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[2021] ZAGPPHC 68
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Cotty and Others v Registrar of the Council for Medical Schemes (75753/2019) [2021] ZAGPPHC 68; [2021] 2 All SA 793 (GP); 2021 (4) SA 466 (GP) (19 February 2021)
REPUBLIC OF SOUTH AFRICA
IN THE HIGH COURT OF
SOUTH AFRICA
GAUTENG DIVISION,
PRETORIA
(1)
REPORTABLE:
YES
(2)
OF
INTEREST TO OTHER JUDGES: YES
(3)
REVISED.
Case
No: 75753/2019
In the matter between:
COTTY, BRUCE
ANDREW
First Applicant
FERGUSON, WILLIAM
STORM
Second Applicant
RODINIS,
MOIRA
Third Applicant
AFONSO,
LUBELIA
Fourth Applicant
and
REGISTRAR OF THE COUNCIL
FOR
MEDICAL
SCHEMES
First Respondent
COUNCIL FOR
MEDICAL
SCHEMES
Second Respondent
DISCOVERY
HEALTH MEDICAL SCHEME
Third Respondent
MEDSHIELD
MEDICAL
SCHEME
Fourth Respondent
This
judgment was handed down electronically by circulation to the
parties’ legal representatives by email. The date and time
for
hand-down is deemed to be
14h00
on 19 February 2021
JUDGMENT
INGRID OPPERMAN J
Introduction
[1]
The first to third applicants applied
separately and individually to the third respondent (‘
Discovery
’)
for funding for the treatment of certain conditions and the fourth
applicant had applied to the fourth respondent (‘
Medshield
’).
Discovery and Medshield (collectively referred to as ‘
the
Medical Schemes’
) refused to
approve the funding which refusals were raised with the Registrar
appointed in terms of the
Medical Schemes Act 131 of 1998
, as
amended (‘
the Act’
). The Registrar dismissed the
complaints whereafter the four applicants appealed against such
dismissals to the Appeal Committee
(‘
Appeal Committee’
)
of the Council for Medical Schemes (‘
the Council’
)
in terms of
section 48
of the Act.
The Appeal
Committee ruled in favour of the applicants, whereafter Discovery and
Medshield invoked
section 50
of the Act and appealed against such
rulings to the Appeal Board of the Council.
[2]
Pursuant to the filing of their appeals in terms of
section 50
of the
Act, the Medical Schemes took the view that the decisions of the
Appeal Committee had been suspended by the appeals and
accordingly
did not comply with the rulings made by the Appeal Committee.
[3]
The applicants contended that the filing of an appeal in terms of
section 50
of the Act did not suspend the decisions of the Appeal
Committee. They contended that unlike
section 48(2)
and
section 49(2)
of the Act,
section 50
of the Act does not have a built-in mechanism
in terms of which filed appeals suspend the operation and execution
of rulings or
decisions appealed against.
[4]
It is common cause between the parties that what is determinative of
the
declaratory relief sought by the applicants is whether the
lodging of an appeal in terms of
section 50(3)
of the Act suspends
the decision which is the subject of that appeal, pending a decision
by the Appeals Board.
It was also common cause
that
if the applicants fail in their application for
declaratory relief, it would follow that the ancillary relief should
fail as the
sole basis advanced for the review sought is that there
was a material error of law, premised on the applicants’
interpretation
of the Act.
The arguments in a
nutshell
[5]
The applicants argue that notwithstanding the appeal proceedings
brought
in terms of
section 50(3)
of the Act, the decisions which are
the subject of such appeals must be immediately implemented. Should
the appeal be upheld, the
implementation of the decision concerned
can thereafter be reversed as the medical scheme may then “recoup”
the amount
wrongly paid by the medical scheme from the member
concerned or the supplier of health services. There would be no
disruption to
medical schemes by the implementation of such decisions
pending appeal, so the argument goes, as should a scheme so wish, the
scheme
may apply for an
interim
interdict to stay
implementation of the decision pending the Appeal Board decision.
[6]
The Medical Schemes (and the Regulator) contend that their
interpretation
is consistent with the common law principle that a
decision is suspended pending an appeal and that the application of
that principle
is entirely consistent with the applicable provisions
of the Act; the complaints and appeal process contemplated by Chapter
10
of the Act; the role and powers of the Council and the Appeal
Board; and the structure of the Act. Significantly, they point out,
the Act reserves the power to the Appeal Board itself to order that
the decision concerned be given effect to.
[1]
In contrast, they point out, the Registrar of Medical Schemes (‘
the
Registrar
’) and the Council have no such power.
[2]
Immediate implementation of decisions which are subject to appeal and
have yet to be finally determined in terms of the Act would,
they
contend, denude the Appeal Board of its power to determine whether a
decision be given effect to. The result of a finding
that a decision
by the Council in terms of
section 48(8)
must be implemented
immediately, and despite any pending appeal, is that by the time the
Appeal Board makes its decision, it would
find itself only able to
make a finding that the decision concerned ought not to have been
given effect to. The Appeal Board has
no such power. Nor does the
Appeal Board have any power to order the correction of the improper
implementation of such decision.
Statutory
interpretation
[7]
As all agree, the relief sought turns on the correct interpretation,
effect
and application of
section 50
of the Act.
[8]
The
Constitutional
Court
summarised the correct approach to statutory interpretation in the
following terms:
“
It
is well established that statutes must be interpreted with due regard
to their purpose and within their context. …Furthermore,
legislation must be understood holistically and, it goes without
saying, interpreted within the relevant framework of constitutional
rights and norms. However, that does not mean that ordinary
meaning and clear language may be discarded, for interpretation
is
not divination and courts must respect the separation of powers when
construing Acts of Parliament.”
[3]
[9]
The Supreme Court of Appeal also set out in definitive terms the
correct
approach to interpretation:
“
Interpretation
is the process of attributing meaning to the words used in a
document, be it legislation, some other statutory instrument,
or
contract, having regard to the context provided by reading the
particular provision or provisions in the light of the document
as a
whole and the circumstances attendant upon its coming into existence.
Whatever the nature of the document, consideration must
be given to
the language used in the light of the ordinary rules of grammar and
syntax; the context in which the provision appears;
the apparent
purpose to which it is directed and the material known to those
responsible for its production. Where more than
one meaning is
possible each possibility must be weighed in the light of all these
factors. The process is objective, not subjective.
A
sensible meaning is to be preferred to one that leads to insensible
or unbusinesslike results or undermines the apparent purpose
of the
document.
Judges must be alert to, and guard against, the temptation to
substitute what they regard as reasonable, sensible or businesslike
for the words actually used. To do so in regard to a statute or
statutory instrument is to cross the divide between interpretation
and legislation; in a contractual context it is to make a contract
for the parties other than the one they in fact made.
The
‘inevitable point of departure is the language of the provision
itself’, read in context and having regard to the
purpose of
the provision and the background to the preparation and production of
the document.
”
[4]
(own emphasis added)
[10]
Although the starting point remains the words of the document, the
process is a unitary
exercise:
“
Whilst
the starting point remains the words of the document, which are the
only relevant medium through which the parties have expressed
their
contractual intentions, the process of interpretation does not stop
at a perceived literal meaning of those words,
but
considers them in the light of all relevant and admissible context,
including the circumstances in which the document came into
being
.
The former distinction between permissible background and surrounding
circumstances, never very clear, has fallen away.
Interpretation is
no longer a process that occurs in stages but is essentially one
unitary exercise.”
[5]
(own emphasis
added)
The
Medical Schemes Act
[11
]
The long title of the Act provides that the purpose of the Act
is:
“
To
consolidate the laws relating to registered medical schemes; to
provide for the establishment of the Council for Medical Schemes
as a
juristic person; to provide for the appointment of the Registrar of
Medical Schemes; to make provision for the registration
and control
of certain activities of medical schemes; to protect the interests of
members of medical schemes; to provide for measures
for the
co-ordination of medical schemes; and to provide for incidental
matters.”
[12]
Chapter 1 and 2 of the Act provide for definitions, and the
application of the Act, respectively.
[13]
Chapter 3 of the Act provides for the establishment and functions of
the Council for Medical
Schemes. The establishment of the Council,
which is a juristic person, is provided for by
section 3
; the
functions of the Council are set out in
section 7
;
[6]
and its powers in
section 8.
[7]
Section 18
of the Act provides for the appointment of the Registrar
who “
shall be the executive officer of the Council and shall
manage the affairs of the Council”
[8]
and “
shall act in accordance with the provisions of this Act
and the policy and directions of the Council
”
[9]
[14]
Chapters 4 and 5 provide for medical schemes themselves and the rules
of medical schemes
respectively. In terms of
section 26(11)
a medical
scheme may only carry on the business of a medical scheme.
[10]
Importantly, a medical scheme does not operate for profit.
[11]
As the Constitutional Court has put it:
“…
a scheme must survive on what it
gets in. And the statute requires that it balances its books
while doing so. It demands
that schemes keep afloat in a
fraught, competitive insurance, reinsurance and healthcare
market.”
[12]
[15]
It follows that the higher the administrative costs and disbursements
paid by the medical
scheme, the higher the premiums which members of
the medical scheme must contribute. As this Court has put it:
“…
A
medical scheme is at bottom simply a mechanism whereby the
contributions of members are gathered in a fund and then paid out to
finance medical treatments for those same members and, of course, the
administration of the medical scheme. All the money in a
medical
scheme has as its source the contributions of those members. …”
[13]
[16]
Accordingly, it is incorrect to suggest that the promotion of the
interests of a particular
member at the cost of a medical scheme
promotes the objectives of the Act and access to healthcare. Medical
Schemes are the mechanism
used by the Act to increase access to
healthcare by the members of the scheme. Costs incurred by the
medical scheme result in cost
to the medical scheme’s members.
[17]
A medical scheme is subject to “
rigorous statutory and
institutional control
”.
[14]
The rules of the scheme must be approved by the Registrar for the
purposes of registration, and are binding on both the medical
scheme
and its members.
[15]
Section 26(4)
specifically provides that a medical scheme may
not make a payment other than (a) payments by a medical scheme of any
benefit,
payable under the rules of a medical scheme; (b) costs
incurred by the medical scheme in the carrying on of the business as
a medical
scheme; or (c) amounts invested by the board of trustees in
accordance with the applicable sections of the Act.
[18]
Where a member is not entitled to payment in terms of its rules, the
medical scheme is
precluded by the Act from effecting payment to that
member. That remains so notwithstanding a decision by the Council in
terms
of
section 48(8).
It is only following an order by the Appeal
Board in terms of
section 50(16)(b)
that the decision be implemented,
that the medical scheme may give effect to such decision.
[19]
In terms of
section 27(1)
of the Act the Registrar may, with the
concurrence of the Council, after investigation and after having
afforded the medical scheme,
or its legal representative, an
opportunity of being heard, cancel the registration of a medical
scheme if, amongst other listed
transgressions, the medical scheme,
after written notice from the Registrar, persists in violating any
provision of the Act.
[20]
Chapters 6, 7, 8 and 9 of the Act provide for Benefit Options;
Financial Matters; Documents;
and Powers of the Registrar.
[21]
Chapter 10 of the Act is headed “
Complaints and Appeals
”.
As the applicants put it, with reference to DL Pearmain:
“
The
overall purpose of Chapter 10 is to provide, inter alia, medical
schemes and their members with a dispute resolution platform
that is
quick, cost-effective and efficient
.
”
[16]
[22]
Section 47
provides for complaints to the Registrar;
section 48
for
appeals against decisions relating to the settlement of a complaint
or dispute to the Council; and
section 49
for appeals against
decisions by the Registrar to the Council.
[23]
Section 50
of the Act establishes and sets out the powers of the
Appeal Board.
[24]
In terms of
section 50(3)
any person aggrieved by a decision of
either the Registrar acting with the concurrence of the Council or by
a decision of the Council
may within 60 days of such decision and
upon payment of a prescribed fee, “
appeal against such
decision to the Appeal Board
”.
[25]
For the purposes of these proceedings the dispute resolution process
is illustrated, for
example, by Mr Cotty’s complaint
[17]
.
In this regard, Mr Cotty applied to Discovery for funding of a
Xen-stent treatment. Discovery declined the funding. Mr Cotty
complained to the Registrar in terms of
section 47
of the Act. Mr
Cotty sought an order from the Registrar that Discovery be ordered to
pay, or co-pay for the Xen stent. The
Registrar found in favour
of Discovery and held that it was not required to pay for the
Xen-stent. Mr Cotty appealed against the
Registrar’s decision
to the Council in terms of
section 48
of the Act.
[18]
The Appeals Committee upheld Mr Cotty’s appeal and ordered
that Discovery fund the Xen-stent treatment within fourteen
days of
the Appeals Committee ruling. Discovery lodged an appeal in terms of
section 50
against the Council’s section 48 decision.
[26] The following should be
noted regarding
section 50:
Section 50(1)
of the Act provides for the
appointment of the Appeal Board by the Minister of Health. The
chairperson must be appointed on account
of his or her knowledge of
the law, and the two other members of the Appeal Board on account of
their knowledge of medical schemes.
Members hold office for three
years.
[19]
Unlike the Council, which has many other duties and also hears (i)
appeals relating to the settlement of a complaint or dispute
in terms
of
section 48
or (ii) appeals regarding decisions of the Registrar in
terms of
section 49
, the sole purpose of the Appeal Board is to hear
and determine appeals against any decision of the Registrar acting
with the concurrence
of the Council or any decision of the Council.
[27]
The Appeal Board has certain powers similar to those of a High Court,
such as to summon
witnesses and call for the production of books,
documents and objects [sections 50(9), (10) and (11)]. The evidence
and address
before the Appeal Board are held in public.
[20]
[28]
Section 50
provides for a wide administrative appeal.
[21]
The Appeal Board’s powers are not limited to review, and the
considerations which it may take into account are in fact wider
than
an appeal court in the High Court.
Section 50(15)
provides that the
parties are entitled to representation by a legal practitioner. A
decision by the Appeal Board in terms of
section 50(16)
is the
culmination of, and brings finality to, the internal dispute
resolution processes contemplated by the Act.
[29]
Section 50(16)
provides that the Appeal Board may, after hearing the
appeal:
“
(a)
confirm, set aside or vary the relevant decision; or
(b)
order that the decision be given effect to.
”
(own
emphasis provided)
[30]
The Council does not have any power equivalent to that of the Appeal
Board in terms of
section 50(16)(b)
to “
order that the
decision be given effect to
”.
[22]
[31]
The status of the Appeal Board is confirmed by
sections 50(21)
to
50
(23) and the criminal consequences which follow from interruption
of the proceedings; the obstruction of the Appeal Board in the
performance of its functions; failure to attend and give evidence if
summoned by the Appeal Board; or for giving false evidence.
[32]
The powers of the Appeal Board were considered by this Court in
Profmed Medical Scheme v Madumise NO and Another
[23]
.
In holding that the power of the Appeal Board to summon witnesses was
not limited to that of an appeal court in terms of section
22 of the
Supreme Court Act, Patel J held:
“
[23]
Further, the interpretation of the statute must be undertaken in
context. Section 48 deals with an appeal to the Council. This
includes an appeal from a hearing of the Disputes Committee. The
Council may for the purposes of an appeal request any person,
who in
its opinion may be able to give material information concerning the
subject of the appeal, to appear before it at a time
and place
specified in the written request and to be examined. It may
administer an oath and may call any person present at the
hearing of
the appeal as a witness and examine him/her.
However,
no powers of subpoena are given to the Council. This should be
contrasted to the powers given to the Appeal Board to summon
witnesses, with particular reference to service in the same manner as
a summons for the attendance of a witness at a criminal trial
in a
High Court (section 50(10)), the requirement that a witness shall, if
required to do so by the chairperson of the Appeal Board,
before
giving evidence take an oath (section 50(11)), and the payment of
witness fees to a person subpoenaed on the same basis
as a witness
summoned to give evidence at a criminal trial in a High Court
(section 50(12)).
[24]
Thus, in context it is envisaged that ultimately evidence can be
compelled under oath. However,
the
procedure to compel such evidence can only take place at the appeal
stage in terms of section 50, there being no other machinery
at the
Disputes Committee stage or the appeal to Council stage.
Therefore, the failure to call a witness at any of the other stages
in the process culminating in the appeal to the Appeal Board
does not
preclude the Appeal Board from summoning such witnesses to give
evidence. There is nothing to preclude the Appeal Board,
in the
process of its investigation, from recalling a witness who has
already given evidence during any of the prior stages in
the
process.
”
(own emphasis
added)
[33]
The judgment by Patel J confirms that the Appeal Board has more
extensive powers
vis a vis
appeal proceedings than the Council
and that the internal dispute resolution process contemplated by
Chapter 10 culminates in an
appeal to the Appeal Board.
[34]
Chapter 11 of the Act provides for judicial matters and includes
provisions regarding applications
to the High Court; judicial
management; winding up of a scheme; and compromise.
[35]
Chapter 12 is headed “
General
” and includes
general provisions on the governance of medical schemes. In this
regard, it is important to note that the business
of the medical
scheme must be managed by a board of trustees, fifty per cent of whom
must be elected from amongst members.
[24]
[36]
The duties of the trustees include ensuring that proper controls are
in place to protect
member funds
[25]
and ensuing that the rules, operation and administration of the
medical scheme comply with the provisions of the Act and all other
applicable laws.
[26]
[37]
The board of trustees must also take all reasonable steps to ensure
that the interests
of beneficiaries in terms of the rules of the
medical scheme and the provisions of the Act are protected at all
times, act with
due care, diligence, skill and good faith and act
with impartiality in respect of all beneficiaries.
[27]
Common law position
considered
[38]
In
Dhanabakium v
Subramanian and Another
[28]
the Court restated the legal position that:
“
It is
a sound rule to construe a statute in conformity with the common law
rather than against it, except where and so far as the
statute is
plainly intended to alter the common law.”
[29]
[39]
Section 50 of the Act does not expressly provide that the lodging of
an appeal in terms
of section 50(3) does, or does not, suspend the
decision which is the subject of the appeal.
[40]
In the case of court orders, the effect at common law of noting an
appeal is to suspend
the operation of the decision appealed against.
The issue in this case is whether the common law principle applies to
administrative
decisions. The respondents referred me to a host of
authorities to the effect that the common-law principle applicable to
the suspension
of court orders constitutes, at the very lowest, a
presumption in the case of administrative decisions and this
presumption in
the case of administrative decisions may be negatived
(or cemented) by the implications of the statute in question. The
applicants
argued that insofar as such judgments found the common law
as interpreted by the respondents, such judgments were clearly
wrong.
[30]
[41]
I turn then to consider the authorities.
[42]
In
Mpanza v Minister
of Native Affairs And Others,
[31]
the Court was faced with an administrative
decision in terms of which Mr Mpanza was ordered, not by a Court but
by an administrative
official, to leave his home in Orlando Township,
Johannesburg to go and live on a farm in Ixopo, Natal. When Mr Mpanza
did not
comply with the order, he was arrested. On the same day of
his arrest, a petition was filed asking the Court to prevent Mr
Mpanza’s
removal from Johannesburg until his appeal had been
heard. The Court granted the petition and agreed that Mr Mpanza’s
rights
could not be interfered with, as the appeal had not yet been
concluded.
[43]
The Court considered various translations of
Voet
’s
writings. But the effect of all the translations which the Court
considered are to the same effect, some of which are the
following:
‘
The
effect of an appeal is, that the judgment is suspended, and that all
things ought to be left in their previous condition, and
that in
accordance with the inscription of this title nothing should be
changed …
Nor does it
make any difference whether the appeal noted has been accepted or
not: for it has been received, there must be abstention
from taking
any steps because the appeal has been received; if it has not been
received, nevertheless there should be such abstention
lest any
prejudice should be caused whilst it is being deliberated whether or
not the appeal should be received
…
Nor does it make any difference
whether an appeal has already been lodged or whether the fatal time
of ten days for noting an appeal
has not yet passed, with a result
that it is still possible for an appeal to be made, although no
appeal has yet been made …
The same matter is dealt with in
the Hollandsche Consultatien, Part 3, No. 53, secs. 1 and 5. This
authority says that the noting
of an appeal has a suspensive as well
as a resolutive effect and that this rule applies equally to criminal
as well as to civil
matters. Sec. (5) provides that a Judge who puts
into effect a criminal sentence despite the pending appeal is
regarded as guilty
of public violence and is required to undergo the
same punishment. A very serious view was apparently taken of this
rule of the
common law.
Hunter’s
Roman Law, 2
nd
ed p. 1048, says: “Until the appeal is decided the rights of
the parties must not be changed …
”…
.
The
conclusion to which I have come is that when an appeal is noted the
operation of the administrative action described in sec.
5(3) is to
be suspended pending the decision of the case on appeal.’
[44]
In
R v Sithole
,
[32]
it was held that an
administrative order is inoperative until either there has been an
appeal, or the time for it has elapsed, or
in any event until
the administrative decision has been approved on appeal.
[45]
In
Sithole
the Court said the following:
[33]
“
I now
go back to the third proposition which deals with the situation that
arises when there has been a cancellation. I have already
indicated
that a person cannot be said to be an unauthorized person merely
because a cancellation order has been made under sec.13(1)
…
because
such an order is inoperative until either there has been an appeal or
the time for it has elapsed,
or
in any event until the order of cancellation has been approved by the
chief native commissioner… .
As I see the
scheme of this complicated and difficult legislation, once an inquiry
has been held under the provision of sec.13,
and a cancellation order
has been made, and approved by the chief native commissioner on
appeal or otherwise,
and
the period for the appeal has elapsed
,
then the person remaining in occupation commits an offence under sec.
24(1)(c)… .
”
(own emphasis
provided).
[46]
The
Sithole
judgment was followed by a full bench
[34]
in
R v
Ndedwa
,
where it was held that “
it cannot
be said that the decision in Sithole's case is clearly
wrong
.”
[35]
[47]
The decisions of the Courts in
Ndedwa
and
Sithole
were based on an interpretation of the legislative provisions
applicable in those cases. Both decisions, in effect, endorsed the
approach that it was undesirable for an official to execute a
decision before the expiry of the appeal period, to then stop such
action and undo what had been done as soon as an appeal is lodged or
an appeal is upheld by an appeal tribunal.
Ndedwa
is authority for the proposition that at common law, if a time within
which an appeal must be lodged is stipulated in the enacting
legislation, as is the case in section 50 of the Act, the legal force
of an administrative act will be suspended for that time
only if an
appeal has in fact been lodged. This common law rule, however, does
not apply if it is expressly excluded by the relevant
statute –
in that event, the statute usually empowers the administrator to
suspend the legal force of its own acts pending
the final
determination of an appeal.
