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[2021] ZAGPPHC 124
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Swart N.O and Others v Lukhaimane N.O and Others (54157/2019) [2021] ZAGPPHC 124 (12 February 2021)
IN
THE HIGH COURT OF SOUTH AFRICA
(GAUTENG
DIVISION, PRETORIA)
(1)
REPORTABLE: YES/
NO
(2)
OF INTEREST TO OTHERS
JUDGES: YES/
NO
(3)
REVISED
12/2/21
Case
number: 54157/2019
On roll: 27
January 2021 (Decided on papers)
Date
of judgment: 12 February 2021
In
the matter between:
SWART
(NEÉ VAN DER MERWE), LANÉ N.O.
First Applicant
VAN
DER MERWE, JOHANNES GERHARDUS N.O.
Second Applicant
BOSCH,
LEON
N.O.
Third Applicant
BENNETT,
BRIAN DONALD N.O.
Fourth
Applicant
DU
PLESSIS, GERT JOHANNES
N.O.
Fifth Applicant
SWART
(NEE VAN DER MERWE), LANE
Sixth Applicant
VAN
DER MERWE, JOHANNES GERHARDUS
Seventh Applicant
and
LUKHAIMANE,
MUVHANGO ANTOINETTE N.O.
First Respondent
FUNDSATWORK
UMBRELLA PROVIDENT FUND
Second Respondent
MMI
GROUP
LTD
Third Respondent
BORNMAN
(previously VAN DER MERWE),
TERESA
Fourth
Respondent
JUDGMENT
SWANEPOEL AJ:
INTRODUCTION
[1]
First to fifth applicants act in their capacities as the trustees of
the Dolf van
der Merwe Familie Trust (“the trust”). The
trust was founded by the late Rudolph Marthinus van der Merwe (“the
deceased”), some years prior his death in 2014. It holds a
substantial part of the deceased’s assets. Sixth and seventh
applicants are the major children of the deceased from a previous
marriage, (they are also the first and second applicants in their
capacity as trustees of the trust.
[2]
First respondent is the Pension Funds Adjudicator (“the PFA”),
who was
appointed in terms of section 30 C of the Pensions Fund Act,
Act 24 of 1956 (“the Act”). Second respondent is a
pension
fund registered as such in terms of the Act (“the
Fund”). Third respondent is the administrator of the Fund.
Fourth respondent was the deceased’s spouse at the time of his
death. Only second respondent opposes the application. First
respondent abides the decision of the Court.
[3]
At the time of his death the deceased’s pension fund benefit in
the Fund amounted
to R 1 675 187.71 (“the pension
benefit”). The deceased had nominated the trust and the fourth
respondent
to each receive 50% of the pension benefit upon his death.
The Fund is authorized by virtue of section 37 C of the Act to decide
to which dependant or dependants of the deceased the pension benefit
should be paid, and in what proportion. It awarded 100% of
the
deceased’s pension benefit to the fourth respondent. The Fund
subsequently paid the fourth respondent the sum of R 1 675 187.71.
[4]
The trust then filed a complaint with the PFA in terms of section 30
A (3) of the
Act, seeking the setting aside of the Fund’s
decision. On 13 July 2018 the PFA handed down her determination. In
the PFA’s
view the Fund had “unduly fettered” its
discretion, had not considered all of the facts properly, and its
finding was
therefore set aside. The PFA referred the matter back to
the Fund for reconsideration.
[5]
On 13 November 2018 the Fund again made a finding that 100% of the
deceased’s
pension benefit should be awarded to the fourth
respondent (“the second decision”). Upon the applicants
again complaining
to the PFA, they were told that the PFA regarded
herself as
functus officio
, and that if they were to take the
matter further, it would have to be by way of a review application.
In this manner the case
has found its way to this Court.
RELIEF SOUGHT
[6]
Applicants seek the following relief:
[6.1]
To the extent necessary, that the decision of the PFA on 30 January
2019 not to consider a second
complaint against the Fund’s
second decision be set aside;
[6.2]
That the determination of the Fund on 13 November 2018, that 100% of
the deceased’s pension
benefit must be awarded to fourth
respondent, be set aside;
[6.3]
An order that 50% of the deceased’s pension benefit be awarded
to the trust;
[6.4]
That fourth respondent be ordered to pay 50% of the benefits that she
had already received from the
PFA or from the Fund to the trust.
[6.5]
That any party opposing the application pay the cost thereof.
