Minister of Public Service and Administration v Ntsinde and Others (A63/2019) [2020] ZAGPJHC 399 (23 December 2020)

REPUBLIC OF SOUTH AFRICA

IN THE HIGH COURT OF SOUTH AFRICA

GAUTENG DIVISION, JOHANNESBURG

1.REPORTABLE:

YES/NO

2.OF INTEREST TO OTHER JUDGES: YES/NO

3.REVISED

Appeal Case No: A63/2019

Court a quo Case no: 19688/

In the matter between:

MINISTER OF PUBLIC SERVICE AND ADMINISTRATION Appellant

And

NONTOBEKO NTSINDE AND OTHERS

Respondents

Delivered: This judgement is handed down electronically by circulation to the 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 23 December 2020.

Summary: Appeal against the decision setting aside the Minister’s decision to remove the trustee and chairperson of the Government Employees Medical Scheme (GEMS). The Minister removing the chairperson in terms of rule 19.3 of GEMS Rules. GEMS not a statutory body. The decision of the Minister not constituting administrative action in terms section 1 of the Promotion of Administrative Justice Act 3 of 2000. The Minister in exercising the power to remove the chairperson not exercising public power or performing public function and thus legality principle not applicable. No basis to imply a right to hearing in terms of the provisions of rule 19.3 of the GEMS Rules.

JUDGMENT [1]

Molahlehi J (with Makume J and Madiba AJ)

Introduction

[1] The issue for determination in this appeal is whether the removal of the respondent, Ms Ntsinde as a trustee member of the Government Employee Medical Scheme (GEMS) was an administrative action, reviewable in terms of the Promotion of Administration Justice Act,[2] (PAJA). If found that the matter does not fall within the purview of PAJA, then the issue is whether the case is reviewable in term of the legality principle. The Minister removed Ms Ntsinde as a trustee and chairperson of GEMS.

[2] The appeal which is opposed by Ms Ntsinde is with leave of the court a quo. GEMS did not participate in the appeal hearing but indicated that it would abide by the decision of this court.

[3] It is common cause that the appointment of Ms Ntsinde as a trustee of GEMS board had expired by the time this court heard the appeal. Ordinarily, this should have rendered this appeal moot. This court

resolved to entertain the appeal because of the significant importance of the matter.

Background facts

[4] GEMS is a medical scheme registered in terms of section 24 of the Medical Schemes Act.[3]

[5] GEMS was established in 2005 and is a restricted medical scheme open to only qualifying public service employees. The cabinet adopted the decision to create GEMS in 2002 with the view to creating a comprehensive medical scheme that would make healthcare more accessible and affordable to government employees.

[6] GEMS consists of a board of trustees which directs the activities of the Scheme, a principal officer (CEO) who implements the directive and policies of the board and who in turn is assisted by a group of executives that support the principal officer in monitoring and managing the service level and contractual obligations of outsourced services.

[7] The Board of trustees of GEMS consist of 50% of people who are elected directly by members, who are public service employees, through an election process. The other 50% is made up of members appointed by the Minister in her capacity as the employer. The board members appointed by the Minister need not be employees in the public service. They serve as representatives of the employer on the board.

[8] The duties to be performed by members of the board are set out in the Rules developed by GEMS. The board developed the rules for conducting its business in accordance with the requirements of the Medical Schemes Act. It is common cause that the rules are binding on GEMS and contain provisions for the "appointment or election" and or "removal of trustees." The appointment and removal of trustees are explicitly governed by rule 19 of the GEMS Rules. The relevant provisions of the rules applicable to the present dispute are found in rule 19.3, which reads as follows:

"The remaining 50% (fifty per cent of the Trustees shall be appointed by the Employer, subject to the provisions of Rule 19.15 (hereinafter referred to as "Employer Trustees" or "Employer-appointed Trustees"]. An Employer Trustee need not be a Member to qualify to serve as an Employer Trustee. Should an Employer wish to substitute a Trustee appointed by it, it may do so at any time by giving the Scheme at least sixty (60] days written notice of its intention to do so, and substitute any other Employer Trustee in place of the Trustee which it withdraws as such."

