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[2023] ZAKZPHC 34
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Tongaat Hulett Sugar South Africa Limited v Tongaat Hulett Pension Fund 2010 and Others (AR27/2022) [2023] ZAKZPHC 34 (3 March 2023)
IN
THE HIGH COURT OF SOUTH AFRICA
KWAZULU-NATAL
DIVISION, PIETERMARITZBURG
CASE
NO. AR27/2022
In
the matter between:
TONGAAT
HULETT SUGAR SOUTH AFRICA LIMITED
APPELLANT
and
TONGAAT
HULETT PENSION FUND 2010
FIRST RESPONDENT
MOMENTUM
RETIREMENT ADMINISTRATORS
(PTY)
LTD
SECOND RESPONDENT
NQABOMZI
MARA MAYOLA
THIRD RESPONDENT
THE
PENSION FUNDS ADJUDICATOR
FOURTH RESPONDENT
Coram:
Seegobin et P Bezuidenhout JJ and Thobela-Mkhulisi AJ
Heard:
25
November 2022
Delivered:
03 March 2023
ORDER
On
appeal from:
the KwaZulu-Natal Division of the High Court,
Pietermaritzburg (Hadebe J sitting as court of first instance):
1.
The appeal is upheld.
2.
The determination of the fourth respondent, dated 16 July 2020 in
terms whereof the first
respondent was ordered to pay to the third
respondent her withdrawal benefit, inclusive of fund return earned on
such benefit calculated
from August 2019 to date of payment is hereby
reviewed and set aside in terms of
section 30P
of the
Pension Funds
Act 24 of 1956
.
3.
The complaint of the third respondent lodged with the fourth
respondent on 12 September 2019
is hereby dismissed.
4.
The third respondent is directed to pay the costs of the appeal, such
costs to include the
costs of senior counsel.
JUDGMENT
The
Court
Introduction
[1]
This is an appeal against the judgment and
order of the Pietermaritzburg High Court (Hadebe J) dismissing the
appellant’s
application to set aside a determination of the
fourth respondent dated 16 July 2020. Leave to appeal having been
refused by the
court
a quo
,
the present appeal is with leave of the Supreme Court of Appeal
granted on 2 November 2021.
[2]
The fourth respondent’s
determination, issued in terms of s 30M of the Pension Funds Act 24
of 1956 (the Pensions Act), ordered
the first respondent to pay the
third respondent’s pension benefits, as at 27 August 2019,
standing in the amount of R2 314 022.58,
which benefits the
appellant had caused to be withheld by the first respondent in terms
of s 37D(1)
(b)
(ii)
of the Pensions Act.
[3]
The primary issue on appeal is whether the
court
a quo
erred in dismissing the appellant’s application on ‘procedural
grounds’ (without going into the merits) and by
failing to
consider that the application before it was an appeal in the ‘wide
sense’ and not a review regulated by
the provisions of Uniform
rule 53.
The parties
[4]
The appellant is Tongaat Hulett Sugar South
Africa Limited, a private company with its principal place of
business in KwaZulu-Natal.
[5]
The first respondent is the Tongaat Hulett
Pension Fund 2010 (the pension fund), a pension fund registered in
terms of the Pensions
Act.
[6]
The second respondent is the Momentum
Retirement Administrators (Pty) Ltd, the administrators of the
pension fund (the administrators).
[7]
The third respondent is a former employee
of the appellant, Ms Nqabomzi Mara Mayola (Ms Mayola), and a
contributor to the pension
fund.
[8]
The fourth respondent is the adjudicator
appointed and performing its functions in terms of the Pensions Act.
[9]
The first, second and fourth respondents
did not participate in these proceedings.
Factual background
[10]
From 2006 until her resignation on 8 August
2019, Ms Mayola was employed by the appellant. At the time of her
resignation, Ms Mayola
held the position of warehouse and
distribution manager within the appellant’s marketing, sales
and distribution department.
[11]
At the heart of the dispute between the
appellant and Ms Mayola are allegations made on 19 March 2019 in an
anonymous tip-off to
the appellant, in which it was suggested that
for a period of 18 months, Ms Mayola authorised payments to a service
provider when
such service provider performed no services at all for
the appellant. The service provider alleged to have been paid by the
appellant
through fraudulent and unlawful conduct on the part of Ms
Mayola is DeeTee Transport (Pty) Ltd (DeeTee). The independent
forensic
investigators who were appointed by the appellant to
investigate the allegations, deposed to an affidavit which was filed
with
the South African Police Service (SAPS) by the appellant when it
laid criminal charges against Ms Mayola. The appellant incorporates
this affidavit by reference into the founding affidavit.
[12]
As at March 2019 or the beginning of April
2019, the appellant was informed by the forensic investigators that
preliminary investigations
confirmed (a) that substantial payments
had been made to DeeTee, and (b) that no services justifying these
payments had been provided.
[13]
The forensic investigators’ affidavit
detailed that from January 2017 to March 2019 the total amount paid
to DeeTee as a consequence
of Ms Mayola’s unlawful
authorisation of invoices was the sum of R8 635 483.84. The affidavit
further described how this
amount came to be paid to DeeTee. In
brief, DeeTee transported the appellant’s sugar on instructions
received from the appellant.
