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[2017] ZAGPPHC 78
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Genesis Medical Scheme v Council for Medical Schemes and Another (10387/2017) [2017] ZAGPPHC 78 (28 March 2017)
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
DIVISION, PRETORIA
CASE
NO: 10387/2017
Reportable
Of
interest to other judges
Revised
28/3/2017
In
the matter between:
GENESIS
MEDICAL
SCHEME
Applicant
and
THE
COUNCIL FOR MEDICAL
SCHEMES
1
st
Respondent
THE
REGISTRAR OF MEDICAL
SCHEMES
2
nd
Respondent
JUDGMENT
DAVIS,
AJ:
[1]
NATURE OF THE APPLICATION
:
This
is an urgent application wherein the Applicant (“
Genesis
”),
a medical scheme conducting its business in accordance with the
Medical Schemes Act, No. 131 of 1998, (“
the
Act
”) claims an order
whereby the First Respondent, being the Council for Medical Schemes
(the “
CMS
”),
be directed to remove a number of statements from its website “…
within 24 hours of the
granting of this order
”.
The Second Respondent is the Registrar of Medical Schemes (the
“
Registrar
”).
No relief is clamed against the Second Respondent but both
Respondents opposed the application. At the hearing
of the
matter the papers, together with heads of argument, comprised some
300 pages and both parties were represented by senior
and junior
counsel.
[2]
RELIEF CLAIMED
:
In
its notice of motion, apart from claiming that the matter be heard as
one of urgency, the Applicant claims the following relief:
“
2. That pending the final
determination of this application, at which the Applicant will seek a
final order in terms of paragraphs
2.1 to 2.4 below,
alternatively
,
pending the determination of an action to be institution by the
Applicant against the First Respondent for damages within 30 days
of
the granting of this order, the First Respondent be directed to
remove the under-mentioned statements from its website within
24
hours of the granting of this order:
2.1 A number of contraventions by
medical schemes of Regulation 8 of the regulations published under
the MSA have been committed
by the Applicant and have resulted in its
members being exposed financially.
2.2 The Applicant adopts an
approach in respect of the application of Regulation 8 relating to
prescribed minimum benefits (‘PMB’s’)
in response
to claims of its members which is in conflict with the law and with
its own scheme rules, being that it is entitled
to decline the
funding of treatment of PMB conditions if such treatment was rendered
at a private hospital.
2.3 That the Applicant continues,
despite the judgment of the Supreme Court of Appeal in the matter of
The Council for
Medical Schemes v Genesis Medical Scheme
,
to disregard that decision and that it ‘still declines funding
members’ accounts for services rendered at private
hospitals’;
2.4 The Applicant’s conduct
after the delivery of the said judgment shows a persistent disregard
for the law and for the judgment
of the Supreme Court of Appeal.
3. Directing the First Respondent
to pay the costs of this application
alternatively
that the costs of this application be reserved for determination at
the final hearing of this application.
”
[3]
THE FINALITY OF THE RELIEF CLAIMED
:
3.1 It is not exactly understood what
the Applicant meant by its persistent referral in paragraphs 2 and 3
of the notice of motion
with the words “
at
the final determination of this application
”.
Once the application was set down on the roll and once it was heard,
albeit on the urgent court roll and after all
the papers had been
filed by the respective parties, any judgment on the merits would be
a “
final determination
of the application
”.
Unless the matter was struck from the roll or an interim order was
granted pending the institution of an action (as
claimed in the
alternative) it appears that from the outset final relief was
claimed.
