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[2021] ZASCA 144
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Nash and Others v Cadac Pension Fund (In Curatorship) (Registration Number: 12/8/0020425) and Others (545/2020) [2021] ZASCA 144 (11 October 2021)
THE
SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Not
Reportable
Case No: 545/2020
In the matter
between:
SIMON
JOHN NASH
FIRST
APPELLANT
CADAC (PTY)
LIMITED
SECOND APPELLANT
ANTOINETTE
CRONJE
THIRD APPELLANT
IRIS ROSE
SCHOEMAN
FOURTH APPELLANT
SAMANTHA
MAYS
FIFTH APPELLANT
and
THE
CADAC PENSION FUND (IN
CURATORSHIP)
(REGISTRATION
NUMBER:
12/8/0020425)
FIRST
RESPONDENT
ANTONY
LOUIS MOSTERT NO
SECOND RESPONDENT
JOHAN
ESTERHUIZEN NO
THIRD RESPONDENT
KAREN
KEEVY NO
FOURTH RESPONDENT
NMG
ADMINISTRATORS (PTY) LIMITED
(REGISTRATION
NUMBER: 1998/005937/07)
FIFTH RESPONDENT
Neutral
citation:
Simon
Nash and Others
v
The Cadac Pension Fund (In Curatorship) (Registration Number:
12/8/0020425) and Others
(545/2020)
[2021] ZASCA
144
(
11
October
2021)
Coram:
DAMBUZA,
MAKGOKA and MBATHA JJA and LEDWABA and UNTERHALTER AJJA
Heard:
17
May 2021
Delivered:
This
judgment was handed down electronically by circulation to the
parties' representatives by email, publication on the Supreme
Court
of Appeal website and release to SAFLII. The date and time for
hand-down is deemed to be 12h00 on
11
October
2021.
Summary:
Application
for interim interdict – whether requirements for interim order
were met – whether the appellant should have
brought a separate
prior application to institute the application – leave had been
sought – no requirement for separate
prior application for
leave – requirements for intervention by additional appellants
were met - requirements for interim
interdict met – appeal
succeeds.
ORDER
On
appeal from:
Gauteng
Division of the High Court, Johannesburg (Francis J sitting as court
of first instance):
1
The appeal is upheld with costs.
2
The order of the Gauteng Division of the High Court, Johannesburg is
set aside and is
substituted with the following order:
‘
(1)
The first applicant is granted leave to institute the interim relief
application.
(2)
The second applicant is granted leave to intervene and is joined in
the
main application.
(3)
The third, fourth and fifth applicants are granted leave to intervene
and are joined in the interim application.
(4)
Pending the finalisation of the main application instituted on 9
December
2019,
4.1 An interim
interdict is granted against curators of the first respondent
(second, third and fourth respondents) and the fifth
respondent the
administrator from:
4.1.1 refusing to
accept further contributions from or on behalf of the second
applicant and/or the members of the first respondent.
4.1.2 refunding
any contributions from or on behalf of the second applicant and/or
members of the first respondent.
(5)
The respondents are jointly and severally ordered to pay the costs,
including
costs of employment of two counsel.’
JUDGMENT
Ledwaba AJA
(Dambuza, Makgoka and Mbatha JJA and Unterhalter AJA concurring)
Introduction
[1]
This is an appeal against an order granted by the Gauteng Division of
the High Court, Johannesburg (the
high court), per Francis J, on 14
May 2020, in terms of which two urgent interlocutory applications
were dismissed. In the first
application, the first appellant, Mr
Simon Nash (Mr Nash) sought an interdict against the second to fourth
respondents being the
curators of the first respondent, the CADAC
Pension Fund (in curatorship), together with the fifth respondent,
NMG Administrators
(Pty) Ltd (the Fund administrator). The interdict
was sought as provisional relief, pending the determination of the
main application
brought by Mr Nash a few months earlier, on 19
December 2019, against the same respondents and the Fund. In the same
urgent application
CADAC (Pty) Ltd (CADAC) sought leave to intervene
in the main application. In the second application the third to
fifth appellants,
Ms Antoinette Cronje, Ms Iris Schoeman, and Ms
Samantha Mays (the intervenors) sought to intervene in the
interlocutory application.
[2]
The high court dismissed both applications – the interdict
application was dismissed on the basis
that Mr Nash had failed to
obtain the leave of the court to institute the application as
required in terms of two orders of the
same court (per Claassen and
Matojane JJ), and the intervention applications on the basis of the
dismissal of the interdict application.
This appeal, against the
order of the high court, is brought with its leave.
