About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: North Gauteng High Court, Pretoria
SAFLII
>>
Databases
>>
South Africa: North Gauteng High Court, Pretoria
>>
2013
>>
[2013] ZAGPPHC 546
|
|
Genesis Medical Scheme v Ngalwana N.O. and Others (2639/2011) [2013] ZAGPPHC 546 (11 November 2013)
IN THE HIGH COURT OF
SOUTH AFRICA
(NORTH GAUTENG HIGH
COURT. PRETORIA
Case
number: 2639/2011
Date: 11
November 2013
REPORTABLE
Not of
interest to other judges
Revised
In the matter between:
GENESIS MEDICAL
SCHEME
.............................................................................................
Applicant
and
VUYANI NGALWANA
N.O
........................................................................................
First
Respondent
THE COUNCIL FOR MEDICAL
SCHEMES
......................................................
Second
Respondent
ANNALISE DU
TOIT
................................................................................................
Third Respondent
JUDGMENT
PRETORIUS J.
[1]
This is a review application in which the
applicant requests:
“
1.
Reviewing and setting aside the decision of the Appeal Committee of
the Council for Medical Schemes, chaired by the first respondent,
handed down on 3 August 2010 in which the Appeal Committee dismissed
the applicant’s appeal against the decision of the Registrar
for Medical Schemes handed down on 18 December 2009;
2.
Referring the applicant’s appeal back to
the Appeal Committee, together with such directions as this
Honourable Court deems
fit;
3.
Directing that the Appeal Committee is to be
differently constitute from the one whose decision is hereby reviewed
and set aside;
4.
Directing the second respondent, jointly and
severally with such other respondents as oppose the application, to
pay the applicant’s
costs. ”
[2]
The two issues the court has to determine is
whether the applicant was required to exhaust an internal remedy,
namely an appeal
to the Appeal Board in terms of section 50 of the
Medical Schemes Act 131 of 1998 (the “Act”) and whether
the decision
of the Appeal Committee is reviewable for procedural
unfairness based on an alleged failure by the Appeal Committee to
await further
submissions from the applicant in response to two
questions posed by the Appeal Committee.
Background
:
[3]
On 31 August 2007 the third respondent underwent
spinal surgery. According to the third respondent she was
experiencing pain to
such an extent that her ability to walk properly
was affected.
[4]
Both the orthopaedic surgeon and the neurosurgeon
recommended spinal surgery. The third respondent sought
pre-authorisation for
the surgery from the applicant on 30 August
2007. She was advised on 31 August 2007 to seek a further opinion in
accordance with
the applicant’s protocol. Unfortunately the
third respondent was already in surgery when the request for a second
opinion
was made by the applicant.
[5]
The fact that she was already in surgery caused
the applicant to decline the request for pre-authorization and
subsequently declined
to reimburse her for the costs of the spinal
surgery, as she had not complied with the applicant’s spinal
protocol.
[6]
The third respondent lodged a complaint in terms
of section 47 of the Act and the Registrar of the second respondent
ruled on 18
December 2009 that the applicant was liable for the full
costs incurred for the spinal surgery. A co-payment in terms of rule
1.3.5
of the applicant’s rules had to be made by the third
respondent, which amounted to
R2.000.00. This co-payment is
levied should a member fail to obtain pre-authorisation 72 hours
prior to surgery.
[7]
The applicant appealed to the Appeal Committee.
The Appeal Committee dismissed the appeal and upheld the Registrar’s
ruling.
In September 2010 the applicant launched a so-called
“provisional appeal” pending the outcome of the present
application,
which was instituted in January 2011.
[8]
The main complaint against the Appeal Committee
dismissing the appeal is that the Appeal Committee acted in a manner
that was procedurally
irregular. The Appeal Committee heard the
appeal on 29 June 2010. Both the applicant and respondents were
legally represented.
