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[2014] ZAGPPHC 454
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Medihelp Medical Scheme v Minister of Finance (52269/2012) [2014] ZAGPPHC 454 (28 March 2014)
IN
THE NORTH GAUTENG HIGH COURT, PRETORIA
(
REPUBLIC
OF SOUTH AFRICA
)
CASE NO:
52269/2012
DATE: 28/3/2014
In
the matter between:
MEDIHELP
MEDICAL
SCHEME
............................................................................................
Plaintiff
and
MINISTER
OF
FINANCE
.......................................................................................................
Defendant
JUDGMENT
MAKHUBELE
AJ
INTRODUCTION
[1]
Plaintiff issued summons against the defendant during September 2012
for payment of an amount of R9 997. 75 , being what it
referred to as
deductions made by the latter from its monthly subscriptions payments
of “
94
affected civil servants listed in Annexure “MH3” in
respect of past subscriptions paid”
[1]
Since
service of summons on the defendant, the plea filed by the latter has
been amended at least twice. Plaintiff objected to a
third attempt
that forms the subject matter of this judgment.
It
is necessary to set out the chronological order of the notices
exchanged between the parties because it will certainly have a
bearing on the question of defendant’s bona fides in seeking
the latest amendment as well as costs.
[2]
Plaintiff had excepted to defendant’s plea as
amended and the matter was on the verge of being set down for
hearing
when defendant, on the eve of filing heads of argument instead filed
a notice to amend the plea in question. I will revert
to this later
in the judgment.
When
the parties appeared before me, there were two applications, (a) the
exception and (b) leave to amend the plea. I enquired
from Mr Jacobs
who appeared on behalf of the plaintiff whether plaintiff persists
with the exception in view of the application
for amendment. Having
perused the record, I was of the view that the previous amendments as
well as the leave being sought for
yet another were brought about by
a concession of the merits of the notices to remove the causes of
complaint. The answer to my
question was an emphatic yes,
the exception must be argued first.
Mr
Jacobs referred me to page 251 of the record
[2]
.
In paragraph 3. 1 thereof, Mr.
Stephen
Kete Ralekwa
stated that “
I
do not understand nor accept that the applicant has conceded any
grounds for the exception”.
[3]
This assertion by deponent on behalf of the defendant is in my
view opportunistic because on the same breath, and when
convenient to
do so, the following allegations are also made:
“
5.2
I point out that the Applicant inadvertently based its initial plea
on an incorrect statute and the Rules of Medihelp which
were no
longer in force. This became apparent when further consultations were
held with the personnel in treasury responsible for
the
administration of the agreement.
5.3
The proposed amendment raises points of law of sufficient Importance
to a claim of a substantial amount. The previous rules
of the
Respondent’s Medical Scheme offerred different bases of
termination of membership and it was also per the instructions
given
to the legal representatives that there was a process undertaken by
the parties in administering the agreement”
The
reason why I say the asserions by Mr. Ralekwa are opportunistic is
because Plaintiff has contended in the various notices directed
at
defendant to remove cause of complaint that the agreement between
government and the affected employees was subject
to
current law. Defendant was challenged on the lawfulness of its
defences on the basis of the Medical Scheme Act, as amended,
a fact
defendant only acknowledged in the replying affidavit.
[4]
Although there is no concession that the exception did have some
merit, at least in as far as the law is concerned, by its own
admission, defendant’s plea was based on earlier versions of
the Medical Scheme Act and Regulations.
[5]
I agree with Mr. Semenya who appeared for the defendant that the
correct approach is to look at the proposed amendment,
and if it is
good, to grant the application to amend. I may also add that if
I dismiss the application, the correct order
will be to afford the
defendant an opportunity to amend its plea.
[6]
One of the factors to be taken into account when considering an
application for amendment is whether the proposed amendments
will
render the plea excipiable. It stands to reason that I should not
consider the grounds of exception levelled at the plea that
is sought
to be amended because doing so would be an academic exercise.
Questions
of excipiability are relevant though , but only with regard to
the proposed amendment . If the same issues arise,
then they are
worthy of consideration to determine whether the proposed plea will
be excipiable.
In the matter of Du
Plessis
and another v De Klerk and others
[3]
Van Dijkhorst J set out the position as follows:
“
An
amendment which would render a pleading excipiable should not be
allowed. Whether a pleading would or would not become excipiable
is a
matter of law which should be decided by the Court hearing the
application for amendment. It would be incorrect, in my view,
to hold
that it is arguable that the amendment would not render the pleading
excipiable, allow it, and send the parties away to
prepare for
another battle on exception on the same point”.
THE
PARTICULARS OF CLAIM AND THE PLEA DATED 03 DECEMBER 2012 ,AS AMENDED
[
7]
I deem it necessary to reproduce the relevant portions
simply because one of the objections to the proposed amendment
is
that it seeks a withdrawal of an admission in the earlier plea.
[8]
The relevant and material portion of the particulars of claim are:
“
1.
The plaintiff is Medihelp Medical Scheme, a medical scheme registered
in terms of the
Medical Schemes Act 131 of 1998
with head office at
84 Steve Biko Street, Arcadia, Pretoria.
2…….
3.
At all times material hereo and in terms of a collective agreemet
reached by the Chamber of Public Service Bargaining Council
at
Central Level on 04 November 1993 the South African Government as
employer on one side and number of em[loyee orgnisations
representing civil servants affected on the other, agreed on medical
assistance at retirement or terminationmof service of civil
servants
(“the agreement”). A copy of the Agreement is attached
hereto marked “MH1”.
