IN THE HIGH COURT OF SOUTH AFRICA
GAUTENG DIVISION, PRETORIA
Case No 3725/16
In the matter between:
Hunter, Rosemary Therese
Applicant
And
Financial Services Board
First Respondent
Sithole, Abel Moffat NO
Second Respondent
Tshidi, Dube Phineas NO
Third Respondent
Boyd, Jurgen Arnold NO
Fourth Respondent
Gordhan, Pravin NO
Fifth Respondent
FILING SHEET - FIRST AND SECOND RESPONDENTS’ HEADS OF ARGUMENT,
PRACTICE NOTE AND LIST OF AUTHORITIES
KINDLY TAKE NOTICE THAT the first and second respondents hereby file their:
1
Heads of argument
2
Practice note
3
List of authorities
Signed at PRETORIA on this the 21st day of October 2016.
Norton Rose Fulbright South Africa Inc
Attorneys for the 1st & 2nd respondents
15 Alice Lane, Sandton
PO Box 784903, Sandton 2146
Docex 215, Johannesburg
Tel: (011) 685 8981
Fax: (011) 301 3200
Email: [email protected]
Ref: FSB41/Mr AP Vos
c/o Mothle Jooma Sabdia Inc
Ground Floor, Duncan Manor
Cnr Jan Shoba & Brooks Streets
Brooklyn
Tel: (012) 362 3137
Fax: (012) 362 4139
Ref: Mr Jooma/hp/NOR1.0131
To:
The Registrar of the High Court
Pretoria
And to:
Fasken Martineau Attorneys
Attorneys for the applicant
Inanda Greens Building 2
54 Wierda Road West
Sandton
Johannesburg 2196
Tel: (011) 586 6000
Fax: (011) 586 6104/5
Ref: Mr Nigel Carman
Email: [email protected]
c/o Savage Jooste & Adams
141 Boshoff Street
Nieuw Muckleneuck
Pretoria
Tel: (012) 452 8200
Fax: (012) 452 8201
Received on ____ October 2016
For: Applicant
And to:
Rooth & Wessels Inc
Attorneys for 3rd and 4th Respondents
Walker creek Office Park
Second Floor, Walker Creek 2
90 Florene Ribeiro Street
Muckleneuk,
Pretoria
Tel: 012 452 4066
Ref MR A Bloem/es/MAT26909
Received on ___ October 2016
For: 3rd and 4th Respondents
And to:
State Attorney
Attorneys for 5th Respondent
SALU Building
255 Francis Baard Street
(Schoeman Street)
Cnr Thabo Sehume (Andries) and
Francis Baard (Schoeman) Streets
(Entrance Thabo Sehume (Andries)
Street)
Tel: 012 309 1575
Ref 897/240/16/Z32
Received on ____ October 2016
For: 5th Respondent
THE HIGH COURT OF SOUTH AFRICA
GAUTENG DIVISION, PRETORIA
Case No. 3275/2016
In the matter between:
ROSEMARY THERESE HUNTER
Applicant
and
FINANCIAL SERVICES BOARD
ABEL MOFFAT SITHOLE NO
DUBE PHINEAS TSHIDI NO
JURGEN ARNOLD BOYD NO
PRAVIN GORDHAN NO
First Respondent
Second Respondent
Third Respondent
Fourth Respondent
Fifth Respondent
FIRST AND SECOND RESPONDENTS’ PRACTICE NOTE
HEARING DATE
1.
Special motion set down for hearing on 29, 30 November & 1 December 2016.
2
COUNSEL INVOLVED IN THE MATTER
2.
The applicant is represented by:
2.1.
CDA Loxton SC
082 785 1711
2.2.
A Milovanovic
083 280 8302
3.
The first and second respondents are represented by:
3.1.
Wim Trengove SC
082 337 0852
3.2.
Hephzibah Rajah
072 059 9261
4.
The third and fourth respondents are represented by:
4.1.
MC Maritz SC
082 702 8133
4.2.
T Manchu
083 468 0330
5.
The fifth respondent is represented by:
5.1.
Jeremy Gauntlett SC
082 413 9093
5.2.
Frank Pelser
079 582 7728
THE NATURE OF THE MOTION
6.
In her original notice of motion Ms Hunter prayed for orders compelling the FSB to
provide her with the copies of the O’Regan and KPMG reports. These prayers have
now become moot because the FSB has made the reports public.
3
7.
Her remaining prayers are for orders compelling the FSB to cause independent
investigations to be done of all the issues Ms Hunter raised in the complaints she
lodged with the FSB board in July 2014 and June 2015.
8.
On Wednesday 19 October 2016, Ms Hunter gave notice of her intention to apply at
the hearing of this matter on 28 November 2016, for the wholesale replacement of her
notice of motion to claim new relief on new causes of action on the basis of new
evidence. The FSB opposes the application because it is an attempt to make a new
case altogether.
ISSUES TO BE DETERMINED
9.
The main issue to be determined in this application is whether Ms Hunter discloses a
cause of action for the relief she seeks.
10.
The FSB’s contentions regarding the main issue are that:
10.1.
she does not disclose a cause of action for the relief she seeks;
10.2.
her remedy, if she has one, is for a review under the Promotion of
Administrative Justice Act 3 of 2000; and
10.3.
the FSB duly considered and investigated her complaints and its investigation
of matters flowing from them is ongoing.
RELIEF SOUGHT
11.
The first and second respondents ask that Ms Hunter’s application against them be
dismissed with costs including the costs of two counsel. The Biowatch rule does not
4
apply in this case because Ms Hunter did not litigate to vindicate her fundamental
rights.
She purported to litigate instead in her capacities as Deputy Registrar of
Pension Funds and as Deputy Executive Officer of the FSB. There is, therefore, no
reason to insulate her from its adverse consequences.
DURATION
12.
One day.
WHETHER PAPERS SHOULD BE READ
13.
Main affidavits and relevant documents and annexures referred to in the first and
second respondents’ submissions should be read.
Wim Trengove SC
Hephzibah Rajah
Counsel for
respondents
the
Chambers
Sandton
21 October 2016
first
and
second
THE HIGH COURT OF SOUTH AFRICA
GAUTENG DIVISION, PRETORIA
Case No. 3275/2016
In the matter between:
ROSEMARY THERESE HUNTER
Applicant
and
FINANCIAL SERVICES BOARD
ABEL MOFFAT SITHOLE NO
DUBE PHINEAS TSHIDI NO
JURGEN ARNOLD BOYD NO
First Respondent
Second Respondent
Third Respondent
Fourth Respondent
PRAVIN GORDHAN NO
FIRST AND SECOND RESPONDENTS’ SUBMISSIONS
Fifth Respondent
2
CONTENTS
INTRODUCTION ................................................................................................................................................. 4
SHE DOES NOT DISCLOSE A CAUSE OF ACTION ................................................................................................ 6
The essence of her claim ............................................................................................................................... 6
Her complaints to the board ......................................................................................................................... 6
Her prayers in this application ...................................................................................................................... 9
Her pleaded causes of action ...................................................................................................................... 10
The FSB’s internal policy statements .......................................................................................................... 12
Treasury Regulation 33 ............................................................................................................................... 16
The Protected Disclosures Act .................................................................................................................... 19
Conclusion ................................................................................................................................................... 20
HER ONLY REMEDY, IF SHE HAS ONE .............................................................................................................. 21
THE CANCELLATIONS PROJECT........................................................................................................................ 27
Background to the cancellations project .................................................................................................... 27
Requirements for the cancellation of the registration of a pension fund .................................................. 27
Role-players in the cancellations project .................................................................................................... 29
The role of administrators........................................................................................................................... 30
The cancellation of funds in the ordinary course........................................................................................ 32
The gazette mechanism .............................................................................................................................. 34
The application mechanism ........................................................................................................................ 35
The authorised representative route .......................................................................................................... 36
The section 26(2) trustee route .................................................................................................................. 37
Implementation of the application mechanism .......................................................................................... 38
A hybrid mechanism.................................................................................................................................... 39
No evidence of dishonesty .......................................................................................................................... 40
3
The cancellations project halted ................................................................................................................. 41
Conclusions on the cancellations project .................................................................................................... 41
Validity of the “authorised representative” route ...................................................................................... 42
Validity of the section 26(2) trustee route .................................................................................................. 43
HER NON-COMPLIANCE COMPLAINTS ............................................................................................................ 46
How the FSB board handled the complaints ............................................................................................... 46
The O’Regan report ..................................................................................................................................... 49
KPMG’s investigation .................................................................................................................................. 51
Mr Mort’s ongoing investigation................................................................................................................. 55
Conclusion ................................................................................................................................................... 56
HER EMPLOYMENT COMPLAINTS ................................................................................................................... 57
How the FSB board handled the complaints ............................................................................................... 57
Conclusion ................................................................................................................................................... 60
PRAYERS .......................................................................................................................................................... 61
AUTHORITIES ................................................................................................................................................... 62
4
INTRODUCTION
1.
Ms Hunter’s prayers 1 and 2 are for copies of the O’Regan and KPMG reports. These
prayers have now become moot because the FSB has made both reports public.1
2.
Ms Hunter’s remaining prayers are in essence for orders compelling the FSB to cause
independent investigations to be done of all the issues Ms Hunter raised in the
complaints she lodged with the FSB board in July 20142 and June 2015.3
3.
We shall submit that her claims are unfounded because,
3.1.
she does not disclose a cause of action for the relief she seeks;
3.2.
her remedy, if she has one, is for a review under the Promotion of
Administrative Justice Act 3 of 2000; and
3.3.
the FSB duly considered and investigated her complaints and its investigation
of matters flowing from them is indeed ongoing.
4.
Ms Hunter’s heads of argument run to 179 pages. She is clearly the author despite
the fact that she has briefed two counsel.4 We make nothing of the length of her
heads or the fact that she wrote them herself. She does however make a disturbing
1
O’Regan Report 21 November 2014 vol 15 p 1330; KPMG Report 20 October 2015 vol 16 p 1469
2
First Complaint 1 July 2014 vol 2 p 120; Supplement to the First Complaint vol 2 29 July 2014 p 141
3
Second Complaint 9 June 2015 vol 2 p 145
4
Hunter’s Heads p 171 para 541
5
statement in paragraph 2 of her heads.5 She says that she recognises that her heads
are more comprehensive than would usually be the case and adds that,
“In those circumstances, we propose submitting a concise set of heads closer
to the date allocated for the hearing of the matter (and in any event no later
than 14 November 2016”.
5.
We strongly object to this suggestion.
The implication will be that Ms Hunter’s
comprehensive heads, to which FSB responds in these heads of argument, are a mere
decoy and that her real heads of argument will only follow later. That would be an
abuse. The FSB is entitled to Ms Hunter’s real heads of argument before it files its
own. It would be most unfair for Ms Hunter to file decoy heads to which the FSB
responds and only then to file her real heads. We accordingly object to Ms Hunter’s
plan to file further heads of argument.
5
Hunter’s Heads p 1 para 2
6
SHE DOES NOT DISCLOSE A CAUSE OF ACTION
The essence of her claim
6.
We submit that Ms Hunter does not disclose a cause of action for the relief she seeks.
We shall later consider her prayers in greater detail but at their core are her prayers 3
and 4 for orders compelling the FSB to cause independent investigations to be done of
the matters raised in her complaints to the FSB’s board. We submit that none of the
legal bases upon which she makes these claims vest her with rights enforceable
against the FSB to the investigations she wants it to do.
Her complaints to the board
7.
Ms Hunter’s First Complaint of 1 July 2014 was confined to a long list of grievances
against Mr Tshidi.6 She asked the FSB board to investigate her complaints and, to the
extent that they are found to be justified, to take disciplinary steps against Mr Tshidi, to
compensate her for her out-of-pocket expenses and to instruct the FSB’s executive
committee to ensure that she was able to fulfil her functions without hindrance.
8.
Ms Hunter supplemented her First Complaint on 29 July 2014.7
The supplement
accused Mr Tshidi of further misconduct.
9.
Ms Hunter made her Second Complaint almost a year later on 9 June 2015.8 She
accused both Mr Tshidi and the FSB board of misconduct:
6
First Complaint 1 July 2014 vol 2 p 120
7
Supplement to First Complaint 29 July 2014 vol 2 p 141
7
9.1.
Her main complaint was that the board had not investigated her First
Complaint to her satisfaction.9
9.2.
She raised new complaints against Mr Tshidi and the board.10
9.3.
She demanded that the board investigate the conduct of Mr Tshidi and “all
persons who have conspired with him for the purpose of … preventing the
proper investigation of the cancellations issues;
and/or the premature
termination of my employment”.11
9.4.
She also made the following demands:
9.4.1.
The board must “remedy the damage to my reputation resulting
from the institution of disciplinary proceedings against me” and
“allow me more time to achieve the goals for which I was
appointed” by addressing a letter to the Minister of Finance “asking
him to extend the period of my employment to a date no later than
31 July 2017”.12
8
Second Complaint 9 June 2015 vol 2 p 145
9
Second Complaint vol 2 p 147 para 3 and vol 2 p 153 paras 6 to 8
10
Second Complaint vol 2 p 149 para 5
11
Second Complaint vol 2 p 157 para 9.1
12
Second Complaint vol 2 p 157 para 9.2
8
9.4.2.
The board must procure “the assessment of my performance to
date by an appropriately qualified, independent and impartial
person” and, on the basis of that assessment, the board must
decide “whether I should be granted a bonus in respect of my
performance in the year ended 2014 and (whether) I should be
granted an increase in the rate of my remuneration”.13
9.4.3.
The board must instruct Mr Tshidi to appoint attorneys “to assist
me in the formulation and prosecution of disciplinary proceedings
against certain senior members of staff in the RFD”, that is, the
Retirement Fund Division of the FSB headed by Ms Hunter.
9.4.4.
The board must approve the establishment of all the new posts
proposed in a memo Ms Hunter had submitted to the board.14
9.4.5.
The board must appoint KPMG to investigate the cancellation of
the registration of thousands of pension funds at the request of an
“authorised representative” or “section 26(2) trustee” in the period
from 2007 to 2014.15
9.4.6.
The board must appoint KPMG or another suitably qualified and
independent firm to determine whether the Registrar and/or the
13
Second Complaint vol 2 p 158 para 9.3
14
Second Complaint vol 2 p 158 para 9.5
15
Second Complaint vol 2 p 159 para 10.2
9
Deputy Registrar of Pension Funds and/or the Retirement Funds
Division performed any improper, dishonest or corrupt actions in
administering and dealing with dormant pension funds.16
Her prayers in this application
10.
Ms Hunter’s prayers have grown with every round of papers filed.
11.
In prayers 3 and 4 of her notice of motion, she claimed orders compelling the FSB to
cause independent investigations to be done of all the matters raised in her first and
second complaints.
12.
In the last paragraph of her replying affidavit dated 30 June 2016, she said that she
intended to ask this court for further orders,
“which will involve compelling the FSB to act on the findings of the KPMG
report, alternatively to procure a different forensic report from a reputable,
independent and sufficiently resourced institution, either supporting or
rejecting the findings of KPMG (as opposed to simply finding fault with them)
and to report to the court on the findings of such report together with the
detailed proposals regarding what the FSB intends to do regarding the
outcomes of the KPMG report, alternatively such other forensic report as it
may procure.”17
16
Second Complaint vol 2 p 160 para 11
17
Hunter Reply p 1943 vol 20 para 9.2
10
13.
In her heads of argument,18 filed on 7 October 2016, Ms Hunter says she will ask for
an even more elaborate supervisory order,
-
for a third independent investigation of the entire cancellations project;
-
for all three investigators to report to this court on the outcome of their
investigations; and
-
14.
for the court then to supervise the implementation of their recommendations.
On Wednesday 19 October 2016, while we were in the throes of finalising these heads
of argument due on Friday 21 October 2016, Ms Hunter gave notice of her intention to
apply at the hearing of this matter on 28 November 2016, for the wholesale
replacement of her notice of motion to claim new relief on new causes of action on the
basis of new evidence.
We have not been able to digest and respond to the
application and will do so in due course. FSB will certainly oppose the application
because it is an attempt to make a new case altogether.
15.
The important point, for present purposes, is however that Ms Hunter does not
disclose a cause of action for any of the relief she seeks.
Her pleaded causes of action
16.
It must be borne in mind that, in motion proceedings, the parties’ affidavits are both
pleadings and evidence.19 The SCA put it as follows in Quartermark:
18
Hunter Heads p 6 para 13
19
Transnet v Rubenstein 2006 (1) SA 591 (SCA) para 28; Foize Africa v Foize Beheer 2013 (3) SA 91 (SCA)
para 30; Quartermark Investments v Mkhwanazi 2014 (3) SA 96 (SCA) para 13; Wright v Wright 2015
(1) SA 262 (SCA) para 15; De Lange v Presiding Bishop, Methodist Church of Southern Africa 2015 (1) SA
106 (SCA) para 19
11
“It is trite that in motion proceedings affidavits fulfil the dual role of pleadings
and evidence. They serve to define not only the issues between the parties
but also to place the essential evidence before the court.
They must
therefore contain the factual averments that are sufficient to support the
cause of action or defence sought to be made out. Furthermore, an applicant
must raise the issues as well as the evidence upon which it relies to
discharge the onus of proof resting on it, in the founding affidavit.”20
17.
Ms Hunter pleaded her causes of action from page 64 in paragraph 12 of her founding
affidavit. We highlight the following features of her pleading:
17.1.
Ms Hunter pleaded causes of action in support of her claim that the FSB
board was obliged to investigate her First Complaint.21 She did not plead any
causes of action in support of her claim that the board was obliged to
investigate her Second Complaint.
17.2.
She said that the board was obliged to investigate her First Complaint in
terms of,
-
“its Compliance Policy and Compliance Charter”;22
-
“the policies and procedures comprising the FSB’s Fraud and
Corruption Prevention Strategy”;23
20
Quartermark Investments v Mkhwanazi 2014 (3) SA 96 (SCA) para 13
21
Hunter Founding Affidavit vol 1 p 64 paras 12.1.3 and 12.5 to 12.8
22
Hunter Founding Affidavit vol 1 p 64 para 12.1.3.1
23
Hunter Founding Affidavit vol 1 p 64 para 12.1.3.2
12
-
the Public Finance Management Act 1 of 1999 (PFMA) read with
Treasury Regulation 33;24 and
-
18.
the Protected Disclosures Act 26 of 2000.25
In its answer, the FSB contended that Ms Hunter had not disclosed any valid cause of
action for any of the relief she sought.26 It dealt with each of the pleaded causes of
action and submitted that they did not support Ms Hunter’s claims.
19.
Ms Hunter was dismissive of the FSB’s contentions in reply.27 She baldly disputed the
FSB’s contentions “for reasons which will be addressed in legal argument at the
hearing of this matter”.28
20.
We shall address each of Ms Hunter’s pleaded causes of action. We submit that they
do not support the relief she seeks.
The FSB’s internal policy statements
21.
The FSB said in its answer that Ms Hunter’s reliance on its Compliance Policy and
Compliance Charter and Fraud and Corruption Prevention Strategy was misplaced
because they were mere internal policies and could not found causes of action
24
Hunter Founding Affidavit vol 1 p 65 para 12.1.3.3
25
Hunter Founding Affidavit vol 1 p 66 para 12.2.2
26
FSB Answer vol 11 pp 1001- 1005 paras 163 to 177
27
Hunter’s Reply vol 20 pp 1917 – 1918 paras 7.1 to 7.7 and vol 20 pp 1936- 1937 paras 8.56 to 8.59
28
Hunter’s Reply vol 20 pp 1917 – 1918 paras 7.2 and 7.8
13
enforceable against the FSB.29 Ms Hunter baldly denied this allegation in reply without
any motivation, as she put it, “for reasons which will be addressed in legal argument at
the hearing of this matter”.30
22.
In her heads of argument, Ms Hunter contends for the first time that the policy
statements on which she relies are binding rules made by the board in terms of s 9(1)
and s 19 of the Financial Services Board Act 97 of 1990.31 This belated contention is
however unfounded for the following reasons:
22.1.
The question whether the policy statements were made in terms of s 9(1) and
s 19 is in the first place a question of fact. There is no evidence that the
board made the policy statements under s 9(1) or s 19. The FSB testified that
they are mere internal policies.32 Ms Hunter did not adduce any evidence to
the contrary.33 Under the Plascon-Evans rule, the FSB’s evidence must in
any event prevail.
22.2.
Section 9(1) says that the executive committee of the FSB must, between
meetings of the board, “perform the functions of the board in accordance with
the policy and instructions of the board”. Policies issued under this provision
29
FSB Answer vol 11 p 1002 para 166
30
Hunter Reply vol 20 p 1918 para 7.6
31
Hunter’s Heads p 146 paras 454 to 457
32
FSB Answer vol 11 p 1002 para 166
33
Hunter Reply vol 20 p 1918 para 7.6
14
are accordingly binding on Exco but not on the board. They cannot found a
cause of action enforceable against the FSB.
22.3.
Section 19 allows the board to make rules but there is nothing to suggest that
the policy statements on which Ms Hunter relies are indeed rules made under
this section. They are not even called “rules”. Ms Hunter herself called them
“policies and procedures”.34 That is all they are.
23.
Another fatal flaw in Ms Hunter’s reliance on these policy statements is that she did not
identify the particular provisions on which she based her claims. It is impossible for
the parties, and indeed the court, to determine whether she has a cause of action
without knowing on which provisions she relies. This flaw is fatal in itself:
23.1.
Where a litigant relies on a statutory provision, it is not necessary to specify it,
“but it must be clear from the facts alleged by the litigant that the section is
relevant and operative”.35 Ms Hunter does not meet this test because neither
the parties nor the court knows on which provisions she relied in her founding
affidavit.
23.2.
The FSB highlighted this flaw in its answer.36 Ms Hunter responded to this
contention in reply with a bald denial.37
34
Hunter Founding Affidavit vol 1 p 64 para 12.1.3.2
35
Bato Star Fishing v Minister of Environmental Affairs 2004 (4) SA 490 (CC) para 27
36
FSB Answer vol 11 p 1002 para 167
37
Hunter Reply vol 20 p 1918 para 7.6 and vol 20 p 1937 para 8.59
15
23.3.
In her heads of argument, Ms Hunter submits that she need not be more
specific because “the board should be familiar with the contents of its own
policies” and because she once provided Mr Sithole with a memorandum on
the duties of the board.38 But she misses the point. The board of course
knows its own policies but submits that Ms Hunter does not have a claim
under them. It was for her to identify the provisions on which she relies to
enable all the parties to respond to her contentions and to enable the court to
adjudicate on it.
23.4.
The Constitutional Court39 endorsed the rule laid down by the High Court in
Swissborough40 that a litigant may not attach documents to its affidavit and
merely request the court to have regard to it without identifying the portions of
the documentation on which it seeks to place reliance:
“(I)t is not open to an applicant or a respondent to merely annex to its
affidavit documentation and to request the court to have regard to it.
What is required is the identification of the portions thereof on which
reliance is placed and an indication of the case which is sought to be
made out on the strength thereof. If this were not so, the essence of
our established practice would be destroyed. A party would not know
what case must be met.”
38
Hunter’s Heads p 148 para 458
39
Helen Suzman Foundation v President of the RSA 2015 (2) SA 1 (CC) para 35 footnote 35
40
Swissborough Diamond Mines v Government of the RSA 1999 (2) SA 279 (T) 324G
16
23.5.
Ms Hunter falls foul of this rule but does so more grievously than the rule itself
contemplates because she did not even annex the policy statements on which
she relies.
The parties and the court accordingly have no idea of the
provision on which she bases her case. The parties could not respond to it
and the court cannot adjudicate on it.
Treasury Regulation 33
24.
Regulation 33.1.1 reads as follows:
“If an employee is alleged to have committed financial misconduct, the
accounting authority of the public entity must ensure that an investigation is
conducted into the matter and if confirmed, must ensure that a disciplinary
hearing is held in accordance with the relevant prescripts.”
25.
Ms Hunter said in her founding affidavit that she relied on Treasury Regulation 33 but
did not make any of the allegations necessary to establish a contravention of the
regulation.41
26.
Ms Hunter now argues that Mr Tshidi was guilty of “financial misconduct” and that the
board should have acted against him in accordance with regulation 33.1.1.42 But her
founding affidavit failed to establish the facts on which her contention is based.
27.
The concept of “financial misconduct” is circumscribed by the following provisions of
the PFMA:
41
Hunter’s Founding Affidavit vol 1 p 65 para 12.1.3.3
42
Hunter’s Heads p 159 paras 500 to 503
17
27.1.
Section 56(1) says that the accounting authority of a public entity (the board of
the FSB) may delegate any of its powers under the PFMA to an official of the
public body.
27.2.
Section 83(3) says that such an official “commits an act of financial
misconduct if that official wilfully or negligently fails to exercise that power or
perform that duty”.
28.
It follows that, to bring herself within Treasury Regulation 33, Ms Hunter had to accuse
Mr Tshidi of “financial misconduct” and, to do so, she had to establish at a minimum,
29.
-
that the board had delegated functions to him;
-
that he had failed to perform one or more of those functions; and
-
that he had done so wilfully or negligently.
Ms Hunter did not make any of these allegations in her founding affidavit. She merely
invoked Treasury Regulation 33 without explaining its relevance.43
30.
The FSB challenged her bald assertion in its answer.44 Its challenge however was met
with a bald denial in Ms Hunter’s reply.45
43
Hunter Founding Affidavit vol 1 p 65 para 12.1.3.3
44
FSB Answer vol 11 pp 1003 - 1004 paras 168 to 172
45
Hunter Reply vol 20 p 1918 para 7.6 and vol 20p 1937 para 8.59
18
31.
Ms Hunter now seeks to make a new case in her heads of argument.46 It is however
flawed for the following reasons:
31.1.
She does not say that she accused Mr Tshidi of financial misconduct in her
founding affidavit. She relies on accusations made in her First and Second
Complaints.
31.2.
She said in her First Complaint merely that Mr Tshidi “has incurred
expenditure for the FSB in substantial amounts”.47
31.3.
She said in her Second Complaint merely that “the costs incurred by the FSB
in pursuance of the disciplinary charges against her “may have amounted to
‘irregular expenditure’ or ‘fruitless and wasteful expenditure’ as defined.”48
31.4.
Ms Hunter’s reliance on both these statements falls foul of the Swissborough
rule.
She is not allowed, in argument, to invoke statements made in the
annexures to her affidavits without having done so in the affidavits
themselves.
31.5.
Neither allegation amounts to an accusation that Mr Tshidi had been guilty of
“financial misconduct” as defined.
They did not say that the board had
delegated a function to him, that he had failed to perform it and had done so
46
Hunter’s Heads p 159 paras 500 to 5003
47
First Complaint 1 July 2014 vol 2 p 122 para 12
48
Second Complaint 9 June 2015 Vol 2 p 150 para 5.4
19
wilfully or negligently. The first allegation seems entirely innocuous and the
second attributes the misconduct to the FSB itself implying that Mr Tshidi had
acted under the authority of the board and thus not in breach of its delegation
to him.
The Protected Disclosures Act
32.
Ms Hunter said in her founding affidavit that the FSB was required by the Protected
Disclosures Act to ensure that she did not suffer “occupational detriment” as a result of
“the disclosure that I had made to the Board in good faith”.49
33.
In its answer, the FSB submitted that Ms Hunter did not disclose a cause of action
under the Protected Disclosures Act and that it in any event did not entitle her to
require the FSB’s board to investigate her complaints.50
34.
The FSB’s contentions were met with bald denials in Ms Hunter’s reply.51
35.
Ms Hunter accordingly did not make a cause of action under the Protected Disclosures
Act for the relief she seeks.
49
Hunter Founding Affidavit vol 1 p 66 para 12.2.2
50
FSB Answer vol 11 pp 1004 - 1005 paras 174 to 177
51
Hunter Reply vol 20 p 1918 para 7.6 and vol 20 p 1937 para 8.59
20
Conclusion
36.
Ms Hunter’s papers do not disclose a cause of action for the relief she seeks. Her
application should accordingly be dismissed.
21
HER ONLY REMEDY, IF SHE HAS ONE
37.
In her heads of argument, Ms Hunter invokes new causes of action in sweeping and
lofty terms. She speaks of,
-
the constitutional requirement that public officials “act lawfully and in a manner
that is effective, transparent, accountable and consistent with a high standard of
professional ethics, that is, to do what is right and to do it properly”;52
-
the constitutional requirement that public officials own up to their own mistakes,
investigate them and put them right;53 and
-
38.
the FSB’s duty to investigate irregularities.54
These causes of action are not only entirely new but are also unfounded. We submit
moreover that, even if they were well-founded, Ms Hunter’s only remedy, if she had
one, would have been a review under PAJA.
39.
The means by which the courts control the exercise of public power are by judicial
review.
The Constitutional Court made this point in its landmark judgment in the
Pharmaceutical case.55
The President of the court Justice Chaskalson put it as
follows:
52
Hunter’s Heads p 44 para 129
53
Hunter’s Heads p 45 paras 130 to 131
54
Hunter’s Heads p 120 paras 372 to 383
55
Pharmaceutical Manufacturers Association of SA and another: in re Ex Parte President of the RSA 2000
(2) SA 674 (CC)
22
“Whilst there is no bright line between public and private law, administrative
law, which forms the core of public law, occupies a special place in our
jurisprudence.
It is an incident of the separation of powers under which
courts regulate and control the exercise of public power by the other branches
of government ….
Courts no longer have to claim space and push boundaries to find means of
controlling public power.
