Administrative Appeals Tribunal of Australia|2004-07-30

Marnotta Pty Ltd and Secretary, Department of Health and Ageing [2004] AATA 800 (30 July 2004)

CATCHWORDS - AGED CARE - cancellation of approval as provider of aged care and cancellation of allocation of places - documents sought on discovery - whether vague and oppressive - whether relevant to proceedings - discovery ordered

Aged Care Act 1997s s.1-3, 3-1, 7-1, 8-1, 11-1, 14-1, 15-1, 18-1, 18-5, 41-3, 42-1, 54-1, 65-1, 65-2, 66-1, 66-2, 66A-1, 66A-3, 67-1, 67-2, 67-3, 67-4, 67-5, 68-1, 68-2, 68-3, 68-4 and 86-8; Divisions 67, 68 and 86; Parts 2.1, 2.2, 2.3, 4.1, 4.2, 4.3 and 4.4

Magistrates' Court Civil Procedure Rules 1999, Version No. 021 (Victoria) Rule 11.04

Marnotta Pty Ltd and Secretary, Department of Health and Ageing [2004] AATA 326

Commissioner of Taxation v La Rosa (2002) 50 FCA 1036

Re Michell Sheepskins Pty Ltd and Australian Trade Commission (1986) 9 ALN N244

Re Riverside Nursing Care Pty Ltd and Secretary, Department of Health and Aged Care [2001] AATA 1063

Drake v Minister for Immigration and Ethnic Affairs (1979) 2 ALD 60

Re Mann and Capital Territory Health Commission (No. 2) (1983) 5 ALN N368

Re Wertheim and Department of Health (1984) 7 ALD 121

Re Loknar and Secretary, Department of Social Security (1992) 29 ALD 591

Re Lindsey and Australian Postal Commission (1989) 18 ALD 340

Cosco Holdings Pty Ltd v Commissioner for Taxation & Anor [1997] FCA 1504

Trade Practices Commission v Arnotts Limited and Others (No. 2) (1989) 88 ALR 90

Treasurer of the Commonwealth of Australia v Canwest Global Communications Corp [1997] FCA 578

Senior v Holdsworth, Ex parte Independent Television News Ltd [1976] 1 QB 23

South Pacific Hotel Services Inc v Southern Pacific Hotel Corporation Ltd [1984] 1 NSWLR 710

Pearce v Federal Commissioner of Taxation 1988) 85 ALR 359

Oceanic Sun Line Special Shipping Co Inc. v Fay [1988] HCA 32; (1988) 62 ALJR 389

DECISION AND REASONS FOR DECISION [2004] AATA 800

1. direct that, on or before 20 August, 2004, the respondent delete all protected information within the meaning of Division 86 of the Aged Care Act 1997 from, and lodge with the Tribunal and serve on the applicant, the following documents:

(a) notes and records of conversations and meetings, all correspondence and any other communication between the Department, or any of its employees, and Elizabeth Morgan and dated between December, 2002 and 1 July, 2003 either:

(i)

regarding Tangerine Lodge, Marnotta Pty Ltd and Marnotta; or

(ii)

in any way associated with the operation of Tangerine Lodge, Marnotta Pty Ltd and Marnotta;

(b) notes and records of all conversations and meetings, all correspondence and any other communication between the Department, or any of its employees, and Anglicare (i.e. Anglican Aged Care Services Group and now known as Benetas"), or any of its employees, and dated between December, 2002 and 1 July, 2003 either:

(i)

regarding Tangerine Lodge, Marnotta Pty Ltd and Marnotta; or

(ii)

in any way associated with the operation of Tangerine Lodge, Marnotta Pty Ltd and Marnotta;

(c) notes and records of all conversations and meetings, all correspondence and any other communication between the Department, or any of its employees, and an approved provider under the Act, or any of its employees, and dated between December, 2002 and 1 July, 2003 either:

(i) regarding Tangerine Lodge, Marnotta Pty Ltd and Marnotta; or

(ii) in any way associated with the operation of Tangerine Lodge, Marnotta Pty Ltd and Marnotta;

(d) notes and records of all conversations and meetings, all correspondence and any other communication between the Department, or any of its employees, and the Aged Care Standards and Accreditation Agency ("Agency"), or any of its employees, and dated between December, 2002 and 1 July, 2003 either:

(i) regarding Tangerine Lodge, Marnotta Pty Ltd and Marnotta; or

(ii) in any way associated with the operation of Tangerine Lodge, Marnotta Pty Ltd and Marnotta; and

(e) notes and records of all conversations and meetings, all correspondence and any other communication between the Department, or any of its employees, and any of the following creditors of Marnotta:

(i) Edjwal Investments Pty Ltd and/or its directors: Jacob (Jack) Chrapot and Philip Lewis;

(ii) Diande Pty Ltd and/or its directors: Jacob (Jack) Chrapot and Philip Lewis;

(iii) Verdian Pty Ltd and/or its directors: Jacob (Jack) Chrapot and Philip Lewis; and

or any of their employees, and dated between December, 2002 and 1 July, 2003 either:

(v) regarding Tangerine Lodge, Marnotta Pty Ltd and Marnotta; or

(vi) in any way associated with the operation of Tangerine Lodge, Marnotta Pty Ltd and Marnotta;

but not including any documents created in anticipation of, or pursuant to, proceedings in the Supreme Court of Victoria No. 2038 of 2003 between Marnotta and L & R Health Care Pty Ltd & Ors.

On 15 October, 2003, the applicant, Marnotta Pty Ltd (Receivers and Managers Appointed) ("Marnotta") lodged an application for review of a decision of a delegate of the respondent, the Secretary of the Department of Health and Ageing ("Secretary") dated 19 September, 2003. The delegate's decision confirmed two earlier decisions; one was dated 27 May, 2003 and the other 5 June, 2003. In general terms, the earlier decision had revoked a provisional allocation of places to Marnotta and the later decision revoked both its approval as an approved provider of aged care services and its allocation of places. In brief, each of those decisions imposed a sanction under the Aged Care Act 1997 ("Act") and related to residential aged care services provided at Tangerine Lodge.

