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REPUBLIC OF SOUTH AFRICA

IN THE HIGH COURT OF SOUTH AFRICA

GAUTENG DIVISION, PRETORIA

 

(1)     REPORTABLE: YES/NO

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

(3)     REVISED.

Case No 37309/2018

19/9/2019

 

In the matter between:

 

COMPENSATION SOLUTIONS (PTY) LTD                                        PLAINTIFF

 

And

 

THE COMPENSATION COMMISSIONER                                          FIRST DEFENDANT

DIRECTOR-GENERALOF THE DEPARTMENT

OF THE LABOUR OF THE NATIONAL GOVERNMENT

OF THE REPUBLIC OF SOUTH AFRICA                                           SECOND DEFENDANT

JUDGMENT

Exception to special plea and counterclaim

FRANCIS-SUBBIAH, AJ:

[1]        This is an opposed motion were the plaintiff raises an exception to the defendant's special plea and counterclaim and to have them struck out in terms of Rule 23 of the Uniform Rules of Court.

[2]        The defendants are tasked to carry out a public function to administer the Compensation Fund for specific benefits arising from workplace injuries that have been established in terms of the Compensation for Occupational Diseases and Injuries Act, 130 of 1993 (COIDA).

[3]        The plaintiffs claim arises from services provided by medical service providers in (COIDA) to the defendant. The plaintiff having taken cession of rights, title and interest of accounts of such service providers on an ongoing basis submits claims to the first defendant and receives payments. This modus operandi has continued for more than a decade.

[4]          When the defendant receives these claims they are assessed, verified and validated or rejected. Each claim is paid to the medical service provider's banking account and not directly to the plaintiff. In this case the claim is based on 2387 invoices totaling R6, 687,353.27. It originally formed a batch of medical accounts totaling R85,335,285.41 of which the amount of R78 647,932.14 was paid.

[5]        The plaintiff relies on an agreement, made an order of court on 31 July 2009 between itself and the first defendants to regulate its handling of claims. In terms of the provisions of the agreement the defendants were obliged to process and validate or validly reject the medical accounts and effect payment of such validated medical accounts, within 75 calendar days of acceptance by the first defendant of a claim for compensation in terms of COIDA. The parties had recorded their mutual commitment to a functional process in relation to the claims submitted by the plaintiff and as a good working relationship it was resolved that weekly meetings will take place between the representatives of the first defendant and the plaintiff. The agreement between the parties is confidential to the parties.

[6]        The plaintiff pleads that the defendants have breached the terms of the agreement and court order as these claims have been accepted, processed and validated by the first defendant. Notwithstanding it being due and payable and liability also accepted by the first defendant it remains unpaid within the 75 calendar day period.

[7]        In opposition to these claims the defendant raises four special pleas. Namely a lack of notice to institute legal proceedings, lack of consent to institute legal proceedings in the high court, lack of locus standi due to its failure to furnish factoring and cession agreements and lack of jurisdiction of the high court as the individual claims fall with the jurisdiction of the magistrate court. The plaintiff subsequently filed its exception to these four special pleas and the defendant's counterclaim requesting a declaratory order that agreement as per the court order dated 31 July 2009 is res judicata and not applicable to the current claim.

[8]        In South African National Parks v Ras 2002 (2) SA 537 (C ) 541 it was held that unless the excipient can satisfy the court that there is a real point of law or a real embarrassment, the exception should be dismissed.

[9]        A consideration of whether the first and second defendants qualify as an organ of state flows from the defendants first two special pleas of the plaintiff's lack of filing and non- compliance with the required notices in terms of s 3 and s 5(4) of the Institution of Legal Proceedings against Certain Organs of State Act 40 of 2002 (Act 40 of 2002). The Supreme Court of Appeal in Natal Joint Pension Fund v Endumeni Municipality 2012 (4) SAS 593 (SCA) has stated that in considering whether an entity is an organ of state it must be contextually considered. Similarly with this principle in mind the Compensation Commissioner ought to be considered. The Constitutional Court in considering the definition of State as an employer in in Minister of Defence and Military Veteran v Liesl-Lenore Thomas 2016 (1) SA 103 CC held that "it could be merely an all encapsulating term for the individual components of the State and to avoid listing each government department or sphere of government in the definition." It is common cause that the defendants are functionaries performing a public function and therefore prima facie is an organ of state.