That control is vested in them under the
Constitution, which defines the role of the courts, their powers in relation to
other arms of government and the constraints subject to which public power
has to be exercised.”56
40.
In Bato Star57 the Constitutional Court cited the Pharmaceutical judgment and added
that,
“the courts’ power to review administrative action no longer flows directly from
the common law but from PAJA and the Constitution itself. The grundnorm of
administrative law is now to be found in the first place not in the doctrine of
ultra vires, nor in the doctrine of parliamentary sovereignty, nor in the
common law itself, but in the principles of our Constitution. The common law
informs the provisions of PAJA and the Constitution, and derives its force
from the latter.”58
It went on to say that,
56
Para 45
57
Bato Star Fishing v Minister of Environmental Affairs and Tourism 2004 (4) SA 490 (CC)
58
Para 22
23
“The cause of action for judicial review of administrative action now ordinarily
arises from PAJA, not from the common law as in the past. And the authority
of PAJA to ground such causes of action rests squarely on the Constitution.”59
41.
The Constitutional Court took this development one step further in New Clicks60 by
holding that a party who seeks to review administrative action is now bound to do so
under PAJA:
“PAJA is the national legislation that was passed to give effect to the rights
contained in section 33. It was clearly intended to be, and in substance is, a
codification of these rights. It was required to cover the fields and purports to
do so.
A litigant cannot avoid the provisions of PAJA by going behind it, and seeking
to rely on section 33 of the Constitution or the common law. That would
defeat the purpose of the Constitution in requiring the rights contained in
section 33 to be given effect to by means of national legislation.”61
42.
Ms Hunter argues that her application is not subject to PAJA because it is directed at
the FSB’s failures to investigate the cancellations project, to take appropriate steps to
correct its flaws and to investigate whether there had been any improper conduct
59
Para 25
60
Minister of Health v New Clicks SA 2006 (2) SA 311 (CC)
61
Paras 95 and 96
24
involved.62 She says that, because her case is directed at the FSB’s failures to do its
duty, there are “no ‘decisions’ to review”.63
43.
But she is mistaken. The failure of a public body to discharge its duties constitutes
“administrative action” subject to review under PAJA:
43.1.
Section 1 defines “administrative action” as a decision taken “or any failure to
take a decision” which has the prescribed consequences.
43.2.
Section 1 also defines a “decision” to include “a failure to take a decision”.
43.3.
Sections 6(2)(g) and (3) specifically provide for the review of a failure to take a
decision in breach of a duty to do so.
43.4.
Section 8(2) creates special remedies for the review of omissions.
43.5.
Justice Plaskett discussed the review of administrative action by omission
under PAJA in Vumazonke.64
43.6.
The Constitutional Court recently confirmed in Kirland65 that administrative
action by omission is also subject to review under PAJA. Justice Cameron
put it as follows:
62
Hunter’s Heads p 10 para 20
63
Hunter’s Heads p 10 para 21
64
Vumazonke v MEC for Social Development, Eastern Cape 2005 (6) SA 229 (SE) paras 34 to 39
25
“This is clear from PAJA. The statute, which was enacted to give
effect to the right to just administrative action, envisages that officials
will take decisions that do not constitute just administrative action and
are therefore invalid. The statute’s definition of ‘administrative action’
is not limited only to administrative action that is just.
It plainly
includes unjust administrative action. Thus, it encompasses both a
decision and a failure to take a decision. This shows that the mere
fact that an administrator failed to apply her mind properly --- by failing
to take a proper decision --- does not mean that her conduct does not
constitute administrative action.
What is more, the statute’s definition of ‘decision’ embraces ‘any
decision of an administrative nature made, proposed to be made, or
required to be made, as the case may be, under an empowering
provision’. That a decision ‘required to be made’ can be reviewed
means that, under PAJA, a decision may exist of an administrator is
required to decide but as a matter of fact has not decided.”66
44.
Ms Hunter was thus obliged to proceed under PAJA. This is not a mere technicality. It
has at least two material implications:
65
MEC for Health, Eastern Cape v Kirland Investments 2014 (3) SA 481 (CC)
66
Paras 93 and 94
26
44.1.
The first is that an application for review under PAJA must be brought within a
reasonable time and in any event within 180 days.67 If it is brought any later,
the court’s condonation must be sought.68
44.2.
Even if the applicant establishes that the administrative action is unlawful, the
court exercises a wide and equitable discretion to determine whether to set it
aside and, if so, to determine its consequences.69
45.
The applicant’s failure to bring her case under PAJA is accordingly fatal even if she
has a cause of action.
67
Section 7(1) of PAJA
68
Section 9(1)(b) of PAJA
69
Section 8(1) of PAJA; Allpay Consolidated Investment Holdings v CEO, SASSA 2014 (4) SA 179 (CC) paras
29 to 71
27
THE CANCELLATIONS PROJECT
Background to the cancellations project
46.
The background to the cancellations project is conveniently described in paragraphs 9
to 11 of Justice O’Regan’s report70 quoted in paragraph 13 of the FSB’s answer.71
Requirements for the cancellation of the registration of a pension fund
47.
Section 27(1)(a) of the Pension Funds Act provides that:
“The registrar shall cancel the registration of a fund … on proof to his
satisfaction that the fund has ceased to exist.”
48.
It is common cause that a fund ceases to exist when it no longer has any members,
assets or liabilities.
49.
The test under s 27(1)(a) is subjective. The Registrar must be satisfied with the proof
that the fund has ceased to exist.
Parliament entrusted this determination to the
Registrar’s subjective judgment.
50.
The Registrar’s decision to cancel the registration of a fund constitutes administrative
action subject to PAJA.
It renders his decision reviewable if “it is one that a
reasonable decision-maker could not reach”.72
70
O’Regan Report 21 November 2014 vol 15 pp 1334 – 1336 paras 9 to 11
71
FSB Answer vol 11 pp 937 – 940 para 13
28
51.
We emphasize that the benchmark is not a reasonable person, a reasonable auditor or
even a reasonable judge. It is a reasonable decision-maker, that is, a reasonable
registrar of pension funds in this case. His expertise and judgment must be respected
as the Constitutional Court made plain in Bato Star:
“In treating the decisions of administrative agencies with the appropriate
respect, a court is recognising the proper role of the executive within the
Constitution. In doing so, a court should be careful not to attribute to itself
superior wisdom in relation to matters entrusted to other branches of
government. A court should thus give due weight to findings of fact and
policy decisions made by those with special expertise and experience in the
field. The extent to which a court should give weight to these considerations
will depend upon the character of the decision itself, as well as on the identity
of the decision-maker. A decision that requires an equilibrium to be struck
between a range of competing interests or considerations and which is to be
taken by a person or institution with specific expertise in that area must be
shown respect by the courts.
Often a power will identify a goal to be
achieved, but will not dictate which route should be followed to achieve that
goal. In such circumstances, a court should pay due respect to the route
selected by the decision-maker.”73
72
Bato Star Fishing v Minister of Enviromental Affairs 2004 (4) SA 490 (CC) para 44; Minister of Health v
New Clicks SA 2006 (2) SA 311 (CC) para 187; Sidumo v Rustenburg Platinum Mines 2008 (2) SA 24 (CC)
para 107; Democratic Alliance v President of the RSA 2013 (1) SA 248 (CC) para 29
73
Bato Star para 48
29
52.
The requirements for cancellation are thus two-fold. The first is that the Registrar be
subjectively satisfied that the fund has ceased to exist.
The second is that his
conclusion be one that a reasonable registrar of pension funds could reach.
53.
We highlight two other features of the section. The first is that there need not be an
application for the cancellation of the registration of a fund. The second is that the
Registrar may act on evidence of any kind derived from any source. The section is not
prescriptive in this regard. Both these features are of course very understandable
because there would often be nobody to speak on behalf of a fund that has ceased to
exist, that is, one without members, assets or liabilities.
Role-players in the cancellations project
54.
The cancellations project was initiated by Mr Boyd, the then Deputy Registrar of
Retirement Funds and Friendly Societies.74 Mr Boyd delegated the authority to take
the cancellation decisions to Ms De Swardt.75 They kept Mr Tshidi informed of all
progress from the time he took over as the Registrar on 1 July 2008.76
55.
Ms De Swardt was responsible for the day-to-day leadership and running of the
cancellations project.77 She was a long-standing and trusted employee of the FSB
74
FSB Answer vol 11 p 941 para 19
75
FSB Answer vol 11 p 941 para 20
76
FSB Answer vol 11 p 941 para 20
77
FSB Answer vol 11 p 942 para 22
30
with extensive experience and she understood the Retirement Fund Division (RFD)
and the FSB’s information systems back to front.78
56.
The RFD staff who assisted Ms De Swardt were Ms Cecelia Steyn, Ms Victoria
Motluong, and from time to time, managers in the RFD’s prudential department, staff in
the pensions actuarial department, analysts in the licensing and registration section
and other staff of the RFD.79
57.
Most of the administrators with whom the RFD interacted were large and reputable
organisations such as Liberty, Alexander Forbes, Sanlam, Old Mutual and
Momentum.80
The role of administrators
58.
The Registrar is in the ordinary course entitled to rely on the pension fund
administrators as people of integrity and skill.81 They are highly regulated under the
following laws.
59.
They are in the first place regulated under s 13B of the Pension Funds Act. It provides
that nobody may act as administrator of a pension fund unless he or she has been
approved by the Registrar.82 The Registrar only approves an administrator if he is
78
FSB Answer vol 11 p 942 para 23
79
FSB Answer vol 11 p 942 para 24
80
FSB Answer vol 11 p 943 para 25
81
FSB Answer vol 11 p 946 para 34
82
Section 13B(1)
31
satisfied that the candidate is a fit and proper person.83 An approved administrator
operates subject to a range of statutory duties of good faith, care and skill.84 The
Registrar exercises ongoing control over administrators’ conduct and performance of
their functions.85 Any transgression of these provisions is a serious criminal offence
that renders an administrator liable to a fine of R10m or imprisonment of ten years or
both.86
60.
A pension fund’s administrator is also a “financial institution” as defined in s 1 of the
Financial Services Board Act. It renders every administrator subject to the Financial
Institutions (Protection of Funds) Act 28 of 2001. It imposes a range of duties of
utmost good faith on pension fund administrators.87 An administrator who breaches
any of these duties is guilty of a serious criminal offence again punishable by a fine of
R10m or imprisonment of ten years or both.88
61.
As a “financial institution”, a pension fund administrator is also subject to the
Inspection of Financial Institutions Act 80 of 1998. It allows the Registrar to appoint
inspectors to inspect the affairs of administrators89 and obliges them to co-operate on
pain of criminal punishment.90
83
Section 13B(1A)(c)
84
Section 13B(5)
85
Section 13B(6)
86
Section 37(1)(a)
87
Section 2
88
Section 10(1)
89
Sections 3 and 4
32
62.
Pension fund administrators are also usually professional people, actuaries, auditors
and lawyers, subject to the discipline of their organised professions.
The cancellation of funds in the ordinary course
63.
The Registrar’s judgment, whether a fund has ceased to exist, depends on the
circumstances of every case. But he ordinarily applied the following five assessment
criteria:
63.1.
The A & L criterion. Whether the fund submitted a statement in terms of s
15(1) that it had no assets or liabilities, that is, a nil balance.91
63.2.
The transfer criterion. The Registrar approved a scheme for the transfer of all
the fund’s members, assets and liabilities and the scheme has been
implemented in terms of s 14(2).92
63.3.
The ROT criterion. Where a fund has transferred its assets, liabilities and
members without the Registrar’s consent in terms of s 14(8).93
90
Section 12
91
FSB Answer vol 11 p 949 para 41.1
92
FSB Answer vol 11 p 949 para 41.2
93
FSB Answer vol 11 p 949 para 41.3
33
63.4.
The surplus criterion. If a fund had an actuarial surplus, whether it had been
apportioned in terms of s 15B(1) under a scheme approved by the Registrar
and, if not, whether there has been a “nil return” in terms of s 15B(11).94
63.5.
The F & F1 criterion.
Whether the fund’s officers had declared and its
valuator, principal officer or auditor had confirmed that the fund had no
members, assets or liabilities by way of forms F and F1.95
64.
There are three reasons why a fund may cease to exist:
64.1.
Its last members withdraw after their benefits have been paid in full.
64.2.
Its assets, liabilities and members have been transferred to another fund in
terms of s 14(2).
64.3.
Its members, assets and liabilities have been transferred to another fund in
terms of s 14(8). 96
65.
The information on which the Registrar typically relied in his assessment on whether a
fund had ceased to exist was the following:
65.1.
The last set of annual financial statements submitted reflecting nil balances.
94
FSB Answer vol 11 pp 949-950 para 41.4
95
FSB answer vol 11 p 950 para 41.5
96
FSB answer vol 11 p 950 para 42
34
65.2.
Transfer documents prescribed by s 14(2) of the PFA that verified the transfer
of assests and liabilities to a transferree fund.
65.3.
Duly completed Forms H and J to achieve a ROT in terms of s 14(8) of the
PFA.
65.4.
Proof that the fund had submitted a nil scheme noted by the Registrar or a
surplus apportionment scheme approved by the Registrar.
65.5.
The deregistration certificates Forms F and F1.97
The gazette mechanism
66.
This mechanism was used from 2008 to 2010. A total of 968 funds were gazetted of
which 577 were cancelled.98 The gazette mechanism involved publishing notice of the
Registrar’s intention to cancel the registration of funds listed in the notices. Three
notices were published in 2008, 2009 and 2010.99 At the time of publication, work had
already been done internally within the RFD to establish which funds would fall in this
category and such funds were identified as “query funds”.100
As an additional
safeguard, Liberty and Momentum undertook to pay any claims of beneficiaries
97
FSB answer vol 11 pp 951 to 952 para 43.1 – 43.5
98
FSB answer vol 11 p 953 para 44
99
FSB answer vol 11 pp 953-954 paras 46-51; Board Notice 63 of 2008 8 July 2008 vol 13 p 1206, Board
Notice 87 2009 24 July 2009 vol 13 p 1212, Board Notice 16 of 2010 2 February 2010 vol 13 p 1218
100
FSB Answer vol 11 pp 953 – 954 paras 47 - 51
35
received within three years after cancellation.101
The possibility of the funds ceasing
to exist was confirmed in the gazetting exercise.102
67.
The following categories of gazetted funds were cancelled utilising the Gazette
Mechanism:
67.1.
Old underwritten funds.103
67.2.
TBVC funds.104
67.3.
Old application funds.105
67.4.
Funds without administrators.106
67.5.
Legacy funds.107
The application mechanism
68.
In the normal course this mechanism was based on applications made on behalf of a
fund by its board of trustees.
In relation to the dormant funds which were not
cancelled utilising the gazette mechanism and which did not have boards of trustees to
initiate the application, such applications were initiated by the “authorised
101
FSB Answer vol 11 p 955 para 52; Momentum Undertaking 10 October 2008 vol 13 p 1229, Liberty
Undertaking vol 14 p 1235
102
FSB Answer vol 11 p 962 para 70
103
FSB Answer vol 11 pp 957-958 paras 55 - 59
104
FSB Answer vol 11 pp 958 - 960 paras 60 - 62
105
FSB Answer vol 11 p 960 para 63
106
FSB Answer vol 11 pp 960-961 paras 64 - 66
107
FSB Answer vol 11 pp 961-962 paras 67 - 70
36
representative” or its “section 26(2) trustee”.108 These routes are explained briefly
below.
The authorised representative route
69.
The Registrar issued PF126109 on 16 March 2007 to cater for the appointment of
authorised representatives.110 Paragraph 4 of PF126 said that, if a fund did not have a
properly constituted board and could not constitute one, the administrator could apply
for the appointment of an authorised representative.111
Paragraphs 4.1 to 4.4
prescribed the information an administrator would have had to furnish in such an
application.112 Once the Registrar appointed an authorised representative, he or she
had the powers described in paragraph 5 of the circular.113
70.
The authorised representatives were typically employees of the pension fund
administrators. They were well-known and reputable. They were subject to regulation
by the FSB. The Registrar could place considerable reliance on the information they
provided.114 Most of the authorised representatives were professionals subject to the
legal and ethical standards of their professions.115 The Registrar relied, not only on the
108
FSB Answer vol 11 p 962 para 71
109
Circular PF No. 126 16 March 2007 vol 14 p 1263
110
FSB Answer vol 11 p 963 para 76
111
FSB Answer vol 11 p 964 para 77
112
FSB Answer vol 11 p 964 para 78
113
FSB Answer vol 11 p 966 para 80 ; Circular PF No. 126 16 March 2007 vol 14 p 1267 - 1268
114
FSB Answer vol 11 p 968 para 82
115
FSB Answer vol 11 p 968 para 83
37
information furnished, but on the integrity of the appointees to perform their functions
properly and lawfully. There was no reason to believe they would not do so.116 The
authorised representatives submitted duly completed forms F and F1 to commence the
cancellation process.117
The section 26(2) trustee route
71.
Section 26(2) of the PFA was introduced in September 2007118 as a mechanism to
appoint trustees to orphan funds. Its introduction rendered the authorised
representative route redundant.119 The procedure for the appointment of a s 26(2)
trustee was on application and by nomination by the relevant fund administrator.120
The letter of application had to contain the following essential facts:
71.1.
The name of the nominee.
71.2.
His or her qualifications and relevant experience, supported by a curriculum
vitae.
71.3.
A submission that a board could not be properly constituted for the fund
concerned.
116
FSB Answer vol 11 pp 969-970 para 85
117
FSB Answer vol 11 p 970 para 86 ; Form F and F1 Government Gazette 28 December 2011 vol 13 pp
1178 to 1179
FSB Answer vol 11 p 970 para 88
118
119
FSB Answer vol 11 p 971 para 89
120
FSB Answer vol 11 p 971 para 90
38
71.4.
A statement that the fund had been identified as a fund that was dormant or
orphan.121
72.
Once a s 26(2) trustee had been appointed, he could apply for cancellation of the fund
in the normal way by forms F and F1.122 The trustee was required to hold office until
the registration of the fund had been cancelled in terms of s 27(1)(a) of the PFA.123
Implementation of the application mechanism
73.
The mechanism was the same, regardless of whether the application was made by an
authorised representative or a s 26(2) trustee.124
74.
The Registrar’s main concern in assessing an application for cancellation was to
ensure that there was no financial prejudice to members or beneficiaries or anyone
with an interest in the funds.125 The main concern of Mr Boyd, Ms De Swardt and the
RFD team was whether there were still assets and liabilities in the fund.126
121
FSB Answer vol 11 p 971 paras 90.1 to 90.4
122
FSB Answer vol 11 p 972 para 91
123
FSB Answer vol 11 p 973 para 94
124
FSB Answer vol 11 p 974 para 98
125
FSB Answer vol 11 p 974 para 99
126
FSB Answer vol 11 p 974 para 99
39
75.
They used the following five assessment criteria to determine whether a fund had
ceased to exist127,
75.1.
The A & L criterion.128
75.2.
The transfer criterion.129
75.3.
The ROT criterion.130
75.4.
The surplus criterion.131
75.5.
The forms F and F1 criterion.132
A hybrid mechanism
76.
From 2011 to 2013 some 411 dormant funds were cancelled by a combination of the
gazette and application mechanisms.133 These were the same categories of funds for
which the gazette mechanism was used from 2008 to 2010 but the Registrar
considered it prudent from 2011 to 2013 to require those responsible for dormant
funds also to apply for cancellation under the application mechanism.134 It was an
additional safeguard developed by the Registrar in consultation with the pensions
industry.135 In this mechanism, the Registrar required the administrators (rather than
127
FSB Answer vol 11 p 975 para 100
128
FSB Answer vol 11 pp 976 - 977 paras 103 – 107
129
FSB Answer vol 11 pp 979 - 980 paras 108 - 111
130
FSB Answer vol 11 pp 980 -981 paras 112 - 116
131
FSB Answer vol 11 pp 982 -985 paras 117 – 125
132
FSB Answer vol 11 pp 985 -988 paras 126 - 133
133
FSB Answer vol 11 p 989 para 134
134
FSB Answer vol 11 p 989 para 134
135
FSB Answer vol 11 pp 989 -990 para 135
40
an authorised representative or s 26(2) trustee) to apply for cancellation through the
Form F and F1.136
No evidence of dishonesty
77.
