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IN THE HIGH COURT OF SOUTH AFRICA

(EASTERN CAPE LOCAL DIVISION: MTHATHA)

CASE NO.: 784/12

In the matter between:-

LUTHULI KALIPA................................................................................PLAINTIFF

And

ROAD ACCIDENT FUND.................................................................DEFENDANT

JUDGMENT

HINANA AJ.

INTRODUCTION

[1] The plaintiff instituted action proceedings against the defendant consequent upon an accident which occurred at or near Mthatha Cuttings, Qunu along N2 National Road in the Eastern Cape. A motor vehicle bearing registration letters and numbers D[…] (the insured motor vehicle) was driven by Mathew Sparta Jongili Mzimba (the insured driver) who lost control of the motor vehicle and it overturned.

[2] At the time of the accident, the plaintiff was a fare paying passenger in the insured motor vehicle. The plaintiff averred grounds of negligence against the insured driver, such being:-

2.1 He failed to keep a proper lookout

2.2 He failed to keep the insured vehicle under proper and adequate control

2.3 He failed to apply brakes of the insured vehicle timeously or at all

2.4 He drove at an excessive speed under the circumstances

2.5 He failed to avoid the accident when by the exercise of reasonable care and skill, he should and could have done so.

[3] As a result of the collision, the plaintiff sustained severe bodily injuries as follows:-

3.1 Open fracture of the ankle

3.2 Facial laceration

3.3 Laceration on the left leg.

[4] The plaintiff claims for R655 000.00 as a result of the injuries which amount is computed as follows:

4.1 Past hospital and meical expenses R5000.00

4.2 Estimated future medical expenses being

4.2.2 Provision for current rehabilitation

4.2.1 Provision for conservative treatment including consultation with X-rays and analgesics R300.000.00

4.3 General damages for pain and suffering, discomfort, earning capacity and loss of amenities of life R350.000.00

[5] The defendant filed its plea which was a bare denial. The plea avers the following:-

“Defendant has no knowledge of the allegations herein, does not admit same and puts plaintiff to proof thereof”.

Whether this conforms with the rules or not is a matter to be decided later.  It was not argued before me and I express no views.

[6.1] The pre-trial conference was held on 20 January 2014 and significantly the admissions sought by the plaintiff were a repetition of the plaintiff’s particulars of claim. The defendant replied in the following manner:-

“No further admissions were made by the defendant except those contained in the plea.  Defendant also advises that they do not have instructions to admit any of the medico legal reports compiled by the plaintiff’s experts”.

[6.2] I have expressed my concerns about the way the plea is drafted in paragraph 5 above. Infact, in my view, there is nothing significant that was a result of the pretrial conference. Practitioners should desist from paying lip service to the rules and this court can only hope that those who draft pleadings should and would apply their minds to the document. The main object of the rule is “investigating ways of avoiding costs at a stage when it can still be avoided. Further, the rule is intended primarily to curtail the duration of a trial, narrow down issues, cut costs and facilitate settlement”. (Commentary Superior Court Practice by Erasmus page B1-274)

[7.1] Issues for determination were identified by both parties to be the following:-

a) The accident;

b) Cause of the accident;

c) Issue of compliance with RAF Act;

[7.2] On the quantum, parties agreed and asked the court to determine:-

a) General damages;

b) Future medical expenses, if any;

c) Past and future loss of earnings.

[7.3] The parties further agreed that two (2) days will be sufficient for the hearing of this matter.

[8] On the day of the hearing of this matter, a letter was handed up by Mr Swart, counsel for the plaintiff. The letter is addressed to Merssrs Potelwa & Co. for Mr Mafunda’s attention. Mr Mafunda, attorney for the defendant did not object to the handing up of the letter. The following is contained in the letter:

“….We have consulted with our client in relation thereto and (sic) does not agree to the contents thereof that the offer is fair and reasonable….  We further wish to enquire whether you would agree to have the matter argued on the filed experts reports in order to save costs, especially on the issue of contingency deductions or do you want us to lead their evidence”.

[9] On the day of the hearing of this matter, Mr Swart and Mr Mafunda informed me that the only issue to be decided is what contingency deduction should be applied in this matter and whether the plaintiff is entitled to costs of two days as agreed in the pre-trial conference.

[9.1] In support of costs of two days, Mr Swart submitted that even if the matter was finalized within one day (being the date of argument) together with his attorney will only be leaving Mthatha on the following day because flights and accommodation have already been booked. It will be difficult to cancel the bookings. Further, he submitted that the parties have agreed that the trial will take two days. He further submitted that he did not accept work in anticipation that the trial will take two (2) days. It would be unfair for the plaintiff to pay those costs whilst the plaintiff was not at fault. I asked Mr Swart whether this court can grant costs in favour of the party who did not appear in court, (such costs being costs for work that would have been done in future). His response was the repetition of his initial submissions (which have been stated above) that this court must grant costs of two days.

