REPUBLIC OF SOUTH AFRICA

IN THE HIGH COURT OF SOUTH AFRICA
(WESTERN CAPE DIVISION, CAPE TOWN)

Case number: 9940/2023

In the matter between:

LOUIS KATHAN First Applicant

DR LOUIS KATHAN INC Second Applicant

and

LIFE HEALTHCARE HOLDINGS First Respondent
GROUP (PTY) LTD

LIFE VINCENT PALLOTTI HOSPITAL (PTY) LTD Second Respondent

Coram: Wille, J
Heard: 5 March 2025
Further documents filed: 17 April 2025
Delivered: 14 May 2025

JUDGMENT
___________________________________________________________________

WILLE, J :

INTRODUCTION

[1] This is the second judgment involving the applicants and the first and second
respondents in this unfortunate matter. I refer to the respondents collectively as the
hospital respondents. This judgment was somewhat delayed, as I indicated to the
parties shortly after the delivery of the first judgment that my prima facie view was
that the lis pendens shield raised by the respondents was good in la w. The
applicants thereafter delivered a notice of withdrawal of the action proceedings ,
which euthani sed the lis pendens shield .1

[2] In summary, the applicant s seek the following relief against the hospital
respondents: (a) declaring that the cancellat ion of the first applicant’s admissions
and practising privileges to be null and void, and of no force and/or effec t and, (b)
ordering the hospital respondents to restore to the applicants their admissions and
practising privileges .2

[3] I must stress that this application has no bearing on an employer -employee
relationship between the applicants and the hospital respondents. The first applicant
enjoyed practising privileges for about fifteen years at facilities controlled by the
hospital respondents. These privileges concern the right to practice and rent office
space and the enti tlement to refer patients to the hospital respondents for treatment.3

OVERVIEW

[4] Firstly, the application concerns a contractual relationship between the
applicants and the respondents, with the terms of this relationship outlined in the
hospital respondents' policies. Secondly, this application concerns the parties'
differing interpretation s of the se policies .4


1 The notice of withdrawal of the action was dated 17 April 2025.
2 As they existed as at 1 August 2023.
3 This application is also about a lease agreement.
4 The privileges policy and the conduct policy (which will be defined later in this judgment)
[5] Finally, this application concerns the alleged misconduct of the first applicant,
but also, as the first applicant claims, the misconduct of the hospital respondents in
their dealings with the first applicant, which ultimately led to the termination of the
relationship between the applicants an d the hospital respondents.5

CONSIDERATION

CONTRACT

[6] The first applicant relies on several contract s concerning his privilege s to
practice at the facilities administered by the hospital respondents . Initially, t he
hospital respondents seem ed to contend for a contractual regime with the applicants.
There are two policy documents at play. The applicants and the hospital
respondents refer to two policy document s concerning the contractual regime
argument. I agree that these documents are sign ificant and I will refer to them. In
addition, I will refer to the lease agreement (the ‘lease’) between the first applicant
and the second respondent.6

[7] The first policy document to which I will refer has two relevant annexes. For
reference purposes, I will refer to the first policy document as the ‘ privileges ’ policy .7

[8] I will refer to the second policy document as the ‘conduct ’ policy. This
document details the procedures to be followed concerning alleged unacceptable
conduct and may be loosely described as a human resources policy document.8

[9] The hospital respondents initially relied squarely on the conduct policy , as
their primary complaint was that the first applicant’s conduct was unacceptable.
However, t he appl icants say that the first applicant’s alleged unacceptable conduct is
more clearly defined in an annexure to the privileges policy , which they rely on. The
applicants say that it is impermissible to rely on the conduct policy when dealing with

5 This “termination ” is the issue to be determined in this application.
6 I am of the view that the lease agreement is also significant.
7 The “Policy governing the Admission and Practising Privileges of Doctors within Life HealthCare
Hospitals and Associated Facilities”.
8 The “Management of Unacceptable Conduct by a Medic al Practitioner ”.
the privileges enjoyed by the applicants . I s uggest that one must also consider the
lease agreement between the first applicant and the second respondent.9

[10] Initially, the argument was that these two policies were accepted as
contractual and binding on all the parties. The position now taken by the hospital
respondents was that both policies, although valid, were and are only guidelines .
While binding on the first applicant, they are not binding on the hospital
respondents.10

[11] The applicants argue that the privilege policy address es unacceptable
conduct by a doctor with practising privileges . I will address the privileges policy
first. The arguments and debates here are these. In some part the hospital
respondents seek to rely on the overarching provisions of the conduct policy which in
summary records that they reserve the right to suspend or terminate admitting
privileges immediate ly on written notice to this effect should a doctor make himself or
herself guilty of unacceptable behaviour, unprofessional conduct or participat e in
activities which the hospital respondents consider as detrimental to their reputation
or business interes ts, or which shows a trend of patient care which falls short of
standards accepted of a doctor in that discipline .11

