IN THE HIGH COURT OF SOUTH AFRICA
GAUTENG DIVISION, PRETORIA
COURT A QUO CASE NO.: 60445/21
APPEAL CASE NO.: A288/2023
(1) REPORTABLE: YES / NO
(2) OF INTEREST TO OTHER JUDGES: YES / NO
(3) REVISED
DATE
SIGNATURE
In the matter between: -
SOUTH AFRICAN POLICE SERVICE MEDICAL SCHEME
(“POLMED”) First A ppellant
MEDSCHEME HOLDINGS (PTY) LTD Second A ppellant
V
METROPOLITAN HEALTH CORPORATE (PTY) LTD First R espondent
MOMENTUM HEALTH SOLUTIONS (PTY) LTD Second Respondent
MOMENTUM CONSULTANTS AND ACTURIES (PTY LTD Third Respondent
In the interlocutory application between:
METROPOLITAN HEALTH CORPORATE (PTY) LTD First Applicant
MOMENTUM HEALTH SOLUTIONS (PTY) LTD Second Applicant
MOMENTUM CONSULTANTS AND ACTURIES (PTY LTD Third Applicant
v
SOUTH AFRICAN POLICE SERVICE MEDICAL SCHEME First Respondent
MEDSCHEME HOLDINGS (PTY) LTD Second Respondent
In re:
METROPOLITAN HEALTH CORPORATE (PTY) LTD First Applicant
MOMENTUM HEALTH SOLUTIONS (PTY) LTD Second Applicant
MOMENTUM CONSULTANTS AND ACTURIES (PTY LTD Third Applicant
v
SOUTH AFRICAN POLICE SERVICE MEDICAL SCHEME First Respondent
MEDSCHEME HOLDINGS (PTY) LTD Second Respondent
Heard on: 22 January 2025
Delivered: 6 February 2025 - This judgment was handed down electronically by
circulation to the parties' representatives by email, by being
uploaded to the CaseLines system of the GD and by release to SAFLII. The
date and time for hand -down is deemed to be 14:00 on 5 February 2025.
Summary: 1. The High Court has jurisdiction in the review application in terms of
PAJA in terms of Section 169 of the Constitution.
2. The issue as to whether the impugned decision constituted an
administrative action, is an enquiry into the merits of the matter, which
propo sition was confirmed in Murray and Others v Ntombela 2024 (4)
SA 95 SCA .
3. It is settled law that when a proper jurisdiction dispute is raised, it has
to be disposed of before a party is called upon to file a Rule 53 record
as enunciated in the Standard Bank and Computicket decisions .
ORDER
________________________________________________________________ ___
It is ordered: -
1. The appeal is dismissed.
2. The appellants are ordered to pay the costs jointly and severally,
including the costs of two counsel.
JUDGMENT
___________________________________________________________________
KOOVERJIE J (MOSHOANA J et LEDWABA AJ concurring)
[1] In this appeal the appellant’s challenge court a quo’s decision whereby
Polmed was directed to file the Rule 53 record.
[2] For the purposes of this judgment the appellants will be referred to as the
South African Police Services Medical Scheme (“Polmed ”) and Medscheme
Holdings (Pty) Ltd (“Medscheme ”) and the respondents will be referred to as
the “Momentum group”.
ISSUE FOR DETERMINATION
[3] This appeal deals with a crisp point in law. The main issue for determination is
whether it was competent for the court a quo to have compelled the filing of
the Rule 53 before determining whether the impugned decision of Polmed was
reviewable in terms of the Promotion of administration of justice Act 3 of 2000
(PAJA) . Polmed contended that the issue of the reviewability of the impugned
decision affects the jurisdiction of the High Court to hear the PAJA review.
CORE DISPUTE
[4] This matter was premised on an interlocutory application instituted in terms of
Rule 30A whereby the Momentum sought the Rule 53 record from the
appellants. They institute d a review application seeking, inter alia, the setting
aside of Polmed’s decision in its bidding process where they were not
successful. Polme d persisted with an argument that the decision is not
reviewable as it does constitute an administrative action, neither is it a
decision of an organ of state nor involves an exercise a public function .
Polmed not only opposed the application but launched a counter application
where it sought, inter alia, a declarator that it is not an organ of state , as such
its impugned decision is not reviewable under PAJA.
[5] The appellants argued that it is not competent for the court to have ordered
the filing of the record at this stage of the proceedings. The court was
required to make enquiries as to whether Polmed’s decision was reviewable in
terms of PAJA. It follows that if there is no reviewable decision, the provisions
of Rule 53 do not find application , so went the argument. They persisted with
the argument that the High Court does not enjoy review jurisdiction over the
impugned decision . Such implicated the jurisdictional powers of the High
Court to hear the review launched, so went the argument .
[6] Momentum group’s core argument is that Polmed is not permitted to short -
circuit the main review application and refus e to provide the record in terms of
Rule 53. The aforesaid arguments of Polmed pertain s to the merits of the
matter and should properly be adjudicated before the review court.
Consequently, it would be premature to adjudicate there on at this stage of the
proceedings. As a matter of law, the Momentum group argue that they are
entitled to the production of the record. They relied squarely on the provisions
of PAJA, contending that the impugned decision constituted an administrative
action.
ANALYSIS
[7] Upon having heard the submissions made by counsel for the parties it became
evident that Polmed’s substantive point was that their defence turns on a
jurisdiction issue . Momentum group on the other hand, argued that it is an
enquiry that goes to the merits of the matter.
[8] It becomes necessary in law to highlight the distinction between a jurisdiction
proper and a merits argument. . The Constitutional Court in the Standard
Bank matter1 expressed that a distinction must be made betw een the
jurisdiction of the forum to hear the review application and the merits in the
review application.
[9] Our courts have through a long line of cases established the proposition in law
that – when there is a dispute regarding the jurisdiction of the court , such court
may only order the production of the record once the jurisdiction issue is
settled. The appellants squarely rely on the aforesaid principle and maintain
that since their defence is premised on the jurisdiction issue, it has to be
adjudicated first.
1 Competition Commission of South Africa versus Standard Bank of South Africa Limited; Competition
Commission of South Africa versus Standard Bank of South Africa Limited; Competition Mission of
South Africa versus Waco Africa (Pty) Ltd and Others [2020] (4) BCLR 429
[10] In this regard, the seminal decisions of the Standard Bank and the
Computicket matters2 are relevant. The Constitutional Court in Standard
Bank emphasized that a court must have the necessary authority to make an
order or else such order would constitute a nullity . At paragraphs 201 to 203
the court expressed:
“… Where the jurisdiction of the court before which a review application is
brought is contested, a ruling on this issue must precede all other orders. This
is because a court must be competent to make whatever orders it issues. If a
court lacks authority to make an order it grants, that order constitutes a
nullity…
By its very nature, rule 53 of the uniform rules application and review
proceedings are instituted before a competent court…
Therefore, the rule enable s the applicant to raise relevant grounds of review,
and the court adjudicating the matter to probably perform its review function.
However for a court to perform this function, it must have the necessary
authority. It is not prudent for a court whose authority to adjudicate a review
application is challenged to proceed to enforce Rule 53 and order that
disclosure should be made before the issue of jurisdiction is settled. The
object of rule 53 may not be achieved in a court that lacks jurisdiction. ”
[11] The Constitutional Court further in Standard Bank cited with approval the
principles set out in the Computicket matter. At paragraph 120 the said court
highlighted the importance of the Rule 53 record and its availability to litigants.
