Orion Money Purchase Pension Fund (SA) v Pension Funds Adjudicator and Others (1991/2001) [2002] ZAWCHC 38 (23 July 2002)

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[2002] ZAWCHC 38
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Orion Money Purchase Pension Fund (SA) v Pension Funds Adjudicator and Others (1991/2001) [2002] ZAWCHC 38 (23 July 2002)

REPORTABLE
IN THE HIGH COURT OF
SOUTH AFRICA
(CAPE
OF GOOD HOPE PROVINCIAL DIVISION)
CASE
NO: 7678/2001
Being
a consolidation of:
CASE
NO: 1975/2001
In
the matter between:
ORION
MONEY PURCHASE PENSION FUND (SA)
Applicant
and
THE
PENSION FUNDS ADJUDICATOR
1
ST
Respondent
SEALOGA
EVELYN SEKELE
2
ND
Respondent
BAHWADUBA
BUS SERVICES (PTY) LTD
3
RD
Respondent
and
CASE NO: 1991/2001
The
matter between:
ORION
MONEY PURCHASE PENSION FUND (SA)
Applicant
and
THE
PENSION FUNDS ADJUDICATOR
1
ST
Respondent
LESETJA
ANDRIES GAFANE
2
ND
Respondent
BAHWADUBA
BUS SERVICES (PTY) LTD
3
RD
Respondent
JUDGMENT: 23 JULY 2002
NEL,
J:
The applicant, the Orion Money Purchase Pension
Fund (SA) (“
the Fund
”) seeks to set aside determinations
made by the Pension Funds Adjudicator (“
the
Adjudicator
”)
against it and in favour of Ms Sealoga Evelyne Sekele (“
Sekele”
)
and Mr Lesetja Andries Gafane (“
Gafane”
) on 6 February
2001. The determinations were made pursuant to complaints lodged
with the Adjudicator after the retrenchment of Sekele
and Gafane by
the Bahwaduba Bus Services (Pty) Limited (“
the Bus Services
)
when it transpired that the Bus Services had not notified the Fund of
their status as employees and had not paid any pension fund
contributions on their behalf.
Although
the
Fund had been unaware of the existence of Sekele and Gafane;
no
pension fund contributions had been paid on their behalf to the
Fund;
their
withdrawal benefits were ‘nil’ in terms of the relevant rules,
the
Adjudicator was of the view that the Fund should have collected the
contributions from the Bus Services and thus remained liable
for the
payment of withdrawal benefits.
He
made the following determinations:
“
10.1 The
first Respondent (the Fund) is directed to pay the complainant
(Sekele) R7 549,90, together with interest thereon at the
rate
prescribed in the Prescribed Rate of Interest Act for a judgement
debt from 1 January 1999 to the date of payment, within six
weeks of
the date of this ruling.
The
first respondent (the Fund) is further directed to pay the
complainant (Sekele) R845,36 as a demutualisation benefit, together
with interest theron at the rate prescribed in the Prescribed Rate
of Interest Act for a judgement debt from the due date of
this
benefit to the date of payment, within six weeks of the date of
this ruling.
The
second respondent (the Bus Services) is directed to pay the first
respondent the amounts calculated in paragraph 10.1 and
10.2 within
two weeks of the date on which the first respondent complies with
this ruling.”
and
“
22.1 The first
respondent (the Fund) is directed to compute the complainant’s
(Gafane) benefit in terms of rule A5.1.1 (master rules)
read together
with the special rules. In calculating the benefit, the fund shall
deem the complainant’s (Gafane) membership to
be from 6 October
1997 to 31 October 1998.
The
first respondent (the Fund) is directed to pay the amount
calculated in paragraph 22.1 together with interest thereon at the
rate prescribed at the Prescribed Rate of Interest Act for a
judgement debt from 1 January 1999 to the date of payment, within
6
weeks of the date of this ruling.
The
second respondent (the Bus Services) is directed to pay the first
respondent (the Fund) the amount calculated in paragraph
22.1,
within 2 weeks of the date on which the first respondent (the Fund)
complies with the ruling in 22.2.”
