Marnotta Pty Ltd (Receivers and Managers Appointed) and Secretary, Health and Ageing
[2005] AATA 426
•12 May 2005
Administrative
Appeals
Tribunal
DECISION AND REASONS FOR DECISION [2005] AATA 426
ADMINISTRATIVE APPEALS TRIBUNAL )
) No V2003/1152
GENERAL ADMINISTRATIVE DIVISION ) Re MARNOTTA PTY LTD (Receivers
and Managers Appointed)Applicant
And
SECRETARY, HEALTH AND AGEING
Respondent
DECISION
Tribunal Senior Member Joan Dwyer
Associate Professor John Maynard, MemberDate12 May 2005
PlaceMelbourne
Decision The Tribunal sets aside the decisions under review.
[sgd] Joan Dwyer
Senior Member
INDEX TO HEADINGS
INTRODUCTION 1
THE HEARING 8
BACKGROUND HISTORY
(i) Early History 13
(ii) The Site Audit of 25‑28 March 2003 16
(iii) The sanctions decision of 31 March 2003 18
(iv) Ms Morgan as Administrator 20
(v) Program of visits by authorised officers and by
Agency Assessors 27
STATUTORY CONCEPTS 31
(i)Serious risk to the health, safety and well-being of a person 32
receiving care (“serious risk”), Accreditation, ss 4.4, 4.6
(ii)Non-compliance of a minor or serious nature, s 65-2(a) 34
of the Act
(iii)Non-compliance which threatens the health, welfare or 37
interests of care recipients, s 65-2(c) of the Act
(iv)Immediate and severe risk to the safety, health or well-being
of care recipients, s 67-2
(v)Immediate or severe risk to the safety or well-being of care
recipients, s 42-5(3)(a)
(vi) Confusion as to the Concepts 42
THE NATURE OF A DECISION TO IMPOSE A SANCTION
(i) The legislative basis ss 65‑1, 65‑2, 67‑1 52
(ii) The nature of the discretion, relevant considerations to take
into account in exercising the discretion 55(iii) The objects of the Act 60
(iv) The aim or purpose of imposing sanctions 64
(v) The relevance of the appointment of receivers and
managers in making a sanction decision 68(vi) The length of time serious non-compliance has been present 71
WHETHER IT WAS APPROPRIATE TO IMPOSE A FURTHER SANCTION
ON 27 MAY 2003 76
(i)The matters specified in s 65-2 77
(ii)Other relevant matters 88
(a) The sanctions which had been imposed on 31 March 2003 89
(b) Dealings by the Department with Mr Chrapot, Ms Morgan
& AAC 90
(c) The appointment of the R&M 104
(d) The recommendation by Ms Thompson that Ms Bowman
consider imposing sanctions 121
(e) The resignation of Ms Morgan 125
(f) The proposed sale of the business of Tangerine 135
(g) Actions of Ms Thompson after Ms Morgan’s resignation 138
(h) Whether there was immediate and severe risk to the
health, safety or well-being of residents on 27 May 143
(i)Applicant’s submissions as to whether it was appropriate
to impose sanctions for non-compliance on 27 May 155
(1) The reasons for any non-compliance/serious risk, and the
attribution of responsibility for it;
(2) The steps taken to remedy any non-compliance/serious
risk;
(3) Whether any non-compliance/serious risk was continuing
or past, or in the process of being remedied;
(4) The likelihood of remedy or recurrence;
(5) Any relevant change of personnel including key personnel;
(6) The availability of funds to remedy any non-compliance/
serious risk;
(7) The consequences of any sanction.
CONCLUSION AS TO FURTHER SANCTION DECISION OF 27 MAY 2003 165
THE FURTHER SANCTIONS DECISION OF 5 JUNE 2003 168
EVENTS WHICH OCCURRED AFTER THE SANCTION DECISION OF 27
MAY 2003 170
(i) The nomination of Ms Harver 171
(ii) The audit on 28-30 May 2003 178
(iii) The decision of Ms Bowman 204
FINDINGS AS TO MATTERS TO BE CONSIDERED IN MAKING A
FURTHER SANCTIONS DECISION
(i)The qualifications, skills, experience and qualities of the
applicant’s senior Administrative and Clinical team 216
(a) Ms Harver 217
(b) Ms Richer 244
(c) Ms McCarthy 248
(d) Ms Stehn252
(ii)Financial matters 261
(iii)Progress by 5 June towards sale of Tangerine 286
WHETHER IT WAS APPROPRIATE TO IMPOSE FURTHER SANCTIONS
ON 5 JUNE 2003 301
(i) The matters specified in s 65-2 of the Act
(a) Whether the non-compliance is of a minor or serious nature 303
Item 2.10 – Nutrition and Hydration 305
Item 2.4 – Clinical Care 334
(b) Whether the non-compliance has occurred before, and, if
so, how often 349
(c) Whether the non-compliance threatens the health, safety or
well-being of care recipients 351
(d) Whether the approved provider has failed to comply
with any undertaking to remedy the non-compliance 354
(e) Any other matters specified in the Sanctions Principles 355
(ii) Other relevant matters including s 65-2(c) consideration
(a) Was there an immediate and severe risk to the safety,
health or well-being of care recipients (s 67-1(2) of the Act),
or does the non-compliance threaten the health, welfare or
interests of care recipients, (s 65-2(c) of the Act)? 356
(b) Staffing issues 406
CONCLUSION AS TO FURTHER SANCTIONS DECISION OF 5 JUNE 2003 415
CONCLUDING COMMENTS 428 432
HEALTH AND AGED CARE – aged care facility – administrator appointed under earlier sanction after findings of serious risk in clinical care and nutrition and hydration – decision to revoke provisional allocation of 5 low care places – receivers and managers appointed to approved provider – whether appropriate to impose further sanction – consideration of matters specified in Act – appropriate to consider other matters relevant to the objects of the Act – whether immediate and severe risk to the safety, health or well-being of care recipients – finding that not appropriate to impose sanction on approved provider on 27 May 2003 – decision to revoke approval as approved provider and to revoke all allocated places made 5 June 2003 – new administrator and team in place – improvements made to clinical care and nutrition and hydration – no immediate and severe risk to the safety, health or well-being of care recipients – finding that not appropriate to impose further sanctions on 5 June 2003 – decisions under review set aside.
WORDS AND PHRASES – serious risk to the health, safety and well-being of a person receiving care – non-compliance of a minor or serious nature – non-compliance which threatens the health, welfare or interests of care recipients – immediate and severe risk to the safety, health or well-being of care recipients – immediate or severe risk to the safety or well-being of care recipients.
Aged Care Act 1997, ss 42-1, 42-5, 54-1, 54-2, 65-1, 65-2, 67-2, 85-5
Corporations Act 2001, s 417.
