Elmore Quest Pty Ltd and Department of Health and Ageing
[2006] AATA 489
•6 June 2006
CATCHWORDS – AGED CARE – jurisdiction – whether time to apply for review of decision setting notional fee could be extended – whether strict compliance with time limit required – whether Department can waive compliance – whether Minister allowed extension of time to apply for review of sanction decision – whether solicitors’ letter can be taken as the Secretary’s decision or as conveying the Secretary’s decision – the Tribunal does not have jurisdiction.
Acts Interpretation Act 1901 s 33
Administrative Appeals Tribunal Act 1975 ss 25 and 29
Aged Care (Consequential Provisions) Act 1997 s 5
Aged Care Act 1997 ss 1-3, 65-1, 85-1, 85-4, 85-5 and 85-8
Freedom of Information Act 1982
Migration Act 1958 s 478
National Health Act 1953 ss 40AA, 40AE, 45EA, 46D, 47A, 51, 51A, 51B, 51C, 105AB and 105AAB
Gallo v Dawson (1990) 93 ALR 479; 64 ALJR 458
Minister for Immigration, Local Government and Ethnic Affairs v Kurtovic (1990) 21 FCR 193; 92 ALR 93
Minister for Immigration and Multicultural and Indigenous Affairs v Watson; (2005) 145 FCR 542; 88 ALD 115; [2005] FCAFC 181
Pfeiffer v Stevens (2001) 209 CLR 57; 185 ALR 183; [2001] HCA 71
Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355; 153 ALR 490; [1998] HCA 28
Rahman v Minister for Immigration and Multicultural Affairs [2002] FCA 83
Re Commonwealth of Australia; ex parte Marks (2000) 177 ALR 491; 75 ALJR 470; [2000] HCA 67
DECISION AND REASONS FOR DECISION [2006] AATA 489
ADMINISTRATIVE APPEALS TRIBUNAL )
) V2005/744
GENERAL ADMINISTRATIVE DIVISION )
Re ELMORE QUEST PTY LTD (in liquidation)
Applicant
AndDEPARTMENT OF HEALTH & AGEING
Respondent
DECISION
Tribunal: Deputy President S A Forgie
Date: 6 June 2006
Place: Melbourne
Decision:The Tribunal does not have jurisdiction to review any of the decisions of which Elmore Quest seeks review.
S A FORGIE
Deputy President
REASONS FOR DECISION
Prior to its going into liquidation on 28 June 2000, Elmore Quest Pty Ltd (in liquidation) (Elmore Quest) had been the proprietor of a nursing home in a Melbourne suburb. It had been paid various amounts under the National Health Act 1953 (NH Act) and the Aged Care Act 1997 (AC Act), but Brook Bird & Co (the Liquidators) sought review of the decisions to make these payments. Their enquiries had led them to believe that Elmore Quest had been significantly underpaid. I have decided that the Tribunal does not have jurisdiction to review any of the decisions.
BACKGROUND
The parties did not disagree about the essential facts in this matter. In view of that and on the basis of the evidence to which I will refer, I have made the findings of fact that I have set out in this section of my reasons.
Elmore Quest
Since 16 July 1992, Elmore Quest had been the proprietor of a nursing home within the meaning of the NH Act. When the AC Act came into operation on 1 October 1997, it was taken to be an approved provider and to hold allocated places corresponding with the number of beds for which its approval as a nursing home had been given under the NH Act. After the Liquidators had been appointed as the liquidators for Elmore Quest on 28 June 2000, those allocated places were transferred to Moran Health Care Group under s 16-1 of the AC Act.
Payments under the NH Act in respect of approved nursing home patients before 1 October 1997
Under the NH Act, the proprietor of an approved nursing home was “… entitled to receive benefit in respect of each approved nursing home patient in the home for each day on which the patient receive[d] nursing home care in the home.”[1] In most cases, the Commonwealth benefit was the difference between the notional fee and the sum of the amount determined under s 47(2)(b)(iii)[2] and any additional payment contribution applicable to the patient.[3] The notional fee was set under s 46D. The Secretary was required to determine a notional scale of fees in respect of each nursing home and to do so within three years after the end of an accounting period.[4] In determining the scale of fees, the Secretary had to take into account the proprietor’s actual expenditure in providing nursing home care to approved nursing home patients during the accounting period.[5]
[1] NH Act, s 47A
[2] Initially $6.70 but the Minister could determine a higher amount.
[3] NH Act, s 47A(2)
[4] NH Act, s 46D(1)
[5] NH Act, s 46D(3)(a)
On the basis of the affidavit of Ms Alexis Hughes, who is the Assistant Director, Community Programs, Aged and Community Care Branch with the Department of Health and Ageing (Department), I find that there are various steps that preceded the setting of the notional scale of fees. Before it was set, the Department made monthly advances of Commonwealth benefits to the proprietor. It relied on s 51A of the NH Act to make those advances. That section provided that the Secretary might authorise the payment of an advance or advances in respect of Commonwealth benefit that is or may become payable to the proprietor.
The Department assessed an advance at or about the end of the month preceding the month in which the advance was to be paid. It based them on the proprietor’s advice of the actual occupancy of the nursing home in the month preceding the month in which the assessment was being made. The rate for payment was assessed on each resident’s classification or dependency level as assessed by the proprietor. The proprietor made the classification under the resident classification instrument then in operation. There were five levels of classification but each contained an element of:
·the Standard Aggregate Module (SAM) relating to the nursing home’s infrastructure costs such as wages for domestic and cleaning staff, food, laundry, cleaning, plant, equipment and return on investment;
·the Care Aggregated Module (CAM) relating to the costs of nursing and personal care; and
·Other Cost Reimbursed Expenditure (OCRE) relating to costs to be reimbursed through the fee structure of nursing homes in relation to workers’ compensation and payroll tax for all staff, and long service leave and superannuation for nursing and personal care staff.
