Aged Care Standards and Accreditation Agency Limited v Kenna Investments Pty Ltd

Federal Court of Australia|2004-07-01|Before: Lockhart J, Branson J

introduction 1 The applicant seeks by this proceeding to challenge a decision of a Deputy President of the Administrative Appeals Tribunal ('the Tribunal') concerning the factual material that the Tribunal is entitled to take into account in reviewing a decision made by an officer of the applicant under s 3.24 of the Accreditation Grant Principles 1999 ('the Principles'). The Principles are made by the Minister under s 96‑1 of the Aged Care Act 1997 (Cth) ('the Aged Care Act'). The learned Deputy President decided that the Tribunal is not restricted in its consideration of a decision of the applicant under s 3.24 of the Principles to factual material pertaining to the time when the applicant's decision was made. 2 The applicant has expressly invoked the Court's jurisdiction under s 44 of the Administrative Appeals Tribunal Act 1975 (Cth) ('the AAT Act') and s 39B of the Judiciary Act 1903 (Cth) ('the Judiciary Act'). The first respondent challenges the competence of the purported appeal under s 44 of the AAT Act. It is not necessary for me to rule on this challenge. The first respondent accepts that this proceeding involves a matter arising under a law made by the Parliament within the meaning of s 39B(1A)(c) of the Judiciary Act. Further, in my view, the Court has jurisdiction to review the decision of the Tribunal under the Administrative Decisions (Judicial Review) Act 1977 (Cth) (see Commissioner of Taxation v McMahon (1997) 79 FCR 127 esp per Lockhart J at 129) even though the applicant has not purported to invoke that jurisdiction. 3 It is appropriate to record that, following my raising the issue of the jurisdiction of the Tribunal to review the decision of the applicant, the applicant and the first respondent filed a joint submission in support of the Tribunal's jurisdiction. In the absence of a contradictor I consider it inappropriate to do more than note that it may be open to be argued that the Aged Care Act does not disclose an intention that the Principles may confer jurisdiction on the Tribunal. As the jurisdiction of this Court extends to reviewing purported decisions of the Tribunal (Australian Broadcasting Commission Staff Association v Bonner (1984) 2 FCR 561; Seventh Mingcourt Pty Ltd v Lawrence (1996) 64 FCR 367 at 374 - 375), I am able to proceed on the assumption that, as the applicant and the first respondent contend, the Tribunal has jurisdiction to review the applicant's decision. I respectfully suggest, however, that the Tribunal may wish to satisfy itself that it has jurisdiction to review the decision of the applicant before proceeding further. 4 The Chief Justice directed that the proceeding be heard by a single judge (see s 44(3) of the AAT Act). The second respondent has filed a submitting appearance. 5 For the reasons set out below I have concluded that the decision of the learned Deputy President should be set aside and the matter remitted to the Tribunal. The purpose of the remittal is to enable the Tribunal, should it be satisfied that it has jurisdiction to review the decision of the applicant, to review the decision on the basis that the Tribunal is restricted to consideration of factual material pertaining to the time within which that decision was required to be made.

Factual background 6 The circumstances that gave rise to the application for review made to the Tribunal are summarised in the written reasons for decision of the Deputy President as follows: '(a) The Applicant is the proprietor of Eddystone Nursing Home ("the Nursing Home"), a facility, which provides care for 71 high care residents. (b) On 21 January 2003, the Applicant made an application for accreditation for residential aged care services in respect of the Nursing Home. (c) A site audit of the Nursing Home was conducted on 4 and 5 March 2003. The Nursing Home was found to be compliant with all of the Accreditation Standards and the assessment team made a recommendation for accreditation. (d) On 16 May 2003, the Accreditation Coordinator NSW/ACT decided to accredit the Nursing Home for a period of three years. The effective date of accreditation was 21 July 2003. (e) By a letter dated 4 August 2003, the Manager of the Aged Care and Planning Branch, Department of Health, notified the Aged Care Standards and Accreditation Agency that "a number of concerns were highlighted during a detailed analysis of two anonymous information calls lodged with the Department's Aged Care Complaints Resolution Scheme on 18 July 2003, including wound management, infection control, documentation systems and behaviour management. Areas of non‑compliance with the Accreditation Standards as outlined in Schedule 2 of the Quality of Care Principles 1997 ("Quality of Care Principles") may be indicated". (f) An Assessment Team conducted a review audit of the Nursing Home from 12 August 2003 to 15 August 2003 inclusive. On 21 August 2003, the assessment team reported compliance with 38 expected outcomes of the Accreditation Standards, and non-compliance with six expected outcomes. (g) On 29 August 2003, the Applicant responded to the report, noting inter alia that the majority of the issues raised in the information calls were not confirmed during the review audit, that the content of the report did not correspond with statements made at the assessment team's exit interview and that no opportunity was afforded to the Applicant to deal with a number of matters raised in the report. (h) On 4 September 2003, the Agency notified the Applicant that a decision had been made to vary the accreditation period, that the accreditation period would now expire on 4 September 2004 and that an application for accreditation for a further period must be lodged no later than 13 March 2004. (i) On 16 September 2003, the Applicant requested a reconsideration of the Agency's decision. (j) On 7 October 2003, the Manager, Operations Services of the Agency came to a different view from the assessment team which conducted the review audit and determined that the Nursing Home was non‑compliant with only four expected outcomes of the Accreditation Standards. (k) The manager, Operations Services of the Agency nonetheless decided not to vary the period of accreditation, which will expire on 4 September 2004. (l) On 14 October 2003, the Applicant applied to the Tribunal for review of the Manager's decision.' 7 At the commencement of the hearing before the Tribunal an issue arose as to the extent of the evidence that the Tribunal was able to take into account. Kenna submitted to the Tribunal that the Tribunal was able to take into account evidence concerning events up to the date of its decision and accordingly was not precluded from taking into account whether the deficiencies which were identified in the review audit had been rectified in whole or in part. The applicant submitted that the foreshadowed material would also be irrelevant to the Tribunal's review of its decision. It contended that the review by the Tribunal was limited by reference to the point of time when the decision to vary the accreditation was made, that is 7 October 2003. 8 The Tribunal held that it was not restricted in its consideration of the decision of the applicant to factual material pertaining to the time when that decision was made.

issues to be determined 9 The issue to be determined in this proceeding is the point in time to which the Tribunal is to address itself in undertaking merits review of a decision made under s 3.24 of the Principles. The applicant contends that the Tribunal must consider, and must only consider, whether, as at 7 October 2003, the accreditation period should have been varied in light of the evidence of non-compliance with the Accreditation Standards. Kenna contends that, in order to determine the correct or preferable decision in all of the circumstances, the Tribunal must be permitted to know whether the findings of the primary decision maker continue to reflect the true position.

statutory context 10 The Aged Care Act establishes a scheme governing the provision of residential aged care services. It provides for the Commonwealth to give financial support through the payment of subsidies for the provision of aged care and through the provision of grants for other matters connected with the provision of aged care. The objects of the Aged Care Act are set out in s 2‑1 of the Act. They may be summarised as the provision of funding of aged care to promote high quality care that is responsive to community needs. 11 In Saitta Pty Ltd v Commonwealth [2001] FCA 817 at [36] Gray J observed: '… The argument put on behalf of the applicants seemed to assume that the object of the Aged Care Act is to confer on approved providers of aged care the right to conduct profitable businesses. An examination of the Aged Care Act dispels such a notion very quickly. The objects set out in 2-1 mention providers only in relation to their accountability. It is plain that the Aged Care Act is directed to the benefit of those receiving and requiring care. The use of private businesses to provide care is incidental to the purpose of the legislation and subordinate to it. …' 12 The payment of subsidies under the Aged Care Act depends upon a provider of aged care being an 'approved provider' (see s 3-2). The Dictionary contained in Schedule 1 of the Aged Care Act provides relevantly that 'approved provider means a person or body in respect of which an approval under Part 2.1 is in force'. Part 2.1 of the Aged Care Act is concerned with the approval of providers. The Secretary of the Department of Health and Ageing must approve a person as a provider if that person meets the criteria set out in subs 8-1(1) of the Aged Care Act. 13 The responsibilities of approved providers in relation to the quality of care that they provide to residents in aged care facilities are set out in Chapter 4 (s 53-1 to s 68-6) of the Aged Care Act. Section 54-1 provides: '(1) The responsibilities of an approved provider in relation to the quality of the aged care that the approved provider provides are as follows: (a) to provide such care and services as are specified in the Quality of Care Principles in respect of aged care of the type in question; (b) to maintain an adequate number of appropriately skilled staff to ensure that the care needs of care recipients are met; (c) to provide care and services of a quality that is consistent with any rights and responsibilities of care recipients that are specified in the User Rights Principles for the purposes of paragraph 56-1(l), 56-2(i) or 56-3(j); (d) if the care is provided through a residential care service after the accreditation day - to comply with the Accreditation Standards made under section 54-2; (e) if the care is provided through a residential care service before the accreditation day - to comply with the Residential Care Standards made under section 54-3; (f) if the care is provided through a community care service - to comply with the Community Care Standards made under section 54-4; (g) if the care is provided through a flexible care service - to comply with the Flexible Care Standards (if any), made under section 54-5, that apply to a flexible care service of that kind; (h) such other responsibilities as are specified in the Quality of Care Principles. (2) The responsibilities under subsection (1) apply in relation to matters concerning a person to whom the approved provider provides, or is to provide, care through an aged care service only if: (a) subsidy is payable under Chapter 3 for the provision of the care to the person; or (b) the person is approved under Part 2.3 as a recipient of the type of aged care provided through the service.' 14 The Standards and Principles referred to in s 54-1 are the Standards and Principles made by the Minister under s 96-1 of the Aged Care Act. Relevantly the Accreditation Standards referred to in s 54-1 are standards for quality of care and quality of life for the provision of residential care. Section 54-2 authorises the Quality of Care Principles that may be made by the Minister under s 96-1 to set out Accreditation Standards. Accreditation Standards are found in Schedule 2 of the Quality of Care Principles 1997 made under s 96-1. 15 Chapter 5 of the Aged Care Act is concerned with Grants. Part 5.4 is specifically concerned with accreditation grants. The applicant is paid an accreditation grant under Part 5.4 for the purpose of accrediting residential care services in accordance with the Principles. The applicant thus is the 'accreditation body' within the meaning of the Aged Care Act and the Principles. 16 The functions of the applicant under the Principles include: '(a) managing the accreditation process using the Accreditation Standards; and (b) promoting high quality care, and helping industry to improve service quality, by identifying best practices and providing information, education and training to industry; and (c) assessing, and strategically managing, services working towards accreditation; and (d) liaising with the Department of Health and Aged Care about services that do not comply with the standards applicable to them (the Residential Care Standards or the Accreditation Standards, as appropriate).' (see note before Part 1 of the Principles) 17 The Principles set out in detail the accreditation process including the procedures to be followed for accreditation and the duration of an accreditation period. 18 Section 3.19 of the Principles provide that an accredited provider must give the applicant a plan for continuous improvement of the residential care service for which the provider holds a certificate of accreditation. Section 3.20 requires the applicant to carry out regular supervision of an accredited residential care service to ensure compliance with the Accreditation Standards and other responsibilities under the Aged Care Act. 19 If the applicant believes, on reasonable grounds, that an accredited residential care service may not have complied with the Accreditation Standards or its other responsibilities under the Aged Care Act the applicant may arrange for a review audit (subs 3.21(1)). Section 3.22 governs the procedure for review audits. The conduct of a review audit must be undertaken in compliance with the Principles, including s 3.22, and within a timetable specified by the Principles. 20 Section 3.22, and the notes to the section, relevantly provide: 'Procedure for review audit of accredited residential care services (1) In carrying out the review audit, the assessment team must: (a) consist of at least 2 quality assessors who meet the requirements of subsections 2.45 (1), (2), (3) and (4); and (b) act consistently with any provisions of the Accountability Principles applying to the audit; and (c) assess the quality of care provided by the residential care service against the Accreditation Standards; and (d) must consider any comments made by the Secretary on the quality of care; and (e) must consider any comments made by persons receiving care, or who have received care, through the service (or their representatives) on the quality of care; and (f) consider any submissions made by the accredited provider on behalf of the service; and (g) carry out the review audit on the service's premises. Note 1 Subsections 2.45 (1), (2), (3) and (4)describe the criteria that a quality assessor must meet to be included in an assessment team. However, an assessment team created to undertake a review audit will not include an assessor nominated by the service: see subs 2.43 (2). Also, subs 2.45 (5), (6) and (7) do not apply to an assessment team created for a review audit. Note 2 The Accountability Principles will set out various aspects of the access that a person may have to a residential care service in carrying out functions under these Principles. (2) In carrying out the review audit, the assessment team must not disclose or communicate to the service, or to key personnel of the service, information identifying persons, mentioned in paragraph (1) (e), who have given information to the team. (3) The team must also: (a) meet with the approved provider, or key personnel of the approved provider, at the end of the review audit to discuss the assessment; and (b) at this meeting, give the approved provider or key personnel a written report of matters that the team believes are the major findings of the review audit. (4) The approved provider or key personnel may, within 7 days of the meeting mentioned in paragraph (3) (a), give the accreditation body and the assessment team a written response to the report given for paragraph (3) (b). (5) The team must, within 7 days after completing the review audit, give a written report about the review audit (the review audit report) to the accreditation body and the accredited provider. ….' 21 Section 2.45 of the Principles provides that each member of an assessment team must be a registered quality assessor. The registration of quality assessors is governed by s 8.2 of the Principles. The requirements for initial registration and for continued inclusion on the register are quite onerous. They include relevant experience, qualifications and training. 22 Section 3.23 of the Principles is concerned with the content of a review audit report. The section provides: (1) Thereview audit report mentioned in section 3.22must include: (a) a recommendation: (i) not to revoke the residential care service's accreditation; or (ii) to revoke the service's accreditation; and (b) the reasons for the recommendation. (2) If the assessment team gives a recommendation to revoke the service's accreditation, the report must also include a recommendation about the matters in respect of which improvements would be necessary to justify a recommendation to accredit the service if it were to apply for accreditation in the future. (3) If the assessment team gives a recommendation not to revoke the accreditation of the service, the report must include recommendations about: (a) whether the period of accreditation should be varied; and (b) further support contacts with the service.' 23 Section 3.24 of the Principles is the provision under which the decision which the Tribunal is to review was made. The sections relevantly provides: '(1) The accreditation body may decide: (a) to vary the period of accreditation; or (b) to revoke the accreditation of the service; or (c) not to revoke the accreditation. (2) In making its decision, the accreditation body must take into account: (a) the review audit report; and (b) any information given to the accreditation body by persons receiving care, or who have received care, through the residential care service (or their representatives); and (c) any information given to the accreditation body by the Secretary; and (d) information (if any) received from the approved provider in response to the report of findings of the review audit mentioned in section 3.22. … (4) If the accreditation body decides to vary the period of accreditation, the accreditation body must give the accredited provider written reasons for the variation.'

consideration 24 It is accepted by the applicant that the Tribunal is empowered to exercise all of the powers and discretions that are conferred by any enactment on the person who made the decision the subject of the Tribunal's review (s 43(1)) of the AAT Act). It is also accepted by the applicant that the Tribunal is required to determine whether the decision under review was the correct or preferable decision having regard to the material before the Tribunal (Drake v Minister for Immigration and Ethnic Affairs (1979) 24 ALR 577 per Bowen CJ and Deane J at 589 and Smithers J at 607). The dispute between the applicant and the first respondent concerns the material to which the Tribunal may have regard in reviewing the decision of the applicant. 25 The material to which the Tribunal may have regard is material that is relevant to the determination that the Tribunal is required to make. What material is relevant to that determination depends upon the nature of the decision under review; the Tribunal is obliged to address the same question as the primary decision maker (Freeman v Secretary, Department of Social Security (1988) 19 FCR 342 at 345 per Davies J; The Hospital Benefit Fund of Western Australia Inc v Minister for Health, Housing and Community Services (1992) 39 FCR 225 at 234 (FC); Commissioner of Taxation v McMahon per Lockhart J at 133-134, Beaumont J at 140-141 and Emmett J at 150). 26 In my view, limited assistance is obtained from seeking to categorise a decision under s 3.24 of the Principles as either a cancellation or a revocation decision, on the one hand, or an approval or entitlement decision on the other. Categorisation of the decision is helpful only to the extent that it assists in the identification of the issues that the accrediting authority was required to address for the purpose of making its decision under s 3.24. 27 An important aspect of a decision made under s 3.24 of the Principles is that it is a decision that must be made within fourteen days of the accreditation body receiving the review audit report. I leave aside for present purposes the issue of possible reconsideration by the accreditation body of its decision (see [33] below). The obligation to make the decision within that time frame follows from the obligation, imposed on the accreditation body by subs 3.24(3), to tell the approved provider in writing about the decision within fourteen days after receiving the review audit report. The obligation to tell the approved provider 'about' the decision must, in my view, include at least an obligation to tell the approved provider the precise terms of the decision. 28 A further important aspect of a decision made under s 3.24 of the Principles is that it is a decision that can only be made following a review audit. The accreditation body has no general power under s 3.24 to revoke or vary a period of accreditation. Its power to revoke or vary a period of accreditation under the section is a power to do so following consideration of, amongst other things, a written report given by the expert assessment team about the review audit. Significantly, the review audit report must include a recommendation of the assessment team as to the appropriate outcome of the review audit. That is, a recommendation as to the decision to be made under s 3.24. 29 The function that the Tribunal undertakes on review of a decision under s 3.24 is not, in my respectful opinion, part of an administrative continuum in the sense that the function undertaken by the Tribunal when reviewing a decision that a person does not have an ongoing entitlement to a pension or benefit may be part of an administrative continuum (see Freeman v Secretary, Department of Social Security at 345). A decision under s 3.24 may only be made in the circumstances identified in Part 3 of Division 3 of the Principles. These circumstances include that the accreditation body, believing on reasonable grounds that there may not be compliance with standards or responsibilities, has arranged a review audit and has received the review audit report. As is mentioned above, the decision of the accreditation body must be made within fourteen days of the end of the above process. 30 The role of the Tribunal when reviewing a decision made under s 3.24 of the Principles is plainly to review the decision on the merits. In doing so it may, as the applicant concedes, receive relevant material that was not before the applicant when it made the decision under review. However, to adopt a phrase used by Lockhart J in Commissioner of Taxation v McMahon at 133, its task is to 'go over again' the process of making the decision that the applicant was required to make. The applicant was required to make its decision in a timeframe which illustrates the central importance which the Principles accord to the review audit report. The importance that the Principles accord to the review audit report is also revealed by the reference in par 3.24(2)(d) to information, if any, received from the approved provider in response to the report of findings of the review audit. In my view, the Tribunal would be undertaking a quite different process from that which the Principles required the accreditation body to undertake were it to review a decision made under s 3.24 by reference to factual material remote in time from the review audit report. In particular, I consider that on review of a decision made under s 3.24 it is not open to the approved provider to seek to undermine the significance of the review audit report, and the recommendations included in it, by calling evidence of improvements in its practice and procedure implemented after the date of the decision and in response to the review audit report and recommendations. 31 I conclude that the Tribunal would not be addressing the same questions as the applicant was required to address if it were to determine whether, at the time of the Tribunal's decision, the decision of the applicant under s 3.24 of the Principles can be seen to be the correct or preferable decision. This is not to say that the Tribunal cannot receive evidence of facts that occurred after the date of the decision under review. However, to be relevant to the Tribunal's decision, that evidence must, in my view, bear on the merits of the decision as at the time that it was required to be made. 32 In this case the original decision of the applicant was in fact made on the last possible day, namely 4 September 2003. On 16 September 2003 the first respondent requested the applicant to reconsider its decision. The applicant acceded to the request and its decision on reconsideration was made on 7 October 2003. I did not hear argument from the parties on whether either s 3.24 or s 3.25 of the Principles authorised reconsideration by the applicant of its decision of 4 September 2003. I therefore express no view on this issue or on any related issue that might involve reconsideration of the date of the operative decision of the applicant. 33 The appropriate orders in my view are: 1. That the decision of the Tribunal that it is not restricted in its consideration of the variation decision to the factual material pertaining to the time when the reviewable decision was made be set aside. 2. The matter be remitted to the Tribunal for the purpose of enabling it, on the assumption that it has jurisdiction so to do, to determine the review on the basis that the Tribunal is restricted to consideration of factual material pertaining to the time within which the variation decision was required to be made. I certify that the preceding thirty-three (33) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Branson.

Associate: Dated: 1 July 2004 Counsel for the Applicant: N Williams SC and K Eastman

Solicitor for the First Respondent: Taylor & Scott

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