Background
[3]
The court order of 14 May 2020 had been preceded by a long history of
civil and criminal litigation
between Mr Nash and the curators of the
Fund (Mr Anton Mostert, Mr Johan Esterhuizen and Ms Karen Keevy). The
issues raised in
those court proceedings concerned surplus funds that
were withdrawn from eight pension funds, of which the CADAC Pension
Fund was
one. The withdrawals were effected through a scheme termed
the ‘Ghavalas scheme’ and were unlawfully appropriated to
certain persons and entities, including Mr Nash and his erstwhile
business associate, Mr Ghavalas. The scheme entailed that the
funds
were divested of most of their most active members who were
transferred to another pension fund, leaving the first fund with
a
large surplus that would then be accessed by the principal employer
and other parties.
[4]
As a result, the pension funds were either placed under curatorship
or were wound up. Mr Mostert was
appointed a co-curator and/or
liquidator of all of the funds. His extensive involvement in the
liquidation and curatorship of the
pension funds resulted in an
acrimonious relationship between him and Mr Nash, culminating in
numerous court battles between them.
[1]
[5]
Relevant to this appeal is that on 21 December 2010 the CADAC Pension
Fund was placed under provisional
curatorship in terms of an order of
the high court (Claassen J). At the time Mr Nash was a member of the
Fund, having been a member
since 1995. He was the director and
chairman of CADAC, the principal employer in relation to the Fund,
with a casting vote. He
was also the chairman and a trustee of the
Fund. His wife, Mrs Elena Formo-Nash, was a director of CADAC and a
trustee of the Fund.
[6]
The relationship between Mr Mostert and Mr Nash was adversarial. In
one instance, Mr Nash instituted
court proceedings to set aside Mr
Mostert’s appointments as curator and liquidator and challenged
his entitlement to fees
in relation to the discharge of his duties.
[7]
In another instance, Mr Mostert alleged that Mr Nash, through the
Ghavalas scheme, had unlawfully transferred
a surplus of R36 million
from the Sable Pension Fund to ‘his’ company, Midmacor
Industries Limited. He also alleged
that Mr Nash had misappropriated
R11 million from the CADAC Pension Fund with the intention of using
it to finance his defence
in a criminal trial. Mr Nash responded by
accusing Mr Mostert of involvement in corrupt activities and exerting
undue influence
on the executive members of the Financial Services
Board (FSB). These allegations resulted in Mr Mostert obtaining an
interdict
against Mr Nash in the high court on 14 August 2018,
barring him from ‘disseminating defamatory allegations’
about
Mr Mostert.
[8]
After Mr Nash had turned 70, in November 2018, he gave notice to NMG
of the withdrawal of his pension
benefit of R36 525 806.31
from the Fund. The effective date of his withdrawal was stated as 31
May 2019. On 22 October
2019 he was advised that the fund’s
curators had instructed NMG to flag his benefit in terms of s 37D of
the Pension Funds
Act 24 of 1956 (the Act).
[2]
As a result, NMG did not process the requested withdrawal. It is in
this context that on 6 December 2019 Mr Nash launched the main
application seeking the declaratory order that the instruction to
flag his pension benefits be declared unlawful, that he was entitled
to withdraw the benefits, and that the respondents be directed to pay
them to him.
[9]
Whilst that application was pending, during April 2020 the curators
notified Mr Nash (and other members)
that from that time the Fund
would be treated as a ‘closed fund’ and that no further
contributions would be accepted
from them. Instead, all of their past
contributions would be refunded to them. This led to the urgent
interlocutory application
for an interdict which was dismissed by the
high court.
[10] In
his answering affidavit in the interlocutory application, Mr Mostert
contended that the application was an abuse
of court process and part
of the ‘lawfare’ that had been conducted by Mr Nash
against him since the commencement of
the curatorship in December
2010. He maintained that Mr Nash had manipulated the Fund to his
benefit by causing unsuspecting employees
to deposit moneys into the
Fund which had closed down and become paid up in March 2003. He
highlighted that the transfer of the
members of the Fund to the
Optimum Pension Fund was approved by the Registrar of Pension Funds
on 25 April 2005. However, in September
2004, Mr Nash attempted,
impermissibly, to retrospectively (with effect from February 2003)
transfer the employees and new members,
including himself, back to
the paid-up Fund, at a time when its rules had not been amended as
required in terms of s 12 of the
Act.
[11] Mr
Mostert contended further that, to Mr Nash’s knowledge, the
Fund’s evaluator had advised the curators
that no benefit
statements should be issued in respect of membership of the Fund
until the question of the administration of the
Fund has been
resolved, including the fact that the Fund had become a paid-up fund
from 01 March 2003. He contended that, in any
event, Mr Nash had
failed to obtain the prior approval of the court to launch
proceedings against him, as required by the court
orders granted by
Claassen and Matojane JJ.
