REPUBLIC OF NAMIBIA

IN THE HIGH COURT OF NAMIBIA MAIN DIVISION, WINDHOEK

RULING URGENT APPLICATION

CASE NO.: HC-MD-CIV-MOT-REV-2019/00411

In the matter between:

HERITAGE HEALTH MEDICAL AID FUND APPLICANT

and

THE REGISTRAR OF MEDICAL AID FUNDS FIRST RESPONDENTMINISTER OF HEALT AND SOCIAL SERVICES SECOND RESPONDENTNAMFISA BOARD OF APPEAL THIRD RESPONDENT

Neutral citation: Heritage Health Medical Aid Fund v The Registrar of Medical Aid

Funds (HC-MD-CIV-MOT-REV-2019/00411) [2020] NAHCMD 359 (14 August 2020)

Coram: RAKOW, AJ

Heard: 30 June 2020

Delivered: 14 August 2020Reasons: 14 August 2020

Flynote: Application to review decision of administrative body and administrative

official – Article 18 imposing a duty on administrative body to act fairly and

reasonably – Consideration whether the application made to the Registrar of Medical

Aids really proposed a change in calculation and/or in the amount of annual

contributions payable by the members.

2

Interpretation of statutes – If words employed by law giver are clear and

unambiguous - same to be given their ordinary grammatical meaning.

Summary: This matter initially came to court as an urgent application, which was

dismissed for lack of urgency on 5 December 2019. The applicant in these

proceedings brought an application for review against the respondent seeking the

following relief, essentially seeking a declaratory relief regarding the annual

contribution increase and whether such an increase forms part of an amendment of

the rules of the applicant and therefore require approval from the first respondent. It

further seeks the reviewing and setting aside of the first respondent’s decision

regarding the 2019 annual contribution.

The Respondent opposed the application for review and contended that the decision

of the Registrar was one which was reached after a detailed consideration of the

application for the amendment of the Applicant’s rules and that all factors that

needed to be taken into account in such a process of consideration, was taken into

account. They further submitted that the Register did adhere to the audi alteram

partem principle in that the Applicant was engaged in correspondence as well as

represented at in-person meetings between the personnel of the Registrar and

persons representing the Applicant. A number of shortcomings were identified and

pointed out to the Applicant and a number of rule changes were in fact approved.

The Respondent also denies that the conduct of the Registrar in any way violated

the applicant’s right to conduct its business, entrenched under Article 21(1)(j) of the

Namibian Constitution.

Held that the interpretation given by the applicant that it only needs to be approved

initially and from there on the Applicant can amend the contributions by giving one

month’s written notice without obtaining the approval of the Registrar is clearly

wrong.

Held that the court finds that there was indeed numerous opportunities for audi

created during the process of dealing with the application of amendment of the rules

submitted by Heritage Health to the Registrar of Medical Aid Funds.

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Held further that the decision making process in the opinion of the court meets the

standard that is required in terms of article 18 of the Namibian Constitution, being

that it should be “fairly and reasonably and comply with the requirements imposed

upon such bodies and officials by common law.”

Held furthermore that the Registrar in terms of the requirements of the Medical Aid

Funds Act, acts in the public interest when performing any of his functions under the

act, and in doing so, he must weigh a number of interest against one another. In

coming to the conclusion that he did, the court finds that he indeed balanced these

and explained his reasoning behind the balancing of these interest to the Applicant in

writing.

Held that the court refuses to grant a declaratory, namely that the annual contribution

increase of medical aid funds does not qualify as a rule amendment of the rules of

the applicant as the court find that it did in fact amount to a rule change and should

therefore be approved by the Registrar of Medical Aids.

ORDER

1. The review application and the declaratory relief sought are therefore

dismissed with costs, costs to include the costs of one instructing and two

instructed council, save for the appearance on 30 June 2020 where only one

instructed council appeared.

2. The matter is removed from the roll and is regarded as finalised.

REVIEW JUDGMENT

RAKOW, AJ:

Introduction

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[1] The applicant in this matter is Heritage Medical Aid Fund, a medical aid fund

registered in terms of the Medical Aid Funds Act, 23 of 1995 with its head office

situated at 100 Robert Mugabe Ave, Windhoek. The First Respondent is the

Registrar of Medical Aids, which in terms of section 3 of the Act is the person

appointed as the chief executive officer of the Namibian Financial Advisory Authority

(Namfisa) whose head office is situated at Namfisa, 154 Independence Avenue.

Initially the Second Respondent was the Minister of Health and Social Services, but

the Second Respondent had been miss-joined and should not be a party to these

proceedings. The correct party cited for dealing with pending appeals, is the Namfisa

Board of Appeal, the Third Respondent, which is in terms of the Act the responsible

appointed body for dealing with the said.

[2] This matter initially came to court as an urgent application, which was

dismissed for lack of urgency on 5 December 2019. The first part of the application,

headed Part A requested urgent interim relief and was not granted.

[3] Part B of the application deals with the request of review and declaratory relief

sought by the applicant regarding the annual contribution increase and whether such

an increase forms part of an amendment of the rules of the applicant and therefore

require approval from the first respondent. It further seeks the reviewing and setting

aside of the first respondent’s decision regarding the 2019 annual contribution. The

Part B of the relief reads as follows:

Part B – Review and Declaratory Relief:

Take notice that the applicant – only in the event of relief not being granted in terms of Part

A prayer 3 above – intend to make application to this Court in terms of Rule 76 and in the

ordinary course for an order:

1. Declaring that the annual contribution increases of medical aid funds does not qualify

as a rule amendment of the rules of the applicant and does not require the approval

of the first respondent.

2. Reviewing and setting aside the first respondent’s decision rejecting the applicant’s

2019 annual contribution increases.

3. The first respondent shall pay the applicant’s costs, such to include the costs of one

instructing and two instructed counsel.

4. Granting the applicants such further or alternative relief as this Honourable Court

may deem fit.

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[4] During submissions, Adv. Totemeyer indicated that the 2nd prayer is really an

alternative prayer to the first prayer. The applicant therefore seeks firstly a

declaratory, namely that the annual contribution increase of medical aid funds does

not qualify as a rule amendment of the rules of the applicant and then alternatively

the reviewing and setting aside of the First Respondent’s decision rejecting the

Applicant’s 2019 annual contribution increases. The application made by the

applicant is supported by affidavits of Hendrik Petrus Kruger, Hester Jacoba

Spanenberg and Ané Maas. Kenneth S Matomola, filed an opposing affidavit on

behalf of the first respondent.