During the hearing the first respondent raised a
legal question. It was decided that the first respondent’s
legal representative
would prepare a note on the legal issue, which
would be submitted to the Appeal Committee.
[9]
A further factual question was raised and it was
agreed that the hearing will be postponed indefinitely to grant the
applicant an
opportunity to obtain a neurosurgeon’s report.
[10] The Appeal Committee then proceeded
to give a ruling on 3 August 2010, without the note on the legal
issue or the neurosurgeon’s
report being submitted and
considered. Hence the review application.
[11] In the heads of argument, filed and
served by the respondent on 24 July 2013 the
respondent raised a point
in limine that the applicant did not
exhaust its internal remedy, namely the section 50 appeal of the Act
as required by section
7(2)(a) of the Promotion of Administrative
Justice Act, 3 of 2000 (“PAJA”). According to the
applicant a section 50
appeal only deals with the merits and not with
any reviewable irregularities in the section 49 appeal and therefore
section 7(2)(a)
of PAJA is not applicable.
[12] The applicant submits that the
Appeal Committee committed a reviewable irregularity by failing to
await the applicant’s
further submissions on the two questions
posed by the Appeal Committee during the hearing of the section 49
appeal.
[13] On 1 November 2013 the applicant
filed and served an application for exemption in terms of section
7(2)(c) of PAJA requesting
the following relief:
“
The
applicant is exempted from first exhausting the internal remedy
provided by
section 50
of the
Medical Schemes Act No.
131 of
1998
and permitted to proceed with the review application. ”
Point
in limine:
[14] I will deal with the respondent’s
point in limine, before deciding whether an exemption is applicable.
[15]
Section 7(2)
of PAJA provides:
“
(2)
(a) Subject to paragraph (c), no court or tribunal shall review an
administrative action in terms of this Act unless any internal
remedy
provided for in any other law has first been exhausted.
(b)
Subject to
paragraph (c),
a court or tribunal must,
if it is not satisfied that any internal remedy referred to in
paragraph (a) has been exhausted, direct
that the person concerned
must first exhaust such remedy before instituting proceedings in a
court
or
tribunal for judicial review in terms of this Act.
(c)
A court
or tribunal may,
in exceptional
circumstances and on application by the person concerned, exempt such
person from the obligation to exhaust any internal
remedy if the
court or tribunal deems it in the interest of justice.”
(Court’s
emphasis)
[16] It is clear from these provisions
that the common law has been reformed substantially. Unless all
available internal remedies
had been exhausted or exceptional
circumstances exist or it is in the interest of justice, the court
should not hear a review application
in terms of the common law.
[17]
In
Koyabe v Minister for Home Affairs
2010
(4) SA 327
(CC)
at paragraph 46 Mokgoro J held:
“
Section
7(2)(a) of PAJA provides that a court shall review administrative
action only when all relevant internal remedies provided
for in any
other law are exhausted. The provision therefore does not preclude
courts from exercising their judicial review jurisdiction.
A court
must exercise its judicial review powers once one of two
circumstances arises: when all available internal administrative
remedies are found to have been exhausted or when exceptional
circumstances are found to exist.’’
(Court’s
emphasis)
[18]
[In
Nichol and Another v Registrar of
Pension Funds and Another
2008 (1) SA 383
(SCA)
at
paragraph 15 van Heerden JA found:
“
[15]
Under the common law, the mere existence of an internal remedy was
not, by itself, sufficient to defer access to judicial review
until
the remedy had been exhausted. Judicial review would in general only
be deferred where the relevant statutory or contractual
provision,
properly construed, required that the internal remedies first be
exhausted.
10
However,
as is pointed out by lain Currie and Jonathan Klaaren,'by imposing a
strict duty to exhaust domestic remedies, [PAJA] has
considerably
reformed the common law'. It is now compulsory for the aggrieved
party in all cases to exhaust the relevant internal
remedies unless
exempted from doing so by way of a successful application under s
7(2)(c). Moreover, the person seeking exemption
must satisfy the
court of two matters: first, that there are exceptional
circumstances, and second, that it is in the interest
of justice that
the exemption be given."
(Court’s
emphasis)
[19] The provisions of section 7(2)a is
thus peremptory that the internal remedy provided for in section 50
of the Act must be exhausted
before this court can review the matter.
The Nichols case relates to similar facts as the facts in the present
application, where
the Supreme Court of Appeal had to consider the
powers of the Financial Services Board (“FSB”) Act 97 of
1990 in order
to determine whether the FSB Appeal Board had powers of
appeal and review.
[20] The wording of section 26(2) of the
FSB Act is similar to that of section 50(3) of the Act which
provides:
“
(3)
Any person aggrieved by a decision of the Registrar acting with the
concurrence of the Council or by a decision of the
Council
under a power conferred or a duty imposed upon it by or under this
Act, may within a period of 60 days after the date on
which such
decision was given and upon payment to the Registrar of the
prescribed fee, appeal against such decision to the Appeal
Board. ”
and section 50(9) provides:
“
(9)
For the purpose of ascertaining any matter relating to the subject of
its investigation, the Appeal Board shall have the powers
which a
High Court has to summon witnesses, to cause an oath or affirmation
to be administered by them, to examine them, and to
call for the
production of books, documents and objects. ”
[21] In the Nichols case (supra) the
court determined that such an Appeal Board had wide powers. The
appeal board is a tribunal
consisting of three persons where one
person is appointed on account of that person’s knowledge of
the law and the other
two persons are appointed on account of their
knowledge of medical schemes.
[22] It is clear that section 50(9)
provides the same powers as that of the High Court, which are wide
powers as the Board has the
power to vary, confirm or set aside the
registrar’s decision, refer the matter back to the registrar
for reconsideration
or give their own decisions.
[23] Therefore the court held in the
Nichols case (supra) at paragraph 22:
“
[22]
The appeal board therefore conducts an appeal in the fullest sense -
it is not restricted at all by the registrar's decision
and has the
power
to conduct a complete rehearing,
reconsideration and fresh determination of the entire matter that was
before the registrar, with
or without new evidence or information.’’
(Court’s
emphasis)
[24] The applicant has therefore to show
that the Appeal Board will not be effective to deal with the grounds
of review, albeit
on the grounds of irregularity.
[25] In paragraph 26 of the Nichols case
(supra) Van Heerden JA found:
“
Even assuming there to have been
non-compliance with the requirements for procedural fairness set out
in s 3, this would simply
afford the aggrieved party grounds for
review on the basis that the administrative action in question ’was
procedurally unfair’
.
As
with any of the other grounds of review listed in s 6 of PAJA,
however,
the manner of review of such
procedurally unfair administrative action is still governed by s
7(2), in terms of which the aggrieved
party is obliged to exhaust his
or her internal remedies before bringing review proceedings.
”
(Court’s
emphasis)
[26] The appeal in terms of section 50
of the Act must be considered an appeal in the fullest sense, as it
has all the powers of
the High Court to rehear the matter, reconsider
it and to determine afresh the entire matter that was before the
Appeal Committee
and may hear and consider new evidence or
information. The principles enuciated in the
Nichols case (supra)
is applicable in the present application, where the complaint is
similarly that procedurally unfair administration action took
place.
[27] The applicant at no stage indicated
that the Appeal Board will not be able to review the matter due to
procedural irregularities
in terms of section 3(2)(b)(ii) of PAJA
which provides:
“
(b)
In order to give effect to the right to procedurally fair
administrative action, an administrator, subject to subsection (4),
must give a person referred to in subsection (1)-
(I)...
(ii)
a reasonable opportunity to make
representations;”
[28] Section 50 of the Act provides for
an appeal in the wide sense and the Appeal Board will not be confined
to the record of the
Appeal Committee.
