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[2021] ZAGPPHC 434
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Compensation Commissioner and Others v Compensation Solutions (Pty) Ltd (30147/18) [2021] ZAGPPHC 434 (30 June 2021)
REPUBLIC OF SOUTH AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
DIVISION, PRETORIA
CASE
NO:
30147/18
NOT
REPORTABLE
NOT
OF INTEREST TO OTHER JUDGES
REVISED
In
the matter between:
THE
COMPENSATION COMMISSIONER
First Applicant
DIRECTOR-GENERAL OF THE
DEPARTMENT
OF LABOUR OF THE NATIONAL
GOVERNMENT
OF
THE REPUBLIC OF SOUTH AFRICA
Second Applicant
MINISTER
OF LABOUR
Third Applicant
and
COMPENSATION
SOLUTIONS (PTY) LTD
Respondent
JUDGMENT –
APPLICATION FOR LEAVE TO APPEAL
The
judgment
and
order
are
accordingly
published
and
distributed
electronically.
The
date
and time of hand down is deemed to be 10:00
on 30 June 2021
TEFFO, J
:
[1]
The applicants seek leave to appeal the judgment and order of this
Court delivered on 17 July 2020.
[2]
The respondent opposes the application.
[3]
In order to succeed with the application, the applicants must show in
terms of section 17 of the Superior Courts Act (“
the Act
”)
that:
(a)(i)
the appeal would have a prospect of success; or
(ii)
there is some other compelling reason why the appeal should be heard,
including conflicting judgments on the matter under consideration.
(b)
the decision sought on appeal does not fall within the ambit of
section 16(2)(a); and
(c)
where the decision sought to be appealed does not dispose of all the
issues in the case, the appeal would lead to a just and
prompt
resolution of the real issues between the parties.
[4]
The application is premised on various grounds. These grounds are, in
actual fact as the respondent has correctly argued, a
regurgitation
of the arguments which were made in the main application to support
the applicants’ stance that the settlement
agreement was not
meant to deal with future claims which did not form part of the
litigation before Makhafola J. Basically this
application is aimed at
challenging the order and judgment on the basis that the court should
have found that the issue before
Makhafola J was the backlog of
processing the invoices that were
already submitted
to the applicants, and in
their possession, and therefore outstanding and being the subject of
the litigation on 31
July 2009.
[5]
It is not my intention to deal with each and every ground in that
central to the application is the interpretation of the settlement
agreement.
The
grounds of appeal
The
COIDA procedure is not included in the settlement agreement.
Therefore, the settlement agreement without the required submission
of the enquiry form W.C1.20 overrides or created a special billing
procedure for the respondents only.
[6]
It was submitted in the respondents’ heads of argument in the
main application that the applicants had intimated to the
respondent
not to use the W.C1.20 procedure to query non-payment of the
accounts. Further that the Umuhleko system that was previously
used
did not provide for the use of such a procedure, and that the
applicants had abandoned reliance upon such procedure. These
allegations were made in the respondent’s answering affidavit
in the main application but were not disputed in the replying
affidavit, save to say that the applicants only replied by saying
“
the
allegations
are
noted
and will be dealt with in argument
”.
[7]
The respondent further submitted that as Mr Mafata has stated in the
founding affidavit in support of the main application that
COIDA
provides that the applicants should be given sufficient time and
opportunity to investigate the validity of each claim, COIDA
does not
prescribe any time period whatsoever for the validation
of claims and/or payment
of
accounts. It claimed that it was common cause
that such had to take place within a reasonable
period of time. The
parties to the settlement agreement decided that 75 days would be
appropriate. Mr Mafatsa concedes in paragraph
13 of the founding
affidavit in support of the main application that the procedure
adopted by the respondent in submitting claims
accords with COIDA and
its regulations.
[8]
This ground of appeal is neither here nor there. It loses sight
of the fact that the parties decided on the terms of the
settlement
agreement to suit their needs and eventually made the settlement
agreement an order of court by agreement.
The
effect
of
the
judgment
and
order
basically
mean
that
the
respondent
is
permanently entitled to charge the state department a special
interest rate of 15,5%
without
fully
complying
with
COIDA
regulations,
yet
all
other
service providers of the applicants who are required in law to
comply with COIDA are not entitled to this special interest rate.
[9]
The argument cannot be correct. Clause 4 of the settlement agreement
reads:
“
The
first
respondent shall pay the applicant interest at the
current legal
rate of interest (being 15,5 per cent per
annum) on all currently
outstanding
medical
accounts
to
which
the
letter
of
demand
dated
25 March
2009
relates,
from
such
date
of
demand
to
date
of
payment
of
each such
respective account.
