Municipal Workers Retirement Fund v Ndlambe Local Municipality (4884/2017) [2018] ZAECGHC 139 (22 November 2018)

Municipal Workers Retirement Fund v Ndlambe Local Municipality (4884/2017) [2018] ZAECGHC 139 (22 November 2018)

The court found that the Municipality's monthly payments constituted ongoing acknowledgment of its statutory obligation under section 13A of the Pension Funds Act, thereby interrupting prescription. The Municipality was liable for the full shortfall in contributions, regardless of whether the amounts were deducted from employees' remuneration or whether the employees were still employed. The statutory obligation to pay interest at the prescribed rate was affirmed, and the court rejected the Municipality's argument that lack of awareness or notification by the Fund excused non-payment. The defence of prescription failed, and the Municipality was ordered to pay the full amount claimed,...

Citation
[2018] ZAECGHC 139
Parties
Plaintiff: Municipal Workers Retirement Fund; Defendant: Ndlambe Local Municipality
Court
Eastern Cape High Court, Grahamstown
Jurisdiction
South Africa
Judgment Date
22 November 2018
Case Number
4884/2017
Procedural Posture
Civil Judgment / Trial
Outcome
Plaintiff's claim succeeds in full; defendant ordered to pay the claimed amount, interest, and costs.
Judges
J M Roberson
Legal Topics
Pension Funds Act, Statutory Obligation, Prescription, Compound Interest
Civil Procedure Commercial and Corporate Pension Funds Act Statutory Obligation Prescription Compound Interest

Case Brief

Summary, issues, holding and outcome

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Parties

Municipal Workers Retirement Fund

Plaintiff

Ndlambe Local Municipality

Defendant

Procedural Posture

Civil Judgment / Trial

Legal Issues

  1. 1 Whether the defendant municipality is liable for the shortfall in pension fund contributions for the period July 2007 to February 2013.
  2. 2 Whether the defence of prescription applies to the plaintiff's claim.
  3. 3 Whether the municipality is liable for interest on the shortfall and for contributions relating to former employees.

Ratio Decidendi

The court found that the Municipality's monthly payments constituted ongoing acknowledgment of its statutory obligation under section 13A of the Pension Funds Act, thereby interrupting prescription. The Municipality was liable for the full shortfall in contributions, regardless of whether the amounts were deducted from employees' remuneration or whether the employees were still employed. The statutory obligation to pay interest at the prescribed rate was affirmed, and the court rejected the Municipality's argument that lack of awareness or notification by the Fund excused non-payment. The defence of prescription failed, and the Municipality was ordered to pay the full amount claimed,...

Court Disposition

Plaintiff's claim succeeds in full; defendant ordered to pay the claimed amount, interest, and costs.

Orders

  • The defendant is to pay to the plaintiff R13 649 186.21 together with interest thereon at the repo rate plus one third thereof plus 8%, capped at 20% per annum, from 28 September 2018 to date of payment.
  • The defendant is to pay the costs of the action, including the wasted costs of 6 November 2018, the costs of Senior Counsel, and the subsistence, travel, and qualifying expenses of the plaintiff's expert witness, Mr Jan Adendorff.