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[2016] ZAGPPHC 225
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Windybrow Centre for the Arts v Sanlam Life Insurance Limited and Others (50395/2015) [2016] ZAGPPHC 225 (24 March 2016)
REPUBLIC
OF SOUTH AFRICA
(GAUTENG
DIVISION PRETORIA)
CASE
NO: 50395/2015
DATE:
24 MARCH 2016
In the matter
between:
WINDYBROW CENTRE
FOR THE
ARTS
..........................................................................
Applicant
And
SANLAM LIFE
INSURANCE
LIMITED
.................................................................
First
Respondent
VUYO
MAPHELA
...................................................................................................
Second
Respondent
ALLIE
ACHMAT
........................................................................................................
Third
Respondent
JUDGMENT
MALI AJ
[1] This is an
application for an interim interdict against the respondents. The
relief sought by the applicant is based upon the
provisions of
section 37D(b)(ii) of the Pension Funds Act, 24 of 1956 (“the
Pension Fund”) which provides an employer
a right to access
pension fund benefits of an employee to recover damages suffered by
the employer by reason of any theft, dishonesty,
fraud or misconduct
by the employee member of the Fund.
[2] The applicant is
a public entity registered under Schedule 3(a) of the Public Finance
Management Act, 1 of 1999 (“PFMA”)
with its business
address at number 161 Corner Nugget and Pietersen Streets, Hillbrow,
2001.
[3] The first
respondent is Sanlam Employee Benefits, a division of the Sanlam
Umbrella Fund (“Fund”), a pension fund
with its principal
place of business at c/o Alkantrant & Sanlam Streets, Lynwood,
Pretoria, 0081.
[4] The second
respondent is a major male person and a former employee of the
applicant.
[5] The third
respondent is a major male person and a former employee of the
applicant, residing at 15 Beryl Drive, Fleurhof, Roodeport.
[6] The first
respondent will abide by the ruling of the court. The second and
third respondents oppose the application.
[7] I first had to
deal with a point in limine raised by the second and third
respondents. The respondents’ complaint is that
the citation of
the applicant and the first respondent is incorrect as it does not
appropriately identify the parties. On 27 July
2015 the applicant
issued notice of amendment to the effect that the word “Theatre”
be deleted after Windybrow and
be replaced with “Centre for the
Arts”; thus, the correct citation of the first respondent is
WINDYBROW CENTRE FOR
THE ARTS. Secondly, the notice sought to amend
the citation of the first respondent from “The Sanlam Umbrella
Fund”
to SANLAM LIFE INSURANCE LTD. The respondents’
affidavits to oppose same were filed out of time. I find it in the
interests
of the administration of justice that the amendments be
effected accordingly.
[8] The only issue
left for determination is whether the applicant is entitled to the
interim interdict.
[9] It is common
cause that both second and third respondents were employed by the
applicant on 7 February 2005 and on 7 January
2008 respectively.
[10] The applicant’s
theatre building fell into disrepair and in 2010 required
renovations. The second and third respondents
were responsible for
the procurement of contractors, payments thereof for work done and
which suppliers and/or contractors were
entitled. It later transpired
that there were issues and or disputes in the handling of procurement
and payments spent on renovations
to the theatre. The applicant
appointed the auditing firm of Ernst and Young (“E&Y”)
to conduct the forensic investigation.
[11] A copy of the
draft report was released in May 2014 and on 27 May 2014, the
applicant dismissed the second and third respondents
due to alleged
misappropriation of over R60 million of the applicant’s funds.
A final report was circulated in June 2014.
On 25 July 2014, on the
basis of the forensic report, the applicant laid a criminal charge
against the respondents. At the date
of hearing of this application,
the matter had not yet been finalised.
[12] The respondents
approached the Commission for Conciliation, Mediation and Arbitration
(“CCMA”). On 1 October 2014,
the CCMA found that the
respondents’ dismissal was unfair and they were awarded
compensation. On or about 12 November 2014,
the applicant served and
filed an application to review and set aside the arbitration award.