For the purpose of obtaining payment of the Commonwealth benefit, s 51 of the NH Act provided that the proprietor shall, as soon as practicable after the end of each month or such other period as the Secretary approved, submit a claim for the Commonwealth benefit that was, or might, become payable in respect of that month.[6] The proprietor also had to submit any other information relating to the claim as the Secretary required or requested.[7] Subject only to s 51A, the Commonwealth benefit was not to be paid except in respect of amounts included in a claim submitted in accordance with that section.
[6] NH Act, s 51(1)(a)
[7] NH Act, s 51(1)(b)
The claim form was known as Form NH3. In practice, the Department sent the proprietor a Form NH3 when it made the advance. That form would show the Department’s understanding of residents’ names, admission details, pensioner type, payment type, leave days and the Aged Care Assessment level. The proprietor returned Form NH3 to the Department with any amendments required to reflect actual occupancy and the like. The Department calculated the amount of the advance for the month based on actual occupancy. If it owed the proprietor a further payment, it made that payment. If it had overpaid the proprietor, it would recover the advance from a future payment.
At the end of each of the first three quarters of each financial year, the Department assessed whether the proprietor was likely to owe the Department money or vice versa. It did so by comparing a nursing home’s expenditure on CAM to that point in the year against the CAM funds advanced to it. The quarterly acquittal might result in adjustments to advances made to the proprietor in the future.
A nursing home was required to lodge annual returns of CAM, SAM and OCRE expenditure (Form NH20), Enteral Feeding Expenditure (Form NH24) if applicable and Eligible Oxygen Treatment expenditure (NH25) if applicable. Form NH20 required a statement of the proprietor’s actual expenditure against eligible CAM, SAM and OCRE items of funding. The Department used the form to reconcile advances paid to the proprietor over the preceding financial year and the proprietor’s eligibility to receive Commonwealth benefits. It made adjustments to monthly advances if it found that there was a difference between what the Department had advanced and what the proprietor had expended. In doing so, it had regard to funding tolerances that allowed margins based on standardised benchmarks of expenditure. It described the adjustments as “reconciliation adjustments” and were notified in a “Explanatory Advice of Monthly Adjustments”.
The three checks to which I have already referred relied on the Department’s reconciling information it had been given by the proprietor with its understanding of the Commonwealth benefit to which the proprietor was entitled. They did not check that the proprietor’s information was accurate. Validation was a process the Department adopted for that purpose. It checked the information provided in the Forms NH20 relating to annual expenditure but that check might not occur until some years after the year in question. Usually, but not always, the Department would examine the proprietor’s accounts and staffing rosters at the nursing home. It would check the information on the Form NH20 against that in the books of account and other records. At times, it interviewed staff to verify the time they spent on nursing and personal care and the type of care provided. Validations could also result in funding adjustments that either favoured or did not favour the proprietor. The adjustment would be made through the monthly advances and notified to the proprietor in the Explanatory Advice of Monthly Adjustments.
The setting of the notional scale of fees under s 46D of the NH Act usually followed the validation. It would be set having regard to the proprietor’s actual expenditure. Where the notional scale of fees differed from the Department’s then understanding of the proprietor’s entitlement to Commonwealth benefit, the proprietor would lead either to recovery of the overpayment by an adjustment of the monthly advance or by payment of additional Commonwealth benefit. The adjustment would be explained in the Explanatory Advice of Monthly Adjustments.
Where it recovered advances of Commonwealth benefits, the Department relied on s 51B. Section 51B(1) provided that the proprietor is liable to repay to the Commonwealth any overpayment of Commonwealth benefit. If an overpayment of Commonwealth benefit has been made to the proprietor, it might, in whole or part, be:
“(a) deducted from an amount (including an advance) payable, or to be paid, to that proprietor of the nursing home under this Part; or
(b)recovered by the Commonwealth from that proprietor as a debt due to the Commonwealth; or
(c)recovered from that proprietor, or a later proprietor of the nursing home, in a manner determined in accordance with the principles formulated under subsection 40AA(7).”[8]
[8] NH Act, s 51C(1)
Funding of Elmore Quest up to 1 October 1997
Between 24 February and 30 April 1997, the Department undertook a validation process of Elmore Quest’s nursing home. It wrote to Elmore Quest on 18 June 1997 advising that it had previously written to Elmore Quest about the validation. In that previous correspondence, the letter continued, advice had been given of the areas where adjustments had been recommended and a period of 28 days had been given to allow Elmore Quest to give any additional information it considered pertinent. Elmore Quest had sent additional information on 6 June 1997. Taking that into account, the Department found “… that the amount to be determined as a likely overpayment of benefit will be $493,641.00 and that this amount will be recovered by 12 monthly adjustments of $41,138.00 per month in the advances of general care benefit authorised under section 51A …, commencing with the September 1997 advance.”[9] The letter went on to advise that:
