CONSTITUTIONAL COURT OF SOUTH AFRICA


Case CCT 228/23

In the matter between:


TSHIFHIWA SHEMBRY MUTSILA Applicant

and

MUNICIPAL GRATUITY FUND First Respondent

PENSION FUNDS ADJUDICATOR Second Respondent

and

PENSION JUSTICE NPC Amicus Curiae



Neutral citation: Mutsila v Municipal Gratuity Fund and Others [2025] ZACC 17

Coram: Madlanga ADCJ, Kollapen J, Majiedt J, Mathopo J, Mhlantla J,
Rogers J, Seegobin AJ, Theron J and Tolmay AJ


Judgment: Theron J (unanimous)

Heard on: 12 November 2024

Decided on: 8 August 2025

Summary: Section 37C – Pension Funds Act 24 of 1956 – Dependants –
Equitable distribution

2

ORDER



On application for leave to appeal from the Supreme Court of Appeal (hearing an appeal
from the High Court of South Africa, Gauteng Division, Pretoria):
1. Leave to appeal is granted.
2. The appeal is upheld.
3. The order s made by the High Court, the Full Court and the
Supreme Court of Appeal are set aside and replaced with the following:
“(a) The determination of the Adjudicator dated 8 September 2014 is
set aside.
(b) The determination of the Municipal Gratuity Fund dated
9 April 2014 is set aside.
(c) The matter is remitted to the Municipal Gratuity Fund to make a
fresh determination, within three months from the date of this
judgment, of dependency and determine an equitable allocation
and distribution of the deceased’s death benefit having regard to
the circumstances as at 9 April 2014.”
4. The first respondent is directed to pay the applicant’s costs, including the
costs of two counsel , where so employed, in the High Court, the
Full Court, the Supreme Court of Appeal and in this Court.



JUDGMENT




THERON J (Madlanga ADCJ, Kollapen J, Majiedt J, Mathopo J, Mhlantla J, Rogers J,
Seegobin AJ and Tolmay AJ concurring):

THERON J
3
Introduction
[1] Every year, South African retirement funds distribute billions of rands1 upon the
death of their in -service2 members to persons who were “dependants” of a deceased
member. These benefits are distributed in terms of section 37C of the Pension Funds
Act3 (the Act) – a far-reaching and relatively unique statutory provision.

[2] This application relates to the equitable allocation and distribution of death
benefits held within a pension fund. It is particularly important in the context of South
Africa’s high incidence of employment precariousness and dependency on a single
breadwinner. Pension fund benefits pr ovide much needed assistance to those left
vulnerable in the event of the death of their primary supporter.

Background facts
[3] The applicant is Ms Tshifhiwa Sh embry Mutsila . The first respondent is the
Municipal Gratuity Fund (Fund), a defined contribution pension fund established and
registered in terms of section 4 of the Act. The second respondent is the Pension Funds
Adjudicator (Adjudicator). Pension Justice NPC, a public interest non-profit company,
registered under section 21 of the Companies Act ,4 was admitted as amicus c uriae
(friend of the court) in these proceedings.

[4] The applicant was married to Mr Takalani Emmanuel Mutsila (the deceased) in
terms of a civil marriage on 8 December 2003. The deceased died in a workplace
accident on 15 December 2012. The applicant and the deceased had five children,

1 In 2014 about R8.8 billion in death benefits was distributed by pension funds regulated by the Financial Sector
Conduct Authority (the the n Financial Services Board). This increased to about R9.3 billion in 2015. See
Financial Services Board 2015 Annual Report of the Re gistrar of Pension Funds (report 57, December 2016) at
36, available at: https://www.fsca.co.za/Annual%20Reports/Registrar%20of%20Pension%20Funds%20Annual

%20Report%202015.pdf. Later reports often do not distinguish between death benefits and certain other benefits
paid, but it is reasonable to assume that this amount increases over time.
2 Meaning, typically, members who have not yet reached retirement age and who are still contributing to the fund.
3 24 of 1956.
4 71 of 2008.

THERON J
4
whose ages as at April 2014 ranged from nine to 23, and all of whom were learners and
dependent on their parents when the deceased died.

[5] At the time of his death, the deceased had been employed by t he
Ba-Phalaborwa Municipality. By virtue of his employment, he was a member of the
first respondent and a death benefit to the value of R1 614 434.86 became available for
distribution to his dependants in accordance with section 37C of the Act. The applicant
submitted a claim to the Fund on behalf of herself and their five children.
Ms Dipuo Masete (Ms Masete) also submitted a claim to the Fund, in both her personal
and representative capacity. In an affidavit filed with the Fund, Ms Masete submitted
documentary proof that she and her two children had been listed by the deceased as
beneficiaries of a life policy of the deceased and that the deceased had made regular
payments into her bank account.

[6] On 7 March 2014, the Fund sent a proposed distribution report to the applicant
which included, as beneficiaries, not only the applicant and her five children but also
Ms Masete and her two children. In terms of the proposed distribution, Ms Masete and
her children were listed as beneficiaries of the death benefit because she was allegedly
married to the deceased in terms of customary law and Mr Mutsila was responsible for
the two children as a result of the customary marriage . The applicant objected to the
inclusion of Ms Masete and her two children as beneficiaries of the death benefit.

[7] The Fund recognised both the applicant and Ms Masete (as well as their
respective children) as dependants of the deceased. On 9 April 2014, the trustees of the
board of the Fund resolved to dis tribute the pension benefit of the deceased in the
following manner: 22.5% to Ms Mutsila and 27.5% to Ms Masete, whilst the children’s
benefits varied between 2.5% and 14% of the total benefits, depending on their

benefits varied between 2.5% and 14% of the total benefits, depending on their
respective ages. It allocated to Ms Masete, together with her two children, 52.5% of
the death benefit; 22.5% of the death benefit was allocated to the applicant, with the
applicant’s five children together being allocated the balance of 25%.

THERON J
5
[8] The applicant employed the services of a private investigator who discovered
that Ms Masete was married to Mr Malema Joseph Mphafudi in terms of customary law
and that he was the biological father of Ms Masete’s two children. The investigation
triggered a custody battle brought by Mr Mphafudi against Ms Masete before the
High Court of South Africa, Limpopo Division, Polokwane. In the custody
proceedings, Ms Masete did not dispute her relationship with Mr Mphafudi and
confirmed that he was the biological father of her children. Ms Masete alleged that
Mr Mphafudi had failed to make meaningful contributions towards the maintenance of
the children.

Litigation history
[9] On or about 9 May 2014, the applicant, aggrieved by the decision of the Fund,
lodged a complaint with the Adjudicator in terms of section 30A of the Act. In her
complaint, the applicant made it clear that her objection was that Ms Masete was not
married to the deceased and also that she was not a factual dependant. She also denied
that Ms Masete’s children were fathered by the deceased or that they depended on him.

[10] The Adjudicator invited both the Fund and Ms Masete to res pond to the
complaint. The Fund responded on 30 May 2014, suggesting that the evidence in the
custody application might have a direct impact on the consideration of the applicant’s
complaint and the distribution of the death bene fit. It suggested that the complaint be
held in abeyance until the conclusion of the custody application , and that the Fund be
allowed to submit its res ponse to the applicant’s complaint within 30 days after
conclusion of the custody dispute.

[11] The Adjudicator nevertheless finalised the complaint and issued a determination
on 8 September 2014. The Adjudicator found that the Fund had not conducted a proper
investigation as required by section 37C of the Act to identify the beneficiaries of the

investigation as required by section 37C of the Act to identify the beneficiaries of the
deceased and set aside its decision regarding the allocation of the death benefit. The
Adjudicator directed the Fund to properly investigate and effect an equitable

THERON J
6
distribution of the balance of the proceeds of the death benefit to all the deceased’s
dependants within three weeks after a decision in the custody case was handed down.

[12] On 24 October 2014, the Fund launched a section 30P5 application in the
High Court of South Africa, Gauteng Division, Pretoria . In its notice of motion, the
Fund sought a declaratory order that pursuant to the death of the deceased, it had
conducted a thorough investigation to determine the deceased’s beneficiaries to enable
it to make an equitable distribution of the deceased’s death benefits in accordance with
section 30C(1)(a)6 of the Act . It also sought to have the determination made by the
Adjudicator, dated 8 September 2014, set aside.

[13] On 14 April 2015, the applicant was joined in the proceedings before the
High Court. The High Court dismissed the Fund’s application with costs on a punitive
scale on 18 June 2018. The High Court held that the Fund had a duty to ensure that the
information it receive d was diligently investigated. According to the High Court, the
Fund ignored the applicant and her children ’s factual dependency on the deceased
insofar as they relied on the deceased for housing because the deceased had assumed
responsibility for paying their home loan. That Court h eld that Ms Masete’s factual
dependence on the deceased had not been proven. The Court held that Ms Masete was
neither a spouse of the deceased nor was the deceased the father of her children.

5 Section 30P, titled “Access to court”, provides:
“(1) Any party who feels aggrieved by a determination of the Adjudicator may, within six
weeks after the date of the determination, apply to the division of the High Court which
has jurisdiction, for relief, and shall at the same time give written notice of his or her
intention so to apply to the other parties to the complaint.

intention so to apply to the other parties to the complaint.
(2) The division of the High Court contemplated in subsection (1) may consider the merits
of the complaint made to the Adjudicator under section 30A(3) and on w hich the
Adjudicator’s determination was based, and may make any order it deems fit.
(3) Subsection (2) shall not affect the court’s power to decide that sufficient evidence has
been adduced on which a decision can be arrived at, and to order that no furth er
evidence shall be adduced.”
6 Section 30C(1)(a) reads:
“(1) The Minister shall appoint—
(a) a person to the office of Adjudicator.”

THERON J
7

[14] The High Court concluded that the Fund had failed to conduct a diligent
investigation. It said:

“It is apparent from the report of the CEO upon which the decision of the board of the
Applicant was dependent that there was no diligent investigation. The investigation
was insufficient, lacked particularity, vigour, openness and therefore the outcome of
their deliberation [was] improper. As conceded by the Applicant, the allegations by
[Ms] Mutsila have a direct impact on the consideration of the complaint she lodged
with the Applicant prior [to] the [Adjudicator]’s determination as well as on the
distribution of the deceased’s pension benefit. A situation that could have been avoided
with the exercise of fairness, openness and prudence.”7

[15] The Fund appealed to the Full Court, with leave from the
Supreme Court of Appeal, the High Court having refused leave . The Full Court
dismissed the Fund’s appeal with a punitive cost s order on 9 November 2021. The
Full Court held that the Fund had made a distribution before it had properly identified
the dependants. According to the Full Court, it was the Fund’s obligation to keep itself
abreast of the situation, especially because there was an objection to Ms Masete and her
children’s dependency. The Full Court concluded that the Fund was derelict in its
failure to conduct a thorough investigation. Thus, the Fund’s decision regarding the
distribution of the deceased’s death benefit was not in accordance with the provisions
of section 37C(1)(a) of the Act.

[16] The Fund was granted special leave to appeal to the Supreme Court of Appeal.
It raised two principal bases for its challenge. First, it contended that the Adjudicator
did not have jurisdiction to determine Ms Mutsila’s complaint in that she should have
lodged her complaint with the Fund in terms of section 30A(1) of the Act before
approaching the Adjudicator.

approaching the Adjudicator.


7 Municipal Gratuity Fund v Pension Funds Adjudicator , unreported judgment of the Gauteng High Court,
Pretoria, Case No 78396/2014 (18 June 2018) (High Court judgment) at para 79.

THERON J
8
[17] Second, it argued that it was not granted an opportunity to deal with the merits
of the complaint, therefore, the audi alteram partem (hear the other side) rule was not
complied with. The Fund took issue with the Adjudicator’s finding that it had failed to
undertake a proper investigation to determine the deceased member’s beneficiaries
when it ha d not been provided with an opportunity to place evidence before the
Adjudicator about the investigation it conducted.

[18] In its judgment handed down on 31 July 2023, the Supreme Court of Appeal set
aside the Adjudicator’s decision and, in effect, upheld the decision taken by the Fund.
In summary, the Supreme Court of Appeal held that the main objective of the
Adjudicator, in terms of section 30A(3) of the Act, is to dispose of complaints such as
the one lodged by the applicant in a “procedurally fair, economical and expeditious
manner”.8 In order to achieve this objective, the Adjudicator must act in accordance
with the prov isions of sections 30E(1)(a), 30J and 30F of the Act. In making its
decision, the Adjudicator failed to afford the Fund an opportunity to respond to
Ms Mutsila’s complaint and had infringed the Fund’s right to audi alteram partem. This
was contrary to the principles of natural justice and, specifically, what is required of the
Adjudicator by section 30F of the Act. This section provides that when the Adjudicator
investigates a complaint, they “shall afford the fund or person against whom the
allegations contained in the complaint are made, the opportunity to comment on the
allegations”.9

[19] The Supreme Court of Appeal held that both the High Court and the Full Court
failed to recognise the essential issue in this case, namely, whether Ms Masete and her
two children were factually dependent on the deceased. The Supreme Court of Appeal
reasoned that this factual dependency was never challenged. Further, the Court held

reasoned that this factual dependency was never challenged. Further, the Court held
that the lower courts failed to consider the two bases upon which the application and
subsequent appeal were brought, one of which was that the Adjudicator failed to apply

8 Municipal Gratuity Fund v Pension Funds Adjudicator [2023] ZASCA 116; [2023] 4 All SA 1 (SCA); 2024 (3)
SA 439 (SCA) (Supreme Court of Appeal judgment) at para 21.
9 Section 30F of the Act.

THERON J
9
the audi alteram partem principle. The Supreme Court of Appeal upheld the appeal
and held that it would be in the interests of justice that it makes a fresh determination
having regard to the lapse of time, possible unavailability of witnesses and documentary
evidence, the fact that the minor beneficiaries were now adults and that the parties were
entitled to finality. The Court concluded that “[t]he only equitable outcome is to accept
that the Fund had complied with its legislative mandate and in its discretion made a
correct distribution”.10 The Supreme Court of Appeal thus reinstated the decision of
the Fund.

[20] On the issue of costs, the Supreme Court of Appeal set aside the punitive cost
orders made by the High Court and the Full Court. It held, however, that this was an
exceptional case where the successful party ought not to be granted costs in its favour.
The Court was of the view that the dispute might have taken a totally different, much
less expensive route had the Fund elected to deal with the complaint on the merits rather
than suggesting that the outcome of the custody application be awaited. The Court
ordered each party to pay their own costs in the appeal and in the proceedings before
the High Court and the Full Court.

In this Court
Issues
[21] The following issues arise for determination in this matter:
(a) whether this Court has jurisdiction and, if so, whether leave to appeal
should be granted;
(b) whether the Fund properly exercised its discretion in this matter;
(c) the nature and scope of the section 30P application;
(d) at what date should a pension fund make a determination as to who is a
dependant for the purpose of distributing a death benefit; and

10 Supreme Court of Appeal judgment above n 8 at para 30.

THERON J
10
(e) whether the person concerned must be a dependant at the time when the
distribution is made.11

Jurisdiction and leave to appeal
[22] The applicant argues that this matter engages this Court’s jurisdiction because it
concerns the proper interpretation of section 37C of the Act relating to what a fund is
required to do when it determines dependency, the investigation it must conduct and the
obligations imposed on the fund. Section 37C enjoins a fund to exercise a discretion
when making an equitable allocation. The applicant contends that the manner in which
a fund exercises its discretion in order to determine an equitable allocation in terms of
section 37C impacts on constitutional rights and is an arguable point of law.

[23] A central question that arises in this matter is the appropriate date with reference
to which a fund must make a determination as to who is a dependant for the purpose of
distributing a death benefit – the date when the determinatio n of dependency is made
or the date of the death of a member . I am of the view that the matter engages our

11 The issues reflected in (d) and (e) were contained in post -hearing directions issued by this Court on
12 December 2024. The parties were requested to address the following questions:
“(a) On a proper interpretation of section 37C of the Pension Funds Act 24 of 1956, when
is the appropriate stage a Pension Fund must make a determination as to who is a
dependant for the purpose of distributing a death benefit – at the stage when the
determination of dependency is made or at the date of death of the member.
(b) Was the Supreme Court of Appeal decision in Fundsatwork Umbrella Pension Fund v
Guarnieri and Others [2019] ZASCA 78 at paragraph 25 correct in holding that:
‘Given all these considerations of language, purpose and practicality, in my view, the
proper construction of section 37C(1)(a) is that the time at which to determine who is

proper construction of section 37C(1)(a) is that the time at which to determine who is
a dependant for the purpose of distributing a death benefit is when that determination
is made, and furthermore, the person concerned must still be a beneficiary at the time
when the distribution is made. That is the only way in which to ensure that the persons
identified as dep endants are those whose interests the section seeks to protect. ’
(Emphasis added.)
(c) What would be the legal basis for the proposition in this quotation that ‘the person
concerned must still be a beneficiary at the time when the distribution is made ’?
(d) Having regard to the definition of ‘dependant’ in section 1 of the Pension Fund Act,
does the test for factual dependency only apply to persons falling under section 1(b)(i)
and not to persons falling under section 1(a) and (b)(ii) or to persons falling under
section 1(b)(i), 1(a) and 1(b)(ii)?
(e) If dependency in respect of persons falling under section 1(a) and (b)(ii) must be
determined, at which stage must this determination be made?”

THERON J
11
general jurisdiction as it raises arguable points of law of general public importance that
ought to be determined by this Court.

[24] This is the first time that this Court is seized with the interpretation and
application of section 37C. This matter raises issues that transcend the narrow interests
of the parties. Any judgment handed down by this Court will impact other funds and
beneficiaries, and the industry at large. Moreover, pension fund statutes similar to this
Act have analogous or comparable death benefit provisions to section 37C and these
may also be impacted by any interpretation by this Court.12

[25] Section 37C reflects a legislative decision that pension fund benefits becoming
available upon the death of a member should be available to be used for the benefit of
the deceased’s dependants so that they are less likely to require and depend on the
State’s resources. This serves the social purpose of providing for dependants. 13 This
matter involves legislation that has a social security purpose 14 affecting a large section
of the population, many of whom are vulnerable and dependent on support from pension
fund members.

[26] As mentioned,15 South African retirement funds distribute billions of rands upon
the death of their in -service members to “dependants”. For reasons that will become
clear later in the judgment, I am of the view that there are prospects of success in this
matter. Therefore, it is in the interests of justice that leave to appeal should be granted.


12 A number of statutes create self-standing pension funds which are regulated by those statutes and not this Act.
These include, for example, the Government Employees Pension Fund which is created by the Government
Employees Pension Law Proclamation 21 of 1996 and the rules thereto. Rule 14.5 deals with death benefits
payable to “beneficiaries”. A comparable provision is in section 15 of the Members of Parliament and Political

Office-Bearers Pension Scheme Act 112 of 1984. Many current or former state-owned entities, such as the Post
Office, have their pension funds established and regulated separately in this manner.
13 Mashazi v African Products Retirement Benefit Provident Fund 2003 (1) SA 629 (W) (Mashazi) at 632I-J.
14 Municipal Workers Retirement Fund v Mabula [2017] ZAGPPHC 1153 at para 7.
15 Above at [1].

THERON J
12
Section 37C
Legislative history
[27] Section 37C was first enacted in 1976 as part of the Financial Institutions
Amendment Act16 (1976 Amendment Act). The preamble of the 1976 Amendment Act
included among its objects to “provide for the protection of pension benefits”. Under
the heading “How pension benefits [are] to be dealt with on death of [a] member”,
section 24 of the 1976 Amendment Act provided for the insertion into the Pension
Funds Act of a new section 37C reading thus:

“Notwithstanding anything to the contrary contained in any law or in the rules of a
registered fund, any benefit payable by such a fund in respect of a deceased member,
shall not form part of the assets in the estate of such a member but shall be paid to any
one or more of the dependants of the member, if there is such a dependant or are such
dependants, or to a guardian or trustee for the benefit of such dependant or dependants:
Provided that if such dependant or dependants cannot be traced by the fund concerned
within a period of six months after the death of the member, or if no claim is received
by that fund from such dependant or dependants within the said period, the benefit may
be paid over to the estate of the member.”

