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[2015] ZASCA 113
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Sasol Limited v Chemical Industries National Provident Fund (20612/2014) [2015] ZASCA 113 (7 September 2015)
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THE
SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Not
Reportable
Case
No: 20612/2014
In the matter
between:
SASOL
LIMITED
FIRST APPELLANT
SASOL
PENSION FUND
SECOND APPELLANT
SACWU
NATIONAL PROVIDENT FUND THIRD
APPELLANT
SASOL
NEGOTIATED PROVIDENT FUND
FOURTH APPELLANT
and
CHEMICAL
INDUSTRIES NATIONAL
PROVIDENT
FUND
RESPONDENT
Neutral
citation:
Sasol
Limited v Chemical Industries National Provident Fund
(20162/2014)
[2015] ZASCA 113
(7
September 2015)
Coram:
Mpati P, Cachalia and Mhlantla JJA
and Gorven and Baartman AJJA
Heard
:
16
August 2015
Delivered:
7 September
2015
Summary:
Pensions
─ transfer of membership from respondent fund to appellant
funds ─ interpretation and application of rules
of respondent
fund relating to transfer ─ partial compliance with rules
insufficient ─ no valid transfer.
ORDER
On
appeal from:
Gauteng
Local Division of the High Court, Johannesburg (Mayat J sitting as
court of first instance): judgment reported
sub
nom
Chemical
Industries National Provident Fund v Sasol Limited & others
(22869/2013) [2014] ZAGPJHC 90,
2014
(4) SA 205
(GJ)
The appeal is
dismissed with costs, including those occasioned by the employment of
two counsel.
JUDGMENT
Gorven AJA
(Mpati P, Cachalia and Mhlantla JJA and Baartman AJA concurring):
[1]
This matter concerns transfers of
members between funds governed by the Pension Funds Act.
[1]
Prior to 1 December 2011, most
employees of the first appellant (Sasol) who were members of the
respondent fund (the CINPF) were
not entitled to terminate their
membership of the CINPF while they remained in service. The rules of
the CINPF prohibited it. A
number of Sasol employees wished to
transfer to other funds. This led to complaints to the Pension Funds
Adjudicator (the Adjudicator).
An amendment to rules 3.4.1 and 10.2
of the CINPF followed.
[2]
Sasol says that after this amendment
and with effect from 1 March 2013, the fifth to 2448
th
respondents (the 2444) in the court
below have withdrawn from the CINPF and are now members of one of the
second to fourth appellants
(the new funds). Sasol consequently
ceased paying employer and member contributions to the CINPF from
that date. The CINPF says
that no such withdrawal has taken place and
the 2444 remain members of the CINPF. The contributions should have
continued. The
parties agree that the outcome of this dispute and,
thus, this appeal, turns on the interpretation of the amended rules
3.4.1 and
10.2 of the CINPF and its application to the facts. The
dispute arose as follows.
[2]
The Registrar of Pension Funds
approved the amendment on 12 July 2012. In response to
pressure from employees to transfer,
Sasol decided to offer them an
opportunity to do so during a ‘window period’.
Consequently, o
n
31 August 2012, Sasol wrote to the CINPF. It recorded that
many employees wished to transfer and that a window period
would open
from 1 October 2012 to 30 November 2012 during
which employees would be permitted to transfer. An
objection period
would run from 1 to 31 December 2012. In order to inform
employees of the benefits offered by the different
funds, they would
be given an opportunity to attend information sessions during the
window period at which presentations would
be made by all the
relevant funds. On 13 September 2012, Sasol instructed all
of its plants to display a notice informing
employees of the window
period and the forthcoming information sessions. In the notice, Sasol
set 1 January 2013 as the
transfer date.
[3]
On 18 September 2012, Sasol sent
an email to the CINPF and the new funds, informing them of the venues
and scheduled dates
for the proposed information sessions, beginning
on 26 September 2012. The email requested each fund to send
representatives
to the information sessions to present information
about their fund. The CINPF replied to this email on the same day. It
advised
Sasol that the CINPF would respond to the request after the
board met in November 2012.
[4]
On 19 September 2012, Sasol wrote
expressing concern that the CINPF would not participate in the
information sessions. These nevertheless
commenced as scheduled. On
2 October 2012, the CINPF wrote to Sasol advising that its
unilateral decision to grant its
employees a window period to
transfer from the CINPF was ‘disturbingly inappropriate’.
