THE SUPREME COURT OF APPEAL OF SOUTH AFRICA

JUDGMENT

Reportable

Case No: 580/2011

In the matter between

INVESTEC EMPLOYEE BENEFITS LIMITED
Appellant

and

STEPHANUS JOHANNES MARAIS

First Respondent
VANTAGE PENSION ADMINISTRATORS
Second Respondent
(PTY) LIMITED
VUYANI NGALWANA N.O.

Third Respondent

Neutral citation: Investec Employee Benefits Ltd v Marais & others
(580/11) [2012] ZASCA 99 (1 June 2012)

Coram:
Farlam, Cloete, Malan et Wallis JJA et McLaren AJA

Heard:
17 May 2012

Delivered: 1 June 2012

Summary: Pension Funds – Pension Funds Adjudicator not
empowered to extend time limits laid down in Prescription Act 68 of
1969 – Prescription Act applies to claims forming subject matter of
complaints to Adjudicator – First respondent’s claim prescribed
before his complaint lodged with the Adjudicator.

___________________________________________________________

ORDER
___________________________________________________________

On appeal from:  North Gauteng High Court, Pretoria (Poswa J sitting
as a court of first instance):

1. The appeal succeeds with costs.
2. The order of the court a quo is set aside and replaced with an order in
the following terms:

‘1. The applicant’s failure to bring its application in the period laid down
in section 30P (1) of the Pension Funds Act 24 of 1956 is condoned.
2. The determination and ruling given by the third respondent on 11 July
2005 in the matter of Stephanus Johannes Marais v Vantage Pension
Administrators, Investec Employee Benefits Limited, Vantage Preserver
Provident Fund & Vantage Preserver Pension Fund (Reference number
PFA/GA/1048/04/Z/VIA) is set aside and replaced with the following
ruling:
“The complaint is dismissed.”’

___________________________________________________________

JUDGMENT
___________________________________________________________

FARLAM JA (Cloete, Malan et Wallis JJA et McLaren AJA
concurring):

[1] In this matter the appellant, Investec Employee Benefits Limited,
appeals against the whole of a judgment and order, including the order as
to costs, granted on 24 May 2010 by Poswa J sitting in the North Gauteng
High Court, Pretoria. In that judgment he refused to grant the appellant
the relief it had sought in an application in terms of s 30P of the Pension
Funds Act 24 of 1956 to set aside a determination and ruling given on 11
July 2005 by the third respondent, in his capacity as the Pension Funds
Adjudicator, in the favour of the first respondent, Dr Stephanus Johannes
Marais. (In what follows and I refer to the Pension Funds Act as ‘the
Act.’) Leave to appeal to this Court was granted by Van der Merwe DJP
on 11 August 2011.

[2] The first respondent was an investor member in two funds, the
Vantage Preserver Provident Fund and the Vantage Preserver Pension
Fund, which were administered by the second respondent, Vantage
Pension Administrators (Pty) Ltd, and underwritten by the appellant (then
known as Fedsure Life Assurance Ltd).

[3] In October 1996 the first respondent made a single premium
investment in the Vantage Preserver Provident Fund and later, in April
1999, he made another single premium investment in the Vantage

Preserver Pension Fund. In what follows I shall refer to these funds as
‘the provident fund’ and ‘the pension fund’.

[4] On 12 October 2000 the first respondent sent the second
respondent a letter, which contained the following:
‘Hereby confirmation that it is my intention to withdraw the total value from both the
above preservation funds [ie the provident fund and the pension fund].
Please send the form B to Francois Koekemoer… As PricewaterhouseCoopers will
assist us in obtaining the tax directives.’

[5] After receiving this letter the appellant applied on 3 November
2000 for the necessary tax directive in respect of the withdrawal. Such a
directive sets out the amount of tax to be deducted from the benefit
payable to the beneficiary and must be obtained and complied with before
any payment can be made.

[6] On 9 November 2000 a letter was addressed to the second
respondent on behalf of the first respondent, the material portion of which
reads as follows:
‘We have received the form B and [are] currently assisting the member to obtain the
tax directives for withdrawal of the funds. It is…[the first respondent’s] intention only
to make the actual withdrawal (receive the funds) on 6 January 2001.
Therefore, no actual payment should be made before that date, even on receiving of
the directives before that date.’