[28] The concern expressed at that time was that the Act, as it stood pre-amendment,
did not sufficiently (or at all) ensure that pension benefits were allocated to dependants.
The then Minister of Finance explained, at a second reading of the Bill, the purpose of
these amendments:

“The object of a pension fund is to provide pension benefits to members and their
dependants. The Act does not protect the benefits from alienation and attachment, nor
does it exclude them from the insolvent and deceased estates of members in order to
ensure that they do in fact accrue to members or their dependants. This deficiency is
now being remedied.”17

16 101 of 1976.

now being remedied.”17

16 101 of 1976.
17 House of Assembly Debates (Hansard) 16 March 1976 Vol 61 at 3253. No explanatory memorandum was
published with the 1976 Amendment Act. This Court has relied exclusively on parliamentary debates per Hansard
as the source of the purpose of such an amendment Act. South African Municipal Workers ’ Union v Minister of

THERON J
13

[29] It is well -established that this Court may have regard to background evidence,
such as the legislative history of an Act, to aid in its interpretation. The background
evidence must be clear, not in dispute and relevant to the matter at hand. Each of those
requirements is satisfied here. In Makwanyane, Chaskalson P held:

“Our Constitution was the product of negotiations conducted at the Multi-Party
Negotiating Process. . . . background material can provide a context for the
interpretation of the Constitution and, where it serves that purpose, I can see no reason
why such evidence should be excluded. The precise nature of the evidence, a nd the
purpose for which it may be tendered, will determine the weight to be given to it.”18

[30] The notion that section 37C was always intended to have a broad social security
purpose in respect of “dependants”, whether familial or not, is evident from the broad
definition of “dependant”. The definition was introduced by the 1976 Amendment Act
into section 1 of the Pension Funds Act as including a spouse and descendants but not
limited thereto:19

“‘[D]ependant’, in relation to a member, means a person consi dered by the person
managing the business of the fund concerned as being dependent on the member for
maintenance and includes the spouse or a descendant of the member who in accordance
with the rules of the fund may become entitled to a benefit.”

[31] This has been the consistent position over the years since 1976 as various
amendments were effected to the definition of “dependants” and section 37C itself.20 It

Co-Operative Governance and Traditional Affairs [2017] ZACC 7; 2017 (5) BCLR 641 (CC) at fn 7. This Court
in National Society for the Prevention of Cruelty to Animals v Minister of Justice and Constitutional Development
[2016] ZACC 46; 2017 (1) SACR 284 (CC); 2017 (4) BCLR 517 (CC) (SPCA) also placed extensive reliance on

parliamentary debates in interpreting the Societies for the Prevention of Cruelty to Animals Act 169 of 1993. See
SPCA at paras 41, 49, 51 , 60 and the relevant footnotes, especially fns 65, 66, 71, 73 and 94. See also Case v
Minister of Safety and Security; Curtis v Minister of Safety and Security [1996] ZACC 7; 1996 (3) SA 617 (CC);
1996 (5) BCLR 609 (CC) at fn 18.
18 S v Makwanyane [1995] ZACC 3; 1995 (3) SA 391 (CC); 1995 (6) BCLR 665 (CC) at para 17.
19 Section 21(a).
20 See K Lehmann The Distribution of Retirement Fund Death Benefits: An Analysis of the Equitability and
Constitutionality of Section 37C of The Pension Funds Act 24 of 1956 (DPhil thesis, University of Cape Town,
2020) at 149-50.

THERON J
14
is not necessary to traverse these incremental historical changes in detail, save to briefly
highlight the aspects of the current statutory position.

[32] Section 1 of the Act currently defines a “dependant” in the following manner:

“‘[D]ependant’, in relation to a member, means—
(a) a person in respect of whom the member is legally liable for
maintenance;
(b) a person in respect of whom the member is not legally liable for
maintenance, if such person—
(i) was, in the opinion of the board, upon the death of the member
in fact dependent on the member for maintenance;
(ii) is the spouse of the member;
(iii) is a child of the member, including a posthumous child, an
adopted child and a child born out of wedlock.
(c) a person in respect of whom the member would have become legally
liable for maintenance, had the member not died.”

“Dependant” expressly includes both factual and legal dependants.

[33] Thus, from inception to date, and by design , it is clear that the following
consequences are intended to flow from section 37C:
(a) Death benefits do not fall in the deceased member’s estate.
(b) The ultimate determination of dependants lies with the fund, not the
member.
(c) Spouses and “descendants” (or later, children) are included in the
definition of “dependant”.
(d) The definition of “dependant” is not limited to blood relations but
includes persons “financially” dependent on the deceased member.
(e) A fixed period is provided within which to identify dependants –
generally 12 months from the date of the member’s death.

THERON J
15
Jurisprudential development
[34] The jurisprudence 21 has over time expanded the factors to be considered and
process to be followed by trustees of funds in exercising their discretion and developed
principles on how section 37C must be applied. It has been held:

“Inherently the discretionary power of the board entails choice, which is the power to
identify deserving cases. The board therefore carries a very onerous responsibility to
conduct a thorough and credible investigation to establish the existence of
beneficiaries, thereafter determine a fair distribution and finally decide on the
appropriate mode of payment of the benefit payable. Accordingly, section 37C
requires an in-depth input from the board with regard to who qualifies as a dependant
and the amount which is to be allocated to each beneficiary.”22

[35] Section 37C limits the testamentary freedom of a member inasmuch as the
member’s completion of a nomination form is not binding on the Fund. The Fund is
only bound by the empowering provision of section 37C in distributing the death
benefit.

[36] Section 37C(1) of the Act provides:

“(1) Notwithstanding anything to the contrary contained in any law or in the rules
of a registered fund, any benefit . . . payable by such a fund upon the death of
a member, shall, . . . not form part of the assets in the estate of such a member,
but shall be dealt with in the following manner:
(a) If the fund within twelve months of the death of the member becomes
aware of or traces a dependant or dependants of the member, the
benefit shall be paid to such dependant or, as may be deemed equitable
by the fund, to one of such dependants or in proportions to some of or
all such dependants.
. . .

21 Predominantly by the Adjudicator, Financial Services Tribunal, High Courts and the Supreme Court of Appeal.
22 University of Pretoria Provident Fund v Du Preeze, unreported judgment of the Gauteng High Court, Pretoria,

Case No 48755/14 (15 September 2015) at para 13. This principle was confirmed in Snyman v Government
Employees Pension Fund [2024] ZAGPPHC 364 at para 45.

THERON J
16
(bA) If a member has a dependant and the member has also designated in
writing to the fund a nominee to receive the benefit or such portion of
the benefit as is specified by the member in writing to the fund, the
fund shall within twelve months of the death of such member pay the
benefit or such portion thereof to such dependant or nominee in such
proportions as the board may deem equitable.”

[37] Section 37C regulates the distribution of lump sum death benefits as a benefit
typically not falling within the deceased member’s estate. It is a unique statutory
provision governing an extensive process of identifying, allocating and paying portions
of death benefits to legal and/or factual dependants. Unlike in the case of insurance
policies, the deceased’s nomination of a beneficiary does not govern the distribution but
is only a factor to be taken into account by the Fund in reaching a distribution decision.23

[38] The application of section 37C is frequently the subject of litigation and
dissatisfaction by deceased’s family members and/or beneficiaries. For example,
according to the Adjudicator’s Annual Report for 2023/24,24 section 37C death benefit
claims are the third most frequent type of complaint finalised by the Adjudicator and
exceeded 670 complaints25 during that financial year. It is one of the more contentious
provisions of the Act.

[39] The social security pu rpose and “override” of the deceased’s wishes are clear
from the plain language of section 37C and case law. In Mashazi, it was held:

“Section 37C of the Act was intended to serve a social function. It was enacted to
protect dependency, even over the clear wishes of the deceased. This section
specifically restricts freedom of testation [so] that no dependants are left without
support. Section 37C(1) specifically excludes the benefits from the assets in the estate

23 Fundsatwork Umbrella Pension Fund v Guarnieri [2019] ZASCA 78; 2019 (5) SA 68 (SCA) at para 5.
24 Office of the Pension Funds Adjudicator Integrated Report 2023/2024 (2024) at 5 and 49, available at
https://www.pfa.org.za/annual-reports/.
25 According to the Adjudicator’s Annual Report, death benefit claims amounted to 6.9% of the 9719 complaints
received.

THERON J
17
of a member. Section 37C enjoins the trustees of the pension fund to exercise an
equitable discretion, taking into account [several] factors. The fund is expressly not
bound by a will, nor is it bound by the nomination form. The contents of the nomination
form are there merely as a guide to the trustees in the exercise of their discretion.”26

[40] In Guarnieri, the Supreme Court of Appeal considered the purpose served by
section 37C of the Act and held:

“[S]ection 37C of the [Act] removes the allocation of pension benefits on the death of
a pension fund member from the unfettered choice of the member, whether by will or
by nomination. It reflects a legislative decision that funds becoming available in that
way should be available to be used for the benefit of the deceased’s dependants so that
they are less likely to be a drain on the state’s resources. This serves the social purpose
of providing some protection for dependants, without entirely overriding the wishes of
a deceased who has nominated beneficiaries or made a will.”27

[41] It has been accepted that the aim of section 37C is to limit a pension fund
member’s freedom of testation in relation to their pension benefits.28 Sithole confirmed
that “[t]hrough the guise of section 37C, the legislature is advancing an important social
protection policy which is left in the hands of the board or persons managing the
business of pension funds to implement”.29

[42] This “social security” purpose accords with a constitut ional interpretation of
section 37C30 which gives effect to the section 27(1)(c) constitutional right to have

26 Mashazi above n 13 at 632H-33A. This was confirmed in Mbatha v Transport Sector Retirement Fund [2020]
ZAGPJHC 18 at para 3 and Skosana v Fundsatwork Umbrella Pension Fund [2023] ZAFST 143 at para 23.
27 Guarnieri above n 23 at para 5.
28 TWC v Rentokil Pension Fund [2000] 2 BPLR 216 (PFA) at 223.

