Case Law[2022] ZAGPJHC 420South Africa
Moropa and Others v Chemical Industries National Provident Fund and Others (A5041/2021;03656/2020) [2022] ZAGPJHC 420 (29 June 2022)
High Court of South Africa (Gauteng Division, Johannesburg)
29 June 2022
Headnotes
Summary: Administrative law – review – appeal against dismissal of review application – review application based on fraud and corruption, legality and the Promotion of Administrative Justice Act 3 of 2000 (PAJA) – some decisions of a Pension Fund are ‘administrative actions’ –
Judgment
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## Moropa and Others v Chemical Industries National Provident Fund and Others (A5041/2021;03656/2020) [2022] ZAGPJHC 420 (29 June 2022)
Moropa and Others v Chemical Industries National Provident Fund and Others (A5041/2021;03656/2020) [2022] ZAGPJHC 420 (29 June 2022)
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sino date 29 June 2022
REPUBLIC OF SOUTH
AFRICA
IN THE HIGH COURT OF
SOUTH AFRICA
GAUTENG DIVISION,
JOHANNESBURG
APPEAL
CASE NO
:
A5041/2021
COURT
A QUO
CASE
NO
:
03656/2020
REPORTABLE:
NO
OF
INTEREST TO OTHER JUDGES:
NO
REVISED:
29 June 2022
In the matter between:
MOROPA
,
CHRIS LEGAKWA
First Appellant
MAKAMOLE
,
ESAU FRANS
Second Appellant
NKOSI
,
SHALIMANE RICHARD
Third Appellant
SELEPE
,
VUSI JOHANNES
Fourth Appellant
RAMBAU
,
MATHAPELO SHIRLEY
Fifth Appellant
GAMEDE
,
DINEO PRISCILLA
Sixth Appellant
MAZWISIKHWEBU
,
CHRISTOPHER
Seventh Appellant
NKGAPELE
,
JACK TEMA
Eighth Appellant
NBC
HOLDINGS (PTY) LIMITED
Ninth Appellant
NBC
FUND ADMINISTATION SERVICES (PTY) LIMITED
Tenth
Appellant
and
CHEMICAL
INDUSTRIES NATIONAL PROVIDENT FUND
First
Respondent
DANGAZELE
,
BONGINHLANHLA
Second Respondent
SEMA
,
REGINALD
Third Respondent
SITHOLE
,
AYANDA
Fourth Respondent
MASHEGO
,
LUCAS
Fifth Respondent
BALOYI
,
JOHN
Sixth Respondent
MOTLAKENG
,
POPPY
Seventh Respondent
MAKHABA
,
CASWELL Z
Eighth Respondent
TJIANE
,
DAN
Ninth Respondent
DYONTA
,
MONDE
Tenth Respondent
NGONYAMA
,
ZWELIHLE REGINALD
Eleventh Respondent
ZUNGU
,
BHEKI
Twelfth
Respondent
SIQITI
,
TEMBA
Thirteenth Respondent
ARENDSE
,
ALEXANDER
Fourteenth Respondent
PELO
,
SINA
Fifteenth Respondent
TSHAMBU
,
JOHN
Sixteenth
Respondent
OLIVIER
,
LIZETTE
Seventeenth Respondent
SHOLOKO
,
SBONGILE
Eighteenth Respondent
MATLOGA
,
WILLIAM
Nineteenth Respondent
SIBIYA
,
GLORIA JOYFUL
Twentieth Respondent
JOHN
,
SHANDRIKA
Twenty First Respondent
LOOTS
,
ENRNOLENE
Twenty Second Respondent
DE
VOS
, LAURA
Twenty Third Respondent
NOLINGO
,
BULELANI
Twenty Fourth Respondent
MAGAGULA
,
ZANELE ESTHER
Twenty Fifth Respondent
DAVIDS
,
FAIZ
Twenty Sixth Respondent
AKANI RETIREMENT FUND
ADMINISTRATORS
(PTY) LIMITED
Twenty Seventh Respondent
NOVARE ACTUARIES AND
CONSULTANTS
(PTY) LIMITED
Twenty Eighth Respondent
MORUBA
CONSULTANTS AND ACTUARIES
Twenty Ninth Respondent
CHEMICAL, ENERGY,
PAPER, PRINTING, WOOD
AND
ALLIED WORKERS’ UNION
Thirtieth
Respondent
THE
FINANCIAL SECTOR CONDUCT AUTHORITY
Thirty First Respondent
Coram:
Adams J, Dippenaar J
et
Lenyai AJ
Heard
:
21 February 2022 – The ‘virtual hearing’ of the
Full Court
Appeal was conducted as a videoconference on
Microsoft
Teams
.
Delivered:
29 June 2022 – This judgment was handed down electronically
by circulation to the parties' representatives
via
email, by
being uploaded to
CaseLines
and by release to SAFLII. The date
and time for hand-down is deemed to be 10:00 on 29 June 2022.
Summary:
Administrative law – review –
appeal against dismissal of review application – review
application based on fraud
and corruption, legality and the Promotion
of Administrative Justice Act 3 of 2000 (PAJA) – some decisions
of a Pension Fund
are ‘administrative actions’ –
Standing
of erstwhile Pension Fund Administrator to apply for review of
termination of its contractual relationship with Pension
Fund –
administrator not similar to ordinary service provider – and
has
locus standi
– Courts should be hesitant to dispose
of cases on standing alone where broader concerns of accountability
and responsiveness
may require investigation and determination of the
merits –
Factual
dispute – Courts have a duty to decide disputes before it, even
investigated by other entities – a robust approach
to be
adopted – fraud and bribery inferred –
‘
Fraud
unravels all’ – principle discussed – decisions to
be set aside on the basis of this principle –
Principle
of legality – appointment of Pension Fund Administrator –
powers of the Board of Trustees of a Pension Fund
to appoint an
Administrator – interpretation of the Pension Funds Act –
Appeal
upheld and decision of Pension Fund reviewed and set aside.
ORDER
On
appeal from:
The
Gauteng Division of the High Court, Johannesburg (Vally J
sitting as Court of first instance):
(1)
The appellants’ appeal against the order of
the court
a quo
is
upheld, with costs.
(2)
The order the court
a
quo
is set aside and in its place is
substituted the following: -
‘
(a)
The
decision of the first to twenty-sixth respondents taken on 21 and 22
November 2019 to terminate the suite of agreements with
the ninth and
tenth applicants be and is hereby reviewed and set aside.
(b)
The decision of the first to third
respondents to appoint the twenty-seventh to twenty-ninth respondents
as the administrators,
consultants and actuaries to the first
respondent, be and is hereby reviewed and set aside.
(c)
The third and fourth
respondents are hereby removed as trustees of the CINPF and its Board
of Trustees be and is hereby directed
to replace those trustees in
terms of and in accordance with the Rules of the CINPF.
(d)
The first to
twenty-seventh respondents, jointly and severally, the one paying the
other to be absolved, shall pay the costs of
this review application,
inclusive of the costs of Part A and the costs of the application to
join the thirty-first respondent,
all such costs to include the costs
consequent upon the employment of two counsel, one being a Senior
Counsel.’
