Guild Insurance Limited v Chief Executive Medicare

1. INTRODUCTION 1 The applicant, Guild Insurance Limited (the Insurer), specialises in providing insurance for allied health care professionals, including to individual practitioners and their practice companies. The respondent, the Chief Executive Medicare (Medicare), is responsible for the general administration of the Medical Indemnity Act 2002 (Cth) (the Act), including the high cost claim indemnity scheme (HCCS) established by Div 2 of Part 2 of the Act. Through the HCCS, the Commonwealth meets part of the cost of large settlements or awards paid by organisations such as the Insurer which indemnify medical practitioners, by paying a high cost claim indemnity where certain statutory criteria are met. 2 The Insurer seeks judicial review of two decisions by a delegate of the respondent under the Act. In each case, the Insurer submitted an application for payments by the Commonwealth of high cost claim indemnities under the HCCS. The first application was for payment of a high cost indemnity under s 30(1) of the Act with respect to the sum paid in settlement of a claim for damages allegedly made "against" Ms Suzanne Jarschke who was a registered chiropractor employed by Wellspring Chiropractic Centre Pty Ltd in Queensland. The second application was for a like payment with respect to the settlement of a claim for damages allegedly made "against" Ms Clare Buckley who was employed as a registered occupational therapist by Kinnect Pty Ltd also in Queensland. The Jarschke application was rejected by the delegate by letter dated 27 February 2019 and the Buckley application, by letter dated 29 November 2018 (the Jarschke and Buckley decisions respectively). The challenge to both decisions turns upon the proper construction of s 30(1) of the Act which provides that a high cost claim indemnity is payable to an insurer where, among other criteria, "a claim is made against a person (the practitioner)" for the purposes of s 30(1)(a). 3 The originating application seeks relief under the Administrative Decisions (Judicial Review) Act 1977 (Cth) (ADJR Act) and further or in the alternative, under s 39B of the Judiciary Act 1903 (Cth) (Judiciary Act). The applicant also sought an extension of time under s 11(1) of the ADJR Act with respect to the application insofar as it challenged the Buckley decision. An order was made by consent granting the extension of time. 4 For the reasons set out below, the Insurer has not established that the delegate erred in the Jarschke decision in finding that no claim was made against Ms Jarschke for the purposes of s 30(1)(a) in circumstances where she was not a party to legal proceedings against her employer settled by a Deed of Release to which she was not a signatory. Nor did the pre-action notice issued directly to Ms Buckley under s 9A of the Personal Injuries Proceedings Act 2002 (Qld) (the PIP Act) constitute a claim against her for the purposes of s 30(1)(a). It follows that, as Ms Buckley was also not a party to the legal proceedings against her employer the subject of a settlement agreement, the error made by the delegate in her understanding and application of s 30(2) of the Act (and conceded by Medicare) was not material because the application for judicial review of the Buckley decision could not succeed in any event. 5 Finally, I note that this matter was originally listed for hearing on 17 March 2020 but was adjourned by consent on 16 March 2020 due to the COVID-19 pandemic.

2. EVIDENCE 6 The parties were in agreement as to the relevant facts which were set out in a Statement of Agreed Facts (Ex A1) (SAF), to which the relevant documents were annexed. I note that the SAF was amended so as to omit those paragraphs and documents relating to six other decisions which were originally challenged on the basis that the respondent's delegate had erred in her or his construction of s 30(2)(b) of the Act (the s 30(2)(b) decisions). However orders were made by consent on 30 October 2019 quashing the s 30(2)(b) decisions and writs of mandamus were issued requiring Medicare to determine the applications in question according to law: see below at [62] and [72]. Those paragraphs which remain relevant and were received in evidence were paragraphs 1 to 24 and 111 to 125 of the SAF with their associated annexures. 7 The applicant also relied upon the affidavit of Mr Rhett Clayton, National Liability Claims Manager for the Insurer, affirmed on 27 March 2019, together with exhibits 1 to 5, 21 to 23 and 29 to his affidavit (Exhibit A3). In addition a letter dated 11 April 2014 from Rees R & Sydney Jones Solicitors dated 11 April 2014 to Ms Buckley enclosing an "Initial Notice - Section 9A of the Personal Injuries Proceedings Act 2002" was received as exhibit A2. Aside from tendering Form 2 - Notice of Claim under the PIP Act (Exhibit R1) in relation to the Buckley decision, Medicare did not seek to rely upon any additional evidence.

3. BACKGROUND 8 The facts set out below pertaining to the two decisions have been drawn from the SAF, save where otherwise indicated.

