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[2010] ZASCA 77
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Samancor Group Pension Fund v Samancor Chrome (452/09) [2010] ZASCA 77; 2010 (4) SA 540 (SCA) ; [2010] 4 All SA 297 (SCA) (27 May 2010)
Links to summary
THE
SUPREME COURT OF APPEAL
REPUBLIC
OF SOUTH AFRICA
JUDGMENT
Case n
o:
452/09
In the matter between:
SAMANCOR GROUP PENSION
FUND
Appellant
and
SAMANCOR CHROME
First
Respondent
THE PENSION FUNDS
ADJUDICATOR
Second
Respondent
THE REGISTRAR OF PENSION
FUNDS
Third
Respondent
GERHARDUS SWANEPOEL
Fourth
Respondent
Neutral citation:
Samancor
Group Pension Fund v Samancor
Chrome (452/09)
[2010] ZASCA 77
(27 May 2010)
Coram:
HARMS
DP, MLAMBO, LEACH JJA and GRIESEL, SERITI AJJA
Heard:
13 May 2010
Delivered:
27 May 2010
Summary:
Pension
Funds Act 24 of 1956
– Application to set aside determination
by the pension funds adjudicator – six weeks period provided
for in section
30 P(1) of the Act – Long delay and part
implementation of the adjudicator’s determination by Samancor
Chrome. Doctrine
of peremption - Samancor Chrome not allowed to
challenge adjudicator’s determination.
_____________________________________________________
ORDER
_____________________________________________________
On
appeal from:
South
Gauteng High Court (Johannesburg) (Swart AJ sitting as court of
first instance):
It is therefore ordered as follows:
1. The appeal is allowed. Samancor (first respondent) is
to pay the costs of the Pension Fund (appellant) and Mr Swanepoel
(fourth
respondent), which costs will include the costs of two
counsel where so employed.
2. The order of the high court is set aside and
substituted with the following: ’The application is dismissed
with costs which
will include costs of two counsel where so
employed’.
_
______________________________________________________
JUDGMENT
____________________________________________________
___
Seriti
AJA (
Harms DP, Mlambo,
Leach JJA and Griesel AJA
concurring)
Introduction
[1]
This
appeal arises from a successful application in the high court to set
aside a determination by the adjudicator appointed in
terms of
section 30C
of the
Pensions Fund Act 24 of 1956
, as amended (the
Act). The high court refused to grant leave to appeal and the matter
is now before this court with the leave of
this court.
[2]
The
high court granted an order declaring that the fourth respondent
(
Mr
Swanepoel) is entitled to compensation in terms of the provisions of
rule 6.5 of the Fund Rules, directed the appellant (Pension
Fund) to
pay Mr Swanepoel compensation calculated in terms of the Fund Rules
and set aside the determination made by the adjudicator.
[3]
The
issue in this appeal is whether the high court was correct to make
the order it made, taking into account the provisions of
section 30P
of the Act and the delay before bringing the application before the
high court.
Background facts
[4]
Mr
Swanepoel was employed by the first respondent (Samancor) as a
security officer from August 1991. His duties included amongst
others, driving the staff bus and an ambulance.
[5] On 22 March 1996, following a
blackout while driving a staff bus, Mr Swanepoel was sent to Dr Smith
for medical examination
and evaluation. In his report dated 22 March
1996, Dr Smith stated that Mr Swanepoel was fit to perform his
duties. Mr Swanepoel
was again examined by various medical
practitioners. In a medical report dated 20 November 1997, Drs Kriel,
de Wall, Spoelstra,
Smith and Holland stated that he was ‘permanent
af siek’ en ‘ongeskik vir werk’.
[6
] Samancor
attempted to find a suitable position for Mr Swanepoel in their
company and offered him an alternative position. On 2
December 1997
Mr Swanepoel wrote a letter to Samancor thanking them for their
efforts to find him a suitable position and advising
them that he
preferred to be paid out his medical disability benefits and further
that 31 December 1997 would be his last working
day.
[7]
On
or about 26 February 1998 Samancor submitted, on behalf of Mr
Swanepoel a ‘Notice of Withdrawal’ to the Pension Fund.
The notice also requested that Mr Swanepoel be paid his benefits,
which were later paid to him.
[
8] During
July 1998 Mr Swanepoel sent a letter to Samancor requesting them to
lodge a claim with Sanlam, the underwriters of the
fund. A medical
report by Dr Rossouw was attached to the said letter. Thereafter Mr.
Swanepoel communicated with Sanlam. He later
found out that no claim
was lodged on his behalf.
[9] On 13 May 2002 Mr Swanepoel
lodged a complaint with the adjudicator. The complaint was against
Samancor and the relief sought
was that his employer should ‘submit
all the documents in connection with my sickness to the Pension Fund
so that they can
make the decision whether I am disabled for work or
not’. After receiving a response from Samancor, on 15 February
2005 the
adjudicator made a determination in terms of which:
(a)
Samancor was ordered to submit a disability claim and an ill-health
retirement claim on behalf of Mr Swanepoel to the Pension Fund.
(b)
directing the Pension Fund to consider the claim and make a decision
on Mr Swanepoel’s eligibility for disability and ill
–
health early retirement benefits;
(c)
ordering that in the event that the claim is approved by the Pension
Fund, Samancor is to pay Mr Swanepoel the benefits he is entitled
to.
[10
] Samancor
was advised about the adjudicator’s determination. On 29 August
2005, Mr Barnard, an insurance broker who was assisting
Mr.
Swanepoel, sent Samancor the letter from the adjudicator during
October 2005. Samancor sent Mr Barnard disability claim forms
for
completion by Mr Swanepoel. On 28 November 2005 the completed
documents and statement by Mr Swanepoel for disability claim
to be
submitted to Sanlam were sent to Samancor.
[11
]
On 9 February 2006 Samancor forwarded the completed application to
the Pension Fund. On 15 November 2006 the Pension Fund addressed
a
letter to Samancor wherein the latter was advised that the trustees
have agreed that they would have approved the disability
claim of Mr
Swanepoel had it been submitted at the time of Mr Swanepoel’s
illness.
[12] Samancor did not pay Mr
Swanepoel as determined by the adjudicator. Mr Swanepoel had been
employed in the Samancor’s
chrome division which, in June 2006
was sold in terms of a complicated scheme involving transactions
between a number of companies.
Although the adjudicator’s
decision had ordered Samancor to pay Mr Swanepoel, it alleged that it
felt that the new owner
of the chrome division could be responsible
for paying him and that it was only in
February
2007 that it ascertained that it was the party obliged to fulfil the
adjudicator’s order. It then unsuccessfully
attempted to settle
the matter with Mr Swanepoel. On 7 September 2007 Samancor wrote a
letter to Mr Swanepoel wherein it was stated,
amongst others, that
they have investigated the matter and in their opinion, they are not
indebted to him. The letter was addressed
to Mr Swanepoel in an
attempt to dissuade him from taking the matter any further.
[13
] On
1 April 2008, acting on behalf of Mr Swanepoel, Lategan, Viljoen and
Pretorius Attorneys, directed a letter of demand to Samancor.
In the
said letter they demanded payment of the amount of about R1.5m as
calculated by an actuary, Dr R Koch, whose report was
attached to the
letter of demand.
[14
] On
12 May 2008, Samancor launched an application to the high court. In
the notice of motion, it sought an order condoning its
failure to
launch the application within the time period specified in section
30P(1) of the Act and the setting aside of the adjudicator’s
determination. The application was served on, amongst others, the
Pension Fund and Mr Swanepoel. The Pension Fund did not participate
in the application as no relief was sought against it.
[15] Section 30P(2) stipulates that
the division of the high court mentioned in subsection1 may consider
the merits of the complaint
made to the adjudicator and on which the
adjudicator’s determination was based and may make any order it
deems fit. The appeal
contemplated in this section is an appeal in
the wide sense. It is a complete re-hearing of and fresh
determination on the merits.
