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[2013] ZAGPPHC 10
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Pienaar v Council for Medical Schemes (7878/2010) [2013] ZAGPPHC 10 (23 January 2013)
NOT
REPORTABLE
IN
THE HIGH COURT OF SOUTH AFRICA NORTH GAUTENG : PRETORIA
CASE
NO: 7878/2010
DATE:23/01/2013
In
the matter between:
DANIEL
PIENAAR
…................................................................................
Applicant
and
THE
COUNCIL FOR MEDICAL
SCHEMES
..........................................
Respondent
JUDGEMENT
Coram:
RABIE J
1.
The applicant is a trustee and the chairman of the Liberty Medical
Scheme (“LMS"). ‘n medical scheme registered
under
section 24(1) of the Medical Schemes Act. Act 131 of 1998 ("the
Act ). The respondent is the Council for Medical Schemes,
established
in terms of section 3 of the Act.
2.
In the present application the applicant sought a permanent interdict
preventing the respondent from making a determination in
terms of
section 46(1) of the Act in respect of the applicant pursuant to
certain letters addressed by the respondent dated 20
December 2010,
16 February 2011 and 23 June 2011. The respondent has instituted
section 46 proceedings which may lead to the removal
of the applicant
from the board of trustees of the LMS. The present application to
this court was thus aimed at interdicting and
restraining the
respondent from continuing with the section 46 proceedings which the
applicant viewed as unlawful and unfair.
3.
The respondent is a statutory body entrusted with the responsibility
of regulating and controlling medical schemes and their
business. The
respondent’s functions include the obligation to protect the
interests of beneficiaries. According to section
3 of the Act the
respondent shall, at all times, function in a transparent, responsive
and efficient manner. The fifteen members
of the respondent are
appointed by the Minister of Health taking into account the interests
of members and of medical schemes,
expertise in law. accounting,
medicine, actuarial sciences, economics and consumer affairs. The
Chairperson of the respondent is
also appointed by the Minister.
Section 7 of the Act contains provisions relating to the functions of
the respondent and section
8 provides for the powers of the
respondent.
4.
Section 46 of the Act makes provision for the removal by the Council
of a member of the board of trustees of any medical scheme
and
provides as follows:
”
46.
Removal of member of board of trustees.—(1) The Council may. by
notice in writing, remove from office a member of the
board of
trustees of a medical scheme if it has sufficient reason to believe
that the person concerned is not a fit and proper
person to hold the
office concerned.
(2)
The Council shall, before issuing the notice referred to in
subsection (1), furnish such person with full details of all the
information the Council has in its possession in regard to any
allegations of the member of the board of trustees not being a fit
and proper person and to request that person to furnish the Council
with his or her comments thereon within 30 days or such further
period as the Council may allow.
(3)
The Council may not issue the notice referred to in subsection (1)
until it has considered the comments, if any, referred to
in
subsection (2)."
5.
In the present instance the respondent informed the applicant that it
is invoking the section 46 procedure on the basis of allegations
that
the applicant was not a fit and proper person to be a member of the
board of trustees of LMS. Initially the action of the
respondent was
aimed at the respondent as well as a certain Mr L Jacques, who was
also a member of the board of trustees of LMS.
As Mr Jacques had
since resigned his position, the further proceedings in terms of
section 46. and the application before this
court, only relate to the
applicant.
6.
The first notice to the applicant was contained in a letter dated 20
December 2010. A second notice in terms of section 46 was
contained
in a letter from the respondent dated 16 February 2011. This second
notice referred to further grounds relating to why
the applicant was
not a fit and proper person to serve on the board of trustees of LMS.
A third notice in terms of section 46 was
given to the applicant and
Mr Jacques on 23 June 2011. According to this third notice the
respondent had again considered the matter
and had decided to renew
its earlier resolution to proceed against the applicant and Mr
Jacques on the grounds set out in the first
two notices.
7.
The applicant eventually refused to participate in the section 46
proceedings and instead of waiting for the conclusion of such
proceedings and possible further internal remedies, should same have
become necessary, the applicant proceeded with the present
application.