It requested a list of those
members wishing to be transferred. It
recorded that there had been ‘malicious and misleading’
information conveyed
to employees with housing loans that, if they
transferred to one of the new funds, their housing loans would be
settled. The CINPF
also asserted that its trustees alone could take a
decision to transfer members. Sasol could do no more than request the
trustees
to open a window period.
[5]
Sasol responded on 11 October 2012
contending that it had complied with the rules of the CINPF and that
members of the
CINPF were now permitted to transfer to another fund.
Sasol undertook to furnish a list of those employees wishing to
transfer
from the CINPF once the window period was over. On
12 October 2012, the CINPF advised Sasol that, following a
special
board meeting, representatives would make presentations at
the remainder of the scheduled information sessions.
[6]
More than 90 information sessions
were conducted countrywide. After 15 October 2012, the
CINPF was represented at 53 of
them. Employees who intended to
transfer were given a document drafted by Sasol which set out a
comparison of the funds in tabular
form. This document had been
supplied to the CINPF prior to the commencement of the information
sessions. Despite an invitation
to correct or supplement the
document, no response was received from the CINPF. After each
session, employees were asked to sign
declaration forms in which they
indicated whether they elected to transfer and, if so, to which of
the new funds.
[7]
On 7 December 2012, the CINPF and its
legal representatives met with representatives of Sasol. It was
agreed that they would co-operate
with each other by sharing all
necessary information so as to facilitate transfers in terms of the
rules of the CINPF. On 13 December 2012,
the attorneys of
the CINPF requested a list of members wishing to transfer from the
CINPF. The request for a list was repeated
in an email of
7 January 2013. On 10 January 2013, Sasol
informed them that it was not in a position to provide
the requested
information. It explained that 14 January 2013 had been set
as the final date for submission of declaration
forms. Numerous
errors in existing forms had been identified and it had therefore
become necessary for each application to be validated.
Finally, Sasol
informed the CINPF that, due to these factors, the transfer date had
been put back to 1 March 2013. On
1 February 2013,
Sasol provided the requested list. On 4 February 2013,
Sasol made copies of the signed forms
available.
[8]
On 21 February 2013, the
CINPF requested copies of the presentations made to the employees
during the information sessions.
In addition, it asked Sasol whether
the new funds had a home loan facility and how it intended dealing
with members who had outstanding
loans. Sasol responded on the same
day. It said that it had been made clear to employees that, if they
wished to transfer to one
of the new funds and had a home loan with
the CINPF, the loan would have to be settled. The balance of that
member’s fund
credit would be transferred to the new fund once
the process under s 14 of the Act
[3]
had been approved. On
23 February 2013, the CINPF noted that the majority of the
declaration forms did not indicate which
investment portfolio the
member had chosen. It further highlighted differences in the home
loan policies and core benefits of the
different funds. The CINPF
concluded that the trustees ‘would not be carrying out their
fiduciary duties . . . should they
approve these transfers without
seeking clarity and/or explanations why members would agree to
transfer to funds where they are
prejudiced’. Sasol was
requested to address those concerns so that the trustees could
consider the application. Sasol responded
on 28 February 2013
in terse and somewhat dismissive terms.
[9]
In an eight page letter dated
27 March 2013, the CINPF motivated in detail the concerns
mentioned on 23 February 2013.
No response was received. The CINPF
again called for a response to the queries and expressed its disquiet
that Sasol had ceased
to pay contributions to the CINPF despite the
‘objections and concerns’ raised by the CINPF.
After
further correspondence failed to resolve the matter, the CINPF
approached the court below.
[10]
It claimed t
he
following relief against Sasol and the new funds:
‘
1. Declaring
that the 5
th
to
2448
th
respondents
were not validly transferred from the CINPF with effect from 1 March
2013 and remain members of the CINPF.
2. Declaring that since 1
March 2013 and while the 5
th
to 2448
th
respondents retain their status as members of the CINPF, Sasol has
been and remains obliged to pay member contributions and its
corresponding employer contributions to the CINPF in respect of each
of the 5
th
to 2448
th
respondents.
3. Ordering the first
respondent (Sasol) to pay the costs of this application and ordering
any of the other respondents who oppose
this application to pay the
costs of the application jointly and severally with the first
respondent.’