[10]      The plaintiffs claim arises from an act performed under or in terms of any law or omission for which an organ of state is liable. It is therefore a claim arising from exercise of a statutory power as the claims are compensation in terms of section 22 of COIDA. The definition of debt is wide enough to include such claims. In this regard the excipient plaintiff has failed to satisfy the court that these claims are not debts as contemplated under Act 40 of 2002. Therefore claims for a debt against organs of state do require a notice in terms of the Act 40 of 2002.

[11]      Further the test on exception is for the excipient to satisfy the court that the conclusion of law for which the plaintiff contends cannot be supported upon every interpretation that can be put upon the facts. In Francis v Sharp 2004 (3) SA 230 (C) 240 it was held an exception may be taken only when the vagueness and embarrassment strike at the root of the cause of action pleaded, ie if the other party will be seriously prejudiced if the allegations remain. No such submissions have been made that the plaintiff will be prejudiced. The exception on these grounds therefore cannot succeed.

[12]      On the exception to jurisdiction it follows that due to competing rules of jurisdiction more than one court may have jurisdiction over one and the same matter. The defendants submit that the individual claims comprising 2387 fall within the jurisdiction of the magistrates' courts ought to be instituted in the respective magistrate courts. By virtue of the high court having inherent jurisdiction and the plaintiff being dominus litus it is not precluded from instituting an action in the high court as it is at liberty to choose a forum of its convenience. The plaintiff is in control of its case. However the high court jurisdiction maybe specifically oust in this matter if the defendant can prove the high court's lack of jurisdiction by the legislation it relies upon. Therefore the exception to the special plea in this regard is dismissed on the basis that the plaintiff will not be seriously prejudiced if the allegations remain and that the defendant pursues its jurisdictional special plea in the trial court.

[13]      The defendant's contention that the plaintiff lacks locus standi on behalf of the service providers due to its failure to furnish factoring and cession agreements and it may not do so without consent of the defendant. In Propell Specialised Finance (Pty) Ltd and Attorneys Insurance Indemnity Fund NPC 2019 (2) SA 221 (SCA), the court held that to cede rights under an insurance contract without the consent of the insurer is invalid. However the matter at present is distinguishable from cession of an insurance policy were the delectus personae would impact the insurer. In this matter those considerations do not arise, as the defendant's administer a public fund for the benefit of those who qualify in terms of the Compensation Act. The test is different. The purpose of the cession of the claim is to facilitate and expedite the processing of the claim against the public fund.

[14]      In Screening & Earthworks (pty) Ltd v Captial Outsourcing Group (Ply) Ltd [2008] 1 SA 611 (B) it was held that the exception rule cannot be used to attack the vagueness of a contract relied upon by a party, an exception is only concerned with pleadings. Hence this special plea has no merit because the cession agreement is pleaded and the individual cession agreements forming the facta probantia can be provided for verification, it need not form part of the pleadings.

[15]      Further the plaintiffs amended particular of claim does contain all averments necessary relating to the cession of accounts by the service providers. The total amount claimed comprises individual claims of each service provider for which a list is provided and can be individually differentiated. The amounts that are claimed are contained in a tariff that is specifically Gazetted for this purpose. Therefore in my view the plaintiff is in a position to prove locus standi and the exception to the special plea in this regard is upheld and struck out.

[16]      The defendant counterclaims for a declaratory order that the agreement and order of 31 July 2009 does not apply to the claim in question. They submit that the order is res judicata and can only apply to that matter and has no impact on the current case. For the excipient (plaintiff) to succeed on striking out the defendant's counterclaim they must show that the defendant's claim is bad in law. In Belet Cellular v MTN Service Provider (20141 ZASCA 181 it was held that the excipient must show that the claim does not bear the meaning contended for by the plaintiff. In this regard the plaintiff does rely on the court order incorporating the agreement to have its claims settled within a period of 75 calendar days. Therefore the court may allow the question raised by an exception to stand over for the decision at the trial especially if it appears that the question may be interwoven with the evidence that will be led at the trial. As a result the exemption to the counterclaim is dismissed.

[17]     Court Order

17.1      The exception to the special plea of locus standi is upheld.

17.2      The exception to the special pleas of jurisdiction and non-compliance in relation to notices and the counterclaim is dismissed.

17.3      The costs are reserved and to be determined by the trial court.

 

 

 

FRANCIS-SUBBIAH, AJ

ACTING JUDGE OF THE HIGH COURT OF SOUTH AFRICA

GAUTENG DIVISION

PRETORIA

 

 

 

Counsel for the Plaintiff: Adv CJ WELGEMOED

Counsel for the Defendant: Adv MOTIBE

Date of Hearing: 3 September 2019

Date of Judgment: 19 September 2019

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