It echoed the proposition in law that:
“A distinction must be made on the jurisdiction of the forum to hear the review
application and the merits of the review application. If a review application is
launched in a forum that enjoys jurisdiction that a party is entitled to the record
2 Competition Commission versus Computicket (Pty) Ltd [2014] ZASCA 185
even if the grounds of the review are meritless. As the Supreme Court of
Appeal put it “the obligation to produce the record automatically ” follows upon
the launch of the application however ill-founded and application may later turn
out to be.3 This is because , as recognised by the majo rity decision in Helen
Suzman , Rule 53 envisages the grounds of review changing after the record
has been furnished. The record is essential to a party’s ability to make out a
case for review. It is the reason that a prima facie case on the merits it not be
made out prior to the filing of the record.”
[12] It is not in dispute that the review application was premised in terms of PAJA.
In their founding affidavit to the review application Momentum group alleged
that the impugned decisions constitute d an administrative action contemplated
in terms of PAJA alternatively such impugned decision amount to an exercise
of public power.4 Thus, the impugned decision is reviewable under PAJA
alternatively the principle of legality, so the allegations went.
[13] It is apposite , at this juncture to refer to Murray5 where the Supreme Court of
Appeal was seized with a similar issue for determination , namely whether the
decision constituted an administrative action and whether it was susceptible to
review.
[14] In Murray the liquidators similarly contended that the right to the production of
the record as provided for in rule 53(1)( b) would arise only upon the
determination of the High Court , on the issue whether the election not to
3 My underlining
4 “55 I am advised that Polmed intake in the impugned decisions, exercise public power and
perform the public function in accordance with an enabling provision including the constitution,
the SAPS and its regulations.
56 I am advised that the impugned decisions constitute administrative action as contemplated in
the promotion of Administration Justice Act 3 of 2000 (PAJA). I am advised, in the alternative,
the impugned decisions constitute an exercise of public power.
57 In the circumstances, I am advised that the impugned decisions are reviewable under PAJA,
alternatively the principle of legality.”
5 The decision of the majority court in Murray and Others NNO v Ntombela and Others 2024 (4) SA 95
SCA
render performance in terms of the contract concluded with the party prior to
its liquidation , constituted administrative action.
[15] Murray upheld the principles set out in the Standard Bank and Computicket
decisions, namely that when a jurisdiction issue is raised in review
proceedings , the court has to dispose of such issue first before proceeding to
direct the parties to file a record .
[16] It however went a step further by succinctly proceeding to distinguish why the
substantive defence raised, which is similar in casu , did not constitute a
jurisdiction issue .
[17] The court further noted that the parties never raised the point of jurisdiction.
Instead the contention centered on whether the conduct of the liquidators
constituted an administrative action and confirmed that the High Court has
jurisdiction to adjudicate on reviews. At paragraph 41 the court expressed :
“In this case there is not even the slightest suggestion that the high court lacks
jurisdiction to entertain the review application. On the contrary the jurisdiction
has been accepted without question. On the score it bears mentioning that
ordinarily the high court may decide any constitutional matter except matters
that reside within the exclusive domain of the Constitutional Court or are
assigned by national legislation to another court of equivalent status to that of
the High Court. In addition the High Court may hear any other matter not
assigned to another court by national legislation .6 That the appellant s
themsel ves desire that the high court itself deal with an adjudicate the
liquidators point of law set forth in their rule 6(5)(d) (iii) notice attests the fact
that its jurisdiction is not contested. In reality, the crux of the liquidator ’s case
is that the relief sought by the respondent in the review proceedings are not
only ill-conceived but also legally untenable. That may well be so. The
6 My underlining
question must – for reasons already stated – be determined only once review
application is ripe for hearing and not before .”
At paragraph 42 court continued :
“42 As indicated, rule 53, which is designed specifically to regulate review
proceedings, forms an integral part of the uniform rules regulating the
way proceedings in the high court generally ought to be conducted.
And, as I have demonstrated above the high court has the jurisdiction to
hear any dispute that can be resolved by the application of the law and
decided on a fair public hearing, save only in relation to matters
assigned to other court s by the Constituti on or national legislation. The
respondents review applicatio n currently pending before the high
court to which this appeal pertains to is not one of the exclusions.
