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[2011] ZAGPPHC 209
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Govender NO v Profmed Medical Scheme and Others (A 900/2008) [2011] ZAGPPHC 209 (30 November 2011)
REPORTABLE
IN
THE NORTH GAUTENG HIGH COURT, PRETORIA
Case
No.: A 900/2008
Date:30/11/2011
In
the matte
VASAGEE
GOVENDER
N.O
.......................................................................................
Appellant
And
PROFMED
MEDICAL
SCHEME
......................................................................
First
Respondent
THE
CHAIRPERSON OF THE APPEAL BOARD
FOR
THE MEDICAL
SCHEMES
................................................................
Second Respondent
JUDGMENT
INTRODUCTION
i.
The appellant, the executor of the deceased estate of Mahendran
Neelapithambaran Govender ("the deceased"), appeals
against
the judgment of the Court a quo (Tolmay AJ, as she then was), in
which she reviewed and set aside a decision of the second
respondent,
constituted in terms of section 50 of the Medical Schemes Act 131 of
1998 ("the Act"), which decision confirmed
the decision of
the appeal sub-committee of the Council for Medical Schemes, that the
first respondent was not entitled to terminate
the deceased's
membership of the first respondent ab initio.
2.
The appeal comes before this Court with leave of the Court a quo.
THE
PARTIES
3.
The first respondent is PROFMED MEDICAL SCHEME, a medical scheme duly
registered in terms of s 24 of the Act, having its principal
place of
business at 6 Anerly Road, Parktown, Johannesburg and having the
necessary capacity to sue and be sued in its own name.
4.
The second respondent is THE CHAIRPERSON OF THE APPEAL BOARD FOR THE
COUNCIL FOR MEDICAL SCHEMES, cited in her capacity as such
of the
Appeal Board for the Council for Medical Schemes, as constituted in
terms of section 50 of the Act.
5.
The appellant has been identified in par 1. supra.
THE
CHRONOLOGY AND SALIENT COMMON CAUSE FACTS
6.
During 1999, the deceased applied to join the first respondent
("Profmed"). An application form was completed and
dated
the 1st August 1999. At the time the deceased was a member of PPS,
the Professional Provident Society, a company associated
with
Profmed.
7.
The deceased was at all relevant times a student without any
significant income of his own. He was the son of dr P N Govender,
a
family physician who had at the time of the application being made to
Profmed, been in practice for roughly forty years. His
practice was
conducted from the Merebank Medical Centre. His son, the deceased,
stayed with his parents at all relevant times.
8.
The application form was received a Profmed's Durban offices on or
about the 9th November 1999 and faxed to Profmed's Johannesburg
offices on the 12th November 1999 to be processed.
9.
The application form was signed by the deceased, purportedly on the
1st August 1999. It emerged during the various stages of
this
protracted litigation that the deceased did not complete the form
himself. In his own evidence under oath before the Disputes
Committee
he alleged that the broker who presented the application forms to
him, Mr Ravi Naidoo, was responsible for the completion
of the
document. This was subsequently denied by Mr Naidoo in his evidence
before the Appeal Board for the Council for Medical
Schemes. The form
was in all probability completed either by dr Govender or by the
deceased's brother. The implications of the
contradictory versions
put up by the deceased and Mr Naidoo will be considered below,
10.
The fact that the application form, allegedly signed on the 1st
August 1999, was only received by Profmed's agent, Sanlam, at
their
Durban offices on the 9th November 1999 was never satisfactorily
explained. Mr Naidoo alleged that he collected the completed
application forms from dr Govender's practice toward the end of
August 1999. He testified that he delivered the form to Sanlam
within
a few days, as he would normally do.
11.From
Mr Lombard's evidence, which he gave in his capacity as Sanlam
representative, it was clear that no application form addressed
to
Profmed could or would ever lie around in Sanlam's offices for months
before being processed.
