Crowley v Holmes

Regulation 11 of the Health Insurance (Professional Services Review) Regulations 1999 made pursuant to sub‑s (3) provides in part:

"the following circumstances are declared as constituting exceptional circumstances: (a) an unusual occurrence causing an unusual level of need for professional attendances; (b) the absence of other medical services, for patients of the person under review during the relevant period, having regard to: (i) the location of the practice of the person under review; and (ii) characteristics of the patients of the person under review."

The circumstances that constitute exceptional circumstances for the purposes of s 106KA(2) are not limited to those prescribed by the Regulations: s 106KA(5).

6 The two factors set out above are clearly appropriate to be considered by the Committee in the context of exceptional circumstances. The scheme of the relevant provisions makes clear that the matters the subject of these two factors are not things the Commission is bound to take into account in deciding whether to make a referral. The applicant has not satisfied me that a serious question exists as to these factors. 7 The third relevant factor said not to have been taken into account is whether, in all the circumstances, the applicant's conduct would be considered unacceptable to the general body of general practitioners. It was common ground that this complaint was intended to raise the question whether the Commission, having satisfied itself that the services rendered by the applicant constituted a prescribed pattern of services, considered itself bound thereby to make an investigative referral. It was submitted that the Commission had repeated the error it made in Kelly v Daniel [2004] FCAFC 14. 8 In Kelly v Daniel at [81] the Full Court said: "We consider that the primary judge correctly held that the Commission is not entitled to make an investigative referral decision by reference to s 106KA(1) alone. That subsection is directed to the Committee, and not to the Commission. To the extent that the Commission may have regard to patterns of services in determining whether to make an investigative referral, that is but one of a number of matters that it may take into account. In our opinion the fact that Dr Daniel's conduct had already been the subject of counselling and review by the Commission, and that no action had been taken to refer his case to the Director as a consequence, was plainly relevant to the exercise of the Commission's discretion under s 86 to make an investigative referral. The Commission obviously did not take that matter into account. It instead proceeded upon the erroneous assumption that merely because there appeared to have been a breach of the 80/20 rule, it was required to make an investigative referral." 9 In Freeman v Health Insurance Commission [2004] FCA 453 North J, who was a member of the Full Court in Kelly v Daniel, underlined what was and was not decided in that case. After quoting the passage set out above, his Honour said: "The issue fatal to validity in Daniel was the failure of the Commission to take into account a relevant consideration, namely the fact that, apparently unknown to officers of the Commission responsible for making the referral, Dr Daniel's conduct had already been considered and the issues resolved between other officers of the Commission and Dr Daniel. In order to rely on Daniel in this case, the applicant must point to some error of law in the decision to make the investigative referral. It is not enough that the Commission had regard only to the conduct falling within the 80/20 rule, unless, in so doing, the Commission failed to have regard to some other relevant matter, or made some other identified error of law. The applicant has not referred to any such relevant matter or error of law. Consequently, the decision in Daniel is of no assistance to the applicant in this case." 10 In the present case the applicant has relied on other matters that it contends are "relevant factors" that were not taken into account. As appears from what I already said, the first two do not qualify as such. As to the third, I do not accept that the Commission failed to consider whether the applicant's conduct would be considered unacceptable to the general body of general practitioners. The phrase "inappropriate practice" is defined in s 82(1)(a) as conduct in connection with rendering or initiating services such that a Committee could reasonably conclude that the conduct would be unacceptable to the general body of general practitioners. By using the defined expression, without reciting the verbiage of the definition itself, the Commission is not to be taken not to have considered whether the conduct in question would be unacceptable as aforesaid. It is clear from the referral that the Commission understood the expression "inappropriate conduct" in its defined sense. It referred to "inappropriate practice as defined in section 82 of the Act". I am not satisfied that the complaint about this third "relevant factor" gives rise to a serious question. 11 A related complaint is expressed as follows: "the Commission did not look at or consider any issue or circumstance relating to the Applicant or his conduct, beyond those raised by s 106KA of the Act and Part 3 of the Health Insurance (Professional Services Review) Regulations 1999 ('the 80/20 Rule')."

