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[2012] ZASCA 99
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Investec Employee Benefits Ltd v Marais and Others (580/2011) [2012] ZASCA 99; [2012] 3 All SA 622 (SCA) (1 June 2012)
THE
SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Reportable
Case No: 580/2011
In the matter between
INVESTEC EMPLOYEE BENEFITS LIMITED
…....................................
Appellant
and
STEPHANUS JOHANNES MARAIS
…............................................First Respondent
VANTAGE PENSION ADMINISTRATORS
(PTY) LIMITED
…..........................................................................
Second
Respondent
VUYANI NGALWANA N.O.
…........................................................
Third
Respondent
Neutral citation:
Investec
Employee Benefits Ltd v Marais & others
(580/11)
[2012] ZASCA 99
(1 June 2012)
Coram: Farlam, Cloete, Malan
et
Wallis JJA
et
McLaren AJA
Heard: 17 May 2012
Delivered: 1 June 2012
Summary
:
Pension
Funds – Pension Funds Adjudicator not empowered to extend time
limits laid down in
Prescription Act 68 of 1969
–
Prescription
Act applies
to claims forming subject matter of complaints to
Adjudicator – First respondent’s claim prescribed before
his complaint
lodged with the Adjudicator.
___________________________________________________________
ORDER
___________________________________________________________
On appeal from:
North Gauteng High Court,
Pretoria (Poswa J sitting as a court of first instance):
1. The appeal succeeds with costs.
2. The order of the court a quo is set aside and
replaced with an order in the following terms:
‘
1. The applicant’s
failure to bring its application in the period laid down in
section
30P
(1) of the
Pension Funds Act 24 of 1956
is condoned.
2. The determination and ruling given by the third
respondent on 11 July 2005 in the matter of Stephanus Johannes Marais
v Vantage
Pension Administrators, Investec Employee Benefits Limited,
Vantage Preserver Provident Fund & Vantage Preserver Pension Fund
(Reference number PFA/GA/1048/04/Z/VIA) is set aside and replaced
with the following ruling:
“
The complaint is dismissed.”’
___________________________________________________________
JUDGMENT
___________________________________________________________
FARLAM JA (Cloete, Malan
et
Wallis JJA
et
McLaren AJA concurring):
[1] In this matter the appellant, Investec Employee
Benefits Limited, appeals against the whole of a judgment and order,
including
the order as to costs, granted on 24 May 2010 by Poswa J
sitting in the North Gauteng High Court, Pretoria. In that judgment
he
refused to grant the appellant the relief it had sought in an
application in terms of
s 30P
of the
Pension Funds Act 24 of 1956
to
set aside a determination and ruling given on 11 July 2005 by the
third respondent, in his capacity as the Pension Funds Adjudicator,
in the favour of the first respondent, Dr Stephanus Johannes Marais.
(In what follows and I refer to the
Pension Funds Act as
‘the
Act.’) Leave to appeal to this Court was granted by Van der
Merwe DJP on 11 August 2011.
[2] The first respondent was an investor member in two
funds, the Vantage Preserver Provident Fund and the Vantage Preserver
Pension
Fund, which were administered by the second respondent,
Vantage Pension Administrators (Pty) Ltd, and underwritten by the
appellant
(then known as Fedsure Life Assurance Ltd).
[3] In October 1996 the first respondent made a single
premium investment in the Vantage Preserver Provident Fund and later,
in
April 1999, he made another single premium investment in the
Vantage Preserver Pension Fund. In what follows I shall refer to
these
funds as ‘the provident fund’ and ‘the
pension fund’.
[4] On 12 October 2000 the first respondent sent the
second respondent a letter, which contained the following:
‘
Hereby confirmation that it is my intention
to withdraw the total value from both the above preservation funds
[ie the provident
fund and the pension fund].
Please send the form B to Francois Koekemoer… As
PricewaterhouseCoopers will assist us in obtaining the tax
directives.’
[5] After receiving this letter the appellant applied on
3 November 2000 for the necessary tax directive in respect of the
withdrawal.
Such a directive sets out the amount of tax to be
deducted from the benefit payable to the beneficiary and must be
obtained and
complied with before any payment can be made.
[6] On 9 November 2000 a letter was addressed to the
second respondent on behalf of the first respondent, the material
portion of
which reads as follows:
‘
We have received the form B and [are]
currently assisting the member to obtain the tax directives for
withdrawal of the funds. It
is…[the first respondent’s]
intention only to make the actual withdrawal (receive the funds) on 6
January 2001.
