Member of the Executive Council Responsible for the Department of Roads and Public Works North West Province and Another v Oosthuizen (A671/07) [2009] ZAGPPHC 16 (2 April 2009)
The appeal succeeded because the trial court's assessment of the deceased's probable earnings was not supported by reliable evidence. The respondent failed to discharge the onus of proving actual patrimonial loss, relying on speculative comparisons and unsubstantiated claims regarding cash income and outstanding...
Source-derived case information.
- Citation
- [2009] ZAGPPHC 16
- Parties
- Appellant: Member of the Executive Council Responsible for the Department of Roads and Public Works, North West Province; Appellant: Public Transport, Roads and Works, Gauteng; Respondent: Lize Marie Oosthuizen
- Court
- North Gauteng High Court, Pretoria
- Jurisdiction
- South Africa
- Case Number
- A671/07
- Procedural Posture
- Civil Appeal / Appeal From High Court Judgment Awarding Damages for Loss of Support
- Outcome
- Appeal upheld. The trial court's award is set aside and substituted with a recalculated award based on the deceased's actual earnings.
- Judges
- B.R. Southwood, N.M. Mavundla, P.M. Mabuse
- Legal Topics
- Loss of Support, Quantification of Damages, Actuarial Evidence, Remarriage Contingency, Condonation of Late Filing, Civil Appeal Procedure
Source-derived case record
Summary, issues, holding and outcome
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Parties
Member of the Executive Council Responsible for the Department of Roads and Public Works, North West Province
Appellant
Public Transport, Roads and Works, Gauteng
Appellant
Lize Marie Oosthuizen
Respondent
Procedural Posture
Civil Appeal / Appeal From High Court Judgment Awarding Damages for Loss of Support
Legal Issues
- 1 Whether the trial court erred in its assessment of the deceased's probable earnings for purposes of calculating loss of support.
- 2 Whether the respondent discharged the onus of proving actual patrimonial loss resulting from the death of the breadwinner.
- 3 Whether the trial court correctly applied actuarial and comparative evidence in quantifying damages.
Ratio Decidendi
The appeal succeeded because the trial court's assessment of the deceased's probable earnings was not supported by reliable evidence. The respondent failed to discharge the onus of proving actual patrimonial loss, relying on speculative comparisons and unsubstantiated claims regarding cash income and outstanding debtors. The objective financial evidence, including bank records, tax returns, and the deceased's financial position, indicated he was not earning the amounts claimed. The actuarial calculation should have been based on the deceased's actual records, with appropriate contingencies for future increases and remarriage. The court found that the respondent's expert evidence was...
Court Disposition
Appeal upheld. The trial court's award is set aside and substituted with a recalculated award based on the deceased's actual earnings.
Orders
- The respondent's application in terms of Rule 30(1) is dismissed with costs, including costs of two counsel and costs of the postponement on 14 April 2008.
- The appellants' failures to apply timeously for a hearing date and to deliver the appeal record are condoned.
Full Case Text
Judgment text and source record
249 paragraphs
IN THE HIGH COURT OF SOUTH AFRICA
(IN THE NORTH AND SOUTH GAUTENG HIGH COURT, PRETORIA)
NOT REPORTABLE Date: 2009-04-02
Appeal Case Number: A671/07
TPD Case No: 33736/2003
In the matter between:
THE MEMBER OF THE EXECUTIVE COUNCIL
RESPONSIBLE FOR THE DEPARTMENT OF
ROADS AND PUBLIC WORKS, NORTH WEST
PROVINCE
First Appellant
PUBLIC TRANSPORT, ROADS AND WORKS,
GAUTENG
Second Appellant
and
LIZE MARIE OOSTHUIZEN Respondent
JUDGMENT
SOUTHWOOD J
[1] The appellants appeal against the award of damages (in the sum of R2 198 514,00) to the respondent in her personal capacity and in her capacity as mother and natural guardian of C H Oosthuizen (‘C’) for loss of support arising out of the death of the respondent’s husband, Pieter Wilfred Oosthuizen (‘the deceased’), in a collision on the Old Brits Road on the night of 12/13 March 2003. The agreed amount of R9 111,63 for funeral expenses is not a subject of this appeal and has already been paid to the respondent.
Interlocutory applications
[2] Before dealing with the merits of the appeal it is necessary to deal with –
(1) the appellants’ application for condonation for their failure to apply for a date for the hearing of the appeals and their failure to file the appeal record timeously and for reinstatement of the appeal;
(2) the respondent’s application in terms of Rule 30 to set aside, as irregular steps, the appellants’ application dated 16 August 2007 for the allocation of a date for the hearing of the appeal and the appellants’ application dated 20 August 2007 for condonation of the appellants’ failure to apply for a date for the hearing of the appeal and to file the appeal record timeously and for the appeal to be reinstated; and
(3) the reserved costs of 14 April 2008 in the respondent’s application in terms of Rule 30.
[3] The facts relevant to these matters are as follows:
(1) On 21 August 2006 the court a quo (Patel J) gave judgment in favour of the respondent and awarded her the aforementioned damages.
(2) On 7 December 2006 the appellants unsuccessfully applied to the court a quo for leave to appeal.
(3) On 2 April 2007 the Supreme Court of Appeal granted the appellants leave to appeal to this court against the award of damages by the court a quo.
(4) On 2 May 2007 the appellants delivered their notice of appeal. (In terms of Rule 49(6) and (7) the appellants were required to apply in writing to the Registrar for a date for the hearing of the appeal and to deliver three copies of the appeal record to the Registrar and two copies of the appeal record to the respondent within 60 days after delivery of the notice of appeal. In terms of Rule 49(6) if no application for the date for the hearing of the appeal is submitted the appeal is deemed to have lapsed. In terms of Rule 49(7) if the copies of the record are not available when the appellant applies for a date of hearing the appellant may deliver the application together with an affidavit in which the reasons for the omission to deliver copies of the record timeously are set out and in which is indicated that an application for condonation of the omission will be made at the hearing of the appeal.)
(5) The 60 days contemplated by Rule 49(6) expired on 26 July 2007.
(6) (a) The appellants’ attorney, Mr S.M. Dawood of the State Attorney, experienced difficulty in preparing the appeal record. Some of the original documents were missing and Mr Dawood was obliged to reconstruct the record using copies. Mr Dawood had to obtain a copy of the appellants’ expert’s (Mr Tonge of PriceWaterhouse- Coopers) supplementary report and a copy of the pre- trial minute from the respondent’s attorney, Adams & Adams.
(b) On 24 May 2007 Mr Dawood addressed a letter to Mr Tonge to request a copy of the report and on the same day Mr Tonge furnished a copy. On 24 May 2007 Mr Dawood addressed another letter to the respondent’s attorney, Ms Koch of Adams & Adams, to request a copy of the pre-trial minute. Ms Koch did not respond immediately and Mr Dawood addressed letters to her on 18 June 2007 and 25 June 2007 requesting the copy of the pre-trial minute. Eventually, on 25 June 2007, Ms Koch furnished Mr Dawood with a copy of the pre-trial minute.
(c) On 4 July 2007 Mr Dawood addressed a letter to LOM Business Solutions (‘LOM’) with an instruction to prepare the appeal record. Mr Dawood told LOM that the matter was extremely urgent as the record had to be filed by 19 July 2007. Mr Dawood stipulated an earlier date as he wished to have time to rectify any defects in the record. On 24 July 2007 LOM informed Mr Dawood that they would need another 6 weeks to prepare the record.
(d) On 31 July 2007 Mr Dawood addressed a letter to Ms Koch to request an extension of time for the filing of the appeal record until 14 September 2007. Ms Koch did not reply immediately.
(7) Mr Dawood was so involved in the preparation of the appeal record that he forgot to apply for a date for the hearing of the appeal. Mr Dawood’s undisputed evidence is that he ‘was consumed with ensuring the preparation of the record as a first priority and (his) omission to apply for a date for the hearing of the appeal was unintentional and bona fide and not with the intention of delaying the finalisation of this matter.’
(8) In the meantime, the attorneys had been communicating with each other about a possible settlement of the appeal. On 17 May 2007, in response to the appellants’ notice of appeal, Ms Koch addressed a letter to the appellants’ attorney asking for a settlement proposal to avoid an appeal. On 19 July 2007 Mr Dawood addressed a letter to Ms Koch in which he invited the respondent to suggest a basis for settlement. On 14 August 2007 Ms Koch replied to this letter and pointed out that because the appellants had not complied with Rule 49(6) the appeal had lapsed, that the respondent would not condone the late filing of the appeal record and that the respondent demanded payment of the judgment debt of R2 207 627,63 and taxed costs of R603 623,27 within 14 days failing which the respondent would take steps to enforce the judgment.
(9) On 16 August 2007 (i.e. 14 days after the appeal lapsed) the appellants’ attorney delivered a formal notice of application
for the allocation of a date for the hearing of the appeal accompanied by an affidavit deposed to by Mr Dawood in compliance
with Rule 49(7)(a)(ii). In the affidavit Mr Dawood set out the difficulties he had experienced in preparing the record –
already outlined – and notified the Registrar that an application for condonation of the appellants’ failure to apply for a date for the hearing of the appeal and file the appeal record timeously and for reinstatement of the appeal would be made at the hearing of the appeal.
(10) On 20 August 2007 (i.e. 18 days after the appeal lapsed) the appellants’ launched an application in which they sought –
(i) an order that the appellants’ failure to apply for a date for the hearing of the appeal and to file the record of the appeal timeously be condoned; and
(ii) an order that the appeal be reinstated.
In support of this application Mr Dawood deposed to an affidavit in which he set out the difficulties he had experienced in preparing the appeal record and the reason why he did not apply for a date for the hearing of the appeal.
(11) On 4 September 2007 (i.e. 26 days late) the appellants delivered and filed copies of the appeal record.
(12) The respondent did not oppose the appellants’ application for condonation and for reinstatement of the appeal. Instead, on 30 August 2007, the respondent delivered a notice in terms of Rule 30(2)(b) in which the respondent gave notice to the appellants that the appellants’ application for condonation and reinstatement dated 20 August 2007 constitutes an irregular step – (i) because the notice of motion should have been in accordance with form 2(a) and (ii) because the notice of motion gives notice that the application will be brought at the hearing of the appeal whereas the application for reinstatement of the appeal must be decided in a separate application in the motion court heard before the date of the appeal.
(13) The appellants did not remove the alleged cause of complaint and on 3 October 2007 the respondent launched an application in which she sought, inter alia, an order setting aside, as irregular steps, in terms of Rule 30(1) –
(i) the appellants’ application dated 16 August 2007 for the allocation of a date for the hearing of the appeal;
(ii) the appellants’ application dated 20 August 2007 for con- donation and reinstatement of the appeal.
(14) On 24 October 2007 the appellants gave notice of their intention to oppose the respondent’s application in terms of Rule 30(1) and on 14 November 2007 delivered their answering affidavit and counter application. In the answering affidavit Mr Dawood states that the appellants had filed the appeal record on 4 September 2007, that the reasons for launching the application were spurious and puerile and that the respondent appeared to be attempting to prevent the appellants from being heard when they had a compelling case. Mr Dawood requested the court to dismiss the application and to order the respondent’s attorney to pay the costs de bonis propriis on an attorney and own client scale and to grant the relief sought in the counter application: i.e. the relief sought in the appellants’ applications dated 20 August 2008. The respondent filed a replying affidavit and enrolled the application for hearing in the opposed motion court on 14 April 2008.
(15) On 14 April 2008 the respondents applied for the postponement of the hearing of the application to the date on which the appeal is heard together with the appellants’ application for condonation. On 14 April 2008 the court ordered that all the applications be postponed sine die and that all costs (including the costs of the application for postponement) be reserved for determination by the court hearing the appeal.
[4] In their heads of argument the respondent’s counsel have not dealt with the respondent’s application in terms of Rule 30(1), the postponement of the applications on 14 April 2008 or the costs of the applications and the costs order made on 14 April 2008. Instead the respondent’s counsel have dealt only with the question of whether condonation should be granted. They state, wrongly, that the respondent has at all times opposed the granting of condonation and they make certain ‘observations’. They submit that the appellants failed to set out clearly what caused the delay and that the appellants’ attorney lied to LOM so that the record could be completed in time. They ask that condonation be refused.
[5] In the absence of a notice of intention to oppose and an answering affidavit the respondent is not entitled to oppose the appellants’
application for condonation and reinstatement. The respondent sought only the setting aside of the application. The failure to deal with the application in the heads of argument indicates that the respondent no longer seeks that relief. In oral argument Mr Neser SC, on behalf of the respondent, stated that the respondent had abandoned the application. He conceded that the abandonment of an application will usually result in a costs order against the applicant. He did not argue that the court should not make such a costs order. In any event the application was clearly without merit and should be dismissed with costs. It was not an irregular step to use the short form for the application and it is well-established that where the prospects of success in the appeal will have to be considered the application for condonation and reinstatement should be brought at the hearing of the appeal – Meyer v Dowson & Dobson Ltd 1967 (4) SA 628 (T) at 628F-G; De Sousa v Cappy’s Stall 1975 (4) SA 959 (T) at 960G-961F; Lipshitz NO v Saambou-Nasionale Bouvereniging 1979 (1) SA 527 (T) at 529C-E. In my view the respondent’s application in terms of Rule 30(1) was ill-founded, ill-advised and did not comply with the rule. The respondent obviously thought she could prevent the appeal from being heard by relying on the perceived technical deficiencies in the appellants’ case. Copious affidavits have been filed at considerable expense. All this could have been avoided by the respondent simply agreeing to the extension of time sought and not opposing the appellants’ application for reinstatement.
[6] The respondent’s application in terms of Rule 30(1) will therefore be dismissed with costs including the costs of two counsel. The costs will also include the costs of 14 April 2008 (including the costs of two counsel). The appellants’ application for condonation of the appellants’ failure to apply for a date for the hearing and file the appeal record timeously and for
reinstatement of the appeal will be granted.
The merits: the basis of the respondent’s claim
[7] A claim for damages for loss of support is based on the legal duty to provide such support owed by the deceased during his/her lifetime to the plaintiff – Union Government v Warneke 1911 AD 657 at 666: Oosthuizen v Stanley 1938 AD 322 at 327. Normally a wife will have no difficulty in establishing that she has a right to support but she will not do so where she was earning more than her husband – Gildenhuys v Transvaal Hindu Educational Council 1938 WLD 260 at 262-3. It is clear that the plaintiff must prove actual loss.
