Oreb v Professional Services Review Committee No 298 [2004] FCA 888 | Case summary

Oreb v Professional Services Review Committee No 298 [2004] FCA 888 | Case summary | Zoe

[20]

REASONS FOR JUDGMENT Introduction 1 I have before me for determination five notices of motion seeking orders for discovery against the Health Insurance Commission ("the HIC"), Dr Bernard Raymond Kelly in his capacity as Acting Director of Professional Services Review ("Dr Kelly") and Dr Alan John Holmes in his capacity as Director of Professional Services Review ("Dr Holmes") in each of these proceedings. 2 The applicant in each of the proceedings is a medical practitioner. In each case the applicant seeks orders for review under ss 5 and 6 of the Administrative Decisions (Judicial Review) Act 1977 (Cth) ("the ADJR Act") and s 39B of the Judiciary Act 1903 (Cth). The decisions for which review is sought are decisions by the relevant respondent to refer conduct of the applicant to the HIC's Director or Acting Director of Professional Services under an investigative referral. The applicants also seek review of decisions by the Director or Acting Director to establish a Professional Services Review Committee under an adjudicative referral. 3 The decisions were taken under the provisions of Part VAA of the Health Insurance Act 1973 (Cth) ("the Act"). The provisions of Part VAA of the Act were considered by a Full Court in Kelly v Daniel [2004] FCAFC 14. As the Court said in Kelly v Daniel at [2], that part of the Act establishes a peer review based Professional Services Review Scheme which focuses upon the conduct of, inter alia, medical practitioners in connection with the provision of services which attract Medicare or Pharmaceutical Benefits. 4 The motions seek discovery of particular classes of documents, defined in wide terms, the general effect of which would be to obtain material which was before the relevant decision-maker or which further explains the reasoning process of the decision-maker. 5 There was no dispute about the principles to be applied in determining whether it is appropriate for me to exercise my discretion to make an order. As a Full Court said in Australian Securities Commission v Somerville (1994) 51 FCR 38 ("Somerville") at 52-53, the question is to be determined in judicial review proceedings in accordance with the normal principles which apply to orders for discovery in civil proceedings. 6 However, their Honours went on to say, at 53, that in many cases by reason of absence of dispute as to primary facts or because reasons for the decision have been supplied, the occasion for making an order will not arise. This proposition was reiterated by another Full Court in Treasurer of the Commonwealth of Australia v Canwest Global Communications Corp [1997] FCA 578 ("Canwest") where their Honours said it is well recognised that very often there will be no need for discovery in judicial review proceedings, particularly where reasons have been given for the decision under challenge. 7 Federal Court Practice Note 14 poses the question which I have to answer, namely whether discovery is necessary at all and, if so, for what purposes. The answer to that question turns primarily upon an examination of the amended application filed in each proceeding and the description of the categories of documents which are sought. I will also refer, very briefly, to some parts of the legislative scheme contained in Part VAA of the Act and the decision of the Full Court in Kelly v Daniel. 8 In the course of argument on the motions, counsel for the applicants sought leave to further amend four of the applications. I granted leave to amend and the further amended applications in the matter of Oreb, Ho, Do and Bartos were filed on 21 June 2004. The notices of motion are decided on the basis of the further amended applications. The legislation 9 It is unnecessary to set out the provisions of the Act in detail. The following summary is sufficient for present purposes. As in Kelly v Daniel, the amendments to the scheme which came into effect in 2002 are not relevant to these proceedings. 10 Section 86 of the Act provides for the making of an investigative referral by the HIC to the Director of Professional Services Review ("the Director"). 11 Under s 86(1) the HIC may refer to the Director the conduct of a person relating to whether he or she has engaged in "inappropriate practice". The term inappropriate practice is defined by s 82 of the Act as conduct which would be unacceptable to the general body of general practitioners. 12 Importantly, s 86(4)(b) provides that an investigative referral must set out the reasons why the HIC considers the person under review may have engaged in inappropriate practice. 13 Section 88(1) of the Act requires the HIC to send a copy of the investigative referral to the person under review. Provision is made in ss 88(1) and (2) for the person under review to make written submissions to the Director stating why the referral should be dismissed without setting up a Professional Services Practice Committee. 14 Adjudicative referrals are made under s 93 of the Act. Section 93(1) provides that the Director may establish a Committee and make an adjudicative referral to it to consider whether the conduct of the practitioner constitutes inappropriate practice. 15 A written report dealing with the services to which the referral relates must accompany the adjudicative referral. Section 93(6) provides that the report must give the reasons why the Director thinks that the conduct may have constituted inappropriate practice. 16 Section 106KA provides that, subject to an exceptional circumstance proviso on which the person under review bears the onus, the person under review is taken to have engaged in inappropriate practice if he or she renders or initiates "a prescribed pattern of services". 