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[2011] ACTSC 39
Supreme Court of the ACT
2011-03-11
Original judgment source is linked above.
HUMAN RIGHTS ACT 2004 (ACT)
[2011] ACTSC 39 (11 March 2011)
PRACTICE AND PROCEDURE - costs - uncompleted proceedings - application for an extension of time - unreasonable conduct of defendant - partial costs payable by defendant.
MEDICAL PRACTITIONERS - practice of medicine - clinical privileges - regulation - whether time limited grant of privileges or unlimited grant - method and occasion for review - meaning of statutory scheme - Health Act 1993 (ACT) Pt 5.
Corporations Act 2001 (Cth), s 459P
Administrative Decisions (Judicial Review) Act 1989 (ACT), ss 3B, 5(1)(d), 10
Human Rights Act 2004 (ACT), ss 21, 40C
Court Procedures Rules 2006 (ACT), rr 6126, 3557, 1163, Pt 3.10
New South Wales v Bardolph [1934] HCA 74; (1934) 52 CLR 455
Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Qin [1997] HCA 6; (1997) 186 CLR 622
Rural & General Insurance Broking Pty Ltd v Australian Prudential Regulation Authority (2009) 231 FCR 199
Australiawide Airlines Ltd v Aspirion Pty Ltd [2006] NSWCA 365
Tooheys Ltd v Minister for Business and Consumer Affairs [1981] FCA 121; (1981) 36 ALR 64
Broadbridge and Anor v Stammers (1987) 16 FCR 296
Segen, Joseph C, Concise Dictionary of Modern Medicine (McGraw-Hill Companies: New York, 2002)
Mosbey's Medical Dictionary (Mosby Elsevier: St Louis, Mo, 8th Ed, 2008)
The Australian Council for Safety and Quality in Health Care, National Guidelines for Credential and Clinical Privileges, 2002
C. T Onions, The Shorter Oxford English Dictionary on Historical Principles (Clarendon Press: Oxford, Vol 2, 1973)
1. The plaintiff have leave to discontinue these proceedings.
2. The plaintiff file and serve a notice of discontinuance of these proceedings within fourteen days.
(a) there be no order as to costs of the attendances in court on 3 and 17 September, 15 October, 30 November and 8 December 2010.
(b) the plaintiff pay the defendant's costs of the making of the application for an extension of time to include the attendance in court on 20 August 2010;
(c) the order for costs made on 19 November 2010 is confirmed;
(d) otherwise the defendant pay the plaintiff's costs of these proceedings including the hearing on 1 February 2011.
1. What "everyone knows" is, on closer inspection, not always based in fact and the reality may be somewhat different to the common expectation.
2. This case has resulted from relevant people assuming that they understood the circumstances of the procedures and issues with which they were dealing, but when the relevant documentation was considered a different picture emerged.
3. The issue comes before me in reality only on the question of costs of these proceedings for both parties now agree that there is no utility in them.
4. That position, at least the concurrence by both parties in this view, has eventuated because of the acknowledgement by the defendant that the initial position that was articulated by the defendant is no longer accepted. It has to be said that the defendant's position has been that these proceedings were always futile.
5. Nevertheless, the defendant did appear, in early correspondence sent to the plaintiff, and, it needs also to be noted, in subsequent correspondence during the currency of these proceedings, to espouse a view that was wrong and, says the plaintiff, also justified him commencing and maintaining these proceedings.
6. What I am now asked to do is give the plaintiff leave to discontinue the proceedings and, according to the plaintiff, order that the defendant pay his costs, or, according to the defendant, order that the plaintiff pay the defendant's costs.
7. The plaintiff, Dr Ramesh Gupta, is a psychiatrist employed as such by the Australian Capital Territory, through ACT Health, an administrative unit (s 54(2), Australian Capital Territory (Self-Government) Act 1988 (Cth), and s 13 Public Sector Management Act 1994 (ACT) and Administrative Arrangements 2009 (No 3) (ACT), Schedule 1).
8. In order to carry out his duties, Dr Gupta must have access to the facilities that are provided in Calvary Health Care and in the ACT Mental Health Facilities, for which ACT Health is responsible, to treat patients and use the facilities. In the medical sector, this is commonly provided by a grant of what is known as clinical privileges.
9. Though a fundamental part of the provision of medical services to the community, the regime of clinical privileges is, curiously, not comprehensively regulated in this Territory.
10. Clinical privileges is defined in Segen, Joseph C, Concise Dictionary of Modern Medicine (McGraw-Hill Companies: New York, 2002) as follows:
Permission granted by a hospital or other health care institution to a physician or other provider to render specific diagnostic or therapeutic services Types Admitting privileges - right to admit Pts; clinical privileges - right to treat.
11. In Mosbey's Medical Dictionary (Mosby Elsevier: St Louis, Mo, 2008) 8th ed the term is defined as follows:
Etymology: L, privilegium, private law
authority granted to a physician or dentist by a hospital governing board to provide patient care in the hospital. Clinical privileges are limited by the individual's professional license, experience, and competence.
12. The Australian Council for Safety and Quality in Health Care has produced National Guidelines for Credential and Clinical Privileges (2002) which defines clinical privileges in the following way:
Clinical privileges result from a process in which the Governing Body or its delegate grants a health care professional the authority to provide health care services within defined limits in a health care facility. They represent the range and scope of clinical responsibility that a professional may exercise in the facility. Clinical privileges are specific to the individual, usually in a single health care facility (or group of facilities such as a rural District/Region or a Multi-Purpose Service) and relate to the resources, equipment and staff available. Recommendations are made to the Governing Body following the determination of what a health care professional can or cannot do in a facility.
13. The term is also defined in the Health Act 1993 (ACT), where the review and termination of clinical privileges is regulated, but not the grant of them. Section 54 of that Act provides;
In this part:
'clinical privileges', of a doctor, or dentist for a health facility, means the rights of the doctor or dentist -
(a) To treat patients or carry out other procedures at the health facility; or
(b) To use the equipment or other facilities of the health facility.
14. Health facility is then defined in s 6 of the Act as follows:
'health facility' means the following facilities where health services are provided:
(a) a hospital, including a day hospital;
(b) a hospice;
(c) a nursing home;
(d) a health practitioner's consulting room;
(e) another facility ordinarily used by the Territory to provide health services;
(f) any other facility prescribed by regulation for this section.
