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[2006] ZASCA 166
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Government Employees Pension Fund Provincial Government of Gauteng v Buitendag and Others (550/05) [2006] ZASCA 166; [2007] 1 All SA 445 (SCA); 2007 (4) SA 2 (SCA) (27 September 2006)
Links to summary
THE SUPREME COURT OF
APPEAL
OF SOUTH AFRICA
Case number : 550/05
Reportable
In
the matter between :
THE
GOVERNMENT EMPLOYEES PENSION FUND FIRST APPELLANT
PROVINCIAL
GOVERNMENT OF GAUTENG SECOND APPELLANT
and
ROUAN BUITENDAG FIRST RESPONDENT
CHRISTIAAN JACOBUS BUITENDAG SECOND RESPONDENT
YOLANDA NELL THIRD RESPONDENT
CORAM : HARMS, ZULMAN, CONRADIE, CLOETE
et
PONNAN JJA
HEARD : 7 SEPTEMBER 2006
DELIVERED : 27 SEPTEMBER 2006
Summary: Government Employees Pension Fund : Board
has a discretion to decide which
‘
dependants’ shall be paid the gratuity
payable on the death of a deceased member and in
what proportions; decision to award the gratuity to
the husband and/or stepson of the
deceased member set aside on review where board
ignorant of the existence of major children
of the deceased member who qualified as ‘dependants’;
the obligation on an employer to
provide information to the Fund defined.
Neutral citation: This judgment may be referred to as
Government Employees Pension Fund v
Buitendag [2006] SCA 121 (RSA).
_________________________________________________________________________________
JUDGMENT
CLOETE JA
/
CLOETE JA:
[1] The bone of contention in this matter is a gratuity
of R232 323,96, which became payable as a result of the death of Mrs
Marie-Louise
Oosthuizen (‘the deceased’). The natural
adult children of the deceased by her first marriage (‘the
children’)
were the applicants in the court
a
quo
and are the respondents on appeal. The
Government Employees Pension Fund (‘the Fund’), the body
established by s 2 of
the Government Employees Pension Law, 1996
1
(‘the Law’), was the first respondent in the court
a
quo
and is the first appellant on appeal. The
Provincial Government of Gauteng (‘the Provincial Government’)
was the second
respondent in the court
a quo
and is the second appellant on appeal. The third respondent in the
court
a quo
was the
deceased’s husband, Mr N Oosthuizen (‘the husband’).
The fourth respondent in the court
a quo
was Mr C M Oosthuizen, the husband’s son by a previous marriage
and therefore the deceased’s stepson (‘the stepson’)
who was born on 17 January 1980.
[2] The deceased was employed by the Provincial
Government and was a member of the Fund. When she died, the gratuity
became payable.
2
On 20 April 2000 the Board
3
of the Fund, acting on information supplied by the Provincial
Government, awarded the gratuity to the husband, or to the husband
and the stepson in equal shares (it is not clear what the position
was). When it made the award, the Fund was unaware of the existence
of the children. The children brought motion proceedings in which
they claimed an order reviewing and setting the decision of the
Board
aside; and in the alternative, damages from the Provincial Government
equal to one quarter or one fifth of the gratuity on
the basis that
the Provincial Government had negligently failed to inform the Fund
of their existence.
[3] Despite the relief being couched in the alternative,
the court
a quo
(R
Claassen J) granted relief against both the Fund and the Provincial
Government. The award was set aside with the following directions
to
the Fund:
‘
2.2.1 [The children] are to be considered as
dependants of the deceased.
The relationship between the deceased and the
[stepson] regarding her duty to maintain the
[stepson] is to be investigated; and thereafter
[The Fund] is to exercise its discretion as to how
the gratuity should be allocated.’
The order then went on:
‘
3. Any amount payable to [the children] in terms
of [the Fund’s decision] under paragraph 2 above shall be paid
by [the Provincial
Government] to the [children].
4. [The Provincial Government] is to pay the costs of
this application.’
The Fund and the Provincial Government were both granted
leave to appeal to this court by the court
a
quo
.
