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[2018] ZACC 10
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Pretorius and Another v Transport Pension Fund and Another (CCT95/17) [2018] ZACC 10; [2018] 7 BLLR 633 (CC); 2018 (7) BCLR 838 (CC); (2018) 39 ILJ 1937 (CC); 2019 (2) SA 37 (CC) (25 April 2018)

Links to summary

Heads of arguments

CONSTITUTIONAL
COURT OF SOUTH AFRICA
Case CCT
95/17
In the matter
between:
JOHAN PIETER
PRETORIUS
First

Applicant
MONTANA DAVID
KWAPA
Second

Applicant
and
TRANSPORT PENSION
FUND
First

Respondent
TRANSNET SECOND
DEFINED BENEFIT FUND
Second

Respondent
TRANSNET
LIMITED
Third

Respondent
Neutral citation:
Pretorius and another v Transport Pension Fund and others
2018
ZACC 10
Coram:
Zondo
DCJ, Cameron J, Froneman J, Jafta J, Kathree Setiloane AJ,
Kollapen AJ, Madlanga J, Mhlantla J, Theron J and
Zondi AJ
Judgments:
Froneman J (unanimous)
Heard on:
16
November 2017
Decided on:
25 April 2018
Summary:
Exceptions — pension funds— pension benefits —
class action
ORDER
It is ordered that:
1. The applicants
are granted leave to appeal.
2. The appeal is
upheld with costs, including the costs of two counsel.
3. The High Court’s
main orders in paragraph 54.1 are replaced with the following:
“The defendants’ exceptions are dismissed with costs
including the costs of two counsel.”
4. The High Court’s
order for costs in the applicants’ application for leave to
appeal to the Supreme Court of Appeal
is replaced with an order that
the costs of the application, including the costs of two counsel, be
costs in the appeal to this
Court.
5. The applications
for leave to cross-appeal are dismissed with costs, including the
costs of two counsel.
JUDGMENT
FRONEMAN J (Zondo
DCJ, Cameron J, Jafta J, Kathree Setiloane AJ, Kollapen AJ,
Madlanga J, Mhlantla J, Theron J and
Zondi AJ concurring):
Introduction
[1]
This matter concerns the material livelihood of pensioners who
were employed by successive incarnations of the transport enterprise

operated by the state.  Its origin lies in a promise made to
them in 1989 that they would receive the same pension benefits
under
a commercial entity, Transnet,
[1]
as they did under the statutory state institution that employed them
until then, namely the South African Transport Services (SATS)
and
its two pension funds (old pension funds).  This promise was
kept after the transfer to Transnet in April 1990, but after
2003 it
was discontinued.
[2]
The applicants instituted a class action against Transnet and
its current pension funds (new pension funds)
[2]
in the High Court.  The first claim (1989 promise) was based on
a promise made in 1989 and formulated in the particulars of
claim as
enforceable either in contract, or as an enforceable state promise,
or as an unfair labour practice under the Constitution.
The
second claim (legacy debt) was based on the ground that Transnet was
obliged to take over its predecessors’ obligation
to maintain
the old pension funds in a sound financial position.  The amount
necessary to fulfil that obligation was duly
determined.  Despite
the determination of the amount to be paid in that regard, Transnet
has failed to pay it over to the
new pension funds.  The third
and last claim (unlawful donation) is said to flow from an unlawful
donation made by one of
the new pension funds to Transnet that needs
to be paid back.
[3]
The respondents filed exceptions to all three claims on
various grounds.  The High Court upheld three exceptions to
the
1989 promise claim, but dismissed all of the others.
[3]
Leave to appeal to the Supreme Court of Appeal was refused.
The applicants seek leave to appeal to this Court against
the
upholding of the three exceptions relating to the 1989 promise.  The
respondents seek conditional leave to cross appeal
against the
dismissal of some of the other exceptions.
[4]
I will deal with the application for leave to appeal against
the upholding of the exceptions to the 1989 promise first, before
turning
to the application for leave to cross appeal against the
dismissal of the other exceptions.
The 1989 promise
[5]
The background facts pleaded in the particulars of claim show
that the transport enterprise of the state successively vested in the

South African Railways and Harbours Administration (SAR&H),
[4]
SATS,
[5]
and, since 1990, in Transnet.
[6]
Transnet inherited two defined pension funds, divided on racial
lines, from SAR&H.  The Transport Fund is a merger
of these
old pension funds.  It inherited all of the old pension funds’
assets, liabilities, rights and obligations.
The Second Fund is
a new defined benefit fund established in November 2000 to house all
of the pensioner-members of the Transport Fund
at that date.  It
inherited all of the assets, liabilities, rights and obligations
relating to these pensioner-members of
the first respondent.
[6]
The rules of the old pension funds entitled their members to
increases of their pensions of at least 2% per year.  These
funds,
with the concurrence of SAR&H and SATS, followed a
consistent practice, over decades, of granting pension increases of
at least
70% of the annual rate of inflation.
[7]
In the run-up to the establishment of Transnet, SATS and the
old pension funds made a promise to all its employees and members
that
the funds would continue to increase their pensions as before.
The promise was made orally by the general manager of SATS
and
chair of the boards of the old pension funds, as well as by the
Minister of Transport at meetings throughout the
country
with some 80000 employees in May and June 1989.  The promise was
repeated in writing in a SATS brochure, distributed
to all SATS
employees and pensioners later in 1989.
[8]
The promise was one of the means by which SATS persuaded its
employees to remain in its employ after SATS’s conversion to
Transnet.  Transnet and the new pension funds kept the promise
until 2002 by granting annual pension increases of about 80%,
on
average, of the rate of inflation.  Since then, they have broken
the promise in that they have consistently failed to grant
any
pension increases beyond the minimum of 2% per year.
[9]
The applicants pleaded that the failure to keep the promise
was unlawful on three grounds: breach of contract, unlawful state
action
and an unfair labour practice.  Exception was taken to
the first as being vague and embarrassing and to the other two as
disclosing
no cause of action and being bad in law.
[10]
In the High Court, Legodi J upheld the exception to the
contractual claim as vague and embarrassing because it did not
contain sufficient
particularity regarding: who would decide the rate
of the pension increase; when the decision would be made and
implemented; who
would benefit from the promise; the period that the
promise would endure; and, if the promise was in perpetuity, whether
it was
capable of termination.  With regard to the unlawful
state action claim, he held that the state action complained of could

only be administrative action and should thus have been challenged
under the provisions of the Promotion of Administrative Justice

Act
[7]
(PAJA).  The exception to the unfair labour practice claim was
upheld on the ground that the particulars of claim failed to
aver the
existence of a labour relationship between the applicants and the
respondents.
[11]
Applications seeking leave to appeal to the Supreme Court of
Appeal failed in the High Court and in the Supreme Court of Appeal.
A constitutional
matter?
[12]
Whether the 1989 promise binds current state successors is a
constitutional matter because it concerns the exercise of public
power
and its appropriate use.  There was no dispute that the
unlawful state action and unfair labour practice claims raised
constitutional
matters within this Court’s jurisdiction, but it
was contended that the contractual claim did not.  This approach
is
not correct.
[13]
The underlying facts for the contractual claim are the same as
that of the other two claims, namely the 1989 promise by state
functionaries
that existing pension benefits will remain the same.
All that is added is the allegation that this amounted to a
valid offer
accepted by the beneficiaries.  The formation,
implementation and possible termination of the contract all involve
contested
legal issues relating to whether the state had the legal
competence to conclude, implement or terminate the contract and, if
so,
whether the exercise of those competencies amounted the use of
public or private power.  Those issues all involve
constitutional
matters.
[8]
This Court’s jurisprudence shows that the attempted
compartmentalisation of public and private power in contractual

relations involving the state is one that should not generally be
countenanced.
[9]
This court has jurisdiction.
Leave to appeal
[14]
It is in the interests of justice to grant leave to appeal.
The upholding of the exceptions is final and dispositive of
discrete
and important legal issues.
[10]
It is not only in the parties’ interests that this Court
determines them, but also in the broader national interest.

And, as we will see, there are reasonable prospects of success as
well.
Merits
[15]
In deciding an exception a court must accept all allegations
of fact made in the particulars of claim as true; may not have regard

to any other extraneous facts or documents; and may uphold the
exception to the pleading only when the excipient has satisfied
the
court that the cause of action or conclusion of law in the pleading
cannot be supported on every interpretation that can be
put on the
facts.
[11]
The purpose of an exception is to protect litigants against claims
that are bad in law or against an embarrassment which
is so serious
as to merit the costs even of an exception.
[12]
It is a useful procedural tool to weed out bad claims at an early
stage, but an overly technical approach must be avoided.
[13]
Breach of
contract
[16]
In their particulars of claim the applicants pleaded that the
1989 promise was made orally by the general manager of SATS, who was

also the chairperson of the old pension funds, and the Minister of
Transport at meetings throughout the country with some 80 000

SATS employees in May and June 1989.  The promise was repeated
in writing in a SATS brochure distributed to all SATS employees
and
pensioners later in 1989.
[17]
The material terms of the contract pleaded was that in the
run-up to the establishment of Transnet, SATS and the old pension
funds
made a promise to all of their employees and members that the
funds would continue to increase their pensions as before.  The

rules of the old pension funds entitled their members to increases of
their pensions by at least 2% per year.  These funds,
with the
concurrence of SAR&H and SATS, followed a consistent practice,
over decades, of granting higher pension increases
of at least 70% of
the annual rate of inflation.
[18]
The promise was pleaded as “an offer to contract duly
made by and on behalf of SATS, the [old pension funds]”, which

was “tacitly accepted . . . by [the] remaining employees and
pensioners of SATS, [and] the [old pension funds] without demur”.

SATS and the old pension funds “were thus contractually bound
to keep the promise” and “Transnet, the Transport
Fund
and the Second Fund inherited the contractual duty to keep the
promise”.  The failure to keep the promise after
2002 was
“thus in breach of contract”.
[19]
The pleaded contract is simple and straightforward, but its
simplicity is elegant, rather than vague.  The terms of the
contract
are expressly and clearly set out and so are the parties
bound by those terms.  There is nothing vague and embarrassing
that
prevents the respondents from knowing what case they have to
meet.
[20]
The respondents also seek leave to cross-appeal against the
dismissal of some of the other grounds of exception in relation to
the
contract based on the 1989 promise.  The cross-appeal
may not have been necessary to support an order in their favour
on
appeal,
[14]
but in the end it makes no material difference by which route it is
before us.
[21]
The dismissal of an exception is not usually finally
dispositive of the legal issue at stake, unlike the upholding of an
exception
on the basis that the claim is bad in law.
[15]
This applies to the exceptions raised against the contractual
claim based on the legislative regime and Transport Fund rules.
In
essence the respondents contend that their predecessors either did
not have the capacity to enter into a contract on the
basis of the
1989 promise or that, in any event, they are lawfully precluded from
implementing that promise.  There is precedent
that for the
purposes of deciding an exception contractual capacity is assumed
[16]
and that reference to rules that do not form part of the particulars
of claim offends against the principle that exceptions must
not be
decided on information or facts extraneous to those pleaded.
[17]
[22]
Dismissal of the exception on these grounds does not deprive
the respondents of the opportunity to raise them as substantive
defences
in their respective pleas and for their merits to be
determined after the leading of evidence at the trial.  That is
probably,
in any event, a better way to determine the potentially
complex factual and legal issues involved.
[18]
[23]
The appeal against the upholding of the exception against the
contractual claim based on the 1989 promise must thus succeed.
Unlawful state
action
[24]
For their unlawful state action claim in relation to the 1989
promise the applicants rely on this Court’s decision in
KZN
as its legal foundation.  They contend that the principle
recognised in that case is that a promise by the state to make a
payment is enforceable against the state when it would be legally and
constitutionally unconscionable for the state to renege on
that
promise.
[25]
In
KZN
the provincial department of education had
issued a written notice to independent schools in September 2008
setting out a table
of approximate subsidy funding for these schools
under the South African Schools Act.
[19]
The first payment was promised for April 2009 but was not paid.
In May 2009 the department issued a further circular
announcing
that it had decided to reduce the subsidies with retrospective
effect.  The schools instituted legal proceedings
to enforce
payment of the promised subsidies for the whole year.  Their
efforts were unsuccessful until they eventually obtained
partial
relief in this Court.
[26]
In a majority judgment, Cameron J held that the retroactive
retraction or reduction of the April payment was unlawful.  He
held that the reduction in May, a month after the April payment was
due, was legally and constitutionally unconscionable when measured

against public law standards of reliance, accountability and
rationality.
[20]
The applicants rely on this as establishing a general
principle, not restricted to the facts of
KZN
.
[27]
The features that they emphasise in their particulars of claim
as establishing this unconscionableness include the fact that the

promise was made to persuade SATS’s employees to remain in its
employ after its conversion to Transnet; that this was done
by
expressly promising that pensioners “need not worry”;
that “the conversion will have no influence on pensioners;
that
‘in addition to the usual annual increase of 2% in pensions,
the Transport Services [would], as in the past, continue
to grant
higher increases to enable them to counter the effects of inflation”;
and that Transnet and the new pension funds
kept the promise until
2002, which no doubt reinforced the assurance of their predecessors
that they could be trusted to keep their
promise.
[28]
The making of the promise and its implementation for more than
a decade created the legitimate expectation for the affected
employees
that the promise would be kept; they organised their lives
and arranged their affairs on the assumption that the promise would
be kept; and, as a result of the failure to do so, they “have
suffered untold hardship”.
[29]
The High Court upheld the exception to the unlawful state
action ground in relation to the 1989 promise.  It held that the
claim was founded on administrative action by an organ of state, but
no entitlement to protection under PAJA was pleaded.  It
found
support for this in a passage in the
KZN
majority
judgment.
[21]
It concluded that the applicants were attempting to circumvent
the provisions of PAJA, which they may not do.
[22]
[30]
The applicants contend that the High Court’s approach is
based on a misunderstanding of the majority judgment in
KZN
and the nature of their claim.  The principle established in
KZN
is not based on a breach of the right to just administrative action
in terms of section 33 of the Constitution read with PAJA,
but on far
more fundamental misconduct by the state.  That conduct is
unconscionable when measured against the constitutional
standards of
reliance, accountability and rationality.  On the pleaded facts
the requirements of reliance, accountability
and rationality were not
met.  This conclusion is buttressed by the fundamental right to
social security under the Constitution,
[23]
the reasonable pension benefit expectations of pensioners recognised
under statute,
[24]
comparative law, and the doctrine of substantive legitimate
expectation.  This claim stands independent of a claim to
administrative
justice under PAJA.
[31]
The respondents’ counter that
KZN
cannot assist
the applicants.  In
KZN
the promise to pay was sourced in
legislation, which is absent here.  So too, there is no
reduction of pensions that were
already due.  To enforce the
1989 promise would contravene the current legislative scheme for
pension payments.  The
fundamental right to social security has
not been implicated.  Reasonable statutory pension benefit
expectations are irrelevant
because the relevant legislation does not
apply.  And our law does not recognise the doctrine of
substantive, as opposed to
procedural, legitimate expectation.
[32]
From this it appears that a resolution of the appeal against
the upholding of the exception in the High Court depends on a number

of cascading questions:
(a) Are claims against the state cognisable outside PAJA even if the
conduct complained of is administrative action within PAJA?
(b) If so, what are the parameters of these claims, independent and
separate from claims under PAJA?
(c) Does the applicants’ unlawful state action claim pass
muster in accordance with (a) and (b)?
(d) Does the exception procedure have any specific relevance to how
the assessment in relation to (a), (b) and (c) should be made?
Administrative
action outside PAJA?
[33]
In
KZN
it was stated that, “if enforcement is
sought on the basis of administrative action, the proceedings should
have been brought
under [PAJA]”
[25]
and that it was not possible to consider the claim on the basis of a
breach of the right to just administrative action.
[26]
Nevertheless, Cameron J stated that—
“the setting in which the 2008 notice promised a payment to its
recipients indicates that it was seriously given, in the
expectation
that it would be relied upon, and that the payment in its terms would
indeed be forthcoming, subject only to the possibility
of due
revocation.”
[27]
[34]
These indications included the learners’ right to basic
education,
[28]
the competence of the Minister to determine norms and minimum
standards for granting subsidies to independent schools and the
Member of Executive Council’s (MEC) competence to pay subsidies
from the funds so appropriated by the provincial legislature.
[29]
This meant that the payment of subsidies was “plainly
acting in accordance with [the state’s] duty under the

Constitution in fulfilling the right to a basic education of the
learners . . . that benefit from the subsidy”.
[30]
Although the subsidy could be revoked, it could not be
retroactively revoked in respect of the April subsidy because the

date on which the unilateral obligation undertaken by the state
became due had already passed.
[31]
[35]
Because
KZN
was not argued under PAJA it was not
necessary to determine whether the decision to reduce the subsidy
satisfied all the elements
of the definition of administrative action
under PAJA.  As Professor Cora Hoexter points out, however, the
reduction decision
seems easily to fulfil those requirements.
[32]
This Court’s decisions in
Premier, Mpumalanga
[33]
and
MEC, Education and Training, Eastern Cape
[34]
would also lend support to that conclusion.  Professor Hoexter
is critical of this development:
“It is a pity that this case was not argued under the PAJA, for
it could easily have inspired significant developments under
that
statute: the introduction of substantive enforcement of legitimate
expectations, or at the very least a reconsideration of
the law
relating to fettering, and perhaps the application of estoppel
against administrators. . . .  But as things are, the
majority
judgment effectively adds to the possibilities of enforcing just
administrative action without recourse to regular administrative
law,
and it adds to the advantages of avoiding PAJA in favour of more
general and more abstract constitutional principle.”
[35]
[36]
Before us no one argued that
KZN
was wrongly decided.
It is authority for the proposition that a separate claim may
lie, based on the same conduct, even though
that conduct might also
amount to administrative action under PAJA.  The reason for
upholding the exception in the High Court
thus cannot stand.  Finding
that the conduct relied upon could also be administrative action
under PAJA is not dispositive
of the issue.  One needs to go
further and determine whether the pleaded claim outside PAJA in its
own terms truly falls outside
PAJA’s reach.
Claims not
falling within PAJA
[37]
KZN
is not the only instance where claims outside PAJA
have been recognised by this Court.  PAJA’s “current
main competitor
is the constitutional principle of legality”.
[36]
Commentators have been critical of this development on the
grounds that its application is sometimes inconsistent;
[37]
leads to a blurring of the requirements of rationality and
reasonableness;
[38]
undermines the doctrine of subsidiarity;
[39]
and promotes the avoidance of PAJA.
[40]
These criticisms also need to be considered carefully where the
constitutional principles are not couched in direct terms
of
legality, but of unconscionable conduct when measured against the
constitutional principles of reliance, accountability and
rationality
as was done in
KZN
.
[38]
It is important to remember that in
KZN
the
counterpoint made by Profesor Hoexter – that
PAJA was as good a candidate within which the law could have
been
developed to assist the learners – was not raised by the
parties.  Nor did the respondent MEC raise the argument
that the
time limits under PAJA were being circumvented.  The underlying
constitutional principles of reliance, accountability
and rationality
were sourced in the context of the state’s duty under the
Constitution to fulfil the right to a basic education
of the learners
that benefitted from the subsidy,
[41]
not primarily in any administrative law principle codified in
PAJA.
[42]
[39]
Similarly, here, the facts pleaded and arguments raised are,
on their face at least, not based on administrative justice, but on

the asserted application of the
KZN
constitutional principle
of unconscionable state conduct that is in breach of reliance,
accountability and rationality.  The
pleaded factual context of
the 1989 promise being made with obvious intent to make good on it in
order to facilitate the transfer
of the state’s transport
enterprise to a commercial entity; the legal support of that being
sought in the constitutional
right to social security and special
legislative protection of pensioners; and the assertion of
substantive legitimate expectations,
do not on their own show the
inevitability of the application of PAJA.
[40]
That does not mean that the door is closed to Transnet and the
new pension funds to raise defences that show that the application
of
the
KZN
principle in this case would give the applicants an
unfair advantage because applicable PAJA provisions are being
circumvented.
[43]
At this stage of the proceedings all it means is that the
potential unfair advantages do not jump in one’s face from
the
particulars of claim.
Is the
applicants’ unlawful state action claim legitimately outside
PAJA?
[41]
The last sentence of the previous paragraph already gives the
answer.  Yes it is.
[42]
The respondents’ arguments that
KZN
does not
apply here may eventually be found to have merit, but they run into
the obstacle that exception proceedings are inappropriate
to decide
the complex factual and legal issues raised by these objections.
Development of
the law on exception
[43]
In their written submissions, the applicants readily conceded
that the “contours and scope” of the
KZN
principle
“have not yet been fully developed”.  This Court has
recently declined to decide on the development of
the common law
where all the factual issues were not raised in the papers before us
and where the legal issues are complex.
[44]
[44]
Some of the arguments made against the applicability of the
KZN
principle are similar to those rejected earlier in
relation to the breach of contract claim.  The alleged absence
of legislative
authority to make the promise and the alleged
contravention of the current legislative scheme relate to matters of
capacity that
lie outside the material pleaded in the particulars of
claim and may be pleaded as substantive defences.  The legal
issues
surrounding fundamental social security rights, pensioner
expectations and substantive legitimate expectation and their effect
on the principles of reliance, accountability and rationality are
complex.  To decide the possible unconscionableness of state

conduct, it will be better to get the full story thrashed out at a
trial.
[45]
[45]
The appeal against the upholding of the exception against the
unlawful state action claim must thus also succeed.
The unfair labour
practice claim
[46]
The third cause of action pleaded as flowing from the 1989
promise was that the failure to pay constituted an unfair labour
practice
in breach of section 23(1) of the Constitution.
[46]
The High Court upheld the exception to this leg of the
respondents application on the ground that it must be pleaded that

there was and is an employer employee relationship between the
applicants and the respondents and that they failed to do so.
[47]
[47]
That appears to be unnecessarily restrictive.  The
section refers to “everyone” having the right and its
purpose
is to protect persons from unfair labour practices that
originated in an employer-employee relationship.  Labour law
jurisprudence
under the Labour Relations Act
[48]
(LRA) recognises that unfair labour practices under the Act may
extend beyond the termination of employment.
[48]
Contemporary labour trends highlight the need to take a broad
view of fair labour practice rights in section 23(1).  Fewer and

fewer people are in formal employment; fewer of those in formal
employment have union backing and protection.  More and more

people find themselves in the “twilight zone” of
employment as supposed “independent contractors” in
time-based
employment subject to faceless multinational companies who
may operate from a web presence.
[49]
In short, the LRA tabulated the fair labour practice rights of
only those enjoying the benefit of
formal employment
–
but not otherwise.  Though the facts of this case do not involve
these considerations, they provide a compelling basis
not to restrict
the protection of section 23 to only those who have contracts of
employment.
[49]
Two other objections against this part of the claim were
raised in argument.  The one was that direct reliance on the
Constitution
rather than on the provisions of the LRA relating to
unfair labour practices undermined the principle of subsidiarity.
The
other was that the new pension funds never employed any of
the applicants.
[50]
The application of the principle of subsidiarity in relation
to the LRA and other labour legislation is complex.  The
Constitution
in some instances, like with the rights of access to
information
[50]
and just administrative action
[51]
require national legislation to give effect to these rights.  The
same requirement is not made in section 23.  The LRA
itself,
however, sets that as one of its objects.
[52]
Nevertheless there are other pieces of labour legislation that
also cover aspects of potential unfair labour practices.
[53]
[51]
The principle of subsidiarity was recently considered by this
Court in
My Vote Counts
.
[54]
Neither the majority nor minority judgments in that case are
directly on point because the issue involved a provision of
the
Constitution that required Parliament to act.  Section 23(1)
lacks that requirement.  A decision by Parliament
not
to
cover the entire field would not fail to fulfil a duty in the
Constitution.  A fair labour practice claimant may be entitled

to rely on the Constitution directly without having to show that the
LRA (or patchwork of other statutes) is deficient.
[52]
The majority judgment in
My Vote Counts
expressly
disavowed that subsidiarity was a hard rule:
“We should not be understood to suggest that the principle of
constitutional subsidiarity applies as a hard and fast rule.
There
are decisions in which this Court has said that the principle may not
apply.  This Court is yet to develop the
principle to a point
where the inner and outer contours of its reach are clearly
delineated.  It is not necessary to do that
in this case.”
[55]
(Footnotes omitted.)
[53]
This indicates that as in
Fetal Assessment Centre
this
is a matter where the “factual situation is complex and the
legal position uncertain”.
[56]
Here there is more than enough legal uncertainty to send the
unfair labour practice claim to trial.
[54]
If it is accepted that in this matter the principle of
subsidiarity does not apply, at least at the exception stage, there
is no
reason to find that a claim against the new pension funds is
facially implausible.  A claim like this, invoking the
fundamental
right to fair labour practices under section 23, has not
been litigated before.  We should not hold – on exception
–
that the constitutional guarantee against unfair labour
practices does not extend to the actions of pension funds taken in
concert
with an employer.
[55]
The appeal against the upholding of the exception to the
unfair labour practice claim must also succeed.
The conditional
cross-appeals
[56]
Dismissal of an exception does not usually involve a final
dispositive pronouncement on a legal issue.
[57]
For that reason, as well as the complexity of the factual and
legal issues surrounding all the claims made in the applicants’

particulars of claim, it is not in the interests of justice to grant
leave to the respondents to cross appeal.  The respondents

may raise the issues in substantive defences to the applicants’
claim for determination at the trial.
Costs
[57]
The High Court dismissed the applicants’ application for
leave to appeal to the Supreme Court of Appeal with costs, including

the costs of two counsel.  In view of the outcome, that will
have to be corrected.  In these proceedings, the applicants