Accordingly, in the context of the facts of this case, the jurisdiction of
the high court can hardly be contested on any tenable grounds and any
order it may make ultimately – whether right or wrong – will not, as a
result, constitute a nullity .”
[18] Similarly , in this matter, the court a quo also noted that no jurisdictional
challenge was raised on the papers before it. At paragraph 26 the court a quo
expressed:
“In my Rule 53 judgment and order I adopted the view that because the
Competition Commission matters related to a challenge of jurisdiction proper,
it was not applicable to the issues that serve before me. There was no
jurisdictional challenge at all on the papers before me. It was submitted by
counsel acting for the applicants that in reaching these conclusions the court
did not err. It was submitted that nowhere in the answering affidavit to the Rule
30A application, or in its counter application, does the respondents contend
that this court has no jurisdiction to entertain the review application. On the
contrary the applicants founding affidavit demonstrates the opposite .”
[19] Murray further clarified the position that the substantive dispute raised was a
merits determination. This clarification is significant since the issue of
jurisdiction is one that relates to the authority to hear a case. Jurisdiction can
be established in two instances, firstly, it may emanate from the statutory
provisions (statutory jurisdiction) the parties are bound to, and secondly, it
depends on presence of jurisdictional facts which must exist before jurisdiction
is exercised (objective jurisdictional facts jurisdiction). In this instance,
jurisdiction is determined by virtue of the relevant statute.
[20] At paragraph 28 the Court held that Section 169 of the Constitution7 enjoins
the High court to have jurisdiction in review proceedings:
“28 Lest I be misunderstood, the judgement does not say in circumstances
where a court paten tly lacks jurisdiction to even entertain the matter. It
should nevertheless go through the motions, in a manner of speaking,
and order a respondent to provide a record to the applicant as
contemplated in Rule 53(3). Far from it. Where the very jurisdiction of
the court is contested which is not the case here, the court must
naturally determine the issue up front. This, of course , is precisely what
the Constitutional Court decided in Standard Bank. The present case is
starkly different – here the High Court is indubitably empowered in
terms of section 169 of the Constitution to deal with all manner of
causes of action except those explicitly (or by necessary implication)
excluded from its jurisdiction …” 8
[21] At paragraph 14 the court express ed:
7 Section 169 reads:
“The High Court of South Africa may decide -
(a) any constitutional matter except a matter that -
(i) the Constitutional Couty has agreed to hear directly in terms of Section 167(6)(a); or
(ii) is assigned by an Act of Parliament to another court of a status similar to the High
Court
….
(b) any other matter not assigned by another court y an Act of Parliament .”
8 My underlining
“14 In view I take of the matter, this court – as was the high court – is not at
this stage called upon to enter into the substantive merits of the review
proceedings . Rather what this court is seized with is the interlocutory
application brought by the respondents (as applicants) an order
directing the liquidators (as respondent) to provide them with a record
of the decision not to implement the executory contract concluded
between Phehla Umsebenzi and the respondents in relation to certain
immovable property prior to the winding up of the former…”
At paragraph 18 the court continued :
“18 I agree with some of the contentions advanced by the liquidators to a
point. However, on balance, I consider that the overall thrust in seeking
to have the grounds of opposition to the relief sought in the review
application determined before Rule 53 record is provided, cannot, in the
context of the facts of this case and indeed what is at the core of this
appeal, be upheld. …”
[22] Notably Murray echoed that the right to a fair hearing would be compromised if
there is a premature adjudication on the merits in the review. At paragraph 36
the court stated that:
“Accordingly , if at this stage even before the recor d is provided to the
respondent s (as applicant s), the court enters into the substantive merits of the
review itself…
This would have the potential to disarm the applicant in the review
proceedings and, most likely put paid to the quest to review the impugned
decision. The inevitable consequence of such an approach would not only be
subversive of the respon dent’s rights (qua applicants) under Rule 53(3) but
also deny them their right to have the real dispute resolved by the application
of law decided in a fair public hearing before, in this instance , the court, in
breach of the right of access to courts entrenched in section 34 of the
Constitution. In truth, what the liquidators seek to do is, borrow ing the
expression used in Computicket , to “effectively place the cart before the
horse” by requiring issues that must rightly be decided in the review
application itself determined in the respondents ’ interlocutory application. In
my judgement no court should countenance such a radical departure from a
well entrenched practice and procedure .” 9
[23] Murray illustrated that the facts in the Standard Bank matter are clearly
distinguishable . The proposition that the issue of jurisdiction has to be
ventilated first- did not find application in Murray .