12.On
the probabilities the application form only reached Sanlam's offices
on or about the 9th November 1999. If this is correct,
a shadow of
irresolvable uncertainty is cast over the date upon and the manner in
which the application form was completed. A reading
of the record
reveals no evidence that would dispel the uncomfortable suspicion
that the application form was created only after
the full extent of
the tragedy that had befallen the deceased had become clear to the
iatter and to his family, particularly his
father.
13.The
deceased's application was accepted by Profmed. The effective date of
acceptance
was the 1st November 1999.
14.The
application form did not disclose that the deceased was suffering
from any medical condition that could be regarded as a
significant
risk to life and limb.
15.
Neither the deceased nor his father or any other person acting on the
deceased's behalf informed Profmed of a change that occurred
in the
deceased's health between the date appearing on the application form,
1s-August 1999, and the date it was received by Profmed,
9th November
1999, the date the application was referred to the Johannesburg
offices, the 12th November 1999, or the date upon
which the deceased
was accepted as a Profmed member.
16.The
deceased was suffering from a dry cough during late September and the
beginning of October 1999 and experienced night sweat
and shortness
of breath.
17.
On the 7th October 1999 a chest X-ray revealed the presence of a
large anterior mediastinal mass, in other words a growth in
the
deceased's chest. An open chest biopsy was performed on the 9th
October 1999 and on the 14th October 1999 the deceased and
his family
received the devastating news that he was suffering from a
non-Hodgkins aggressive B-celi lymphoma, a form of cancer.
18.
Treatment of the cancer commenced immediately by chemotherapy and
radiation. The treatment was administered by dr Landers, who
prepared
a first report dated 19th October 1999, in which he recorded that the
deceased had been suffering from a dry, non-productive
cough for two
months prior to this report being prepared. After consultation with
the deceased's attorney, Mr Omar, who represented
both him and his
deceased estate at all stages of the litigation, dr Landers inserted
a note into his report that indicated that
the cough had been present
for only three weeks prior to the cancer being diagnosed.
1
19.The
cancer treatment was obviously expensive and highly uncomfortable for
the deceased.
20.The
deceased's application and its acceptance was governed by Profmed's
1998 Rules that were applicable in 1999. Rule 15 thereof
provides
that Profmed may, inter alia, terminate a member's membership if the
latter failed knowingly to disclose the existence
of relevant facts
relating to the applicant's state of health prior to acceptance of
the member as such.
2
21.
On the 15th December 1999 Dr P N Govender addressed a letter to
Profmed in which he recorded that the deceased, at that stage
still
wholly dependant upon dr Govender, "whilst in the process of
seeking membership to PROFMED,... was diagnosed as having
a virtual
silent anterior mediastinal mass which on biopsy has been diagnosed
as non Hodgkins Aggressive B cell Lymphoma highly
responsive to
Chemotherapy (CHOPS) and Radium Therapy. ...I place my sons (sic)
case before your Medical Board for appraisal and
membership of
Profmed, which will enable him to cover the services stated."
22.This
letter was sent to a Cape Town address that was incomplete. It was
never received by Profmed. (Profmed does have an office
in Cape Town
at an address that differs significantly from the one that appears on
the letter). It is the only letter ever addressed
to Profmed by the
deceased or any of his family members or representatives that was not
sent to Profmed's Durban or Johannesburg
offices.
23.This
letter, it should be remarked in passing, clearly indicates, as will
be dealt with in greater detail below, that dr Govender
was fully
aware of the importance of disclosing any medical condition that
might arise between the date of the application for
membership of the
medical fund and the date of acceptance thereof.
24.
Once Profmed approved the deceased's application for membership, it
dispatched a certificate of membership together with other
membership
documents to dr Govender's practice, which his sons used as contact
address. Part of this documentation was a copy of
Profmed's general
conditions. Addendum "P" thereto mirrors the provisions of
Rule 15 as it read at that stage.
3
25.
(Again in passing, it must be observed that the content of this
addendum would have come as no surprise to dr Govender or his
sons.
Mr Naidoo testified that dr Govender dealt with numerous insurance
claims as a family physician and would have conducted
many medical
examinations for insurance purposes. It is only reasonable to assume
that the need to make full disclosure of relevant
medical facts when
concluding an agreement with a medical fund must have been discussed
in the Govender household.)
26.
No disclosure was made to Profmed after receipt of the membership
documentation of the terrible fate that had befallen the deceased.
On
the 16th May 2000 dr Govender addressed a letter to Profmed in which
he pleaded with Profmed to reimburse him in respect of
the medical
expenses he had incurred on behalf of his son since the previous
year. The relevant portions of this letter read:
"In
October 1999, we discovered to our horror and mortification that our
very athletic, outdoor type son of 31 years old was
suddenly smitten
with an anterior mediastinal mass realisation that our child was
smitten with cancer was total devastation.
I
subjected him to treatment not minding the cost. Checking on my
medical aid was the last thought in my mind until in April 2000,
I
received intimation of the restructuring of the medical aid …
It
then dawned upon me that I had failed to utilise the services of the
medical aid..."
27.
in the meantime, the deceased pursued, with his father's assistance,
payment of his medical expenses on the basis of his own
Profmed
membership. On the 5th July 2000 Profmed sent a letter to the
deceased in response to various enquiries in this connection
regarding the payment of the deceased's treatment, in which the
medical fund emphasised that it required "... written
confirmation
of the date of diagnosis from (the deceased) in (his)
capacity as a Profmed member."
28.
In a letter dated the 7th July 2000 Profmed suspended ail benefits of
the medical fund due to the deceased's failure "
... to notify
the Society of your deterioration in health before being granted
Profmed membership." Such suspension was to
last until the full
Profmed Board had taken a final decision.
29.
At the same time the letter recorded that some of the deceased's
medical treatment had in fact been paid under his father's
medical
aid. Profmed gave notice of its intention to reclaim these funds as
they had been paid in error. The allegation that some
of the
deceased's medical costs had been claimed by dr Govender under his
own medical aid was never challenged in evidence.
30.The
deceased immediately declared a dispute with Profmed regarding the
suspension of his benefits. As he was about to undergo
a bone marrow
transplant, an urgent preliminary hearing was held before the
Disputes Committee, which upheld Promed's decision
to suspend the
deceased's benefits pending cancellation of his membership being
considered by Profmed's Board.
31.
On the 26th and 27th June 2001, the Disputes Committee of Profmed,
chaired by adv Mike Hellens SC, held a hearing at which the
deceased
testified. He was legally represented by Mr Omar, as stated above.
32.
During his testimony the deceased confirmed that he was aware of the
cautionary note on the application form for Profmed membership
that a
full disclosure of all relevant facts was required. He knew that a
failure to observe frankness could lead to the agreement
between the
deceased and Profmed being cancelled.
33.
The deceased had to admit that the change in his medical condition
occurred before his application for membership was approved
by
Profmed and that he failed to inform the medical fund of this fact.
His explanation was that the pending application "..was
the
furthest thing from (his) mind."
34.
At the latest from this date, therefore, it is common cause between
the parties that Profmed approved the application while
the true
state of affairs regarding the deceased's health was not disclosed to
it.
35.
The Disputes Committee had no hesitation to reject the evidence
presented by the deceased and his legal representative. It drew
a
negative inference from the fact that dr Govender did not testify and
did not explain his letters to Profmed. It held that the
application
form was in all probability backdated and was definitely presented to
Profmed after the deceased and his family were
fully aware of the
deceased' terrible medical prognosis. The deceased's assertion that
he had not thought of his pending application
for membership during
his illness was rejected as false. It was found that the deceased and
his family had conspired to defraud
Profmed by a backdated
application form purportedly having been delivered to Sanlam in
Durban prior to the discovery of the deceased's
cancer.
36.
The deceased appealed to the Appeal Sub-Committee of the Council for
Medical Schemes. By the time of the hearing on the 26th
May 2003 the
deceased had passed away and his executor represented the estate.
Without discussing the evidence presented to the
Disputes Committee
in any detail, and paying scant attention to any legal issue the
Sub-Committee concluded that the deceased had
to be believed that his
pending application was furthest from his mind during the critical
period. Consequently it could not be
held "... that the
complainant (deceased) either falsely, or knowingly, deliberately
failed to disclose his medical condition
to the scheme."
37.
The Sub-Committee further found that Profmed would in any event have
been compelled to accept the deceased's application because
it was
prohibited from refusing any application on the grounds of any
pre-existing medical condition by the provisions of section
29(1 )(n)
of the Act.
38.lt
also held that the unilateral suspension of the deceased's benefits
on the 7th July 2000 was procedurally unfair.
39.
Profmed appealed to the Appeal Board for the Council for Medical
Schemes in terms of section 50(3) of the Act. The Appeal Board
decided to call Mr Naidoo to give oral evidence for the first time at
this stage of the litigation. The ruling, against Profmed's
objection, was unsuccessfully taken on review by the medical fund.
That application was dismissed on the 8th February 2005.
40.
Mr Naidoo testified that he delivered the application forms and
collected the completed forms from dr Govender's practice at
the end
of August or the beginning of September 1999. He delivered these
forms to Sanlam within a few days. He was unable to explain
the huge
delay that occurred thereafter before the applications were processed
as from the 9th November 1999.
41.The
Appeal Board accepted Naidoo's evidence, concluded that the delay in
finalising the applications could not be explained but
that Naidoo's
evidence excluded any possibility that the applications had been
backdated with fraudulent intent as held by the
Dispute Committee.
The Board did not refer to Lombard's evidence in this connection at
all, but concluded that the deceased's and
his brother's application
forms had been completed by their father.
42.The
Board further held that the deceased's and his father's failure to
disclose that the deceased had been diagnosed with cancer
was
immaterial given the desperate circumstances that prevailed at that
time in the Govender household. The Board referred in this
regard to
Joubert v Absa Life Ltd
2001 (2) SA 322
(W), '...to the extent
relevant'The Board added in par [117] of its judgment: 'In our
Judgment (sic), the deceased, and/or his
father, acting as reasonable
men in the circumstances, did the best they could. Whilst they did
not inform Profmed within 18 days
of the initial period spoken of
above, there is evidence that shortly after they received such
Profmed Acceptance Notification,
they did communicate (or attempt to
communicate) a full disclosure by letter, at least." (The letter
referred to is dr Govender's
letter of the 15th December addressed to
the incomplete Cape Town address.)
43.The
Board consequently held that the failure to advise Profmed within the
period of eighteen days between the discovery of the
deceased's
illness and his acceptance as member of the medical fund had to be
excused and Profmed was not entitled to terminate
the deceased's
membership on the grounds of non-disclosure of essential information.
44.
The Board found support for its approach in the provisions of section
29(1 )(n) of the Act, which reads:
"29.
Matters for which rules shall provide.—(1) The Registrar shall
not register a medical scheme under section 24, and
no medical scheme
shall carry on any business, unless provision is made in its rules
for the following matters:
(n)
The terms and conditions applicable to the admission of a person as a
member and his or her dependants, which terms and conditions
shall
provide for the determination of contributions on the basis of income
or the number of dependants or both the income and
the number of
dependants, and shall, not provide for any other grounds, including
age, sex, past or present state of health, of
the applicant or one or
more of the applicant's dependants, the frequency of rendering of
relevant health services to an applicant
or one or more of the
applicant's dependants other than for the provisions as prescribed.
46.
As the section provides for what was termed during the various stages
of these proceedings as 'open enrolment', the Board was
of the view
that Profmed was in any event not entitled to refuse the deceased's
application for membership, even had it been aware
of the deceased's
illness. The failure to disclose a serious illness detected before
acceptance of an application for membership
was therefore immaterial.
47.
The Board therefore held that Profmed's appeal had to be dismissed
and ordered that the estate ought to be reimbursed urgently
in
respect of all medical expenses incurred to treat the deceased's
condition.
48.
After having made its original order, the Board supplemented this
determination by quantifying an award to the estate after
a dispute
arose between the latter and Profmed. This supplementary award was
made without prior reference to the parties, some
three months after
the original award..
49.
Profmed launched a review to this court against both decisions.
Tolmay AJ, (as she then was), reviewed the Board's decision
and set
aside both awards. The first award was set aside on the grounds that
the Board failed to take relevant evidence into consideration,
particularly the differences in the evidence of the deceased and Mr
Naidoo, and failed to accord sufficient weight to the failure
on the
part of the deceased to make full disclosure of his medical condition
while his application for membership was pending.
The Board was
furthermore held to have failed to properly consider, interpret and
appreciate the conditions of acceptance that
governed the deceased's
acceptance as a Profmed member and consequently dismissed Profmed's
appeal on irrelevant grounds. The second
award was set aside because
the Board was clearly functus officio once the first award had been
made and was therefore not empowered
to issue any further order,
particularly one as procedurally flawed as the one under discussion..
50.
The estate appealed with leave of the court a quo to this court. The
various grounds of appeal will be dealt seriatim and the
relevant
decisions of the Board and the court a quo will be considered in the
light thereof.
51
THE ALLEGED INAPPLICABILITY OF REVIEW PROCEEDINGS
a)
The appellant argued that a review application was inapplicable as
the Board's decision was not such that it could be reviewed,
particularly in that it could not be said that the Board's decision
was one which no reasonable decision-maker could take in terms
of s
6(2)(h) of the Promotion of Administrative Justice Act 3 of 2000
("PAJA").
b)
This submission is untenable. As wiii be shown below, the Board
failed very significantly to consider relevant evidence, made
a wrong
assessment of in particular Naidoo's evidence as a result thereof;
failed to appreciate the import of the conditions attaching
to an
application for Profmed membership, committed a serious error of law
in concluding that the failure to disclose the deceased's
medical
condition could be disregarded as being excusable and committed a
further grave error of law in failing to appreciate the
effect of the
so- called 'open enrolment'. Its reference to the decision of Joubert
v Absa Life Ltd, supra is misplaced as the
decision provides no
support for any of its conclusions. Not only section 6(2)(h) of PAJA,
but also section 6(2)(d) and 6(2)(f)(ii)(cc)
apply to the Board's
decision. In the result, its decision is one that no reasonable
decision maker could come to. It was therefore
clearly reviewable.
52.
WHETHER THE DECEASED (AND HIS FATHER) KNOWINGLY FAILED TO INFORM
PROFMED OF HIS CHANGED MEDICAL CONDITION.
a)
It is clear that, for the reasons set out above, no-one in the
Govender household could ever have been under any misapprehension
that it was imperative for the acceptance of the deceased's
application for Profmed membership to disclose the serious illness
that he had been diagnosed with.
b)
Even if it could be argued that the application form was indeed
signed on the 1st August 1999 - which, as will be demonstrated
below,
is highly unlikely -there can be no debate about the fact that the
deceased and his family failed for at least eighteen
days to disclose
this fact.
c)
Given the extreme cost of the medical procedures the deceased was
subjected to immediately his cancer was diagnosed, it is simply
impossible that neither the doctor father nor the patient son could
not have turned their thoughts to the question who would foot
the
very significant medical bills that would have to be met. The very
suggestion that no thought would be given to this elephant
in the
room is outlandish and must be rejected out of hand.
d)
The conclusion that the failure was deliberate - or, worse, that the
application had in fact not been made before November 1999
- is
unavoidable in the light of the fact that the deceased contradicted
the evidence of Mr Naidoo regarding the identity of the
person who
completed the application form. If dr Govender did in fact do so, as
opined by the Board, the failure to tender his
evidence to explain
the date upon and the circumstances under which the form was
completed justifies a negative inference. Mr Naidoo's
explanation
that
the form was delivered to Sanlam at the end of August 1999 - for
which he has no proof of delivery or acknowledgment of receipt
-
appears highly suspect. There simply is no explanation how two
applications that were duly delivered could have languished in
Sanlam's offices for longer than two months undetected by anyone and
then emerge for processing in the ordinary course of events.
Mr
Lombard's evidence in this regard was simply ignored by the Board.
The fact that the only two applications to have suffered
this fate
happen to be the two delivered by Mr Naidoo oniy heightens the
suspicious circumstances. If one adds the strange feature
that Naidoo
never enquired from Profmed about the fate of the applications - nor
did the Govenders, not even after the discovery
of the deceased's
cancer - while their processing took far longer than usual, the
discomfort becomes significant indeed. If the
letter by dr Govender
to Profmed to the incomplete Cape Town address is added to these
unsatisfactory features, as well as the
fact that he did claim for
his son's medical expenses under his own medical aid, all of which
remains unexplained, the conclusion
is inescapable that the
application form was completed and delivered to Profmed at the
beginning of November 1999. If so, the Dispute
Committee was correct
in holding that the application represents a fraud upon Profmed:
e)
The Board never considered a single one of the above considerations
and therefore clearly ignored relevant and significant evidence.
f)
But even if the conclusion that the Govenders attempted to defraud
Profmed is incorrect, there can be no argument about the fact
that
the deceased and his father knowingly failed to disclose the truth to
Profmed. Dr Governder's professional appreciation of
the need to take
a medical fund into their confidence has been dealt with above. The
deceased was aware of the content of the application
form which
included a reference to the need for openness and honesty in his
dealings with Profmed.
g)
The word 'knowingly' has been interpreted to mean 'fully aware' or
'with full knowledge of the facts'. It can also mean 'well
informed'
or 'possessed of the necessary knowledge'. Mark Twain writes in
Chapter XXVII of A Connecticut Yankee: "There are
wise people
who talk ever so knowingly and complacently about 'the working
classes'. " In legal parlance the word has been
accepted as
meaning to have knowledge of the facts from which a conclusion -often
negative - is sought to be drawn: Philotex (Pty)
Ltd & Others v
Snyman & Others; Braitex (Pty) Ltd & Others
[1997] ZASCA 92
;
1998 (2) SA 138
(SCA) at 143A - B; per Howie JA (as he then was); Triptomania Two
(Pty) Ltd & Others v Conolly & Another 2003 (3) 558 (C)
at
562 B - G. In Howard v Herrigel & Another NNO
[1991] ZASCA 7
;
1991 (2) SA 660
(A)
Goldstone JA (as he then was) said the following at 672G-673I:
"In
the Court a quo, Morris AJ was clearly aware that for an order to be
made against Howard under section 424(1) it had to
be established
that he was "knowingly a party to the carrying on of the
business in the manner aforesaid", i.e. "recklessly
or with
intent to defraud creditors of the company or creditors of any other
person or for any fraudulent purpose". With regard
to the
necessary element of knowledge, Morris A J correctly observed in his
judgment that:
"...
where the legislature has specifically introduced the word 'wetens'
or 'knowingly' specific knowledge is to be proved,
not by the
respondent/defendant (or by the accused) but on the pari of the
accuser."
The
reference to an "accused" arises from the provisions of
section 424(3) which read as follows:
"(3)
Without prejudice to any other criminal liability incurred, where any
business of a company is carried on recklessly or
with such intent or
for such purpose as is mentioned in subsection (1), every person who
was knowingly a party to the carrying
on of the business in the
manner aforesaid, shall be guilty of an offence."
In
my opinion the word "knowingly" must be given the same
meaning in both subsections (1) and (3) of section 424. In S
v
Parsons en h Ander
1980 (2) SA 397
(D) at 400 F, Leon J held that the
word meant "met kennis van die feite". That conclusion
finds strong support from the
judgment of Schreiner JA in R v
Thornton and Another
1960 (3) SA 600
(A). The statutory provision
there relevant was section 10(1) of the Rents Act, 43 of 1950. It
provided that an offence would be
committed if a lessor "knowingly
required or permitted a lessee to pay" a rent for controlled
premises exceeding that
determined by a rent board. At 611 F - 612 A,
the learned Judge of Appeal said the following:
"
Although we are not here concerned with the general question of mens
rea in statutory offences it is useful. I think, to
have regard to
the well-known statement by STEPHEN, J., in Cundy v Le Coca,
13
Q.B.D. 207
at p. 210, that 'it is necessary to look at the object of
each Act that is under consideration to see whether and how far
knowledge
is of the essence of the offence created'.
In
sec 10(1) we have the word "knowingly", so that no question
of whether knowledge is essential arises; but the question
of how far
it is essential remains. The general rule is that even where
knowledge is required it need not extend beyond the facts
into the
legal consequences flowing therefrom. So in Twycross v Grant, 2 CPD D
469, a civil case dealing, inter alia, with the
meaning of "knowingly
issuing" a prospectus in which mention was omitted of certain
contracts which should have been
mentioned, COCKBURN, C.J., at p.
541, said-
'Next,
was the prospectus issued by the defendants 'knowingly' within the
meaning of the section? It was contended that the term
'knowingly'
must be taken to mean with a knowledge that the contracts were such
as the statute required to be referred to: consequently,
that, the
jury having found that the mention of the contracts was omitted from
the prospectus from a bona fide belief that such
mention was
unnecessary, the contracts had not been 'knowingly' omitted. But this
is to misconceive the meaning of the term. 'Knowingly
issuing' means
neither more nor less than issuing with a knowledge of the existence
of the contracts within the section, and the
intentional omission of
them from the prospectus. Ignorance or mistake of the law cannot be
admitted as an excuse for disobeying
an Act of Parliament.'
I
read the last sentence in its context as providing a reason for
interpreting 'knowingly' as meaning 'with knowledge of the facts."'
After
referring to other authorities, the conclusion of Schreiner JA was
expressed thus at 612 H.
"In
my view the word 'knowingly' in sec 10(1) means only that the party
providing the premises must know of the determination
and that he is
receiving from the party who is being given use and occupation sums
in excess of the determination. It matters not
what his views are on
the nature of the legal relationship between himself and the other
party or on the proper legal description
of the sums received by
him.""
h)
The Board paid no heed to these authorities which leave no room for
the suggestion that a failure to act in accordance with the
Govenders' knowledge of the facts could be excused on the grounds of
emotional distress or the reasonableness of their actions
under the
circumstances. The Board's conclusions in this regard represent a
grave misdirection and resulted in a failure to act
in accordance
with the correct interpretation of the conditions that applied to the
application for membership. Its decision must
therefore be reviewed,
as the Court a quo correctly concluded.
53.
WHETHER THE PROVISIONS OF SECTION 29(1)(n) CAN BE RELIED UPON TO
EXCUSE THE FAILURE TO DISCLOSE THE TRUE STATE OF AFFAIRS TO
PROFMED
a)
It was argued at all stages of this litigation on the estate's behalf
that the so-called 'open enrolment' decreed by this sub-section
of
the Act rendered the failure to disclose the truth irrelevant, as the
medical fund, Profmed, was in any event obliged, so the
argument ran,
to accept the deceased as a member, regardless of his medical
condition.
b)
This argument ignores the fundamental reason why Profmed and any
other medical fund is entitled to insist upon honest and unlimited
disclosure of all relevant facts. The duty to disclose is coupled in
Rule 15, quoted above, with the prohibition of false claims
being
made against Profmed. The true purpose of the demand for full
disclosure is to establish the basis of bona fides upon which
the
member and Profmed must interact with one another as long as the
successful applicant remains a member. If an applicant fails
to
observe this standard, as the deceased manifestly did, Profmed is
entitled to terminate the relationship that cannot be conducted
on
any other basis but that of mutual trust.
c)
The nature of any medical condition the applicant suffers from when
the application is made is not relevant in this context -
the honesty
of the communication made to the medical fund is the touchstone of
the application form properly completed.
d)
The very existence of the provisions of section 29(1 )(n) - of which
the Govenders were obviously aware - provides further proof
of the
fact that the application form was completed long after the deceased
had been diagnosed with cancer. The open enrolment
provision ensured
that the deceased could safely disclose all medical conditions he
suffered from. Had he done so in November 1999,
his father would have
had to bear all the medical expenses incurred before his acceptance
as a Profmed member. The probabilities
are that the intention was to
persuade Profmed to accept responsibility for these disbursements by
backdating the application form.
e)
Again, the Board completely misconstrued the facts and the law in
respect of this finding, rendering it liable to be reviewed
and set
aside.
54.
THE SETTING ASIDE OF THE SECOND DECISION
The
Board took the second decision that dealt with a material aspect of
the dispute between the parties without prior reference
to them,
without affording them an opportunity to deal with the intended order
and long after the proceedings had been concluded.
It was so clearly
functus officio and its second decision was so obviously irregular
that no more than the mere recital of the
facts is required to
establish that the second decision must be reviewed and set aside.
Any argument to the contrary is ill-founded.
55.
THE ALLEGED FAILURE TO REMIT THE MATTER TO THE BOARD.
In
the light of the above findings it is clear that only one conclusion
could possibly have been reached by the Board, namely that
Profmed's
appeal should have been upheld. It would have been a mere exercise in
delay to remit the matter, apart from the fact
that the Board had
clearly demonstrated an inability to grasp the issues it was
confronted with. There is no merit in this ground
of appeal.
56.
THE COUNTER APPLICATION
From
the above facts it emerges clearly that the deceased was at no stage
entitled to any benefits as a Profmed member. The alleged
failure to
grant a hearing to the deceased prior to his suspension is therefore
irrelevant - it is clear that he exercised every
possible right at
his disposal since the suspension. The counter application is doomed
to fail and need not be discussed any further.
THE
ORDER
The
appeal is dismissed with costs. Such costs are to include the costs
of two counsel.
Signed
at Pretoria on this 30 day of November 2011
E
BERTELSMANN
Judge
of the High Court
I
agree
FG
PRELLER
Judge
of the High Court
I
agree
EM
MAKGOBA
Judge
of the High Court
1
Dr Landers was severely taken to task by the chairperson and members
of Profmed's Disputes Committee for having inserted the
note and
having failed to inform the Disputes Committee thereof during his
evidence in chief before it.
2
The
relevant part of the Rule reads as follows:
"FALSE
STATEMENTS OR ABUSE OF PRIVILEGES -
15.1
If
the Committee suspects that a member, at the time of his application
for membership of the Fund or of any previous fund to
which he
belonged, or subsequent application for registration of a dependant,
made false statements or knowingly failed to give
full information
on the state of health or past medical history of either himself or
of his dependants, or if the Committee finds
the member guilty of
abusing the privileges of the Fund, it shall inform the member
accordingly. If after the consideration of
the reply by the member,
the Committee is satisfied that its suspicions are well-founded, the
Committee may, subject to Rule
37:
15.2
terminate
the membership of such member with effect from such date as it may
determine,, with the proviso that no contributions
paid by the
member shall be refunded to him...."
3
"One of the conditions for honouring future claims, is that
there should have been no deterioration in the state of health,or
where applicable, in the state of health of snv of the dependarts,
since completing the Application, if a Doctor or Specialist
has been
consulted in the interim or if any illness or injury has occurred or
if there has been any deterioration in the state
of the Member's
health since applying for cover, the onus rests on the Member to
disclose this in full to the Society, failure
to do so may be
prejudicial in the event of a claim"