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[2023] FCA 129
Federal Court of Australia
2023-02-24
Dr J, Burley J
Original judgment source is linked above.
Division: General Division
Registry: New South Wales
National Practice Area: Administrative and Constitutional Law and Human Rights
Date of hearing: 18 October 2022
Solicitor for the Applicant: Unsworth Legal Pty Ltd
Counsel for the First Respondent: The first respondent filed a submitting notice, save as to costs
Counsel for the Second Respondent: The second respondent filed a submitting notice, save as to costs
Counsel for the Third Respondent: Ms T Wong SC with Ms C Ernst
AND: DIRECTOR OF PROFESSIONAL SERVICES REVIEW First Respondent
PROFESSIONAL SERVICES REVIEW COMMITTEE NO 1495 Second Respondent
COMMONWEALTH OF AUSTRALIA Third Respondent
order made by: BURLEY J DATE OF ORDER: 24 February 2023
REASONS FOR JUDGMENT 1 INTRODUCTION [1] 2 THE RELEVANT LEGISLATION [5] 3 BACKGROUND [18] 4 THE APPLICATION FOR JUDICIAL REVIEW [62] 5 GROUND 1 - DENIAL OF PROCEDURAL FAIRNESS [64] 5.1 Introduction [64] 5.2 Opportunity to discuss entering into a s 92 agreement [68] 5.2.1 The submissions [68] 5.2.2 Consideration [70] 5.3 Failure to disclose adverse comments and apprehended bias [83] 5.3.1 The submissions [83] 5.3.2 Consideration [94] 6 GROUND 2 - LEGAL UNREASONABLENESS [116] 6.1 The applicant's submissions [116] 6.2 Consideration [119] 7 DISPOSITION [126]
5.1 Introduction 64 This ground is pleaded as a denied procedural fairness under both s 39B of the Judiciary Act or ss 5(1)(a) and/or s 6(1)(a) of the ADJR Act. However, during the course of the hearing, Dr Lucy of counsel, who appeared for the applicant, abandoned reliance on the Judiciary Act basis for this ground. 65 Section 5(1)(a) of the ADJR Act provides: (1) A person who is aggrieved by a decision to which this Act applies that is made after the commencement of this Act may apply to the Federal Court … for an order of review in respect of the decision on any one or more of the following grounds: (a) That a breach of the rules of natural justice occurred in connection with the making of the decision; … 66 Section 6(1)(a) provides: (1) Where a person has engaged, is engaging, or proposes to engage, in conduct for the purpose of making a decision to which this Act applies, a person who is aggrieved by the conduct may apply to the Federal Court or the Federal Circuit and Family Court of Australia (Division 2) for an order of review in respect of the conduct on any one or more of the following grounds: (a) that a breach of the rules of natural justice has occurred, is occurring, or is likely to occur, in connection with the conduct; 67 The applicant contends that the Director denied him procedural fairness or natural justice when determining what action to take under s 89C(2) of the Act and determining to set up a committee and make a referral to it. The ground may be divided into two parts by reference to the particulars supplied. In the first, the applicant contends that he was denied an opportunity to be heard in relation to the decision of the Director to appoint the Committee, rather than negotiating the content of an agreement under s 92 of the Act (particulars (a) and (b)). In the second the applicant contends that he was denied procedural fairness on the basis that the Director failed to identify and disclose to him all adverse comments made by the Consultant and providing him with a reasonable opportunity to make submissions about them (particular (c)) and in so doing acted in breach of the hearing rule or alternatively gave rise to a reasonable apprehension of bias. I address each in turn below.
5.2 Opportunity to discuss entering into a s 92 agreement
5.2.1 The submissions 68 The applicant submits that the Director had a duty to consider whether to exercise the discretion to enter a s 92 agreement in an appropriate case and that s 89C(2) required the Director to choose between three options, being to decide to take no further action, enter into a s 92 agreement, or make a referral to a committee under s 93. He submits that she must give proper, genuine and realistic consideration to each option and that the Director's obligation under s 89C is to provide the practitioner with a reasonable opportunity to make a submission. In the current case, the Director invited the applicant to make written submissions about the action, but, in circumstances where the applicant in his written submissions requested the Director to consider entering into a s 92 agreement, he submits she did not afford him a reasonable opportunity to be heard because "it is the very nature of an agreement that the Director and the practitioner discuss and agree on its terms". The applicant submits that it may be inferred that the Director intended to provide the applicant with an opportunity to discuss entry into a s 92 agreement when she initially indicated that she would like to organise a telephone conference with him to discuss the next steps, but on 14 September 2021 withdrew that offer. 69 The Commonwealth submits that the Act prescribes the particular junctures at which the Director is required to give notice of certain matters and invite submissions. Those requirements were met. It submits that the Court has repeatedly recognised that there is no obligation on the Director to offer to enter into an agreement under s 92, citing Dimian v Health Insurance Commission [2005] FCAFC 200 at [33] (Lander J, Black CJ and Wilcox J agreeing) and Oreb v Willcock [2005] FCAFC 196; 146 FCR 237 at [126] (Lander J, Black CJ and Wilcox J agreeing). Nor, it submits, is the Director required to give reasons for entering an agreement, citing Tisdall v Kelly [2005] FCA 365; 219 ALR 152 at [89] (Gray J), or to provide reasons "at every decision-making point in Division 3A", citing Yoong v The Chief Executive of Medicare [2021] FCA 701 at [90] (Rangiah J). Furthermore, the Commonwealth submits that the scope of what procedural fairness requires cannot have been enlarged by the equivocal statements by officers of the Professional Services Review Agency that a teleconference would be organised with the Director. Finally, the Commonwealth submits that the applicant has not established that he suffered any practical injustice by not having a second opportunity to meet with the Director, citing Huddleston v Aboriginal Land Commissioner [2010] FCAFC 66; 184 FCR 551 at [30] (Keane CJ, Spender and Barker JJ) and Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Lam [2003] HCA 6; 214 CLR 1 at [35] (Gleeson CJ) and [105] (McHugh and Gummow JJ).
