Not reportable
Delivered:  20 June 2007

IN THE HIGH COURT OF SOUTH AFRICA
(TRANSVAAL PROVINCIAL DIVISION)

								         CASE NO: 13322/03

In the matter between:

SALOMIE NEL                                                                                             Plaintiff  

and

ROAD ACCIDENT FUND						               Defendant

________________________________________________________________
JUDGMENT
________________________________________________________________

MURPHY J

1.	The plaintiff has instituted an action against the defendant for damages arising out of a collision which occurred on 3 February 2002 in the district of Carolina.  The collision involved a motor vehicle driven by Mr Mbokane and a donkey cart in which the plaintiff was a passenger at the time.

2.	At the commencement of the trial the parties agreed upon a written statement of facts for adjudication in terms rule 33(1).

3.	The defendant has conceded liability and is liable for 100% of the plaintiff’s proven damages.

4.	The plaintiff sustained compression fractures of the vertebral bodies of the T11, T12 and L1 vertebrae in the collision. 

5.	At the time of the collision, the plaintiff was employed by a firm of attorneys as a junior bookkeeper at a salary of R5000 per month.  She remains so employed and presently earns a package of R8806 per month.

6.	But for the accident, the plaintiff would have continued in employment until the retirement age of 65 years.  Having regard to the accident, the plaintiff will be compelled to retire at 55 years.

7.	Prior to the collision in 2001, the plaintiff had enrolled at Damelin Graduate College and had successfully completed three subjects towards her BCom Accounting degree prior to the accident.  The plaintiff enrolled for a further year of study in 2002 and effected payment of her fees.  However, before the course began, the accident occurred.  Subsequent to the collision, the plaintiff attempted to return to her studies but failed the two courses for which she was registered.  It is improbable that the plaintiff will ever return to any further studies due to her injuries.

8.	Subsequent to the accident in the period September 2002 to February 2005 the plaintiff undertook additional part time bookkeeping work on behalf of another firm of attorneys.  She testified at the hearing that she earned R120 per hour in 2005 and worked about 40 hours a month.  Her income from this source in July 2005 was in the amount of R4800 per month.

9.	But for the collision, and without any further qualifications, the plaintiff would presently be earning an income from her employers of R10 000 per month.  The amount that she is currently paid is less than this because the employer is obliged to accommodate her as a result of her injuries.

10.	In terms of the expert opinion of the industrial psychologist who filed a report on behalf of the plaintiff, if the plaintiff had qualified with a BCom degree, she would have taken up a position at the C1 Patterson level and have progressed to a position at Patterson C4 level, progressing between levels at intervals of four years.

11.	If the plaintiff did not proceed with her BCom, but merely obtained a lower qualification as a bookkeeper, she would have earned at the Patterson B4 level, progressing to the C1 level after two years and reaching the Patterson C3 as her ceiling. In his calculations regarding this scenario the actuary, who filed an opinion on behalf of the plaintiff, allowed for the fact that the plaintiff would have taken 24 months to qualify as a bookkeeper.  Thus she would have only achieved the Patterson C1 grade in February 2007, and would have stayed at B4 grade from the date of the accident until then.

12.	In consequence of the injuries sustained in the collision, the plaintiff’s income will remain constant until a retirement age of 55 years old, save for inflationary increases.  The parties are in agreement that the gross-prospective value of that income, having regard to the accident, is R1,6 million.

13.	The defendant has agreed to furnish the plaintiff with an undertaking in terms of section 17(4)(a) of the Act in respect of future medical expenses.

14.	The defendant at an earlier stage made an interim payment to the plaintiff in the amount of R300 000 which was made up as follows:

1.	Settlement of general damages R150 000.
2.	Payment towards past medical and hospital expenses R25 000.
3.	Payment towards plaintiff’s future loss of earnings R125 000.

15.	The parties are in agreement that the balance owing in respect of past medical expenses is R29 061,78. 
16.	It was further common cause that the past loss of income is in the amount of R82 000.

17.	The only point in dispute between the parties therefore is the amount payable as the plaintiff’s future loss of earnings.  There are three possible scenarios.  Two of the scenarios are set out in a report of the expert actuary, Mr Ivan Kramer, a fellow of the Institute of Actuaries dated 14 October 2005.  The first scenario he describes as basis A, which has been referred to above.  This is the scenario where it would have taken the plaintiff 24 months to qualify as a bookkeeper and during which time she would have earned at the B4 Patterson level and thereafter would have progressed to the C1 Patterson level after two years and thereafter would have progressed to the C2 level (unqualified accountant) after four years and to the C3 level (unqualified internal auditor) four years later and that this would be her ceiling.  The second scenario, referred to by the actuary as basis B, contemplates that after three to five years (taken as four years) the plaintiff would have qualified as an accountant with a BCom degree.  She would have then commenced working at the C1 Patterson level (assistant accountant) ultimately progressing to the C4 (accountant).  The actuary assumed that progression between the Patterson levels would have taken place at intervals of four years.

18.	The defendant has put forward a third scenario, being that the plaintiff would remain in her present position but would simply have to retire earlier at age 55 owing to the injuries sustained in the accident.

19.	The plaintiff testified that she matriculated in 1998 and started work as a receptionist at her current employer and moved to a bookkeeping position during 2000.  Her mother is a bookkeeper, who has encouraged the plaintiff to become involved in bookkeeping as a means of better applying her talents and aptitude. During 2000 the plaintiff attended two short part time courses at Kelly-Green Oakes Secretarial and Business College for which she was awarded a certificate in conveyancing procedures and a certificate in litigation procedures.  During the same year she acquired a similar certificate from the same institution on successful completion of a part time typing course dealing with keyboarding and basic paragraphs.

20.	I interpose to mention that the plaintiff was born in 1980 and the accident occurred a few weeks before her twenty second birthday.  

21.	As I have mentioned, during the 2001/2002 academic year the plaintiff registered for a BCom Accounting course with Damelin Graduate College.   In 2001 she passed Financial Accounting 1A, Financial Accounting 1B and Economics 1A.  The following year she failed Business Law 3A and Economics 1B.
22.	The plaintiff explained her motivation for registering for the BCom.  She claimed it was her intention to eventually get a BCom Accounting degree and qualify as a chartered accountant.  Under cross-examination it appeared that she had limited knowledge of what was in fact required to qualify as a chartered accountant.  Thus she had no idea that she would have been required to do a post-graduate course in accounting in addition to the board exam.  Despite that, she stated that she intended to qualify by the age of 30 and to have two children by the age of 29.  She believed that she would have been able to accommodate the children.  Because of the accident she believes that she is now unable to achieve her ambitions and will not be able to cope by virtue of her injuries.  When cross-examined more closely it was clear that she also had no knowledge of the fact that the examination was administered by the Board of Auditors on a national basis.  The point made in argument was that while she may have had vague ambitions in that direction it was clear that the plaintiff had limited knowledge about what in fact would have been required of her to become a chartered accountant.

23.	Other relevant information is that the plaintiff’s mother is a bookkeeper, her deceased stepfather worked as a policeman and her one sibling has entered the employment market as a draughtsman.

24.	Her matric results are average. She obtained four C’s and two D’s.  Her subjects were in the business area and besides the languages included economics, accounting, business economics and hotel keeping and catering.

25.	Mr Bezuidenhout, who appeared for the defendant, further emphasised that the plaintiff had not immediately pursued university studies on leaving school, but had entered the job market.  As I understand his submission,  persons motivated to become chartered accountants normally would have started out earlier.  

26.	The plaintiff has recently married.  Her husband is an auto-electrician.

27.	Taking account of all these facts and considerations, the plaintiff’s family background; the employment preferences of her parents, sibling and husband; her academic and work performance since matric; her ambitions to have two children before the age of thirty; and her lack of insight into the actual requirements of becoming a chartered accountant, I am of the opinion that the scenario described by the actuary as basis B is an unlikely scenario. Frankly put, the plaintiff’s ambitions seem somewhat unrealistic and it is more probable that she would have remained as a bookkeeper.  However, I do not accept the defendant’s scenario either.  From her academic performance since matric, and her general ambition to improve her qualifications, I am satisfied that at the very least the plaintiff would have acquired some form of qualification to work as a bookkeeper and that she would have progressed through the ranks to become an unqualified accountant.  Hence I am persuaded that the likely scenario is that referred to by the actuary as basis A.

28.	The defendant’s actuary, Mr GA Whitaker, computed the plaintiff’s loss of earnings on the third scenario presented by the defendant by starting out with a value of her income had she not been injured in an amount of R2 338 044. He subjected this to a contingency deduction of 15%, being R350 707; leaving an amount of R1 987 337.  From this he deducted the value of the income that the plaintiff will in fact earn having regard to the accident.  This amount was somewhat more than that which the parties agreed on.  The agreed amount, as set out above, is R1,6 million.  If one subjects that to a 15% contingency deduction, being R240 000 the value of the income having regard to the accident would be R1 360 000.  Thus, on the defendant’s scenario, the plaintiff’s loss of future income would be R627 337 (being R1 987 337 minus R1 360 000).

29.	In his initial calculations Mr Kramer, the actuarial expert for the plaintiff, calculated the basis A scenario without taking account of the fact that the plaintiff had earned an additional R4800 a month in July 2005 for her part time bookkeeping work.  The plaintiff claims she gave this work up because it became to onerous on her injured back.  However, subsequent to the hearing, by agreement between counsel for the parties, a further report has been submitted to me in which the actuary has computed an amount representing the future loss in respect of these earnings but for the accident.  

30.	I turn first to deal with the amount computed by the actuary not taking account of the part time earnings.  The actuary calculated the amount of the gross prospective value of the income but for the accident as being R3 598 050.  From this he deducted a contingency of 15%.  I am of the opinion that a contingency of 15% is too generous.  I agree with the defendant that we have to do here with a long time period, being 40 years and a number of imponderables need to be accounted for.  For example, the plaintiff’s husband may improve his position and earn a higher income.  It is likely that were the plaintiff to earn a higher income compared to her present income, that the plaintiff would probably take longer periods off work to care for her children and the like.  Accordingly, I have decided to deduct an amount of 25% as a contingency from this figure.  This amounts to R899 513, leaving then a net prospective value of income but for the accident of R2 698 537.  I am satisfied that the net prospective value of the income having regard to the accident should be the amount agreed as the gross prospective value of income, being R1,6 million, less a 15% contingency of R240 000, leaving a total of R1,360 000.  This leaves a total then of R1 338 537 as future loss of earnings not taking into account the part time earnings.

30.	The actuary has calculated a gross prospective value of the part time income in the amount of R1 424 059, from which he deducted a contingency of 15% leaving him with a net prospective value of R1 210 450.  The evidence with regard to the part time income is that the plaintiff, like her mother, took on freelance work which she did after hours and was setting out in the direction of becoming a part time bookkeeper dealing with attorney’s trust accounts.  She managed to do the work for just over two years.  I am in agreement with the defendant that the probabilities are that she would not have continued with this work throughout her lifetime.  She made it abundantly clear that she intended to have children and to advance her career.  I expect that after she began earning a higher income under the basis A scenario, and once she had children, it is highly likely that she would have given up this work entirely.  The demands of motherhood and a full time job, either as an unqualified accountant at C2 level or an unqualified internal auditor at C3 level, which is the scenario projected in basis A, would have made part time work difficult, undesirable and unnecessary.  Had she continued in the scenario put forward by the defendant, then it is perhaps likely that she would have continued.  Under the basis A scenario the plaintiff would have become a C2 unqualified accountant in 2011.  In other words, she would have probably done part time work for four years out of the remainder of a forty year working life.  Thus, taking account of that and making allowance for a certain measure of imponderability, the gross prospective value of income earned from part time work but for the accident should be reduced by a contingency of 85% leaving an amount of R213 609 (being R1 424 059 minus R1 210 450).

31.	The total then for future loss is the amount of R1 338 537 plus R213 609 giving a total of R1 552 146.  From this must be deducted the amount of R125 000 which was paid to the plaintiff as part of the interim payment in respect of future loss of earnings.  The balance then payable for future loss of earnings is R1 427 146.

32.	In the premises, the following orders are issued:

1.	The defendant is directed to pay the plaintiff the following:

a)	R1 427 146 as future loss of earnings;

b)	R82 000 as past loss of income;

c)        R29 061,78 as past hospital and medical expenses; and

d)	interest on the above amounts at a rate of 15.5% from 22 May 2003 (date of summons) until date of payment.

2.	The defendant is directed to furnish the plaintiff with an undertaking in terms of section 17(4)(a) of the Act.

3.	The defendant is directed to pay the plaintiff’s costs, such costs to include the costs of senior counsel and to include the costs of the reports of the experts to whom notice was given.

JR MURPHY
JUDGE OF THE HIGH COURT     

Date Heard:12 June 2007
For the Applicant: Adv IJ Zidel SC, Johannesburg
Instructed By:Michael De Broglio Attorneys, Johannesburg
For the Respondent: Adv F Bezuidenhout, Pretoria
Instructed By:Swartz Du Plessis Attorneys c/o Tyron I. Pather & Associates, Pretoria