33 Section 106K is in these terms:
106K Committee may have regard to samples of services
(1) The Committee may, in investigating the provision of services included in a particular class of the referred services, have regard only to a sample of the services included in the class.
(2) If the Committee finds that a person has engaged in inappropriate practice in providing all, or a proportion, of the services included in the sample, then, the person under review is taken, for the purposes of this Part, to have engaged in inappropriate practice in the provision of all, or that proportion, as the case may be, of the services included in the class from which the sample is chosen.
(3) The Minister may make written determinations specifying the content and form of sampling methodologies that may be used by Committees for the purposes of subsection (1).
(4) The Committee may use a sampling methodology that is not specified in such a determination if, the Committee has been advised by a statistician accredited by the Statistical Society of Australia Inc that the sampling methodology is statistically valid.
(5) A determination by the Minister under subsection (3) is a disallowable instrument for the purposes of section 46A of the Acts Interpretation Act 1901.
34 There is no contention that the Committee acted beyond power in adopting a sampling methodology nor that in doing so, s 106K(2) does not operate to bring about the result that the person is taken for the purposes of part VAA to have engaged in inappropriate practice in the provision of that proportion of the services in the class from which the sample was chosen. Nor is there a contention that the Committee acted beyond power in relying upon the advise and recommendations of Professor Nicholls, who advised that the sampling methodology adopted by the Committee for item 23 services is a statistically valid method (s 106K(4)). In addition, there is no challenge to reliance by the Committee upon the Health Insurance (Professional Services Review - Sampling Methodology) determination 2000 (no. 1) in accordance with s 106K(3). In this case, the Committee has relied upon an express statutory power and acted within the limits of the power. Plainly enough, the Committee must act judicially in the sense that it must act in accordance with the requirements of procedural fairness or natural justice and not act arbitrarily, irrationally or unreasonably. It cannot be contended that the Committee has acted arbitrarily, irrationally or unreasonably by expressly acting in conformity with the statutory instrument. No doubt, that is why Deane J observed in Bond that the precise content of an obligation upon a tribunal or statutory body to observe the requirements of natural justice or procedural fairness varies 'according to the statutory framework of the particular proceedings' and 'that being so, the content of the obligation is not susceptible of precise definition' (366-367).
35 Grounds 3, 4, 5, 6 and 7 of the proposed amended application all, in one way or another, rely upon the application of the principle derived from Briginshaw v Briginshaw (1938) 60 CLR 336.
36 The content of the Briginshaw point at paragraphs 4, 5, 6 and 7 of the amended document is this. The PSR Committee acted on inexact proof; the gravity of the consequences flowing from the PSR Committee's findings required a higher level of proof; the PSR Committee did not consult with any of the patients within the sample group; and the PSR Committee ought to have considered the nature of the client base of Dr Mitchelson and the limited number of bulk billing practices in regional centres.
37 The PSR Committee was established to 'investigate whether Dr Mitchelson engaged in appropriate practice in providing the 'Referred Services'' and whether Dr Mitchelson may have:
· 'failed to provide appropriate professional services to his patients;
· failed to satisfy the requirements of the relevant items in the MBS;
· failed to provide adequate clinical input into the services;
· provided services that were not necessary and/or not clinically relevant;
· kept records that were deficient in the essential clinical information'
(Final report PSR Committee no.445)
38 Subdivision B of Part VAA of the Act provides for 'Proceedings of Committees'. The chairperson is to convene meetings of the committee (s 97). The committee may regulate the proceedings of its meetings as it thinks fit (s 98(1)). For the purposes of its enquiry, the committee may inform itself in any manner it thinks fit (s 98(3)). A question arising at a meeting is decided by a majority of votes of members present and voting (s 99(4)). The committee must hold a hearing if it appears to the committee that the person under review may have engaged in inappropriate practice in providing the referred services (s 101(2)). The person under review is entitled, subject to any reasonable limitations or restrictions the committee may impose, to attend the hearing; be accompanied by a lawyer or other advisor; call witnesses to give evidence; produce written statements going to character; question persons giving evidence at the hearing; address the committee on questions of law during the hearing; and after the conclusion of the taking of evidence, make a final address to the committee on questions of law, the conduct of the hearing and the merits of the matters to which the hearing relates (s 103). The committee has power to require the production of relevant documents (s 105A).