However, Ms Mayola had informed a third
party transporter whose services were also utilised by the appellant,
namely, Kempston
Logistics, that sugar transported by DeeTee had been
stolen in transit. DeeTee was accordingly liable to the appellant for
the
lost sugar. She further asserted that DeeTee’s claim for
the lost sugar had been repudiated by its insurers and that DeeTee
therefore now owed the appellant the sum of R1.2 million. However,
since DeeTee did not have the money to pay the appellant, Kempston
Logistics agreed to take over loads that Ms Mayola indicated would be
given to DeeTee in order to assist it to pay the amount owed
to the
appellant but at a reduced rate. The difference was to be paid over
to the appellant but this did not happen. The investigations
revealed
that Ms Mayola provided DeeTee with the details of invoices received
from Kempston Logistics, that DeeTee then issued
invoices for the
same ‘route’ as that invoiced by Kempston Logistics and
that Ms Mayola thereafter approved DeeTee’s
invoices for
payment.
[14]
As a result of the preliminary
investigations, the appellant deemed it prudent and appropriate to
suspend Ms Mayola pending the
finalisation of the investigations. A
letter of suspension was handed to Ms Mayola on 12 April 2019. The
said letter afforded Ms
Mayola an opportunity to make representations
to the appellant on why she should not be suspended. Ms Mayola duly
made representations
to the appellant. Notwithstanding these
representations, she was suspended with immediate effect on full pay
without any loss of
benefits.
[15]
Ms Mayola proceeded to refer her suspension
to the Commission for Conciliation, Mediation and Arbitration (CCMA)
with the CCMA scheduling
a conciliation meeting between the appellant
and Ms Mayola for 8 August 2019. On 8 August 2019 the matter was
dealt with by the
CCMA but remained unresolved. The appellant
thereafter invited Ms Mayola to attend a meeting with it to enable
the appellant to
discuss the matter with her. She was also advised
that disciplinary charges would be instituted against her and that a
disciplinary
enquiry would be held shortly thereafter.
[16]
Ms Mayola did not attend the aforesaid
meeting but instead resigned with immediate effect on the same day.
[17]
The investigations conducted by the
forensic investigators were comprehensive in all respects and
extremely onerous due to the nature
of the matter. There were
substantial records which had to be obtained and perused bearing in
mind the seniority of Ms Mayola who,
prior to her suspension, was in
a position to manipulate and conceal transactions. The investigation
involved a substantial review
of documentation running into thousands
of pages, cross-referencing and checking. It also involved analysing
the hard drive of
the computer that was utilised by Ms Mayola in her
work. The hard drive produced substantial information and emails that
had to
be cross-checked.
[18]
On 10 July 2019, the appellant was advised
by the forensic investigators that their investigations thus far had
uncovered significant
fraudulent and dishonest conduct on the part of
Ms Mayola. The appellant was further informed that an analysis of Ms
Mayola’s
email account, as contained on the appellant’s
network, provided a significant amount of evidence of wrongdoing as
evidenced
by her own bank account statements. These statements
revealed significantly high and suspicious amounts in her account. An
April
2016 bank statement for instance reflected that, apart from her
salary of R46 354.56 which she received as a full-time employee,
an
amount of approximately R94 000 was paid into her account. This
comprised the sum of R38 000 in cash deposits and the balance
by
virtue of electronic transfers. According to the forensic
investigators, further bank statements and records belonging to Ms
Mayola could only be obtained under subpoena, something that only the
SAPS was empowered to do.
[19]
On 16 August 2019, the appellant laid
formal criminal charges against Ms Mayola at the Montclair Police
Station under Cas 151/08/2019.
The charges were supported by a 32
page affidavit deposed to by Mr Aubrey McFarland of Moulton and
McFarland, the private investigators
acting on behalf of the
appellant. According to the appellant, the supporting annexures and
extracts of its financial and administrative
records are in excess of
a thousand pages and comprise about nine lever arch files.
[20]
In a letter dated 20 August 2019, the
appellant requested the pension fund to
‘
withhold
payment of any amounts standing to the credit of (the third
respondent) in her Pension Fund pending the finalisation of
the
investigation and civil proceedings that were to be instituted and
also pending the criminal proceedings that were instituted
for the
amounts misappropriated from the (applicant).’
[21]
The pension fund withheld Ms Mayola’s
pension benefit and informed her that the payment of her pension
benefits was being
withheld pending the outcome of the criminal/civil
proceedings instituted by the appellant.
[22]
In a letter dated 29 August 2019 penned by
Ms Davidson, the pension fund’s principal executive officer,
the pension fund furnished
Ms Mayola with the appellant’s
request made to it to withhold payment, the decision of the board of
trustees of the pension
fund to withhold payment, an extract of the
rules of the pension fund stating that no period was prescribed for
the withholding
of benefits, provided that there was no undue delay,
as well as the affidavit filed with the SAPS on the basis of which
the pension
fund formed a
prima facie
view that Ms Mayola committed the acts of misconduct contained in the
affidavit filed with the SAPS. Finally, the letter stated
that Ms
Mayola was welcome to address all queries regarding the pension fund
to Ms Davidson. It further informed Ms Mayola that
the fund was
independent of the appellant and that Ms Davidson could assist with
any queries that Ms Mayola may have in relation
to the appellant.