In
addition to the applications to set aside the determinations, the
Fund also applies for the following orders in substitution thereof,
namely –
Dismissing
the complaint filed by Sekele against the Fund, alternatively,
substituting therefore an order directing the Bus Services
to pay
her an amount of R7 549,90 plus a demutualisation benefit of R845,36
together with interest thereon at the prescribed rate
of interest
from 1 January 1999 to date of payment: (The amount she would have
been entitled to receive from the Fund if she had
been registered as
an employee from 1984 and if pension fund contributions had been
made on her behalf.)
Dismissing
the complaint filed by Gafane against the Fund, alternatively,
substituting thereupon an order directing the Bus Services
to pay
Gafane an amount that Gafane would have received from the Fund had
Gafane been a member of the Fund from 6 October 1997
to 31 October
1998, together with interest thereon at the prescribed rate of
interest from 1 January 1999 to date of payment.
The
adjudicator opposed the applications by the Fund, filed opposing
affidavits and was represented by counsel. That is not the function
of the Adjudicator. As pointed out above, his function is to dispose
of complaints lodged in terms of sec. 30 A (3) in a procedurally
fair, economical and expeditious manner and in doing so he may make
an order which any court of law may make. After completion of
his
investigation a statement containing his determination and the
reasons therefore are sent to all the parties concerned and to
the
clerk or registrar of the court which would have had jurisdiction had
the matter been heard by a court. The Adjudicator has
no further
function to fulfil. If a party is dissatisfied and approaches the
High Court, a
de novo
hearing is initiated which, as pointed out, is neither an appeal nor
a review.
The
remarks made by
Schutz JA
in
Pretoria Portland Cement
Company Limited v The Competitions Commission and Others
(unreported judgment of the Supreme Court of Appeal delivered on 31
May 2002) is certainly apposite (par.38).
‘
It is not for
judges to participate in any stage subsequent to their judgments in
order to defend their decision. Indeed it would
be improper to do
so, except in those rare cases when an obligation to provide
information arises. …. The place to explain a
decision is in a
judgment.
Once
given it is given. … Thirdly, and most importantly, it is not in
the public interest that judges should become embroiled
in disputes
between parties who have appeared before them. It is a matter of the
utmost importance that judges should be seen as
impartial and, in the
kinder sense, aloof”.
BACKGROUND
Ms
Sekele was
employed by the Bus Services from 1984 to 1990, when she was
dismissed, and she was not a member of the Fund during this period;
again
employed from 10 February, 1990 until 31 October 1998 when she was
retrenched (due to a restructuring process);
not
registered or recorded as a member by the Fund because it had not
been notified of her status as an employee of the Bus Services
and
no pension fund contributions had been paid on her behalf, because
she
‘
was employed as a
builder’s assistant and since building was not an integral part of
the operations of the company she could have
been dismissed at any
time’
It
is not in dispute that, if the Fund had been notified of Sekele’s
employment from February 1990 and if the requisite payments
had been
made by the Bus Services, she would have been entitled to a
withdrawal benefit of R7,549-90 and to R845-36 as a demutualisation
benefit.
Mr
Gafane was
employed
by the Bus Services as a tyre attendant from the mid-1980’s until
13 August, 1997, when he was dismissed (apparently
for
absenteeism);
registered
as a member of the Fund during this period and pension fund
contributions were paid on his behalf.
withdrawn
from the Fund on 13 August 1997 consequent upon a notification of
withdrawal sent by the Bus Services to the Fund.
No withdrawal
benefit was paid because the relevant rule provided that no benefit
would be payable where a member is dismissed;
re-employed
from 6 October 1997 ‘on the same terms and conditions’ as a
result of an agreement reached after challenging the
fairness of
his dismissal;
in
employment until 31 October 1998 when he was retrenched;
not
re-registered or recorded as a member by the Fund because it had
not been notified of his re-employment and no pension fund
contributions had been paid on his behalf, because
“
Mr
Gafane was re-employed on 8/10/97. All new employees qualify to
become a member of the pension fund only after 12 months service.
Mr
Gafane was retrenched on 31/10/98. For that reason he was not put on
the pension fund. Mr Gafane can thus lay no claim towards
any
pension being paid to him.”
Complaints lodged with the Adjudicator on behalf
of Sekele and Gafane by their trade union, read as follows:
“
Mrs
Sealoga Evelyne Sekele started to work in the Company in Plus minus
1984 and was dismissed in 1990, and was re-employed at 10
February
1990. When she was dismissed she was not given the Pension money.
From the 10
th
February 1990 she worked until the 31 October 1998, when she was
retrenched. She did not receive any Pension money.
