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[2016] ZAGPPHC 16
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University of Limpopo v Government Employees Pension Fund and Another (91954/2015) [2016] ZAGPPHC 16 (21 January 2016)
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
DIVISION, PRETORIA
21/01/2016
CASE
NO:91954/2015
In
the matter between:
UNIVERSITY
OF
LIMPOPO
Applicant
and
GOVERNMENT
EMPLOYEES PENSION FUND
First
Respondent
JAFTA
KODUPO
MAPHATANE
Respondent
JUDGMENT
MURPHY
J
1.
The applicant, the University of Limpopo, as a matter of
semi-urgency, seeks an order restraining the first respondent, the
Government Employees Pension Fund (“GEPF”), from making
payment to the second respondent of any funds held on his behalf
as a
benefit, pending finalisation of an action instituted by the
applicant against the second respondent. Only the second respondent
opposed the application. The second respondent was employed by
the university as a logistics manager.
2.
The applicant’s summons instituting the action was issued on 2
July 2015. The particulars of claim allege that the Deputy
Vice
Chancellor, Prof Mashike, during 2008, orally instructed the second
respondent, in his capacity as an employee of the university,
to
create a photographic association on behalf of the university. The
purpose of the photographic association was the taking of
photographs
at graduation ceremonies. The second respondent was authorised to
sell photographic packages to students and to receive
payment of
moneys which the university claims were owing to it.
3.
It is common cause that during the period 2008 to 2014, the second
respondent collected and received from students various sums
of money
in respect of the sale of photographs. The applicant alleges in the
particulars of claim that it was a term of the agreement
between the
parties that the second respondent would “from time to time”
render to the university accounts supported
by vouchers in respect of
the amounts collected by him and would pay such amounts within a
reasonable time of collection. According
to the applicant, at least
3786 photographic packages were sold to students at a rate that
varied from R320 to R450. It therefore
maintains that the second
respondent would have received an amount of R1 482 930, which amount
it seeks to recover in the action.
4.
As stated, the present application is for an interdict restraining
payment to the second respondent of his pension benefit pending
the
resolution of the action. In its founding affidavit, the applicant
provides few details regarding the formation or terms of
the contract
which it alleges exists between it and the second respondent. Other
than the say so of the deponent to the founding
affidavit, there is
no evidence in the form of correspondence, invoices, demands for
payment, financial statements or the like
which confirm that such a
contractual arrangement was in place for the 6 year period. It is
common cause that no payments were
made by the second respondent to
the applicant during the 6 year period, in respect of the
photographic work he performed.
5.
Prior to instituting action against the second respondent, and while
he was still in its employ, the applicant instructed its
attorneys to
direct a letter to the GEPF calling for an undertaking that it would
not pay the second respondent his pension benefits
pending the
finalisation of the action. The letter, dated 26 June 2015, alleges,
without any specificity, that the funds allegedly
misappropriated are
those the second respondent received in respect of the photographic
packages. In the letter, the attorneys
referred to the provisions of
section 37D of the Pension Funds Act
[1]
which
inter
alia
permits a pension fund to deduct any amount due by a member to his
employer on the date he withdraws from the pension fund in respect
of
compensation for any damage caused to the employer by reason of any
theft, dishonesty, fraud or misconduct by the member and
in respect
of which the member has in writing admitted liability or a judgment
has been obtained against the member. The parties
subsequently have
discovered that the Pension Funds Act does not apply to the GEPF. The
relevant law is the Government Employees
Pension Law, 1996
[2]
which contains a provision similar to section 37D of the Pension
Funds Act.
6.
The GEPF did not give the undertaking sought by the applicant. This
did not present a problem to the applicant while the second
respondent remained in the employment of the applicant, as he could
only access his pension benefits on leaving employment. The
second
respondent was dismissed by the applicant, subsequent to a
disciplinary hearing, on 4 November 2015. With the termination
of his
employment, the second respondent became entitled to withdraw his
pension benefit from the GEPF. The applicant provides
scant detail
regarding the reasons for and the circumstances surrounding the
second respondent’s dismissal. In paragraph
8 of the founding
affidavit, it states:
“
Dismissal of the
Second Respondent was based on findings of guilt relating to
misconduct and/or gross negligence and intimidation
linked with
threats of bodily harm. Furthermore, there was a destruction of trust
in the employment relationship.”
The
second respondent in his answering affidavit merely denies these
allegations. There are no other averments regarding the dismissal.
Accordingly, it is not clear whether the second respondent’s
dismissal related solely to the dispute about the photographic
packages or was based also on other issues.