[9] It is important to note that the Scheme defines the Minister of Public Service and Administration as "the Employer."

[10] The facts that gave rise to the dispute between the parties can be summarised as follows. Ms Ntsinde was appointed the chairperson of GEMS board. She was one of the trustees appointed in terms of rule 19.3 of the GEMS rules.

[11] It is also common cause that the Minister in exercising her powers under rule 19.3, issued a notice of intention to remove individual trustees from the board on 5 December 2017. The notice did not identify the trustees to be affected by such a decision. The relevant part of the decision which appeared in two letters addressed to the chairperson on the chairperson of GEMS read as follows:

"I hereby inform you that I will be exercising my rights under GEMS Rue 19.3, which permits the employer to substitute a trustee appointed by the giving sixty (60) days advance notice."

[12] It would appear that the Minister was unhappy with certain comments that had been made concerning GEMS and relating to the fees and reserves of the Scheme which appeared in GEMS annual report. She requested a detailed report regarding the comments and reminded the trustees that their term of office was ending in thirteen months. She was also unhappy with the alleged poor performance of the board.

[13] The Minister's reasons for exercising her power in terms of rule 19.3 is set out in one of the letters which read as follows:

"3.1 only 56.78% of eligible employees are enrolled on GEMS despite the Scheme having existed for over a decade;

3.2 accumulated reserves dropped from R2.6 billion to R2.1 billion despite contribution income increasing from R28.1 billion to R31 billion in the same period;

3.3 non-healthcare expenditure (or expenses related to anything other than claims) increased from 4.96% to 5.7% in the previous year despite higher contributions being charged and lower reserves being held;

3.4 the increase of fraud and abuse, especially at the Executive level;

3.5 higher claims expenditure which is attributed by the Scheme to anti-selection fraud and waste, increased

utilisation of services and sub-optimal performance by the Scheme's contract suppliers;

3.6 the Scheme recorded a deficit of R484,7 million for 2016 compared to a surplus of R5,3 million in 2015;

3.7 non-compliance with the Medical Schemes Act in respect of late-paying employer groups insufficient accumulated funds, claims settled after 30 days and benefit options not being self-sufficient despite remedial business plans, short payment of claims and reduction of benefits to members; and

3. 8 the Council for Medical Schemes has authorised an investigation into the affairs of the Scheme."

[14] The contents of the Minister's letters were discussed at the board meeting where it was resolved that GEMS should engage the Minister concerning the issues raised in the letters. She refused to engage with the board and on 9 February 2018 informed Ms Ntsinde and other trustees that they were relieved of their positions as trustees of GEMS. Ms Ntsinde was aggrieved by the decision and accordingly challenged it on the following grounds:

"(a) The Minister was not empowered to remove her and others from the Board of GEMS without following the process set out in Rule 19.3;

(b) the initial notice in terms of rule 19.3 was defective as it was inter alia vague;

(c) she failed to afford her and others an opportunity to make representations to her in respect of a decision that impacted on their fundamental rights and/or interest;

(d) she improperly created an expectation that she would allow representations when she harboured no intention to do so;

(e) her decision is irrational as it is not underpinned by any reasons."

The grounds for appeal

[15] In this appeal the Minister contends that the court a quo erred in arriving at its decision for the following reasons:

(a) "in determining the matter as a review under PAJA when the respondent sought a declaratory relief;

(b) in finding that the decision to remove the respondent was administrative action subject to PAJA;

(c) in equating the exercise of a power pursuant to Rule 19.3 of GEMS with the exercise of a power pursuant to a statute."

