THE SUPREME COURT OF APPEAL OF SOUTH AFRICA

JUDGMENT

Not reportable
Case No: 653/2016

In the matter between:

URSHA YVONNE FOURIE

APPELLANT

and

RONALD BOBROFF & PARTNERS INC

RESPONDENT

Neutral citation:  Fourie v Ronald Bobroff & Partners Inc (653/2016) [2017]
ZASCA 91 (7 June 2017)

Coram:
Cachalia, Saldulker and Van der Merwe JJA and Coppin and

Schippers AJJA

Heard:
17 May 2017

Delivered:
7 June 2017

Summary:
Attorney: duty of an attorney to client: breach of mandate in
respect of claim for damages for loss of earning capacity: damages not
proved: absolution from the instance should have been ordered: appeal
dismissed.

______________________________________________________________

ORDER
______________________________________________________________

On appeal from: Gauteng Local Division of the High Court, Johannesburg
(Weiner J sitting as court of first instance):
1 The order of the court a quo is varied by substituting the dismissal of the
appellant’s claim with an order of absolution from the instance.
2 Save for paragraph 1 above, the appeal is dismissed with costs, including
the costs of two counsel.
______________________________________________________________

JUDGMENT
______________________________________________________________

Van der Merwe JA (Cachalia and Saldulker JJA and Coppin and
Schippers AJJA concurring):

[1] The appellant, Ms Ursha Yvonne Fourie, instructed the respondent,
Ronald Bobroff & Partners Incorporated, to claim damages from the Road
Accident Fund (the RAF). Action was instituted against the RAF, but the
matter was settled. The issues in this appeal are whether the respondent
breached its mandate by failing to pursue a claim for loss of earning capacity
in respect of the appellant and by undersettling the claims for general
damages of the appellant and her minor son. They arose in the circumstances
set out below.

[2] On 27 June 2005, the appellant, her husband (Mr Fourie), their son
Lincoln (born on 12 November 1997) and their daughter Cayleigh (born on 26
August 2004) were involved in a motor vehicle collision that had tragic
consequences. As a result of injuries sustained during the collision, Mr Fourie
died on the same day and Cayleigh passed away about a month later on 27
July 2005. The appellant sustained physical injuries consisting of fractured
ribs, a soft tissue neck injury, a soft tissue injury to her right shoulder, a
clavicular fracture, haematomas to her right upper and lower leg and an

abdominal injury. She was admitted to hospital on the date of the collision,
where she remained until 8 July 2005. Lincoln suffered soft tissue injuries to
his neck, back and kidneys. He was examined in hospital immediately after
the collision and sent home. Both the appellant and Lincoln of course suffered
emotional distress and pain as a result of the loss of Mr Fourie and Cayleigh.

[3] During August 2005 the appellant instructed the respondent to claim
damages on her and Lincoln’s behalf from the RAF. The respondent
specialises in personal injury claims. Since approximately the middle of 2007,
Ms Philippa Jane Farraj, an attorney of some ten years’ experience employed
by the respondent, handled the matter. Summons against the RAF was
issued during August 2007. The particulars of claim included claims by the
appellant for loss of support, loss of income and general damages for pain
and suffering, disability and loss of amenities of life, as well as claims on
behalf of Lincoln for loss of support and general damages. The case was
eventually set down for hearing on 1 August 2011.

[4] Approximately ten days before the trial date, Ms Farraj briefed counsel
to appear for the appellant. By that time she had obtained medico-legal
reports from Dr A Matisson (radiologist), Dr G Read (orthopaedic surgeon), Dr
L Fine (psychiatrist), Ms M Ledwaba (occupational therapist) and Ms S Shaik
(industrial psychologist). She had also obtained a report from an actuary, Mr
Ivan Kramer. The RAF, in turn, obtained medico-legal reports from Prof
Schepers (orthopaedic surgeon), Prof M Vorster (psychiatrist) and Mr S van
Huyssteen (industrial psychologist).

[5] Mr Kramer only made calculations in respect of the claims for the loss
of support. His report to the respondent was dated 8 July 2011. The
calculations were made on the assumption that the appellant was
unemployed and, had the accident not occurred, would never have been
employed. He therefore calculated the loss of support from the date of the
accident. Ms Farraj did not procure an actuarial calculation for the claim for
loss of earning capacity.

[6] During the last couple of days before the trial date, Ms Farraj decided
not to pursue the appellant’s claim for loss of earning capacity. She explained
in evidence how she had reached this conclusion.  At the time of his death, Mr
Fourie earned a salary of R11 066 per month. Applying contingency
deductions to Mr Kramer’s calculation of the appellant’s claim for past and
future loss of support, Ms Farraj arrived at the figure of R824 997. As I have
said, the basis of that calculation was that the appellant would never have
been employed. Ms Farraj then made what she termed a ‘crude’ calculation of
the claim for loss of earning capacity.

