Alberts and Others v Chairperson of Council for Medical Schemes (61223/2007) [2020] ZAGPPHC 722 (3 November 2020)

IN THE HIGH COURT OF SOUTH AFRICA(GAUTENG DIVISION, PRETORIA)

REPUBLIC OF SOUTH AFRICA

(1) REPORTABLE: NO

(2) OF INTEREST TO OTHER JUDGES: YES/NO

(3) REVISED

DATE: 3 NOVEMBER 2020

Case Number: 61223/2007

In the interlocutory application between:

GEORGE WILKE ALBERTS First Applicant BERTUS ALBRECHT Second Applicant DEON JEFTA FREDERICKS Third Applicant SUZETTE HARMSE Fourth Applicant ANTON IGNATIUS MINNAAR Fifth Applicant BERNARD ROUX SLABBERT Sixth Applicant PHILLIP DE VILLIERS SWART Seventh Applicant MAYNARD JACOBUS VAN DER MERWE Eighth Applicant SIBUSISO VIL-NKOMO Ninth Applicant And THE CHAIRPERSON OF COUNCIL FOR MEDICAL SCHEMES Respondent

JUDGMENT

JANSE VAN NIEUWENHUIZEN J

[1] The applicants, erstwhile trustees of the Board of Bestmed Medical

Scheme (“Bestmed”), seek an order to review and declare invalid a decision of the respondent taken on 29 October 2014 in terms of the provisions of section 46(1) of the Medical Schemes Act 131 of 1998 (“the MS Act”) to remove them as trustees from the Board of Bestmed.

[2] Section 46(1) of the MS Act provides that trustees may be removed as members of a board of trustees of a medical scheme, if the Council has sufficient reason to believe that the persons concerned are not fit and proper to serve as such.

[3] The review of the aforesaid decision of the Council is premised on

three grounds:

3.1 the decision was procedurally unfair;

3.2 the decision was based on material errors; and

3.3 the decision was irrational.

Parties

[4] The first applicant is George Wilkie Alberts, a senior advocate practising as such at Brooklyn Advocates’ Chambers, Pretoria.

[5] The second applicant is Bertus Albrecht, a Deputy Director at the

University of South Africa.

[6] The third applicant is Deon Jefta Fredericks, Group Chief Financial

Officer and Board member of Telkom SA SOC Ltd.

[7] The fourth applicant is Susanna Harmse, a Group Finance Manager at

the Council for Scientific and Industrial Research.

[8] The fifth applicant is Anton Ignatius Minnaar, a General Manager:

Executive Support in the Office of the Group Chief Executive and Chairman of Eskom Holdings SOC Ltd.

[9] The sixth applicant is Bernard Roux Slabbert, a retired academic and business consultant.

[10] The seventh applicant is Phillip de Villiers Swart, a Human Capital Management Specialist at the South African Research Council.

[11] The eighth applicant is Maynard Jacobus van der Merwe, a retired academic.

[12] The ninth applicant is Sibusiso Vil-Nkomo, an academic and senior research fellow at the University of Pretoria.

[13] The applicants will be referred to as the Trustees.

[14] The respondent is the Chairperson of the Council for Medical Schemes, cited in his capacity as the Chairperson of the Tribunal that took the decision to remove the trustees as members of the Board of Trustees of Bestmed. The respondent will be referred to as the Council.

Background

[15] During 2011 Bestmed was randomly selected for a routine inspection by the Registrar of the Council. Chapter 9 of the MS Act sets out the powers of the Registrar and in terms of the provisions of section 44(4)(b) the Registrar may order an inspection for purposes of routine monitoring of compliance with the MS Act.

