Drake Flemmer & Orsmond Inc and Another v Gajjar

• Jurisdiction: South Africa
• Court: Supreme Court of Appeal
• Judge: Cachalia JA, Tshiqi JA, Makgoka AJA, Ploos van Amstel AJA and Rogers AJA
• Judgment Date: 01 December 2017
• Citation: 2018 (3) SA 353 (SCA)
• Hearing Date: 01 December 2017
• Docket Number: 21/2017 [2017] ZASCA 169
• Counsel: PE Jooste (with TJD Rossi) for the appellants. LA Schubart SC (with T Zietsman) for the respondent.

Rogers AJA (Cachalia JA, Tshiqi JA, Makgoka AJA and Ploos van Amstel AJA concurring):

Introduction F

[1] The main issue in this appeal is the date at which damages should be assessed in an action against attorneys for professional negligence in the conduct of a client's claim against the Road Accident Fund (RAF), where the claim was settled at substantially below its true value. In general terms, the client's damages are the difference between the settlement G amount and the true value of the claim against the RAF. In relation to the assessment of the true value of the claim against the RAF, this judgment considers (i) the law to be applied; (ii) the facts and evidence to which regard may be had; (iii) the time value of money.

[2] H The client in this case is Mr Rex Sutherland. Initially he was the plaintiff in his personal capacity. Latterly he has been represented by a curator ad litem, the present respondent. For convenience I refer to Mr Sutherland as the plaintiff. He was badly served by two successive firms of attorneys, the first and second appellants. The first firm, Drake Flemmer & Orsmond Inc (DFO), was the plaintiff's attorneys in his claim I against the RAF. They negligently under-settled the claim. The second firm, Le Roux Inc (LRI), was the attorneys whom the plaintiff engaged to sue DFO. It negligently allowed his claim against DFO to prescribe. I refer to the appellants collectively as the defendants.

[3] By the time the case came to trial in November 2015, the defendants J had conceded negligence. The plaintiff's only extant claim was against

Rogers AJA (Cachalia JA, Tshiqi JA, Makgoka AJA and Ploos van Amstel AJA concurring)

LRI. His evidence was directed at proving the amount he would have A been awarded had his RAF claim been properly conducted. For that purpose his claim was actuarially valued as at 1 December 2015. The defendants adduced no evidence. The court a quo substantially accepted the plaintiff's quantification but reduced it by 43,69% because of a supposed delay of about seven years by the plaintiff in suing LRI. This B effectively resulted in a valuation date of September 2009. The judge deducted from the reduced sum the actual settlement amount, grossed up to its September 2009 value, and awarded the plaintiff the difference.

[4] With the leave of the court a quo, the defendants appeal to this court, contending that the plaintiff's claim should have been valued at the date C of the settlement or at the date of a notional trial against the RAF, and that for this reason his claim should have been dismissed. Also with the leave of the court a quo, the plaintiff cross-appeals against the reduction of 43,69%.

The factual background D

[5] The plaintiff and his fiancée were injured in a head-on collision on 2 July 1997. The plaintiff, then 24 and living in King William's Town, was employed as a youth pastor and part-time teacher. They were both hospitalised for some weeks. The plaintiff was treated for fractures of the pelvic ring and right femur. While in hospital they engaged DFO to pursue claims against the RAF. They married in October 1997. E

[6] The plaintiff returned to work in January 1998 but experienced pain and persistent headaches, was forgetful and battled to concentrate, and displayed anger and frustration. He continued to work at the same church until the end of 1999, interrupted by operations in August 1998 and March 1999. F

[7] DFO arranged for Dr Mandell, an orthopaedic surgeon, to prepare a medico-legal report, which was dated 8 May 1998. DFO lodged the RAF claim in January 1999. The only injuries mentioned were orthopaedic. The amounts claimed totalled R150 771, including R100 000 for general damages. Nothing was claimed for loss of earnings. G

[8] The RAF conceded negligence and made several offers of settlement, the last of which the plaintiff accepted on 21 December 1999 on DFO's advice. The offer was R98 334 (incorporating general damages of R50 000) together with an undertaking in terms of s 17(4)(a) of the H Road Accident Fund Act 56 of 1996 (RAF Act) and costs. The undertaking was 'limited to' Dr Mandell's report. The plaintiff's complaint in the court a quo was that DFO not only failed to claim the loss of past and future earnings flowing from his orthopaedic injuries; they also failed to investigate the possibility of brain injury. I

[9] At the beginning of 2000 the Sutherlands relocated to East London and the plaintiff started work at a new church on probation. He continued to suffer symptoms which affected his performance. He was not offered a permanent post. In July 2000 they moved to Port Elizabeth. The plaintiff started an appliance business which soon failed. Orthopaedic complications resulted in further operations in April 2000, J

Rogers AJA (Cachalia JA, Tshiqi JA, Makgoka AJA and Ploos van Amstel AJA concurring)

September A 2000 and December 2000. On 19 September 2000 the plaintiff wrote to DFO. Among other things, he asked whether it was possible for his RAF claim to be reviewed —

'due to the fact that I am literally losing thousands of rands a month because I am unable to work normally, something that was not taken B into account at the beginning of the claim'.