8.
It is trite that where an administrative body has a duty imposed on
it by statute and disregards important provisions of the
statute or
is guilty of gross irregularity or clear illegality in the
performance of that duty, its proceedings may at common law
be set
aside by a Court of law on application. See S.A. Medical and Dental
Council v McLoughlin,
1948 (2) SA 355
(AD) at p. 392. The provisions
of Section 195 of the Constitution, Act 108 of 1996, which relate to
public administration, and
the provisions of section 33 of the
Constitution, enforce and extend the position at common law and the
provisions of the Promotion
of Administrative Justice Act, Act 3 of
2000, provide for the basic framework and content of, inter alia, a
review of administrative
action.
9.
Where the administrative proceedings have, however, not been
finalised, such as in the present instance, the court would be less
inclined to step into the process and to exercise its reviewing
powers. In Brock v SA Medical and Dental Council 1961 (1) SA 319
(C)
at p 324 the following was said:
"Now
while the common law remedy is not confined to cases where
proceedings have been finalised, it is only in rare instances
that
the Supreme Court will exercise that power to restrain illegalities
during the hearing of a matter. In Wahlhaus and Others
v Additional
Magistrate. Johannesburg and Another,
1959 (3) SA 113
(AD), an
application had been made for an order declaring an indictment
invalid or alternatively quashing the indictment. It was
held that
while a Superior Court undoubtedly has the power to intervene,
whether by mandamus or otherwise, in unterminated criminal
proceedings, it will only do so in rare cases where grave injustice
might otherwise result, or where justice might not by other
means be
attained. The Court specially refrained from defining the ambit of
the power and stated that each case must depend upon
its own
circumstances. Although that case dealt with criminal proceedings
before a magistrate’s court, in my view it can
be applied to
review proceedings of a body such as a disciplinary committee. The
object underlying this attitude would seem to
be to ensure that
trials are as far as possible continuous. If proceedings were to be
interrupted pending applications to the Supreme
Court in respect of
alleged irregularities during the proceedings, the conduct of those
proceedings could be seriously prejudiced.
R v Adams and Others,
1959
(3) SA 753
(AD)." (my underlining)
10.
In Van Wyk v Midrand Town Council and Others
1991 (4) SA 185
(W) the
applicant applied for an order interdicting the second respondent
from continuing a disciplinary investigation prior to
the conclusion
thereof.
At
p 188 Lazarus J said the following;
"As
to the principles which must be applied in this application, the
leading case is the Wahihaus case, already referred to,
where it was
held that a Court has the power to interfere with the unterminated
course of proceedings in a court below in rare
cases where grave
injustice might otherwise result or where justice might not by other
means be obtained. In general, however,
it held that it would
hesitate to intervene, especially having regard to the effect of such
a procedure upon the continuity of
proceedings in the court below and
to the fact that redress by means of review or appeal would
ordinarily be available. (See too
Ismail's case supra.)" (my
underlining)
11.
It was not disputed by the parties in the matter before this court
that the aforesaid principles applied in casu.
12.
Having regard to the aforesaid principles, it would seem that the
factors which the court would consider in deciding whether
to
exercise its reviewing powers before the administrative process had
been concluded, would, inter alia, be considerations akin
to those
applicable to the duty to exhaust domestic remedies prior to
approaching the court for relief. Such relevant factors are,
inter
alia, the body that will exercise appellate jurisdiction; the manner
in which that jurisdiction is to be exercised, including
the ambit of
any rehearing on appeal; the powers of the appellate tribunal,
including its power to redress or cure wrongs of a
reviewable
character; and whether the tribunal, its procedures and powers are
suited to redress the particular wrong of which the
applicant
complains. See Lawson v Cape Town Municipality 1982(4) SA 1 (C) at p
6-7.
13.
It is necessary to briefly refer to certain background facts of the
present matter. LMS is a large medical scheme comprising
more than
130 000 members with an annual turnover of around R1,8 billion.
