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# South Africa: Western Cape High Court, Cape Town [![Support
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**You are here:**   [SAFLII](/) >> [Databases](/databases.html) >> [South
Africa: Western Cape High Court, Cape Town](../) >> [2025](./) >> **[2025]
ZAWCHC 8**

| [Noteup](/form/search/?method=boolean&query=ZAWCHC+2025+8 or 2025+ZAWCHC+8) | [LawCite](/cgi-bin/LawCite?cit=2025+ZAWCHC+8)

* * *

##  Engineering Industries Pension Fund and Another v Installair (Pty) Ltd and
Others (1633/2023) [2025] ZAWCHC 8 (16 January 2025)

**Download original files** [![](/images/pdficon_small.gif)PDF format](/za/cases/ZAWCHC/2025/8.pdf) [![](/images/word_logo.gif)RTF format](/za/cases/ZAWCHC/2025/8.rtf) |   
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**SAFLII Note:** Certain personal/private details of parties or witnesses have
been redacted from this document in compliance with the law and [SAFLII
Policy](http://www.saflii.org/content/terms-use)  
---  
  


**IN THE HIGH COURT OF SOUTH AFRICA**

**(WESTERN CAPE DIVISION, CAPE TOWN)**

  

CASE NO.: **1633/2023**

  

In the matter between:



**ENGINEERING INDUSTRIES PENSION FUND                       First Applicant**



**METAL INDUSTRIES PROVIDENT FUND                                Second
Applicant**



And



**INSTALLAIR (PTY) LTD (IN LIQUIDATION)                              First
Respondent**

  

**PAOLO RINALDA ORSO
Second Respondent**

  

**SANDRA MARTHA ORSO
Third Respondent**



**JUDGMENT**

  

_**PARKER, AJ:**_



**Introduction**



'_Pension money forms the cornerstone of most people 's retirement security.
When a person retires from active employment, he or she still wants to
maintain more or less the same standard of living that existed during his or
her working life_'[1].



[1]        The recent two-pot system introduced in South Africa has
highlighted the dilemma employees find themselves in. A few years ago the
issue of pension benefits were highlighted thus:



'_The non-payment of retirement fund contributions is an ongoing problem faced
by thousands of retirement fund members '._[2]



[2]        In more recent news it has been reported that about 7 770 employers
have defaulted on paying their pension fund contributions as of December 2023.
It was said this failure had a negative impact on the implementation of the
two-pot retirement system which came into effect on 1 September 2024.[3]



[3]        I heard this opposed application on 17 October 2024 pertaining to
outstanding pension and provident fund contributions for the period of May
2020 to July 2020.  Applicant was seeking payment in the amount of R93 715.53
which is calculated based on contribution schedules duly received but for
which payment remains outstanding for the period January 2020 to April 2020.
On the date of the hearing there was no appearance by the Respondents and at
the conclusion of the hearing I requested Applicant to file a further note on
argument, which was received on the 25 October 2024.



**The Applicants**



[4]        The Applicants (at times I will refer to them as the "Fund or
"Funds") both of whom are pension funds registered in terms of [section
4](http://www.saflii.org/za/legis/consol_act/pfa1956165/index.html#s4) of the
[Pension Funds Act, 24 of
1956](http://www.saflii.org/za/legis/consol_act/pfa1956165/) ("the PFA"), rely
on the provisions of
[s13A(1)](http://www.saflii.org/za/legis/consol_act/pfa1956165/index.html#s13a),
s[13A](http://www.saflii.org/za/legis/consol_act/pfa1956165/index.html#s13a)(7),
s[13A](http://www.saflii.org/za/legis/consol_act/pfa1956165/index.html#s13a)
(8),
s[13A](http://www.saflii.org/za/legis/consol_act/pfa1956165/index.html#s13a)
(9) of the  PFA read with [Regulation
33](http://www.saflii.org/za/legis/consol_act/pfa1956165/index.html#s33)
(promulgated in terms of the PFA but now repealed).



[5]        [Section
13A(1)](http://www.saflii.org/za/legis/consol_act/pfa1956165/index.html#s13a)
of the PFA places an obligation on the employer of any member (or members) of
a fund to pay the member's contribution deducted from the member's
remuneration and any contribution for which the employer is liable in terms of
the Rules to the fund '_in full '_. This subsection reads as follows:



'_13A Payment of contributions and certain benefits to pension funds_



_(1) Notwithstanding any provision in the rules of a registration fund to the
contrary, the employer of any member of such a fund shall pay the following to
the fund in full, namely-_



_(a) any contribution which, in terms of the rules of the fund, is to be
deducted from the member 's remuneration; and_



_(b) any contribution for which the employer is liable in terms of those
rules. '_



[6]        Any contribution to a fund in terms of the rules, must be paid to
the fund not later than seven days after the end of the month for which the
contribution is payable.[4]



[7]        [Section
31A](http://www.saflii.org/za/legis/consol_act/pfa1956165/index.html#s31a) (7)
requires that '_interest at a rate as prescribed shall be payable from the
first day following the expiration of the [seven day] period in respect of
which such amounts were payable on ' _and not paid.[5]



[8]        The Fund/s are statutorily obliged to collect the contributions and
distribute the benefit payable to its members as provided for in [s
7D(1)](http://www.saflii.org/za/legis/consol_act/pfa1956165/index.html#s7d)_(d),_
3>s13 and
s[13A](http://www.saflii.org/za/legis/consol_act/pfa1956165/index.html#s13a)
of the PFA.[6] The binding nature of the applicants' rules is statutorily
confirmed in
[s13](http://www.saflii.org/za/legis/consol_act/pfa1956165/index.html#s13) of
the PFA.[7]



[9]        The Financial Services General Laws Amendment Act 22 of 2008
amended the PFA by deleting ss(1) from s37 of the PFA and thereby
decriminalized an employer's non-payment of employees' contribution to the
pension fund as required by s13A of the PFA. There were thus, no clear and
direct enforcement mechanisms which could induce employers to make payments of
contributions as required by s13A of the PFA.[8]



[10]      If the applicants do not receive contributions from the employers as
required by the rules of the Funds and s13A of the PFA, the employees will not
receive their benefits when they either retire or are retrenched by the
employer.  In this case the First Respondent was wound up.  Aside from members
being prejudiced, there are also prejudice to other members of the Funds.



[11]      Following legislative intervention in 2014 with the Financial
Services Laws General Amendment Act No. 45 of 2013 ("the FSLGA"), the
provisions of the FSLGA, with effect from 28 February 2014, _inter alia_ :



            11.1    Amended s37[9] of the PFA by re-introducing criminal sanctions which will be imposed on all those who fail to comply with certain provisions of the PFA including s13A of the PFA.[10]



11.2    Introduced as ss(8) & (9) to s13A[11], to enable the fund to identify
and hold certain persons who are in control of or regularly involved in the
management of the employer's overall financial affairs, accountable and
personally liable for any non-compliance with s13A and for the non-payment (or
short payment) of pension fund contributions.[12]



[12]      The First and Second Respondents do not dispute that the employer
(i.e the First Respondent) was a participating member of the Applicants.



[13]      With regard to the personal liability provisions s13A(8) & (9) of
the PFA read as follows:



'__**For the purposes of this section, the following persons shall be
personally liable for compliance with this section and for the payment of any
contribution referred to in subsection (1)**___;_



_(a) If an employer is a company, every director who is regularly involved in
the management of the company 's overall financial affairs;_



_(b) If an employer is a close corporation registered under the Close
Corporation Act, 1984 (Act 69 of 1984), every member who controls or is
regularly in the management of the close corporation 's overall financial
affairs; and _



_(c)..._



_(9)(a) A fund to which the provisions of subsection (8) apply, must request
the employer in writing to notify it of the identity of any such person so
personally liable in terms of subsection (8)._



_(b) In the event that an employer fails to comply with the requirements of
this provision, all the directors (in respect of a company), all the members
regularly involved in the management of the closed corporation (in respect of
a closed corporation), or all the persons comprising the governing body of the
employer, as the case may be, shall be personally liable in terms of
subsection (8). '(_on emphasis_)_



[14]      This application is about the personal liability provisions of
s13A(8) & (9) of the PFA.



**Second and Third Respondents**



[15]      Before I elaborate on the Second and Third Respondents, I must
record that the First Respondent ("the employer") was at the time of the
application, under liquidation and as such, no order was sought against First
Respondent[13]. The Second and Third Respondents who are the directors of
First Respondent, says that the employees '_were paid a sum which reflected
their net salaries less their fund contributions. This way the employer's
income was [allegedly] distributed such that all employees would receive a
salary '. _The employees thus received their net salaries [presumably reduced]
and their contributions towards their pension and provident were deducted from
their salaries. But on the Second Respondent's version, the deducted pension
and provident portions were utilised to subsidise employee salaries. On this
version the fund deductions were clearly deducted from the salaries and not
paid over to the Applicants. Put differently the employee members did not
receive any pension and provident fund benefits despite receiving a net salary
which excludes their pension and provident fund contributions. The Second
Respondent calls this an adjustment of payment of employee compensation which
the Applicants do not accept; nor do they agree as the actual deductions were
not made from the employees' salaries. The Second Respondent has demonstrably
failed to substantiate this allegation with relevant and objective evidence.



[16]      Second, they contend that the personal liability provisions of
section 13A(8) of the PFA do not apply to the Third Respondent, although
listed as a director, as she was not involved in the affairs of the employer
and an order should not be granted against her.



[17]      Third, in instances where the employer and the directors are unable
to comply with their statutory obligations due to reasons beyond their control
and have not been either reckless or negligent in their actions, the
applicability of the personal liability provisions of section 13(8) of the PFA
is dependent on two considerations, namely:



17.1    The circumstances which lead to the breach of the statutory provisions
by the employer and its individual directors;



17.2    The extent to which the directors were responsible for those
circumstances.



**Evaluation**



[18]      The Second Respondent cannot unilaterally decide not to submit
contribution schedules. This runs contrary to the purpose, spirit and import
of the PFA and, to allow this type of conduct would undermine the provisions
of the PFA.



[19]      Given the nature of the relief sought and the serious prejudicial
consequences of the failure to comply with the provisions of the PFA to the
employees and other members of the Applicants, the Second and Third
Respondents are not entitled to excuse themselves from these very serious
statutory obligations. Their explanations are not plausible. Personal
liability is statutorily regulated by the PFA and under the circumstances, as
demonstrated above, applies.



[20]      The Applicants therefore requires the schedules and returns for the
period May 2020 - July 2020 to finally do the outstanding calculations.
However, the Employer had generated sales in excess of R 232 000.00 for the
period April 2021 - March 2023, notwithstanding it being in liquidation in May
2022.



**The period January 2020- April 2020**



[21]      Second Respondent contends that no actual deductions were made from
employees in this period. In terms of s13A(1) read with ss(3), it is
peremptory to pay over the contributions deducted from salaries. Section
13(8)(a) imposes personal liability on those directors of the employer who are
regularly involved in the management of the employer's overall financial
affairs. Unilateral conduct is precluded on a plain interpretation of the PFA.
The employer must submit contribution schedules (and make payment accordingly)
as it is a statutory obligation imposed on it by the relevant provisions of
the PFA, Regulation 33 to the PFA and Circular PF No. 110 form: Financial
Services Board.



[22]      Moreover, the period January 2020 to almost the end of March 2020
was manifestly prior to the Covid-19 pandemic. The National Lockdown was only
imposed on 26 March 2020. The pandemic and its general effects are not an
excuse for the non-compliance with payment of contributions for January,
February and March 2020, during which time the employer was operational. Fund
contribution exposure for this period (and for which no defence on the merits
have been advanced) amounts to R74, 046.80 which the directors are liable to
pay.