Mr Tshidi, Mr Boyd and Ms De Swardt never had any reason to suspect that any of the
applications for cancellation were made dishonestly or for improper motives.137 Ms
Hunter has also not advanced any evidence of such dishonesty or misconduct.138
78.
During the cancellations project, the registration of 6757 funds was cancelled. The
cancellation of only 76 funds had to be reinstated.139 There were 39 funds cancelled
by the Gazetting Mechanism whose registration had to be reinstated.140 There were
37 funds cancelled by way of the Application Mechanism which were subsequently
reinstated.141
79.
At the time of cancellation, Mr Boyd and Ms De Swardt were satisfied that the funds
had ceased to exist.142 A few funds had to be reinstated for the following reasons:
136
FSB Answer vol 11 p 990 paras 136 - 137
137
FSB Answer vol 11 p 992 para 142
138
FSB Answer vol 11 p 992 para 142
139
FSB Answer vol 11 p 992 para 143
140
FSB Answer vol 11 p 992 para 144
141
FSB Answer vol 11 p 992 para 145
142
FSB Answer vol 11 pp 992 – 993 para 146
41
79.1.
Suspense accounts.143
79.2.
Change of administrator.144
79.3.
Surplus after cancellation.145
79.4.
FSB appeal board reinstatements.146
The cancellations project halted
80.
Ms Hunter took over from Mr Boyd on 1 August 2013. She refused to approve further
cancellations with effect from 10 September 2013. There are consequently about
3000 dormant or orphan funds left that have ceased to exist but have not been
cancelled.147
Conclusions on the cancellations project
81.
In conclusion, the RFD was satisfied that:
81.1.
All the cancelled funds had ceased to exist.148
81.2.
Even if mistakes were made, they were made in good faith and were most
unlikely to have caused prejudice to anybody.149
143
FSB Answer vol 11 p 993 para 147.1
144
FSB Answer vol 11 p 994 para 147.2
145
FSB Answer vol 11 p 994 para 147.3
146
FSB Answer vol 11 p 995 para 147.4
147
FSB Answer vol 11 p 996 para 148
148
FSB Answers vol 11 p 997 para 150.1
42
81.3.
No evidence has come to light of any substantial assets of cancelled funds.150
There is no evidence of likely material prejudice.151
Validity of the “authorised representative” route
82.
There was no statutory authority for the Registrar’s appointment of authorised
representatives to apply for the cancellation of the registration of pension funds that
had ceased to exist. The Registrar could not confer a mandate on the authorised
representative to act or speak on behalf of the pension fund. It was a pragmatic
solution to an otherwise intractable problem because s 26(2) had not yet been enacted
to allow for the appointment of a trustee to act and speak on behalf of a fund.
83.
The invalidity of the authorised representative’s mandate did not invalidate the
Registrar’s cancellation of the registration of the fund. As we have already seen, s
27(1)(a) allows the Registrar to cancel the registration of a fund without an application
and on the basis of any evidence from any source. The mere fact that the application
for cancellation was made and the evidence provided by somebody who was not
lawfully authorised to act and speak on behalf of the fund, accordingly does not affect
the validity of the cancellation of its registration.
149
FSB Answer vol 11 p 997 para 150.2
150
FSB Answer vol 11 p 997 para 150.3
151
FSB Answer vol 11 p 997 para 151
43
Validity of the section 26(2) trustee route
84.
A new s 26 was introduced in the Pension Funds Act in September 2007152 and some
of its provisions were amended in February 2014.153
During the period from
September 2007 to February 2014, its relevant provisions read as follows:
“(2)
Where a fund has no properly constituted board contemplated in
section 7A and has failed to constitute a board after 90 days written
notice by the Registrar, the Registrar may, notwithstanding the rules of
the fund, at the cost of the fund –
(a) appoint so many persons as may be necessary to the board of the
fund or appoint so many persons as may be necessary to make up
the full complement or quorum of the board; and
(b) assign to such board such specific duties as the Registrar deems
expedient.
(3)
A board constituted in terms of subsection (2) holds office until the
Registrar is satisfied that the fund has constituted a valid board in terms
of section 7A and the Registrar has relieved the former board in writing
of its duties.”
85.
Ms Hunter procured an opinion from Advocate Breitenbach SC on 2 March 2014154
that gave a restrictive interpretation to s 26(2)(b). He was of the view that the only
purpose for which the Registrar could appoint a trustee under s 26(2) was “to facilitate
the constitution of a valid board in terms of s 7A”. The Registrar could accordingly not
152
By Act 11 of 2007
153
By Act 45 of 2013
154
Breitenbach Opinion of 2 March 2014 vol 2 p 161
44
appoint such a trustee to apply for and bring about the cancellation of the registration
of the fund. Advocate Breitenbach motivated his restrictive interpretation as follows:
“The references to s 7A in both s 26(2) and s 26(3) make it clear that the
purpose of any appointments to the board made by the Registrar under
s 26(2)(a) and of the assignment of any duties to the board by the Registrar
under s 26(2)(b) is to facilitate the constitution of a valid board in terms of
s 7A. As ss 26(2) and (3) create a bridging mechanism aimed at ensuring
that the board of a fund is brought back into conformity with s 7A, those
provisions cannot be used for funds which have no members and/or where
the Registrar’s ultimate purpose is not the constitution of a valid board in
terms of s 7A but the deregistration of a fund in terms of s 27(1)(a).”155
86.
We submit with the greatest of respect that Advocate Breitenbach’s interpretation was
mistaken:
86.1.
It is correct that, under ss 26(2) and (3), the Registrar may appoint trustees to
the board of a fund, that does not have a properly constituted board of its
own, and that they hold office until the fund has properly constituted a new
board.
86.2.
But the obvious purpose of the Registrar’s appointment is to ensure that such
a fund has someone to act and speak on its behalf for as long as it does not
have a board of its own. There is nothing in the language of the section to
suggest that the purpose of the Registrar’s appointment is any narrower than
155
Breitenbach Opinion 2 March 2014 vol 2 p 167 para 23
45
that.
Advocate Breitenbach’s restrictive reading finds no support in the
language of the section.
86.3.
His interpretation is moreover contradicted by s 26(2)(b).
It allows the
Registrar to “assign to such board such specific duties as the Registrar deems
expedient”. It highlights the fact that his appointees may perform any of the
functions normally performed by the trustees of a pension fund.
86.4.
The legislature must also have foreseen that it will often not be possible for a
defunct pension fund to constitute a board of trustees, for instance when it no
longer has members to do so.
On Advocate Breitenbach’s interpretation,
there would then be an intractable impasse beyond resolution under s 26(2).
That is a very unsatisfactory outcome because it would leave very many funds
without boards beyond help under s 26(2).
87.
It is in any event not necessary to determine whether the s 26(2) trustees had the
power to apply for and bring about the cancellation of the registration of the pension
funds because, as we have already noted, a valid application was not a pre-requisite
for a valid cancellation. The cancellation remains valid regardless of the validity of the
application or the source of the evidence on which it was based.
46
HER NON-COMPLIANCE COMPLAINTS
How the FSB board handled the complaints
88.
Ms Hunter’s grievances against the board are wholly misplaced. The FSB board went
out of its way to ensure that her complaints were properly dealt with.
89.
Ms Hunter submitted her First Complaint on 1 July 2014.156
90.
On 9 July 2014 the board met for a long strategy session where Ms Hunter’s First
Complaint was extensively discussed. The outcome of this session was that the FSB
board was uncertain how to deal with the First Complaint because it was a hybrid
complaint which contained a non-compliance complaint relating to the cancellations
project and a grievance complaint raising employment related issues.157 It resolved to
get legal advice on how to deal with it.158
91.
The board gave Mr Tshidi an opportunity to respond to the complaint, which he did on
22 July 2014.159 Mr Tshidi suggested an amicable parting of ways with Ms Hunter
because the trust relationship between them had irretrievably broken down.160
92.
Ms Hunter supplemented her First Complaint on 30 July 2014.161
156
FSB Answer vol 11 pp 1007 -1008 para 184 – 185 ; First Complaint 1 July 2014 vol 2 p 120
157
FSB Answer vol 11 p 1008 para 186
158
FSB Answer vol 11 pp 1008 -1009 para 187
159
FSB Answer vol 11 p 1009 para 188; Tshidi Response 22 July 2014 vol 8 p 715
160
FSB Answer vol 11 p 1009 para 188; Tshidi Response 22 July 2014 vol 8 p 719 paras 13 - 14
47
93.
On the same day, the FSB board considered the grievance and its supplement at its
meeting.162 After considering the advice it had received, the board resolved to split the
non-compliance issues and the grievance and have them investigated separately.163 It
also resolved to seek legal advice from a labour attorney Mr Hermann Nieuwoudt of
Norton Rose Fulbright (Nortons).164 It established a special sub-committee comprising
of Mr Sithole and two other FSB board members to deal with Ms Hunter’s complaint.165
94.
The board received an opinion from Mr Nieuwoudt on 5 August 2014.166
95.
On 6 August 2014 the board met to consider Mr Nieuwoudt’s opinion and the progress
made by the sub-committee.167
The board recognised that there was a serious
breakdown in the relationship between Ms Hunter, Mr Tshidi and the FSB in general
which would be difficult to mend. It considered and accepted Mr Nieuwoudt’s advice
that it negotiate an amicable parting of ways with Ms Hunter. It mandated the subcommittee to meet with Mr Nieuwoudt and Ms Hunter to see whether they could
negotiate a mutually acceptable parting of ways.168
161
FSB Answer vol 11 p 1009 para 189; Supplement to First Complaint 29 July 2014 vol 2 p 141
162
FSB Answer vol 11 p 1009 para 189; Board Minute 30 July 2014 vol 14 p 1315
163
FSB Answer vol 11 pp 1009 - 1010 para 190; Board Minute 30 July 2014 vol 14 p 1317
164
FSB Answer vol 11 pp 1009 - 1010 para 190; Board Minute 30 July 2014 vol 14 p 1317
165
FSB Answer vol 11 p 1010 para 191; Board Minute 30 July 2014 vol 14 p 1317
166
FSB Answer vol 11 p 1010 para 192
167
FSB Answer vol 11 p 1010 para 193; Board Minute 6 August 2014 vol 14 p 1318
168
FSB Answer vol 11 p 1010 para 193; Board Minute 6 August 2014 vol 14 p 1319
48
96.
On 22 August 2014, the sub-committee reported to the board on the outcome of its
meeting held with Ms Hunter and Mr Nieuwoudt on 7 August 2014.169. It reported that
it could not reach agreement with Ms Hunter. The FSB board resolved,
96.1.
to appoint Advocate Anton Myburgh SC and implement his advice that
disciplinary proceedings be instituted against Ms Hunter;
97.
96.2.
to request the Minister’s approval for the disciplinary proceedings;
96.3.
to commission a forensic investigation into the cancellations project; and
96.4.
that Mr Sithole should take advice from a leading legal practitioner.170
On 1 September 2014, after Mr Sithole had obtained the requisite advice from a senior
attorney, the board decided to address the non-compliance issues and the written
complaint in parallel. It also resolved to appoint an independent expert, preferably a
retired judge, to investigate the non-compliance issues.171
98.
On 17 September 2014 the FSB board decided to appoint Justice O’Regan.172 On her
advice, the FSB board decided to exclude the employment issues between Ms Hunter
and Mr Tshidi from her investigation.173 On 23 October 2014, the board and Justice
O’Regan finalised her terms of reference.174
169
FSB Answer vol 11 p 1011 para 194; Board Minute 22 August 2014 vol 14 p 1320
170
FSB Answer vol 11 p 1011 para 195; Board Minute 22 August 2014 vol 14 p 1321
171
FSB Answer vol 11 p 1012 para 197; Board Minute 1 September 2014 vol 14 p 1323
172
FSB Answer vol 11 p 1012 para 198; Board Minute 17 September 2014 vol 14 p 1325
173
FSB Answer vol 11 p 1012 para 198
174
O’Regan Terms of Reference 23 October 2014 vol 14 p 1327
49
99.
Mr Boyd, Mr Tshidi and Ms Hunter made submissions to Justice O’Regan.175 She
produced a draft report on 14 November 2014 which was sent to the three of them for
comment.176
The O’Regan report
100. Justice O’Regan rendered her final report to the FSB board on 21 November 2014.177
She very usefully described and crystallised the disputes between Ms Hunter on the
one hand and Messrs Tshidi, Boyd and De Swardt on the other, but did not resolve
any of them.
101. She noted that Mr Tshidi and Mr Boyd had conceded that there had been no statutory
mandate for their appointment of “authorised representatives”.178
102. She also noted that, while Mr Tshidi and Mr Boyd did not agree with Advocate
Breitenbach’s interpretation of s 26(2), they had conceded that it might be correct.179
103. She accordingly allowed for the possibility that Advocate Breitenbach’s restrictive
interpretation might be correct:
175
FSB Answer vol 11 p 1013 para 201
176
FSB Answer vol 11 p 1013 para 202
177
O’Regan Report 21 November 2014 vol 15 p 1330
178
O’Regan vol 15 p 1337 para 15
179
O’Regan vol 15 p 1338 para 16
50
“It may well be that a court will find that section 26(2) trustees may only act to
bring about the proper composition of the board within the meaning of section
7A of the PFA as Ms Hunter and the opinion of Breitenbach SC suggests, but
it is not impossible that the legislative provisions may be given a broader
scope.”180
104. Justice O’Regan concluded that,
“It is not possible for me to determine whether the assets and liabilities of the
funds cancelled between January 2007 and September 2013 were lawfully
and properly disposed of in accordance with the PFA.
In my view, it is
necessary for this question to be further investigated.”181
105. Justice O’Regan recognised that the important question was not whether the funds
had been lawfully cancelled but whether anybody had suffered material financial
prejudice as the result of their cancellation that might have been unlawful.
She
accordingly recommended that the FSB appoint a firm of auditors to investigate,
-
“whether it is likely that material financial prejudice may have been suffered by
any fund or any person with an interest in any fund as a result of the acts and/or
omissions of the Registrar or any ‘authorised representative’ or ‘section 26(2)
trustee’ in regard to the disposal of the fund’s assets and/or liabilities before its
registration was cancelled or the determination by the Registrar whether the fund
had assets and/or liabilities when deciding to cancel its registration in terms of
section 27”;
180
O’Regan vol 15 p 1338 para 16
181
O’Regan vol 15 p 1342 para 24(c)
51
-
“whether on the information available to the Registrar at the time of cancellation,
it was clear that a reasonable person would have concluded that the fund had
‘ceased to exist’, in that it had no members, nor any assets or liabilities”; and
-
“whether, before the registration of the fund was cancelled, the manner in which
its assets and/or liabilities were disposed of (whether by the transfer of its assets
and/or liabilities to another fund or otherwise) pursuant to decisions taken by
‘authorised representative(s) or section 26(2) trustee(s)’ indicated that reasonable
steps were taken to protect the interests of members and/or beneficiaries and/or
other creditors”.182
KPMG’s investigation
106. The FSB appointed KPMG pursuant to Justice O’Regan’s recommendations. KPMG
did an investigation, presented their preliminary findings to the FSB board on 29 July
2015, responded to queries raised by the FSB board on 27 August 2015,183 and
rendered their final report on 20 October 2015.184
107. KPMG’s investigation was unusual. They did not investigate whether anybody actually
suffered any financial prejudice as a result of the cancellations project. They merely
made an assessment of, what they called, “the likeliness of potential prejudice” which,
they said, they regarded as “a lower burden of certainty than … prima facie”.185 They
182
O’Regan vol 15 p 1343 para 25
183
KPMG’s response to the board 27 August 2015 vol 16 p 1410
184
KPMG Report 20 October 2015 vol 16 p 1469
185
KPMG’s response to the board 27 August 2015 vol 16 p 1424
52
later repeated that, what they had determined, was not the likelihood of actual
prejudice but “the likelihood of potential prejudice”.186
108. KPMG made an assessment of the risk, on the basis of risk factors they determined,
that there might still have been assets in the cancelled funds. They seem to have
determined the indicators of risk purely as auditors and without regard to any expert
input on the regulation of pension funds. We highlight two examples of the oddity of
their views on the so-called indicators of risk,
108.1.
First, when Liberty applied for the cancellation of the registration of orphan
funds, it certified that the fund had no assets or liabilities and added that it
would take full responsibility for the payment of any claims that might arise
against the fund within three years after its cancellation. It obviously meant
no more than that Liberty was sufficiently confident of its assurances to
assume liability for them, that is, “put its money where its mouth is”.
108.2.
Instead of drawing confidence from Liberty’s undertakings, KPMG was
suspicious of them and thought that they undermined the credibility of its
assurances:
“It is peculiar that this statement is included in the cancellation letters
as it creates the impression that although Liberty is certifying that the
fund has no assets or liabilities, there are indications that they are not
entirely certain of this position."187
186
KPMG’s response to the board 27 August 2015 vol 16 p 1427
187
KPMG Report 20 October 2015 p 1500 vol 16 para 5.3.8
53
108.3.
Second, the FSB prescribed Forms F and F1 for applications for the
cancellation of pension funds. Form F was a certificate by the board of a fund
that it no longer had any members, assets or liabilities and had resolved to
deregister.188 Form F1 was a certificate by the valuator, principal officer or
auditor of a fund that it no longer had any members, assets or liabilities. 189
The Registrar obviously placed significant reliance on these certificates and
particularly Form F1 because it was invariably signed by a professional such
as a chartered accountant, actuary or lawyer.
108.4.
KPMG however deprecated the Registrar’s reliance on these certificates
which, they said, made it impossible for him to be satisfied that a fund had
ceased to exist:
“This particular approach and applied mechanism (of relying on
certificates F and F1) meant that the requirement that the Registrar
should be in a position to objectively determine that a fund had
‘ceased to exist’ could not be satisfied.”190
108.5.
KPMG’s view accordingly seems to have been that, if the Registrar relied on
assurances given to him by others, however credible and reliable they might
be, then he could not “objectively determine” that a fund had ceased to exist.
188
Directive 6 28 December 2011 Form F vol 13 p 1178
189
Directive 6 28 December 2011 Form F1 vol 13 p 1179
190
KPMG Report 20 October 2015 vol 16 p 1500 para 5.3.8
54
108.6.
These views expressed by KPMG were wholly unmotivated and, we submit,
unfounded and eccentric.
109. KPMG acknowledged that it had not determined whether anybody had actually
suffered any prejudice at all and said that a further investigation would be necessary to
determine “actual prejudice, if any”.191
110. The board was unhappy with KPMG’s investigation.
When it expressed its
dissatisfaction, KPMG proposed that the board refer its report to Justice O’Regan for
consideration.192
111. The board took up KPMG’s suggestion and asked Justice O’Regan on 21 November
2015193 “to review the final KPMG report together with the issues that the board has
raised and to give the board guidance”.
112. Justice O’Regan responded on 1 December 2015194 that:
“I think it would be wise for you to approach senior counsel to do this work for
you. Pensions are not my area of expertise and I think it would be valuable
for someone who is familiar with pensions law to undertake this review.”
