Health Insurance Commission v Peverill
Case
•
[1994] HCA 8
•9 March 1994
No judgment structure available for this case.
HIGH COURT OF AUSTRALIA
MASON CJ, BRENNAN, DEANE, DAWSON, TOOHEY, GAUDRON AND McHUGH JJ
HEALTH INSURANCE COMMISSION v PEVERILL
(1994) 179 CLR 226
9 March 1994
Constitutional Law (Cth)
Constitutional Law (Cth)—Powers of Commonwealth Parliament—Medical benefits—Acquisition on just terms—Entitlement of medical practitioner to fee for assigned benefit—Reduction of fee by retrospective legislation—Whether acquisition of property otherwise than on just terms—Laws imposing taxation to deal only with taxation—Whether imposition of tax on practitioner—The Constitution (63 and 64 Vict. c. 12), s. 51(xxiiiA), (xxxi), 55—Health Insurance Act 1973 (Cth), ss. 20, 20A—Health Insurance (Pathology Services) Amendment Act 1991 (Cth).
Orders
Appeals allowed.
Set aside the orders of the Federal Court. In lieu thereof, declare that the Health Insurance (Pathology Services) Amendment Act 1991 (Cth) is a valid Act of the Commonwealth and is not a law imposing taxation contrary to s.55 of the Constitution, and order that the respondent pay the costs of the Health Insurance Commission in the proceedings in the Federal Court.
Judgment in the proceedings for the Commission.
The respondent to pay the appellant's costs.
Decisions
MASON CJ, DEANE AND GAUDRON JJ The facts and the relevant statutory provisions are set out in the reasons for judgment prepared by Dawson J As his Honour points out, the effect of the Health Insurance (Pathology Services) Amendment Act 1991 (Cth) ("the Amending Act") was to reduce, with retrospective effect, the benefit of $34.50 which was previously payable under item 1345 of the schedule for what was known as the ELISA test. The Amending Act was expressed to operate retrospectively from 1 January 1980 being a date prior to the provision of those medical services by Dr Peverill which are relevant to these proceedings. The Amending Act excluded the ELISA test from item 1345. Instead, the Amending Act inserted items 2294 and 2295 covering ELISA tests for rubella and prescribed a fee for that test of $15.40 which was amended upwards over time culminating for relevant purposes in a fee of $17.20. Hence, the amounts payable to Dr Peverill for ELISA tests which he performed for patients were reduced retrospectively from $34.50 to the fees prescribed in item 2294.
2. The reason for the enactment of the Amending Act with retrospective effect, as stated by the Minister in his second reading
speech, was ((1) Commonwealth, House of Representatives, Parliamentary Debates (Hansard), 11 April 1991, at 2464.):
"to validate certain recommendations made by the Medicare Benefits Advisory Committee relating to the payment of Medicare benefits that were not given legal effect through failure to make necessary ministerial determinations".The Health Insurance Act 1973 (Cth) ("the Principal Act") provided for the establishment of that Committee to advise the Minister about the contents of the table in the schedule of benefits to that Act. A determination by the Minister on the basis of the Committee's recommendation to vary the schedule requires certain steps to be taken to give effect to the recommendation. For a period of time these steps were not taken. Nonetheless, the Commission, the public and many pathologists acted on the basis that the Committee's advices were effective to vary the table of benefits in the schedule. The advent of the ELISA test resulted in considerable time and cost savings so that, acting on the recommendations of the Committee, the Department issued in 1984 a Medicare Benefits Assessment Advice which specified items 2294 and 2295 for the ELISA test. Subsequent advices were issued for these items, generally to increase the amount of the benefit payable. In 1987 the Minister made determinations under s.4A of the Principal Act to give effect to the recommendations but the recommendations were set aside for procedural deficiencies. In 1990, the Federal Court (Burchett J) held that the ELISA tests fell within item 1345 not items 2294 and 2295 which offered a benefit of $4.60 ((2) Peverill v. Meir (1990) 95 ALR 401.).
3. According to the explanatory memorandum, the purpose of the
Amending Act was to:
"validate the Advices so that claims and payments made in accordance with them will become valid and proper, to bring the legislation into line with the general practice in fact adopted at that time".The memorandum continued:
"There will be transitional provisions to ensure that no-one will be required to make any refund of any payment already made as a result of this Bill, to preserve a right to additional payment in respect of anyone who, on the basis that the amendments contained in the Advices are valid, has been underpaid, and to exclude any liability for any additional windfall payments to pathologists for the procedures covered by the Advices in excess of the amounts (sic) specified in the Advices. The amount specified in the Advices for payment were fixed on the recommendation of the (Committee) as proper remuneration for such procedures."According to the financial impact statement contained within the memorandum, the Amending Act would prevent additional expenditure of up to $100 million that could result from additional payments for ELISA tests if the fee recommendations of the Committee were not applied.
4. The principal question, as we see it, is whether the retrospective reduction in the amount of the benefits payable to Dr Peverill (and others similarly placed) by virtue of the patients' assignments of their benefits to him, whereby he accepted the assignments in full payment of the services rendered, invested the relevant provisions of the Amending Act with the character of a law with respect to the "acquisition of property" within the meaning of s.51(xxxi) of the Constitution. In our view, it did not.
5. The assignments, pursuant to s.20A of the Principal Act, by patients to Dr Peverill of their entitlements to medical benefits vested a statutory right in Dr Peverill to receive payment by the appellant Commission from consolidated revenue. But the acquisition of that statutory right by Dr Peverill was not an acquisition of property which fell within s.51(xxxi). That provision is directed, in our view, to requisition, not to voluntary acquisition ((3) John Cook and Co. Pty. Ltd. v. The Commonwealth (1924) 34 CLR 269 at 282; British Medical Association v. The Commonwealth (1949) 79 CLR 201 at 269-271 per Dixon J; Poulton v. The Commonwealth (1953) 89 CLR 540 at 573 per Fullagar J; Trade Practices Commission v. Tooth and Co. Ltd. (1979) 142 CLR 397 at 416-417 per Stephen J; but cf. R. v. Registrar of Titles (Vict.); Ex parte The Commonwealth (1915) 20 CLR 379 at 392 per Isaacs J). The assignments were voluntary; there was no element of legislative compulsion about them.
6. Dr Peverill's argument is that the retrospective substitution of a statutory right to receive payment of a lesser amount in substitution for his earlier entitlement is an "acquisition of property" for the purposes of s.51(xxxi). It may be accepted that the entitlement to payment for each service is a valuable "right" or "interest" of a kind which constitutes "property" for the purposes of that paragraph ((4) Minister of State for the Army v. Dalziel (1944) 68 CLR 261 at 285, 290, 295; Mutual Pools and Staff Pty. Ltd. v. The Commonwealth, unreported, High Court of Australia, 9 March 1994 at 10 per Mason CJ, 23 per Deane and Gaudron JJ). But it does not follow that the legislative substitution of another and less valuable statutory right to receive a payment from consolidated revenue for that previously existing brings about an "acquisition" of the earlier right for the purposes of s.51(xxxi).
7. Dr Peverill's argument is that, in the case of a fixed liquidated obligation of the Commonwealth to which an individual is presently entitled, the cancellation of the obligation is an "acquisition of
property" because the effect of the Amending Act is that the Commonwealth acquires the original entitlement and replaces it with another. A mere extinguishment of a right, it is conceded, will involve no acquisition ((5) Reg. v. Ludeke; Ex parte Australian Building Construction Employees' and Builders Labourers' Federation (1985) 159 CLR 636 at 653.) but it is said that it is otherwise when the Commonwealth derives a financial advantage from the termination and that financial advantage is the precise equivalent in amount of
the deprivation suffered by the owner of the original right.
8. There is no doubt that the derivation by the Commonwealth of a financial advantage in association with the extinguishment of a right to receive a payment from the Commonwealth may constitute an acquisition of property for the purposes of s.51(xxxi) of the Constitution ((6) See Mutual Pools and Staff, unreported, High Court of Australia, 9 March 1994 at 10 per Mason CJ, 23-24 per Deane and
Gaudron JJ). That could even be so in some cases in which extinguishment of the right takes place in the context of some genuine adjustment made in the common interests of competing claims, rights and obligations between another party and the Commonwealth. However, here, the extinguishment of the earlier right to receive payment of a larger amount has been effected not only by way of genuine adjustment of competing claims, rights and obligations in the common interests between parties who stand in a particular relationship ((7) See ibid. at 9 per Mason CJ, 28 per Deane and Gaudron JJ) but also as an element in a regulatory scheme for the provision of welfare benefits from public funds.
9. The Amending Act seeks to correct a defect in the administration of the Principal Act in that, according to the decision of the Federal Court, the payments for the relevant tests carried out by Dr Peverill which it provided for were thought to be excessive. Before the Federal Court gave its decision there was a dispute as to whether item 1345 was the relevant item. Dr Peverill contended that it was. The Commission and many pathologists, acting on the basis of Medicare Assessment Advices, thought otherwise and considered that item 2294 was appropriate. What the Amending Act does in this situation is to bring about the position that was thought by the Commission to have existed before the Federal Court decision. By achieving that result, the Amending Act brought about a genuine legislative adjustment of the competing claims made by patients, pathologists including Dr Peverill,
the Commission and taxpayers. Clearly enough, the underlying perception was that it was in the common interest that these competing interests be adjusted so as to preserve the integrity of the health care system and ensure that the funds allocated to it are deployed to maximum advantage and not wasted in "windfall" payments ((8) See Hanks, "Adjusting Medicare Benefits: Acquisition of Property?", (1992) 14 Sydney Law Review 495 at 500-501.).
10. It is significant that the rights that have been terminated or diminished are statutory entitlements to receive payments from consolidated revenue which were not based on antecedent proprietary rights recognized by the general law. Rights of that kind are rights which, as a general rule, are inherently susceptible of variation. That is particularly so in the case of both the nature and quantum of welfare benefits, such as the provision of medicare benefits in respect of medical services. Whether a particular medicare benefit should be provided and, if so, in what amount, calls for a carefully considered assessment of what services should be covered and what is reasonable remuneration for the service provided, the nature and the amount of the medicare benefit having regard to the community's need for assistance, the capacity of government to pay and the future of health services in Australia. All these factors are susceptible of change so that it is to be expected that the level of benefits will change from time to time. Where such change is effected by a law which operates retrospectively to adjust competing claims or to overcome distortion, anomaly or unintended consequences in the working of the particular scheme, variations in outstanding entitlements to receive payments under the scheme may result. In such a case, what is involved is a variation of a right which is inherently susceptible of variation and the mere fact that a particular variation involves a reduction in entitlement and is retrospective does not convert it into an acquisition of property. More importantly, any incidental diminution in an individual's entitlement to payment in such a case does not suffice to invest the law adjusting entitlements under the relevant statutory scheme with the distinct character of a law with respect to the acquisition of property for the purposes of s.51(xxxi) of the Constitution ((9) See Mutual Pools and Staff, unreported, High Court of Australia, 9 March 1994 at 9 per Mason CJ, 28 per Deane and Gaudron JJ).
11. Dr Peverill's alternative submission is that the Amending Act is a law imposing taxation and that it contravenes s.55 of the Constitution. The short answer to this submission is that the Act does not impose an obligation on Dr Peverill or anyone else to make a payment to the Commonwealth or the Commission. The essence of a tax is that there is an exaction, levy, contribution, duty or charge. A tax commonly takes the form of the imposition of an obligation to pay money. But there can be no basis for holding that a reduction in the value of a chose in action or the substitution of a chose in action for a lesser amount for another chose in action can amount to the imposition of a tax.
12. In the result we are of the view that the Amending Act is valid
and we would allow the appeal.
BRENNAN J This is an appeal from the decision of Burchett J in the Federal Court declaring that the Health Insurance (Pathology Services) Amendment Act 1991 (Cth) ("the Amending Act") is ultra vires and beyond the powers of the Parliament of the Commonwealth. His Honour ordered that certain paragraphs of a pleading by the appellant Commission which relied on the Amending Act be struck out. The appeal to the Full Court of the Federal Court was removed into this Court pursuant to s.40 of the Judiciary Act 1903 (Cth). The Commission's pleading is a defence to a statement of claim filed by the respondent, Dr Peverill. Dr Peverill applied for an order of review of a decision by the Commission not to pay him medicare benefits in respect of professional pathology services rendered by him to patients prior to the Amending Act at rates which were then current. That Act
purported to reduce these rates retrospectively. Dr Peverill contended that he was entitled to payment at the higher, pre-amendment rates. Indeed, he had established the applicability of the higher rates in earlier litigation: Peverill v. Meir ((10) (1990) 95 ALR 401.). The Amending Act was enacted for the purpose of applying, retrospectively, rates of payment which had been applied in practice by the appellant Commission and which the judgment in Peverill v. Meir had held to be not in accordance with the schedules of rates contained in the Health Insurance Act 1973 (Cth) as amended to 1 January 1988 ("the Principal Act").
Dr Peverill's right to claim medicare benefits
2. By s.20(1) of the Principal Act, a medicare benefit is payable by the Commission to a patient (being an "eligible person" ((11) s.10(1).) ) who incurs medical expenses in respect of a professional service. However, instead of claiming for and being paid a medicare benefit, a patient may either obtain a cheque payable to the medical practitioner who renders the professional service (pursuant to s.20(2))
of the Principal Act) or make an agreement with the medical practitioner under which the patient assigns the patient's "right to the payment of the medicare benefit to the practitioner" and "the practitioner accepts the assignment in full payment of the medical expenses incurred" (pursuant to s.20A(1) of the Principal Act). Dr Peverill seeks to enforce the several rights to payment of medicare benefits assigned to him by patients pursuant to s.20A. Section 20A(3) reads as follows:
"Where an assignment under this section takes effect, or an agreement under this section is entered into, with respect to a medicare benefit, the medicare benefit is, subject to section 20B, payable in accordance with the assignment or the agreement, as the case may be."Section 20B(2) provides:
"A claim for a medicare benefit assigned under section 20A shall - (a) be made in accordance with the approved form; andSub-sections (3A) and (3B) of s.20B provide for a discretionary extension of time for the lodging of claims. Sub-section (3) of s.20B
(b) be lodged with the Commission within the period of
6 months, or such longer period as is allowed in
accordance with sub-section (3A), after the rendering of the professional service to which the benefit relates."
provides:
" A claim referred to in sub-section (2) shall not be paid unless the claimant satisfies the Commission that - (c) in the case of an agreement under sub-section 20A(1)(d) in the case of an agreement under sub-section 20A(1)
that was signed by each party in the presence of the
other - the assignor retained in his possession after the agreement was so signed a copy of the agreement; or
that was signed by the assignor in circumstances other than those referred to in paragraph (c) - the assignor retained in his possession after so signing a copy of the document so signed."A medicare benefit is not payable until the claim for it is duly lodged and accepted ((12) It is acceptance for payment (not payment) of a claim for medicare benefits that determines whether the patient contribution is reduced in respect of later claims for medicare
benefits: s.10(3).). On acceptance of a claim, the amount
payable is paid out of the Consolidated Revenue Fund of the Commonwealth which is appropriated for that purpose ((13) s.125.). Section 20(1A) provides:
"Subject to subsection (2), medicare benefit payable under subsection (1) shall be paid in such manner as the General Manager of the Commission determines."
3. A medicare benefit in respect of a pathology service is not payable without a request from a referring practitioner: s.16A. Dr Peverill's statement of claim alleged that he had received the necessary requests, that he had rendered pathology services during the period between 3 December 1984 and 31 July 1989 and that patients had assigned to him for the purposes of s.20A the rights to the payment of medicare benefits otherwise payable to the patients. On that pleading, the right acquired by Dr Peverill was a right to lodge a claim for medicare benefits, to have the claim accepted, and to be paid "the amounts payable by the Commonwealth under Part II" of the Principal Act ((14) ibid.). The right which he acquired was not assignable by him: s.20A(5).
4. The medicare benefits payable to Dr Peverill under the Principal Act were amounts equal to 85% of the fee specified in the General Medical Services Table and the Pathology Services Table in respect of
the particular service rendered by him ((15) See s.10(1) and (2)(b)(i), the definition of "table" in s.3 and the Tables contained in Scheds 1 and 1A to the Act.). In Peverill v. Meir it was held that the services rendered by Dr Peverill fell within items in the Tables which prescribed rates higher than the rates prescribed for the items under which Dr Peverill had in fact been paid.
5. Dr Peverill's statement of claim alleged that the Commission had failed to pay him "such payments as are payable to him pursuant to and by reason of the Act". He sought declarations of entitlement to payment and consequential orders for payment of amounts calculated by reference to the level of medicare benefits payable under the Principal Act at the respective times when he had received the
requests for the provision of pathology services. The Tables
prescribing the rates of medicare benefits were amended retrospectively by ss.4 and 5 of the Amending Act so as to bring the services provided by Dr Peverill within items which prescribed rates corresponding with the amounts which Dr Peverill had in fact been paid. The Commission set up the Amending Act by way of defence, pleading that Dr Peverill had been paid medicare benefits at a rate which, if lower than that to which he was in truth then entitled, had nevertheless become the rate applicable to the services rendered by force of the retrospective effect of the Amending Act. Section 6(1) of the Amending Act reads:
"Where:(a) before the commencement of this section, a person
made a claim for payment of a benefit in respect of a service by reference to an item that, because of the retrospective operation of a provision of section 4 or 5, did not relate to the service; and(b) the person has been paid in respect of the service a
benefit calculated by reference to the fees specified in that item; the person is taken to have been entitled to receive in respect of the service the amount of benefit that was paid."Other sub-sections of s.6 were enacted to ensure that ss.4 and 5 were effective to prescribe retrospectively the amounts to be paid out of Consolidated Revenue as medicare benefits in respect of the items mentioned in the Amending Act.
6. Paragraph 23 of the defence - one of the paragraphs struck out by
the order of Burchett J - read as follows:
"Pursuant to Section 6 of the Health Insurance (Pathology Services) Amendment Act 1991, the amount which the Applicant is to be taken to have been entitled to receive in respect of the pathology services referred to in paragraph 15 of the Amended Statement of Claim is the amount of the benefit in fact paid to him."Burchett J held that the reduction in medicare benefits purportedly effected by the Amending Act in respect of the services rendered by Dr Peverill is invalid for failure to comply with the requirement of just terms in s.51(xxxi) of the Constitution. Dr Peverill seeks to uphold that decision and, by notice of contention, seeks to attack the Amending Act on the additional ground that it inserts into the Principal Act a provision imposing taxation contrary to the provisions of s.55 of the Constitution.
Section 51(xxxi) of the Constitution
7. The constitutional guarantee of just terms contained in s.51(xxxi) is engaged by a law which effects or provides for an acquisition of property. The nature of property for the purposes of s.51(xxxi) has been examined in a number of recent cases to which I referred in Australian Capital Television Pty. Ltd. v. The Commonwealth ((16) (1992) 177 CLR 106 at 165-166.). It is unnecessary again to recite those references; it is sufficient to recall that the characteristics of a proprietary right include its capacity to be assumed by third parties and its having "some degree of permanence or stability" ((17) National Provincial Bank Ltd. v. Ainsworth (1965) AC 1175 at 1247-1248 per Lord Wilberforce.) although "(a)ssignability is not in all circumstances an essential characteristic of a right of property" ((18) Reg. v. Toohey; Ex parte Meneling Station Pty. Ltd. (1982) 158 CLR 327 at 342-343 per Mason J). A practitioner's right to the payment of a medicare benefit assigned by a patient is conferred by statute exclusively upon the assignee practitioner when the conditions prescribed by the Principal Act are satisfied. It is not capable of assumption by third parties. It is a right ultimately to be paid by the Commission a sum of money out of Consolidated Revenue. The Commission is under a corresponding statutory duty. That duty is enforceable by a public law remedy: by mandamus or mandatory order under the Administrative Decisions (Judicial Review) Act 1977 (Cth). I respectfully agree with Burchett J when he said in Peverill v. Meir ((19) (1990) 95 ALR at 421.):
"Where legislation endows a statutory body with the duty of administering a scheme to provide for the making to claimants of payments on behalf of the Commonwealth, in accordance with statutory criteria, the determination whether a particular claim falls within those criteria will generally be a decision of an administrative character, made under an enactment, within the meaning of the Judicial Review Act. There is nothing in the nature of such a determination to exclude it from the scope of judicial review. A decision applying, or purporting to apply, the statutory criteria is a decision 'required to be made' by the legislation in question."If too little is paid, the duty is not properly discharged and a public law remedy is available. That is the nature of the remedy
sought by Dr Peverill in his statement of claim.
8. Once it is appreciated that the right conferred by the Principal Act upon an assignee practitioner is to be discharged by a statutory authority when certain statutory criteria are fulfilled, it is clear that that Act does not create a debt enforceable by action. The Principal Act is a code prescribing the benefits to be paid and the manner of paying them. The only way in which a medicare benefit can be paid to a claimant is by acceptance of a claim made within time followed by a payment by the Commission in an amount prescribed by the statutory Tables out of Consolidated Revenue in such manner as the General Manager of the Commission determines. The money thus to be paid is the only money appropriated for the purpose of paying medical benefits. The principle is stated by Isaacs J in Josephson v. Walker ((20) (1914) 18 CLR 691 at 701.):
"Prima facie, where the same Statute creates a new right and specifies the remedy, that remedy is exclusive. The natural presumption to begin with is that Parliament in creating the novel right attaches to it the particular mode of enforcement as part of its statutory scheme. To that extent the enactment is a code."In the leading case of Pasmore v. Oswaldtwistle Urban Council ((21) (1898) AC 387 at 394-395 cited by Griffith CJ in Josephson v. Walker (1914) 18 CLR at 695-696; cf. Mallinson v. Scottish Australian Investment Co. Ltd. (1920) 28 CLR 66 where an industrial award did not alter the character of the payment to be made under a contract of
employment but only its amount: see at 72.), the Earl of Halsbury LC said:
"The principle that where a specific remedy is given by a statute, it thereby deprives the person who insists upon a remedy of any other form of remedy than that given by the statute, is one which is very familiar and which runs through the law. ... the statute which creates the obligation is the statute to which one must look to see if there is a specified remedy contained in it. There is a specified remedy contained in it, which is an application to the proper Government department."In Federal Commissioner of Taxation v. Official Receiver ((22) (1956) 95 CLR 300.), the nature of a taxpayer's right to a refund of overpaid PA.Y.E. instalments fell for consideration. A majority (Dixon CJ, Williams and Fullagar JJ) denied that that right was an ordinary debt. Fullagar J said ((23) ibid. at 324; see per Williams J at 310-312. Dixon CJ agreed with both Williams J and Fullagar J at 305.):
"we have here nothing really analogous to an ordinary 'debt', but simply a statutory direction to an officer of the Commonwealth to cause a payment to be made out of consolidated revenue to a specified person and an appropriation of consolidated revenue for the purpose of that payment and of no other payment."
9. Similarly, the Principal Act creates no debt recoverable as such in any court of competent jurisdiction. The scheme of that Act is to appropriate Consolidated Revenue to the extent necessary to allow the Commission, after acceptance of claims made to it within the times prescribed, to pay out to claimants the amounts prescribed by the Principal Act. The Principal Act confers on assignee practitioners a
right to be paid medicare benefits subject to the conditions prescribed but it does not create a debt.
10. The right so conferred on assignee practitioners is not property:
not only because the right is not assignable (though that is indicative of the incapacity of a third party to assume the right) but, more fundamentally, because a right to receive a benefit to be paid by a statutory authority in discharge of a statutory duty is not susceptible of any form of repetitive or continuing enjoyment and cannot be exchanged for or converted into any kind of property. On analysis, such a right is susceptible of enjoyment only at the moment when the duty to pay is discharged. It does not have any degree of permanence or stability. That is not a right of a proprietary nature, though the money received when the medicare benefit is paid answers that description ((24) See Federal Commissioner of Taxation v. Official Receiver, ibid. per Fullagar J).
11. Such a right can be contrasted with the right to payment considered in O'Driscoll v. Manchester Insurance Committee ((25) (1915) 3 KB 499.). There, doctors were entitled under their agreements with the Insurance Committee to be credited with specified amounts for their treatment of insured patients and to be paid a share proportioned to their credits out of a fund to which insurance premiums and payments under a statute were contributed. It was held that the amounts to be paid to the doctors under their respective agreements were debts, albeit the precise amounts had not been calculated. In O'Driscoll v. Manchester Insurance Committee the debt to which a doctor was entitled was attached under a garnishee order. A debt can be assigned or is otherwise within the disposition of the creditor. But, under the Principal Act, neither the Commission nor the Commonwealth becomes a debtor to an assignee practitioner although the right conferred on the assignee practitioner is discharged by the payment of money by the Commission on behalf of the Commonwealth.
12. The Principal Act provides for the payment of what is, as between the Commonwealth and the claimant for the medicare benefit, a gratuitous payment. If a statute provided for money in a particular amount to be paid to a person from whom property had been acquired, a diminution of the amount to be paid enacted after the acquisition might well attract the protection of the just terms requirement in s.51(xxxi). Again, if a statute provided for money in a particular amount to be paid to a person who had given good consideration for the payment, the right to payment in that amount might well be regarded as property which could not be diminished by a law enacted after the consideration was given that did not provide just terms. But the Principal Act does not fall into either of those categories. True it is that an assignee practitioner acquires a right to claim a medicare benefit under s.20A only by agreement to give up a right to payment of a fee for services rendered but that agreement is between the assignee practitioner and the patient. Consideration passes from the assignee practitioner to the patient and from the patient to the assignee practitioner. What the assignee practitioner acquires is a statutory right which, as between the practitioner and the Commonwealth (or the Commission), is a gratuity.
13. Perhaps it should be mentioned that s.51(xxxi) is not attracted by the acquisition by an assignee practitioner of a right to claim a medicare benefit: that acquisition is effected simply by the agreement between the patient and the assignee practitioner. In any event, there can be no doubt as to the justice of the terms on which the assignee practitioner acquires that right from the patient: the assignee practitioner foregoes the debt which the patient owes for the services rendered.
14. When the right conferred by the Principal Act is thus analysed, it is clear that the amount which the Commission is commanded to pay to an assignee practitioner whose claim is accepted is the amount prescribed by that Act at the time when the duty to pay is performed.
The Parliament, having power to authorize the Commission by legislation to pay medicare benefits, has power by legislation to vary the Commission's authority. Though it was held in Peverill v. Meir that the duty to pay was not fully performed, an order now to pay the amount prescribed by the Principal Act as amended would be futile, for the Principal Act as amended now prescribes the amount to be paid as the amount which Dr Peverill has in fact received. The question in this case is not whether the Amending Act should be interpreted as having a retrospective operation. Section 6 of the Amending Act makes clear its operation. The question is whether the Amending Act provided for the acquisition of property. The answer to that question is: no.
15. Perhaps an assignee practitioner might think that the distinction between a debt and a statutory right to claim a medicare benefit and to have the claim accepted and paid is artificial. But the distinction reflects an important difference. When, by statute or otherwise, a debt is created, the creditor is by law entitled to payment in the amount of the debt and that entitlement is immune from legislative acquisition under s.51(xxxi) unless just terms are provided. But where a pecuniary benefit payable out of Consolidated Revenue is gratuitously provided by the Parliament to the beneficiary, the amount of the benefit remains until payment within the unfettered control of the Parliament. The distinction between a debt and the right conferred on assignee practitioners by the Principal Act is the difference between something owned and something expected, the fulfilment of the expectation being dependent on the continued will of the Parliament.
Section 55 of the Constitution
16. As the Amending Act imposed no tax but merely altered the amount of benefits payable under the Principal Act, the challenge to the validity of the Amending Act based on s.55 fails.
17. Dr Peverill's claim is susceptible to defeat by the Amending Act.
That legislation is valid and the appeal must be allowed.
DAWSON J Speaking generally, a patient who incurs expenses for medical or pathology services is entitled to receive medicare benefits from the Commonwealth government under the Health Insurance Act 1973 (Cth) ("the Principal Act") ((26) See s.10.). Instead of the patient paying the medical practitioner for a service and then claiming the medical benefit from the government, the patient may enter into an agreement with the practitioner whereby the patient assigns the right to payment of the benefit to the practitioner and the practitioner accepts the assignment in full payment for the service ((27) Health Insurance Act, s.20A(1).). The medicare benefit is payable in accordance with the assignment or agreement ((28) ibid., s.20A(3).). It is this arrangement which allows a medical practitioner to engage in the practice known as bulk-billing.
2. Between 3 December 1984 and 31 July 1989 the respondent, Dr Peverill, performed pathology tests of a kind known as the ELISA test, which is short for enzyme-linked immunosorbent assay. The procedure is one by which specific biological substances can be detected and measured and is used, amongst other things, to test for antibodies to the rubella virus. Dr Peverill's patients assigned to him their rights to medicare benefits for the ELISA tests. The medicare benefits were calculated by reference to fees for pathology services set out in a schedule to the Principal Act ((29) ibid., s.9.). Dr Peverill submitted claims for the ELISA tests under item 1345 of the schedule which specified a fee of $34.50. The claims were made to the appellant, the Health Insurance Commission, which was the appropriate body under the Principal Act ((30) ibid., s.20(1).). It decided that the claims should be met under item 2294 in the schedule which specified a fee of $4.60. In proceedings under the Administrative Decisions (Judicial Review) Act 1977 (Cth) in the Federal Court, Burchett J held that the Health Insurance Commission was in error and that the benefits payable for ELISA tests were covered by item 1345 ((31) See Peverill v. Meir (1990) 95 ALR 401.).
3. Dr Peverill then sued the Health Insurance Commission to recover benefits in respect of ELISA tests which he alleged were due under item 1345. In a separate action, Dr Peverill made claims under item 1345 in respect of various other pathology services which he alleged involved the quantitative estimation of substances.
4. Whilst both actions were on foot, the Health Insurance (Pathology Services) Amendment Act 1991 (Cth) ("the Amending Act") was passed. Some of the amendments made by that Act are expressed to operate retrospectively from 1 January 1980. The Amending Act excluded from item 1345 "quantitative estimation of ... a microbiological or tissue antigen or antibody" ((32) Health Insurance (Pathology Services) Amendment Act 1991, s.4(1)(a).), thus excluding the ELISA test. Instead, the Amending Act inserted two new items, 2294 and 2295, which prescribed benefits for "Enzyme-linked immunosorbent assay (ELISA)". For the tests performed by Dr Peverill between 1 March and 14 June 1984, they provided for a fee of $15.40; for tests performed between 15 June 1984 and 30 June 1985 they provided for a fee of $16.60; and for tests performed between 1 July 1985 and 13 March 1986 they provided for a fee of $17.20 ((33) ibid., s.4(1)(c)-(e).). From 14 March 1986 the schedule was further amended to prescribe fees for "Enzyme-linked immunosorbent assay (ELISA) for a microbiological or tissue antigen or antibody where that antigen or antibody is not specified elsewhere in the Schedule". The fee prescribed remained at $17.20 ((34) ibid., s.4(1)(f).). From 1 August 1986, pathology tests were placed in a separate schedule but the item numbers remained the same as did the scheduled fees ((35) ibid., s.5(1).). From 1 August 1989 the scheme for pathology medicare benefits was significantly altered by the Community Services and Health Legislation Amendment Act 1989 (Cth) and the benefits payable under that legislation are not in issue in this litigation.
5. The effect of the Amending Act was to reduce, with retrospective effect, the benefits which were previously payable for the ELISA tests. The Health Insurance Commission amended its defence in each action to rely upon the retrospective amendments to the Principal Act. Dr Peverill in turn amended his reply in each case to allege that the Amending Act was beyond the power of the Commonwealth Parliament, being a law providing for the acquisition of property other than on just terms contrary to s.51(xxxi) of the Constitution. Dr Peverill also alleged, presumably in the alternative, that the Amending Act purported to insert into the Principal Act provisions imposing taxation contrary to s.55 of the Constitution.
6. The matters came before Burchett J to determine the issues raised by the amendments to the pleadings. He held that the Amending Act was beyond power because it was a law with respect to the acquisition of property which did not provide just terms. He did not find it necessary to deal with the issue raised under s.55 of the Constitution ((36) Peverill v. Health Insurance Commission (1991) 104 ALR 449.). He ordered the amendments to the defence in each case to be struck out. An appeal to the Full Court of the Federal Court was launched by the Health Insurance Commission against those orders and Dr Peverill delivered a notice of contention that the Amending Act was a law imposing taxation within the meaning of s.55 of the Constitution. The appeal was removed into this Court under s.40(1) of the Judiciary Act 1903 (Cth).
7. The Commonwealth Attorney-General intervened before us to support the validity of the Amending Act and, in doing so, relied upon decisions in the United States dealing with the prohibition contained in the Fifth Amendment against the taking of private property for public use without just compensation. That prohibition is extended to the States by the Fourteenth Amendment. There is a significant difference between that provision, which prohibits the taking of property without just compensation, and s.51(xxxi), which confers the power to acquire property compulsorily upon just terms. Moreover, the prohibition in the United States is necessarily to be seen in the context of due process which has no counterpart in the Australian Constitution. Caution must, therefore, be exercised in the use of American authorities in relation to s.51(xxxi). The Attorney-General submitted that the United States decisions establish first, that gratuitous benefits such as welfare benefits do not constitute property for the purposes of the prohibition against taking without just compensation, and secondly, that laws designed to cure previous defects in administration do not offend against the prohibition. He sought to apply those propositions in the context of s.51(xxxi).
8. However, I find no need to resort to American authority upon the subject. It is clearly established in this country that before s.51(xxxi) has any application there must be an acquisition of
property. There is, as I have said, an obvious and important distinction between a taking and an acquisition. As Mason J observed in The Commonwealth v. Tasmania (The Tasmanian Dam Case) ((37) (1983) 158 CLR 1 at 145; see also at 181-182 per Murphy J, 247 per Brennan J, 283 per Deane J; Trade Practices Commission v. Tooth and Co. Ltd. (1979) 142 CLR 397 at 408; Reg. v. Ludeke; Ex parte Australian Building Construction Employees' and Builders Labourers' Federation (1985) 159 CLR 636 at 653; Australian Capital Television Pty. Ltd. v. The Commonwealth (1992) 177 CLR 106 at 166, 198-199.):
"The emphasis in s.51(xxxi) is not on a 'taking' of private property but on the acquisition of property for purposes of the Commonwealth. To bring the constitutional provision into play it is not enough that legislation adversely affects or terminates a pre-existing right that an owner enjoys in relation to his property; there must be an acquisition whereby the Commonwealth or another acquires an interest in property, however slight or insubstantial it may be."In my view Dr Peverill has failed to establish that the Amending Act is a law with respect to the acquisition of property for any purpose
in respect of which the Parliament has power to make laws.
9. As I understand it, Dr Peverill first put his case upon the basis that when a patient assigned to him the patient's right to a medicare benefit, he acquired a chose in action. So much is, I think, clear. Indeed, s.20A(3) of the Principal Act provides to that effect when it says that the medicare benefit is payable in accordance with the assignment. And there can be no doubt that a chose in action may constitute property for the purposes of s.51(xxxi) ((38) Minister of State for the Army v. Dalziel (1944) 68 CLR 261 at 290; Bank of N.S.W. v. The Commonwealth ("the Bank Nationalization Case") (1948) 76 CLR 1
at 212-214, 267, 299, 349.). Moreover, it is now settled that s.51(xxxi) extends to the acquisition of property by persons other than the Commonwealth ((39) Jenkins v. The Commonwealth (1947) 74 CLR 400 at 406; McClintock v. The Commonwealth (1947) 75 CLR 1 at 23, 36; P J Magennis Pty. Ltd. v. The Commonwealth (1949) 80 CLR 382 at 401-402, 411, 423; Trade Practices Commission v. Tooth and Co. Ltd. (1979) 142 CLR at 427, 451-452; Australian Tape Manufacturers Association Ltd. v. The Commonwealth (1993) 176 CLR 480 at 510-511, 526.). Further, it may be assumed for the purposes of the argument (although it is clearly not beyond argument) that a law reducing the rate of a medicare benefit, the right to which constitutes the relevant property, is a law with respect to the acquisition of that property even though the acquisition was completed before the law took effect.
10. However, a medical practitioner who accepts the assignment of a medicare benefit in full payment for his or her professional services does so entirely voluntarily. It is difficult, therefore, to see how any question of just terms arises. Indeed, the better view now appears to be that s.51(xxxi) is confined to the compulsory acquisition of property. That view was taken by Stephen J in Trade Practices Commission v. Tooth and Co. Ltd. where he said ((40) (1979) 142 CLR at 416-417; but cf. R. v. Registrar of Titles (Vict.) (1915) 20 CLR 379 at 392; The Commonwealth v. New South Wales (1923) 33 CLR 1 at 55; British Medical Association v. The Commonwealth (1949) 79 CLR 201 at 270.):
"The reference to 'just terms' throws light upon the particular meaning of 'acquisition' in the placitum. Despite early dicta to the contrary it is now well established that pl.(xxxi) contemplates acquisition by 'the method of requisition', not by 'the method of agreement' ((41) John Cooke and Co. Pty. Ltd. v. The Commonwealth (1924) 34 CLR 269 at 282 and see Poulton v. The Commonwealth (1953) 89 CLR 540 at 573 per Fullagar J). Thus in British Medical Association v. The Commonwealth ((42) (1949) 79 CLR 201 at 271.) Dixon J contrasted acquisition under pl.(xxxi) with the case of a voluntary sale, speaking of the former as involving the taking of property from him 'against his will without just compensation'."
11. Be that as it may, the chose in action in the form of a medicare benefit was not, in my view, acquired for any purpose in respect of which the Commonwealth has power to make laws. Dr Peverill acquired medicare benefits by assignment from his patients for his own purpose and the acquisition therefore falls outside s.51(xxxi). As Brennan J said in Re Tooth and Co. Ltd. (No.2) ((43) (1978) 34 FLR 112 at 146-147.):
"An acquisition purportedly authorized by a law with respect to a subject matter of federal power is not necessarily an acquisition for the purpose of that subject matter. If the property the subject of the acquisition is not to be used or applied 'in or towards carrying out or furthering a purpose comprised in some other legislative power' (i.e., a power other than pl.(xxxi)), the acquisition is not for a purpose to which pl.(xxxi) refers. The purpose of an acquisition is determined by the statute's intention as to the use or application of the property in the hands of the person acquiring the property. Where a law purports to authorize an acquisition of property by a private person, and there is no question of applying the property when acquired either for the use and service of the Crown, or for any other purpose in respect of which the Parliament has power to make laws, the law finds no constitutional support in pl.(xxxi). It does not fall outside pl.(xxxi) for want of just terms, but for want of purpose."
12. That means that the Amending Act must be supported by a head of power other than s.51(xxxi). It is to be found in s.51(xxiiiA) which gives to the Commonwealth Parliament the power to make laws with respect to the "provision of ... pharmaceutical, sickness and hospital benefits, medical and dental services". As Brennan J pointed out in Re Tooth and Co. Ltd. (No.2) ((44) ibid. at 147-148.), whilst every compulsory acquisition of property by the Commonwealth (other than "forfeitures, penalties, taxes or the like") must find support in s.51(xxxi) and not in any other head of power, the same is not necessarily so in the case of a compulsory acquisition of property by a third party under Commonwealth legislation. Brennan J gave the examples of a law with respect to marriage and divorce providing for the compulsory transfer of property between spouses and a law under the defence power restricting a landlord's right to recover possession of premises upon the expiration of a lease. This case is, in my view, another example. The acquisition of the right to medicare benefits by Dr Peverill was not an acquisition for any purpose of the Commonwealth and, even if it were otherwise within the terms of s.51(xxxi), it would fall outside it for that reason.
13. Alternatively, Dr Peverill submitted that the Amending Act had the effect that the Commonwealth acquired the chose in action assigned by a patient to Dr Peverill and substituted another of a lesser value. In my view that argument cannot be sustained.
14. For the reasons Toohey J and I gave in Mutual Pools Pty. Ltd. v. The Commonwealth ((45) Unreported, 9 March 1994.), the reduction or extinction of a liability, even though it may confer a financial or monetary advantage upon the person whose liability is reduced or extinguished, does not result in the acquisition of property by that person. That is not because no money passes hands. It is because nothing which answers the description of property is acquired. True it is that in that situation no coins or notes are involved, but the character of money is not dependent upon its physical qualities. They may not be present at all in a transaction involving the transfer of money and are of no intrinsic worth. Money is merely a medium of exchange; it is not an object of exchange. It represents value or purchasing power, but does not constitute property within the meaning of s.51(xxxi) of the Constitution. The enactment of the Amending Act did not result in the acquisition by the Commonwealth of the chose in action assigned to Dr Peverill by his patient. The value of the right which he acquired in the form of the chose in action was reduced, but the Commonwealth did not acquire any property.
15. Nor, in my view, can it be said that the Amending Act is a law imposing taxation. That argument appears to assume that any tax is imposed upon Dr Peverill rather than the patient. That assumption is not, I think, crucial to the argument.
16. The familiar definition of a tax is that it is "a compulsory
exaction of money by a public authority for public purposes, enforceable by law, and ... not a payment for services rendered" ((46) See Lower Mainland Dairy Products Sales Adjustment Committee v. Crystal Dairy Ltd. (1933) AC 168 at 175-176; Matthews v. Chicory Marketing Board (Vict.) (1938) 60 CLR 263 at 276; Browns Transport Pty. Ltd. v. Kropp (1958) 100 CLR 117 at 129.). That definition is, of course, not exhaustive even when there are added to it the more recent requirements that a tax not be by way of penalty and not be arbitrary ((47) See Air Caledonie International v. The Commonwealth (1988) 165 CLR 462 at 467.). Whilst it may be possible in some circumstances for a tax to take a form other than the exaction of money ((48) ibid.), in the context of s.51 of the Constitution, which requires a line to be drawn between the taxation power (par.(ii)) and the acquisition power (par.(xxxi)), those circumstances, if they exist at all, must be limited. Nevertheless, a tax must, I think, be by way of exaction and where the exaction is of money, as it invariably is, it takes the form of the imposition of an obligation upon the taxpayer which is met by the payment of money. Money raised by taxation constitutes part of the revenue of the Commonwealth and, under s.81 of the Constitution, forms part of the Consolidated Revenue Fund to be appropriated for the purposes of the Commonwealth in the manner imposed by the Constitution. Under s.83, no money shall be drawn from the Treasury of the Commonwealth except under appropriation made by law ((49) See generally Northern Suburbs General Cemetery Reserve Trust v. The Commonwealth (1993) 176 CLR 555.).
17. In Australian Tape Manufacturers Association Ltd. v. The Commonwealth Toohey J and I remarked ((50) (1993) 176 CLR at 522.):
"Those characteristics of a tax which require it to be levied by a public authority for public purposes are important in that they reflect the general conception of a tax as a means of raising revenue for government (even if the aim of the tax is also to encourage or discourage behaviour of a particular kind). In consequence, the fact that an exaction is to be paid into a consolidated revenue fund is sufficient indication that the exaction is for a public purpose, hence a tax ((51) See R. v. Barger (1908) 6 CLR 41 at 82 per Isaacs J; Moore v. The Commonwealth (1951) 82 CLR 547 at 561 per Latham CJ; Parton v. Milk Board (Vict.) (1949) 80 CLR 229 at 258 per Dixon J) . By inference, the strongest indication that an exaction does not constitute a tax is that the moneys raised do not form part of such a fund."
18. In the present case there is no exaction: Dr Peverill is not obliged to pay any amount for the purpose of raising revenue. The Amending Act reduces the liability of the Commonwealth to pay medicare benefits, but it does not, in my view, impose a tax. A tax may variously be described as an exaction, levy, contribution, duty, charge or even an extortion ((52) See Attorney-General (N.S.W.) v. Homebush Flour Mills Ltd. (1937) 56 CLR 390 at 408.), but whatever the description, taxation for the purposes of s.51(ii) involves an obligation imposed by law to pay money which, when paid, will comprise government revenue and form part of the Consolidated Revenue Fund ((53) Australian Tape Manufacturers Association Ltd. v. The Commonwealth (1993) 176 CLR at 506.). Of course, what amounts to an exaction etc. is a matter of substance rather than form. As Latham CJ observed in Attorney-General (N.S.W.) v. Homebush Flour Mills Ltd. ((54) (1937) 56 CLR at 400.):
"'Voluntary loans' and 'gracious offerings' and 'forced benevolences' are not unknown in our history. When such transactions amount to the exaction of money in obedience to what is really a compulsive demand, the money paid is paid as a tax".However, in my view, a person does not without more become a taxpayer merely by reason of the reduction or extinction of a liability which
the government owes to him or her.
19. For these reasons, I would hold the Health Insurance (Pathology Services) Amendment Act 1991 to be a valid exercise of legislative
power, and allow the appeal.
TOOHEY J The facts relevant to this appeal appear in other
judgments. I shall not repeat them unnecessarily.
2. Section 20A of the Health Insurance Act 1973 (Cth) ("the Principal Act") permits a patient to assign the right to payment of a medicare benefit to the medical practitioner on the basis that the practitioner accepts the assignment in full payment of the medical expenses incurred. Sub-section (3) reads:
"Where an assignment under this section takes effect, ... the medicare benefit is ... payable in accordance with the assignment".
3. It is apparent that upon an assignment in accordance with s.20A, the respondent, Dr Peverill, acquired a chose in action in respect of the medical benefit payable by the appellant, the Health Insurance Commission ("the Commission").
4. The Health Insurance (Pathology Services) Amendment Act 1991 (Cth) ("the Amending Act") is attacked in so far as that legislation reduced the medicare benefits payable in respect of ELISA testing in cases where patients had already assigned the right to payment of the benefit to Dr Peverill but where the Commission had not yet made payment.
5. Dr Peverill's challenge to the validity of the Amending Act to the extent that it deprives him retrospectively of payment for ELISA tests in accordance with the medicare benefit applicable at the time of assignment is based primarily on s.51(xxxi) of the Constitution which empowers the Commonwealth to make laws with respect to:
"The acquisition of property on just terms from any State or person for any purpose in respect of which the Parliament has power to make laws".
6. The meaning and scope of s.51(xxxi) are discussed, not only in the judgments in this matter but also in the judgments in Mutual Pools and Staff Pty. Ltd. v. The Commonwealth ((55) Unreported, High Court of Australia, 9 March 1994.), Georgiadis v. Australian and Overseas Telecommunications Corporation ((56) Unreported, High Court of Australia, 9 March 1994.) and Re Director of Public Prosecutions; Ex parte Lawler ((57) Unreported, High Court of Australia, 9 March 1994.). I do not propose to go over the same ground again. At issue is whether s.51(xxxi) has any application in the present case.
7. The Parliament's power to make the Principal Act derives from s.51(xxiiiA) of the Constitution which includes the provision of "sickness and hospital benefits, medical and dental services". The power to enact the Amending Act derives from the same paragraph, read if necessary with the incidental power in par.(xxxix). The fact that the legislation has some retrospective operation does not detract from that power ((58) Polyukhovich v. The Commonwealth (1991) 172 CLR 501.).
8. Section 51(xxxi), it has been said, serves a double purpose ((59) Bank of N.S.W. v. The Commonwealth ("the Bank Nationalization Case") (1948) 76 CLR 1 at 349 per Dixon J):
"It provides the Commonwealth Parliament with a legislative power of acquiring property: at the same time as a condition upon the exercise of the power it provides the individual or the State, affected with a protection against governmental interferences with his proprietary rights without just recompense."It follows that if a law of the Parliament constitutes an acquisition of property, par.(xxxi) will invalidate the law unless it provides
just terms.
9. Inevitably the focus of inquiry has been whether there has been an acquisition of property. The purpose of the paragraph was seen in this way by Dixon J in Grace Brothers Pty. Ltd. v. The Commonwealth ((60) (1946) 72 CLR 269 at 290-291.):
"The power conferred by s.51(xxxi) is express, and it was introduced as a specific power, not, like the Fifth Amendment, for the purpose of protecting the subject or citizen, but primarily to make certain that the Commonwealth possessed a power compulsorily to acquire property, particularly from the States. The condition 'on just terms' was included to prevent arbitrary exercises of the power at the expense of a State or the subject."
10. The passage does serve to demonstrate the need to identify an acquisition of property and to avoid erecting par.(xxxi) into a wider
guarantee than the Constitution warrants. The matter of identification lies very much at the heart of Georgiadis v. Australian and Overseas Telecommunications Corporation as it does in the present case. But the search for identification of acquired property should not obscure the fact that a subject of legislative competence may be "altogether outside the scope of s.51(xxxi)" ((61) Attorney-General (Cth) v. Schmidt (1961) 105 CLR 361 at 373 per Dixon CJ See also Burton v. Honan (1952) 86 CLR 169 at 180-181 per Dixon CJ and Re
Director of Public Prosecutions; Ex parte Lawler.). In Attorney-General (Cth) v. Schmidt ((62) (1961) 105 CLR 361.) the Court upheld, under the defence power, sections of the Trading with the Enemy Act 1939 (Cth) ((63) Sections 13C and 13D which were inserted by the
Trading with the Enemy Act 1952 (Cth).) even though they provided for the proceeds of the windings-up of certain
businesses to be paid to the Controller of Enemy Property in circumstances where property was not to be returned to German ownership or control. The imposition of taxation and the operation of forfeiture provisions in connection with criminal proceedings provide parallels ((64) Trade Practices Commission v. Tooth and Co. Ltd. (1979) 142 CLR 397 at 408 per Gibbs J).
11. In the present case, the Amending Act excluded the ELISA test from the relevant item of medical benefit and made it the subject of other items so as to provide an amount of medical benefit varying according to when the test had been conducted. This had the effect of providing a lower level of medical benefit than had been the case when Dr Peverill took certain assignments from his patients.
12. Whether s.51(xxxi) is applicable may be tested by looking at the position of the patient who assigned his or her medical benefit to Dr Peverill. Had there been no assignment when the Amending Act operated to reduce the benefit payable for an ELISA test, could it be said that there had been an acquisition of property from the patient?
13. The answer to that question is, in my view, no. By the Principal Act the Parliament conferred on patients a range of medical benefits. It did so as part of a complex regime of health insurance. Section 20 is part of that regime. Sub-section (1) provides that a medicare benefit "is payable by the Commission on behalf of the Commonwealth to the person who incurs the medical expenses in respect of that service". But the Parliament may alter, whether by way of increase or decrease, prospectively or retrospectively, the benefits it pays as part of that scheme. The language of Latham CJ in Allpike v. The Commonwealth ((65) (1948) 77 CLR 62 at 69.) is apposite:
"In the case of the Commonwealth, therefore, such right as there is is the creation of Commonwealth statute or Commonwealth regulation. That right may be altered by the authority which created it."
14. Relevantly, the position did not alter because there had been an assignment of medical benefit to Dr Peverill. He took the benefit of the assignment, as he was entitled to do. However, the Parliament remained competent to alter the regime of health insurance and to provide a recoupment to Dr Peverill in accordance with the regime as formulated from time to time, even if the consequence was a reduction in the Commission's liability to make payments. That is not to say that Dr Peverill's entitlement to be paid the medicare benefit is not property. It constitutes a chose in action and, for reasons that appear in my judgment in Georgiadis, answers the description of property. But the Amending Act effects no acquisition of property, because it is impossible to identify any property or interest in property acquired by the Commission. Indeed, the operation of the Amending Act lies outside the scope of s.51(xxxi) but within the scope of s.51(xxiiiA). It is in truth a law regulating benefits for services of the kind identified in par.(xxiiiA). It is not a law relating to the acquisition of property for a purpose in respect of which the Parliament has power to make laws.
15. As to the appellant's argument that the Amending Act is a law imposing taxation, I have read what Dawson J has said in that regard. I agree with his Honour's conclusion that the Amending Act does not impose a tax and with his reasons for reaching that conclusion. I have nothing to add.
I would allow the appeal.
McHUGH J Pursuant to the provisions of the Judiciary Act 1903 (Cth), the Court has removed into this Court an appeal pending in the Full Court of the Federal Court against a judgment of Burchett J given in that Court. His Honour held that the Health Insurance (Pathology Services) Amendment Act 1991 (Cth) ("the Amending Act") is beyond the powers of the Parliament of the Commonwealth in so far as it purported to reduce the amount of payments owing by the Health Insurance Commission to Dr Richard Edwin Peverill. The principal question that arises in the appeal is whether the Amending Act provides for the acquisition of property of Dr Peverill on terms that are not just, contrary to the provisions of s.51(xxxi) of the Constitution. If that question is answered in the negative, a further question arises as to whether the Amending Act is invalid because it would result in a breach of s.55 of the Constitution.
The factual background
2. In 1990, Dr Peverill commenced an action against the Health Insurance Commission in the Federal Court. He sued to recover moneys owing by way of an assignment of medicare benefits in respect of pathology services, rendered to patients between 3 December 1984 and 31 July 1989. By virtue of s.20 of the Health Insurance Act 1973 (Cth) ("the Principal Act"), a "medicare benefit in respect of a (pathology) service is payable by the Commission on behalf of the Commonwealth to the person who incurs the medical expenses in respect of that service". However, s.20A provides that a practitioner may accept an assignment of a medicare benefit "in full payment of the medical expenses incurred in respect of the professional service by the (patient)". If the practitioner does so, that person has a right to payment from the Commission of an amount that is generally 85 per cent of the appropriate fee specified in the schedule to the Principal Act. Dr Peverill claims that each of the medicare benefits payable to his patients has been assigned to him "within the meaning of and for the purposes of Section 20A of the Act". He also claims that the pathology services which he rendered fell within item 1345 of Schedule 1A to the Principal Act or within schedule provisions that Schedule 1A has replaced. In its amended statement of defence, the Commission alleged that the Amending Act excluded the services allegedly rendered by Dr Peverill from item 1345. In his reply, Dr Peverill alleged that the Amending Act was invalid because it contravened s.51(xxxi) or, alternatively, s.55 of the Constitution.
3. An order was made by consent that the constitutional issues raised in the amended statement of defence and the amended reply should be decided separately. On the trial of the separate issue, Burchett J held that, upon the basis of the facts alleged in the statement of claim, the Amending Act was invalid in so far as it purported to abolish Dr Peverill's assigned right to the payment of medicare benefits payable under item 1345. His Honour held that the Amending Act purported to acquire property of Dr Peverill without according
compensation on just terms, contrary to s.51(xxxi) of the Constitution. His Honour found it unnecessary to decide whether the
Amending Act was also in breach of s.55 of the Constitution.
4. The relevant history of the matter began on 9 May 1984. On that day, the Department of Health, acting on a recommendation of a statutory body ("the Medical Benefits Advisory Committee"), purported to create a new item in the schedule of fees to cover pathology services of the kind that Dr Peverill has rendered. Initially, the fee was set at $15.40. By November 1987, it had been increased to $18.40. In 1988, the Department received legal advice, which it
accepted, that the new item had been inserted without lawful authority. Subsequently, the question as to what amount was payable for pathology services of the kind rendered by Dr Peverill came before the Federal Court for determination. Dr Peverill asserted that the services fell within item 1345 for which the fee was $34.50. The Federal Court upheld this contention ((66) Peverill v. Meir (1990) 95 ALR 401.). Dr Peverill then commenced the present action in the Federal Court in 1990 claiming payment under item 1345 for a large number of pathology tests performed between December 1984 and July 1989.
5. On 11 April 1991, the Bill, which became the Amending Act, was introduced into the House of Representatives. The Minister for Community Services and Health said that the purpose of the Bill was to validate the advices of the Medical Benefits Advisory Committee "so that claims and payments made in accordance with them will become valid and proper and to bring the legislation into line with the general practice in fact adopted at that time". According to the second reading speech of the Minister, if Dr Peverill's action was successful, the liability of the Commonwealth in respect of such claims would be in the order of $100 million. The Bill received the royal assent on 24 April 1991.
6. The Amending Act retrospectively amends Schedule 1A and its predecessor, Schedule 1, to exclude from item 1345 pathology tests of the kind allegedly carried out by Dr Peverill. Those tests are now covered by new items 2294(3), 2294(4), 2295(3) and 2295(4) which essentially give effect to the recommendations of the Medical Benefits Advisory Committee. If the services allegedly rendered by Dr Peverill fell within item 1345, as he claims, the effect of the Amending Act, if valid, is to reduce the moneys owing by the Commonwealth to Dr Peverill by more than 40 per cent.
Section 51(xxxi)
7. Section 51(xxxi) of the Constitution provides that, subject to the Constitution, the Commonwealth shall have power to make laws with respect to:
"The acquisition of property on just terms from any State or person for any purpose in respect of which the Parliament has power to make laws".
8. So far as possible the other legislative powers conferred by s.51 of the Constitution are to be read subject to the provisions of s.51(xxxi) ((67) Johnston Fear and Kingham and The Offset Printing Co. Pty. Ltd. v. The Commonwealth (1943) 67 CLR 314 at 318; Bank of New South Wales v. The Commonwealth (1948) 76 CLR 1 at 349-350; W.H. Blakeley and Co. Pty. Ltd. v. The Commonwealth of Australia (1953)
87 CLR 501 at 520; Attorney-General (Cth) v. Schmidt (1961) 105 CLR 361 at 370-372.). Section 51(xxxi) is, therefore, both a source of power and a guarantee that the property of the individual will not be taken for public purposes except upon just terms.
9. However, not all acquisitions of property by the Commonwealth fall within the terms of s.51(xxxi). In Mutual Pools and Staff Pty. Ltd. v. The Commonwealth ((68) Unreported, 9 March 1994.), I pointed to various cases of acquisition of property by the Commonwealth where in the words of Dixon CJ the "whole subject is altogether outside the scope of s.51(xxxi)" ((69) Schmidt (1961) 105 CLR at 373.). Such cases include taxation, bankruptcy, forfeiture of property for breach of customs or criminal laws and the seizure of the property of enemy aliens. They are outside the scope of s.51(xxxi) because they are cases where the taking of property by the Commonwealth is either an inevitable consequence of a power conferred by s.51 or is a reasonably proportional consequence of a breach of a law passed under such a power.
10. The Commonwealth asserts that the powers conferred by s.51(xxiii) and (xxiiiA) of the Constitution to make laws with respect to various classes of welfare benefits include the power to increase, reduce, abolish or otherwise amend the amount of such benefits at any time without infringing the guarantee embodied in s.51(xxxi). Moreover,
the Commonwealth contended that it makes no difference that legislation enacted under those paragraphs is expressed to confer a right or entitlement to a benefit. In the present case, s.51(xxiiiA) of the Constitution was the source of the power to enact the relevant provisions of the Principal Act. That paragraph of the Constitution empowers the Commonwealth to make laws with respect to "(t)he provision of ... sickness and hospital benefits, medical and dental services". The Commonwealth contends that a statutory benefit conferred by that paragraph may be altered or revoked without infringing the provisions of s.51(xxxi).
11. What Dr Peverill acquired in the present case was an assignment of each patient's s.20 medicare benefit. Although his right or entitlement was conferred by s.20A, that right or entitlement on one view was no greater than the right or entitlement conferred on the patient by s.20. The other view is that, because Dr Peverill accepted the assignment in full payment for his services, his entitlement to payment was a new and independent entitlement which superseded the patient's entitlement. It is necessary, therefore, to examine the s.20 and the s.20A entitlements separately.
The s.20 entitlement
12. In my opinion, no acquisition of property for the purposes of s.51(xxxi) occurs when an enactment of the Parliament amends or repeals a gratuitous statutory entitlement conferred by the Parliament. Nor is the case different when the beneficiary of the entitlement has fulfilled the conditions which govern the entitlement. It follows that the Parliament may withdraw the statutory entitlement, conferred by s.20 of the Principal Act, to the payment of a "medicare benefit in respect of a professional service" even after that person has incurred the expense of that service.
13. As the Solicitor-General for the Commonwealth pointed out, decisions of this Court give little assistance on the question whether laws reducing or abolishing gratuitous statutory benefits payable by the Commonwealth infringe the guarantee embodied in s.51(xxxi). In Allpike v. The Commonwealth ((70) (1948) 77 CLR 62.), however, the Court held that no breach of s.51(xxxi) occurred where, pursuant to the authority of a Commonwealth legislative provision, a Commonwealth officer directed that the undrawn and deferred pay of a deceased soldier and the interest thereon should be divided in a way which conflicted with the deceased's will. Dixon J said ((71) ibid. at 76-77.):
"The provision applies prospectively from the passing of the Act in 1942 to persons who die after the date of the statute. So far as they are concerned, the provision deals with the devolution on death of money which will become payable under statute. Whether there will or will not be a right vested in them to the pay or deferred pay or allowances while they are serving as soldiers, the provision attaches to their title to the money a condition affecting its devolution on death. To do this is within the defence power. I think there is no basis for the argument that s.51(xxxi) of the Constitution must be invoked in order to support a legislative direction of the course of devolution on death of property when such a thing falls within the purposes of the Commonwealth. Such a direction involves no acquisition of property and raises no question of just terms. The whole matter of the disposition on death of the pay, deferred pay and allowances of a soldier appears to me to be within Federal legislative power."
14. Allpike is authority for the proposition that, without infringing s.51(xxxi), the Commonwealth can regulate a federal statutory entitlement to a payment even after the beneficiary of the payment has fulfilled the conditions entitling that person to the payment provided that the entitlement was made subject to the condition that it could be regulated. It need hardly be said that such a condition may be imposed expressly or by implication or by inference from all the circumstances of the enactment. Moreover, logically no distinction can be drawn between an entitlement subject to a condition of regulation and an entitlement subject to a condition of reduction or revocation.
15. The decision in Allpike is in accordance with a long line of authority in the United States which holds that statutory gratuities are not property for the purpose of the Takings Clause in the US Constitution ((72) The Fifth Amendment provides: "(N)or shall private property be taken for public use, without just compensation".) and can be altered or revoked before payment. The governing principle was stated by Pitney J in New York Central RR Co. v. White ((73) (1917) 243 US 188 at 198.):
"No person has a vested interest in any rule of law entitling him to insist that it shall remain unchanged for his benefit."
16. In accordance with this principle, the United States Supreme Court and federal courts have frequently and consistently held for more than a century that welfare and pension rights are not vested property rights and that Congress may cancel them at any time ((74) United States v. Teller (1882) 107 US 64 at 68; Lynch v. United States (1934) 292 US 571 at 576-577; US Railroad Retirement Board v. Fritz (1980) 449 US 166 at 174; Bowen v. Gilliard (1987) 483 US 587 at 604, 607;
Hoffman v. City of Warwick (1990) 909 F 2d 608 at 616-617.). Eighteen years before the enactment of the Commonwealth of Australia Constitution Act 1900, the Supreme Court declared ((75) Teller (1882) 107 US at 68.):
"No pensioner has a vested legal right to his pension. Pensions are the bounties of the government, which Congress has the right to give, withhold, distribute, or recall, at its discretion."
17. Just over fifty years later, Brandeis J in delivering the judgment of the Supreme Court in Lynch v. United States ((76) (1934) 292 US at 577.) could say:
"Pensions, compensation allowances and privileges are gratuities. They involve no agreement of parties; and the grant of them creates no vested right. The benefits conferred by gratuities may be redistributed or withdrawn at any time in the discretion of Congress."
18. This principle is seen as the necessary consequence of Congress' "plenary power to define the scope and the duration of the entitlement to ... benefits, and to increase, to decrease, or to terminate those benefits based on its appraisal of the relative importance of the
recipients' needs and the resources available to fund the program" ((77) Atkins v. Parker (1985) 472 US 115 at 129.). Consequently, non-contractual entitlements which the recipient has not yet received are not property for the purpose of the Takings Clause even though the recipient has a legitimate expectation that the entitlements will be received ((78) Hoffman (1990) 909 F 2d at 616.) .
19. The entitlement under s.20 of the Principal Act must be taken to be conferred subject to repeal or alteration - including retrospective repeal or alteration - at the discretion of the Parliament. The plenary power conferred by s.51(xxiiiA) extends to altering or repealing the entitlement to a gratuitous benefit conferred under that paragraph even where a person has met the conditions giving rise to the entitlement. It could not be maintained, for example, that a person who had turned 65 had a vested right, protected by s.51(xxxi), to receive an age pension or that, consistently with the guarantee, the Parliament could not change the conditions upon which the pension was payable. Similarly, the right of payment under s.20 to a person who has incurred a medical expense is subject to the condition that Parliament may alter, reduce or revoke the right ((79) Allpike (1948) 77 CLR 62.). Nothing in s.20 specifically, or in the Principal Act generally, indicates a legislative intention by the Parliament that it will not alter, reduce or abolish s.20 entitlements, prospectively or retrospectively. In the absence of any legislative expression to the contrary, the entitlement conferred by s.20 - like any other statutory entitlement - must be taken to be subject to the condition that it may be altered, reduced or revoked at any time. Indeed, s.4 specifically declares that the regulations may provide that the Principal Act is to have effect as if the general medical services table were varied by inserting or omitting an item or rule of interpretation in or from the table or by substituting another amount for an amount set out in an item in the table.
20. It is arguable, as the Solicitor-General for the Commonwealth contended, that the abolition or alteration of a s.20 benefit involves no retrospective exercise of power even when the change in the law affects a right to payment in respect of a medical service already incurred. The Solicitor-General contended that a law which abolishes a benefit in respect of a period in the past operates prospectively to remove the present and continuing right to receive the payment. But whether or not this argument is correct, Parliament has plenary power to make laws with respect to the provision of medical benefits and this includes the power to alter, reduce or revoke them. Whatever the Parliament can do prospectively, it can do retrospectively ((80) Polyukhovich v. The Commonwealth (1991) 172 CLR 501.).
21. It follows that a law which alters, reduces or revokes a s.20 benefit, whether prospectively or retrospectively, is not a law with respect to the acquisition of property for the purpose of s.51(xxxi) of the Constitution. The s.20 entitlement is granted subject to the condition that it may be altered, reduced or revoked at any time. A law which gives effect to that condition does not acquire any property of the beneficiary of the entitlement.
22. No doubt it is true that the right to payment conferred by s.20 of the Principal Act constitutes property within the meaning of s.51(xxxi) of the Constitution. The right to payment conferred by s.20 is a right to obtain payment of a specialty debt ((81) The Cork and Bandon Railway Co. v. Goode (1853) 13 CB 826 (138 ER 1427); Royal Trust Co. v. Attorney-General for Alberta (1930) AC 144.). It is a chose in action which is assignable by the Principal Act. Property for the purpose of s.51(xxxi) is not confined to physical things. Under the general law, the term "'property' has ceased to describe any res, or object of sense, at all, and has become merely a bundle of legal relations - rights, powers, privileges, immunities" ((82) Corbin, "Taxation of Seats on the Stock Exchange", (1922) 31 Yale Law Journal 429 at 429.). A similarly wide interpretation has been given to the term "property" in s.51(xxxi). In Australian Tape Manufacturers Association Ltd. v. The Commonwealth ((83) (1993) 176 CLR 480 at 509.), Mason CJ, Brennan, Deane and Gaudron JJ expressly stated that a chose in action is property for the purpose of the paragraph ((84) See also Minister of State for the Army v. Dalziel (1944) 68 CLR 261 at 276, 285, 290; Bank of New South Wales (1948) 76 CLR at 299, 349. It may be that the authors of the Constitution in drafting s.51(xxxi) had a physicalist conception of property in mind and intended that paragraph to apply only to the acquisition of land, buildings and other
material objects: see Official Record of the Debates of the Australasian Federal Convention, Melbourne, 25 January 1898, at 151-154. But the settled doctrine of this Court is that the term "property" in that paragraph extends "to every species of valuable right and interest including real and personal property, incorporeal
hereditaments ... and choses in action": Australian Tape
Manufacturers Association Ltd. (1993) 176 CLR at 509 citing Dalziel (1944) 68 CLR at 290.). If the Commonwealth legislated so as to enable one of its statutory agencies to acquire all the property of a particular person, it could not be doubted that, for the purpose of s.51(xxxi), the property of that person would include the right to receive any payment owing by the Commission in respect of a medicare benefit ((85) In the United States a series of cases have held that statutory entitlements to benefits can constitute property for the purpose of the Due Process Clause. See, for example, Goldberg v. Kelly (1970) 397 US 254 at 262 (welfare payments); Wheeler v. Montgomery (1970) 397 US 280 (old age benefits); Fusari v.
Steinberg (1975) 419 US 379 (unemployment benefits); Goss v. Lopez (1975) 419 US 565 at 574 (public education); Mathews v. Eldridge (1976) 424 US 319 at 332 (social security disability
benefits); Bishop v. Wood (1976) 426 US 341 at 344 (tenured public employment). The juridical nature of this property right
has not been closely analysed. In Board of Regents v. Roth (1972) 408 US 564 at 577, however, Stewart J said that:
"To have a property interest in a benefit, a person clearly must have more than an abstract need or desire for it. He must have more than a unilateral expectation of it. He must, instead, have a legitimate claim of entitlement to it. It is a purpose of the ancient institution of property to protect those claims upon which people rely in their daily lives, reliance that must not be arbitrarily undermined.").
23. But the question in this case is not whether a right to payment of a medicare benefit is property. It is whether a law which alters or repeals the statute conferring that entitlement is, within the meaning of s.51 of the Constitution, a law with respect to the "acquisition of property ... for any purpose in respect of which the Parliament has power to make laws". Because the right to payment which is conferred by s.20 is conferred subject to any future alteration or repeal by the Parliament, a law which alters or repeals that entitlement is not a law with respect to the acquisition of property within the meaning of s.51(xxxi). In the words of Dixon CJ in Burton v. Honan ((86) (1952) 86 CLR 169 at 180.) "the whole matter lies outside the power given by s.51(xxxi)".
The s.20A entitlement
24. However, it does not necessarily follow from Allpike and the United States cases that no breach of s.51(xxxi) occurs if the Parliament of the Commonwealth alters or repeals a practitioner's right to payment arising out of the assignment of a medicare benefit. The practitioner who takes an assignment "accepts the assignment in full payment of the medical expenses incurred in respect of the professional service". That means that the practitioner who takes an assignment accepts the right to a payment of approximately 85 per cent of the amount of the schedule item in return for surrendering his or her contractual right to the fee payable by the patient. The Solicitor-General for the Commonwealth contended that the practitioner gives neither the Commonwealth nor the patient "a quid pro quo" for the payment. But in giving up his or her rights against the patient, the practitioner gives consideration for the payment authorised by s.20A even if the Commission or the Commonwealth obtains nothing from the assignment. If the terms of s.20A constituted a contractual offer on behalf of the Commission, the practitioner's agreement not to enforce payment of his or her fee against the patient would be sufficient consideration to make a binding contract between the parties ((87) Bolton v. Madden (1873) LR 9 QB 55; Jones v. Padavatton (1969) 1 WLR 328; Tanner v. Tanner (1975) 1 WLR 1346.). It would be a misuse of language, therefore, to describe the s.20A payment as a gratuity to the practitioner. Moreover, the practitioner's right to payment cannot be amended or repealed at the discretion of the Health Commission or the executive government of the Commonwealth. Upon accepting the assignment, the practitioner has a right enforceable at
law against the Commission. That right is a chose in action. Unquestionably, it constitutes property for the purpose of s.51(xxxi) ((88) Australian Tape Manufacturers Association (1993) 176 CLR at 509.). But is a law that abolishes or reduces the amount of a benefit that is the subject of an assignment under s.20A a law with respect to the acquisition of property for the purposes of s.51(xxxi)? Or is the right of property created by force of s.20A, like the entitlement under s.20, created subject to the condition that it can be altered or even abolished by an exercise of power under s.51(xxiiiA) without infringing
s.51(xxxi)?
25. In my opinion, in the absence of a contract, a right or entitlement to a payment created by federal law may be altered or abolished at any time without infringing the provisions of s.51(xxxi) even though the beneficiary of the entitlement may have acted in reliance on the payment being made. Until the right or entitlement has been transformed into some other form of property recognised and enforceable under the general law, the head of federal power that created the right or entitlement may be exercised so as to alter or revoke that right or entitlement without infringing the guarantee embodied in s.51(xxxi) ((89) cf. United States v. Rodgers (1983) 461 US 677 at 686 distinguishing between a "mere statutory entitlement" and a "vested property right" in determining whether a taking had occurred of a "homestead" right under Texas law.). Once the right or entitlement to payment is transformed into a payment or a judgment debt, for example, a new form of property is created which is not
dependent upon federal law for its substance, recognition or protection. The Commonwealth can only acquire it by paying the price demanded by s.51(xxxi). To hold that the right or entitlement may be altered or revoked before but not after payment does not mean that form has triumphed over substance. It simply means that, once the new property has been created, it is outside the scope of the power which created the original right or entitlement and can only be reached by an exercise of power under s.51(xxxi).
26. In the present case, no contract was made between Dr Peverill and the Commission. Section 20A does not contain an offer on behalf of the Commission, the acceptance of which creates a contract between the Commission and the medical practitioner. The terms of that section amount to no more than a declaration of legislative policy which the Commission must follow until it is altered or revoked by further legislation. In Dodge v. Board of Education of Chicago ((90) (1937) 302 US 74.), the Supreme Court held that no vested right of property was affected by legislation which reduced the annuities payable to teachers who had retired or were eligible to retire pursuant to an earlier enactment. The earlier enactment had reduced the period of the teachers' tenure but had provided retirement annuities for them. They maintained that the earlier enactment was an offer to pay an annuity which they had accepted by remaining in service until their retirement. The Supreme Court said ((91) ibid. at 78-79.):
"In determining whether a law tenders a contract to a citizen it is of first importance to examine the language of the statute. If it provides for the execution of a written contract on behalf of the state the case for an obligation binding upon the state is clear. Equally clear is the case where a statute confirms a settlement of disputed rights and defines its terms. On the other hand, an act merely fixing salaries of officers creates no contract in their favour and the compensation named may be altered at the will of the legislature. This is true also of an act fixing the term or tenure of a public officer or an employe (sic) of a state agency. The presumption is that such a law is not intended to create private contractual or vested rights but merely declares a policy to be pursued until the legislature shall ordain otherwise."
27. In the present case, s.20A did not provide for the execution of any contract on behalf of the Commission or the Commonwealth. Nor did that section confirm any settlement between the parties. It merely declared the current policy of the Parliament in respect of the payment of assignments of medicare benefits. It contained no offer of a contract to a medical practitioner.
28. No doubt, Dr Peverill carried on his practice in reliance on the belief that the services which he rendered fell within item 1345 of the schedule and that he would be paid 85 per cent of the amount specified in that item if he accepted the assignment of a patient's medicare benefit. However, the element of reliance cannot transform a federal statutory entitlement into property, immune from the reach of the federal power which created it, as long as it remains accepted, as I think it must, that a person has no right to the continuation of a mere statutory benefit ((92) See Grais, "Statutory Entitlement and the Concept of Property", (1977) 86 Yale Law Journal 695 at 699 ff. In Board of Regents v. Roth (1972) 408 US 564, Stewart J appeared to regard the element of reliance as the property-making factor. However, because there is no entitlement to the continuation of a benefit, I am unable to accept that this is so.). Participants in a field regulated by legislation cannot object if the legislative scheme is altered by subsequent amendments ((93) F.H.A. v. The Darlington Inc. (1958) 358 US 84 at 91; Connolly v. Pension Benefit Guaranty Corp. (1986) 475 US 211 at 227.).
29. The present case must, therefore, be considered on the basis that, although s.20A gave Dr Peverill a right to take an assignment of the patient's s.20 benefit and an entitlement to be paid 85 per cent of the relevant item amount, that entitlement could be altered, reduced or revoked before it was converted into money or some other form of property. Whether the alteration, reduction or revocation affected the entitlement under s.20A directly or, indirectly, by operating on the underlying s.20 medicare benefit is a matter of no constitutional significance. Consequently, the entitlement under s.20A did not differ in substance from the patient's entitlement under s.20. It follows that Dr Peverill's entitlement to payment under s.20A was conferred subject to the risk that either it or the s.20 benefit itself could be altered or revoked at any time by the Parliament. Because that is so, the Amending Act did not infringe the provisions of s.51(xxxi) of the Constitution.
Section 55
30. Counsel for Dr Peverill also sought to uphold the judgment of Burchett J by contending that the Amending Act imposed a tax into the Health Insurance Act contrary to the terms of s.55 of the
Constitution. He contended that the Amending Act effected a compulsory exaction of a specific liquidated amount and was within the traditional definition of a tax laid down in Matthews v. Chicory Marketing Board (Vict.) ((94) (1938) 60 CLR 263 at 276.). Counsel then contended that the Amending Act "purports to insert provisions imposing taxation - namely ss.2(2) and the reference to past dates in s.4 and s.5 at which the sections are said to have effect - into the Health Insurance Act 1973". Consequently, the Amending Act was in breach of s.55 of the Constitution and invalid ((95) See Air Caledonie International v. The Commonwealth (1988) 165 CLR 462.). However, the Amending Act merely alters the statutory entitlement to payment or, on
one view, abolishes that entitlement and substitutes another entitlement of lesser value. Such a law is not a law with respect to taxation but a law with respect to the "provision of .. sickness and hospital benefits, medical and dental services" within the meaning of s.51(xxiiiA) of the Constitution. The Amending Act no more imposes a tax than legislation which reduces the value of an unemployment or pension benefit.
31. The appeal must be allowed.
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Cited Sections