All the employees were
not contributing towards the fund, only the employer was contributing
on their behalf.
Normally the employer
used to register the employee to the fund after one year of service.
Evelyne had in her first part of employment
6 years continuous
service. After her re-employment she worked for 8 years until she
was allegedly retrenched
.
Since majority of the
respondent’s ex-employees got the Pension/Provident Fund money,
Evelyne was not supposed to be discriminated.
Failure of management
to contribute on her behalf is unfair and unacceptable.
The
Adjudicator is therefore requested to direct the employer to pay
contributions to the fund for 11 February 1991 to 31 October
1999 and
after that he must make a claim on Evelyne’s behalf.” (sic)
“
Mr
Lesetja Andries Gafane was employed by the 1
st
respondent on the 17 September 1984 as a tyre attendant. He was
unfairly dismissed on or about 22
nd
August 1997. The dispute was resolved to his favour at the CCMA on
the 3
rd
October 1997. The Complainant did not receive any money during this
period of his dismissal. Also after the re-instatement, he
worked
until the 31 October 1998 when he was retrenched with the other
employees. The complainant did not receive his pension money.
All employees did not
contribute towards the fund. The employer was contributing on their
behalf. We were informed by the employer
that they register an
employee in the fund after one year of service. The complainant
(Andries Gafane) did not receive his pension
fund for about 13 years
of service.
Most of the
respondents’ employees did receive their pension money when the
said retrenchment took place, but Andries is one of
those who did not
receive the money.
Failure
of the Company to claim and or contribute on behalf of Mr L.A. Gafane
amount to unfair discrimination and it is unacceptable
The
adjudicator is therefore requested to instruct the Company to
contribute and or claim from the Fund all monies due to Mr Andrief
Gafane just like any other employee who have received their portion
of the fund.” (sic)
The Fund and it’s Rules
The
Fund is described as an ‘umbrella’ fund consisting of a number of
participating employer funds and is administered by Old
Mutual
Employer Benefits, a division of OMLACSA, the underwriter of the
Fund. The relationships between participating employers,
employees
and the Fund are described as follows:
“
(8) Each
participating employer has its own account with the Fund, which may
be likened to a sub-fund within the Fund. Employers’
accounts are
kept distinct. Any surplus in an employer’s account is
consequently only for the benefit of that particular employer’s
account; while any expense of the employer’s account is solely for
that account and may not be set off against any other employer’s
account.
The
eligible employees of the participating employers can become members
of the employer’s ‘sub-fund- - and thus, too, members
of the
Fund – on the terms selected by their respective employers. Thus,
the benefit structure that is available to employees
on their
retirement or withdrawal from the relevant sub-fund (and thereby the
Fund) is dictated by the provisions agreed by their
employers.
The
benefit structures chosen by the various participating employers are
contained in the Special Rules applicable to those employers.
Each
employer has its own set of Special Rules. All participating
employers are also bound by the Master Rules of the Fund, which
regulate the overall operation of the Fund and contain generally
applicable provisions.
The
Fund itself is a product offered by the Old Mutual group. There is
no particular relationship between the fund and the participating
employers and their employees other than as set out above. The Fund
therefore relies on correspondence between itself and the
employers
in order to operate the account or sub-fund of each employer. The
Fund has certain standard correspondence, for example
Monthly
Payment Reports (MPRs), in terms of which an employer is required,
inter alia, to notify the Fund of any changes to the
membership of
its (employer’s) account. It is incumbent on an employer to
notify the Fund of additions to its employer’s account
(or
sub-fund) and thus of any new (employee) members of the Fund.”
The Fund and its rules are registered in terms of
the Pension Funds Act 24 of 1956 (“the Act”). The rules are
binding on the
Fund and its the members, shareholders and officers
and on any person who claims under the rules (sec 13).
Chapter
V(A) of the Act was introduced by Act 22 of 1996. It provided for
the establishment of the Office of and for the appointment
of a
Pension Funds Adjudicator whose main object is to dispose of
complaints lodged in terms of section 30A(3) in a procedurally
fair,
economical and expeditious manner (sec 30 B, C and D). In order to
do so the Adjudicator has to investigate any complaint
and may make
an order which any court of law may make (sec. 30E).
