THE SUPREME COURT OF APPEAL OF SOUTH AFRICA

JUDGMENT

Case No: 542/10

In the matter between:

THE SOUTH AFRICAN POLICE SERVICE
MEDICAL SCHEME ('POLMED')

First Appellant
QUALSA HEALTHCARE (PTY) LTD

Second Appellant

and

ANDILE ROBERT LAMANA

First Respondent
NZWANA VICTOR MZILI

Second Respondent
TANDIE COLEMAN MALONI

Third Respondent

Neutral citation: The South African Police Service Medical Scheme

('Polmed') v Lamana (542/10) [2011] ZASCA 91

(31 May 2011).

Coram:
CLOETE, PONNAN, CACHALIA and MALAN JJA and

MEER AJA

Heard:
19 MAY 2011

Delivered:
31 MAY 2011

Summary:
Section 21A of the Supreme Court Act 59 of 1959: if facts
relevant to the exercise of a court of appeal's discretion under s 21A of the
Supreme Court Act do not appear from the record, they should be placed
before the court by way of affidavit by the party seeking to rely upon them and
in sufficient time to enable the other party to deal therewith. The same applies
in an application for leave to appeal.

______________________________________________________________

ORDER
______________________________________________________________

On appeal from:  North Gauteng High Court (Pretoria) (Seriti J sitting as
court of first instance):

The appeal is dismissed with costs, including the costs of two counsel, which
are to be paid by the appellants jointly and severally.
_____________________________________________________________

JUDGMENT
______________________________________________________________

CLOETE JA (PONNAN, CACHALIA and MALAN JJA and MEER AJA
concurring):

[1] The respondents are all serving members of the South African Police
Services. They are also members of the first appellant, the South African
Police Service Medical Scheme ('Polmed') which, as its name suggests, is a
medical aid scheme (duly registered as such in terms of the Medical Schemes
Act 131 of 1998). The first appellant is administered by the second appellant,
Qualsa Healthcare (Pty) Ltd ('Qualsa'). The respondents, as applicants,
instituted motion proceedings in the North Gauteng High Court, Pretoria,
against Polmed and Qualsa, the purpose of which was to compel the latter to
pay benefits to which the respondents were entitled to receive from Polmed,
into a particular bank account nominated by them.

[2] For a number of years the respondents and their dependants have
been patients of Dr Gualam Muhammed Peer, who practises as a general
practitioner in King William's Town. The respondents never paid Dr Peer
directly for his services: Qualsa did so on behalf of Polmed, until October
2008 when Polmed's attorney informed the respondents' attorney that
'payment will only be effected into members' personal banking account[s], and
not that of a third party', and Qualsa informed Dr Peer that 'you are hereby

advised that direct payment of your claims will cease and indirect payment will
be implemented effective from 11 October 2008'.

[3] In December 2008, as a result of the communications just quoted, each
respondent signed three documents. The first was a 'Service Agreement' with
Dr Peer in terms of which he undertook to provide healthcare services to the
respondent concerned and his dependants, and the respondent undertook to
instruct Polmed to pay amounts due to him in respect of such services into the
bank account of the Sheh-Rahim Trust. The second was a letter addressed to
Polmed giving that instruction. The third was an 'Agency Agreement' entered
into between each respondent and the Trust, represented by Dr Peer, in
terms of which the respondent concerned nominated the Trust to receive
payments due to him by Polmed in respect of services rendered by Dr Peer
and to pay them over to the latter. Polmed and Qualsa refused to make any
payment into the account of the Trust.

[4] The question before the court a quo was whether Polmed and Qualsa
were entitled to act as they did. The answer to this question depended upon
an interpretation of the applicable Polmed rules which then provided:
'17.4
Notwithstanding the provisions of this rule, the Scheme has the right to pay
any benefit directly to the member concerned.
17.5
Payment of amounts due to a member is made by means of a transfer to an
acceptable bank account as elected by the member. The Board of Trustees may in
its discretion, approve that payments be made by cheque.'

[5] Polmed and Qualsa contended inter alia that they were entitled to
refuse to make payments into the account of the Trust as they considered it
not to be 'an acceptable bank account'. The answering affidavit went on to
explain that from information gathered by Polmed and Qualsa over the years,
what they called 'the most favoured practice' in defrauding Polmed is that an
amount of money is paid by a medical practitioner to a member, and non-
existent treatment is then recorded and claimed by the practitioner, the claim
usually far exceeding the sum of money received by the member; but if the
incentive to the member is taken away, it is their experience that the incidence

of such malpractice is curbed substantially. It was precisely for those reasons,
said Polmed and Qualsa, that they decided that all medical claims by the
respondents would be paid directly to them.

[6] The court a quo, in its judgment delivered on 9 August 2009, rejected
these submissions and found that the phrase 'an acceptable bank account' in
terms of rule 17.5 meant 'an account which is [a] generally acceptable
account'. Leave to appeal was refused.

[7] Leave to appeal was subsequently sought from this court. The notice of
motion was dated 13 May 2010 and the founding affidavit was deposed to
three days earlier, on 10 May. The respondents delivered an answering
affidavit opposing the application a month later, on 10 June. No replying
affidavit was delivered. Leave was granted on 13 July 2010, obviously on the
basis that there were prospects of success on appeal. And indeed there were.
The finding of the court a quo cannot be supported. The interpretation given to
rule 17.5 raises more questions than it answers: By what criteria must the
acceptability of the account be judged? Is the test subjective or objective?
Having heard argument on the merits of the appeal, it seems to me that the
correct interpretation of the word 'acceptable' is 'acceptable to Polmed' and
that, as Polmed did not find the Trust's account acceptable for good and
sufficient reasons, the application should have been dismissed. But it is not
necessary, for the reasons which follow, to express a final view in this regard.

[8] The judges considering the application for leave to appeal were not
furnished with one vital fact: On 11 May 2010, before the application was
lodged with the Registrar of this court on 21 May 2010, and more than two
months before leave was granted, amendments to the rules had been
registered by the Registrar of Medical Schemes. The relevant rules now read:
'17.5
Notwithstanding the provisions of this rule, the Scheme has the right to pay
any benefit directly to the member concerned.
17.6
Payment of amounts due to a member is made by means of payment into the
personal bank account of the member.'
The amendments render the issues between the parties academic.

[9] We were told from the bar by counsel representing Polmed and Qualsa
that it takes about a week for notification of the registration of an amendment
to reach his clients. That is no excuse for not informing the court of the
registration of the amendments once it had taken place or, for that matter, that
registration was pending when the application was lodged. Had the judges
considering the application for leave to appeal known of the registration of the
amendments, they could well have refused leave in terms of s 21A of the
Supreme Court Act 59 of 1959, which provides:
'(1)
When at the hearing of any civil appeal to the Appellate Division or any
Provincial or Local Division of the Supreme Court the issues are of such a nature that
the judgment or order sought will have no practical effect or result, the appeal may be
dismissed on this ground alone.
. . .
(3)
Save under exceptional circumstances, the question whether the judgment or
order would have no practical effect or result, is to be determined without reference
to consideration of costs.'
The same questions arise when leave to appeal is sought from this court
(because of the provisions of s 21A(4)) and a lower court (see Logistic
Technologies (Pty) Ltd v Coetzee & others 1998 (3) SA 1071 (W)). There was
nothing in the application to indicate that the order sought on appeal would
have some practical effect or result despite the amendment to the rules, or
that there were exceptional circumstances as contemplated in subsec (3). Nor
is there anything of that nature properly before us now.

[10] We were informed by counsel representing Polmed and Qualsa that
the amendments were brought to his attention the day before the appeal was
set down for hearing (which was a public holiday). This court only came to
know of the amendments on the day of the hearing ─ over a year after they
had been registered. Had we been informed earlier, we might well have
invoked the provisions of s 21A(2), which provides:
'(a)
If at any time prior to the hearing of an appeal the Chief Justice or the Judge
President, as the case may be, is prima facie of the view that it would be appropriate
to dismiss the appeal on the grounds set out in subsection (1), he or she shall call for
written representations from the respective parties as to why the appeal should not
be so dismissed.

(b)
Upon receipt of the written representations or, failing which, at the expiry of
the time determined for their lodging, the matter shall be referred by the Chief Justice
or by the Judge President, as the case may be, to three judges of the Division
concerned for their consideration.
(c)
The judges considering the matter may order that the question whether the
appeal should be dismissed on the grounds set out in subsection (1) be argued
before them at a place and time appointed, and may, whether or not they have so
ordered ─
(i)
order that the appeal be dismissed, with or without an order as to the costs
incurred in any of the courts below or in respect of the costs of appeal, including the
costs in respect of the preparation and lodging of the written representations; or
(ii)
order that the appeal proceed in the ordinary course.'
We would certainly have asked why the appeal was proceeding when the
issues between the parties had become moot. We nevertheless heard
argument both on the proper course to be adopted in the circumstances and
on the merits of the appeal.

[11] Counsel on both sides were agreed that there were no live issues
remaining between the parties. Counsel representing the respondents
submitted that for that reason the appeal should not be entertained and asked
that Polmed and Qualsa be ordered to pay the costs of the application for
leave to appeal and of the appeal. (I pause to note that the costs of the
application were made costs in the appeal, with the consequence that an
order in respect of the latter would automatically include the former.) Counsel
representing Polmed and Qualsa submitted on the other hand that the court
should decide the appeal, and put forward two submissions in this regard.

[12] The first submission was that should the respondents challenge the
validity of the amendment to the rules and should the challenge be
successful, a decision on the merits of the appeal would not be academic.
The submission rests on pure speculation and does not provide a basis for
the discretion vested in this court in terms of s 21A to be exercised in favour
of Polmed and Qualsa.

[13] The second submission, made in response to a question from the
bench, was based on an instruction which counsel took in court that issues
similar to those raised in this appeal frequently arise before the Council for
Medical Schemes and that a decision on the merits of the application would
accordingly benefit other medical aid schemes, particularly one he mentioned
by name. I shall assume, without deciding, that the practical effect or result
referred to in s 21A(1) is not restricted to parties inter se and that the
expression is wide enough to include a practical effect or result in some other
respect (cf Radio Pretoria v Chairman, Independent Communications
Authority of South Africa & another 2005 (1) SA 47 (SCA) para 40). But even
if that is a correct interpretation of the section, Polmed and Qualsa have not
laid a proper factual foundation for such a finding. It would be quite improper
for this court to act upon information tendered informally from the bar, which
should have been contained in an affidavit when leave to appeal was sought,
which is still not in that form and where the respondents have not had an
opportunity of challenging it. Furthermore, the court would have to make a
finding as to the meaning of s 21A(1), an issue that was not argued before us.
If facts relevant to the exercise of a court of appeal's discretion under s 21A(1)
do not appear from the record, they should be placed before the court by way
of affidavit by the party seeking to rely upon them and in sufficient time to
enable the other party to deal therewith. The same applies to an application
for leave to appeal in whatever court it is brought.

[14] In the circumstances, I consider that the court should exercise the
discretion vested in it by s 21A(1) in favour of dismissing the appeal. The
following order is made:
The appeal is dismissed with costs, including the costs of two counsel, which
are to be paid by the appellants jointly and severally.

_______________
T D CLOETE
JUDGE OF APPEAL

APPEARANCES:
APPELLANTS:
D E van Loggerenberg SC
(with him S S Maakane)
Instructed by Maenetja Attorneys, Pretoria
Naudés Bloemfontein

RESPONDENTS:

N Singh SC (with him G J Gajjar)
Instructed by Smith Tabata Inc,
King William's Town
Webbers, Bloemfontein
THE SUPREME COURT OF APPEAL
REPUBLIC OF SOUTH AFRICA

MEDIA SUMMARY – JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL

From: The Registrar, Supreme Court of Appeal
Date:  31 May 2011
Status: Immediate
Please note that the media summary is intended for the benefit of the media and does not
form part of the judgment of the Supreme Court of Appeal

THE SOUTH AFRICAN POLICE SERVICE MEDICAL SCHEME ('POLMED') &
ANOTHER v A R LAMANA & OTHERS

1.
Three serving members of the South African Police Services brought an application
against the Police Medical Scheme, Polmed, and its administrator, to compel the latter to pay
benefits to which the members were entitled directly into a bank account nominated by them
but not held in any of their names.

2.
Polmed refused to do so because it suspected that a fraud was being perpetrated on it
by the members' doctor ─ which the doctor denied.

3.
A year before the appeal, the Rules of Polmed were amended rendering the appeal
academic. Polmed did not tell the court granting leave to appeal, nor the appeal court, of the
amendments until the day of the hearing of the appeal.

4.
The appeal was dismissed because the order sought would have no practical effect or
result and Polmed was ordered to pay the members' costs of appeal.

--ends--