About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: North Gauteng High Court, Pretoria
SAFLII
>>
Databases
>>
South Africa: North Gauteng High Court, Pretoria
>>
2016
>>
[2016] ZAGPPHC 1067
|
|
Mmileng v Government Employees Pension Fund and Others (7397/16) [2016] ZAGPPHC 1067 (15 December 2016)
SAFLII
Note:
Certain
personal/private details of parties or witnesses have been
redacted from this document in compliance with the law
and
SAFLII
Policy
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
DIVISION, PRETORIA
CASE
NUMBER
: 7397/16
15/12/2016
In
the matter between:
MASEGO
EVELINE
MMILENG
Applicant
-and-
GOVERNMENT
EMPLOYEES
First
Respondent
PENSION
FUND
SOUTH
AFRICAN
NATIONAL
Second
Respondent
DEFENCE
FORCE
MINISTER
OF DEFENCE
AND
Third
Respondent
MILITARY
VETERANS
JUDGMENT
De
Kok. AJ
INTRODUCTION
1.
The applicant, a 62 year old pensioner, seeks an order compelling the
first respondent to pay her the balance of her pension
benefits.
2.
The first respondent is the Government Employees Pension Fund.
2.1
It was
established in terms of section 2 of the Government Employees Pension
Law, 1996 ("the Law")
[1]
with effect from 1 May 1996. Its object is
"to
provide the pensions and certain other related benefits
as
determined
in this Law to members and pensioners and their beneficiaries."
[2]
.
2.2
Section
14(1)(a) of the Law provides that:
"A
previous fund shall be discontinued with effect from
a
date
determined in respect of that fund by the Minister" .
Section
14(2) provides:
"All
assets, including any right to claim any amount, and all liabilities,
including any obligation to pay any pension, related
benefit or any
other amount in terms of any law, of
a
previous
fund in respect of which
a
date is
determined under subsection (1), shall with effect from that date
pass to and vest in the Fund.".
In
terms of section 14(5)(d) a
"previous
fund'
includes
the Government Pension Fund of Bophuthatswana
[3]
.
Section 4(3) provides that:
"Any
person
who
immediately before the date determined in terms of section 14(1)(a)
in respect of
a
previous
fund, is
a
member
or pensioner of that fund, shall with
effect from date be a member or pensioner
of the Fund."
2.3 In terms of section
29 of the Law the Board of the first respondent is empowered to make
Rules ("the Rules") in relation
to,
inter alia: "the
payment of benefits from the Fund to or in respect of members on
their retirement, discharge, resignation
or death” .
These
Rules (as amended from time to time) are contained in Schedule 1 to
the Law.
2.4 The first respondent
is a defined benefit Fund. In terms of Rule 14.3.3, as read with Rule
14.2.1, a member who retires after
at least 10 years pensionable
service is entitled to be paid a gratuity and an annuity which are
calculated on the basis of a percentage
of the member's final salary
multiplied by the period of the member's pensionable service.
2.5 Rule 6 provides:
"
The Board is entitled to require satisfactory proof of the right of
any member, pensioner or his or her beneficiaries to
any benefits and
the Fund is not obliged to pay benefits to
a
member, pensioner
or their beneficiaries until such proof has been submitted to the
Board.
3.
The following facts are effectively undisputed:
3.1 On 13 January 198"7
the applicant commenced employment as a clerk in the office of the
Auditor-General of the former Bophuthatswana
government.
3.2 On 1 December 1984
she was transferred to the Bophuthatswana Department of Defence.
3.3 She was absorbed into
the South African National Defence Force during the integration
period of the TBVC states in 1995.
3.4 She retired from her
employment with the second respondent after she reached the age of
sixty years in October 2014.
3.5
When she
approached the first respondent in November 2014 to claim her pension
benefits she was advised that according to the first
respondent's
records her pensionable service had only commenced in 1995 and that
she would have to provide proof to the contrary
[4]
.
3.6 The applicant
approached the second respondent for such proof. Its employees
informed her that, save as set out below, they
could find not find
any information on her profile as kept in the second respondent's
archives. All they could find were:
3.6.1.
A letter dated 11 December 1984 addressed by the Department of the
Auditor-General of Bophuthatswana to the Chief of the
Bophuthatswana
Defence Force. It refers to the transfer of the applicant to the
Defence Force with effect from 1 December 1984
"with
retention of her service status"
and states that
"Her
personal, leave and salary files as well as her staff and leave
records cards go herewith for your records."
3.6.2.
A letter dated 20 December 1996. It is addressed on behalf of the
Commanding General of the Northwest Command to the Chief
of the
Defence Force. It bears the heading
"PENSIOENAANGELEENTHEDE:
9[…]PE
KPL M.E MM/LENG : GP 20
and reads as
follows:
"1.
Aangeheg faks tov bogenoemde lid.
2.
Lid se datum vir pensioengewende diens is verkeerd en moet lees 13
Jan 78.
3.
Die eenheid is verwittig dat die fout tans nie rekenaarmatig
reggestel kan word nie, maar dat dit
so
op haar persoonlike
leer aangebring sal word."
3.6.3. A letter dated 26
March 2010 on behalf of the Chief Director Human Resources Management
of the second respondent in which
it is stated that
"In
accordance with both the DOD and National Treasury's (Pension
Administration) records Ms Mmileng's pensionable service
commenced
wef 1 April 1995'.
3.7 The provision of
these documents did not solve the applicant's predicament. The first
respondent continued to refuse to pay
her in respect of any period
prior to 1995.
3.8 After searching her
home in Mmabatho and her previous residences, the applicant, in about
April 2015, found some old salary
advices. The oldest was dated
September 1989. She also found salary advices for February 1990,
April 1990 and November 1994. All
of these advices were issued by the
Bophuthatswana Government Service. Each reflected her date of
appointment as being 13 January
1978 and each reflected a deduction
from her salary for
"Pension Fund'' .
3.9 After the applicant
supplied these salary advices to the first respondent it agreed to
pay to her pension benefits calculated
on the basis that her
pensionable service commenced in September 1989. It continued to
refuse to pay her any benefit relating to
the period January 1978 to
August 1989.
3.10 This remains the
first respondent's attitude.
THE
ISSUES
4.
It is not in issue that the applicant was, at least for the period of
September 1989 to 1995, a contributing member of a
"previous
fund',
as envisaged in section 4 of the Law. The first respondent
appears to accept that the applicant's pension benefits must be
calculated
with reference also to any period during which she was a
contributing member of the previous fund. It is on this basis that
the
first respondent has in fact paid the applicant's pension benefit
with reference to the period of September 1989 to 1995.
5.
On the affidavits, the only issue is whether the applicant's
pensionable service ought to include the period <>f 13 January
1978 to 31 August 1989. The first respondent contends that the
applicant has not proven that she was a contributing member of the
previous fund during this period and that, in terms of Rule 6, it
could decline to pay her in respect of this period on the basis
that
she had not provided satisfactory proof of this fact.
6.
Heads of argument were delivered on behalf of the applicant on 24 May
2016. The first respondent did not deliver heads
of argument
and the matter was thereafter set down for hearing on 28 November
2016. When the matter was called, Mr Cook, on behalf
of the first
respondent, handed to me heads of argument on behalf of the first
respondent.
7.
In the heads of argument an entirely new defence is advanced. I will
deal with it more fully below, but the defence entails essentially
that the applicant is precluded from the relief sought because she is
limited to a review of the decision not to pay her. No explanation
was offered as to why the heads of argument were not timeously
delivered. Nevertheless, and with the concurrence of Mr Mhlongo,
who
appeared on behalf of the applicant and who wished to avoid any
postponement which would prejudice his client, I agreed to
accept
these heads and to hear the matter on the following day.
8.
I deal below firstly with the defence as set out in the answering
affidavit and thereafter with the defence belatedly raised
in the
heads of argument.
HAS
THE APPLICANT PROVEN THAT SHE WAS A CONTRIBUTING MEMBER OF THE
PREVIOUS FUND AND HAS SHE PROVIDED SATISFACTORY PROOF THEREOF
9.
The applicant alleges that she, from the outset of her employment by
the Government of Bophuthatswana, contributed to the relevant
pension
fund. Her evidence under oath is direct and cannot be disregarded
simply because she has no documentary proof. The first
respondent's
denial of this averment is based only on the fact that it has no
record of the applicant's membership and contributions.
There are
several difficulties with this denial:
9.1
According
to the first respondent it has on record only her contributions from
1996
[5]
. This is easily
explained by the fact that the applicant only became a member of the
first respondent at this time;
9.2 More pertinent to the
enquiry would be the records of the previous fund supplied to the
first respondent when the previous fund's
assets and liabilities and
members were transferred to the first respondent. This issue is not
addressed in the answering affidavit
and it is therefore not clear
whether there was any such a transfer of records;
9.3 The first respondent
appears to accept that its internal records are not an accurate
reflection of the applicant's pensionable
service. If these records
were decisive, the first respondent would not have paid to the
applicant pension benefits in respect
of the period of September 1989
to 1995.
10.
The applicant's averments are supported by the letter of 20 December
1996. In terms of this letter it is unequivocally stated
that the
applicant's pensionable service commenced on 13 January 1978, and
that the computerised records are incorrect. The first
respondent's
response to this letter, in the answering affidavit, is a bare
denial.
11.
In the heads of argument the first respondent takes issue with this
letter on the basis that it is not on a letterhead, that
the
"purported author'
has not deposed to an affidavit
confirming the content, that it is unclear who the document is
addressed to and that the second
respondent has not
"come on
record'
to confirm that this letter was found in the applicant's
profile. These criticisms are cynical in the extreme. The applicant
alleges
that the letter supplied to her by the second respondent.
This allegation is not denied by the first respondent in the
answering
affidavit. It is clear who it is addressed to. There is no
suggestion that the document is forged. I fail to see why it carries
any less weight than the salary advices.
12.
In the circumstances I am satisfied that the applicant has proven, on
a balance of probabilities, that she was a contributing
member of a
previous fund as from 13 January 1978.
13.
The related
issue is whether the first respondent is entitled to refuse to pay
the applicant on the basis that she has not supplied
"sufficient
proof". This phrase must be interpreted in the
context of the Rules as a whole and so as to give
it a commercially
sensible meaning
[6]
.
13.1.
The phrase
ordinarily connotes an objective standard. What would satisfy a
reasonable man?
[7]
The question
is not whether the Board of the first respondent subjectively
considered the proof to be sufficient, but whether the
proof supplied
would satisfy a reasonable man in the position of the Board.
13.2. Inherent in the
objective standard is that it is case specific What constitutes
satisfactory proof will therefore depend on
the facts on each
particular claim for a benefit and, in my view, will necessarily
depend on what proof could reasonably be expected
to be given in any
particular case.
13.3. The applicant
provided the first respondent with: (a) her first- hand account that
she was a contributing member of the previous
fund since 13 January
1978; (b) salary advices which confirm her employment from this date;
and (c) a letter from her employer
reflecting her pensionable/
service to have commenced on 13 January 1978. The letter reflects
that the computerised records are
incorrect. The first respondent has
accepted this to be so, in that it would not have otherwise paid
benefits in respect of the
period of September 1989 to 1995. The
applicant has stated, and it is not disputed, that she can obtain no
further proof from her
current employer. Her former employer no
longer exists (and has ceased to exist for some 2 decades).
13.4. It is entirely
fortuitous that the applicant kept a salary slip dating back to 1989.
She has stated that she could find no
older salary advice. For the
first respondent to state that it will only pay the applicant's claim
if she can produce salary advices
for the period of 13 January 1978
to August 1989 is to demand the impossible from the applicant. No
reasonable man in the position
of the Board would demand this of the
applicant.
13.5. In the
circumstances I conclude that the applicant has produced satisfactory
proof that her pensionable service with the previous
fund commenced
on 13 January 1978.
IS
THE APPLICANT LIMITED TO A REVIEW
14.
It remains to be considered whether the defence belatedly raised in
the heads of argument defeats the applicant's claim to relief.
15.
This defence entails the following submissions:
15.1.