“In accordance with section 40AE of the Act, within 42 days of receipt of notification of the section 51A authorisation of payment of advance you will be able to request a review of the decision. The application will need to be made on the authorised form and must include the authorisation of a lodgement fee and committee processing fee. Application forms may be obtained by telephoning …”[10]
The Department sent Elmore Quest an Explanatory Advice of Monthly Adjustments known as a Form NH3 for the month ending September 1997.[11]
[9] Exhibit 1, exhibit AJH-5
[10] Exhibit 1, exhibit AJH-5
[11] Exhibit 1, exhibit AJH-4
Under s 46D, a delegate of the Secretary set the notional scale of fees for the year ending 30 June 1995 on 25 May 1998. On the same day, it told Elmore Quest of its decision.[12] The records relating to the setting of a notional scale of fees for the year ending 30 June 2004 are lost to the Department. [13]
[12] Exhibit 1, exhibit AJH-6
[13] Exhibit 1 and see the Affirmation of Mr Russell Mark Williams, Exhibit 2 at [7]
In March 1999, the Department undertook a validation of the nursing home for the periods 1995/96 and 1996/1997 and the year 1 July 1997 to 30 September 1998. On 23 March 1999, the Department asked for copies of a number of documents regarding matters such as workers’ compensation, payroll tax, superannuation and training expenses.[14] As a result of the validation, the Department made a number of adjustments for the three accounting periods and advised Elmore Quest accordingly.[15]
[14] Exhibit 1, exhibit AJH-7
[15] Exhibit 1, exhibit AJH-8 and see also Exhibit 2, exhibit RMW-2
A delegate of the Secretary set the notional scale of fees for these three periods on 17 May 1999.[16] The validation led to adjustments in the monthly advances made to Elmore Quest and it was advised of them in July 1999.[17]
[16] Exhibit 1, exhibit AJH-9
[17] Exhibit 1, exhibit AJH-10
Correspondence with the Liquidators
On 19 September 2000, Ms Hughes wrote to the Liquidators in response to their letter suggesting that a validation audit had incorrectly deducted $294,000 in funding from the nursing home.[18] She advised that those set for 1993/94 to 1997/98 had been set under s 46D. They could be reconsidered but only if a request for review was received within 28 days of the decision’s being received by the proprietor. The Department had not received any such request. For periods before 1 July 1993, s 40AE of the NH Act was the relevant provision but again the Department had not received any request for review. Ms Hughes concluded her letter by saying that if the Liquidators wished to “take this matter further” they could “apply in writing to the Minister … in accordance with subsection 46D(6) of the Aged Care Act 1997, for a reconsideration of the decision. …”[19]
[18] Exhibit 1, exhibit AJH-11
[19] Exhibit 1, exhibit AJH-11
On 1 November 2000, the Liquidators wrote to the Department asking for copies of a number of Forms NH3 which related to the period from September 1997 to July 2000 and which they had been unable to find.[20] They wrote again on 1 December 2000 asking for information about the loadings for the years 1992/93, 1993/94 and 1994/95. It was the Liquidators’ understanding that the Department had incorrectly recovered the amount of $493,641 from Elmore Quest and that the amount should have been $17,228. They based this on a letter from the Department dated 27 November 1997. The Liquidators also questioned the application of the loadings for the years 1995/96, 1996/97 and 1997/98. They asked for details regarding the validation and the annual reconciliations for these periods.[21]
[20] Exhibit 1, exhibit AJH-12
[21] Exhibit 1, exhibit AJH-13
On 18 January 2001, the Liquidators sent to the Department a report prepared by Mr David Maule. It supported their claim that Elmore Quest had been underpaid in respect of the period from September 1997 to June 2000. Various meetings between the Liquidators and officers of the Department followed. The Liquidators asked Ms Hughes whether she knew of any person or company familiar with the funding system under the NH Act. Ms Hughes told them that she knew of David Powis of Universal Care Management (UCM). I accept that she did not recommend that the Liquidators should obtain UCM’s services to prepare a report for the Department’s consideration.
Ms Hughes wrote to the Liquidators in a letter dated 20 June 2001 regarding their correspondence and meetings. She explained the system of validation as well as the imposition of sanctions for Elmore Quest’s failure to complete and return Forms NH20 in relation to the 1995/96 and 1997/98 accounting periods. She advised the Liquidators that there was doubt whether the letter dated 27 November 1997 was genuine because there was no copy of it on the Department’s file, no electronic path showing the variation and the person who allegedly signed it did not have delegated authority to do so. In 1999, Elmore Quest’s former administrator at its nursing home had pleaded guilty to a charge of forging and uttering Departmental correspondence. Departmental officers had randomly checked classification of residents, calculations of entitlements and dates of admission and discharge and believed that there was very little to substantiate Elmore Quest’s claims that it had been under-funded by $1.8 million.[22] The Department offered to review specific items where it was suggested that there had been Departmental error but declined to check the NH3 entries over a three year period.
[22] Exhibit 1, exhibit AJH-14
UCM prepared a report and it was sent to the Department. That occurred in or about June 2003. It was divided into four Stages. Stage 1 was an interim report dated December 2001. It identified a claim in the sum of $546,300 in favour of Elmore Quest in respect of superannuation, workers’ compensation insurance and payroll tax payments in respect of the period 1992/93 to 1997/98. Stages 2 and 3 dated February 2003 identified the further sum of $546,269 after its analysis of the validation and sanction processes. Stage 4 was dated May 2003 and reported that Elmore Quest had been underpaid a further $231,792.62 comprising incorrectly applied sanctions, concessional funding, traditional supplement, administrative error and punitive recovery for non-submission of NH20 Forms.