Background:

[5] Section 30 of the Medical Aid Funds Act 23 of 1995 as amended provides that

every fund shall have rules making provision for a number of things that is listed

under this section. Section 30(n) provides specifically the following:

‘if any membership fee is payable, the amount thereof or the basis on which it is to

be calculated.’

Under s 31(1), which deals with the amendment of rules, provides that the registered

fund may amend or rescind any rules or make any additional rule but these rules or

changes will only be valid if it has been approved by the Registrar and duly

registered.

[6] The Registrar requires all annual contribution increases to be submitted to

him for consideration by 31 October the previous year. This directive forms part of a

circular sent out by the Registrar in 2013 in which the Registrar indicates that he is

‘required to properly check, and if necessary investigate and resolve issues of

concern with the fund before approval of the proposed changes can be granted.’

The annual contribution increase for 2019 was therefore submitted to the Registrar

by the applicant on 31 October 2018. The decision of the Registrar, according to the

first defendant, was then communicated to the applicant in letters dated 24 January

2019 and again in 26 February 2019. In these letters, the annual contribution

increase was rejected.

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[7] The applicant then filed an appeal against the decision of the Registrar on 10

May 2019. The contention of the Registrar is that this appeal was filed out of time as

it should have been filed by latest 12 March 2019 if it relied on the decision of 26

February 2019. The first respondent insists that the applicant did not file a

condonation application together with this appeal. The applicant was requested to

file a revised appeal and on 27 August 2019, such revised notice of appeal was filed.

[8] The Registrar of Medical aids further published a public notice in the

newspapers indicating that some of the 2019 annual contribution increases and

benefits of Heritage Health were not approved by him and as such, members are not

obligated to pay the said increased premiums. Hereafter the legal practitioners on

behalf of Heritage Health approached the Registrar of Medical Aids upon which they

were informed that the 2019 contribution increases were implemented without the

approval of the Registrar and that he would not withdraw the Public Notice dated 16

September 2019 (which was published in the newspapers) and that this would be the

Registrar’s final position on this matter. This then prompted the applicant to

approach court on an urgent basis, initially seeking an order as set out in part A of

the application and eventually bringing us to deciding on Part B of the application as

set out above.

MERIT OF THE APPLICATION

Annual contribution increases of medical aid fund does not qualify as a rule

amendment of the rules of the Applicant

[9] The argument put forward on behalf of the Registrar of Medical Aids mainly

must be determined with reference to the Registrar’s powers in terms of the Act,

which provides that medical aid funds must be administered on sound business

principles and for the protection of the members of a medical aid fund, it is necessary

that such a fund be regulated and supervised by the Registrar, in line with the

statutory purpose of the Registrar, as a so called watch-dog.

[10] From the submissions made to court it is clear that the Registrar of Medical

Aids holds the view that annual contribution increases must be approved by the

Registrar. The Medical Aid Funds Act, 23 of 1995 in section 30(1)(n) under the

heading Rules of funds reads as follows:

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‘30. (1) Every registered fund shall have rules in which provision shall be made –

(n) if any membership fee is payable, the amount thereof or the basis on which it is to be

calculated.’

[11] Rules of the fund are then also defined under section 1 of the Act as rules of

the fund referred to in section 30 of the Act. This section includes a wide variety of

provisions which would form part of the rules of such a fund, including provisions

surrounding for the minimum and maximum benefits to which its members and their

dependents and, if applicable, different categories of such members or dependents

are entitled to1 and provisions for the payment of such benefits according to a scale

or specific directives, set out in the rules2. It then also include a provision for rules of

the fund dealing with the membership fee that is payable, the amount of such fees or

the basis on which it is to be calculated. And changes to rules containing these

provisions should therefore be seen as a rule change.

[12] Section 31 of the said act then proceeds and sets out the process of

amending the rules of the fund:

‘(1) Subject to the provisions of this section, a registered fund may, in the manner

directed by its rules, amend or rescind any of such rules or make any additional rule but,

notwithstanding the provisions of any other law, no such alteration, rescission or addition

shall be valid unless it has been approved by the Registrar and registered under subsection

(2).

(2) On receipt of a written notice from a registered fund setting out the particulars of an

alteration or rescission of a rule or an addition to the rules thereof, and a certificate signed by

the principal officer, that such alteration, rescission or addition has been adopted in

accordance with the provisions of the rules of the fund, the Registrar shall -

(a) if he or she is satisfied that the alteration, rescission or addition will not render the rules

of the fund inconsistent with this Act, register the alteration, rescission or addition and return

to the fund a copy of the notice with the date of registration endorsed thereon;

(b) if he or she is not so satisfied, in writing notify the fund accordingly and indicate the

reasons for his or her rejection of the alteration, rescission or addition.

(3) The Registrar may order a registered fund to -1 Section 30(1)(l) of Act 23 of 1995.2 Section 30(1)(m) of Act 23 of 1995.

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(a) within a period of 30 days as from the date on which the Registrar addressed the request

to the fund, amend in the manner indicated by the Registrar; or

(b) apply in the manner indicated by the Registrar, any rule of the fund which is, in the

opinion of the Registrar, being applied in a manner inconsistent with the provisions of this

Act.’

[13] On 16 September 2013 the Registrar of Medical Aid Funds further issued a

circular PI/MA/3/16/9/2013 instructing that all benefit and contribution changes

should be submitted to the Registrar by 31 October 2013 for their changes to be

implemented effective by 1 January 2014. The Registrar also points out that he is

‘required to properly check, and if necessary, investigate and resolve issues of

concern with the fund before approval of the proposed changes can be granted.’

This arrangement seems to have been the arrangement in place since 2013

regarding changes in the benefit and contribution structures of the various funds

under his supervision. It further sets out what should accompany such a request for

change, like a signed resolution by the Board of Trustees and a detailed actuarial

valuation report. It further directs that “no amendments to the rules of Medical Aid Funds

will be valid unless they have been approved by the Registrar and registered with the

Authority in terms of Section 31 of the Act. Implementation of the above mention changes

without the Registrar’s approval is in contravention of Section 31 of the Act, and will be

subjected to penalties in accordance with Section 45 of the Medical Aid Funds Act, (Act 23

of 1995)”

[14] From the above it is therefore clear where the submission from the Registrar

of Medical Aids come from and it is also clear that the calculation of and/or amount

of annual contributions form part of the rules of a fund and can be changed, by

following the prescribed process and with the necessary approval from the Registrar

of Medical Aids. It is further true that any medical aid fund’s contribution structure is

one of the focus areas for determining the financial soundness and financial health of

any given fund and is therefore included in the interpretation of calculation of a

contribution.

