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[2014] ZAGPPHC 344
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Medshield Medical Scheme and Another v Stuart and Others (47350/13) [2014] ZAGPPHC 344 (4 June 2014)
REPUBLIC
OF SOUTH AFRICA
NORTH GAUTENG
HIGH COURT
PRETORIA
(REPUBLIC OF
SOUTH AFRICA)
Case
no:47350/13
In
the matter between:
MEDSHIELD
MEDICAL
SCHEME
...................................................................
FIRST
PLAINTIFF
THEMBA
BENEDICT
LANGA
......................................................................
SECOND PLAINTIFF
AND
CLIVE
MARSCHALL
STUART
......................................................................
FIRST
DEFENDANT
GAVIN
JOHN
GRIFFIN
...............................................................................
SECOND DEFENDANT
THABO
PADLETON
MABETA
.....................................................................
THIRD
DEFENDANT
BISNATH
JAY
SINGH
................................................................................
FOURTH DEFENDANT
MAMARE
PENNY
MOILOA
.........................................................................
FIFTH
DEFENDANT
TEBATSO
MOTSEPE
......................................................................................
SIXTH
DEFENDANT
Coram:
Baqwa J
Heard:
4 June 2014
Delivered:
JUDGMENT
BAQWA
J
Summary
Exception to
particulars of claim-Medical Schemes former trustees of the board of
trustees-payment of consultancy fees during their
tenure as
trustees-Lawfulness in terms of
Medical Schemes Act 131 of 1998
and
rules of the Medical Scheme-Held that consultancy fees not authorised
by the Act and the Rules and therefore unlawful. Exception
upheld
–plaintiffs
locus
standi
Annotations
Case law
Council
for Medical Schemes and Others v Liberty Medical Scheme and Another
[2013] (3) All SA 508
(GNP)
Breen
v Williams
186 CLR 9HCA)
at 108
Council
for Medical Schemes and Others v Liberty Medical Scheme and Another
ABSA
Bank Ltd v South African Commercial Catering and Allied Workers Union
National Provident Fund
Vermeulen
v Goose Valley Investments (Pty) Ltd 2001(3) SA 986 (SCA) at 997
Trustees
of the Bus Industry Restructuring Fund v Breakthrough Investments CC
2008 (1) SA 67
(SCA)
[1]
This is an action in which plaintiffs instituted an action against a
number of erstwhile trustees of the Medshield, the first
plaintiff,
for the repayment to Medshield of amounts paid to those trustees at
various times during the period January 2008 to
October 2011 in
respect of consultancy fees for consultancy services rendered by the
former trustees being the first to sixth respondents
herein.
[2]
Plaintiffs contend that the consultancy services and/or payments in
that regard were authorised by the board of trustees but
were
ultra
vires
the board and
as such were invalid and unlawful. The claim is based on the alleged
consequent invalidity of the authorisation by
the board.
[3]
It is the contention of the plaintiffs that because the consultancy
services were not specifically authorised by the Medical
Schemes Act
131 of 1998 (The Act) or by the Rules of Medshield, they were not
valid.
[4]
The law
Rule
23(1) of the Uniform Rules of Court provides as follows:
‘’
Where
any pleading is vague and embarrassing or lacks averments which are
necessary to sustain an action or defence, as the case
may be, the
opposing party may, within the period allowed for filling any
subsequent pleading, deliver an exception thereto and
may set it down
for hearing in terms of paragraph (f) of sub-rule (5) of rule 6:
Provided that where a party intends to take an
exception that a
pleading is vague and embarrassing he shall within the period allowed
as aforesaid by notice afford his opponent
an opportunity of removing
the cause of complaint within 15 days: Provided further that the
party excepting shall within 10 days
from the date on which a reply
to such notice is received or from the date on which such reply is
due, deliver his exception.’’
4.1.
A pleading is only excipiable on the basis that no possible evidence
led on the pleading can disclose a cause of action or
defence.
Vermeulen
v Goose Valley Investments (Pty) Ltd 2001(3) SA 986 (SCA) at 997
4.2.
The purpose of an exception alleging that a pleading lacks averments
that are necessary to sustain a defence is to dispose
of the leading
of evidence at the trial. Such an exception must go to the root of
the defence.
Trustees
of the Bus Industry Restructuring Fund v Breakthrough Investments CC
2008 (1) SA 67
(SCA)
[5]
Background
5.1.
In terms of section 57 of the Act every medical scheme such as the
first plaintiff shall have a board of trustees to manage
the business
of such Medical Scheme in terms of the applicable laws and Rules. The
day to day affairs of a medical scheme
are managed by a
principal officer who is also chief executive officer of the medical
scheme.
5.2.
Among the duties of the first plaintiffs’ board of trustees are
the proper and sound management of the scheme; to avoid
conflicts of
interests and to declare any interest they may have in any particular
matter serving before the board of trustees
and to ensure that the
operation and administration of the scheme complies with the
provisions of the Act and the Rules.
5.3.
In their capacities as members of the first plaintiff’s board
of trustees, the defendants were entitled to be paid for
performing
their duties as members of the board of trustees as contemplated in
the Act and in the Rules.
[6]
The first to the fifth defendants have noted an exception to the
plaintiffs particulars of claim on the basis that the particulars
of
claim lack averments necessary to sustain a cause of action or claim
for damages and that the particulars of claim are vague
and
embarrassing. Defendants further allege in the exception that despite
a notice to remove the cause of complaint being served
on the
plaintiffs on 26 September 2013, the plaintiffs have failed and or
refused to address the defendants’ complaints.
The defendants
have based their exception on three grounds which I propose to deal
with
seriatim
.
