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THE FINANCIAL SERVICES TRIBUNAL

 

Case No. PFA22/2023

 

 

In the matter between:

 

MOMENTUM RETIREMENT ANNUITY FUND         FIRST APPLICANT

 

MOMENTUM METROPOLITAN LIFE LIMITED       SECOND APPLICANT

 

and

 

K HAITAS                                                                 FIRST RESPONDENT

 

THE PENSIONFUNDS ADJUDICATOR                   SECOND RESPONDENT

 

Summary: Reconsideration of a decision of the Pension Funds Adjudicator (30M) in terms of Section 230 of the Financial Sector Regulation Act 9 of 2017.

 

 

DECISION

 

 

A.      INTRODUCTION

 

1.          The First Applicant is the Momentum Retirement Annuity Fund ("the Fund").

 

The Fund is registered and approved and is subject to the provisions of the Pension Funds Act 24 of 1956 ("the PFA").

 

2.          The Second Applicant is Momentum Metropolitan Life Limited ("the Administrator"). The Administrator provides administration services to the Fund.

 

3.          The First Respondent is Konstantinos Haitas.

 

4.          The Second Respondent is the Pension Funds Adjudicator ("the Adjudicator"), the statutory ombud as defined in section 1(1) of the Financial Sector Regulation Act 9 of 2017 ("FSR Act") and is established in terms of the PFA.

 

5.          Section 230 of the FSR Act provides the basis for an Applicant to lodge an application for reconsideration and seek appropriate relief from the Financial Services Tribunal ("the Tribunal"). This is an application in terms of the aforementioned section against the decision taken by the Adjudicator in terms of Section 30M of the PFA.

 

6.          The parties have waived their right to a formal hearing, and this is the decision of the Tribunal.

 

B.      THE FACTS

 

7.          This is an application for the reconsideration of the Adjudicator's decision relating to the Fund's allocation of the death benefit of its member, Mr E Haitas ("the deceased").

 

8.          The First Respondent is the son of the deceased, who alleged that the Fund had failed to exercise their discretion correctly and complained to the Adjudicator, who upheld his complaint.

 

9.          The Adjudicator ordered that:

 

6.1.1         "The decision of the board of the Fund in allocating the death benefit as stated in paragraph 2.3 above is hereby set aside;

 

6.1.2         The matter is referred back to the board of the Fund to investigate the extent of financial dependency of all dependents of the deceased, within eight weeks of the date of this determination;

 

6.1.3         The Fund is ordered to pay the death benefit to the deceased's beneficiaries, within two weeks of completion of this exercise in paragraph 6.1.2 above;

 

6.1.4         the Fund is ordered to provide the complainant and all interested parties with full reasons for its decision within two weeks of its reconsideration in paragraph 6.1.2 above."

 

10.     It is against the Adjudicator's determination set out above that this reconsideration lies.

 

11.     The Applicants raised a point in limine where they essentially attacked the jurisdiction of the Adjudicator to have considered the complaint at all. The nub of the attack on the Adjudicator's jurisdiction was that the deceased's life partner, Ms SL Lanuza, dissatisfied with the length of time it was taking for the payment of the deceased's death benefit, previously laid a complaint with the Adjudicator. In that earlier matter, the Adjudicator found against the Fund and ordered it to make payment of the death benefit. The First Respondent filed an application with the Tribunal on the basis inter alia that he had not been joined to the proceedings and that his rights to audi alteram partem had not been applied. The Tribunal dismissed that challenge and confirmed that the Fund should pay the death benefit in the ratio it had apportioned the payment into ('the First Tribunal Ruling").

 

12.     Pursuant to the First Tribunal Ruling, the Fund made payment of the death benefit in the ratio previously considered and resolved.

 

13.     In the Applicants' view, in the absence of a challenge to the First Tribunal Ruling, this put an end to the matter, and the Adjudicator was not entitled to entertain another complaint, effectively between the same parties on the same cause of action. Put differently, the Applicants maintain that all the requirements for a successful plea of res judicata are present and that it was incompetent for the Adjudicator to have entertained the second complaint, and on this ground alone, the Tribunal should uphold the reconsideration.

 

14.     The First Respondent considers the Applicants' reliance on the principle of res judicata misplaced. He maintains that the subject matter of the complaint he made to the Adjudicator concerned not the delay in the payment of the death benefit, but the allocation of the death benefit itself, and this aspect has not been considered by any forum.

 

C.      DISCUSSION

 

15.     Generally, the Tribunal does not consider a Fund or an Administrator to be an aggrieved person for the purposes of the FSR Act. The reason is that a Fund or an Administrator lacks locus standi on the basis that while the "the decision of the Adjudicator may affect the Fund in the sense that it must reconsider the matter and exercise its discretion again, but it has no legal interest in the allocation. Reference is made to the cases of Hollenbach, Aon, and Fundsatwork (para6). It is unnecessary to restate the legal principles."[1]

 

16.     This matter is distinguishable in that should this Tribunal uphold the Adjudicator's decision, the Fund may well be out of pocket, as the Fund, pursuant to the First Tribunal Ruling, made payment of the entire death benefit, and it holds no further amounts in respect of this death benefit to allocate or disburse. I agree with the Applicants that compliance with the First Tribunal Ruling ought to be the end of the matter and for this reason alone, I would uphold the reconsideration.

 

17.     Even if I am wrong, I find that the Fund carefully considered the allocation of the death benefit. In considering the allocation, a Fund enjoys a broad discretion which can only be challenged on the basis that it considered irrational, irrelevant or improper factors or came to a decision that no reasonable decision maker could have come to. I do not see the challenge mounted by the First Respondent in his complaint to the Adjudicator having reached this tipping point or, in fact, that any one of the factors mentioned above were reached on the facts presented to the Adjudicator.

 

D.      CONCLUSION

 

18.     For the reasons above, the Applicants must succeed in the application for a reconsideration of the Adjudicator's determination.

ORDER

 

(a)        The application for reconsideration is upheld, and the matter is referred to the Adjudicator for reconsideration.

 

 

Signed on behalf of the Tribunal on 21 September 2023.

 

PJ Veldhuizen

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