IN THE HIGH COURT OF SOUTH AFRICA

GAUTENG DIVISION, PRETORIA

Case Number: 55792/12

DELETE WHICHEVER IS NOT APPLICABLE

(1)
	
REPORTABLE: YES / NO. 

(2)
	
OF INTEREST TO OTHER JUDGES: YES / NO.	

(3)
	
REVISED.

	
	
DATE		
SIGNATURE		

In the matter between:

NTOZAKHE ALFRED NDINISA	PLAINTIFF	

and

ROAD ACCIDENT FUND	DEFENDANT	

Coram:  HUGHES J

JUDGMENT

Delivered on: 23 May 2014

Heard on: 21 May 2014

HUGHES J

1.	The plaintiff Ntozakhe Alfred Ndinisa instituted a claim against the defendant, Road Accident Fund, arising from a motor vehicle collision on 29 October 2008. The defendant conceded 100% liability.

2.	The plaintiff sustained the following injuries:

2.1	a severe injury to the right tibula and fibula resulting in a traumatic amputation of the right ankle;

2.2	eventual above knee right leg amputation;

2.3	extensive lacerations and scaring;

2.4	psychological stress and trauma;

2.5	ghost pains and neurological complications in amputated stump.

3.	Prior to these proceedings the parties agreed on the following:

3.1.	an undertaking in terms of section 17(4) (a) of the Road Accident Fund    
             Act, 56 of 1996 would cater for future medical expenses; 

3.2	the compensation of general damages would be R700 000.00 
 
3.3	the calculation in the actuarial report of Human and Morris dated 14 May 2014 in respect of future loss of earning and /or earning capacity. 

4.	The crisp issue left to be determined is the applicable contingencies to be applied. Fortunately the parties are in agreement that the applicable contingency to be applied to past loss of earnings is 5%.  This leaves me to determine the relevant contingency to be applied to future loss of earnings.

5.	The following reports were handed in by consent :

5.1	Dr J F Ziervogel ( Orthopaedic Surgeon and Radiologist)

5.2	Genesis Actuarial Solutions (Actuary)

5.3	Brian Redelinghuys (Orthotist Prosthetist)

5.4	Dr Kobus Truter (Clinical Psychologist)

5.5	Dion Rademeyer (Mobility Consult)

5.6	Dr J P M Pienaar (Plastic & Reconstructive Surgeon)

5.7	Dr D A Birrel (Orthopaedic Surgeon and Radiologist)

5.8	Laura Joyce (Occupational Therapist).

5.9	Andre F Kok (Industrial Psychologist)

5.10	Human & Morris (Actuary)

6.	The plaintiff’s highest level of education is that of grade 10. His work history as recorded in the reports is that he was self-employed from 2003 to 2007 performing the services of gardening in various households earning a monthly income of R800.00. In 2007 he obtained a position at Spar performing duties in the bakery. At Spar he earned a monthly salary of R1 800.00. His services were terminated on 29 October 2008 due to his incapacity to work as a result of this motor vehicle collision.  

7.	Andre` Kok  states in his report that “according to Dr Birrel, the client  has a 60% loss of work capacity due to the accident and has a tiny chance of being able to find light duty work, but in all likelihood will not find any work again in the future.” Kok postulates that in his opinion the plaintiff is unlikely to secure and maintain an appropriate position in the open labour market and as such the plaintiff is practically unemployable. Thus the plaintiff has suffered a total loss of income from the date of the accident. 

8.	As a source of income the plaintiff does receive a monthly State Grant. In the scenario of the plaintiff Kok suggested that he be categorised as an unskilled worker entering the labour market at Paterson level A1 and progressing to Paterson A3 which he would reach at age 45 and his career lifespan will be age 65 being retirement. In addition there is the suggestion that he be place in the non-corporate labour sector categories which would entitle him to a basic salary without fringe or employee benefits.   

9.	Mr Alberts SC for the plaintiff argued that in the circumstances of the plaintiff it would be fair and equitable to apply a contingency deduction of 15% only and nothing higher against the future loss of earnings calculation. He attributes this suggestion to the fact that the plaintiff will have nil earnings for the rest of his life as he is unemployable.

10.	Mr Westebaar for the defendant contended that in this instance a contingency of 25% should be applied. He submitted that this was because the earnings of the plaintiff prior to the accident had not been confirmed. Further that the plaintiff had only been in the employ of Spar for a mere 18 months. Lastly that the job market comprising of Spar and the like, that is retail sector, was a volatile sector and it could not be guaranteed that the plaintiff would have been able to hold down his job for a long time. Thus it could not be said that the plaintiff had been in a secure job. 