[12] As
stated, the high court upheld Mr Mostert’s contentions and
dismissed the application for the interdict
on the basis that Mr Nash
had failed first to seek the leave of the court, before instituting
the proceedings, having been declared
to be a vexatious litigant in
terms of the order of 14 August 2018 (Matojane J). On appeal, Mr Nash
and the CADAC contended that
none of the two court orders ‘were
an impediment’ to their ‘right of access to court’.
It was also submitted
on their behalf that a proper case was made out
in the urgent application and they were entitled to the interdictory
relief that
they sought.
The issues
[13] The
issues that arise for determination in this appeal are: first,
whether Mr Nash and CADAC required the leave
of the court, when they
launched the urgent application in April 2020. A related issue is
whether Mr Nash and the other appellants
should have brought a
separate application for leave prior to launching the interdict
application. If they did not have to do so,
then a determination must
be made as to whether a proper case was made out for the interim
interdict that was sought. Furthermore,
if Mr Nash did not
require prior leave of the court, then the application for
intervention must be determined, and lastly the question
whether a
proper was made out for an interdict will be considered. I turn first
to the issue of leave.
Leave to
institute proceedings
[14] In
the relevant part the order of 21 December 2010 (Claassen J) provided
that:
‘
All
actions, proceedings, the execution of writs, summonses and other
processes against the Fund, [shall] be stayed and be not instituted
(
sic)
or
proceeded with without the leave of the Court.’
In
the relevant part the order of 14 August 2018
(Matojane
J) provided that:
‘
3.
The first and fourth respondents are ordered to first obtain the
leave of the Court as a prerequisite to instituting any further
proceedings against the applicant.’
In view of the
conclusion we reach in respect of the issue whether Mr Nash required
the leave of the court to institute the interdict
proceedings, it is
not necessary to interpret the court orders. This is all the more so
because the respondents’ submissions
on this issue migrated
somewhat, from the appellants not having sought leave as required by
the orders, to their having failed
to seek leave separately, prior to
launching the application for an interdict.
[15] It
is necessary to highlight that the order of 14 August 2018 that
requires Mr Nash first to obtain the leave of
court before
instituting proceedings against Mr Mostert and his co-respondents,
was intended to curb the vexatious conduct of Mr
Nash. Matojane J
found Mr Nash to have been:
‘
dishonest
and motivated by ulterior motive to disrupt the progression of the
administration of the Sable Fund, the Power Pack Fund
and the Cadac
Fund by bringing a series of applications aimed at delaying and
derailing civil and criminal [litigation] against
him and Midmacor.’
The intention
therefore was that further proceedings brought by Mr Nash should be
scrutinised by a court. Such assessment could
only be made taking
into account the basis for such further proceedings.
[16]
Insofar as Mr Nash was required to seek leave to institute
proceedings against Mr Mostert, he did seek leave. So did
CADAC.
[3]
In para 2 of the application for interim interdict an order was
sought:
‘
2.
Granting the First Applicant [Mr Nash], leave to institute this
Application and to seek the relief set out hereafter, as contemplated
in terms of paragraph 4 of the order of the above court under case
number: 2010/50596, granted on 21 December 2010 [the order of
provisional curatorship] and in paragraph 3 of the order of the above
court under case number 64664/2017 dated 14 August 2018.
3.
Granting the Second Applicant [Cadac], insofar as it is necessary,
leave to intervene in the Application instituted by the First
Applicant under the above case number in terms of the notice of
motion dated 9 December 2019 [the main application].
’
[17] The
contention by Mr Mostert that a separate prior application for leave
was required is mere formalism. The facts
on which the prior
application would have been brought would have been exactly the same
as those advanced in support of the application
for an interdict. The
court was entitled to consider the application for leave together
with the application for the interim interdict,
particularly in view
of the cost implications that would result from the duplication
entailed in the separate application for leave
contended for by Mr
Mostert. The order simply required that leave first be obtained.
There is no reason why the application to
obtain such leave should
not have been contained in the same application that sought
substantive relief. The high court was in
a position first to
determine whether leave should be granted to bring the proceedings,
and if such leave was granted, then to
proceed to hear the merits of
the substantive application. Such an approach is practical and
entirely consistent with the order
made by Matojane J. The
application for an interdict which he sought to bring was neither
frivolous nor vexatious. Leave
should have been granted.
The application
for intervention
[18] The
application(s) were dismissed by the high court based on the
dismissal of the interim interdict application.
The high court
reasoned that the intervenors had only sought to support the
unsustainable application brought by Mr Nash and that
they brought
nothing new to the proceedings. There was no finding, however, in the
judgment of the high court that the intervenors
had not demonstrated
a legal interest as envisaged in Uniform Court Rule 12, which could
be prejudicially affected in the subject
matter of the proceedings.