Accreditation Grant Principles 1997, ss 4.4, 4.6
Quality of Care Principles 1997.Sanctions Principles 1997, s 22.17
Minister for Aboriginal Affairs and Another v Peko – Wallsend Limited and Others [1985-1986] 162 CLR 24
Re Neviskia Pty Ltd and Secretary Department of Health and Aged Care [2000] 32 AAR 129
Riverside Nursing Care Pty Ltd and Secretary, Dept of Health and Aged Care [2003] AATA 248
Riverside Nursing Care Pty Ltd v Bishop & Ors (2002) 63 ALD 27Saitta v Commonwealth [2001] FCA 817
REASONS FOR DECISION
12 May 2005 Senior Member Joan Dwyer
Associate Professor John Maynard, MemberINTRODUCTION
1. This is an application under s 85-8 of the Aged Care Act 1997 (“the Act”) for review of two reviewable decisions made under s 65-1 of the Act and confirmed on reconsideration under s 85-5. Each of those decisions imposed sanctions on the “approved provider” under s 7-1 of the Act, responsible at the time for the provision of aged care at Tangerine Lodge (“Tangerine”). Both decisions were reviewed and confirmed on 19 September 2003 (T2A and 2B). As is explained in these reasons, we have decided that both decisions should be set aside.
2. The applicant in this matter is Marnotta Pty Ltd (Receivers and Managers Appointed) (“Marnotta R&M”). On 21 May 2003, Mr Secatore and Mr Horne of Bentley’s Chartered Accountants (“Bentley’s”) were appointed Receivers and Managers (“R&M”) to Marnotta Pty Ltd (“Marnotta”), which was the “approved provider”, providing care to the residents at Tangerine.
3. The Act sets up a scheme for payment of Commonwealth subsidy to an “approved provider” of residential care (s 42-1 of the Act), in respect of allocated places (s 42-7 of the Act). In order to ensure an appropriate standard of care is provided to residents of aged care facilities, the Act provides that care must comply with Accreditation Standards (ss 54-1(d) and 54-2 of the Act). So far as relevant to this matter, those Standards are found in Schedule 2 of the Quality of Care Principles 1997. Where there is non-compliance with the accreditation standards (“non-compliance”), and the Secretary, Department of Health and Ageing (“the Secretary”) is satisfied that it is appropriate to do so, the Secretary may impose sanctions on an approved provider under s 65-1 of the Act. In doing so, the Secretary must comply with Division 67 of the Act.
4. There are thus two possible issues raised by this application. The first is whether it was appropriate to impose sanctions on the approved provider on the days the two sanctions decisions were made. If the answer to that question were yes, it would be necessary to consider whether the particular sanctions which were imposed were the most appropriate to be imposed at that time. In view of our decision that it was not appropriate to impose sanctions on the approved provider on either of the days sanctions were imposed, it is not necessary for us to consider either the second issue of what sanctions were appropriate, or the more complex questions arising in respect of s 67-1 of the Act.
5. The reviewable decision of 27 May 2003 (T92 p611) imposed the following sanction on Marnotta R&M in respect of Tangerine:
I have decided to revoke some of the places allocated to you, in particular the provisional allocation of 5 low care places allocated to you on 11 January 2001.
6. The reviewable decision of 5 June 2003 (T115 p742) imposed the following sanction on Marnotta R&M in respect of Tangerine:
I have decided to:
1.Revoke your approval under Part 2.1 of the Act as an Approved Provider of aged care services (s.66-1(a)); and
2. Revoke the allocation of all of the 45 places allocated to Marnotta (s.66-1(d)).
7. The decision of 27 May 2003, which revoked provisionally allocated places, which were not being used at the time, had little or no direct impact on the day to day running of Tangerine, or on the care of residents. The decision of 5 June 2003, which revoked the “approved provider” status of Marnotta, and the allocation of all places at Tangerine, meant that Marnotta was no longer entitled to receive Commonwealth subsidy for the residents at Tangerine. That fact, together with the other actions taken by the Department of Health and Ageing (“the Department”) such as telephoning residents’ relatives the previous evening to speak with them about transferring the residents to other facilities and notifying media of events at Tangerine (R13, Vol 2, p31), led to the transfer of care of the residents to the Anglican Aged Care Services Group (“AAC”) from 6 June 2003. All residents were removed from Tangerine over the period 6-24 June, and it was closed as an aged care facility. The premises are now used as a special accommodation facility operating under state legislation.
THE HEARING
8. The hearing commenced in late November 2004 and went for four weeks before Christmas. It then resumed over two weeks in February 2005. At the commencement of the hearing Ms Hampel SC with Ms Brophy of Counsel appeared for the applicant, Marnotta R&M. When the hearing resumed in 2005, Ms Kennedy SC appeared with Ms Brophy for the applicant. Mr Gunst QC appeared with Mr Gray of Counsel for the respondent.
9. The Tribunal had before it over 900 pages of documents (“the T‑documents”) lodged pursuant to s 37 of the Administrative Appeals Tribunal Act 1975 (“the AAT Act”) and a large number of exhibits lodged during the hearing. The Tribunal heard evidence from 13 witnesses for the applicant and 10 witnesses for the respondent.
10. As in Re Neviskia Pty Ltd and Secretary Department of Health and Aged Care (2000) 32 AAR 129, the hearing proceeded with the respondent’s witnesses giving evidence first.
11. We agree with a submission made by Ms Hampel during the hearing, that it was not necessary for the respondent to call as many witnesses as were called, as none of the findings in the audits prior to 21 May 2003, the date when R&M were appointed, were challenged in this hearing.
12. There were two reasons why the accuracy of the reports prior to 21 May 2003 was not challenged by Marnotta R&M. First, it was agreed by the expert nursing witnesses for Marnotta R&M that when they first arrived at Tangerine on 28May 2003, there were many problems with the care being provided to residents of the facility. Although the relevant documents show that there had been some improvements, many of the problems identified by the Agency in a Serious Risk Report of 28 March 2003 (T4) remained. Secondly, Marnotta underwent many changes in management and personnel once the R&M were appointed. The thrust of the case for the applicant was that, because of the significant changes made after the R&M were appointed, the decisions under review were not the correct and preferable decisions when they were made. We find that case was made out.
BACKGROUND HISTORY
(i)Early History
13. Tangerine opened as an aged care residential service on 12 December 2002. The premises were newly built and were owned by Makemore Pty Ltd and Verdian Pty Ltd (“the landlord companies”). Mr Chrapot, a director of Verdian Pty Ltd, managed the joint venture.
14. The premises were leased to Marnotta. From December 2002, the directors of Marnotta were Ms Savage and Ms Hoskins. Ms Savage and Ms Hoskins were also directors of Supported Residential Services Pty Ltd (“SRS”), which operated three other aged care facilities, two of which were also covered by the Act. The other provided hostel accommodation under state legislation. Two other companies of which Mr Chrapot was a director, Edjawl Investments and Diande Pty Ltd, were creditors of Marnotta and SRS, and held a charge over the assets and undertakings of Marnotta.
15. The residents who moved into Tangerine in December 2002 were mainly transferred from another facility, Abalene Private Nursing Home (“Abalene”), which had formerly been operated by a company under the direction and management of Mr Arnhold. That company, of which he was a director, was a creditor of Marnotta. There was an existing accreditation for Abalene until 20 June 2003. It was transferred to the new premises, which had been inspected and approved before the residents were transferred to Tangerine. There were 45 residents at Tangerine, occupying 30 allocated high care places and 15 allocated low care places. There were also another 5 provisionally allocated low care places, which were not being used.
(ii) The Site Audit of 25-28 March 2003
16. In order to decide whether to give Tangerine further accreditation from 21 June 2003, a Site Audit was conducted by the Agency on 25-28 March 2003.
17. The Agency made a Serious Risk Report to the Department on 28 March. It stated that it had found evidence that Marnotta had not complied with the Accreditation Standards “and that serious risk exists to the health, safety or well-being of persons receiving care at Tangerine” (“serious risk”) (T4, pp96-104).
(iii) The sanctions decision of 31 March 2003
18. The Serious Risk Report of 28 March 2003 recommended that the Secretary should impose sanctions on Marnotta. On 31 March 2003, Ms Thompson as a delegate of the Secretary, notified Marnotta that she had decided to impose two sanctions as follows (T8, p113-4):
Revoke – Appointment of administrator
66-1(a) and 66-2(1)(a)(iv) Revoke approval under Part 2.1 as a provider of aged care services, but the revocation will not take effect if it is agreed within a specified period to appoint an administrator with nursing experience approved by the Commonwealth to administer Tangerine Lodge. The appointment must be in accordance [with] section 66A-3 of the Act and with the requirements of the Sanctions Principles.
If you agree to appoint an administrator with nursing experience to the Service in accordance with the above sanction, section 66A-3 of the Act states that you must nominate an administrator from the administrator panel established by the Secretary. A list of panel members and their contact details is at Attachment A. Your nomination must be given to the Secretary within 5 working days of this Notice being given to you. The Secretary will then consider approval of your nominee in accordance with the Sanctions Principles. If the Secretary approves your nominee, you must appoint the person within one working day of being informed of the approval.
You should note that it is your responsibility under Part 4.3 of the Act to comply with any agreement you make in relation to this section.
…
Restrict approval – new care recipients
66-1(c)(i) Restrict approval under Part 2.1 as a provider of aged care services to care recipients to whom care is being provided at the time the sanction takes effect.
The consequence of this sanction is that you will not be eligible to receive Commonwealth subsidy for new residents admitted to the Service after the date this sanction takes effect and for the period of the sanction.
Time Period
This sanction will take effect for a period of 6 months commencing on 1 April 2003 and ceasing to have effect on 30 September 2003.
19. The Notice of 31 March 2003 attached a list of “Administrator Panel Members” (appointed under s 66A-1 of the Act), and a list of Profiles of Victorian Panel members. Seventeen of the Panel Members on that list appear to have nursing experience, which was required by the sanction as to appointment of an Administrator.
(iv) Ms Morgan as Administrator
20. By 1 April, Ms Savage had arranged to interview Ms Morgan, one of the nursing administrators on the administrator panel. On 2 April, an Agency Support Contact Record stated (T12, p145-149):
The service’s director reported that a nurse administrator has been appointed as required by the sanctions imposed by the Department of Health and Ageing. The nurse administrator is developing an action plan to be submitted to the Department and the Agency within five days.
21. The nomination of Ms Morgan was approved by the Department by letter dated 14 April 2003 (T21, p218). An agreement with her was signed on 17 April 2003 (T26.2, p235). It appears that she was working on the task earlier than that. An Agency Support Contact Record of a site visit on 9 April 2003 reported that an Administrator had been appointed for six months and had “commenced a review of management systems and clerical documentation” (T17.3).
22. By 27 May 2003, Ms Morgan had been working as Administrator at Tangerine for over seven weeks. It was the evidence of the experienced nursing witnesses and of Ms Thompson that serious risk should be able to be addressed by a skilled Administrator with appropriate staff within two to three weeks. Ms Morgan had not succeeded in addressing serious risk as to either standard 2.4 clinical care, or standard 2.10 nutrition and hydration, by the time she left her position, resigning by telephone without notice on 25 May 2003, and confirming her resignation by letter the following day.
23. Ms Morgan told Mr Chrapot, before he took steps to have the R&M appointed that she had removed serious risk. She wrote a progress report dated 16 May 2003 (T58(b)), which was delivered to the Department, and she told the Department that she had removed serious risk. It was after Agency assessors reported that serious risk had not been removed, that Ms Thompson recommended the imposition of further sanctions in a letter to Ms Bowman dated 22 May (T75).
24. Ms Morgan seems to have told assessors and authorised officers (“AOs”) (also called compliance officers) of the Department how she planned to address serious risk issues. However, she did not achieve the removal of serious risk, even though she was on site for more than seven weeks. Because we did not hear evidence from Ms Morgan, Ms Savage or Ms Hoskins, it is not possible for us to make any findings as to the reasons why serious risk had remained in place for so long.
25. Counsel for the respondent suggested that it was because the directors of Marnotta had not provided sufficient support and financial resources to implement Ms Morgan’s planned actions. Other evidence suggests it could have been because Ms Morgan was not very often at Tangerine, or because she did not have leadership skills. Ms Kiss, who was a Personal Care Assistant (“PCA”) at Tangerine from the time it opened until it closed, gave evidence. She said that Ms Morgan was not “on the floor” while she was Administrator of Tangerine. She said she was often in the office. Ms Kiss said of Ms Morgan, “I never saw her give me or others supervision”. In addition, very few of the many Departmental Site Visit Reports and Agency Support Contact Records during the period Ms Morgan was Administrator at Tangerine show her to have been present at the facility at the time of the visit.
26. By the date of the first of the two decisions under review, 27 May 2003, the R&M had been appointed on 21 May 2003, and Ms Morgan had left the position of Administrator, without notice, on 25 May 2003.
(v)Program of visits by authorised officers and agency assessors
27. Two other processes were commenced as a result of the Serious Risk Report of 28 March 2003. The arrangement between the Agency and the Department was that, once serious risk was identified by the Agency, AOs would attend the facility regularly for “Spot Checks” as to the safety and well-being of the residents. Many of the AOs are nurses. They check the matters relating to clinical care. At the same time there were also frequent visits called “Support Contact Visits” by assessors from the Agency to monitor any improvements. The only complaint by the applicant was as to the last Site Audit on 28, 29 and 30 May 2003, which is discussed in more detail later in these reasons.
28. The responsibilities of AOs and assessors require them to consult with the care staff and management of the facility. While this is necessary, we find that it did impact on the time available to staff for the performance of their other duties. It also may distract staff from the implementation of improvements, particularly when up to three visits are made in one day, as for example, on 17 May 2003 (T55 and T56) and on 24 May (T82, T83, T84).
29. As set out in Appendix B of the Applicant’s Statement of Facts and Contentions, there were 27 “Spot Checks” conducted by the Department, and 11 ”Support Contact Visits” conducted by the Agency, at Tangerine, between 4 April and 27 May, as well as a number earlier. Visits were frequently of two or three persons, and they lasted for up to two to three hours.
30. We are pleased to learn from Ms Thompson’s evidence that there has been a change in procedure so that visits are now only made by Agency assessors (trans, p640). We consider that will be less disruptive.
STATUTORY CONCEPTS
31. There are a number of concepts used in the Act and in the Accreditation Principles, which require consideration. Unfortunately the evidence made it clear that there was confusion as to the meaning and relevance of those concepts. It is important to clarify that issue at the commencement of these reasons.
