THE SUPREME COURT OF APPEAL
REPUBLIC OF SOUTH AFRICA

JUDGMENT

Case No: 279/08

DR ROY BANE

First Appellant
DR K MICHALOWSKI

Second Appellant
DR HAYHURST

Third Appellant
DR BOWDEN

Fourth Appellant
DRS MORTON & PARTNERS

Fifth Appellant

and

MARCO D'AMBROSI

Respondent

Neutral citation:   Bane v D'Ambrosi (279/08) [2009] ZASCA 98 (17

September 2009).

Coram:
BRAND, JAFTA, MAYA JJA et HURT, LEACH AJJA
Heard:
7 MAY 2009

Delivered:
17 SEPTEMBER 2009

Summary:  Delictual damages - measure of – Plaintiff claiming loss of
earnings which would have accrued in United Kingdom – Plaintiff, as a result
of delict unable to work in United Kingdom and remaining in South Africa –
adjustment to measure of loss in sterling currency to allow for lower cost of
living in South Africa.

_____________________________________________________________

ORDER
______________________________________________________________

On appeal from: High Court, Cape Town (Van Zyl J and subsequently
Traverso DJP sitting as court of first instance).

1.
The appeal succeeds to the extent set out below:
1.1
Paragraph (b) of the order made  by the court below on 31 January
2008 is amended to read:
'(i)
The value of the plaintiff's net past loss of earnings will be the difference
between GBP128 714 and ZAR 791 835;

(ii)
The value of the plaintiff's claim for future loss of earnings will be the
difference between GBP578 884 and ZAR 3 911 705;
(iii)
The exchange rate will be the one prevailing at noon on the date of payment.'
1.2.
Paragraph (c) of the said order is amended to read:
'Interest at the rate prescribed in terms of s1 of the Prescribed Rate of Interest Act,
55 of 1975, is payable by the defendants as follows:
(i)       on the amount of  R1 189 253,09 (past hospital and medical expenses) from
17 March 2004 to 31 January 2008;
(ii)     on the amount of R400 000 (general damages) from 20 August 2007 to 31
January 2008;
(iii)      on the expenditure incurred by the plaintiff, during the period between 6 April
2004 and 31 January 2008, on items categorised in the pleadings as 'future medical
and hospital expenses', from the date on which such expenditure was incurred to 31
January 2008;
(iv)    on the capital amount of R2 434 630.09 (being the sum of the awards in
respect of past and future hospital and medical expenses and general damages)
from 31 January 2008 to date of payment;
(v)     on the capital amount of the awards for past and future loss of earnings as
determined in paragraph (b) hereof, from 31 January 2008 to date of payment.'

2.
Save as aforesaid the appeal and the cross appeal are dismissed.
3.
The respondent is ordered to pay the appellants' costs of appeal and
the costs of the cross-appeal.

______________________________________________________________

JUDGMENT
______________________________________________________________

HURT AJA (BRAND, JAFTA, MAYA JJA et LEACH AJA concurring):

[1] 'The figure of justice carries a pair of scales, not a cornucopia.'1 The
principal issue in this appeal is whether the Cape High Court used the correct
notional implement in assessing its awards to the respondent for loss of
earnings and for future medical expenses in a claim for damages based on
negligence.  The respondent instituted action against the appellants claiming
damages flowing from various negligent acts by the appellants in the course
of rendering medical and surgical services to him. The appellants conceded
liability to compensate the respondent and the action proceeded on the issue
of quantum only. Van Zyl J was asked to decide certain legal issues on the
basis of a stated case to enable the parties to narrow the ambit of the
evidence which would be necessary. These issues having been ruled on, the
matter came before Traverso DJP who made an   award in respect of past
hospital and medical expenses, general damages and costs on 20 August
2007 and a further award (after directing that an actuary determine the
quantum of the claims for future medical expenses and future loss of
earnings) on 31 January 2008. Leave to appeal and to cross-appeal against
the judgments of both judges was granted by Traverso DJP.

[2] Compared to the complicated course followed in the litigation, the
issues in the appeal and cross-appeal are refreshingly narrow. To put them in
context it is necessary to sketch the factual background against which the
respondent made his claim. I think it is fair to say that the following was
common cause when the matter was argued before us. The respondent was
born in 1975 and, after completing his schooling and qualifying in various
training courses, he started work as a salesman for the office equipment
supplier, Canon, in Cape Town. He proved to have exceptional ability in this

1 Per Greenberg J in Innes v Visser 1936 WLD 44 at 45 to 46.

field. He was described by an erstwhile superior as having 'innate sales ability'
and outshone the majority of his co-employees. In 2000 he decided to
emigrate and applied for several posts in the United Kingdom. He attended a
number of interviews pursuant to these applications and received a large
number of job offers. He eventually accepted a position as an office
equipment salesman with the company Ikon, which is Canon's biggest
competitor in London. He planned to depart for London in January 2001 but,
since he had been experiencing persistent heartburn for some time, he
decided, in December 2000, to take medical advice with a view to curing the
condition. The advice was that he should undergo surgery to treat an
oesophageal hernia. He took this advice with catastrophic consequences as
far as his health and physical ability are concerned. It is not necessary to
outline these consequences because they have been carefully and
exhaustively dealt with in the proceedings in the court below and were not in
issue before us save in one very limited respect. It will suffice to say that the
medical and surgical treatment to which the respondent was subjected so
damaged him that he was constrained to cancel his plans to take up
employment with Ikon and, instead, decided to stay in South Africa to be near
to his family.