4.
The Agreement was subject to applicable legislation and cnfirmed by a
resolution of the Public Service Co-ordinating Bargaining
Council
during 1999.
5.
In 2005 the defendant, represented by National Treasury, informed the
affected civil servants (and their survig spouses) of their
rights to
medical assistance at retirement or termination of service I terms of
the Agreement and in particular:
5.1 informed the
affected civil servants (and their surving spouses) of their right to
join any medical scheme as a member;
5.2 confirmed
that the State assumed responsibility for payment of subscriptions of
membership of affected civil servants (and their
surviving spouses)
to a medical scheme.
A
copy of the general notice (“the General Notice”) is
attached hereto as “MH2”
6.
In terms of the Agreement and the General Notice the affected civil
servants whose names are listed in column 3 of annexure “MH3”
attached hereto, informed the defendant and the plaintiff of their
choices to become and remain members of the plaintiff. The Medihelp
membership numbr of each affected civil servant appears in column 2
of annexure “MH3”.
7.
At all material times hereto the plaintiff was, as a registered
medical scheme, obliged to accept the affected civil servants
(and
their surviving spouses) as members with full benefits in terms of
the plain tiff’s rules until termination of their
membership
according to the plaintiff’s rules.
8. At all
materrial times hereto the defenda nt paid to the plaintiff the
membership ontributions of the affected civil servants
whose names
are listed in column 3 of annexure “MH3”.
9. The defendant,
despite the garnting by the plaintiff of membership to the affected
civil servants (and their surving spouses)
and in breach of its
obligations in terms of the Agreement and General Notice, deducted
from monthly subscription paments the total
sum of R9 997 256.75
being the subscriptions of the 94 affected civil servants listed in
Annexure “MH3” opposite the
name of an affected civil
servant.
10.
In the circumstances the defendant is indebted to the plaintiff in
the sum of R9 997 256.75 and interest on that sum at 15.5%
per annum
from the date of servic e of summons to date of payment”.
[9]
Defendant’s plea as amended
[4]
reads as follows:
1.
AD PARAGRAPH 1 TO 8
1.1 The Defendant
admits that the Plaintiff is a registered medical scheme in terms of
the Medical Schems Act, 131 of 1998.
1.2 The Defendant
has no knowledge of the head office of Plaintiff and cannot admit
same.
1.3 The remain
der of the allegations in these paragraphs are admitted.
2
.
AD PARAGRAPH 9
2.1. The
defendant admits that it deducted the amount of R 9 997 256. 75
being subscription of the 94 civil servants listed
in Annexure
“MH3” of the Plaintiff’s Particulars of Claim.
2.2. The
Defendant pleads further that in terms of the agreement
Annexure “MH 1” to the Plaintiff’s Particulars
of
Claim, the benefits of the civil servants listed in “MH 3”
to the Plaintiff’s Particulars of Claim were to
comply with the
terms of the Staff Code Chapter DXI/III of 1/12/1993 annexed hereto
marked “DEF 1”.
2.3.
The material terms of “DEF 1” are:
2.3.1. To
establish a basis according to which medical assistance can be
rendered to officers or employees who retire;
2.3.2. The
persons who qualify were employees who retire as a result of the
attainment of the normal retirement or pentionable
age as prescribed
by statute; ill-health which is not ascribed to their own doing;
employees who are 60 years or older –
whose services are
terminated by the employer as a result of abolition of their posts or
re-organisation, or to promote efficiency,
or to economise; who, at
own request, retire with the approval of the employer (but not a a
result of misconduct or incapacity)
or as a result to early
retirement; or who according to a decision by the employer and the
heads of department who retire, or their
surviving spouses.
2.3.3. The
benefits are also subject to the Rules of the Plaintiff applicable to
each particular member at the time of the
member’s
retirement.
2.3.4. At all
material times hereto, the Rules of the Plaintiff’s medical
scheme, and annexed hereto as “DEF 2”
which provide:
“
Rule
14 “ General Rules for Termination”
“
14(1)
No member for whom membership of MEDIHELP is a condition of service
in terms of an agreement between MEDIHELP and an employee
may, while
he remains in service resign without the consent of his employee or
be deprived of his membership without prior notification
to his
employer.
14(2) Subject to
the provisions of rule 14(1), membership of MEDIHELP shall terminate
-
14(2)(a)
at death;
14(2)(b)
…
14(2)(c)
…
14(2)(d) when a
pensioner – or widow member or a person who in terms of rule 6
enjoys continued membership resides outside
the borders of the
Republic for a period of longer than six months, excluding such
member who settled in the Republic of Namibia
before 21 March 1990:
Provided that the MEDIHELP, in its discretion, may approve of such
member retaining his membership if he
, prior to or within six months
advices MEDIHELP in writing of the visit abroad and the purpose
thereof and MEDIHELP satisfied
that he does not intend staying abroad
for an indefinite period.
14(2)(e) …
14(2)(f) When a
member no longer qualifies for the membership in terms of the Rules:”
2.4. The
defendant pleads further that it is the responsibility of Plaintiff
as a registered medical aid scheme, to ensure that
its database is
updated and correctly reflects the status of its members and also
advice the Defendant with names of individuals
whose membership has
terminated.