UCM also questioned decisions that had been made under the NH Act. I accept that Ms Hughes understood that she had not agreed to review these decisions. She also understood that Mr Lindsay Carroll, who was the Assistant Director of the Department’s Finance and Payments Section in the Aged and Community Care Branch. Mr Carroll wrote to the Liquidators on 24 November 2003.[23] He wrote that the “… UCM report and claims have been reviewed and compared with the department’s payment records. Whilst some unpaid entitlements have been identified, there are some discrepancies between amounts identified by UCM and amounts verified by the department’s review.” Mr Carroll then went on to deal with the matters raised in Attachments 1, 3 and 4 of Stage 4 of UCM’s report. He concluded that Elmore Quest had been underpaid $190,547.86 as a result of reviewing the subsidy entitlements for residents admitted during the periods of sanctions, a concessional resident supplement for a particular resident and a transitional supplement.
[23] Exhibit 1, exhibit AJH-15
On 14 December 2003, the Liquidators asked whether the Department would be considering Stages 1, 2 and 3 of UCM’s report.[24] Mr Carroll responded that he had advised them at an earlier meeting on 29 July 2003 that those Stages related to funding matters under the NH Act.[25] As Elmore Quest had not asked for the decisions to be reviewed within the time frames provided in the NH Act, there was no provision to reopen them. The matters raised in Stage 4, on the other hand, related to entitlements under the AC Act and could be reassessed. They had been the subject of his earlier letter, Mr Carroll advised.
[24] Exhibit 1, exhibit AJH-16
[25] Exhibit 1, exhibit AJH-17
The Liquidators replied to Mr Carroll’s letter in their own letter dated 26 March 2004. They described the contents of his letter as an “offer” and said that they were seeking advice from UCM and their solicitors regarding it given the “…potentially significant impact that acceptance would have on the creditors of the company...”.[26]
[26] Letter dated 26 March 2004 attached to Applicant’s Amended Outline of Submissions on Jurisdiction at [2]
The Liquidators next wrote to the Department on 21 February 2005. It developed three main issues and foreshadowed legal proceedings if the Liquidators and the Department could not resolve them:
“(a) Invalid imposition of sanctions in respect of the period from 1 September 1997 to 2 September 1998 and from 27 November 1998 to 9 March 1999, in respect of the alleged failure to lodge NH20 forms.
(b)Inadequate consideration of the Stages 1, 2 and Stage 3 reports prepared by Universal Care Management … previously submitted to the Department.
(c)An incorrect total in respect of the incorrectly applied sanctions and other errors conceded by the Department in relation to the items totalling $218,332.32 referred to in the UCM Stage 4 report (the Department having conceded $190,547.00 of this total).”[27]
[27] Exhibit 1, exhibit AJH-19 at [2]
When the Department received the Liquidators’ letter, Ms Hughes instructed the Australian Government Solicitor (AGS) to act on its behalf in relation to the matters it raised. She instructed AGS to respond on its behalf. AGS did so by writing to the Liquidators’ solicitors in a letter dated 21 June 2005. That letter referred to its understanding that the Liquidators had asked the Department to re-open seven decisions that it then summarised. It then set out the Department’s response in relation to each decision.
The AGS’s letter identified the first four decisions as decisions under s 51A authorising payments of advances of Commonwealth benefit to Elmore Quest. Of those, it said that s 40AE(3) of the NHA provides that an application to the Minister to reconsider those decisions needed to have been made within 42 days of the decisions. Given that the legislative regime governing the funding of nursing homes had dramatically changed, the task of re-opening and re-calculating the Commonwealth benefits payable under s 51A would be an extremely onerous and difficult one. The mere provision of expenditure many years after the original decisions were made was insufficient to warrant the Department’s reconsideration of the decisions. Referring to Re Commonwealth of Australia; ex parte Marks[28] and Gallo v Dawson[29], the AGS noted that finality in administrative decisions is a well-established proposition and that a case would need to be exceptional before time would be extended. Furthermore, the delay in pursuing the matter rested with Elmore Quest and not with the Department.
[28] (2000) 177 ALR 491; 75 ALJR 470; [2000] HCA 67; at 495-496; 474; [16]
[29] (1990) 93 ALR 479; 64 ALJR 458; at 481; 459; [13]
The fourth decision to which the AGS referred related to sanctions suspending the payment of Commonwealth benefits. Had Elmore Quest wanted to challenge the decisions, it should have asked the Minister to reconsider the suspension and done so within 28 days of knowing about the decision. That was the effect of s 105AAB(2). Apart from that, the Department considered that the sanctions were correctly imposed and drew support for its position from UCM’s report.[30] It then went on to explain why the Department considered that Elmore Quest had not provided information to it in accordance with s 40AA(6)(ce). The Department also considered that it had assisted Elmore Quest to meet its obligations and rejected any proposition that it had engaged in inappropriate and misleading conduct in relation to the imposition of sanctions.
[30] UCM report: Stages 2 and 3 (Feb 2003) at [4.2.1]
The sixth decision related to the imposition of a sanction for failure to comply with a condition to which the allocation of places under s 14-5 of the AC Act applied. The condition was that Elmore Quest submitted a completed NH20 Form for the accounting period 1996/97. The decision was made on 27 November 1998 under s 65-1 of the AC Act. The AGS advised that a request to the Secretary to review that decision should have been made within 28 days or within such further period as the Secretary allowed. The Department maintained that the extension should not be granted. If the Liquidators had evidence that the Form NH20 had been submitted earlier than 9 March 1999, it should give the Department that evidence. As it was, the Department’s records showed 9 March 1999 as the date on which the Department had received it and was the date on which the sanction was lifted.