The decision of the court a quo

[16] In its judgment, the court a quo noted that counsel for both parties conceded that the Minister's decision was an executive decision and thus PAJA did not apply. The court also noted that both counsels agreed that even if the decision was not reviewable under PAJA, it could be reviewed under the legality principle.

[17] In finding that the decision of the Minister was reviewable under PAJA the court a quo reasoned that the Minister derived her power from the provisions of the GEMS. It then quoted paragraph [37] of the decision in Molefe and Another v Minister of Transport and another (Molefe).[4] In that case the court, per Mabuse J in this division, in arriving at the conclusion that the decision of Minister of Transport in removing members of the board was reviewable under PAJA said the following:

". . . in the current case, the Minister's powers are anchored in statutory enactment. A power to appoint and dismiss the Board of PRASA be sourced from the legislation and not from the Constitution. In removing the directors of the Board the Minister was wielding his statutory powers which was conferred on her by the provisions of section 24 of the Legal Succession Act. She was not involved in the development of a new policy. I have accordingly reached a conclusion that the Minister's decisions are liable to be reviewed under the broad grounds provided for on PAJA."

[18] Following the above quotation, the court a quo stated that:

"Similarly, in this matter the (the Minister) was exercising powers conferred upon her by the Scheme and no more. Thus, I find that the present matter is indeed a review under PAJA." [5]

[19] In relation to procedural fairness, the court a quo found that the Minister gave, "lip service to the principle of "audi alterm partem" in the manner she dealt with the removal of Ms Ntsinde and other board members. It found that Ms Ntsinde was entitled to make a representation before the Minister could remove her as a member of the board.

Before for this court.

[20] It was contended that the decision of the court a quo was unsustainable for the following reasons:

"(a) GEMS scheme came into existence through a private agreement between the members.

(b) the agreement between the members to establish GEMS cannot be elevated to statutory enactment.

(c) even though the Scheme came into existence in terms of the Medical Schemes Act, no provision in that Act gives the Minister the power to remove a trustee of Gems board.”

[21] Ms Ntsinde's Counsel, on the other hand, contended that the decision of the court a quo was correct in reviewing and setting aside the decision of the Minister because the cabinet established GEMS, and thus it was a

creature of the government.

[22] About the contention that the Minister did not afford Ms Ntsinde a hearing counsel contended that even if the relationship was contractual

between the parties that did not detract from the right to a fair hearing before removing her from the board. In this respect,

reference was made to Turner v Jockey Club of South Africa,[6] and Jockey Club of South Africa v Forbes,[7] where the disciplinary actions by the jockey clubs were held to be administrative. Reference was also made to Hoexter Administrative Law in South Africa,[8] where the learned author said:

"The orthodox view is that the conduct must be fair irrespective of whether it has a contractual basis or is performed in a contractual context. In accordance with the long-established principle, statutes and contract are the 'twin pillars' on which natural justice rests."

Was the decision to remove Ms Ntsinde an administrative action?

[23] Section 1 of PAJA defines administrative action as follows:

"Any decision taken, or any failure to take a decision, by –

(a) an organ of State, when –

(i) exercising a power in terms of the Constitution or a provincial Constitution, or

(ii) exercising a public power of performing a public function in terms of any legislation, or

(b) a natural person, juristic person, other than an organ of state when exercising a power or performing a public function in terms of the empowering provision, which adversely affects the rights of any person, and which has a direct, external legal effect."

[24] In discussing what constitutes an administrative action the Supreme Court of Appeal (the SCA) in Greys Marine Hout Bay (Pty) Ltd and Others v Minister of Public Works and Others,[9] said the following:

"[24] Whether particular conduct constitutes administrative action depends primarily on the nature of the power that is being exercised rather than upon the identity of the person who does so. Features of administrative action (conduct of 'an administrative nature') that have emerged from the construction that has been placed on s 33 of the Constitution are that it does not extend to the exercise of legislative powers by deliberative elected legislative bodies, nor to the ordinary exercise of judicial powers, nor to the formulation of policy or the initiation of legislation by the executive, nor to the exercise of original powers conferred upon the President as head of State. Administrative action is rather, in general terms, the conduct of the bureaucracy (whoever the bureaucratic functionary might be) in carrying out the daily functions of the State which necessarily involves the application of policy, usually after its translation into law, with direct and immediate consequences for individuals or groups of individuals."

