Calvary Health Care Act Ltd v Australian Capital Territory (No 2)

[2023] ACTSCFC 2

SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY

FULL COURT

Case Title: 

Calvary Health Care ACT Ltd v Australian Capital Territory
(No 2)

Citation: 

[2023] ACTSCFC 2

Hearing Date: 

Decided on written submissions

Decision Date: 

14 September 2023

Before: 

McCallum CJ, Mossop and Baker JJ

Decision: 

1.	The plaintiff has leave pursuant to r 1160(2) to discontinue so much of the proceedings as were not determined by the orders made by the Court on 9 June 2023.
2.	Pursuant to r 1163(2) the plaintiff is to pay the defendant’s

costs up to 28 June 2023 and there is no order as to costs of

the proceedings after that date.

Catchwords:	COSTS – Challenge to the Health Infrastructure Enabling Act
2023 (ACT) and the Health Infrastructure Enabling Regulation
2023 (ACT) – challenge to the validity of Act dismissed – amendments to Regulation address some of the plaintiff’s arguments – where plaintiff asserts that passing of Regulation
constitutes a costs event and that each party should bear its
own costs as a result – proceedings would have been brought
by plaintiff even if amended regulation had been in force at
commencement – plaintiff to pay costs of the defendant up until
the making of Regulation and parties to bear own costs thereafter
Legislation Cited:	Australian Capital Territory (Self-Government) Act 1988 (Cth), s 23(1) Court Procedures Rules 2006 (ACT), rr 1160, 1163(2) Health Infrastructure Enabling Act 2023 (ACT) Health Infrastructure Enabling Regulation 2023 (ACT), ss 9A, 10, 17, 20, 33, 33A
Health Infrastructure Enabling Amendment Regulation 2023
(No 1) (ACT)
Cases Cited:	Calvary Health Care ACT Ltd v Australian Capital Territory
[2023] ACTSCFC 1
Parties:	Calvary Health Care ACT Limited (Plaintiff)
Australian Capital Territory (Defendant)
Representation:	Counsel
D Williams SC with B Kaplan (Plaintiff) P Garrisson SC with H Younan SC and M T Sherman (Defendant)
Solicitors
Thomson Geer (Plaintiff) ACT Government Solicitor (Defendant)
File Number:	SC 225 of 2023
THE COURT:
Introduction
1․	Calvary Health Care ACT Limited (Calvary) challenged the validity of the Health
Infrastructure Enabling Act 2023 (ACT) (the Act) and the Health Infrastructure Enabling
Regulation 2023 (ACT) (Regulation). The proceedings were heard on 7 June 2023 and
on 9 June 2023 the Court made orders dismissing the application for a declaration that
the Act was invalid and dismissing an application for an injunction restraining the
Australian Capital Territory from taking over the operation of the hospital pursuant to the
Act. Reasons for those orders were given on 23 June 2023: Calvary Health Care ACT
Ltd v Australian Capital Territory [2023] ACTSCFC 1.
2․	On 29 June 2023, amendments were made to the terms of the Regulation by the Health
Infrastructure Enabling Amendment Regulation 2023 (No 1) (ACT) (Amendment
Regulation). On 7 July 2023, Calvary informed the Court that it did not wish to proceed
with the balance of the proceedings which challenged the validity of the Regulation and
would discontinue the proceedings. On that day McCallum CJ directed the parties to file
written submissions in respect of costs, with the issue of costs to be dealt with by the Full
Court on the papers. In her Honour’s orders it was noted that “the plaintiff does not seek
to prosecute the balance of proceedings”, but no order was made as to discontinuance
on that day. Her Honour noted that the discontinuance of the proceedings and the
question of costs would be dealt with together. The parties have now provided written
submissions in relation to costs.
3․	Rule 1160(1) of the Court Procedures Rules 2006 (ACT) provides that a plaintiff may
discontinue a proceeding at any time before “the court sets a hearing date for the
proceeding”. Rule 1160(2) provides that a plaintiff may discontinue a proceeding at any
other time “only with the court’s leave or the agreement of the other active parties”. There
is no doubt in the present circumstances that, in the absence of any agreement by the
Territory, Calvary requires leave to discontinue.
4․	Rule 1163(2) provides that if a party discontinues with the Court’s leave “the court may
make the order for costs it considers appropriate”.