sought a costs order for three counsel.  That is not normal
practice and although the matter is complex and of importance
it is
not so exceptional as to warrant a deviation from the ordinary order
of costs of two counsel to be allowed when such order
is reasonable.
Order
[58]
It is ordered that:
1. The applicants
are granted leave to appeal.
2. The appeal is
upheld with costs, including the costs of two counsel.
3. The High Court’s
main orders in paragraph 54.1 are replaced with the following:
“The defendants’ exceptions are dismissed with costs
including the costs of two counsel.”
4. The High Court’s
order for costs in the applicants’ application for leave to
appeal to the Supreme Court of Appeal
is replaced with an order that
the costs of the application, including the costs of two counsel, be
costs in the appeal to this
Court.
5. The applications
for leave to cross-appeal are dismissed with costs, including the
costs of two counsel.
For the Applicants:
W Trengove SC; J Bleazard and L Zikalala instructed by Geyser &
Coetzee Attorneys.
For the First and
Second Respondents: M Chaskalson SC; A Cockrell SC and N Luthuli
instructed by Edward Nathan Sonnenbergs. Inc.
For the Third
Respondent: C D A Loxton SC and M A Chohan SC instructed by Bowman
Gilfillan.
[1]
Transnet Limited, the third respondent (Transnet).
[2]
The Transport Pension Fund (Transport Fund) and the Transnet Second
Defined Benefit Fund (Second Fund), who are the first and
second
respondents.
[3]
Pretorius v Transport Pension Fund
[2016] ZAGPPHC 352 (High
Court judgment).
[4]
Railway Board Act 73 of 1962.
[5]
South African Transport Services Act 65 of 1981.
[6]
Legal Succession to the South African Transport
Services Act 9 of 1989.
[7]
3 of 2000.  See High Court judgment above n 3 at paras 41-2.
[8]
KwaZulu-Natal Joint Liaison Committee v MEC for Education,
KwaZulu-Natal
[2013] ZACC 10
;
2013 (4) SA 262
(CC);
2013 (6)
BCLR 615
(CC) (
KZN
) at paras 37, 48, 52, 57 and 62-5.
[9]
Joseph v City of Johannesburg
[2009] ZACC 30
;
2010 (4) SA 55
(CC);
2010 (3) BCLR 212
(CC) at paras 22-5 and
Masetlha v
President of the Republic of South Africa
[2007] ZACC 20
;
2008
(1) SA 566
(CC);
2008 (1) BCLR 1
(CC) at paras 63 and 198.
[10]
Compare
Baliso v Firstrand Bank Limited t/a Wesbank
[2016]
ZACC 23
;
2017 (1) SA 292
(CC);
2016 (10) BCLR 1253
(CC) at paras
4-8.
[11]
Member of the Executive Council for Health and Social
Development, Gauteng v DZ obo WZ
[2017] ZACC 37;
2018 (1)
SA 335
(CC);
2017 (12) BCLR 1528
(CC); (
DZ
) at para 29;
H
v Fetal Assessment Centre
[2014] ZACC 34
;
2015 (2) SA 193
(CC);
2015 (5) BCLR 127
(CC) (
Fetal Assessment Centre
) at para 10
and
Wellington Court Shareblock v Johannesburg City Council;
Aghar Properties (Pty) Ltd v Johannesburg City Council
[1995]
ZASCA 74
;
1995 (3) SA 827
(A) (Wellington) at 834.
[12]
Barclays National Bank Ltd. v Thompson
[1988] ZASCA 126
;
1989
(1) SA 547
(A) at 553F-I and
Kahn v Stuart
1942 CPD 386
at
391.
[13]
Telematrix (Pty) Ltd v Advertising Standards Authority SA
[2005] ZASCA 73
;
2006 (1) SA 461
(SCA) at para 3.
[14]
Itzikowitz v Absa Bank Ltd
[2016] ZASCA 43
;
2016 (4) SA 432
(SCA) at paras 21-5.
[15]
See
Fetal Assessment Centre
above n 11 at para 79.  See
also
Maize Board v Tiger Oats Ltd
[2002] ZASCA 74
;
2002 (5)
SA 365
(SCA) at paras 12-4 and
Blaauwbosch Diamonds Ltd v Union
Government (Minister of Finance)
1915 AD 599
at 601 for
dismissal of an exception and compare with upholding an exception
that is bad in law that is finally dispositive of
the legal issue.
[16]
Serobe v Koppies Bantu Community School Board
1958 (2) SA 265
(O) at para 271-2.
[17]
Wellington
above n 11 at 834.
[18]
Compare
Fetal Assessment Centre
above n 11 at paras 11-2.
[19]
84 of 1996.
[20]
KZN
above n 8 at paras 62-3.
[21]
Id at para 31.
[22]
High Court judgment above n 3 at para 38.
[23]
Section 27 of the Constitution reads:
“(1) Everyone has the right to have access to—
. . .
(c) social security, including, if they are unable to support
themselves and their dependants, appropriate social assistance.”
[24]
Preamble of the Transnet Pension Fund Act 62 of 1990; and generally
the Pensions Funds Act 24 of 1956.
[25]
KZN
above n 8 at para 31.
[26]
Id at para 33.
[27]
Id at para 37.
[28]
Id at para 38.
[29]
Id at paras 39-44.
[30]
Id at paras 45 and 47.
[31]
Id at para 52.
[32]
Hoexter “The Enforcement of an Official Promise: Form,
Substance and the Constitutional Court”
(2015) 132
SALJ
207
at 223.
[33]
Premier, Mpumalanga v Executive Committee of the Association of
State Aided Schools: Eastern Transvaal
[1998] ZACC 20; 1999 (2)
SA 91 (CC); 1999 (2) BCLR 151 (CC).
[34]
Fredericks v MEC for Education and Training Eastern Cape
[2001]
ZACC 6
;
2002 (2) SA 693
(CC);
2002 (2) BCLR 113
(CC) (
MEC,
Education and Training, Eastern Cape
).
[35]
Hoexter n 32 above at 233-4.
[36]
Hoexter above n 32 at 219.
[37]
Murcott and van der Westhuizen “The Ebb and Flow of the
Application of the Principle of Subsidiarity – Critical
Reflections on
Motau
and
My Vote Counts
” (2015)
7 Constitutional Court Review at 45 and 58-59.
[38]
Hoexter “The Rule of Law and the Principle of Legality”
in Carnelley and Hoctor (eds)
Law, Order and Liberty: Essays in
Honour of Tony Mathews
2013 (University of KwaZulu-Natal Press
Scottsville 2011) 55 at 59; Price “The Evolution of the Rule
of Law”
(2013) 13
SALJ
649
at 655-656.
[39]
Hoexter id at 65.
[40]
Kohn L “The Burgeoning Constitutional Requirement of
Rationality and the Separation of Powers: Has Rationality Review
Gone too Far?”
(2013)
SALJ
810
at 812; and Hoexter id
at 66-8.
[41]
See [34].
[42]
Compare
MEC for Health, Eastern Cape v Kirland Investments (Pty)
Ltd
[2014] ZACC 6
;
2014 (3) SA 481
(CC);
2014 (5) BCLR 547
(CC)
,
where the minority judgment also relied directly on other
fundamental rights, but the majority declined to follow that
approach
because it was clear on the papers that it was being used
to circumvent PAJA time limits.
[43]
Id.  Also compare
KZN
above n 8 at paras 104-5.
[44]
See
DZ
above n 11 at paras 57-8.  See also, for example,
Fetal Assessment Centre
above n 11 at paras 12 and 78.
[45]
See, for example,
Fetal Assessment Centre
id at paras 11, 26
and 74.
[46]
Section 23(1) of the Constitution reads:
“Everyone has the right to fair labour practices.”
[47]
High Court judgment above n 3 at para 51.
[48]
66 of 1995.
[49]
“Twilight zones” of employment refer to types of
employment wherein there is no clear employer and employee, examples

