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SAFLII Note: Certain personal/private details of parties or witnesses have been redacted from this document in compliance with the law and SAFLII Policy

 

IN THE HIGH COURT OF SOUTH AFRICA

(GAUTENG DIVISION, PRETORIA)

 

 

Case No: 49159/2021

(1)          REPORTABLE: YES/NO

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

(3)          REVISED.

DATE:

SIGNATURE:

 

In the matter between:

 

SASP COMMERCIAL AFFAIRS (PTY) LTD                                                Applicant

 

and

 

SIZWE HOSMED MEDICAL SCHEME                                                       Defendant

 

Delivered:  This judgment was handed down electronically by circulation to the parties’ legal representative by e-mail.  The date for the handing down of the judgment shall be deemed to be 8 June 2023.

 

JUDGMENT

 

LG KILMARTIN, AJ:

INTRODUCTION  

[1]             This is an opposed application for the recission of an order handed down by her Ladyship Ms Justice Kooverjie (“Kooverjie J”) on 29 September 2022 (“Kooverjie J’s order”) on an unopposed basis, which reads as follows:  

 

“1.     The Respondent is directed to furnish, within ten (10) days of the order, security for the Applicant’s costs relating to its defence in the main application in the amount of R750 000.00 (seven hundred and fifty thousand rand). 

 

2.      The Respondent is to pay the said security for costs into the trust account of the Applicant’s attorneys of record, or alternatively, provide a bank guarantee in the said amount within the period stated in paragraph 1 of the order.

 

3.      The proceedings in the main application are stayed until the orders in paragraphs 1 and 2 have been complied with, and in event that the Respondent fails to comply within the period so stated, the Applicant is granted leave to supplement the papers in this application and approach this Court for an appropriate order. 

 

4.      The Respondent is to pay the costs of this application.”

 

[2]             The application is brought on the basis of Rule 42(1)(a), alternatively, the common law. 

 

[3]             The Respondent brought a counter-application for an order striking out the main application based on paragraph 3 of the Kooverjie J’s order and the discretion which the court enjoys under Rule 47(4). The counter-application is also opposed. 

 

[4]             Before dealing with the requirements to succeed with relief under Rule 42(1), it is necessary to consider the relevant background facts of this matter which preceded the granting of Kooverjie J’s order.

 

[5]             In the main application, which was brought by the Applicant on 30 September 2021, it seeks, inter alia, orders:

 

[5.1]         declaring that section 59(3) of the Medical Schemes Act, 131 of 1998 (“the Medical Schemes Act”) is unconstitutional and invalid;

 

[5.2]         directing that a list of Respondents shall prepare a report and account of all exercises of section 59(3) of the Medical Schemes Act in which acknowledgements of debt were signed or in which payments were deducted for a period of 6 years preceding the order; and

 

[5.3]         directing that the Registrar of Medical Schemes shall invite affected parties who are members of the Applicant to give notice if they contest the aforesaid reports.

 

[6]             According to the Applicant, the only Respondents in the main application that have a duty to defend the impugned legislation are the Minister of Health (cited as the First Respondent in the main application) and the Council for Medical Schemes (cited as the Second Respondent in the main application).  The remaining Respondents in the main application comprise medical schemes and medical scheme administrators.

 

[7]             The Applicant further contends that some of the Respondent schemes cited in the main application derive commercial benefits from the powers conferred on them by the alleged unconstitutional statutory provision and have therefore elected to participate in the litigation to defend the legislation under attack.

 

[8]             The Court was advised that there are 7 applications for security for costs which have been brought against the Applicant to date, on behalf of more than 20 Respondent schemes. In total, an amount of R6 million in security has been demanded in terms of the various requests received from Respondent schemes and the Applicant has confirmed that it is not in a position to provide security in the amount demanded by the Respondent or the other Respondent schemes which have made such demands.

 

RELEVANT BACKGROUND FACTS

[9]             Two medical schemes (which are not party to this rescission application) have applied for orders compelling the Applicant to pay security for their costs and the Applicant served answering papers in those applications in January 2022.