(3)
The first to twenty-seventh respondents, jointly
and severally, the one paying the other to be absolved, shall pay the
appellants’
costs of the appeal, including the costs of the
application for leave to appeal to the court
a
quo
and the costs of the application
for leave to appeal to the Supreme Court of Appeal, all such costs to
include the costs consequent
upon the employment of two Counsel, one
being a Senior Counsel.
JUDGMENT
Adams J (Dippenaar J
et
Lenyai AJ concurring):
[1]
This appeal arises from an
application to review and set aside the appointment by the first
respondent, the Chemical Industries
National Provident Fund (CINPF),
of the twenty seventh respondent (Akani Retirement Fund
Administrators (Pty) Ltd or ‘Akani’),
the twenty eighth
respondent (Novare Actuaries and Consultants (Pty) Ltd or ‘Novare’)
and the twenty ninth respondent
(Moruba Consultants and Actuaries or
‘Moruba’) as the administrative, consulting and actuarial
service providers to
the CINPF. The appointment of these entities
(Akani, Novare and Moruba) was in the stead and in the place of the
tenth appellant
(NBC Holdings (Pty) Ltd) and the eleventh appellant
(NBC Fund Administration Services (Pty) Ltd), who shall be referred
to collectively
in this judgment as ‘NBC’, and who had
been the administrators of the CINPF from its inception during 1987
for more
than thirty years.
[2]
NBC’s
appointment as Fund Administrator of the CINPF was terminated during
November and December 2019 and it was not afforded
the opportunity to
bid for its reappointment. Aggrieved at having its services
terminated and not being reappointed, NBC, together
with certain
members of the CINPF (the first to eighth appellants or the
‘appellant members’), approached the High
Court to have
set aside the appointment of Akani, Novare and Moruba, as well as the
decision by CINPF to terminate the agreements
in terms of which NBC
had acted as the CINPF’s fund administrators. Vally J (the
court
a
quo
)
dismissed the application with costs
[1]
and refused a subsequent application for leave to appeal. This appeal
is with special leave from the Supreme Court of Appeal (SCA)
granted
to the first to eighth appellants on 22 February 2021 and to the
ninth and tenth appellants on 31 July 2021.
[3]
The main issue to be decided
in this appeal is whether there was conduct on the part of certain
trustees of the CINPF, which tainted
the decisions taken by the
CINPF, which, in turn invalidated those decisions. Therefore, at a
factual level, the first question
to be asked and answered is whether
these trustees committed acts of bribery and corruption, which
influenced the decision taken
by all of the trustees of the CINPF to
terminate the contractual relationship between it and NBC. Secondly,
should those decisions
be set aside?
[4]
The CINPF is a pension fund
worth billions of rands in pension fund money, held on behalf of its
members, predominantly blue-collar
workers in the chemical, pulp and
paper and pharmaceutical industries. The second to the twenty sixth
respondents are the trustees
of the CINPF (the trustees). At the
centre of the dispute between the parties are the second, third and
fourth respondents (Messrs
Dangazele, Sema and Sithole), who,
according to the appellants, received bribes from Akani with a view
to influencing the decision
to appoint it (Akani) as the Fund
Administrator to CINPF. At the relevant time, Mr Dangazele was
the Principal Officer of
the CINPF, Mr Sema was the Chairperson of
its Board of Trustees and Mr Sithole the deputy Chairperson.
Mr Dangazele has, in
the interim passed away, rendering any
relief sought against him moot.
[5]
The impugned decisions by
the trustees of CINPF were taken during November and December of 2019
and it is not in dispute that during
or about that time Messrs
Dangazele, Sema and Sithole received from a company related to Akani,
Neighbour Funeral Scheme (NFS),
certain amounts of money. It is
however disputed by these individuals that the monies received were
bribes and they proffer explanations
which, if accepted, explain why
– coincidental as it may seem – these sums were paid to
and received by them.
[6]
The CINPF was established by
NBC in collaboration with several trade unions representative in the
chemical industry on 1 September
1987. After the creation of the
CINPF, the relevant unions merged to form one union, the Chemical,
Energy, Paper, Printing, Wood
and Allied Workers' Industry, the
thirtieth respondent (‘CEPPWAWU’). CEPPWAWU initially
opposed the relief sought in
the application in the High Court, but
has since been placed under curatorship and no longer participates in
these legal proceedings.
It has delivered a notice to abide.
[7]
NBC was the administrator of
the CINPF since it was founded, and continued to provide
administration, actuarial and consulting services
to the CINPF until
31 July 2020 when the judgment by Vally J was handed down. At the
relevant time, the CINPF had approximately
21 600 members and
the participating employers were located throughout the Republic.
These members were serviced through walk-in
service centres around
the country, set up and maintained by NBC.
[8]
The Rules of the CINPF were
approved by the Registrar of Pension Funds (now the Financial Sector
Conduct Authority) and are statutorily
binding on the CINPF, the
Board and the members. The Financial Sector Conduct Authority (FSCA)
is the thirty first respondent,
having been joined, at the insistence
of the appellants, as a respondent in the review application. As a
worker-controlled fund,
and as an essential feature of its
governance, the CINPF made provision within its Rules for various
members' representative committees,
the Local Advisory Committees
(LAC’s) and Regional Advisory Committees (RAC’s). In
terms of the Rules, these committees
are to be consulted on material
decisions to be made by the Board concerning the operation of the
CINPF and are, as a fact, usually
consulted on such decisions.
[9]
It is the case of the
appellant members of the CINPF (the first to eighth appellants) that
on numerous instances the RACs were consulted
with regard to the
detailed operations of the Fund, illustrating the extent to which the
RAC's were involved in the governance
and decision-making of the
CINPF. In stark contrast to this consultative approach, the Board
took the decision to terminate all
of NBC's contracts and to engage
the services of Akani, Novare and Moruba, without any prior notice
to, or consultation with, the
LACs and the RACs. This is disputed by
the CINPF and its trustees. The court
a
quo
found
that the CINPF was not under any legal obligation to consult these
bodies on material issues, as the Board of Trustees was
and remained
responsible for the administration of the Fund.
[10]
Prior to the termination of
the NBC Agreements, the relationship between NBC and the CINPF was
managed on behalf of NBC by Mr Chaane
and his subordinate, Mr Ginya,
leading a large team of NBC employees. During the course of 2019,
Messrs Chaane and Ginya (assisted
by several of NBC's other
employees, many of whom are now employed by NFS) engineered, so it is
alleged by NBC and the appellant
members, a basis for the CINPF to
contend that the trust relationship between the CINPF and NBC had
broken down. It is the case
of the appellants that none of these
allegations withstand scrutiny. This contention was rejected by the
court
a
quo
, who
in fact accepted, as reasonable, the explanations proffered by the
CINPF and its trustees as the reasons why it had become
necessary to
replace NBC as the Fund Administrator of CINPF.
[11]
The court
a
quo
rejected
the claim by NBC that the Messrs Ginya and Chaane – who were
also recipients of sums of monies from NFS on the same
day as
payments were received by Messrs Dangazele, Sema and Sithole –
were instrumental in plotting the downfall of NBC.
The reason why it
became necessary for the CINPF to terminate the mandate of NBC, so
the court
a
quo
found,
was
inter
alia
the
latter’s poor service delivery, as well as the fact that its
fees for services rendered were ‘not market-related’.
[12]
At a meeting on 21 and 22
November 2019, the Trustees appointed a sub-committee to find
replacement service providers for NBC (‘the
sub-committee’),
consisting of the second to seventh respondents (namely, Messrs
Dangazele, Sema and Sithole, who all received
payments a week after
Akani was appointed, Mr Mashego, the First Deputy President of
CEPPWAWU, Mr John Baloyi and Ms Poppy Motlakeng).
[13]
The sub-committee then
engaged in what is described by NBC as ‘a highly truncated
procurement process’ from 27 November
2019 (when the
sub-committee met for the first time) until 11 December 2019, when
the Board resolved to appoint Akani, Moruba and
Novare, with numerous
procedural shortcomings, so NBC avers. After shortlisting twelve
potential candidates for the provision of
administrative services,
for instance, the sub-committee then proceeded to eliminate nine of
those candidates, and invited three
to submit a tender.
[14]
The procurement processes
culminated at the Board meeting on 11 December 2019, where the other
two candidates were rejected, by
design according to NBC, leaving
Akani as the only viable candidate. Akani was there and then
appointed as the CINPF’s administrative
service provide,
despite a suggestion by one of the other Trustees that the Board
considers other applicants. This proposal was
rejected by the
chairperson on the basis that there was ostensibly no time to do so.
[15]
A week later, on 20 December
2019, and within four minutes of one another Mr Dangazele (the
Principal Officer of the CINPF) was
paid R40 000; Mr Sema (the
Chairperson of the CINPF Board of Trustees) was paid R25 000; Mr
Sithole (the Deputy Chairperson
of the CINPF Board of Trustees) was
paid R25 000; Mr Chaane was paid R50 000; and Mr Ginya was paid
R40 000.
[16]
As already indicated, a
material factual dispute in this matter relates to whether or not the
payments made to Messrs Dangazele,
Sema and Sithole one week after
Akani's appointment, were
bona
fide
payments
from NFS, an entity closely related to Akani in that it has the same
shareholders and directors, made as a result of the
death of alleged
family members of each of them, in terms of funeral policies which
were in operation with effect from 1 August
2019, as they allege. Put
another way, were these payments made
bona
fide
pursuant
to the second, third and fourth respondents' membership of NFS and,
if so, did these payments give rise to a conflict of
interest between
these respondents’ respective duties as principal officer and
Trustees for CINPF and their personal interests.
[17]
The
court
a
quo
did
not deal in any way with this dispute as it was of the view that the
legitimacy of these payments to Messrs Dangazele, Sema
and Sithole
were being investigated by the South African Police Services and the
FSCA. I am not convinced of the correctness of
this reasoning. As
rightly pointed out by Mr Watt-Pringle SC, who appeared on behalf of
NBC together with Ms MacLean, a Court cannot
decline to hear evidence
and decide a matter on the basis that the same issue is being
investigated by other bodies. A Court can
and should determine a
material dispute before it, irrespective of whether that dispute is
under investigation by another body
of agency. I am therefore of the
view that this issue – whether Akani bribed CINPF trustees and
the Principal Officer of
the CINPF in order to procure its
appointment – was an issue properly before the court
a
quo
,
and that it had not only the power but also the duty to decide it. As
Nicholls JA put it in
Solidarity
and Another v Black First Land First and Others
[2]
:
‘
One
of the primary functions of a court is to bring to finality the
dispute with which it is seized. It does so by making an order
that
is clear, exacts compliance, and is capable of being enforced in the
event of non-compliance.’
[18]
Also,
as was said by Weiner AJA in
P
M obo T M v Road Accident Fund
[3]
:
'[14]
… ... The issues in any particular litigation will be
determined by the pleadings
or affidavits and may be expanded by the
parties in the course of the proceedings. It is not for the court to
vary the issues so
defined. But, once the case has been placed before
the court for adjudication, it is obliged to adjudicate upon the
issues it raises
by rendering a judgment, unless the parties
specifically withdraw all or some of the issues from judicial
consideration.'
[19]
I therefore proceed to deal
with that issue and inquire into whether or not that factual dispute
between the parties is capable
of determination on the papers which
were before the court
a
quo
.
[20]
But before that, I need to
deal with an aspect which formed the basis of the court
a
quo’s
judgment
against NBC, which effectively non-suited it. In that regard, the
court
a quo
found that NBC acted
purely in its ‘own interests' in relation to the relief which
it sought and concluded that NBC lacked
standing, which meant, so the
court
a quo
found, that there was
‘no need to examine the merits of its case’.
[21]
I am not convinced that this
finding of the court
a
quo
was
correct. As submitted on behalf NBC, as administrator to the fund, it
was no ordinary service provider in the mould of a contract
cleaning
company, or supplier of stationary. Administrators of pension funds
are statutorily regulated and have duties to the fund
that far exceed
their contractual obligations.
[22]
So,
for example, s 13B of the Pension Funds Act (PFA)
[4]
provides that the administrator of a fund shall be approved by the
registrar and has onerous duties both to the fund and to the
regulator, relating to the interests of the members and the proper
administration of the fund. In terms of s 13B(5)(a) an administrator
must endeavour to avoid conflict between his interests and the duties
owed to the fund, and any conflict of interest or potential
conflict
of interest must be disclosed by the administrator to the board
setting out full particulars of how such conflict will
be managed.
And ss (b) requires the administrator to administer the fund in a
responsible manner.
[23]
Importantly, s 13B(10)
provides as follows:
‘
When
an administrator becomes aware of any material matter relating to the
affairs of a fund, which in the opinion of the administrator
may
prejudice the fund or its members, the administrator must inform the
registrar of that matter in writing without undue delay.’
[24]
Moreover, so it was further
submitted on behalf of NBC, as a fact, NBC together with CEPPWAWU was
instrumental in the founding of
the CINPF and was, as administrator,
responsible for servicing the day-to-day interests of its members. I
find myself in agreement
with these submissions. To cast NBC into the
mould of a mere service provider with a purely commercial interest in
the CINPF is
untenable.
[25]
For these reasons, I am of
the view that NBC had the necessary standing to bring the review
application in the court
a
quo
. In
determining the issue of standing, the validity of the NBC’s
legal challenge should have been assumed. It follows that,
at the
stage of deciding NBC's standing, Vally J was obliged to assume that
the impugned Board decisions constituted administrative
action liable
to be set aside under PAJA, or on the basis of the doctrine of
legality, or on the basis that ‘fraud unravels
all’. A
so-called ‘own interest litigant’ acquires standing not
from the invalidity of the challenged decisions,
but from its
‘interests or potential interests’. It can hardly be
contended that NBC has no interest in a decision
to terminate its
contracts which, it alleges, is tainted by fraud and bribery of the
decision makers by a competitor.
[26]
Additionally,
and as was held by Cameron J in
Giant
Concerts CC v Rinaldo Investments (Pty) Ltd:
[5]
,
‘[i]t seems plain that a commercial interest in the
subject-matter of the transaction will be sufficient to establish
own-interest
standing to challenge it’. And, applying the
further findings by Cameron J, NBC's statutory responsibilities to
the CINPF
and to the regulator require the Court, in the interests of
justice under the Constitution, to be hesitant to dispose of cases on
standing alone where broader concerns of accountability and
responsiveness may require investigation and determination of the
merits.
[27]
I am therefore of the view
that NBC has standing in relation to the relief that it sought in the
review application in the court
a
quo
. I
agree with the submission by Mr Watt-Pringle SC that by bringing the
application, NBC together with the Members, have acted
in the broader
public interest of the CINPF, its tens of thousands of members and
clean administration in the pension fund industry.
[28]
That brings me back to the
issue of the alleged corrupt payments made to the top three CINPF
officials and to other individuals
allegedly averse to the interest
of NBC. As indicated earlier in this judgment, the simple question is
this: can the explanation
by the respondents that the payments from
Akani to the top CINPF officials were
bona
fide
, and
not bribes, be accepted as true?
[29]
In a nutshell, the
explanation by Akani and the CINPF in respect of the payments to
Messrs Dangazele, Sema and Sithole, which, it
will be recalled, all
happened on the same day and within an hour of each other, is that it
related to the proceeds of claims pursuant
to and in terms of funeral
policies upon the deaths of relatives of these officials. So, for
example, Mr Dangazele simply stated
that he had joined NFS in August
2019 and upon the death of one of his nominated beneficiaries, was
paid out R40 000 under the
policy. In substantiation of this version,
he put up his application for membership of NFS and the death
certificate. Mr Sema provided
a similarly bland version in a separate
affidavit, as did Mr Sithole and both sought to persuade the court
a
quo
that
their versions were true because their applications to join the NFS
were signed and dated in August 2019, well before the Board's
November board meeting at which it decided to terminate NBC's
contracts.
[30]
In support of their death
benefits claims, they furnished death certificates in respect of the
deceased relatives – in the
case of Mr Dangazele, for his
‘Uncle’. Mr Mosesenyane Abel Ndukula, who died on 29
November 2019 of natural causes;
in the case of Mr Sema, for his
‘Aunt’, Ms Topisa Maria Somo, who died on 5 December 2019
of natural causes; and in
the case of Mr Sithole, for his ‘Aunt’,
Ms Betty Nwashiburi Sithole, who died on 30 November 2019 of natural
causes.
[31]
As submitted by NBC, there
are obvious questions left unanswered by the explanation by Akani and
the CINPF. Those included the remarkable
coincidence that all three
joined the same funeral scheme, independently of one another, three
months before they were instrumental
in the appointment of Akani,
which happens to be appointed to administer the scheme. Despite the
remarkable coincidence that they
all three lost ‘family
members’ within weeks of one another and all received their
payments on the same day, they failed
to state how they are in fact
related to the deceased.
[32]
The version which Akani and
the CINPF wants the court to accept is that Messrs Dangazele, Sema
and Sithole all subscribed for funeral
policies from NFS, all in
August 2019, and all independently of one another, notwithstanding
that there are 11 100 registered FAIS
representatives licenced to
sell funeral policies in South Africa. There is no explanation as to
why, of all the funeral policy
vendors in the country, all three
obtained funeral policies within days of one another, from the same
one. This, despite the fact
that Mr Dangazele lives in Durban, whilst
Messrs Sema and Sithole in Kempton Park and Orange Farm respectively,
and NFS is based
in Kempton Park in Gauteng.
[33]
The explanation or
explanations by Akani and the CINPF bring to mind the expression that
it only has to be stated for it to be rejected
– it is so
far-fetched that it can and should be rejected on the papers. And
this does not even take into account the myriad
of other anomalies
and discrepancies highlighted in their papers by the appellant
members and NBC, which demonstrate that the claims
made by NFS were
fraudulent. Most notable is the evidence presented by the NBC that
the death benefit claims by Messrs Dangazele,
Sema and Sithole were
made in respect of the deaths of persons seemingly unrelated to them.
[34]
What is even more astounding
is the fact that there is no explanation how NFS could have issued
the policies, given that it is not
a registered financial service
provider. No proof was provided that it was entitled to sell funeral
policies. Considering all the
objective and documentary evidence, the
versions by CINPF (Dangazele, Sema and Sithole) and Akani can and
should be rejected on
the papers – they are inherently
contradictory, vague and/or implausible. This then also means that
there is no need for
any disputed issue to be referred to oral
evidence. The court a quo should simply have rejected the far-fetched
and implausible
explanations proffered by CINPF and Akani for the
irregular pay-outs received by the senior office-bearers of CINPF.
[35]
For these reasons, I am of
the view, applying irrefutable inferential reasoning, that the true
purpose of the payments to Messrs
Dangazele, Sema and Sithole was a
bribe. The implausibility of the CINPF's explanation is self-evident.
The explanations for the
receipt of substantial payments all on the
same day, all from one funeral scheme vendor, which happens to be a
company related
to Akani, one week after the appointment of Akani, in
which decision they were directly involved, implies a series of truly
remarkable
and very unlikely coincidences. There is no explanation
offered in the affidavits by Akani and the CINPF as to why these
remarkable
coincidences are plausible.
[36]
The explanation for the
three payments to Messrs Dangazele, Sema and Sithole therefore ought
to be rejected as a fabrication. In
my view, these payments were
corrupt payments constituting bribes for the roles played by Messrs
Dangazele, Sema and Sithole in
the decision to terminate NBC's
services and in the appointment of Akani, Novare and Moruba.
Therefore, in my judgment, the termination
of NBC's services is
tainted with fraud and corruption.
[37]
They
fall squarely into the category of nominal factual disputes that can
and should be resolved on paper on the basis of the
Plascon
Evans
rule.
The explanations given by the CINPF, Akani and its Trustees are ‘so
far-fetched or clearly untenable that the Court
is justified in
rejecting them merely on the papers’
[6]
.
Additionally, the explanations consist of and are nothing more than
‘bald or uncreditworthy denials, [which] raises fictitious
disputes of fact, [are] palpably implausible, far-fetched or so
clearly untenable that the court is justified in rejecting them
merely on the papers’.
[7]
[38]
I
now turn my attention to the question whether this conduct on the
part of Messrs Dangazele, Sema and Sithole translates or should
translate into the invalidation of the impugned decisions. First I
deal with this question relative to the
Promotion of Administrative
Justice Act (PAJA
)
[8]
and the
principle that ‘fraud unravels all’. This, in turn,
requires that I canvass the issue as to whether PAJA finds
application
in
casu
in
view of the fact that the CINPF is not an Organ of State. The
question therefore is whether the impugned decisions of the CINPF
fall within the definition as provided for in
s 1(b)
, which reads as
follows:
‘“
administrative
action” means any decision taken, or any failure to take a
decision, by –
(a)
… …
(b)
a natural or juristic
person, other than an organ of state, when exercising a public power
or performing a public function in terms
of an empowering provision,
which
adversely affects the rights of any person and which has a direct,
external legal effect, …’.
[39]
It was submitted on behalf
of the appellant members and NBC that the two decisions sought to be
reviewed in the review application,
constitute administrative action
as envisaged in section 33 of the Constitution of the Republic of
South Africa, 1996 (the Constitution),
and accordingly fall to be
reviewed and set aside in terms of the PAJA or the common law.
[40]
As correctly contended by Mr
Watt-Pringle SC, a Pension Fund is a private institution which may
exercise public power in certain
circumstances, and the conduct of
the Fund may, in these cases, be challenged as constituting
administrative action, either as
defined under PAJA, or under the
common law. Not all decisions of a pension fund constitute
administrative action. The question
whether the exercise of a
particular power by a private functionary amounts to an exercise of
public power or a public function
must be determined on a
case-by-case basis.
[41]
This matter specifically
concerns the termination of a suite of contracts with existing
service providers and the appointment of
new service providers, and
whether these decisions amount to an exercise of public power.
[42]
The
appellants contend that s 1(b) of PAJA is applicable for the simple
reason that pension funds are, for good reason, highly regulated
and
operate within the strictures of the four corners of the PFA and
other delegated legislation. In s 7D of the PFA, the duties
and
responsibilities of the Board of Trustees of a Pension Fund are set
out in detail and include a provisions that a board shall
ensure that
the rules and the operation and administration of the fund comply
with this Act, the Financial Institutions (Protection
of Funds)
Act
[9]
, and all other applicable
laws. Section 7D(2)(a), read with section 13B, of the PFA provides
that the Trustees may delegate the
administration of a pension fund
to an administrator, provided that that administrator is approved by
the Registrar of Pension
Funds (‘the Registrar’) and
remains compliant with the conditions for approval.
[43]
A good example of the strict
manner in which the administration of pension funds is regulated is a
Circular PF No 130 – Good
Governance of Retirement Funds –
issued by the Registrar of Pension Funds during 2007, which provides
in its preamble that
the assets of a retirement fund are administered
for the main purpose of providing the benefits promised in terms of
the registered
rules of that fund. And that ‘[t]he board of
management (sometimes referred to as trustees) therefore holds fund
assets in
trust for those persons who will ultimately benefit from
them’.
[44]
Under the heading ‘Approved
Service Providers’, paragraph 70 of the Circular provides as
follows:
‘
(70)
When selecting and appointing service providers the board should be
alert to possible
conflicts of interest in acceptance of advice ...
These conflicts of interest must be proactively identified and
disclosed. Acceptable,
workable policies and directives to deal with
such situations must be determined.'
[45]
It is so that the obligation
to administer a pension fund is a statutory one. So too are the
fiduciary duties of the pension fund
to its members and those of the
Trustees, as further evidenced by the provisions of the
Financial
Institutions (Protection of Funds) Act 28 of 2001
, expressly referred
to in
section 7D(f)
of the PFA, which regulates expressly the duties
of persons dealing with funds of, and with trust property controlled
by, financial
institutions.
[46]
For all of these reasons, I
am of the view that the power of the Trustees to delegate their
statutory obligation to properly administer
a pension fund, to an
external administrator, which is one both empowered and circumscribed
by Legislation, is a decision which
involves the exercise of public
power or the exercise of a public function. This is so because,
considering the definition of ‘administrative
action’ in
PAJA, a Pension Fund, being a juristic person, in appointing an
administrator, exercises such power ‘in
terms of an empowering
provision’, being the PFA and the regulations promulgated
thereunder. The term ‘empowering provision’
is broadly
defined as ‘a law, a rule of common law, customary law, or an
agreement, instrument or other document in terms
of which an
administrative action was purportedly taken’. In this matter,
the point is simply that the public has an interest
in the lawful
administration of pension funds, irrespective of whether they are
members of a particular pension fund or not. Pension
fund trustees
administer money in trust on behalf of members of the fund and are
carefully regulated and controlled by statute
and the Registrar.
[47]
Moreover, in my view, the
decisions have a direct, external legal effect and affects the rights
of members. Nothing more needs to
said about this requirement –
it is self-evident. The decisions have the potential to impact
materially on the right of members
to have their pension funds
properly and lawfully administered.
[48]
Accordingly,
I am of the view that the decisions sought to be reviewed and set
aside in the review application, constitute administrative
action as
defined in
section 1
of PAJA. This conclusion is consistent with a
number of decisions where courts have held that decisions of a
pension fund taken
in terms of
section 37C
of the PFA (which deals
with the paying out of benefits upon the death of a member)
constitute administrative action and are reviewable
under PAJA. See,
for example,
Titi
v Funds at Work Umbrella Provident Fund
[10]
,
in which Smith J held as follows at para 14:
‘
The
respondent, when acting in terms of the provisions of the Act and
administering the funds on behalf of its members, is exercising
a
public power. The decisions which it is empowered to take in terms of
s 37C of the Act, and in particular the power to effectively
override
the express wishes of its members, may conceivably affect members of
the public. Any decision made in pursuance thereof
and which could
negatively impact on members of the public would therefore be subject
to judicial scrutiny and review in terms
of the provisions PAJA.’
[49]
That brings me back to the
review of the two impugned Board decisions on the basis of PAJA and
the doctrine of legality, as well
as the primary submission on behalf
of the appellants that, on the basis of first principles, the bribery
of Messrs Dangazele,
Sema and Sithole is sufficient basis to set
aside both decisions, irrespective of whether those decisions are
reviewable.
[50]
As regards the latter issue
– the so-called ‘fraud unravels all’ principle –
there can be little doubt that
the bribery of these officials shows
that the termination of NBC's contract is inextricably tied to
Akani's appointment. NBC's
services were terminated to make way for
Akani. As contended, by the appellants, there can be no other
plausible reason for Akani
to have bought off the individuals that it
did.
[51]
It requires emphasising
that, in my view, the impugned decisions – irrespective of
whether they are reviewable on the basis
of the doctrine of legality
or in terms of PAJA or the common law – stand to be set aside
on the grounds that they were underpinned
by acts of fraud and
bribery. This in and of itself is a sufficient ground to set aside
the said decisions and would have cloaked
NBC with the necessary
locus
standi in iudicio
to
apply to the high court for a setting aside of the said decisions.
[52]
As
was held by the SCA in
Namasthethu
Electrical (Pty) Ltd v City of Cape Town
[11]
,
it is trite law that fraud is conduct which vitiates every
transaction known to the law. In affirming this principle, the SCA,
in
Esorfranki
Pipelines (Pty) Ltd and Another v Mopani District Municipality and
Others
[12]
,
referred
with approval to Lord Denning's dicta in
Lazarus
Estates Ltd v Beasley
[13]
,
when he said:
‘
No
court in this land will allow a person to keep an advantage which he
has obtained by fraud. No judgment of a court, no order
of a
Minister, can be allowed to stand if it has been obtained by fraud.
Fraud unravels everything. The court is careful not to
find fraud
unless it is distinctly pleaded and proved; but once it is proved it
vitiates judgments, contracts and all transactions
whatsoever . . .'.
[53]
Fraud unravels everything –
that is our law. And I have already found that Messrs Dangazele, Sema
and Sithole committed fraud
in that they received bribes from NFS
aimed at securing Akani’s appointment as a Fund Administrator
to CINPF. That appointment
required and resulted in the two impugned
decisions, which therefore need to be ‘unravelled’ as
being based on fraud
and bribery. For this reason alone, the
decisions stand to be set aside.
[54]
I reiterate that, because of
the fraud and the bribery, the two decisions ought to have been set
aside by the court
a
quo
.
[55]
Even
if I am wrong on this aspect – whether regarding the factual
conclusion or the application of the law – the decisions,
in my
view should still be reviewed and set aside on the basis of and under
the principle of legality, which is a fundamental principle
of our
law. Where an entity is accorded public power by law, it may act only
in accordance with those powers. If the entity acts
outside of those
powers, the action lacks legality and may be reviewed and set aside.
This was articulated clearly in the matter
of
Fedsure
Life Assurance Ltd and Others v Greater Johannesburg Transitional
Metropolitan Council and Others
[14]
,
which held as follows:
‘
It
seems central to the conception of our constitutional order that the
legislature and executive in every sphere are constrained
by the
principle that they may exercise no power and perform no function
beyond that conferred upon them by law.’
[56]
In making the decision to
give NBC notice of termination, the Board is constrained to act
lawfully. The Trustees can only act within
the four corners of the
PFA and the Rules of the CINPF and for the benefit of the Fund, when
passing any resolution, including
the one they purported to pass on
21 and 22 November 2019, in terms of which it was resolved that the
contracts with NBC would
be terminated. The same principles apply to
the Board's decision to appoint Akani, Novare and Moruba. In
addition, but for the
21 and 22 November 2019 resolution, the Board
would not have been in any position to appoint a new administrator,
consultant or
actuary.
[57]
When the Board makes a
decision to terminate the appointment of an administrator, it acts
not in its own interest, but in the interests
of the Fund. It (and
each member of the Board) is obliged to act in accordance with their
fiduciary duties and duties to act with
due diligence, independence
and impartiality in accordance with section 7C(2) of the PFA.
[58]
Where the Chairperson and
Deputy Chairperson of the Board are conflicted by them having
accepted, or having agreed to accept, payment
of a bribe in order to
pave the way for Akani's appointment, both they and the Board as a
decision-making body, are fatally compromised.
No lawful decision can
emerge from a Board whose members have been bribed to decide an
issue, not according to what they truly
believe to be in the best
interests of the CINPF, but in their own personal interests.
[59]
What is more, the
non-disclosure of their conflict of interest (and that of the
Principal Officer) constitutes fraudulent non-disclosure
to the
Board. Messrs Sema, Sithole and Dangazele were all present at the
Board meeting on 21 and 22 November 2019. Mr Sema, as
Chairperson led
the discussion on a report (the GFIA Report), which formed the basis
of the decision to terminate the relationship
between NBC and CINPF,
and the ensuing decision to terminate NBC's services. Mr Dangazele,
although not a Board member, steered
the discussion to the issue of
NBC's fees by raising questions on the issue. None of the compromised
office-bearers disclosed their
financial arrangements with Akani,
through NFS. The failure of Messrs Dangazele, Sema and Sithole to
disclose those facts to the
Board is highly material – there
can be no doubt about this.
[60]
For these additional reasons
– based on the principle of legality – I am of the view
that the Board’s decision
to give NBC notice of termination of
the contracts with the CINPF, not being a decision as contemplated by
the Rules of the CINPF,
was invalid and of no force or effect. They
therefore stand to be reviewed and set aside.
[61]
The doctrine of legality
requires, at the very least, that the exercising of the public powers
and functions conferred on the CINPF
must be
intra
vires
,
understood, exercised in good faith, and rational in both purpose and
process.
[62]
In terms of section 7C of
the PFA, the Board and each of its members are required to act with
due care, diligence and good faith
(section 70(b)) to avoid conflicts
of interest; (section 7C(c)); to act independently (section 7C(e));
to exercise a fiduciary
duty to members and beneficiaries in respect
of accrued benefits or any amount accrued to provide a benefit, as
well as a fiduciary
duty to the fund, to ensure that the fund is
financially sound and is responsibly managed and governed in
accordance with the rules
and this Act; (section 7C(f)); and to
comply with any other prescribed requirements (section 7C(g)).
[63]
In light of my factual
finding
supra
it cannot possibly be
said that the Board and the individual Trustees constituting the
Board complied with any of these prescripts.
Far from it. They have
failed to apply due diligence in that the Board acted on a
preliminary report and it has done so without
obtaining NBC's
response to any adverse findings in the report. The procurement
process leading to the appointment of Akani, Novare
and Moruba
Consultants was engineered to ensure that at least Akani was
appointed. in this regard too, there’s been a lack
of due
diligence, in contravention of section 7C of the PFA. Certain Board
members are in the pocket of Akani and have accordingly
failed to act
independently or to avoid a conflict of interest in relation to both
the termination of NBC's services and in the
appointment of Akani.
[64]
I reiterate that the
impugned decisions of the Trustees fall to be reviewed and set aside
under the doctrine of legality.
[65]
The first decision which the
appellants seek to review and set aside, is the decision of the CINPF
Board to terminate the suite
of agreements between the CINPF and NBC.
It has been submitted on behalf of the applicants that, in addition
to the aforegoing
grounds of review, there are further bases on which
this decision should be reviewed and set aside. Those include issues
relating
to the non-compliance by the Board of Trustees with public
procurement processes, which, according to the appellants, the CINPF
are bound to follow. Moreover, so the appellants contend, the
decision was
ultra
vires
the
empowering provision (namely the CINPF Rules), as there was a failure
by the Board to consult with the RACs and LAGs.
[66]
In view of my findings that
the first impugned decision stands to be reviewed and set aside on
the basis
inter
alia
of
the fraudulent conduct of certain members of the Board and in terms
of PAJA, I do not deem it necessary to deal with those aspects
further.
[67]
The second decision which
the appellants required the Court
a
quo
to
set aside and review was the decision to appoint Akani, Novare and
Moruba as fund administrators in the place of NBC. This decision
too,
so the appellants contend, stands to be reviewed and set aside on the
basis that same was tainted by the fraudulent and corrupt
conduct on
the part of three of the senior office bearers of the CINPF. Further
grounds of review exist, so the submissions are
continued, for the
review and setting aside of this decision.
[68]
Whilst I do not intend
dealing in detail with those submissions in light of my finding that
the second decision should be reviewed
and set aside on the basis of
the aforementioned fraud and corruption, I find myself in agreement
with same.
[69]
So, by way of an example,
there can be little doubt that CINPF's second decision to appoint
Akani, Novare and Moruba lacked procedural
fairness. The Trustees'
failed to ensure that they had before them the relevant information
necessary to make an informed decision
about the termination of the
NBC agreements. The decision is thus reviewable on the basis that the
Trustees failed to take into
consideration relevant considerations
(section 6(2)(e)(iii) of PAJA). This is so especially with regard to
the appointment of Akani,
which, by all accounts, was nothing other
than a sham aimed at avoiding a competitive tender process and to
exclude potential competitors
to Akani. There were also material
discrepancies in the Akani tender, such as its failure to provide a
letter from its auditors
stating that its business continuity and
disaster recovery plans are adequate for CINPF’s circumstances,
as required by the
bid conditions.
[70]
The procedure followed for
the appointment of Novare and Moruba was far simpler and it cannot be
said that that procedure suffered
from the same defect in the
appointment of Akani. It cannot be suggested, for instance, that
these appointments were tainted by
fraud and bribery – there
were no irregularities nor were the processes undertaken with
unseemly haste or professional bumbling.
There were however
shortcomings in that Novare was, for instance, unable to provide a
fee proposal due to the limited time afforded
to them to prepare a
tender. Moreover, Novare was appointed by the CINPF without any due
diligence being carried out by the time
of its appointment, and
without any discussion or agreement of the fees they would charge.
[71]
From the rule 53 record, it
appears that the procedure for the appointment of Moruba as the Fund
actuary is equally flimsy. No specifications
were provided to the
short-listed candidates, or even a description of the actuarial
services provided. As NBC explained, it was
important for the CINPF
to issue specifications on the actuarial services required because
the CINPF has a unique approach to accounting
for Fund expenses.
However, on 11 December 2019, the Board resolved to appoint Moruba
subject to a due diligence being undertaken
to the satisfaction of
the CINPF. On 9 February 2020, the Principal Officer issued a letter
of appointment to Moruba – notwithstanding
the fact that the
due diligence had not yet been carried out.
[72]
For all of these reasons, I
am of the view that the two decisions by the CINPF ought to have been
reviewed and set aside by the
court
a
quo
.
[73]
I interpose here to deal
with an aspect which, on my reading of the judgment of the court
a
quo
,
weighed heavily on that court’s mind. And that relates to
alleged improper and inappropriate conduct of NBC and whether
there
were grounds not to reappoint them.
[74]
In para 51 of the judgment
the court
a
quo
noted
that ‘[t]he Fund says that the termination of the contracts
with NBC was based on the following facts and circumstances’,
which are then listed as numbers (a) to (j). These relate, for
example, to the appointment and the ineffective use by NBC of asset
managers to the detriment of the CINPF and its assets and members;
the recommendation by NBC of other service providers to the
Fund, who
turn out to be inefficient and not properly qualified for the
appointments; poor service delivery by NBC to the CINPF,
as well as
the poor performance of the investments embarked upon by NBC; a
report by an auditing firm, Gobodo Forensic and Investigative
Accounting (GFIA), uncovered a string of problems, resulting in them
making a number of recommendations, including that fees charged
by
NBC were not market-related and therefore not in the best interest of
the Fund and that the Fund was over dependent on NBC.
[75]
At para 53 of the judgment,
the court
a
quo
then
concludes, relative to these issues, that the board of the CINPF was
anxious about the conduct of NBC in general, the treatment
it was
receiving from NBC, the impact of NBC's conduct on the investments of
the Fund, and about the fees it was being charged.
The court
a
quo
therefore
concludes that there can be no doubt that the anxieties and concerns
of the board bore substance, and that the board acted
prudently by
resolving to embark on the forensic investigation.
[76]
I do not consider that it is
for this court to decide on whether there is merit in the complaints
by the board against NBC, which
the court
a
quo
appears
to have accepted as valid. Nor do we express a view on whether the
alleged improper conduct on the part of NBC entitled
the board to
terminate the suite of contracts in terms of which NBC acted as the
CINPF’s Fund Administrator. The intention
is not to hold that
there is no merit in the criticism levelled against NBC. This
judgement deals only with the impropriety in
the process in terms of
which the appointment of NBC was terminated. It makes no findings as
to whether NBC misconducted itself,
thus entitling CINPF to terminate
its services as a Pension Fund Administrator.
[77]
Lastly, I need to deal with
the relief claimed by NBC that certain trustees be removed from their
positions as trustees.
[78]
On the basis of their
misconduct in relation to the bribes received by them from Akani,
Messrs Dangazele, Sema and Sithole, should
be removed, so NBC
contends, as principal officer and trustees. As indicated earlier on
in this judgment, Mr Dangazele, who was
the principal officer at the
relevant time, has since passed away and any relief granted against
him would be moot. No further
attention will therefore be given to
the relief claimed against Mr Dangazele, who is the second respondent
in this appeal.
[79]
Mr Watt-Pringle SC submitted
that, regardless of the existence of statutory powers conferred on
the Authority to remove trustees
and the principal officer of a
Pension Fund, this Court has the inherent power to remove any person
in a fiduciary position on
grounds of misconduct, which demonstrate
that that person is not fit and proper. Additionally, pursuant to
section 8 of PAJA, this
Court has the power, in addition to the
setting aside of the impugned decisions, to grant relief that is just
and equitable.
[80]
I have already indicated
that, in my view, the two impugned decisions should be reviewed and
set aside. The main reason for such
review is the fact that these
individuals misconducted themselves in that they fraudulently
accepted and received bribes from Akani
with a view to ensuring that
it is appointed as a Pension Fund Administrator. The effect of this
finding is an unavoidable conclusion
that Messrs Sema and Sithole had
failed in their fiduciary duties to the CINPF and that they are not
fit and proper to hold office
in a pension fund. This, in itself,
would justify their removal as trustees, to be replaced by the rest
of the Board in accordance
with the rules of the CINPF.
[81]
The point is that, as
trustees of the CINPF and as the leading figures on the Board
(Chairperson and Deputy Chairperson, respectively),
Messrs Sema and
Sithole accepted bribes from Akani via NFS, in order to influence
decisions of the CINPF to the detriment of the
CINPF and NBC, and to
the benefit of Akani, Novare and Moruba. I agree with the submission
on behalf of appellants that their conduct
was not only improper, but
also criminal.
[82]
They also failed to disclose
their conflicts of interest. They are clearly not fit and proper
persons to be Trustees. The PFA requires
that all trustees are fit
and proper persons. The duties of the Trustees to the fund are
governed both by the common law principles
and by statutory law,
notably section 7C of the PFA, which provides in the relevant parts
that the object of the Board is to direct,
control and oversee the
operations of a fund in accordance with the applicable laws and the
rules of the fund. In pursuing its
object, the board is enjoined to
take all reasonable steps to ensure that the interests of members in
terms of the rules of the
fund and the provisions of the PFA Act are
protected at all times. Moreover, members of the Board are required
to act with due
care, diligence and good faith.
[83]
Messrs
Sema and Sithole have clearly acted in breach of the duty not to
allow their personal interests to conflict with their duty,
in the
most egregious manner possible, by accepting payment from Akani of
what can only be regarded as bribes, in order to ensure
that NBC's
services were terminated so as to make way for Akani and so that
Akani was appointed. In doing so they have also committed
criminal
offences under the Prevention and Combatting of Corrupt Activities
Act 12 of 2004
[15]
.
[84]
Finally, I need to briefly
deal with a ‘moot point’ raised, almost in passing in his
updated practice note by Mr Maleka
SC, who appeared on behalf of the
first to twenty sixth respondents with Ms Kekana. In the practice
note the Court’s attention
was directed to the fact that
Akani’s mandate with the CINPF was terminated on 1 November
2021 and Momentum has since been
appointed as the Fund
administrators. This means, so the submission went, that the order
sought against Akani would have no practical
effect or outcome and
that the appeal could conveniently be disposed of on this ground
alone, in terms of
section 16(2)(a)(i)
of the
Superior Courts Act, 10
of 2013
.
[85]
Mr
Botha SC, who appeared for the appellant members together with Ms
Martin, contended that this issue is not properly before this
court
and for that reason alone, the point should be dismissed. I agree. In
Capitec
Bank Holdings Ltd and Another v Coral Lagoon Investments 194 (Pty)
Ltd and Others
[16]
,
the court held that the issue of mootness stands or falls on the case
made for it by the litigant claiming mootness. In casu,
no such case
in made out on behalf the respondents. For that reason alone, the
point of mootness should fail.
[86]
There may very well be other
reasons for the point to be rejected. In that regard the following
was said by Unterhalter AJA in
Capitec
:
‘
[19]
This court has a discretion to entertain the merits of an appeal,
even where the matter is moot. Where a case poses a legal
issue of
importance for the future that requires adjudication, that may
incline the court to hear the appeal. The appeal before
us, for the
reasons given, is of practical consequence. It is not moot. But even
if it were, the interpretation of clause 8.3 is
a legal issue of
consequence for the future of the parties' commercial relationship.
That would warrant the exercise of our discretion
to hear the merits
of the appeal. I accordingly decline to dismiss the appeal on the
basis of mootness.’
[87]
These
principles, in my view, finds application in the appeal before us. I
therefore reiterate that the point of mootness should
fail.
Conclusion
and Costs of Appeal
[88]
For all of these reasons the appeal must succeed
and the order of the court
a quo
should be replaced with one in terms of which the
impugned decisions are reviewed and set aside. The third and fourth
respondents
should also be removed as trustees of the CINPF.
[89]
The
general rule in matters of costs is that the successful party should
be given his costs, and this rule should not be departed
from except
where there are good grounds for doing so. See:
Myers
v Abramson
[17]
.
There
are no grounds in this case to depart from the ordinary rule that
costs should follow the result.
[90]
The appellants have urged this court to show its
displeasure with the conduct on the part of certain of the
respondents by awarding
punitive costs on the scale as between
attorney and client. I am not persuaded that a case has been made out
by any of the litigants
for a punitive costs order against any of the
other litigants. I therefore intend granting ordinary costs on the
scale as between
party and party. The complexity of the matter does
however, in my view, warrant costs to include the costs of two
counsel, with
one being a Senior Counsel.
[91]
The first to twenty seventh respondents should
therefore pay the appellants’ costs of the appeal.
Order
[92]
In the result, the following order is made: -
(1)
The appellants’ appeal against the order of
the court
a quo
is
upheld, with costs.
(2)
The order the court
a
quo
is set aside and in its place is
substituted the following: -
‘
(a)
The
decision of the first to twenty-sixth respondents taken on 21 and 22
November 2019 to terminate the suite of agreements with
the ninth and
tenth applicants be and is hereby reviewed and set aside.
(b)
The decision of the first to third
respondents to appoint the twenty-seventh to twenty-ninth respondents
as the administrators,
consultants and actuaries to the first
respondent, be and is hereby reviewed and set aside.
(c)
The third and fourth
respondents are hereby removed as trustees of the CINPF and its Board
of Trustees be and is hereby directed
to replace those trustees in
terms of and in accordance with the Rules of the CINPF.
(d)
The first to
twenty-seventh respondents, jointly and severally, the one paying the
other to be absolved, shall pay the costs of
this review application,
inclusive of the costs of Part A and the costs of the application to
join the thirty-first respondent,
all such costs to include the costs
consequent upon the employment of two counsel, one being a Senior
Counsel.’
(3)
The first to twenty-seventh respondents, jointly
and severally, the one paying the other to be absolved, shall pay the
appellants’
costs of the appeal, including the costs of the
application for leave to appeal to the court
a
quo
and the costs of the application
for leave to appeal to the Supreme Court of Appeal, all such costs to
include the costs consequent
upon the employment of two Counsel, one
being a Senior Counsel.
L R ADAMS
Judge of the High
Court
Gauteng
Division, Johannesburg
HEARD
ON: 21
st
February 2022 – in a ‘virtual hearing’ during a
videoconference on the
Microsoft
Teams
.
JUDGMENT
DATE: 29
th
June 2022 – judgment handed
down
electronically
FOR
THE FIRST TO EIGHTH APPELLANTS: Adv Adrian Botha SC,
together
with Advocate Samantha Martin
INSTRUCTED BY:
Knowles Husain Lindsay Inc, Sandton.
FOR
THE NINTH AND TENTH APPELLANT: Adv C E Watt-Pringle SC, with
Advocate
K S Maclean.
INSTRUCTED BY:
Shepstone & Wylie Attorneys, Sandton
FOR
THE FIRST TO TWENTY SIXTH
RESPONDENTS:
Adv I V Maleka SC,together with Advocate N B Kekana
INSTRUCTED
BY: T D Mashele
Incorporated, Northriding,
Randburg,
FOR THE TWENTY SEVENTH
RESPONDENT:
Adv A Franklin SC, together with Advocate P McNally SC
and
Advocate B L Manentsa
INSTRUCTED BY:
Webber Wentzel, Sandton.
FOR THE TWENTY EIGHTH TO
THIRTIETH RESPONDENT:
No Appearance
INSTRUCTED
BY:
No appearance
FOR THE THIRTY FIRST
RESPONDENT: Adv Jason Mitchell
INSTRUCTED
BY: M F Jassat Dhlamini Incorporated,
Johannesburg
[1]
The
judgment of the court
a
quo
is
reported as
Moropa
and Others v Chemical Industries National Provident Fund and Others
2021
(1) SA 499 (GJ).
[2]
Solidarity
and Another v Black First Land First and Others
[2021]
ZASCA 26
(24 March 2021) at para 10;
[3]
P
M obo T M v Road Accident Fund
(1175/2017)
[2019] ZASCA 97
;
[2019] 3 All SA 409
(SCA);
2019 (5) SA 407
(SCA) at
para 14
[4]
Pension
Funds Act 24 of 1956
;
[5]
Giant
Concerts CC v Rinaldo Investments (Pty) Ltd
2013
(3) BCLR 251
(CC) at para 5;
[6]
Plascon-Evans
Paints Ltd v Van Riebeeck Paints (Pty) Ltd
[1984] ZASCA 51
;
1984
(3) SA 623
(A) at 635C;
Buffalo
Freight Systems (Pty) Ltd v Crestleigh Trading (Pty) Ltd and Another
2011
(1) SA 8
(SCA) at paras 19 and 20;
[7]
National
Director of Public Prosecutions v Zuma
[2009] ZASCA 1
;
2009 (2) SA 277
(SCA)
at para 26;
[8]
Promotion
of Administrative Justice Act 3 of 2000
;
[9]
Financial
Institutions (Protection of Funds) Act, 2001 (Act 28 of 2001);
[10]
Titi
v Funds at Work Umbrella Provident Fund
[2011]
JOL 23125 (ECM);
[11]
Namasthethu
Electrical (Pty) Ltd v City of Cape Town
2020
JDR 1279 (SCA);
[12]
Esorfranki
Pipelines (Pty) Ltd and Another v Mopani District Municipality and
Others
[2014]
ZASCA 2
;
[2014] 2 All SA 493
(SCA) para 11;
[13]
Lazarus
Estates Ltd v Beasley
[1956]
1 QB (CA) at 712;
[14]
Fedsure
Life Assurance Ltd and Others v Greater Johannesburg Transitional
Metropolitan Council and Others
[1998] ZACC 17
;
1999
(1) SA 374
(CC);
1998 (12) BCLR 1458
(CC) at para 58;
[15]
The
Prevention and Combatting of Corrupt Activities Act 12 of 2004;
[16]
Capitec
Bank Holdings Ltd and Another v Coral Lagoon Investments 194 (Pty)
Ltd and Others
2022
(1) SA 100 (SCA);
[17]
Myers
v Abramson
,1951(3)
SA 438 (C) at 455
sino noindex
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