[25] In Minister of Defence and Military Veterans v Motau [10]and Others the Constitutional Court, referring to ‘administrative action’ held that the

“…..the rather unwieldy definition can be distilled into seven elements: there must be (a) a decision of an administrative nature; (b) by an organ of state or a natural or juristic person; (c) exercising a public power or performing a public function; (d) in terms of any legislation or an empowering provision; (e) that adversely affects rights; (f) that has a direct, external legal effect; and (g) that does not fall under any of the listed exclusions.”

[26] It has been held that the fact that a functionary performs an administrative act in terms of empowering legislation does not automatically mean that the functionary is implementing legislation. In Motau, for instance, the Constitutional Court found that the decision of the Minister was not reviewable under PAJA, despite the fact that the decision to remove two members of the board was made in

terms of section 8 (c) of the Armaments Corporation of South Africa Limited Act (Armscor Act).[11] The principle was explained in Motau by the CC per Khampepe J as follows:

"[32] Nevertheless, the fact that a functionary performs a certain act in terms of an empowering legislative provision does not, without more, mean that the functionary is implementing legislation. This is evident from the fact that section 85 contemplates a distinction between "implementing national legislation", under section 85(2)(a), and "performing any other executive

function provided for . . . in national legislation", under section 85(2)(e). As appears from a close reading of the provisions,

the distinguishing feature is the verb "implement" in section 85(2)(a) . . ."

[27] Regarding the facts in Motau, Khampepe J, found that the decision to remove the directors constituted executive action. This finding is based on the following; (a) the Minister's power in terms of section 8 (c) of Armscor Act was an addition to her power to formulate defence policy, (b) the power was not low level bureaucratic power and (c) the power was unconstrained.

[28] The approach to adopt when determining whether conduct amount to administrative action was also explained in President of the Republic of South Africa and Others v South African Rugby Football Union and Others,[12] in the following terms:

"In s 33 the adjective 'administrative' not 'executive' is used to qualify 'action'. This suggests that the test for determining whether conduct constitutes 'administrative action' is not the question whether the action concerned is performed by a member of the executive arm of government. What matters is not so much the functionary as the function. The question is whether the task itself is administrative or not."

[29] In Chirwa v Transnet Limited and Others,[13] a public service employee who had been dismissed by the State entity, Transnet challenged the decision and contended that her dismissal was an administrative action and thus, the High Court had jurisdiction to entertain the dispute in terms of PAJA. Ngcobo J, as he then was, analysed the relationship between section 23 of the Labour Relations Act and section 33[14] of the Constitution and concluded that the dismissal of Ms Chirwa did not amount to administrative action and was thus not

reviewable under PAJA.

[30] Skweyiya J, writing for the majority, in Chirwa found that, although he did not have to answer the question of whether the dismissal was administrative, he would have agreed with Ngcobo J, had he been called upon to answer that question. Ngcobo J found that the dismissal of Ms Chirwa was not an administrative action. In the minority judgement Langa CJ, held that the dismissal was an exercise of a contractual right not involving the exercise of public power and therefore it could not be regarded as an administrative action.

[31] Similarly in Gcaba v Minister for Safety and Security and Others,[15] the Constitutional Court had to decide whether failure to appoint an employee was an administrative action subject to review and also whether the High Court was correct in holding that it did not have jurisdiction to entertain the dispute. The applicant, in that case, contended that he was entitled to the right to just administrative action because his non-appointment or promotion was procedurally unfair. He further contended that the reasons furnished for his non-appointment was rationally connected to the empowering provisions.

