IN THE SUPREME COURT OF SWAZILAND
Held at Mbabane Civil Appeal Case No.53/2010
In the matter between:
PUBLICE SERVICE PENSION FUND Appellant
And
NKULULEKO MXONDISI MAYISELA 1st Respondent
MANDLA Z. MKHWANAZI N.O. 2nd Respondent
CORAM: FOXCROFT J.A.
EBRAHIM J.A.
TWUM J.A.
For the appellant : Adv. A. J. Lamplough
For the respondent : Mr. Attorney M.Z. Mkhwanazi
[Public Service Pension Fund distribution – definition of “dependents” in Retirement Funds Act, 2005 – discretion of Fund to make equitable awards – question of paternity not relevant in deciding interpretation of sub paragraph (b) of the definition section in section 2 of the Act – appeal allowed and Pension Fund distribution approved.]
JUDGMENT
FOXCROFT J.A.:
[1] The appellant, which I shall refer to as the “Fund”, appealed against the order of the High Court setting aside the distribution of a gratuity of the late Melvyn Mxolisi Mayisela (“the deceased”) to certain of his dependants.
[2] The first issue raised on appeal was the central one before the High Court: the meaning of “dependant” as defined in the Retirement Funds Act of 2005, hereinafter referred to as the RF Act.
[3] Section 2 of the RF Act (the definition section) defines “dependant” in relation to a member as
“(a)a person in respect of whom the member is legally
liable for maintenance;
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a person in respect of whom the member is not legally liable for maintenance if such person-
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was in the opinion of the management board dependent on the member for maintenance;
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is the spouse of the member and shall include a spouse as a result of any customary or religious union;
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is a child of the member and shall include a posthumous child, an adopted child and an illegitimate child;
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a person in respect of whom the member would have become legally liable for maintenance, had the member not died.”
[4] The first respondent, a biological son of the deceased, applied in the Court a quo for an order restraining the fund from distributing gratuities to two children whom he claimed were not dependants of the deceased. He also applied for a declaration that the said minor children were
“not entitled to benefit anything from the estate of the late Melvyn Mxolisi Mayisela and that they are not heirs and beneficiaries to the estate aforesaid.”
[5] This prayer reveals a fundamental misconception. The Fund does not normally make payments into the estate of a deceased person. Payments of benefits are made to beneficiaries treated by the Fund as dependants. Only in the event of any part of the sum available not being paid to a beneficiary is that residue paid to the estate. The question does not arise in this case since 100 percent of the benefit was regarded by the Fund as payable.
The application was based on an allegation on “absence of paternity proof” and the failure on the Fund’s part to apply its mind to the matter.
[6] A document annexed to the application by the first respondent and marked P3 emanated from the Senior Legal Officer of the Fund and detailed what had happened at a meeting reconvened by the Fund on 12 February 2010 following upon an initial meeting held on 16 December 2008. The document refers to the statement at the meeting of Khulile Nxumalo, the “live-in lover” of the deceased, that the deceased had maintained the two girls Lindiwe and Natasha, and herself. This information “was acknowledged by all the members of the family. Nozipho who was most vocal, admitted with reservations. She said that even though the children were dependent on the deceased, he had to maintain them under duress, since the mothers of the children were opportunists and took advantage of deceased’s wealth.”
Nozipho Ntseso is described in what may be called the minutes of this meeting as the deceased’s sister.
[7] In appellant’s answering affidavit, Ms. Philile Mangena, the Fund’s Senior Legal Officer, who had dealt with the recommendation to the Fund as to distribution of the benefit payable in respect of the deceased, deposed to the discussions held at the two meetings of the family which were held. Importantly, she recorded that at the first meeting of the family on 16 December 2008, the sisters of the deceased submitted that they would approach their attorney since they disputed the paternity of the two girls, Lindiwe and Natasha. This was to take the same stance as the deceased’s son, now the first respondent in the founding affidavit. In her recommendations to the Fund, the deponent, Ms. Mangena, made it clear (at page 80 of the Record) that the Fund
“in exercising its discretion on how to distribute pension benefits of a deceased member is guided by dependency of the children, wives and relatives of the deceased. The issue of paternity is not significant to the first respondent.” (my emphasis).
