THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Reportable
Case No: 1163/2024
In the matter between:
SOUTH AFRICAN RETIREMENT
ANNUITY FUND APPELLANT
and
PENSION FUNDS ADJUDICATOR FIRST RESPONDENT
S E M VILJOEN SECOND RESPONDENT
Neutral citation: South African Retirement Annuity Fund v Pension Fund s
Adjudicator and Another (1163/2024) [2026] ZASCA 79 (28
May 2026)
Coram: ZONDI DP and MBATHA and HUGHES JJA and MAMOSEBO and
GOVINDJEE AJJA
Heard: 3 March 2026
Delivered: 28 May 2026
Summary: Pension Law – interpretation of s 37C(1) of the Pension Funds Act 24
of 1956 (the Act) – interpretation of the phrase - within 12 months of the death of
the member becomes aware of or traces a dependant or dependants of the member -
2
ss 37C(1)(a) and 37C(1)(c) – the South African Retirement Annuity Fund (the Fund)
seeks relief – on the basis that the payment to dependants to be strictly made within
a period of 12 months from the date of death of the member – the Fund’s
interpretation incorrect – contrary to the purpose of the Act.
3
ORDER
On appeal from: Mpumalanga Division of the High Court, Mbombela
(Ratshibvumo DJP sitting as court of first instance):
The appeal is dismissed with costs, including costs of two counsel where so
employed.
JUDGMENT
Mbatha JA (Zondi DP and Hughes JA and M amosebo and Govindjee AJJA
Concurring):
Introduction
[1] This is an appeal against the judgment and order of the Mpumalanga Division
of the High Court, Mbombela, per Ratshibvumo DJP (the high court). The high court
dismissed the appellant’s application, the South African Retirement Annuity Fund
(the Fund), in which it sought an order declaring invalid and incorrect the decision
of the first respondent, the Pension Funds Adjudicator (the Adjudicator). On 23 June
2023, the Adjudicator, acting in terms of s 30P of the Pension Funds Act 24 of 1956
(the Act ), found in favour of the second respondent, Mrs Sophia Viljoen (Mrs
Viljoen). The appeal is with leave of the high court. I will interchangeably use the
word beneficiary to denote the dependants or nominees where the context requires.
[2] The appeal concerns the interpretation of the phrase ‘within twelve months of
the death of the member ’ appearing in s 37C of the Act. The question is whether
s 37C , properly interpreted, permitted the Fund to pay the death benefit to the
4
deceased’s estate before est ablishing the identity of the deceased member’s
dependants.
[3] Section 37C, which regulates the payment of any benefit payable by the Fund
upon the demise of a member, provides as follows:
‘(1) Notwithstanding anything to the contrary contained in any law or in the rules of a registered
fund, any benefit (other than a benefit payable as a pension to the spouse or child of the member
in terms of the rules of a registered fund, which must be dealt with in terms of such rules) payable
by such a fund upon the death of a member, shall, subject to a pledge in accordance with section
19(5)(b)(i) and subject to the provisions of sections 37A(3) and 37D, 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.
(b) If the fund does not become aware of or cannot trace any dependant of the member
within twelve months of the death of the member, and the member has designated in writing to the
fund a nominee who is not a dependant of the member, to receive the benefit or such portion of
the benefit as is specified by the member in writing to the fund, the benefit or such portion of the
benefit shall be paid to such nominee: Provided that where the aggregate amount of the debts in
the estate of the member exceeds the ag gregate amount of the assets in his estate, so much of the
benefit as is equal to the difference between such aggregate amount of debts and such aggregate
amount of assets shall be paid into the estate and the balance of such benefit or the balance of such
portion of the benefit as specified by the member in writing to the fund shall be paid to the nominee.
(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: Provided that this paragraph shall only apply to the designation of a nominee made
5
on or after 30 June 1989: Provided further that, in respect of a designation made on or after the
said date, this paragraph shall not prohibit a fund from paying the benefit, either to a dependant or
nominee contemplated in this paragraph or, if there is more than one such dependant or nominee,
in proportions to any or all of those dependants and nominees.
(c) If the fund does not become aware of or cannot trace any dependant of the member within
twelve months of the death of the member and if the member has not designated a nominee or if
the member has designated a nominee to receive a portion of the benefit in writing to the fund, the
benefit or the remaining portion of the benefit after payment to the designated nominee, shall be
paid into the estate of the member or, if no inventory in respect of the member has been received
by the Master of the Supreme Court in terms of section 9 of the Administration of Estates Act,
1965 (Act No. 66 of 1965), into the Guardian’s Fund or unclaimed benefit fund. ’(Emphasis
added.)
Background facts
[4] The deceased, Mr Marius Viljoen (Mr Viljoen), died on 26 December 2019.
He was a member of the Fund, which is underwritten by Old Mutual Life Assurance
Company (South Africa) Limited. He left a retirement annuity benefit in the sum of
R52 120.53. Mr Viljoen had not nominated a beneficiary for the aforesaid death
benefit. He died intestate, and as the value of his estate was below the statutory limit
of R250 000 no executor was appointed.
[5] Mr Viljoen is survived by his wife, Mrs Viljoen, who relies solely on the state-
funded old-age social relief grant. Before Mr Viljoen’s demise, Mrs Viljoen was
unaware of the existence of the retirement annuity benefit. The existence of the
benefit was brought to Mrs Viljoen's attention by a broker. It was only on 28 March
2022, with the assistance of the aforesaid broker, that she submitted a claim to the
Fund. This was approximately two years and three months following the demise of
Mr Viljoen.
6
[6] The Fund repudiated Mrs Viljoen's claim. On 18 July 2022, it resolved to pay
the death benefit to Mr Viljoen’s estate. This was done despite the estate not having
been reported to the relevant Master of the High Court.
[7] Aggrieved by this decision, Mrs Viljoen lodged a complaint with the
Adjudicator. On 23 June 2023, the Adjudicator set aside the decision of the Fund
and made the following determination:
‘6.1.1 The decision by the Fund to pay the death benefit into the deceased’s estate is hereby set
aside.
6.1.2 The Fund is directed to immediately commence with investigations in terms of section 37C
of the Act, determine the deceased’s beneficiaries and their benefit entitlement within six weeks
of this determination;
6.1.3 The Fund is ordered to notify the beneficiaries of its decision in terms of the allocation of the
death benefit in paragraph 6.1.2 above, within one week of completion thereof; and
6.1.4 The Fund is ordered to pay the death benefit to the deceased’s beneficiaries as identified in
paragraph 6.1.2 by no later than 31 August 2023.’
[8] The Fund challenged the Adjudicator's d etermination in the high court. It
contended that s 37C(1)(a) and (c) obliges the Fund to pay the death benefit to the
estate, if no dependant of the deceased member is traced within 12 months from the
date of his death. The high court rejected the construction of s 37C contended for
by the Fund. It held that such construction would not only defeat its purpose but
would fail to ensure that the Fund carr y out its statutory obligation to trace the
dependants and investigate their depend ency on the deceased member. It
accordingly dismissed the Fund’s application with costs and confirmed the
Adjudicator's order.
7
Before this Court:
The Fund’s submissions
[9] The Fund took issue with the findings of the high court. It submitted, first,
that the proper interpretation of s 37C(1) is that the 12 month period in that provision
commences on the date of the member’s death. The said 12 month period referred
to, automatically terminates a right or a claim to the pension benefit. Second, there
is no obligation on the Fund to trace the dependants or nominees of a member if the
Fund is made aware of the death of the member after a period of 12 months from the
date of death of the member. Third, if the Fund becomes aware of the death of a
member after a period of 12 months, the provisions of s 37C(1)(a), (b) and (bA) do
not apply. Consequently, the benefit has to be paid to the estate. Fourth, that as much
as it acknowledges the social security nature of s 37C(1), it submitted that, by
implication, the provision also accords protection to the creditors of the deceas ed
member's estate. It was never the intention of the legislature that the creditors should
wait indefinitely, whilst the Fund is trying to trace the dependants or nominees.
Consequently, the creditors should be preferred over the dependants or nominees.
[10] In amplification of its argument, the Fund submitted that there is no
inconsistency between the text and the context in s 37C(1). This is clear from the
literal wording of s 37C(1). In addition, it posited that the various subsections of s
37C(1) repeat a single condition, namely, the determination of the dependants or
nominees, which can only be done within a period of 12 months from the date of
death of the member. This Court was also urged to disregard the definition of
‘unclaimed benefit’ in s 1 of the Act, as it does not apply to s 37C(1). It was
submitted that the said definition was contemplated to apply only to a Pension
Preservation Fund (the PPF) and a Provident Preservation Fund (the Provident Fund)
in terms of s 51 of the Income Tax Act 58 of 1962.
8
Mrs Viljoen’s submissions
[11] Conversely, it was submitted on behalf of Mrs Viljoen that the high court was
correct in confirming the Adjudicator's ruling. It was a rgued that the trigger for
s 37C(1) arises only when the Fund learns of a member's death. The Fund’s
construction of this provision on a narrow and restrictive textual interpretation
should be treated as flawed. Counsel for Mrs Viljoen argued further that the 12
month period stated in s 37C(1) serves as a guide, not a guillotine. In that regard, the
trustees are not bound by a member's date of death. It was further submitted that the
interpretation advanced by the Fund was at cross -purposes with the social security
objects of the Act. The object of the Act is to make provision for the member on
retirement, or to provide for the social security of his or her dependants and
nominees should the member die before retirement. The payment of the pension
benefit to deceased members' estates violates the rights of the dependants and
nominees to equality and social security.
The issue before this Court
[12] The issue for determination in the appeal is whether the payment of death
benefits should be made within 12 months of the date of the deceased’s death or 12
months after the Fund becomes aware of the deceased’s death. This requires a proper
interpretation of s 37C(1).
The applicable legal principles
[13] The established jurisprudence of this Court provides a useful guide for
interpreting statutory provisions, as confirmed by the Constitutional Court in
9
Minister of Police and Others v Fidelity Security Services (Pty) Ltd,1 where the said
principles were summarised as follows:
‘The interpretation of the Act must be guided by the following principles:
(a) Words in a statute must be given their ordinary grammatical meaning unless to do so would
result in an absurdity.
(b) This general principle is subject to three interrelated riders: a statute must be interpreted
purposively; the relevant provision must be properly contextualised; and the statute must be
construed consistently with the Constitution, meaning in such a way as to preserve its
constitutional validity.
(c) Various propositions flow from this general principle and its riders. Among others, in the case
of ambiguity, a meaning that frustrates the apparent purpose of the statute or leads to results which
are not businesslike or sensible should not be preferred where an interpretation which avoids these
unfortunate consequences is reasonably possible. The qualification “reasonably possible” is a
reminder that judges must guard against the temptation to substitute what they regard as
reasonable, sensible, or businesslike for the words actually used.
(d) If reasonably possible, a statute should be interpreted to avoid a lacuna (gap) in the legislative
scheme.’2
In other words, the text, context and the purpose of legislation must be considered
in a unitary exercise.
[14] There is also a constitutional injunction to interpret legislation in line with
s 39(2) of the Constitution. Section 39(2) requires that ‘[W]hen interpreting any
legislation, and when developing the common law or customary law , every court,
tribunal or forum must promote the spirit, purport and objects of the Bill of Rights’.
How s 39(2) finds expression in the interpretive exercise was explained by the
1 Minister of Police and Others v Fidelity Security Services (Pty) Ltd and Others [2022] ZACC 16; 2022 (2) SACR
519 (CC); 2023 (3) BCLR 270 (CC).
2 Ibid para 34.
10
Constitutional Court in Investigating Directorate : Serious Economic Offences v
Hyundai Motor Distributors (Pty) Ltd (Hyundai).3 Langa DP said that ‘[t]he purport
and objects of the Constitution find expression in s ection 1 which lays out the
fundamental values which the Constitution is designed to achieve’. In simpler terms,
the Constitutional Court found that s 39(2) does not demand judicial attention only
when a constitutional issue is to be considered, but whenever the court interprets
legislation.
[15] I point out that the interpretative exercise, which ‘involves a consideration of
the language, context and purpose of the statute ’, has to be aligned with the
objectives of s 39(2) .4 The Constitutional Court , in Chisuse v D irector-General,
Department of Home Affairs (Chisuse), established that language, context and
purpose are interpreted and require simultaneous consideration in statutory
interpretation. They are not isolated, sequential steps. Courts must interpret texts by
reading the literal wording alongside the historical background and constitutional
values all at once.5
[16] The Act is the primary legislation regulating pension and retirement fund
benefits in South Africa. It ensures that the funds are registered, managed
responsibly, and that the trustees act in the member’s best interests. Section 37C
governs death benefits, requiring trustees to allocate funds to dependants rather than
unthinkingly following nominations. This is designed to ensure financial protection
for the deceased member's family. The Act applies mostly to private pension funds.
