REASONS FOR JUDGMENT
THE COURT:
Introduction
1 Two medical practitioners, Dr Hugo Huu Hiep Ho (Dr Ho) and Dr Hien Thanh Do (Dr Do), commenced proceedings in 2002 for judicial review of decisions adverse to them made under the Health Insurance Act 1973 (Cth) (the Act). Those decisions included findings of Professional Services Review Committees, established under the Act, that they engaged in 'inappropriate practices' in connection with the initiation and rendering of medical services for which benefits were claimed under the Act. The proceedings brought by the two doctors were among a group of similar proceedings by other medical practitioners which were being case managed by a judge of this Court.
2 On 3 December 2004, the parties to all of these proceedings agreed, in substance, to treat an appeal from a decision made by his Honour on 30 November 2004, in one of their cases, as a test case. At that directions hearing the appeal, which had not then been instituted, was foreshadowed. Following discussions with counsel representing the various parties, his Honour made an order to give effect to their agreement. It stated, among other things, that:
'... all of the parties in the remaining proceedings ... accept that the outcome of the proceedings turn solely upon the result of the appeal...'
3 The appeal in the test case upheld his Honour's judgment. His Honour had dismissed challenges to preliminary decisions made under the investigative processes for which the Act provides. But he had set aside the decision of the Professional Services Review Committee in that case on the basis of its wrong approach to the interpretation of the Act and a relevant regulation made under the Act. In short, the Act and Regulationsprovide for the rendering of medical services to be 'inappropriate practice' if more than 80 services are rendered on a single day on more than 20 days in any relevant period. This is subject to an 'exceptional circumstances' exemption. Those exceptional circumstances are set out in reg 11 of the Act. His Honour held that the Committee had misinterpreted reg 11(b) which recognises that an absence of other medical services for patients of the person under review can be an exceptional circumstance.
4 When the Ho and Do matters next came before his Honour the respondents, who were the Health Insurance Commission (the Commission), the Director of Professional Services Review and other statutory decision-makers under the Act, argued that, in light of the appeal decision, the judicial review applications could not possibly succeed and should be dismissed. They filed motions seeking their dismissal. Essentially they contended that although the test case appeal had resulted in the Professional Services Review Committee decision being set aside, it had done so on grounds which had never been relied upon by Drs Ho and Do in the conduct of proceedings before the different Professional Services Review Committees hearing their cases.
5 His Honour, in substance, accepted the contention that the ordinary meaning of the word 'result' in his order of 3 December 2004 would mean that the decision of the Professional Services Review Committees in the cases of Drs Ho and Do would have to be set aside. However, he also accepted the respondents' argument that unless it could be shown that Drs Ho or Do had raised an issue in the Committees dealing with their matters about the exceptional circumstances referred to in reg 11(b) it would be futile to send their matters back to those Committees. He gave them a chance to show that the issue of exceptional circumstances was before the Committees by adjourning the dismissal motions and requiring them to file affidavits to that effect.
6 Drs Ho and Do seek leave to appeal against his Honour's orders. For the reasons that follow we consider that the outcome of the doctors' applications should not have been formally tied to the outcome of the test case appeal, whether by agreement or otherwise. Moreover, we consider the agreement relied upon to confine their grounds of review was of uncertain meaning and could not bind the Court.
7 We consider that leave should be given to appeal against his Honour's orders in the two cases and that the appeals should be allowed. The motions brought by the respondents should be dismissed and the judicial review proceedings should go ahead without any formal constraint flowing from the test case decision. That is subject, of course, to the effects of statements of law contained in that decision which bind judges at first instance according to the doctrines of stare decisis.
Nature and History of the Primary Proceedings
8 Dr Ho and Dr Do commenced proceedings in 2002 for the judicial review of decisions taken by officers and authorities acting under the Act. The officers and authorities were concerned with an investigation into whether the doctors had engaged in inappropriate practices in connection with the rendering or initiating of services for which Medicare benefits are payable under the Act.
9 The investigative and decision-making processes under the Act involve four stages. The first is the initiation stage when the Commission makes what is known as an 'Investigative Referral' under s 86 to the Director of Professional Services Review, an office created by the Act. The next stage is the conduct of an investigation by the Director into the matters so referred. The third stage involves a decision by the Director to set up a Professional Services Review Committee and make an 'Adjudicative Referral' to the Committee under s 93. That referral requires consideration by the Committee whether the conduct of the person under review constituted engaging in inappropriate practice. The fourth stage is concerned with the imposition of sanctions or penalties in the event that the Committee finds the person under review to have engaged in inappropriate practice.
10 The parts of the statutory scheme relevant to these proceedings are s 106KA of the Act and reg 11 of the Heath Insurance (Professional Services Review) Regulations 1999 (the Regulations). Section 106KA(1) provides that the rendering or initiating of 'a prescribed pattern of services' during a particular period shall be taken 'to have constituted engaging in inappropriate practice'. There is power, by regulation, to prescribe circumstances in which the rendering or initiation of services constitute 'a prescribed pattern of services' (s 106KA(3)). One such circumstance, prescribed by reg 10 of the Regulations exists where 80 or more professional attendances are rendered on each of 20 or more days in a 12 month period. This has been referred to in argument as 'the 80/20 rule'. However 'where exceptional circumstances' existed, during the relevant period, that affected the rendering or initiation of such services, the services shall not be taken to have constituted engaging in inappropriate practice (s 106KA(2)).
