IN THE NORTH GAUTENG HIGH COURT, PRETORIA
(REPUBLIC OF SOUTH AFRICA)

(1)	NOT REPORTABLE.
(2)	NOT OF INTEREST TO OTHER JUDGES.
(3)	REVISED
CASE NUMBER: 96855/16
7/12/2017
In the matter between:

THE MUNICIPAL WORKERS RETIREMENT FUND		Applicant

and

M MABULA								First Respondent

LUKHAIMANE M.A.N.O						Second Respondent

JUDGMENT

Murphy J
1.	This is an application in terms of section 30P of the Pension Funds Act ("the PFA"), in which the applicant, the Municipal Workers Retirement Fund (“the fund”), seeks to have the determination of the Pension Funds Adjudicator ("the Adjudicator"), dated 23 August 2016, set aside and substituted with an order dismissing the complaint of the first respondent, Mr. Motsamai Mabula ("the complainant"), lodged with the Adjudicator in terms of section 30A of the PFA on 13 April 2016.
2.	The complaint concerned the payment of a death benefit payable to the dependants of the complainant's deceased brother who had been a member of the fund. It was filed by way of a standard form document supplied by the office of the Adjudicator. Under the heading: "What are you dissatisfied about," the complainant stated:

"Please help me claim my brother's monies from SAMWU as he nominated me as beneficiary. I have been trying to claim the money for the pas[sic] four years without success. They are sending me from pillar to post.

Please help me, also the last month he died they did not pay his salary and UIF"

Under the heading "relief sought" Mabula simply stated:

"To receive my brother's monies he worked for it he deserves it."

3.	This, it seems, was the sum total of the pleaded case constituting the complaint. In her determination the Adjudicator records that after receiving the complaint her office forwarded it to the fund and the employer of the deceased, Kopanong Local Municipality. After further correspondence, both the employer and the fund filed responses and submissions. These documents are not included in the Adjudicator's record of decision. Nor are they annexed to the application before me.
4.	The Adjudicator's determination records the essential common cause facts. The deceased had been a member of the fund for 18 years by virtue of his employment with the municipality. Following his death, a death benefit became available for distribution to his dependants and beneficiaries in terms of the rules of the fund and the PFA.
5.	Rule 6 of the rules of the fund provides that the death benefit of a member of the fund who dies in service will be 36 times the member's basic monthly salary plus his share of the fund at the date of death. The death benefit shall not form part of the estate of the member, but shall be dealt with in accordance with the provisions of section 37C of the PFA. Generally, rule 6.3, read with section 37C of the PFA, requires the board of the fund to ascertain the dependants of the deceased and to make payment of the benefit to them in such proportions as may be deemed equitable. If a deceased with dependants has also designated a nominee to receive the benefit or a portion of it, the board may also distribute the death benefit among the dependants and the nominee in such proportions as it deems equitable.

6.	Section 37C deals with the disposition of pension benefits upon death of member. It reads:

"(1) Notwithstanding anything to the contrary contained in any law or in the rules of a registered fund, any benefit (other than a benefit payable as a pension to the spouse or child of the member in terms of the rules of a registered fund, which must be dealt with in terms of such rules) payable by such a fund upon the death of a member, shall, subject to a pledge in accordance with section 19(5)(b)(i) and subject to the provisions of sections 37A(3) and 370, not form part of the assets in the estate of such a member, but shall be dealt with in the following manner:

(a)	If the fund within twelve months of the death of the member becomes aware of or traces a dependant or dependants of the member, the benefit shall be paid to such dependant or, as may be deemed equitable by the fund, to one of such dependants or in proportions to some of or all such dependants. ...
(bA)	If a member has a dependant and the member has also designated in writing to the fund a nominee to receive the benefit or such portion of the benefit as is specified by the member in writing to the fund, the fund shall within twelve months of the death of such member pay the benefit or such portion thereof to such dependant or nominee in such proportions as the board may deem equitable: Provided that this paragraph shall only apply to the designation of a nominee made on or after 30 June 1989: Provided further that, in respect of a designation made on or after the same said date, this paragraph shall not prohibit a fund from paying the benefit, either to a dependant or nominee contemplated in this paragraph or, if there is more than one such dependant or nominee, in proportions to any or all of those dependants and nominees.·