[3] The awards for loss of earnings involved a pounds sterling conversion.
That for past loss of earnings was to be the difference between £160 893 and
R791 835 and the future loss was fixed at the difference between £723 605
and R3 911 705, the exchange rate for both these conversions to be the one
prevailing at noon on the date of judgment.  On the claim for future medical
expenses, Traverso J made an award of R845  377.

[4] The first issue on appeal concerns the question whether the award for
loss of earnings should incorporate a deduction based on the circumstance
that the cost of living in South Africa is lower than that in London (I shall refer
to this as 'the cost of living adjustment'). The second relates to the award of
future medical expenses, the appellants' contention being that the
respondent's compensation under this head should be limited to the present
day value of the additional premiums which the respondent is now, and will in

future be, obliged to pay to his medical aid  because he is classified as a
chronic sufferer. The cross-appeal relates to whether Traverso DJP should
have made allowance, in her assessment of loss of future earnings, for future
increases in income and to whether the appellants should have been ordered
to pay interest on the award from the date of service of the summons upon
them.

The Awards for Loss of Earnings.
[5] It is common cause between the parties that the respondent would, but
for his misfortune, have lived and worked in London. Nor is there any dispute
as to the computation of the past and future loss of earnings as actuarially
discounted to their 'present-day values'. The appellants' complaint is that the
court below, in assessing the notional earnings in pounds sterling and
deducting therefrom the post-injury earnings in Rand (with an appropriate
directive as to the exchange rate to be applied), failed to take into account the
fact (both admitted and proved in evidence) that there is a substantial
difference between the cost of living in London a       nd that in South Africa.
Without taking this into account, so the appellants contend, the respondent is
receiving the benefit of the higher salary which he would have received in
London, without having to cope with the increased cost of living that would
have been his lot if he had had to live there to earn it.

[6] To discuss the merits of this submission it is convenient, first, to trace
its course through the court below. After pleadings had closed and the parties
had complied with the prescribed pre-trial procedures, the appellants (as
defendants) admitted their liability to compensate the respondent, leaving as
the remaining issue in the trial the quantum of such compensation. Counsel
were apparently able to reach agreement on a number of the issues relating
to quantum, but remained at odds in regard to the questions of loss of
earnings and future medical expenses.

[7] Having thus considerably narrowed the issues between them, counsel
agreed to submit a stated case to the court in terms of rule 33(1). I have little
doubt that they jointly considered that the procedure which they adopted in

this regard was the most expeditious one and one which was in the interests
of their clients, but it was not in accordance with the rules and could have
resulted in prejudice to one or other (or perhaps both) of the parties. The
stated case was divided into two parts, the one relating to the issue
concerning the cost of living adjustment and the other to the issue concerning
future medical expenses. Each section contained an introductory paragraph
prefaced by the heading 'Factual Assumptions' and the words:
'The Court is requested to determine the legal issue on the basis of the following
factual assumptions (without any finding by the Court or concession by the parties
being made in this regard) . . .'
Rules 33(1) and 33(2) make it clear that the resolution of a stated case
proceeds on the basis of a statement of agreed facts. It is, after all, seen as a
means of disposing of a case without the necessity of leading evidence. The
case drafted by the parties, with both of them reserving their position with
regard to the factual 'assumptions', was plainly contrary to the basic object of
the rule and the procedure of asking the court to rule on the issues thus
defined was really tantamount to asking the court to give advice on possibly
abstract questions. In my view, Van Zyl J should have declined to rule on the
issues until each party had unequivocally accepted that it was bound by the
facts stated. Nevertheless, the learned judge grasped the nettle. Having
considered the arguments presented to him, he rejected the contention that
the cost of living adjustment should be taken into account for the purpose of
computing the claim for loss of earnings. At most, he said, the potential saving
in cost of living expenses might be relevant for the purposes of assessing
general damages or 'determining contingency deductions'.

[8] In argument before the court below, it seems that counsel tended to
focus on matters such as 'currency nominalism'2 and the relevance of a
plaintiff's standard of living and lifestyle to the computation of his loss of
earning capacity. The reasons for the conclusion reached by the learned
judge appear, I think, from the following passages in his judgment:

