Tek Corporation Provident Fund and Others v Lorentz (490/97) [1999] ZASCA 54; [1999] 4 All SA 297 (A); 1999 (4) SA 884 (SCA); (1999) 20 ILJ 2797 (SCA) (3 September 1999)

Tek Corporation Provident Fund and Others v Lorentz (490/97) [1999] ZASCA 54; [1999] 4 All SA 297 (A); 1999 (4) SA 884 (SCA); (1999) 20 ILJ 2797 (SCA) (3 September 1999)

The Supreme Court of Appeal held that the employer is not lawfully entitled to use the surplus in the pension fund to avoid its obligation to contribute to the provident fund. The rules of the pension fund do not empower the trustees to transfer surplus to the provident fund for the benefit of transferring members, nor do they permit the orders granted by the court a quo. The employer's entitlement to a contribution holiday is limited to the pension fund itself and is not dependent on the source of the surplus. The registrar's approval under section 14(1) of the Pension Funds Act does not preclude judicial review of the trustees' decisions if those decisions are ultra vires or improperly...

Citation
[1999] ZASCA 54
Parties
Appellant: Tek Corporation Provident Fund and 10 Others; Respondent: Roy Spencer Lorentz
Court
Supreme Court of Appeal
Jurisdiction
South Africa
Judgment Date
3 September 1999
Case Number
490/97
Procedural Posture
Civil Appeal / Appeal From High Court (wld) Judgment
Outcome
Appeal upheld in part; declaratory order granted prohibiting use of surplus to avoid contributions to the provident fund; all other relief dismissed; costs apportioned.
Judges
Van Heerden, Smalberger, Grosskopf, Howie, Marais
Legal Topics
Pension Fund Surplus, Contribution Holiday, Fiduciary Duties of Trustees, Statutory Interpretation, Transfer of Fund Assets
Commercial and Corporate Civil Procedure Pension Fund Surplus Contribution Holiday Fiduciary Duties of Trustees Statutory Interpretation Transfer of Fund Assets

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Downloadable case file Legal principles 4 Authorities cited 7 Party arguments 2
Sign in to unlock

Parties

Tek Corporation Provident Fund and 10 Others

Appellant

Roy Spencer Lorentz

Respondent

Procedural Posture

Civil Appeal / Appeal From High Court (wld) Judgment

Legal Issues

  1. 1 Whether the employer is entitled to use the surplus in the pension fund to avoid contributions to the provident fund.
  2. 2 Whether the trustees are empowered to transfer surplus from the pension fund to the provident fund for the benefit of transferring members.
  3. 3 Whether the rules of the pension fund permit the orders granted by the court a quo.

Ratio Decidendi

The Supreme Court of Appeal held that the employer is not lawfully entitled to use the surplus in the pension fund to avoid its obligation to contribute to the provident fund. The rules of the pension fund do not empower the trustees to transfer surplus to the provident fund for the benefit of transferring members, nor do they permit the orders granted by the court a quo. The employer's entitlement to a contribution holiday is limited to the pension fund itself and is not dependent on the source of the surplus. The registrar's approval under section 14(1) of the Pension Funds Act does not preclude judicial review of the trustees' decisions if those decisions are ultra vires or improperly...

Court Disposition

Appeal upheld in part; declaratory order granted prohibiting use of surplus to avoid contributions to the provident fund; all other relief dismissed; costs apportioned.

Orders

  • It is declared that the trustees of Tek Corporation Pension Fund (now Plessey Corporation Pension Fund) are not lawfully entitled to use the surplus in the fund to permit Tek Corporation Limited (now Plessey SA Limited) to reduce, diminish or avoid its obligation to make contributions to Tek Corporation Provident...
  • For the rest, the application is dismissed.