[23]
Ms Mayola did not approach Ms Davidson with
any queries. However, on 12 September 2019, she lodged a complaint
with the adjudicator
in which she described the appellant’s
decision to withhold her pension benefits as ‘unjust,
oppressive and inequitable’
and a personal attack on her by an
entity that she described as being ‘rotten to the core’.
It is appropriate to set
out a brief extract from Ms Mayola’s
response to the allegations made against her by the appellant:
‘
My
response to the matter is the following: Huletts is a biased and
untruthful organization that is rotten to the core with no management
process and policies. This investigation was a personal attack on me
as a professional and would attribute it to race and gender
violation. My manager is allowed to verbally provide evidence and be
allowed to not account for anything in the company. An organization
that has no job descriptions or KPI for senior management is a
serious concern. An organization that does have NO performance
management policy yet is quick to attribute blame to someone lacks
objectivity and is prone to false accusations and scapegoats.’
[24]
Following this complaint the adjudicator
invited representations from all parties and thereafter issued his
determination as dealt
with hereunder.
The adjudicator’s
determination
[25]
The adjudicator considered the complaint
and submissions filed by Ms Mayola. He further considered the
presentations made by the
appellant, the pension fund and the
administrators. Ms Mayola makes no allegations against the
adjudicator of procedural unfairness
in the finalisation of the
determination.
[26]
The adjudicator identified the issue to be
whether the withholding of the pension benefit by the pension fund
was lawful. In considering
the issue he reviewed rule 4.1 of the
rules of the pension fund and s 37D(1)
(b)
(ii)
and found that it is ‘permissible for a board of a fund to
withhold a benefit in terms of section 37D(1)
(b)
(ii)
of the (Pensions Act)’. The determination concludes that the
pension fund made a decision to withhold the pension benefits
without
affording Ms Mayola an opportunity to make representations before
making its decision. The adjudicator found that the pension
fund
deprived itself of hearing Ms Mayola’s side. Had it afforded
her an opportunity to be heard, it would have realised
that this was
not a case that warrants the withholding of pension benefits.
Likening the withholding of benefits to anti-dissipation
orders, the
adjudicator accepted that a well-grounded apprehension of harm was
required before a benefit was withheld because of
the draconian
nature of such decision. The adjudicator concluded that the pension
fund failed in its fiduciary duty to Ms Mayola.
Proceedings
in the court
a quo
[27]
The relief sought in the court
a quo
was the following:
‘
1.
Pending the finalisation of the criminal proceedings instituted
against the Third Respondent under
case number Montclair
CAS151/08/2019 at the South African Police Services, Montclair Police
Station, KwaZulu Natal, and / or any
civil proceedings instituted by
the applicant against the Third Respondent (within 30 [thirty] days
from the date of such Order)
alternatively, pending the finalisation
of the review proceedings referred to in paragraph 4 below, the First
Respondent is interdicted
and prohibited to pay to the Third
Respondent any /all amounts (including any withdrawal benefit) held
by the First and/or Second
Respondents for the credit of the Third
Respondent, and;
2.
Reviewing and/or setting aside the determination of the Fourth
Respondent in terms of
Section 30P
of the
Pension Funds Act, as
amended (“the Act”), dated 16 July 2020 in terms whereof
the First Respondent was ordered to pay to the Third Respondent
her
withdrawal benefit, inclusive of fund return earned on such benefit
calculated from August 2019 to date of payment (“the
determination of the Fourth Respondent”), and;
3.
Dismissing the complaint of the Third Respondent lodged with the
Fourth Respondent on 12
September 2019;
alternatively to
prayers 2 and 3 above
4.
The Applicant is ordered to, within 30 days from the date of an order
being granted herein
in terms of paragraph 1 above, commence with
proceedings to review and/or set aside the determination of the
Fourth Respondent
and/or to institute any civil proceedings against
the Third Respondent the Applicant may deem appropriate and or
necessary;
5.
Costs against the Third Respondent and, insofar as the other
Respondent are concerned, costs
only against any of the other
Respondents opposing this application;
6.
Further and/or alternative relief.’
[28]
The court
a quo
handed down an
ex tempore
judgment and not surprisingly, the judgment was brief.
The
judgment of the court
a quo
does not deal with the interdict aspect at all. It merely records
that the arguments by the parties ‘inevitably spilled over
into
the merits’ without making it clear whether the appellant had
abandoned the interdictory relief sought on the papers.
The judgment
simply observes that the appellant relies on an appeal in the wide
sense and concludes that whilst s 30P permits such
an appeal, the
court cannot ‘turn a blind eye to non-compliance for no
apparent reason’, without identifying the nature
and extent of
the non-compliance by the appellant and without any discussion of the
reasons why the court cannot condone such non-compliance
in the
exercise of its discretion. Since the founding affidavit did not
state explicitly that what was being sought was an appeal
in the wide
sense, the court concluded that ‘it is unfair for both the
court and the opposing party to be expected to…decipher
what
an applicant in any given case seeks exactly from the court’.
[29]
In the result, the court
a
quo
dismissed the entire application
with costs ‘on the point of procedure’.