[16] In fulfilling its mandate, the inspection team prepared a draft investigation report dated 23 April 2012. The draft report highlighted the following issues of concern:

16.1 the quality of minute-keeping and attendance registers at Bestmed’s Annual General Meeting of 2010 and 2011, as conducted by Bestmed’s administrators at the time;

16.2 the absence of minutes in respect of meetings of the Board;

16.3 rumours of nepotism and favouritism;

16.4 the absence of guidelines on expenditure by the principal officer, and monies that have been spent by Mr AM la Grange in his capacity as principal officer on marketing-related activities;

16.5 fees paid to Santam Healthcare Distribution Services (Pty) Ltd (“SHDS”) under a marketing and distribution services agreement, in circumstances where SHDS was neither an authorised service provider nor an accredited broker; and

16.6 payments to brokers where services had not been procured in terms of the Bestmed Procurement Policy.

[17] On 23 May 2012 Bestmed provided comments to the Registrar in respect of the draft investigation report.

[18] On 23 March 2013 the investigators submitted its final inspection report to the Registrar. As a result of the recommendations contained in the report, the Registrar on 15 July 2013 issued a directive to Bestmed. Section A of the directive contains the details, nature and extent of contraventions / non-compliance by Bestmed and Section B sets out 14 steps Bestmed must take to comply with the Registrar’s directives within a specified period of time.

[19] On 13 September 2013 Bestmed noted an appeal, in terms of section 49 of the MS Act, against the findings and directives of the Registrar. Section 49(1) enjoins any person who is aggrieved by any decision of the Registrar to within 30 days after the date on which the decision was given, appeal against the decision to the Council. Section 49(2) directs that the operation of any decision which is the subject of an appeal shall be suspended pending the decision of the Council on such appeal.

[20] Notwithstanding the noting of the appeal and according to Bestmed without jettisoning its case on appeal, Bestmed submitted a series of reports to the Registrar of the steps being taken to address the concerns raised by the Registrar.

[21] On 1 November 2013 the trustees were informed by the Registrar that proceedings in terms of section 46 were contemplated. The Registrar invited the trustees to submit comments and representations in respect of the allegations underlying the decision to institute the proceedings and explained that “should the Registrar, after considering the trustees” input come to a conclusion that the allegations require the Council’s consideration, the trustees’ submissions would be submitted to the Council.

[22] It appears that the trustees did not avail themselves of this opportunity and on 28 November 2013 the Council resolved to issue notices in terms of section 46(2) to the trustees.

[23] On 20 December 2013 the Council issued the notices in terms of section 46(2) and called upon the trustees to furnish the Council with details concerning the allegations that they were not fit and proper persons to hold the office of a Bestmed trustee.

[24] The notice is titled “REQUEST FOR COMMENTS IN TERMS OF SECTION 46(2) OF THE MEDICAL SCHEMES ACT, 1998” and paragraph 1.4 thereof reads as follows:

“1.4 You are hereby furnished with the full details of the information that the Council has in its possession and took account of when it considered whether or not to request, and decided to request for your comments as envisaged by the provisions of section 46(2) of the MS Act, namely:

1.4.1 The Bestmed Final Inspection Report;

1.4.2 31 October 2013: Bestmed Medical Scheme Recommendations for Section 46 Proceedings;

1.4.3 Letters from the Registrar dated 01 November 2013 addressed to current and former trustees;

1.4.4 Replying letter from Adams & Adams on behalf of Bestmed dated 22 November 2012 in response to the letter of the Registrar dated 01 November 2013;

1.4.5 28 November 2013: Bestmed Medical Scheme Recommendations for Section 46 Proceedings.

1.4.6 Appeal by Bestmed submitted on 13 September 2013; and

1.4.7 Report on the Steps Taken and the Steps to be Taken in Future in Response to Directives.”

[25] Paragraph 4 of the notice sets out the allegations levelled against the trustees, under the following headings:

A. Botswana Trip (see Par 31 at page 79 of the Inspection Report)

B. Uncollected interests on Loans (see Para 32, 43 & 35 at page 84, 88 & 90 of the Inspection Report respectively)

C. Rugby Sponsor 2010 and 2011 (see Para 37 at page 99 of the Inspection Report)

D. Hunting trips (see Para 40 at page 104 of the Inspection Report)

E. Neil Diamond Tickets (see Para 41 and 42 at page 106 and 109 of the Inspection Report)

F. Marketing and Distribution Fees

[26] Full details were provided in respect of each allegation.