During 2010 Mr Jacques was the chairman of the LMS board
of trustees
and the applicant was one of the remaining seven trustees. During the
same period V-Medical Administrators (Pty)Ltd
(V-Med), which was a
wholly owned subsidiary of Liberty Health Holdings (Liberty Health
Holdings), had an administration agreement
with LMS. In terms of this
agreement V-Med provided LMS with, inter alia, administration
services.
14.
At the time Dr P. Botha was the Chief Executive Officer of Liberty
Health Holdings. On 1 October 2010 Dr Botha lodged a complaint
with
the respondent against the applicant and Mr Jacques. In brief the
complaint contained, inter alia, the following allegations:
Dr Botha
stated that he was approached by a certain Mr D. van Rensburg who
acted on behalf of the applicant and Mr Jacques in their
capacities
as trustees of LMS. Mr van Rensburg was involved with companies which
compete with LMS and V-Med. According to Dr Botha,
Mr van Rensburg
stated that he would arrange for the administration agreement between
LMS and V-Med to be terminated and to have
the administration
services rendered by another company who was prepared to pay Mr van
Rensburg a fee per member in the event of
him succeeding in having
the administration agreement terminated and the new administration
agreement to be concluded between LMS
and this other company. Mr van
Rensburg also proposed that a new marketing company be established
for LMS and that the shareholders
thereof be Liberty Health Holdings
as well as the applicant and Mr Jacques and furthermore an entity in
which Mr van Rensburg had
an interest.
15.
It was thus alleged by Dr Botha that the applicant and Mr Jacques
sought to negotiate a deal from which they would benefit personally
as the deal consisted of the establishment of a marketing company in
which they would hold shares for their personal benefit. This
marketing company would provide services to LMS along with V-Med. The
accompanying threat was that if the proposal was not acceded
to by
V-Med, the administration agreement with LMS would be terminated and
furthermore that the applicant and Mr Jacques, in their
capacities as
trustees of LMS, would ensure that the proposed amalgamation of LMS
with another medical scheme, also administered
by V-Med, namely
Spectramed, would be frustrated. This they would have been able to do
by using their influence on the other trustees
of LMS. V-Med and its
holding company, Liberty Health Holdings, were in favour of this
amalgamation.
16.
The thrust of the complaint against the applicant and Mr Jacques was
thus that they had acted in a manner which entails is serious
conflict of interest on their part as trustees of LMS.
17.
On 7 December 2010 V-Med and the other subsidiary of Liberty Health
Holdings brought an urgent application to this court to
interdict the
applicant and Mr Jacques from participating at any meetings of LMS at
which anything in respect of the administration
agreement with V-Med
were to be discussed. Furthermore, to interdict LMS from implementing
its resolution to reduce the services
which V-Med is required to
provide to LMS in terms of the administration agreement.
18.
On behalf of the respondents in that application it was submitted in
limine that V-Med and the other subsidiary had no locus
standi to
bring the said application and furthermore that no cause of action
was disclosed in the founding papers. The court found,
inter alia,
that the conflict of interest relied upon by the applicants in that
application, was not one between the trustees and
LMS but between the
applicant and Mr Jacques, as trustees, and an outside third party.
Furthermore, the duty to avoid a conflict
of interest is a duty owed
by the trustees to LMS and its members, and not a duty owed to V-Med
and the other subsidiary as outside
parties. In regard to the
submission that no cause of action had been disclosed, the court
found, inter alia, that the application
was premature as no decision
had yet been taken by the board of trustees of LMS which was to the
detriment of V-Med and the other
subsidiary. Furthermore that the
application was in effect an attempt to prevent LMS by way of an
interdict from terminating the
relevant contacts lawfully. The court
consequently dismissed the application on the basis of the two points
in limine.
19.
As mentioned above, the first notice to the applicant invoking
section 46 was dated 20 December 2010. That related to the issues
contained in the complaint of Dr Botha. In the same notice the
Registrar of the respondent directed LMS to ensure that the applicant
and Mr Jacques not participate in any discussions and/or decisions
regarding the complaint and to refrain from engaging in any
discussions and/or decisions regarding the administrator or any of
its affiliates.
20.
The applicant did not make representations as requested in the notice
in terms of section 46 but instead made a large number
of queries and
requests for information. Queries were also made in respect of the
respondent's entitlement to issue the directive
that the applicant
and Mr Jacques should not participate in certain decisions of the
board of trustees.
21.
On 2 February 2010 the respondent responded quite extensively to the
aforesaid requests and queries and also summarised the
allegations
against the applicant and Mr Jacques. The letter also referred, inter
alia, to an opinion obtained from senior counsel
expressing the view
that the applicant and Mr Jacques should not participate in any
deliberations or decisions of the board of
trustees of LMS relating
to the complaints against them or to any dealings between LMS and
V-Med in relation to any of the issues
which have arisen in the
complaint, for, to do so, would constitute a manifest conflict of
interest on their part. The letter continued
by confirming that the
applicant and Mr Jacques had indeed acted in a manner that
constituted a conflict of interest in that they
had refused to recuse
themselves from such deliberations and decisions. Further allegations
were made to which it is not necessary
to refer.
22.
In the correspondence that ensued, the applicant and Mr Jacques asked
for further information and eventually filed supplementary
submissions.
23.
On 16 February 2012 the second notice in terms of section 46 was
written to the applicant's then attorney informing him that,
pursuant
to further information, the respondent had resolved on 14 February
2011 to invoke section 46 against the applicant and
Mr Jacques. This
notice mainly related to allegations that they had participated in
decisions of the Board of Trustees when they
should not have done so,
given their interest in the matter. The respondent invited
submissions and such were made on 17 March
2011.
24.
In subsequent correspondence the applicant questioned the validity of
the decision taken on 3 December 2010 which led to the
first notice
in terms of section 46. According to the respondent the attack by the
applicant on the validity of the procedure followed
by the
respondent, resulted in the respondent deciding, ex abundanti
cautela. to put the matter beyond doubt and to reconsider
the whole
matter afresh. In a meeting of the respondent held on 26 May 2011,
the respondent considered all the documentation and
the issues raised
by the applicant and decided to renew its resolution to proceed
against the applicant and Mr Jacques in terms
of section 46 based on
the grounds contained in the earlier notices and letters. The
applicant and Mr Jacques was again afforded
a period of 30 calendar
days to supplement their existing written submissions to the
respondent. They were also invited to notify
the respondent should
they not have all the documents and correspondence considered by the
respondent. They were also informed
that they would not be afforded
the opportunity of leading evidence and of cross-examining Dr Botha
but that they would be afforded
the opportunity of making oral
representations when the respondent considers the matter. This letter
also noted the resignation
of Mr Jacques as a trustee.
25.
On 31 August 2011 the respondent furnished the applicant with all the
information that had served before the respondent when
it made its
decision on 26 May 2011 to issue the notice in terms of section 46.
26.
On 18 October 2011 the applicant filed an internal appeal against the
section 46 process. At the meeting of the respondent of
27 October
2011 the matter was adjourned at the request of the applicant until
the appeal had been heard.
27.
I have mentioned above that the applicant did not seek to review the
respondent’s decisions thus far, and neither did
he wait for
the conclusion of the section 46 procedure to be concluded before
approaching this court.
28.
According to the applicant the whole administrative process in terms
of section 46 had become both unlawful and unfair and had
become
tainted to such a degree that it should not be allowed to continue.
Numerous grounds were mentioned by the applicant in
support of these
contentions and it would appear that for all practical purposes each
and every possible point relating to the
process and the merits of
the matter came under attack both in the correspondence leading up to
the application and in the application
itself. In my view, however,
it is not necessary to refer to all these issues herein. I shall
refer to the more salient contentions
which in effect encompass all
the sub categories of the complaints against the actions of the
respondent.
29.
Firstly, the applicant alleged that the grounds upon which the
respondent invoked the section 46 proceedings, were totally
unsubstantiated. Secondly, that the respondent remained supine and
allowed the applicant to be a trustee whilst engaging in the
section
46 proceedings and that this demonstrated the respondent's ulterior
motive, irrationality, bias and mala tides. Thirdly,
that the
respondent's failure to provide documentation or information allows
for the inference that the respondent is pursuing
an agenda on behalf
of V-Med.
