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[2013] ZACC 4
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Ngewu and Another v Post Office Retirement Fund and Others (CCT 117/11) [2013] ZACC 4; 2013 (4) BCLR 421 (CC) (7 March 2013)
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CONSTITUTIONAL COURT OF SOUTH AFRICA
Case CCT 117/11
[2013] ZACC 4
In the matter between:
PHUMLA RUTH PATRICIA NGEWU
................................................
First
Applicant
WOMEN’S LEGAL CENTRE TRUST
............................................
Second
Applicant
and
POST OFFICE RETIREMENT FUND
..............................................
First
Respondent
MINISTER FOR COMMUNICATIONS
.......................................
Second Respondent
MINISTER FOR FINANCE
..............................................................
Third
Respondent
MINISTER FOR JUSTICE AND
CONSTITUTIONAL DEVELOPMENT
.........................................
Fourth
Respondent
MAWETHU NGEWU
........................................................................
Fifth
Respondent
Heard on : 7 February 2013
Decided on : 7 March 2013
JUDGMENT
VAN DER WESTHUIZEN J (Mogoeng CJ, Moseneke DCJ, Froneman J, Jafta J,
Mhlantla AJ, Nkabinde J, Skweyiya J and Zondo J concurring):
Introduction
[1] This matter concerns the right to equality before the law and
equal protection and benefit of the law, as guaranteed by section
9(1)
1
of the Constitution. It seeks to address the anomaly arising from the
failure to afford divorcees of members of the Post Office
Retirement
Fund (Fund) similar rights and advantages afforded to former spouses
of members of funds subject to the Pension Funds
Act
2
and the Government Employees Pension Law
3
(GEPL). Divorced spouses of members of the pension funds regulated by
these statutes can claim their share of their former spouse’s
pension interest at the time of divorce. This is referred to as the
“clean break” principle. However, divorcees of
members of
the Fund cannot claim the interest that they are entitled to at the
time of divorce.
[2] The applicants are Ms Ngewu and the Women’s Legal Centre
Trust. The first and second respondents, the Post Office Retirement
Fund and the Minister for Communications, participated in the
proceedings before this Court. The third respondent, the Minister
for
Finance, did not make submissions to this Court. The fourth
respondent, the Minister for Justice and Constitutional Development,
did not oppose the relief sought and the fifth respondent, Mr Ngewu,
did not respond to documents served on him.
[3] The applicants and the first and second respondents are in
agreement that the differentiation has no rational basis and is
inconsistent with section 9(1).
[4] The dispute between them revolved around whether proposed
legislative amendments to the
Post Office Act
4
would adequately address the constitutional
deficiency, how long it would take for the amendments to become law
and whether hearing
argument should be postponed in anticipation of
the amendments.
On the morning of the hearing, the parties
settled their disagreement. They jointly presented a draft order to
the Court. The order
now made is based on that agreement.
Background
[5] The first applicant, Ms Ngewu, married the fifth respondent, Mr
Ngewu, in community of property in October 1980. Mr Ngewu was
at all
relevant times employed by the Post Office and a member of the Fund.
When they were divorced on 27 July 2007, Ms Ngewu was
awarded a 50%
share of Mr Ngewu’s pension interest, but she is only entitled
to payment of that share when the benefit accrues
to him. This is
because the Post Office Retirement Fund Rules (Rules of the Fund),
5
read with the Pension Funds Act and the Divorce Act,
6
do not make any provision for a pension benefit in the Fund to be
deemed to accrue on divorce, so that the divorcee’s share
can
be paid on divorce.
[6] In September 2010 Ms Ngewu filed an application in the Western
Cape High Court, Cape Town (High Court). Represented by the
Women’s
Legal Centre, she challenged the constitutional validity of the Rules
of the Fund and the Pension Funds Act, to the
extent that they did
not provide for the Fund to permit divorcees to redeem their pension
interest on the date of the divorce.
Ms Ngewu also sought an order to
have her portion of Mr Ngewu’s pension interest paid to her.
This relief has since been
abandoned. The High Court set the matter
down for the hearing of argument on 1 December 2011.
[7] Ms Ngewu also contacted the Fund and requested that action be
taken to rectify the dubious constitutional position of the Rules
of
the Fund. The Fund contacted the Minister for Communications and
drafted amendments to the Rules of the Fund and suggested appropriate
amendments to the Post Office Act. The amendment process is currently
still underway.