[29] Mokgoro J explained in
Koyabe
(supra)
at paragraph 36:
“
[36]
First, approaching a court before the higher administrative body is
given the opportunity to exhaust its own existing mechanisms
undermines the autonomy of the administrative process. It renders the
judicial process premature, effectively usurping the executive
role
and function. The scope of administrative action extends over a wide
range of circumstances, and the crafting of specialist
administrative
procedures suited to the particular administrative action in question
enhances procedural fairness as enshrined
in our Constitution.
Courts have often emphasised that what constitutes a 'fair' procedure
will depend on the nature of the administrative action and
circumstances of the particular case. Thus, the need to allow
executive agencies to utilise their own fair procedures is crucial
in
administrative action.
"
(Court’s
emphasis)
[30] In the present application I find
that the point in limine must succeed if all the arguments, evidence
and precedents are considered.
Therefore the court has to consider
the exemption application before deciding the matter.
The exemption application:
[31] The exemption application was only
filed on 1 November 2013, although the point in limine was raised on
24 July 2013.
[32] This court has to decide whether
the internal remedy in terms of section 50 of the Act would not
provide the applicant with
effective redress. The court has to
consider the nature of the internal remedy to enable it to establish
whether exceptional circumstances
exist or that it is in the interest
of justice to exempt the applicant from the provisions of section
7(2)(a) of PAJA.
[33]
The court was referred to
Tantoush v
Refugee Appeal Board and Others
[2007] ZAGPHC 191
;
2008 (1) SA 232
(T)
paragraph
82 by the applicant’s counsel. However, this application is
distinguishable and the part of the authority the court
was referred
to, contains no applicable principles or facts pertaining to the
present application. In the Tantoush matter (supra)
Murphy J found
that the Appeal Board was biased and unfair, which cannot be said to
be so in the present case.
[34] This is not the case in the present
application, as there is no indication by the applicant that the
Appeal Board would be
biased. Although the applicant contends that
the applicant only received a partial hearing and its’ right to
the audi alteram
partem rule was denied, this court cannot find that
the Appeal Board cannot cure these complaints. Even if the Appeal
Board refers
the matter back to the
Appeal Committee the Appeal Committee
would consist of new members.
[35] The applicant seeks exemption from
the duty to exhaust its internal remedy as provided for in section 50
of the Act. The applicant
relies on the founding affidavit of Mr van
der Merwe, in the main application in the exemption application. The
first and second
respondents relied on the allegations made in the
answering affidavit, but also replied to the exemption application.
[36]
In
Bato Star Fishing (Pty) Ltd v
Minister of Environmental Affairs and Others
[2004] ZACC 15
;
2004 (4) SA 490
(CC)
O’Regan J
held at paragraph
48:
“
[48]
In treating the
decisions of
administrative agencies with the appropriate respect, a Court is
recognising the proper role of the Executive within
the Constitution.
In doing so a Court should be careful not to attribute to itself
superior wisdom in relation to matters entrusted
to other branches of
government. ”
and further:
This does not
mean, however, that where the decision is one which will not
reasonably result in the achievement of the goal, or
which is not
reasonably supported on the facts
or not
reasonable in the light of the reasons given for it, a Court may not
review that decision. A Court should not rubber-stamp
an unreasonable
decision simply because of the complexity of the decision or the
identity of the decision-maker.
”
(Court’s
emphasis)
[37] It must be noted that although the
applicant knew that the respondents would rely on a point in limine
since 23 July 2013 and
had the opportunity to deal with this point in
limine, the applicant did not regard it of sufficient importance to
deal with it
as soon as could reasonably be expected. The applicant
waited until 1 November 2013 to file and serve the application for
exemption
in terms of section 7(2)(c) of PAJA.
[38] The mere launching of the exemption
application in terms of section 7(2)(a) of PAJA is contradictory to
the allegation by the
applicant that it has no duty to exhaust any
internal remedy, as the Appeal Board lacks the power to set aside
decisions of the
Appeal Committee on review grounds of irregular
procedure. The applicant cannot rely on both. The only inference the
court can
draw from this is that the applicant concedes that it had a
duty to exhaust all internal remedies in terms of section 50 of the
Act unless it was exempted due to exceptional circumstances or the
interest of justice, which the applicant did not do.
[39] In the case of
Nichol (supra)
the Supreme Court of Appeal found at paragraph 16:
“
[16]
Counsel for the registrar and the FSB submitted that, while there is
no definition of 'exceptional circumstances' in PAJA,
these must be
circumstances that are out of the ordinary and that render it
inappropriate for the court to require the s 7(2)(c)
applicant first
to pursue the available internal remedies.
The
circumstances must in other words be such as to require the immediate
intervention of the courts rather than resort to the applicable
internal remedy.’’
(Court’s
emphasis)
[40] I cannot find in this instance,
that the immediate intervention of the court is required in the
present circumstances.
[41] The applicant did not allege that
section 50 of the Act does not confer wide powers on the Appeal
Board. Nowhere did the applicant
contend that the Appeal Board will
not be able to give effect to the applicant’s right to
administrative justice. There is
no indication by the applicant that
the Appeal Board is tainted or compromised in any way.
[42] This court can find no reason as to
why the Appeal Board will not be able to afford the applicant relief
as set out in the
main application. I cannot find that the applicant
has established exceptional circumstances which justify exemption in
the interest
of justice. Therefore the applicant has to exhaust all
the internal remedies in terms of section 7(2)(C) of PAJA, before a
review
application will be entertained by this court.
[43] The application for exemption has
to be dismissed.
The application to strike out:
[44] The court has to deal with is the
application to strike out the replying affidavit of Mr Dennis van der
Merwe dated 12 November
2013 alternatively paragraphs 4, 5, 7, 8, 11,
12.1, 12.2, 14.2 and 15.2.
[45] According to the first and second
respondents the allegations in these paragraphs are irrelevant,
scandalous, argumentative
and contain matter which is not in reply to
the first and second respondents answering affidavit.
[46] This replying affidavit was only
served and filed on 12 November 2013, the date the application was
set down for argument.
I cannot contemplate that Mr van der Merwe can
decide on behalf of the first and second respondents that the filing
of their answering
affidavit was unnecessary, it is for a party to
decide whether to answer. Therefore I agree that paragraphs 11, 12.1
and 12.2 should
be struck out. The same applies to paragraph 5, as it
is for the court to decide who should pay the costs and this
paragraph is
struck out as irrelevant and argumentative.
[47] The application was set down for
hearing on 12 November 2013 and not 11 November 2013, although the
applicant’s attorney
and counsel did attend court on 11
November 2013 as they had not received the roll. Paragraph 4 sets out
the history of how the
matter was handled, which I find totally
irrelevant in the adjudication of the application. Paragraph 4 is
thus struck out.
[48] Paragraphs 7 and 8 are
argumentative and irrelevant to adjudicate the main and exemption
applications and are struck out.
[49] I will allow paragraph 14.2 to
stand as it is. Paragraph 15.2 is a legal argument and should
therefore be struck out as irrelevant,
argumentative and does not
contain facts to oppose the first and second respondents allegations.
[50] Therefore the following orders are
made:
1.
The main application is dismissed with costs;
2.
The exemption application is dismissed with
costs;
3.
The application to strike out paragraphs 4, 5, 7,
8, 11, 12.1, 12.2, 15.2 is granted.
Judge C Pretorius
Case number: 2639/2011
Head on: 13 November 2013
For the Applicant: Adv E Fagan Sc
Instructed by: Webber Wentzel
For the Respondent: Adv AJ Lapan
Instructed by: Routledge Modise INC
Date of Judgment: 27 November 2013