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IN THE HIGH COURT OF SOUTH AFRICA

EASTERN CAPE DIVISION, GRAHAMSTOWN

Case no: 625/2008

Date Heard:28/10/2010

Date Delivered:04/11/10

In the matter between:

EUNICE NOKWAKHA MAKINANA obo

S M ….............................................................................PLAINTIFF

Versus

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

JUDGMENT

SMITH J:

[1] S Makinana ("S") was seven years old when she was seriously injured in a collision which took place in Bedford on 19 May 2006. She was a pedestrian at the time.

[2] In the subsequent legal action for damages against the Road Accident Fund, her grandmother, Eunice Nokwakha Makinana, initially acted on her behalf, but a duly appointed curator bonis, namely Frederick Johannes Potgieter, was subsequently substituted as plaintiff.

[3] At the commencement of the trial I was informed by counsel that the parties have agreed on the following:

1. The merits have been settled in favour of the plaintiff and the defendant is therefore liable to compensate the plaintiff for such damages as may be proved in due course;

2. Defendant will pay to plaintiff an amount of R350 000. 00 in respect of general damages;

3. The defendant will provide the necessary statutory certificate indemnifying the plaintiff in respect of future medical expenses;

4. The report of the orthopedic surgeons, namely Doctors Basil McKenzie and P. A Olivier, shall be admitted without the need for evidence and the contents thereof are admitted by the parties.

In this regard I may mention that both doctors agree that S will be limited to sedentary or semi-sedentary employment as a result of her injuries. The only aspect in respect of which there is disagreement between them is that Dr Olivier is of the opinion that S may require amputation whereas Dr McKenzie is of the view that the need for this may be averted by further surgery on the leg.

[4] The only issue which falls for determination therefore is the quantification of the loss of future earnings. I have been informed by counsel in this regard that the parties have agreed that the actuarial calculations will be based on the report submitted by the defendant's expert, Mr Wim Loots.

[5] Mr Loots’s calculations are based on the assumption that S would be permanently unable to acquire any form of employment as a result of her injuries. The five scenarios postulated by Mr Loots are all on the basis of an assumption that S would have been employed in the non-corporate sector.

[6] S’s grandmother, Eunice Makinana, testified that S has been living with her in Bedford since she was very young. She is now schooling in Bedford and is repeating grade 3. Two school reports, being in respect of 2007 and 2009, respectively, were handed in by agreement. The 2009 report indicates that S had failed and she therefore had to repeat grade 3. Mr Makinana was unable to locate the 2008 report.

[7] Mrs Makinana further testified that she herself never attended school and has been employed as a domestic worker throughout her life.

[8] S’s mother, Julia Makinana, as well as her father, had passed away. Julia left school in standard 7 and had never worked during her lifetime. She lived with Mrs Makinana in Bedford but would on occasions stay with her aunt in Port Elizabeth. S’s father was, during his lifetime, also a farm worker in the Bedford area.

[9] Mrs Makinana has a sister who lives in Cape Town. She also has a son, Loyiso, who attended school up to standard 6 and is presently employed as a farm worker in Bedford.

[10] S testified that she wants to become a teacher. If for some reason this dream cannot be realized she would want to work in Bedford as a domestic worker. Her twin sister is now a year ahead of her in school and is presently doing grade 4.

[11] It appeared during her testimony that S’s vision is still very much focused in Bedford and the possibility of acquiring employment there as a domestic worker. She does however watch television from time to time and is aware that people in bigger cities have opportunities to work in venues other than private homes.

[12] Dr Van Daalen, who is an industrial psychologist, testified that on the basis of an interview which he had with S and after consideration of the various medical reports, he was of the opinion that S’s intellectual reasoning ability is below the average range of functioning. Because there is no evidence of any significant scholastic achievements within the family and no role models who could inspire S, he was of the view that she would probably not be able to progress up to the level of grade 12.

[13] With a grade 10 to 11 level of education she would have entered the open labour market at around Peromnes level 18 to 17, in the formal economy and her career within the formal economy would have plateaued at about Peromnes level 14 to 13, assuming she would have taken about 5 years to move between levels. The levels of remuneration in the informal or non-corporate sector would be between 50 to 60 percent of those in the corporate sector.

[14] He had considered Mr Loot’s report and has noted that all these scenarios presupposes her working in the non-corporate sector. Although in his view there are chances that she may have landed in the corporate sector, it is in his view more likely that she would have ended up in the informal sector. In this regard he agrees with Mr Loots’s conclusions which he regarded as "conservative but realistic". In his view however, given the fact that unemployment levels in the Eastern Cape are as high as 23% and the fact that S’s grandmother had a sister who lives in Cape Town, it was quite likely that she might have migrated to Cape Town where it was more likely that she would have ended up in the corporate sector. In his view a contingency provision should be made in this regard. In his opinion, having regard to the type of injury and disability which S had sustained and the possibility of amputation as suggested in Dr Olivier’s report, it is unlikely that S would be employed in the corporate sector, as employers would be concerned about possible risk of injury, even if she were to be employed in a sedentary or semi-sedentary position. Even in these positions she would probably still be required to move around.

[15] Mr Louw, who appeared on behalf of the plaintiff, conceded that on the basis of the available evidence, S would probably not have matriculated or realized her dream of becoming a teacher. She would therefore have been limited to some type of manual labour. He submitted that the nature of her injuries would preclude her from ever acquiring any type of employment in the future.

[16] He submitted further that it would be unfair to take Mr Loots’s calculations only on the basis of the lowest scenario and apply contingency reductions thereto. He submitted that the court should take the average of the five scenarios, because it is likely that she would have progressed from the lowest to the highest level over the period of her career. He conceded also that the usual allowance for general contingencies in respect of young children is 25%, but submitted that the court should make allowance for the possibility that she could have migrated to Cape Town where it is likely that she would have been employed in the corporate sector. It would therefore, in his submission, be unfair to apply a contingency on the assumption that she would have remained in Bedford and therefore have been limited to employment in the non-corporate sector for the rest of her life. In his submission the possibility of corporate employment should reduce the usual 25% contingency to 20%. On the basis of this calculation he submitted that an amount of R700 000. 00 would be fair under the circumstances.

[17] Mr Schuring, who appeared on behalf of the defendant, submitted that the court should take Loots’ scenario 1 (which is the lowest level) and apply the usual 25% contingency to that. He submitted however that a further contingency of 5 to 10% should be applied, because in all likelihood S would not always have been employed on a full time basis. He submitted that S’s chances of employment, despite her injuries, would be boosted by implementation of the affirmative action policy which encourages the employment of disabled persons. The fact that she is a black female would, in his submission, also count in her favour. In this regard he submitted that a further 10% contingency should be allowed.

[18] When deciding on a contingency adjustment in respect of damages to be awarded the court is exercising a discretion which will depend on the particular facts of each case. See in this regard Van der Plaats v S A Mutual and Fire and General Insurance Co Ltd 1980 (3) SA 105 at 114G-115D where Van Winsen JA said the following:

“Dit moet egter nie uit die oog verloor word nie dat die besluit of voorsiening gemaak moet word vir die aftrek van die toegekende skadevergoedingsbedrag van 'n sekere persentasie tov gebeurlikheidsfaktore binne die diskresionêre mag van die Verhoorregter val en daar word op appèl met die uitoefening van sodanige diskresie slegs ingemeng waar die uitoefening daarvan nie behoorlik geskied het nie. Dit is vanselfsprekend dat die korting onder hierdie hoof nie vir akkurate beraming vatbaar is nie. Die Verhoorregter het op 'n korting van 10 persent besluit en by die berekening daarvan die volgende gebeurlikhede inaggeneem:

"Verlies weens siekte of weens beserings wat verdienvermoë kan affekteer, moontlikhede van werkloosheid, van vroeë aftrede of van verandering van werkgewer wat bestaande pensioenregte nadelig mag tref."

Bostaande is almal faktore wat by die bepaling van die persentasie aftrekking tereg inaggeneem kan word. Word na die gewysdes gekyk blyk dit dat die persentasiebedrae deur die Howe toegelaat baie uiteenlopend is. In die saak van Van Rensburg v President Vesekeringsmaatskappy (WLD 21.11.68) soos aangehaal in Corbett and Buchanan The Quantum of Damages band II 62 te 65 het LUDORF R te kenne gegee dat in die Transvaalse Afdeling van die Hooggeregshof 'n gebruik bestaan om 'n korting van 20 persent tov gebeurlikhede toe te laat. 'n Soortgelyke A korting is in die saak van De Jongh v Gunther and Another 1975 (4) SA 78 (W) 1975 (4) SA 78 (W) te 81C - D gedoen. So ook in die geval van die saak Van Rij NO v Employers' Liability Assurance Ltd 1964 (4) SA 737 (W) 1964 (4) SA 737 (W) aangehaal in Corbett and Buchanan The Quantum of Damages band I te 618. In die saak van Sigournay v Gillbanks 1960 (2) SA 552 (A) 1960 (2) SA 552 (A) is 16 persent afgetrek en in Goodall v President Insurance Co 1978 (1) SA 389 (W) 1978 (1) SA 389 (W) slegs 10 persent. B Weens die besondere omstandighede van die geval (die beseerde het nog voor sy besering groot moeilikheid ondervind om 'n betrekking te bekom) is die korting in die saak AA Mutual Insurance Association Ltd v Maqula 1978 (1) SA 805 (A) 1978 (1) SA 805 (A) te 813 A - C op 50 persent gestel.

