THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT

Reportable
Case No: 324/2017
In the matter between:
LEON ST LEGER BOUTTELL

APPELLANT

and

ROAD ACCIDENT FUND

RESPONDENT

Neutral citation: Bouttell v RAF (324/2017) [2018] ZASCA 90 (31 May 2018)
Coram:
Navsa, Majiedt and Mbha JJA and Plasket and Hughes AJJA
Heard:
14 May 2018
Delivered:  31 May 2018
Summary: Delict - Road Accident Fund - damages – claim for loss of earnings –
prior to accident appellant contributed towards a retirement annuity fund – whether
voluntary contributions towards such retirement annuity fund can be claimed as loss
of earnings.

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ORDER
___________________________________________________________________

On appeal from: Gauteng Division of the High Court, Pretoria (Holland-Mϋter AJ
sitting as court of first instance):

The appeal is dismissed with costs including the costs of two counsel.
____________________________________________________________

JUDGMENT
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Hughes AJA (Navsa, Majiedt and Mbha JJA and Plasket AJA concurring):

[1] Mr Leon St Leger Bouttell, the appellant, an electrical engineer by profession,
was very successful in the electrical instrument and automation domain. Since March
2006 he started up and ran, as owner and general manager, two businesses, namely
Exel Electrics & Instrumentation and Le Roux, Bouttell & Associates. He was thus in
a position to dictate the manner and form of the monthly salary he drew. It appears
from the expert reports filed that he earned dividends and salary in a total amount of
approximately R4 million per year. From his gross income, he elected to make
contributions equivalent to 15% of his gross earnings to a retirement annuity fund.

[2] On 25 July 2012 and along the Kathu/Deben road, in the district of Kathu, Mr
Bouttell was involved in a motor vehicle collision. As a result of the collision he
sustained bodily injuries for which he instituted a claim against the Road Accident
Fund (the RAF), a statutory body established under the Road Accident Fund Act 56
of 1996 (the RAF Act) to administer the compensation system envisaged by national
legislation. The RAF conceded liability on the merits in favour of Mr Bouttell and the
trial on quantum was scheduled to proceed in the Gauteng Division of the High Court,

Pretoria. On the scheduled date the parties engaged in settlement negotiations and
settled all heads of damages, save for that of future loss of earnings. In respect of
future loss of earnings the parties presented argument to the court a quo based on
the pleadings before the court, together with calculations of their respective actuaries,
which they accepted to be correct. The High Court found that there is a distinction
between contributions to an employer pension fund and voluntary contributions to a
retirement annuity fund for purposes of calculating loss of earnings. In this regard it
upheld the RAF’s contentions that the contributions to a retirement annuity fund are
not to be taken into account in a claim for loss of earnings. The issue in this appeal is
whether the aforesaid conclusion is correct.

[3] Section 17(4) of the RAF Act imposes a cap on the limitation of claims for loss
of income or loss of support. It reads as follows in respect of a claim for loss of
income:
‘17 Liability of the Fund and agents
(1) The Fund or an agent shall-
. . .
be obliged to compensate any person (the third party) for any loss or damage which
the third party has suffered as a result of any bodily injury to himself or herself or the
death of or any bodily injury to any other person, caused by or arising from the driving
of a motor vehicle by any person at any place within the Republic, if the injury or
death is due to the negligence or other wrongful act of the driver…
. . .
(4)
Where a claim for compensation under subsection (1) –
…
(c) includes a claim for loss of income or support, the annual loss, irrespective of the
actual loss, shall be proportionately calculated to an amount not exceeding-
(i)
[Rx] per year in the case of a claim for loss of income; and
(ii)
[Rx] per year, in respect of each deceased breadwinner, in the case of a claim
for loss of support.’

[4] The amounts referred to in section 17(4)(c)(i) and (ii) of the RAF Act are
adjusted quarterly and determined by notice in the Government Gazette in terms of
sections 17(4A)(a) and 17(4)(b). Hence, the amount to be utilised in calculating the
loss of earnings in 2012, being the year in which the collision occurred, is that which

was last published in the notice prior to the date on which the cause of action arose.
This would be R196 636 per year as per the notice.

[5] In the court a quo Holland-Mϋter AJ accepted the correctness of the actuarial
calculations of Gregory Whittaker of Algorithm Consultants, who conducted a
calculation on behalf of the appellant, and that of Gerald Jacobson, for the RAF. Mr
Whitaker calculated the appellant’s future income, including his contributions to the
retirement annuity, to be R6 578 936. Mr Jacobson calculated the appellant’s future
income, excluding the contributions to the retirement annuity, to be R3 539 448. The
court a quo made an award for future loss of earnings in the amount of R3 539 448.

[6] Mr Marais, counsel for the appellant, contended that claimants such as the
appellant, who voluntarily contributed to a retirement annuity fund were discriminated
against in that they were placed at a disadvantage and prejudice by not being able to
include their contributions to an annuity fund in a claim for loss of earnings. Such
discrimination, he contended led to the RAF not adhering to its constitutional duty as
envisaged by the Act, in compensating a claimant in full. This is so, because the
retirement annuity fund contributions were not taken into account when calculating
the compensation claimable for loss of earnings as were the pension fund
contributions. In the circumstances, so the arguments goes, the appellant was being
discriminated against and his rights in terms of sections 1(a), 7(1) and 9 of the
Constitution of the Republic of South Africa 108 of 1996 were being violated.