11 Regulation 11 prescribes 'exceptional circumstances' for the purposes of s 106KA(2). That regulation was made pursuant to power conferred by s 106KA(5). It is in the following terms:
'For subsection 106KA(5) of the Act, the following circumstances are declared as constituting exceptional circumstances:
(a) an unusual occurrence causing an unusual level of need for professional attendances;
(b) an absence of other medical services, for patients of the person under review during the relevant period, having regard to:
(i) the location of the practice of the person under review; and
(ii) characteristics of the patients of the person under review.'
12 Drs Ho and Do instituted proceedings seeking judicial review of the decisions of the Commission to make Investigative Referrals in relation to their conduct, the decisions of the Acting Director and Director of Professional Services Review on or about 14 February 2002 to set up Professional Services Review Committees and to make Adjudicative Referrals to them and the decisions of the Professional Services Review Committees to prepare and give to a Determining Authority established under the Act final reports dated 13 and 12 November 2002 respectively relating to the doctors.
13 The two doctors alleged jurisdictional error, errors of law and improper exercise of power in the making of the Investigative and Adjudicative Referrals. They also asserted in their applications that the preparation of the Committees' reports had involved various errors of law which they set out, and that the preparation of the reports was an improper exercise of power or was otherwise contrary to law. Their two applications were part of a group of ten similar applications by different medical practitioners which found their way into the docket of the learned primary judge.
14 On 27 October 2004 the learned primary judge heard a similar application brought by another doctor, Zelko Francis Oreb. On 30 November 2004 his Honour delivered judgment in that matter in which a Professional Services Review Committee was named as a respondent - Oreb v Willcock [2004] FCA 1520. He ordered:
'1. The findings of Committee 198, that Dr Oreb had engaged in inappropriate practice and that exceptional circumstances did not exist be set aside.
2. The matter be referred back to the Director of Professional Services Review to consider whether it is appropriate to establish a differently constituted committee to determine, in accordance with law, whether Dr Oreb engaged in inappropriate practice during the referral period.'
Directions Hearing of 3 December 2004 - An Agreement is Reached
15 On 3 December 2004 six of the group of ten matters were before his Honour for directions. They included the applications brought by Drs Ho and Do. Mr Mark Robinson of counsel,appeared for Drs Ho and Do and other applicants and Miss R Henderson for the Commission and other respondents.
16 Miss Henderson for the respondents, informed his Honour that they were contemplating an appeal against his decision in the Oreb matter. That decision involved a consideration of 'the 80/20 rule' and the 'exceptional circumstances' prescribed in reg 11. She expressed the opinion that the outcome of each of five of the applications before him (including Ho and Do) would be determined by views which his Honour had expressed in Oreb about the construction of the term 'exceptional circumstances'. The Commission and other respondents thought it unlikely that his Honour would be inclined to reverse his views in Oreb and that therefore the decision in each of the other cases was 'pre-ordained'.
17 His Honour asked whether there was any agreement between the parties about what was to take place. He observed that it was undesirable to have large numbers of cases remain without resolution. He said:
'It just seems to me that if the parties were to agree that the outcome of each of the proceedings is determined by the appeal in Oreb then the application might have some more force. What I don't want - I think it's contrary to the public interest that these cases continue on without resolution for much longer.'
He added that there was the possibility that various of the parties might come back to Court after the decision in Oreb asserting a multitude of unresolved issues.
18 Counsel for the Commission submitted that as the applications before the Court were then drawn the result in Oreb would govern the result in all the other matters. The following exchange occurred:
'Miss Henderson: Your Honour, I think my learned friends are in the same position as the respondents find themselves in, that is to say that the result of your Honour's view in Oreb will govern the outcome on each of those issues too, that's to say the adjudicative and investigative referrals.
Mr Robinson: We accept that, your Honour.
His Honour: You accept that?
Mr Robinson: In the main, yes, your Honour, except for Dr Wong, for example but yes we accept that, your Honour.'
19 Some further discussion followed and then his Honour said that what Mr Robinson had said seemed to go a long way toward the proposition that everything should be dealt with following the appeal in Oreb. Miss Henderson referred to the increased homogeneity of the pleadings following a change of legal representation. It had become possible to say 'yes' to a test case because the pleadings had reached a stage where that was feasible. The respondents would treat the results as 'determined by the decision in Oreb'. In further discussion, his Honour said:
'Well we have arrived at this situation then, that with the exception of what you've called the racial ground in each of the Lee matters, you accept that, putting on one side the Wong matter - the outcome of the application in each case would turn completely upon the result of the appeal in Oreb?'
Mr Robinson responded:
'Yes, is the answer. There are nuances, your Honour, there are always nuances but the nuances are more in the way an argument can be put rather than the argument itself. The answer is yes, your Honour.'
His Honour then said:
'All right. Well, if I were to note that agreement which I think Miss Henderson accepts - do you accept - are you a party to that agreement?'
Miss Henderson responded, 'Yes, your Honour'. After further discussion his Honour then said:
'So, the agreement would then be as follows, that except for what has been described as the racial issue in the two Lee matters, all of the parties in each of the remaining proceedings accept that the outcome of the proceedings turn solely upon the result of the appeal in Oreb.'
The Orders Made on 3 December 2004
20 Following the discussions outlined above, his Honour made orders in the following terms in each of the Ho and Do matters and, apparently, in other applications then before him:
'1. Leave is granted to file and serve the notices of motion of the Respondent in the matters of Do, Ho, Lee, Lee and Bartos, returnable instanter.
2. Leave is granted to file and serve the notice of motion of the applicant in Wong, returnable instanter.
3. Subject to issues raised in the constitutional argument, and except for the 'racial issue' in the two Lee matters ..., all of the parties in the remaining proceedings (Wong, Do, Ho, Lee, Lee and Bartos) accept that the outcome of the proceedings turn solely upon the result of the appeal in Oreb (being an appeal of the judgment contained in Oreb v Willcock [2004] FCA 1520).
4. On the basis of this agreement, the hearings listed in the week of 6 December 2004 in the matters Wong, Do, Ho, Lee, Lee and Bartos, are vacated, with the exception of two Lee matters ... which are listed on 8 December 2004.
5. Argument in the two Lee matters ... listed on 8 December 2004 will turn solely upon the 'racial issue' and its effect upon the application of the 'exceptional circumstances' provisions contained in s106KA of the Health Insurance Act and Reg 11, and also the s92 issue.
6. Leave is granted to file further amended applications in the two Lee matters. ...
7. The applicant is granted leave to file and serve opening submissions in the two Lee matters. ...
8. The respondent is to file and serve opening submissions in the two Lee matters ... by close of business on Monday 6 December 2004.'
The Oreb Case - the Judgment at First Instance
21 In the Oreb case, Dr Oreb had been found by the Professional Services Review Committee to have rendered 80 or more services on each of 33 days between 1 January 2000 and 8 August 2000. He submitted to the Committee that there were exceptional circumstances which applied to his practice during the referral period. These circumstances related to patient demand, the ethnic profile of his patients, his own ethnicity and linguistic skill which enabled him to communicate with them, his inability to attract and retain sufficient medical services to the practice and his work patterns. Dr Oreb spoke Croatian. He had been born in Dalmatia which was regarded by his Bosnian and Serbian patients as an area which had been neutral in the Bosnian and Serbian conflict. He said 20 per cent of his patients were refugees or victims of torture or trauma. The majority came from non-English speaking backgrounds. Dr Oreb also told the Committee that he did not open his practice on Wednesdays or weekends during the referral period. He did not have an appointment system although he had recently introduced one. He said also that there was a lack of other Serbo-Croatian speaking doctors in his area and so his patients came from all over Sydney. He did not know of any other Serbo-Croatian doctors in the areas from which those patients came.
22 The Committee which considered Dr Oreb's case was of the view that s 106KA(2) of the Act was limited to exceptional circumstances existing on 'a particular day or particular days' which might be thought to describe intermittent or episodic events. Regulation 11(b) appeared to include what might be understood as on-going circumstances. The Committee was of the view that the circumstances cited by Dr Oreb were not 'exceptional' because they were foreseeable and should have been managed so as to bring attendance records down to acceptable levels. It therefore found that he had engaged in inappropriate practice and did not consider that exceptional circumstances existed.
23 In his judgment on Dr Oreb's judicial review application, which he delivered on 30 November 2004, his Honour rejected challenges to the Investigative and Adjudicative Referrals - Oreb v Willcock [2004] FCA 1520.
24 Dr Oreb's attack on the Committee report was characterised by his Honour as one which went to the proper construction of what constituted 'exceptional circumstances' under s 106KA(2) and reg 11. Despite the Committee's opinion that the meaning of 'exceptional circumstances' was unclear and that there was some tension between s 106KA(2) and reg 11(b) his Honour found no such ambiguity. He held that the approach taken by the Committee placed an unwarranted gloss on the meaning of those provisions.
25 His Honour expressed the opinion that the reference to 'an unusual occurrence' in reg 11(a) would restrict that paragraph to intermittent or episodic events. However reg 11(b) was broader and covered an absence of other medical services during the relevant period which could embrace the whole of the period to which the referral related. Exceptional circumstances under reg 11(b) could therefore include an absence of other medical services during that period having regard to the location of the practice and the characteristics of the patient. There was nothing in its language which restricted this circumstance to episodic events. His Honour said that reg 11(b) seemed to have been deliberately drawn so as to broaden the category of circumstances beyond those contemplated by reg 11(a).
26 His Honour also found that the Committee's approach to the construction of the provisions would place a heavier onus upon a person contending that ongoing circumstances were exceptional than the onus on a person arguing that an episodic or intermittent event was exceptional. On this basis he found that the Committee approached its task informed by an incorrect interpretation of the 'exceptional circumstances' provision and that this constituted an error of law going to jurisdiction.
27 None of the other grounds of jurisdictional error alleged in relation to the report of the Committee were made out.
The Oreb Appeal
28 Dr Oreb appealed against the judgment of the learned primary judge in relation to the Investigative and Adjudicative Referral Decisions. The respondents cross-appealed against the orders setting aside the Committee's decision. The cross-appeal went substantially to the construction of s 106KA and reg 11. There was also a challenge by way of the cross-appeal to the direction given by his Honour that the matter be remitted to the Professional Services Review Committee differently constituted. Judgment was delivered by the Full Court on 16 September 2005 - Oreb v Willcock (2005) 146 FCR 237.
29 Black CJ and Wilcox J agreed with Lander J that the appeal should be dismissed. They allowed the cross-appeal to the extent that the orders made by the learned primary judge on 30 November 2004 were varied so that the Professional Services Review Committee did not have to be reconstituted differently upon reconsideration of the referral.
30 Black CJ and Wilcox J noted that Dr Oreb had not specified in his submissions to the Committee whether he was relying on exceptional circumstances within the ordinary meaning of that term or reg 11, or both. They found that he certainly had not relied on par (a) of reg 11. It was therefore possible to 'pass over that paragraph'. However their Honours allowed that he may have relied upon par (b) of reg 11 and on that basis they indicated their view of its proper construction. They disagreed with a particular aspect of the reasoning of Lander J in relation to reg 11(b) but that disagreement is not material for present purposes. They did agree with Lander J that concepts of foreseeability and avoidance were immaterial to the application of reg 11(b). So too, was practice management (at [14]):
'The only relevant question was whether there was an absence of other medical services, having regard to the location of Dr Oreb's practice (Newtown) and the characteristics of his patients (predominantly people with a connection to the former Republic of Yugoslavia).'
31 Their Honours noted that Dr Oreb's submission did not specifically address the terms of reg 11(b). However the matters he raised if factually correct, might arguably support the inference that there was an absence of other medical services for patients in the period under review. That being so, the possible application of reg 11(b) should have been addressed by the Committee in terms, and in reasoning that was free of consideration, irrelevant in the context of reg 11, of patient management measures that might have been available and desirable.
The Orders the Subject of the Application for Leave to Appeal
32 On 13 March 2006 each of the respondents in the proceedings before the learned primary judgerelating to Drs Ho and Do filed motions seeking orders that the proceedings be dismissed pursuant to order 3 made by his Honour on 3 December 2004 and that the applicant pay the respondents' costs of the application and of the motion.
33 The motions were returnable on 5 April 2006 and on 19 April 2006 his Honour made the following orders in the two matters - Ho v Grigor [2006] FCA 417:
'1. Set aside Order 3 made by me on 3 December 2004.
2. Direct the applicant, within 14 days of today's date, to file any evidence on which he proposes to rely in support of any argument that the applicant relied upon Regulation 11(b) before Professional Services Review Committee No 293.
3. Stand over the further hearing of the motion to a date to be fixed.
4. Grant liberty to the parties to approach my associate to fix a date for completion of the hearing of the motion.
5. Costs reserved.'
It is these orders which are the subject of the applications for leave to appeal brought by each of Dr Ho and Dr Do.
The Reasons for the Challenged Orders
34 In his reasons for judgment published on 19 April 2006 relating to the orders which are now under challenge, his Honour noted that the respondents' motions relied upon the reasons given by the Full Court for the proper construction of s 106KA(2) of the Act and reg 11(b) of the Regulations. The respondents argued that Dr Oreb had failed on all of his grounds of review other than on the construction of reg 11(b). They argued that neither Dr Ho nor Dr Do had raised, before the relevant decision-makers, a claim of exceptional circumstances under reg 11(b), it being irrelevant to the facts in their cases. On this basis the respondents contended that there is nothing in the reasons given by the Full Court in Oreb which could support a favourable outcome for Dr Ho or Dr Do.
35 On the other hand, Drs Ho and Do argued that the 'result of the appeal in Oreb' referred to in order 3 as governing the outcome of their proceedings referred to the order of the Full Court. The cross-appeal had been dismissed and the Full Court had ordered that the matter be remitted to the Professional Services Review Committee to determine according to law. On that basis Drs Ho and Do said that orders must be made in their proceedings setting aside the findings that they engaged in inappropriate practice and that their matters should also be remitted to the relevant Professional Services Review Committees.
36 His Honour accepted that unless his order was set aside and, subject to the question whether Drs Ho and Do did raise before the relevant Committees the possible application of reg 11, the notices of motion would turn upon the proper construction of his order of 3 December 2004. His Honour then recited the background leading up to the making of the orders on 3 December 2004 including some of the exchanges that occurred between counsel and himself on that day.
37 After setting out the relevant statutory provisions and reg 11 his Honour considered the reasons for decision of the Full Court in Oreb. He said (at [24]):
'Importantly, on the appeal, all of their Honours were of the view that Dr Oreb did not rely before the Committee on Regulation 11(a). Lander J was of the view that Dr Oreb was relying on Regulation 11(b). Black CJ and Wilcox J were of the view that Dr Oreb may have relied on Regulation 11(b). The issues on the appeal were therefore as to the proper construction of s 106KA(2) and Regulation 11(b)...'.