(My emphasis.)
[10]
The letter of demand was attached to the founding papers as annexure
“JL 12”. Clause 3 of the agreement reads:
“
The
first
respondent
shall
process
the
backlog
of
medical
accounts
referred to in Annexure JL 12, at page
88 of the record in this
application, by 30 October
2009.
”
[11]
The payment of the interest of 15,5% per annum as referred to clause
4 of the settlement agreement clearly related to outstanding
medical
accounts which were included in the letter of demand dated 25 March
2009 (“JL 12”). This related to the backlog
that was
referred to in clause 3 the processing of which would be completed by
30 October 2009.
The
judgment ignored what the parties specifically stated that the court
order was to settle the application and bring an end to
it.
[12]
In its answering affidavit to the main application, the respondent
contended that Mr Mafatsa, the current Compensation Commissioner
who
deposed to the founding affidavit in support of the main application,
was not involved in the negotiations leading up to and
the conclusion
of the settlement agreement. The respondent attached the notice of
motion and the amendment thereof under case no.
35047/09 which served
before Makhafola J on 31 July 2009 to support its assertions that the
purpose of the application was to implement
measures that would
ensure that future accounts were dealt with expeditiously and thereby
avoid a situation again arising of millions
of rands of accounts
remaining unpaid for inordinately long period of time.
[13]
The respondent further contended that the issue of the accounts
outstanding at that time was not raised, although reference
thereto
was made in the letter of demand (annexure JL 12) attached to the
founding papers. It was for that reason that clause 3
of the
settlement agreement was incorporated into the agreement. I have
considered the notice of motion referred to above together
with the
amendment thereof. This is the application that culminated into the
settlement agreement that the parties concluded and
which was then
made an order of court by agreement. Clearly, it cannot be concluded
that the settlement agreement was limited to
the outstanding accounts
which were existing at the time and did not relate or regulate claims
submitted after the order was granted
if one considers the purpose of
the application. It therefore follows that this ground of appeal has
no merit.
The
learned judge erred in not finding that the applicants are organs of
state and operates on public funds
.
[14]
This ground is not of assistance to applicants’ case. The
Compensation Fund is not named in section 1 of Act 40 of 2002
as an
organ of state. It is cited in the current proceedings in its
official capacity as an administrator by virtue of section
2 to 4 of
COIDA.
The
learned judge erred in that she failed to take into account the fact
that the respondent is not a service
provider of the applicants and that
there is therefore no formal contract of service
between
the parties.
[15]
It has been argued that I should have found that the respondent’s
relationship with applicants only comes into existence
if the
respondent takes cession of the invoices that are payable to the
individual service providers of the applicants. In that
event such a
cession will take place only with effect from the date of the
conclusion of such a cession agreement. Such cession
does not
operative retrospectively.
[16]
Furthermore, that the rights and duties in terms of the cession
agreement are limited. A cedent actually cedes to the cessionary,
as
at that date. It follows that a service provider of the applicants
who cedes in 2020, had nothing to do with a settlement agreement
concluded in 2009 where he was not a cedent or may not have ever been
a doctor or service provider of the applicants.
[17]
I find these contentions irrelevant. The settlement agreement was
concluded with the respondent who is not a service provider
of the
first applicant. It had nothing to do with the service providers of
the first applicant. There is therefore no merit on
this ground of
appeal.
The
learned judge erred in finding that the respondent is to this day
entitled as its cause of action to rely on a settlement agreement
concluded in respect of the
cession
agreements
it concluded
during or
pre-2009
with
individual
cedents who were the service providers of the applicants.
[18]
It was submitted that I should have found that upon final settlement
of the backlog that was the mischief cured by the settlement
agreement and resolution of those issues, the settlement agreement
becomes fully satisfied and immediately therefore, falls away
once
and for all.
[19]
This argument is in my view flawed. It is clear from the application
that served before Makhafola J on 31 July 2009 that a
declarator was
sought that addressed the future conduct of the applicants
vis-à-vis
the respondent’s accounts and a court order was granted by
agreement to that effect. This ground of appeal is therefore
meritless.
The
learned
judge
erred
in
failing
to
find
and/or
properly
interpret
the
real
purpose of a settlement agreement, namely to settle and thereby bring
finality and end the issues before court.
The
judge erred and misdirected herself in finding
that
the
settlement
agreement
was
intended
to
create
a
future
and permanent
contractual
relationship
between
a
single
company
and
a
government department.
The judge erred in not
finding that the effect of the settlement
agreement
is
to
bring
finality
to
litigation
between
the
parties,
the
lis
becomes
res
judicata
.
The
court
order
cannot
be
used
as
a
cause
of action into future
litigation. The court order can only be enforced by execution or
contempt proceedings not as a cause of action
into the future.
[20]
I found it prudent to deal with these grounds together. It is clear
from the 2009 court order that the purpose was to regulate
future
conduct of the parties in relation to the claims. I do not agree that
the principle of
res judicata
applies to claims that
arose subsequent to the 2009 order. The claims are regulated by the
agreed procedure in terms of the court
order of 31 July 2009.
The
different clauses of the settlement agreement whether read together
as a whole
or individually, prove
strongly
that the
purpose
of the
settlement agreement
and
order
was
to
settle
the
backlog
and
not
contract
into
future relations.
[21]
This submission cannot be correct. The interpretation of the
settlement agreement
by the applicants is in
direct contrast with its clear and
unambiguous
terms. It is clear from the face of the settlement
agreement that it was intended to regulate the future conduct of the
parties.
In a similar matter between the same parties decided in this
Court by Coetzee AJ under case no. 84089/2018, the court made the
same finding and held as follows:
“…
The
procedures
in
clauses
2
and
5
would have
been
redundant
if
the agreement only regulated the backlog
claims as on 21 September
2009
…
The
agreement
also
regulates
the
processing
of
claims
after
2009
.
”
(My emphasis.)
I
align myself with this view. Leave to appeal was refused in the
matter referred to
supra
and the applicants petitioned
the SCA for leave to appeal. The SCA dismissed the application for
leave to appeal under case no.
1164/2019 with costs on the grounds
that there is no reasonable prospect of success in an appeal, and
there is no compelling reason
why an appeal should be heard.
Conflicting
judgments
[22]
The applicants submitted that there are compelling reasons why
leave to appeal should be granted. There are conflicting
judgments
from this division regarding the interpretation of the
settlement agreement. They relied on two decisions
which were decided
in their favour. The respondent disagreed and submitted that the
cases referred to are not conflicting in nature.
The submission is
simply based on the different outcomes in the different cases that
involved the same parties. It has not been
shown that the different
judgments dealt with the same issues and arrived at different
conclusions.
[23]
In the two matters relied upon by the applicants, viz, case numbers
47268/18 and 20293/15 summary judgement was refused in
actions
instituted by the respondent based on the settlement agreement.
[24]
In case no. 20293/15 Sibuyi AJ refused summary judgment on the basis
that the respondent failed to identify the claims which
were
allegedly validated and approved for payment from its papers. He
further held that the court order does not provide any remedy
in the
event of the applicants failing to process, validate and effect
payment on the validated medical accounts within 75 days
from the
date of acceptance of the claim. These findings have got nothing to
do with the interpretation of the settlement agreement.
[25]
In case no. 47268/18 in dismissing the summary judgment application,
Collis J held that the particulars of claim did not comply
with the
provisions of Rule 18(4) of the Uniform Rules of Court.
[26]
In both matters the court did not find that the settlement agreement
did not regulate the future relationship between the parties.
The
respondent has attached a long list of cases between same parties
which dealt with the same issues which included the interpretation
of
the settlement agreement. Summary judgment was granted in all those
matters after it was held that the settlement agreement
regulated the
future relationship between the parties.
[27]
Mr Maakane SC for the applicants also referred me to the Supreme
Court of Appeal judgment between same parties where Mr Mkhonto,
the
erstwhile Compensation Commissioner was found guilty of contempt of
court for failure to comply with the court order of Makhafola
J. He
submitted that the decision was set aside by the Constitutional Court
on the basis that the court order of Makhafola J was
res
judicata
. This submission is not correct. The
Constitutional Court in case no. CCT 99/16 set aside the SCA decision
on the basis that the
reason for the non-compliance of the court
order was not
mala
fide
in that there was
an explanation by the applicants that there were logistical problems
at the first applicant’s offices. Further
that Mr Mkhonto was
not joined as a party to the proceedings.
[28]
Having considered all the grounds for leave to appeal, I am not
persuaded that the appeal would have a reasonable prospect
of success
and that is some other compelling reason why the appeal should be
heard.
[29]
Accordingly, the application for leave to appeal is dismissed with
costs.
M J TEFFO
JUDGE
OF THE HIGH COURT
GAUTENG
DIVISION, PRETORIA
Appearances
For
the applicants: S S Maakane SC & A N Tshabala
Instructed
by: State Attorney Pretoria
For
the respondent: C J Welgemoed
Instructed
by: Quiryn Spruyt Attorneys c/o V D T Attorneys
Heard
on: 16 March 2021
Handed
down on: 30 June 2021