[13] On or about 20
November 2014, the respondents caused a writ of execution to be
issued against the applicant. As a result, a
sum of approximately
R161 000.00 was distributed to the second respondent. The applicant
approached the Labour Court on an urgent
basis to stay and set aside
the writ, the Sheriff from further distribution of the applicant’s
monies, and an order for the
payment of the monies irregularly paid
to the second respondent. The applicant was successful in the stay
and setting aside the
writ and interdicting the sheriff from further
distribution of monies. The applicant was not
successful in
obtaining the order for the repayment of the money. The matter has
been taken on appeal to the Labour Appeal Court.
At the date of
hearing of this matter, the appeal was still pending.
[14] On 20 February
2015, the applicant instituted a damages claim in the Labour Court
against the respondents on the basis of the
findings of the E&Y
forensic report. At the date of the hearing of this case, the Labour
Court claim was still pending.
[15] The applicant
seeks relief as follows-
15.1 payment in the
sum of R39 194 012.60 for overpayment and/or irregular payments;
alternatively
15.2 payment in the
sum of R21 101 660.80 for overpayments and/or irregular payments;
alternatively
15.3 payment in the
sum of R19 739 434.55 for overpayments and or irregular payments; and
15.4 payment in the
sum of R7 779 095.41 for fruitless and wasteful expenditure.
[16] It is not
disputed that the second and third respondents have accrued pension
benefits in the first respondent in the amounts
of R614 472.91 and R1
256 079.87 respectively. The applicant now seeks an interdict that
the first respondent preserves the amounts
in question.
LAW
[17] In Webster v
Mitchell 1948 [1] SA 1186 (W), the court stated:
“In the grant
of a temporary interdict, apart from prejudice involved, the first
question for the Court in my view is whether,
if interim protection
is given, the applicant could ever obtain the rights he seeks to
protect Prima facie that has to be shown.
The use of the phrase
’prima facie established though open to some doubt’
indicates, I think, that more is required
than merely look at the
allegations of the applicant, but something short of a weighing up of
the probabilities of conflicting
versions is required. The proper
manner of approach I consider is to take facts as set out by the
applicant, together with any
facts set out by the respondent, which
the applicant cannot dispute, and to consider whether having regard
to the inherent probabilities,
the applicant could on those facts
obtain final relief at a trial. The facts set up in contradiction by
respondent should then
be considered. If serious doubt is thrown on
the case of applicant he could not succeed in obtaining temporary
relief, for his
right, prima facie establishedmay only be open to
*some doubt". But if there is mere contradiction, or
unconvincing explanation,
the matter should be left for trial and the
right protected in the meanwhilet subject of course to the respective
prejudice in
the grant or refusal of interim relief Although the
grant of a temporary interdict interferes with a right which is
apparently
possessed by the respondent is protected because, although
the applicant sets up a case which prima facie establishes that the
respondent has not the right apparently exercised by him, the test
whether or not the temporary relief is to be granted is the harm
which will be done. And in a proper case it might well be that no
relief would be granted to the applicant except on conditions
which
would compensate the respondent for interference with his right,
should the applicant fail to show at the trial that he was
entitled
to interfere.*
[18] In Reckitt &
Colman SA (Pty) Ltd v SC Johnson & Son (SA) (Pty) Ltd
[1995] 1
All SA 414
(T) 417-418;
1995 (1) SA 725
(T) 729 I- 730 Q, it was
stated:
'The applicant seeks
interim relief. The applicant must therefore establish:
(1) a clear right
or, if not clear that it has a prima facie right;
(2) that there is a
well-grounded apprehension of irreparable harm if the interim relief
is not granted and the ultimate relief
(by way of the summons issued)
is eventually granted;
(3) that the balance
of convenience favours the grant of an interim interdict; and
(4) that the
applicant has no other satisfactory remedy (L F Boshoff Investments
(Pty) Ltd v Cape Town Municipality; Cape Town Municipality
v L F
Boshoff Investments (Pty) Ltd
1969 (2) SA 256
(C) at 267 B-E):
[19] In Beecham
Group Ltd v B-M Group (Pty) Ltd
1977 (1) SA 50
(T) at 55 B-E), the
court said, with regard to the various factors which must be
considered:
“/ consider
that both the question of the applicants prospects of success in the
action and the question whether he would
be adequately compensated by
an award of damages at the trial are factors which should be taken
into account as part of a general
discretion to be exercised by the
Court in considering whether to grant or refuse a temporary interdict
Those two elements should
not be considered separately or in
isolation, but as part of the discretionary function of the Court
which includes a consideration
of the balance of convenience and the
respective prejudice which would be suffered by each party as a
result of the grant or refusal
of a temporary interdict."
