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[2011] ZAGPPHC 206
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Board of Health Care Funders of the Southern Africa (Association Incorporated Under Section 21 of the Companies Act, 61 of 1973) and Another v Council for Medical Schemes and Others (70018/10) [2011] ZAGPPHC 206 (7 November 2011)
REPORTABLE
IN
THE NORTH GAUTENG HIGH COURT,
PRETORIA
(REPUBLIC OF SOUTH AFRICA)
Case
number: 70018/10
Date:
7 November 2011
In
the matter between:
THE
BOARD OF HEALTH CARE FUNDERS OF
THE
........................................
First Applicant
SOUTHERN
AFRICA (ASSOCIATION
INCORPORATED
UNDER SECTION 21 OF THE COMPANIES ACT, 61 OF 1973)
SOUTH
AFRICAN MUNICIPAL WORKERS' UNION NATIONAL
…................
Second Applicant
MEDICAL
SCHEME (SAMWUMED)
and
THE
COUNCIL FOR MEDICAL
SCHEMES
.....................................................
First
Respondent
THE
MINISTER OF
HEALTH
.......................................................................
Second Respondent
SOUTH
AFRICAN PRIVATE PRACTITIONERS
FORUM
...............................
Third
Respondent
PHARMACEUTICAL
SOCIETY OF SOUTH AFRICA
...................................
Fourth
Respondent
UNITED
SOUTH AFRICAN
PHARMACIES
......................................................
Fifth Respondent
MEDI-CLINIC
SOUTHERN AFRICA
LTD
..........................................................
Sixth
Respondent
HOSPITAL
ASSOCIATION OF SOUTH AFRICA
LTD
................................
Seventh
Respondent
ER24
EMS (PTY)
LTD
.....................................................................................
Eighth Respondent
NATIONAL
RENAL CARE (PTY)
LTD
...............................................................
Ninth
Respondent
PHARMAPLAN
(PTY)
LTD
................................................................................
Tenth Respondent
B.BRAUN
ATIVUM (PTY)
LTD
.....................................................................
Eleventh Respondent
MULTIPLE
SCLEROSIS SOUTH AFRICA
.............................
…........................................
Twelfth
SOUTH
AFRICAN MEDICAL
ASSOCIATION
.............................................................
..
Thirteenth
JUDGMENT
Pretorius
J
[1]
The applicant filed and served an amended notice of motion and
supplementary affidavit after initially approaching the court
on 1
December 2010 on an urgent basis. The matter was removed from the
roll by agreement between all the parties on 1 December
2010 and the
costs were reserved. Currently the applicants request the court to
issue a declaratory order on the interpretation
of the words "pay
in full" in regulation 8(1) of the General Regulations made
pursuant to the Medical Schemes Act, 131
of 1998 (the "Act").
The requests by all the parties to intervene as interested parties
were granted by the court as
it was clear that they are all role
players in the medical industry and have a direct and substantial
interest in the litigation.
[2]
Two amici curiae also filed and served papers. From the outset the
applicants contended that all parties who wanted to intervene
should
be permitted to do so to assist the court to come to a just decision.
All parties were joined without opposition from the
applicants and,
in the case of the amici curiae, without opposition from either the
applicants or the respondents.
[3]
SAMWUMED, the second applicant, was granted an order to intervene in
an application dated 4 April 2011 - four months after the
initial
application was launched. The second applicant makes common cause
with the first applicant.
[4]
The second respondent has not filed any opposing affidavit and was
not represented in the proceedings on 1 December 2010 or
in the
present proceedings. This court regards it as a neutral factor and
will not make any deductions from this in favour of or
to the
prejudice of any of the applicants or respondents.
[5]
Thirteen respondents filed and served papers opposing the application
and were represented in court, joined by Counsel for the
amicus
curiae.
[6]
The applicants contended that the court has to decide three issues:
1.
The first applicant's entitlement to institute proceedings for
declaratory relief;
2.
The interest and locus standi of the intervening respondents in
opposing the relief sought by the applicants;
3.
The meaning of the words "pay in full" in regulation 8(1)
of the General Regulations which were promulgated in terms
of section
67 of the Act.
[7]
The first respondent, supported by the other respondents, raised
three points in limine. The court decided to hear the application
in
its' entirety and to dealwith all the points in limine and if
necessary, the question of law and factual questions in the judgment.