17 Regulation 10 of the Health Insurance (Professional Services Review) Regulations 1999 ("the Regulations") provides that the rendering of 80 or more services on 20 or more days in a 12 month period constitutes a prescribed pattern of services. 18 The Full Court in Kelly v Daniel stated at [33], by reference to the remarks of the primary judge in that case, that Regulation 10 gives rise to what is called the "80/20" rule. Each of the present proceedings is concerned with an investigative referral and an adjudicative referral which arose under the 80/20 rule. The Decision in Kelly v Daniel 19 The essence of the Court's reasons on the power to make an investigative referral are to be found at [81]. There the Court said:- "We consider that the primary judge correctly held that the Commission is not entitled to make an investigative referral decision by reference to s 106KA(1) alone. That subsection is directed to the Committee, and not to the Commission. To the extent that the Commission may have regard to patterns of services in determining whether to make an investigative referral, that is but one of a number of matters that it may take into account. In our opinion the fact that Dr Daniel´s conduct had already been the subject of counselling and review by the Commission, and that no action had been taken to refer his case to the Director as a consequence, was plainly relevant to the exercise of the Commission´s discretion under s 86 to make an investigative referral. The Commission obviously did not take that matter into account. It instead proceeded upon the erroneous assumption that merely because there appeared to have been a breach of the 80/20 rule, it was required to make an investigative referral." 20 The power to make an adjudicative referral was dealt with at [94] as follows:- "In our view, the Director´s powers, once a breach of the 80/20 rule has been demonstrated to his satisfaction, are at least as extensive as those of the Commission. He is not obliged to refer the case to a Committee, although he may decide, ultimately, to do so. He must have regard to any submissions made to him under s 88(2) inviting him to dismiss the referral without setting up a Committee. He must take into account any relevant considerations that bear upon whether or not a Committee should be constituted. These would obviously include the fact that the Commission had counselled and reviewed the practitioner´s conduct, and that there had been no repetition of the breach of the 80/20 rule. 21 There was a third issue in Kelly v Daniel namely whether the Director had denied Dr Daniel procedural fairness by making an adjudicative referral without offering him an opportunity to enter into an agreement under s 92 of the Act. 22 Section 92 provides that the Director and the person under review may enter into an agreement under which the person acknowledges that he or she engaged in inappropriate practice and that certain specified action is to take effect. The action includes a reprimand by the Director, disqualification for a period of up to three years and the other matters specified in s 92(2). 23 As the Court said at [105], the Acting Director regarded it as a precondition to the exercise of his discretion for the person under review to be prepared to concede guilt of inappropriate practice or invite the Director to resort to s 92 of the Act. 24 The Court observed at [106] that there was nothing in the language of the section to support such a construction. Moreover, if that was how the Acting Director understood the section to operate he was required to afford Dr Daniel an opportunity to enter into such an agreement; see at [106]. Decisions since Kelly v Daniel 25 In Freeman v Health Insurance Commission [2004] FCA 453 ("Freeman"), North J dismissed an application for review of an investigative referral. 26 North J referred at [53] to the passage in Kelly v Daniel at [81] which I have set out above. 27 North J then said:- "The issue fatal to validity in Daniel was the failure of the Commission to take into account a relevant consideration, namely the fact that, apparently unknown to officers of the Commission responsible for making the referral, Dr Daniel´s conduct had already been considered and the issues resolved between other officers of the Commission and Dr Daniel. In order to rely on Daniel in this case, the applicant must point to some error of law in the decision to make the investigative referral. It is not enough that the Commission had regard only to the conduct falling within the 80/20 rule, unless, in so doing, the Commission failed to have regard to some other relevant matter, or made some other identified error of law. The applicant has not referred to any such relevant matter or error of law. Consequently, the decision in Daniel is of no assistance to the applicant in this case." 28 In Crowley v Holmes [2004] FCA 521 Sundberg J dismissed an application for interlocutory injunctive relief which sought to restrain the members of a Committee from proceeding with a hearing into the conduct of the applicant. 29 Sundberg J set out the passages from Freeman which I have quoted above. His Honour rejected at [10] the submission that the HIC had failed to take into account matters which were contended to be relevant considerations in making the investigative referral. 30 Sundberg J observed at [10] that, as was said in Freeman, the fact that the HIC had regard only to the conduct which fell within the 80/20 rule does not of itself show error of law. That is to say, it must be established that in doing so the HIC failed to take into account some other relevant matter or made some other identifiable error of law.

[21]

The grounds of review of the investigative referral 31 There are five grounds of review of the investigative referral stated in each of the applications. They are that, in each case, the HIC: (i) erroneously construed the Act as establishing a separate procedure for investigative referrals alleging conduct constituting a prescribed pattern of services within s 106KA of the Act; (ii) erroneously construed the Act as requiring it to make an investigative referral once it had identified a prescribed pattern of services; (iii) applied a policy of making an investigative referral once it had identified a prescribed pattern of services without regard to the merits of the case; (iv) failed to take into consideration all relevant conduct of the applicant over the referral period, including the fact that the applicant had been counselled and had reduced his rate of servicing and had, in the cases of Ho and Do, given undertakings pursuant to s 92 of the Act; and (v) failed to consider whether during the referral period the applicant might have engaged in inappropriate practice as defined in s 82 of the Act. The grounds of review of the adjudicative referral 32 There are nine grounds of review of the adjudicative referral stated in each application. They are that in each case Dr Kelly or Dr Holmes:- (i) erroneously construed the Act as establishing a separate procedure for investigative referrals alleging conduct constituting a prescribed pattern of services within s 106KA of the Act; (ii) erroneously construed the Act as allowing him to have regard only to the services included in the investigative referral; (iii) failed to consider how to investigate unconstrained by s 106KA the applicant's conduct in rendering services in the two years before the investigative referral; (iv) failed to consider whether during the referral period the applicant might have engaged in inappropriate practice as defined in s 82 of the Act; (v) failed to consider the applicant's conduct of his practice over the two years of the referral period before the investigative referral; (vi) failed to consider changes to the applicant's pattern of services which occurred during the referral period and after the services identified in the investigative referral; (vii) failed to have regard to the counselling of the applicant in March 2000 and his subsequent conduct, including, in the cases of Ho and Do, undertakings given by those doctors under s 92 of the Act; (viii) erroneously construed the Act as not requiring him to afford the applicant an opportunity to enter into an agreement under s 92 of the Act; and (ix) denied the applicant procedural fairness by making the adjudicative referral without affording the applicant an opportunity to enter into an agreement under s 92 of the Act. Other grounds of review 33 The applications also claim that the report of the Committee in each case was affected by jurisdictional error on various grounds. However, none of these was relied upon to support the orders for discovery. The classes of documents which are sought 34 The applicants in the matters of Oreb, Do and Ho seek five classes of documents as follows:- (i) Memoranda, file notes, diary entries, correspondence or other records concerning any review by HIC or its agents, committees or delegates or the Professional Review Branch of the applicant's rendering of Medicare services between January 1999 and 1 January 2002. (ii) Memoranda, file notes, diary entries, correspondence or other records of consideration and making of the decision by the HIC to make two enumerated investigative referrals. It should be noted that the first investigative referral ("the first referral") is not the subject of the application for review. Only the second investigative referral ("the second referral") is the subject of the application for review. (iii) Memoranda, file notes, correspondence or other documents recording the investigation by Dr Kelly or Dr Holmes recording the investigation of the first referral and the second referral and the consideration and making of the second referral. (iv) Memoranda, file notes, correspondence or other documents recording any consideration by Dr Kelly or Dr Holmes of whether the applicant would be offered an opportunity to negotiate an agreement under s 92 of the Act in relation to the first referral or the second referral. (v) Documents recording the general policies or procedures adopted or applied by Dr Kelly or Dr Holmes between 1 March 2001 and 1 March 2002 concerning the offering or negotiating of an agreement under s 92 of the Act and relevant to a referral of the type of the first referral or the second referral. 35 In the matter of Bartos , the applicant seeks each of the five classes of documents set out above and a sixth class of documents. 