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Compcare Wellness Medical Scheme v Registrar of Medical Schemes & others - (17 Aug 2020)

Registrar has no discretion to allow a change of name, if it was likely to mislead the public


Present appeal is filed by Compcare Wellness Medical Scheme (Compcare) against the Registrar of Medical Schemes (the Registrar) and the Council of Medical Schemes (the Council). Compcare had applied to the Registrar for approval of a change of its name from Compcare to Universal Medical Scheme. It was administered by Universal Health Care Administrators, a part of the Universal group of companies, and wanted to take advantage of the Universal brand, which it considered to be stronger than its own brand. The Registrar, in terms of Section 23(1)(c) of the Medical Schemes Act 31 of 1998 (Act) refused the application because he considered the new name to be likely to mislead the public.

Compcare appealed successfully to the Appeal Board created by Section 50 of the Act. The Appeal Board found that, the new name was indeed likely to mislead the public but imposed conditions proposed by Compcare to mitigate the misleading effect. It ordered the Registrar to give effect to the name-change subject to the conditions. The Registrar and the Council took this decision on review. The High Court upheld their application and set aside the Appeal Board’s decision.

The two major ‘pathways’ to the review of administrative-type actions are Section 6 of the Promotion of Administrative Justice Act 3 of 2000 (the PAJA) and the principle of legality. The PAJA applies generally to the review of administrative action as that term is defined in it. The principle of legality applies, when an exercise of public power does not fall within the PAJA’s definition of administrative action. It is necessary to determine which of these pathways to review applies because that decision determines the basis for the Court’s review jurisdiction. That decision should not be avoided.

Section 33(1) of the Constitution, a provision which gives effect to the founding value of the rule of law, guarantees for everyone the rights to lawful, reasonable and procedurally fair administrative action. Section 6(2)(a)(i) of the PAJA is one of a number of provisions that give effect to the right to lawful administrative action. It provides that, a Court may review and set aside an administrative action, if it was taken by an administrator who ‘was not authorized to do so by the empowering provision’. This is the principal ground of review that is implicated in present case.

The Appeal Board bases its order on the premise that, the new name was likely to mislead the public, and so required conditions to be added to minimize that consequence. Section 23(1) of the Act does not give Registrar discretion to allow a change of name if it was likely to mislead the public. He was bound to refuse it. And the Section did not empower him to impose conditions. As the Registrar had no power to approve Compcare’s change of name, the Appeal Board exceeded its powers by purporting to order the Registrar to do so. High Court was right in setting aside the Appeal Board’s decision. Appeal dismissed.


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