include Uber and Airbnb.
[50]
Section 32 of the Constitution reads:
“(1) Everyone has the right of access to—
(a) any information held by the state; and
(b) any information that is held by another person and that is
required for the exercise or protection of any rights.
(2) National legislation must be enacted to give effect to this
right, and may provide for reasonable measures to alleviate the

administrative and financial burden on the state.”
[51]
Section 33 of the Constitution reads:
“(1) Everyone has the right to administrative action that is
lawful, reasonable and procedurally fair.
(2) Everyone whose rights have been adversely affected by
administrative action has the right to be given written reasons.
(3) National legislation must be enacted to give effect to these
rights, and must—
(a) provide for the review of administrative action by a court or,
where appropriate, an independent and impartial tribunal;
(b) impose a duty on the state to give effect to the rights in
subsections (1) and (2); and
(c) promote an efficient administration.”
[52]
See section 1 of the LRA reads:
“The purpose of
this Act
is to advance economic
development, social justice, labour peace and the democratisation of
the workplace by fulfilling the primary
objects of
this Act
,
which are—
(a) to give effect to and regulate the fundamental rights conferred
by section 23 of the Constitution of the Republic of South
Africa,
1996.”
[53]
Consider the
Basic Conditions of Employment Act 75 of 1997
and the
Employment Equity Act 55 of 1998
.
[54]
My Vote Counts NPC v Speaker of the National Assembly
[2015]
ZACC 31
2015 (1) SA 132
(CC);
2015 (12) BCLR 1407
(CC) (
My Vote
Counts
) at paras 44-74.
[55]
Id at para 182.
[56]
Fetal Assessment Centre
above n 1 at paras 11-2, relying on
Carmichele v Minister of Safety and Security
[2001]
ZACC 22;
2001
(4) SA 938
(CC);
2001
(1) BCLR 995
(CC)
.
[57]
See above n 15.