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[2016] ZASCA 14
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Mohapi v De Beers Pension Fund and Another (64/2015) [2016] ZASCA 14 (11 March 2016)
THE
SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Not Reportable
Case
No: 64/2015
In
the matter between:
MERVYN
MOHAPI
APPELLANT
and
DE
BEERS PENSION
FUND
FIRST RESPONDENT
PENSION
FUND ADJUDICATOR
SECOND RESPONDENT
Neutral
citation
:
Mohapi
v De Beers Pension Fund
(64/2015)
[2016] ZASCA 14
(11
March 2016)
Coram
:
Cachalia, Tshiqi, Pillay and Swain JJA and Victor AJA
Heard
:
29 February 2016
Delivered:
11
March 2016
Summary:
Pension
Fund Rules – Interpretation – member’s entitlement
to retirement on the grounds of medical infirmity –
precluded
where member fairly dismissed from employment – also precluded
where employer of the opinion that member not incapable
of carrying
working on the ground of medical infirmity.
ORDER
On
appeal from:
Gauteng
Division, Pretoria
(Tuchten
J sitting as court of first instance).
1
The appeal is dismissed with costs.
2
The following words are deleted from paragraph two of the order of
the court a quo:
‘
The
decision of the trustees of the respondent, De Beers Pension Fund,
conveyed to the complainant, Mervyn Mohapi, in a letter dated
13
September 2000, repudiating the complainant’s application for
ill-health retirement benefits, is confirmed.’
JUDGMENT
Swain
JA
(Cachalia,
Tshiqi and Pillay JJA and Victor AJA concurring):
[1]
This
appeal reveals a prolonged history of failed attempts, over a period
of some 16 years, by the appellant, Mr Mervyn Mohapi,
to qualify for
retirement on the grounds of medical infirmity from his employment
with the first respondent, De Beers Pension Fund
(the fund), a
pension fund duly registered in terms of s 4 of the Pension Funds Act
24 of 1956 (the Act). He has maintained throughout
that he is
entitled to ill-health retirement benefits in terms of the rules of
the fund.
[2]
Mr
Mohapi’s troubles began when he was informed of his dismissal
from his employment with the fund by way of a letter dated
24 May
2000. Thereafter, and in pursuit of his contention that he was no
longer capable of working, because of ill-health and accordingly
qualified for retirement on this ground, Mr Mohapi on two occasions
sought and obtained determinations in his favour from the second
respondent, the Pension Fund Adjudicator (the adjudicator). The
office of the adjudicator was established in terms of s 30B of
the
Act and has as its objective in terms of s 30D of the Act, to dispose
of complaints lodged in terms of s 30A (3) of the Act
in a
procedurally fair, economical and expeditious manner.
[3]
The
first determination by the adjudicator issued on 8 June 2009 was
based upon a complaint lodged by Mr Mohapi in which he alleged
that
the board of trustees of the fund had exercised its powers improperly
in September 2000 in refusing to grant him an ill-health
retirement
benefit. The adjudicator set aside the fund’s decision and
directed the board to ‘re-exercise its discretion
and refer the
complainant for psychiatric evaluation to determine if the
complainant qualifies for an ill-health retirement benefit
in terms
of Rule A3.4.1 within 30 days of this determination’.
[4]
In
accordance with the determination, the fund arranged for Mr Mohapi to
consult with a psychiatrist, Dr Bosman, obtained additional
assessments and a further medical report, all of which were
considered by the fund’s Ill-Health Sub-Committee (the IHSC).
The IHSC resolved unanimously to recommend that the fund reaffirm its
original decision not to award an ill-health retirement benefit
to Mr
Mohapi. The trustees of the fund approved the recommendation of the
IHSC and refused Mr Mohapi’s application.
[5]
This
decision gave rise to Mr Mohapi’s second complaint lodged with
the adjudicator on 22 February 2012, in which he alleged
inter alia,
that the decision by the fund was in excess of its powers, or was an
improper exercise of those powers. The adjudicator
found that the
board was obliged in terms of Rule A3.4.1 to exercise its discretion
to determine if Mr Mohapi was entitled to an
ill-health benefit, or
not. The adjudicator’s enquiry was not whether the board was
wrong in repudiating the claim, but rather
whether the decision was
reasonable on the evidence before it. The adjudicator recorded that
Dr Bosman had found that Mr Mohapi
was ‘permanently medically
unfit for any work in the open labour market’ and that the
employer, namely the fund, had
‘confirmed that Mr Mohapi was
permanently disabled’. It is clear, however, that Dr Bosman
never stated that the employer
had confirmed that Mr Mohapi was
permanently disabled. The fund had also never accepted that he was
incapable of working. The adjudicator
nevertheless found that the
board’s decision to repudiate Mr Mohapi’s application was
unreasonable and accordingly
set it aside. It declared that Mr Mohapi
qualified for an ill-health retirement benefit in terms of Rule
A3.4.1 and ordered the
fund to pay him his ill-health retirement
benefits.
