A T W De Klerk v Absa Bank Ltd and Others

De Klerk, a Pretoria attorney, was approached by a broker (Du Toit) and manager (van Rooyen) to invest in a scheme involving United Bank, United Insurance Brokers, and Commercial Union Life Assurance. The investment scheme involved De Klerk's firm borrowing R100,000 from the bank for 10 years, repaying his firm's loan account, and investing the proceeds in a Commercial Union "Prima-Groeiplan". A brochure presented to De Klerk indicated that after 10 years he would receive R320,622 (or R220,622 net after repaying the bank loan) free of tax. De Klerk invested based on these representations. After approximately 10 years, Commercial Union only paid R216,435, substantially less than promised. De Klerk sued for fraudulent or negligent misrepresentation, claiming damages for the loss of opportunity to invest elsewhere more profitably. At the close of the plaintiff's case, the trial court (Van der Walt J) granted absolution from the instance, finding that De Klerk had failed to prove his loss, particularly that he would have invested elsewhere had the money been available.

• Whether the test for absolution from the instance at the close of the plaintiff's case was correctly applied
• Whether there was sufficient evidence of causation - that De Klerk would have invested elsewhere
• Whether there was sufficient evidence to quantify damages for loss of a chance to invest
• The distinction between causation and quantification in assessing damages
• Whether the plaintiff himself must give direct evidence of what he would have done, or whether such evidence can be inferred or provided by expert witnesses
• Whether nominal profit (ignoring inflation) defeats a claim for loss of opportunity to invest more profitably

The appeal was allowed with costs, including costs of senior counsel. The defendants were ordered to be jointly and severally liable for costs. The order of the trial court granting absolution was set aside and replaced with an order refusing absolution. The plaintiff was awarded any wasted costs occasioned by the absolution application. The case was remitted to the trial court for further hearing and decision.

The binding legal principles established are: (1) At the close of a plaintiff's case, absolution from the instance should only be granted if there is no evidence upon which a court, applying its mind reasonably, could or might find for the plaintiff - this is a low threshold. (2) There is a fundamental distinction between causation and quantification of damages: causation must be proved on a balance of probabilities, but quantification of uncertain future losses or loss of chances can be assessed by the court on a percentage or evaluative basis without requiring proof on a balance of probabilities. (3) In claims for loss of opportunity or loss of chance, the plaintiff must prove as a matter of causation that he had a real or substantial chance (as opposed to a speculative one); if this threshold is met, the evaluation of the chance forms part of the assessment of quantum of damages. (4) Evidence of what a plaintiff would have done in hypothetical circumstances need not come exclusively from the plaintiff himself but can be established through inference from circumstances and expert evidence. (5) Where unlawful misrepresentation has placed a plaintiff in the position of having to prove loss of opportunity with inherent difficulties of assessment, courts should not entertain overly pessimistic speculations from defendants about what the plaintiff might have done.

Schutz JA made several non-binding observations: (1) He noted that counsel who applies for absolution at the end of a plaintiff's case takes a significant risk, and time and again such applications have been successfully appealed, resulting in wasted costs. (2) He emphasized the importance of obtaining advice on evidence before trial, noting that proper preparation would likely have avoided the need for postponement, absolution application, and appeal. (3) He suggested that the trial judge might consider, when all evidence is in, whether the scheme might actually have been contractual in nature despite De Klerk disavowing contract. (4) He observed that judges should take judicial notice of inflation as a basic fact of life over recent decades. (5) He noted that De Klerk's evidence with hindsight about what he would have done might have been of questionable value, and that the impartial actuary's evidence might actually be better evidence of quantum. (6) He cautioned that on appeal, appellate tribunals should avoid expressing views that might prematurely curb the trial court's freedom in assessing facts when all evidence is complete, though interpretation of documents may require clearer guidance. (7) He recounted an anecdotal story about a judge who warned counsel about the consequences of insisting on absolution, suggesting judicial awareness of the risks of premature absolution orders.

This case is significant in South African law for clarifying the proper approach to absolution from the instance applications and establishing important principles regarding the assessment of damages for loss of chance. It reinforces that absolution should be granted sparingly and only when no reasonable court could find for the plaintiff. Most importantly, it establishes the distinction between causation (which must be proved on a balance of probabilities) and quantification of damages (where courts can assess chances and make estimates without requiring proof on a balance of probabilities). The judgment provides guidance on how courts should approach claims for loss of opportunity or loss of chance, particularly in investment cases where precise quantification is impossible. It also clarifies that "best evidence" does not necessarily mean the plaintiff must personally testify about hypothetical future conduct, and that expert evidence and inferences from circumstantial evidence may suffice. The case demonstrates judicial willingness to assist plaintiffs in quantifying damages even where precision is impossible, provided there is some evidential basis for the loss.