Saint v Holmes

REASONS FOR JUDGMENT ON APPLICATION FOR DISCOVERY OF DOCUMENTS Introduction 1 Warren John Saint is a registered medical practitioner in Western Australia. He is the holder of a Medical Provider Number and a Prescriber Number for the purposes of medicare benefits in respect of services provided under the Heath Insurance Act 1973 (Cth) (the Act). On 5 July 2004 Dr Saint commenced proceedings in this Court seeking judicial review of various decisions made under the Act connected with inquiries into possible over-servicing of patients by him. 2 The first respondent to Dr Saint's action is Dr Alan Holmes, the Director of Professional Services Review under s 83(1) of the Act. The second, third and fourth respondents, Drs Ruse, Veling and Copeman constitute a Professional Services Review Committee set up by Dr Holmes under the provisions of s 95 of the Act. The fifth respondent is the Health Insurance Commission (the Commission) established under the Health Insurance Commission Act 1973 (Cth). Statutory Framework 3 Part VAA of the Act creates a Professional Services Review Scheme. Under that Scheme a person's conduct can be examined to ascertain whether inappropriate practice is involved (s 80). Inappropriate practice is defined in s 82. It is conduct in connection with rendering or initiating services (s 82(1)). Inappropriate practice by a practitioner, or specialist or consultant physician is practice that would constitute conduct unacceptable to the general body of general practitioners or specialists or consultant physicians as the case may be (s 82(1)(a)-(c)). The term 'service' is separately defined in s 81 to mean: '(a) a service for which, at the time it was rendered or initiated, medicare benefit was payable; or (b) a prescribing or dispensing of a pharmaceutical benefit by a medical practitioner or a dental practitioner.' 4 The administrative structure for reviewing conduct comprises the Director of Professional Services Review and the Professional Services Review Panel which includes Deputy Directors of Professional Services Review. The Director can decide whether to set up a Professional Services Review Committee to consider conduct. The committees reach decisions and report findings. A determining officer can then make determinations to deal with inappropriate practice found by committees (s 80). Such determinations may direct that the person the subject of the determination be counselled or reprimanded, repay medicare benefit or benefits and that he or she be disqualified fully or in relation to a service or a defined range of services (s 106U). 5 Under s 86 of the Act the Commission may in writing refer, to the Director of Professional Services Review appointed for the purpose, the question whether a person has engaged in inappropriate practice in connection with the rendering or initiation of services. The relevant services must have been rendered on or after 1 September 1993 and during the two-year period preceding the referral. The referral must specify whether it relates to specified services and/or services rendered or initiated by a practitioner that are services of a specified class or provided for a specified class of persons, within a specified location or within a specified period. 6 The Commission is required to send a copy of the referral to the person under review within 48 hours of sending the referral to the Director (s 88(1)). The copy must be accompanied by an invitation to the person to make written submissions to the Director within 14 days stating why the referral should be dismissed without setting up a committee (s 88(2)). Within 28 days after receiving the referral the Director must dismiss it or set up a committee to consider whether the practitioner has engaged in inappropriate practice (s 89). The Director may consult a member of the Professional Services Review Panel or any consultant or learned professional body that the Director considers appropriate in order to obtain assistance and make the decision on the referral (s 90(1)). The Director must dismiss the referral if satisfied that there are insufficient grounds on which a committee could reasonably find that the person under review had engaged in inappropriate practice (s 91). 7 Unless so satisfied that the referral should be dismissed the Director is required by an instrument in writing to set up a committee to consider whether the person under review has engaged in inappropriate practice (s 93). Written notice of the decision on the referral must be given to the person under review and to the Commission within seven days after the making of the decision. The notice must include a statement of the reasons for the decision (s 94). 8 A committee set up under s 93 consists of a chairperson, who is a Deputy Director, and two other panel members (s 95(1)). There are provisions about the conduct of meetings of such committees. They can hold hearings at which evidence is given and/or documents produced to the committee (s 101(1)). Section 101(2) provides: 'The Committee must hold a hearing if, after considering the matters that are the subject of the referral, it appears to the Committee that the person under review may have engaged in inappropriate practice in connection with rendering or initiating the referred services.' 9 If the committee proposes to hold a hearing it must give the person under review written notice of the time and place proposed. This must be given at least 14 days before the proposed hearing and must give particulars of the matter to which the hearing relates (s 102). The notice may require the person under review to appear at the hearing and to give evidence to the committee or to produce such documents as are referred to in the notice. 10 The Act provides for a report by the committee to a Determining Officer. A Determining Officer is a person appointed as such by the Minister under s 106Q of the Act. The committee is required to give the Determining Officer a written report setting out its findings on whether, in its opinion, the person under review engaged in inappropriate practice in connection with the referred services (s 106L). The report must be given within 120 days after the committee was set up. 11 The Determining Officer must, within seven days after receiving the committee's report, give a copy to the person under review (s 106R). If the report contains a finding that the person has engaged in inappropriate practice the Determining Officer must make a draft determination and, within 14 days after receiving the report, give copies of the draft determination to the person under review and to the Director (s 106S). After the end of a 14-day period, during which the person under review may make submissions, and within 35 days after receiving the committee's report, the Determining Officer must make a final determination in accordance with s 106U (s 106T). 12 A determination made by the Determining Officer must contain one or more of the following directions (s 106U(1)): '(a) that the Director, or the Director's nominee, reprimand the person under review; (b) that the Director, or the Director's nominee, counsel the person under review; (c) that the person under review repay to the Commonwealth the whole or a part of the medicare benefit that was paid (whether or not the person under review) in respect of services that: (i) were rendered by: (A) the person under review; or (B) an employee of the person under review; ….' There can also be a direction that the practitioner be disqualified in respect of one or more of the various classes of specified services. A final determination takes effect 28 days after the Determining Officer gives a copy to the person under review (s 106V). The Determining Officer is required to give copies of the determination to the person under review as soon as practicable after making it. The Allegations in the Re-amended Statement of Claim 13 In the re-amended statement of claim, filed in support of his application for judicial review, Dr Saint makes a number of allegations relating to the application of the statutory process to them. These allegations set up the bases upon which he seeks judicial review of various decisions made in the course of the process. 14 Dr Saint begins by alleging that the Commission has published to the medical profession Counselling Procedures to be used by it in respect of the Professional Services Review Scheme. He claims, in substance, that the Commission has held out that the Professional Services Review Scheme will not be applied to a practitioner unless he or she has first been subjected to Counselling Procedures and has shown unwillingness to change a pattern of servicing after counselling. Particulars of the relevant publications are set out in par 4 of the re-amended statement of claim. There is no allegation that the Counselling Procedures are a statutory precondition to the application of the Professional Services Review Scheme. 15 According to Dr Saint, Dr Peter Laundy, on behalf of the Commission, met with him in January 2000 in purported compliance with the Counselling Procedures (sc 5). At that meeting, and in a written report later provided to Dr Saint, Dr Laundy told him that the Commission was not asking him to cut back his services. 16 Dr Saint then alleges, that by a letter dated 23 March 2000, the Commission said it would review his Provider Summary Statistics three months thereafter to determine whether there had been any changes in his servicing levels failing which his statistics might be forwarded to the Director (sc 6A). He says that a review, covering the period from 18 January 2000 to 31 March 2000, demonstrated a significant reduction in the level of his services (sc 6B). 17 It is then said that, in July 2000, in breach of the Counselling Procedures, and without first seeking to review his Statistics for the three-month period since 23 March 2000, Neville Garrity for the Commission made a referral pursuant to the Professional Services Review Scheme to Dr Janet Mould, the Manager of the Professional Services Branch and a delegate of the Commission (sc 7). The stated reason for the making of the referral was that Dr Saint had 'been repeatedly counselled by Health Insurance Medical Advisers particularly regarding high daily and high annual servicing of patients' (sc 7). 18 The re-amended statement of claim then turns to an Investigative Referral initiated on 21 August 2000 by Dr Mould (sc 8). That referral required the Director of Professional Services, Dr Holmes, to investigate Dr Saint's conduct pursuant to s 87 of the Act regarding services rendered and initiated during the two-year period immediately preceding the date of the referral. The services in question were those provided within a specified location, namely 39 Old Perth Road, Bassendean in Western Australia. The period within which the services were provided was from 1 January 1999 to and including 31 December 1999 (sc 8). These allegations are admitted. 