Fourthly,
that Dr Botha utilised the machinery of the respondent to unlawfully
prevent LMS from terminating the administration agreement
with V-Med
and that the respondent willingly and deliberately assisted Dr Botha
to try and achieve this end. Furthermore, that
the respondent had no
power or authorisation to direct that the applicant and Mr Jacques
may not participate in any discussions
and/or decisions regarding the
complaints and regarding V- Med and its affiliate. In this regard the
respondent assisted V-Med
to achieve its objects when it failed to do
so by way of the urgent court interdict referred to above.
30.
Regarding the process itself the applicant, inter alia, submitted
that the respondent failed to hold proper meetings on 3 December
2010
and 16 February 2011 and that, consequently, no lawful decisions were
taken by the respondent to invoke the process in terms
of section 46
of the Act. It was further submitted that the respondent came in
possession of documentation which it obtained through
the aforesaid
invalid procedures and that it thus possessed the documentation
illegally,
31.
Regarding the third notice in terms of section 46 the applicant
submitted, inter alia, that if the respondent had applied an
unbiased
and objective mind to the matter at its meeting of 26 May 2011, it
would have determined that there was no substance in
the allegations
that the applicant was not a fit and proper person to hold the office
of trustee of LMS. tn regard to this and
all the other decisions the
applicant submitted that the decisions of the respondent were based
on false and hearsay evidence and
that it was furthermore
inexplicable that the respondent would proceed after Liberty Health
Holdings had indicated that it no longer
wished to proceed with the
complaints against the applicant. The applicant accused the
respondent of conducting a malicious vendetta
against him.
32.
With reference to the internal appeal instituted by the applicant it
was submitted that the granting of a date for the hearing
so far in
the future, effectively deprived the applicant of the benefit of this
remedy.
33.
The applicant further submitted that he was not afforded a proper
opportunity to state his case and that he would be prejudiced
by the
refusal that he may lead oral evidence and conduct cross examination.
34.
The applicant furthermore submitted that his good name and reputation
had been damaged and that he had no alternative remedy
but to
approach the court in the manner that he did.
35.
Before dealing with the aforesaid issues it is apposite to again
refer to the manner in which the court should deal with factual
disputes in motion proceedings. In National Director of Public
Prosecutions v Zuma
[2009] ZASCA 1
;
2009 (2) SA 277
(SCA) Harms JA said the following
at 290 para [26]:
"
[26] Motion proceedings, unless concerned with interim relief, are
all about the resolution of legal issues based on common
cause facts.
Unless the circumstances are special they cannot be used to resolve
factual issues because they are not designed to
determine
probabilities. It is well established under the Plascon-Evans rule
that where in motion proceedings disputes of fact
arise on the
affidavits, a final order can be granted only if the facts averred in
the applicant's (Mr Zuma's) affidavits, which
have been admitted by
the respondent (the NDPP). together with the facts alleged by the
latter, justify such order. It may be different
if the respondent's
version consists of bald or uncreditworthy denials, raises fictitious
disputes of fact, is palpably implausible,
far-fetched or so clearly
untenable that the court is justified in rejecting them merely on the
papers. The court below did not
have regard to these propositions and
instead decided the case on probabilities without rejecting the
NDPP's version."
36.
Regarding the applicant's submission that there is no basis upon
which a section 46 procedure can be instituted and that there
is no
case against the applicant and only hearsay allegations, it should be
emphasised that the respondent is the body which should
make such
decisions and not this court. At this stage of the proceedings the
respondent has not even been called upon to decide
the merits of the
matter as to whether the applicant is a fit and proper person to hold
the position of trustee, and the only question
that had to be asked
in terms of section 46, was whether the respondent had in its
possession allegations of the applicant not
being a fit and proper
person.
37.