2. The issue in this proceeding is whether the Secretary should be required to produce certain classes of documents to Marnotta. Marnotta was represented by Ms Brophy of counsel and the Secretary by Mr Gray of counsel. I have also had regard to written submissions prepared by Ms Hampel SC as well as Ms Brophy and to written submissions prepared by Mr Gunst QC and by Mr Gray as well as to the affidavit of Ms Jeanette Rachel Thomson. I have decided that the documents should be produced but subject to the exclusion of certain personal information relating to the residents of Tangerine Lodge.

3. Marnotta has now sought access to five categories of documents, which it understands are held by the Secretary. The period in respect of which they are sought begins when Marnotta began to provide residential aged care services at Tangerine Lodge in December, 2002. It ends when all the residents were removed from Tangerine Lodge on or about 1 July, 2003. All are said to relate to communications between the Department of Health and Ageing ("Department") and a person or entity (other than Marnotta or Marnotta Pty Ltd (i.e. Marnotta prior to the appointment of Receivers and Mangers)) in respect of Marnotta and/or Tangerine Lodge:

(a) notes and records of conversations and meetings, all correspondence and any other communication between the Department, or any of its employees, and Elizabeth Morgan and dated between December, 2002 and 1 July, 2003 either:

(i) regarding Tangerine Lodge, Marnotta Pty Ltd and Marnotta; or

(ii) in any way associated with the operation of Tangerine Lodge, Marnotta Pty Ltd and Marnotta;

(b) notes and records of all conversations and meetings, all correspondence and any other communication between the Department, or any of its employees, and Anglicare (i.e. Anglican Aged Care Services Group and now known as Benetas"), or any of its employees, and dated between December, 2002 and 1 July, 2003 either:

(i) regarding Tangerine Lodge, Marnotta Pty Ltd and Marnotta; or

(ii) in any way associated with the operation of Tangerine Lodge, Marnotta Pty Ltd and Marnotta;

(c) notes and records of all conversations and meetings, all correspondence and any other communication between the Department, or any of its employees, and an approved provider under the Act, or any of its employees, and dated between December, 2002 and 1 July, 2003 either:

(i) regarding Tangerine Lodge, Marnotta Pty Ltd and Marnotta; or

(ii) in any way associated with the operation of Tangerine Lodge, Marnotta Pty Ltd and Marnotta;

(d) notes and records of all conversations and meetings, all correspondence and any other communication between the Department, or any of its employees, and the Aged Care Standards and Accreditation Agency ("Agency"), or any of its employees, and dated between December, 2002 and 1 July, 2003 either:

(i) regarding Tangerine Lodge, Marnotta Pty Ltd and Marnotta; or

(ii) in any way associated with the operation of Tangerine Lodge, Marnotta Pty Ltd and Marnotta; and

(e) notes and records of all conversations and meetings, all correspondence and any other communication between the Department, or any of its employees, and any of the following creditors of Marnotta:

(i) Edjwal Investments Pty Ltd and/or its directors: Jacob (Jack) Chrapot and Philip Lewis;

(ii) Diande Pty Ltd and/or its directors: Jacob (Jack) Chrapot and Philip Lewis;

(iii) Verdian Pty Ltd and/or its directors: Jacob (Jack) Chrapot and Philip Lewis; and

or any of their employees, and dated between December, 2002 and 1 July, 2003 either:

(v)

regarding Tangerine Lodge, Marnotta Pty Ltd and Marnotta; or

(vi)

in any way associated with the operation of Tangerine Lodge, Marnotta Pty Ltd and Marnotta;

but not including any documents created in anticipation of, or pursuant to, proceedings in the Supreme Court of Victoria No. 2038 of 2003 between Marnotta and L & R Health Care Pty Ltd & Ors.

Marnotta also sought an order requiring the Secretary to swear an affidavit of documents and for inspection to be ordered in the same manner as occurs under the Rules of Court in Victoria.

4. Marnotta was an approved provider of aged care services at the residential care service known as Tangerine Lodge. It held that approval pursuant to s. 8-1 of the Act. Pursuant to s. 14-1, it also held an allocation of 45 places to provide aged care services. In addition, it had on 11 January, 2001 also been allocated an additional five low care places. As the Secretary had not then determined under s. 15-1(1) when the allocation was to take effect, the allocation of those five places was a provisional allocation. The provisional allocation period in respect of those five places had been extended beyond the two year period to 9 January, 2004.

5. There have been several decisions over the years but I will begin with that dated 31 March, 2003 following a Serious Risk Report dated 28 March, 2003 and submitted to the Department by the Agency. That decision, which was made by a delegate of the Secretary, imposed sanctions on Marnotta pursuant to s. 65-1 of the Act in respect of Tangerine Lodge. She did so on the basis that Marnotta had not complied with its responsibilities under Part 4.1, 4.2 or 4.3 of the Act, that there was an immediate and severe risk to the safety, health and well-being of care recipients at Tangerine Lodge as a result of Marnotta's non-compliance and that it was appropriate to impose sanctions. The sanction was to revoke Marnotta's approval under Part 2.1 of the Act for a period from 1 April, 2003 until 30 September, 2003. The sanction would not take effect if Marnotta agreed, within a specified time, to appoint an administrator who had nursing experience and who had been approved by the Commonwealth to administer Tangerine Lodge. That administrator had to be a person who was a member of the administrator panel appointed by the Secretary pursuant to s. 66A-1. He or she had to be appointed in accordance with s. 66A-3 and with the Sanctions Principles. Ms Elizabeth Morgan was appointed as administrator.

6. On 27 May, 2003, a delegate of the Secretary decided to impose sanctions on Marnotta pursuant to s. 65-1 of the Act. That sanction was to revoke the provisional allocation of five low care places made on 11 January, 2001 and so was a sanction provided for in s. 66-1(d). Relying on s. 67-1(2), notice was not given to Marnotta as required by s. 67-1(1). Marnotta sought review of that decision on 23 June, 2003. On 5 June, 2003, the delegate decided to revoke Marnotta's approval as a provider under the Act and to revoke all places allocated to it. The sanctions were provided for in ss. 66-1(a) and (d). Again, the procedure provided for in s. 67-1(2) was adopted.

