Riverside Nursing Care Pty Ltd v Secretary, Department of Health & Aged Care

REASONS FOR JUDGMENT 1 The applicant has applied for an extension of time to file and service a notice of appeal against a decision of the Administrative Appeals Tribunal ("the AAT") dated 17 March 2003 on the ground of error of law: see s 44(2A) of the Administrative Appeals Tribunal Act 1975 (Cth) ("the Act") and O 53 r 7 of the Federal Court Rules 1979 (Cth) ("the Rules"). 2 The application was commenced in the Court on 4 July 2003. Under s 44(2A) of the Act, the application was required to be made within 28 days after the Tribunal's decision was handed down, yet it was made 81 days after the end of that period. 3 On 5 March 2000 a delegate of the Secretary of the Department of Health and Family Services ("the Secretary") made a decision under Div 67 of the Aged Care Act 1997 (Cth) ("the Aged Care Act"), revoking the applicant's approval under Pt 2.1 of that Act as a provider of aged care services and of its allocation of places under Part 2.2 of that Act ("the March decision"). The decision was made on the basis that, because of the applicant's non-compliance with its responsibilities under the Act, there was an immediate and severe risk to the safety, health or well-being of the people to whom the applicant was providing care. 4 On 7 March 2000 the applicant requested a reconsideration of the March decision pursuant to s 85-5 of the Aged Care Act. On 15 March 2000 the applicant instituted an application under the Administrative Decisions (Judicial Review) Act 1977 (Cth) ("the ADJR Act") for review of the March decision. On 7 April 2000 Sundberg J refused to grant a stay of the March decision (Riverside Nursing Care Pty Ltd v Bishop (2000) 60 ALD 704) and a subsequent application for leave to appeal from the decision of Sundberg J was refused by the Full Court on 17 August 2000 (Riverside Nursing Care Pty Ltd v Honourable Bronwyn Bishop (2000) 100 FCR 519). On 4 May 2000 a delegate of the Secretary confirmed the March decision, and on 11 May 2000 the applicant applied to the AAT for review of the March decision and the decision of the delegate made on 4 May 2000. 5 A hearing was conducted before the AAT between 2 October 2001 and 11 December 2001. The hearing occupied 23 hearing days and took evidence from 24 witnesses. There were some 2,500 pages of transcript and the exhibits were voluminous. On 17 March 2003 the AAT affirmed the delegates' decisions. 6 Section 44(2A)(b) of the Act confers on the Court a discretion to extend time. The relevant principles were set out by Wilcox J in Hunter Valley Development Pty Ltd v Cohen (1984) 3 FCR 344 at 348-350. The parties were in agreement as to the relevant principles. In particular they accepted that the merits of the application is a primary consideration. 7 While I do not regard the applicant's explanation for the delay that occurred as satisfactory, in all the circumstances, one of which is that the respondent has not suffered any prejudice as a result of the delay, if I were satisfied that the applicant has a reasonably arguable case of error of law on the part of the AAT, then I would grant the application to extend time. 8 The applicant claims that the AAT erred in law in upholding the decision to revoke its approval as a provider of aged care, and of the allocation of places under Pt 2 of the Aged Care Act. The Act, inter alia, establishes a scheme for residential care for persons approved to be eligible for such care under Div 21. Essentially, those persons have physical, medical, social or psychological needs that require the provision of residential care. The approvals given may be revoked, inter alia, in the event of non-compliance with the responsibilities prescribed in Pt 4 of the Aged Care Act. An important consideration will be whether the non-compliance threatens the health, welfare or interests of care recipients. The question of law said to arise on the applicant's application to the Court concerns the manner in which the AAT dealt with s 67-1(2), which entitled the Secretary to summarily revoke the applicant's approvals where: "there is an immediate and severe risk to the safety, health or well-being of care recipients to whom the approved provider is providing care." 9 There is a dispute as to whether s 67-1(2) was in issue in the application to the AAT because a decision made under that section is not a reviewable decision: see s 85-1 of the Aged Care Act. Although the AAT formed the view that s 67-1(2) did not arise, it made findings in relation to the applicability of the section in the event that is was wrong in its view of its non‑applicability. It is those findings that the applicant contends constituted or reflected an error of law. 10 Although the applicant had difficulty in defining the error of law, it accepted that to succeed it must, at the least, establish that it was not reasonably open to the AAT on the findings it made, to conclude that the criterion in s 67-1(2) had been satisfied. While that may constitute an error of fact rather than of law, I am prepared to assume, without deciding, that for the purposes of the present application it is arguable that: · s 67-1(2) was an issue for the AAT to determine because a decision made under s 67-5, which is a reviewable decision, incorporates the criterion in 67-1; · the AAT erred in law if its conclusion in relation to s 67-1(2) was not reasonably open to it on the basis of the findings it made. 11 It is in that context that I turn to consider the AAT's decision. The decision is set out over some 178 pages. In the concluding section the AAT turned to consider s 67-1(2): see [375]-[380]. The AAT applied dictionary definitions to each of the main words used in the section, some of which had already been set out and considered in an earlier part of the reasons. No error is suggested in it doing so. The AAT concluded at [380]: "In our view, the consequences of Riverside's non-compliance had reached a stage beyond where there were merely serious consequences for the safety, health and well-being of the residents. There was a systemic breakdown and that systemic breakdown on all fronts as evidenced by the breakdown in the documentation to the breakdown in the medication management and administration and all aspects to which we have touched upon, have led us to conclude that there was no need to follow the procedures in s.7-1(1)(a) and (b)." 12 The reference to the procedures in s 67-1(1)(a) and (b) is a reference to the procedures that are required to be followed unless the criteria in s 67-1(2) have been satisfied. Earlier in its reasons, the AAT identified extensive non-compliance by the applicant with its statutory responsibilities. It made certain findings at [352]: "Did Riverside's non-compliance with Part 4.1 and so with its responsibilities to meet the Residential Care Standards, threaten the health, welfare or interests of the care recipients i.e. its residents? The words 'health', 'welfare' and 'interest' would not seem to require a great deal of elucidation. When used together in the context of the Act, they would seem to encompass all aspects of soundness of body and mind and of physical, emotional and spiritual well-being together with matters that concern a resident in his or her daily life and affect him or her in carrying out that daily life. The word 'threatens' in that context, carries one of its ordinary meanings of being '…regarded as a likely cause of harm etc…'. (The New Shorter Oxford English Dictionary, 3rd edition, 1993). By adopting that word, the Tribunal is required to consider whether or not the approved provider's non-compliance is likely to cause harm to the health, welfare or interests of the care recipients." 13 At [353] the AAT found: "On the basis of the findings of fact that we have made earlier in these reasons, we are satisfied that the health, welfare or interests were indeed affected by Riverside's non-compliance. For the reasons we have already given, we find that the non-compliance with the Residential Care Standards did threaten the health, welfare or interests of the nursing home's residents. Indeed, in relation to certain aspects of clinical care, for example, there was not only a threat to the health, welfare and interests of residents but their health, welfare and interests were actually affected. We refer specifically to incidents of skin tears, pressure sores and a resident's broken arm as three examples in that regard. Poor building maintenance was a threat to residents' physical health and welfare as were such matters as the management and administration of medication and the monitoring of residents' medication and their reaction to that medication. The poorly maintained documentation, to which we have referred on various occasions in these reasons, was a symptom of inadequately developed strategies to deliver the care required by the Residential Care Standards." 14 Then at [357] the AAT held: "In March 2000, we are satisfied that Riverside was facing severe systemic problems. Not only was there non-compliance with Part 4.1 of the type that we have identified, we are satisfied that there was a general break-down of the systems of care in place in the nursing home. This was acknowledged, in substance, by Ms Taylor." 15 I would add that the reference to March 2000 is significant, because it was during that month that the delegate of the Secretary exercised power under s 67-1(2). At [359] the AAT said: "Riverside also had a long history of non-compliance with the provision of nursing home care required under s.45D of the [National Health Act 1953 (Cth)]. Its non-compliance extended from 1993. It was not a case of Riverside's failing to comply with a standard in one or two aspects each time. Rather, in view of the findings we have made above, it was a case of Riverside's failing to comply with those standards across virtually all aspects of the nursing home's operations. So, for example non-compliance was noted in relation to medication management, administration, care plans, nutrition, continence and bowel management and skin integrity. The inadequacies noted as leading to a determination of non-compliance were, we find, addressed but addressed in a way that did not lead to systemic change in the nursing home. Non-compliance that had led the Department to conclude that there were serious areas of concern late in 1993 to impose sanctions on and from 13 December, 1993, were not addressed to any substantive degree until May, 1994. Even then, there continued to be non-compliance in relation to 11 of the standards. The sanctions were withdrawn from 16 May, 1994 but there continued to be what was again described as serious and persistent non-compliance. This again related to a wide range of standards covering a broad range of the nursing home's operations." 16 Although these findings were made in a section dealing with the health, welfare and interests of the aged care recipients generally, they were obviously relevant to the questions arising in s 67-1(2). 17 It was argued by the applicant that the findings constituted assertions and did not refer to the specific evidence that supported them, however, in reply senior counsel for the respondent took me to numerous findings made earlier in the reasons about specific instances of non-compliance with basic health care standards (see for example paras 237, 242, 244, 251, 258, 271, 274, 276, 277, 278, 280, 281, 282, 284, 307, 319, 322 and 323 of the AAT's reasons). 18 Counsel for the applicant stated that those findings related to events over a long period and do not meet the criterion of "an immediate and severe risk". In my view, on a fair reading of the decision of the AAT, particularly in the context of the special needs of aged care recipients, it is clear that the conclusions the AAT reached in relation to the applicability of s 67-1(2), and, in particular, to its satisfaction in respect of the criteria in that section, were reasonably open to it on the basis of the findings it made in respect of the evidence adduced before the AAT. 19 While the AAT might have considered the requirements of immediacy and severity of the risk as at March 2000 more closely than it did, I am satisfied that no error has been demonstrated in its approach to those terms or to the criteria in s 67-1(2). Insofar as the findings in relation to March 2000 may not have been explicit in relation to "immediacy" and "severity", I am satisfied that they were made implicitly by reference to that date. I earlier noted a particular passage where the AAT had in fact stated that its findings related to that date. 20 Accordingly, I am not satisfied that the applicant has established that it has a reasonably arguable case of error of law on the part of the AAT. Accordingly, for the above reasons the application for an extension of time should be refused with costs. I certify that the preceding twenty (20) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Merkel.

Solicitor for the Applicant: Corrs Chambers Westgarth

Counsel for the Respondent: Mr C Gunst QC with Mr C Horan