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[2014] ZAFSHC 160
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South African Municipal Workers Union National Provident Fund v Dihlabeng Local Municipality and Another (3463/2013) [2014] ZAFSHC 160 (11 September 2014)
IN
THE HIGH COURT OF SOUTH AFRICA
FREE
STATE DIVISION, BLOEMFONTEIN
Case
No.: 3463/2013
In
the matter between:
THE
SOUTH AFRICAN MUNICIPAL
WORKERS
UNION NATIONAL
PROVIDENT
FUND
…............................................................................................................
Applicant
and
DIHLABENG
LOCAL MUNICIPALITY
…............................................................
First
Respondent
MUNICIPAL
EMPLOYEES
PENSION
FUND
…........................................................................................................
2
nd
Respondent
CORAM:
LEKALE, J
HEARD
ON:
28 AUGUST 2014
JUDGMENT
BY:
LEKALE, J
DELIVERED
ON:
11 SEPTEMBER 2014
INTRODUCTION
AND BACKGROUND:
[1]
This is a consolidated hearing of the first respondent’s (the
respondent) condonation application and the applicant’s
application in terms of Rule 30 of the Uniform Rules (the Rules).
For the sake of convenience the parties are referred to
as in the
main application. No relief is sought against the second
respondent in these proceedings and it, as such, filed
no papers
herein. It is only involved in the main application between the
parties following its successful application for
intervention.
[2]
On 27 August 2013 the applicant launched an application(the main
application) against the respondent in which it seeks an order
compelling the latter, in its, the respondent, capacity as the
employer participating in the applicant, to furnish certain
information
relating to its employees and to pay an amount of R2 370
800.81 and interest thereon to it as pension contributions in respect
of the employees it dismissed on 31 July 2009 and re-employed or
reinstated in August 2009 within two days of the order sought.
[3]
The respondent filed a notice to oppose the application in question
and, further, requested documents and information in terms
of Rule
35(12) of the Rules. After receipt of the documents and
information requested, the respondent failed to file its
answering
affidavit timeously and instead, filed third party notice in terms of
Rule 13 of the Rules after close of “pleadings”
on 19
March 2014 without the leave of the court having been sought and
acquired. It eventually filed its answering papers
on 27 March
2014.
[4]
The applicant, in the light of,
inter
alia
, the preceding, directed a notice
in terms of Rule 30(2)(b) of the Rules to the respondent advising it
of its intention to have
the third party notice set aside on the
grounds that it was irregular and defective and, further, affording
the respondent an opportunity
to remove the cause of its complaint.
[5]
The respondent declined to comply with the Rule 30(2)(b) notice,
whereupon, the applicant launched Rule 30(1) proceedings to
set the
third party notice aside. On its part the respondent filed an
application for condonation of late delivery of its
answering papers
in terms of Rule 27 of the Rules after attempting, unsuccessfully, to
secure the applicant’s consent to
condonation. The
applicant expressly withheld consent while at the same time
indicating that it did not oppose the condonation
application and
only desired the decision to come from the court.
[6]
The respondent, further, applied successfully for consolidation of
the condonation application and the Rule 30 application.
CONDONATION
APPLICATION
[7]
The parties were effectively
ad idem
at the commencement of the hearing that good cause existed for
condonation of the late delivery of the respondent’s answering
papers. A perusal of the relevant papers confirmed their view
in that regard and, as such, I proceeded to condone the delay
involved. The aforegoing, thus, rendered it unnecessary for the
respondent to require leave from the court to file third
party
notices. This in turn impacted on the Rule 30 application in
that it limited the dispute between the parties insofar
as the
applicant’s cause for complaint relating to absence of leave of
court on the part of the respondent was removed.
RULE
30 APPLICATION
[8]
In its answering affidavit in the main application and founding
affidavit in the third party proceedings the respondent effectively
contends that, in as far as the applicant relies on the provisions of
section 13A(1) of the Pension Funds Act 24 of 1956 (the PFA)
and Rule
3.2.1 of its (applicant) rules in the main application, the applicant
is not entitled to the information it seeks as well
as the amount of
money it claims because the legislative provision in question and the
relevant rule are unconstitutional and should
be struck down and
amended. The respondent, further, contends that some of the
employees in respect of whom the applicant
seeks pension
contributions were, in fact, re-employed as opposed to being
reinstated and, as such, were not the applicant’s
members
between the dismissal date and the date of their re-employment.
[9]
On its part the applicant contends that the third party notice, as
filed by the respondent, constitutes an irregular step because
no
question or issue in the main application is substantially the same
as a question or issue which has arisen or will arise between
the
respondent and the third parties.
ISSUES
IN DISPUTE
[10]
The parties are at variance on whether or not the following issues or
questions, which have arisen in the main application,
are
substantially the same as questions or issues which have arisen or
will arise between the respondent and the third parties:
10.1
whether or not the 74 employees of the respondent who were dismissed
from employment with effect from 31 July 2009 were reinstated
or
re-employed when they physically resumed their services with the
respondent in August 2009. Put differently, whether or not
the
determination of the Pension Funds Adjudicator (the Adjudicator) in a
dispute between the relevant employees and the applicant
is binding
on the respondent.
10.2
whether or not section 13A(1) of PFA and Rule 3.2.1 of the
applicant’s rules are unenforceable and unconstitutional;
10.3
whether or not the above questions will arise in a claim for unjust
enrichment which the respondent intends to pursue, if necessary,
against the third parties as employees and/or pension funds.
CONTENTIONS
BY THE PARTIES
[11]
Mr Van der Berg, for the applicant, eloquently points out that the
constitutional challenges which the respondent levels against
legislative provisions and rules in the third party notice have not
arisen between the parties in the main application and that
such a
notice does not, as such, comply with either of the requirements for
third party notices set out in Rule 30(1) of the Rules.
In his
view, the respondent’s intended enrichment claim
is
stillborn insofar as it is not alleged, in the respondent’s
relevant papers, that there was any transfer of money from
it to any
of the employees who are, according to the respondent, members of
other pension funds. The tacit agreement alleged
by the
respondent to form the basis of the alleged enrichment does not
appear to exist. The applicant relies, in the main
application,
at the determination of the Adjudicator which found the relevant
employees of the respondent to have been reinstated
as opposed to
having been re-employed and not on the constitutionality of any
legislative provisions or Rule 3 of its rules or
on the moratorium
contained in the collective agreement of the South African Local
Government Bargaining Council (SALGBC).
[12]
Mr Steyn painstakingly submits, for the respondent, that insofar as
the applicant claims information and pension contributions
from the
respondent its right to do so arises from the provisions of section
3A(1) of the PFA read with Rule 3.2.1 of its rules.
The
constitutional challenge against such legislative provision and/or
the applicant’s rules features in both the main application
and
the third party notice. The Adjudicator’s determination
is not binding on the respondent according to him, because
the
respondent was not a party to the proceedings before the
adjudicator. In his view, should the respondent be barred from
joining the issues and the third parties in the third party
proceedings, the real risk is created that the courts may make
conflicting
decisions on the same issues resulting in injustice to
the respondent.
APPLICABLE
LAW AND PRINCIPLES
[13]
The parties are correctly in agreement that Rule 13 of the Rules
seeks to enable a litigant to avoid multiplicity of actions
relating
to the same subject matter.
(See:
Gross v Commercial Union Assurance Co
Ltd and Another
1974 (1) SA 630
(A)
at 634F.)
[14]
As Mr Van der Berg correctly points out, the basis for a joinder in
terms of Rule 13(1)(b) of the Rules is that the questions
or issues
in the main action are substantially the same as questions or issues
between the defendant and third parties.
(See:
Jaffit v Garlicke and Bousfield Inc
(PFK) (Durban Inc and Others)
2012
(2) SA 562
(KZP) at 566 [22].)
[15]
Mr Steyn correctly reiterates that Rule 13(1)(b) of the Rules does
not require all questions and issues to be similar or substantially
the same. The purpose is broadly the same as that of
consolidation of actions.
(See:
IPF Nominees (Pty) Ltd v Nedcor Bank
Ltd (Basfour 130 (Pty) Ltd, Third Party)
2002 (5) SA 101
(W).)
APPLICATION
OF LEGAL PRINCIPLES AND FINDINGS
[16]
The respondent expressly relies on Rule 13(1)(b) of the Rules in the
third party proceedings and, effectively, contends that
one or more
issues or questions are common to the main application and the third
party proceedings.
[17]
It is common cause between the parties that the applicant,
effectively, relies,
inter alia
,
on the provisions of section 13A of the PFA in its claim against the
respondent. The preceding is apparent
ex
facie
the applicant’s heads of
argument and founding affidavit in the main application. On its
part, the respondent implicates
and assails the same legislative
provision in the third party notice contending that, to the extent
that the rules of the applicant
and the moratorium imposed on
transfer between pension funds prohibit employees to terminate their
membership of the applicant
to join other registered pension funds,
they are unenforceable or invalid for being against public policy or
for being inconsistent
with section 10 and/or 18 of the Constitution
of the Republic of South Africa.
[18]
The applicant, further, relies on the determination of the
Adjudicator to the effect that the relevant employees of the
respondent
were reinstated and, as such, in law never lost their
membership of the applicant in its claim for contributions. In
the
third part proceedings the respondent holds that the employees in
question were re-employed as opposed to being reinstated and
effectively denies being bound by the relevant determination of the
Adjudicator.
[19]
As Mr Steyn submits, the question as to the interpretation of the
relevant settlement agreement leading to the resumption of
duties by
the relevant employees arises both in the main application and the
third party proceedings although the applicant maintains
that it
simply relies on the Adjudicator’s determination in the main
application and it does not seek any interpretation
from the court.
The issue of interpretation is effectively raised by the respondent
both in the main application and the
third party proceedings.
[20]
The applicant effectively invites the court to assess the prospects
of success of the respondent’s unjust enrichment
claim against
the third parties. I am, however, not legally armed to wrestle
with that issue sitting as I am in the instant
proceedings, with my
task limited to determining if the issue of unjust enrichment is
common to the main application and the third
party proceedings.
Whether or not such a claim is stillborn, as submitted for the
applicant, falls to be determined by the
court hearing such a claim.
In my view the claim in question raises questions which have arisen
in the main application relating
to,
inter
alia
, constitutionality of legal
provisions and rules.
[21]
The third party notice in the instant matter is, thus, a regular step
in the proceedings.
COSTS
[22]
On 15 May 2014 the main application was postponed with costs being
directed to be in the cause. The parties invited me
to decide
the question of the costs in question, but I declined opining that
the court hearing the main application would be better
positioned to
deal with the same.
[23]
The respondent, further, argued for an order directing the applicant
to pay the costs in the condonation application.
Mr Van der
Berg, however, correctly pointed out that the applicant did not
oppose the application in question and that the respondent,
in fact,
moved, in its condonation application, for costs in the event of the
same being opposed.
[24]
In the Rule 30 application the parties are effectively
ad idem
that costs should follow the event.
ORDER
[25]
The late delivery of the first respondent’s answering
affidavits in the main application is condoned.
[26]
The Rule 30 application is dismissed with costs.
______________
L.
J. LEKALE, J
On behalf of
applicant: Adv. P. Van der Berg
With
him:
Adv.
S Khumalo
Instructed
by:
McIntyre
& Van der Post
BLOEMFONTEIN
On
behalf of first respondent: Adv H.H. Steyn
Instructed
by:
Symington
& De Kok
BLOEMFONTEIN
On behalf of second
respondent: Attorney B. Jones
Instructed
by:
Honey
Attorneys
BLOEMFONTEIN