(i) Serious risk to the health, safety and well-being of a person receiving care (“serious risk”), Accreditation Grant Principles, ss 4.4, 4.6.
32. Under ss 4.4 of the Accreditation Grant Principles 1999 (“Accreditation Principles”), a report must be made to the Secretary when the Agency finds evidence of serious risk at an audit. Similar provisions apply if evidence of serious risk is found by the Agency at other times (s 4.6 Accreditation Principles). From 28 March there were two matters being considered, first, the application by Marnotta for re-accreditation by the Agency, and, secondly, action by the Department arising from the Agency’s findings of serious risk and non-compliance at Tangerine.
33. The term “serious risk” is not used in the Act and has no special significance in the statutory scheme for the imposition of sanctions.
(ii) “Non-compliance of a minor or serious nature”, s 65-2(a) of the Act.
34. Section 65 of the Act provides that sanctions may be imposed on an approved provider for non-compliance with its responsibilities under Parts 4.1, 4.2 or 4.3 of the Act. Those parts cover Quality of Care, User Rights and Accountability.
35. Section 65-2 sets out the matters a decision-maker must consider in deciding whether it is appropriate to impose sanctions. The first matter under s 65-2(a) is “whether the non-compliance is of a minor or serious nature”. There is no definition in the Act of those terms.
36. “Non-compliance of a … serious nature” is not necessarily the same as “serious risk”, as identified by the Agency. However, it seems reasonable to accept and act on the basis that non-compliance found by the Agency to constitute evidence of a “serious risk” is “non-compliance of a … serious nature”, or serious non-compliance.
(iii) “Non-compliance [which] threatens the health, welfare or interests of care recipients”, s 65-2(c) of the Act;
(iv) “Immediate and severe risk to the safety, health or well-being of care recipients”, s 67-1(2) of the Act;
(v) “Immediate or severe risk to the safety or well-being of care recipients”, s 42-5(3)(a) of the Act.
37. Concepts (iii), (iv) and (v) each use different language to refer to a threat or risk to care recipients. They also use slightly different terms to describe the particular interests of care recipients which are threatened or at risk. It is difficult to understand what significance, if any, there could be to the change from “safety or well-being” in s 42-5(3)(a) to “safety, health or well-being” in s 67-1(2). We will not dwell on that question.
38. However, we consider that there is significance in the contrast between the word “serious” in s 4.4 of the Accreditation Grant Principles and in s 65-2(a) of the Act on the one hand, and the use of the words “immediate” or/and “severe” risk in ss 42-5(3) and 67-1(2) of the Act.
39. The Tribunal in Riverside Nursing Care Pty Ltd and Secretary, Department of Health and Aged Care [2003] AATA 248 (“Riverside (2003)”) referred to those differences in terminology and set out the dictionary definitions of “serious” and “severe” at paragraphs 339, 340 and 349, as follows:
…[W]e have looked to the manner in which the words “serious” and “severe” have been interpreted in the past. Taking first the word “serious”, its ordinary meanings include:
“… 3 Important, grave; having (potentially) important, esp. undesired, consequences; giving cause for concern; of significant degree or amount, worthy of consideration …” (The New Shorter Oxford English Dictionary, 3rd edition, 1993)
“… 5. weighty or important: a serious matter. 6. giving cause for apprehension; critical: a serious illness. …” (The Macquarie Dictionary, 2nd edition, 1991)
340. The ordinary meanings of the word “severe” include those suggesting rigorous, strict or harsh attitudes or treatment but also include those that relate to intensity. It has among its ordinary meanings:
“III7 Disagreeably intense, unpleasantly extreme; (esp. of bad weather, illness, injury, etc.) causing hardship, pain or suffering by its degree of extremity. M17. 8 Hard to sustain or endure; making great demands on one’s powers or resources; arduous; (of terrain etc.) negotiable only with exertion or skill …” (The New Shorter Oxford English Dictionary, 3rd edition, 1993)
“… 1. harsh; harshly extreme: severe criticism or laws. … 3. grave: a severe illness. … 5. causing discomfort of distress by extreme character or conditions, as weather, cold, heat, etc.; …6. hard to endure, perform, fulfil, etc.: a severe test. …” (The Macquarie Dictionary, 2nd edition, 1991)
…
349. … When used in s. 65-2(a), the levels of concern about non-compliance are divided into two: minor and serious. There is no “silent” third group of the “severe” for to do so would be to defeat the purpose of the provision as it could be read as allowing those non-compliances of the most concern to be ignored. The intention is that all non-compliance be taken into account and weighed as to the level of concern that it causes. The distinction is between non-compliance that can be regarded as comparatively unimportant or insignificant and that which can be regarded as “‘very considerable’ and certainly more than ‘significant’ or ‘marked’”. It is only those at the upper end of that category that are regarded as “severe” for the purposes of s. 67‑1(2). [emphasis added]
40. We agree with the view that the word “severe” in relation to “risk” relates to the upper end of the category of serious risk. The definitions point to a risk that is disagreeably intense, unpleasantly extreme or causing hardship, suffering or pain by its degree of extremity. The Tribunal in Riverside (2003) also considered the meanings of the words “immediate” and “risk” saying, at paragraphs 377 and 378:
377. In its context, the word “immediate” is concerned with time and bears its ordinary meanings. In so far as those meanings are relevant, they include:
“… 4 Present or nearest in time; most urgent, occurring or taking effect without delay; done at once, instant. …” (The New Shorter Oxford English Dictionary, 3rd edition, 1993)
“… 1. occurring or accomplished without delay; instant: an immediate reply. 2. pertaining to the present time or moment: our immediate plans. 3. having no time intervening; present or next adjacent: the immediate future. …” (The Macquarie Dictionary, 2nd edition, 1991)
378. That leaves only the word “risk” whose ordinary meanings include:
“…1 Danger; (exposure to) the possibility of loss, injury, or other adverse circumstance. …” (The New Shorter Oxford English Dictionary, 3rd edition, 1993)
… 1. exposure to the chance of injury or loss; a hazard or dangerous chance …” (The Macquarie Dictionary, 2nd edition, 1991)
41. We find the word “immediate” in ss 67-1(2) and 42-5(3)(a) of the Act limits the relevant risk to one which is “instant” or “most urgent”, or “taking effect without delay” or “no time intervening”. Section 67-1(2) of the Act is relevant only to a risk that is at the upper end of the category of serious risk in the senses set out in paragraph 40.
(vi) Confusion as to the concepts
42. It became apparent during the hearing that Ms Thompson regarded the concepts of “serious risk” and the length of time “serious risk” had been present, as of great significance in the making of a decision as to whether it was appropriate to impose, or to recommend the impose of sanctions. If we regard her use of the term “serious risk” as short hand for “non-compliance of a serious nature” under s 65-2(a), that does not create great difficulty.
43. Ms Thompson seemed also to regard “serious risk” as equivalent to a “threat to the health, welfare or interests of care recipients” (s 65-2(c) of the Act). We consider that and s 65-2(a) and s 65-2(c) address different concepts. Section 65-2(a) looks to the nature of the non-compliance and whether it is comparatively insignificant or very considerable and definitely significant. Section 65-2(c) requires some judgement of the effect of the non-compliance on the health, welfare or interests of care recipients.
