Whether the Chief Executive is under an obligation to provide procedural fairness when making a request that the Director review the provision of services
59 On 15 April 2019, the Chief Executive requested, pursuant to s 86(1) of the HI Act, that the Director undertake a review of Dr Yoong's provision of services for the period from 1 May 2017 to 30 April 2018.
60 The Chief Executive's delegate had earlier notified Dr Yoong on 19 February 2019 of her concerns and given him an opportunity to respond, but had not provided him with all the relevant documents available to her, nor all the information he had requested. Dr Yoong alleges that the failure to provide those documents and that information deprived him of a reasonable opportunity to make submissions about why the request should not be made.
61 The first issue is whether the Chief Executive owed Dr Yoong any obligation of procedural fairness when considering the exercise of her power under s 86(1) of the HI Act.
62 Section 86(1) of the HI Act provides that, "the Chief Executive Medicare may, in writing, request the Director to review the provision of services by a person during the period specified in the request".
63 Section 86(1) was brought into a form close to its current form under s 30 of the Health Insurance Amendment (Professional Services Review and Other Matters) Act 2002 (Cth) (the 2002 Amending Act). The Explanatory Memorandum for the Bill introducing that provision stated:
New Section 86 provides that the Commission may request the Director to review the provision of services by a person. The request by the Commission relates to the provision of services during the period specified in the request. The request emanates from an examination by the Commission of the person's Medicare and Pharmaceutical benefits claiming profile. On the basis of inferences drawn from the statistical data, the Commission may request a review by the Director. The Commission's request is merely an initiating step within the PSR review process, following which particular aspects of the services provision (in other words, conduct) by a person may be reviewed by the Director and investigated by a Committee. The concept of the request by the Commission replaces the current 'investigative referral'.
64 Section 86(1) of the HI Act does not expressly limit the circumstances in which the power may be exercised by the Chief Executive. The provision omits the requirement contained in an earlier iteration of s 86 that the Chief Executive consider whether the person under review, "may have engaged in inappropriate practice". However, s 88A(2) requires the Director to undertake the review if it appears to the Director that, "there is a possibility that the person may have engaged in inappropriate practice during the review period". On this basis, it may be inferred that the intention of s 86(1) is to require that the Chief Executive at least suspect that there is a possibility that the practitioner has engaged in inappropriate practice. However, since it is literally possible that any practitioner may have engaged in inappropriate practice, the "possibility" referred to in s 88A(2) must be understood to be one that is, not merely speculative, but based upon facts that reasonably ground the possibility. The same limitation must apply under s 86(1). I consider that s 86(1) requires that the Chief Executive must suspect on reasonable grounds that there is a possibility that the practitioner may have engaged in inappropriate practice during a specific period.
65 It may be observed that reg 27(1)(b) of the Human Services (Medicare) Regulation 2017 (Cth), provides that a prescribed function of the Chief Executive is to investigate the conduct of a person to decide whether to make a request under s 86(1) of the HI Act, "if there are reasonable grounds to suspect that a person has engaged in inappropriate practice". That investigation occurs at a stage anterior to making a request to the Director to conduct a review under s 86(1). A regulation cannot generally be used to interpret a statutory provision, but the regulation is consistent with my construction of s 86(1).
66 The requirement that the Chief Executive suspect on reasonable grounds that there is a possibility that the person may have engaged in inappropriate practice is a fairly low barrier. In George v Rockett (1990) 170 CLR 104, the High Court held at 115:
Suspicion, as Lord Devlin said in Hussien v. Chong Fook Kam [1970] AC 942, at p. 948, "in its ordinary meaning is a state of conjecture or surmise where proof is lacking: 'I suspect but I cannot prove.'" The facts which can reasonably ground a suspicion may be quite insufficient reasonably to ground a belief, yet some factual basis for the suspicion must be shown.
67 The High Court also held at 112:
When a statute prescribes that there must be "reasonable grounds" for a state of mind - including suspicion and belief - it requires the existence of facts which are sufficient to induce that state of mind in a reasonable person.