3.2 Mr Maritz SC who appeared for the
Respondents together with Ms Lapan also referred the court to the
judgments in
Hix Network
and Technologies v System Publishers (Pty) Ltd
1997(1) SA 391 (AD) and
Cape
Tex Engineering Works (Pty) Ltd v SAB Lines (Pty) Ltd
1968(2) SA 528 (CPD). In the lastmentioned judgment Corbett J
(as he then was) stated the following (at 529G-530A):
“
On the other hand Mr
Friedman who appeared on behalf of the Respondent argued that the
approach laid down in regard to temporary
or interim interdicts was
not appropriate in this particular case because in effect the court
was being asked to grant a final
interdict. He submitted
therefore that the proper approach should be that indicated in a Full
Bench decision of this court
in the case of the
Stellenbosch
Farmers’ Winery v Stellenvale Winery
1957(4) SA 234 (C) at p. 235 where it was indicated that, where there
is a dispute as to the facts, a final interdict should only
be
granted in notice of motion proceedings if the facts as stated by the
Respondents together with the admitted facts in the Applicant’s
affidavits justify such an order. It seems to me that Mr
Friedman’s argument in regard to this aspect of the matter
is
the correct one. This approach was also followed in
BHT
Water Treatment (Pty) Ltd v Lesley and Another
1993(1) SA 47 (WLD) which emphasises that a court should look at the
substance rather than the form of the relief sought.
The
substance of what the Applicant seeks is a removal of the statements
published by the Respondent and a cessation thereof.
That
relief is final and the matter should therefore be approached as if a
permanent interdict is applied for.
”
3.3 With reference to
Setlogelo
v Setlogelo
1914 AD 221
at 227 and applying the abovementioned principles to Genesis’
application, it appears that for Genesis to succeed, it must
satisfy
the trite requirements of a permanent interdict namely: (a) a
clear right which is being threatened, (b) an injury
actually
committed or reasonably apprehended and (c) the absence of similar
protection by any other remedy. Even if Genesis
would not be
able to show a clear right required for a final interdict, it might
conceivably still be granted an interim interdict
if it could show
(a) a
prima facie
right, (b) a well-grounded apprehension of irreparable harm if the
interim relief is not granted (c) that the balance of convenience
favours the granting of this interim interdict and (d) that it has no
other satisfactory remedy.
3.4 With reference to the judgment in
Hix Network and
Technologies
supra
at 399A, to the requisites for an interim interdict must be added the
fact that the remedy is a discretionary remedy and that the
court has
a wide discretion.
3.5 Having stated the above, Genesis
has a right not to be defamed and the continued publication of
defamatory material would therefore
commit an injury or lead to the
apprehension of the continuation of an injury. The analysis
should therefore be whether the
Respondents have defamed Genesis and
have no justification for having made the alleged offending
statements and whether they should
be permanently interdicted in the
fashion claimed by Genesis.
[4]
THE APPLICABLE PRINCIPLES OF THE LAW OF DEFAMATION
:
4.1 Genesis as a trading corporation
is entitled to claim protection from defamatory statements which may
injure its reputation
as a business (and to claim for general and
actual damages caused thereby). See
Caxton
v Reeva Foreman (Pty) Ltd
1990(3) SA 547 (A) and
Financial
Mail (Pty) Ltd v Sage Holdings Ltd
1993(2) SA 451 (A).
4.2 For purposes of the above, Genesis
must prove the publication of a defamatory statement. See
International Tobacco
Company SA Ltd v United Tobacco Company South Ltd (4)
1955(2) SA 40 (W). Apart from Genesis’ allegation that
the statements were defamatory, it is a question of law whether
the
words complained of are reasonably capable of conveying to the
reasonable reader a meaning which defames Genesis. See
the
cases cited by the learned author Harms in
Amler’s
Precedents of Pleadings
(7
th
Edition) at 163.
4.3 Falsity of a statement is not a
matter to be alleged or proved by a person alleged to have been
aggrieved by the defamatory
statements but a defendant may however
justify his statements by alleging and proving its truthfulness and
that its publication
was in the public interest.
4.4 Although a claimant relying on a
claim for defamation must allege
animus
iniuriandi
there is a
presumption that the publication of a defamatory statement was
animo
iniuriandi
and the
publisher then bears the onus of alleging and proving the absence of
the intent to defame. See
SAUK
v O’Malley
1977(3) SA 394 (A) at 403 and
Brett
v Schultz
1982(3) SA
286 (SE) at 292.
4.5 In addition to the denial of
animus iniuriandi
,
the various defences open to the Respondents in this matter are the
denial of wrongfulness, truth and publication in public interest,
fair comment and qualified privilege. See
Neethling
v Du Preez, Neethling v The Weekly Mail
1994(1) SA 708 (A) at 769-780,
Delta
Motor Corporation (Pty) Ltd v Van der
Merwe
2004(6) SA 185 (SCA),
Van
der Berg v Coopers & Lybrand Trust (Pty) Ltd
2001(2) SA 242 (SCA) and
Herselman
NO v Botha
1994(1) SA
28 (A).
[5]
Upon a reading of paragraphs 2.1 to 2.4 of the Applicant’s
notice or motion as quoted above, and from a reading of the
papers,
it is clear that the interpretation of the Supreme Court of Appeal
judgment (“
the SCA judgment
”) in the most recent
spate of litigation between the parties is both pertinent and germane
to Genesis’ current approach
to claims of its members and to
the Respondents’ view of Genesis’ conduct as contained in
their publications.
In fact, one of the principal allegations
is that Genesis disregards the SCA judgment. This is also the
basis of a counter-application
by the Respondents wherein they allege
that Genesis had acted in contempt of the SCA judgment. The
counter-application was
not pursued in the urgent court.
[6]
THE SCA JUDGMENT
:
The
judgment of the Supreme Court of Appeal referred to in paragraph 2.3
of the Applicant’s notice of motion is that reported
as
Council
for Medical Aid Schemes and Another v Genesis Medical Scheme and
Others
2016(1) SA 429
(SCA). The relevant aspects of this judgment are the following:
6.1 Under Section 20 of the Act a
medical scheme may not carry on business as such unless it is
registered under Section 24.
In turn, Section 29 provides that
the Registrar shall not register a medical scheme and that no medical
scheme may carry on such
business unless its rules make provision for
a number of specific matters. In particular Section 29(1)(o)
and (p) provide
that the rules must make provision for:
“
(o) The scope and level of
minimum benefits that are to be available to beneficiaries as may be
prescribed;
(p) No limitation shall apply to
the reimbursement of any relevant health service obtained by a member
from a public hospital where
this service complies with the general
scope and level as contemplated in paragraph (o) and may not be
different from the entitlement
in terms of the service available to a
public hospital patient.
”
6.2 The minimum benefits referred to
in Section 29(1)(o) are those prescribed in Regulations 7 and 8 of
the Regulations promulgated
in terms of Section 67 of the Act by the
Minister of Health in Government Notice R1262 of 20 October 1999 and
amended from time
to time thereafter. The particulars of
Regulations 7 and 8 are quoted in the SCA judgment. Regulation
7 defines the
“
prescribed
minimum benefits
”
(“PMB”) and pertains to the provision of the diagnosis,
treatment and care costs of diagnosis and treatment
pairs listed in
Annexure “A” to the regulations and any emergency medical
condition.
6.3 Regulation 8 in turn provides
that, subject to the provisions of that regulation, any benefit
option that is offered by a medical
scheme must pay in full without
co-payment or the use of deductibles, the diagnosis, treatment and
care costs of the PMB conditions.
6.4 Regulation 8(2) provides as
follows:
“
Subject to Section 29(1)(p)
of the Act, the rules of a medical scheme may, in respect of any
benefit option, provide that –
(a) the diagnosis, treatment and
care costs of a prescribed minimum benefit condition will only be
paid in full by the medical scheme
if those services are obtained
from a designated service provider in respect of that condition; and
(b) a co-payment or deductible, the
quantum of which is specified in the rules of the medical scheme may
be imposed on a member
if that member or his or her dependent obtains
such services from a provider other than a designated service
provider provided
that no co-payment or deductible is payable by a
member if the service was involuntarily obtained from a provider
other than a
designated service provider.
”
6.5 Regarding the abovementioned
statutory regime, the SCA found that Genesis would be liable to pay
in full the prescribed minimum
benefits payable irrespective of
whether the diagnosis, treatment and care costs were incurred at a
private or public medical facility
“
subject
of course to the provisions of Regulation 8(2) and the proviso
thereto as read with Regulation 8(3) which would limit its
liability
to the costs that would have been charged had such treatment been
obtained from a ‘designated service provider’
(DSP)
”.
6.6 It is further clear from the SCA
judgment that there has been some tension between Genesis and the CMS
regarding the appointment
of DSP’s since 2006 (the SCA refers
to the parties being at “
loggerheads
”).