Again, at page 83 of the Record, the deponent repeats that
“The deceased’s sisters, not the first applicant as the minutes reflect raised the issue of paternity regarding Lindiwe and Natasha. As I have mentioned above the determining factor to the first respondent is dependency not extraneous factors such as paternity. It was for that reason that the first respondent ignored such paternity results as they were irrelevant in determining the persons who were dependant to the deceased.”
[8] It is convenient at this stage to deal with an argument advanced by Mr. Mkhwanazi for the respondents. He referred to a document (annexure “O”) introduced by the first respondent which appears at page 52 of the Record. It appears to be a document evidencing payments of allocated amounts to beneficiaries and records that the amount available for distribution was distributed to four persons. The two girls Lindiwe and Natasha are described as daughters. The argument, as I understood it, was that this document showed that the Fund had originally been of the view that these girls were biological daughters but had somehow changed its mind and raised the dependency argument. In so doing, the Fund had not exercised a proper discretion. This submission is without substance and mischievous. The affidavit which I have dealt with above of Ms. Mangena demonstrates the view which she had taken and recommended.
The undated distribution statement, annexure “O”, obviously came after the decision was taken, since it records the manner in which the gratuity was distributed, and does not evidence any change of mind. Neither does form “O” reflect that the girls were biological daughters. The finding which the Fund reached was that they were dependants and whatever anyone else called them on a form cannot in any way reflect on the truthfulness of Ms. Mangena. If any basis for a “change of heart” had existed, Mr. Mkhwanazi should have applied to the Court a quo for Ms. Mangena to be cross-examined by him when this extraordinary suggestion could have been tested.
[9] The only other matter before us was the interpretation of the definition of “dependant”. Mr. Lamplough, for the Fund, submitted that the Court a quo erred in holding that a child cannot be considered under Section 2(b)(1) of the RF Act since children are exclusively dealt with under Section 2(b)(iii). As he pointed out this requires the words “who is not a child” to be inserted between the words “a person” and “in respect of whom the member is not legally liable” in Section 2(b)(i).
[10] The first additional observation which I would make is that the word “person” in Section 2(a) obviously includes children. Persons in respect of whom a member is legally liable would include, in the first place, a wife or wives, and children. It is unlikely that in the very next section, “a person” means “a person who is not a child”.
[11] Ms. Rosemary Hunter, together with three co-authors, points out in a Commentary on the Pension Funds Act in South Africa, at page 50 under the heading “child dependants” [Section 2(b) iii]
that
“The third category of dependants of a deceased member whom he or she may not have been liable to maintain is the category of children of the deceased. Such children would include the deceased member’s biological children, whether born from or outside the member’s marriage or after the member’s death, and his or her adopted children. 229 Minor children would usually fall into the category of ‘legal dependants,’ but once a child reaches the age of majority there is no longer an automatic legal duty on the member to support that child. There may be a duty of support if the child is still in need of financial support or wishes to take the opportunity to obtain what a court might regard as ‘suitable education’ and the parent is able to provide it. However, even if there is no such duty, the inclusion of this category in the definition of dependant ensures that any child of the deceased, including an adult child, is automatically included as a potential beneficiary for the purposes of the allocation of shares of a benefit payable on the death of the deceased.”
[12] Footnote 229 in the above-cited passage is
“if the deceased member was maintaining a child that was not biologically his or her own, and had not adopted the child, then that child would be a factual dependant.”
Hunter et al go on in the footnote to refer to Heystek v. Heystek [2002] 2 All SA 401 (T) at 403-404 where that South African Court observed obiter that
“I interpose here to note that by virtue of section 28 (1)(b) of the Constitution every child in this country has a right to parental care… Thus, parental care is not confined to natural parents (see SW v F 1997 (1) SA 796 (0) at 802 G-H) but extends to stepparents, adoptive parents and foster parents. Inherent in the notion of parental care is concomitantly the child’s right to basic nutrition, shelter and basic health care services and social services.”
The judgment is also reported in the South African Law Reports in 2002 (2) SA 754 (T), at 757.
Section 29 (3) of the Constitution of Swaziland provides also that
“The child has the right to be properly cared for and brought up by parents or other lawful authority in place of parents.”
I agree with the remarks in Heystek v. Heystek and consider that they are equally applicable in Swaziland.
