Hospital Benefit Fund of Western Australia Inc v Australian Competition & Consumer Commission

[1997] FCA 655

FEDERAL  COURT  OF  AUSTRALIA

ADMINISTRATIVE LAW - judicial review - Trade Practices Act - National Health Act - employer offered membership in health insurance plan to its employees - plan involved employer paying annual allowance to employees and providing payroll deduction service for payment of premiums, on condition that employees insure with one specified health fund - specified health fund offered those employees insurance premiums which were discounted from current retail rates - rival health fund sued employer in this Court alleging third line forcing - also informed Australian Competition and Consumer Commission of those proceedings and its view that plan (by offering discounted insurance premiums) was illegal as contravening the National Health Act - employer then gave “Notification” of its conduct to Commission - Commission’s statutory discretion to remove protection arising from giving Notification depended upon finding no nett public benefit - Commission decided to let Notification stand - Notification, by remaining in force, had effect that s 47(1) of the Trade Practices Act did not apply to the conduct - whether Commission erred in law by regarding benefit to employees of the employer as a benefit to “the public” - whether Commission erred in not taking into account possible illegality, under National Health Act, of conduct under the plan and possible further illegality by consequent competition from other health insurance providers also offering discounted insurance premiums - whether Commission obliged to extend procedural fairness to applicant before deciding to allow Notification to stand.

Administrative Decisions (Judicial Review) Act 1977 (Cth) ss 5(1)(a),(d),(e),(f), (2)(a), (b),(c)
Trade Practices Act 1974 (Cth) ss 47(1), (6), (7) (10A), s 93(1), (3A), (7A)
National Health Act 1953 (Cth) ss 73BA, 74(5), 74B,Schedule 1 paras. (b),(m)

Lee v. Evans (1964) 112 CLR 276
Minister for Aboriginal Affairs v. Peko-Wallsend Ltd (1986) 162 CLR 24
Refrigerated Express Lines (Australasia) Pty Ltd v. Australian Meat and Live-Stock
Corporation (No. 2) (1980) 44 FLR 455
Sean Investments Pty Ltd v. MacKellar (1981) 38 ALR 363
Kioa v. West (1985) 159 CLR 550
SWB Family Credit Union v. Parramatta Tourist Services Pty Ltd (1982) 48 FLR 445
Re Shell Co of Australia Ltd (1975) 1 ATPR 35.220
Re QCMA (1976) 25 FLR 169
Re Lamont (1990) 96 ALR 475
Re Concrete Carters Association (Victoria) (1978) 31 FLR 193

THE HOSPITAL BENEFIT FUND OF WESTERN AUSTRALIA INC v
THE AUSTRALIAN COMPETITION AND CONSUMER COMMISSION
No. WAG 162 of 1996

CARR J
PERTH
22 JULY 1997

IN THE FEDERAL COURT OF AUSTRALIA     )
WESTERN AUSTRALIA DISTRICT REGISTRY )          No. WAG 162 of 1996
GENERAL DIVISION  )

BETWEEN :  THE HOSPITAL BENEFIT FUND OF
  WESTERN AUSTRALIA INC

Applicant
  AND:

THE AUSTRALIAN COMPETITION
  AND CONSUMER COMMISSION

Respondent

CORAM:      CARR J
DATE:          22 JULY 1997
PLACE:        PERTH

MINUTE OF ORDERS

THE COURT ORDERS THAT:

1. The respondent’s decision, made on 7 August 1996, to allow Notification N30722 lodged by American Express International Inc to stand, be set aside.

1. The matter of whether the respondent should or should not give a written notice under s 93(3A) of the Trade Practices Act in respect of Notification N30722 be remitted to the respondent for further consideration and determination according to law.

1. The respondent pay the applicant’s costs.

note:  settlement and entry of orders is dealt with in order 36 of the          federal court rules.

IN THE FEDERAL COURT OF AUSTRALIA      )
WESTERN AUSTRALIA DISTRICT REGISTRY )          No. WAG 162 of 1996
GENERAL DIVISION  )

BETWEEN:             THE HOSPITAL BENEFIT FUND OF
  WESTERN AUSTRALIA INC
  Applicant

AND:    THE AUSTRALIAN COMPETITION
  AND CONSUMER COMMISSION
  Respondent

CORAM:      CARR J
DATE:          22 JULY 1997
PLACE:        PERTH

REASONS FOR JUDGMENT

Introduction

This is an application by the Hospital Benefit Fund of Western Australia Inc (to which I shall refer either as “HBF” or the applicant) for an order of review, under s 5 of the Administrative Decisions (Judicial Review) Act 1977 (Cth) (“the ADJR Act”), of a decision made on 7 August 1996 by the Australian Competition and Consumer Commission (“the Commission” or the respondent), not to issue a notice under s 93(3A) of the Trade Practices Act 1974 (Cth) (“the TPA”). That decision had the effect of continuing the inapplicability of s 47 of the TPA to the conduct described below.

Factual Background

The applicant is incorporated under the Associations Incorporations Act 1987 (W.A.) and is a “registered health benefits organisation”, registered as such under the National Health Act 1953 (Cth). It seeks to impugn, indirectly, certain conduct involving another health insurance provider, The Hospital Contributions Fund of Australia Ltd (“HCF”). On 13 May 1996 a company called American Express International Inc (“Amex”) wrote to its employees throughout Australia announcing a proposed health care plan involving HCF (“the Plan”). The essential details of the Plan were as follows. As from 1 June 1996:

.        Amex would cease paying a health insurance subsidy (which was calculated on the basis of a percentage of the health insurance premiums paid by eligible employees) to eligible employees.  That arrangement had involved some ten different health insurance providers.  Instead, Amex would pay to eligible employees a “health care allowance” of $800 per annum for eligible employees who took up “Family” membership and $400 to those who took up “Single” membership; 

.        the health care allowance would be paid only to employees who joined the Plan; 

.        Amex would no longer make payroll deductions from its employees’ salaries and remit health insurance premiums to health insurance providers other than HCF; 

.        those Amex employees who wished to insure with other health insurance providers would have to make their own arrangements for payment of the premiums; and

.        in respect of employees who joined the Plan (whether or not they were eligible for Amex’s health care allowance), Amex would remit health insurance premiums to HCF by way of payroll deductions. 

On 15 May 1996 Amex sent a memorandum to its employees which was substantially to the same effect as its letter of 13 May 1996. In that memorandum Amex advised that its new health care allowance would be taxable but would be at a higher rate than the existing health insurance subsidy, so that the employees’ after-tax position would be the same. On 30 May 1996 the applicant sued Amex in this Court by filing Application Number WAG 64 of 1996 (“the first Federal Court Application”) and an accompanying statement of claim. In those proceedings the applicant claimed that Amex had engaged in that category of the practice of exclusive dealing, colloquially known as “Third Line Forcing”, which is prohibited by s 47(6) and (7) of the TPA. Third Line Forcing is automatically illegal (a “per se” contravention) whether or not it has any anti-competitive purpose or effect, unless protected by a “Notification”, which is still in force, given under s 93 of the TPA. It is the Commission’s decision to allow Amex’s Notification to stand (referred to below) which is under challenge by the applicant in these proceedings. In its statement of claim in the first Federal Court Application, HBF particularised the alleged contraventions, first, in terms of Amex offering to its employees (in the alternative offering to its employees paying health insurance premiums to a health insurance provider other than HCF) a health care allowance and the service of payroll deduction and remittance of health insurance premiums on the condition that those employees acquired the services in the Plan from HCF - see s 47(6). The alleged contravention of s 47(7) was that Amex refused to supply its employees (in the alternative its employees paying health insurance premiums to a health insurance provider other than HCF) the health care allowance and the service of payroll deduction and remittance of health insurance premiums for the reason that its employees had not acquired or had not agreed to acquire the services in the Plan from HCF. The applicant claimed injunctive relief, including interlocutory relief, and damages. On 31 May 1996 Nicholson J made an interim order, under s 80(2) of the TPA, restraining Amex from acting in the manner complained of by the applicant in relation to any Amex employees in Australia who were currently insured with the applicant and had not made an election to join the Plan. On 4 June 1996 Messrs Solomon Brothers, the applicant’s solicitors, wrote to the Regional Director of the Commission in Perth. In that letter Solomon Brothers advised the Commission that they were acting for HBF and gave particulars of the proceedings in the first Federal Court Application. The letter indicated that HBF was interested in joining HCF to those proceedings as having been involved in the alleged contraventions, but that there were insufficient materials available to HBF at that stage to provide any grounds for such joinder. Solomon Brothers suggested to the Commission that the only basis upon which such material could be obtained would be by the Commission exercising its powers under s 155 of the TPA. They invited the Commission to exercise such powers. Solomon Brothers repeated that request in subsequent correspondence. On 17 July 1996 Mr Steven Bray of the Commission’s Perth office prepared a very detailed ten-page minute, addressed to the Chairman of the Commission, in relation to the request made by Solomon Brothers for the Commission’s assistance. Annexed to that minute were copies of certain documents, filed in the first Federal Court Application, being the application, the statement of claim, a draft of the interim injunction and an affidavit which had been sworn on behalf of HBF in support of the application for that injunction. On 25 July 1996 the Commission wrote to Solomon Brothers advising that it did not intend to pursue the matter any further and giving its reasons for that decision. In the meantime, on 23 July 1996 Amex, through its solicitors, lodged Notification N30722 under s 93 of the TPA. In summary, the effect of that Notification was that at the expiration of the period of 14 days from its lodgment or, if the Commission had given notice during that period under s 93A(2) and subsequently decided not to give a notice under s 93(3A) of the TPA (it did neither of those things), the conduct complained of in the first Federal Court Application could not contravene s 47 of the TPA - see s 47(1) and (10A) when read with s 93(1), (3A) and (7A), s 93A and regulation 9(2) of the Trade Practices Regulations. In its submissions, the applicant contended that Notification N30722 came into force when the Commission made the abovementioned decision. The applicant submitted that the effect of the Commission’s decision was to provide statutory protection to Amex in respect of the conduct notified. I do not think that is correct. In my view, in the undisputed factual circumstances of this matter, Notification N30722 came into force at the expiration of the period of 14 days from its lodgment. That happened on 7 August 1996, the same date upon which the Commission made its decision. The postponement, worked by s 93(7A), of a Notification coming into force until the Commission decides not to give a notice under s 93(3A) is conditioned upon the Commission having given a notice under s 93A(2) within the prescribed period - see s 93(7A)(b). The prescribed period, as far as Notification N30722 was concerned (having been given after 30 June 1996) was 14 days. The statutory protection regime for exclusive dealing conduct which is not per se illegal is different. In those cases, Notification results in immediate protection from the date upon which it is given - see s 93(7)(b). That type of Notification may cease to be in force, relevantly, if the Commission gives a notice under s 93(3), 30 days after the giving of such notice. A notice under s 93(3) in effect revoking that statutory protection (subject to review by the Trade Practices Tribunal under s 101A) may be given “at any time”. The words “at any time” are not found in s 93(3A). Parliament appears to have decided that, in relation to third line forcing conduct, a notice under s 93A(2) must be given within the prescribed period of 14 days, otherwise the Notification is to come into force. I have referred above to the postponement condition to that effect contained in s 93(7A)(b), - see the words “during that period”. Similarly, s 93(7B)(b) relevantly provides for such a Notification not to come into force if the Commission gives a notice under s 93A(2) and then gives notice under s 93(3A).

In its application the applicant seeks review of “... the decision of the Respondent made on 9 August 1996 (sic - the decision was in fact made on 7 August 1996) not to issue a notice under Section 93(3A) of the [TPA].” In my opinion, it is proper to regard that decision as being the respondent’s decision, in effect, not to cause a revocation of the statutory protection which was to come into force on that date i.e. a decision contemplated by s 93(7C). I do not think that the absence of the words “at any time” in s 93(3A) preclude the Commission from taking this course at any time, whether within the prescribed period or after its expiry. The case was certainly fought on that basis. Furthermore, I agree with the editors of “Australian Trade Practices Reporter” who state (at para 6-785 in Volume 1 of that Reporter) that:

“Once a notification of third line forcing has come into force the statutory protection may later be removed (as is the case with other notification) by the Commission, if it is satisfied under the test, even if it had previously made a decision allowing the notification to stand.”

The statutory scheme for notification of third line forcing was introduced by s 18 of the Competition Policy Reform Act 1995 (Cth). That section, among other things, inserted ss 93(7A), (7B) and (7C) into the TPA.  That new statutory scheme, in my view, clearly envisages the three situations in which statutory protection for third line forcing may be postponed, not come into force at all or, (having come into force), may cease to be in force.  I now turn to the manner in which the respondent dealt with Notification N30722.

