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Justifiable under the circumstances

28 January 2020 Myra Knoesen
Muvhango Lukhaimane

Muvhango Lukhaimane

Most of the determinations that we receive involve members of the public alleging that they have been unfairly treated. In this determination by the Office of the Pension Funds Adjudicator (OPFA), however, the allocation of death benefits seems justifiable under the circumstances.

The issue at hand

For the second time in a year, a Durban man has failed in his attempts to lay his hands on a benefit of almost R4 million following his wife’s death. 

In September 2018, Krean Naidoo of Umhlatuzana Township complained to the PFA, Muvhango Lukhaimane, about Coca Cola Shanduka Beverage Provident Fund (first respondent) paying the death benefit into the deceased’s estate account. 

However, the complaint was dismissed on the grounds that Naidoo had excluded himself from being a legal dependant of the deceased. 

A deed of settlement

The dead woman, Ms S Naidoo, was a member of the first respondent until she passed away on 24 June 2016. Naidoo was the spouse of the deceased. Following her demise, a death benefit in the amount of R3 829 618 became available for distribution to her beneficiaries. The board of the first respondent resolved to pay the death benefit into the deceased’s estate account. 

Naidoo and the deceased were married out of community of property. The deceased moved out of the common home in November 2015, and thereafter, lived alone until the time of her death. 

The first respondent submitted that prior to her death, the deceased had initiated divorce proceedings against Naidoo. Further, Naidoo and the deceased agreed in a deed of settlement that neither party had any claim to the assets of the other. 

The deceased had a Will in which she appointed her parents as her sole beneficiaries. In the event of them predeceasing her, her entire estate would then devolve upon her two sisters. The Will was declared valid by the High Court following an application by the deceased’s parents which was opposed by Naidoo. 

The original determination

In her original determination in April 2019, Ms Lukhaimane said Naidoo and the deceased were estranged since November 2015 and were no longer living together on the date of her death. Prior to the death of the deceased, she had initiated divorce proceedings against Naidoo, and they signed a deed of settlement. 

“The deceased had a Will in which she appointed her parents as her sole beneficiaries. The complainant confirmed to the first respondent that he was not financially dependent on the deceased. Therefore, by agreement with the deceased, the complainant excluded himself from being a legal and/or factual dependant of the deceased. It follows that his exclusion from the allocation of the death benefit was equitable in the circumstances,” Ms Lukhaimane said. 

She found that the payment of the death benefit into the estate account was justifiable under the circumstances. Thus, the complaint was dismissed. 

Setting aside the PFA’s original decision

However, Naidoo was not happy and submitted an application for reconsideration of the determination to the Financial Services Tribunal (FST). The basis for his application was primarily that he was entitled to a portion of the death benefit as the spouse of the deceased and thus, as a legal dependant. 

The FST handed down a ruling, setting aside the PFA’s original decision and referred the complaint to the PFA for reconsideration based mainly on the issue that the PFA had failed to fully investigate the circumstances regarding Naidoo’s allegation that he and the deceased were to reconcile. 

This was disputed by the first respondent which submitted that Naidoo did not submit any evidence to prove that he and the deceased were reconciling prior to her death. It submitted that by his admission, Naidoo and the deceased last communicated three weeks prior to her death, which is non-indicative of reconciliation. 

The first respondent submitted that the overriding factor for all section 37C death claims is financial dependency at the time of the death of the deceased, which factor the complainant failed to prove as he confirmed on numerous occasions and at the FST hearing, that he was not financially dependent on the deceased at the date of her death. 

The first respondent attached affidavits from the deceased’s mother, a close friend and the attorney representing the deceased in the divorce proceedings. The first respondent submitted that considering the affidavits, it was clear that the deceased was afraid of Naidoo and did not want him to know where she lived after they separated. The deceased sought to rather meet with Naidoo in a public space as she feared him. Also, the deceased had not mentioned that she was considering reconciliation with Naidoo to any of the three persons mentioned above. Further the deceased’s mother stated that shortly before her death, the deceased also considered immigrating to Canada without her spouse. 

The first respondent submitted that Naidoo had two immovable properties registered in his name. He was also gainfully employed and would not be left destitute following the death of the deceased. Therefore, the first respondent decided not to allocate a portion of the death benefit to him. 

The complaint is dismissed

In issuing a determination for the second time in this matter, Ms Lukhaimane said Naidoo was aggrieved with the board’s decision to pay the deceased entire death benefit into her late estate. 

While Naidoo had submitted that he was the legal spouse of the deceased, he and the deceased were estranged since November 2015 and were no longer living together on the date of her death. She said he had confirmed to the first respondent that he was not financially dependent on the deceased. Therefore, he was not a factual dependant of the deceased. 

Naidoo had also failed to provide proof that he and the deceased were in the process of reconciliation. He could have submitted Whatsapp messages, SMSes exchanged between the parties or further telephone records proving that the parties were in communication enough to prove that they were reconciling. However, he failed to do so. 

“This Tribunal is satisfied that the complainant is not entitled to a portion of the death benefit. Therefore, the complaint is hereby dismissed,” said Lukhaimane. 

Writer’s thoughts:
There are times where we bring problems on ourselves. In this case, considering Naidoo excluded himself from being a legal dependant of the deceased, do you believe the allocation of death benefits seems justifiable under the circumstances? Please comment below, interact with us on Twitter at @fanews_online or email me your thoughts myra@fanews.co.za.

 

Comments

Added by Moga Naicker, 28 Jan 2020
The decision of the Pension Fund Adjudicator is 100% correct. The surviving spouse has NO legal right to the funds as he firstly, "out of community of property". Secondly, they were estranged and there was no proof of any reconciliation. Thirdly, there was a "Deed of Settlement" agreement that excluded him from any financial gain. Fourthly,there was no proof that he was financially dependent on her as he has 2 properties and was gainfully employed
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Added by Cheryl Smith, 28 Jan 2020
The outcome was justifiable, I don't think he had any claim on her estate at all.
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Added by Ayanda Khumalo, 28 Jan 2020
Hard to believe that it happens so often. The FSCA Tribunal gets is so wrong - again!
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Added by Anthony, 28 Jan 2020
Seems justifiable and reasonable
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Added by Bernard, 28 Jan 2020
Justifiable under the circumstances 100%
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