[30]
The appellant contended that the question
whether the adjudicator acted within its powers when ordering the
first respondent to
pay Ms Mayola her pension benefits, is one that
must be challenged in terms of s 30P of the Pensions Act which
provides for a ‘wide
appeal’. On the other hand, the
argument advanced on behalf of Ms Mayola was that first, the decision
of the adjudicator
was administrative and fell to be reviewed in
terms of the Promotion of Administrative Justice Act 3 of 2000
(PAJA), second, that
before approaching the courts the appellant was
compelled to exhaust its internal remedies provided for in s 230 of
the Financial
Sector Regulation Act 9 of 2017 (FSRA) read with rules
22 to 28 of the Financial Service Tribunal Rules, and third, that the
appellant
could only approach this court if it was exempted from
exhausting the internal remedies provided for in FSRA. Since it did
not
obtain such exemption the application to the court
a
quo
was premature.
In this court
[31]
In heads of argument filed by the appellant
in this appeal a draft amended order is attached. Paragraph 1 of the
draft order remains
unchanged when compared to the amended notice of
motion. Paragraph 2 was amended to read that:
‘
The
determination of the Fourth Respondent, dated 16 July 2020 in terms
whereof the First Respondent was ordered to pay to the Third
Respondent her withdrawal benefit, inclusive of fund return earned on
such benefit calculated from August 2019 to date of payment
is hereby
reviewed and set aside in terms of
Section 30P
of the
Pension Funds
Act, as
amended.’
Paragraph 3 is similarly
slightly amended, and all of the relief sought in the alternative was
deleted.
[32]
It follows, both in the court
a
quo
and in this court, that the
appellant sought, in the first instance, an interdict that prevents
the pension fund from paying Ms
Mayola’s pension benefits,
pending finalisation of the criminal and civil proceedings against
her.
[33]
Ms Mayola also brought an application to
strike out certain allegations, however, this application was
dismissed by the court
a quo
.
There is no counter-appeal against this order of the court
a
quo
and the record of appeal does not
contain the papers in the application to strike out. Accordingly,
nothing further needs to be
said about the application to strike out
or the order dismissing it.
Section 37D(1)
(b)
(ii)
of the Pensions Act
[34]
The decision by the pension fund not to pay Ms Mayola her pension
benefits was made in
terms of s 37D(1)
(b)
(ii) of the Pensions
Act. This section provides as follows:
‘
37D. Fund may make
certain deductions from pension benefits.
(1) A
registered fund may—
(a) .
. .
(b)
deduct any amount due by a member to his employer on the date of his
retirement or on which he ceases to
be a member of the fund, in
respect of—
(i) . . .
(ii)
compensation (including any legal costs recoverable from
the member
in a matter contemplated in subparagraph (bb)) in respect of any
damage caused to the employer by reason of any theft,
dishonesty,
fraud or misconduct by the member, and in respect of which—
(aa)
the member has in writing admitted liability to the employer; or
(bb)
judgment has been obtained against the member in any court, including
a magistrate’s court,from any
benefit payable in respect of the
member or a beneficiary in terms of the rules of the fund, and pay
such amount to the employer
concerned.’
[35]
The object
of the section (as noted in a number of cases) is to protect the
employer’s right to pursue the recovery of money
misappropriated by its employees. Ms Mayola has neither admitted
liability in this case nor has she dealt pertinently with the
serious
allegations made against her by the appellant. On the other hand, the
appellant has not obtained judgment against her in
any court.
However, to give effect to the purpose of the section, the Supreme
Court of Appeal in
Highveld
[1]
reasoned that the wording of s 37(1)
(b)
(ii)
must be interpreted to include the power to withhold payment of a
member’s pension benefits ‘pending the determination
or
acknowledgment of such member’s liability’.
[36]
The following passages from
Highveld
are instructive:
‘
[16]
It has been stated in a number of cases that the object of s
37D(1)
(b)
is
to protect the employer's right to pursue the recovery of money
misappropriated by its employees. This approach is, in
my view,
supported by the plain wording of the section and is, with
respect, correct.
[17]
However, a practical problem threatens the efficacy of the remedy
afforded by the section. In many a case employers only suspect
dishonesty on the date of termination of an employee's service and
fund membership with the consequence that pension benefits are
paid
before the suspected dishonesty can be properly investigated.
Furthermore, it has to be accepted as a matter of logic
that it is
only in a few cases that an employer will have obtained a judgment
against its employee by the time the latter's employment
is
terminated because of the lengthy delays in finalising cases in the
justice system. The result, therefore, is that an employer
will find
it difficult to enforce an award made in its favour by the time
judgment is obtained against him.
[18]
These practicalities lead me to disagree with the submissions for the
respondent, inter alia, that the tense used by the legislature
in s
37D(1)
(b)
(ii)
(aa)
and
(bb)
, in the
words '
has
in writing
admitted
liability'
and 'judgment
has been obtained
' reflects an intention
that either proof of liability must be available on termination of
the employment contract. I similarly
have a difficulty with the
contention that the words 'as soon as possible' in rule 7.3 require
payment of the pension benefits
to be effected immediately upon
termination of an employee's service.
[19]
Such an interpretation would render the protection afforded to
the employer by s 37D(1)
(b)
meaningless,
a result which plainly cannot have been intended by the legislature.
