The legal basis for the entitlement of persons, to claim from the Road Accident Fund (RAF) due to the death of or bodily injury to any other person, is the existence of a legal duty of the deceased or injured person to support the claimant, without which
In terms of the Assessment of Damages Act, No 9 of 1969, insurance money and pensions are not deductible from a loss of support claim. Income or interest accrued as a result of investment of these monies will amount to an accelerated benefit and will thus be deductible.
The RAF had conceded that the collision was caused by the negligence of its insured driver and that it was liable to the Appellants for whatever loss of support they proved. In the court a quo, Bozalek J absolved the RAF from the instance as the appellants had failed to establish that their reasonable maintenance needs could not be met by the proceeds of the deceased father's estate.
The deceased parents were married out of community of property. The deceased father owned a farm and derived income from his farming activities as well as a small transport business. The deceased mother also generated a small income by way of selling items of pottery as well as milk and meat products on the farm. Six months before their untimely death the deceased parents executed a joint will, which provided that in the event of their simultaneous demise they would bequeath both their estates to a testamentary trust to be created for the benefit of their children. The will authorised the trustees to utilise as much of the income and capital assets of the trust as they regarded necessary, in the exercise of their absolute discretion, for the maintenance, upbringing, education and other interests of the children. It was further stipulated that the testamentary trust would be dissolved when the youngest child turned 21. The nett assets of the estates of the deceased parents, which eventually devolved into the trust, amounted to R2,2 million, which included the proceeds of insurance policies in the amount of R1 683 281. The non-insurance portion of his estate including his farm, shares in Orange River Wine Cellars Co-op Ltd and his farm implements and equipment, which were valued at less than R500 000, subsequently sold for almost R1,5 million in 1999.
The affairs of the trust were well managed and as a result the assets of the trust grew steadily towards the end of February 2010 to an amount of about R7,4 million, that was over and above the R1,97 million that had been expended over the years for the benefit of the applicants. In Lambrakis v Santam Ltd 2002 (3) SA 710 (SCA), the court found that any benefits coming to a child under a parents' estate must first be exhausted before a claim for maintenance may be considered. The court further found that the object of a claim for loss of support was to compensate claimants for material loss and not to improve their material prospects.
The appellants contended that the loss suffered by them as a result of their father's death should be reduced by 43,6% of the R1,97 million that they actually received from his estate via the trust. This was calculated on the basis that the total net capital received by the trust was R2 983 797, which left the non-insurance component at 43,6%. The question the SCA was faced with was whether the maintenance actually paid to the appellants could be covered by the non-insurance part of the trust assets. More relevant for that purpose is the purchase price actually received from those assets instead of the notional market value at some stage in the past indicated in the liquidation and distribution account.
The appellants Counsel conceded that from 1999 to 2001 the trust received an amount of R1,5 million together with interest in an amount of R270 000 from the sale of the farm and other moveables. That in itself would prima facie be sufficient to cover the maintenance payments. The trust was also the owner of a flat valued at R650 000 that was occupied by the appellants grandmother from which no income had been received by the trust. After all maintenance needs of the appellants had been met there was still an amount of about R7,4 million left in trust. Brand JA found that the sheer magnitude of the remaining amount supported the conclusion that the non-insurance part of the deceased father's estate was more than sufficient to provide the maintenance that the appellants actually received. In the absence of any exact actuarial calculations, the SCA adopted the more cautious approach as followed by the court a quo, to absolve the respondent from the instance rather than to dismiss the appellants' claims.
Get the latest issue of FAnews