7.
After the dismissal, the applicant’s attorneys on 9 November
2015 again sought an undertaking from the GEPF not to pay
the second
respondent his pension benefit pending the finalisation of the
action. When no undertaking was forthcoming, the applicant
launched
this application for an interdict.
8.
In September 2015, prior to his dismissal, the second respondent
filed his plea in the action proceedings. In it he raised a
special
plea that any claim for payments received by him between 2008 and
July 2012 would have prescribed by reason of the summons
only being
issued in July 2015. He also pleaded over on the merits. His defence
to the action is that he was approached by the
applicant to perform
the photographic services not as an employee of the university but as
an independent contractor and that the
amounts received by him from
the students constituted remuneration for services rendered by him to
the students in his personal
capacity. He admitted that he had
refused to render an account to the applicant, or to pay over any
money to it, on the ground
that he had no obligation to do so.
9.
The second respondent elaborated on his defence in paragraphs 15-30
of his answering affidavit in this application. His version
is as
follows. During 2008 he was commissioned by the Deputy Vice
Chancellor, Prof Mashike, to serve as an independent contractor
to
take photographs at university events, especially at graduation
ceremonies and that he would be paid by the students directly.
Prof
Mashike was aware that the second respondent enjoyed photography in
his leisure time and this was probably the reason he was
approached.
The second respondent started rendering the services to students
during 2008, operated under the name of University
of Limpopo Student
Photographic Association and opened a bank account in the name of the
Association. The second respondent utilised
his own resources and
know-how and trained various students to assist him. He purchased
operational equipment out of his own pocket
and was not compensated
for his capital outlay by the applicant. The Association also
incurred operational expenses including:
student salaries, uniforms,
catering and equipment maintenance.
10.
During 2012, an investigation was mandated into the activities of the
photographic association. The second respondent understood
the
imputation to be that he had been awarded a tender in an irregular
fashion. Ernst and Young were appointed to investigate,
and,
according to the second respondent, all involved were ultimately
vindicated, without any wrongdoing having been established.
Therefore, business continued as usual until December 2014 when the
Executive Director: Marketing and Communications, Mr. Mohuba,
the
deponent to the founding affidavit, initiated a further
investigation. The second respondent again asserted that the
photographic
business was his own enterprise. He further averred that
the business did not interfere with his ordinary duties as logistics
manager
at the university. Arising out of the second investigation,
summons was issued against him.
11.
During the course of the second investigation, the second
respondent’s file containing all the association’s
vouchers
of expenditure etc. disappeared “mysteriously”
from his office.
12.
The second respondent averred also that he had never been requested
by the applicant to account in respect of the earnings yielded
by the
photographic association or to make payment of the income generated
by the photographic business to the applicant. He also
pointed out
that in claiming the proceeds earned by the photographic business,
the applicant failed to take into account the operational
expenditure
incurred by the Association and that a substantial portion of the
funds was appropriated towards community development
and student aid
initiatives.
13.
The applicant did not deal in its replying affidavit with many of the
specific averments of the second respondent. Thus, it
did not
challenge, deny or even deal with the following averments: i) the
second respondent did the photographic work as an independent
contractor; ii) received the income as remuneration for his services;
iii) invested his personal capital in the project; iv) had
no
obligation to render an account or pay over the money to the
university; v) incurred substantial running costs; vi) applied
the
proceeds of the venture for community development and student aid
initiatives; and vii) had received a clean bill of health
from Ernst
and Young pursuant to the first investigation in 2012.
14.
With regard to the second respondent’s plea of prescription,
the applicant merely denied prescription, without setting
out any
factual basis for its denial, and additionally contended that the
portion allegedly owing after July 2012 has not prescribed.
There is
no evidence of any kind indicating that the applicant ever made any
demand in respect of any monies owing to it by the
second respondent
either before or after 2012. And likewise, there is no evidence that
prior to the second investigation it ever
called upon the second
respondent to account to it in respect of any amounts paid to the
Association.
15.
It is trite that in order to succeed in obtaining an interim
interdict the applicant is required to show that it has i) a
prima
facie
right, ii) a well-grounded apprehension of irreparable harm
if the interim relief is not granted; iii) the balance of convenience
favours it; and iv) it has no other satisfactory remedy.
16.
The onus is upon the applicant to put forward sufficient evidence to
establish a
prima
facie
right, albeit open to some doubt. It will never be enough for the
court to merely accept the applicant’s allegations. The
applicant must set out the facts in as complete a way as the
circumstances demand. The stating of bald, unsubstantiated
allegations
poses the risk to the applicant that significant doubt
will be cast on its version. The proper approach is for the court to
consider
the facts as set out by the applicant together with any
facts set out by the respondent which the applicant cannot or does
not
dispute and to decide whether, with regard to the inherent
probabilities and the ultimate onus, the applicant should on those
facts
obtain final relief at the trial. The facts set up in
contradiction by the respondent should then be considered and if they
throw
serious doubt on its case the applicant cannot succeed.
[3]
17.
The applicant bases its claim of a
prima
facie
right on its assumed entitlement to deduct an amount from the second
respondent’s pension benefits in respect of any loss
which it
has sustained as employer as a consequence of theft, fraud,
negligence or any misconduct on the part of the second respondent.
The relevant provision is section 21 of the Government Employees
Pension Law, 1996,
[4]
which provides that pension benefits generally are not liable to be
attached or to be subjected to any form of execution.
Section
21(3)(c) however provides for the exception upon which the applicant
seeks to rely. The pertinent part of the section reads:
“
21. Prohibition
on cession and attachment of benefits.
– (1) No benefit or
right in respect of a benefit payable under this Act shall be capable
of being assigned or transferred
or otherwise ceded or of being
pledged or hypothecated or, save as is provided in
section 26
or
40
of the
Maintenance Act, 1998
, and section 7(8) of the Divorce Act,
1979 (Act No. 70 of 1979), be liable to be attached or subjected to
any form of execution
under a judgment or order of a court of law.
(2) ……
(3) Notwithstanding the
provisions of subsection (1) or of any other law –
(a) any amount which is
payable to the employer or the Fund by any member in the employment
of such employer on the date of his
or her retirement or discharge,
or which the employer is liable to pay in respect of such member;
(b) any amount which has
been paid to any member, pensioner or beneficiary in accordance with
the provisions of this Law and to
which such member, pensioner or
beneficiary was not entitled;
(c) the amount of any
loss which has been sustained by the employer through theft, fraud,
negligence or any misconduct on the part
of any member, pensioner or
beneficiary which has been admitted by such member or pensioner in
writing or has been proved in a
court of law;
(d) any amount, plus
interest at the rate determined by the Board after consultation with
the actuary, due to the Fund in respect
of an amount for which the
Fund becomes liable under a guarantee furnished in respect of a
member for a loan granted by some other
person to that member in
terms of the rules, may be deducted from the benefit payable to such
member, pensioner or beneficiary
under this Law in a lump sum or in
such instalments as the Board may determine.”
18.
The question to be answered in determining if the first requisite for
an interim interdict has been met is whether the applicant
has put
forward
prima facie
proof of facts that establish the
existence of its entitlement to deduct an amount from the benefit. Do
the averments in the affidavits
in the application before me
establish
prima facie
that the applicant sustained any loss
through theft, fraud, negligence or misconduct by the second
respondent? In my judgment they
do not. There are simply two bald and
unsubstantiated allegations: firstly, that the second respondent
failed to render an account,
and secondly refused to pay over monies.
There is nothing beyond that. The second respondent sets up a number
of facts in contradiction
of those bald allegations. He explained
that he set up business as an independent contractor, expended his
own money, ran up running
costs, and most importantly was never asked
to render an account in the first 6 years he ran the business. None
of that has been
challenged or contradicted by the applicant.
Moreover, had the second respondent been obliged from 2008 to pay
over the monies
received by the photographic business to the
university, it is inherently improbable that steps would not have
been taken to recover
the monies before 2015. The probabilities
accordingly favour the second respondent’s version that he had
no obligation to
make any such payment. In the premises, in view of
the serious doubt thrown on the applicant’s case, the applicant
has failed
to establish that it has a
prima facie
right to
deduct any amount from the second respondent’s pension benefits
on the grounds of it sustaining any loss from the
alleged misconduct
of the second respondent. The applicant moreover has not made out any
case in its founding affidavit for an
anti-dissipation interdict.
19.
In the premises the application for an interim interdict cannot
succeed, with the result that the application is dismissed with
costs.
JR
MURPHY
JUDGE
OF THE HIGH COURT
Date
Heard: 27 November 2015
Counsel
for Applicant: Adv P Venter
Instructed
by: Van Zyl Le Roux Inc
Counsel
for Respondent: Adv SG Gouws
Instructed
by: Verveen Attorneys
Date
of Judgment:
[1]
Act 24 of 1956
[2]
Proclamation No.21 of 1996
[3]
Webster
v Mitchell
1948 (1) SA 1186
(W) at 1184.
[4]
Proclamation No 21 of 1996