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[2016] ZAGPPHC 626
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TWP Projects (Pty) Ltd v Pension Funds Adjudicator and Others (67153/2015) [2016] ZAGPPHC 626 (26 April 2016)
IN THE
HIGH COURT OF SOUTH AFRICA
(GAUTENG
DIVISION, PRETORIA)
Case
number: 67153/2015
Date:
26 April 2016
(1)
REPORTABLE: NO
(2)
OF INTEREST TO OTHER JUDGES: NO
In
the matter between:
TWP
PROJECTS (PTY) LTD
APPLICANT
And
PENSION
FUNDS
ADJUDICATOR 1
ST
RESPONDENT
VAN
COLLER, CECILIA
HENDRINA 2
ND
RESPONDENT
CORPORATE
SELECTION RETIREMENT FUND 3
RD
RESPONDENT
LIBERTY
GROUP
LIMITED 4
TH
RESPONDENT
JUDGMENT
PRETORIUS
J,
(1)
This is an appeal in terms of section 30 P of the
Pension
Fund Act
[1]
("the
Act") against the determination made by the Pension Funds
Adjudicator.
(2)
The second respondent is the widow of the late Mr Petrus Frederik van
Coller ("the deceased") who had passed away
on 21 April
2014. The deceased was an employee of the applicant.
(3)
The relief sought by the second respondent is:
"1.
Setting aside the determination in terms of
section 30M
of the
Pension Funds Act, 24 of 1956
by the First Respondent dated 10 July
2015 under complaint reference PFA/GP/00014167/2015/TD ("the
determination'?;
2.
Substituting for the determination
a determination
dismissing the Second Respondent's complaint to the First
Respondent.”
(4)
The complaint, which the second respondent lodged with the
adjudicator, was that she, as the widow, had not been paid the death
benefit by the third respondent ("the Fund”) at the
deceased's death.
(5)
The complaint to the adjudicator was set out in a letter by the
second respondent's attorneys.
THE
LAW:
(6)
The Pension Fund Adjudicator is appointed in terms of
s 308
and C of
the
Pension
Fund Act
[2]
,
("the
Act"):
"'Adjudicator'
means the Pension Fund Adjudicator or Deputy Pension Funds
Adjudicator and any acting Pension Funds Adjudicator
appointed under
section 30C (1).
"
(7)
A complaint is defined in section 1 and means:
"'complaint'
means
a
complaint of
a
complainant relating to the
administration of
a
fund, the investment of its funds or the
interpretation of 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 by 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 and any person and the complainant; and
(d)
that an employer who participates in a fund has not fulfilled its
duties in terms of the rules of the fund; ..."
(8)
Section 30 P of the Act provides:
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."
(Court's emphasis)
(9)
The wording of section 30 P contemplates an appeal in the wide sense.
In
Meyer
v lscor Pension Fund
[3]
the
Supreme Court of Appeal held:
"From
the wording of section 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 section
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."
(Court's emphasis)
(10)
In
The
Pension's Fund Act: A commentary on the Act, regulations, selected
notices, directives and circulars
[4]
the
learned authors state at page 601 that:
"is
also not permitted to reformulate
a
complainant's complaint in
order to find
a
basis on which to grant relief if that basis
did not appear from the complainant's written complaint."
(11)
In
De
Beers Pension Fund v Pension Funds Adjudicator
[5]
,
Thring
J found:
"In
lscor Pension Fund v Murphy NO and Another
2002 (2) SA 742
(T), van
der Merwe J said at 748J-749E:
"The
proper approach to be adopted by this Court in considering an
application in terms of s 30P of the Act was dealt with
in South
African Eagle Pension Fund v Murphy NO, an unreported decision of the
High Court of South Africa (Witwatersrand Local
Division) dated 11
February 2000 under case No 99130587. In that case Nugent J stated,
inter alia, the following at p 2:
'Although
the approach which this Court ought to take when considering
a
determination made by the adjudicator is not expressly dealt with
in the Act, it seems to me to follow from the nature of the
adjudicator's
duties that this Court is called upon to correct his
determination if it is not in accordance with law. In
other
words, this Court does not merely exercise powers of review over
their performance by the adjudicator of his functions, but
is
required itself to assess the merits of the complaint, and decide
whether the adjudicator's determination was correct in law.
If not,
this Court will substitute its own decision.'
In
the unreported judgment of Wise AJ in the matter of Southern Staff
Pension Fund v Murphy NO and Another (case No 14179/99, Witwatersrand
Local Division) the following was stated at p 6 of the judgment
concerning s 30P of the Act: 'Subsection (2) enacts that the Court
'shall have the power to consider the merits of the complaint in
question, to take evidence and to make any order it deems fit'.
