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[2024] ZAKZPHC 57
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Hillhouse v Pidelta (Pty) Ltd and Another (1237/2024P) [2024] ZAKZPHC 57 (29 July 2024)
Last
amended version 29 July 2024.
IN
THE HIGH COURT OF SOUTH AFRICA
KWAZULU-NATAL
DIVISION, PIETERMARITZBURG
Case
no:
1237/2024P
In
the matter between:
NEIL
JEREMY MCPHERSON HILLHOUSE
APPLICANT
and
PIDELTA
(PTY) LTD
FIRST RESPONDENT
ALEXANDER
FORBES
SECOND RESPONDENT
Coram:
Mossop J
Heard:
24 July 2024
Delivered:
29 July 2024
ORDER
The
following order is granted:
1.
The urgent application is enrolled.
2.
The urgent application is dismissed.
3.
The applicant shall pay only the first respondent’s
costs,
taxable on scale B.
JUDGMENT
MOSSOP
J
:
Introduction
[1]
This application involves a herd of cattle, a failing kidney
and an accumulated pension benefit. The herd of cattle belongs to the
first respondent. The failing kidney belongs to the applicant. The
accumulated pension benefit also belongs to the applicant, but
is
held by a pension fund, which has decided, for the time being, not to
pay those benefits out to the applicant. How those facts
coincide
requires a consideration of the broader factual matrix applicable to
this matter.
The
facts
[2]
The applicant is a former employee of the first respondent,
having commenced his employment with it in October 2015. He was
initially
employed as its livestock manager but later also became the
manager of one of its crop farms.
[3]
Whilst employed by the first respondent, the applicant was
obliged in terms of his contract of employment to contribute to a
pension
fund in which his employer, the first respondent, was a
participating member. The name of the retirement fund was the AF
Retirement
Fund, which has two components, namely the AF Access
Retirement Fund (Pension Section) and the AF Access Retirement Fund
(Provident
Section). I shall refer to this entity simply as ‘the
pension fund’. This is the pension fund mentioned in the
introduction
to this judgment.
[4]
During November 2021, and after several years of employment
with the first respondent, the applicant had the great misfortune of
suffering end-stage kidney failure and was compelled to first undergo
regular kidney dialysis and then to undergo a kidney transplant.
In
his founding affidavit, the applicant speculates that his health
challenges ultimately proved to be unattractive to his employer,
who
then allegedly fabricated a reason to dismiss him from its
employment. There is, however, no evidence to this effect. On the
contrary, there is sufficient evidence that the first respondent was
sympathetic to his condition and did all that it could to
assist him
in his moment of need and in the performance of his obligations to
it.
[5]
That notwithstanding, the first respondent did institute
disciplinary proceedings against the applicant in June 2023, arising
out
of his alleged unsatisfactory performance as manager of its herd
of cattle. The allegations made against him at the disciplinary
hearing were threefold, namely:
(a)
A failure to adequately manage the herd of cattle entrusted to him;
(b)
The unauthorised use of the first respondent’s property by
permitting 70 of his personal
herd of cattle to graze on the first
respondent’s land; and
(c)
Undertaking business in direct competition with the business of his
employer.
[6]
It appears that the applicant admitted
his guilt on all three of the charges at his disciplinary hearing. A
copy of the judgment
of the chairman of the disciplinary hearing
forms part of the papers in this matter and records that fact. On 28
June 2023, the
applicant was consequently found guilty on all three
charges, with the recommended sanction being that his employment with
the
first respondent be summarily terminated. The first respondent
accepted that recommendation and the applicant’s employment
with it came to an end. The applicant has at no stage attempted to
overturn the findings and recommendations of the disciplinary
hearing, which accordingly remain undisturbed.
[7]
His dismissal by the first respondent left the applicant
without an income. He has stated in his founding affidavit that he
still
requires medical treatment arising out of his condition. I am
not entirely sure what that treatment encompasses, besides the
removal
of an AV fistula, about which more later, for no expert
medical evidence has been adduced by the applicant. Having lost his
income,
the applicant states that he has no way of paying for his
future medical treatment. He, however, believed that he would be able
to utilise his accumulated pension benefit held by the pension fund
to meet both his living expenses and his future medical expenses.
[8]
That expectation was dashed when the first respondent
reported to the
pension fund at the end of July 2023 that it had suffered certain
financial losses due to the conduct of the applicant.
It indicated to
the pension fund that it had preferred criminal charges against the
applicant with the South African Police Services
(the SAPS) relating
to the theft of cattle from its herd to the value of approximately R4
million and requested that the
pension fund exercise its discretion
in terms of the provisions of s 37D(1)
(b)
(ii) of the
Pension Funds Act 24 of 1956 (the Act) to withhold payment to the
applicant of his pension benefit, pending the finalisation
of an
action that it intended bringing against him for the losses that it
had allegedly suffered.