(1) In Legal Insurance Company Ltd v Botes 1963 (1) SA 608 (A) at 614F-G the court said:
‘The remedy relates to material loss “caused to the dependants of the deceased man at his death”. It aims at placing them in as good a position, as regards maintenance, as they would have been in if the deceased had not been killed. To this end material losses as well as benefits and prospects must be considered. The remedy has been described as anomalous, peculiar and sui generis – but it is effective.’
(2) In Evins v Shield Insurance Co Ltd 1980 (2) SA 814 (A) at 838A-B the court said:
‘Only a dependant to whom the deceased was under a legal duty to provide maintenance and support may sue and in such action the dependant must establish actual patrimonial loss, accrued and prospective, as a consequence of the death of the breadwinner’.
At 839B-C the court said:
‘… in the case of an action for damages for loss of support, the basic ingredients of the plaintiff’s cause of action would be (a) a wrongful act by the defendant causing the death of the deceased, (b) concomitant culpa (or dolus) on the part of the defendant, (c) a legal right to be supported by the deceased, vested in the plaintiff prior to the death of the deceased and (d) damnum, in the sense of a real deprivation of anticipated support. (Emphasis added)
(3) In Santam Insurance Co Ltd v Fourie [1996] ZASCA 122; 1997 (1) SA 611 (A) at 614F-G the court said:
‘However, before coming to the computation of loss, one must first ascertain whether any loss at all has in fact been suffered. In Evins v Shield Insurance Co Ltd 1980 (2) SA 814 (A) at 838A Corbett JA described as “trite” the following principle relating to a claim for damages by a dependant:
“… (T)he dependant must establish actual patrimonial loss, accrued and prospective, as a consequence of the loss of the breadwinner”’
The court pointed out that the question of whether the dependant has established such loss is a ‘pure question of fact’ (615D-E) and dismissed the dependant’s claim for loss of support where the deceased contributed less to the common household than she received and the family was, financially speaking, better off after her death (615J-616B).
[8] The principal issue before the court a quo and before this court is the deceased’s earnings at the time of his death and his probable earnings during the time he would have supported the plaintiff and C. The respondent sought to prove the deceased’s earnings on an actuarial basis, starting with his probable earnings in 2005: i.e. two years after his death. According to the respondent, the records of the deceased, who had practised as an advocate for 6 years prior to his death, were deficient and did not give an accurate picture of the deceased’s
earnings during the 3 years immediately preceding his death. The court a quo therefore first had to make a finding as to the deceased’s probable earnings in 2005 and this was used as the starting point for the actuarial calculation of the deceased’s earnings during the rest of the relevant period.
[9] The difficulties inherent in the actuarial calculation of future earnings were spelled out by the court in Southern Insurance Association v Bailey NO 1984 (1) SA 98 (A) where the court was concerned with a claim for loss of earning capacity of a two year old child. At 113G-H the court said:
‘Any enquiry into damages for loss of earning capacity is of its nature speculative because it involves a prediction as to the future, without the benefit of crystal balls, soothsayers, augurs or oracles. All that the court can do is to make an estimate, which is often a very rough estimate, of the present value of the loss.
It has open to it two possible approaches.
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 guesswork, a blind plunge into the unknown.
The other is to try to make an assessment, by way of mathematical calculations, on the basis of 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 but the Court cannot for this reason adopt a non possumus attitude and make no award.
…
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 “informed guess”, it has the advantage of an attempt to ascertain the value of what was lost on a logical basis; whereas the trial judge’s “gut feeling” (to use the word of appellant’s counsel) as to what is fair and reasonable is nothing more than a blind guess. (Cf Goldie v City Council of Johannesburg 1948 (2) SA 913 (W) at 920.)’
It must be emphasised that in the present case the court a quo was not dealing with a young child’s loss of earning capacity which is clearly ‘speculative in the extreme’ (Bailey’s case at 114E). It was dealing with the earning capacity of an advocate who had been practising for some six years and had records of his income and expenses, financial statements and income tax returns.
Repondent’s case on the pleadings
[10] (1) The respondent’s case on the pleadings was clearly that the deceased was making a good living at the Bar and consequently
that she would suffer a substantial loss of support.
(2) In her initial particulars of claim dated 21 November 2003 the respondent, in her personal capacity, claimed damages in the sum of R1 430 000 and in her capacity as mother and natural guardian of C, R2 267 000. According to the particulars these claims were calculated on the basis that the deceased earned a net income of approximately R340 000 per year and the plaintiff a net income of approximately R100 000 per year and that the common division of the deceased’s income in matters of this nature is two fractions for the deceased, two fractions for the plaintiff and one fraction for the child. It was postulated that a second child would have been born to the family during or about 2006/7.
(3) In her amended particulars of claim dated 19 April 2005 (i.e. after the respondent received the report of her expert Mr Jacot-Guillarmod) the respondent, in her personal capacity, claimed damages in the sum of R3 638 371 and, in her capacity as mother and natural guardian of C, R2 284 350, as set out in the actuary’s report, annexure A to the particulars of claim. According to the actuary’s report he was to use a base net income for the deceased for the 2005 tax year of R515 000 (the figure arrived at by Mr Jacot-Guillarmod) and a gross income for the respondent of R242 403. He was also to assume that there was a 50 % chance of an additional child born on 1 January 2007. There is no reference to the respondent’s loss of support being claimed on any other basis.
Respondent’s claim on the evidence
[11] Persisting in the contention that the deceased would have earned a net income of R515 000 in the 2005 tax year the respondent sought to establish this in three ways:
(1) By proving that on the deceased’s own figures, suitably adjusted to provide for certain contingencies (i.e. unbilled fees; cash receipts and defective records), the deceased would have earned R515 000 net in the 2005 tax year;
(2) By proving that the deceased’s practice was comparable to that of Adv. Naudé de Wet who earned R515 000 net in the 2005 tax year;
(3) By proving that If the deceased left the Bar and became a legal services manager his net earnings would have been R500 000 in the 2005 tax year.
[12] To prove the deceased’s net income in 2003 and 2005 the respondent testified and tendered the evidence of two advocates and former colleagues of the deceased, Adv. Naudé and Adv. De Wet, the evidence of the deceased’s secretary, Susanna Swart, and the evidence of a Chartered Accountant Mr Jacot-Guillarmod and an Industrial and Consulting Psychologist, Ms Barbara Donaldson. The respondent delivered a summary in terms of Rule 36(9)(b) dated 14 April 2005 and an addendum thereto dated 19 April 2006 in respect of Mr Jacot-Guillarmod’s evidence. To counter this evidence the appellants tendered the evidence of Mr C. Tonge a Chartered Accountant who is a partner in the Forensic Services Department of PriceWaterhouseCoopers and Pieter Jan Hendrik Harmse, an Industrial Psychologist. The appellants made available to the court a quo Mr Tonge’s entire report (with appendices). Both Mr Jacot-Guillarmod and Mr Tonge testified as expert witnesses.