7.	Section 37C of the PFA is intended to serve a social function. It was enacted to protect dependency, even over the clear wishes of the deceased. Its purpose is to alleviate, in part, the financial hardship in which the deceased's dependants might find themselves on the loss of their source of income and suppor.t The effect of the section is that the fund is expressly not bound by either a will or a nomination form. The section specifically restricts freedom of testation in order that no dependants are left without support and the fund is expressly not bound by a will, nor is it bound by the nomination form. The provision explicitly denies the member of a fund the right to determine how the benefit is to be disposed of by the fund.
8.	The contents of the nomination form are there merely as a guide to the trustees in the exercise of their discretion. Section 37C(1)(bA) in particular does not oblige the fund to give a nominee the portion of the benefit stipulated by the member when making the nomination. Nominees are to be treated as if they were dependants when the board determines what it regards as an equitable allocation of shares of the benefit. This means that, while they must be considered as potential beneficiaries, they are not entitled to be allocated any share of the benefit if it is apparent that there are other potential beneficiaries with greater financial needs. Therefore, the fact that the distribution does not strictly follow the nomination form is not a ground for review.
9.	Therefore, section 37C of the PFA requires the board of a fund to determine: i) the circle of potential beneficiaries to be considered; ii) what it would regard as an equitable basis for the division of the benefit amongst one or more of the beneficiaries; and iii) the appropriate mode of payment of the benefit, or a portion of it, to each beneficiary to whom it has decided to pay it.
10.	In this case, subsequent to the Adjudicator handing down her determination, the fund identified a spouse and four children and resolved to distribute the death benefit by awarding 60% to the spouse and 10% to each of the deceased's children. It opted not to make any allocation to the complainant. In so doing the board acted in terms of section 37C(1)(bA) of the PFA which provides inter alia that where a member with dependants has designated a nominee to receive the benefit or a portion of it, the fund is still free to distribute it as it may deem equitable and is not prohibited from paying the benefit, either to a dependant or nominee or, if there is more than one such dependant or nominee, in proportions to any or all of those dependants and nominees.
11.	In paragraph 3 of her determination, dated 23 August 2016, the Adjudicator recorded the complaint as being the claims of the complainant that he was nominated by the deceased as a sole beneficiary, had not been paid a death benefit and his numerous attempts to obtain the benefit had not succeeded. In the same paragraph, she anticipated the possible remedy when stating: ''the complainant requires the intervention of this Tribunal so that the death benefit may be paid without any further delay." Later in paragraph 5 of the determination, the Adjudicator identified the issue for determination to be whether the fund was "justified in delaying the payment of the death benefit."
12.	The Adjudicator found that the death benefit had not been paid by the fund to the dependants for almost four years after the death of the deceased member to the prejudice of the dependants. She found also that the fund had not advanced cogent reasons explaining why a proper investigation had not been carried out or why it had been delayed for so long.
13.	The Adjudicator referred to correspondence and documentary evidence from the fund indicating that a final decision would be taken on 6 October 2016. Thus, at the time the Adjudicator wrote the determination, the benefit had still not been distributed to the dependants. In paragraph 5.8 of the determination the Adjudicator made her findings on the delay issue as follows:

"It appears that the first respondent (the fund) has been sitting idly for almost four years, instead of proactively conducting an investigation in terms of section 37C of the Act, which is a travesty of justice to the deceased's beneficiaries....[T]he delay in the payment of the death benefit for almost four years from the date of the deceased's death is grossly unreasonable and unjustifiable. In the circumstance, the first respondent must be ordered to finalise its investigation within a specified period."

14.	The Adjudicator went on to pronounce on the question of the complainant's entitlement. In paragraphs 5.9 and 5.10 of the determination she stated:

"This Tribunal notes that the complainant is of the view that the entire death benefit must be paid to him due the fact that he is a sole nominee in the deceased's beneficiary form.....The board is not bound by the nomination form completed by the deceased and instead, the nomination form serves merely as a guide to assist it in the exercise of its discretion......[T]he complainant is not automatically entitled to be allocated a share of the death benefit as the determining factor in terms of section 37C of the Act is dependency in order to ensure that all those who were dependent on the deceased member are not left destitute when he passes away."