REVIEW PROVISIONS
National Health Act: review of decisions under ss 40AE and 46D by the Minister or the Secretary
Section 40AE provides for review in relation to decisions made under s 51A authorising the payment of an advance in respect of a Commonwealth benefit. Section 40AE(1) provides that if the Secretary has either authorised or refused to authorise an advance in respect of a Commonwealth benefit, the proprietor of the nursing home may request the Minister to review that decision. A request to the Minister for a review:
“(a) shall be made only on the appropriate authorised form;
(b)shall be made within 42 days after the day on which notice of the Secretary’s decision is served on the proprietor; and
(c)shall be made only by the person who is the proprietor of the nursing home at the time the request is made.”[31]
If in the request the proprietor has not authorised the deduction of the lodgement fee and the processing fee from any payment of Commonwealth benefits payable to it, the request is taken not to have been made.[32]
[31] NH Act, s 40AE(3)
[32] NH Act, s 40AE(4)
Section 46D is concerned with the setting of notional fees. A proprietor affected by a decision of the Secretary might apply, in writing, to the Minister for a reconsideration of that decision by the Minister. That is the effect of s 46D(6). Section 46D(7) provides that:
“The application must be made within 28 days after the proprietor receives notice of the decision.”
If the proprietor applies for reconsideration of the decision, the Minister may affirm or revoke the decision or vary it as he or she thinks fit. That is provided in s 46D(8).
Section 45EA was repealed by the Aged Care (Consequential Provisions) Act 1997 (ACCP Act) with effect from the commencement of the substantive provisions of the AC Act on 1 October 1997.[33] It had provided that if one or more conditions applicable to an approved nursing home had not been complied with, the Minister might declare that the nursing home did not satisfy those conditions. The Minister did that by serving a written declaration on the proprietor.[34] Where a declaration was in force, the Minister could determine that Commonwealth benefit was not payable to the proprietor while it remained in force and in respect of a patient admitted after the declaration had been made.[35] No provision is made for further review of the Minister’s decision by the Minister in s 45EA itself but provision is made in s 105AAB(2).[36]
[33] ACCP Act, s 5, Schedule 1, Item 34 and s 2(1)
[34] NH Act, s 45EA(1)
[35] NH Act, s 45EA(2)
[36] See [38] below
Aged Care Act: review by the Secretary – s 65-1
Part 6.1 of the AC Act provides for the reconsideration and review of a “reviewable decision”. Decisions that are “reviewable decisions” are identified in s 85-1.[37] Among them is a decision made under s 65-1 to impose a sanction on an approved provider.[38]
[37] AC Act, s 1-3 and Schedule 1, cl 1
[38] AC Act, s 85-1, Item 54
Subject to an exception that is not relevant in this case,[39] the Secretary may reconsider a reviewable decision in either of two circumstances. First, if satisfied that there is sufficient reason to reconsider the decision, the Secretary may do so.[40] The Secretary may exercise that power even if an application for reconsideration of the decision has been made to the Secretary under s 85-5 and even if the Secretary has decided the application and the person affected by the decision has made an application to the Tribunal to review the decision under s 85-8.[41] The Secretary may confirm the decision, vary it or set it aside and substitute another.[42]
[39] The determination under s 44-24 of a care recipient’s ordinary income: AC Act, s 85-4(2)
[40] AC Act, s 85-4(1)
[41] AC Act, s 85-4(3)
[42] AC Act, s 85-4(4)
Second, a person whose interests are affected by a decision may request the Secretary to reconsider the decision.[43] The person must give written notice of the request to the Secretary “within 28 days, or such longer period as the Secretary allows, after the day on which the person first received notice of the decision”.[44] The Secretary may confirm the decision, vary it or set it aside and substitute another[45] but, in the absence of any such decision within 90 days of receipt of the request, the decision is, for the purposes of Part 6.1, deemed to have been confirmed.[46]
[43] AC Act, s 85-5(1)
[44] AC Act, s 85-5(3)(a)
[45] AC Act, s 85-5(5)
[46] AC Act, s 85-5(7)
General principles regarding review by the Tribunal
The Tribunal has power to review a decision if it is given that power by a provision in an enactment. If there is no such provision in an enactment the Tribunal does not have any power in relation to decisions made under that enactment. If there is such a provision but it does not provide for the review the particular decision, or particular type of decision, of which review is sought, the Tribunal does not have any power. This is the effect of ss 25(1) and (4) of the Administrative Appeals Tribunal Act 1975. These provisions are reinforced by s 25(3) which provides that the enactment providing that an application may be made to the Tribunal:
“(a) shall specify the person or persons to whose decision the provision applies;
(b)may be expressed to apply to all decisions of a person, or to a class of such decisions; and
(c)may specify conditions subject to which applications may be made.”
National Health Act: review by the Tribunal – ss 105AAB, 45EA and 105AAB(2)
Rather than providing a general right of review of all decisions made under it, the NH Act gives that right by reference to particular sections. These are provided for in Part VIIA of the NH Act. Section 105AAB(2) states:
“A person who is affected by a reviewable decision who is dissatisfied with the decision may, by notice in writing given to the Minister within the period of 28 days after the day on which the decision first comes to the notice of the person, or within such further period as the Minister (either before or after the expiration of the period), by notice in writing served on the person, allows, request the Minister to reconsider the decision.”
