Can deceased estates inherit administrative review rights? ConCourt rules

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This question was answered in the affirmative by the Constitutional Court in the case of Swanepoel N.O. (Executor in the Estate Late Mignon Adelia Steyn) v Profmed Medical Scheme [2024]. In that case, the late Mignon Steyn was a member of Profmed Medical Scheme until the termination of her membership pursuant to a non-disclosure of alleged material information on her membership application form.

In her membership application, Steyn stated that she had no conditions related to “any infection of the digestive system, liver, gallbladder (eg. gastric ulcers, hernia, poor digestion, gallstones, or spastic colon),” despite having previously been diagnosed with gastritis. As a result, her membership was terminated.

Various complaints and appeals to the Registrar of the Council for Medical Schemes (‘Registrar’) as well as the Appeal Board were lodged by Steyn, with no success.

Setting aside decision of Appeal Board

Steyn sought an intervention from the High Court, by instituting an application to review and set aside the decisions of the Registrar and Appeal Board in terms of section 6 of the Promotion of Administrative Justice Act 3 of 2000 (PAJA).

Steyn contended that the decision of the Appeal Board had been influenced by an error of law, arbitrary and/or capricious, not rationally connected to its reasons and that irrelevant considerations were considered. Steyn’s judicial review application was successful in the High Court, but later overturned on appeal by the full bench of the High Court.

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Following her unsuccessful application to the Supreme Court of Appeal (SCA) for special leave to appeal, and a reconsideration application to the President of that Court, Steyn sought leave to appeal the full bench decision of the High Court at the Constitutional Court.

Unfortunately, Steyn passed on and the executor of her deceased estate, being her attorney, applied to the Constitutional Court to be substituted in her place to proceed with the leave to appeal application in the same court.

In support of the substitution application, Steyn’s executor argued that Steyn’s right to fair administrative action vested in her deceased estate, in that, if the appeal is upheld, the monetary benefits that would be paid to the deceased estate would include the amount in medical claims due by Profmed under the policy.

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In determining the substitution application, a crucial consideration for the Constitutional Court was whether a party would be prejudiced by the substitution application and central to that, was whether a deceased’s review claim in terms of PAJA is transferrable to a deceased estate.

The Constitutional Court noted that an important factor for this consideration is the nature of the claim. It noted that if the Appeal Board’s decision was successfully reviewed, Profmed would have to honour their contractual commitments to Steyn and pay her out for previous medical claims submitted amounting to R400,000.

Steyn, had she been alive, would have received a financial benefit. Accordingly, it was this financial interest that was an important factor in considering whether her review claim in terms of PAJA could be transferred to the deceased estate.

The court noted that in South African law of succession, the estate of a deceased person does not include rights and liabilities of a purely personal nature attached to that person and that have terminated on his/her death.

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In the court’s view, had Steyn’s case been reinstated as a member of the medical scheme, the relief sought would undoubtedly been purely personal and would have terminated when she passed on. But this was not the case put before any of the courts.

Instead, the late Steyn’s claim was for judicial review and contractual relief, which in the court’s view are transmissible to a deceased estate. The Constitutional Court held that “[t]he cause of action for review must be transmissible where, as is the case [was in respect of Ms. Steyn], the estate has a financial interest in the outcome of the review and not only a mere interest in the right underlying the review.

The Court further considered whether the deceased’s estate had the requisite authority to bring a case of judicial review. According to the Court, the estate would only have such a capacity if it was found that the decision of a medical scheme or any other entity constituted administrative action as defined in section 1 of PAJA.

The Constitutional Court relied on its previous decision in Mkhize NO v Premier of the Province of KwaZulu-Natal and Others [2018], which held the following in determining if an action constitutes administrative action, and if found to constitute administrative action, whether such rights could be transmissible to a deceased estate:

...a review under PAJA determines, finally, whether an administrative action is lawful or not. It is an objective exercise, the outcome of which binds not only the litigating parties but everyone else. The review of administrative action attaches therefore not to the party bringing the review, but to the exercise of public power itself.

According to the judge, the Constitutional Court held that the decision of the Appeal Board met the definition of administrative action under PAJA and furthermore, that when the Appeal Board determines an appeal, it was exercising a public function. In the premises, the Constitutional Court held that the claim was transmissible to the deceased estate because “the decision of the Appeal Board constitutes administrative action and is not merely personal in nature”.

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Conclusion

The value of this decision by the Constitutional Court lies in its determination that for a deceased person’s right to be transferrable to their deceased estate - particularly their right of fair administrative action - requires an assessment of the kind of right sought to be transferred. If such right is a personal one attached to a person, the right to exercise any legal action to enforce that personal right ceases on the death of such person.

In this case, the right to exercise administrative action could be transferred because it was based on a financial interest due to an estate, and a review of administrative actions or decisions, attaches not to the person instituting the application for review of a decision, but on the exercise of the public power itself.

Based on this decision, it is apparent that the right to review of administrative actions would, in most instances, be transferrable to deceased estates.