2 See paras 15 to 17 of the judgment of Van Zyl J, now reported as D'Ambrosi v Bane 2006
(5) SA 121 (C).

'However useful and interesting it may be to compare cost of living in different
countries or cities, such comparison must of necessity be based on any number of
variables. Chief among these must be the requirements and needs of the particular
individual residing and working in such country or city. He or she may choose to live
on a voluptuous or luxurious scale, spending his or her full allowance on living
expenses. On the other hand he or she may prefer to live frugally with a view to
saving as much as possible. Any attempt to quantify such living expenses would
inevitably be of a speculative or hypothetical nature, based, as it is, on uncertain and
frequently indeterminate factors.3
. . . . There are, in my view, no grounds clearly justifying the treatment of reduced
cost of living expenses as a benefit to be taken into account in assessing damages
for lost earnings. Nor do I believe that justice, fairness, reasonableness or policy
considerations require that it be so treated . . . At best for the defendant (sc
'appellants') it is a collateral benefit, which is irrelevant for purposes of determining
the quantum of loss of earnings or earning capacity.'4
The ruling which the learned judge made, read as follows:
'The cost of living differential between Johannesburg and London should not be
taken into account in assessing the plaintiff's claim for past and future loss of
earnings or earning capacity.'
Although he had mentioned, in the course of his judgment, that comparative
living costs might justify a contingency adjustment in the overall claim, I think
that the clear terms of the above ruling should be taken to have overridden
any such suggestion.

[9] The appellants gave notice of an application for leave to appeal against
this ruling, as well as against the one concerning future medical expenses.
After discussion, however, counsel agreed that the application would be
deferred until after judgment had been delivered in the action and it seems
that it was on this basis that counsel agreed that the evidence of the
appellants' witness, Dr C P van Walbeek, would be adduced before Traverso
DJP.5 Traverso DJP took the view (whether correctly or incorrectly, it is not

3 Para 35.
4 Para 39.
5 This agreement, I may say, was fortunate since its result was that evidence which, in my
view, is plainly relevant to a proper assessment of the claim for loss of earnings was placed
before the trial court notwithstanding the ruling on the 'stated case'.

necessary to decide) that she was bound by the ruling and did not consider
van Walbeek's evidence in arriving at her conclusion as to the amount to be
awarded.

[10]  The contentions, alluded to by Van Zyl J in his judgment, against the
proposition that the evidence relating to the cost of living adjustment should
be considered for the purpose of assessment of loss of earnings fell, broadly,
into three categories. The first was the theory of 'currency nominalism' to
which reference was made in paras 15 to 20 of the judgment. The second
was that any attempt to compute the effect which differences in cost of living
might have on a London salary as opposed to a South African one would be
so beset by imponderables and speculation that it would be worthless.6 The
third was that the 'reduction' in the respondent's cost of living due to the
circumstance that he would not be moving to London, should not be treated
as a 'collateral benefit' which fell to be deducted from his loss.7

[11]  I do not consider that the principle of currency nominalism has anything
to do with the enquiry. Indeed, as Mr van Riet, who appeared for the
appellants, was at pains to point out, the parties were ad idem  that the past
and future loss of earnings should be assessed in pounds sterling and that the
resulting figure should be converted to rand at a fixed date. In the
circumstances, this principle had no bearing upon the appellants' contentions.

[12] The respondent's contention that it was futile to attempt to quantify the
effect which a difference in cost of living might have on a particular individual
because of differences in the lifestyle of individuals and the imponderables
associated with any attempt to predict the vagaries of economic parameters
such as cost of living, price indices and the like, plainly found favour with the
learned judge. The contention is, however, flawed in two respects. First,
because the computation of compensation for the loss of earnings must focus
on a plaintiff's earning capacity, what he does with his money after he has
earned it can hardly be relevant. Put into bluntly commercial terms, the

6 Paras 21 to 24, 38 and 39.
7 Paras 27 to 30, 32 to 34 and 39.

computation is about turnover, not profit. Secondly, the fact is that the courts
habitually have to grapple with problems of this nature where resort must be
had to estimates and speculation in order to arrive at a figure which the court
considers to be as fair as possible to both sides. This is clear from the well-
known and much-quoted dictum by Nicholas JA in Southern Insurance
Association Ltd v Bailey NO:8
'Any enquiry into damages for loss of earning capacity is of its nature speculative,
because it involves a prediction as to the future, without the benefit of crystal balls,
soothsayers, augurs or oracles. All that the Court can do is to make an estimate,
which is often a very rough estimate, of the present value of the loss.
It has open to it two possible approaches.
One is for the Judge to make a round estimate of an amount which seems to him to
be fair and reasonable. That is entirely a matter of guesswork, a blind plunge into the
unknown.
The other is to try to make an assessment, by way of mathematical calculations, on
the basis of assumptions resting on the evidence. The validity of this approach
depends of course upon the soundness of the assumptions, and these may vary from
the strongly probable to the speculative.
It is manifest that either approach involves guesswork to a greater or lesser extent.
But the Court cannot for this reason adopt a non possumus attitude and make no
award.'
This principle applies with equal force to the manner in which a judge is called
upon to deal with any aspect of the assessment of the loss of earnings – if it is
relevant to the assessment, he or she must make the best of the material
before the court, notwithstanding that the result may well be open to criticism.
I do not consider, therefore that the difficulties associated with making an
accurate assessment can properly or justifiably be regarded as a bar to the
application of the cost of living adjustment in this instance.  If the
mathematically-based route to the assessment is effectively blocked by
unreliable assumptions and imponderables, then the judge must resort to the
less desirable alternative of applying a contingency factor or simply making an
estimate which he or she feels will do justice in the circumstances. The object
of the exercise is always to arrive at a fair award which compensates the

8 1984 (1) SA 98 (A) at 113 to 114.

plaintiff for his actual loss and does not 'punish' the defendant for his delict.
(See the judgment of Trollip JA in Santam Versekeringsmaatskappy v
Byleveldt 1973 (2) SA 146 (A) at 171 and 173 to 174.)

