Mr Simon Nash had been a member of the CADAC Pension Fund since 1995 and was director and chairman of CADAC (the principal employer), as well as chairman and trustee of the Fund. The Fund was placed under curatorship on 21 December 2010 following the "Ghavalas scheme" through which surplus funds were unlawfully withdrawn from eight pension funds. A long-standing adversarial relationship existed between Mr Nash and the Fund's curator, Mr Mostert. In November 2018, after turning 70, Mr Nash gave notice to withdraw his pension benefit of approximately R36.5 million. In October 2019 he was advised that the curators had flagged his benefit under section 37D of the Pension Funds Act. Mr Nash launched a main application in December 2019 seeking a declaratory order that the flagging was unlawful and that he was entitled to withdraw his benefits. In April 2020, during the COVID-19 national lockdown, the curators notified Mr Nash and other members that the Fund would be treated as a "closed fund" with no further contributions accepted and past contributions to be refunded. This led to an urgent interlocutory application for an interdict. CADAC sought leave to intervene in the main application, and three employee members sought to intervene in the interlocutory application. The High Court dismissed all applications on the basis that Mr Nash had failed to obtain leave of court as required by two previous court orders (one declaring the Fund under curatorship and one declaring Mr Nash a vexatious litigant).
The appeal was upheld with costs. The order of the Gauteng Division of the High Court was set aside and substituted with an order granting: (1) Mr Nash leave to institute the interim relief application; (2) CADAC leave to intervene and join in the main application; (3) the three employee members leave to intervene and join in the interim application; (4) an interim interdict against the curators and administrator preventing them from refusing to accept further contributions from or on behalf of CADAC and/or members of the Fund, and from refunding any such contributions, pending finalisation of the main application; and (5) costs against the respondents jointly and severally, including costs of two counsel.
Where a court order requires a party to obtain leave before instituting proceedings, such leave may be sought within the application for substantive relief itself, rather than requiring a separate prior application for leave. The court hearing the application can first determine whether to grant leave and, if leave is granted, proceed to hear the merits of the substantive application in the same proceedings. This approach is practical, cost-effective, and avoids unnecessary duplication where the facts supporting the application for leave are identical to those supporting the substantive relief. A party seeking to intervene in proceedings must demonstrate a legal interest in the subject matter that may be prejudicially affected. Where pension fund members face exclusion from the fund and refund of contributions pending a substantive dispute about fund administration, an interim interdict will be granted if: (a) they establish a prima facie right (membership and entitlement to make contributions); (b) that right is under threat (decision to close fund and refund contributions); (c) they will suffer irreparable harm (loss of pension benefits and tax liability); and (d) the balance of convenience favours maintaining the status quo pending determination of the main dispute.
The court noted the long history of adversarial litigation between Mr Nash and Mr Mostert arising from the "Ghavalas scheme" involving unlawful appropriation of pension fund surpluses, but did not make findings on those underlying disputes as they were to be determined in the main application. The court observed that the curators' decision to exclude members from the Fund was taken abruptly at the start of the COVID-19 national lockdown without consultation, suggesting this timing may have been problematic, though this was not determinative. The court indicated that should Mr Nash threaten to take any action that would subvert the determination of his membership status in the main application, the respondents could approach the courts to preserve the status quo, thus providing guidance on how the interim arrangement should operate. The court's modification of the relief sought - rejecting the broad prayer for administration according to the Act and Rules in favour of a narrower interdict regarding contributions - demonstrates the principle that interim relief should be tailored to preserve the status quo rather than determine substantive rights.
This case is significant for establishing important principles regarding procedural requirements in South African civil litigation, particularly: (1) The approach to applications for leave to institute proceedings where previous court orders require such leave - the court confirmed that leave can be sought within the substantive application itself rather than requiring a separate prior application, adopting a practical approach over formalism; (2) The test for intervention in proceedings, affirming that parties demonstrating a legal interest that may be prejudicially affected are entitled to intervene; (3) The application of interim interdict principles in the context of pension fund administration, particularly where curators take sudden action that threatens members' pension rights and creates irreparable harm. The case also illustrates the courts' willingness to protect pension fund members' rights pending determination of substantive disputes about fund administration.
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