Investec Employee Benefits Limited v Marais & Others

The first respondent, Dr Marais, was an investor member in the Vantage Preserver Provident Fund and Vantage Preserver Pension Fund. In October 2000, he gave written notice of his intention to withdraw from both funds. The appellant applied for a tax directive on 3 November 2000. By June 2001, Marais became aware that his withdrawal benefits had been reduced due to revised bonus declarations (from 9% interim bonus to 0% declared bonus). The value of his pension fund benefits fell from R4,949,558.21 (as at 31 January 2001) to R4,487,329.59 (as at 31 May 2001). The appellant paid the reduced benefits to Marais in July 2001. After correspondence in which the appellant explained the basis for the reduction, the matter appeared to be headed for arbitration in September 2001. Marais heard nothing further until he lodged a complaint with the Pension Funds Adjudicator on 20 July 2004, some three years later. The Adjudicator upheld the complaint on 11 July 2005. The appellant applied to the High Court in August 2005 (one day late) to set aside the Adjudicator's determination.

• Whether the High Court could condone the late filing of an application to review the Pension Funds Adjudicator's determination under section 30P(1) of the Pension Funds Act
• Whether the Prescription Act 68 of 1969 applies to claims forming the subject matter of complaints to the Pension Funds Adjudicator
• Whether the Pension Funds Adjudicator has the power under section 30I(3) of the Pension Funds Act to extend periods of prescription laid down in the Prescription Act
• Whether the first respondent's claim had prescribed before he lodged his complaint with the Adjudicator
• When prescription began to run in respect of the first respondent's claim

The appeal succeeded with costs. The order of the High Court was set aside and replaced with an order: (1) condoning the applicant's failure to bring its application within the period laid down in section 30P(1) of the Pension Funds Act; and (2) setting aside the Pension Funds Adjudicator's determination of 11 July 2005 and replacing it with an order dismissing the complaint.

The Prescription Act 68 of 1969 applies to claims forming the subject matter of complaints to the Pension Funds Adjudicator, as evidenced by section 30H(3) of the Pension Funds Act which provides that receipt of a complaint interrupts prescription. The Adjudicator's power under section 30I(3) of the Pension Funds Act to extend periods and condone non-compliance with time limits is restricted to periods and time limits prescribed by the Pension Funds Act itself and does not extend to the provisions of the Prescription Act. The two Acts serve different and discrete functions. The Adjudicator does not have power to extend periods of prescription that have already run or to revive claims that have prescribed under the Prescription Act. Section 30I of the Pension Funds Act is not inconsistent with the Prescription Act for purposes of section 16(1) of the Prescription Act. Prescription begins to run when the creditor has knowledge of the identity of the debtor and of the facts from which the debt arises, in terms of section 12(3) of the Prescription Act.

The court made obiter comments criticizing the delay in the High Court judgment. The judgment was delivered in May 2010, over four years after the matter was argued and judgment reserved. The court stated that such delay, which was not explained in the judgment, is totally unacceptable, citing Exdev (Pty) Ltd v Pekudei Investments (Pty) Ltd 2011 (2) SA 282 (SCA) paras 23-25. The court noted that the delay in this case was much longer than in Exdev. While the leave to appeal judgment mentioned that the judge had been on sick leave for a considerable period, the court indicated that unexplained delay of this magnitude is not acceptable. The court also noted that following Samancor Group Pension Fund v Samancor Chrome 2010 (4) SA 540 (SCA), the High Court is entitled to condone non-compliance with statutory time limits such as the one under section 30P(1) of the Pension Funds Act, which overturned the High Court's earlier view that it had no such power.

This case establishes important principles regarding the interaction between the Pension Funds Act and the Prescription Act. It clarifies that: (1) the Prescription Act 68 of 1969 applies to claims forming the subject matter of complaints to the Pension Funds Adjudicator; (2) the Adjudicator's powers under section 30I(3) to extend time periods are limited to periods prescribed in the Pension Funds Act and do not extend to periods of prescription under the Prescription Act; and (3) the Adjudicator cannot revive claims that have already prescribed. The case serves as an important limitation on the Adjudicator's powers and confirms that complainants cannot use the Adjudicator's process to circumvent the ordinary rules of prescription. It also reinforces that High Courts have power to condone late applications to review the Adjudicator's determinations under section 30P(1), following Samancor.