The rejected pension contributions had been made by CADAC as the
employer. The members’
legal interest and the prejudice that
they stood to suffer,
individually
, is apparent from the
discussion on the interim interdict. The submission that they
were Mr Nash’s
alter ego
is unsustainable. The parties
should have been allowed to intervene and have their interests
considered and, ultimately, protected.
Entitlement to an
interim interdict
[19]
Essentially, in the main application, Mr Nash, having been informed
that his pension benefits had been flagged,
sought a declarator that
he was entitled to his full pension benefits and an order that such
benefits be paid to him. Until
March 2020 the appellants’
pension contributions were accepted by the Fund. Indeed, the issues
relating to the management
or administration of the Fund during the
period commencing March 2003 were to be decided in the main
application. The decision
by the curators to determine those issues
by excluding the appellants from the Fund in March 2020 was taken
abruptly, without consulting
the appellants, at the start of the
national lockdown declared in terms of the
Disaster Management Act 57
of 2002
. The decision to exclude them posed significant irreparable
prejudice to them as they would be left without pension and related
benefits. The evidence was also that they would be liable for income
tax on the refunded contribution.
[20] The
appellants had therefore established a
prima facie
right which
was under threat as a result of the conduct of the curators. Their
request to the curators to maintain the status quo,
which had
prevailed for decades, pending the outcome of the main application
was rejected. None of these facts were in dispute.
The appellants had
no option but to approach the court for relief. The balance of
convenience favoured them. The requirements for
a provisional
interdict had been met.
[21] It
was submitted on behalf of the respondents that the interim interdict
would entitle Mr Nash to act as if he
was a member of the Fund when
he was, in fact, not. It is not clear that the interim interdict has
any such entailment. It simply
preserves the status quo until the
issue of Mr Nash’s membership can be determined in the main
application. Should Mr Nash
threaten to take any action that would
subvert that determination, the respondents may approach the courts
to preserve the status
quo.
[22] The
appellants sought an order that the respondents be directed to
‘continue administering [the Fund] in
terms of the Pension
Funds Act, 1956 (as amended) and the Rules of the First Respondent’.
This prayer is framed in impermissibly
wide terms and cannot be
granted for that reason. The appellants will be sufficiently
protected in the interim if their contributions
must continue to be
accepted and not refunded. How those contributions should have been
dealt with is a matter for the main application.
[23]
Accordingly the appeal must succeed. The following order is granted:
1
The appeal is upheld with costs.
2
The order of the Gauteng Division of the High Court, Johannesburg is
set aside and is
substituted with the following order:
‘
(1)
The first applicant is granted leave to institute the interim relief
application.
(2)
The second applicant is granted leave to intervene and is joined
in
the main application.
(3)
The third, fourth and fifth applicants are granted leave to intervene
and are joined in the interim application.
(4)
Pending the finalisation of the main application instituted on 9
December
2019,
4.1 An interim
interdict is granted against curators of the first respondent
(second, third and fourth respondents) and the fifth
respondent the
administrator from:
4.1.1 refusing to
accept further contributions from or on behalf of the second
applicant and/or the members of the first respondent.
4.1.2 refunding
any contributions from or on behalf of the second applicant and/or
members of the first respondent.
(5)
The respondents are jointly and severally ordered to pay the costs,
including
costs of employment of two counsel.’
LEDWABA AJA
ACTING JUDGE OF
APPEAL
Appearances:
For
first and second
a
ppellants:
Greg Wickins SC
Instructed
by:
KWA Attorneys, Johannesburg
Hill,
McHardy & Herbst Attorneys,
Bloemfontein
For
third to fifth
a
ppellants:
Sarah Pudifin-Jones
Instructed
by:
Ian Levitt Attorneys, Sandton
Lovius Block Inc,
Bloemfontein
For
first to fourth respondents: J G Wasserman SC with
S
Quinn
Instructed
by:
Assheton-Smith
Inc, Cape Town
Michael Du
Plessis Attorneys,
Bloemfontein
[1]
The Financial Services Board and
the Registrar of Pension Funds also had to enter the fray.
See
for example,
Executive
Officer of the Financial Services Board (the FSB) v Cadac Pension
Fund; In Re: Executive Officer of the Financial Services
Board v
Cadac Pension Fund and Others
[2013]
ZAGPJHC 401;
Mostert
and Others v Nash and Another
[2018]
ZASCA 62
;
[2018] 3 All SA 1
(SCA);
2018 (5) SA 409
(SCA); and an
unreported judgment in
Simon
Nash and Another v The Executive Officer of the Financial Services
Board
Case
No 31650/12 (Gauteng Division of the High Court, Johannesburg).
[2]
In terms of s
37D an amount due by a member of a pension fund to his or her
employer in certain specified circumstances may be
deducted from the
member’s benefit on withdrawal of the member’s benefits
from the fund.
[3]
CADAC could
only have been required to seek leave as per order of Claassen J
.