[20] "Where the
applicant's right is dear and the other requisites of an interdict
are present no difficulty presents itself
about granting an interim
interdict Where, however, the applicant's prospects of success are
nil, obviously the Court will refuse
an interdict” (Olympic
Passenger Services (Pty) Ltd v Ramlagan
1957 (2) SA 382
(D) at 383
C-D).
[21] Section 37D of
the Pension Fund provides;
“A registered
fund may... (b) deduct any amount due by a member to his employer on
the date of his retirement or on which
he ceases to be a member of
the fund, in respect of... (it) compensation (including any legal
costs recoverable from the member
in a matter contemplated in
subparagraph (bb) in respect of any damages caused to the employer by
reason of any theft, dishonesty;
fraud or misconduct by the member,
and in respect of which (aa) the member has in writing admitted
liability to the employer; or
(bb) judgment has been obtained against
the member in any court, including a magistrate’s court, from
any benefit payable
in respect of the member or a beneficiary in
terms of the rules of the fund, and pay such amount to the employer
concerned;.,.".
[22] The applicant
in casu believes it has a prima facie right to have the funds of the
second and third respondents preserved on
the basis of the auditor’s
report. The auditor’s report led to the second and third
respondents' dismissal. The applicants
contention is fatal because it
is not in dispute that the respondents’ dismissal was found to
be unfair. As a result, the
applicant had to compensate the
respondents for the unfair dismissal. The appeal by the applicant has
not yet been decided.
[23] it was argued
on behalf of the applicant that there are no prospects of recovering
monies from the respondents in the event
that the applicant is
successful. The respondents do not have sufficient realisable assets
to satisfy the claim of damages. It
was further stated that the
applicant will be caused irreparable harm as the prejudice is
absolute; therefore, the balance of convenience
weighs in their
favour.
[24] The applicant’s
basis for the above argument is that the respondents by their own
admission have stated that they are
facing financial challenges. They
need the same money the applicant wants preserved to survive. I
believe that something more is
required. The applicant should have
proved that it has a right to the money in question because of theft
or dishonesty proven against
the second and third respondents.
[25] In
determination of this matter, it is important that the applicant
proves a prima facie right to the funds, amongst other
things. The
applicant’s alleged right should satisfy the requirements of
the legislation providing for the withholding of
funds. On the facts
before me, the applicants have not proven any fraud, dishonesty or
theft and any of the elements required in
section 37D.
[26] The applicant’s
case on the basis of a prima facie right; as long as it is intended
to be established on the actions
of the first respondent, has no
merit. The first respondent had to be satisfied that there is fraud,
dishonesty and/or theft in
order to withhold funds. I reiterate same
has not been proven.
I find that the applicant has not proven a prima facie right.
ORDER
[27] The application
is dismissed with costs.
MALI AJ
ACTING JUDGE OF
THE HIGH COURT GAUTENG DIVISION
Counsel for the
Applicant: Adv Greg Fourie
Instructed by:
Cliffe Dekker Hofmeyr Inc
Counsel for the
Second and
Third
Respondents: Adv P A Wilkins
Instructed by: F
Rudolph Attorneys
Date of Hearing:
30 November 2015
Date of Judgment:
24 March 2016