39 The procedure for conducting a hearing is within the discretion of the Committee member presiding at the meeting in question (s 106(1)). The committee is not bound by the rules of evidence but may inform itself on any matter in any way it thinks appropriate (s 106(2)). Evidence at a hearing may be taken on oath or affirmation (s 106A(1)). A committee member may by instrument in writing summon a person to appear at a hearing and give evidence or produce documents (s 106B). A person appearing as a witness at a hearing must not refuse or fail to be sworn or make an affirmation or refuse or fail to answer a question that he or she is required by a committee member to answer or refuse or fail to produce a document that he or she is required under the Act to produce (s 106E). A person must not give an answer to a question knowing the answer to be false or misleading in a material particular (s 106E(2)). A person is not excused from answering a question or producing a document on the ground that the answer or production of the document may incriminate the person (s 106E(3)). An answer given or a document produced and information obtained as a direct or indirect result of answering a question or producing a document is not admissible in evidence against the person in any criminal proceedings (s 106E(4)). A committee member has, in the performance of his or her duties, the same protection and immunity as a Justice of the High Court (s 106F).
40 It is the duty of a committee to carry out its functions so that its final report is given to the Determining Authority within certain timeframes (s 106G). The committee is to make findings only in respect of the referred services (s 106H). The committee may in investigating the provision of services included in a particular class of the referred services, have regard only to a sample of the services included in the class (s 106K(1)) and may have regard to a pattern of services (s 106KA). If in the course of the committee's investigation the committee becomes aware of any matter that the committee considers to be of concern to the profession of which the practitioner is a member, the committee must notify the director in writing of that matter and if such notification is made, the director must give particulars of that matter to the commission or another appropriate authority or body (s 106KC).
41 In preparing a draft report of preliminary findings, the committee must set out those preliminary findings if the committee members are unanimous in those findings. If not, the majority must set out their findings and the other committee members must set out their findings. If there is no majority of committee members that are agreed on preliminary findings, the preliminary report must set out the respective preliminary findings of committee members (s 106KD(1)). The draft report must set out the reasons for the preliminary findings (s 106KD(1A)) and the committee must give the person under review a copy of the draft together with a notice inviting that person to make written submissions to the committee suggesting changes to the draft within one month of receiving the draft (s 106KD(3)).
42 After the period of one month, the committee must, after taking into account any submissions made, prepare a final report setting out the findings of the committee members if they are unanimous in those findings; the majority findings if there be a majority; and if not, the respective findings of the committee members (s 106L). The final report must not include a finding of inappropriate practice unless the finding and the reasons for the finding were included in the draft report; the committee must give copies of the final report to the person under review, the director, and the Determining Authority not earlier than one month after the day of which a copy of the report is given to the person under review. The committee may refer material to the commission if fraud is suspected (s 106N).
43 The decision reached by the PSR Committee is that Dr Mitchelson engaged in inappropriate practice for the following reasons. Dr Mitchelson:
· 'failed to satisfy the requirements of item 23;
· failed to provide adequate clinical input into the services;
· kept records that were deficient in essential clinical information; and
· pursuant to subsection 106H(3) of the Act, failed to satisfy the requirements of the pharmaceutical benefits scheme'.
44 The Committee further found that Dr Mitchelson engaged in inappropriate practice for the following reasons. Dr Mitchelson:
· 'failed to satisfy the requirements of item 36;
· failed to provide adequate clinical input into the services;
· kept records that were deficient in essential clinical information;
· pursuant to subsection 106H(3) of the Act, failed to satisfy the requirements of the pharmaceutical benefits scheme'; and
· pursuant to subsection 106H(3) of the Act used MBS item 36 when not warranted'.
45 The statutory role of the committee is investigative. It makes findings to be relied upon by the Authority in making draft and final determinations containing one or more of the directions contemplated by s 106U which include repayment to the Commonwealth of the whole or part of a medical benefit paid for a service or class of services where inappropriate practice has been found and suspension for a period and/or disqualification for a period from the provision of services to which medical benefits relate. The Briginshaw point seems to be that in relying on the composition and size of the sample selected and in failing to consult with patients, the proof of matters going to 'inappropriate practice' was inexact and failed to attain the standard of proof a committee acting reasonably in the conduct of its proceedings ought to adopt having regard to the gravity of the possible s 106U directions.