44. However, the confusion by Ms Thompson of “serious risk” with “an immediate or severe risk to the safety or well-being of care recipients” under s 42-5(3)(a) of the Act seems to have been more significant. It had significant effects in the period from May to June 2003, and also during the hearing, when the confusion was not clarified during the evidence of a number of witnesses.
45. The confusion of “serious risk” with “immediate or severe risk” had most effect in relation to s 42-5 of the Act, which provides for a deemed accreditation in exceptional circumstances. On 19 May a request was made by Mr Hogan of Middleton’s, the solicitor for Marnotta, for a determination under s 42-5 of the Act (T58, p437). Section 42-5, so far as relevant, provides:
SECT 42-5 Determinations allowing for exceptional circumstances
(1) The Secretary may determine, in accordance with the Residential Care Subsidy Principles, that a residential care service is taken, for the purposes of this Division, to meet its *accreditation requirement. However, the Secretary must first be satisfied that exceptional circumstances apply to the service.
Note: Refusals to make determinations are reviewable under Part 6.1.
…
(3) The Secretary must not make a determination if:
(a) there is an immediate or severe risk to the safety or well-being of care recipients to whom residential care is being provided through the residential care service; or
…
46. So far as the evidence reveals, the application was never processed and no decision was ever made on the request. Had a decision been made refusing the application, it would have been reviewable under s 85 of the Act (item 37).
47. The evidence suggests that the reason no decision was made was probably because Ms Thompson did not understand that s 42-5 could apply even when serious risk was continuing, provided there was no “immediate” or “severe” risk. The evidence shows she repeatedly advised the relevant parties that s 42-5 could not assist an approved provider, unless serious risk was removed. Her assertions were accepted because of her position as Acting Manager of the Department in Victoria, and as a delegate for the making of decisions.
48. The error arose frequently during the hearing. For example, Ms Thompson said in her statement at paragraphs 28 and 42:
The issue I reiterated to Brenda Savage and Lorraine Hoskins was that if serious risk remained in place, it would be impossible for the Department to consider exceptional circumstances under the Act (to allow for a further period of funding).
…
I told the Receivers and Mangers that an administrator needed to be in place. Basically, the discussion involved me pleading with them to fix the serious risk, and pointing out to them that Tangerine’s accreditation period was about to run out and that they couldn’t be considered for exceptional circumstances when there was still serious risk. Under the Act, the Department cannot fund a service which is not accredited (or re-accredited as the case may be). However, as I explained in paragraph 28 of this statement, there are mechanisms under the Act which allow the Department to grant “exceptional circumstances” to a service, allowing that service to continue to receive funding for up to 6 months even though it is not accredited. [emphasis added]
49. Similarly, the Minutes of a meeting with the Marnotta R&M on 26 May show Ms Thompson saying (T87, p595):
Exceptional Circumstances can only be considered if Serious Risk addressed.
50. In her evidence, Ms Thompson said (trans, p512):
I was certainly hopeful that was - that was part of discussions we had with the receiver/managers along the way, which was what would be their plan if, for example, after accreditation, you know, unless there was a change to the decision around accreditation. What would be their plan to maintain services if serious risk was still in place and therefore we hadn't been able to grant exceptional circumstances. [emphasis added]
51. For the reasons set out above, Ms Thompson’s view that the Department was unable to grant an exceptional circumstances deemed accreditation was wrong.
THE NATURE OF A DECISION TO IMPOSE A SANCTION
(i) The legislative basis
52. Before examining each of the sanctions decision in detail, it is necessary to consider the legislative basis and the process of making such decisions. Sections 65-1 and 65-2 provide as follows:
SECT 65-1 Imposition of sanctions
The Secretary may impose sanctions (see Division 66) on an approved provider if:
(a) the approved provider has not complied, or is not complying, with one or more of its responsibilities under Part 4.1, 4.2 or 4.3; and
(b) the Secretary is satisfied that it is appropriate to impose sanctions on the approved provider (see section 65-2); and
(c) the Secretary complies with the requirements of Division 67.
SECT 65-2 Appropriateness of imposing sanctions
In deciding whether it is appropriate to impose sanctions on an approved provider for non-compliance with one or more of its responsibilities under Part 4.1, 4.2 or 4.3, the Secretary must consider the following:
(a) whether the non-compliance is of a minor or serious nature;
(b) whether the non-compliance has occurred before and, if so, how often;
(c) whether the non-compliance threatens the health, welfare or interests of care recipients;
(d) whether the approved provider has failed to comply with any undertaking to remedy the non-compliance;
(e) any other matters specified in the Sanctions Principles.
53. Section 66-1 sets out the sanctions that may be imposed. It is not necessary to set them out, as there is no issue that the sanctions imposed by both decisions were “sanctions that may be imposed” under the Act. We are not of the view that it would have been more appropriate to have imposed any of the other sanctions set out in s 66-1 at the relevant times.
54. Division 67 of the Act is referred to in s 66-1 and therefore is relevant. Sections 67-1 provides:
SECT 67-1 Procedure for imposing sanctions
(1) The Secretary must not impose sanctions on an approved provider for not complying with one or more of its responsibilities under Part 4.1, 4.2 or 4.3 unless the Secretary has completed each of the following steps:
(a) giving to the approved provider a notice of non-compliance (see section 67-2);
(b) giving to the approved provider:
(i) a notice of intention to impose sanctions (see section 67-3); or
(ii) a notice to remedy the non-compliance (see section 67-4); or
(iii) a notice of intention to impose sanctions in respect of a specified part of the non-compliance (see section 67-3) and a notice to remedy the remainder of the non-compliance (see section 67-4);
(c) giving to the approved provider notice of the Secretary's decision on whether to impose sanctions (see section 67-5).
(2) However, paragraphs (1)(a) and (b) do not apply if the Secretary is satisfied that, because of the approved provider's non-compliance, there is an immediate and severe risk to the safety, health or well-being of care recipients to whom the approved provider is providing care.
(ii)The nature of the discretion, relevant considerations to take into account in exercising the discretion
55. The first issue concerns the nature of the Secretary’s discretion to impose sanctions under s 65-1. Ms Kennedy, at paragraph 2.4 of her closing submissions, submitted that the Tribunal, standing in the shoes of the Secretary, has two discretions. First, the specific discretion under s 65-1(b) of the Act as to whether it is appropriate to impose sanctions on the approved provider, and secondly a further wide discretion, whether to impose a sanction, even if the three part cumulative test in s 65-1 is not met.