[9]
In response to the sharing of this information with it, the
pension fund states, in an affidavit that it delivered (the
explanatory
affidavit), that it advised the first respondent that the
laying of a charge with the SAPS was insufficient, on its own, to
persuade
the pension fund to withhold the applicant’s pension
benefits. It advised the first respondent that
it required to be satisfied that the first respondent had made out a
prima facie case against the applicant and that the first
respondent
had a reasonable chance of succeeding in the proceedings that it
instituted against the applicant. The pension fund
furthermore
advised that it had to be satisfied that the first respondent was not
unduly delaying the prosecution of the civil
proceedings and was
proceeding with all due haste to complete them. The pension fund,
finally, pointed out to the first respondent
that it had to consider
the interests of the applicant and the interests of the first
respondent and to weigh each up when exercising
its discretion. As
these interests are not perpetually static and might change from time
to time, it advised that a decision to
withhold a pension benefit is
not a permanent decision and is susceptible to revision and change.
[10]
In
its explanatory affidavit, the pension fund sets out in exquisite
detail all the steps that it took when considering the matter.
It
points out that the applicant’s matter served before its
Benefits Subcommittee (BSC), being the appropriate body to consider
the issue. It narrates that the BSC regularly held meetings at which
the applicant’s matter featured on the agenda of issues
and was
considered and discussed.
[1]
The
pension fund has been entirely transparent in its approach to the
matter and has readily made available the minutes of its
meetings.
[11]
Rather than displaying a subservient,
slavish willingness to do as was asked of it by the first respondent,
as was alleged by the
applicant, the BSC’s minutes demonstrate
that it displayed an independent mind in considering the first
respondent’s
request. Indeed, it is possible to discern from
the minutes the evolution of a growing disquiet by the BSC with the
lack of action,
at least initially, by the first respondent in
commencing with its civil action against the applicant. Thus, for
example, at the
meeting on 29 November 2023, the BSC’s minutes
recorded that a copy of the first respondent’s summons had not
yet reached
it and that if it had not been received by the date of
the BSC’s next scheduled meeting, the first respondent would be
placed
on terms to deliver a copy to it within 30 days, failing which
the pension benefit would be released by the pension fund to the
applicant.
[12]
A copy of the summons was, however,
received by the pension fund a few days later, on 4 December 2023.
The summons was comprised of a principal claim and three
alternatives to it, being the following:
(a)
A claim for the physical return of 350 head of cattle allegedly
unlawfully removed from the first respondent’s herd by the
applicant, or their value in the amount of approximately R4 million;
(b)
Alternatively thereto, a claim that the applicant failed to
exercise control over the herd or to effectively monitor it and, as a
consequence, 350 head of cattle went missing;
(c)
Further alternatively thereto, a claim that the applicant owed
the first respondent a fiduciary duty and breached that duty by
allowing
350 head of cattle to be removed from the first respondent’s
land; and
(d)
Finally, an alternative claim that the applicant breached his
fiduciary duty to the first respondent by speculating in cattle for
his own account and utilised the first respondent’s resources
to, inter alia, feed and medicate the cattle that he speculated with
and thus during his period of employment, the applicant made
a secret
profit of approximately R3,2 million.
[13]
The summons was accompanied by a letter
from the first respondent’s attorneys. The BSC took into
account what was stated therein,
namely that:
(a)
The applicant had previously admitted to
speculating in cattle, which was allegedly a breach of his fiduciary
duties owed to the
first respondent;
(b)
The applicant had been found guilty at
his disciplinary hearing on three counts of gross misconduct; and
(c)
The applicant had admitted permitting
his own cattle to graze on the first respondent’s land.
[14]
Four days later, on 8 December 2023, the
applicant responded to the first respondent’s attorney’s
letter that accompanied
the summons and made his own representations
to the BSC. The BSC noted in its records that the applicant stated
that he required
his pension benefits urgently for medical purposes
and further noted that the applicant:
(a)
Complained that the matter had been
delayed excessively by the first respondent;
(b)
Disputed the outcome of the disciplinary
hearing; and
(c)
Denied that s 37D(1)
(b)
applied to the facts of his matter.
[15]
After
receipt of the applicant’s representations, the pension fund
states that the BSC resolved to meet again on 13 December
2023. The
day before the scheduled meeting, a representative of the pension
fund’s legal department circulated an email to
members of the
BSC to assist them in their deliberations the next day. In that
email, a copy of which is before the court, the
legal advisor drew
the attention of the members of the BSC to the applicable legal
principles. The legal advisor stressed that
the BSC was required to
have regard to all the facts before it and advised that claim four of
the first respondent’s particulars
of claim inferred dishonesty
on the part of the applicant.
[2]
I differ with this conclusion to the extent that only claim four
alleges dishonesty. In my view, the principal claim, which deals
with
the disappearance of 350 head of cattle from the first respondent’s
land, is also potentially infused with an element
of dishonesty. The
advice contained in the email was tendered to the BSC members in a
neutral, well-balanced fashion and displayed
no evidence of being
slanted in favour of any one of the parties.
[16]
The next day, the BSC met, considered
the matter and the facts before it and resolved to provisionally
withhold the applicant’s
pension benefits. It was therefore
satisfied that a prima facie case had been made out against the
applicant and that the first
respondent had a reasonable chance of
succeeding with that case.
[17]
Those are the facts that constitute the
matrix against which this matter must be considered.
The
nature of the relief claimed
[18]
This application was launched as an urgent application in
February 2024. It is immediately apparent that it does not seek to
review
the pension fund’s decision. It does, however, seek the
release of the applicant’s pension benefit, strangely, by
primarily
focussing upon the first respondent. In its original form,
the notice of motion
claimed the following
relief:
‘
1.
The ordinary forms and service provided for in the Rules and allowing
the matter to be heard
as one of urgency in terms of Rule 6(12).
2.
The applicant be entitled to withdraw his pension fund interest held
through the fist (sic)
respondent and administered by the second
respondent.
4.
The first respondent be ordered to
immediately attend to the processing of all required documentation to
enable the applicant to
withdraw his aforesaid pension monies.
4.
First respondents (sic) to pay the costs of this application on an
attorney-client scale.’
[19]
In this form, the notice of motion appeared to contemplate
that the decision not to pay out the applicant’s pension
benefit
was taken by the first respondent and could be reversed
simply by securing an order directing the first respondent to
complete
the necessary documentation that would have to be presented
when a request is made to the pension fund to pay out a pension
benefit.
That, however, was factually incorrect, for the first
respondent did not make the decision to withhold the applicant’s
pension
benefit.
Urgency
[20]
Before proceeding further, it is
appropriate to consider the issue of urgency. As the notice of motion
indicated, the application
was initially brought as an urgent
application. Whether the matter was truly urgent was disputed both by
the first respondent and
the second respondent. That issue was not
addressed by the pension fund when it later became involved in the
matter because of
the neutral approach that it ultimately adopted to
the matter. I am of the view that the application was not urgent and
no objective
grounds of urgency were established.
[21]
The applicant has known of his health
condition since before he was dismissed. He was diagnosed with kidney
failure in November
2021 and had his kidney transplant during
February 2023. He was dismissed at the end of June 2023 and
thereafter took no steps
to challenge that dismissal nor did he take
any formal steps regarding the pension benefit. That he only did at
the end of January
2024. There is no real explanation for this
significant delay. Mr Cohen, who appeared for the applicant, argued
that the applicant
only came to know of the decision to withhold his
pension benefit on 22 January 2024 and had not thereafter delayed
unnecessarily
in launching his application. Mr Prinsloo, who appeared
for the first respondent, disputed this and drew my attention to
paragraph
27 of the founding affidavit, where the applicant stated
the following:
‘
On
3 August 2023, I received an email from George Nefdt (“
Nefdt
”)
on behalf of the first respondent, to the extent that the second
respondent had been instructed to withhold my pension
fund benefit. I
annex the email herewith and mark same as annexure
FA 6
.’
The
application was ultimately launched on 29 January 2024. The period
between 3 August 2023 and that date needs to be explained
by the
applicant, but has not been.
[22]
It is undoubtedly so that there is a
clamant human element at play, namely the state of health of the
applicant. It would be heartless
not to acknowledge this. Urgent
applications that deal with life or death matters must obviously
enjoy the attention of the courts
without being made to unnecessarily
stand in line for a hearing. But whether this is such an application
is not clear. No expert
evidence has been presented by the applicant
on this aspect. All that is before the court is a brief letter from a
specialist physician
and nephrologist, Dr B Naidoo. The letter is
unconfirmed by an affidavit and covers a mere nine lines. It, for the
most part, sets
out the applicant’s medical history with regard
to his kidney complaint. All that is stated about his future medical
treatment
appears in the final line of the document, which reads as
follows:
‘
Ideally,
he will require a procedure for his AV Fistula,
[3]
as soon as possible.’
Whether
this is a critical procedure, and if it is urgently required, remains
unexplained.
[23]
The
appropriate order when a point of a want of urgency has been taken,
as it has been in this application, and the point has been
sustained,
is to strike the matter off the roll. In
Commissioner,
South African Revenue Services v Hawker Air Services (Pty) Ltd;
Commissioner, South African Revenue Service v Hawker
Aviation
Partnership and others
,
[4]
Cameron JA, observed that:
‘
Where
the application lacks the requisite element or degree of urgency, the
Court can, for that reason, decline to exercise its
powers under Rule
6(12)
(a)
. The matter is then not properly on the Court’s
roll, and it declines to hear it. The appropriate order is generally
to strike
the application from the roll. This enables the applicant
to set the matter down again, on proper notice and compliance.’
(Footnotes omitted.)
[24]
In the view that I take of this matter,
it is undesirable to simply strike it from the roll and permit it to
return at a later date.
The application has been poorly conceived and
constructed. Notwithstanding the want of urgency, I intend enrolling
it and dealing
with it on its merits.
Joinder
and mis-joinder
[25]
Paragraph
2 of the notice of motion acknowledged that the party cited as being
the second respondent, which is identified simply
as being ‘Alexander
Forbes’,
[5]
was only the
administrator of the pension fund. In other words, it was not the
pension fund itself.
[26]
The application was served on the first respondent and upon an
entity with the name of ‘Alexander Forbes’. In response,
an entity with the name of Alexander Forbes Financial Services (Pty)
Ltd (AFFS) delivered an answering affidavit. In its answering
affidavit, AFFS tellingly made the point that it was not the pension
fund. It explained that it was a separate and distinct legal
entity
to the pension fund and was simply its administrator, as the
applicant himself had alleged in his notice of motion. AFFS
stated
that the pension fund was duly registered in terms of s 4 of the Act
and the applicant was a member of the pension fund
by virtue of his
employment with the first respondent, which was a participating
employer in the pension fund. But AFFS had no
involvement at all in
the decision to withhold the payment of the applicant’s pension
benefit. It lacked the power to withhold,
or make, payments of its
own volition, and was required merely to do the bidding of the
pension fund, which held all such powers.
[27]
In his replying affidavit to this
answering affidavit, the applicant unreservedly and unequivocally
accepted this to be the case.
He thereby acknowledged that he had
cited and served the incorrect entity. Implicit in this
acknowledgment was an admission that
the pension fund, which had
taken the decision to withhold the applicant’s pension benefit,
was not before the court. This
placed the applicant in a difficult
position: he had joined a party that ought not to have been joined
and he had failed to join
a party that ought to have been joined.
[28]
To overcome this, the applicant simply
delivered an amended notice of motion. In so doing, besides amending
the relief sought, he
also added Alexander Forbes Access Retirement
Fund as the third respondent. No attempt, however, has been made to
formally add
the pension fund to the citation of the parties
participating in this application. The amended notice of motion now
reads as follows:
‘
1.
The ordinary forms and service provided for in the Rules and allowing
the matter to be heard
as one of urgency in terms of Rule 6(12).
2.
Pending the final determination of the action proceedings by the
First Respondent in this
court under case number 17687/24P
[6]
:
2.1
The applicant be entitled to withdraw his pension
fund interest held through the first respondent and administered
by
the second respondent.
2.2
Directing the third respondent to make payment of
the sum of
R546,577.48
to the applicant comprising the
applicant’s pension benefits currently in the custody of the
Fund.
2.3
The first respondent be ordered to immediately attend to the
processing of all required documentation
to enable the applicant to
withdraw his aforesaid pension monies.
3.
Alternatively, (sic) to the above:
3.1
The applicant be entitled to withdraw his pension fund interest held
through the first respondent and
administered by the second
respondent.
3.2
Directing the third respondent to make payment of the sum of
R546,577.48
to the applicant comprising the applicant’s
pension benefits currently in the custody of the Fund.
3.3
The first respondent be ordered to immediately attend to the
processing of all required documentation
to enable the applicant to
withdraw his aforesaid pension monies.
5.
First respondents (sic) to pay the costs
of this application.
6.
Ordering that Alexander Forbes Financial
Services (Pty) Ltd pay the costs of this application jointly and
severally only in the
event that they oppose this application.
7.
Further and/or alternative relief.’
The
sum of R546 577.48 is the value of the applicant’s pension
benefit held with the pension fund.
[29]
The amended notice of motion introduces
some additional specificity to the relief claimed by the applicant
but, essentially, continues
to seek an order that the applicant be
permitted to withdraw his pension benefit without actually
challenging the decision of which
complaint was made.
[30]
There are, however, a number of further
observations that arise out of the amended notice of motion. Firstly,
it does not appear
that any notice of intention to amend was issued,
as contemplated by Uniform rule 28. Secondly, the Uniform rules
require a joinder
application to be brought when a new party is
sought to be joined to an existing application. This, too, was not
done. Thirdly,
notwithstanding the fact that the applicant conceded
that the second respondent had been incorrectly joined, he
nonetheless still
sought a costs order against it in the event that
it opposed the application. The applicant knew that the second
respondent had
opposed his application by virtue of its answering
affidavit, in response to which the applicant had conceded the
correctness of
the second respondent’s opposition. Why costs
should be sought against the second respondent is therefore not
apparent.
[31]
Perhaps the most significant of these
issues is the improper joinder of the pension fund as a respondent. I
need not, however, dwell
on this because the pension fund took an
entirely practical, and commendable, approach to the matter. Without
acknowledging the
correctness of the procedure invoked by the
applicant to draw it into the matter, which, indeed, the pension fund
disputed to be
correct, it consented to be joined to the application
on three conditions:
(a)
Neither the pension fund nor the
applicant would seek costs from each other arising out of the
application;
(b)
The pension fund would be permitted to
deliver the explanatory affidavit already referred to, in which it
would merely detail the
steps that it took in terms of s 37D(1)
(b)
of the Act; and
(c)
The pension fund would not formally
oppose the application and would abide the decision of this court.
[32]
The applicant agreed to these conditions
and the pension fund consequently delivered a notice to abide the
decision of this court.
Simultaneously, it delivered its explanatory
affidavit, in which it simply set out the steps that it took, and the
process that
it followed, in deciding to withhold the pension benefit
due to the applicant. It should, however, be noted that in doing as
it
did, the pension fund did not agree that the applicant’s
application should succeed. It appears to adhere to the view that
the
application should not be granted based upon the following statement
in its affidavit:
‘
In
the event that the Applicant is successful on the merits (a position
for which the Fund does not contend) …’.
[33]
With the pension fund now a party to the
matter, the applicant finally withdrew its application against the
second respondent at
the end of February 2024 and, by agreement with
that party, avoided having to pay its costs for being incorrectly
cited. I consequently
need not say anything further about this issue.
The
Act
[34]
The
general approach is that pension benefits are regarded as being
untouchable and sacrosanct.
[7]
However, s 37D(1) of the Act abrades some of the impregnability of a
pension benefit, albeit in a measured and discrete fashion,
where it
states that:
‘
(1)
A registered fund may –
(a)
…
(b)
deduct any amount due by a member to his employer on the date of
his retirement or on which he ceases to be a member of the fund,
in
respect of –
(i)
…
(ii)
compensation (including any legal costs recoverable
from the member
in a matter contemplated in subparagraph
(bb)
) in respect of
any damage caused to the employer by reason of any theft, dishonesty,
fraud or misconduct by the member, and in
respect of which –
(aa)
the
member has in writing admitted liability to the employer; or
(bb)
judgment has been obtained against the member in any court,
including a magistrate’s court,
from any benefit payable
in respect of the member or a beneficiary in terms of the rules of
the fund, and pay such amount to the
employer concerned…’
[35]
The
purpose of this section, unashamedly, is to protect the interests of
employers against the dishonest conduct of employees. It
is now
settled law that s 37D allows a pension fund to withhold a
pension benefit, even where an employee has not admitted
liability to
the employer or where a judgment has not yet been obtained against an
employee. This was the approach adopted in
Highveld
Steel and Vanadium Corporation Ltd v Oosthuizen
,
[8]
where the Supreme Court of Appeal, per Maya JA, stated the following:
‘
It
seems to me that to give effect to the manifest purpose of the
section, its wording must be interpreted purposively to include
the
power to withhold payment of a member’s pension benefits
pending the determination or acknowledgment of such member’s
liability. The Funds therefore had the discretion to withhold payment
of the respondent’s pension benefit in the circumstances.
I
dare say that such discretion was properly exercised in view of the
glaring absence of any serious challenge to the appellant’s
detailed allegations of dishonesty against the respondent.’
(Footnote omitted.)
The
rules of the pension fund
[36]
The pension fund itself is governed by
its own internal rules, which were put up by the second respondent as
an annexure to its
answering affidavit. The two relevant rules are
sub-rule 11.1 and sub-rule 11.3.
[37]
Sub-rule 11.1 provides as follows:
‘
The
TRUSTEES shall have the right to make such deductions from the
benefit to which a MEMBER or other beneficiary is entitled in
terms
of the RULES as are permitted in terms of section 37D(1)(a), (b) and
(c) of the ACT and in respect of which a claim has been
lodged in
writing within such a reasonable time of the event giving rise to the
benefit as the TRUSTEES may from time to time fix
for making such
claims.’
[38]
Sub-rule 11.3 states as follows:
‘
Notwithstanding
any other provisions of these RULES, the TRUSTEES may, where an
EMPLOYER has instituted legal proceedings in a court
of law and/or
laid a criminal charge against the MEMBER concerned for compensation
in respect of damage caused to the EMPLOYER
as contemplated in
section 37D of the ACT, withhold payment of the benefit until such
time as the matter has been finally determined
by a competent court
of law or has been settled or formally withdrawn; provided that:
(a)
the amount withheld shall not exceed the
amount that may be deducted in terms of section 37D(1)(b)(ii) of the
ACT;
(b)
the TRUSTEES in their reasonable
discretion are satisfied that the EMPLOYER has made out a
prima
facie
case against the MEMBER
concerned and there is reason to believe that the EMPLOYER has a
reasonable chance of success in the proceedings
that have been
instituted;
(c)
the TRUSTEES are satisfied that the
EMPLOYER is not at any stage of the proceedings responsible for any
undue delay in the prosecution
of the proceedings;
(d)
once the proceedings have been
determined, settled or withdrawn, any benefit to which the MEMBER is
in titled is paid forthwith;
and
(e)
the TRUSTEES, at the express written
request of a MEMBER whose benefit is withheld, may, if applicable and
practical, permit the
value of the MEMBER’S benefit as at the
time of such request to be isolated, in whatever manner the TRUSTEES
believe appropriate,
from the possibility of a decrease therein in as
a result of poor investment performance.’
I
shall collectively refer to these two sub-rules as ‘the
sub-rules’.
[39]
The
discretion afforded to pension funds generally to withhold pension
benefits by the Act is mirrored by the specific sub-rules
governing
the pension fund. The applicant, as a member of the pension fund, is
bound by the sub-rules.
[9]
The
pension fund’s discretion
[40]
There was no dispute in argument before
me that the pension fund had a discretion to withhold the applicant’s
pension benefits.
That point, in my view, was correctly conceded by
Mr Cohen. I shall therefore accept that to be the case.
[41]
A discretion is not simply a choice. It
is more nuanced than that. Where a discretion exists, it will be
comprised of a number of
interrelated factors which must all be
considered. These factors overlap and are not always individually
considered: they may,
however, be individually considered, but it is
not invariably so that they are. When the party possessing the
discretion exercises
it, it considers a range of available, and
relevant, alternative courses of action. After weighing up the
options and the merits
and demerits associated with each course of
action, one is selected. In doing so, it is expected that the party
exercising the
discretion will do so in a judicious or sagacious
manner. The exercise of a discretion is therefore a process and does
not simply
involve the random making of a choice.
[42]
In
NBS
Boland Bank Ltd v One Berg River Drive CC and others; Deeb and
another v ABSA Bank Ltd; Friedman v Standard Bank of SA Ltd
,
[10]
the Supreme Court of Appeal observed that:
‘
It
is ... a rule of our common law that unless a contractual
discretionary power was clearly intended to be completely unfettered,
an exercise of such a discretion must be made
arbitrio
bono viri
…’
[43]
I accept that the power afforded to the
pension fund by the Act is not a contractual power and is a statutory
power given to it
by the legislature. But the rules of the pension
fund are contractual in nature and the applicant has subscribed to
them through
his membership of the pension fund. In my view, it
follows that the pension fund’s discretion ought to be
exercised in a
fair and reasonable manner.
[44]
It is clear from the wording of s
37D(1)
(b)
of the Act that the touchstone for the existence, and exercise, of
the discretion is the presence of allegations of
theft,
dishonesty, fraud or misconduct on the part of the member of the
pension fund. Absent the existence of any of these allegations,
the
discretion is illusory and ceases to exist and the pension fund may
not retain any funds.
The
applicant’s argument
[45]
After some rumination, Mr Cohen
submitted that what the applicant sought was not an interim interdict
but a final interdict. With
that, he acknowledged, went an elevated
onus of proof.
[46]
In his heads of argument, Mr Cohen made
the submission that the true dispute between the parties is that the
first respondent has
refused to complete the necessary documentation
that would permit the applicant to withdraw his pension benefits from
the pension
fund. The applicant therefore seeks an order that it must
do so. He submitted further that what is sought by the applicant was
a mandatory interdict which requires:
‘…
a person to do some
positive act to remedy a wrongful state of affairs for which he is
responsible.’
[47]
The heads of argument go on to make the
further point that:
‘
In
toto, the precise relief claimed in the urgent [application] was
directed only at Pidelta [the first respondent] entitling the
Applicant to receive his Pension Fund Benefit, the necessary
corollary being Prayer 3 where the First Respondent was ordered to
immediately attend to the processing of all required documentation to
enable the Applicant to withdraw the Pension monies.’
[48]
In response to a question from the
court, Mr Cohen acknowledged that both the first respondent, in
making the request that the applicant’s
pension benefit be
retained, and the pension fund, in ultimately agreeing to that
request, had acted perfectly lawfully. That appears
to me to be
correct.
The
first respondent’s argument
[49]
In a brief argument, Mr Prinsloo
submitted that, in light of the concession by Mr Cohen that neither
the first respondent nor the
pension fund had acted unlawfully, this
was the end of the matter. There was, thus, no need for a ‘positive
act to remedy
a wrongful state of affairs’, to use Mr Cohen’s
own words. This was because there was no wrongful state of affairs:
no clear right had been established by the applicant and therefore no
right attaching itself to the applicant had been infringed
by the
first respondent and a final interdict could, in the circumstances,
not be granted.
[50]
Mr Prinsloo also submitted that the
applicant had not established the third requirement for the final
interdict sought. He argued
that the applicant had an alternative
remedy available to him, namely to approach the pension fund
adjudicator (the adjudicator)
for relief. Mr Cohen had previously
argued that the door to the adjudicator had been slammed shut and
bolted and was therefore
not an alternative remedy available to the
applicant. His reasoning in this regard was that the first respondent
had commenced
its civil action against the applicant before a
complaint could be registered by the applicant with the adjudicator.
Section 30H(2)
of the Act provides as follows:
‘
The
Adjudicator shall not investigate a complaint if, before the lodging
of the complaint, proceedings have been instituted in any
civil court
in respect of a matter which would constitute the subject matter of
the investigation.’
Thus, an approach to the
adjudicator was not possible.
[51]
That wording, at first reading, would
appear to buttress Mr Cohen’s submission. But Mr Prinsloo saw
it in a different way
and submitted that, on the facts of this
matter, the only complaint that the applicant could have made to the
adjudicator about
the pension fund was that it had not properly
exercised its discretion in coming to its decision to withhold his
pension benefit.
That, however, was not the subject matter in the
civil proceedings instituted by the first respondent, which sought to
hold the
applicant liable for the loss of the 350 head of cattle. The
adjudicator would not be required to determine the truth of those,
or
any other, allegations made in the first respondent’s
particulars of claim, and thus, so Mr Prinsloo’s argument
went,
the door to the adjudicator remained very much open. The applicant
thus had an alternative remedy available to him.
Analysis
[52]
The
requirements of a final interdict are well known.
[11]
It appears to me that the applicant has not established any of the
three requirements necessary for such an interdict to be granted,
as
was submitted by Mr Prinsloo.
[53]
The applicant has not established a
clear right to the relief that he seeks. But for the existence of s
37D of the Act, and sub-rules
11.1 and 11.3 of the pension fund
rules, the applicant’s argument may have been more attractive
and the existence of the
right contended for more certain and
definite. But that section of the Act and the sub-rules exist and
they prohibit the applicant’s
right to claim payment of his
pension benefit in the face of allegations of dishonest conduct by
him. Those allegations have been
made and properly assessed by the
pension fund and have been accepted for the time being by it. The
right to claim payment is therefore
not a clear right. In fact, it is
not a right at all. Absent a clear right, it follows that the second
requirement for a final
interdict, an act of interference with a
clear right, has also not been established.
[54]
As regards the third requirement for a
final interdict, it seems to me that the applicant indeed has an
alternative remedy. The
purpose of s 30H(2) of the Act:
‘…
is to
deal
with the fact that civil courts, usually the high court, and the
adjudicator have concurrent jurisdiction over the same legal
disputes’.
[12]
The
Act, in s 1, defines a complaint to mean:
‘“
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 –
(a
)
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;
(b
)
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;
(c
)
that a dispute of fact or law has arisen in relation to
a fund between the fund or any person and the complainant;
or
(d
)
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.’
[55]
In
Cape
Town Municipality v South African Local Authorities Pension Fund and
another
,
[13]
Mthiyane AP observed that
the
role of s 30H(2) of the Act:
‘…
is to
deal with concurrence of jurisdiction in circumstances where the
matter to be investigated by the adjudicator is a matter
already
before the civil court having jurisdiction. In determining what the
matter is before the civil court and comparing it with
the matter
which would be the subject of an investigation by the adjudicator it
is appropriate to adopt the same approach
as that in the case of a
plea of
lis alibi pendens
as
discussed by Wallis JA in
Caesarstone
Sdot-Yam Ltd
v
World of Marble and Granite 2000 CC and Others
2013
(6) SA 499
(SCA).’
[56]
The exercise of a discretion has no
presence in the first respondent’s claim against the applicant.
It seems to me that, given
the definition of the word ‘complaint’
employed in the Act, in any complaint made to the adjudicator, the
adjudicator
would not be required to determine whether the applicant
was liable to the first respondent, unlike the court hearing the
civil
trial. It appears that Mr Prinsloo’s argument is,
therefore, sound and that the applicant does have an alternate
remedy.
[57]
The applicant has thus failed to establish
any of the grounds that must be present for the granting of a final
interdict.
[58]
The
difficulty for the applicant is that he has not directly challenged
the decision of the pension fund itself. In none of the
affidavits
delivered by him are grounds advanced that strike at the discretion
exercised by the pension fund. As pointed
out earlier, the
focus of the applicant’s relief has consistently been directed
at compelling the first respondent to complete
the requisite pension
benefit documentation and not at challenging the decision taken by
the pension fund. Even when the matter
was argued, he still sought
his primary relief against the first respondent.
[14]
[59]
In focussing his relief on the first
respondent, the applicant appears to have misconceived where his real
cause of complaint lay
and what his true remedy was. The first
respondent itself took no decision to withhold the applicant’s
pension benefit: it
simply drew certain facts to the attention of the
pension fund and requested it to consider making such a decision. The
pension
fund acceded to this request after exercising its discretion.
Whether or not documentation is completed by the first respondent
is
entirely irrelevant in the face of the pension fund’s decision.
Indeed, the pension fund itself threatened to pay out
the applicant’s
pension benefit, despite the absence of such documentation prepared
by the first respondent, if a copy of
the first respondent’s
summons was not timeously received by it, thus giving an indication
of the real value of such documentation.
The decision to withhold the
pension benefit is thus not that of the first respondent but that of
the pension fund. Until such
time as that decision is overturned (or
varied, as the pension fund has indicated that the decision that it
has taken is not permanent),
the pension benefit will not be paid to
the applicant. The application therefore cannot succeed.
Costs
[60]
In my view, it would be fair, as
suggested by Mr Prinsloo, to order that the costs that must be
awarded should be taxed on scale
B.
Order
[61]
I accordingly make the following order:
1.
The urgent application is enrolled.
2.
The urgent application is dismissed.
3.
The applicant shall pay only the first respondent’s
costs,
taxable on scale B.
MOSSOP J
APPEARANCES
Counsel
for the applicant:
Mr
S S Cohen
Instructed
by:
Alhadeff
Attorneys
2
Thelma Crescent
Bagleyston
Johannesburg
Saxonwold
Care
of:
Viv
Green Attorneys Incorporated
132
Roberts Road
Clarendon
Pietermaritzburg
Counsel
for the first respondent:
Mr
J C Prinsloo
Instructed
by:
Cox
Yeats
Ncondo
Chambers
45
Vuna Close
Umhlanga
Ridge
Durban
Counsel
for the second respondent:
No
appearance
Instructed
by
Counsel
for the third respondent:
No
appearance
Instructed
by:
[1]
Meetings
were held on 30 August 2023, 27 September 2023, 25 October 2023, 29
November 2023 and 13 December 2013.
[2]
The
third alternative to the principal claim, and marked as claim four,
related to the generation by the applicant of a secret
profit at the
expense of the first respondent.
[3]
An arteriovenous fistula is a connection
that
is made between an artery and a vein in order to permit a dialysis
machine a point of access to the human body
.
[4]
Commissioner,
South African Revenue Services v Hawker Air Services (Pty) Ltd;
Commissioner, South African Revenue Service v Hawker
Aviation
Partnership and others
[2006]
ZASCA 51
;
2006 (4) SA 292
(SCA);
[2006] 2 All SA 565
(SCA) para 9.
[5]
The
description of the second respondent as it appears in the founding
affidavit is the following: ‘The second respondent
is
Alexander Forbes a company duly incorporated in terms of the laws of
the Republic of South Africa, and inter alia, a financial
and
intermediary services provider in terms of Act 37 of 2002, with
registered alternatively principal address situate at 115
West
Street Sandton Johannesburg.’
[6]
The notice of motion incorrectly refers to the case number as being
17687/24P when it should be 17687/23P.
[7]
SA
Metal Group (Pty) Ltd v Jeftha
2020
JDR 2379 (WCC) para 9; see also s 37A(1) of the Act.
[8]
Highveld
Steel and Vanadium Corporation Ltd v Oosthuizen
[2008]
ZASCA 164
;
2009 (4) SA 1
(SCA) para 19.
[9]
Section
13 of the Act provides as follows: ‘Subject to the provisions
of this Act, the rules of a registered fund shall
be binding on the
fund and the members, shareholders and officers thereof, and on any
person who claims under the rules or whose
claim is derived from a
person so claiming.’
[10]
NBS
Boland Bank Ltd v One Berg River Drive CC and others; Deeb and
another v ABSA Bank Ltd; Friedman v Standard Bank of SA Ltd
1999 (4) SA 928
(SCA) para 25.
[11]
They are: a clear right, an act of interference and no other
adequate remedy. See
Setlogelo
v Setlogelo
1914 AD 221
at 227.
[12]
Cape
Town Municipality v South African Local Authorities Pension Fund and
another
[2013]
ZASCA 175; 2014 (2) SA 365 (SCA) para 29.
[13]
Ibid
para 30.
[14]
In a third and final reworking of the notice of motion, attached to
the applicant’s heads of argument was the following
proposed
order:
‘
1.
Pending the outcome of civil proceedings instituted by the First
Respondent in this Court,
the First Respondent is ordered to
immediately attend to the processing of all required documentation
to be addressed to the
Third Respondent to enable the Applicant to
withdraw his Pension monies presently held by the Third Respondent
in the sum of
R546,577,48.
2.
Ordering the Third Respondent to so make payment to the Applicant in
the sum
of R546,577.48 after having received the necessary
instruction from the First Respondent.
3.
Declaring that the
Applicant withdraw his Pension Fund interest held by the Third
Respondent and that the Third Respondent so make payment to the
Applicant.
4.
Costs of Suit against the First Respondent.’