I
do not understand this to exclude or limit this Court's inherent
review jurisdiction. In my view, it is the intention of this
section
to give the Court powers in addition to its inherent powers of
review.'
I
respectfully agree."
(Court's emphasis)
I
agree with these findings as it is clear that section 30P of the Act
does not only relate to a review, but grants the court additional
wide powers.
(12)
It is abundantly clear from the wording of the definition of
complaint that only subsection (d) applies in the present instance
as
it is the only subsection dealing with
"an employer''
as
is the case here.
(13)
The second respondent thus has to prove that the applicant
"has
not fulfilled its duties in terms of the rules of the fund".
BACKGROUND:
(14)
The complaint was that the applicant offered the deceased an
opportunity to take early retirement with effect 31 March 2014.
This
offer was accepted on 13 March 2014. On 31 March 2014 the deceased
signed the withdrawal notification to Liberty Life. This
form, which
was initialled on each and every page and signed at the end by the
deceased provided:
"Date of withdrawal March 14".
(15)
In the complaint to the Adjudicator the second respondent alleged
that the deceased had accepted the offer of early retirement
on 13
March 2014 from 31 March 2014, but at the same she alleged that the
deceased was in his notice period when he passed away.
This is
clearly a contradiction. On 21 April 2014 the deceased passed away.
The second respondent alleged that the deceased was
in his notice
month when he passed away and as a result a death benefit became
payable. At the time the deceased was no longer
working, but
according to the second respondent he was in his notice month and had
leave to stay at home. On 23 May 2014, an administrator
at the fund,
third respondent, indicated that the insurance premium for the month
of April 2014 had not been paid on behalf of
the deceased by the
applicant. It is common cause that the premium was subsequently paid
to the Fund, where it was accepted and
not returned.
(16)
A representative of the applicant confirmed that the deceased should
have been covered in April by e-mail as follows:
"I
would appreciate it if you could look into the below
as
I can
confirm that Piet was in his notice month when he sadly passed away.
He
should have been covered for this period."
(17)
An administrator of the fourth respondent replied to this email and
set out:
"I
confirm that Liberty claims department have been notified of the
error in administration and we now await their advice
on any
outstanding requirements regarding this claim. I will update you as
soon as possible."
(18)
On 11 June 2014 the same administrator, Ms Kay Maguire, replied that
a premium had been received from the applicant on behalf
of the
deceased for the month of April 2014 and that
"the claim
should be finalized soon".
(19)
The early retirement calculations show the period for notice pay as
April 2014. The tax directive from SARS shows the date
of accrual as
30 April 2014, which supports the contention that the deceased's last
month of employment was April 2014, which was
regarded as his notice
month.
(20)
It is set out in paragraph 2.13 of the complaint to the adjudicator:
"It
is submitted that given all the arguments made above together with
the documentary evidence attached the deceased was indeed
a member of
the fund at the time of his death and a death benefit accordingly
became payable."
(21)
The relief sought by the second respondent from the Adjudicator was:
"3.
1.1 The fund and/or administrators of the fund be ordered to
furnish the complainant and the tribunal with the reinsurance policy
forthwith for purposes of establishing her rights and benefit
entitlement;
3.
1.2 The fund be ordered to exercise its discretion in terms of
s
37
C
of the Act and pay the deceased's death benefit;
3.1.3
Alternatively, in the event that it is found that the employer
erroneously communicated the incorrect information to the fund and/or
its administrator it should be held liable to pay the death benefit."
(Court's
emphasis)
(22)
The only relief applicable to the applicant is the alternative relief
set out in paragraph 3.1.3, as the first two paragraphs
relate to the
third respondent, the fund. Neither the third nor the fourth
respondents opposed the present application as no relief
is sought
against them.
(23)
The second respondent alleged negligence on the part of the applicant
in that the withdrawal form, which had been signed by
the deceased on
13 March 2014, had not been completed in all respects. There is no
evidence in the body of the complaint as to
what the information
allegedly was that the applicant "erroneously" communicated
to the fund and/or its administrator
or how or when this erroneous
communication took place. It is set out that the form was incomplete
as it did not contain the required
information as to which option had
been selected to transfer the money, namely cash, cheque or
electronic transfer. The second
respondent alleged:
"It
is submitted that given all the arguments made above together with
the documentary evidence attached the deceased was indeed
a
member of the fund at the time of his death and
a
death
benefit accordingly became payable."
(24)
The complaint was not that the applicant had erroneously informed the
fund of the date on which the deceased left its employ
or ceased to
be a member of the fund. There were no allegations that the erroneous
information provided to the fund caused the
non-payment of the death
benefits nor that the applicant had breached its duties in terms of
the rules of the fund. There was no
indication that the repudiation
of the claim by the fund and/or its insurer was due to any failure of
the applicant to timeously
deduct the contribution for April 2014 and
to pay it to the fund. The complaint was:
"To
ensure that the complainant is not left financially destitute, we
further need to determine the rights of the complainant
and this can
only be done by perusing the contents of the reinsurance policy,
which may provide that there was death cover in place
one month after
the deceased member's death."
(25)
Nowhere in the body of the complaint does the second respondent
allege that the applicant was responsible for the Fund being
notified, in error, in the withdrawal form that the deceased's
employment and membership of the Fund had terminated at the end
of
March 2014. There is no indication that the applicant had
communicated to the Fund that the deceased had left its employ or
ceased to be a member of the Fund in error and that is the reason for
the Fund and the fourth respondent declining to pay the death
benefit.
(26)
The correspondence, by email, between the applicant and the
administrator at Liberty supports the fact that the instalment
for
April 2014 had been paid and had been received by the fund. This
cannot be the reason for holding the applicant liable.
(27)
The first respondent made the following order after dealing with the
facts:
"6.1.1
The first respondent is ordered to calculate the amount of the death
benefit that would have been payable to the deceased's
beneficiaries
in terms of section 37C of the Act had the third respondent had the
April 2014 contribution to the first respondent
in terms of its
rules, together with interest at
a
rate of
9%
per annum
from 1 September 2014 to date of payment, less the amount already
paid to the complainant;
6.1.2
The first respondent is ordered to transmit to the third respondent
its computations in paragraph 6.1.1, within three days
of completing
them;
6.1.3
The first respondent is ordered to conduct the investigations,
identify the deceased's beneficiaries and allocate the death
benefit
in terms of section 37C of the Act, within eight weeks of this
determination;
6.1.4
The first respondent is ordered to notify the complainant and the
third respondent of its decision in writing, in terms of
paragraph
6.1.3 above within one week thereof,·and
6.1.5
The third respondent is ordered to pay the deceased's beneficiaries
as identified in paragraph 6.1.3 above, the death benefit
as computed
in paragraph 6.1.1 above within two weeks of receipt of information
in paragraph
6.1.3
above."
(28)
This order made by the first respondent was in total contradiction to
the relief requested by the second respondent.
(29)
The complaint against the applicant made it quite clear that the
primary complaint was against the fourth respondent and not
against
the applicant, the employer of the deceased. In the introduction the
Adjudicator set out the issues of determination as
set out above.
(30)
In the present instance the Adjudicator had to find that the employer
erroneously communicated the incorrect information to
the third and
fourth respondents and or their administrators. There is, however, no
indication in the complaint or the body of
the complaint as to the
information allegedly erroneously communicated to the fund. The only
complaint was that the withdrawal
form had not been completed in all
respects. This complaint, according to the second respondent,
indicated negligence on the part
of the applicant. There is no
mention or indication as to how the applicant's so-called negligence
had an impact on the decision
by the third and fourth respondents not
to pay the death benefit. In any event, the deceased had signed the
form and requested
Ms Hugo, one of the employees, to submit the form.
(31)
There is no mention of the applicant in this introduction, although
the ultimate finding was against the applicant. The second
respondent
deals in detail with the facts to decide whether the applicant was
serving his notice period during April 2014, however
that was not the
basis of the complaint to the Adjudicator. The basis of the complaint
was the issue of the reinsurance policy
not being furnished to the
second respondent to peruse it and the relief sought against the
applicant reflects this. Counsel for
the second respondent is correct
that the Adjudicator is, in terms of section 30E(1)a of the
Pension
Funds Act
not limited
to the relief sought by a complainant, but
at the least, the
audi alteram partem
rule should be
considered and applied. This did not take place in this instance.
(32)
It is pertinent to note that the second respondent did not allege
that the applicant had erroneously communicated the wrong
date to the
fourth respondent on which the deceased had left its employ, nor that
the fourth respondent had declined to pay due
to the wrong
information from the applicant. The second respondent failed to set
out that applicant breached its duties in terms
of the rules of the
fund. There is nowhere any indication on the papers that the
applicant is to blame for the repudiation of the
claim by the fourth
respondent and no mention as to why the applicant is to be blamed for
the repudiation.
