Kutlu v Director of Professional Services Review

Date of hearing: 20 May 2011

Date of last submissions: 23 June 2011

Place: Sydney

Division: GENERAL DIVISION

Category: Catchwords

Number of paragraphs: 122

Counsel for the Applicants: Mr MA Robinson with Ms B Tronson

Solicitor for the Applicants: Unsworth Legal, Avant Law

Counsel for the Commonwealth of Australia and the Minister of State for Health and Ageing: Mr T Howe QC with Ms C Spruce

Solicitor for the Commonwealth of Australia and the Minister of State for Health and Ageing: Australian Government Solicitor

The other respondents in each matter submitted to any orders that the Court might make except as to costs.

IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 543 of 2010

AND: DIRECTOR OF PROFESSIONAL SERVICES REVIEW AND OTHERS (ACCORDING TO THE SCHEDULE)

IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 745 of 2010

AND: DR LEON SHAPERO AND OTHERS (ACCORDING TO THE SCHEDULE)

IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 989 of 2010

AND: WAL GRIGOR AND OTHERS (ACCORDING TO THE SCHEDULE)

IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 1112 of 2010

AND: BERNARD KELLY AND OTHERS (ACCORDING TO THE SCHEDULE)

IN THE FEDERAL COURT OF AUSTRALIA QUEENSLAND DISTRICT REGISTRY GENERAL DIVISION QUD 297 of 2010

AND: DIRECTOR OF PROFESSIONAL SERVICES REVIEW AND OTHERS (ACCORDING TO THE SCHEDULE)

JUDGES: RARES, FLICK AND KATZMANN JJ DATE OF ORDER: 28 JULY 2011 WHERE MADE: SYDNEY

1. The questions referred to the Full Court in the amended special case be answered as follows: QUESTION 1: Given that, before the purported appointments of Bernard Kelly, Wallace Grigor, and Bruce Ingram as Deputy Directors of the Professional Services Review (PSR) Panel by instrument signed by the Minister and dated 24 January 2005, the Minister did not consult with the AMA as required by s 85(3) of the Health Insurance Act 1973 (Cth) (the Act): (a) were the purported appointments of the persons in question invalid and of no effect? (b) were the PSR Committees to which one or more such persons was appointed invalidly constituted? (c) were purported referrals by the Director of PSR to PSR Committees constituted by one or more such persons invalid and of no effect? (d) were any of the purported draft and final reports of PSR Committees constituted by one or more such persons invalid and of no effect? (e) were any of the purported draft and final determinations made by the Determining Authority invalid and of no effect? Answer 1(a)-(e): Yes, all were. QUESTION 2: Given that, before the purported appointments of Paul Hanson, Timothy Flanagan, Rodney McMahon, Brian Morton, Van Phuoc Vo and Elizabeth Magassy to the PSR Panel by instrument signed by the Minister and dated 23 November 2009, the Minister did not consult with the AMA as required by s 84(3) of the Act: (a) were the purported appointments of the persons in question invalid and of no effect? (b) were the PSR Committees to which one or more such persons was appointed invalidly constituted? (c) were purported referrals by the Director of PSR to PSR Committees constituted by one or more such persons invalid and of no effect? (d) were any of the purported draft and final reports of PSR Committees constituted by one or more such persons invalid and of no effect? Answer 2(a)-(d): Yes, all were. QUESTION 3: Given that, before the purported appointments of Bruce Ingram, Leon Shapero and Bernard Kelly as Deputy Directors of PSR by instrument signed by the Minister and dated 23 November 2009, the Minister did not consult with the AMA as required by s 85(3) of the Act: (a) were the purported appointments of the persons in question invalid and of no effect? (b) were the PSR Committees to which one or more such persons was appointed invalidly constituted? (c) were purported referrals by the Director of PSR to PSR Committees constituted by one or more such persons invalid and of no effect? (d) were any of the purported draft and final reports of PSR Committees constituted by one or more such persons invalid and of no effect? Answer 3(a)-(d): Yes, all were. QUESTION 4: Did the instrument dated 23 November 2009 purportedly appointing Bruce Ingram, Bernard Kelly and Leon Shapero as Deputy Directors of PSR (and which purportedly took effect on 25 January 2010) have the effect of appointing them as Panel members within the meaning of s 84(1) and s 85(1) of the Act? Answer 4: It is unnecessary to answer this question. QUESTION 5: If the question posed in paragraph 4 above (relating to purported appointments of Deputy Directors of PSR) is answered "No", do the facts agreed in paragraph 12 of the Statement of Agreed Facts (in the absence of any other pre-existing or subsisting appointment of the persons as Panel members) mean that: (a) the purported appointments of the persons in question are invalid and of no effect? (b) the PSR Committees of which such a person was the Chairperson were invalidly constituted? (c) the purported referrals by the Director of PSR to PSR Committees of which such a person was the Chairperson are invalid and of no effect? (d) the purported draft and final reports of PSR Committees of which such a person was the Chairperson are invalid and of no effect? Answer 5: It is unnecessary to answer this question. QUESTION 6: If any question posed in sub-paragraphs 1(a)-(e), 2(a)-(d), 3(a)-(d) and 5(a)-(d) is answered "Yes", does the de facto officers doctrine affect the claim of any applicant to relief in respect of any such invalidity and, if so: (a) which applicant(s)? and (b) how is such claim affected? Answer 6: No, the de facto officers doctrine does not have any operation in respect of any of the present matters.
2. In proceedings NSD 543 of 2010, NSD 745 of 2010, NSD 989 of 2010 and NSD 1112 of 2010 the Commonwealth of Australia pay the applicants' costs of the amended special case.
3. In proceedings QUD 297 of 2010 the Minister of State for Health and Ageing pay the applicant's costs of the amended special case. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. The text of entered orders can be located using Federal Law Search on the Court's website. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 543 of 2010

AND: DIRECTOR OF PROFESSIONAL SERVICES REVIEW AND OTHERS (ACCORDNG TO THE SCHEDULE)

IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 745 of 2010

AND: DR LEON SHAPERO AND OTHERS (ACCORDING TO THE SCHEDULE)

IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 989 of 2010

AND: WAL GRIGOR AND OTHERS (ACCORDING TO THE SCHEDULE)

IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 1112 of 2010

AND: BERNARD KELLY AND OTHERS (ACCORDING TO THE SCHEDULE)

IN THE FEDERAL COURT OF AUSTRALIA QUEENSLAND DISTRICT REGISTRY GENERAL DIVISION QUD 297 of 2010

AND: DIRECTOR OF PROFESSIONAL SERVICES REVIEW AND OTHERS (ACCORDING TO THE SCHEDULE)

JUDGES: RARES, FLICK AND KATZMANN JJ DATE: 28 JULY 2011 PLACE: SYDNEY

REASONS FOR JUDGMENT RARES AND KATZMANN JJ: 1 This amended case was reserved for consideration by the Full Court by Flick J on 12 May 2011. It concerns the legal consequences that affect a number of statutory appointments that were made by Ministers who did not comply with a requirement to consult with a third party before making the appointments. At issue are the validity of the appointments and whether the Ministers' failures to comply with the statutory requirement of prior consultation affected the subsequent exercise of their offices by those appointees. 2 The Health Insurance Act 1973 (Cth) requires the Minister to consult with the Australian Medical Association (AMA) before appointing a medical practitioner to be a member of the Professional Services Review Panel (s 84(3)) or a Deputy Director of Professional Services Review (s 85(3)). 3 In 2005, without first consulting the AMA, the then Minister appointed as Deputy Directors, three medical practitioners, who were also then Panel members. In 2009, the present Minister re-appointed some Panel members without first consulting the AMA on those appointments. In addition, in 2009 the Minister also appointed as Deputy Directors some medical practitioners, who were then Panel members, without first consulting the AMA or expressly re-appointing them as Panel members. 4 Each of the appointees was a member or Deputy Director of a Professional Services Review Committee (Committee) that made adverse findings against each of the five applicant medical practitioners in conducting reviews of those practitioners' rendering of professional services for which the Commonwealth paid Medicare benefits. In late 2010, the Commonwealth made public that the Ministers had not complied with the statutory requirement of prior consultation before making, among others, those appointments. The five medical practitioners contend that the consequence is that the Committees were not validly constituted and the findings by those Committees against them are of no effect.

Issues 5 The amended special case poses six questions on the basis of agreed facts. The agreed facts are detailed and set out the relevant bases on which the questions reserved can be addressed. Critically, the agreed facts establish that: before he and she signed the instruments of appointment of Deputy Directors and Panel members in 2005 and 2009, neither Minister had undertaken any consultation with the AMA about the relevant intended appointments, contrary to the requirements for such consultation in ss 84(3) and 85(3) of the Act; none of the Deputy Directors appointed with effect from 25 January 2010 by the Minister signing an instrument on 23 November 2009 was reappointed as a Panel member by any other instrument. 6 In essence, the questions seek answers to the following: 1. Given that the then Minister did not consult with the AMA as required by s 85(3) of the Act before he appointed three persons as Deputy Directors by instrument signed by him on 24 January 2005: (a) were those appointments invalid and of no effect? (b) were the Committees to which one or more of those persons was or were appointed, invalidly constituted? (c) was each referral to a Committee so constituted invalid and of no effect? (d) was any of the draft and final reports of any Committee so constituted invalid and of no effect? (e) was any of the draft or final determinations of the Determining Authority invalid and of no effect? 2. Given that the Minister did not consult with the AMA as required by s 84(3) of the Act before she appointed six persons as Panel members by instrument dated 23 November 2009: (a) were those appointments invalid and of no effect? (b) were the Committees to which one or more of those persons was or were appointed invalidly constituted? (c) was each referral to a Committee so constituted invalid and of no effect? (d) was any of the draft and final reports of any Committee so constituted invalid and of no effect? 3. Given that the Minister did not consult with the AMA as required by s 85(3) of the Act before she appointed three persons as Deputy Directors by instrument dated 23 November 2009: (a) were those appointments invalid and of no effect? (b) were the Committees to which one or more of those persons was or were appointed invalidly constituted? (c) was each referral to a Committee so constituted invalid and of no effect? (d) was any of the draft and final reports of any Committee so constituted invalid and of no effect? 4. Did the instrument dated 23 November 2009 that appointed the three persons as Deputy Directors on and from 25 January 2010 also have the effect of appointing them as Panel members within the meaning of ss 84(1) and 85(1) of the Act? 5. If question 4 is answered "no", does the fact that no separate instrument was signed by the Minister appointing those three persons as Panel members mean that: (a) the appointments were invalid and of no effect? (b) the Committees of which each such appointee was Chairperson were invalidly constituted? (c) each referrals to each Committee so constituted was invalid and of no effect? (d) the draft and final reports of each Committee so constituted were invalid and of no effect? 6. If any of questions 1, 2, 3 or 5 is answered "yes", does the de facto officers doctrine affect the claim of any applicant to relief in respect of such invalidity, and if so, how?

