A high court tale of cattle, a cattle manager and his pension fund

31 Jul 2024

A recent court ruling in KwaZulu-Natal involving a herd of cattle, kidney failure and a pension fund serves to reinforce the rules around when employers can make deductions from an employee’s pension fund.

Neil Hillhouse’s urgent application to the KwaZulu-Natal Division of the High Court in Pietermaritzburg for his pension benefit to be paid to him in full was dismissed. Hillhouse was employed by Pidelta in October 2015 as a livestock manager and later promoted to manager of a crop farm.

He was a member of the Alexander Forbes Retirement Fund. In November 2021, after having been on dialysis treatment for some time, Hillhouse had a kidney transplant. His version of events is that Pidelta later fabricated a reason to dismiss him following his ill health. However, the court ruled that there was no evidence.

Pidelta had commenced disciplinary proceedings against Hillhouse in June 2023. There were three charges against him:

A failure to adequately manage the herd of cattle entrusted to him;

The unauthorised use of the first respondent’s property by permitting 70 of his own cattle to graze on the first respondent’s land; and

Undertaking business in direct competition with the business of his employer.

He apparently confirmed that he was guilty of all three offences. The disciplinary committee accepted this, found him guilty and recommended that Pidelta terminate his employment, which it did. Importantly, the court judgment notes that Hillhouse never attempted to overturn the findings or recommendations of the disciplinary hearing.

Hillhouse was under the impression that his pension fund benefit would be sufficient to cover his medical and living costs. However, Pidelta informed the retirement fund that it had laid charges against Hillhouse for the “theft” of cattle worth about R4-million. The employer wanted the pension fund to hold off on paying out Hillhouse’s benefit until the case was concluded.

However, the fund said it needed to confirm that it was a legitimate case; that there was a reasonable chance of a successful claim, and that the employer was not unreasonably delaying the conclusion of the case.

The pension fund had several meetings to discuss the merits of the employer’s request and was able to show that due consideration had been given to both parties.

“The … minutes demonstrate that it [the fund] displayed an independent mind in considering the employer’s request. Indeed, it is possible to discern from the minutes the evolution of a growing disquiet by the fund with the lack of action, at least initially, by the employer in commencing with its civil action against [Hillhouse],” the ruling states.

The application was dismissed. Under the Pension Funds Act, a fund may deduct an amount due by an employee to his employer for any damage or loss caused as the result of theft, fraud or damage by the employee.

The Alexander Forbes legal team told Daily Maverick that the judgment contains significant detail dealing with, among other things, the fund’s thorough consideration of the matter and the judge’s comment that the fund had been entirely transparent in its approach.

“In summary, the High Court upheld the fund’s decision to withhold payment, which was based on the employer’s investigation into alleged fraud by the member,” it said.

Pension funds adjudicator Muvhango Lukhaimane noted that the judgment was correct and in keeping with pension fund legislation. DM

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