The
fund or person against whom allegations are made in the complaint has
to be afforded the opportunity to comment on the allegations
(sec 30
F). The parties to a complaint are (a) the complainant, (b) the fund
or person against whom the complaint is directed (c)
any person who
has applied to the Adjudicator to be made a party and who has a
sufficient interest in the matter to be made a party
to the complaint
and (d) any other person whom the Adjudicator believes has a
sufficient interest in the matter to be made a party
to the
complaint. (sec. 30 G).
The
proceedings are initiated by the lodging of a written complaint with
a fund or an employer who participates in a fund. The fund
or
employer has to properly consider the complaint and reply in writing
within 30 days. In the event of a failure to reply or if
the
complainant is not satisfied with the reply, the complaint may be
lodged with the Adjudicator (sec 30 A). After affording the
fund or
person against whom the allegations are made the opportunity to
comment thereon, the Adjudicator investigates the complaint
and may
follow any procedure which is considered to be appropriate. After
completion of the investigation a statement containing
a
determination and the reasons therefore are sent to all the parties
concerned and to the clerk or registrar of the court which
would have
had jurisdiction had the matter been heard by a court (sec. 30 F, H,
J and M).
Any
party who feels aggrieved by a determination may apply for relief to
a division of the High Court which has jurisdiction, and
must at the
same time give written notice thereof to the other parties to the
complaint. The Court has the power to consider the
merits of the
complaint in question, to take evidence and to make any order it
deems fit. (sec. 30 P). It is not an appeal or a
review. The
Court’s jurisdiction is analogous to original jurisdiction. See
Resa Pension Fund v Pension
Fund Adjudicator
2000(3)
S.A. 313 (C) at 318 G-H.
Section
1 of the Act defines ‘complainant’, ‘complaint’, ‘member’,
‘pension fund’, ‘pension fund organization’
and ‘rules’
as follows:
“
complainant
”
means –
any
person who is, or who claims to be-
a
member or former member of a fund;
a
beneficiary or former beneficiary of a fund;
an
employer who participates in a fund;
any
group of persons referred to in paragraph (a) (i), (ii) or (iii);
a
board of a fund or member thereof; or
any
person who has an interest in a complaint;
“
complaint”
means
a complaint of a complainant relating to the administration of a
fund, the investment of its funds or the interpretation and
application of its rules, and alleging-
that a decision of the fund or any person
purportedly taken in terms of the rules was in excess of the powers
of that fund or person,
or an improper exercise of its powers;
that
the complainant has sustained or may sustain prejudice in
consequence of the maladministration of the fund by the fund or any
person, whether by act or omission;
that
a dispute of fact or law has arisen in relation to a fund between
the fund or any person and the complainant; or
that
an employer who participates in a fund has not fulfilled its duties
in terms of the rules of the fund;
but shall not include
a complaint which does not relate to a specific complainant;
“
member”
means, in relation to –
a fund referred to in paragraph (a) of the
definition of ‘pension fund organization’, any member or former
member of the association
by which such fund has been established;
a
fund referred to in paragraph (b) of that definition, a person who
belongs or belonged to a class of persons for whose benefit
that
fund has been established,
but does not include
any such member or former member or person who has received all the
benefits which may be due to him from the
fund and whose membership
has thereafter been terminated in accordance with the rules of the
fund;
“
pension
fund”
means a pension fund organization;
“
pension
fund organization”
means –
any association of persons established with
the object of providing annuities or lump sum payments for former
members of such association
upon their reaching retirement dates, or
for the dependants of such members or former members upon the death
of such members or
former members; or
any
business carried on under a scheme or arrangement established with
the object of providing annuities or lump sum payments for
persons
who belong or belonged to the class of persons for whose benefit
that scheme or arrangement has been established, when
they reach
their retirement dates or for dependants of such persons upon the
death of those persons,
and included any such
association or business which in addition to carrying on business in
connection with any of the objects specified
in paragraph (a) or (b)
also carries on business in connection with any of the objects for
which a friendly society may be established,
as specified in section
2 of the Friendly Societies Act, 1956, or which is or may become
liable for the payment of any benefits provided
for in its rules,
whether or not it continues to admit, or to collect contributions
from or on behalf of, members;
“
rules”
means the rules of a fund, and includes –
the act, charter, deed of settlement,
memorandum of association, or other document by which the fund is
constituted;
the
articles of association or other rules for the conduct of the
business of the fund; and
the
provisions relating to the benefits which may be granted by the
contributions which may become payable to the fund;”
The
rules of the Fund consist of the ‘Master Rules’ which apply to
all participating employers and the ‘Special Rules’, applicable
to a particular participating employer such as the Bus Services.