[24] The complaint in Standard Bank was that a single judge of the Competition
Appeal Court could not order the disclosure of the record without first
determining whether the Competition Appeal Court had jurisdiction as a court
of first instance. It was pointed out that the Competition Appeal Court is a
creature of statute and can only exercise those powers conferred upon it by
the Competition Act. The reviews in the Competition Appeal Court are unique
in that its review jurisdiction is connected with the grounds of review. This is
not the position at all in respect of the reviews in terms of PAJA or the legality
principle .
[25] At paragraph 37 the court expressed :
“… The decision of the Constitutional Court in Standard Bank which they pin
their faith in the heads of argument does not avail them. As I have
demonstrated above in Standard Bank the Constitutional Court dealt with an
entirely different question. Pertinently, at issue, in that case was whether it
was competent for the CAC to entert ain an application at the instance of a
party who sought an order for the production of the record in circumstances
where the jurisdiction of the CAC to entertain the very application was
contested by the adversary. The answer to the question with which the CAC
was seized was entirely dependent on the antecedent question namely,
9 My underlining
whether the CAC had the requisite jurisdiction to entertain the main application
in the first place.”
[26] The court a quo, in casu, also forewarned that the inclination to entertain
challenges to produce a Rule 53 record at this stage of the proceedings would
undermine the expeditious adjudication of the review proceedings. In addition,
sanctioning such a procedure may create a precedent that can open the doors
for potential abuse by respondents and review proceedings already at this
stage, before the rendering of the Rule 53 record would raise defences to the
merits in the review application, whether meritless or not.10
[27] Murray is therefore authority for the proposition that the nature of a specific
defence raised constitute d an enquiry into the merits and that the High Court
has jurisdiction in the said circumstances.
[28] Sections 6 and 7 PAJA regulate the review procedure. Section 6 (1) requires
that a review be instituted in a court or tribunal . Section 1 defines a court as:
“… the High Court … within whose area of jurisdiction the administrative action
occurred or the administrator has his or her or its principal place of
administration or the parties’ rights have been affected , is domiciled ordinarily
resident or the adverse effect of the administrative action was, is or will be
experienced…”
[29] The respondents correctly pointed out that there is nothing in PAJA that
requires a party to – connect the grounds of review to the jurisdiction of the
court .
[30] This was the very reason why the Constitutional Court echoed in Standard
Bank that if a review application is launched in a forum that enjoys jurisdiction
then a party is entitled to the record even if the grounds of review are
10 Paragraph 30 of the judgment of the court a quo in these proceedings
meritless. The production of the record automatically follows upon the launch
of the application however ill-founded that application may later turn out to be.
[31] Reference to the Richards Bay Coal Terminal matter11 does not assist the
appellant s. There in the court was seized with determining whether Section
47(9)(e) of the Customs and Excise Act, which made provision for the
lodgment of an internal appeal excluded the right to review before High Court.
The court therein was seized to determine whether the High Court had
jurisdiction in terms of the said statu te.
[32] During argument, counsel for Medscheme pointed out that this court should
take heed of the analysis and findings of the Supreme Court of Appeal in the
GEMS matter .12 Therein the said Court established that the business of a
medical scheme does not appear to encompass the performance of a public or
government function or the exercise of public powers, with particular reference
to the Government Employees Medical Scheme (GEMS).
[33] Counsel for Medscheme particularly implored this Court to follow the decision
of this Court per Ranchod J in the matter of Famous Idea Trading 4 (Pty) Ltd
t/a Dely Road Courier Pharmacy v Government Employees Medical
Scheme and Others (“Famous Idea”). Therein, a conclusion was reached
that the impugned decision was not reviewable in terms of the common law
because it does not fall in the category of administrative action.
[34] Similar to this matter, a jurisdictional point of law was raised. The basis of the
jurisdictional point in Famous Idea, was that the nature of the power exercised
by GEMS was contractual power, as such not reviewable. In our view, as
fortified by Murray , the issue of reviewability of an impugned decision is not a
11 Commission for the South African Revenue Service and Another v Richards Bay Coal Terminal
(Pty) Ltd [2023] ZASCA 39
12 Government Employees Medical Scheme and Others v Pulic Protector of the Republic of South
Africa and Others 202 (2) SA 114 (SCA)
jurisdiction issue. It is a question that agitates the merits of a review. In my
considered view, the Court in Famous Idea erred when it dismissed the
review application on the basis of a merit issue disguised as a jurisdictional
issue , particularly in the absence of a Rule 53 record. For this reason alone ,
Famous Idea was wrongly decided and at odds with the principles enshrined
in Murray .
[35] There is no doubt that the court sitting as the review court would have to
consider the GEMS judgment. However as outlined above , as per the settled
principle in Murray , an enquiry into whether Polmed inter alia is an organ of
state, would be premature at this stage of the Rule 53 process. The review
application has been instituted in the High Court that has jurisdiction. It
automatically follows that the filing of the record is imminent.
[36] A determination as to whether a decision constituted an administrative action
is not a simple exercise. Our courts have appreciated that to determine a
power or function is of a public nature is a difficult exercise . The Constitutional
Court in Association of Regional Magistrates of Southern Africa13
highlighted that in determining whether a decision is reviewable in terms of
power is context specific. It is not a mechanical exercise where in a court
would merely ask itself whether public powers being exercised at a public
function is being performed . The court s further expressed that in determining
whether particular conduct constitutes administrative action the focus must be
on the nature of the power exercise d rather than upon the functionary .
[37] In conclusion , Murray has settled the proposition in law, namely that the High
Court has jurisdiction to hear review s of this nature . Whether or not an
impugned decision constitutes an administrative action is one that goes to the
merits of the matter. This issue will be ripe for determination when the
13 Association of Regional Magistrates of Southern Africa vs President of the Republic of South Africa
[2013] ZACC 13
substantive merits are adjudicated by the review court. This would include the
ventilation of the counter application as well. Consequently there is no merit in
the appeal.
[38] Insofar as the costs are concerned, the general principle that costs should
follow the result finds application.
[39] In the premises, this appeal is dismissed with costs, which are to be paid by
the appellants jointly and severally, including the costs of two counsel.
H. KOOVERJIE
JUDGE OF THE HIGH COURT
GAUTENG DIVISION, PRETORIA
I agree,
MOSHOANA J
JUDGE OF THE HIGH COURT
GAUTENG DIVISION, PRETORIA
I agree,
LEDWABA AJ
ACTING JUDGE OF THE HIGH COURT
GAUTENG DIVISION, PRETORIA
Appearances :
Counsel for the first appellant : Adv. D Chabedi SC
Adv I Hlalethoa
Instructed by: Maluleke Inc t/a Maluks Attorneys & Corporate Law
Advisors
Counsel for the second appellant: Adv MA Chohan SC
Adv M Lengane
Instructed by: Werksmans Attorneys
Counsel for the respondent s: Adv. JG Wasserman SC
Adv A Govender
Adv S Tshikila
Instructed by: Gering Attorneys
Date heard: 22 January 2025
Date of Judgment: 6 February 2025