56. Ms Kennedy submitted that the nature of the wide discretion is as described by the High Court in Minister for Aboriginal Affairs and Another v Peko – Wallsend Limited and Others [1985-1986] 162 CLR 24 at pages 39-40:
What factors a decision-maker is bound to consider in making the decision is determined by construction of the statute conferring the discretion. If the statute expressly states the considerations to be taken into account, it will often be necessary for the court to decide whether those enumerated factors are exhaustive or merely inclusive. If the relevant factors – and in this context I use this expression to refer to the factors which the decision-maker is bound to consider – are not expressly stated, they must be determined by implication from the subject-matter, scope and purpose of the Act. In the context of judicial review on the ground of taking into account irrelevant considerations, this Court has held that, where a statute confers a discretion which in its terms is unconfined, the factors that my be taken into account in the exercise of the discretion are similarly unconfined, except in so far as there may be found in the subject-matter, scope and purpose of the statute some implied limitation on the factors to which the decision-maker may legitimately have regard.
57. Mr Gunst submitted that there is only one discretion, namely whether it is appropriate to impose sanctions under s 65-1. At times, he seemed to be submitting that the Secretary should only consider the factors in s 65-2. However, in paragraph 37 of the Respondent’s Final Address, it is acknowledged that the Act does not exclude consideration of matters not set out in s 65-2. Mr Gunst did not dispute that if, the list in s 65-2 is not exhaustive, the High Court decision in Peko-Wallsend indicates that matters consistent with the objects of the Act may be taken into account in the exercise of the discretion.
58. We do not accept Ms Kennedy’s submission that the word “may” and the words, “is satisfied that it is appropriate” in s 65-1 provide two separate discretions. In our view, reading s 65-1 as a whole, it provides power to the Secretary to impose sanctions, if the Secretary is satisfied that it is appropriate to impose sanctions.
59. In regard to the width of the discretion, that is to say, the matters the Secretary may consider, we reject any submission that the matters set out in s 65-2 are the only matters the Secretary may consider. In our view, s 65-2 sets out a list of five matters which the Secretary must consider, but the Secretary is at liberty to consider any other matters relevant to the objects of the Act.
(iii)The objects of the Act
60. The objects most relevant to this hearing are set out in s 2-1(1)(a), (b) and (c). They provide:
(1) The objects of this Act are as follows:
(a) to provide for funding of *aged care that takes account of:
(i) the quality of the care; and
(ii) the *type of care and level of care provided; and
(iii) the need to ensure access to care that is affordable by, and appropriate to the needs of, people who require it; and
(iv) appropriate outcomes for recipients of the care; and
(v) accountability of the providers of the care for the funding and for the outcomes for recipients;
(b) to promote a high quality of care and accommodation for the recipients of *aged care services that meets the needs of individuals;
(c) to protect the health and well-being of the recipients of aged care services;
61. We consider that the objects of the Act set out above indicate that the interests of the residents in the provision to them of “a high quality of care and accommodation … that meets the needs of individuals”, and that “protects their health and well-being”, are relevant considerations in deciding whether or not it is appropriate to impose a sanction. So too are the need to ensure “access to care that is appropriate to the needs of residents” and that provides “appropriate outcomes for those residents”.
62. The Tribunal in Riverside (2003) gave consideration to what matters beyond those in s 65-2 of the Act are relevant to the decision whether it is appropriate to impose sanctions on an approved provider. The Tribunal said at paragraphs 371-4:
371. This is a matter that we can deal with very shortly. In view of our findings, we consider that the sanctions of revocation of Riverside’s approval as a provider under the Act and of revocation of all places allocated to it were the sanctions that should have been imposed. Riverside’s non-compliance was on-going and had been for many years both under the NH Act and the Act. Given its management and financial exigencies [it], was unlikely to be able to rectify that non-compliance in the near future. The consequences of that non-compliance were of a serious nature threatening the health, welfare or interests of the residents. Indeed, as we find below, the consequences were such that they posed an immediate and severe risk to the safety, health or well-being of care recipients. Riverside could not meet its responsibilities under the Act and so could not provide the personal care or nursing care required by the Act for those whose physical, mental or social functioning is affected to such a degree that he or she cannot maintain himself or herself independently.
372. We can well understand the upset that was caused to the residents and to their relatives as a result of the imposition of those sanctions. They led inevitably to the closure of the nursing home. For all of its shortcomings, it was the place in which they lived and regarded as their home. It was the place to which, after due investigation of all available nursing homes, they or their relatives had entrusted their care.
373. Given the objects of the Act, though, we do not consider that considerations of that sort can sway the manner in which the discretion is exercised. In the previous decision in Riverside Nursing Care Pty Ltd v Secretary, Department of Health and Aged Care [2001] AATA 1063:
…
374. Given the findings that we have made, we consider that the risk to the residents’ health, welfare or interests outweighed the deep upset that many of them and their relatives suffered as a result of their leaving the place that was their home.
63. There is some ambiguity about what the Tribunal meant in paragraph 373 when it said that the matters set out in paragraph 372 can not “sway” the manner in which the discretion is exercised. In our view it did not mean that they were not relevant at all. Paragraph 374 clarifies that what the Tribunal intended to convey was that those matters were relevant, but not overriding or decisive considerations, such as to necessarily sway the decision one way. In our view, that is clearly correct. They are relevant matters, bearing in mind the objects of the Act, but they are not necessarily decisive.
(iv) The aim or purpose of imposing sanctions
64. The decisions under review did not expressly consider the aim or purpose of the sanctions they imposed. We consider that the proper purpose of the imposition of a sanction under the Act must be for the protection of recipients of aged care, to ensure they receive appropriate, high quality care and to protect their health and well-being. Mr Gunst submitted that the imposition of a sanction is akin to a punishment. We do not accept the punishment analogy.
65. The point as to sanctions being for the protection of the public, rather than for punishment was made, in a different context, in Re Donald and Australian Securities and Investment Commission (2001) 64 ALD 717. The Tribunal was there reviewing a decision to make a banning order under s 829 of the Corporations Law. The Tribunal said, at paragraphs 52 and 55:
(52) We will not set out the findings we have already made in our previous reasons. As we said in those reasons, in our view, it seems to us that Mr Donald needs further time to reflect upon his actions so that he gains a proper understanding of what is appropriate behaviour of a dealers representative. But in what circumstances is he to reflect? In considering that question, we are mindful that we must have as our objects only those of achieving public protection and the maintenance of proper professional standards. Although any decision may involve great deprivation for Mr Donald, the object of the order is not to punish or to extract retribution. The protection of the public requires that persons operating in the market as dealers representatives understand that their behaviour must be such that it protects the integrity of the market.
…
(55) To impose a further banning order when a banning order has been stayed and there is no evidence of further inappropriate behaviour in the short period of Mr Donald’s resuming work as a dealers representative almost smacks of punitive action rather than of protection of the public. Considerations of punishment are as inappropriate as are considerations of the hardship that has been caused to Mr Donald by his inability to work as a dealers representative.
66. Mr Gunst, in his oral submissions likened the approach in the Act to a “carrot and stick”. In his written submissions, at footnote 3 to paragraph 35, he submitted:
Sanctions are the method provided by the statute, by way of punishing approved providers for failure to achieve compliance with standards, to ensure that residents are properly cared for. Unless the statutory scheme is upheld by the Tribunal, by the affirming of sanctions, then the entire scheme of standards and inspections will be set at nought.
The natural meaning of the word “sanction” (OED) is “penalty for disobedience or reward for obedience attached to a law, … penalty to enforce obedience to a rule or norm of conduct”.
