CIV/APN/418/99

IN THE HIGH COURT OF LESOTHO

In the matter between

PETER LEFUME LEPAMO 1ST APPLICANT

MOKUTU MAKARA 2ND APPLICANT

ARTHUR MAKHALEMELE 3RD APPLICANT

SEKOALA MOTSOASELE 4TH APPLICANT

ROBERT LIKHANG 5TH APPLICANT

'MAMPABI MOOROSI 6TH APPLICANT

MAKATEMOLISANA 7TH APPLICANT

THABISO TJAMELA 8TH APPLICANT

and

LESOTHO BANK 1ST RESPONDENT

THE GOVERNOR,

CENTRAL BANK OF LESOTHO

(In his capacity as chairperson-chairperson-
coordinating committee old Lesotho Bank) 2ND RESPONDENT
THE GENERAL MANAGER

LESOTHO BANK 3RD RESPONDENT

MINISTER OF FINANCE 4TH RESPONDENT

ATTORNEY-GENERAL 5TH RESPONDENT

JUDGMENT

Delivered by the Honourable Mr. Justice M.M. Ramodibedi On the 15th day of December 1999.

The story of the litigation in this matter is hardly in dispute and it revolves around the fact that in or about 1985 the Lesotho Bank (hereinafter referred to as the

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First Respondent) established a non-contributory pension fund in order to provide its members with benefits as provided for in the rules (Annexture "MW3") regulating the fund. What this meant was that First Respondents members did not make any contributions towards the fund out of their own earnings but instead all contributions to the fund were made by the Respondent bank itself. All this is

common cause.

it is further common cause that when the First Respondent commenced operating the pension fund all the Applicants with the exception of the 7th Applicant were made members of the fund. The 7th Applicant only became a member thereof in July 1990 when he joined the First Respondent bank.

Once again it is common cause that only members are entitled to the benefits arising out of the pension fund in question and that by May 1998 the Applicants had resigned from the First Respondent bank before attaining the normal retirement age as contemplated in the Rules of the pension fund.

Against the above mentioned background the Applicants have approached this Court for an order couched in the following terms :

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"1, A Rule Nisi do hereby issue calling upon the Respondents to show cause on the day to be determined by this Honourable Court, why;

1. The ordinary periods of notice shall not be dispensed
   with due to the urgency of the matter

2. The first and third Respondent (sic) herein
   an/or (sic) officers subordinate to them shall
   not be interdicted forthwith, from processing
   payment of money form (sic) the pension fund
   scheme referred to in paragraph 9 of the
   founding affidavit pending the finalisation
   hereof.

3. The first and third Respondent (sic) herein
   shall not be directed to supply the Applicants
   forthwith, with copies of the rules and
   regulation (sic) governing the aforesaid fund.

4. The Applicant (sic) herein and any other
   person on whose behalf contribution has been
   made to the aforesaid fund, shall not be
   declared as the sole beneficiaries to the said
   fund.

e) Respondents herein shall not be directed to
pay the costs hereof on the attorney and client
scale.

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f) Applicant (sic) shall not be granted such further and/or alternative relief as this Honourable Court may deem fit.

2. That prayer 1 (a) and (b) operate with immediate effect as temporary interdicts."

The broad issue that falls for determination by this Court is whether the Applicants are entitled to the benefits of the pension fund. It is the Respondents' case that the Applicants do not qualify for such benefits by reason of the fact that they admittedly did not contribute any monies to the fund and that since they have admittedly resigned from the First Respondents bank they are no longer members of the fund.

Before dealing with the pros and cons of the matter I should like to state that at the hearing of the matter before me on the 8th December 1999 the application against the 4th and 5th Respondents was withdrawn by consent on the ground of misjoinder and the Court directed that there shall be no order as to costs relating to these two respondents.

1 proceed then to deal with the merits of the case.

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I observe at the outset that the whole case for the Applicants is premised on the allegation that the pension fund no longer exists. This allegation is contained in paragraph 11 of the founding affidavit of Peter Lefume Lepamo wherein he deposes as follows -

"11.

Sometime in or around 1992, the First Respondent herein due to financial restraints on its part, decided to stop the running of the aforesaid fund, and the money standing to the credit of the said fund, stood to be distributed, with interest of course, on a prorata (sic) basis to the lawful participants thereof"

The Applicants have however failed to substantiate the allegations contained in the above quoted paragraph and for their part the Respondents deny these allegations as fully set out in paragraph 28 of the opposing affidavit of Michael Wooler in which he emphasises that the fund has never been dissolved and that it still exists to date. What is more, this deponent significantly avers that "in no circumstances will the bank or the fund make payments out of the fund which are not in accordance with the Rules." Indeed this contention seems to me to be unanswerable. It commends itself to me as indeed any distribution of monies standing to the credit of the pension fund in question as well as dissolution of the

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fund itself must be made in accordance with the Rules and Regulations (Annexrure "MW3") of the fund.It cannot be otherwise.

It no doubt proves convenient at this stage to refer to the relevant Rules of the pension fund in question. Rule 6.1.1 on dissolution of the fund provides as follows:-

"If the Employer is wound up, whether voluntarily or not, or if the Employer ceases to carry on business, the Employer shall instruct the Principal Officer to dissolve the Fund by dividing the monies of the Fund, after payment of all expenses incurred in terminating the Fund, among the Members and persons in receipt of pensions and prospectively entitled to pensions in a manner recommended by the Valuator and approved by the Insurer."

I observe at once that nowhere in the papers before me is there evidence to show that in or about 1992 as the Applicants allege the Employer was ever wound up or ceased to carry on business or indeed that the Employer ever instructed the Principal Officer to dissolve the Fund by dividing the monies of the Fund among the members

Mr. Nathane for the Applicants has tried to go around this hurdle by relying on Rule 8.3.4 which provides as follows :-

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"Should the Employer fail to contribute hereunder in full within the days of grace or such extended time as the insurer may allow, the Employer shall be deemed to have discontinued payment of contributions and shall not be entitled to resume payment of contributions without the consent of the Insurer. Should the Insurer not consent to the resumption of contribution payments, the provisions of Rule 6.1 shall apply mutatis mutandis "

The difficulty with Mr Nathalie's submission is that there is no credible evidence to show that the Employer failed to contribute monies to the pension fund in full within the days of grace or such extended time as the insurer might allow. Even assuming that the Employer had failed to contribute timeously there is no credible evidence that the insurer did not consent to the resumption of payments of contributions.

Against the above mentioned background it is pertinent to bear in mind the fact that the Applicants have admittedly never claimed or received their perceived entitlements from the pension fund since 1992 when they allege it was dissolved or at the time of their respective resignations from the First Respondent bank. As a matter of overwhelming probability I consider that they would have claimed and obtained such benefits if their version is correct. The fact that they have not claimed the benefits from 1992 to date leads me to the inescapable conclusion that the

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pension fund was never dissolved and that on the contrary it still exists.

Accordingly I accept the version of the Respondents on this issue which is afterall supported by the Rules and Regulations of the Fund and proceed on the correctness thereof.

See Plascon Evants Paints v Van Riebeeck Paints (Pty) Ltd 1984 (3) SA 623 (A) at 634-635.

That being so I consider that Rules 6.1.1 and 8.3.4 relied upon by Mr. Nathane are not applicable to this case because the Fund was not dissolved. In any event on the Applicants' own version that the Fund stood to be distributed in 1992 any benefits standing to the credit of the Applicants would have reverted to the Fund in terms of Rule 9.2 which provides as follows :-

"If a withdrawal benefit remains unclaimed for 3 years after the date on which it first becomes payable, it shall revert to the Fund."

As I have stated above the pension fund in question was specifically established for the sole purpose of providing members with benefits as provided for in the Rules regulating the Fund. These are referred to as "Rules of the Lesotho

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Bank Pension Fund" Annexture "MW3". Rule 1 provides as follows on the

establishment and object of the Fund :-

A Fund called the LESOTHO PENSION FUND (hereinafter called the "Fund") was established with effect from 1 October 1985 (hereinafter called the "Commencement Date") to provide its Members with the benefits described in these Rules."

Now the word "member" is defined in Rule 3 on definitions in the following terms :-

"A person who is a Member of the Fund in terms of these Rules."

Qualification as to membership is in turn provided for in Rule 7.1 in the following terms :-

"7.1 Qualification

Subject to the provisions of Rule 7.2, any full-time Employee on the permanent staff of the Employer who has not yet attained age 60 qualifies for membership."

Significantly cessation of membership is governed by Rule 7.6 in the following terms :-

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"7.6 A Member's membership ceases only -

1. at his death; or

2. when he ceases to be an Employee, unless he
   remains entitled to a benefit payable in terms
   of these Rules; or

3. on dissolution of the Fund."

In paragraph 21 of his opposing affidavit Michael Wooler makes damaging averments against the Applicants in the following terms

"All the Applicants ceased to be employees of the bank on the dates mentioned in the table in paragraph 7 above and none of them remains entitled to any benefit payable to them in terms of the rules. None of the Applicants therefore has locus standi to bring this application."

Amazingly the Applicants have left these allegations completely unchallenged in their replying affidavits. I have no hesitation therefore in accepting the version of the Respondents in this regard. In particular I accept as a fact that none of the Applicants remains entitled to any benefit payable to them in terms of the Rules including deferred pension payable from their normal retirement dates.

See Plascon Evants Paints v Van Riebeeck Paints (Pty) Ltd (supra).

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There is no doubt that a member's entitlement to benefits upon ceasing to be

a member of the Fund is governed by Rule 9 which reads as follows in so far as "withdrawal Benefit" is concerned :-

"If a Member terminates his service with the Employer before the Normal Retirement Date and is not entitled to any other benefits under the Fund, the following benefits shall be available to him:

9.1 Cash

A refund of the Member's own contribution to the Fund together with compound interest thereon at 5% per annum; or

9.2 Deferred pension

A pension payable from the Normal Retirement Date and equal to the pension equivalent, as determined by the Valuator, of the cash benefit determined in accordance with Rule 9.1."

A proper reading of this Rule shows that if a member terminates his services with the First Respondent bank before the normal retirement date as all the Applicants admittedly did, then he is only entitled to a cash refund of his own contributions to the Fund alternatively he is entitled to a deferred pension payable from normal retirement date. Such deferred pay will in turn be based on the member's own contributions to the Fund.

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It follows from the aforegoing that since none of the Applicants ever

contributed any money to the Fund then none of them was entitled to any benefit arising out of the fund when he/she resigned from the First Respondent bank.

See Lesotho Agricultural Development Bank v Mathetso Foloko & Others 1997-98 LLR & Legal Bulletin 34 in which in interpreting rules of the Fund which were substantially similar as in the instant case Browde JA made the following remarks at p35 thereof:-

"There appears to be nothing in the rules which entitles a member who takes early retirement to receive payment of the employer's contribution."

In my view the position is substantially the same in the instant matter and therefore merits similar treatment.

In the same breath I consider that the question whether or not the Applicants are entitled to the alternative benefit of deferred pension provided for in Rule 9.2 would only arise when the Applicants reached their "Normal Retirement " dates as opposed to their resignation dates.

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In this regard it is necessary to have regard to the provisions of Rule 11.1 and 11.1.1 which provides in no uncertain terms that pension shall be payable to the member on "Retirement on the Normal Retirement Date."

Now the term "Normal Retirement Date" is defined in Rule 3 of the Rules of the Lesotho Bank Pension Fund as meaning "the last day of the month in which a member attains his Normal Retirement Age."

It is common cause and I accordingly accept that all the Applicants resigned before attaining the normal retirement age as contemplated in the Rules governing the Fund. Michael Wooler makes the point in paragraph 7 of his opposing affidavit. The Applicants in turn concede the point in paragraph 9 of the replying affidavit of Peter Lefume Lepamo. What the Applicants have failed to set out and prove on the papers before me, however, is the question of their Normal Retirements Dates as contemplated by the Rules. This is more so since in my view any pension payable in terms of the Rules is only payable from "Normal Retirement Date." It follows that any claim made before this date is premature and unenforceable.

In Setlogelo v Setlogelo 1914 AD 221 Innes JA enunciated the principles on interdict in the following terms :-

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"The requisites for the right to claim an interdict are well known; a clear right, injury actually committed or reasonably apprehended, and the absence of similar protection by any other ordinary remedy."

I respectfully agree.

I am satisfied on the facts of the instant matter that the Applicants have no clear right capable of legal enforcement in the matter. In the same breath I am satisfied that they have no locus standi to sue in the matter but that on the contrary prayer 1 (d) of the Notice of Motion clearly indicates that the Applicants are suing on behalf of others. It will be recalled that that prayer is to the following effect :-

"The Applicant (sic) herein and any other person on whose behalf contribution has been made to the aforesaid fund, shall not be declared as the sole beneficiaries to the said fund."

In my view the Applicants' relief sought in this prayer amounts to actio popularis which is obsolete.

See Rooderpart-Maraisburg Town Council v Eastern Properties (Pty)

Ltd 1933 AD 87.

Lesotho Human Rights Alert Group v Minister of Justice and Human

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Rights & OTHERS 1993-94 LLR & Legal Bulletin 264.

LTC & Another v M. Nkuebe & Others 1997-98 LLR & Legal Bulletin 438 at 444.

In paragraph 26 of his opposing affidavit Michael Wooler makes the point in effect that the Applicants have not exhausted local remedies. Thus for instance they have not referred the decision of the First Respondent on the interpretation of the Rules in declining to grant the benefits sought for arbitration in terms of Rule 4.6. I agree.

Rule 4.6 is on interpretation of the Rules and it specifically provides as follows:-

"In all matters relating to the interpretation of these Rules and/or the administration of the Fund the decision of the Employer shall be final and binding on the Principal Officer and the Members, provided that such ruling is not contrary to these Rules.

If any party concerned is aggrieved at the decision of the Employer the aggrieved party may refer the matter for arbitration in terms of and in the manner set out int he Arbitration Act No 42 of 1965 of the Republic of South Africa."

1 consider therefore that it was encumbered on the Applicants to refer the

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matter for arbitration as provided for in the Rules. Accordingly I remain

unpersuaded that the Applicants have exhausted local remedies and that they have no alternative remedy in the matter.

It follows from the aforegoing that this application cannot succeed and stands to be dismissed.

The conclusion at which I have reached in this matter renders it strictly unnecessary for me to deal with all the points raised in limine save to say that once it has been found, as it is, that the Applicants have no clear right in the matter and that accordingly they had no locus standi then it follows as a matter of logic and common sense that there was no urgency established in the matter. On this ground alone the application falls to be dismissed as well as on the ground that all the Applicants except the First Applicant failed to make a material disclosure that they actually resigned from the First Respondent bank and are as such no longer members of the Fund. It is indeed trite that in ex parte applications the Applicant must display the utmost good faith and disclose fully and fairly all material facts known to him failing which the Court, in the exercise of its judicial discretion, may dismiss the application on this ground alone. See Trakman NO v Livshits & Others 1995 (1) SA 282 at 288. See also Ntsolo v Moahloli 1985-89 L.A.C. 307.

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There is again the question of non joinder. The Respondents make this point

in paragraph 6.2 of the opposing affidavit of Michael Wooler in which they point to the fact that interested parties who would be affected by the relief sought in this matter have not been joined. These are the Lesotho Bank Pension Fund itself, The Fund's Principal Officer, all members of the Lesotho Bank Pension Fund and Metropolitan Life limited who are the insurers of the Fund.

In paragraph 6 of the replying affidavit of Peter Lefume Lepamo the Respondents make the point that the Lesotho Bank Pension Fund has not been registered in accordance with the laws of Lesotho and that accordingly it lacks capacity to sue or be sued in its own name. This despite the fact that Rule 4.1 of the Rules which must be deemed to be the parties' binding agreement specifically bestows legal capacity on the Fund by consent at the very least. It is however not necessary to decide this point.

Suffice it to say that the Applicants concede that apart from the Lesotho Bank Pension Fund and its Principal Officer the other parties mentioned by Michael Wooler above "are affected by the Fund." The Applicants contend however that even though those other parties are affected, their rights are not prejudiced in this application and that the Applicants are only pursuing their personal rights. I cannot

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accept this contention which clearly overlooks the reality of the matter as well as the test for joinder as laid down in the headnote in Amalgamated Engineering Union v The Minister of Labour 1949 (3) SA 637 (A) namely :-

"If a party has a direct and substantial interest in any order the Court might make in proceedings or if such order could not be sustained or carried into effect without prejudicing that party, he is a necessary party and should be joined in the proceedings, unless the Court is satisfied that he has waived his right to be joined."

See also Basotho Congress Party & Ors. V Director of Elections and others 1997-98 LLR & Legal Bulletin 518 at 531-532.

It seems clear to me therefore that if one applies the above test the other members of the Fund and the Metropolitan Limited being the insurers of the Fund should at the very least have been joined in this application as they have a direct and substantial interest in the Fund. In this regard I accept Mr. Olivier's submission that the Metropolitan Life Limited would no doubt be obliged to give effect to any Order the Court might make. In that sense it is a necessary party and should have been joined in these proceedings.

Accordingly on the ground of non-joinder alone this application further falls

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to be dismissed as in my view the Applicants are clearly non-suited.

In all the circumstances of the case therefore the Rule is discharged and the application dismissed with costs including costs of two Counsel.

M.M. Ramoatbedi

JUDGE
15th December 1999

For Applicants : Mr. H. Nathane

For 1st, 2nd & 3rd Respondents : Mr. W. Olivier S.C.

(Assisted by Mr. H.H.T Woker)