Reasonable and prudent advice from Mr Wicks
487 In order to evaluate Jadwan's case, it is necessary to consider what advice reasonable care required Mr Wicks to give in the circumstances in the period following the service on Jadwan on 21 July 1997 of the notice of intention to revoke the approvals. This issue is relevant to the questions of breach of duty, and causation. In Vairy v Wyong Shire Council Gummow J at [61] and Hayne J at [124]-[129] emphasised, in the context of evaluating the question of breach of duty, that the enquiry is not directed to an assessment of what might reasonably have been done to avoid the damage that actually occurred, for that is a retrospective analysis. Rather, it is necessary to look forward and to ask what reasonable care was required to avoid a foreseeable risk of damage. As Megarry J explained in Duchess of Argyll v Beuselinck [1972] 2 Lloyd's Rep 172 at 185 -
In this world there are few things that could not have been better done if done with hindsight. The advantages of hindsight include the benefit of having a sufficient indication of which of the many factors present are important and which are unimportant. But hindsight is no touchstone of negligence. The standard of care to be expected of a professional [person] must be based on events as they occur, in prospect, and not in retrospect.
488 Further, there might be a range of reasonable responses to a foreseeable risk of damage, and the selection of one reasonable response rather than another that would in retrospect have avoided the damage in question, does not amount to negligence. In the professional negligence context, one way in which that principle manifests itself is in statements in the authorities that the content of the duty to exercise reasonable care is to apply the relevant degree of skill and to exercise reasonable care in carrying out the professional task. "There is no implied undertaking that the advice is correct, but only that the requisite degree of professional skill and care has been exercised in giving the advice": Heydon v NRMA Ltd at [147] (Malcolm A-JA).
489 On the assumption that breach of duty is shown, questions of causation arise. On the issue of causation, the question of what advice would have been given if reasonable care had been exercised involves proof of a past hypothetical on the balance of probabilities. The issue is often framed by asking what advice a reasonably prudent solicitor would have given in the circumstances: see, for example, Firth v Sutton [2010] NSWCA 90 at [103] (Allsop P, Macfarlan JA and Young JA agreeing). This question also is to be examined prospectively, and not with the benefit of hindsight.
490 The primary judge held at [465] that it was unquestionably within the scope of a solicitor's duty of skill and care that he or she identify, and advise, having regard to the significance of the relevant enacted statute law of the Commonwealth. Whether that is so in individual cases will be fact-dependent. No solicitor or barrister can reasonably be expected to know at the outset of a retainer all potentially applicable legislation of the Commonwealth. But generally speaking, the exercise of reasonable care in the discharge of a retainer may require a practitioner to identify applicable legislation for the purposes of giving advice. Subject to these observations, the primary judge's conclusion is not controversial, and is supported by the reasons for judgment of Ormiston A-JA in Heydon v NRMA who stated at [653] -
… the duty of the lawyer, whether Queen's Counsel or senior firm of solicitors, is to advise their clients on the basis of principle, in which I would include for present purposes a proper understanding of statute law and its accepted interpretation.
491 There was no issue about whether Mr Wicks had a reasonable opportunity to identify the applicable legislation, because he was in the habit of using the Law Society library, and had done so in February 1997 when he conducted his research. The primary judge drew an inference at [467] that the Acts of the Commonwealth Parliament were available to Mr Wicks at the Law Society library, and drew a further inference at [469] that the Law Society library would have held copies of the Aged Care Act and the Consequential Provisions Act in its collection on or before 21 July 1997. The primary judge held at [501] that when Mr Wicks updated his research on 22 July 1997, a solicitor exercising the requisite degree of care and skill in advising his or her client would have checked whether the relevant statute law to which he or she had last given attention some months previously remained current or had been amended, and at [503] his Honour held that a reasonable solicitor would have identified the potential relevance of the Consequential Provisions Act. No notice of contention has been filed by any of the respondents on appeal, and no challenge was made by the respondents to these findings.
492 The primary judge stated at [504]-[507] that he did not intend to suggest that, upon discovering the new legislation, Mr Wicks was required to draw the conclusion that s 7(1)(a) of the Consequential Provisions Act would apply as the plurality in the Full Court reasoned it would in December 2003 in Jadwan No 4. His Honour held that it was only with hindsight that the reasoning of North J in Jadwan No 3 and of the Full Court in Jadwan No 4 might appear self-evident. There were three material elements to the decisions in Jadwan No 3 and Jadwan No 4. First, it was held that the order made by the Full Court in Jadwan No 2 that the revocation decision be set aside operated only prospectively, that is, from the date of the order that was made on 4 December 1998. Second, the fact that the Full Court's order operated only prospectively meant that Jadwan had not been an approved operator or proprietor of an approved nursing home immediately before the commencement day of the new Act, because at that time its approval had been revoked. Third, the condition in s 7(1)(a) of the Consequential Provisions Act that a Commonwealth benefit is or was payable in respect of a nursing home patient was a requirement that had to be satisfied in fact, and Jadwan did not satisfy that requirement because there were no Commonwealth benefits payable to Jadwan in respect of an approved nursing home patient immediately before the commencement day.
493 However, the primary judge held that Mr Wicks was not in breach of his duty of care to Jadwan for the following reasons -
(1) at [473] his Honour held that until the delegate made her decision on 6 August 1997 to revoke approval, there was no operative decision, and that until then, an order of review under s 5 of the ADJR Act was not available;
(2) in relation to review under s 6 of the ADJR Act, at [478], the primary judge doubted whether Jadwan had a sound basis for relief, and at [482]-[483], referred to the difficulty in establishing that the delegate was proposing to rely on the reports of the first and second Standards Review Panels prior to receiving a copy of the delegate's reasons;
(3) the primary judge held at [479] and [486]-[489] that, had Jadwan commenced a proceeding seeking relief pursuant to s 6 of the ADJR Act, then the delegate would have received advice before finalising her decision that she was entitled to make her decision based upon the findings of the Standards Review Panels as collective views, but without giving them the status of validly constituted panels, or she could have based her decision on the views of the second Standards Monitoring Team;
(4) for the above reasons, his Honour held that the commencement of proceedings would not have prevented the revocation decision, and the primary judge held at [491]-[492] that therefore Mr Wicks was not in breach of his duty; and
(5) further, on the question of causation, the primary judge held at [648] that success in setting aside the revocation decision was dependent upon Jadwan obtaining an order setting aside the financial sanctions decision with effect from a date prior to 1 October 1997.
494 We respectfully consider that the primary judge was in error in his Honour's analysis for four reasons. First, his Honour confined his attention to relief under the ADJR Act, when Jadwan did not confine its case at trial to an hypothesis that it would have sought relief under the ADJR Act. In its pleadings, Jadwan had made express references to s 39B of the Judiciary Act, and s 23 of the Federal Court of Australia Act. The transcript of Jadwan's opening at trial records that senior counsel for Jadwan referred to s 39B of the Judiciary Act and to the prospect of constitutional writs, and to the prospect of making an application to the Court for an interlocutory injunction in the exercise of powers under s 23 of the Federal Court of Australia Act. Given that no decision to revoke the approval was made until 6 August 1997, and that neither s 5 nor s 15 of the ADJR Act could until then have been engaged, any interlocutory relief before the revocation decision likely had to be granted in exercise of the Court's power under s 23 of the Federal Court of Australia Act. By 1997, it had been established by Full Court authority that the Court's power under s 23 of the Federal Court of Australia Act could be exercised in conjunction with the powers and jurisdiction under the ADJR Act and s 39B of the Judiciary Act, although an interlocutory order could not travel beyond the jurisdiction or powers to grant final relief: Minister for Immigration, Local Government and Ethnic Affairs v Msilanga (1992) 34 FCR 169 at 179 (Beaumont J, Black CJ agreeing) and at 185, 187 (Burchett J). Interlocutory relief might have been available to Jadwan in the exercise of power under s 23 of the Federal Court of Australia Act in order to preserve the subject-matter of an application for judicial review in aid of the Court's power upon a final hearing to make an order authorised by s 16(2)(b) of the ADJR Act in relation to conduct engaged in for the purposes of making a decision, or a declaration in the exercise of powers under s 23 of the Federal Court of Australia Act, or an injunction under s 75(v) of the Constitution in the exercise of the jurisdiction conferred by s 39B(1) of the Judiciary Act.