 

[10]          On 28 March 2022, almost six months after the main application was launched, the Respondent delivered its notice in terms of Rule 47(1), demanding security for costs from the Applicant in the amount of R900 000.00.

 

[11]          On 7 April 2022, the Applicant’s attorneys addressed a letter to the Respondent’s attorneys, denying that the Applicant was liable to furnish security and contesting the amount requested.  The letter stated the following:

 

“1.     We refer to your client’s Notice in terms of Rule 47 delivered on 28 March 2022.

 

2.      Without prejudice to any of our client’s rights insofar as your client has not complied with the Rules of Court as recorded in our letter dated 2 February 2022, our instructions are to record that our client denies that it is liable to furnish security for your client’s costs and contests the amount demanded.

 

3.      Your client’s notice is nothing other than a cut and paste of 5 (five) other Notices in terms of Rule 47 already uploaded onto CaseLines.  This indicates that your client has not applied its mind and so your client’s demand is disingenuous.

 

4.      The wording of Rule 47 is clear and states that a party desiring to demand security for costs shall do so “as soon as reasonably practicable after the commencement of proceedings.” Your client has not offered an explanation for the delay in delivering its Notice.  The only possible inference to be drawn in this regard is that your client is intent on delaying the delivery of its answering affidavit.

 

5.      We transmit herewith a notice in terms of Rule 30 for service electronically on your offices.”

 

[12]           On 22 June 2022, the Respondent launched its security for costs application. 

 

[13]          On 1 July 2022, the Applicant’s attorneys served a notice of intention to oppose the Respondent’s security for costs application.  In that notice, it was stated that the Applicant “…appoints the address of its attorneys appearing below as the address at which it will accept service of all court process and notices in this application.” The physical address provided in the notice is “C/O ELSA KRUGER ATTORNEYS 9[...] G[...], LYTTLETON PRETORIA” and the email address provided is p[...].  The Applicant’s reference is recorded as “MR KEATLEY/MG/S424/1(c)”.  The Applicant confirmed that the notice of intention to oppose was not formally filed at Court as the Applicant’s attorneys understood that the Respondent’s security for costs application was subject to settlement negotiations and/or case management proceedings.

 

[14]          On 3 August 2022, the Applicant sent a “with prejudice” letter to the Respondent’s attorneys which read as follows: 

 

“We refer to your client’s applications for Security for Costs. 

 

We are instructed, without admitting liability, to put up security for your client’s costs, and solely for the purpose of attempting to settle the question of security in full, propose that in lieu of providing your client with security, our client provides your client with an irrevocable undertaking that the South African Society of Physiotherapy will be liable for any taxed legal costs our client is ordered by the Court to pay your client, upon the final conclusion of the litigation. 

 

We look forward to receipt of your client’s response to the above at your earliest convenience. 

 

This letter is written with prejudice and will be placed before the Court if necessary.”

 

[15]          It is not clear from the record whether Kooverjie J was advised of the “with prejudice letter” and/or was provided with a copy of it when the order was moved in the unopposed Court. This letter is not mentioned in the practice note which was filed before the hearing.

 

[16]          In response to the “with prejudice” letter, the Respondent’s attorneys addressed a letter to the Applicant’s attorneys on 10 August 2021, which stated the following in paragraph 2 thereof:

 

“2.     Our client is unable to accept the offer contained in your letter under reply.  What our client seeks in its Rule 47 application is security for its costs should it be successful in resisting the relief sought by your client.  Your client’s proposal, if accepted, would not provide security for our client’s costs.  If the South African Society of Physiotherapy is willing to stand surety for an order for costs made against your client, surely it can post security in the required amount.”

 

[17]          On 9 September 2022, the Applicant’s attorneys wrote to the Office of the Deputy Judge President, requesting a case management meeting.  The letter noted that the founding affidavit had been filed almost a year earlier and had not been answered.  According to the Applicant, the purpose of the requested meeting was to obtain directions on the following matters:

 

[17.1]      dates by which answering affidavits must be filed in the main application.  [The Respondent states that there could not have been any talk of this as it had unequivocally still pushed for the hearing and determination of the Rule 47(2) application, which it alleges had already been set down for hearing[1] and in which the Applicant no longer had a right of audience - unless it filed an answering affidavit with a condonation application]; and

 

[17.2]      the disposal of the applications for security for costs, to the extent that the relevant respondents in the main application intended to persist in the security for costs applications (notwithstanding the “with prejudice” offer).  In particular, the Applicant alleges that, should the security for costs applications have been persisted with, the Applicant would have sought directions on the dates by which further papers and heads of argument must be filed and a date on which those applications could be heard.  The Applicant submitted that the various security for costs applications may conveniently be heard simultaneously.

 

[18]           On 27 September 2022 at 10h44, the Respondent’s attorneys emailed a final notice of set down (which is dated 13 September 2022), advising that the matter would be heard at 10h00 on 29 September 2022, thereby giving less than 2 Court days’ notice of the hearing.  The notice of set down was uploaded onto CaseLines on the same date it was signed, i.e. 13 September 2022.  The reference in the notice is “Bouwer/ S24-/33” which is not the reference stipulated by the Applicant in its notice of intention to oppose.  The Court also noted that: (i) the title of the covering email merely refers to the parties and there is no indication that it is notice of a set down of the security for costs application; (ii) the covering email does not include any file reference; and (iii) the covering email is not addressed to any particular person (albeit that Mr Keightley’s name was provided as part of the reference in the notice of intention to oppose).

 

[19]          The Applicant’s attorneys have explained that:

 

[19.1]      ordinarily when an email is transmitted to their offices, the email is forwarded to the attorney responsible for the matter and the email is printed and physically handed to the attorney;

 

[19.2]      they were undergoing staffing changes at the relevant time and the receptionist and clerk who were on duty when the notice of set down was transmitted, did not transmit it to any of the attorneys in the firm and did not bring the notice to Mary Ann Gettliffe (“Ms Gettliffe”), a candidate attorney, who was working on the matter because of the incorrect file reference;

 

[19.3]      as a result of the incorrect file reference and the inexperience of the filing clerk and receptionist, Ms Gettliffe did not become aware of the notice until after Koov]erjie J’s order was transmitted to her office on 30 September 2022 (i.e. the day after the hearing);

 

[19.4]      when Kooverjie J’s order was transmitted, the receptionist on duty was experienced enough to known which matter the order related to and therefore could bring it to Ms Gettliffe’s attention;

 

[19.5]      upon receipt of Kooverjie’s order, Ms Gettliffe immediately investigated whether a notice of set down had been served and why that notice had not come to her attention;

 

[19.6]      although the Applicant’s attorneys do receive notifications whenever a change is made to CaseLines, as the prefix on the CaseLines file had not been changed, Ms Gettliffe was not concerned because there was no indication that the changes related to the security for costs application; and

 

[19.7]      had the Applicant’s attorneys been aware that the matter was enrolled for hearing on 29 September 2022, Ms Gettliffe would have ensured that the appropriate steps were taken to oppose the matter.

 

[20]          Neither the notice of application for security for costs nor the provisional notice of set down uploaded at 036-1 to -36-2 contain a hearing date.  Therefore, the only document conveying the hearing date is the notice which was emailed less than two court days before the hearing was to take place.

 

[21]          The 10 days afforded to the Applicant to comply with the court order lapsed on Friday, 14 October 2022.  The recission application was brought on 1 November 2022. 

 

RELEVANT LEGAL PROVISIONS AND AUTHORITIES

[22]          The relevant provisions of Rule 42 of the Uniform Rules of Court read as follows:

 

“42   Variation and rescission of orders

 

(1)     The Court may, in addition to any other powers it may have, mero motu or upon the application of any party affected, rescind or vary:

 

(a)              an order or judgment erroneously sought or erroneously granted in the absence of any party affected thereby;

 

…

 

(2)    Any party desiring any relief under this Rule shall make application therefor upon notice to all parties whose interests may be affected by any variation sought.