[11]
In addition to opposing the relief
sought, Sasol and the new funds brought a counter-application for the
following relief:
[4]
‘
2. It is
declared that the employees of SASOL Limited who are members of the
Applicant and who with effect from 1 March 2013 elected
to become
members of the Second to Fourth Respondents have lawfully exercised
that election and are now members of the Second to
Fourth
Respondents:
3. It is declared that
SASOL Limited is entitled to pay to the Second to Fourth Respondents
the contributions in respect of the
members or the Applicant who have
elected to become members of the Second to Fourth Respondents;
4. The Applicant be
directed to take all necessary steps contemplated in section 14 of
the Pension Funds Act, Act 24 of 1956, read
with directive 6 of the
directives issued by the Registrar of Pension Funds, to ensure that
the assets and liabilities attributable
to those members who have
elected to become members of the First to Fourth Respondents with
effect from 1 March 2013 are transferred
to the First to Fourth
Respondents.’
The 2444 took
no part in the application or counter-application.
[12]
Mayat J, in the Gauteng Local
Division of the High Court, Johannesburg, granted the relief sought
by the CINPF, including an order
that Sasol and the new funds pay the
costs of two counsel. The parties correctly agree that, even though
no order was made on the
counter application, the effect of the
judgment was also to dismiss the counter-application with costs,
including the costs of
two counsel. The court below granted Sasol and
the new funds leave to appeal against the orders granted in the main
application
and the dismissal of the counter-application. It is this
appeal which is before us.
[13]
The legal principles that apply to
pension and provident funds are clear and uncontroversial. The
trustees of a fund are bound to
observe and implement the rules of
that fund.
[5]
Their powers and responsibilities and
the rights and obligations of members and participating employers are
governed by the rules,
applicable legislation and the common law.
[6]
The rules of a fund form its
constitution
[7]
and must be interpreted in the same
way as all documents. The approach to be taken to the interpretation
of documents was recently
summarised by this court in
Natal
Joint Municipal Pension Fund v Endumeni Municipality
,
[8]
as follows:
‘
Whatever the nature of the document,
consideration must be given to the language used in the light of the
ordinary rules of
grammar and syntax; the context in which the
provision appears; the apparent purpose to which it is directed and
the material known
to those responsible for its production. Where
more than one meaning is possible each possibility must be weighed in
the light
of all these factors. The process is objective, not
subjective. A sensible meaning is to be preferred to one that
leads to
insensible or unbusinesslike results or undermines the
apparent purpose of the document. Judges must be alert to, and guard
against,
the temptation to substitute what they regard as reasonable,
sensible or businesslike for the words actually used. To do so in
regard to a statute or statutory instrument is to cross the
divide between interpretation and legislation; in a contractual
context it is to make a contract for the parties other than the one
they in fact made.
The “inevitable
point of departure is the language of the provision itself”,
read in context and having regard to the
purpose of the provision and
the background to the preparation and production of the
document.
’
[9]
[14]
As so often happens with amendments
to documents, those made to the rules of the CINPF in this instance
caused the rules to ‘grow
like Topsy’, resulting in an
unsightly and unwieldy edifice. Far from clarifying matters, the
amendments gave rise to considerable
opacity, if not a number of
anomalies. Not all of these arise or can be resolved in this
judgment. It remains to construe the relevant
rules.
[15]
The amended rule 3.4.1
reads
as follows:
‘
3.4.1. Subject
to the provisions of Rule 9.2.4, a Member shall not be permitted to
withdraw from membership of the Fund while he
remains in Service,
except in the circumstances referred to in Rule 10.2.1.’
Rule 9.2.4 has
no application in the present matter. Therefore, the only issue is
what is meant by ‘the circumstances referred
to in Rule
10.2.1’. Rule 10.2 provides:
‘
10.2 Transfers
out of the Fund
10.2.1 Notwithstanding any
contrary provision in these Rules, particularly Rule 3.4.1, existing
Members who wish to transfer out
of the Fund while still in Service,
must make a representation to the Trustees, through their Local
Advisory Committee, in writing.
Representation is to be made to the
Trustees within such a reasonable period as the Trustees shall
consider appropriate.
10.2.2 The Trustees must
ensure that the representation is investigated and confirmed prior to
the submission of an application
to the Registrar by conducting a
clear and comprehensive communication exercise with the Members
concerned in terms of Rule 13.1.8,
and by obtaining the explicit
approval of all the transferring Members.