15. Section 54 appears in Pt 5, "Reviewing clinical privileges", the only part of this Act, indeed, so far as I can tell, of any Act, which deals with clinical privileges. In particular, there appears to be no statutory mechanism or regulation for or relating to the grant of clinical privileges, including, for example, a review of any refusal to grant them. Once granted, the review of the grant and any amendments, removal or termination of such privileges can be effected under the procedures set out in Pt 5. Section 74 of the Act provides that Pt 5 applies despite anything to the contrary in the terms of a practitioner's engagement. The grant of them is entirely at the discretion of the relevant authority.
16. In the public sector in the Territory, the grant of such privileges seems to be entirely the province of the Chief Executive or his or her delegate who have control of public hospitals and health facilities. The Territory, through ACT Health, exercises its undoubted executive power to enter into contracts with staff and also, it seems, to grant them or others, such as visiting medical officers, clinical privileges, that is, a right to treat patients and carry out other procedures in the health facilities conducted by the Territory though ACT Health and the right to use equipment and other facilities in such facilities. See New South Wales v Bardolph [1934] HCA 74; (1934) 52 CLR 455 (at 474).
17. As a result, the refusal to grant such privileges would be amenable, if at all, only to limited review and certainly not review under the Administrative Decisions (Judicial Review) Act 1989 (ACT) (Judicial Review Act), unless some argument could be mounted that the grant was encompassed in the powers under the Public Sector Management Act 1994 (ACT). This would, however, only apply to practitioners employed through ACT Health and not visiting medical officers, but whose contracts, though not the grants of their clinical privileges, are dealt with under Pt 7 of the Health Act.
18. The details of how such privileges are granted appear to be contained in a document of ACT Health purportedly published by its Clinical Governance Unit, entitled "Medical and Dental Appointments Policy". Its purpose and scope is set out in the document itself and reads, in part:
To establish and maintain an appropriate process for the appointment, credentialing, delineation of clinical privileges and re-credentialing of all medical specialists and dentists employed by ACT Health.
19. The Policy then sets out in Appendix A the arrangements for appointment to a medical or dental position including procedural issues. It provides:
DURATION OF CLINICAL PRIVILEGES
Clinical privileges will be granted for a specific period of time, usually three years. The MDAAC [ACT Health Medical and Dental Appointment Advisory Committee] may make a recommendation to limit the duration of clinical privileges in terms of a probationary period. In the case of short-term appointments, the granting of clinical privileges will be for the period of the appointment.
20. It is the General Manager of the "relevant Division/Stream" who, under the Policy, "appoints the medical specialist or dentist and delineates clinical privileges."
21. After the section on the appointments process, there is a section entitled "Review of Clinical Privileges." The first part under this section is headed "Routine Review" and reads as follows:
The MDAAC will undertake the routine recredentialing and review of clinical privileges of all medical specialists and dentists at three-year intervals. In order for the MDAAC to make meaningful performance-based privileging recommendations, the following information will be made available by the medical specialist or dentist:
22. The MDAAC, the ACT Health Medical and Dental Appointment Advisory Committee, was approved on 14 February 2007 by the Minister for Health as a clinical privileges committee for ACT Health: see s 56 of the Health Act
23. This section, however, is perhaps inconsistent with the previously cited section for the letter makes the grant of clinical privileges time-limited. This section could be read as requiring a review before the re-grant of clinical privileges after the three-year period has expired. This may give force to the notion of "re-credentialling" which is referred to but not explained. On the other hand, a reference to "performance-based privileging recommendations" has the sense of a review of such privileges during the currency of them, though that is not a strong inference.
24. Taken together, these two parts of the Policy then seem to establish more likely than not that clinical privileges are granted for a three year period and are then reviewed, presumably to determine whether ACT Health, no doubt through its Chief Executive or delegate, will re-grant them (arguably by renewal) at that stage or not.
25. It is, of course, open to an administrative decision-maker to adopt a Policy to guide it in the exercise of discretionary powers. Such policies cannot be inconsistent with statute and are not, in themselves, of statutory force. The extent to which they are otherwise binding, especially on the decision-maker, and in what circumstances, is not a matter on which I have to make a finding in these proceedings.
26. Part 5 of the Health Act provides a mechanism for the review of clinical privileges. It establishes Clinical Privileges Committees which have the following functions under s 59:
(a) to review the clinical privileges of doctors, and dentists, for health facilities;
(b) any other function given to the committee under this Act.
27. A committee is, in exercising its functions, not bound by the rules of evidence and may inform itself as it considers appropriate, must comply with the rules of natural justice and may do what it considers necessary or convenient for the fair and prompt conduct of its functions (s 62). It may ask anyone to give it information and such information, if given honestly and without recklessness, is not a breach of confidence or of professional obligation and does not incur civil or criminal liability in the giving of the information (s 64).
28. Secrecy obligations are placed on, inter alia, members of such a committee under s 125 of the Act, which prohibits the making of a record of information about a person disclosed under the Act and also prohibits the divulging of that information unless either of those are done under the Act or in the exercise of a function under the Act or with the person's consent. There are, in the section, even limits to the disclosure of such information to "courts", defined widely to include, as well as courts, tribunals and certain authorities.
29. The central task of the committees is given by s 65 which provides:
A clinical privileges committee may review the clinical privileges of a doctor, or dentist, for a health facility.
30. It is to be noted that the Act places no time limit on when such a review may occur (in contradistinction to what appears in the Policy) and no limit on the number of times such a review can be conducted.
31. In any review, the committee must give the doctor or dentist a notice setting out any proposed recommendations to withdraw, suspend, end or amend the clinical privileges of a doctor and dentist, together with the reasons for the recommendation, and permit the doctor or dentist to make a submission about the proposed recommendation within 21 days (s 66).
32. The committee then prepares a report which includes any recommendation (s 67) and gives that to the CEO of the relevant health facility (s 68) who must then consider the recommendations in the report and decide whether to take the action recommended, or any other action that the committee could have recommended and which the CEO considers appropriate (s 69). The CEO must then notify the doctor or dentist concerned and the clinical privileges committee of the decision (s 70) and the decision takes effect on the day mentioned in the notice or on the day the notice is given to the doctor or dentist (s 71). A decision to amend or withdraw the clinical privileges of a practitioner or to amend the terms of, or suspend, or end, the engagement of a practitioner is appellable: s 130.
33. Statements made to a clinical privileges committee, documents given to the committee which are prepared for the committee and documents prepared by the committee are not admissible in evidence in a proceeding before a court, widely defined as in s 73, as noted above (at [28]).
34. I note that there has apparently been a review of Pt 5 of the Health Act, which is substantially replaced by the Health Bill 2011 (ACT), in which "clinical privileges" are now called "scope of clinical practice". Much of the structure, however, appears to remain the same and the new Part still does not provide any statutory regulation of the grant of the "scope of clinical practice".
35. Dr Gupta was employed by the ACT Health authorities in 1980, when public health services were delivered through the Capital Territory Health Commission established under the Health Commission Ordinance 1975 (Cth). At that time, the clinical privileges of an appointee such as Dr Gupta were then conferred by the instrument of appointment: s 28, Health Commission Ordinance 1975 (Cth). That instrument was not tendered in this application.
36. Since that time there have been a number of iterations of the structures by which public health has been delivered in this Territory. I do not need to follow these through but am content to accept that appropriate transitional provisions led to Dr Gupta now being employed by the Territory through ACT Health and subject to the Health Act, especially in relation to its regulation of clinical privileges.
37. On 3 July 2009, the Executive Director of the ACT Health Medical Appointments and Training Unit, wrote to Dr Gupta advising that his:
clinical privileges in Psychiatry at Mental Health ACT facilities and Calvary Health Care ACT are due for renewal on 16 August 2009.
38. An application form for renewal was attached and a date for its submission was included. The form was stated to be "ACT Health Medical & Dental Application for Renewal of Clinical Privileges". It was of six pages and required detailed attachments, including a current curriculum vitae (including a summary of professional, development activities "over the last three years"), a copy of current registration certificates and the nomination of four referees, with the clear implication that their references are to be provided, for it states "Please ask that person to comment on (a) ... and (b) ...". Dr Gupta completed and submitted the form with supporting documentation.
39. I note that neither the Policy nor the Health Act make any express reference to the renewal of the grant of clinical privileges. The section in the Policy on "Duration of Clinical Privileges" (see [19] above) seems to imply that they will be time limited and for three years usually, implying but not stating that they will then be renewed. The process for such renewal is, however, not expressly addressed in terms in the Policy. There is no reference in the Health Act to the duration of a grant of clinical privileges or to renewal. It only refers to amendment, withdrawal, suspension or, ending, implying that the processes to which it refers are processes to be carried out during the currency of the grant and not about renewal at all.
40. It may be that the reference to review (see [21] above) is intended to refer to the process for renewal, but it is not expressed in those terms.
41. On 16 December 2009, Dr Elizabeth O'Leary, wrote to Dr Gupta advising that the committee (MDAAC) had "agreed to recommend that [his] clinical privileges be renewed" and then in a table set out "period of clinical privileges ... 15/12/2009 to 15/12/2010", that is for one year. I am not able to say what the position was between 16 August 2009 (see [37] above, when his privileges were said to require renewal) and 15 December 2009. Although Dr O'Leary described herself as Acting Chair of the committee, she had not been the Chair of the particular meeting at which the decision was made.
42. Dr Gupta was understandably upset by this advice, as he clearly had anticipated that the renewal of his privileges would be for the usual period of three years and he was given no reason for the shorter period of renewal.
43. It is also important to note that this process had not followed the relevant provisions of the Health Act, especially ss 66 and 69 and, by implication, ss 67 and 68.
44. Dr Gupta sought information from the committee and its secretariat. Information was generally not forthcoming. He was told that the secrecy obligation in s 125 of the Health Act prevented him from being told anything. While that is not a matter on which I have to make a finding, it does not seem to me to be strictly accurate, for s 125 does not prevent information being disclosed under the Act or in the exercise of a function under the Act. Since it appears that the terms of Dr Gupta's engagement were being amended to provide for a limited renewal of his clinical privileges, less than the usual and expected period set out in the Policy, by an exercise of power of a clinical privileges committee, he would appear to have been entitled to natural justice and to be told the reasons for the recommendation; s 125 would not prevent that.
45. Dr O'Leary, however, took a different view of what the committee had done, suggesting that, not only was she not able to provide the reasons, but also the decision was not appellable because what the committee had done was not to amend or withdraw his privileges.
46. Unsurprisingly, Dr Gupta sought legal advice. His lawyers then wrote to the Chief Executive of ACT Health about a range of matters but particularly raising what were said to be breaches of the Health Act in renewing his clinical privileges. That letter was referred to the ACT Government Solicitor, who responded.
47. That response, of 11 May 2010, noted that "privileges are commonly renewed for a period of three years, but this is not prescribed by legislation or Policy". Indeed, there is no legislation or Policy about renewal at all.
48. It is also noted that the decision had no consequences for Dr Gupta's employment with the Territory, "other than to ensure he can continue to carry out his clinical work for the next year", a clear implication being that without the renewal, he could not do so.
49. While this was clearly intended to allay concerns about Dr Gupta's position, the quoted comment would have had the opposite effect, for it would clearly be taken also to imply that after the year (admittedly absent a further renewal) Dr Gupta would not be able to carry out his clinical work, for his privileges would have expired. In the context of a reduction of the period of "renewal" from three years to one year, without a reason being given, this implication of a risk to Dr Gupta's ongoing employment would be at the very least unsettling.
50. The letter noted that the clinical privileges committee had regard to the requirements of a certain Physician Competency Framework and the renewal must have meant that he met the requirements of that Framework.
51. The letter noted that the issue before the committee was renewal of Dr Gupta's clinical privileges, not whether to amend, withdraw, suspend or end them and that, accordingly, the regime under the Health Act did not apply.
52. The difficulty I have with that assertion is that the committee had no statutory function to consider the renewal of Dr Gupta's clinical privileges. The only statutory function it had under s 59 (see [26] above) was to review them, as well as any other function given under the Health Act, but no function in relation to renewal was given by the Act. It would appear then, that the committee was not acting under the Act at all. If that is correct, s 125 of the Act had no application.