[7] The crude calculation amounted to this. By 1 August 2011, the
appellant’s monthly salary amounted to R36 521. Ms Farraj accepted that the
appellant would have continued working until she reached the age of 62½
years, that is, for another 18½ years. She multiplied the amount of R36 000
(the appellant’s salary rounded off) by 12 months to reflect her annual income
and multiplied that by 18½ years. That calculation gave a figure of
approximately R7,9 million, taken as R8 million. She then made a deduction
of 50%, to provide for capitalisation. She assessed the appellant’s loss of
earning capacity at 10% and thus calculated that the appellant could recover
approximately R400 000 for loss of earning capacity. She concluded that it
was more favourable for the appellant to pursue the claim for loss of support.

[8] By then the attorney for the RAF had made an offer of settlement in the
amount of R1 million. For reasons that are difficult to fathom in light of the
medico-legal reports available to it, the RAF made the offer on the basis that
the appellant was unemployed and would remain unemployed for the rest of
her life. On 29 July 2011, Ms Farraj and counsel consulted with the appellant
for about an hour. The appellant rejected the offer of R1 million but gave a
mandate to the respondent to settle the action for an amount of between R1,6
and R1,8 million.

[9] On the same day, the attorney for the RAF offered to settle the matter
by payment of the following:

Loss of support in respect of the appellant
R    838 804,60
Loss of support in respect of Lincoln                            R    323 509,00
Past medical and hospital expenses (appellant)           R      61 947,46
Past medical and hospital expenses (Cayleigh)           R    283 549,55
General damages (appellant)                                       R    200 000,00
General damages (Lincoln)

R      70 000,00
Total

R1  777 810,50
The offer was accepted on 29 July 2011 and the settlement was made an
order of court on 1 August 2011.

[10] The appellant soon became dissatisfied with the settlement. On 27
September 2012 she caused summons to be issued against the respondent.
As I have said, the appellant alleged that the respondent had breached the
mandate given to it by failing to pursue her claim for loss of earning capacity
and by accepting inappropriately low amounts for general damages in respect
of herself and Lincoln.

[11] In amended particulars of claim the appellant alleged that she should
have been awarded the amount of R650 000 for general damages and that
Lincoln’s general damages should have been assessed at R350 000. She
further alleged that her claim for loss of earning capacity had been worth more
than R5 million. The appellant maintained that she was nevertheless entitled
to retain the amount of R838 804,60 that she had received for loss of support
in terms of the settlement. She thus claimed payment of the amount of
R5 777 108 from the respondent.

[12] The matter went to trial before Weiner J in the Gauteng Local Division,
Johannesburg. She dismissed the appellant’s action with costs, including the
costs of two counsel, but granted leave to appeal to this court.

[13] The contract entered into between the appellant and the respondent
was one of mandate. It is settled law that it was an implied term of the
contract that the respondent was obliged to exercise the skill, knowledge and
diligence expected of an average attorney that specialises in personal injury

claims.1 A plaintiff suing for damages resulting from breach of a mandate is
entitled to positive interesse, that is, payment of damages that places the
plaintiff in the position that he or she would have been had the mandate been
properly executed. Thus, the question is whether the appellant proved the
alleged breach of the mandate as well as the amount she would have
recovered from the RAF had the mandate been properly performed.

[14] The claim that the respondent breached the mandate in respect of the
amounts accepted for general damages, may be dealt with briefly. The
assessment of general damages is no exact science and is notoriously
difficult. The amounts were accepted on the advice of experienced counsel.
The analysis of comparable cases by the court a quo, which I find
unnecessary to repeat, indicated that the amounts fell within reasonable
bounds.

[15] I therefore turn to the appellant’s case in respect of loss of earning
capacity. This requires an analysis of the evidence available to Ms Farraj on 1
August 2011, in respect of the employment record and the intentions of the
appellant before the accident and her employability thereafter. After the
appellant had obtained a diploma in accounting, she worked as an accountant
for a number of employers. She left her employment when she became
involved in the Church of Jesus Christ of Latter-Day Saints (the Church).
Before Cayleigh’s birth the Church regularly appointed her on contract to do
accounting work in respect of specific projects. But for the accident, she would
have continued doing contract work for the Church until Cayleigh was four or
five years old. She would have taken up fulltime employment by 2009 or
2010. She would have worked for the rest of her working life. As it happened,
she was employed by the Church on contract since December 2005 and on
fulltime basis from 1 October 2006. On 1 August 2011 she was still so
employed, but intended to leave the employment of her own volition to
operate a franchise for teaching mathematics to children.