[7] On 7 December 2000, the appellant, which had not yet received the
tax directives it had requested, wrote to the South African Revenue
Services directives department requesting a response, whereafter it

received various directives relating to the first respondent’s withdrawal
benefits.

[8] On 1 February 2001 the appellant declared interim bonuses of 9 per
cent for the year ended 31 December 2000 and 6 per cent for the year
ended 31 December 2001. (As was explained in a letter sent by the
appellant to the first respondent, an interim bonus is used for benefit
calculations until the actual bonus is declared.)

[9] On 15 February 2001 the first respondent instructed the second
respondent to arrange for payment of his withdrawal benefit from the
pension fund on or before 28 February 2001.

[10] On 26 February 2001 the first respondent sent the appellant a letter
in which he referred to his request for withdrawal and stated that in the
light of an incorrect directive by the South African Revenue Services he
requested that payment ‘be held back until further notice’ and that ‘the
monies be kept on investment.’

[11] In March 2001 the appellant declared a 0 per cent bonus for the
year ended 31 December 2000 and revised the interim bonus for the year
ended 31 December 2001 to 0 per cent. According to the founding
affidavit deposed to by the chief executive officer of the appellant, this
was due to the fact that the appellant’s underlying investment returns
were not performing as well as had originally been expected.

[12] The appellant contended that in consequence of this the first
respondent’s withdrawal benefits reduced in value. The quoted value of
the pension fund benefits as at 31 January 2001 was R4 949 558.21 while
their value as at 31 May 2001 was R4 487 329.59 and the quoted values
of the provident fund benefits as at 31 January 2001 and 31 May 2001
were R99 437.05 and R90 151.01 respectively.

[13] After the first respondent had addressed a query to the appellant
regarding the reduction in value of his withdrawal benefit calculations,
the appellant wrote to him on 27 June 2001 and explained the basis on
which the reduced calculations as at 31 May 2001 had been arrived at. It
was stated that the figures as at 30 January 2001 had been based on the
interim bonuses while the figures as at 31 May 2001 were based on the
declared bonuses.

[14] On 3 July 2001, the first respondent instructed the appellant to
effect payment of his withdrawal benefits. He followed this up with a
letter dated 11 July 2001 in which he set out his contentions on the issues
in dispute and stated that he was of the opinion that the appellant should
pay him ‘the amounts indicated effective 31 January 2001 [ie R4 949
558.21 in respect of the pension fund and R99 437.05 in respect of the
provident fund] plus a market related interest (9 per cent) to date of
payment’.

[15] On 25 and 31 July 2001 the appellant paid to the first respondent
his withdrawal benefits as calculated by it on the footing that he had
withdrawn on 31 May 2001 and in accordance with the values and tax
directives at that date. During the period from 3 July 2001 to 14

September 2001 various letters were exchanged between the first
respondent and the appellant and its attorneys. In the last of these letters,
a letter sent by the appellant’s attorneys to the first respondent on 14
September 2001, it was recorded that a dispute had arisen between the
appellant and the first respondent regarding his withdrawal benefit from
the pension fund and the provident fund. The letter continued:
‘In terms of the rules of the Funds, disputes which arise between members of the
Funds and our client are required to be resolved by way of arbitration.
We record that our client has, in their letter to you dated 10 September 2001,
consented, and invited you, to participate in an arbitration in terms of the commercial
rules of the Arbitration Foundation of South Africa in order to resolve the dispute.’

[16] The appellant heard nothing further from the first respondent until
the end of August 2004 when it learnt that the first respondent had on 20
July 2004 lodged a complaint, purportedly in accordance with the
provisions of s 30A of the Pension Funds Act 24 of 1956, as amended,
with the third respondent.

[17] The basis of the complaint, which was sent to the third respondent
without its being lodged previously with the funds, as required by s 30
A(l) of the Act, was that the withdrawal benefits paid to the first
respondent by the appellant were R471 515.00 less than the total of the
amounts quoted to him as at 31 January 2001, the date on which,
according to the complaint, he decided to withdraw the benefits. The
relief he requested from the third respondent was payment of the amount
of R471 515, plus interest from 1 February 2001.

[18] In its initial response to the third respondent dated 17 September
2004 the appellant contended that the complaint had been lodged outside
the time period set out in s 30I of the Act (ie, because the act or omission
to which the complaint related had occurred more than three years before
the complaint was received by the third respondent). The appellant also
contended that the first respondent had failed to show any cause why the
time period should be extended.

[19] Dealing with the merits of the complaint, the appellant, inter alia,
referred to the history of the matter and contended that the complaint was
without merit.

[20] In a further letter sent to the third respondent on 2 June 2005 the
appellant raised the further contention that the first respondent’s claim
had prescribed. The following was said:
‘We point out that the date upon which the Complainant’s claim was finally rejected
has no bearing on when prescription starts to run. Prescription on a debt begins to run
as soon as the debt is due and the creditor should reasonably have knowledge of the
identity of the debtor and the facts from which the debt arises.

If the complainant withdrew from the Funds on 31 March 2001, [presumably 31 May
2001 was intended], then that is the date upon which the debt became due and
prescription commenced. The Complainant, in addition, records in writing the details
of his dispute and intention to take the matter to arbitration as far back as 11 July
2001.’
In a footnote the appellant added the following:
‘There is, in addition, correspondence reflecting the existence of the dispute dated
June 2001.’

[21] In his determination and ruling on 11 July 2005 the third
respondent upheld the first respondent’s complaint. He condoned the late
lodgement of the complaint and held that the first respondent’s right to
the benefits accrued when he notified the appellant of his intention to
withdraw from the funds and that ‘the relevant date insofar as it relates to
the calculation of [the first respondent’s] withdrawal values is 12 October
2000’. He accordingly held that the interim bonus rates applied and
ordered the appellant ‘to calculate [the first respondent’s] withdrawal
benefits in both funds on the basis of the interim bonus rate declared for
2000 at 9 per cent’ and to pay the first respondent the benefits so
computed (less amounts already paid and deductions in terms of sections
37A and 37D of the Act) plus interest at the rate of 15.5 per cent per
annum, reckoned from 1 August 2001. The third respondent said nothing
in his determination about the 6 per cent interim bonus declared for the
year ended 31 December 2001, but in view of the conclusion to which I
have come that his whole determination must be set aside it is not
necessary to deal further with this aspect.

[22] The third respondent did not deal in his determination with the
point raised by the appellant in its letter of 2 June 2005 that the first
respondent’s claim had prescribed because, at the latest, prescription
began to run on 11 July 2001.

[23] Being aggrieved by this determination the appellant applied on 23
August 2005 in terms of s 30P of the Act to what was then the Transvaal
Provincial Division of the High Court, inter alia, for an order setting
aside the third respondent’s determination and ruling and replacing it with
the following:

‘The complaint is dismissed.’
Because the application was brought one day late the appellant asked for
condonation therefor.

[24] In the founding affidavit, which was deposed by the appellant’s
chief executive officer, the determination and ruling were attacked on
various grounds, viz:
(a) as the complaint was lodged with the third respondent more than three
years after the act or omission to which the complaint related, the third
respondent was precluded from dealing with it because no good cause had
been shown for him to condone the lateness;
(b) as the complaint was lodged with the third respondent more than three
years after the alleged debt became due the third respondent was also
precluded from dealing with it because the first respondent’s claim had
prescribed;
(c) because the determination and ruling, even if it were correct, ought to
have been directed not at the appellant but at the funds;
(d) because the complaint was not submitted in accordance with the
provisions of the Act and, more particularly, s 30A thereof; and
(e) because the third respondent wrongly determined the date of the first
respondent’s withdrawal from the funds, for the purposes of his ruling, as
12 October 2000.

[25] The case came before Poswa J in March 2006. In the judgment
delivered by him in May 2010 he held, at the outset, that the application
had to fail because it was brought out of time (one day late) and the court
had, so he held, no power to condone the late filing of the application. He
also held that, even if condonation could be granted, the application had

to fail because in his view the grounds on which the appellant sought to
attack the determination and ruling were not correct. The learned judge’s
decision that he had no power to grant the appellant condonation for the
late filing of the application has been overtaken by the decision of this
Court in Samancor Group Pension Fund v Samancor Chrome 2010 (4)
SA 540 (SCA), in which it was held (at 545F-G) that the high court is
entitled to condone non-compliance with statutory time limits such as the
one presently relevant under s 30P(1) of the Act. The first respondent has
conceded that the late launching of the appellant’s application before the
high court should have been condoned.

[26] Before I proceed to discuss whether the appellant succeeded in
establishing that the third respondent’s determination and ruling should
be set aside and replaced with that proposed by the appellant, it is
appropriate to set out those sections of the Act, as they were worded at
the relevant time, which are material. They are all contained in Chapter
VA of the Act, which was inserted by s 3 of Act 22 of 1996 and which is
headed CONSIDERATION AND ADJUDICATION OF COMPLAINTS.
In my view the relevant sections are sections 30A, 30B, 30H(3), 30I,
30M, 30O(1) and 30P.
They read as follows:
‘30A Submission and consideration of complaints –
(1) Notwithstanding the provisions of the rules of any fund, a complainant shall have
the right to lodge a written complaint with a fund or an employer who participates in a
fund.
(2) A complaint so lodged shall be properly considered and replied to in writing by
the fund or the employer who participates in a fund within 30 days after the receipt
thereof.
(3) If the complainant is not satisfied with the reply contemplated in subsection (2), or
if the fund or the employer who participates in a fund fails to reply within 30 days

after the receipt of the complaint the complainant may lodge the complaint with the
Adjudicator.

30B Establishment of Office of Pension Funds Adjudicator –
(1) There is hereby established an office which shall be known as the Office of the
Pension Funds Adjudicator.
(2) The functions of the Office shall be performed by the Pension Funds Adjudicator.
30H Jurisdiction and prescription –
…
(3) Receipt of a complaint by the Adjudicator shall interrupt any running of
prescription in terms of the Prescription Act, 1969 (Act No 68 of 1969), or the rules of
the fund in question.

30I Time limit for lodging of complaints – (1) The Adjudicator shall not investigate
a complaint if the act or omission to which it relates occurred more than three years
before the date on which the complaint is received by him or her in writing.
(2) If the complainant was unaware of the act or omission contemplated in subsection
(1), the period of three years shall commence on the date on which the complainant
became aware or ought reasonably to have become aware of such occurrence,
whichever occurs first.
(3) The Adjudicator may on good cause shown or of his or her own motion –
(a)
either before or after expiry of any period prescribed by this Chapter, extend
such period;
(b)
condone non-compliance with any time prescribed by this Chapter.

30M. Statement by Adjudicator regarding determination – (1) After the
Adjudicator has completed an investigation, he or she shall send a statement
containing his or her determination and the reasons therefor, signed by him or her, to
all parties concerned as well as to the clerk or registrar of the court which would have
had jurisdiction had the matter been heard by a court.

30O. Enforceability of determination – (1) Any determination of the Adjudicator
shall be deemed to be a civil judgment of any court of law had the matter in question

been heard by such court, and shall be so noted by the clerk or the registrar of the
court, as the case may be.

30P Access to court – (1) Any party who feels aggrieved by a determination of the
Adjudicator may, within six weeks after the date of the determination, apply to the
division of the Supreme Court which has jurisdiction, for relief, and shall at the same
time give written notice of his or her intention so to apply to the other parties to the
complaint–
(2) The division of the Supreme Court contemplated in subsection (1) shall have the
power to consider the merits of the complaint in question, to take evidence and to
make any order it deems fit.’

[27] In view of the fact that I have come to the conclusion that the
appellant’s contention, that the first respondent’s claim for payment of the
amounts allegedly incorrectly deducted from the benefits to which he was
entitled had prescribed, is correct, it is unnecessary for me to deal with
the appellant’s other contentions.

[28] It is clear from s 30H(3) of the Act that the Prescription Act 68 of
1969 applies to claims of the nature with which we are concerned. That is
why the receipt of a complaint by the third respondent will interrupt
prescription in terms of the Prescription Act. The use of the word
‘interrupt’ indicates that prescription would otherwise continue running in
respect of the complaint referred to.

[29] The third respondent’s power under s 30I(3) to extend periods and
to condone non-compliance with time limits is restricted to periods and
time limits prescribed by the Act. Although there is a similarity between
s 12(3) of the Prescription Act and s 30I of the Act, the sections must not

be conflated The Acts serve different and discrete functions. The
Adjudicator’s powers under the Act do not extend to the provisions of the
Prescription Act: cf Premier Western Cape v Lakay 2012 (2) SA 1 (SCA)
paras 7 and 10.

[30] It was contended on behalf of the first respondent that on a proper
construction of the Act the Prescription Act does not apply to complaints
received by the third respondent. Reference was made to s 16(1) of the
Prescription Act which provides that the provisions of chapter 3 of that
Act are to apply to any debt arising after the commencement of the Act,
‘save insofar as they are inconsistent with the provisions of any Act of Parliament
which prescribes a specified period within which a claim is to be made or an action is
to be instituted in respect of a debt or imposes conditions on the institution of an
action for the recovery of a debt.’

[30] In my opinion this subsection does not assist the first respondent
because s 30I of the Act is not inconsistent with the Prescription Act. A
claim which is the subject of a complaint to the Adjudicator and which
has not prescribed (because, for example, the creditor is under an
impediment), will still have to be lodged in the period prescribed in s 30I
and may not be considered by the Adjudicator unless he or she grants an
extension in terms of s 30I(3) to enable him or her to investigate the
complaint. Totally different language would, however be required if it
was the intention of the legislature to empower the Adjudicator to extend
a period of prescription which has already run its course and thus to
deprive an erstwhile debtor against whom a claim has been extinguished
of its right to plead prescription.

[32] In the present case it is in my view clear that whatever claim the
first respondent may have had against the appellant has prescribed. I do
not agree with the contention advanced by his counsel that prescription
only began running when he received payment of a portion of the amount
claimed by him at the end of July 2001. If he was entitled to claim the full
amount from the appellant, the corresponding debt owed to him by the
appellant is deemed, in terms of s 12(3) of the Prescription Act, to have
been due when he had ‘knowledge of the identity of the debtor and of the
facts from which the debt [arose]’. The identity of the debtor was clear
and the relevant facts were all set out in the appellant’s letter of 27 June
2001. It follows that prescription was already running at least from the
time when he received that letter. It is thus clear that prescription started
to run in respect of his claim more than three years before he lodged his
complaint with the third respondent which would have interrupted
prescription. His claim, if he had one, accordingly prescribed before his
complaint was lodged. It follows that the appeal must succeed on this
point.

[33] I mentioned earlier that the judgment in the court a quo was
delivered in May 2010, that is to say, over four years after the matter was
argued and judgment reserved. Such delay, which is not explained in the
judgment, is totally unacceptable. See Exdev (Pty) Ltd v Pekudei
Investments (Pty) Ltd 2011 (2) SA 282 (SCA) paras 23, 24 and 25. The
delay in this case was much longer than the delay in that case. In fairness
to the judge it must be pointed out that in the judgment granting leave to
appeal to this court, which was delivered by Van der Merwe DJP,
reference is made to the fact that the judge had been ‘on sick leave for a
considerable period of time’. Presumably at least part of the delay was
caused thereby.

[34] The following order is made:
1. The appeal succeeds with costs.
2. The order of the court a quo is set aside and replaced with an order in
the following terms:
‘1. The applicant’s failure to bring its application in the period laid down
in section 30P (1) of the Pension Funds Act 24 of 1956 is condoned.
2. The determination and ruling given by the third respondent on 11 July
2005 in the matter of Stephanus Johannes Marais v Vantage Pension
Administrators, Investec Employee Benefits Limited, Vantage Preserver
Provident Fund & Vantage Preserver Pension Fund (Reference number
PFA/GA/1048/04/Z/VIA) is set aside and replaced with the following
ruling:
“The complaint is dismissed.”’

_________________

IG FARLAM

JUDGE OF APPEAL

Appearances:
For Appellant

:
B Berridge SC

Instructed by:
Werksmans Attorneys c/o Brazington
Shepperson & McConnell, Pretoria

Symington & De Kok, Bloemfontein

For First Respondent
:
PJJ de Jager SC (with him R Strydom)

Instructed by:

Surita Marais Attorneys, Pretoria

E. G. Cooper Majiedt Inc., Bloemfontein