Pharmaceutical Society of South Africa and Others v Tshabalala-Msimang and Another NNO; New Clicks South Africa (Pty) Ltd v Minister of Health and Another

• Jurisdiction: South Africa
• Judge: Harms JA, Navsa JA, Mthiyane JA, Brand JA and Cloete JA
• Judgment Date: 20 December 2004
• Counsel: W Trengove SC (with him A Cockrell and M du Plessis) for the applicant in the Pharmaceutical Society matter. V Maleka SC (with him V Soni, M Sello and S Yacoob) for the respondents in the Pharmaceutical Society matter. J J Gauntlett SC (with him A E Bham) for the applicant in the New Clicks matter. M T K Moerane SC (with him P Coppin and B Vally) for the respondents in the New Clicks matter. D I Berger SC (with him F Ismael) for the amicus curiae.
• Docket Number: 542/04 and 543/04
• Court: Supreme Court of Appeal

Harms JA:

Introduction B

[1] The applicants are applying for leave to appeal. In issue is the validity of the 'Regulations relating to a Transparent Pricing System for Medicines and Scheduled Substances'. [1] They were promulgated on 30 April 2004 by the Minister of Health in terms of s 22G of the Medicines and Related Substances Act 101 of 1965 (the Medicines Act). The section permits the Minister to make C regulations on the recommendation of a pricing committee established by the section. The regulations may, essentially, provide for a transparent pricing system for manufacturers of medicines and may prescribe a dispensing fee. Manufacturers are obliged to charge the same price to all; discounts are prohibited; manufacturers must publish D their 'single exit price'; no one in the supply chain may charge more than the single exit price; pharmacists and other licensed health professionals may, however, add the prescribed 'appropriate dispensing fee', but no more. The regulations under attack provide for a pricing system that defines and controls the single exit price for E manufacturers and importers and for a dispensing fee, which, for pharmacists amounts to either 16% of the exit price (if it is less than R100) or R16 (if more than R100) without a medical prescription. If there is a prescription the figures are 26% (if it is less than R100) and R26 (if more than R100, whether R100 or R1 000). The major issues are whether these fees are 'appropriate' and whether the regulation of the single exit price is legal. F

[2] There are two applications. In one the first applicant is the Pharmaceutical Society of South Africa (PSSA), joined by six other entities that own pharmacies. The other is by New Clicks SA (Pty) Ltd, the owner of 86 pharmacies. The respondents in both applications are, first, the Minister of Health and second, Prof D McIntyre, cited G in the Court below under Uniform Rule 53 in her capacity as chairperson of the pricing committee. At the appeal stage the Treatment Action Campaign joined the proceedings as amicus curiae.

History of the proceedings H

[3] The applicants, in separate review applications, applied in the Cape High Court for the setting aside of the regulations. Due to the urgency of the matters, the Court granted interim relief by agreement on 1 June. [2] In terms of the order the regulations were suspended pending the final determination of the reviews and the parties placed on terms for filing papers. At the I behest of the respondents early hearing dates were

Harms JA

allocated, namely 17 and 18 June. The matters were heard by a Full Bench as a A Court of first instance. Judgment was delivered on 27 August [*] and the applications were dismissed (per Yekiso J, Hlophe JP concurring; Traverso DJP dissenting).Harms JA

[4] Alleging that the dismissal of their review applications (which brought the suspension of the regulations to an end) did not remove the urgency, the applicants immediately sought leave to appeal B from the Court below by filing their applications on the next Court day, 30 August. These notices did not raise any issues not covered by the two judgments. The applicants then requested an early hearing date but the Court ruled that the date had to suit respondents' counsel. The applications were eventually heard on 20 September C but instead of making an ex tempore order, as is the practice in matters of this kind, the Court reserved judgment.

[5] Some five weeks later, on 20 October, the applicants in the PSSA application wrote to the Registrar of the Court below, with a request to establish whether the Judge President, who had D intimated at the hearing that he would write the judgment, would indicate when a ruling might be expected (even if reasons were to follow). Neither the Registrar nor the Judge President responded. The applicants thereafter decided to file the present applications with this Court. They intended as a gesture of courtesy to meet with the E Judge President to inform him in advance but he was unable - for unknown reasons - to meet them. On 11 November the present applications were filed.