7. Marnotta sought review of that decision on 21 July, 2003.

8. On 29 March, 2004, I refused to make an order dismissing Marnotta's application as frivolous and vexatious pursuant to s. 42B of the Administrative Appeals Tribunal Act 1975 ("AAT Act"). In my reasons for decision ([2004] AATA 326), I outlined the legislative provisions relating to the manner in which the Act 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 (s. 3-1). I will not repeat that outline but will give a brief summary of its main points.

Aged Care Act - outline of provisions relating to payment of subsidies

9. "Aged care", for which the Act makes provision for the payment of subsidies, includes, among others, residential care (s. 1-3 and Schedule 1, clause 1), which is defined as:

"... personal care or nursing care, or both personal care and nursing care, that:

(a)

is provided to a person in a residential facility in which the person is also provided with accommodation that includes:

(i)

appropriate staffing to meet the nursing and personal care needs of the person; and

(ii)

meals and cleaning services; and

(iii)

furnishings, furniture and equipment for the provision of that care and accommodation; and

(b)

meets any other requirements specified in the Residential Care Subsidy Principles." (s. 41-3(1))

"... services, or accommodation and services, provided to a person whose physical, mental or social functioning is affected to such a degree that the person cannot maintain himself or herself independently." (s. 1-3 and Schedule 1, clause 1)

10. In general terms, subsidies, including residential care subsidies, are paid to approved providers under Chapter 3. An approved provider is eligible for residential care subsidy in respect of a day if the Secretary is satisfied that, during that day, the approved holder holds an allocation of places, provides residential care to a care recipient in respect of whom an approval is in force under Part 2.3 as a recipient of residential care and the residential care service through which care is provided meets its accreditation requirement, if any, applying at that time (s. 42-1).

11. Payments of a subsidy cannot be made under Chapter 3 to a person for providing aged care unless that person is approved under Part 2.1 (s. 7-1). Even if a person is an approved provider, a subsidy may only be paid to that person under Chapter 3 for providing aged care in respect of which a place has been allocated (s. 11-1). A "place" is defined as "... a capacity within an aged care service for provision of residential care, community care or flexible care to an individual" (s. 1-3 and Schedule 1, clause 1). Of relevance in this case is s. 18-1(1), which provides that the allocation of a place ceases to have effect if it is either relinquished or revoked under s. 18-5 or Part 4.4.

Aged Care Act - outline of provisions relating to responsibilities of an approved provider

12. As to the quality of the care that must be provided by an approved provider, the responsibilities of an approved provider are set out in Part 4.1 of the Act. Section 54-1 sets out the responsibilities and they are expanded upon in the remaining sections in the Part. The responsibilities of an approved provider in relation to the aged care it provides are:

"(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(1), 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 the 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." (s. 54-1)

Aged Care Act - outline of provisions relating to consequences of an approved provider's failing to comply with its responsibilities

13. Part 4.4 sets out the consequences of an approved provider's not complying with its responsibilities under Parts 4.1, 4.2 or 4.3 of the Act. In general terms, those consequences include the imposition of sanctions, undertakings in lieu of sanctions or agreements to undertake specified courses of action.

14. Revocation of an allocation may also occur under Part 4.4 as it may in the case of the approval of the provider of aged care. That part provides that the Secretary may impose sanctions if:

"(a) the approved provider has not complied, or is not complying, with one or more of its responsibilities under Part 4.1, 4.2 or 4.3; and

(b) the Secretary is satisfied that it is appropriate to impose sanctions on the approved provider (see section 65-2); and

(c) the Secretary complies with the requirements of Division 67." (s. 65-1)

15. In deciding whether or not to impose sanctions in respect of an approved provider's non-compliance with his, her or its responsibilities, the Secretary must consider:

"(a) whether the non-compliance is of a minor or serious nature;

(b) whether the non-compliance has occurred before and, if so, how often;

(c) whether the non-compliance threatens the health, welfare or interests of care recipients;

(d) whether the approved provider has failed to comply with any undertaking to remedy the non-compliance;

(e) any other matters specified in the Sanctions Principles." (s. 65-2)

16. The sanctions that may be imposed by the Secretary include:

"(a) revoking or suspending the approved provider's approval under Part 2.1 as a provider of aged care services;

(b) restricting the approved provider's approval under Part 2.1 as a provider of aged care services to aged care services that are being conducted by the approved provider at the section 67-5 notice time;

(c) restricting the approved provider's approval under Part 2.1 as a provider of aged care services to either:

(i) care recipients to whom the approved provider is providing care at the section 67-5 notice time; or

(ii) care recipients other than those to whom the approved provider commenced providing care, through one or more specified aged care services, after the section 67-5 notice time;

(d) revoking or suspending the allocation of some or all of the places allocated to the approved provider under Part 2.2;

(e) varying the conditions to which the allocation of some or all of those places is subject under section 14-5;

(f) prohibiting the further allocation of places under Part 2.2 to the approved provider;

(l) such other sanctions as are specified in the Sanctions Principles." (s. 66-1)

17. If revocation of an approved provider's approval as a provider of aged care services is imposed as a sanction, the revocation does not take effect if two things happen. The first is that the Secretary specifies in the notice imposing the sanctions that the sanctions will not take effect if the approved provider agrees to a course of action specified in the notice (s. 66-2(1)(a)). The second is that the approved provider so agrees within the specified time (s. 66-2(1)(b)). The courses that may be specified are set out in the remainder of the sub-section and are:

"(i) providing, at its expense, such training as is specified in the notice for its officers, employees and agents;

(ii)

providing such security as is specified in the notice for any debts owed by the approved provider to the Commonwealth;

(iii)

appointment by the approved provider, in accordance with the Sanctions Principles, and in accordance with section 66A-2, of an adviser approved by the Commonwealth to assist the approved provider to comply with its responsibilities;

(iv)

appointment by the approved provider, in accordance with the Sanctions Principles, and in accordance with section 66A-3 of an administrator approved by the Commonwealth to administer an aged care service in respect of which the approved provider has not complied with its responsibilities;

(v)

transferring some or all of the places allocated to the approved provider under Part 2.2 to another approved provider;

(vi) such other matters as are specified in the Sanctions Principles". (s. 66-2(1)(a))

Aged Care Act - outline of provisions relating to procedures to be followed in the imposition of a sanction

18. The procedure for the imposition of sanctions is the subject of Division 67 of Part 4.4. Section 67-1 provides that the Secretary must not impose sanctions on an approved provider for non-compliance with one or more of its responsibilities under Part 4.1, 4.2 or 4.3 unless the Secretary has completed each of the steps set out in s. 67-1(1). Those steps include giving the approved provider notice of non-compliance, a notice of intention to impose sanctions or to remedy the non-compliance or both and notice of the Secretary's decision whether to impose sanctions. Each notice is detailed in following sections in the Act.

