South Africa: A Shorter Road For Those Aggrieved

Last Updated: 11 January 2016
Article by Johann Spies

The Registrar of Pension Funds' locus standi to review the decisions of the Appeal Board in South Africa.

A decision-maker, as contemplated in the Financial Services Board Act, 1990, ("FSB Act"), makes a decision, the decision is appealed and the Appeal Board substitutes that decision. That decision-maker then decides to take the matter on review to the High Court. Does he or she, in terms of the relevant legislation, have locus standi to challenge the Appeal Board's decision? This question was recently raised and answered in the Supreme Court of Appeal in the matter between the Registrar of Pension Funds v Financial Services Appeal Board (222/2015) ZASA 203 (2 December 2015), which was written as a separate judgment, on this point alone, emanating from Tellumat (Pty) Ltd v Appeal Board of the Financial Services Board (221/2015) [2015] ZASCA 202.

In terms of section 26 of the FSB Act if anyone is aggrieved by any decision of a decision-maker, in this instance the Registrar of Pension Funds ("Registrar"), they are entitled to lodge an appeal against that decision with the Appeal Board. The Appeal Board then decides whether to confirm, set aside or vary the Registrar's decision, or to remit the matter for reconsideration by the Registrar. Where the Appeal Board endorses the Registrar's decision, and a party wishes to challenge it, they may do so by way of judicial review in terms of the Promotion of Administrative Justice Act, 2000 ("PAJA").

In the present case, the Registrar approved the transfer of a business in terms of section 14 of the Pension Funds Act, 1956. A group of pensioners, who regarded the division of the surplus of the relevant pension fund between the employer and the members as unduly favourable to the employer, appealed to the Appeal Board. Their challenge was successful and the Appeal Board set aside the Registrar's decision to approve the transfer. The Registrar and Tellumat (Pty) Ltd (the employer), both feeling aggrieved by the Board's decision, instituted proceedings by way of judicial review to the High Court, Pretoria. The High Court dismissed the challenges but gave the Registrar and the employer leave to appeal to the Supreme Court of Appeal ("SCA").

Usually, the decision that is being challenged is effectively that of the Registrar and the Registrar together with the Appeal Board are cited as parties to the review. However in the present case, the Registrar adopted an adversarial position towards the Appeal Board. Before the hearing on the actual appeal, the SCA raised the pertinent question relating to the Registrar's locus standi. The issue was whether the Registrar had the necessary locus standi to challenge on review a decision of the Appeal Board with which the Registrar did not agree.

The Court canvassed the following arguments presented by Counsel:

Party to the proceedings

The Registrar argued that in an appeal, it is a party to the proceedings and has the same right as any other party to challenge the outcome by way of judicial review. In response to this, the Court raised a hypothetical point that if the employer had not appealed and the other parties to the dispute had agreed to accept the decision made by the Appeal Board; such decision could be overturned by the Registrar taking the matter on review. The Court described this as a "most unusual situation".

If the Court allowed the Registrar to become an adversarial party to the appeal proceedings this would certainly be inconsistent with its role as impartial regulator acting in the interests of the industry. The role of the Registrar is to act as a neutral decision maker and to adopt an impartial stance when making decisions. If the Registrar should fail to act in this required manner, the bias shown by the Registrar would be a ground for review in terms of PAJA.

Further, the Court found that if the Registrar is permitted to challenge the Appeal Board's decision, allegations made by the Registrar in its argument could cause irreparable harm to the reputation of the Appeal Board. In the present case, the Registrar accused the Appeal Board of misdirection of fact and law, considering the irrelevant and disregarding relevant considerations. The Court expressed its disconcert by stating that "[a]fter all, if the Registrar regards the decisions of the Appeal Board as grossly unreasonable, why should the public have any faith in them?"

PAJA and the Constitution

The Registrar argued that its standing in the Court is provided for under PAJA and the Court addressed this locus standi point in terms of section 38 of the Constitution. Section 38 specifies who may approach a Court when it is alleged that a right in the Bill of Rights has been infringed or threatened. The Court considered two points which were raised in this regard:

  • Firstly, that the Registrar is acting in its own interest. The Court found that in order for this to be the case, the contested legal decision has to directly affect the Registrar's rights or interest, or potential rights or interests. The Court found that the only interest the Registrar had was that of a regulator and this did not cross the hurdle.
  • Secondly, that the Registrar is acting in the public's interest. The Registrar argued that it has important functions and an interest which is shared by the public in the correctness of its decisions. In this regard, the legislature foresaw that some decisions made by the Registrar would be incorrect. In order to overcome this problem, the legislature put in place a mechanism to challenge and correct these decisions. Plainly put, in certain instances the Registrar is wrong and the Appeal Board is right1.


The crux of the finding by the SCA is that the answer to the question of whether a party has locus standi will vary depending on the nature of the interest that the party seeks to protect. In order to determine the nature of that interest it is necessary to look at the purpose in the creation of the Appeal Board. The purpose is to allow persons affected by decisions of the Registrar to challenge those decisions before a specially constituted body.

To permit the Registrar to challenge the decision of the Appeal Board would upset the statutory relationship between the Registrar and the Appeal Board as set out in the FSB Act and it would be inconsistent with the purpose of creating the Appeal Board. The fact that Registrar has no locus standi in this regard does not detrimentally affect its regulatory functions as "t relates only to a narrow area where the Registrar disagrees with a decision of the Appeal Board overturning one of her decisions".

This may, however, have a substantial impact on persons negatively affected by a decision of any 'decision-maker' under the FSB Act. Quite simply, the decision effectively ensures that, bar extraordinary circumstances, the Appeal Board represents the end of the road for aggrieved persons where they are successful in that forum, but the road lies open for a review where they are not. If the relevant decision-maker disagrees with a decision made by the Appeal Board, it has no right to review such decision in the ordinary course as the Appeal Board's decision replaces the decision-maker's decision and for that reason cannot take its own decision on review.

It is important to note that the rule above is not without exceptions, the Court recognising as an exception the circumstances and finding which emanated from Financial Services Board & another v De Wet NO & others2, and which the Court itself confirmed in Pepcor Retirement Fund and Another v Financial Services Board and Another3, in which the Registrar sought judicial review of a decision it had made, and which the Appeal Board has concurred with, due to its becoming aware of misleading information having been placed before it. The Court in that instance confirmed the locus standi of the Registrar where it "had committed an irregular act in issuing the approval in the first instance and therefore had locus standi in the public interest to remedy the situation by seeking to set the approval aside by way of review proceedings".


1 It is worth reiterating the Court's reference to Justice Jackson, acting in the United States Supreme Court matter of Brown v Allen 344 US 443 at 540, stating that "We are not final because we are infallible, but we are infallible only because we are final".

2 [2002] JOL 9319 (C)

3 [2002] ZASCA 198; 2003 (6) SA 38 (SCA) [2003] 3 All SA 21 (SCA)

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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Johann Spies
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