Lee v Kelly

REASONS FOR JUDGMENT Introduction 1 This is an application for review of decisions made by the first respondent ("Committee 348") and the fourth respondent ("the Director") under the peer-review based Professional Services Review Scheme ("the Scheme") contained in Part VAA of the Health Insurance Act 1973 (Cth) ("the Act"). 2 I described the Scheme in my decision in Oreb v Willcock [2004] FCA 1520 ("Oreb") at [28] - [70]. I also set out the relevant provisions of the Act. I will not repeat what I said in Oreb about the Scheme or the Act. As in Oreb, the relevant provisions are those in the Act as it stood in 1999. 3 The applicant ("Dr Lee") seeks review of the decisions under ss 5 and 6 of the Administrative Decisions (Judicial Review) Act 1977 (Cth) ("the ADJR Act") and s 39B(1A) of the Judiciary Act 1903 (Cth) ("the Judiciary Act"). 4 The decisions which Dr Lee challenges are, first, an adjudicative referral made by the Director on 9 July 2002 and, second, a finding made by Committee 348 that Dr Lee engaged in inappropriate practice and that exceptional circumstances did not exist; see s 106KA of the Act. The Final Report of Committee 348 was made on 10 April 2003. 5 The application was filed on 9 May 2003. The application for a review of the decision of Committee 348 was filed within the time limited by ss 11(1)(c) and 11(3) of the ADJR Act. An extension of time under the ADJR Act or a favourable exercise of my discretion under the Judiciary Act is required for any order of review of the adjudicative referral. 6 The Further Amended Application raises, in addition to the grounds of judicial review, three Constitutional questions. On 28 October 2004 I made an order severing the Constitutional questions and providing for the hearing of the claims for judicial review before the hearing of the Constitutional questions. 7 Dr Lee raised two questions for consideration. The first was a "s 92 question" which is similar to the question on which I found against the applicant in Oreb and in Dimian v Health Insurance Commission [2004] FCA 1615 ("Dimian"). 8 The second question is whether the Final Report of Committee 348 was affected by jurisdictional error in its approach to the question of whether "exceptional circumstances" existed pursuant to s 106KA(2) of the Act and Regulation 11(b) of the Health Insurance (Professional Services Review) Regulations 1999 (Cth) ("the Regulations"). 9 A similar question arose in Oreb. However, here, Dr Lee contends that the nature of the jurisdictional error which affects the findingof inappropriate practice travels beyond the scope of the error which affected the Committee's report in Oreb. 10 In particular, Dr Lee contends that Committee 348 took into account irrelevant considerations of a racial nature. These may be summarised as considerations of the need for Dr Lee's Korean patients to integrate into the Australian community. 11 Dr Lee also contends that Committee 348 asked itself the wrong question by considering whether his Korean patients should integrate into the Australian community instead of asking whether exceptional circumstances existed under Regulation 11(b) by reason of the characteristics of Dr Lee's patients. The Factual Background 12 On 3 June 2002, the third respondent ("the Commission") referred Dr Lee's conduct to the Director under investigative referral no 348. The referral period was 8 January 2001 to 12 October 2001. The Commissioner considered that Dr Lee had engaged in inappropriate practice by reason of a prescribed pattern of services under s 106KA of the Act and Regulation 11. 13 The prescribed pattern of services to which the Commission referred was that Dr Lee had rendered 80 or more attendances per day on 37 occasions during the referral period. This was a breach of the 80/20 rule to which Ryan J referred in Daniel v Kelly (2003) 200 ALR 379 at [8]. 14 The Further Amended Application in these proceedings seeks review of the investigative referral but this was pursued only in a formal way in the written submissions. It was not addressed at the hearing. 15 On 5 June 2002 the Director wrote to Dr Lee informing him of the investigative referral. The letter was in the same form as the letters to which I referred in Oreb at [92] and [107] and in Dimian at [22]. However, for completeness, I will set it out in full as follows:- "On 4 June 2002, I received Investigative Referral No 348 from the Health Insurance Commission (the HIC) regarding your conduct in relation to the Medicate program. I understand that the HIC has delivered to you a copy of the referral documentation and the relevant sections of the Health Insurance Act 1973 (the Act). In accordance with subsection 89(1) of the Act, I must carry out an investigation of this referral. Following the investigation, I have the option to: · dismiss the referral for the reasons set out in section 91 of the Act, · enter into an agreement with you as set out in section 92 of the Act, or · refer the matter to a Professional Services Review Committee as set out in section 93 of the Act. Subsection 88(3) of the Act provides that you may make written submissions to the Director, within 14 days of the day when you were sent the referral, as to reasons why the Director should dismiss the referral without setting up a Professional Services Review Committee. I would be pleased to receive a submission from you and would give it careful consideration along with any other relevant documents or materials I may decide to obtain. Should you wish to communicate with this office, the address and telephone numbers are detailed below. If you would prefer any further communications from this office to be directed to you at another address, I would appreciate your written advice. If you have any questions, please contact the Administrative Officer, Mrs Belinda Steward, during business hours on 02-62819155." 16 Dr Lee did not respond to the letter. 17 On 9 July 2002, the Director made an adjudicative referral and established Committee 348 to consider whether Dr Lee's conduct constituted inappropriate practice under s 82 of the Act. 18 The adjudicative referral was in almost identical terms to the adjudicative referrals in Oreb at [110] and Dimian at [27] - [30]. The Director stated that he did not dismiss the investigative referral because he was not satisfied that there were insufficient grounds on which a committee could reasonably find inappropriate practice. 19 The Director therefore established Committee 348 under s 93(1) of the Act. The adjudicative referral was in respect of Dr Lee's attendances at his practice at 87 Rowe Street, Eastwood on the 37 days specified in the referral period. 20 Committee 348 held a hearing on 27 September 2002. Dr Lee tendered written submissions dated 27 September 2002 at the commencement of the hearing. 21 Dr Lee's written submissions stated that he did not dispute that he had rendered 80 or more consultations a day on 20 or more days during the referral period. 22 The effect of Dr Lee's written submissions was:- · 90% of his patients are Korean-speaking or from a Korean background. · He is one of only two Korean-speaking doctors practicing north of the Parramatta River. · The Korean population has unique socio-economic and health characteristics. · There is an absence of other medical services for Korean patients and this is an exceptional circumstance. · There are five dedicated Korean practices in Campsie. · There is one "Korean doctor" in Strathfield and two, including Dr Lee in Eastwood. 23 Dr Lee's evidence at the hearing was to the same effect. He said that the Korean population of New South Wales is about 40,000 - 50,000. 24 He said his practice was unique because he deals mainly with patients from a Korean background and that he has an advantage over other doctors because he speaks Korean and understands the culture. 25 On 4 December 2002, Committee 348 provided a copy of its draft report to Dr Lee's solicitors. The draft report contained a preliminary finding that Dr Lee had engaged in inappropriate practice on each of the 37 days specified in the referral period. It also contained a preliminary finding that exceptional circumstances did not exist on any of the days. 26 In [58] of the draft report, Committee 348 stated that, although Dr Lee provided an important service to the Korean community, the demographics of his patient base meant that the patients had sufficient English within their "closely knit" community to be able to obtain other medical assistance in an emergency. 27 In [59] of the draft, Committee 348 stated its view that Dr Lee's management of his patients reinforced their reliance on his surgery. 28 On 14 January 2003, Dr Lee's solicitors sent written submissions in response to the Draft Report to Committee 348. It is unnecessary to refer to the detail of the submissions save for portions of the response dealing with [58] and [59] of the draft. I will set out Dr Lee's responses because they are referred to in an attachment to the Final Report and counsel for Dr Lee relies upon the attachment in support of his contentions of jurisdictional error. 29 In answer to [58] of the draft report, Dr Lee's solicitors submitted, relevantly, as follows:- "We submit the significant cultural and language barriers to effective communication between Dr Lee's patient base and other health practitioners are not overcome merely by the availability of 'sufficient English within their closely-knit support community to be able to obtain other medical assistance in an emergency'. We submit there was a genuine absence of other medical services (including, but not limited to, the absence of Dr Lee(f)) having regard to the location of Dr Lee's practice and the characteristics of his patients." 30 The reference to Dr Lee (f) in this paragraph was to a female Korean-speaking doctor who worked for Dr Lee. 31 In answer to [59] of the draft report, the solicitors made, inter alia, the following submission:- "We submit there is no evidence before the Committee to support a finding, conclusion or inference that either: (a) 'Dr Lee's management of his patients reinforced their reliance on his surgery' or, if that were so; (b) '… this is to the disadvantage of his Korean patients." 32 In its Final Report, dated 10 April 2003, Committee 348 made findings of inappropriate practice and absence of exceptional circumstances. 33 The Final Report of Committee 348 contained an analysis of the meaning of "exceptional circumstances" in exactly the same terms as the report of the Committee in the matter of Oreb. I referred to the relevant paragraphs of the report in Oreb at [119] - [123]. In summary, Committee 348, after referring to extrinsic material to construe s 106KA(2) and Reg 11(b), came to the view that "exceptional circumstances" were most likely to be of an intermittent or episodic nature rather than a predictable on-going situation. It said that:- "…. The exception (s 106KA(2)) may be read as excusing lower standard services on particular days because of exceptional circumstances and it will be difficult to justify this on an on-going basis." 34 The Final Report of Committee 348 accurately summarised Dr Lee's submissions as referred to at [22] - [24] and [29] - [31] above. 35 The salient paragraphs of the Final Report are as follows:- "58. The Community accepted that Dr Lee provided an important service for the Korean community, however, the Committee felt the demographics of his patient base meant that the patients have sufficient English within their 'closely knit' support community to be able to obtain other medical assistance in an emergency. The Committee also found it difficult to reconcile Dr Lee's apparently contradictory evidence that many patients have complex conditions, yet his surgery has a high through-put. 59. In the Committee's view, Dr Lee's management of his patients reinforced their reliance on his surgery. Arguably, this is to the disadvantage of his Korean patients who, though preferring a Korean doctor for the reasons Dr Lee stated, would have been better served by an increased familiarity and comfort with the general medical services available in the community. 60. Having considered Dr Lee's evidence, the Committee was not satisfied that the above matters constituted exceptional circumstances which affected the rendering of services on the days in question. It considered that Dr Lee could and should have managed his practice so as to bring patient attendance rates down and not breach section 106KA of the Act and Part 3 of the Regulations. 63. The Committee considered the issues put forward by Dr Lee regarding exceptional circumstances, including the locum taking leave (maternity), as well as the pre and post holiday rush of patients and the unavailability of sufficient Korean doctors. The Committee noted that there were at least 30 active medical practitioners in the Eastwood area during the referral period. The Committee considered that Dr Lee should have managed his practice so as to regulate patient attendance and not breach section 106KA of the Act and Part 3 of the Regulations." 36 In an attachment to the Final Report, Committee 348 set out its responses to Dr Lee's written submissions to the draft. 37 The response of Committee 348 to the submission I have set out at [29] above was as follows:- "One could mount that argument about any culturally different group within the community. Other Committees have not had such a difficulty and the Committee is not convinced that the Korean community is sufficiently different from other non English speaking migrant groups that their situation must be treated differently from other groups." 38 The response of Committee 348 to the submission I have set out at [31] was:- "Dr Lee's submission is that Korean patients, by virtue of their language and culture need to consult with a Korean practitioner. This is the substance of his argument throughout the proceedings. He claims that his expertise in managing these patients is an expertise not shared by others in 'his' area. This is a philosophy which he believes and which he is therefore likely to share with his patients who, by virtue of this philosophy, must necessarily become reliant on his clinic. The disadvantage is the dependency that such an attitude hinders assimilation of his patients into the wider community."