10.2.3 The Fund must be
satisfied that a transfer is reasonable and equitable and that it
accords full recognition to the rights
and reasonable expectations of
the Members.
10.2.4 Subject to the
provisions of Rules 10.2.1, 10.2.2 and 10.2.3, if the transferred
Member becomes a member of an Approved Provident
Fund or an Approved
Pension Fund established for the benefit of employees of the
organization to which he is transferred, the Trustees
shall transfer
the Member's Fund Credit as at the Disinvestment Date plus any
interest which may have become due to the Member
by the fund, and
thereafter, the Member shall have no claim on the Fund.’
[16]
It will immediately be noted that the
wording used in the two amended rules is not consistent. Rule 3.4.1
refers to withdrawing
from membership while rule 10.2 refers to a
transfer. It is accepted by the parties that the application to the
Registrar mentioned
in rule 10.2.2 is one made in terms of s 14
of the Act. As has been pointed out by Rosemary Hunter et al,
[10]
s 14 does not regulate the
transfer of members but the transfer of assets and liabilities of
members. Members do not, strictly
speaking, transfer between funds.
They withdraw from one and join another.
[17]
So the question that then arises is:
does rule 10.2 deal with withdrawal of members, the transfer of their
assets and liabilities
or both? The short answer is that it deals
with both. According to rule 3.4.1, one must look to rule 10.2.1 to
establish the circumstances
under which a member may withdraw. Rule
10.2.1 refers to members who wish to transfer, rule 10.2.2 to
‘transferring members’
and rule 10.2.4 to a transferred
member. These clearly relate to members. Rule 10.2.4 then goes on to
refer to a transfer of a
member’s fund credit. This relates to
the s 14 transfer of assets and liabilities. The language in
rule 10.2, insofar
as it refers to a transfer of members, is
therefore not congruent with that of the Act or, indeed, of rule
3.4.1. This imprecise
use of language has undoubtedly contributed
significantly to the dispute between the parties.
[18]
In their heads of argument, the main
argument advanced by the appellants was that, since rule 3.4.1 is
made subject only to rule 10.2.1,
‘termination of
membership of the CINPF is not dependent upon compliance with Rules
10.2.2 and 10.2.3 and is a step distinct
from the remainder of the
Rule, which deals with the transfer of members’ fund credits
under Section 14’ of the Act.
This submission was not pressed
in argument. It is premised on rules 10.2.2 to 10.2.4 dealing only
with a transfer of assets and
liabilities under s 14. The
appellants agreed before us that the withdrawal of a member from the
CINPF could not take place
without the provisions of the other
sub-rules being complied with.
[19]
In my view, this is correct. Although
rule 3.4.1 mentions only rule 10.2.1, the latter rule triggers a
process that requires compliance
with rules 10.2.2 to 10.2.4. As
mentioned, these deal with both the termination of membership and the
transfer of members’
assets and liabilities. This is clear from
at least two factors. First, the requirement in rule 10.2.2 is that
the trustees ensure
that the representation (which I take to mean
request or notice) to transfer out of the fund is confirmed before
submitting an
application to the Registrar. It makes no sense to
contend that a member has already withdrawn before confirming a
member’s
desire to do so. If a member does not confirm the
representation, it can hardly be contended that the member in
question has in
fact withdrawn. Secondly, the requirement in rule
10.2.2 is that the trustees must obtain the ‘explicit approval
of the member’.
This will almost certainly require the members
concerned to be made aware of the financial consequences of a
transfer to another
fund. This is why a communication exercise must
take place before the explicit approval is obtained. After the
communication exercise
it may well be that a member decides not to
give approval. The approval must surely be obtained before it
can be said that
the member has transferred or withdrawn. A
withdrawal from the CINPF thus requires the completion of the rule
10.2.2 process.
[20]
Under rule 10.2.3, the trustees must
be satisfied in two respects. First, that the proposed transfer is
‘reasonable and equitable’
and, secondly, that the
proposed transfer ‘accords full recognition to the rights and
reasonable expectations of the Members’.
It was accepted by the
parties that this requires a conscious decision to be taken by the
trustees to the effect that they are
so satisfied. It was also
accepted by the parties that this must take place before an
application under s 14 of the Act is
submitted by the trustees
to the Registrar.