[27] On 30 May 2014 the trustees in response to the section 46(2) notices jointly submitted a detailed response to the Council in respect of each of the allegations. The response consists of 81 pages and contains both factual averments and legal argument. Furthermore, a curriculum vitae of each of the trustees was attached to the response document.

[28] On 29 October 2014 the Council resolved that the trustees were not fit and proper persons to hold office as trustees of Bestmed.

[29] The reasons for the Council’s decision are contained in an Annexure to the notices sent to the trustees in terms of section 46(1). The document consists of a summary of the facts in respect of each of the allegations against the trustees; their responses to the facts and concludes in each instance with the Council’s finding in respect of the allegation. The document consists of 23 pages and reference will only be made to the Council’s ultimate finding in respect of each of the allegations.

[30] Botswana trip

“4.1.16 Therefore, the Council having considered your comment concluded that the Botswana trip falls outside marketing activities, and constitutes utilisation of Bestmed funds in a way not contemplated by rule 19.17, section 2 of the FI Act, and section 26(4) of the MS Act. The Council has found that the contravention of the rules and the relevant laws constitute sufficient reason to believe that you are not a fit and proper person to hold the office of a trustee. If you did not know of the limitation on what you may use scheme funds on, then you are not fit to be a trustee of a medical scheme.”

[31] The FI Act referred to by the Council is an abbreviation for the Financial Institutions (Protection of Funds) Act 28 of 2001.

[32] Botswana trip loans:

“4.2.7 Therefore, the Council having considered your comment concluded that the Botswana trip loans are unlawful, and constitute utilisation of Bestmed funds in a way not contemplated by rule 20.13 and or alternatively authorised in accordance with rule 20.16 as well as not contemplated by section 30(1)(b) of the MS Act, and section 2 of the FI Act. The Council has found that the contravention of the rules and the relevant law constitutes sufficient reason to believe that you are not a fit and proper person to hold the office of a trustee.”

[33] Botswana trip loans: uncollected interest

“4.3.14 The Council considered your comment on non-collection of interest and concluded that your failure to recover interest was without cause; and endangered the funds of Bestmed, shows want of honesty that has exposed Bestmed to actual loss in contravention of the provisions of section 57(6)(a) of the MS Act, Bestmed rule 19.8 and section 2 of the FI Act. Your persistence that you see nothing wrong with the Botswana trip is a glaring indication that such an incident may recur and the funds of Bestmed are exposed. The Council has found that the contravention of the rules and the relevant laws constitutes sufficient reason to believe that you are not a fit and proper person to hold the office of a trustee.”

[34] Hunting trips, Rugby Sponsor 2010 and Neil Diamond tickets

“Therefore, the Council having considered your comment concluded that the Rugby Sponsorship, Neil [Diamond] Concert and/or the Hunting Trips fall outside marketing activities, and constitute utilisation of Bestmed funds in a way not contemplated by any rule of Bestmed rules, and is in contravention of section 2 of the FI Act, and section 26(4) of the MS Act. It also appears to Council from the aforesaid conduct that an offence has been committed under PRECCA for purposes of section 16(a) of the MS Act. The Council has found that the contravention of the rules and the relevant laws constitutes sufficient reason to believe that you are not a fit and proper person to hold the office of a trustee.”

[35] Marketing and Distribution Fees

“Therefore, the Council having considered your comment concluded that the marketing and distribution fees paid to SHDS were paid for admission and registration of members in contravention of section 26(4) and section 65 of the MS Act and regulation 28 thereof. The Council has found that contravention of the rules and the relevant laws constitutes sufficient reason to believe that you are not a fit and proper person to hold the office of a trustee.”

Points in limine

[36] The Council raised three points in limine. In order to contextualise the points in limine, the facts infra are relevant.

[37] On 19 November 2014 Bestmed and the trustees lodged an urgent interdict application in terms of which an interdict was sought for the suspension of the section 46(1) notices until the final determination of an administrative appeal in terms of section 50 of the MS Act.

[38] The matter was heard by Mabuse J and was dismissed on 18 December 2014. Mabuse J handed down a written judgment on 13 February 2015 in which he dealt extensively with the conduct of the trustees.

[39] The administrative appeal against the findings of the Council was lodged by Bestmed and the trustees on 12 January 2015. The Appeal Board chaired by Judge Ngoepe dismissed the appeal on 8 March 2017. Once again, the appeal judgment deals in detail with the conduct of the trustees. The trustees do not seek an order to review and set aside the decision of the Appeal Board.

First point in limine:

The application is academic and can produce no concrete or tangible result beyond a bare declaration

[40] The Council submits that, due to the fact that the trustees do not seek to be reinstated or that the concomitant appointment of the other trustees in their stead be invalid, renders the application moot and academic.

[41] In this regard, the Council referred inter alia to the decision of the Constitutional Court in National Coalition for Gay and Lesbian Equality & Others v Minister of Home Affairs 2000 (2) SA 1 CC in respect of question of mootness:

“[21] A case is moot and therefore not justiciable if it no longer presents an existing or live controversy which should exist if the court is to avoid giving advisory opinions on abstract propositions of law.”

[42] The trustees agreed with the exposé of the principal pertaining to mootness, but submitted that the principle is not applicable in casu.

[43] The argument of the trustees is based on the provisions of section 172(1)(a) of the Constitution which reads as follows:

“172 Powers of courts in constitutional matters

(1) When deciding a constitutional matter within its power, a court-

(a) must declare that any law or conduct that is inconsistent with the Constitution is invalid to the extent of its inconsistency;”

[44] Prior to deciding the question of the validity of the Council’s decision the court, however, must decide in limine whether the issue is still justiciable.

[45] The following extract from JT Publishing (Pty) Ltd and Another v Minister of Safety and Security and Others [1996] ZACC 23; 1997 (3) SA 514 CC in respect of a similar provision in the Interim Constitution, aptly illustrates the point:

“[15] The reversal of the decision reached in the Court below brings duly before us the claim for a declaratory order which the applicants wish us to grant on the constitutional issues presented by them. That does not necessarily mean, however, that we are now bound to resolve those issues. Whether we should say anything at all about them must be settled first. I interpose that enquiry because a declaratory order is a discretionary remedy, in the sense that the claim lodged by an interested party for such an order does not in itself oblige the Court handling the matter to respond to the question which it poses, even when that looks like being capable of a ready answer. … Section 98(5) admittedly enjoins us to declare that a law is invalid once we have found it to be inconsistent with the Constitution. But the requirement does not mean that we are compelled to determine the anterior issue of inconsistency when, owing to its wholly abstract, academic or hypothetical nature should it have such in a given case, our going into it can produce no concrete or tangible result, indeed none whatsoever beyond the bare declaration.”

[46] In the JT Publishing matter supra, the relief sought was in respect of certain sections of the Publications Act and the Indecent or Obscene Photographic Matter Act, both of which were repealed in its entirety by the Films and Publications Act, 65 of 1996 at the time the matter was heard. The mootness is therefore apparent.

[47] In the result, a court must first determine whether the relief claimed will have a real effect. To this end, the Constitutional Court found in JT Publishing supra at paragraph [16] that: “Neither of the applicants, nor for that matter anyone else, stands to gain the slightest advantage today from an order dealing with their moribund and futureless provisions. No wrong which we can still right was done to either applicant on the strength of them.”

[48] The finding in respect of the trustees’ fitness to hold the office of trustee has a real impact and effect on their inherent right to dignity as entrenched in section 10 of the Constitution of the Republic of SA, 1996. Section 10 provides that everyone has the right to have their dignity respected and protected.

[49] The application is aimed at protecting the trustees’ right to dignity, which right remains justiciable.

[50] In the result, the first point in limine is dismissed.

Second point in limine

The trustees do not seek the review of the Appeal Board decision and it stands uncontradicted

[51] The Council contends that, even if its decision is set aside, the Appeal Board decision remains extant, which renders the application moot and academic.

[52] In support of its contention the Council referred to Wings Park Port Elizabeth (Pty) Ltd v MEC, Environmental Affairs, Eastern Cape and Others 2019 (2) SA 606 ECG wherein it was held:

“[46] My conclusion from the cases I have discussed is that, as a general view, when an administrative action is subject to an internal appeal, review proceedings must, at least, be directed at the appellate decision. Whether it is only the appellate decision that may be challenged depends on the nature of the decision at first instance and the remedy sought by the applicant. In most instances, however, both decisions will have to be challenged. In the light of the Oudekraal principle, I am by no means convinced that even where failures of procedural fairness cannot be cured on appeal, it is only the first decision that must be set aside. The appellate decision will be invalid as a result of being tainted by the illegality of the first decision but will still have to be set aside to terminate its factual effect.”

[53] The trustees authoritatively and with reference to Seale v Van Rooyen NO and Others; Provincial Government v Van Rooyen NO and Others 2008 (4) SA 43 SCA, stated that the Council’s view is incorrect in law.

[54] The Supreme Court of Appeal held in paragraph [13] as follows:

“I think it is clear from Oudekraal, and it must in my view follow, that if the first act is set aside, a second act that depends for its validity on the first act must be invalid as the legal foundation for its performance was non-existent. “

[55] In the result, the second point in limine is dismissed.

Third point in limine: Res Iudicata

[56] This point is concerned with the judgment of Mabuse J. The Council submits that the merits of its decision have already been dealt with in the Mabuse J judgment and the issue is as a result res iudicata.

[57] The grounds of review relied upon by the trustees in this application were not in issue in the application for an interim interdict that served before Mabuse J. Mabuse J’s judgment dealt with the merits of the decision and not the procedural fairness thereof.

[58] Consequently, the third point in limine is dismissed.

Statutory framework

[59] Section 46 in terms of which the Council took the impugned decision reads as follows:

“46. Removal of member of board of trustees

(1) The Council may, by notice in writing, remove from office a member of the board of trustees of a medical scheme if it has sufficient reason to believe

that the person concerned is not a fit and proper person to hold the office concerned.

(2) The Council shall, before issuing the notice referred to in subsection (1), furnish such person with full details of all the information the Council has in its possession in regard to any allegations of the member of the board of trustees not being a fit and proper person and to request that person to furnish the Council with his or her comments thereon within 30 days or such further period as the Council may allow.

(3) The Council may not issue the notice referred to in subsection (1) until it has considered the comments, if any, referred to in subsection (2).”

First ground of review: Procedural unfairness

[60] The trustees with reference to the Law Society of South Africa and Others v President of the President of the Republic of South Africa and Others 2019 (3) SA 30 CC, states that procedural fairness entails that:

60.1 a person must know the case he/she needs to meet; and

60.2 be afforded an opportunity to be fairly heard before an adverse decision is rendered.

[61] The principal is trite and has its origins in the audi alterem partem rule.

[62] The trustees contend that the Council’s decision falls foul of the audi alterem partem requirement.

[63] In support for their contention that the decision was not procedurally fair, the trustees allege the following:

63.1 the Council’s decision was based on a memorandum submitted by the Registrar;

63.2 the trustees were not afforded an opportunity to make comments on the memorandum that formed the basis of their removal;

63.3 there is no evidence that the representations made by them were considered by the Council.

[64] The aforesaid contentions are based solely on the minutes of the meeting in which Council resolved to remove the trustees. The portion reads as follows:

“The Council discussed the matter at length and unanimously agreed that there was evidence of contravention of the law and gross negligence by the trustees. The Council also noted that the allegations against the board of trustees went to the heart of its fitness and propriety and agreed that all trustees should be removed. The Council considered the trustees to have failed to protect the interests of the scheme members.”

[65] One should bear in mind that minutes of a meeting do not set out in detail each and every aspect that was canvassed during the discussion of a matter.

[66] A much more reliable source of the facts underlying the Council’s decision to remove the trustees is to be found in the reasons provided for the decision as set out in the annexure attached to the section 46(1) letters.

[67] In the introductory portion of the annexure, the following is stated in respect of the procedure followed by the Council:

67.1 On 20 December 2013 the Council delivered notices to the trustees as envisaged in section 46(2) of the Act. In the notices the trustees were:

67.1.1 furnished with full details of all the information that the Council had in its possession in regard to the allegations that the trustees were not fit and proper persons to hold the office of a trustee of Bestmed;

67.1.2 requested to furnish the Council, within 90 days, with their comments in respect of the information the Council had to its disposal.

67.2 The trustees requested an extension of the 90-day period, which the Council granted.

67.3 On 30 May 2014 the trustees submitted their detailed comments.

67.4 In compliance with section 46(3) the Council took account of all the documents and information submitted by the trustees and Bestmed in response to the inspection report and directives.

[68] The aforesaid exposé accords with the facts.

[69] The annexure, furthermore, lists all the documents the Council considered before it reached its decision. Forty documents are listed and the documents include each and every response from Bestmed and the trustees from 26 July 2013 to 10 October 2014.

[70] The conclusions reached by the Council as set out supra confirm that with each of the allegations in respect of the trustees’ fitness to hold office, their responses to the allegations were duly taken into account before a finding was made.

[71] In the result, the trustees’ contention that the decision was not procedurally fair is at odds with the facts and stands to be dismissed.

Second ground of review: Material errors

[72] In respect of this ground of review the trustees rely on section 6(2)(e)(iii) of the Promotion of Administrative Justice Act, 3 of 2000 which provides that an administrative action may be reviewed if the decision-maker took irrelevant considerations into account and relevant considerations were not considered.

[73] Although the sub-section does not expressly refer to a “material mistake of fact” the trustees referred to Pepcor Retirement Fund and Another v Financial Services Board and Another 2003 (6) SA 38 SCA, in which Cloete JA expressed the view that the extended meaning of section 6(2)(e)(iii) entails that a material mistake of fact renders a decision reviewable.

[74] Cloete JA, however, sounded the following warning in paragraph [48]:

“[48] Recognition of material mistake of fact as a potential ground of review obviously has its dangers. It should not be permitted to be misused in such a way as to blur, far less eliminate, the fundamental distinction in our law between two distinct forms of relief: appeal and review. For example, where both the power to determine what facts are relevant to the making of a decision, and the power to determine whether or not they exist, has been entrusted to a particular functionary (be it a person or a body of persons), it would not be possible to review and set aside its decision merely because the reviewing court considers that the functionary was mistaken either in its assessment of what facts were relevant, or in concluding that the facts exist.”

[75] The complaint in respect of a material error of fact is based on alleged “material misrepresentations” in the Registrar’s memorandum pertaining to the removal of the trustees from office. In the heads of argument filed on behalf of the trustees, their stance is set out as follows:

“88. The Registrar’s memorandum, which formed the basis of the decision to remove the applicants, was replete with material misrepresentations. It materially misrepresented that:

88.1 The [trustees’] appeal in terms of section 49 of the MSA (against the Registrar’s findings and directives) had been abandoned.

88.2 There were no factual disputes.

88.3 The [trustees], and their respective roles in the impugned conduct were not individualised.”

[76] The aforesaid submissions fail to take into account that all the facts relied upon by the trustees in answer to the allegations against them were before the Council. The Council, furthermore, considered these facts prior to making the decision. The statement that the Registrar’s memorandum formed the basis of the decision is therefore factually incorrect.

[77] Notwithstanding the aforesaid, the trustees contend that the Council’s finding that “The facts as recorded – independent of the inspector’s analysis – are not placed in dispute” is a material error of fact. The trustees maintain that they did dispute the facts on which the allegations were based.

[78] Whether the trustees disputed the facts on which the allegations were founded is neither here nor there. The Council detailed and considered the comments of the trustees in each instance. The denial of the trustees that their conduct amounted to wrongdoing was, as is evident from the reasons provided by the Council, duly considered and rejected.

