(iii)
are to be provided to any provider of a health service in return for the provision of such service; or
(e)
(i)
of which the policyholder is a medical scheme registered under
the Medical Schemes Act, 1967 (Act 72 of 1967);
(ii)
which relates to a particular member of the scheme or to the beneficiaries of such member; and
(iii)
which is entered into by the scheme to fund in whole or in part its liability to such member or beneficiaries in terms of its rules;
and includes a reinsurance policy in respect of such a policy’.
[8]
The court below decided that:
‘[15]
If (a), (b) and (c) in the definition of a medical scheme are to be read conjunctively, it would, in my view,
lead to results which clearly could not have been the intention of the Legislature. If a person made provision for the obtaining
of a relevant health service then such person would not have to grant assistance in defraying expenditure incurred in connection
with the rendering of such health service as no expenditure would be incurred. Thus (a) and (b) of the definition would be in conflict
with each other if they were to be read conjunctively. However, if (a) and (b) were separated by “and/or” it would make
sense and would give effect and meaning to the definition. Similar meaning must be given to the word “and” between (b)
and (c) to make sense of the definition. If the scheme itself rendered health services or got a supplier or group of suppliers to
render health services then similarly it would not need to grant assistance in defraying expenditure incurred in the rendering of
such health service.
[16]
I am strengthened in my view of a consideration of exclusion (d) in the definition of an “accident and health policy”
in the STI Act. If (d)(i), (ii) and (iii) are to be read conjunctively they make no sense as (ii) and (iii) are in conflict and cannot
be read together unless the word “and” is read as “and/or”. . . . .
[17]
If the exclusions are to be read disjunctively i.e. separated by “and/or” then if an insurer provides any of the benefits the exclusion
is operative and it would preclude an insurer from providing benefits which constitute the carrying on of the business of a medical
scheme in terms of the MS Act. This would have the intended effect of rendering the MS Act and the STI Act compatible.
[18]
I am accordingly satisfied that (a), (b) and (c) in the definition of the business of a medical scheme
in the MS Act are to be read as separate and distinct activities any of which will result in the undertaker of the business carrying
on the business of a medical scheme if the activity is in return for “a premium or contribution”. The word “premium”
is clearly used to cover an insurance policy providing one or all of the listed activities.’
[9]
The legal principle that has evolved regarding the interpretation of the words ‘and’ and ‘or’ in statutes is clear. In Ngcobo v Salimba CC; Ngcobo v Van Rensburg 1999 (2) SA 1057 (SCA) at 1067J-1068B Olivier JA stated:
‘It is unfortunately true that the words “and” and “or” are sometimes inaccurately used by the Legislature
and there are many cases in which one of them has been held to be the equivalent of the other. . . Although much depends on the context
and the subject-matter. . . it seems to me that there must be compelling reasons why the words used by the Legislature should be
replaced; . . . The words should be given their ordinary meaning “. . . unless the context shows or furnishes very strong grounds
for presuming that the Legislature really intended” that the word not used is the correct one. . . .’
[10]
The definition of ‘accident and health policy’ lists some exclusions in subsecs (d) and (e).
The word ‘or’ used between subsecs (d) and (e) indicates that the Legislature was conscious of the difference between
the words ‘and’ and ‘or’ by specifically using ‘or’ as a link in the one instance and ‘and’
as a connector of the subparagraphs in subsecs (d) and (e). Hence a contract that falls within the ambit of subsec (d) or within
the ambit of subsec (e) would fall within the exclusion provided for. Between subsecs (d)(ii) and (d)(iii) the word ‘and’
is used. This differentiation in the use of ‘and’ and ‘or’ within the same definition suggests the ordinary,
literal meaning of the words and therefore that the subsections should be interpreted conjunctively. That usage has the effect that
only a contract which contains all the elements in subparagraphs (i), (ii) and (iii) of subsec (d) will be excluded from the ambit
of a ‘short term policy’.
[11]
Such an interpretation does not create any conflicts within subsec (d), as the subsection lists different
aspects of benefits of a policy that falls within the exception. First, the nature of the benefit is dealt with, namely that it is
to be ‘something other than a stated sum of money’. Second, the event which triggers the benefit, namely the insured
having incurred the expenditure, and the purpose of the benefit, namely the defraying of expenditure consequent upon the event are
both identified. Third, the entity to whom the benefits are to be paid is dealt with, ie the service provider. When these three aspects
are all included in a contract which would otherwise fall within the definition of an ‘accident and health policy’ that
policy is excluded from the operation of the STI Act.
[12]
It therefore appears that the Legislature indeed intended the three subparagraphs of subsec (d) to be
read conjunctively and for the word ‘and’ to be given its ordinary, literal meaning in order to fully describe the policy
benefit that falls within the exclusion. There are no compelling reasons to deviate from the literal meaning of the words used.
[13]
The AdmedGap and AdmedPulse policies do not provide benefits which fall within subparagraphs (i) and (iii)
of subsec (d) of the definition. They are consequently not excluded from it.
[14]
Section 2(1) of the MS Act provides that ‘if any conflict, relating to the matters dealt with in this Act, arises between this Act and the provisions of any other law
save the Constitution or any Act expressly amending this Act, the provisions of this Act shall prevail.’
[15]
The wording of the definition of ‘business of a medical scheme’ in the MS Act is cumbersome.
If the word ‘and’ is given its ordinary, literal meaning, it suggests that subsecs (a) and (b) are to be read conjunctively,
and with subsec (c), unless subsec (c) is not applicable as it is introduced by the words ‘where applicable’. The use
of the words ‘where applicable’ suggests that what precedes it is to be read conjunctively, otherwise those words would
have been superfluous. The result of a conjunctive interpretation is that any business which undertakes liability in return for a
premium or contribution for all the elements of (a) and (b), and (c) where applicable, carries on the ‘business of a medical
scheme’ and is subject to all the provisions of the MS Act.
[16]
This interpretation does not give rise to a conflict between the provisions of subsecs (a) and (b). To
make provision for obtaining a medical service is not the same as defraying expenses incurred in respect of the rendering of a medical
service. Conceivably, ‘to make provision for the obtaining of any relevant health service’ could mean undertaking to
the service provider to make payment for all or part of such health service before it is undertaken, which is quite different to
actually assisting in defraying the expenditure incurred in connection with the rendering of a health service.
[17]
In the predecessor to the MS Act the Legislature used the word ‘or’ in the corresponding definition of ‘medical scheme’, which read:
‘. . . . a scheme established with the object of making provision for –
(a)
the obtaining by members thereof and by dependants of such members, of any service;
(b)
the granting of assistance to members thereof in defraying expenditure incurred by them in connection with the rendering of any service;
or
(c)
the rendering of a service to members thereof or to dependants of such members, either by the scheme itself or by any supplier of
a service or group of suppliers of a service in association with or in terms of an agreement with the scheme’.
Replacing ‘or’ in the old Act with ‘and’ in the MS Act, together with the use of the introductory words ‘where
applicable’ in subsec (c) indicate that the Legislature was mindful of the different meanings of ‘and’ and ‘or’.
[18]
When the relevant definitions in the STI Act and the MS Act are read conjunctively in terms of the ordinary,
literal sense of the words ‘and’ and ‘or’, there is no conflict between them. To interpret the two definitions
in this way honours the ‘well recognised rule of statutory construction’ which was formulated in Chotabhai v Union Government (Minister of Justice) and Registrar of Asiatics and relied upon in Shaik v Minister of Justice and Constitutional Development 2004 (3) SA 599 (CC) at 609 fn14:
‘(E)very part of a statute should be so construed as to be consistent, so far as possible, with every part of that statute, and with
every other unrepealed statute enacted by the same Legislature.’
[19]
The respondents advanced the argument that the purpose and aim of the MS Act will be undermined in the
event of a literal interpretation of the two relevant definitions. In support of this contention the respondents suggested in the
founding affidavit that the appellant’s policies would encourage younger and healthier members of a medical scheme to choose
to subscribe only to minimum benefits of the scheme and supplement their benefits by subscribing to the appellant’s cheaper
policy. As such the viability of a medical scheme could be reduced.
[20]
This contention loses sight of several aspects. First, there is no evidence of an analysis of cost in
relation to benefits of the appellant’s products compared to cost of membership and benefits from a medical scheme. Second,
the suggestion is vehemently challenged by the appellant on the ground of absence of factual support and relevance. Third, although
the STI Act does not contain a provision similar to s 29(1)(n) of the MS Act, the appellant is obliged not to ‘unfairly discriminate directly or indirectly against anyone on one or more
grounds, including race, gender, sex, pregnancy, marital status, ethnic or social origin, colour, sexual orientation, age, disability,
religion, conscience, belief, culture, language and birth”.
[21]
Although the provisions of the MS Act fundamentally changed the operation of medical schemes in that membership
of a medical scheme and, through that, access to core health and medical services were made accessible to a broader spectrum of people, as discriminatory considerations based on age, sex and health status are no
longer permissible and differentiation between members may only occur on the basis of income and number of dependants, there is no factual indication before us that the policies of the appellant are undermining or would undermine the MS Act, or would
in any way affect the viability of medical schemes in general.
[22]
Practical reality has shown that there exists a need for this type of insurance and there seems to be
no reason why it should not be permitted.
[23]
The appeal must succeed. The parties were agreed that the costs of two counsel were appropriately incurred
in both courts. Consequently the following order is made:
(1)
The appeal is upheld with costs, including the costs of two counsel;
(2)
The order of the court below is replaced with the following:
‘The application is dismissed with costs, including the costs of two counsel.’
______________________
S SNYDERS
ACTING JUDGE OF APPEAL
AGREE:
HOWIE P
HEHER JA
PONNAN JA
KGOMO AJA
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