[21]
Having conceded in argument that rule
10.2.1 does not alone govern a withdrawal, the alternative submission
of the appellants was
that the provisions of rules 10.2.1 to 10.2.3
had been satisfied on the facts of the matter. This submission was
vigorously contested
by the CINPF.
[22]
The CINPF submitted that the entire
process was fatally flawed. Sasol, it said, had unilaterally
initiated and conducted the transfer
process, including the
communication exercise enjoined by rule 10.2.2. In doing so, Sasol
had inappropriately usurped the fiduciary
role of the trustees. In
addition, the CINPF challenged the accuracy of attendance registers
and the like.
[23]
It must be said that the strict
letter of rule 10.2 was not followed. A simple example arises from
the way in which the process
was initiated. Rule 10.2.1 requires a
‘representation’ to be made by a member through the Local
Advisory Committee
to the trustees of the CINPF. This was clearly not
done. Instead, Sasol notified the CINPF that a large number of its
members wished
to transfer. However, the purpose of the rule is to
identify those members wishing to transfer so that the trustees can
confirm
this and obtain their explicit consent after a communication
exercise has been conducted. At the time, the CINPF simply requested
from Sasol the relevant particulars of those members. This
information would clearly suffice for it to take the steps required
by rule 10.2.2 to 10.2.4. It did allege non-compliance with this rule
in its letter of 29 April 2013 but has not relied on this
in the
appeal. In my view, there was sufficient compliance with rule 10.2.1
and the approach of the CINPF in the appeal was
refreshingly
pragmatic in this regard.
[24]
The contention of the CINPF that the
process undertaken pursuant to rule 10.2.2 was fatally flawed cannot
find traction. First,
although the rule clearly envisages that the
trustees oversee the process, all that is required in substance is
that the trustees
ensure that the representations are ‘investigated
and confirmed’ and that the ‘explicit approval of all the
transferring
Members’ is obtained. This after a communication
exercise has taken place. If this was done, and I will deal with this
aspect
later, to argue that the process is a nullity because the
trustees did not ‘conduct’ the communication exercise is
to unduly elevate form over substance.
[25]
In the second place, the particular
circumstances of this matter are highly unusual. Transfers had
hitherto not been allowed but
members had, for some time, expressed a
desire to transfer. This desire had been thwarted by the rules. The
right to transfer only
arose after the amendment was approved in
July 2012. As a result, instead of a situation obtaining where
transfers were taking
place on an ongoing basis from time to time, a
large number of members wished to transfer at the same time. In these
circumstances,
the involvement of Sasol as employer was imperative. A
‘window period’ and a series of nationwide information
sessions
at Sasol plants was an appropriate way to address the
numbers involved. In addition, there were a number of funds to which
employees
might transfer. It thus made practical sense for Sasol to
schedule the information sessions and invite all the relevant funds,
including the CINPF, to participate in them. This situation will not
be likely to repeat itself and other employers will be hard
pressed
to justify adopting a similar approach in the future.
[26]
Thirdly, the CINPF, after initial
misgivings, participated in the process and gave presentations at 53
of the sessions. It can hardly
be heard to complain that the sessions
were fatally flawed or that they did not contribute meaningfully to
the rule 10.2.2 process.
The CINPF’s attorneys conceded as much
in their letter of 20 November 2012, after over a month of
involvement and
with only ten days of the window period remaining,
where they said:
‘
We do not wish
to debate with Sasol the merits or otherwise of the validity of the
Window Period, but rather to constructively discuss
the proposed
transfers and process post the information sessions and closing of
the Window Period, for the benefit of all the Members
of the CINPF’.
This was a
salutary approach. Even the letter of 23 February 2013, to which I
will return in due course, did not raise complaints
about the
process.
[27]
In addition, the tabulated comparison
of the funds was disseminated without correction from the CINPF. Even
in the papers the CINPF
at no stage challenged the accuracy of the
information in this document. This also contributed to the
communication exercise. In
summary, whilst Sasol may have been over
zealous and should have secured CINPF’s consent from the
outset, the process went
a long way to cover the communication
exercise required by rule 10.2.2. While there is room for the
trustees of the CINPF to complete
the process, should they consider
it necessary, by ensuring that at least certain of those wishing to
transfer are aware of the
full implications and give their explicit
consent the process should certainly not start anew. This much was
conceded in argument
before us. A relatively limited process may be
necessary, if at all. It would be most unfortunate if further undue
delay took place
when members have been wishing to transfer since
prior to August 2012.
[28]
What is clear on any version,
however, is that the CINPF did not make an express decision that it
was satisfied on the aspects referred
to in rule 10.2.3. This much
was conceded by the appellants in argument. They accepted that the
trustees of the CINPF had to make
a decision before a transfer can
take place, but sought to address the lack of an express decision in
two ways.
[29]
First, they submitted that the
trustees had made a tacit decision. Using the test accepted by this
court for tacit contracts, this
requires a finding that, on a balance
of probabilities, ‘an implication necessarily arises’
[11]
by virtue of the conduct of the CINPF
that it had made such a decision. But the evidence does not support
this contention. In its
letter of 23 February 2013, the
CINPF spoke of still needing to be satisfied on a number of matters
and recorded a belief
that it was of the view that the transfers
would be prejudicial to at least some of the members in question.
This can hardly be
construed as conduct consistent with being
satisfied that the transfers are reasonable and equitable and that
they give expression
to the rights and reasonable expectations of the
members concerned, as the rule requires. No tacit decision was taken.
[30]
The second attempt to overcome the
lack of an express decision, was to submit that, because the test for
being satisfied is an objective
one, the court should itself have
taken the decision. For this submission, the appellants relied on the
determination of the Financial
Services Board of Appeal in
AH
Roy v Registrar of Pension Funds & another
.
[12]
In that matter, however, a decision
to approve a scheme pursuant to s 14(1) of the Act had been
taken. The aggrieved party
sought to have this decision set aside and
the decision of the Appeal Board substituted. In the present matter,
I have found that
no decision was taken, whether express or tacit. It
is not appropriate to make a decision when the trustees have not made
one.
The authority relied on by the appellants does not apply in this
case.
[31]
In any event, it is clear that the
CINPF consistently raised concerns about the housing loan issue. This
is no trifling matter.
The CINPF points out that it offers loans of
up to 80 percent of the members’ fund credits. The new funds
offer loans equal
to only 25 percent. Some 21 percent of the 2444
have home loans with the CINPF. Sasol’s response to the concern
expressed
in the letter of 23 February 2013 on this issue was simply
to the effect that transferring members would have to settle their
home
loans. In its founding affidavit, the CINPF gave examples of how
this would affect the fund credit of certain members. The only
response given by Sasol in its answering affidavit was that this
ignores the fact that, once a loan is settled, a member will no
longer have to service that loan leaving more of the salary available
for additional contributions to the fund.
[32]
One example given by the CINPF in its
founding affidavit is of a 58 year-old employee with a fund credit of
R81 640.17. Of
this amount R55 905.33 is outstanding on his
home loan. The tax liability on withdrawal of the latter amount from
his fund
credit so as to settle his outstanding home loan is
R6 012.96. The fund credit which would be transferred would
therefore
be R19 721.88. He has only seven years before
retirement and it is inconceivable that the fund credit would be
reinstated
by then. In these circumstances, it is understandable
that, in attempting to discharge their fiduciary duties, the trustees
would
want to ensure that such a member fully understands these
implications. In these circumstances, it would most certainly not be
appropriate for a court to make a decision in their stead.
[33]
I have mentioned that the rule 10.2.2
process may require completion and that no decision was taken by the
trustees to the effect
that they were satisfied on the two aspects
dealt with in rule 10.2.3. It cannot be said that the provisions of
rules 10.2.1 to
10.2.3 have been complied with. The appellants
accepted that effect has not been given to rule 10.2.4. As such,
transfers of the
2444 affected members have not taken place. The
court below was accordingly correct to grant prayer 1 of the relief
sought by the
CINPF.
[34]
Finally, although this was not argued
before us or dealt with by the court below, it should be mentioned
that prayer 2 was also
correctly granted by Mayat J. Rule 3.5
provides as follows:
‘
If a Member
transfers to another Approved Provident Fund or Approved Pension Fund
in any of the circumstances envisaged in these
Rules and such
transfer is subject to the provisions of Section 14 of the Act, then
it is specifically provided that with effect
from the effective date
of transfer as specified in the Section 14 documentation,
contributions in terms of Rule 4 shall cease
and in the event of his
death or disablement, prior to transfer of his benefit in terms of
these Rules from the Fund to such other
Fund, the death and
disability benefits referred to in Rule 6.1 (b) and Rule 7.2
respectively shall not be payable.’