The
relevant ‘Master Rules’ are the following:
“
RULE
1: DEFINITIONS
1.10 BENEFICIARY: Any
person (including the MEMBER if applicable) who is or becomes
entitled to the payment of a benefit in terms
of these Rules.
1.15 ELIGIBLE
EMPLOYEE: A person in the employ of the PARTICIPATING EMPLOYER who
satisfies any one of the category descriptions outlined
in the
Special Rules.
(Special
Rules, Category 1: ‘All members’)
MEMBER:
An ELIGIBLE EMPLOYEE who participates in the FUND.
MEMBER’S
CURRENT GUARANTEED CREDITS: Any portion of the MEMBER’S current
contributions in terms of Rule 3.1.1.1. and Rule
3.4.1.1. that has
been invested in the Guaranteed fund.
MEMBER’S
CURRENT MARKET LINKED CREDITS: The value (as determined by the
UNDERWRITER) of the Orion market linked units purchased
by any
portion of the MEMBER’S current contributions in terms of Rule
3.1.1.1. and Rule 3.4.1.1.
1.29 PARTICIPATION
DATE: The earliest date on which ELIGIBLE EMPLOYEES in the service
of the PARTICIPATING EMPLOYER may commence
participating in the FUND.
This date will be recorded in the Special Rules.
(Recorded
in the Special Rules as 1 November 1988)
1.30 PARTICIPATING
EMPLOYER: A FIRM whose ELIGIBLE EMPLOYEES may participate in the
FUND.
PARTICIPATING
EMPLOYER’S CURRENT GUARANTEED CREDITS: Any portion of the
PARTICIPATING EMPLOYER’S nett current contributions
made in
respect of the MEMBER in terms of Rule 3.1.2.1. and Rule 3.4.1.1.
that has been invested in the Guaranteed fund.
PARTICIPATING
EMPLOYER’S CURRENT MARKET LINKED CREDITS: The value (as
determined by the UNDERWRITER) of the Orion market linked
units
purchased by any portion of the PARTICIPATING EMPLOYER’S nett
current contributions made in respect of the MEMBER in
terms of
Rule 3.1.2.1. and Rule 3.4.1.1.
‘
Rule 2: Eligibility and
Participation of Eligible Employees
ELIGIBILITY
ALL ELIGIBLE EMPLOYEES
may join the FUND provided that they are under the NORMAL RETIREMENT
AGE.
PARTICIPATION
2.2.1 OPTIONAL
PARTICIPATION
Any person who is an
ELIGIBLE EMPLOYEE on the PARTICIPATION DATE, may choose to
participate in the FUND. If he does not begin participating
within
three months of the PARTICIPATION DATE, his participation will be at
the underwriter’s discretion and will also be on condition
that he
still meets the requirements of the definition of ELIGIBLE EMPLOYEE,
that evidence of his good health (at his expense) is
accepted by the
UNDERWRITER in respect of participation in any insured benefits and
that the approval of the TAX AUTHORITIES has
been obtained.
COMPULSORY
PARTICIPATION
All
persons who become ELIGIBLE EMPLOYEES after the PARTICIPATION DATE
are obligated to participate in the FUND.
COMMENCEMENT
OF PARTICIPATION
Save
for the provisions of Rule 2.2.1, ELIGIBLE EMPLOYEES will begin
participating in the FUND on the later of
the
PARTICIPATION DATE, or
the
date on which they become ELIGIBLE EMPLOYEES.
CONTINUATION
OF PARTICIPATION
Save
for the provisions of Rule 2.2.4, all MEMBERS are obligated to remain
MEMBERS until their retirement, retrenchment, withdrawal
from service
or death, as the case may be.
“
RULE
A.5.: RETRENCHMENT
A.5.1 AMOUNT
PAYABLE
If the MEMBER is
obliged to leave the PARTICIPATING EMPLOYER’S service as a result
of retrenchment or a reduction in, or reorganization
of staff, all
contributions due in respect of him in terms of Rule 3.1. will cease.