DFO replied, explaining that he could not pursue further claims against the RAF or against the negligent driver.

[10] In July 2001 the plaintiff terminated DFO's mandate and engaged C LRI. On 25 April 2002 LRI advised the plaintiff that DFO had negligently under-settled his RAF claim. Unfortunately LRI itself made an elementary error. They assumed that prescription against DFO started to run on 25 April 2002, not 21 December 1999. The commencement of prescription was not, however, dependent on the plaintiff's having knowledge of the legal consequences of the facts (Truter and Another v Deysel D 2006 (4) SA 168 (SCA) ([2006] ZASCA 16)).

[11] In the meanwhile the plaintiff's condition was going downhill. He was becoming addicted to analgesic drugs. He was referred to a rehabilitation facility in December 2001. Things did not improve. During the course of 2002 he suffered several epileptic fits. The degree E of his addiction and the extent of his behavioural alteration can be gauged from the fact that he began to forge prescriptions. He was seen by a psychiatrist, Dr Zabow, in October 2003, by which stage he was psychotic. He was diagnosed as suffering from depression and epilepsy in consequence of brain damage. Dr Zabow recommended a full evaluation F after completion of treatment for drug abuse.

[12] Following criminal charges relating to the forging of prescriptions, the plaintiff spent about three months at a drug rehabilitation facility, Magaliesoord Centre, over the period March to June 2004. The social worker's report regarding the results was not optimistic.

[13] G LRI issued summons against DFO on 21 April 2005. Even on their mistaken view of prescription, they cut things fine. In its plea, filed during June 2005, DFO, inter alia, raised prescription. It is unclear when the plaintiff was told of this. The first explicit reference to prescription in correspondence between LRI and the plaintiff was on 12 July 2007, when H the plaintiff — in a letter to Mr Abraham le Roux, the senior member of the firm — said that he was totally confused about what was going on because Mr Dean Niekerk, the attorney handling the matter, told him that prescription was being raised whereas Mr le Roux had assured the plaintiff that the summons was timeously issued.

[14] I In August 2007, more than two years after the filing of DFO's plea, LRI filed a replication alleging that prescription did not start to run until 25 April 2002. A trial date was obtained for 6 November 2007 with a view to determining the special plea. On 2 November 2007 LRI delivered a notice of amendment to introduce into the replication an allegation that from the middle of 2001 until June 2004 the plaintiff had been J insane and that completion of prescription had thus been delayed in

Rogers AJA (Cachalia JA, Tshiqi JA, Makgoka AJA and Ploos van Amstel AJA concurring)

terms of s 13(1)(a) of the Prescription Act 68 of 1969. This was based A on Dr Zabow's report of his examination of the plaintiff on 8 October 2003.

[15] There is no evidence that the plaintiff was told of this amendment. It has all the hallmarks of a desperate attempt by LRI to ward off prescription. Because of the belated notice, the trial date of 6 November 2007 B was vacated, the plaintiff being ordered to pay the wasted costs.

[16] Inexplicably, LRI applied for a new trial date but failed to file the amended replication. As a result a new trial date in September 2008 fell away by agreement. Eventually in December 2008 LRI delivered the amended replication. LRI had the plaintiff examined by Dr Zabow in C April 2009. The latter's report of 10 May 2009 did not advance the insanity allegation.

[17] LRI continued to handle the matter in desultory fashion. A new trial date in June 2010 was aborted because the parties could not agree on the issues to be tried: DFO wanted the entire defence of prescription to be D adjudicated whereas LRI insisted that insanity be dealt with first. LRI was at fault in not ensuring that the question of separation was resolved in time to save the trial date.

[18] In October 2010 a new attorney at LRI wrote to the plaintiff to say that she and counsel were investigating the quantum of his claim and E that he would need to be examined by an industrial psychologist. This letter was written more than nine years after the plaintiff engaged LRI. After another five months, in keeping with LRI's feckless conduct of the case, they told the plaintiff that they had arranged for him to see an industrial psychologist, Mr Whitehead. His report came to hand in June 2011. F

[19] On...