Rudman v Road Accident Fund

• Jurisdiction: South Africa
• Judge: Howie JA, Cameron JA, Nugent JA, Jones AJA and Lewis AJA
• Judgment Date: 26 September 2002
• Docket Number: 370/2001
• Hearing Date: 09 September 2002
• Counsel: J W Eksteen SC for the appellant. H J van der Linde SC for the respondent.
• Court: Supreme Court of Appeal

Jones AJA:

[1] The appellant, whom I shall call Rudman, is a farmer of the B farm Blaauwkrantz in the Kirkwood district of the Eastern Cape Province. He is a mohair farmer. He is also a game farmer, a hunting outfitter and a registered professional hunter who brings large numbers of foreign hunters to the Eastern Cape. He runs a highly successful C operation, one of the most successful of its kind in the Eastern Cape and indeed in the whole country.

His activities were abruptly interrupted on 5 May 1998 when he was involved in a motor collision. He sustained serious bodily injuries, notably bad fracture-dislocations of both lower legs and D ankles, fractures of the right arm, the right hand and the ribs, and soft tissue injuries to the head, neck, back, hip and buttocks. After a spell in hospital he returned to the farm. But never again to hunt; nor to resume with the same vigour the role of hands-on manager of a large angora goat farm. He was permanently disabled. He was then 53 years old. E

[2] Rudman was an active man until the collision. He was a fine sportsman - in his day, a provincial cricketer. He had always maintained a high level of personal fitness. This was part of his way of life and a necessary ingredient of his activities as a professional hunter and a farmer. His passion was his work. He was brought up on a farm as a child. After he left school his father put F him through a farming apprenticeship before he began farming on his own account. In 1970 he purchased a farm in partnership with his brother and then, in 1972, he purchased a farm on his own account with money borrowed from his mother-in-law. This was the beginning of what would develop into one of the most extensive farming enterprises in the G Eastern Cape. By 1977 he had acquired other farms. That year his accountant advised, for reasons of estate planning and income tax strategy, that he should restructure his affairs.

Acting on this advice Rudman formed the Arthur Rudman Family Trust with himself, his wife, his accountant and his attorney as trustees and H his two sons as beneficiaries. He is neither a capital beneficiary nor an income beneficiary. At about that time he also acquired control of a company which later became registered as Blaauwkrantz Farming Enterprises (Pty) Ltd. The trust holds 3 900 shares in the company and Rudman the remaining 100 shares. He, his wife and his children are the directors. The trust has become the property-owning entity in the I Rudman enterprise. The company is the income-producing entity. Rudman is the driving force. Although the farming and the hunting business is done through the company the fact of the matter is that Rudman continued to operate in the same way as he has always J

Jones AJA

done - as if he were a farmer farming for his personal account in his personal capacity. He used the company's banking A account, but treated it as a personal account. His wife wrote up the farming books. His auditors saw to the financial statements. He did not bother himself with these things, which he regarded as technical matters. He got on with running his farms. B

[3] Today the company owns four farms. It leases 16 other farms, 14 from the trust and two which are owned by Rudman personally. These farms are extensive. They form a single farming unit measuring more than 20 000 hectares. Their resale value is said to be about twenty million rand. They are stocked with 11 000 angora goats and C 3 000 sheep and boer goats. They are also stocked with 24 species of antelope, about 5 000 head in all, and there are other varieties of game as well. They are situated in rugged terrain - much of it steep mountainous slopes with deep gorges and valleys and thick bush, inaccessible by vehicle. D

[4] The motor collision of 5 May 1998 led in due course to a claim by Rudman for compensation in terms of the provisions of the Road Accident Fund Act 56 of 1996 as amended. The amount of the damages he claimed was R2 340 015,95 which is made up as follows:

Past provincial hospital expenses	208,00 E
Past private hospital expenses	6 926,20
Past medical expenses	15 799,75
Estimated future medical expenses	81 200,00
Past loss of earnings	745 882,00
Loss of earning capacity	1 380 000,00
General damages	100 000,00 F
	R2 340 015,95

[5] Summons was issued on 20 October 2000, and the matter proceeded to trial before Liebenberg J in the South Eastern Cape Local Division on 28 May 2001. At the trial the Fund conceded liability on the merits. It also conceded liability to pay for past medical and G hospital expenses and submitted to an order that it furnish an undertaking to pay all future medical and hospital expenses as and when they are incurred. The parties went to trial on the claims for past loss of earnings, loss of earning capacity and general damages.

The trial Court delivered judgment on 18 July 2001. It awarded general damages in the sum of R100 000, which included a comparatively H large allowance for loss of the enjoyment of hunting. But it dismissed the claims for past loss of earnings and loss of earning capacity. Rudman appeals to this Court against the dismissal of those claims, with leave from the Court a quo. I

[6] The evidence establishes beyond question that Rudman's injuries have given rise to severe permanent disability. The claims for past loss of earnings and loss of earning capacity arise from the physical handicaps from which he suffers. He has severe restriction of movement caused by the injuries to his ankles, and muscular weakness of the right hand and J

Jones AJA

arm. The prognosis is poor. The parties accept that he will never again function as a professional hunter, and that he is A physically unable to do the maintenance work which he formerly did on the farms.

The pleadings allege that the past loss of income suffered by the hunting side of the operation amounts to R553 882 for the years 1998, 1999 and 2000. This is the sum of

(a)

the difference between the anticipated turnover for those years and what was actually produced after numerous hunters B either cancelled their commitments or did not confirm their provisional bookings because of Rudman's unavailability (R523 882); and

(b)

additional travelling and marketing expenses which were incurred to regain clients who had cancelled or threatened to cancel their bookings (R30 000). C

The past loss suffered by the farming side of the enterprise is the cost of employing a maintenance manager to do work which Rudman would have done himself. The manager was employed at a monthly salary of R8 000 for the period June 1998 to June 2000. The amount is R192 000. This gives a total claim of R745 882 for past loss of earnings. D

[7] With regard to loss of earning capacity, the pleadings allege that Rudman is permanently and completely disabled from earning a living as a professional hunter, and permanently and partially disabled in his efficiency as a farmer in that he can no longer do the maintenance work which he formerly did. But for his disabilities he E would have continued to do these things until the age of 65 years (that is, for a further 10 years). He would have hunted for 150 days a year at a rate of R600 per day. An amount of R900 000 is claimed under this head. For the other half of the year he would have continued to perform, inter alia, maintenance duties on the farm which will now be performed by a maintenance manager at a salary of R8 000 F per month. R480 000 is claimed under this heading, being half an annual salary of R96 000 for the next 10 years. The total claimed for loss of earning capacity is R1 380 000.

[8] The trial Judge dismissed the claims for past loss of earnings and loss of earning capacity for the following reasons: G

'On the evidence before me I must conclude that the losses suffered as a result of the temporary decline in the income...