Administrative appeals

In Cotty and Others v Registrar of the Council for Medical Schemes and Others [2021] 2 All SA 793 (GP), common law principle that an administrative appeal (timeously taken) suspends the decision which is the subject of the appeal is applicable, therefore an appeal ito s 50(3) of the Medical Schemes Act suspends a decision by the Council ito s 48(8).

By Merilyn Rowena Kader LLB (Unisa), Legal Editor at LexisNexis South Africa.

Pharmaceutical and health – medical schemes - Administrative appeals: The third respondent (Discovery) and fourth respondent (Medshield) in Cotty and Others v Registrar of the Council for Medical Schemes and Others [2021] 2 All SA 793 (GP) refused to approve applications by the relevant applicants for the funding of treatment of certain conditions. Complaints to the first respondent (the Registrar) were dismissed, and the applicants appealed against such dismissals to the Appeal Committee of the Council for Medical Schemes (the Council) in terms of s 48 of the Medical Schemes Act 131 of 1998. The Appeal Committee’s finding in favour of the applicants, led to Discovery and Medshield invoking s 50 of the Act and appealing against such rulings to the Appeal Board of the Council. The schemes then contended that the decisions of the Appeal Committee had been suspended by their appeals and they accordingly did not comply with the rulings made by the Appeal Committee.

In the present application, the question raised was whether the lodging of an appeal in terms of s 50(3) of the Act suspends the decision, which is the subject of that appeal, pending a decision by the Appeals Board.

The dispute turned on the correct interpretation, effect and application of s 50 of the Act. The court referred to case law setting out the correct approach to statutory interpretation.

In terms of the Act, where a member is not entitled to payment in terms of its rules, the medical scheme is precluded from effecting payment to that member. That remains so notwithstanding a decision by the Council in terms of s 48(8). It is only following an order by the Appeal Board in terms of s 50(16)(b) that the decision be implemented, that the medical scheme may give effect to such decision. Section 50 establishes and sets out the powers of the Appeal Board. In terms of s 50(3), any person aggrieved by a decision of either the Registrar acting with the concurrence of the Council or by a decision of the Council may within 60 days of such decision and on payment of a prescribed fee, appeal against such decision to the Appeal Board.

Section 50 does not expressly state whether the lodging of an appeal in terms of s 50(3) does, or does not, suspend the decision, which is the subject of the appeal. In the case of court orders, the effect at common law of noting an appeal is to suspend the operation of the decision appealed against. The issue in this case was whether the common law principle applies to administrative decisions. The court concluded that there was nothing in the Act that displaced the common law principle that the administrative appeal (timeously taken) suspends the decision which is the subject of the appeal. The ordinary common law principle was thus applicable and an appeal in terms of s 50(3) suspends a decision by the Council in terms of s 48(8).

The application was dismissed.

Merilyn Rowena Kader
Legal Editor at LexisNexis