68 It is unsurprising that the barrier is a fairly low one, given that a request under s 86(1) of the HI Act merely enlivens the power of the Director to undertake a review, or investigation. The request requires the Director to decide under s 88A(1) whether to undertake a review, and to conduct a review in the circumstances described in ss 88A(2) and 89.
69 It is well established that a person whose rights and interests may be affected by an administrative decision made under a statutory power is entitled to procedural fairness unless there is a clear contrary legislative intention. In Annetts v McCann (1990) 170 CLR 596, Mason CJ, Deane and McHugh JJ held at 598:
It can now be taken as settled that, when a statute confers power upon a public official to destroy, defeat or prejudice a person's rights, interests or legitimate expectations, the rules of natural justice regulate the exercise of that power unless they are excluded by plain words of necessary intendment.
That statement of principle was affirmed in Plaintiff M61/2010E v Commonwealth (2010) 243 CLR 319 at [74].
70 To similar effect, in Minister for Immigration and Border Protection v WZARH (2015) 256 CLR 326, Kiefel, Bell and Keane JJ held at [30]:
[I]n the absence of a clear, contrary legislative intention, administrative decision-makers must accord procedural fairness to those affected by their decisions.
71 A decision by the Chief Executive to make a request to the Director under s 86(1) of the HI Act does not directly affect the rights or interests of the practitioner concerned, but triggers a process that may eventually result in financial and reputational harm to the practitioner. The parties proceeded on the tacit basis that the principle from Annetts v McCann applies to a decision under s 86(1) even though the potential affectation of rights or interests is remote from the decision. In the absence of argument upon the issue, I will proceed upon the assumption that the principle is engaged.
72 Section 86 of the HI Act does not expressly exempt the Chief Executive's exercise of power from a requirement to provide procedural fairness. If a clear statutory intention to exclude procedural fairness is to be discerned, it must be from the language, context, structure and purpose of the provisions comprising the PSR Scheme.
73 An important matter of context and structure is that the PSR Scheme provides a staged system of decision-making. The PSR Scheme has, as Griffiths J observed in NHDS, four tiers, each providing for different decisions to be made by different administrative decision-makers on the way towards a possible determination that a practitioner has engaged in inappropriate practice and of the consequences.
74 The PSR Scheme exposes practitioners to a process involving serious allegations with the potential for serious consequences, including findings of inappropriate practice, cessation of Medicare benefits and damage to personal and business reputation. In this context, it is unsurprising that the PSR Scheme has in place a carefully calibrated regime with inherent checks and balances to ensure a thorough and fair process. At various stages in the process, decision-makers are expressly required to take measures designed to provide procedural fairness.
75 However, as McHugh J observed in Re Minister for Immigration and Multicultural Affairs; Ex parte Miah (2001) 206 CLR 57 at [146]:
…Natural justice requirements are less likely to attach to decisions that are preliminary in nature. Examples are decisions to lay charges or commence disciplinary proceedings. The closer a decision is to having finality and immediate consequences for the individual, however, the more likely it is that natural justice requirements apply. …
76 In Ainsworth v Criminal Justice Commission (1992) 175 CLR 564 the plurality, quoting from South Australia v O'Shea (1987) 163 CLR 378 at 389, observed at 578:
It is not in doubt that, where a decision-making process involves different steps or stages before a final decision is made, the requirements of natural justice are satisfied if "the decision-making process, viewed in its entirety, entails procedural fairness".
77 Until this case, there has been no judicial consideration of whether the Chief Executive owes a practitioner obligations of procedural fairness when making a request under the current iteration of s 86(1) of the HI Act. However, several cases have held that that there is no such obligation under provisions concerning referral of possible inappropriate practice to the Director or to a Committee for investigation under earlier versions of the HI Act. Those cases have held, in the context of obligations of procedural fairness being provided for at later stages of a sequentially-stepped decision-making process, that procedural fairness does not apply at the initial stage of referral for investigation.