2.5.
Notwithstanding the aforesaid, Plaintiff failed, alternatively
neglected to ensure that its database is up to date and
remain
so, correctly reflecting inter alia, deceased members, members living
abroad for more than 6 months, student dependants
and remarried
widows.
2.6. The members
listed in Annexure “MH 3” to the Plaintiff’s
Particulars of Claim were out of the country for
more than 6 months,
alternatively deceased and their membership was accordingly
terminated.
2.7. The
Defendant continued to pay contributions to the Plaintiff in respect
of the members listed in “MH 3”
after the
termination of membership.
2.8. The
contributions of the members were paid to the plaintiff in terms of a
process of more than twenty years duration, practiced
by both parties
that the Plaintiff would submit a monthly spreadsheet indicating that
the amount payable for that month, and the
Defendant would deduct
from the total mount, any amounts Defendants had already paid to the
Plaintiff in respect of members whose
membership had terminated.
2.9. Save for
the aforegoing, the Defendant denies the remainder of the allegations
in this paragraph.
3.
AD PARAGRAPH 10
3.1
The allegations made in this paragraph are denied.
[10]
Plaintiff had earlier on ( before the March 2013 amendment ) and on
28 January 2013, given
defendant Notice in terms of Rules 30(2)(b), 30A and 23(1) that it
intended to take exception that
the latter’s plea dated 3
December 2012 was vague and embarassing and that it “
does
not comply with the provisions of Uniform Rule of Court 18(4) and
18(6) and thus constitutes an irregular step in terms of
Rule
18(12”).
Defendant
served a notice of amendment on 21 February 2013 in terms of which it
intended to delete and replace paragraph 2.8
of its plea. Plaintiff
wrote a letter to defendant and indicated that it would not object to
the proposed amendment.
[11]
On 27 March 2013, Plaintiff issued a Notice in terms of Rules 23(1)
and (2) in terms of which it indicated its intention to
take
exception to defendant’s plea dated 03 December 2012 as amended
on 11 March 2013 on the basis that it is vague and embarassing
alternatively , that it lacks averments which are necessary to
sustain a defence.
[12]
It is not necessary, for reasons stated above to go into the grounds
for the exception because of the approach I have adopted,
i.e to look
at the amendment, and if it good in law, to grant the application or
to refuse if it is not. Issues of excipiability
will only arise with
regard to the proposed amendment.
[13]
Defendant filed yet another notice of intention to amend its plea on
15 April 2013. Plaintiff objected to the propsed second
amendment by
notice dated 29 April 2013 on the basis that it does not remedy the
fatal defects rendering the Defendant’s
Plea excipiable on the
grounds set out in the Plaintiff’s Notice of Exception dated 27
March 2013.
[14]
It is necessary to reproduce the grounds of objection because they
appear to confirm defendant’s assertion in the replying
affidavit in support for application for leave to amend that
“
Applicant inadvertently based its
initial plea on an incorrect statute and the Rules of Medihelp which
were no longer in force.
This became apparent when further
consultations were held with the personnel in treasury responsible
for the administration of
the agreement”.
[15]
In paragraphs 1.1 and 1.2 of the notice of objection, plaintiff
stated the following:
“
1.1
the proposed amendment intends to introduce obligations imposed by
law on the Plaintiff to terminate the membership of the persons
listed in Annexure “MH3” to the Plaintiff’s
particulars of claim on unlawful grounds in terms of the
Medical
Schemes Act of 1998
; and
1.2
the obligations alleged by the Defendant in his Plea and incorporated
in his proposed amendment contain obligations that if
performed would
constitute a contarvention of the
Medical Schemes Act of 1998
”
[16]
On 16 May 2013, the State Attorney addressed a letter to Plaintiff’s
attorneys and advised them , amongst other things
that his “
client
will not proceed with the intended amendment please be advised that
you may set the exception down for hearing”.
[17]
Plaintiff duly filed a Notice of exception to the defendant’s
plea with the amendments of 11 March 2013 on 18 June
2013 on the
basis that it
lacks averments which are
necessary to sustain a defence alternatively, that it is vague and
embarassing”
.
[18]
I am certain that by now plaintiff was confident that the exception
will finally be heard and that there was no longer going
to be
another attempt to amend. Plaintiff complied with the Practice
Directives by preparing heads of argument and filed its practice
note
on 01 July 2013.
[19]
The commedy of errors was not over yet. Defendant, instead of filing
its practice note, filed a third notice of amendment on
16 July 2013.
Plaintiff
filed an objection on 30 July 2013. The application to amend was duly
filed on 26 August 2013.
THE
PROPOSED AMENDMENT
[20]
The proposed amendment reads as follows:
“
KINDLY
TAKE NOTICE THAT
the defendant hereby
gives notice of it’s intention to amend its plea as follows: -
“
A.
By deleting the plea dated 03 December 2012 in its entirety and
substituting therefore the following:
(my
emphasis)
“
SPECIAL
PLEA
The defendant
raises the following Special Plea to plaintiff’s claim: -
1.
The Plaintiff relies on the
provisions of a collective agreement reached by the Chamber of Public
Service Bargaining Counsel at
Central Level on 04 November 2003, the
South African government as employer on the on hand and a number of
employee organizations
representing civil servants on the other
agreed on medical assistance at retirement or termination of service
of civil servants
(“the agreement”). A copy of the
agreement is attached to the Plaintiff’s particulars of claim
and is marked
“MH1”.
