Sean Investments Pty Ltd v. MacKellar, The Honourable Michael John Randal, The Minister for State for Health of the Commonwealth of Australia [1981] FCA 191

Federal Court of Australia|1981-07-01|Before: Deane J

CATCHWORDS Administrative law - application for increase in scale of fees applicable to approved nursing home - regard to costs necessarily incurred in providing nursing home care - extent to which Minister may rely upon Committee's report - grounds

of review of Minister's decision under Administrative

National Health Act, 1953, ss. 4, 40OAA, 40AE, 117A, 117B, 122, 126, 127, 130

) NEW SOUTH WALES DISTRICT REGISTRY ) NO. 133 of 1980

THE HONOURABLE MICHAEL JOHN RANDAL MacKELLAR, THE MINISTER FOR STATE FOR HEALTH OF THE COMMONWEALTH OF AUSTRALIA

) NEW SOUTH WALES DISTRICT REGISTRY ) NO. 133 of 1980

THE HONOURABLE MICHAEL JOHN RANDAL MacKELLAR, THE MINISTER FOR STATE FOR HEALTH OF THE COMMONWEALTH OF AUSTRALIA

Sean Investments Pty. Limited ("the applicant") conducts, in the Sydney suburb of Banksia, a nursing home known as the Rockdale Convalescent and Nursing Home ("the Rockdale Nursing Home"). It leases the premises on which the nursing home is conducted from A. & L. Holdings Pty. Limited which is a company not otherwise associated with the

applicant or any of the applicant's shareholders. Those

premises are an "approved nursing home" under s.40AA of the

National Health Act, 1953 ("the Act"). Under s.40AA(6)(c)(i) of the Act, the approval of the premises as an approved nursing home is subject to a condition that the fees charged in respect of nursing home care of a qualified nursing home patient will not exceed such fees as are from time to time applicable in accordance with such scale of fees as is determined by the Permanent Head of the Department of Health in relation to the nursing home. The phrase "nursing home care" is defined by s.4(1) of the Act as meaning "accommodation and nursing care of a kind provided in a

The original lease of the subject premises was for a term of five years commencing on 1 December, 1975. It provided for an adjustment of rent for each of the third and subsequent years by reference to variations in the Consumer Price Index for Sydney measured against a nominated base figure. In October, 1977, the applicant applied for an increase in the scale of fees applicable to it under the conditions of its approval to cover the increased rent which would be paid, by reason of this adjustment provision, for the year commencing 1 December, 1977. The Permanent Head of the Department of Health refused to grant that application. The applicant requested a review of that refusal by the Commonwealth Minister for Health. The Minister, acting upon

a report by the Nursing Homes Fees Review Committee for New

South Wales ("the Committee"), confirmed the refusal. The applicant successfully applied for a writ of mandamus against the Minister in the High Court of Australia (see Re: R.J.D.

Hunt; ex parte Sean Investments Pty. Limited (1979) 53

A.L.J.R. 552). Ultimately, the Minister, having received a further report from the Committee, allowed the increase in

The increases in rent in each of the years commencing 1 December, 1978 and 1 December, 1979 led to further applications for increases in fees. These applications were apparently rejected by the Permanent Head of the Department of Health. Applications for review of the decisions of the Permanent Head were made to the Minister who referred the matter to the Committee. The Committee, in a report to the Minister, recommended that the fee scale be adjusted in the manner sought by the applicant to absorb the additional rent as from 1 December, 1978. With regard to increases in fees sought to absorb the further addition to the rent for the year commencing 1 December, 1979, however, the applicant had only mixed success before the Committee. The applicant had sought a further increase in fees of 23 cents per bed day in respect of all its beds to absorb that additional outgoing. The Committee recommended that an increase in fees of 23 cents per bed day be allowed only in relation to four bed wards and that there be no further

increase in fees in relation to one, two and three bed wards.

The Minister, in conformity with the Committee's recommendations, allowed the increases sought by the applicant in respect of all beds to cover the December, 1978 increase but allowed the increase sought by the applicant, to absorb the December, 1979 increase in rent, only in relation to beds in four bed wards. He confirmed the decision of the Permanent Head refusing any increase in fees in respect of beds in one, two and three bed wards as a result of the

The applicant, which remains as tenant of the premises under a new lease, now applies to this Court for an order of review in respect of the decision of the Minister to confirm the refusal to increase fees in respect of beds in one, two and three bed wards to cover the increase in rent from 1 December, 1979. The application is made pursuant to the provisions of s.5 of the Administrative Decisions

(Judicial Review) Act, 1977. The grounds of the application

are those set out in paragraphs (e), (f) and (h) of s.5(1) of that Act. Those paragraphs specify, respectively, the following grounds as included among the grounds upon which an

""(e) that the making of the decision was an improper exercise of the power conferred by the enactment in pursuance of which it was purported to be made;

(f) that the decision involved an error of law, whether or not the error appears on the record of the decision;

(h) that there was no evidence or other material to justify the making of the decision".

(Judicral Review) Act, 1977 provides that the reference in

paragraph (e) (supra) to an improper exercise of a power

shall be construed as including, inter alia, a reference to ~

"(a) taking an irrelevant consideration into account in the exercise of a power;

(b) failing to take a relevant consideration into account in the exercise of a power;" Section 5(3) of the Act provides, in so far as is relevant for present purposes, that the grounds specified in paragraph (h) (supra) shall not be taken to be made out unless the person who made the decision based the decision on the

existence of a particular fact and that fact did not exist.

Administrative Decisions (Judicial Review) Act, 1977, the

applicant requested the Minister to furnish to it "a statement in writing setting out the findings on material questions of fact, referring to the evidence or other material on which those findings were based and giving the reasons for decision". The statement furnished by the Minister, in answer to that request, indicates that while the Minister accepted the Committee's recommendation in refusing

to grant the full increases which the applicant sought, he

brought his own mind to bear and reached his own decision on the matter the subject of that report. In particular, the statement, to which more detailed reference will subsequently be made, highlights a number of matters, including some conclusions of the Committee, to which the Minister

upon the Minister's decision was to the following effect:

(i) That the Minister, by adopting the report of the Committee, failed to exercise the independent discretion entrusted to him by s.40AE(3) of the Act;

(ii) That the Minister misunderstood the effect of the Committee's report in important respects, namely,

(a) in considering that the applicant's agreement to the lease arrangements which it entered was seen by the Committee as insufficiently constrained by normal commercial considerations, and

(b) in considering that the Committee was of the view that the proposed fee increases would have adverse effects on the financial well-being of the patients.

(ii1) That both the Committee and the Minister relied on irrelevant matters in that

(a) they considered the results of an increase in fees rather than the increased costs which warranted an increase of fees; and

(b) they considered the question whether an increase of fees should be granted by

(iv) That both the Committee and the Minister failed to pay regard to relevant matters, namely:

(a) whether there should be a partial increase in fees in respect of beds in one, two and three bed wards;

(b) the number of pensioners and the number of patients in intensive care in the nursing home;

(d) the question of comparable rentals; (e) that other nursing homes which were regarded as comparable were owner operated. (v) That there was no evidence or other

(a) that the rental paid by the applicant exceeded or was other than that determined by normal market place forces; or

(b) that the said rental was excessive in the circumstances.

Before examining these grounds of attack, it is convenient to consider some aspects of the effect of the relevant provisions of the Act and to make some general comments as to what I consider to be the function of this Court in reviewing

a decision of the Minister pursuant to the Administrative

Approval of premises as an "approved nursing home" pursuant to s.40AA is not necessary to enable the premises lawfully to be used for the purposes of a nursing home. Such approval is necessary to enable a nursing home to receive Commonwealth benefits in respect of "nursing home care" of uninsured patients. I was informed that the current amount of that benefit in New South Wales is $18.10 per patient per day. The conditions attached to approval of premises as an "approved nursing home" should, therefore, be seen not as conditions attached to the relaxation of a prohibition against engaging in a business but as conditions of the grant of qualification to enjoy the benefits of Commonwealth subsidization. The figures before me demonstrate that for at least some New South Wales "approved nursing homes", including the Rockdale Nursing Home, the Commonwealth

subsidy constitutes more than two thirds of gross income.

Section 40AA(7) provides that the Permanent Head shall, in determining the scale of fees in relation to a nursing home, have regard to "costs necessarily incurred in providing nursing home care in the nursing home". It is established by the decision of the High Court in Re R.J.D.

Hunt; Ex parte Sean Investments Pty. Limited (supra) that

that provision is applicable not only to the initial fixing of a scale of fees by the Permanent Head but to the decision

of the Permanent Head on an application to alter that scale

of fees and to a decision of the Minister upon a request to review such a decision of the Permanent Head. That case also establishes that the effect of s.40AA(7) is that the Permanent Head (or the Minister on review) is required to take such costs into account and to give weight to them as a fundamental element in making his determination. On the other hand, it appears clearly from both the major judgments in that case that neither the Permanent Head nor the Minister is confined to considering only such costs and what constitutes an appropriate profit element. As Mason J. (with whom Gibbs J. agreed) commented (ibid, at p. 554), "the Permanent Head is entitled to have regard to other considerations which show or tend to show that a scale of fees arrived at by reference to costs necessarily incurred, with or without a profit factor, is excessive or unreasonable". Murphy J., who was the third member of the Court, dissented as to the ultimate decision that a writ of mandamus should issue. It does not, however, appear to me that there was real conflict between the views expressed by Murphy J. and the views expressed by Mason J. as to the effect of s.40AA(7) of the Act. In particular, I can see no conflict between the judgment of Mason J. and the following extract from the judgment of Murphy J. (ibid, at p. 556) with

"The Minister may adopt a general policy in regard to scales of fees, and deal with a review of fees for a nursing home in the light of that policy, but his determination or review must be in order

to arrive at an appropriate scale of fees for the particular nursing home. If the costs necessarily incurred are excessive for any reason whether inside or outside the control of the proprietor, it may be that the scale of fees the Minister determines is such that if those costs continue, the home can be conducted only at little profit or at a loss. If that result follows it is because the Minister is not engaged in determining a scale of fees according to a cost plus system; he is carrying out a statutory duty to determine what, in his opinion, is an appropriate scale of fees in relation to the approved nursing home".

the Minister of a decision of the Permanent Head are to be

found in sub-sections (2), (3), (4) and (5) of s.40AE of the

"(2) Where the Permanent Head does not alter the conditions in accordance with the application, the proprietor may, by writing under his hand, request the Minister to review the decision of the Permanent Head.

(3) Upon receipt of a request under the last preceding sub-section, the Minister shall, after such investigation of the matter as he considers necessary, either confirm or vary the decision of the Permanent Head, and advise the proprietor accordingly.

(4) Where a request under sub-section (2) of this section relates to the fees applicable to a nursing home, the Minister shall, as part of his investigation of the matter, refer the matter to the appropriate Nursing Homes Fees Review Committee of Inquiry established under Division 3A of Part VIII of this Act for examination and report to the Minister and shall not take any further action in the matter until he has received the report of the Committee.

in accordance with the decision as so varied". The effect of these provisions is that, where a request for review relates to fees, the Minister is obliged to refer the

matter to the appropriate Nursing Homes Fees Review Committee

The Nursing Homes Fees Review Committees of Inquiry are established under s.117A of the Act. That section provides that the Minister may establish in each State such a Committee of Inquiry which shall consist of three persons appointed by the Minister. Section 117B provides that a Committee of Inquiry established under s.117A "shall inquire into and report to the Minister on any matter referred to the Committee by the Minister" under s.40AE(4). These Committees of Inquiry were plainly envisaged as committees which would, either because of their composition or by virtue of their accumulated experience, be competent to inquire into, and report upon, applications for variations in the scale of fees applicable to a particular nursing home. A Committee of Inquiry 1s not bound by legal rules of evidence but may inform itself on a matter referred to it under s.40AE(4) in such manner as it thinks fit (s.122). It may summon a person to give evidence before it or to produce books, documents and

writings to it (s.126). It may examine on oath a person

appearing as a witness before it (s.127). A witness before a Committee has the same protection as a witness before the High Court (s.130). The Minister's statement of reasons indicates that the Committee of Inquiry for New South Wales "is an independent Committee whose members are not associated with the departmental fees determination and have relevant

It is apparent that the Act contemplates that the primary inquiry on any review by the Minister of a decision by the Permanent Head on a request to alter the conditions relating to the fees applicable to a nursing home shall be conducted by the appropriate Committee of Inquiry. Such a Committee possesses coercive powers to obtain oral evidence and access to material which are not possessed by the Minister. It is entitled to make recommendations to the Minister in respect of the matters which must be referred to it for inquiry and report. Indeed, in the ordinary case, one would expect that a Committee would make such recommendations. The Minister is, for his part, plainly entitled to pay regard to the Committee's report and any recommendations which it may contain: otherwise, there would be little point in having the preliminary inquiry by the Committee. A question arises, however, as to the extent to which the Minister may rely upon the Committee's report in reviewing the decision of the Permanent Head. In

particular, is the Minister entitled, if he thinks it

appropriate, simply to adopt the Committee's report and recommendations or is he obliged to review and assess for himself the evidentiary material and information upon which

The power conferred upon the Minister by s.40AE (3) ef the Act must be exercised personally by the Minister in the sense that it cannot be exercised for him by a responsible officer of his Department. The reason for this is that the decision of the Minister, under that sub-section, is by way of review of a decision of the Permanent Head of the Department and, even though the Permanent Head may commonly, as he did in the present matter, act through a delegate, it could scarcely have been the legislative intent that that review should be susceptible of being delegated either to the Permanent Head himself or to an officer in his Department under his authority. It may well be that it was this consideration which led the Parliament to provide for an inquiry by an independent committee whose report would be available to guide the Minister. The statutory requirement that there be a report from the Committee before decision by the Minister, the inquisitorial powers conferred upon the Committee, the nature of the decision, the realities of the functioning of responsible government and the limitations of human capacity combine to make unavoidable the conclusion that, having received the

Committee's report, the Minister is entitled to decide to

adopt it and any recommendations which it may contain without having examined and assessed for himself all the material which was before the Committee. Alternatively, he may decide to reject the report in whole or in part or to rely only on certain conclusions expressed in it. In this regard, I am

of the view that, while Taylor v. Public Service Board

((1976) 137 C.L.R. 208) cannot properly be regarded as an authority governing the present matter, the position of the Minister generally corresponds with the position of the Public Service Board after receiving a report from a delegate which was the subject of consideration by the High Court in that case. Speaking of the Board's position in dealing with a charge on misconduct, Barwick C.J., (ibid, at

++. the Board must itself take the responsibility of deciding the case, that is to say, the charge and the consequences of a positive finding upon it. But this does not mean, in my opinion, that the Board must itself hear the evidence and upon it found a conclusion of its own as to the truth or falsity of the charge. Clearly, in my opinion, the Board may delegate both the taking of the evidence and the making of a finding upon the evidence which is accepted as the relevant fact or circumstance. But, upon being apprised of the finding as to the proof of the charge, the Board may for itself adopt that finding as its own, without itself having made the finding upon a hearing of the evidence. It may adopt the report and recommendation of its delegate. Whether it is prepared so to adopt the finding of its delegate is a matter for itself to decide. No doubt, if it requires it, it may call for a detailed and reasoned report: but, in my opinion, it is not bound to do so".

Stephen J. commented (ibid, at p. 217) that the Board could, "had it chosen to do so, have entered upon an examination for itself of the evidence given before its delegate; equally it might, if it saw fit, form its conclusion without doing so, acting simply upon the information placed before it by the delegate". Murphy J. (ibid, at p. 226) suggested an important qualification that the Board would have been required to give the charged officer an opportunity to be

heard before it differed from the delegate's report in any

The decision of the Minister on a review pursuant to s.40AE(3) is not liable to be challenged before the Administrative Appeals Tribunal pursuant to the provisions of

jurisdiction of this Court, pursuant to the Administrative

Decisions (Judicial Review) Act, 1977, to review the

Minister's decision is a limited one. The Court is not entrusted with the duty or power to conduct a review on the merits of administrative decisions to which that section applies. It is restricted to a consideration of whether it appears that the decision under review is affected by one or more of the "grounds" specified in s.5(1) of that Act. Generally speaking, those grounds correspond to the established common law grounds for attacking the decision of an administrative decision maker. The Court must, in my

view, be vigilant to ensure that it does not, under the guise

of reviewing administrative decisions on questions of law, trespass in fields of administrative decision making in relation to which it possesses neither mandate nor special

In a case where the Minister simply adopts the report and recommendation of the Committee as his own, the result will not be that the decision becomes, for practical purposes, immune from review under the provisions of the

Administrative Decisions (Judicial Review) Act, 1977. In

such a case, the Minister, in simply adopting the report and recommendations of the Committe, will ordinarily also adopt any errors of law, including taking into account relevant considerations and failing to take into account irrelevant considerations, which might vitiate the Committee's report and recommendations with the consequence that the Minister's own decision can be attacked on the relevant ground under s.5 of that Act. Where the Minister does not adopt as his own the whole of the report and recommendations of the Committee but adopts a particular conclusion which the Committee reached, a similar position will obtain as regards any errors of law which might have the effect of vitiating the relevant

I turn to a consideration of the submissions made on behalf of the applicant. I shall consider them in the

(i) That the Minister failed to exercise the discretion entrusted to him by s.40AE(3

Administrative Decisions (Judicial Review) Act, 1977

discloses that the Minister had before him, in reaching his decision, the report of the Committee of 18 January, 1980 which related to the increase in fees sought as a result of the December, 1977 increase in rent as well as the report of the Committee of 28 August, 1980 which related to the increases in fees sought as a result of the increases in rent in December, 1978 and December, 1979. The statement also discloses that the Minister had before him a departmental minute concerning those reports of the Committee. Paragraph 9 of that departmental minute which is over the hand of the Director-General of Health (presumably New South Wales Division), states that the Director-General supports "the Committee's recommendations for your approval" and that, if the Minister agrees, a draft letter to the applicant is attached for his consideration. The Minister has written "Agreed" at the foot of this departmental recommendation thereby indicating his agreement with the Committee's

The statement pursuant to s.13 indicates, as has already been mentioned, that the Minister did more than simply accept the Committee's report. It indicates that he considered for himself a number of material questions of fact and advances a number of distinct reasons for the decision which he reached. Plainly, however, the Minister's conclusions on material questions of fact and reasons for decision are largely based upon the reports of the Committee which were before him. Some of those conclusions consist simply of statements that the Committee made a particular finding or recommendation. In particular, there are included under the "Findings on Material Questions of Fact", both a statement to the effect that the Committee had set out a particular table of comparison between the fees of five other nursing homes and the fees of the Rockdale Nursing Home and a statement that the Committee reported that it considered that a person who had acted on the applicant's behalf "might perhaps be criticized for agreeing too readily to the C.P.I. escalation formula on the understanding that the addational charges would be automatically passed into the fees scale and were thus not his problem". Among the "Reasons for Decision", there are included: a statement that "the Committee recommended that an increase should only be allowed to the extent of 23 cents per bed day for four-bed wards", the statement that "fees of comparable nursing homes were, on

the advice of the Committee, generally lower than those of

Rockdale Nursing Home even without allowing the increase", a statement that "the lessee's agreement to the lease arrangements was seen by the Committee as insufficiently constrained by normal commercial considerations and the Minister considers that costs included in nursing home fees should not exceed levels determined by normal market place forces" and a statement that "the proposed fees increases would in the view of the Committee have adverse effects on

The argument advanced on behalf of the applicant is that, whether one sees the Minister's decision as consisting simply of an acceptance of the Committee's report and recommendations or whether one sees it as being based, in part, on the Minister's acceptance of the above conclusions of the Committee, it is vitiated by error for the reason that the Committee did not, in its report, set out either the evidence or all of the factual material upon which the above conclusions or the ultimate recommendations were based. This being the case, so the argument proceeds, the Minister was required to have placed before him and consider for himself

all of that evidence and factual information (cf. Jeffs v.

New Zealand Dairy Production and Manufacturing Board [1967] 1

A.C. 551). The result, so it was said, was that the

Minister's decision involved an "error of law" within clause

(£) of s.5(1) of the Administrative Decisions (Judicial

It should be apparent from what has been written above that I do not accept the applicant's general attack on the Minister's decision. Regardless of whether the Minister decided simply to adopt the Committee's recommendations or whether, as the statement pursuant to s.13 indicates, he reached an independent decision based, at least in part, on the Committee's report generally and on specific conclusions reached by the Committee, the decision is not, in my view, vitiated by any general error of law. As I have already indicated, the Minister was, in my view, fully entitled to decide to accept and adopt the report and recommendations of the Committee without examining for himself the evidence and the factual material upon which that report and those recommendations were based. He was also, as I see the matter, entitled to accept, as the basis for his decision, particular conclusions and recommendations of the Committee established to inquire into, and report upon applications for increases in fees. It follows that this ground of attack

(ii) That the Minister misunderstood the effect of the

It is argued, on behalf of the applicant, that examination of the reports of the Committee discloses no proper basis for the Minister's conclusions, in the Statement

of Reasons, that the applicant's "agreement to the lease

arrangements were seen by the Committee as insufficiently constrained by normal commercial considerations" and that the "proposed fee increases would in the view of the Committee have adverse effects on the financial well-being of the

I entertain serious doubt as to whether this suggested error on behalf of the Minister involves an issue of law which can properly arise for consideration by this Court upon a review of the Minister's decision pursuant to the Administrative Decisions (Judicial Review) Act, 1977. It is, however, unnecessary that I pursue this question for the reason that examination of the reports of the Committee which were before the Minister has led me to conclude that it was open to the Minister to draw, from what the Committee wrote,

(1ii) That both the Committee and the Minister relied on irrelevant matters

conformity with the decision in In re Hunt; Ex parte Sean

Investments Pty. Limited (supra), it accepted that the

further increases in rental from 1 December, 1979 were "necessarily incurred" by the applicant within the meaning of s.40AA(7) of the Act. The Statement of Reasons pursuant to

s.13 of the Administrative Decisions (Judicial Review) Act,

1977 sets out as the first finding on material questions of

fact a finding that the rent increase from 1 December, 1979 was a cost necessarily incurred within the meaning of s.40AA(7) of the Act. It is clear that both the Committee and the Minister proceeded on the basis that the rent increase was a fundamental element in determining whether the increase in fees which the applicant sought should be

appears clearly from In re Hunt; Ex parte Sean Investments

Pty. Limited (supra), the Minister was entitled to have regard to other considerations which showed or tended to show that a scale of fees arrived at by reference to costs necessarily incurred, with or without a profit factor, was excessive or unreasonable. In this regard, the Act does not specify the other particular factors to which the Minister is entitled to have regard. The Permanent Head, and the Minister on review, must act on the basis that what is involved is the fixing or variation of a scale of fees for a particular nursing home in the circumstances applicable to that home. The particular considerations which are to be taken into account and the respective weight to be given to them is, however, to no small extent, a matter for the

Permanent Head and, on review, the Minister. In In re Hunt;

Ex parte Sean Investments Pty. Limited (supra, at p. 554)

Mason J., when referring to "other considerations" which may

show or tend to show that a scale of fees arrived at by

reference to costs necessarily incurred may be excessive or unreasonable, commented that it "may be that the rent paid by the proprietor of a nursing home, though a cost necessarily incurred, exceeds the prevailing rental which is paid for comparable premises ...". It was argued, on behalf of the

applicant, that that statement should be read as indicating

the only circumstances which, in the present case, would warrant a refusal to grant an increase in fees to cover the increase in costs. In my view, his Honour's comment cannot properly be so read. Mason J. was, as I read his judgment, doing no more than giving an example of a consideration which might warrant a refusal to allow an increase in fees to cover

The argument that both the Committee and the Minister considered the results of an increase in fees rather than the increased costs which warranted an increase of fees must, in my view, be rejected. It appears to me that both the Committee and the Minister placed the increased costs at the forefront of their consideration of whether the increase in fees sought should be granted. That this was so, is demonstrated most clearly by the increases in fees which the Minister, on the recommendation of the Committee, allowed. In so far as both Committee and Minister paid regard to the effect of an increase in fees on the overall fee level of the particular home and on the financial well-being of patients,

they took into account considerations which they were not

precluded from regarding as relevant to the question of the extent to which the increase in costs necessarily incurred should be absorbed by an increase in fees and the manner in which the burden of any increase in fees should be spread in

relation to beds in one, two, three and four bed wards.

Nor do I accept the argument that both the Committee and the Minister relied on an irrelevant matter in that they considered whether an increase of fees should be granted by reference to pensioners rather than patients. It does not appear to me to be established that either the Committee or the Minister was unmindful of the effect of the increase of fees on patients generally. It is true that it appears from the Committee's report, under the heading of "effects on patients", that the Committee was, to a significant extent, influenced in recommending against the increase in fees in respect of one, two and three bed wards by consideration of the position of patients who were in receipt of the age pension. In a context where the purpose of providing a Government subsidy to approved nursing homes is to reduce the costs to patients, the particular position of persons in receipt of a Government pension was however, in my view, a consideration which both the Committee and the

(iv) That both the Committee and the Minister failed to pay regard to relevant matters

As has been seen, a failure to take a relevant consideration into account in the exercise of a power is, under s.5({1) and s.5(2)(b), a permissible ground for attacking a decision pursuant to s.5 of the Administrative Decisions (Judicial Review) Act, 1977. This does not, however, mean that a party affected by a decision is entitled to make an exhaustive list of all the matters which the decision-maker might conceivably regard as relevant and then attack the decision on the ground that a particular one of them was not specifically taken into account. In this regard, I consider that the following comments of the United Kingdom Court of Appeal (Megaw, James and Geoffrey Lane LJJ.)

un Elliott v. Southwark London Borough Council ([1976] 1

W.L.R. 499 at p. 507), in relation to a local authority, are appropriate in respect of the recommendations of the Committee and the decision of the Minister in the present

"It is clear that the matters which the local authority should consider ... vary from case to case. It is not for the court to prescribe a list of matters which must always be considered or to prescribe which factors should be given more weight than others. It is worth repeating that the function of the court, where such issues are raised, is not to substitute its own opinion or decision on matters which Parliament has left to the judgment of the local authority but to decide whether the local authority in reaching its decision has acted in accordance with the statutory provisions".

In a case such as the present where relevant considerations are not specified, it is largely for the decision-maker, in the light of matters placed before him by the parties, to determine which matters he regards as relevant and the comparative importance to be accorded to matters which he so regards. The ground of failure to take into account a relevant consideration will only be made good if it is shown that the decision-maker has failed to take unto account a consideration which he was, in the circumstances, bound to take into account for there to be a

Of the five particular matters which the applicant submits were ignored by the Committee and the Minister, only one, namely whether where should be a partial increase in fees in respect of beds in one, two and three bed wards, appears to me to be a relevant matter which the Minister was bound to take into account in reaching his decision. As regards that matter, I am not persuaded that the evidence warrants a conclusion that either the Committee or the Minister failed to take it into account. To the contrary, the Committee's report in respect of the December, 1977 increase, which is referred to in the Committee's subsequent report and which was before the Minister at the time he made his decision, expressly refers to the considerations "which should properly be taken into account in determining the

measure of any increase to be allowed in the fees scale for

None of the other four particular matters, which are alleged to have been ignored both by the Committee and the Minister, appears to me to be a matter which the Minister was, as a matter of law, required specifically to take into account in reaching his decision. One of them, namely that the nursing home was not a nursing home operated by the owner but was a nursing home operated by a tenant, was, in any event, plainly taken into account by both the Committee and the Minister. Indeed, that consideration was the basis of the Committee's and Minister's view that the rent increase from 1 December, 1979 was a cost necessarily incurred within the meaning of s.40AA(7) of the Act. As regards the alleged failure to take into account that other nursing homes which were registered as comparable were owner operated, the material before the Court indicates that it was the applicant which suggested to the Committee that the other nursing homes

The remaining two matters which the Committee and Minister are suggested to have ignored are the number of pensioners and the number of patients in intensive care in the Rockdale Nursing Home and the question of rents charged for other leased nursing homes. At least to the extent to which those matters were raised before the Committee, the Committee may well have taken them into account in reaching

one or more of the conclusions which were adopted by the

Minister. As I have already said, the Minister was entitled to accept those conclusions without re-examining for himself all of the material upon which they were based. To the extent to which neither the Committee nor the Minister gave specific consideration to them however, they were not, as has been mentioned, matters to which the Minister was obliged, as

(v) That there was no evidence or other material to support a conclusion

exceeded or was other than that determined by normal market place forces; or

There is no evidence that either the Committee or the Minister reached conclusions in the terms stated in this submission. The views formed by the Committee as regards the rent payable under the lease and the adjustment clause contained in the lease appear from the Committee's two reports. The view upon which the Minister acted is set out in the reasons for decision furnished pursuant to s.13 of

the Administrative Decisions (Judicial Review) Act, 1977, as

"the lessee's agreement to the lease arrangements was seen by the Committee as insufficiently constrained by normal commercial considerations and the Minister considers that costs included in

nursing home fees should not exceed levels determined by normal market place forces".

On the view I take, it was open to the Committee, on the material before it, to reach the conclusions expressed in its reports as to the inclusion in the lease of the adjustment clause and as to the rent payable under the lease. It also appears to me that the view expressed by the Minister as to the effect of what the Committee said in its reports was a view which was open to him. It follows that this ground of attack upon the Minister's decision has not been

In the result, the applicant has failed to persuade me as regards any of the grounds for setting aside the decision of the Minister upon which it relied. The application must be dismissed with costs. I would mention that the applicant abandoned any reliance on an allegation of

a denial of natural justice which was raised by the

| certify that this and the preceding pages are 3 true copy of the reasons for Judgment herein of

At a glance

Court

Decision date

Before

Source

Judgment (154 paragraphs)

Cited By (16)