The first
respondent's decision that the applicant has not produced
satisfactory proof of her claim and the decision not to pay
her ("the
decisions")
[8]
constitute
administrative action within the meaning ascribed thereto in the
Promotion of Administrative Justice Act 3 of 2000 ("PAJA)".
15.2.
In terms of
the decision in
MEC
for Health. Eastern Cape v Kirland Investments (Ptv) Ltd
[9]
(
"Kirland"
)
this decision stands until set aside by a competent Court.
15.3. Because the
applicant does not seek a review of the decisions in her application,
the Court
"does not have jurisdiction "
to disregard
the decisions because it has not been called upon to review and set
aside such decisions.
16.
On behalf
of the applicant it was contended that these issues were not raised
in the answering affidavit, that it is trite that
in application
proceedings the affidavits constitute both the evidence and the
pleadings and that it is impermissible for a party
in motion
proceedings to direct the opposite party to one issue and then, in
argument, seek to argue a different issue. In retort
to these
submissions the first respondent relies on the dictum in
CUSA
v Tao Ying Metal lndustries
[10]
to the effect that it always open to rely on a point of law which is
apparent on the papers. I am not entirely convinced that this
principle necessarily applies where, as in this case, the point
relates to the appropriateness of an applicant's choice of remedy
and
where an applicant has proceeded with the litigation on the basis
that such appropriateness is not in issue. I will however
assume in
favour of the first respondent that it is not precluded from raising
this defence.
17.
In assessing this defence it is necessary to have regard to certain
trite principles regarding the nature of the applicant's
claim:
17.1.
The
relationship between a member of a pension Fund, the participating
employer and the Fund is contractual. The Rules constitute
the
contract by which the Fund, the member and the employer are
bound
[11]
.
17.2. The claim which the
applicant advances is for the enforcement of this contract. Her case
is that she is entitled to be paid
her pension benefit on the basis
that her pensionable service commenced on 13 January 1978.
17.3. Her cause of action
is not dependent on any decision which the first respondent may have
made, or not have made. Her contractual
right to payment does not
arise only once the first respondent decides to recognise her claim.
Similarly her contractual right
is not abrogated because the first
respondent decides not to pay her. The first respondent cannot defeat
her contractual right
to payment by relying on the fact that it has
decided not to pay.
18.
If these principles are born in mind it becomes apparent that the
decisions are in fact not administrative action for the purposes
of
PAJA.
18.1. Section 1(a) of
PAJA defines "administrative action" as
"any
decision taken, or any failure to take
a
decision, by
-
(a) an organ of state, when
-...
(ii) exercising
a
public power or performing
a
public function in terms of
any legislation ...
which adversely affects the rights of any
person and which has
a
direct, external legal effect ...".
18.2.
Once it
appreciated that the right which the applicant is seeking to enforce
is a contractual right, it is clear that the first
respondent's
decision not to pay her is not one which adversely affects her
rights. Whilst it may inconvenience and prejudice her,
it does not
detract from her accrued right to payment
[12]
.
At the risk of repetition, if she has a contractual right to payment,
her right remains intact regardless of whether the first
respondent
decides to recognise her right.
18.3.
The nature
of the right which the applicant seeks to enforce also distinguishes
the matter from that in
Government
Employees Pension Fund v Buitendag
[13]
("
Buitendag
").
on which Mr Cook placed exclusive reliance for his submissions that
the decisions constitute administrative action.
18.3.1.
Buitendag
entailed an application by the two major children ("the
children") of a deceased member of the first respondent. They
were born of her first marriage. On her death a gratuity became
payable to her dependants. In ignorance of the existence of the
two
children, the first respondent awarded the gratuity in equal shares
to the deceased's second husband and her stepson. The two
children
then applied to review and set aside this award.
18.3.2. The Rules of the
first respondent do not explicitly provide for the payment of a
gratuity to dependants. It was however
common cause between the
parties - and accepted by the Court as being implied in the Rules -
that such a gratuity was payable to
a member's dependants and that
the first respondent had a discretion to choose which dependants
would receive a gratuity and in
what proportion. It was further
admitted by the first respondent that the two major children were
dependants, as defined in the
Rules, and could therefore have been
considered when the allocation of the gratuity came to be made.
18.3.3.
The Court
held, on the basis of item 23(2)(b) of Schedule 6 to the
Constitution, 1996
[14]
, that
the children had a right to be considered by the Board when it
exercised its discretion as to which dependants should receive
the
gratuity and in what proportions and that a material mistake of fact
rendered the initial award, which did not consider the
existence of
the children, liable to set aside. The Court upheld the decision of
the Court a
quo
to set
aside the award with a direction to the first respondent that the
children be considered as dependants and that the first
respondent
was to exercise its discretion as to how the gratuity should be
allocated.
18.3.4. In Buitendag the
children had no right to payment in terms of the Rules. They did not
assert such a right Such a right would
arise only if the Board, in
its discretion, awarded a gratuity to them.
18.3.5. They did however
have the right to be considered when an award was made. In terms of
the present definition in PAJA the
first respondent's conduct in
awarding the gratuity without taking them into account, infringed (or
"adversely affected”)
their right to be considered.
18.3.6.
In casu
the
applicant's claim to relief is not dependant on the exercise of any
discretion, or the making of any award, by the first respondent.
Her
claim arises from the fact that she is a member whose pensionable
service, for the purposes of the Rules, commenced on 13 January
1978.
19.
In view of
my finding that the decisions are not administrative actions because
they did not adversely affect the applicant's rights,
it is not
strictly speaking necessary to undertake what has been described as
the
"notoriously
difficult
exercise"
[15]
of determining whether the decisions constituted the exercise of a
public power or the performance of a public function. Nevertheless,
and for the sake of completeness, I set out briefly my views on the
matter:
19.1. Although the first
respondent is an organ of state, not every decision taken by it
constitutes
"administrative action".
If it decides
to order cake for a birthday function of one if its staff members
from the local cake shop and then decides not to
pay for the cake,
this decision not to pay would not constitute
"administrative
action".
A decision taken would only constitute
"administrative action"
if it entailed the exercise
of "a
public power'
or the performance of "a
public
function".
19.2.
Relevant
factors include: (a) the relationship of coercion or power that the
actor has in its capacity as a public institution;
.
(b) the impact of the decision on the public; (c) the source
of the power; and (d) whether there is a need for the decision to be
exercised in the public interest
[16]
19.3.
In casu
the
relationship between the applicant and the first respondent is no
different to that between any other pension fund and its members.
The
decision not to pay the applicant affects only her. The manner in
which the decision is to be made is prescribed by the Rules,
coupled
with the fact that the Board stands in a fiduciary position to the
members of the first respondent. The decision does not
admit of
extraneous public interest considerations.
19.4. I would therefore
also conclude, in so far as may be necessary, that the decisions do
not involve the exercise of a public
power or the performance of a
public function.
19.5.
Although
this may seem somewhat circular, the conclusion in paragraph 19.4
above would also entail that the decisions are not decisions
as
envisaged in the definition of
"decision"
in PAJA
(and being, in turn, one of the elements of the definition of an
administrative action). The decision not to pay the applicant
is not
a decision of
"an
administrative nature"
[17]
- it is a decision not to comply with a contractual obligation
20.
Given that the decisions do not constitute administrative action, the
first respondent's reliance on
Kirland
does not arise. I would
only add that
Kirland
is no authority for the proposition that
an applicant who seeks to enforce a contract against an organ of
state is first obliged
to set aside a decision by the organ of state
not to honour the contract.
THE
APPROPRIATE RELIEF
21.
In terms of
her notice of motion the applicant sought relief against the
.
first respondent as well as against the second and third.
[18]
During argument Mr Mhlongo on behalf of the applicant accepted that
the applicant's claim for payment of her pension benefit lies
only
against the first respondent. Mr Mhlongo further accepted that prayer
(1) should reflect that such benefit falls to be calculated
in terms
of the Rules.
22.
The alternative relief sought in terms of prayer (2) does not arise
on the papers, as the first respondent does not contend
that it is
unable to calculate the benefits payable to the applicant in
accordance with the Rules on the basis of the available
information.
23.
As regards
costs, Mr Mhlongo urged me to make a punitive cost order against the
first respondent. In this regard he contended that
the first
respondent ought to be censured for the manner in which it has
treated the applicant as well as for its conduct in the
litigation
(in particular by advancing at the hearing a new defence not relied
upon in the papers). I am mindful of the warning
that a Court should
be careful in using hindsight to conclude that a defence which is
ultimately found to be misconceived was not
one honestly
advanced
[19]
. Accordingly and
save in the limited respect dealt with below, I do not intend to
award punitive costs against the first respondent.
24.
But for the first respondent's failure to timeously file heads of
argument, the matter would have been heard on Monday the 281h
of
November 2016, or would, in advance, have been allocated to a
specific date during the week. To the extent that the fact that
there
had to be two appearances on behalf of the applicant caused
additional costs, the first respondent should bear such costs
on the
attorney and client scale.
ORDER
25.
I make the following order:
25.1. The first
respondent is ordered to pay to the applicant the balance of her
pension benefit, calculated in terms of the Rules
of the first
respondent, and calculated on the basis that the applicant's
pensionable service includes the period of 13 January
1978 to 31
August 1989;
25.2. The first
respondent is ordered to pay the applicant's costs of this
application;
25.3. The first
respondent is ordered to pay the costs of the appearance on 28
November 2016 on an attorney and client scale.
_________________
A
DE KOK
Acting
Judge of the High
Court,
Gauteng Division,
Pretoria
Date
of hearing
: 29 November 2016
Date
of judgment
: 15 December 2016
Appearances
For
applicant: Mr N Mhlongo instructed by Mashamaite MR Attorneys
For
first respondent: Mr Cook instructed by Thipa Denenga Inc c:/o Savage
Jooste & Adams
[1]
Proclamation 21 published in Government Gazette 17135 of 19 April
1996
[2]
Section 3 of the Law
[3]
I will hereinafter refer to this Fund as "the previous fund".
The date determined by the Minister for the discontinuation
of the
previous fund does not appear from the papers, but it will be
apparent from the facts dealt with below that the precise
date is
not relevant in this application.
[4]
The first respondent's version as to what its records show is not
consistent. In the answering affidavit it says, varyingly,
that the records show that the applicant made contributions from
1995 and that the records show that the applicant made contributions
from 1996.
[5]
Or, possibly, 1995 - see note 4 above.
[6]
Ekurhuleni Municipality v Germiston Municipal Retirement Fund
2010
(2) SA 498
(SCA) at par 13
[7]
Herbert Porter & Co CPM Ltd v Johannesburg Stock Exchange
1974
(4)
SA
781
(W) at 789F-790G
[8]
It appears somewhat strained to refer to two decisions, when the
first "decision" is essentially simply the motivation
for
the decision not to pay. do not however consider that anything turns
on this.
[9]
2014 (3) SA 481 (CC)
[10]
[2008] ZACC 15
;
2009 (2) SA 204
(CC) at par 68
[11]
Ekurhuleni Municipality. supra note 6 and City of Johannesburg v
South African Local Authorities Pension Fund (2015) ILJ 1439
(SCA)
at par 4
[12]
See also Competition Commission of SA v Telkom SA Ltd
[2010] All SA
433
(SCA) at par 10
[13]
[2007] 1 All SA 445 (SCA)
[14]
PAJA had not yet come into operation and sections 33(1) and (2) of
the Constitution thus had to be read as encompassing the right,
inter alia, to "lawful administrative action where any of their
rights or interests is affected or threatened" .
[15]
The description is that of Langa CJ in Chirwa v Transnet Ltd
[2007] ZACC 23
;
2008
(4) SA 367
(CC) at par 186.
[16]
Chirwa supra note 15 at par 187
[17]
The decisions do not appear to fall within paragraphs (a) to (f) of
the definition and would therefore have to fall within the
general
definition or paragraph (g) - both of which refer to the
"administrative nature" of the action.
[18]
The second and third respondents delivered a notice of intention to
oppose the application, but did not file answering affidavits,
and
have played no further part ii] the proceedings.
[19]
AA Alloy Foundry (Ply) Ltd v Titaco Projects (Pty) Ltd
2000 (1) SA
638
(SCA) at par 20