3.1 Facts pertaining to the Jarschke decision 9 In 2012 and 2013, Wellspring Chiropractic Centre Pty Ltd, trading as Wellspring Chiropractic (Wellspring), carried on the business of providing chiropractic health services in Queensland. Ms Jarschke worked as a registered chiropractor for Wellspring and was the sole director of Wellspring. 10 The Insurer and Ms Jarschke entered into an insurance contract comprising the Guild Chiropractors Insurance Policy and Schedule for policy number 44/40CHR0219007 for a period of insurance from 4 March 2013 to 4 March 2014 (Jarschke Insurance Policy) (Annexure A to the SAF). Under the Jarschke Insurance Policy, the Applicant agreed to provide chiropractors' liabilities insurance to Ms Jarschke and any corporation having an interest in her liabilities on a "claims made" basis (SAF at [7]). It was also agreed that Wellspring had an interest in the liabilities of Ms Jarschke (SAF at [8]). The schedule set out the details of Ms Jarschke's cover under the policy. 11 In the Schedule to the Jarschke Insurance Policy: (1) Ms Jarschke was named as "The Insured"; (2) insurance coverage under "Section 9 - Chiropractors' Liabilities" was selected; and (3) 31 December 1985 was the "Retroactive Date". 12 Section 9 in turn contained the following relevant definitions: You or Your The person or persons named in the Schedule; The firm or incorporated body or unincorporated body named in the Schedule; Any corporation … having an interest in the liabilities of the party or parties named in the preceding sub-clauses 1 or 2 … Chiropractic Practice The professional work or practice of a registered chiropractor. Professional Duty as a Chiropractor The professional duty owed by You in the course of providing those services, including the provision of information and advice, which You are empowered to provide by virtue of registration as a chiropractor under the terms of the Chiropractors Registration Act or other similar legislation in the relevant state or territory of Australia. Claim A demand or assertion of a right to compensation by reason of an actual or alleged breach of duty arising out of any act, error, omission or conduct and which is defined in legal proceedings instituted and served upon You. 13 The operative part of cl 9 of the Jarschke Insurance Policy relevantly provided that: We will to the extent provided for in this Section and limited to the Sum Insured shown in the Schedule provide cover for: Claims Made Any Claim including all legal costs and expenses for which You become legally liable in respect of the Cover provided under this Section being a Claim: i. Made against You during the Period of Cover shown in the Schedule; and ii. Immediately notified to Us in writing by You during the Period of Cover; and iii. Arising out of any act, error, omission or conduct which occurred after the Retroactive Date. What is Covered We will Cover You for Your civil liability: A. Breach of Professional Duty as a Chiropractor: Arising from any Breach of Professional Duty as a Chiropractor by reason of any actual or alleged act, error, omission or conduct committed by: 1. You; or 2. Your employees and any persons for whom You are vicariously liable in the conduct of The Practice at the Practice Premises; 14 In October 2013, Ms Jodey Imhoff made a claim for damages for personal injuries as a result of chiropractic treatment provided to her at Wellspring in 2012 and Ms Jarschke notified the Insurer of the claim (SAF at [11]-[12]). Subsequently in December 2013, the Insurer advised Ms Jarschke that it would provide indemnity in respect of Ms Imhoff's claim on the terms and conditions of the Jarschke Insurance Policy (SAF at [13]). 15 On 26 May 2016, Ms Imhoff filed a statement of claim (Imhoff SOC) in the Supreme Court of Queensland against Wellspring as the sole defendant (annexure B to the SAF). In the statement of claim, Ms Imhoff claimed that: (1) Ms Jarschke in her capacity as an employee of Wellspring provided the chiropractic health services to the plaintiff (Imhoff SOC at [7]); (2) Ms Jarschke owed the plaintiff a duty of care arising out of: the contract between the plaintiff and Wellspring; the fact that Ms Jarschke held herself out as a skilled and qualified person to provide the services under the contract; and the relationship between the plaintiff as patient, Wellspring as the provider of the services, and Ms Jarschke as employee (Imhoff SOC at [8]); (3) Wellspring was vicariously liable for the loss and damage caused by Ms Jarschke to the plaintiff in the course of Ms Jarschke's employment with Wellspring (Imhoff SOC at [9]); (4) as a result of Ms Jarschke forcefully manipulating the plaintiff's lumbar spine using a high force rotary manipulative technique the plaintiff suffered an injury to her lumbar spine (Imhoff SOC at [10]-[11]). 16 As a result, the plaintiff claimed damages for (1) negligence or breach of duty of Wellspring; (2) negligence or breach of duty of Ms Jarschke in the course of her employment for which Wellspring was vicariously liable; (3) breach of contract by Wellspring, (4) assault and battery by Wellspring; and (5) assault and battery by Ms Jarschke for which the defendant was vicariously liable. 17 The claim was settled by a deed of release dated 5 October 2017 to which Ms Imhoff, Ms Jarschke and Wellspring and an entity related to Wellspring were party (Annexure C to the SAF). In accordance with the deed of release, the Insurer paid $450,000 to Ms Imhoff in relation to her claim in November 2017. 18 By letter dated 2 May 2018, the Insurer submitted a HCCS medical indemnity payment application to Medicare in respect of the claim allegedly made against Ms Jarschke by Ms Imhoff (SAF at [17]). The Insurer provided Medicare with copies of the Imhoff SOC, the deed of release, documents confirming the payment made by the Insurer in relation to Ms Imhoff's claim, and a copy of the Jarschke Insurance Policy (SAF at [18]). Subsequently in response to various requests for information by Medicare, the Insurer submitted a number of new payment applications. 19 In response to a request by Medicare under s 38 of the Act for supporting evidence that a claim was made against Ms Jarschke, the Insurer stated in a letter dated 30 January 2019 that: The statement of claim makes numerous references to Suzanne Jarschke as the duly registered health practitioner who owed the Plaintiff a duty of care and who was the chiropractor responsible for providing the chiropractic health services that were subject of the claim. 20 By letter dated 27 February 2019, the delegate advised the Insurer that she had determined that a high cost claim indemnity was not payable under the Act. In the decision letter, the delegate explained that: After considering all the information provided in relation to this application, I note that the Statement of Claim lists the Chiropractic Centre as the sole defendant in the claim. The apportionment advice from Mr Hourigan does not indicate how, or when, a claim was made against Ms Jarschke. The Deed of Release refers to a claim having been made against Ms Jarschke and similarly there are references to a claim having been made against Ms Jarschke in the correspondence from Meridian Lawyers. However, no evidence has been presented of a specific claim against Ms Jarschke.

3.2 Facts pertaining to the Buckley decision 21 Kinnect Pty Ltd (Kinnect) operated an occupational rehabilitation business in Queensland in 2013 and 2014 and employed Ms Buckley as a registered occupational therapist (SAF at [111]-[112]). 22 Kinnect entered into an insurance contract with the Insurer under which the Insurer agreed to provide insurance on a "claims made" basis (SAF at [113]). The insurance contract was comprised of the Guild Professional Indemnity Insurance Policy and Schedule for policy number 44/40PID0393670, with a period of insurance from 30 September 2013 to 30 September 2014 (Kinnect Insurance Policy) (Annexure R to the SAF). The Schedule to the policy set out the details of Kinnect's cover under the policy. 23 In the Schedule to the Kinnect Insurance Policy: (1) Kinnect Pty Ltd was stated as the "Insured"; (2) insurance coverage under "Professional Liability" was selected; and (3) 1 July 2005 was the "Retroactive Date". 24 The Kinnect Insurance Policy contained a number of relevant definitions, namely: Business means the business described in the Schedule and conducted by You. Claim means a demand or assertion of a right to compensation for Your civil liability arising out of any act, error, omission or conduct in relation to the Business and which is in writing or otherwise or is defined in legal proceedings served on You. … For the purposes of the conditions applying to this Section, Claim will be deemed to include any threat or intimation of a Claim in writing or otherwise or any other circumstances which may give rise to a Claim. Employee means any natural person who is employed by the Business in the ordinary course of the operation of the Business and whom the Business compensates by way of salary or wages and has the right to govern and direct the performance of that person's duties.... Insured means the person(s), entities or corporation(s) named in the Schedule whom We have agreed to insure. Professional Duty means the professional duty owed by You or Your Employee(s) in the course of providing in connection with the Business those services, including the provision of information and advice which You are suitably qualified to provide. You, Your, Yours means the … incorporated body… named in the Schedule as the Insured and any person who, at any time during the Period of Cover for which this Policy is in force, becomes … an Employee … but only in so far as the interests of any of the above are Covered by this Policy: … Provided that i. Where You are comprised of more than one person, entity or corporation, the term You will be considered as applying to each person, entity or corporation in the same manner as though a separate policy had been issued to each; ii. Our liability to make any payments under this Policy will apply as though there were not separate policies issued to each person, entity or corporation. … for any Claim arising out of the Business. 25 The operative part of the policy explaining what is covered relevantly stated that: Professional Indemnity What is Covered - Claims made during the Period of Cover We will Cover You in accordance with 1. Breach of Professional Duty, … for Your civil liability arising from the Business, including Defence Costs … 1. Breach of Professional Duty We will Cover Your civil liability for any Claim against You, including Defence Costs, as a result of a breach of Your Professional Duty: … 26 On 11 April 2014, Mr Russell Batley made a claim for damages for personal injuries as a result of treatment he had received from Ms Clare Buckley in her employment and practice as an occupational therapist with Kinnect Pty Ltd in May 2013 (SAF at [116]). The Insurer was notified of the claim on the same day (ibid). 27 On 22 April 2016, Mr Batley filed a statement of claim in the Supreme Court of Queensland against Kinnect Pty Ltd as the Third Defendant (SAF at [118]). While a copy of the statement of claim was not annexed to the statement of agreed facts, it was exhibited to Mr Clayton's affidavit at p. 929. The statement of claim (Batley SOC) alleged that: (1) Kinnect operated an occupational rehabilitation business in Queensland and employed Ms Buckley as an occupational therapist (Batley SOC at [4]-5]); (2) Ms Buckley carried out a functional capacity and vocational assessment of the plaintiff at the business premises of Kinnect during the course of which the plaintiff sustained an injury (Batley SOC at [15]); and (3) Kinnect was in breach of the duty of care owed to the plaintiff by reason among other things of Ms Buckley's failure to conduct the assessment safely and was vicariously liable for Ms Buckley's negligent acts and omissions (Batley SOC at [16]-[18]). 28 While there was no express pleading in the statement of claim that Ms Buckley owed a duty of care to the plaintiff, it was common ground that this allegation implicitly underlay the claim of vicarious liability against Kinnect. 29 Mr Batley, Kinnect and other defendants settled Mr Batley's claim by deed of release dated 22 September 2017 (Annexure S to the SAF). In contrast to the position with respect to Ms Jarschke, Ms Buckley was not a party to the deed of release. In November 2017, in accordance with the deed of release, the Insurer paid Mr Batley $300,000 in settlement of his claim (SAF at [121]). 30 By letter dated 8 May 2018, the Insurer submitted a HCCS medical indemnity payment application to Medicare in respect of Mr Batley's claim. The Insurer provided Medicare with copies of the statement of claim, the defence, the deed of release, documents confirming the payment made by the Insurer in relation to Mr Batley's claim and the Kinnect Insurance Policy. A new payment application and further information were provided by letter dated 11 October 2018 in response to a request by Medicare under s 38 of the Act. 31 By letter dated 29 November 2018, the delegate advised the Insurer that a high cost claim indemnity was not payable under the Act. In the decision letter, the delegate explained her reasons as follows: During reassessment of the claim, it was noted that the application is related to a claim against Kinnect Pty Ltd being vicariously liable for the negligence of its employee, Clare Buckley. … The relevant insurance policy in this matter is between Guild Insurance and Kinnect Pty Ltd. The insurance policy is not an indemnity arrangement between Guild Insurance and a Practitioner for the purpose of the HCCS. Given the above, I do not consider that this application meets the requirements of a 'qualifying payment' under section 30(2) of the Act. Therefore, I have determined that payment is not payable under HCCS in relation to the application, as the application does not meet the requirements of section 30 of the Act. 32 As such, the delegate rejected the Insurer's application in this decision on the ground that there was no "no insurance contract or other indemnity arrangement between … the insurer and the practitioner" for the purposes of s 30(2)(b) of the Act and, therefore, the insurer had not made a "qualifying payment" in relation to the claim so as to satisfy the criterion for payment under s 30(1)(e).

