[1992] AATA 205; (1992) 28 ALD 25

Justice D F O'Connor(1) (President), Dr P A Staer(1) (Member) and Associate Professor S D Hotop(1) (Member)

National Health Act - health insurance - health benefits fund - change to rules of registered organization - in vitro fertilisation - imposition of five year waiting period for supplementary benefits - declaration by Minister under s78(4)(b) - whether rule change "imposes an unreasonable or inequitable condition affecting the rights of any contributors" - earlier declaration by Minister under s78(4)(a) set aside by Tribunal - whether that decision gave rise to cause of action estoppel (res judicata) or issue estoppel - meaning of "unreasonable or inequitable" - statutory unreasonableness - "Wednesbury unreasonableness" not applicable - Tribunal's powers on review - whether Tribunal's function to determine appropriate waiting period - whether Tribunal should express view on appropriateness of Minister giving direction under s73BE - decision affirmed.

National Health Act 1953 sections 4, 73BA, 73BE, 78, 105AB, Schedule 1

Administrative Appeals Tribunal Act 1975 sections 37, 43

Administrative Decisions (Judicial Review) Act 1977 sections 5, 6

Bogaards v McMahon [1988] FCA 161; (1988) 80 ALR 342

Re Quinn and Australian Postal Corporation (unreported, AAT Decision No 8047; 18 June 1992)

Commonwealth v Sciacca (1988) 17 FCR 476

Midland Metals Overseas Ltd v Comptroller - General of Customs (1991) 30 FCR 87

Re Hopper and Australian Meat and Live-stock Research and Development Corporation (1990) 11 AAR 329

Re Petrou and Australian Postal Corporation (unreported AAT decision, N91/528; 24 January 1992)

Thrasyvoulou v Secretary of State for the Environment (1990) 2 AC 273

Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1947] EWCA Civ 1; (1948) 1 KB 223

Curragh Coal Sales Co Pty Ltd v Wilcox [1984] FCA 168; (1984) 1 FCR 461

Re W (An Infant) (1971) AC 682

Thornton v Repatriation Commission [1981] FCA 76; (1981) 52 FLR 285

Gregory v Philip Morris Ltd (1988) 80 ALR 455

Re Hayes' Will Trusts (1954) 1 WLR 22

This is an application by The Hospital Benefit Fund of Western Australia Inc. ("the applicant") for review of a decision of a delegate of the Minister for Health, Housing and Community Services. That decision, dated 1 October 1991, consisted of a declaration under s78(4)(b) of the National Health Act 1953 (Cth) ("the Act") that a change to the rules of the applicant "shall not be taken to have come into operation."

2. The applicant was represented by Mr D Solomon, Barrister and Solicitor, and the Department of Health, Housing and Community Services ("the respondent") was represented by Mr S Bhojani of the Australian Government Solicitor.

3. At the hearing oral evidence was given by the following witnesses:

Mr I D Bentley, Special Projects Officer of the applicant;

Dr B S Bellinge, Program Manager of Concept Fertility Centre;

Mr M W Keyt, Business Manager and Administrator of Pivet Medical Centre;

and

Dr T D Thomas, Medical Director of Concept Fertility Centre.

Mr Bentley was called by the applicant, and Dr Bellinge, Mr Keyt and Dr Thomas were called by the respondent.

4. The Tribunal had before it, in addition to the "T documents" lodged pursuant to s37 of the Administrative Appeals Tribunal Act 1975 (Cth) ("the AAT Act"), a number of documentary exhibits. The applicant tendered the following documents:

A. S Webb, in Vitro Fertilisation and Related Procedures in Western

Australia 1983-1987 (April 1988)("the Webb Report");

B. Letter, dated 6 March 1992, from Professor C.A. Michael, Professor

of Obstetrics and Gynaecology, The University of Western Australia;

C. Computer printout, dated 10 March 1992, detailing benefits paid by

the applicant in respect of a particular case involving in vitro

fertilisation treatment;

D. Extract from the Minutes of a meeting of the Board of the applicant

held on 4 May 1989;

E. Newspaper article, "Public IVF unit proposal 'unnecessary, costly'",

The West Australian, 22 March 1990;

F. "HBF Staff Bulletin" dated 31 July 1989;

G. Extract from "HBF Circular No 1";

H. Outline Evidence of Ian David Bentley;

I. The Hospital Benefit Fund of Western Australia Incorporated -

Regulations;

Document headed "Differences between Basic Table Benefit and

Supplementary Benefit";

K. Document headed "Summary of Benefit for Hospital Treatment - Average

Claim per Patient";

L. Supplementary Outline of Evidence of Ian David Bentley;

M. Department of Community Services and Health, Submission to the

Senate Select Committee on Health Legislation and Health Insurance,

Part Two: Health Insurance, Chapter 3 (October 1989);

N. Document headed "Precis of Meeting between R J Stewart, J L Yovich

and B N Lawrence on Monday 7 August 1989" and letter from B N

Lawrence dated 3 August 1989.

O. Document headed "Estimated HBF Benefit for IVF Treatment and

Confinement Based on Actual 1988 Data and Report from Dr J Yovich";

P. "Lotus Leaf"; newsletter of Lotus Fertility Support Incorporated.

Fifth issue, December 1991.

5. The respondent tendered the following documents:

1. Document headed "Insured Patients Fee Schedule - 1st September

1991";

2. Outline of Evidence of Bruce Bellinge;

3. Strategic Planning Institute, Report to Concept Fertility Centre -

Patient Survey (September 1989);

Australian Institute of Health, National Perinatal Statistics Unit,

Assisted Conception - Australia and New Zealand 1989 (1991);

5. Document headed, "King Edward Memorial Hospital - Length of Stay";

6. Pivet Medical Centre, Patient Statistics 1989-1990, dated 18 March

1992;

7. Witness Statement - Dr Terrence Thomas.

6. The applicant is a registered organization under Part VI of the Act for the purpose of carrying on the business of health insurance. By letter dated 20 June 1989 the applicant notified the respondent, as required by s 78(1)(c) of the Act (see paragraph 7. below), of changes to its rules (referred to by the applicant as "regulations") which had been made on 13 June 1989 and which were to take effect on 1 July 1989.

7. The major change was the addition of paragraph (e) to Regulation 24. Paragraph 24(e) reads as follows:

"Notwithstanding anything herein to the contrary, Basic Hospital

Benefits only shall unless and to the extent the Board in its

absolute discretion otherwise determines be paid:

(i) in respect of In-Vitro Fertilisation cases, unless the

Contributor has been a contributor to a table providing

Intermediate Hospital Benefits or Top Hospital Benefits for a

continuous period of five years prior to commencement of the

programme."

8. There were also some consequential amendments to the applicant's rules, including the insertion of the following definition of the expression "In-Vitro Fertilisation case" in Regulation 2:

"'In-Vitro Fertilisation case' means all aspects of a programme of

in-vitro fertilisation including treatment leading up to and during

pregnancy, confinement and neo-natal care for any baby born as a

result of the programme."

9. The term "Contributor" is defined by Regulation 2 to mean "a Contributor to the Health Benefits Fund conducted by (The Hospital Benefit Fund of Western Australia Inc.) ... a person who pays contributions to the Health Benefits Fund or on whose behalf contributions are paid to the Health Benefits Fund."