It is not necessary to make a finding in regard to the nature of the
discretion which of the respondent has to exercise at such
early
stage of the proceedings since it is clear that there are more than
sufficient allegations, some of which were supported
by documentary
evidence, to have concluded that the section 46 proceedings could be
invoked in the sense that the applicant could
be presented with such
information and be requested to respond thereto. An analysis of the
factual averments made in support of
the complaints against the
applicant quite clearly shows that the respondent not only had the
right but in fact an obligation to
confront the applicant with the
same and to require him to respond thereto.
38.
Furthermore, the applicant elected to not address the allegations
contained in the section 46 proceedings in his affidavits
before this
court and did not state his response thereto. The applicant merely
relied on conclusions which were not substantiated
by any evidence
from his side. There is consequently no basis for the submission that
this court can find that, based on the contents
of the allegations
against the applicant, the respondent should be prevented from
proceeding with the section 46 proceedings against
him.
39.
The allegations that the respondent had drawn out the proceedings
also have no merit. Much time was spent on correspondence
relating to
the information which the respondent had in its possession when it
decided to invoke the section 46 procedure. Again
it is not necessary
to analyse each and every event and each and every letter and its
contents herein, but on a consideration of
ail the relevant facts and
circumstances there is no merit in any suggestion that the respondent
dragged its heels in any manner
whatsoever. The appeal instituted by
the applicant also contributed much to the time lapse. There is
consequently no basis for
any inference of ulterior motive,
irrationality, bias or mala fides on the part of the respondent. The
conclusions which the applicant
accordingly wishes to draw against
the respondent simply have no merit.
40.
For the same reasons the allegation that the respondent was pursuing
an agenda on behalf of V-Med which is allegedly to be inferred
from
the alleged failure to provide documentation and information, has to
be rejected. In any event, it is common cause that the
applicant is.
and has been for some time, in possession of ali relevant information
and documentation and consequently this issue
cannot constitute any
support for the present application before this court.
41.
The allegations by the applicant that the respondent had an ulterior
motive and had colluded with Dr Botha and had acted in
a manner which
supported Dr Botha's alleged cause, finds no support in the evidence
before this court. The allegations against
the applicant and the
contents of legal opinion obtained by the respondent from senior
counsel were such that the respondent could
not ignore same and was
in fact obliged to invoke the provisions of section 46.
42.
Regarding the allegation that the respondent had no authority to
direct the applicant and Mr Jacques not to participate in any
discussions and/or decisions regarding the complaints and regarding
the administration agreement, the Registrar of the respondent
explained in his affidavit before this court that it was he who
directed LMS not to take any strategic decisions until the section
46
process had been finalised, specifically with regard to any changes
to the administration and managed healthcare agreements.
He further
explained that having regard to the powerful positions which the
applicant and Mr Jacques occupied in LMS, Mr Jacques
being the
chairperson and the applicant being the chairperson of the clinical
risk committee as well as the procurement committee
which was
responsible for agreements with the scheme's suppliers, he held the
view that in view of the allegations made in support
of the
complaints against the applicant and Mr Jacques, they found
themselves in conflicted positions and that it would not be
possible
for LMS to take proper and valid decisions concerning the issues in
respect of which the directive had been issued.
43.
The Registrar further explained that in terms of section 6 (2) (a)
(iii) of the Financial Institutions (Protection of Funds)
Act, Act 28
of 2001 he was empowered to direct a medical scheme to make
arrangements to his satisfaction for the discharge of ail
or part of
the scheme’s obligations in terms of a law. He further referred
to the fact that the legal advice furnished by
senior counsel
confirmed the view which he held. Senior counsel advised: inter alia,
that it would be clearly improper for the
applicant and Mr Jacques to
take any part in any deliberations and decisions of the trustees of
LMS in relation to the complaint
against them, or in respect of any
dealings between the trustees and V-Med in relation to any of the
issues which have arisen in
the complaint. He advised that such
participation would be a manifest conflict of interest on their part.
He also advised that
the other trustees of LMS should ensure that
their colleagues do not participate in the decisions relating to
these issues.
44.
