More than 15 years after the Cadac Pension Fund was placed under curatorship, the High Court in Johannesburg has delivered another judgment in the protracted litigation surrounding the Fund – this time clarifying who must ultimately bear the substantial legal and curatorship costs that followed regulatory intervention.
The ruling, handed down on 12 February, did not revisit the merits of the curatorship itself. Instead, it addressed two appeals arising from a High Court costs order in 2023 and provides guidance on how earlier Supreme Court of Appeal (SCA) directives should be interpreted.
At issue was whether certain former trustees must personally bear the costs of the curatorship proceedings, and whether the appointed curator was correctly deprived of his costs in opposing an earlier attempt to remove him.
The dispute dates to December 2010, when the executive officer of the then Financial Services Board (FSB) – now the Financial Sector Conduct Authority – approached the High Court on an urgent ex parte basis to place the Cadac Pension Fund under provisional curatorship.
The application was brought under section 5 of the Financial Institutions (Protection of Funds) Act. The regulator sought the appointment of a curator and a rule nisi calling upon interested parties to show cause why the costs of the proceedings, the costs of the curator (including remuneration and legal expenses), and the costs of a statutory inspection conducted into the affairs of the fund should not be borne personally by the trustees, alternatively from the assets of the Fund.
The Court granted the provisional order and appointed Antony Mostert as provisional curator.
The 2011 counterapplication
In February 2011, trustees appointed after the provisional curatorship launched a counterapplication – purportedly in the name of the Cadac Pension Fund – seeking Mostert’s removal and the appointment of alternative curators.
However, the High Court later held that the trustees lacked locus standi to bring the counterapplication. Once the provisional curatorship order was granted, control of the Fund vested in the curator. The trustees therefore had no authority to institute proceedings on the fund’s behalf.
In December 2013, the High Court confirmed the curatorship and retained Mostert as curator. The Court dismissed the counterapplication and made various costs orders. These included:
- holding certain trustees personally liable for the costs of the curatorship application and related proceedings; and
- disallowing Mostert’s costs of opposing the counterapplication.
All the parties appealed.
In February 2016, the SCA confirmed the curatorship but set aside all costs orders made by the High Court and reserved costs for later determination after consideration of the curators’ final report. Two additional curators were appointed, and the matter was remitted to the High Court to determine outstanding issues, including costs.
In May 2023, the High Court allocated liability for various categories of costs. That decision gave rise to the two appeals heard in April 2025.
First appeal: the curator’s costs
The first appeal was brought by the Cadac Pension Fund and Mostert. It concerned the portion of the 2023 order that effectively left in place the earlier disallowance of Mostert’s costs of opposing the 2011 counterapplication.
In the original 2013 judgment, the Court concluded it was not for Mostert to defend his own appointment, and the costs of preparing his answering affidavit in the counterapplication should be disallowed. Although the SCA later set aside all costs orders, the 2023 ruling did not reconsider that specific disallowance.
The appeal court held that this was incorrect.
Interpreting the SCA’s 2016 consent order, the Court found that all prior costs orders – without exception – had been set aside. This included the paragraphs disallowing Mostert’s costs. The High Court hearing the matter in 2023 was therefore required to reconsider those costs afresh.
Having done so, the appeal court concluded that Mostert’s answering affidavit in the counterapplication had been both necessary and materially useful to the Court. It contained information uncovered during his investigation as provisional curator and was relied upon in confirming the curatorship and dismissing the counterapplication.
The Court that there was no basis for depriving him of his costs or for treating the matter as one warranting a de bonis propriis costs order. Such orders require a material departure from the responsibilities of office or improper conduct. On the record, the Court found no such circumstances.
The appeal was upheld. The paragraphs disallowing Mostert’s costs were set aside, and the trustees who brought the counterapplication were ordered to bear those costs in line with the existing order allocating the remaining costs of the counterapplication. No order was made as to the costs of the appeal, which was unopposed.
Second appeal: trustees’ personal liability
The second appeal was brought by former trustees Simon Nash and Elena Forno-Nash. They sought to overturn the 2023 ruling that they, together with a former co-trustee, were personally liable for:
- the costs of the curatorship application and the opposition thereto;
- the remuneration and legal costs of the curator; and
- the costs of the statutory inspection conducted into the fund’s affairs.
They advanced several grounds of appeal, including arguments that certain categories of costs were impermissible, that the regulator lacked standing to seek recovery of costs already defrayed from the Fund, that the curatorship had not been completed, and that the Court relied on reports that were not properly in evidence.
The appeal court rejected these contentions.
It held that the costs awarded in 2023 mirrored those originally sought in the 2010 notice of motion and reflected in the provisional order granted at the outset of the proceedings. From the beginning, the trustees had been called upon to show cause why they should not be held personally liable for those categories of costs.
The Court found no procedural unfairness. The relief granted fell within the powers conferred by section 5(5) of the Financial Institutions (Protection of Funds) Act, which permits a court to make orders regarding, among other things, the remuneration of a curator, inspection costs and any other matter deemed necessary.
The argument that the matter was premature because the curatorship had not been finalised was also rejected. The court accepted the finding that the administrative aspects of the curatorship had been completed and that only related litigation kept the curatorship notionally alive.
As to the reliance on curators’ reports, the Court held that the affected parties had been afforded an opportunity to respond, and there was no procedural irregularity.
The second appeal was dismissed with costs.