10. The effect of the change to the applicant's rules was that contributors would only become entitled to supplementary hospital benefits in respect of in vitro fertilisation ("IVF") hospital treatment if they had been paying contributions in accordance with a supplementary hospital benefits table for a period of at least five years ("waiting period") immediately preceding the commencement of such treatment.

11. Section 78 of the Act relevantly provides:

"(1) If, after the registration of an organization under this Part,

the registered organization changes:

...

(c) the rules of the organization;

the registered organization shall, within 7 days after the change is

made, furnish to the Secretary notification, in writing in a form

approved by the Minister, of the change.

...

(4) Where the Minister is of the opinion that a change:

(a) would or might result in a breach of this Act or of a condition

of registration of an organization;

(b) imposes an unreasonable or inequitable condition affecting the

rights of any contributors; ...

...

the Minister may, by declaration in writing, declare that the change

shall not be taken to have come into operation.

..."

12. The term "contributor" is defined by s 4(1) of the Act to mean, "in relation to a health benefits fund, a medical benefits fund or a hospital benefits fund conducted by a registered organization, ... a person who is a contributor to that fund in accordance with the rules of that organization;".

13. By s73BA of the Act the registration of an organization as a registered health benefits organization is deemed to be subject to the conditions set out in Schedule 1 to the Act. Schedule 1 contains a number of paragraphs of which paragraphs (j) and (k) are relevant for present purposes. These paragraphs provide:

"(j) Except in a case to which sub-paragraph (k)(i) applies, where

the rules of the organization provide for a waiting period with

respect to contributors for benefits in accordance with a basic

table (whether or not modified by an election of the kind

referred to in the condition set out in paragraph (ba)), that

waiting period will not exceed -

(i) in respect of a matter related to an obstetric

condition - 9 months; or

(ii) in respect of any other matter - 2 months.

(k) Where the rules of the organization provide for a waiting

period in relation to contributors for benefits in accordance

with a basic table (whether or not modified by an election of

the kind referred to in the condition set out in paragraph

(ba)) or a supplementary hospital table in respect of

pre-existing ailments, being ailments of a kind that are

determined by the Minister by writing signed by him, to be

ailments to which this condition applies -

(i) the waiting period in relation to a contributor for

benefits in accordance with a basic table (whether

or not modified by an election of the kind referred

to in the condition set out in paragraph (ba)) shall

not exceed the period of 12 months commencing on the

date on which the contributor commenced to

contribute for benefits in accordance with that

basic table; and

(ii) the waiting period in relation to a contributor for

benefits in accordance with a supplementary hospital

table shall not exceed the period of 12 months

commencing on the date on which the contributor

commenced to contribute for benefits in accordance

with that supplementary hospital table."

14. On 25 March 1990 a delegate of the Minister made a declaration under s78(4)(a) of the Act that he was of the opinion that the change to the applicant's rules, by the addition of Regulation 24(e) and the consequential amendments to Regulation 2, contravened paragraph (k) of the Conditions of Registration set out in Schedule 1 to the Act and that the change "shall not be taken to have come into operation". The applicant applied to the Tribunal for a review of that decision. Following the holding of a preliminary conference under s34 of the AAT Act at which the parties reached agreement, the Tribunal decided, on 19 August 1991 (Re The Hospital Benefit Fund of Western Australia Inc and Secretary, Department of Community Services and Health (No. W91/88)) ("Matter No. W91/88"), to set aside that decision, but "without prejudice to the respondent's right to make a further declaration under s78(4)(b) of the National Health Act 1953 in respect of the applicant's rule 24(e)". The basis on which the parties reached agreement and on which the Tribunal set aside the declaration under s78(4)(a) of the Act was that the condition of infertility was not a "pre-existing ailment" for the purposes of paragraph (k) in Schedule 1 to the Act and, accordingly, Regulation 24(e) was not caught by paragraph (k).

15. On 1 October 1991 a delegate of the Minister made a declaration under s78(4)(b) of the Act that the change to the applicant's rules, by the addition of Regulation 24(e) and the consequential amendments to Regulation 2, "shall not be taken to have come into operation" because he was of the opinion that the change imposed an "unreasonable and (sic) inequitable condition affecting the rights of contributors". The applicant now applies to the Tribunal, pursuant to s105AB(5) of the Act, for a review of that decision.

16. Before considering the evidence and the substantive issues in this matter it will be convenient to deal briefly with a submission made by Mr Solomon, for the applicant, that raises the question whether a decision of the Tribunal can give rise to cause of action estoppel (or res judicata) and issue estoppel in a subsequent proceeding before the Tribunal. Mr Solomon submitted that the Tribunal, in the present matter, was estopped from making a decision which conflicted with its earlier decision in Matter No. W91/88 (see paragraph 9. above). He also submitted that the Tribunal, having decided the earlier matter, was functus officio and could not now review or reconsider that decision. Mr Solomon further submitted that the doctrine of issue estoppel was applicable to decisions of the Tribunal.

17. As regards the doctrine of res judicata, or cause of action estoppel, the Federal Court of Australia (Pincus J.) has held that the doctrine is applicable to a decision of the Tribunal - even where, as in Matter No. W91/88, the decision is made by consent: Bogaards v McMahon [1988] FCA 161; (1988) 80 ALR 342. That view was very recently approved unanimously by the Tribunal which was constituted by three members, including the President, O'Connor J., and should now be regarded as settled: see Re Quinn and Australian Postal Corporation (Decision No. 8047; 18 June 1992). In the present case, however, the application of that doctrine results only in the conclusion that the Tribunal, when it decided Matter No. W91/88, was functus officio in relation to that matter and that the Tribunal has no power to review or reconsider that decision in the present proceedings.

18. In these proceedings, the Tribunal is called upon to review a different decision from that reviewed in Matter No. W91/88. Whereas in that matter, the decision under review was a declaration, under s78(4)(a) of the Act, that Regulation 24(e) of the applicant's rules shall not be taken to have come into operation because it contravened paragraph (k) in Schedule 1 to the Act, in the present proceedings the decision under review is a declaration, under s78(4)(b) of the Act, that the same rule (or "regulation") shall not be taken to have come into operation because it imposed an "unreasonable and (sic) inequitable condition affecting the rights of contributors". This distinction is, indeed, acknowledged in the terms of the Tribunal's decision in Matter No. W91/88, setting aside the declaration made under s78(4)(a) of the Act, which was expressed to be "without prejudice to the respondent's right to make a further declaration under s78(4)(b) of the ... Act ... in respect of the applicant's rule 24(e)." Accordinly, the Tribunal decides that it does have jurisdiction to review the declaration made under s78(4)(b) of the Act.

19. As regards issue estoppel, Mr Solomon submitted that the following issues were necessarily determined by the Tribunal in reaching its decision in Matter No. W91/88, namely, that:

(a) the condition of infertility is not a "pre-existing ailment"

for the purposes of paragraph (k) in Schedule 1 to the Act;

and

(b) the prescription, in the applicant's rules, of a waiting period

for supplementary table benefits in respect of a condition

which is not a "pre-existing ailment" does not constitute a

breach of the Act.

