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THE CLINIC GROUP TAKES SWAZIMED TO COURT

12/03/2020 01:29:00 BY MBONGISENI NDZIMANDZE

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MBABANE - Fresh from scoring a victory against Medscheme, SwaziMed has been taken to court by The Clinic Group (PTY) Limited.

This comes after SwaziMed, in its report, partly blamed The Clinic Group (PTY) Limited for its (SwaziMed) low surplus in 2018.

In its director’s report, SwaziMed reported that it recorded a surplus of E51 457 484 in 2018 compared to a surplus of E78 579 273 in 2017.

According to the fund, the reasons for the lower surplus in 2018 were inter alia, an increase in benefits of 6.5 per cent and 10 per cent increase in risk claims due to additional claims paid dating back to the period between 2012 and 2016.
“These claims were paid to the Clinic Group which took advantage of the fact that the fund could not verify them as it did not have the data for the period which was withheld by Medscheme,” reads part of the report.

Decision

The Board of the fund further stated that it took a decision to relieve its members from the alleged traumatic conduct and legal action taken against them by the Clinic Group.

Other factors that attributed to the low surplus were; zero increase in contributions in 2018 and contribution paid to TopMed on behalf of SwaziMed students who are studying in South Africa. These are allegations whose veracity is still to be tested in court. The Clinic Group (PTY) Limited, which comprises Manzini Clinic Private Hospital, Mbabane Clinic, Matsapha Health Centre and Trauma Link, has since taken SwaziMed to court where it is challenging some of the contents of its report.

Statement

The applicant (The Clinic Group) is seeking an order directing SwaziMed to remove the statement in paragraph nine on Page three, third bullet point, of the directors’ report in respect of the payment of claims.

It is further praying for an order directing the respondent (SwaziMed) to communicate an apology to all shareholders of the respondent and all other persons or companies to whom the directors’ report was communicated.

The applicant views the allegations made about it as defamatory and wants same to be declared to be defamatory and false.
In his founding affidavit, Dr Mark Mills, who is the Clinic Group Medical Director, averred that what was startling was that when one had regard to the schedule, there were other reasons for the drop in the recorded surplus, which SwaziMed allegedly failed to mention at all.

According to Mills, the respondent failed to mention a drop in premium income by E2 587 907, an increase in administration expenses by E955 848 and a decrease in investment income of E8 083 344.

Fraudulent

“These factors were pertinent to the drop in surplus of almost 42 per cent, but are not mentioned at all in the narration that follows from the schedule. Instead, what is highlighted is so-called fraudulent conduct on the part of the applicant, which is clearly mala fide on the part of the respondent,” argued Mills.

He said it was disappointing that even though The Clinic Group was a shareholder of the respondent, Swazi Med allegedly did not even approach the applicant at all on this issue.

Mills told the court that The Clinic Group would have been happy to provide an explanation regarding any of the claims that it had submitted had SwaziMed taken time to enquire.

He narrated that on March 5, 2020, the applicant’s attorney addressed a letter to the Chief Executive Officer of Swaziland Medical Aid Funds, Peter Simelane, in which it referred to the statement in the report which was allegedly untrue, incorrect and defamatory to the applicant.

Mills averred that the letter from the applicant’s attorney drew attention to the implication contained in the statement that The Clinic Group was allegedly engaged in fraudulent conduct by making claims to which it was not entitled to. He told the court that The Clinic Group’s attorney demanded a retraction of the statement and its replacement in a factually correct statement and the issuing of an unreserved apology on or before March 6, 2020.

He submitted that in a letter dated March 6, 2020, the fund contended that the report was factually accurate. “The report has been circulated to all shareholders of the respondent, many of whom are customers of the respondent.

The list includes Eswatini Electricity Company, Eswatini Post and Telecommunication Corporation, First National Bank, Standard Bank, Central Bank of Eswatini, Inyatsi Construction, Kirsh Holding, Conco, Eswatini Beverages, Eswatini MTN, Eswatini National Housing Board, Waterford KaMhlaba, Sincephetelo Motor Vehicle Accident Fund, to name but a few,” contended Mills.

He further argued that many of these were customers of the applicant and in the case of Conco; the applicant operates a clinic for all its staff, as such, the alleged defamatory nature of the statements was extremely damaging to the applicant.

Dishonestly

According to Mills, the words in the report allegedly conveyed to a reasonable reader that The Clinic Group (PTY) Limited had acted dishonestly or fraudulently by taking advantage of claims which could allegedly not be verified. He further claimed that the words also conveyed to a reasonable reader that the applicant improperly subjected patients to traumatic conduct by taking legal actions against them. Mills submitted that the applicant was within its rights to take legal action against SwaziMed members for services rendered.

He alleged that this was moreso, because although the service was provided to the members of SwaziMed, when payment was made by the respondent, this was done directly to its members as opposed to the applicant.

Mills stated that in many instances, the members who received payment from SwaziMed did not remit those funds to the applicant. He insisted that the applicant was within its right to institute legal proceedings for services rendered and for which it had not been paid.

Reputation

The applicant contended that it had a prima facie right to the protection of its dignity and reputation. The Clinic Group further pointed out that it had been providing medical services in the Kingdom of Eswatini since 1960 and in this period, it had gained a reputation of being the foremost provider of medical services in the country.

The applicant further argued that it had invested heavily in human capital and technology to ensure that it could provide First World medical services in Eswatini on par to that provided in South Africa.

“In that regard, the applicant can provide a wide range of medical services in every field of anatomy. This has come at a substantial capital investment over the years and a scurrilous accusation such as that has been made by the respondent, to its major customers and clients, is an infringement of the protection of its dignity and reputation,” submitted the applicant.

Judge Titus Mlangeni yesterday issued an interim order directing SwaziMed to remove the statement in paragraph 9 on Page 3, third bullet point, of the directors’ report containing allegations in respect of the payment of claims to The Clinic Group. The judge directed that when it comes to item 9, third bullet, the chairman of the meeting will have to state that there is a court order preventing discussion of same.

He said during the meeting which is listed for today, the shareholders can discuss all other items save for the issue relating to payments of the claims to the Clinic Group. The interim will be in operation pending finalisation of the application.
The application is vigorously opposed by SwaziMed, which is represented by senior lawyer Mangaliso Magagula of Magagula Hlophe Attorneys.

The applicant was represented by Advocate Patrick Flynn, who has been instructed by Earl John Henwood. The merits of the matter will be heard by the court on April 16, 2020 where the respondent will show cause why the interim order should not be made final.