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[2017] ZAGPPHC 83
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Sentinel Retirement Fund v C V Bold and Others (80105/2015) [2017] ZAGPPHC 83 (7 March 2017)
IN
THE HIGH COURT OF SOUTH AFRICA
(GAUTENG
DIVISION, PRETORIA)
Case
number: 80105/2015
Date:
7/3/17
NOT
REPORTABLE
NOT
OF INTEREST TO OTHER JUDGES
REVISED
In
the matter between:
SENTINEL
RETIREMENT
FUND
APPLICANT
AND
CV
BOLD FIRST
RESPONDENT
M
A LUKHAIMANE
N.O. SECOND
RESPONDENT
HARMONY
GOLD MINING COMPANY
LTD THIRD
RESPONDENT
JUDGMENT
TOLMAY,
J:
INTRODUCTION:
[1]
This is an application in terms of section 30P of the Pension Funds
Act, 24 of 1956 ("the PFA") in which the applicant
("Sentinel"), a pension fund registered in terms of section
4 of the PFA, seeks to set aside a determination made by
the second
respondent, the Pension Funds Adjudicator ("the Adjudicator"),
which she made in terms of section 30M of the
PFA.
[2]
The Adjudicator made the determination pursuant to a complaint lodged
with her by the first respondent ("Mr Bold").
Mr Bold was a
member of Sentinel, and an employee of the third respondent
("Harmony"). Mr Bold lodged a complaint with
the
Adjudicator in terms of section 30A of the PFA, essentially relating
to Sentinel's decision not to grant him a disability benefit.
The
Adjudicator upheld his complaint and it is this determination which
is the subject of this application.
[3]
The Adjudicator abides by the decision of the Court. Harmony did not
oppose the application.
[4]
After considering the matter the Adjudicator made the following
order:
"6.1.1 The first
respondent is ordered to award the complainant
a
disability
benefit, taking into consideration the incorrect benefit
already
paid to him, within 4 weeks from date of this determination, and
6.1.2 Alternatively,
the second respondent should re-appoint the complainant to perform
administrative duties."
[5]
It is common cause between the parties that the Adjudicator acted
ultra vires
in making the order set out in par 6.1.2. It is
also common cause that Mr Bold never requested reinstatement, nor did
it form part
of his complaint. As a result it must follow that par
6.1.2 of the order must be set aside.
[6]
Pertaining to the Adjudicator's order contained in 6.1.1, the
Adjudicator provides the following reasons for her order in her
determination:
''The medical evidence
indicated that the complainant is totally and permanently disabled to
perform heavy physical work such as
that performed by a diesel
mechanic and in a similar occupation. However during 2014, the second
respondent sought to re-assign
the complainant to perform the usual
functions of a charge hand motor mechanic. Due to the physical
impairments he had incurred,
he would not be in a position to perform
such functions. The complainant was dismissed on the grounds of
medical impairment. However,
the complainant had not performed such
work for a period of 11 years and did administrative work for this
period. He was not medically
unfit to continue doing the
administrative work. Thus, he was eligible for an in service
disability benefit as he was totally
and permanently disabled to
perform the usual functions as
a
charge hand motor mechanic
that the second respondent sought to re-assign him to do and not
administrative work within the mining
industry that he had been
engaged in for the past eleven years (see IMP v Altron Group Pension
Fund [2003]
5
BPLR 4677 (PFA))."
[7]
While the Adjudicator's reasoning may have been correct, it is
important to note that no finding was made indicating that the
Board
of Trustees of Sentinel's ("the Board") decision was
unreasonable or that the Board failed to properly exercise
its
discretion.
THE
MATERIAL FACTS:
[8]
Mr Bold was employed by Harmony as a diesel mechanic from 1990 until
his employment was terminated on medical grounds on 12
August 2014.
During 1995 Mr Bold was involved in a motor vehicle accident and
sustained injuries that rendered him unable to cope
with the heavy
physical duties that a diesel mechanic is ordinarily tasked with.
