies, but that the
7.5%
risk premium reflects the
business risks attached to the projected income stream in this
matter.
[104]
I am, however, of the firm opinion that a further contingency
allowance of
7.5%
should be applied. This additional allowance
accounts for risks not fully captured by the business-risk premium,
including the
Plaintiff’s age, possible deterioration in
health, early retirement, mortality, and broader economic factors
such as downturns
that may have affected the Plaintiff’s
income. Applying this further deduction also brings the overall
adjustment closer
to the standard
15%
contingency commonly
applied to future loss of earnings, while still recognising the
specific risk adjustment already incorporated
in Mr. Koski’s
calculation.
[104.1]
Robert Koch's work is often used to
determine the contingency deductions, typically
5%
for past loss and
15%
for future loss.
[104.2]
The uncertainty factors adjust for risks unrelated or related
to the arrest, such as potential illness, unemployment, economic
recessions,
promotions, or early retirement.
[105]
The amount of
R4 481 866.00
as calculated by Mr.
Koski filtered in a risk adjustment of
7.5%.
If this court
applies an additional
7.5%
contingency deduction to the amount
of
R4 481 866.00
it amounts to
R4 145 726.05
(
Four Million One Hundred and Forty Five Thousand Seven
Hundred and Twenty Six Rand and Five Cents).
[106]
The Future Loss of Earnings in an amount of
R4 145 726.05
(
Four Million One Hundred and Forty Five Thousand Seven
Hundred and Twenty Six Rand and Five Cents)
will then into
consideration a risk premium of
7.5%
and an additional
7.5%
for contingencies.
[107]
Having considered all the evidence I make the following order in
respect of claims A and D:
Order
The
First, Second and Fifth Defendants are to pay the Plaintiff’s
damages, jointly and severally, the one paying the other
to be
absolved, in the following terms:
CLAIM
A
[1]
Payment of the amount of
R40 000.00
in respect of
contumelia
and the deprivation of bodily freedom, liberty and
discomfort;
[2]
Payment of the amount of
R50 000.00
in respect of damages
to the Plaintiff’s good name, dignity and reputation;
[3]
Interest on the aforesaid amount at the prescribed rate of
interest from date of demand (i.e.
30 March 2017
) to date of
final payment.
[4]
Costs of suit on a party and party
scale inclusive of legal counsel’s fees on scale C.
CLAIM
D
[5]
Payment of the amount of R4 145 726.05
(
Four
Million One Hundred and Forty Five Thousand Seven Hundred and Twenty
Six Rand and Five Cents).
[6]
Interest on the aforesaid amount at the prescribed rate of interest
from date of demand (i.e.
30 March 2017
) to date of final
payment
[7]
Costs of suit on a party and party
scale inclusive of legal counsel’s fees on scale C.
S
VAN ASWEGEN
ACTING
JUDGE OF THE HIGH COURT
JOHANNESBURG
Delivery
date:
9 September 2026
For
the Applicant:
Adv WF Wannenberg
082 823 2679
[email protected]
Instructed by
Esthe
Muller Inc Attorneys
016 423 2920
C/O Couzyns Incorporated
For
the Respondent:
Adv AT Raselebana
079 426 0262
[email protected]
Instructed by The State
Attorneys
REF: 5834/18/P26/KM
011 330 7631
[1]
Case
Lines 41-1
[2]
SACR
282
(SCA);
[2009]
4 All SA 38
(SCA)
(27 May 2009) para 26
[3]
(414/2022)
[2023]
ZASCA 94
;
2023
(2) SACR 274
(SCA)
(12 June 2023) para 17.
[4]
[2021]
ZASCA 161
; 2021 JDR 2998 (SCA) para 33;
[5]
(414/2022)
[2023] ZASCA 94; 2023 (2) SACR 274 (SCA); 2022 (8K6) QOD 335
(SCA)(12 June 2023)
[6]
[2023]
ZAGPJHC 434
[7]
(EL1326/2017)
[2019] ZAECELLC 32 (26 November 2019)
[8]
[2022]
ZASCA 103
[9]
(CA
231/2019) [2021] ZAECGHC 22 (23 February 2019).
[10]
(CA
17/2021) [2022] ZAECMKHC 11 (3 May 2022)
[11]
2025
(5) SA 152 (SCA)
[12]
(2014/40666)
[2025] ZAGPJHC 921 (15 September 2025)
[13]
(1436/2021)
[2025] ZANWHC 53
(13 March 2025
[14]
(3058/2019)
[2024]
ZANWHC 143
(21
June 2024).
[15]
Mbata
v Minister of Police
2023
JDR 3015 (NWM);
[16]
Note
7 at Case Lines 09-66;
[17]
Case
Lines
09-9
[18]
Case
Lines
09-9
[19]
09-9
[20]
Note
7 at
09-66
[21]
04-15
[22]
Case
Lines 09-9
[23]
1992
(3) SA 208
(T) at 210 G-I
[24]
Case
Lines 04-5
[25]
Case
Lines 04-15
[26]
Case
no: (853/2020)
[2021] ZASCA 158
(8 November 2021)
[27]
[2010]
2 ALL SA 474 (SCA)
[28]
Case
Lines 09-3
[29]
1024/2017)
[2018] ZASCA 151; [2019] 1 All SA 92 (SCA); 2019 (2) SA 233 (SCA) (1
November 2018)
[30]
1978
(1) SA 389
(W)
(
Goodall
)
at 392H-393A.
[31]
1024/2017
[2018]
ZASCA 151
(01
November 2018).
[32]
1984
(1) SA 98
(A).