[23]      The amount of R 93 715.53 is calculated on contributions already
received; therefore, payment is due. The Second Respondent persists and
ignores the statutory obligation (and other obligations in terms of the rules)
to pay over the employer's portion of the contributions to the Funds. Here the
answering affidavit demonstrates a fundamental misconception: it is not a
bonus for the employees if the employer matches their monthly contributions.
The employer is statutorily obliged to pay over contributions for which it is
liable. The Second Respondent should have ensured that the employer's portion
towards the employees' pension and provident funds were made. He has not done
so, despite on his version having used personal resources to fund other
expenses of the employer.



**The period May 2020 - July 2020**



[24]      The Applicants require the submission of the contribution schedules
for this period to calculate the pension and provident fund contributions and
ancillary payments such as interest which is due.



**Personal liability**



[25]      The Second Respondent contends that the Third respondent, although
listed as a director, was not involved in the affairs of the employer and an
order should not be granted against her. This assertion cannot stand. She was
a director of First Respondent and has to accept the responsibilities that
come it, as she is listed as a director on the Second Respondent's own CIPRO
search, reflected she had a loan account with the employer in the amount of
R285, 672.37 as at 21 November 2021, on the version advanced in the answering
affidavit. The Second Respondent further denies that the directors breached
the provisions of the PFA and that they are personally liable (i.e the
personal liability provisions of section 13(8) of the PFA is dependent on the
circumstances which lead to the breach of the statutory provisions by the
employer and its individual directors and the extent to which the directors
were responsible for those circumstances).This too, cannot stand.



[26]      The Second Respondent accepts that the PFA prescribes personal
liability. At common law, the Applicants have no redress against anyone other
than the employer; however, s13A(8)(a) now permits them to hold not only the
employer, but also the employer's directors personally liable for the
employer's debts '_without the need to pierce the corporate veil '. _In other
words, there is no need to give s 13A(8)(a) an interpretation unsupported by
the text to achieve its purpose; the text-based interpretation achieves its
purpose. The Second Respondent is confusing his fiduciary duties as a director
of the employer with his statutory duties in terms of the PFA.



[27]      Furthermore, the Second Respondent has not demonstrated as a fact,
that for the periods January 2020 to April 2020 and May 2020 to July 2020, no
factual deductions were made. In any event there remains the issue of the
employer's portion of the contributions which the second respondent has not
addressed. The Second Respondent has similarly not demonstrated, as a fact,
that the employer was not trading between May 2020 until its final
liquidation.



[28]      In all the circumstances it is submitted that the Second and Third
Respondents have fallen short of advancing a bona fide defence. The purported
defences are far-fetched and untenable and falls to be rejected on the papers.
Given the high interest in withdrawal claims from the two-pot retirement
system which has exposed the failure of employers to pay pension
contributions, this is but just another example of how retirees and those who
thought they could readily access their benefits, suffer.



[29] I would be failing in my constitutional duty if an order is not granted
to the vulnerable groups. I reiterate, my attention is drawn to an article in
the media and to the high interest in withdrawal claims from the two-pot
retirement system which has exposed the failure of employers to pay pension
contributions/s to funds who administer these contributions as envisaged under
these unfortunate circumstances.[14]



**Costs**



[29]      The Applicants seek a punitive costs order on the scale as between
attorney and own client as it is prejudicial to the Applicants members' that
the costs have to be borne by the members of the Funds who have to fight to
access benefits and face unwarranted reduced benefits. The Directors (and the
employer) have neglected their statutory responsibilities in terms of the PFA
towards their employees which justifies a punitive costs order.