[9]
It is common cause that Harmony had accommodated Mr Bold due to the
injuries he sustained by assigning him to perform sedentary
or
administrative duties. Mr Bold had performed such sedentary work for
11 years after the accident. Despite his functions having
changed, Mr
Bold was still employed as a diesel mechanic, received the same
remuneration as he always had and paid the same pension
contributions
to Sentinel.
[10]
It is the uncontested version of Mr Bold that in 2014 his foreman had
decided that he had to perform the heavy physical duties
of a diesel
mechanic for which he was employed. Despite attempting to do so, Mr
Bold was unable to cope and was subsequently dismissed.
Mr Bald's
Medical Incapacitation Form confirms that the medical practitioner
found him to be permanently unfit for his normal duties
due to an
occupational related incident. There is no explanation on the papers
for the decision by Harmony to insist that Mr Bold
perform the actual
duties of a diesel mechanic, after allowing him to do administrative,
sedentary work for 11 years. He was only
required to perform the
heavy duty work of a diesel mechanic in the weeks preceding the
termination of his employment and up to
the completion of his
application for a permanent disability benefit.
[11]
On 13 August 2014, Mr Bold submitted an application for permanent
disability together with medical reports to Sentinel, in
terms of
which he applied to be found permanently disabled as a diesel
mechanic.
[12]
The Board concluded that Mr Bold was not permanently disabled to
perform his own and similar occupation in terms of the rules
of the
fund. The Board's reasoning was that Mr Bold had been employed in an
administrative capacity for 11 years and was not permanently
disabled
to perform administrative functions.
[13]
Mr Bold was dissatisfied with the Board's decision and submitted a
complaint to the Adjudicator in terms of the PFA. Mr Bald's
complaint
essentially was that he qualified for the disability benefit and
should have accordingly been paid same by Sentinel.
The complaint was
forwarded to all relevant parties and Sentinel provided a response to
the complaint.
[14]
In the response the Board stated
inter alia
that Sentinel's
claims committee deferred the matter to an occupational therapist who
stated that Mr Bold was totally and permanently
disabled to perform
the functions of a diesel mechanic, but was not totally and
permanently disabled to perform administrative
duties.
[15]
The matter was then referred to Sentinel's Occupational Health
Consultant who filed a report and all the other medical reports
obtained pertaining to Mr Bold was included in this report.
[16]
It is common cause that Mr Bold received an employer's package from
Harmony and that the package was subject to the condition
that an
employee who is a member of Sentinel will only be eligible for the
package if he had unsuccessfully applied to Sentinel
for a disability
benefit.
[17]
Sentinel maintains that if Mr Bold receives both the disability
benefit and the employer's package he will be dually benefitted.
Sentinel further submits that if Mr Bold persists in seeking a
disability benefit, he must tender return of the employer's package
to Harmony.
[18]
A perusal of the papers reveals that Mr Bold tendered return of the
employer's package. The papers do not set out what the
amount is that
he received, if he succeeds, any order made by this Court should
provide for the return of any amount received by
him in this regard.
[19]
The Adjudicator found in favour of Mr Bold as per her determination
dated 24 August 2015. Sentinel now seeks to have the determination
set aside and Mr Bold's complaint dismissed.
NATURE
AND SCOPE OF SECTION 30P PROCEEDINGS:
[20]
Section 30P of the PFA 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."
[21]
The approach to be adopted by a Court in considering a section 30P
application and the nature of such applications has been
dealt with
in several judgments. In the case of
Cape
Town Municipality v South African Local Authorities Pension Fund and
Another
[1]
the
Supreme Court of Appeal provided that the appeal under section 30P is
a complete rehearing and a fresh determination on the
merits of the
matter with or without additional evidence or information and an
aggrieved party is entitled to have the legal dispute
that was dealt
with by the Adjudicator reconsidered
de
nova
by
the Court.