495 Second, the primary judge's reasons at [482] proceed on a premise that Jadwan would have experienced difficulties in proving the grounds on which the delegate proposed to revoke its approval. We do not accept that premise. The delegate's notice of intention to revoke the approval dated 20 July 1997 attached a detailed statement of reasons which relied on findings of the Standards Review Panels and the second Standards Monitoring Team. There should have been little difficulty in proving, for the purposes of an interlocutory application, the basis on which the delegate proposed to revoke the approval.
496 Third, we respectfully consider that the primary judge was in error in making the affirmative findings at [486]-[490] that any proceeding commenced by Jadwan would have done no more than alert the delegate to the points in issue, and that the delegate would have received advice before finalising her decision that she was entitled to make her decision based upon the findings of the Standards Review Panels as the collective views of the members, but without attributing to them the status of validly constituted panels; or alternatively, that she could have based her decision on the views of the second Standards Monitoring Team. In our view, while that hypothesis is plausible, it is speculation. We agree that if Jadwan had succeeded in obtaining an interlocutory injunction from the Court, then the Department would likely have turned its mind to how it might lawfully revoke the approval of Derwent Court, and may have reviewed the question of the validity of the constitution of the Standards Review Panels. But we consider that it was in error for the primary judge to find that the delegate would have realised that she could make her decision without recourse to the reports of the Standards Review Panels having the status as validly constituted panels. We say this for the following reasons -
(1) We infer that the delegate was operating on the assumption that a report of a Standards Review Panel was a necessary precursor to the revocation of approval. That inference arises not only from the fact that the delegate relied on the reports, but from the fact that the report of the second Standards Review Panel was commissioned by the delegate on about 1 April 1997 at a time when Derwent Court was already the subject of a declaration of non-compliance with standards, and after the delegate had received the report of the second Standards Monitoring Team. In the covering letter of 28 May 1997 to Jadwan enclosing the report, Ms Paul of the Department stated that the delegate would consider the report, "which could include consideration of whether approval should be revoked".
(2) The Department did not at any relevant time in 1997 concede that there was any irregularity in the composition of the Standards Review Panels. In his letter of 1 August 1997 to Mr Dellar of the Department, Mr Wicks had raised questions about the qualifications of the Panel members, and referred to the "improper composition of the second Standards Review Panel". There is no evidence that the delegate then sought to reconsider the basis of her proposed decision. On the contrary, the statement of reasons that accompanied the revocation of approval on 6 August 1997 were substantially the same as those which accompanied the notice of intention to revoke the approval, and relied on the reports of the Standards Review Panels which Jadwan had sought to impugn.
(3) Similarly, when on 1 September 1997, pursuant to s 105AAB(2) of the National Health Act, Jadwan sought an internal review of the delegate's decision to revoke the approval, it raised expressly the composition of the Panels, and claimed that the members of the Panels did not have the necessary qualifications or skills prescribed by the Regulations. The reviewer rejected those claims in his statement of reasons dated 13 October 1997.
(4) The reasons of Heerey J in Jadwan No 1 at 51 ALD 245 at 249-250 disclose that although the Minister conceded that the composition of the second Standards Review Panel was irregular, the Minister continued to defend the legality of the revocation decision in June 1998, and filed affidavit material that suggested that the composition of the second Standards Review Panel was the product of a deliberate choice. The Minister continued to assert the legality of the decision by the appeal to the Full Court in Jadwan No 2.
(5) The idea that the delegate would have thought that she could rely on the reports of the Standards Review Panels as simply the opinions of the members of the Panels without attributing to them any statutory validity is the product of hindsight that arises from the decision of the Full Court of 4 December 1998 in Jadwan No 2: see (1998) 89 FCR 478 at 494. It proceeds on the premise that the delegate would have realised that a report of a Panel was not a necessary condition for the exercise of the statutory power to revoke approval. The circumstances do not support an inference that it would have occurred to the delegate or those advising her at any time before 1 October 1997 that the opinions of the Panel members could have been relied on, and that the question of the validity of their appointments could be quarantined.
497 None of the above is to suggest that there was not an appreciable risk that, if Jadwan sought interlocutory relief, the delegate would have sought to remedy the foundation for making the decision that she had foreshadowed. But the primary judge was in error in making an affirmative finding that she would have succeeded in doing so prior to 1 October 1997, with the consequence that any interlocutory relief that Jadwan obtained would have been inutile, and that Mr Wicks had therefore not breached his duty of care.
498 As we mentioned at [344] above, on appeal, Jadwan submitted that a fresh revocation decision would have amounted to a novus actus interveniens, on which the respondents bore an onus of proof. It is unnecessary for us to decide that question because, without reference to any question of onus, we would not infer from the circumstances that the delegate would have responded to an application for an interlocutory injunction in the way found by the primary judge. Having said that, we doubt that the principles relating to proof of a novus actus interveniens have any role to play. In our view, the correct analysis is that, at all times, Jadwan had a legal onus to prove the damage that it claimed, namely the lost opportunity to which we referred at [419] and [431] above. In evaluating the past hypothetical that it was necessary for Jadwan to prove, the respondents had an onus to introduce evidence or point to evidence that would counter any prima facie case that Jadwan established: see generally, Purkess v Crittenden (1965) 114 CLR 164 at 167-8 (Barwick CJ, Kitto and Taylor JJ). But the claimed lost opportunity was the fact in issue, and the onus to prove that fact remained stable.
499 The fourth reason for which we respectfully differ from the primary judge is that, contrary to the primary judge's finding at [648], it was not necessary that Jadwan succeed in setting aside the financial sanctions decision from a date prior to 1 October 1997 in order to succeed in enjoining the proposed revocation decision, or in obtaining a final declaration or other final relief in the event that Jadwan persuaded the Court (as it did in Jadwan No 1) that the second Standards Review Panel was invalidly constituted. And it was not necessary that any relief in relation to the financial sanctions decision be obtained before 1 October 1997, although failure to do so resulted in Jadwan being unable to receive Commonwealth benefits for any new patients, and being reliant on existing patients remaining at Derwent Court in order to engage the transitional provisions in the Consequential Provisions Act.
500 The primary judge set out at [512]-[525] of his Honour's reasons what competent advice from Mr Wicks to Jadwan should have been as the foundation for his Honour's finding at [526] that, had Jadwan received such advice, Jadwan would have chosen to resume its co-operation with the Department, and would not have sought to prevent the removal of Derwent Court residents -
512. Had Mr Wicks exercised due care and skill, I am satisfied that he would have identified the existence of the Aged Care Act and the Consequential Provisions Act on 22 July 1997. He would have informed Jadwan of those Acts' existence when he met with Mr Jeff Alexander and Ms Julie Alexander the following day.
513. Such advice would likely have led Jadwan briefly to delay facilitating the Department's arrangements for the relocation to other nursing homes of those of Derwent Court's residents. While it involves a degree of speculation I am prepared to accept that Jadwan's directors would have done so.
514. Having become aware that new legislation would soon replace the National Health Act I accept that it would have been logical for Mr Alexander and the other of Jadwan's directors to have stalled the Department and sought urgent advice as to whether there might be something in the new legislation they could take advantage of.
515. But there was not.
516. Competent advice, had it been provided, would have been to the effect that the new legislation was the framework upon which new higher standards of nursing home regulation was to be erected.
517. Competent advice, given with requisite skill and care, had it been provided, would have alerted Jadwan to the fact that to transition as an approved provider in respect of Derwent Court it would need not only to establish the invalidity of Ms Halton's revocation decision but also to retain at least one of Derwent Court's existing residents until the Aged Care Act came into force on 1 October 1997. I am prepared to infer that competent advice would include that the Aged Care Act was to come into force on 1 October 1997 - that that would be the date appears to have been widely known: [his Honour referred to [209] of his reasons for judgment].
518. Jadwan would have been advised it faced an additional hurdle not an easier pathway.
519. Competent advice would have confirmed the difficulty of challenging Ms Halton's intention to revoke Derwent Court's approval prior to her making that decision.
520. Such advice would have identified that the only plausible basis for such a proceeding would be to assert that Ms Halton was impermissibly proposing to engage in conduct viz giving weight to the reports of SRP-1 and SRP-2 as the reports of validly constituted Standards Review Panels in the making of her decision, but that Ms Halton, properly advised, was likely to respond she had no need to do so and would not. Jadwan's legal grounds were doubtful.
521. Competent advice would have informed Jadwan that any (improbable) victory on that basis would likely to be pyrrhic - the point being conceded and the decision made nonetheless.
522. Competent advice would have made Jadwan aware that any proceeding brought after Derwent Court's approval had been revoked would be unlikely to obtain a final hearing before the new legislation came into force on 1 October 1997. Competent advice would have included that while Jadwan would have good prospects of success if Ms Halton did rely on the reports of SRP-1 and SRP-2 as being those of validly constituted Standards Review Panels, such an error would be a non-jurisdictional error (see Jadwan No 4) and that the judge hearing their review, in his or her discretion, might exercise one of the other options available under s 16(1) of the ADJR Act rather than quashing or setting aside Ms Halton's decision from the date of its making.
523. Competent advice would have confirmed that if Jadwan were to retain any residents at Derwent Court beyond 6 August 1997, subject to interlocutory relief, it would have to do so at its own expense until the decision was set aside. It was not part of Jadwan's case that Derwent Court's residents could have met the unsubsidised cost of their care.
524. Derwent Court's average payroll expenditure was $70,000 per fortnight (Ex A1 p 4146). Even with a decreased number of residents (those wanting to stay) the cost of staff required for their care would have been substantial. Only if wholly successful would Jadwan have recovered those costs.
525. Competent advice would have been that because of the fire risk to Derwent Court's aged and vulnerable residents, success in obtaining injunctive relief by way of an interlocutory proceeding could not be assured.
526. Having regard to the above, on the assumption that Jadwan would have obtained competent legal advice as a matter of urgency, the Court is satisfied that upon receiving that advice Jadwan would have chosen in any event to resume cooperating with the Department at some point before 6 August 1997 when Ms Halton's revocation decision was to come into effect. It would not have sought to prevent the removal of Derwent Court's residents.
501 Largely for the reasons we have given at [494]-[496] above, the hypothetical advice formulated by the primary judge at [519], [520], [521], [522], [523], and [524] of his Honour's reasons was in error. In addition to what we have said at [494]-[496] above -
(1) The primary judge's reasons at [522] proceed upon an incorrect hypothesis that proceedings would have been brought by Jadwan after the approval of Derwent Court had been revoked, when Jadwan's case extended to alleging that a proceeding seeking an interlocutory injunction should have been recommended, and would have been commenced, before the approval was revoked.
(2) In relation to the finding at [523] that if Jadwan were to retain any residents at Derwent Court beyond 6 August 1997, and that subject to interlocutory relief it would have to do so at its own expense until the decision was set aside, this finding does not address the case that Jadwan had advanced, which was that it would have sought and obtained interlocutory relief. On the hypothesis that the Minister was enjoined from revoking the approval of Derwent Court, we consider that reasonable advice would have been that any residents who remained at Derwent Court during the period an interlocutory injunction remained in force would continue to be subject to an entitlement that Commonwealth benefits on their account were payable to Jadwan.
(3) We do not understand the primary judge's finding at [524] that Jadwan would recover staffing costs if wholly successful. Staffing costs were outgoings for which Jadwan was liable so long as it continued to operate Derwent Court. We do not consider that there was any prospect that Jadwan could recover staffing costs from the Commonwealth.
502 As we mentioned at [209] above, the primary judge accepted the evidence of Ms Julie Alexander that during a telephone conversation on 25 July 1997, Mr Wicks had advised her and Mr Alexander that there was no harm in letting the residents go. The primary judge held at [507] that a solicitor exercising reasonable care, having become aware of the new legislation, would not have given Jadwan such unqualified advice. There is no notice of contention by which the second respondent challenges this finding. However, as noted above, the primary judge held at [526] that for a range of reasons, upon receiving competent advice, Jadwan would have chosen to resume its co-operation with the Department, and would not have sought to prevent the removal of Derwent Court residents.
503 Having concluded that the primary judge erred in formulating the advice that a solicitor exercising reasonable care would have given to Jadwan, this Court should make its own findings: Robinson Helicopter Company Inc v McDermott [2016] HCA 22; 331 ALR 550 at [43]. We accept, on the unchallenged findings of the primary judge at [512], that the exercise of reasonable care by a solicitor in the position of Mr Wicks would have resulted in the existence of the new legislation and its transitional provisions being disclosed to Jadwan on 23 July 1997. In relation to the advice that a reasonable and prudent solicitor would have given to Jadwan on that day, and in the days thereafter, our findings are as follows -
(1) A reasonable solicitor would have advised Jadwan of the enactment of the Aged Care Act and the Consequential Provisions Act, and that the operative provisions were due to commence on a day to be proclaimed.
(2) The primary judge held at [517] that the proposed commencement date of 1 October 1997 would appear to have been widely known. That finding was based upon Mr Wicks's conversation with Mr Dellar on 30 July 1997, in respect of which Mr Wicks recorded Mr Dellar's reference to "1/10 beds gone". His Honour may also have been influenced by his finding at [209] that a workbook for a seminar that Mr Alexander attended in August 1997 referred to 1 October 1997 as the date on which the "Aged Care Structural Reform Strategy" would come into effect. The primary judge stated that it was not at all improbable that, as at 30 July 1997, and notwithstanding that the commencement date had yet to be formally gazetted, that internal planning within the Department was proceeding on the basis that the Aged Care Act was to come into effect on 1 October 1997. The primary judge held that competent advice would have included that the Aged Care Act was due to come into force on 1 October 1997. For our part, we would not impute that knowledge to a reasonable solicitor or barrister except on the basis that after ascertaining the existence of the new legislation, a reasonable solicitor would make enquiries of the Department or the Australian Government Solicitor to ascertain whether it knew of the proposed commencement date. We infer that the commencement date was ascertainable by these means by no later than 30 July 1997, and if Jadwan had commenced proceedings prior to that time, the expected commencement date would likely have been exposed at or before the hearing of an application for an interlocutory injunction.
(3) A reasonable and prudent solicitor would have studied the material features of the new legislation in the same way that Mr Wicks had studied the features of the National Health Act when he undertook his research in February 1997 and again in July 1997. A reasonable study of the features of the new legislation would have disclosed the following -
(a) section 10-2(1) of the Aged Care Act, which provided that the approval of an aged care provider lapsed if it did not provide any aged care during a continuous period of 6 months;
(b) sections 16-1 to 16-11 of the Aged Care Act, which made provision for the transfer of places with the approval of the Secretary, and did not contain provisions that corresponded to s 39B(5A) and (5B) of the National Health Act;
(c) sections 54-1 and 54-2 of the Aged Care Act, which required that there be compliance with standards, including new standards that were to take effect on the "accreditation day";
(d) section 66-1 of the Aged Care Act, which provided for the imposition of sanctions for non-compliance with responsibilities, including revocation of approval;
(e) sections 67-1 to 67-5 of the Aged Care Act, which provided for the procedures for the imposition of sanctions;
(f) the transitional provisions in s 7(1) of the Consequential Provisions Act, to which we have already referred, which required that immediately before the commencement day of the Aged Care Act -
(i) Jadwan be an approved operator or proprietor of an approved nursing home; and
(ii) Commonwealth benefits be payable to Jadwan in respect of an approved nursing home patient;
(g) section 74 of the Consequential Provisions Act, which provided that a determination in force under s 45E(2) of the National Health Act was taken to be a sanction imposed under s 66-1(c)(ii) of the Aged Care Act on the commencement day, and ending when the Secretary lifted the sanction under s 68-3.
(4) A reasonable and prudent solicitor would have advised Jadwan that there was a real risk that, unless Jadwan sought an urgent injunction to prevent the delegate from acting in the way foreshadowed in the notice of intention to revoke the approval, then upon revocation of its approval, Jadwan would not have the opportunity to become an approved provider under the new legislation.
(5) On 3 February 1997, the delegate of the Minister determined that no Commonwealth financial support was payable in respect of any patient who entered Derwent Court from 4 February 1997. The text of s 45E(2) of the National Health Act was that "Commonwealth benefit [was] not payable to the proprietor of the nursing home in respect of a patient admitted to the nursing home after the making of the determination". Reasonable and prudent advice to Jadwan would have been that there was a reasonable prospect that the effect of the financial sanctions determination was that the return of a resident who had left Derwent Court would be a fresh admission of a patient for the purposes of s 45E(2) of the National Health Act.
(6) Reasonable and prudent advice would have directed Jadwan's attention to the practical necessity, if it commenced proceedings, of also challenging the financial sanctions determination which, unless set aside by a Court, or by the Administrative Appeals Tribunal, or lifted by the Department, had the consequence that as residents left Derwent Court, the number of residents entitled to Commonwealth benefit diminished, thereby putting at risk Jadwan's ability to have at least one such resident in place at Derwent Court immediately before the commencement day and to continue operating the home thereafter. The 28-day time period for making an application under s 11(1)(c) and (3)(a) of the ADJR Act in relation to the financial sanctions determination had expired, but could be enlarged by the Court. There was no time limit applicable to judicial review in the exercise of the Court's powers under s 39B(1) of the Judiciary Act, but delay might have been relevant to the discretion whether to give a remedy. The 28-day time limit under s 105AAB(2) of the National Health Act for seeking administrative merits-based review had expired, but could be enlarged by the Minister.
(7) Reasonable and prudent advice would have identified that there was a real question whether Jadwan could effect a transfer of its licences under the National Health Act in circumstances where the Department considered that Derwent Court did not comply with its conditions of approval (see s 39B(5A) and (5B) of the Act referred to at [20] above). More considered advice would have pointed to the prospect that the Minister might not issue a certificate approving the transfer of licences in circumstances where the Department regarded Jadwan as being in breach of the statutory conditions. The potential that s 39B(5A) and (5B) might preclude a transfer of licences, when the Department took the view that Derwent Court did not comply with its conditions of approval, was adverted to in the letter from Ms Hefford of the Department to Mr Hogan of 1 August 1997 (see [249]-[250] above). Mr Wicks had previously addressed this issue in a meeting with Mr Alexander on 10 June 1997 (see [133] above), but his note of his research in February 1997 did not record any reference to s 39B. In Mr Wicks's later note of his research dated 5 August 1997, there is reference to s 39B, but there is no express reference to s 39B(5A) and (5B).
(8) Reasonable and prudent advice to Jadwan would have been that there were properly arguable grounds on which an injunction might be sought relating to the composition of both Standards Review Panels, and the qualifications of their members. As to whether there was a serious question to be tried, Mr Wicks was alerted to the question of Ms Cooper's eligibility on 25 July 1997 (see [196] above), and conducted research on that day into the requirements of the National Health Regulations in relation to the composition of Standards Review Panels. Mr Porter had identified by no later than 1 August 1997 that the constitution of the second Standards Review Panel was an available ground of review, because he included it in the grounds that he prepared and faxed to Mr Wicks (see [254] above). The presence of Ms Cooper as a member of both the first and second Standards Review Panels was an arguable ground on which the reports of both could be the subject of at least a declaration as to invalidity, and an interlocutory injunction in support of that final relief was an available avenue to preserve Jadwan's interest in its bed licences. The exercise of reasonable care would have resulted in advice that there were proper grounds to argue that there was a serious question to be tried.
(9) Reasonable and prudent advice to Jadwan would have directed its attention to the usual requirement that an applicant for an interlocutory injunction give an undertaking as to damages, and to the possibility that the directors of Jadwan or the beneficiaries of the Trust might have to give security. However, reasonable advice would not have over-stated this consideration, and would have been to the effect that it was difficult to say that the Commonwealth would likely suffer any substantial damage if an interlocutory injunction were granted, and subsequently set aside.
(10) Reasonable and prudent advice would also have alerted Jadwan to potential difficulties that it faced, including -
(a) the Department had demonstrated a firm resolve to revoke Derwent Court's approval, and the Minister was likely to contest any proceeding;
(b) the bringing of a proceeding seeking an injunction would likely focus the Department's attention on any defects in its proposed decision-making process, and would direct the Department's attention to remedying any such defects;
(c) most importantly, in the medium to long term, an interlocutory injunction would not prevent the Minister from seeking to revoke the approval of Derwent Court on some available basis, whether under the National Health Act, or under the corresponding provisions of the Aged Care Act when it came into force, and Mr Wicks in fact gave advice to this effect on 24 July 1997, saying that the Department could simply turn around and "do it all again" (see [188] above);
(d) on the assumption that Jadwan obtained an interlocutory injunction, reasonable and prudent advice would have alerted Jadwan to the necessity of keeping Derwent Court operating until at least the commencement day of the new legislation in order to preserve its capacity at that time to become an approved provider under the Aged Care Act;
(e) initially, the commencement date of the operating provisions would have been unknown, as they had not been proclaimed, but the proposed commencement date of 1 October 1997 would upon enquiry of the Department or the Australian Government Solicitor likely have been ascertained;
(f) upon the commencement of the new legislation, Derwent Court would still be subject to the financial sanctions determination, unless it was set aside by the Court, or lifted by the Secretary;
(g) because Jadwan would have to keep Derwent Court operating, there were balance of convenience issues in play relating to patient care and fire safety that Jadwan would have to address by affidavit evidence;
(h) if Jadwan sought an injunction, then given that the subject-matter of the adverse reports related to the quality of care, Jadwan would have to secure its professional staffing arrangements at Derwent Court, and address that topic in evidence;
(i) if the advice was given on 23 or 24 July 1997, Jadwan would have to take account of whether it proposed to seek an interlocutory injunction in determining whether or not to give notice to its staff, in circumstances where Mr Alexander had identified the issue of notice to Jadwan's staff in his conversations with Mr Wicks on 21, 22, and 24 July 1997;
(j) if the advice was given after 24 July 1997, and Jadwan had given notice to its staff terminating their employment, thereby triggering entitlements to severance and redundancy payments, then the notices of termination could not be withdrawn unilaterally - see, Birrell v Australian National Airlines Commission [1984] FCA 419; 5 FCR 447 at 457-8 (Gray J); and
(k) obtaining an interlocutory injunction would not prevent residents leaving voluntarily having regard to the uncertain circumstances, and the Department's offer to relocate them in accommodation that the Department had identified as suitable, and the fact that the residents and their families had a choice in that regard.
504 The prospect that, if Jadwan obtained a "stay", it would not have any staff, had been adverted to by Mr Wicks on 24 July 1997 in his file note of his telephone conversation with Mr Alexander (see [187] above). However, in evidence Mr Wicks denied that he had ever been asked to give any advice to Jadwan about the termination of its staff.
505 Senior counsel for Jadwan emphasised in submissions that the grounds of judicial review available to Jadwan were not limited to those relating to the composition of the panels (including apprehended bias), but included a ground relating to denial of natural justice. Putting aside the alleged apprehension of bias, there were two ways in which this ground arose in the evidence. First, in a file note taken by Mr Wicks on 8 April 1997 of an attendance on Mr Alexander following the presentation of the report of the second Standards Monitoring Team, Mr Wicks wrote, "They are concentrating on policies, procedures & practices under the new (draft) standards" (see [108] above). We do not consider that there is objective support for the statement in the file note, as a comparison between the reports of the first Standards Monitoring Team, the first Standards Review Panel and the second Standards Monitoring Team shows that the reports appear to identify the same standards, being the gazetted standards set out in Commonwealth Special Gazette S303 dated 11 November 1987. Senior counsel for Jadwan submitted that, on review, Mr Griew explained the disparity between the reports on the basis that the second team was applying new draft standards, but we can find no support for that submission in Mr Griew's statement of reasons. Even if this suggestion appeared in Mr Griew's reasons of 13 October 1997, it does not support a finding that this would have been apparent to a reasonable and prudent legal adviser to Jadwan in July or early August 1997.
506 The second ground on which a denial of natural justice appears in the evidence is in the draft grounds of review that Mr Porter prepared on 1 August 1997 (see [254] above), which included a ground that claimed that Jadwan had not been afforded an opportunity to be heard in relation to the adverse material contained in the report of the second Standards Review Panel. This ground was removed from a later draft of the application, and having regard to the fact that by letter dated 4 June 1997 Jadwan responded to the report of the second Standards Review Panel (see [130] above), we are not persuaded that a reasonable and prudent legal adviser would regard those allegations as having merit.
507 In our view, a claim that the Panels were not constituted in accordance with the regulations was a sufficiently reasonable basis on which to allege the invalidity of the Standards Review Panel reports on which the delegate proposed to rely in revoking approval, thereby giving rise to a serious question to be tried.