[6] The next day the Judge President became available for the courtesy call and, according to the State Attorney, he told those present that the second draft of the judgment was in the process of F being typed. He enquired of them whether, in the light of the applications, he was expected to stop the process and dispense with the need to finalise the judgment. No one responded and he then said that he would continue to finalise the judgment. Once again, no indication of when judgment was to be delivered was given and no explanation for G the delay provided. If there were compelling reasons for the delay, one would have expected some explanation. [3]

[7] In the mean time and pursuant to the filing of the present applications I had invited the parties to a conference in Chambers to H enable me under delegated powers to issue the necessary directions in terms of SCA Rule 11 as to the manner in which the applications were to be dealt with. At the request of the respondents the meeting took place on 17 November, two days later than intended, and the ruling was issued early the next morning after consultation with the head of Court and the members of the panel to whom the applications were I allocated. The

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ruling was in the customary form: [4] The hearing of the applications was A consolidated, the applications were referred for oral argument on 30 November and 1 December in terms of s 21(3)(c)(ii) of the Supreme Court Act 59 of 1959, the parties were to be prepared (if called upon to do so) to address the Court on the merits, and the respondents were to file any affidavits and heads of argument if and when convenient. [5] B

[8] On 29 November, the eve of the hearing before this Court, the Judge President gave notice to the parties that judgment would be delivered on 3 December. In the event it was. Hlophe JP (Yekiso J concurring) refused leave whilst Traverso DJP would have done otherwise. Why it took three weeks to type or check a second draft of a judgment that ultimately ran to 13 well-spaced typed pages we have not C been told. As this Court once said: [6]

'Much more than a matter of mere courtesy is involved. By such conduct the administration of justice is hampered, and may be seriously hampered, by an arbiter of justice himself, whose responsibility it is to render it effective and not add judicial remissness to its already irksome delays.' D

[9] Three issues arise from the present applications: (a) should they be dealt with as a matter of urgency; (b) were the applicants entitled to approach this Court for leave to appeal where the Court of first instance had not yet ruled on their applications (the so-called jurisdiction point) and (c) if so, do the applicants have reasonable prospects of success on appeal? The respondents raised a further procedural E issue, namely whether the first two issues should be separated from the third, insisting that this Court should deal with the application piecemeal, and not as a whole.

Urgency F

[10] In the Court below (as mentioned) the case was dealt with by agreement between the parties and by the Court as one of urgency until judgment on 27 August. Nothing has since changed except that the respondents were successful. The only point made by the respondents of any consequence is that the matter is no longer urgent; had it been urgent, the applicants would have applied for leave G to appeal to the Constitutional Court; instead they applied for leave to this Court. [7] One gained the impression that the respondents believe (a view shared by the Court below as will appear later) that since there are constitutional issues only the Constitutional Court should deal with the matter. The choice of forum H was that of the applicants alone. If properly engaged, this Court has a constitutional duty to deal with a matter and deal with it expeditiously. This Court does not have the power to divert cases to the I

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Constitutional Court. In any event, and this the applicants allege is their dilemma, the Constitutional Court is entitled to refuse to A hear appeals directly and may require that they first be heard by this Court. Therefore, they say, it was prudent for them to take the present route.

[11] Although not raised with reference to any facts in the affidavits opposing the applications before us, respondents' counsel objected to the present proceedings and submitted that they B were procedurally unfair because of the limited time allowed to enable them to prepare on the merits; eight Court days were allegedly insufficient. [8]

[12] In the Court below the respondents were able to deal with both cases within exceptionally short periods, most of their own choosing. They prepared lengthy answering affidavits by 31 May C (amplified by 9 June), taking into account that the applications were only served on 24 and 27 May, and were in Court on 1 June for the preliminary hearing. And they were ready to argue on 17 June, three ordinary days after the replying and eight ordinary days after the answering affidavits had been filed. They were also in a D position to file heads of argument, so full that the Court below was able to dispose of argument by four sets of counsel within a day and a half, despite the fact that the combined record ran to about 4 000 pages. E

[13] The respondents' submissions in this regard, sadly, were but a smokescreen. Already at the meeting on 17 November with me, the respondents' counsel insisted emphatically on a separation of issues and stated that their clients would not instruct counsel to...