AHBS Company as trustee for Army Health Benefits Society v Private Health Insurance Administration Council Burgess, J.H. & Ors as trustees for Naval Health Benefits Society v Private Health Insurance Administration...

[1993] FCA 399

AHBS COMPANY as trustee for ARMY HEALTH BENEFITS SOCIETY; JOSEPH HENRY
BURGESS; DONALD BRUCE CHALMERS and GEOFFREY JOHN EARLEY as trustees for NAVAL
HEALTH BENEFITS SOCIETY v. PRIVATE HEALTH INSURANCE ADMINISTRATION COUNCIL
Nos. ACTG 38 and ACTG 39 of 1991
FED No. 399
Number of pages - 5
Administrative Law
(1993) 116 ALR 187

COURT

IN THE FEDERAL COURT OF AUSTRALIA

AUSTRALIAN CAPITAL TERRITORY DISTRICT REGISTRY
GENERAL DIVISION
Neaves J(1)

CATCHWORDS

Administrative Law - Judicial review - Registered health benefits organizations - Decisions that applicants pay amounts into Health Benefits Reinsurance Trust Fund set aside - Matter remitted to decision-maker for further consideration - Application by decision-maker for guidance or directions in respect of difficulties in implementation of judgment - Power of Court to give guidance or directions - Nature of guidance or directions that may be given.

Administrative Decisions (Judicial Review) Act 1977 (Cth), s.16

Park Oh Ho v Minister for Immigration and Ethnic Affairs (1989) 167 CLR 637

HEARING

CANBERRA, 3 June 1993

#DATE 17:6:1993

Counsel for the applicants : Mr R.C. Refshauge

Solicitors for the applicants : Macphillamy Cummins and Gibson

Counsel for the respondent : Mrs J.A. Bonsey

Solicitor for the respondent : Australian Government

Solicitor

ORDER

The Court -

1. Declares that Joseph Henry Burgess, Donald Bruce Chalmers and Geoffrey John Earley as trustees for Naval Health Benefits Society are entitled to receive from the Health Benefits Reinsurance Trust Fund an amount of $177,620 in respect of the quarter ended 31 March 1991.

2. Declares that it would be reasonable for the respondent to re-determine the amounts to be paid to the Health Benefits Reinsurance Trust Fund in respect of the quarter ended 31 March 1991 by the registered health benefits organizations included in the pool relating to the State of Victoria (other than Army Health Benefits Society and Naval Health Benefits Society) on the basis of the relative weighted membership of each organization that applied for the quarter ended 31 March 1991.

3. Orders that the respondent pay the applicants' costs of the application.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

JUDGE1

NEAVES J On 16 February 1993, judgment was given upon applications under the Administrative Decisions (Judicial Review) Act 1977 (Cth) ("the Judicial Review Act") made by AHBS Company (a company limited by guarantee) as trustee for Army Health Benefits Society and by Joseph Henry Burgess, Donald Bruce Chalmers and Geoffrey John Earley as trustees for Naval Health Benefits Society. The applications concerned decisions made by the Private Health Insurance Administration Council ("the Council"), a body corporate established by s.82B of the National Health Act 1953 (Cth) ("the Act"), by which it was determined that each of the Societies pay a certain amount into the Health Benefits Reinsurance Trust Fund ("the Fund") established by s.73BC of the Act in respect of the quarter ended 31 March 1991.

1. Each of the Societies was a restricted membership organization within the meaning of that expression as defined in s.4(1) of the Act. As a registered health benefits organization, each Society was required to establish and maintain within its health benefits fund a Reinsurance Account to which certain amounts paid to contributors were to be debited. Each Society was also required to participate in the operations of the Fund as part of a legislative scheme providing for all registered organizations "to share the burden of ... meeting any deficits in the Reinsurance Accounts" in the respective health benefits funds. The Council was to administer the Fund and was required to do so in accordance with principles determined by the Minister pursuant to s.73BC(5B) of the Act. The principles having effect at the relevant time required the Council to calculate, in respect of each quarter and on a State by State basis, the amounts which each registered organization was to contribute to, or receive from, the Fund.

2. For reasons set out in the judgment delivered on 16 February 1993, the decisions under review, namely the decisions made by the Council that the Army Health Benefits Society and the Naval Health Benefits Society pay into the Health Benefits Reinsurance Trust Fund in respect of the quarter ended 31 March 1991 amounts of $2,120,295.00 and $650,290.00 respectively, were set aside. The matters were remitted to the Council for further consideration and determination in accordance with the judgment. Liberty was reserved to each party to apply to the Court on 7 days' notice in the event that difficulties arose in implementing the judgment.

3. Application has now been made to the Court by the Council for directions in relation to the implementation of the judgment.

4. A series of calculations on a State by State basis has been made which, if carried into effect by determinations of the Council in respect of the Army Health Benefits Society and the Naval Health Benefits Society, would result in the amounts payable into the Fund by those Societies in respect of the quarter ended 31 March 1991 being $1,819,306 and $472,678 respectively. The Societies would, thus, become entitled to receive from the Council, by way of refund of the amounts previously paid into the Fund in respect of the relevant quarter, amounts of $301,010 and $177,620 respectively.

5. The comment must be made that the calculations so made do not reflect in every respect the judgment delivered on 16 February 1993. It was there said to be implicit in the principles determined by the Minister and having effect at the relevant time that restricted membership organizations carrying on business in more than one State were to be treated in the same way as the registered organizations that were not restricted membership organizations. The judgment continued:
   

"So to conclude is, I think, consistent with the language of the Minister's determination and requires only that the appropriate administrative steps be taken to collate, in respect of each State in which the organization carries on business rather than nationally, the details necessary to enable the calculations to be made under par.9 of the principles."

1. As I understand it, the calculations which are now before the Court are based on figures that have been ascertained, in the case of restricted membership organizations, by reference to the States of residence of members of the organization rather than by reference to the States in which the organization carries on business. Whether the adoption of one criterion rather than the other would result in significant variation in the amounts of $1,819,306 and $472,678 referred to above is a question incapable of answer on the material before the Court.

2. It also appears that, in making the calculations, certain estimated figures have been used, the organizations concerned being unable to provide actual figures because the relevant records have been destroyed during the time which has elapsed since the determinations were made by the Council in or about May 1991 in respect of the March 1991 quarter.

3. Having made those comments, however, it is apparent from what was said by counsel for the Societies that payments by the Council to those Societies of amounts of $301,010 and $177,620 respectively will be accepted in full satisfaction of any claim which those Societies have in relation to the quantification of their respective contributions to the Fund in respect of the quarter ended 31 March 1991. In those circumstances, it is unnecessary, in order to resolve the dispute between the Council and the Societies, for calculations to be made on a basis other than that which has been adopted.

4. The Council has also sought the assistance of the Court in determining the source from which it is to find the funds necessary to make the payments of $301,010 and $177,620 to the Societies. The problem for the Council arises from the circumstance that, since the Commonwealth ceased to subsidise the Fund, its only source of funds is to be found in payments made to it by registered health benefits organizations pursuant to the legislative scheme to which reference has been made.

5. The Council has proposed that the necessary funds be obtained "by spreading the amounts over the other Victorian organizations .... on the basis of the relative weighted membership of each organization that applied for the March, 1991 quarter". Calculations made on that basis are before the Court and those calculations, if given effect by determinations of the Council amending the determinations previously made by the Council in respect of the affected organizations in respect of the relevant quarter, would result in 15 organisations included in the pool relating to the State of Victoria making payments to the Fund of amounts ranging between $349 and $213,813.

6. Whether it is within the Court's province to give directions to the Council in the circumstances in which such directions are now sought has caused me some concern. On reflection, however, I have concluded that the Court may do so in exercise of the wide powers conferred on the Court by s.16 of the Judicial Review Act and the legislative purpose which that section reflects. I refer particularly to the powers conferred by s.16(1)(b) and (c) and to the recognition by the High Court in Park Oh Ho v Minister for Immigration and Ethnic Affairs (1989) 167 CLR 637 at p.644 that the scope of the powers which the section confers should not be constricted by undue technicality. The Court added that the phrase "any matter to which the decision relates" in s.16(1)(c) should be construed "as encompassing any matter which is so related to, in the sense of connected with, the impugned decision that it is appropriate that it be dealt with by the grant of declaratory relief in judicial proceedings for the review of the propriety of that decision".

7. I am conscious of the fact that, if the Council acts in the manner proposed, its decisions will affect a number of registered organizations not represented before the Court. Those organizations will, however, have whatever rights flow from the making by the Council of determinations fixing the amounts which they are to pay to the Fund. The material before the Court demonstrates that the amount which each of those organizations will be required to pay to the Fund will be less than the amount which that organization would be required to pay if the Council were to re-determine, on a State by State basis and in accordance with the principles having effect at the relevant time construed in the manner referred to in the judgment given on 16 February 1993, the amounts to be paid to, or received from, the Fund by all registered organizations in respect of the March 1991 quarter.

8. It further appears that it was those organizations, being the organizations that, for the purpose of making the calculations required by the principles which had effect at all times prior to 1 April 1991, were included in what was referred to in the earlier proceedings as the pool relating to the State of Victoria, that derived a benefit from the Army Health Benefits Society and the Naval Health Benefits Society being treated as if the whole of their operations were conducted within the State of Victoria. That benefit flowed from the circumstance that those two Societies had a claims' experience which was far better than the average claims' experience of all those organizations included in the pool relating to the State of Victoria.

9. I have also taken into account that no registered organization other than the two Societies the subject of the proceedings which resulted in the judgment of 16 February 1993 has sought an order of review in respect of the decision of the Council in or about May 1991 that that organization pay to, or receive from, the Fund a specified amount in respect of the quarter ended 31 March 1991. In view of the lapse of time since the relevant determinations were made, it may be thought unlikely that the Court would grant an extension of time within which to bring such a proceeding. To adopt the course proposed by the Council will not result in any further reviewable decision being made in respect of any organization other than those directly affected by the proposed course of action.

10. In all the circumstances, I think it appropriate to declare and I do declare -
    

(a) that Army Health Benefits Society and Naval

Health Benefits Society are entitled to receive from the Health Benefits Reinsurance Trust Fund amounts of $301,010 and $177,620 respectively in respect of the quarter ended 31 March 1991; and

(b) that it would be reasonable for the Private

Health Insurance Administration Council to

re-determine the amounts to be paid to the Health Benefits Reinsurance Trust Fund in respect of

the quarter ended 31 March 1991 by the

registered health benefits organizations

included in the pool relating to the State of

Victoria (other than Army Health Benefits

Society and Naval Health Benefits Society) on

the basis of the relative weighted membership of each such organization that applied for the

quarter ended 31 March 1991.