Recklies v Road Accident Fund

On 3 October 2017, the Plaintiff was driving his motor vehicle when it was struck by a vehicle driven by an insured driver. The collision resulted in the Plaintiff sustaining severe bodily injuries, including a right occipital fracture, bilateral occult fractures of mastoid air complexes, intracranial haemorrhage including haematoma, right subdural haemorrhage, fractures of the left inferior and superior pubic rami, closed fractures to the lumbar spine (fracture of left transverse process of L2), posterior lower rib fractures, left adrenal gland injury, and abdominal injury. Liability was settled with the Defendant (RAF) agreeing to pay 80% of proven damages. The Defendant also furnished a section 17(4)(a) undertaking for future medical and related costs. At the time of the collision, the Plaintiff was a self-employed engineering technician managing his own business, Trotex Engineering, which was registered in his life partner's name. After the accident, the Plaintiff attempted to return to work but was unable to maintain the business, which gradually declined until it ceased operations in 2019. He subsequently started a small handyman business, Blue Eagle, but this also failed to flourish. The Plaintiff claimed past medical and hospital expenses, loss of earnings and earning capacity, and general damages (the latter being settled or separated). The contested issues at trial were past medical/hospital expenses, loss of earnings, and applicable contingency deductions.

• Whether the Plaintiff was entitled to claim for loss of profits from the business Trotex Engineering in addition to his salary, given that the business was registered in his life partner's name.
• Whether the Plaintiff had proved his claim for past medical and hospital expenses in the absence of supporting vouchers.
• What contingency deductions should be applied to the Plaintiff's past and future loss of earnings.
• What was the appropriate retirement age to apply in calculating the Plaintiff's future loss of earnings.
• Whether the Plaintiff had discharged the onus of proving a loss of earnings and/or earning capacity.

The court ordered the Defendant (RAF) to pay 80% of the Plaintiff's proven damages, which amounted to R2,437,806 for loss of earnings. Additionally, the Defendant was ordered to pay the Plaintiff's costs of suit on an attorney and client scale, including costs of counsel on scale C and qualifying expenses of all expert witnesses. The claim for past medical and hospital expenses was dismissed due to lack of proof. Payment of the capital amount and costs was to be made within 14 days into the Plaintiff's attorney's trust account.

1. A plaintiff claiming loss of earnings based on business profits must produce reliable documentary evidence proving that those profits accrued to the plaintiff personally. Where a business is registered in a third party's name and the plaintiff is merely a salaried employee, it is speculative to include business profits in the loss calculation, and such profits must be excluded. 2. A claim for past medical and hospital expenses must be supported by documentary proof (vouchers); testimony alone is insufficient to discharge the onus of proof. 3. In exercising its discretion on contingency deductions, a court must consider the age of the claimant, the remaining working life, and the specific circumstances of the case. The sliding scale approach — lower contingencies for shorter remaining working lives — is appropriate.

The court noted several non-binding observations: (1) In discussing actuarial evidence, the court referred to MT v RAF 2021 All SA 285 (G), stating that if the base scenarios adopted by the actuary are fallacious, the actuarial calculation is of no value to the court or to RAF officials. The court warned that even a modest over-statement of income at the date of accident could lead to significant inflation of the proposed loss because the calculation is exponential. (2) The court observed that Dr Swart's evidence regarding the Plaintiff's qualifications as an artisan was based on mere speculation and not on any concrete or documentary proof. (3) The court remarked that an expert opinion based on incorrect facts is not helpful to the court, citing Road Accident Appeal Tribunal v Gouws [2017] ZASCA 188.

This judgment reinforces the principle that actuarial calculations for loss of earnings must be founded on proven facts and not speculation. It confirms the approach established in Rudman v RAF regarding the treatment of business profits where a business is not registered in the plaintiff's name. The case also highlights the role of courts in critically evaluating expert evidence and adjusting actuarial scenarios where the underlying factual assumptions are not supported by documentary evidence. It is significant for its application of the 'substance over form' debate in RAF loss of earnings claims, and for affirming that the court is not bound by expert opinions based on incorrect or unproven facts (Road Accident Appeal Tribunal v Gouws applied). The judgment also illustrates the practical consequences of failing to adduce documentary proof for medical expenses, and the standard approach to contingency deductions as outlined in RAF v Kerridge.