[9.2] Arguing against submissions made by Mr Swart, Mr Mafunda for the defendant relied on Kloot v Interplan Incorporated 1994 (3) SA 230 (EC). In this case, Leach J (as he then was) held that:-

“Counsel is entitled to charge for work done, and if a trial ends sooner than expected he generally charges his client only for the duration of the trial.  Where he turns away work in order to run a trial which it is anticipated will run for some time and that trial is then postponed, it is in my view unreasonable for him to levy a charge to defray the difference between what he estimates he would have earned during the trial had the case run and the amount he was able to earn from other work that he was able to obtain for that period. In any event, even if counsel and his client agree that he would be paid such difference, there is no reason to saddle the unsuccessful party on the other side therewith” (at page 239 I- 240A-B).

[9.3] In my view there is nothing wrong with the judgment by Leach J (as he then was) and I cannot find against it. Further it is, in my view basic and fundamental that one has to work for him to be paid. I therefore cannot find any justification for this court to grant costs for the other day whilst this matter was argued in one day. Consequently, the plaintiff cannot succeed on this point and is therefore entitled to costs of one (1) day.

[10.1] The parties did not agree on contingency deductions. Mr Swart submitted that the plaintiff was an LLB graduate who has written Board Examination and is only left with two modules to complete, and the plaintiff has also commenced his career as a candidate attorney. Pre and post morbidly, the plaintiff was and is employed by the Department of Public Works (Mmabatho) as an administrator.

[10.2] Dr L.A Fourie, plaintiff’s Industrial Psychologist, opined as follows:-

“when considering Mr Kalipa’s future work potential and earning capacity, the extent of his injuries and sequalae, his residual work capacity and its impact on his future career should be considered. Mr Kalipa’s would have always relied on his good level of physical ability in securing employment. He is thus no longer competitive post accident. Writer is therefore of the opinion that Mr Kalipa has suffered loss of work capacity, as well as a loss of earning capacity, which will probably culminate in a loss of potential future earnings. He would also require time off in order to attend to recommended treatment……This employee’s ability to go to extra mile and impress his/her employer, as well as prospective employers, is also reduced. It is clear that he has been rendered a vulnerable employee and unequal competitor in the open labour and market and that he is experiencing reduced levels of productivity and will probably result in the slower than expected earning growth and could be addressed by means of a higher post-morbid contingency deduction……. Due to the above, Mr Kalipa can decide to retire prematurely if he does not feel fit/couldn’t cope with the demand to continue working with constant pain and discomfort as he ages……. Due to the above, Mr Kalipa can decide to retire prematurely if he does not feel fit/couldn’t cope with the demands to continue working with constant pain and discomfort as he ages.” (at p 71).

[10.3] Further, Dr Fourie, concluded as follows:-

“It is anticipated that Mr Kalipa could suffer a potential future loss in earning capacity as a result of the reported accident, due to his injuries sustained.  At this juncture, it is not clear what future impact of the pain and discomfort he sufferers would on his work ability. In general, it is known that pain increases over time and his performance could deteriorate accordingly, depending on the demands of his position”. (at page 72).

[11] Gerard Jacobson is consulting actuary who were instructed to asses plaintiff’s loss of income. The actuary considered the following:-

[11.1] “That at the time of the accident Mr Kalipa was employed as an Admin Officer  by the Department of Public Works. Mr Kalipa is currently employed in the same capacity. Having regard to the accident Mr Kalipa was reportedly off work for a period of (3) three months during which he was fully remunerated.  No accrued loss date is therefore assumed. According to medico legal report of the Industrial Psychologist, Dr LA Fourie, Mr Kalipa currently earns a basic salary of R14 883 per month. In addition to this, he is entitled to the following benefits:-

Annual Bonus..............................................................100% of one month’s salary

Housing allowance.......................................................R900 per month

Medical aid subsidy......................................................R1014 per month assumed

Retirement funding.......................................................13% of basic salary.

(At page 73)

[11.2] “Based on the opinion of Dr Fourie, Mr Kalipa would have been able to progress to a career ceiling by the age of 40-45 earning in line with the D1 Peterson level.  Annual inflationary increase would have been applicable thereafter until retirement at age 65….”.(at page 74).

In considering the opinion from Dr Fourie, the actuary concluded as follows:

“Based on the above, the same future earnings were therefore valued both but for and having regard to the accident.” (at page 74).

The following are calculations from the actuary:-

[11.3.1] “BASIS OF CALCULATION as at 1 February 2014.

