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[2020] ZASCA 29
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Medihelp v Minister of Finance NO (1387/2018) [2020] ZASCA 29 (26 March 2020)
THE
SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Not
reportable
Case
No: 1387/2018
In
the matter between:
MEDIHELP
MEDICAL
SCHEME APPELLANT
and
MINISTER
OF FINANCE
NO RESPONDENT
Neutral
citation:
Medihelp
v Minister of Finance NO
(1387/2018)
[2020] ZASCA 29
(26 March 2020)
Coram:
PONNAN,
VAN DER MERWE and MOKGOHLOA JJA
Heard:
26
February 2020
Delivered:
26
March 2020
Summary:
Practice –
pleadings – real import of upholding special plea that
particulars of claim did not disclose a cause of action
– leave
to amend ought to have been granted.
ORDER
On
appeal from:
Gauteng
Division of the High Court, Pretoria (Molopa-Sethosa J sitting as
court of first instance):
1 Save as is set
out in paragraph 2 hereof, the appeal is dismissed with costs,
including the costs of two counsel.
2 The order of the
court a quo is varied by replacing paragraph 2 thereof with the
following:
‘
2.1
It is declared that the plaintiff’s particulars of claim do not
disclose a cause of action and the plaintiff is directed
to pay the
costs of the separated hearing, including the costs of two counsel.
2.2
The plaintiff is granted leave, if so advised, to amend its
particulars of claim within 15 days from the date of this
order.’
JUDGMENT
Van
der Merwe JA (Ponnan and Mokgohloa concurring)
[1]
The appellant, Medihelp Medical Scheme, duly registered as such under
the
Medical Schemes Act 131 of 1998
, sued the respondent, the
Minister of Finance, in the Gauteng Division of the High Court,
Pretoria for payment of members’
contributions owed to it in
respect of a number of its members. In a special plea, the respondent
challenged the appellant’s
locus
standi
in the matter. By agreement the special plea was determined
separately, without evidence, by Molopa-Sethosa J. She upheld the
special plea and dismissed the appellant’s claim with costs,
including the costs of two counsel. The appeal is with the leave
of
this court.
[2]
In its particulars of claim the appellant referred to an agreement
reached by the Public Service Bargaining Council on 4 November
1993,
between, on the one hand, the South African Government as the
employer and, on the other, a number of employee organisations
representing civil servants (the Agreement). The essence of the
Agreement was that the employer agreed to fund medical assistance
for
its employees after retirement or the termination of their service,
on a basis specified in an annexure to the Agreement. The
particulars
hereof are not relevant to the appeal.
[3]
In the particulars of claim, the appellant also alluded to a general
notice that had been given to members of the appellant
by the
National Treasury on behalf of the respondent on 8 July 2005 (the
General Notice). The General Notice was directed to ex-employees
of
the South African Government who were members of the appellant and
received benefits under its Medihelp 100 benefit option.
It informed
these members that by reason of a decision of the Council of Medical
Schemes, that option would no longer be available.
It proceeded to
state that these members were entitled to join any approved benefit
option of a registered medical scheme. The
General Notice referred to
the Agreement and emphasised that the State remained bound to make
payment of the members’ contribution
in respect of the new
benefit options thus chosen.
[4]
The appellant further alleged that a number of these members, listed
in an annexure to the particulars of claim (the affected
civil
servants), elected to take up other benefit options with the
appellant. The appellant proceeded to plead that the respondent
had
at all relevant times paid the members’ contributions in
respect of the affected civil servants to the appellant. The
respondent admitted all of these allegations.
[5]
The nub of the appellant’s case was pleaded as follows:
‘
The defendant, despite the
granting by the plaintiff of membership to the affected civil
servants (and their surviving spouses)
and in breach of its
obligations in terms of the Agreement and General Notice, deducted
from the monthly subscription payments
the total sum of R9 997 256.75
being the subscriptions of the 94 affected civil servants listed in
Annexure “MH3”
in respect of past subscriptions paid.’
In
the result it was alleged that the respondent was indebted to the
appellant in the amount of R9 997 256.75, as well
as
mora
interest thereon.
[6]
In the special plea the respondent pointed out that, on its own
pleadings, the appellant was not a party to the Agreement and
the
General Notice was directed to the affected civil servants. It thus
concluded that ‘there being no privity of contract
between the
Plaintiff and the Defendant, the Plaintiff has no locus standi to
assert any rights or obligations which attach to
an agreement to
which it is not a party.’
[7]
A person might lack standing to sue or be sued in either of two
circumstances. The first is where the person is in law not capable
of
suing or being sued, such as an unassisted minor or a person
suffering from a mental disorder. The second is where the person
indeed has such capacity, but has insufficient interest in the
proceedings. See
Lupacchini
NO and Another v Minister of Safety and Security
[2010]
ZASCA 108
;
[2011] 2 All SA 138
(SCA);
2010 (6) SA 457
(SCA) para 13.
[8]
In respect of the latter circumstance the general rule is that a
party claiming relief in respect of any matter must establish
a
direct interest in that matter. A direct interest is one that is not
academic, abstract or hypothetical. An interest which all
citizens
have, would generally be too remote to found standing. An actual and
existing interest in the matter is required. See
Cabinet
of the Transitional Government for the Territory of South West Africa
v Eins
[1988] ZASCA 32
;
[1988]
2 All SA 379
(A);
1988 (3) SA 369
(A) at 388B-H and
Jacobs
en ‘n Ander v Waks en Andere
[1991] ZASCA 152
;
1992
(1) SA 521
(A) at 534B.
[9]
Standing is thus determined without reference to the merits or
demerits of the claim in question. A contract or administrative
decision may, for instance, patently invalid, but a party may have
insufficient interest in the matter to rely thereon for relief.
A
finding that a party has no standing to sue or be sued generally
brings an end to the action or defence. It follows that it is
not
correct to find a lack of
locus
standi
where a party is of a class of persons that may in principle obtain
the relief claimed, but fails to plead a cause of action in
law.
[10]
What the special plea raised, was that the appellant’s alleged
right to receive payment from the respondent was solely
based on the
Agreement and the General Notice. But, on its own showing, the
appellant was not a party to the Agreement and the
undertaking
contained in the General Notice was not directed to it. In terms of
these documents the respondent was bound to the
affected civil
servants and not to the appellant.
[11]
The appellant clearly had a direct interest in receiving payment of
members’ contributions of some R10 million. But it
failed to
plead a basis in law to hold the respondent liable to make payment
thereof to it. In short, its particulars of claim
did not disclose a
cause of action against the respondent.
[12]
In effect, the parties by agreement requested the court a quo to
determine
in limine
whether the particulars of claim disclosed
a cause of action. By allowing the special plea the court a quo
effectively correctly
held that it did not. This was akin to allowing
an exception against the particulars of claim. As a result, the
dictum
of Ponnan JA in
Ocean Echo Properties 327 CC v Old
Mutual Life Assurance Company (South Africa) Limited
[2018] ZASCA
9
;
2018 (3) SA 405
(SCA) para 8 was applicable:
‘
The
upholding of an exception disposes of the pleading against which the
exception was taken, not the action or defence. An unsuccessful
pleader is given the opportunity to amend the plea, even when the
plea has been set aside because it does not disclose a defence.
The
rationale for this seems to be that although the defence contained in
the pleading may be bad the pleading as such continues
to exist.
Ordinarily therefore the court should grant leave to amend and not
dispose of the matter. Leave to amend is not a matter
of an
indulgence; it is a matter of course unless there is a good reason
that the pleading cannot be amended.’
[13]
It follows that the respondent’s successful argument in the
court a quo should not have resulted in the dismissal of
the
appellant’s claim and that fairness and justice required that
the appellant be afforded the opportunity to amend its
particulars of
claim, if so advised. These matters were raised
mero
motu
by
this court, not by the appellant and do not translate into
substantial success on appeal for the appellant.
[14]
In the result the following order is issued:
1 Save as is set
out in paragraph 2 hereof, the appeal is dismissed with costs,
including the costs of two counsel.
2 The order of the
court a quo is varied by replacing paragraph 2 thereof with the
following:
‘
2.1
It is declared that the plaintiff’s particulars of claim do not
disclose a cause of action and the plaintiff is directed
to pay the
costs of the separated hearing, including the costs of two counsel.
2.2
The plaintiff is granted leave, if so advised, to amend its
particulars of claim within 15 days from the date of this order.’
________________________
C
H G VAN DER MERWE
JUDGE
OF APPEAL
APPEARANCES
For
appellant: H F Jacobs SC
Instructed
by: MacRobert Inc., Pretoria
Claude
Reid Attorneys, Bloemfontein
For
respondent: I A M Semenya SC, N I Mayet
Instructed
by: State Attorney, Pretoria
State
Attorney, Bloemfontein