It seems to me that to give effect to the
manifest purpose of the
section, its wording must be interpreted purposively to include the
power to withhold payment of a member's
pension benefits pending the
determination or acknowledgment of such member's liability. The Funds
therefore had the discretion
to withhold payment of the respondent's
pension benefit in the circumstances. I dare say that such discretion
was properly exercised
in view of the glaring absence of any serious
challenge to the appellant's detailed allegations of dishonesty
against the respondent.’
[2]
(Footnotes
omitted.)
[37]
The appellant relies on the interpretation of s
37D(1)
(b)
in
Highveld
for its case that Ms Mayola’s pension benefits
be withheld by the pension fund. Interestingly, in the email dated 29
August
2019 the pension fund itself cited
Highveld
as the
basis for its decision.
[38]
At the commencement of the hearing of the appeal we enquired from
counsel for the appellant,
Mr Wallis SC, why the interdictory relief
neither features in the judgment nor in the heads of argument filed
by the parties in
this appeal, but remains included in the draft
order attached to the heads of argument filed for the appellant in
this appeal.
Mr Wallis explained that at the hearing in the court
a
quo,
the appellant abandoned the relief for the interdict and in
this court, it only seeks the relief in paragraphs 2, 3 and 4 of the
draft order. Counsel for Ms Mayola, Mr Gumbi, agreed with this
explanation.
Analysis
and findings
[39]
The first question we consider is whether the adjudicator’s
determination and the
challenge against it in terms of s 30P of the
Pensions Act, constitutes administrative action, the challenge to
which must be brought
in terms of PAJA, or whether, when issuing a
determination, the adjudicator performs a judicial function the
challenge to which
would be an appeal in the wide sense.
[40]
In its
founding affidavit, the appellant alleges that the adjudicator did
not consider relevant considerations, took into account
irrelevant
considerations and made errors of law in breach of s 6 of PAJA.
However, by the time the matter was heard, the appellant
limited its
challenge to an appeal in terms of s 30P of the Pensions Act only and
did not pursue a review in terms of PAJA. It
is well established that
‘[w]
here
a litigant relies upon a statutory provision, it is not necessary to
specify it, but it must be clear from the facts alleged
by the
litigant that the section is relevant and operative
’.
[3]
Based on this, we find that the appellant was not obliged to specify
that s 30P of the Pensions Act was applicable. Mr Gumbi
accepted
that the application was brought in terms of s 30P of the Pensions
Act, and the reference to PAJA, later abandoned by
the appellant,
was, in our view, not fatal to the appeal before us.
[41]
Ms Mayola contends that the challenge must be a review in terms of
PAJA, and that s 230
of FSRA dictates that the appellant must first
exhaust the appeal procedure to the Financial Service Tribunal before
approaching
the courts for any relief.
[42]
Section 30P of the Pensions Act provides as follows:
‘
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
High 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
High Court contemplated in subsection (1) may consider the
merits of the complaint made to the
Adjudicator under section
30A (3) and on which the Adjudicator’s determination
was based, and may make any
order it deems fit.
(3) Subsection (2) shall
not affect the court’s power to decide that sufficient evidence
has been adduced on which a
decision can be arrived at, and to order
that no further evidence shall be adduced.’
[43]
The Supreme
Court of Appeal had occasion to consider the provisions of s 30P
of the Pension’s Act in
Meyer
v Iscor Pension Fund.
[4]
It endorsed
[5]
the views
expressed in
Tikly
and others v Johannes NO and others,
[6]
where Trollip J held that an appeal usually falls into one of the
following three categories:
(i) an appeal in the wide
sense, that is, a complete re-hearing of, and fresh determination on
the merits of the matter with or
without additional evidence or
information . . .;
(ii) an appeal in the
ordinary strict sense, that is, a re-hearing on the merits but
limited to the evidence or information on which
the decision under
appeal was given, and in which the only determination is whether that
decision was right or wrong . . .;
(iii) a review, that is,
a limited re-hearing with or without additional evidence or
information to determine, not whether the decision
under appeal was
correct or not, but whether the arbiters had exercised their powers
and discretion honestly and properly . . .’
[44]
The court in
Meyer
went on to find that:
‘
From
the wording of section 30P(2) it is clear that the appeal to the High
Court contemplated is an appeal in the wide sense. The
High Court is
therefore not limited to a decision whether the Adjudicator’s
determination was right or wrong. Neither is
it confined to the
evidence or the grounds upon which the Adjudicator’s
determination was based. The court can consider the
matter afresh and
make any order it deems fit. At the same time, however, the High
Court’s jurisdiction is limited by section
30P(2) to a
consideration of “the merits of the complaint in question”
.’
[7]
[45]
We
are accordingly satisfied that an appeal in terms of s 30P is an
appeal in the ‘wide sense’. Although s 30P provides
for
an appeal in the wide sense, it does not preclude a review against
the decision of the adjudicator on the basis of other sections
in the
Pensions Act. In
Municipal
Employees' Pension Fund and another v Mongwaketse and others
[8]
an
appeal in terms of s 30P of the Pensions Act and a review in terms of
PAJA (alternatively legality) was instituted by the relevant
pension
fund. The court hearing the matter had no issue with the fact that a
review and an appeal were instituted. On appeal to
the Supreme Court
of Appeal,
[9]
Wallis
JA (writing for the majority), stated that it would be
‘
difficult
to envisage when, if at all, challenges to determinations by the
adjudicator will be subject to judicial review or whether
PAJA can
have any application’. He was, however, ‘not prepared to
go so far as to say that there are no circumstances
in which the
adjudicator’s decision would be subject to judicial review’.
