About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Free State High Court, Bloemfontein
SAFLII
>>
Databases
>>
South Africa: Free State High Court, Bloemfontein
>>
2024
>>
[2024] ZAFSHC 272
|
|
Municipal Workers Retirement Fund v Mafube Local Municipality and 3 Others (2218/2024) [2024] ZAFSHC 272 (5 September 2024)
IN
THE HIGH COURT OF SOUTH AFRICA
FREE
STATE DIVISION, BLOEMFONTEIN
Reportable
/ Not reportable
CASE
NO:
2218/2024
In
the matter between:
THE
MUNICIPAL WORKERS RETIREMENT FUND
Applicant
and
MAFUBE
LOCAL MUNICIPALITY
First
Respondent
MUNICIPAL
MANAGER,
MAFUBE
LOCAL MUNICIPALTY
Second
Respondent
CHIEF
FINANCIAL OFFICER,
MAFUBE
LOCAL MUNICIPALITY
Third
Respondent
EXECUTIVE
MAYOR,
MAFUBE
LOCAL MUNICIPALITY
Fourth
Respondent
Neutral
citation:
Municipal Workers Retirement Fund v Mafube Local
Municipality And 3 Others
Coram:
Ramdeyal AJ
Heard:
29 August 2024
Delivered:
05 September 2024.
ORDER
The
application as per the notice of motion including the costs of two
counsel and the Fund’s legal practitioners reasonable
travel
and accommodation cost, on Scale C in terms of Rule 67A is granted.
JUDGMENT
Ramdeyal
AJ
INTRODUCTION
[1]
The applicant is the Municipal Worker’s
Retirement Fund (the Fund) registered in terms of
s 4
of the
Pensions
Fund Act 24 of 1956
. The Mafube Local Municipality (the Municipality)
is a duly constituted municipality in terms of
s 2
of the
Local
Government Municipal Systems Act 32 of 2000
.
[2]
The Municipality is a participating employer
in the Fund and has many employees registered as members.
Arrear
pension fund contributions for its employees have always been a major
issue resulting in many court orders and writs of
execution against
the Municipality for payment thereof. Consequently, the Municipality,
too, has brought many unsuccessful applications
to stay writs of
execution.
[3]
On 9 September 2021 the Municipality was
ordered to pay the Fund an amount of R37 795 476.32,
with
interest and costs. Subsequently, the Municipality’s bank
accounts were attached by the Fund, while the sheriff executed
the
writ. Only R97 000 was available in the Municipality’s
bank account which was then paid to the Fund.
[4]
The judgment debt still stands for arrear
pension fund contributions from the Municipality for its
employees.
The Fund now endeavors to retrieve the arrear amount for its members
by seeking past and future information in respect
of the
Municipality’s bank accounts to give effect to its current
court order.
APPLICANT’S
VERSION
[5]
It is not in dispute by the Municipality
that it has deducted pension fund contributions from the salaries
of
its employees and failed to pay it over to the Fund. However, no
explanation appears to be forthcoming about what happened to
the
money deducted. It is also not in dispute that the Municipality
receives an equitable share annually: for the previous financial
year
an amount of R128 million, and for the 2024/2025 financial year an
amount of R138 million. Arrear pension payments are still
not
forthcoming, despite these large amounts of equitable shares received
and to be received by the Municipality.
[6]
The Fund contends that the Municipality has
the money it received from its employees and has moved
money from one
account to another to avoid attachment of same. The Fund therefore
seeks an order to furnish a full accounting of
each and every
withdrawal, payment or transfer from ABSA Bank accounts as well as
FNB of the respondent from 10 October 2023 to
date. They seek an
order from this court to obtain copies of bank statements of the
relevant accounts and copies of bank statements
for the account/s
where the equitable shares are held as well as the dates expected by
the Municipality to receive such shares.
[7]
Judgment was granted against the
Municipality on 9 September 2023 for the amount of R37 795 476.32.
The Municipality offered payment of 25% of the judgment debt. The
fund declined the offer and proceeded with its writ of execution
by
attaching the Municipality’s bank accounts via the sheriff,
resulting in an urgent application by the Municipality to
have the
writ of execution stayed, which was unsuccessful. The sheriff
received an amount of R97 000 from ABSA and paid same
to the
Applicant’s attorneys. That appears to have been the only
amount received of the judgment debt. Hence the application
to this
court to grant the order as per the notice of motion.
RESPONDENT’S
VERSION
[8]
The respondent avers that the applicant
attached the Municipality’s right, title and interest
in its
claim against the bank. The bank now stands in the ‘shoes of
the Municipality’ and the bank must pay over to
the applicant
any monies that were in the account and monies deposited thereafter.
The respondent contends that the applicant should
have joined the
banks in this matter as they are relevant parties.
[9]
The respondent contends that rule 45(12) and
45(8) of the Uniform Rules of Court set out the applicable
process to
be followed because of the effect of the attachment and that the
banks should be ordered to make payment to the applicant.
[10]
The respondent further contends that the applicant
should have brought this application by invoking the Promotion
of
Access to Information Act 2 of 2000 (PAIA). The respondent further
contends that the applicant’s procedure sought is in
itself
premature and the respondent seeks an order for the application to be
dismissed with costs.
HISTORY
OF THIS MATTER
[11]
There is an ongoing non-compliance from the
Municipality to pay its own employees’ pension fund
contributions
to the Fund. An application was launched in 2011 by the
Fund for non-payment where judgment was granted in 2015 and the
Municipality
eventually made partial payment to the Fund. In 2019 the
Fund brought a similar application against the Municipality, seeking
judgment
for R25 411 872.20 and an order against ABSA Bank
for disclosure of transfer of monies by the Municipality to another
account. Confirmation of the transfer was made by ABSA Bank. Then,
too, it was not in dispute that the Municipality owed money
to the
Fund in respect of its employees’ pension fund contributions.
In
Municipal
Workers Retirement Fund and Mafube Local Municipality
[1]
it was held that
‘
The
Municipality asserts that although it does not in any way try to
escape liability for any payment due . . .
’
[12]
The Municipality did not pay the arrear
contributions to the Fund. Instead, it brought an application for
leave to appeal against the court’s judgment which was
dismissed on 3 December 2021 by Molitsoane J where he remarked that:
‘
What
remains undisputed is that the applicant is indebted to the
respondent
.
It only seems that the concern of the applicant is that it seeks to
verify the information contained in the documents it supplied
to the
respondent . . .’
[2]
[13]
This practice by the Municipality seems to have
continued over the years; frivolous defences and non-payment
of its
employees’ pension fund contributions still remains unabated.
Cronje AJ in
Mafube
Local Municipality v Municipal Workers Retirement Fund and Others
[3]
at para 61-63 made an order for referral of the non -payment by the
Municipality to the
NDPP.
‘
The
Municipality fails to pay pension fund deductions of employees to the
Fund as regulated by
section 13A
of the
Pensions Fund Act, 24 of
1956
.
In
terms of
section 37
of the pension Funds Act this constitutes a
criminal offence.
The
Registrar is directed to bring this judgment to the attention of the
National Director of Public Prosecutions for consideration
of
instituting criminal proceedings against the Municipality for breach
of the Pension Funds Act.’
[14]
There is an ongoing battle by the applicant to
seek payment for the arrear pension amounts as this is an
urgent
matter. Their attempts to remedy the situation seems to be opposed by
the respondents on a consistent basis with stay of
execution
proceedings, leave to appeal against court orders and, as in the
current matter, raising mis-joinder of parties, incorrect
remedies
used by the applicant
ad infinitum
.
[15]
Pertinent to this matter is that it always
appears common cause that the money ‘arrear pension’
is
deducted by the Municipality. The disappearance of the money of the
employees of the Municipality and members of the Fund remains
questionable. The Municipality would rather challenge each and every
application brought to assist the pension fund members rather
than
pay its employees’ money to the Fund. There is a mysterious
delay rather than a solution to an ongoing undisputed problem,
namely
the non-payment of the arrear pension monies of the Fund’s
members to the Fund by the Municipality.
PREJUDICE
TO THE FUND AND MEMBERS CONCERNED
[16]
In the founding affidavit of the applicant, it is
clear that severe prejudice would result to the Fund’s
members
whilst contributions remain outstanding, as explained in paras 61-67.
Members would receive increasingly less benefits
if retrenched or
upon resignation, with some possibly not receiving any benefits at
all. Claims can be repudiated if members become
sick, disabled or die
while in service. The Fund is unable to invest the outstanding
amounts which is a statutory requirement,
ultimately benefitting the
members, with the result that their constitutional right to social
security is breached (s 27(1)
(c)
of the Constitution). It is
axiomatic that the prejudice caused to members can have devastating
consequences for them and their
families if this matter is not
attended to promptly and as a matter of urgency.
[17]
An order has been made by a court of law directing the respondent to
pay the arrear amount. Instead of complying
and paying the whole
amount as ordered, only R97 000 has been paid. The remainder is
a mystery.
Court
orders are binding until set aside (s 165(5) of the Constitution).
Once court orders are disobeyed without consequence, and
enforcement
is compromised, the impotence of the courts and the judicial
authority follows. Therefore, effective enforcement
to protect
the trust and respect for the courts is required.
[4]
[18]
A binding court order exists, yet the Municipality
considers it prudent to present various remedies and
strategies to
obtain the outstanding monies, but conveniently avoids addressing the
elephant in the room: what happened to the
pension fund contributions
that had been deducted by the Municipality? In addition, its plea to
join the banks as respondents and
resorting to the approach of PAIA
will only delay this matter even further.
[19]
The respondent has, and is due to receive, money
in equitable shares, that is common cause. They receive
various
amounts of monies from different sources. It has not pleaded
bankruptcy or any similar notion, yet offers naught but silence
on
the issue of its members’ monies.
[20]
The applicant has requested that the court now
utilise its inherent jurisdiction power to regulate its procedure,
namely to give effect to the previous judgment granted. Section 173
of the Constitution makes it manifest that ‘[t]he
Constitutional
Court, Supreme Court of Appeal and the High Court have
the inherent power to protect and regulate their own process, . . .
taking
into account the interest of justice.’ Such powers do
have limitations, however. In
S
v S and Another
[5]
it was held that ‘. . . where strict adherence to the rules is
at variance with the interests of justice, a court may exercise
its
inherent power in terms of s 173 of the Constitution to regulate its
own process in the interests of justice.’
[6]
[21]
The utilisation of s 173 of the Constitution by
the Court to use its inherent power to grant the prayers
sought in
the notice of motion maybe a suitable application of law, in light of
the history of this matter and its prejudicial
component on working
citizens of this country who’s rights should be protected, and
not blatantly infringed, as it is. The
Municipality cannot continue
to delay proceedings and delay the rights of the applicant’s
members from being enforced. Non-payment
of the pension fund
contributions is a serous breach of law. It is now time to act and
compel the Municipality to disclose all
the necessary documentation
that the Fund requires to enforce the court order and writ of
execution on the relevant bank account
that holds money to eradicate
this long outstanding problem and give proper effect to this court
order. The interests of justice
warrant same.
[22]
The obligation of the Municipality is simple: it
merely has to give the instruction to the bank holding
its money to
dispose of the monies by paying the Fund, but the respondents have
made this matter difficult for the applicants.
No instruction has
been forthcoming. Rather, the Municipality contends that the
applicant must use alternative remedies to litigate.
This,
notwithstanding the fact that there is an existing court order for
payment of money. The applicants are unable to give effect
to it due
to lack of funds, or no funds at all in the respondent’s bank
account. The applicant believes that the respondent
has money,
perhaps in a different account. To this end, if the respondent does
not want to comply with the court order then the
Court must act and
assist the applicant so that the Fund members are safeguarded with
their pension benefits. It has been held
that ‘
[i]f
the impression were to be created that court orders are not binding,
or can be flouted with impunity, the future of the judiciary,
and the
rule of law, would indeed be bleak.’
[7]
ORDER
[23]
In consideration of the circumstances of this matter, I make the
following order:
The
application, as per the notice of motion including the costs of two
counsel and the Fund’s legal practitioners reasonable
travel
and accommodation cost, on Scale C in terms of Rule 67A, is granted.
RAMDEYAL,
AJ
APPEARENCES
For
the Applicant:
Advocate
P Van der Berg, SC
Accompanied
by Advocate H Drake
Instructed
by:
McIntyre
Van Der Post Attorneys
For
the 1
st
to 4
th
Respondents:
Advocate
M C Louw
Instructed
by:
Peyper
Attorneys
[1]
Municipal
Workers Retirement Fund and Mafube Local Municipality
[2021]
ZAFSHC 342
para 11.
[2]
Mafube
Local Municipality v Municipal Workers Retirement Fund
[2021] ZAFSHC 311
para 9.
[3]
Mafube
Local Municipality v Municipal Workers Retirement Fund and Others
[2023]
ZAFSHC 136
[4]
Municipal
Manager O.R. Tambo District Municipality and Another v Ndabeni
[2022]
ZACC 3
; [2022] BLLR 393 (CC) para 26.
[5]
S v S
and Another
[2019] ZACC 22;
2019
(8) BCLR 989 (CC); 2019 (6) SA 1 (CC).
[6]
Ibid para 58.
[7]
Secretary
of the Judicial Commission of Inquiry into Allegations of State
Capture Corruption and Fraud in the Public Sector including
Organs
of State v
Zuma
[2021]
ZACC 18
;
2021
(5) SA 327
(CC);
2021
(9) BCLR 992
(CC)
para 87.