5.2.2 Consideration 70 In my view this aspect of ground 1 has not been made out. 71 I agree with the submission advanced by the Commonwealth that the Act prescribes particular points at which the Director is required to give notice of certain matters and submissions from a person under review. There is no suggestion that those requirements were not met. The applicant was on 23 February 2021 notified of the Director's decision to conduct a review. By letter dated 29 June 2021, the Director notified the applicant of the process to be followed, which was foreshadowed to include a meeting with the Director, an opportunity for the applicant to make written submissions and consideration of those written submissions. The Director informed the applicant that, after that, she would "make a decision to either take no further action, seek to enter into an agreement with you or refer the case to a PSR Committee". This accords with the contemplated steps in s 89C. The Director duly met with the applicant on 14 July 2021 and in her letter of 29 July 2021 she invited the applicant to make written submissions, indicating that she would consider them and do one or other of the three things prescribed in s 89C(2) of the Act. 72 It was clear that following the receipt of the submissions the Director would make a decision under s 89C(2). 73 In the applicant's written submissions of 6 September 2021 he said, "… he believes this is a matter which may be capable of resolution by entering into an Agreement pursuant to section 92 of the [Act]". 74 The applicant contends that, by not meeting with him after this suggestion, the Director failed to afford him procedural fairness, because it is the nature of an agreement that the Director and practitioner discuss and agree on its terms. However, as the Court noted in Dimian at [33], the Director "is not obliged to offer to enter into a s 92 agreement with a medical practitioner whose conduct is under review", see also Oreb at [126]. Section 92 permits but does not require the Director to do so, and only permits this if the medical practitioner acknowledges that his or her conduct during the referral period constituted engaging in inappropriate practice. 75 In the present case the applicant suggested that the Director ought to review and alter her findings. It would appear that the request was intended to be the commencement of a negotiation, which might have entailed discussing with the Director as to which of her criticisms would be dropped. Although the Director was free to engage in such negotiations, nothing in the structure or substance of Part 3A of the Act indicates that she was required to do so. 76 In this regard the obiter dicta observations of Ryan J in Daniel v Kelly [2003] FCA 772; 200 ALR 379 at [27]-[29] do not assist the applicant. That case concerned a different version of the Act. The relevant finding was that the Acting Director incorrectly regarded it to be a prerequisite for the exercise of his discretion to discuss entry into a s 92 agreement that the practitioner under investigation first invite recourse to such an agreement and be prepared to concede guilt of inappropriate practice before he could resort to a s 92 agreement. It was in that context that the court considered that there was a denial of procedural fairness. 77 The present case is somewhat different. There is no evidence to suggest that the Director did not consider entry into a s 92 agreement, or that she considered a concession of culpability a prerequisite. Nor is the Director obliged by s 89C(2) to give reasons for entering into (or not entering into) an agreement. Furthermore, there is nothing in the language of the Act which requires the Director to offer to enter into an agreement under s 92: Oreb at [126]. 78 The applicant was offered an opportunity to make submissions, which he took. Thereafter it was open to the Director to determine which of the three courses available under s 89C to take. There is nothing in the Act, or the common law, to indicate that procedural fairness required the Director to give the applicant successive oral hearings, or to receive an early indication from the Director that she was not proposing to enter into an agreement. Procedural fairness does not require that the decision-maker disclose what she is minded to decide so that the parties may have a further opportunity to criticise her mental processes before she reaches a final decision; under s 92; Minister for Immigration and Citizenship v SZGUR [2011] HCA 1; 241 CLR 594 at [9] (French CJ and Kiefel J). In this regard the analogous observations made by Rangiah J in Yoong at [90] are apposite (emphasis in original): … where a decision-maker is positively required to give the person under review an opportunity to be heard as to whether a particular decision should be made, the PSR Scheme tends to make the requirement express, and does not leave it to implication. For example, ss 89C(1), 103(1)(g) and 106H(4) specify that the practitioner must be permitted to make submissions before the relevant decision is made. This is reinforced by s 80(11) which states that, "[p]rovision is made throughout the scheme for the person under review to make submissions before key decisions are made or final reports are given." The fact that s 86 of the HI Act does not expressly provide for a right to make submissions as to why the Chief Executive should not make a request to the Director, while not of itself determinative, strongly suggests that no obligation of procedural fairness is implied. 