Re FJ Hospital Enterprises Pty Ltd (Trading As "Kinross Private Nursing Home") v the Honourable Donald James Grimes (As the Commonwealth Minister of Communtiy Services) and Alan D Rose (As the Secretary of the Commonwealth Department of Community [1987] FCA 37 (16 February 1987)

FEDERAL COURT OF AUSTRALIA

Re: F.J. HOSPITAL ENTERPRISES PTY. LTD. (trading as "Kinross Private Nursing
Home")
And: THE HONOURABLE DONALD JAMES GRIMES (as the Commonwealth Minister for
Communtiy Services) and ALAN D. ROSE (as the Secretary of the Commonwealth
Department of Community Services)
No. V G370 of 1986
Administrative Law

COURT

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
GENERAL DIVISION
Jenkinson J.

CATCHWORDS

Administrative Law - Judical review - Nursing home - Determination of scale of fees - Motion to dismiss application for order of review of determination - Application made for review of determination by Minister - Review by Minister not yet completed - Stay of proceedings in application for order of review.

Administrative Decisions (Judical Review) Act 1977 - ss.5, 10, 16(1)(d)

National Health Act 1953 - ss.40AA (6) (c) (ii), 40AA (7A), 40AA (7B), 40AD (2), 40AE.

Kelly v. Coates (1981) 35 ALR 93.

HEARING

MELBOURNE
16:2:1987

Counsel for the Applicant: Mr G. Harris

Solicitors for the Applicant: McMahon, Fearnley and Kaynes

Counsel for the Respondent: Mr R.M. Downing

Solicitor for the Respondent: Australian Government Solicitor

ORDER

The motion of which notice is specified in paragraph 1 of the notice of motion filed 18 November 1986 for an order that the Court refuse pursuant to s.10 (2) (b) (ii) of the Administrative Decisions (Judical Review) Act 1977 to grant the applications for orders of review be dismissed.

Proceedings in the applications be stayed until further order.

The directions hearing be adjourned to a date to be fixed by any party on reason able notice to the other parties.

Each party's costs of the said motion and of the directions hearing on 6 February 1987 be reserved.

Note: Settlement and entry of orders is dealt with in 0.36 of

the Federal Court Rules.

DECISION

Motion for an order that the Court dismiss the applications for orders of review which are pending in this preceeding.

2. The originating application specified several decisions, and by amendment of that application there have been added several other decisions, in respect of all of which decisions an order of review is sought in pursuance of s.5 of the Administrative Decisions (Judical) Review Act 1977 ("the Review Act"). Each of these decisions was made in performance of a function conferred by s.40AD (1B) of the National Health Act 1953 on the Secretary of the Department of Community Services and his delegates to determine a scale of fees applicable from time to time in respect of the nursing home of which the applicant is the proprietor. Each determination is effective until superseded by a subsequent determination. Each decision is subject top review, so the application contends, for errors comprehended by several of the grounds specified in sub-section 5(1) of the Review Act. The originating application was filed on 24 October 1986. Notice of this motion of the part of the repsondents for dismissal was filed in November. The ground of the motion, in relation to each of the decisions sought to be reviewed, is s.10 (2) (b) (ii) of the Review Act.

3. Section 10 provides:

"(1) The rights conferred by sections 5, 6 and
7 on a person to make an application to the
court in respect of a decision, in respect of
conduct engaged in for the purpose of making a
decision or in respect of a failure to make a
decision -

(a) are in addition to, and not in
derogation of, any other rights that
the person has to seek a review,
whether by the Court, by another
court, or by another tribunal,
authority or person, of that
decision, conduct or failure; and

(b) shall be disregarded for the
purposes of the application of
sub-section 6(3) of the Ombudsman
Act 1976 and sub-section 24(2A) of
the Complaints (Australian Federal
Police) Act 1981.