[79] In support of the trustees’ submission that the Council failed to individualise them, the trustees refer to the finding of the Council that:

“The trustees of Bestmed have adopted a stance of collective responsibility. None of the trustees sought to express their personal

attitudes to any of the allegations.”

and

“The applicants made common cause, and prepared one answer in response to the section 46(1) notices. They did not seek to differentiate between the roles of the different role players. The Council accordingly considered their joint representations.”

[80] According to the trustees these findings are material errors of fact. Their stance is set out as follows in the heads of argument:

“99. The [trustees’] response, although submitted as one document, clearly sought to distinguish between the individual trustees and their involvement in the conduct complained of.”

[81] The complaint boils down to different views in respect of the same set of facts. The Council found that the response of the trustees amounted to the trustees taking collective responsibility, whereas, the trustees is of the view that their response does distinguish between their different roles and responsibilities.

[82] The complaint is akin to a ground of appeal and an example of the type of situation Cloete JA warned of in Pepcor, supra. It is not for a court on review to decide whether the Council was correct in their assessment of the facts. The test on review is whether the decision-maker had regard to all the facts before it. It is clear from the reasons provided by the Council for its decision, that it did assess all the facts provided by the Registrar and the trustees.

[83] In the result, this ground of review must also fail.

Third ground of review: Decision is irrational

[84] In support of this ground of review the trustees refer to the following dicta in Pharmaceutical Manufacturers Association of South Africa and Another: In re ex parte President of the Republic of South Africa and Others [2000] ZACC 1; 2000 (2) SA 674 CC at paragraph [85]:

“It is a requirement of the rule of law that the exercise of public power by the Executive and other functionaries should not be arbitrary. Decisions must be rationally related to the purpose for which the power was given, otherwise they are in effect arbitrary and inconsistent with this requirement. It follows that in order to pass constitutional scrutiny the exercise of public power by the Executive and other functionaries must, at least, comply with this requirement. If it does not, it falls short of the standards by our Constitution for such action.”

[85] The trustees contend that the fact that Bestmed complied to the satisfaction of the Registrar with the directives issued by the Registrar, removed any justification for their removal on the strength of the same allegations than those that Bestmed has substantially addressed. In the result, the decision is irrational.

[86] The purpose of section 46 is expressly contained in the section, to wit an investigation into the fitness of a person to hold the office of a member of a board of trustees of a medical scheme.

[87] The decision of the Council dealt substantively with the very issue with which section 46 is concerned, namely are the trustees fit and proper persons to hold the office as members of the board of trustees of Bestmed?

[88] It is difficult to grasp in what sense the decision of the Council was not rationally connected to the purpose the statutory provisions contained in section 46.

[89] The fact that Bestmed had satisfactorily complied with the Registrar’s directives could by no stretch of the imagination alter the clear provisions of section 46 and the power conferred therein on the Council to remove the trustees as members of Bestmed’s board of trustees.

[90] This ground of review has no merit and similarly stands to be dismissed.

ORDER

[91] In the premises, the application is dismissed with costs.

N. JANSE VAN NIEUWENHUIZEN

JUDGE OF THE HIGH COURT OF SOUTH AFRICA

GAUTENG DIVISION, PRETORIA

Electronically submitted therefore unsigned

Delivered: This judgment was prepared and authored by the Judge whose name is reflected and is handed down electronically by circulation to the parties/their legal representatives by email and by uploading it to the electronic file of this matter on CaseLines. The date for hand-down is deemed to be 3

December 2020.

DATE HEARD PER COVID19 DIRECTIVES: 13 October 2020

(Virtual hearing.)

DATE DELIVERED PER COVID19 DIRECTIVES: 3 December 2020

APPEARANCES

Counsel for the Applicants:

Advocate E. Labuschagne SC and

Advocate K. Harding

Instructed by:

Adams and Adams

Counsel for the Respondent:

Advocate J.J. Brett SC and

Advocate L.A. Makua

Instructed by:

Savage and Jooste