7
[8] During the same period, the High Court granted an order declaring
the GEPL inconsistent with the Constitution and invalid in
Wiese v
Government Employees Pension Fund and Others
.
8
This is because that statute, similar to the Rules of the Fund at
issue in this application, did not afford a former spouse of
a member
of the Government Employees Pension Fund the same rights, concerning
the division of pension benefits upon divorce, afforded
to former
spouses of members of funds subject to the Pension Funds Act.
[9]
Wiese
came before this Court for confirmation of the
High Court’s order. Ms Ngewu brought an application for direct
access to this
Court, requesting that her application be heard
together with
Wiese
. Her application before the High Court was
therefore postponed indefinitely (
sine die
) on 30 November
2011. Because in both Ms Ngewu’s case and
Wiese
separate pension provisions were challenged on identical
constitutional grounds, the two cases were set down to be heard on 28
February
2012.
[10] However, prior to the scheduled hearing, the offending
provisions of the GEPL in
Wiese
were amended by Parliament to
incorporate the “clean break” principle and thus resolved
the constitutional defect.
On 30 March 2012 this Court held
unanimously that the constitutional issue was moot as the offending
provisions had been amended.
9
[11] As to Ms Ngewu’s application, in January 2012 the Fund
sought postponement for 12 months to enable Parliament to amend
the
Post Office Act to incorporate the “clean break”
principle. According to the Fund, 12 months was a reasonable estimate
of the time period necessary for the legislative process to run its
course. The applicants did not oppose the request. The Court
thus
postponed the hearing to 7 February 2013.
[12] Closer to the hearing, the Court directed the parties to make
further written submissions on the sufficiency of efforts undertaken
by the government to cure the apparent constitutional defect,
including submissions on the amendment process. The respondents
indicated that the legislative process was still underway and that
the amendment would be finalised within six months. In view of
that
estimate, the respondents requested a postponement of eight months to
allow for unforeseen delays.
[13] The applicants opposed any postponement and sought to proceed
with the hearing on 7 February 2013. More notably, the applicants
took the position for the first time that the proposed legislative
amendment would not, if enacted, cure the constitutional defect
at
issue.
[14] In submissions received just days before the hearing, the
applicants argued that the proposed amendment does not in fact
incorporate the “clean break” principle. This failure,
the applicants posited, meant that the legislative process underway
for more than 12 months would not cure the constitutional defect that
prevents Ms Ngewu and others in her situation from receiving
their
pension interest upon divorce. Given that the proposed legislative
solution was no longer satisfactory, the applicants indicated
that
they would now ask the Court to incorporate the “clean break”
principle by way of a reading-in remedy.
[15] At the hearing, the legal representatives of the parties
indicated that they were able to reach an agreement and submitted
a
proposed order to the Court. This order included a suspended
declaration of invalidity of the omission of the “clean break”
principle from the Post Office Act. In addition, an extensive
reading-in of section 24A of the GEPL embodying the “clean
break” principle into the Post Office Act was proposed. The
reading-in would be triggered only if, after eight months, the
Legislature failed to amend the Post Office Act to remedy the defect.
Conclusion
[16] It is appreciated that the parties have settled the dispute
between them. But this Court is of course not bound by an agreement
between parties. It remains the responsibility of the Court to be
satisfied that legislation is indeed inconsistent with the
Constitution
and thus invalid, before declaring it so and that the
remedy proposed is in accordance with the Court’s
constitutional mandate
and established jurisprudence.
[17] Sections 10 to 10E of the Post Office Act, the relevant
provisions dealing with the administrative and financial matters of
the Fund, are clearly unconstitutional. Because of the omission of
the “clean break” principle there is a differentiation
between the payment of divorced spouses’ interests regulated by
the Pension Funds Act and the Government Employees Pension
Law
Amendment Act on one hand, and the payment of divorced spouses’
interest governed by the Post Office Act on the other.
The
differentiation is irrational as it has no basis. It does not meet
the requirement of equality before the law and equal protection
and
benefit of the law contained in section 9(1) of the Constitution.
10
The respondents furthermore did not submit that the legislation
contains a reasonable and justifiable limitation
11
of the right protected in section 9(1) and could hardly do so.
Therefore, the omission of the “clean break” principle
from sections 10 to 10E of the Post Office Act renders those
provisions invalid to the extent of this inequality.