[13] In Coopers (South Africa) (Pty) Ltd v Deutsche Gesellschaft Fϋr Schädlingsbekämpfung MBH 1976 (3) SA 352 (A) the court summarised the purpose of expert evidence as follows:
‘There are, however, cases where the court is, by reason of a lack of special knowledge and skill, not sufficiently informed to enable it to undertake the task of drawing properly reasoned inferences from the facts established by the evidence. In such cases, subject to the observations in the Gentiruco case, loc cit, the evidence of expert witnesses may be received because, by reason of their special knowledge and skill, they are better qualified to draw inferences than the trier of fact. There are some subjects upon which the court is usually quite incapable of forming an opinion unassisted, and others upon which it could come to some kind of independent conclusion, but the help of an expert witness would be useful (see, Hoffman, SA Law of Evidence, 2nd ed, p78). For an example of evidence held to be admissible because it “would be of great assistance to the court” in drawing the inference it was required to draw, see R v Vilbro and Another, 1957 (3) SA 223 (AD) at p228G-H. If a party intends calling a witness to give expert evidence of the kind described above, he is required to furnish the other party with “a summary” of such witness’ opinions and his reasons therefor’ (370F-H).
and:
‘… an expert’s opinion represents his reasoned conclusion based on certain facts or data, which are either common cause, or established by his own evidence or that of some other competent witness. Except possibly where it is not contraverted, an expert’s bald statement of his opinion is not of any real assistance. Proper evaluation of the opinion can only be undertaken if the process of reasoning which led to the conclusion, including the premises from which the reasoning proceeds are detailed by the expert’ (371G-H).
[14] According to Mr Jacot-Guillarmod’s summary he was requested to determine –
(a) what the income of the deceased’s husband may reasonably have been expected to be had it not been for his untimely death on 13 March 2003 caused by a motor accident; and
(b) what the income of the plaintiff is that should be taken into account when calculating her claim for loss of support.
On the face of it both matters are factual. However Mr Jacot-Guillarmod did not determine the deceased’s earnings at the date of his death. The summary records Mr Jacot-Guillarmod’s conclusion that the deceased’s annual base income for the 2005 tax year would have been R515 000 and the respondent’s annual base income for the same year would have been R242 403,00. (The respondent’s income is not controversial and need not be considered further.) However, in order to arrive at the figure of R515 000 for the 2005 tax year, Mr Jacot-Guillarmod ignored the deceased’s own net earnings as they appear from the deceased’s financial statements – because, he said, they are not reliable – and accepted that the deceased’s earnings in the 2004 and 2005 years would exceed those of a colleague Adv. Naudé de Wet. Mr Jacot-Guillarmod then calculated the deceased’s net earnings for the 2005 tax year by deducting the deceased’s practice expenses (which are lower than those of Adv. De Wet) from the gross income of Adv. De Wet. It is striking that apart from vague references to ‘certain’ documents Mr Jacot-Guillarmod’s summary of expert evidence contains no facts or data which are agreed or established by any evidence. In order to arrive at the conclusion that the deceased earned as much as Adv. De Wet Mr Jacot-Guillarmod accepted the following statements made by Adv. De Wet (who had been in practice for 9 months when the deceased died) –
(1) the deceased was a very busy advocate specialising in family law and doing many urgent applications;
(2) the deceased would have been paid in cash for many of the urgent applications;
(3) he, Adv. De Wet, was of the opinion that the deceased received substantial amounts in cash from attorney for services rendered and the typist of the deceased had confirmed this to him;
(4) he, Adv. De Wet, was in his third year of practice at the Bar and from his personal knowledge of the busy practice that the deceased had and taking into account the seniority of the deceased in comparison to himself, he estimates that the deceased would have had a greater income than his;
(5) his, i.e. Adv. De Wet’s, fees for the 2005 (i.e. his second complete year of practice) tax year amounted to R683 951,50.
[15] According to the addendum to Mr Jacot-Guillarmod’s summary dated 19 April 2006 he had examined a number of documents relating to Adv. De Wet’s income and the report of another expert, Ms Barbara Donaldson. Mr Jacot-Guillarmod was now of the view that the deceased’s gross income for the 2006 tax year would be R740 000, his expenses would be R176 000 and his net income would be R564 000. Once again Mr Jacot-Guillarmod used Adv. De Wet’s income and the deceased’s expenses, adapted from the 2003 tax year, to calculate his net income.
[16] The court a quo regarded the respondent’s evidence as compelling and found that the deceased had built up a substantial practice (where he appeared three to four times a week in opposed applications at a day fee of R4 500 to R5 000); that he stood on the threshold of an ‘enhanced career prospect’ when he died and that he would have become more involved in Constitutional Family Law disputes; that his practice records and income tax information did not reflect the deceased’s earnings; that the deceased’s earnings could be compared to those of Adv. Naudé de Wet who had a comparable practice and who earned a net income of R515 000 in 2005 and that even if the deceased left the Bar and became a legal services manager he would earn R500 000 net in 2005.
[17] The respondent contends that this court cannot interfere with the factual findings of the court a quo relating to the deceased’s practice and his income therefrom because the evidence was not challenged and the court accepted it, finding it to be cogent. While it is true that a court of appeal usually will not interfere with a finding of fact made by the trial court it will interfere where there is a misdirection on fact by the trial judge, where the reasons are on their face unsatisfactory or where the record shows them to be such; there may be such a misdirection also, where, though the reasons as far as they go are satisfactory, the trial judge is shown to have overlooked other factual probabilities. The appellate court is then at large to disregard the trial judge’s findings of fact, even though based on credibility, in whole or in part according to the nature of the misdirection and the circumstances of the particular case, and so come to its own conclusion on the matter – R v Dhlumayo and Another 1948 (2) SA 677 (A) at 705-706. The approach that a court of appeal will not lightly interfere with a factual finding of the trial court, even one
involving an inference from established facts, is a guideline and not a rule of law – R v Dhlumayo supra at 695. Where a court of appeal is convinced that the trial court has made a wrong finding of fact the court of appeal will rectify the finding – President of the Republic of South Africa and Others v South African Rugby Football Union and Others 2001 (1) SA 1 (CC) paras 78-81; S v Mkohle 1990 (1) SACR 95 (A) at 100e-f; S v Mafaladiso en Andere 2003 (1) SACR 583 (SCA) at 595b-d.
[18] It is trite that ordinarily, the party bearing the onus can discharge it only by adducing credible evidence – National Employers’ General Insurance v Jagers 1984 (4) 437 (E) at 440D-E. It must also be borne in mind that simply because the evidence of the respondent and Adv. Naudé and Adv. De Wet was not contradicted, as it obviously could not be, it must be accepted. As pointed out by the court in Shenker Bros v Bester 1952 (3) SA 664 (A) at 670E-G:
‘The evidence of these two witnesses, as was to be expected, has not been contradicted by any evidence led on behalf of the defendants, but this fact does not relieve the plaintiff of the obligation to discharge the onus resting on him (see Siffman v Kriel, 1909 T.S. 538; Katz v Bloomfield & Keith, 1914 T.P.D. 379; Nelson v Marich – A.D. May 1952, not yet reported). In the first of these cases, Innes, C.J. said:
“It does not follow, because evidence is uncontradicted, that therefore it is true … The story told by the person on whom the onus rests may be so improbable as not to discharge it.”
Similarly, the circumstance that evidence is uncontradicted is no justification for shutting one’s eyes to the fact, if it be a fact, that it is too vague and contradictory to serve as proof of the question in issue.’
[19] The court a quo found that there were two possibilities regarding the deceased’s future earnings –
(1) he would have continued to practise at the Bar until the age of 70 and his net earnings in the 2005 tax year would have been R515 000;
(2) if the deceased was compelled to leave the Bar by force of circumstances, with six years of experience as an advocate he would have found employment as a legal services manager and he would have earned around R500 000 per annum.
Nevertheless, the court a quo found that there was compelling evidence that the deceased would have remained at the Bar inter alia because he was beginning to enhance his career in the field of Constitutional Family Law.
