Holmes v Mercado

The committee proceedings 11 Committee 143 held a meeting on 11 November 1999 at which it decided to conduct a hearing into the referred matter. The committee identified the types of services provided by Dr Mercado that it wished to examine and requested Dr Holmes to obtain further information from the Commission in relation to those services. 12 On 25 November 1999 Dr Holmes sent notices to the owners of three clinics at which Dr Mercado rendered services during the review period, requesting information concerning certain patients randomly selected by the committee. 13 It seems that some, at least, of the requested clinical records were supplied. Dr Holmes had them copied. However, before the committee met to consider this material, Ebsworth & Ebsworth, solicitors acting for Dr Mercado, wrote to the secretary of the committee, Mr John Irvine, expressing certain concerns. 14 The solicitors raised three matters. First, they contended that some of the material contained in the Commission's referral was irrelevant to the committee's task. They cited the record of Dr Hegarty's meeting with Dr Mercado on 6 June 1997 and some patient records. In relation to the record of Dr Hegarty's meeting, they referred to a decision of Einfeld J in Tankey v Adams [1999] FCA 683 at paras. 106-107. His Honour there held that evidence of counselling of a medical practitioner in respect of an earlier period was irrelevant to a referral in respect of a later period, other than upon the question whether counselling might be "a useful or appropriate component" of the committee's final determination. 15 Second, the solicitors sought an assurance that Dr Mercado would be provided with copies of all documents upon which the committee intended to rely. Third, they sought access to the Director's report on the review. We are not concerned with either the second or third matters; or, in relation to the first matter, the patient records. 16 Mr Irvine responded to this letter on 16 December 1999. In relation to irrelevant material, he wrote: "The Ministerial Guidelines as to Form and Content of Referrals to the Director of Professional Services Review (Director) list the type of information and material that may be included in a Referral. The matters you refer to as irrelevant are addressed in both the Ministerial Guidelines and the Explanatory Statement, both of which I have enclosed in an endeavour to assist you. … In the context of Dr Mercado's overall treatment of patients, the Committee may consider matters other than the specific services referred, eg medical, social and family history, allergies and immunisation status etc. Such matters can be of importance in assessing the referred services. You may rest assured, however, that the Committee will restrict its findingsto referred services. Under this heading, you make further reference to material and information contained in the Referral which you consider to be '… irrelevant, confusing and potentially prejudicial material …'. As stated above, the Ministerial Guidelines as to Form and Content of Referrals clearly list the type of material and information that may be included in a Referral. I trust this will resolve your query." (original emphasis) 17 On 21 December 1999 the committee notified Dr Mercado of a hearing to be held on 21 January 2000. The notice stated that "the hearing concerns your conduct in relation to services rendered by you during the Referral Period"; identified as 1 July 1997 to 30 June 1998. It identified the issue to be determined as whether Dr Mercado had "engaged in inappropriate practice in connection with the rendering of some or all of those services". The notice went on: "Particulars of the Committee's concerns as at the date of this notice are: · whether you were able to provide an appropriate level of clinical input into the services rendered during the Referral Period, with particular reference to your rendering of the services identified on the attached lists; and · whether the services that you rendered during the Referral Period were reasonably medically necessary for the care of the patients to whom they were rendered. Further concerns may emerge during the hearing. You will be made aware of any other concerns that arise and will be given adequate opportunity to address the Committee." 