4.1 Relevant principles of statutory construction 33 As the applicant submits, the relevant principles of statutory construction are well-established. In Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 335 (Project Blue Sky), McHugh, Gummow, Kirby and Hayne JJ explained that: 69. The primary object of statutory construction is to construe the relevant provision so that it is consistent with the language and purpose of all the provisions of the statute. The meaning of the provision must be determined "by reference to the language of the instrument viewed as a whole". In Commissioner for Railways (NSW) v Agalianos [(1955) 92 CLR 390 at 397], Dixon CJ pointed out that "the context, the general purpose and policy of a provision and its consistency and fairness are surer guides to its meaning than the logic with which it is constructed". Thus, the process of construction must always begin by examining the context of the provision that is being construed. 34 The emphasis upon context coupled with the text of the statute as the starting point in any process of statutory construction was recently emphasised by Kiefel CJ, Nettle and Gordon JJ in SZTAL v Minister for Immigration and Border Protection [2017] HCA 34; (2017) 262 CLR 362 (SZTAL) in the following passage: 14. The starting point for the ascertainment of the meaning of a statutory provision is the text of the statute whilst, at the same time, regard is had to its context and purpose [citing Project Blue Sky with approval]. Context should be regarded at this first stage and not at some later stage and it should be regarded in its widest sense. This is not to deny the importance of the natural and ordinary meaning of a word, namely how it is ordinarily understood in discourse, to the process of construction. Considerations of context and purpose simply recognise that, understood in its statutory, historical or other context, some other meaning of a word may be suggested, and so too, if its ordinary meaning is not consistent with the statutory purpose, that meaning must be rejected. 35 Context "in its widest sense", as referred to in this passage, includes "such things as the existing state of the law and the mischief which … one may discern the statute was intended to remedy" CIC Insurance Ltd v Bankstown Football Club Ltd [1997] HCA 2; (1997) 187 CLR 384 at 408 (Brennan CJ, Dawson, Toohey and Gummow JJ) (cited with approval in SZTAL at [14]). However, as Hayne, Heydon, Crennan and Kiefel JJ cautioned in Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (Northern Territory) [2009] HCA 41; (2009) 239 CLR 27 (Alcan) at [47] "[h]istorical considerations and extrinsic materials cannot be relied on to displace the clear meaning of the text. The language which has actually been employed in the text of legislation is the surest guide to legislative intention" (emphasis added). 36 This approach has been held to respect the proper limits of judicial power and considerations of fairness, being "dictated by elementary considerations of fairness, for, after all, those who are subject to the law's commands are entitled to conduct themselves on the basis that those commands have meaning and effect according to ordinary grammar and usage": Corporate Affairs Commission (NSW) v Yuill [1991] HCA 28; (1991) 172 CLR 319 at 340 (Gaudron J) (emphasis added) (cited with approval in Alcan at [4] (French CJ)).

4.2 Relevant statutory provisions 37 As mentioned earlier, the Chief Executive Medicare is responsible for the general administration of the Act including the HCCS (s 75 of the Act; SAF at [2]). The HCCS was enacted in 2002 and was designed to "make the medical indemnity market more sustainable and provide affordable medical indemnity coverage for doctors" in the context of rising medical indemnity insurance premiums: Second Reading Speech for the Medical Indemnity Bill 2002, Parliamentary Debates, House of Representatives, 13 November 2002, 8857: see also s 3 of the Act (quoted below at [51]). Under this scheme, the Commonwealth reimburses organisations indemnifying medical practitioners 50% of the cost of payouts greater than a threshold amount. 38 As earlier mentioned, the critical provision in issue is s 30(1) of the Act and in particular, the meaning of the word "claims" in s 30(1)(a) in the context of legal proceedings. Subsections (a) to (g) of s 30(1) specify seven criteria for the payment of a high cost claim indemnity, all of which must be met before the Commonwealth's liability to make a payment is triggered. Furthermore, all of the criteria are properly characterised as objective jurisdictional facts, that is, none turn upon the decision-maker reaching a state of satisfaction: cf Minister for Immigration and Ethnic Affairs v Wu Shan Liang [1996] HCA 6; (1996) 185 CLR 259 at 274-275 (Brennan CJ, Toohey, McHugh and Gummow JJ). These propositions were not in dispute between the parties. 39 Relevantly, s 30(1) provides that: (1) Subject to section 31, a high cost claim indemnity is payable to an MDO or insurer under this section if: (a) a claim is, or was, made against a person (the practitioner); and (b) the claim relates to: (i) an incident that occurs or occurred; or (ii) a series of related incidents that occur or occurred; in the course of, or in connection with, the practice by the practitioner of a medical profession, other than practise as an eligible midwife; … 40 It is apparent from the text of s 30(1) and again was not in issue, that the reference to "a person" in s 30(1)(a) of the Act is a reference to an individual "practitioner", as opposed to a medical practice which might employ them. First, this construction accords with the ordinary meaning of practitioner. For example, the Macquarie Dictionary (Online Edition) relevantly defines "practitioner" as "1. Someone engaged in the practice of a profession or the like" (emphasis added). The Oxford English Dictionary (Online Edition) also relevantly defines the word as meaning a class of natural persons, namely, "[a] person engaged in the practice of medicine; a physician, surgeon, pharmacist etc" (emphasis added). Secondly, it is evident from the concluding phrase of s 30(1)(b) that "the practitioner" referred in subs (a) must be engaged in "the practice … of a medical profession". The term "medical profession" is defined in s 4(1) to include "a health care related vocation" which, in turn, is defined in s 4(1) to mean "a health care related vocation in relation to which there is at least one State or Territory under the law of which a person must be registered in order to practise" (emphasis added). While, as Medicare submits, specific provisions of State and Territory laws for the registration of health practitioners could not properly be used to construe the Commonwealth Act, importantly for present purposes the ordinary meaning of