On 2 August 1996 Mr Gavin Fox, a project officer in the Commission’s adjudication branch, prepared a detailed minute in relation to Notification No. N30722. That minute was sent to the Chairman of the Commission who ordered that the matter be considered by the “Full Commission” at its meeting on 7 August 1996 and that the minute be distributed to the Deputy Chairman, three other members of the Commission and Mr Spier of the Commission staff. The minute gave the background to the Notification. It referred to the first Federal Court Application and said that the conduct by Amex was the subject of those proceedings in which breaches of ss 47(6) and 47(7) of the TPA were alleged.  It also referred very briefly to Mr Bray’s staff paper, but not to the contents of that paper.  The minute gave a detailed description of the Plan.  It then proceeded to analyse the market for health care funds in Australia, including the fact that HCF’s share of that (national) market was only 7.8%.  The minute then considered the potential public benefit claimed by Amex.  It referred to two main benefits so claimed as being, first, the ability of its employees to obtain lower cost health insurance and, secondly, that encouragement would be given to health funds “to move to counteract the strategies of HCF” i.e. to promote competition.  The minute then considered any anti-competitive detriment caused by the Plan.  In relation to the service of automatic payroll deduction, the minute argued that this would have minimal effect because direct debiting facilities offer an automatic payment method similar to payroll deduction.  In relation to the health care allowance, it was noted that this would be $400 per annum (less tax) in respect of a single plan membership and $800 per annum (less tax) in respect of family membership.  Even so, the minute pointed to the fact that any anti-competitive effects of the Plan would be restricted to Amex’s 2,200 Australian employees, that there were some 3.47 million people with private health insurance in Australia and a restriction on the health insurance choices of such a small proportion of the relevant population would not appear to have any significant anti-competitive effects.  The minute then balanced any anti-competitive detriment with the claimed public benefit.  It described the anti-competitive effects as being “minimal”.  It expressed a view that the conduct involved in the Plan might promote price competition in the relevant market, from other health insurance providers.  It concluded that the operation of the Plan might therefore offer benefit not only to Amex employees but also, indirectly, to employees of other corporations.  The minute recommended that the Commission should allow Notification N30722 to stand because the Plan would provide a public benefit that outweighed any anti-competitive detriment.

On 7 August 1996 the Commission (comprising the Deputy Chairman and four other Commissioners) considered Mr Fox’s recommendation and decided that:

“The Commission agreed with staff’s recommendation and allowed Notification N30722 lodged by American Express International Inc. to stand.”

On 7 October 1996, by a consent order, the injunction granted by Nicholson J on 31 May 1996 was dissolved. On 18 October 1996 HBF filed this application for an order of review of the Commission’s decision not to issue a notice under s 93(3A), the giving of which would (at the expiration of 31 days thereafter or on such later date as the Commission might have specified) have removed the statutory protection extended to Amex’s conduct under the Plan by virtue of the filing of Notification N30722 and the expiry of the prescribed period of 14 days. Amex is aware of these proceedings and, so I was informed, the parties to the first Federal Court Application have agreed to the adjournment of that matter pending the disposal of this matter.

The Grounds of the Application

No issue was raised by the respondent about whether HBF was a “person aggrieved” by the abovementioned decision. In terms of s 5 of the ADJR Act, the applicant relied on four grounds of review, namely, error of law [s 5(1)(f)], improper exercise of power, first, by taking into account what were said to be irrelevant considerations and, secondly, by failing to take into account what were said to be relevant considerations and, thirdly, by exercise of a power for improper purposes [s 5(1)(e) when read with s 5(2)(a), (b) and (c)], breach of the rules of natural justice [s 5(1)(a)] and (by amendment almost at the conclusion of the hearing) that the decision was not authorised by the TPA [s 5(1)(d)]. 

There were two recurrent submissions in this case which were common to nearly all of the grounds relied upon by the applicant.  I propose to consider those two submissions initially in the context of alleged error of law.  I do so, fully conscious that the two main submissions are relied upon by the applicant to support other grounds (such as failure to take into consideration relevant matters), but in the hope of avoiding duplication.

Errors of Law  (Ground 3 of the Application)

In its amended application HBF referred to what were said to be two errors of law. [To identify the alleged errors of law it is necessary to refer to the applicant’s grounds 1.1, 1.2 (a complaint of improper exercise of power), 2 (another complaint of improper exercise of power) and 3]. The first alleged error of law was that the Commission’s decision not to issue a notice under s 93(3A) of the TPA, being based on a finding that public benefit would arise from the Plan through Amex employees being able to obtain lower cost health insurance, involved an error of law because “the employees of Amex do not constitute the public”.  Secondly, as that benefit and the public benefit which would arise by encouraging the promotion of competition in the private health insurance market were the only two benefits identified by the Commission and because, so the applicant contended, neither of these benefits should have been taken into account, there was no public benefit to arise from the Plan.  In its written outline of submissions the applicant argued that:

“The public benefits allegedly identified by the Respondent were not in fact public benefits and, on that basis, the decision was made on improper grounds.”

The second branch of these submissions was based on the applicant’s contention that the provision of discounted health insurance premiums was prohibited by the National Health Act.

Did the Commission Err in Law by Regarding the Benefit to Amex Employees as Being a Public Benefit?  (Ground 1.1 of the Application)

Section 93(3A) of the TPA relevantly provides that if the Commission is satisfied that the likely benefit to the public from the conduct or proposed conduct will not outweigh the likely detriment to the public from the conduct or proposed conduct it may give a written notice to that effect. Before doing so, it must comply with the procedural requirements of s 93A, but those requirements are not relevant at present to this matter. The giving of that notice causes the relevant Notification to cease to be in force on the thirty-first day after the Commission gives the notice or on any later date specified in writing by the Commission, with the result that the statutory protection referred to above comes to an end - see s 93(7C) when read with s 47(10A). In the present matter the Commission was satisfied that any likely detriment to the public from the relevant conduct would not outweigh the likely benefit to the public from that conduct. The first question is whether the Commission erred in law when, in assessing the likely benefit to the public, it took into account the fact that the Plan would enable employees of Amex to obtain lower cost health insurance? The applicant submitted that this benefit was “clearly private” and that “the public” comprises the whole of the public but not a part of it. For the latter part of this submission it relied upon the decision of the High Court of Australia in Lee v. Evans (1964) 112 CLR 276. In my view, that case is clearly distinguishable from the question at issue in this matter. In Lee v. Evans the appellant had orally invited four persons to deposit money with his firm.  The question was whether there had been an “invitation to the public”.  The High Court held that there had not.  That is not the question which faced the Commission.  The Commission was told that there were 2,200 Amex employees throughout Australia.  It regarded the provision of lower cost health insurance to those employees as one part of the likely benefit to the public.  The applicant relied upon certain determinations of the Trade Practices Tribunal for its proposition that such a benefit to Amex’s employees throughout Australia could not, as a matter of law, amount to a public benefit.  The determinations included Re QCMA (1976) 25 FLR 169 and Re Lamont (1990) 96 ALR 475. These were applications to the Tribunal to review refusals by the Trade Practices Commission to grant authorisations. In the first case the President of the Tribunal was Woodward J and in the second case Lockhart J. In my opinion, the reasoning in those determinations does not sustain the applicant’s contention. In QCMA (at pp 182-183) the Tribunal referred to a view previously expressed by the Commission in one of its annual reports that the authorisation test required benefits to the public and not merely to the applicant or some other limited group, and then observed:

“While agreeing with this statement as far as it goes, we would not wish to rule out of consideration any argument coming within the widest possible conception of public benefit.  This we see as anything of value to the community generally, any contribution to the aims pursued by the society including as one of its principal elements (in the context of trade practices legislation) the achievement of the economic goals of efficiency and progress.  If this conception is adopted, it is clear that it could be possible to argue in some cases that a benefit to the members or employees of the corporations involved served some acknowledged end of public policy even though no immediate or direct benefit to others was demonstrable.”  (Emphasis added)

The applicant relied upon the following passage in Re Lamont (at p 489):

“The other public benefits which the applicant suggested would result from authorisation have, in our opinion, little relevance or substance.  They are of marginal significance, or not really a likely outcome of authorisation or would constitute a private rather than a public benefit.  For example, stabilisation of lorry owner-driver’s income is of direct benefit only to the lorry owner-drivers themselves.”

On the other hand, in Re Howard Smith Industries Pty Ltd (1976) 28 FLR 385 (another review of a determination by the Trade Practices Commission not to grant an authorisation for a merger) the Tribunal said this (at pp 391-392):

“The Tribunal has to determine what constitutes “the public” in order to assess whether there is likely to be a substantial benefit to the public from a proposed merger.  It is not simply the public as consumers.  If a merger is likely to result in the achievement of economies of scale and a considerable saving in the cost of supplying goods or services this might well constitute a substantial benefit to the public, even though the cost saving is not passed on to the consumers in the form of lower prices.  Nevertheless, if such a merger benefited only a small number of shareholders of the applicant corporations through higher profits and dividends, this might be given less weight by the tribunal, because the benefits are not being spread widely among members of the community generally.”

With respect, I regard the last sentence in the above passage as being most helpful in the resolution of the present question.  Whether a matter is to be regarded as a benefit to the public must surely be a question of degree.  It involves assessments of the extent of the benefit and the relevant weight to be attached to it.  I should interpolate that, unlike the situation in Re Howard Smith, the present matter does not require a finding by the respondent of any substantial benefit to the public.  Given that there were 2,200 Amex employees throughout Australia who stood to benefit from the Plan, I do not think that, as a matter of law, the respondent erred in regarding that benefit as part of the likely benefit to the public to be derived from the conduct of the Plan.  In other words, I do not consider that in making its assessment of likely public benefit, the Tribunal was obliged to ignore those benefits.  In terms of judicial review of its decision, it was clearly for the respondent to decide what weight it should give to that benefit.  In oral argument, Mr D H Solomon, counsel for the applicant, submitted that even the second benefit identified by the Commission (further competition by way of discounted premiums) would only benefit “the employed public”, and thus was not a public benefit.  That submission went beyond the grounds of his client’s application.  In any event, in view of the conclusions which I have expressed above, it is not necessary to deal with the further submission.

Illegality

Community Rating (Grounds 1.2, 2 and 3)
The applicant submitted that the respondent had erred by taking into account that the Plan provides health insurance to Amex employees at discounted retail rates when, so it was argued, such conduct was illegal, being prohibited by the principle of “community rating” with which all registered health insurers (including HCF) are required to comply as a condition of registration under the National Health Act 1953 (Cth). The principle of community rating operates by reason of paragraphs (b) and (m) of Schedule 1 to the National Health Act.  Those provisions required, so the applicant contended, all contributors and persons eligible to be contributors to a health benefits fund of a registered health insurer, and their dependants, to be permitted to contribute in accordance with any applicable benefits arrangement of the health insurer, regardless of the person’s age, status of health, frequency of use of professional services or the amount of benefits the person may be or become entitled to.  The same applied, so it was put, to the Commission’s assessment of public benefit arising from the promotion of price competition from other insurance providers in the private health insurance market.  The applicant submitted that the Commission’s finding that the Plan would promote price competition in the private health insurance market whereby, through negotiations between employers and health funds, employees of other corporations might benefit from the Amex initiative in the form of cheaper premiums, was “predicated on an assumption that other funds will copy HCF in breaching the National Health Act”.  The applicant contended that it was contrary to public policy for Amex to be permitted to rely on its submissions to the above effect and for the Commission to accept such illegal conduct as a pro-competitive public benefit. 

Section 73BA of the National Health Act provides that the registration of an organisation as a registered health benefits organisation shall be deemed to be subject to the conditions set out in Schedule 1. Schedule 1 relevantly provides:

“conditions of registration of an organisation

(b)Subject to the condition set out in paragraph (ba), the organization will permit:

(i)any contributor to the health benefits fund conducted by it; and

(ii)any person who is eligible to become such a contributor;

to contribute for benefits in respect of the contributor and the contributor’s dependants (if any), or in respect of the person and the person’s dependants (if any), in accordance with any applicable benefits arrangement of the organization.

(ba)Where -

(i)the organization offers contributors of the health benefits fund conducted by it lesser benefits in lieu of the benefits that are payable in accordance with an applicable benefits arrangement of the organization; and

(ii)a contributor to the health benefits fund elects, in accordance with the rules of the organization, to contribute for those lesser benefits,

the organization will permit the contributor to contribute for benefits in respect of the contributor and the contributor’s dependants (if any) in accordance with that arrangement as modified by the election.

. . .

(m)The organization will not, in determining, in relation to any contributor or to any contributor included in a class or kind of contributors -

(i)whether or not benefits are payable in accordance with an applicable benefits arrangement of the organization (whether or not modified by an election of the kind referred to in the condition set out in paragraph (ba));

(ii)if benefits are payable in accordance with an applicable benefits arrangement of the organization (whether or not modified by an election of the kind referred to in the condition set out in paragraph (ba)) - the amount of the benefits so payable;

(iia)whether or not the contributor is entitled to make or revoke an election of the kind referred to in the condition set out in paragraph (ba); or

(iii)the amount of the contributions payable in respect of an applicable benefits arrangement of the organization,

have regard to any of the following matters:

(iv)the suffering by the contributor, or a dependant of the contributor, from a chronic disease, illness or other medical condition or from a disease, illness or medical condition of a particular kind;

(v)the age of the contributor or of a dependant of a contributor;

(vi)the frequency of the rendering of professional services to the contributor or to a dependant of a contributor;

(vii)the amount, or extent, of the benefits to which the contributor becomes, or has become, entitled during a period;

(viii)any matter prescribed for the purpose of this subparagraph.”