[4] Before dealing with the contentions of the Fund and
the Provincial Government on appeal (the children delivered heads of
argument
but did not appear for financial reasons) it is necessary to
analyse the relevant provisions of the Law and the Rules (which
comprise
Schedule 1 to the Law). The short title of the Law states
its purpose as follows:
‘
To make provision for the payment of pensions and
certain other benefits to persons in the employment of the
Government, certain bodies
and institutions, and to the dependants or
nominees of such persons; to repeal certain laws, and to provide for
matters incidental
thereto.’
Section 3 of the Law reads:
‘
The object of the Fund shall be to provide the
pensions and certain other related benefits as determined in this Law
to members and
pensioners and their beneficiaries.’
The problem is that neither the Law nor the Rules
explicitly provide for the payment of a gratuity to the dependants of
a deceased
member.
4
Section 22 of the Law provides:
‘
22.1 If a gratuity is payable on the death of any
member to the dependants of such a member or to his or her estate,
that member may,
on the prescribed form and subject to the prescribed
conditions, notify the Board of his or her wish that the said
gratuity be paid
on his or her death to the beneficiaries mentioned
in that form and be divided among such beneficiaries in the
proportion mentioned
in that
form.
22.2 Notwithstanding anything to the contrary in any law
contained, the Board may on the death of a member who so notified the
Board
pay at its discretion the gratuity concerned in accordance with
the member’s wish.’
Neither this section, nor any other section of the Law,
explicitly confers any rights on dependants. Rule 14.5.2 provides:
‘
If a member with at least ten years’
pensionable service dies, a gratuity shall be paid….’
and then the basis of the calculation of the gratuity is
set out. The identity of the recipient is not.
[5] A ‘dependant’ is defined in s 1 of the
Law as follows:
‘
dependant, in relation to a member or a
pensioner, means─
(a) any person in respect of whom the member or
pensioner is legally liable for maintenance;
(b) any person in respect of whom the member or
pensioner is not legally liable for maintenance, if such a person─
(i) was, in the opinion of the Board at the time moment
5
of the death of the member
or pensioner in fact dependent upon such member or
pensioner for maintenance;
(ii) is the spouse of the member or pensioner, including
a party to a customary union
according to indigenous law and custom, or to a union
recognised as a marriage under the tenets of any religion; or
(c) a posthumous child of the member or pensioner; and
(d) a person in respect of whom the member or pensioner
would have been legally liable for maintenance had that person been a
minor.’
There is, however, no order of precedence amongst the
dependants in the definition section or in any other section, nor is
any general
discretion explicitly conferred on the Board by any
provision of the Law or Rules as to the award of a gratuity where
there is more
than one dependant. By way of contrast, where there is
more than one spouse, Rule 18.4 provides in regard to a spouse’s
pension:
‘
If a deceased member or pensioner leaves behind
more than one spouse, the Board decides to which of them and, if to
more than one,
in which ratio the spouse’s pension shall be
paid: Provided that such ratio shall not be changed thereafter.’
[6] It was nevertheless common cause between the
children and the Fund that the Board has a discretion to choose which
dependants
will receive a gratuity and in what proportions. It seems
to me that, by necessary implication, this must be so. I say this for
the
following reasons. If a gratuity cannot be paid to a dependant,
it will have to fall into the deceased member’s estate. But
the
stated purpose of the Law is to benefit inter alia dependants of a
member ─ not his or her estate. In addition, in terms
of s 28,
6
a gratuity payable to a dependant is deemed not to be property in the
estate of the member and is accordingly protected from estate
duty.
Furthermore, s 22.1 presupposes that a gratuity may be payable to
dependants of a member; and if the Board has a discretion
to override
the express wishes of a member contained in a nomination, as it does
in terms of that section, it would be logical for
it to have a
discretion to determine which dependants shall benefit where no
nomination has been made. And then finally, the legislation
which
preceded the Law conferred, and the Pension Funds Act
7
confers, a wide discretion of the nature sought to be implied. The
legislation which preceded the Law comprises the Government Service
Pension Act
8
and the Regulations made thereunder.
9
Section 1 of that Act defined who a ‘dependant’ was in
relation to any member or any person entitled to an annuity or
benefits.
10
Regulation 14(2) provided:
‘
If a member who has completed at least 10 years’
pensionable service dies, there shall be paid to the dependants of
the member
designated by the Director-General or, if no dependants
are so designated, to his estate, a gratuity . . .’
Section 37C(1) of the Pension Funds Act
11
provides:
‘
(1) Notwithstanding anything to the contrary
contained in any law or in the rules of a registered fund, any
benefit payable by such
a fund upon the death of a member, shall,
subject to a pledge in accordance with section 19(5)(b)(i) and
subject to the provisions
of section 37A(3) and 37D, not form part of
the assets in the estate of such a member, but shall be dealt with in
the following manner:
(a) If the fund within twelve months of the death of the
member becomes aware of or traces a dependant or dependants of the
member,
the benefit shall be paid to such dependant or, as may be
deemed equitable by the board, to one of such dependants or in
proportions
to some of or all such dependants.’
[7] The Provincial Government contended that the
children are not ‘dependants’ as defined in the Law. Ms
Regina Kgasi,
the deponent to the affidavits delivered on behalf of
the Provincial Government, said in reply to Ms Scheepers who deposed
to the
affidavits delivered on behalf of the Fund, that:
‘
Ms Scheepers argues in this paragraph that the
Applicants are major children of the deceased and that they are
therefore “
dependants
”
of the deceased. I dispute the legal correctness of this argument in
view of the evidence that none of the Applicants were
financially
dependent on the deceased at the time of her death.’
Counsel representing the Provincial Government put
forward submissions in support of this contention in the heads of
argument. The
submissions are untenable. They amount to this: that in
the case of children, paragraph (a) of the definition must be
confined to
minors, and paragraph (d) must be interpreted as relating
to major children who are not self-supporting. In that way, the
written
submission proceeded, the common law requirement that a
dependant must be in need of support to qualify for support, is
preserved:
a minor child who is self-supporting could not fall under
paragraph (a) and a major child who is self-supporting would not fall
under
paragraph (d). But there is no warrant for limiting the
provisions of either paragraph (a) or paragraph (d), which are in
clear terms.
Nor, given the purpose behind the law, is there any
reason for excluding major children who are self-supporting: as I
have already
pointed out, the purpose of the law is to benefit
‘dependants’, not the member’s estate and there
will be many
cases where a member has no ‘dependants’ as
contemplated in paragraphs (a) to (c) of the definition. And why, it
may
be asked, should the Law be interpreted as favouring a spouse for
whom (by definition)
12
the member is not legally liable for maintenance, and who may be in
receipt of a spouse’s pension, at the expense of the major
children of the member?
[8] I therefore conclude that the children were
‘dependants’ and were entitled to be considered by the
Board of the Fund
when it exercised the discretion as to which
dependants should receive the gratuity, and in what proportions. The
next question is
whether the fact that their existence was unknown to
the Board when it exercised this discretion, entitles a court to set
the Board’s
decision aside.
[9] When the Board’s decision to allocate the
gratuity was made, the
Promotion of Administrative Justice Act 3 of
2000
had not yet come into operation. Accordingly, any rights in the
children to have that decision set aside must be sought in item
23(2)(b)
of Schedule 6 to the 1996 Constitution, which provided that
ss 31(1) and (2) of the Constitution had to be read as follows:
‘
Every person has the right to ─
(a) lawful administrative action where any of their
rights or interests is affected or threatened;
(b) procedurally fair administrative action where any of
their rights or legitimate expectations is affected or threatened;
(c) be furnished with reasons in writing for
administrative action which affects any of their rights or interests
unless the reasons
for that action have been made public; and
(d) administrative action which is justifiable in
relation to the reasons given for it where any of their rights is
affected or threatened.’
The crucial phrase for present purposes is ‘lawful
administrative action’.