20. There have been dicta in a number of recent decisions of the Federal Court of Australia on the general question of the applicability of the doctrine of issue estoppel to decisions of administrative bodies and tribunals, including this Tribunal: see, for example, Commonwealth v Sciacca (1988) 17 FCR 476 at 480; Midland Metals Overseas Ltd v Comptroller-General of Customs (1991) 30 FCR 87 at 96-98. However, none of these dicta has dealt with the specific question whether a decision of this Tribunal can give rise to issue estoppel in a subsequent proceeding before the Tribunal. In Bogaards v McMahon (supra) Pincus J. held that a decision of the Tribunal gave rise to cause of action estoppel in a subsequent proceeding before the Tribunal. Although he considered it inappropriate in the circumstances of that case to decide whether the same principle applied to issue estoppel, he appeared to favour that approach (supra, at 351). There have been conflicting decisions of the Tribunal on this specific question in recent years. In Re Hopper and Australian Mear and Livestock Research and Development Corporation (1990) 11 AAR 329 Deputy President Thompson decided that issue estoppel applied, but in Re Petrou and Australian Postal Corporation (No. N91/528; 24 January 1992) Senior Member McGirr decided that it did not. However, in the very recent decision of Re Quinn and Australian Postal Corporation (supra) the Tribunal (O'Connor J. presiding) unanimously supported the view that a decision of the Tribunal will give rise to issue estoppel in a subsequent proceeding before the Tribunal. The Tribunal was of opinion that the application of the doctrine of issue estoppel followed logically from the application of the doctrine of cause of action estoppel: see Thrasyvoulou v Secretary of State for the Environment (1990) 2 AC 273. This matter also should now be regarded as settled.

21. The application of the doctrine of issue estoppel in respect of the Tribunal's decision in Matter No. W91/88 does not, however, assist the applicant's case in the present proceedings for two reasons: first, the respondent does not dispute the finding that the condition of infertility is not a "pre-existing ailment" for the purposes of paragraph (k) in Schedule 1 to the Act; and, secondly, the Tribunal's decision in Matter No. W91/88 necessarily involves a determination only that Regulation 24(e) of the applicant's rules did not contravene paragraph (k) in Schedule 1 to the Act - it did not necessarily involve a broader determination that Regulation 24(e) did not constitute a breach of the Act as a whole.

22. The Tribunal now turns to the evidence in this matter. The first witness was Ian David Bentley, who was called by the applicant. Mr Bentley stated that, in his capacity as Special Projects Officer of the applicant, his primary responsibility related to the applicant's rules ("regulations") and, in particular, ensuring that they conformed with the Act.

23. Mr Bentley referred to the "community rating principle" which applied to the private health insurance system in Australia. He explained that, under this principle, all members of a health insurance fund pay the same contribution rates for the same level of benefits coverage irrespective of age, sex, state of health, level of risk demonstrated from previous claims, or other risk factors. He also explained the "known illness principle" which he described as a basic tenet of health insurance, namely, the principle that persons ought not to be able to insure in respect of an illness from which they are already aware that they are suffering.

24. Mr Bentley stated that, in Western Australia, IVF treatment, prior to hospital confinements following birth, is not available in public hospitals and, accordingly, such treatment leads to claims for supplementary benefits because it necessarily occurs in private hospitals. Furthermore, hospital confinements following IVF treatment almost always involve claims for supplementary benefits also since the patients will almost certainly have insured for supplementary benefits to cover their pre-confinement IVF treatment.

25. During the course of his evidence Mr Bentley referred to statistics which indicated that whereas only 40% of the general population in Western Australia have private health insurance, at least 97.2% of Western Australian IVF patients have such insurance (see the Webb Report (Exhibit A), p 181). The Webb Report, however, pointed out (ibid) that, with the increasing number of couples who come from overseas seeking IVF treatment and who are uninsured, the overall proportion of IVF patients who had private health insurance was 88% in 1986.

26. Mr Bentley testified that the level of supplementary benefits paid by the applicant for hospital confinements is substantially greater in the case of IVF patients as compared with standard maternity patients because of various factors, such as the higher incidence of multiple births, the greater need for special care, and generally longer confinement periods. He referred to a graph he had prepared (tendered in evidence as Exhibit K) which summarised the average benefit claim per patient for hospital treatment in respect of the IVF cycle and subsequent confinement. The graph indicated that the major cost to the applicant involves the payment of supplementary benefits for neo-natal intensive care. According to this graph, the total minimum expense for IVF treatment and confinement as a private patient is $7,000; whereas, in the case of confinement as a public patient in a public hospital following IVF treatment, the total minimum expense is $3,240. Mr Bentley testified that the cost of contributing to the supplementary benefits table, in respect of family membership, for a period of five years was approximately $6,500.

27. Mr Bentley stated that the applicant's decision to introduce a waiting period of five years for supplementary benefits for IVF treatment was not based on actuarial calculations of the likely future costs of such treatment. He added that the applicant had not kept records of the costs of providing supplementary benefits for IVF treatment, although a computer printout of the most expensive individual case (which involved the premature birth of quintuplets and the payment of benefits totalling $64,673.10) was tendered in evidence (Exhibit C).

28. Mr Bentley summarised the main factors that were relevant to the applicant's decision to introduce a five year waiting period for supplementary benefits for IVF treatment as follows:

. the mean period of known infertility before admission to an IVF

programme being in excess of five years;

. the capacity for, and the actual, abuse of the private health

insurance system, if there were no such waiting period, by

persons taking out supplementary insurance cover shortly before

admission to an IVF programme;

. the mean age of IVF patients;

. the level of expense to the applicant of IVF treatment;

. the fact that IVF treatment is voluntary or elective;

. principles of fairness and equity according to which members of a

health insurance fund should pay reasonable contributions for the

substantial benefits received by them in respect of IVF treatment

which is both expensive and voluntary;

. apart from pre-confinement IVF treatment, uninsured patients can be

treated in respect of confinements following IVF treatment as public

patients in public hospitals;

. the legislature did not intend that the supplementary benefits table

be regulated to the same extent as the basic benefits table;

. the community rating principle;

. the provision in Regulation 24(e) of a discretion in the Board of

applicant to deal with appropriate cases.

29. Mr Bentley said that the alternative to introducing the five year waiting period was higher contribution rates for all members, but that the applicant had rejected this alternative as being unfair and inequitable to existing members. He went on to say, however, that no actuarial calculations had been made by the applicant regarding the necessary increase in the level of contribution rates if that alternative were to be implemented. Mr Bentley also testified that, in his opinion, the five year waiting period was consistent with the known illness principle and the community rating principle (see paragraph 18. above).

30. Mr Bentley explained how discretionary provisions in the applicant's rules, similar to that contained in regulation 24(e), operate in practice. He said that the matter is first considered by the applicant's claims officer who has delegated authority to exercise discretion to pay, but not to refuse to pay, claims. If the claims officer is of opinion that the claim should not be paid, the matter is referred to an external medical practitioner appointed by the Board of the applicant. If that medical practitioner recommends that the claim not be paid, then payment of the claim may be refused, subject to the right of the member to have the matter determined by an independent arbitrator, nominated by the Australian Medical Association, at the applicant's expense. Mr Bentley acknowledged, however, that the applicant has not published any policy on the exercise of such discretions and that contributors are not necessarily aware of the procedure to resolve disputes in relation to claims for benefits.