Future income but for the accident.

He would have continued until retirement at age 65.

[13.2.2] INCOME

Basic salary is taken as R1 85 565 per annum (R14 883 per month increased with CPD from April 2013).

Annual bonus is taken as 8.33% of basic salary.

Housing allowance is taken as R10 800 per annum.

Medical aid subsidy is taken as R12 168 per annum.

Retirement funding is taken as 13% of basic salary.

His earnings as set out above would have increased uniformly to R594 949 per annum as at 01 August 2022”. (at page 74)

[13.3.3] “Future Inflation

His earning would have increased after 01/02/2014 due to the effects of inflation at the rate of 5.37 % per annum compound.

[13.4] Future income having regard to the accident

[3.4.1] Retirement age

He will continue working until at age 65.

[13.4.2] Income

His future earnings are assumed to the same as but for the accident.

[13.4.3] Future inflation

His earnings will increase after 1 February 2014 due to the effects of inflation at the rate of 5.37 % per annum compound.

[14.1] Pecuniary loss of income

Mr Kalipa’s loss is the difference between the value of his income but for the accident and the value of his income having regard to the accident.

[14.2] Summary of loss of income

Mr Kalipa’s loss is the difference between the value of his income but for the accident and the value of his income having regard to the accident”. (at page 75)

[14.3] Summary of loss of income prospective loss

Value of income but for accident................................................ R7, 157.303

15% contingency deduction........................................................ R1, 673,595

…................................................................................................R6, 083,707

Value of income having regard to accident................................ R7, 157,302

25 % contingency deduction....................................................... R1, 789,326

Total net loss....................................................................................R715, 731

[15] Mr Swart submitted that the calculations by the actuary are fair.  He further submitted the fact that the plaintiff was an LLB graduate who still has to write Accounting and Estates. Therefore, if the plaintiff decides to be an attorney, he would or may practice as such even beyond 65. The result of the accident is that he may not practice and will be out of income if he retires at age 65, but if he decides to be an attorney, he would loose income which is period of years after 65 years. The crux of Mr Swart’s argument was that this court should take into account plaintiff’s qualifications and that he is about to be admitted as an attorney. As such, he urged me either to grant the calculations from the plaintiff actuary or, if possible, grant more.

[16] Mr Mafunda, for the defendant argued that the plaintiff does not and did not submit that the industrial psychologist was wrong. He referred this court to page 74 of the indexed papers where the following is said:-

“Based on the above, Dr Fourie is therefore of the opinion that but for the accident Mr Kalipa would have been able to progress to a career ceiling by the age of 40-45 earning in line with the DI Peterson level. Annual inflammatory increase would have been applicable thereafter until retirement at age 65. The DI Peterson level in April 2013 monetary terms were indicated as follows:-

R502 141-R572 606 – R710 576 per annum. Having regard to the accident, it was reported by Ms Mahlaule that Mr Kalipa’s level of productivity is influenced because of the pain he experienced. Dr Fourie concluded that it is clear that Mr Kalipa has been rendered a vulnerable employee and unequal competitor in the open labour market and that he is experiencing reduced level of productivity and will probably continue to do so in future. Dr Fourie stated that this will probably result in slower than expected earning growth and could be addressed by means of a higher post morbid contingency deduction”.

[17] Further, he relied on the case of Goodall v President Insurance Co 1978 (1) SA 389 (WLD) where it was held that:-

“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 soothsayer, and by modern authors of a certain type of almanack, is root numbered among the qualifications for judicial office (at p 392H-393).

[18.1] The defendant’s calculations are as follows:-

a) half a percent to year of retirement-

b) Sliding scale divided by 2 (two) and

c) 15 percent contingency deductions pre morbidly.

[18.2] Pre and post morbidly, plaintiff’s earnings are the same. The plaintiff did not argue against this. Only the extent of the injuries would affect his ability and the defendant would asked for 20% contingencies. I must indicate that the defendant did not file any expert reports or calculations Mr Mafunda argued from the bar without laying the basis thereof.

[18.3] Defendant’s calculations-

R7157 302 – 15%

= R608 3707 (pre morbidly) and

Post morbidly.

R7157. 302 20%

= R5, 725 842 and

Plaintiff’s actual loss is

R608 3707 – R5725 842

Balance R357, 856.40 (being loss of earnings by the plaintiff).

[18.4] In conclusion Mr Mafunda asked this court to apply 20% contingencies and grant an amount of R357, 856.40 to the plaintiff.

[19] Our courts have re-stated the general approach for loss of earnings (See Goldie v City Council of Johannesburg 1948 (2) SA 917 (W) and Southern Insurance Association v Bailey NO 1984 (1) SA 98 (A) at 112E-114F.

[21] The plaintiff must provide the factual basis for its calculations. Actuarial calculations are designed to assess the actual/mathematical calculations. The actuarial approach seeks to determine the loss of earnings as realistically as possible to what may be the plaintiff’s actual loss. Considering the plaintiff actual loss, Mr Mafunda argued that the amount due to the plaintiff is R357.856.40, after having provided the factual basis and applying contingency deductions. I disagree.

[22] I repeat, the actual calculations by plaintiff’s actuary do not take into account plaintiff’s future loss of earnings as an attorney. Had that been the case, it is, in my view unavoidable that the actuarial calculations would have changed. Admittedly, the rationale for the allowance of contingencies is to allow future conditions such as general unemployment, possible loss of earnings, future retrenchment and the list is not exhaustive.

[23] In the case of Bailey supra at 117C-D Nicholson JA held:-

“The generalization that there must be ‘scaling down’ for contingencies seems mistaken. All ‘contingencies’ are not adverse and all ‘vicissitudes’ are not harmful. A particular plaintiff might have had prospects or chances of advancement and increasing remunerative employment.”

[24] In S v Gouws 1967 (4) SA 527 (EC) at 528D Kotze J (as he then was) said with regard to an expert:-

“the prime function of an expert seems to me to be to guide the court to a correct decision on questions found within his specialized field. His own decision should not, however, displace that of the tribunal which has to determine the issue of be trial”. (See Coopers (SA) Ltd v Deutsche SchadlingsbekaMpfung MHB 1976 (3) SA 352 (A)).

[25.1] Davis J in Schneider NO & others v AA & Another 2010 (5) SA 203 (WCC) at 211J-212B had this to say about an expert:-

“In short, an expert comes to court to give the court the benefit of his or her expertise.  Agreed, an expert comes to court to give the court the benefit of his or her expertise.   Agreed, an expert is called by a particular party presumably because the conclusion of the expert, using his or her expertise, is in favour of the line of argument of the particular party.  But that does not absolve the expert from providing the court with (as) an objective and unbiased opinion, basis on his or her expertise, as possible.  An expert is not a hired gun who dispenses his/her expertise for the purpose of a particular case.  An expert does not assume the role of an advocate, nor gives evidence which goes beyond the logic which is dilated by the scientific knowledge which that expert claims to possess”.

[25.2] In this matter there is no opposing expert from the defendant. I did not understand Mr Mafunda to be arguing that the actuarial calculations were wrong, bias, and unfair or based on incorrect principles.

[26] As stated, the plaintiff continues to work post morbidly and may soon be admitted as an attorney. The plaintiff’s actuarial calculations are excluding plaintiff’s possible future employment as an attorney. The plaintiff is due to write only two modules and according to Dr Fourie, it is clear that he has been:-

“rendered a vulnerable employee and unequal competitor in the open labour market and that he is experiencing reduced levels of productivity and will probably continue to do so in future. This will probably result in slower than expected earnings growth and could be addressed by means of a higher post morbid contingency deduction”.

[27] Applying the Googall principle I am of the view that the actuarial contingency deduction calculated by the plaintiff’s actuary is correct and I see no reason not to grant the amount.

[28] In the circumstances, the following order is made:-

1. That the defendant shall pay the plaintiff an amount of R715, 731 (as for loss of earnings);

2. The defendant shall forthwith issue the plaintiff with an undertaking in terms of Section 17 (4) in respect of medical and on proof thereof, resulting from the accident that occurred on 2 June 2008 at Qunu, Eastern Cape;

3. Interest on the capital amount of R715,731.00 calculated from 14 day from date allacatur to date of payment.

4. The defendant shall pay costs of suit, such costs to include:-

(a) Traveling and accommodation costs incurred by the plaintiff’s legal representative, preparation, consultation with expert witnesses and appearance in court on 3 February 2014.

i. Qualifying fees of the following experts:-

Dr Fourie, the Industrial Psychologist

Dr Hans B Enslin, an Orthopedic Surgeon

Dr Y Osman, a Neurosurgeon

Mr W.S Mokgosi, an Occupational therapist

Mr G. Jacobson, an Actuary

M N HINANA

ACTING JUDGE OF THE HIGH COURT

APPEARANCE

FOR THE PLAINTIFF: ADV SWART

INSTRUCTED BY: MESSRS KGOMO MOKHETLE

& TLOA ATTORNEYS

C/O MNQANDI & ASSOCIATES

MTHATHA

FOR THE DEFENDANT: MR MAFUNDA

INSTRUCTED BY: MESSRS POTELWA & CO.

MTHATHA

Case heard on: 03 February 2014

Judgment delivered on: 27 February 2014

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