1 See Mouton v Die Mynwerkersunie 1977 (1) SA 110 (A) at 142H.

[16] During the trial the respondent introduced actuarial calculations made
by Mr G A Whittaker. The appellant disputed the assumptions in respect of
her employability on which the calculations were made, but otherwise
accepted the correctness of the calculations. Mr Whittaker calculated that
upon adjustment of Mr Fourie’s earnings in line with inflation, it would, on 1
March 2011, have amounted to R15 721 per month. By then, as I have said,
the appellant earned R36 521 per month. It follows that save for a claim for
loss of support in respect of the period up to 2009/2010 when she would not
have been employed on fulltime basis, the appellant suffered no loss of
support. Mr Whittaker calculated this claim for loss of support over a longer
period, namely from the date of the accident to 1 August 2011 and on the
basis that she had no income during that period.  He concluded that it
amounted to R20 476, before deduction of contingencies. In respect of the
period after the appellant would have taken up employment again, she could
therefore only have a claim for loss of earning capacity.

[17] I therefore proceed to analyse the expert reports in respect of loss of
earning capacity available on 1 August 2011. Dr Read said that it was
reasonable to expect that even after the orthopaedic treatment he had
recommended, the appellant would have had a 10 to 15% continued loss of
productivity, without taking into account the psychological sequelae of the
accident. He added:
‘As to how this will affect her future income and employment potential, I defer to the
opinion of the relevant experts in this field, also taking into consideration the
psychological trauma she has experienced.’
His counterpart, Prof Schepers, did not dispute this. He said that it was
possible that the appellant’s productivity could have been diminished by her
ongoing neck symptoms, but that that should be verified by her employer. Prof
Vorster diagnosed the appellant with major depressive disorder. This was
confirmed by her colleague, Dr Fine, who stated:
‘Due to the severe trauma of having lost both her husband and her daughter,
psychiatric prognosis for full remission of symptoms is not favourable, and she would
be anticipated to feel some depression, worse at times, as an expression of grief for

the rest of her life. Deference is given to other opinions concerning loss of earnings
and occupational capability.’

[18] Ms Shaik expressed the opinion that but for the accident the appellant
was likely to reach the D1/D2 level of earnings on the Patterson scale by the
time she reached retirement age. As a result of the consequences of the
accident, the most likely scenario was that she would stagnate at the
Patterson C5 level, even if she received the recommended treatment and
responded positively to it. Ms Shaik summarised her conclusions as follows:
‘Based on the experts opinion in the body of this report her orthopaedic injuries
combined with her psychiatric conditions renders her as uncompetitive in the open
labour market more especially if she loses her current job. The writer is of the opinion
that post accident she documents a history of losses of earnings and difficulties
coping with her job requirements as a result of physical and emotional problems. A
full recovery from her orthopaedic injuries is not anticipated as she is likely to
experience losses in productivity and combined with psychiatric problems (deference
is given to a psychiatrist) should she lose her current job she will struggle to secure
employment and she is likely to be employed on shorter term basis. However, the
effects of the accident are likely to imply that she is unlikely to reach her pre-accident
earnings.’
This was not disputed by the industrial psychologist appointed by the RAF, Mr
Van Huyssteen.

[19] Thus, the medico-legal reports showed that the appellant had suffered
a permanent impairment of earning capacity as a result of the orthopaedic
and psychiatric injuries she had sustained. Both Ms Shaik and Mr Van
Huyssteen were of the opinion that the extent of the impairment should be
reflected in differential contingency deductions in respect of the pre- and post-
accident scenarios of calculation of earning capacity.

[20] An attorney exercising the knowledge, skill and diligence required of
the average specialist in personal injury claims, would soon have established
that the appellant earned considerably more than her husband and that save
for a brief period, she would have remained employed for the balance of her
working life. That attorney would have realised that except for a relatively

small claim for loss of support, the appellant could only have a claim for loss
of earning capacity. Simple logic dictates that claims for loss of support and
loss of earning capacity cannot for the same period be determined on
mutually exclusive factual assumptions. All of this was fairly conceded by
counsel for the respondent.

[21] A prudent attorney in the position of Ms Farraj would upon examination
of the available medico-legal reports have ascertained that the appellant did
indeed suffer a permanent loss of earning capacity. In my view this conclusion
rendered it imperative to determine the extent of the impairment. That should
have been done by agreement between the experts of both parties or by
obtaining and presenting evidence to this effect. The actuarial calculation of
the monetary value of the impairment of earning capacity should have
presented no difficulty.

[22] Ms Farraj made no attempt to have the extent of the impairment of the
appellant’s earning capacity expertly determined. She did not even consult
with any of the experts. Instead she purported to determine the extent of the
impairment by pure guesswork and compounded that by unscientific
calculations. I am of the view that this conduct materially departed from the
required standard and constituted a breach of mandate by the respondent.