53. It is, of course, arguable that the committee could review the privileges in preparation for a process of renewal, but it had no statutory power to recommend a renewal or, indeed, the period for which the renewal was to be effective, nor did the Policy give it such a power.
54. I do not say that Dr Gupta's lawyers necessarily saw the position as I have outlined it, but it appears that, being dissatisfied with the response obtained, they then took steps to commence these proceedings for judicial review. Dr O'Leary was Acting Chair of the committee and the person who appears to have made, or at least communicated, the decision to Dr Gupta, but who did not attend the relevant meeting of the members of the committee who deliberated on Dr Gupta's application.
55. The proceedings were, however, never substantively commenced. An Originating Application for judicial review was lodged on 11 August 2010 and a filing fee paid but it appears never to have been issued. An Application in Proceedings was issued seeking an extension of time for the Originating Application to be issued, which, if granted, would result in the Originating Application being dated and issued on the date it was lodged: r 6126(2)(a).
56. There appears to be three claims made in the Originating Application, only two of which needed an extension of time. One was a claim under the Judicial Review Act for a review of the decision to renew Dr Gupta's clinical privileges for only a year, a decision which was claimed to have been made on 16 December 2009; that review was required to be made, without extension, within effectively 28 days of the date of the decision: s 10 of the Judicial Review Act. The second was an application to quash that decision, presumably by certiorari order under Pt 3.10 of the Rules, an application which, without extension, is to be made within 60 days of the day when the grounds for the seeking of relief arose, probably also 16 December 2009: r 3557 of the Rules. The third claim was a claim under s 40C of the Human Rights Act 2004 (ACT) that the defendant had not provided a fair trial under s 21 of that Act, a claim that had to be brought within twelve months: s 40C(3) of that Act. It had been commenced in that time.
57. Dr Gupta's lawyers sent a copy of the draft application to the defendant's lawyers who responded by letter dated 10 September 2010. The defendant's lawyers suggested that Dr Gupta's lawyers had "some significant misunderstandings regarding clinical privileges".
58. Curiously, in that letter it is suggested that "clinical privileges are privileges, not rights". I say curiously, for that seems to conflict with s 54 of the Health Act which describes the access that clinical privileges give as "rights".
59. The letter also stated that "they are held unless and until they are amended or withdrawn". This seems quite at odds with the partial correspondence received by Dr Gupta to date (to which I will call "pre-litigation correspondence"), all of which referred to "renewal" implying at least a termination, apparently automatically, and also at odds with the Policy which referred to a specified duration for granted privileges, "usually three years".
60. What the letter ultimately stated was that what the clinical privileges committee was doing was simply undertaking a review, as the committee was entitled to undertake periodically and, since it was not proposing a change or withdrawal, there had been no need to proceed under the Health Act, for no recommendation was being made that required such action.
61. Perpetuating the uncertainty, however, the letter continued "Dr O'Leary informed Dr Gupta that his privileges were renewed".
62. The Shorter Oxford English Dictionary has a number of meanings for "renew", the most appropriate seems to be "to grant anew" (at (1795)). This certainly implied that there is a cessation and then, of course, a re-grant when the privileges are renewed. The letter then, rather curiously, stated:
I acknowledge that Dr O'Leary also informed Dr Gupta that the period of his holding of clinical privileges is until 15 December 2010, rather than the usual three-year period before a further review would be conducted. However, that had no bearing on the continuance of his privileges, or the outcome of the review of them.
63. What these sentences mean is not easy to understand for the first seems to confirm that Dr Gupta held his clinical privileges until 15 December 2010, but the second seemed to contradict that and suggest a longer continuance.
64. The letter then suggested that the review, consistently with s 65 of the Health Act, could be conducted at any time. While routine reviews by the clinical privileges committee are conducted every three years, it may conduct a review "at any time or at intervals of any other period". The letter then stated:
Notification that a doctor or dentist's clinical privileges are renewed to a certain date does not mean that those privileges are 'secure' to that date. To the contrary, they can be reviewed at any time. In Dr Gupta's case, Dr O'Leary's letter simply informed him of the date before which MDAAC intended to conduct another review regardless of what might happen, or not, in the interim.
65. What is not addressed in this paragraph is the notion of "renew" in this context. Indeed, the letter seems to have re-interpreted "renew" as "review." Still, questions remained. When "renewed", had Dr Gupta's privileges been a re-grant of privileges which had ended by the effluxion of time? That is not stated though an inference open on all the correspondence from ACT Health. That some other meaning is to be given to "renew" is suggested by the next paragraph which states:
Equally, notification that another review will be conducted on or before a stated date in the future (and in Dr Gupta's case before 15 December 2010), does not mean (as you claim) that the privileges will cease to be held after that date in the absence of further renewal. Nor do we understand why Dr Gupta would think such a thing. It is correctly and commonly known that clinical privileges continue indefinitely unless and until a CPC [clinical privileges committee] and then the Chief Executive Officer acts under ss 62-71 of the Health Act. No such action has been taken in Dr Gupta's case.
66. While what is stated in the second last sentence of that paragraph may be true, it is quite inconsistent with the Policy, which expressly refers to a limited duration for the grant of clinical privileges, and the earlier, pre-litigation correspondence, which refers expressly to "renewal", consistent with expiry from the effluxion of time and re-grant or restoration and which is, therefore, also consistent with the Policy. The Health Act is neutral on this issue.
67. Thus, what is "commonly known" seems not to be based on the Policy or the approach taken by those administering it. It also did not seem to be known by Dr O'Leary.
68. The letter suggested that, as a consequence, the application was misconceived. That appears to be a rational suggestion if what the letter says, as opposed to the Policy and the pre-litigation correspondence, is what governs the situation. If not, then there was a decision of some kind by an administrative decision-maker, who is a public authority within the meaning of the Human Rights Act, which would mean that the original decision, if, in fact, a renewal, would be amenable to review, at least under that Act.
69. Dr Gupta's lawyers responded to that letter and stated:
Now that the ACT has made its position clear in that Clinical Privileges are held unless they are amended or withdrawn, we are of the view that no reason remains for our client to pursue his application for review in the above matter. Accordingly, we have been instructed to agree to an order that the application be dismissed.