A “reviewable decision” means:
“a decision of the Minister, or of a delegate of the Minister, under section 39BA, or 39BB, subsection 40AA(8), section 40AB or 40AC, subsection 40AD(1A) or 43A(4), section 44, subsection 44A(1A) or (4), section 45A, subsection 45E(4A) or section 45EA or subsection (2) of this section or a decision of the Minister, under section 39AC refusing to vary a statement of conditions of the kind referred to in that section.”[47]
[47] NH Act, s 105AAB(1)
A person who is affected by a reviewable decision may request the Minister to reconsider the decision. That person does so by giving the Minister written notice within 28 days of the decision’s first coming to notice or within such further period as the Minister allows.[48] Under s 105AAB(4), the Minister may affirm, vary or revoke the decision. If, within 42 days of receiving the request, the Minister has not made a decision, it is deemed to have been affirmed under s 105AAB(4).[49]
[48] NH Act, s 105AAB(2)
[49] NH Act, s 105AAB(5)
An application may be made to the Tribunal for review of reviewable decisions that have been affirmed, varied or revoked under s 105AAB(4).[50]
[50] NH Act, s 105AAB(7)
Of relevance in this case are decisions under s 45EA and those under s 105AAB(2). Even though s 45EA has been repealed, its repeal does not affect a reconsideration of the decision under s 105AAB or any review by the Tribunal following an application under s 105AAB(7).[51]
[51] NH Act, s 105AAB(9). This section was inserted with effect from 1 October 1997 by the Aged Care (Consequential Provisions) Act 1997, s 5 and Schedule 1, Item 61.
National Health Act: review by the Tribunal – ss 105AB and 46D
Section 105AB provides that an application may be made to the Tribunal for review of a number of other decisions. Only a decision under s 46D(8) is relevant and review of it is provided for in s 105AB(1AA).
Aged Care Act: review by the Tribunal – ss 85-8 and 65-1
Section 85-8 provides that:
“An application may be made to the Administrative Appeals Tribunal for the review of a reviewable decision that has been confirmed, varied or set aside under s 85-4 or 85-5.”
CONSIDERATION
Section 46D – setting the notional fee
On behalf of the Liquidators, Mr Bick QC acknowledged that Elmore Quest had not made its written request under s 46D(6) of the NH Act to the Minister for reconsideration the 28 day time period referred to in s 46D(7). He submitted that the Department had invited the Liquidators to apply to the Minister for review of the decision when it wrote to them on 19 September 2000. The Liquidators responded to that invitation and spent a substantial sum in obtaining documents under the Freedom of Information Act 1982 and the UCM reports. The Department undertook a review of its decisions and the Tribunal may review its decision.
On the face of the NH Act and reading s 46D at face value, the Tribunal may not review the Department’s decision. It may only review a decision that was made by the Minister, or the Minister’s delegate, under s 46D(8). The Minister may only make a decision under s 46D(8) in response to an application for review made in writing to the Minister under s 46D(6). Under s 46D(7), it must make that application within 28 days after the proprietor receives notice of the Secretary’s decision. No provision is made in s 46D(7) for extension of the 28 day time limit. That takes the argument back to the beginning: as there was no application for review that met the requirements of s 46D(6) and (7), the Minister could not make a decision under s 46D(8).
This reasoning is compatible with that by the Full Court of the Federal Court in Rahman v Minister for Immigration and Multicultural Affairs[52] when it considered s 478 of the Migration Act 1958. That section imposed a time limit within which a person had to apply to the Court. The Full Federal Court said:
“An element of the right created by s 476(1) to apply to the Court for review of a judicially reviewable decision is that the right be exercised by application made within the time specified in s 478(1)(b). That provision imposes a condition that is of the essence of the new right created by s 476, being the new right to seek review by the Federal Court of a judicially reviewable decision. It is a valid exercise of the legislative power to limit the jurisdiction of the Court to entertain only those applications filed within twenty-eight days of notification of a judicially reviewable decision.”[53]
[52] [2002] FCA 83
[53] [2002] FCA 83 at [17]
In testing my reasoning, I have also considered whether strict compliance with s 46D(7) is required. Although developed in a slightly different context, the principles that are relevant in answering that question were set out by the High Court in Project Blue Sky Inc v Australian Broadcasting Authority[54]. It described how to decide whether there was a legislative purpose to invalidate conduct that had been undertaken without compliance with a legislative stipulation:
“The existence of the purpose is ascertained by reference to the language of the statute, its subject matter and objects, and the consequences for the parties of holding void every act done in breach of the conditions. Unfortunately, a finding of purpose or no purpose in this context often reflects a contestable judgment. The cases show various factors that have proved decisive in various contexts, but they do no more than provide guidance in analogous circumstances. There is no decisive rule that can be applied; there is not even a ranking of relevant factors or categories to give guidance on the issue.”[55]
[54](1998) 194 CLR 355; 153 ALR 490; [1998] HCA 28
[55](1998) 194 CLR 355; 153 ALR 490; [1998] HCA 28; at 389; 515; [91]
Taking first the language of s 46D(7), it should be contrasted with that in s 105AAB(2). Both are in the NH Act. Both relate to requests to the Minister to review decisions made by the Secretary. One, s 105AAB(2), specifically permits an extension of time and the other, s 46D(7) does not. That in itself strongly suggests that Parliament intended that an extension of time was permitted in the former and not in the latter. The second aspect that needs to be considered is the place of s 46D in the overall scheme. It is apparent from what I have said above that the Secretary’s decision comes at the end of an investigative process. That process necessarily alerts the proprietor to the fact expenditure is being verified even if the Department does not require the proprietor’s cooperation in the proceedings. That investigative process followed the advance of Commonwealth benefits to the proprietor and the proprietor’s lodging returns as required from time to time. The structure of the NH Act suggests that a speedy resolution is required once the notional scale of fees has been set. By the time the notional scale fees is determined, up to three years have passed since Commonwealth benefits were given to the proprietor. Taken with the absence of any express power given to the Secretary to extend the time for review of the determination, I have decided that there is no power to extend the time for review under s 46D.