[7]
First exception:
ABSENCE OF LOCUS STANDI
7.1.
Medshield was placed under provisional curatorship on 2 October 2012.
The return day was 13 November 2012 and the summons was
issued 9
months later on 10 August 2013 when the provisional order had already
expired. The plaintiffs have not alleged that the
rule nisi was
extended nor have they furnished proof of the final order regarding
curatorship which would give second plaintiff
legal capacity to act
in the current action.
7.2.
The action as is currently presented in the particulars of claim
presumes that such final order was granted. Plaintiffs’
response is that plaintiff is a medical aid scheme registered in
terms of the
Medical Schemes Act 131 of 1998
and that in terms of
section 26
thereof it is a body corporate capable of suing and being
sued in its own name, and that it therefore has legal capacity to
bring
these proceedings.
7.3.
Whilst this maybe a correct position legally, the action has not been
brought by the first plaintiff acting in terms of section
26 of the
Act. The action has been instituted in the context of it being under
curatorship. Plaintiff is therefore under a legal
obligation to
clarify in which capacity it is suing. Defendants must not be left to
second guess which capacity the plaintiffs
are suing in and in that
context the summons are in my view vague and embarrassing.
7.4.
There is an ambivalence in plaintiffs submission that its
locus
standi
is not
derived from the rule nisi and in the same vein submit that the
second plaintiff was authorised to institute legal proceedings
in his
capacity as plaintiffs’ curator.
7.5.
Plaintiff further submits that the question of
locus
standi
should be
brought by way of special plea in terms of Rule 7. Rule 7 provides as
follows:
‘’
7(1)
Subject to the provisions of sub-rules (2) and (3) a power of
attorney to act need to be filed, but the authority of anyone
acting
on behalf of a party may, within 10 days after it has come to the
notice of a party that such person is so acting, or with
the leave of
the court on good cause shown at anytime before judgment, be
disputed, whereafter such person may no longer act unless
he
satisfies the court that he is authorised so to act, and to enable
him to do so the court may postpone the hearing of the action
or
application.’’
The
second plaintiff is cited
nomine
officii
as a
curator. A curator is appointed by the Court and he does not
therefore need a power of attorney to act as such. I am accordingly
of the view that Rule 7 is not applicable for the establishment of
the
locus standi
of second defendant, if the
rule
nisi
was confirmed
by Court.
[8]
The second exception
The
second ground of exception is that the plaintiffs have failed to
‘’
set
out such allegations as would show that authorising the performance
of consultancy services by the defendants and authorising
the
remuneration hereof is
utra
vires
,
invalid and unlawful.’’
8.1.
Plaintiffs submit that there is no merit in defendants ground of
exception due to the fact that plaintiffs have pleaded, that
the
defendants were members of the first plaintiffs’ board of
trustees and specified the duties of the first plaintiff’s
board of trustees which defendants were entitled to be paid for.
8.2.
Plaintiffs further submit and I accept that in the absence of any
evidence to the contrary the Act and the Rules do not make
provision
for defendants to perform other duties than the duties of the board
of trustees. It is defendants’ submission that
the Act and the
Rules are silent on the issues on which the claim is based thereby
confirming the absence of any provision in the
Act and the Rules
entitling them to act as consultants.
8.3.
Where the Act is silent it cannot be a logical inference that what is
not specifically prohibited is of necessity permitted
or allowed.
This would not be in keeping with the most basic rules of
interpretation. In any event where the statute is silent,
Courts are
guided by the common law.
[9]
Rule 23 is discussed in Erasmus-Superior Court Practice at B1-157
where the following is stated:
‘’
The
Appellate Division has laid down that ‘as a matter of pleading,
even if a pleader relies on a particular section of statute,
it is
not necessary for him to state the number of the section provided he
formulates his claim clearly. It is however, necessary
for plaintiff
to allege all the facts necessary to bring his or her claim within
the statute otherwise, if these cannot be implied,
the summons
discloses no cause of action.’’
Kerringham
v City of Cape Town
1934 A.D 80
at 90
Bato
Star Fishing (Pty) Ltd v Minister of Environmental Affairs 2004(4) SA
490 (CC) at 507 C-D
[10]
In casu
,
I find that the plaintiff has alleged all the facts necessary to
enable it to rely on the Act. I am accordingly satisfied that
sufficient allegations have been made by the plaintiffs to sustain a
cause of action.
[11]
The third exception
The
third ground of exception is that the plaintiffs have not made out a
case in delict; a case based on enrichment or a case based
on breach
of fiduciary duties.
For
purposes of the relief which the plaintiffs seek I find that they do
not have to make out a case based on delict, enrichment
or breach of
a fiduciary duty. It is sufficient that the payments were made in
contravention of the Act and the Rules- and for
purposes of this
exception, I proceed on the basis that the payments were made in
circumstances where the Act and the Rules did
not authorise the
payments to be made.
Council
for Medical Schemes and Others v Liberty Medical Scheme and Another
[2013] (3) All SA 508
GNP
[12]
In the premises, I also find that the exception on this ground is bad
in law and should be dismissed.
[13]
In the result I make the following order:
13.1.
The exception on the first ground is upheld with costs.
13.2.
The exception on the second and third grounds is dismissed with
costs.
13.3.
The plaintiffs are granted leave to amend their summons within
fifteen (15) days of this order.
___________________
S.A.M
BAQWA
(JUDGE
OF THE HIGH
COURT)
Counsel
for the plaintiffs: Adv W La Grange
Instructed
by: Diale Mogashoa Attorneys
Counsel
for the defendants: Adv K Tsatsawane
Instructed
by: Corien Potgieter Inc