Grey v Health Insurance Commission & Ors

[2003] HCATrans 577

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Melbourne  No M83 of 2002

B e t w e e n -

DR JOHN HOWARD GREY

Applicant

and

THE HEALTH INSURANCE COMMISSION

First Respondent

DR ALLAN JOHN HOLMES (as Director of Professional Services Review)

Second Respondent

DR CHING TSIANG (as Chairperson of Professional Services Review Committee No 126)

Third Respondent

DR JOHN GARNER (as Member of Professional Services Review Committee No 126)

Fourth Respondent

DR BRUCE INGRAM (as member of Professional Services Review Committee No 126)

Fifth Respondent

DR LOUISE MORAUTA (as the Determining Officer)

Sixth Respondent

Application for special leave to appeal

McHUGH J
HAYNE J

TRANSCRIPT OF PROCEEDINGS

AT MELBOURNE ON FRIDAY, 14 FEBRUARY 2003, AT 10.06 AM

Copyright in the High Court of Australia

_____________________

MR B.F. MONOTTI:   If the Court pleases, I appear with my learned friend,  MR P.W. LITHGOW, for the applicant.  (instructed by Grundy Maitland & Co)

MS F.P. HAMPEL, QC:   If the Court pleases, I appear with my learned friend, MR S.J. MOLONEY, for the respondent.  (instructed by Minter Ellison)

McHUGH J:   Yes, Mr Monotti.

MR MONOTTI:   If Your Honour pleases.  This application raises questions of importance affecting pre‑existing rights of medical practitioners who provide medical services for which benefits are paid under the Medicare scheme established by the Health Insurance Act 1973. In practice, your Honours, there would be very few medical practitioners who do not fall into this category. At present, general practitioners who provide high levels of servicing are, as this case clearly slows, for that reason alone exposed to a high risk of investigation under the Act, the making of severe adverse findings as to their past professional conduct and the imposition of severe penalties.

The scheme which we seek to impugn is, we would be submitting, intolerable in practice.  It is inimical to the objective to be implied into this Act of providing low‑cost health care to all citizens, including those in areas where there might be necessarily very high patient‑to‑doctor ratios such as remote areas, rural areas and the like.

By Parts VAA of the Act, a scheme was created to examine the conduct of a medical practitioner for the purpose of, first, the making of a finding as to whether or not the practitioner had engaged in inappropriate practice in connection with rendering or initiating services, inappropriate practice being defined by section 82(1) as “conduct in connection with rendering or initiating services” which “would be unacceptable to the general body of general practitioners”; secondly, the taking of action against the practitioner upon such a finding being made.  This, we would be submitting, is the clear object and effect of sections 80 and 82.

Upon the making of a finding that the practitioner has engaged in inappropriate practice, a determination against the practitioner must be made.  We emphasise that it must be made.  These are the clear terms of section 106U.  The determinations against the practitioner under section 106U range from a reprimand to a direction that the practitioner be disqualified in respect of the provision of services under the Medicare scheme.  The range of determinations includes one whereby there may be a direction that the practitioner repay to the Commonwealth benefits already paid and, necessarily, if there were any such determination, that would require the practitioner to repay income already received by him and presumably income upon which he has already paid tax and which he has used in relation to the organisation of his affairs.

A finding that a medical practitioner has engaged in inappropriate practice as defined in section 82 of the Act is, we submit, a finding that affects pre‑existing valuable rights of the practitioner.  First, the practitioner’s right to enjoy an unstained reputation in the way of his professional standing and the conduct of his practice is irreparably damaged by such a finding.  Secondly, upon the making of the finding and by reason of it, a determination adverse to the practitioner’s pre‑existing rights must be made.  We would be submitting that these are not rights which spring from the legislation.  These are pre‑existing rights which the practitioner is entitled to preserve in all ways reasonably available to him.

In rejecting, in this case, the applicant’s constitutional argument, the Full Court of the Federal Court adopted and applied the reasons for decision of a differently constituted Full Court in the case of Tankey v Adams, which is No 2 in our list, and I refer to pages 144 to 145 from line 29 of the application book, 146 to 147 from line 25.  The reasons in both of these decisions, we submit, were fatally flawed in the following respects.         First, in both cases the Full Court did not recognise or give legal weight to the valuable pre‑existing rights to which I have referred, and by this omission the Full Court has decided in favour of constitutional power without considering at all the effect of a finding that a practitioner has engaged in inappropriate practice upon the practitioner’s pre‑existing rights.

McHUGH J:   Now, the legislation upon which you rely, or the particular provisions upon which you rely, have now been repealed, have they not?

MR MONOTTI:   Not entirely, your Honour, no.  Some ‑ ‑ ‑

McHUGH J:   Well, section 86 has, has it not?

MR MONOTTI:   Yes, it has been replaced, your Honour, with another form, another provision which we would be submitting whilst at first blush may appear to have been intended to in some way overcome some of the secondary arguments upon which the applicant relies, cannot possibly achieve that because the scheme still operates essentially in the same way.  It is still an inquiry into conduct of the practitioner as to whether or not he has engaged in inappropriate practice.

HAYNE J:   Is not your argument at base an argument that no one may investigate whether a practitioner has engaged in inappropriate practice with a view to disciplinary action except a court?  Is that the essence of it?

MR MONOTTI:   Yes, it is, your Honour.

HAYNE J:   Because that puts the police in rather a difficult position, it seems to me.  It suggests that the police cannot go and investigate whether there has been, for example ‑ I take an example divorced from the facts of this case you understand ‑ the police could not investigate whether a doctor had defrauded the Commonwealth by making inappropriate claims on Medicare.  It is a very large proposition, Mr Monotti.

MR MONOTTI:   Your Honour, I think I too readily made a concession in answer to your Honour’s question.  I think I should explain the limits of it.  Investigation for the purpose of making a finding as here.  This is not simply an investigation.  This is an investigation which will produce a finding.  A finding which of itself, we submit, necessarily if adverse to the practitioner, affects his pre‑existing rights.  So I do not put so broadly the proposition that one cannot proceed with an investigation, as your Honour put to me.  The real core of this particular argument is that the investigation itself produces a finding, and it is that finding which, having regard to the scheme of this Act, affects pre‑existing rights necessarily.

HAYNE J:   And the step you challenge is that which takes place under the former section 86 of the Act, is that right?

MR MONOTTI:   Yes, your Honour.

HAYNE J:   A step preliminary to determination of whether or not disciplinary action should be taken against the doctor concerned.

MR MONOTTI:   Your Honour, it is not limited to that.  Section 86 initiates the process, and it is the process to which we object constitutionally.  We submit that the process necessarily then sets in operation an inquiry which, if it is proceeding adversely to the practitioner, will then move the inquiry to the committee and the committee must make a finding one way or the other, and if it makes a finding that the practitioner has engaged in inappropriate practice, we submit that finding itself is a finding which necessarily adversely affects the practitioner’s pre‑existing rights. 

Then there are additional factors to which we refer as well, being the factors arising from section 106U, the determination, because once the finding is made then there is no further process of considering the merits as to whether or not the practitioner has engaged in inappropriate practice.  There must then be a determination.  Whilst it might, at the lowest level, be comparatively benign, being a reprimand, it can include as well most severe penalties.

HAYNE J:   And those are steps taken by the determining officer under subdivision A of division 5?

MR MONOTTI:   Yes, your Honour.  So the finding that the practitioner has engaged in inappropriate practice of itself then means that the practitioner is exposed necessarily to an adverse determination against him.  It may be at first blush thought that if you participate in this scheme and if you are disqualified from it, then that is something which is simply a loss of something which is given to you by this Act.  We submit that even at that level that affects pre‑existing rights because a practitioner, we submit, in this country is entitled to put himself forward to participate in this legislative scheme of provision of health care with an unstained reputation.  If he has such a finding made against him, he is in that regard disadvantaged by loss of relative rights.

The practical way in which this scheme operates throughout the country must, in our submission, be taken into account.  In all practical respects, general practitioners in this country provide services for which their patients receive Medicare benefits.  If their patients are not entitled to receive Medical benefits from their doctor, in respect of services provided by their doctor, then it would be reasonable to expect that the doctor would be out of business and, moreover, and perhaps more importantly, that the doctor would be prevented from providing services for the benefit of the community, perhaps in more remote areas, areas where there is presently under‑servicing ability due to a shortage of medical practitioners.

So this scheme, when it is considered overall, in effect exposes doctors, their professional reputation and all that goes with it, to this process of inquiry which produces, or may produce, a finding which then and there adversely affects the doctor’s pre‑existing rights. 

We submit that the Full Court in both this case and in Tankey approached the case on a wrong foundation.  The line of authority in this Court is one which tends to distinguish between, first, clear cases where there is a decision which affects pre‑existing rights.  The Court in the cases to which we have referred – and I refer particularly to Re Ranger Uranium Mines at 663 point 7, Precision Data Holdings at 188 point 7 and 189 point 3, Brandy v Human Rights and Equal Opportunity Commission at 258 point 4 and Luton v Lessels at 535 paragraph 22, 547 paragraph 76 and 559 paragraph 126, and the earlier cases there referred to, and as well the Tasmanian Breweries Case at 374, 375 and 396 to 397 – we submit that all of these cases show a line of authority well established by this Court that if you have a clear case where there is a decision made affecting its pre‑existing rights, then that is the end of it.  It is an exercise of judicial power. 

But there may be cases where they have all of the trappings of the exercise of judicial power and it may not be quite so clear, and it is appropriate then to look at all of these other questions, whether these trappings exist and, if so, to what extent, and whether, when it is all taken into account, one can find nevertheless that there is an exercise of judicial power.  In this particular case, in our case, the Full Court here has really not looked at all at the question of the pre‑existing rights and has approached the case simply on the second basis.

HAYNE J:   The only right you say that was engaged here is a right to reputation, is that right?

MR MONOTTI:   Yes, it is a right to reputation, and I seek to ‑ ‑ ‑

HAYNE J:   Let me show you the knife in the napkin, where it is going.

MR MONOTTI:   Yes.

HAYNE J:   That if the right to reputation is the right engaged, that right is engaged.  For example, if the police had charged a doctor, another doctor, with imposition on the Commonwealth, that doctor’s reputation would be affected, it seems to me, in the same way as the affectation to which you are referring here.

MR MONOTTI:   Your Honour, not quite the same way.  The charge has yet to be determined.  Here we have a finding.  It is a charge at the outset, we would submit, by the commencement of the process under the referral ‑ and I must say the Full Court rejected that argument too, but there is a finding here, a finding made that the practitioner has engaged in inappropriate practice.

McHUGH J:   That does not necessarily mean it is an exercise of judicial power.  Are you familiar with the public service discipline case?  I think the name of it is White 106 or 107 CLR where it was held that disciplinary proceedings in the public service where public servants are found guilty of

misconduct and fined or otherwise dealt with is not an exercise of judicial power.

MR MONOTTI:   The difference, your Honour, is that here the pre‑existing rights of the medical practitioner are being affected by the finding.  In the public service case – this was concerned with discipline of ‑ disciplinary matters in the course of employment are quite a different thing from making a finding that a private practitioner has engaged in inappropriate practice.

There are other questions, if the constitutional question were to fail, upon which we rely.  Before I move on to that, briefly there is a second level of the argument in relation to the constitutional point, and that is that even if it cannot be said that the distinction is so clear as we would put, nevertheless the Full Court in this case and in Tankey did not pay the regard that we submit it ought to have paid to the pre‑existing rights to which we refer.

As to the other questions, they essentially relate to the process commenced by section 86.  The Full Court has rejected the contention of the applicant that this is in the nature of a charge.  We submit that when this scheme is looked at in its entirety it can be properly implied from it that it is intended by the legislature that there be a process of investigation as to specific allegations against the practitioner.  Necessarily, we submit, therefore, that a referral under section 86 must be sufficiently clear and clearly within power.  It is not good enough to meet this requirement by simply identifying questions based upon statistical figures put forward in the referral, as occurred in this case. 

Many things might be drawn from the fact that the applicant provided a certain number of services and one might have a number of questions to ask about that, but that cannot be sufficient to constitute identification of conduct which is to be the subject of the referral.  I note the time.  If the Court pleases.

McHUGH J:   Yes, thank you, Mr Monotti.  The Court need not hear you, Ms Hampel.

The particular provisions which the applicant alleges are invalid have been repealed.  But, in any event, we are not persuaded that the challenge the applicant seeks to mount to that legislation, or his contention that the steps taken in connection with the allegations of inappropriate practice made against him were flawed, would enjoy sufficient prospects of success in this Court to warrant a grant of special leave to appeal.  Accordingly, special leave to appeal is refused with costs.

The Court will now adjourn to reconstitute.

AT 10.28 AM THE MATTER WAS CONCLUDED