31. Mr Bentley testified that the five year waiting period prescribed by Regulation 24(e) of the applicant's rules had not been applied to members who had commenced, or had been referred by a medical practitioner to, an IVF programme as at 1 July 1989 - the date on which Regulation 24(e) commenced to operate.

32. The Tribunal next heard oral evidence from Dr Bruce Bellinge, who was called by the respondent. Dr Bellinge testified that he had been involved with IVF and related infertility treatments since 1981. He said that, in his capacity as Program Manager of Concept Fertility Centre - a private section of King Edward Memorial Hospital for Women, in Perth - he was responsible for the embryo laboratory and the general management of the Centre.

33. Dr Bellinge testified that since 1989 the frequency of high number multiple births resulting from IVF treatment had "dramatically" decreased as a result of improvements in IVF technology and the implementation of a recommendation of the Fertility Society of Australia that a maximum of three embryos be used in any IVF treatment cycle. He added that technological improvements had also had an effect in reducing the total cost of IVF treatment - so much so that statistical data relating to the costs of IVF treatment during the period 1983-1987 would no longer be valid. He provided statistics from Concept Fertility Centre which showed that the average cost to the applicant for IVF treatment decreased from $1,134.04 per IVF cycle in 1989 to $992.51 per IVF cycle in 1990. (The corresponding figures for gamete intra fallopian transfer ("GIFT") - a more modern and more successful form of assisted reproductive technology ("ART") - were $745.60 and $668.67 respectively.) Dr Bellinge testified that Concept Fertility Centre, under its arrangement with King Edward Memorial Hospital in which it is located, provides treatment for 22 IVF cycles per year to public patients free of charge. He also testified that, in 1990, 87.8% of the Centre's patients were covered by private health insurance, while 12.2% were uninsured.

34. Dr Bellinge testified that the normal definition of infertility is a failure to conceive within a twelve months period of unprotected intercourse. He said that, in the case of 50% of "normal" couples, pregnancy would be achieved within three months of unprotected intercourse and in 85% of cases pregnancy would occur within twelve months of unprotected intercourse - thereby implying that there is an infertility rate of up to 15% among the general population. He added that over 75% of the Centre's patients were over 30 years of age, 30% were over 35 years of age, and that the chances of a woman's conceiving dropped quite significantly after the age of 35-37 years.

35. Dr Bellinge cited statistics compiled by the Strategic Planning Institute in a Report to the Concept Fertility Centre, dated September 1989 - which was tendered in evidence (Exhibit 3) - relating to the duration of infertility before patients sought IVF treatment. According to these statistics, 95.4% had been trying to conceive for at least two years. The largest proportion (54.1%) had been trying to conceive for between two and five years.

36. The respondent next called Mr Maxim Keyt, Business Manager of Pivet Medical Centre, as a witness. Pivet Medical Centre is located within Cambridge Private Hospital in Perth and is the only other provider - that is, other than Concept Fertility Centre - of IVF treatment and other forms of ART in Western Australia. Mr Keyt provided statistics - which were tendered in evidence (Exhibit 6) - regarding patients at Pivet Medical Centre in the years 1989 and 1990. According to these statistics, the average age of patients was 33 years and 90% of patients had private health insurance cover. Mr Keyt testified that Pivet Medical Centre was in the process of reducing costs for IVF treatment and endeavouring to reduce the incidence of multiple births. He informed the Tribunal that, whereas in 1988 multiple births at Pivet Medical Centre included one set of quintuplets and four sets of quadruplets, in 1989 and 1990 there were no multiple births of that order and there was only one set of triplets born there in each of those years.

37. The final witness called by the respondent was Dr Terrence Thomas, Medical Director of Concept Fertility Centre. Dr Thomas testified that he had been treating infertility in women since 1978, first at Royal Perth Hospital and, since 1981, at Concept Fertility Centre where he is presently responsible for overseeing the medical and clinical aspects of the Centre's ART programme.

38. Dr Thomas explained that IVF is now merely one form of ART. He said that changes in ART are continuous and include, inter alia, GIFT. He added that ART practitioners are working towards greater simplification of techniques with consequent reductions in costs.

39. Dr Thomas told the Tribunal that a multiple pregnancy will involve higher hospital costs because of the possible need for the mother to enter hospital earlier, and the likelihood of premature births requiring intensive care hospitalisation. He added that, in the case of very early premature babies (associated with high number multiple pregnancies), there will be a need for more expensive intensive care, for a longer period, than in the case of lower number multiple births and singleton births.

40. Dr Thomas testified that the adoption of the recommendation of the Fertility Society of Australia, that a maximum of three embryos be used in any IVF treatment cycle, in 1989 has resulted in a markedly lower incidence of high number multiple births in Western Australia. He said that ART still produces some triplet pregnancies, and twins, but that most ART pregnancies result in singleton births. He said that the occurrence of a quintuplet pregnancy in 1988 was extremely rare and, to his knowledge, the only such pregnancy reported in Australia.

41. Dr Thomas testified that a "universally accepted definition of infertility is the failure to conceive after twelve months of unprotected sexual intercourse". He said that couples will normally not be aware of their infertility (except where confirmed by testing) until the expiration of the period of twelve months of failure to conceive. At that time, such couples may seek confirmation of their infertility and undergo treatment according to the identified cause of the infertility. He said, however, that it is unlikely that a patient will know, at this stage, whether she might be a future ART candidate.

42. Dr Thomas testified that a woman's fertility decreases with age and that the chances of achieving pregnancy decline gradually and, after the age of 37 years, dramatically. He said that the age of patients at Concept Fertility Centre ranges from 23 to 42 years.

43. Dr Thomas testified that, in the case of a patient with an absolute cause of infertility (e.g. fallopian tubes damages beyond repair), to require her to wait and try techniques other than IVF would be "cruel". He elaborated that infertility is a very distressing condition - indeed, the most distressing condition that can affect a couple aged in their thirties. He added that there was a high degree of anxiety amongst such patients and that the higher the level of anxiety in the patient the lower the success rate with ART.

44. When questioned regarding the appropriateness of using the statistical mean period of infertility in determining the qualification for supplementary benefits for IVF treatment, Dr Thomas described the mean period as a meaningless or nonsensical statistic.

45. Dr Thomas said that although the Webb Report was a valuable document, it was peculiar to Western Australia and the circumstances which prevailed there during the period 1983-1987. He said that there had been marked changes in ART techniques since that time, leading to a reduction in the incidence of high number multiple births and in the time spent in hospital during the IVF treatment phase, and accordingly resulting in a reduction in the costs of IVF treatment.

46. Dr Thomas referred to statistics relating to the duration of infertility of IVF patients, 1979-1988, compiled by the Australian Institute of Health, National Perinatal Statistics Unit (document T9 in the T documents). Corresponding statistics for the period 1979-1989 were also tendered in evidence (Exhibit 4). According to these statistics, which covered all IVF and GIFT programmes in Australia and New Zealand during the relevant period, the duration of infertility was two years or more in relation to approximately 98% of IVF patients. In respect of approximately 24% of IVF patients, the duration of infertility was 2-3 years; and in respect of approximately 31%, the period was 4-5 years.