Section 74B of the National Health Act relevantly provides that a registered organisation shall conduct its health benefits fund in accordance with the provisions of that Act and in accordance with any term or condition of registration that is imposed by or under that Act. Section 74(5) of the National Health Act provides that where a registered organisation contravenes, or fails to comply with a provision of the Act or a term or condition of registration imposed by or under the Act then that contravention or failure “... shall, without limiting in any way the liability of the organization be deemed to be a contravention or failure by [its] public officer, and the public officer is punishable for that contravention or failure by a fine not exceeding $10,000.”

The applicant submitted that the Plan, by offering reduced premium rates to Amex’s employees, contravened condition (b) above.  This was because, so it was put, the fact that they were to receive a special discount meant that HCF was not permitting any contributor to its health benefits fund to contribute for benefits “... in accordance with any applicable benefits arrangement of the organisation.”  If other registered health benefits organisations, in order to meet the competition, did the same thing, they would for the same reason contravene condition (b).  So far as condition (m) was concerned, HCF and its competing organisations would, so it was contended, in determining the amount of contributions payable by employees in respect of the benefit arrangements be having regard to the age of the contributor.  It was submitted that to target employees with discounted premiums involved taking into account the age of the proposed contributors, because generally speaking employees were under the age of 65.  The applicant sought to read an affidavit sworn by its general manager, Mr James Roderick Stewart, concerning the factual circumstances of the health insurance market in Australia.  The respondents objected to that evidence on the grounds of relevance.  I reserved the question of its admission.  As it turns out, I do not think that it is necessary to decide whether that evidence is admissible or not, although at the hearing I expressed the provisional view that it was inadmissible.

In my view, it is not appropriate or necessary in proceedings of this type to decide whether the Plan involved illegal conduct in breach of the National Health Act or whether HCF’s competitors will breach that Act if they move to counteract its strategies by adopting similar plans with other corporations and their employees.  It must be remembered that these proceedings comprise the judicial review of particular administrative action.  In my opinion, that review should be carried out (if possible) without, in effect, conducting a trial of HCF and its competitors.  To decide whether HCF and its competitors would be acting illegally in the manner alleged by the applicant would require extensive factual and legal investigation.  The terms and precise operation of the Plan and the anticipated competing plans would need to be scrutinised and the factual assertions summarised above would have to be the subject of evidence from all concerned parties.  That exercise could not, without breaching the principles of procedural fairness, be engaged in without giving at least HCF the opportunity to be heard. 

I consider that appropriate judicial review in this matter can be carried out without conducting such a trial.  I think this can be done by considering the question whether, in all the relevant circumstances of this matter, the Commission was bound to consider whether the public benefits which it identified would or might (in the sense of a reasonable possibility) involve illegal conduct.  The question is not whether the Commission is obliged to consider the legality of conduct or proposed conduct when it considers every Notification of such conduct.  However, where, as in this case, it is put on notice that the conduct may be illegal and there is a reasonable possibility that it may be illegal then the question is whether that is a matter which the Commission is bound to consider within the meaning of the principles explained in, for example, Minister for Aboriginal Affairs v. Peko-Wallsend Ltd (1986) 162 CLR 24 at pp 39-40. At p 45 Mason J made the following observation on the significance of constructive knowledge:

“It would be a strange result indeed to hold that the Minister is entitled to ignore material of which he has actual or constructive knowledge and which may have a direct bearing on the justice of making the land grant, and to proceed instead on the basis of material that may be incomplete, inaccurate or misleading.  In one sense this conclusion may be seen as an application of the general principle that an administrative decision-maker is required to make his decision on the basis of material available to him at the time the decision is made.  But that principle is itself a reflection of the fact that there may be found in the subject-matter, scope and purpose of nearly every statute conferring power to make an administrative decision an implication that the decision is to be made on the basis of the most current material available to the decision-maker.”

The likelihood or reasonable possibility that notified conduct or the benefits perceived as being likely to result from that conduct involve illegality is not, of course, a matter which the TPA expressly states that the Commission is bound to consider.  In  those circumstances one asks whether it is to be implied from the subject matter, scope and purpose of the TPA that, where (as in this case) the Commission is put on notice that conduct or proposed conduct may be illegal and there is a reasonable possibility that may be the case, it is bound to consider the question of illegality?

Section 2 of the TPA expresses the object of that Act in the following terms:

“2.   The object of this Act is to enhance the welfare of Australians through the promotion of competition and fair trading and provision for consumer protection.”

Section 47 which defines and prohibits exclusive dealing, is found in Part IV of the TPA which is entitled “Restrictive Trade Practices”.  I think it is reasonable to infer that the main purpose of Part IV is to promote economic efficiency by allowing the market, through the law of supply and demand, to determine the optimum allocation of society’s resources.  In Refrigerated Express Lines (Australasia) Pty Ltd v. Australian Meat and Live-Stock Corporation (No. 2) (1980) 44 FLR 455 at p.460 Deane J described Part IV of the TPA in these terms:

“The general purpose and scope of the Part can be described by saying that it contains provisions which proscribe and regulate agreements and conduct which are aimed at procuring and maintaining competition in trade and commerce.”

However, it can be seen that economic efficiency and the optimum allocation of society’s resources through the operation of the market is not the only purpose of Part IV; nobody has seriously suggested that to be the case.  Part VII in providing for Authorisations and Notifications allows for other matters of public interest to be taken into account.  The Commission, in discharging its various functions under the TPA, is required to assess the conduct of participants (or structural changes proposed by such participants) in a wide range of areas of economic activity. It can be seen from the decided cases that, almost as a matter of routine, the Commission is required to equip itself for that task by making itself familiar with every relevant aspect of the structure, the behavioural characteristics and the dynamics of the relevant market.  Usually that is required for the purpose of forming an opinion on the effect of the conduct or structural change on the state of competition in the market.  However, in the context of Authorizations and Notifications the TPA requires the Commission to go further than that and also to consider other matters of public benefit.  In so doing, there will in my view be occasions when the subject matter, scope and purpose of the TPA impliedly require the Commission to take into account whether the public benefits which are relied upon as justifying immunity from liability under that Act are to be achieved by conduct which may be prohibited by another Act, and are thus illegal.  In relation to exclusive dealing of the kind which would otherwise be automatically illegal under the TPA, (which includes the conduct involved in implementation of the Plan in this matter) the Commission may only give written notice under s 93(3A) if it is satisfied that the likely benefit to the public from the conduct or proposed conduct will not outweigh the likely detriment to the public from that conduct. The detriment to be weighed is not confined to detriment resulting from any lessening of competition but may be any detriment to the public.

