Bee v Road Accident Fund

• Jurisdiction: South Africa
• Judge: Seriti JA, Mathopo JA, Rogers AJA, Hughes AJA and Schippers AJA
• Judgment Date: 29 March 2018
• Citation: 2018 (4) SA 366 (SCA)
• Docket Number: 93/2017 [2018] ZASCA 52
• Hearing Date: 29 March 2018
• Counsel: MH van Heerden SC (with CW van Niekerk) for the appellant. D Potgieter SC (with S Bisschoff) for the respondent.
• Court: Supreme Court of Appeal

Seriti JA:

[1] On 24 November 2007 the appellant, a 48-year-old male, was knocked down by a motor vehicle whilst cycling. He sustained severe H physical injuries and was hospitalised until 21 December 2007. He continued receiving treatment at home and returned to work on an ad hoc basis from January 2009.

[2] As a result of the accident, the appellant instituted an action in the Western Cape Division of the High Court of South Africa. Merits were I conceded and on 16 October 2014 the trial proceeded only on quantum. On 17 April 2015 the trial court (per Van Staden AJ) granted an order in terms whereof the respondent was directed to pay the appellant an amount of R12 894 600,12, being the sum of R412 586,12 for medical expenses, R900 000 for general damages, R4 049 614 for past loss of earnings and R7 532 400 for future loss of earnings, and costs. J

Seriti JA

[3] A Thereafter, with the leave of the trial court, the respondent appealed to the full court of the Western Cape Division against the award for damages in respect of past and future loss of earnings only.

[4] On 20 September 2016 the full court (Nuku J, with Hlophe JP and Steyn J concurring) granted an order in terms of which the appeal was B upheld with costs and the award for past and future loss of earnings was set aside. With special leave granted by this court, the appellant appeals against the decision of the full court.

[5] At the time of the accident the appellant worked for Bee Painters and Waterproofing CC (BPW). He worked with his brother Mr Russ Bee C (Russ) and they each held 50% of the members' interest in BPW. The business had two offices, one in Cape Town and the other in Durbanville. The appellant was running the former office and Russ was running the latter office. The major work of the business was the painting of residential, commercial and industrial properties. BPW had a small permanent labour force and internal labour force of painters and D decorators. They largely relied on a subcontracted labour force.

[6] The appellant was the face of the business. He attended to the marketing of BPW, visiting clients and potential clients, preparing quotations and dealing with staff matters. In addition he also conducted E site inspections.

[7] The business also employed sales staff. One of them was Mr Brandon Swartz (Swartz), who was a senior sales executive. He earned a basic salary of R15 000 per month. He worked for BPW for about 12 years, from the year 2000 to 2011. His functions were almost the same as those F of the appellant. At BPW he was the only one who worked with roofing. He testified that after the accident the appellant performed the same functions but at a lower level. He further testified that they all handled their projects individually, all invoiced separately and their names appeared on those invoices. BPW kept a very strict record of invoices, so G it was convenient, at the end of each month, to ascertain which individual was responsible for which portion of turnover. As stated earlier, Swartz earned a basic salary of R15 000 per month and also earned a commission of about 40% for any sales above the target of R70 000. He confirmed the correctness of the sales and salary analysis mentioned hereunder relating to him.

[8] H Mr Jarrad Bee (Jarrad), the son of Russ, was employed by the business on a full-time basis from the end of 2010. He has taken over some of the appellant's duties and also assisted the appellant in carrying out some of his duties. In fact, Russ testified that Jarrad did everything that the appellant was doing, and even more. Jarrad was earning about I R25 000 per month and he was not earning a commission. The salaries or drawings of the appellant and Russ were determined by the two of them. They were determined at the beginning of the year.

[9] Jean-Marie van der Elst (Van der Elst), a forensic accountant who testified on behalf of the respondent, prepared a sales and salary analysis J report. He testified that when they prepared the said report they

Seriti JA

considered financial information they obtained from BPW and Mark Dale A Edwards (Edwards), a forensic accountant who testified on behalf of the appellant. The documents they perused included annual financial statements for the financial years 2002 – 2013; draft income statements for the financial years 2007 – 2014; draft trial balance for the financial years 2013 – 2014; and salary records, including IRP forms, tax returns and B assessment forms of the appellant, Russ and Swartz. The sales-revenue analysis indicates that the appellant and his brother were contributing almost evenly to the generation of revenue by BPW.