47. Dr Thomas said that the duration of infertility in these statistics referred to the period of actual infertility, not the period of known infertility. He said that, generally, the period of known infertility would be at least twelve months shorter than the period of actual infertility because couples are generally unaware of their infertility unless they fail to conceive during a period of twelve months of unprotected intercourse.

48. Dr Thomas referred to a letter, dated 6 March 1992, from Professor C A Michael, Professor of Obstetrics and Gynaecology at The University of Western Australia, which had been tendered in evidence (Exhibit B). In that letter, Professor Michael had expressed the opinion that "there is no reason to practise IVF as a treatment modality for infertility immediately, if conception is not achieved." Professor Michael went on to say, however, that there are exceptions to this statement and that the two most likely situations where a delay in embarking on IVF treatment would not be reasonable are as follows:-

"1. Circumstances where pregnancy cannot occur, or very (sic)

unlikely to occur, as in bilateral tubal disease.

2. The circumstances of age may make the need for definitive

treatment necessary, and this would include unexplained

infertility or infertility resulting from say endometriosis in

the group of women over 35 years of age."

"In the case of subfertility or unexplained infertility in younger

women, a delay in embarking on IVF treatment and undertaking

alternative management is reasonable."

49. Before proceeding to consider the parties' substantive submissions, the Tribunal proposes to deal briefly with an issue raised by Mr Solomon concerning its powers on review. Some of the oral and documentary evidence before the Tribunal concerned developments in the field of ART which have taken place since 1 July 1989 - the date on which the change to the applicant's rules by the addition of Regulation 24(e) took effect. Mr Solomon submitted that evidence of such developments since 1 July 1989 is relevant "only to the extent that it establishes what the position was at the time the rule change took effect on 1 July 1989." He submitted that such evidence, "(i)n so far as it seeks to establish changes in circumstances which have occurred after that date, ... is irrelevant" and should not be taken into account by the Tribunal in the present review proceedings.

50. It is axiomatic that the question for the Tribunal in review proceedings before it is whether the decision under review was, on the material before the Tribunal, the correct or preferable one: Drake v Minister for Immigration and Ethnic Affairs (1979) 46 FLR 409 at 419. In the present case the decision under review is the decision of the delegate of the Minister for Health, Housing and Community Services, dated 1 October 1991, declaring, under s78(4)(b) of the Act, that the relevant change to the applicant's rules "shall not be taken to have come into operation". The question for the Tribunal in these proceedings is, therefore, whether, on the material before it, that decision was the correct or preferable one at the time when it was made: Freeman v Secretary, Department of Social Security [1988] FCA 294; (1988) 87 ALR 506 at 509. Accordingly, the Tribunal has taken into account the whole of the evidence presented to it for the purpose of deciding this application for review.

51. Mr Solomon submitted that the Tribunal should take into account the factors outlined by Mr Bentley (see paragraph 23. above) in deciding whether to affirm or set aside the decision under review. Mr Bhojani submitted that a number of additional factors should be taken into account by the Tribunal. These factors may be summarised as follows:

. Regulation 24(e) discriminates against infertile couples;

. Regulation 24(e) singles out IVF treatment as compared with other

treatment modalities for overcoming infertility;

. improvements in IVF technology and procedures in recent years;

. the anxiety suffered by infertile couples;

. the effect of age on fertility;

. the extent of cases where it may be medically inappropriate to delay

IVF treatment.

The Tribunal makes the following comments with respect to each of these factors.

52. Mr Bentley testified that the applicant's decision to introduce a waiting period of five years in order to qualify for supplementary benefits for IVF treatment was based on the finding of the Webb Report (Exhibit A, Summary, para A, pp 31,32) that the mean duration of infertility before commencement of IVF treatment was 5.3 years. There was much discussion by the witnesses and in the submissions to the Tribunal regarding the meaning of that statistic and the distinction between the "period of known infertility" and the "duration of infertility". It was clear from Mr Bentley's evidence that he and the applicant understood the mean period of 5.3 years to be the mean period of known infertility and he said that, consistently with the known illness principle, it was reasonable for the applicant to impose a waiting period of approximately that duration before a contributor became eligible to receive supplementary benefits for IVF treatment. On the other hand, it was clear from the evidence of both Dr Bellinge and Dr Thomas that the period of known infertility will normally be different from the period of actual infertility (i.e. the duration of infertility). Both medical witnesses testified - and this evidence was uncontroverted - that the medical definition of infertility was a failure to conceive after a period of twelve months of unprotected sexual intercourse and that, accordingly, most couples would not be aware of their infertility until the end of that period at the earliest. Dr Thomas testified that, for this reason, the period of known infertility in the case of most couples would be at least twelve months shorter than the duration of infertility.

53. The Webb Report itself makes clear that the duration of infertility is not the same as the period of known infertility. At p 31 of the Report it is stated:

"There are problems with assigning a duration to infertility. The

couple may only slowly become aware of their infertility.

Infertility duration usually relates to how long the couple have

unsuccessfully had unprotected intercourse."

The statistic provided by the Webb Report was not challenged by the respondent, although the respondent's interpretation of that statistic differed from that of the applicant as represented by Mr Bentley. The Tribunal accepts the statistic of 5.3 years as the mean duration of infertility before admission to an IVF programme in Western Australia. The Tribunal also accepts, however, that the mean period of known infertility before such admission is at least twelve months shorter than the mean duration of infertility. The Tribunal has taken these factors into account in deciding the question at issue in these proceedings.

The capacity for abuse of the private health insurance system

54. A unique feature of pre-confinement IVF treatment (that is, IVF cycles whereby eggs are collected, fertilised and implanted) in Western Australia, according to the evidence, is that such treatment is not available in public hospitals. However, hospital confinement as a result of any pregnancy achieved by means of IVF treatment may be as a private or a public patient. Mr Bentley testified that, because contributors will have insured to cover the cost of IVF cycle treatment, it was almost certain that their subsequent hospital confinement would be as a private patient thereby attracting supplementary hospital benefits. He told the Tribunal that the applicant was anxious to minimise abuse of the private health insurance system by persons becoming contributors only shortly before commencing IVF treatment for the "obvious sole purpose of obtaining substantial benefits as a result". This was confirmed by an extract from the Minutes of a meeting of the Board of the applicant held on 4 May 1989, which was tendered in evidence (Exhibit D).

55. In the Australian health insurance system waiting periods, over and above the general minimum period of two months for basic table benefits, apply in certain circumstances. In particular there is a waiting period of nine months in respect of obstetric claims and a waiting period of twelve months for claims in respect of "pre-existing ailments". These waiting periods are authorised by paragraphs (j) and (k), respectively, in Schedule 1 to the Act (see paragraph 8. above). Such waiting periods are essentially designed to prevent abuse of the system.

56. The respondent does not dispute that a waiting period is appropriate in respect of IVF treatment. What is in dispute is whether the imposition of a waiting period of five years has an unreasonable or inequitable effect on the rights of any contributors to the health benefits fund conducted by the applicant. That is, of course, the issue for determination in these proceedings.

57. According to the Webb Report (Exhibit A, p 30), the mean age of patients admitted to an IVF programme in 1986 (the latest year of the study) was 32.6 years. Mr Bentley stated that this statistic demonstrated that most IVF patients have been of insurable age (17 years) for many years and that a waiting period of five years would cause no prejudice to IVF patients who are "genuine users of private health insurance" and will therefore have been insured for at least that period of time. In relation to this matter the Tribunal merely observes at this point that the question for determination in these proceedings is whether the imposition of a waiting period of five years has an unreasonable or inequitable effect on the rights of any contributors to the health benefits fund conducted by the applicant. This matter will be returned to later in these reasons.

The level of expense to the applicant of IVF treatment

58. Mr Bentley told the Tribunal that, allied to the applicant's concern about abuse of the private health insurance system, was a concern that the cost of IVF treatment which the applicant ultimately had to bear, was very high (see paragraph 21. above). That concern was also reflected in the extract from the Minutes of the meeting of the Board of the applicant held on 4 May 1989 (Exhibit D).

59. Both Dr Bellinge and Dr Thomas told the Tribunal, however, that improvements in IVF technology and changes in IVF procedures in recent years had greatly reduced the incidence of high number multiple births leading to a substantial reduction in the overall costs of IVF treatment and subsequent hospital confinements (see paragraphs 28., 35. and 36. above). That evidence was supported by the evidence of Mr Keyt (see paragraph 32. above). The Tribunal notes, however, that no specific data regarding the reduction in the cost of IVF treatment and confinements were provided by these witnesses. The Tribunal also notes that, based on statistics supplied by Concept Fertility Centre and Pivet Medical Centre and referred to in the evidence of these witnesses, although the incidence of triplet and twin births in the years 1990 and 1991 following IVF treatment decreased, it remained significantly higher than the incidence of such births following "normal" pregnancies.

60. After the hearing in this matter had concluded the applicant furnished to the Tribunal some information concerning the proportion of total supplementary benefits paid in relation to IVF treatment for the year 1988-89. That information indicated that 2.9% of supplementary hospital fund contribution income was applied to benefits for IVF treatment.

61. The material before the Tribunal would seem to indicate that the overall cost of IVF treatment and resulting confinements is high. However, no information was provided to the Tribunal on the cost of this treatment relative to the cost of other forms of expensive treatment and, as previously noted, no specific details have been provided regarding the reduction in the cost of IVF treatment and subsequent confinements since the period (1983-87) covered by the Webb Report. While the Tribunal is of the view that the high cost of such treatment is a factor to be taken into account in determining the issue in question, it considers that the evidence on this point is inconclusive. The Tribunal is, however, prepared to accept that the substantial reduction in the incidence of high number multiple births resulting from IVF treatment since 1989 (of which there was clear, uncontroverted evidence) has necessarily led to some reduction in the overall cost of IVF treatment and consequential hospital confinements.

62. The Tribunal accepts the applicant's submission that IVF treatment for the condition of infertility is voluntary or elective treatment and that this is a factor to be taken into account in determining the issue in question in these proceedings.

The fairness of requiring contributors to pay reasonable contributions for substantial benefits for voluntary treatment

63. Mr Bentley told the Tribunal that the applicant considered, as a matter of fairness and equity to other contributors, that a reasonable contribution should be made by contributors in respect of IVF treatment, especially having regard to the voluntary and expensive nature of such treatment. He said, however, that no actuarial calculations had been made in respect of the level of contributions and benefits payable in relation to IVF treatment in order to determine a fair and reasonable waiting period. He said that a waiting period of five years was arrived at on the basis of the mean duration of infertility statistic stated in the Webb Report rather than on the basis of any financial calculations.

64. This factor is allied to the abuse issue mentioned above (paragraphs 50.-51.) and provides the basis for the imposition of waiting periods of any length. The comments made in paragraphs 50.-51. above are applicable also to this factor.

65. Mr Bentley told the Tribunal that the fact that, in Western Australia, pre-confinement IVF treatment is not available in public hospitals and, therefore, not subsidised through Medicare, was of major concern to the applicant. He pointed out, however, that if an uninsured IVF patient was subsequently confined as a public patient in a public hospital, the only cost incurred by the patient would be in respect of the pre-confinement IVF cycle treatment (approximately $3,240). He said that, in these circumstances, the imposition of a waiting period of five years for supplementary benefits was neither unreasonable nor inequitable. Mr Bentley did acknowledge, however, that, given the cost of contributing to the supplementary benefits table for family insurance cover for five years (approximately $6,500), the likely effect of imposing a waiting period of five years would be that a higher proportion of IVF patients will not insure privately and will, instead, rely on Medicare for rebates.

66. While the Tribunal is aware that an anomaly exists in Western Australia in that pre-confinement IVF treatment is not available in public hospitals, it doubts that the most appropriate way for the applicant to respond to this anomaly is by introducing a five year waiting period for supplementary benefits, the effect of which will be to encourage more patients not to insure privately. The Tribunal also notes that there are numerous procedures associated with IVF treatment for which a rebate is payable through the Medicare system. The Webb Report (Exhibit A, pp 174, 182-3) found that in 1986 Medicare rebates accounted for 47.2% of the total IVF treatment costs.

Legislative intent regarding regulation of supplementary benefits table as compared with basic benefits table

67. Mr Solomon referred to the Second Reading Speech of the then Minister for Health relating to the Health Legislation Amendment Bill 1983 (Hansard, House of Representatives, 6 September 1983) which indicated that, upon the introduction of the Medicare system, the Government intended to reduce the level of regulation of private health insurance funds. He quoted the following passage from the Minister's speech (Hansard, p 410):

"... because Medicare provides basic cover to all Australians the

Government no longer considers it necessary to regulate the funds

beyond ensuring (their) overall financial viability and deciding the

general principles for their operation. To this end clause 78 of the

National Health Act has been amended to limit the requirements for

ministerial approval to the benefits and conditions on the basic

table only".

Mr Solomon submitted that the Tribunal should take into account, in determining the issue in question, the factor that the Government no longer wished to regulate the supplementary benefits table unless a matter arose involving "general principles" or the "financial viability" of private health funds, such as the applicant.

68. The Tribunal agrees with Mr Solomon that it is clear that the Government's intention was to leave regulation of the supplementary benefits table largely to the private health funds themselves. However, the Tribunal is also of the view that, in the interests of contributors, the Government considered that safeguards should be provided against such self-regulation. Section 78(4)(b) of the Act is such a safeguard. The Tribunal does not consider that the matters raised by Mr Solomon regarding legislative intent are relevant to the question in issue in these proceedings which involves the application of the safeguard provided by s78(4)(b) of the Act.

69. There is no dispute between the parties that the community rating principle, as explained by Mr Bentley in his evidence (see paragraph 18. above), applies generally to the private health insurance system in Australia. Mr Bentley acknowledged, however, that if the community rating principle was applied strictly, or in a "pure" form, no waiting periods in respect of private health insurance would be permissible. The Tribunal notes that, under paragraphs (j) and (k) in Schedule 1 to the Act, waiting periods are authorised in accordance with the known illness principle (see paragraph 18. above). The Tribunal agrees with Mr Solomon's submission that the known illness principle, as reflected in the waiting periods authorised by paragraphs (j) and (k) in Schedule 1 to the Act, must be considered as part of the overall community rating principle.