[10] The Fund ─ correctly ─ admitted that
the children were dependants, as defined in the Law, and could have
been considered
when the allocation of the gratuity came to be made.
Counsel for the Fund made two submissions on why the Board’s
decision
should not be set aside. The first was that in accordance
with the policy of the Board the children would not have received
anything
anyway. But that allegation appears nowhere in the answering
affidavit, supplementary affidavit or further supplementary affidavit
delivered on behalf of the Fund. All that Ms Scheepers, the deponent
to these affidavits, said in the supplementary affidavit, almost
in
passing, was:
‘
With regard to dependants it is the practice of
the Fund administration that regard is had to actual financial
dependency. With regard
to major children it is required that they
should be registered students.’
These statements do not support counsel’s
submission ─ in particular, it is not explained how ‘regard’
is
had to actual financial dependency, nor is it stated unequivocally
what happens if the ‘requirement’ that major children
be
registered students is not met. Nor is there any indication of what
the practice of the Fund is where all dependants are self-supporting.
If it was the Fund’s contention that the children would have
received nothing, I would have expected a clear statement to that
effect in the answering affidavit.
[11] The second submission by counsel for the Fund was
that the decision of the Board was unassailable because it was taken
on the
facts then available to it. The Fund blamed the Provincial
Government for not providing it with the full facts, and the
Provincial
Government blamed the Fund for not making proper inquiries
from third parties. This dispute is irrelevant in the context of the
application
for review by the children (although I shall have to
return to it when considering the question of costs). The fact is
that the Board
was ignorant of the existence of the children when it
made the allocation; and this was obviously a material fact.
[12] In
Pepcor Retirement Fund v
Financial Services Board
13
this court said:
‘
[47] … [A] material mistake of fact should
be a basis upon which a Court can review an administrative decision.
If legislation
has empowered a functionary to make a decision, in the
public interest, the decision should be made on the material facts
which should
have been available for the decision properly to be
made. And if a decision has been made in ignorance of facts material
to the decision
and which therefore should have been before the
functionary, the decision should (subject to what is said in para
[10] above) be
reviewable at the suit of,
inter
alios
, the functionary who made it ─
even although the functionary may have been guilty of negligence and
even where a person who
is not guilty of fraudulent conduct has
benefited by the decision. The doctrine of legality which was the
basis of the decisions
in
Fedsure
,
14
Sarfu
15
and
Pharmaceutical Manufacturers
16
requires that the power conferred on a functionary to make decisions
in the public interest, should be exercised properly, i e on
the
basis of the true facts; it should not be confined to cases where the
common law would categorise the decision as
ultra
vires
.’
17
This court went on in
Pepcor
to give the following warning (in para 48):
‘
Recognition of material mistake of fact as a
potential ground of review obviously has its dangers. It should not
be permitted to be
misused in such a way as to blur, far less
eliminate, the fundamental distinction in our law between two
distinct forms of relief:
appeal and review. For example, where both
the power to determine what facts are relevant to the making of a
decision, and the power
to determine whether or not they exist, has
been entrusted to a particular functionary (be it a person or a
body of persons), it would not be possible to review and
set aside its decision merely because the reviewing Court considers
that
the functionary was mistaken either in its assessment of what
facts were relevant, or in concluding that the facts exist. If it
were,
there would be no point in preserving the time-honoured and
socially necessary separate and distinct forms of relief which the
remedies
of appeal and review provide.’
The limits of the principle set out in Pepcor,
particularly in view of the warning contained in that decision, have
yet to be defined
by the courts; but it is instructive to have regard
to the decisions of this court where the principle has been applied.
In
Pepcor
,
18
the decision maker would not have made the decision had he known of
the true facts; in
Bullock
,
19
the whole foundation of the decision was the incorrect advice given
to the decision maker; and in
Oudekraal
20
the fact not known to the decision maker (or not taken into account
by him) was obviously of cardinal importance to the decision
he was
called upon to make.