Therefore, no actual payment should be made before that date, even on
receiving of the directives before that date.’
[7] On 7 December 2000, the appellant, which had not yet
received the tax directives it had requested, wrote to the South
African
Revenue Services directives department requesting a response,
whereafter it received various directives relating to the first
respondent’s
withdrawal benefits.
[8] On 1 February 2001 the appellant declared interim
bonuses of 9 per cent for the year ended 31 December 2000 and 6 per
cent for
the year ended 31 December 2001. (As was explained in a
letter sent by the appellant to the first respondent, an interim
bonus
is used for benefit calculations until the actual bonus is
declared.)
[9] On 15 February 2001 the first respondent instructed
the second respondent to arrange for payment of his withdrawal
benefit from
the pension fund on or before 28 February 2001.
[10] On 26 February 2001 the first respondent sent the
appellant a letter in which he referred to his request for withdrawal
and
stated that in the light of an incorrect directive by the South
African Revenue Services he requested that payment ‘be held
back until further notice’ and that ‘the monies be kept
on investment.’
[11] In March 2001 the appellant declared a 0 per cent
bonus for the year ended 31 December 2000 and revised the interim
bonus for
the year ended 31 December 2001 to 0 per cent. According to
the founding affidavit deposed to by the chief executive officer of
the appellant, this was due to the fact that the appellant’s
underlying investment returns were not performing as well as
had
originally been expected.
[12] The appellant contended that in consequence of this
the first respondent’s withdrawal benefits reduced in value.
The
quoted value of the pension fund benefits as at 31 January 2001
was R4 949 558.21 while their value as at 31 May 2001 was R4 487
329.59 and the quoted values of the provident fund benefits as at 31
January 2001 and 31 May 2001 were R99 437.05 and R90 151.01
respectively.
[13] After the first respondent had addressed a query to
the appellant regarding the reduction in value of his withdrawal
benefit
calculations, the appellant wrote to him on 27 June 2001 and
explained the basis on which the reduced calculations as at 31 May
2001 had been arrived at. It was stated that the figures as at 30
January 2001 had been based on the interim bonuses while the
figures
as at 31 May 2001 were based on the declared bonuses.
[14] On 3 July 2001, the first respondent instructed the
appellant to effect payment of his withdrawal benefits. He followed
this
up with a letter dated 11 July 2001 in which he set out his
contentions on the issues in dispute and stated that he was of the
opinion that the appellant should pay him ‘the amounts
indicated effective 31 January 2001 [ie R4 949 558.21 in respect of
the pension fund and R99 437.05 in respect of the provident fund]
plus a market related interest (9 per cent) to date of payment’.
[15] On 25 and 31 July 2001 the appellant paid to the
first respondent his withdrawal benefits as calculated by it on the
footing
that he had withdrawn on 31 May 2001 and in accordance with
the values and tax directives at that date. During the period from 3
July 2001 to 14 September 2001 various letters were exchanged between
the first respondent and the appellant and its attorneys.
In the last
of these letters, a letter sent by the appellant’s attorneys to
the first respondent on 14 September 2001, it
was recorded that a
dispute had arisen between the appellant and the first respondent
regarding his withdrawal benefit from the
pension fund and the
provident fund. The letter continued:
‘
In terms of the rules of the Funds,
disputes which arise between members of the Funds and our client are
required to be resolved
by way of arbitration.
We record that our client has, in their letter to you dated 10
September 2001, consented, and invited you, to participate in an
arbitration in terms of the commercial rules of the Arbitration
Foundation of South Africa in order to resolve the dispute.’
[16] The appellant heard nothing further from the first
respondent until the end of August 2004 when it learnt that the first
respondent
had on 20 July 2004 lodged a complaint, purportedly in
accordance with the provisions of
s 30A
of the
Pension Funds Act 24
of 1956
, as amended, with the third respondent.
[17] The basis of the complaint, which was sent to the
third respondent without its being lodged previously with the funds,
as required
by
s 30
A(l) of the Act, was that the withdrawal benefits
paid to the first respondent by the appellant were R471 515.00 less
than the
total of the amounts quoted to him as at 31 January 2001,
the date on which, according to the complaint, he decided to withdraw
the benefits. The relief he requested from the third respondent was
payment of the amount of R471 515, plus interest from 1 February
2001.
[18] In its initial response to the third respondent
dated 17 September 2004 the appellant contended that the complaint
had been
lodged outside the time period set out in
s 30I
of the Act
(ie, because the act or omission to which the complaint related had
occurred more than three years before the complaint
was received by
the third respondent). The appellant also contended that the first
respondent had failed to show any cause why
the time period should be
extended.
[19] Dealing with the merits of the complaint, the
appellant,
inter alia,
referred to the history of the matter
and contended that the complaint was without merit.
[20] In a further letter sent to the third respondent on
2 June 2005 the appellant raised the further contention that the
first
respondent’s claim had prescribed. The following was
said:
‘
We point out that the date upon which the
Complainant’s claim was finally rejected has no bearing on when
prescription starts
to run. Prescription on a debt begins to run as
soon as the debt is due and the creditor should reasonably have
knowledge of the
identity of the debtor and the facts from which the
debt arises.
If the complainant withdrew from the Funds on 31 March 2001,
[presumably 31 May 2001 was intended], then that is the date upon
which the debt became due and prescription commenced. The
Complainant, in addition, records in writing the details of his
dispute
and intention to take the matter to arbitration as far back
as 11 July 2001.’
In a footnote the appellant added the following:
‘
There is, in addition, correspondence
reflecting the existence of the dispute dated June 2001.’
[21] In his determination and ruling on 11 July 2005 the
third respondent upheld the first respondent’s complaint. He
condoned
the late lodgement of the complaint and held that the first
respondent’s right to the benefits accrued when he notified the
appellant of his intention to withdraw from the funds and that ‘the
relevant date insofar as it relates to the calculation
of [the first
respondent’s] withdrawal values is 12 October 2000’. He
accordingly held that the interim bonus rates
applied and ordered the
appellant ‘to calculate [the first respondent’s]
withdrawal benefits in both funds on the basis
of the interim bonus
rate declared for 2000 at 9 per cent’ and to pay the first
respondent the benefits so computed (less
amounts already paid and
deductions in terms of
sections 37A
and
37D
of the Act) plus interest
at the rate of 15.5 per cent per annum, reckoned from 1 August 2001.
The third respondent said nothing
in his determination about the 6
per cent interim bonus declared for the year ended 31 December 2001,
but in view of the conclusion
to which I have come that his whole
determination must be set aside it is not necessary to deal further
with this aspect.
[22] The third respondent did not deal in his
determination with the point raised by the appellant in its letter of
2 June 2005
that the first respondent’s claim had prescribed
because, at the latest, prescription began to run on 11 July 2001.
[23] Being aggrieved by this determination the appellant
applied on 23 August 2005 in terms of
s 30P
of the Act to what was
then the Transvaal Provincial Division of the High Court,
inter
alia,
for an order setting aside the third
respondent’s determination and ruling and replacing it with the
following:
‘
The complaint is dismissed.’
Because the application was brought one day late the
appellant asked for condonation therefor.
[24] In the founding affidavit, which was deposed by the
appellant’s chief executive officer, the determination and
ruling
were attacked on various grounds,
viz
:
(a) as the complaint was lodged with the third
respondent more than three years after the act or omission to which
the complaint
related, the third respondent was precluded from
dealing with it because no good cause had been shown for him to
condone the lateness;
(b) as the complaint was lodged with the third
respondent more than three years after the alleged debt became due
the third respondent
was also precluded from dealing with it because
the first respondent’s claim had prescribed;
(c) because the determination and ruling, even if it
were correct, ought to have been directed not at the appellant but at
the funds;
(d) because the complaint was not submitted in
accordance with the provisions of the Act and, more particularly,
s
30A
thereof; and
(e) because the third respondent wrongly determined the
date of the first respondent’s withdrawal from the funds, for
the
purposes of his ruling, as 12 October 2000.
[25] The case came before Poswa J in March 2006. In the
judgment delivered by him in May 2010 he held, at the outset, that
the application
had to fail because it was brought out of time (one
day late) and the court had, so he held, no power to condone the late
filing
of the application. He also held that, even if condonation
could be granted, the application had to fail because in his view the
grounds on which the appellant sought to attack the determination and
ruling were not correct. The learned judge’s decision
that he
had no power to grant the appellant condonation for the late filing
of the application has been overtaken by the decision
of this Court
in
Samancor Group Pension Fund v Samancor Chrome
2010 (4) SA
540
(SCA), in which it was held (at 545F-G) that the high court is
entitled to condone non-compliance with statutory time limits such
as
the one presently relevant under
s 30P(1)
of the Act. The first
respondent has conceded that the late launching of the appellant’s
application before the high court
should have been condoned.
[26] Before I proceed to discuss whether the appellant
succeeded in establishing that the third respondent’s
determination
and ruling should be set aside and replaced with that
proposed by the appellant, it is appropriate to set out those
sections of
the Act, as they were worded at the relevant time, which
are material. They are all contained in Chapter VA of the Act, which
was
inserted by
s 3
of Act 22 of 1996 and which is headed
CONSIDERATION AND ADJUDICATION OF COMPLAINTS. In my view the relevant
sections are sections
30A, 30B, 30H(3), 30I, 30M, 30O(1) and 30P.
They read as follows:
‘
30A Submission and consideration of
complaints –
(1) Notwithstanding the provisions of the rules of any fund, a
complainant shall have the right to lodge a written complaint with
a
fund or an employer who participates in a fund.
(2) A complaint so lodged shall be properly considered and replied to
in writing by the fund or the employer who participates in
a fund
within 30 days after the receipt thereof.
(3) If the complainant is not satisfied with the reply contemplated
in subsection (2), or if the fund or the employer who participates
in
a fund fails to reply within 30 days after the receipt of the
complaint the complainant may lodge the complaint with the
Adjudicator.
30B Establishment of Office of Pension Funds Adjudicator –
(1) There is hereby established an office which shall be known as the
Office of the Pension Funds Adjudicator.
(2) The functions of the Office shall be performed by the Pension
Funds Adjudicator.
30H Jurisdiction and prescription –
…
(3) Receipt of a complaint by the Adjudicator shall interrupt any
running of prescription in terms of the Prescription Act, 1969
(Act
No 68 of 1969), or the rules of the fund in question.
30I Time limit for lodging of complaints –
(1) The
Adjudicator shall not investigate a complaint if the act or omission
to which it relates occurred more than three years
before the date on
which the complaint is received by him or her in writing.
(2) If the complainant was unaware of the act or omission
contemplated in subsection (1), the period of three years shall
commence
on the date on which the complainant became aware or ought
reasonably to have become aware of such occurrence, whichever occurs
first.
(3) The Adjudicator may on good cause shown or of his or her own
motion –
(
a
) either before or after expiry of any period prescribed by
this Chapter, extend such period;
(
b
) condone non-compliance with any time prescribed by this
Chapter.
30M. Statement by Adjudicator regarding determination –
(1) After the Adjudicator has completed an investigation, he or she
shall send a statement containing his or her determination
and the
reasons therefor, signed by him or her, to all parties concerned as
well as to the clerk or registrar of the court which
would have had
jurisdiction had the matter been heard by a court.
30O. Enforceability of determination –
(1) Any
determination of the Adjudicator shall be deemed to be a civil
judgment of any court of law had the matter in question
been heard by
such court, and shall be so noted by the clerk or the registrar of
the court, as the case may be.
30P Access to court –
(1) Any party who feels aggrieved
by a determination of the Adjudicator may, within six weeks after the
date of the determination,
apply to the division of the Supreme Court
which has jurisdiction, for relief, and shall at the same time give
written notice of
his or her intention so to apply to the other
parties to the complaint–
(2) The division of the Supreme Court contemplated in subsection (1)
shall have the power to consider the merits of the complaint
in
question, to take evidence and to make any order it deems fit.’
[27] In view of the fact that I have come to the
conclusion that the appellant’s contention, that the first
respondent’s
claim for payment of the amounts allegedly
incorrectly deducted from the benefits to which he was entitled had
prescribed, is correct,
it is unnecessary for me to deal with the
appellant’s other contentions.
[28] It is clear from s 30H(3) of the Act that the
Prescription Act 68 of 1969
applies to claims of the nature with
which we are concerned. That is why the receipt of a complaint by the
third respondent will
interrupt
prescription in terms of the
Prescription Act. The
use of the word ‘interrupt’
indicates that prescription would otherwise continue running in
respect of the complaint
referred to.
[29] The third respondent’s power under
s 30I(3)
to extend periods and to condone non-compliance with time limits is
restricted to periods and time limits prescribed by the Act.
Although
there is a similarity between
s 12(3)
of the
Prescription Act
and
s 30I of the Act, the sections must not be conflated The Acts
serve different and discrete functions. The Adjudicator’s
powers
under the Act do not extend to the provisions of the
Prescription Act: cf
Premier Western Cape v Lakay
2012 (2) SA
1
(SCA) paras 7 and 10.
[30] It was contended on behalf of the first respondent
that on a proper construction of the Act the
Prescription Act does
not apply to complaints received by the third respondent. Reference
was made to
s 16(1)
of the
Prescription Act which
provides that the
provisions of chapter 3 of that Act are to apply to any debt arising
after the commencement of the Act,
‘
save insofar as they are inconsistent with
the provisions of any Act of Parliament which prescribes a specified
period within which
a claim is to be made or an action is to be
instituted in respect of a debt or imposes conditions on the
institution of an action
for the recovery of a debt.’
[30] In my opinion this subsection does not assist the
first respondent because s 30I of the Act is not inconsistent with
the
Prescription Act. A
claim which is the subject of a complaint to
the Adjudicator and which has not prescribed (because, for example,
the creditor is
under an impediment), will still have to be lodged in
the period prescribed in
s 30I
and may not be considered by the
Adjudicator unless he or she grants an extension in terms of
s 30I(3)
to enable him or her to investigate the complaint. Totally different
language would, however be required if it was the intention
of the
legislature to empower the Adjudicator to extend a period of
prescription which has already run its course and thus to deprive
an
erstwhile debtor against whom a claim has been extinguished of its
right to plead prescription.
[32] In the present case it is in my view clear that
whatever claim the first respondent may have had against the
appellant has
prescribed. I do not agree with the contention advanced
by his counsel that prescription only began running when he received
payment
of a portion of the amount claimed by him at the end of July
2001. If he was entitled to claim the full amount from the appellant,
the corresponding debt owed to him by the appellant is deemed, in
terms of
s 12(3)
of the
Prescription Act, to
have been due when he
had ‘knowledge of the identity of the debtor and of the facts
from which the debt [arose]’. The
identity of the debtor was
clear and the relevant facts were all set out in the appellant’s
letter of 27 June 2001. It follows
that prescription was already
running at least from the time when he received that letter. It is
thus clear that prescription started
to run in respect of his claim
more than three years before he lodged his complaint with the third
respondent which would have
interrupted prescription. His claim, if
he had one, accordingly prescribed before his complaint was lodged.
It follows that the
appeal must succeed on this point.
[33] I mentioned earlier that the judgment in the court
a quo
was delivered in May 2010, that is to say, over four
years after the matter was argued and judgment reserved. Such delay,
which
is not explained in the judgment, is totally unacceptable. See
Exdev (Pty) Ltd v Pekudei Investments (Pty) Ltd
2011 (2) SA
282
(SCA) paras 23, 24 and 25. The delay in this case was much longer
than the delay in that case. In fairness to the judge it must
be
pointed out that in the judgment granting leave to appeal to this
court, which was delivered by Van der Merwe DJP, reference
is made to
the fact that the judge had been ‘on sick leave for a
considerable period of time’. Presumably at least
part of the
delay was caused thereby.
[34] The following order is made:
1. The appeal succeeds with costs.
2. The order of the court
a quo
is set aside and
replaced with an order in the following terms:
‘
1. The applicant’s
failure to bring its application in the period laid down in
section
30P
(1) of the
Pension Funds Act 24 of 1956
is condoned.
2. The determination and ruling given by the third
respondent on 11 July 2005 in the matter of Stephanus Johannes Marais
v Vantage
Pension Administrators, Investec Employee Benefits Limited,
Vantage Preserver Provident Fund & Vantage Preserver Pension Fund
(Reference number PFA/GA/1048/04/Z/VIA) is set aside and replaced
with the following ruling:
“
The complaint is dismissed.”’
_________________
IG FARLAM
JUDGE OF APPEAL
Appearances:
For Appellant : B Berridge SC
Instructed by:
Werksmans Attorneys c/o Brazington Shepperson &
McConnell, Pretoria
Symington & De Kok, Bloemfontein
For First Respondent : PJJ de Jager SC (with him R
Strydom)
Instructed by:
Surita Marais Attorneys, Pretoria
E. G. Cooper Majiedt Inc., Bloemfontein