[10] The sales revenue analysis prepared by Van der Elst for the period 2007 to 2014 indicated that the appellant generated sales worth C R11 550 302 and his brother Russ generated sales worth R12 292 095. Between 2007 and 2010 and 2012 and 2013, the appellant generated sales worth more than those generated by Russ. Only in 2011 and 2014 did Russ generate sales worth more than those generated by the appellant.

[11] The salary analysis further indicated that in 2008 the appellant D earned almost 50% of his brother's salary and, between 2009 and 2013, the appellant and Russ earned almost the same salaries, and in 2014 the appellant earned far less than what his brother earned.

[12] Jarrad and Russ attempted to dispute the correctness of the sales E analysis mentioned earlier. They suggested that the sales allocated to the appellant were actually not his sales but they failed to provide any justifiable reasons for their suggestion that the appellant was not entitled to the allocation of the said sales. Edwards, who testified on behalf of the appellant, could also not provide a sound reason why the sales were allocated to the appellant if they were not his sales. As stated earlier, F Swartz testified that BPW kept a strict record of the invoices.

[13] As stated earlier, Van der Elst testified that the sales analysis and salary analysis were compiled by them from the documents they obtained from the business. They requested other financial documents G but they were not provided with same. The documents which were not given to them despite request thereof are journals, sales ledgers and salary ledgers for the financial years 2008 – 2014 and order books for financial years 2007 – 2008. Van der Elst during his testimony referred to an IRP 5 certificate which pertained to the appellant's salary for the 2012 financial year. It reflected a total figure of R670 161, and the same H figure appeared on the salary analysis referred to earlier. In my view the figures as reflected in the sales and salary analysis contained information obtained from the business and therefore can be relied upon. There is no reliable evidence which suggests that the salary and revenue analysis prepared by Van der Elst is not reliable. I

[14] There is no reason to doubt the correctness of the information contained in the sales and salary analysis document mentioned earlier. The sales allocated to the appellant in 2008 when he was at home could be sales from one or some of his old clients who came to the business during his absence. Repeat business could possibly account for the J

Seriti JA

2008 A sales allocated to the appellant. Jarrad testified that the sales allocated to the appellant could be business from the appellant's old clients.

[15] There is evidence that the appellant expressed the view that he was still employable in the sales sector as a result of his extensive knowledge B of the technical side of the paint business, as well as the fact that he was renowned in the industry and had a good name, although he could not work at the same level or function with the same capacity as before. BPW's website, at the time of the trial, which was several years after the accident, still represented that the appellant was the CEO of the business. The appellant's pre-accident roles in BPW were represented as Technical C Officer and Sales, whereas his post-accident position focuses on Sales and Project Management.

[16] It is interesting to note that the further particulars delivered to the respondent and signed on 23 January 2014 stated that '(s)ince 1980 to the current date plaintiff has been employed as the chief executive officer D of Bee Painters and Waterproofers'. It is further stated that '(a)fter the accident plaintiff continued to receive his full salary from Bee in the form of ex gratia payments'.

[17] Jarrad's appointment and his taking over of many of the functions of the appellant had enabled BPW, to a very large extent, to function E normally despite the appellant's injuries. The appellant contributed immensely to the revenue stream as pointed out in the sales revenue analysis. In the financial years 2009, 2010, 2012 and 2013 the appellant generated more sales than those generated by Russ despite the sequelae of the accident. The salary analysis indicates that the appellant and his brother were paid reasonably consistent salaries from 2006 to 2014. F The 2012 income statement confirmed that in 2012 the appellant generated sales worth R2 072 234 and his brother generated sales worth R1 778 677,44. The evidence suggests that the appellant's contribution to the business remained substantial and consistent, justifying the sales revenue allocated to him and the salary that was paid to him. There are G also clients' testimonials dated 21 October 2014 which showed that the appellant was still fully functional prior to and after the accident, during which period the appellant generated a significant portion of BPW's sales revenue.

[18] In his heads of argument the respondent's counsel, correctly so, H contended that the evidence tendered and the financial documents of BPW indicated that BPW's average...