[13] The approach which must be followed in deciding
whether the decision of the Board should be set aside, was set out in
Pepcor
as follows:
‘
[49] Whether a review should succeed in a matter
such as the present will depend on a consideration of the public
interest in having
the decision corrected and other factors, and in
particular, the interests of the person in whose favour a decision
has been made.
Ultimately, a value judgment, balancing all the
relevant factors, will be required.’
[14] I turn to consider the factors relevant in the
present case. I shall deal with the public interest; the position of
the children,
the husband and the stepson; and finally, the interests
of the Fund. The fund has some 1,2 million members and 400 000
pensioners.
It is in the public interest that decisions of the Board
in relation to the administration of the Fund should be properly
taken on
the facts material to the decision: if that were not so,
manifest injustices would go uncorrected. It is in the interests of
the
children that they be considered, as they are entitled to be,
when the gratuity earned by their late mother is allocated. Nor were
they in any way responsible for misleading the Board. A letter dated
17 November 1999 was sent to the Provincial Government by an
insurance broker representing the deceased’s executrix, who was
one of the children. In the letter the broker asked for details
of
‘the amount payable as a death benefit from the deceased’s
retirement fund’ and ‘the name of the person
to whom the
death benefit is payable.’ A copy of the letter was forwarded
to the Fund by Ms Kgasi without acknowledgement or
reply to the
broker who wrote it. The consequence was that the children remained
unaware of the existence of the Fund. Should the
Board alter the
allocation already made, the husband (and the stepson, if part of the
gratuity was paid to the husband on his behalf)
will have to return
what has been overpaid. But that is no reason to deprive the children
of the right to be considered for payment
of a portion of the
gratuity. Both the husband and the stepson were joined as respondents
in the court
a quo
and
neither suggested that he would suffer any particular prejudice were
the award to be altered. If the allocation is allowed to
stand, the
Fund will be prejudiced. Such prejudice consists in the Board not
having had an opportunity to evaluate all the facts
material to its
decision, with the result that the Board’s function was
compromised. The Fund can recover any overpayment of
the gratuity
from the husband by deducting it from the widower’s pension
which it is currently paying him.
21
There is no evidence to suggest that the Fund could not recover any
overpayment from either the husband or the stepson; but if there
is a
shortfall for this reason, the Fund can pursue whatever remedies it
has against the Provincial Government. All in all, it would
in my
view be a miscarriage of justice if the decision of the Board were
not set aside.
[15] I therefore conclude that the appeal by the Fund
must be dismissed. There is however a problem with paragraph 2.2.2 of
the order
in the court
a quo
, quoted above. The order requires
the ‘relationship between the deceased and the [stepson]
regarding her duty to maintain [him]’
to be investigated. But
no question of a ‘duty to maintain’ arises. The stepson
qualifies to be considered as a dependant
if he was in fact dependent
on the deceased at the time of her death even although she had no
duty to maintain him. This paragraph
in the order must accordingly be
deleted. If it is uncertain whether the stepson was in fact dependent
on the deceased at the time
of her death, it is for the Provincial
Government to ascertain the facts for the reasons appearing in paras
[18] to [20] below.
[16] I turn to consider the appeal by the Provincial
Government. I do not propose examining all the issues which it
raises. It can
be disposed of quite simply. The claim against the
Provincial Government was obviously brought on the basis that if the
decision
of the Fund stood, the children would suffer damages in the
amount of the gratuity they would have received had the Provincial
Government
informed the Fund of their existence. But once the Fund is
free to make a new allocation, that basis falls away. We were
informed
by counsel who appeared at the hearing of the application in
the court
a quo
that the children’s case against the
Provincial Government was presented as the notice of motion
foreshadowed would be ─
in the alternative. As I have already
said, if an amount is now awarded to the children or any of them, it
is for the Fund to recover
the overpayment from the person(s) who
received it (the husband and/or the stepson); and if the Fund cannot
do so, it can pursue
whatever remedies it has against the Provincial
Government. There was simply no foundation for the order of the court
a quo
directing the Provincial Government to pay any amount
allocated by the Fund, to the children. The appeal by the Provincial
Government
against paragraph 4 of the order of the court
a quo
must accordingly succeed.