[36]
[48]
In
Leburu En Andere v
Voorsitter, Nationale Vervoerkommissie
,
en Andere
,
[37]
the Court held that the mere noting of an appeal
against an act, instruction or decision of a local road
transportation board, which
amounts to an administrative decision or
action, did not automatically suspend such act, instruction or
decision or the operation
thereof. The Court noted that the
Legislature did not intend the common law rule of automatic
suspension to apply in the context
of the legislation in issue. This
was because a section in the legislation in issue empowered the
National Transport Commission
to grant or refuse, at its discretion,
an application for suspension pending the determination of an appeal.
Importantly however,
the
Court had
approached the matter on the basis that there is a common law rule of
automatic suspension of an act, instruction or decision
by the mere
noting of an appeal. It found, however, that the relevant legislation
was intended to oust the application of that
common law rule in the
context of that legislation because the Legislature empowered the
relevant authority to decide, in its discretion,
whether or not to
suspend the act, instruction or decision.
[49]
In
Marinpine Transport (Pty) Ltd v Local Road
Transportation Board, Pietermaritzburg
,
And Others
,
it was held that:
[38]
“
In
matters of this sort [where an appeal is lodged against an
administrative decision], unless extraordinary circumstances prevail,
it is always desirable that the
status
quo
be
maintained until such time as a final decision is made. Seldom is
execution before appeal permitted. Disputes over transportation
certificates are seldom any different from any other form of
dispute ventilated in court and
it
is a time-honoured principle that, in the absence of extraordinary
circumstances, the court, as the chairman did here, will always
maintain the
status
quo
until
the last word has been spoken by the final court of appeal.
The
potential difficulties and the objections to any other course are
so obvious that it is unnecessary to say anything further.
”
(own emphasis provided)
[50]
More recently in
Max
v Independent Democrats
,
[39]
Davis J specifically considered whether the general rule under our
common law, that the noting of an appeal suspends a judgment,
applies
to an administrative appeal. In holding that the “
rule of
automatic suspension
” should apply, Davis J held the
following:
“…
Baxter
Administrative Law
at 381 writes thus:
'In
the case of private disputes the effect at common law of noting an
appeal is to suspend the operation of the decision appealed
against.
But the right of appeal against decisions taken in terms of statutory
powers is dependent upon the enabling statute.
The common-law
principle can constitute no more than a presumption in the case of
administrative decisions, and this presumption
may well be negatived
by the implications of the statute
.
Take the Road Transportation Act, for example. A dissatisfied
party may appeal to the NTC against the decision of
a local road
transportation board. Application may also be made to the
chairman of the NTC who has the power to suspend the
decision of the
local board pending the outcome of the appeal. The fact that such
power was conferred on the chairman has led a
court to the conclusion
that the common-law principle (that a decision appealed against is
automatically suspended) could not have
been intended to apply in
cases where such a suspension order is not made - for otherwise there
would be no necessity for conferring
the suspending power on the
chairman.'
Mr
Budlender
also referred to De Ville
Judicial Review of
Administrative Action in South Africa
at 334 where the author
contends:
'Where
an appeal is allowed against an administrative decision
the
decision appealed against will (unless the statute in question
provides otherwise) take effect only once the period for appeal
has
expired (and the person affected has not made use of the opportunity)
or the decision has been confirmed on appeal
(where the person
affected makes use of the opportunity to appeal).
The
lodging of an appeal against an administrative decision thus suspends
the decisions being appealed against until such time as
that decision
is taken on appeal.'
On
Mr Budlender's line of argument, the lodging of an appeal against an
administrative decision suspends the effect of the decision
being
appealed against until such time as the decision is taken on appeal.
Reference
was also made in this particular context to the decision in
Leburu
en Andere v Voorsitter, Nasionale Vervoerkommissie, en Andere
1983
(4) SA 89
(W). In this case, the Court dealt with a decision of the
local road transportation board to grant certain applicants public
transportation
permits. The second respondent noted an appeal to the
national transportation commission against the decision and at the
same time
applied for the suspension of the operation of those
sections appealed against. The Court ultimately found that a
provision in
the Road Transportation Act 75 of 1977 (s 8(3)(b))
indicated that
the common- law rule of automatic suspension did
not apply in this case. However, in the process of that finding, the
Court assumed
that the common-law rule of automatic suspension
ordinarily found application in respect of the decision of the
administrative
tribunal appealed against
.
Mr
Budlende
r also referred to a
dictum
of Broome J in
Marinpine Transport (Pty) Ltd v Local Road Transportation Board,
Pietermaritzburg, and Another
1984 (1) SA 230
(N) at 232B –
D… .” (own emphasis added)
[51]
The applicants contend that it has already been held that section 50
of the Act does not
suspend the decision which is the subject of the
appeal. In this regard they submit that the judgments in
Bonitas
SCA
[40]
and
Resolution Health
[41]
support such proposition.
[52]
In
Bonitas
the Supreme Court of Appeal considered whether a
decision of the Registrar to order an inspection in terms of section
44(4)(a)
of the Act is appealable in terms of section 49(1). The
paragraph relied on by the applicants states the following:
“
[11]
Before us, Counsel for the scheme recognised the need for urgent
investigation and the element of surprise. He argued, however,
that
that could be achieved by expedition of an appeal to the council or
by taking the decision to order an inspection with the
concurrence of
the council.
There is
no provision in the MSA for the suspension of the operation of a
decision of the council pending an appeal to the appeal
board.
But
both of these proposals require that a meeting of the council be
convened. This is hardly practical. In terms of section
4(1) of the
MSA, the council shall consist of up to 15 members appointed by the
Minister of Health. In making the appointments,
the Minister is
enjoined to, inter alia, take into account expertise in law,
accounting, medicine, actuarial sciences, economics
and consumer
affairs. It can therefore safely be accepted that the members of the
council are mostly not available on a full-time
basis. This is
underscored by the provisions of section 10 of the MSA. …
”
(own emphasis provided)
[53]
The applicants’ reliance on
Bonitas
(and in particular
the emboldened sentence) for their argument that an appeal under
section 50 does not suspend the operation of
the decision on appeal
is misconceived, as the Court was concerned with the question of
whether a decision to conduct an inspection
under section 44 of the
Act was a decision for the purposes of an appeal under section 49(1).
The Court held it was not. It follows
that the question of whether or
not an appeal against such a decision would suspend its operation
never arose. Whatever the Court
said in that regard was clearly
obiter
. The remark that there is no provision in the Act which
suspends a decision on appeal under section 50 is simply a statement
of
fact, not opinion. The question is not whether such a provision
exists, but whether on a proper interpretation of the Act, having
regard to the common law presumption that an appeal suspends
administrative decisions, an appeal under section 50 has that effect.
[54]
Most importantly though, is that the Supreme Court of Appeal was of
the view that the lodging
of an appeal in terms of section 50(3)
would indeed suspend the decision on appeal. Paragraph [10] states:
“
In
terms of section 49(2) of the MSA, the operation of a decision which
is the subject of an appeal under section 49(1), is suspended
pending
the decision of the council on the appeal.
And
in terms of section 50(3), a person aggrieved by a decision of the
registrar acting with the concurrence of the council or by
a decision
of the council, may within 60 days after the date on which such
decision was given, appeal to the appeal board established
by section
50(1)
. Thus, if a
decision to order an inspection in terms of section 44(4)(a) were to
be subject to an appeal,
the
inspection could be effectively stymied by simply noting an appeal
.