Submissions

5․	Calvary’s position is that the amendment to the Regulation provides a basis for departing
from the usual order as to costs.
6․	Calvary submitted that the amendment of the Regulations was a supervening event for
the proceedings. It submitted that the terms of the amendments made were responsive
to comments made by the Court during the hearing on 7 June 2023 and that had those
amendments not been made it was very likely that ss 10, 11, 17 and 33 of the Regulation
would have been held to be invalid and that, as a consequence, the whole of the
Regulation would have been invalid. It submitted that for the purposes of the application
of the rule that costs follow the event, there were in fact two “events”. The first was in
relation to the Act, where the Territory achieved a substantial success. The second was
in relation to the Regulation, where Calvary achieved substantial success. In those
circumstances Calvary submitted that each side should bear its own costs of the
proceedings. It therefore submitted that Calvary should be granted leave pursuant to
r 1160(2) and that the Court should order, pursuant to r 1163(2), that each side bear its
own costs.
7․	The Territory submitted that costs should follow the event. It submitted that Calvary was
wholly unsuccessful in its challenge to the Act and would discontinue any remaining
challenge to the Regulation. It submitted that the judgment of the Full Court resolved the
dispute between the parties in the Territory’s favour by reference to the Act. The Territory
submitted that this was not a proper case in which to attempt any apportionment of costs.
It made submissions directed to the details of the amendments made to ss 9A, 10, 17,
20, 33 and 33A of the Regulation, suggesting that they did not alter the legislative
scheme and were mostly matters of clarification.

Decision

8․	The Full Court made its decision in the context of an application by Calvary for urgent
relief restraining the takeover by the territory of Calvary Hospital. The proceedings were
commenced on 31 May 2023 and, on 2 June 2023, McCallum CJ ordered that the matter
be determined by a Full Court. The urgency arose because the takeover of the hospital
was scheduled to occur on 3 July 2023. In those circumstances, it was necessary to
determine whether the Act, or the Act in combination with the Regulation, fell outside the
power of the Legislative Assembly because it amounted to an “acquisition of property
otherwise than on just terms” as referred to in s 23(1) of the Australian Capital Territory (Self-Government) Act 1988 (Cth). On that issue Calvary was not successful. The validity
of the Act was upheld.
9․	The balance of the proceedings challenged the validity of the whole Regulation or,
alternatively, specific provisions of the Regulation. The challenge was built upon the
proposition, ultimately rejected by the Court, that the Act itself failed to provide just terms
for the acquisitions. However, there were also independent grounds upon which the
Regulation was challenged. Those challenges were directed to the process provided for
resolution of disputes about the compensation to be payable and the considerations
which might affect valuations as part of that process.

10․ Following the decision of the Court on 9 June 2023 and the reasons given on

23 June 2023, the plaintiff still had some reasonably arguable claims of invalidity of some

of the challenged provisions of the Regulations. It is neither necessary nor appropriate

to attempt to assess, in any detail, the merits of those claims simply for the purposes of

determining the question of costs.

11․	That the Amendment Regulation was responsive to some of the issues concerning the
drafting of the Regulation raised during the course of the proceedings was made clear
by the Explanatory Statement for the Amendment Regulation which provided: “The
Regulation has been made in response to tentative concerns expressed in the Supreme
Court proceeding.”
12․	This is not a case in which it could be said that the proceedings would not have been
brought had the amendments made by the Amendment Regulation been in place at the
time when the Regulation first came into effect. Nor is it a case where legislation by a
party has been enacted to deprive a litigant of its cause of action in pending proceedings.
Rather, it is a case in which, after the Court has determined the principal issue between
the parties, some subsidiary arguments which remained available to the plaintiff have
been addressed by the amendments to the Regulation.
13․	Once it is recognised that the proceedings would have been brought in any event and
that the challenge to the Regulation was subsidiary to the challenge to the Act, the case
cannot be characterised as one involving two “events”, one upon which the Territory was
successful and one upon which Calvary would have been successful.
14․	In our view the appropriate outcome is one that:

(a) recognises the failure by the plaintiff to succeed in its challenge to the validity

of the Act which was designed to prevent the acquisition of the hospital

proceeding; and

(b) recognises that the plaintiff’s challenge to the Regulation has been conducted

reasonably and that it now seeks to discontinue that part of the proceedings

without a determination of its contentions, at least in part because of the

Amendment Regulation.

15․	That outcome can be achieved by ordering that the plaintiff pay the defendant’s costs up
until the date of the Amendment Regulation and ordering that there be no order as to
costs after that date.
16․	The orders of the Court are:

1. The plaintiff has leave pursuant to r 1160(2) to discontinue so much of the

proceedings as were not determined by the orders made by the Court on

9 June 2023.

2. Pursuant to r 1163(2) the plaintiff is to pay the defendant’s costs up to

28 June 2023 and there is no order as to costs of the proceedings after that

date.

I certify that the preceding sixteen [16] numbered paragraphs are a true copy of the Reasons for Judgment of the Court

Associate:

Date: