SAFLII Note: Certain personal/private details of parties or witnesses have been redacted from this document
in compliance with the law and SAFLII Policy
IN THE HIGH COURT OF SOUTH AFRICA
(GAUTENG DIVISION, PRETORIA)
CASE NUMBER: 075889/2024
HEARD ON: 19 MARCH 2025
JUDGMENT: 26 MAY 2025
(1) REPORTABLE: YES/NO
(2) OF INTEREST TO OTHER JUDGES: YES/NO
(3) REVISED: NO
DATE: 26 May 2025
SIGNATURE :
In the matter between:
TAKALANI FORTUNATE MUDAU FIRST APPLICANT
ANZATSHILIDZI MUDAU SECOND APPLICANT
AMPFARISO MUDAU THIRD APPLICANT
KHATHUTSHELO PERCY MAFUNISA FOURT H APPLICANT
RONEWA MAFUNISA FIFTH APPLICANT
AND
TELKOM RETIREMENT FUND FIRST RESPONDENT
MOMENTUM METROPOLITAN LIFE LIMITED SECOND RESPONDENT
PENSION FUND ADJUICATOR THIRD RESPONDENT
___________________________________________________________________
JUDGMENT
STRIJDOM, J
1. This is an appeal in terms of section 30P of the Pension Funds Act 24 of 1956
(“the Act”) against the deteremination of the Pension Fund Ad judicator dated
24 May 2024.
2. The application is opposed by the first respondent, the (Telkom Retirement
Fund. “the Fund”).
3. The applicants seek the following relief:
3.1 That the Pension Fund Adjudicator’s determination dated 24 May 2024
with reference number P[...] be set aside.
3.2 That the annuity undre the administration of the second respondent in
the name of AN Netshimbupfe (“the deceased”) be terminated.
3.3 The balance of the pension funds plus interest be paid to the
beneficiaries as per the beneficiary nomination f orm signed by the
deceased.
4. At the commencement of the application it wa s submitted on behalf of the first
respondent that the applicants are time barred from instituting an appeal in
terms of section 30P of the Act. It wa s later conceded that the appeal was
instituted timeously.
5. It wass further contended by the first respondent that the supplementary
affidavit filed by the applicants and two affidavits attached to the applicant’s
replying affidavit are not properly before Court.1 I ruled that the said affidavits
are not properly before me for the reason that the applicants have not made
an application for leave to submit further affiavits as contemplated in High
Court Rule 6(5)(e).
1 Caselines: 001 -82 para 29
6. The late Mrs Netshimbupfe (“the deceased”) was an employee of Telkom
Limited (“the employer”) and by virtue of her employment, the deceased
beame a member of the Telkom Retirement Fund (“the first respondent. ”)
7. During the year 2017 the deceased was diagnosed with cancer and received
chemotherapy and radiation treatment. Her condition worsened in the year
2020 and the cancer developed to stage 4.
8. As the deceased was not fit for work, she resigned from her employment by
opting for voluntary severance package.
9. On retirement the deceased wa s offered counselling which was facilitated by
first respondent, the counselling was offered to educate the deceased on the
options available on her retirement. After the counselling session on the 12th
of March 2020 the decease d was furnished with forms to complete with the
assistance of a financial advisor/employee of the first respondent.
10. On 12 June 2020 the deceased made a codicil to her Will and sets fourth her
wishes regarding the distribution of her assets. Her condition worse ned and
as a result she passed away on 25 July 2020.
11. The applicants’ main contention is that since the deceased was aware that
she was terminally ill, she would not have elected to purchase an annuity and
mut have been coerced or misled into doing so. Consequently, the appli cants
seek that the remaining pension benefits be immediately paid to them in terms
of the decea sed’s wishes as recorded in a nomination form.
12. The following facts are common cause between the parties:
12.1 The deceased was a member of the Fund by virtue of her employment
with Telkom SA. Her membership with the Fund Commenced on 1
July 1996.
12.2 The deceased’s service with the employer was terminated voluntarily
with effe ct from 1 April 2020.
12.3 At the date of termination the de ceased was 59 years old and qualified
for early retirement in t erms of Fund Rule 5.2.2 .
12.4 On or about 12 March 2020, the deceased submitted a withdrawal
claim form to the Fund.
12.5 In terms of the withdrawal claim form, the deceased purportedly
elected to receive a portion of her benefit to the value of R150 000,00
as a lump sum with the remainder to be used to purchase an annuity.
The withdrawal claim form is attached to the founding affidavit as
“ANN3”.2
12.6 The fund made payment to the deceased in the amount of
R125 751,84 (R150 000 before taxable deductions) as a lump sum.
The remainder of the benefit namely R1 666,416,13 was used to
purchase an annuity in line with the withdrawal claim form.
12.7 On 15 July 2020, the Fund confirmed the above payment to the
deceased by way of a letter marked “TRF3” to the answering affidavit.
12.8 On 13 July 2020 the Fund made payment of the deceased’s monthly
pension for the period April to July 2020 as a lump sum amounting to
R40,185,00.
12.9 The deceased passed away on 25 July 2020.
12.10 On 20 October 2023, the applicants lodged a complaint with the
Pension Funds Adjudicator (“the adjudicator”).
2 Caselines: 001 -65
12.11 On 24 May 2024, the adjudicator handed down the impunged
determination.
12.12 On 9 July 2024, the applicants lodged the present application to set
aside the impugned determination a s contemplated by section 30P of
the Act.
13. It was submitted by counsel for the applicants that the deceased elected the
annuity she elected because she was deceived into believing that it wa s the
right product considering her circumstances, in a nutshell she was sold this
product by the representative of the first respondent not that she chose it.
14. It wa s further contended on behalf of the applicants that the Will of the
deceased is one of the relevant factors and evidence of background facts
confirming that the deceased wa s of the belief that her pension fund will be
distributed as per nomination form.
15. The founding affidavit is deposed to by applicant’s attorney, who does not
have personal knowledge of the relevant facts that the applicants seek to
introduce. The ellegations in the founding affidavit, to a large and material
extent amount to inadmissible hearsay.
16. The facts were told to the attorney by people who have personal knowledge of
the event in question. In para 27 of the replying affidavit the attorney states
that he “has consulted with all the deceased’s dependants and correspond ed
with all the respondents from the inception of the complaint, I have gained
significant understanding on the matter hence I deposed in this application.3
17. The probative value of the allegations in the founding and replying affidavits
depend on the credibility of the applicants and not their attorney. There are
no confirmatory affidavits deposed to by the deceased’s dependants
(applicant s) in support of the factual allegations in the founding affidavit. No
3 Caselines 001 -82 RA para 27
satisfactory explanation has been provided for why the applicants have not
given the evi dence . Nothing prevented the applicants from deposing to the
founding affidavit.
18. The Law of Evidence Amendment Act4 defines hearsay evidence as
“evidence” whether oral or in writing, the probative value of which depends
upon the credibility of any person other than the person giving such evidence.
In terms of section 3 of the Law of Evidence Amendment Act, hearsay
evidence is inadmissible and shall not be admitted save for certain sections
which do not apply in this matter.
19. In my view the hearsay evidence contained in the founding affidavit is
inadmi ssible.
20. At paragraphs 3.1 and 3.2 of the adjudicator’s determination, the adjudicator
records the complaint as follows:
20.1 The complainants wish to be paid in terms of the deceased’s wishes as
captured on the beneficiary nomination form; and
20.2 The deceased could not have purchased an annuity as she was
terminally ill and knew that an annuity would not benefit her.”
21. Since this is an appeal in the wide sence it constitutes a re -hearing of the
appliant’s complaint . It was decided in Meyer v Iscor Pension Fund 5 that
the dispute submitted to the High Court is still a “complaint” as defined in the
Act and must be substantially the same complaint that was submitted to the
adjudicator.
22. Section 13 of the Act provides:
“13. Binding force of rules – subject to the provisions of this Act, the rules of
a registered fund shall be binding on the fund and the memb ers,
4 Act 45 of 1988
5 2003 (2) SA 715 (SCA) at pages 725 -726
shareholdres and offic ers ther eof, and on any person who claims under
the rules whose claim is derived from a person so claiming.”
23. In Tek Corporation Provident Fund and Others v Lorentz6 it was held that:
“… 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 …”
24. It is common cause that the deceased retired from service voluntarily at the
age of 59 and qualified for early retirement in terms of Fund Rule 5.2.2 which
provides:
“5.2.2 A member may after having attained the age of 55 years and before
attaining the normal retirement age retire from service :
(a) If he so decides; or
(b) If he is dismissed from Service by the Employer for a reason other
than a reduction or reorganization of staff.
On Retirement from the Fund, such Member shall become entitled
to a Pension secured by the balance of his Member’s Share, after
any commutation in terms of Rule 5.6.”
25. The term “pension” is defined in the Rules as:
25.1 the pension payable in terms of the Rules; or
25.2 the annuity or annuities, purchased from a registered insurer in terms
of rule 7.2.
26. On 12 March 2020, the deceased submitted a withdrawal claim form to the
Fund wherein she eleted to receive a portion of her benefit, to the value of
R150 000 as a cash lump sum with the remainder to be used to purchase an
annuity. This election is in line with the peremptory wording of Rule 5.2.2
6 [1994] 4 ALL SA 297 (A) at para 28
which provides that a member shall become entitled to a pension after
retirement from the Fund and after any commutation in terms of Rule 5.6.
27. The decease d passed away as a pensioner on 25 July 2020.
28. Rule 6.3.1 provides:
“6.3.1 On the death of a Pensioner who is not an A, B or C – Pensioner, his
Pension shall cease as provided for in Rule 7.3(c)(1). The following benefits
shall then be payable:
(a) A lumpsum of R10 000-00 or such other amount as decided by the
Trustees from time to time, subject to the maximum amount permitted in
terms of income tax legislation; and
(b) Subject to the provisions of Rule 7.1.3 o r Rule 6.4 as applicable, a
Pension to his Qualifying Spouse, commencing on the Pensioner’s death,
equal to 50% of the Pension payable immediately prior to the
commencement of the Pension to the Qualifying Spouse and
(c) A Pension in respect of Qualifying Children of the Pensioner equal in total
to a percentage of the Pensioner’s Pension immediately before his death,
in accordance with the following table:
Number of Qualifying Percentage of Pensioner’s Pension
1. 9,375%
2. 18,75%
3. 28,125%
(d) After the last payment to a Qualifying Spouse’s Pension and/or Qualifying
Children’s Pension has been made, the Trustees shall deduct the total
amount paid to the Pensioner, his Qualifying Spouse, Qualifying Children,
dependants, and/or nominees including any amount which may have been
paid in a lump sum, from the amount of the Member’s Share at the date of
Retirement From the fund. Should there be any positive difference, such
positive difference shall become payable in t erms of Section 37 C of the
Act.”
29. According to Rule 6.3.1, after the death of a pensioner:
29.1 an amount of R10 000 becomes payable. It was stated in the
answering affidavit that the Fund is awaiting documents to process this
payment under subparagraph (a)
29.2 the deceased did not have a sp ouse, so no spousal pension is payable
under subparagraph (b)
29.3 A child’s pension is paid to the second applicant in terms of
subparagraph (c).
29.4 The remaining residue of the benefit is to be distributed in accordance
with section 37 C of the Act.
