Lee v Kelly [2005] FCAFC 197 | Case summary

REASONS FOR JUDGMENT LANDER J: 5 Originally there was an appeal and a cross-appeal from orders made by a judge of this Court on 7 February 2005 and 29 April 2005. 6 The appeal was abandoned but the cross-appeal proceeded. It is not necessary to say any more about the appeal. The cross-appeal raised quite separate issues. The cross-appeal is against orders made by the primary judge quashing the decision of the first cross-appellants and remitting the matter to a differently constituted Committee for determination. The cross-appeal directly raises for consideration the correctness or otherwise of the first respondents'/cross-appellants' decision. 7 The cross-respondent is a medical practitioner in general practice. 8 The fourth cross-appellant is the Director of Professional Services Review appointed under s 83 of the Health Insurance Act 1973 (Cth) (the Act). The third cross-appellant is the Health Insurance Commission which is constituted by s 4 of the Health Insurance Commission Act 1973 (Cth). The first cross-appellants constitute the Professional Services Review Committee No 348 (the Committee) which was appointed by the fourth respondent pursuant to s 93 of the Act. The second cross-appellant is the Determining Authority which is constituted by s 106Q of the Act. 9 Part VAA of the Act provides for a Professional Services Review Scheme. 10 In Oreb v Willcock [2005] FCAFC 196 ('Oreb v Willcock'), I explained the roles of each of the cross-appellants and outlined their powers, functions and obligations. Rather than repeat those matters, I adopt what I said in those reasons. 11 In this matter, the Health Insurance Commission made Investigative Referral No 348 to the Director on 3 June 2002. On 9 July 2002, pursuant to s 93(1), the Director made an adjudicative referral to the first respondents as Professional Services Review Committee No 348: '… to consider whether the conduct of Dr Lee in connection with rendering the following services ("the specified services") constituted engaging in inappropriate practice because the circumstances in which some or all of the specified services were rendered constituted a prescribed pattern of services as defined in section 106KA of the Act and Part 3 of the Regulations: all professional attendances (as defined in Regulation 7) rendered by Dr Lee ● on the 37 dates specified in report 1 at page 7 of Attachment B to this adjudicative referral, being dates on which Dr Lee rendered 80 or more professional attendances: ● within a specified location, namely 87 Rowe Street, Eastwood, NSW, 2122.' 12 Attachment B shows that the prescribed pattern of services was alleged to have occurred in that Dr Lee rendered 80 or more professional attendances per day on 37 occasions on and from 8 January 2001 to and including 12 October 2001. 13 The adjudicative referral raised for the first cross-appellant's consideration s 106KA(1) of the Act. 14 For the reasons I gave in Oreb v Willcock, the cross-appellant needed to proceed in the following way. 15 First, the Committee needed to be satisfied that Dr Lee had, during the relevant period, rendered or initiated services that are professional services of 80 or more services on each of 20 or more days. The Committee was satisfied of that matter. 16 Next, the Committee had to turn its mind to whether Dr Lee was relying upon s 106KA(2) to reduce the number of days taken by subsection (1) to have constituted engaging in a pattern of services which thereby constituted inappropriate practice. 17 If Dr Lee sought to invoke s 106KA(2), the Committee needed to identify whether, in doing so, Dr Lee was relying upon exceptional circumstances existing without reference to reg 11 or whether Dr Lee was relying upon either of paragraphs (a) or (b) of reg 11 or, indeed, whether Dr Lee was relying on more than one of those three circumstances. 18 If Dr Lee was relying upon exceptional circumstances without reference to reg 11 then the Committee needed to inquire into those circumstances to determine whether those circumstances were exceptional circumstances and they existed on a particular day or particular days during the relevant period. 19 If, on the other hand, Dr Lee was relying upon reg 11(a) the Committee needed to inquire into whether the circumstances relied upon by Dr Lee constituted an unusual occurrence causing an unusual level of need for professional attendances during the relevant period and on the particular day or particular days. 20 If Dr Lee was not relying upon exceptional circumstances or reg 11(a) but only upon reg 11(b), the Committee needed to inquire into whether, during the relevant period, there was an absence of medical services for Dr Lee's patients having regard to the location of Dr Lee's practice and the characteristics of Dr Lee's patients. 21 If the Committee were satisfied of any of those three matters, the Committee next needed to inquire into whether, whichever of the three matters had been established, 'affected the rendering or initiating of services' by Dr Lee. I explained in Oreb v Willcock how the Committee would conduct that inquiry and inform itself. 22 Lastly, if the Committee were satisfied that the circumstance relied upon by Dr Lee constituted either exceptional circumstances, or that the circumstances in reg 11(a) or reg 11(b) were made out, and those circumstances affected the rendering or initiating of services by Dr Lee, the Committee would inquire into whether those circumstances occurred on a particular day or particular days which had been taken by the Committee to be days constituting engaging in inappropriate practice in s 106KA(1). 23 If so satisfied, then the number of days would be reduced by the number of days upon which the Committee was satisfied that Dr Lee had discharged the onus cast upon him by s 106KA(2). 24 For the reasons I gave in Oreb v Willcock, if a medical practitioner relies upon the provisions of s 106KA(2), the Committee must satisfy itself as to whether in doing so the medical practitioner is relying upon exceptional circumstances as such or either of the paragraphs in reg 11. Of course, a medical practitioner could rely on all three but that would be unlikely. It is more likely that a medical practitioner would rely on only one of the three matters to discharge the onus in s 106KA(2). If, however, the medical practitioner is not able to articulate which of the three separate legislative provisions are relied upon, then the Committee must inquire as to whether the factual circumstances advanced by the medical practitioner come within any of the exceptional circumstances in s 106KA(2), or the circumstances in reg 11(a) or reg 11(b). 25 Dr Lee was represented by solicitors who tendered a written submission to the Committee. 26 In that submission, Dr Lee did not dispute that he had rendered 80 or more consultation services per day on 20 or more days during the referral period and thus the prescribed pattern of services was established. 27 However, in that submission, the solicitors addressed the question of exceptional circumstances. The submission addressed reg 11 and then referred to Dr Lee's practice. It was submitted that Dr Lee had 16,000 patients 'on his books' and that 10,000 of those 16,000 were active in that they had consulted Dr Lee in the last two years. It was put that 90 per cent of his patients were Korean-speaking and from a Korean background. Hence, 90 per cent of his consultations were conducted in the Korean language. 28 He submitted that there was a significant need for Korean-speaking medical services in Northern Sydney because there were 45,000 to 50,000 Koreans living in Sydney. 29 In paragraph 34 of the submission the solicitors specifically addressed the characteristics of Dr Lee's patients: 'We submit that the characteristics of Dr Lee's patients are such that there is an absence of other medical services for those patients and that it is an exceptional circumstance in which services were rendered which explains the high volumes of attendance items on some days within the referral period. It is also a circumstance which, thought foreseeable to a certain extent, is clearly beyond the control of Dr Lee to remedy.' 30 I think it is clear that Dr Lee's submission was that there was an absence of other medical services for Dr Lee's patients due to the location of Dr Lee's practice and the characteristics of his patients. 31 The Committee conducted a hearing on Friday, 27 September 2002 at which Dr Lee appeared with his solicitor. His evidence was to the same effect as the submission to which I have referred. 32 In accordance with the Act (s 106KD(1)), the Committee prepared a draft report setting out its preliminary findings which it published to Dr Lee on 4 December 2002. 33 On 14 January 2003 Dr Lee's solicitors responded to that draft report. In that submission the solicitors wrote: '7. The Committee has applied a test of "exceptional circumstances" which requires: (a) That the exceptional circumstances be intermittent or episodic in nature; (b) That the exceptional circumstances be "extreme" exceptional circumstances; (c) That the person under review "manage" patient numbers notwithstanding the existence of exceptional circumstances; (d) That the person under review successfully manage a reduction in patient numbers within the referral period notwithstanding the existence of exceptional circumstances. We submit that the Committee would be in error should it affirm that view of the test for exceptional circumstances in its Final Report. The test of "exceptional circumstances" is not determined with reference to the Committee's perception of whether those circumstances would be regarded by the general body of general practitioners to be exceptional circumstances in the same way as the test of "inappropriate practice" in Section 82(1)(a). The test for "exceptional circumstances" is simply an application of the ordinary meaning of those words to the facts of the case. … 9. Indeed, the inclusion of Regulation 11(b) would indicate that Parliament did not intend that exceptional circumstances should be intermittent or episodic in nature. 10. Furthermore, we respectfully submit the Committee has misunderstood the legal test of exceptional circumstances. Paragraph 42 of the Draft Report states: "…The Committee does not see that some extreme on-going circumstance is totally ruled out…although the general body of general practitioners would ordinarily expect a practitioner to manage their practice to promptly bring patient attendance rates down to acceptable levels such that proper clinical care can be provided to all patients."' 34 On 10 April 2003 the Committee published its final report. 35 Dr Lee's counsel, Mr Robinson, argued on this appeal that the Committee fell into error in that it did not discriminate between the circumstances which might give rise to exceptional circumstances under s 106KA(2) or the circumstances which might satisfy the test in reg 11(a) or the further circumstances which might satisfy the test under reg 11(b). 36 In its final report, the Committee identified the issues before it: '44. There were two principal considerations for the Committee before reaching any findings about Dr Lee's conduct: ● Firstly, it needed to determine, on the available evidence (including that in the Investigative Referral and Adjudicative Referral and any evidence from Dr Lee), whether he had rendered 80 or more professional attendances on 20 or ore days during the referral period. ● Secondly, it needed to hear and consider any evidence from Dr Lee of exceptional circumstances that related to a particular day or days in the referral period when 80 or more professional attendances were rendered.' 37 The Committee there correctly identified the questions which it had to address. 38 The Committee addressed the first issue and relied upon Dr Lee's concession that he had rendered 80 or more consultation services per day on 20 or more days during the referral period. The Committee was entitled to rely on that concession and, indeed, no complaint is made on this appeal in relation to that aspect of the Committee's decision. 39 The Committee then moved to the second matter into which it had to inquire, which it addressed between paragraphs 48 and 64 of its final report, under the heading 'Were there Exceptional Circumstances? Nowhere in those paragraphs did the Committee directly address what was undoubtedly Dr Lee's case as to whether there was an absence of other medical services for Dr Lee's patients due to the location of Dr Lee's practice and the characteristics of Dr Lee's patients. 40 Mr Robinson argued that the absence of any reference to reg 11(b) indicated that the Committee did not separately address that issue but addressed 'exceptional circumstances' in a compendious way. Thus, he said, the Committee asked itself the wrong question and thereby committed jurisdictional error. 41 Mr Hanks QC submitted that the Committee addressed all of the factual matters raised by Dr Lee which might have established the necessary factual matters under reg 11(b). He contended that, in doing so, it implicitly rejected Dr Lee's claim of an absence of medical services for the reasons mentioned in reg 11(b). 42 I think it is right that the Committee addressed most of the factual matters upon which Dr Lee relied for the purpose of invoking s 106KA(2) but it did so, in my opinion, on the incorrect assumption that it needed to examine those facts against the test of 'exceptional circumstances'. 43 Because Dr Lee was relying upon reg 11(b), he did not have to establish exceptional circumstances existed. For the reasons I gave in Oreb v Willcock, he had to establish that there was an absence of other medical services for his patients during the relevant period. Next, he had to establish that that absence was due to the location of his practice. Finally, he had to establish that that absence was also due to the characteristics of his patients. 44 If he established those matters, he thereby established by force of the Regulations and s 106KA(5) that the circumstances were exceptional. 45 The correct inquiry for the Committee was into whether he had established those matters. It was not correct to inquire into whether or not he had established there were exceptional circumstances. 46 For those reasons, although the Committee addressed the factual matters raised by Dr Lee, it did so in circumstances where it measured those matters against the incorrect criterion, namely, 'exceptional circumstances'. 47 It is also clear that the Committee had regard to irrelevant matters. 48 It said, when considering the question of exceptional circumstances, which as I have said was not the correct question: '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.' 49 The matters to which it had regard in paragraphs 59 and 60 could not have been relevant to the case advanced by Dr Lee under reg 11(b). The question of Dr Lee's management practice was simply not relevant in an inquiry whether Dr Lee had established the matters under reg 11(b). In my opinion, in a consideration of reg 11(b), the question whether the medical practitioner could have done something in the management of his practice to bring patient attendance rates down is simply not relevant. The question is whether there is an absence of medical services for the reasons in reg 11(b). 50 There is a further error disclosed in paragraph 60 where the Committee talks of a breach of s 106KA of the Act and Part 3 of the Regulations. It is not appropriate to consider the question of 'breach' of s 106KA or of the Regulations. The medical practitioner cannot breach s 106KA(1) and cannot, by failing to discharge the onus in s 106KA(2) 'breach' that subsection. Section 106KA(1) is a deeming provision. With the assistance of reg 10, s 106KA(1) deems the conduct, there referred to, to be inappropriate practice. There is no question of a 'breach' of the section. 51 In my opinion, the Committee asked itself the wrong question. It thereby conducted its inquiry into the facts by reference to the wrong criterion. It had regard to irrelevant matters. 52 The primary judge said at [47]: 'Counsel for Dr Lee submitted that Committee 348 fell into a similar error to that made by the Committee in Hatcher. In particular, it was said, that Committee 348 asked itself the wrong question about the need for the services and took into account irrelevant considerations about the need for the patients to integrate into the wider Australian community.' 53 The primary judge then said at [53]: ' Accordingly, in my opinion, Committee 348's findings were affected by errors of law. As in Oreb, it commenced with a misunderstanding of what was meant by "exceptional circumstances". It then failed to ask itself the correct question as to what had given rise to the claimed exceptional circumstances and whether they fell within the terms of Reg 11(b). It distracted itself from addressing the correct question by taking into account an irrelevant consideration, namely the need for the patients to integrate within the wider community. These were jurisdictional errors; see Minister for Immigration and Multicultural Affairs v Yusuf (2001) 206 CLR 323 ("Yusuf") at [84] (McHugh, Gummow and Hayne JJ).' 54 In my opinion, for the reasons I have given, the primary judge's conclusions were correct. It follows that I agree with the primary judge's order finding that exceptional circumstances did not exist should be set aside and that the matter should be remitted for further hearing. 55 On 7 February 2005, the primary judge made an order that the matter should be remitted to the Director to determine whether referral to another differently constituted Professional Services Review Committee should be made. 56 On 29 April 2005 the primary judge made further orders: '1. The matter be remitted to the Director of Professional Services Review with a direction that the Director of Professional Services Review amend Adjudicative Referral No 292 and establish a differently constituted Committee that is to determine the Adjudicative Referral made on 14 February 2002 according to law. 2. That the costs of this motion be costs in the appeal from the judgment of His Honour Justice Jacobson given on 7 February 2005.' 57 There seems to be a slip in those orders. If paragraph 1 of the orders made on 29 April 2005 was intended to be in substitution for paragraph 2 of the orders made on 7 February 2005, the previous order should have been revoked. I assume that was his Honour's intention. 58 However, the cross-appellants argued that the order made on 7 February 2005 and the order made on 29 April 2005, both of which had the effect of remitting the matter to a differently constituted Committee, should be set aside, even if the other grounds of appeal were dismissed. 59 The amended orders were made in the same circumstances as were described in Oreb v Willcock. The cross-appellants in this case consented to the orders made because they believed that the amended orders reflected his Honour's intention at the time that he made his orders on 7 February 2005. They therefore consented to the orders to facilitate this appeal. I accept that explanation. 60 In my opinion, for the reasons given in Oreb v Willcock, this matter should be remitted to the same Committee as conducted the inquiry which gave rise to the impugned report. There is no suggestion of bias or no apprehension of bias which would disqualify those members from further consideration of this matter. They have already conducted an inquiry. There is nothing, in my opinion, which would disqualify them from further hearing this matter. There is no finding that would mean that the first cross-appellants should not further hear the matter. In my opinion, whilst his Honour was right to quash the first respondents' decision, the order that followed should have been to remit the matter to the first respondents for further hearing according to law. 61 In those circumstances, I would allow the cross-appeal but only for the purpose of setting aside the orders made on 29 April 2005 and paragraph 2 of the orders made on 7 February 2005, and substituting for paragraph 2 of the orders made on 7 February 2005 an order that the matter be remitted to the Committee for further hearing according to law. 62 The parties have not been heard on the question of costs. The first cross-appellants have been partly successful but only to the extent of having the order for remitter varied. I suggest that the costs of the cross-appeal be reserved. If any party seeks an order for costs then within 21 days an application should be made in writing setting out the terms of the order sought. That application should be accompanied by a written submission in support of the application. If any such application is made any other party to the appeal should file their submission in opposition to that application within a further 14 days. 63 I propose the following orders: 1. Cross-appeal allowed. 2. Paragraph 2 of the orders made by Jacobson J on 7 February 2005 be set aside. 3. The orders made on 29 April 2005 be set aside. 4. The matter be remitted to the first respondents/cross-appellants to determine Adjudicative Referral No. 348. according to law. 5. The question of costs be reserved.

Lee v Kelly

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