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[2016] ZAGPPHC 532
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Metropolitan Life Ltd and Another v Nura Energy (PTY)Ltd and Another (76657/2014) [2016] ZAGPPHC 532 (7 March 2016)
IN THE GAUTENG
DIVISION OF HIGH COURT, PRETORIA
(REPUBLIC OF
SOUTH AFRICA)
OF INTEREST
TO OTHER JUDGES REVISED
In
the matter
between:
METROPOLITAN
LIFE LIMITED
FIRST
RESPONDENT
MMI
GROUP
LIMITED
SECOND
RESPONDENT
AND
NURA ENERGY (PTY)
LTD
FIRSTREPONDENT
OFFICE
OF
THE
PENSION FUNDS
ADJUDICATOR
M E LUKHAIMANE SECOND RESPONDENT
JUDGMENT
MOLEFE J
[1] This is a review
application to set aside the determination of the Third Respondent
working under the auspices of the Second
Respondent.
The applicants seek an
order in the following terms:
a)
An
appropriate order in terms of section 30 of the Pension Fund Act 24
of 1956 ("the
Act)
b)
Condonation for the late filing of an application in terms of
section 30 P of
Act 24 of 1956.
In the alternative
to prayer (b) above, and only in the event that the court
cannot grant
the
requested
condonation, then
c)
A
declaratory that the period
as
defined in section 30 P of Act
24 of
1956 means "six weeks after the date that
the determination has come to the knowledge of the aggrieved
party".
d)
An
order that the second respondent, alternatively third respondent,
file
a
certified copy of
all documents
upon which
the Third
Respondent's
determination were made at court under case number 76657114,
as
soon as possible, but at least 20 days prior to the hearing of
this application;
e)
Alternative
relief,·
f)
Costs
of suit only in the event of same being defended.
[2] The first
respondent opposes the relief applied for. The second and third
respondents filed an affidavit in which it was stated
as follows by
the third respondent on behalf of the second and third respondent:
·
I
have read the applicants'
founding
papers. I respectfully submit
that
I do not
have
the
intention
to
oppose
this
application. The reasons
for
my
decision
are clearly stated in the determination as annexed to the applicant's
founding
paper
[1]
Parties to the
Proceedings
[3] The first
applicant, Metropolitan Life Limited is a public company duly
registered as such and a long term insurer in terms
of the Long Term
Insurance Act ("Act 52 of 1998"). The first applicant is
the party against whom determination by the
third respondent is made.
[4] The second
applicant, MMI Group Limited is a public company and is an authorized
Financial Service Provider in terms of the
Financial Advisory and
Intermediary Services Act 37 of 2002
. The second applicant is also an
approved pension funds administrator in terms of the
Pension Funds
Act, No 24 of 1956
. The first applicant sold its entire business to
the second applicant with effect from 1 July 2012. All of the first
applicant's
rights and liabilities as administrator and underwriter
of the Fund were transferred to the second applicant as part of the
business.
[5] The Fund is
Metropolitan Life Retirement Annuity Fund, Financial Services Board
registration Number 17781, a pension fund organization
registered as
such by the Registrar of Pension Funds and approved as a Retirement
Annuity Fund. The first applicant used to be
the administrator and
under writer of the fund.
[6] The second
respondent is the office of the Pension Funds Adjudicator that was
established in terms of section 30 (8) of the
Act and is the
institution that has made a determination in terms of section 30 (M)
of the Act. The third respondent is the duly
appointed Pension Fund
Adjudicator, and has made the determination in terms of section 30
(M) of the Act as between first respondent
and first applicant.
Factual Background
[7) During or about
October 2013, the first respondent lodged a complaint against the
first applicant with the second respondent.
The formal complaint form
accompanied by a document entitled
"Referral"
and
drafted by the first respondent's legal representative, was referred
to the first applicant by the second respondent on on 8
November 2013
with a request for a response thereto by 10 December 2013.
[8] In the first
applicant's response dated 6 December 2013, the first applicant
requires some information to enable it to reply
properly to the
complaint and referral. The first respondent alleges that it provided
the requested information to the second respondent.
The applicants
contend however that this additional information was not forwarded to
it by the second respondent. The first respondent
did not advance any
facts to contradict the applicants' contention.
Condonation
[9] The first
respondent issued a determination on 20 March 2014 which according to
the applicants only came to the knowledge of
the applicants during or
about 27 August 2014.
[10) In terms of the
provisions of section 30 P of the Act, the applicants may apply to a
division of the High Court that has jurisdiction
for the necessary
relief upon notice to the other parties within six weeks from the
date of the third respondent's determination.
The applicants apply
for condonation for the late filing of this application due to the
fact that the third respondent's determination
did not come to the
knowledge of the applicants timeously, for them to have filed this
application within the prescribed six weeks
period.
First Respondent's
Complaint
[11] It is common
cause between the parties that the first respondent's complaint
submitted to the second and third respondents
can be summarized as
follows:
11.1 During 2005, the
first applicant and the first respondent entered into an agreement in
terms of which the applicant would deduct
the total value of premiums
payable by employees of the first respondent from the first
respondent's bank account for the following
benefits:
11.1. Funeral and life
cover;
11.1.2 Retirement
annuities.
11.2 Pursuant to the
above agreement, 1he first respondent would contribute 50% of all
premiums on behalf of its employees and the
employees would be liable
for the remaining 50%.
11.3 During the period
July 2009 to 15 June 2010, the first respondent notified the first
applicant at different instances that
certain employees have
terminated their services with the first respondent and that the
first applicant was therefore to discontinue
deducting pension and
funeral premiums from its account in respect of such employees.
11.4 This culminated
in the first respondent making demand upon the first applicant for
the repayment of an amount of R326 617,
11 in a letter dated 14 June
2010, which was allegedly the refund for the amounts that were
unlawfully debited from the first respondent's
banking account for
resigned employees.
11.5 The complaint
remained unresolved and the first respondent approached the second
respondent in terms of section 30 of the Act.
[12] Applicant's
counsel
[2]
submitted that the
third respondent held correctly in the Sec 30
determination
that:
"-
-
-
The
complaint
relates
to
three
separate
causes
of
action
that
occurred
on 3
separate occasions.
The first
cause of action relates to the
deductions
made by the respondent (applicants herein) prior to 30 July 2009.
The second
cause
of
action
relates
to
deductions
made
between
30
July
2009
and March
2010,
which
continued
despite
a
request
for
such
deductions
to
cease. The
third
and
final
cause
of
action
relates
to
deductions
made
between
March 2010
and
June 2010
[3]
·
While
this
Tribunal has jurisdiction to
investigate
the
complaint to
the extent that it
relates to the deduction of contribution
towards the
Fund
as
they relate
to
a
pension fund
organization, it does not have jurisdiction to investigate
t
he
complaint
to
the
extent
that it
relates to deductions made
in
respect of ordinary insurance policies
such
as
life
and
funeral
covers
that
are
underwritten by the respondents (applicants herein). These are pure
insurance policies over which the Tribunal does not have
jurisdiction.
Therefore, the
complainant may approach the Ombudsman for
Long-term
Insurance
for
relief
in
this
regard"
[4]
·
However,
as already found above, this Tribunal does not have jurisdiction to
determine
the
complaint to the extent
that
it relates
to
life
and
funeral cover premiums. The
funeral
and life cover premiums appear to have been included in the sum of
R233
139,
25 that was claimed by the complainant. In
light
of
this
Tribunal's
lack
of jurisdiction in that
regard,
it follows
that
this
Tribunal cannot
accept
the
amount
of
R233
139, 25 as
the
correct sum that is
payable
to the complainant.
.
.·
. .
. .
Therefore,
the
quantum of the loss must be recalculated by
the
parties
to
include
only
such deductions
as
were
made
in
respect
of
contributions to the fund, after
which
the respondent (the applicants) must refund the correct quantum to
the complainant
together
with
interest.
.
.
..
[5]
[13] Section 30 (P)
(2) of the Act provides as follows:
"30PAccess
to court
(1) - - - -
(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".
[14] Counsel for the
applicants submitted that the High Court is not seized with a review
of the adjudicator's decision but with
a wide appeal; that The
Promotion of Administration of Justice Act ("PAJA") has no
application and that the common law
does not provide a remedy based
upon procedural fairness. Section 30P does not exclude or limit the
High Court's inherent review
jurisdiction. In this regard, counsel
relied on the authoritative judgment of
Meyer
v
lscor
Pension
Fund
2003
(2)
SA
715
(SCA),
wherein the Supreme Court of
Appeal held:
"From the
wording of section 30(P) (2) it is clear that the appeal to the
High Court 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 grounds
upon which the adjudicator's
determination was
based. The Court can consider the matter afresh
and make any
order it deems fit".
It was further held in
M
eyer v
l
scor supra at
725
I-
726 C
that:
"At the same
time ‘however, the High Court's
jurisdiction
is limited
by section 30 P (2) to
a
consideration
of
"the merits
of
the
complaint
in
question". The disputes
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''.
[15]
In my opinion, section 30 P of the Act illustrates that the High
Court will consider the merits of the complaint and may make
any
order it deems fit. Accordingly, an aggrieved party is entitled to
have the legal dispute that was dealt with by the adjudicator
reconsidered
de novo
by the court.
[16] The
applicants relied on the following seven grounds for the relief
sought:
16.1
Complaint not a 'compliant' as defined by the Act.
16.1.1
The applicants contend that the complaint submitted by the
first respondent to the second and third respondents does not qualify
as a
'complaint'
as defined in the Act. A
'complaint'
in
the Act is defined as follows:
'"Complaint'
means a
complaint of
a
complainant
relating to
the
administration of a fund,
the investment of its fund or the interpretation and application of
its rules and alleging
-
a)
That
a decision of the fund or any person purportedly taken in
terms of the rules was in excess of the powers of that fund or
person,
or an
improper exercise of its powers;
b)
that
the complainant has sustained or may sustain prejudice
in
consequence of the
maladministration of the fund or any person, whether by act
or
omission;
c)
that
a dispute
of fact
or law
has
arisen
in relation
to a fund between
the fund or any person and the complainant; or
d)
that
an employer who participates in a fund has not fulfilled its duties
in terms of the rules of the
fund;
but shall not
include a complaint which does not relate to a
specific
complaint".
16.1.2
First
respondent opposes this ground upon
the basis
that it was not raised in
the
applicants' reply before the adjudicator and that it may not
therefore be raised before this Court. Counsel for the
first
respondent
[6]
argues that this
ground should have been raised as a point
in
limine
at
the
original
determination.
16.1.3
The applicants deny that premiums were incorrectly paid over
to the applicants and contend that the first respondent failed to
notify
the first applicant timeously of the termination of the
services of its employees.
16.1.4
Although the applicants did not raise this ground at the third
respondent's determination, this dispute cannot, in my view be
construed
as maladministration of the fund as envisaged in the Act
and is not a complaint as defined in the Act. This ground of the
review
therefore succeeds.
16.
.2
Audi
alteram
partem
rule
16.2.1 The applicant's
counsel submitted that the applicants, on numerous occasions, made it
clear that they did not have sufficient
information, particulars and
specifically schedules of disputed premiums to formulate a complete
reply to the complaint. Applicants
reply to the complaint read
inter
alia
as follows:
'The items not
provided
are
critical in considering the complaint.
We
again request the complainant to provide us with
these
in
order for MM/ Group,
as the underwriter and
administrator of the Metropolitan Retirement Annuity
Fund
("the fund'J to provide
a
comprehensive response to every
allegation
and submission by
the
complainant;
.
.
.
.
.
We
would
like
to
resolve
the
issue
if
possible,
but
are
not
exactly
sure
about
the
particulars
of
the
complaint
.
.
.
"
[7]
16.2.2 Although the
first respondent contends that the requested information was provided
to the second and third respondents, the
applicants persist that same
was not provided to them. It is the applicants' contention that the
third respondent made a determination
of the complaint without
affording the applicants the opportunity of considering all of the
information and formulating a response
thereto.
16.2.3 The first
respondent again opposes this ground on the basis that it was not
raised at the original determination.
16.2.4
Section 30P does not limit the High Court's inherent review
jurisdiction and this court is not confined to the grounds upon which
the adjudicator's determination was based. It is not disputed that
the requested information was not provided to the applicants.
In this
regard, I am of the opinion that this ground should succeed.
16.3
Determination was made against the incorrect applicant
16.3.1
A
complaint must, in
terms of
the Act, be lodged against
the Fund.
The first
and second applicants are not pension fund organizations, but merely
act as the administrator or underwriter of the fund.
The first
applicant used to be the administrator and underwriter of the
Metropolitan Life Retirement Annuity Fund ("the fund")
and
all of the first applicant's rights and obligations as administrator
and underwriter of the fund were transferred to the
second
applicant
[8]
.
16.3.2
Again, the first respondent does not dispute the aforesaid,
but merely objects that this ground was not raised in the response
submitted
to the second and third respondents.
16.3.3
It is clear from the record that the fund was not a party to
the proceedings before the second and third respondents. I am
satisfied
that this ground should succeed as the complaint and
referral should have been lodged against the fund and the
determination made
by the third respondent not against the applicants
but against the fund. The fund itself was not before the adjudicator.
16.4
Prescription
16.4.1
Section 30 I of the Act provides as follows:
"(1) The
Adjudicator shall not investigate
a
complaint if the act or
omission
to which it relates occurred more than three
years before the date on which
the complaint is
received by him or her in writing.
(2)The provisions
of the Prescription Act, 1969 (Act No. 68 of 1969),
relating
to
a
debt apply in respect of the calculation of the three
year period referred to in subsection
(1)".
16.4.2
It is common cause between all the parties that the first
respondent had knowledge of the alleged amounts owing to it by 15
June
2010. It was correctly
a
rgued on behalf of the applicants
that the legislature limited the applicability of the
Prescription
Act by
not merely providing that the
Prescription Act will
be
applicable, but by limiting it to determine a debt and calculating
the three year period.
16.4.3
In my view, the third respondent correctly ruled that on face
value, the first respondent's complaint has become prescribed. The
complaint should not have been considered having regard to the
provisions of
section 30
I (1) of the Act. The complaint clearly
arose more than three years prior to the submission of the complaint
to the second respondent.
16.4.4
I do
not agree with the submissions made by the respondent's
counsel
that the third respondent correctly ruled that prescription had been
interrupted
by admissions purportedly made on behalf of the applicants by one Mr
Mario
Guerreiro, applicants' contractor.
The third
respondent ruled that
the
applicants admitted liability through certain alleged payments
purportedly made to the first respondent by Mr Guerreiro. This
ruling
was made despite the fact that the first respondent concedes on its
own version that the cheques paid by Mr Guerreiro could
not be banked
since the cheques were not
issued in
the first respondents name, but in the name of an entity known as
"NUON
RAPS UTILITY (PTY) LTD"
[9]
•
In my view, the determination by the third respondent that payment in
a different entity, by applicants'
independent
contractor, constitutes
a
clear
and
unambiguous
admission
of
liability
in
terms of
the
Prescription
Act
is
an
incorrect
factual
conclusion
and
wrong
in
law.
16.5
Implementation and effect of
determination
16.5.1 The applicants,
quite correctly in my view submitted that it is impossible to give
effect to the determination of the third
respondent's ruling that
"total amount of contributions must be calculate(!'
as it
is not clear what deductions in respect of which period must be
recalculated.
16.5.2 The first
respondent have not furnished any answer to this pertinent ground
when the ruling is in my view clearly ambiguous
and should be
faulted.
16.6
Limited
jurisdiction
16.6.1 As
above-mentioned, the third respondent has jurisdiction only in
connection with complaints as defined in the Act.
16.6.2 It is submitted on
behalf of the applicants that the third respondent correctly upheld
the applicants' contention that the
second and third respondents do
not have jurisdiction to make any finding in respect of funeral and
life cover. Counsel for the
applicants correctly emphasized thaj
despite the aforesaid ruling, the second and third respondent do not
have jurisdiction to
even consider the complaint as submitted.
16.6.3 I agree that
the second and third respondents had limited jurisdiction
in
casu.
16.7
Hearsay and lack of authority
16.7.1 It is the
applicants' contention that the complaint and referral as
formulated by the first respondent's attorneys
of record
constitute inadmissible hearsay evidence in that the contents
thereof do not fall within the personal knowledge
of the attorney.
16.7.2 Section 30 K
of the Act provides that, no party shall be entitled to legal
representation at proceedings before the
Adjudicator. The third
respondent however ruled that this provision does not divest him
or her of a discretion to allow legal
representation on
application. In this respect, Iam of the view that the adjudicator
has a wide discretion as to how to conduct
an investigation and
the applicant's contention on this ground does not make out a case
for the review of the third respondent's
decision.
[17] Regarding the
question of condonation for the late filing of this application, I
rely on
Melane
v Santam Insurance Company Ltd
1962
(4)
SA 531
(A) at 532 (C-D):
"In deciding
whether sufficient cause has
been
shown, the
basic
principle is that the court has a discretion, to
be
exercised
judicially upon
a
consideration
of
all
the
facts,
and
in
essence
it
is
a
matter
of fairness to both sides. Among the
facts usually relevant
are
the
degree
of
lateness, the explanation therefor, the prospects of success, and the
importance of the
case".
On consideration of all
the facts, I am satisfied that the applicants have shown good cause
for the late filing of this application.
[18] I accordingly
grant the following order:
18.1 The
applicants' failure to have applied in terms of section 30 of the
Pension Fund Act within the prescribed period is condoned;
[18.2]The
determination by the third respondent in respect of the
first
respondent's complaint is set aside;
[18.3]The first
respondent's complaint is dismissed;
[18.4]The
first
respondent
to
pay
the
costs
of
the
adjudication
as
well
as
this application.
D
S
MOLEFE
JUDGE OF THE HIGH
COURT
APPEARANCES:
Counsel
on
behalf
of
1
st
and
2
nd
Applicants':
Adv.
JP
van Den
Berg
Instructed
by:
Marais
Muller
Yekiso
INC.
Counsel
on
behalf
of
1
ST
Respondent:
Mr MMH
Titus
Instructed
by: Macgregor Erasmus Attorneys
Date Heard: 01
December 2015
Date Delivered:07
March 2016
[1]
2
nd
and
3
rd
respondents'
affidavit
pp
160
par
8
[2]
Advocate J P
van den
Berg
[3]
Record,pp 83, par 5.2
[4]
Record,
pp
87,
par
5.14
5
Record, pp 89, par 5.20
[6]
Mr MMH Titus
[7]
Record,
pp
66
and
67
[8]
Record, applicants founding affidavit pp 9, par 10
[9]
Record, pp 60 and fur
t
her