19 Dr Saint alleges that the Investigative Referral was invalid as it did not relate to services rendered or initiated during the whole of the two-year period immediately preceding the date of the referral, which was 21 August 2000. This is said to have been contrary to s 86 of the Act as the referral was only for the period between 1 January and 31 December 1999 (sc 10). Materials and documents 'attached' to the Investigative Referral are particularised (sc 11). They are admitted and not in issue. It is then said that the conduct, the subject of the Investigative Referral, 'was unspecified and unlimited'. The Referral is said to have been invalid on that ground also (sc 12). This is denied. There is then a contention that in making the Investigative Referral Dr Mould took account of various irrelevant considerations and failed to take into account relevant considerations (sc 12A). Further it is said that the Investigative Referral and attached material contained material that was irrelevant, inaccurate and misleading or likely to prejudice the fair conduct of investigations into the referral (sc 13). There is a list of some 17 particulars of the ways in which the referral and attached materials are said to have been deficient. 20 Dr Saint also alleges that the Commission failed to send him a copy of the referral within 48 hours as required by s 88(1) of the Act (sc 14). 21 Dr Saint says he wrote to Dr Holmes in connection with the Investigative Referral and told him of irrelevant, inaccurate and misleading material contained in it. This was not corrected (sc 15 and 16). His complaints were passed on to the Commission by Dr Holmes but the Commission made no correction and on 17 April 2001 told Dr Saint that it denied that there ere any inaccuracies in the investigative material or the attached material (sc 17 and 18). Dr Saint says that, because of the contents of the Referral and the attached materials, he was denied any proper opportunity to make submissions regarding the matters alleged to be capable of constituting inappropriate conduct in the Investigative Referral. He contends that the Referral was made in breach of the rules of natural justice and that it constituted an improper exercise of the relevant statutory power (sc 20). 22 The re-amended statement of claim also deals with what is called the 'Investigative Referral Decision'. Pursuant to s 89 of the Act, Dr Holmes purported to conduct an investigation into the Investigative Referral Services pursuant to the referral. It is pleaded that under s 91 of the Act it was Dr Holmes' duty to assess whether there were sufficient grounds upon which a committee could reasonably find that Dr Saint had engaged in inappropriate practice. If there were insufficient grounds he would be obliged to dismiss the Investigative Referral (sc 22). In May 2001 he made a decision that there were sufficient grounds upon which a committee under s 93 of the Act could reasonably find that Dr Saint had engaged in inappropriate practice. It is said that in conducting the investigation and making the decision that there were sufficient grounds, Dr Holmes did so when there was no basis in fact upon which he could be satisfied that a committee could reasonably find that Dr Saint had engaged in inappropriate practice. He is said to have lacked the power to conduct an investigation. His Investigative Referral decision was invalid. It is alleged that it involved a breach of the rules of natural justice and an improper exercise of power. 23 The re-amended statement of claim next turns to the 'Adjudicative Referral'. On 18 May 2001 Dr Holmes set up Professional Services Review Committee No 204 comprising Drs Ruse, Veling and Copeman. He made a referral, the Adjudicative Referral, to the committee to consider whether Dr Saint's conduct constituted engaging in inappropriate practice in connection with the rendering of the following services: 'All Medicare Benefits Scheme item 35 and 36 services rendered from the practice location at 39 Old Perth Road, Bassendean, Western Australia 6054 during the period on and from 1 January 1999 to and including 31 December 1999.' Dr Saint alleges that Dr Holmes lacked the power to establish the committee and to make the Adjudicative Referral. The Adjudicative Referral is said to have been invalid because it was based upon an invalid Investigative Referral (sc 29). 24 In a report attached to the Adjudicative Referral, Dr Holmes gave reasons for his decision to make that referral. Dr Saint alleges that the matters set out in that report included matters not within the scope of the Investigative Referral or the Adjudicative Referral. Dr Holmes in making the Adjudicative Referral and making the findings stated in his report improperly exercised his powers in that he took irrelevant considerations into account, failed to take into account relevant considerations, acted without evidence or sufficient evidence and erred in law. It is also said he denied Dr Saint natural justice. 25 The re-statement of claim then refers to amendments to the Act which commenced in November 1999 and required that a committee must, in determining whether a practitioner's conduct was inappropriate, have regard to whether or not the practitioner had adequate and contemporaneous records of the rendering or initiation of the services (s 82(3)). Reference is made to the definition of the term 'adequate and contemporaneous records of the rendering or initiation of services' and to regulations prescribing standards of adequacy. It is asserted that the relevant definition and standards did not apply in respect of services provided by Dr Saint prior to 1 November 1999 (par 34(b)). 26 A sampling process was used as part of the committee's inquiry in relation to patients treated by Dr Saint. A sampling procedure is set out in a Sampling Methodology Determination prescribed pursuant to s 106K(3) of the Act. It is said that the relevant services were not selected for sampling by the committee. The services selected did not constitute a random or valid sample of the kind required by s 106K. They did not constitute a valid preliminary random sample pursuant to the Sampling Methodology Determination nor a valid exploratory sample pursuant to that Determination. Particulars of the alleged deficiencies of the sampling process are set out in par 40 of the re-amended statement of claim. 27 In September 2001 the committee decided to conduct a hearing into the matters covered by the Adjudicative Referral. They issued notices requiring Dr Saint's attendance to give oral evidence and produce documents. They conducted hearings on 1 and 2 November 2001 (sc 43). At the hearings they received oral and written evidence. They questioned Dr Saint about his general practice and procedures and matters unrelated to the conduct covered by the Adjudicative Referral (sc 44). They also allegedly applied the definition of 'adequate and contemporaneous records' introduced by the amendment to s 81 of the Act in 1999 (sc 45). 28 The committee adjourned its proceedings on 2 November 2001 without bringing the hearing to an end. It is said that the committee failed to afford Dr Saint an opportunity to make an oral submission in his defence or in response to evidence received in the hearings. It is said that the Chairman of the committee, Dr Ruse, orally advised him not to make further submissions until he had something more concrete to say (sc 46). 29 On 26 November 2001 it is alleged that the committee members were directed by Dr Holmes, and alternatively the Commission, to suspend their investigations and hearings pursuant to the Adjudicative Referral and that they acceded to such direction (sc 47). In January 2003 Dr Holmes advised the committee members that the Adjudicative Referral had been validated under Item 119 of Schedule 1 of the Heath Insurance Amendment (Professional Services Review and Other Matters) Act 2002 (Cth) which had come into effect on 18 December 2002. He directed the committee to reconvene and continue with the Adjudicative Referral (sc 48). 30 The committee members allegedly decided to alter the Sampling Methodology, not to continue the adjourned Adjudicative Referral hearings and not to otherwise conduct any further hearings with respect to the Adjudicative Referral (par 49). In making these decisions it is said they acted in breach of s 106K of the Act and denied Dr Saint procedural fairness. It was also said they took into account irrelevant considerations, namely the time and cost involved in conducting further hearings and in following the Sampling Methodology Determination. It is said that in making that decision they failed to give Dr Saint an opportunity of calling witnesses to give evidence and making any closing oral submissions (sc 52). 31 Dr Saint alleges that in February 2003 Jenny Walton, on behalf of the committee, advised him that he would be given an opportunity to make further general submissions in writing before the committee started to prepare its draft report (sc 52A). However on or before 21 March 2003 and without notice to Dr Saint or affording him any opportunity to make further submissions the committee allegedly determined that he had engaged in inappropriate practice with respect to 14 Item 36 services. The committee prepared a draft report. Its conduct is said to have been in breach of procedural fairness. In its draft report of its findings the committee applied the new definition of 'adequate and contemporaneous records'. 32 It is alleged that a copy of the draft report was sent to Dr Saint in October 2003. He claims it was deficient in failing to include preliminary findings in relation to all the services investigated. He says he provided a written submission to the committee in November 2003. He alleges that because of the failure to make preliminary findings he was denied procedural fairness and that the draft report and decisions in it involved an error of law. 33 In April 2004 one Kaylene Horler is said to have prepared a response to his written submissions which was adopted by the committee. The draft report was amended accordingly. In June 2004 the committee members prepared their final report and made a number of findings in relation to it including findings of inappropriate practice in connection with a number of services provided by Dr Saint. The final report is said to have constituted a breach of the rules of procedural fairness and an improper exercise of power. It is said to have been made without evidence and to have involved error of law (sc 63A). It is also said that the final report was based upon reasons not contained in the draft report and/or which varied from those contained in the draft report. The final report was said to have been produced beyond the time required by the Act. Although Dr Holmes purported from time to time to allow the committee members extensions of time to get the report to the Determining Authority, his extensions of time are said to have been invalid. Particulars are given of the dates the extensions were granted. 34 In the application orders are sought declaring various of the steps in the process to be invalid, setting aside or quashing the decisions taken during the process and declaring that Dr Saint has not engaged in inappropriate practice. Injunctive relief is claimed. The Applicant's Claim for Discovery 35 Dr Saint has sought discovery of a number of classes of documents in relation to his application. His claim for discovery is supported by an affidavit sworn by his solicitor, Ms Bahemia on 7 July 2005. A wide range of documents is sought which are said to be relevant to the various processes set out in the re-amended statement of claim and the decisions associated with those processes. As a matter of convenience the classes of documents claimed are attached to these reasons as Annexure A. 36 The respondents do not dispute that discovery can be ordered in proceedings for judicial review on normal principles applicable in civil proceedings. It is contended however that the nature of the proceedings may affect the exercise of the discretion to order discovery. The respondents refer to O 15 r 15 which provides, inter alia: 'The Court shall not make an order… for the filing or service of any list of documents or affidavit or other document or for the production of any document unless satisfied that the order is necessary at the time when the order is made.' The appropriateness of discovery and its scope is to be determined by reference to the proceedings and the matters in issue in them. As is pointed out in the respondents' submissions discovery in judicial review proceedings will not always be appropriate and is likely to be more circumscribed than in other claims in which factual matters play a more prominent role. Judicial review proceedings focus upon errors of law or process in relation to decisions involving the exercise of statutory administrative powers. Discovery will be ordered in favour of an applicant where the applicant shows some evidence to ground a suspicion that he or she has a good case or where it is necessary for the fair disposition of the case - Nestle Australia Ltd v Federal Commissioner of Taxation (1986) 10 FCR 78 at 82-83; Hart v Deputy Commissioner of Taxation (2002) 49 ATR 656 at [10]. Where reasons for a decision have been supplied and the attack is upon the reasoning, then generally speaking no occasion for an order for discovery will arise. 37 The essential principles were not in dispute between the parties. However on behalf of Dr Saint it was submitted that his application is one in which a significant number of facts are in issue between the parties and in which discovery of documents is required either to advance his case or to damage that of the respondents. 38 Against that background I propose to deal with each of the categories claimed. Category 1 - Documents in the Possession of the Commission 39 The first sub-category of documents claimed is described broadly in par 1.1 as: 'All documents relating to Counselling Procedures - other than those listed in the particulars to paragraph 4 of the Re-amended Statement of Claim…' These are said to include but not be limited to three specified groups which appear in more detail in Annexure A. 40 Dr Saint asserts that the factual matter in dispute in relation to the Counselling Procedures is whether Dr Laundy acted in compliance with the Commission's publications. It does not appear however from the pleading that a breach of the alleged Counselling Procedure has any statutory or other legal significance. 41 The respondents contend in connection with this category that par 4 of the re-amended statement of claim sets out publications about Counselling Procedures. The defence admits that the material was published. No issue arises on the pleadings as to the fact of or breach of any procedure other than that described as the Counselling Procedure in the re-amended statement of claim par 4. It is said that Dr Saint does not seek discovery of the documents referred to in the particulars. However there are no other documents relevant on the pleading. I accept that submission and reject the application for discovery in respect of sub-category 1.1. 42 Sub-category 1.2 concerns all documents relating to an interview held on 18 January 2000. However as the respondents submit, the only matter apparently arising from that interview on the pleadings is the claim, at par 6 of the re-amended statement of claim, concerning a document delivered to Dr Saint and thus in his possession. I reject the claim for discovery of the documents in sub-category 1.2. 43 Sub-category 1.3 seeks all documents referred to or considered by or otherwise available to Mr Garrity when drafting a letter of 23 March 2000 to the applicant. In this connection reliance is placed upon pars 6A, 6B and 7 of the re-amended statement of claim and par 4A of the amended defence. In the amended defence it is admitted that Mr Garrity wrote the pleaded letter. It is also pleaded that he referred the case to the Medical Director, Professional Review Division of the Commission for a further opinion on the basis that a case management conference held on 7 June 2000 considered that Dr Saint might be considered to be practising inappropriately. It is also said that he wrote to Dr Saint and advised him that his case had been referred for further opinion. This all relates to an asserted breach of Counselling Procedures, the legal significance of which does not emerge with any clarity from the re-amended statement of claim. As the respondents submit no issue arises on the pleadings as to any of the documents referred to in sub-category 1.3. Dr Saint pleads the letter was sent and the Commission admits that it was. The content of the letter is proved by the letter itself. It is asserted, correctly, that pars 6B and 7 of the re-amended statement of claim do not relate to any of the matters referred to in the request for discovery. I reject the claim for discovery in sub-category 1.3. 44 Sub-category 1.4.1 seeks all documents referred to or considered by or otherwise available to Mr Garrity in making the referral to Dr Mould. Category 1.4.2 seeks all Provider Summary Statistics referred to, or considered, or otherwise available to, Mr Garity in making that referral. This appears to have been an administrative step rather than a step having any legal significance. The Commission contends that the pleadings do not raise issues to which the categories of documents claimed are relevant. I agree with that and reject the claim for the documents in sub-categories 1.4.1 and 1.4.2. 45 Sub-category 1.5 seeks documents before a case management conference held on 7 June 2000 including all Provider Summary Statistics. Reliance is placed upon par 6B of the re-amended statement of claim, par 4B of the amended defence and par 1A of the amended reply. Again, I am not satisfied that this category of documents will have any useful purpose in relation to the relief sought in these judicial review proceedings. I reject sub-category 1.5. I also reject sub-category 1.6 which claims all documents relating to any counselling of Dr Saint by the Commission. That goes far wider than anything which is relevant to the relief properly claimed. 46 Sub-category 1.7 seeks all documents relating to details of all services rendered by Dr Saint and initiated during the two year period immediately preceding the date of the referral but excluding those details of which had been provided for the period 1 January 1999 until 31 December 1999. Reliance is placed upon par 10 of the re-amended statement of claim. That paragraph however asserts invalidity of the Investigative Referral solely upon the basis that it was related to services provided during the period of one year when it should have covered a two year period. The documents claimed are not relevant to the issue raised by par 10. This sub-category is rejected. 47 Sub-category 1.8 seeks all policy documents of the Commission relating to matters which should be taken into account when making an Investigative Referral. Reliance is placed upon pars 12A and 23A of the re-amended statement of claim. Paragraph 12A of the re-amended statement of claim alleges that Dr Mould took account of irrelevant considerations and failed to take into account relevant considerations in making the Investigative Referral. Paragraph 23A refers to the application of amended versions of the Act and Regulations which should not have been applied to Dr Saint's case. Neither paragraph in the pleadings has anything to say about policy or policy documents. The Commission says that the identification of relevant and irrelevant considerations is done by reference to the legislative scheme and not by reference to policy documents. There is nothing on the pleadings to suggest that the decision to refer Dr Saint's conduct for investigation was done pursuant to any policy. I reject the application in respect of documents in category 1.8. 48 Category 1.9 is a dragnet claim for 'all documents relating to the actions taken by [Dr Holmes] and the [Commission], including …'. In the context of a judicial review application on defined grounds of want of procedural fairness, improper exercise of power, absence of evidence and error of law, no basis is laid for such a wide-ranging claim. I reject the claim for discovery in category 1.9. 49 Category 2 relates to documents in Dr Holmes' possession. Dr Saint wants discovery of 'all documents' in Dr Holmes' possession taken into account in making each of his findings contained in pars 2, 6, 10, 11 and 13 of his report dated 18 May 2001. The report is said to have been attached to the Adjudicative Referral. 50 The establishment of the committee and the Adjudicative Referral of Dr Saint's conduct to that committee are said to have been invalid because of everything pleaded in pars 7-10, 12-16, 18-20 and 23A-25 of the re-amended statement of claim. This includes: