Hunter v Financial Services Board and Others (3725/16) [2016] ZAGPPHC 1208 (14 December 2016)

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[2016] ZAGPPHC 1208
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Hunter v Financial Services Board and Others (3725/16) [2016] ZAGPPHC 1208 (14 December 2016)

IN
THE HIGH COURT OF SOUTH AFRICA
(GAUTENG
DIVISION, PRETORIA)
Case
no:
3725/16
14/12/2016
NOT
REPORTABLE
NOT
OF INTEREST TO OTHER JUDGES
REVISED
ROSEMARY
THERESE
HUNTER
Applicant
and
FINANCIAL
SERVICES
BOARD
First
Respondent
ABEL
MOFFAT SITHOLE
N.O.
Second
Respondent
DUBE
PHINEAS TSHIDI
N.O.
Third
Respondent
JURGEN
ARNOLD BOYD
N.O.
Fourth
Respondent
PRAVIN
GORDHAN
N.O.
Fifth
Respondent
JUDGMENT
HF
JACOBS, AJ:
INTRODUCTION
AND STATUTORY SETTING
:
[1]
With the advent of the Financial Services Board Act ("FSB
Act")
[1]
on 1 October 1990
there was established a board to supervise compliance with laws
regulating financial institutions and the provision
of financial
services and for matters connected therewith. The board so
established is a juristic person and is known as the Financial

Services Board ("the FSB"), the first respondent in this
application.
[2]
The FSB Act
creates an executive for the FSB which consists of the Chairperson,
the second respondent (Mr Sithole) and one or more
Deputy Executive
Officers and a Chief Actuary. Those officials are all appointed by
the Minister of Finance ("the Minister").
[3]
More persons may be appointed to the executive by the Board itself.
The appointed executives are all full-time officers of the
Board and
employees of the FSB and they oversee and perform functions imposed
under regulatory acts. The Pension Funds Act, Act
24 of 1956 ("the
Pension Funds Act") is one of the regulatory acts under the
supervision of the FSB. The FSB Act itself
is not regulatory at all.
It only provides the statutory structure within which the regulatory
acts are administered by the FSB.
[2]
The Executive Officer of the FSB, the second respondent (Mr Tshidi)
is the
"Registrar"
of pension funds in terms of the
Pension Funds Act and the FSB Act.
[3]
There are five Deputy Executive Officers appointed by the Minister to
the FSB. The Deputy Executive Officers are each responsible
for a
specific division of the FSB under delegation of authority from the
Executive Officer.
[4]
The
functions of the FSB are -
[3.1]
to supervise and enforce compliance with laws regulating
financial
institutions
[5]
and the provision of
financial
services
[6]
;
[3.2]
to advise the Minister
[7]
of
matters concerning
financial
institutions
and
financial
services,
either
of its own accord or at the request of the Minister; and
[3.3]
to provide, promote or otherwise support financial education,
awareness and confidence regarding financial products,
institutions
and
services.
[8]
[4]
Financial
institutions
and
financial
services
are
defined by section 1 of the FSB Act to include any pension fund
organisation registered in terms of the Pension Funds Act.
[9]
A
pension
fund
(a
fund which on retirement of a member either pays a lifelong annuity
to its member or buys an annuity for its member from an insurer)
and
a
provident
fund
(which
is a fund that pays the full amount of a member's benefit in one cash
lump sum on retirement) are regulated by the Pension
Funds Act. I
refer to a pension fund and a provident fund as a
"pension
fund"
or
a
"fund"
as the
distinction between the two are of no relevance in the present
context. A pension fund exists as a legal entity and is constituted

in terms of its rules. It has members and the members' dependents,
like the members themselves, have interest in the pension fund.
The
rights of the members and their dependents are determined by the
rules of the fund. Rules of a fund may, therefore, provide
for the
payment of money to dependents or nominees of the members following
the death of a member. The dependents or nominees are
often referred
to as beneficiaries. It, therefore, follows that as long as a benefit
remains payable to a member (or his or her
beneficiary) a pension
fund will have a member.
[5]
The directing mind and will of a pension fund, like other corporate
entities, lies with its human agency, its board.
[10]
The board of a pension fund is responsible for the general
superintendence of its affairs including compliance with the
provisions
of the Pension Funds Act and its regulations. The Pension
Funds Act
[11]
provides that
the members of a pension fund may elect and appoint 50% of the
members of the board of trustees of a fund.  The
board's
responsibilities lie with the pension fund and with no one else (not
with its members, beneficiaries or its creditors).
The members of a
pension fund's board owe the fund a duty of utmost good faith. The
powers of the board must be exercised in terms
of the rules of the
fund and the applicable legislation.
[6]
The applicant explains that as at the end of 1998 there were 15 825
registered pension funds under the Pension Funds Act. Her
evidence in
this context is based on the information contained in the annual
reports of the FSB for the calendar year 1998. Of
those funds 13 127
(83%) were exempt from the obligation to submit annual financial
statements and statutory actuarial valuations
to the Registrar of
Pension Funds.
[12]
The
exemptions existed by reason of the fact that the exempted funds were
wholly underwritten funds - meaning that their total
asset base
comprise of insurance policies underwritten by insurance companies
for all the liabilities of those funds. After 1998,
so the applicant
explains, there occurred a shift in employer preference from
"stand­
alone funds"
(a
fund for the employees of a single employer) to
"umbrella-funds"
(a
number of funds to which more than one employer can direct its
employees to belong). Many of these pension funds were
"occupational
retirement funds". Occupational retirement funds
are
pension funds and provident funds to which employees of a specific
employer are required to belong in terms of their contract
of
employment. Occupational retirement funds may be approved by the
South African Revenue Service in terms of the Income Tax Act
of 1962.
Such approval can only take place if membership to the retirement
fund is compulsory for all employees or for employees
within a
specified category of employees.
Funds
with a few members were exposed to the risk of poor returns on their
investments by reason of their inability to make diverse
investments
in categories such as equities, bonds, property and cash. The
migration to umbrella funds caused many stand-alone funds
to cease
functioning. No liquidators were appointed to wind-up these remaining
funds
[13]
and the
registrations of those funds were not cancelled.
[14]
Mr Tshidi explains in his answering affidavit that those funds
"floated
around aimlessly".
These
funds became known as
"orphan
funds"
-
that is, funds without boards of trustees.
[15]
Orphan funds comprise two categories, namely
"shell
funds"
and
"dormant
funds".
A
shell fund is, as the term suggests, only a husk. It has no assets
and only exists in name. Dormant funds are funds with assets
but
without a board and, therefore, without a directing mind and
will.
[16]
[7]
During 2005 the Registrar withdrew the exemption to wholly
underwritten funds from compliance with the requirements of section

15 of the Pension Funds Act (the obligation to annually submit
audited financial statements and actuarial valuations to the
Registrar).
After withdrawal of the exemption it appeared from the
2006 annual report of the Registrar of Pension Funds that there were
13
132 registered pension funds at the start of 2006, but only 4 384
complied with their duties in terms of section 15 of the Pension

