Dr Roy Bane and Others v Marco D'Ambrosi

The respondent (D'Ambrosi), born in 1975, was a highly successful office equipment salesman for Canon in Cape Town. In 2000, he received multiple job offers in the United Kingdom and accepted a position with Ikon in London, Canon's biggest competitor. Before departing for London in January 2001, he consulted the appellants (medical practitioners) in December 2000 for persistent heartburn. They advised surgery to treat an oesophageal hernia. The surgery caused catastrophic damage to his health and physical ability, forcing him to cancel his London employment plans and remain in South Africa near his family. The appellants conceded liability for negligent medical treatment, and the case proceeded on quantum (assessment of damages) only. The Cape High Court (Van Zyl J and subsequently Traverso DJP) awarded damages for past and future loss of earnings based on what he would have earned in London (in pounds sterling) without adjusting for the lower cost of living in South Africa. The appellants appealed, arguing that the award should be adjusted to account for the fact that living in South Africa is less expensive than living in London.

• Whether, in assessing damages for loss of earnings that would have been earned in the United Kingdom, an adjustment should be made to account for the lower cost of living in South Africa where the plaintiff remained
• Whether future medical expenses should be limited to additional medical aid premiums for chronic conditions rather than full medical costs
• Whether the court failed to provide for future increases in income in computing notional future earnings
• Whether interest should run from the date of service of summons or from date of judgment

Appeal partially succeeded. The order of the High Court was amended: (1) Past loss of earnings award reduced from the difference between GBP160,893 and ZAR791,835 to the difference between GBP128,714 and ZAR791,835; (2) Future loss of earnings award reduced from the difference between GBP723,605 and ZAR3,911,705 to the difference between GBP578,884 and ZAR3,911,705; (3) Exchange rate to apply at date of payment (not date of judgment); (4) Interest provisions amended to specify different rates and periods for different heads of damage. The cross-appeal was dismissed. The respondent was ordered to pay the appellants' costs of appeal and cross-appeal.

When assessing damages for loss of earnings that would have been earned in a foreign jurisdiction with a higher cost of living than where the plaintiff actually resides post-injury, the court must adjust the award to account for cost of living differences to avoid overcompensation. A salary paid in a high-cost jurisdiction includes a component that serves as an indemnity against higher living expenses rather than reflecting true earning capacity. This adjustment must be made even if precise calculation is difficult; where quantitative evidence is insufficient, the court should apply a contingency deduction to achieve a fair result. The measure of damages is the plaintiff's actual loss of earning capacity, not a windfall that includes cost-of-living allowances unnecessary in the jurisdiction where compensation will be spent. Medical aid scheme payments, even under schemes with statutory obligations to accept members, constitute contractual arrangements (res inter alios acta) and cannot be deducted from claims for future medical expenses.

The Court observed that the stated case procedure adopted by the parties was not in accordance with Rule 33, which requires agreed facts rather than 'factual assumptions' with parties reserving their positions. Van Zyl J should have declined to rule until parties unequivocally accepted they were bound by the stated facts. The Court noted that fortunately the agreement to lead Dr van Walbeek's evidence meant that relevant evidence was placed before the trial court despite the problematic stated case procedure. The Court commented that currency nominalism has no bearing on the cost of living adjustment issue where parties have agreed to assess earnings in foreign currency. The Court stated that it is erroneous to treat cost of living adjustments as a species of 'collateral benefit' – the main exercise is to ascertain the plaintiff's actual loss, and the defendant is liable for neither more nor less than that quantum. The Court noted approvingly that while Traverso DJP may have been incorrect in considering herself bound by Van Zyl J's ruling after evidence was led, it was fortunate that the evidence was admitted.

This case establishes important principles for calculating damages for loss of earnings in cross-border employment scenarios. It confirms that when a plaintiff would have earned income in a foreign jurisdiction with a higher cost of living, courts must adjust the assessment to avoid overcompensation. The judgment recognizes that foreign salaries often include cost-of-living adjustments that are indemnities rather than reflections of earning capacity. While precise calculation may be difficult, courts should use contingency deductions to achieve fairness. The case also reaffirms that medical aid scheme payments are res inter alios acta and cannot be used to reduce damages, even where statutory obligations require schemes to accept all members. It demonstrates the courts' approach to speculation and imponderables in damages assessment, endorsing the Bailey principle that courts must make their best estimate even with incomplete information.