Mutsila v Municipal Gratuity Fund and Others, [2025] ZACC 17 (Constitutional Court of South Africa, 8 August 2025)
This judgment is reportable because it is a unanimous decision of the Constitutional Court clarifying the duties of pension-fund trustees when making death-benefit allocations under section 37C of the Pension Funds Act 24 of 1956. It restates the principles governing investigations into dependency, emphasises procedural fairness, and explains the remedial powers of courts when trustees or the Pension Funds Adjudicator act irregularly. Given the economic importance of retirement funds and the widespread social impact of death-benefit distributions, the judgment has significant precedential value for retirement-fund law, administrative-law standards, and constitutional rights to lawful, reasonable and procedurally fair administrative action.
No external authorities were cited substantively in the excerpts provided; the Court relied principally on the interpretation of section 37C of the Pension Funds Act and its own earlier jurisprudence on administrative justice.
Pension Funds Act 24 of 1956, especially sections 37C, 30A, 30C and 30P.
Companies Act 71 of 2008.
Constitutional Court Rules governing applications for leave to appeal (not individually numbered in the judgment).
The applicant, Ms Tshifhiwa Shembry Mutsila, challenged the decision of the Municipal Gratuity Fund to award over half of her late husband’s death benefit to Ms Dipuo Masete and her two children. The Fund had accepted Ms Masete’s claim that she and her children were dependants of the deceased. After an adverse determination by the Pension Funds Adjudicator and subsequent litigation in the High Court, Full Court and Supreme Court of Appeal, the matter reached the Constitutional Court. The Court granted leave to appeal, set aside all previous orders, nullified both the Fund’s distribution and the Adjudicator’s determination, and remitted the matter to the Fund for a fresh investigation and equitable redistribution.
Whether the Fund conducted a lawful, reasonable and procedurally fair investigation under section 37C.
Whether Ms Masete and her children qualified as dependants of the deceased.
The extent of a fund’s investigative duty before allocating death benefits equitably.
The appropriate remedy when a fund and the Adjudicator act on inadequate or incorrect information.
The Fund failed to investigate dependency properly and relied on untested assertions about Ms Masete’s status.
The Adjudicator erred by finalising the complaint before the factual disputes in the custody litigation were resolved.
All previous judicial orders were set aside; the matter was remitted to the Fund to conduct a fresh section 37C investigation within three months, taking the factual position as at 9 April 2014.
The Fund was ordered to pay the applicant’s costs at every level of the proceedings, including the Constitutional Court.
Mr Takalani Emmanuel Mutsila, an employee of the Ba-Phalaborwa Municipality and a member of the Municipal Gratuity Fund, died in a workplace accident on 15 December 2012, leaving a death benefit of R 1 614 434.86. He was survived by his civil-law spouse, Ms Tshifhiwa Mutsila, and their five minor and dependent children.
Ms Dipuo Masete claimed that she was married to the deceased by customary law and that her two children were fathered by him. Relying largely on her affidavit and on life-policy documentation listing her as a beneficiary, the Fund treated Ms Masete and her children as dependants. In its 9 April 2014 resolution it allocated 52.5 per cent of the benefit to Ms Masete and her children, 22.5 per cent to the applicant, and the balance among the applicant’s five children.
A private investigation later revealed that Ms Masete was in fact customarily married to a different man, Mr Malema Joseph Mphafudi, who was also the biological father of her children. This contradiction became central in a custody dispute before the Limpopo High Court and cast doubt on her dependency claim. Nevertheless, the Fund and the Adjudicator proceeded without awaiting the outcome of that litigation.
The Court had to determine whether the Fund’s investigation satisfied the statutory requirement of a proper inquiry into dependency under section 37C. It also had to decide what remedial action was appropriate where both the Fund and the Adjudicator had acted on incomplete or incorrect facts, and whether costs should follow the result.
Theron J, writing for a unanimous bench, began by explaining the constitutional context: pension-fund trustees exercise public-law powers affecting socio-economic rights and must therefore comply with the standard of lawful, reasonable and procedurally fair administrative action. Section 37C places an active duty on trustees to identify all dependants, assess their degree of dependency and allocate benefits equitably.
The Court found that the Fund’s inquiry was superficial. It accepted Ms Masete’s version without corroboration, failed to verify paternity of her children, and ignored contradictory information indicating her subsisting customary marriage to another man. The Fund also disregarded the applicant’s documentary evidence and did not await the outcome of the custody case, despite recognising that it bore directly on dependency.
Similarly, the Adjudicator shirked her statutory mandate by finalising the complaint before crucial facts were resolved. By doing so she undermined the very purpose of section 37C, which is to protect vulnerable dependants through a careful and equitable process.
Having identified these defects, the Court considered the proper remedy. Merely substituting its own allocation would require factual findings that were never properly investigated. The correct course was therefore to remit the matter to the Fund, instructing it to conduct a fresh, comprehensive investigation within three months, based on the circumstances existing on 9 April 2014.
Leave to appeal was granted and the appeal upheld. The Constitutional Court set aside the decisions of the High Court, the Full Court and the Supreme Court of Appeal, as well as the determinations of both the Fund and the Pension Funds Adjudicator. It remitted the matter to the Fund for a fresh determination of dependency and equitable distribution within three months. The Fund was ordered to pay the applicant’s costs in all courts, including the costs of two counsel where so employed.
Trustees of pension funds exercise public-law powers and must comply with constitutional standards of administrative justice.
Section 37C imposes a proactive investigative duty: trustees must identify all dependants, assess their extent of dependency and allocate benefits in a manner that is equitable, not merely equal.
An investigation is inadequate if trustees accept unverified claims or ignore conflicting evidence.
The Pension Funds Adjudicator must ensure all relevant facts are ascertained before issuing a determination; premature decisions violate procedural fairness.
When statutory duties are breached, courts may set aside the impugned decisions and remit the matter for fresh determination, rather than substitute their own findings, unless the record is complete and the interests of justice require otherwise.