Hierdie voorbeelde dien slegs om te beklemtoon dat die bedrag wat by wyse van 'n korting toegelaat word wisselend is en ten nouste saamhang met die omstandighede van die bepaalde saak waarin die Verhoorregter sy diskresie moet uitoefen. Ek kan geen fout vind met die uitoefening van sy diskresie deur die Regter van eerste instansie nie en die korting van 10 persent moet dus bly staan."

It should also be borne in mind that an adjustment for contingencies need not necessarily involve a reduction of the amount of damages. See in this regard Ngubane v South African Transport Services [1990] ZASCA 148; 1991 (1) SA 756, at page 781F-G. When deciding on appropriate contingencies to be applied in a particular matter one should bear in mind also that the "fortunes of life" should not always be assumed to be negative. See in this regard Southern Insurance Association v Bailey NO 1984 (1) 98 AD at page 117B-D where Nicholas JA quoted the following dictum from the Australian case of Bresatz v Przibilla (1962) ALJR 212 (HCA) at 213:

"It is a mistake to suppose that it necessarily involves a 'scaling down'. What it involves depends, not on arithmetic, but on considering what the future may have held for the particular individual concerned... (The) generalisation that there must be a 'scaling down' for contingencies seems mistaken. All 'contingencies' are not adverse: All 'vicissitudes' are not harmful. A particular plaintiff might have had prospects or chances of advancement and increasingly remunerative employment. Why count the possible buffets and ignore the rewards of fortune? Each case depends upon its own facts. In some it may seem that the chance of good fortune might have balanced or even outweighed the risk of bad."

[19] I agree with Mr Louw’s submission that there is no basis for the assumption that S would have remained at the entry level (which is scenario 1 of Mr Loots’s calculations) and that the reduction of 25% in respect of general contingencies should be applied to that amount. It appears far more reasonable under the circumstances to assume that she would have progressed from the one level to the other throughout her career and that it is therefore only fair that the average of the five scenarios postulated by Mr Loots be used as a basis for the calculation of future loss of earnings. It should be borne in mind that these scenarios already exclude the possibility of employment in the corporate sector. According to Dr van Daalen, this already accounts for a 50 to 60% reduction. In my view it would be unfair to further limit the basis for the calculations to the very lowest of Mr Loots' scenarios. There is in the event in my view no legal or factual basis for such an approach.

[20] Although I agree with Mr Louw that allowance should be made for the possibility that S might at some stage in her life have migrated to Cape Town where she would in all probability have entered the formal or corporate sector, I am of the view that other contingent considerations would cancel out this "benefit". Mr Schuring submitted that allowance should be made for the possibility of employment resulting from the implementation of affirmative action policies in respect of disabled persons as well as for the possibility of occasional part time employment. It is indeed not far-fetched that even with S’s disability, and even assuming the amputation suggested by Dr Olivier, S may well find employment in the corporate sector, albeit at a very low level. It is well known that there are considerable benefits for companies who employ disabled persons, in particular black females. This possibility in my view cancels out the contingent allowance in respect of employment in the corporate sector as postulated by Mr Louw.

[21] Under these circumstances I am of the view that it would be unfair to make provision for contingencies in addition to the 25% allowed for general contingencies.

[22] On the basis of these principles therefore, it is in my view fair to all concerned to calculate S's future earnings by taking the average of the scenarios postulated by Mr Loots and to reduce that by 25%.

[23] In the result I make the following order:

1. The defendant is ordered to pay to the plaintiff, in his capacity as curator bonis, the sum of R350 000. 00 in respect of general damages;

2. The defendant shall issue the necessary statutory undertaking in terms of Act 56 of 1996 in order to indemnify the plaintiff in respect of all costs for future medical treatment in respect of the minor child, S Makinana;

3. The defendant is ordered to pay to the plaintiff, in his capacity as curator bonis, an amount of R614 170. 00 in respect of future loss of earnings;

4. The defendant is ordered to pay the plaintiff’s taxed party and party costs of suit;

5. Eunice Makinana and S M are declared necessary witnesses;

5. The costs of suit shall include the qualifying expenses of plaintiff’s expert witnesses in respect of whom reports have been filed;

5. Interest on the above-mentioned damages at the legal rate from 14 days from the date of award to the date of payment;

5. Interest on plaintiff's taxed costs of suit at the legal rate from the date of allacatur to the date of payment.

_______________________

J. E. SMITH

JUDGE OF THE HIGH COURT

Appearances

Counsel for the Plaintiff : Advocate Louw

Attorney for the Plaintiff : Wheeldon Rushmere & Cole

119 High Street

GRAHAMSTOWN

Ref: Mr. Brody/GLYN/S09945

Counsel for the Defendant : Advocate Schuring

Attorney for the Defendant : Borman & Botha

22 Hill Street

GRAHAMSTOWN

Ref: Ms. CARINUS/Cornelia

Date Heard : 28 October 2010

Date Delivered : 04 November 2010

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