LPL4802 Law of Damages Sem 1 Assignment 1 Question- Unisa

LPL4802 QUESTION 1

Rudman v Road Accident Fund'

In this case which was brought before the Supreme Court Of Appeal by the appellant, Mr Arthur Rudman. He was a mohair farmer who was also a successful game farmer and a registered professional hunter. In the year 1998 he was involved in a motor accident and sustained serious bodily injuries that diminished his quality of life and impaired his physicalability to hunt professionally or to perform other farming tasks on his extensive farms which were operated under Blauaukrantz Farming Enterprises (Pty) Ltd. Himself, his wife and his children were directors of the company. He was trading in the company name and operating a business account but it was clear that the manner in which he operated the business was as if he was trading for his own account.

His farm’s hunting expeditions were not just the biggest in the Eastern Cape but probably the biggest nationally as he would attract vast amounts of foreign hunters to his farm. The appellant was someone who took his personal fitness seriously and would undertake farming and hunting activities on his rugged terrain farms with ease, yet after the accident his injuries couldn’t allow him to do the same. He averred that his past and future earningsand earning capacity had henceforth been diminished because of the injuries and wanted the Road Accident Fund to compensate him for his patrimonial losses.

Our law claim for damages is assessed from an objective test approach which looks at thewhat could reasonably be expected to be the consequence of a specific damage-causing event. Although this is the subjective test qualification is applied in exceptional cases with established case law supporting this approach which looks at specific qualifying circumstances of the plaintiff.

The Rudman v Road Accident Fund case provides an opportunity to look at whether the subjective approach can be assessed and applied in damages claims. Mr Rudman arguedthat his specific circumstances as a hunter and farmer should be considered as central focal points when assessing his claim for loss of earning and earning capacity while the Road Accident Fund contended that the objective approach should be applied when assessing Mr Rudman’s claim for damages/loss as it focuses on what losses/damages a reasonable person would have suffered rather than what someone in Mr Rudman’s specific societal/financial position would have suffered.

The Court aquo LPL4802 : 

The trial court dismissed the claim for past loss of earnings and loss of earning capacity citing that that evidence before the court only proved that any interim losses suffered due
to the halted or decline in revenue that would have otherwise been generated by the professional hunting activities were losses to the company not to Mr Rudman and therefore does not represent a diminution in the patrimony of Mr Rudman. The trial court granted him a mere R100 000.00.

The court also held that as much as the plaintiff had sufficiently proved that he sustained injuries in the accident that led to a reduced earning capacity but he had failed to prove that that reduction resulted in patrimonial loss. There was no evidence to support that his patrimony was less than what it was going to be if not for the delict. It was held that the loss was to the company not to the estate of Mr Rudman but he had failed to differentiate between the two solely because it was obvious he didn’t divorce his personal assets from the company assets.

In Union and National Insurance Co Ltd v Coetzee 1970 (1) SA 295 (A), the court established that proof of a physical injury alone does not automatically mean a diminution in earning capacity; the plaintiff must prove the actual loss of income or earnings resulting from the injury.

The court re-inforced the importance of identifying whether the damage is a damnume emergens ( which is the actual losses or expenses that have already occurred as a direct result of a wrong or injury) or a lucrum cessans ( which is the loss of potential profits or income that a person would have earned but for the wrongful act or injury)

The Supreme Court of Appeal: The court of appeal had to determine if a claim for damages must be solely assessed objectively or if qualifying subjective factors can be applied if it was found to be appropriatein the Rudman case. 

It must be noted that in using the objective approach the courts apply precedents and comparative methods in quantifying and granting compensation for damages, which ultimately sets a benchmark that help to eliminate inflated and exaggerated claims.

The appellant’s legal team argued that Rudman’s earning capacity generated by hard farming labor and professional hunting were assets in his personal estate with measurable monetary value that has since been reduced by Mr Rudman’s bodily impairment. That is to say if but for the delict the patrimony would be higher because of continued active hunting and farming.

The SCA dealt with the principle that was applied in the Dippenaar v Shield Insurance Co Ltd and held that in our South African law under the lex Aquilla, the defendant must compensate the plaintiff on the difference between the plaintiff’s value of his estate before and the value of the plaintiff’s after the commission of the delict. 

LPL4802 Key Determinations of the SCA

1. Loss of earning should not be generalized but be viewed in context. That the plaintiff’s delictually affected personal and subjective impacts be factored when assessing the loss. 
2. This translates to the recognition of a plaintiff’s professional skill and that it should be factored in the claim.
3. This also means the court recognized that loss of earning capacity is compens able where the plaintiff’s ability to work has been diminished or impaired, even if their actual income remains unchanged. In re: Union Government (Minister of Railways and Harbours) v Warneke 2 the court held that the capacity to earn money is considered to be part of a person's private estate and any loss or impairment of that capacity constitutes a loss, if such loss diminishes that person’s estate. In terms of Roman law, which we inherited, prescribes that property came to mean the universitas of the plaintiff's rights and duties, and the object of the action was to recover the difference between the universitas as it was after the act of damage, and as it would
4. The court held that a balance should be struck between the objectivity and subjectivity of the damage assessment in order to adjust the compensation to be inline with the plaintiff’s unique circumstances. This meant that although the objective approach is the primary and dominant approach in assessing damage claims, but the courts must be flexible enough for some subjective deviation to accommodate unique plaintiff’s circumstances.