79 Nor can the scope of any obligation to afford procedural fairness have been expanded by the statements made by the officers of the Agency that the director "would like to organise a teleconference with you to discuss the next steps in her review". There is no indication in these statements as to the purpose of the meeting. 80 Finally, I do not accept that the statements in Oreb and Dimian to which I have referred are inapplicable in the current case. Although the practitioners under review in those cases had not expressed a willingness to enter into a s 92 agreement, the statements of principle in these cases are not limited to those factual circumstances but rather provide guidance to the approach in cases of this type. 81 For these reasons I reject the application insofar as it relies on the first particular appended to ground 1. 82 For completeness I should add that had the applicant been denied procedural fairness by not having a second opportunity to meet with the Director, I am not satisfied that the applicant has established that he would in any event have suffered any practical injustice. The request was couched tentatively as "perhaps" the Director "might" contact the applicant's solicitor after reading the submissions advanced. As I have noted, the applicant's submissions amounted to a rejection of a number of the conclusions expressed by the Director, and acceptance only of infelicities in record keeping. Having regard to the precondition in s 92(1)(a) that before entry into an agreement the practitioner must acknowledge inappropriate practice, I am not satisfied that the applicant has established that he has lost any opportunity to put any information or argument to the Director, or otherwise suffered any detriment that would amount to a practical injustice of the type contemplated in Ex Parte Lam, see, for instance, at [35]-[38] (Gleeson CJ); and [105] (McHugh and Gummow JJ).
5.3 Failure to disclose adverse comments and apprehended bias
5.3.1 The submissions 83 The applicant contends in the third particular appended to ground 1 that the Director denied him procedural fairness by deciding to refer the matter to a committee under s 89C(2)(c) of the Act on the basis of her consideration, amongst other things, of comments from the Consultant, without first disclosing the substance of all of those comments to the applicant and providing him with a reasonable opportunity to make submissions about them. 84 The impugned comments identified by the applicant in his written submissions are comments or allegations made by the Consultant that I have identified as the 30196 concerns and the Cryo 11 AKL concerns. 85 The applicant submits that the Director's failure to disclose the Consultant's allegations of fraud to him constituted a breach of her implied obligation of procedural fairness, citing Minister for Immigration and Border Protection v SZMTA [2019] HCA 3; 264 CLR 421 at [38] (Bell, Gageler and Keane JJ). He submits that the Director was required to disclose to him the substance of the Consultant's allegations, because this was credible, relevant and significant information that could not be dismissed from further consideration by the director before she made a decision under s 89C(2) of the Act not to attempt to enter into an agreement under s 92, citing Applicant VEAL of 2002 v Minister for Immigration and Multicultural and Indigenous Affairs [2005] HCA 72; 225 CLR 88 at [17] (Gleeson CJ, Gummow, Kirby, Hayne and Heydon JJ). He submits that the question of whether information was credible, relevant and significant is to be determined before the Director reached her decision, and that it was relevant because, if the Director considered that a committee could also form the view that Dr Barnes had acted fraudulently, she may have been more inclined to refer the matter to a committee than to enter into a s 92 agreement. 86 The applicant submits that the Director was bound by an obligation to reveal the allegations irrespective of whether she gave them any weight, and that it is not to the point to ask whether the material did in fact play a part in influencing the Director's decision under s 89C(2). The relevant inquiry is what procedures should have been followed. 87 The applicant submits that in his case, which is confined to the application of the ADJR Act, it is not necessary for him to establish materiality in the sense considered in MZAPC v Minister for Immigration and Border Protection [2021] HCA 17. It is sufficient to establish the ground of review under s 5(1)(a) that the non-disclosure was of credible, relevant and significant information. In this regard, the applicant seeks to distinguish other decisions of this court, which have determined that materiality in the sense considered in the context of jurisdictional error is relevant to the establishment of error, on the basis that those cases concerned other sub-sections within s 5(1), but not s 5(1)(a) of the ADJR Act. 88 In relation to apprehended bias, the applicant submits that the Consultant's impugned comments constitute undisclosed, prejudicial material which had the potential to have a conscious or subconscious impact on the Director, such that a fair-minded lay observer properly informed might reasonably apprehend that she might not bring an impartial and unprejudiced mind to the resolution of the factual and legal questions that arose for her decision as to what action to take following her review, citing MZAPC at [71]. He contends that the question is whether the information was so "highly prejudicial" to the appellant that "the fair-minded lay observer, acting reasonably, would not dismiss the possibility that [the Director] may have been affected by [the impugned comments]", albeit that this may have been subconscious (at [72]). 89 The applicant contends that the impugned comments were highly prejudicial but that the Director at no time indicated that the prejudicial material had been disregarded or given no weight when deciding not to negotiate a s 92 agreement. The purpose of a s 90 consultant is for the Director to obtain assistance in making his or her decision on a review. Accordingly, the fair-minded lay observer might expect the Director to give the consultant's opinion some weight. The "abrupt and unexplained" decision on the part of the Director not to meet the applicant may, in the eyes of the fair-minded lay observer, acting reasonably, not dismiss the possibility that the Director may have been affected by the consultant's opinions when deciding not to enter into a s 92 agreement, whether consciously or subconsciously, citing CNY17 v Minister for Immigration [2019] HCA 50; 268 CLR 76 at [111] (Edelman J). 90 The Commonwealth first submits that the nature of the information that the applicant contends was required to have been disclosed comprised opinions of the Consultant. It submits that this was information one step removed from the views of the decision-maker and was not required to be disclosed, citing Karmakar v Minister for Health (No 2) [2021] FCA 916 at [50] (Logan J). The obligation of the Director does not extend to disclosing the assistance received from a consultant, but to furnish the practitioner with a "written report setting out the reasons why the Director has not made a decision under s 91" under s 89C(1)(b)(i). After inviting the practitioner to make written submissions, the Director must take them into account in making, "as soon as practicable" thereafter, one of the three decisions under s 89C(2), relevantly here, the decision under s 89C(2)(c) to refer the matter to a Committee. This scheme does not require information provided to the Director by way of assistance to be disclosed. 91 The Commonwealth submits that there is nothing to suggest that the Director adopted or gave any weight to the Consultant's comments and that the evidence points to a contrary conclusion. It submits that the heart of the applicant's argument is a contention that, irrespective of whether the Director had regard to the comments, she was obliged to disclose them to overcome any unconscious prejudice that the adverse material could create. This, it submits, closely resembles an argument rejected by the High Court in MZAPC. This provides a complete answer to the applicant's case because, the Commonwealth submits, there is no evidence capable of founding an inference that the Director took account or placed any weight upon the comments concerned and in fact the evidence suggests the contrary. The Commonwealth submits that the applicant's reliance on VEAL is misplaced in light of the more recent MZAPC. 92 The Commonwealth submits that "materiality", as that term is used in MZAPC, is a precondition to the finding of error under s 5(1)(a) of the ADJR Act citing cases determined by this court on the question. It submits that in any event, even if materiality is not a precondition to the grant of relief, it is undoubtedly a consideration that bears on the exercise of the discretion to grant relief under s 16 which, in the circumstances of the present case, would warrant refusal of relief, citing Darnell v Stoneheath Pty Ltd [2022] FCAFC 76 at [148] (Markovic, Thomas and Stewart JJ). 93 In relation to apprehended bias, the Commonwealth submits that the impugned comments were not of the type that would cause the independent lay-observer to the view that the Director was not bringing an unbiased mind to the determination. It refers to CNY17 and Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs v CQZ15 [2021] FCAFC 24; 284 FCR 455 at [115] (Kenny, Bromberg and Anderson JJ) to demonstrate that the information in those cases exemplify statements unlike those in the present case, which the Director and her staff were able independently to verify and then reject. Furthermore, the Commonwealth submits that there are several sound reasons for the Director to elect not to further meet with or negotiate with the applicant for an agreement under s 92 of the Act. The main, and most cogent, reason is because in his submissions the applicant continued to dispute five of the six complaints raised in the Report, and that the Director considered that it was appropriate to refer the matter to the Committee to investigate further.