191
KMPG’s response to the board 27 August 2015 vol 16 p 1424 and p 1427
192
KPMG’s response to the board 27 August 2015 vol 16 p 1414 para 3
193
FSB Letter 21 November 2015 vol 17 p 1549
194
O’Regan Email 1 December 2015 vol 17 p 1552
55
113. The board implemented her advice by engaging two pensions experts, Mr Mort and
Mr Andrew, to assess KPMG’s report. They rendered a report dated 25 April 2016.195
They were highly critical of KPMG. It is for present purposes not necessary to dwell on
their criticism. The limitations of KPMG’s report, conceded by KPMG themselves,
made it necessary for a further investigation to be undertaken to determine whether
anybody actually suffered any prejudice as a result of the cancellations project.
Mr Mort’s ongoing investigation
114. The Registrar appointed Mr Mort as an inspector in terms of s 2(1) of the Inspection of
Financial Institutions Act to determine, with reference to the cancellation of the
registration of pension funds from January 2007 to September 2013,
“in respect of such of the deregistered funds as you determine, whether any
member, beneficiary or dependant was likely to have suffered material
prejudice in consequence of the deregistration.”196
115. Mr Mort rendered a progress report on his investigation on 7 June 2016 but made it
clear that his investigation was ongoing and that he would render further reports in due
course.197
116. Mr Mort has thus far investigated the nine biggest funds that KPMG had identified as
high risk. According to KPMG, the risk of financial prejudice posed by the cancellation
195
Mort-Andrew Report 25 April 2016 vol 17 p 1557
196
FSB Letter 6 April 2016 vol 17 p 1554 para 2.2
197
Mort Report 7 June 2016 vol 17 p 1610 para 2.6
56
of these funds amounted to R1,1bn, that is some 46% of the overall risk of R2,4bn
identified by KPMG.198
117. After thorough investigation, not only of the FSB’s records but also those of the
administrators of the funds, Mr Mort concluded that nobody had suffered any actual
financial prejudice as a result of the cancellation of the registration of these funds.199
All the indications are accordingly that KMPG’s scaremongering was unfounded.
Conclusion
118. Because Ms Hunter has not disclosed viable causes of action, one does not know
what the benchmark is against which the board’s handling of her non-compliance
complaints should be measured. We submit however that, whatever the benchmark,
the board has admirably handled Ms Hunter’s non-compliance complaints. They have
thus far appeared to be quite unfounded but Mr Mort’s enquiry into the possibility of
actual prejudice is still underway.
handling of Ms Hunter’s complaints.
198
Mort Report vol 17 p 1610 para 2.1
199
Mort Report vol 17 p 1610 paras 2.2 and 2.4
The board can however not be faulted for its
57
HER EMPLOYMENT COMPLAINTS
How the FSB board handled the complaints
119. Although the FSB board was of the view that the cancellations project should first be
finalised, it took some steps to resolve Ms Hunter’s employment grievances. Ms
Hunter was however still not satisfied with any of the steps taken by the FSB board.200
120. On 11 August 2014 Ms Hunter’s attorneys, Haffegee Roskam Savage (HRS),
requested that an inquiry be conducted, chaired by a senior attorney, advocate or
retired judge.201
121. Before the process could be started, the board had to address serious disciplinary
complaints against Ms Hunter. It instructed Mr Nieuwoudt to prosecute the disciplinary
proceedings against Ms Hunter.202
Ms Hunter was formally given notice of the
disciplinary hearing and the allegations against her on 19 November 2014.203 The
disciplinary hearing commenced on 9 February 2015.204 The legal team advised the
board, after Mr Sithole’s cross-examination, that the severity of the main allegation
against Hunter had been reduced and that it should consider a settlement and
mediation.205
200
FSB Answer vol 11 p 1018 para 220
201
FSB Answer vol 11 p 1019 para 221; HRS Ltter 11 August 2014 vol 8 p 724
202
Norton’s Letter 22 October 2014 vol 4 p 736
203
FSB Answer vol 11 p 1021 para 229
204
FSB Answer vol 11 p 1022 para 230
205
FSB Answer vol 11 p 1023 para 230
58
122. On 10 February 2015 the board decided to settle the matter and refer the remaining
allegations against Ms Hunter to a mediation process between her and Mr Tshidi.206
The disciplinary proceedings were settled on 12 February 2015.207
123. The mediation later floundered because Mr Tshidi and Ms Hunter could not agree on
the scope of the mediation. Mr Tshidi insisted on a wide scope which was not agreed
to by Ms Hunter and the Board.208 Advocate Antrobus furnished the Board with the
report of the failed mediation process on 11 March 2015.209
124. On 5 May 2015 Ms Hunter sent an urgent request to then Minister of Finance Mr
Nhlanhla Nene to conduct an investigation into financial misconduct by officials and
office bearers at the FSB. 210 Ms Hunter made several accusations against Mr Tshidi,
other employees of the FSB and board members.
125. After receipt of Ms Hunter’s letter, the Minister requested the board to express a view
on the state of the relationship between the board and Ms Hunter, including the effect
of that relationship on the regulatory functioning of the FSB relating to Ms Hunter’s
portfolio and indicate to him the board’s internal processes for dealing with complaints
206
FSB Answer vol 11 p 1023 para 231
207
Settlement Agreement 12 February 2015 vol 8 p 759
208
FSB Answer vol 11 p 1025 paras 235 - 237
209
Antrobus Report 11 March 2015 vol 18 p 1668
210
Hunter Letter to Minister 5 May 2015 vol 9 p 842
59
by members of the FSB’s Exco.211
126. On 8 June 2015 the Minister informed Ms Hunter that she should await the finalisation
of KPMG’s investigation and that Regulation 33 did not find any application at that
stage.212
127. On 9 June 2015 Ms Hunter submitted her Second Complaint.213 It was mostly directed
against the board. It decided it could not investigate itself and asked the Minister to
deal with it.214
128. In order to bring finality to the employment complaints, the board appointed Advocate
Nazeer Cassim SC on 2 September 2015 to do a written complaint inquiry into Ms
Hunter’s employment related grievances.215 Ms Hunter however objected to Advocate
Cassim’s terms of reference and refused to participate because she claimed all her
issues in her First Complaint and Second Complaint were inextricably linked to the
cancellations issues and that all the allegations should be dealt with together.216
Norton’s sent a letter of 21 September 2015 explaining Advocate Cassim’s mandate217
but Ms Hunter persisted with her refusal to participate in a letter from her new
211
Minister letter to Board 9 June 2015 vol 19 p 1822
212
Minister Letter to Hunter 8 June 2015 vol 9 p 854
213
FSB Answer vol 11 p 1027 para 242 ; Second Complaint 9 June 2015 vol 2 p 145
214
FSB Answer vol 11 p 1027 para 242
215
FSB Answer vol 11 p 1028 para 243; Cassim Letter of Appointment 2 September 2015 vol 10 p 900
216
FSB Answer vol 11 p 1028 para 244; Fasken Letter 15 September 2015 vol 10 p 901
217
Norton’s Letter 21 September 2015 vol 10 p 905
60
attorneys Fasken of 7 October 2015.218
129. In the end, it became clear to the board that Ms Hunter would disagree with every
attempt of the board to deal with her employment related complaint. The board came
to the conclusion that the written complaint process had been exhausted.219
Conclusion
130. Because Ms Hunter has not disclosed a cause of action, one is again not clear what
the benchmark is against which the board’s handling of her employment complaints
should be measured. We submit however that, whatever the benchmark, the board’s
handling of her complaints has been admirable. She has proven herself to be quite
impossible to satisfy.
131. Ms Hunter’s employment complaints in any event became moot on expiry of her
contract of employment in July 2016. Her complaint about the board’s handling of her
employment complaints has accordingly also become moot.
218
FSB Answer vol 11 p 1028 para 245; Fasken Letter 7 October 2015 vol 10 p 908
219
FSB Answer vol 11 p 1029 para 246
61
PRAYERS
132. The first and second respondents ask that Ms Hunter’s application against them be
dismissed with costs including the costs of two counsel. This prayer for costs is not
inconsistent with the Biowatch rule.220
fundamental rights.
Ms Hunter did not litigate to vindicate her
She purported to litigate instead in her capacities as Deputy
Registrar of Pension Funds and as Deputy Executive Officer of the FSB221 to compel
the FSB, its board and its senior management to perform their functions as she
believed they should be performed. It was a presumptuous venture from the outset.
There is no reason to insulate her from its adverse consequences.
Wim Trengove SC
Hephzibah Rajah
Counsel for
respondents
the
first
Chambers
Sandton
21 October 2016
220
Biowatch Trust v Registrar, Genetic Resources 2009 (6) SA 232 (CC) paras 26 to 28
221
Hunter Founding Affidavit vol 1 p 7 para 1.5
and
second
62
AUTHORITIES
Allpay Consolidated Investment Holdings v CEO, SASSA 2014 (4) SA 179 (CC)
Bato Star Fishing v Minister of Environmental Affairs 2004 (4) SA 490 (CC)
Biowatch Trust v Registrar, Genetic Resources 2009 (6) SA 232 (CC)
De Lange v Presiding Bishop, Methodist Church of Southern Africa 2015 (1) SA 106 (SCA)
Democratic Alliance v President of the RSA 2013 (1) SA 248 (CC)
Foize Africa v Foize Beheer 2013 (3) SA 91 (SCA)
Helen Suzman Foundation v President of the RSA 2015 (2) SA 1 (CC)
MEC for Health, Eastern Cape v Kirland Investments 2014 (3) SA 481 (CC)
Minister of Health v New Clicks SA 2006 (2) SA 311 (CC)
Pharmaceutical Manufacturers Association of SA and another: in re Ex Parte President of
the RSA 2000 (2) SA 674 (CC)
Quartermark Investments v Mkhwanazi 2014 (3) SA 96 (SCA)
Sidumo v Rustenburg Platinum Mines 2008 (2) SA 24 (CC)
Swissborough Diamond Mines v Government of the RSA 1999 (2) SA 279 (T)
Transnet v Rubenstein 2006 (1) SA 591 (SCA)
Vumazonke v MEC for Social Development, Eastern Cape 2005 (6) SA 229 (SE)
Wright v Wright 2015 (1) SA 262 (SCA)