[17] That brings me to the question of costs. In the
appeal by the Fund, there is no reason why the costs should not
follow the result.
The Provincial Government did not ask that the
children should be ordered to pay its costs of appeal, but did appeal
against the
order directing it to pay the costs of the proceedings in
the court
a quo
. The Fund asked that the costs in the court
a
quo
should be paid by the Provincial Government, on the basis
that it was the fault of the Provincial Government that the full
information
necessary for the exercise of the Board’s direction
to award the gratuity was not before the Board. The Provincial
Government,
as I have said, denied that it had this obligation. It is
desirable that the relationship between the Fund and the Provincial
Government
and their rights and obligations
inter se
be dealt
with in a little detail, as these aspects were the subject matter of
several affidavits and allegations verging on the acrimonious.
[18] The Board can require any employer, including the
Provincial Government, to provide it with information in terms of s
7(3) of
the Law, which provides (to the extent relevant):
‘
The Board may, with a view to the effective and
efficient administration of the Fund, determine the nature, form,
manner in which
. . . the employer shall in respect of members in its
employment, perform any act pertaining to the pension interests of
members
. . . .’
The information required by the Board when a gratuity is
claimed, has to be set out in Form Z102A. That form has to be
completed and
signed on behalf of the employer. Two signatures are
required, one of which has to be that of an assistant director or
person of
equal rank. Paragraph 23(a) calls for particulars of
dependants, as follows (the copies of the form in the record are in
Afrikaans,
which I have translated):
‘
Particulars of dependants (only in cases of
retirement or death). If no dependants, state “none”.
Name Initials Relationship Type of
dependant eg student Birth date’.
Since 1996 there has been a manual (now in its third
edition) prepared by the Fund and given to employers, which explains
how the
form is to be completed. The instruction in respect of para
23(a) says inter alia:
‘
The particulars of the spouse, minor children as
well as any other person who, according to the provisions of the
rules concerned,
qualify as dependants must be stated in full.’
[19] The form sent to the Fund by the Provincial
Government referred only to the husband and stepson in para 23(a). Ms
Kgasi, the
senior official of the Provincial Government who
countersigned it, who as I have said was the deponent to the
affidavits filed on
behalf of the Provincial Government and whose
interpretation of ‘dependant’ I have dealt with above,
22
did not (despite the instruction in the manual) appreciate what
information was required in the form. The form was sent to the Fund
together with an application by the husband for a widower’s
pension on Form Z143. That latter form was filled in by the husband.
It required ‘particulars of minor children: (own
children/stepchildren and adopted children) as well as all other
dependants’
(my translation). This section was left blank by
the husband. The husband delivered no affidavit, so it is not known
why he did not
mention the stepchild. It seems likely that he did not
refer to the stepchild or the children because he did not appreciate
the meaning
of ‘dependants’. Other documents were also
sent by the Provincial Government to the Fund, none of which
mentioned the
children.
[20] It was the duty of the Provincial Government to
provide information to the Fund in respect of persons who qualified
as dependants,
as defined. With effect from 1 January 2000 the
Provincial Government has been obliged to comply with para H.1(p) in
s V111 of the
Public Service Regulations, 1999
23
which reads:
‘
A head of department shall keep a record of each
employee reflecting, as a minimum, the following particulars with
regard to the employee:
(p) all other particulars required for determining
benefits and remuneration, including particulars as to marital status
and dependants.’
The deceased died before the regulation in question came
into force. But the Provincial Government was nevertheless required,
because
of the provisions of s 7 of the Law and the form which the
Fund required it to complete, to provide the Fund with the
information
required by it. The submission on its behalf ─ that
it is only obliged to provide the Fund with such information as may
appear
in its files ─ is incorrect and most unfortunate. An
employer is obliged to provide correct and complete information to
the
Fund and if this necessitates the making of inquiries, it is for
the employer to make those inquiries. The burden this entails must
not be overstated because it would be quite proper and indeed
desirable for the employer, once it has ascertained who qualify as
beneficiaries, to inform them that they could make representations
and bring whatever facts they might consider relevant to the
attention
of the Fund directly. Ms Scheepers said that the Fund will
take into account facts brought to its attention by interested
parties
directly, and this is clearly a correct approach.
