Specified Officers Defined Contribution Pension Fund and Another v Tsehlana (C of A (CIV) 56 of 2014) [2015] LSCA 22 (7 August 2015)

1 IN THE COURT OF APPEAL OF LESOTHO C 0F A (CIV) NO.56/2014 HELD AT MASERU IN THE MATTER BETWEEN:- SPECIFIED OFFICERS DEFINED CONTRIBUTION PENSION FUND FIRST APPELLANT PUBLLC OFFICERS DEFINED CONTRIBUTION PENSION FND SECOND APPELLANT AND LEHLOHONOLO TS’EHLANA RESPONDENT CORAM : Y. MOKGORO, AJA P. MUSONDA, AJA S. PEETE, JA HEARD ON DELIVERED ON : : 24 JULY 2015 7TH AUGUST 2015 Summary This was an application by the two Pension Funds seeking a declaration of the Interpretation of section 6 and 31 of the SODCPT Act, as read in harmony with section 5 and section 27 of the PODCPF Act. The question in the court below was whether a member of the SODCPF who retired and opts to terminate his membership under section 6, can access the 75 per cent cash, credit, upon such termination. The court below applying the literal rule of interpretation to section 6 held that a retiree was entitled to access the 75 percent cash upon termination. The two pensions fund’s appeal was dismissed. Musonda AJA: 1.0 In this appeal we shall refer to the appellants as applicants and the Respondent as Respondent as they were in the court below. This appeal arises from an ex-parte application by the applicants who sought an order in the following terms: “(i) A declaration that upon the correct interpretation of section 6 as read in harmony with section 31 of the SODCPF Act No. 19 of 2011, a retiree is not entitled to be given his 75 percent credit as a lump sum in cash irrespective of whether or not such retiree has left the the Specified Officer Defined membership Contributors Pension Fund, of (ii) A declaration that upon the correct interpretation of section 5 read in harmony with section 29 of the PODCPF Act, 2008 a retiree is not entitled to be given his or her 75 percent Fund Credit as a lump sum in cash, irrespective of whether or not such retiree has left the membership of Contribution Pension Fund.” the Public Officer Defined 1.1 In the original ex-parte application there was no relief sought against the Respondent in this appeal. 1.2 The applicant’s interest was to retain the 75 per cent cash credit for investment, from which investment they could continue paying the Respondent a monthly pension. This would preserve the Pension Fund from collapsing and thus not undermine the objective of the social scheme. 1.3 What gave rise to the application in the Court below was that several requests were being made by pensioners to be paid their fund credits in full. Pensioners had intimated that they wanted to exit the fund and that they should be paid in full upon exiting. 1.4 When the matter was presented to the learned Judge in the Court below applicant’s counsel informed the judge that the respondent may have a different view. This was magnanimous on the part of the applicant’s counsel. The judge was requested to order service of applicant’s affidavit on respondent or his legal representative. 1.5 The Respondent applied for leave to oppose the applications, which was not objected to by the applicants. 1.6 The first applicant was and is the Specified Officer Defined Contributors Pensions Fund, a juristic person and a body corporate established in terms of section 4 of the Specified Officers Defined Contribution Pension Fund Act, No 19 of 2011, whose object is to provide for pension benefits to holders of offices set out in the Schedule. It is common cause that as a Member of Parliament the respondent was a Specified Officer under the Schedule. 1.7 The second applicant was and is the Public Officers Defined Contribution Pensions Fund, established in terms of section 3 of the Public Officers Defined Contribution Pension Fund Act, 2008, for the purpose of providing pension benefits to the Public Officers referred to in section 5 (1) or (2) of the Act. 1.8 The learned judge in the Court below founded facts to be common cause. No dispute to facts arose during the hearing of the appeal. We therefore do not find it necessary to delve into the facts in any great detail. 1.9 In the court below, the Respondent had urged the court to employ the literal interpretation of statute as section 6 of the SODCPF Act was couched in plain language. The Advocate for applicants in this court also agreed that the literal rule of interpretation should be employed in interpreting section 6 of the Act, save and except that the applicants disagree with the learned judge’s interpretation. 2.0 The applicants argued that if the retirees were permitted to terminate their membership and claims 100 per cent cash payment of their accumulated benefits, this would lead to the financial collapse of the social scheme. 2.1 The appellants concluded their arguments by submitting that to make a payment to a person not entitled would be contrary the provisions of section 6 and 31 of the SODCPF Act. 3.0 The Respondent’s submissions proceeded on the premise that section 6 of the SODCPF Act has imposed the membership to the Fund on the holders of the offices provided for in the Schedule. The section specifically prohibits any serving officer from excluding himself/herself from the Fund but that it does not in any manner whatsoever extend the same prohibition to those that have retired. The retiree was at large to retain or terminate his membership. 3.1 The court below was persuaded to apply a literal rule of interpretation for it to properly discern the intention of the legislature under section 6 of the SODCPF Act and section 5 of the PODCPF Act. 4.0 The cornerstone of the case in the court below was the interpretation of section 6, as read with section 31 of the SODCPF Act, which are couched in these terms:- “Section 6: (1) Membership is mandatory to a member of an office specified in the schedule; and (2) A member shall not be permitted to terminate membership of the Fund while still holding office” (emphasis added). “Section 31 (1) On retirement a member shall become entitled to a pension purchased from the pension pool by the Fund credit.” 4.1 Adopting the literal interpretation, the earned judge held that it would be a transgression of a constitutional right to directly or covertly force a retiree, who has lawfully terminated his membership to the Fund, to be precluded from withdrawing funds to which he is entitled to under the Act. 4.2 The learned Judge went on and said: “…it was not logical for the applicants to acknowledge that section 6, permits a retiree to terminate his membership of the Fund, and yet the retiree should be restricted from accessing all or the remaining part of the pensions held by the first applicant…” 5.0 Dissatisfied with the learned judge’s interpretation of sections 6 and 31 of SODCPF Act, the applicants appealed to this court. 6.0 For the applicants it was argued that a retiree was not entitled to be given his or her 100 per cent credit lump sum in cash, irrespective whether or not such retiree has left the membership of the Specified Officer Defined Contributions Pension Fund. 6.1 It was argued on behalf of the applicants that the philosophy underlying the two pieces of legislations is to introduce forms of social security for the Specified Officers and Public Officers respectively. 6.2 In supporting of that proposition of law, The Zimbabwean Supreme Court decision in Nyambirai v National Social Security Authority and Another, 1996 SA 636 was relied upon, in which case it was held that: “The design of the Pensions and other benefits scheme involves a system which necessitates support by compulsory contributions from employees and employers. Such mandatory participations seems indispensable to its fiscal success. Individual voluntary coverage would undermine the inherent sound of the scheme. Moreover voluntary participation would almost be a contradiction in terms and would render the scheme difficult, if not impossible to administrate. Government’s interest in assuring a compulsory and continuous participation and contributions to the scheme is very high”. 6.3 The applicants submitted in this court that the learned judge’s interpretation, that the legislature intended that the 75 per cent should be paid to the member upon termination of membership was not an interpretation but a divination. 6.4 In conclusion the applicants submitted that the learned judge granted a relief to the respondent to be paid 75 per cent cash upon termination, which was not prayed for. This relief was not even remotely connected to what the respondent asked for. 7.0 For the respondent, it was argued that section 6 read as a whole and interpreted literally, membership of the Fund is in two parts: - during the tenure of the office of the Specified Officers, membership is mandatory. Upon retirement membership is optional. 7.1 Section 6, having given a member the right to terminate, meant that the retiree must be given his or her money as a lump sum. It would be a contradiction in terms for the retiree who has terminated membership to be treated as he/she was still a member. 7.2 The respondent’s counsel submitted further that the appellants were not prejudiced by the holding that the respondent was entitled to 100 per cent cash payment after terminating his membership 8.0 We now summarise the issue for determinations in this appeal. (i) When is the literal test applied in the interpretation of statutes? (ii) What is the meaning of section 6? (iii) Would the two statutes be read together to achieve a broader objective sought or canvassed by the applicants? (iv) Were the applicants prejudiced by the learned judge holding that the respondent was entitled to the remaining 75 per cent cash payment upon termination. (v) Was the learned judge correct by ordering costs against the applicants when they did not sue the respondent. We propose to deal with these issues in that order: 8.1 F. A. R Bennion – Statutory Interpretation of a Code (Third Edition - London: Butterworths) at p 746 says: “It is fundamental to our modern constitutions that the Judiciary owe a duty of loyalty to Parliament. Their function is faithfully to carry out what Parliament has decreed. The criteria developed to guide interpretation are designed only to settle real doubt as to legislature’s is intention. Where the intention is plain, it must be implemented. Obviously a particular judge might find the policy of an enactment not to his personal liking. It is axiomatic that he must resolutely thrust aside such considerations, when arriving at his decisions. An enactment may strike him/her on any view point as unjust. That cannot affect his duty. Parliament does sometimes do unjust things. If a Court were free in such cases to reject Parliament’s intention and substitute it’s own view, the law would vary according to which judge happened to try the case. It would be a matter, as Lord Wilberforce has said, “… quot judices tot sentintiae…” (so many men, so many opinions, his own law to each).” We observe that: “There is the ever-inventive arguments of advocates urging the courts to legislate from the bench (LFTB). This is a “constitutional fallacy,” because the two arms of government cannot slip into “comfortable silent, about the court’s intrusion into executive promotion of legislation and the enactment of that legislation by the legislature.” In our view this was the “flash point” of the learned judge’s judgment. 8.2 Legislating from the Bench is an assault on the legislature’s sovereignty as provided by Article 70 (1) of the Constitution of the Kingdom of Lesotho. It is also a violation of the “Doctrine of Separation of Powers”. 8.3 The Indian Supreme Court has said in the Supreme Court case of Advocates v Union of India 1993 (4) SSC 441: “Judges should not be meek and mute in face of a plain legal provision. They must pronounce what the law is. The court cannot rewrite the law in the guise of interpretation.” 8.4 Statutory Interpretation in the Supreme Court of Canada, uottawa- co states that:- “Textualism is built on the proposition that the only reliable indicators of legislative intention is the meaning of the legislative text. Therefore to the extent this meaning is discernable, evidence of legislative intent. The best way for courts to complete the task of giving effect to the legislative intention is usually to assume that the Legislature means what it says, when this be easily ascertained. When there is neither doubt as to the meaning of the legislation nor any ambiguity of it in its application to the facts then the statutory provisions must be applied regardless of its object or purpose.” We agree. 8.5 The learned judge had cited the decision of Wessels J in Seluka v Suskin and Salkon, 1912 TPD 258 where he said: “My function is jus decare not jus facere …I have only to interpret what the legislature enacts and apparently intends.” He further cited Hoexter JA’s statement in R v Tabetha 1959 2 SA 337 (AD) 346 where he said: “Jus decere non dare is the function of the court, and the language of an Act of Parliament must neither be extended beyond its natural sense and proper limits in order to supply omission or defects, not strained to meet the justice of an individual case”. We agree with the statement of the law expressed in the authorities herein cited. 9.0 We now come to the meaning of section 6 of Act No.19 of 2011. The applicants do not contend that the Respondent had the statutory right to terminate his membership. What is contended is that the respondent has not been conferred a right by section 6 (2) to withdraw the 75 per cent Fund credit, but the money should be left with the applicants to invest and pay him a monthly pension. Simply put the pension obligation of the applicant’s and respondent should transcend the termination of the pension contract, when it is not the term of the contract entered into in the beginning, between the Fund and the employee. 9.1 The Concise Oxford English Dictionary, Tenth Edition at p.1479, defines the wold “terminate” as: “…bring to an end, bring to a close, conclude, finish, stop, put an end to, wind up, discontinue, cease, abort, axe…” We are of the view that given the wording of section 6 (2) and the meaning of the word “terminate”, it would be a “logical fallacy” to hold that after termination there would be obligations by either party to perform under the contract. Why is there a choice for continuation or discontinuation, if the intention was to retain the existing obligations? The interpretation as suggested by the applicants is implausible. The provision has clearly afforded the retiree a freedom of choice. 9.2 It was the submission of the applicants that the two statutes can be read together to support the meaning they argue for. We respectfully disagree. The Public Officer Contributions Pensions Fund was enacted in 2008, while the Specified Officer Defined Contributions Pension Fund was enacted in 2011. 9.3 If Parliament wanted the two statutes to be read together, they would not have enacted a separate Act, but would have effected the amendments to the then existing Act. In any event the statutes deal with different categories of employees. It therefore does not logically follow that these two Acts can be read together. 10.0 While we agree with the applicants that such 75 per cent cash withdrawal may cause “fiscal paralysis” and may be unjust to the applicants, the role of the court is to pronounce the law as it is. This the learned trial judge ably did. The court below and this court are not entitled to read into section 6 their own notion or own expediency of what is just. What was being pleaded by the applicant was the “commercial viability” of the Fund, if those who had terminated membership were allowed to withdraw the 75 per cent. With the greatest respect to the applicant’s advocate, that could not be the basis or justification for this court and the court a quo to legislate from the Bench. 11.0 The applicant argued that the learned judge granted the respondent the right to access 75 per cent credit to his Pension Fund, which order was not prayed for. The applicant’s application if successful would have meant that the legal right of the respondent to access the 75 per cent credit would have been totally extinguished. There is an interconnectedness or intercorrelation to the declaratory order sought and the right of the respondent to access 75 per cent cash. 11.1 The applicants cited the case of Mophato of Morija v Lesotho Evangelical Church - 200-2004 LAC 354 in which case Grosskopf JA said: “The relief which a court may grant a litigant in terms of such a prayer cannot in my view be extended to a relief which he has never asked for and which is not even remotely related to what he has asked for. It is equally clear that the order was granted at the request of the respondent and it does not appear on what grounds the court a quo could order the respondent.” We think the cited case should be distinguished from the present case. The claim by the respondent of 75 per cent precipitated the application by the applicants. The applicants were desirous to forestall his claim and those of other retirees who may terminate their membership. The submission that the court issued an order not prayed for is therefore wholly untenable. 12.0 We now come to the issue of the amendment to the Specified Defined Contribution Pensions Fund (Amendment) Act, 2014, which the applicant counsel uninformally brought to our attention1. In our view it would be procedurally improper to discuss the propriety or 1 The 2014 Amendment Act effectively prohibits termination of membership impropriety of it having retrospective application as the issue was not formally before us. 13.0 For the reasons stated above, the appeal is dismissed. Costs 14.0 We now come to the question of costs. It is apparent that neither party’s case could be said to have been vexatious. This would be an appropriate case for each party to bear its own costs. We are also mindful that the respondent has continued, as pointed out by advocate for the applicant, to draw a monthly pension. The applicants can debit 75 per cent credit with the amounts hitherto paid to him. 15. The following order is made:- (a) The respondent to access the 75 per cent Fund Credit in cash. (b) That amount should be debited to the monthly pension already drawn. (c) The amount shall not earn interest as he was drawing a monthly pension. (d) Each party will bear its own costs. DR P. MUSONDA ACTING JUSTICE OF APPEAL I agree Y. MOKGORO ACTING JUSTICE OF APPEAL I agree S. PEETE JUSTICE OF APPEAL For the Appellants : Adv. N. B. Pheko For the Respondent: Adv. M. Posholi with him Adv. N. Ramakatsa