The Legislative Scheme 7 Part VAA of the Act provides for the Professional Services Review Scheme. The object of Part VAA is to protect the integrity of the Commonwealth medical and pharmaceutical benefits programs and in doing so to protect, first, patients and the community from risks associated with inappropriate practice (as defined in s 82) and secondly, the Commonwealth from having to meet the cost of services provided as a result of "inappropriate practice" (s 79A). The Part applies to a range of practitioners in professions including medicine, dentistry, chiropracty, physiotherapy and osteopathy (s 81). 8 A general practitioner engages in inappropriate practice if his or her conduct in connection with rendering or initiating services is such that a Committee could reasonably conclude that the conduct would be unacceptable to the general body of general practitioners (s 82(1)(a)). Similar definitions of "inappropriate practice" apply to practitioners of the other professions regulated by the Professional Services Review Scheme (s 82). 9 The Minister may appoint a medical practitioner to be the Director of Professional Services Review, but, "… must not appoint a person unless the AMA has agreed to the appointment" (s 83(1) and (2)). Next, ss 84 and 85 provide: "84 The Professional Services Review Panel (1) The Professional Services Review Panel is established. (2) It consists of practitioners appointed by the Minister. (3) Before appointing a medical practitioner to be a Panel member, the Minister must consult the AMA. The Minister must make an arrangement with the AMA under which the AMA consults other specified organisations and associations before advising the Minister on the appointment. (4) Before appointing a practitioner other than a medical practitioner to be a Panel member, the Minister must consult such organisations and associations, representing the interests of the profession to which the practitioner belongs, as the Minister thinks appropriate. 85 Deputy Directors of Professional Services Review (1) The Minister may appoint Panel members to be Deputy Directors of Professional Services Review. (3) Before appointing a medical practitioner to be a Deputy Director, the Minister must consult the AMA. The Minister must make an arrangement with the AMA under which the AMA consults other specified organisations and associations before advising the Minister on the appointment. (4) Before appointing a practitioner other than a medical practitioner to be a Deputy Director, the Minister must consult such organisations and associations, representing the interests of the profession to which the practitioner belongs, as the Minister thinks appropriate." (emphasis added) 10 The Chief Executive Officer of Medicare Australia (previously the Health Insurance Commission) may request the Director to review the provision of services by a person during the period of up to two years immediately preceding the request (ss 86, 88A). The Director has one month to decide whether or not to undertake the review. The Director must so decide if it appears to him or her that there is a possibility that the person has engaged in inappropriate practice in providing services during the review period (s 88A(2)). If the Director decides to undertake the review, he or she must set up a Committee in accordance with Div 4 of Pt VAA and make a referral to it to investigate whether the person under review did engage in inappropriate practice in providing the services specified in the referral (s 93(1)). 11 Division 4 deals with the constitution of Committees. A Committee consists of a chairperson who is a Deputy Director and, at least, two other Panel members who must all be members of the same profession and, if appropriate, specialty, as the person under review (s 95). The person under review may challenge the appointment of a Committee member on the grounds that he or she is, or is likely to be, actually or apparently biased (s 96(1)). Such a challenge must be made by the person under review in writing within seven days of being notified of the referral (s 96(2)). The Director then must decide if the challenge is justified and, if so, he or she must revoke the impugned appointment and appoint another Panel member to the Committee who then becomes a member (s 96(3)-(5)). Next, s 96A provides: "96A If Committee members are unavailable (1) If, before the Committee starts its investigation, a Committee member ceases to be a Panel member or, for any other reason, is unable to take part in the investigation, the Director may appoint another Panel member to the Committee as a replacement. (2) If: (a) the Committee has started its investigation; and (b) before the Committee completes its final report, a Committee member ceases to be a Panel member or, for any other reason, is unable to take any further part in the investigation or preparation of reports; the remaining Committee members may, if the person under review consents, constitute the Committee for the purpose of: (c) if the Committee's investigation is not yet complete - completing its investigation; and (d) preparing the Committee's reports. (3) If the person under review does not consent to the remaining Committee members constituting the Committee, the Director must set up another Committee under subsection 93(1)." (emphasis added) 12 The Committees have extensive investigative powers under Pt VAA, but it is not necessary to describe those here. The Act provides in Div 6 of Pt VAA for the appointment, tenure and conditions attaching to the offices of, among others, the Director and Panel members, but makes no reference to Deputy Directors. Relevantly, the Director is to be appointed for a period not exceeding three years, and each Panel member is to be appointed for a period, not exceeding five years, being a period in each case "specified in the instrument of appointment" (ss 106Y(1), 106ZG(1)). The Director and each Panel member is eligible for re-appointment (ss 106Y(2), 106ZG(2)). Panel members hold office on a part-time basis and "… on such other terms and conditions (in respect of matters not provided for in this Act) as are determined in the instrument of appointment" (s 106ZH). A Panel member may resign in writing (s 106ZJ) and the Minister may terminate his or her appointment for misbehaviour, physical or mental incapacity or if he or she becomes bankrupt or subject to certain forms of insolvent administration or engages in any paid employment that, in the Minister's opinion, conflicts with the proper performance of his or her duties (s 106ZK). 13 Once a Committee has been set up, it must carry out its functions of investigation under the Act and produce a final report (s 106G(1) and (2)). It must make findings only in respect of the services referred to it for review (s 106H). After the Committee has prepared a draft report it must provide the draft to the person under review for his or her written submissions as to suggested changes (s 106KD). Then, if the person under review has had the opportunity to suggest changes, the Committee must prepare a final report in accordance with s 106L. If that final report contains a finding of inappropriate practice by the person under review, the Committee must give it to the Determining Authority (s 106L(3)(b)). The Determining Authority has functions under Div 5 of Pt VAA to make determinations that, among others, can provide for services by the person under review to cease to be eligible for Medicare benefits or require him or her to repay to the Commonwealth the whole or part of any such benefits that he or she had received (s 106U).

The Commonwealth's Submissions on failure to consult 14 The parties accepted that the requirement for prior consultation with the AMA imposed on the Minister by each of ss 84(3) and 85(3) was important. However, they differed as to the consequence of a failure to consult. 15 The Commonwealth contended that it could not have been the intention of the Parliament that such a failure, first, rendered the appointments invalid, and, secondly, caused the constitution and all the processes of Committees of which such appointees were members to be invalid. It submitted that the requirement of prior consultation in ss 84(3) and 85(3) was in contrast to the prohibition on the Minister's power to appoint the Director under s 83(1) and (2) unless the AMA had agreed to that appointment. It also referred to s 106ZPB(2) that provided that the Minister must not appoint a person to be the Chair, a lay member or a medical practitioner member of the Determining Authority unless the Minister had consulted the AMA about the appointment. The Commonwealth argued that even if the appointment of a Panel member or Deputy President itself were invalid, this did not deprive the Committee, on which that appointee acted, of validity. The Commonwealth pointed to the significant public inconvenience that would flow from a construction of ss 84(3) and 85(3) that resulted in the invalidity of appointments made without the Minister having first consulted and been advised by the AMA. It submitted that the power to appoint under ss 84(3) and 85(3) ought be characterised as a legislative direction to appoint in accordance with matters of policy. It argued in the alternative that the common law principle of preserving the validity of what had been done by de facto officers ought to be applied to preserve what such Committees had done.

The Construction of ss 84(3) and 85(3) 16 Once appointed, a Panel member and a Deputy Director will be an officer of the Commonwealth for the purposes of s 75(v) of the Constitution. He or she will perform an important public function under the Act. Each of ss 84(3) and 85(3) requires the Minister to undertake two specific tasks before making an appointment. First, he or she must consult with the AMA about the appointment. Secondly, the Minister must make an arrangement with the AMA under which it consults other specified organisations "before advising the Minister on the appointment". The express purpose of each section in requiring the Minister to consult the AMA is so that it can advise the Minister on each proposed appointee's suitability. The requirement that the Minister must make the arrangement with the AMA for it to consult with other specified organisations and associations apparently seeks to ensure that the professional body of relevant medical specialty practised by a proposed appointee is also consulted about that medical practitioner and that the AMA only gives advice to the Minister on a proposed appointee after it has consulted with that body. 17 The extent of the Minister's statutory obligation to consult the AMA before the appointment of a medical practitioner under ss 84(3) and 85(3) is slightly different from the obligation to consult with other professional bodies before appointing Panel members and Deputy Directors from other professions under ss 84(4) and 85(4). In the latter cases the Minister is not required to make arrangements concerning any specialties or subcategories within other professions than medicine. However, the purpose of requiring such consultation is the same. 18 Importantly, ss 84(3) and 85(3) contemplate that, after consultation with and advice from the AMA about them, the Minister can appoint persons, whose appointment the AMA did not support or opposed. That is in sharp contrast to the AMA's power of veto over the appointment of the Director under s 83(1) and (2). Unlike s 83, s 106ZPB(2) does not give the AMA a power of veto. Rather, s 106ZPB(2) expresses in prohibitory language the same concept that ss 84(3) and 85(3) express in positive language, namely, that it is a precondition of the Minister's ability to exercise the power of appointment that he or she has first consulted the AMA on the appointment. However, this distinction in the statutory description of the roles played by the AMA in the different processes of appointment does not gainsay the purpose of requiring the Minister to consult with, and be advised by, the AMA before appointing Panel members and Deputy Directors under ss 84(3) and 85(3). Such consultation and advice can expose significant matters for the Minister to consider about a prospective appointee as part of the deliberative process. 19 The legislative intention discernible in Div 2 of Pt VAA is that the AMA (and other professional representative bodies) will have a substantive opportunity to give advice to the Minister on a proposed appointee before that person is appointed to a position where he or she will sit on a peer review body, being a Committee. It is implicit in ss 84(3) and 85(3) that the Minister must have regard to the consultation with, and advice of, the AMA in exercising the power to make an appointment. That is to say, the advice of the AMA is a relevant, though not decisive, consideration for the Minister in arriving at a decision to make an appointment. 20 Part VAA contemplates a system of professional peer review to investigate and make determinations about whether a practitioner has engaged in inappropriate practice. The task of a Committee is to make a determination about inappropriate practice by a professional in the relevant discipline as assessed by his or her peers in that discipline. That requires it to make a determination as to whether the conduct of the practitioner in rendering or initiating the services under review would be unacceptable to the general body of that person's profession or specialty. The appointment process contemplated in ss 84 and 85 is intended not only to ensure public confidence in the decisions reached after involvement of Committees, but also to ensure the confidence of the relevant professions, as well as the professional whose conduct is being reviewed. In the case of medical practitioners, that process was intended by the Parliament to be one for which the persons carrying out the review had been selected only after the Minister had received advice from the AMA and, through it, any other relevant professional organisation or association about a proposed appointee. It follows that the provisions of ss 84(3) and 85(3) provide indicia of a legislative intention that prior consultation by the Minister is an essential pre-requisite to the validity of an appointment of officeholders under those sections. 21 Section 96A provides a further important indication of the intention of the Parliament as to the consequences of a defect in the constitution of a Committee. That section contemplates that once a Committee has started its investigation and before it completes its final report, one of its members may cease to hold office or, "for any other reason" be unable to take any further part in an investigation or the preparation of reports. In such a case, the Parliament made clear, in s 96A(2), that the remaining Committee members could complete the investigation and prepare its reports but only with the express consent of the person whose conduct was the subject of review. If that consent were not given, s 96A(3) requires the Director to establish a new Committee. 22 In other words, s 96A evinces a legislative choice. It expressly stipulates that a Committee will have no power to proceed without the consent of the person under review where a Panel member ceases to be a Panel member or "for any other reason is unable" to take part in the investigation or preparation of reports by the Committee. This stands in contrast to the Commonwealth's assertion that invalidity was not an intended consequence of the Minister's failure to comply with the consultation process mandated by the Act in ss 84 and 85. That is because each of s 96A(2) and (3) creates a right for a person under review to grant or withhold consent to a Committee continuing to deal with his or her review where its constitution has changed since it embarked on the review process. The expiry or invalidity of a Panel member's appointment would be examples of why he or she was unable to continue as or be a member of a Committee. This is because he or she would "cease to be a Panel member" or would be unable to take any further part in the review process. Thus, s 96A(2) expressly contemplated that a person's term of appointment under ss 84 or 85 could expire before a Committee of which he or she was a member had completed its final report and that the consequence of this that the Parliament intended was invalidity, unless the person under review consented to the Committee continuing without that member. Another reason may be that the Panel member is temporarily unavailable. In such a case, a Committee could not proceed without such consent, as was held in respect of similar legislation in Tu v University of New South Wales (2003) 57 NSWLR 376 at 386 [21], 387 [24]-[25] and 388 [27] per Sheller JA with whom Beazley and Tobias JJA agreed. 23 The same consequence, invalidity, must follow even if the person under review found out after a Committee had published its final report that his or her consent had not been sought under s 96A(2) and (3), because those provisions make the consent a precondition of the Committee being able to continue its functions. There is no reason why a different result should follow in a case like the present where an important statutory precondition to the appointment of Panel members and Deputy Directors was not observed. The operation of s 96A(2) and (3) is an indication that the Parliament regarded the valid and proper constitution of a Committee as an essential and indispensible condition of any Committee's exercise of its functions under the Act. 24 Here, the consultative process provided for in ss 84(3) and 85(3) involves private communications between the Minister and the AMA. In addition, the Minister is not constrained from appointing as he or she later decides by anything that the AMA says or advises in the consultation process, so long as he or she has regard to the advice that the AMA gives about the proposed appointee. The public, and persons whose conduct is or may become subject to review under Pt VAA of the Act, may never become aware of whether, or to what extent, consultation and advice occurred prior to the appointment of a Panel member or Deputy Director. And, self-evidently, if the Minister's failure to consult with, and be advised by, the AMA concerning an appointee in accordance with ss 84(3) or 85(3) resulted in the appointment being invalid, then it is possible that several or many decisions or reviews in which the appointee participated would be invalid. 25 No doubt, the Parliament would not have anticipated the significant, but apparently unintended, failures of each Minister to consult the AMA at all on the impugned appointments he and she made in 2005 and 2009. Those failures appear to have resulted from an incorrect view of the meaning of consultation taken by those advising the Ministers as opposed to any conscious decision not to comply with the requirements of the Act by either Minister. The magnitude of the consequences of the Court finding invalidity here is simply the product of the scale of the breaches of both Ministers' statutory obligations over a considerable period. It must be accepted that these consequences would not promote the express object of Pt VAA in s 79A of the Act. These factors relating to public inconvenience, on their own, are suggestive of a legislative intention that a failure to consult as required in ss 84 and 85 will not spell invalidity on any appointment made without prior consultation: Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at 392-393 [97]-[100] per McHugh, Gummow, Kirby and Hayne JJ who cited Clayton v Heffron (1960) 105 CLR 214 at 247; TVW Enterprises Ltd v Duffy (No 3) (1985) 8 FCR 93 at 104-105 per Sheppard J, and Montreal Street Railway Co v Normandin [1917] AC 170 at 175. Those were all cases in which a failure to consult, or take some step as required by legislation, had not resulted in invalidity. 26 For example, in TVW Enterprises 8 FCR 93 a statutory provision required the Minister to consult with representatives of the broadcasting and television industry "[i]n discharging his responsibilities", among other things, to plan the development of broadcasting and television in Australia. A challenge to a decision under another section of the statute to invite interested parties to apply for the grant of a new television licence failed even though the Minister had not consulted the industry about proposed specifications on the new licence. In substance, the Minister's obligation to consult there was in relation to the development of policy: see 8 FCR at 112 per Beaumont J. And in Clayton 105 CLR at 247 Dixon CJ, McTiernan, Taylor and Windeyer JJ said: "… the performance of a public duty or the fulfilment of a public function by a body of persons to whom the task is confided is regarded as something to be contrasted with the acquisition or exercise of private rights or privileges and the fact that to treat a deviation in the former case from the conditions or directions laid down as meaning complete invalidity would work inconvenience or worse on a section of the public is treated as a powerful consideration against doing so." 27 These considerations do not displace the express words of ss 84(3) and 85(3). Those words impose essential preliminaries or preconditions to the exercise of the Minister's power to appoint a person, as an officer of the Commonwealth, being a Panel member and a Deputy Director: cf. Leichhardt Municipal Council v Minister for Planning (1992) 78 LGERA 306 at 340 per Sheller JA, with whom Priestley and Meagher JJA agreed. The preconditions to the exercise of the power are that the Minister has consulted with, and been advised by, the AMA on the appointment. The advice of the AMA was a matter to which the Act required the Minister to have regard as a relevant and necessary consideration in making an appointment. As McHugh, Gummow, Kirby and Hayne JJ pointed out in Project Blue Sky 194 CLR at 391 [94]-[95]: "The fact that s 160 regulates the exercise of functions already conferred on the ABA rather than imposes essential preliminaries to the exercise of its functions strongly indicates that it was not a purpose of the Act that a breach of s 160 was intended to invalidate any act done in breach of that section. That indication is reinforced by the nature of the obligations imposed by s 160. Not every obligation imposed by the section has a rule-like quality which can be easily identified and applied. … When a legislative provision directs that a power or function be carried out in accordance with matters of policy, ordinarily the better conclusion is that the direction goes to the administration of a power or function rather than to its validity (cf Broadbridge v Stammers (1987) 16 FCR 296 at 300)." (emphasis added) 28 The Commonwealth's argument that the power of appointment under ss 84(3) and 85(3) was better characterised as a legislative direction to appoint in accordance with matters of policy should be rejected. The obligations imposed by the sections have a rule-like quality which can be easily identified and applied. The Parliament used the words "must consult" and "before advising" to achieve the purposes described in [19]-[20] above. To read them in the way the Commonwealth urges would defeat that purpose. It could not be suggested that if the AMA had not agreed to the appointment of the Director under s 83(2), any appointment to that office would be valid. Likewise, ss 96 and 96A also contemplate that Committees must be constituted validly at all times and that, in some circumstances, they will not be so constituted and cannot proceed with their functions. These matters are indications that the processes of appointment to offices and Committees in the scheme of Pt VAA were considered by the Parliament to be essential preliminaries or preconditions to the exercise of the important functions that the Act conferred on Committees and the persons who constituted them. 29 The Commonwealth referred to a considerable number of authorities in support of its suggested construction of ss 84(3) and 85(3). None of those cases had considered those sections. The task of statutory construction must begin with a consideration of the text of the provision or provisions concerned: Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (2009) 239 CLR 27 at 46-47 [47] per Hayne, Heydon, Crennan and Kiefel JJ. Their Honours noted there that the meaning of the text may require consideration of the context, including the general purpose and policy of the provision and, in particular, any mischief it is seeking to remedy. In addition, the principles of statutory construction are relevantly explained by the majority in Project Blue Sky 194 CLR 355. For these reasons it is neither necessary nor appropriate to consider the various decisions about other statutes enacted in different contexts to which the Commonwealth referred. 30 The Commonwealth placed particular reliance, however, on the construction of s 70(1) of the Australian Broadcasting Corporation Act 1983 (Cth) favoured by Mason CJ, Deane and Gaudron JJ in Australian Broadcasting Corporation v Redmore Pty Ltd (1989) 166 CLR 454 at 457-460. That section provided that "… the Corporation shall not, without the approval of the Minister" enter into certain types of contract. Their Honours held that the question whether s 70(1) should be construed as confining power, or as directory of the manner of its exercise, was finely balanced. They noted that the section there dealt with the exercise, not existence, of the corporation's power to contract and was directed to the corporation, rather than an innocent third party with whom it was dealing. Their Honours referred to the natural presumption that a third party would make, namely, that the corporation would have complied with any statutory obligation to obtain the Minister's approval. They observed that s 70(1) did not specify whether the Minister's approval need be in writing nor did it provide for any consequence of a failure by the corporation to obtain approval: Redmore 166 CLR at 457. Finally, they held that if the legislature had intended the consequence of the corporation's failure to obtain the Minister's approval was the invalidity of a contract it had made with an innocent third party, that intention had to be discerned from the words of the section construed in the context of the Act as a whole. Their Honours concluded that a failure by the corporation to obtain the approval of the Minister did not invalidate the contract or make it unenforceable. 31 That decision is distinguishable. First, it concerned the private law consequences of a failure by a statutory corporation to obtain Ministerial approval for a contract. Mason CJ, Deane and Gaudron JJ said that, if there were a failure to comply with the direction to obtain Ministerial approval, a construction favouring invalidity could have the effect of either confining the powers of the corporation or of invalidating any contract with an innocent third party. They also pointed to similar provisions in the same statute that supported their conclusion that the Parliament had not intended that the corporation's failure to obtain the Minister's approval would result in a third party supplier of goods or services being put in the position of having no contractual rights to payment for having provided those goods or services: Redmore 166 CLR at 457-459. Those considerations do not apply to the public law requirements to appoint a person as an officer of the Commonwealth in accordance with preconditions that the Parliament specified. Moreover, the statutory contexts are different. 32 The public inconvenience resulting from a finding of invalidity of the various impugned appointments is likely to be significant. However, the scale of both Ministers' failures to obey simple legislative commands to consult the AMA before making the appointments is not likely to have been a matter that the Parliament anticipated. If the appointments were treated as valid, the unlawfulness of the Ministers' conduct in making them would attract no remedy. And, if that were so, the appointees would hold the offices to which the Minister had unlawfully appointed them and they could not be prevented by injunction or other orders of a court from exercising the powers of those offices: cf. Project Blue Sky 194 CLR at 393 [100]. 33 In summary, the requirements of ss 84(3) and 85(3) are essential preliminaries to the Minister's exercise of the power of appointment. They have a rule-like quality that is easily identified and applied. The sections do not direct the Minister to carry out his or her powers of appointment in accordance with matters of policy. Instead, they confer a discretion to appoint after the preconditions of consultation with, and advice by, the AMA have been fulfilled and the Minister has had regard to that advice. 34 It follows that all the impugned appointments were invalid.

Additional reasons favouring invalidity 35 In addition, the Committees on which the persons whose appointments are impugned served were not capable of exercising any functions or powers under the Act. That latter consequence also arises because none of the five medical practitioner applicants had given consent under s 96A for the Committees to proceed when one or more of their three members had not been validly appointed under ss 84(3) or 85(3): cf. Tu 57 NSWLR at 386 [21]. As Fullagar J pointed out in Australian Communist Party v The Commonwealth (1951) 83 CLR 1 at 258 a stream cannot rise higher than its source. Persons cannot exercise the powers of a Committee under the Act unless each of the members of that body, in fact, is and continues to be validly appointed. 36 The Minister was required to, but did not, take the AMA's advice into consideration when making an appointment under ss 84(3) and 85(3). A failure to have regard to a relevant consideration is a jurisdictional error. An administrative decision that is made in excess of the jurisdiction or power conferred on the decision-maker by the Act or other legislation that authorises the making of such a decision, is no decision at all. The proper characterisation of such a purported decision is that it involves jurisdictional error and, in the absence of legislative validation or prescription against challenge, the decision is of no legal effect: Plaintiff S157/2002 v Commonwealth (2003) 211 CLR 467 at 506 [76] per Gaudron, McHugh, Gummow, Kirby and Hayne JJ. Thus, each impugned appointment was affected by jurisdictional error and was also invalid for that reason. 37 After judgment was reserved, the Court invited the parties to make submissions on the effect, if any, of a considerable number of sections in the Act that expressly provided that a decision made after a failure by a person, including the Minister, to comply with a requirement under the Act, did not affect the validity of the decision. In Commissioner of the Australian Federal Police v Oke (2007) 159 FCR 441 at 447 [33] Branson and Lindgren JJ, with Besanko J's agreement, said that in determining the consequence that the Parliament intended to follow from a failure to comply with a particular requirement in one section of an Act, weight, but not compelling weight, could be given to the fact that a saving provision existed in other sections of that Act in respect of failures to comply with those provisions. Here, Pt VAA contains such savings provisions in ss 87(2), 88A(5) and (7), 89B(5), 93(7D), 105A(5), 106G(5), 106R(5), 106T(4) and 106TA(2). These provisions were in the Act in 2005 and 2009 when the impugned appointments were made. It is not necessary to rely on the existence in the Act of these other provisions to construe ss 84(3) and 85(3). Nonetheless, the presence of those other saving provisions provides some further support for the conclusion that, had the Parliament intended a similar outcome from a failure by the Minister to comply with the requirements of consultation and advice before making appointments under ss 84(3) and 85(3), it would have said so.

Conclusion on Questions 4 and 5 38 Because all the impugned appointments were invalid, it is not necessary to answer questions 4 and 5. They concerned whether the purported appointment of the Deputy Directors had been effected by the Minister signing an instrument of such appointments notwithstanding that they had not been separately appointed as Panel members. There was no consultation for any of those appointments in contravention of s 85(3). Accordingly, the appointments of the Deputy Directors could not have been valid, whatever the Minister signed.

Were any of the appointees acting as de facto officers? 39 That leaves question 6 for consideration. The Commonwealth argued that if any of the purported appointments were found to be invalid, the acts of those appointees nevertheless could not be challenged in these proceedings by force of the common law doctrine concerning the validity of acts done by de facto officers. 40 The agreed facts record that the issue concerning the validity of each impugned appointment of Panel members and Deputy Directors was only raised after each Committee had completed all its processes under the Act in respect of each of the five applicant medical practitioners. The Commonwealth argued that, as a result, the validity of the appointments could not be challenged in proceedings such as these in which that question is merely a collateral matter. It argued that the principles concerning acts of de facto officers only operated to defeat collateral challenges. It contended that the doctrine prevented a challenge, such as that made in these proceedings, to the past acts of a person purporting to occupy an office in apparent execution of that office. The Commonwealth submitted that three conditions had to be fulfilled in order for the principles to operate. These were, first, a de jure office had to exist, secondly, the power exercised by the de facto officer must be within the scope of that de jure office's authority and, thirdly, the de facto officer must have the "colour of authority" in exercising the office's power. 41 The Commonwealth did not identify any decision in which the de facto officers doctrine had been applied to the acts of a person purporting to act as an officer of the Commonwealth. It sought to draw on obiter dicta by two Full Courts of this Court to support its argument. In Telstra Corporation Ltd v Seven Cable Television Pty Ltd (2000) 102 FCR 517 at 544 [97] Beaumont, Moore and Gyles JJ said (in a passage referred to with apparent approval by French, Marshall and Mansfield JJ in Hicks v Minister for Immigration and Multicultural and Indigenous Affairs (2005) 146 FCR 427 at 437 [38]): "Whilst there may be a question as to whether an administrative act is void or voidable, and as to the significance and effect of such an act pending a declaration of invalidity by a court ... it is fundamental that the purported exercise of a statutory power which does not accord with the statute is of no effect and may be disregarded - it does not impose duties or create rights. For certain (interlocutory) purposes, an administrative act may be presumed regular until set aside ... Once a court has declared the invalidity then it follows that the act is avoided ab initio ... like a statute which is declared invalid if it is beyond power ... A possible exception to this principle is the so called de facto officers doctrine, which has no relevance here." (italicised emphasis in original; bold emphasis added; references to authorities omitted) 42 The Commonwealth's argument must be rejected. The principles concerning de facto officers have been applied in a variety of common law contexts. But the issue here concerns whether the acts of a person who has not been validly appointed as an officer of the Commonwealth can be treated as if they were acts of a person authorised so to act by or under the Constitution or an Act of the Parliament. 43 The decision of a Committee to make a final report adverse to the person under review is a decision or activity of an administrative character. In the absence of a legislative prescription to the contrary, such a decision is open to collateral review by a court in the course of dealing with an issue arising as an element in a justiciable controversy of which the Court is seized: Attorney-General (Cth) v Breckler (1999) 197 CLR 83 at 108 [36] per Gleeson CJ, Gaudron, McHugh, Gummow, Hayne and Callinan JJ and cf Kirby J at 130-131 [93]-[94]. 44 Here, the five applicants have each commenced proceedings challenging the decision of Committees to make final reports adverse to them under s 106L. No section of the Act prevents a collateral challenge being made in these proceedings to the power of any persons constituting the Committees to act in the positions of Panel member or Deputy Director or to the validity of the Committees' constitution, acts and final reports. If the decisions were made, as we have found, by persons not authorised by the Parliament to exercise such powers, they were made in excess of the jurisdiction conferred by Pt VAA of the Act on a Committee and, accordingly, were no decisions at all: S157/2002 211 CLR at 506 [76]. 45 The last sentence in the passage quoted above from Telstra 102 FCR at 544 [97] suggested that the de facto officer doctrine was only "a possible exception" that had no relevance to either Full Court's decision. In contrast, in Bond v The Queen (2000) 201 CLR 213 at 225 [34] Gleeson CJ, Gaudron, McHugh, Gummow, Kirby and Hayne JJ said: "Second, and more importantly, the question of the powers of the particular officer of the Commonwealth is, as has already been noted, a question arising under the Constitution or involving its interpretation. That question cannot be resolved by ignoring the alleged want of power on some basis of colourable or ostensible authority let alone, as would be necessary in this case, on the basis that the bare fact of the purported exercise of a power is to be accorded some constitutional significance. If, as is the case here, s 109 operates to invalidate State legislation which purports to confer power on an officer of the Commonwealth, that constitutional consequence of the inconsistency between State and Commonwealth laws cannot be ignored (University of Wollongong v Metwally (1984) 158 CLR 447 at 457-458, per Gibbs CJ; at 461-462, per Mason J; at 468, per Murphy J; at 474-475, per Brennan J; at 478-479, per Deane J; at 484-485, per Dawson J)." (emphasis added) 46 In that case, the Court was dealing with acts by an officer of the Commonwealth who sought to exercise powers given to officers of a State. It is unlikely that their Honours overlooked what the Court had said (with Kirby J dissenting) one month earlier in respect of the position of a de facto officer under State law in Cassell v The Queen (2000) 201 CLR 189 at 193 [19] per Gleeson CJ, Gaudron, McHugh and Gummow JJ, when they referred in Bond 201 CLR at 225 [34] to the position in respect of whether a person not appointed as an officer of the Commonwealth for the purpose could act as if he or she were. 47 A law of the Commonwealth, such as an Act authorising an officer to bring or continue a prosecution, or an appeal, should be construed as requiring the officer or body in question to have and to exercise only such powers as the Parliament of the Commonwealth thereby has chosen to vest in them: MacLeod v Australian Securities and Investments Commission (2002) 211 CLR 287 at 302 [44] per Gleeson CJ, Gaudron, McHugh, Gummow, Hayne and Callinan JJ. A similar view was reached by the Court of Criminal Appeal of the Supreme Court of New South Wales in R v Janceski (2005) 64 NSWLR 10 at 34 [132] per Spigelman CJ, with whom Wood CJ at CL at 40-41 [208], Hunt A-JA at 41 [212], Howie J at 57 [284] and Johnson J at 57 [287] all agreed on this point. The Chief Justice said that the de facto officers doctrine is a principle of common law and that it could be overridden by statute. He concluded that where invalidity had been established in accordance with the principles in Project Blue Sky 194 CLR 355, it was difficult to see that the de facto officers doctrine could ever be applicable. Despite the fact that those remarks were obiter dicta, they reflect a sound basis on which to determine the inapplicability of the de facto officers doctrine to the present matters: Janceski 64 NSWLR at 34 [132]. 48 Once the position has been established that none of the impugned appointments was valid, it follows that the appointees were, unknowingly, usurping the public offices in which they purported to act. The Parliament did not authorise persons to exercise those offices unless they had been appointed in accordance with ss 84(3) and 85(3) of the Act. The impugned appointees were not so appointed. The de facto officers doctrine had no application to the invalid appointments.

Conclusion 49 Accordingly, all of questions 1, 2 and 3 that asked whether the constitution of the various Committees and their draft and final reports were invalid should be answered: "Yes, all were". It is not necessary to answer questions 4 and 5. Question 6 should be answered "No, the de facto officers doctrine does not have any operation in respect of any of the present matters.". I certify that the preceding forty-nine (49) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices Rares and Katzmann.

Associate: Dated: 28 July 2011 IN THE FEDERAL COURT OF AUSTRALIA NSW DISTRICT REGISTRY GENERAL DIVISION NSD 543 of 2010

AND: DIRECTOR OF PROFESSIONAL SERVICES REVIEW AND OTHERS (ACCORDING TO THE SCHEDULE)

IN THE FEDERAL COURT OF AUSTRALIA NSW DISTRICT REGISTRY GENERAL DIVISION NSD 745 of 2010

AND: DR LEON SHAPERO and others (according to the schedule)

IN THE FEDERAL COURT OF AUSTRALIA NSW DISTRICT REGISTRY GENERAL DIVISION NSD 989 of 2010

AND: WAL GRIGOR AND OTHERS (ACCORDING TO THE SCHEDULE)

IN THE FEDERAL COURT OF AUSTRALIA NSW DISTRICT REGISTRY GENERAL DIVISION NSD 1112 of 2010

AND: bernard kelly and others (according to the schedule)

IN THE FEDERAL COURT OF AUSTRALIA QUEENSLAND DISTRICT REGISTRY GENERAL DIVISION QUD 297 of 2010

AND: DIRECTOR OF PROFESSIONAL SERVICES REVIEW AND OTHERS (ACCORDING TO THE SCHEDULE)

JUDGES: RARES, FLICK AND KATZMANN JJ DATE: 28 JULY 2011 PLACE: SYDNEY

FLICK J: 50 In 2010, a number of proceedings were commenced in this Court in which judicial review was sought of decisions made by a number of Professional Services Review Committees established under the Health Insurance Act 1973 (Cth) (the "Health Insurance Act"). 51 These proceedings were docketed to a number of Judges of this Court in the Brisbane, Sydney and Melbourne Registries. In December 2010, it became apparent that the manner in which the Committees had been established was open to question. Newspaper articles published in late November 2010 referred to "irregularities" in the appointment of Panel members thereby placing in jeopardy "millions of dollars in government savings". 52 These otherwise separate proceedings were thereafter subjected to common directions hearings before a single Judge at which all proceedings were sought to be co-ordinated with a view to determining whether a case could be stated for resolution by a Full Court. A number of the proceedings had reached a different procedural stage - in one case, the hearing had concluded and judgment had been reserved; in another case, judgment had been delivered and an appeal was pending; in yet another case, the hearing was yet to commence but the arguments had not been raised on the pleadings. 53 In very summary form, two of the common issues potentially presented for resolution (or sought to be raised for resolution) focussed upon the requirements imposed upon the Minister by ss 84(3) and 85(3) of the Health Insurance Act: to "consult the AMA"; and to "make an arrangement with the AMA." These provisions applied with respect to the appointment of medical practitioners to the position of "Panel member" from which a Professional Services Review Committee was established and with respect to the appointment of Panel members to the position of Deputy Director. It was sought to be contended in all proceedings that there had been no "consultation" and that there had been no "arrangement". 54 Between the time when the co-ordinated directions hearings were first held on 24 December 2010 and 8 April 2011, two of these proceedings were resolved. In one proceeding, a Full Court refused leave to raise these arguments which had not been relied upon at first instance: Reece v Webber [2011] FCAFC 33, 192 FCR 254. In the other proceeding in which the arguments were sought to be advanced, an extension of time in which to make an application for judicial review was refused: Lindsay v Director of Professional Services Review [2011] FCA 262. 55 On 8 April 2011, however, a series of questions were ultimately referred for resolution by a Full Court. The case as stated only referred to the Full Court questions arising by reason of an admitted failure to "consult". The consequences of any failure to make an "arrangement" were not the subject of any referral. 56 Even the confined questions referred for resolution, if answered in the negative, had the potential to bring a series of otherwise disparate proceedings to final resolution.

The Questions Posed for Resolution 57 The Questions as initially referred to the Full Court on 8 April 2011 were later amended on 12 May 2011. 58 As amended, the Questions as posed for resolution were as follows: 1. Given that, before the purported appointments of Bernard Kelly, Wallace Grigor, and Bruce Ingram as Deputy Directors of the Professional Services Review (PSR) Panel by instrument signed by the Minister and dated 24 January 2005, the Minister did not consult with the AMA as required by s. 85(3) of the Health Insurance Act 1973 (Cth) (the Act): a. were the purported appointments of the persons in question invalid and of no effect? b. were the PSR Committees to which one or more such persons was appointed invalidly constituted? c. were purported referrals by the Director of PSR to PSR Committees constituted by one or more such persons invalid and of no effect? d. were any of the purported draft and final reports of PSR Committees constituted by one or more such persons invalid and of no effect? e. were any of the purported draft and final determinations made by the Determining Authority invalid and of no effect? 2. Given that, before the purported appointments of Paul Hanson, Timothy Flanagan, Rodney McMahon, Brian Morton, Van Phuoc Vo and Elizabeth Magassy to the PSR Panel by instrument signed by the Minister and dated 23 November 2009, the Minister did not consult with the AMA as required by s. 84(3) of the Act: a. were the purported appointments of the persons in question invalid and of no effect? b. were the PSR Committees to which one or more such persons was appointed invalidly constituted? c. were purported referrals by the Director of PSR to PSR Committees constituted by one or more such persons invalid and of no effect? d. were any of the purported draft and final reports of PSR Committees constituted by one or more such persons invalid and of no effect? 3. Given that, before the purported appointments of Bruce Ingram, Leon Shapero and Bernard Kelly as Deputy Directors of PSR by instrument signed by the Minister and dated 23 November 2009, the Minister did not consult with the AMA as required by s. 85(3) of the Act: a. were the purported appointments of the persons in question invalid and of no effect? b. were the PSR Committees to which one or more such persons was appointed invalidly constituted? c. were purported referrals by the Director of PSR to PSR Committees constituted by one or more such persons invalid and of no effect? d. were any of the purported draft and final reports of PSR Committees constituted by one or more such persons invalid and of no effect? 4. Did the instrument dated 23 November 2009 purportedly appointing Bruce Ingram, Bernard Kelly and Leon Shapero as Deputy Directors of PSR (and which purportedly took effect on 25 January 2010) have the effect of appointing them as Panel members within the meaning of s. 84(1) and s. 85(1) of the Act? 5. If the question posed in paragraph 4 above (relating to purported appointments of Deputy Directors of PSR) is answered "No", do the facts agreed in paragraph 12 of the Statement of Agreed Facts (in the absence of any other pre-existing or subsisting appointment of the persons as Panel members) mean that: a. the purported appointments of the persons in question are invalid and of no effect? b. the PSR Committtees of which such a person was the Chairperson were invalidly constituted? c. the purported referrals by the Director of PSR to PSR Committees of which such a person was the Chairperson are invalid and of no effect? d. the purported draft and final reports of PSR Committees of which such a person was the Chairperson are invalid and of no effect? 6. If any question posed in sub-paragraphs 1(a)-(e), 2(a)-(d), 3(a)-(d) and 5(a)-(d) is answered 'Yes', does the de facto officer doctrine affect the claim of any applicant to relief in respect of any such invalidity and, if so: a. which applicant(s)? and b. how is such claim affected? 59 To provide a factual background against which these Questions were posed, the parties had substantially agreed upon a Statement of Agreed Facts. 60 In addition to the Statement of Agreed Facts, however, the Commonwealth belatedly also sought to tender a limited number of documents. These further documents were later tendered and admitted subject to their relevance being determined.

Sections 84 and 85 - The Requirements of Consultation 61 Sections 84 and 85 of the Health Insurance Act appear in Division 2 of Part VAA of that Act. 62 Part VAA contains those provisions dealing with the "Professional Services Review Scheme". That Part was inserted in 1994 by way of the Health Legislation (Professional Services Review) Amendment Act 1994 (Cth). Its provisions have been subsequently amended from time to time but the operation of the scheme previously in force has been reviewed in detail by Finn J in Pradhan v Holmes [2001] FCA 1560 at [5] to [61], 125 FCR 280 at 282 to 291. The scheme, it has been said, "is concerned to protect public revenues from abuse of the Medicare benefits system": Carrick v Health Insurance Commission [2007] FCA 984 at [8] per Branson J. An account of the considerable sums of Commonwealth monies expended on the provision of medical services, and the evolution of Part VAA, has been helpfully set forth in Bell, R. 'Protecting Medicare Services: Trials of a Peer Review Scheme' (2005) 13 Journal of Law and Medicine 29. 63 The provisions of the Act dealing with the review of services provided by medical practitioners has received, perhaps not surprisingly, repeated judicial attention: e.g., Daniel v Kelly [2003] FCA 772, 200 ALR 379; Kelly v Daniel [2004] FCAFC 14, 134 FCR 64; Mathews v Health Insurance Commission [2006] FCA 195, 90 ALD 49; Phan v Kelly [2007] FCA 269, 158 FCR 75. 64 For present purposes, it is sufficient to note that Part VAA addresses what is there described as "inappropriate practice". Section 82 relevantly defines that expression in respect to a general practitioner as follows: Definitions of inappropriate practice (1) A practitioner engages in inappropriate practice if the practitioner's conduct in connection with rendering or initiating services is such that a Committee could reasonably conclude that: (a) if the practitioner rendered or initiated the services as a general practitioner-the conduct would be unacceptable to the general body of general practitioners; or (b) …; or (c) ..; or (d) … (2) A person (including a practitioner) engages in inappropriate practice if the person: (a) knowingly, recklessly or negligently causes, or knowingly, recklessly or negligently permits, a practitioner employed by the person to engage in conduct that constitutes inappropriate practice by the practitioner within the meaning of subsection (1); or (b) is an officer of a body corporate and knowingly, recklessly or negligently causes, or knowingly, recklessly or negligently permits, a practitioner employed by the body corporate to engage in conduct that constitutes inappropriate practice by the practitioner within the meaning of subsection (1). (3) A Committee must, in determining whether a practitioner's conduct in connection with rendering or initiating services was inappropriate practice, have regard to (as well as to other relevant matters) whether or not the practitioner kept adequate and contemporaneous records of the rendering or initiation of the services. The concept of "inappropriate practice" replaces the previous reference to a practitioner rendering "excessive services". 65 The resolution of whether a practitioner has engaged in "inappropriate practice" is entrusted to a Professional Services Review Committee. A Committee which is "set up" under s 93 is constituted by a Chairperson who is a Deputy Director and two other Panel members: s 95(1). 66 Section 84(1) establishes the Professional Services Review Panel and the manner of appointment of practitioners to that Panel. Section 85 provides for the appointment of Panel members as Deputy Directors and the manner of those appointments. It is these two provisions which attract particular attention in the present proceeding. 67 Section 84 provides as follows: The Professional Services Review Panel (1) The Professional Services Review Panel is established. (2) It consists of practitioners appointed by the Minister. (3) Before appointing a medical practitioner to be a Panel member, the Minister must consult the AMA. The Minister must make an arrangement with the AMA under which the AMA consults other specified organisations and associations before advising the Minister on the appointment. (4) Before appointing a practitioner other than a medical practitioner to be a Panel member, the Minister must consult such organisations and associations, representing the interests of the profession to which the practitioner belongs, as the Minister thinks appropriate. Of most immediate relevance is s 84(3) and the requirement imposed upon the Minister "to consult the AMA". 68 Section 85 provides as follows: Deputy Directors of Professional Services Review (1) The Minister may appoint Panel members to be Deputy Directors of Professional Services Review. (3) Before appointing a medical practitioner to be a Deputy Director, the Minister must consult the AMA. The Minister must make an arrangement with the AMA under which the AMA consults other specified organisations and associations before advising the Minister on the appointment. (4) Before appointing a practitioner other than a medical practitioner to be a Deputy Director, the Minister must consult such organisations and associations, representing the interests of the profession to which the practitioner belongs, as the Minister thinks appropriate. Again, reference should be particularly made to the requirement imposed by s 85(3) to "consult the AMA…". 69 Although both of these provisions require consultation, it is readily apparent that the consultation required is directed to two different subject-matters; namely, consultation as to the appointment of "a medical practitioner to be a Panel member" (s 84(3)); and consultation as to the appointment of a "medical practitioner to be a Deputy Director" (s 85(3)). 70 In the absence of a statutorily imposed obligation to consult, there is most probably no general obligation to do so imposed by the common law upon those making administrative decisions. 71 But where there is an obligation to consult, "[c]onsultation is no empty term": TVW Enterprises Ltd v Duffy (No 2) (1985) 7 FCR 172 at 178. Toohey J there observed: Consultation is no empty term: "The requirement of consultation is never to be treated perfunctorily or as a mere formality" Port Louis Corporation v Attorney-General of Mauritius [1965] AC 1111 at 1124. That decision and others, for example, Rollo v Minister of Town and Country Planning [1948] 1 All ER 13 at 17 and Sinfield v London Transport Executive [1970] Ch 550 at 558 make it clear that a responsibility to consult carries a responsibility to give those consulted an opportunity to be heard and to express their views so that they may be taken into account. The Broadcasting and Television Act 1942 (Cth) there imposed a statutory obligation upon the Minister to consult in respect to planning "the development of broadcasting and television services in Australia". An appeal was dismissed: TVW Enterprises Ltd v Duffy (No 3) (1985) 8 FCR 93. On appeal, Sheppard J similarly observed: … What must be understood is that the consultation needs to be real; it must not be a merely formal or perfunctory exercise: [(1985) 8 FCR 93 at 101] It was concluded both by Toohey J and by the Full Court (Sweeney, Sheppard and Beaumont JJ) that there was no obligation imposed upon the Minister to consult prior to publishing a notice inviting applications for a new licence. See also: Leichardt Municipal Council v Minister for Planning (1992) 78 LGERA 306 at 336 per Sheller JA (Priestley and Meagher JJA agreeing). 72 The requirement to "consult", it has more recently been said, does not "admit … of difficulties of interpretation and understanding": Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v QR Ltd [2010] FCA 591 at [45], 268 ALR 514 at 527. Logan J there referred to the fact that a "search of current Commonwealth legislation discloses no less than 572 provisions imposing a requirement on a minister or other official or agency to 'consult'": at [42]. His Honour then referred to decisions as to such a requirement in industrial cases and continued: [44] … The apprehension in the industrial commission that these cases were of assistance was not, with respect, misplaced. They serve to confirm an impression as to the content of an obligation to "consult" evident from the dictionary meaning of the word. A key element of that content is that the party to be consulted be given notice of the subject upon which that party's views are being sought before any final decision is made or course of action embarked upon. Another is that while the word always carries with it a consequential requirement for the affording of a meaningful opportunity to that party to present those views. What will constitute such an opportunity will vary according [to] the nature and circumstances of the case. In other words, what will amount to "consultation" has about it an inherent flexibility. Finally, a right to be consulted, though a valuable right, is not a right of veto. [45] To elaborate further on the ordinary meaning and import of a requirement to "consult" may be to create an impression that it admits of difficulties of interpretation and understanding. It does not. Everything that it carries with it might be summed up in this way. There is a difference between saying to someone who may be affected by a proposed decision or course of action, even, perhaps, with detailed elaboration, "this is what is going to be done" and saying to that person "I'm thinking of doing this; what have you got to say about that?". Only in the latter case is there "consultation". His Honour was there construing the term "consult" as used in an industrial agreement. 73 In the present proceeding, it was admitted on behalf of the Commonwealth that no consultation had taken place as required by ss 84(3) and 85(3). Notwithstanding the failure to consult, the Commonwealth nevertheless contended that this non-compliance did not invalidate decisions taken by Committees comprised of Panel members or Deputy Directors in respect of whom there had been no consultation.

The Consequences of a Failure To Consult 74 Non-compliance with a statutory requirement - including a requirement expressed in terms requiring that certain action "must" be taken - does not necessarily result in subsequent invalidity: cf. Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28, 194 CLR 355. 75 Whether or not a prior failure to comply with a statutory requirement exposes subsequent decision-making to invalidity is ultimately a matter of statutory construction. In Project Blue Sky there had been non-compliance with s 160(d) of the Broadcasting Services Act 1992 (Cth) which required the Authority to perform its functions in a manner consistent with Australia's obligations under any agreement between Australia and a foreign country. As to the consequences of that non-compliance, McHugh, Gummow, Kirby and Hayne JJ concluded: Does the failure to comply with s 160 mean that cl 9 of the Australian Content Standard is invalid? [91] An act done in breach of a condition regulating the exercise of a statutory power is not necessarily invalid and of no effect. Whether it is depends upon whether there can be discerned a legislative purpose to invalidate any act that fails to comply with the condition. The existence of the purpose is ascertained by reference to the language of the statute, its subject matter and objects, and the consequences for the parties of holding void every act done in breach of the condition. Unfortunately, a finding of purpose or no purpose in this context often reflects a contestable judgment. The cases show various factors that have proved decisive in various contexts, but they do no more than provide guidance in analogous circumstances. There is no decisive rule that can be applied; there is not even a ranking of relevant factors or categories to give guidance on the issue. [92] Traditionally, the courts have distinguished between acts done in breach of an essential preliminary to the exercise of a statutory power or authority and acts done in breach of a procedural condition for the exercise of a statutory power or authority…. [93] In our opinion, the Court of Appeal of New South Wales was correct in Tasker v Fullwood [(1971) 1 NSWLR 20 at 23-24] in criticising the continued use of the "elusive distinction between directory and mandatory requirements" and the division of directory acts into those which have substantially complied with a statutory command and those which have not. They are classifications that have outlived their usefulness because they deflect attention from the real issue which is whether an act done in breach of the legislative provision is invalid. The classification of a statutory provision as mandatory or directory records a result which has been reached on other grounds. The classification is the end of the inquiry, not the beginning. That being so, a court, determining the validity of an act done in breach of a statutory provision, may easily focus on the wrong factors if it asks itself whether compliance with the provision is mandatory or directory and, if directory, whether there has been substantial compliance with the provision. A better test for determining the issue of validity is to ask whether it was a purpose of the legislation that an act done in breach of the provision should be invalid. This has been the preferred approach of courts in this country in recent years, particularly in New South Wales. In determining the question of purpose, regard must be had to "the language of the relevant provision and the scope and object of the whole statute". [Footnotes omitted.] After reviewing the terms of the Broadcasting Services Act, it was concluded at [99] that "… the best interpretation of s 160 is that, while it imposes a legal duty on the ABA, an act done in breach of its provisions is not invalid". 76 In the present statutory context of the Health Insurance Act, and in the context of Part VAA in particular, a number of factors peculiar to that context point to the fundamental importance of the consultation there referred to. These factors include the following. 77 First, any inquiry as to whether the consequence of non-compliance with a particular statutory requirement is invalidity must necessarily at least start with the statutory language which imposes the requirement that has not been met. And, in the present context, ss 84 and 85 repeatedly employ the term "must". Although it may readily now be accepted that the use of such a term (previously regarded as imposing a "mandatory" requirement) may be but the start of the inquiry and not the conclusion, the statutory language in fact employed remains a valuable guide to resolving the inquiry. It remains a fact that the use of the imperative term "shall" - as opposed to the facultative and permissive term "may" - has long been recognised as usually imposing a duty to comply with the requirement imposed: Ward v Williams (1955) 92 CLR 496 at 508; Scurr v Brisbane City Council (1973) 133 CLR 242 at 255 per Stephen J. Although by no means determinative, the use of the term "must" in ss 84 and 85 can similarly be contrasted with the language employed in s 90 where it is stated that "the Director may consult" (inter alia) a Panel member or "any consultant or learned professional body that the Director considers appropriate". Differences in statutory language expressed elsewhere in the Act, it is considered, provide no reason to do anything other than to construe ss 84 and 85 within the context of Part VAA. 78 The starting point for the inquiry to be undertaken may thus be accepted as a legislative intention to impose upon the Minister a series of duties to "consult" and that the duties imposed were not intended to be "empty term[s]". 79 Second, ss 84 and 85 occur within Part VAA of the Health Insurance Act. And within that Part it is only a Professional Services Review Committee that can make a determination as to whether a medical practitioner has engaged in "inappropriate practice". The Director may not make such a determination, his function being confined to that of a "screening role": Carrick at [12]. A determination that a practitioner has engaged in "inappropriate practice" is not only in itself a serious adverse finding; it is also an adverse finding having the additional imprimatur of a medical practitioner's own peers. It is a finding which prejudicially affects the reputation and standing of the medical practitioner concerned. As Casio exclaimed in Othello: Reputation, reputation, reputation! O, I have lost my reputation! I have lost the immortal part of myself, and what remains is bestial. My reputation, Iago, my reputation! Others, of course, may disagree. Iago's response was thus: As I am an honest man, I thought you had received some bodily wound; there is more sense in that than in reputation. Reputation is an idle and most false imposition: oft got without merit, and lost without deserving: you have lost no reputation at all unless you repute yourself such a loser. What, man! There are ways to recover the general again: you are but now cast in his mood, a punishment more in policy than in malice, even so as one would beat his offenceless dog to affright an imperious lion: sue to him again, and he's yours. A medical practitioner who has lawfully been found to have rendered what was previously termed "excessive services", and who may now have been found to have engaged in "inappropriate practice", may well be expected to endure the damage to their reputation that such a finding may attract. But all practitioners are entitled to have their conduct reviewed by a Committee appointed in accordance with law. 80 Part VAA, not unexpectedly, details the manner in which inquiries may be initiated and the manner in which they are to be resolved. One essential aspect of that Scheme is the establishment of the Professional Services Review Panel and the opportunity for a practitioner whose practice is under scrutiny to have his conduct reviewed by both other practitioners and practitioners who have been appointed after consultation by the Minister. 81 Third, any requirement to "consult" with the AMA as to the appointment of Panel members cannot be regarded as a mere technicality or mere formality having little significance. Nor can the reappointment of practitioners who have previously been the subject of consultation with the AMA be regarded as a mere formality. The role played by the AMA, and as endorsed in Part VAA, is pivotal to the operation of Part VAA. It may readily be accepted that the Minister may have little (if any) knowledge as to the identity or suitability for appointment of individual medical practitioners. Central to the manner of operation of Part VAA was not the implementation of a bureaucratic structure of Panel members who so happened to be medical practitioners who sought appointment. Those qualified for appointment were not, for example, persons solely having particular qualifications: e.g., Administrative Appeals Tribunal Act 1975 (Cth), s 7. The practitioners to be appointed were to be persons presumably regarded by the AMA as suitable for appointment - although mere endorsement by the AMA did not preclude the Minister making a contrary decision. And, a medical practitioner previously appointed, may have proved (for whatever reason) to be inappropriate for subsequent reappointment. Panel members were persons appointed for a term of years, not exceeding 5 years: s 106ZG. A medical practitioner previously appointed may, during the period of his appointment, have proved to be manifestly inappropriate for reappointment. Or a medical practitioner previously appointed may no longer wish to be reappointed. 82 Given both the importance ascribed by the Legislature to an assessment as to "inappropriate practice" being made by those persons who have requisite knowledge as to current medical practice and the importance ascribed by the Legislature to assessments being made by a medical practitioner's own peers, the need for Committees to be properly constituted is itself fundamental to the very administration of Part VAA. The central role played by a medical practitioner's own peers in an assessment as to whether he has rendered what were previously termed "excessive services" or engaged in what is now termed "inappropriate practice" has long been recognised. Thus, in Minister for Health v Thomson (1985) 8 FCR 213 at 217, Fox J there said of the then Medical Services Committee of Inquiry: It is not disputed that the Committee is one of experts. The Act requires that it comprise five medical practitioners. It seems reasonably clear that the intention of the Act is that the Committee sit as a Committee of the peers of the medical practitioner whose conduct is in question and exercise its own judgment in relation to the evidence before it, using its own collective knowledge in its evaluation. Subsequently, in Tisdall v Health Insurance Commission [2002] FCA 97 Tamberlin J observed in respect to the Professional Services Review Committee: [10] The Director must set up a Committee to consider whether a person under review has engaged in inappropriate practice unless satisfied that there are insufficient grounds on which a Committee could reasonably find that the person has engaged in inappropriate practice in connection with the referred service or that the Director has disqualified the person under review (s 93). Neither of those circumstances apply in the present case. The Committee set up under s 93 is to be composed of a Chairperson who is a Deputy Director and two other Panel members. Under s 95(2) the Chairperson and the other Panel members must be, (i) practitioners, (ii) who belong to the profession in which the practitioner was practising, (iii) when he or she rendered or initiated the referred services. The constitution of the Committee can therefore be seen as one of peer experts in general practice, who were engaged in practice at the time the services were rendered. In the present case the Committee consisted of three experienced general practitioners. Two members had general practices in country areas and one member conducted a general practice in an outer suburban area. And Committee members are "entitled to consider and undertake their adjudicative function concerning the statutory factors against the background of their own professional experience as general practitioners especially having regard to s 95 of the Act which requires the Committee to be comprised of general practitioners in a case where a general practitioner is the person under review …": Tisdall v Webber [2011] FCAFC 76 at [86] per Greenwood J (Tracey J agreeing). 83 In the present context, it is concluded that a medical practitioner - and the general public - is entitled to assume that the consultation required by ss 84(3) and 85(3) has been undertaken. Whether or not there has been consultation is a matter very much within the knowledge and control of the Minister and the AMA - but not the medical practitioner appearing before a Committee (or the general public). Although it would be open to a medical practitioner appearing before a Committee to make inquiries as to the circumstances relevant to the appointment of each Committee member, it is concluded that a practitioner would generally be entitled to assume that the Minister has complied with the law. Facts peculiar to a particular case may put a medical practitioner on inquiry. In some circumstances a legislative intention may be discerned that a person who has secured a favourable administrative decision should not be denied the benefit of that decision unless he has undertaken his own "independent investigation" as to whether there has or has not been prior consultation: cf. Attorney-General v J N Perry Constructions Pty Ltd (1961) 79 WN (NSW) 235. But such is not the present case. 84 The importance ascribed by the Legislature to such matters is not only apparent from the terms of the legislation itself; it is an importance expressly referred to during the course of debate in the House of Representatives. Thus, during the course of the Second Reading Speech on 30 September 1993, the Parliamentary Secretary to the Minister for Health said when these provisions were introduced by way of the Health Legislation (Professional Services Review) Amendment Bill (Australia, House of Representatives, Debates (1993), p 1551): The amendments to the Health Insurance Act outlined in this bill reflect the outcome of a close consultative process with the Australian Medical Association. The AMA has played a key role in the development of the new measures and, in so doing, has demonstrated that it takes seriously its expressed belief that it has a duty to cooperate in ensuring that the public resources earmarked for health care are appropriately utilised. A little later it was also said: The bill provides for the replacement of medical services committees of inquiry by professional services review committees. Whereas the basic composition of committees of inquiry remains constant regardless of the nature of the services that are subject to examination, the composition of the professional services review committees will vary according to types of services that are subject to review. For example, the empanelling of a committee to review the rendering or initiation of services by a specialist in a particular speciality would be on the basis that the majority of the committee would be specialists in the same speciality. This means that there should be little cause for a practitioner to question the committee's competence to deal with the matters referred to it. A significant change in the bill is the replacement of the concept of excessive servicing with one of inappropriate practice. Whereas excessive servicing is currently defined as the rendering or initiation of services not reasonably necessary for the adequate care of the patient, the concept of inappropriate practice goes further. It covers a practitioner engaging in conduct in connection with the rendering or initiating of services that is unacceptable to his or her professional colleagues generally. 85 A fourth and further factor not to be ignored when considering the consequences that may follow where there has been a failure to consult as required by ss 84(3) and 85(3) is the fact that the administrative proceeding to be conducted has some of the characteristics of a disciplinary hearing, albeit an administrative process also directed to "protecting patients and the Commonwealth". Thus, in Pradhan v Holmes [2001] FCA 1560, 125 FCR 280 the question to be resolved concerned the consequences that followed from a failure to refer specified conduct to a Committee for investigation. Section 86(1) of the Health Insurance Act required the Commission to refer to the Director "the conduct" of the medical practitioner; s 93(6) referred to the writing of a report by the Director to the Committee "in respect of the services to which the referral relates"; s 93(7) referred to "services that may be specified in the … referral"; and s 93(1) required the Director to make a referral to a Committee "to consider whether conduct by the person under review … constituted engaging in inappropriate practice". In that context, Finn J observed: [121] Again, in my view, the section ought be interpreted as requiring that the referral be of specified conduct - a conclusion reinforced by the s 93(6) procedural fairness requirement that the Director prepare a written report giving reasons why the Director considers that "conduct by the person under review ... may have constituted engaging in inappropriate practice". Significantly the emphasis upon the requirement of specification at the level of an adjudicative referral is emphasised in the need to identify the particular services that are referred: s 93(1) and s 93(7); and it is only in respect of these services that the Committee can make findings: s 106H(1). This is unsurprising. One is after all at the point in the disciplinary process where the boundaries of the case to be met by the person under review should be settled and fairly particularised: see Forbes, above, Ch 10. In saying this I do not overlook the powers of the Committee further to narrow the case to be met: see s 101(2) together with s 102(1) and s 102(3); s 106J. The reference to Forbes was a reference to Forbes, JRS Disciplinary Tribunals (2nd ed., Federation Press, 1996). The conclusion of his Honour as to invalidity, it should be noted, was subsequently rejected by the Full Court in Health Insurance Commission v Grey [2002] FCAFC 130 at [179], 120 FCR 470 at 505. 86 The "disciplinary" aspect of an investigation conducted by a Committee, however, has been repeatedly referred to by other Judges of this Court. Albeit addressing the administrative scheme as then in place, in Yung v Adams (1997) 80 FCR 453 at 460, Davies J observed that "the proceedings are disciplinary in nature". His Honour went on to further observe, however, that the sanctions which may be imposed were not punitive in nature. The decision, according to his Honour: "… with respect to a reprimand, counselling, the repayment of benefits and disqualification are not imposed as a punishment. They are imposed with a view to protecting patients and the Commonwealth against abuse of the system …"[(1997) 80 FCR 453 at 472] On appeal, Burchett and Hill JJ stated that Davies J had "not inappropriately" referred to the proceedings as "disciplinary proceedings": Adams v Yung (1998) 83 FCR 248 at 294. Similarly in Health Insurance Commission v Grey [2002] FCAFC 130 at [173], 120 FCR 470 at 504, Beaumont, Sundberg and Allsop JJ stated both the disciplinary aspect of proceedings and the public purpose to be served as follows: [173] … Although disciplinary powers are conferred under the legislative scheme, the purpose or object of the statute is to protect both patients and the Commonwealth against abuse of the system. That is to say, as "public protective" legislation, Pts VAA and VA should not be narrowly interpreted … Neither aspect of the legislation can be questioned, including the consequences to a medical practitioner of an adverse finding. 87 Common to the consultation required by both ss 84 and 85 is the appropriateness of the medical practitioners to discharge the functions entrusted to Professional Services Review Committees. The further requirement that there be separate consultation as to the appointment of a medical practitioner to be a Deputy Director is a recognition of the additional responsibilities entrusted to a Deputy Director as a member of a Committee. These additional responsibilities include: being the Chairperson of a Committee (s 95(1)(a)) and presiding "at all meetings at which he or she is present" (s 99(1)); and engaging consultants on behalf of the Commonwealth (s 106ZP(1)). 88 The particular statutory context of Part VAA, it is concluded, imposes upon the Minister a mandatory obligation - or "duty" - to consult with the AMA and the further conclusion that the failure on the part of the Minister to do so vitiates any purported decision that may have been made by a Committee constituted by any member who has not been appointed after the process of consultation required by the Health Insurance Act. It is also concluded that it is only a Panel member who has been appointed in accordance with law who may be appointed a Deputy Director. The failure to properly appoint the Panel members necessarily has the consequence that those Deputy Directors have also not been appointed in accordance with law and a further reason to vitiate any purported decision of a Committee over which such a Deputy Director has presided. 89 To resist these conclusions the Commonwealth sought to advance a number of discrete propositions.

The Case for the Commonwealth 90 In addition to putting in issue the above conclusions, the Commonwealth independently also advanced a number of further discrete arguments. 91 First, the Commonwealth contended that where the Legislature intended consultation to be an "essential precondition to appointment" it made its intention clear - as it did in s 83(2). That section provides as follows: The Director of Professional Services Review (1) The Minister may appoint a medical practitioner to be the Director of Professional Services Review. (2) The Minister must not appoint a person unless the AMA has agreed to the appointment. (3) The Director has such functions, duties and powers as are conferred on him or her by this Part or the regulations. Some support for the Commonwealth's argument is unquestionably gained from the terms of s 83(2). But the terms of that provision do not lead to any different conclusion in respect to s 84(3) and s 85(3). An appointment to the position of Director, and the central role played by the Director in the administration of Part VAA, may well have been the reason why appointment to that position attracted the specific attention of the Legislature and a requirement that the AMA agree to the appointment. But the agreement of the AMA to an appointment to the position of Director, it is respectfully considered, does not diminish the importance of the role played by the AMA in the appointment of Panel members. Panel members may be appointed by the Minister even contrary to any submissions or comments made by the AMA during the course of s 84(3) and s 85(3) consultation. The AMA pursuant to s 84(3) and s 85(3) has no "veto power", as it does in s 83(2). But the importance of consultation nevertheless remains. Although there may be no "veto power" conferred by s 84(3) and s 85(3), the central importance of the role played by Panel members appointed to Committees nevertheless remains. The existence of a "veto power" in respect to the appointment of a single individual, it is considered, ultimately says little as to the legislative intention otherwise apparent in the terms employed in s 84(3) and s 85(3). 92 Second, a conclusion as to invalidity, it was contended by the Commonwealth, was not supported by and would not promote the object and purpose of Part VAA. The object of Part VAA was that set forth as follows in s 79A: Object of this Part The object of this Part is to protect the integrity of the Commonwealth medicare benefits and pharmaceutical benefits programs and, in doing so: (a) protect patients and the community in general from the risks associated with inappropriate practice; and (b) protect the Commonwealth from having to meet the cost of services provided as a result of inappropriate practice. The concern of the Commonwealth Legislature in protecting public revenue as stated in s 79A(b) makes express a legitimate concern. But that is but a part of the more generally expressed object of Part VAA - namely, the protection of "the integrity of the Commonwealth medicare benefits and pharmaceuticals benefits programs". Indeed, the entire structure of Part VAA is to put in place the means whereby "inappropriate practice" may be inquired into and resolved. Part of that scheme as implemented is the role played by the Professional Services Review Committees and the role of the AMA. Focus was legitimately and properly placed by the Commonwealth in its written submissions upon a central object of Part VAA being the protection of the Commonwealth "from having to meet the cost of services provided as a result of inappropriate practice" and the protection of what were termed "public interests". That focus unquestionably supports the construction urged by the Commonwealth. But that focus is only part of a more broadly expressed legislative objective. 93 The objects of Part VAA of the Act, as expressed in s 79A, and s 79A(b) in particular, do not dictate any particular conclusion and are at best equivocal. A legitimate concern in protecting public revenue and the integrity of services offered to patients is but one part of Part VAA; another part is the confidence that may be placed, by both the public and medical practitioners the subject of inquiry, in a process of assessment by those persons who are perceived as having requisite knowledge and who have been selected after consultation with the AMA. 94 Third, the Commonwealth also placed reliance upon the "public inconvenience" that would follow from a rejection of their construction of ss 84(3) and 85(3). To some extent this present argument inter-relates with the Commonwealth's reliance upon the de facto officers doctrine. And, to some extent the argument also has the potential to be self-justifying and circular. The moment, for example, a conclusion is reached that the legislative intention is that invalidity is the consequence of non-compliance with a statutory provision, the fact that that may result in "public inconvenience" is beside the point. But where there may be uncertainty as to the presumed legislative intention in those circumstances where there has been non-compliance with a statutory provision, the consequences of one conclusion as opposed to another - including a consequence of "public inconvenience" - may be taken into account. Thus, in Project Blue Sky McHugh, Gummow, Kirby and Hayne JJ observed: [97] Courts have always accepted that it is unlikely that it was a purpose of the legislation that an act done in breach of a statutory provision should be invalid if public inconvenience would be a result of the invalidity of the act. Having regard to the obligations imposed on the ABA by s 160, the likelihood of that body breaching its obligations under s 160 is far from fanciful, and, if acts done in breach of s 160 are invalid, it is likely to result in much inconvenience to those members of the public who have acted in reliance on the conduct of the ABA. [Footnotes omitted] Reliance is also placed by the Commonwealth upon the very fact that "public inconvenience" dictated the conclusion in fact reached by the High Court in Project Blue Sky. Reliance is thus placed by the Commonwealth upon the following further observations and conclusions of their Honours: [98] Among the functions of the ABA, for example, are the allocation and renewal of licences and the design and administration of price-based systems for the allocation of commercial television and radio broadcasting licences. It is hardly to be supposed that it was a purpose of the legislature that the validity of a licence allocated by the ABA should depend on whether or not a court ultimately ruled that the allocation of the licence was consistent with a general direction, policy or treaty obligation falling within the terms of s 160. This is particularly so, given that the "general policies of the Government notified by the Minister under s 161" unlike the "directions given by the Minister in accordance with this Act" are not required to be publicly recorded and that even those with experience in public international law sometimes find it difficult to ascertain the extent of Australia's obligations under agreements with other countries. In many cases, licensees would have great difficulty in ascertaining whether the ABA was acting consistently with the obligations imposed by s 160. Expense, inconvenience and loss of investor confidence must be regarded as real possibilities if acts done in breach of s 160 are invalid. [99] Because that is so, the best interpretation of s 160 is that, while it imposes a legal duty on the ABA, an act done in breach of its provisions is not invalid. [References omitted] Reference may also be made to the reliance upon "public inconvenience" in the conclusions reached by Sheppard J in TVW Enterprises v Duffy (No 3) at 105. 95 The manner in which "public inconvenience" may be relied upon to resolve an uncertain legislative intention may thus be accepted. It is a consideration which has been taken into account in a forerunner to the present legislative context as an aid to concluding that a deficiency in the identification of the "conduct" referred for inquiry does result in subsequent invalidity: Health Insurance Commission v Grey [2002] FCAFC 130, 120 FCR 470. After reviewing earlier decisions, Beaumont, Sundberg and Allsop JJ there concluded: [179] … Although Finn J in Pradhan interpreted Adams v Yung to stand for a wider proposition, namely invalidity, we cannot, with respect, agree. When all the judgments in Yung are considered, it appears that the only relevant ground relied on for judicial review was a denial of natural justice ... As was explained in Blue Sky … a breach of a statutory requirement may be unlawful and may be liable to be enjoined, if appropriate so to order, in the Court's discretion. But this is not to say that a referral was invalid or illusory or void, or a nullity, a very different thing. When, as here, the Court is considering the effect of legislative provisions, having as its object the protection of the public, a holding of nullification of the whole process from its beginning for purely formal reasons would occasion public inconvenience, a consequence which the Parliament would be unlikely to intend. To this extent, we cannot, with respect, accept the general approach taken by Finn J in Pradhan. 96 Whether an assessment of "public inconvenience" may inquire into areas of potentially disputed facts as opposed to an inquiry into the legal consequences that inevitably follow from a particular construction of legislative provisions may be left to one side. Also left to one side is thus any inquiry as to the quantum of any Commonwealth funds that may be placed in jeopardy by a conclusion as to invalidity, or any inquiry into the number of other medical practitioners who have been the subject of inquiry by other Committees having Panel members invalidly appointed to their membership. For present purposes, it is accepted that a conclusion as to invalidity not only affects the medical practitioners the subject of the present proceedings but also has the potential to affect the validity of determinations made by Committees similarly affected in the past. And, presumably, the sums of monies that may have been paid to medical practitioners who may have engaged in "inappropriate practice" may not be insignificant. "Public inconvenience", it is further concluded, also follows from the very real prospect that those medical practitioners the subject of the present proceeding have all been found to have engaged in "inappropriate practice" and yet may avoid any sanction by reason of what some may perceive to be a fortuitist, procedural and formal technicality. 97 But the arguments of the Commonwealth founded upon "public inconvenience" are rejected. The terms of s 84(3) and s 85(3), and the statutory context in which those provisions appear, do not permit of ambiguity (or any substantial ambiguity) so as to permit recourse to "public inconvenience" as an aid to statutory construction. And, in any event, any such "inconvenience" as may or will be occasioned necessarily has to be balanced together with the interests of the individual practitioners and the more generally expressed public interest in ensuring that the conduct of medical practitioners is judged by the medical peers of those whose conduct is subject to scrutiny. 98 Any "public inconvenience" is an "inconvenience" for which the Minister alone must remain accountable. It is, after all, the Minister who failed to comply with an important statutory requirement considered appropriate and necessary by the Parliament. It is to the Parliament that the Minister must account. The importance of recognising the role played by Ministers and the manner in which they remain accountable was adverted to by Gleeson CJ and Gummow J in Minister for Immigration and Multicultural Affairs v Jia Legeng [2001] HCA 17, 205 CLR 507 at 528 where they observed in the context of decisions taken under the Migration Act 1958 (Cth): [61] As the facts of the present cases show, the powers conferred upon the Minister by ss 501 and 502 form part of a statutory scheme which involves a complex pattern of administrative and judicial power, and differing forms of accountability. The Minister is a Member of Parliament, with political accountability to the electorate, and a member of the Executive Government, with responsibility to Parliament. As French J recognised in his decision at first instance in the case of Mr Jia, the Minister functions in the arena of public debate, political controversy, and democratic accountability. At the same time, the Minister's exercise of statutory powers is subject to the rule of law, and the form of accountability which that entails. … 99 No explanation was forthcoming as to why there had been non-compliance. 100 To employ the language of Project Blue Sky (at [99]), ss 84(3) and 85(3) not only impose a "legal duty" upon the Minister, but the consequence of non-compliance is "invalid[ity]". 101 A further argument advanced on behalf of the Commonwealth centred upon the further material that was sought to be tendered and material that was not previously incorporated within the Statement of Agreed Facts. This further material comprised a number of Ministerial Minutes which had been signed by the then Minister. Each of the Minutes was accompanied by a series of attachments. 102 A Minute signed by the Minister on 25 November 2009 recommended "the reappointment of 46 current members of the panel". That Minute stated in part: CONSULTATIONS: 27. The AMA and relevant bodies were consulted when these members were originally appointed to the PSR panel and no objections were raised. An earlier Minute dated 23 November 2009 recommended "the appointment of 23 new members of the panel". That recommendation also stated in part: CONSULTATIONS: 28. The AMA and relevant bodies were consulted and no objections were raised. A further Minute dated 23 November 2009 recommended "the appointment of five new Deputy Directors". That Minute also stated in part: CONSULTATIONS: 27. The AMA and relevant bodies were consulted when these members were originally appointed to the PSR panel and no objections were raised. The statements made in those Minutes as to consultation may presently be left to one side as the absence of any relevant consultation was a fact agreed between the parties. 103 Of central relevance to the Commonwealth's current submission is that there was included within the materials tendered documents dated 23 November 2009. Those documents purported to appoint named medical practitioners as Deputy Directors, including the Deputy Directors who chaired one or other of the Committees whose decisions are now under challenge. The Commonwealth directed attention to Question 4 of the questions referred to the Full Court. It contended that these documents had the effect of appointing the named medical practitioners as Panel members with the meaning of ss 84 and 85 of the Act. 104 Reliance was placed in part by the Commonwealth upon s 46 of the Acts Interpretation Act 1901 (Cth) and a contention that the documents signed by the Minister were "instruments" for the purposes of that section. Section 46 provides in part as follows: Construction of instruments (1) If a provision confers on an authority the power to make an instrument that is neither a legislative instrument for the purposes of the Legislative Instruments Act 2003 nor a rule of court, then, unless the contrary intention appears: (a) this Act applies to any instrument so made as if it were an Act and as if each provision of the instrument were a section of an Act; and (b) expressions used in any instrument so made have the same meaning as in the enabling legislation; and (c) any instrument so made is to be read and construed subject to the enabling legislation, and so as not to exceed the power of the authority. (2) If any instrument so made would, but for subsection (1), be construed as being in excess of the authority's power, it is to be taken to be a valid instrument to the extent to which it is not in excess of that power. An instance of the operation of s 46 was provided in Barton v Croner Trading Pty Ltd (1984) 3 FCR 95 where an authorisation given to the Minister of State for Home Affairs and Environment to institute proceedings by the Attorney-General was challenged. It was argued that the authorisation "[o]n its proper construction … was an authorisation in favour of any person who may, from time to time, hold the office of Minister of State for Home Affairs and Environment; and if it were intended to confer the authority only upon the incumbent Minister, Mr Cohen, he would have been named": (1984) 3 FCR 95 at 109. The argument was rejected. Bowen CJ, Beaumont and Wilcox JJ relevantly referred to s 46(b) and continued: The word "instrument" is of wide import … In the Acts Interpretation Act the word is used to include, at least, any writing designed to carry into effect a statute … The authorization of the Attorney-General is, therefore, an instrument to which s 46(b) applies. If it were otherwise beyond power, because ambulatory in operation, s 46(b) would require it to be read down so as to be a valid authorization of the Minister holding the specified office at the date thereof. This can be done without distortion of the legal operation or effect of the document … [(1984) 3 FCR at 110]. In seeking to invoke s 46 the Commonwealth quite properly pointed out that only Panel members need be appointed in writing (s 106ZG); there was no equivalent requirement in respect to Deputy Directors (s 106ZH). 105 There can be no doubt that the Minister when executing the documents had the understanding that the persons named to the positions referred to in those instruments were being validly appointed. It may further be accepted that the Minister, when appointing persons to the position of Deputy Directors, was of the understanding that there was no legal impediment to those appointments taking effect. 106 But the simple fact is that a person could not be appointed as a Deputy Director unless he was a Panel member - and that required Panel members to be appointed in accordance with law. The consequences of a prior failure to comply with statutory provisions imposed by the Legislature cannot be side-stepped by a subsequent misunderstanding by the Minister. It matters not, it is respectfully concluded, whether the instruments of appointment were "instruments" which attracted s 46 of the Acts Interpretation Act. It was difficult to see how any reading of the documents appointing the Panel members or the Deputy Directors could fill the void of non-consultation. The intention or objective sought to be achieved by the Minister cannot override the legal significance of non-compliance with ss 84(3) and 85(3). 107 Contrary to the submissions of the Commonwealth, the fourth question referred to the Full Court cannot be answered in the affirmative.

De Facto Officers 108 As a "fall-back" position, the Commonwealth sought to place reliance upon what has sometimes been referred to as the doctrine of "de facto officers". 109 The origins of this doctrine are indeed ancient. On one account it has been traced back to 1431: G J Coles & Co Ltd v Retail Trade Industrial Tribunal (1986) 7 NSWLR 503 at 526. It is said to have had its origins in the Wars of the Roses, when it was held that the judicial acts of a usurping king whose authority de facto was recognised during the usurpation were good and in some cases good even against the king de jure on his return to power: R v Cawthorne (1977) 17 SASR 321 at 330 per Bray CJ. 110 Whatever its precise origins, the chains of this ancient ghost continue to be jangled whenever it seems convenient to do so. 111 In her article 'De Facto Officers' (1994) 2 Australian Journal of Administrative Law 5, Professor Enid Campbell identified as follows the three conditions to be satisfied if reliance is to be placed upon the de facto officers doctrine: The following conditions are essential for the operation of the doctrine. The office occupied and exercised must be an office de jure (that is, one which exists in law) and the acts of the de facto officer must have been within the scope of the authority of an officer de jure. … And, all importantly, the person claimed to be a de facto officer must have the reputation of being an officer de jure or the defect in her or his title must be unknown to members of the public. Dr Clifford Pannam has concluded that the "only condition that seems to be necessary for the doctrine to operate is that a person should have 'the reputation of being the officer he assumes to be'": 'Unconstitutional Statutes and De Facto Officers' (1966) 2 Federal Law Review 37 at 45. 112 For the circumstances of the present proceeding, and accepting the approach of Professor Campbell, it may be accepted that the positions of Panel members and Deputy Directors were "officers de jure", that the acts performed by each of the Committee members were acts done "within the scope of the authority of an officer de jure" and that the irregularities involved in their appointment were "unknown" at the time when each practitioner appeared before each Committee. But the satisfaction of each of these three requirements, it is concluded, does not clothe with validity the decisions of each of the Committees in the present proceeding. 113 The rationale for the doctrine is said to be founded in the public interest in protecting the public and the individual whose interests are affected by the conduct of those purportedly exercising public power: State v Carroll (1871) 9 American Reports 409 at 423. Butler CJ there reviewed both English and American authorities and relevantly concluded: The de facto doctrine was introduced into the law as a matter of policy and necessity, to protect the interests of the public and individuals, where those interests were involved in the official acts of persons exercising the duties of an office, without being lawful officers. It was seen, as was said in Knowles v. Luce, that the public could not reasonably be compelled to inquire into the title of an officer, nor he [sic] compelled to show a title, and these became settled principles in the law. But to protect those who dealt with such officers when apparent incumbents of offices under such apparent circumstances of reputation or color as would lead men to suppose they were legal officers, the law validated their acts as to the public and third persons, on the ground that, as to them, although not officers de jure, they were officers in fact, whose acts public policy required should be considered valid. It was not because of any quality or character conferred upon the officer, or attached to him by reason of any defective election or appointment, but a name or character given to his acts by the law for the purpose of validating them. When, therefore, in civil cases, the public or third persons had knowledge that the officer was not an officer de jure, the reason for validating the acts to which they submitted, or which they invoked, failed, and the law no longer protected them. That principle was recognized and applied even in Rex v. Lisle, and particularly in Rex v. Bedford Level. This exposition of the law has since been approved by the United States Supreme Court (Norton v Shelby County (1886) 118 US 425 at 445 to 448) and by a number of Courts in Australia: e.g., GJ Coles at 526 to 527 per McHugh JA; Cawthorne at 332 per Bray CJ. 114 Ellis v Bourke (1889) 15 VLR 163 is an early instance where the doctrine was successfully invoked in Australia. Mr Bourke had been convicted of selling liquor on a Sunday by a Licensing Court. One of the arguments unsuccessfully advanced on his behalf was that the Licensing Court had not been properly constituted. In rejecting the argument, Higinbotham CJ concluded at 169: The first objection was that the Licensing Court as constituted at the hearing of this information was not a Licensing Court for the metropolitan licensing district. The constituent members of the Court for the metropolitan district are to be a County Court judge and two police magistrates. The defendant proposed to call evidence for the purpose of proving that two members of the Court who were admitted to have been police magistrates at a former time had not been re-appointed police magistrates, and were therefore not qualified to act as members of the Licensing Court. The Licensing Court rejected that evidence, and we think that they properly rejected it. The argument which has been presented to us on this point is one for which no precedent has been cited, and for which I think it would be very difficult to find a precedent. It has been contended that an application may be made to the Court which the Court is bound to entertain for the purpose of hearing evidence to enable that Court to determine that it is not a Court at all. The very objection assumes the existence of the Court, and yet it is proposed to that Court that it should determine that it is not a Court. The instances which have been referred to appear to be wholly inapplicable. It is undoubtedly open to litigants to object to the jurisdiction of the Court before which they may be brought. In the civil jurisdiction of the superior courts that objection must be taken by plea; but it is an objection which can be taken because it is one which assumes the proper constitution of the Court itself. The objection is founded in such a case upon this ground, that although the Court is a properly constituted Court it has no jurisdiction to try the particular question which has been brought under its notice. That question is one which it is proper and necessary for the Court to determine. Clearly inapplicable it seems to me is the instance which has been referred to of objections taken to the component parts of the Court. Objection is frequently taken, and most properly taken, when there is ground for it, to one or more or to all members who constitute the Court, sitting and acting, on the ground of interest or bias. It is not only proper, but it is necessary for litigants or parties who are aware of the existence of that particular ground of objection to take that objection at the outset of the proceedings; and if they do not take it, having cognisance of its existence, then their failure to take it will be an answer to any subsequent proceedings they may seek to found upon that objection. But that is a notice or intimation properly given to members of the Court of something of which the members themselves may be ignorant. It is not an application to the Court to hear and try the objection. In any case cited, or which could be cited, has a magistrate ever been asked to sit as a member of the Court to determine whether he is interested or not? If the notice is drawn to the fact of his interest and he disregard the fact, other and further proceedings may be taken. This is the first time it has ever been contended that a Court of Justice may be asked to hear evidence and to determine that it is not a Court. 115 Another early instance of the doctrine being successfully invoked is provided by In Re Aldridge (1893) 15 NZLR 361. Mr Aldridge there sought habeas corpus directed to the Gaoler of Her Majesty's prison at Wellington. Mr Aldridge had been convicted and sentenced. He relied upon the fact that the barrister who tried and sentenced him three years previously was not and had never been a Judge of the Supreme Court of New Zealand, although he had de facto occupied that position. The application for habeas corpus was refused. All of the judges who heard the application relied upon the de facto officers doctrine. Richmond J, for example, during the course of his review of the authorities observed: … The strong reasons of public convenience which have compelled the recognition of the validity of the judicial acts of kings de facto extend to the acts of Judges appointed by them, who, equally with the usurping king himself, are Judges de facto only: [(1893) 15 NZLR 361 at 370] A further instance where the doctrine was invoked is provided by Luff v Oakley (1986) 82 FLR 91. The doctrine was there invoked to clothe a person with authority to issue a permit to Mr Oakley with the consequence that Mr Oakley could thereafter be convicted of being a permit holder who had sold liquor to a person under the age of 18 contrary to s 80(1) of the Liquor Ordinance 1975 (ACT). The permit had been purportedly issued by a person who described himself as Acting Registrar. But the Ordinance did not provide for any such office. Rejected was a submission that Mr Oakley could not have been the holder of a permit because rights and liabilities in respect of the alleged permit were to be ascertained upon the same footing as if it had not been issued. 116 But it is not a doctrine without limitation: G J Coles & Co Ltd v Retail Trade Industrial Tribunal (1987) 7 NSWLR 503. There in issue was the validity of an industrial award purportedly made by the Retail Trade Industrial Tribunal. Section 38O(2) of the Industrial Arbitration Act 1940 (NSW) provided that the Tribunal "shall consist of the chairman and 2 assessors". The award had been made by the Chairman (Macken J) alone. No reliance had been placed upon the de facto officers doctrine at first instance. McHugh JA was inclined to the conclusion that the doctrine would have supported the validity of the award. His Honour expressed his views as follows: Whatever is the true account of the origin of the de facto officer rule, its rationale in modern times is the protection which it affords the public. If an award of an industrial tribunal is held void, great inconvenience will usually be occasioned to a section of the public. To hold that the award is void simply because of a defect in the composition of the tribunal is a course to be avoided if it is possible to do so. Such a case seems to call, in the public interest, for the application of the de facto officer rule. Unfortunately, although the making of the award of the Tribunal in the present case was defended on a number of grounds, no attempt was made to invoke the de facto officer rule. No doubt this was the result of the urgency concerning the matter which caused the case to be brought on at short notice. Since the Court has not heard counsel for the parties on the matter, I cannot come to any conclusion on the point. But it does appear prima facie at all events that the de facto officer rule would prevent the invalidation of the award even though the Tribunal was improperly constituted. The Tribunal is created and constituted by s 38O(1) of the Act. It exists as a legal entity: cf St Leonards Municipality v Williams [1966] Tas SR 166 at 169-171; 15 LGRA 62 at 65-66. The award was the act of the Tribunal even though made irregularly and in substantial breach of the Industrial Arbitration Act 1940. The Act entitles the Tribunal to be constituted by the chairman sitting alone. Whether or not he was entitled to do so depends upon matters internal to the Tribunal. To all outward appearances the composition of the Tribunal was consistent with the terms of the Act. The composition of the Tribunal was unlawful; but in fact Macken J was purporting to sit as the Tribunal. Both the claimants and the second and third opponents acted on the basis that the Tribunal was properly constituted. No doubt so did relevant members of the public. The award purported to be the award of the Tribunal. It is not the Act which declares the award invalid but the common law doctrine that an act dependent on a mandatory condition is void if the condition is not fulfilled. However, the de facto officer doctrine, when applicable, prevents the nullification of such an act. But Kirby and Hope JA were inclined to the contrary conclusion. Their Honours thus said: … we are in any case by no means convinced that the "doctrine" of de facto officers applies to these proceedings. The award here is a creature of statute. The ultimate obligation of the Court is to determine the meaning of legislation and to ensure that the legislative purpose is fulfilled. No common law doctrine can avail the parties if it flies in the face of the particular legislation under review. That is the case here. The legislature made it abundantly plain that assessors should participate in meetings of the Tribunal. Their participation was intended to affect the decisions of the Tribunal and awards made by it. The "doctrine" of de facto officers cannot operate to protect an award, made otherwise than in accordance with the legislation, if, in doing so, it negatives clear legislative provisions. What was involved here was not merely a suggested irregularity in the appointment of particular members of a Tribunal as in Ellis v Bourke (1889) 15 VLR 163. Nor is it a case such as Margate Pier Co v Hannam (1819) 3 B & Ald 266; 106 ER 661, where a provision of a statute requiring a duly appointed justice of the peace to take an oath before acting was held to be binding only on the justice personally and making him liable to a penalty at common law, but not to affect the validity of his acts. The present case involved the complete failure of the Tribunal to meet as such and to be constituted as Parliament provides. The basis of the de facto doctrine supports its inapplicability in circumstances such as the present. "… An officer de facto is one who has the reputation of being the officer he assumes to be, and yet is not a good officer in point of law": R v Corporation of the Bedford Level (1805) 6 East 356 at 368-369; 102 ER 1323 at 1328. It is difficult to see how a judge could have a reputation of being a judge and two assessors. True the statute empowers him to act by himself if the assessors, having been duly summoned, do not turn up. But this is a question which must arise afresh in each new case. It is not capable of being the subject of reputation. … [T]he de facto officers cases have developed "as a matter of policy and necessity" to protect those litigants whose interests are affected by the apparently official acts of persons who purport to exercise official powers. The doctrine should not be extended to a case, such as the present, where what is involved is an industrial award having quasi legislative force upon large numbers of persons not immediately involved in the litigation. True it is, declaring the award void and quashing it will cause industrial inconvenience. But that is not a reason to invoke the public officers "doctrine". Indeed, the widespread operation of the purported award, made invalidly, is, on the contrary, a reason to insist upon due observance of the law. Otherwise the rule of law and compliance with the requirements established by Parliament will be ignored by reference to a "doctrine" whose operation should be strictly confined. The dismissal of the decision in Ellis v Bourke (1889) 15 VLR 163 as involving a "mere irregularity" is, with respect, more a conclusion than a reason. 117 Subsequently, and again in a Court of Appeal in which Kirby P (as his Honour then was) presided, reference was made to the "inclination of the Court to confine any such doctrine within narrow limits": Balmain Association Inc v Planning Administrator for the Leichardt Council (1991) 25 NSWLR 615 at 639 per Kirby P, Priestley and Handley JJA. The invalidity in the appointment of the planning administrator there arose not by reason of any failure to comply with any statutory requirement but rather from a failure to comply with the requirements of procedural fairness. 118 There is, with respect, much to be said for confining the doctrine within "narrow limits". Not all of the decisions are easily reconcilable - even by reference to a touchstone as to what may have been perceived to be the just and appropriate result in each individual case. How narrow any confinement of the common law doctrine should now be is perhaps a debate best left to another day. For present purposes it must be accepted that whatever may be the current ambit of its operation the de facto officers doctrine has been recognised as part of the common law and has been applied comparatively recently in a variety of circumstances by a number of different courts: e.g., Cassell v The Queen [2000] HCA 8 at [19], 201 CLR 189 at 193 per Gleeson CJ, Gaudron, McHugh and Gummow JJ; Commonwealth v Anti-Discrimination Tribunal (Tasmania) [2008] FCAFC 104 at [87], 169 FCR 85 at 104 to 105 per Weinberg J; Melrose Farm Pty Ltd t/as Milesaway Tours v Milward [2008] WASCA 175 at [82] to [91], 175 IR 455 at 474 to 476 per Le Miere J (Steytler P and Pullin J agreeing). 119 Although the doctrine may thus be regarded as part of the common law, caution must nevertheless be exercised when applying the doctrine. The decision in In Re Aldridge is an early instance where the doctrine was successfully invoked with the consequence that even the liberty of the subject was not sufficient to displace the doctrine's operation. Perhaps persons acting as de facto judges may still be able to bring themselves within the de facto officers doctrine. But times have unquestionably changed. Although the doctrine survives, it may be doubted whether some of the earlier decisions would be decided in the same manner today. Even though the doctrine may still survive, its ambit of operation - like other common law doctrines - must necessarily yield to either an express legislative provision precluding its operation or by a sufficiently clear legislative intention that may be discerned by a proper construction of the statutory provisions as a whole. 120 Such is the present case. 121 The process of construction which has led to the conclusion that non-compliance with the requirements of consultation imposed by ss 84(3) and 85(3) lead to the invalidity of the determinations of the Committees, equally leads to the conclusion that Part VAA of the Health Insurance Act leaves no room for the continued operation of the de facto officers doctrine. As repeatedly recognised, "the principle can be modified by a statute which requires that a particular pre-condition for office operate, irrespective of the practical and policy reasons upon which the de facto officer principle is based": e.g., R v Janceski [2005] NSWCCA 281 at [121], 64 NSWLR 10 at 32 per Spigelman CJ. The importance ascribed by the legislature to the role of the AMA and peer review precludes any conclusion that Panel members who have been appointed without preceding consultation could nevertheless be regarded as de facto Panel members. The wish and intention of the Legislature, it is concluded, cannot be so easily put to one side.

Conclusions 122 The questions as referred to the Full Court should be answered in the manner proposed by Rares and Katzmann JJ. If it had been necessary to answer Questions 4 and 5, Question 4 would have been answered "No". Each of the questions raised in Question 5 would have been answered "Yes". I certify that the preceding seventy-three (73) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Flick.

Associate: Dated: 28 July 2011 SCHEDULE NSD 543 of 2010 BETWEEN: ALI KUTLU Applicant AND: DIRECTOR OF PROFESSIONAL SERVICES REVIEW First Respondent BRUCE WALLACE INGRAM, PAUL DAVID HANSON AND TIMOTHY JOHN FLANAGAN CONSTITUTING THE PROFESSIONAL SERVICES REVIEW COMMITTEE NO 530 Second Respondent CHIEF EXECUTIVE OFFICER OF MEDICARE AUSTRALIA Third Respondent DETERMINING AUTHORITY NO 530 ESTABLISHED BY SECTION 106Q OF THE HEALTH INSURANCE ACT 1973 (CTH) Fourth Respondent THE COMMONWEALTH OF AUSTRALIA Fifth Respondent NSD 745 of 2010 BETWEEN: DR ROBERT CLARKE Applicant AND: DR LEON SHAPERO, DR RODNEY McMAHON AND DR BRIAN MORTON CONSTITUTING THE PROFESSIONAL SERVICES REVIEW COMMITTEE NO 631 First Respondent DETERMINING AUTHORITY ESTABLISHED BY SECTION 106Q OF THE HEALTH INSURANCE ACT 1973 (CTH) Second Respondent THE DIRECTOR OF PROFESSIONAL SERVICES REVIEW Third Respondent THE COMMONWEALTH OF AUSTRALIA Fourth Respondent NSD 989 of 2010 BETWEEN: DR IL-SONG LEE Applicant AND: WAL GRIGOR, PATRICK TAN AND DAVID RIVETT IN THEIR CAPACITY AS PROFESSIONAL SERVICES REVIEW COMMITTEE NO 292 First Respondent CHIEF EXECUTIVE OFFICER OF MEDICARE AUSTRALIA Second Respondent DETERMINING AUTHORITY ESTABLISHED BY SECTION 106Q OF THE HEALTH INSURANCE ACT 1973 (CTH) Third Respondent THE DIRECTOR OF PROFESSIONAL SERVICES REVIEW Fourth Respondent THE COMMONWEALTH OF AUSTRALIA Fifth Respondent NSD 1112 of 2010 BETWEEN: DR IL-SONG LEE Applicant AND: BERNARD KELLY, ELIZABETH MAGASSY AND VAN PHUOC VO IN THEIR CAPACITY AS PROFESSIONAL SERVICES REVIEW COMMITTEE NO 348 First Respondent CHIEF EXECUTIVE OFFICE OF MEDICARE AUSTRALIA Second Respondent DETERMINING AUTHORITY ESTABLISHED BY SECTION 106Q OF THE HEALTH INSURANCE ACT 1973 (CTH) Third Respondent THE DIRECTOR OF PROFESSIONAL SERVICES REVIEW Fourth Respondent THE COMMONWEALTH OF AUSTRALIA Fifth Respondent QUD 297 of 2010 BETWEEN: PAUL CONDOLEON Applicant AND: DIRECTOR OF PROFESSIONAL SERVICES REVIEW First Respondent BRUCE INGRAM, PAUL HANSON AND TIMOTHY FLANAGAN CONSTITUTING THE PROFESSIONAL SERVICES REVIEW COMMITTEE NO 580 Second Respondent CHIEF EXECUTIVE OFFICER OF MEDICARE AUSTRALIA Third Respondent DETERMINING AUTHORITY ESTABLISHED BY SECTION 106Q OF THE HEALTH INSURANCE ACT 1973 (CTH) Fourth Respondent THE HONOURABLE NICOLA ROXON MP MINISTER OF STATE FOR HEALTH AND AGEING Fifth Respondent