38 His Honour acknowledged that in considering the proper construction of reg 11, Lander J had gone into some detail about the construction of reg 11(a). However it was plain, in his Honour's opinion, that Lander J had done so only in order to consider reg 11 as a whole so that he could arrive at a proper construction of reg 11(b). He said that the brief reference to reg 11(a) in the joint judgment of Black CJ and Wilcox J was for the same purpose. This much was plain from their Honours' comment in the joint judgment at [11] that Dr Oreb had not relied on reg 11(a).
39 His Honour then discussed the construction of his order of 3 December 2004. He said that the context in which the order was made as appeared, in part, from the transcript, showed that the parties proceeded on the basis that all issues whether of fact or law in the remaining cases would be resolved by the result of the appeal in Oreb. The outcome of the appeal in Oreb expressed in orders of the Full Court would, without more, determine the outcome of the remaining proceedings, including the matters of Dr Ho and Dr Do.
40 Construed in this way 'result' was given its ordinary English meaning. This was reinforced by the use of the word 'solely' in the order which showed that the intention of the parties was that there were no new issues of fact or law to be determined in the remaining proceedings. It followed, in his Honour's opinion, that upon the proper construction of the agreement reflected in order 3 the proceedings before him would have to be remitted to the relevant Professional Services Review Committee in each case to be determined according to law.
41 Nevertheless, his Honour accepted the submission made by the respondents that neither Drs Ho or Do had raised any issue in the Committee about the application of reg 11(b). It would therefore be a futile exercise to remit the matter to a Committee. It would be contrary to the underlying assumption reflected in order 3 that there was an issue raised by the matters of Dr Ho and Do which would be resolved by the decision on appeal in Oreb. His Honour then said (at [33]):
'Thus, it would be contrary to the interests of justice to remit the matter in the absence of any issue of jurisdictional error by the Committees in relation to the construction and application of Regulation 11(b).'
42 His Honour considered whether order 3 should be set aside. In a related application, Wong v Professional Services Review Committee No 339 [2005] FCA 1351, he had refused to make an order setting aside order 3 to permit Dr Wong to run a fresh ground of review said to be previously unknown to the legal advisors. He referred to a statement he had made in Wong that the principle of finality of litigation apply to interlocutory orders, subject to a moving party establishing that new facts had come into existence. In the case before him of Drs Ho and Do it could not be said that new facts had been discovered which could not have been known on 3 December 2004. His Honour said (at [36]):
'Rather, through no fault of the legal advisers of the parties, the reasoning process of the Full Court in Oreb opened up a distinction between the construction of s 106KA(2) and Regulation 11 which had not previously been drawn.'
His Honour accepted that in rare cases the discovery of new facts would not be an essential requirement for the exercise of the power to set an order aside. Where the enforcement of the order would work an injustice and bring about a result contrary to its very purpose, the Court must have power under s 23 of the Federal Court of Australia Act 1976 (Cth) to set the order aside.
43 His Honour cited the substantial public interest in the prompt resolution of matters arising under Pt VAA of the Act. He said (at [39]):
'It would therefore be contrary to the public interest and, as I have said, contrary to the underlying purpose of the Order, to permit it to be used so as to further delay the resolution of these matters unless there is a live issue as to the application of Regulation 11(b), with evidence that the issue was in fact before the relevant Committee at the time of the hearings in 2002.'
44 His Honour discussed the effect of setting aside order 3. It was not a consequence of setting that order aside that the applicants would be at liberty to proceed unconstrained by what had happened on 3 December 2004. That is to say, it was not open to them to conduct full judicial review proceedings before his Honour as 'though no concession was ever made'.
45 While order 3 would not take effect as an order his Honour held that it was appropriate for the Court as a Chapter III Court exercising jurisdiction in respect of a 'matter' to treat what was said by both parties on 3 December 2004 as a concession. That was expressed in order 3 and his Honour proposed to treat it as such. The concession identified by his Honour was in the following terms (at [43]):
'The concession was that as to those matters which fell into the second tranche for hearing in the week commencing 6 December 2004, there were no issues of fact or law which would not be determined by the result of the appeal in Oreb.'
46 His Honour held it to be implicit in the concession made by the applicants that, in relation to the 'exceptional circumstances' question, the remaining proceedings were on all fours with the matter of Oreb. The respondents must be taken to have proceeded on the same basis. Given that the reasons of the Full Court had exposed the distinction between the application of s 106KA(2) and reg 11(b), it was open to the parties to approach the Court in order to prevent its process from being used to work an injustice.
47 If the respondents were correct the injustice would consist of a further delay in carrying out the scheme under the Act by sending the matters to a Committee in the absence of any evidence whatsoever of jurisdictional error on the part of the Committee. His Honour had no view either way as to whether there was a live issue raised by Drs Ho and Do in the Committee, although it was to be noted that Mr Robinson had conceded on the hearing of the motions that the matters were not 'in the main' concerned with reg 11(b).