[18] The declaration of invalidity is suspended for eight months for
the Legislature to cure the defect. If the unconstitutionality
is not
remedied within this period, the provision in the order of this Court
as stated below will be read into the Post Office
Act. Parliament and
the Executive should carefully consider the consequences of failing
to remedy this constitutional defect, especially
how the rather
extensive reading-in will affect the structure and application of the
relevant legislation. This must be done, even
though counsel for the
respondents – when prompted by the Chief Justice during the
presentation of oral submissions –
gave the assurance that his
clients were comfortable with the reading-in as well as the period of
suspension.
12
[19] The applicants applied for condonation for the late filing of
the record. The application was not opposed. The delay was adequately
explained. No prejudice was suffered. Condonation should be granted.
[20] The direct access application and the relief sought, and agreed
to by the parties, should be granted.
[21] The following order is made:
Condonation
for the late filing of the record is granted.
The
application for direct access is granted.
The
omission from sections 10 to 10E of the Post Office Act 44 of 1958
of a provision for the former spouse of a member of the
Post Office
Retirement Fund, who has been awarded a portion of that member’s
pension interest in that Fund, pursuant to
section 7(8)
of the
Divorce Act 70 of 1979
, to be paid that portion on divorce or
dissolution of customary marriage (the “clean break”
principle), is declared
to be inconsistent with section 9(1) of the
Constitution and therefore sections 10 to 10E of the Post Office Act
44 of 1958 are
invalid to the extent of the inconsistency.
The
declaration of invalidity is suspended for eight months to enable
Parliament to cure the defect.
If the constitutional defect is not remedied by 7 November 2013,
section 24A of the Government Employees Pension Law, Proclamation
21
of 1996, shall be read into the Post Office Act 44 of 1958 as
section 10F thereof and will take effect. The wording to be
read in
as section 10F is annexed to this order, as “A”.
The
second respondent is ordered to pay the applicants’ costs in
this Court.
ANNEXURE
“A”
10F Payment of pension interest upon divorce or dissolution of
customary marriage
(1) The Board shall direct
the Fund to reduce a member’s pension interest by any amount
assigned from the member’s pension
interest to the member’s
former spouse in terms of a decree of divorce granted under
section
7(8)(a)
of the
Divorce Act, 1979 (Act No. 70 of 1979), or a decree for the
dissolution of a customary marriage.
(2) (a) Subject to paragraph
(j), for purposes of section
7(8)(a) of the Divorce Act, 1979 (Act
No. 70 of 1979), the portion of
a member’s pension interest
assigned to the member’s former spouse in terms of a decree of
divorce or a decree for
the dissolution of a customary marriage is
deemed to accrue to the member on the date on which the decree of
divorce or the decree
for the dissolution of a customary marriage is
granted.
(b) The amount of the member’s pension interest in the Fund
shall be determined and the amount of the member’s pension
interest that is assigned to the former spouse shall be calculated by
the Fund in accordance with the rules as at the date of the
decree of
divorce or the decree for the dissolution of a customary marriage.
(c) Prior to determining the
amount of the member’s pension interest that is assigned to the
former spouse, the amount of
the member’s pension interest
referred to in paragraph
(b) shall first be reduced in accordance with the rules by any
amount
of the member’s pension interest which, in a previous
divorce or a previous dissolution of a customary marriage, was paid
over or awarded to another party.
(d) The amount of any pension benefit that is subsequently payable to
the member in terms of the rules will be reduced by the equivalent
of
the amount of the share of the pension interest of the member which—
(i) was deemed to accrue to the member as a benefit in advance of the
benefit ordinarily payable in terms of the rules; and
(ii) was assigned to the
member’s former spouse, less the amount of any additional
voluntary contributions, if any, paid by
the member to the Fund from
time to time, and accumulated over the period from the date on which
payment to the former spouse or
transfer to the approved fund as
referred to in paragraph
(e) took place to the date on which the member first became
entitled
to a part or the whole of the balance of the benefit, with
interest as the Board from time to time deems appropriate.
(e) The Fund shall, within 45 days of the submission of the court
order by the former spouse of a member, request the former spouse
to
elect whether the amount to be deducted must be—
(i) paid directly to the former spouse; or
(ii) transferred to an approved retirement fund on behalf of the
former spouse.
(f) The former spouse shall, within 120 days of being requested to
make a choice—
(i) inform the Fund of the
manner in which the amount referred to in paragraph
(e) must be dealt with; and
(ii) if the former spouse chooses that the amount must be paid to the
former spouse directly, provide the Fund with the details
that are
necessary to effect the payment; or
(iii) if the former spouse chooses that the amount must be
transferred to an approved pension fund on his or her behalf, provide
the Fund with the details of that approved retirement fund.
(g) The Fund shall pay or transfer the amount within 60 days of being
informed of the manner in which the amount shall be dealt
with in
accordance with the former spouse’s choice.
(h) In the event that the former spouse fails to make a choice or
identify the approved retirement fund to which the amount should
be
transferred within the period referred to in paragraph (f), the Fund
shall pay the amount directly to the former spouse within
30 days of
the expiry of that period.
(i) Despite paragraph
(h), in the event that the Fund cannot reasonably ascertain the
manner in which the payment to the former
spouse shall be effected,
the Fund shall retain the amount plus interest as determined by the
Board in the Fund, until such time
as details of the manner in which
that payment shall be effected is made available to the Fund by the
member, the former spouse
or any other person whom the Fund is
satisfied has the necessary authority and capacity to instruct the
Fund in that respect.
(j) Any portion of a
member’s pension interest assigned to a former spouse in terms
of a decree of divorce or a decree for
the dissolution of a customary
marriage granted prior to the enactment of this subsection shall, for
purposes of any law other
than the Income Tax Act, 1962 (Act
No. 58 of 1962), including, but not limited to, section
7(8)(a) of the Divorce Act, 1979 (Act
No. 70 of 1979), be deemed to have accrued to the member on the
date of enactment of this subsection, and must be paid or transferred
in accordance with
paragraphs
(a)
to (i).
For the
Applicants: Advocate I Goodman instructed by the Women’s Legal
Centre.
For the
First and Second Respondents: Advocate P J Pretorius SC and Advocate
S Yacoob instructed by Dunster & Associates and
the State
Attorney.
1
Section
9(1) states: “Everyone is equal before the law and has the
right to equal protection and benefit of the law.”
2
24
of 1956.
3
Proclamation
21 of 1996, as recently amended by the
Government Employees Pension
Law Amendment Act 19 of 2011
.
4
44
of 1958
.
5
Government
Notice 1107 in
Government Gazette
28228 of 2005.
6
70
of 1979.
7
The
Minister communicated these proposed amendments to the Deputy
President, who as the Leader of Government Business proposes
amendments to Parliament. The amendments, as the South African Post
Office SOC Ltd Amendment Bill (Bill), were placed on the
2012
Legislative Programme. The Bill was to be submitted to Cabinet on 13
June 2012 and to Parliament in the fourth quarter of
2012. However,
the Bill was only published for comment on 31 October 2012, the
closing date for comments being 12 December 2012.
8
[2011]
4 All SA 280
(WCC) at para 45.
9
Wiese
v Government Employees Pension Fund and Others
[2012] ZACC 5
;
2012 (6) BCLR 599
(CC). Only an order as to costs was made.
10
See
Harksen v Lane NO and Others
[1997] ZACC 12
;
1998 (1) SA 300
(CC);
1997 (11) BCLR 1489
(CC) at para 42 and
Prinsloo v Van der
Linde and Another
[1997] ZACC 5
;
1997 (3) SA 1012
(CC);
1997 (6)
BCLR 759
(CC) at paras 25-6. These cases were decided under
section
8(1)
of the interim Constitution which is substantially similar to
section 9(1) of the Constitution.
11
Section
36(1) provides for the limitation of rights and states:
“
The rights in the Bill of
Rights may be limited only in terms of law of general application to
the extent that the limitation
is reasonable and justifiable in an
open and democratic society based on human dignity, equality and
freedom, taking into account
all relevant factors, including—
(a) the nature of the right;
(b) the importance of the purpose of the limitation;
(c) the nature and extent of the limitation;
(d) the relation between the limitation and its
purpose; and
(e)
less restrictive means to achieve the purpose.”
12
This
Court has read in language to cure constitutional defects in
legislation on several occasions. See for example
Minister of
Home Affairs and Another v Fourie and Another (Doctors for Life
International and Others,
Amici Curiae
); Lesbian and Gay
Equality Project and Others v Minister of Home Affairs and Others
[2005] ZACC 19
;
2006 (1) SA 524
(CC);
2006 (3) BCLR 355
(CC) and
Lawyers for Human Rights and Another v Minister of Home Affairs
and Another
[2004] ZACC 12
;
2004 (4) SA 125
(CC);
2004 (7) BCLR
775
(CC).