[21] I return to the question of costs. Had the Fund
conceded the relief sought against it in the court
a
quo
and merely filed affidavits to assist the
court in establishing the facts, there would have been much to be
said for an order directing
the Provincial Government to pay its
costs. But the Fund opposed the application on the merits. The
consequence is that it should
pay its costs and the children’s
costs.
[22] The Provincial Government asked for its costs in
the court
a quo
to be
paid by the children. I consider that no order should be made in
respect of these costs because it was the misconception of
the
Provincial Government’s employee as to her responsibility to
provide information to the Fund, and the misinterpretation
by its
employee of the definition of dependants, that caused the problem
which lay at the heart of these proceedings.
[23] I make the following order:
1.1 The appeal by the first appellant (the Fund) is
upheld to the extent that para 2.2.2 of the order of the court
a
quo
is deleted.
1.2 That appeal is otherwise dismissed.
1.3 The first appellant is ordered to pay the
respondents’ (the children’s) costs of appeal.
2.1 The appeal by the second appellant (the Provincial
Government) is upheld.
2.2 Paragraphs 3 and 4 of the order of the court a quo
are deleted and the following paragraph is substituted:
‘
3. The first respondent (the Provincial
Government) is ordered to pay the applicants’ (the children’s)
costs.’
______________
T D CLOETE
JUDGE OF APPEAL
Concur: Harms JA
Zulman JA
Ponnan JA
CONRADIE JA
[24] I agree with the orders proposed by my brother
Cloete and with his reasons. I think, though, that the case has
another dimension
worth mentioning. The Fund is an organ of state
that performs an administrative function. If the children wanted a
hearing they
ought not to have been denied one.
[25] Apart from the widower (who was properly
classifiable as a dependant) and his son (who may or may not have
been a dependant)
the only dependants were the children. Although
they were not particularly well served by the executrix and her
adviser, they did,
I think, manage to bring it home to the Fund that
they had something to contribute to the decision it was about to
take.
[26] Ms Regina Kgasi, the deponent to the employer's
affidavit, says that she received the letter requesting information
about the
death benefits, as well as the form Z143 completed by the
widower in which he claimed payment of the pension benefits. Both
were
dated 19 November 2000. She attached them to the form Z102A
(which she herself had filled in from information in the deceased's
personnel
file) and sent all three documents to the Fund. She did not
bother to write to the executrix to tell her that a gratuity was due
to those who qualified as 'dependants' of the deceased or that the
Fund was about to take a decision on who the recipients should
be.
[27] The two forms forwarded by the employer, Z143 (in
respect of the pension) and Z102A (in respect of the gratuity),
arrived at
the Fund on 13 April 2000. Ms Esti Scheepers, the deponent
to the Fund's answering affidavit, says, 'Apart from these forms
submitted
by the second respondent [the employer] to the first
respondent [the Fund] the first respondent had no other source of
information
from which the existence of the children of the deceased
could have been ascertained.'
She is not clear on whether the Fund received the letter
whereas Ms Kgasi is clear that she sent it. We must therefore
conclude that
it did arrive at the Fund with the official claim
forms.
[28] It must have been evident to the Fund from these
documents that the executrix was unaware of the claim made by the
widower. The
obvious lack of communication between the person
responsible for winding up the estate and the surviving spouse
suggested a need
for some elementary enquiry on the part of the
decision-maker. The letter amounted to a request to engage, an
implicit request for
a hearing. No extensive research (the resources
for which the Fund is said to lack) was required. The telephone
number of the executrix's
representative was on the letter and it
would have been no more than a moment's trouble to obtain her views
on the merits of the
surviving spouse's claim to the gratuity.
