Meyer v Iscor Pension Fund

• Jurisdiction: South Africa
• Judge: Harms JA, Cameron JA, Navsa JA, Brand JA and Jones AJA
• Judgment Date: 28 November 2002
• Citation: 2003 (2) SA 715 (SCA)
• Docket Number: 391/2001
• Hearing Date: 07 November 2001
• Counsel: M S M Brassey SC (with him D L Wood) for the appellant. C D A Loxton SC (with him A E Franklin SC) for the respondent.
• Court: Supreme Court of Appeal

Brand JA:

[1] This appeal arises from a successful application to set aside a determination by the adjudicator appointed under s 30C of the B Pension Funds Act 24 of 1956 (the Act). The underlying dispute to the appeal has already wound its costly way through four tribunals over a period of nearly a decade. The respondent (the fund) is a pension fund registered under the provisions of the Act. It is a company fund in the sense that all its members are employed by companies in the C Iscor group, consisting of a large (former parastatal) company, Iscor Ltd, its subsidiaries and affiliates (Iscor). The appellant (Meyer) was employed by Iscor for over 33 years until he took early retirement at the end of July 1993. He did so because he was informed that he was about to be retrenched. Throughout his employment with Iscor, Meyer was a member of the fund. Upon retirement his pension benefits were D calculated in accordance with the then applicable rules of the fund. More particularly, rule 6.2 was applied. This rule provided that if a member took retirement before reaching the normal retirement age of 63,

'the pension that is payable on such retirement shall be reduced by 0,4% in respect of each month by which his retirement precedes E his normal retirement age [of 63]'.

Since Meyer was only 51 when he took retirement, his pension benefits were substantially reduced by the application of rule 6.2.

[2] On 20 September 1993, less than two months after Meyer's retirement, the trustees of the fund resolved to amend rule F 6.2. The amendment was expressly formulated as a temporary measure and was clearly calculated to advance the personnel reduction programme embarked upon by Iscor at the time, by encouraging employees of Iscor (and members of the fund) who have reached the age of 50 to take early retirement. To this end the amended rule 6.2 stipulated that the G pension of employees who (a) attained the age of 50 prior to 31 December 1993 and (b) elected between 1 October and 31 December 1993 (c) to retire during the first quarter of 1994, would not be subject to the 0,4% per month reduction. The amended rule also provided that in calculating the pensionable service of these qualifying members would be extended by H one month for each year of actual service.

[3] Calculated on the basis of rule 6.2 in its original form, Meyer's pension benefits amounted to a lump sum award of R152 019,61 and a monthly pension of R1 669,94. By contrast, if Meyer had been allowed to take earlier retirement under the amended rule 6.2, he would have received a lump sum payment of R342 612,90 and a monthly pension I of R3 939,11. Quite understandably Meyer felt aggrieved by his exclusion from the enhanced benefits of the amended rule 6.2.

[4] He first sought relief against his erstwhile employer, Iscor, in the J

Brand JA

industrial court, pursuant to s 46(9) of the Industrial Relations Act 28 of 1956. The industrial court held in his favour, A finding, in essence, that the amendment discriminated against him; that Iscor was partly responsible for the amendment; and that it could therefore be held answerable to Meyer for the loss that he suffered because of the discrimination. In determining the amount of Meyer's resulting loss, the industrial court relied on an actuarial calculation B of the difference between the pension benefits Meyer actually received and those that he would have received under the amended rule 6.2. Based on these calculations the court gave judgment for Meyer against Iscor in the sum of R450 000. On appeal by Iscor to the Labour Appeal Court the industrial court's judgment was, however, set aside, substantially C on the basis that the fund was an entity separate from Iscor and that Iscor could not be held responsible for a loss occasioned by an amendment to its rules by this separate entity. The judgment of the Labour Appeal Court has subsequently been reported sub nom YSKOR Bpk v Meyer (1995) 16 ILJ 864 (LAC) ([1995] 7 BLLR 28). D

[5] Meyer thereupon redirected his pursuit for compensation. This time, he availed himself of the statutory complaints procedure created by chap V A (ss 30A - 30X) of the Act by lodging a complaint against the fund in terms of s 30A. On a basis to which I shall presently return, the adjudicator determined the dispute between the parties in favour of Meyer. He thereupon made an order which, E inter alia, provided that:

'(a)

The decision of the [fund] not to grant enhanced early retirement benefits to [Meyer] similar to those granted to other former members of [the fund], in terms of the amendment to rule 6.2 on 20 September 1993, is declared to be unfair discrimination and thus maladministration of the fund by the F fund as contemplated in para (b) of the definition of a "complaint" in s 1 of the Pension Funds Act of 1956.

(b)

The [fund] is ordered to remove the effects of such discrimination by placing [Meyer] in the position in which he would have been had he not been the victim of the discrimination.'

The rest of the order was aimed at facilitating an agreement between the parties on the amount of Meyer's compensation and, failing such G agreement, at providing a mechanism for the determination of this amount by the adjudicator. However, instead of implementing the latter part of the order, the fund brought an application in the Transvaal Provincial Division in terms of s 30P of the Act for the setting aside of paras (a) and (b) of the order. The Court H a quo granted the application and set the adjudicator's order aside, but afforded Meyer leave to appeal to this Court. [*]

The statutory setting I

[6] The adjudicator's powers to interfere with the fund's management of its own affairs as well as the jurisdiction of the High Court to confirm the adjudicator's determination or to set it aside are governed by the provisions of chap V A of the Act. This chapter was introduced by the Pension Fund Amendment Act 22 of 1996. Although the latter Act J

Brand JA

only came into operation on 19 April 1996, that is, as far as this matter is concerned, long after the event, chap V A was A expressly given retrospective effect by s 30H.

[7] At the risk of stating the obvious, it must be borne in mind that, since the office of the adjudicator is a creature of statute, the adjudicator has no inherent jurisdiction. His powers and functions are confined to those conferred upon him by the provisions of chap V A. For B present purposes, he is enjoined by these provisions to determine 'complaints' as defined in s 1 of the Act. The relevant part of the definition reads:

'"(C)omplaint" means a complaint of a complainant [which includes a member or former member of a fund] to the administration of a fund, the investment of its funds or the interpretation and application of its rules, and C alleging -

(a)

that a decision of the fund . . . purportedly taken in terms of the rules [of the fund] was in excess of the powers of that fund 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 . . ., whether by act or omission; . . . .' D

[8] The High Court's jurisdiction to entertain an appeal against a determination by the adjudicator is governed by the provisions of s 30P. The relevant part of this section provides:

'Access to court E

(1) Any party who feels aggrieved by a determination of the adjudicator may . . . apply to the Division of the [High] Court which has jurisdiction, for relief, . . . .

(2) The Division of the [High] Court contemplated in ss (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.' F

As was explained by Trollip J in Tikly and Others v Johannes NO and Others 1963 (2) SA 588 (T) at 590F - 591A, an appeal usually falls into one of the following three categories:

'(i)

an appeal in the wide sense, that is, a complete re-hearing of, and fresh determination on the merits of the matter with or without additional evidence or information . . .; G

(ii)

an appeal in the ordinary strict sense, that is, a re-hearing on the merits but limited to the evidence or information on which the decision under appeal was given, and in which the only determination is whether that decision was right or wrong;

(iii)

a review, that is, a limited re-hearing with or without additional evidence or information to determine, not whether the H decision under appeal was correct or not, but whether the arbiters had exercised their powers and discretion honestly and properly. . . .'

From the wording of s 30P(2) it is clear that the appeal to the High Court contemplated is an appeal in the wide sense. The High Court is therefore not limited to a decision whether the adjudicator's determination was right or wrong. Neither is it confined to the I evidence or the grounds upon which the adjudicator's determination was based. The Court can consider the matter afresh and make any order it deems fit. At the same time, however, the High Court's jurisdiction is limited by s 30P(2) to a consideration of 'the merits of the complaint in question'. J

Brand JA

The dispute submitted to the High Court for adjudication must therefore still be a 'complaint' as defined. A Moreover, it must be substantially the same 'complaint' as the one determined by the adjudicator. Since it is an appeal, it follows that where, for example, a dispute of fact on the papers is approached in accordance with the guidelines formulated by Corbett JA in Plascon-Evans Paints Ltd v Van Riebeeck Paints (Pty) Ltd 1984 (3) SA 623 (A) at 634E - 635D, the complainant should be regarded B as the 'applicant' throughout, despite the fact that it is the other...