11.	The determination of contingency allowances involves a process of subjective impression or estimation rather than objective calculation, in other words, allowance on which judicial opinions vary appreciably. See Shield Insurance Co Ltd v Booysen 1979(3) SA 953(A) at 965 G-H

12.	In Southern Insurance Association v Bailey NO 1984(1) 98 AD the two approaches that can be used to ascertain future loss of earnings are discussed on page 113 where the following is said by Nicholas JA:

“One is for the Judge to make a round estimate of an amount which seems to him to be fair and reasonable. That is entirely a matter of guess work, a blind plunge into the unknown. The other is to try to make an assessment by way of mathematical calculations, on the assumptions resting on the evidence. The validity of this approach depends of course upon the soundness of the assumptions, and these may vary from the strongly probable to the speculative. It is manifest that either approach involves guesswork to a greater or lesser extent.”

Continues on page 114C-D to state:

“In a case where the Court has before it material on which an actuarial calculation can usefully be made, I do not think that the first approach offers any advantage over the second. On the contrary, while the result of an actuarial computation may be no more than an “informal guess” it has the advantage of a logical basis”. In addition refer to in Smit NO v The Road Accident Fund, The Quantum of Damages, Corbett and Honey, Volume 5, B4-251. 

13.	Robert J Kock in his book “The Quantum Year book” states that there are no fixed rules as regards general contingencies and one of his helpful guidelines is that of the sliding scale contingency theory: 

“Sliding scale: ½ % per year to retirement age, i.e. 25% for a child, 20% for a youth and 10% in middle age”.

14.	Kock’s support of this sliding scale theory is attained from Goodall v President Insurance 1978 (1) SA 389 (W). In Goodall, Margo J applied a contingency of 10% to the future loss of earnings calculation of a 46 year old male buyer in a commercial company. Margo J attributed this percentage to the fact that the buyer was a steady employee, the period of calculation for his loss of earnings was short and the fact that he had enjoyed a good life but for this accident. In the judgment at 393 A-E the methodology of the sliding scales madness is illustrated. At 393B-E the following was stated “In Van Rensburg’s (Van Rensburg v President Versekeringsmaatskappy WLD 21.11.68, The Quantum of Damages Volume 2 at page 65) case the plaintiff was 25 years old and in De Jongh’s (De Jongh v Gunther and Another 1975 (4) SA 78 W) case, which was a claim by dependants for loss of support, Nicholas J adopted the figure of 20 percentage  for contingencies in relation to deceased ‘s earning power, the deceased having been approximately 25 years of age at the time of death…In the well-known case of Sigournay v Gillbanks 1960 (2) SA 552 AD, Schreiner J A at  p  569, made provision for contingencies in an amount equal to approximately 16%. The plaintiff in that case was 33 years of age, a fact which appears from the report of the case in the Appellate Division or in the court of first instance, or Corbett and Buchanan”.

15.	In the present case the plaintiff was 25 years old at the time of the motor vehicle collision. The plaintiff’s highest level of education was grade 10. The majority of his working life he worked as a gardener earning R800.00 per month. His employment at Spar at a salary of R1800.00 per month was short lived and only lasted for 18 months. 

16.	Mr Alberts SC submitted that the sliding scale method merely amounts to a thump suck and should not be applied. I tend to disagree as is evident from the case law above the sliding scale has been in existence and utilised as far back as 1960 in the Appellant Division. .

17.	In this matter we have a situation where the plaintiff earned a salary of R23 400.00 per annum at the date of the collision. Kock sets his future loss to commences at R53 400.00, this is R30 000.00 more than what he earned as at the date of the accident. Further, that the future loss of the plaintiff would need to be calculated over a longer period in order to reach retirement age 65.  It is also relevant to take into account the fact that the plaintiff is unemployable for the rest of his life and that he has endeavoured to hold down a job from the time he existed school.  I am of the view considering Sigournay’s case above and Kock’s Quantum year book, in the circumstances a contingency of 20% would be appropriate to apply as a contingency deduction to the future loss of earnings. 

18.	In the result as set out in Human & Morris’s report if 5% contingency deduction is applied to the past loss as agreed, 20% is applied to the future loss and the disability grant is deducted the net total amounts to R1 341 571.00.

19.	The net loss together with the amount agreed in respect of general damages totals R2 041 571. 00.

20.	The order granted is in terms of the order attached marked X, duly incorporated into the judgment, with the insertion of the amount of R2 041 571.00.

 _______________________________
W. Hughes Judge of the High Court
Delivered on: 23 May 2014

Heard on: 21 May 2014

Attorney for the Plaintiff
SAVAGE JOOSTE & ADAMS INC.
141 Boshoff Street
Nieuw Muckleneuk
PRETORIA
Ref: MR HAYES/MS/RP2789

Attorney for the Defendant
MSMM INC.
980 Park Street
Hatfield
PRETORIA
Ref: RAF11671/1/1 File No. C11919