Barnard & others v The Registrar of Medical Schemes

The appellants were trustees of Medshield Medical Scheme, an open medical scheme registered under the Medical Schemes Act 131 of 1998. The Registrar of Medical Schemes applied to the North Gauteng High Court, ex parte and urgently, to place the scheme under provisional curatorship, citing material irregularities in governance and administration. These included unlawful broker management and marketing agreements, excessive and disguised payments to brokers, non-compliance with statutory directives, conflicted distribution contracts (notably with Sapling Trade and Invest 41 (Pty) Ltd), compromised trustee elections via proxy voting linked to Sapling, and failures to adhere to scheme rules and regulatory inspections. The High Court confirmed the provisional order and placed the scheme under final curatorship. The trustees appealed to the Supreme Court of Appeal.

The appeal was dismissed with costs, including the costs of two counsel. The final order placing Medshield Medical Scheme under curatorship was upheld.

The case is significant for clarifying the statutory tests for placing a medical scheme under curatorship and affirming the wide regulatory powers of the Registrar of Medical Schemes to protect beneficiaries. It underscores that sound financial condition alone does not preclude curatorship where governance failures and material irregularities exist, and it reinforces the importance of compliance with regulatory oversight in the medical schemes sector.