the words "practise" and "vocation" strongly suggest that only a natural person could "practise" a "health care related vocation". It follows that s 30(1) demonstrates a contrary legislative intention sufficient to displace the operation of s 2C of the Acts Interpretation Act 1901 (Cth) (AIA) that reference to person includes a body corporate: see s 2, AIA. 41 In turn, the word "claim" is defined in s 4(1) of the Act as follows: claim: (a) means a claim or demand of any kind (whether or not involving legal proceedings); and (b) includes proceedings of any kind including: (i) proceedings before an administrative tribunal or of an administrative nature; and (ii) disciplinary proceedings (including disciplinary proceedings conducted by or on behalf of a professional body); and (iii) an inquiry or investigation; and claim against a person includes an inquiry into, or an investigation of, the person's conduct. (emphasis added) 42 As counsel for Medicare, Mr S Lloyd SC, emphasised, it is important to bear in mind that the term "claim" is defined for a multitude of purposes throughout the Act including for example in the context of claims by patients against medical practitioners and by medical practitioners against insurers. As such, it is not a definition specifically crafted for the purposes of s 30 and not all aspects of the definition will be relevant in every context. For example, the reference to "an inquiry or investigation" would refer, for example, to a claim by a medical practitioner for the costs of defending an internal inquiry into her or his conduct with respect to a number of different patients. However, that aspect of the definition has no relevance when used in the context of litigation against a medical practitioner.

4.3 Did the delegate err in making the Jarschke decision? 43 The primary question raised with respect to the Jarschke decision is whether the reference to a "claim… made against a person (the practitioner)" in s 30(1)(a) embraces a claim for damages in legal proceedings against an individual practitioner's employer where the claim arises out of the practitioner's breach of duty or other act or omission but the practitioner is not a party. In other words, does s 30(1)(a) extend to claims in the litigation context where the employer is sought to be held vicariously liable for the practitioner's alleged breaches of duty, but no remedy is sought directly against the practitioner? 44 The Insurer contends that the term "claim" "is defined very broadly in the Act. It includes 'a claim or demand of any kind (whether or not involving legal proceedings)'" (Applicant's submissions (AS) at [31]; emphasis in the original). In the Insurer's submission, it suffices that Ms Jarschke is named at paragraph 1(d) of the SOC and that "claims" were made "against her" by reason of the allegations that she owed the plaintiff a duty of care and that Wellspring is vicariously liable for her breach of duty (AS at [32] referring to the SAF at [14] and Annexure B). As the Insurer submitted: … these allegations against Ms Jarschke in the Statement of Claim are "claims" within the meaning of s 4 of the Act. Further, the claims were "made against" Ms Jarschke. They specifically identify Ms Jarschke as the person committing the alleged injurious conduct and as a person owing a duty of care to the plaintiff. (AS at [33]; emphasis added) 45 In short the Insurer submitted that the assertion that Wellspring is vicariously liable in damages has as its foundational premise, the existence of a legal entitlement to damages from Ms Jarschke: Hollis v Vabu Pty Ltd [2001] HCA 44; (2001) 207 CLR 21. This foundational premise is said to be sufficient to bring the allegations against Ms Jarschke within paragraph (a) of the definition of "claim" in s 4(1). 46 Based upon this construction, the Insurer submitted that the delegate incorrectly interpreted and applied s 30(1)(a) of the Act in the Jarschke decision because the delegate considered that there was no claim against Ms Jarschke based upon the fact that she was not a party to the legal proceedings the subject of the settlement deed. 47 I do not agree. Rather, for the reasons set out below, Medicare correctly submitted that the reference to a claim made against the person in s 30(1)(a) of the Act is limited in the litigation context to a claim made against an individual practitioner, that is, a natural person. It follows that insofar as the application for judicial review challenges the Jarschke decision, the application must be dismissed. 48 First, applying the principles explained earlier, the starting point for the construction issue is the text of the definition of "claim" in s 4(1) read in the context of the Act. If the word "against" is given its ordinary and natural meaning in the context of a claim in the form of legal proceedings, a claim is not "against" a person if that person is not a party to the claim and no remedy is sought against them. As Medicare submits, the position is no different merely because a party is said to be liable for the acts or omissions of the non-party. Given that a non-party is not required to participate in the legal proceedings, will not be the subject of orders finally resolving the matter, will not be bound by the final orders, and will not incur a liability as a result of the entry of judgment for the plaintiff if the matter proceeds to trial, it cannot be said that the claim embodied in the legal proceedings is in any meaningful sense against the non-party. The fact that indirect consequences may flow for a non-party is irrelevant. 49 Secondly, the Insurer submits that its interpretation of "claim" is consistent with the context, purpose and policy of the Act for the following reasons: As stated in s 3(2) of the Act, the Commonwealth provides assistance to support access by medical practitioners to arrangements that indemnify them by meeting part of the costs of large settlements or awards paid by organisations that indemnify medical practitioners. The settlement of claims often occur, and are encouraged, prior to the commencement of legal proceedings. There is nothing in the Act that suggests it is directed only to meeting costs of large settlements following the commencement of litigation against a medical practitioner. (AS at [35]) 50 On the other hand, the Insurer submitted that if "claim" were interpreted narrowly in the manner for which Medicare contends, it would limit the kinds of matters for which the Commonwealth would provide support. This in turn would affect the cost of premiums charged by insurers and negatively impact on medical practitioners' access to indemnity arrangements. This result, the Insurer submitted, would defeat the purpose of the Act and therefore should be rejected in line with the principles articulated in Project Blue Sky and the rule