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IN THE CONSTITUTIONAL COURT OF SOUTH AFRICA
CASE NO. CCT 165/2017 SCA Case No: 382/2017 NGHC Case No: 3275/2016 In the matter between:
HUNTER, ROSEMARY THĖRĖSE Applicant
And
FINANCIAL SERVICES BOARD First Respondent SITHOLE, ABEL MOFFAT N.O Second Respondent TSHIDI, DUBE PHINEAS N.O Third Respondent BOYD, JURGEN ARNOLD N.O Fourth Respondent THE MINISTER OF FINANCE Fifth Respondent _____________________________________________________________________
APPLICANT’S PRACTICE NOTE
_____________________________________________________________________
1. NATURE OF THE PROCEEDINGS
1.1. The applicant (“Hunter”), then the deputy registrar of pension funds and deputy executive officer of the first respondent (“FSB”), applied to the High Court for orders for the release of reports by Justice O’Regan and KPMG, and an investigation by the FSB into the matters dealt with in two whistle- blowing reports she had delivered, which the FSB had largely ignored.
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1.2. Consequent upon the exchange of the affidavits and the production of the reports, on 20 October 2016 she sought to amend the notice of motion to include a Court-supervised investigation by the FSB, alternatively, the fifth respondent (“the Minister”), into the two issues which formed the subject- matter of the whistle-blowing reports: (i) the likelihood of financial prejudice suffered by any pension fund or any stakeholder in any pension fund as a result of the unlawful cancellation of the registration of any such pension fund (“the cancellation project investigation”); and (ii) the conduct of the third respondent (“Tshidi”) in attempting to thwart an investigation into the cancellations project by, inter alia, procuring an investigation into the applicant for the purpose of finding a basis for her dismissal from the FSB.
1.3. Hunter was successful in part of her application (the reports she sought were released by the FSB), but both the application for amendment and the main application were dismissed.
1.4. The High Court dismissed the application for leave to appeal, as did the Supreme Court of Appeal. Hunter was burdened with costs orders at each stage.
1.5. The applicant seeks leave to appeal, and orders for investigation of the issues identified above, which she submits should be Court-supervised.
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2. ISSUES FOR DETERMINATION
2.1. Did the FSB have a legal duty to investigate the two issues identified above? If so,
2.2. Did the FSB do this, or is it doing this, in the manner required by law?
2.3. What is the responsibility of the Minister in the context of the allegation that Tshidi abused public resources and violated the Public Finance Management Act, which the Board of the FSB refused to investigate?
2.4. What is the appropriate remedy?
2.5. Were the third and fourth respondents properly joined?
2.6. Do the costs orders against Hunter fall to be set aside?
3. SUMMARY OF APPLICANT’S ARGUMENT
3.1. The “cancellations project” involved the cancellation of the registration of some 4 600 pension funds. Significant elements of the project were unlawful.
It has already been established that the registrations of a significant number of pension funds had to be re-instated, as they in fact had assets at the time of their de-registration.
3.2. An investigation conducted by KPMG at the instance of the FSB indicated a significant likelihood of financial prejudice, to the value of R2.5 billion. This report was jettisoned by the FSB, which mandated an attorney, Mr Jonathan Mort, to conduct an inspection in respect of a limited number of cancelled
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funds, in terms of the Inspections Act. This is not the type of investigation that was recommended by Justice O’Regan and adopted by the FSB. It is incapable of giving effect to the obligation of the FSB to investigate, identify and remedy adverse consequences of the cancellations project, including its impact on unpaid benefits.
3.3. A proper forensic investigation is necessary. In light of FSB’s conduct and its attitude that there was no systemic flaw in respect of the cancellations project, Hunter seeks an order for a Court-supervised investigation into that project.
3.4. The FSB accepted that it had the obligation to investigate whether there has been any wrong-doing by any employee of the FSB in the course of the cancellations project, and to investigate the conduct of Tshidi – specifically his attempts to thwart a proper investigation into the cancellations project through abuse of power and abuse of FSB’s funds.
3.5. Despite FSB’s undertaking to investigate that issue, it has not done so
3.6. FSB has contended that Hunter’s allegations in this regard are employment- related, and that as her employment with the FSB is no more, such an investigation is not necessary. Such an approach is incorrect: serious allegations have been levelled against Tshidi qua civil servant and they must be investigated, irrespective of whether Hunter remains employed by the FSB.
3.7. The High Court and SCA failed properly to apply Biowatch in making costs orders against Hunter.
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4. ESTIMATED DURATION OF ORAL ARGUMENT
4.1. Argument should be completed in one day.
4.2. Hunter’s oral argument, including reply, will not take more than 2.0 hours.
5. THE RECORD
5.1. The parts of the record referred to in the parties’ heads of argument should be read, as should the entire founding affidavit (without annexures) in the High Court.
6. AUTHORITIES ON WHICH SPECIAL EMPHASIS WILL BE PLACED
6.1. Pepkor Retirement Fund & another v Financial Services Board & another 2003 (6) SA 38 (SCA);
6.2. Khumalo and another v MEC for Education, KwaZulu-Natal 2014 (5) SA 579 (CC);
6.3. MEC for Health, Eastern Cape & another v Kirland Investments (Pty) Ltd t/a Eye & Lazer Institute 2014 (3) SA 481 (CC);
6.4. Niekara Harrielall v University of KwaZulu-Natal: [2017] ZACC 38.
G M Budlender SC F Ismail A Milovanovic Counsel for the applicant Chambers, Cape Town and Johannesburg 17 November 2017