(33)
The main complaint was that the applicant had not provided a copy of
the reinsurance policy to the second respondent when requested
to do
so, and not that the applicant had been negligent in paying the April
2014 premium late. The late payment of the premium
did not play a
roll, as it was accepted by the third and fourth respondents.
(34)
In
Southern
Staff Pension Fund v Murphy NO and Another
[6]
,
Wise
AJ held at page 970 to 971 that:
"This
complaint was never put to the Fund. It was never given the
opportunity of dealing with it. In
my view this failure to
observe the requirements of audi alteram partem was material and
sufficient to render the procedure by which
such finding were reached
unlawful."
(Court's emphasis)
I
agree with this finding and the principle must be applied in this
instance. The second respondent did not have the opportunity
to reply
to these findings and therefor the procedure was unlawful and falls
to be set aside.
(35)
The only reason the first respondent found against the applicant is
that she found that the applicant failed to pay the premium
for April
2014 on behalf of the deceased and therefore the fourth respondent
repudiated the claim.
(36)
This was not the case the first respondent had been asked to
adjudicate and was not the basis of the second respondent's
complaint.
There was no evidence on which such a finding could be
based.
(37)
It is thus clear that the Adjudicator made her finding on facts not
before her and not supported by the evidence in the body
of the
complaint. The applicant had no opportunity to deal with these
findings and to place facts before the first respondent to
refute
these findings.
(38)
Due to the fact that the first respondent is confined to make a
finding on the complaint made by the complainant, she acted
beyond
her jurisdiction. On this ground alone the finding must be set aside.
(39)
However, if I should be wrong in this respect, I deal with a further
ground on which the applicant relies to have the Adjudicator's
finding set aside. The applicant contends that the determination
should be set aside due to procedural unfairness as the
audi
alteram partem
rule
was not applied. The complainant, the second respondent, did not
raise the point of non-payment of the April 2014 contribution,
but
the fourth respondent raised it. This was never taken up with the
applicant, as a result the applicant never had an opportunity
to
respond to the allegation and to deal with it. The first respondent
therefor did not comply in terms of
section 300
of the
Pension Funds
Act as
she did not dispose of the matter in a procedurally fair
manner, as the
audi
alteram partem
rule
was not applied
[7]
.
(40)
It is also clear that the Adjudicator was wrong on her findings on
the facts.
(41)
The fourth respondent repudiated the claim on the basis that the
deceased had withdrawn from the fund as of 31 March 2014.
The
premiums were paid monthly in arrears. Thus the payment on 1 April
2014 was for the month of March and not for April. An e-mail
was sent
to the deceased's son on 2 July 2014 which set out:
"The
board have made their decision and I have notified WPRSA as the
decision was made late Friday and I know they will be
contacting you
shortly.
Liberty
has not sent the formal notification
as
yet, I
am
awaiting
this in order to forward to WPRSA management.
Regretfully,
the board have declined the claim due the fact that your
Farther had withdrawn from the fund
as
of the 31st March by agreement with WPRSA.
I
am
very sorry
as
I know this is not the news you
wanted."
(Court's
emphasis)
(42)
The fourth respondent sent a letter on 9 June 20014 which set out:
"We
refer to your request for the Complaints Resolution Committee to
consider
a
death claim for the above former member.
After
carefully considering the evidence and information presented from our
records, it was agreed that regretfully we are unable
to accept this
as a
death claim
as
the member withdrew from the fund
prior to his death."
It
is thus quite clear that the claim was declined as the fund had found
that the deceased had withdrawn from the fund on 31 March
2014 and
not that the premium for April 2014 had not been paid.
(43)
No payment was made at the end of May 2014 for April, but due to the
fact that the applicant was informed on 29 May 2014 that
further
consideration would be given to the claim, the amount of R1 683.13
was paid to the fourth respondent in respect of the
deceased's
contribution for April 2014.
(44)
The fourth respondent repudiated the claim due to the withdrawal from
the fund by the deceased on 31 March 2014 according to
the withdrawal
form. The Adjudicator had made an error on the facts when finding
that the applicant had delayed payment for April.
On this ground
alone the determination must be set aside as well.
(45)
The second respondent alleged in her complaint that the deceased had
accepted an offer
"to take early retirement with effect from
31 March 2014".
The written agreement, completed by the
deceased, set out that the deceased would take
"early
retirement with effect from 31 March 2014".
(46)
The senior human resources business partner of the applicant, Mr
Duncan, took the view that the deceased was in his notice
month when
he passed away.
(47)
This contention lead to both Ms Maguire and the second respondent to
believe that April 2014 was the deceased's notice month.
