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Federal Court of Australia |
Last Updated: 9 July 2002
Gribbles Pathology (Vic) Pty Ltd v Cassidy [2002] FCA 859
GRIBBLES PATHOLOGY (VIC) PTY LTD (ACN 006 823 089) v D I CASSIDY QC, DR E RAIK AND DR F H SMITH CONSTITUTING THE MEDICARE PARTICIPATION REVIEW COMMITTEE and MINISTER FOR HEALTH AND AGED CARE
V93 of 2001
WEINBERG J
5 JULY 2002
MELBOURNE
IN THE FEDERAL COURT OF AUSTRALIA |
|
VICTORIA DISTRICT REGISTRY |
V93 OF 2001 |
BETWEEN: |
GRIBBLES PATHOLOGY (VIC) PTY LTD (ACN 006 823 089) APPLICANT |
AND: |
D I CASSIDY QC, DR E RAIK AND DR F H SMITH CONSTITUTING THE MEDICARE PARTICIPATION REVIEW COMMITTEE FIRST RESPONDENT MINISTER FOR HEALTH AND AGED CARE SECOND RESPONDENT |
JUDGE: |
WEINBERG J |
DATE: |
5 JULY 2002 |
WHERE MADE: |
MELBOURNE |
Amendment to the Reasons for Judgment of Weinberg J delivered on 5 July 2002.
1. Par [79] the second sentence should read "Both parties filed written submissions with the Court and these were amplified during the course of the hearing."
I certify this is a true copy of corrigendum to the Reasons for Judgment of the Honourable Justice Weinberg. |
Associate:
Dated: 8 July 2002
Gribbles Pathology (Vic) Pty Ltd v Cassidy [2002] FCA 859
ADMINISTRATIVE LAW - judicial review - approved pathology authority alleged to have breached undertaking given to Minister - referral of allegation by Minister to Medicare Participation Review Committee (MPRC) for hearing and determination - adequacy of particulars provided by Minister to applicant in notice given under s 23DL(1) of Health Insurance Act 1973 (Cth) - adequacy of particulars provided by Minister to MPRC in notice given under s 23DL(4)(c) - whether failure to provide adequate particulars renders each notice invalid - whether invalidity of notice prevents MPRC from continuing hearing - allegation that applicant's conduct in providing false answers in application to Minister breached undertaking not to take any action that would constitute a relevant offence - provision of information that is false or misleading in a material particular an offence under s 129(2) - whether Minister can require undertaking which obliges an applicant for approved pathology authority status not to contravene the general criminal law - whether judicial power of the Commonwealth vested in MPRC --whether continuation of hearing amounts to interference with administration of justice - whether Minister actuated by improper or collateral purpose - whether erroneous construction of undertaking gives rise to jurisdictional error
Health Insurance Act 1973 (Cth) ss 16A(5AA), 23DF, 23DL(1), 23DL(4)(c), 23DL(5), 23DG(3), 124E(3), 124FC and 129(2) and (3)
Judiciary Act 1903 (Cth) ss 39B(1) and 39B(1A)
Deputy Commissioner of Taxation v Woodhams [2000] HCA 10; (2000) 199 CLR 370 at 384 considered
Brandy v Human Rights and Equal Opportunity Commission [1995] HCA 10; (1995) 183 CLR 245 at 258 and 269 referred to
Victoria v Australian Building Construction Employees' and Builders Labourers' Federation [1982] HCA 31; (1982) 152 CLR 25 referred to
Gouriet v Union of Post Office Workers [1977] UKHL 5; [1978] AC 435 at 499-500 considered
Ainsworth v Criminal Justice Commission [1992] HCA 10; (1992) 175 CLR 564 at 576-578 referred to
Rees v Crane [1994] 2 AC 173 referred to
R v Pharmacy Board of Victoria; Ex parte Broberg (1983) 1 VR 211 applied
Johnson v Miller [1937] HCA 77; (1937) 59 CLR 467 applied
R v Magistrates' Court at Heidelberg; Ex parte Karasiewicz [1976] VR 680 applied
R v Solicitors' Disciplinary Tribunal; Ex parte L (a solicitor) [1988] VR 757 applied
Kanda v Government of Malaya [1962] AC 322 at 337 considered
Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355 at 389 applied
Tasker v Fullwood [1978] 1 NSWLR 20 at 24 referred to
Scurr v Brisbane City Council [1973] HCA 39; (1973) 133 CLR 242 at 254-255 referred to
Websdale v S & JD Investments Pty Ltd (1991) 24 NSWLR 573 at 577-578 referred to
Kleinwort Benson Australia Ltd v Crowl [1988] HCA 34; (1988) 165 CLR 71 at 79 referred to
Sandvik Australia Pty Ltd v The Commonwealth (1989) 89 ALR 213 at 226 referred to
S v The Queen [1989] HCA 66; (1989) 168 CLR 266 at 274-275 referred to
Peverill v Backstrom (1994) 54 FCR 410 at 436 referred to
Bannerman v Mildura Fruit Juices Pty Ltd (1984) 2 FCR 581 at 591 referred to
Kelson v Forward (1995) 60 FCR 39 at 64 referred to
AB v National Crime Authority (1988) 85 FCR 538 referred to
Panagopoulos v Secretary, Department of Veteran Affairs (1995) 60 FCR 524 at 538-539 referred to
Federal Commissioner of Taxation v Munro; British Imperial Oil Co Ltd v Federal Commissioner of Taxation [1926] HCA 58; (1926) 38 CLR 153 at 175 referred to
Re Phillips (1963) 81 WN (Pt 1) (NSW) 179 at 182 referred to
R v Federal Court of Bankruptcy; Ex parte Lowenstein [1938] HCA 10; (1938) 59 CLR 556 referred to
Kingswell v The Queen [1985] HCA 72; (1985) 159 CLR 264 referred to
Philippine Airlines v Goldair (Aust) Pty Ltd [1990] VR 385 applied
Attorney-General (Cth) v Breckler [1999] HCA 28; (1999) 197 CLR 83 referred to
Hammond v The Commonwealth [1982] HCA 42; (1982) 152 CLR 188 referred to
Tankey v Adams [2000] FCA 1089; (2000) 104 FCR 152 applied
Aronson and Dyer, Judicial Review of Administrative Action, (2nd ed., 2000) at 409-410
Wade and Forsyth, Administrative Law, (8th ed., 2000) at 229
De Smith, Judicial Review of Administrative Action, (4th ed., 1980) at 197-198
GRIBBLES PATHOLOGY (VIC) PTY LTD (ACN 006 823 089) v D I CASSIDY QC, DR E RAIK AND DR F H SMITH CONSTITUTING THE MEDICARE PARTICIPATION REVIEW COMMITTEE and MINISTER FOR HEALTH AND AGED CARE
V93 of 2001
WEINBERG J
5 JULY 2002
MELBOURNE
IN THE FEDERAL COURT OF AUSTRALIA |
|
VICTORIA DISTRICT REGISTRY |
|
THE COURT PROVISIONALLY ORDERS THAT:
1. The first respondent, whether by itself, its members, officers, employees, or agents, or howsoever otherwise, be restrained from further hearing and determining the matter referred to it by the second respondent pursuant to a purported notice given by the second respondent under s 23DL(4)(c) of the Health Insurance Act 1973 (Cth) on 5 July 2000.
2. Order 1 applies only insofar as that notice alleges that the applicant breached pars 15 and 16 of the undertaking accepted by the second respondent on 30 June 1995.
3. Nothing in Order 1 prevents the second respondent from issuing a fresh notice containing the allegations set out above, pursuant to s 23DL(1), provided that the notice complies with the requirements of the Act regarding the provision of adequate particulars.
4. The parties file and serve any written submissions as to the final form of these Orders and written submissions relating to the costs of this application, on or before 26 July, 2002.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA |
|
VICTORIA DISTRICT REGISTRY |
|
JUDGE: |
WEINBERG J |
DATE: |
5 JULY 2002 |
PLACE: |
MELBOURNE |
1 Gribbles Pathology (Vic) Pty Ltd ("Gribbles") is an "approved pathology authority" pursuant to s 3 of the Health Insurance Act 1973 (Cth) ("the Act"). By reason of that fact, payments by way of Medicare benefits are payable in respect of the pathology services which it provides.
2 Gribbles has, for some time, been in dispute with the Minister for Health and Aged Care ("the Minister") over whether it breached an undertaking given to the Minister, together with an application for the Minister's acceptance of the undertaking, on 21 June 1995. The undertaking was given in accordance with the requirements of s 23DF(1) of the Act. The Minister, through his delegate, has referred the question whether the undertaking was breached for determination by a Medicare Participation Review Committee ("an MPRC").
3 By this application, brought pursuant to ss 39B(1) and 39B(1A) of the Judiciary Act 1903 (Cth), Gribbles seeks to restrain the MPRC from further hearing this matter. It claims that the MPRC has no jurisdiction to proceed with the hearing.
BACKGROUND
4 On 21 June 1995, Gribbles applied to the Minister for approval as "an approved pathology authority". That expression is defined in s 3 as meaning "a person in respect of whom there is in force an undertaking given by the person, and accepted by the Minister under section 23DF". Section 23DF(1) requires, as a condition of granting that approval, that the person seeking it give to the Minister, together with that person's application for acceptance of the undertaking, an undertaking in accordance with the appropriate approved form prescribed by the Minister and approved by Parliament: see s 23DB.
5 On the same date, 21 June 1995, Gribbles gave the undertaking as required by s 23DF(1)(a) ("the June undertaking").
6 On 30 June 1995, the Minister accepted the undertaking on behalf of the Commonwealth. However, he determined, in accordance with s 23DF(1)(c), that it would have effect only from 1 July 1995 to 30 September 1995.
7 On 14 September 1995, Gribbles applied again to the Minister for approval. In support of that application, it proffered an undertaking in identical terms to that earlier given ("the September undertaking"). For reasons that are not immediately apparent, the Minister did not accept the September undertaking and, it seems, has still not done so. In the result, Gribbles had continued, and still continues, as an approved pathology authority. Its June undertaking, given in support of its first application, is deemed by s 23DG(3) to continue in force.
THE RELEVANT LEGISLATIVE SCHEME
8 The most common procedure under the Act for referring matters to an MPRC for hearing and determination is the notification of a Chairperson, pursuant to s 124D, that a practitioner has been convicted of a relevant offence. However, in the case of an approved pathology authority, an alternative procedure is available. If the Minister has "reasonable grounds" for "believing that such an authority has breached an undertaking", given for the purpose of s 23DF, he must give notice in writing to that authority "setting out particulars of those grounds" and inviting it to make submissions as to why further action should not be taken against it. Such a notice is given pursuant to s 23DL(1) ("the first notice").
9 The approved pathology authority then has 28 days within which to make any submissions: see s 23DL(2).
10 If the Minister, having had regard to any such submissions, remains satisfied that there are reasonable grounds "(being grounds that were specified in the notice referred to in subsection (1))" for believing that there has been a breach of the undertaking, he must, pursuant to s 23DL(4)(c), give notice in writing to a Chairperson of an MPRC setting out particulars of those grounds ("the second notice").
11 Where the Minister has makes a decision pursuant to s 23DL(4) in relation to a person, he is required by s 23DL(5) to give that person notice in writing of the decision ("the third notice").
12 Part VB makes provision for the establishment of MPRCs. Section 124E(3) provides that, upon receiving a notice under s 23DL(4) in relation to an approved pathology authority, a Chairperson must establish an MPRC. Section 124C makes provision for the appointment of Chairpersons, while s 124EA makes provision for the appointment of members.
13 Section 124FC(1)(c) provides that where an MPRC is established in relation to an approved pathology authority, or has made a determination that it should consider whether such an authority has breached an undertaking, it shall determine whether that authority has breached the undertaking given by it to the Minster. If the MPRC determines that there has been such a breach, it has available to it a number of options. These include taking no action against the authority, counselling or reprimanding the authority, or revoking any undertaking previously given by it and directing that no further undertaking given by it should be accepted by the Minister for a period of up to five years.
14 It is plain, therefore, that a determination by the MPRC that an authority has breached an undertaking may have dire consequences for that authority.
THE JUNE UNDERTAKING
15 The June undertaking was given in accordance with the standard form required under the Act. There are four paragraphs in that undertaking which are relevant to this proceeding. These are as follows:
"6. The authority undertakes that it will not cause or permit any person to issue an account or receipt for fees, or make an agreement under section 20A of the Health Insurance Act 1973, that would permit a person to claim a Medicare benefit when the authority, or any person acting on behalf of the Authority is aware, or could reasonably be expected to be aware, that no Medicare benefit is payable in relation to a procedure that has been performed by or on behalf of an employed practitioner because of:a) the nature of the procedure; or
b) the clinical circumstances in which the procedure is performed,
and the Authority also undertakes that it will take all reasonable measures to cause patients to be informed that no Medicare benefit is payable in relation to such procedures."
...
15. A relevant offence in relation to this undertaking is:-
a) an offence within the meaning of Part VB of the Health Insurance Act 1973;
b) an offence against sub-sections 23DP(1), (2) or (3) of the Health Insurance Act 1973; or
c) an offence against:
i) sections 6, 7 or 7A of the Crimes Act 1914; or
ii) subsection 86(1) of that Act ...
16. The authority undertakes not to take any action that would constitute a relevant offence.
...
19. The Authority undertakes that where
a) whether by way of contract of employment or otherwise, and
b) in relation to a matter in relation to which this undertaking is given, any person who:
i) acts on behalf of the authority;
ii) is in a position to influence or control the activities of the authority
...
then the authority will take all reasonable measures to ensure that that person acts, in relation to that matter, as if that person had given the undertaking in respect of that matter."
THE FIRST NOTICE
16 By letter dated 24 December 1999, a delegate of the Minister purported to give Gribbles a notice pursuant to s 23DL(1), to the effect that the delegate had reasonable grounds for believing that it had breached certain paragraphs of the June undertaking.
17 That notice alleged five separate breaches of the undertaking. It was common ground between the parties that the fourth breach was no longer in issue, and nothing more need therefore be said about it.
(a) First alleged breach
18 Question 10 of the application form which accompanied the June undertaking, and which Gribbles completed asked:
"Financial associations: Give details of any persons, businesses or other entities in a financial association with the applicant in connection with the pathology practice, excluding suppliers of consumables and equipment at normal market prices."
19 Gribbles answered this question "Nil".
20 Question 11 of that form asked:
"Cost or profit sharing arrangements: Give details of any direct or indirect arrangement the applicant has (relating to the provision of medical services)a. with any medical practitioner who requests the rendering of pathology services from the applicant or any person (including a company) from whom such a requesting practitioner derives a financial benefit, and/or
b. with any hospital or health care facility where pathology is requested from the applicant.
Such an arrangement may cover the costs of staff, rental of accommodation, purchase or hire or maintenance of plant and/or equipment, profit or revenue sharing, or provision of any payment or benefit.
Name of Medical Practitioner or Hospital/Health Care facility |
Provider Number |
Details" |
21 Gribbles also answered this question "Nil".
22 The delegate asserted, in the first notice, that he was aware that in 1995, when Gribbles made its application to the Minster for acceptance as an approved pathology authority, there was in existence a company known as Australian Metropolitan Medical Services Pty Ltd ("AMMS"). That company had been registered on 28 January 1992. Its objects included the provision of administrative support services in relation to the collection and transhipment of pathology specimens.
23 The delegate went on it say that he was also aware that AMMS had entered into a number of leasing arrangements with medical practitioners whereby those practitioners had sub-leased portions of their surgeries to it. Leases of that kind had been entered into over a period of years, the earliest of which commenced on or about 1 July 1994. These leases were commonly accompanied by service agreements whereby medical practitioners permitted AMMS to introduce into their practice a pathology collector trained in taking pathology specimens "who adopted a position in the practice which was described as that of an `employee'". AMMS undertook to pay the salary and entitlements of such pathology collectors, and also undertook to deduct income tax and pay roll tax from that salary.
24 The delegate then said that he had been advised that a company known as Medtronic Pty Ltd ("Medtronic") had been engaged:
"to act as a service provider for Gribbles in effect acting as an interposed company between Gribbles which was providing the pathology services and AMMS which, at one time, had placed collectors at approximately 169 locations".
25 Medtronic collected funds from Gribbles and paid AMMS and other companies. AMMS generated no income. It was solely dependent on Gribbles for its revenue, which in turn enabled it to discharge its commercial obligations to the various general practitioners referred to above.
26 The delegate wrote:
"In my view, the existence of this arrangement between AMMS and Gribbles meant that, as at the time of the first undertaking, AMMS was "an entity in a financial association" in connection with [Gribbles'] pathology practice within the meaning of question 10 of the Standard Form APA Application.Further, in my view, the arrangement was also an "arrangement [Gribbles had] ... with ... a person (including a company) from whom [a requesting practitioner] derives a financial benefit" within the meaning of question 11 of the Standard Form APA Application."
27 The delegate claimed that Gribbles had failed to provide relevant information about its relationship with AMMS in response to questions 10 and 11 when it submitted its June undertaking for approval.
28 In the delegate's view, Gribbles' responses to these questions were "reasonably capable of being regarded as false or misleading in a material particular". Had Gribbles provided a full and candid description of its arrangements with AMMS, its response might have been relevant to the then delegate's discretion as to whether or not to accept that undertaking.
29 The delegate then referred to s 129(2) of the Act, which relevantly provides:
"129 False statements etc...
(2) A person shall not furnish, in pursuance of this Act or of the regulations, a return or information that is false or misleading in a material particular.
Penalty: $10,000 or imprisonment for 5 years."
30 He said that he was satisfied that there were reasonable grounds for believing that Gribbles' conduct constituted a breach of that section. He noted that a breach of s 129(2) was a "relevant offence" within the meaning of par 15(a) of the undertaking. He concluded that by apparently furnishing false and/or misleading information in response to the questions, Gribbles appeared to have breached par 16 of its undertaking.
(b) Second alleged breach
31 The second alleged breach was said to have arisen in relation to par 6 of the June undertaking.
32 The delegate noted that it was a feature of the AMMS arrangement that AMMS would approach medical practitioners to invite them to introduce pathology collectors trained in taking specimens into their practices. Under that arrangement the collectors was described as "employees" of the practices. The arrangement also provided that AMMS would pay the salaries and entitlements of the collectors, and deduct income tax and pay-roll tax.
33 The delegate said:
"Despite the use of the term "employee" to describe the collector supplied by AMMS (who was usually a trained nurse), I am advised that the relationship which existed in, at least, the majority of sites where an AMMS collector was located was not an employment relationship at all. Rather, in these cases it seems clear that the lawful employer of the nurse was not the relevant medical practitioner but, AMMS itself."
34 The delegate then set out s 16A(5AA) of the Act. It is in the following terms:
"(5AA) A medicare benefit is not payable in respect of a pathology service that has been rendered in relation to a person by or on behalf of an approved pathology practitioner (in subsection (5AB) called the rendering pathologist ) pursuant to a request made to the rendering pathologist by:(a) the treating practitioner; or
(b) another approved pathology practitioner (in subsection (5AB) called the referring pathologist ) to whom the treating practitioner has made a request for that service;
unless the pathology specimen required for the rendering of the service:
(c) was collected from the person by:
(i) the person himself or herself; or
(ii) the treating practitioner; or
(iii) an employee of the treating practitioner on behalf of the treating practitioner; or
(d) was collected from the person by a person to whom this paragraph applies at:
(i) the place where the person was residing; or
(ii) a licensed collection centre (within the meaning of Part IIA); or
(iii) a recognised hospital; or
(iv) a private hospital, or a day hospital facility, in which the person is a patient; or
(v) a nursing home, or other institution, in which the person is a patient; or
(e) was collected from the person by:
(i) a member of the staff of a hospital, or a day hospital facility, in which the person is a patient; or
(ii) a member of the staff of a nursing home, or other institution, in which the person is a patient."
35 The delegate expressed the view that a proper reading of that section, and of the Act as a whole, disclosed a statutory intention that the circumstances in which pathology specimens attracting Medicare benefits could lawfully be collected should be carefully controlled. In particular, s 16A(5AA)(c) made clear that when a pathology specimen was collected at the treating doctor's surgery, that specimen should only be collected by the patient, the treating doctor, or an employee of the treating doctor.
36 The delegate said that, as a result of "its financial and business proximity" to AMMS, Gribbles could reasonably have been expected to be aware that the clinical circumstances in which relevant pathology procedures were being performed did not attract a Medicare benefit. This was because the collection of pathology specimens was being undertaken by persons who were not employees of the treating doctors, in contravention of s 16A(5AA)(c). Accordingly, by causing or permitting its own employees to issue accounts or receipts for fees, Gribbles had allegedly breached par 6.
(c) Third alleged breach
37 It is unnecessary to set out the detail of the third alleged breach. Gribbles acknowledged that this alleged breached had been adequately particularised. It foreshadowed that it would address submissions to the MPRC regarding its defence to this alleged breach at an appropriate time.
(d) Fifth alleged breach
38 The fifth alleged breach was said to have arisen out of Gribbles' failure to comply with par 19 of the June undertaking.
39 The delegate noted that the earlier alleged breaches:
"... were not those of the APA, which is a corporate being and therefore incapable of acting for itself, but rather those of its servants, directors and executives." (emphasis added)
40 He concluded that the matters detailed in relation to those earlier alleged breaches supported a conclusion that:
"Gribbles generally failed to take reasonable measures to ensure that persons acting on its behalf acted in a way which was consistent with the undertakings it had given."
CORRESPONDENCE REGARDING THE ADEQUACY OF THE FIRST NOTICE
41 The delegate, as required under s 23DL(2), invited Gribbles to make submissions showing cause why he should not refer the matter to an MPRC.
42 On 28 January 2000, shortly after receiving the first notice, Gribbles wrote to the delegate, claiming that he had failed to provide adequate particulars of the "reasonable grounds" said to support the belief that the breaches outlined in that notice had occurred. According to Gribbles, that failure meant that the letter of 24 December 1999 did not constitute a valid notice under s 23DL(1).
43 Gribbles set out the additional particulars which it contended ought to be provided in relation to each alleged breach.
44 In relation to the first alleged breach, these were:
* when was it alleged Medtronic was engaged to act as a service provider for the applicant?
* during what period was it alleged that it had done so?
* on what basis was it alleged that Medtronic was "in effect acting as an interposed company between Gribbles ... and AMMS"?
* at what time was it alleged that "AMMS ... had placed collectors at approximately 169 locations?"
* the identity of the 169 locations and the alleged relationship of the applicant to those locations.
* whether it was alleged that the placing of collectors by AMMS at the relevant locations involved any contravention of a provision of the Act, and if so, the identity of the contravention.
* on what basis was it alleged that Medtronic "paid AMMS and other companies"?
* what were the names of the "other companies"?
* were the alleged payments to the "other companies" said to be relevant to the alleged breach, and if so, how?
* on what basis was it alleged that AMMS "was solely dependent on Gribbles for its income".
* what was the nature of the alleged "arrangement between AMMS and Gribbles"?
* when was it alleged that that arrangement was entered into?
* during what period was it alleged that the arrangement was operative?
* who were the parties to the alleged arrangement?
* what was the "financial benefit" derived by a requesting practitioner from "a person (including a company)"?
* the identity of the "person (including a company") from whom [a requesting practitioner]" derived that "financial benefit".
* who was the "requesting practitioner" who derived that "financial benefit"?
* was it alleged that the failure by the applicant "to provide relevant information about its relationship with AMMS ... when it submitted the first undertaking for approval" constituted a breach of the undertaking?
* on what basis was it said that a breach of subsection 129(2) of the Act is a "relevant offence" within the meaning of paragraph 15(a) of the first undertaking?
45 In relation to the second alleged breach, the further particulars sought were:
* what was the relevant "procedure" or what were the relevant "procedures" for the purposes of par 6 of the undertaking?
* identify the facts and circumstances by reason of which it was said that the applicant had a "financial and business proximity to AMMS".
46 In relation to the fifth alleged breach, the additional particular sought were:
* who were the "persons acting on its behalf" referred to?
* in what way was it alleged that the applicant had failed to take reasonable measures to ensure that those persons acted as if they had given the undertaking?
47 On 2 February 2000, the Legal Services Unit of the Health Insurance Commission responded to Gribbles' letter of 28 January 2000. The response said, in part:
"We have examined the particulars you have sought in some detail. We are satisfied that none of the questions posed can reasonably be regarded as requiring information which is of such a fundamental character that it could fairly be said that you have not been afforded a reasonable opportunity to respond to the matters raised in the Notice. On the contrary, the vast majority of your questions ("At what time ...; What are the names ... During which period ...) clearly go to matters of detail rather than substance.
...
With respect, the fundamental difficulty with your letter seems be [sic] that it proceeds from an assumption that the HIC is required to engage in some kind of quasi-curial pleading process when it serves a notice under section 23DL(1) of the Health Insurance Act 1973. This is clearly not the case. Seen in context, it will be apparent that section 23DL(1) is merely the initiating step in an administrative process which may, or may not, result in the matters raised in the notice being referred to a Medicare Participation Review Committee. A decision to refer a matter is, therefore, only a preliminary step in a process which, by definition, requires the full observance of the principles of procedural fairness. Clearly no decision of a substantive character affecting an APA or APP under the process established by Part VB of the Health Insurance Act 1973 can occur without the subject of that inquiry being afforded, in due course, a full and fair opportunity to present their case: see Health Insurance Act 1973 s 124 and, more generally, Edelston v Health Insurance Commission (1990) 96 ALR 673." (emphasis added)
48 This letter in turn provoked a further detailed response from Gribbles on 11 February 2000. In that letter Gribbles maintained its stance that the delegate's letter of 24 December 1999 did not constitute a valid notice. It expressly reserved its right to challenge that notice at an appropriate time. Nonetheless, it made submissions under s 23DL(2):
"... "showing cause why [the Minister] should not take further action in relation to [Gribbles] under this section of the Act, that is, to refer this matter to a chairperson of a Medicare Participation Review Committee"."
49 Gribbles' response to the first alleged breach was essentially to refer again to the lack of particulars which the delegate had provided in relation to that allegation. It also referred to the "general and confusing terms" in which the alleged structure said to involve Gribbles, Medtronic, AMMS and its pathology collectors, and "various general practitioners" were expressed. It submitted that whatever the true position might be regarding the alleged facts, and whatever the true position might be regarding its knowledge of those facts, there was no basis for a finding that it had breached an undertaking.
50 Gribbles referred to the wording, in par 16 of the undertaking, "the authority undertakes not to take any action that would constitute a relevant offence". It noted that this undertaking could only operate prospectively. It asked rhetorically how the provision of misleading answers in an application which accompanied an undertaking of that type could possibly constitute a breach of that undertaking.
51 Gribbles went on to say:
"More importantly, this aspect of the Notice seeks impermissibly to circumvent the criminal law procedural, evidentiary and substantive legal safeguards which apply to subsection 129(2)."
52 In developing its submissions on this issue, Gribbles referred to a number of matters which are comprehensively dealt with below, in the context of its submissions to this Court.
53 Gribbles also analysed in detail the answer given to question 10. It submitted that a relationship in the nature of an "association" required a commonality of interest and a degree of proximity which did not arise from a course of transactions between independently controlled entities. Other arguments of a substantive nature were advanced. A similar approach was taken in relation to its answer to question 11.
54 In response to the second alleged breach, Gribbles again complained of a lack of particulars. At a substantive level, it then submitted that the delegate's construction of s 16A(5AA) was erroneous.
55 In response to the fifth alleged breach, Gribbles yet again complained of a lack of particulars. It noted that the delegate had not identified any of its servants, directors or executives as persons in respect of whom it was said to had breached par 19 of its undertaking.
THE SECOND NOTICE
56 On 5 July 2000, the delegate wrote to Mr D.I. Cassidy QC, the Chairperson of the MPRC, saying that he was satisfied that there were reasonable grounds for believing that Gribbles had breached its undertaking "in the manner described in the section 23DL(1) notice". A copy of the first notice was annexed.
THE THIRD NOTICE
57 On the same day, 5 July 2000, the delegate wrote to Gribbles, informing it that he was satisfied that there were reasonable grounds for believing that there had been a breach of its undertaking, and that the second notice had been given to the Chairperson. He did not provide Gribbles with a copy of the second notice.
THE MPRC HEARING
58 On 24 August 2000, Mr Cassidy wrote to Gribbles, informing it that the MPRC had been established and that a hearing into the alleged breaches had been fixed for early October.
59 On 18 September 2000, Gribbles' solicitors wrote to the Secretary of the MPRC complaining that it had not been provided with a copy of the second notice. The solicitors also complained that Gribbles had not been given any indication as to the contents of that notice, other than Mr Cassidy's assertion, in his letter of 24 August 2000, that the delegate had notified him that he had a reasonable belief that Gribbles had "breached the ...undertaking dated 21 June 1995."
60 Gribbles' solicitors again raised concerns regarding the failure of the first notice to particularise the grounds said to support the delegate's belief that a breach of the undertaking had occurred. They further suggested that the hearing dates set down would not be suitable given their client's inability to formulate its position as a result of the lack of particularity provided regarding the alleged breaches.
61 On 20 September 2000, the Secretary of the MPRC wrote to Gribbles' solicitors enclosing a copy of the second notice. The letter also said:
"... [the Chairperson of the MPRC] is of the view that your contention that the notices do not comply with the Act, and the consequences of that, are matters for agitation at the hearing."
62 In late September 2000, the MPRC advised that new hearing dates of 22 and 23 November 2000 had been fixed.
63 In response to a request by the MPRC for written material, the delegate prepared a detailed case statement. That statement set out comprehensively the nature of the Minister's case, including detailed particulars of all the alleged breaches, save for the fourth, outlined in the first notice.
64 The case statement also annexed a list of persons, including directors of a number of companies, and nurses, who had worked at medical practices. The delegate recommended that these persons be summonsed for oral examination. He also recommended that summonses be served upon those companies, requiring them to produce books of account, written contracts, arrangements or understandings, copies of leases, and agreements operating in the designated period.
65 Gribbles' solicitors responded to the case statement by letter dated 27 October 2000. They confirmed that their client wished to maintain the objections referred to in their earlier correspondence. They asked the MPRC to determine those objections before embarking upon any hearing.
66 In mid November 2000, Gribbles' solicitors provided written submissions in support of its various objections. In substance, the submissions were to the same effect as those advanced before this Court. These submissions are summarised later in these reasons for judgment.
67 Gribbles submitted that it was a necessary precondition to the jurisdiction of the MPRC that there be valid notices issued pursuant to ss 23DL(1) and (4)(c). However, the failure to provide particulars in the first notice, in contravention of the requirements of the Act, meant that that notice was invalid. The validity of the second notice was dependent upon the validity of the first. It followed that if the first notice was invalid, so too was the second.
68 In relation to the first alleged breach, Gribbles argued that it could not possibly have breached an undertaking "not to take any action that would constitute a relevant offence" in circumstances where, on the Minister's own case, the undertaking was not yet in existence at the time the answers to questions 10 and 11 were given.
69 In relation to the second and fifth alleged breaches, short submissions were advanced.
70 Gribbles also submitted that par 16 of the undertaking was invalid because the Minister was not authorised, on a proper construction of the Act, to require the giving of an undertaking in such terms. Alternatively, if par 16 were valid, it was a necessary precondition to the breach that there be a conviction of a relevant offence by a court of competent jurisdiction.
71 Gribbles also submitted that the MPRC, being an administrative body, and not a Chapter III court, could not be invested with the judicial power of the Commonwealth. It could not therefore determine whether or not a person was guilty of a criminal offence. That function was reserved exclusively to the courts.
72 The delegate provided a short submission in response on the day of the hearing. He submitted that, in truth, the exercise Gribbles was inviting the MPRC to undertake involved "judicial review" of the decision by the Minister, through his delegate, to issue a notice under s 23DL(4)(c). He further submitted that the MPRC had no power to review that decision, or to impugn any steps taken prior to it. That was because, on receipt of notice of the Minister's decision, the Chairperson "must" establish an MPRC (s 124E(3)). In other words, the fact that the MPRC had been established, pursuant to that section, was the only "jurisdictional fact" to be proved. The existence of that "fact" was not in dispute.
73 The delegate submitted that it was a fallacy to allege that the particulars supplied under s 23DL(4)(c) in any way founded the jurisdiction of the MPRC. That jurisdiction was founded by notice being given, pursuant to that section, of the Minister's belief, on reasonable grounds, of the matters which were the subject of the notice. It was submitted that Gribbles' submissions were misconceived, and that the MPRC should simply proceed forthwith to hear and determine the allegations which the delegate had referred to it.
74 The delegate challenged Gribbles' contention that the first alleged breach could not be made out because the undertaking "not to take any action that would constitute an offence" was not operative at the time when the answers to questions 10 and 11 were given. He submitted that:
"... this undertaking comprises an implicit warranty as to the accuracy of answers given in the application for acceptance of that undertaking. The Minister's acceptance of the undertaking was dependent upon such a warranty. A contrary view would mean that a false answer to a question in the application, which referred to past events only, could not justify revocation of an undertaking but the commission of an offence by conduct engaged in after the undertaking was given would permit the undertaking to be revoked. It is submitted that a literal approach to the interpretation should be avoided if this would lead to an absurd result."
75 There were also further substantive submissions in relation to the second and fifth breaches.
76 With regard to the issue of a criminal conviction being a precondition to the MPRC's jurisdiction, the delegate submitted:
"Gribbles has assembled a number of authorities relevant to the determination of criminal guilt. These authorities are not relevant to the Committee's tasks. The Committee is not asked to determine that a person has committed a criminal offence. It goes without saying that the Committee would not have such powers. For that reason it is unnecessary to examine in detail the authorities referred to by Gribbles. The Committee is asked to determine whether an undertaking has been breached. It does not impose criminal sanctions nor does it make a final and binding finding of criminal guilt. Indeed it does not make a finding of criminal guilt at all. The terms of the undertaking are that Gribbles will not engage in conduct which would amount to an offence under the Act. There is nothing to stop a tribunal or civil court inquiring into such questions.The undertaking must be read to mean conduct which if proved by admissible evidence in a court of criminal jurisdiction is capable of supporting a criminal conviction. That is a very different question from determining criminal guilt. Such questions are regularly agitated before medical boards or for that matter in courts of civil and not criminal jurisdiction where none of the protections referred to by Gribbles are present or many of those protections are absent. For example, it would be possible to have and, regularly there has been, agitation in the civil courts of allegations of criminal conduct in actions for defamation. The cases which refer to interference in criminal process are irrelevant since there is no criminal process in existence in relation to this matter nor is there any pending. The Committee is not asked to exercise criminal jurisdiction nor is there anything in its finding which would bind a criminal court. Indeed the law is to the contrary: even were the Committee to be a court of civil jurisdiction exercising judicial power any findings made would not be admissible for the purpose of criminal proceedings. That is trite law. The factual matrix from which a breach of the relevant undertaking could be found is from the point of view of an expert committee relatively straightforward. It does not involve complex questions of law but is well within the Committee's expertise."
REASONS FOR DECISION OF THE MPRC
77 On 4 January 2001, in a careful and comprehensive statement of reasons for decision, the MPRC determined that it had jurisdiction to entertain the reference in respect of the first, second, third, and fifth alleged breaches in the first notice. However, insofar as the first and fifth alleged breaches relied on misstatements on the part of Gribbles in the answers to questions 10 and 11 in its application for approved provider authority status, only those misstatements contained in the later application, that of 14 September 1995, could be relied upon.
78 The MPRC's reasons may be summarised as follows:
* it accepted Gribbles' submission that its jurisdiction depended upon the giving by the Minister of a valid notice pursuant to s 23DL(1) to the approved pathology authority. In accepting that submission, it rejected the Minister's contention that the first notice was "not vital", but that the important matter so far as jurisdiction was concerned, was the second notice. It found that "the notice under s 23DL(1), together with the notice required by s 23DL(5), serves the important function of initiating the reference to the [MPRC] and appraising [sic] the [approved pathology authority] of the complaints made against it".
* it considered that the first notice adequately particularised the grounds upon which the Minister believe that Gribbles had breached its undertaking. It observed that this notice had referred specifically to the two undertakings proffered by Gribbles, the June and the September undertakings. It also observed that this notice had identified the particular paragraphs of those undertaking said to have been breached, and set out the manner in which those breaches were alleged to have occurred. In the MPRC's view, the notice gave sufficient information about these allegations to enable Gribbles to make any submissions it thought appropriate, pursuant to s 23DL(2).
* it accepted that the second notice served an important function. It was, in effect, the complaint or pleading by which the breach alleged against the authority was brought before the MPRC set up to deal with it. It found that the annexure of the first notice, coupled with the Minister's express consideration of Gribbles' submissions pursuant to 23DL(2), satisfied the requirements of s 23DL(4)(c). It went on to make three observations about the effect of the second notice:
(i) it appeared to be limited to the June undertaking. It did not, on its face, allege that the Minister was satisfied that the September undertaking had been breached. That was a departure from the first notice.
(ii) it would not have been competent for the Minister by the second notice to refer breaches which had not been specified in the first notice. However, the Minister had not purported to do so.
(iii) if the Minister concluded, after carrying out his obligation to consider submissions made under s 23DL(2), that there had been a breach of an undertaking, he had no discretion but to refer the matter to a Chairperson.
* in relation to the third notice, this too was an important aspect of the procedure to bring the Minister's complaint before an MPRC. Together with the first notice, it fulfilled the requirements of procedural fairness which entitled an approved pathology authority to particulars of the allegations against it, and the opportunity to answer those allegations. The third notice "picked up" the first notice, informed Gribbles that its submissions had been considered and, "using the present tense, that the Minister believes that the undertaking has been broken". However, as with the second notice, the third notice referred only to the June undertaking. That too was a departure from the first notice, and a most serious one. On its face, the third notice was saying that the Minister had considered Gribbles' submission, and still believed that there had been a breach of the June undertaking. There were major difficulties with the reasoning leading to that conclusion.
* the delegate's letter of 20 September 2000 to the Chairperson and to Gribbles, had said in part:
"For the avoidance of doubt and to provide clarity I confirm that it was, and remains, our intention to refer the matter to you in respect of both the undertaking dated 21 June 1995 and the undertaking dated 14 September 2000 [sic] as detailed in the section 23DL(1) Notice issued on 24 December 1999." (emphasis added)
This letter was obviously intended to cure the omission in both the second notice, and the third notice, each of which referred only to the June undertaking. It was the MPRC's view that, at least in relation to the second notice, it could not do this. That notice had to be valid when given. It could not later be amended or amplified. However, the MPRC considered that it was possible to regard the delegate's letter of 20 September 2000 as a fresh reference of the breaches alleged of the September undertaking. That was because the Chairperson appointed the MPRC a week after receiving that letter. The notification to Gribbles of the reference, which was required by s 23DL(5), was effected, on this analysis, by sending a copy of the letter to Gribbles on the same day. The date of the September undertaking had, of course been misstated. However, the mistake was so obvious, and the reference should so plainly should have been to 14 September 1995, and not 14 September 2000, that it could not have confused the recipient. In the result the MPRC regarded the allegations of breach of the September undertaking as being properly before it.
* it did not accept Gribbles' submission that a criminal conviction was a precondition to any inquiry by the MPRC. That submission was said to fail to recognise either the nature of the proceeding before the MPRC, or its true function. Moreover, the undertaking had not been "not to commit a relevant offence", but rather, "not to take any action that would constitute a relevant offence". A finding that an approved pathology authority had breached that undertaking could not, in any relevant sense, be equated to a conviction for a criminal offence.
* it rejected Gribbles' submission that the proceeding before it was criminal in nature. It was the function of the criminal law to punish offenders. That was no part of the function of an MPRC.
* it accepted Gribbles' submission that the undertaking not to engage in conduct which constituted a relevant offence had to be read prospectively. When an approved pathology authority made its application, it was required to submit two documents which were stapled together in book form. One was the application and the other the undertaking. They appeared in that order. Gribbles' first application and its June undertaking, were both made and given on the same day. The same was true of its second application and its September undertaking. It was clear that neither undertaking could operate until accepted by the Minister. That did not occur, in the case of the June undertaking, until 30 June 1995, nine days after the allegedly false statements in answer to questions 10 and 11 had been made. It had not yet occurred in the case of the September undertaking which had never been accepted. It followed that the alleged misstatements in the June application could not constitute a breach of the June undertaking. The remedy for the making of false statements in an application given at the same time as an undertaking must be, not for breach of the undertaking, but prosecution under one of the sections of the Act and, upon conviction, reference to an MPRC, pursuant to s 124D.
* however, the alleged misstatement in the application of 14 September 1995 was capable of amounting to a breach of the June undertaking. By September, that undertaking had been accepted, and was in force. Thus, the first alleged breach, as set out in the first notice, could be relied upon insofar as it alleged a breach, on 14 September 1995, of the June undertaking.
* in relation to the second alleged breach, that is, the undertaking not to cause or permit any person to make a claim for Medicare benefits which it knew or ought to have known were not payable because of the nature of the procedure, or the clinical circumstances in which it was performed, the MPRC concluded, contrary to Gribbles' submission, that the identity of the collector of pathology specimens was part of the clinical circumstances in which collection was made and analysis undertaken.
* finally, the MPRC construed the fifth alleged breach, that is, that Gribbles failed to take all reasonable measures to ensure that its employees and agents would comply with the undertaking, as being an alternative to, and not inconsistent with, the earlier alleged breaches.
THE APPLICATION BEFORE THIS COURT
79 The application before this Court was filed on 5 February 2001. Both parties filed extensive written submissions with the Court and these were amplified during the course of the hearing.
Gribbles' submissions
80 Gribbles, through its counsel, Mr Hanks QC (who appeared with Ms Tate) began by submitting that the second notice, given under s 23DL(4)(c), was an essential preliminary to the exercise of the MPRC's authority, and that the terms of that notice defined the scope of its inquiry, and the extent of its jurisdiction. The "reasonable grounds" upon which the Minister relied in giving that notice had to be the grounds specified in the first notice, given under s 23DL(1). Accordingly, the first notice and the consideration by the Minister of any submissions made by an approved pathology authority pursuant to 23DL(2) were a precondition to the giving of the second notice.
81 Mr Hanks submitted, in relation to the first notice, that it was required to set out particulars of the reasonable grounds that the Minister had for believing that it had breached its undertaking. He submitted that the extent of the particulars required depended largely upon the statutory purpose that the notice was intended to serve. He referred to Deputy Commissioner of Taxation v Woodhams [2000] HCA 10; (2000) 199 CLR 370, at 384, in support of this proposition. He argued that here, the statutory purpose was to enable it to make submissions to the Minister to show cause why no further action should be taken. It was also to define the outer limits of the second notice, and thus any inquiry and subsequent determination by the MPRC.
82 Mr Hanks submitted that the first notice was invalid for a number of reasons:
* it failed adequately to particularise the grounds upon which the Minister believed that Gribbles had breached its undertaking.
* while it alleged that Gribbles' conduct "constituted a breach of s 129(2) of the Act", the particulars required to support an allegation of a criminal offence were not present.
* it failed to set out the precise facts said to constitute the alleged offence, including the date upon which it was said to have occurred, the leasing arrangements between Gribbles and AMMS, other details of the leasing agreements, including the parties thereto and the date, consideration and premises.
* there was no attempt to identify the elements of the offence, or the facts relied upon to establish those elements.
* there were no particulars of the involvement of Medtronic, a company mentioned by name only in the first notice, including the dates of that involvement, the parties to any arrangement with that company, and any consideration passing between the parties.
* it did not define what was meant by the terms "financial association" or "arrangement" found in questions 10 and 11 of the application. These terms were at best uncertain and equivocal.
83 Mr Hanks submitted that, in absence of a valid first notice, each of the following steps in the process under the Act had been tainted. He further submitted that the provision of adequate particulars in subsequent notices, or by other means, could not cure the fundamental deficiencies arising out of the first notice. The second notice could not be broader in scope than the first, it being predicated upon the Minister being satisfied that there were reasonable grounds "being grounds specified in the [first] notice".
84 Mr Hanks contended that the purpose of the second notice was to define the terms of reference for the MPRC's inquiry and the possible bases upon which it might determine that Gribbles had breached its undertaking. He submitted that here, that notice did no more than state that the delegate was satisfied that there were reasonable grounds for believing that Gribbles had breached the undertaking, in the manner set out in the first notice. Thus, he submitted, all of the deficiencies of the first notice infected the second. Furthermore, he submitted, the Act required, in s 23DL(4)(c), that the second notice itself set out particulars of the relevant grounds which gave rise to the Minister's belief that the undertaking had been breached. That obligation could not be met simply by referring to the first notice.
85 In relation to the s 23DL(5) notice, Mr Hanks submitted that no notice which complied with the requirements of the section had yet been provided. He submitted that the letter of 5 July 2000, informing Gribbles that the delegate was satisfied that there were reasonable grounds for believing that it had breached an undertaking, referred to only one of the five alleged breaches, without specifying which one. In addition, that purported notice was similarly infected with deficiencies of each of the first and second notices. Its validity depended upon valid notices ss 23DL(1) and 23DL(4)(c) having earlier been issued.
86 Mr Hanks submitted that the delegate could not, by his letter of 20 September 2000, in which he purported to expand the scope of the first notice by including within it an alleged breach of the September undertaking, remedy his earlier omission of that undertaking from that notice. Rather, he submitted, a fresh notice pursuant to s 23DL(1) would need to issue to bring this additional allegation before the MPRC.
87 Mr Hanks then went on to make submissions as to the construction of par 16 of the undertaking. He submitted that the paragraph should be construed strictly, limiting its operation to an undertaking not to take any action that is found, by a court of competent jurisdiction, to constitute a relevant offence. In other words, he submitted that the terms of the paragraph did not permit the Minister, or the MPRC, to find, acting administratively and without regard to the rules of evidence and the standard of proof in criminal cases, that an approved pathology authority had breached its undertaking in the manner set out therein, at least in the absence of a conviction, or an admission of guilt.
88 He referred to Part VB of the Act and, in particular to ss 124D, 124E and 124F which allow the MPRC to make determinations in relation to medical and dental practitioners convicted of relevant offences. Determinations in such cases can only be made after all appeal rights have been exhausted. Although the Act does not impose the same requirement in relation to offences by an approved pathology authority, he submitted that the same process was implicitly required by par 16 of the undertaking.
89 Mr Hanks based this submission upon the assumption that Parliament could not have intended to authorise an MPRC to determine whether an approved pathology authority's conduct constituted a criminal offence, under s 129(2) of the Act. He submitted that the determination of guilt or innocence was a matter exclusively for the courts. Therefore, the MPRC would exceed its jurisdiction if it were to determine that Gribbles had breached par 16, and thus committed a "relevant offence".
90 Mr Hanks elevated that submission from one directed to the construction of par 16 to almost a constitutional issue by contending that the MPRC could never have been intended to make determinations as to criminal guilt. An attempt to vest such power in an administrative body would contravene Ch III of the Constitution. He referred to Brandy v Human Rights and Equal Opportunity Commission [1995] HCA 10; (1995) 183 CLR 245 in support of that submissions.
91 Mr Hanks drew attention to the fact that a determination of the MPRC was directly enforceable. That is, it was not a mere recommendation to the Minister, but took effect immediately once made. Moreover, the range of determinations available to the MPRC was wide. In included revocation of an undertaking, without which, of course, an approved pathology authority could not continue to operate.
92 Mr Hanks further contended that any determination of guilt by the MPRC would have a tendency to interfere with any criminal prosecution which, while not currently on foot, might reasonably be anticipated. It might therefore constitute a contempt of court: Victoria v Australian Building Construction Employees' and Builders Labourers' Federation [1982] HCA 31; (1982) 152 CLR 25. He also submitted, in this regard, that the Minister was seeking to use the MPRC's inquiry for the improper and collateral purpose of obtaining evidence on the Crown's behalf for such a future prosecution. Moreover, the MPRC's inquiry would take place in circumstances where Gribbles would be deprived of the ordinary protections available to it were such a prosecution to be brought. These included the criminal standard of proof, and the right to trial by jury.
93 Mr Hanks argued that if the MPRC's interpretation of par 16 were correct, Gribbles would be deprived of the defence otherwise available to it under s 129(3), which is in the following terms:
"(3) In a prosecution of a person for an offence against this section, it is a defence if the person proves that he or she did not know, and had no reason to suspect, that the statement, document, return or information, made, issued, presented or furnished by him or her was false or misleading, as the case may be."
94 He submitted that this defence was not available before the MPRC because the words "in a prosecution for an offence against this section" plainly did not apply in those circumstances.
95 Mr Hanks submitted that par 16, if construed as amounting to merely an undertaking not to breach the criminal law, had no work to do other than oblige an approved pathology authority to abide by its existing obligations under the general law. Only in rare circumstances, he submitted, would a court enjoin the commission of a criminal offence: Gouriet v Union of Post Office Workers [1977] UKHL 5; [1978] AC 435 at 499-500. The same doctrine of restraint should apply when construing the terms of the paragraph.
96 Mr Hanks next submitted that the delegate had misconstrued par 6 by seeking, in the first notice, impermissibly to extend the meaning of the term "clinical circumstances" in which a procedure was performed. He argued that, on the alleged facts as set out in the first notice, Gribbles could not have breached any undertaking contained therein.
97 He developed that argument by noting that par 6 obliged an approved pathology authority not to cause or permit the issue of documents supporting a claim to a Medicare benefit where it was aware, or could reasonably be expected to have been aware, that the "clinical circumstances" in which the procedure was performed, by or on behalf of an employed practitioner, would not result in a Medicare benefit being payable in respect of that service. An employed practitioner was defined by par 23(c) of the undertaking as "an approved pathology practitioner employed by the authority". He submitted that the procedure referred to was the rendering of the relevant pathology service. The circumstances in which a specimen was collected were not part of the "clinical circumstances in which the procedure [is] performed".
98 Mr Hanks referred to s 16A of the Act and contended that par 6 was conceived with that section in mind. Section 16A(2) prescribes the circumstances in which a Medicare benefit in respect of a pathology service will be payable . He submitted that the section specifies the persons who may render the pathology service, the place those services may be rendered, the kind of service rendered, the ownership of the accredited pathology laboratory and the relationship between the owner of the accredited pathology laboratory and the approved pathology authority responsible for rendering the service.
99 He submitted that the first notice referred to the "sound clinical reasons" for the Act's stipulation, in s 16A(5AA)(c), that when specimens are collected at a treating doctor's surgery, they may be collected by the patient, the treating doctor or an employee of the treating doctor on behalf of the treating doctor. He argued that in circumstances where the Act expressly permitted the collection of specimens outside a treating doctor's surgery, in accordance with s 16A(5AA)(d), (ie. at the patient's residence, a licensed collection centre, a recognised hospital, a private hospital or nursing home where the person is a patient) the undertaking was not meant to be read in the restrictive manner for which the delegate had contended.
100 Finally, he made submissions in relation to par 19 of the undertaking. He submitted that the paragraph was virtually unintelligible. It could not be said that the circumstances in which Gribbles was obliged to "take all reasonable measures" had arisen under the present set of facts. He suggested a number of ways in which the paragraph might be re-drafted so as to eliminate the supposed confusion and uncertainty. He submitted that the words "in relation to a matter to which this undertaking is given" in par 19 failed to identify the relevant person or conduct in relation to which Gribbles had assumed strict responsibility.
101 He submitted if the Court were to accept his contention in relation to par 19, there could be no investigation by the MPRC of Gribbles' conduct as the delegate had made clear, in the first notice, that "the actions leading to the first four alleged breaches...were not those of the approved pathology authority".
The Minister's submissions
102 The Minister, through his counsel Mr Moshinsky QC (who appeared with Mr Crennan SC) provided short written submissions in reply.
103 Mr Moshinsky submitted that all of the notices issued in this case were valid, and effective to found the jurisdiction of the MPRC.
104 He submitted that the particulars required to be provided in the first notice were merely those of the "reasonable grounds" held by the Minister, or his delegate, for believing that Gribbles had breached its undertaking. The test, therefore, as to whether those particulars were adequate, was whether they provided sufficient information to Gribbles about the basis for the delegate's belief, and not whether they satisfied the more onerous requirements which might be relevant if the Act required the Minister to form a concluded view as to whether a particular breach had occurred.
105 In relation to the second notice, Mr Moshinsky contended that the evidence of a valid first notice was not a precondition to its validity. Nor was it a precondition to its validity that the Minister be shown to have given proper consideration, in accordance with s 23DL(2), to any submissions made to him as to why he should not take further action in relation to the matter.
106 Mr Moshinsky submitted that the test for the adequacy of particulars in relation to the second notice was precisely the same as that applicable to the first notice. As the first notice had been adequately particularised, the same was true of the second notice.
107 He submitted that the Act merely required that, upon receipt of the second notice, the Chairman establish, pursuant to s 124E(3), an MPRC. The MPRC, in turn, was obliged to determine whether there had been a breach of undertaking by the approved pathology authority, in accordance with s 124FC. An MPRC had been established, in accordance with the requirements of the Act, and it was proceeding to determine the matter which had been referred by the delegate to it. Any defect in the first notice, assuming that one could be demonstrated, was therefore no longer of any consequence.
108 As regards the third notice, Mr Moshinsky submitted that the Act simply required that, once the Minister had decided to invoke the jurisdiction of the MPRC by issuing the second notice, he inform the approved pathology authority concerned in writing. This had been done. The letter of 5 July 2000, from the Secretary of the MPRC to Gribbles met this requirement.
109 Mr Moshinsky's submissions regarding the construction of par 16 were the same, in substance, as those advanced before the MPRC, which I have already summarised. He submitted that the words "not to take any action that would constitute a relevant offence" meant simply that the approved pathology authority undertook not to engage in conduct which, if proved by admissible evidence in a court of criminal jurisdiction, would be capable of supporting a criminal conviction. He argued that questions of this type were agitated regularly before medical boards, disciplinary tribunals, and before the civil courts, without the subjects of such investigation being afforded the protections upon which Gribbles insisted. He submitted that the MPRC have never been entrusted with the exercise of criminal jurisdiction, and did not purport to exercise that jurisdiction. Moreover, any findings it made, would, of course, be inadmissible for the purpose of any subsequent criminal proceedings.
110 As to par 6 of the undertaking, he referred to the finding of the MPRC that "the identity of the collector does not go to the nature of the procedure but it is certainly part of the clinical circumstances in which the collection is made and the analysis undertaken". He submitted that proper weight should be accorded to the opinion of the MPRC, it being comprised of relevantly qualified and experienced practitioners in the field of pathology. He further submitted that it accorded with logic and common sense that a pathology service commences with the collection of specimens.
111 Mr Moshinsky submitted that the correct meaning of par 19 was that where there are persons who answer the descriptions in its subparagraphs, an approved pathology authority is required to take reasonable measures to ensure that those persons act as if they had personally given the relevant undertaking. He also noted that only now, after the allegations has been made against it did Gribbles claim for the first time not to understand the meaning of par 19. Curiously it had twice been prepared to proffer an undertaking to abide by that paragraph.
112 Finally, Mr Moshinsky submitted, Gribbles' allegation of an improper and collateral purpose on the part of the delegate was unfounded, and scandalous. Such a serious allegation ought not to have been made without cogent evidence to support it.
CONCLUSION
113 I have concluded that the MPRC does not have jurisdiction to entertain the reference of the first alleged breach made to it by the Minister. However, the other grounds upon which Gribbles relied in support of this application are not made out.
Invalidity of notices
114 The MPRC concluded, correctly in my view, that its jurisdiction was dependent upon the Minister having given a valid notice to Gribbles, pursuant to s 23DL(1). That notice is linked, under the Act, to the second notice, given pursuant to s 23DL(4)(c), by the requirement that particulars of the "reasonable grounds" for "believing ... that an approved pathology authority has breached an undertaking" be set out in each of those notices. The validity of the third notice, given under s 23DL(5), is also dependent upon the validity of the first notice.
115 It is common for statutes to impose procedural requirements which might otherwise be imposed by the rules of natural justice. Many statutes require the giving of notice, or the invitation of submissions, before a particular decision is made. It is also common for decision-making processes to consist of several stages or several intermediate decisions leading to a final decision. At one time it was thought that preliminary decisions, which could not in themselves affect rights without some further action or decision being taken, would not attract a duty to observe natural justice. That approach has now been rejected since such decisions will often affect important interests, including reputation, or legitimate expectations: Ainsworth v Criminal Justice Commission [1992] HCA 10; (1992) 175 CLR 564 at 576-578.
116 In Rees v Crane [1994] 2 AC 173, a statutory procedure provided for the removal of a Judge in three stages; a decision by a commission that the matter ought to be investigated, an inquiry by a tribunal, and a reference to a Judicial Committee. The Privy Council concluded that natural justice applied to require, even at the first stage, that a Judge be given an opportunity to answer complaints before the commission. Their Lordships noted that the latter stages of the procedure would not necessarily be effective to undo any damage done to a Judge's reputation at the first stage.
117 It is well established that the seriousness of a decision for an affected individual is one of the main considerations determining the application of procedural fairness. Generally speaking, the requirements of procedural fairness will be heightened in proportion to the gravity of the consequences involved. It is sometimes said that reasonable prior notice constitutes the "minium content of natural justice". The learned authors, Aronson and Dyer, Judicial Review of Administrative Action, (2nd ed., 2000) comment, at 409-410:
"Since the purpose of notice is to enable participation, the content of the notice must be such as to allow its recipient to participate fully and effectively in whatever manner is found to be appropriate in the circumstances of the particular case...Naturally, the notice must advise the time, date and location of any hearing, or the closing date and place for lodgement of written submissions. Beyond that, the major requirement is to notify the subject matter and potential consequences of the proposed decision. This requirement is most stringent in cases where an individual is threatened with serious deprivation if some fault or misconduct on the part of that individual is established. In that context, the analogy of criminal proceedings, although no more than an analogy, will tend to suggest that the notice must be adequate to allow the individual to prepare and mount an adversarial defence. Consequently it may be necessary for the notice to identify in clear terms: all charges to be relied on; the relevant legislative provisions or rules giving jurisdiction; the particular grounds relied on where there are several alternatives; and particulars of the act, matter or allegations forming the basis for the charge. Far less can be sufficient in cases at the other extreme, such as application cases, investigations and general inquiries into broad issues." (footnotes omitted)
118 In R v Pharmacy Board of Victoria; Ex parte Broberg (1983) 1 VR 211 O'Bryan J held that before the Pharmacy Board could exercise its powers to inquire into, and determine charges against registered pharmacists, and to impose penalties on those found to be guilty of offences, it must advise the pharmacist concerned of the legal nature of the offence with which he is charged, and the particular act, matter or thing alleged as the foundation of the charge. His Honour referred to the well known passage from the judgment of Dixon J (as his Honour then was) in Johnson v Miller [1937] HCA 77; (1937) 59 CLR 467, and also to R v Magistrates' Court at Heidelberg; Ex parte Karasiewicz [1976] VR 680 in support of that conclusion.
119 To the same effect is R v Solicitors' Disciplinary Tribunal; Ex parte L (a solicitor) [1988] VR 757. Section 28(2) of the Legal Profession Practice Act 1958 (Vic) empowered the secretary of the Law Institute to investigate any question concerning the alleged misconduct of a solicitor. Section 28(4) provided that where, after completing his investigation and considering any explanation made by a solicitor, the secretary was of opinion that the solicitor was guilty of misconduct, he could, with the approval in writing of three members of the Council, refer the matter to a full hearing of the Tribunal.
120 The Full Court of the Supreme Court of Victoria held that the approval of the three Council members was not a mere formality. In order to exercise their judgment, those members must know at least what was the substance of the material which led the secretary to form his opinion, including the substance of what his investigation had revealed, and what by then the alleged acts of misconduct were. Moreover, the approval given by the Council members had to be an approval to refer specific items of identified alleged misconduct to the full hearing, and not merely general allegations of misconduct. The Tribunal had to be placed in the position of knowing the parameters of each matter referred to it for adjudication. Where the approval was so wide and vague as not to define the "matter" referred, the Tribunal had no jurisdiction to hear and determine that matter. A solicitor presented before the Tribunal had to be made clearly aware, before the hearing commenced, of precisely that with which he was charged, and the material facts alleged to constitute that charge.
121 Lord Denning once said that if a right to be heard is worth anything, it must carry with it the right to know the case that has to be met: Kanda v Government of Malaya [1962] AC 322 at 337. Hence the need for greater detail and precision where the proceedings have an adversarial character.
122 As the MPRC correctly noted, the consequences for Gribbles of some of the powers which s 124FC authorises it to exercise, are serious. If the MPRC were to revoke the undertaking, and direct the Minister not to accept another for between one and five years, this would effectively put Gribbles, which may have millions of dollars invested in its enterprise, out of business.
123 The MPRC went on to conclude that, notwithstanding this consideration, its task was not to be equated with that of a tribunal authorised to impose an administrative penalty in the nature of a fine. Disciplinary tribunals could punish those brought before them upon relevant complaints. Such bodies might be required to provide detailed particulars if the allegations to be determined. The MPRC was not, in truth, a body which was concerned with notions of punishment.
124 I have difficulty in accepting this distinction. The powers of the MPRC under s 124FC are, if anything, more extensive, and far reaching, than those of many disciplinary tribunals, and even of courts exercising criminal jurisdiction in relation to an offence under s 129(2) if the Act.
125 Under that section, the maximum penalty that can be imposed upon a company is a fine of $10,000. Imprisonment is plainly not an option. Were Gribbles to be charged with having furnished information that was false or misleading in a material particular, there is no doubt that it would be entitled to detailed particulars, including the vast bulk of the particulars which it sought from the MPRC. However, faced with an allegation before an administrative tribunal that its conduct constituted a contravention of the same section, it is said by the MPRC that Gribbles has no entitlement to such detailed particulars. That seems to me to be an unlikely proposition.
126 Where a statute confers power upon a Minister, and imposes conditions about procedure, such as requiring that a notice be served, the failure to observe such a condition may render the Minster's action ultra vires.
127 In Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355 the High Court held that an act done in breach of a condition regulating the exercise of a statutory power was not necessarily invalid. Whether it was, depended upon whether it was a purpose of the legislation to invalidate any act done in breach of the condition. In a joint judgment, McHugh, Gummow, Kirby and Hayne JJ said at 389,
"Traditionally, the courts have distinguished between acts done in breach of an essential preliminary to the exercise of a statutory power or authority and acts done in breach of a procedural condition for the exercise of a statutory power or authority. Cases falling within the first category are regarded as going to the jurisdiction of the person or body exercising the power or authority. Compliance with the condition is regarded as mandatory, and failure to comply with the condition will result in the invalidity of an act done in breach of the condition. Cases falling within the second category are traditionally classified as directory rather than mandatory." (footnotes omitted)
128 Their Honours went on to criticise the continued use of the "elusive distinction between directory and mandatory requirements". This distinction was said to have outlived its usefulness because it deflected attention from the real issue, which was whether an act done in breach of the legislative provision was invalid. In resolving that issue regard must be had to "the language of the relevant provision and the scope and object of the whole statute.": Tasker v Fullwood [1978] 1 NSWLR 20 at 24.
129 In Wade and Forsyth, Administrative Law, (8th ed., 2000), the learned authors comment at 229:
"Procedural safeguards, which are so often imposed for the benefit of persons affected by the exercise of administrative powers, are normally regarded as mandatory, so that it is fatal to disregard them. Where there is a statutory duty to consult persons affected, this must genuinely be done, and reasonable opportunity for comment must be given." (footnotes omitted)
130 In de Smith, Judicial Review of Administrative Action, (4th ed., 1980), at 197-198, it is said that if, as is usual, the reason for imposing an obligation to give prior notice is to afford those affected an opportunity to make representations, and allegations of serious misconduct are made, they should be specified with particularity.
131 Without a notice under s 23DL(4)(c), a Chairperson simply has no authority to establish an MPRC under s 124E(3). The existence of such a notice is, in my view, "an essential preliminary to the exercise of [an MPRC's ] functions", to adapt the language of Project Blue Sky. The terms of the notice define both the scope of the MPRC's inquiry, and the extent of its jurisdiction.
132 The giving by the Minister of a notice under s 23DL(1), and his genuine consideration of any submissions in response to that notice, are preconditions to the giving of a notice under s 23DL(4)(c). The first notice sets the outer limits of the second notice. The "reasonable grounds" upon which the Minister relies in giving the second notice must be the very same grounds as are specified in the first notice. The giving by the Minister of a third notice, under s 23DL(5), is the final stage of the procedure for the establishment of an MPRC. The validity of that notice must, in turn, be dependent upon the validity of the antecedent notices upon which it rests.
133 As the authorities make clear, the extent of the particulars required in any notice will depend upon its statutory purpose: Scurr v Brisbane City Council [1973] HCA 39; (1973) 133 CLR 242 at 254-255, and Websdale v S & JD Investments Pty Ltd (1991) 24 NSWLR 573 at 577-578.
134 In Deputy Commissioner of Taxation v Woodhams [2000] HCA 10; (2000) 199 CLR 370, the High Court, at 384, observed:
"It is the legislative purpose to be served by the giving of a ... notice that determines the nature and extent of the information necessary to satisfy the requirement to set out details ... Absence of information will involve a failure to provide necessary details if, without such information, the notice will not fulfil the purpose for which it is required to be given."
135 See also Kleinwort Benson Australia Ltd v Crowl [1988] HCA 34; (1988) 165 CLR 71 at 79 and Sandvik Australia Pty Ltd v The Commonwealth (1989) 89 ALR 213 at 226.
136 A notice under s 23DL(1) clearly serves a number of purposes. It gives the approved pathology authority notice that the Minister has reasonable grounds for believing that it has breached its undertaking. It provides the basis upon which that authority can make submissions as to why the Minister should take no further action. Finally, it sets the outer limits for any subsequent notice to the MPRC, and for its inquiry and determination.
137 A notice under s 23DL(1) can only serve these purposes if adequate particulars of the allegations are provided. General and non-specific allegations are of little utility.
138 The principal allegation in the purported first notice constituted by the letter of 24 December 1999 was that Gribbles had breached par 16 of its undertaking "not to take any action that would constitute a relevant offence". The particulars of that allegation that were provided referred to s 129(2) of the Act which renders the furnishing of "a return or information that is false or misleading in a material particular" a criminal offence. The conduct said to constitute the breach lay in Gribbles having answered "Nil" to questions 10 and 11 of the standard form application inviting it to provide details of persons or businesses with which it had a "financial association", or a direct or indirect cost or profit sharing "arrangement." It was alleged that Gribbles had such an association, or such an arrangement, with AMMS.
139 I have little doubt that if Gribbles had been charged with an offence under s 129(2), the particulars which were provided by the delegate would be regarded as inadequate: S v The Queen [1989] HCA 66; (1989) 168 CLR 266 at 274-275. Those particulars did not come close to satisfying the requirements identified by Dixon J in Johnson v Miller (supra) albeit in context of a criminal prosecution. The delegate failed to set out the date upon which the section was allegedly contravened. He failed to set out the facts which were said to make the answers to questions 10 and 11 "false or misleading in a material particular." He failed to identify the leasing arrangements by reason of which he contended that those answers contravened the section, whether by date, parties, consideration or premises. He provided no particulars of the alleged involvement of Medtronic whether as to date, parties or consideration. He provided no particulars which cast any light upon the meaning attributed by the Minister, through his delegate, to the terms "financial association" or "arrangement". It scarcely needs to be said that the meaning to be accorded to terms such as these is difficult to ascertain. The concepts are loose and uncertain. To the extent that the delegate inferred that there existed an association or arrangement or the relevant kind, the facts upon which he drew that inference were not sufficiently identified.
140 The matter is made all the more difficult by the confusion regarding the date upon which Gribbles was said to have contravened the section. It is unclear whether that date was 21 June 1995 or 14 September 1995. The MPRC, in its reasons for decision, concluded that it had to be the second of those dates because the June undertaking was not accepted until 30 June. However, the first notice did not make that clear, and the defect could not be cured by later analysis on the part of the MPRC.
141 I accept that there is nothing in the Act to suggest that an approved pathology authority is entitled to be informed of all of the minutiae of possible matters that could lead to the conclusion that it had breached an undertaking and, in particular, contravened s 129(2). Though the proceedings before the MPRC were potentially extremely serious for Gribbles, it cannot be said that those proceedings were to be equated, to any significant degree, with a criminal prosecution. As such, Gribbles was not entitled to the full and detailed particulars to which it might be entitled if it were facing a criminal prosecution: Peverill v Backstrom (1994) 54 FCR 410 at 436.
142 Nonetheless, the level of particularity required in order to constitute a valid notice under s 23DL(1) is informed, to some degree, by the analogy which may be drawn with a prosecution under the very section of the Act alleged to have been contravened by the breach of the undertaking. The Minster chose to proceed by alleging a breach of par 16. If he chooses to refer such an allegation to an MPRC, rather than causing a charge to be laid before the courts, he must appreciate that the consequence is likely to be that he will be fixed with a high measure of compliance with the obligations of procedural fairness
143 I am fortified in my view that the first notice did not adequately particularise the allegations made regarding the first breach by a consideration of other authorities dealing with the sufficiency, or otherwise, of notices in other statutory contexts: see for eg Bannerman v Mildura Fruit Juices Pty Ltd (1984) 2 FCR 581 at 591. A notice should not be read technically or narrowly and it may be expressed in ordinary language. Nevertheless, the notice must convey to the recipient with "reasonable clarity" what is the duty which its service imposes upon him. The recipient should not have to strain for a meaning or be left in confusion as to what was intended. Vague allegations, drafted with imprecision and lack of specificity, may constitute a denial of natural justice and lead to the conclusion that an inquiry has been conducted without jurisdiction or authority: Kelson v Forward (1995) 60 FCR 39 at 64.
144 A notice which refers a matter relating to a relevant criminal activity to the National Crime Authority ("the NCA) is required to describe the "matter": AB v National Crime Authority (1988) 85 FCR 538. In principle, and as a matter of common sense, greater latitude in relation to particulars is likely to be accorded to a purely investigatory body such as the NCA than to a body which conducts hearings, and makes determinations, such as an MPRC.
145 It has been held that even where no allegation of misconduct is made against a person, but merely an allegation that that person has been "inefficient", they are entitled to know, with precision, what specific behaviour has led to that conclusion. There is no reason in principle why procedural requirements preceding dismissal from employment should be read down simply because they are not to be classified as "disciplinary". Considerations of efficiency cannot override basic rights to procedural fairness: Panagopoulos v Secretary, Department of Veteran Affairs (1995) 60 FCR 524 at 538-539, Gribbles' entitlement to adequate particulars must be, if anything, greater than that of an employee in such a case.
146 The deficiencies in the s 23DL(1) notice cannot be cured by subsequent events. The provision of a detailed case statement by the delegate to the MPRC does not overcome the fact that Gribbles did not have that information at the time it sought to persuade the Minister not to refer the matter for determination. Although it is not entirely clear when the delegate came into possession of the details which he provided to the MPRC in the case statement, it is at least likely that he was in position to assemble much of that information without great difficulty. There is nothing to indicate that at least some of the information sought by Gribbles, though correspondence, could not with relative ease, have been provided. The delegate took what seems to me to be a somewhat peremptory approach to what was a reasonable request, merely contending that Gribbles neither required, nor was entitled to, the particulars sought.
147 It follows that in my view the MPRC was not entitled to embark upon a hearing of the first alleged breach. I should indicate however, that this conclusion is based solely upon the invalidity of the first notice by reason of its failure to provide adequate particulars, a failure which rendered invalid both the second and third notices as well.
148 The failure to provide adequate particulars regarding the first alleged breach does not, however, affect the validity of the first notice insofar as it describes the second, third and, in part, fifth alleged breaches. The particulars provided of those breaches were adequate to allow Gribbles to understand fully the complaint which it was required to meet. Although one of the particulars sought in relation to the second alleged breach was similar to several particulars sought in relation to the first alleged breach, the need for that information was much less pressing in relation to that breach.
The construction of par 16
149 I reject each of Gribbles' alternative contentions regarding the first alleged breach. In particular, I do not accept the contention that par 16 of the undertaking should be construed as being confined to the circumstances where an approved pathology authority has been found, by a court of competent jurisdiction, to have committed a relevant offence. I also reject the contention that, on a proper reading, the Act does not authorise the Minister to require a person not to breach the criminal law, as par 16, in the terms alleged by the delegate, would require. I shall state my reasons briefly.
150 I can see no reason, in principle, why the Parliament should be assumed not to have authorised the Minister to require an undertaking "not to take any action that would constitute a relevant offence". I can also see no reason why a breach of that undertaking should not be able to be established by an MPRC, irrespective of whether there has been a conviction or an admission of guilt.
151 There are many situations where findings are routinely made as to whether a particular offence, or type of offence, has been committed without there having been a conviction or admission of guilt. For example, asset forfeiture under proceeds of crime legislation is often based upon a finding that an offence has been committed. It is unnecessary that charges be laid, or that they be proved in a criminal court. The same may be true of cases of defamation. Some torts also amount to criminal offences.
152 It would be contrary to public policy to require that a legal practitioner be convicted of an offence before disciplinary action could be taken against him, at least in circumstances where proof of the commission of that offence was readily available. The criminal process can take years to complete. It would be against the public interest for a solicitor to be permitted to remain in practice, in charge client's money, in circumstances where if can be shown quite clearly that has misappropriated trust funds, until a jury has finally determined his guilt or innocence.
153 I accept that the determination of criminal guilt is a function which is exclusively vested in the judicial branch of government: Federal Commissioner of Taxation v Munro; British Imperial Oil Co Ltd v Federal Commissioner of Taxation [1926] HCA 58; (1926) 38 CLR 153 at 175 and Brandy v Human Rights and Equal Opportunity Commission [1995] HCA 10; (1995) 183 CLR 245 at 258 and 269. I do not accept that the function entrusted to the MPRC is properly to be characterised as "the determination of criminal guilt": Re Phillips (1963) 81 WN (Pt 1) (NSW) 179 at 182. It is the function of the criminal law to punish offenders. It is not the function of an MPRC to do so. Its task is rather to identify practitioners, and others, who by reason of their conduct, cannot be trusted to discharge their responsibilities towards the taxpayers of this country who, at vast expense, fund medicare benefits. That view is supported by the Second Reading Speech of the Minister when undertakings were first introduced in 1986.
154 It is true that the undertaking in this case closely resembled an undertaking not to commit a relevant offence. However, as the MPRC noted, in form that undertaking was "not to take any action that would constitute" a relevant offence. A finding by the MPRC that this undertaking was breached cannot be equated with a conviction for a criminal offence.
155 Gribbles contended that this interpretation of par 16 deprived it of the defence provided by s 129(3). The short answer to that contention is that it is misconceived. If Gribbles can establish, on the balance of probabilities, that it did not know, and had no reason to suspect, that its statements in answer to questions 10 and 11 were false, it would not have breached its undertaking. I note that the MPRC, in par 39 of its reasons for decision, accepted this proposition.
156 Gribbles also contended that the effect of what the MPRC proposed to do was to deprive it of its right to trial by jury, in accordance with s80 of the Constitution. That section has no application to this matter. The MPRC is not conducting a criminal trial, let alone a trial on indictment. Section 80 can, in any event, be circumscribed even within an exercise of judicial power. It provides no fundamental guarantee of the type for which Gribbles contends: R v Federal Court of Bankruptcy; Ex parte Lowenstein [1938] HCA 10; (1938) 59 CLR 556; Kingswell v The Queen [1985] HCA 72; (1985) 159 CLR 264.
157 Gribbles further contended that for so long as there was a possibility that it might be prosecuted for the same offence as is subject of the alleged first breach, a hearing into that matter would amount to a contempt of court. That is because evidence given by or its behalf before the MPRC could be used against it in subsequent criminal proceedings. The MPRC dealt with that submission by indicating that, in its view, the Minister having elected to proceed by way of s 23DL, there was little prospect that there would be a subsequent prosecution. Any penalty imposed by a court would be almost derisory by comparison with the orders that could be made under s 124FC. Accordingly, there was no real risk of interference with the criminal process.
158 The old felony/tort rule by which claims for damages are adjourned until after the conclusion of any criminal proceedings is now virtually obsolete: Philippine Airlines v Goldair (Aust) Pty Ltd [1990] VR 385. It is conceivable, that an attempt to use coercive powers as part of an investigation into whether or not a person has committed a criminal offence may itself give rise to a contempt of court: Hammond v The Commonwealth [1982] HCA 42; (1982) 152 CLR 188. However, this is not such a case.
159 Gribbles' contention that there was no power to require an undertaking that it would not breach the criminal law was based principally upon Gouriet (supra). It was submitted that no court would issue an injunction to restrain the commission of a criminal offence, save in the rarest of circumstances, for example, where there had been a repeated and deliberate flouting of the law. According to that submission, Parliament could not have intended that the Minister could extract a vacuous undertaking which added nothing to the general obligation not to flout the law.
160 In my opinion, it is open to the Minister to require an undertaking of the type proffered by Gribbles. The criminal law provides for particular sanctions for contraventions of the Act, whereas breach of an undertaking, given to the Minster, may attract civil consequences. The undertaking proffered by Gribbles was an undertaking to the Minister, and not an undertaking to the court. Whatever considerations underlie the reluctance of courts to grant injunctions restraining breaches of the criminal law, those considerations do not bind the Minister.
161 Gribbles contended that par 16 should not be construed in accordance with the approach taken by the delegate because to do so would mean that the MPRC was vested with the judicial power of the Commonwealth, contrary to Chap III of the Constitution. This argument seems to me to be devoid of merit. There is no reason why an MPRC should not determine facts and apply concepts defined by statute. A determination that an undertaking was breached is not a criminal conviction. The fact that a determination of the MPRC is directly enforceable without any additional step being taken does not, of itself, render it an exercise of judicial power: Attorney-General (Cth) v Breckler [1999] HCA 28; (1999) 197 CLR 83. The MPRC no more exercises the judicial power of the Commonwealth than does the Professional Services Review Tribunal, established under the same Act: Tankey v Adams [2000] FCA 1089; (2000) 104 FCR 152. The power to reprimand, direct counselling and even fine may have a disciplinary flavour, but this does not mean that such directions can only be made in the exercise of judicial power.
162 Finally, Gribbles' contention that the Minister's decision to refer the first alleged breach to the MPRC involved an improper or collateral purpose should be rejected. An allegation of that nature should not be made without cogent evidence to support it. In the present case, there is no evidence whatever to support that allegation.
The second alleged breach
163 Gribbles contended that the second alleged breach in the s 23DL(1) notice arising out of par 6 of the undertaking was misconceived. It will be recalled that in par 6 Gribbles undertook not to cause or permit any person to make a claim for medicare benefits which it knew, or ought to have known, were not payable having regard to "(a) the nature of the procedure; or (b) the clinical circumstances in which the performed [is] performed." These expressions are not found in the Act, but appear only in the undertaking. The delegate alleged that the specimens had been collected by nurses, who were Gribbles' employees, in breach of s 16A(5AA) of Act. That section required that specimens be collected only by the patient, the treating practitioner, or the treating practitioner's employee. It was alleged that the arrangement between Gribbles and the referring practitioners, through the two corporate intermediaries, was in effect a sham.
164 The MPRC rejected Gribbles' submission that the identity of the collector was not part of the nature of the procedure, or the "clinical circumstances" in which it was performed. It accepted that the identity of the collector did not go to the nature of the procedure but concluded that it was certainly part of the clinical circumstances in which the collection was made, and the analysis undertaken.
165 The MPRC concluded that the procedure referred to in the undertaking included the collection of the specimen, as well as its analysis. That is an interpretation of par 6 which is plainly open, as a matter of law, although it may turn out ultimately to be incorrect. It is not appropriate to grant judicial review in relation to an alleged error of law of this type. Discretionary considerations alone would suggest that the MPRC be permitted to conduct its hearing into this allegation, exploring the details of the arrangements between Gribbles and the referring practitioners. The interposition of the intermediaries is a matter ripe for exploration as well. I reject this aspect of Gribbles' case.
The fifth alleged breach
166 Finally, Gribbles contended that the obligation which it purportedly undertook pursuant to par 19 was "incomplete and opaque", and therefore unenforceable. It was submitted that because no sensible meaning could be attributed to that paragraph, the circumstances in which Gribbles was obliged to "take all reasonable measures" could not have arisen. For that reason there could not have been a breach.
167 The MPRC construed par 19 as being no more than an alternative method of pleading the four earlier alleged breaches. Instead of treating the actions leading to those breaches as those of Gribbles, it alleged in the alternative that they were those of its servant, directors and executives who Gribbles had failed to control.
168 Construed in that manner, there is no substance in Gribbles' submission regarding the fifth alleged breach. I reject this aspect of its case.
ORDERS
169 In my opinion, Gribbles is entitled to a measure of relief under s 39B and 39B(1A) of the Judiciary Act. The MPRC is not authorised to embark upon a hearing of the first alleged breach because that allegation has not been properly particularised. When, and if, those particulars are provided, the hearing into that alleged breach may proceed.
170 In the interim, there is no impediment to the MPRC conducting a hearing into the second and third alleged breaches. Unlike the first alleged breach, each of those breaches has been adequately particularised. There is no procedural unfairness to Gribbles in being required to meet those allegations.
171 Insofar as it is an alternative to the first alleged breach, the fifth alleged breach suffers from the same lack of particulars as does the first. It follows that it too requires the provision of adequate particulars before it may be considered. However, the fifth alleged breach can be considered immediately insofar as it is an alternative to the second and third alleged breaches.
172 Gribbles sought an order by way of prohibition, or alternatively an injunction, restraining the MPRC from conducting a hearing under s 124G for the purpose of determining, under s 124FC(1), whether it had breached the undertaking which it gave under s 23DF. In my view, prohibition is inappropriate because the MPRC is entitled to proceed with the hearing except in relation to the first alleged breach, and the fifth alleged breach insofar as it relates to the first. Injunctive relief is sufficient, particularly since I have concluded that the first notice was defective in part only, and that the invalid component can effectively be severed from the rest.
173 I propose to allow the parties an opportunity to file written submissions in relation to the costs of this proceeding.
I certify that the preceding one hundred and seventy-three (173) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Weinberg. |
Associate:
Dated: 5 July 2002
Counsel for the Applicant: |
Mr P.J Hanks QC with Ms P. Tate |
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Solicitor for the Applicant: |
Schetzer Brott and Appel |
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Solicitor for the First Respondent, submitting save as to costs: |
Ms S. Pryde Australian Government Solicitor |
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Counsel for the Second Respondent: |
Mr N.A. Moshinsky QC with Mr M.J. Crennan SC |
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Solicitor for the Second Respondent: |
Australian Government Solicitor |
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Date of Hearing: |
20 and 21 September 2001 |
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Date of Judgment: |
5 July 2002 |
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