of construction in s 15AA of the AIA. 51 However, this construction strains the language of s 30(1)(a) for the reasons I have given. Nor is it supported by the objects in s 3 of the Act. That section relevantly provides that: (1) An object of this Act is to contribute towards the availability of medical services in Australia by providing Commonwealth assistance to support access by medical practitioners to arrangements that indemnify them for claims arising in relation to their practice of their medical professions. (2) The Commonwealth provides that assistance under this Act by: (a) meeting part of the costs of large settlements or awards paid by organisations that indemnify medical practitioners (but only for claims notified on or after 1 January 2003); and (aa) meeting the amounts by which settlements and awards exceed insurance contract limits, if those contract limits meet the Commonwealth's threshold requirements; … (emphasis added) 52 A "medical practitioner" in turn is defined in s 4(1) to mean "a person registered or licensed as a medical practitioner under a State or Territory law that provides for the registration or licensing of medical practitioners." As such, the express objects of the Act relevantly focus upon indemnifying medical practitioners. Contrary to the Insurer's submissions, neither s 3 nor the definition of "medical practitioner" suggest that the Act is intended to support more affordable medical indemnity insurance for corporations employing medical practitioners: see also at [40] above. 53 Thirdly, the Insurer submits that its construction is supported by the fact that the definition of "claim" in s 4(1)(a) of the Act "means a claim or demand of any kind" (emphasis added) (applicant's submissions in reply (AR) at [1]). As such, the Insurer submits that the Act distinguishes between the concept of a claim and that of a demand, and therefore that both concepts must be given "work to do". 54 In this regard, it may readily be accepted, as the Insurer submits, that the concept of a "demand" includes "the assertion of a legal right". For example, the Macquarie Dictionary (2nd Ed) defines demand as including "1. To ask for with authority; claim as a right … 4. to lay formal claim to … 10. a requisition a legal claim". It may also be accepted that a "claim" includes among its meanings, a demand as of right, as well as an assertion of something as a fact. Based upon these propositions, the Insurer submits that: … the reference to "demand" in s 4(a) is to a formal demand for payment, or a formal legal claim (whether by proceedings or otherwise). The ordinary use of the word "claim" would include those matters, but in context it relevantly includes matters not within the meaning of "demand" such as assertions of fact or allegations of fact or relating to legal liability. (AR at [4]) 55 It is true, as the Insurer submits, that a court should strive to give meaning to every word of the provision and therefore "no clause, sentence or word shall prove superfluous, void, or insignificant, if by any other construction they may all be made useful and pertinent": Commonwealth v Baume (1905) 2 CLR 405 at 414 (quoted with approval in Project Blue Sky at [71]). However, this is not a case where a difficulty of this nature arises. The definition of "claim" in s 4(1) is expressly intended to define the word in the context of legal proceedings, as well as outside legal proceedings. That being so, in the context of legal proceedings a plaintiff or applicant is commonly described as instituting or bringing a "claim" but not as instituting or bringing a "demand", while the word "demand" in this context is commonly used to describe a letter or notice of demand preceding the institution of proceedings in the courts. As such, both words have "work to do" without straining the word "claim" in a litigation context to include bare assertions or allegations of fact in a pleading. 56 Fourthly, the Insurer submits that Medicare's construction is unlikely because it would lead to anomalous or random results, based on matters of form as opposed to substance. Specifically, the Insurer submits that: If s.30(1)(a) is construed as contended for by the Respondent, it would produce an unprincipled and haphazard operation of the provision. The Applicant addressed the context and purpose of the Act in chief. The purpose is not to be fulfilled by the Respondent's construction. For example, if that construction is correct, whether s.30(1)(a) is satisfied would depend on the decision made by claimant in legal proceedings or in drafting a letter of demand, whether to sue or direct the demand to the "practitioner" or the corporation which employs her, where the same loss, based on the same allegations would be made irrespective of who is sued or to whom the letter of demand is addressed. Because an employee acting within the scope of their authority will be indemnified by her employer, whether it is the employee or the employer who is sued ordinarily is a matter of form, not substance. Also, on the Respondent's construction, whether s.30(1)(a) is satisfied would also depend on whether a practitioner chooses to provide professional services via a company structure, in circumstances where the same services would be provided whether or not it is done personally or via a company structure. (AR at [8]) 57 The "haphazardness" of the respondent's construction was also said to be illustrated by the facts with respect to the Jarschke decision given that, despite Ms Jarschke not being a party to the legal proceedings, the Deed of Release provided that both Ms Jarschke and Wellspring were responsible for payment of the settlement sum. 58 It cannot be denied that Medicare's construction will in some cases have consequences of the kind to which the Insurer refers. As such, depending upon all of the circumstances, the insurer's entitlement to a partial indemnity under the HCCS may depend upon a plaintiff's individual choice as to whether or not to join the practitioner, as well as the practitioner's employer. However, this does not, in my view, indicate that Medicare's construction is irrational. It was for the Parliament to define the circumstances in which it considered that insurers should be entitled to a partial medical indemnity and, as an aspect of that, to determine the class of persons against whom claims were made who were potentially entitled to a payment under the scheme. Moreover, the Parliament chose to define the criteria in s 30(1) for the partial indemnity in the form of strict rules rather than by reference to discretionary or evaluative considerations which might have afforded greater flexibility to address the kinds of concerns raised by Medicare. There may have been many considerations which underlay Parliament's ultimate choice in these respects, such as budgetary considerations or an assessment of where the need for more affordable medical premiums was most acute. These are not matters on which the Court could or should speculate. However, they indicate that while the result in individual cases may seem anomalous or unfair, it does not follow that Medicare's construction is irrational and therefore unlikely to have been intended. Rather, the language of the Act, which is "the surest guide to legislative intention", makes it clear that the Parliament "drew the line" at providing a partial indemnity to insurers with respect to the claims made against corporate employers of medical practitioners, as opposed to the individual practitioners themselves. 59 Finally at the hearing of the application on 31 July 2020, the Insurer argued for the first time that the Wellspring Deed of Release "itself, and what it records would probably be regarded also as falling within claim under section 30" (T at p. 16.32-35). Senior Counsel for Medicare sought to address the point orally at the hearing despite being taken by surprise. However, it was not, with respect, entirely clear how the Insurer put the contention and whether it was fair to permit the Insurer to raise the point at such a late stage. As a result, a short further hearing was held on 12 August 2020 to address these matters. 60 No issue was taken by Medicare as to the late raising of the issue, given the further hearing. At that hearing the Insurer explained that, in its submission, the Wellspring Deed of Release constituted a claim or demand against Ms Jarschke for the purposes of the Act and was also evidence of a claim against her. In support of this contention, the Insurer emphasised that the Deed of Release recorded that: (1) Ms Imhoff "has made a claim against the Respondents (Claim)", the "Respondents" being identified as both Wellspring Chiropractic and Ms Jarschke (cl 1.1); (2) a claim and statement of claim had been filed in the Supreme Court of Queensland (being defined as the "Proceeding") (cl 1.3); (3) both Wellspring and Ms Jarschke were responsible for payment for the settlement sum "[i]n full and final settlement of the Claim" (cl 2.1 (emphasis added); see also cl 2.3); and (4) both Wellspring and Ms Jarschke were "released and forever discharged from the Claim and the Proceeding" (cl 3.1(a)). 61 Medicare correctly in my view submitted that the Deed of Release was not itself a claim or demand against Ms Jarschke. First, despite being named as a party to the Deed of Release, Ms Jarschke was not a signatory to the Deed. Secondly, the effect of the Deed was to finally resolve Ms Imhoff's claim for damages in the legal proceedings in the Supreme Court to which Ms Jarschke was not a party and against whom no relief was sought, despite the fact that she was described as a "respondent" in the Deed. Thirdly, there was no evidence of any claim otherwise having been made against Ms Jarschke either orally or in writing. In particular, there was no evidence that any notice had been issued against Ms Jarschke under s 9 of the PIP Act, despite it being common ground that such a notice was a necessary precondition to the institution of proceedings for damages for personal injuries. To the contrary, counsel for the Insurer accepted in oral argument that no such notice had been issued against Ms Jarschke. Nor for the same reasons could the Deed be taken to be evidence of the existence of a claim against Ms Jarschke.

4.4 Is the conceded error in the Buckley decision material?

4.4.1 The issues 62 The proper construction of s 30(1)(a) of the Act arises in a different way in the context of the Insurer's challenge to the Buckley decision, as opposed to the Jarschke decision. As earlier mentioned, it is conceded by Medicare that the delegate incorrectly interpreted and applied s 30(2)(b) in the Buckley decision (the conceded error). Specifically, s 30(1)(e) of the Act provides that one of the jurisdictional preconditions for the payment of a high cost claim indemnity to an insurer is that the insurer has a "qualifying payment, or qualifying payments, in relation to the claim". A "qualifying payment", in turn, is established where relevantly "the … insurer pays, or is liable to pay, the amount under an insurance contract or other indemnity arrangement between the … insurer and the practitioner": see the definition in s 30(2)(b) of the Act. In common with the six decisions quashed by the consent orders made on 30 October 2019, the error which the delegate made in the Buckley decision was to adopt a narrow construction of the expression "indemnity arrangement" for the purposes of s 30(2)(b) so as to exclude circumstances where the practitioner was indemnified under the relevant insurance contract but was not named as a party to the contract. 63 However, Medicare submits that this error was not material in Ms Buckley's case because the Insurer's application for a high cost indemnity payment with respect to the deed of settlement with Ms Buckley's employer could not have satisfied the jurisdictional precondition in s 30(1)(a) in any event. Against this, the Insurer contended that the conceded error was material even if the Court agreed with Medicare's construction of s 30(1)(a) because a pre-action notice issued under s 9A of the PIP Act directly to Ms Buckley constituted a demand or claim against her for the purposes of s 30(1)(a). 64 Insofar as relief is sought under s 39B of the Judiciary Act, it is necessary for the applicant to establish the existence of a jurisdictional error. While it was common ground that the conceded error was potentially jurisdictional in nature, the error must also be material. This means that the conceded error must be material in the sense that "compliance could realistically have resulted in a different decision": Minister for Immigration and Border Protection v SZMTA [2019] HCA 3; (2019) 264 CLR 421 (SZMTA) at [45] (Bell, Gageler and Keane JJ). As their Honours further explained in SZMTA: 46. Where materiality is in issue in an application for judicial review … the question of the materiality of the breach is an ordinary question of fact in respect of which the applicant bears the onus of proof. Like any ordinary question of fact, it is to be determined by inferences drawn from evidence adduced on the application. 65 Furthermore, if the grant of relief under the ADJR Act would lack any utility because the delegate was bound by the Act to make the same decision, relief should be refused in the exercise of discretion: Re Refugee Review Tribunal; ex parte Aala [2000] HCA 57; (2000) 204 CLR 82 at [56]-[58]. 66 For reasons I explain below, the notice under the PIP Act did not constitute a demand or claim for the purposes of s 30(1)(a). It follows that the conceded error was not material and that the grant of relief would be futile.

4.4.2 Was a claim made against directly against Ms Buckley for the purposes of s 30(1)(a)? 67 On 11 April 2014 the solicitors for Mr Batley wrote to Ms Buckley enclosing an "Initial Notice" under s 9A of the PIP Act (the s 9A Notice). The letter did not in terms assert any claim against Ms Buckley but, aside from referring to the enclosed s 9A Notices, simply asked Ms Buckley to acknowledge receipt of the notice and provide the details of her medical defence insurer. Nor did the 9A Notice itself contain any claim against Ms Buckley. Rather, in line with the requirements of s 9A(3), the notice simply: (1) set out Mr Batley's full name, address and date of birth; (2) described the medical services alleged to have given rise to the personal injury (i.e. "Occupational Rehabilitation Functional Capacity Assessment and Vocational Assessment"); (3) identified "Clare Buckley - Occupational Therapist - Kinnect" as the "doctor" who performed the medical services, the date on which they services were provided (23 May 2013), and the place being Kinnect's premises; and (4) described the personal injury alleged to have been suffered, namely "Right supraspinatus tear". 68 Nor does s 9A of the PIP Act provide a mechanism for the making of a claim. Rather it provides for a claimant to give "initial notice" of a claim to the person against whom a proceeding based on the claim "is proposed to be started" and, by virtue of s 9A(2) "must" be given before notice of the claim under s 9 is given. The effect of the initial notice is to require the recipient within a month of receipt to give a written response advising whether any documents are held in relation to the medical services mentioned in the notice and to provide copies of all documents held by the recipient about the medical services: see s 9A(8). No other obligations to respond to the initial notice are imposed by the PIP Act. To the contrary, s 9A(12) expressly provides that the initial notice does not impose any obligation upon the recipient "to investigate, assess or respond to the initial notice other than as required by subsection (8)." As such, s 9A creates in effect a statutory mechanism for a form of preliminary discovery. The provision of a pre-action "written notice of the claim" is a subsequent step required by s 9 of the PIP Act. 69 It follows, as Medicare submits, that the s 9A notice under the PIP Act cannot properly be characterised as a claim against Ms Buckley for the purposes of s 30(1)(a) of the Act. Nor, for the reasons earlier given, did the fact that Mr Batley instituted legal proceedings claiming damages for personal injury against Kinnect relevantly on the basis that Kinnect was vicariously liable for Ms Buckley's alleged breaches of duty, mean that a claim was made against Ms Buckley for the purposes of s 30(1)(a). It follows that the delegate would have been bound to reject the Insurer's application for the high cost indemnity payment even if she had not made the conceded error. 70 It follows that it would be futile to grant relief. It follows that, insofar as the application is based upon the ADJR Act, the grant of relief should be refused in the exercise of discretion and, as no jurisdictional error has been established, the application must be dismissed insofar as it is based upon s 39B of the Judiciary Act.

5. COSTS 71 As Medicare has been successful insofar as these proceedings sought to challenge the Jarschke and Buckley decisions, Medicare should be awarded its costs to this extent. 72 However, the issue as to costs is complicated by the fact that the Insurer originally challenged six other decisions by the delegate on the basis that the delegate had erred in its construction of s 30(2)(b) of the Act. Orders were made by consent quashing the s 30(2)(b) decisions by consent on 30 October 2019 and writs of mandamus were issued requiring Medicare to determine the applications in question according to law. Costs, however, were reserved by consent with respect to these decisions. Given that the error in these decisions was conceded by Medicare only after the parties had agreed a statement of agreed facts pertaining to these decisions as well as the Jarschke and Buckley decisions, and written submissions in respect of all eight matters had been filed by the Insurer, there would appear to be no reason why the Insurer should not be awarded its costs insofar as the judicial review proceedings related to these decisions. However, the parties have not addressed this issue and by consent the question was reserved. As such, I have made no orders as to the costs of the matter at this time so as afford the parties the opportunity to reach agreement as to costs with respect to the whole of the matter, including as to whether a lump sum costs order reflecting considerations of the kind to which I have referred might be a fairer and more cost-effective course. I certify that the preceding seventy-two (72) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Perry.