The upshot of the dispute was that the Genesis did not consider
itself compelled to appoint DSP’s and that
it was free, in
terms of its rules, to thereby contract with its members. The
argument went further that, once the rules
have been approved by the
Registrar, the relationship between the scheme and its members was
governed solely by the rules and that
this trumped the provisions of
the Act and the Regulations.
6.7 In paragraphs 37 to 42 of the SCA
judgment, the learned judges of appeal found against Genesis.
It was held that the limited
liability argued for by Genesis went
against the wording and purpose of the PMB provisions which required
and intended medical
schemes to “
pay
in full
” the costs of
treatment of PMB conditions, whether obtained from public or private
hospitals. An underlying purpose
of the provisions, namely to
ease the pressure on public resources, would also be defeated if
medical schemes were allowed to escape
liability when treatment was
obtained at a private hospital. Genesis’ argument that
its members, by accepting its rules
waived their benefits was wrong
in the context of public-interest legislation. Genesis could
not evade its statutory obligations
by prescribing rules that had a
contrary effect.
6.8 The SCA then concluded as follows:
“
44. Simply put, the law
obliges medical schemes to pay the costs of treating PMB conditions
in full and that is what Genesis must
do. Genesis had the
opportunity to appoint DSP’s. It could even have
concluded agreements with the public sector
as its DSP, which would
not have been offensive if the Registrar was satisfied that there was
a clear agreement between it and
the relevant public health
authorities. But it failed to appoint DSP’s either in the
private or public sector.
Consequently, as a result of its own
failure in that regard, the ameliorating provisions of Regulation
8(2) are not available to
it and it became obliged to pay in full …
“ for treatment in
respect of PMB conditions.
[7]
GENESIS’ CURRENT
POSITION
:
7.1 The intention of the legislature
regarding the payment of the costs of treatment of PMB conditions by
a medical scheme has been
found in the SCA judgment to be the
following:
“
[38] Section 29(1)(o) and
Regulation 8 which, read together, require a medical scheme to ‘pay
in full’ the costs of
treatment of PMB conditions at a scope
and level as may be prescribed were clearly designed to ensure that
members would not be
obliged to bear the costs of providing such
treatment. They make no mention of a medical scheme being
obliged to do so only
in the event of the treatment being obtained
from the public sector. Indeed, the entire tenor of the
legislation is to the
contrary effect, the provisions referring to
DSP’s clearly indicating that private sector treatment was
envisaged –
such provisions allowing a medical scheme to select
DSP’s with whom it may reach agreement on charges beneficial to
it and
thereby to limit its exposure to liability under Regulation
8(2).
[39] In the circumstances the
Minister, in specifying the table of PMB’s and the allowable
treatment for such conditions,
clearly intended to ensure that
members of medical schemes would enjoy cover in relation to those
specific medical conditions and
encourage them to seek treatment in
either private or public hospitals. That objective would be
defeated by a medical scheme
only providing for cover or the
treatment of PMB’s if obtained from the public sector, thereby
effectively shifting the cost
of treating PMB’s from medical
schemes to the state. That is precisely what Genesis has
attempted to do by not appointing
DSP’s. Instead of
providing an option for its members to obtain treatment for PMB’s
in the private sector, it
seeks to oblige its members to obtain
treatment for those conditions in state institutions at little or no
cost to itself.
”
7.2 On 11 March 2016, being scant four
months after the SCA judgment, Genesis circulated a notice to its
members in which they were
advised of the selection of public or
state hospitals as designated service providers. This, Genesis
says, it is entitled
to do as their current rules (with effect from 1
January 2008) reads
inter
alia
that it pays “
100%
of actual cost in respect of benefits defined as PMB’s in the
Act … when obtained from a public or state hospital
or
designated service provider
”.
Genesis argues that its selection of public and state hospitals as
DSP’s allows it to avoid the criticism expressed
against its
prior conduct by the Supreme Court of Appeal and places it outside
the judgment thereof.
7.3 On 22 March 2016, Genesis
submitted a proposed rule amendment to the Registrar. It is to
the effect that its selection
of all public hospitals in South Africa
as its DSP’s be recorded in its rules.
7.4 Its proposed rule amendment was
rejected by the Registrar in a letter dated 16 May 2016. The
grounds of rejection were
stated to be that:
“…
although it is the
prerogative of the scheme to select the public sector as a DSP, the
scheme must first provide the Registrar with
evidence that there is a
‘clear agreement’ between Genesis and the relevant public
hospital. Accordingly, the
scheme is not entitled to select
every hospital in the public sector as a DSP without concluding an
appropriate agreement with
each public hospital. In the absence
of such agreements, the state cannot be listed as a DSP in the rules
of the scheme.
It is unfair to expect members to find out which
state facilities can accommodate them in the absence of a list of
specific hospitals
that they can go to and with whom the state has an
arrangement.
”
7.5 On 6 June 2016 Genesis lodged its
appeal in terms of Section 49 of the Act and is still awaiting the
judgment from the Appeal
Committee. In a supplementary practice
note Genesis however now argues that the proposed rule amendment
which is the subject
of the appeal was unnecessary and was introduced
by it “ …
simply
to clear up any possible confusion …
”
. It persists in its argument that given its rules as presently
formulated, Genesis was required to do no more than
select a DSP in
compliance with Regulation 7 which it has done by selecting public
and state hospitals.
7.6 Although Genesis’ selection
of public rather than private healthcare providers as DSP’s
appears to run contrary
to the SCA judgment set out in paragraphs
[38] and [39] thereof, it does appear from the judgment itself that
Genesis might well
be entitled to select DSP’s from the public
sector. This can be inferred from paragraph [44] of the SCA
judgment quoted
above where the learned judges of appeal stated that:
“…
Genesis …
could even have concluded agreements with the public sector as its
DSP which would not have been offensive if the
Registrar was
satisfied that there was a clear agreement between it and the
relevant public health authorities.
”
7.7 What must immediate be clear is
that while the SCA appears to have left the door open for Genesis to
select healthcare providers
in the public sector as its DSP’s,
the conclusion of agreements with such DSP’s was stated as a
proviso
(with reference to D L Perman,
The
Law of Medical Schemes in South Africa
,
par. 7.2). However, Genesis, in extensive argument, which
argument it also said served before the Appeal Committee referred
to
in paragraph 7.5 above, holds the view that it is not necessary to
enter into an agreement with the public sector as Regulation
7 does
not require such an agreement and that this requirement was not an
issue before the SCA in the abovementioned judgment.
It further
argues that, in the case of the use of a state hospital as a DSP, the
tariffs charged by that institution for any service
are governed by
the uniform patient fee schedule published by the Minister based on
the
National Health Act of 2003
. It further argues that this
schedule provides sufficient certainty as to the tariffs at which
services are rendered and
that it is therefore not necessary to have
“
clear agreements
”
as would be the requirement with private sector DSP’s.
Having regard to the conclusions which I reached as set
out hereunder
and so as not to pre-judge the decision of the Appeal Committee or
undermine the pending process before it, I shall
refrain from making
a determination in this regard. The question that still remains
though is whether the Respondents have
defamed Genesis and whether
Genesis is entitled to the relief claimed.
[8]
EVALUATION OF THE
STATEMENTS AND THE PUBLICATION THEREOF
:
8.1 The statements complained of by
Genesis in its notice of motion were distilled from two
publications. The first was part
of a Powerpoint presentation
contained in the Respondents’ annual report made by the CMS
during October and November 2016
in the course of presenting its
2015/2016 annual report to the public. The second was an
article made available to the public
by publication on the CMS
website on 17 January 2017.
8.2 The portion of the article
containing references to Genesis is the following:
“
Most contraventions of
Regulation 8
which resulted in members being exposed financially
related to complaints against the Genesis Medical Scheme. The
view held
by Genesis Medical Scheme, which I must hasten to state was
not founded in law nor in the scheme rules, was that it was entitled
to decline funding the treatment of PMB conditions if such treatment
was rendered at a private hospital/facility. The fact
that this
incorrect interpretation of the legislation was finally resolved by
our courts in the matter between the Council for
Medical Schemes v
Genesis Medical Scheme (2015) SCA 161 (16 November 2015) does not
provide any comfort to both the regulator and
members of Genesis
Medical Scheme as the scheme continues to disregard the court
pronouncement and still declines funding members’
accounts for
services rendered at private hospitals. In this regard, all
complaints received after the court judgment, which
shows persistent
disregard of the law and the Supreme Court of Appeal judgment were
monitored and escalated to the Compliance and
Investigation unit and
Legal Services for corrective action to be taken against Genesis
Medical Scheme.