2.
The Plaintiff also relies on the
general notice, annexed to the Plaintiff’s particulars of claim
and marked annexure “
MH2”
wherein the National Treasury
informed the affected civil servants of their rights to medical
assistance at retirement or termination
of service in terms of that
agreement and in particular informed the affected civil servants of
their right to join any medical
scheme as a member and confirmed that
the State assumed responsibility for payment of subscriptions of
membership of the affected
civil servants to a medical scheme.
3.
The plaintiff is not a party to the
agreement annexure “
MH1”
in the circumstances, there
being no privity of contract between the Plaintiff and the Defendant,
the Plaintiff has no locus standi
to assert any rights or obligations
which attach to an agreement to which it is not a party.
WHEREFORE
Defendants prays that the
Plaintiff’s claim be dismissed with costs.
Should
the defendant’s special plea not be upheld, then in that event,
the Defendant pleads to the Plaintiff’s particulars
of claim as
follows
The
defendant pleads as follows to the Plaintiff’s Particulars of
Claim:
4.
AD PARAGRAPH 1 TO 8
4.1
The allegations made in these paragraphs are admitted.
4.2
The Defendant pleads further that the medical benefits provided by
the Plaintiff to the affected persons were, inter alia, subject
to
the Rules of Medihelp which inter alia provide as follows:
“
Death
of the Member
11.5
The membership of a deseased member shall terminate on the day
following the date of death.
“
Failure
to pay amounts due to Medihelp
11.6
If a member fails to pay subscription and/or any other amountdue to
Medihelp on the date on which it became due, Medihelp
shall notify
such member and participating employer thereof and inform the member
and/or participating employer if not settled
on the date indicated in
the letter, benefits shall be suspended in respect of claims
which arose during the period of default
and that membership may be
terminated if the arrears subsciption and/or amount due is not
remitted within thirty (30) days from
the date of suspension:
provided that the Principal Officer may, in his eclusive discresion,
determine the period that the period
in which the arrears
subscription and/or other amount due may be remitted and interest may
be charged at the prime rate of Medihelp’s
bankers.”
5.
The Defendant pleads further that in terms of the aforesaid Rule of
the Plaintiff, if a member fails to pay a subscription the
following
consequences or sequelae arise from such failure:
5.1
The Plaintiff must notify the member and the participating employer
of such failure
5.2
The Plaintiff must notify the member and the participating employer
that if the subscription amounts are not settled on the
date
indicated in the letter, benefits
shall
be suspended; in respect of claims which arose during that period of
such default;
5.3
The Plaintiff must notify the member and the participating employer
that if the subscription amounts are not settled, that membership
may
be terminated if the arrear subscription and/or amount due is not
remitted within thirty (30) days from the date of suspension;
and
5.4
With the proviso that he principal Officer has an exclusive
discretion to determine the period in which arrear subscriptions
and/or other amount due may be remitted and interest may be charged.
5.5
The subscriptions in respect of the 94 affected civil servants listed
in annexure “MH3” have been unpaid for
a period of
more than thirty (30) days.
5.6
The benefits of the affected members were, in terms of the
Plaintiff’s Rules, suspended thirty (30) days from the date
of
failure to pay the subscription.
5.7
The membership of the affected persons would be terminated unless the
arrear subscriptions are remitted within thirty (30) days
from the
date of suspension.
5.8
The arrear subscriptions of the affected member were not remitted
within thirty (30) days of the suspension of their benefits.
5.9
The membership of the affected members was, in terms of the Rules of
the Plaintiff, terminated.
6.
AD PARAGRAPH 9
6.1
The Defendant admits that he did not pay the subscriptions totaling
the amount of R9 997 256. 75 being the subscriptions of
the 94
affected civil servants listed in annexure “
MH3”.
6.2
Alternatively, since the membership of persons indicated in annexure
“
MH3”
of
the Plaintiff’s particulars of claim no longer qualified for
membership in terms of the Plaintiff’s Rules, the Defendant
paid the sum of R 9 997 256. 75 to the plaintiff in error.
6.3
The aforesaid sum of R 9 997 256. 75 was neither due nor owing to the
defendant since the membership of those persons indicated
in annexure
“
MH3”
had
terminated.
6.4
The Plaintiff was enriched unjustly by R 9 977 256. 75 at the expense
of the Defendant.
6.5
Save as aforesaid, the remainder of the allegations made in this
paragraph are denied.
7.
AD
PARAGRAPH 10
7.1
The allegations made in this paragraph are denied. “
OBJECTION
TO THE PROPOSED AMENDMENT
[21]
On 30 July 2013 plaintiff filed an objection to the proposed
amendment. It reads as follows:
TAKE
NOTICE
that he plaintiff objects
to the defendant’s proposed amendment dated 15 July 2013 on the
following grounds:
“
1.
PLAINTIFF’S FIRST
OBJECTION: AD “SPECIAL PLEA”:
1.1
In paragraphs 1 and 2 of his
proposed special plea the defendant avers that the plaintiff relies
on a collective agreement and the
general notice attached to the
plaintiff’s particulars of claim as
Annexure
“MH1” and “MH2”
respectively.
1.2The
Defendant admits in paragraph 1 of his plea the allegations contained
in paragraphs 1 and 8 of the plaintiff’s particulars
of claim,
which admission makes it common cause in these proceedings that “
At all times material hereto the defendant paid
to the plaintiff the
membership contributions of the affected civil servants whose names
are listed in column 3 of Annexure “MH3”.