[13] It seems to me that it is erroneous to treat the cost of living adjustment
as a species of 'collateral benefit' – a concept which our courts have found
difficult to develop and justify along uniform and logical lines.9 As was
stressed by Trollip JA in Byleveldt, at p 173:
'[The] question is what, according to law, is the quantum of [the plaintiff's] economic
loss and not, is the defendant entitled to the benefit of any item? The defendant is
liable for neither more nor less than that quantum, irrespective of whether or not the
defendant gets any "benefit" in the process of fixing that quantum. Indeed, in that
context it is fallacious to speak about a 'benefit being conferred' on the defendant by
so reducing [the plaintiff's] loss of wages, for ex hypothesi the defendant was never
liable for the amount by which the loss is reduced . . .'
Whether one refers to a 'collateral benefit' (to the plaintiff) or a 'benefit to the
defendant' (arising from the fact that a deduction from the plaintiff's prima
facie loss is to be effected) is immaterial to the clear message in this passage
– the main exercise is to ascertain the extent of the plaintiff's actual loss.

[14] It follows from what I have said above that the grounds upon which Van
Zyl J decided that the cost of living adjustment should not be applied, did not
justify that conclusion. On the basis that she considered herself bound by the
ruling, even after Dr van Walbeek had given evidence,10 Traverso DJP
expressly refrained from considering that evidence or, indeed, the question
whether the cost of living adjustment should be made in any form. This court
is in as good a position as the court below was, to consider the evidence and
to decide whether, and to what extent, the cost of living adjustment should be
applied to the claim for loss of earnings.

9 See Zysset v Santam Ltd 1996 (1) SA 273 (C) at 278 to 279.
10 It is not necessary to consider whether Traverso DJP's view on this aspect was correct,
although I must say that if Van Zyl J would have had the power to reconsider his ruling once
the evidence had been adduced, then so did the learned Deputy Judge President.

[15] The essence of the computation of a claim for loss of earnings is to
compensate the claimant for his loss of earning capacity.11  As I have
indicated the emphasis in the argument presented to Van Zyl J by both sides
appears to have been upon the type of lifestyle and the living expenses
incurred by a typical plaintiff in the position of the respondent.12 When a court
measures the loss of earning capacity, it invariably does so by assessing what
the plaintiff would probably have earned had he not been injured and
deducting from that figure the probable earnings in his injured state (both
figures having been properly adjusted to their 'present day values'). But in
using this formulation as a basis of determining the loss of earning capacity,
the court must take care to make its comparison of pre- and post-injury
capacities against the same background. A simple example will demonstrate
where the danger lies in this regard. An employee is required to travel a
substantial distance each day in connection with his work. Instead of giving
him a separate travelling allowance or paying his travelling expenses, his
employer pays him an additional amount as salary. The amount is designed to
indemnify him against the additional expense he must incur to perform his
duties. The payment of it to him could hardly be said to be attributable to his
earning capacity. If he were to become injured and rendered unable to
perform that particular job any longer, thus dispensing with the need to travel,
he could hardly be heard to contend that the travelling allowance should be
included in the computation of his notional earnings for the purpose of
assessing his loss. To extend the concept to one a little closer to the case
under consideration: An employee is employed in South Africa and paid a
salary of RA. His employer requires him to move to London to do the same
work, but, to cater for the increased expense of living in London, fixes his
salary there at R(A+B). The employee could hardly contend that his earning
capacity had increased by the quantity B simply because he had moved to

11 Santam Versekeringsmaatskappy Bpk v Byleveldt 1973 (2) SA 146 (A) at 150; Dippenaar v
Shield Insurance Co Ltd 1979 (2) SA 904 (A) at 917; Southern Insurance Association v Bailey
NO 1984 (1) SA 98 at 111.
12 This was probably due to the manner in which the stated case was framed, viz
'That at all material times the cost of living expenses (sic) in the United Kingdom have been and will be
considerably higher than in South Africa;
That various agencies compile, on an annual basis, comparative figures regarding the relative cost of
living in many major cities around the world, which information is used inter alia to assist multinational
companies in determining cost of living allowances for expatriate or seconded workers.'

London. Once again it would be a case of the increase in salary being
primarily a form of indemnity against the extra expense which the employee
would be expected to encounter in order to maintain the standard at which he
was able to live in South Africa at a salary of RA. If such an employee were to
be the victim of a delict which rendered him unable to continue working, and if
he were consequently to return to South Africa, I do not think that it could be
contended, fairly, that the wrongdoer should be obliged to compensate him for
his loss of earnings based on the rate of his London income.