78 The first of these cases was Edelsten v Health Insurance Commission (1990) 27 FCR 56. In NHDS, Griffiths J at [147] distinguished Edelsten on the basis that since that decision, the PSR Scheme has been introduced and provides a significantly different process. In particular, His Honour noted that there are now the four tiers and that the second tier includes s 91 which gives the Director an express power to terminate a review. In NHDS, Griffiths J was concerned with s 89C, which applies following the conduct of a review by the Director, and requires the Director to choose between taking no further action, or entry into an agreement with the practitioner, or referral to a Committee. Edelsten was concerned with two decisions to make a referral to a Committee, which was at that time the step that initiated the review process. The current s 86(1) was inserted by the Health Insurance Amendment (Professional Services Review) Act 2012 (Cth) as a new initiating step, which precedes any referral to a Committee. The analysis in Edelsten as to whether any obligations of procedural fairness applied at the initiating step is instructive when considering the current s 86(1). In contrast, NHDS was concerned with procedural fairness at the later s 89C stage, so that Edelsten had much less relevance to that case.
79 In Edelsten, the Full Court considered s 82 of the HI Act, which gave the Minister, or delegate, an implied power to refer a matter to a Committee for investigation where there were reasonable grounds to suspect that a practitioner may have rendered excessive services. Section 94 then required the Committee, where it considered that the practitioner may have rendered excessive services, to conduct a hearing into the matter. The Full Court held that the rules of natural justice did not apply to either the delegate's referral or the Committee's decision. Justices Northrop and Lockhart held at 71:
We see no warrant for importing into any anterior stage of the matter, including the deliberations and decisions, if any, of the Minister's delegate or the Committee at the s 94(c) stage, a requirement that procedural fairness be afforded to Dr Edelsten.
80 Justice Davies held at 73:
[The delegate's] action did not breach principles of procedural fairness. [The delegate's] reference merely initiated an inquiry; it did not decide or formally recommend anything. It would be inconsistent with the Act to imply any requirement as to notice to Dr Edelsten or as to giving to Dr Edelsten of a right to be heard at that stage of the proceedings. The Act lays down a complicated procedure protective of the position of medical practitioners…These provisions are lengthy and detailed and it is inconsistent with them that the Minister or his delegate should, at the initiating stage, be required to give particulars to the medical practitioner concerned or make extended inquiries of the medical practitioner concerned or of the patients of the medical practitioner.
81 The PSR Scheme commenced in 1994. In Yung v Adams (1997) 80 FCR 453, Davies J was concerned with s 86 of the HI Act, which then provided that, "The Commission may…refer to the Director the conduct of a person relating to…whether the person has engaged in inappropriate practice". The scheme provided for the Director to dismiss a referral or set up a Committee (s 89), and for the Committee to hold a hearing if it considered that the practitioner may have engaged in inappropriate practice (s 101). Referring to s 86(1), Davies J held at 461:
The Health Insurance Commission was not obliged to provide Dr Yung with procedural fairness at that stage. What was done was simply to refer an issue to the Director for consideration.
On appeal, in Adams v Yung (1998) 83 FCR 248, this ruling was not challenged.
82 In Phan v Kelly (2007) 158 FCR 75, it was alleged that the applicant was denied procedural fairness in respect of a decision by the Director to set up a Committee. That argument was rejected by Tamberlin J, who held:
44 Accordingly, it is permissible to have regard to the scheme as a whole. Looking at the process in the present case in its entirety, the contested decisions of the Director and Committee were clearly part of, and directed to, the ultimate determination by the Determining Authority. They may be characterised as part of a single, sequentially-stepped decision-making process leading to a final outcome. This consideration leads to the conclusion that the legislative scheme is sufficiently exhaustive to indicate a legislative intent to exclude the application of additional measures to achieve procedural fairness.
…
46 In this case, I am satisfied that the statutory scheme, considered as a whole, exclusively provided for procedural fairness principles to the extent that the legislature intended those principles to apply.
83 The description given by Tamberlin J of "a single, sequentially-stepped decision-making process leading to a final outcome" remains apt. However, as I will later discuss, the express requirements of procedural fairness under the HI Act in its current form cannot be regarded as providing an exclusive or exhaustive code for procedural fairness.