[22]
In
Meyer
v ISCOR Pension Fund
[2]
the
Court stated:
"From the wording
of s 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 s 30P(2) to
a
consideration of 'the
merits of the complaint in question'. The dispute submitted to the
High Court for adjudication must therefore
still be
a
'complaint'
as defined. Moreover, it must be substantially the same 'complaint'
as the one determined by the adjudicator."
[23]
As stated in
De
Beers Pension Fund v Pension Funds Adjudicator and Another
[3]
,
an
application in terms of section 30P is
sui
generis
and
a Court, in addition to its powers of review, exercises jurisdiction
analogous to the original jurisdiction. Consequently a
Court has the
power to consider the complaint afresh and make any order that it
deems appropriate.
THE
PENSION FUND's RULES
[24]
The binding nature of a pension fund's rules is statutorily confirmed
in section 13 of the PFA.
[4]
[25]
The relevant rule dealing with the circumstances under which a member
may receive a disability benefit provides as follows
[5]
:
“
7.
DISABILITY
BENEFIT IN SERVICE
7.1
...
7.2 Terms and Conditions
7.2.1 The DISABILITY
COVER options available for inclusion m the SPECIAL RULES shall be
determined annually by the TRUSTEES in consultation
with the ACTUARY
and shall be notified in writing to the EMPLOYER or MANAGEMENT
COMMITTEE (if applicable) and MEMBERS annually
in advance.
7.2.2 The TRUSTEES
shall, in their sole discretion, determine when
a
MEMBER
becomes totally and permanently disabled to perform his/her own and
any similar occupation in a specific environment. The
burden of proof
of such permanent disability shall rest with the MEMBER.
7.2.3 The TRUSTEES
shall determine when the DISABILITY COVER shall become payable.
7.2.4 The TRUSTEES
may, in their sole discretion, insure all or part of the DISABILITY
COVER AMOUNT with
a
REGISTERED INSURER."
(Court's
emphasis)
[26]
Rule 7.2.2 is explicit in its requirements:
1.1 It is within the
Board's sole discretion to determine whether a member has become
disabled; and
1.2 In exercising its
discretion the Board must be satisfied that:
1.2.1 The member has
become totally and permanently disabled to perform his own
occupation; and
1.2.2 Any similar
occupation.
[27]
In a letter dated 25 February 2015 addressed to Mr Bold, the Board
provides the following reasoning for the repudiation of
his claim:
''According to the
rules of the fund you have to proof that you are totally and
permanently disabled for our
[sic]
own and similar occupation
in
a
specific environment.
Diesel Mechanic is
classified as heavy physical work and Administrative as sedentary
work. Seeing that your last eleven years were
in an administrative
position, the Board of Trustees acted on this as your occupation.
Due to the fact that
you would be able to continue with the occupational functions that
you have performed the last eleven years
you are not totally and
permanently disabled for your own and similar occupations in
a
specific environment."
ISSUES
TO BE DETERMINED:
[28]
The Court is not limited to the question whether the Adjudicator's
determination was right or wrong and should consequently
determine
whether the Board exercised its powers properly in terms of the rules
when it decided not to award Mr Bold a lifelong
permanent disability
benefit. It is necessary to consider whether the Board properly
exercised its discretion when it made the
decision to repudiate Mr
Bald's claim.
[29]
It is common cause that in terms of the rules, it is within the
Board's sole discretion whether or not to award permanent disability
benefits to a member. It is also common cause that as was decided in
Gerson v
Mondi Pension Fund & Others,
[6]
that
the Court has no jurisdiction to enquire into the correctness of the
conclusion arrived at, but the jurisdiction of the Court
is limited
to the question whether the discretion has indeed been exercised. In
this regard the following was said in
Gerson
(supra):
"15. In the
determination of Stacey (Koevort) v Old Mutual Protekor Pension fund
and Another the erstwhile pension funds adjudicator
sets out the law
on this point:
'As already alluded to
in the preliminary ruling, the effecting of an equitable distribution
requires of the board of trustees to
take into consideration all the
relevant factors and discard irrelevant ones. The board may also not
unduly fetter its discretion,
nor should its decision reveal an
improper purpose. If it has acted as aforesaid, no reviewing tribunal
will lightly interfere
with their decision. It should be noted that
even if I may not necessarily agree with the decision of the board,
that in itself
is not a ground for setting aside the board's
decision. This is because it is not my role as a reviewing tribunal
to decide on
what is the fairest and most generous distribution.
The
test in law is whether the board has acted rationally and arrived at
a
proper and lawful decision."
(Court's
emphasis)
[28] In determining
the applicant's complaint to the adjudicator, the adjudicator had no
power simply to substitute his or her discretion
for that of the
board. Section 30E of the Act provides that the adjudicator shall
investigate any complaint and 'may make the order
which any court of
law may make'.
Since
a
court of law
could not without more substitute its discretion for that of the
board, it follows that neither could the adjudicator.
This court is
in that respect in the same position as the adjudicator
."
(Court's emphasis)
[30]
It is recognised by the Courts that the Board's decision can be
interfered with where it is demonstrated that it had taken
into
account irrelevant, improper or irrational factors, or where its
decision can be said to be one that no reasonable body of
trustees
properly directing themselves could have reached.
[7]
[31]
Counsel for Mr Bold referred to the English Court of Appeal in
Edge
and Others v Pensions Ombudsman and Another
where the proper
exercise of a discretionary power and what is meant by reasonableness
is dealt with. The Court in the above case
espoused earlier judgments
which stated that the ordinary duty which the law imposes on a person
who is entrusted with the exercise
of a discretionary power, is that
he exercises the power for the purpose for which it is given, giving
proper consideration to
the matters which are relevant and excluding
from consideration matters which are irrelevant.
[32]
It was further argued that the English Court of Appeal endorsed the
following principles which were laid down by earlier decisions
of
that Court as the principles with which the trustees must comply:
a. The Trustees must ask
themselves the correct questions;
b. They must direct
themselves correctly in law. In particular they must adopt a correct
construction of the pension fund rules;
and
c. They must not arrive
at a perverse decision, i.e. a decision to which no reasonable body
of trustees could arrive, and they must
take into account all
relevant but no irrelevant factors.
[33]
If there was a failure by the Board to comply with the aforesaid
principles or if they acted contrary thereto the discretion
was not
exercised properly and it was argued that in this case such
discretion was not properly exercised.
[34]
In
Bato
Star Fishing (Pty) Ltd v Minister of Environmental Affairs and
Others
[8]
,
which
dealt with the test for reasonableness within the context of PAJA
[9]
it was held that what will constitute a reasonable decision will
depend on the circumstances of each case. Further, it held that
the
factors relevant to determining whether a decision is reasonable or
not will include,
inter
alia,
the
nature of the decision, the range of factors relevant to the decision
and the reasons for the decision.
[35]
Mr Bold bears the
onus
despite
the fact that Sentinel is formally the Applicant
[10]
.
[36]
Mr Bold's complaint to the Adjudicator, arose from his
dissatisfaction with the Board's decision that he was not entitled to
the disability benefit. In order to determine whether Mr Bold was
entitled to the said benefit, it is necessary to consider whether
the
Board properly exercised its discretion when it made the decision to
repudiate his claim.
[37]
It is accepted, by Mr Bald's representative, and correctly so, that
in terms of the rules, it is within the Board's sole discretion
whether or not to award permanent disability benefits to a member.
[38]
Further, it is also common cause that where a discretionary power has
been conferred on the Board, the Court and the Adjudicator
cannot,
without more, substitute their discretion for that of the
trustees.
[11]
[39]
On an evaluation of the facts it transpired that the Board exercised
its discretion after considering the medical reports as
well as the
facts of this case. Especially the fact that Mr Bold has been unable
to perform the duties of a diesel mechanic for
eleven years, but he
was accommodated in an administrative capacity. The reports and
opinions of the medical experts as well as
the facts were all
relevant to the ultimate exercise of the Board's discretion. There is
no indication that the Board acted irrationally
or took into
consideration irrelevant facts. Whether one agrees with the Board's
decision is of no consequence as it is not for
this Court or the
Adjudicator to determine whether the Board was indeed correct to come
to this conclusion. In my view the Board
exercised its discretion
properly and did indeed arrive at a proper and lawful decision.
[40]
The Adjudicator in my view erred in substituting her discretion with
that of the Board and therefor her award can't stand.
CONCLUSION:
[41]
In the light of the aforesaid I am of the view that the Board of
Trustees did exercise their discretion properly and the Adjudicator's
decision must be reviewed and set aside.
[42]
I make the following order:
42.1 The determination of
M A Lukhaimane N.O. under reference number PFA/NC/00014242/2015NVT
dated 24 August 2015, which was made
in terms of section 30 M of the
Pensions Fund's Act, 24 of 1956 in respect of a complaint lodged by
CV Bold is set aside and substituted
with the following: "The
complaint lodged by C V Bold is dismissed".
42.2
The First
Respondent is ordered to pay the costs of the application, which will
include the costs of senior counsel.
--------------------------------
R G TOLMAY
JUDGE OF THE HIGH
COURT
DATE
OF HEARING: 7 FEBRUARY 2017
DATE
OF JUDGMENT:
7 MARCH 2017
ATTORNEY
FOR APPLICANT: SHEPSTONE & WYLIE ATTORNEY
COUNSEL
FOR APPLICANT:
ADV P VAN DEN BERG (SC)
ATTORNEY
FOR RESPONDENT: SOONDER INCORPORTATED
COUNSEL
FOR RESPONDENT:
ADV KA MAGAN
[1]
2014 (2) SA 365
(SCA) at pg 372, para 28.
[2]
2003 (2) SA 715
(SCA) at p 7251 - 726A.
[3]
2003 (2) All SA 239
(C) at p 245 - 256.
[4]
"Section 13 reads:
Subject to the
provisions of this Act, the rules of a registered fund shall be
binding on the fund and the members, shareholders
and officers
thereof, and on any person who claims under the rules or whose claim
is derived from a person so claiming."
See also
: Tek
Corporation Provident Fund and Others v Lorentz
1999 (4) SA 884
(SCA) at 894, paragraph 15;
Mostert NO v Old Mutual Life
Assurance Co (SA) Ltd
2001 (4) SA 159
(SCA) at 175, paragraph 30
[5]
[6]
2013(6) SA 162 (GSJ) at p 168 par 14, 15 & 28
[7]
Edge and Others v Pensions Ombudsman and Another
1999 (4) All ER 546
(CA) at p 559 para D - F.
[8]
[2004] ZACC 15
;
2004 (4) SA 490
(CC) at pg 513, para 45.
[9]
Promotion of Administrative Justice Act 3 of 2000
.
[10]
See
Rule 7.2.2
(supra): As regards onus, the Supreme Court of Appeal
in
Meyer
v Iscar Pension Fund
[2003]
] All SA 40 (SCA) at p 47 para 8 after dealing with the nature of a
section 30P
application, said the following:
"Since it is an
appeal, it follows that where, for example, a dispute of fact on the
papers is approached in accordance with
the guidelines formulated by
Corbett JA in
Plascon Evans Paints Ltd v Van Riebeeck Paints
(Pty) Ltd
[1984] ZASCA 51
;
1984 (3) SA 623
(A) 634E-635D, the complainant should
be regarded as the 'applicant' throughout, despite the fact that it
is the other side who
is formally the applicant to set the
Adjudicator's determination aside. In case of a 'genuine dispute of
fact' on the papers
as contemplated in
Plascon Evans
, the
matter must therefore, in essence, be decided on the version
presented by the other side... "
[11]
Gerson v Mondi Pension Fund and Others
2013 (6) SA 162
(GSJ) at pg
168 para 28.