70. They, however, sought costs. This was resisted by the defendant.
71. Unfortunately, the position became complicated when ACT Health, in the person of Dr O'Leary, wrote to Dr Gupta on 29 October 2010. Her letter, including emphasis, was relevantly as follows:
The Medical and Dental Appointments Advisory Committee (MDAAC) advises that your clinical privileges in Psychiatry within ACT Health facilities and Calvary Health Care ACT are due for renewal with effect from 12/12/2010.
Attached please find an application for renewal of clinical privileges form, which you are asked to complete and return to Angela Czoban, Senior Manager, ACT Health Clinical Governance Unit (CGU), in the enclosed envelope, by 19/11/2010, together with supporting documentation requested on page 2 of the application.
As the renewal process can often take some time to complete, on behalf of the A/g Director of Mental Health ACT I have granted you temporary clinical privileges for a period of three months from 12/12/2010 whilst the renewal process is attended to.
Please note that your temporary clinical privileges will expire on 12/03/2011.
72. This, of course, is quite inconsistent with the view expressed by the ACT Government Solicitor in the letter of 10 September 2010. Dr O'Leary expressly stated that, inconsistent with what the Government Solicitor said was "commonly known", Dr Gupta's privileges did not continue indefinitely but had expired so that "temporary clinical privileges" were necessarily granted and these would also expire.
73. Dr Gupta's lawyers, expressing their client's concern, referred this letter to the ACT Government Solicitor. In the reply, the Government Solicitor, by letter dated 23 November 2010, no doubt written on instructions, accepted that Dr O'Leary's letter was "poorly phrased", something of an understatement, if not inaccurate, and that all that was intended was "to advise the timeframe within which MDAAC wished to complete its review". The position was thus restated as follows:
To remove any ongoing doubt, we acknowledge and confirm that Dr Gupta's privileges cannot 'expire' on 12 March 2011, or on any other date. To the contrary, his privileges cannot be amended or withdrawn otherwise than by the process set out in sections 66-71 of the Health Act.
74. As a result of this unequivocal statement, Dr Gupta's lawyers confirmed that they proposed to proceed with discontinuing with the proceedings subject to an order for costs.
75. Dr Gupta now seeks leave to discontinue these proceedings as the assurance of the ACT Government Solicitor in their letters of 10 September and 23 November 2010, which would have been prepared on instructions from ACT Health, that his clinical privileges will not expire until action is taken under and in accordance with Pt 5 of the Health Act, renders the proceedings unnecessary.
76. The power to make such an order is contained in r 1163 of the Rules, which provides:
(a) the costs of the party to whom the discontinuance or withdrawal relates up to when the notice of discontinuance or withdrawal is served on the party; and
(b) the costs of another party or parties caused by the discontinuance or withdrawal up to when the notice of discontinuance or withdrawal is served on the party.
(2) If a party discontinues or withdraws with the court's leave, the court may make the order for costs it considers appropriate.
77. Clearly, Dr Gupta seeks to have r 1163(2) applied in his favour. The question is whether this should be done.
78. The law is well set out by McHugh J in Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Quin [1997] HCA 6; (1997) 186 CLR 622 (at 624):
In most jurisdictions today, the power to order costs is a discretionary power. Ordinarily, the power is exercised after a hearing on the merits and as a general rule the successful party is entitled to his or her costs. Success in the action or on particular issues is the fact that usually controls the exercise of the discretion. A successful party is prima facie entitled to a costs order. When there has been no hearing on the merits, however, a court is necessarily deprived of the factor that usually determines whether or how it will make a costs order.
In an appropriate case, a court will make an order for costs even when there has been no hearing on the merits and the moving party no longer wishes to proceed with the action. The court cannot try a hypothetical action between the parties. To do so would burden the parties with the costs of a litigated action which by settlement or extracurial action they had avoided. In some cases, however, the court may be able to conclude that one of the parties has acted so unreasonably that the other party should obtain the costs of the action.
(Footnotes omitted)
79. The circumstances to which His Honour referred included, as well as the unreasonable conduct of one party, that a judge may feel confident that, although both parties have acted reasonably, one party was almost certain to have succeeded at trial. His Honour then continued:
If it appears that both parties have acted reasonably in commencing and defending the proceedings and the conduct of the parties continued to be reasonable until the litigation was settled or its further prosecution became futile, the proper exercise of the cost discretion will usually mean that the court will make no order as to the cost of the proceedings. This approach has been adopted in a large number of cases.
(Footnotes omitted)
80. In Rural & General Insurance Broking Pty Ltd v Australian Prudential Regulation Authority (2009) 231 FCR 199; [2009] ACTSC 67 (Rural & General), Penfold J followed this approach to the exercise of the power under r 1163(2). Her Honour then considered a number of authorities and summarised the relevant principles. I respectfully agree with and adopt Her Honour's summary. These principles (at, 213-4; [82]), as articulated by Her Honour, are as follows:
(a) The costs discretion to be exercised under r 1163(2) where a party is given leave to discontinue is at large, but must be exercised judicially.
(b) There is no presumption that under r 1163(2) costs will be awarded to one or other party. There is no entitlement to costs against the discontinuing party arising simply because in some cases it may be preferable in the interests of finality to enter judgment against the party rather than giving leave to discontinue.
(c) In the exercise of the costs discretion, it is appropriate to have regard to:
(i) whether the behaviour of each party was reasonable until the point when discontinuance was sought; and
(ii) whether seeking to discontinue reflects a surrender by the discontinuing party in a hopeless case or a supervening event or other change in external circumstances that has rendered the action 'futile' or pointless.
(d) In relation to the reasonableness of a party's behaviour, the matters that may be relevant include (but are not limited to), those set out in the following list (extracted from [Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72] and [Edwards Madigan Torzillo Briggs Pty Ltd v Gloria Stack & Ors [2003] NSWCA 302]):
(i) whether a party has 'by its lax conduct effectively invite[d] the litigation';
(ii) whether either party has unnecessarily protracted the proceedings;
(iii) whether the successful party has succeeded on a point not argued before a lower court;
(iv) whether a party has prosecuted the matter solely to increase the costs recoverable;
(v) whether a party has obtained only the relief previously offered by another party in settlement offers;
(vi) whether a discontinuing plaintiff had 'an arguable case' against the other party;
(vii) whether the 'complexity, duration or expense of the litigation could have been reduced if either party had taken a different view of the case'.