The matter then proceeded to the Constitutional
Court,
[10]
where Rogers AJ dealt with the merits of the review in terms of PAJA
(alternatively legality) and the appeal in terms of s 30P.
No view
was expressed on the issue of whether it was competent to bring an
appeal and a review against an adjudicator’s determination.
We
see no reason why an appeal in terms of s 30P cannot stand alongside
a review in terms of PAJA as well.
[46]
In the present matter, the court
a
quo
was simply faced with an appeal in
terms of s 30P only, and not a review whether under PAJA or on any
other basis.
[47]
In
Old
Mutual v Pensions Fund Adjudicator
[11]
the court held that the function performed by the adjudicator is a
judicial one as the adjudicator is a functionary who resolves
disputes by the application of law in a fair public hearing and 'in
an independent and impartial manner’. We accept this
characterisation.
[48]
This
conclusion by the court is buttressed by s 30O of the Pensions Act
which states that 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’. With reference
to s 30P,
inter
alia
,
the court in
Otis
[12]
also observed that
‘
It
is apparent . . . that the intention of the legislature was to
constitute a complaints forum which would, for all practical
purposes, be equivalent to a court of law but which was not bound by
the formalities of procedure which might ordinarily have the
effect
of delaying adjudication and causing the parties to incur substantial
expenses for legal representation.’
It
follows, and as was observed in
Old
Mutual,
[13]
that a warrant of execution may be issued on the strength of any
determination made by the adjudicator.
[49]
The FSRA came into effect on 1 April 2018.
The preamble describes its object to include regulating and
supervising financial product
providers and financial service
providers; establishing the Financial Services Tribunal as an
independent tribunal; and conferring
powers on it to reconsider
decisions by financial sector regulators, the Ombud Council and
certain market infrastructures. In s
7 of the FSRA the object is
described to
inter alia
‘achieve a stable financial system that works in the interests
of financial customers and that supports balanced and sustainable
economic growth’.
[50]
Ms Mayola relies on s 230 of the FSRA to
which we turn to next. It reads as follows:
‘
30.
Applications for reconsideration of decisions.
(1)
(
a
) A person aggrieved by a decision may apply to the Tribunal
for a reconsideration of the decision by the Tribunal in accordance
with this Part.
(
b
)
A reconsideration of
a decision in terms of this Part constitutes an internal
remedy as
contemplated in
section 7
(2) of the
Promotion of
Administrative Justice Act.
(2)
The application must be made—
(
a
)
if the
applicant requested reasons in terms of
section 229
, within 30
days after the statement of reasons was given to the person; or
(
b
)
in all other cases, within 60 days after the applicant was notified
of the decision, or such longer period as may on good cause
be
allowed.
(3)
An application in terms of subsection
(1) must be made in accordance with the Tribunal rules.’
[51]
A ‘decision’ as referred to in
s 230(1)
, is defined in
s 218
and it includes ‘a decision of a
statutory ombud in terms of a financial sector law in relation to a
specific complaint by
a person’. The adjudicator is included in
the definition of a ‘statutory ombud’ contained in
s 1
of
FSRA.
Section 230(1)
does not repeal s 30P of the Pensions Act. The
two co-exist and the appellant had an election to make as to which
section it wanted
to proceed in terms of. It elected to utilise the
appeal procedure in s 30P of the Pensions Act and not the
reconsideration
procedure in s 230 of FSRA. We find no reason why,
having made the election, the appellant was obliged to explain why it
did not
utilise the reconsideration process in s 230 of FSRA, as was
contended by Mr Gumbi during argument. Mr Gumbi, however, whilst
conceding
that s 30P provides for an appeal in the wide sense,
nonetheless contended that the appellant has failed to make out a
case for
such an appeal to be granted. We, however, hold the view
that the Pensions Act, specifically s 30P thereof, continues to
apply.
[52]
In
heads of argument prepared on behalf of Ms Mayola, Mr Gumbi placed
heavy reliance
Jeftha
.
[14]
In that case the employee was retrenched after returning from leave.
Before his pension benefits were paid out the company became
aware of
fraud committed by the employee to the detriment of the company. The
employer requested the pension fund to withhold the
employee’s
pension benefit in terms of s 37(1)
(b)
(ii)
of the Pensions Fund and the fund did so. The court held that the
pension fund was obliged to put its case to the employee
and afford
him an opportunity to respond to the allegations made against him by
the employer before making a decision in terms
of s 37(1)
(b)
(ii).
The court accepted the argument that a decision by a pension fund to
withhold a pension benefit pending the determination
of an employer’s
civil action, is analogous to the granting of an anti-dissipation
order and that there is no justification
for an employer being
afforded such a remedy based only on allegations of dishonesty.
[53]
The adjudicator in the present matter also
relied on
Jeftha
when
it overturned the decision of the pension fund to withhold the
pension benefits. We consider the adjudicator’s reliance
on
Jeftha
to
be factually and legally unfounded. We say so for the following
reasons:
(a)
Factually, Ms Mayola was given multiple opportunities to make
representations but declined all of them.
More particularly, she did
not positively refute the fraud at a disciplinary hearing, or at the
CCMA (instead she chose to resign)
and has not directly refuted the
allegations in these proceedings or before the adjudicator. There is
no dispute that upon notification
of the withholding of the benefits,
Ms Mayola was invited by the pension fund to address any queries. She
did not do so. Additionally,
the fund expressly invited
representations prior to the adjudicator’s decision. She made
none.
(b)
There are also material distinctions between this case and that of
Jeftha
: it appears that in
Jeftha
, the employer had
taken no real steps to advance the underlying claim; that it had only
belatedly contended for dishonesty on the
employee’s part and
that the employee had positively refuted the allegations.
(c)
From a legal perspective, the adoption of an approach that renders s
37D orders analogous to anti-dissipation
orders has no precedent and
in our view is inconsistent with the test for interim interdictory
relief which requires only a
prima facie
claim (as would be
required for s 37D). It cannot be that a more onerous test is
required for s 37D than would be the case for
an interdict against
payment of the same funds.
(d)
The court in
Jeftha
appeared not consider that in certain instances it may be permissible
to allow for representations to be made after the initial
decision
was taken.
[15]
(e)
Even if there has been a procedural unfairness in failing to grant a
hearing, it does not follow that
the withholding of the benefits must
be set aside. Instead, both the adjudicator and the court are
entitled to grant a just and
equitable remedy.
[16]
[54]
The finding by the adjudicator that Ms
Mayola was afforded no opportunity to state her case is, in our view,
flawed for the reasons
that follow:
(a)
First, we accept that the CCMA proceedings provided an opportunity to
Ms Mayola to state her case as
contended by the appellant. Even after
the proceedings at the CCMA on 8 August 2019, the appellant invited
Ms Mayola to a meeting
to discuss the matter, at which meeting Ms
Mayola could have presented her version of what transpired with
DeeTee and Kempston
Logistics. Ms Majola did not attend this meeting,
instead, on the same day she tendered her resignation with immediate
effect.
(b)
Second, in the email dated 29 August 2019, the pension fund provided
Ms Mayola with the information
which the appellant had given to the
pension fund and it invited Ms Mayola to address all queries
regarding the fund to Ms Davidson.
Queries about the non-payment of
pension benefits and the reasons therefore were queries that could be
addressed to the pension
fund. Ms Mayola could have used this
opportunity to state her version on the allegations in questions,
however, she did not address
any queries or provide any information
as per the invitation to her.
(c)
Third, on 12 September 2019 Ms Mayola lodged her complaint with the
adjudicator. Having been provided
with the information attached to
the email dated 29 August 2019, the complaint glaringly contains no
challenge at all to the allegations
made against her. Ms Mayola has
simply maintained her silence throughout.
(d)
Fourth, the wording of rule 4.3.1
(b)
[17]
of the rules of the pension fund largely mirrors s 37D(1)
(b)
(ii)
of the Pensions Act. Similar to the Pensions Act, rule 4.3.1 gives
the trustees of the pension fund the right to make such
deductions
from the benefit to which a member is entitled to in terms of s 37D
of the Pensions Act as is necessary. The trustees
have the right to
withhold payment of a benefit until such time as the matter has been
finally determined by a competent court
of law, provided that the
trustees must be satisfied that the employer made out a
prima
facie
case against the member and they believe that the employer has a
reasonable chance of success in the proceedings instituted. Ms
Majola
was provided with these rules in the email dated 29 August 2019 and
she took no issue with the pension fund about the content
of the
pension fund rules or the application of such rules against her. The
email of 29 August 2019 records that the trustees considered
the
information before them and they were satisfied that the appellant
has a
prima
facie
case of dishonest misconduct against Ms Mayola, and she did not
challenge this in writing to the pension fund.
(e)
Finally, in an email dated 27 February 2020 the pension fund invited
Ms Mayola to make written representations
to it in the light of its
position that the investigations in the criminal proceedings were
continuing and that the pension fund
was likely to continue to
withhold the payment of her pension benefits. Ms Mayola made no such
representations and has, in fact,
made none to date.
[55]
Neither the rules of the pension fund nor s
37D(1)
(b)
(ii)
of the Pensions Act afford an employee the right to make
representation at a stage where the basis for the withholding of the
pension benefit is made, pending the finalisation of the
investigation that is underway. In any event, Ms Mayola was afforded
no less than five opportunities to state her case by both the
appellant before the decision to withhold was taken, and by the
pension
fund at the time of making the decision to withhold and
thereafter. She simply failed to do so.
[56]
For all the reasons stated above we
conclude that the adjudicator erred in reasoning as he did and Ms
Mayola’s complaint to
the adjudicator fell to be dismissed.
Costs
[57]
The general rule is that costs should
follow the result and we see no need to depart from it.
Order
[58]
In the result we make the following order:
1.
The appeal is upheld.
2.
The determination of the fourth respondent, dated 16 July 2020 in
terms whereof the first
respondent was ordered to pay to the third
respondent her withdrawal benefit, inclusive of fund return earned on
such benefit calculated
from August 2019 to date of payment is hereby
reviewed and set aside in terms of
section 30P
of the
Pension Funds
Act 24 of 1956
.