28 TWC v Rentokil Pension Fund [2000] 2 BPLR 216 (PFA) at 223.
29 Sithole v ICS Provident Fund [2000] 4 BPLR 430 (PFA) at para 23.
30 In terms of section 39(2) of the Constitution.

THERON J
18
access to social security31 in a manner not limited to familial connection but focused on
factual dependency.32

Did the Fund properly exercise its discretion in this matter?
[43] The parties dispute whether the Fund properly exercised its discretion in
identifying the dependants and allocating and distributing the deceased’s death benefit,
as required by section 37C(1)(a). The discretionary power of the Fund lies in its
determination of who is a factual depend ant, in accordance with section 1 of the Act.
That section provides that the board of a fund has a discretion to determine who is
factually dependent on a member for maintenance. 33 Legal dependency is determined
by law. A pension fund exercises discretionary powers in two respects: first, in relation
to deciding whether dependants are factual dependants34 and secondly, in allocating and
distributing the benefits for both legal and factual dependants.35

[44] Section 37C affords a pension fund a discretion in the allocation and distribution
of a death benefit .36 The allocation and distribution of death benefits comprise three
main stages. First, the fund must “actively” investigate in order to identify and trace
potential dependants, and to assess each potential dependant’s degree of dependence on

31 The right to social security is entrenched in many international instruments. See Article 22 of the Universa l
Declaration of Human Rights, 10 December 1948; Article 9 of the International Covenant on Econo mic Social
and Cultural Rights, United Nations General Assembly Resolution 2200A (XXI), 16 December 1966; Protocol to
the African Charter on Human and Peoples’ Rights on the Rights of Citizens to Social Protection and Social
Security, 6 February 2022 and A rticle 4 of the Code on Social Security in the SADC . Section 39(1)(b) of the
Constitution obliges courts to consider international law when interpreting the Bill of Rights.

32 A right acknowledged by this Court in Mudau v Municipal Employees Pension Fund [2023] ZACC 26; 2023
(10) BCLR 1165 (CC); [2023] 11 BLLR 1109 (CC); (2023) 44 ILJ 2641 (CC) in respect of pension withdrawal
benefits and by the Supreme Court of Appeal in Post Office Retirement Fund v South African Post Office SOC
Ltd [2021] ZASCA 186; [2 022] 2 All SA 71 (SCA) at paras 56-9 in respect of the Post Office’ s failure to pay
required monthly contributions to its employees’ pension fund.
33 Paragraph (b)(i) of the definition of “dependant” in section 1 of the Act states that a dependant, in relation to a
member, includes “a person in respect of whom the member is not legally liable for maintenance, if such person
was, in the opinion of the board, upon the death of the member in fact dependent on the member for maintenance”
(emphasis added).
34 Section 1 paragraph (b)(i) of the definition of “dependant” of the Act.
35 Section 1 paragraph (a) of the definition of “dependant” of the Act.
36 Collatz v Alexander Forbes Financial Services (Pty) Ltd , unreported judgment of the Gauteng High Court,
Johannesburg, Case No A5067/2020 (31 January 2022) at para 70. See also Guarnieri above n 23 at para 8.

THERON J
19
the deceased. 37 The burden to do so falls exclusively on the board of the fund.
Secondly, the fund must make an “equitable distribution” of the benefit.38 The fact that
a person qualifies as a dependant in principle does not mean that the person is entitled
to a benefit – they are only entitled to be considered by the board i n the “allocation”
phase. Thirdly, the fund must decide how to effect payment. This could involve
payment to a beneficiary fund for the benefit of a minor child, instead of to the child’s
guardian.

[45] In Guarnieri the Supreme Court of Appeal said the following about the duty of
a board when making an equitable allocation:

“[Section 37C] imposes upon a board an obligation to check carefully that the
information it has is accurate and to ensure that when it makes distributions the
intended beneficiaries will be the persons who benefit from them. As is apparent from
the record in this case, the board was too inclined to accept the correctness of one-sided
information.”39

[46] The relevant factors that a pension fund must consider when making an equitable
distribution include : the age of dependants; the relationship with the deceased; the
extent of dependency; the wishes of the deceased recorded either in a nomination form
or their last will; and the financial affairs of the dependants , including their future
earning capacity potential. 40 In making their decision, trustees need to consider all
relevant information and ignore irrelevant facts.41

[47] The Fund enjoys a wide discretion under section 37D. In Guarnieri, the
Supreme Court of Appeal put it thus:


37 Khwela v Toyota SA Provident Fund , unreported decision of the Financial Services Tribunal, Case No
PFA46/2020 (26 February 2021) at para 6.
38 Sithole above n 29 at para 30.
39 Guarnieri above n 23 at para 24.
40 Sithole above n 29 at paras 24-5.
41 Id at para 25.

THERON J
20
“The effect of section 37C(1)(a), as read with the definition of ‘dependant’, is to require
a fund, within a period of 12 months from the death of the member, to identify the
dependants of the deceased who may potentially qualify for an equitable distribution
from the deceased’s death benefit in terms of section 37C. Having once identified the
potential class of dependants, the board of the fund is vested with a large discretion to
determine, in the light of its assessment of their respective needs, in what proportions
the death benefit will be distributed among the class of dependants.”42

[48] While its discretion is wide, it serves an important utility as the exercise of its
discretion is “heavily dependent on the factual circumstances” of a particular case. 43
Only if the exercise of discretion was unreasonable or improper may the decision be
reviewed.44 Section 37C(1)(a) compels the fund to distribute the benefit to a dependant
or to multiple dependants “as may be deemed equitable by the fund”.

[49] Finally, as previously noted, the provisions of section 37C take precedence over
any nomination of a beneficiary under the rules of a fund.45 The consequence is that all
benefits payable in respect of a deceased member, whether or not subject to a
nomination, must be dealt with in terms of section 37C. This is in line with the purpose
of the section: to serve a social function by protecting the interests of the dependants,
who might otherwise be dependent on the resources of the State, without entirely
overriding the wishes of the deceased member.46

[50] The effect of this jurisprudence is that a fund must conduct an investigation and
thereafter make an equitable allocation having regard to relevant factors. By design and
purpose, section 37C does not seek to prioritise spouses over other f actual dependants,
whether married or not. All dependants are recognised as dependants once identified

42 Guarnieri above n 23 at para 8.
43 Minister of Defence and Military Veterans v Motau [2014] ZACC 18; 2014 (5) SA 69 (CC) ; 2014 (8) BCLR
930 (CC) at para 42.
44 See Mongale v Metropolitan Retirement Annuity Fund [2010] 2 BPLR 192 (PFA) (Mongale) at para 5.6.
45 Kaplan and Katz N.N.O. v Professional and Executive Retirement Fund [1999] ZASCA 27; [1999] 3 All SA 1
(A) at 8.
46 Guarnieri above n 23 at para 5.

THERON J
21
as such. No dependant has a “right” to a portion of the death benefit until so allocated
by a fund, or a right to a larger benefit than another dependant. They have a right to an
equitable allocation and such allo cation must be made in a manner that is lawful,
reasonable and procedurally fair.

[51] According to the Fund, Ms Masete and her children ’s dependency was
established in terms of paragraph (b)(i) of the definition of “dependant” in section 1 of
the Act. They were persons whom the deceased was not legally liable to maintain but
they were factually dependent on him for maintenance , so the Fund concluded . The
applicant and her children’s dependency was determined in terms of paragraph (a) of
the definition, as the deceased was legally liable for their maintenance.

[52] The then Chief Executive Officer of the Fund, Mr Marthinus Jacobus Dewald
Jacobsohn, deposed to the founding affidavit filed on behalf of the Fund in the
High Court. He had compiled a report detailing the death benefit available for
distribution to the dependants of the deceased for the consideration of the Management
Committee of the Fund. In his report , he set out the “extensive investigations”
undertaken by the Fund in order to determine the potential beneficiaries of the death
benefit.

[53] The report evidenced the following:
(a) The applicant was employed as a teacher earning a gross monthly salary
of R17 488.25. Her net salary was R13 087.39 and, according to her
application, her monthly expenses were R13 087.39. This, in the Fund’s
view, meant that she was financially independent. Ms Mutsila declared
dependency on the deceased at the rate of R10 000 per month for the
maintenance of their children.
(b) The deceased and Ms Masete had entered into a customary union in 2008
and two children were born from the union. Ms Masete submitted an
application form indicating that she was employed, earning R2 685 per

application form indicating that she was employed, earning R2 685 per
month and declared dependency on the deceased at the rate of R2 000 per

THERON J
22
month. The Fund relied on a lobola letter received from the Maungan i
Traditional leader, confirming a marriage between the deceased and
Ms Masete, and an affidavit from the deceased’ s brother stating that the
deceased was customarily married to Ms Masete. An affidavit was also
received from an uncle of the deceased, confirming the customary
marriage.
(c) During its investigation, it came to the attention of the Fund that, on
1 October 2012, the deceased in his funeral plan with Metropolitan Life,
nominated Ms Masete and her two children as beneficiaries , as well as
three of his children with the applicant, his mother and Ms Betty Masete,
whom he described as his mother -in-law. The Fund said that while this
nomination did not necessarily serve as proof of Ms Masete’s factual
dependency on the deceased, it bolstered Ms Masete’s claim that she and
her children were financially supported by the deceased.
(d) According to Ms Masete, the deceased frequently deposited money into
her bank account as a form of support.

[54] In a letter dated 11 April 2014 from the Fund and addressed to the applicant’s
attorneys, it was recorded that the Fund had resolved to allocate and distribute the death
benefit. It was further recorded that the Fund had regard to, inter alia, the following
factors in making the distribution: (i) the earning capacity of the applicant and
Ms Masete; (ii) the factual dependenc y of Ms Masete on the deceased; (iii) the
allocation to the ap plicant was on the basis of her legal dependency arising out of her
civil marriage to the deceased ; and (iv) the allocation to Ms Masete was based on her
factual dependency on the deceased. It was noted that:

“[T]he objection raised by [the applicant] to any allocation to Ms D M Masete and her
two children [was] based on the [alleged] invalidity of the customary marriage falling
short of the provisions of the [Act] and the factual dependency of Ms D M Masete and
her two children.”