(e) In relation to the reason for seeking to discontinue:
(i) a surrender will usually leave the surrendering party to pay the other party's costs; and
(ii) discontinuance for futility will sometimes mean that no costs order is made.
81. Mr C Erskine SC, who appeared for Dr Gupta, submitted that, in the circumstances, it was reasonable for Dr Gupta to have sought to commence these proceedings because a fundamental part of his practice, namely the clinical privileges which he had to have to perform his job, was being reduced in time from three years to one year without him having a reasonable opportunity to be heard. He had received no satisfaction from the inquiries he had made nor from those made by his lawyers as to why that had been done. If the decision was based on no reason, it should be quashed. Thus, Dr Gupta should receive his costs.
82. Mr G McCarthy, who appeared for the defendant, opposed the application on a number of grounds.
83. He submitted that the proceedings were premature but I do not accept that. Dr Gupta had the correspondence with the officers of ACT Health, had made unsuccessful attempts to get access to the basis of the decision and then had received a letter of 11 May 2010 from the ACT Government Solicitor, which was consistent with the earlier correspondence. He was not making progress and the only way to vindicate his rights, as he saw them, was to take proceedings. That was a reasonable step to take.
84. Mr McCarthy next pointed out that Dr Gupta was not suffering a detriment because his privileges were still in force. While that may be accepted, it seems to me to miss the point that they had been significantly curtailed from what he legitimately expected. According to the information he had, with the background of the Policy, his future had been compromised and rendered more uncertain for reasons that had never been provided. It seems to me that where a decision grants an occupational right or privilege rather than refusing to do so, it cannot be said that there is no detriment if the terms are such that the recipient is aggrieved by the terms of the grant.
85. Of course, in the re-interpretation of what had happened through the prism of the letter from the ACT Government Solicitor of 10 September 2010, by which Dr Gupta is invited to view the earlier correspondence, he had suffered no detriment, for his privileges were ongoing and only to be adversely affected if a proper process under Pt 5 of the Health Act were followed. All that had happened, under that interpretation, was that an earlier date had been set for the next review, an issue about which Dr Gupta may feel aggrieved but which he probably could not reasonably have challenged (though it should still have been made in compliance with the rules of natural justice). It was clearly a decision within power. That interpretation, however, came after the proceedings had been commenced and, in my view, was not a reinterpretation of the pre-litigation correspondence, but was a new interpretation, and inconsistent with it.
86. Mr McCarthy further submitted that the proceedings were premature because Dr Gupta had not clarified the effect that the decision had had on his capacity to practice. I reject that submission also.
87. The Policy and, indeed, the expectation (supported by the Policy) that clinical privileges had to be for a limited, discrete period (and, by necessary implication, therefore, would have to be renewed if Dr Gupta was to continue to practice) was something that appears to have been accepted by the authors of all the pre-litigation correspondence I have seen. I accept, therefore, that it was a common understanding. It was, however, inconsistent with what the ACT Government Solicitor wrote was "commonly known". It appears Dr O'Leary did not know it.
88. Mr McCarthy submitted that expiry of privileges by an effluxion of time was inconsistent with Pt 5 of the Health Act, which only permitted clinical privileges to be withdrawn, amended, suspended or ended on a recommendation of a clinical privileges committee acting in accordance with Pt 5. I do not accept that Pt 5 is inconsistent with a term-limited grant of such privileges, such as is contemplated in the Policy. Such a grant of privileges could be for a specific term and expire at the end of that term. That would simply be independent of and outside Pt 5, which does not express itself to be the only mechanism by which clinical privileges can be varied or amended. Even s 74 of the Health Act would not be inconsistent with that, for the occasion for the exercise of power in those circumstances would simply not arise. The privileges would expire by the force of the grant and its terms and be beyond the reach of Pt 5 which seems from its terms to be relevant only to privileges that are current and, therefore, able to be reviewed and, if appropriate, amended, suspended, withdrawn or ended. Neither s 74 nor any other provision says that a grant of clinical privileges cannot end other than in accordance with the terms of the Part. That is certainly not expressed and I cannot see any necessary implication in Pt 5.
89. In any event, even were there to be such implication, it does seem to me that it only extends to requiring any interference with such privileges to be done under Pt 5 and not otherwise, where the grant of privileges subsists and that this can be for a specific period of time. This is, perhaps, reinforced by the Policy which makes provision for short-term contracts of appointment where it seems at least counter-intuitive that a grant of clinical privileges should be terminated at the end of such a contract only by the application of the process under Pt 5. The same presumably applies when a contract is terminated by retirement or resignation and the clinical privileges would be likely then automatically to expire. None of that seems to me to be inconsistent with Pt 5, which is directed to a review of clinical privileges and, by its terms, something conducted while they subsist.
90. As to the award of costs, Mr McCarthy referred me to Australiawide Airlines Ltd v Aspirion Pty Ltd [2006] NSWCA 365 where the Court of Appeal refused to award costs to a plaintiff whom it described to have had grounds for commencing the proceedings which were terminated without a full hearing. In that case, the respondent (called in the judgment IAS) had served a statutory demand under s 459P of the Corporations Act 2001 (Cth) on the appellant (called in the judgment REX). IAS then commenced winding up proceedings for non-compliance with the demand but discontinued them when REX filed a detailed affidavit showing beyond doubt its solvency.
91. Mr McCarthy referred me to what two of the appellate judges said. Bryson JA said (at [55] to [57]):
92. There are two things to be said about these passages. In the first place, Penfold J in Rural & General considered that there were such differences between NSW rule 42 and r 1163 that she did not regard this decision as relevant to decisions under r 1163. See Rural & General at [76].
93. Secondly, insofar as it may be relevant, it seems to me that the circumstances are quite different to those that pertain here. In that case, there was no change in approach to the issues in dispute comparable to the differences between, on the one hand, the correspondence from ACT Health and the letter of 11 May 2010 from the ACT Government Solicitor, and on the other hand, the later correspondence from the ACT Government Solicitor.
94. I accept that, insofar as that case stands for the proposition that costs will not be recoverable by a plaintiff who terminates proceedings before trial where there is some, but only slight, justification for having commenced the proceedings in the first place, it is a principle I should accept. I further accept that being justified in commencing proceedings is not necessarily sufficient, alone, for a plaintiff in such proceedings to be awarded costs.
95. Mr McCarthy further submitted that the proceedings commenced by Dr Gupta had no prospects of success. There were two aspects of this challenge.
96. In the first place, he submitted that insofar as they were proceedings under the Judicial Review Act, they could not have succeeded as there was no enactment under which the decisions had been made. Initially, I was attracted to that argument. Mr Erskine SC, however, pointed out that all the pre-litigation correspondence pointed to the decision-maker believing that the decision was made under the Health Act. This is reinforced by the fact that MDAAC was clearly regarded in that correspondence as performing the functions of a clinical privileges committee and reference made it clear it purported to be acting under the Health Act. It seems reasonable to assume that the decision was thought to be one purportedly made under that Act. If so, this would permit a challenge to the decision for failure to apply the rules of natural justice for s 62(a) of the Health Act requires such rules to be applied when the Committer is exercising its functions. One can also challenge a decision purportedly made under an enactment on the basis that it is not so made, such as under s 5(1)(d) of the Judicial Review Act.
97. Mr McCarthy submitted that where there was no recommendation being made by the committee, it was not exercising a function under the Health Act. I do not agree.
98. The power to review, which Mr McCarthy submitted the committee was considering, was a power under s 65 of the Health Act. That, on review, the committee decided there is no need to recommend an amendment, suspension, withdrawal or ending of the privileges, does not mean that the committee is exercising no power under the Health Act. This must be so because, for example, it can and did require Dr Gupta to provide information which it could only do under s 64 of the Health Act if it was exercising a function under the Act.
99. It seems to me that the proceedings were not futile on that ground, though, of course, I cannot say that they would have succeeded.
100. As to the other grounds, namely prerogative relief and the Human Rights Act challenge, their likely success was challenged but faintly by Mr McCarthy and, it seems to me, they were grounds that were open to Dr Gupta, though, again, I cannot say whether they would have succeeded.
101. Mr McCarthy further submitted that Dr Gupta was never a person aggrieved under s 3B of the Judicial Review Act for, he submitted, he must have known that his clinical privileges would continue beyond 15 December 2010 and not "expire" then. I cannot accept that. There was no indication in any of the pre-litigation correspondence that this was so, and every indication to the contrary. This was supported by the Policy, though there is no direct evidence that Dr Gupta saw this. References to "due for renewal" (see [37] above), "period of clinical privileges ... 15/12/2009 to 15/12/2010"
(see [41] above, "renewal for a period of one year" in the letter of 11 May 2010 (see [47] above) seem to me quite inconsistent with a view that the privileges, as was described later, "continue indefinitely unless and until [the committee and the CEO] acts under ss 62-71 of the Health Act": set out in the letter of 10 September 2010.
102. That Dr Gupta's privileges had been renewed for a lesser period than before with an apparent prospect for expiry at the end of the shorter renewal period seems to me a legitimate basis for grievance.
103. I am comforted in the conclusion I have reached by considering the leading formulation of the approach to deciding whether a person is aggrieved, namely what Ellicott J said (at 79) in Tooheys Ltd v Minister for Business and Consumer Affairs [1981] FCA 121; (1981) 36 ALR 64. It also seems to me that the circumstances of Mr Stammers, who was accepted to have been an aggrieved person, in Broadbridge and Anor v Stammers (1987) 16 FCR 296 (at 298) have relevant similarities with the circumstances faced by Dr Gupta.
104. The second aspect of this submission was that, as Dr Gupta was well out of time for judicial review (8 or 7 months), he needed an extension of time for bringing the proceedings and it was by no means certain that such would be granted. Until that extension of time was granted, there were no proceedings.
105. Strictly, this is correct and needs to be taken properly into account. Although not expressly referred to by Mr McCarthy, it has to be said that an applicant for an extension of time would ordinarily be required to pay the costs of the application, since they are seeking an indulgence from the court. I see no reason why the defendant should pay these costs. The costs of the unprosecuted application would usually be paid by the applicant also.
106. That the application for an extension of time was not pressed, however, does not mean that other costs of the proceedings, such as preparation of the Originating Application and so on, would not fall within the costs that could be ordered to be paid by the defendant if the circumstances warranted it.
107. Mr McCarthy's submission was principally that the extension of time would not be granted. There was a 7 or 8 month delay, which is admittedly a long delay. Mr McCarthy relied, however, principally on what he said were the lack of prospects of success in the principal proceedings as the reason why an extension would not be granted. He relied on the grounds already advanced, but I have dealt with them above. In addition, he submitted that Dr Gupta had suffered no detriment because there was "no adverse outcome". This, however, seems to me to be an exercise in hindsight. At the time he commenced these proceedings, Dr Gupta believed on reasonable grounds that on 16 December 2010, he would have no clinical privileges unless they were further granted and he did not know whether they would be further granted, aggravated because he did not know why on this occasion the usual grant of privileges for three years had, for unexplained reasons, been truncated to one year.
108. I cannot, however, and should not, hear the case in order to determine this point. See what fell from McHugh J, cited (at [78]) above. I will not hear the case, but I can find, and I do find, that it cannot be said that there were no prospects of the application for an extension of time being granted. Indeed, I think there were some prospects of success in the proceedings.
109. In all the circumstances, I do not accept that it was unreasonable for Dr Gupta to have commenced these proceedings nor that he had no prospects of being granted an extension of time, nor of succeeding in the application itself on the basis that the pre-litigation correspondence set out the correct position. Those findings, however, do not result in a costs award in Dr Gupta's favour, though they are a pre-condition to such.
110. It seems to me that it cannot be said that the behaviour of Dr Gupta was unreasonable. Certainly, it was unreasonable for Dr O'Leary to send her letter of 29 October 2010 in the terms she did. In the light of the contents of the letter from the ACT Government Solicitor of 10 September 2010 to Dr Gupta's lawyers, this letter was unreasonable. It was not merely "poorly phrased"; it was clearly written from a different and inconsistent understanding of the regulation of clinical privileges. That, however, was to a reasonable extent resolved by the order for costs against the defendant that I made on 19 November 2010. The letter had clearly caused the adjournment and its effective disavowal by the letter from the ACT Government Solicitor of 23 November 2010 means that. Dr O'Leary's letter of 29 October 2010 was, however, sent well after the proceedings had been commenced.
111. It seems to me also that the decision of the plaintiff to seek leave to discontinue is not "a surrender" in a "hopeless case" but a response to a supervening event. That event is the acknowledgement by the defendant that, contrary to the assertions in the pre-litigation correspondence, Dr Gupta's clinical privileges would not actually be expiring automatically at any time and that they could only be amended, suspended, withdrawn or ended by a proper process under Pt 5 of the Health Act.
112. The real question then is whether the conduct of the defendant up to the commencement of the proceedings was so unreasonable that they ought to be required to pay Dr Gupta's costs.
113. Clearly the whole regime of the grant and subsequent regulation of clinical privileges is uncertain. Even the statutory scheme under Pt 5 of the Health Act contains uncertainties. That, however, is not the fault of the MDAAC, though perhaps some criticism of such uncertainty could be levelled at ACT Health which, no doubt and properly, stands behind them in this litigation. It is at least curious that such an important element of the delivery of medical and dental services is so unclearly articulated. To rely on what "everyone knows" or, as the ACT Government Solicitor put it, what is "commonly known", when the Policy certainly does not state that and is apparently inconsistent with that common knowledge, is quite undesirable.
114. The understanding of Dr O'Leary and others was also different, it would appear, from what is "commonly known" and that is of concern for she appears to be the relevant administrator. I do not attach personal blame to her. Indeed, all the persons whose involvement I saw, that is the members of the MDAAC, especially Dr O'Leary, and the various solicitors of the ACT Government Solicitor, have my sympathy in their obviously sincere attempts to deal with this important matter when the primary materials with which they were working did not serve them well.
115. Mr McCarthy submitted that Dr O'Leary's first letter of 16 December 2009 was simply advising Dr Gupta that there would be another review of his clinical privileges prior to 15 December 2010. I cannot accept that. In the light of the explanation of how long clinical privileges last in the ACT Government Solicitor's letter of 10 September 2010, that is an interesting exercise in ex post facto hermaneutics, but, especially in the light of Dr O'Leary's letter of 29 October 2010, it cannot be accepted as her intention in the pre-litigation correspondence. Her subsequent letter makes it explicitly clear that she understood the grant of clinical privileges to be time limited and to expire unless renewed or a temporary grant (as she purported to give) made.
116. Where the conduct could be said to be unreasonable is that the MDAAC was engaged in a consideration of matters that they must have known would have the capacity to affect Dr Gupta in his employment in a way that was potentially serious. As I have found, Dr O'Leary and, therefore, I infer, the other members of the MDAAC, thought that unless renewed, Dr Gupta's clinical privileges would cease on 15 December 2010.
117. They were required under s 62(a) of the Health Act to comply with the rules of natural justice if they were carrying out a function under s 65, which they appear to have been doing. At least they thought they were doing this. That is so, even on the reinterpreted view set out in the ACT Government Solicitor's letter of 10 September 2010. They were also under at least an obligation of common sense to have a clear understanding of what their powers and duties were when dealing with such a matter. If, as the ACT Government Solicitor's letter stated, non-expiry of privileges was "commonly known", it was incumbent on Dr O'Leary and the committee to know that and act on it.
118. While I have sympathy with the predicament of the MDAAC, it seems to me that what it said in the pre-litigation correspondence, and the other members of the MDAAC's approach to the decision, was unreasonable, as was the refusal to provide Dr Gupta with the reason for the decision.
119. As a result, it seems to me that Dr Gupta is entitled to have his costs on discontinuance. These, however, do not include the costs of the application for an extension of time, which Dr Gupta would have to pay in any event.
120. To assist any taxing officer required to consider these costs in identifying these matters, I include in the costs of the proceedings which the defendant should pay the following costs:
(a) taking instructions for the proceedings, including the correspondence, but excluding all costs relating to the matter of alleged defamation and other matters referred to in correspondence and any instructions or correspondence relating to the application for an extension of time;
(b) drawing, engrossing and filing the Originating Application;
(c) instructions about and any consequential attendances and correspondence arising out of Dr O'Leary's letter of 29 October 2010;
(d) attendances and correspondence between the parties other than those solely referable to the extension of time application;
(e) other attendances and correspondence between Dr Gupta and his advisors save where they are properly solicitor-client matters; and
(f) the preparation of, and filing of, the notice of discontinuance.
121. I would then order that Dr Gupta pay the defendant's costs of the proceedings for the extension of time and I include in that:
(a) perusing the application in proceedings and supporting affidavit and schedule of correspondence and attendances to take instructions on those;
(b) attendance at court on the return date of 20 August 2010;
(c) other attendances and correspondence referable to the application for an extension of time.
122. As to the various subsequent attendances in court, it seems to me that while technically they were referable to the application for an extension of time, the course of the correspondence makes it clear that what was at issue were the substantive issues. As these attendances were, then, in reality about both the substantive proceedings and the application to extend time, there should be no order for costs of them. I do not, however, discount the order for costs made on 19 November 2010.
123. Finally, it seems to me that since Dr Gupta has been broadly successful he should have the costs of the hearing on 1 February 2011.
1. The plaintiff have leave to discontinue these proceedings.
2. The plaintiff file and serve a notice of discontinuance of these proceedings within fourteen days.
(a) there be no order as to costs of the attendances in court on 3 and 17 September, 15 October, 30 November and 8 December 2010.
(b) the plaintiff pay the defendant's costs of the making of the application for an extension of time to include the attendance in court on 20 August 2010;
(c) the order for costs made on 19 November 2010 is confirmed;
(d) otherwise the defendant pay the plaintiff's costs of these proceedings including the hearing on 1 February 2011.
I certify that the preceding one-hundred and twenty-four (124) numbered paragraphs are a true copy of the Reasons for Judgment herein of His Honour, Justice Refshauge.
Solicitor for the defendant: ACT Government Solicitor
# Gupta
Australian Capital Territory \[2011\] ACTSC 39
(1934) 52 CLR 455
(1997) 186 CLR 622
(2009) 231 FCR 199
(1981) 36 ALR 64
(1987) 16 FCR 296
(1998) 193 CLR 72