This makes it
abundantly clear that, because the transfers are subject to the
provisions of s 14 of the Act, Sasol’s
contributions to
the CINPF cease only from the ‘effective date of transfer as
specified in the Section 14 documentation’.
The trustees have
not submitted an application in terms of s 14. Until this is
done and the trustees specify an effective
date in it, Sasol's
contributions to the CINPF must continue.
[35]
The following order is made:
The appeal is
dismissed with costs, including those occasioned by the employment of
two counsel.
_______________________
T
R Gorven
Acting
Judge of Appeal
Appearances
For the Appellants:
AE Franklin SC (with him S Khumalo)
Instructed by: Bowman Gilfillan,
Sandton
McIntyre & Van der Post,
Bloemfontein
For the
Respondent:
CE Watt-Pringle SC (with him JJ Meiring)
Instructed by: Mervyn Taback Inc,
Johannesburg
Webbers, Bloemfontein
[1]
Pension Funds
Act 24 of
1956
.
[2]
The amendment was adopted by the trustees of
CINPF on 20 November 2011 with effect from 1 December 2011 and
was approved
by the Registrar of Pension Funds by letter dated 12
July 2012.
[3]
Section 14(1)
reads as follows:
(1) Subject to subsection (8), no transaction involving the
amalgamation of any business carried on by a registered fund
with
any business carried on by any other person (irrespective of whether
that other person is or is not a registered fund),
or the transfer
of any business from a registered fund to any other person, or the
transfer of any business from any other person
to a registered fund,
shall be of any force or effect unless-
(a)
the
scheme for the proposed transaction, including a copy of every
actuarial or other statement taken into account for the purposes
of
the scheme, has been submitted to the registrar within a prescribed
period of the effective date of the transaction;
(b)
the
registrar has been furnished with such additional particulars or
such a special report by a valuator, as he may deem necessary
for
the purposes of this subsection;
(c)
the
registrar is satisfied that the scheme referred to in
paragraph
(a)
is
reasonable and equitable and accords full recognition-
(i) to
the rights and reasonable benefit expectations of the members
transferring in terms of the rules of a
fund where such rights and
reasonable benefit expectations relate to service prior to the date
of transfer;
(ii) to
any additional benefits in respect of service prior to the date of
transfer, the payment of which has
become established practice; and
(iii) to
the payment of minimum benefits referred to in
section 14A
,
and that the proposed
transactions would not render any fund which is a party thereto and
which will continue to exist if the
proposed transaction is
completed, unable to meet the requirements of this Act or to remain
in a sound financial condition or,
in the case of a fund which is
not in a sound financial condition, to attain such a condition
within a period of time deemed
by the registrar to be satisfactory;
(d)
the
registrar has been furnished with such evidence as he may require
that the provisions of the said scheme and the provisions,
in so far
as they are applicable, of the rules of every registered fund which
is a party to the transaction, have been carried
out or that
adequate arrangements have been made to carry out such provisions at
such times as may be required by the said scheme;
(e)
the
registrar has forwarded a certificate to the principal officer of
every such fund to the effect that all the requirements
of this
subsection have been satisfied.
[4]
A prayer for dismissal of the main application
formed paragraph 1 of the order.
[5]
Section 13 of the Act which provides that ‘the
rules of a registered fund shall be binding on the fund and the
members .
. .’.
[6]
Tek Corporation Provident Fund & others v
Lorentz
1999 (4) SA 884
(SCA) at 894B;
(490/97) [1999] ZASCA 54.
[7]
ABSA Bank Ltd v South African Commercial
Catering and Allied Workers Union National Provident Fund (under
Curatorship)
2012 (3) SA 585
(SCA)
para 26; (679/10) [2011] ZASCA 150.
[8]
Natal Joint Municipal Pension Fund v Endumeni
Municipality
2012 (4) SA 593
(SCA)
para 18; (920/2010) [2012] ZASCA 13.
[9]
References omitted.
[10]
Rosemary Hunter et al
The
Pension Funds Act, 1956
: A Commentary on the Act and Selected
Notices, Directives and Circulars
(2010)
at 284.
[11]
Alfred McAlpine & Son (Pty) Ltd v
Transvaal Provincial Administration
1974
(3) SA 506
(A) at 532H-533A.
[12]
Dated 18 July 2013 at para 8.