70. An alternative submission made by Mr Solomon was that the community rating principle should not be taken into account at all, or at least not regarded as a major factor, in determining the question at issue in these proceedings. His submission was, in effect, that whereas the community rating principle generally applied in an environment in which the approximate ratio of insured to uninsured people was 40%:60%, it was inappropriate to apply that principle in the "radically different" environment of IVF patients where the corresponding ratio, in the local Western Australian population, was 97.2%:2.8% (see paragraph 20. above).

71. In the Tribunal's opinion, the community rating principle per se does not distinguish between the insured and the uninsured. Rather, the distinction is between the low-risk insured and the high-risk insured. The fact that IVF treatment is not available in public hospitals is irrelevant to the community rating principle. The Tribunal is aware of other forms of treatment for which no rebate is claimable through Medicare but for which private insurance coverage can be obtained. In these areas, as in IVF treatment, the choice for patients is either to arrange private health insurance or to pay the costs themselves. These areas are regulated by the imposition of waiting periods to prevent abuse of the system and it is this factor, rather than the community rating principle, which should be taken into account in these proceedings.

72. Mr Solomon submitted that the Tribunal should take into account, in determining the question in issue, the fact that Regulation 24(e) provides for a discretion in the Board of the applicant not to enforce the waiting period in appropriate cases. While the Tribunal agrees that this is a relevant factor, it notes the evidence of Mr Bentley (see paragraph 25. above) that the applicant has not published any policy on the exercise of the discretion. The Tribunal is of opinion that the vesting in the Board of the applicant of an "absolute discretion" in relation to the application of the waiting period does not alter the substantial effect of Regulation 24(e), viz the imposition of the waiting period, because the subjective and unstructured nature of the discretion means that contributors have no way of knowing how, or on what basis, the discretion will be exercised: Swan Hill Corporation v Bradbury [1937] HCA 15; (1937) 56 CLR 746.

73. Mr Bhojani submitted that Regulation 24(e) discriminates against infertile couples and that this factor should be taken into account by the Tribunal. He compared the position of a fertile woman, who intentionally achieves pregnancy and qualifies under the applicant's rules for supplementary benefits after a waiting period of nine months, with the position of an infertile woman who is referred to an IVF programme in order to achieve pregnancy but who, under Regulation 24(e), does not qualify for supplementary benefits until she has been a contributor to the supplementary benefits table for a continuous period of five years prior to the commencement of the programme. Mr Bhojani submitted that, in each case, the intention of the woman is the same, namely, to achieve pregnancy and to qualify for supplementary benefits. He submitted that, on the assumption that the purpose of imposing a waiting period was to prevent abuse of the health insurance system, in accordance with the known illness principle, there was no logical basis for regarding a nine month period as a sufficient safeguard in the former case and a five year period as sufficient in the latter case.

74. Mr Bhojani said that such discrimination implied that contributors undertaking IVF treatment abuse the health insurance system to a greater extent than other contributors but that no evidence had been provided to support this. The Tribunal agrees that no evidence has been placed before it to support this implication regarding the extent of abuse of the system. As mentioned above (paragraph 57.) the Tribunal has not been provided with sufficient information to enable it to reach a conclusion concerning the cost to the applicant of IVF treatment relative to the cost of other forms of voluntary and expensive treatment.

75. There is, in the opinion of the Tribunal, no doubt that Regulation 24(e) discriminates between fertile and infertile contributors. However, the mere fact that the rule discriminates in this way does not necessarily mean that it unreasonably or inequitably affects the rights of any contributors. The rule imposing a waiting period of nine months in respect of obstetric treatment is discriminatory in that it draws a distinction between pregnant and non-pregnant contributors. Yet, that rule is not regarded as imposing an unreasonable or inequitable effect on the rights of any contributors. The nature and extent of the discrimination will be the critical factors in any given case. In the present case it was the duration of the waiting period imposed by Regulation 24(e) which was regarded by the delegate of the Minister as constituting an unreasonable and inequitable effect on the rights of contributors, rather than the fact that the rule discriminated against infertile women - although the latter factor was taken into account in the making of the decision under review (see document T 2.4 of the T documents).

76. Both Dr Bellinge and Dr Thomas testified that IVF is only one of many available treatments for infertility. Dr Thomas told the Tribunal that other treatments include ovulation therapy, ovulation "tracking", tubal surgery, specific therapy for endometriosis, donor insemination, husband artificial insemination, in addition to other ART procedures (eg GIFT). Dr Thomas added that these other forms of treatment could also be expensive and could result in multiple births - particularly, the use of ovulation induction drugs. He said that he could see no reason to distinguish between IVF treatment and other treatment modalities for infertility.

77. Mr Bhojani submitted that it is arbitrary to single out IVF treatment as compared with other forms of treatment for infertility, for the purposes of health insurance. He further submitted that to single out IVF treatment as compared with other forms of expensive treatment for different conditions or ailments (eg coronary bypass surgery) is also arbitrary.

78. The Tribunal agrees with Mr Bhojani's submission that the singling out of IVF as a treatment modality is a factor to be taken into account in determining the matter in issue.

79. Mr Bhojani submitted, on the basis of the evidence of Dr Bellinge and Dr Thomas (see paragraphs 28., 35. and 36. above), that improvements in IVF technology and procedures in recent years have led to a decrease in the costs associated with IVF treatment. The Tribunal's attitude to this matter has already been explained (see paragraph 57. above).

80. Mr Bhojani submitted that the high anxiety of infertile couples and the likelihood that Regulation 24(e) would exacerbate that anxiety are relevant considerations. Mr Bentley testified that the level of anxiety of infertile couples was not a factor that was taken into account by the applicant in its decision to impose the five year waiting period. Dr Thomas testified that there was a high anxiety level generally among infertile couples, especially those aged in their thirties. There is, however, no clear evidence before the Tribunal that the imposition by the applicant of the five year waiting period has itself caused or exacerbated the anxiety of infertile couples.

81. Dr Bellinge and Dr Thomas both testified as to the decline in fertility with age and the dramatic reduction in fecundity after the age of 37 years (see paragraphs 30. and 38. above). Mr Bhojani submitted that the effect of Regulation 24(e) has been that patients are compelled by the five year waiting period to delay commencing IVF treatment until a time when their fecundity is greatly reduced thereby prejudicing the chances of success of the treatment. The Tribunal agrees that this is a factor to be taken into account in determining the matter in issue.

Cases where it may be medically inappropriate to delay IVF treatment

82. Mr Bhojani submitted, on the basis of the evidence of Dr Thomas (see paragraph 39. above) and the letter from Professor Michael (Exhibit B) (see paragraph 44. above), that the Tribunal should have regard to this factor. The Tribunal agrees that this factor is relevant to the matter in issue.

83. The question for determination in the present proceedings is whether, on the material before the Tribunal, the decision under review was the correct or preferable one. The decision under review is the decision of the delegate of the Minister for Health, Housing and Community Services, dated 1 October 1991, declaring, under s78(4)(b) of the Act, that the change to the applicant's rules, by the addition of Regulation 24(e) and the consequential amendments to Regulation 2, "shall not be taken to have come into operation". That decision was conditioned on a finding by the delegate that he was of opinion that his change to the applicant's rules imposed "an unreasonable and inequitable condition affecting the rights of contributors" (emphasis added). The Tribunal notes, however, that s78(4)(b) of the Act provides that the power of the Minister (or delegate) to make such a declaration is conditional upon the Minister (or delegate) being of opinion that the rule change imposes "an unreasonable or inequitable condition affecting the rights of any contributors" (emphasis added). Accordingly, for the purpose of reviewing the delegate's decision, the Tribunal is required to determine whether the opinion formed by the delegate was the correct or preferable one.

84. The issue here is one of statutory unreasonableness. In such a case, the very narrow meaning of "unreasonable" that is appropriate in the context of judicial review of the exercise of broad discretionary power is inappropriate. That very narrow meaning - which has come to be known at common law as "Wednesbury unreasonableness" (the nomenclature comes from Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1947] EWCA Civ 1; (1948) 1 KB 223) - may be described as gross or manifest unreasonableness and has been adopted as a ground of judicial review in the Administrative Decisions (Judicial Review) Act 1977 (Cth), ss 5(2)(g), 6(2)(g):

"an exercise of a power that is so unreasonable that no reasonable

person could have so exercised the power".

In the context of statutory unreasonableness, the term "unreasonable" should be given its ordinary, natural meaning: see, for example, Curragh Coal Sales Co Pty Ltd v Wilcox [1984] FCA 168; (1984) 1 FCR 461. So too should the term "inequitable".

85. The word "unreasonable" is defined in The Shorter Oxford English Dictionary as follows:

"1. Not having the faculty of reason; irrational. 2. Not acting in

accordance with reason or good sense; ... 3. Not based on reason or

good sense. 4. Going beyond what is reasonable or equitable;

excessive."

The test of reasonableness or unreasonableness is an objective one and whether that test is satisfied or not will normally be a question of fact or degree depending upon the circumstances of the particular case: Re W (An Infant) (1971) AC 682 at 699; Thornton v Repatriation Commission [1981] FCA 76; (1981) 52 FLR 285 at 290-1; Gregory v Philip Morris Ltd (1988) 80 ALR 455 at 457.

86. The word "inequitable" is defined in The Shorter Oxford English Dictionary as follows: "Not equitable; unfair; unjust." This meaning was adopted by the House of Lords in Re Hayes Will Trusts (1954) 1 WLR 22 at 27 and the Tribunal also adopts it in the present case.

"Condition affecting the rights of any contributors"

87. Having regard to the definition of "contributor" in s4(1) of the Act (see paragraph 7. above), it is clear that, before s78(4)(b) of the Act can apply, the rule change must affect the rights of existing contributors - that is, persons who were contributors to the relevant fund at the time the rule change took effect. Prior to the addition of Regulation 24(e) to the applicant's rules, contributors who paid contributions at supplementary benefit rates had a contractual right to be paid supplementary benefits in respect of IVF treatment and resulting confinement after having satisfied the relevant pre-existing waiting period of two months, nine months or twelve months. On 1 July 1989, when Regulation 24(e) took effect, those contractual rights were adversely affected by the imposition of a much longer waiting period of five years before qualifying for supplementary table benefits in respect of IVF treatment, in the case of those contributors who had not commenced an IVF treatment programme. This rule change was, therefore, one which affected the rights of certain contributors within the meaning of s78(4)(b) of the Act. It is not to the point that the class of contributors so affected may be very limited because s78(4)(b) is expressed to apply to a rule change which affects the rights of "any contributors" (emphasis added). Nor is it to the point that Regulation 24(e) vests in the Board of the applicant an "absolute discretion" to determine that the five year waiting period not apply in particular cases. As mentioned earlier (paragraph 68.) the provision of a subjective and unstructured discretion not to apply the rule does not alter the substantial effect of the rule because individual contributors have no way of knowing how, or on what basis, the discretion will be exercised.

88. On the totality of the material before the Tribunal and having regard to the factors submitted as relevant considerations by Mr Solomon and Mr Bhojani, the Tribunal has come to the conclusion that the change to the applicant's rules on 1 July 1989, consisting of the addition of Regulation 24(e) and consequential amendments to Regulation 2, imposed "an unreasonable or inequitable condition affecting the rights of any contributors" to the health benefits fund conducted by the applicant. Mr Solomon submitted that, if the Tribunal came to this conclusion, it was the Tribunal's function to determine the appropriate waiting period and, furthermore, to consider whether it would have been more appropriate for the delegate of the Minister to have given a direction to the applicant under s73BE of the Act. That section empowers the Minister to give directions to registered organizations with respect to such matters as the rates of contributions to be paid by contributors, and the scope and level of benefits that are to be available to contributors.

89. The Tribunal rejects this submission. It is axiomatic that the Tribunal's powers on review are not at large. The Tribunal is authorised by s43(1) of the AAT Act to exercise all the powers and discretions that have been conferred by any relevant enactment on the decision-maker, but it has no power to make a decision that the decision-maker is not empowered to make: Re Callaghan and Defence Force Retirement and Death Benefits Authority (1978) 1 ALD 227. The Minister (or delegate) is not empowered by the Act to determine the appropriate length of waiting periods for benefits and, accordingly, the Tribunal has no power to do so. The fixing of waiting periods for benefits is a matter for the registered organization concerned (in this case, the applicant), subject to such provisions as s73BA (and Schedule 1) and, of course, s78(4) of the Act.

90. The Tribunal's conclusion set out in paragraph 84. above necessarily means that it decides to affirm the decision under review. That being the case, it would, in the Tribunal's opinion, be quite gratuitous and inappropriate for it to express any view regarding the appropriateness of giving a direction under s73BE of the Act.

91. The applicant has found itself in a difficult position owing to the unavailability of IVF treatment in public hospitals in Western Australia. However, the Tribunal is of the view that, taking into account all the circumstances of the case, the five year waiting period prescribed by the applicant imposed an unreasonable or inequitable effect on the rights of certain of its contributors. The factors which weighed heavily with the Tribunal included the misunderstanding by the applicant of the statistics in the Webb Report regarding "duration of infertility" whereby it interpreted that expression as meaning the period of known infertility; the effect of advancing age on fecundity; and the singling out of IVF as a treatment modality for infertility.

92. This has not been an easy matter to decide. The Tribunal considers that a waiting period to qualify for supplementary benefits in respect of IVF treatment should be imposed to prevent abuse of the private health insurance system. Mr Bhojani in his submissions appeared to suggest that the Act contemplates that twelve months is the longest permissible waiting period. Certainly the decision-maker was of opinion that that inference could be drawn from the Act (see document T 2.5 of the T documents). The Tribunal does not agree that such an inference can, or necessarily should, be drawn from the Act. In the interests of providing some guidance to the applicant on the matter, the Tribunal expresses the view that a waiting period of no more than three years would be appropriate.

93. For the above reasons the Tribunal affirms the decision under review.