(2) Notwithstanding sub-section (1)-

(a) the Court, or any other court, may,
in a proceeding instituted otherwise
than under this Act, in its
discretion, refuse to grant an
application for a rview of a
decision, conduct engaged in for the
purpose of making a decision, or a
failure to make a decision, for the
reason that an application has been
made to the Court under section 5, 6
or 7 in respect of that decision,
conduct or failure; and

(b) the Court may, in its discretion,
refuse to grant an application under
section 5, 6 or 7 that was made to
the Court in respect of a decision,
in respect of conduct engaged in for
the purpose of making a decision, or
in respect of a failure to make a
decision, for the reason -

(i) that the application has sought
a review by the Court, or by
another court, of that
decision, conduct or failure
otherwise than under this Act;
or

(ii) that adequate provision is
made by any law other than
this Act under which the
applicant is entitled to seek
a review by the Court, by
another Court, or by another
tribunal, authority or person,
of that decision, conduct or
failure.

(3) In this section, review includes a
review by way of reconsideration, re-hearing,
appeal, the grant of an injunction or of a
pregrogative or statutory writ or the making of
a declaratory or other order."

4. Provision is made by s.40AE of the National Health Act 1953 for review by the Minister of State for Community Services of decisions of the kind which are the subjects of this proceeding. By a letter dated 24 October 1986 the applicant requested the Minister to review each of the decisions in respect of which application for an order of review was instituted in the Court on that day. That review by the Minister is proceeding.

5. Decisions of the kind which are the subjects of these applications in the Court are required, if they had been made on or after 9 May 1984, to be made by the Secretary and his delegates in accordance with principles formulated by the Minister in relation to nursing homes generally: see ss. 40AA(6) (c) (ii), (7), (7A) and (7B) and 40AD(1B) of the National Health Act 1953. The power conferred by s.40AA(7), to formulate principles in accordance with which the determination by the Secretary and his delegates of scales of nursing home fees are to be made, was exercised by a formulation of principles which took effect from 9 May 1984. Some but not all of the determinations in respect of which an order of review is sought in this proceeding were made after 9 May 1984.

6. On a review by the Minister of a determination made by the Secretary of his delegate after 9 May 1984, the Minister is not constrained by the principles so absolutely as the Secretary and his delegates are constrained in making their determinations. Section 40AE of the National Health Act 1953 provides:

"(2) Where the Secretary does not alter the
conditions applicable to a nursing home in
accordance with an application under
sub-section 40AD (1B), the proprietor of the
nursing home may, by writing signed by the
proprietor, request the Minister to review the
decision of the Secretary.

(3) Upon receipt of a request under
sub-section (2), the Minister shall, after
such investigation of the matter as the
Minister considers necessary, either confirm
or vary the decision of the Secretary and
advise the proprietor accordingly.

(3A) The Minister shall, in undertaking, in
accordance with sub-section (3), such
investigation of the matter as the Minister
considers necessary, apply any principle that
was in force under, sub-section 40AA (7) at the
time the decision was made and that continues
in force at the time of the undertaking of
that review unless the Minister is satisfied,
in all the circumstances of the case, that the
application of that principle in relation to
that nursing home is not appropriate.

(4) The Minister shall, as part of the
investigation of the matter, refer the matter
to the appropriate Nursing Homes Fees Review
Committee of Inquiry established under
Division 3A of Part VIII for examination and
report to the Minister and shall not take any
further action in the matter until the
Minister has received the report of the
Committee.

(5) Where the Minister varies the decision of
the Secretary, the Secretary shall, for the
purposes of sub-section 40AD (2), be deemed to
have altered the conditions applicable to the
nursing home in accordance with the decision
as so varied."

7. Sub-sections (1B) and (2) of s. 40AD provide:

"(1B) The Secretary may, at any time, on
application in writing made under this
sub-section by the proprietor of a nursing
home or otherwise, alter the conditions
applicable to the nursing home by substituting
for the scale of fees determined in relation
to the nursing home for the purposes of
sub-paragraph 40AA (6) (c) (i) such other scale
of fees as is determined by the Secretary."

"(2) Where, whether under this section or by
virtue of the operation of law, the conditions
applicable to an approved nursing home are
altered, the Minister shall cause to be issued
to the proprietor of the nursing home, in
place of any certificate of approval in force
under this Act in relation to the nursing
home, a new certificate of approval, in
accordance with the appropriate authorized
form, specifying -

(a) the conditions as so altered; and

(b) the date on and from which those
altered conditions have effect."

8. The review of decisions, made on or after 9 May 1984, concerning scales of nursing home fees, which s.40AE prescribes is unusual in that in the course of review the Minister may be enabled to disregard a principle to which the person who made the decision under review was subject, and to which persons making similar decisions at first instance remain subject. Notwithstanding that circumstance, it did appear, in my opinion that "adequate provision", within the meaning of that expression in s.10 (2) (b) (ii) of the Review Act, was made by s.40AE, under which the applicant was entitled to seek a review by the Minister of the decisions the subjects of the proceeding in this Court. The question is then one of discretion, whether the Court should, at this stage, refuse to grant any of the applications for review now pending in this proceeding.

9. One of the discretionary powers available to the Court on application for an order of review in respect of a decision is to make "an order directing any of the parties to do, or to refrain from doing, any act or thing the doing, or the refraining from the doing, of which the Court considers necessary to do justice between the parties" : see s.16 (1) (d) of the Review Act. Mr Harris of counsel for the applicant submitted that the power would extend to authorise an order for payment to the applicant by a respondent of a money sum equal to the amount of the loss shown to have been caused by a detemination of a scale of fees which was vitiated by error of a description contained in s.5 of the Review Act. A claim for such an order was included in the originating application. If the applications were to be now dismissed, no exercise of the suggested power in favour of the applicant could be made. Mr Downing of counsel for the respondents, submitted that even if, contrary to his submission, the power conferred by s.16 (1) (d) extended to authorise a compensatory payment, the determination of the Minister on review would supersede the detemination of the Secretary's delegate and could itself be made the subject of an application for an order of review, in the determination of which the same power would be available to compensate the same loss, which would be then attributable to the decision of the Minister, not to the superseded decision of the delegate.

10. If these contradictory submissions were resolved by me in a sense favourable to the respondents, yet the resolution would be in an interlocutory proceeding and without examination of all the relevant circumstances : an unsatisfactory basis, as I think, for a conclusion involving final dismissal of the application. Further, there is, I think, room for doubt concerning the legal effect of the Minister's decision on review. I think the preferable course is to leave the application pending, and to avoid unnecessary expenditure of legal costs by staying proceeedings in the pending proceeding in this Court until further order. I respectfully share the opinion expressed by Toohey J. in Kelly v. Coats (1981) 35 ALR 93 at 94 that the Court may in the exercise of its inherent power defer the hearing of an application for an order of review pending the determination of an appeal against the decision in respect of which the order of review is sought. The review by the Minister is in like case with an appeal. It is an inherent power to be sparingly exercised, perhaps, when the power conferred by s.10 (2) of the Review Act is available. But in the particular circumstances of this case the Court should avoid the risk, however small, that dismissal of the application would deprive the applicant of a remedy to which it may be entitled.

11. The notice of motion included a claim, in the alternative, for a stay of the application pending the Minister's determination on his review, but at the hearing Mr Downing expressly declined to move for a stay. The applicant's willingness to submitt to a stay was expressed by Mr Harris. The orders of the Court will be that the motion of which notice is specified in paragraph 1 of the notice of motion filed 18 November 1986 for an order that the Court refuse pursuant to s.10 (2) (b) (ii) of the Review Act to grant the applications for orders of review be dismissed, that proceedings in the applications be stayed until further order, that the directions hearing be adjourned to a date to be fixed by any party on reasonable notice to the other parties, and that each party's costs of the motion and of the directions hearing on 6 February 1987 be reserved.