[29] The executrix did not leave matters there. When
she received no response, she telephoned the employer and on 13
January 2000
sent it a fax confirming a conversation about the
deceased's estate with one of its officials. She again requested
information about
the deceased's 'death benefits' and accumulated
leave pay. This communication amounted to another request for a
hearing. It is
not known whether the employer forwarded the letter
to the Fund. In my view it does not matter. The employer and the
Fund were
part of the same decision-making mechanism. The quality of
a decision by the Fund depended as much on the diligence of the
employer's
officials who, at the behest of the Fund, gathered the
information on which the latter made its decision, as on the
astuteness of
its own officials. In blaming each other for what went
wrong they are misguided.
[30] The natural justice principles underlying a fair
hearing are very flexible. While the Fund may not be obliged to
afford a hearing
to every claimant, whatever the circumstances, it is
obliged to do so when a hearing is requested. How easily might this
litigation
not have been avoided if someone had said, 'From these
documents it
looks as if I may not have all the facts. Let me pick
up the telephone and make sure I have it right.'
J H CONRADIE
JUDGE OF APPEAL
CONCUR:
ZULMAN JA
1
Proclamation 21 published in Government Gazette
17135 of 19 April 1996.
2
In terms of Rule 14.5.2, part of which is quoted
in para [4] below, contained in Schedule 1 to the Law.
3
Section 6 of the Law provides inter alia that the Board shall manage
the Fund. Section 6A of the Law provides that all powers of
the
Board are vested in the Minister of Finance until the Board is
appointed, and that was the position at all times material to
these
proceedings.
4
Despite two amendments to the Law and seven amendments to the Rules,
this remains the position.
5
Sic
; the word ‘moment’ was deleted by s 1(a) of
Act 21 of 2004.
6
Section 28 provides: ‘Notwithstanding anything to the contrary
in any law contained, any benefit or any right to a benefit,
due and
payable in terms of this Law to the beneficiary of a member, on or
as a result of or after the death of that member shall
for the
purposes of the Estate Duty Act, 1955 (Act 45 of 1955), be deemed
not to be property as defined in section 3(2) of that
Act.’
7
24 of
1956.
8
Act 57
of 1973.
9
Contained in
Government Gazette
3940 published on 22 June
1973.
10
Namely, ‘the widow or minor child of such member or person,
including his minor stepchild or a minor child who has been legally
adopted by him, and also any person who, in the opinion of the
Director-General, was totally or partially dependent on such member
or person for maintenance at the time of his death.’
11
As substituted by s 5(a) of Act 22 of 1996.
12
In terms of the preamble to paragraph (b).
13
2003 (6) SA 38
(SCA).
14
Fedsure Life Assurance Ltd v Greater Johannesburg Transitional
Metropolitan Council
[1998] ZACC 17
;
1999 (1) SA 374
(CC).
15
President of the Republic of South Africa v South African Rugby
Football Union
2001 (1) SA 1
(CC).
16
Pharmaceutical Manufacturers Association of SA: In re Ex Parte
President of the Republic of South Africa
[2000] ZACC 1
;
2000 (2) SA 674
(CC).
17
See also
Bullock NO
v Provincial Government, North West Province
2004 (5) SA 262
(SCA) para 16 and
Oudekraal
Estates (Pty) Ltd v City of Cape Town
2004 (6) SA 222
(SCA) para 25 and n 16.
18
See paras 5 and 6.
19
See para 18.
20
See paras 20 and 25.
21
In terms of s 21 of the Law which provides, to
the extent relevant for present purposes, that:
‘
(b)
[A]ny amount which has been paid to any … beneficiary in
accordance with the provisions of this Law and to which such
…
beneficiary was not entitled … may be deducted from the
benefit payable to such … beneficiary under this
Law in a
lump sum or in such instalments as the Board may determine.’
22
Para [7].
23
Made by the Minister for the Public Service and
Administration and contained in
Government
Notice
R679 published in
Government
Gazette
20117 on 1 July 1999.