5.3.2 Consideration 94 It is important to appreciate the sequence of events relevant to this ground. 95 On 6 and 8 June 2021, the Consultant, in accordance with the Director's request made under s 91 of the Act, sent emails to staff of the Director identifying his 30196 concerns, as set out in [31] and [34] above. A short while later, he set out his Cryo 11 AKL concerns in the spreadsheet. 96 On 15 June 2021 Mr Sacco wrote to the Director, informing her that he did not think that the Consultant's 30196 concerns (that the applicant had fraudulently altered his records and inappropriately claimed MBS 30196) were substantiated by the data. 97 On 14 July 2021 the Director had a telephone conversation with the applicant in which she put various matters about his conduct to him. Those included the Cryo 11 AKL concerns, but not the allegations of fraud or deliberate alteration of patient records as set out in the Consultant's 30196 concerns. 98 The Director made a decision not to take no further action under s 91. In accordance with s 89C(1)(b) she was obliged to give to the applicant her written report, setting out her reasons, and inviting the applicant to make written submissions within 1 month about the actions she should take in relation to the review. 99 The Director supplied the applicant with her Report on 29 July 2021. It conveys her concerns. Notably, she does not mention the allegations of fraud or deliberate alteration of patient records as set out in the 30196 concerns. It may be inferred that in her report she had regard only to matters that she considered to be of relevance to her decision under s 89C(1) to continue with the review and did not refer to mental processes or provisional views reached before the making of the decision; see, by analogy Minister for Immigration and Multicultural Affairs v Yusuf [2001] HCA 30; 206 CLR 323 at [69] (McHugh, Gummow and Hayne JJ); MZAPC at [67]-[69] (Kiefel CJ, Gageler, Keane and Gleeson JJ); Commissioner for Australian Capital Territory Revenue v Alphaone [1994] FCA 293; 49 FCR 576 at 591-592 (the Court). 100 In Kioa v West [1985] HCA 81; 159 CLR 550, Brennan J noted that a person "whose interests are likely to be affected by an exercise of power must be given an opportunity to deal with relevant matters adverse to his interests which the repository of the power proposes to take into account" in deciding the case (at 628). That is not to say that the person must be given an opportunity to comment on every adverse piece of information, irrespective of its credibility, relevance or significance. As his Honour said (at 628-629): Administrative decision-making is not to be clogged by inquiries into allegations to which the repository of the power would not give credence, or which are not relevant to his decision or which are of little significance to the decision to be made. Administrative decisions are not necessarily to be held invalid because the procedures of adversary litigation are not fully observed … Nevertheless in the ordinary case where no problem of confidentiality arises an opportunity should be given to deal with adverse information that is credible, relevant and significant to the decision to be made. … 101 In that case, Brennan J considered that the failure to give the appellant an opportunity to deal with apparently credible, relevant and damaging information before making an order for deportation left a risk of prejudice which ought to have been removed. As his Honour said (at 629): There was nothing in the circumstances of the case - neither in the administrative framework created by the Act nor in any need for secrecy or speed in making the decision - which would have made it unreasonable to have given [them] that opportunity. The failure to give [them] that opportunity amounts to a non-observance of the principles of natural justice. 102 This passage has been picked up in many cases, including VEAL, where at [17] the Court noted that what is adverse information that is credible, relevant and significant to the decision to be made must be determined by a decision-maker before the final decision is reached, not after a decision has been made when the decision maker has chosen to characterise the information in a particular way. In that case, the Court considered that, where the Tribunal said in terms that it gave no weight to the information in reaching its decision, that did not abrogate the responsibility of the decision-maker to supply the party with an opportunity to respond to it (at [18]). The question was not what decision the decision-maker should have made, nor what reasons the decision-maker gave for the conclusion reached, but rather what procedures should have been followed (at [19]). 103 The applicant submits that the failure on the part of the Director to inform him of the impugned comments denied him of an opportunity to respond to what was credible, relevant and significant information. However, as I explain in more detail below in relation to the apprehended bias submission, the adverse information to which the applicant refers consisted, in the case of the 30196 concerns, of allegations of fraud or deliberate alteration of patient records that were resolved in favour of the applicant upon further investigation, and an opinion that the Cryo 11 AKL concerns references reflected inaccurate ("untruthful") information, which the applicant accepted was the case. 104 Accordingly, the information was either not of the character of credible, relevant and significant information to the decision to be made (in the case of the 30196 fraud concerns) or was information that was in fact disclosed to the applicant (in the case of the Cryo 11 AKL concerns). 105 Furthermore, in a slightly different context, but in relation to the operation of these provisions, in Karmakar at [50], Logan J said, of communications with a consultant under s 90: Whether any consultation as envisaged by s 90 occurs at all is entirely a matter for the Director. If it does, the Director's obligation is not to disclose the assistance, if any, received or the author of any advice but rather, as s 89C(1)(b)(i) of the HIA dictates, to furnish the practitioner concerned with "a written report setting out the reasons why the Director has not made a decision under section 91". The reasons in that report must be those of the Director, not of such person or body, if any she may have chosen to consult for assistance. There is nothing to indicate that the reasons in the report were other than those of the Director. It is to that report containing those reasons that the practitioner is expressly afforded an opportunity by invitation to respond. If those reasons reflect idiosyncratic views within the profession, that will be apparent on the face of the report itself. It would, in my view, have been permissible for the Director, if she chose, to have quoted from any advice which she received under s 90 of the HIA, naming the author, and indicating that she agreed with that advice. But she was under no obligation either expressly by statute or by implication so to do. Indeed, it would be permissible for the Director to consult under s 90 but depart from any resultant advice to her if she had a different opinion. The s 90 process is intramural. The extramural aspect of this stage of the processes for which Pt VAA provides is the report containing the Director's reasons. The reasons which the Director furnished in her report were comprehensive. They conspicuously fulfilled her obligation to afford Dr Karmakar with an opportunity to engage with the critical issues that had not led the Director initially just to decide to take no further action under s 91 and which might persuade her to make a referral to a committee. They also enabled Dr Karmakar to address those same issues to the end of persuading the Director under s 91 that, taking her submission into account no further action ought to be undertaken. 106 The present case concerns s 89C(2), where there is no explicit or additional procedural fairness obligation placed on the Director beyond the requirement that she consider the submissions provided by the applicant. This is within what Griffiths J in National Home Doctor Service Pty Ltd v Director of Professional Services Review [2020] FCA 386; 276 FCR 338 (NHDS) referred to as the "tier two" obligation (at [28]-[42]) where there are explicit procedural fairness requirements imposed upon the Director by s 89C, namely to provide a report and consider any submission made thereafter (at [70]). 107 It would be odd if the requirements of procedural fairness under s 89C(2) imposed an additional obligation upon the Director that is not present in s 89C(1)(b)(i), having regard to the obligation on the Director to make a decision to take one of the steps in s 89C(2) "as soon as practicable" after taking into account any submissions made. 108 In the circumstances, in my view the particular opinions given by the Consultant which were anterior to the provision of the Report were not matters that the Director was required to disclose or put to the applicant in making her decision under s 89C(2). 109 Finally, I note that, whilst in the circumstances it is not necessary to determine whether considerations of materiality as identified in Hossein and MZAPC apply under s 39B of the Judiciary Act 1903 (Cth), in the event that I am incorrect in reaching this conclusion, I would in any event decline the grant of relief in the exercise of discretion under s 16 of the ADJR Act on the basis that in my view no practical injustice can be said to flow from any failure of the Director to refer to the 30196 concerns; Minister for Immigration and Border Protection v WZARH [2015] HCA 40; 256 CLR 326 at [60] (Gageler and Gordon J). It is apparent, for the reasons that I have given, that the Director did not hold the view that the 30196 concerns were warranted. In the case of the Cryo 11 AKL concerns, it is apparent that the substance of what the Director considered to be material about those concerns was squarely put to the applicant, both in the telephone conversation (as recorded in the notes) and also in the Report, which summarised the position that set out the Director's preliminary views at that stage of the review and also the responses of the applicant during the teleconference. Thereafter he supplied his response in his submissions. No practical injustice may be considered to arise from the failure to put the consultant's Cryo 11 AKL concerns to him. 110 Accordingly, I consider that the applicant fails in this aspect of ground 1. 111 In relation to the apprehended bias aspect of the decision, the Full Court in CQZ15 conveniently set out the relevant principles, which are well-settled: 90 The test for apprehended bias in administrative decision-making is whether a fair-minded lay observer might reasonably apprehend that the decision-maker might not bring an impartial mind to the resolution of the question that the decision-maker is required to decide: CNY17 at [17] (Kiefel CJ and Gageler J); [56] (Nettle and Gordon JJ); and [132] (Edelman J). At least the following two steps are involved in a case involving a claim of apprehended bias: first, it is necessary to identify "what it is that might lead a decision-maker to decide a case other than on its legal and factual merits": CNY17 at [57] citing Isbester v Knox City Council [2015] HCA 20; 255 CLR 135 at [21]. One class of thing that may be identified as giving rise to partiality on a decision-maker's part is the possession of extraneous information. As Deane J said in Webb at 74 in relation to extraneous information, there is a category of cases where "knowledge of some prejudicial but inadmissible fact or circumstance gives rise to the apprehension of bias". In this case, as already noted, the first respondent's contention is that the Tribunal's knowledge of the irrelevant and prejudicial information in the Job Details Report gave rise to an apprehension of bias. Secondly, there must be an articulation of the logical connection between the identified thing and the feared deviation from the course of deciding a case on its merits: CNY17 at [57], citing Ebner v Official Trustee in Bankruptcy [2000] HCA 63; 205 CLR 337 at [8]. In this case, as already noted, the first respondent argued that the fair-minded lay observer might have apprehended that the "objectively irrelevant prejudicial information" given by the Secretary to the Tribunal in the Job Details Report might have unconsciously encouraged the Tribunal to form an adverse view of the first respondent's character and credit. 91 In the context of apprehended bias, the hypothetical fair-minded lay observer is attributed with the appropriate knowledge to be able to make a reasonably informed assessment of the likelihood of apprehended bias. Such knowledge includes knowledge of the relevant legal framework - in this case knowledge of the procedures governing the Tribunal's decision-making under Part 7 of the Migration Act. The hypothetical observer is also attributed with knowledge of the identity of the decision-maker, the nature of the decision and issues in question, and of the relevant facts and circumstances leading to the decision, including, of course, the impugned conduct: see, for example, CNY17 at [17] (Kiefel CJ and Gageler J); [58] -[59] (Nettle and Gordon JJ); Isbester at [23] (Kiefel, Bell, Keane and Nettle JJ); Re Refugee Review Tribunal v Ex parte H [2001] HCA 28; 75 ALJR 982 at [27]-[28]. It has been authoritatively stated that the fair-minded lay observer has "broad knowledge of the material objective facts … as distinct from a detailed knowledge of the law or knowledge of the character or ability of the [decision-maker]": Webb at 73, as quoted in CNY17 at [58]. In the latter case, Nettle and Gordon JJ added, at [59], "[w]here, however, … the statutory scheme is complex, the fair-minded lay observer at least must have knowledge of the key elements of that scheme". 92 As the courts have repeatedly noted, the apprehended bias rule is concerned with protecting the public appearance of independence and impartiality, and does not require a finding that the irrelevant and prejudicial information in fact affected the decision made by the decision-maker, here the Tribunal: see, for example, CNY17 at [18] (Kiefel CJ and Gageler J); [70] (Nettle and Gordon JJ); and [131] (Edelman J); and AMA16 at [62] (Griffiths J, with whom Dowsett and Charlesworth JJ relevantly agreed). 112 The impugned comments are set out in the context in which they appeared in Section 2 of these reasons. It may be observed that on 6 and 8 June 2021 the Consultant sent emails to the staff of the Director. In the first he said that he was "fairly convinced that there is very deliberate fraud occurring … This appears to be a 'crime of commission' whereby Dr Barnes is altering clinical notes and pathology requests with the specific aim of fraudulently claiming item 30196" (emphasis in original). On 8 June 2021 he said (emphasis in original): … it seems as though his potentially deliberate misdemeanours centre around 'protecting' himself … by deliberately altering its anatomical location … Of course, I may just have a statistically anomalous sample where this seems to have occurred but this never happens in other cases. The easiest way to find out would be to run the numbers. 113 A week later, Mr Sacco ran the numbers and reported to the Director that he did not think that the Consultant's concern in relation to fraudulent alteration of the records in relation to the 30196 concerns could be substantiated. The notes of 14 July 2021 telephone conversation do not refer to the Director raising this concern with the applicant. Nor does the Report make reference to the concerns. The hypothetical fair-minded lay observer would be conscious of the relevant legal framework, including that the role of the Consultant under s 90(1) of the Act was to provide "assistance" to the Director which the Director may or may not choose to act upon. They would also be aware that the Director is, as the applicant characterised her in his submissions, a professional decision-maker who is charged with making her own decisions under the Act. In my view the fair-minded lay observer would recognise that the Director had put aside the inflammatory and inaccurate statements of the Consultant in reaching her decision as set out in the Report and that she had taken the same view in making her decision under s 89C of the Act. To put the matter in the language required by the authorities, in the circumstances of this case, I do not consider that a fair-minded lay observer might reasonably apprehend that the Director might not bring an impartial mind to the resolution of the question of whether or not to enter into negotiations with the applicant to see whether she may enter into agreement with the applicant under s 92 on the basis of the 30196 concerns as expressed by the Consultant. 114 I take the same view in relation to the Cryo 11 AKL concerns. The spreadsheet contained statements that "a proportion of the clinical notes must contain untruths" and that the applicant had "lied" in relation to records concerning the repetition of the statement about Cryo 11 AKLs. The notes of the telephone conversation with the applicant record that the Director explained that "the problem is that the entry is identical across multiple consultations … and even identical to other patient's [sic] entries. The Director expressed a preliminary concern that the record does not accurately reflect what happened in the consultation". Whilst expressed in more temperate language, the substance of the allegation made by the Consultant, namely that the clinical records contain untruths, or lies, is the same. Moreover, the notes record that the Director reported that the Consultant "said it was unlikely that exactly 11 were identified and treated each time". The applicant answered that allegation by accepting that his records are not accurate, and that "when he writes 'Cryo 11 AKs' he means it to be a macro". 115 In these circumstances, I have no difficulty in concluding that the allegation of apprehended bias is not made out. I do not consider that a fair-minded lay observer might reasonably apprehend that the Director might not bring an impartial mind to the resolution of the question of whether or not to enter into negotiations with the applicant to see whether she may enter into agreement with the applicant under s 92 on the basis of the Cryo 11 AKL concerns as expressed by the Consultant.
6.1 The applicant's submissions 116 In ground 2, the applicant contends that the Director's decision under s 89C(2) as to what action to take and her purported decisions to set up a committee and make a referral to it under s 93(1) were legally unreasonable. In his submissions, the applicant contends that the decision to refer him to the Committee, without first discussing with him the nature of the proposed s 92 agreement, was legally unreasonable. In this regard he submits that the Director was obliged to exercise the power in s 89C(2), which relevantly involved a consideration of the powers in s 92 and s 93. The evident purpose of s 92 is to obviate the need for referral to a committee if the Director and the person under review can agree that the person under review engaged in in appropriate conduct and can agree on an appropriate sanction. He submits that the provision in s 92A of the Act for the Determining Authority to have to ratify the agreement safeguards against this being an easy option for the practitioner. 117 The applicant submits that the Director's decision to make a referral to the Committee was arbitrary and unreasonable where the applicant had acknowledged shortcomings in his conduct, indicated a willingness to enter into a s 92 agreement, requested an opportunity to discuss entry into an agreement, and been offered by the Director an opportunity to have a discussion about the next steps in her review, and where a teleconference had been made but cancelled by the Director. He submits that it may be inferred that the Director's decision to refer to the Committee under s 93 indicated a lack of regard for the purpose of s 92 and a failure to have regard to the purposes for which the discretion in s 89C(2) is conferred. 118 The applicant next submits that the decision to refer him to a committee was also legally unreasonable because the Director did not know to what terms the applicant would agree and accordingly did not know whether the Commonwealth would be able to save considerable expense, and the applicant significant stress and uncertainty, by exploring the option of agreement. In that context, the applicant submits that the decision to make a referral to a committee bespeaks an exercise of power beyond its source, within Minister for Immigration and Citizenship v Li [2013] HCA 18; 249 CLR 332 at [85] (Hayne, Kiefel and Bell JJ). She could not reasonably reject the option of a s 92 agreement without first having a discussion with him as to the terms that such an agreement might involve.
6.2 Consideration 119 In BHL19 v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2020] FCAFC 94; 277 FCR 420, Wigney J summarised the relevant principles having regard to earlier authority at [130]-[138]. Those principles are familiar, and do not warrant repetition in full here, but I gratefully adopt them. In summary form, the concept of legal unreasonableness concerns the lawful exercise of power. Legal reasonableness, or an absence of legal unreasonableness, is an essential element in the lawfulness of decision-making. The Court's task in determining whether a decision is vitiated for legal unreasonableness is strictly supervisory. It does not involve the Court reviewing the merits of the decision under the guise of an evaluation of the decision's reasonableness, or the Court substituting its own view as to how the decision should be exercised for that of the decision maker. Nor does it involve the Court remaking the decision according to its own view of reasonableness. There are two contexts in which the concept of legal unreasonableness may be employed. The first involves a conclusion after the identification of a recognised species of jurisdictional error in the decision-making process, such as failing to have regard to a mandatory consideration, or having regard to an irrelevant consideration. The second involves an "outcome focused" conclusion without any specific jurisdictional error being identified. 120 The applicant contends that in the circumstances of the present case it may be inferred that the Director's decision to refer him to a committee under s 93 indicated lack of regard for the purpose of s 92, as well as a failure to have regard to the purposes of s 92 and a failure to have regard to the purposes for which s 89C(2) is conferred, particularly in circumstances where the Director did not wait to find out what terms the applicant would agree to before referring the matter to a committee. 121 Division 3A in Part VAA of the Act provides for the conduct of a review of the provision of services by a medical practitioner. By s 88A, the Director must consider whether or not to undertake a review upon receipt of a request by the Chief Executive under s 86. If she decides to conduct a review, she must either, by s 89C(1)(a), decide to take no further action or, under s 89C(1)(b), invite written submissions from the practitioner as to the action the Director should take. By s 89C(2), the Director must, as soon as practicable after taking those submissions into account, decide; (a) to take no further action; (b) enter into agreement under s 92; or (c) make a referral to a committee under s 93. Section 89C(2) imposes no restriction as to how the discretion to elect between these alternatives is to be exercised. Section 92(1) does, however, provide pre-conditions to the entry into an agreement. One is an acknowledgement from the person under review that the person engaged in inappropriate practice in connection with rendering services during the review period. Section 93 provides for the alternative of referral to a committee. 122 As I have noted in Section 5 above, the Director is not obliged to offer an agreement under s 92; Dimian at [33]; Oreb at [126]. Nor, as I have found, did the Director owe a duty of procedural fairness to the applicant to discuss a possible s 92 agreement. Indeed, in the present case the applicant proffered a limited acknowledgement that he had engaged in inappropriate conduct. He did not acknowledge all of the allegations made. The preconditions for entry into an agreement were accordingly not met. 123 Regardless of this point, there is nothing in the scheme of the Act to suggest that by referring the matter to the Committee the Director failed to have regard to a mandatory consideration or had regard to an irrelevant consideration; BHL19 at [133]. Nor may it otherwise be concluded that the outcome of the Director's decision was legally unreasonable. Whilst it may be that other decision makers in the same position might differ in their approach to negotiating agreements, it cannot be said that the decision not to do so falls outside the range of decision freedom afforded to the Director under the scheme of the Act; BHL19 at [134]; Li at [109] (Hayne, Kiefel and Bell JJ). 124 Furthermore, I do not accept that the decision to refer the applicant to the committee was arbitrary or indicated a lack of regard for the purposes of s 89C(2) and s 92. No doubt one purpose of the scheme is to permit a practitioner and the Director to reach agreement as to specific action under s 92(2) and thereby, subject to ratification by the Determining Authority, circumvent a more protracted enquiry process. However, another purpose of the scheme, apparent from s 93 and the provisions concerning the conduct by a committee of its functions, is to enable the Director to engage the expertise of peers of a medical practitioner sitting in a committee to investigate further the conduct under review before recommending specific action. It was within the decisional freedom afforded to the Director to form the view that such a course was appropriate in the circumstances of the present case. 125 Accordingly, I do not consider that ground 2 has been established.
Barnes
Director of Professional Services Review
[1994] FCA 293
[2001] HCA 30
[2003] HCA 6
[2005] HCA 72
[2000] HCA 63