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[2011] ZASCA 91
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South African Police Service Medical Scheme ( (2011 (4) SA 456 (SCA)) [2011] ZASCA 91; 542/10 (31 May 2011)
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THE
SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Case
No:
542/10
In
the matter between:
THE
SOUTH AFRICAN POLICE SERVICE
MEDICAL
SCHEME ('POLMED')
.........................................................
First
Appellant
QUALSA
HEALTHCARE (PTY) LTD
…...................................
Second
Appellant
and
ANDILE
ROBERT LAMANA
…...............................................
First
Respondent
NZWANA
VICTOR MZILI
…...............................................
Second
Respondent
TANDIE
COLEMAN MALONI
….............................................
Third
Respondent
Neutral
citation:
The
South African Police Service Medical Scheme ('Polmed') v Lamana
(542/10)
[2011] ZASCA 91
(31 May
2011).
Coram:
CLOETE,
PONNAN, CACHALIA and MALAN JJA and MEER AJA
Heard:
19 MAY 2011
Delivered:
31 MAY 2011
Summary:
Section
21A of the Supreme Court Act 59 of 1959: if facts relevant to the
exercise of a court of appeal's discretion under s 21A of
the Supreme
Court Act do not appear from the record, they should be placed before
the court by way of affidavit by the party seeking
to rely upon them
and in sufficient time to enable the other party to deal therewith.
The same applies in an application for leave
to appeal.
______________________________________________________________
ORDER
______________________________________________________________
On appeal from:
North
Gauteng High Court (Pretoria) (Seriti J sitting as
court of first instance):
The
appeal is dismissed with costs, including the costs of two counsel,
which are to be paid by the appellants jointly and severally.
_____________________________________________________________
JUDGMENT
______________________________________________________________
CLOETE JA (PONNAN, CACHALIA and MALAN JJA and MEER AJA
concurring):
[1] The respondents are all serving members of the South
African Police Services. They are also members of the first
appellant, the
South African Police Service Medical Scheme ('Polmed')
which, as its name suggests, is a medical aid scheme (duly registered
as such
in terms of the
Medical Schemes Act 131 of 1998
). The first
appellant is administered by the second appellant, Qualsa Healthcare
(Pty) Ltd ('Qualsa'). The respondents, as applicants,
instituted
motion proceedings in the North Gauteng High Court, Pretoria, against
Polmed and Qualsa, the purpose of which was to compel
the latter to
pay benefits to which the respondents were entitled to receive from
Polmed, into a particular bank account nominated
by them.
[2]
For a number of years the respondents and their dependants have been
patients of Dr Gualam Muhammed Peer, who practises as a general
practitioner in King William's Town. The respondents never paid Dr
Peer directly for his services: Qualsa did so on behalf of Polmed,
until October 2008 when Polmed's attorney informed the respondents'
attorney that 'payment will only be effected into members' personal
banking account[s], and not that of a third party', and Qualsa
informed Dr Peer that 'you are hereby advised that direct payment
of
your claims will cease and indirect payment will be implemented
effective from 11 October 2008'.
[3] In December 2008, as a result of the communications
just quoted, each respondent signed three documents. The first was a
'Service
Agreement' with Dr Peer in terms of which he undertook to
provide healthcare services to the respondent concerned and his
dependants,
and the respondent undertook to instruct Polmed to pay
amounts due to him in respect of such services into the bank account
of the
Sheh-Rahim Trust. The second was a letter addressed to Polmed
giving that instruction. The third was an 'Agency Agreement' entered
into between each respondent and the Trust, represented by Dr Peer,
in terms of which the respondent concerned nominated the Trust
to
receive payments due to him by Polmed in respect of services rendered
by Dr Peer and to pay them over to the latter. Polmed and
Qualsa
refused to make any payment into the account of the Trust.
[4] The question before the court a quo was whether
Polmed and Qualsa were entitled to act as they did. The answer to
this question
depended upon an interpretation of the applicable
Polmed rules which then provided:
'17.4 Notwithstanding the
provisions of this rule, the Scheme has the right to pay any benefit
directly to the member concerned.
17.5
Payment of amounts due to a member is made by means of a transfer to
an acceptable bank account as elected by the member. The
Board of
Trustees may in its discretion, approve that payments be made by
cheque.'
[5] Polmed and Qualsa contended inter alia that they
were entitled to refuse to make payments into the account of the
Trust as they
considered it not to be 'an acceptable bank account'.
The answering affidavit went on to explain that from information
gathered by
Polmed and Qualsa over the years, what they called 'the
most favoured practice' in defrauding Polmed is that an amount of
money is
paid by a medical practitioner to a member, and non-existent
treatment is then recorded and claimed by the practitioner, the claim
usually far exceeding the sum of money received by the member; but if
the incentive to the member is taken away, it is their experience
that the incidence of such malpractice is curbed substantially. It
was precisely for those reasons, said Polmed and Qualsa, that
they
decided that all medical claims by the respondents would be paid
directly to them.
[6] The court a quo, in its judgment delivered on 9
August 2009, rejected these submissions and found that the phrase 'an
acceptable
bank account' in terms of
rule 17.5
meant 'an account
which is [a] generally acceptable account'. Leave to appeal was
refused.
[7] Leave to appeal was subsequently sought from this
court. The notice of motion was dated 13 May 2010 and the founding
affidavit
was deposed to three days earlier, on 10 May. The
respondents delivered an answering affidavit opposing the application
a month later,
on 10 June. No replying affidavit was delivered. Leave
was granted on 13 July 2010, obviously on the basis that there were
prospects
of success on appeal. And indeed there were. The finding of
the court a quo cannot be supported. The interpretation given to
rule
17.5
raises more questions than it answers: By what criteria must the
acceptability of the account be judged? Is the test subjective or
objective? Having heard argument on the merits of the appeal, it
seems to me that the correct interpretation of the word 'acceptable'
is 'acceptable to Polmed' and that, as Polmed did not find the
Trust's account acceptable for good and sufficient reasons, the
application
should have been dismissed. But it is not necessary, for
the reasons which follow, to express a final view in this regard.
[8] The judges considering the application for leave to
appeal were not furnished with one vital fact: On 11 May 2010, before
the
application was lodged with the Registrar of this court on 21 May
2010, and more than two months before leave was granted, amendments
to the rules had been registered by the Registrar of Medical Schemes.
The relevant rules now read:
'17.5 Notwithstanding the
provisions of this rule, the Scheme has the right to pay any benefit
directly to the member concerned.
17.6
Payment of amounts due to a member is made by means of payment into
the personal bank account of the member.'
The amendments render the issues between the parties
academic.
[9] We were told from the bar by counsel representing
Polmed and Qualsa that it takes about a week for notification of the
registration
of an amendment to reach his clients. That is no excuse
for not informing the court of the registration of the amendments
once it
had taken place or, for that matter, that registration was
pending when the application was lodged. Had the judges considering
the
application for leave to appeal known of the registration of the
amendments, they could well have refused leave in terms of s 21A
of
the Supreme Court Act 59 of 1959, which provides:
'(1) When at the hearing of any
civil appeal to the Appellate Division or any Provincial or Local
Division of the Supreme Court the
issues are of such a nature that
the judgment or order sought will have no practical effect or result,
the appeal may be dismissed
on this ground alone.
.
. .
(3)
Save under exceptional circumstances, the question whether the
judgment or order would have no practical effect or result, is
to be
determined without reference to consideration of costs.'
The same questions arise when leave
to appeal is sought from this court (because of the provisions of s
21A(4)) and a lower court
(see
Logistic
Technologies (Pty) Ltd v Coetzee & others
1998
(3) SA 1071
(W)). There was nothing in the application to indicate
that the order sought on appeal would have some practical effect or
result
despite the amendment to the rules, or that there were
exceptional circumstances as contemplated in subsec (3). Nor is there
anything
of that nature properly before us now.
[10] We were informed by counsel representing Polmed and
Qualsa that the amendments were brought to his attention the day
before the
appeal was set down for hearing (which was a public
holiday). This court only came to know of the amendments on the day
of the hearing
─ over a year after they had been registered.
Had we been informed earlier, we might well have invoked the
provisions of s
21A(2), which provides:
'(a)
If at any time prior to the hearing of an appeal the Chief Justice or
the Judge President, as the case may be, is
prima
facie
of
the view that it would be appropriate to dismiss the appeal on the
grounds set out in subsection (1), he or she shall call for
written
representations from the respective parties as to why the appeal
should not be so dismissed.
(b) Upon receipt of the written
representations or, failing which, at the expiry of the time
determined for their lodging, the matter
shall be referred by the
Chief Justice or by the Judge President, as the case may be, to three
judges of the Division concerned for
their consideration.
(c) The judges considering the
matter may order that the question whether the appeal should be
dismissed on the grounds set out in
subsection (1) be argued before
them at a place and time appointed, and may, whether or not they have
so ordered ─
(i) order that the appeal be
dismissed, with or without an order as to the costs incurred in any
of the courts below or in respect
of the costs of appeal, including
the costs in respect of the preparation and lodging of the written
representations; or
(ii) order that the appeal
proceed in the ordinary course.'
We would certainly have asked why the appeal was
proceeding when the issues between the parties had become moot. We
nevertheless heard
argument both on the proper course to be adopted
in the circumstances and on the merits of the appeal.
[11] Counsel on both sides were agreed that there were
no live issues remaining between the parties. Counsel representing
the respondents
submitted that for that reason the appeal should not
be entertained and asked that Polmed and Qualsa be ordered to pay the
costs
of the application for leave to appeal and of the appeal. (I
pause to note that the costs of the application were made costs in
the
appeal, with the consequence that an order in respect of the
latter would automatically include the former.) Counsel representing
Polmed and Qualsa submitted on the other hand that the court should
decide the appeal, and put forward two submissions in this regard.
[12] The first submission was that should the
respondents challenge the validity of the amendment to the rules and
should the challenge
be successful, a decision on the merits of the
appeal would not be academic. The submission rests on pure
speculation and does not
provide a basis for the discretion vested in
this court in terms of s 21A to be exercised in favour of Polmed and
Qualsa.
[13] The second submission, made in
response to a question from the bench, was based on an instruction
which counsel took in court
that issues similar to those raised in
this appeal frequently arise before the Council for Medical Schemes
and that a decision on
the merits of the application would
accordingly benefit other medical aid schemes, particularly one he
mentioned by name. I shall
assume, without deciding, that the
practical effect or result referred to in s 21A(1) is not restricted
to parties inter se and that
the expression is wide enough to include
a practical effect or result in some other respect (cf
Radio
Pretoria v Chairman, Independent Communications Authority of South
Africa & another
2005
(1) SA 47
(SCA) para 40). But even if that is a correct
interpretation of the section, Polmed and Qualsa have not laid a
proper factual foundation
for such a finding. It would be quite
improper for this court to act upon information tendered informally
from the bar, which should
have been contained in an affidavit when
leave to appeal was sought, which is still not in that form and where
the respondents have
not had an opportunity of challenging it.
Furthermore, the court would have to make a finding as to the meaning
of s 21A(1), an issue
that was not argued before us. If facts
relevant to the exercise of a court of appeal's discretion under s
21A(1) do not appear from
the record, they should be placed before
the court by way of affidavit by the party seeking to rely upon them
and in sufficient time
to enable the other party to deal therewith.
The same applies to an application for leave to appeal in whatever
court it is brought.
[14] In the circumstances, I consider that the court
should exercise the discretion vested in it by s 21A(1) in favour of
dismissing
the appeal. The following order is made:
The
appeal is dismissed with costs, including the costs of two counsel,
which are to be paid by the appellants jointly and severally.
_______________
T
D CLOETE
JUDGE
OF APPEAL
APPEARANCES:
APPELLANTS: D E van Loggerenberg SC
(with him S S Maakane)
Instructed by Maenetja Attorneys, Pretoria
Naudés
Bloemfontein
RESPONDENTS: N Singh SC (with him G J Gajjar)
Instructed by Smith Tabata Inc,
King
William's Town
Webbers, Bloemfontein