48 His Honour said he would give the applicants and the respondents an opportunity to address him on the question whether the doctors had relied on reg 11(b) before the Committee. He recognised that it might not have been necessary for the applicants to have referred specifically to reg 11(b). However it should appear from the transcript, the evidence and the written submissions, whether the practitioners could be taken to have relied on that regulation.
49 His Honour concluded (at [48]):
'I must stress that it will not be open to Dr Do or Dr Ho to rely upon any other section of the Act or any other part of the Regulations. In particular, it will not be open to them to rely on Regulation 11(a). As I have already pointed out, Regulation 11(a) was not in issue in Oreb. The force of the concession made on 3 December 2004 precludes Dr Do and Dr Ho from raising what is in fact a new argument that was never in issue in Oreb, either at first instance or on appeal.'
The Proposed Grounds of Appeal
50 His Honour's order being in form and in substance interlocutory, it was necessary for the applicants to seek leave to appeal against it. There is no appeal as of right in such a case. The argument on the application for leave to appeal focussed almost entirely on both sides on the merits of the proposed appeal and was also to be taken as the argument on appeal if leave were granted. It is convenient to set out the proposed grounds of appeal:
'1. His Honour erred in finding (at [33] of the reasons for judgment) that it would be a futile exercise to remit the matter to the Professional Services Review Committee ("the Committee").
2. His Honour erred in finding (at [33] of the reasons for judgment) that it would contrary to the interests of justice to remit the matter to the Committee in the absence of any issue relating to regulation 11(b). (sic)
3. His Honour erred in finding (at [37] of the reasons for judgment) that remitting the matter to the Committee would work an "injustice" and would be contrary to the purpose of order 3 dated 3 December 2004.
4. His Honour erred in finding (at [34] to [37] of the reasons for judgment) that order 3 of the orders dated 3 December 2004 should be set aside.
5. His Honour erred in finding (at [39], [45] and [47] of the reasons for judgment) that the process of the applicants being dealt with by the Commonwealth should not be further delayed unless there is a live issue as to the application of Regulation 11(b).
6. His Honour should have found that there was merit in permitting the applicant (sic) to put their judicial review cases on other grounds, including arguments based on regulation 11(a).
7. His Honour erred in finding (at [41] to [44] and [48] of the reasons for judgment) that the agreement founding the consent orders of 3 December 2004 constituted a "concession" by the appellants that:
a. There were no issues of fact of law which would not be determined by the result of the appeal in Oreb;
b. The remaining proceedings were "on all fours" with the matter of Oreb; and
c. The concession precludes the appellants from raising new arguments that were never in issue in Oreb, either at first instance of an appeal. (sic)
8. His Honour erred in finding (at [41] & [48] of the reasons for judgment) that in the further conduct of the respondents' motion or in the future hearing of the proceedings generally it was not open for the appellants to:
a. Seek to rely on any section of the Health Insurance Act 1973 or any provision of the regulations other than regulation 11(b); or to
b. Seek to conduct full judicial review proceedings in the Federal Court of Australia.'
The Orders Sought
51 The orders sought by the applicants if they are given leave to appeal and if their appeal is successful, are in the following terms:
'1 That the orders of Mr Justice Jacobson dated 19 April, 2006 be set aside;
2 The respondents' notice of motion filed 13 March 1006 be dismissed with costs.
3 The findings of the respective Committees that the appellants had engaged in inappropriate practice and that exceptional circumstances did not exist be set aside;
4 The matters be remitted to the appropriate Committee to determine the respective Adjudicative Referrals according to law.
5 Costs of the proceedings below and costs of the appeal; and
6 Such further or other order as the Court thinks fit.'
The Nature of the Order of 3 December 2004
52 There is a threshold question about the nature of order 3 made on 3 December 2004. The Court is empowered by s 23 of the Federal Court Act, in relation to matters in which it has jurisdiction, 'to make orders of such kinds, including interlocutory orders, and to issue or direct the issue of writs of such kind as the court thinks appropriate'. The question arises whether order 3 made on 3 December 2004 was an order at all.
53 The ordinary meaning of the term 'order' in the relevant context is 'an authoritative direction, injunction, mandate; a command, oral or written; an instruction'. In the curial context it means 'a direction of the court or a judge other than a final judgment' - Oxford English Dictionary. In legal proceedings it may encompass a variety of decisions which do not necessarily involve directions, commands or instructions. In R v Edwards (1884) 13 QBD 586 at 595 Bowen LJ asked rhetorically '... how can that be an order which neither expressly nor impliedly directs anything to be done, nor says that any consequences are to follow if a thing is not done?'. The case concerned a determination of compensation by Justices for injurious affection to land flowing from the construction of a railway. No order for payment was involved. Bowen LJ said:
'It is not in the popular sense of the term an order and I can see nothing in the statute [the Land Clauses Act 1845] which makes it equivalent to an order.'
The 'popular sense' is overtaken by statutory extension. Statutory context will be a determinant in the meaning to be given to a word and the word 'order' is no exception. In R v Recorder of Oxford; Ex parte Brasenose College [1970] 1 QB 109, Bridge J acknowledged a degree of ambiguity in the word 'order' as used in legal proceedings (at 114):
'... clearly it may mean - perhaps a linguistic purist would say that its most accurate connotation was to indicate - an order requiring an affirmative course of action to be taken in pursuance of the order, but it is equally clear that the word may have a much wider meaning covering in effect all decisions of courts.'
54 The power of the Court, conferred by s 23, to make orders including interlocutory orders is undoubtedly a wide one. It must be capable of application to a considerable range of subject matter jurisdictions and a diversity of matters within those jurisdictions. Broadly speaking, any decision of a court which imposes an obligation on one or more of the parties (eg procedural directions andinterlocutory or final injunctions) or finally determines the rights and liabilities of the parties to litigation will fall within the scope of an 'order' under s 23. The dismissal of an action involves a rejection of a claimed entitlement to relief and to that extent determines rights and liabilities in the proceeding. A final judgment by way of a declaration is 'an order' if it determines, in a binding way, rights and/or liabilities of one or more of the parties. This is so even though it does not take the form of a direction - Warramunda Village Inc v Pryde (2002) 116 FCR 58 at [65] to [70] per Finkelstein J and cases there cited. However as Gummow and Hayne JJ said in Graham Barclay Oysters Pty Ltd v Ryan (2002) 211 CLR 540 (at 590 [128]):
'"Interlocutory declaration" is a form of order not known to the law...'
55 Order3 of his Honour's orders of 3 December 2004 throws up the kind of problem which arose in the Family Court of Australia in In Marriage of Evans (1992) 108 FLR 14. In that case consent orders had been made in earlier proceedings between the same parties that the husband pay a sum of $400,000 to the wife. Particular paragraphs numbered 8(a) and 8(b) of those orders purported to characterise the nature of components of the payments so directed. This was done pursuant to an agreement between the parties as it formed an element of the consent orders.
56 In subsequent proceedings when a dispute had arisen about the operation of par 8, Moss J said (at 17):
'... in my opinion, it is impossible to construe the form in which either "8(a)" or "8(b)" is cast as being capable of amounting to or of constituting an order of the Court even if a judge of the Court purported to pronounce it as such. This is because there is nothing for an order to operate upon. The form of wording places no obligation on either party to do or refrain from doing anything. It is not a declaration. It is not a direction. In particular, it is not an order for the payment of money. It cannot be said to be or to reflect a decision by the Court on a question at issue between the parties in the proceedings (Halsbury, 4th ed, vol 26, par 501), and while not all orders require enforcement, for example, an order determining status or a decree of divorce, (Halsbury (supra), at 565),it is not such an order.'
57 The primary difficulty attending order3 is that it is difficult to see how, on any view, it is an order within the contemplation of s 23 or any other power conferred upon the Court. It should not have been included in the orders made on 3 December 2004 as such. In so saying, it must respectfully be acknowledged that his Honour was endeavouring to avoid duplication and delay in a group of related administrative processes under the Act which had already been considerably protracted. He sought to identify a basis for agreement between the parties such that the Oreb appeal would be treated as effectively determinative of the outcomes in most of the other applications. An alternative and proper course would have been to adjourn the pending judicial review applications until the outcome of the Oreb appeal was known so that, in the light of that judgment, the parties would be in a position to assess the utility of proceeding either to prosecute or defend their respective matters.
58 There is a second difficulty in order3 going beyond its juristic nature. That is its meaning. Its core words are:
'... all the parties in the remaining proceedings ... accept that the outcome of the proceedings turn solely upon the result of the appeal in Oreb...'
The applicants and the respondents were in dispute before his Honour on 5 April 2006 about the meaning of the agreement and therefore the meaning of order3. This is reflected in his Honour's reasons for judgment on 19 April 2006. The dispute persisted before this Full Court. The applicants took the view that the agreement, said to have been reflected in the terms of order3, referred to the formal outcome of the appeal proceedings independent of the reasoning which led to that outcome. The respondents submitted that the 'result' referred to the issues decided in the appeal, rather than the formal outcome.
59 The orders made by his Honour on 3 December 2004 were made three days after he had delivered his judgment at first instance in Oreb. At 3 December 2004 no appeal had been instituted and, a fortiori, no cross appeal. The content of the agreement said to underpin order 3 could not therefore be defined by reference to any ground of appeal or cross-appeal. The transcript was uninformative as to the understanding of the parties when they accepted the approach proposed by his Honour. They may well have been operating upon different assumptions about the bases on which the appeal and any cross-appeal were to proceed.
60 It is generally undesirable to make, by agreement or otherwise, any order which has the purpose or effect, in a formal way, of tying the outcome of pending proceedings in one matter to the outcome, however defined, of pending proceedings in another matter between different parties. The issues which will determine the outcome of the leading case are beyond the control of the parties in the case which follows. The applicants submit, in effect, that the order to be made in their proceedings has now been predetermined, pursuant to their agreement and/or order3. They say, in effect, that because there has been an order in the Oreb appeal setting aside the decision of the Professional Services Review Committee in that case and remitting it to the Committee for reconsideration, the same orders must now be made in their proceedings. No order effecting a contingent disposition of that kind can be made. No agreement of the kind suggested by the applicants in this case can bind the Court.
61 Where the Court is asked to set aside the decision of an official whether by consent or otherwise, it must first be satisfied that the order it is asked to make is, as with all consent orders, within power and appropriate. In the context of judicial review, it cannot simply set aside an official decision on the basis of the parties' consent unless some ground such as error of law has been identified to its satisfaction. It may be that so much can be achieved by the parties agreeing on the terms of the error made by the decision-maker and pointing, in a joint submission to the Court, to the occurrence of that error - Lobo v Minister for Immigration and Multicultural and Indigenous Affairs (2003) 132 FCR 93 at [56] and cases there cited.
62 Moreover if the Court is asked, as in this case, to remit a matter to a decision-maker to decide according to law the Court must point out the error to be rectified or the relevant principle of law to be applied. That is a matter of both principle and practical necessity. The Court fails to exercise its judicial function if it makes such an order solely on the basis of the parties' consent without addressing the question whether it has power to make it. Absent error, the Court has no such power. At a practical level, an order remitting a matter to a decision-maker for reconsideration 'according to law' has no useful meaning unless it indicates to the decision-maker the error made on the previous occasion. This can be done by way of a specific direction in the order remitting the matter or by a short statement of reasons for the order which identify the agreed error.
63 What follows from the preceding is that whether or not leave to appeal is granted in this case the Court should not make an order reinstating order3 made on 3 December 2004. That would be the effect of the first of the orders sought in the draft notice of appeal.
Whether Leave to Appeal should be Granted
64 The applications for leave to appealpresently before the Court concern interlocutory orders which are of considerable significance to the future conduct of the judicial reviewapplications and which also raise, as indicated in the preceding section of these reasons, important questions of principle and practice.
65 Order 52 r 10(2) of the Federal Court Rules provides, inter alia, that an application for leave to appeal against an interlocutory judgment may be made by a motion on notice to a single judge or to the Full Court. The principles governing applications for leave to appeal under this rule were discussed in Johnson Tiles Pty Ltd v Esso Australia Ltd (2000) 104 FCR 564 at [42] to [45] and it is not necessary to repeat them in detail here. The first important criterion for the grant of leave is that the decision at first instance is attended with sufficient doubt as to warrant its reconsideration on appeal. The second is that substantial injustice could result if leave were refused - Decor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397; Minogue v Williams [2000] FCA 125 at [18]. If the orders, although interlocutory in form, have the legal effect of finally determining the rights of the parties then '... a prima facie case exists for granting leave to appeal' - Ex parte Bucknell (1936) 56 CLR 221 at 225.
66 In the present case the orders made by his Honour, although not finally disposing of the application were premised upon the proposition that the applicants would be confined in the conduct of their proceedings to an argument based upon reg 11(b) of the Regulations if, and only if, they had relied upon it or it was an issue arising out of the materials before the Professional Services Review Committees.
67 Discretionary considerations might have led this Court to refuse leave on the basis that it would be preferable to await the outcome of the motions for dismissal. However no party has advanced such a discretionary argument and the Court has had the benefit of full submissions on the issues which, given his Honour's approach, would inevitably determine the future shape of the doctors' applications for judicial review.
The Disposition
68 Leave to appeal in each case should be granted. For the reasons already set out the orders of his Honour made on 19 April 2006, so far as they set aside order3 made on 3 December 2004, should stand. The remaining question is whether or not the applicants are precluded, in their pending judicial review proceedings, from relying upon anything other than s 106KA and reg 11(b). His Honour's reasons for judgment make it clear that the only way in which they will be able to successfully defeat the adjourned motions for the dismissal of their applications will be if they can show that the application of reg 11(b) was an issue before the Committee in each of their cases even if not explicitly raised before the Committee.
69 That confinement would purportedly give effect to the agreement reflected in order3 made on3 December 2004. For the reasons already given, that agreement does not have any certain meaning. It cannot bind the Court, nor can it bind the parties. To the extent that the second order made by his Honour on 19 April 2006 in each case would seek to implement that limitation, it cannot stand. And to the extent that the respondents' motions filed 13 March 2006 seek to give effect to that agreement, they should have been dismissed. Contrary to the orders sought in the draft notice of appeal, there can, for the reasons already outlined, be no order made setting aside the findings of the Professional Services Review Committees nor any order remitting the matters to those Committees.
70 In the course of argument the Court put to the parties that if it were of the view that the order in par 3 should never have been made and that the agreement could not be enforced the appropriate order would be dismissal of the respondents' notice of motion in each case. The parties accepted that proposition as a logical consequence of the hypothesised view put to them. We will therefore order that the motions be dismissed.
Conclusion
71 Leave to appeal will be granted and the appeals will be allowed. In each case pars 2 to 5 of the orders made by His Honour on 19 April 2006 are set aside. The following orders will be made in lieu thereof:
- The respondents' notice of motion filed 13 March 2006 be dismissed with costs.
2. The respondents pay the applicant's costs of the application for leave to appeal and of the appeal unless they file written submissions within 14 days of the delivery of this judgment seeking a different order.
I certify that the preceding seventy one (71) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Court.