THERON J
23
[55] In this Court, the Fund contended that on a careful analysis of the facts – both
those facts which served before the Fund, as well as the facts brought to light by the
applicant herself in her complaint before the Adjudicator – the finding that Ms Masete
and her children had bee n supported by the deceased, and were so depend ent, is both
rational and sound. It maintained that having made the finding of dependency, it was
then for the Fund to exercise its discretion in determining the most equitable distribution
of the benefits between the dependants. It alleges that t he discrepancy between
Ms Masete and the applicant’s financial independence were crucial factors in this
assessment. It relied on the evidence of Ms Mutsila herself – in her application before
the Fund – which indicated her dependency on the deceased as being only in respect of
maintenance for the children.

[56] It is common cause that when the allocation decision was made by the Fund on
9 April 2014, the Fund did not know that Ms Masete was married to Mr Mphafudi. The
Fund was not aware that he was the biological father of her children , that he was still
alive, and that he could support the children financially. The only fact mentioned in the
Fund’s founding affidavit filed in the High Court and annexures attached thereto is that
Ms Masete declared dependency on the deceased in the amount of R2 000. There is no
evidence that the Fund carried out any investigations to determine for itself or confirm
this declared dependency. There is no allegation in the documents attached by the Fund
to its founding affidavit to the effect that the deceased either maintained Ms Masete’s
children, paid for their school fees and clothing, or provided them with shelter.

[57] It is clear that a proper investigation to determine dependency in relation to
Ms Masete and her children was not carried out by the Fund. It is evident from the

Ms Masete and her children was not carried out by the Fund. It is evident from the
report that Ms Masete and her children were treated by the Fund as the wife and children
of the deceased , respectively . However, their status was determined as factual
dependants, no doubt to avoid dealing with doubts about the marriage and paternity.
The reality is that they were simply allocated the same benefits as if they were the wife
and children of the deceased without the Fund carrying out a proper investigation.

THERON J
24
[58] The High Court correctly held that the investigation by the Fund was
“insufficient”, leading to an outcome which was “improper”. On appeal to the
Full Court, that Court also found:

“It was not [Ms] Mutsila’s responsibility to keep the [Fund] informed of the situation
with [Ms] Masete and her children. It was the [Fund]’s obligation to keep itself abreast
of the situation, especially as it was well aware that there was an objection to her
dependency.”47

Further, the Full Court held that the Fund was derelict in its failure to conduct a
thorough investigation.

[59] The Fund conceded, in its response to the Adjudicator, that the new evidence
(that Ms Masete was in a customary marriage with Mr Mphafudi and he was the father
of their children) discovered as a result of the investigation done by the applicant, could
have a “direct impact on the consideration of the complaint as well as the distribution
of the death benefits”. It is common cause that this new evidence was brought to light
after the Fund had made its distribution decision on the death benefit. This concession
by the Fund supports a conclusion that it had failed to conduct a proper investigation to
determine the deceased’s beneficiaries in order to enable it to make an equitable
distribution of the deceased’s death benefits.

[60] The Fund failed to conduct a proper investigation in this matter. It failed to
investigate and verify the claims made by Ms Masete that she and the deceased were
married to each other in terms of customary law. It simply relied on the information
that had been supplied to it (a lobola letter and an affidavit from the brother of the
deceased confirming the existence of a customary marriage). It would appear that when
the Fund was confronted with evidence that cast doubt on the status of Ms Masete as a
spouse of the deceased, it identified her as a factual depend ant without further

47 Municipal Gratuity Fund v Pension Funds Adjudicator , unreported judgment of the Gauteng High Court,
Pretoria, Case No A164/2019 (9 November 2021) (Full Court judgment) at para 57.

THERON J
25
investigation. The Fund’s identification of Ms Masete and her children as factual
dependants was flawed in that it was not supported by credible evidence demonstrating
that they were dependent on the deceased for maintenance. It is noteworthy that the
Fund did not establish the nature of the relationship between the deceased and
Ms Masete or her children.

[61] In these circumstances, it is clear that the Fund failed to establish the extent of
the factual dependency of Ms Masete and her children . The extent of factual
dependency is crucial when the Fund makes an equitabl e allocation and distribution.
An equitable allocation and distribution is discretionary, subject to the discretion being
exercised in a judicially compliant manner, as explained above.48 It must be noted that
the first stage of the process does not always entail a purely factual determination by a
fund, as it may also be called upon to make a decision regarding legal dependants whose
status is determined by law. The inadequate investigation regarding the exten t of the
factual dependency of Ms Masete and her children tainted the allocation and distribution
decision. It must follow that the Fund failed to properly exercise its discretion in this
matter.

Supreme Court of Appeal
Section 30P application
[62] Section 30P of the Act is not an issue requiring this Court’s consideration and is
of limited relevance. The only question is whether the Supreme Court of Appeal was
correct in law in concluding that the only dispute the High Court was required to
determine was whether the Adjudicator had complied with the audi alteram partem
principle; or whether the issues before the High Court included whether the Fund had
conducted a proper investigation as required by section 37C before making its
distribution decision.


48 Above at [43] to [53].

THERON J
26
[63] The applicant submits that the Supreme Court of Appeal’s approach to the
section 30P application was f undamentally wrong in law, as that Court treated the
section 30P application as a review, not an appeal. According to the applicant, a
section 30P application is a hearing de novo (anew) involving a rehearing of the merits
of a complaint in the sense that the High Court exercises jurisdiction akin to original
jurisdiction over the complaint. As it is a hearing de novo, the applicant argues that the
audi alteram partem issue should have fallen away because there was a full hearing in
the High Court. The Fund submits that it approached the High Court challenging the
procedure of the Adjudicator’s decision as it did not comply with the audi alteram
partem principle, and it sought relief in the form of judicial review. The Fund had also
raised, at the hearing in the High Court, a jurisdictional challenge , arguing that the
Adjudicator lacked jurisdiction to determine the complaint and that, instead, Ms Mutsila
should first have lodged a complaint with the Fund under section 30A(1) of the Act.

[64] A section 30P application is an appeal in a wide sense. Relying on Tikly,49 the
Court in Meyer50 held:

“From the wording of section 30P(2) it is cl ear that the appeal to the High Court
contemplated is an appeal in the wide sense. The High Court is therefore not limited
to a decision whether the Adjudicator’s determination was right or wrong. Neither is
it confined to the evidence or the grounds upon which the Adjudicator’s determination
was based. The Court can consider the matter afresh and make any order it deems fit.
At the same time, however, the High Court’s jurisdiction is limited by s ection 30P(2)
to a consideration of ‘the merits of the complaint in question’. The dispute submitted
to the High Court for adjudication must therefor e still be a ‘complaint’ as defined.

to the High Court for adjudication must therefor e still be a ‘complaint’ as defined.
Moreover, it must be substantially the same ‘complaint’ as the one determined by the
Adjudicator.”51


49 In Tikly v Johannes N.O. 1963 (2) SA 588 (T); [1963] 3 All SA 91 (T) at 590G, it was held that: “an appeal in
the wide sense , that is, a complete re -hearing of, and fresh determination on the merits of the matter with or
without additional evidence or information”.
50 Meyer v Iscor Pension Fund [2002] ZASCA 148; 2003 (2) SA 715 (SCA); [2003] 5 BLLR 439 (SCA).
51 Id at para 8.

THERON J
27
[65] Recently, in Richards Bay Coal Terminal ,52 this Court considered whether the
existence of a wide appeal ousts a court’s power of review. It held that a power of
review is not ousted by a wide appeal. However, a court may exercise its discretion to
decide whether to exercise its inherent review jurisdiction.53 This Court held that a wide
appeal grants an adjudicative appeal body the power to rehear a matter entirely and does
not bind that body to the evidence presented at the initial forum. 54 A litigant is
compelled to pursue an appeal on the meri ts, instead of a review , because the Act has
indicated a preference that the litigant should prosecute an appeal first before a review.
This Court referred to this as the subsidiarity principle. 55 To the extent that a party
wishes to seek judicial review relief, it would have to satisfy the court that the special
relief afforded to it in the legislative scheme (i.e. , the wide appeal) would not provide
the party with the appropriate relief.56

[66] Although section 30P(2) clearly permits the court to engage in a wide appeal, the
way in which it is formulated suggests that it is not exhaustive. In terms of
section 30P(2), the High Court “may consider the merits of the complaint made to the
Adjudicator” and “may make any order it deems fit”.57 The language of section 30P(2)
is not peremptory. It provides that the High Court “may” consider the merits of the
case, not “must” consider the merits of the case. The language of the section suggests
that, depending on the nature of the case, the court may deal with the me rits, but that it
is not obliged to do so, so that it may additionally consider review attacks upon the
decision. Where a dispute concerns the merits of the Adjudicator’s decision, and is

52 Commissioner for the South African Revenue Service v Richards Bay Coal Terminal (Pty) Ltd [2025] ZACC 3;
2025 (6) BCLR 639 (CC) at para 63.
53 Id at para 123.

2025 (6) BCLR 639 (CC) at para 63.
53 Id at para 123.
54 Id at para 104. It was held that:
“In a wide appeal, the empowering statute grants a court, tribunal or forum the power to re-hear
the matter entirely. This means that the dispute is h eard ‘afresh’ or ‘from the beginning’ or
‘anew’ in the sense that the appellate body is not bound by the evidence, information or reasons
which arose at the time the first instance decision was made.”
55 Id at paras 130-1.
56 Id at para 77.
57 Emphasis added.

THERON J
28
capable of being adjudicated in a wide appeal before the High Court, that ought to be
the preferred course. Thus, the reference to “merits” in section 30P is a clear indication
that a litigant seeking to challenge a determination ideally ought to challenge the merits.

[67] Since the High Court in any event has review po wers, quite apart from
section 30P, in principle a court to which such an application is made under section 30P
can adjudicate review grounds , but not under the guise of section 30P. It can do so
under the Promotion of Administrative Justice Act58 or the principle of legality.
Whether it should do so, or rather decide the merits, depends on whether a party has
demonstrated that appeal proceedings would not provide appropriate relief.