1.3
The defendant’s plea and the
proposed amended plea further admit payments, the amounts of which
the defendant later deducted
from other payments to the plaintiff.
1.4
The defendant’s “SPECIAL
PLEA” which he intended to introduce by way of this third
proposed amendment would be
excipiable on the grounds that the plea
would be vague and embarrassing in that:
1.4.1
The “SPECIAL PLEAS” does
not deal with and contain no reference to the factual averments in
paragraph 9 and 10 of the
plaintiff’s particulars of claim
which factual averments, if ignored in the defendant’s
amendment, clearly shows standing
in law for the relief sought by the
plaintiff;
1.4.2
The locus in iudicio of the
plaintiff is apparent from the admission referred to in 1.2 above and
the content of the plaintiff’s
particulars of claim read with
the body of the defendant’s proposed amended plea;
and
1.4.3
No basis is laid in the body of the
defendant’s proposed amended pleas for the defence purportedly
raised by the “SPECIAL
PLEA” and the “ SPECIAL
PLEA” contradicts the body of the defendant’s proposed
amended plea rendering it
vague and embarrassing and, therefore,
excipiable.
1.5
Under the circumstances the
defendant’s “SPECIAL PLEA” would, if allowed to be
introduces by the proposed amendment
render the pleas vague and
embarrassing and, therefore, excipiable.
2.
PLAINTIFF’S SECOND
OBJECTION TO THE PROPOSED AMENDMENT:
The
Defendant’s “SPECIAL PLEA” is declinatory in nature
and should have been raised in
initio
litis
and any defect that might have
existed in the plaintiff’s particulars of claim is regarded as
condoned by the defendant and
can only be effected after full
explanation on oath of withdrawal of such condonation.
3.
PLAINTIFF’S THIRD OBJECTION
TO THE PROPOSED AMENDMENT:
3.1
In his initial plea and in his
amended plea brought about by the first and second amendments, the
defendant makes the following
admissions:
“
The
Defendant admits that it deducted the amount of
R
997 256. 75
being the
subscriptions of 94 affected civil servants listed in Annexure
“MH3” of the Plaintiff’s Particulars
of Claim.”
3.2.
This admission is made by the defendant in answer to an express
allegation in paragraph 9 of the plaintiff’s particulars
of
claim that the deductions were made in respect of past subscriptions
paid by the defendant to the plaintiff.
3.3. The proposed
amendment, therefore, provides for the withdrawal of an admission in
that it introduces in paragraph 6.1 thereof
a denial of the deduction
previously admitted by the defendant.
3.4.
The plaintiff, therefore, objects to the proposed third amendment on
the ground that it contains the withdrawal of and admission
without
satisfactory explanation thereof.
4.
FOURTH GROUND OF OBJECTION TO THE
PROPOSED AMENDMENT:
4.1.
In paragraph 4.2 of the defendant’s proposed amended pleas he
relies on the extract from the plaintiff’s rules
providing for
failure by “a member” to pay “subscriptions and/or
other amounts due to Medihelp”.
4.2.
The obligation of “a member” to pay the subscriptions is
repeated in paragraph 5 of the proposed amended pleas.
4.3.
Reliance on the alleged obligation of “a member” to pay
subscriptions, flies in the face of the admitted obligations,
alleged
in paragraph 5 and 8 of the plaintiff’s particulars of claim to
the effect that the obligation to pay the subscriptions
was that of
the defendant as functionary of the Sate and not that of “a
member”.
4.4.
These contradicting allegations sought to be introduced by the
proposed amendment renders the plea vague and embarrassing and,
therefore, excipiable on that ground.
5.
FIFTH GROUND OF OBJECTION TO
THE PROPOSED AMENDMENT:
5.1
in paragraph 5.1 and 5.2 of the proposed third amendment the
defendant attempts to introduce obligations of and concerning “a
particular employer” into his plea.
5.2
The term “participating employer” is a term defined in
the plaintiff’s rules and quoted out of context in
the
defendant’s plea. A true copy of the plaintiff’s rules
quoted from by the defendant is attached hereto for ease
of reference
as “MH4”.
5.3
Rule 5
of the plaintiff’s rules read with the
Medical Schemes
Act, 1998
, the term “participating employer” to mean “an
employer who has contracted with Medihelp for the purposes of
admissions of its employees as members of Medihelp.
5.4
The defendant does not allege any contractual relationship of any
nature between the plaintiff and the defendant and the Supreme
Court
of Appeal has ruled that no such agreement existed since July 2005.
5.5
In the absence of an allegation that complies with the Rules of Court
that a “contract” provided for in the plaintiff’s
rules had been concluded between the plaintiff and the defendant,
none of the obligations alleged in paragraph 5 of the defendant’s
proposed amended plea exists in law.
5.6
In the premises the plaintiff objects to the proposed amendment on
the ground that that, if effected, it would render the defendant’s
plea excipiable as vague and embarrassing, alternatively that the
amendment would cause the amended pleas to fall foul of the
provisions of
Rule 22(2)
in that it does not clearly and concisely
state all the material facts upon which the defendant relies.
6.