[13] Hunter et al clearly treat the child being maintained by a non-biological father as a dependant of that man and theiranalysis provides a logical basis for the need for “children” in a loose sense, to be catered for in special case situations in a third category. This in no way detracts from a child’s right to be classed as a dependant, being a person, in respect of whom a member is not legally liable for maintenance, but who is in fact dependant on the member for maintenance. If this were not so, children like those in this case who were in fact maintained for years by the deceased as members of his household would be in a worse position than a posthumous, adopted or illegitimate child referred to in Section 2(b)(iii). This would be to do a great injustice to children being maintained in fact for a number of years, as in this case.
[14] Mr. Lamplough also referred us to a South African decision in Mashazi v African Products Retirement Benefit Provident Fund 2003 (1) SA 629 (W) where an almost identical provision in a South African statute was considered. That act, the Pension Funds Act, No.24 of 1956, in its definition section defined “dependant”, in identical terms in paragraph (a) to those of 2(a) in the Swaziland RF Act. Sub-paragraph (b) in the South African Act added only the words “in fact” before the words “dependant on the member” for maintenance. In my view the existence or not of the words “in fact” cannot make any difference to the meaning. Whether a person was “in fact dependant” or “dependant” upon a member must mean the same thing in this context where legal dependency has already been dealt with. In the Mashazi case (supra) two young children who were nephews of the deceased were taken care by him for a period, “in fact” being maintained by him. Section 37C of the South African Act, is in very similar terms to section 33(1) of the RF Act, and Hussain, J. remarked that in South Africa
“Section 37C of the Act was intended to serve a social function. It was enacted to protect dependency, even over the clear wishes of the deceased. This section specifically restricts freedom of testation in order that no dependants are left without support. Section 37C(1) specifically excludes the benefits from the assets in the estate of a member. Section 37C enjoins the trustees of the pension fund to exercise an equitable discretion, taking into account a number of factors. The fund is expressly not bound by a will, nor is it bound by the nomination form. The contents of the nomination form are there merely as a guide to the trustees in the exercise of their discretion. Hence the declaration in the nomination form which I quoted above. (see Sithole v ICS Provident Fund and Another 2000 (4) BPLR 430 and Kipling v Unilevers SA Pension Fund (1) 2001 (8) BPLR 2368 at 2373.) The fact that the distribution, approved by the first respondent, is not strictly according to the nomination form, cannot found a ground for review.”
I consider that these remarks are also equally applicable in Swaziland.
[15] Hussain, J. proceeded to deal with the equivalent section governing the identification of “dependants” and found, correctly in my view, that the children in question in that matter were factually dependant of the deceased. He added that three of the beneficiaries had been nominated by the deceased.
[16] This led to a final submission by Mr. Mkhwanazi that the case was distinguishable from the appeal before us since there was no nomination of the children in this appeal. That submission ignores what Hussain, J. had said earlier in regard to the nomination form only being a guide, and that a pension fund is not bound by a will or nomination form. The Fund must act equitably. If this happens to coincide with the wishes of the deceased, so be it. The nomination cannot determine the outcome. Accordingly, the case is not distinguishable on that ground.
[17] The Court a quo erred in stating that the Fund had no power to determine paternity. It had not and never sought to do so because, as it stated through its legal advisor, since this was irrelevant. A further misdirection was the view that the Fund had acted ultra vires and in an arbitrary manner. The fact that paternity was in dispute had no bearing upon the issue of factual dependency and the Fund, through its representative made no attempt to determine the status of minors. A further clear misdirection is the finding at page 10 of the judgment that
“it cannot be that one would have dependants other than those he is legally bound to maintain.”
That is precisely what the RF Act provides for in section 2(b).
The learned Judge a quo was also wrong to criticize the Fund for “entering the fray” and “defending a side.” The legal adviser was simply carrying out her duty to make a recommendation so that the Fund could carry out its statutory duty to distribute a benefit. In my view she took no side.
[18] Accordingly,
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the appeal succeeds with costs, and the order of the Court a quo is set aside;
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the order set aside is substituted with the following order:-
“The application is dismissed with certified costs of Counsel”
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as far the costs of appeal are concerned the respondents are to pay, the one paying the other to be absolved, the certified costs of Counsel as provided in Court of Appeal Rule 39.
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J.G. FOXCROFT
JUSTICE OF APPEAL
I agree
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A.M. EBRAHIM
JUSTICE OF APPEAL
I agree
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DR. S. TWUM
JUSTICE OF APPEAL
DELIVERED IN OPEN COURT AT MBABANE ON 31ST MAY 2011.