46 The statute expressly provides that the committee in discharging its investigative function may 'have regard only to a sample of the services' in a class of services where reliance on a sample is for the very purpose of testing 'inappropriate practice' leading to findings likely to lead to one or more of the serious s 106U directions by the Authority.
47 The sampling methodology adopted by the committee might be that contained in a ministerial determination specifying the content and form of sampling methodologies that may be used (s 106K(3)); or a nonspecified methodology 'if but only if' shown on advice to the committee to be statistically valid, by an accredited statistician.
48 Since the Committee has acted in conformity with the Act by having regard only to a sample within the statutory constraints upon the methodology to be used (and no contention to the contrary is made) the question is whether any Briginshaw principle is engaged. Should the Committee have selected a method of fact finding other than by sampling the services?
49 The committee must act reasonably. In order to be satisfied that Dr Mitchelson engaged in 'inappropriate practice' the committee needs to reach a state of affirmative satisfaction of the foundation factual matters giving rise to that conclusion to a standard of 'reasonable satisfaction'. A member, acting reasonably, will not be so satisfied 'independently of the nature and consequence of the fact or facts to be proved' (Briginshaw, per Dixon J at 362). The seriousness of the allegation or the gravity of the consequences flowing from a particular finding must necessarily affect the judgment made by each committee member as to whether the particular issue has been established to that member's reasonable satisfaction. As Sir Owen Dixon observed, reasonable satisfaction should not be reached by 'inexact proofs, indefinite testimony or indirect inferences' (p, 362). Plainly enough, the nature of the issue before the tribunal 'necessarily affects the process by which reasonable satisfaction is attained' (Dixon J per 363).
50 The proposed amended application simply asserts a conclusion of reliance upon inexact proof and thus, inferentially, a failure on the part of committee members to be reasonably satisfied of the relevant matters. The difficulty with that bald conclusionary assertion is that the Committee acted in conformity with the Act in circumstances where the sampling methodology was the subject of advice from an expert, Professor Nicholls, of statistical validity. Prima facie the Committee acted reasonably in conducting its investigation. No attempt has been made by Dr Mitchelson to isolate the process of reasoning in respect of any of the various sample services and demonstrate any failure on the part of the Committee. There is no reference to factual material from which 'inferences' were drawn incorrectly nor reference to 'indefinite testimony' or 'inexactness' in any of the analyses of the sample services.
51 As a result, the proposed amended application fails to identify a ground of challenge supported by material facts going to a ground of challenge.
52 It may be however that the election to rely upon a sampling methodology having regard to particular facts can be shown to amount to an error of law. There is nothing in any of the material that demonstrates that to be so. The conclusionary assertion is made but nothing of support for it has been identified.
53 There is no attempt to plead facts demonstrating that the methodology relied upon by the Committee on the advise of Professor Nicholl's was unreasonable, unsound or unreliable as statistically invalid. Nor is there any attempt to demonstrate, for example, that the finding of the Committee that Dr Mitchelson kept records that were deficient in essential clinical information, was unsupported by evidence before the Committee. Nor is there any attempt to demonstrate that the findings of the Committee that Dr Mitchelson failed to provide appropriate professional services to his patients; failed to satisfy the requirements of the relevant MBS item; failed to provide adequate clinical input into the services and provided services that were not necessary and/or not clinically relevant, were each unsupported by evidence before the Committee.
54 In this application for leave to amend, there is no attempt to isolate with any precision, a contended basis on which the Committee could not have been reasonably satisfied of the findings it made.
55 It should be remembered that Dr Mitchelson attended the hearing before the Committee and was represented on 3 and 4 November 2005 by Mr Boddice of Counsel, Ms O'Mullane together with Dr David Pakchung and Mr Harry Mackay from United Medical Protection. Dr Mitchelson was represented on 9 March 2006 by Ms Jenny Rosengren of Counsel, Ms O'Mullane and was assisted by Dr Pakchung. Dr Mitchelson was invited to address the Committee at any time and to request an adjournment if required at any time to seek legal or other advice. During the hearing, the Committee questioned and heard evidence from Dr Mitchelson and examined the medical records. The Committee summarised its preliminary views at the conclusion of the hearing. Dr Mitchelson was invited to make submissions about matters that had been put to him. Neither Dr Mitchelson nor his legal advisors made oral submissions at the close of the hearing. After the close of the hearing, the Committee's secretary under instructions from the chair of the Committee invited Dr Mitchelson and/or his lawyers to make written submissions within one month. They did not do so.