[32] In following its decision in Chirwa the Constitutional Court in Gcaba held that the failure to promote and appoint the applicant was not administrative action.

[33] In my view, it is evident in the present matter that the nature of the power exercised by the Minister, in terms of rule 19.3 of the Rules of GEMS, is anchored in the contractual relationship between the parties.[16] It is further my view that the provisions of rule 19.3 do not have the direct external effect of meeting the requirements of PAJA as its effect is limited to those employees in the public service who voluntarily join GEMS.

[34] It is important to note that the Medical Scheme Act does not provide any power to the Minister to remove from office any member of the GEMS board. The power to remove a member of the board of trustees is dealt with under section 46 of that Act which provides:

“46. Removal of member of the 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).”

[35] In light of the above, I find that the decision by the Minister to remove Ms Ntsinde as a member of GEMS board was not an administrative act and thus cannot be subject to review in terms PAJA.

The principle of legality.

[36] As indicated above, Ms Ntsinde sought to review the decision of the Minister in terms of the provisions of PAJA and legality. Having found that the decision falls outside the purview of PAJA the next issue to consider is whether the decision falls to be reviewed in terms of the principle of legality.

[37] In respect of the principle of legality Ms Ntsinde contended that the Minister in exercising power to remove her from the board of trustees of GEMS failed to engage her and the board before taking that decision. In other words the Minister failed to provide her a hearing before removing her form GEMS.

[38] The application and extent of the principle of legality review was explained in Minister of Defence v Xulu,[17] as a means of controlling the exercise of public power that cannot constitute administrative action in terms of the definition of PAJA. The basic requirement in the review under the principle of legality is rationality. The rationality review involves both the decision and the process followed in making such a decision.[18] The requirements of rationality are concerned in particular with—

(a) the distinction between reasonableness and rationality and the relationship between means and ends;

(b) whether the process, as well as the ultimate decision, must be rational,

(c) the consequences for rationality if relevant factors are ignored; and

(d) rationality and the separation of powers.

[39] In New Clicks South Africa (Pty) Ltd v Tshabalala-Msimang and Another NNO; Pharmaceutical Society of South. Africa and Others v Minister of Health,[19] the Constitutional Court per Chaskelson CJ, held that:

" PAJA addresses the four requirements of the Constitution relating to just administrative action: lawfulness, reasonableness, procedural fairness and the provision of reasons."

[40] The question of whether a decision is reviewable in as far as the process is concerned entails a determination of procedural fairness. It has, in this respect, been held, in Motau that procedural fairness obligations may attach independently of a statutory obligation by virtue of the principle of legality.[20]

[41] In Allbut v Centre for the Study of Violence and Reconciliation,[21] the CC dealt with the special dispensation which the President had introduced for pardoning persons who had been accused of involvement in politically motivated crimes. The victims of the crimes, related to the process of pardoning, contended that the President was required as a matter of rationality, to allow them some form of participation when issuing pardons to prisoners.

[42] In dealing with the issue of legality, in the above case, the Constitutional Court held that the President was required as a matter of rationality to allow some form of participation by the victims of crimes before issuing a pardon under the special dispensation.

[43] As stated earlier, the court a quo relied on the Motau's decision in reviewing and setting aside the Minister's decision to remove Ms Ntsinde from GEMS board. The court, in Motau, did not have to decide on the procedural fairness of the decision in light of the application of the provisions of section 71(1) and (2) of the Company's Act.[22]

[44] The court found that the impugned decision was unlawful for non-compliance with the provisions of the Companies Act.[23] The court did, however, acknowledge that the doctrine of audi alterem partem was strongly entrenched in our law.

[45] As stated earlier in this judgment, Counsel for Ms Ntsinde submitted that the principle of legality finds application even in contractual

disputes such as that in the present matter. Reference, was in this regard, made to Turner v Jockey Club,[24] and Fobes v Jockey Club,[25] wherein the application of the principle of legality to disputes concerning the contractual relationship between the parties was

applied. The applicants in those cases were charged with misconduct in terms of the Constitution and the rules of their respective

voluntary associations.

[46] In Turner, the court found that the implied terms of the contract were that in all inquiries and appeals the Jockey Club was required to observe the rules of natural justice and act fairly and reasonably to a person accused of misconduct.

[47] In National Horse Racing Authority of Southern Africa v Naidoo and Another,[26] a case similar the above cases, the issue of the review conducted under PAJA and rationality principle received attention. In

that case, Mr Naidoo was found guilty and convicted of contravening the rules of the National Raising Authority (NHA) concerning

possession of a large quantity of drugs at the premises where he was responsible for the training of horses.

[48] Mr Naidoo challenged the decision of the tribunal set up by NHA on the grounds that the sanction imposed on him was "neither justified nor rational in the circumstances." He also complained that the decision was unfair and irrational.

[49] Although Mr Naidoo did not expressly plead his review in terms of PAJA, the court, per Wallis J, as he then was, held that the language used in the papers amounted to the ground of rationality in terms of section 6 (2) (h) of PAJA. The court further opined that before dealing with the issue of rationality, it was important to determine whether or not the impugned decision constituted an administrative action in terms of section 1 of PAJA.

[50] In relation to the application of PAJA to the facts in Naidoo the court, found that NHA was not an organ of the State and that the provisions of PAJA would only be relevant to the review of the NHA's tribunal as:

"a jurisdiction person, when exercising disciplinary functions in relation to trainers, jockeys and other subjects to its rules, is exercising a public power or performing a public function in terms of the empowering provisions."

[51] Furthermore, the court found that NHA is a voluntary association and that it's Constitution and rules have contractual but not statutory effect and its jurisdiction was over persons who had agreed to be bound by its Constitution and rules.

[52] In answering the question of whether the activities of NHA and its tribunal, constitutes the exercise of public power or public function the court held that there was nothing in the language of PAJA that demonstrated a clear and convincing intention to exclude sporting bodies that regulate the sport in terms of a constitution and rules. The court reasoned in this respect:

"Sport has a substantial influence in our society and can involve substantial sums of money as well as exercising control over who may earn their living from involvement in sporting activities. Sport raises important public issues as is apparent from the fact that the President has seen fit to appoint commissions of enquiry into both rugby and cricket. Government has a substantial interest in sport as evidenced by the existence of the Department of Sport and Recreation and the creation of the Sports Commission. Its interest extends to the way in which sports are regulated by sporting bodies." Thus it is recorded in the preamble to the National Sport and Recreation Amendment Act 18 of 2007 that "government has a constitutional obligation to ensure good and responsible governance of sport and recreation in the Republic" and "the administration of sport and recreation in the Republic has been entrusted to sport and recreation bodies" and "sport and recreation belongs to the nation over which government with its elected representatives have an

overall responsibility".

[53] The facts in the present matter are different from those in the above cases. In paying close scrutiny to the facts and the circumstances of this case, it is apparent that the Minister in exercising power under rule 19.3 of the Rules of GEMS was not exercising public power or performing the public function. She acted pursuant to power under the rule made by GEMS. The rule existed following an agreement between the members of GEMS medical aid scheme. The application and extent of rule 19.3 of GEMS Rules do not affect the broader citizenry of this country for the exercise of power under it to constitute administrative action as envisaged in PAJA. It also does not affect every public service employee. It at best affect those of the public servants who have subscribed to GEMS.

[54] The rule explicitly states that the Minister "may" give notice of intention to remove those of the trustees appointed by her as "the employer." There is thus no basis to read rule 19.3 of the Rules of GEMS to even imply that the Minister was obliged to provide a hearing or invite representation to those trustees that she decided to remove from the Board of GEMS. Reading into rule 19.3 of the Rules of GEMS an implied right to a hearing for the trustees representing the employer on the GEMS board, before being removed from the board would amount to creating a contract for the parties. It is trite that this is impermissible in terms of our law.[27]

[55] For the above reasons, I find that the Minister has made out a case for appeal against the decision of the court a quo.