THE CONDONATION APPLICATION
[7]
The first matter for consideration is applicants’ interlocutory
application,
seeking condonation for the late filing of the replying
affidavit. The Fund’s answering affidavit was filed on 25
September
2019. The replying affidavit was filed on 26 March 2020,
substantially out of time. Initially the Fund suggested that it would
not condone the late filing and that applicants would have to seek
formal condonation. Applicants consequently delivered a formal
application for condonation which has not been opposed.
[8]
It would not be inaccurate to say that applicants’ attorney
paints a chaotic
picture of his office when the replying affidavit
should have been attended to. The chaos was caused firstly by the
breakup of
Hogan Lovells (SA) Inc, and the subsequent formation of
Lawton’s Africa. The result was a breakdown in IT and email
services.
To add to the chaos in applicants’ attorney’s
offices, counsel seems to have been under some time constraints,
further
delaying the finalization of the affidavit. The Christmas
holidays intervened, followed by another move of personnel from
Lawton’s
to Cox Yeats. The result of all these factors was a
breakdown in the communication between the attorney, his secretary
and his
clients. Complicating matters was the fact that Ms. Swart
resides in Vanderbijlpark, whilst applicants’ attorney
practiced
in Sandton.
[9]
In considering whether to grant condonation, I am mindful that it is
required of applicants
to provide a proper explanation dealing with
the entire period that the replying affidavit was delayed.
[1]
The factors to be assessed have been stated by the Supreme Court of
Appeal as follows:
[2]
‘
A full,
detailed and accurate account of the causes of the delay and their
effects must be furnished so as to enable the Court to
understand
clearly the reasons and to assess the responsibility. Factors which
usually weigh with this court in considering an
application for
condonation include the degree of non-compliance, the explanation
therefor, the importance of the case, a respondent’s
interest
in the finality of the judgment of the court below, the convenience
of this court and the avoidance of unnecessary delay
in the
administration of justice.
[10]
The delay in filing the replying affidavit is substantial. However,
it seems clear that the circumstances
in applicant’s attorney’s
office were difficult, and whilst it is incumbent on an officer of
Court to comply with the
rules of Court, there are circumstances that
would understandably lead to delays in complying with time periods.
Two factors weigh
heavily in applicants’ favour: Firstly, the
application for condonation is not opposed. Secondly, there would be
no prejudice
to the respondents should condonation be granted. I have
a wide discretion to grant condonation where it is in the interests
of
justice to do so. In these circumstances I believe that it would
be appropriate to do so.
THE REVIEW
[11]
It is not in dispute that the second decision by the Fund, and the
decision by the PFA to refuse
to hear the second challenge to the
Fund’s determination, are both administrative actions which are
reviewable under the
Promotion of Administrative Justice Act, Act 3
of 2000 (“PAJA”). In order to succeed with a review under
PAJA, applicants
have to bring the action under one of the grounds of
review set out in section 6 of PAJA:
“
Judicial
review of administrative action
6. (1)
Any person may institute proceedings in a court or a tribunal for the
judicial review
of an administrative action.
(2)
A court or tribunal has the power to judicially review an
administrative action if-
(a)
the administrator who took it-
(i) was not
authorized to do so by the empowering provision;
(ii) acted under a
delegation of power which was not authorized by the empowering
provision; or
(iii) was biased or reasonably
suspected of bias;
(b)
a mandatory and material procedure or condition prescribed by an
empowering provision was
not complied with;
(c)
the action was procedurally unfair;
(d)
the action was materially influenced by an error of law;
(e)
the action was taken-
(i) for a
reason not authorized by the empowering provision;
(ii) for an
ulterior purpose or motive;
(iii) because irrelevant
considerations were taken into account or relevant considerations
were not considered;
(iv) because of
unauthorized or unwarranted dictates of another person or body;
(v) in bad faith;
or
(vi) arbitrarily or
capriciously;
(f)
the action itself-
(i)
contravenes a law or is not
authorized by the empowering provision; or
(ii)
is not rationally connected to-
(aa) the purpose for which it
was taken;
(bb) the purpose of the
empowering provision;
(cc) the information
before the administrator;
(g)
the action concerned consists of a
failure to take a decision;
(h)
the exercise of the power or the
performance of the function authorized by the empowering provision,
in pursuance of which the administrative
action was purportedly
taken, is so unreasonable that no reasonable person could have so
exercised the power or performed the function;
or
(i)
the action is otherwise
unconstitutional or unlawful.”
THE BACKGROUND
[12]
The deceased and the fourth respondent were married on 12 February
2011. At the time of his death
on 15 November 2014 they been married
for slightly less than four years. The deceased died at the age of 53
years. Fourth respondent
was then thirty nine years of age.
[13]
The deceased was also survived by his two adult children from a
previous marriage, the sixth
and seventh applicants. They were then
27 and 26 years old respectively. They had received regular cash
payments from the deceased,
and he had also paid certain monthly
expenses such as their medical aid, insurance premiums and the like.
[14]
On 31 August 2011 the deceased completed a nomination form in which
he nominated fourth respondent
and the trust to each receive 50% of
his pension benefit. Upon the deceased’s death the trust lodged
a claim with the Fund.
Acting in terms of section 37 C of the Act,
the Fund allocated 100% of the pension benefit to fourth respondent.
The Fund did so
having made the following findings:
[14.1]
The deceased was married to the fourth respondent at the time of his
death.
She was therefore a spouse as well as a dependant as defined
by the Act. She had received a lump sum payment of
R
3 920.000.00 from a death insurance policy, R 441 960.50
from an Old Mutual Life policy and a R 10 000.00 funeral
benefit. Fourth respondent was unemployed, and was dependent on the
deceased.
[14.2]
Both sixth and seventh applicants were employed, but had, to some
extent
at least, been dependent on the deceased. Both had received R
220 980.25 from the proceeds of an Old Mutual life policy after
his death. They had also been nominated to each receive 50% of the
proceeds of the trust.
[14.3]
The Fund noted (erroneously) that the deceased had not nominated any
beneficiaries
of the pension benefit.
[15]
Based on the aforementioned facts, the Fund concluded that the sixth
and seventh applicants’
maintenance needs had been met by the
proceeds of the trust and the life policy payment. The Fund believed
that fourth respondent’s
maintenance requirements had to take
precedence over the claim of the sixth and seventh applicants. On
those grounds the Fund awarded
100% of the pension benefit to the
fourth respondent.
[16]
Applicants were aggrieved by the decision, and they applied to the
PFA to set aside the award.
On 13 July 2018 the PFA dismissed the
decision of the Fund to award the entire pension benefit to fourth
respondent. In doing so,
the PFA considered the following factors:
[16.1] The sixth and
seventh applicants were legal dependants of the deceased as envisaged
by section 1 of the Act,
by virtue of the fact that the deceased had
provided regular maintenance to them by paying their life insurance
policies, medical
aid, cell phone accounts, petrol and the like. He
had also made regular cash payments to the sixth and seventh
applicants. The
fact that the relationship between the deceased and
his children was a close one was also relevant to the award.
[16.2] Fourth
respondent, the PFA said, was 39 years old, was gainfully employed,
and had prospects of remarrying. The
Fund had failed to take into
consideration the fact that fourth respondent had filed a claim for
maintenance in excess of R 10
million against the deceased estate. It
had also failed to consider the estate’s liquidation and
distribution account, and
the distribution of assets to the various
beneficiaries.
[16.3] The PFA found
that the Fund had not conducted a proper investigation in terms of
section 37 C. Consequently,
the PFA found that the Fund had unduly
fettered its discretion. The matter was referred back to the Fund for
reconsideration.
[17]
On 27 September 2018 the Fund requested further information from the
applicants, including a
copy of the liquidation and distribution
account, details of the maintenance claim that fourth respondent had
lodged against the
estate, and information regarding a Discovery Life
policy. It also sought information regarding the trust’s
capital value
and whether the trust was making maintenance payments
to the sixth and seventh applicants. The information was provided to
the
Fund, notwithstanding which, on 13 November 2011, the Fund made
exactly the same decision as it had made previously, allocating
100%
of the pension benefit to the fourth respondent.
FACTORS CONSIDERED BY THE
FUND IN COMING TO THE SECOND DECISION
[18]
In making the second decision, the Fund considered, in addition to
the facts already known to
it, that the fourth respondent had
remarried on 7 July 2018. The Fund had also realized that the
deceased had in fact nominated
the trust as beneficiary of 50% of the
pension benefit, a factor which the Fund says it considered in coming
to the second decision.
It further took into consideration that the
sixth and seventh applicants were due to receive a further
R
2 967 590.00 each from the trust. The Fund again concluded
that fourth respondent’s maintenance requirements were
such
that the entire pension benefit should be paid to her, and that sixth
and seventh applicants’ maintenance requirements
were capable
of being met by the trust.
THE ARGUMENTS
[19]
Applicants say that the Fund failed to give proper consideration to
the deceased’s wishes
as expressed in the nomination form. They
also suggest that the Fund failed to make the necessary enquiries
into the value and
solvency of the trust, more especially given the
fact that there was a cash shortfall of some R 11 million in the
trust, and that
assets would have to be liquidated to restore the
trust to solvency. The Fund simply accepted, without any basis in
fact, that
the trust would be able to meet the sixth and seventh
applicants’ maintenance needs, applicants argue. The applicants
also
say that the Fund failed to conduct proper enquiries into the
maintenance requirements of the fourth respondent, more especially
as
fourth respondent had already received some R 4.3 million from the
deceased’s life policies. The Fund had also, applicants
say,
failed to properly consider that fourth respondent was relatively
young, had remarried, and was employed.
[20]
The Fund says in answer that there is no evidence that sixth and
seventh applicants were dependent
on the deceased. The Fund says this
despite having held on two occasions that, whilst sixth and seventh
applicants were dependent
on the deceased, their needs would be
served by the trust. Furthermore, it is submitted by the Fund that it
is not required to
consider the solvency of the estate when making a
decision. This submission is strange considering the Fund’s own
stance
that section 37 C is intended to “protect dependency”,
and that it fulfils the social function of ensuring that dependants
are protected, even against the wishes of the deceased, if necessary.
If the estate (or the trust) is not solvent, it cannot maintain
the
sixth and seventh applicants, a factor that must surely be
considered.
THE FACTORS TO BE
CONSIDERED
[21]
The Act defines a dependant as follows:
“
dependant”
,
in relation to a member, means -
(a)
a person in respect of whom the member is legally liable for
maintenance;
(b)
a person in respect of whom the member is not legally liable for
maintenance, if such person -
(i)
was, in the opinion of the board, upon the death of the member in
fact dependent on the member for maintenance;
(ii)
is the spouse of the member;
(iii)
is a child of the member, including a posthumous child, an adopted
child and a child born out of wedlock.
(c) a
person in respect of whom the member would have become legally liable
for maintenance, had the member not died;
[22]
There cannot be any dispute that, on this definition and given the
facts as established by the
Fund itself, that sixth and seventh
applicants were dependants as defined in the Act.
[23]
Section 37 C (1) (a) of the Act reads as follows:
“
(a)
If the fund within twelve months
of the death of the member becomes aware of or traces a dependant or
dependants of the member,
the benefit shall be paid to such dependant
or, as may be deemed equitable by the fund, to one of such dependants
or in proportions
to some of or all such dependants
.
[24]
The Fund has a discretion to award any proportion of the pension
benefit to any dependant, even
in the face of a nomination by the
deceased, depending on what is equitable in each case. What
‘equitable’ means is
not defined by the Act. However the
PFA has identified the following factors that should be considered in
the decision making process
(although it is not an exhaustive
list)
[3]
:
[24.1]
The age of the dependants;
[24.2]
Their relationship with the deceased;
[24.3]
The extent of the dependency;
[24.4]
The wishes of the deceased;
[24.5]
The financial affairs of the dependants and their earning potential.
EVALUATION
[25]
I find it striking that there is such a dearth of information
regarding the financial affairs
of the fourth respondent on the one
hand, and the sixth and seventh respondents on the other. One would
have expected the Fund
to have obtained financial statements, bank
statements, proof of income, proof of expenses, and suchlike from all
the parties.
I would also have expected the Fund to investigate the
impact of fourth respondent’s marriage on her financial
affairs. Instead,
all I have is an unsubstantiated statement that the
Fund believes that fourth respondent is in need of maintenance. There
is no
evidence that the Fund investigated whether fourth respondent
still has the insurance money, whether she has invested the money,
and whether she receives any dividend from any investment.
[26]
The same concerns apply equally to the sixth and seventh applicants.
What is their monthly income?
What are their monthly expenses? The
Fund knew that the trust had a cashflow problem and could not make
payments to sixth and seventh
applicants. The Fund should have
investigated whether they had managed to make up the shortfall left
by the deceased’s passing.
Instead of conducting a detailed
investigation into the financial affairs of both sides, the Fund
seems to have taken a very superficial
approach, amounting
essentially to a thumb suck.
[27]
A fundamental difficulty with the Fund’s decision is that the
Fund accepted that the fourth
respondent was unemployed, and had been
so since the deceased’s death. That this belief was incorrect
is evident from emails
attached to the replying affidavit, which
prove that fourth respondent was employed as an estate agent, and had
been since 2015.
The Fund made its decision based on flawed
information.
[28]
The Fund furthermore argues that the mere fact that fourth respondent
has filed a maintenance
claim of over R 10 million against the
estate, is in itself proof that she was dependent on the deceased.
That is a specious argument.
The mere fact that a maintenance claim
has been lodged does not mean that is well founded, and definitely
does not mean that fourth
respondent was, or is dependent on the
deceased estate. In my view the Fund should have conducted a proper
assessment of the fourth
respondent’s needs. It would then have
realized that she was in fact employed, a factor which would likely
have had a substantial
impact on the Fund’s decision.
[29]
The most important factor that the Fund seems to have ignored when it
made the second decision,
was that the fourth respondent had
remarried. Obviously her remarriage would have changed her financial
situation and her maintenance
requirements. Simply ignoring fourth
respondent’s changed circumstances is unreasonable and
irrational.
[30]
Moreover, the Fund took the view that it had no obligation to
investigate the trust’s solvency.
It accepted that the trust
was possessed of assets and that it could therefore provide for sixth
and seventh applicants’
needs. This argument does not take
account of the fact that the trust had a substantial cash shortfall.
Simply because the trust
is possessed of assets does not make it
solvent. The Fund’s contention is belied by the fact that the
Fund knew that the
trust could not support the sixth and seventh
respondent’s maintenance needs. On 22 October 2018 sixth
applicant wrote to
the Fund in reply to certain queries. She
specifically told the Fund that the trust had R 416.00 available in
its account, that
it had a cashflow problem, and that it was not
making any contributions to sixth and seventh respondents’
maintenance. This
communication was evidently ignored when the Fund
made its decision.
[31]
The Fund’s basic approach to the matter was flawed. Its view,
that the solvency of the
trust was irrelevant, and the argument that
the maintenance claim proved fourth respondent’s dependency
were both irrational,
in my view.
[32]
Finally, although I accept that the Fund is not bound by the wishes
of a deceased person, the
wish expressed in a nomination form or in a
will is not to be lightly ignored. It is one of a number of factors
to be taken into
account, but it is a substantial factor. Therefore,
before the Fund decided to ignore the nomination, it should have
considered
whether there were compelling reasons to do so. If it
would result in an injustice or be inequitable should the deceased’s
wishes be given effect to, then the Fund would be justified in
deviating from the deceased’s wishes. Here there is no evidence
that the Fund placed any weight at all on the nomination.
IS THE DECISION REVIEWABLE?
[33]
I am mindful of the fact that I may not substitute my discretion for
that of the Fund. The Fund
correctly points out that a Court cannot
interfere with a decision simply because it disagrees with the
finding. Unless the attack
on the decision can be brought under one
of the grounds in PAJA, the decision must stand. I am reminded of the
words of Schatz
J in
Minister
of Environmental Affairs and Tourism and others v Phambili Fisheries
(Pty) Ltd and another
when he warned against the dangers of imposing one’s own
decision on the matter:
[4]
“
[A]
judicial willingness to appreciate the legitimate and
constitutionally-ordained province of administrative agencies; to
admit
the expertise of those agencies in policy-laden or polycentric
issues; to accord their interpretations of fact and law due respect;
and to be sensitive in general to the interests legitimately pursued
by administrative bodies and the practical and financial constraints
under which they operate. This type of deference is perfectly
consistent with a concern for individual rights and a refusal
to
tolerate corruption and maladministration. It ought to be
shaped not by an unwillingness to scrutinize administration
action,
but by a careful weighing up of the need for and the consequences of
judicial intervention. Above all, it ought to
be shaped by a
conscious determination not to usurp the functions of administrative
agencies; not to cross over from review to
appeal.”
[34]
However, it is my view that the second decision is reviewable on a
number of grounds:
[34.1] Firstly, by ignoring
the solvency of the trust, and the fact that it could not make
payment to sixth and seventh applicants,
the Fund did not take
cognisance of a relevant consideration, which is a ground for review
under section 6 (2) (e) (iii) of PAJA.
By deducting that the sixth
and seventh applicants’ maintenance requirements had been met
simply because the trust was possessed
of assets, the Fund took into
account an irrelevant consideration, which is a ground for review
under the same section.
[34.2] The Fund did not
take into account that the fourth respondent had remarried. This is a
relevant consideration which
was ignored, which also justifies a
review under section 6 (2) (e) (iii) of PAJA.
[34.3] The purpose of
section 37 C of the Act is to ensure that those who require
maintenance are cared for. In this case,
the sixth and seventh
applicants’ maintenance needs were ignored. The decision was
not rationally connected to the purpose
of the empowering provision,
which is the protection of dependants who require maintenance, nor
was it rationally connected to
the facts that were at the Fund’s
disposal. The second decision should therefore be set aside by virtue
of section 6 (2)
(f) (i) (bb) and (cc).
[34.4] The Fund argued that
it merely had to show that it took the decision “honestly”.
That is, in my view, not
the test to be applied. The Fund has to act
reasonably and rationally. I find that the Fund’s decision was
so unreasonable
that no reasonable person could have so exercised the
power. Therefore, the decision stands to be set aside on the grounds
in section
6 (2) (h) of PAJA.
IS THE RELIEF SOUGHT
COMPETENT?
[35]
In its heads of argument the Fund raised, for the first time, the
argument that the trust is
not a dependant as defined by the Act, and
that the relief sought is not legally competent. This argument is met
by the provisions
of section 37 C (2) (a):
“
(
2)(a)
For the purposes of this section, a payment by a registered fund for
the benefit of a dependant or nominee contemplated in
this section
shall be deemed to be a payment to such dependant or nominee, if
payment is made to-
(i)
a trustee contemplated in the Trust Property Control Act, 1988,
nominated by-
(aa) the
member;
(bb) a
major dependant or nominee, subject to subparagraph (cc); or
(cc) a
person recognised in law or appointed by a Court as the person
responsible for managing the affairs or meeting the daily
care needs
of a minor dependant or nominee, or a major dependant or nominee not
able to manage his or her affairs or meet his or
her daily care
needs;
(ii) a
person recognised in law or appointed by a Court as the person
responsible for managing the affairs or meeting the daily
care needs
of a dependant or nominee; or
(iii) a
beneficiary fund.”
[36]
It is consequently not the trust that is the dependant, but the
person who receives a benefit
by way of payment to the trust. Payment
to the trust is regarded as a payment to the dependant. There is no
merit to this argument.
[37]
The Fund’s further argument was that applicants’ notice
of motion was defective,
as it sought (in prayer 2) an order setting
aside the decision to award 100% of the
benefits of the estate
late Rudolph Marthinus Van der Merwe
to fourth respondent (my
emphasis). The Fund says that the “benefits of the estate….”
should be recovered from
the executor of the estate and not from the
Fund. The prayer referred to is not a model of clarity, but the
import is clear. Applicants
are seeking the setting aside of the
decision to award 100% of the pension benefit to fourth respondent.
The meaning ascribed by
the Fund to prayer 2 is incorrect.
[38]
Finally, prayer 3.2 of the notice of motion seeks an order that
fourth respondent should pay
50% of the benefits that she has
received from
first and/or second respondents
to the trust.
The Fund takes the point, quite correctly, that fourth respondent has
received no money from the PFA. It is common
cause that fourth
respondent received the payment from the Fund. The Fund argues that
this error renders the relief sought legally
incompetent. I again
make the point that although the notice of motion is not clearly
worded, there can be no doubt as to the relief
sought by the
applicants. In my view the Fund’s submission is mere semantics.
THE REMEDY
[39]
I am therefore of the view that the decision made by the Fund on 13
November 2018, to award 100%
of the pension benefit of the late
Rudolph van der Merwe to fourth respondent must be set side. What
then is to happen to the matter?
Section 8 of PAJA provides for the
remedies which a Court is entitled to grant:
“
8. Remedies in
proceedings for judicial review
(1) The court or tribunal, in
proceedings for judicial review in terms of section 6(1), may grant
any order that is just and equitable,
including orders –
(a) directing the
administrator –
(i) to give reasons; or
(ii) to act in the
manner the court or tribunal requires;
(b) prohibiting the
administrator from acting in a particular manner;
(c) setting aside the
administrative action and –
(i) remitting the matter
for reconsideration by the administrator, with or without directions;
or
(ii) in exceptional
cases –
(aa)
substituting or varying the administrative action or correcting a
defect resulting
from the administrative action; or
(bb)
directing the administrator or any other party to the proceedings to
pay compensation;
(d) declaring the rights
of the parties in respect of any matter to which the administrative
action relates;
(e) granting a temporary
interdict or other temporary relief; or
(f) as to costs.
(2) The court or tribunal, in
proceedings for judicial review in terms of section 6(3), may grant
any order that is just and equitable,
including orders –
(a) directing the taking of
the decision;
(b) declaring the rights of
the parties in relation to the taking of the decision;
(c) directing any of the
parties to do, or to refrain from doing, any act or thing the doing,
or the refraining from the doing,
of which the court or tribunal
considers necessary to do justice between the parties; or
(d) as to costs.”
[40]
Applicants seek that the decision of the Fund be set aside in terms
of section 8 (1) (c) (ii)
(aa) of PAJA, and that it be substituted by
an order that 50% of the pension benefit must be awarded to the
trust. This relief
can only be awarded in exceptional circumstances.
[41]
Generally speaking, when an administrative action is reviewed, the
matter would be sent back
to the decision maker for reconsideration.
This is so for good reason. A Court is not always possessed of all
the facts. It also
does not necessarily have the expertise that the
administrator does in the particular field. However, there are
exceptions to the
general proposition. In
Johannesburg
City Council v Administrator, Transvaal and another
[5]
Hiemstra J held:
“
Ordinarily,
when an administrative decision is set aside, the matter is sent back
for reconsideration, but not necessarily so. An
early guideline is
the case of Norman Anstey and Co v Johannesburg Municipality,
1928
WLD 235
where Greenberg J., said at paragraph 242:
‘
I
think the Court is only entitled to order the issue of a certificate
or licence when it is clear on the facts that the local authority
would be bound to grant the certificate or licence.”
[42]
In
Gauteng
Gambling Board v Silverstar Development Ltd and others
[6]
the Supreme Court of Appeal said the following:
“
The
power of a court on review to substitute or vary administrative
action or correct a defect arising from such action depends
upon a
determination that a case is ‘exceptional’:
section
8(1)(c)(ii)(aa)
of the
Promotion of Administrative Justice Act 3
of 2000
. Since the normal rule of common law is that an
administrative organ on which a power is conferred is the appropriate
entity to
exercise that power, a case is exceptional when, upon a
proper consideration of all the relevant facts, a court is persuaded
that
a decision to exercise a power should not be left to the
designated functionary. How that conclusion is to be reached is not
statutorily
ordained and will depend on established principles
informed by the constitutional imperative that administrative action
must be
lawful, reasonable and procedurally fair.”
[43]
In
Trencon
Construction (Pty) Ltd v Industrial Corporation of South Africa Ltd
and another
[7]
the
Constitutional Court reiterated that substitution of a decision
remained an extraordinary remedy.
[44]
In
Trencon
[8]
the Court, in considering the various factors to be taken into
account, said that two factors should carry greater weight. Firstly,
it has to be determined whether the Court was in as good a position
as the administrator to make the decision, and secondly, whether
the
decision of the administrator was a foregone conclusion. These two
factors must be weighed cumulatively. Unless those two questions
are
answered in the affirmative, a Court may not make a substitution
order. Thereafter other considerations may play a role: for
instance
the effect of a delay, bias or incompetence of the administrator.
Each case must be considered on its own facts, and ultimately
the
test is whether a substitution order is just and equitable.
[45]
In a number of cases the Courts have taken decisions in the place of
the decision maker, where
time considerations so required.
[9]
However, even if time were a factor in a case, unless the end result
of the decision was a foregone conclusion, a Court would not
make its
own decision.
[46]
There can be no argument that this matter has been unnecessarily
delayed, and that it should
be resolved as soon as possible. Of
importance also, particularly to this matter, is whether the
administrator has revealed an
unjustifiable determination to adhere
to a wrong decision.
[10]
If the facts reveal that the administrator is unlikely to apply a
fresh and open mind to the decision, it is a relevant factor
to bear
in mind. In this case I strongly suspect that the Fund is vehemently
wedded to its decision to award the entire pension
benefit to fourth
respondent.
[47]
Nevertheless, applying the aforesaid considerations to this case, I
am not convinced that I am
in as good a position to make a decision
on the award of the pension benefit as the Fund would be. I say so
because of a number
of questions that the Fund has not investigated
thus far, or has investigated, but only superficially. The answers to
these questions
are unknown, but are directly pertinent to any
decision concerning the pension benefit:
[46.1]
What are the actual maintenance requirements of the sixth and seventh
applicants?
[46.2]
Is the trust solvent, and is it capable of carrying the maintenance
burden of the sixth and seventh applicants?
[46.3]
What are the actual maintenance requirements of the fourth respondent
considering the fact that she has already received
a substantial sum
in cash from the proceeds of the life assurance policies, that she
has been employed since 2015, and that she
was remarried in 2018?
[48]
It is unfortunate that these facts have not already been established.
The decision has been delayed
for a number of years, and it would be
tempting to put an end to the dispute by substituting the Fund’s
decision with an
order dividing the pension benefit equally. The PFA
indicated in her decision to set aside the first decision what issues
should
be addressed. Her finding seems to have fallen on deaf ears.
Notwithstanding the PFA’s finding, the Fund continued to take
a
superficial view of the matter, taking the second decision without
properly investigating the questions raised above. Given the
Fund’s
vehement opposition to the application, and the nature of the
arguments it put forth, I am also not convinced that
the Fund will
bring an open mind to the matter.
[49]
However, only the Fund would be in a position to make the necessary
enquiries in regard to the
issues raised above, and to take a
decision based on the facts that it then uncovers. I do not know what
the Fund will find, and
I am therefore unable to say that the outcome
that applicants seek is a foregone conclusion. In these circumstances
I am unable
to grant prayer 3, the substitution order. It is also
unnecessary to grant prayer 1, wherein applicants seek an order
setting aside
the PFA’s decision not to hear a complaint
against the second decision.
[50]
I am entitled to give directions to the Fund by virtue of the
provisions of
section 8
(1) (c) (i), and I intend to do so, to
expedite the matter and to ensure that the Fund fully investigates
the outstanding issues.
[51]
In the premises I make the following order:
[51.2]
Condonation is granted for the late filing of the applicants’
replying affidavit.
[51.2]
The decision of the second respondent on 13 November 2018, to
allocate 100% of the pension benefit of the Late Rudolph
Marthinus
van der Merwe to fourth respondent is reviewed and set aside in terms
of
section 6
(1) of the
Promotion of Administrative Justice Act,
2000
.
[51.3]
Second respondent is ordered to fully investigate the following:
[51.3.1]
What are sixth and seventh applicants’ actual maintenance
requirements, if any?
[51.3.2]
Is the Dolf van der Merwe Familie Trust and the Estate Late Van der
Merwe solvent and capable of
bearing the maintenance requirements of
the sixth and seventh applicants?
[51.3.3]
What are the fourth respondent’s actual maintenance
requirements,
if any, taking into consideration her state of
employment, her remarriage, and the fact that she received payment in
the sum of
R 4 371 960.50 after the deceased passed away?
[51.3.4]
What is the status of fourth respondent’s maintenance
claim
against the Estate Late Van der Merwe?
[51.3.5]
Is the fourth respondent’s maintenance claim against the
estate
likely to have an impact on the proceeds available to sixth and
seventh applicants from the trust and the estate, and how,
if at all,
will the claim affect their maintenance needs?
[51.4]
Second respondent shall conduct the aforesaid investigation and take
a decision in terms of
section 37
C (1) (a) of the Pension Fund Act,
1956 within 90 days of the granting of this order.
[51.5]
Second respondent shall pay the costs of the application.
JJC Swanepoel
ACTING JUDGE OF THE HIGH COURT
GAUTENG DIVISION OF THE HIGH
COURT, PRETORIA
Electronically submitted
therefore unsigned
Delivered:
This judgement was prepared and authored by the Judge whose name is
reflected and is handed down electronically
by circulation to the
Parties/their legal representatives by email and by uploading it to
the electronic file of this matter on
CaseLines. The date for
hand-down is deemed to be 12 February 2021.
APPLICANT’S
COUNSEL:
Adv. GW Amm SC
APPLICANT’S
ATTORNEY:
Cox Yeats
SECOND
RESPONDENT’S COUNSEL:
Adv. S Khumalo
SECOND
RESPONDENT’S ATTORNEY:
Shepstone & Wylie
MATTER
ON ROLL:
27 January 2021
(decided on
papers)
JUDGMENT
HANDED DOWN ELECTRONICALLY 12 February 2021
[1]
Uitenhage
Transitional Local Council v South African Revenue Service
2004 (1)
SA 292
(SCA), ([2003] ZASCA 37 par. 6)
[2]
Mulaudzi
v Old Mutual Life Assurance Company (South Africa) Limited 2017 (6)
SA (SCA); ([2017] ZASCA 88 at par. 2
[3]
Sithole
v ICS Provident Fund and another [2000] 4 BPLR 430 (PFA)
[4]
[2003]
2 ALL SA 616
(SCA); See also the endorsement of this
dictum
by
the Constitutional Court in Bato Star Fishing (Pty) ltd v Minister
of Environmental Affairs and Tourism and others 2004 (4)
SA 490 (CC)
[5]
1969
(2) SA 72 (T);
[6]
2005
(4) SA 67 (SCA)
[7]
2015
(5) SA 245
(CC); See Allpay Consolidated Investment Holdings and
others v Executive Officer of the South African Social Security
Agency
and others [2013] ZACC 42
[8]
From
para. 48 and further
[9]
Maske
and Gilbert v Aberdeen Licensing Court,
1930 AD 30
; Gildenhuys v
Parys Liquor Licensing Board and another 1957 (4) SA 142 (O)
[10]
See
Johannesburg City Council (
supra)