Butler, Bernard Stewart v Fourth Medical Services Review Tribunal

[1998] FCA 755

FEDERAL COURT OF AUSTRALIA

ADMINISTRATIVE LAW - Medical practitioners - rendering of excessive services under Health Insurance Act 1973 (Cth) - appeal from primary judge affirming decision of Medical Services Review Tribunal that practitioner rendered excessive services - whether it was necessary to find that the medical practitioner knew or was recklessly unconcerned whether the services were reasonably necessary - whether clear intention to override the fundamental principle that a guilty mind is required - effect os subsequent amendments to the Act - meaning of “inappropriate practice” - onus of proof - nature of Tribunal proceeding - whether onus of proof applies to administrative tribunals.

WORD AND PHRASES - “inappropriate practice”.

Health Insurance Act 1973 (Cth): s 79(1B), s 82(1), s 106

Tiong v Minister for Community Services and Health (1990) 93 ALR 308 - considered
Minister for Health v Peverill (1991) 29 FCR 262 - considered
Peverill v Backstrom (1994) 54 FCR 410 - considered

BERNARD STEWART BUTLER v FOURTH MEDICAL SERVICES REVIEW TRIBUNAL & ANOR
VG 515 of 1997

BLACK CJ, GOLDBERG & FINKELSTEIN JJ
MELBOURNE
25 MARCH 1998

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	VG 515 of 1997

ON APPEAL FROM THE HONOURABLE JUSTICE NORTH

BETWEEN:

BERNARD STEWART BUTLER
Appellant

AND:

FOURTH MEDICAL SERVICES REVIEW TRIBUNAL
First Respondent

THE MINISTER FOR HEALTH AND FAMILY SERVICES OF THE COMMONWEALTH OF AUSTRALIA
Second Respondent

JUDGES:

BLACK CJ, GOLDBERG & FINKELSTEIN JJ

DATE OF ORDER:

25 MARCH 1998

WHERE MADE:

MELBOURNE

THE COURT ORDERS THAT:

1. The appeal be dismissed.

1. The appellant pay the taxed costs of the respondents, including reserved costs.

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	VG 515 of 1997

ON APPEAL FROM THE HONOURABLE JUSTICE NORTH

BETWEEN:

BERNARD STEWART BUTLER
Appellant

AND:

FOURTH MEDICAL SERVICES REVIEW TRIBUNAL
First Respondent

THE MINISTER FOR HEALTH AND FAMILY SERVICES OF THE COMMONWEALTH OF AUSTRALIA
Second Respondent

JUDGES:	BLACK CJ, GOLDBERG & FINKELSTEIN JJ
DATE:	25 MARCH 1998
PLACE:	MELBOURNE

REASONS FOR JUDGMENT

THE COURT:

This is an appeal from a judgment of North J dismissing an appeal from the decision of the Fourth Medical Services Review Tribunal (“the Tribunal”). The Tribunal had decided that the appellant had rendered excessive services within the meaning of s 79(1B) of the Health Insurance Act 1973 (Cth) (“the Act”) in respect of certain patients.

On 10 June 1993 the delegate of the Minister for Human Services and Health (“the Minister”), pursuant to s 82 of the Act, referred to the Medical Services Committee of Inquiry for the State of Victoria (“the Committee”) for inquiry the question whether any professional service rendered to a patient by the appellant was an excessive service within the meaning of s 79(1B) of the Act. Particulars of the relevant patients and professional services were annexed to the instrument of referral. On 2 August 1993 the Committee informed the appellant that it intended to have a hearing on 14 September 1993 and the appellant was summoned to attend that hearing and produce certain documents, which he did. He gave evidence to the Committee in October and November 1993.

On 21 March 1994 the Committee reported to the Minister and expressed the opinion that the appellant had rendered excessive services and that payment for certain services should be disallowed and other payments for services should be reduced. The Committee recommended that the appellant be counselled pursuant to s 105 of the Act and that he be required to repay Medicare benefits totalling $11,005.05 relative to those services it had concluded were excessive.

On 21 June 1994 the Minister made a determination under s 106 of the Act that the appellant rendered excessive services “because of the many prolonged home visits and surgery consultations rendered” by the appellant and determined that under s 105(2)(ca) of the Act the appellant be counselled on the use of Medicare benefits and that under s 105(2)(f) of the Act the amount of Medicare benefits of $11,005.05 in total, be payable by the appellant to the Commonwealth of Australia.

On 11 July 1994 the appellant, pursuant to s 114 of the Act, requested the reference of the Minister’s determination to the Fourth Medical Services Review Tribunal for review and that reference came on for hearing on 28 February 1995. On 25 June 1996 the Tribunal varied part of the determination under review pursuant to s 119(1)(b)(ii) of the Act, being that part of the determination made under s 105(2)(f) and affirmed the remainder of the determination under review pursuant to s 119(1)(b)(iii) of the Act. It was from that decision that the appellant appealed to the Court. In substance, the question of law raised on the appeal to North J was whether the Tribunal had erred in law in concluding the appellant had been guilty of rendering “excessive services” within the meaning of s 79(1B) of the Act without addressing the question of whether there was any “personal fault” or “lack of innocence” on the part of the appellant in respect of the provision of medical services.

Section 79(1B) at the relevant time provided that:

“A reference in this Division to excessive services is a reference to professional services, being services in respect of which medicare benefit has become or may become payable and which were not reasonably necessary for the adequate medical or dental care of the patient concerned.”

Having identified the manner in which the proceeding had reached the Court, the learned trial judge identified the primary question of law before him as follows:

“The only issue before the Tribunal was whether the services rendered by Dr Butler to the five patients were reasonably necessary for the adequate medical care of those patients.  The first question of law on the appeal is whether it was necessary for the Tribunal to find that Dr Butler knew that the services he rendered were not reasonably necessary, or was recklessly unconcerned whether the services rendered were reasonably necessary or not, before the Tribunal could find that Dr Butler had rendered excessive services.”

His Honour noted that the Tribunal had acted on the basis that it could conclude that a practitioner had rendered excessive services without it being satisfied that the practitioner had a “guilty mind”. His Honour referred to three Full Court decisions, in which the Court considered the provisions of s 79(1B): Tiong v Minister for Community Services and Health (1990) 93 ALR 308; Minister for Health v Peverill (1991) 29 FCR 262 and Peverill v Backstrom (1994) 54 FCR 410. North J then said:

“The judgments in each of these cases expressed the view that the question whether a practitioner had rendered excessive services is an objective question.  The answer to that question is not dependent on the view of the practitioner, although the view of the practitioner will be a relevant consideration.  This means the practitioner can be found to have rendered excessive services even if the practitioner believed that the services were reasonably necessary.  The statutory provisions do not require that the practitioner intended to render excessive services.  Although the three successive Full Courts have expressed this view in the context of cases involving specialists acting on requests made by other practitioners, the view was expressed to apply generally. ”

His Honour then noted the submission on behalf of the appellant that the requirement for “personal fault” meant that a practitioner could not be found to have rendered excessive services unless it was shown that the practitioner had a guilty mind.  His Honour then observed:

“This submission is inconsistent with the judgments in each of the cases which held that whether a practitioner has rendered excessive services is an objective question.  The notion of ‘personal fault’ was used to explain that a specialist did not render excessive services if the specialist had no knowledge of the patient and acted reasonably on a request for a service for the patient from another practitioner.  I repeat the conclusion in Peverill v Backstrom at 432:

“Tiong acknowledges that the terms and context of the provisions of Div 3 dictate that a practitioner who could not reasonably have known certain matters is not caught by the Division’ (emphasis added).

Where the practitioner deals directly with the patient, the practitioner has the knowledge to determine whether a service is reasonably necessary.  With that knowledge, the provision of services beyond what was reasonably necessary, assessed objectively, is the ‘personal fault’ referred to in the judgments.”

The learned trial judge then noted the appellant’s submissions that the relevant provisions of the Act were quasi‑criminal in character, that a citizen has a fundamental right not be found to engage in conduct of such a nature without having a blameworthy state of mind and that the statutory provisions did not manifest a clear intention to override the fundamental principle of a guilty mind as required before a person can be held responsible for criminal or quasi‑criminal conduct.

He then examined the statutory provisions and noted that the reference in s 79(1B) to the concept of services which are “not reasonably necessary” is on its face, a reference to an objective standard and he noted that the provisions dealing with excessive services have a dual function of protecting the public purse and disciplining practitioners who render excessive services. The learned trial judge concluded:

“The objective standard and the nature of the processes established by the Act indicate a clear intention on the part of Parliament that a practitioner will render excessive services if the services, on an objective assessment, are not reasonably necessary, even if the practitioner believed that those services were reasonably necessary.”

On the appeal, the appellant has submitted that the learned trial judge erred in failing to hold that a medical practitioner should not be found to have rendered excessive services within the meaning of s 79(1B) of the Act, unless it was established that he knew that the services rendered were not reasonably necessary in the circumstances, or, he was recklessly indifferent as to whether the services rendered were reasonably necessary or not. Put shortly, the submission was that it was an ingredient of establishing that excessive services had been rendered that the practitioner had a guilty mind. The appellant relied on the well‑known authorities that there was a presumption that mens rea is an essential ingredient in every offence and that the presumption is only to be displaced by clear words in the statute or by necessary implication:  Iannella v French (1967) 119 CLR 84, 93 ‑ 94; He Kaw Teh v The Queen (1985) 157 CLR 523; Coco v The Queen (1994) 179 CLR 427. The appellant submitted that there was nothing in the Act which displaced the presumption of the requirement that mens rea be established and that to the extent that Tiong’s case and the Peverill cases concluded that mens rea was not an ingredient of establishing an allegation of rendering excessive services, they were decided per incuriam as the point relating to mens rea had apparently not been argued in those cases. 

This submission is based on the premise that an investigation whether a medical practitioner has rendered excessive services is a criminal or a quasi‑criminal proceeding. Indeed, the appellant placed particular emphasis upon s 106AB, which permitted the imposition of a penalty and s 106AA which required publication in Parliament of a finding that excessive services had been rendered, as establishing the criminal quasi‑criminal nature of the proceeding. He submitted that North J was in error in not having regard to the serious consequences which might flow from a finding of the rendering excessive services.

In our view, the appellant’s view is based on a flawed premise.  An investigation by the Committee, a determination by the Minister and a review by the Tribunal are not, in any way, criminal proceedings.  The medical practitioner is not charged with an offence - for no offence is relevantly created.  Neither the Committee, nor the Minister, determines any question of guilt.  There is no conviction and although there are adverse consequences for a practitioner they are not criminal in character.  The proceedings, at all levels, are wholly administrative and are the means by which the Executive is given power to ensure that the medical rebate system is not abused.

The nature of the inquiry that must be undertaken has been the subject of consideration by the Full Court of the Federal Court in Tiong v Minister for Community Services and Health (supra), Minister for Health v Peverill (supra) and Peverill v Backstrom (supra).  The appellant sought to gain support for his submissions by what was said by the Full Court in Tiong v Minister for Community Services and Health (supra) and Minister for Health v Peverill (supra) in relation to the need to find “personal fault” before the rendering of excessive services could be established.  However, as was explained in Peverill v Backstrom (supra), the concept of “personal fault” does not involve the notion that before a finding of excessive servicing can be made, it was also necessary to show that the practitioner had a “guilty mind”.  What Peverill v Backstrom (supra) made clear was that it was necessary to have regard to all relevant facts, including facts known to, or which ought to have been reasonably known, to the practitioner in determining whether there was excessive servicing.  This involves a wholly objective analysis by the relevant decision‑maker.

Finally, on this aspect of the appeal, the appellant sought to rely on amendments made to the Act and, in particular, the definitions of “inappropriate practice” in s 82(1) of the Act as now amended, which expression replaced the expression “excessive services” in s 79(1B), to show that the legislature had intended to include the need to establish the ingredient of a guilty mind in determining whether a practitioner had rendered excessive services. Quite apart from questions as to the permissibility of considering an amendment to construe the unamended legislation (as to which see: Grain Elevators Board (Victoria) v Dunmunkle Corporation (1946) 73 CLR 70, 86; Downey v Trans Waste Pty Ltd (1991) 172 CLR 167, 177 and Hunter Resources Ltd v Melville (1988) 164 CLR 234, 254 ‑ 255) the new definition does not make good the appellant’s submission. On the contrary, the definition of inappropriate practice in the new s 82(1) namely, that a practitioner engages in inappropriate practice if the practitioner’s conduct, in connection with the rendering or initiating services, is such that a committee could reasonably conclude that:

“(a)if the practitioner is a specialist - the conduct would be unacceptable to the general body of the members of the speciality in which the practitioner was practising when he or she rendered or initiated the services; or

(b)if the practitioner is not a specialist - the conduct would be unacceptable to the general body of the members of the profession in which the practitioner was practising when he or she rendered or initiated the services”,

makes it quite clear that the test is objective. 

Counsel for the appellant next submitted that the trial judge had erred in law by failing to hold that in the hearing before the Tribunal the Minister bore an onus of proving that the appellant had rendered excessive services.  North J referred to McDonald v Director‑General of Social Security (1984) 1 FCR 354 and concluded that the weight of authority was against describing the proceedings of administrative tribunals in terms of onus of proof (see Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259 at 282 ‑ 283).

North J concluded that the Tribunal had not placed any reverse onus upon the appellant, he concluded that the Tribunal had taken the correct approach, namely that it had to be positively satisfied that a service was not reasonably necessary before it could make a finding to that effect and that in the absence of any such state of satisfaction, no such finding could be made.  We agree with the learned trial judge that the Tribunal has not been shown to be in error in this respect.

The final issue in the appeal is whether the trial judge wrongly rejected a submission that the Minister was estopped from undertaking an investigation that the appellant had rendered excessive services.  The estoppel is said to have come about from a statement made to the appellant by a medical adviser to the Commission, during the course of a previous investigation, that it appeared to the medical adviser that the appellant was not rendering excessive services.

There is no doubt that the trial judge was correct in his rejection of this submission if for no other reason than that the statement attributed to the medical adviser could not be construed as amounting to a promise that no further investigation of the appellant would be conducted.  In the circumstances it is not necessary for us to consider whether, as a matter of legal principle, an estoppel could arise so as to prevent investigation taking place. 

For the foregoing reasons the appeal should be dismissed with costs. 

I certify that this and the preceding six (6) pages are a true copy of the reasons for judgment herein of their Honours

Associate:

Dated:             30 June 1998

Counsel for the Applicant:	Mr J M Selimi
Solicitor for the Applicant:	Jack Cohen, Serry & Co
Counsel for the Respondent:	Mr R M Downing
Solicitor for the Respondent:	Australian Government Solicitor
Date of Hearing:	25 March 1998
Date of Judgment:	25 March 1998