[15] The question that however needs to be answered in this instance is whether

the application made to the Registrar of Medical Aids really proposed a change in

calculation and/or in the amount of annual contributions payable by the members.

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When interpreting legislation or documents, our courts have set down principles that

should be followed. In Total Namibia (Pty) Ltd v OBM Engineering and Petroleum

Distributors CC O’Reagen AJA quoted a South African court with approval when she

referred to the decision of Natal Joint Municipal Pension Fund v Endumeni

Municipality3 where Wallis JA usefully summarised the approach to interpretation as

follows:

'Interpretation is the process of attributing meaning to the words used in a document,

be it legislation, some other statutory instrument, or contract, having regard to the context

provided by reading the particular provision or provisions in the light of the document as a

whole and the circumstances attendant upon its coming into existence. Whatever the nature

of the document, consideration must be given to the language used in the light of the

ordinary rules of grammar and syntax; the context in which the provision appears; the

apparent purpose to which it is directed; and the material known to those responsible for its

production. Where more than one meaning is possible, each possibility must be weighted in

the light of all these factors. The process is objective, not subjective. A sensible meaning is

to be preferred to one that leads to insensible or unbusinesslike results or undermines the

apparent purpose of the document.’

[16] In a circular I/MAF/CIR/01/2018 dated 1 June 2018 the Registrar of Medical

Aids again deals with the submission of rule amendments and contributions and

benefit changes of medical aid funds. The Applicant argues that the Registrar makes

a distinction between rule amendments and contributions and benefit changes,

clearly because these are not treated as rule changes but under para 2 of the

circular the Registrar says the following when discussing the current practice:

‘Funds submit rule amendments and contributions and benefit changes (which are

an integral part of the rules) to the Registrar throughout the year.’ The Registrar’s

understanding is therefore that the changes in contributions and benefits are

changes to the rules. He then proceeds and regulate the submission of rule

amendments and a different period for the submission and assessment of

contributions and benefit changes.

[17] The proposed rules which accompanied the initial application for registration

as a medical aid fund, which was made in 2014, define contributions4 to mean “the

amount calculated on the basis set out in the Rules and payable to the Fund as membership

3 2012 (4) SA 593 (SCA).4 Point 2.17 on page 8 of the rules of the fund (document bundle page 71).

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fees. Such contributions shall include the administration fee charged by the administrator

and levies payable to NAMAF and NAMFISA or any other statutory duty or levy fee that may

be implicated. “

[18] Contributions to the fund are dealt with under point 5 of these rules. It is

subdivided in 5.1 amount of contributions, 5.2 payment of contributions, 5.3 liability

of employers and members and 5.4 arrear contributions. The specific total monthly

contributions payable is set out in an annexure referring to the monthly payable

contributions. What follows directly behind this is a document named Heritage

Health Contributions: 20145. This document states that the contributions payable

depends on the benefit option chosen, day-to-day package elected, age of the

principle member, number of adult dependents and number of child dependents. It

then provides for the different benefit options available, the age(s) of the members

and different day-to-day packages. From this, it is clearly understood that these will

be the amounts that a member will use to calculate his/her contribution amount for

2014.

[19] Under point 8 of the rules6, dealing with general arrangements, one finds point

8.3 which deals with the amendments to the rules. It reads:

‘8.3.1 The Board of Trustees shall have the right to amend the Rules at any time,

provided that no such amendment shall be valid unless it has been approved and registered

by the Registrar and that no such amendment shall be inconsistent with the Act and the

recommendations by the actuary.

8.4.2 The Board of Trustees shall make available a list of the amendment(s) to the

members as soon as is reasonably possible after registration thereof.’

[20] There is further a page titled Annexure A: Contributions at page 47 of the

proposed rules booklet which then starts with Terms and conditions regarding

payable monthly contributions. Under point 1 and 2 it reads as follows:

‘1.The contributions of each option are payable in accordance with the stated

contribution tables of the Fund and which are subject to the approval of the Registrar. The

Fund may amend the contributions by giving one month’s written notice to the member and

the employer group for its employees.

5 Page after page 35 of the proposed rules of 2014.6 Page 42 of the proposed rules of 2014.

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2. In the case of an individual member, the monthly contribution is calculated in terms of

the plan that has been opted for and according to the age of the eldest person and the

number of dependants: The contribution is subject to being amended with the applicable

approved increases to the options, change in status of dependents or change in applicable

age category.’

From the above it must be clear that changes to the monthly contribution amount can

be affected when you change the status of dependants, change applicable age

category or if it is amended through an approved increase to any option.

[21] The interpretation given by the Applicant that it only needs to be approved

initially and from there on the Applicant can amend the contributions by giving one

month’s written notice without obtaining the approval of the Registrar is clearly

wrong. As the annual contribution amount and/or calculation forms part of the rules

of the fund and is as such discussed in the proposed rules booklet, which also refers

to the process that must be followed when changing the rules of the fund, the court

finds that the approval of the Registrar is necessary for any changes to the

contribution amount. Although the initial actuary report referred to the proposed

2014 contributions, and that table was duplicated in the rules leaflet, it is not the

actuary report that is approved by the Registrar of Medical Aids, but the rules. The

proviso in the actuary’s report that refers to the recommended initial increase of 12%

in 2015 and a further 10% annually thereafter7 is at most merely supportive of what

is suggested in order to operate the fund optimally. It is a prediction, where certain

values are used, taking into account the increase in members and contributions,

claims, expenses etc. to predict the solvency of Heritage Health after a number of

years. These predictions and opinions expressed by the independent actuary can

never be seen as replacing the rules of the fund.

[22] The unnumbered annexure, which was included in the proposed rule booklet

in fact meets the requirement under section 30(1)(n) in that every registered fund

shall have rules in which provision shall be made – if any membership fee is

payable, the amount thereof or the basis on which it is to be calculated. It does just

that – it sets out what the membership or contribution amount is and how it is

calculated. This procedure was then also followed in 2017 when the Applicant

applied for a change in contribution amount for implementation in 2018. The

7 Para 5 page 21 of report by NMG Consultants and Actuaries (Pty) Ltd – August 2014.

12

application that was submitted on 31 October 2018 contained a number of proposed

changes, including changes to the contribution payments as well as to the payment

of benefits as the self-payment gap has been discontinued. It is further clear that the

intention of the Board of Trustees of the Applicant was to submit the amendments

which were approved by them, for approval to the Registrar, in line with the proposed

changes by the actuary.8

[23] The court therefore refuses to grant a declaratory, namely that the annual

contribution increase of medical aid funds does not qualify as a rule amendment of

the rules of the applicant as the court find that it did in fact amount to a rule change

and should therefore be approved by the Registrar of Medical Aids.

ALTERNATIVE RELIEF

The reviewing and setting aside of the First Respondent’s decision rejecting the

Applicant’s 2019 annual contribution increases

[24] In seeking the alternative relief, the Applicant argued that the Registrar of

Medical Aids’ decision was fundamentally irregular and violated in a number of

respects the Applicant’s Constitutional and Common Law rights, particularly the

rights related to the doctrine of audi alteram partem and the rights protected under

Article 18 of our Constitution which requires that administrative decisions must be

taken fairly and reasonably, the decision maker to properly hear the other party

before any decision is taken.

[25] It is the contention from the Respondent that the decision of the Registrar was

one which was reached after a detailed consideration of the application for the

amendment of the Applicant’s rules and that all factors that needed to be taken into

account in such a process of consideration, was taken into account. They further

submit that the Register did adhere to the audi alteram partem principle in that the

Applicant was engaged in correspondence as well as represented at in-person

meetings between the personnel of the Registrar and persons representing the

Applicant. A number of shortcomings were identified and pointed out to the Applicant

and a number of rule changes were in fact approved. The Respondent also denies

that the conduct of the Registrar in any way violated the applicant’s right to conduct

its business, entrenched under Article 21(1)(j) of the Namibian Constitution. 8 See board of Trustee Resolution on 28 September 2018 – page 198 pleadings.

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[26] A good starting point will be to look at the purpose of the Medical Aid Fund

Act, Act of 1995. The purpose of this act, and also by extent the Registrar of Medical

Aids, who must oversee the implementation of this act, was set out in Namibia

Association of Medical Aid Funds and Others v Namibian Competition Commission

and Another9 Smuts J explained it as follows:

‘[58] As was pointed out by Mr Unterhalter, s 28 of the MAF Act enjoins funds to carry

on their business as funds in accordance with sound business principles. … According to its

long title, the MAF Act is to provide for the control and promotion of medical aid funds.

Viewed as a whole, the MAF Act is in essence protective social legislation, requiring

registration of funds with the registrar (the chief executive officer of Namfisa). The registrar is

to supervise and control the operation of funds. In doing so, the registrar is empowered to

require the production of books and documents from funds, approve grant registration of a

fund and approve any changes to the rules of a fund and receive its financial statements.

[59] The registrar is precluded from registering a fund unless satisfied that its establishment

will be in the public interest. The registrar is also to be satisfied that the applicant will be able

to establish the proposed fund successfully as a fund, its business will be carried on in a

prudent manner and that its organisation and management is appropriate for the carrying on

of the fund in accordance with its rules and the MAF Act.

[60] …

[61] A These regulatory and supervisory provisions accentuate the statutory purpose

behind the MAF Act of providing protection for members of funds in the public interest in

pursuit of the purpose of a fund.

[62] …

[63] Funds are thus highly regulated in the public interest to protect their members and

ensure that the business of a fund is conducted within the confines of the Act. The

legislature has provided this protective framework in the interest of members. This is no

doubt because of the statutorily endorsed social function funds perform where members

subsidise each others medical costs on a principle of social solidarity thus rendering access

to expensive medical services as widely as possible. It is plainly in the public interest that as

many people as possible enjoy the benefits of fund members (to receive assistance in

9 2017 (3) NR 853 (SC).

14

defraying medical expenses) to relieve the public purse from providing those medical

services to those members. The purpose of the MAF Act is not only for control to be

exercised over funds but is also, according to its long title, to promote funds because of the

useful societal function they perform.‘

[27] In the process of complying with his statutory obligation, the Registrar in

PI/MA/3/16/9/2013 instructed that all benefit and contribution changes should be

submitted to the Registrar for him to meet the requirement of properly checking “and

if necessary, investigate and resolve issues of concern with the fund before approval of the

proposed changes can be granted.” It is therefore also the duty of the Registrar to point

out to the registered fund, if he is of the opinion that the fund is not financially sound,

based on the opinion provided by the actuary, to give notice to the fund to take steps

necessary to rectify or ensure financial stability of the fund10 or direct that rules be

amended or conduct its business in a certain manner.11

[28] The process in the current decision being sought to be reviewed by court,

started with the filing of the application for approval of its 2019 increases on 31

October 2018. This was done in accordance with circular I/MAF/CIR/01/2018 dated

1 June 2018 the Registrar of Medical Aids. It seems that the Registrar did not at that

stage considered the application as he was not in possession of two sets of the rules

of the fund and the proof of payment of the necessary fees was not attached to the

said application. After receipt of the application, on 10 November 2018 a certain

Rachel Kefas, a financial analyst at Namfisa informed the principle officer of Heritage

Health that these documents are still outstanding. She also asked for a soft copy of

the rules indicating where possible with track changes what in the rules is applied for

to be changed.12 To this request the principle officer replied on 2 November 2019

also via email that he will as soon as possible attend to the request and deliver the

documents requested. He was again reminded of the said outstanding documents

on 23 November 2018.13

[29] On 8 December 2018 a letter from Namfisa14, signed by Grace Mohamed the

General Manager for Insurance and Medical Aid Funds on behalf of the Register

Medical Aid Funds to the Chairperson of the Heritage Health fund, Ms Maxwell

10 Section 4(6) of the Medical Aid Fund Act.11 Section 4(7) of the Medical Aid Fund Act.12 See bundle of documents page 247 – annexures to founding affidavit of Hendrik Petrus Kruger.13 See bundle of documents page 249 - annexures to founding affidavit of Hendrik Petrus Kruger.14 See bundle of documentation page 290 - annexures to founding affidavit of Hendrik Petrus Kruger.

15

pointing out that the proof of payment of the prescribed fees were not received when

the documents were submitted together with two sets of the contribution tables and

the benefit structures as annexed to the rules of the fund with the necessary

signatures of the Chairperson and the Principle Officer of the fund. In this letter the

writer further raises the issue that the actuary in their report raised the issue that

there is no insurance arrangement in place for hospital and chronic benefits as well

as day-to-day benefit options. In the opinion of the actuary it is “strongly recommended

that the fund insure some of its benefits given the relatively small membership of the fund,

the volatile nature of the fund’s claims and the proposed changes to the benefit options of

the fund.” The writer then asks the Board of Trustees of the fund to indicate to the

Registrar how they are going to address this recommendation from the actuary and

they are to provide the said feedback on or before 13 December 2018, which was

also the deadline upon which they had to submit the outstanding documentation.

Although the Registrar warned them in this letter that there is not a proper

application before them, it raises the issue regarding the re-insurance for the first

time.