15.	Presumably with the meeting of the board scheduled for 6 October 2016 in mind, the Adjudicator, in conclusion, reminded the board, prudently, that when exercising its discretion to allocate the benefit it should be guided by relevant factors such as: i) the age of the dependants; ii) the relationship of the dependants to the deceased; iii) the extent of dependency; iv) the wishes of the deceased; and v) the financial position of the dependants.
16.	
:

The Adjudicator's determination was thus of limited scope or ambit. It merely directed the fund to take a decision to distribute the death benefit among the potential beneficiaries (the dependants and the nominee complainant), to make payment without further undue delay, and gave the fund directions regarding the status of the complainant and the relevant factors to be taken into account in making an equitable distribution. The Adjudicator issued the following order, in paragraph 6.1 of the determination, to give effect to her determination:

"6.1 In the result, the order of this Tribunals as follows:

6.1.1	The first respondent is ordered to finalise its investigation and allocate the death benefit, together with interest thereto at the rate of 9% per annum from 25 September 2013 to the date of payment, due to the deceased's beneficiaries in terms of section 37C(1) of the Act, within 12 weeks of the date of this determination.
6.1.2	The first respondent is ordered to pay the death benefit to the deceased's beneficiaries within three weeks of the completion of the investigation and allocation of the death benefit in terms of paragraph 6.1.1.
6.1.3	The first respondent is directed to report its decision, reasons therefor and all factors considered in terms of paragraph 6.1.1, in writing, to this Tribunal and to the complainant, within 12 weeks of this determination.
6.1.4	The first respondent is further directed to provide the complainant and this Tribunal with a detailed breakdown of the death benefit paid, within two weeks of making payment In terms of paragraph 6.1.2."

17.	. Unfortunately the Adjudicator neglected in her determination to explain fully the basis and purpose of the order she proposed to make. In particular, she did not set out her reasons for making the award of interest in paragraph 6.1.1. She most likely assumed it would be self-evident. Section 30N of the PFA provides that where a determination consists of an obligation to pay an amount of money, the debt shall bear interest as from the date and at the rate determined by the Adjudicator. In this case the Adjudicator determined the date to be 25 September 2013 and the rate to be 9%. The deceased died on 25 September 2012. Both section 37C of the PFA and the rules of the fund impose an obligation on the fund to pay the benefit within 12 months of the death of the deceased member. One may assume therefore that the Adjudicator considered the fund to be in statutory mora. The rate of 9% is the prescribed statutory rate. Likewise one may assume that the timetable in the order was aimed at affording the fund a sufficient opportunity to complete its investigation. The requirement imposed on the fund to give reasons and a breakdown of its decision no doubt was aimed at an accounting which would afford the complainant an opportunity to review his further options once a decision affecting his rights was taken.
18.	Somewhat surprisingly, the fund has chosen to appeal the determination under section 30P of the PFA. I say that because when all is considered the determination is manifestly aimed at assisting the fund to take a reasonable and just decision. The Adjudicator made no order requiring any payment to be made to the complainant. She merely directed the fund to delay no longer and usefully identified the relevant considerations that should guide the fund in making an equitable distribution, including the limited nature of the complainant's entitlement as a nominee. One might have expected the fund to be appreciative for the assistance. Be that is it may, the fund was aggrieved by the determination and exercised its right to approach this court for relief in terms of section 30P of the PFA. Neither the Adjudicator nor the complainant has opposed the section 30P application. The complainant most likely lacks the means and the Adjudicator is constrained by her office to abide the decision of the court. As mentioned, the record before me is incomplete.
19.	In its founding affidavit the fund raised two grounds of appeal. It contended firstly that the Adjudicator misdirected herself in law by assuming the complainant had made out a complaint against the fund and that she had jurisdiction to consider the complaint; and secondly that she misdirected herself by making out a case for the complainant instead of considering the case before her.
20.	In its first ground of appeal the fund essentially contends that the Adjudicator did not have jurisdiction because there was no complaint as defined lodged with her. Since the office of the Adjudicator is a creature of statute, the Adjudicator has no inherent jurisdiction and is limited to complaints that fall strictly within the definition of a complaint. Moreover, the Adjudicator may only determine the issues raised or contemplated in the complaint, failing which he or she will have acted ultra vires, or beyond her powers.
21.	A complaint is defined in section 1 of the PFA as meaning:

"a complaint of a complainant relating to the administration of a fund, the investment of its funds or the interpretation and application of its rules. and alleging -
(a)	that a decision of the fund or any person purportedly taken in terms of the rules was in excess of the powers of that fund or person, or an improper exercise of its powers:
(b)	that the complainant has sustained or may sustain prejudice in consequence of the maladministration of the fund by the fund or any person, whether by act or omission;
(c)	that a dispute of fact or law has arisen in relation to a fund between the fund or any person and the complainant; or
(d)	that an employer who participates in a fund has not fulfilled its duties in terms of the rules of the fund;
but shall not include a complaint which does not relate to a specific complainant.

22.	Thus before the Adjudicator can determine a complaint it must be established firstly that the complaint relates to the administration of a fund, the investment of its monies, or the interpretation and application of its rules. Secondly, the complainant must allege at least one of the four allegations required in the second part of the definition of a complaint, broadly being: i) a decision was in excess of the fund's powers or was an improper exercise of power; ii) prejudice in consequence of maladministration of the fund by the fund; iii) a dispute of fact or law; iv) non­ fulfilment of duties under the rules by the employer. In the event that both requirements are not met there will be no complaint as defined in the PFA and the Adjudicator will not have jurisdiction.
23.	The fund submitted that the Adjudicator did not have the jurisdiction to make the determination that she did because the complaint did not relate to the receipt of contributions or the disposition of benefits as provided for in the rules of the fund which entails the administration of the fund; to the investment of the fund's assets; or to the interpretation and application of the rules of the fund. As stated, both portions of the definition of complaint must be met before the Adjudicator can be said to have jurisdiction. The fund argued additionally that the complainant in this case did not allege that i) a decision of the fund was taken in excess of the powers or was an improper exercise of powers; ii) he suffered prejudice caused by maladministration; iii) the existence of a dispute of fact or law; or iv) there was a failure on the part of an employer to comply with its obligations. The fund accordingly submitted that any challenge to the fund's decision regarding the distribution of a lump sum death benefit falls completely outside both parts of the definition of complaint as provided for in the PFA and that the Adjudicator's determination should be set aside for want of jurisdiction.
24.	The funds submissions are not correct on both counts. The failure to pay a death benefit timeously relates to the administration of the fund. Pension funds are established precisely for the purpose of providing benefits and paying them when they become due and payable. The payment of the benefits established by the rules of the fund is an essential part of the administration of the fund. But if that were not true, payments of benefits are made in terms of the rules and thus a complaint about non-payment of the benefit will also be a complaint about the application of the rules.
25.	Furthermore, a complaint about the unreasonable delay in payment in essence alleges an improper exercise of power or prejudice in consequence of maladministration by an act of omission, as contemplated in paragraph (a) and (b) of the definition of a complaint.
26.	Thus, it is clear that a complaint about non-payment of a benefit relates either to the administration of the fund or the application of its rules and alleges an improper exercise of power or prejudice caused by maladministration. A complaint to the effect that a benefit payable to a destitute family has not been paid 4 years after the death of the deceased is self-evidently prejudicial. Any complaint about such an omission thus falls within the ambit of both the first and second parts of the definition of a complaint. To hold that the Adjudicator has no jurisdiction to determine such complaints would render the office nugatory and of no value to pension fund members. Why the fund should think otherwise is difficult to comprehend. The resolution of complaints about the non-payment or mistaken payment of benefits is the raison d'etre of the office of the Adjudicator.
27.	The fund's second ground of appeal is that the Adjudicator misdirected herself in law by making out a case for the complainant instead of considering the case before her. In this regard, the fund submitted that the Adjudicator went beyond the relief sought by the complainant. As stated above, under the heading "relief sought" the complainant identified the remedy he wanted as follows:

"To receive my brother's monies he worked for it he deserves it."

28.	According to the fund, the Adjudicator's findings and the relief granted by her do not correspond to the relief sought by the complainant and hence it submits that the Adjudicator overstepped her jurisdiction and further deprived the fund of its right to be heard.
29.	Section 30F of the PFA provides that when the Adjudicator intends to conduct an investigation into a complaint he or she shall afford the fund or person against whom the allegations contained in the complaint are made, the opportunity to comment on the allegations. After receipt of the complaint, the fund was given an opportunity to comment on the allegations as contained in the complaint and supposedly limited its response to the complaint as formulated. As stated, the fund's response submitted to the Adjudicator does not form part of the record of appeal. I assume though that the fund merely addressed the alleged right of the complainant to the full amount of the benefit. The fund claims it has been denied audi alteram partem. It also contends that the Adjudicator does not have a general equitable jurisdiction and cannot, therefore, reformulate a complaint and award relief other than that which was actually requested by the complainant. If the Adjudicator was allowed to do this, the fund submits, it would deprive the party called to answer to the complaint the right to be adequately heard.
30.	The fund, in my view, seeks inappropriately to restrict the complaint to its own preferred understanding of it. It maintains that the complainant was acting only for himself and that he wanted 100% of his deceased's brother's monies to be paid to him as the only nominee of the deceased. Such an unequivocal interpretation is not entirely supported by the limited evidence or the formulation of the complaint. The fund it seems may have limited its response to this allegation. However, in my opinion, such an interpretation unduly narrows the complaint. In this regard, it must be kept in mind that the complainant appears to come from a relatively disadvantaged background and made the complaint without the benefit of legal assistance. In such circumstances, the Adjudicator, in fulfilment of her obligation to dispose of complaints in an economical and expeditious manner in terms of section 300 of the PFA, is obliged to drill down to the true essence of the case and to avoid the kind of technical and formalistic pedantry evinced by the fund.
31.	The essence of the complaint is that the decision to distribute the benefit had not been taken and the payment of the benefit had not been made. It is true that the complainant wanted to benefit perhaps disproportionately. Nonetheless, being a nominee he was a potential beneficiary entitled at least to proper consideration, a decision and ultimately an equitable distribution. He probably had no entitlement to the full benefit. But his complaint that he had been "sent from pillar to post" and had been "trying to claim the money for the past four years without success" is justified by the facts. He was entitled to have his claim for a benefit considered and determined, and at the time his complaint was before the Adjudicator it had not been. The Adjudicator saw the problem for what it was and acted reasonably, lawfully and within her powers and dealt with the issue in the interests of economy and speed by making the order that she did. The order and the timetable she directed were aimed at assisting the fund to take a proper decision.
32.	The fund should have addressed the question of delay in its submissions to the Adjudicator. Its failure to do so, lies at its own door. However, without the fund having filed a complete record of the proceedings before the Adjudicator, it is impossible to determine whether there was any material procedural unfairness in this regard. It seems unlikely. The fact of a 3 year delay is common cause and the order of the Adjudicator was directed merely at getting the fund to take a decision. Any procedural shortcoming, if there was one, would have been of no material adverse effect, and thus would provide no basis to set aside the determination.
33.	Moreover, it appears from the founding affidavit that the decision to distribute the benefit to the deceased's dependants to the exclusion of the complainant was made after the Adjudicator's determination was issued, thus possibly rendering this application moot or of no practical effect. The fund has done what the Adjudicator ordered, or at least appears to have substantially complied with the order. The application should be dismissed for that reason also.
34.	In the premises, the application is dismissed.

J R Murphy 
Judge of the High Court

Date heard: 8 May 2017
For the applicant: Adv M Dewrance SC
Instructed by Shepstone & Wylie
For the respondents: No appearances
Date of judgment: 7/12/2017