Fourie v Eskom Pension and Provident Fund (18/1355) [2019] ZAGPJHC 188 (6 June 2019)

Fourie v Eskom Pension and Provident Fund (18/1355) [2019] ZAGPJHC 188 (6 June 2019)

The court held that, in terms of the Pension Funds Act and the Income Tax Act, the tax liability arising from the assignment of pension fund interest to a non-member spouse pursuant to a divorce order accrues to the member spouse. The court relied on the Russow v Reid precedent and SARS General Note 33, which confirm that the member is liable for the tax, even if the benefit is paid to the non-member spouse. The Plaintiff's remedy would have been to recover the tax from her ex-husband, but this was not possible as his estate had been sequestrated. The Defendant's calculation of the Plaintiff's revised deemed start date was correct, and the Plaintiff's request for a declarator was...

Citation
[2019] ZAGPJHC 188
Parties
Plaintiff: Johanna Susanna Fourie; Defendant: Eskom Pension and Provident Fund
Court
South Gauteng High Court, Johannesburg
Jurisdiction
South Africa
Judgment Date
6 June 2019
Case Number
18/1355
Procedural Posture
Civil Trial / Final Judgment
Outcome
Plaintiff's action dismissed with costs, including wasted costs as tendered by the Plaintiff in respect of the exception taken by the Defendant.
Judges
I Opperman
Legal Topics
Divorce Settlement, Pension Fund Interest, Income Tax Liability, Service Adjustment, Costs Order
Civil Procedure Family and Children Tax Law Divorce Settlement Pension Fund Interest Income Tax Liability Service Adjustment Costs Order

Case Brief

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Parties

Johanna Susanna Fourie

Plaintiff

Eskom Pension and Provident Fund

Defendant

Procedural Posture

Civil Trial / Final Judgment

Legal Issues

  1. 1 Who is responsible for the tax liability arising from the assignment of pension fund interest to a non-member spouse pursuant to a divorce order.
  2. 2 Whether the Defendant's calculation of the Plaintiff's revised deemed start date in the pension fund is correct.
  3. 3 Whether the Plaintiff is entitled to a declarator that her deemed start date should be 1 April 1994.

Ratio Decidendi

The court held that, in terms of the Pension Funds Act and the Income Tax Act, the tax liability arising from the assignment of pension fund interest to a non-member spouse pursuant to a divorce order accrues to the member spouse. The court relied on the Russow v Reid precedent and SARS General Note 33, which confirm that the member is liable for the tax, even if the benefit is paid to the non-member spouse. The Plaintiff's remedy would have been to recover the tax from her ex-husband, but this was not possible as his estate had been sequestrated. The Defendant's calculation of the Plaintiff's revised deemed start date was correct, and the Plaintiff's request for a declarator was...

Court Disposition

Plaintiff's action dismissed with costs, including wasted costs as tendered by the Plaintiff in respect of the exception taken by the Defendant.

Orders

  • The action is dismissed with costs including the wasted costs as tendered by the Plaintiff in respect of the exception taken by the Defendant.