This would be subversive of the intended effective intervention and
militates strongly against the interpretation contended for
by the
scheme.” (own emphasis provided)
[55]
In
Resolution Health
the applicants had applied to the Council
for accreditation as a managed healthcare organization and as
administrator of a medical
scheme.
[42]
The applicants were granted ‘
temporary accreditation
’,
subject to the resolutive conditions that substantive applications
for accreditation were to be lodged within thirty days,
and that such
applications were to be granted.
[43]
The substantive applications were refused on 29 May 2009 and the
temporary accreditation lapsed.
[44]
The applicants lodged an internal appeal against the refusal of the
applications in terms of section 50 of the Act.
[45]
That appeal in terms of section 50 was still pending at the time of
the urgent high court application which is the subject
of the
judgment. The applicants sought an order that the temporary
accreditation had not lapsed, alternatively an order that the
Council
grant the applicants accreditation “
until all the envisaged
processes have been finalized
”.
[46]
[56]
It is within the above context that paragraph 34 of the judgment
states:
“
It
is common cause that the fact that an appeal against the refusal of
the accreditation of renewal thereof is pending in terms
of section
50 of the Act to a statutory appeal board does not suspend the
refusal of the accreditation (if such were possible in
law), nor does
it provide for an interim authorization to render the services
accreditation for the delivery of which has been
refused by the first
respondent.”
[57]
Accordingly, it is apparent that no view is expressed by the court
regarding the common
law principle that an appeal suspends the
decision which is the subject of that appeal. The common cause view
of the parties referred
to in the judgment - that a section 50 appeal
did not somehow create an accreditation which the Council had refused
- is quite
distinct from and lends no support to the interpretation
advanced by the applicants - that a decision by the Council in terms
of
section 48 of the Act directing a medical scheme pay a member,
must be implemented prior to the outcome of the section 50 appeal
proceedings concerned. As the applicants concede, the Court itself
did not even consider the common law principle that an administrative
appeal suspends a decision pending appeal, let alone make any
decision in that regard.
[58]
In any event, the result in
Resolution Health
is
consistent with the common law rule and the application of
section
18(1)
of the
Superior Courts Act 10 of 2013
to appeals against the
refusal to confirm a
rule
nisi
or grant an order
conferring some benefit. An appeal cannot give rise to a confirmation
of the rule, nor to an order conferring
the benefit.
[47]
An appeal cannot restore what never was.
[59]
The applicants also submit that “
the alleged rule of
practice advocated by the respondents has also been resoundingly
rejected in the context of the Labour Relations
Act, 1995 (LRA) by
the Labour Court and the Labour Appeal Court.
” However, the
judgments relied on by the applicants do not support this submission.
In the
CCMA v Registrar of Labour Relations and Others
judgment
[48]
an order was sought “
suspending the bringing into effect of
the cancellation of the second respondent (UPUSA) as a trade union by
the first respondent
(the Registrar) pending the outcome of the
appeal
”. Paragraph 20 of the judgment states:
“
The
CCMA argued that unless the statute provides otherwise where there is
a right of appeal against an administrative decision,
such a decision
will be automatically suspended pending the finalisation of the
appeal. The argument is based on the view expressed
by De Ville
Judicial Review of
Administration Act in South Africa
at 334 and a number of cases which were relied upon by the CCMA.
Because of the view
taken on the approach to be adopted in this matter I do not deem it
necessary to canvas those views in this
judgment.
”
(own emphasis added)
[60]
In paragraph 23, the judgment states that the view expressed
by Baxter and De Ville about “…
matters of this
nature makes a loose and general point
”.
After considering the applicable provisions of the
Labour
Relations Act the
judge held “[
i
]
t is therefore my
view, firstly, that the general common-law rule practice (sic) that
an appeal stays the enforcement of a judgment
pending the outcome of
an appeal does not apply to decisions made by the Registrar in terms
of
section 106
of the LRA.
”
[49]
Accordingly, the judgment by Molahlehi J accepted that the common law
does, in general, stay an administrative decision but held
on an
analysis of the statute concerned that the cancellation of a trade
unions registration was not stayed pending the outcome
of an appeal
in terms of
section 111(3)
of the
Labour Relations Act.
>
[61]
Similarly, the Labour Appeal Court (‘
LAC
’)
judgment relied on by the applicants (
NEWU
)
[50]
also recognised the common law principle that an administrative
appeal ordinarily suspends the decision which is the subject of
the
appeal proceedings. As the applicants appear to accept the LAC in
fact endorsed the approach of Baxter set out above.
[51]
As Davis J put it:
[52]
“
[18]
The question therefore arises as to whether the Labour Court can
adopt a procedure which it considers appropriate when an appeal
is
lodged against a failed appeal of a deregistration decision (i.e. a
decision made by an administrative functionary within the
contemplation of the LRA). Notwithstanding the decision in
Max
supra
,
the common law rule does not appear to have been automatically
applied to appeals from administrative decisions. As Baxter
Administrative
Law notes:
“
The
common law principle can constitute no more than a presumption in the
case of administrative decisions, and this presumption
may well be
negative by the implication of the statute.”
”
[62]
Davis J went on to state, with reference to his judgment in
Max v Independent Democrats
:
‘
[20]
There is room to suggest that
Max’s
case, at best for appellant, seems to provide equivocal authority for
the submission that the common law rule automatically applies
though
it is clear from the facts of that case that the court there was
mindful of the irreparable harm to Max even if he was eventually
successful in the matter. It is for these reasons that it is
necessary, as Baxter has observed, to return to an examination of
the
implications of the applicable statute to determine whether the
common law principle is applicable to the present dispute.”
[63]
Ultimately having regard to the applicable statute in that
matter and the nature of the decision, Davis J held that the common
law
principle that an appeal suspends the implementation of the
decision concerned was not applicable to a decision to suspend
registration
of a trade union.
[64]
Having considered the aforegoing authorities, I conclude that there
is a common law principle
which provides that, subject always to the
applicable legislation concerned, an administrative appeal suspends
the decision which
is the subject of the appeal.
[65]
It therefore becomes necessary that the Act be considered to
determine whether the ordinary common law principle is applicable and
that an appeal in terms of section 50(3) suspends a decision by the
Council in terms of section 48(8).
The Act considered
[66]
The applicants submit that had it wished to, the legislature
could easily have included express language in section 50, as it did
in sections 48 and 49 of the Act. Section 48 and 49 both provide that
the respective appeal proceedings to the Council “
shall be
suspended pending the decision of the Council on such appeal
”.
[67]
However, there are clear differences between section 50 and
sections 48 and 49 which made it unnecessary to include equivalent
language.
In this regard,
it
is apparent
from the structure of Chapter 10, that a section 50 appeal is the
final step in the internal dispute resolution process.
A decision in
terms of section 48 or 49 cannot be taken on review, as they remain
subject to the internal remedy provided for by
section 50.
[53]
T
he Appeal Board is an independent body
with powers akin to the High Court. As noted by Patel J, the process
contemplated and powers
of the Council in terms of section 48 are
more limited than that provided for by section 50.
S
ection
50 proceedings provide for a wide appeal. However, the nature of
processes contemplated by sections 47 to 49 are less clear
and
constitute only preliminary steps in the dispute resolution process.
Furthermore unlike section 50 proceedings, in which an
independent
board considers the appeal processes, sections 48 and 49 could be
interpreted as, rather than constituting an independent
appeal,
merely providing an opportunity for the Council to reconsider
decisions taken with the Council’s concurrence or decisions
taken by the Registrar on its behalf. In terms of section 18 of the
Act, the Registrar is the executive officer of the Council;
manages
the affairs of the Council; and must act in accordance with the
directions of the Council.
There may
accordingly be doubt whether the procedures provided for by sections
48 and 49 of the Act constitute appeals in the ordinary
sense, to
which the common law principle that such proceedings suspend
decisions pending the outcome of the proceedings, applies.
Accordingly, unlike section 50, which clearly constitutes an
administrative appeal, the legislature deemed it prudent to provide
expressly that the proceedings provided for by sections 48 and 49
suspend the decisions concerned pending the outcome of the processes
provided for.
[68]
The ordinary presumption that an appeal suspends a decision provides
an explanation as
to why it was unnecessary to include any express
provision in this regard in section 50 of the Act.
[69]
What remains inexplicable, if express language regarding the
consequence of an appeal could
easily have been included in section
50, is why the legislature did not expressly provide that an appeal
in terms of section 50
does not suspend such decision, if that were
its intention. The legislature was obviously alive to the
significance of appeal proceedings
and whether such proceedings
suspend the decisions.
[70]
Thus while the ordinary common law principle provides an
explanation of why it was unnecessary to include express language in
section
50 - suspending decisions pending the outcome of an appeal -
there is no equivalent explanation as to why there is no express
clause
providing that section 50 does not suspend a decision pending
an appeal to support the applicants’ interpretation.
[71]
Rather than support the interpretation advanced by the
applicants, the very policy considerations which inform the provision
that
decisions should not be implemented pending the outcome of the
section 48 and 49 processes would be equally apposite to section
50.
That is that suspension of a decision which is the subject of a
complaint or dispute, and the maintenance of the
status quo
for the short period provided during the contemplated speedy internal
dispute resolution process, to ensure certainty is pragmatic,
cost-effective, sensible and will prevent the unnecessary
complication of implementing a decision incorrectly made and then
trying
to undo such implementation.
[72]
The entire structure of Chapter 10 is that decisions should not be
implemented prior to
the final decision by the Appeal Board.
[73]
In this regard, section 50(16)(b) of the Act, which
provides that the Appeal Board may order that the decision on appeal
be
given effect to, strongly suggests both that until such order is
made, the decision on appeal is not enforceable, and that the Appeal
Board is the only body which is statutorily empowered to enforce
decisions on appeal.
[74]
Furthermore,
t
he Act does not
confer any discretion or power on any person or body, be it the
Registrar or the Council for Medical Schemes, to
direct that a
decision subject to appeal in terms of section 50 be enforced. There
is no process in the Act for any such application
to be made.
There is no provision in the Act providing for the enforcement
of section 48 or section 49 decisions pending appeal in terms of
section 50 or any penalty in this regard.
[75]
The purpose of section 50 is to provide a quick,
cost-effective and efficient remedy to medical schemes and their
members. That
purpose would be undermined by an interpretation which
would require that within the efficient remedy contemplated, it is
necessary
to first implement and then reverse the decision concerned.
The need for parties to then have to bring a costly application (a
cost to the medical scheme and the member) to stay such proceedings
would also be contrary to that objective.
[76]
Furthermore, the reversal of a decision of the Council by the
Appeal Board will not necessarily restore the parties’
status
quo ante
. For example, the payment of medical services or goods
for the benefit of a member by a medical scheme pursuant to a
decision by
the Council will not automatically become repayable if
the decision is set aside by the Appeal Board. At common law, the
only claim
which the medical scheme would have would be under the
condictio indebiti
. But that claim cannot be brought against
the supplier of the goods or services because it will not have been
unduly enriched by
the payment. After all, it will have provided
value for the payment. That leaves the member, who may not have been
enriched to
the extent of the payment or may simply not be able to
repay the medical scheme.
[77]
An interpretation requiring that the Council’s decision be
immediately implemented,
notwithstanding that the Appeal Board has
not yet made a decision, would promote neither the objects of the Act
nor access to healthcare.
[78]
The applicants’ interpretation would have a disruptive
effect on the medical schemes industry.
Notwithstanding that the Act provides for a quick,
cost-effective and efficient remedy, a scheme must immediately
implement decisions
by the Council relating to issues such as funding
policies, scheme rules and operational procedures. These would
accordingly have
to be changed for the purposes of immediately
implementing the Appeals Committee Ruling, only to then revert back
to the pre Appeals
Committee status following successful appeal
to the Appeals Board.
A medical scheme
would be required to fund certain medication or treatment pending the
outcome of section 50 appeal proceedings,
and thereupon, if it were
found by the Appeal Board that the medical scheme should not have
funded such medication or treatment,
the medical scheme in question
would have to recover the monies it had paid out to such members.
This would accordingly have an
adverse impact on members of the
scheme as a whole. It can never have been the intention of the Act to
place funds at risk by forcing
a medical scheme to fund certain
medication or treatment which the medical scheme is not liable for,
and then to have to recover
such funds in due course after succeeding
with an appeal in terms of section 50.
[79]
The administrative costs of the medical scheme would increase
as it would be necessary in each instance to make special
administrative
arrangements during the appeal period, as well as
further administrative costs following successful appeal. The
additional financial
and operational burdens would require additional
financial and human resources, which will ultimately lead to higher
contributions
for scheme members in an already constrained economic
environment.
[80]
Accordingly, the interpretation favoured by the applicants
would ultimately harm access to healthcare and would be contrary to
the
objectives of the Act.
[81]
The applicants suggest that medical schemes “
would not be
without remedy if the Court endorses the applicants’ advocated
interpretation.
” In this regard, the applicants submit that
“…
section 59(3)(a) gives them ample recourse against
the applicants.
”
[54]
And
t
o secure the effectiveness of the
appeal, medical schemes may apply for
interim
relief.
T
he recourse provided by section 59(3)(a) is very limited. The
amount paid to the member or the supplier may only be recovered by
way of a deduction from any benefit due to the member or the
supplier. But there may be no benefit due to the supplier or member
from which the undue payment may be deducted.
The proliferation of proceedings to recover amounts wrongly
paid to members or to obtain
interim
relief pending the Appeal
Board decision is completely contrary to the quick, efficient and
cost-effective resolution of disputes
contemplated by Chapter 10 of
the Act.
[82]
The applicants have also sought to rely on the maxim
expressio
unius est exclusio alterius
as a basis for their claim that
“
the legislature is presumed to have acted intentionally in
specifying that the launching of appeals in terms of section 48 and
49
automatically stay the decisions that are the subject of those
appeals while notably omitting to mention that concept for decisions
subject to appeal in terms of section 50.
”
[83]
The maxim, which provides that the express mention of one thing is to
the exclusion of
the other should, as the applicants accept, be
applied with caution, and has been dismissively described by Hoexter
JA as a “
last refuge
”.
[55]
The maxim is typically used for the interpretation of a word or
phrase which is capable of more than one interpretation –
the
express mention of one of the possibilities excludes the other.
[56]
The applicants seek to rely on the maxim not to interpret a phrase
but rather to draw conclusions in one section of the Act on
the basis
of language used elsewhere in the statute relating to a different
process. There is nothing to suggest that the express
provisions in
section 48 and 49, suspending decisions, implies that the immediate
implementation of decisions which are the subject
of appeal in terms
of section 50 is required and the maxim
expressio unius est
exclusio alterius
provides no support for any conclusion to the
contrary.
[84]
For all the reasons advanced herein, I therefore conclude that
there is nothing in the Act that displaces the common law principle
that the administrative appeal (timeously taken) suspends the
decision which is the subject of the appeal. I therefore conclude
that the ordinary common law principle is applicable and that an
appeal in terms of section 50(3) suspends a decision by the Council
in terms of section 48(8).
The Review
[85]
The relief sought by the applicants, set out in paragraph 2 of
the amended notice of motion, is the review and setting aside
(alternatively,
declaring unlawful and invalid) of the decision of
the Council for Medical Schemes (the second respondent), communicated
to the
applicants by way of an email dated 7 May 2019
.
[86]
T
he applicants’ review is premised
on its interpretation of the Act, which I have already found to be
incorrect, and accordingly
the review must fail as must the
interdictory relief sought in the amended notice of motion.
[87]
Assuming I am wrong on this score, I would dismiss the review for the
following reasons:
The “
impugned decision
”
referred to by the applicants, which is the subject of the review, is
an email sent by Thamsanqa Diniso, Senior Investigator:
Compliance
and Investigations, of the Council for Medical Schemes, to Ebenezer
Iheanyi of Elsabe Klinck & Associates dated
7 May 2019 (‘
the
email of 7 May 2019
’).
[88]
The email of 7 May 2019 states the following:
“
Dear
Ebbie
Your letter dated 30 April 2019
bears reference.
After careful consideration of
your request that the Office should urgently enforce the Appeals
Committee ruling in the matter between
Ms Rodinis and Discovery
Health Medical Scheme, we regret to inform you that we are not in a
position to accede to your request.
...
”
[89]
The letter of 30 April 2019 sent by Ebenezer Iheanyi of Elsabe Klinck
& Associates
(‘
Ms Klinck’s letter of 30 April
2019
’), addressed to Mr Diniso, headed “
Rodinis //
Discovery Health Medical Scheme: CMS 65705: Urgent enforcement of
compliance with the Appeal’s Committee Ruling
” states
the following:
“1.
We have been supporting Ms Moira Rodinis, in the above matter.
Kindly note that we are not a firm of attorneys,
and are consultants
in the health sector. We therefore do not have any powers to
take any legal action on behalf of any client.
…
4. The
failure to implement the Ruling of the Appeal Committee of the
Council for Medical Schemes (CMS) dated 13 March 2019, in
which the
appeal was upheld, the decision directed the Scheme to fund the
treatment for the member, in full retrospectivity for
the date that
it initially refused to do so, and that such was to be done within 14
days of the receipt of the ruling seriously
violates Ms Rodinis’
rights in law.
5.
The CMS is under a constitutional duty to ensure the realisation of
Section 7 of the MSA deals with the functions of the council.
Section 7(a) states that it is a function of the council to protect
the interests of the beneficiaries of medical schemes ‘at
all
times’.
6.
We strongly believe that the right, and lawful course of action is
for CMS to enforce this ruling, and to ensure that Ms Rodinis’
interests and rights are protected, in particular in view by the
indefinite date on which the matter may be heard by the Appeal
Board.
…” (own emphasis provided)
[90]
As the Constitutional Court has put it “[
t
]
he concept
of ‘administrative action’, as defined in s 1(i) of PAJA
is the threshold for engaging in administrative-law
review.
”
[57]
The requirement propels a reviewing court to undertake a close
analysis of the nature of the power under consideration.
[58]
Section 1 of the Promotion of Administrative Justice Act 3 of 2000
(‘
PAJA
’) defines “
administrative action
”
as denoting “
any decision taken, or any failure to take a
decision… .
”. PAJA further defines “
decision
”
as meaning: “
any decision of an administrative nature made,
proposed to be made, or required to be made, as the case may be,
under an empowering
provision… .
”
[91]
The letter of 7 May 2019 merely informed Ms Klinck that the Council
was not able “
to accede to your request.
” The Act
does not confer any discretion or power on any person or body, be it
the Registrar or the Council to direct that
a decision subject to
appeal in terms of section 50 “
be enforced
”; the
Council has no power, whether in terms of the Act or otherwise, to
enforce a decision of the Council pending the outcome
of an appeal in
terms of section 50.
[92]
The
lacunae
in this regard in fact highlights that the
interpretation advanced by the applicants is not sustainable. It is
clear from the absence
of any provisions one might expect if the Act
had required that a decision in terms of section 48(8) be implemented
prior to a
decision of the Appeal Board, that no such implementation
is contemplated. It is not clear from Ms Klinck’s letter of 30
April 2019 what the letter contemplated the Council should do to
“
enforce
” the section 48(8) decision pending the
Appeal Board decision.
[93]
The first and second respondents cannot exercise powers which they do
not have or act in
a manner contrary to the provisions of the
Act.
[59]
The applicants did not have any right to make the demand as they did.
It was a demand that the Council do something which the Council
had
no authority to do. In the circumstances, it is clear that the letter
of 7 May 2019 did not constitute a decision taken in
terms of
legislation or any empowering provision. The letter accordingly did
not constitute administrative action subject to review
in terms of
PAJA.
[94]
The review should accordingly be dismissed for these reasons too.
Costs
[95]
Relying on the
Biowatch
principle
[60]
and because the applicants were asserting their rights to health
care, Mr Seroto submitted that the general rule that costs should
follow the result should not have application in the event of the
applicants being unsuccessful. He did not go further (properly
so)
and argue that despite being unsuccessful, the respondents should be
ordered to pay the costs.
[96]
Discovery and Medshield advised during the hearing that they did not
seek costs against
the applicants and the first and second
respondents left the issue in the hands of the court.
[97]
The award of costs is a matter which is within my discretion but one
which must be exercised
judicially. The application was not frivilous
or vexatious and I agree that the shield afforded by the
Biowatch
principle, should have application given the nature of the rights
being asserted.
Order
[98]
I accordingly make the following order:
The application is dismissed with no
order as to costs.
I OPPERMAN
Judge of the High Court
Gauteng Local Division, Johannesburg
Counsel
for the applicants: Adv T Seroto
Instructed
by: Assenmacher Brandt Attorneys
Counsel
for the first and second respondents: Adv JJ Brett SC and Adv L
Kutumela
Instructed
by: Khumalo Masondo Attorneys Inc.
Counsel
for the third respondent: Adv CDA Loxton SC and Adv D Smith
Instructed
by: Knowles Husain Lindsay Inc.
Counsel
for the fourth respondent: Adv K Tsatsawane SC
Instructed
by: Knowles Husain Lindsay Inc.
Date
of hearing: 2 February 2021
Date
of Judgment: 19 February 2021
[1]
Section 50(16) provides:
“
The
Appeal Board may, after hearing the appeal –
(a)
confirm, set aside or vary the relevant decision; or
(b) order that
the decision be given effect t
o
.”
[2]
Section 48(8) provides:
“
The
Council may after hearing the appeal confirm or vary the decision
concerned, or rescind it and give such other decision as
it may deem
just.”
[3]
Kubyana v Standard Bank of South Africa Ltd
2014 (3) SA 56
(CC) at para 18 (judgment of Mhlantla AJ).
[4]
Natal Joint Municipal Pension Fund v Endumeni
Municipality
2012 (4) SA 593
(SCA) at
para 18;
Cloete Murray and Another
NNO v Firstrand Bank Ltd t/a Wesbank
2015 (3) SA 438
(SCA) at para 30.
[5]
Bothma-Batho Transport (Edms) Bpk v S Bothma &
Seun Transport (Edms) Bpk
2014
(2) SA 494
(SCA) at para 12.
[6]
“
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
services 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.
”
[7]
“
The Council shall, in the exercise of its
powers, be entitled to-
(a) appoint such staff as the Council may deem necessary
…;
(b) hire, purchase or otherwise acquire such moveable or
immovable property …;
(c) enter into an agreement with any person including
the State or any other institution …;
(d) insure itself against any loss, damage, risk or
liability which it may suffer or incur;
(e) approve business plans and the budget for the
Council and the functions performed by the Registrar;
(f) approve the registration, suspension, and
cancellation of registration, of medical schemes or a benefit
option;
(g) invest, loan, advance on interest and place on
deposit, moneys not needed immediately for the current expenditure
of the Council or the functions performed by the Registrar …;
(h) exempt, in exceptional cases and subject to such
terms and conditions and for such period as the Council may
determine, a medical scheme or other person upon written application
from complying with any provision of this Act;
(i) authorise the Registrar from time to time to
sign any contract, cheque or other document which binds the
Council
or which authorises any action on behalf of the Council;
(j) determine the terms and conditions of service
of any person appointed by the Council …; and
(k) in general, take any appropriate steps which it
deems necessary or expedient to perform its functions in accordance
with the provisions of this Act.”
[8]
Section 18(2).
[9]
Section 18(3).
[10]
Section 26(11) provides:
“
No
medical scheme shall carry on any business other than the business
of a medical scheme and no medical scheme shall enrol or
admit any
person as a member in respect of any business other than the
business of a medical scheme.”
The “
business of
a medical scheme”
is defined as meaning:
“the business
of undertaking, in return for a premium or contribution, the
liability associated with one or more of the
following activities:
(a)
Providing for the obtaining of any relevant health service;
(b)
granting assistance in defraying expenditure incurred in connection
with the rendering of any
relevant health service; or
(c)
rendering a relevant health service, either by the medical scheme
itself, or by any supplier
or group of suppliers of a relevant
health service or by any person, in association with or in terms of
an agreement with a medical
scheme.”
[11]
Section 26(5) provides:
“
No
payment in whatever form shall be made by a medical scheme directly
or indirectly to any person as a dividend, rebate or bonus
of any
kind whatsoever.”
[12]
Genesis Medical Scheme v Registrar Medical Schemes and Another
2017 (6) SA 1
(CC) at para 24.
[13]
Council for Medical Schemes and another v Bonitas Medical
Fund
[2015]
3 All SA 688
(GP)
at para 18.
[14]
Supra
at note 12.
[15]
Section 32 provides:
“
The
rules of a medical scheme and any amendment thereof shall be binding
on the medical scheme concerned, its members, officers
and on any
person who claims any benefit under the rules or whose claim is
derived from a person so claiming.”
[16]
DL Permain,
The Law of Medical Schemes in South Africa [Revision
Service 6, 2019] (The Law of Medical Schemes)
, p 3-65.
[17]
By the time this matter was heard, Mr Cotty’s
application (he being the first applicant) had been heard by the
Appeal Board
and sadly, the second applicant had passed away. The
application proceeded in respect of the third and fourth applicants
only.
[18]
It should be noted in this regard that section 48
provides for appeals to the Council. It does not provide for appeals
to the
“
Appeals Committee of the
Council
”. Section 9(1)(b) of the Act
does, however, provide that the Council may appoint “
from
amongst its members or any other persons, any other committee in
regard to any matter falling within the scope of the Council's
functions and powers under this Act.
”
[19]
Section 50(6).
[20]
Section 50(13).
[21]
Tantoush v Refugee Appeal Board and
Others
[2007] ZAGPHC 191
;
2008 (1) SA 232
(T) at
[90]
:
“
A
wide appeal is one in which the appellate body may make its own
enquiries and even gather its own evidence if necessary -
Tikly
and Others v Johannes NO and Others
1963
(2) SA 588
(T) at 592A - E. In both kinds of appeal the
primary function is one of reconsideration of the merits of the
decision in
order to determine whether it was right or wrong, or
perhaps vitiated by an irregularity to the extent that there has
been a
failure of justice. Where the appellate body is placed in
exactly the same position as the original decision-maker it will be
able to correct lesser irregularities and will enjoy a power of
rehearing
de novo
.”
[22]
Section 48(8) provides that the Council may “…
after hearing the appeal confirm or vary the decision concerned, or
rescind it and give such other decision as it may deem just.”
[23]
[2005] 3 All SA 484 (T).
[24]
Sections 57(1) and (2).
[25]
Section 57(4)(c).
[26]
S
ection 57(4)(h).
[27]
Section 57(6).
[28]
1943 AD 160.
[29]
Id
at 167.
[30]
For a lower court to be entitled to deviate from
other courts, and in particular higher courts, Mr Seroto relied
on
Makate v Vodacom (Pty) Ltd
2016
(4) SA 121
(CC) at paras 69 - 80. Before venturing there and
interrogating the correctness of such proposition, I need to analyse
the authorities
to determine whether the common law was found
correctly. If so, this inquiry becomes unnecessary.
[31]
1946 WLD 225.
[32]
R v Sithole
1955 (1) SA 312
(N) at 315F – 316A.
[33]
Ibid.
[34]
Full Bench – referring to 2 Judges; Full
Court - referring to 3 Judges.
[35]
R v Ndedwa and Another
1959 (3) SA 24
(E) at 29D.
[36]
S v Abraham
1964
(2) SA 336
(T);
Malherbe v South
African Medical And Dental Council
1962 (1) SA 825 (N).
[37]
1983 (4) SA 89
(T).
[38]
1984 (1) SA 230
(N) at 232B-D.
[39]
Max v Independent Democrats and Others
2006 (3) SA 112
(C) at page 120H.
[40]
Bonitas Medical Fund v The Council for Medical
Schemes and Another
[2016] 4 All SA
684 (SCA).
[41]
Resolution Health (Pty) Ltd and Another v The
Council for Medical Schemes and Others
[2009] ZAGPPHC 106.
[42]
Section 58 of the Act requires that a person providing
administration services to a medical scheme must be accredited by
the
Council. Regulation 15 of the regulations promulgated in terms
of the Act requires that managed healthcare services must be
registered.
[43]
Supra
at note
42,
para 6.
[44]
Id at
paras 7 and 9.
[45]
Id at para
8.
[46]
Id at para
10.
[47]
MV Snow Delta Serva Ship Ltd v Discount
Tonnage Ltd
2000 (4) SA 746
(SCA) at
para [6] and
Huayou (Hong Kong) Co.,
Limited v C. Steinweg Bridge (Pty) Limited and Others
[2017] ZAGPJHC 472 (15 December 2017) at paras [24] –
[27] and the cases referred to therein.
[48]
[2010] 11 BLLR 1151 (LC).
[49]
Id
at para 39.
[50]
National Entitled Workers Union (NEWU) and
Another v Director Commission for Conciliation Mediation and
Arbitration and Others
[2011] ZALAC
10.
[51]
Applicants’ HOA, p. 54, para 111.
[52]
Mlambo JP and Mocumie AJA concurring.
[53]
Section 7(2)(a)
of the
Promotion of
Administrative Justice Act 3 of 2000
provides that no court shall
review an administrative action unless any internal remedy provided
for in any other law has first
been exhausted.
[54]
Section 59(3)(a)
provides:
“
Notwithstanding
anything to the contrary contained in any other law a medical scheme
may, in the case of—
(a) any
amount which has been paid
bona fide
in accordance with the
provisions of this Act to which a member or a supplier of health
service is not entitled to.”
[55]
Administrator, Transvaal, and Others v Zenzile
and Others
1991 (1) SA 21
(A) at 37G –
H.
[56]
Bruwer v Nova Risk Partners Ltd
2011 (1) SA 234
(GSJ) para
27.
[57]
Minister of Defence and Military Veterans v
Motau and Others
2014 (5) SA 69
(CC) at para 33.
[58]
Id at para 34.
[59]
Gauteng Gambling Board v MEC for Economic
Development, Gauteng
2013 (5) SA
24 (SCA) at para 1.
[60]
Biowatch Trust v Registrar, Genetic Resources,
and Others
2009 (6) SA 232
(CC).