The MEMBER will receive
A.5.1.1. his
ACCUMULATED GUARANTEED CREDITS
OR
A.5.1.2. the benefit
that would have been payable in terms of Rule A.6., had he withdrawn
from the PARTICIPATING EMPLOYER’S service.
The
Special Rules will stipulate whether A.5.1.1. or Rule A.5.1.2.
applies.”
(Benefit
Section A(5) of the Special Rules stipulated that A.5.1.1. applied)
Summarized, the rules (Master and Special)
provided as follows:
All
employees of the Bus Services were ‘eligible employees’ (master
rule 2 and special rule definition).
All
employees who became ‘eligible employees’ after the
‘participation date’ (1 November 1988) were obliged to
participate
in the Fund (rule 2.2.2).
The
Bus Services had to make monthly pension fund contributions in
respect of each member (employee) in its service who participated
in the Fund (rule 3.2.2.1).
After
deduction of costs, the balance of the contributions are invested
in the guaranteed fund (rule 1.31) known as the Member’s
current
guaranteed credits. (Rule 2.23 and 1.25).
On
cessation of participation due to retrenchment, members become
entitled to payment in cash of their accumulated guaranteed
credits
and accumulated market linked credits. (rule 2.2.4).
Applying these rules to the situation of the two
complainants the following emerge
Sekele
During the period 1984 until her dismissal
in 1990, she had not been a member of the Fund;
When re-employed on 10 February, 1990 and as
a consequence of the compulsory participation rule, she became a
member of the Fund;
Although obliged to do so, the Bus Services
failed to pay pension fund contributions on her behalf;
When retrenched on 31 October 1988 she had
no accumulated guaranteed credits and her withdrawal benefit was
‘nil’.
Gafane
was
a participating member of the Fund from the mid 1980’s until his
dismissal on 13 August 1997;
during
this period pension fund contributions had been paid on his behalf
by the Bus Services;
he
was re-employed from 6 October 1997 ‘on the same terms and
conditions”;
he
should have been re-registered as a member of the Fund either as a
result of his re-employment ‘on the same terms and conditions’
or as a consequence of the compulsory participation rule;
although
obliged to do so from the date of re-employment, the Bus Services
failed to pay pension fund contributions on his behalf;
when
he was retrenched on 31 October 1998 he had no accumulated
guaranteed credits and his withdrawal benefit was ‘nil’.
Mr
Farlam
who appeared on behalf of the Fund referred to
Tek
Corporation Provident Fund & Others v Lorentz
1999
(4) SA 884
(SCA) at 898 G as follows.
‘
what the trustees
may do with the fund’s assets is set forth in the rules. If what
they propose to do (or have been ordered to
do) is not within the
powers conferred upon them by the rules, they may not do it.’
He submitted that the Rules do not permit the Fund
to deem contributions to have been paid and then to pay out
withdrawal benefits
on the basis of such notional contributions as
the withdrawal benefits are confined to the amounts that have accrued
in respect of
contributions which had actually been paid. In this
regard he referred to Rule A.5.1.1. which provides that a member is
entitled
on retrenchment to receive his “Accumulated Guaranteed
Credits’ defined in Rule 1.1. as being the sum of the member’s
and the
participating employer’s current guaranteed credits plus
fund interest. The ‘participating employer’s current guaranteed
credits’
is defined in Rule 1.31 as meaning ‘any portion of the
Participating Employer’s nett current contributions made in respect
of
the Member in terms of Rule 3.1.2.1 and Rule 3.4.1.1 that has been
invested in the Guaranteed Fund.’
Mr
Bozalek
,
who appeared on behalf of the Adjudicator, submitted that the fact
that no contributions had been paid on behalf of a particular
member
does not mean that the Fund has no liability in respect of the
payment of benefits to the member. He pointed out that the
failure
to make such payments could arise for a number of reasons, including
negligence on the part of the trustees or the negligence
of the
administrator of the Fund and that in terms of Master Rule 4.7 the
duties of the Board of Trustees include the following:
“
4.7.2. ensuring
that proper control systems are employed by or on behalf of the
trustees.
4.7.4. ensuring
that contributions are paid timeously to the Fund in accordance with
the provisions of the Act.”