**The Second and Third Respondents withdrawal**



[30]      Before I conclude I deem it prudent to address the following.  On
11th July 2024 the Registrar issued a Notice of Set Down for the opposed
hearing of this application to take place on 17th October 2024. Therein the
Second and Third Respondent's address was recorded as 0[...] B[...] Drive,
Plattekloof Glen, 7460. On 3rd October 2024 their attorney withdrew as
attorney of record. In terms of the withdrawal notice the Second and Third
respondents' last known address is recorded as 0[...] B[...] Drive,
Plattekloof Glen, 7460 ("0[...] B[...] Drive").  The Applicants cited B[…]
Drive under oath in the Founding Affidavit as the Second and Third
Respondents' residential address, confirmed in the Answering Affidavit to by
the Second Respondent on 27th September 2023 wherein he confirmed under oath
that 0[...] B[...] Drive is his residential address. The same applies to the
Third Respondent in respect of her confirmatory affidavit. On 16th October
2024 the Sheriff provided returns of non-service of the Notice of Set Down
[for 17th October 2024] on the Second and Third Respondents at 0[...] B[...]
Drive.



[31]      On the date of the hearing, 17th October 2024, anticipating new
counsel or appearances in person by the Second and Third Respondents, who
however were not present at court. Given the nature of the claims and the
importance of the matter, the Respondents names were called out in the
passages.  I further stood down the matter till after 10:00am to cater for
possible late arrivals whereafter I heard argument conducted by the
Applicants. Despite no appearance by the Respondents, I nevertheless evaluated
their versions placed before Court under oath which versions I took cognisance
of.



**Order**



[32]      Having heard counsel for the Applicants it is ordered:



a)                    Directing the Second and Third Respondents to provide
the Applicant with the documents set out below within 30 calendar days of the
date of this Court Order:



(i)                    Outstanding pension fund contribution schedules, in
respect of pension fund contributions for its employees which is payable to
the First Applicant, as contemplated in [Regulation
33](http://www.saflii.org/za/legis/consol_act/pfa1956165/index.html#s33) of
the [Pension ](http://www.saflii.org/za/legis/consol_act/pfa1956165/) [Funds
Act, Act](http://www.saflii.org/za/legis/consol_act/pfa1956165/) 24 of 1956
for the periods May 2020 to July 2020.



(ii)                  Outstanding provident fund contribution schedules, in
respect of provident fund contributions for its employees which is payable to
the Second Applicant, as contemplated in [Regulation
33](http://www.saflii.org/za/legis/consol_act/pfa1956165/index.html#s33) of
the [Pension ](http://www.saflii.org/za/legis/consol_act/pfa1956165/) [Funds
Act, Act](http://www.saflii.org/za/legis/consol_act/pfa1956165/) 24 of 1956
for the period May 2020 to July 2020.



b)                    Directing the Second and Third Respondents to pay over
the monies owing to the Applicants, as determined based on contribution
schedules already submitted by the Respondents but not paid over, which amount
has accrued to R 93 715,53 (Ninety-Three Thousand, Seven Hundred and Fifteen
Rand, Fifty-Three Cents).



c)                    Within one calendar month of the Applicants having
determined the outstanding pension and provident fund contributions, payable
by the Respondents based on the schedules, provided by the Respondents in
terms of paragraph (a) above, directing the Second and Third Respondents to
pay:



(i)                    All outstanding pension fund contributions, together
with prescribed interest thereon, to the First Applicant.



(ii)                  All outstanding provident fund contributions, together
with prescribed interest thereon, to the Second Applicant.  



d)                    The Applicants are granted leave to approach this Court
on the same papers, as supplemented, to seek relief once the amounts payable
by the Respondents have been quantified based on the returns, schedules and
forms are provided by the Second and Third Respondents.



e)                    The Second and Third Respondents, jointly and severally
are to pay Applicants' legal costs in respect of this application on an
attorney and own client scale.





**PARKER AJ**

**Acting Judge of the High Court,**

**Western Cape Division**





_**APPEARANCES**_



For the First & Second Applicants:           Adv Peter Coston

Instructed by:                                           Soonder Inc c/o Vezi
& De Beer Inc.

Cape Town



For the First, Second &                :           Not Represented

Third Respondents



Date of Hearing:                                          17 October 2024

Date of Judgment:                                       16 January 2025



This judgment was handed down electronically by circulation to the parties'
representatives by email.

  

* * *

[1] Manamela "Deductions from Pension Benefits for Purposes of [Section
37D](http://www.saflii.org/za/legis/consol_act/pfa1956165/index.html#s37d) of
the [Pension Funds Act 24 of
1956](http://www.saflii.org/za/legis/consol_act/pfa1956165/): Employers Forced
to Tow the Line" 2007 (19) SA Merc LJ 189 - 204 at 198.

[2] Cameron "Troubled Firms must still Contribute to Pension Funds" (14 April
2013) Personal Finance available at http://www.iol.co.za/business/personal-
finance (accessed 15 October 2013)

[3] Abongwe Kobokana "Over 7 700 employers default on pension contributions:
Godongwana" (11 December 2024) SABC News available at
https://www.sabcnews.com/sabcnews/over-7-700-employers-default-on-pension-
contributions-godongwana/

[4] [Section
13A(3)(a):](http://www.saflii.org/za/legis/consol_act/pfa1956165/index.html#s13a)

'_Any contribution to a fund in terms of its rules, whether it be a
contribution contemplated in subsection (1), a contribution for the payment of
which a member of the fund is responsible personally, or a contribution to be
paid on a member 's behalf-_

(i)            _Shall be transmitted directly into the fund 's account with a
bank finally registered as such under the Banks Act, 1990 (Act 94 of 1990),
___**not later than seven days after the end of the month for which such a
contribution is payable**__ _. ' _[own emphasis]

[5] Section 13A (7):

'_Interest at a rate as prescribed shall be payable from the first day
following the expiration of the period in respect of which such amounts were
payable on-_

_(a) the amount of any contribution not transmitted into a fund 's bank
account before the expiration of the period prescribed therefor by subsection
(3)(a)(i);_

_(b) the amount of any contribution not received-_

_(i) by a fund before the expiration of the period prescribed therefor by
subsection (3)(a)(ii); or_

_(ii) in the circumstances contemplated in subsection (3)(a)(iii), by the
insurer concerned before the expiration of the period prescribed therefor by
that subsection;_

_(c) the value of any benefit, or right to any benefit, not transferred by the
first find to the other fund before the expiration of the period prescribed
therefor by subsection (5). "_

[6] _Joint Municipal Pension Fund v Ehlanzeni District Municipality_ [2018 (6)
SA 197](/cgi-bin/LawCite?cit=2018%20%286%29%20SA%20197 "View LawCiteRecord")
(GP) at 210 C-D

[7] _supra_ at 213 A-D

[8] Motseotsile Clement Marumoagae - Section 13A of the PFA: Employer's
Failure to Pay Employee's Contribution to the Employee's Pension Fund,
_Speculum Juris_ Volume 29, Part 1, 2015

[9] By section 49(b)

[10] 37 penalties

_(1)__            __Any person who-_

_a.__              __Contravenes or fail to comply with section 4, 10, 13A,
13B or 31_

_b.__              _… _., or_

_c.__              _… _.,_

_Is guilty of an offence and liable on conviction to a fine not exceeding R10
million or to imprisonment for a period not exceeding 10 years, or to both
such fine and such imprisonment. '_

[11] By section 17 of the FSLGA

[12] R176, annexure "OG7" - Financial Service Board: Circular PF No. 110

[13] This is in accordance with the moratorium on legal proceedings in terms
of s133 of the Companies Act

[14]   Two-pot: While claims spike, many employers never paid pensions

  https://www.msn.com/en-za/news/other/two-pot-while-claims-spike-many-
employers-never-paid-pensions/ar-AA1vgblb?ocid=BingNewsVerp

  

* * *