[30] On 10 January 201915 Namfisa again wrote to the Chairperson of Heritage

Health indicating that they have not received the documents requested yet and

reminded that it cannot implement any contribution or benefit changes before it has

been approved by the Registrar. On 22 January 2019 a further letter was written on

behalf of Namfisa16 indicating that they in fact did receive the documentation and

proof of the payment of the prescribed fee and revoked the letter dated 10 January

2019. This letter further acknowledged receipt of the Memorandum of Agreement

between the fund and Avacare Health Group which was submitted on 14 January

2019 (and not as requested on or before 13 December 2018) and pointed out that it

is still under consideration by the Authority (Registrar). The fund is then requested to

provide the Authority with a financial guarantee or equivalent information from

Avacare Health Group confirming that the amount is not encumbered in any form as

well as proof of the source of the funds. The letter further points out that this is

critical information for the assessment of the 2019 rule amendment application and it

should be submitted on or before 1 February 2019. From the letter it seems that

Avacare Health Group is the principle shareholder in Janus Investments (Pty) Ltd.

15 See bundle of documents page 297 - annexures to founding affidavit of Hendrik Petrus Kruger.16 See bundle of documents page 299 - annexures to founding affidavit of Hendrik Petrus Kruger.

16

[31] On 24 January 2019 Namfisa17 again wrote to the Chairperson of Heritage

Health and responded to some questions raised via email (which was unfortunately

not part of the documents placed before court) from Mrs. Hester Spangenberg who

at that time was the Managing Director of Janus Investments (Pty) Ltd who was the

fund administrator for presumably Heritage Health. In this letter the Registrar

addresses some issues raised by the said Mrs. Spangenberg about the approval

needed for changes to the contribution tables and benefit schedules, also the

documentation that was incomplete and the various exchanges there were

surrounding the request for the documentation and explaining that all the rule

amendment assessments were to be done by 30 November upon funds submitting a

complete application that will enable the Registrar to make an assessment on the

application. It again reiterated the provision of a financial guarantee or the equivalent

information from the Avacare Health Group confirming that the amount is not

encumbered in any form and proof of the source of the funds.

[32] Heritage Health responded in a letter dated 31 January 201918 indicating that

there was indeed a meeting between the staff of the Registrar and of Heritage Health

on 29 January 2019 where issues were discussed. The letter then continues to

address certain issues raised by Namfisa in their previous correspondence. It

proceeds and explains that “during 2018 it was repeatedly asked by Namfisa to attend to

the financial adequacy of the fund and that the trustees of the fund had done their utmost to

improve the financial situation by implementing various measures. Part of these measures

was to adjust the benefits and contributions offered by the fund for 2019.” They further

addressed the issue regarding the re-instatement of the 2018 approved benefits

whilst waiting for the approval of the 2019 benefits and contribution schedules. A

subsequent letter from Namfisa dated 7 February 201919 followed; acknowledging

the receipt of the letter dated 31 January 2019 and indicating that the application is

receiving their attention.

[33] It seems that the communication between Namfisa, Heritage Health and the

actuary continued with various emails being forwarded between the parties regarding

the calculations of the benefit structure and the proposed contribution, setting out the

percentages of the increments in more details. The fund was also requested to

provide proof that they indeed repaid their customers the difference between the 17 See bundle of documents page 301 - annexures to founding affidavit of Hendrik Petrus Kruger.18 See bundle of documents page 306 - annexures to founding affidavit of Hendrik Petrus Kruger.19 Bundle of documents page 310 - annexures to founding affidavit of Hendrik Petrus Kruger.

17

approved 2018 fees and the unapproved contribution fees for 2019, which Heritage

Health has in the meantime introduced. The submission date was extended to 15

February 2019 on request of Heritage Health but when it was not submitted, they

were penalized for a contravention of section 31(3) of the Act.

[34] On 26 February 2019 the Registrar informed Heritage Health of the outcome

of their application.20 Some rule changes were approved and then proceeded to deal

with the rule changes that were declined. The Registrar was not satisfied with the

agreement reached between the Avacare Group and the fund as a valid replacement

for re-insurance cover and therefore not a sufficient arrangement to mitigate the risk

of financial strain that may stem from the 2019 benefit amendments. It therefore

rejected the “weighted average increase of 44.4% on the contribution premiums of

the Prime, Standard and Top Day-to-Day benefits as well as the 8.95 increase on

the Hoodia benefit option, and the Acacia, Mopani and Makalani Hospital plans. The

same applied to the Baobab option increase of 8.9%. The fund is further urged to

consider adjusting the premiums of the Baobab option by medical inflation pending

the satisfactory implementation of reinsurance or equivalent satisfactory financing

arrangements.

[35] The Registrar then continues and set out the reasons why the memorandum

of agreement is not deemed to be an alternative to reinsurance cover that they

requested. These includes reasons like that the N$1 million agreed funding might not

be enough and any further additional amount required by the fund is subject to

further agreement by the funder and that although the agreement is in place, the

agreement does not provide satisfactory assurance that the funding will be available

when required. There was a further issue raised regarding the resolution from the

Board of Directors of the Avacare Group indicating that they agreed to provide the

financial guarantee to the fund. The source of the funding also remained a concern

as it seems that the N$1 million will be sourced by the Avacare Group from Erongo

Agencies or various unnamed entities as per a letter from the Director of Erongo

Agencies. The Registrar remarked that from the review conducted of the audited

annual financial statements of Erongo Agencies it seems that their assets do not

appear to be very liquid and that all present and future book debts were ceded to

Standard Bank Namibia Ltd, making trade receivable balances unattainable for the

purpose of providing financing to the fund. The Registrar concluded that because of 20 Bundle of documents page 321 - annexures to founding affidavit of Hendrik Petrus Kruger.

18

the above mentioned reasons, the surety given by Erongo Agencies is not deemed

to be a feasible alternative to reinsurance cover for the fund.

[36] The Registrar further raised the issue of the involvement of third parties in the

operations of the fund in that in terms of the Memorandum of Agreement there is

concerns that the provisions of the agreement might result in the Avacare Group

being overly involved in deciding the validity of claims and the subsequent payment

thereof. As a result, the Registrar made a recommendation that the fund is directed

to ensure that re-insurance arrangements are in place as recommended by the

fund’s actuary.

[37] The Registrar then continues and raises the issue of the self-funding gap.