About 5000 employers participate in funds
administered by the ‘OMEB’ with an overall membership of
approximately 150,000. Even
if, in these circumstances, negligence
could be ascribed to the Trustees in not policing the employers on a
virtual daily basis,
the negligence would not be that of the Fund,
the party to the complaint.
Mr
Bozalek
also submitted that the Fund would at all material times, have been
able to recover from the Bus Services the contributions which
should
have been made on behalf of Sekele and Gafane and
‘
Recognising this the
Adjudicator ruled that the Company was to make payment of the
stipulated withdrawal benefits to the Fund within
two weeks of the
Fund paying such amounts tot the complainants.’
This he submitted, fell
within the power of the Adjudicator to order as both the Fund and the
Bus Services were parties to the complaint
and in terms of section
30E of the Act the Adjudicator was entitled to make ‘the order
which any court of law may make. ’
I
do not agree. As pointed out by Mr.
Farlam
the Fund may only act within the powers conferred upon it by it’s
Rules, and its Rules do not provide for the payment of non-existent
benefits.
It
follows that the determination made by the Adjudicator should be set
aside. The Complainants, Sekele and Gafane lost their pension
benefits because the Bus Services failed to pay pension fund
contributions on their behalf. They are entitled to claim the loss
of these benefits from the Bus Services. This would be in accordance
with the alternative order sought by the Fund and was not opposed
by
the Bus Services.
The
Fund seeks an order for costs against the Adjudicator. Although the
opposition of the Adjudicator has undoubtedly added to the
costs
involved in this matter and although, as pointed out, it is not his
function to actively participate in proceedings of this
nature, I am
of the view that costs should not be awarded against him. As
submitted, he is a public authority performing a valuable
social
function within a limited budget. In addition the amounts which were
awarded to Sekele and Gafane are negligible and the
application was
brought by the Fund because the issues involved are of great
importance to it. It was submitted that
“
It is imperative
that the Fund – which is an umbrella fund consisting of various
participating employees from throughout South Africa,
whose employees
participate in, and are members of, the Fund – knows exactly who
its members are and what its liabilities are in
respect of benefits
owed to such members. The Adjudicator’s aforesaid determinations
have deprived the Fund of that possibility.
Accordingly, despite the
relatively small amount of money at issue and the plight of Ms Sekele
and Mr Gafane, the Fund has been
obliged to challenge the
Adjudicator’s determinations.”
In
the result, the following orders are made:
The
determinations made by the Adjudicator dated 6 February 2001 are
set aside;
The
Bus Services is ordered to pay Sealoga Evelyn Sekele an amount of
R7 549-90 plus an amount of R845-36 as a demutualisation
benefit
together with interest on these amounts at the prescribed rate of
interest from 1 January 1999 to date of payment;
The
Bus Services is ordered to pay Lesetja Andries Gafane an amount
that he would have received from the Fund had he been a member
of
the Fund from 6 October 1997 to 31 October 1998, together with
interest thereon at the prescribed rate of interest from 1
January
1999 to date of payment;
Each
party to pay it’s own costs.
NEL, J
IN THE HIGH COURT OF
SOUTH AFRICA
(CAPE
OF GOOD HOPE PROVINCIAL DIVISION)
CASE
NO: 7678/01
1975/01
Coram: Nel, J
REPORTABLE
In
the matter between:
ORION
MONEY PURCHASE PENSION FUND (SA) Applicant
and
THE
PENSION FUNDS ADJUDICATOR 1
ST
Respondent
SEALOGA
EVELYN SEKELE
2
nd
Respondent
BAHWADUBA
BUS SERVICES (PTY) LIMITED 3
RD
Respondent
and
THE
PENDION FUNDS ADJUDICATOR 1
ST
Respondent
LESETJA
ANDRIES GAFANE 2
ND
Respondent
BAHWADUBA
BUS SERVICES (PTY) LIMITED 3
RD
Respondent
JUDGMENT : NEL,
J
FOR
THE APPLICANT : Adv. P B J FARLAM
Instructed by : WALKERS INC
FOR
THE 1 ST RESPONDENT : Adv. L BOZALEK
Instructed
by : HEROLD GIE AND BROADHEAD INC
Date
of Hearing : 10 & 11 APRIL 2002
Judgment
delivered on : 23 JULY 2002