18 On 22 December 1999 Ebsworth & Ebsworth again wrote to Mr Irvine. They raised several matters. First, they questioned the relevance of the issue particularised at the second dot point, that is whether services "were reasonably medically necessary for the care of the patients to whom they were rendered." The solicitors suggested this was not a matter covered by the Commission's referral. Second, the solicitors expressed concern about the final paragraph of the letter stating that: "[f]urther concerns may emerge during the hearing". They suggested the committee was limited to the subject specifically mentioned in the referral. Third, they complained about insufficient particulars. Fourth, they said: "We again voice our concern as to irrelevant and prejudicial material being put before the Committee. A most obvious example is any material that refers to previous counselling and alleged conduct by Dr Mercado outside the Referral period. We have previously drawn your attention to the decision of Einfeld J in Tankey at paragraphs 106 and following where his Honour clearly sets out the prejudicial and irrelevant nature of this material. If any such material is to put before the Committee the whole process will be irrevocably tarnished." 19 Mr Irvine responded that the committee would deal with those issues at the hearing on 21 January. 20 When the committee met on 21 January, Dr Mercado attended, in company with his wife and baby son, Mr Garry Livermore of counsel and Ms Aurora Kostezky, a solicitor employed by Ebsworth & Ebsworth. The chairman of the committee made a preliminary statement in which he referred to the correspondence that had passed between Ebsworth & Ebsworth and Mr Irvine. During that statement, he referred to Einfeld J's decision in Tankey v Adams and said: "Dr Mercado, the committee acknowledges your concerns in these matters, and assures you that it will only consider the information in the referral which it considers relevant to your conduct in connection with the referred services." 21 Section 103(1) of the Health Insurance Act provides that a person under review "is not entitled to be represented at the hearing by a lawyer or another adviser". Section 103(3) permits the committee to allow an adviser, other than a lawyer, to address it on behalf of a person under review. Despite the exception, the chairman of committee 143 permitted Mr Livermore to address it, on behalf of Dr Mercado. During the course of his address, Mr Livermore argued the committee should disqualify itself from conducting the review on the ground of reasonable apprehension of bias. Mr Livermore also contended the committee lacked jurisdiction to investigate the matter referred to in the second item of particulars supplied on 21 December. Mr Livermore handed to the members of the committee a written submission that developed his argument. 22 At the conclusion of Mr Livermore's address, the committee retired to consider the submissions it had received. Upon resumption, the chairman repeated the assurance he had earlier given to Dr Mercado and stated the committee intended to continue with the hearing. It did so. But the hearing did not conclude that day. 23 On 7 February 2000 Mr Irvine gave notice that the committee would meet again on 18 February 2000. 24 On 16 February 2000 Mr Irvine wrote a letter to Dr Mercado responding to the submissions made on his behalf at the 21 January hearing. In that letter Mr Irvine said: " … the Committee is of the view that it is not confined to an examination of whether Dr Mercado has engaged in inappropriate practice by virtue of any particular conduct but that its task is to examine all aspects of his conduct in connection with the referred services. This does not amount to an enquiry 'at large'. In this instance, the enquiry will be confined to an examination of specific services rendered by Dr Mercado at his practice locations during the Referral Period. The services which will be examined have been selected by random sampling of items 53, 54, 57 and 173. Dr Mercado has been made aware of the names of the patients to whom the services were rendered and the date of the services." 25 Mr Irvine said the background and statistical material provided by the Commission relating to a period before the Referral Period "is of no relevance to this enquiry and the Committee gives it no weight". He said "[t]he Committee acknowledges that the counselling reports are not evidence before it. Therefore, it does not intend to make use of the report in conducting the inquiry". After referring to Tankey v Adams, Mr Irvine went on: "However, the committee does not agree with Dr Mercado's assertion that the inclusion of this material in the HIC documents is prejudicial. It is aware, as are all practitioners covered under the Professional Services Review Scheme, that no practitioner will be referred to a PSRC without prior counselling by the HIC medical advisers. While there is no legislative requirement for counselling to occur prior to referral this is the invariable practice. During the passage of the Health Legislation (Professional Services Review) Amendment bill in 1993, Dr Theophanous in the second reading speech said: 'The review process is not to be invoked lightly. It is the government's intention that no practitioner will be subjected to the review process until he or she has been seen by a medical adviser of the Health Insurance Commission. The practitioner is to be advised of the commission's concerns about the practitioner's practice and given a chance to consider his or her position, which could include seeking the advice of his or her professional colleagues. Only if the practitioner's practice continues to cause concern will he or she be referred for review.' For this reason the Committee considers that any mention of counselling pre PSR, while it is irrelevant to the inquiry process, cannot be construed as prejudicial as it is a matter of common knowledge. It would not be possible to constitute a PSRC that did not have knowledge of the fact that counselling would have occurred prior to referral. In this instance the counselling report contains references to admissions which are alleged to have been made by Dr Mercado during interviews with HIC medical advisers. These are set out in Dr Mercado's submission and are detailed at pages 7 and 9 of the material attached to the HIC referral. The Committee is of the view that the counselling reports are irrelevant but does not agree that the inclusion of this material is prejudicial for the following reasons. Because the reports are irrelevant the Committee is ignoring them. The Committee is concerned with the evidence before them. The Committee is not concerned with irrelevant matters. The Committee is not influenced by matters which are both irrelevant and unproved." We emphasise the committee's acknowledgment that the alleged admission was unproved. 26 Mr Irvine then dealt with the issue raised by Ebsworth & Ebsworth concerning the second item in the particulars of 21 December. He maintained these particulars were appropriate. 27 At the meeting of 18 February 2000, a further written submission was provided on behalf of Dr Mercado. But it seems the hearing that day was devoted to factual matters. 28 The committee held a further meeting on 17 March. Mr Livermore again attended and sought to address the committee. He handed up an outline of submissions which contained demands that the committee make available the legal advice it had received and that it disqualify itself on the ground of apprehended bias. The chairman stated the committee considered it would not be assisted by further oral submissions at that time and drew attention to the terms of s 103 of the Act.

The proceedings before Heerey J 29 Later that day, on the ex parte application of Dr Mercado, Heerey J made an interim injunction restraining the committee from continuing to hear the referral. On the return of an application for an interlocutory injunction, the parties agreed that the application should be treated as a final hearing. On 10 April 2000 affidavits were read and argument was heard. There was no oral evidence. On 15 May 2000, Heerey J made the following orders: "1. The second, third and fourth respondents are restrained from hearing any referral under the Health Insurance Commission Act 1973 (Cth) involving the applicant. 2. The first respondent [Dr Holmes] pay the applicant's costs of the application including reserved costs." 30 In reasons for decision published that same day, Heerey J set out the history of the matter and (at para 59) identified the following issues: "(i) Whether the referral is confined to the conduct of the applicant in relation to high volume of rendered services. (ii) Whether the Committee's knowledge of alleged high volume services by the applicant outside the referral period and alleged admissions by him gives rise to a reasonable apprehension of bias. (iii) Whether this Court has jurisdiction to restrain the Committee from continuing with the hearing. (iv) Whether as a matter of discretion the Court should exercise that jurisdiction." 31 In relation to the first issue, Heerey J held (at para 74) that the Commission's referral is confined to the conduct of Dr Mercado in relation to high volume of services. His Honour's ruling excludes the second item in the particulars provided on 21 December 1999 and also any "further concerns" that might emerge at the hearing. 32 In relation to the other issues, Heerey J held the committee's knowledge of alleged high volume of services by Dr Mercado outside the referral period, and the alleged admission by him, give rise to a reasonable apprehension of bias; that the Court has jurisdiction to restrain the committee from continuing to hear the referral and, as a matter of discretion, should do so. 33 Heerey J commenced his discussion of reasonable apprehension of bias by saying: "In summary, the position of the Committee is that, as to counselling by Dr Hegarty, everyone connected with proceedings under Pt VAA would know that counselling occurs before any Committee review, that counselling is 'material' referred to in the Guidelines and that insofar as there was any other material relating to services outside the specified period the Committee would not take such material into account. At the outset it can be noted that having a general expectation that counselling may have occurred is by no means the same thing as an alleged admission to the counsellor of inappropriate practice of the very kind under review occurring outside the period the subject of the referral. Likewise, the fact that the Guidelines specify counselling as material that can be included in a referral does not mean that reports of any counselling, however unconnected with the specified services, can be included." 34 His Honour then stated the relevant legal principle, which he took from Livesey v New South Wales Bar Association (1983) 151 CLR 288 at 293: "[A] judge should not sit to hear a case if in all the circumstances the parties or the public might entertain a reasonable apprehension that he might not bring an impartial and unprejudiced mind to the resolution of the question involved in it." 35 Heerey J noted this principle applied to administrative tribunals, at least where no policy function is involved. He went on: "A Professional Services Review Committee has no policy function. Any given committee, such as Committee No. 143 in the present case, is an ad hoc body established to consider particular conduct of a particular practitioner. Moreover, members of the Committee are not legally qualified and, as far as the evidence discloses and the Act requires, have had no training in the judicial function. The Committee's decision can have drastic consequences for the individual involved. All these factors point to a conclusion that the Livesey principle applies. Indeed, the Act makes specific provision for challenge to the appointment of members of a Committee on the grounds of actual or apparent bias: s 96. In the present case the relevant category of apprehended bias is that identified by Deane J in Webb [v The Queen (1994) 181 CLR 41at 74] as disqualification by extraneous information. His Honour said that this category '… consists of cases where knowledge of some prejudicial but inadmissible fact or circumstance gives rise to the apprehension of bias.' Where inadmissible and prejudicial information is received the cases draw a clear distinction between proceedings before a judge or legally qualified tribunal and proceedings before a jury or lay tribunal … In the latter category the inference of a reasonable apprehension of bias will be more readily drawn. In the present case, the (now) admittedly extraneous and irrelevant material is of a kind which has always attracted the law's anxious scrutiny. If a jury or lay tribunal has to determine whether a person engaged in some form of wrongful conduct on a given occasion, evidence that the person engaged in similar conduct in other occasions is regarded axiomatically as prejudicial. Long established canons of fairness recognise the inherent danger involved in the mode of reasoning - common enough in everyday life - that X did the same thing on other occasions, that he or she is therefore the kind of person who engages in such conduct, that therefore X engaged in the alleged conduct under enquiry: … In my opinion, both the applicant and the public might entertain a reasonable apprehension that the members of the Committee might reason in this way. This is the more so because the task of the Committee is not to make a finding as to the occurrence or otherwise of a specific event but, pursuant to s 106L, to express an opinion in generalised and conclusionary terms by reference to a subjective and value-laden criterion, namely what members think the general body of general practitioners would think about the conduct in question: s 82(1)(a). There are further circumstances in this case which support a conclusion of reasonable apprehension of bias in the Livesey sense. First, there is the provenance of the material in question. It comes from the Commission itself. It has inherent credibility, being a report of a named medical practitioner and officer of the Commission who is said to have counselled the applicant on behalf of the Commission. Secondly, the information is detailed and specific. Thirdly, the Committee initially took a considered position that it was entitled to look at the material. A reasonable observer might think that, notwithstanding the Committee's change in the face of the applicant's objections, the material is not something the members can put out of their minds … Without impugning the sincerity of the Committee's present statement of intention, an observer might think that this material, already highlighted in the way it has been, might well affect their decision, even if only at a subconscious level. I therefore accept the applicant's submission as to reasonable apprehension of bias." 36 Dr Holmes appealed against his Honour's orders, but only in relation to the ruling about reasonable apprehension of bias. Dr Holmes did not challenge Heerey J's determination of the ambit of the review, nor his views about jurisdiction and discretion. The members of the committee, the second, third and fourth respondents before Heerey J, did not appeal.

Submissions on the appeal 37 Mr N Green QC and Mr P Gray, counsel for Dr Holmes, argued that Heerey J had erroneously introduced into the Livesey test a rigid dichotomy between lay and legally-trained tribunals. In particular, they said, it was wrong to equate lay tribunals with juries. In their written submissions, counsel said: "A key issue, which does not emerge with prominence in the judgment below, is the approach properly to be taken to an acknowledgment by the relevant decision-maker that the information complained of should and would be excluded from the inquiry. Such acknowledgments have in the past played a significant role in ameliorating the potentially disruptive impact of the doctrine of ostensible bias and rules concerning exposure of juries to extraneous and prejudicial information, and have contributed to the practicability of the rules and the workability of the decision-making processes subject to them. A fortiori, such acknowledgements are likely to be decisive in administrative decision-making processes intended by the Parliament to be free from legal technicality and the rules of evidence." 38 Counsel placed reliance on Webb, the authority noted by Heerey J in his description of the relevant form of apprehended bias. They directed attention to the approach of Mason CJ and McHugh J in that case. 39 Webb arose out of an incident that occurred during the trial of two persons for murder. One of the jurors gave a bunch of flowers to a person at the courthouse with a request that it be given to the deceased's mother. The juror was identified. She apologised. The judge refused an application to discharge the jury but gave a strong and detailed instruction to the jury as to their task. Both accused were convicted. By majority (Mason CJ, Toohey and McHugh JJ, Brennan and Deane JJ dissenting) the High Court rejected the contentions of counsel for the accused that the judge ought to have discharged the jury. 40 In a joint judgment, Mason CJ and McHugh J held the trial judge had applied an incorrect test in relation to his discretion to discharge the jury. They said (at 47) that the proper test was "whether, despite the warning that he proposed to give to the jury, the circumstances of the incident would still give a fair-minded and informed observer a reasonable apprehension of a lack of impartiality on the part of the juror". 41 Mason CJ and McHugh J thought the incident gave rise to a reasonable apprehension of bias, but they said (at 55) that was not the end of the matter: "The fair-minded and informed observer would also consider the effect of the judge's warning on the juror and the judge's assessment of the character of the juror." 42 After analysing what passed between the judge and the jury after the incident, their Honours said: "While her sympathy for the deceased's mother had caused her to act as she did, that sympathy had not manifested itself in any act of hostility towards the accused or of partiality to the Crown. Its significance lay in the fact that it indicated that the juror was or might be incapable of examining the evidence dispassionately and impartially. But the public ventilation of the incident, the juror's apology, the recognition of the seriousness of what she had done, the general attentiveness and diligence of the juror, and the strength and detail of the judge's second warning were countervailing factors of considerable strength. A fair-minded person would assume that the juror would do her best to follow the judge's direction to look at the evidence 'coldly, dispassionately and above all, objectively and using [her] common sense'. When a fair-minded observer also considered the opinion of the judge - the person on the spot - that the juror would be able to approach the issues dispassionately, we think that a fair-minded person would not have an apprehension of bias or lack of impartiality on the part of the juror." 43 Toohey J expressed a similar view at 88. 44 Counsel for Dr Holmes said the present case is unusual, in that the source of the reasonable apprehension of bias found by Heerey J was the very document that constituted the source of the committee's jurisdiction; namely the Commission's referral. Moreover, the offending information was contained in a "report of counselling", the inclusion of which was expressly permitted by the relevant regulatory regime. 45 Section 87(2) of the Health Insurance Act requires the content and form of a referral to comply with any guidelines made under s 87(3). Section 87(3) empowers the Minister, in writing to "make guidelines about the content and form of referrals". Section 87(4) makes guidelines disallowable instruments for the purposes of s 46A of the Acts Interpretation Act 1901. 46 Guidelines have been made. The current guidelines are dated 9 May 1994. They include Schedule 2, listing "material that may be included in a referral". The first item in that list is "Reports of counselling given to the practitioner under review". The list also includes: "Correspondence between the practitioner under review and the Commission, or materials provided by the practitioner to the Commission, before the making of the referral". 47 Counsel for Dr Holmes pointed out that Mr Mercado did not dispute the contents of the counselling report, either when a copy of the referral was first supplied to him or in evidence before Heerey J. Neither did he seek the disqualification of members of the committee when they were first appointed, despite statutory provisions permitting that course and Dr Mercado's knowledge that the report had been included in the referral. 48 Counsel for Dr Mercado, Mr Livermore, disavowed the existence of any rigid dichotomy between the position of a legally-trained tribunal, on the one hand, and a lay tribunal, on the other. He said everything depends on the circumstances of the particular case and referred to comments made by Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ in Johnson v Johnson [2000] HCA 48. That case arose out of a comment made during the course of trial by a judge of the Family Court of Australia. At para 14 their Honours said: "There was argument in this Court, prompted by Anderson J's explanation of what he intended to communicate, about whether the effect of a statement that might indicate prejudgment can be removed by a later statement which withdraws or qualifies it. Clearly, in some cases it can. So much has been expressly acknowledged in the cases. No doubt some statements, or some behaviour, may produce an ineradicable apprehension of prejudgment. On other occasions, however, a preliminary impression created by what is said or done may be altered by a later statement. It depends upon the circumstances of the particular case. The hypothetical observer is no more entitled to make snap judgments than the person under observation." (footnote references omitted) 49 Mr Livermore said the conclusion of Heerey J in this case was correct, having regard to the circumstances of the case. The circumstances included the fact that the committee was composed of laymen, as opposed to trained lawyers, that the committee had compulsory inquisitorial powers, and that it was charged with the duty to make a finding on a matter that might result in severe penalties being imposed. Furthermore, the committee had failed to recognise, and act within, the limits of its jurisdiction, notwithstanding detailed submissions on behalf of Dr Mercado at an early stage of its inquiry. Counsel said the prejudicial material included the alleged admission by Dr Mercado (which was disputed) in respect of conduct, during an earlier period of time, similar to that referred to the committee. He contended the admission of that material would impact adversely upon the perceived credibility of Dr Mercado in relation to the conduct the subject of the referral. 50 In response to his opponents' comment about Dr Mercado's failure to challenge the accuracy of Dr Hegarty's counselling report, Mr Livermore pointed out that the committee was informed, on its first day of hearing, that aspects of Dr Hegarty's counselling report were in dispute and Dr Hegarty was required for cross-examination.

Discussion 51 During the hearing before Heerey J, there seems to have been an assumption (common to all counsel) that the referral to the committee ought not to have included Dr Hegarty's report concerning his counselling of Dr Mercado in respect of a period prior to that covered by the committee's review. No doubt the reason for this assumption was the remarks made by Einfeld J in Tankey v Adams. 52 In his reasons for judgment, Heerey J did not expressly adopt this assumption. However the structure of his reasons suggests he shared it. It will be recalled his Honour identified, as the first issue in the case, the question "[w]hether the referral is confined to the conduct of the applicant in relation to high volume of rendered services". Having answered that question in the affirmative, Heerey J went immediately to the question "[w]hether the committee's knowledge of alleged "high volume services by the applicant outside the referral period and alleged admissions by him gives rise to a reasonable apprehension of bias". 53 To pose the question in that way was not incorrect provided that, in addressing it, Heerey J considered the relevance of the document that informed the members of the committee about high volume services by Dr Mercado outside the referral period and the alleged admissions by him. It would plainly be nonsensical to say there was a reasonable apprehension of bias because members of a tribunal had received information that was relevant to their inquiry. In Webb, Deane J spoke of "knowledge of some prejudicial but inadmissible fact or circumstance". 54 However, Heerey J did not address the question whether the disputed material was irrelevant to the committee's inquiry, and therefore inadmissible. Judging by the extract from his reasons set out at para 33 above,Heerey J accepted there is "a general expectation that counselling may have occurred"; but he thought this "is by no means the same thing as an alleged admission to the counsellor of inappropriate practice of the very kind under review outside the period the subject of the referral". Heerey J did not explain why evidence of such an admission should be regarded as necessarily irrelevant to the committee's task. Instead, his Honour went immediately to the case law and set out the conclusions we have quoted at para 35 above. 55 The decision of Einfeld J in Tankey v Adams was the subject of a Full Court appeal: see Tankey v Adams [2000] FCA 1089. However, the Full Court judgment was delivered after the judgment of Heerey J in this case. This was a misfortune for his Honour because the Full Court took a different view about the relevance of prior counselling material than had been expressed by Einfeld J. 56 The matter arose for the Full Court in Tankey v Adams because the appellant contended that Einfeld J erred in holding that the receipt by the Professional Services Review Tribunal of irrelevant material (evidence of admissions in respect of periods of time earlier than the referral period) did not invalidate the Tribunal's determination. The respondent, the Determining Officer under the Health Insurance Act, countered with a notice of contention arguing that Einfeld J was wrong in regarding the material as irrelevant. The Full Court (Ryan, O'Connor and Weinberg JJ) upheld the notice of contention. At paras 124 to 126, the Court said: "The respondent conceded that it was no part of the Committee's task to inquire into the appellant's prior conduct, or to investigate the efficacy of the counselling process. However, it was submitted that the reference to the prior counselling of the appellant in the Committee's reasons for decision was merely peripheral, and should be regarded as nothing more than part of the background to the Committee's investigation. The respondent submitted, in the alternative, that the Tribunal was required to decide which, if any, of the s 106U(1) sanctions should be imposed on a practitioner who had been found to have engaged in inappropriate practice. It followed that the deliberations of the Tribunal in this matter were not confined to the referral period. Prior counselling of the appellant, such as had occurred in this case, was relevant, particularly when the Tribunal came to make its decision as to what sanctions, if any, should be imposed. We consider that there is force in each of the respondent's submissions. We are not persuaded that the issue of prior counselling was irrelevant to the matters before the Tribunal, or that its reference to such counselling amounted to legal error. …" 57 We respectfully agree with these views. It is important for committees and tribunals undertaking statutory reviews in respect of the provision of professional services to confine their findings to the period of time and the work locations specified in the relevant Commission reference. However, evidence about events that occur outside those work locations and period of time may bear on the matter under review. This is, perhaps, particularly a possibility in relation to a concept as imprecise as "inappropriate practice", as defined in s 82(1)(a) of the Health Insurance Act. It will be recalled this definition makes the question whether particular conduct is "inappropriate practice" depend on the committee's perception as to whether the conduct "would be unacceptable to the general body of practitioners". That must depend upon the whole of the circumstances surrounding the conduct. 58 We illustrate the point by an example. A person under review might justify the provision of an unusually high number of services by reference to the paucity of other practitioners in his or her local area. The practitioner might claim it is better for him or her to work extremely long hours than to leave patients unattended. This attitude might be thought acceptable, even laudable, in the first year. But it might wear a different complexion if it is shown that the practitioner has previously acknowledged that the long hours made it impossible for him or her to provide adequate patient care; and even more so if it is shown that the practitioner neglected a reasonable opportunity to take in a partner or employee. 59 Leaving aside that example, it is a commonplace of human behaviour that particular conduct will be tolerated on its first occurrence but considered unacceptable if repeated, especially if repeated after counselling or an appropriate warning. That statement is true of professional behaviour, as much as in any other sphere. 60 Further, as was pointed out by the Full Court in Tankey v Adams, prior counselling must be relevant to the determination by a tribunal or committee of the sanctions, if any, that are appropriate to be imposed on a practitioner who has been found to have engaged in inappropriate practice. No doubt this is why the guidelines require information on prior counselling to be included in any referral: see para 46 above. In the face of those guidelines, which have the status of delegated legislation, it is difficult to see as irrelevant to a referral, and therefore a committee's task, material which answers the description of "Reports of counselling given to the practitioner under review"; or, indeed, correspondence between the practitioner and the Commission prior to the making of the referral. 61 We also point out the difficulty in establishing irrelevance in relation to an inquiry by an inquisitorial tribunal: see for example Ross v Costigan (1982) 41 ALR 319 at 335 per Ellicott J and on appeal at 349-351. 62 Even if we are wrong in holding that the material concerning prior counselling of Dr Mercado was not irrelevant to the task of the committee, we respectfully disagree with the view that the committee members' knowledge of that material leads to a reasonable apprehension of bias. The committee gave assurances to Dr Mercado, on a number of occasions, that it would restrict its findings to referred services: see the letter of 16 December (para 16 above), the statement made by the chairman at the 21 January hearing (para 20 above) and the letter of 16 February. The last reference is particularly important. It was the most recent statement of the committee's position before institution of the proceeding in this Court. It will be recalled that Mr Irvine, on behalf of the committee, acknowledged "that the counselling reports are not evidence before it". He specifically stated that the committee "does not intend to make use of the report in conducting the inquiry" (see para 25 above). Later in the letter, Mr Irvine wrote: "Because the reports are irrelevant the Committee is ignoring them. … The Committee is not influenced by matters which are irrelevant and unproved". 63 The argument put on behalf of Dr Mercado requires the Court to disregard or discount these assurances. The argument has to be, and is, that a fair-minded and informed observer would reasonably have such doubts about the willingness or ability of a lay (as distinct from a legally-trained) tribunal to honour these assurances as to continue to harbour apprehension of bias. We see no basis for that view. The committee comprises three members of the Professional Services Review Panel. Members of the Panel are appointed by the Minister after consultation with the Australian Medical Association ("AMA"): see s 84(3) of the Act. The committee's chairman is a Deputy Director of Professional Services Review appointed in consultation with the AMA: see s 95(1)(a) and (2). The three members were required to be, and no doubt were, medical practitioners during the review period. We see no reason to doubt that such people are as capable as lawyers of understanding the concept of putting out of their minds an irrelevant matter, when reaching conclusions on a matter of grave importance to a practitioner, and of doing so. 64 Mr Livermore placed emphasis upon the fact, as Heerey J held, that the committee misconceived the ambit of its inquiry. However, that misconception was corrected by his Honour's reasons for judgment. The members of the committee have not challenged that correction. There is no reason to apprehend they will fail to abide by his Honour's ruling. 65 The conclusion reached by Heerey J regarding reasonable apprehension of bias was a conclusion of fact. However, that is not an impediment to this Court substituting its view of the matter. First, his Honour's view was affected by the assumption that the material in the referral concerning prior counselling was irrelevant to the committee's review. Second, only written evidence was before Heerey J. Consequently, this Court is as well placed to evaluate that evidence as was his Honour.

Disposition 66 In our respectful opinion, Heerey J fell into error in determining that Dr Mercado was entitled to relief on the basis of reasonable apprehension of bias. The first order made by his Honour on 15 May 2000 reflects that error. It ought to be set aside. 67 The second order made by Heerey J is an order requiring Dr Holmes to pay the costs incurred by Dr Mercado at first instance. Counsel for Dr Holmes did not seek to overturn that order. We think that attitude was appropriate. Dr Mercado succeeded in one (important) aspect of the hearing before Heerey J, and that success is not challenged. However, Dr Mercado should pay the costs incurred by Dr Holmes in respect of the appeal. I certify that the preceding sixty-seven (67) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices Wilcox, Merkel & Weinberg.

Associate: Dated: 15 December 2000 Counsel for the Appellant: Mr N Green QC and Mr P Gray