”
8.3 Proceeding (in similar fashion as
Heher J (as he then was) did in the court
a
quo
in the
Hix
Network and Technologies
-matter
referred to above) on the assumption that the statements complained
of could
per se
be defamatory, I now proceed to analyse the remainder of the issues
pertaining to defamation in the present circumstances.
8.4 Whilst it might be defamatory to
allege that a medical scheme is acting contrary to statutory
provisions, such allegation would
not attract liability if it is true
and publication of the statement is in the public interest.
Having regard to the statements
already expressed in the SCA judgment
and the fact that the legislation involved “…
is
clearly a matter involving public interest and in respect of which
public policy requires compliance by medical schemes …
”
then the publication of particulars of offending conduct would be in
the public interest.
8.5 The comments regarding the
contraventions of
Regulation 8
referred to in the first paragraph of
the above-quoted portion of the article and which predates the SCA
judgment were clearly
true and based on those contraventions the SCA
held against Genesis.
8.6 Subsequent to the SCA judgment,
the CMS has received some further seven complaints. Its
deponent states that Genesis responds
to the CMS in respect of these
claims in each instance in virtually identical fashion. A copy
of Genesis’ response
to one of the complaints has been annexed
to the answering affidavit. It is referred to by the
Respondents as a “
dissertation
”
and I agree: the response in small font runs to some 53 pages.
8.7 Genesis’ attitude to the SCA
judgment as set out in the response is that it disagrees with the SCA
judgment insofar as
the judgment obliges Genesis to enter into an
agreement with public sector healthcare providers as its current
selected DSP’s.
Despite Genesis’ arguments as to
why this is so, their attitude clearly conflicts with the SCA
judgment and in particular
paragraph [44] thereof as quoted above.
8.8 Genesis’ attitude regarding
its own rules and the amendments thereto are itself either
contradictory or at the least confusing.
In its principal
argument in the application in the urgent court it relied on the
refusal of its rule amendment still being subject
to an appeal
process whilst in its later argument it submitted that it did not
even need to have its rules amended.
8.9 Genesis’ attitude that it
need not have done anything more than select all public and state
hospitals as its DSP’s,
and that it is entitled to do so
irrespective of the views of the Respondents or those expressed in
the SCA judgment is further
apparent from its own statements in the
aforesaid “
dissertation”
,
extracts of which are the following:
8.9.1 “
Members
of medical schemes are entitled to certainty and in this regard they
cannot be left in doubt as to whether the terms of
their contract are
set out in the Act, the Rules or a combination of both. Such a
situation would be absurd as members would
never be able to easily
identify when the Act applied or when the Rules applied
”
(this statement was made with reference to the SCA judgment in
Sechaba Medical Solutions
and Others v William Sekete and Others
(216/2014)
[2015] ZASCA 8).
8.9.2 “
The
intention of the lawmakers is clear: Members are only entitled
to the benefits contained in the Rules and to the extent
provided in
the Rules. As will be submitted later in this answer,
legitimate benefits must be reimbursed in full to the limits
provided
in the Rules and nothing more.
”
8.9.3 In dealing with paragraph [38]
of the SCA judgment:
“
With respect to the court,
Section 29(1)(o) read with Regulation 8 to the Act does not make any
mention of a medical scheme being
obliged to bear the cost of
treatment only in the public sector. This obligation is clearly
and expressly provided for at
Section 29(1)(p) of the Act.
Moreover, the provisions of Section 29(1)(q) of the Act similarly
express clear provisions for
the reimbursement of ANY benefit (and
this must sensibly include PMB) according to a scale or tariff.
It is just not reasonable
for the court to completely ignore the
clear intention of the lawmakers in regard to the liability of
medical schemes to reimburse
the claims of members.