[7] Mr Marais was at pains to point out that a retirement annuity fund and a
pension fund were one and the same. I do not agree. I refer to the Income Tax Act 58
of 1962 (the Income Tax Act), where a retirement annuity fund is defined as ‘any fund
(other than a pension fund, provident fund or benefit fund) approved by the Commissioner’.
This definition was fortified by the pronouncement made in Commissioner for Inland
Revenue v Milstein 1942 TPD 279 at 287 where Millin J stated:
‘… Annuities differ from other investments in that the capital sum invested is not returnable
when the annuity ceases to be payable. Baron Watson’s description of an annuity in Foley v
Fletcher (5H. and N. 769, 117 R.R at p.978) is thus summarised in 17 Hailsham, sec.378,
p.181: “An annuity is an income purchased with a sum of money or an asset which then
ceases to exist, the principal having been converted into an annuity.”  The test, in

determining whether a series of annual payments amount to an annuity, is whether the
principal continues to exist as a debt or is liquidated when the transaction takes place. If it is
liquidated the payment constitutes an annuity.’  [My emphasis]
The dictum was adopted by this court in Kommissaris van Binnelandse Inkomste en
’n Ander v Hogan 1993 (4) SA 150 (A). When one subscribes to a retirement annuity
fund projections are often based on calculated future date of return, typically what
one would expect from an investment.

[8] It is evident, as indicated above, that a retirement annuity fund is not a pension
fund, but rather a form of investment. Contributions to an employer pension fund
make up part of one’s employment benefits, whilst contributions to a retirement
annuity do not.

[9] This court, in Dippenaar v Shield Insurance Co Ltd 1979 (2) SA 904 (A),
considered whether the pension deduction from the claimant’s earnings and the
contribution made by his employer toward a pension, arising from his contract of
employment, could be excluded from his earnings, income or salary. Rumpff CJ at
917 to 920 examined the leading authority from the House of Lords of Parry v
Cleaver (1969) 1 All ER 555. Relying on the dicta in Parry he upheld the lower court
stating the following  at 920D-E:
‘When capacity to earn is sought to be proved by the plaintiff by means of a contract of
employment, the monetary value of the contract can only be assessed when one looks at the
contract as a whole. In this regard it is clear that, if in terms of such contract there is a
compulsory deduction from salary plus a contribution by the employer in order to pay the
employee money as sick leave or as a pension, it is the intention of the parties that that
money shall be paid when it is due, in terms of the contract. In fact the “income” of the
employee is in terms of the contract not confined to his salary… but includes also sick pay or
pension when such pay or pension is due. If monetary value is sought to be put on the
earning capacity based on this contract, every benefit received under the contract, such as a
pension, must therefore be considered, as was done by the trial Court in the present case.’

[10] Quoting directly from the court a quo’s judgment, Rumpff CJ, at 921A-B,
associated himself with the view that one could not compare a pension to a benefit
that is ‘deemed to have been purchased’. Thus, if a claimant purchases a benefit, such

as a retirement annuity in the present case, and he does so voluntarily and
unconnected to an employment contract, his contributions or payments in relation to
such makes it an investment or purchase of a benefit that cannot be recovered from
the RAF. The reasoning, in my view, is that a negligent third party cannot be liable to
compensate a claimant who voluntarily opted to attain a benefit, irrespective of
whether that third party was negligent. This is so because the voluntary purchase of
the benefit does not cancel out the benefit when the delict is committed.

[11] In my view, the court a quo was correct when it concluded that ‘provisions for
the future’, such as an investment cannot be taken into account when calculating
future loss of earnings for the purpose of provisions of the RAF Act.

[12] I now turn to deal with the issue of discrimination raised by the appellant. The
distinction between claimants whose employers contribute to their pension funds as
part of their contracts of employment and those who do so voluntarily was
categorised by Mr Marais as discrimination. That is not correct while the concepts of
equity and discrimination are linked, discrimination concerns treating one person (or
groups of persons) differently to another on the basis of inherent characteristics or
attributes such as race, gender or the other grounds listed in s 9(3) of the
Constitution. What is alleged here is a differentiation in treatment that is unrelated to
any inherent characteristic or attribute having the potential to impair the dignity of a
person. See Harksen v Lane NO & others 1998 (1) SA 300 (CC) paras 47 and 50;
City of Johannesburg Metropolitan Municipality v Blue Moonlight Properties 39 (Pty)
Ltd & another 2011 (4) SA 337 (CC) para 58. The right to equality may be implicated,
but not the right to be free from unfair discrimination.

[13] Iain Currie and Johan de Waal in The Bill of Rights Handbook (5 ed) para 9.1
(at 230) state that ‘[a]t its most basic and abstract, the formal idea of equality is that
people who are similarly situated in relevant ways should be treated similarly’. In this
case, it cannot be said that a person like the appellant whose employer does not
contribute to a pension fund for the employer as part of his or her remuneration is in a
similar position to an employee whose employer does contribute to a pension fund for
the employee as part of his or her remuneration. All employees are, however, treated

equally in the sense that in order to determine their future loss of earnings, a court
considers the employment contract as a whole. Consequently, the discrimination
argument must also fail.

[14] The general rule of costs following the result ought to apply in these
circumstances.

[15] I make the following order:

The appeal is dismissed with costs including the costs of two counsel.

___________________
W Hughes
Acting Judge of Appeal

APPEARANCES

For the Appellant:
H B Marais SC
Instructed by:
Frank Botha & Vickers Attorneys

Claude Reid Attorneys, Bloemfontein

For the Respondent:
C van Jaarsveld with L Eloff
Instructed by:
Diale Mogashoa Inc., Pretoria

McIntyre van der Post, Bloemfontein