The court can consider the matter afresh
and make any appropriate order it deems justified by the facts –
see
Meyer v Iscor
Pension Fund
.
1
[16] On 22 August 2008 the high court granted a rule
nisi, calling upon the Pension Fund to give reasons why it should not
be ordered
to pay Mr Swanepoel the ill-health benefits calculated in
accordance with rule 6.5 of the Pension Fund’s Rules.
[1
7] The
Pension Fund filed an opposing affidavit and, on the return date, the
rule nisi was discharged and the matter was argued
on the merits. In
the opposing affidavit, the Pension Fund stated that it is a closed
defined benefit fund. It has not taken new
members from 1 March 1993
and that it had only 918 members at that time. Much of the benefits
payable to members are outsourced
by way of insurance arrangements
concluded between the Pension Fund and a third party insurance
company. The Pension Fund pays
premiums to the insurance company and
in return the insurance company assumes the risk, amongst others, of
paying employees who
retire early due to ill-health. In case of a
possible claim, the Pension Fund must be notified timeously so that
it, in turn may
timeously lodge a claim with the insurance company
concerned. If the Pension Fund cannot lodge a claim with the
insurance company,
then it means that it should utilise its surplus
funds to meet the financial obligation.
[1
8] The
Pension Fund further stated that it is the employer’s duty to
ensure that a claim on behalf of its employees be lodged
properly and
timeously with it, so that it can in turn lodge a claim with the
insurance company timeously. This will enable the
insurance company
to make the necessary payment. In the present case, Samancor failed
to lodge the claim of Mr Swanepoel with the
Pension Fund.
[1
9] As
stated earlier, the high court granted Samancor condonation for the
late launching of the application. Section 30P(1) of the
Act
stipulates that any party aggrieved by the determination of the
adjudicator may apply to the high court, within six weeks after
the
date of the determination, for relief. The adjudicator’s
determination was made on 15 February 2005 and Samancor launched
the
application only on 12 May 2008. Samancor launched their application
almost three and a half years after the date of the determination
by
the adjudicator.
[20
] The
high court, because of its inherent jurisdiction, has powers to
govern its own procedures. The said jurisdiction pertains
not only to
non-compliance with the Rules of Court but also to statutory time
limits – see
Toyota
South Africa
Motors
(Pty) Ltd v Commissioner, SARS.
2
In this matter the high court was entitled to deal with Samancor’s
application for condonation. As will appear hereunder,
the high court
should not have granted condonation because of prejudice to the
Pension Fund and the fact that the appeal was perempted.
Prejudice to the Pension Fund
[21
] When
dealing with the application for condonation the high court stated
that the court should exercise its judicial discretion
having regard
amongst others, to the degree of lateness, the explanation therefore,
the prospects of success and the importance
of the matter to the
parties. The high court further said that if condonation is granted
this would cause no prejudice to Mr Swanepoel.
[22
] The
high court did not consider any possible prejudice to the Pension
Fund against whom it ultimately granted an order. In its
opposing
affidavit, the Pension Fund fully sets out how its members would be
prejudiced if it had to pay a claim out of its funds
without
resorting to the insurance policies that it had in place when Mr
Swanepoel left the employment of Samancor.
[23
] One
of the factors that need consideration is the respondent’s
interest in the finalisation of the matter – see
Beira v Raphaely-Weiner & others.
3
The court should have also considered the effect of the delay on the
Pension Fund - see
Van
Wyk v Unitas Hospital and Another (Open Democratic Advice Centre as
Amicus Curiae).
4
[24
]
The high court did not take into account the interest of the Pension
Fund. It did not consider the unfair negative impact of
its decision
on the Pension Fund. The Pension Fund, which had an insurance policy
to cover the payment that Mr Swanepoel was entitled
to, was unable to
lodge a claim with the insurance company as Mr Swanepoel left the
employment of Samancor almost three and a
half
years prior to Samancor launching the application. Had the
application been launched within the six weeks period provided for
in
section 30P(1) of the Act, the Pension Fund could possibly have
lodged a claim with their insurance company. Clearly the high
court
erred in granting condonation without taking into account the
interests of all parties involved especially the Pension Fund.