Having regard to the aforesaid, there was nothing improper or
sinister in the directive issued. The Registrar also stated that
it
was not done at the insistence of Dr Botha and that he did not seek
to assist Dr Botha or V-Med or Liberty Health Holdings for
any reason
whatsoever. Having regard to the legal principles referred to above,
this version on behalf of the respondent has to
be accepted.
45.
Much was made by the applicant in the correspondence between the
parties and also during argument of this application of the
alleged
unlawfulness of the
first
two notices in terms of section 46. On behalf of the applicant
reference was, inter alia, made to the fact that the first
notice was
decided upon by the respondent by way of a so-called round-robin
decision and that a quorum of votes may not have been
obtained for
purposes of the second notice. On behalf of the respondent it was,
inter alia, submitted that the fact remains that
the respondent took
those decisions and that unless and until those decisions had been
reviewed and set aside by a court of law.
it cannot be ignored. There
is merit in this submission of the respondent but in my view it is
not necessary to delve further into
the issue of the first two
notices. This is so because the third notice to the applicant in
terms of section 46 caused the first
two notices to become academic.
46.
The third notice to the applicant was the result of a resolution by
the respondent to reconsider the whole matter in the light
of all the
allegations of unlawfulness that had been made by the applicant and
his attorneys in regard to the first two notices
and to ensure that
the process would be a valid one in all respects. It was further
submitted that the third notice, dated 23 June
2011. which
encompassed the factors relating to first two notices, is
unassailable. I agree with the submissions on behalf of the
respondent. The third notice resulted from a full meeting of the
respondent on 26 May 2007. Ail the relevant documentation was
considered and the respondent resolved to renew its resolution to
proceed against the applicant and Mr Jacques in terms of section
46
of the Act. The applicant was also presented with a further
invitation to supplement his written submissions in response to
the
allegations of his not being a fit and proper person to hoia the
office of trustee.
47.
The fact that the respondent had received representations from the
applicant consequent upon the first two notices cannot detract
from
the validity of the third notice. Similarly, the submission on behalf
of the applicant that the respondent had prejudged the
matter as a
result of what had happened before, has no merit. Section 46 allows
for a dual process, i.e., the decision by the Council
of the
respondent to invoke the process and to furnish the particular member
of the board of trustees with the details of the information
in
regard to any allegations of the trustee not being a fit and proper
person and to request that person to furnish the Council
with his or
her comments thereon. And, secondly, the decision to remove the
member of the board of trustees from office, should
that be merited.
The fact that the Council may have considered the first part of the
process on more than one occasion based on
information then before
it. cannot affect the last decision based on the same facts and
principles, especially if the last decision
was taken merely to
correct a possible earlier procedural wrong. Furthermore, the
decision regarding the first step can also not
prevent the Council
from deciding the issue of whether the person should be removed as a
trustee or not.
48.
Regarding the third notice the applicant furthermore submitted, inter
alia, that if the respondent had applied an unbiased and
objective
mind to the matter at its meeting of 26 May 2011, it would have
determined that there was no substance in the ailegations
that the
applicant was not a fit and proper person to hold the office of
trustee of LMS. Allegations of hearsay evidence were repeated
and
much emphasis was placed on the fact that Liberty Health Holdings had
indicated that it no longer wished to proceed with the
complaints
against the applicant. I have already dealt with the substance and
the effect of the allegations against the applicant
and no more needs
to be said about that. Regarding the attitude of Liberty Health
Holdings subsequent to the resignation of Dr
Botha, the submission of
the applicant that the respondent is conducting a malicious vendetta
against him by proceeding with the
matter, cannot be sustained. The
fact that Liberty Health Holdings may have no objections to the
proceedings being terminated,
is not dispositive of the section 46
proceedings and is. in fact, irrelevant thereto. The allegations and
facts which resulted
in the respondent's decision to invoke section
46. have not been withdrawn and thus remain to be considered in terms
of the section
46 procedure, it is therefore also not necessary to
make a finding in respect of the submission by the respondent that
the attitude
of Liberty Health Holdings in fact resulted from a
settlement reached between the applicant and Mr Jacques, on the one
hand, and
Liberty Health Holdings and/or V-Med and/or V-med
Solutions, on the other hand.
49.
Regarding the fact that a rather late date for the hearing of the
internal appeal instituted by the applicant had been allocated.
I
disagree with the allegations made and the inferences drawn by the
applicant in this regard against the respondent. The appeal
board is
appointed in terms of section 50 of the Act and is a body independent
of the Council of the respondent. The applicant
chose not to join the
appeal board in the present proceedings and made no allegations
against the appeal board. Consequently no
finding can be made that
the applicant had been deprived of this internal remedy. As such it
is not necessary to consider the further
submissions by the
respondent that the legislature could not have intended an appeal
under circumstances where the respondent’s
Council had not yet
been granted the opportunity of applying its mind to the allegations
against a person and his response thereto.
50.
Regarding the applicant's complaint that he was not afforded a proper
opportunity to state his case and that he would be prejudiced
by the
refusal that he may lead oral evidence and conduct cross examination,
the respondent submitted that it was not relying on
disputed facts
for the allegations in respect of the applicant not being a fit and
proper person to hold the office of trustee
and that there is
consequently no need to lead evidence on the facts and to
cross-examine witnesses. All that is required, according
to the
respondent, is that the applicant be afforded the opportunity to
state his case in response and to dispute information in
writing
and/or by way of oral representations.
51.
The respondent further stated that to the extent that facts relied
upon by the Council are not common cause and the applicant
contending
that he is entitled to lead evidence and cross-examine witnesses, the
proceedings before the appeal board would be the
time and place for
such to be addressed if necessary. The proceedings before the appeal
board specifically allow for the leading
of evidence and the
cross-examination of witnesses and in fact constitute a complete
rehearing of the matter. The appeal board
can thus not only cure all
wrongs of a reviewable character but also come to a different
decision on the merits of the matter.
The lodging of an appeal would
also suspend the respondent’s decision and any decision would
therefore not cause any prejudice
to the person affected thereby.
These considerations are also relevant in considering whether this
court should step in at this
stage and terminate the section 46
procedure in respect of the applicant.
52.
Despite the opposite views held by the parties in respects of the
aforesaid, I find it in any event impossible to conclude what
the
respondent might decide during future proceedings before it in terms
of section 46 regarding such issues. In my view it would
all depend
on the nature of the proceedings and the manner in which the evidence
is eventually presented to the respondent. It
would also depend on
the contents of the submissions by the applicant. It may very well be
that the issue of the leading of evidence
and cross-examination
becomes irrelevant or it may happen that the respondent or the
applicant adopts a different view when the
time comes. Whatever the
case, any issue that may arise in future should be considered and
possibly adjudicated at that point.
At this stage of the proceedings
it cannot be said that a grave injustice might result, or that
justice might not by other means
be attained, unless the present
proceedings were to be terminated and prevented from proceeding.
53.
The applicant's submission that his good name and reputation had been
damaged and that he had and will suffer other loss and
prejudice, has
to be considered against the provisions of the Act and more
particularly the obligations and responsibilities of
a trustee of a
medical scheme and also the provisions of section 46 which are, inter
alia, aimed at the protection of the medical
scheme and its members.
When considered in this light, the submissions on behalf of the
respondent do not carry sufficient weight
to decide the application
in the favour of the applicant.
54.
The applicant's submission that he has no alternative remedy but to
approach the court in the manner that he did. cannot be
upheld and I
refer to what I have said in this regard above. In fact, with
reference to all the facts and circumstances it would
not be in the
interest of justice to prevent the respondent from complying with its
duties in terms of the Act.
55.
Having regard to all the allegations and the submissions on behalf of
the parties. I hold that, based on the principles set
out in the
Walhaus. Brock and Van Zyl matters referred to above, the applicant
has failed to make out a case that this court should
interfere at
this stage of the proceedings.
56.
As far as costs are concerned there is no reason why costs should not
follow the event and why costs should not include the
costs of two
counsel.
57.
In the result the following order is made:
1.
The application is dismissed with costs which costs shall include the
costs of two counsel.
C.P.
RABIE
JUDGE
OF THE HIGH COURT
24
December 2012