Insofar as fair, correct and efficient administrative decision-making is concerned in this matter there is one fact which I consider to be of crucial importance.  That fact is that Messrs Solomon Brothers’ letter, dated 4 June 1996, to the Commission included the following information:

“As you would be aware, the system of community rating which is required of all registered health benefits organisations by their registration under the National Health Act requires that all plans which they offer must be available to all members of the community for the same price i.e. the aged and the young, and the healthy and unwell must all receive the same offer.  If funds are able to move into new markets in other States and obtain only healthy members, the stability of health insurers in those markets can be jeopardised.”

The Commission was thus put on notice that the Plan (which had been described both earlier in that letter and also in the documents enclosed in that letter) might contravene the National Health Act.  The Commission must be deemed to be aware that the provision of the services of health benefits insurance in Australia is the subject of regulation under the National Health Act.  In fact Amex, on page 3 of Notification N30722 itself referred to the requirement that health insurers be registered under that Act.  The fact that the relevant market is, in the Commission’s view, the Australian market for the provision of health insurance, adds further significance to the relevance of possible illegality when assessing the matter of alleged public benefit.  It is well known how important that market is to the actual provision of public and private health services.  It is difficult to think of a more important area of economic or social activity, and hence public concern.  If the conduct or proposed conduct is illegal (about which I express no opinion) then it is difficult to see how the benefit to the relevant employees of Amex and any other corporation can for the purposes of the TPA be regarded as a relevant “benefit to the public”.  Parliament, in those circumstances, (assuming illegality) has made clear its intention that the conduct is not to take place.  Accordingly, having been put on notice of this reasonable possibility, in my view the Commission was bound to consider whether the Plan could be legally implemented and whether other health funds in their move “to counteract the strategies of HCF” in the manner contemplated by the Commission, could also do so without contravening the National Health Act. Under s 93(5) of the TPA the Commission in satisfying itself for the purposes of s 93(3A) is required to seek such relevant information as it considers reasonable and appropriate. It may make a decision on the basis of any information so obtained and any other information furnished to it by the notifying corporation or any other person, or otherwise in its possession. I do not consider that it would have been an unwarranted burden on the Commission in the present circumstances for it to have sought some information about the legality or otherwise of the Plan. For example, an approach could have been made to the Commonwealth Department of Human Services & Health. In my opinion, by failing to give any consideration to the possible illegality of the only conduct which it saw as amounting to public benefit, the respondent, in the somewhat special circumstances of this case, failed to take a relevant consideration into account.

I now turn to the other grounds of review upon which the applicant relies in this matter.

Improper Exercise of Power  (Grounds 1.2, 2 and 3 of the Application)

(a)Taking irrelevant considerations into account

The applicant contended that the respondent had taken into account two irrelevant considerations.  These were said to be as follows:

.     the fact that the Plan provides health insurance to the employees of Amex at discounted retail rates when such conduct is prohibited by the National Health Act; and

.     the fact that the Plan would encourage other health funds to move to counteract the strategies of HCF and by promoting competition in the private health insurance market through other employers negotiating competitive health insurance premiums for their employees, a public benefit would thereby arise through employees generally obtaining lower premiums.  The applicant contended that this was an irrelevant consideration also because the anticipated competitive conduct would contravene the National Health Act. 

In my view these grounds raise the same matters as those which I have discussed above.  However, I should add that if conduct pursuant to the Plan and the anticipated likely promotion of competition are found not to involve illegality under the National Health Act, then in my opinion those factors would not be irrelevant considerations.  In relation to the benefit to Amex employees, I refer to the reasons which I have set out above.  In relation to the benefits identified as likely to flow from the promotion of competition I can see nothing in the subject-matter, scope and purpose of the TPA which would impliedly limit the factors which the Commission may consider as constituting likely benefits to the public, by excluding the benefit anticipated to the employees of other corporations.

(b)Failing to take relevant considerations into account (Ground 4 of the

Application)

Likely Detriment to the Public
I think that it is important to set out precisely how this ground was stated in the amended application.  (The amendment comprised the addition of the words shown below in italics).  It was as follows:

“4.  The Respondent’s decision to not issue a notice under Section 93(3A) of the Trade Practices Act, being based on a finding that the likely detriment to the public to arise from the Plan is limited to anti-competitive effects involving 2,200 Amex employees out of some 3.47 million Australians with private health insurance in a national market for health insurance was an improper exercise of the power conferred by the Act because: ...”
[there then followed various matters which the respondent was said to have “failed to take into consideration”.  I shall turn to those matters in a moment.]

By way of a preliminary comment, I should say that in my view this ground is basically misconceived. The decision which the applicant challenges by its application is the Commission’s decision not to give a notice under s 93(3A) of the TPA.  As part of the process of making that decision the Commission found as a fact that the likely detriment to the public in terms of anti-competitive effects of the Plan was restricted to 2,200 Amex employees in a situation where some 3.47 million people in Australia have private health insurance.  It is that finding of fact which the applicant seeks to attack under ground 4 of its application.  I think this becomes apparent when one turns to the particulars of what the respondent is said to have failed to take into consideration.  They can be summarised as follows:

.the Plan and other similar plans would cause public detriment by causing health insurers to offer low premiums to younger, employed persons and result in their becoming unable to comply with the statutory requirements of community rating, thereby causing higher premiums for non-employed people, the aged and the infirm;

.prior to October 1995 registration of health insurers was State-based;

.there were numerous insurers not operating nationally, so that the market for private health insurance is not a national market;

.public detriment to arise from the Plan and other similar plans should not have been considered by reference to a national market;

.health insurers operating predominantly in New South Wales or Victoria are likely to attract the health insurance business of employees of national employers through the Plan and similar plans and thereby cause public detriment by eroding from the contributor base of the applicant (which operates predominantly in Western Australia) large numbers of younger, employed, healthy people and making it necessary for the applicant, in order to comply with its community rating obligations, to increase its level of premiums.

Except to the extent that the first of the above particulars raises the matter of illegality under the National Health Act (which I have considered above), in my view all of the abovementioned complaints raise what I consider to be matters of fact going to the weight which the respondent gave to what it considered to be the likely detriment to the public from the conduct of the Plan.  The respondent decided, on the facts before it, to consider only anti-competitive detriment.  The applicant, under the guise of the above ground, is in my opinion, seeking to adduce additional evidentiary matters which go to the merits of the decision.  One of the matters which the Commission, as the decision-maker, was bound to consider was the likely detriment to the public.  Subject to my conclusion on the matter of possible illegality, it considered that matter.  There is no suggestion that the Commission’s decision was manifestly unreasonable in the sense that it was so unreasonable that no reasonable person could have so decided.

I have earlier in these reasons referred to the principles explained in Peko-Wallsend.  In my view, in this matter, apart from the question of illegality raised in the first of the five particulars, there is neither an express nor implied constraint in the TPA upon the Commission requiring it to take into account the other four particular factual contentions which the applicant sought to advance.  In effect, what these contentions amount to is an assertion that the Commission should have chosen a State market in which to assess the public detriment of lessening of competition rather than a national market.  It was quite clearly open on the evidence before it for the Commission to regard the relevant geographical market as being the national market.  It is largely for the Commission to determine which matters it regards as relevant and the comparative importance to be afforded to matters which it so regards, particularly in relation to the matter of market definition.  In that regard, the Commission’s situation is comparable to the respondent’s situation in Sean Investments Pty Ltd v. MacKellar (1981) 38 ALR 363 at p.375. The applicant in this case has, so it seems to me, adopted the same tactic as the applicant in that case of drawing up an exhaustive list of matters of conceivable relevance and attacking the decision on the ground that one or more of them was not taken into account.

Breach of the Rules of Natural Justice (Ground 5 of the Application)
In the application this ground is set out in the following terms:

“The Respondent, being aware of the [first Federal Court Application] at the time of making the decision and being aware of the effect of the decision on the Applicant’s claim in [those proceedings], breached the rules of natural justice in not seeking any submissions from the Applicant with respect to the subject-matter of the notification and the proposed decision.”

In its written outline of submissions, the applicant contended that the making of the decision breached the rules of natural justice in that the respondent failed to seek submissions from it before making a decision which, to the Commission’s knowledge, would render the first Federal Court Application nugatory. 

The respondent contended that, having regard to the provisions of sections 93 and 93A of the TPA, the rules of natural justice did not apply to a decision of the respondent under s 93(3A) of that Act. Alternatively, if the rules of natural justice did apply, the respondent contended that those rules did not require it to seek submissions from the applicant. The respondent contended that if natural justice was owed to anyone, it was owed to Amex. Finally, the respondent argued that there was no procedural unfairness to the applicant as it could have made, and still could make, submissions to the respondent about why it considers that the respondent should issue a notice under s 93(3A). The respondent could issue a notice under that section if it was then satisfied in the manner required.

Was there an obligation upon the Commission in the present matter to accord natural justice or procedural fairness to the applicant?  I turn first to the nature of the statutory power here being exercised.  In Kioa v. West (1985) 159 CLR 550 at p.619 Brennan J observed:

“The presumption that the principles of natural justice condition the exercise of a statutory power may apply to any statutory power which is apt to affect any interest possessed by an individual whether or not the interest amounts to a legal right or is a proprietary or financial interest or relates to reputation. It is not the kind of individual interest but the manner in which it is apt to be affected that is important in determining whether the presumption is attracted.

...

Therefore the presumption applies to any statutory power the exercise of which is apt to affect the interests of an individual alone or apt to affect his interests in a manner which is substantially different from the manner in which its exercise is apt to affect the interests of the public.  Of course, the presumption may be displaced by the text of the statute, the nature of the power and the administrative framework created by the statute within which the power is to be exercised.”

In my opinion the respondent’s decision was apt to affect the applicant’s interests in a manner which was substantially different from the manner in which its exercise was apt to affect the interests of the public. In practical terms, the decision to let Notification N30722 stand rendered the first Federal Court Application nugatory. The respondent knew that. Furthermore, the respondent knew that the applicant was a competitor of HCF in the relevant market. So far as the public might have had an interest in enforcing a claim for damages or the like arising out of any perceived contravention of s 47 which may have been nullified by the respondent’s decision, that interest was, in my opinion substantially different to that of the applicant as a competitor.

Furthermore, had the respondent decided to activate the procedures under s 93A and then serve a notice under s 93(3A) it would have been obliged to give a draft notice to Amex and to “each other interested person” - see s 93A(2). I think it is highly likely that the applicant would in those circumstances have been an “interested person” within that subsection. I do not regard that express provision as impliedly excluding (as the respondent contended) a requirement of procedural fairness to be extended to the applicant when the Commission is about to decide to let a Notification stand. An intention to exclude procedural fairness needs clear manifestation - see Kioa at p 584. To include express provision of such procedures where statutory protection from the application of s 47(1) is to be removed does not, in my view, give rise to a necessary implication that those procedures are to be excluded where the decision is to let the statutory protection remain. Nor can I find anything in the text of the TPA, the nature of the power and the administrative framework which would exclude an obligation to extend procedural fairness to the applicant. On the contrary, if procedural fairness had been extended to the applicant, I think it would have been quite likely that the quality of the decision-making process would have been enhanced. I refer to the respondent’s Information Circular No. 20 (1984) ATPR 55-020 and the extract set out at p.523 of Miller’s “Annotated Trade Practices Act” (18 ed) 1997. In that passage, the Commission refers to its view that s 93(5) does not confer any onus upon it and adds:

“Parties would serve their own interests by indicating their case as to competition and as to public benefit (if they think there are public benefit considerations).  The Commission would not propose to make the parties’ case for the purpose of then considering it; there needs to be reasonable co-operation in this matter having regard to the fact that the parties are the ones who know the relevant circumstances.”

The extent of the procedural fairness sought by the applicant was the right to make submissions to the Commission before the decision was made to let the Notification stand.  In my opinion, the content of the obligation to extend procedural fairness certainly goes that far. 

I agree with the respondent’s submission that it is and always has been open to the applicant to make submissions on this matter.  However, there is no evidence (until the respondent filed its written outline of submissions) that the Commission has ever communicated to the applicant its readiness to receive such submissions and reconsider the stance which it took when it made its decision on 7 August 1996.

Ground 6 of the Application
At a fairly late stage in the hearing of this matter (the applicant’s address in reply) counsel for the applicant sought and obtained leave to amend its application by adding the following ground:

“6.  The respondent failed to consider whether there was any public benefit or public detriment from the notified conduct and accordingly:
6.1  the decision was not authorised by the enactment;
6.2  the making of the decision was an improper exercise of the power conferred by the enactment.”

This amendment was made as a result of, and in response to, a submission made by the respondent that the conduct which was the subject of Notification N30722 was that of Amex.  Amex had simply agreed to pay a health allowance to its employees and to deduct and remit premiums if its employees took up an offer of membership in HCF. 

I accept that in terms of the application or non-application of s 47(1), the focus of s 47(10A) is on the conduct engaged in by a particular corporation. However the nett public benefit test provided by s 93(3A) of the TPA requires the Commission to consider the likely benefit to the public “from the conduct or proposed conduct” and the likely detriment to the public “from the conduct or proposed conduct” (emphasis added).  In that context it was, in my view, proper and appropriate for the Commission to have regard to the likely consequences which would flow from Amex’s conduct.  For the purposes of applying the nett public benefit test, it would be quite unreal, in my opinion, not to treat Amex’s conduct as an integral and very important part of the Plan as a whole.  In Notification N30722 itself, under the heading “Description of the conduct or proposed conduct”, it is the Plan as a whole which is notified.  I appreciate that such a description would not have the effect of extending the description of the conduct of Amex so notified, but it does demonstrate the artificiality of considering that conduct (for the purposes of the assessment of likely nett public benefit) in isolation from the reciprocal conduct of HCF.  I do not consider that the respondent failed to consider whether there was any likely public benefit or public detriment from the notified conduct.  I should emphasise that the applicant, somewhat reluctantly, added this ground only in response to the respondent’s submission which I have summarised above.  The added ground does not, in my opinion, provide any basis for judicial review of the Commission’s decision. 

Other Matters
The respondent submitted that s 47 of the TPA did not apply to Amex’s conduct in providing payroll deduction facilities and a health care allowance, for two reasons. First it was said that this did not constitute the supply of “services” within the meaning of ss 47(6) or 47(7) of the TPA because they were not benefits “provided, granted or conferred in trade or commerce” - see the definition of “services” in s 4 of the TPA. Secondly, so the respondent submitted, s 51(2)(a) which provides, relevantly, that in determining whether a contravention of s 47 has been committed, regard shall not be had to any act done in relation to the remuneration, conditions of employment, or working conditions of employees. Inherent in the first of these submissions was the proposition that the facilities and the payments to be provided and made by Amex did not constitute services at all, whether in trade or commerce or not - see, for example, the discussion of that matter in SWB Family Credit Union v. Parramatta Tourist Services Pty Ltd (1982) 48 FLR 445. That particular (inherent) argument was not expressly pursued. Nor were there any submissions on the question whether the application of ss 47(6) or (7) involves elements of futurity (“will supply” and “will acquire”) or compulsion. In my view, it is neither necessary nor appropriate for a court called upon to review an administrative decision made under s 93(3A) to decide the substantive question of whether s 47(1) would have any potential application to the notified conduct. That would involve a full-scale hearing of the factual circumstances of the operation of the Plan and extensive legal argument of the type seen in the various curial decisions to date on the question of third line forcing. The administrative decision not to give the notice referred to in s 93(3A) has the effect that even the potential application of s 47 to Amex’s conduct is removed. The function of the court under the ADJR Act in those circumstances, is, as I see it, to decide whether in making that decision, the Commission erred in any of the ways particularised in s 5(1) of that Act. The question whether or not there was any need for Amex to have notified its conduct to the Commission is not, in my opinion, an appropriate question for judicial review of the decision which the Commission reached in response to that Notification. As Burchett J explained in Walker v. Secretary, Department of Social Security (unreported, 3 July 1997, Judgment No. 589 of 1997, at p 10):

“... judicial review is not concerned with the making of the decision afresh upon material available at the hearing, but with the legal basis of the original decision, with legal questions which it raises, and with the legal sufficiency of the steps that led to its making.  As Lord Brightman said pithily in Chief Constable of the North Wales Police v Evans (1982) 1 WLR 1155 at 1173

“Judicial review is concerned, not with the decision, but with the decision-making process”.”

The Commission has a tradition of deciding authorisation and notification matters without adjudicating upon the question whether Part IV of the TPA would have any application in any event - see, for example Re Shell Co of Australia Ltd (1975) 1 ATPR 35.220 and the adoption of that policy by the Trade Practices Tribunal in Re QCMA at p 180 and Re Concrete Carters Association (Victoria) (1978) 31 FLR 193 at pp 245-246. It is not necessary for me to make any comment upon that policy. It is sufficient to state that in my opinion it is not the function of this Court when exercising its judicial review jurisdiction in relation to the Commission’s decision in this matter, to engage in the factual and legal investigation which would be involved in deciding whether Part IV of the TPA applied to the conduct notified.  Rather, that question is more appropriate for determination in the course of proceedings involving the exercise of the Court’s jurisdiction to hear applications arising under the TPA “on the merits” and to grant relief in respect of contraventions of that Act.  An example of the exercise of that jurisdiction is, of course, the first Federal Court Application.  In so deciding in this matter, I should not be seen to be contending that such a question should never be examined in the context of judicial review of administrative action.  I decide simply that it is not appropriate to do so in the present case for the reasons which I have just given.

Conclusions
For the above reasons, I consider that the Commission’s decision, to allow Notification N30722 to stand, was vitiated by two errors.  The first was not to consider the matter of possible illegality under the National Health Act, when it was put on notice of a reasonable possibility of such illegality. The second was not to accord the applicant an opportunity to make submissions to it before the decision was made. For the above reasons, in my view, justice requires that the decision be set aside and that the matter of whether the Commission should or should not give a written notice under s 93(3A) of the TPA in respect of Notification N30722 be remitted to the Commission for further consideration.  In the course of such further consideration the Commission should give consideration to the possible illegality arising out of the application of the National Health Act to the matters said to give rise to likely benefit to the public or detriment to the public.  In my provisional view, the respondent should pay the applicant’s costs, but I will hear counsel on that matter.

I certify that this and the preceding twenty-seven (27)
pages are a true copy of the Reasons for Judgment
of Justice Carr.

Associate:

Date:    25 July 1997

Counsel for the Applicant:                 Mr D H Solomon
Solicitors for the Applicant:               Solomon Brothers

Counsel for the Respondent:             Mr P R Macliver
Solicitors for the Respondent:            Australian Government Solicitor

Date of Hearing:  30 June 1997
Date of Judgment:  25 July 1997