Order

[56] In the premises the following order is made:

(a) The appeal is upheld with costs.

(b) The decision of the court a quo is set aside and replaced with the following order:

“1 The Minister's conduct pursuant to Rule 19.3 of the GEMS Scheme does not constitute an administrative action

2 Rule 19.3 of the GEMS Scheme does not entitle a trustee appointed by the Minister to a hearing whenever the Minister acts pursuant to rule 19.3 of the GEMS Rules in removing a trustee from office.

3 Rule 19.3 does not oblige the Minister to afford a hearing when removing a trustee appointed pursuant to Rule 19.3 of GEMS Rules.

E MOLAHLEHI

Judge of the High Court

Gauteng Division, Pretoria

I agree

M MAKUME

S MADIBA

Acting Judge of the High Court

Representation:

For the Appellant: Adv O Mooki SC with Adv M. M. Mojapelo

Instructed by the State Attorney. –Reference 1422/18 Enq Ms C Pedro Afonso – Email address- CoPedroAfonso@justice.gov.za.

For the First Respondent: Adv C Georgiades S C with Adv Z Ngwenya – EMAIL ADDRESS: CGEOGIADES@LAW.CO.ZA - NGWENYA@LAW.CO.ZA

Instructed by: Mamabolo Inc- Tel011- 463 5316

For the Second Respondent: Adv Aslam Bava SC Cell: 082 442 4536 and Adv JW Schabort-

Heard on: 2 August 2020

Delivered: 23 December 2020.

[2] 3 of 2000

[3] Act number 131 of 1998 (the Act). Section 24 of the Act provides: Registration as medical Scheme —(1) The Registrar shall, if he or she is satisfied that a person who carries on the business of a medical scheme which has lodged an application in terms of section 22, complies or will be able to comply with the provisions of this Act, register the medical Scheme, with the concurrence of the Council, and impose such terms and conditions as he or she deems necessary. Section 24 is to be read with section 29 of the Act which prohibits registration unless the medical Scheme has formulated rules which inter alia governs the appointment or election of board members to manage the business of the Scheme. (Section 29 of the Act expressly states what the rules of the Scheme must entail- " (1) The Registrar shall not register a medical scheme under section 24, and no medical scheme shall carry on any business, unless provision is made in its rules for the following matters: (a) The appointment or election of a board of trustees consisting of persons who are fit and proper to manage the business contemplated

by the medical Scheme. (b) The appointment of a principal officer by the board of trustees who is a fit and proper person to hold such office. (c) The appointment removal from office powers and remuneration of officers of a medical scheme. Government Employee Medical Scheme

Rule. 131 of 1998 Section 29 of the Act. (d) The manner in which contracts and other documents binding the medical Scheme shall be executed..."

[3] Act number 131 of 1998 (the Act). Section 24 of the Act provides: Registration as medical Scheme —(1) The Registrar shall, if he or she is satisfied that a person who carries on the business of a medical scheme which has lodged an application in terms of section 22, complies or will be able to comply with the provisions of this Act, register the medical Scheme, with the concurrence of the Council, and impose such terms and conditions as he or she deems necessary. Section 24 is to be read with section 29 of the Act which prohibits registration unless the medical Scheme has formulated rules which inter alia governs the appointment or election of board members to manage the business of the Scheme. (Section 29 of the Act expressly states what the rules of the Scheme must entail- " (1) The Registrar shall not register a medical scheme under section 24, and no medical scheme shall carry on any business, unless provision is made in its rules for the following matters:

(a) The appointment or election of a board of trustees consisting of persons who are fit and proper to manage the business contemplated

by the medical Scheme. (b) The appointment of a principal officer by the board of trustees who is a fit and proper person to hold such office.

(c) The appointment removal from office powers and remuneration of officers of a medical scheme. Government Employee Medical Scheme

Rule. 131 of 1998 Section 29 of the Act.

(d) The manner in which contracts and other documents binding the medical Scheme shall be executed..."

[4] Molefe and Others v Minister of Transport and Others (17748/17) [2017] ZAGPPHC 120 (10 April 2017)

[5] See paragraph 20 of the judgment of the court a quo and caselines page 073-75.

[6] 1974 (3) SA 633 (AD).

[7] 1993 (1) SA 649 (AD).

[8] Hoexter Administrative Law in South Africa (second edition) page 443.

[9] (347/2004) [2005] ZASCA 43; [2005] 3 All SA 33 (SCA); para [24].

[10] [2014] ZACC 18 see para 33

[11] Act number 51 of 2003.

[12] 2000 (1) SA 1 (CC); 1999 (10) BCLR 1059 (CC) at 141

[13] [2007] ZACC 23; 2008 (3) BCLR 251 (CC).

[14] Section 23(1) of the Labour Relations Act provides: "Everyone has the right to fair labour practices. And Section 33 of the Constitution provides: "(1) Everyone has the right to administrative action that is lawful, reasonable and procedurally fair. (2) Everyone whose rights have been adversely affected by administrative action has the right to be given written reasons. (3) National legislation must be enacted to give effect to these rights . . . ."

[14] Section 23(1) of the Labour Relations Act provides: "Everyone has the right to fair labour practices. And Section 33 of the Constitution provides: "(1) Everyone has the right to administrative action that is lawful, reasonable and procedurally fair.

(2) Everyone whose rights have been adversely affected by administrative action has the right to be given written reasons.

(3) National legislation must be enacted to give effect to these rights . . . ."

[15] (CCT64/08) [2009] ZACC 26; 2010 (1) SA 238 (CC); 2010 (1) BCLR 35 (CC) ; (2010) 31 ILJ 296 (CC) ; [2009] 12 BLLR 1145 (CC) (7 October 2009).

[16] Although no reference was made during the hearing, it does appear that the relationship governed by the collective bargaining agreement concluded in terms of Resolution 1 of 2006 of the Public Service

Bargaining Council (the PSCBC) read with Resolution 2 of 2004. The PSCBC is an entity established in terms of section 35 of the Labour Relations Act 1995.

[17] (337/2017) [2018] ZASCA 65 (24 May 2018).

[18] See Democratic Alliance v President of South Africa and others [2012] ZACC 24 – 2015. [1] SA 248 [CC] paragraph 37 to 3.

[19] 2005] ZACC 14; 2006 (8) BCLR 872 (CC); 2006 (2) SA 311 (CC).paragraph [143].

[20] See Motau paragraph 82.

[21] 2010 (3) SA 293 (CC).

[22] Section 71 (1) of the Companies Act provides: Removal of directors (1) Despite anything to the contrary in a company's Memorandum of Incorporation or rules, or any agreement between a company and a director, or between any shareholders and a director, a director may be removed by an ordinary resolution adopted at a shareholders meeting by the persons entitled to exercise voting rights in an election of that director, subject to subsection (2). (2) Before the shareholders of a company may consider a resolution contemplated in subsection (1)- (a) the director concerned must be given notice of the meeting and the resolution, at least equivalent to that which a shareholder is entitled to receive, irrespective of whether or not the director is a shareholder of the company; and (b) the director must be afforded a reasonable opportunity to make a presentation, in person or through a representative, to the meeting, before the resolution is put to a vote.

[23] See Motau paragraph [83].

[24] See footnote 5

[25] See footnote 6

[26] (AR.254/08) [2009] ZAKZHC 6; 2010 (3) SA 182 (N) (23 February 2009).

[27] See Natal Municipality Pension Fund v Endumeni 2012 [4] SA 593 [SCA] paragraph 17,