67. We cannot accept Mr Gunst’s “carrot and stick” analogy. Unless a sanction is designed to promote an improvement, in quality of care (s 2-1(1)(a)(ii) of the Act), or in appropriate outcomes for recipients of care (s 2-1(1)(a)(iv) of the Act), or to promote accountability of providers of care for funding and for outcomes for residents (s 2-1(1)(a)(v) of the Act), or to promote a high quality of care that meets the needs of individuals, or to protect the health and well-being of care recipients (s 2-1(1)(c) of the Act), it is not appropriate to impose that sanction. Punishment is not an object of the Act, and Mr Gunst did not point to any way in which punishment of Marnotta R&M, or even of Marnotta, while it was under receivership and management, would achieve any of the objects of the Act.
(v)The relevance of the appointment of receivers and managers in making a sanction decision
68. Mr Gunst contested the applicant’s argument that Marnotta R&M should be treated for sanctions purposes, as a different entity to Marnotta. We consider that the distinction is relevant. We make the point that, if a sanction is a punishment, as submitted by Mr Gunst, the distinction is even more relevant, because there is no point in punishing the creditors and the R&M (the new managers) for the actions of the directors, whose poor management led to the appointment of R&M. After that appointment, it is the duty of the R&M to manage the company for the benefit of creditors, and not for the benefit of the former directors.
69. Even in the situation where, as we have held, a sanction is not to be seen as punitive or as a punishment, the appointment of R&M, by the creditors and charge holders of an approved provider, must be relevant. First, it creates a change of management. Secondly the R&M assume financial responsibility for the approved provider company. Thirdly, it provides a strong indication that the creditors are interested in the company continuing to provide care to residents, rather than just in winding up the company.
70. We consider that, in deciding whether it is appropriate to impose further sanctions, it is relevant that the directors under whose management Tangerine deteriorated, so that the Agency found non-compliance and serious risk, no longer have any management role in the company.
(vi)The length of time serious non-compliance has been present
71. In this matter only one reason was advanced at the hearing for imposing further sanctions on 27 May and 5 June. That was that the “serious risk” had continued too long, and “every day that ‘serious risk’ continued was a day that was unacceptable to the department” (trans, p607). Contrary to the impression Ms Thompson gave, there is nothing in the Act to say that further sanctions must always be imposed when non-compliance, whether minor or serious, has continued for any specific time.
72. Ms Thompson said as to her dealings with the R&M (trans, p414):
[E]very time I spoke to them the first thing I started with was, it's another day has gone by and serious risk is still in existence at the home. What is going to happen now?
73. Ms Thompson did not explain what more the R&M could or should have done about that passing of time. She did not suggest that they were not “running as hard as they can”, as Mr Davis said they were, at the meeting with the Department at 4.30pm on 21 May 2003 (T70, p520). The first reviewable decision was made six days after the R&M were appointed. The second, of 5 June, was made two weeks and one day after their appointment and just one week after the new Administrator was nominated. The Tribunal did ask Ms Thompson, at the conclusion of her evidence, what more the R&M could have done (trans, pp626-7 and 637). That evidence is discussed when we are considering the sanction decision of 5 June 2003.
74. Ms Thompson, in her evidence, said that, as far as she was concerned, the duration of the serious risk and non-compliance alone was sufficient to make it appropriate to impose further sanctions. As she said, “the issue for me, in my role, was that serious risk was still there” (trans, p631).
75. While the length of time serious risk has been existence at an aged care facility is relevant to a decision whether to impose a sanction, it must be equally relevant to consider why serious risk has been present for that time, and what prospect there is that the serious risk may be removed in the near future. There is no point in imposing a sanction if the management of a nursing home is already doing everything possible to remove the non-compliance, and it is reasonable to expect that the current management will be successful in promptly removing serious non-compliance. Changes in financial management, and in management of clinical care, are relevant matters in considering whether it is reasonable to expect that the problems at a facility will be remedied. If so, the health and well-being and interests of the residents may indicate that the most appropriate outcome is that management be supported, and allowed to continue with its tasks; rather than have further sanctions imposed by the Department. A sanction should only be imposed if it will achieve a purpose consistent with the objects of the Act.
WHETHER IT WAS APPROPRIATE TO IMPOSE A FURTHER SANCTION ON 27 MAY 2003
76. Ms Bowman, in her decision of 27 May 2003, considered the matters in s 65-2 of the Act. There is no dispute as to her conclusions, but they are not the only relevant considerations, and indeed on the facts of this case, they shed little light as to whether or not it was “appropriate to impose sanctions on the approved provider” on 27 May 2003.
(i) The matters specified in s 65-2
(a) whether the non-compliance is of a minor or serious nature;
77. Section 65-2(a) provides that the decision-maker must consider whether the non-compliance is of a minor or a serious nature. It is not in dispute that as at 27 May 2003 there was non compliance of a serious nature at Tangerine. Nor is it in dispute that the Agency in its visit on 19 May 2003 (T69) had found evidence that “serious risk” was still present at Tangerine.
78. The Serious Risk Report of 28 March 2003 (T4pp96-104) provides detail as to the serious risk, found at the Site Audit as at that date and also briefly mentions the further 31 expected outcomes where there was non-compliance with the accreditation standards (“non-compliance”), which the Agency did not find was evidence of serious risk (T4, pp103-4). The conclusion of the Agency was that there was serious risk in respect of standards 2.4 Clinical Care and 2.10 Nutrition and Hydration.
79. The reasons for the finding of serious risk as to standard 2.4, clinical care, were as follows:
Residents are at serious risk because:
· Residents’ care needs are not assessed, recorded, monitored or reviewed.
· Clinical care interventions are not planned, documented or carried out.
·Documented care strategies are incomplete, inaccurate, and not based on individually assessed needs.
·There are no systems to guide staff in the delivery of appropriate and consistent clinical care.
·Reports related to resident incidents or medication errors and other adverse clinical events are not consistently recorded or acted upon.
80. The Serious Risk Report contained a heading “Improvement outline considered appropriate by the Agency” in respect of each of standards 2.4 and 2.10. The Improvement Outline as to standard 2.4 was as follows:
Improvement outline considered appropriate by Agency
·Immediate assessment of all residents’ health care needs.
·Ensure that each resident has complete and accurate care plans and ensure that care needs and preferences are met.
·Ensure that prescribed treatment from medical practitioners and allied health personnel is carried out by staff.
·Conduct immediate and ongoing education for all staff on assessment, care planning, evaluation, and documentation.
·Establish processes to ensure a consistent approach to the management of care documentation
81. The reasons for the finding of serious risk as to standard 2.10, nutrition and hydration, were as follows:
Residents are at serious risk because:
·Residents’ nutrition and hydration needs are not assessed.
·Residents’ individual food likes and dislikes are not identified.
·Recommendations from speech therapists are not carried out.
·Ineffectual care of residents with swallowing impairments.
·Inappropriate foods are being given to residents requiring texture modified diets.
·Lack of monitoring of residents diagnosed with swallowing impairments.
·Lack of monitoring of residents’ nutritional status.
·Lack of planning or documentation intervention to guide staff in assisting residents to maintain adequate nourishment and hydration.