[20] The crucial finding is that the deceased would have earned a net income of R515 000 as an advocate in the 2005 tax year or R500 000 as a legal services manager in the private sector. In my view neither finding is supported by the evidence and, in any event, the second finding is irrelevant.
[21] It will be remembered that the theory of the plaintiff’s claim is that the deceased was a competent advocate who had a busy practice. He appeared in opposed applications three or four days per week and he charged either R4 500 or R5 000 for such an appearance. According to the respondent’s witnesses, the fact that the deceased’s records did not reflect these fees was due to three factors: (a) the deceased did not keep a fee book from the end of the 2001 tax year; (b) the deceased was paid with cheques which he did not deposit but cashed; (c) the deceased was paid in cash. According to the respondent’s evidence a further indication that the deceased’s fees were not all recorded is that after his death it was found that a number of attorneys owed him R282 000.
[22] (1) Against that background it is a remarkable feature of this case that the respondent presented virtually no documentary evidence to establish the deceased’s gross income in 2003. There is also no evidence as to who and how the debtors list of R282 000 was compiled.
(2) It was accepted that the deceased did not keep a proper fee book after the 2001 tax year: i.e. during the 2002 and 2003 tax years, and it appears to have been accepted that the deceased’s financial statements and income tax returns for the 2001, 2002 and 2003 tax years were prepared after his death using the deposits in his bank statements to calculate his gross income. Nevertheless it was not disputed that during an inspection on 20 April 2005, Mr Tonge found the deceased’s fee statements to attorneys for the period 1999 to 2003. There is no evidence to suggest that these fee statements were incomplete or did not reflect all fees earned by the deceased. The overwhelming probability is that the fee statements are a reliable record of the deceased’s fees. A practising advocate is required to keep a record of all fees charged and this would be necessary not only for purposes of income tax (and, if registered, for VAT) but would also be vital for the advocate in order to recover fees from his instructing attorneys. These fee statements should have been the starting point for the respondent’s claim. In terms of section 11 of the Income Tax Act 58 of 1962 read with the definitions of ‘gross income’ and ‘income’ in section 1 the first step in the calculation of the taxpayer’s taxable income is the determination of the taxpayer’s gross income. And in determining the taxpayer’s gross income all amounts which accrued to the taxpayer in the year of taxation must be taken into account: i.e. all amounts to which the taxpayer becomes entitled in the year constitute gross income – Lategan v Commissioner for Inland Revenue 1926 CPD 203 (2 SATC 16) at 207-10 (SATC at 18-21); Commissioner for Inland Revenue v Peoples Stores (Pty) Ltd [1990] ZASCA 1; 1990 (2) SA 353 (A) at 367D. Accordingly, using the fees deposited in the deceased’s bank account to calculate the deceased’s gross income is not a proper method of calculating gross income. It is also irrelevant that the deceased did work in the tax year but did not charge a fee. The deceased only became entitled to the fee when he had marked the fee and rendered a statement of account to his attorney.
(3) Using the deceased’s fee statements Mr Tonge prepared a schedule of fees for the period 2002-2003 which reflects the deceased’s gross income as R295 071 in 2002 and R277 830 in 2003. In the absence of any reliable evidence that the deceased did not record the fees he earned while acting for some attorneys who paid him in cash, these figures must be accepted as the correct figures for 2002 and 2003.
(4) The mysterious list of outstanding debtors can also be ignored. There is no evidence as to who compiled the list and how this was done. Even if it is genuine it must have been prepared on the strength of information in the deceased’s fee statements and other records. It was therefore accounted for in the calculation of the gross income for 2002 and 2003. There is no evidence that the list contained fees not found in the existing records.
[23] Before considering the reliability of the respondent’s evidence regarding the deceased’s earnings it is essential that the objective evidence relating to the deceased’s financial position be analysed. The evidence that he had a substantial
practice and received substantial amounts of cash must be considered against the background of this objective evidence. The court a quo did not do so and did not consider how these facts affected the credibility and reliability of the witnesses and the cogency of
their evidence.
Deceased’s financial position – practice income and expenditure
[24] According to the financial statements prepared for the deceased his practice income and expenditure and net earnings for the years that he practised were as follows:
(As already mentioned the income for 2002 and 2003 is not correct)
[25] During the period 1999 to 2003 the deceased had three Absa bank accounts: a student loan account, a personal cheque account and a practice cheque account. During this period these accounts were generally overdrawn. At the time of his death the deceased owed a total of R21 434,24 on these accounts (R2 261,35 on the student loan account: R13 491,64 on the personal cheque account: R5 681,25 on the practice cheque account). At the beginning of 2001 the deceased had a combined overdraft facility of R42 360 which the bank gradually reduced to R26 390.
[26] As from 24 November 1999 a vendor was required to register for Value Added Tax (‘VAT’) when his turnover (i.e. gross fees) in a 12 month period was likely to exceed R300 000 (s 23(1) of the Value Added Tax Act 89 of 1991). A vendor could deregister if his turnover would not exceed that amount (s 24(1) of the Act). On 28 July 1997 (i.e. just after he started practising) the deceased’s accountant, Brino Britz, applied for the deceased to be registered for VAT and SARS duly registered the deceased. During about June 2001 the deceased deregistered for VAT. There is no evidence that he re-registered for VAT before his death. The deregistration for VAT indicates that the deceased satisfied the Commissioner for SARS that his gross income would not exceed R300 000. This is entirely consistent with the information in his financial statements and other evidence which indicates that by his sixth year at the Bar the deceased’s gross income had not exceeded R300 000 in any one year.
[27] According to the evidence of Adv. De Wet and Suzie Swart the deceased was involved mainly in Family Law disputes and urgent applications. Adv. De Wet emphasised that the deceased did a lot of urgent applications. He even went so far as to state that the deceased was known as an advocate who specialises in urgent applications. He was someone that attorneys could rely on to do an urgent application at extremely short notice and he was almost a trouble-shooter for attorneys. Adv. De Wet further testified that these urgent applications generally related to Family Law matters. He testified that the deceased struggled to collect his fees and that he discounted fees owing to him. Adv. Naudé testified that the deceased’s fee structure made him attractive to attorneys to instruct in Family Law matters. All these factors indicate that the deceased did not have a substantial practice.
Deceased’s general financial position
[28] (1) In about November 1997 the deceased and the respondent purchased their residence at Erf 3554, Portion 7, Faerie Glen (‘the property’) with a loan from NBS for R331 836,75. The loan was repayable over 20 years in instalments of R5 438 per month. In early 1998 a mortgage bond was registered over the property and instalments were to commence on 1 March 1998.
(2) By April 1999 the deceased and the respondent were in arrears with their bond instalments in the amount of approximately R48 000 (i.e. about eight instalments) and on 26 April 1999 the NBS, the bondholder, notified the deceased and the respondent that since they had not reacted to previous correspondence requesting payment of the arrear instalments the NBS was calling up the bond and the whole outstanding balance (now R385 868,30) was due and payable. This notice seems to have prompted the deceased and the respondent to make arrangements with the NBS to pay off their indebtedness. On 26 April 1999 they entered into an agreement with the NBS to pay off their indebtedness of R394 051,33 in 39 months in instalments of R14 000 per month commencing on 1 May 1999.
(3) The deceased and the respondent failed to pay these instalments and by 21 June 2000 their indebtedness had grown to R425 892,94. On 21 June 2000 the deceased and the respondent entered into another written agreement in terms of which they undertook to pay the debt of R425 892,94 in 217 months in instalments of R5 470 commencing on 1 July 2000.