84 In Daniel v Kelly (2003) 200 ALR 379, Ryan J was concerned with a form of s 86(1) of the HI Act that provided, relevantly, "[t]he Commission may, in writing, refer to the Director the conduct of a person relating to…whether the person has engaged in inappropriate practice in connection with rendering of services". Section 88 required the Commission to send a copy of the investigative referral (after the referral had been made) to the person under review, accompanied by a notice inviting the person to make written submissions to the Director stating why the referral should be dismissed without setting up a Committee. In that case, the applicant's principal complaint was that the Commission had applied a policy of "automatic referral" without consideration of the merits of his individual case. In the course of considering that ground, Ryan J stated at [26]:
Given that the process under consideration is an investigative one which may result in serious consequences for a medical practitioner, including the cancellation or suspension of rights conferred by statute, there is a presumption, not disputed by counsel for the respondents, that the practitioner will be accorded procedural fairness….
His Honour went on to hold that the Commission, in making the investigative referral, had failed to take into account relevant considerations.
85 In Kelly v Daniel (2004) 134 FCR 64, the Full Court dismissed an appeal from the judgment of Ryan J. The Full Court held at [82]:
…Section 86 confers upon the Commission a broad discretion to refer the question whether a practitioner has engaged in inappropriate practice to the Director. The Commission is obliged to take into account any explanation offered by the practitioner for what may be a temporary, and perhaps understandable breach of the rule. Its task is to consider not merely whether the number of services exceeds the number permitted under that rule, but whether the practitioner's conduct is capable, potentially, of falling within the definition of "inappropriate practice" in s 82(1)(a). The Commission is certainly entitled, in our view, to exercise its discretion having regard to the fact that the practitioner has been counselled, and his conduct subsequently reviewed, without any apparent repetition of the breach, or likelihood of that breach recurring.
The Full Court's view that the Commission was required to take into account any explanation offered by the practitioner suggests that the Full Court considered that procedural fairness must be provided in the exercise of the power under s 86(1) of the HI Act.
86 In Daniel v Kelly, it was conceded at first instance that s 86(1) of the HI Act in its extant form imposed obligations of procedural fairness upon the Commission, and the question does not seem to have been argued on appeal. That may have been because the relevant ground of review was whether the Commission had applied a policy without consideration of the merits of the case, not whether the practitioner had been denied procedural fairness. In any event, that case is distinguishable. The present iteration of s 86(1) allows the Chief Executive only to request that the Director review the provision of services, not to refer conduct to the Director for investigation. A referral under the iteration considered in Daniel v Kelly required the Director, under s 89(1), to conduct an investigation unless persuaded by the practitioner to dismiss the referral. Under the current iteration, a request by the Chief Executive does not compel the Director to undertake the review (subject to the exception under s 89 which is not relevant in this case). Accordingly, a referral by the Commission under the previous version of s 86(1) had a more direct impact upon the rights and interests of a practitioner than the current version.
87 A number of provisions under the PSR Scheme expressly require the taking of steps intended to provide a measure of procedural fairness. The content of these requirements, and the potential consequences of non-compliance, vary between provisions. The express requirements are:
Section 87: If the Chief Executive requests the Director to review the provision of services, the Chief Executive Medicare must give the person written notice of the request within seven days (but failure to comply does not affect the validity of the request).
Section 88A: The Director must give written notice of the decision as to whether to accept the request to the relevant person within seven days and, if the Director decides to undertake the review, the notice must set out the terms of section 89B (but failure to comply does not affect the validity of the decision).
Section 89C(1): Following a review, if the Director does not make a decision under s 91 to take no further action, the Director must give the person under review a written report setting out the reasons why the Director has not made a decision under s 91 and an invitation to make written submissions to the Director about the action the Director should take.
Section 89C(2): The Director must take into account any submissions made by the person under review in deciding whether to take no further action under s 91, or to enter into an agreement under s 92; or to make a referral to a Committee under s 93.
Section 93(7): The Director must give to the person under review, the report prepared for the Committee within seven days (but failure to comply does not affect the validity of the referral).
Section 102(1) and (2): If a Committee proposes to hold a hearing, it must give the person under review written notice of the time and place at least 14 days before the hearing.
Section 103(1)-(3): The person under review is provided with express entitlements, including to attend the hearing, be accompanied by a lawyer or other person, call witnesses, question witnesses and address the Committee.
Section 106H(4): A Committee must notify the person under review of any intention to make a finding of inappropriate practice, provide its reasons and give the person an opportunity to respond.
Section 106KD(3): A Committee must give the person under review a written draft report of its preliminary findings and a notice inviting the person to provide written submissions suggesting changes to the draft report.
Section 106KE: If the draft report does not contain a unanimous or majority finding of inappropriate practice, the Committee must provide the person with a written notice stating, inter alia, that no further action will be taken.
Section 106L(3)-(5): The Committee must give its final report to the person under review and a written notice stating that a copy will be given to the Determining Authority, but if there is no unanimous or majority finding that the person engaged in inappropriate practice, a notice that, inter alia, no further action will be taken.
Section 106QB(1)-(3): If the Director or the Determining Authority decides and gives notice that it would be impossible for an action specified in the agreement to take effect, the notice must set out the circumstances and the Director must, within seven days of giving or receiving the notice, give a copy of the notice to the person under review.
Section 106R(3)-(4): The Determining Authority must give notice in writing of its decision (either ratifying or refusing to ratify the agreement) to the person under review within seven days after the decision is made or taken to have been made, and in the case of a refusal decision, the notice must set out the reasons for the refusal (but failure to comply with these requirements does not affect the validity of the decision).
Section 106RB(1)-(3): If the Director or the Determining Authority decides and gives notice that it would be impossible for a proper draft determination or a final determination to be made by the Authority in relation to the person under review, the notice must set out the circumstances and the Director must, within seven days of giving or receiving the notice, give a copy of the notice to the person under review.
Section 106S(3): If the Director gives the Determining Authority any information that the Director considers is relevant to the Authority making its draft determination or final determination, the Director must also give the information to the person under review at the time.
Section 106SA(1)-(5): The Determining Authority must invite the person under review to make written submissions to the Authority about directions the Authority should make in the draft determination, and if the Director gives the Determining Authority further information after such an invitation has been made, the Authority must invite the person under review to make further submissions.
Section 106T(1)-(2): The Determining Authority must take into account any submissions made by the person under review and give a copy of the draft determination to the person under review within one month of the draft determination, together with an invitation to make written submissions suggesting changes to any directions.
Section 106UA: As soon as practicable after making a final determination, the Determining Authority must give a copy of it to the person under review.
88 It may be seen that where a decision-maker is required to provide procedural fairness, the PSR Scheme tends to specify the steps that must be taken to fulfil the obligation. In contrast, s 86 does not specify any requirement or content of procedural fairness.
89 Against this, it may be accepted that the PSR Scheme in its current form does not constitute an exhaustive code of procedural fairness. In NHDS, Griffiths J observed at [146]:
As noted, the Director did not submit that the PSR Scheme in the HI Act constituted an exhaustive procedural code which precluded the implication of any additional requirements of procedural fairness. Nor would I have accepted any such submission. The richness of the statutory procedural requirements in the multi-stage process under the PSR Scheme are not exhaustive. In particular, the procedural fairness rights and obligations under tier three do not deny the need for procedural fairness at the tier two level...
An example of an unstated obligation of procedural fairness is, as Griffiths J held at [142]-[146], that the Director's obligation under s 89C of the HI Act to provide a practitioner with an opportunity to make a submission is an obligation to provide a reasonable opportunity. Another example is that s 106(1) provides that the procedure for the conduct of a hearing by a Committee is within the discretion of the presiding member, but there obviously exist implied requirements of procedural fairness, including providing the practitioner with a reasonable opportunity to make submissions upon contentious matters of procedure and upon the substantive issues.
90 Nevertheless, where a decision-maker is positively required to give the person under review an opportunity to be heard as to whether a particular decision should be made, the PSR Scheme tends to make the requirement express, and does not leave it to implication. For example, ss 89C(1), 103(1)(g) and 106H(4) specify that the practitioner must be permitted to make submissions before the relevant decision is made. This is reinforced by s 80(11) which states that, "[p]rovision is made throughout the scheme for the person under review to make submissions before key decisions are made or final reports are given." The fact that s 86 of the HI Act does not expressly provide for a right to make submissions as to why the Chief Executive should not make a request to the Director, while not of itself determinative, strongly suggests that no obligation of procedural fairness is implied.
91 The Chief Executive's request under s 86(1) of the HI Act is the step that initiates the PSR review. Such a request does not itself affect any substantive rights. To adopt the language of Northrop and Lockhart JJ in Edelsten at 70, the request is no more than a step in an administrative process that may lead to an ultimate or operative determination, and is remote from any such consequences. And, to adopt the language of Davies J in that case at 73, the request does not decide or formally recommend anything.
92 The Chief Executive's powers of investigation under the HI Act are limited, and do not include coercive powers. In contrast, the Director's powers are wider, and include the power to require a practitioner to provide documents and give information (s 89B). The powers of a Committee are wider still, and include conducting hearings (s 101). As Griffiths J observed in NHDS at [27]:
It should also be noted that the Chief Executive Medicare has limited investigative powers to obtain information that may be relevant to his or her consideration of whether or not to make a request to the Director to review the provision of services by a person or a practitioner. It is evident that a decision whether to make such a request will generally be based upon the Chief Executive Medicare's review of statistical data concerning a practitioner's Medicare billing and any other information which the Chief Executive Medicare obtains by other means, including a voluntary interview with one or more practitioners, as occurred in this case.
93 This is the context in which the Chief Executive makes a request under s 86(1) of the HI Act initiating consideration by the Director as to whether to undertake a review. The context demonstrates why a fairly low barrier is imposed for the Chief Executive's decision. The Explanatory Memorandum for the Bill introducing the 2002 Amending Act indicated that a review may be requested on the basis of inferences drawn from the statistical data. This context also demonstrates that the Chief Executive's decision is envisaged to be made without substantial investigation of the kind required at later stages.
94 A practitioner's rights and interests may be directly affected at the second, third and fourth tiers of the PSR Scheme, culminating in a Determining Authority making a final determination under ss 106TA and 106U, which may have direct financial and reputational consequences. In that context, the PSR Scheme expressly imposes increasing requirements of procedural fairness at various stages under those tiers. In view of the opportunities at Tiers 2, 3 and 4 for a practitioner to make submissions that may head off any further progression of an inquiry, it is unsurprising that there would be no requirement to provide any such opportunity at the initiating stage.
95 In the context of the imposition of substantial obligations of procedural fairness at later stages, is seems unlikely that the legislative intention is that a practitioner should have an opportunity to try to persuade the Chief Executive to not make a request under s 86(1) of the HI Act. A requirement of this type would be administratively cumbersome and significantly repetitious. It is unlikely that such a requirement would be implied, rather than being expressly stated.
96 As McHugh J observed in Miah at [146], natural justice requirements are less likely to attach to decisions that are preliminary in nature. His Honour gave examples of such preliminary decisions as being the laying of charges or the commencement of disciplinary proceedings. A decision under s 86(1) to request a review occurs at an even more preliminary stage.
97 In addition, it may be noted that under s 86(1A) of the HI Act, if the Chief Executive becomes aware that the circumstances in which services were rendered or initiated constitute a prescribed pattern of services, the Chief Executive must make a request under s 86(1) in relation to the services. In view of the obligation to make such a request, there cannot be any implied requirement to allow a practitioner to make submissions before the request is made. That there is no implied obligation of procedural fairness under s 86(1) in one circumstance tends to support the view that there is no general obligation of that kind.
98 Section 87(1) provides that if the Chief Executive requests the Director to review the provision of services by a person, the Chief Executive must give the person written notice of the request. The express imposition of that obligation of procedural fairness after a decision under s 86(1) is made suggests that there is no implied anterior obligation to give the practitioner notice.
99 Although Griffiths J in NHDS considered that the opportunity to head off progression of the process at s 89C of the HI Act was a reason for implying an obligation of procedural fairness, the content and form of s 86(1) is quite different. For the reasons that follow, I do not accept Dr Yoong's submission that the reasoning of Griffiths J in NHDS as to procedural fairness at the s 89C stage can be transposed into an implication of procedural fairness at the s 86(1) stage.
100 In NHDS, the Director had decided to refer the applicant to a Committee pursuant to s 93 of the HI Act to investigate whether the corporate applicant may have engaged in inappropriate practice by permitting or causing 56 specified medical practitioners allegedly employed by the applicant to engage in conduct that constituted inappropriate practice. The Director had earlier provided a written report to the applicant as was required under s 89C(1)(b) which had led the applicant to believe that only 15 medical practitioners would be the subject of potential referral to a Committee. His Honour held that the applicant had been denied an opportunity to make a submission under s 89C(2) that the Director could not reasonably be satisfied that the conduct of those 56 practitioners involved inappropriate practice and to terminate the review. The applicant had thereby been denied procedural fairness.
101 In order to understand the basis of Griffiths J's decision, it is necessary to consider the relevant statutory provisions. Under s 89C(1), after conducting a review, the Director must either: make a decision to take no further action; or give the person under review a written report setting out the reasons for not deciding to take no further action, and an invitation to make written submissions about the action the Director should take. Section 89C(2) provides that the Director must take into account any such submissions, and decide whether to take no further action in accordance with s 91; or enter into an agreement with the person under s 92; or make a referral to a Committee under s 93.
102 Justice Griffiths held:
131 Unsurprisingly, there was no serious contest as to the relevant legal principles concerning procedural fairness. The Director accepted that the statutory scheme imposed various procedural fairness obligations on her and that the content of those obligations had to be determined in the context of the statutory scheme. The Director submitted, however, that, in determining the content of procedural fairness obligations, it was relevant to take into account that a s 93 referral occurs at a relatively early stage of the review process and prior to an investigation of whether inappropriate practice has in fact occurred, not to mention well before the imposition of any sanction. It was submitted that a s 93 referral "lacks any quality of finality" and "is not a substantive determination".
132 While it is relevant to take into account the different tiers of decision-making under the PSR Scheme, I consider that the Director has overstated the relevance of that matter in determining the content of procedural fairness requirements in tier 2. Different considerations may arise with a multi-staged decision making process which, unlike the legislative regime here, does not contain its own rich supply of procedural fairness requirements. It is also relevant to take into account the essentially investigative nature of tier 2 and that the person under review will have a right to be heard before the Committee if a referral is made under s 93. Of particular relevance and significance, however, is the Director's obligation under s 89C to make a decision under s 91(1) to take no further action in relation to the review, rather than enter into a s 92 agreement (which was not an option in the case of NHDS) or make a referral under s 93.
(Underlining added.)
103 His Honour then referred to observations made by the Victorian Court of Appeal in Byrne v Marles (2008) 19 VR 612, and continued:
134 These observations are directly pertinent to the proceeding here having regard to the terms and effect of s 89C(1) and with its particular reference to s 91. A right to be heard by the person under review affords that person an opportunity to persuade the Director to terminate the complaint at a relatively early stage. That right is different from the rights which the person under the review who is the subject of a subsequent referral has before the Committee.
104 His Honour concluded:
142 Procedural fairness obliged the Director to provide NHDS with a reasonable opportunity to address those three elements [of inappropriate practice], which required the Director to provide NHDS with appropriate particulars and/or information in respect of those three matters with reference to the 56 identified NHDS practitioners. There is an obvious connection between the provision of a s 89C report and the obligation of the Director to invite submissions as to the future course of action, as required by s 89C(1)(b)(ii)…
143 There is also a plain connection between the making of those submissions and the effect they may have on the Director's decision under s 93, as is emphasised by the explicit obligation on the Director under s 89C(2) to take into account those submissions in deciding whether or not to make a referral to a Committee.
144 The Director effectively shifted the goal posts after receiving NHDS's submissions so as to bring to the forefront of the Director's further deliberations the conduct of 56 other NHDS practitioners…
(Underlining added.)
105 The Director has express obligations of procedural fairness under ss 89C(1) and (2) of the HI Act to provide a written report, to invite submissions as to the course the Director should take and to take into account any submissions. I understand Griffiths J to have held that these obligations imply a requirement that the Director's report must give the practitioner a reasonable (or fair) opportunity to seek to persuade the Director not to make a referral to a Committee and, instead, to take no further action. His Honour held that the failure of the report to disclose the allegation that the conduct of 56, rather than only 15, practitioners may involve inappropriate practice had deprived the applicant of the reasonable opportunity that was required to be given.
106 It is important to understand the parameters and limits of Griffiths J's reasons. First, the Director had accepted that obligations of procedural fairness obligations were imposed upon her. That concession was correctly made since, relevantly, s 89C of the HI Act required the Director to provide a written report to the practitioner and take into account submissions made in response to the report. Accordingly, his Honour's reasons at [131]-[134] were not concerned with whether there was an obligation of procedural fairness, but with the content of the obligation. Second, his Honour was only dealing with the content of procedural fairness after the requirement to provide a report under s 89C(1)(b) had been engaged. That report is only provided after the Director has made an initial decision not to take no further action under s 91. His Honour's reasons do not suggest that the Director is required to provide an opportunity to the practitioner to be heard prior to making the initial decision as to whether to take no further action.
107 I do not accept that Griffiths J's views upon the requirements of procedural fairness at the s 89C stage can be translated into a conclusion that an obligation of procedural fairness exists at the s 86(1) stage. In fact, his Honour's reasons are against the proposition that the Chief Executive must give the practitioner an opportunity to make submissions as to why a request should not be made. In respect of the Director's decision under s 88A as to whether to undertake a review, his Honour stated at [67]:
…Although there is no explicit statutory provision which requires the Director to invite the person the subject of the requested review to make submissions or give information as to whether or not the Director should undertake the review, I see no reason why the Director could not, in his or her discretion, extend an invitation to that effect (bearing in mind the 1 month time period within which the Director is required to make a decision whether or not to conduct the review) or, indeed, why (with or without an invitation) the person the subject of the request could not provide submissions or information to the Director before that time expired on the question whether or not the Director should undertake the requested review. I emphasise that I am not suggesting that these are procedural fairness requirements. Rather, they are discretionary.
(Emphasis in the original.)
His Honour's view that the Director is not required to provide procedural fairness when considering whether to undertake a review must apply with at least equal force to the position of the Chief Executive under s 86(1) when deciding whether to request that the Director undertake a review.
108 In my opinion, the Chief Executive does not owe a practitioner an obligation of procedural fairness when exercising the power under s 86(1) of the HI Act. In particular, there is no obligation to give the practitioner an opportunity to make submissions as to why a request to the Director should not be made.
109 As a matter of administrative practice, the Chief Executive's delegate provided Dr Yoong with particulars for concerns and invited him to make submissions addressing those concerns. However, there was no implied obligation upon the Chief Executive to provide that opportunity.
110 As I have mentioned, Dr Yoong's counsel accepted that if the Chief Executive's decision under s 86(1) of the HI Act is held to be valid, then he would also fail upon this challenge to the Director's decision to undertake the review under s 88A(2). In any event, I would not have accepted that the Director is obliged to provide the practitioner with an opportunity to make submissions when deciding whether or not to undertake a review. The considerations against that position under s 86(1) apply analogously in respect of s 88A(2). In addition, ss 88A(3) to (7) tell against any implication of procedural fairness.
111 Ground 1 of the Second Further Amended Originating Application must be rejected.