[16] The first question is whether the evidence of Dr van Walbeek was such
as to give the court a 'logical basis' for arriving at a quantitative assessment of
the effect of the London cost of living on the South African award to the
respondent. I regret to say that it was not. Dr van Walbeek's evidence was
aimed at proposing a method of formulating, quantitatively, the degree to
which the income of employees in London has been and will in future be
affected by the cost of living there and, thereafter, of factoring this into the
claim for loss of earnings so as to ensure that the respondent would not be
unduly benefited by being paid his compensation in South Africa. He
acknowledged that his approach involved a considerable amount of
speculation and, in the end, his evidence, as I understand it, left the court with
an array of suggestions as to how to co-ordinate the numerous variable
factors that are relevant to matters such as price indices, inflation and the
other ephemeral concepts in which economists deal. I do not consider that his
evidence can be treated, by any stretch of the imagination, as being
equivalent, for instance, to that of an actuary who performs his calculations on
the basis of mathematical formulae applied to fairly well-established patterns
of currency behaviour, mortality tables and the like. Although Mr van Riet
endeavoured to persuade us to use Dr van Walbeek's evidence as a basis for
calculating the degree of benefit which the respondent would derive if no
provision is made for the cost of living adjustment, I do not think that the court
should embark upon such an exercise. In other words, and applying the
second example discussed in para 16, above, there is not sufficiently cogent
evidence on which to attempt to quantify the 'B' factor in the example or, at

least, to identify the portion of that factor which could fairly be described as an
allowance to cater for the higher cost of living in London.

[17] What is clearly established by the evidence is that it is common
practice (and, indeed, the only sensible one) for companies to include a 'factor
B' in their salary structure in these circumstances. The evidence also
establishes that the same would apply to the commission structure for a
salesman such as the respondent. As I have indicated, however, the inability
to arrive at a quantitative assessment in this regard does not mean that the
court should ignore the circumstance that the loss of earning capacity is not
truly reflected by the difference between the discounted London earnings and
the South African figure. To do so would plainly be to ignore the metaphorical
scales and allow the respondent to receive more compensation than would be
necessary to make up for his lost earning capacity. In this situation, it
becomes necessary to resort to a 'contingency deduction' in an attempt to
offset any advantage which the respondent might otherwise derive from an
award in the form made by the court below. I should perhaps stress that, in so
resorting, the court can do little more than make the 'blind guess' to which
Nicholas J referred in Bailey. But at least this will have the effect of balancing
the scales to an extent and eliminating an anomaly from the computation of
the award. Traverso DJP incorporated a contingency deduction of 20 per cent
into her computation of the notional earnings in London. This was to cater for
the uncertainties associated with the respondent's prospects of making a
success of his London venture. This is a fairly robust reduction but it was
made without the cost of living adjustment in mind. In my view, a further
reduction of the notional past and future London income by 20 per cent should
go some way toward achieving a balanced award.

[18] The actuary, Mr Lowther, adjusted the computations of past and future
London earnings in accordance with directives given by Traverso DJP. He
arrived at a 'past' figure of £160 893 and a future one of £723 605. These
figures should each be reduced by a further 20 per cent, ie to £128 714 and
£578 884, respectively.

Future Medical Expenses
[19] The contention of the appellants is that since Medical Aid societies are
now statutorily obliged to accept all applicants as members13 – even those
with pre-existing health problems, they are now to be equated to national
health schemes in the English or European contexts. On the authority of
Zysset, Mr van Riet contends that the respondent's membership of the
Discovery Health Medical Scheme should no longer be regarded as a form of
'private indemnity insurance'. It could accordingly not be treated as res inter
alios acta and payments received from the health scheme should be treated
as a benefit to be deducted from the respondent's claim for future medical
expenses.14 Counsel's submission is that the claim for future medical
expenses should be restricted to the additional premiums which the
respondent will have to pay to his medical aid scheme because he is now
classified as a 'chronic sufferer'. This argument was rejected by Van Zyl J
when he ruled on the second issue in the stated case. As to counsel's attempt
to equate the statutory obligation upon medical aid societies to accept all
applicants as members to some sort of 'national health scheme' or 'social
insurance benefit', Van Zyl J pointed out that payments which the medical aid
was and is obliged to make to the respondent constitute the discharge by the
medical aid of contractual obligations flowing from the contract concluded
between it and the respondent. As such they constitute res inter alios acta
and the appellants cannot claim the benefit of them.15  I fully agree with the
learned judge's approach on this issue. Nor is there any substance in the
contention that the Medical Schemes Act has had the effect of creating
something akin to a social insurance benefit in South Africa. While it may be
obligatory for a medical scheme to accept anyone who applies to become a
member, there is no obligation on the public to take up such membership. It is
not for the appellants to dictate to the respondent as to how he should
structure his expenditure, and the fact that he is, for the present at least, a
member of a scheme does not mean that that arrangement will continue into
the foreseeable future. Moreover, it would be surprising if the scheme to

13 Section 29 (1) (n) of the Medical Schemes Act, 131 of 1998.
14 This was thoroughly dealt with by Scott J in Zysset.
15 Dippenaar v Shield Insurance Co Ltd 1979 (2) SA 904 (A) at 920; Standard General
Insurance Co Ltd v Dugmore NO 1997 (1) SA 33 (A) at 42.

which he belongs does not provide for the principle of subrogation, which will
mean that the respondent will ultimately have to transfer any compensation
paid to him by the appellants to his medical scheme. It is not necessary,
however, to explore this aspect in any greater detail. The contention that the
award for future medical expenses should be modified in any way is without
substance.

The Cross-Appeal.
[20] As indicated earlier, there are two grounds of cross-appeal against the
judgment of Traverso DJP. The first is that the learned judge failed to make
any provision for future increases in income in computing the respondent's
notional future earnings in London. The basis upon which the future earnings
were computed was that the respondent's commission income would peak at
£43 200. After the learned judge had adjourned the matter to enable the
actuary to perform the additional calculations directed by her, the
respondent's counsel raised the issue that the revised calculations made no
allowance for 'promotional increases'. As Traverso DJP pointed out, however,
the question of promotion had never been part of the respondent's case.
Having regard to the nature of the work which the respondent would have
been performing and the commission basis on which he was to be mainly
remunerated, increases in his income would flow from increased commission.
The assumption in this regard was that, after the first few years he would
consistently achieve his 'commission target'. As Traverso DJP put it in regard
to counsel's submission:
'The only room for promotion in the field in which the plaintiff would have been
working, would have been if he was promoted from salesman to manager, and this
scenario was never addressed in evidence.'
This, in my view, is a complete answer to the respondent's contention about
future increases in his London income.

[21] The second issue arising out of the cross-appeal relates to the
respondent's contention that interest should accrue on the awards made by
Traverso DJP from the date of service of the summons in the action. Mr Irish
submitted that Traverso DJP had erred in holding, as she did in relation to his

submissions in this regard, that 'interest can never be claimable in regard to
loss of earnings and/or future medical expenses'. In stating the proposition so
categorically, it seems that the learned judge may have overlooked the
provisions of s 2A of the Prescribed Rate of Interest Act, 55 of 1975, but the
issue has virtually been disposed of by concessions made by Mr van Riet on
behalf of the appellants. These are that the parties have agreed:
(a)
that the appellants are liable for interest, at the rate prescribed in terms
of s 1(2) of Act 55 of 1975, on the claim for past medical and hospital
expenses from 17 March 2004 (being the date on which the appellants were
furnished with full particulars showing how that claim is made up); and
(b)
that the appellants will pay interest, at the said rate, on any expense
actually incurred prior to the date of judgment,  in respect of any item
categorised in the pleadings as a 'future medical expense' from the date when
such expense was incurred.
It seems to me that the clearest way in which to provide for this agreement in
the order is to stipulate that these amounts are to gather interest separately
from the date agreed until the date of judgment and that they will then be
incorporated in the capital balance of the judgment debt on which interest will
be due from the date of judgment.

[22] In rejecting the contention that the other aspects of the claim should
carry interest from the date of service of the summons, Traverso DJP said:
'As this trial proved the damages suffered by the plaintiff, and the calculation thereof,
were complicated, and many of the underlying facts were only unravelled during the
course of the trial and, in addition, the plaintiff's claim was amended during the
course of the trial. . . . '
On this basis the learned judge decided that the respondent was only entitled
to interest from the date of judgment. Insofar as the claims for past and future
loss of earnings and general damages are concerned, her reasons for
declining to make the order sought by the respondent are convincing. The
lion's share of the evidence at the trial was clearly devoted to defining and
debating the principles applicable to the somewhat unusual position in which
the respondent found himself as a result of his inability to proceed with his
career plans. But Mr Irish contended that if the appellants had wished to

protect themselves against the running of interest in the face of what they
must have known would be a very substantial award (especially after they had
acknowledged liability), it was open to them to pay into court or make a tender
and the position would then have been governed by subsec 2A(4), which
provides that, in such circumstances, the running of interest is interrupted
between the date of tender and the date of acceptance or award. There is no
indication on the record that the appellants have taken a stance which has
prolonged the litigation. Indeed, it seems that the appellants did what they
could to crystallize the issues. They reached agreement with the respondent
on past medical expenses and they co-operated in trying to crystallise the
issues by way of the questionable procedure before Van Zyl J. Even if the
learned judge's attention was not particularly focused on the provisions of s
2A of Act 55 of 1975, and, more particularly subsec (5),16 I agree fully with her
reasons for declining the respondent's request in this instance.

[23] There remains one matter which I should mention before considering
the issue of costs. It relates to paragraph (b)(iii) of the order made by
Traverso DJP in connection with the exchange rate which is to apply when the
sterling currency is converted to rand for the purpose of fixing the claims for
loss of earnings. The learned judge ordered that the rate prevailing at noon on
the date of judgment was to be the rate used. Counsel are, however, agreed
that the correct rate will be that prevailing at the time of payment.

[24] As to the question of costs, the appellants have been successful on the
main issue, namely the computation of loss of earnings. It follows that they
should have their costs of appeal. The costs of the cross-appeal should follow
its result and there is no reason why the respondent should not pay the
appellants' costs in this connection.

[25] I make the following order:
1.
The appeal succeeds to the extent set out below:

16 Subsection (5) reads: 'Notwithstanding the provisions of this Act but subject to any other
law or an agreement between the parties, a court of law . . . may make such order as appears
just in respect of the payment of interest on an unliquidated debt, the rate at which such
interest shall accrue and the date from which such interest shall run.'

1.1
Paragraph (b) of the order made  by the court below on 31 January
2008 is amended to read:
'(i)
The value of the plaintiff's net past loss of earnings will be the difference
between GBP128 714 and ZAR 791 835;

(ii)
The value of the plaintiff's claim for future loss of earnings will be the
difference between GBP578 884 and ZAR 3 911 705;
(iii)
The exchange rate will be the one prevailing at noon on the date of payment.'
1.2.
Paragraph (c) of the said order is amended to read:
'Interest at the rate prescribed in terms of s1 of the Prescribed Rate of interest Act,
55 of 1975, is payable by the defendants as follows :
(i)       on the amount of  R1 189 253,09 (past hospital and medical expenses) from
17 March 2004 to 31 January 2008;
(ii)      on the amount of R400 000 (general damages) from 20 August 2007 to 31
January 2008;
(iii)      on the expenditure incurred by the plaintiff, during the period between 6 April
2004 and 31 January 2008, on items categorised in the pleadings as 'future medical
and hospital expenses', from the date on which such expenditure was incurred to 31
January 2008;
(iv)    on the capital amount of R2 434 630.09 (being the sum of the awards in
respect of past and future hospital and medical expenses and general damages)
from 31 January 2008 to date of payment;
(v)     on the capital amount of the awards for past and future loss of earnings as
determined in paragraph (b) hereof, from 31 January 2008 to date of payment.'

2.
Save as aforesaid the appeal and the cross appeal are dismissed.
3.
The respondent is ordered to pay the appellants' costs of appeal and
the costs of the cross-appeal.

_______________________
N V HURT
ACTING JUDGE OF APPEAL

Appearances:
Counsel for Appellant:
R S van Riet SC
Instructed by
MacRobert Inc, Cape Town
Claude Reid Inc, Bloemfontein

Counsel for Respondent: D F Irish SC

A D Brown

Instructed by
Fairbridge, Arderne & Lawton Inc, Cape Town
Symington & De Kok, Bloemfontein
THE SUPREME COURT OF APPEAL
REPUBLIC OF SOUTH AFRICA

JUDGMENT

Case No: 648/08
No precedential significance

ACT COMPUTERS

Appellant

and

NVM BELEGGINGS & VERSEKERINGS ADVISEURS
Respondent

Neutral citation: Act Computers v NVM Beleggings (648/2008) 94 [2009]
ZASCA (17 September 2009)

Coram:
Mpati P, Lewis, Ponnan and Snyders JJA and Wallis
AJA

Heard:
3 September 2009

Delivered:
17 September 2009

Summary:
Appeal against order to repay moneys w
+here contract found to have been vitiated by material mistake: no mistake in
fact – contract embodied in written documents accepted
orally. Appeal upheld.

ORDER

On appeal from: High Court, Free State (Beckley and Rampai JJ sitting as a
full bench).
(a) The appeal is upheld with costs.
(b) The order of the court below is set aside and is replaced with:
‘The appeal is dismissed with costs.’
JUDGMENT

LEWIS JA (Mpati P, Ponnan and Snyders JJA and Wallis AJA concurring)
[1] This appeal turns on whether a contract between the parties, who
claimed to have different understandings as to its nature, was proved on the
terms alleged by the respondent. The appellant, ACT Computers (ACT),
contends that it rendered services to the respondent, NVM Beleggings &
Versekerings (NVM), and installed equipment necessary for the services at
ACT’s premises, but that the equipment remained its property. NVM, on the
other hand, maintains that it bought the equipment – a radio antenna used for
electronic communication.

[2] NVM is an investment agent and insurance broker in Kroonstad in the
Free State. ACT, also based in Kroonstad, supplies computer equipment and
services. The dispute between the parties arose because the sole proprietor
of NVM, Mr C P Booysen, complained, over several months, that the
equipment installed by ACT was not functioning adequately and that he and

his employees were unable to gain access to the internet and electronic
databases for its business. Booysen accordingly refused to pay ACT a
monthly subscription for internet connectivity. Mr H J Knepscheld of ACT
instructed employees of ACT to remove the antenna from NVM’s premises
several months after it had been installed. There was an ancillary dispute
about the alleged removal of computer programmes from NVM computers, in
respect of which damages were claimed, but that is not before us on appeal.

[3] After the antenna was removed from NVM’s premises NVM claimed, in
the magistrates’ court, Kroonstad, the repayment of what it alleged was the
purchase price of the antenna – the princely sum of R3 687.90.  The court
granted absolution from the instance on the basis that the contract between
the parties was not proved. A full bench of the Free State High Court (Beckley
and Rampai JJ) upheld an appeal against the order, finding that there had
been an error as to the nature of the contract (error in negotio) which was
accordingly void, and that NVM was entitled to restitution of the R3 687.90
paid to ACT. ACT appeals against the order with the leave of the full bench.

