On 9 October 2024, the Constitutional Court ruled in favour of the executor of a deceased estate and ordered a medical scheme to honour the contractual obligations it owed to the deceased.    

One of the issues dealt with in the judgment is whether the decision of the Medical Schemes Appeal Board, in upholding the termination of the deceased’s membership due to an alleged material non-disclosure, constituted administrative action as defined in the Promotion of Administrative Justice Act (PAJA).   

The deceased had unsuccessfully challenged the termination of her membership before various administrative bodies, culminating in the decision of the Appeal Board, which prompted her to approach the courts for the review and setting aside of the Appeal Board’s decision in terms of PAJA. 

The deceased passed away after her application to the Constitutional Court was lodged but before the matter was heard.  The executor of the deceased estate was therefore substituted for the deceased as the applicant.  The court explained that the right to just administrative action, which underpins a review application in terms of PAJA, is transmissible to a deceased estate because it is not purely personal in nature.  The right attaches to the relevant exercise of public power itself, not the party bringing the review application.

In deciding whether the Appeal Board’s decision constituted administrative action, the court considered the following characteristics of the decision:

  • The Appeal Board is an organ of state that performs a public function by scrutinising the decisions of the Council for Medical Schemes and indirectly those of the Registrar of Medical Schemes.
  • The Appeal Board’s decision was not merely a contractual matter but involved the exercise of public power, as the decision had broader implications for the regulation of medical schemes and the protection of members’ rights.
  • The Appeal Board derives its power from the Medical Schemes Act, which is designed to regulate medical schemes and protect members’ rights.   
  • The termination of the deceased’s membership, which was the subject of the Appeal Board’s decision, had a direct and adverse effect on the deceased’s rights, specifically her right to access healthcare services.

Based on these factors, the court found that the Appeal Board’s decision constituted administrative action, due to the statutory nature of its powers and the impact of its decision on the deceased’s rights.  Having come to that conclusion, the court reviewed and set aside the decision because:   

  • it was procedurally unfair; and
  • the non-disclosures cited were not material.

Accordingly, the Appeal Board was ordered to reinstate the deceased’s membership and honour the contract it had with the deceased.  The Appeal Board was also ordered to pay the costs of the litigation.  

The tests applied in this case will be relevant to PAJA challenges against the decisions of similar administrative bodies.

The case is Swanepoel N.O. (Executor in the Estate Late Mignon Adelia Steyn) v Profmed Medical Scheme [2024] ZACC 23.