30. In terms of section 37 C of the Act, the Fund exercises a statutory discretion
regarding the equitable distribution of accrued death benefits. Section 37C(1)
provides:
“37 Disposition of pension benefits upon death of member
(1) Notwithstanding anything to the contrary contained in any law or in
the rules of a registered fund , any benefit (other than a benefit
payable as a pension to the spouse or child of the member in terms
of the rules of a registered fund, which mu st be dealt with in terms
of such rules) payable by such a fund upon the death of a member,
shall …. not form part of the asset in the estate of such a member,
but shall be dealt with in the following manner …”
31. The 4 (four) subsections under section 37C(1) deal with the following
scenarios:
31.1 If the Fund, within 12 months, traces dependants of the member, the
benefit shall be paid to such dependants as deemed equitable by the
Fund to any and or all of those dependants;
31.2 If the Fund does not trace any dependants within 12 months, and the
member has nominated beneficiaries in writing, the benefit shall be
paid to such nominee’s, subject to the deceased’s estate being solved;
31.3 If a member has dependants and has also nominated beneficiaries in
writing, the Fund shall within 12 months pay the benefit to such
dependant or nominee in such proportions as the board deems
equitable.
31.4 If the Fund cannot tra ce a dependant within 12 months and the
member has not nominated a beneficiary, the benefit shall be paid to
the decease d member’s estate.
32. The Fund has a wide discretion to pay a death benefit to some or all of the
dependants and/or nominees in such proportions as it deems equitable.
33. In terms of Rule 6.3.1 the free residue of the benefit remaining after the child’s
pension is fully paid will be dealt with in terms of section 37C.
34. The monthly child’s pension will cease when the second applicant attains the
age of 25 years, at which point the differen ce referred to in Rule 6.3.1 (d) will
be distribute d in accordance ith section 37 C of the Act.
35. In Mashazi v African Products Retirement Benefit Provide nt Fund7 it was
decided that:
“Section 37 of the Act was intended to serve a social function. It was enacted
to protect dependency, even over the clear wishes of the deceased. The
section specifically restricts freedom of testation in order that no dependants
are left without support. Section 37 (1) specifically excludes the benefits from
the assets in the estate of a member. Section 37 C enjoins the trustees of the
pension fund to e xercise an equitable discretion, taking into account a number
of factors . The fund is expressly not bound by a will, nor is it bound by a
nomination form. The contents of the nomination form are there merely as a
guide to the trustees, in the exercise of their discretion.”
36. It was contended by the first respondent that section 37 C does not find
immediate application upon the death of a pensioner and that i t pertains to
benefits payable upon the death of a member. It finds immediate application
7 [2002] 8 BPLR 3703 (W) at 3705 -3706
where the death of a member is the triggering event for the payment of a
benefit. In the present case, the relevant exit event is the deceased’s election
to receive an early retirement benefit, which occurred prior to her death. I
agree with this submission.
37. There is no objective and admissible evidence to suggest that representatives
of the Fund “deceitfully misled” the deceased to purchase an annuity. The
applicants do not allege who “deceitfully misled” the deceased. It is not clear
what the Fund, or its representatives, stand to benefit by misleading a
member to purchase an annuity.
38. On a conspectus of all the evidence and common cause facts, I concluded
that the adjudicator correctly determined that the Fund acted in compliance
with its Rules. The adjudicator rightly concluded that th ere wa s no evidence
to support the claim that the deceased was mi sled in purchasing an annuity.
Costs
39. The general principle that costs should follow the result, is applied.
40. In the result the following ord er is made:
1. The application is dismissed with costs on party and party scale B.
JJ STRIJDOM
JUDGE OF THE HIGH COURT
GAUTENG DIVISION, PRETORIA
COUNSEL FOR THE APPLICANTS :
ADV. K MHLANGA
INSTRUCTED BY: MAMAGOBO ATTORNEYS
COUNSEL FOR THE RESPONDENT:
ADV. K MAGAN
INSTRUCTED BY: SOONDER INC