In the June 2021 judgement of Chantell Martin v Road Accident Fund, the court decided that gratuitous or benevolent payments, received by an injured claimant from her husband, should not be taken into account in the calculation of that person’s damages for loss of earnings.
The accident occurred in 2015, and the RAF had conceded the merits in 2019. At the commencement of the trial on quantum only, it was recorded that the parties had settled the aspects of general damages, future loss of earnings and future medical expenses.
The claimant had previously been in the employ of her husband, in a half day position, which she was unable to continue to fulfil as a result of the injuries sustained in the accident. Both the claimant, and her husband, gave evidence that these payments did not constitute a salary, but were ongoing payments, made by his car sale business, purely out of sympathy. The judge noted that since the husband was driving the motor cycle conveying the claimant at the time of the accident, this sort of benevolence was hardly surprising. Subsequent to the claimant being unable to continue working, due to her injuries and pain, the company had been forced to employ another individual to fill her role.
It appeared that IRP5 forms had been submitted in respect of the claimant reflecting the payments until 2020, and the RAF considered that these payments constituted a salary.
The experts had agreed that the severe injuries to the claimant’s leg had rendered her functionally unemployable, and the clear and uncontroverted evidence of both the claimant and her husband was that she was no longer capable of working and rendering the services to the company that she previously had done.
The court therefore held the view that these payments, as reflected in the IRP5 submissions up until 2020, were nothing more than gratuitous payments, made out of sympathy and benevolence, and did not amount to salary.
The court referred to Santam Versekeringsmaatskappy Bpk v Byleveldt 1973 (2) SA 146 (A) and the English case of Parry v Cleaver 1970 A.C. 1, and quoted Lord Reid:
“It would be revolting to the ordinary person’s sense of justice, and therefore contrary to public policy, that the sufferer should have their damages reduced so that they could gain nothing from the benevolence of friends or relatives or of the public at large and that the only gainer would be the wrongdoer.”
Furthermore, the court made reference to the more recent judgement of BEE v Road Accident Fund 2018 (4) 366 (SCA), and its approval of the Santam matter aforesaid, that:
“if, out of benevolence, an employer allows an injured employee to return to work and to perform such limited tasks as they are able to do, and continues to pay the salary, the injured employee is not obliged to deduct such a salary when quantifying the loss of earnings.”
The court in BEE then continued as follows:
“The fact that a ‘salary’….paid to an injured employee out of benevolence, is recorded in a company’s financial records as a salary rather than a donation is neither here nor there. I should think it extremely likely that a company which pays an injured employee a benevolent salary would record that amount as a salary, deduct employee’s tax and so forth…….it may have suited the employer to treat their benevolence as salary for services rendered since they could record payments as a business expense in the books.”
The court in the current matter could find no reason not to accept the uncontested evidence of the claimant and her husband that the payments made to the claimant were gratuitous, and as such, did not fall to be deducted from the quantification of her damages for past loss of earnings.