THE SIXTH GROUND OF OBJECTION TO
THE PROPOSED AMENDMENT
6.1
In paragraph 6.2 to 6.5 of the defendant’s proposed amended
plea he alleges an unliquidated claim based on unjust enrichment
without counterclaiming.
6.2
In law existence of enrichment is judged at the time of institution
of action, or, as in this instance, at the time the amendment
introducing the enrichment claim is effected.
6.3
The defendant’s plea is, therefore, for an unliquidated amount
based on unjust enrichment, which may only be claimed in
reconvention.
6.4
In the premises the defendant’s proposed amended pleas would
not disclose a defence and would be bad in law and, therefore,
excipiable on that basis.
APPLICATION
FOR LEAVE TO AMEND THE PLEA
[22]
The application in terms of
Rule 28(4)
was filed on or about 27
August 2013.
[23]
In its affidavit, defendant attacked the plaintiff’s grounds of
objection but did not, itself offer any tangible explanation
as it is
required to for the amendment at this stage save to make some
conclusions of law without laying a proper factual basis.
In
paragraphs 19 of the affidavit the following allegations are made:
“
19.
I submit that the proposed amendment is made bona fide and that the
amendment does not cause any injustice or prejudice to the
other side
which cannot be compensated by costs or a postponement. I further
submit that prima facie there is a triable issue deserving
of
consideration and the amendment is not mala fide.”
[24]
The explanation for introduction of the proposed plea only came out
in the replying affidavit
[5]
. I
will deal with it later.
Plaintiff
in its answering affidavit repeated the grounds of objection.
It also challenged the defendant that it had
conceded the
exception and that the amendment would be a withdrawal of earlier
admissions in the plea sought to be amended.
[25]
The explanation offered for the amendment is briefly that:
(a)
The plaintiff’s representatives only realized that there are
points of law that should be raised as a defence after
consultation with personnel responsible for administration of the
agreement.
(b)
The plea filed was founded on the law before its amendment as well as
the prior Rules of Medihelp. Plaintiff conceded that this
was an
error because the Act and Rules have since been amended.
SUBMISSIONS
[26]
In their heads of argument, counsel for the defendant describe the
application for amendment as seeking to raise (a) a special
plea
contending that plaintiff does not have locus standi to enforce any
rights or perform any obligations in terms of the agreement
between
the state and and public service employees because it was not party
thereto , and (b) Plaintiff’s remedy in the event
of non
payment of subscriptions is cancellation of membership. Plaintiff has
no right to seek payment of contributions.
[27]
In his oral submission, Mr. Semenya argued that the admissions made
in the plea do not create a legal relationship between
plaintiff and
the defendant. The affected members would have a right to litigate
against defendant if there is a breach of the
agreement referred to
in the particulars of claim. It is not clear, so the argument went,
whether the plaintiff’s right to
litigate is derived from
contract or delict. Allegations that the special plea is declinatory
in nature have nothing to do with
the locus standi of plaintiff.
[28]
Mr Semenya argued further with regard to the plea-over that:
(a)
Allegations that defendant withdrew its earlier admission payment of
the amount in question. According to him, the alegations
in the
proposed amendment are still an admission that the money was not
paid.
(b)
The SCA did not resolve the issue of locus standi. An affected member
was party to SCA proceedings with plaintiff.
(c)
Reference to “participating member” in the proposed
amendment is not an issue.
(d)
Defendant does not have to allege any contractual relationship
between the parties.
(e)
The existence of a counterclaim is irrelevant.
(f)
There is nothing in the proposed amendment that is likely to create
an embarasment or vagueness. The plea introduces two defences;
namely, locus standi and that the payment was made in error because
it was not due for one or other reason in terms of the Rules
of the
Medihelp Medical Scheme.
[29]
Mr Jacobs also filed heads of argument on the proposed amendment. In
essence, the objection to the proposed amendment is premised
on :
(a)
the allegation that defendant cannot raise a special plea challenging
plaintiff’s locus standi when it has admitted certain
averments
in the particulars of claim such as the existence of the agreement
between government and the affected employees and
that the former has
been making monthly contributions on behalf of the latter. This, so
the argument goes renders the special plea
vague and embarassing.
(b)
The averment in the proposed amendment that defendant did not pay the
contributions amounts to a withdrawal of an earlier admission
that it
deducted the amount in question.
(c)
Reliance on obligations of plaintiff in terms of the Rules of the
Medical Scheme renders the plea vague and embarrasing
because
defendant had admitted that the state had an obligation to pay
subscriptions.
LEGAL
PRINCIPLES ON AMENDMENTS OF PLEDINGS
[30]
I am grateful to both counsel for their heads of
argument. The cases referred to therein were of great assistance
to
the court. I may not be too pleased with the manner in which
plaintiff prepared its initial plea and even more surprised
why
its legal team failed or took so long to realize what the real issues
are or even pertubed by relienace on old versions of
the Medical
Sches Act and Regulations.
[30.1]
The point is, I cannot ignore the rights of a litigant to have
his/its case properly ventilated and on the basis of correct
facts
and the law.
As
Wessels J put it in the matter of
Whittaker
v Roos and another; Morant v Roos and anothe
r
1911 TPD 1092
, 1102
:
“
'This
Court has the greatest latitude in granting amendments, and it is
very necessary that it should have. The object of the Court
is to do
justice between the parties. It is not a game we are playing, in
which, if some mistake is made, the forfeit is claimed.
We are here
for the purpose of seeing that we have a true account of what
actually took place, and we are not going to give a decision
upon
what we know to be wrong facts. It is presumed that when a defendant
pleads to a declaration he knows what he is doing, and
that, when
there is a certain allegation in the declaration, he knows that he
ought to deny it, and that, if he does not do so,
he is taken to
admit it. But we all know, at the same time, that mistakes are made
in pleadings, and it would be a very grave injustice,
if for a slip
of the pen, or error of judgment, or the misreading of a paragraph in
pleadings by counsel, litigants were to be
mulcted in heavy costs.
That would be a gross scandal. Therefore, the Court will not look to
technicalities, but will see what
the real position is between the
parties.'
[30.2]
It
would also be an injustice to refuse an amendment where it is clear
that there has been a mistake or neglect in the manner in
which the
plea sought to be amended was prepared. There must be justice between
the parties.
[6]
“
These
observations, in all four Provinces, make it clear, I consider, that
the aim should be to do justice between the parties by
deciding the
real issues between them. The mistake or neglect of one of them in
the process of placing the issues on record is
not to stand in the
way of this; his punishment is in his being mulcted in the wasted
costs. The amendment will be refused only
if to allow it would cause
prejudice to the other party not remediable by an order for costs
and, where appropriate, a postponement.
It is only in this relation,
it seems to me, that the applicant for the amendment is required to
show it is bona fide and to explain
any delay there may have been in
making the application, for he must show that his opponent will not
suffer prejudice in the sense
I have indicated. He does not come as a
suppliant, cap in hand, seeking mercy for his mistake or neglect.
Having already made his
case in his pleading, if he wishes to change
or add to this, he must explain the reason and show prima facie that
he has something
deserving of consideration, a triable issue; he
cannot be allowed to harass his opponent by an amendment which has no
foundation.
He cannot place on the record an issue for which he has
no supporting evidence, where evidence is required, or, save perhaps
in
exceptional circumstances, introduce an amendment which would make
the pleading excipiable … or deliberately refrain until
a late
stage from bringing forward his amendment with the purpose of
catching his opponent unawares … or of obtaining a
tactical
advantage or of avoiding a special order as to costs.’
[31]
Firstly, I do not believe that the proposed amendment is being made
mala fide. It is clear from the history of the notices
set out in
this affidavit that defendant’s case was not properly pleaded,
hence an admission that the representatives only
became aware that
the law has changed at a later stage. I cannot see how this
would prejudice the plaintiff. Defendant is
entitled to raise a new
ground of defence that comes to its knowledge after filing of its
plea.
[7]
[
32]
I do not agree with plaintiff that the proposed amendment seeks to
withdraw earlier admissions made in the plea filed. It is
a fact that
the agreement between Government and the affected employees exist in
terms of which the latter is obliged to make contributions
to medical
schemes . Admitting this fact does not amount to admission of legal
standing for third parties who are not party to
the agreement to
enforce any rights arising from the agreement.
[32.1]
Equally, an assertion that payments were not made in the proposed
amendment is not a withdrawal of an admission that deductions
were
made. If anything, the allegations in the particulars of claim in
this regard were not elegantly put.
[32.2]
The fact of the matter is that defendant paid the contriibutions and
at some point paid less that what it had been paying.
The issues
arising from this are a matter of evidence.
[32.3]
Consequently, I am not prepared to treat it as a withdrawal of an
admission.
[33]
On the question of locus standi, legal precedents are clear
that this cannot be decided at exception stage. In any event,
the
allegation is that defendant has condoned it because of the
admissions in the plea. I have already addfessed this point. It
is
trite that lack of locus standi is a defence in law.
[34]
in
Commercial
Union Assurance Co Ltd v Waymark NO
1995 (2) SA 73
(TkGD
)
At 77F-I
White J, examined old
authorities that dealt with the principles of amendment of pleadings
.
The learned judge summarized them as
follows:
1.
The Court has a discretion whether to grant or refuse an amendment.
2.
An amendment cannot be granted for the mere asking; some explanation
must be offered therefor.
3.
The applicant must show that prima facie the amendment 'has something
deserving of consideration, a triable issue'.
4.
The modern tendency lies in favour of an amendment if such
'facilitates the proper ventilation of the dispute between the
parties'.
5.
The party seeking the amendment must not be mala fide.
6.
The amendment must not 'cause an injustice to the other side which
cannot be compensated by costs'.
7.
The amendment should not be refused simply to punish the applicant
for neglect.
8.
A mere loss of (the opportunity of gaining) time is no reason, in
itself, for refusing the application.
9.
If the amendment is not sought timeously, some reason must be given
for the delay.
VAGUE
AND EMBARASSING
[35]
Rule
18(4) of the Uniform Rules of Court provides as follows:
"Every
pleading shall contain a clear and concise statement of the material
facts upon which the pleader relies for his claim,
defence or answer
to any pleading, as the case may be, with sufficient particularity
[8]
to enable the opposite party to reply thereto."
[36]
Ambiguity on its own is not sufficient. There must be evidence that
the opposing party will be seriously prejudiced
if the relevant
portions in the declaration are allowed to stand. The vagueness must
relate to the cause of action
[9]
[37]
In the Trope case
[10]
,
Macreath J considered the meaning of “vague and embarrassing”
in the context of exceptions and the nature of the enquiry
that the
court should undertake.
“
No
doubt, the absence of the opportunity to clarify an ambiguity or cure
an apparent inconsistency, by way of further particulars,
may
encourage greater particularity in the initial pleading.
The
ultimate test, however, must in my view still be whether the pleading
complies with the general rule enunciated in Rule 18(4)
and the
principles laid down in our existing case law.
An
exception to a pleading on the ground that it is vague and
embarrassing involves a two-fold consideration. The first is whether
the pleading lacks particularity to the extent that it is vague. The
second is whether the vagueness causes embarrassment of such
a nature
that the Excipient is prejudiced (Quinlan v MacGregor
1960 (4) SA 383
(D) at 393E-H). As to whether there is prejudice, the ability of the
Excipient to produce an exception-proof plea is not the only,
nor
indeed the most important, test - see the remarks of Conradie J in
Levitan v Newhaven Holiday Enterprises CC
1991 (2) SA 297
(C) at 298G-H. If that were the only test, the object of pleadings to
enable parties to come to trial prepared to meet each other's
case
and not be taken by surprise may well be defeated.
Thus
it may be possible to plead to particulars of claim which can be read
in any one of a number of ways by simply denying the
allegations
made; likewise to a pleading which leaves one guessing as to its
actual meaning. Yet there can be no doubt that such
a pleading is
excipiable as being vague and embarrassing - see Parow Lands (Pty)
Ltd v Schneider
1952 (1) SA 150
(SWA) at 152F-G and the authorities there cited.
It
follows that averments in the pleading which are contradictory and
which are not pleaded in the alternative are patently vague
and
embarrassing; one can but be left guessing as to the actual meaning
(if any) conveyed by the pleading.”
CONCLUSION
[38]
I have already made a finding that the application to amend the plea
was made in good faith . The intention, as it appears
from the
expanation, which plaintiff did not dispute, is to introduce defences
that were not apparent to the defendant at the time
the plea was
prepared.
There
is no apparent prejudice to the plaintiff. The pleadings have not
closed.
[39]
The defences raised will not render the plea excipiable . The plea of
locus standi is a defence in law. The plaintiff may utilize
the
precedures of discovery and request for further particulars with
regard to the defence that payment was made in error.
It
is clear from the pleadings that the relationship between government
and the affected employees with regard to payment of medical
contributions is governed by rules, and similarly, there are rules
governing acceptance and termination of membership to medical
schemes. How these rules apply to the facts of this case is a matter
of evidence and does not have to be pleaded.
[40]
Under the circumstances, the application to amend the plea should
succeed.
COSTS
[41]
It is trite that a party who seeks the indulgence of an opponent or
court should bear the costs consequent thereto. In certain
circumstances, a party from whom indulgence is sought may be visited
with costs if he witholds his consent unreasonably.
[42]
Mr Jacobs argued that plaintiff is entitled to the costs relating to
the exception because the proceedings were jettisoned
by the filing
of the notice of amendment. Mr Semenya disagreed, and submitted that
plaintiff’s costs in the exception should
be limited to
drafting ony, not argument.
[43]
I disgaree. As stated above, plaintiff complied with the Practice
Directives by filing heads of argument and practice note
after it
received an assurance from defendant that it would not proceed with
the then notice of amendment. Defendant waited until
the last hour ,
and instead of filing heads of argument, it filed the current notice
of amendment. Plaintiff is entitled to its
full costs with regard to
the exception.
[44]
I make the following order;
[44.1]
Defendant is granted leave to amend its plea in accordance with the
notice dated 15 July 2013.
[44.2]
Defendant is ordered to pay costs of the application for amendment.
[44.3]
Defendant is also ordered to pay the plaintiff’s costs in the
exception.
MAKHUBELE
AJ
Acting
Judge of the High Court
APPEARANCES:
PLAINTIFF:
Advocate HF Jacobs
Instructed
by MacRobert Incorporated
Brooklyn,
Pretoria.
Ref:
AVN/mk/1019654
Tel:
(012) 425 3400
DEFENDANT:
IAM Semenya SC
Appearing
with:
Advocate N Mayet
Instructed
by State Attorney, Pretoria
Ref:
7425/12/Z32/L Moyse
Tel:
(012) 309 1575
[1]
Paragraph
9 of plaintiff’s particulars of claim
[2]
Replying
affidavit
[3]
1995
(2) SA 40
(T), 43I-44A.
[4]
by
notice dated dated 18 February 2013. Plaintiff indicated by
letter dated 05 March 2013 that it had no objection to the
poposed
amendment . The amendment , which effectively replaced
paragraph 2.8 in its entirety was apparently effected on
11 March
2013.
[5]
An
application to condone late filing of the replying affidavit was
also made. It was not opposed and was granted.
[6]
Caney
J, in
Trans-Drakensberg
Bank Ltd (Under Judicial Management) v Combined Engineering (Pty)
Ltd and another
1967
(3) SA 632
(D) 640H-641B
[7]
Flemmer
v Ainsworth
1910 TPD 81
[8]
Trope
and Others v South African Reserve Bank (641/91)
[1993] ZASCA 54
;
1993 (3) SA 264
(AD);
[1993] 2 All SA 278
(A) (31 March 1993)
[9]
Carelsen
v Fairbridge , Ardene & Lawton
1918 TPD 306
at 309, approved in
amongst other cases; Liquidators Wapejo Shipping Co. Ltd v Lurie
Bros
1924 AD 69
at 74
[10]
at
t 211