56 Dr Mitchelson has been intimately familiar with the composition of the PSR Committee, the issues and contentions, the records relied upon by the PSR Committee and Dr Mitchelson has engaged with representatives in the conduct of the hearing.
57 Notwithstanding that degree of engagement in the investigation and the lengthy time afforded to Dr Mitchelson to properly formulate with some precision the basis upon which the PSR Committee could not be 'reasonably satisfied' of the relevant matters, thus failing to attain the relevant state of satisfaction, no properly formulated contention has emerged.
58 As a result, the application for leave to amend in terms of the proposed amended application for an order of review must necessarily fail.
59 A question might arise as to whether a sample of services in a class of services, as a matter of predictive validity, gives rise to a sufficient degree of reliability to enable a committee to conclude to its reasonable satisfaction that the sample properly reflects 'inappropriate practice' in respect of a class of services at the level found. However, the Committee elected to have regard only to a sample and adopted a method advised by Professor Nicholls to be statistically valid. Section 106K(2) brings about the deemed result in respect of that class.
60 The question of a proposed amendment to the applicant's initiating document has been before the Court on three occasions; 12 July 2007, 28 August 2007 and 18 September 2007. The foundation document filed on 8 May 2007 was so inadequate that the proposed amended application is in truth the first attempt to formulate an ADJR ground of challenge supported by any facts. The amended application seems to be the best the applicant can say after 156 days (and two court orders) of reflection on the PSR Committee's findings having elected to make no oral submissions at the conclusion of the hearing nor written submissions notwithstanding the invitation by the committee chair to do both. During this period (over 5 months from receipt by Dr Mitchelson of the decision material) Dr Mitchelson has had the benefit of the statutory stay upon the Authority's directions taking effect and the consequent fulfilment of the statutory objective of protecting the public interest.
61 I am satisfied that the claims made by the applicant as formulated by the proposed amended application cannot succeed and are bound to fail in the sense identified by Bennett J in Spotwire Pty Ltd v Visa International Services Inc (2003) ATPR 41-949 at 47, 410. Accordingly, it would be futile to grant leave to amend in terms of the proposed document. I refuse leave to amend and dismiss the applicant's notice of motion filed on 12 September 2007.
62 I have given consideration to this difficulty. I am not sure whether the failure to formulate a ground of challenge supported by material facts is a function of delay by Mr Royds or for that matter Mr Royds and Dr Mitchelson. I am satisfied that Mr Royds does not appreciate the need to comply with a time limitation contained in the principal legislation nor the need to file and serve a properly formulated document identifying arguable grounds supported by material facts rather than simply filing anything. Nor, apparently, is there an appreciation of a need to comply with orders of the court.
63 Having regard to the lengthy period of time afforded to Dr Mitchelson to properly formulate an application which raises an arguable ground of challenge to the Committee's decision supported by material facts, the failure to comply with Court orders and the statutory objective of the legislation to protect the public interest and the discretionary nature of the relief (Lamb v Moss (1983) 49 ALR 533, (1983) 76 FLR 296, (1983) 5 ALD 446; Seymour v Attorney-General (Cth) (1984) 4 FCR 498; Kamba v Australian Prudential Regulation Authority [2007] FCA 1422 (13 September 2007) at [8]), I propose to refuse leave to amend and dismiss the notice of appeal filed by Dr Mitchelson on 8 May 2007.
64 Having regard to all these considerations, I propose to make an order that Dr Mitchelson pay the costs of the respondents of and incidental to the respondents notice of motion filed on 3 August 2007, on an indemnity basis and those costs of the respondents of and incidental to the notice of motion of the applicant filed 12 September 2007 seeking leave to amend the Notice of Appeal, on an indemnity basis.
I certify that the preceding 64 (sixty four) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Greenwood.