Nhlumayo v General Accident Insurance Co of SA Ltd

• Jurisdiction: South Africa
• Judge: Leon ADJP
• Judgment Date: 24 April 1986
• Citation: 1986 (3) SA 859 (D)
• Court: Durban and Coast Local Division

Leon ADJP:

On 27 October 1979 and upon the N2 Highway between D Umgababa and Umkomaas the plaintiff, who was a pedestrian, was knocked down and injured by a vehicle insured by the defendant and driven by one Naidoo. The plaintiff suffered injuries in consequence of the accident and by reason of those injuries claimed damages in the sum of R318 689 against the defendant.

The case eventually came to trial before me and at that stage E it was agreed between the parties that whatever amount I should decide to award to the plaintiff should be reduced by 60% as that was the degree of fault on the part of the plaintiff.

The parties also reached agreement in respect of certain matters relating to the quantum of damages. It was agreed that:

(1)

F the plaintiff's past loss of earnings amounted to the sum of R34 377;

(2)

medical expenses were agreed in the sum of R2 738; and

(3)

general damages were agreed in the sum of R30 000.

The main matter in dispute between the parties was whether all G lost income should be discounted back to the date of the accident or whether past loss should not be discounted and future income should be discounted back to the date of trial. With regard to this topic I heard evidence of two actuaries.

The other matter in dispute is what deduction should be made H for contingencies. It was contended on behalf of the plaintiff that a distinction should be drawn between past loss of earnings and future loss of income. With regard to the former it was submitted that 5% should be deducted and with regard to the latter 10%. On behalf of the defendant it was contended that no distinction should be drawn and that an amount of 33⅓% should be deducted for contingencies.

I At the stage when the plaintiff first led evidence there was also a factual matter in dispute and that was whether the plaintiff would remain a labourer, as he was at the time of the accident, or whether he would probably have become an artisan. After evidence had been led on the topic, the plaintiff did not persist in trying to show that the plaintiff would become an J artisan and an amended statement of agreed figures was put in on the agreed basis that the plaintiff would have remained a labourer.

Leon ADJP

At the stage of argument, in the light of the concession made A by the plaintiff, an amended statement of agreed facts with regard to past and future loss of income was put in and reads as follows:

"On the assumption that all lost income should be discounted back to the date of the accident then:

(i) past loss	R23 156
(ii) future loss	R63 489
(iii) total loss	R86 645

On the assumption that past loss should not be discounted, and future income should be discounted back to date of trial, then:

(i)

R 34 377

(ii)

R132 177

(iii)

C R166 554

The above figures do not take into account adjustments which the Court may wish to make for contingencies."

The figure of R132 177 was subsequently amended to R130 120.

A builder, one Van Oudshoorn, employed the plaintiff as a labourer. He first took him on either in late 1969 or early 1970 when he was in his early or middle twenties. He found him D to be very honest, reliable, conscientious and very competent. He was an excellent labourer: the second best that he had. At the time when the plaintiff was injured he employed at least 18 labourers and he paid the plaintiff about 14% more than the minimum wage which he was obliged to pay. He did this because E he was more competent and he could do more selective work like repairing machines, being very handy with his hands. As a result of the recession in the building trade which supervened, Mr Van Oudshoorn was obliged to reduce his staff very considerably and when he gave evidence before me he had only two of his top labourers left. But he said that the plaintiff was definitely more competent than either of those two.

The consulting actuary called for the plaintiff was one Rolland F who had been practising his profession for ten years and who, in the course of his practice, had given his opinion on a fairly large number of claims of the kind with which this case is concerned. He was aware of the basic difference of approach between the plaintiff and the defendant with regard to the G proper method of discounting future income. He said that he had always discounted to the date of trial in arriving at the compensation. With regard to income which would have been earned between the date of accident and the date of trial, he did not discount at all. He took the view that if one were to discount all income back to the date of the accident it would H mean that it would not be possible to put the plaintiff in the same position financially because the compensation would be too small. He said that assuming it was known what the plaintiff would earn in the future, what his method sought to do was to give the plaintiff a lump sum to replace this lost income and the only way to do this at compund interest is to discount to I the present time and not to some other date. He was trying to give the plaintiff the sum which invested, will produce an annuity which would theoretically expire in the course of his working life. If an award was made now of an amount discounted to a date six years earlier (the date of the accident) it would not have achieved the same results. He said that the general approach of actuaries was the same as his. He was quite emphatic that his method was the way of putting the plaintiff in exactly the same position that he would have been if there J had been no accident,

Leon ADJP

A whereas the method suggested by the defendant could not achieve that. He said that this was the first time in ten years of practice that the method of...