Mr Bick submitted that the Department had clearly known of the 28 day time limit and chose to waive it. In view of what I have said above, I do not consider that the Minister, through a delegate or otherwise, can waive the 28 day time limit. That the decision has been made after an application has been made under s 46D(6) and in accordance with the time limit in s 46D(7) are essential requirements before the Minister may reconsider a decision under s 46D(8). This is not a case of the Minister’s waiving a requirement specified by Parliament but a case of founding the Tribunal’s jurisdiction. Even if the Department did think that it had waived the 28 day time limit, its action could not extend the Tribunal’s jurisdiction circumscribed by Parliament.
This conclusion is supported by the principles supporting the concepts of estoppel in relation to the actions of a Commonwealth Department, agency or officer. A representation made by an officer of the Commonwealth, whether explicit or implicit in any action or inaction, cannot over-ride the provisions of the Act or limit the operation of a discretion unless the terms of the Act permit it to do so. Executive action is subordinate to legislation. The doctrine of estoppel that might, in another context, protect any legitimate expectation that was raised by a representation cannot be used to reverse that relationship. As Gummow J said in Minister for Immigration, Local Government and Ethnic Affairs v Kurtovic:
“Estoppel cannot operate to prevent or hinder the performance of a positive statutory duty, or the exercise of a statutory discretion which is intended to be performed or exercised for the benefit of the public or a section of the public …”[56]
[56] (1990) 21 FCR 193; 92 ALR 93; at 208; 109 citing Halsbury’s Laws of England (4th edition), Vol 44, “Statutes” §949.
Equally, estoppel cannot be used to found an argument that a Commonwealth Department, agency or officer is, because of its previous representation or action, prevented from asserting that the particular action is outside its powers or the powers of another agency which is, in this case, the Tribunal. Gummow J explained the reason for this when he said:
“… Any doctrine of estoppel in that context would threaten to undermine the doctrine of ultra vires by enabling public authorities to extend their powers both de facto and de jure by making representations beyond power, which they would then be estopped from denying. …”[57]
[57] (1990) 21 FCR 193; 92 ALR 93; at 208; 108
The same processes of reasoning lead me to conclude that the Tribunal cannot “waive” the provision that it can review a reviewable decision made by the Secretary under s 46D(8). To do so would lead to its going beyond the power it has been given under s 25(4) of the AAT Act to “… review any decision in respect of which application is made to it under any enactment.” As a decision of the Secretary was not made in response to an application for review made within 28 days of the initial decision, an application seeking review of that decision could not be said to have been made to it under the NH Act.
I have also given thought to whether the Secretary could remake the decision under s 46D of the NH Act so that Elmore Quest’s right of review could relate to that remade decision or whether the power was spent with the Secretary’s first decision. The NH Act does not expressly authorise the Secretary to remake or to review the decision. Section 33(1) of the Acts Interpretation Act 1901 provides that:
“Where an Act confers a power or imposes a duty, then, unless the contrary intention appears, the powers may be exercised and the duty shall be performed from time to time as the occasion requires.”
Whether there is a contrary intention is to be found in the context of the NH Act as well as in s 46D itself.[58]
[58] Pfeiffer v Stevens (2001) 209 CLR 57; 185 ALR 183; [2001] HCA 71 per Gleeson CJ and Hayne J at 63-64; 187; [20] and McHugh J at 73-74; 195; [56] and see also Minister for Immigration and Multicultural and Indigenous Affairs v Watson (2005) 145 FCR 542; 88 ALD 115; [2005] FCAFC 181 per Lander J at 560; 133; [118]-[120]
When I look at s 46D and at the NH Act generally, it seems to me that, for most purposes, Parliament intended that the Secretary exercise the power once and once only. The setting of a notional scale of fees comes at the end of a process of classification, assessment, advances of Commonwealth benefit and validation. It is the final assessment of the proprietor’s payment and payment of additional amounts or recovery of overpayments follows upon the scale of fees’ being set. The very fact that the NH Act does not allow for the extension of the 28 day time period within which review may be sought supports my conclusion that the power given to the Secretary in s 46D is intended to be exercised only once. There is, though, one exception in my view. It is an exception inherent in an enactment concerned with advances and recovery of public money. There must be power to make adjustments for arithmetic errors and the like.
Whether the exercise of the power under s 46D can be exercised more than once, does not alter the outcome in this case. In so far as the Tribunal is concerned, it can only review the Secretary’s decision if it has been affirmed, revoked or varied by the Minister after the proprietor has requested a review within 28 days of being notified of the Secretary’s decision. Taking the letter dated 24 November 2003 as a further exercise of the power under s 46D, there was no request made to the Minister to review that decision and so no reviewable decision that this Tribunal may review.
Section 45EA – sanction decisions
For the reasons I have given in relation to the review of decisions under s 46D, the Tribunal will only have jurisdiction to review a decision under s 45EA if that decision meets the description of a decision in respect of which it has been given power to review. The description it must meet is that of a decision of the Minister or a delegate of the Minister under s 45EA that has been affirmed, varied or revoked under s 105AAB(4). The relevant decision of the Secretary in this case was that dated 18 August 1997. It could only come to have been affirmed, varied or revoked under that section if the person affected by the reviewable decision gave the Minister a written notice requesting reconsideration. That notice had to be given within 28 days or within such further period as the Minister allowed. That is the effect of s 105AAB(2) but there is no requirement that the person apply for an extension in any formal way. If the person is outside the 28 day time limit, it is open to the Minister to allow that extension without any formal request for an extension. It might be thought implicit in a request for reconsideration that an extension is sought. In the absence of an express response allowing or disallowing an extension, whether the Minister’s response to the request for reconsideration is to be taken as allowing an extension of time depends on the characterisation of the response.
The letter on which the Liquidators rely as seeking review is its letter of 21 February 2005. It referred to Part 4 of the UCM report dealing with the sanction decisions under s 45EA. It described the sanctions as having been invalidly imposed. It asked the Department to reconsider those parts of Stage 4 of the UCM report to which it referred in its letter and which did not apply to the invalid imposition of sanctions. It did not ask for an extension of the 28 day time period and made no reference to any similar matter. It explicitly referred to the Department’s reviewing its decision and made no reference to the Minister’s doing so.
In view of these matters, I am not satisfied that the Minister ever “by notice in writing served on the person” allowed a further period beyond the 28 day period to request the Minister to reconsider the decision. The AGS’s letter is not, in my view, such a notice. It effectively states that too much time has passed for reconsideration to be entertained. Unlike a request for reconsideration of a decision under s 45EA itself within time, s105AAB(5) cannot be relied on to deem the Minister to have made a decision. A decision to extend the time period is a fresh decision made by the Minister. Section 105AAB(5) deems a decision to have been made when review is sought of a decision already made; not when a fresh decision is to be made.
As the time period has not been extended, there can be no decision by the Minister under s 105AAB(4) affirming, revoking or varying a decision under s 45EA and so no decision that the Tribunal can review. That follows from the fact that, until the Minister has given notice of an extension, there can be no request for review under s 105AAB(2). The deeming provisions within s 105AAB(5) do not operate until the request has been received and 42 days have passed.
Even if I am incorrect, and Elmore Quest should be regarded as having asked the Minister for a further period within which to request reconsideration of the s45EA decision and the AGS letter as conveying refusal of the request, I do not consider that there is a decision that the Tribunal may review. A decision made under s 105AAB(2) is itself a reviewable decision just as a decision under s 45EA is a reviewable decision. As a reviewable decision, Elmore Quest could have requested review of it within 28 days. Once the Minister had affirmed, revoked or varied the original decision regarding an extension, Elmore Quest could then have sought review of that decision in the Tribunal. It has not followed that path, and so there is no decision reviewable by the Tribunal.
Section 65-1 – sanction decisions
In its letter of 21 June 2005, the AGS stated that its client did not consider that reconsideration of the 27 November 1998 is warranted given that the prescribed period of 28 days to request reconsideration had expired six and a half years before. Its client was the Department and given the Secretary’s relationship to the Department, I accept that the letter could be taken as conveying the Secretary’s response to Elmore Quest’s request for review. It cannot be taken as the decision itself for it was clearly a letter written on behalf of a client stating its position in relation to the matter raised by Elmore Quest during their negotiations.
Taking the letter as conveying the Secretary’s response, the response was that the Secretary had not allowed any further time for Elmore Quest to request review. Unlike s 105AAB of the NH Act, s 85-1 does not provide that a decision in relation to time is a reviewable decision. There cannot, therefore, be any way in which the Tribunal may review that decision. It may only review decisions made after reconsidering the reviewable decision and, without further time being allowed, there can be no such reconsideration.
I have also considered whether the deeming provision in s 85-5(7) of the AC Act can assist Elmore Quest. The Secretary is taken to have confirmed the decision of which review is sought if no notice of the decision on review is given in 90 days of receiving the request. Taking the AGS letter dated 21 June 2005 as notification of the decision not to extend the time, the Liquidators received it more than 90 days after their letter dated 21 February 2005. In other words, the Secretary’s decision was notified more than 90 days after it made its request for review. Does the deeming provision operate even though the Secretary had not allowed further time within which to make the request? The answer depends on whether the request has been received even by the Secretary as required by s 85-5(7) even though not made within 28 days of the Secretary’s decision. Section 85-5(3) is expressed in mandatory, rather than permissive terms. That is to say, it provides that the request “must” be made in a written notice and within the time period prescribed. If the word “request” in s 85-5(7) were to be read as referring to a request that did not comply with one or the other of those criteria, it would mean that the substantive decision would be deemed to be confirmed once the 90 day period had passed even if the Secretary had conveyed a decision not to allow further time. In view of this, I have concluded that the Secretary is not deemed to have confirmed the earlier decision under s 65-1 when the Secretary did not notify Elmore Quest of the decision on the request for review made outside the 28 day time limit and in circumstances in which no further time had been allowed.
The provisions of ss 29(4), (5) and (6) of the AAT Act do not assist Elmore Quest. The effect of those provisions is to permit a person to make an application to the Tribunal for review of a decision within a reasonable time or outside that period if there are special circumstances. Those provisions assume two matters: that the Tribunal has been given jurisdiction to review the decision; and that no time limit has been prescribed for the lodgement of the application. It cannot assist Elmore Quest in this case. No time limit has been imposed on the Secretary in making the decision regarding further time and so the second matter is satisfied. The first is not. No provision has been made for the review of that decision by the Tribunal. Therefore ss 29(4), (5) and (6) cannot be relied upon to allow the Tribunal to review any decision regarding the refusal to allow Elmore Quest to make its application for review of the s 65-1 decisions.
For the reasons I have given, I do not consider that the Tribunal has jurisdiction to review any of the decisions of which Elmore Quest seeks review.
I certify that the sixty-six preceding paragraphs are a true copy of the reasons for the decision herein of
Deputy President S A Forgie,
Signed: ...............................................................
Jayne Rathjen Associate
Date of Jurisdiction Hearing 23 February 2006
Date of Decision 6 June 2006
Counsel for the Applicant Mr P. Bick QC
Solicitor for the Applicant Madisons Lawyers
Counsel for the Respondent Mr P. Gray
Solicitor for the Respondent Australian Government Solicitor
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