[12] A common -sense and logical approach must be adopted to interpret the
privileges policy, and it must not be constru ed in isolation but in conjunction with the
conduct policy. This ultimately means that only serious breaches could result in the
hospital respondents summarily cancelling the privileges of the offending doctor .12

[13] In other w ords, the conduct policy outline s various types of misconduct . It
makes interna l provisions for addressing the consequences of this type of
misconduct , should it occur . As a matter of pure logic, th is must mean that the
misconduct listed and contemplated cannot (by its very nature) be repudiatory.13


9 The “Code of Conduct ” annexure and the lease agreement must also be considered.
10 This was a “shifting” of the case by the hospital respondents.
11 The “Code of Conduct” and the “Granting of Admission Privileges” annexures to the privileges
policy.
12 This is so because a specific procedure must be followed.
13 Again, because an outlined procedure must be followed.
[14] Thus, I need to examine the nature of the misconduct complained about, but
more importantly, analyse the remedial steps contemplated by the hospital
respondents (if any). For this analysis , I must take into account the findings of the
disciplinary enquir y, which was conduc ted and held against the first applicant by the
hospital respondent s.14

[15] As far as the use of the word ‘moffie ’ is concerned the first applicant’s guilt is
determined without reference to a spe cific section of the prohibited misconduct. As
far as the use of the word ‘nigger’ is concerned again, the first applicant’s guilt is
determined without reference to a specific section of the prohibited misconduct.15

[16] In summary, all the charges con cern what the first applicant refers to a s
risqué banter . Clearly, in hindsight, we can all agree that this should not have
occurred. Self-evidently, this demonstrates that the conduct policy for an employee
relationship is undoubtedly the instrument for dealing with allegations of misconduct
of the nature alleged to have been committed by the first applicant.16

[17] Crucially , this case is not about an employer -employee relationship. It may be
completely unacceptable for an employee to engage in risqué banter with colleagues
while in a leadership position . It follows that the conduct policy is the instrument that
regulates the alleged misconduct of the nature that the first applicant is alleged to
have committed in an employer -employee environment.17

[18] The conduct policy sets out the substance of what constitutes unacceptable
conduct , the procedure that must be followed for allegations of unacceptable conduct
and the contemplated sanction . Serious allegations must be immediately reported ,
and an inquiry must be held within ten days if the matter is sufficiently se vere.18

[19] The conduct policy stipulates that if a practitioner has been involved in any
form of harassment or a serious incident of unacceptable c onduct (as a first offence ),

14 This was conducted using only the conduct instrument.
15 Bearing in mind that the first applicant is a homo sexual and a person of colour.
16 We are no dealing with the first applicant as an employee.
17 We are dealing here with the alleged misconduct under the privileges policy.
18 Again, this is in terms of the conduct policy.
a rehabilitation action plan for the practitioner must be implemented . Suppose the
rehabilitation is unsuccessful and fails to prevent recurrences . In that case, the
practitioner will be sent a final w arning . If unacceptable behaviour recurs after this
final warning, steps that may include suspension or termination of practice privileges
may follow.19

[20] On a proper construction of the above poli cies, there must be an inquiry into
whether there has been unaccep table conduct (of a serious nature ) that could
potentially result in a termination of the contract in terms of the privileges policy .
This may only follow as a result if rehabilitation fails or recurs after a final warning
has been given. The steps may t hen include a suspension or termination of practice
privileges as a result.20

[21] The hospital respondents gave the first applicant notice to attend a
disciplinary enquiry concerning alleged unacceptable conduct listed in the conduct
policy. Following a disciplinary enquiry , the first applicant was found guilty on some
of the charges and was stripped of his status as an employee. Thereafter, the first
applicant was sent another notice ostensibly following the provisions of the privileges
policy (not the conduct policy), which mirrored the charges in the disciplinary
enquiry .21

[22] What is of concern is that the procedure (such as it was) purports to adopt the
findings made in the disciplinary enquiry , but now following the privileges policy.
Thus, the hospital respondents relied on the misconduct outlined in the conduct
policy to ter minate the first applicant’s privileges , as per the privileges policy. This
was impermissible because it demonstrates a causal connection between the
disciplinary process and the termination of the first respondent’s privileges .22

[23] When this procedura l inconsistency was pointed out to the hospital
respondents , they change d direction . They sought to rely now on their interpretation
of a plethora of letters sent to them by several concerned patients. They suggested

19 This is in terms of the conduct policy.
20 Natal Joint Municipal Pension Fund v Endumeni Municipality 2012 (4) SA 593 (SCA) .
21 This was impermissible.
22 This was correctly pointed out in a letter by the first applicant’s attorney of record (Mr Stansfield).
that the first applicant solicited th ese communications and ‘wrongfully’ campaigned
to pressurise the hospital respondents not to terminate his privileges .23

[24] The alleged campaign by the first applicant (even if it was true) is not
misconduct (of such a nature) that would permit the hospital respondents to
terminate his privileges. In summary, to the extent that any mis conduct justifying an
immediate terminatio n of the first applicant’s privileges existed, this right was lost in
the election to rely on the same disciplinary inquiry regarding the incorrect policy
instrument.24

[25] Put another way, the hospital respondents relied squarely on the ir conduct
policy, thus foregoing any right to cancel under the privileges policy. When the
hospital respondents belatedly realised they were bound to follow a rehabilitation
procedure under the conduct policy, they attempted to impermissibly rely on the
privileges policy to cancel the first applicant’s contractual privileges .25

MISCONDUCT

[26] The hospital respondents relied on three affidavits supporting the first
applicant’s alleged misconduct. The first applicant took the point about the lack of
personal knowledge by the dep onents of these affidavits. Self-evident ly, the
deponents to these affidavits did not have first-hand knowledge of the misconduct
alleged . In an employer -employee setting, these hearsay allegations are sufficient to
trigger the disciplinary process regarding the conduct in question .26

[27] What is legally impermissible is reliance on these affidavits in motion
proceedings to demonstrate as a fact that the first applicant has made himself guilty
of unacceptable behaviour . Put another way, the ‘evidence’ relied on by the hospital
respondents does not establish the fact of misconduct by the first applicant. This is
important because the hospital respondents bear the onus of proving the truth about

23 Now relying on the privileges policy.
24 The hospital respondents incorrectly relied on the findings under the conduct policy.
25 The hospital respondents then contended the policies were merely guidelines.
26 This application has less to do with an employer -employee setting.
the alleged misconduct to rely on the privilege s instrument for a repudiatory
breach .27

[28] Thus, no misconduct has been established as a breach of contract.
Further more , no wrong was committed by the hospital staff or patients who
addressed letters of concern in support of the first applicant. The hospital
respondents failed to establish any repudiatory conduct that would justify a
contractual termination.28

NOVATION

[29] An intention to novate is not presumed and must be proved either by an
express declaration of the parties or by necessary inference from all the
circumstances, including the parties' conduct .29

[30] The allegations against the first applicant regarding novation are inconsistent
with the conduct by the hospital respondents. I say this because it cannot be
seriously disputed that it was always the understanding that the first applicant would
continue to see his existing patients after hours and on weekends , as he never
intended to close his pract ice. It was always intended that the practice would be
taken over .30

[31] Undoubtedly, the practising privileges of the first applicant did not end when
his employment contract was concl uded . This is so because at all material times it
was understood tha t whatever the agreement was, it was always subject to the right
to wind down and exit his practice responsibly .31


27 The hospital respondents impermissibly relied on the findings of the disciplinary committee.
28 Thus no termination could be triggered under the privileges policy.
29 National Health Laboratory Service v Lloyd -Jansen van Vuuren 2015 (5) SA 426 (SCA)
30 The reliance on waiver on the part of the first applicant was challenging to follow.
31 By 1 March 2022.
[32] Because of what happened in these circumstances, the occasion for the first
applicant to exit his practice responsibly never arose . Thus, the waiver and novation
argument wa s contrived and raised more than three years after the alleged waiver .32

[33] It is challenging to understand how it can be presumed that the first applicant
ever intended to waive his privileges , or that his appointment as an employee
novated his privileges.33

AMENDMENT

[34] The applicants amended the relief that they sought at a relatively late stage.
This was because the parties agreed to the filing of further affidavits . The hospital
respondents were permitted to file a supplementary answering affidavit . However,
the hospital r espondents were not entitled to reply to the first applicant ’s replying
affidavit , nor was this agreed between the parties . This was procedural ly
impermissible.34

[35] It would have been inadvisable for the applicants to have proceeded with the
matter a nd ignored the new material presented to the court by the hospital
respondents by way of their reply to the first applicant’s replying affidavit.35

REMEDY

[36] It is indeed regrettable that a poor and irreconcilable relationship has
developed between the first applicant and some of the hospital respondents'
personnel. An allegation is made of pervasive problems caused by the presence of
the first applicant at the hospital. Again, these allegations are advanced by a
deponent who has no personal knowledge of the first applicant’s relatio nship and
interactions with the staff of the second respondent.36


32 The contract of employment is dated 12 October 2021 .
33 As the Chief Medical Officer.
34 It was thus permissible for the applicants to pursue an amendment.
35 Gold Fields Limited v Motley Rice LLC 2015 (4) SA 229 (GJ) at 123 .
36 The evidence presented was of a hearsay nature and little weight must be attached thereto
[37] The hospital respondents contend that the appropriate remedy for the
applicants is to seek damages in the ordinary course. It is not for the hospital
respondents to dictate what election and remedy the applicants may wish to pursue.
A party that is the victim of a n alleged breach has the rig ht to demand performance
by the other party of its contractual obligations.37

[38] In this case , specific performance is not on ly possib le, but it would also not
produce an unjust result . I say this because the first applicant has continued to
exercise h is privileges while the litigation has been ongoing, without any incidents
since his dismissal as an employee. A damages claim would also be challenging to
calculate.38

LIS PENDENS

[39] This shield is no longer relevant as the applicants have since withdr awn the
action proceedings against the hospital respondents. The notice of withdrawal did
not include a tender for costs. While this remains an issue for determination
between the parties in the action proceedings, it has very little influence (if any) on
the issue of costs in these application proceedings.39

LEASE

[40] The lease between the first applicant and the second respondent may only be
terminated on three months’ written notice. This notwithstanding, t he lease may be
terminated if the lessee’s (the first applicant’s) admission privileges are suspended
or termina ted by the hospital respondents. This, again , undoubtedly points to a
procedure to be followed under the privileges policy and has nothing to do with a
disciplinary process under the conduct policy. The fact that the employer -employee
relationship betwee n the first applicant and the second respondent was terminated
following a disciplinary process and enquiry in terms of the conduct policy, and a

37 Basson and others v Hanna 2017 (3) SA 22 (SCA) at paragraphs 22 to 24.
38 This also because the first applicant has continued to care for his patients.
39 This costs issue falls to be dealt with in the action proceedings.
finding was made against the first applicant, has nothing to do with his lease
agreement with the second respo ndent.40

CONCLUSION

[41] The first applicant unreservedly emphasised his commitment to upholding the
standards and reputation of the second respondent . This notwithstanding , the
dispute between him and some of the senior management of the hospital
respondents is , regrettably , seemingly incapable of amicable resolution.41

[42] Most importantly, no further ‘unpleasant incidents ’ have occurred for a n
extended period, and the first applicant is providing essential, life -saving care to
many of h is patients at the facility controlled by the hospital respondents. The first
applicant was and is undoubtedly the most skilled and experienced oncologist at the
facilities controlled by the hospital respondents. The hospital respondents are
accordingly indirectly seeking to deprive many patients of receiving lifesaving
treatment.42

[43] The hospital respondents incorrectly interpreted the representations made by
several patients as part of a strategy devised by the first applicant to exert pressure
on th e hospital respondents not to reach an adverse decision.43

[44] The termination decision by the hospital respondents was not made to protect
some of the staff members employed by the hospital respondents. Instead, it was
impermissibly made by using the in correct policy instrument.44

[45] The hospital respondents incorrectly terminated the applicants’ admission and
practising privileges under the guise of protecting their business interest s in
circumstances where the first applicant unreservedly emphasised his commitment to
upholding the standards and reputation of the second respondent. The hospital

40 This involves the privileges policy and not the employee conduct policy.
41 In a hospital environment it is difficult to understand why this matter was not amicably resolved.
42 This was not materially engaged with by the hospital respondents.
43 This was because they realised they were proceeding under the incorrect policy document.
44 The hospital respondents should have followed the procedures in the privileges instrument.
respondents made a binding decision not to terminate the first applicant’s admission
and pr actising privileges immediately, and in so doing, waived their rights to make a
termination decision under the privileges instrument. Thus, the hospital respondents
impermissibly vacillated between making a termination decision and not immediately
termina ting the first applicant’s admission and practising privileges , and they
impermissibly sought to utilise the incorrect policy instrument.45

ORDER

[46] For these reasons, the application must succeed , and the following order is
granted:

1. The r espondents’ purported cancellation of the applicants’ admissions and
practising privileges is declared to be null and void, and of no force and/or
effect .

2. The r espondents are directed to restore to the first applicant and/or the
second applicant their admi ssions and practising privileges as they existed as
at 1 August 2023 .

3. The costs of this application shall be paid by the first and second respondents
(jointly and severally, the one paying the other to be absolved), including the
costs of two counsel, foll owing Scale C.


_________
E D WILLE
(CAPE TOWN)


APPEARANCES


45 This was and is manifestly unfair to the applicants.
FOR THE APPLICANTS
STEVE KIRK -COHEN SC
MARTINUS VAN DEN BERG
INSTRUCTED BY MCACISO STANSFIELD INC
GAVIN STANSFIELD

FOR THE FIRST AND SECOND RESPONDENTS
ANDREW REDDING SC
DANIEL SIVE
INSTRUCTED BY BAKER & MCKENZIE
JOHAN BOTES