As was said in Freeman, it is not enough to show error of law that the Commission had regard only to the conduct falling within the 80/20 rule. This complaint does not raise a serious question.

12 The applicant also attacks the decision of the Director to set up the Committee and make Adjudicative Referral No 296 to that Committee. The first ground is that the Director did not consider any issue or circumstance relating to the applicant or his conduct beyond those raised by the 80/20 rule. This ground is disposed of by what I have said in [11]. Further, the facts do not support it. The Director plainly had regard to the matters contained in the applicant's submission of 24 December 2001, which went beyond the 80/20 rule. 13 The second ground is that: "the Director failed to consider whether, in all the circumstances, including those [relied on in attacking the Commission's decision] and those referred to in the Applicant's written Submissions, it would be appropriate to enter into a written agreement pursuant to s 92 of the Act with the applicant …."

There is no evidence that the Director failed to consider the possibility of a s 92 agreement. His letter to the applicant of 4 June 2001 lists the options available to him, including entering into such an agreement. Accordingly the possibility of an agreement was plainly in his mind. Section 92 makes clear that an agreement can only be entered into if the practitioner acknowledges that his or her conduct constitutes inappropriate practice, and agrees that "specified action" falling within sub‑s (2) is to take effect. The applicant made no such acknowledgment or agreement in his written submission. Nor did he ask that a s 92 agreement be made. His very generally expressed hope, in his submission of 24 December 2001, "that some resolution to the HIC concerns can be made", does not amount to a request that the Director pursue the agreement option. In the circumstances, the Director was under no obligation further to consider whether a s 92 agreement would be appropriate. I do not consider that this ground gives rise to a serious question.

14 The balance of convenience is not decisive either way. While resources, including those of the applicant, will be wasted if the hearing goes ahead and the applicant is ultimately successful in the application, and the hearing and its outcome may cause some embarrassment to the applicant, there are other considerations. The principal one is that it is apparent from the material before me, especially the applicant's submission to the Director, that his is an "exceptional circumstances" case. It is prima facie a viable case. If what he has said, and what has been said on his behalf before me, is accepted, it will result in a finding by the Committee that his conduct did not constitute inappropriate practice. See s 106KA(2). There are other subsidiary matters to go into the balance. First, the conduct in question took place in 2000, and there is a public interest in conduct that took place so long ago being investigated without further delay. Secondly, considerable inconvenience will result from a last minute cancellation of tomorrow's hearing. The Committee members include two rural practitioners, selected because of their awareness of the problems and special circumstances of country practice. They have doubtless made their travel plans. Thirdly, because Committee members are busy practitioners, it is difficult to find dates when they are all available. The public interest again points against impeding the regular administration of the Committee system. Finally, the relevant factors argument could have been raised in the earlier proceedings commenced by the applicant in May 2002. It is true that Daniel v Health Insurance Commission [2003] FCA 772 had not then been decided. But the failure to take a relevant consideration into account is a well settled ground of review, and did not spring into existence as a result of Daniel. I am not deciding that the Anshun principle applies here so as to disable the applicant from now raising the relevant consideration grounds. That is the subject of the respondents' motion, with which I am not dealing. What I am saying is that those grounds could have been raised in the earlier proceeding, and had they been, this further proceeding and the delay incident thereon could have been avoided. 15 The application for interlocutory relief is dismissed. The applicant must pay the respondents' costs of the application. The respondents' motion notice of which was filed on 22 April 2004 is adjourned to a date to be fixed after consultation with the associate to the docket judge. I certify that the preceding fifteen (15) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Sundberg.

Counsel for the Applicant: J Bleechmore and I Hayden

Counsel for the Respondents: F Hampel QC and SJ Moloney