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02/12/2005 Case No: 15041/2002 Unreportable

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02/12/2005 Case No: 15041/2002 Unreportable /SG IN THE HIGH COURT OF SOUTH AFRICA (TRANSVAAL PROVINCIAL DIVISION) DATE: 02/12/2005 CASE NO: 15041/2002 UNREPORTABLE In the matter between: MARK SHAW PLAINTIFF And THE GOVERNMENT EMPLOYEES PENSION FUND DEFENDANT JUDGMENT PATEL, J A. Introduction [1] The plaintiff issued summons against the defendant for payment of his pension gratuity which was payable to him upon his resignation on 31 May 2000. The latter’s defence is that it paid the plaintiff’s pension benefit to the South African Revenue Services (“SARS”) and the South African Police Services (“SAPS”) in terms of section 21(3) of the Government Employees Pension Law (Proclamation 21 of 1996). [2] The parties agreed to certain common cause facts between them and that certain questions of law should be determined separately 2 from other issues and that further proceedings should be stayed until such questions have been decided upon. B. The agreed facts [3] The plaintiff was employed by the SAPS from 1 April 1990 to 31 May 2000. During his employment, he was obliged to become a member and contribute to the Government Service Pension Fund which later became known as the Government Employees’ Pension Fund (“the fund”). He contributed to the fund as prescribed and the SAPS contributed to the fund on the plaintiff’s behalf as required by section 17 of the Government Employees Pension Law, 1996. At all material times, the plaintiff was a member of the SAPS, and held the rank of Sergeant. At the time of the termination of his employment he had been a member of the SAPS for 10 years and 26 days. [4] On or about December 1996, the plaintiff as a member of SAPS arrested one David Moffat Maphumulo who was causing a disturbance at Crocworld. During the arrest, Maphumulo bit the plaintiff’s hand and refused to release it. The latter contends that he was obliged to use force to remove Maphumulo’s bite and hit him on the head injuring his eye. This, according to the plaintiff 3 was the least violent manner in which that he could extricate himself from Maphumulo’s bite. However, the defendant has no knowledge of the correctness of this assertion. [5] Mr Maphumulo laid a criminal complaint against plaintiff and the Director of Public Prosecutions declined to prosecute. Maphumulo was charged with resisting arrest, assault on police officer and other charges and was duly convicted. However, during or about July 1997, Maphumulo, instituted civil action against the Minister of Safety and Security, in the magistrate’s court for the District of Umzinto, at Scottburgh, under case number 1005/97. The plaintiff was not cited as a party to the civil proceedings and no relief was sought against him. Subsequently the plaintiff was brought under the impression by his Unit Commander that he was a party to the proceedings and was instructed to sign the Undertaking sometime in July 1997. This was ostensibly done in accordance with Treasury Instructions W3.5.2. [6] The civil matter was set down for trial and the plaintiff was called to court by the representative for the Minister of Safety and Security. On the day of trial the matter was settled, without consultation with or the knowledge of the plaintiff. Although he 4 was at court, he was simply advised that he could leave sine, as the matter was over. At all times the plaintiff denied his guilt to the criminal complaint or assume any liability in the civil action. Subsequently, SAPS, without the plaintiff’s knowledge or consent, paid as settled amount including the taxed costs to Maphumulo’s his attorneys or to Maphumulo himself. [7] The plaintiff then resigned from his services with SAPS and his last day of service was 31 May 2000. When he was informed that his pension benefits were not to be paid to him, as a result of the settlement in the civil action, and more specifically based on the undertaking he signed in July 1997. The plaintiff was also advised by his Unit Commander to approach the State Attorneys in order to make an offer of payment of affordable instalments, which would then cause the release of his pension benefits to him. He was unable to litigate because of his financial circumstances and merely submitted such an offer through the Office of the State Attorney (KwaZulu-Natal) in September 2000 on the understanding that his pension benefits would be paid to him if the offer was accepted. The offer was not accepted and the pension benefits were not paid out to the plaintiff. 5 [8] The National Treasury: Pensions Administration (formerly the Department of Finance: Chief Directorate Pensions Administration) is responsible for the administration of the Government Employees Pension Fund (the defendant). The defendant is a so-called “defined benefit fund”, that is where benefits are based on the members’ final salary and years of pensionable service (as defined in the Proclamation and the Rules), multiplied by a prescribed factor. The defendant did not maintain updated records of members’ salary and other personal information and simply relied on participating employers to inform the defendant thereof on a prescribed form upon termination of a member’s service. [9] After the plaintiff’s resignation from SAPS, the defendant received certain prescribed documents from SAPS on 11 October 2000. These were Z102 document completed by SAPS on 6 October 2000, and indicating a debt to the State or the employer amounting to R110 544.94; Z864 document completed by the plaintiff and copy of plaintiff’s identity document. The defendant also requested proof from the SAPS regarding the debt referred to in item 22 of the Z102 form and received from the SAPS, on 23 March 2001, a copy of first page of a letter from the Area 6 Commissioner Loss Management to the Directorate Support Services indicating the background of the claim and a report of debt to debtor section indicating the calculation of the debt. [10] The defendant considered the documentation received to be sufficient proof of the debt as indicated in item 22 on the Z102 document. It did not undertake any enquiries into the merits and validity of the debt, since it is not concerned with the internal procedures of participating employers. The plaintiff’s pension benefit, being a gratuity, was calculated in accordance with rule 14.4.1 of the rules of the defendant, amounting to R55 390.28. The rules of the Pension Fund stipulate that the pension benefits of such a member can only be withheld in the circumstances provided for in section 21 of Proclamation 21 of 1996. [11] The defendant avers that it was entitled to pay the pension benefits of the plaintiff to the SAPS in terms of the provisions of section 21(3)(a) or section 21(3)(c) of the Proclamation. Consequently, it elected to pay the plaintiff’s resignation benefits in the amount of R2 505.07 to SARS and the balance to the SAPS in terms of section 21(3)(a) or (c) of the Proclamation. 7 [12] This Court is asked to determine following questions of law: (a) Whether the documents received by the defendant from the South African Police Service, as referred to in the statement of agreed facts, were sufficient in themselves and from the face of them to establish the existence of a debt owing by the plaintiff to the South African Police Services as envisaged in section 21(3)(a) or (c) of Proclamation 21 of 1996; (b) Whether the defendant was entitled to rely on the documentation as proof of the debt allegedly owed by the plaintiff to the South African Police Services or whether there was an obligation on the defendant to make its own enquiries into the existence of such a debt and, if so, the extent of the investigations required to be undertaken by the defendant; (c) Whether payment made by the defendant to the South African Police Services constituted a valid payment of the gratuity owed by the defendant to the plaintiff in the event of it being established that as matter of fact there was no debt 8 as envisaged by section 21(3) owed by the plaintiff to the South African Police Services. (d) On whom does the onus rest to prove the existence or otherwise of a valid debt for the purpose of section 21(3) and do the findings on the first two questions affect the incidence of the onus ab initio or at any stage. (e) Whether the plaintiff, alternatively the defendant, is under any obligation to join the South African Police Services to these proceedings. C. Section 21(3) of the Proclamation. [13] Section 21 of Proclamation 21 of 1996 provides: “Prohibition on cession and attachment of benefits (1) No benefit or right in respect of a benefit payable under this Act shall be capable of being assigned or transferred or otherwise ceded or of being pledged or hypothecated or, save as is provided in section 26 or 40 of the Maintenance Act, 1998, and section 7(8) of the Divorce Act, 1979 (Act 70 of 1979), be liable to 9 be attached or subjected to any form of execution under a judgment or order of a court of law. (2) If any member, pensioner or beneficiary attempts to assign or transfer or otherwise cede or to pledge or hypothecate any benefit to which he or she is entitled under this Law or any right in respect of such benefit, payment of such benefit to such member, pensioner or beneficiary may be withheld, suspended or discontinued if the Board so directs: Provided that the Board may direct that such benefit or part thereof shall be paid to one or more of the dependants of such member or pensioner or to a trustee for such member or pensioner or his or her dependants during such period as the Board may determine.
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