3 Investigating Directorate: Serious Economic Offences and Others v Hyundai Motor Distributors (Pty) Ltd and
Others: In re Hyundai Motor Distributors (Pty) Ltd and Others v Smit N O and Others [2000] ZACC 12; 2000 (10)
BCLR 1079 (CC); 2001 (1) SA 545 (CC); 2000 (2) SACR 349 (CC) para 22.
4 Chisuse v Director-General, Department of Home Affairs [2020] ZACC 20; 2020 (10) BCLR 1173 (CC); 2020 (6)
SA 14 (CC) para 48-50.
5 Ibid para 51-52.
11
The core objective of the Fund, as set out in the preamble, is to ensure the sound
financial management of funds, protect members' interests, and govern the payment
of benefits upon death or retirement. These funds are managed by a Board of
Trustees, which owes a fiduciary duty to the members.
[17] Section 7A of the Act places the governance and oversight of the Fund's
retirement benefits on the Fund's Board (the Board). The Board’s role, as regulated
by s 7A, is to control and oversee the Fund’s operations, in accordance with the law
and the Fund’s rules. The Board also acts in a fiduciary capacity, as its trustees must
act with diligence, care, and good faith, ensuring that they act at all times in the best
interests of the members and the Fund.6 This ethos is embodied in s 7C(1) of the Act
which provides that the ‘object of a board shall be to direct, control and oversee the
operations of a fund in accordance with the applicable laws and the rules of the fund’.
[18] The Act’s purpose is to regulate the registration, incorporation, management,
and dissolution of private pension funds. Most importantly, it protects members’
rights and enforces strict compliance for protecting members’ benefits. Sections 37A
and 37B of t he Act regulate the protection of benefits. Section 37C governs the
distribution of benefits upon a member’s death, ensuring that money is paid to the
dependants and nominees. It is indisputable that this provision prioritises the
financial security of the deceased members' dependants. Section 37B operates
alongside s 37C. It provides that if a member’s estate is sequestrated, their pension
fund interest does not form part of the insolvent estate. By operation of the law, these
benefits are excluded from the concursus creditorum in an insolvent estate. This is
also in line with the purpose of the Act.
6 Section 7C(2)(a) of the Pension Funds Act 24 of 1956.
12
Discussion
[19] In applying the aforementioned principles to the interpretation of the phrase
‘within twelve months of the death’, it is clear that what triggers the identification
and verification of the dependency process is the knowledge of the death of the
member. This is an unequivocal and verifiable event, explicitly stipulated in the
provision. Section 37C commences with a significant disclaimer stating that any
benefits payable by the registered fund upon the death of a member shall not form
part of the assets in the estate of the member and shall be dealt with as prescribed in
sub-paragraphs (a), (b), and (c).
[20] The Fund is called upon, once it becomes aware of or traces a dependant or
dependants, to make payment of such benefit to such dependant or dependants
proportionally or as it may deem equitable to one, some, or all such dependants. That
process, in practical terms, presupposes prior awareness of the member’s death.7 The
subsection could thus be interpreted to mean either within 12 months from the date
of death or within 12 months of becoming aware of the member’s death.
[21] It is common cause that the Fund did not become aware of Mr Viljoen’s death
within twelve months of his passing . However, the process of tracing and
determining the dependants can only commence once the Fund becomes aware of
the member’s death. This accords with the established approach that the phrase must
be interpreted in the light of the text, context and purpose of s 37C, considered
together.
7Section 37C(1)(a) provides:
‘(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.’
13
[22] The listing of the subsections in s 37C(1) is instructive. The sequence of the
subsections indicates the order of events , as stated in (a) - (c). The subsections
commence with the word ‘if’. The word ‘if’ is always used to introduce a
supposition, hypothesis, or uncertain possibility. It establishes a condition under
which a specific result or scenario will occur. It signifies that the outcome depends
on a factor that is not yet certain. The result is that after the Fund has not traced any
dependant, and in the absence of a nominee, may it proceed in terms of subsection
37C(1)(c).
[23] This aligns with the nature of the pension benefit. A pension benefit is a highly
regulated statutory mechanism designed for social protection. The trustees have the
ultimate responsibility for allocating the benefit. This is so because whilst you may
nominate beneficiaries, the trustees are not legally bound by you r nomination and
can choose or accept other beneficiaries to ensure that the dependants are not left
destitute. This is a social security legislation designed to protect a member’s
dependants, spouses, nominees, children, or anyone who was financially supported
by the deceased. Therefore, the precursor to making payment to the Guardian’s Fund
or the Unclaimed Benefit Fund should be to trace and identify the persons mentioned
in subsections 37C(1)(a) and ( b). The failure to do so defeats the purpose of s
37C(1).
[24] The aforementioned goals are buttressed by the definition of ‘unclaimed’
benefits in s 1 of the Act. Section 1 includes ‘a death benefit to a beneficiary under
s 37C not paid within 24 months from the date on which the Fund becomes aware
of the death of a member, or within such longer period as may be reasonably justified
by the board of the Fund in writing’. One can infer from this definition that if the
benefit is not paid within the period of 12 months, it can be paid to the Unclaimed
14
Benefit Fund within 24 months from the date on which the Fund became aware of
the death of a member or such a longer period as may be reasonably justified. This
can only mean that the Fund is given this period to identify and determine the
dependants or nominees of the deceased member before transferring the funds to the
unclaimed benefit fund. In addition, the 24 months can be extended where it is
reasonably justified. The purpose of this definition was not to accord protection to
the Fund, but to the dependants and nominees of the deceased member.
[25] The phrase ‘within twelve months of the death of a member’ in s 37C(1) of
the Act is repeated in all the subsections. Subsection (a) thereof obliges the Fund to
make payments to depend ants if the Fund, within 12 months of the death of a
member, becomes aware of or traces a depend ant or dependants of the member .
Subsection (bA) requires that payments to dependants and nominees be made ‘within
twelve months of the death of such a member ’. The common thread across all the
subsections is 12 months. It refers to the death of a member.
[26] The interpretation which should be accorded to s 37C(1) of the Act is that it
imposes a legal duty upon the Fund to identify any dependants and nominees of the
deceased member. Having identified those persons of interest, the Fund has to effect
an equitable distribution of the death benefit amongst the depend ants and/or
nominees. The definition of dependants in s 1 in relation to a member refers to:
‘(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 dependant 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;
15
(c) a person in respect of whom the member would have become legally liable for maintenance,
had the member not died.’
[27] The purpose of s 37 C was aptly described in Mashazi v African Products
Retirement Benefit Provident Fund8 (Mashazi) as follows:
‘Section 37 C 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 in order that no depend ants are left without support. Section 37 C(1) specifically
excludes the benefits from the assets in the estate of a member. Section 37C enjoins the trustees
of the pension fund to exercise an equitable discretion, taking into account a number of factors.’
[28] To achieve the objective of the Act, the Fund has to identify the dependants,
make an equitable distribution and choose a method of payment to them. The Fund
cannot carry out these objectives without identifying the dependants. Identification,
in a legal con text, means a specific process of establishing the specific identity of
the dependants. Tracing is the evidentiary process of identifying the dependants.
Tracing is not finding itself, but rather a precondition to the identification of the
dependants. This view is supported by the wording of s 37 C of the Act, which
requires the Fund to trace the dependants. It is therefore imperative that the tracing
alternative be operative if the Fund has not otherwise become aware of any
dependant. In that case, I find that, if the Fund became aware of the death of Mr
Viljoen after two years, nothing precluded it from investigating and tracing his
dependants.
[29] The Fund’s interpretation incorrectly postulates that the text specifically
envisages a situation in which if the Fund was not advised of a member's death
8 Mashazi v African Products Retirement Benefit Provident Fund 2003 (1) SA 629 (W); 2002 8 BPLR 3703 (W) at
3705-3706.
16
within the 12 months, such funds should be paid into the estate. The absurdity of this
argument is that the advocated interpretation is out of context and against the
purpose of the Act. The opening words of s 37C(1) underscore the legislature’s
intention to override all conflicting laws and fund rules, to exclude death benefits
from the deceased’s estate, and to subject their distribution to the statutory
framework of the Act.
[30] In Mutsila v Municipal Gratuity Fund and Another (Mutsila),9 the
Constitutional Court provided a conclusive interpretation of s 37C of the Act as
follows:
‘The question posed must be considered in light of the purpose of section 37C of the Act as
enunciated in Mashazi where it was held, as mentioned, 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 investigat ion 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 allocation of the
benefit in line with the Sithole guidelines. 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 dependent 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.’10
[31] I accentuate that, in the aforementioned paragraph, the Constitutional Court11
emphasised that it is only upon the conclusion of the investigation that a decision
can be made as to who is a dependant; it further confirmed that the date of death of
can be made as to who is a dependant; it further confirmed that the date of death of
9 Mutsila v Municipal Gratuity Fund and Another [2025] ZACC 17; 2025 (10) BCLR 1139 (CC); 2026 (1) SA 1 (CC)
10 Ibid at para 90.
11 Op cit fn 9.
17
a member is relevant in determining who relied on the member for financial support
while the member was still alive, and added that the objective facts relevant to
determining factual dependency must therefore have existed at the time of the
member’s death, a finding which effectively overruled the position of this Court in
Fundsatwork Umbrella Pension Fund v Guarnieri and Others (Guarnieri)12 that the
determination of dependency can merely be determined at the time of allocation of
the funds.
[32] The dictum in Mutsila can only mean that the pension benefit do es not form
part of the deceased estate, nor do the provisions of intestate succession law apply
to such benefit. In fact, s 37C of the Act requires that such a benefit be distributed
in line with the statutory scheme, which gives preference to need and dependency
above the member’s choice. It is only when the requirements of the statutory
provision in s 37C(1) of the Act above have not been satisfied that payment shall be
made to the estate.
[33] The Fund’s interpretation treats the payment to the estate as the default
position. This is contrary to the position affirmed by this Court in Kaplan and
Another NNO v Professional and Executive Retirement Fund and Others,13 similarly
in Guarnieri,14 where it specifically noted the social purpose of pro tecting
dependants, without entirely overriding the wishes of a deceased who has nominated
beneficiaries or made a will. The Constitutional Court in Mudau v Municipal
Employees Pension Fund and Others (Institute for Retirement Funds Africa NPC as
12 Fundsatwork Umbrella Pension Fund v Guarnieri and Others [2019] ZASCA 78; 2019 (5) SA 68 (SCA).
13 Kaplan and Another NNO v Professional and Executive Retirement Fund and Another [1999] ZASCA 27; [1999]
3 All SA 1 (A); 1999 (3) SA 798 (SCA) at 803.
14 Op cit fn 12.para 5.
18
Amicus Curiae) (Mudau),15 also recognised the social function of pension funds in
the context of our racially divided past, the developing economy, and the extensive
reliance on government social grants. Mudau16 found that the availability of the
pension benefit ensures financial stability for the deceased member’s family.
[34] The drafters of the legislation used the period of 12 months as a guideline,
mostly to prevent the delays that would be occasioned on the part of the Fund. It is
so because the administration and winding up of an estate generally takes longer
than 12 months in most cases. The death of the deceased only serves as a trigger for
the determination of who was a depend ant at the time of death of the deceased , as
confirmed by the Constitutional Court in Mutsila,17 where the court found that a
dependant’s status is fixed at the time of death of the member.
[35] The restrictive interpretation to the period of 12 months advanced by the Fund
leads to absurdity, as it strips the beneficiaries of the protection accorded to them by
the Act. Many beneficiaries are unsophisticated people who live in rural areas and
have no idea that such a benefit exists. In general, it takes the intervention of a third
party for them to become aware of the existence of such benefits. By then the period
of 12 months may have elapsed.
[36] Payment to the estate can only be made once all the statutory avenues for
tracing and identifying dependants and nominees have been exhausted. Under s
37C(1)(c), if no dependants or nominees are found, the benefit is paid to the estate.
However, the legislature provides a further safeguard: if the estate has not been
15 Mudau v Municipal Employees Pension Fund and Others (Institute for Retirement Funds Africa NPC as Amicus
Curiae) [2023] ZACC 26; 2023 (10) BCLR 1165 (CC); [2023] 11 BLLR 1109 (CC); (2023) 44 ILJ 2641 (CC) .
16Ibid.
17 Op cit fn 9.para 101.
19
reported to the Master (and thus no inventory is received), the funds are paid into
the Guardian’s Fund or the Unclaimed Benefit Fund. This ensures that the benefits
remain protected and regulated even when the formal administration of an estate has
not yet commenced. The Fund’s decision to pay Mrs Viljoen’s benefit to the estate,
was wrong when as a legal dependant, she was available. The Fund should not have
paid the benefit to the Unclaimed Benefit Fund too, as it had been already claimed
by Mrs Viljoen. It was incumbent upon the Fund to investigate whether she was the
sole dependant or if there were other dependants as at the date of death of Mr Viljoen.
The prioritisation of possible estate creditors in the estate of Mr Viljoen , without
first exhausting the statutory enquiry into dependants, was irregular. The decision
was taken despite the fact that no estate had been reported to the Master.
Costs
[37] An award of costs is a matter wholly within the discretion of a trial court, an
appeal court will not generally interfere with a court of first instance’s decision on
costs. In Sublime Technologies (Pty) Ltd v Jonker and Another,18 this Court held that
‘an appeal court will only interfere with discretionary orders granted by a lower court
where it is shown that the lower court had not exercised its discretion judicially , or
that it had been influenced by wrong principles or a misdirection on the facts, or that
it had reached a decision which in the result could not reasonably have been made
by a court properly directing itself to all the relevant facts and principles ’.19 In this
matter, I find that the high court correctly dismissed the application with costs.
18 Sublime Technologies (Pty) Ltd v Jonker and Another [2009] ZASCA 149; 2010 (2) SA 522 (SCA); [2010] 2 All
SA 267 (SCA) para 2.
19 Ibid.
20
[38] Mrs Viljoen is impecunious. The impecunity of Mrs Viljoen is apparent as her
litigation was pursued with the assistance of a pro bono counsel. Mrs Viljoen bona
fide pursued the protection of her constitutional rights in terms of the law, in all the
avenues opened to her . Before this Court, as the respondent, she was still legally
represented by pro bono counsel.
[39] In general, the purpose of an award of costs is to indemnify the successful
litigant for the expenses to which he or she was put through having been unjustly
compelled to initiate or defend the litigation as the case may be, as stated in Texas
Co (SA) Ltd v Cape Town Municipality.20 I must add that the Fund persisted seeking
an order for costs before this Court, in the event that they were successful , despite
the impecunity of Mrs Viljoen . Mrs Viljoen has been successful before the
Adjudicator, the high court and this Court. It was only through defending this matter
that the desired outcome of enforcing her statutory and constitutional rights were
obtained. In awarding Mrs Viljoen costs, I have taken these factors into account.
[40] Though represented by a pro bono counsel, I hold the view that Mrs Viljoen’s
legal representatives should be awarded costs. I recognise that they acted in the
public interest and promoted access to justice. The recovery of costs and
disbursements would encourage her legal team to re -invest into future pro bono
litigation. The complexity and novelty of the issues raised in the matter, which have
led to the appeal before this Court must have been very costly to them. At the same
time, I have considered the conduct of the Fund, wh ich had an opportunity to
investigate and determine the dependants of their deceased member, but failed to do
so. The decision to appeal a decision where there is a pittance of pension benefit
payout was also insensitive. A mere R52 120,53 (before tax). The Fund could have
20 Texas Co (SA) Ltd v Cape Town Municipality 1926 AD 467.
21
used another matter as a test case. In conclusion, I find that the costs should follow
the result.
[41] In support of my findings, I rely on the proposition adopted by the
Constitutional Court in Mudau where it said:
‘We were informed that counsel for Mr Mudau, Mr S Khumalo SC, Mr K Magan, Ms L Mbatha
and Mr B Letuka represented Mr Mudau pro bono. They did so with aplomb and commendable
ability. This act of public service is recognised and acknowledged as an important contribution to
advancing the objective of access to justice for all. Section 92(1) of the Legal Practice Act provides
that, even when legal services are rendered for free, when costs become payable to a litigant, the
award of costs that this court makes in favour of that litigant is deemed to have been ceded to the
legal practitioner. This provision finds application in these proceed ings insofar as it relates to the
costs of counsel and the costs award should therefore include these costs, with the costs of two
counsel being warranted.’21
[42] Accordingly, I make the following order:
The appeal is dismissed with costs , including costs of two c ounsel where so
employed.
_______________________
YT MBATHA
JUDGE OF APPEAL
21 Op cit fn 15 para 78.
22
Appearances:
For appellant: E Fagan SC with E Cohen
Instructed by: Walkers Incorporated, Cape Town
Claude Reid Incorporated, Bloemfontein
For respondent: S Khumalo SC with N Sibanyoni
Instructed by: RW Attorneys, Pretoria
Pieter Skein Attorneys, Bloemfontein.