 

         (3)         The Court shall not make any order rescinding or varying any order or judgment unless satisfied that all parties whose interests may be affected have notice of the order proposed.”      

 

[23]          The phrase “erroneously granted” relates to the procedure followed to obtain the judgment in the absence of another party.[2] 

 

[24]          The Court considering the rescission is entitled to have regard to facts that did not appear from the record of proceedings and of which the Court granting the order was unaware.[3]

 

[25]          What is required to be shown under Rule 42(1)(a) is that: (i) the order was granted in the applicant’s absence – which is common cause in this case; and (ii) the order was erroneously sought or granted.  It is not necessary to establish good or sufficient cause why the Court should rescind the order, as is the case under the common law.

 

[26]          The mere fact that a party was absent when an order was granted is not always sufficient to establish that the order was erroneously sought or granted.  However, it is sometimes the case that the absence of a party is what leads to the error being committed. In the matter of Zuma v Secretary of the Judicial Commission of Inquiry into Allegations of State Capture, Corruption and Fraud in the Public Sector Including Organs of State and Others[4] (“Zuma”) the Constitutional Court stated inter alia the following:  

 

“At times the party’s absence may be what leads to the error being committed.  Naturally, this might occur because the absent party will not be able to provide certain relevant information which would have an essential bearing on the court’s decisions and, without which, a court may reach a conclusion that it would not have made for that but for the absence of the information.  This, however, is not to conflate the two grounds which must be understood as two separate requirements, even though one may give rise to the other in certain circumstances.”

 

[27]          Where a party is absent because there was no notice to it, this will suffice to demonstrate that the order was granted erroneously.[5]

 

[28]          It was alleged by the Applicant that it was unclear whether the fact that a notice of intention to oppose had been served had been disclosed to Kooverjie J before the order was granted and the Respondent was invited to clarify this in its answering affidavit.

 

[29]          In the answering affidavit, the Respondent pointed out the fact that it was stated by the Applicant in paragraph 24 of the answering affidavit that “…[t]he Respondent’s Practice Note in the Security for Costs Application indicates that the Respondent received the Applicant’s Notice of Intention to Oppose.”  It would therefore appear that Kooverjie J was made aware of this fact.

 

[30]          The following was also stated in paragraph 2 of the practice note under the heading “For the Respondent”:

 

“The Respondent has not filed any opposing affidavits and it is assumed that it is not opposing the application, hence the matter is on the unopposed motion roll.”

 

[31]          In paragraph 5 of the practice note which is titled “SERVICE OF THE APPLICATION ON THE RESPONDENT”, the following is stated:

 

“5.1   The Applicant initiated this application on 21 June 2022, which was served on the Respondent on 22 June 2022.

 

5.2.   The Respondent delivered its notice of intention to oppose application on 4 July 2022 and was required to deliver its answering affidavit on 25 July 2022 which it has subsequently failed to deliver to date. 

 

5.3.   Upon application for a hearing date, the matter was allocated a provisional hearing date of 29 September 2022.  Following the Respondent’s failure to deliver its answering affidavit the Applicant proceeded to set down the matter on the unopposed motion court roll. 

 

5.4.   The notice of set down has also been served on the Respondent for the final unopposed motion roll date.”

 

[32]          The practice note is silent on when and how the notice of set down was served.

 

[33]          Rules 6(5)(f)(i) and (iii) provide as follows: 

“(f)(i) Where no answering affidavit, or notice in terms of sub-paragraph (iii) of paragraph (d), is delivered within the period referred to in sub-paragraph (ii) of paragraph (d) the applicant may within five days of the expiry thereof apply to the registrar to allocate a date for the hearing of the application.

 

…

 

(iii)    If the applicant fails so to apply within the appropriate period aforesaid, the respondent may do so immediately upon the expiry thereof. Notice in writing of the date allocated by the registrar must be given by the applicant or respondent, as the case may be, to the opposite party within five days of notification from the registrar.”