[6]
Aggrieved
at the determination of the adjudicator the fund applied in terms of
s 30P of the Act to the Gauteng Division, Pretoria
for an order
setting it aside and replacing it with an order dismissing Mr
Mohapi’s complaint. The court a quo (Tuchten J)
granted such an
order and thereafter granted leave to appeal to this court.
[7]
The
resolution of the dispute and the outcome of this appeal fall within
a narrow compass which requires an interpretation of the
provisions
of Rule A3.4.1 of the rules of the fund. This rule provides as
follows:
‘
A3.4.0
Ill health retirement
A3.4.1
A MEMBER who, in the opinion of the EMPLOYER is
considered to be no longer capable of carrying on working as
a result
of medical infirmity, may at the sole discretion of the TRUSTEES
having obtained the opinion of a medical practitioner:
(a)
Retire in terms of Rule A3.4.2 where the infirmity
has resulted in permanent disability precluding further
employment or
gainful occupation with the EMPLOYER or elsewhere;
(b)
Retire in terms of Rule A3.4.3 where the MEMBER is able to perform
any occupation with any employer
for which he is or could reasonably
be expected to become qualified or suited, taking into account his
degree of disability and
his knowledge, training and education,
ability, experience and age. This need not be with the existing
employer, includes self-employment
and does not have regard to the
availability of work opportunities.
A3.4.2
. . .’
[8]
The
interpretation of the rule has given rise to two areas of dispute
between the parties, namely:
(a)
Whether Mr Mohapi’s
dismissal with effect from 15 September 2000 precluded
approval by
the trustees of his retirement from employment on the grounds of
medical infirmity; and
(b)
Whether the fund, qua employer, formed the requisite opinion that Mr
Mohapi
was no longer capable of carrying on working as a result of
medical infirmity.
[9]
The
resolution of both of these issues requires an examination of the
circumstances surrounding Mr Mohapi’s dismissal in 2000.
He was
originally employed by the De Beers Benefit Society and then the fund
from 1991 to 2000. During March 2000 Mr Mohapi applied
to the fund
for ill-health retirement whilst employed by the fund as a senior
accounts clerk and accordingly whilst he was a member
of the fund. In
May 2000 he was summoned to a disciplinary hearing to answer two
charges. The charges were that he had failed to
enter a cheque for
R10 000 in the cash book and had failed to enter the correct
cheque numbers on a number of ledger cards.
[10]
The
fund avers that Mr Mohapi pleaded guilty to both charges which he
disputes. Mr Mohapi stated at the disciplinary hearing that
there
were mitigating factors in that he suffered from a number of medical
conditions that impacted on his performance. He argued
that his
deficient work performance was not the result of incompetence or a
bad attitude, but was attributable to his medical ailments
which
included back pain, migraine headaches and depression.
[11]
In
the dismissal letter dated 24 May 2000 referred to above, the fund
informed Mr Mohapi of the outcome of the disciplinary hearing
in the
following terms:
‘
The
findings are as follows:
In
terms of both charges you admitted guilt. You, however pleaded
mitigating circumstances in that you have a number of medical
conditions that have an impact on your work performance. You quoted
various medical practitioners advice and I refer to a letter
which
states that this will be a permanent condition. You stated in the
inquiry that your work performance is not as a result of
incompetence
nor attitudinal but rather as a result of your various medical
ailments.
In
light of the above and the fact that you stated that you would not be
able to perform any other duty in the organisation your
employment
with the De Beers Pension Fund is subsequently terminated on grounds
of incapacity. However, as you have applied for
an ill health
retirement, you will be regarded as suspended and remain on full
benefits pending the outcome from the Board of Trustees
on whether or
not you qualify for ill health retirement.
On
the date of the decision your benefit will cease.
You
have the right to appeal this decision in writing by the close of
business on Friday 26 May 2000.’
[12]
Mr
Mohapi, on 25 May 2000, unsuccessfully appealed against the finding
of the disciplinary hearing. Through his trade union, the
National
Union of Mine Workers (the union) he then lodged an application with
the CCMA on 30 June 2000 to overturn his dismissal
on the ground that
it was substantially and procedurally unfair. The application was,
however, out of time and a subsequent application
for condonation for
the late filing of the application was refused.
[13]
On
13 September 2000 the fund sent a letter to Mr Mohapi informing him
of the outcome of his application for ill-health retirement
in the
following terms:
‘
Re:
TERMINATION OF SERVICES
My
letter refers. On the 24 May 2000 upon the conclusion of a
disciplinary enquiry you were dismissed for incapacity. You were,
however, suspended with full benefits pending the outcome of your
application for Medical retirement.
We
have subsequently been informed by the Trustees that your application
has not been successful. I wish to inform you therefore
that your
suspension is over and as you were dismissed all benefits will cease
with effect from 15 September 2000.’
[14]
The
union then lodged a second application with the CCMA to set aside his
dismissal. It was alleged that Mr Mohapi suffered from
ill-health and
his dismissal was accordingly inconsistent with fair labour practice
and was procedurally unfair. This application
was again unsuccessful.
[15]
Mr
Mohapi’s dismissal from the fund in September 2000 must
accordingly be deemed to be fair as correctly conceded by his
counsel. The issue of whether his dismissal thereby precluded
approval by the trustees of his application for retirement from
employment
on the grounds of ill-health, must be examined in this
context.
[16]
In
support of his contention that he was still employed by the fund, and
was therefore capable of retiring from the fund, when his
application
was considered by the fund, Mr Mohapi made several submissions. The
first submission relies upon a retrospective operation
of the first
determination made by the adjudicator on 8 June 2009. It is submitted
that the effect of this determination was that
Mr Mohapi was in the
same position as he was just before 13 September 2000. On this date
the fund informed him that the trustees
had rejected his application
and he was dismissed with effect from 15 September 2000. In other
words, the argument was that he
was still employed on this date.
[17]
The
inherent fallacy in this argument is the assumption that the fund and
the employer are the same person and that the controlling
mind of
both the fund and the employer is the same organ, namely the
trustees. However, the decision of the trustees of the fund,
qua
employer, to dismiss Mr Mohapi as an employee and its decision, qua
fund manager, to refuse his application for ill-health
retirement
benefits are two entirely distinct functions. The determination by
the adjudicator only set aside the refusal of his
application for
benefits and had no bearing whatsoever upon his dismissal.
[18]
Secondly,
it is submitted that the fund, qua employer, was aware in May and
September 2000 that Mr Mohapi could still appeal the
trustees’
decision to refuse his application which could be reversed on appeal,
with the result that the trustees could not
have contemplated that
his dismissal would stand, even if the trustees’ refusal of his
application was set aside. There are
two answers to this submission.
The first is that the dismissal would stand until overturned, which
Mr Mohapi unsuccessfully attempted
to do. The second is that no
appeal lay against the trustees’ refusal of Mr Mohapi’s
application. His only remedy was
an application in terms of s 30A of
the Act to the adjudicator, which even if successful, the trustees
could not have contemplated
would result in his dismissal being set
aside, as such a result was not competent in law.
[19]
A
further submission by Mr Mohapi to address the problem presented by
the requirement that in order to ‘retire’ within
the
meaning of that term in Rule A3.4.1 a member of the fund has to be
employed at the time, was that the word ‘retire’
in Rule
A3.4.1 meant ‘retire from the fund’ and not ‘retire
from employment or service’. In the context
of this rule,
however, it is quite clear that what is being addressed is the
situation where a member is ‘no longer capable
of carrying on
working as a result of medical infirmity’. In addition Rule
A3.4.1 forms part of those rules falling under
the heading
‘Calculation of Retirement Pension’ in which it is clear
that what is being dealt with is retirement from
service. There is no
basis for the meaning which Mr Mohapi seeks to attribute to the word
‘retire’ in Rule A3.4.1.
[20]
It
is accordingly clear that after his dismissal in September 2000, Mr
Mohapi was precluded from being granted retirement on the
grounds of
ill-health, whilst his dismissal stood. For the same reason his
application could not be granted by the trustees when
they
reconsidered it in August 2009, after the first determination by the
adjudicator in June 2009.
[21]
This
conclusion renders it strictly unnecessary to consider the second
area of dispute between the parties for the determination
of the
appeal. I will, however, do so for the sake of completeness. The
issue is whether the fund, qua employer, formed the requisite
opinion
that Mr Mohapi was no longer capable of carrying on working as a
result of medical infirmity, in terms of the rule.
[22]
The
cornerstone of Mr Mohapi’s argument rests on the contents of
the letters dated 24 May 2000 and 13 September 2000 set out
above.
Great reliance is placed upon the statement in the letter dated 24
May 2000 that Mr Mohapi’s employment ‘is
subsequently
terminated on grounds of incapacity’. It is submitted that
incapacity is not the same thing as misconduct, or
poor work
performance.
[23]
In
order to determine whether the fund formed the requisite opinion,
inferences have to be drawn from the objective facts to determine
the
fund’s state of mind. In order to do so, the contents of the
letters in question cannot be viewed in isolation but must
be viewed
in the context of the evidence as a whole. The court a quo concluded
that ‘the facts show incontestably that the
employer did not
hold the view that Mr Mohapi was no longer capable of carrying on
working as a result of medical infirmity. The
evidence before me
shows that the employer was of the view that Mr Mohapi was probably
malingering’.
[24]
The
evidence relied upon by the court a quo was contained in affidavits
of employees of the fund, filed by the fund in response
to the second
complaint lodged by Mr Mohapi with the adjudicator. These employees
were involved in the disciplinary proceedings
against Mr Mohapi in
2000, although the affidavits were deposed to only in July 2013.
[25]
Ms
Templehoff who wrote the letter of dismissal dated 24 May 2000 stated
in her affidavit that she ‘felt that he exaggerated
his medical
condition’. She added that ‘[t]here were times when I
observed him at work and he seemed to have pain and
could not sit or
walk properly, but during lunch time without fail, he would leave the
office and walk to town and be seen walking
fine by all of his
co-workers. He would not shuffle his feet bit by bit like he would do
in the building, but walk just fine with
normal strides and a normal
pace’.
[26]
Mr
Kevin Flynn, the author of the letter dated 13 September 2000, stated
in his affidavit that he ‘was of the opinion that
Mr Mohapi was
lazy and used any reason to book off sick. He was once observed doing
a little dance when he thought nobody was looking,
even though he
complained of chronic backache’.
[27]
In
addition, Mr Gavin Heale, whose name appears on the heading of the
letter dated 24 May 2000, states in his affidavit that he
observed Mr
Mohapi outside the elevator looking around and ‘when he thought
there were no witnesses he watched the elevator
movement indicators
and when it started on its way down, he proceeded to gently lie down
on the floor. When the elevator doors
opened a few seconds later, he
started to shake and moan’. He stated that he ‘was
witness to a number of Mr Mohapi’s
escapades and was also party
to the start of the disciplinary process, [which] started to put an
end to them’.
[28]
It
is therefore quite clear that there is no basis for the submission
made by counsel for Mr Mohapi that the contents of these affidavits
were simply an ‘afterthought’ by the fund attested to
some 13 years after the events referred to.
[29]
In
addition, the fund in the founding affidavit before the court a quo
referred to the fact that in its response to Mr Mohapi’s
application for an ill-health benefit, it had commented ‘it is
felt that although Mr Mohapi may well have a back problem,
his
incapacity to work to the required standards is more to do with his
mental attitude’. This averment was simply ‘noted’
in Mr Mohapi’s answering affidavit and never denied.
Considering all of the above the court a quo correctly concluded that
the fund had never formed the requisite opinion that Mr Mohapi was no
longer capable of carrying on working as a result of medical
infirmity.
[30]
The
appeal must accordingly fail. As regards costs, counsel for the fund
only asked for the costs of one counsel. Counsel for the
fund pointed
out that the second sentence of paragraph two of the order of the
court a quo is erroneous, superfluous and should
be deleted. I agree.
[31]
It
is ordered that:
1
The appeal is dismissed with costs.
2
The following words are deleted from paragraph two of the order of
the court a quo:
‘
The
decision of the trustees of the respondent, De Beers Pension Fund,
conveyed to the complainant, Mervyn Mohapi, in a letter dated
13
September 2000, repudiating the complainant’s application for
ill-health retirement benefits, is confirmed.’
K G
B Swain
Judge
of Appeal
Appearances:
For
the Appellant:
S Khumalo
Instructed
by:
Cheadle
Thompson & Haysom Inc, Johannesburg
McIntyre
& Van der Post, Bloemfontein
For the First Respondent:
P B J Farlam SC (with M
M Mokhoaetsi)
Instructed
by:
Des
Rabé Attorneys, Durbanville
Phatshoane
Henney, Bloemfontein