36 This is described as memoranda, file notes, diary entries or other documents recording or referring to any conversation between the applicant and the HIC or anyone acting on its behalf or acting in its office between 20 December 2000 and 9 April 2001. 37 The applicant in Ly seeks each of the six classes of documents set out above except that the dates of the conversations in the sixth class is specified as between 1 March 2001 and 1 March 2002. 38 The applicant in Ly also seeks a seventh class of document. This is described as all other pages of the document of which Exhibit AJM 4 to the affidavit of A J McCormick sworn 18 May 2004 provides page 9, and all emails and other documents concerning the creation, discussion or consideration of the document. Category 1 - Documents concerning review of services between January 1999 and January 2002 39 The further amended applications in each case do not seek judicial review of "any review" by the HIC or any of the applicants' rendering of Medicare services during this period. Nor is there any challenge to the conduct or any asserted decision of a case management committee. 40 That is sufficient to dispose of the first category. However, the effect of the applicants' submission was that this class of document was necessary to enable them to prove that the HIC had records, including records of counselling of the applicants, which it failed to take into account in both the investigative referral and the adjudicative referral. I reject that submission for a number of reasons. 41 First, the category of documents sought by the applicants extends to the consideration of a whole variety of circumstances. It is only those considerations which the decision-maker was bound to take into account under the Act which can be relied upon to make out such a ground of review; see Minister for Aboriginal Affairs v Peko Wallsend Ltd (1985-86) 162 CLR 24 at 39 (Mason CJ) and 56 (Brennan J). 42 Second, reasons have been supplied in accordance with the Act for each of the Investigative Referrals and the Adjudicative referrals. The considerations which the HIC or Dr Kelly or Dr Holmes did, or did not, take into account will appear from the reasons. Discovery is therefore unnecessary; Somerville at 53; Canwest at 3-6. 43 Third, insofar as the applicants rely on counselling by the HIC and any consequent reduction in their servicing rate, these matters are within their own knowledge and may be proved by them without the need for discovery. Category 2 - records of the making of the decision by the HIC of the first referral and the second referral 44 The first referral is not challenged. There is nothing in the case set forth in the further amended applications which suggest any possible relevance of these documents. 45 Nor can I see anything in the pleaded case which makes it necessary for the records of the second referral, that is to say the adjudicative referral, in respect of which each applicant seeks review, to be discovered. 46 Counsel for the applicant submitted that there must be internal records of the decision-making process which the applicants wish to use in order to prove the considerations which were not taken into account. 47 Whether or not such documents exist, it would be contrary to the principle which underlies the remarks of the Full Courts in Somerville and Canwest to order discovery of the documents. What was or was not taken into account will appear in the Investigative Review. There is nothing to suggest that the HIC's internal records are necessary. Category 3 - Documents recording the investigation of the first referral and the second referral by the Director or the Acting Director and his consideration of the making of the adjudicative referral 48 As I have already said, the first referral is not challenged. Discovery of these documents is therefore entirely unnecessary. 49 The other documents which are sought merely seek further detail of the reasons which have been given for the adjudicative referral which is under challenge. For the reasons which I have already given, I do not consider that these documents are necessary. Category 4 - whether the applicant would be offered the opportunity to negotiate an agreement under s 92 50 Each application now raises as a ground of review the contention that Dr Kelly or Dr Holmes erroneously construed the Act as not requiring him to afford the applicant such an opportunity. 51 In Kelly v Daniel the Full Court referred at [105] to the primary judge's finding as to the approach which Dr Kelly took to the construction of s 92. It would appear that there was evidence in that case of Dr Kelly's view on which the finding was based. Here there is no such evidence. 52 However, it does not seem to me to follow that it is necessary for the applicants to have discovery of all documents recording any consideration of whether each of the applicants would be offered an opportunity to negotiate an agreement. 53 The question of whether or not Dr Kelly or Dr Holmes wrongly construed the Act will be determined from the proper construction of the Act, the full terms of the adjudicative referral and any letter sent to the applicant inviting submissions on the referral including any submissions on s 92 of the Act. 54 Moreover, in the cases of Ho and Do the applicants allege that they gave undertakings so that the issue raised by this category does not arise in their applications. 55 Accordingly, it does not seem to me to be necessary for the applicants to have this category of document. I have come to this view notwithstanding the fact that there is no evidence from either Dr Kelly or Dr Holmes on this issue because it seems to me that the issue will turn on the matters to which I referred in [53]. Category 5 - General policies or procedures concerning the offering of a s 92 agreement 56 There is no allegation in any of the Further Amended Applications that the relevant respondents acted in accordance with a general policy concerning the offering or negotiating of an agreement under s 92 without regard to the merits of the case. Accordingly, this category of document is irrelevant and unnecessary. Category 6 - records of conversations between HIC and Dr Bartos and Dr Ly 57 Dr Bartos and Dr Ly have filed evidence of conversations with the HIC about counselling for their patient servicing levels and, apparently, of consequential steps taken by them to reduce their servicing levels. The evidence in each case seems to be limited to one conversation which took place at or about the time particularised in the relevant ground of review. The ground which is relied upon is failure to have regard to the counselling of the applicant and his subsequent conduct, namely reducing his servicing levels. 58 It follows from Kelly v Daniel that, depending upon when the conversation took place, the terms of it may well be relevant to the question of whether Dr Kelly or Dr Holmes failed to take into account a relevant consideration. 59 But it does not follow that the applicants should obtain discovery of the records of every other conversation during the specified period. Indeed, in my opinion those records are entirely irrelevant to the applications because no allegation about them is pleaded in any of the Further Amended Applications. 60 An issue does arise about the counselling conversations as pleaded but it is not necessary for the applicants to have discovery of the relevant respondent's records. This is because the applicants have already filed evidence of the conversations upon which they rely. 61 Dr Bartos 's evidence of the conversation is not disputed by the respondents who have not put on any evidence of a contrary version of the conversation. 62 The only evidence put on by the respondents which deals with Dr Ly's conversation is Dr Holmes' file note of his conversation with Dr Ly. This is contained in Ms McCormick's annexure "AJM 11" to the affidavit of 18 May 2004. Dr Holmes had not put on any sworn evidence of the conversation and counsel for the respondents in the matter of Ly informed me that this is the only record of the conversation. 63 It follows that there is no dispute about the conversation which took place in the Bartos matter. It also follows that even if there is a dispute about what was said to or by Dr Ly there are no other records held by the respondents and accordingly discovery is not necessary. Category 7 - Other pages of Annexure AJM 4 to the Affidavit of Ms McCormick 64 This category of document is sought by Dr Ly. However, counsel for the respondents in that matter informed me that there are no other pages to the document which comprises only the single page of the annexure. I accept, as I did in relation to the record of the conversation with Dr Ly, what I was told by counsel. Accordingly, no other pages will be produced even if I make an order and, accordingly, this category is also unnecessary. 65 Dr Ly also seeks documents concerning the creation, discussion or consideration of the document but there is nothing in the Further Amended Application which suggests that those documents have any bearing upon the issues in the case. Conclusion and Orders 66 It follows that I propose to make orders in each case that the motion be dismissed with costs. I certify that the preceding sixty-six and one (66) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jacobson.

Oreb v Professional Services Review Committee No 298

At a glance

Court

Decision date

Before

Source

Judgment (28 paragraphs)

Parties

Legislation Cited (4)

Cases Cited (5)