Afrisure CC and Another v Watson NO and Another (522/2007) [2008] ZASCA 89; [2009] 1 All SA 1 (SCA); 2009 (2) SA 127 (SCA) (11 September 2008)

Afrisure CC and Another v Watson NO and Another (522/2007) [2008] ZASCA 89; [2009] 1 All SA 1 (SCA); 2009 (2) SA 127 (SCA) (11 September 2008)

The Supreme Court of Appeal found that the agreement between Publiserve and Afrisure was formulated to evade statutory restrictions on broker's commission, constituting an agreement in fraudem legis and thus illegal and unenforceable. Both the broker's commission and the disguised service fees were found to be illegal, and the entire agreement could not be severed to preserve the lawful portion. The par delictum rule, which ordinarily prevents restitution where both parties are in pari delicto, was relaxed in this case due to public policy considerations aimed at protecting scheme members. De Villiers, as trustee, breached his fiduciary duty by allowing illegal payments to his own entity,...

Citation
[2008] ZASCA 89
Parties
Appellant: Afrisure CC; Appellant: Ettienne de Villiers; Respondent: Brian James Watson NO; Respondent: Publiserve Healthcare Scheme (in liquidation)
Court
Supreme Court of Appeal
Jurisdiction
South Africa
Judgment Date
11 September 2008
Case Number
522/2007
Procedural Posture
Civil Appeal / Appeal From High Court, Cape Town
Outcome
Appeals by both appellants dismissed. Costs awarded against appellants, jointly and severally, including costs of two counsel.
Judges
Mpati, Brand, Lewis, Combrinck, Boruchowitz
Legal Topics
Unjustified Enrichment, Condictio Ob Turpem Vel Iniustam Causam, Par Delictum Rule, Fiduciary Duty, Medical Schemes Act, Broker Commission
Commercial and Corporate Civil Procedure Unjustified Enrichment Condictio Ob Turpem Vel Iniustam Causam Par Delictum Rule Fiduciary Duty Medical Schemes Act Broker Commission

Case Brief

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Parties

Afrisure CC

Appellant

Ettienne de Villiers

Appellant

Brian James Watson NO

Respondent

Publiserve Healthcare Scheme (in liquidation)

Respondent

Procedural Posture

Civil Appeal / Appeal From High Court, Cape Town

Legal Issues

  1. 1 Whether payments made by Publiserve to Afrisure were illegal and unenforceable due to contravention of the Medical Schemes Act and regulations.
  2. 2 Whether the agreement between Publiserve and Afrisure was in fraudem legis and thus void.
  3. 3 Whether the par delictum rule should be relaxed in favour of the respondents.

Ratio Decidendi

The Supreme Court of Appeal found that the agreement between Publiserve and Afrisure was formulated to evade statutory restrictions on broker's commission, constituting an agreement in fraudem legis and thus illegal and unenforceable. Both the broker's commission and the disguised service fees were found to be illegal, and the entire agreement could not be severed to preserve the lawful portion. The par delictum rule, which ordinarily prevents restitution where both parties are in pari delicto, was relaxed in this case due to public policy considerations aimed at protecting scheme members. De Villiers, as trustee, breached his fiduciary duty by allowing illegal payments to his own entity,...

Court Disposition

Appeals by both appellants dismissed. Costs awarded against appellants, jointly and severally, including costs of two counsel.

Orders

  • The appeals by both appellants are dismissed.
  • The appellants are ordered, jointly and severally, to pay the respondents' costs, including the costs occasioned by the employment of two counsel.