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REPUBLIC OF SOUTH AFRICA

NORTH GAUTENG HIGH COURT

JOHANNESBURG

 

CASE NO: 76278/09

2013-04-16

In the matter between:

 

J D BOTHA	Plaintiff
and
ROAD ACCIDENT FUND	Defendant

J U D G M E N T

VICTOR, J:

 

[1] On 17 November 2008 and in Pretoria the plaintiff sustained personal injuries in a motor vehicle collision. The merits were conceded in favour of the plaintiff. The only question arising is that of general damages and future loss of earnings.

 

[2] The matter was set down for trial on 31 January 2013 and the only issue for determination was the question of the quantum of the plaintiff’s claim. 

 

[3]  On 1 August 2008 the Road Accident Fund Act No 56 of 1996 was amended by the Road Accident Amendment Act No 19 of 2005 (the Amendment Act).  The plaintiff’s claim arose after the amendment.

 

[4] The defendant rejected the serious injury assessment prepared by Dr Van der Walt in respect of the Plaintiff’s injuries and the sequelae.

 

[5]  The question for determination is whether the defendant’s rejection of the injury as a serious injury which in terms of the Amendment Act excludes an award for general damages also automatically excludes this Court’s jurisdiction to forthwith evaluate and determine the plaintiff’s claim for loss of earning capacity. It is the defendant’s contention that loss of earning capacity is an element of general damages and therefor it is impermissible for the court to deal with this aspect.

 

[6] This issue must be determined upon a proper construction of s17 of the Amendment Act read together with Regulation 3 and an historical analysis of the case law. The plaintiff submits that the determination as to whether loss of earning capacity falls to be categorized as general damages or not within the context of the Amendment Act is res nova in this division and requires a ruling and judgment for the purposes of future litigation. 

 

[7]  It is settled law that a High Court cannot determine general damages. In Road Accident Fund v Duma and three similar cases 2013 (6) SA 9 (SCA) Brand JA in discussing the ‘history and matrix’ of the legislative scheme stated that ‘in accordance with the model that the legislature chose to adopt, the decision whether or not the injury of a third party is serious enough to meet the threshold requirement for an award of general damages was conferred on the Fund and not on the court.’ See also In RAF v Lebeko 2012 ZASCA 159 where Pillay JA also held that a High Court could not deal with the question of general damages.

 

[8]  S17 of the Amended Act reads as follows:

 

  ‘17. Liability of fund and agents.

 

(1)  The fund or an agent shall –

(a)  subject to this Act, in the case of a claim for compensation under this section arising from the driving of a motor vehicle with the identity of the owner or driver thereof has been established and

 

(b)  … be obliged to compensate any party (the third party) for any loss or damage which the third party has suffered as a result of any bodily injury to himself or herself or the death or any bodily injury to any other person caused by or arising from the driving of a motor vehicle by any person at any place within the Republic, if the injury or death is due to the negligence or other wrongful act of the driver or of the owner of the motor vehicle or of his or her employee in the performance of the employee’s duties as employee:  Provided that the obligation of the fund to compensate a third party for an non-pecuniary loss shall be limited to compensation for serious injury as contemplated in subsection 1(a) and shall be paid by way of a lump sum.

 

(1A)(a) Assessment of a serious injury shall be based on a prescribed method adopted after consultation with medical service providers and shall be reasonable in ensuring that injuries are assessed in relation to the circumstances of the third party.

 

(b) The assessment shall be carried out by a medical practitioner registered as such under the Health Professions Act No 56 of 1974.’

 

[9] In terms of s17(1A) read together with s26 of the Act the Minister of Transport made regulations whereby the assessment of a serious injury shall be carried out.

 

[10]   In terms of Regulation 3(1)(b)(ii) and (iii) an injury can only be regarded as serious for the purposes of s17(1A) of the Amendment Act if the injury resulted in 30% or more impairment of the whole person as provided in the AMA Guide. In addition if an injury does not result in 30% or more impairment of the whole person such injury may only be assessed as serious if the injury resulted in a serious long-term impairment or loss of body function, or constitutes permanent or serious disfigurement, or has resulted in severe long-term mental loss, severe long-term behavioural disturbance or disorder or resulted in loss of a foetus. Regulation 3(1)(b)(v) to (vi) deals with the method of assessment. 

 

[11]   Does the rejection of the serious injury assessment report and the consequent referral to the appeal tribunal oust the jurisdiction of the court to assess and award a third party’s claim for loss of earning capacity?

 

[12]   It is the plaintiff’s case that the answer is in the negative.  Loss of earning capacity historically was as a general rule regarded as a form of general damages in its widest sense. See Hoffa NO v South African Mutual Fire and General Insurance Co Ltd 1965 (2) SA 944 (A) at 954, Guardian National Insurance Co Ltd v Van Gool NO 1992 (4) SA 61 (AD), Santam Versekeringsmaatskappy Bpk v Beyleveld 1973 (2) SA 146 (A) at 150B, Dippenaar v Shield Insurance Co Ltd 1979 (2) SA 904 (A).

 

[13]  On a proper interpretation of s17(1) together with 1A, reference to non-pecuniary loss in s17(1) of the Act has been inserted by the Legislature  in relation to compensation for serious injury contemplated in subsection 1A for  the assessment to be determined in accordance with the provisions of Regulation 3. Non-pecuniary loss does not refer to general damages in the wide sense of the word.

 

Can the traditional concept of loss of earning capacity still be regarded as general damages?

 

[14]  In order to translate into future patrimonial loss there has to be a diminution of the third party’s estate now or in the future. See Dippenaar supra.  In Law Society of South Africa and Ten Others v Minister of Transport Accident Fund Case No 10654/09 dated 31 March 2010 (still in the High Court) Fabricius J said at para 36:

‘Persons with non-serious injuries cannot claim damages for pain and suffering and loss of amenities of life for instance but they can still claim medical expenses and loss of earnings.’

 

Fabricius J accepted the principle that a claim for loss of earnings remains alive even in cases of non-serious injuries.

 

[15]  S17(1)(b) is clear in that the general damages referred to in s17(1) really refers to non-pecuniary loss.  Once a loss of earning capacity has been established concomitant with a loss of earnings this cannot be considered non pecuniary for the purposes of this section.

 

[16]  S17(1)(b) has a proviso:

‘Provided that the obligation of the Fund to compensate a third party for non-pecuniary loss shall be limited to compensation for a serious injury as contemplated in sub-section 1(a) and shall be paid by way of a lump sum.’

 

[17]  The Fund has rejected the serious injury, however, in my view there is room for a loss which is pecuniary in nature, albeit historically under the head of ‘general damages’. A proper interpretation of the particular section and regulation must really follow a purposive construction.  In Standard Bank Investment Corporation Limited v Competition Commission and others and various other parties[2000] ZASCA 20; , 2000 (2) SA 797 (SCA), Schutz JA  at paragraph 21, stated:

‘However, as I have been endeavoured to show, our Law is an enthusiastic supporter of purposive construction in the sense stated by Smallberger JA in Public Carriers Public Carriers Association and Others v Toll Toad Concessionaries (Pty) Ltd and Others 1990 (1) SA 925 (A) at 943 G - H. “ Mindful of the fact that the primary aim of statutory interpretation is to arrive at the intention of the Legislature, the purpose of statutory provision can provide a reliable pointer to such intention where there is ambiguity.”’

 

[18]  In this case there is no ambiguity in s17(1)(b); there is a very direct indication that what the subsection dealt with is non-pecuniary loss. Loss of earning capacity is manifestly pecuniary in nature.

 

[19]  In Evins v Shield Insurance Co. Limited 1980 (2) SA 814 (A), in respect of damages under the common law or under the then Motor Vehicle Accident Act Trollip JA said the following:

‘I am not sure that it necessarily follows that because one factual basis differs from another in some respects, separate or different rights of action arise, on the contrary, both cases may nevertheless beget only one right of action or debt e.g. one for the plaintiff’s entire patrimonial loss.’

 

[20]  Corbett JA in that same case analysed the facts and despite the fact that there was one accident concluded there can be two separate causes of action following from that incident.  On page 836 he states:

‘The concept of a cause of action - and the question whether different claims constitute part of a single cause of action or separate causes of action, are of particular significance in regard to the application of the so-called once-and-for-all rule and also in connection with questions of res judicata and prescription.  The once-and-for-all rule applies especially to common law actions for damages in delict.’ 

 

[21]  It has been held that where a plaintiff has in the same accident sustained both bodily injuries and damages to property, the claims for damages relating thereto constitute one indivisible cause of action and that consequently the final adjudication by a competent Court of the claim in respect of damage to property, precludes by way of res judicata, a subsequent claim by way of a common law action for damages relating to bodily injury.

 

[22]  In a number of cases in the then Appellate Division, loss of earning capacity was dealt with as being pecuniary in nature. In this regard I refer to the cases of President Insurance Company Limited v Mathews 1992 (1) SA 1,  Santam Versekeringsmaatskappy Beperk v Byleveldt 1973 (2) SA 146 at 150(b-d);  Dippenaar v Shield Insurance Company;  Rudman v Road Accident Fund 2002 4 All SA 422 (SCA);  and Griffiths v Mutual and Federal Insurance Company Limited [1993] ZASCA 121; 1994 (1) SA 535 (A); which all refer to the fact that once there is a diminished earning capacity, this is in fact a pecuniary loss and historically our Courts have then applied the various formulations, using contingencies as a tool to arrive at a fair and equitable amount.

 

[23]  In my view, if the legislative framework of the Amendment Act intended to remove matters from the purview of the courts then it would have done so expressly. The Amendment Act says nothing about the loss of earning capacity being a non-pecuniary item. There is no rational basis to read into the Amendment Act that loss of earning capacity is a non - pecuniary item. To read into the Amendment Act that a litigant who suffers a non- serious injury is precluded from pecuniary relief simply because historically a loss of earning capacity fell into the category of general damages has no rational basis in the absence of the Amendment Act making this an express exclusion.

 

[24]  In Van der Merwe v Road Accident Fund & another; (Women’s Legal Centre Trust as Amicus Curiae [2006] ZACC 4; 2006 (4) SA 230 (CC), Moseneke DCJ in paragraph 38 stated:

‘Thus patrimonial damages which in practise are also called special damages, aim to redress to the extent that money can, the actual or probable reduction of a person’s patrimony as a result of the delict or breach of contract.  In this sense patrimonial damages are said to be a “true equivalent” of the loss. Ordinarily they are calculable in money. Well settled examples in bodily injury claims are past and future medical expenses, past and future loss of income, loss of earning capacity’ (my emphasis.)

 

[25]  The Deputy Chief Justice went on to say in paragraph 39:

‘On the other hand non-patrimonial damages which also bear the name general damages, are utilized to redress the deterioration of a highly personal legal interest that attach to the body and personality of the claimant. However, ordinarily the breach of a personal legal interest does not reduce the individual’s estate and does not have a readily determinable or direct monetary value. Therefore general damages are, so to speak, illiquid and are not instantly sounding in money. They are not susceptible to exact or immediate calculation in monetary terms.’

 

[26]  However, this does not dispose of the real relationship between the pecuniary nature of the future loss of earning capacity.  In so far as the general damages are concerned, pain and suffering, disfigurement and loss of amenities fall under the section referred to in Van Der Merwe supra, namely that general damages are illiquid. However, the Deputy Chief Justice made it clear in paragraph 38 that loss of earning capacity is of course a pecuniary loss as I have defined it above. 

 

[27]  In the result I find that the reference in S17 read together with regulation 3 cannot be read to include loss of earning capacity and loss of earnings as these are pecuniary in nature. It is not a form of non- pecuniary relief and thus falls outside of the general damages calculation as provided for in s17.  Loss of earning capacity of necessity involves a loss of money. It cannot be referred to as a non-pecuniary in nature if indeed there is a true loss of earning capacity. Loss of earning capacity is calculable according to the legal tools such as contingencies which the Courts use at this stage.

 

[28]  On the defendant’s argument there cannot be a claim for diminished earning capacity if it is not capable of calculation immediately and without reliance on tools such as contingencies and the like. This argument disregards the trusted tools evolved and used by the courts over decades. An injury may become more pronounced with time and age. It would be an unfair on a claimant to preclude a court at the time of adjudicating the claim from making an assessment into the future on the question of a patrimonial loss.

 

[29]  In my view and in addition, based on the case of Hoffa N.O. v SA Mutual Fire and General Insurance Company supra Van Winsen J stated that ‘patrimonial loss would not include within its ambit a claim for compensation for pain and suffering, and loss of amenities of life.’ In Guardian National Insurance Co Ltd v Van Gool No 1992 (4) SA 61 (A) Joubert JA quoted with approval the following principle:

'Secondly, as regards bodily injury, all patrimonial loss actually incurred by the plaintiff, such as, for example, medical and hospital  expenses and past loss of earnings, is treated as special damage; while all non-patrimonial loss, such as pain and suffering, loss of amenities, disfigurement and loss of expectation of life, and patrimonial loss, which up to the time of the hearing has not yet crystallised in actual loss or disbursement but is still prospective, such as future medical expenses and future loss of earnings, are classified as general damage.'

 

[30] However, those cases when decided, took place in an era prior to the current legislation. Presently s17 read with regulation 3 precipitate the need to assess whether the historical category of future loss of earnings and loss of future earning capacity should continue to be categorised as general damages. It is manifestly unfair to non-suite a plaintiff who has been injured and who does not qualify under the serious injury category because of an historical categorization as general damages. This would result in such a plaintiff having to live with a situation which is really contrary in principle to the concept of compensation in our law of damages for personal injuries.

 

[31] In addition the defendants rely on the South Gauteng judgment delivered on 24 June 2011 of Riana Deysel v The Road Accident Fund Case No 2483/09 where the question of that diminished work capacity was really compensated in a theoretical and academic way by topping up the general damages. Bizos AJ undertook an extensive analysis of the meaning of earning capacity. He found that the two elements of loss of income and a loss of earning capacity cannot exist independently from each other.  He states ‘Earning capacity is part of a person’s patrimony but this capacity can only be proven to have been lowered and the damages for this quantified, by approving an actual loss of income. However when both of these losses have been shown to exist then the claim for one is also the claim for the other and they appear to be interchangeable’. At paragraph 21 it is held that ‘an actual monetary loss must be suffered that is loss of income before one’s earning capacity can be said to have been damage for purposes of a patrimonial claim under this Act.’  In Deysel no actual loss of income was found but that it took the plaintiff longer to achieve the same level of work productivity.

 

[32] The plaintiff’s Counsel submitted a very detailed and helpful analysis of how the 30% impairment of whole person is categorised and demonstrated unequivocally the very argument that I have just accepted, namely, that a plaintiff who has not suffered a serious injury, as contemplated in S17, read together with 1A, should not be prejudiced and should be entitled to pecuniary compensation ‘which up to the time of the hearing has not yet crystallised in actual loss or disbursement but is still prospective.’

 

[33] The once-and-for-all Rule is of importance here.  It cannot assist a plaintiff who may in the future, depending on the nature of the injury, be subjected to a loss of earning capacity which he/she cannot quantify with exactitude at the time of trial. Therefore based on this principle, the Court must at this stage determine the question of future loss of income.

 

[34] In analysing the legislative framework further, it was submitted on behalf of the plaintiff that upon a proper application of S17(1A), pecuniary loss which includes loss of earning capacity should not be included in the general damages category.

 

[35] There are five considerations advanced in support of that submission. The first is that having regard to the formulation of the RAF-4 form itself and the contents of the introductory instructions to the RAF-4 form, compiled pursuant to regulation 33(a) it becomes clear that a loss of earning capacity is not and should not be determined in terms of a serious injury assessment. In this regard, reference was made to the wording of paragraph A and the introductory remarks to the serious injury assessment report:

‘(sub-section A) A claim for non-pecuniary loss (general damages) or pain and suffering, will not be considered unless this report is duly completed and submitted.’

 

[36] Plaintiff submits that the Legislature has defined the term ‘non-pecuniary loss’ by explaining same with reference to the terms ‘general damages’ or ‘pain and suffering’. The Legislature equates general damages to pain and suffering in describing what would be understood under non-pecuniary loss.

 

[37] It does not mention or include loss of earning capacity as a definition of non-pecuniary loss and in this regard this particular argument is consistent with the reasoning of the Deputy Chief Justice in Van der Merwe v Road Accident Fund, supra.

 

[38] Counsel on behalf of the plaintiff analysed the RAF-4 form further and made the submission that it is clear that the assessment does not concern itself with a third party’s earning capacity, or the loss thereof in any aspect on the form.

 

[39] The second submission to support that approach is the fact that the Legislature defines very clearly by whom the assessment must be conducted and referred to by the appeal tribunal.  In all that procedure, and taking into account the case of Road Accident Fund v Duma supra, it is clear that the question of the pecuniary loss for future loss of earning capacity is not dealt with. The wording of the form equates to general damages and does not mention loss of earning capacity as part of the definition.  The assessment is conducted by the appeal tribunal.  In Road Accident Fund v Duma supra the court held that a medical practitioner is compelled to examine the plaintiff. Only medical practitioners could do so.  It is therefore clear that the serious injury assessment does not provide for an assessment of loss of earning capacity as that would not be within the expertise of a doctor.

 

[40]   Once a serious injury assessment is rejected by the Fund it might well ultimately be referred to the appeal tribunal for final determination only on the injuries. The appeal tribunal is not qualified to opine on the loss of earning capacity.  It is nonsensical therefore for the appeal tribunal to assess future loss of earning capacity. It follows therefore that a finding of non-serious injury does not exclude a third party’s claim for loss of earning capacity.

 

[41] The third submission relates to the finding that a non-serious injury based on the appeal tribunal’s defined role, and legislation, and the contents of the RAF-4 form together with the narrative test cannot be interpreted to mean that a person who does not sustain a non-serious injury, is excluded by virtue of any damages which he/she might sustain in their loss of earning capacity. 

 

[42] The fourth principle submitted by Counsel for the plaintiff is as follows: is the determination of the loss of earning capacity by the Court subject to or dependent on any findings by the appeal tribunal? Clearly the answer is in the negative and therefore this is a further feature which militates against the stance of the defendant that a future loss of earnings is not a component which can be determined by the Court if there is a non- serious injury.

 

[43] The fifth submission relates to the lump-sum nature of an award in respect of loss of earning capacity.  Authorities on the Act, prior to its amendments, supported the contention that a future loss of earning capacity which is not yet translated into a real loss of earnings, should be compensated by way of a lump sum award on top of an award of general damages. In this regard reference was made to the case of Southern Insurance Association Limited v Bailey 1984 (1) SA 98 (A).  Quite clearly then, if it was the Legislature’s intention to oust the court’s jurisdiction in its assessment of loss of earning capacity in respect of those suffering non-serious injuries, it would have legislated in that regard.

 

[44] In the result the plaintiff succeeds in its submission that this Court’s jurisdiction is not ousted on the question of future loss of earning capacity and loss of earnings because historically loss of earning capacity fell into the category of general damages.

 

I make the following order:

 

1. The defendant’s point in limine is dismissed.

2. It is declared that this Court has jurisdiction to forthwith  determine and award the plaintiff his proven or agreed damages suffered as a result of the plaintiff’s loss of earning capacity, despite the defendant’s rejection of the plaintiff’s serious injury assessment.

3. The plaintiff is granted leave to present evidence in support of his claim for loss of earning capacity on a date to be determined by the Registrar.

4. The defendant shall pay the costs of this point in limine.

 

VICTOR J

 

COUNSEL FOR PLAINTIFF: Adv N De Jager

INSTRUCTED BY: Gustav Smit Attorneys

COUNSEL FOR DEFENDANT: Adv P De Klerk

INSTRUCTED BY: TM Chauke Attorneys

DATE OF HEARING: 31 January 2013

DATE OF JUDGMENT: 16 April 2013

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