3.
The complaint of the third respondent lodged with the fourth
respondent on 12 September 2019
is hereby dismissed.
4.
The third respondent is directed to pay the costs of the appeal, such
costs to include the
costs of senior counsel.
SEEGOBIN
J
P
BEZUIDENHOUT J
THOBELA-MKHULISI
AJ
APPEARANCES
:
Heard:
25 November 2022
Delivered:
03 March 2023
For
the appellant: Mr P.J. Wallis SC
Instructed
by:
EVH Incorporated
C/o: Viv Greene
Ref.: E. van
Huyssteen/Visha
Tel: 031-492 79 71
For
the 3
rd
respondent:
Instructed By: Kanyile MB
Attorneys Inc.
C/o: LLM Attorneys Inc.
Ref.: LIT011/BK/20
Tel: 011- 778 92 01
[1]
Highveld
Steel & Vanadium Corporation Ltd v Oosthuizen
[2008] ZASCA 164
;
2009 (4) SA 1
(SCA) para 19.
[2]
See
for example:
Twigg
v Orion Money Purchase Pension Fund and another (1)
[2001] 12 BPLR 2870 (PFA) para 21,
Charlton
and others v Tongaat-Hulett Pension Fund and others
[2006] 2 BPLR 94 (D) at 97-98.
[3]
Bato
Star Fishing (Pty) Ltd v Minister of Environmental Affairs and
Tourism and others
[2004] ZACC 15
;
2004 (4) SA 490
(CC);
2004 (7) BCLR 687
(CC) para
27.
[4]
Meyer
v Iscor Pension Fund
2003 (2) SA 715
(SCA);
[2003] 1 All SA 40
(SCA).
[5]
Ibid
para 8.
[6]
Tikly
and others v Johannes NO and others
1963 (2) SA 588
(T) at 590G-591A.
[7]
Meyer
v Iscor Pension Fund
2003 (2) SA 715
(SCA);
[2003] 1 All SA 40
(SCA) para 8.
[8]
Municipal
Employees' Pension Fund and another v Mongwaketse and others
[2019] ZAGPJHC 162.
[9]
Municipal
Employees Pension Fund and another v Mongwaketse
[2020]
ZASCA 181
;
[2021] 1 All SA 772
(SCA) para 25.
[10]
Municipal
Employees Pension Fund and another V Mongwaketse
[2022] ZACC 9; 2022 (6) SA 1 (CC); 2022 (11) BCLR 1404 (CC).
[11]
Old
Mutual Life Assurance Co (South Africa) Ltd v Pension Funds
Adjudicator and others
2007 (3) SA 458
(C);
[2007] 2 All SA 98
(C) para 12.
[12]
Otis
(South Africa) Pension Fund and another v Hinton and another
[2005] 1 BPLR 17 (PFA) at 18.
[13]
Old
Mutual Life Assurance Co (South Africa) Ltd v Pension Funds
Adjudicator and others
2007 (3) SA 458
(C).
[14]
SA
Metal Group (Pty) Ltd v Jeftha and others
[2020] 1 BPLR 20 (WCC).
[15]
C
Hoexter and G Penfold
Administrative
Law in South Africa
3 ed (2021) at 532 citing
Sachs
v Minister of Justice
1934 AD 11
at 22-23.
[16]
Section
8
of PAJA; s 172(1)
(b)
of the Constitution.
[17]
The
rule provides as follows:
‘
4.3
PRIOR RIGHT TO BENEFITS
4.3.1
The TRUSTEES shall have the right to make such deductions from the
benefit to which a MEMBER or
BENEFICIARY is entitled in terms of the
RULES or which is to be transferred to an APPROVED FUND for his
benefit as permitted
in terms of Section 37D of the ACT. Such claims
may include:
(a)
any amount for which the FUND or the EMPLOYER is liable in terms of
a HOUSING GUARANTEE;
or
(b)
compensation (including legal costs recoverable from the MEMBER) in
respect of any
loss suffered by the EMPLOYER as a result of any
theft, misconduct, fraud or dishonesty on the MEMBER’S part
for which
the MEMBER has admitted liability in writing or in respect
of which judgement has been obtained against the MEMBER in court.
The
TRUSTEES may, where an EMPLOYER has instituted legal proceedings in
a court of law against the MEMBER concerned for compensation
in
respect of damage caused to the EMPLOYER as contemplated in section
37D of the Act, withhold payment of any benefit until
such time as
the matter has been finally determined a competent court of law or
has been settled or formally withdrawn, provided
that:
(i)
the TRUSTEES are satisfied that the EMPLOYER has made out a
prima
facie
case against the MEMBER concerned and there is reason to
believe that the EMPLOYER has a reasonable chance of success in the
proceedings that have been instituted; and
(ii)
the TRUSTEES are satisfied that the EMPLOYER is not at any stage of
the proceedings
responsible for any undue delay in the prosecution
of the proceedings;
(iii)
once the proceedings have been determined, settled or withdrawn, any
benefit to
which the MEMBER is entitled, is paid forthwith, or, if
any amount is lawfully deducted from the benefit in terms of section
37D, the balance thereof is paid forthwith.’