Doctrine of peremption
[25
] In
Gentiruco AG v
Firestone SA (Pty) Ltd
5
Trollip JA said: ‘The right of an unsuccessful litigant to
appeal against an adverse judgement or order is said to be perempted
if he, by unequivocal conduct inconsistent with an intention to
appeal, shows that he acquiesces in the judgment or order’.
See
also Natal Rugby Union v Gould.
6
In
Standard Bank v
Estate Van Rhyn,
7
Innes CJ said:
‘
If a man has clearly and unconditionally
acquiesced in and decided to abide by the judgment he cannot
thereafter challenge it’.
[26
] Section
30O(1) of the Act stipulates that any determination of the
adjudicator shall be deemed to be a civil judgment. In this
case, as
stated earlier, the adjudicator made a determination on 15 February
2005. Thereafter Samancor attempted to implement the
adjudicator’s
determination but almost three and a half years later Samancor
decided not to finalise the implementation of
the adjudicator’s
determination, but rather to bring an application to have the
adjudicator’s determination set aside.
It only decided to seek
to do so when execution was threatened. Its attempt to rely on
alleged confusion as to whether it or the
new owner of the chrome
division was responsible for payment is a red herring as the sale
only took place some 16 months after
the adjudicator’s award,
during which time there could be no doubt that it was the responsible
party. And even after the
so-called ‘confusion’ on its
part in this regard had been cleared, it never sought to avoid
liability. Instead it attempted
to settle the debt. In these
circumstances there can be no doubt that it acquiesced in the
adjudicator’s award and its right
to appeal was perempted.
Samancor should not have been allowed to challenge the determination
of the adjudicator at the stage it
launched
an
application to set aside the adjudicator’s determination. To my
mind, the high court should have dismissed the application.
Appropriate Remedy
[2
7] The
high court held that the order of the adjudicator cannot be enforced
in terms of section 30O(1) which deems any determination
by an
adjudicator to be a civil judgment of any court of law. I disagree.
The liability of Samancor has been determined in the
manner
prescribed by the adjudicator and has become liquidated as a result
of the determination of the amount due by the fund.
Mr Swanepoel will
be entitled, should Samancor refuse to pay, to issue a warrant of
execution based on the adjudicator’s
award together with an
affidavit setting out the amount due in terms of the determination.
[28] For the above reasons, the application of Samancor
should have been dismissed and therefore the appeal must be upheld.
As far
as costs are concerned, I can find no reason why the costs
should not follow the result.
It is therefore ordered as follows:
1. The appeal is allowed. Samancor (first respondent) is
to pay the costs of the Pension Fund (appellant) and Mr Swanepoel
(fourth
respondent), which costs will include the costs of two
counsel where so employed.
2. The order of the
high court is set aside and substituted with the following: ‘The
application is dismissed with costs which will include costs
of two
counsel where so employed’.
________________
w
l seriti
Acting
Judge of Appeal
APPEARANCES:
APPELLANT
: A
E Bham SC
Instructed by
Mervyn
Taback Inc., Johannesburg
Webbers,
Bloemfontein
FIRST RESPONDENT:
D
L Wood (with him J J Meiring)
Instructed by
Knowles Husain Lindsay inc., Johannesburg
McIntyre & van der post, Bloemfontein
FOUTH RESPONDENT: H P Higgins (with him D J van Heerden)
Instructed by Lategan, Viljoen & Pretorius,
Pretoria
E G Cooper & Majiedt Inc., Bloemfontein
1
2003 (2) SA 715
(SCA) at para 8.
2
2002 (4) SA 281
(SCA) at para 10.
3
[1997] ZASCA 59
;
1997 (4) SA 332
(SCA) at 337 D-E.
4
[2007] ZACC 24
;
2008 (2) SA 472
(CC) at para 20.
5
1972 (1) SA 589
(A) at 600 A-B.
6
[1998] ZASCA 62
;
1999 (1) SA 432
(SCA) at 443 E-G.
7
1925 AD 266
at 268.