[8]
Subsequent to the matter being heard on 22 and 23 September 2011, and
judgment being reserved, counsel for the applicants applied
to have
the recent judgment of the Supreme Court of Appeal in Registrar of
Medical Schemes and Another v Suremed Medical Scheme
(201/11)
[2011]
ZASCA 173
(29 September 2011) to be submitted and considered by the
court. All the respondents indicated that it should not be received
by
the court as it is irrelevant to the issue in the present matter.
[9]
The court decided to accept the authority and to consider it. It was
submitted to court, with the letters of the respondents'
attorneys
attached as well as the comment by the attorneys for the amici
curiae. A note was sent to all parties and they were invited
to
comment.
[10]
The applicants however did not only place the case before the court,
but made submissions as to why the court should consider
it. The case
dealt with the amalgamation of medical schemes and the Supreme Court
of Appeal confirmed the judgment of the court
a quo that no
amalgamation or transfer can take place without an agreement between
the parties, that is the medical aid schemes,
concerned. I was
requested to take particular cognizance of paragraph 17 of the
judgment.
[11]
The first respondent responded and once more reiterated that the case
is irrelevant and deals with section 63 (11) and regulation
7 and has
no relation to the interpretation of regulation 8.
[12]
The first respondent was joined in this by the third, fourth, fifth,
seventh, eighth and ninth respondents who also indicated
to the court
that the decision was irrelevant to the present proceedings for the
same reasons.
Background:
[13]
Regulation 8 has been in force since 1 January 2000. The current
problem was caused on 11 November 2008, according to the applicant,
when the Appeal Board decided two cases on appeal which was referred
by the Appeal Committee in terms of section 50 of the Act
(Kara - and
Samwumed matters). The Appeal Committee and the Appeal Board had
pursuant to these two decisions interpreted the words
"pay in
full" in regulation 8 to mean that the medical scheme must make
full payment of a service providers' invoice
in respect of the costs
of providing health care services for Prescribed Minimum Benefits
(PMB) without taking the rules of the
medical scheme into
consideration in any complaints they dealt with.
[14]
The definition of PMB's is:
"Prescibed
minimum benefits' means the benefits contemplated in section 29(1
)(o) of the Act, and consist of the provision
of the diagnosis,
treatment and care costs of-
(a)
The Diagnosis and Treatment Pairs listed in Annexure A, subject to
any limitations specified in Annexure A; and
(b)
Any emergency condition."
[15]
Section 29(1 )(o) of the
Medical Schemes Act provides
: "29
Matters for which rules shall provide
(1)
The Registrar shall not register a medical scheme under
section 24
,
and no medical scheme shall carry on any business, unless provision
is made in its rules for the following matters:
(o)
The scope and level of minimum benefits that are to be available to
beneficiaries as may be prescribed/'
[16]
Section 7
of the
Medical Schemes Act sets
out the functions of the
first respondent as follows:
"7
Functions of Council
(1)
The functions of the Council shall be to-
(a)
protect the interests of the beneficiaries at all times;
(b)
control and co-ordinate the functioning of medical schemes in a
manner that is complementary with the national health policy;
(c)
make recommendations to the Minister on criteria for the measurement
of quality and outcomes of the relevant health sen/ices
provided for
by medical schemes, and such other services as the Council may from
time to time determine;
(d)
investigate complaints and settle disputes in relation to the affairs
of medical schemes as provided for in this Act;
(e)
collect and disseminate information about private health care;
(f)
make rules, not inconsistent with the provisions of this Act for the
purpose of the performance of its functions and the exercise
of its
powers;
(g)
advise the Minister on any matter concerning medical schemes; and
(h)
perform any other functions conferred on the Council by the Minister
or by this Act." (Court's emphasis)
[17]
After these two decisions, the Kara- and Samwumed decisions were
decided Dr Pearmain, an employee of the applicant, distributed
an
opinion in July 2009 in which she set out her reasons for her finding
that "pay in full" in terms of regulation 8(1)
means
payment according to the rules of the medical scheme.
[18]
The Kara- and Samwumed decisions by the Appeal Board were not
challenged according to the first respondent and presently medical
aid schemes are bound to this authority, and have to pay in full
according to service providers' invoices.
[19]
A month later, on 28 August 2009 the first respondent issued circular
24/2009 which declared that the council was bound by
the decisions in
the Kara - and Samwumed matters and that "pay in full"
means payment according to the service providers'
invoice.
[20]
Circular 37 of 2009 was issued on 15 December 2009 which noted that
not all medical schemes were making full payment per the
service
provider's invoice in respect of PMB conditions. The medical schemes
were advised to comply with the Act and the regulations
to avoid
incurring penalties for non-compliance.
[21]
On 25 February 2009 Circular 9 of 2010 was issued to note the
willingness of stakeholders to collaborate with the first respondent
to improve compliance with the Act and the Regulations to ensure
delivery of PMB's in a sustainable manner. A PMB task team was
thereafter established to set down a framework to achieve full
compliance by all stakeholders in respect of the costs of PMB
conditions.
[22]
On 31 July 2010 the PMB task team produced a "Code of Conduct in
respect of PMB benefits." The task team was to remain
in
existence after producing the Code of Conduct as it could not reach
consensus inter alia as to the meaning of regulation 8(1)
and the
meaning of what "pay in full" means in said regulation
8(1). The PMB task team was to advise "on possible
amendments to
the PMB regulations."
[23]
The applicants contend that "pay in full" should mean "pay
in full according to the rules of the medical scheme
"and not
"pay in full as per invoice."
First
point in limine: Non-joinder of the Medical Schemes: [24] The first
respondent raised as a first point in limine that all
the medical
schemes that are registered in terms of the Act would be directly
affected by this court's judgment and should have
been joined.
[25]
As the three points in limine are interrelated and interwined the
court will deal with each point and make a ruling as to whether
the
first applicant has locus standi or a legal interest or whether
section 19(1)(a)(iii) of the Supreme Court Act is applicable
to grant
the first applicant locus standi. I will also consider whether
section 38 of the Constitution is applicable as the applicants'
submit in their heads of argument.
[26]
The first respondent submitted that the non-joinder of all the
medical schemes renders the application fatally defective. The
applicants' argument in this regard is that the first respondent
represents all the registered medical schemes and therefore it
was
not necessary to join all the registered medical schemes. This
submission cannot be entertained as it was the applicants' duty
to
join all the interested parties who would be affected by the court's
decision. The first respondent is a representative of the
Medical
Schemes and will not be directly influenced by a judgment of this
court. The court has to agree that all medical schemes
should have
been joined as the judgment will have a direct impact on all the
medical aid schemes.
The
lack of locus standi:
[27]
The applicants rely on Ex parte Nell 1963 (1) 754 AD as authority to
prove locus standi. A declaratory order was sought in
terms of
section 19(1)(c) of Act 59 of 1959 and Steyn CJ held at p 758 H:
"Die
vereiste wat die wetgewer uitdruklik vir die verleende diskresionere
bevoegdheid stel, is 'n bestaande, toekomstige of
voorwaardelike reg
of verpligting, en 'n belanghebbende aansoeker wat verlang dat die
reg of verpligting ondersoek en bepaal word."
(Court's emphasis)
and
at p 760:
"Omdat
dit nie die funksie van Hof is om adviserend op te tree nie, en dit
nouliks die bedoeling van die Wetgewer kon gewees
het om met hierdie
bepaling daahn 'n verandering aan te bring, moet wel as vereiste
gestel word dat daar belanghebbendes is vir
wie die verkiarende bevel
bindend sal wees." (Court's emphasis)
[28]
The first Applicant alleged that it is:
""...the
major representative organization of medical schemes registered in
terms of the Act and also represents medical
scheme administrators;
BHF "represents 75 medical schemes and 7 medical scheme
administrators"
and:
"...main
objective is to engage with government and other organisations in
order to contribute to the formulation of policy,
where necessary, on
behalf of the entire medical scheme industry. "
and:
"...as
it is a representative organization of medical schemes and provides
guidance to the medical scheme and administrators
with regard to
statutory enactments, the obligation as well as the right of medical
schemes and the prevailing health policy."
(Court's emphasis)
[29]
According to the applicants they represent 75 medical aid schemes and
seven medical administrators. Apart from these allegations
the
applicants further maintain that certain medical schemes and
administrators have indicated their support for the application.
The
members' affidavits who support the application were annexed to the
applicants' supplementary founding affidavit. The following
medical
schemes and administrators support the application according to the
affidavits and annexures: Medscheme Holdings (Pty)
Ltd, Samwumed (2nd
applicant), Fedhealth Medical Scheme, Compcare Wellness Medical
Scheme. Goodhope Medical Aid Society; PG Bison
Medical Aid Society,
IBM (SA) Medical Scheme, Grintek Electronics Medical Aid Scheme,
Building & Construction Industry Medical
Aid Fund, Universal
Healthcare Administrators (Pty) Ltd, Optimum Medical Scheme, LA-
Health Medical Scheme, Umvuzo Health Medical
Scheme, Sechaba Medical
Solutions (Pty) Ltd, Sizwe Medical Fund, Topmed Medical Scheme.
[30]
The heading of the forms signed by representatives of abovementioned
medical aid schemes and attached to the supplementary
affidavit
reads: "Membership Meeting 26th November 2010 I support the BHF
seeking a declaratory order around regulation 8."
[31]
Furthermore the applicants maintain that as the first applicant is
such a prominent role player due to being on the first respondent's
distribution list to receive circulars and as the first applicant was
allowed to participate in the Prescribed Minimum Benefit
task team
that these facts confer locus standi the first applicant to launch
this application on behalf of the medical aid schemes.
[32]
The main complaint by the first respondent, supported by the twelve
other respondents, is that the first applicant has no direct
and
substantial interest as the judgment as such will not have an impact
on the first applicant. Although the first applicant contends
that it
represents 75 registered medical aid schemes, and therefore has locus
standi, the court must find that this cannot be true.
The first
applicant saw fit to have the second applicant, who is a registered
medical scheme, joined. Furthermore only 15 registered
medical
schemes, in the founding and supplementary founding affidavit,
confirm that a declaratory order must be sought.
[33]
Had the first applicant been so sure that it is representing all 73
medical aid schemes, then it begs the question as to why
the second
applicant had to be joined and why confirmation of the 15 members had
been sought. If the first applicant represented
all 75 members as
submitted, it would not have been necessary to join the second
applicant or to obtain affidavits and signatures
of 15 members of the
first applicant. The only conclusion the court can draw from these
facts is that the first applicant does
not represent 75 members, but
only the 15 members mentioned in the papers.
[34]
The first applicant further conceded that it does not represent all
the medical aid schemes and medical aid administrators
in South
Africa. The first applicant's application is lacking in allegations
and proof that it has any mandate to litigate on behalf
of its'
members. The affidavits and annexures do not grant the first
applicant the mandate to litigate on their behalf. The affidavit
attached to the supplementary founding affidavit by Mr. Andre Meyer
on behalf of Medscheme is an example of the supporting affidavits
which sets out:
"...
it was considered appropriate that the Applicant, as a representative
organisation acting on behalf of the majority of
Medical Schemes of,
inter alia, South Africa, should seek the relief sought in the
application as the objective of BHF is to engage
with Government and
other organizations to influence policy, where necessary, on behalf
of the entire Medical Scheme's industry."
(Court's emphasis)
[35]
in Henri Viljoen (Pty) Ltd v Awerbuch Brothers
1953 (2) SA 151
(O)
the
Bench
came to the conclusion that "a direct and substantial interest"
is:
"...
an interest in the right which is the subject-matter of the
litigation and... an interest not merely a financial interest
which
is only an indirect interest in such litigation." (Court's
emphasis)
[36]
In Jacobs en 'n Ander v Waks en Andere
[1991] ZASCA 152
;
1992 (1) SA 521
(A) Botha AR
found at p 534:
"In
die omstandighede van die huidige saak is dit vera! die vereiste van
'n direkte belang wat op die voorgrond staan. Wat
dit betref, is die
beoordeling van die vraag of 'n litigant se belang by die geding
kwalifiseer as 'n direkte belang, dan wel of
dit te ver verwyderd is,
altyd afhanklik van die besondere feite van elke afsonderlike geval,
en geen vaste of algemeen geldende
reels kan neergele word vir die
beantwoording van die vraag nie (sien bv Dalrymple and Others v
Colonial Treasurer
1910 TS 372
per Wessels R op 390 infine, en vgl
Director of Education, Transvaal v McCagie and Others
1918 AD 616
per
Juta Wn AR op 627). Vorige beslissings kan behulpsame algemene
riglyne vir bepaalde soort gevalle aandui, maar meestal het
dit
weinig nut om die besondere feite van een geval te vergelyk met die
van 'n ander." (Court's emphasis)
[37]
In United Watch & Diamond Co v Disa Hotels
1972 (4) SA 409
(C)
Corbett J held at p 415:
"...
it is generally accepted that what is required is a legal interest in
the subject matter of the action which could be
prejudicially
affected by the judgment of the Court.' (Court's emphasis)
[38]
In PE Bosman Transport Works Committee & Others v Piet Bosman
Transport (Pty) Ltd
1980 (4) SA 801
(TPD) Eloff J found at 804 B - C:
"It
is well settled that, in order to justify its participation in a suit
such as the present, a party such as second applicant
has to show
that it has a direct and substantial interest in the subject-matter
and outcome of the application." (Court's
emphasis)
[39]
Corbett J in United Watch & Diamond Co (Pty) Ltd and Others v
Disa Hotels Ltd and Another
1972 (4) SA 409
(C) quoted with approval
the view expressed in Henri Viljoen (Pty) Ltd v Awerbuch Brothers
1953 (2) SA 151(O)
and then found at 415 H:
"This
view of what constitutes a direct and substantial interest has been
referred to and adopted in a number of subsequent
decisions,
including two in this Division... and it is generally accepted that
what is required is a legal interest in the subject-matter
of the
action which could be prejudicially affected by the judgment of the
Court (See Henri Viljoen's case supra at 167).""
(Court's
emphasis)
[40]
The Act and Regulations refer to medical schemes in South Africa. It
is clear that should the court decide the merits of the
application
and give a judgment it will impact on all medical schemes and not
only have an impact on the second applicant and the
fifteen medical
schemes who purportedly support the application.
[41]
The averments by the representatives of the medical schemes that the
objective is to engage Government and other organizations
to
influence policy cannot confer locus standi on the first applicant
and does not sustain this application.
[42]
In Milani & Another v South African Medical & Dental Council
and Another
1990 (1) SA 899
(T) the court endorsed the decision of
the Henry Viljoen case (supra) and Eloff DJP found at 902H - 903A;
"The
applicants have to show a legal interest in the interpretation of the
rule and its validity. Milani does not say, nor
can he, that rule 9
impinges on his right to carry out his profession as he thinks fit.
His right to associate with registered
medical practitioners as he
wishes is beyond question, and no one doubts the right of the board
to request a registered medical
practitioner to assume a teaching
post in a Technicon, training persons for qualification in associated
professions. The only persons
who may, if these rights are exercised,
fall foul of rule 9, are the medical practitioners involved. The
rights which Milani and
the board therefore wish the Court to enquire
into are not their rights, but those of registered medical
practitioners. In a sense
the present case is a representative suit
AH that the applicants can really complain of is the practical
consequences of a disciplinary
regime which has no bearing on them
but indirectly affects them." (Courts emphasis)
[43]
The present case can be classified as a representative case, but not
all the medical schemes are joined and it has not been
launched as a
representative case. Therefore the necessity for the first applicant
to join the second applicant to cure the locus
standi issue. In the
Milani case the court found:
"The
fact that the applicants are in a practical sense affected by these
rules does not give them adequate locus standi."
[44]
As far back as SA Mutual Life Assurance Society v Durban City Council
1948(1) SA 1 (N) it was already decided that a declarator
cannot
affect the rights of persons who had not been joined.
[45]
It is clear that even the medical schemes regard the first applicant
as a body which purpose is "to engage with Government
and other
organisations to influence policy, where necessary." That can
never give the first applicant locus standi as it
is clear it is not
the purpose of the first applicant. It has to engage with Government
which means engagement with the second
respondent who mandated the
Regulations. The first applicant had a meeting with the second
respondent on 18 October 2010 to try
and resolve the interpretation
of regulation 8, which has not been done up to now. No explanation is
given as to why this course
of action was not pursued.
[46]
It is not enough for the first applicant to allege that it provides
guidance to its members or that the first respondent regards
the
first applicant as a stakeholder and prominent role player by
involving the first applicant in certain of its activities.
[47]
The Act and Regulations have a binding force on the medical schemes
and not on the first applicant. The first applicant will
not be
affected in any way by a declaratory order by this court, but may
only have an indirect interest in the declaratory order
as to the
effect of the interpretation of regulation 8(1) will have on its'
members.
[48]
The first applicant argues that the jurisdictional requirements is
that the applicant must be an interested person as found
in the
Milani case (supra). In Asmal v Asmal & Others
1991 (4) SA 262
NPD at 265 G-l Hugo J held: "A declarator requires some
legitimate interest in the subject-matter. Section 19(1)(a)(iii) of
the Supreme Court Act 59 of 1959 provides that a declarator may be
sought in respect of any existing, future or contingent right.
These
rights must, however, it seems to me, attach to the applicant
(plaintiff) and not be a declaration of someone else's rights,
in
this case the executors'." (Court's emphasis)
[49]
The first applicant did not allege that it has a legal interest in
the subject matter of the present application which will
be
prejudicially affected by a judgment of this court. The court cannot
find that the first applicant as representative of the
medical
schemes will be prejudicially affected by a judgment, but its'
members may be prejudicially affected and should have instituted
the
application for a declaratory order.
Non
- compliance with section 19(1)(a)(iii) of the Supreme Court Act, 59
of 1959:
[50]
This section sets out:
"(1)
(a) A provincial or local division shall have jurisdiction over all
persons residing or being in and in relation to all
causes arising
and all offences triable within its area of jurisdiction and all
other matters of which it may according to law
take cognizance, and
shall, subject to the provisions of subsection (2), in addition to
any powers or jurisdiction which may be
vested in it by law, have
power-
(iii)
in its discretion, and at the instance of any interested person, to
enquire into and determine any existing, future or contingent
right
or obligation, notwithstanding that such person cannot claim any
relief consequential upon determination." (Court's
emphasis)
[51]
In Roodepoort-Maraisburg Town Council v Eastern Properties (Prop) Ltd
1933 AD 87
at 101 Wessels CJ held:
"[B]y
our law any person can bring an action to vindicate a right which he
possesses (interesse) whatever that right may be
and whether he
suffers special damage or not, provided he can show that he has a
direct interest in the matter and not merely the
interest which all
citizens have." (Court's emphasis)
[52]
The applicants have to demonstrate that they have an interest in
existing, future or contingent rights. In Lawson & Kirk
(Pty) Ltd
v Phil Morkel Ltd
1953 (3) SA 324
AD Schreiner JA decided at p 332
D-E:
"And
unless there is a concrete dispute between parties who are before the
Court, so that the declaratory order will provide
a rule binding upon
them, such an order cannot properly be granted under
the
section" (Court's emphasis)
[53]
The first respondent alleges that the applicants are requesting the
court to provide guidance as to the correct interpretation
of
Regulation 8(1). I must agree with the respondents that a court does
not give legal advice. If the applicants seek a declaratory
order on
a question of law the party seeking the order must have a legal
interest which will be prejudicially affected by a declaratory
order
made in terms of section 19 (1)(a)(iii) of the Supreme Court Act.
[54]
In Transvaal Agricultural Union v Minister of Agriculture and Land
Affairs and Others
2004 (4) SA 397
LCC at par 8 Gildenhuys AJ held:
H[8]
In general, a declaratory order may be sought where there is a clear
dispute or uncertainty about the validity or the effect
of
administrative action. The power of this Court to grant declaratory
orders under the Restitution Act is subject to restrictions.
The
following are relevant to this case. First, the application must be
at the instance of a person who is 'interested' in the
question of
law which is at issue in the case. Secondly, all persons on whom the
order will have a binding effect must be cited.
Lastly, the Court
must, by exercising a discretion, be satisfied that it is desirable
to grant the order. The Court's discretion
on whether or not to grant
an order sets in only after the other requirements for such an order
have been met" (Courts emphasis)
and
at par 9:
[9]
An 'interested person' entitled to apply for a declaratory order is a
person who has a direct and real interest in the question
of law
enquired into. Corbett J (as he then was) stated in United Watch &
Diamond Co (Pty) Ltd and Others v Disa Hotels Ltd
and Another in
respect of a High Court's power to make a declaratory order:
'(l)t
is generally accepted that what is required is a legal interest in
the subject-matter of the action which could be prejudicially
affected by the judgment of the Court. . . .'
The
legal interest enquired into must attach to the applicant itself.
The
Court will not make a declaration of someone else's
interests."
(Court's emphasis)
[55]
According to the first applicant a dispute of long duration exists
between the first applicant and the first respondent, the
medical
schemes and administrators that should be resolved by a declarator by
the court. The Pearmain opinion cannot create a dispute
between the
first applicant, the medical schemes, the administrators and the
first respondent.
[56]
The first applicant interacted with the second respondent as to
obtain clarity as to what "payment in full" means,
but the
second respondent has not decided on the issue and now the first
applicant requests the court to decide the matter.
[57]
Dr Pearmain, who is employed by the first applicant, expressed an
opinion as to the meaning of "payment in full"
pertaining
to medical schemes, but that can never be seen to have created a
dispute. Her opinion was requested by her employer
and her opinion
could not create a dispute between the applicants and the
respondents.
[58]
The contradiction by the first applicant as to whether a real dispute
exists or not must be taken into consideration as well.
The first
applicant cannot have it both ways, either there is a real dispute or
no dispute exists.
[59]
The thirteenth respondent attacked the tocus standi of the first
applicant, arguing that the first applicant has an indirect
or
derivative interest in the application and not a direct legal
interest. The fact that some of the applicant's members may suffer
prejudice if payment is made in terms of Regulation 8, does not
accord the applicant a legal interest in this application.
[60]
If the court considers the wording of section 19(1)(a)(iii) of the
Supreme Court Act, 59 of 1959 the court has to find that
the first
applicant does not have a real interest in the outcome of this
application as no legal interest has been proved which
can
prejudicially affect the first applicant. It may affect the
registered medical schemes, but that does not confer a legal interest
on the first applicant representing only 15 of the medical aid
schemes and seven medical scheme administrators. This point in limine
must be upheld.
Section
38 of the Bill of Rights: [61] The applicants only placed reliance on
section 38 of the Bill of Rights of the Constitution
in their heads
of argument. No mention was made of the Constitution in any of the
voluminous papers filed by the applicants that
they will rely on the
first respondent breaching their constitutional rights according to
section 38 of the Constitution.
[62]
Section 38 of the Constitution provides: "38. Enforcement of
rights
Anyone
listed in this section has the right to approach a competent court,
alleging that a right in the Bill of Rights has been
infringed or
threatened, and the court may grant appropriate relief, including a
declaration of rights. The persons who may approach
a court are -
a.
anyone acting in their own interest:
b.
anyone acting on behalf of another person who cannot act in their own
name;
c.
anyone acting as a member of, or in the interest of, a group or
class of persons;
d.
anyone acting in the public interest; and
e.
an association acting in the interest of its members." (Court's
emphasis)
[63]
The first applicant failed to allege in the founding papers that an
infringement of a right in the Bill of Rights had taken
place and
even goes so far as to conclude
"...[e]ven
if it is advanced that there is currently no existing dispute between
[BHF] and the [Council] pertaining to the
interpretation of
Regulation 8(1), the members of [BHF] and the [Council] pertaining to
the interpretation of Regulation 8(1),
the members of [BHF] are
severely prejudiced by such interpretation as is given by the
[Council]..." (Court's emphasis)
It
is quite clear that the first applicant is uncertain whether there is
an existing dispute between the first applicant and the
first
respondent. Furthermore the first applicant is not requesting the
court to declare Regulation 8 (1) null and void. There
is thus no
constitutional challenge, but a request for the court to issue a
declaratory order as to the interpretation of the words
in Regulation
8(1).
[64]
The court was referred to Coetzee v Comitis and Others
2001 (1) SA
1254
CPD, as well as Beukes v Transitional Local Council and Another
1996 (3) SA 467
(W), but it is clear that these authorities refer to
Constitutional challenges which the applicant conceded is not the
case in
this application and the court cannot follow them in the
present circumstances.
[65]
Although the applicants did not rely on section 38 of the
Constitution in their founding papers, the court cannot ignore the
fact that the Constitution has had an impact on the position of locus
standi in common law.
[66]
In Ferreira v Levin (Supra) Chaskalson P found in regard to genuine
disputes in para 164:
"[164]
The objection to constitutional challenges brought by persons who
have only a hypothetical or academic interest in the
outcome of the
litigation is referred to in Zantsi v Council of State, Ciskei, and
Others. The principal reasons for this objection
are that in an
adversarial system decisions are best made when there is a genuine
dispute in which each party has an interest to
protect. There is
moreover the need to conserve scarce judicial resources and to apply
them to real and not hypothetical disputes.
The United States Courts
also have regard to 'the proper role of the Courts in a democratic
society' which is to settle concrete
disputes, and to the need to
prevent Courts from being drawn into unnecessary conflict with
co-ordinate branches of government"
(Court's emphasis)
[67]
In Ferreira v Levin NO
1996 (1) SA 984
CC O'Regan J explained in para
229:
"[229]
There can be little doubt that s 7(4) provides for a generous and
expanded approach to standing in the constitutional
context. The
categories of persons who are granted standing to seek relief are far
broader than our common law has ever permitted.
In this respect, I
agree with Chaskalson P (at paras [165]-[166]). This expanded
approach to standing is quite appropriate for
constitutional
litigation.
[68]
The first applicant concedes that it does not explicitly aver the
infringement of a right in the Bill of Rights. The declaration
by the
first applicant that it is a dispute in terms of section 34 of the
Bill of Rights is in contrast to the averment that "there
is
currently no existing dispute between BHF and the Council pertaining
to the interpretation of Regulation 8(1)" The applicants
do not
request the court to declare Regulation 8(1) null and void. The court
finds that section 38 of the Constitution is not applicable
and the
applicants cannot rely on it.