”
8.9.4 “
Having
regard to what is set above, the issue of Regulation 8 having any
bearing on this matter is laid to rest: the SCA has
ruled
decidedly on the issue. The dictum in
Moodley
as confirmed by the SCA in its most recent judgment, makes it clear
that the Act trumps the Regulations and the Regulations cannot
be
used to interpret the Act. Moreover, the SCA in
Joubert
did not at any time overturn the dicta in either
Secahaba
or
Omnihealth
.
The provisions of the Act trump the Regulations and the Act provides
that members are entitled to the reimbursement of claims
to the
limits prescribes by the Rules. The SCA in
Joubert
did not state that Genesis must pay the account of the providers:
in fact the entire matter before the court was whether
Genesis was
entitled to refuse to pay for an external prosthesis. The issue
of Regulation 8 was not before the court and
so the judge’s
remarks were at best obiter.
”
8.10 Whilst Genesis is correct that
the SCA judgment did not expressly deal with the issue as to whether
the selection of public
sector healthcare providers would circumvent
the intention of the legislature and also did not expressly have to
deal with the
issue of whether a mere selection of a DSP without an
agreement with it would suffice or satisfy the intention of the
legislature,
the implication of the SCA judgment even if only
expressed in
obiter
fashion, is clearly an expression on the state of the law which is
not shared by Genesis. The statements published by the
First
Respondent as summarised in paragraphs 2.1, 2.2, 2.3 and 2.4 of the
notice of motion (with the exclusion of the allegation
of
non-compliance with Genesis’ own scheme rules) are therefore
factually correct: Genesis, both expressly and by conduct,
disagrees with the SCA judgment and in particular the
proviso
stated in paragraph [44] thereof.
8.11 The statement that members of
Genesis have been left financially exposed and may in future still be
financially exposed regarding
payment of PMB treatment in private
hospitals by Genesis is therefore also correct.
8.12 The publications were therefore
true and in the public interest.
8.13 Even if I am wrong in the
abovementioned assessment and even if Genesis’ arguments in
their present application and as
set out in their “
dissertation
”
to the CMS pertaining to the complaints might in future prevail, then
it is clear that the Respondents had the duty to inform
members of
the public who are or may become members or beneficiaries of Genesis
as to what extent they are or may be exposed financially
in respect
of the funding of PMB conditions. The publications were also
made on the CMS website and therefore published for
access to brokers
in medical aid services or members of the public who had a specific
interest in such matters. Clearly such
persons had a duty or
right to receive information regarding the conduct of a certain
medical scheme or the manner in which it
applies its rules. The
test of whether the defence of a qualified privilege has been met is
an objective one to be judged
by the standard of the reasonable
person having regard to the relationship between the parties and the
surrounding circumstances.
I find that this test has been met
by the Respondents. See
Van
der Berg v Coopers & Lybrand Trust (Pty) Ltd
2001(2) SA 242 (SCA).
8.14 In addition to the above defence,
the Respondents denied having published the statements with the
intent to defame Genesis.
The answering affidavit deposed to on
behalf of the First Respondent has been made by the Acting Registrar
as Acting Chief Executive
of CMS. In it he more than once
expressly denies any malice or intention to defame. Despite
criticism levelled against
him by Genesis regarding a press statement
and an incorrect reference therein to having “
summonsed
”
Genesis to a meeting, the fact is that a meeting had been called for
between him and Genesis which never took place.
Genesis also
argued that the court should not accept the
ipse
dixit
of the Respondents
regarding their denial of intention to defame. If one has
regard however to the manner in which the statements
were published,
the tenor of the article as quoted above and the fact that the
Respondents have escalated the complaints regarding
Genesis’
conduct to its Compliance and Investigation Unit and Legal Services
Department and the manner in which the Respondents
have dealt with
the issue, the facts clearly paint more a picture of concern for
members of the public and compliance with statutory
provisions than a
picture of malice. On a balance of probabilities I find that
the presumption of publication
animo
iniuriandi
has sufficiently
been refuted by the Respondents.