(4) The deceased and the respondent failed to pay these instalments and on 24 May 2002 BOE Bank Limited (‘BOE’) (formerly the NBS) instituted action against the deceased and the respondent claiming payment of R430 602,08 being the balance owing in terms of the mortgage bond on the grounds of the failure to pay the instalments due under the bond. BOE also claimed interest and an order declaring the property executable. BOE served the summons on the deceased and the respondent at their domicilium citandi by attaching a copy to the main entrance of their residence. The deceased and the respondent did not enter appearance to defend the action and on 28 January 2003 (8 months later) BOE obtained judgment by default against them for payment of R430 602,08, interest and an order declaring the property executable. On the same date BOE issued a writ of attachment against the property.
(5) The BOE statement of account in respect of the deceased and the respondent for the period 22 September 2002 to 18 January 2003 reflects four debits for interest (each for about R6 000), one cheque payment of R8 000 on 4 November 2002 and a cheque payment of R16 000 on 2 December 2002 which was immediately reversed. On 18 January 2003 the deceased and the respondent were R49 679,01 in arrears.
(6) The deceased and the respondent’s indebtedness to BOE was secured by an insurance policy for R340 000 on the deceased’s life which paid out on the deceased’s death and was utilised to reduce the indebtedness under the mortgage bond.
(7) On the date of his death the deceased was indebted to the City of Tshwane in the sum of about R23 000 in respect of rates and taxes.
At about R900 per month this means that the deceased and the respondent failed to pay rates and taxes for about 26 months. There
is no admissible evidence to explain why the deceased and the respondent did not pay the monthly account for rates and taxes or why the deceased did not immediately pay the full amount reflected in the statement of account.
(8) When he died the deceased had no investments and, apart from the mortgage bond insurance, no insurance policies. He also did not appear to have disability insurance such as that provided by the Professional Provident Society.
(9) The deceased died while driving a motor vehicle, a 1989 Nissan one ton LDV, which he purchased in 2002 for R25 000 but which was not registered in his name. There is no proof that the deceased paid the purchase price and received the relevant registration documents. There is no explanation for the fact that the vehicle was not registered in the deceased’s name. The executor apparently sold the wreck of this vehicle for R5 000.
(10) According to the plaintiff’s further particulars for trial the respondent had a 1998 Toyota Tazz which she purchased in 1998 for R42 000. At the time of the trial in 2006 this vehicle was 8 years old.
(11) In cross-examination the respondent conceded that at the time of the deceased’s death she was the breadwinner and that she had been the breadwinner during the six years that the deceased had been at the Bar.
(12) There is no evidence that the deceased spent money on hobbies or any outside interests. In fact there is no evidence that he had outside interests. According to his wife and colleagues he applied himself diligently to his practice. He worked at it during the day and very often during the evenings. He relieved this routine with the occasional game of action cricket.
[29] On the strength of these objective facts the only reasonable inference is that the deceased was struggling to make a living at the Bar. See AA Onderlinge Assosiasie Beperk v De Beer 1982 (2) SA 603 (A) at 614H and 614H-615B; Govan v Skidmore 1951 (1) SA 732 (N) at 734C-D: Ocean Accident and Guarantee Corporation Ltd v Koch 1963 (4) SA 147 (A) at 159C-D: Spes Bona Bank Ltd v Portals Water Treatment South Africa (Pty) Ltd 1983 (1) SA 978 (A) at 981A-D.
[30] In view of this cogent objective evidence the views of his colleagues, Adv. Naudé and Adv. De Wet, simply do not bear scrutiny. Their evidence that the deceased had a substantial practice and appeared three to four days a week in opposed applications and earned appearance fees of R4 500 to R5 000 per day simply cannot be accepted. Apart from the fact that this evidence is not supported (and in fact is contradicted) by the schedule of fees compiled by Mr Tonge it is highly improbable. If the deceased was earning between R15 000 and R20 000 per week the overwhelming probability is that the deceased would have paid the mortgage bond instalments and the municipal accounts as and when they fell due. These were clearly the deceased’s most important financial obligations.
[31] The respondent also failed to prove that the deceased’s practice was comparable to that of Adv. De Wet. Simply judging by gross fees earned, for reasons which do not appear from the record, Adv. De Wet’s financial progress at the Bar was far faster than that of the deceased. In his first full year of practice (2004) his gross earnings were R383 750 (i.e. about 31/2
times that of the deceased in his first full year) and in his second full year of practice (2005) his gross earnings were R683 151 (i.e. six times that of the deceased in his second full year in practice). The deceased and Adv. De Wet commenced practice at the Bar at different times and there is no evidence that Adv. De Wet’s practice consisted mainly of family law cases and urgent applications, usually in family law disputes. It appears that Adv. De Wet was more involved in commercial and Road Accident Fund cases.
[32] Against that background the reasoning of the court a quo will be considered.
[33] The court a quo identified the key factual issues in the case as –
(1) the deceased’s earning capacity; and
(2) the contingencies to be allowed.
With regard to the first key issue the court a quo noted that it was common cause that the deceased’s financial information was deficient and that there were three bases on which to determine the deceased’s earning capacity –
(i) the earnings of Adv. Naudé de Wet whose practice ‘in certain respects’ is comparable to that of the deceased;
(ii) the earning capacity of the deceased in the private sector; and
(iii) the earnings reflected in the deceased’s available (deficient) financial information and to make certain assumptions.
[34] The court a quo said that it was necessary to consider all the evidence to decide which basis was most appropriate to determine the deceased’s earnings had he not been killed.
[35] In my view the trial court erred in identifying the one key factual issue as the deceased’s earning capacity in general and in adopting the approach which he did. The key factual issue was what the deceased would probably have earned as an advocate had he not been killed. The evidence, particularly that of the respondent, was clear: the deceased would have continued to practise at the Bar despite his lack of success and the financial implications thereof. This was so clear that the parties agreed in argument before the court a quo that the deceased would have remained at the Bar as an advocate until the age of 70. Accordingly it was wrong to attempt to determine the respondent’s loss by reference to what the deceased could have earned in another occupation – Minister van Veiligheid en Sekuriteit v Geldenhuys 2004 (1) SA 515 (SCA) at 536H-537A; Griffiths v Mutual & Federal Insurance Co Ltd [1993] ZASCA 121; 1994 (1) SA 535 (A) at 544G-547E; Carstens NO v Southern Insurance Association Ltd 1985 (3) SA 1010 (C) at 1020B-G.
[36] It was also wrong to use the earnings of another advocate with a practice (allegedly) comparable to that of the deceased to determine
the deceased’s probable earnings. Success at the Bar is, unfortunately, very often solely measured by the size of the advocate’s income rather than the complexity and difficulty of the cases which the advocate handles and the advocate’s forensic ability. The advocates’ profession is sui generis and it may fairly be described as one of, if not the most, individualistic of professions. No two advocates are the same. No two advocates have the same intelligence, legal knowledge and expertise, forensic ability and personal qualities or the same professional and social advantages. All these factors play a role in an advocate’s advancement at the Bar. This has been recognised by the courts. In Griffiths v Mutual & Federal Insurance Co Ltd supra at 546C-F the court said:
‘In the present case it was obviously not possible for the plaintiff herself to state what she would have earned at the Cape Bar as she had not practiced at the Bar before. It is furthermore doubtful whether the evidence of the earnings of other members of the Cape Bar or of their average or mean earnings would have been of much assistance in determining the plaintiff’s probable potential earnings. Skills, fees and earnings at the Bar vary from one individual to the other, there are many reasons for success at the Bar and one member’s earnings may not be a reliable yardstick of what another member would earn. In Reef Lefebvre (Pty) Ltd v SA Railways and Harbours 1978 (4) SA 961 (W) Coetzee J said in a review of taxation involving counsel’s fees at 963H that:
“Perhaps more so than in other professions, skills at the Bar vary enormously over a wide spectrum; from fumbling apprenticeship to sheer artistry. And so do the fees. Particularly is this so at the junior Bar.”
In view of the many imponderables, evidence of actual earnings at the Cape Bar would probably not have been sufficient for a relatively
accurate actuarial calculation of the plaintiff’s future loss of earning capacity.’
[37] In my view these remarks are particularly apposite on the facts of this case. The two advocates are not comparable in age, education, background or experience. They were at different stages of their professional careers when the comparison was made: the deceased was in his sixth year and Adv. De Wet in his second. The evidence does not reveal the nature and quality of the work which Adv. De Wet was doing and the evidence is too vague to find that the deceased and Adv. De Wet were involved in the same area of practice or expertise and doing the same amount and type of work. It anything it indicates the apposite.
[38] In my view the approach of the appellants’ expert, Tonge, was correct. The court should have determined the deceased’s
earnings at the time of his death by reference to his records and then made whatever adjustments were required by the evidence. This is preferable to the evidence of the respondent’s expert which is based on the vague and unsubstantiated evidence of Adv. De Wet, the flawed comparison between the deceased and Adv. De Wet’s practices and earnings and which illogically uses Adv. De Wet’s gross earnings and the deceased’s expenses to calculate the deceased’s net income.
[39] In order to arrive at the conclusion that the deceased would have earned a net income of R515 000 in the 2005 tax year the court a quo made the following findings:
(1) it is common cause that the deceased’s financial information was deficient;
(2) the deceased had a substantial and busy practice;
(3) the deceased had a comparable practice to that of Adv. Naudé de Wet;
(4) the deceased was paid in cash and he cashed cheques for fees which are not reflected in his financial statements;
(5) the deceased’s higher typing costs were indicative of a busier practice than that of Adv. De Wet;
(6) the deceased had outstanding debtors amounting to R282 633,80 at the time of his death.
These findings will be considered in turn.
[40] Reference has already been made to the respondent’s failure to place documentary evidence before the court to establish essential facts. It is not in issue that the deceased’s financial statements for the 1998, 1999 and 2000 tax years are reliable. The respondent’s contention is that the deceased’s financial statements for 2001, 2002 and 2003 tax years are not reliable because the deceased did not keep proper records of his fees. Nevertheless, the respondent, as executrix in the deceased’s estate, signed the financial statements prepared by the deceased’s accountant, Brino Britz, for the 2001, 2002 and 2003 tax years. Each set of financial statements records that it was prepared from the books, information and explanations received from the taxpayer. Brino Britz did not testify and there is therefore no explanation as to the deficiencies. If someone examined the deceased’s practice books and records and concluded that a number of attorneys owed the deceased approximately R282 000 for fees earned during the 2000, 2001, 2002 and 2003 tax years; that the fees owing for 2001 were R27 882,00, for 2002 were R77 885,00 and for 2003 were R150 580,00 and that these fees were not reflected in the financial statements for those years the relevant documents should have been produced and this should have been explained. There should also have been an analysis of the books and records to demonstrate that these fees were still due and payable. According to Brino Britz’s
letter to the respondent dated 8 August 2003, from the deceased’s books and records, he could not determine the debtors at the end of each year. He also stated that he understood that at the date of the deceased’s death debtors amounted to R289 000,00 but that it was uncertain whether these debts could be recovered. It is clear that Brino Britz did not establish this figure. It also does not appear that Mr Jacot-Guillarmod examined the books and records for 2001-2003 and Mr Tonge, who did, did not consider that the records were deficient. From the deceased’s fee statements to attorneys he was able to compile a schedule of fees for 2002 and 2003 and calculate the deceased’s gross income (turnover) in those years. As already mentioned he concluded that the gross income was understated in the financial statements. The court a quo therefore erred in concluding that the deceased’s records were deficient.
[41] The objective facts relating to the deceased’s practice, practice income and financial position contradict the findings that the deceased had a substantial and busy practice comparable to that of Adv. De Wet. As already mentioned, the facts do not support a finding that the deceased’s practice was comparable to that of Adv. De Wet and, in any event, this is not a proper basis to determine the deceased’s earnings. The findings of the court a quo therefore cannot be supported.
[42] The evidence pertaining to the cash received and cheques cashed by the deceased is so vague that no finding can be based on it. On the strength of this evidence it was contended that the deceased received substantial amounts of cash. Even if he did, this cannot justify a finding that the deceased earned substantial amounts which he did not record his books and records.
[43] The typing costs also do not indicate that the deceased was earning substantially more than was reflected in the financial statements and that the deceased had a busier practice than Adv. De Wet. This finding cannot be supported.
[44] Reference has already been made to the unsatisfactory evidence relating to the alleged outstanding debtors of R282 633,80. The deceased’s accountant, Brino Britz, stated in the letter that he was not able to determine the debtors at the end of each year and that he understood that an amount of approximately R289 000,00 was owing. But the person who determined these figures did not testify to explain how these figures had been determined. According to the statement handed to the court, specific amounts were owing by specific attorneys. This demonstrates that the records were not deficient and the attorneys could be pressed for payment of the amounts owing. It is astonishing that there is no evidence relating to the steps taken to recover these large amounts and what resulted from such steps. In my view the evidence is unconvincing and improbable and the finding based thereon cannot be supported. To summarise, Mr Tonge’s evidence which coherently and objectively reviewed the relevant facts as they emerged from the documents was more realistic and was preferable to that of the respondent’s witnesses and should have been accepted by the court a quo.
Remarriage contingency
[45] (1) In argument the respondent’s counsel contend that the remarriage contingency should be struck down by this court
because it is unconstitutional. They argue that the contingency is unconstitutional because it offends against the equality
provisions of the Constitution; that essentially the court is called upon to assess the woman’s prospects of remarriage on the strength of her appearance and then decide what the prospects are of a man wanting to marry her in the future; that the application of a remarriage contingency is discriminatory and demeaning. They point out that in some jurisdictions the
prospects of remarriage is not a permissible consideration and in support of the argument refer to section 4 of the Law Reform
(Miscellaneous Provisions) Act of 1971 as substituted by section 3(3) of the Fatal Accidents Act of 1979 (United Kingdom); 22 Am Jur 2d para 164 (United States of America); section 10(4)(h) of the Northern Territory Compensation (Fatal Injury) Act (Australia); and the foreign judgments referred to by the court a quo. The appellants’ counsel did not deal with the issue in their heads of argument or in oral argument.
(2) It is clear from the judgment of the court a quo that it simply made provision for the contingency of remarriage. The court did not refer to the respondent’s appearance or express a view as to whether she would remarry or not. It seems that the court a quo was concerned simply with the reality of the respondent’s position: she is a young woman with tertiary qualifications qualified to practise as an attorney and has a young child.
(3) According to the respondent’s counsel the point was not pressed in the court a quo because the respondent wished to avoid an appeal on the issue. Despite the fact that the court a quo did not assess the prospects of the respondent remarrying on the basis of her appearance and the fact that this court has not seen the respondent (she was not present during the appeal) the respondent now seeks to resurrect the argument.
(4) In the absence of full argument I am not prepared to accede to the request. This court has not been addressed on the law as it is applied in the foreign jurisdictions and what the reasons were for the statutory intervention.
(5) In South Africa the contingency of remarriage is usually taken into account. If the purpose of an award for damages for loss of support if borne in mind the possibility of the plaintiff remarrying is a very real consideration.
The possibility of a young widow remarrying shortly after the death of her husband and receiving damages for loss of support calculated over a period of 40 years is completely unrealistic. Allowing for the contingency is obviously realistic. In Hulley v Cox 1923 AD 234 at 244 the court said:
‘The dependants are entitled to be compensated for the pecuniary loss involved in a reduced income and a restricted provision for the supply of what they had been accustomed to. But the object being to compensate them for material loss, not to improve their material prospects, it follows that allowance must be made for such factors as the possibility of remarriage’.
In Peri-Urban Areas Health Board v Munarin 1965 (3) SA 367 (A) at 376B-D the court summarised the position as follows:
‘A widow is therefore entitled to compensation for loss of maintenance consequent upon the death of her husband, but any pecuniary benefits, similarly consequent, must be taken into account…. What she has lost is a right to support … Marriage prospects are relevant because marriage would reinstate her right of support. The propriety of taking such prospects into account was recognised by this court in Hulley v Cox, 1923 AD 234 at 244 and Botha’s case, supra, at pp616-8.’
These, and other judgments, reflect the approach of South African courts to the question of damages: that they should be fairly assessed in the light of the realities of the case.
(6) These judgments do not suggest anything other than that the possibility of remarriage must be taken into account. They do not, in terms, require that a trial court assess the likelihood of the plaintiff remarrying on the strength of her physical appearance. The respondent has not referred to a judgment in South Africa where this has been stated as a requirement in determining the possibility of the plaintiff remarrying. If it is the law that this be done I agree with the respondent that this would be offensive and should not be part of the law. But the respondent has not been so assessed in this case and this court has not seen her. It therefore plays no role in the case. It is a simple actuarial contingency.
[46] In the premises the appeal must be upheld and the award of the trial court must be set aside and substituted with a new award calculated on the basis of the deceased’s earnings as set out in this judgment. The facts relating to the plaintiff and her earnings and C and the various contingencies to be taken into account are not contentious. The relevant facts to be taken into account are as follows:
The respondent (plaintiff)
(1) The respondent was born on 25 December 1972 and is qualified as an attorney. Since about 2001, the respondent has practised at Brugman’s Attorneys. She became a director of the firm before the trial in 2006.
(2) During the 2003, 2004, 2005 and 2006 tax years the respondent’s gross income was R167 268,00, R190 564,00, R262 000,00 and R306 972,00 respectively.
(3) The respondent would have interrupted her professional career for two years after the birth of C on 21 September 2003 and thereafter continued to practise as an attorney until she retired at the age of 60.
C
C was born on 25 December 2003 and would have been dependent on the defendant until the completion of her tertiary education at the age of 22 (i.e. 31 December 2025).
Deceased
(1) The deceased was born on 1 January 1971 and after qualifying as an advocate practised as such as a member of the Pretoria Society of Advocates from July 1997 until his death on 12/13 March 2003.
(2) The deceased would have continued to practise as an advocate until the age of 70.
(3) According to his financial statements the deceased’s gross and net income during the years he practised were as follows:
(4) The figures for the deceased’s gross income in 2002 and 2003 must be substituted with the figures of R297 071 and R277 830 respectively. (Calculated by Mr Tonge from the information in the deceased’s fee statements.)
(5) The deceased’s gross income would have increased at the rate of 20 % per annum for the next four years (i.e. until his 10th year at the Bar) and thereafter at the rate of inflation being 7 % per annum until he reached the age of 70. The deceased’s
expenses would have increased at the same rate of inflation.
Contingencies/Allowances
(1) A contingency of 7,5 % should be applied to the respondent’s past loss of support.
(2) An allowance should be made for a 50 % chance of a second child.
(3) A contingency of 17,5 % should be allowed in respect of the respondent’s prospects of remarriage.
(4) A contingency of 17,5 % should be applied in respect of future loss of support.
Recalculation of the plaintiff’s damages
[47] During the hearing it became clear that if the appeal is upheld and the respondent’s damages must be calculated on different facts an actuary will be required to do the calculation. Accordingly the parties agreed that if the appeal is upheld the court must give instructions to an actuary to calculate the quantum of the respondent’s claims. On 5 September 2008 the parties agreed that the court should furnish actuary Robert Koch with the necessary instructions and that he should be requested to send his account to the respondent’s attorney, Adams & Adams. On 23 February 2009 the court faxed to Robert Koch its draft judgment and requested him to recalculate the damages in the light of the judgment. The court received Robert Koch’s calculations on 27 February 2009. As there appeared to be a misunderstanding about the court’s instructions the court sent a fax to Robert Koch on 6 March 2009 to clarify its instructions and request a recalculation and on 26 March 2009 received the final calculations. These are incorporated in this judgment. The correspondence between the court and Robert Koch is incorporated in a bundle in the court file marked ‘X’.
Order
[48] I The respondent’s application in terms of Rule 30(1) (to set aside the appellant’s applications for the allocation of a date of the hearing of the appeal; for condonation of the failures to apply timeously for the allocation of a date for the hearing of the appeal; to file timeously the record of the appeal and to reinstate the appeal) is dismissed with costs, such costs to include the costs consequent upon the employment of two counsel and the wasted costs of the postponement of the application on 14 April 2008 which shall also include the costs consequent upon the employment of two counsel.
II The appellants’ failure to apply timeously for a date for the hearing in accordance with Rule 49(6) is condoned.
III The appellants’ failure to deliver timeously the copies of the record in accordance with Rule 49(7) is condoned.
IV The appellants’ appeal is reinstated.
V The appeal is upheld and the orders that the appellants (defendants) pay to the respondent (plaintiff) R2 198 514,00 for loss of support (and interest on R2 198 514,00 a temporae morae) are set aside and substituted with the following orders:
‘(a) Payment of the sum of R735 192,63 which is made up as follows:
(i) funeral expenses R9 111,63;
(ii) plaintiff’s loss of support R274 364,00;
(iii) C H Oosthuizen’s
loss of support R451 717,00;
(b) Payment of interest on the amount of R726 081,00 (i.e. R735 192,63 less the funeral expenses of R9 111,63) calculated at the rate of 15,5 % per annum from the date of this judgment until the date of payment.’
VI The respondent is ordered to pay the costs of the appeal which costs shall include the costs consequent upon the employment of two counsel.
_______________________
B.R. SOUTHWOOD
JUDGE OF THE HIGH COURT
I agree
________________________
N.M. MAVUNDLA
P.M. MABUSE
ACTING JUDGE OF THE HIGH COURT
CASE NO: A671/07
HEARD ON: 3 September 2008
FOR THE APPELLANTS: ADV. R. BUDHESI SC
ADV. M. ZULU
INSTRUCTED BY: Mr S.M. Dawood
FOR THE RESPONDENT: ADV. D.A. NESER SC
ADV. E.C. LABUSCHAGNE SC
INSTRUCTED BY: Ms. N. Koch of Adams & Adams
DATE OF JUDGMENT: 2 April 2009