The
locus standi of the second applicant: [69] The fact that the second
applicant has been joined cannot confer locus standi on
the first
applicant.
[70]
The first applicant set out the legal position in its' heads of
argument:
"If
an applicant for certain relief has no locus standi to claim that
relief, then an application by a third party to intervene
as a
co-applicant cannot succeed because Rule 10(1) contemplates that
persons joined in an action should each have a claim and
that the
right to relief of the person proposing to join depends upon the
determination of substantially the same question of law
or fact
which, if separate actions were instituted would arise on each
action."
[71]
If the court finds the first applicant has no locus standi, then the
result is that the second applicant has no locus standi
and cannot
succeed in the application on its own, as none of the other medical
aid schemes or administrators have been joined.
[72]
The court finds that for the reasons set out above regarding the
three points in limine and the fact that the court finds section
38
of the Constitution not applicable that the first applicant and
therefore the second applicant does not have locus standi in
this
application.
[73]
An application to strike out certain paragraphs in the first
applicant's replying affidavit dated 4 April 2011. Due to the
court's
finding in regard to the three points in limine, it is not necessary
to deal with this application.
[74]
The same applies to the decision of Registrar of Medical Schemes and
Another v Suremed Medical (supra)
[75]
The court deems it unnecessary to decide whether this case is
relevant, having regard to the court's findings on locus standi.
Costs:
[76]
The application was initially before court on 1 December 2010 on a
semi-urgent basis. It was removed from the roll and costs
reserved by
agreement between the parties. The only parties not requesting costs
at this stage are the amicus curiae.
[77]
The rule is that costs should follow the result and I cannot find any
reason why it should not apply in this instance and why
the reserved
costs of 1 December 2010 should not form part of the costs order
granted in the present application.
[78]
The following order is made:
1.
The application is dismissed with costs;
2.
The applicant to pay:
2.1
The costs of the first respondent, including:
2.1.1
the costs of 1 December 2010;
2.1.2
the costs of two counsel;
2.2
The costs of the third, fourth and fifth respondents, including the
costs of two counsel including:
2.2.1
the costs of the application for leave to intervene and including the
costs of two counsel;
2.2.2
the costs of one counsel relating to the proceedings relating to part
A of the application;
2.3
The costs of the sixth respondent including:
2.3.1
the costs of 1 December 2010;
2.3.2
the costs of two counsel;
2.4
The costs of the seventh, eighth and ninth respondent:
2.4.1
the costs of 1 December 2010;
2.4.2
including the costs of two counsel;
2.5
The costs of the tenth, eleventh, twelfth respondents including:
2.5.1
the cost of two counsel and:
2.5.2
including the costs of the application to intervene and
2.5.3
including the costs of 1 December 2010;
2.6
The costs of the thirteenth respondent including the costs of
1
December 2010.
C
PRETORIUS
JUDGE
OF THE HIGH COURT
Case
number : 70018/2010
Date
of case : 22 September 2011
Counsel
for Applicant : Adv S Joubert SC
:
Adv I Ellis
Attorney
for Applicant : Friedland Hart Solomon & Nicolson
Counsel
for 1st Respondent : Adv MC Maritz SC
;
Adv AJ Lapan
Attorney
for 1st Respondent : VFV Mseleku
Counsel
for 3rd, 4th& 5th Respondent : Adv A Cockrell SC
:
Adv F Ismail
Attorney
for 3rd, 4th & 5th Respondent : Webber Wentzel
Counsel for 6th
Respondent : Adv G Budlender SC
:
Adv D Borgstrom
Attorney for 6th Respondent : Cliffe Dekker
Hofmeyr
Counsel
for 7th, 8th & 9th Respondent : Adv BE Leech SC
:
Adv K Pillay
Attorney
for 7th, 8th & 9th Respondent : Werksmans Counsel for 10th. 11th
& 12th Respondent: Adv R Michau SC
:
Adv I Joubert
Attorney
for 10th, 11th & 12th Respondent: Dr Samantha Gregory
Counsel
for 13th Respondent : Adv TP Kruger
Attorney
for 13th Respondent : Macrobert
Counsel
for Amicus Curiae : Adv AC Botha
Attorney
for Amicus Curiae : Erasmus de Klerk