From the explanation provided by the Applicants it seems that the self-funding gap

was part of the initial business module that was approved by the Registrar when the

fund was initially approved. It however seems that the Registrar has on a previous

occasion also raised the issue of the self-funding gap (in discussions surrounding the

2018 application as per the letter of Heritage Health dated 31 January 2019). The

Registrar points out that the self-payment gap in considered an irregularity as it was

not approved by the Registrar previously. The fund is then directed to discontinue

the practice of the self-funding gap with immediate effect and to provide proof thereof

on or before 25 March 2019. The Registrar then proceeded and made some other

comments about anomalies that were observed in the fund’s rules.

[38] In a letter dated 4 March 201921 the Principle Officer of Heritage Health wrote

to the Registrar of Medical Aids raising a number of issues for clarification after

receipt of the letter from Namfisa dated 26 February 2019. This letter dealt with the

re-insurance issue in that it clarifies that the measure proposed were merely an

undertaking to assist the fund should the fund run into cash flow shortages. “The fund

at that stage was still busy requesting re-insurance cover quotations with the aim of

obtaining suitable re-insurance cover to mitigate risks.” The letter further asked the

Registrar whether a 44.4% increase in premiums would be acceptable if satisfactory

re-insurance cover was in place and what is the meaning of equivalent satisfactory

financing. Also to clarify what is regarded not to be sound business principles as well

as how the proposed amendments will not be in the public interest. Similar questions

were raised regarding the rejection of the 8.9% premium increment for the various 21 Bundle of documents page 332 - annexures to founding affidavit of Hendrik Petrus Kruger.

19

plans on offer (which changes were rejected by the Registrar in the 26 February

2019 letter). The clarification requested on behalf of Heritage Health was to afford

their actuary and other support entities to give feedback to them to enable them to

comply with the time constrains laid down by the Registrar.

[39] The Registrar responded to the above request in a letter dated 13 March

201922 and gave detailed feedback on each of the issues raised. It proceeded to

explain why the Memorandum of Agreement between the Avacare Health Group and

the fund was a problem and in essence explained that “the risk that the contributions

set by the Fund are too low to cover the actual claims and other operational expenditure of

the Fund.” It further refers to the explanation provided by the letter of 4 March 2019

and indicated that in light of the said explanation, it is taken that the fund has not the

requirement of providing proof of re-insurance or an alternative arrangement. It then

proceeds to clarify what is understood under Public Interest and in this instance the

fact that an average increase of 44.4% increase to the Prime, Standard and Day-to-

Day benefit options is understood to eliminate the self-funding gap, which according

to the Registrar was an unapproved and unlawful arrangement. The Registrar

continues and say “I am of the view that it will not be in the best interest of the members of

the Fund nor of the public to approve such a steep contribution premium increase merely to

correct the unlawful practice of the Fund. “

[40] While dealing with the question regarding Sound Business Principles, the

Registrar refers to section 28(a) of the Act which requires a medical aid fund to be

conducted in accordance with sound business principles. He also refers to the fund’s

actuarial review report that accompanied the application which explicitly expresses

concern that the fund currently is having no insurance arrangement in place and

makes a recommendation to the fund to increase some of its benefits. And he

concludes that “accordingly, conducting the business of the Fund without reinsurance

cover or an equivalent satisfactory financing arrangement is not in line with sound business

principles. “ The Registrar in this letter deals further with each of the sets of questions

in turn and reiterates that as the memorandum of agreement is not to serve as a

replacement for re-insurance cover, he cannot pronounce himself on the conditions

of such an agreement.

22 Bundle of documents page 337 - annexures to founding affidavit of Hendrik Petrus Kruger.

20

[41] On 27 March 201923 the Chairperson of the Board of Trustees of Heritage

Health responded to the letter of the Registrar of 13 March 2019 and again pointed

out that the memorandum of agreement between Heritage Health and Avacare was

not to replace any reinsurance cover. She addressed the issue of Public Interest and

pointed out that in their opinion a person is not forced to make use of the services of

any specific fund and therefore the offers of any specific fund cannot be construed

not to be in the public interest. She further pointed out that the application made for

registration in 2014 made provision for the self-payment gap of 30% and was as

such approved and used until the end of 2018. During these years there was even

questions from Namfisa regarding the self-payment gap, but the legality of it was

never questioned. She then in detail explained the contribution options they have

together with a market analysis of for eg. The in-hospital benefit of Heritage Health

compared to other medical aid funds. As the self-payment gap was previously

accepted by the Registrar it is now unsound for the Registrar to say that it is not in

line with sound business principles.

[42] This letter further urges the Registrar not to “simply ignore all the principles used

by the Fund to devise its benefits and contributions as described in actuarial reports to

achieve its goals and objectives. The increase in the day-to-day contributions had been

determined using sound business principles and if the Fund chooses to ignore the proposed

increases, it would result in a negative cash flow which could ultimately lead to the financial

deterioration of the Fund and it would definitely not be in the interest of the members of the

Fund.” The letter then also points out that the Registrar cannot come to a conclusion

to reject the day-to-day contribution and benefits for 2019 by merely comparing the

costs of 2018 with what is proposed for 2019 as the issue is more complex. It should

in actual fact compare the products of other funds with the products and costs of

products of combinations available by Heritage Health.

[43] The Registrar responded on 10 April 201924 on the above letter and pointed

out that information or documents requested on 3 December 2018 has not yet been

received and he can therefore not access if the directives granted in the 3 December

letter has been implemented. The Registrar also pointed out that the submission of

the formal documents requested, like the two sets of rules, initialed by the Principle

Officer and the Chairperson of the fund and the Board of Trustees’ resolution,

together with proof of payment of the prescribed fees and the submission of the 23 Bundle of documents page 343 - annexures to founding affidavit of Hendrik Petrus Kruger.24 Bundle of documents page 354 - annexures to founding affidavit of Hendrik Petrus Kruger.

21

proposed application on the Electronic Regulatory System was only received on 3

April 2019.

[44] It then deals with inspections and a specific inspection period that was

communicated during 2018 and also address the directives and recommendations

issued based on the findings which resulted from contraventions of and non-

compliance with certain provisions of the Medical Aid Fund Act. It seems that these

recommendations were communicated in a letter dated 3 December 2018 which

does not form part of the documentation before court. Certain other issues were also

pointed out in this letter in relation to the appointment of the trustees and the

Chairperson of the Board and some other matters that does not form part of the

issues currently before court but points out a number of additional issues which

needs to be rectified as a result of an inspection conducted by the Registrar. It

however refers again to the letter of 25 March 2019 in which it was indicated that the

fund is still in the process of obtaining re-insurance cover. The Board of Trustees

was directed to attend to this matter sooner than later.