[4] I shall deal first with the documents forming the basis of the contract as
pleaded by the parties. NVM itself alleged that the contract was partly written
and partly oral, attaching the written portions to the particulars of claim, and
ACT admitted that these documents were the written portions of the contract.
In my view, the documents are determinative of the dispute. They comprised
a letter attaching two quotations.

[5] On 25 August 2003 Knepscheld, on behalf of ACT, wrote to Booysen
proposing the installation of a cordless network ‘WiFi’ system for NVM. He
explained the various installation permutations and stated that because the
equipment was highly specialised, and was designed specifically for ACT, it
was not offered for sale.1

[6] The first quotation was for one ‘WiFi 100Mb Internet Link’, ‘Mounting &
Unit Installation’, ‘Panning & Fine Tune’, ‘Firewall & Routing’ and ‘Security &
Voice over IP Config’. The ‘Unit Price’ was R3 235, plus VAT of R452.90, the
total being R3 687.90. At the foot of the quotation were the words:
‘These prices are valid for 7 days only. Goods remain the property of ACT
Computers until fully paid. All goods carry a ONE YEAR carry-in warranty.’

[7] The second quotation was for internet connectivity at a monthly rate of
R570 including VAT. This quotation also carried the words stating that goods
remained the property of ACT unless fully paid for, a statement plainly
inappropriate for the monthly provision of internet connectivity. Equally plainly,
the words were printed routinely on all ACT’s quotations, irrespective of
whether they were for sales or services.

[8] Knepscheld’s evidence was that the written quotations were accepted
orally by Booysen, and the antenna was in fact installed. A tax invoice dated 8
October 2003 was sent to NVM for ‘Labour – WI-FI 100MN Internet link’ for
R3 687.90 (including VAT) and for ‘WiFi CONNECTION 08/10/03-31/10/03’

1 ‘Aangesien die toerusting hoogs gespesialiseerd is en spesifiek vir ACT opgestel word, word
dit nie te koop aangebied nie.’

for R379.68 (being for two-thirds of October). Payment by NVM of R4 515
was made by cheque to ACT on 18 November 2003. That, it appears, was in
respect of the invoice of 8 October and the monthly payment for internet
connectivity for November. NVM made no further payments to ACT.

[9] ACT workmen removed the antenna from NVM’s premises on 19
March 2004, following numerous complaints about the equipment and lack of
internet connectivity by Booysen, and constant attempts by ACT to resolve
the problems. An email sent by Booysen on the same day, 19 March, listed
the many problems that required attention and set out a suggested
readjustment of amounts claimed by ACT. Knepscheld responded, also on the
same day, questioning Booysen’s claims and stating that the only solution
was for ACT to remove the equipment (which it promptly did) and for NVM to
find another service provider in Kroonstad.

[10] NVM duly claimed the amount that it alleged it had paid for the antenna
removed by ACT. ACT’s defence to the claim was that the antenna was its
property which it was entitled to remove when it cancelled the contract with
NVM. Both Booysen and Knepscheld testified in the trial. Their versions of
what had been agreed differed as I have indicated. The trial court concluded,
because of that, that there was no contract, and therefore no breach of
contract. The court could thus, it reasoned, make no finding and granted
absolution from the instance.

[11] The high court, on appeal, came to a different  conclusion, one not
advanced by ACT at all either in the trial or on appeal: that there was no
consensus and therefore no contract. It decided that because there were
different intentions as to the nature of the contract and its terms, the contract
was vitiated by error and that NVM was entitled to restitution of its payment of
R3 687.90.

[12] On appeal to this court NVM confirmed that the letter and quotations
set out the terms of the contract and were accepted orally by it. The only
argument advanced in support of its case was that the statement at the foot of
the quotation for the equipment and installation – that goods remained the
property of ACT until fully paid for – and that payment in full had been made,
meant that the antenna had been sold to it.  But NVM also conceded that
these words, routinely used on ACT quotations, did not change the nature of
the contract, if it were for services, to one for sale. The reservation of rights in
the event of a sale clearly cannot mean that there was in fact a sale.

[13] NVM conceded also that the statement in the letter accompanying the
quotations that the equipment was not for sale clearly meant just what it said:
the equipment would be installed at the premises of NVM but would remain
ACT’s property. In my view, ACT proved that the contract was not one for the
sale of the antenna or anything else, but was rather one for the installation of
its own equipment and rendering of services. Accordingly, the trial court
should have dismissed NVM’s claim and not granted absolution from the
instance.

[14] It follows also that the decision of the court below – that there was
dissensus rendering the contract invalid, and that ACT should repay R3
687.90 to NVM – must be reversed.

[15] (a) The appeal is upheld with costs.
(b) The order of the court below is se aside and is replaced with:
‘The appeal is dismissed with costs.’

------------------------

C H Lewis
Judge of Appeal

Appearances:

For the Appellant:

P J T de Wet

Instructed by:

Grimbeek van Rooyen & Vennote

Kroonstad

Symington & de Kok

Bloemfontein

For the Respondent:
J Y Claasen SC

Instructed by:

Thabo Grimbeek

Kroonstad

Naude Attorneys

Bloemfontein