19. The Secretary may give an approved provider notice of his or her intention to impose sanctions in respect of its non-compliance with its responsibilities under Part 4.1, 4.2 or 4.3. He or she may do that if the approved provider has not made any submissions addressing the issues in response to a notice given to him, her or it under s. 67-2 or has made submissions but they are unsatisfactory for one of the reasons specified in s. 67-3(1)(b)). The notice must set out the details included in s. 67-4(2) and the Secretary is required to consider any submissions made by the approved provider.

20. If the Secretary considers that the submissions provided by the approved provider pursuant to a notice under s. 67-2 propose appropriate action to remedy the non-compliance, set out sufficient reason for the non-compliance or are otherwise satisfactory, the Secretary may give the approved provider a notice to remedy the non-compliance with his, her or its responsibilities under Part 4.1, 4.2 or 4.3 (s. 67-4(1)). That notice must inform the approved provider that, within 14 days after receiving the notice, or within a shorter period specified in the notice, it must give the Secretary a written undertaking to remedy the non-compliance. It must also inform the approved provider that the Secretary may impose sanctions on the approved provider if the undertaking is not given or complied with (s. 67-4(2)). The undertaking must be in the form set out in s. 67-4(3).

21. The Secretary must give the approved provider written notification of whether he or she intends to impose a sanction for non-compliance with responsibilities under Part 4.1, 4.2 or 4.3 (s. 67-4(1)). If a sanction is to be imposed, the Secretary must give the approved provider a notice setting out the nature of the non-compliance, the sanction to be imposed, the consequences of the imposition of the sanction, the sanction period and the reasons for the sanction's imposition (s. 67-5(2)). If the Secretary decides not to impose a sanction, the notice must specify the nature of the approved provider's non-compliance and the reasons for not imposing a sanction (s. 67-5(3)).

22. While the notices to which I have referred are the usual procedure, all but the notice given under s. 67-5 of the Secretary's decision on whether to impose sanctions may be dispensed with. The effect of s. 67-1(2) is that all but that notice may be dispensed with if:

"... the Secretary is satisfied that, because of the approved provider's non-compliance, there is an immediate and severe risk to the safety, health or well-being of care recipients to whom the approved provider is providing care."

23. In general terms, a sanction imposed for non-compliance with responsibilities under Part 4.1, 4.2 or 4.3 remains in effect until either the sanction period determined under s. 68-2 ends or the Secretary decides under s. 68-3 that it is appropriate for the sanction to be lifted (s. 68-1(1)). Those general provisions do not apply to sanctions specified in s. 68-1(2). Among those sanctions to which the general provisions do not apply are sanctions revoking the approved provider's approval under Part 2.1 or revoking the allocation of some or all of the places allocated to the approved provider under Part 2.2. The consequence is that the provisions of Division 68 of Part 4.4 regarding such matters as the fixing of the sanction period by the Secretary (s. 68-2), the lifting of sanctions (s. 68-3) and applications for lifting of sanctions (s. 68-4) do not apply to them.

24. Marnotta sought production of the documents pursuant to one or other of the following provisions: ss. 37(2), 33(2A)(a) and 40(1A)(b) of the AAT Act. In the written submissions, it was submitted that the Tribunal is not bound by the rules of evidence and is not restricted to evidence that is legally admissible. Instead, it may have regard to evidence that is rationally probative including evidence that is circumstantial and hearsay. Reliance was placed on Commissioner of Taxation v La Rosa (2002) 50 FCA 1036 at [35]. Marnotta's concern at this stage, it was submitted, is with the production and disclosure of documents and not with the adduction of evidence. As s. 33(1)(c) does not permit the Tribunal to override legal professional privilege, disclosure should be ordered under s. 37(2). As far as s. 40(1A) is concerned, Marnotta seeks the documents to support a case for which there is already evidence and not to discover if there is a case. Consequently, applying the distinction drawn in Re Michell Sheepskins Pty Ltd and Australian Trade Commission (1986) 9 ALN N244, the Tribunal should exercise its power to require a person to appear before the Tribunal to produce the documents sought by Marnotta.

25. Ms Brophy submitted that it is clear from the documents already lodged in the Tribunal that Ms Morgan, Anglicare and the Agency had dealings with Marnotta and Tangerine Lodge and with the Department in respect of Marnotta and Tangerine Lodge during the period from December, 2002 to 1 July, 2003. If the Department also had dealings with other persons in that period, those communications would be equally relevant. Those communications would be relevant in ascertaining whether the Department was entitled to find that there was an immediate and severe risk to recipients of care at Tangerine Lodge justifying the imposition of sanctions. They would also be relevant in considering the appropriateness of the sanctions imposed.

26. Ms Brophy submitted that dealings between the Department, Marnotta and Elizabeth Morgan, Anglicare, other approved providers and the Agency in relation to Tangerine Lodge following the decision dated 31 March, 2003 to impose sanctions are relevant to the following issues:

(a)

the choice of Ms Morgan as administrator;

(b)

the discharge by Ms Morgan of her duties as administrator from the time of her appointment;

(c)

the circumstances of, and the reasons for, Ms Morgan's resignation;

(d)

Ms Morgan's contractual obligations in respect of Marnotta;

(e)

the assurances given by the Department as to Ms Morgan's competence;

(f)

the relevance of the Department's expression of confidence in Ms Morgan to the major creditor's decision to appoint Receivers and Managers to Marnotta to continue to operate Tangerine Lodge;

(g)

Marnotta's reliance on Ms Morgan's advice that there was no serious risk to the residents of Tangerine Lodge; and

(h)

the serious risk finding leading to the imposition of sanctions on 27 May, 2003.

27. Expanding on these issues, Ms Brophy submitted that any communications which were made after Ms Morgan's appointment and their relationship to the Department's discussions with the major creditor in May, 2003 are also relevant. They are relevant to the Department's discussions with the major creditor in May, 2003 concerning Ms Morgan's capacity to remove serious risk. Any communications which occurred before the imposition of sanctions in the decision of 31 March, 2003, which concerned alternative arrangements for the care of residents at Tangerine Lodge and which were considered by the Department are also relevant, Ms Brophy submitted.

28. The Secretary did not object to the production of documents in category (a) provided their confidentiality was maintained and subject to the deletion of the names of care recipients in order to accord with the requirements of Division 86 of the Act.

29. The Secretary does not object to producing those in category (b) provided that:

(i)

the names of care recipients are deleted in order to accord with the requirements of Division 86 of the Act; and

(ii)

the documents relevant only to the arrangements for care of the residents of Tangerine Lodge if Marnotta's approval and allocation were cancelled or made after the those cancellations were made are excluded.

Relying on my decision in Re Riverside Nursing Care Pty Ltd and Secretary, Department of Health and Aged Care [2001] AATA 1063, Mr Gray submitted that arrangements made in respect of the care of residents in the event of, and after, a cancellation are not relevant to the review. Documents sought in category (c) related to similar arrangements and so were not relevant to the review of the decision.

30. On behalf of the Secretary, Mr Gray objected to the production of the documents requested in category (d) on the basis that they had already been produced. An affidavit would be filed on behalf of the Secretary setting out the steps taken by the Agency and identifying all relevant Agency documents. All relevant documents in category (d) have been disclosed to Marnotta's solicitors.

31. As for paragraph (e), Mr Gray contended, the category of documents sought is too broad as well as being vague and oppressive. The Secretary would have no objection to producing documents in category (e) were it to be redefined and limited to, for example, communications regarding specified standards of care at Tangerine Lodge. The Secretary understands category (e) to relate to any of Marnotta's trade creditors and regards that class as too broad.

AAT Act, ss. 33, 37 and 40: general principles

32. In reviewing a decision, the role of the Tribunal is to reach the correct or preferable decision (Drake v Minister for Immigration and Ethnic Affairs (1979) 2 ALD 60 at 68, per Bowen CJ and Deane J). Its role is not to adjudicate upon whether the decision-maker is able to defend the decision (Re Mann and Capital Territory Health Commission (No. 2) (1983) 5 ALN N368 as set out and adopted in Re Wertheim and Department of Health (1984) 7 ALD 121 at 154). If it is to carry out its task, it must be informed not only of the information supporting the decision under review but all of the information that is relevant in making any decision in the circumstances. In the first instance, it is the decision-maker who holds all of that information and it is to the decision-maker that the AAT Act first looks.

33. It does so in s. 37. In essence, s. 37(1) provides that the decision-maker must give to the Tribunal a copy of a statement of the reasons for decision and a copy of all of the documents, which are in his or her possession or control and which the decision-maker considers are relevant to the review of that decision by the Tribunal. The principle underlying s. 37 is underlined by the requirement that the decision-maker must comply with the requirements of s. 37 "... notwithstanding any rule of law relating to privilege or the public interest in relation to the production of documents" (AAT Act, s. 37(3)). The decision-maker must lodge as many copies of the reasons and documents as directed by the Tribunal and must also give a copy of them to each other party to the proceeding (AAT Act, s. 37(1AE)). If, however, the decision-maker considers that any reasons or documents should not be disclosed to another party, he or she may apply to the Tribunal for an order under s. 35 directing that they not be disclosed.

34. Section 37(2) gives the Tribunal power to require a "person" to lodge other documents within his or her possession or control if "... the Tribunal is of the opinion that particular other documents or that other documents included in a particular class of documents may be relevant to the review of the decision by the Tribunal ...". Logically, the reference to a "person" must be a reference to a "person who has made a decision" or the "person who is obliged [ or required] to lodge" a statement of the reasons or of documents but they are one and the same person (see also Re Loknar and Secretary, Department of Social Security (1992) 29 ALD 591).

35. It may be that relevant documents are held by persons other than the decision-maker. An obvious person may be the applicant but there may be third parties such as other Commonwealth agencies or private persons or enterprises. Section 37 does not relate to those persons. If information is to be sought from those persons, regard must be had to other provisions of the AAT Act. Those other provisions establish a framework that enables the Tribunal some degree of latitude for, subject only to its provisions and to those of the Administrative Appeals Tribunal Regulations as well as of any other enactment modifying those provisions, it is not bound by the rules of evidence but may inform itself on any matter and in such manner as it thinks appropriate (AAT Act, s. 33(1)(c)).

36. Section 33(2A)(a) provides that the Tribunal may "require any person who is a party to the proceeding to provide further information in relation to the proceeding". It is to be noted that the power is limited to directing those who are parties to the proceeding and it may not be used to direct third parties. Unlike s. 37(2), it is not limited to "documents" but extends to "information". There is no provision equating with s. 37(3) relating to legal professional privilege. The consequence is that any directions that are made must be subject to the general law relating to legal professional privilege for:

"... it is in the last degree improbable that the legislature would overthrow fundamental principles, infringe rights, or depart from the general system of law, without expressing its intention with irresistible clearness; and to give any such effect to general words, simply because they have that meaning in their widest, or usual, or natural sense, would be to give them a meaning in which they were not really used." (Potter v Minahan [1908] HCA 63; (1908) 7 CLR 277 per O'Connor J at 304).

Section 33(1) of the AAT Act cannot be regarded as expressing an intention to displace the law relating to legal professional privilege with "irresistible clearness". It provides only that "the Tribunal is not bound by the rules of evidence but may inform itself on any matter in such manner as it thinks appropriate" (s. 33(1)(c)). As the Tribunal said in Re Lindsey and Australian Postal Commission (1989) 18 ALD 340 (Gray J, Senior Member Dwyer and Professor Webster, Member), "It is now established by authority that the rule known as legal professional privilege ... is more than a rule of evidence. See Baker v Campbell [1983] HCA 39; (1983) 49 ALR 385; 153 CLR 52, especially at 87-8, Murphy J; 96, Wilson J; 115-16, Deane J, and 127-9, Dawson J. ..." (at 344).

37. Under s. 40(1A) of the AAT Act, the Tribunal or a registrar may summons a person to give evidence or produce any books, documents or things in his or her possession, custody or control. If requested to issue a summons, only a presidential member or a senior member may refuse to do so (AAT Act, s. 40(1C)). A presidential member or a senior member may give a party leave to inspect a document produced under a summons (AAT Act, s. 40(1D)). There are occasions on which a party requests that a summons be issued to another party or, as has effectively happened in this case, asks the Tribunal to issue a summons on its own initiative.

38. As s. 40(1A) does not specify any criteria that must be taken into account in issuing a summons, it may suggested that the Tribunal has power to order production of books, documents or things that fall outside the description of those that may be said to be "in relation to the proceeding" in s. 33(2A)(a) or the "documents [that] may be relevant to the review of the decision" in s. 37(2). There are, though, criteria found elsewhere in the AAT Act. One is that "... every party to a proceeding before the Tribunal is given a reasonable opportunity to present his or her case ..." (AAT Act, s. 39). Another is that to which I referred earlier i.e. the Tribunal is not bound by the rules of evidence but may inform itself on any matter and in such manner as it thinks appropriate (AAT Act, s. 33(1)(c)). Neither criteria justifies the issue of a summons seeking books, documents or things that fall outside the parameters of relevance to the review of the decision or to an issue that must be resolved in reviewing that decision.

39. The general law relating to the issue of a subpoena does not justify an interpretation of s. 40(1A) that severs any link with relevance. Spender J considered these principles in Cosco Holdings Pty Ltd v Commissioner for Taxation & Anor [1997] FCA 1504. His Honour asked whether the material sought had:

"... an apparent relevance to the issues in the principal proceedings, ie, is adjectival, as distinct from substantive, relevance established? ..."

In Trade Practices Commission v Arnotts Limited and Others (No. 2) (1989) 88 ALR 90, Beaumont J had said:

"The test of adjectival relevance is satisfied if the material has apparent relevance. In my opinion, the documentation called for here could possibly throw light on the issues in the main case. In my opinion, adjectival relevance is established." (at 103)

Spender J explained this passage in Cosco Holdings Pty Ltd v Commissioner for Taxation & Anor:

Notwithstanding the use of the word 'possibly' in this paragraph, in my opinion, that word is not used in any speculative sense. I take his Honour's conclusion expressed in that paragraph as an acquiescence to the correctness of the submission that that material sought could reasonably be expected to throw light on some of the issues in the principal proceedings. It is not a question of looking at the documents to see if the documents might permit a case to be made.

...

Discovery should be controlled, and may be limited to documents relevant to particular issues, but it is a valuable weapon in the armoury of justice. The real objection which, in some cases, justifies discovery being limited to particular issues is the objection of oppression.

..."

40. Spender J referred to a judgement by the Full Court of the Federal Court in Treasurer of the Commonwealth of Australia v Canwest Global Communications Corp [1997] FCA 578, Beaumont, Burchett and Emmett JJ) in which it had said:

"A modern statement of the principle which has been repeatedly followed is that made by Brennan J (with whom Bowen CJ agreed) in W.A. Pynes Pty Ltd v Bannerman [1980] FCA 79; (1980) 41 FLR 175 at 181, where what is required to obtain a discovery order in a doubtful case was expressed as follows:

sufficient is shown to ground a suspicion that the party applying for discovery has a good case proof of which is likely to be aided by discovery."

His Honour also referred to a passage from the judgment of Lord Denning in Senior v Holdsworth, Ex parte Independent Television News Ltd [1976] 1 QB 23:

"... I think that, on due notice being given, the courts have the power to order the ITN to produce and show the untransmitted film when the course of justice so requires - of course, on all their expenses being paid just like conduct money. But the court should exercise this power only when it is likely that the film will have a direct and important place in the determination of the issues before the court. The mere assertion that the film may have some bearing will not be enough. If the judge considers that the request is irrelevant, or fishing, or speculative, or oppressive, he should refuse it.

In this particular case, it was mere speculation that the untransmitted film would contain a photograph of the incident: and it was oppressive to require the whole film to be shown when only one small incident was involved."

41. Finally, Spender J referred to a judgement of Clarke J in South Pacific Hotel Services Inc v Southern Pacific Hotel Corporation Ltd [1984] 1 NSWLR 710 at 719:

"... there is no doubt that a subpoena, particularly one addressed to a stranger must be couched in terms of reasonable particularity. It may call for the production of such a large number of documents of doubtful relevance that it should be regarded as oppressive and an abuse of process: see the example given by Moffitt P in Waind (at 382). If a court is called upon to rule that a subpoena is an abuse of process in this sense, it will need to carry out an exercise of judgment upon the particular facts in each case, including but not limited to the terms of the subpoena, bearing in mind the need to balance the reasonableness of the burden imposed upon the recipient and the invasion of his private rights with the public interest in the due administration of justice and, in particular, that all material relevant to the issues be available to the parties to enable theme to advance their respective cases. There is, in every case, a clash between these competing interests and whilst the balancing exercise to which I have referred must be carried out, it is the latter interest which is predominant.

...

In determining whether the subpoena offends, the court will, as I have said, need to consider all the circumstances. Quite apart from the term of the subpoena are the identity of the recipient and his connection with either the parties or the matters in issue, the extent of the burden which may be apparent from the subpoena itself or from the evidence adduced for this purpose, and the possible relevance between the documents called for and the dispute before the court."

42. It is apparent from these cases that the court will take into account the relevance of documents sought to the issue in dispute before the court. Their relevance does not need to be established on the balance of probabilities. All that need be established is that the material sought could reasonably be expected to throw light on some of the issues in the principal proceedings. It is not enough if their relevance can only be speculated upon. Regard must also be had to the burden placed upon the person from whom the books, documents or things are sought and that must be weighed against the public interest in the administration of justice that requires all material relevant to the issues to be available to the parties and to the court. Given the principles, which underpin the Tribunal and to which I have referred, these principles are equally applicable to the interpretation of s. 40(1A).

43. This interpretation of s. 40(1A) is consistent with the requirement in s. 37(2) requiring production of "documents [that] may be relevant to the review of the decision" (emphasis added). That is not a requirement that the documents will necessarily prove to be relevant when the decision is finally reviewed. The interpretation of s. 40(1A) is also consistent with s. 33(2A), which requires only that the information be "in relation to the proceeding". In view of the definition of "proceeding" in s. 3(1) of the AAT Act, the information may be in relation to the review of a decision but it may also be in relation to a number of other matters including an incidental application made in connection with an application or proposed application. The expression "in relation to" is capable of a wide meaning (Pearce v Federal Commissioner of Taxation 1988) 85 ALR 359, Northrop, Spender and Pincus JJ at 366). Acts preparatory to the occurrence of an event may be regarded as being in relation to that event (Newbury v Smith [1991] FCA 146; (1991) 101 ALR 54 at 61, per Gray J)

44. Regardless of the consistency among the three sections, it seems to me that, unless a summons requiring a person to give evidence is under consideration, the powers given by s. 40(1A) are more appropriate to be used in respect of persons other than the parties. That is so for broader powers are found in ss. 33(2A) and 37(2) in relation to the parties than are found in s. 40(1A) in relation to "a person". As I have noted, for example, s. 33(2A) extends to information and, unlike s. 40(1A)(b) and (c), is not limited to "books, documents or things". I do not propose to consider s. 40(1A) further. Furthermore, a summons issued by the Tribunal to produce books, documents or things equates with a subpoena duces tecum issued in a court. The principle behind a subpoena duces tecum was stated by Bayley B in Summers v Moseley [1834] EngR 320; (1834) 2 Cr & M 477 to be:

"... Has not the King for the benefit of the subject a power to require a third party to do that which is essentially requisite for the purposes of justice. The course of justice would be most defective if there were not such a power in the crown as the source of justice. ..."

Could the documents sought by Marnotta reasonably be expected to throw light on the decision under review or issues relevant to reviewing that decision?

45. On the basis of Ms Thomson's affidavit, I find for the purposes of this proceeding only that Marnotta and its advisers are of the view that obtaining documents from the Secretary has been problematic. They are of the view that they have been given the documents in what may be summarised as dribs and drabs and Ms Thomson has supported that view by reference to the history of correspondence between Marnotta and their solicitors and the Secretary and her Department. In his submissions, Mr Gray has pointed to reasons why that is explicable. I do not want to decide the rights and wrongs of the disclosure of the documents for it is not pertinent in my determining whether the documents Marnotta now seeks "may be relevant to the review of the decision" in terms of s. 37(2) or whether it may be said to be "in relation to the proceeding" within the meaning of s. 33(2A).

46. The Secretary submits that the documents sought in category (c) are not relevant. The documents in category (c) relate to communications regarding, or associated with, the operation of Tangerine Lodge, Marnotta Pty Ltd and Marnotta. The communications sought are those between the Department and any other approved provider under the Act. In Re Riverside Nursing Care Pty Ltd and Secretary, Department of Health and Aged Care, the solicitors for the approved provider sought documents concerning a wide range of documents including those concerning the preparation for, the arrangements for and implementation of the transfer of residents from the nursing home to St Vincent's Hospital. The request extended to documents relating to steps taken by the Department to obtain the residents' records and to transmit them to St Vincent's Hospital and to obtain information regarding the residents from those residents' relatives as well as documents relating to the Department's ascertaining the residents' wishes as to their being moved and the likely effect of any move on them and their relatives. I refused to direct the Secretary to produce the documents sought by the approved provider's solicitors. In doing so, I said:

"... The request is framed far too widely to be relevant to the issues that may face the Tribunal in reviewing the Secretary's decision. Taking paragraph (a) of the Schedule to the letter by Riverside's solicitors, documents relating to the preparation for, and implementation of, the transfer of residents from Riverside to St Vincent's Hospital suggests that what is sought are documents relating events concerned with the actual transfer of those patients. Those documents are not relevant to a consideration of the issues in this case. This is particularly so in relation to the documents described in paragraph (b)(ii). It is concerned with what actually happened on the transfer of the patients from Riverside to St Vincent's Hospital.

23. The purpose for which the documents listed in paragraph (c) are sought is not clear. No time frames are specified and there are no limits placed upon the nature or purpose of any information sought by the Department from the persons specified in paragraph (c). In the absence of those time frames and limits, it is not possible to say that they are relevant to the issues to be considered.

24. As described, it is hard to see how the documents sought in paragraph (d)(ii) are relevant to the issues in this matter. The convenience to the relatives of the patients as such is not relevant."

47. In reaching that conclusion, I considered the objects of the Act and the decision under review:

20. The objects are focused upon funding of aged care and upon the provision of aged care services. I have already set out what is meant by "aged care". By "aged care services", the Act means the "... undertaking[s] through which aged care is provided_" (Schedule 1, clause 1). The essential objects of the Act are to provide for planned distribution of a limited amount of funds to undertakings that provide residential, community or flexible care (i.e. aged care) and to provide for the distribution in such a way that it meets a number of needs or objects. Among those needs and objects include the protection of the health and well-being of the recipients of aged care services. It is arguable that this object would influence the matters that would need to be taken into account in deciding whether or not to cancel an approval or an allocation. It is arguable that the need to protect the health and well-being of the recipients of aged care services would mean that regard would need to be had to their health and well-being were the approval and allocations of their aged care provider to be cancelled. Arguably, that would cover not only alternate arrangements to be made for them by another approved provider of aged care but the arrangements to transfer them._

21. If that were to be the correct interpretation of the Act and the discretion inherent in s. 66-1, care would need to be taken to ensure that consideration were not given to the manner in which the transfer actually took place or to the aged care that was actually provided by the approved provider to whom the recipients of aged care were transferred following a cancellation of approval or of allocations. That follows from the fact that the Tribunal is reviewing a cancellation decision. In doing so, its role is to consider whether the Secretary's decision was the correct or preferable decision at the time it was made (see Freeman v Secretary, Department of Social Security [1988] FCA 294; (1988) 87 ALR 506 at 509-510, Davies J). It is entitled to take into account all of the facts proved before it but the issue it must consider remains the same. Its role is not to consider whether, with hindsight, the actions taken to implement the Secretary's decision were appropriate. At all times, the Tribunal's role is limited to a consideration of whether the decision made by a delegate of the Secretary on 5 March, 2000 was the correct or preferable decision.

22. In the absence of hearing comprehensive submissions by both parties, I am reluctant to come to any final conclusion regarding the interpretation of the Act in general or of s. 66-1 in particular. I do not need to do so, however, to form a view regarding the documents sought by Riverside."

48. The difference between Re Riverside Nursing Care Pty Ltd and Secretary, Department of Health and Aged Care and this relates to the nature of the documents sought. In the earlier case, the documents sought documents related to events concerned with the actual transfer of those patients. This is a different case. Certainly, some of the documents that are sought relate, broadly speaking, to communications between the Department and other approved providers regarding Marnotta, Marnotta Pty Ltd and Tangerine Lodge. They are sought up to the time that the residents were moved from Tangerine Lodge and so cannot relate to their care after that date. It is feasible that they are concerned with canvassing arrangements that might be put in place were the sanction decisions to be made. Such arrangements may be relevant to whether the decision to impose a sanction should be made. It is a discretionary decision even when the Secretary has formed the view that there is an immediate risk to the safety, health or well-being of care recipients to whom an approved provider is providing care. It may also be relevant to speak to creditors in deciding whether or not to impose a sanction. Knowledge of whether creditors are or are not intending to require payment of amounts owed to them may also be relevant to whether or not sanctions are imposed. It may, for example, influence a decision whether or not to cancel an approval or allocation or to impose a different sanction that requires expenditure by the approved provider. The documents sought may, therefore, be relevant to the review of the decisions in this matter.

Mr Gray submitted that the category is too large for the potential class of creditors of Marnotta is very large and would, potentially, include its trade creditors. As I understand paragraph (e), though, discovery is limited to four creditors and people associated with those creditors. It does not include Marnotta's trade creditors and is a defined class. Given that the documents relate to a fixed seven month period and that all must relate to Tangerine Lodge, Marnotta Pty Ltd and Marnotta, I am satisfied that their discovery would not be "seriously and unfairly burdensome, prejudicial or damaging" or "productive of serious and unjustified trouble and harassment". That is what is commonly understood by the term "oppressive". Oceanic Sun Line Special Shipping Co Inc. v Fay [1988] HCA 32; (1988) 62 ALJR 389 at 411 per Deane J; [1988] HCA 32; 79 ALR 9 at 45.

As the documents sought would all have been documents that were in the possession or under the control of the Secretary at the time that the documents were prepared under s. 37 of the AAT Act, I consider that it is appropriate to order that they be ordered to be lodged pursuant to s. 37(2) rather than s. 33(2A).

51. Division 86 of the Act limits the use that may be made of "protected information". "Protected information" includes "personal information" which is in turn defined as "... information or an opinion ... whether true or not, ... about an individual whose identity is apparent, or can reasonably be ascertained, from the information or opinion" (Schedule 1, cl. 1). It is arguable that its disclosure to the Tribunal is permitted under s. 86-8 as it is required for the purposes of the Act but it is not clear at this stage of the proceedings that it will be required. In view of that, I have concluded that it would not be appropriate for protected information to be disclosed in the documents lodged pursuant to the direction. If the documents cannot be properly understood or placed in their proper context without disclosure of the protected information, consideration can be given to permitting limited disclosure.

52. Ms Brophy submitted that the respondent should be required to submit an affidavit of documents as occurs under the Rules of Court in Victoria. The requirements of those Rules are stated more fully than is to be found in Order 15 Rule 2 of the Federal Court Rules. An example of those requirements appears in the Magistrates' Court Civil Procedure Rules 1999, Version No. 021 (Victoria). Rule 11.04 specifies that:

"An affidavit of documents for the purpose of making discovery of documents must be in Form 11B and must--

(a) identify the documents which are or have been in the possession of the party making the affidavit;

(b) enumerate the documents in convenient order and describe each document or, in the case of a group of documents of the same nature, describe the group, sufficiently to enable the document or group to be identified;

(c) distinguish those documents which are in possession of the party making the affidavit from those that have been but are no longer in the party's possession, and as to any document which has been but is no longer in the possession of the party, state when the party parted with the document and the party's belief as to what has become of it;

(d) if the party making the affidavit claims that any document in the party's possession is privileged from production, state sufficiently the grounds of the privilege."

"Discovery" is defined in part to include making an affidavit of documents complying with the requirements of Rule 11.04, filing the affidavit and serving a copy on the other parties (Rule 1.10(1)).

53. Ms Brophy's submission was made against a background of what is regarded by Marnotta as inadequate disclosure of documents in the past. Having regard to Ms Thomson's affidavit and to the nature of the documents disclosed in the past and the time at which they were disclosed, I do not think that it would be fair to impose the additional burden of preparing an affidavit of documents on the Secretary at this stage. If disclosure proves to be inadequate in the future, this is a decision that may be revisited.

54. For the reasons I have given and noting that I am of the opinion that the documents described below may be relevant to the review of the respondent's decision dated 19 September, 2003 and confirming decisions dated 27 May, 2003 and 5 June, 2003 respectively, I:

direct that, on or before 20 August, 2004, the respondent delete all protected information within the meaning of Division 86 of the Aged Care Act 1997 from, and lodge with the Tribunal and serve on the applicant, the following documents: