Saitta Pty Ltd v Commonwealth

[2001] FCA 817

Federal Court of Australia|2001-07-01|Before: Gray J

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Federal Court of Australia

Decision date

2001-07-01

Before

Gray J

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Judgment (21 paragraphs)

[1]

Introduction 1 The applicants in these two proceedings are both approved providers of aged care under the Aged Care Act 1997 (Cth) ("the Aged Care Act"). The first respondent is the Commonwealth of Australia. The second respondent is the Minister for Aged Care, the minister responsible for administering the Aged Care Act. The third respondent is the Secretary of the Department of Health and Aged Care, the department responsible for administering the Aged Care Act. The fourth respondent is the Aged Care Standards and Accreditation Agency Ltd, a corporation which operates under the name "the Aged Care Standards Agency" and performs certain functions under the Aged Care Act. 2 On 18 August 2000, Saitta Pty Ltd ("Saitta") commenced proceeding V622 of 2000. It seeks declaratory and injunctive relief, and damages, with respect to various decisions and conduct of the first, second and third respondents, which led to the imposition of sanctions against Saitta under s 65-1 of the Aged Care Act, and the refusal to certify Saitta's residential care service under s 38-1 of the Aged Care Act. More details of the decisions and conduct, and of the relief sought, appear later in these reasons for judgment. 3 On 28 August 2000, Neviskia Pty Ltd ("Neviskia") commenced proceeding V641 of 2000. It seeks similar declaratory and injunctive relief, and damages, with respect to decisions and conduct of the first, second and third respondents, which led to the impositions of sanctions against Neviskia under s 65-1 of the Aged Care Act. Further details of the decisions and conduct, and of the relief sought, appear later in these reasons for judgment.

[2]

[5]

(i) revoking or suspending the certification of a residential care service in respect of which the approved provider has not complied with its responsibilities; … (l) such other sanctions as are specified in the Sanctions Principles." 10 Division 67 of Pt 4.4 sets out an extensive procedure for imposing sanctions. Section 67-1 provides: "(1) The Secretary must not impose sanctions on an approved provider for not complying with one or more of its responsibilities under Part 4.1, 4.2 or 4.3 unless the Secretary has completed each of the following steps: (a) giving to the approved provider a notice of non-compliance (see section 67-2); (b) giving to the approved provider: (i) a notice of intention to impose sanctions (see section 67-3); or (ii) a notice to remedy the non-compliance (see section 67- 4); or (iii) a notice of intention to impose sanctions in respect of a specified part of the non-compliance (see section 67-3) and a notice to remedy the remainder of the non- compliance (see section 67-4); (c) giving to the approved provider notice of the Secretary's decision on whether to impose sanctions (see section 67-5). (2) However, paragraphs (1)(a) and (b) do not apply if the Secretary is satisfied that, because of the approved provider's non-compliance, 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." The remaining provisions of Div 67 provide for the content, and the manner of giving, of the various notices required. For the purposes of these reasons for judgment, it is unnecessary to set out those provisions. 11 Part 2.6 of the Aged Care Act makes provision for an approved provider to apply to have its residential care service certified under that Part. Section 37-1 provides that an approved provider can only charge accommodation bonds or accommodation charges or receive concessional resident supplements in respect of a residential care service if the service has been certified under the Act. 12 Many of the provisions of the Aged Care Act refer to principles made pursuant to the Act. For instance, s 63-1, found in Pt 4.3, relating to accountability, provides that the responsibilities of approved providers include responsibilities specified in "the Accountability Principles". Section 80-1, found in Pt 5.4, which deals with accreditation grants, refers to "the Accreditation Grant Principles". It gives examples of matters with which those principles may deal, such as the procedures to be followed in deciding whether to accredit a residential care service, including the reconsideration of decisions on accreditation, and the matters to be taken into account in making, or reconsidering, those decisions. The power to make such principles is found in s 96-1(1), which provides: "The Minister may make Principles, specified in the second column of the table, providing for matters: (a) required or permitted by the corresponding Part or section of this Act specified in the third column of the table to be provided; or (b) necessary or convenient to be provided in order to carry out or give effect to that Part or section."

[8]

(b) a decision made on 21 July 2000 that Saitta had not complied with its responsibilities under s 63-1 of the Act ("the non-compliance decision") which followed the issuing of a notice of non-compliance dated 18 May 2000; (c) the issuing of a notice of intention to impose sanctions dated 21 July 2000 ("the sanctions notice"); (d) a decision to impose sanctions under s 67-5 made on 16 August 2000 ("the sanctions decision"); and (e) a decision made on 4 August 2000 to refuse an application for the certification of Saitta's residential service under Pt 2.6 ("the certification decision"). 17 Neviskia is the proprietor of a residential care service conducted at 3 Kenilworth Parade, Ivanhoe under the name "Kenilworth Nursing Home". Its application relates to the following decisions and conduct under the Aged Care Act: (a) the preparation, use, disclosure and publication by the fourth respondent of Review Audit Report dated 22 December 1999 in relation to Kenilworth Nursing Home ("the first Review Audit Report"); (b) the preparation, use, disclosure and publication by the fourth respondent of a Review Audit Report dated 31 January 2000 in relation to Kenilworth Nursing Home ("the second Review Audit Report"); (c) the preparation, use, disclosure and publication by the fourth respondent of a Serious Risk Report dated 9 March 2000 in relation to Kenilworth Nursing Home ("the Serious Risk Report"); (d) the issuing of a notice of intention to impose sanctions dated 10 March 2000 ("the first sanctions notice") which followed the issuing of notices of non-compliance dated 11 January 2000 and February 2000, and a decision that Neviskia had not complied with its responsibilities under s 63-1 of the Act; (e) a decision to impose sanctions under s 67-5 made on 24 March 2000 ("the first sanctions decision"); (f) the issuing of a further notice of intention to impose sanctions dated 20 April 2000 ("the second sanctions notice"); and (g) a decision to impose further sanctions under s 67-5 made on 24 May 2000 ("the second sanctions decision"). 18 Both applicants have exercised their rights of review under Pt 6.1 of the Aged Care Act in respect of those decisions which are amenable to that review. 19 On 4 September 2000, at the request of Saitta, the third respondent made reconsideration decisions under s 85-5, which confirmed both the certification decision and the sanctions decision. On 7 September 2000 Saitta applied to the AAT for review of those decisions. The Tribunal delivered its decision and reasons for decision in respect of both reviewable decisions on 22 December 2000. The decision of the AAT was to set aside the certification decision and the sanctions decision. 20 Neviskia has also successfully sought merits review under Pt 6.1. On 25 July 2000 and 11 September 2000, at the request of Neviskia, the third respondent made reconsideration decisions under s 85-5, which confirmed the first and second sanctions decisions. On 5 September 2000 and 12 September 2000 respectively, Neviskia applied to the AAT for review of each of those decisions. On 22 December 2000, the Tribunal delivered its decision and reasons for decision in respect of both reviewable decisions. The decision of the Tribunal was to set aside the first sanctions decision and vary the second sanctions decision so that the sanctions were imposed only for the period 31 January 2000 to 2 March 2000.

[14]

The other causes of action 31 The applicants seek declarations as to the invalidity of the decisions and conduct to which their claims relate. They wish to rely on declarations as to the invalidity of those decisions and conduct to found claims for damages, based on alleged breaches of statutory duties and common law duties of care. 32 The applicants seek to persuade the Court that the Accreditation Grant Principles 1999, made pursuant to s 96-1 of the Aged Care Act are beyond the power conferred by that section, because they deal with matters that go beyond accreditation. They give to the fourth respondent powers of enforcement which extend beyond matters of accreditation under Pt 5.4 of the Aged Care Act. Alternatively, the applicants claim that the use of material gathered under powers contained in the Accreditation Grant Principles 1999 for purposes of accountability is unlawful. Both arguments are based on the form of s 96-1. It is said that, because of the arrangement of the table in that section, with separate items specified for accountability principles and accreditation grant principles, each set of principles must be entirely self-contained and segregated from any other set of principles, both in their terms and in the uses made of them. 33 This argument is bound to fail. There is nothing about the arrangement of the table in s 96-1 that suggests that the legislative intent was that such an irrational result would follow from the manner in which the section is set out. From the scheme of the Aged Care Act, it is clear that the dichotomy suggested by counsel for the applicants is a false one. The Act clearly envisages that accreditation bodies will play a role in relation to accountability. Section 63-1(l), which relates to accountability, specifies that one of the responsibilities of approved providers is to allow people acting for accreditation bodies to have such access to the residential care service as is specified in the Accountability Principles. It would be an absurd result if an accreditation body could not be authorised to accredit by reference to the accountability standards, or to report breaches of those standards.

[15]

34 The decisions and conduct of which the applicants complain all rest on the exercise of powers in the Aged Care Act. No ground was advanced to impugn them. The provisions containing the powers all support the powers exercised. There is therefore no basis for the grant of any declaration. Further, declarations would be futile, because they could not form the basis of claims for breach of statutory duty or negligence at common law in the circumstances of the present cases. 35 For the applicants to succeed in a claim for breach of statutory duty, they would have to rely on a provision of a statute giving rise to a duty on the part of one or more of the respondents to act in relation to the applicants in a particular way. They would have to persuade the Court that the provision disclosed an intention on the part of the legislature that a failure to act in that way was to give rise to an action for damages on the part of a person affected adversely by a failure to act in the prescribed way. In this respect, it is relevant to enquire whether the legislation is designed to benefit a particular class of persons. See Mallinson v Scottish Australian Investment Co Ltd (1920) 28 CLR 66 at 70 - 71 and Darling Island Stevedoring and Lighterage Co Ltd v Long (1956) 97 CLR 36 at 49. Counsel for the applicants was unable to point to any such provision. 36 At its best, the argument on behalf of the applicants is that the duty was to make the correct decision at each stage of a process. Such a duty could not give rise to a right to sue for breach of statutory duty. The argument put on behalf of the applicants seemed to assume that the object of the Aged Care Act is to confer on approved providers of aged care the right to conduct profitable businesses. An examination of the Aged Care Act dispels such a notion very quickly. The objects set out in 2-1 mention providers only in relation to their accountability. It is plain that the Aged Care Act is directed to the benefit of those receiving and requiring care. The use of private businesses to provide care is incidental to the purpose of the legislation and subordinate to it. The applicants could not succeed in claims for breach of statutory duty. 37 The declarations the applicants seek would also not assist them to sue for negligence at common law. In Crimmins v Stevedoring Industry Finance Committee [1999] HCA 59, (1999) 200 CLR 1, McHugh J observed at [82]: "Public law concepts of duty and private law notions of duty are informed by differing rationales. On the current state of the authorities, the negligent exercise of a statutory power is not immune from liability simply because it was within power, nor is it actionable in negligence simply because it is ultra vires."

[16]

38 It is well established that a breach of a public law right by itselfgives rise to no claim for damages; a damages claim must be based on a private cause of action: Cubillo v Commonwealth [2000] FCA 1084, (2000) 103 FCR 1, at [1205]. The applicant's claim in negligence is based solely on the alleged invalidity of decisions and conduct of the respondents. No allegation of want of care is pleaded with any particularity. The claim in negligence is unlikely to succeed. 39 In Saitta's application, there is expressed a claim for damages for breach of contract. In the statement of claim, there is an allegation that the review audit was conducted pursuant to an agreement between the applicant and the respondents. The alleged terms of the agreement are: that the review audit would be conducted in a fair and impartial manner; that the fourth respondent would conduct the review audit in an open and frank way; that at the conclusion of the review audit the fourth respondent's assessors would conduct an exit interview at which they would discuss with Saitta's representative any concerns they had about any non-compliance by Saitta with the Aged Care Standards; that the fourth respondent would prepare and submit to the third respondent a review audit report as to any non-compliance by Saitta with the Aged Care Standards for the purposes of the third respondent considering a proposed fresh application by Saitta for certification under the Aged Care Act in place of an earlier application which had been refused by the third respondent and was the subject of a request for reconsideration under s 85-5 of the Aged Care Act; and that the third respondent would consider and take into account the report on the review audit for the purposes of deciding on the proposed certification application. 40 Breach of each of these terms is alleged. In the case of the first three terms, the breach is alleged in the barest possible terms, ie. that the audit review was not conducted in a fair and impartial manner, or in an open and frank way, and that the assessors did not conduct the contemplated exit review. Breach of the fourth term is pleaded in a different way. It is alleged that the fourth respondent did not prepare and submit the review audit report for the purpose contemplated, but submitted a report which it knew or ought to have known was incomplete and incapable of being used for any such purpose. Breach of the fifth term is put on the basis that the third respondent proceeded to consider and determine the certification application without taking into account a review audit report in accordance with the agreement when he knew or ought to have known that the review audit report submitted to him was incomplete and could not be relied on for the purposes of the certification application. The manner in which these breaches are pleaded makes it clear that it is the content or quality of the report about which Saitta complains, not any failure to comply with the alleged agreement by failing to prepare a report, or by failing to take such a report into account in the making of a decision on the certification application. Potentially, the allegations go further than just the inaccuracy of the review audit report. The pleading could be taken to suggest that there was some standard that the report was required to reach, to fulfil a contractual obligation to Saitta. 41 The respondents had a public duty under the Aged Care Act to perform the functions required by that Act in accordance with the requirements of the Act. A promise to perform an existing public duty is not enforceable as a contract, because it is not a sufficient consideration, at least where the performance of the duty would confer no benefit on the promisee. See Butterworths, Halsbury's Laws of Australia, vol 6, 'Contract' at [110-715]. Further, as Mason J said in Ansett Transport Industries (Operations) Pty Ltd v Commonwealth (1977) 139 CLR 54 at 74 - 5: "[T]he public interest requires that neither the government nor a public authority can by a contract disable itself or its officer from performing a statutory duty or from exercising a discretionary power conferred by or under a statute by binding itself or its officer not to perform the duty or to exercise the discretion in a particular way in the future." 42 The conduct of a review audit is a matter of statutory duty. A promise to perform it, or to perform it in a particular manner, could not be enforceable as a matter of public policy. Saitta could not therefore succeed in making out a case of breach of contract. 43 It follows that there is neither ground nor reason to make declarations in respect of the decisions and conduct of which the applicants complain. A declaration of right is a remedy the Court can grant pursuant to s 21 of the Federal Court of Australia Act 1976 (Cth) in relation to matters within its original jurisdiction. The Court is empowered to make such declarations whether or not any consequential relief is or could be claimed and a declaration may be the only relief sought in a proceeding. For the Court to entertain an application for a declaration, however, there must be some right sought to be vindicated. If the applicants cannot raise a viable cause of action on the basis of which a declaration could be granted, they cannot maintain a proceeding in which only a declaration is sought. The remedy of a declaration is also a discretionary one, which will not be granted where there is no purpose in granting it. If the applicants could not use a declaration of right to found some other remedy, it will not be granted. 44 There remain the applicants' claims in defamation and for misleading and deceptive conduct in contravention of s 52 of the Trade Practices Act 1974 (Cth). These claims rest on the inclusion in the various Review Audit Reports of statements that are alleged to be untrue and damaging to the reputations and businesses of the applicants. With respect to the latter, it is plain that any conduct of the fourth respondent in including information in such a report was not in trade or commerce, but in the exercise of a statutory power. With respect to the claim for defamation, Pt 6.2 of the Aged Care Act contains detailed provisions for the protection and, in some circumstances, publication of information relating to the affairs of an approved provider. Section 86-9(1)(l) expressly permits the third respondent to publish: "information about the approved provider's performance in relation to responsibilities and standards under this Act".

Saitta Pty Ltd v Commonwealth

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