DISTRIBUTABLE
(42)
Judgment
No. S.C. 42/02
Civil
Appeal No. 126/00
THE
LIQUIDATOR OF ZECO LIMITED (IN LIQUIDATION)
v
(1) THE
REGISTRAR OF PENSIONS AND PROVIDENT FUNDS
(2) THE MANAGER, OLD
MUTUAL EMPLOYEE
BENEFITS DIVISION
(3)
EDWARD LIONEL VENABLES
SUPREME
COURT OF ZIMBABWE
CHEDA JA,
ZIYAMBI JA & MALABA JA
BULAWAYO,
MARCH 26 & JULY 8, 2002
G
S Wernberg,
for the appellant
P
Ncube,
for the first respondent
No
appearance for the second respondent
R
M Fitches,
for the third respondent
CHEDA JA:
The appellant is the liquidator of ZECO Limited (ZECO),
a company with limited liability, incorporated
according to the laws
of Zimbabwe, which was provisionally liquidated by order of the High
Court on 25 August 1995, and which
order was made final on
8 December 1995.
The first
respondent is the Registrar of Pensions and Provident Funds appointed
in terms of s 3 of the Pensions and Provident
Funds Act
[Chapter 24:09].
The second respondent is the manager of Old Mutual Employee
Benefits Division who administered the Pension Fund. The third
respondent is a former employee of ZECO, who was a contributor to the
ZECO Pension Fund.
After
ZECO was placed under provisional liquidation, the first respondent
wrote, in reply to the second respondent, on 9 August
1996 as
follows:
RE:
WITHHOLDING OF BENEFITS: MR E L VENABLES, ZECO PENSION
FUND: $22 491.102
I
acknowledge receipt of your letter referenced REMT/km dated 1 August
1996 in which you were seeking the Registrars approval
to withhold
withdrawal of benefits due to the above-named member in terms of
section 52 of the Pensions and Provident Funds
Regulations,
1991.
Please
be advised that your request has been approved. However, the
benefits should not be utilised until the case has been finalised
by
the Court of Law.
On
29 January 1998, the first respondent (the Registrar)
wrote to the appellant and said, among other things:
However,
before approval to withhold Mr E L Venables pension
benefits is granted, you are required to submit to this
office
documentary evidence in the form of the Court judgment or summary
jurisdiction proving that Mr Venables was actually
tried in (a)
court of law and was found guilty of the alleged crimes of fraud and
theft resulting in the employer suffering pecuniary
loss.
By
19 March 1998 the appellants legal practitioner had responded
to the above, expressing surprise as authority to withhold
the
benefits had been granted in the letter dated 9 August 1996.
In the same letter it was admitted that there was no judgment
against
the third respondent (Venables), as the matter had not been
finalised. The letter also said if further documentary
evidence in
support of the charges of theft and fraud against Venables were
required, the writer should be advised of the nature
of the evidence
and documentation required.
On
1 September 1998 the Registrar advised the appellant as follows:
Please
be advised that in the absence of any Court judgment or summary
jurisdiction proving Venables guilty of dishonesty or fraud
resulting
in a pecuniary loss to ZECO Limited, the Registrar is directing
you to release the members pension benefits.
A
letter dated 4 January 1999 was sent to the appellants legal
practitioners, advising that they should allow Old Mutual
to pay
Mr Venables pension benefits, as the documents fell short of
what was required by SI 323 of 1991 (Pension Regulations
of
1991).
The
above events led to a court application, in which the appellant
sought an order setting aside the later decision of the Registrar
pending the determination of the loss attributed to Venables in case
no. 2518/98. The application was heard by KAMOCHA J,
who
upheld the decision of the Registrar. The appellant now appeals
against this decision.
The
appellant alleged that ZECO had to be placed under liquidation
because during its operations Venables had carried on the business
of
ZECO for a fraudulent purpose, alternatively recklessly,
alternatively with gross negligence, as envisaged in s 318(1) of
the Companies Act [Chapter 24:03] and was knowingly a party to the
carrying on of the business in the manner aforesaid.
Section 36
of the Pensions and Provident Funds Act authorises the Minister of
Finance, or any other Minister to whom the
President may, from
time to time, assign the administration of this Act, to make
regulations to include among other things the
following
(1) Subject
to the Maintenance Act [Chapter 5:09]
and the Childrens Protection and Adoption Act [Chapter 5:06],
the prohibition or control of cessions, pledging or hypothecation of
benefits payable by a registered fund and the protection of
such
benefits on insolvency or assignment or from attachment or execution
under a judgment or order of a court -
(j) the withholding of any
benefits payable by a registered fund where the member concerned
(i) has borrowed and not fully
repaid money from the fund or from his employer and has pledged his
rights to benefits from the fund
as security therefor; or
(ii) has
been discharged because of dishonesty which has resulted in his
employer suffering loss.
and
the person to whom such benefits or portion thereof may be paid.
In
accordance with the above, the Minister of Finance made the
Regulations in Statutory Instrument 323 of 1991. The relevant parts
of the Regulations read as follows:
51 (2)
Subject to the Maintenance Act [Chapter 5:09]
and the Childrens Protection and Adoption Act [Chapter 5:06]
and subsection (1) of section 52
(a) no right to a benefit payable
from a fund shall be capable of being ceded, pledged or hypothecated
or be liable to be attached
or be subject to any form of execution
under a judgment or order or a court; and
(b) any
purported cession, pledge or hypothecation of a right to any benefit
payable from a fund shall be ignored by the trustees.
(3) If
the estate of a member of a fund or any beneficiary of a former
member is sequestrated or assigned, his right to any benefit
from the
fund shall not form part of the assets of his insolvent or assigned
estate.
The
request to withhold the benefits of Venables was made in terms of
s 52 of the Regulations, which reads as follows:
52 (1) The
Rules of a fund shall provide that if the Registrar is satisfied that
a member of a fund
(a) who has left the service of
his employer and has not fully repaid any loan such as is referred to
in subsection (4) of section 18
of the Act from the fund or
from his employer and has pledged his rights to benefits from the
fund as security thereof; or
(b) has
left the service of an employer because of dishonesty which has
resulted in the employer suffering loss;
he
may authorise the fund to withhold any benefits payable to that
member until such time as the loan, together with interest, has
been
repaid or the loss has been made good, as the case may be.
The
Regulations go on to set out what is required in order to satisfy the
Registrar that there is good cause to withhold benefits
of a member
in section 52(3), which reads as follows:
(3) All
claims submitted for authorisation in terms of this section shall be
accompanied by the following documents
(a) a cession form or such other
documents signed by the member for a loan such as is referred to in
subsection (4) of section 18
of the Act, or for a similar
kind of loan granted by his employer or granted by a person
registered in terms of the Banking Act [Chapter 24:01],
the Building Societies Act [Chapter 24:02]
or the Insurance Act [Chapter 24:07];
(b) the
court judgment or summary jurisdiction proving the member guilty of
dishonesty or fraud involving a pecuniary loss to the
employer;
(c) a
statement indicating the amount being claimed and the amount of
benefits due to the member; and
(d) any
other documents or information the Registrar may subsequently
require.
The
above subsection clearly lays down the standard of proof required
before the Registrar can authorise any interference with a members
benefits from a pension fund. It shows also that a pension fund
should be treated as sacred, and is not to be interfered with
lightly.
This is because it is a contribution by a person during
their active working life as preparation for their future or old age.
The benefits are not to be interfered with unless the person has
voluntarily ceded or pledged his benefits, or has been involved
in
clear and proven acts of dishonesty which have caused pecuniary loss
to his employer.
It
is clear from the facts of this case, and the affidavits of the
parties, that the request of the appellant did not meet the above
strict requirements. None of the required documents were supplied
to support the request or justify the withholding of the benefits.
There was neither a cession document, nor a court judgment, nor
summary jurisdiction proving the member guilty of dishonesty or
fraud
involving a pecuniary loss to the employer.
Even
when asked for such documents, the appellant could not provide any,
except to argue that the matter was still pending.
Whether
the appellant would be able to prove the allegations against Venables
later or not is irrelevant. What is important is
that, at the time
of the request, there was no proof that he could place before the
Registrar for consideration. His allegation
remained a mere
allegation.
On
the other hand, the Registrar was aware of what was required and that
the requirements set out in the Regulations were not met.
The
appellant took issue with the Registrar for having previously
approved the request and submitted that the Registrar was not
entitled to revisit and change his decision. This argument was based
on the fact that once he had made the decision authorising
the
withholding of the benefits, the Registrar was then functus
officio.
It
was also argued that this issue had not been raised in the notice of
appeal, but was being raised for the first time in the heads
of
argument. On the other side, it was argued that this being a matter
of law, it could be raised at any time.
Indeed,
authorities such as Nissan
Zimbabwe (Pvt) Ltd v Hopitt (Pvt) Ltd
1997 (1) ZLR 567 (S) and Muchakata
v Netherburn Mine 1966
(1) ZLR 153 support the argument that a point of law may be raised
for the first time even on appeal, if it goes to the substance
of the
dispute and its consideration involves no unfairness to the other
party. In this case I do not believe there is any unfairness
to the
other party. In any event, the resolution of the matter does not
depend entirely on this issue.
There
is an alternative way of looking at this same issue. In his reply
to a letter from Old Mutual, the second respondent, in
agreeing to
the withholding of the pension benefits of the third respondent,
added the following:
However,
the benefits should not be utilised until the case has been finalised
by the Court of Law.
We
have not seen the letter from Old Mutual to the Registrar, but this
seems to suggest that in making the request the appellant could
have
indicated that there was a case pending before a court of law. This
letter from the Registrar is dated 9 August 1996.
On
29 January 1998 the Registrar, in reply to yet another letter
from the appellant, stated the following:
However,
before approval to withhold Mr E L Venables pension
benefits is granted, you are required to submit to this
office
documentary evidence in the form of the Court judgment or summary
jurisdiction proving that Mr Venables was actually
tried in (a)
court of law and was found guilty of the alleged crimes of fraud and
theft resulting in the employer suffering pecuniary
loss.
I
now await your further submission so that we can finalise this
matter.
The
above was in reply to the letter from the appellant dated 25 November
1997.
Again
we do not have that letter and its exact contents remain unknown.
But what is clear is that the issue of withholding Venables
benefits continued to be discussed between the Registrar and the
appellant.
The
letter of 9 August 1996 suggests that the authorisation by the
Registrar was conditional upon the case against Venables
being
finalised by a court of law. Obviously this condition was never
met.
The
Registrars letter of 29 January 1998 again advises the
appellant of the requirements of the Registrars office before
the
withholding could be approved. He again mentioned the documentary
proof required to prove that Venables was tried in a court
of law and
was found guilty of the alleged crimes of fraud and theft resulting
in the employer suffering pecuniary loss.
Again
these conditions were not met by the appellant. The appellant must
have passed this letter to his legal practitioners who
then wrote to
the Registrar saying that the Registrar had already granted authority
to withhold the benefits.
In
their letter they admitted that there was no judgment in respect of
charges against Venables. They then ask the Registrar to
advise the
nature of evidence and documentation the Registrar required, despite
his detailed letter of 29 January 1998.
A
letter from the legal practitioners to the Registrar dated 26 August
1997 advises the Registrar that on that same date the
charges against
Venables had been withdrawn in the magistrate's court.
Faced
with this development, it is clear that the Registrar realised then
that the conditions he had insisted on could not be met.
Accordingly,
the Registrar had good reason to revisit the matter. One has to
take into account also the fact that even his original
authority was
conditional upon this requirement being met. Between the first
letter wherein he granted the conditional authority
and the final
decision, the appellant seems to have engaged the Registrar on the
matter. The letter from his legal practitioners
asks for any
further evidence that the Registrar required. This clearly supports
the view that the appellant appreciated that the
Registrars
decision was not final but conditional.
In
view of the court case against Venables being withdrawn, the
Registrar was therefore entitled to revisit and finalise the matter.
He cannot be regarded as having become functus
officio.
In
addition the first conditional decision did not render the Registrar
functus officio
as there is no evidence to show that Venables was heard on the
matter. Neither is there anything to show that the discussions and
decisions made were communicated to him. The Registrar was
therefore entitled to change his decision on realising that the
conditions
he had set were not being met by the appellant. He must
have concluded, and correctly so, that once the court case was
withdrawn,
there was no further basis for the appellant to hold onto
Venables pension benefits.
In
view of the above, I agree with the court a quo
in holding that the appellant had failed to prove his allegation
against Venables which would have entitled him to withhold his
pension
benefits.
Accordingly,
the appeal cannot succeed and it is dismissed with costs.
ZIYAMBI
JA: I agree.
MALABA JA:
I agree.
Ben
Baron & Partners,
appellant's legal practitioners
Coghlan
& Welsh, first
respondent's legal practitioners
Webb,
Low & Barry, third
respondent's legal practitioners