[68] In this case, the Fund approached the High Court and sought rel ief in the form
of judicial review, in that it asked the Court to “set aside” the determination of the
Adjudicator and for declaratory relief flowing from an order of illegality of the decision
by the Adjudicator. The Fund’s main contention was that the adjudication process was
fatally flawed, because the Adjudicator “failed to comply with the audi alteram partem
rule as she did not grant the Applicant a further opportunity to submit a response”. This
language falls squarely within the realm of a review in that it is clear that the Fund
sought to challenge the legality of the decision taken by the Adjudicator.

[69] In these circumstances, the High Court would have been entitled to decide the
complaint of the alleged non -compliance with audi alteram partem . The High Court
failed to consider this complaint by the Fund . It was thus open to the
Supreme Court of Appeal to consider this issue.

[70] It must be noted that the Adjudicator’s powers to interfere with a fund ’s
management of its affairs are governed by the provisions of Chapter VA of the Act. 59
As a creature of statute, the Adjudicator has no inherent jurisdiction. The Adjudicator’s

As a creature of statute, the Adjudicator has no inherent jurisdiction. The Adjudicator’s

58 3 of 2000.
59 Meyer above n 50 at para 6.

THERON J
29
powers and functions are confined to those conferred upon her by the provisions of
Chapter VA.60

[71] Section 30A(3) read with section 30D of the Act are the relevant empowering
provisions. Section 30D(2) of the Act provides that, in determining a complaint, the
Adjudicator must (i) apply, where appropriate, principles of equity ; (ii) have regard to
the contractual a rrangement or other legal arrangement between the complainant and
any financial institution; (iii) have regard to the provisions of the Act; and (iv) act in a
procedurally fair, economical and expeditious manner.61

[72] It is clear from the wording of section 30D(2) that the Adjudicator was required
to, inter alia , apply the principles of procedural fairness , natural justice and equity.
When a fund exercises its powers improperly by failing to comply with its duties under
section 7C(2), the Adjudicator is empo wered to determine whether a fund indeed
breached its duty to comply with the Act.62

[73] The Act explicitly provides that the Fund must be a party to a complaint before
the Adjudicator.63 This, of course, is an imperative prerequisite because, in essence,
what the Adjudicator is doing when she considers a complaint is assessing and
determining the Fund’s management of its own affairs .64. T o do so absent the Fund
being afforded a reasonable opportunity to make representations, would be to commit a
fundamental breach of the Fund’s procedural rights, in the form of audi alteram partem.

[74] Consistently with these principles, the L egislature reiterates the Adjudicator ’s
procedural duties in section 30F of the Act, where it provides that when the Adjudicator
intends to conduct an investigation into a complaint they “shall afford the fund or person

60 Id at para 7.
61 Section 30D(2) of the Act.
62 Mongale above n 44 at para 5.6.
63 Section 30G(b) of the Act.
64 Meyer above n 50 at para 6.

THERON J
30
against whom the allegations contained in the complaint are made, the opportunity to
comment on the allegations”.

[75] In this matter, albeit that the Adjudicator informed the Fund of the complaint
lodged by the applicant, it did no t do so adequately. The Adjudicator did not inform
the Fund that it would proceed with a determination of the complaint without giving the
Fund an opportunity to respond to the substance of the complaint. Most startlingly, the
Adjudicator’s determination relate d directly to the Fund’s investigation: the
Adjudicator made negative findings regarding the Fund ’s investigation in
circumstances where it had not afforded the Fund an opportunity to substantively
respond to the complaint , nor was it afforded an opportuni ty to place any evidence
before the Adjudicator about its investigation. This was a fatal irregularity on the part
of the Adjudicator and one which the Supreme Court of Appeal recognised as sufficient
reason to set aside the Adjudicator’s determination. The Court explained, “[i]n [these]
circumstances, the Fund was not allowed an opportunity to respond fully as provided in
section 30F before its award was set as ide. I agree with the sentiment that the
audi-principle was not adhered to .”65 I agree with th e Supreme Court of Appeal that
the Adjudicator’s decision must be set aside.

[76] The reasoning and conclusion of the Supreme Court of Appeal on this aspect
cannot be faulted. In making its decision, the Adjudicator failed to afford the Fund an
opportunity to respond fully to the applicant’s complaint, this despite the Adjudicator’s
duty to act in terms of the principles of natural justice and, specifically, in terms of what
is required of the Adjudicator by section 30F of the Act. T he Fund’s right to audi
alteram partem was infringed.

Misdirection by the Supreme Court of Appeal
[77] The Supreme Court of Appeal, somewhat surprisingly, found that the factual

[77] The Supreme Court of Appeal, somewhat surprisingly, found that the factual
dependency of Ms Masete and her children was “never properly challenged” and that

65 Supreme Court of Appeal judgment above n 8 at para 22.

THERON J
31
the Adjudicator and the High Court “failed to recognise this”. That Court held that the
Adjudicator had not complied with the audi alteram partem principle, and because the
dependency of Ms Masete and her children had not been challenged, the appeal had to
succeed. The finding by that C ourt that the factual dependency of Ms Masete and her
children was never challenged is a serious misdirection, entitling this Court to interfere
with the order it made.

[78] The factual dependency of Ms Masete and her children was at the heart of the
complaint lodged by the applicant with the Adjudicator. Factual dependency had been
disputed in both the complaint and the answering affidavit of the applicant in the
section 30P application in the High Court. In an affidavit file d in support of her
complaint lodged with the Adjudicator, the applicant said:

“My concern has always been that [Ms] Masete is not the customary wife of my
husband nor was she dependent on him. I also deny that her children are children of
the deceased or that they were dependent on him.”

[79] The applicant could not have made it clearer that her complaint to the
Adjudicator related to Ms Masete being regarded as the customary wife of the deceased
and her children’s alleged factual dependency on the deceased when she said the
following in her complaint affidavit to the Adjudicator:

“The issue I am complaining of is the inclusion and/or the consideration of [Ms] Masete
as the customary wife as well as a factual dependant of the deceased. Another
complaint is the consideration of the two children of [Ms] Masete, . . . as children or
dependants of the deceased.”

[80] In her answering affidavit filed in the section 30P application in the High Court,
the applicant made clear that she disputed the factual dependency of Ms Masete and her
children. After having detailed the results of her own independent investigation, she
said:

THERON J
32
“I submit that had the applicant done a thorough investigation it would have come to
the conclusion that [Ms] Masete and her two children were not factually dependent on
the deceased as they claimed.”

[81] It would appear that the S upreme Court of Appeal did n ot appreciate what the
applicant’s complaint was . The Court appears to have decided that the Adjudicator’s
determination had to be set aside because of procedural defects in the Adjudicator’s
process and that, due to the time that has passed, it was in the interests of justice that it
determine the matter itself instead of referring it back to the Adjudicator. The
Supreme Court of Appeal then proceeded to find that Ms Masete had factually proven
that the deceased maintained her and her children. In arriving at this conclusion, the
Supreme Court of Appeal relied on information contained in the custody dispute that
came to light after the distribution decision was taken by the Fund.

[82] Having regard to the legal nature of section 30P proceedings discussed above,
and the facts of this matter, the Supreme Court of Appeal was wrong, both in law and
in fact, in concluding that the only dispute the High Court was required to determine
was whether the Adjudicator had complied with the audi alteram partem principle.

At which stage must dependency be determined?
[83] After the hearing of this matter, the Chief Justice issued directions requiring the
parties to address, inter alia , the following question: on a proper interpretation of
section 37C of the Act, w hen is the appropriate stage a pension f und must make a
determination as to who is a dependant for the purpose of distributing a death benefit –
at the stage when the determination of dependency is made or at the date of death of the
member?

[84] According to the applicant, the decision as to who is a dependant must be made
at the same time as the distribution decision. She says that following the investigation

at the same time as the distribution decision. She says that following the investigation
conducted by a pension fund, it makes a determination as to who is a dependant and
what an equitable allocation to the dependants would be. The Fund contends that it has

THERON J
33
a discretion to determine factual dependency as well as the proportion of death benefits
to each class of dependants. The Fund agrees with the finding in Guarnieri that it is
required to identify dependants within 12 months of the member’s passing. Once
having identified the dependants, the board of a fund is required to determine the extent
of dependency. This is the first stage of the process. In the next stage of the process, a
fund must make an equitable distribution of the death benefits among the identified
dependants.

[85] The amicus curiae contends that, although section 37C does not specify the date
on which dependency must be determined, it can only be the date of a member’s death;
otherwise there would be different dates of dependency for different dependants.
Namely, that the date of death would apply in respect of factual dependants to determine
dependency, but a later date of dependency would potentially apply in respect of
dependants such as spouses and children who are found to have been dependent on the
member after their death.

[86] The current position is reflected in Guarnieri, where the
Supreme Court of Appeal answered this question as follows:

“Given all these considerations of language, purpose and practicality, in my view, the
proper construction of section 37C(1)(a) is that the time at which to determine who is
a dependant for the purpose of distributing a death benefit is when that determination
is made, and furthermore, the person concerned must still be a beneficiary at the time
when the distribution is made. That is the only way in which to ensure that the persons
identified as dependants are those whose interests the section seeks to protect.”66

[87] Prior to Guarnieri (High Court)67 and Guarnieri68 in 2018 and 201 9,
respectively, the question of which date was the operative date on which the fund must
consider dependency and the other factors set out above, was not clear. Many funds

consider dependency and the other factors set out above, was not clear. Many funds

66 Guarnieri above n 23 at para 25.
67 Guarnieri v Fundsatwork Umbrella Pension Fund [2018] ZAGPPHC 579.
68 Guarnieri above n 23.

THERON J
34
took the view that the key date is date of death of the member, and disregarded
subsequent changes in dependency considerations. This also meant that, if a
section 37C decision was reviewed, set aside and remitted to the board for decision
afresh, the board again considered the extent of dependency as of date of death, and not
at a later date.

[88] Guarnieri changed this position . The Supreme Court of Appeal dismissed the
Fund’s argument that the correct point in time at which to consider the ext ent of
dependency is the member’ s date of death. It found that this interpretation is not
sensible and was contrary to the purpose of section 37C – “to provide maintenance to
those who have need of it”.69 In that case the deceased member’s mother died after the
member, but unbeknownst to the Fund, four days before it made its distribution
decision. Upon remittal to the Fund, it took the same distribution decision with
reference to the position as at the member ’s date of death, despite now being aware of
the subsequent death of the deceased’s mother.

[89] On appeal, the Supreme Court of Appeal confirmed that a fund must assess
dependency at the date of its distribution decision – usually a much later date:

“The purpose of s ection 37C is to provide some protection for dependant s, both
existing and potential. The obvious time at which decisions should be taken in that
regard is when the determination is made. At that stage the board should have
completed its enquiries and be in a position to assess the relative present and futur e
needs of the members of the class of dependants it has identified. Those such as the
posthumously born child, or the person who has fallen on hard times, can then be
assisted, and those whose fortunes have improved, so that they no longer need to be
maintained, can drop out of the picture.
This does not impose too great a practical burden on the board. It will continue to make

This does not impose too great a practical burden on the board. It will continue to make
its determinations on the evidence to hand when it comes to take the decision. It
imposes upon a board an obligation to check c arefully that the information it has is

69 Guarnieri above n 23 at paras 22-3.

THERON J
35
accurate and to ensure that when it makes distributions the intended beneficiaries will
be the persons who benefit from them.”70 (Footnotes omitted.)

[90] The question posed must be considered in light of the purpose of section 37C of
the Act as enunciated in Mashazi71 where it was held, as mentioned,72 that the purpose
of that section is to protect dependants and to ensure that no dependants are left without
support following the death of a member. Upon notification of death, the fund is
required to conduct an investigation as contemplated in section 37C, read with
subsection 1, for the purposes of determining whether there are beneficiaries
(dependants and nominees) and to determine the equitable al location of the benefit in
line with the Sithole guidelines.73 It is only upon the conclusion of the investigation
that a decision can be made as to who is a dependant. The date of death of a member is
relevant to determine who relied on the member for financial support while the member
was still alive. In other words, who was in fact depend ent on the member for
maintenance during their lifetime. The objective facts relevant to determine the factual
dependency must therefore have existed at the time of the member’s death.

[91] It is important to note that the test for factual dependency only applies to factual
dependants and not spouses and children.74 Section 1 paragraph (b)(ii) of the definition
of “dependant” lists a “spouse” as one of the dependants. The term “spouse” is defined
in section 1 of the Act as follows:

“‘[S]pouse’ means a person who is the permanent life partner or spouse or civil union
partner of a member in accordance with the Marriage Act, 1961 (Act 68 of 1961), the

70 Id at paras 23-4.
71 Mashazi above n 13 at 632I-J.
72 Above at [39].
73 See, for example, South African Retirement Annuity Fund v Pension Funds Adjudicator [2024] ZAMPMBHC
52 at paras 14-19 and Sithole above n 29 at paras 24-5.

52 at paras 14-19 and Sithole above n 29 at paras 24-5.
74 See Wasserman v Central Retirement Annuity Fund (1) [2001] 6 BP LR 2160 (PFA) (Wasserman) at
paras 10-11.

THERON J
36
Recognition of Customary Marriages Act, 1998 (Act 68 of 1997), or the Civil Union
Act, 2006 (Act 17 of 2006), or the tenets of a religion.”

[92] The inclusion of a customary spouse in terms of subsection (b)(ii) is provided
for without prima facie evidence of the marriage such as a marriage certificate, if the
board is able to establish that a customary union was celebrated and continued to subsist
at the time of death of the deceased member.75

[93] Whether someone qualifies as a spouse is in essence a matter of fact . Once it
has been shown on the facts that someone is married to the member, that spouse of the
deceased automatically qualifies as a dependant, even if they were estranged. 76 A
pension fund and its board have no discretion in that regard. This is consistent with the
legislative purpose to ensure that those people whom the member was liable to maintain
are not left without support.77

[94] Section 1 paragraph (b)(iii) of the definition of “dependant” lists a “child” of the
deceased member, including a posthumous child, an adopted child and a child born out
of wedlock, as dependants. The board has no discretion in this regard. Whether
someone is a child of the deceased is a factual enquiry, but once a child is identified ,
their status as a dependant is a matter of law. A child of the deceased cannot be excluded
on the basis that they were not factually dependent on the deceased, as that would mean
that children who are neglected by their absent parents would suffer a penalty.

[95] Section 1 paragraph (a) of the definition of “dependant” lists a person in respect
of whom the member is legally liable for maintenance. Again, it is irrelevant whether
the person was in fact depend ent on the deceased member. The question is whethe r
there was a legal obligation on the deceased to maintain the person.

75 See Moshidi v Kimberley-Clark Provident Fund [2003] 7 BPLR 4947 (PFA) at paras 23-4.

75 See Moshidi v Kimberley-Clark Provident Fund [2003] 7 BPLR 4947 (PFA) at paras 23-4.
76 Momentum Retirement Annuity Fund v V R Krzus, unreported decision of the Financial Services Tribunal, Case
No PFA53/2019 (9 March 2020) at paras 22-5, 28 and 39.
77 Mashazi above n 13 at 632I-J.

THERON J
37

[96] Spouses and children of the deceased members can correctly be classified as
legal dependants. They qualify as dependants automatically, as of right. There is no
discretion to be exercised by the board on that score.78 This does not necessarily mean
that they will be included in the equitable distribution , but they have to be recognised
as dependants when the board considers an equitable distribution.

[97] To sum up: the definition of “dependant” in section 1 of the Act encompasses
three types of dependants: legal dependants, 79 factual depend ants80 and future legal
dependants.81 A spouse could be catered for either in subsection (a) or (b) of the
definition of “dependant” in section 1 of the Act. Subsection (a) refers to dependants
where there is a legal duty of support which arises when the law imposes a duty of
support due to the relationship between parties. A spouse and children are legal
dependants whose status is defined in the Act itself. The test for factual dependency
only applies to persons falling under section 1(b)(i) of the Act.

[98] Section 1 paragraph (b)(i) of the definition of “dependant” lists a category of
people in respect of whom the member is not legally liable for maintenance. The
definition says that such a person can qualify as a dependant if the person was in the
opinion of the board, upon the death of the member , in fact dependent on the member
for maintenance.82 The threshold to qualify as a factual dependant is twofold: the
dependant required the support of the member and the member regularly provide d the

78 Momentum Retirement Annuity Fund vs V R Krzus above n 76 at para 22.
79 Section 1 paragraph (a) of the definition of “dependant” of the Act.
80 Section 1 paragraph (b) of the definition of “dependant” of the Act.
81 Section 1 paragraph (c) of the definition of “dependant” of the Act.

81 Section 1 paragraph (c) of the definition of “dependant” of the Act.
82 The term “maintenance” must be given its ordinary meaning having regard to context and purpose of
section 37C. It means “the action of providing oneself, one’s family, etc., with means of subsistence or the
necessaries of life”, such as shelter, schooling, food and clothing. See Shorter Oxford English Dictionary 5 ed
(Oxford University Press, 2002) at 1674.

THERON J
38
required support. 83 The word “was” in paragraph (b)(i) denotes the past tense.84 It
refers to a period when the member was alive. This is buttressed by the following words
“upon the death of the member”, which can only mean as at the date the member died.

[99] The fact that the definition also requires proof of dependency on the member for
maintenance is a clear indication that the dependency referred to here is historical rather
than one existing at the date of the distribution decision. It would be absurd tha t
someone who was not factually dependant on the member while they were alive can
suddenly become a factual dependant after the member ’s death. The opposite would
also be absurd: that someone who depended on the member for maintenance at the time
of the m ember’s death became disqualified after the member’s death. Changed
circumstances do not affect the status of a dependant , but may affect the equitable
distribution.

[100] The Guarnieri interpretation is a departure from the settled interpretation that the
date for determining dependency is the date of the member’s death . There are several
cases85 wherein the Adjudicator held that one’s factual dependency must be determined
at the time of the member’s death. For instance, in Magongo,86 the Adjudicator
considered the factual dependency of a child on the deceased member , because there
was no clear evidence of paternity as to render the child a legal dependant. The
Adjudicator held that “[f]or the complainant’s child to qualify as a factual dependant,

83 See Govender v Alpha [2001] 4 BPLR 1843 (PFA) at para 19 and Gunpath v Momentum, unreported decision
of the Financial Services Tribunal, Case No PFA55/2019 (8 October 2019) at para 29. In both these cases, the
Adjudicator and Financial Services Tribunal , respectively, found that payments must be made sufficiently

regularly to meet the threshold of “maintenance”. Sporadic or gratuitous payments would not necessarily qualify
as “maintenance” payments.
84 See Guarnieri above n 23 at para 14. See also Shorter Oxford English Dictionary 5 ed (Oxford University Press,
2002) at 3585.
85 See Wasserman above n 74 at para 13 and Boonzaier v Allan Gray Retirement Annuity Fund [2018] JOL 40350
(PFA) at para 4.7.
86 Magongo v Municipal Councillors Pension Fund [2011] JOL 27020 (PFA) at para 5.6.

THERON J
39
the complainant must prove that the child was dependent on the deceased at the time of
the member’s death”.87

[101] The Supreme Court of Appeal’s interpretation could lead to the untenable
situation of introducing new dependants who were not legally or factually dependent on
the deceased at the time of their death. The interpretation is contrary to the plain
language contained in the definition of “dependant” in section 1 of the Act, which refers
to the “death of the member” 88 and includes wording such as “had the member not
died”.89 This textual reading suggests that the determination of dependency is made at
the time of death of the member, while giving a fund a 12-month period to conduct a
proper investigation.

[102] This interpretation also accords with the social security purpose of section 37C.
The purpose of the provision is to protect those who were dependent on the member at
the time of their death. But for the proceeds from a fund, the dependants of the deceased
would face significant financial strain and, in some cases, may have to resort to reliance
on the State for support. In any event, because the date of death is to be used to
determine dependency, this does not mean that changed circumstances cannot be taken
into account when the equitable allocation is made.

[103] To the extent that the Supreme Court of Appeal in Guarnieri held that factual
dependency is determined based on the objective facts existing on the date of the
distribution decision and not the facts that prevailed on the date of the member’s death,
it erred. The determination of dependency is based on the facts at the date of the
member’s death ( this accords with section 1 paragraph (b)(i) of the definition of
“dependant” of the Act). An equitable distribution is usually made some time later. An
equitable distribution may consider changed circumstances, if any, after death.

87 Id at para 5.5.

87 Id at para 5.5.
88 Section 1 paragraph (b)(i) of the definition of “dependant” of the Act.
89 Section 1 paragraph (c) of the definition of “dependant” of the Act.

THERON J
40

Must the person be a “beneficiary” when the distribution is made?
[104] Under this heading, the Court must consider the second part of the finding of the
Supreme Court of Appeal in Guarnieri90 that—

“the time at which to determine who is a dependant for the purpose of distributing a
death benefit is when that determination is made, and furthermore, the person
concerned must still be a beneficiary at the time when the distribution is made ”.
(Emphasis added.)

[105] The applicant submits that there is no legal basis for the proposition that the
person must be a “beneficiary” when the distribution is made . A change in
circumstances should affect only the allocation of funds and not whether someone was
a factual dependant. The applicant notes Guarnieri’s use of the wor d “beneficiary” –
beneficiary is a separately defined term under the Act and it would appear that
Guarnieri meant to refer to a dependant.

[106] The use of the word “beneficiary” in Guarnieri is confusing. That is because
beneficiary is defined in the Act as “ a nominee of a member or a dependant who is
entitled to a benefit, as provided for in the rules of the relevant fund ”. The term
dependant means both a legal and factual dependant. A nominee, on the other hand, is
a person that a member nominates to receive a death benefit upon their death.
“Beneficiary” therefore appears to be used as an umbrella term that may include
dependants and nominees.

[107] The Fund is of the view that the statement by the Supreme Court of Appeal is
obiter dictum (made in passing), because that Court was not required to consider what
would happen after a decision was made as to who is a dependant but before a
determination on the equitable allocation of funds. The amicus curiae submits that there
is no legal basis to support the decision of the Supreme Court of Appeal on this aspect.

90 Guarnieri above n 23 at para 25.

THERON J
41

[108] There is consensus among the parties that there is no legal basis for the
proposition by the Supreme Court of Appeal that one must still be a “beneficiary” at the
time distribution is made . Section 37C gives funds up to 12 months to conduct
investigations. Circumstance s can change in that period. This militates against the
proposition made by the Supreme Court of Appeal. The longer the investigation period,
the more scope there is for potential changed circumstances. The changed
circumstances should only impact the distribution decision and not the identification of
who was a dependant at the date of the member’s death (i.e. , determination of
dependency).

[109] This is supported by the definition of “dependant” because legal dependency is
determined as a matter of law. Secondly, whether someone was in fact dependent on
the member for maintenance can more accurately be determined through the facts that
prevailed at the date of death of the member.

[110] To hold a fund to a particular date of decision could have arbitrary results . In
simple cases a fund may complete its investigations in a short period, while in other
cases it may take a much longer period . It could also result in dependants who were
dependent on the deceased at the time of death being deprived of support if the test in
Guarnieri was applied. The applicant also points to the following possible untenable
results that could follow:
(a) A live-in partner of the deceased , who was factually depend ent on the
deceased when the deceased was alive , is ejected from the deceased’s
house by the deceased’s family immediately after the funeral and is
thereafter supported by the ejected partner’s family. It could be that 12
months later when the distribution decision is made, the second part of
paragraph 25 of Guarnieri may serve to disqualify them since they would
no longer be factually dependent at the date of the distribution.

no longer be factually dependent at the date of the distribution.
(b) If relatives (such as nieces and nephews) of the deceased lived with the
deceased while he was alive and after the funeral, they went on to live

THERON J
42
with other relatives and were taken care of by those other relatives, the
second part of the Guarnieri test may serve to disqualify them since they
would no longer be factually dependent on the date of the distribution.

[111] There is no basis to conclude that someone must be a “beneficiary” at the time
the distribution is made. In effect, that requires a separate dependency determination.
Whether someone is a legal dependant is a matter of status which does not change over
time. Factual dependency, however, is determined at the time of the member’s death,
according to the Act. Indeed, circumstances may change between the t ime of the
member’s death and the time of distribution of the benefit . Once an individual is
identified as a dependant, whether legal or factual, that status as a dependant does not
change. If, at the distribution stage, there are changed circumstances that alter the needs
of the d ependant – for instance, if they inherited or won a large sum of money that
rendered them no longer reliant on the deceased member , or passed away, as was the
case in Guarnieri – the fund may have regard to these circumstances when determining
an equitable distribution.

Relief
[112] This Court will only grant an order of substitution in exceptional circumstances.
The applicant, while urging this Court to grant a substitution order in respect of the
Fund’s decision, placed no exceptional circumstances before this Court. In Trencon,91
this Court emphasised that substitution is an extraordinary remedy and remittal is the
prudent and proper course. 92 It also said that “[u]ltimately, the appropriateness of a
substitution order must depend on the consideration of fairness to the implicated
parties”.93 The determination of who qualifies as a dependant and what benefit they
ought to receive is a highly fact sensitive one, best answered with reference to the
current circumstances of the parties. This Court is not appropriately positioned, without

current circumstances of the parties. This Court is not appropriately positioned, without

91 Trencon Construction (Pty) L td v Industrial Development Corporation of South Africa Ltd [2015] ZACC 22;
2015 (5) SA 245 (CC); 2015 (10) BCLR 1199 (CC).
92 Id at para 42.
93 Id at para 53.

THERON J
43
a proper case being made, to place itself in the shoes of the Fu nd and to make a
determination as the Fund would. It is on this basis that substitution of the Fund’s
decision is not tenable.

[113] The question of remittal then becomes: to which forum does the matter return?
In my view, remittal to the Adjudicator would not be in the interests of justice. The
most compelling factor in favour of remittal to the Adjudicator would be that the Fund’s
right to be heard , as per the audi alteram partem principle, was breached and remittal
to the Adjudicator would cure this breach. In this case, the Fund sought an order from
the High Court declaring that it had conducted a proper investigation and tendered the
relevant evidence in that respect. I am not convinced that the breach was not already
remedied by subsequent proceedings. I am not satisfied that a remittal to the
Adjudicator would be sufficient in this case, as they would likely arrive at the
conclusion that the Fund failed to conduct a proper investigation and therefore remit to
the Fund. This foregone conclusion militates against remitting to the Adjudicator, to
avoid further wasted costs and protraction of the matter.

[114] In my view, and in line with standard practice, it is necessary to remit the matter
to the Fund. In a line of cases94 where the Adjudicator has found that a fund has failed
to conduct a proper investigation, whether that dealt with the thoroughness of the
investigation or its timeliness, the Adjudicator has remitted to the fund. Thus, the case
law supports that in the ordinary course, when a fund errs in a matter that results in an
improper investigation, contrary to section 37C, the appropr iate remedy is remittal to
the fund to re-investigate the facts and make a fresh determination. The Fund must
therefore conduct its investigation afresh, considering all relevant facts, to identify
dependants and determine an equitable allocation. It is important to note that the

dependants and determine an equitable allocation. It is important to note that the
outcome of t he custody proceedings between Ms Masete and Mr Mphafudi have no
bearing on the order of this Court. As explained, dependency as at the date of the

94 See Msomi v Rennies Group Provident Fund [2018] 2 BPLR 467 (PFA) at paras 5.15 and 6.1.2 and Van der
Merwe v Corporate Selection Retirement Fund [2014] 2 BPLR 296 (PFA) at paras 5.9 and 6.1.2 where the
Adjudicator remitted to the Fund for a fres h investigation, determination of dependants and equitable allocation
because the Fund had initially failed to conduct a proper investigation.

THERON J
44
member’s death is decisive and the Fund must consider the relevant facts at the time of
Mr Mutsila’s death to determine his dependants. Any order made in relation to the
custody proceedings is of no moment to this enquiry.

[115] There has been a significant lapse of time since the Fund’s decision on
9 April 2014. Much water has flowed under the bridge and in order that there be an
equitable outcome (equitable in particular for the correctly identified dependants), the
dependants should not be denied the death benefit to which they were equitably entitled
when the initial flawed decision was taken, namely 9 April 2014. In the interests of
justice, taking into account the prejudice and hardship faced by the dependants during
the protracted review and litigation proceedings, the Fund should be required to
conclude its investigation within three months from the date of this judgment. This
balances the Fund’s obligation to conduct a thorough investigation and the dependants’
right to an expeditious, equitable order.

Costs
[116] Counsel for the applicant acted pro bono (voluntarily without payment) and
requested that this Court aw ard only the costs of the counsel who appeared at the
Supreme Court of Appeal. This Court notes its appreciation for the pro bono services
of the applicant’s counsel.

[117] While the Fund enjoys partial success in this Court, in relation to the audi
alteram partem violation, the ultimate finding that it failed to conduct a proper
investigation, justifies an award of costs in favour of Ms Mutsila.

Order
[118] The following order is made:
1. Leave to appeal is granted.
2. The appeal is upheld.

THERON J
45
3. The order s made by the High Court, the Full Court and the
Supreme Court of Appeal are set aside and replaced with the following:
“(a) The determination of the Adjudicator dated 8 September 2014 is
set aside.
(b) The determination of the Municipal Gratuity Fund dated
9 April 2014 is set aside.
(c) The matter is remitted to the Municipal Gratuity Fund to make a
fresh determination , within three months from the date of this
judgment, of dependency and determine an equitable allocation
and distribution of the deceased’s death benefit having regard to
the circumstances as at 9 April 2014.”
4. The first respondent is directed to pay the applicant’s costs, including the
costs of two counsel , where so employed, in the High Court, th e
Full Court, the Supreme Court of Appeal and in this Court.

For the Applicant:



For the First Respondent:



For the Amicus Curiae:
S Khumalo SC, M Mojapelo SC,
D Mtsweni, K Magan and F Thema
instructed by PBN Mawila Attorneys

R Shepstone, C Shahim and N Jongani
instructed by Michael Popper and
Associates Incorporated

H Drake, L Molete and L Mbatha
instructed by Shepstone and Wylie
Attorneys