[23] The next question is whether the appellant proved that she had
suffered damages as a result of the breach of the mandate. In this case this
requires proof that upon proper performance of the mandate, the appellant
would have recovered more from the RAF in respect of loss of earning
incapacity than she did recover for future loss of support. As I have shown,
this, in turn, required expert evidence of the differential contingency
deductions in respect of the position before and after the accident.

[24] Regrettably, as I shall show, the appellant bedevilled the assessment
of whether she had suffered damages. She did so by failing to pursue a case
or to present expert evidence on the extent of the partial impairment of her

earning capacity and by insisting that she was permanently unemployable in
the open market as at 1 August 2011.

[25] This proposition is devoid of any evidential basis. On 1 August 2011
the appellant had been in fulltime employment since 1 October 2006. She
intended to leave that employment to pursue the operation of a mathematics
franchise, a prospect that she was excited about. Not only did she not inform
any of the experts that she was unable to cope at work, but all of the experts
found that she was indeed employable in the open market, albeit subject to
some impairment.

[26] In her evidence the appellant confirmed the correctness of a summary
of the appraisals of her performance at work, which was presented in
evidence, together with the appraisals themselves, by a human resource
manager of the Church. These appraisals indicated that the appellant’s overall
performance during 2007 had been rated just below the required standard.
During 2008 she ‘greatly exceeded’ that standard and during 2009 she
managed to exceed it. Her performance during 2010 was rated as exceptional
and during 2011 she met the required standard. In the light of the objective
evidence, the expert reports and the admitted appraisals, the lay evidence of
Mr Rothman and Ms Harris, respectively the financial manager and a senior
bookkeeper employed by the Church, that the appellant was unemployable in
the open market, could carry no weight.

[27] The point is well illustrated by the history of the litigation against the
respondent. In the original particulars of claim it was stated that the appellant
had the capacity to earn not less than R31 000 per month as a
bookkeeper/personal assistant, but that she had lost the capacity to earn
between the ages of 50 and 60, that is, that she would have retired ten years
earlier. In an actuarial report dated 12 September 2013, which the appellant
furnished to the respondent, the appellant’s claim was based on the
assumption that she would have retired five years earlier, at age 57½  instead
of age 62½. Only during opening address in the court a quo, did counsel for
the appellant indicate that the appellant’s case was that as at 1 August 2011

she had a complete loss of earning capacity. An amendment to that effect
was effected on the following day.

[28] Mr Whittaker calculated the monetary value of the income that the
appellant would have received but for the accident as well as her expected
income as a result of her injuries. He made use of the different Patterson
levels of earning recommended by Ms Shaik in respect of the two scenarios.
He allowed a contingency deduction of 20% in respect of the first scenario. He
found that upon making a 30% contingency deduction in respect of the
second scenario, that is a 10% differential contingency deduction, the value of
the appellant’s loss of earning capacity, together with the aforesaid
approximately R20 000 for past loss of support, would be more or less the
same as the figure included in the settlement for loss of support. It follows that
the use of an appropriate higher differential contingency deduction would
have indicated that the appellant did suffer damages as a result of the breach
of the mandate.

[29] It appears probable that a 10% differential contingency deduction is too
low to accurately reflect the monetary value of the appellant’s loss of earning
capacity. And even though it is tempting to attempt to determine an
appropriate percentage, I have, after mature consideration, come to the
conclusion that an attempt by this court to do so, would amount to the same
guesswork that the respondent was guilty of.2 The same applies to the
speculative submission of counsel for the appellant that a 70% differential
contingency deduction should be applied. It follows that the appellant did not
succeed in proving that she had suffered damages as a result of the breach of
the mandate. In the result, the order of the court a quo must be varied to one
of absolution from the instance, but should otherwise remain intact. This does
not entitle the appellant to costs of the appeal.

2 See Mkwanazi v Van der Merwe & another 1970 (1) SA 609 (A) at 631E-632H.

[30] The following order is issued:
1 The order of the court a quo is varied by substituting the dismissal of the
appellant’s claim with an order of absolution from the instance.
2 Save for paragraph 1 above, the appeal is dismissed with costs, including
the costs of two counsel.

__________________
C H G van der Merwe
Judge of Appeal

Appearances:
For the Appellant:

B Ancer SC (with him A Berkowitz)
Instructed by:
Norman Berger & Partners Inc, Highlands North
McIntyre & Van der Post, Bloemfontein

For the Respondent:
D Mills SC (with him F Grobler)
Instructed by:
Gildenhuys Malatji Attorneys, Groenkloof
Honey Attorneys, Bloemfontein