 

 (Emphasis added)

 

[34]          The Respondent criticised the Applicant for failing to indicate the date on which a date had been allocated to it by the Registrar. However, this is something which is within the knowledge of the Applicant and ought to have been disclosed by the Applicant.  At the very latest, the Registrar allocated the date on or before the notice of final set down was signed, being 13 September 2022.  Therefore, having regard to the provisions of Rule 6(5)(f)(iii) the Respondent was, at the very latest, required to give written notice of the date allocated by 20 September 2022, which it failed to do. 

 

[35]          Although it appears to have been expressly accepted in paragraph 5.2 of the practice note that the notice of intention to oppose was “delivered”, i.e. served and filed, at the hearing it was confirmed that this was not correct as the notice of intention to oppose had, as a matter of fact, not been filed. However, irrespective of whether it is accepted that a notice of intention to oppose was delivered or not, the Respondent failed to provide proper notice in terms of Rule 6(5)(f)(iii).

 

[36]          In an attempt to argue that it had, in fact, complied with Rule 6(5)(f)(iii), the Respondent argued that, as the notice of final set down had been uploaded onto CaseLines on 13 September 2022, the Applicant would have received notification thereof and, hence, would have become aware of the hearing date on the same day.

 

[37]          In this regard, I was referred by the Applicant to the unreported judgment of her Ladyship Ms Acting Justice Bhoola dated 17 September 2021 in the matter of FirstRand Bank Limited v Maenetja Attorneys Inc.[6] which considered, inter alia, whether CaseLines is a platform for service.  In paragraph [50] of the judgment, the following is stated:

 

“[50]  It is trite law that one of the cornerstones of our legal system is that  a party is entitled to proper notice of legal proceedings against it, alternatively which affects them.  Without due notice, subsequent proceedings are null and void and may be disregarded or set aside at the option of the other party.” (Emphasis added).

 

[38]          In addressing the question of whether CaseLines is a platform for service, the following was stated at paragraphs [54] to [59] of the FirstRand judgment:   

 

“[54]      Both the Directives by Judge President Mlambo, Directive 1 of 2020 dated the 10 January 2020 (implementation of the CaseLines System in the Gauteng Division of the High Court, Pretoria, and Johannesburg) and the Judge President’s Consolidated Directives dated 18 September 2020 (18^th September 2020 Consolidated Directive) discuss in detail the purpose and operations of CaseLines and court procedures.

 

[55]        Paragraphs 1 and 35 of Directive 1 of 2020, make it clear that the purpose of the CaseLines system is the implementation of a digital/electronic case management and litigation system.  The system broadly functions by way of case creation, party/legal representative invitation, document filing, and uploading, and case presentation.  It enables litigants to file and upload pleadings and other documents electronically and to present their case and argument during Court proceedings.

 

[56]        According to the 18^th September 2020 Consolidated Directive, paragraphs 11 and 196 to 200 regulates the filing and service of documents.  Of particular importance is paragraph 197 which captures the entire issue in this matter. 

 

‘Practitioners must adhere to the Uniforms Rules of Court as it relates to service of notices and process.  Thus, the uploading of notice or processes to CaseLines will be regarded as compliant with the Rules of Court as the effective date of proper filing of the document, but not the service of same.  Service should still be effected in terms of Rule 4 or 4A, as the case may be. ’

 

[57]        The issue of the Directives arose by the applicant in response to correspondence from the defendant dated 24^th May 2021, to the applicant. In reply to the defendant’s letter, the applicant in a letter dated the 25^th May 2021, amongst other things responded as follows:- 

 

 ‘… 4. Your reference to the “purported” application for summary judgment is completely misconstrued and without merit.  In this regard, we confirm that we invited you on CaseLines …’

 

[58]        The defendant submitted what is apparent from the above is the fact that the applicant considers CaseLines as a platform for service.  He submitted that the aforesaid Practice Directives did not any stage intend to use CaseLines as a medium or platform for service.  I agree with the defendant’s attorney in this regard.

 

[59]        Paragraphs 11 and 197 of the Consolidated Directives dated 18 September 2020, crystalises the issue regarding filing and service.  The Directives make it clear that practitioners must adhere to the Uniform Rules of Court as it relates to service of notices and processes.  It is also very clear that uploading of notices or processes to CaseLines was never intended to replace service in accordance with the Rules of Court.  I accordingly find that CaseLines was never intended to replace and trump the Uniform Rules of Court concerning service of processes and notices.  In this regard, I find uploading and inviting a practitioner to CaseLines does not mean that ‘service’ is complied with and that the Rules of Court did not need to be complied with in terms of the Uniform Rules of Court.” 

 

[39]          I was also referred by the Applicant to the matter of Top Trailers (Pty) Ltd v Kotze NO[7]  In paragraphs [14] to [16], the court dealt with provision of Rule 42(1)(a), Rule 6(5)(f)(i) and paragraph 13.10 of the Practice Directives of this Court (which apply when matters are enrolled after an notice of intention to oppose is filed but no answering papers are filed).  In paragraph [17] of the judgment the following was stated:

 

“[17]      Mr Kotze’s attorneys were thus obliged to have given the appellants’ attorneys notice that the application had been set down for hearing.  This court in Lodhi considered the meaning of the phrase ‘erroneously granted’ and came to the following conclusion at para 24:

 

‘Where notice of proceedings to a party is required and judgment is granted against such party in his absence without notice of the proceedings having been given to him such judgment is granted erroneously.  That is so not only if the absence of proper notice appears from the record of the proceedings as it exists when the judgment is granted but also if, contrary to what appears from such record, proper notice of the proceedings has in fact not been given.’”

 

[40]          In this case proper notice in terms of Rue 6(5)(f)(iii) was not given and, hence, the judgment was “erroneously granted” as contemplated by Rule 42(1)(a) and should accordingly be rescinded.

 

[41]          As I have found that the requirements of Rule 42(1)(a) have been met, it is not necessary to consider the case brought on the basis of the common law.

 

[42]          As Kooverjie J’s order is rescinded, the relief sought in the counter-application cannot be granted.

 

[43]          Insofar the issue of costs is concerned, I am of the view that the costs should follow the result. 

 

[44]          Both parties requested that a punitive cost order be granted. The Applicant submitted that such an order was justified, having regard to the allegations made in the answering affidavit that: (i) the Applicant is misleading the Court; (ii) the Applicant has withheld information and has made material omissions, in particular as to the nature of the relief sought in the main application; (iii) the Applicant is abusing court processes and wasting the Court’s time; and (iv) the rescission application is an attempt to “trick” the Respondent into disclosing its defence to the main application prematurely.

 

[45]          Having considered the papers and all of the arguments raised, I am not of the view that the opposition to this application or the bringing of the counter-application can be considered vexatious or frivolous.  In the circumstances, I am not inclined to grant an order for punitive costs. 

 

ORDER

In the circumstances, I make the following order:

 

1.               The order of Kooverjie J dated 29 September 2022 is hereby rescinded;

 

2.               The Respondent is directed to pay the costs of the application and the counter-application, including the costs of consequent upon the employment of two counsel, where so employed;

 

 

LG KILMARTIN

ACTING Judge of the High Court

Pretoria

 

Date of hearing:	13 March 2023
Date of judgment:	8 June 2023
For the Applicant:	Adv N Ferreira
	Adv I Cloete
Instructed by:	Bouwer Cardona Inc.
For the Respondent:	Adv K Tsatsawane SC
	Adv L Letsebe
Instructed by:	Moeti Kanyane Incorporated

Neutral Citation:  SASP Commercial Affairs (Pty) Ltd v Sizwe Hosmed Medical (Case no.  49159/2021) ZAGPPHC (Date of judgment: 8 June 2023)

 

 

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