RFS Administrators and Another v National Fund for Municipal Workers (NFMW) and Others (27742/2016) [2017] ZAGPPHC 255 (1 June 2017)

RFS Administrators and Another v National Fund for Municipal Workers (NFMW) and Others (27742/2016) [2017] ZAGPPHC 255 (1 June 2017)

The court held that section 9B of the Pension Funds Act was enacted to expand the scope of protection for disclosures to the Registrar, including administrators and other officers, not just employees. The statutory scheme aims to promote effective regulation and protect those who report impropriety. The termination of the administration contracts by the pension funds, if motivated by retaliation for protected disclosures, constitutes a detriment as contemplated by section 9B(3)(b) of the PFA and is actionable. Furthermore, while the termination clause in the contracts is neutral, its implementation may be contrary to public policy if used to frustrate statutory duties or retaliate against...

Citation
[2017] ZAGPPHC 255
Parties
Plaintiff: RFS Administrators (Pty) Ltd; Plaintiff: RFS Homeloans (Pty) Ltd; Defendant: National Fund for Municipal Workers (‘NFMW’); Defendant: National Pension Fund for Municipal Workers (‘NPFMW’); Defendant: Ronald John Field (Chairperson of NFMW and NPFMW); Defendant: S Samons (Principal Officer of NFMW and NPFMW); Defendant: Registrar of the Pension Fund; Defendant: Financial Services Board; Defendant: Independent Municipal Allied Trade Union (‘IMATU’); Defendant: South African Municipal Workers Union (‘SAMWU’); Defendant: South African Local Government Association (‘SALGA’); Defendant: Sanlam Ltd
Court
North Gauteng High Court, Pretoria
Jurisdiction
South Africa
Judgment Date
1 June 2017
Case Number
27742/2016
Procedural Posture
Civil Procedure / Exception to Particulars of Claim—defendants Excepted on Grounds of No Cause of Action
Outcome
Exception dismissed with costs, including costs of two counsel.
Judges
Murphy
Legal Topics
Protected Disclosure, Termination of Contract, Public Policy in Contract, Pension Fund Administration, Fiduciary Duties, Whistleblower Protection
Civil Procedure Commercial and Corporate Protected Disclosure Termination of Contract Public Policy in Contract Pension Fund Administration Fiduciary Duties Whistleblower Protection

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Parties

RFS Administrators (Pty) Ltd

Plaintiff

RFS Homeloans (Pty) Ltd

Plaintiff

National Fund for Municipal Workers (‘NFMW’)

Defendant

National Pension Fund for Municipal Workers (‘NPFMW’)

Defendant

Ronald John Field (Chairperson of NFMW and NPFMW)

Defendant

S Samons (Principal Officer of NFMW and NPFMW)

Defendant

Registrar of the Pension Fund

Defendant

Financial Services Board

Defendant

Independent Municipal Allied Trade Union (‘IMATU’)

Defendant

South African Municipal Workers Union (‘SAMWU’)

Defendant

South African Local Government Association (‘SALGA’)

Defendant

Sanlam Ltd

Defendant

Procedural Posture

Civil Procedure / Exception to Particulars of Claim—defendants Excepted on Grounds of No Cause of Action

Legal Issues

  1. 1 Whether section 9B of the Pension Funds Act protects administrators from retaliatory termination of contracts for making disclosures to the Registrar.
  2. 2 Whether the termination of administration contracts by the pension funds was unlawful and contrary to public policy.
  3. 3 Whether the motive for termination of the contracts is relevant to the lawfulness of the termination.

Ratio Decidendi

The court held that section 9B of the Pension Funds Act was enacted to expand the scope of protection for disclosures to the Registrar, including administrators and other officers, not just employees. The statutory scheme aims to promote effective regulation and protect those who report impropriety. The termination of the administration contracts by the pension funds, if motivated by retaliation for protected disclosures, constitutes a detriment as contemplated by section 9B(3)(b) of the PFA and is actionable. Furthermore, while the termination clause in the contracts is neutral, its implementation may be contrary to public policy if used to frustrate statutory duties or retaliate against...

Court Disposition

Exception dismissed with costs, including costs of two counsel.

Orders

  • The exception is dismissed.
  • The defendants are ordered to pay the costs of the exception, including the costs of two counsel.