Funds Act by submitting their annual financial statements and
actuarial valuations. This evidence, so the applicant inferred,
indicated that most of the remainder of the registered pension funds
(8 748) were shell or dormant funds. The fourth respondent,
Mr Boyd,
became Deputy Registrar of Pension Funds during 2006. From 2006 to
2013 Mr Boyd cancelled the registration of many dormant
funds. Mr
Boyd on 30 October 2014 explained in a memorandum addressed by him on
the topic that cancellations of the aimlessly floating
pension funds
took place as a pragmatic step at the time. He explained the
cancellations of the funds as follows:
"While
bald and pragmatic steps are needed to deal with the on-going problem
of orphan and dormant funds
as
a
matter
of urgency, in the process care should be taken not to apply the
'ideal situation' postulated for prospective regulatory
measures to
past actions,
as
was
pointed
out by the FSB's Legal Department and with which I fully agree. Maybe
this is the ideal situation in which pragmatism and
practical
common-sense solution must prevail over
a
theoretical
and legally sophisticated approach."
[17]
The
applicant holds the view that the assets of the dormant funds of
which the registrations had been cancelled between 2006 and
2013 had
not been paid to those members who became entitled thereto, in other
words, that there remained in those dormant funds,
unpaid benefits.
The applicant further holds the view that those cancellations which
occurred between 2006 and 2013 had been done
unlawfully. In this
regard she relies on two opinions furnished to the FSB by Adv
Breitenbach SC
[18]
to the
effect that the only legitimate avenue to provide "a
directing
mind and will"
to
an orphan fund would be the appointment of a curator for it in terms
of section 5A of the Financial Institutions (Protection
of Funds) Act
of 2001 (the ideal situation referred to by Mr Boyd in his memorandum
of 30 October 2014).
[8]
The applicant is an attorney of 23 years standing. She specialises in
pension law. She was appointed by the Minister, as Deputy
Executive
Officer: Retirement Funds and Friendly Societies and Head of the
FSB's Retirement Funds and Friendly Societies Division,
a Deputy
Registrar of Pension Funds and Deputy Registrar of Friendly Societies
in terms of the Pensions Funds Act and the Friendly
Societies Act,
1956. Her appointment was for a period of three years and took effect
on 1 August 2013.
[9]
Soon after her appointment the applicant made it her business to have
the cancellations of orphan funds investigated. On 10
September 2013
the applicant suspended the cancellations of pension funds. She found
that several of the orphan funds had been
cancelled and held the
view, mentioned above, namely that those cancellations had taken
place unlawfully. Cancellation of the pension
funds took place in
terms of section 27(1)(a) of the Pension Funds Act which provides
that:
"The
registrar shall cancel the registration of
a
fund
...
on
proof to his satisfaction that the fund has ceased to exist."
The
FSB also used the provisions of section 26(2) of the Pension Funds
Act by appointing a trustee on behalf of an orphan fund to
hold
office until the registration of the fund had been cancelled in terms
of section 27(1)(a) of the Pension Funds Act. Her view
was not shared
by all members of the FSB. Mr Tshidi and Mr Boyd are two individuals
who did not share the applicant's view on the
issue. This difference
of opinion gave rise to a war of words that waged in the offices of
the FSB for years and throughout these
proceedings. The applicant
made it clear that she and those who share her view believe the
unlawful cancellation of funds occurred
during the watch of Mr Tshidi
and Mr Boyd and heaped the scorn on them. It is not within my remit
to consider the merits of the
views of the factions within the FSB as
can be seen from the issues of law distilled by counsel during
argument and listed below.
However, and in view of the cost orders
sought by the parties, reference will be made to some of the events
which preceded the
present litigation. My summary of the facts
gleaned from the 3 700 page record is not a summary of all the
evidence presented by
the parties. Much was stated in correspondence
(mostly typed in single spacing) and attached to the affidavits
relevant to the
acrimonious dispute between the parties. Mindful of
its general import I am of the view that, except for the costs issue,
the dispute
can be resolved on determination of the applicant's
standing and her entitlement in law to the relief sought in the
original notice
of motion and that the application for the proposed
amendment of her notice of motion can be adjudicated on the same
premise. More
about the amended notice of motion presently.
[10]
On 25 February 2014 (7 (seven) months after she took office) the
applicant informed Mr Tshidi of her intention to reveal the
existence
of the cancellations of orphan funds and her reasons for stopping the
cancellations and her view of the unlawfulness
of the cancellations
project as it became known by then, at a Pension Lawyers Association
meeting. The meeting enjoyed media coverage.
Such a revelation from a
public podium obviously embarrassed Mr Tshidi and Mr Boyd (and the
FSB). The wisdom of the applicant's
conduct in that respect was
questioned.
[11]
During March 2014 meetings took place between the applicant and Mr
Tshidi to resolve their differences on the cancellation
of orphan
funds. Those attempts failed. The applicant then asked the FSB's
Retirement Fund Division's Legal Department to convene
a legal team
of staff to investigate the circumstances under which registration of
pension funds had been cancelled during the
period 1 January 2012 to
30 September 2013. Shortly thereafter another employee of the FSB, Ms
Buitendag, submitted a complaint
of grievance to Mr Tshidi against
the applicant. Soon thereafter the FSB caused the applicant's office
computer to be seized and
a copy be made of her computer's hard
drive. Thereafter the applicant received a call from the FSB's
attorneys who offered her
a golden handshake. She declined the offer.
On 27 March 2014 the applicant proposed a mediation facilitated by
the FSB's attorneys
of the dispute between the applicant and Mr
Tshidi. The FSB declined the applicant's proposal. On 3 April 2014 Mr
Tshidi mandated
and appointed Gobodo Forensic Investigators
("Gobodo") to investigate and report on the complaint of Ms
Buitendag and
to investigate
"other
matters of concern".
During
June of 2014 Gobodo furnished a preliminary report to Mr Tshidi. On 1
July 2014 the applicant submitted a notice of non-compliance
[19]
to the FSB. On 23 September 2014 the second respondent (Mr Sithole}
sent an email to the applicant and Mr Tshidi informing them
that
Justice O'Regan, a retired Constitutional Court Justice, was
appointed to conduct an investigation into the notices of
non­compliance
submitted to the FSB by the applicant. The
applicant and some of the respondents submitted memoranda and other
correspondence to
Justice O'Regan following her appointment. On 22
October 2014 the applicant was informed that the Board of the FSB had
formed the
view that the applicant may be guilty of serious
misconduct and that the Board had obtained the Minister's permission
to institute
disciplinary proceedings against her and would defer
consideration of her notice of compliance until after the conclusion
of the
disciplinary proceedings that was imminent. On 23 October 2014
the Executive Committee of the FSB decided during a meeting that
the
cancellation issues of pension funds will be removed from the agenda
of the FSB until the enquiry of Justice O'Regan had been
finalised.
The report of Justice O'Regan became available on 21 November 2014 or
shortly before then. On 4 December 2014 the second
respondent
informed the applicant that the report of Justice O'Regan would be
considered
in
camera
at
a board meeting of the FSB and that it had been resolved by the Board
that publication of the report was premature at that stage.
On 19
December 2014 the second respondent sent an email to the applicant,
Mr Boyd and Mr Tshidi stating that the FSB Board had
appointed KPMG
to conduct an audit and an investigation following the report of
Justice O'Regan.
[12]
On 9 February 2015 a disciplinary hearing commenced during which the
applicant was charged as anticipated earlier. On the third
day of the
disciplinary proceedings a settlement was reached. That happened
after cross­ examination of the second respondent
by the
applicant's counsel. The settlement included consent by the parties
to participate in mediation and resolution of their
disputes. Adv
Antrobus SC was appointed and nominated to facilitate the mediation.
On 24 February 2015 the applicant sent an email
to the FSB Board's
sub-committee asking them to provide her with a copy of the final
report of Justice O'Regan. The following day
Mr Sithole responded to
the applicant stating that the FSB is not authorised to release the
final report of Justice O'Regan. On
4 March 2015 Adv Antrobus SC
submitted his report to the FSB stating that the mediation exercise
failed and recommended that the
FSB convene a grievance enquiry to
address the applicant's grievances without delay. The applicant was
on 7 April 2015 informed
by a member of the FSB Board that decisions
on her notices of non-compliance will only be considered once the FSB
has received
the KPMG report. By that time the final report of
Justice O'Regan was not made available to the applicant and on 10
April 2015
the second respondent sent an email to the applicant, Mr
Boyd and Mr Tshidi stating that they would be allowed access to the
final
report of Justice O'Regan on signature of a confidentiality
undertaking in that respect. The applicant was not prepared to sign

the non-disclosure agreement or confidentiality undertaking.
In
June 2015 the applicant submitted her second notice of
non-compliance
[20]
to
the
FSB and on 18 June 2015 she reported her suspicion of fraudulent or
corrupt activities involving officials of the FSB to the
Hawks. On 3
July 2015 the applicant transmitted a letter to the Auditor-General
bringing to his attention the allegations contained
in her notices of
non-compliance, annexures "NCN1" and "NCN2". The
final KPMG report was later supplied to
the FSB. The FSB refused to
furnish the applicant with a copy of the final report of Justice
O'Regan and the final report of KPMG.
[13]
The purpose of the KPMG report was "...
to determine whether
it is likely that material financial prejudice may have been suffered
by any fund or any person with an interest
in any fund as
a
result of the
acts
and/or omissions of the Registrar or any
'authorised representative' or 'section 26(2) trustee' in regard to
the disposal of the
fund's assets and/or liabilities before its
registration was cancelled or the determination by the registrar
whether the fund had
assets and/or liabilities when deciding to
cancel its registration in terms of section 27 [of the Pension Funds
Act]".
[14]
KPMG concluded as follows in its report to the FSB:
"Conclusions
8.1
…
8.2
Reasonable person test- ceased to exist
With
reference to the specific factual questions posed by Justice O'Regan,
namely to:
"consider
in particular whether on the information available to the registrar
at the time of cancellation, it was clear that
a reasonable person
would have concluded that the fund had 'ceased to exist', in that it
had no members, nor any assets or liabilities.'
We
conclude that in 500 of the 510 cancelled fund reviewed by us, we
were unable to confirm that the information available to the

Registrar
was
sufficient for a reasonable person to have
concluded that these funds had ceased to exist at the time of
cancellation thereof.
In
reaching this conclusion, we have applied the subjective and
objective
test as set
out in the report.
On
a balance of probabilities we conclude that a reasonable person could
not, based on the available information, have concluded
that the
funds identified had ceased to exist.
8.3
Reasonable
steps
taken
With
reference to the specific factual questions posed by Justice O'Regan,
namely to:
"consider
whether, before the registration of the fund
was
cancelled,
the manner in which its
assets
and/or liabilities were
disposed of, (whether by the transfer of its
assets
and/or
liabilities to another fund or otherwise) pursuant to decisions taken
by 'authorised representative(s)' or 'section 26(2)
trustee(s)'
indicated that reasonable steps were taken to protect the interests
of members and/or beneficiaries and/or other creditors.'
We
conclude that we are unable to confirm with reference to 500 of the
funds review, that the information available to the Registrar
was
sufficient for a reasonable person to have concluded that
reasonable
steps
were taken, inter alia by the Authorised
Persons or the Section 26(2) trustees, and/or the Registrar to
protect the interest of
members, beneficiaries and/or creditors.
On
a balance of probabilities the opposite appears to be the case
.
8.4
Likelihood of material financial prejudice
With
reference to the further question posed by Justice O'Regan, namely:
to
determine whether it is likely that material financial prejudice may
have been suffered by any fund or any person with an interest
in any
fund as
a
result of the acts and/or omissions of the Registrar
or any 'authorised representative' or 'section 26(2) trustee' in
regard to
the disposal of the fund's assets and/or liabilities before
its registration was cancelled or the determination by the registrar

whether the fund had assets and/or liabilities when deciding to
cancel its registration in terms of section 27'.
We
conclude that the documentation available to the Registrar at the
time of the cancellation, and at least on the face of it suggests
a
high likelihood of the existence of assets, liabilities and/or
members at cancellation for 500 of the 510 funds reviewed.
Although
we were not mandated or requested to determine the extent and value
of the asset, we have, based on the available documentation
performed
a high level calculation and an indicative quantification of the
value of such assets.
The
significant extent and value of the indicative quantification
strongly supports a conclusion of the likelihood of material
financial prejudice. We have quantified an indicative value of assets
and approximately R2 500 000 000.
The
detail of these indicative asset values are included in the amounts
reflected in Volume 2 and the calculation underpinning the
indicative
values are contained in Volume 3.
We
are further of the view that the significant lack of reliable
documentation and information at the disposal of the Registrar,

suggests that a structured and extensive documentation
supplementation exercise may significantly reduce the possible
prejudice
calculated.
8.5
Contributory role of the mechanisms utilized
The
shortcomings in the approach and processes followed, were in our
view, a major contributory factor to the conclusions that we
made in
the paragraphs above. The mechanisms deployed during the cancellation
project established processes that resulted in the
lack of objective
information and documents at the disposal of the Registrar. This lack
created
a
factual position in terms whereof the decisions
taken could not be objectively supported and verified.
Specifically
the perceived conflict of interest of the Section 26(2) trustees that
was not considered at the time of appointment
of the trustees and the
lack of monitoring and oversight from the FSB."
[15]
Following the KPGM report the FSB appointed Mr Mort as an inspector
in terms of section 2(1) of the Inspection of Financial
Institutions
Act, 80 of 1998 ("the Inspection Act") and engaged his
services as an expert advisor to, according to subparagraph
2.3 of
his letter of appointment:
"2.3.1
Determine the history of any of those deregistered funds determined
by you prior to deregistration;
2.3.2
In terms of section 3(1) of the Inspection
Act,
inspect the
affairs of any fund or long-term insurer, and any associated
institution, to which any
asset
of such deregistered funds
were transferred prior to the deregistration;
2.3.3
In terms
of section 3(1) of the Inspection Act, inspect the affairs of the
administrators, set out in Annexure 'A', administered,
as
benefited
administrators, any of these deregistered funds at any time prior to
deregistration, and the associated institutions;
and
2.3.4
In terms of section
3(2) of the Inspection Act, inspect the affairs of any deregistered
funds and the associated institutions, if
there is reason to believe
that such deregistered funds were conducting unregistered business
after deregistration.”
[21]
[16]
Mr Mort reported to the FSB in writing on two occasions. His first
inspection report was dated 7 June 2016. Mr Mort's latest
report was
handed up to me by Adv Loxton SC at the hearing after service thereof
by the FSB a few earlier. The applicant challenged
the appointment of
Mr Mort to undertake the investigation. In her affidavits filed she
expressed the view that Mr Mort as a single
inspector cannot possibly
complete the investigation within a reasonable time. The latest
report of Mr Mort however shows that
he has completed his
investigation of approximately 63% of the orphan funds concerned and
that his investigation (inspection) is
still underway. As stated
earlier it is not within my remit to consider or adjudicate upon the
merits or demerits of the cancellation
project, the findings of
Justice O'Regan, the KPMG report or the report of Mr Mort. The
applicant's notice of motion suggests that
no investigation
(inspection) is underway. The common cause facts show the opposite.
The evidence show that an investigation took
place and the report was
presented by Justice O'Regan at the behest of the FSB that was
followed by a report by KPMG. The applicant
holds the view that the
ambit of the mandate of KPMG was too narrow. It is further common
cause that Mr Mort is at present in the
process of completing his
inspection. I will refer to these common cause facts in the context
of the legal basis on which the applicant's
claims have been
formulated below.
[17]
On 19 January 2016, a little more than six months before the
termination date of her 3 year appointment, the applicant launched

this application against the FSB, Mr Sithole in his capacity as
Chairperson of the FSB, Mr Tshidi in his capacity as Executive

Officer of the FSB and its Accounting Officer in terms of the Public
Finance Management Act, 1999 ("PFMA") and as Registrar
of
Pension Funds under the Pension Funds Act, and against Mr Boyd in his
capacity as Deputy Registrar of Pension Funds and Deputy
Registrar of
Friendly Societies and the Deputy Executive Officer: Retirement Funds
and Friendly Societies Division of the FSB during
the period 1 May
2006 - 31 December 2012.
THE
RELIEF SOUGHT IN THE ORIGINAL NOTICE OF MOTION
:
[18]
In her original notice of motion the applicant claimed the following
relief:
[18.1]
that a copy of the final report produced during or about December
2014 by Justice O'Regan in relation to the Pension Funds
Cancellation
Project conducted by the first respondent;
[18.2]
that a copy of the report produced during or about July 2015 by the
firm KPMG in relation to the Pension Funds Cancellation
Project
conducted by the first respondent;
[18.3]
an order against the FSB to investigate the matters referred to in
the applicant's notice of non-compliance dated 1 July
2014 and
supplemented on 29 July 2014, a copy of which is attached to the
founding papers as annexure "NCN1" by an independent
and
suitably qualified individual or organisation and report to the
applicant on the outcome of such investigations within three(3)

months;
[18.4]
that the FSB,
alternatively
the Minister procure an
investigation into the matters referred to in the applicant's notice
of non­compliance dated 1 July
2015 ("NCN2") by an
independent and suitably qualified individual or organisation and to
furnish the applicant with a
copy of that report;
[18.5]
leave to approach the Court on the same papers, supplement it if
required, after receipt of the reports sought in terms of
the notice
of motion for further relief may be appropriate in the circumstances;
and
[18.6]
an order as to costs in the event of opposition of the application.
THE RELIEF SOUGHT IN
TERMS OF THE PROPOSED AMENDED NOTICE OF MOTION
:
[19]
On 20 October 2016, six weeks before the hearing, the applicant
served an application to amend her original notice of motion
("the
amendment application"). The amendment application was served
after the applicant had delivered her replying affidavit
on 1 July
2016.
[20]
In the proposed amended notice of motion the relief summarised in
paragraphs [17.1] to [17.3] remain. To those paragraphs the
following
relief is added by the proposed amended notice of motion:
"3.
declaring that:
3.1
in the conduct of the pension funds cancellations project, the
third respondent (Tshidi) has failed to comply with his obligations

in terms of the Pension Funds Act, 1956, (the PFA) to properly
exercise the powers given to him in terms of that Act for the
purposes
for which they were given;
3.2
The FSB, including those persons appointed in terms of section 4
of the Financial Services Board Act, 1990 (the FSB Act) during the

period 1 August 2013 to 31 July 2016 have failed to comply with its
obligations in terms of the Constitution of the Republic of
South
Africa, 1996 (the Constitution) the FSB Act and the Public Finance
Management Act, 1999 (the PFMA) (collectively 'the relevant

legislation), in that having been made aware of the irregular manner
in which the cancellations project was executed, they failed
to deal
with such irregularities properly and failed to ensure compliance by
Tshidi and the fourth respondent (Boyd) with the relevant
provisions
of such legislation;
4.
That within 30 days of this order the FSB procure the conduct of
an investigation by
a
firm of independent and appropriately
qualified forensic auditors (the investigator) chosen by it in
consultation with the fifth
respondent (the Minister) into:
4.1
the circumstances under which Tshidi cancelled the registrations
of
certain
funds (the 500 funds) in relation to which KPMG, in its report to the
FSB of 20 October 2015, concluded that Tshidi was
not possessed of
information sufficient to be reasonably satisfied that such funds had
no assets or liabilities and that their
registrations should be
cancelled in terms of section 27 of the PFA;
4.2
whether Tshidi, Boyd or other employees of the FSB in employment
during the period 1 August 2013 to 31 July 2016 and/or any other

person(s) who provided services to the FSB during that period
obstructed Hunter in her efforts to investigate and address
irregularities
in the cancellations project, inter alia in the manner
described in Hunter's Notice of Non-Compliance and Statement of
Grievance
dated 1 July 2014 and supplemented on or about 29 July 2014
(together Hunter's 'NCN1
'? and
whether such conduct which was
unlawful and/or otherwise improper;
4.3
whether the second respondent (Sithole) and other persons
appointed in terms of section 4 of the FSB Act during the period 1
August
to 31 July 2016 unlawfully failed to exercise their powers and
fulfil their duties under the relevant legislation in the manner

described or contemplated in Hunter's Notice of Non-Compliance and
Statement of Grievance dated
9
June 2015 (under's 'NCN2J;
4.4
whether Tshidi abused his position
as
executive officer of
the FSB and the powers conferred upon him by the FSB Act by
unlawfully obstructing the efforts of Hunter to
investigate and
address irregularities in the conduct of the cancellations project,
inter alia in the manner described.
5.
That the investigator shall be mandated by the FSB to determine,
on the basis of information and records and any other past or present

employee of the FSB) who, in the opinion of the investigator, may
have information or records relevant to its investigation in
relation
to each of the 500 funds, whether-
5.1
the assets reflected in the most recent and properly completed
financial statements or other statutory returns submitted to Tshidi

on behalf of the fund before the cancellation of its registration
were lawfully and properly disposed of in
a
manner which
protected the rights and reasonable expectations of such fund, its
members, beneficiaries and other persons with legitimate
interests in
such disposals ('interested persons);
5.2
the liabilities reflected in such statements or other statutory
returns were lawfully and properly discharged, before the
registration
of the fund was cancelled;
and
if not, whether any fund and/or any of its interested persons have
suffered material financial prejudice and, if so:
5.3
whether such prejudice may reasonably be attributed to:
5.3.1
the manner in which the cancellations project was conducted by
Tshidi and/or Boyd and/or other employees of the FSB; and/or
5.3.2
the unlawful, negligent or otherwise improper conduct of any
person(s)
5.3.2.1
appointed by or on behalf of Tshidi to act in the place of the
board of the fund in the disposals of its assets and/or liabilities

('appointee's); and/or
5.3.2.2
which or who provided information and/or made representations to
Tshidi or employees of the FSB acting on his behalf on which he
or
such employees relied when deciding
–
5.3.2.2.1
to appoint the person(s) referred to above;
5.3.2.2.2
whether the fund had complied with any statutory requirement;
5.3.2.2.3
whether to exempt the fund from compliance with any statutory
requirement;
5.3.2.2.4
that the fund had no assets or liabilities and that its
registration should in consequence be cancelled in terms of section
27(1)(a)
of the PFA.
6.
The FSB shall require the investigator
–
6.1
to commence its investigation as soon as reasonably possible and
not less than 30 days after appointment;
6.2
to produce interim written reports to the FSB, the Minister and
all parties to these proceedings at intervals not exceeding three

months on the results of the investigation, and its observations and
findings on the basis of those results (the interim reports);
6.
to make written recommendations in such interim reports in regard
to
–
6.3.1
the further conduct of the investigation and the resources and
measures, if any, which, in its opinion, will be reasonably
required
for the successful and expeditious conduct and conclusion of the
investigation; and
6.3.2
the actions, if any, that, in its opinion, should be taken by the
Minister, the FSB, the registrar of pension funds and/or
any
appointees and/or service providers-
6.3.2.1
to ensure the proper disclosure and delivery to the investigator of
information and/or documents relevant to the investigation;
and/or
6.3.2.2
to remedy any material financial prejudice to funds, their
members, beneficiaries and/or interested persons which may reasonably

be attributed, in whole or in part, to any of the persons
contemplated in paragraph 5.2.3;
6.3.2.3
to investigate whether any material prejudice has been sustained
by any of the other funds the registrations of which were cancelled

in the course of the cancellations project or by their members,
beneficiaries and interested persons
as a
result of the manner
in which the cancellations project was conducted and, if
so,
to
remedy such prejudice;
6.3.2.4
to identify and/or address any other unlawful or improper conduct
determined by the investigator in the course of its investigation.
7.
To the extent that it may be necessary for the purposes of the
investigation, the registrar of pension funds must appoint the
investigator
as
an inspector in terms of the
Inspection of
Financial Institutions Act, 1998
and confer such powers and
authorities in terms of that Act on the inspector
as
it may
reasonably require.
8.
The cost of the investigation shall be borne by the FSB and it
must provide to the investigator all such facilities and access to

its records and information and communication
systems as
it
may reasonably require for the purposes of the investigation.
9.
The FSB must instruct each of its office-bearers and employees,
and request each of its ex-employees identified for this purpose
by
the investigator, on the request of the investigator
–
9.1
to make him- or herself available to be interviewed by the
investigator; and
9.2
to provide to the investigator on request with all information,
advice and documentation as the investigator or that person considers

relevant for the purposes of its investigation.
10.
For the purpose of taking such advice and obtaining such
information from each of the persons referred to in paragraph 9, the
FSB
must in writing authorise the investigator to disclose to such
person such information and documents, including any drafts of its

report(s), as the investigator may consider appropriate but subject
to the condition that that person agrees in writing not to
disclose
to third parties any of such information and/or documents as are not
then in the public domain.
11.
The FSB must ensure that the interim reports are filed in court
immediately upon their production and, unless the court on
application
otherwise orders, simultaneously also serve copies of
such interim reports on each of the parties to these proceedings and
publish
copies of them on its website.
12.
The Minister and each such party may, if he or she so wishes,
within 15 days of the filing of the investigator's final report,
lodge
an affidavit in which he or she comments on the report and
makes submissions to the court on the findings and decisions, if any,

it should make on the basis of the final report.
13.
Within 15 days of the expiry of the 15-day period referred to in
paragraph 12 above the FSB must file in this court, serve upon each

party to this application and publish on its website-
13.1 the final report
of the investigator, confirmed on affidavit;
13.2
such
affidavits as may have been filed pursuant to paragraph 12 hereof;
and
13.3
an affidavit in which the FSB reports on the steps that it has
already taken, and proposes in the future to take, in relation to
the
cancellations project, and responds to the findings and
recommendations made by the investigator in its final report and to

the affidavits filed in terms of paragraph 12 above.
14.
The FSB shall thereafter and
without delay set the matter down for hearing on notice to each of
the other parties to these proceedings.
15.
The court shall make such
findings and orders, and give such directions
as
it deems fit and in the
interests of justice in order to address the issues before it.
16.
The FSB, Si/hole and Boyd are
jointly and severally liable for the applicant's costs in this
application, such costs to be on the
attorney and own client scale,
including the costs of two counsel.
17.
Further or alternative relief"
[21]
At commencement of the hearing I enquired from Adv Loxton SC about
the applicant's intentions should the application for amendment
not
be allowed. Adv Loxton SC informed me that in such an event the
applicant will proceed with the application but only for the
relief
sought in her original notice of motion. The application, including
the application for amendment, was argued on that basis.
The relief
sought in terms of the amended notice of motion, or part of it at
least, is not aimed at compelling the FSB as regulatory
or
supervisory institution to perform in the furtherance of its
objectives. It is aimed at compelling the FSB as employer of a

category of employees to act against those employees. The relief
sought is not for review of any decision under PAJA or on any
other
ground. No administrative action or other conduct performed are even
mentioned in the notice of motion.
[22]
The declaratory order sought in paragraph 3.1 of the amended notice
of motion is final in nature and depends on resolution
of numerous
disputes of fact in motion proceedings. There are so many such
disputes that it will serve no purpose to catalogue
them here. Should
the proposed amendment be allowed, this Court (or if the matter is
postponed, another Court) would be faced with
the obligation to, on
the rules of practice stated in
Wightman
[22]
Lombaard,
[23]
Buffalo,
[24]
Mokala,
[25]
and
National
Scrap Metal
[26]
to satisfy itself that
the parties who purport to raise the disputes (something the
respondents no doubt would do) have in their
affidavits seriously and
unambiguously addressed the facts said to be disputed and whether the
dispute can be resolved in motion
proceedings at all. I am of the
view that the papers as they stand show several genuine disputes of
fact. In my view this Court,
should the amendment be allowed, would
have to refer the entire matter to trial or dismiss the application
by reason of the existence
of disputes of fact that exist in these
papers and have been in existence and foreseeable for years. The
relief sought in the amended
notice of motion is fresh and the
respondents have not had the opportunity to answer thereto. I am
bound to apply the
Plascon-Evans
rule
[27]
in considering the factual issues. I will return to the applicant's
prospects of success to succeed with the relief sought in respect
of
the appointment of an investigator below when I discuss the legal
basis of the applicant's claim as formulated in the original
notice
of motion and the proposed amended notice of motion.
THE
LEGAL BASIS OF THE APPLICANT'S CLAIM
:
[23]
The applicant's standing and the basis of her claim in law is not
readily discernible from the papers. Her cause of action
has mutated
during the proceedings. At my request Adv Loxton SC supplied during
argument a note recording the references to legal
duties the
applicant relies on and detail of the
"applicable
legislation"
and
"ethical duties"
she
mentions in paragraph 3.3, 3.9,
3.2.2
and 4.3.1 of her founding affidavit. These include the following:
[23.1]
The constitutional duties to act lawfully and in a manner that is
effective, transparent, accountable and consistent with
a high
standard of professional ethics founded on the provisions of sections
1(c) and 195 of the Constitution;
[23.2]
The incurring of
"irregular expenditure"
as
contemplated by the Public Finance Management Act, 1999 ("PFMA")
in an aggregate amount in excess of R1.5 million as
"fruitless
and wasteful expenditure", "irregular expenditure"
and/or
"unauthorised expenditure"
in the PFMA if
read with sections 38(1)(b) and 63(2) of the PFMA;
[23.3]
The occupational detriments as contemplated in the Protected
Disclosures Act, 2000 ("the PDA") and the numerous
measures
to undermine the applicant's ability to effectively fulfil her duties
as appointed official in terms of the FSB Act including
the duties to
consult with the National Treasury on matters relating to retirement
savings, related policy issues constituting
"occupational
detriments"
as defined in section 1 of the PDA;
[23.4]
That the conduct of the applicant was aimed at ensuring compliance by
the Registrar and the FSB of its legal duties contained
in the FSB
Act which was met with considerable resistance by Mr Tshidi and other
members of the FSB staff. This resistance took
various forms
including attempted premature termination of the applicant's
employment without good cause and attempts to frustrate
her
investigations and refusal to disclose to her the O'Regan report and
the KPMG report while she, as employee of the FSB, was
entitled to
their disclosure;
[23.5]
By making disclosure of the O'Regan report conditional upon signing
of a non-disclosure undertaking which would have prevented
the
applicant from complying with her legal duties imposed by the FSB Act
and the law in general;
[23.6]
That Mr Tshidi and other staff members of the FSB conducted
themselves in a manner subversive to the execution of the applicant's

duties in terms of the
Pension Funds Act detailed
in her founding
affidavit.
[24]
To the abovementioned list was added during reply, with objection
from Adv Trengrove SC on behalf of the first and second respondents,

the alleged obligation flowing from acceptance by the FSB of the
O'Regan report's recommendation to appoint an investigator which,
so
the submission went, on acceptance of the report created an
obligation on the FSB to appoint the persons whose appointments
are
sought in the notice of motions.
[25]
The respondents challenged the legal foundation of the applicant's
claim in law and her
locus standi in iudicio
to claim the
relief sought. The following points are distilled from the
applicant's affidavits, initial heads of argument, concise
heads of
argument and submissions made on her behalf during oral argument:
[25.1]
In her founding affidavit the applicant made it clear from the outset
that she brought the application in the hope and under
the belief
that, should the relief claimed by her be granted, it would yield a
result forcing compliance by the Minister and the
FSB with their
constitutional obligations
"to act lawfully and in a manner
that is effective, transparent, accountable and consistent with a
high standard of professional
ethics, and to comply with the specific
duties contemplated in applicable legislation and FSB policy
documents".
She particularised the aforementioned premise by
stating that the conduct of the Minister and the FSB to
"act
lawfully"
should include:
[3.1.1]
the identification of, and, if necessary, the adoption by the
Registrar of Pension Funds of measures to remedy, or if that
is not
possible, to mitigate, any substantial prejudice which may have been
suffered by any pension funds subject to regulation
and supervision
in terms of the
Pension Funds Act and/or
other persons with interests
in those funds as a result of the conduct by the FSB and its staff in
the course of the cancellations
project which the applicant, as
stated earlier, firmly believes to have been conducted unlawfully and
negligently.
[26]
The order sought (under the original and amended notices of motion)
is aimed at prescribing to the FSB and the Minister (1)
what to do to
resolve the cancellation issue as the applicant perceives it; (2) how
to do the investigation; and (3) to impose
judicial control over its
manner and time of execution. In her heads of argument the applicant
makes it clear that she
"does not ask this Court to find
as
a
fact that the FSB, Sithole or any of the other respondents are
guilty of breaching the FSB's internal policies, Treasury Regulation

33 or
Protected Disclosures Act. The
relief sought is on the contrary
directed at establishing, inter alia, whether that is
so."
[27]
My general observation is that the applicant has failed to set out
with the required measure of particularity, facts and conclusions
of
law to rely on any of the statutory provisions stated in her
affidavits and those advanced during argument and summarised above.

The provisions of Regulation 33 of the National Treasury Regulations,
the
Protected Disclosures Act or
the Constitution apply to the facts
deposed to have no legal and logical connection to the relief sought.
The applicant relied
on
Viking
Pony
[28]
in support of a finding
that the facts deposed to by her justify an order to give effect to a
general obligation to investigate
a particular matter. A general
obligation to investigate does not exist on authority of
Viking
Pony. Viking Pony
was
decided on facts peculiar to that case and in the context of a
procurement-related dispute.
[28]
The central issue in the application is the standing in law of the
applicant to apply for the relief sought, put differently,
the
jurisdiction of a court to order the FSB and the Minister to perform
a certain act in a specified manner and then to supervise
compliance
with the order. The FSB cancelled the registration of pension funds
years ago (or over many years would be more accurate).
It did so in
terms of the
Pension Funds Act referred
to above. Before doing so it
found
"proof to its satisfaction"
that the orphan
funds no longer function. That (all those) decision(s) of the FSB are
not challenged. Years later the FSB learnt
of the applicant's views
as deputy registrar. The administrator, the FSB, as summarised above,
appointed Justice O'Regan, KPMG,
Mr Mort and its decision or
decisions to do so have not been challenged or set aside. In law they
stand. Both the original decisions
to cancel the orphan funds and the
subsequent
decisions must on authority of
Bato
Star
[29]
be respected. It must be
considered rationally connected to a legitimate governmental and
administrative end unless and until set
aside by a court of law.
[30]
[29]
The decision-maker and statutory supervisory body is the FSB. Its
functions are listed in paragraph [3] above. It is not for
the
applicant as a member of the FSB to dictate her views and preferences
to the FSB by means of judicial intervention. The applicant
contended
that she is entitled to the relief sought under section 1(c) of the
Constitution. I do not agree with the proposition.
he further relied
on the provisions of section 195 of the Constitution. The law is
trite that the values enunciated in section
1 of the Constitution and
the considerations mentioned in section 195 have reference to
government and the duties of government,
inter
alia,
to
be accountable and transparent but do not confer upon applicants any
justifiable rights that they can exercise to protect by
means of
access to courts.
[31]
In my
view the applicant does not have the
necessary
standing in law to claim the relief sought in the original notice of
motion or the amended notice of motion.
[30]
It was in reply submitted on behalf of the applicant that acceptance
by the FSB of the O'Regan report obliged the FSB to appoint

investigators, not as they did by appointing Mr Mort, but as claimed
in the notices of motion. This submission cannot be accepted.
A
factual basis of the submission has not been laid in the founding
papers. The respondents have not been informed of the point
and have
not attended any contradicting evidence. There is, also, nothing on
the papers to suggest that the FSB, after considering
the context of
the O'Regan report and the KPMG report considered itself bound to do
what the applicant suggests and there is in
law no obligation on the
FSB to have accepted the O'Regan report's recommendations or that of
any other person who advised the
FSB.
[31]
The applicant states in the founding papers that she brought this
application in the public interest. From the papers filed
in the main
application and in the application for the proposed amendment of her
notice of motion she seems to be concerned that
nothing may come of
her efforts to regularise the cancellation of orphan funds now that
her term of office had expired (or was
to expire when she launched
the application). Our Constitution provides for a number of Chapter 9
institutions which supports the
constitutional democracy. One of
those institutions is that of the Public Protector.
[32]
The applicant's concerns in that regard do not merit the granting of
the proposed amendment or the relief sought in paragraphs
3 and 4 of
her original notice of motion. Those can be taken care of by the
Public Protector.
[32]
In view of the lateness of the proposed amendment of the notice of
motion, the many genuine disputes of fact that appear from
the papers
on the issues germane to the declaratory orders sought, the lack of
standing of the applicant to succeed with the relief
sought in both
the original notice of motion and the proposed amended notice of
motion, the application for the amendment cannot
succeed. Under the
circumstances the application for the proposed amendment and the main
application must fail.
JOINDER
OF THE THIRD AND FOURTH RESPONDENTS:
[33]
In our law parties may be joined in proceedings for reasons of
convenience and equity and to avoid depression or multiplicity
of
actions.
[33]
In other
instances joinder of parties may be essential because of the interest
a party has in the matter. Failure to join a party
when his or her
participation is essential may cause a Court to suspend proceedings
pending joinder or decline to hear the matter
at all. The third and
fourth respondents objected to their joinder as respondents. Adv
Maritz SC submitted that they could not
have been joined for purposes
of convenience, let alone on the basis that their participation in
the litigation is essential. The
test to determine whether there is a
misjoinder is whether or not a party has a direct and substantial
interest in the subject
matter of the litigation which might be
affected prejudicially by the judgment of the Court.
[34]
[34]
The third and fourth respondents are, like the applicant, employees
and officials of the FSB. There exists in law as far as
I have been
able to determine, no statutory provision or rule of common law or
any factual basis gleaned from the papers to conclude
that the
judgment sought by the applicant in the original notice of motion
might prejudicially affect the third and fourth respondents
in their
capacities as employees of the FSB. On the contrary, none of the
relief sought by the applicant is directed against them.
In my view
the objection of the third and fourth respondents to their joinder in
these proceedings before the introduction of the
notice to amend is
valid and I am of the opinion that the application against them
should be dismissed on that ground alone. The
proposed amendment
changed the position and records declaratory relief affecting the
third and fourth respondents. In view of my
finding that the
amendment should not be allowed, there is no need to dwell on that
issue.
COSTS
:
[35]
The applicant, relying on
Affordable
Medicines' Trust:
[35]
and
Biowatch
Trust,
[36]
submitted that the
established general principle that in litigation between a private
individual seeking to assert constitutional
rights and a public
entity such as the FSB and the Minister should be applied in the
present proceedings and invited me to conclude
that, if she is
unsuccessful in the application, that each party should bear its own
costs of these proceedings.
[36]
The purpose of a cost award to a successful litigant is
"to
indemnify him for the expense to which he has been put through having
been unjustly compelled to either initiate or defend
litigation
as
the
case
may
be".
[37]
Our Courts have at
regular intervals endorsed the longstanding principles applicable on
cost awards in High Court litigation. The
first principle underlying
the general rule is that awards of costs are in the discretion of the
judicial officer. The second is
that the unsuccessful party must pay.
The second principle is, however, not inflexible and also subject to
the first, and, subject
to a large number of exceptions where a
successful litigant may be deprived of his or her costs. The
circumstances depriving successful
litigants of their costs depend on
"...
circumstances
such
as,
for
example, the conduct of the parties, the conduct of their legal
representatives, whether
a
party
achieves technical success only, the nature of
litigants and the
nature of proceedings".
[38]
In
Biowatch
[39]
the Constitutional Court
held that as a general rule costs should not be awarded against
unsuccessful litigants when they are litigating
against the State in
matters of genuine constitutional import. The
Biowatch
principle
does not only apply to costs orders on merits in constitutional
cases. It also applies to disputes described as ancillary
to the
merits of constitutional disputes. The underlying ratio emphasised in
Biowatch
and
Helen
Suzman Foudation
[40]
was aimed at preventing
litigants who endeavour to vindicate their constitutional rights to
be discouraged by the risk of adverse
cost orders if they lose on the
merits. Those seeking to ventilate important constitutional
principles, should not be discouraged
by the risk of having to pay
the costs of the State adversaries merely because the Court holds
adversely to them.
[41]
Adv
Gauntlett SC pointed out that in
Lawyers
for Human Rights
[42]
the Constitutional Court,
referring to
Biowatch
and
Helen
Suzman Foundation,
stated
as follows:
"This,
of course, does not mean risk-free constitutional litigation. The
Court, in its discretion, might order costs, Biowatch
said, if the
constitutional grounds of attack are frivolous or vexatious
-
or
if the litigant has acted from improper motives or there are other
circumstances that make it in the interest of justice to order
costs.
The High Court controls its process. It does so with
a
measure
of flexibility. So a Court must consider the 'character of the
litigation and [the litigant's] conduct in pursuit of it'
even where
the litigant seeks to assert constitutional rights."
[37]
I have referred to the acrimonious nature of the litigation and the
events that led thereto above. In my view all the parties
to the
litigation (except the Minister) are to blame for the state of
affairs. Having regard to the nature of the employment issues

summarised above, reasonable litigants would have terminated the
litigation. The Minister held a similar view which he expressed

through his tender to the applicant in of his answering affidavit
offering her permission to withdraw her application with impugnity.

In my opinion the application is not one of genuine constitutional
import and the principle stated in
Biowatch
does not apply in
the present case at all and that the costs issue should be resolved
on the general principles referred to above.
[38]
The applicant advanced her campaign to resolve the cancellation issue
with considerable energy and with conviction. Her announcement
of its
existence at the Pension Lawyers' Association meeting from a public
podium, despite previous communication of her intention
to do so to
Mr Tshidi, caused embarrassment to the FSB and those involved in it,
especially Messrs Tshidi and Boyd. The announcement
by those in
search of sensation described it as "a
bomb shell"
and
it led to much animosity that prevailed throughout the period under
consideration. The FSB's endeavours to get rid of the applicant
at
all cost, first by way of a golden hand shake and later by way of a
failed disciplinary process, fuelled the applicant's efforts
to
pursue what she perceives as a quest for justice from which the
general public would benefit. She retaliated with a process
of
suspicion mongering against Mr Tshidi. The FSB chose to deny the
applicant, who was in law an employee of it charged with performing
a
statutory duty, access to the O'Regan report and the KPMG report
which were both produced as a direct consequence of the applicant's

concern. That conduct of the FSB gave rise to the litigation or at
least to part of it. The applicant's conduct was also unreasonable
by
seeking, after her term of office had expired, to amend her papers to
claim relief directly aimed at Messrs Tshidi and Boyd.
The applicant
was also out of place when she expressed her view that she considers
Mr Mort so slight that another entity should
be appointed to
undertake the investigation of the cancellations issue. Adv Maritz SC
sought a punitive costs order against the
applicant on behalf of Mr
Tshidi and Mr Boyd. I do not think that, considering the history of
the matter and the facts summarised
above, that such an order should
be granted.
ORDER
:
I
make the following order:
1. The application for
amendment of the applicant's notice of motion is refused.
2. The application is
dismissed.
3. The first respondent
is ordered to pay the applicant's costs up to and including 1 August
2016, which costs shall include the
costs of two counsel where so
employed;
4. The second, third,
fourth and fifth respondents shall bear their own costs up to and
including 1 August 2016;
5. The applicant shall
pay the costs of the respondents incurred by them from 2 August 2016,
which costs shall include the costs
consequent upon the employment of
two counsel.
_____________________
HF
JACOBS
ACTING
JUDGE OF THE HIGH COURT
PRETORIA
Counsel
for Applicant
:
C
D A Loxton SC
A
Milovanovic
Counsel
for 1st & 2"d Respondents:
W
H Trengove SC
H
Rajah
Counsel
for 3rd & 4th Respondents:
M
Maritz SC
T
Manchu
Counsel
for 5th Respondent:
J
J Gauntlett SC
F
B Pelser
[1]
Act 97 of 1990. Only sections 1, 2, 4-11, 13(1)(a) (insofar as it
pertains to the executive officer), 14, 15, 16(1)(a), (d) and

16(3)-(5), 17-19, 23-25 took effect on 1 October 1990. The other
sections, namely sections 3, 12, 13 (insofar as it had not yet
been
put in operation on 1 October 1990), 16(1)(b), (c), 16(2) & (6),
20-22, 26-29 took effect on April 1991. See Proclamation
175 in
Government
Gazette
12757
of 28 September
1990
and Proclamation 29 in
Government Gazette
13094 of 28 March
1991.
[2]
Section 2 of the FSB Act.
[3]
The fifth respondent in this application. See section 13(1)(a) of
the FSB Act.
[4]
The structure of the FSB and its delegation of authority changed
over the past years but those changes are of no moment in these

proceedings. Until 28 February 2014 the Deputy Registrar of Pension
Funds enjoyed equal status with that of the Registrar of
Pension
Funds. The Deputy Registrar of Pension Funds derived his powers
(original powers) from the
Pension Funds Act. From
1 March 2014 the
Deputy Registrar of Pension Funds no longer enjoy the original
powers, only delegated powers from the Registrar.
[5]
My own italics.
[6]
My own italics.
[7]
Fifth respondent in this application.
[8]
Section 3 of the FSB Act.
[9]
The FSB Act also deals with friendly societies, collective
investment schemes and related industries but those are of no
relevance
in the present proceedings.
[10]
Introduced by Act 22 of 1996.
[11]
Section 7A.
[12]
Non-exempt pension funds submit three actuarial valuations per
annum.
[13]
A process specifically provided for by the provisions of
section 28
of the
Pension Funds Act.
[14
]
Cancellation of pension funds is provided for by
section 27
of the
Pension Funds Act.
[15
]
The term "
orphan
fund
"
is defined in the Financial Services Board's Circular  PF126 to
mean "
a
fund which does not have a properly constituted board of management
as required in terms of
section 7A
of the
Pension Funds Act, Act
24
of 1956 ('the Act’) and/or the Rules of the Fund
... ".
[16]
In the voluminous papers filed of record some of the deponents
referred to the terms "
shell
fund
"
and "
orphan
fund
"
and "
dormant
fund
"
in a different context. I have adopted the reference used by the
applicant in this judgment.
[17]
Record: p 326 par 7.8.
[18]
Dated 2 March 2014.
[19]
Annexure "NCN1" to the founding papers.
[20]
Annexure "NCN2" to the founding papers.
[21]
Mr Mort's letter of appointment was dated 6 April 2016,
approximately four months after the notice of motion was dated.
[22]
Wightman
t/a JW Construction v Headfour (Pty) Ltd & Another
[2008] ZASCA 6
;
2008 (3) SA 371
(SCA) at
[13]
.
[23]
Lombaard
v Droprop CC & Others
2010
(5) SA 1
(SCA) at [26].
[24]
Buffalo
Freight Systems (Ply) Ltd v Crestleigh Trading (Ply) Ltd &
Another
2011
(1) SCA 8 at [19]-[20].
[25]
Mokala
Beleggings & Another v Minister of Rural Development and Land
Reform &
Others
2012 (4) SA 22
(SCA) at [11].
[26]
National
Scrap Metal (Cape Town) (Ply) Ltd v Murray & Roberts Ltd &
Others
2012
(5) SA 300
(SCA) at [17).
[27]
Plascon-Evans
Paints Ltd v Van Riebeeck Paints (Ply) Ltd
1984
(3) SA 623 (A).
[28]
Viking
Pony Africa Pumps v Hydro-tech Systems
2011
(1) SA 327 (CC).
[29]
Bato
Star Fishing v Minister of Environmental Affairs
2004 (4) SA 490 (CC).
[30]
Democratic
Alliance v President of the Republic of South Africa & Others
2013 (1) SA 248
(CC) at
[29) - [30).
[31]
Britannia Beach Estate (Pty) Ltd & Others v Saldanna Bay
Municipality
[2013] ZACC 30
(5 September 2013).
[32]
Sections 182-183 of the Constitution; Economic Freedom Fighters v
Speaker, National Assembly & Others
2016 (3) SA 580
(CC) at
[48]-[56]; Broadcasting Corporation v Democratic Alliance
2016 (2)
SA 522
(SCA); The Public Protector v Mail & Guardian &
Others 2011 (4) SA 420 (SCA).
[33]
BHT
Water Treatment (Ply) Ltd v Leslie
1993
(1) SA 47
0N) at 50G-H.
[34]
University
of Pretoria v South Africa for Abolition of the Vivisection &
Another
2007
(3) SA 395
(0) at 7.
[35]
Affordable
Medicines' Trust & Others v Minister of Health & Another
[2005] ZACC 3
;
2006 (3) SA 247
(CC) at
[139]
.
[36]
Biowatch
Trust v Registrar of Genetic Resources & Another
[2009] ZACC 14
at
[21]
;
2009 (6) SA 232
(CC);
2009 (10) BCLR 1014
CC.
[37]
Texas
Co (SA) Ltd v Cape Town Municipality
1927
AD 467
at 488 quoted by the Constitutional Court in Lawyers for
Human Rights v Minister in the Presidency and Others
[2016] ZACC 45
at
[14]
.
[38]
Ferreira
v Levin N.O.
[1996] ZACC 27
;
1996
(2) SA 621
(CC) quoted in
Lawyers
for Human Rights v Minister in the Presidency and Others
[2016] ZACC 45
at
[13]
.
[39]
Biowatch
Trust v Registrar of Genetic Resources & Another
[2009] ZACC 14
at
[??).
[40]
Helen
Suzman Foundation v President of the Republic of South Africa
[2014] ZACC 32
;
2015 (2)
SA 1
(CC);
2015 (1) BCLR 1
(CC) at paras 36-38.
[41]
Lawyers
for Human Rights v Minister in the Presidency and Others
[2016] ZACC 45
at
[17]
.
[42]
Lawyers
for Human Rights v Minister in the Presidency and Others
[2016] ZACC 45
at
[18]
.