[45] In a letter dated 25 April 201925 the Registrar of Medical Aids writes to the

Chairperson of Heritage Health and indicates that he acknowledge receipt of the

letter dated 27 March 2019. He then proceeded and explained that the Memorandum

of Agreement between the fund and Avacare is not deemed as equivalent

satisfactory financing. He further informed her that his position regarding sound

business principles remains as set out in the 13 March 2019 letter. With regard to

the issue of the self-funding gap, he acknowledged that it is mentioned in the actuary

reports dated August 2014 and August 2017 and that they have dealt with

complaints surrounding the self-funding gap. He points out that he is mandated to

approve fund rules and amendments and not actuary reports and the fact that it was

mentioned in the actuary reports can therefore not be construed as approval for the

practice.

[46] The letter proceeds and clarify that the approved benefit options as contained

in the rules of the fund, do not make provision for the practice. It is further only

discussed in the two mentioned actuary reports and not in all actuary reports and the

remark regarding the fact that it is not in line with sound business principles refers to

the funds implementation of the said gap without the approval of the Registrar. It also 25 Bundle of documents page 369 – annexures to founding affidavit of Hendrik Petrus Kruger.

22

refers to the provisions of section 30(1)(l) of the Medical Aid Funds Act which

requires medical aid funds to make provision for the minimum and maximum benefits

to which members and their dependents are entitled to in their rules. The Registrar

maintained his position that the self-funding gap is irregular and was never approved

by him. It continues and reiterates the position regarding the approval of the Hoodia,

Acacia, Mopani and Makalani options as far as indicating that an 8.9% contribution

increase will be acceptable provided that the issue of re-insurance is sorted out. The

increment proposed for the Boabab option is also acceptable.

[47] I proceeded and discussed the correspondence between the parties at length

because it is necessary to understand what was discussed and the extend of the

communication. The allegation by the Applicant is that the Registrar took decisions

on 24 January 2019, 26 February 2019 and 25 April 2019. In essence the Applicant

argues that the Registrar provided two main reasons for refusing the 2019

contribution increase, the first being that the N$1 million secured by Heritage as self-

insurance is not accepted by him because heritage stated that it was not intended to

replace reinsurance cover, and secondly the Registrar refused the day-to-day

increase of 44% made up of a 14.4% annual increase and a 30% increase to

accommodate the 30% self-funding gap which was to be removed by Heritage

although it has always been part of the business module of Heritage Health.

[48] The Applicant further appealed to the Appeals Board created in the

legislation, where aggrieved parties can turn to if they are not satisfied with the

decision of the Registrar. It however seemed as if their appeal was withdrawn as the

appeal process is allegedly tainted.

[49] The Applicant summarized its contentions in its heads of argument as follows:

1. The Registrar committed material misdire ctions and failed to apply his

minds to the decision-making. This rendered the decision-making irrational and

unreasonable;

2. The Registrar did not afford heritage any proper application of the audi

alteram partem principle as he did not properly hear Heritage before taking the decisions,

and he thereafter remained unwilling to reconsider or reverse his decision;

3. The Registrar’s ultimate decision remains irrational and unreasonable despite

the exact consequences having been pointed out to him (again in the application)

23

And therefore Heritage Health is entitled to the order as prayed for under part B of the

application.

[50] On the other hand the main argument by the Respondent is that firstly, the

Registrar engaged the applicant fully on the issues it raised after the 26 February

2019 letter – in letters dated 13 March 2019 and 25 March 2019; and secondly that

the structure of the Act is such that it clearly spells out what factors will be

considered when the Registrar deals with rule amendments. Therefore the Applicant

knew what the requirements was, specifically when dealing with contribution

increases. Their submission is therefore that the Applicant had sufficient audi during

the process but what the Applicant wants, is for the Registrar to change his mind.

The applicable law when considering the review relief

[51] Article 18 of the Namibian Constitution deals with Administrative Justice and

reads as follows:

‘Administrative bodies and administrative officials shall act fairly and reasonably and

comply with the requirements imposed upon such bodies and officials by common law and

any relevant legislation, and persons aggrieved by the exercise of such acts and decisions

shall have the right to seek redress before a competent Court or Tribunal.’

This is then also in line with the understanding of Natural Justice. Traditionally the

common law approach was that courts would not interfere with the exercise of a

discretion on the mere ground of its unreasonableness, this approach was however

changed in line with Article 18 of the Constitution.

[52] When discussing reasonableness, the High Court in Sikunda v Government

of the Republic of Namibia26 held as follows:

‘The traditional common law approach regarding unreasonableness as a reasonable

ground for review, was that the Courts will not interfere with the exercise of a discretion on

the mere ground of its unreasonableness, art 18 constitutes a departure from the traditional

common law grounds of review. A Court of law will examine the discretionary power to

determine whether it is fair and reasonable. If it does not meet those requirements the Court

will strike down the discretionary power as repugnant to the Constitution.’26 (3) 2001 NR 181 (HC).

24

[53] ACJ Strydom (as he was then) in Mostert v The Mininster of Justice 27 said the

following about Article 18 of our Constitution:

‘(It) requires fair and reasonable acts by administrative bodies and officials and

further requires them to comply with the common law and any relevant legislation.

Whether the Constitution intended to create a new ground for review, not as stringent as that

of the common law, has also not yet been argued before this Court and in this case the

parties accepted that that was so. For purposes of this case I shall also accept that it was

enough for the appellant to prove that the Permanent Secretary acted unreasonably.

The word 'reasonable', according to The Concise Oxford English Dictionary 9th ed means:

“(H)aving sound judgment; moderate; ready to listen to reason; not absurd; in accordance

with reason.” Collectively one could say, in my opinion, that the decision of the person or

body vested with the power, must be rationally justified. (See Mafongosi and Others v United

Democratic Movement and Others 2002 (5) SA 567 (TkH) at 575A - E.)’

[54] In Trusco v Deeds Registries Board 28 the Supreme Court dealt with the

question of reasonableness and O’Reagan AJA wrote the following in this regard:

‘What will constitute reasonable administrative conduct for the purposes of art 18 will

always be a contextual enquiry and will depend on the circumstances of each case. A court

will need to consider a range of issues including the nature of the administrative conduct, the

identity of the decision-maker, the range of factors relevant to the decision and the nature of

any competing interests involved, as well as the impact of the relevant conduct on those

affected. At the end of the day, the question will be whether, in the light of a careful analysis

of the context of the conduct, it is the conduct of a reasonable decision-maker. The concept

of reasonableness has at its core, the idea that where many considerations are at play, there

will often be more than one course of conduct that is acceptable. It is not for judges to

impose the course of conduct they would have chosen. It is for judges to decide whether the

course of conduct selected by the decision-maker is one of the courses of conduct within the

range of reasonable courses of conduct available.’

[55] Part of deciding whether a decision is reasonable, is deciding whether it is

justifiable. The process when examining whether or not a decision is justifiable as set

27 2003 NR 11 (SC).28 2011 (2) NR 726 (SC).

25

out in a minority judgement in Bel Porto School Governing Body v Premier, Western

Cape29give guidance in determining justifiability:

‘Both Courts and academic commentators have suggested that when examining

whether or not a decision is justifiable, the decision-making process must be sound, and the

decision must be capable of objective substantiation by examination of the facts and the

reasons for the decision. (Carephone (Pty) Ltd v Marcus No and Others 1999 (3) SA 304

(LAC)) Put another way, there must be a rational and coherent process that would tend to

produce a reasonable outcome.( Du Plessis and Corder Understanding South Africa's

Transitional Bill of Rights (Juta & Co; Cape Town, 1994) at 169) The suitability and

necessity of the decision are to be examined, and in this regard, a number of factors might

have to be considered: the nature of the right or interest involved; the importance of the

purpose sought to be achieved by the decision; the nature of the power being exercised; the

circumstances of its use; the intensity of its impact on the liberty, property, livelihood or other

rights of the persons affected; the broad public interest involved. It might be relevant to

consider whether or not there are manifestly less restrictive means to achieve the purpose.

(Mureinik 'A Bridge to Where? Introducing the Interim Bill of Rights' (1994) 10 SAJHR 31 at

41)

[166] In our view, the question to be asked is whether, bearing in mind such factors

described above, the decision can be defended as falling within a wide permissible range of

discretionary options. In this respect the principle of proportionality is particularly relevant.

(Corder 'From Administrative Law to Administrative Justice' chapter in Cheadle, Davis and

Haysom (eds) Fundamental Rights Under the New Constitution (Butterworths, Durban,

forthcoming book) at 29 (of the chapter)) Ultimately, the issue is a robust one of basic

fairness and proportionality, necessitating a contextualised judicial determination of whether

the decision is a defensible one on the basis of the reasons given, or whether it is so out of

line and tainted with unfairness as to demand judicial intervention.’

[56] Our courts has also in the past held that the decision maker is best placed to

determine the weight that is placed on the different factors when deciding on matters

that is placed before them. In the Namibian Competition Commission and Another v

Wal-Mart stores Incorporated30 O’Reagan AJA in the Supreme Court of Namibia

stated that:

29 2002 (3) SA 265 (CC).30 2012 (1) NR 69 (SC).

26

‘the range of considerations set out in both s 2 and s 47(2) make plain that the

decision whether to approve a proposed merger involves questions relating to the promotion

and safeguarding of competition in Namibia, as the title of the Act suggests, but also other

public interest considerations relating to the promotion of employment opportunities, the

protection and promotion of small and medium-sized enterprises and the expansion of the

participation of historically disadvantaged people in the Namibian economy. The decision is

one that requires 'an equilibrium to be struck between a range of competing interests or

considerations'. (See Bato Star Fishing (Pty) Ltd v Minister of Environmental Affairs and

Tourism and Others 2004 (4) SA 490 (CC) (2004 (7) BCLR 687) at paras 48 and 49)

Precisely how these differing goals should be balanced within the framework of the Act in

relation to each proposed merger is a question that both the Commission and the Minister

will have to address in the exercise of their statutory powers. This is a decision that the Act

specifically assigns first to the Commission and then to the Minister. As the Commission is

an institution specially constituted to consider competition matters, and the Minister bears

both constitutional and democratic responsibility for trade and industry, these are

assignments that should not lightly be bypassed.

[53] …The task of balancing the competing interests in the Act is not a task for which a court

has any special competence. Nor is it one that in the scheme of the Act is assigned to a

court...’

[57] When applying the above legal considerations to the facts of this matter, the

court finds that there was indeed numerous opportunities for audi created during the

process of dealing with the application of amendment of the rules submitted by

Heritage Health to the Registrar of Medical Aid Funds. There seems to have been

numerous interactions, not only via correspondence but also during meetings,

between members of the Applicant’s staff and the staff of the Respondent.

[58] The Respondent further gave reasons for his decisions and interact with the

Applicant on these reasons provided. The decision making process in the opinion of

the court meets the standard that is required in terms of article 18 of the Namibian

Constitution, being that it should be “fairly and reasonably and comply with the

requirements imposed upon such bodies and officials by common law.” The Registrar in

terms of the requirements of the Medical Aid Funds Act, act in the public interest

when performing any of his functions under the act, and in doing so, he must weigh a

number of interest against one another. In coming to the conclusion that he did, the

27

court finds that he indeed balanced these and explained his reasoning behind the

balancing of these interest to the Applicant in writing.

[59] The two main decisions, if we can call them that, that lead to the Applicant

bringing this review application relates to the decision on the self-funding gap and

the decision regarding the re-insurance. In the letter dated 4 March 2019 the

Chairperson of the Board of Trustees explained that they were still asking quotes for

the re-insurance cover that the Registrar requested them to put in place. She again,

in a letter dated 27 March 2019 pointed out that the memorandum of agreement

between Heritage Health and Avacare was not to replace any reinsurance cover.

The Fund therefore did not comply with the requirement set by the Registrar

regarding the re-insurance cover or alternative arrangement that should be in place

in order for the changes to the contribution scheme to be approved.

[60] The issue of the self-funding gap was also apparently previously addressed

with the Fund as it seems that it was already raised in 2018 by the Registrar. The

rules of the Fund does not provide for this and the opinion of the Registrar that in as

much as the rules does not provide for the self-funding gap although it forms part of

the business module as discussed in the actuary reports. The Registrar indicated

that he feels it is not in the public interest to have a 44.4% on average increment

once off in order to do away with this gap and also that it is not based on sound

business principles as it has not been approved in the rules of the fund.

[61] The court is therefore satisfied with the process that was followed by the

Registrar in dealing with this matter and will not grant the requested relief.

The order:

1. The review application and the declaratory relief sought are therefore

dismissed with costs, costs to include the costs of one instructing and two

instructed council, save for the appearance on 30 June 2020 where only

one instructed council appeared.

2. The matter is therefore finalized and removed from the roll.

----------------------------------

E Rakow

Acting Judge

28

APPEARANCES

APPLICANT Mr. Tötemeyer assisted by Mr. Jacobs

Instructed by Van der Merwe-Greeff Andima Inc

Windhoek

RESPONDENT: Mr. Corbett assisted by Ms. Bassingthwaighte

Instructed by Sisa Namandje & Co

29

Windhoek