[9]
SUMMARY
:
Upon
a
conspectus
of all the allegations set out in the various affidavits delivered
together with the arguments presented, both orally and in writing
I
conclude as follows:
9.1 Genesis contends that its
selection of public health services providers as its DSP’s in
respect of PMB expenses (without
any specific agreements with such
DSP’s) is perfectly valid and not in conflict with the SCA
judgment. It further contends
that it need not have applied for
an amendment of its rules, despite having done so.
9.2 The statements published by the
Respondents to the effect that the above conduct of Genesis is in
conflict with the law as expressed
in the SCA judgment are not
defamatory as they are either true and in the public interest
alternatively
were made without malice by the Respondents who had a duty to make
users or prospective users of Genesis’ products aware
of
Genesis’ position, stance and conduct.
9.3 Genesis has therefore failed to
establish either a clear right entitling it to a final interdict or
even a
prima facie
right entitling it to a temporary interdict and neither has it
satisfied the other requirements for such an interdict. Even
if
the requirements of an interim interdict had been established, I
find, on the facts and circumstances as set out above, that
this is a
proper case where the court’s discretion should be exercised in
favour of the Respondents.
[10]
Apart from the considerations that costs should generally follow the
success of a matter, I also took into account the following
time-line
regarding the issue of reserved costs:
10.1 23 January 2017
– Genesis says it became aware of the publication of the
article referred to above.
10.2 25 January 2017
– Genesis sent a letter of demand to the Respondents.
10.3 27 January 2017
– The deadline stated in the letter of demand.
10.4 31 January 2017
– Genesis instructs is legal team to prepare papers.
10.5 3 February 2017
– Genesis’ papers were “
ready for service
”.
10.6 10 February
2017 – Genesis became aware of the publication of the
PowerPoint presentation made at the
end of 2016.
10.7 14 February
2017 – The urgent application is launched.
10.8 16 February
2017 – The Respondents are required to indicate their
opposition.
10.9 20 February
2017 – The Respondents were required to deliver their answering
affidavits.
10.10 24 February 2017 –
The Respondents delivered their answering affidavits.
10.11 28 February 2017 –
The matter was removed from the roll and costs were reserved.
10.12 3 March 2017 – The
replying affidavits were delivered.
Despite
Genesis’ protestations to the contrary, it appears that Genesis
had chosen to litigate at a far more leisurely pace
than that which
it afforded the Respondents and this was the primary reason for the
papers not having been timeously ready and
the matter having been
removed from the previous urgent roll and costs having been
reserved. I find no reason why these costs
should not also
follow the event.
[11]
ORDER
:
In
the premises the following order is made:
1. The application is dismissed with
costs, including the costs attendant upon the employment of both
senior and junior counsel.
________________________
N
DAVIS
ACTING
JUDGE OF THE HIGH COURT
Date
of hearing:
16 March 2016
Judgment
delivered:
27 March 2016
Counsel
for Applicant:
W Luderitz SC
C T Vetter
Attorneys
for Applicant:
Clyde &
Company
c/o Weavind & Weavind Attorneys
Counsel
for Respondents:
M Maritz SC
A J Lapan
Attorneys
for Respondents:
Norton Rose Fullbright SA Inc.
c/o MacIntosh Cross & Farquharson
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
DIVISION, PRETORIA
CASE
NO: 10387/2017
In
the matter between:
GENESIS
MEDICAL
SCHEME
Applicant
and
THE
COUNCIL FOR MEDICAL
SCHEMES
1
st
Respondent
THE
REGISTRAR OF MEDICAL
SCHEMES
2
nd
Respondent
SUPPLEMENTARY
ORDER
DAVIS,
AJ:
In
terms of Rule 42 the court
mero
motu
adds the following to
the order granted on 28 March 2017:
“…
including the costs
reserved on 2 March 2017.”
________________________
N
DAVIS
ACTING
JUDGE OF THE HIGH COURT
Date
of hearing:
16 March 2016
Judgment
delivered:
27 March 2016
Counsel
for Applicant:
W Luderitz
SC
C T Vetter
Attorneys
for Applicant:
Clyde & Company
c/o Weavind & Weavind Attorneys
Counsel
for Respondents:
M Maritz SC
A J Lapan
Attorneys
for Respondents:
Norton Rose Fullbright SA Inc.
c/o MacIntosh Cross & Farquharson