Mr Duncan
was wrong when he informed the Adjudicator that the deceased had been
retrenched, as it is patently clear that the deceased
took early
retirement. It is common cause that the deceased took early
retirement.
(48)
The applicant explained that the so-called salary for April 2014 as
set out in the annexed computation, was an
ex gratia
payment
to put the deceased in the same favourable position he would have
been, had he been retrenched. On this computation the
end date is
clearly indicated as 31 March 2014 and not 30 April 2014.
(49)
In
SA
Transport and Allied Workers Union v Old Mutual Life Assurance Co SA
Ltd
[8]
at
318 D Murphy AJ held:
"By
electing early retirement such employees relieved the employer of the
burden of dismissing them. Unlike normal retirement,
which may amount
to the termination of employment through the effluxion of time, early
retirement is akin to resignation and normally
involves the
communication of an intention to terminate employment by the
employee. In
the circumstances, the exercise of such an
election cannot be a dismissal."
(Court's emphasis)
(50)
In this instance the termination or withdrawal agreement explicitly
set out the
a
greed date as 31 March 2014. The further actions
by the deceased supports this as he had instructed that March 2014
should be reflected
as his last month of membership in the withdrawal
form to the fourth respondent, and the same instruction in respect of
his contribution
to the Medical Aid Fund. It is quite clear that the
deceased had given the instruction to withdraw from the fund as from
31 March
2014.
(51)
If it is found that the deceased was still employed during April
2014, the applicant will not be liable, as the premium for
April had
been paid. At best, the third or fourth respondent may be liable, but
it is not for this court to make such a decision
as to who would be
liable and to what extent.
(52)
The main reason set out by the second respondent for requesting the
court to uphold the Adjudicator's finding against the applicant,
is
that the applicant should never have submitted the incomplete
withdrawal form to the fourth respondent and the applicant thereby
breached its fiduciary duty. I cannot agree as the deceased had
signed the withdrawal form and had given instructions to Ms Hugo,
his
underling, to forward it to the fourth respondent. She acted on his
explicit instructions and there can be no other explanation
for the
form reaching the fund.
(53)
I have considered all the oral and written arguments, as well as the
finding by the Adjudicator. If the principles are applied
as set out
in the
Meyer case
(supra),
as well as
De Beer's case
(supra)
there can be no doubt that the first respondent
did not deal with the complaint, but found for the second respondent
on facts that
were not ventilated and to which the applicant had no
opportunity to reply.
(54)
In these circumstances I find that the Adjudicator had exceeded her
powers by adjudicating a point that was not the issue in
the
complaint. Due to this error the applicant never had the opportunity
to be heard on this issue and the Adjudicator did not
comply with the
audi alteram partem
rule. The Adjudicator further erred on the
finding of facts that the fourth respondent had not paid the claim
due to the non-payment
of the contribution for April, but that
finding was totally inconsistent with the second respondent's
complaint and not part of
the complaint. If it is so that the
Adjudicator was of the opinion that the deceased was still employed
in April 2014, then the
third or fourth respondent may be held liable
but certainly not the applicant. Due to the facts found above, this
court need not
make a decision on whether the deceased was still
employed during April 2014, and that the third or fourth respondent
is liable.
I do find that the applicant has to succeed in these
circumstances.
(55)
I have been requested to dismiss the second respondent's complaint to
the first respondent, but in these particular circumstances
in this
matter, I am of the opinion that, although the Act gives me wide
powers, this should not be done. By dismissing the second
respondent's complaint to the first respondent I will be closing the
door for her to pursue her claim against the third and fourth
respondents as well.
(56)
The order is:
1.
The determination in terms of section 30M of the Pension Fund Act 24
of 1956 by the first respondent dated 10 July 2015 under
complaint
reference PFA/GP/00014167/2015/TD is set aside;
2.
The second respondent to pay the costs of the application, including
the cost of senior counsel.
___________________
Judge
C Pretorius
Case
number:
67153/2015
Matter
heard on:
22 March 2016
For
the Applicant:
Adv AJ Freund SC
Instructed
by:
Werksmans Attorneys
For
the Respondent:
Adv. KA Magan
Instructed
by:
Soonder Incorporated
Date
of Judgment:
26 April 2016
[1]
Act
no. 24 of 1956
[2]
Supra
[3]
2003(2) SA 715 (SCA) at 7251 to 726A
[4]
By Rosemary Hunter et al (2010)
[5]
[2003] 3 BPLR 4764 (C) at 4769
[6]
[2000]
9 BPLR 963 (PFA)
[7]
See
Southern Staff Pension (supra)
[8]
(2005) 26 ILJ 293 (LC)