·Documented strategies are incomplete, inaccurate, and not based on individually assessed needs.
82. The improvement outline as to standard 2.10 was as follows:
Improvement outline considered appropriate by Agency
·Immediate assessment of all residents’ nutritional needs.
·Immediate assessment of all residents’ weights.
·Ensure that each resident has a complete and accurate care plan reflecting dietary management and food and fluid preferences, and that the plan is implemented.
·Ensure the prescribed treatment from speech therapist is provided.
·Implement a system to regularly monitor residents’ weight and nutritional status.
83. As at 19 May the Agency assessors reported, as to both 2.4 and 2.10, “serious risk not yet addressed and improvements not being made within a reasonable time frame” (T69, pp509 and 510). Although “Spot Check” and “Site Visit Reports” do mention some improvements over April and May, prior to 27 May, it was not contended by anyone that the remaining non-compliance was only minor.
(b) whether the non-compliance has occurred before and, if so, how often;
84. Prior to 31 March 2003, Marnotta had not been found to be non-compliant. Thus this was a first episode of non-compliance, although one that had remained from 28 March to 27 May 2003.
(c) whether the non-compliance threatens the health, welfare or interests of care recipients;
85. The finding of the Agency, in the Serious Risk Report of 28 March 2003 was that the non-compliance did “threaten the health, welfare of interests of the care recipients” at Tangerine. That finding was not challenged by the applicant in this proceeding in respect of the decision made on 27 May 2003, but there was no quantification or consideration of the nature of the threat.
(d) whether the approved provider has failed to comply with any undertaking to remedy the non-compliance;
86. It was not suggested that Marnotta had made any undertaking to remedy the non-compliance either before or after the R&M were appointed. In this matter it seems that no consideration was given to agreeing on a timetable or program of steps that could reasonably be expected to be taken toward remedying serious non-compliance. We note that under s 4.6(4)(b) of the Accreditation Principles, where there is evidence of non-compliance, but not of serious risk, the Agency must tell the approved provider about a timetable to make improvements. We can see no reason why a similar timetable should not be prepared, even where the non-compliance does constitute a “serious risk”, in cases where the “serious risk” is not so “severe” or “immediate” as to require a sanction which will lead to the removal of the care recipients from the facility. The approved provider could then undertake to follow that timetable.
(e) any other matters specified in the Sanctions Principles
87. Counsel did not contend that there were any relevant matters specified in the Sanctions Principles.
(ii) Other relevant matters
88. We consider the following additional matters are relevant considerations in deciding whether or not it was appropriate to impose a further sanction on 27 May 2003:
(a)the sanctions which had been imposed on 31 March 2003;
(b)dealings by the Department with Mr Chrapot, Ms Morgan and Anglican Aged Care “AAC”;
(c)the appointment of the R&M;
(d)the recommendation by Ms Thompson to Ms Bowman that she consider imposing a further sanction on the approved provider;
(e)the resignation of Ms Morgan;
(f)the proposed sale of the business of Tangerine;
(g)actions of Ms Thompson after Ms Morgan’s resignation
(a)The sanctions which had been imposed on 31 March 2003
89. In deciding whether it was “appropriate” to impose a further sanction on the approved provider on 27 May 2003 or 5 June 2003, it is important to bear in mind that the approved provider of care at Tangerine was already subject to two sanctions imposed on 31 March 2003. As set out in paragraph 18 above, the first of those sanctions revoked the approved provider status of Marnotta. The operation of that sanction was stayed providing “an administrator with nursing experience approved by the Commonwealth” was appointed to administer Tangerine. The sanction was to take effect from 1 April to 30 September 2003. This may be taken as “the period likely to be needed to establish whether any improvement in compliance can be sustained” (Sanctions Principles 1997 s 22.17(e)). The sanction also prevented Commonwealth subsidy being paid in respect of any new residents admitted to Tangerine after 31 March 2003.
(b)Dealings by the Department with Mr Chrapot, Ms Morgan and AAC
90. A question for the Tribunal in this proceeding is whether any events between 31 March and 27 May 2003 made it appropriate to impose further sanctions. To answer that question it is necessary to review what did happen in that period.
91. It was not in dispute that on 12 May 2003, Mr Chrapot was contacted by Ms Paschkow of the Department, who was the manager of the compliance area. Ms Paschkow told Mr Chrapot the Department wanted to discuss things with a view to “working together for the benefit of the residents to help overcome the problems at Tangerine”.
92. Mr Chrapot said in his statement (A2), and confirmed in his evidence, that prior to being contacted by Ms Paschkow he had become aware of the sanctions on Tangerine when he received a faxed media release from Ms Morgan advising of her appointment (which was not yet formally approved). He had discussed the matter with Ms Savage, Ms Hoskins and with Ms Morgan. He understood that efforts were being made to remove serious risk from the facility and to sell it.
93. At the Department’s request, Mr Chrapot and his fellow director, Mr Lewis, attended a meeting on 13 May 2003 with the Department. Legal advisers were present. Mr Arnhold, another creditor of Marnotta, also attended the meeting with his son. Ms Thompson and Ms Paschkow attended with someone from the Canberra office of the Department and Mr Knowles, a legal adviser to the Department. Surprisingly, there are no minutes of the meeting and it was not referred to in the T‑documents; but all parties agreed that it occurred.
94. Mr Chrapot said in paragraphs 32 and 33 of his statement:
Thompson and Paschkow explained the procedures that had been put into place including that of the appointment of an administrator. Thompson said that the relationship between the administrator and the approved provider was not good.
Davis asked the question whether the problem might be partly or wholly due to the administrator. The response was immediate. Paschkow immediately leapt to Morgan’s defence and, in a shocked manner, said “the Department had the utmost confidence in Elizabeth and her ability to turn the situation around”. My notes of that meeting are attached and marked [JC1] agree with that recollection.
95. Mr Davis, Mr Chrapot’s solicitor, was the person who actually asked the question about Ms Morgan. He did so on Mr Chrapot’s instructions. He too gave clear evidence as to Ms Paschkow’s immediate reaction. He said (trans, p1612-3):
Prior to me raising that question Michelle Paschkow had been reasonably embracing in terms of the meeting itself and the fact that we all had to work together and to try and achieve the win-win situation I mentioned. Upon putting that question to the department as to Ms Morgan's suitability Michelle Paschkow changed instantly. Her manner – her manner - her look and demeanour - it was as if I had personally offended her. That is how I felt at the time and I wondered what was the cause - I don't know - to this day I still don't know but she became a different person instantly. Most surprising. I just wasn't expecting it.
[Now what did she say?] --- My vague recollection is that she enquired as to whether that was an appropriate question to put and I believe that she excused herself from the meeting very shortly afterwards.
[Can I take you to paragraph 12 of your statement and do you see there that you say, first of all you state a conclusion that Michelle Paschkow was extremely defensive of any form of criticism or questioning of Ms Morgan?] --- Correct.
[Does the comment that you have just attributed to her relate to that observation or conclusion of yours?] --- Absolutely.
Was there anything else that she said that led you to form that view that she was defensive - extreme defensive of any form of criticism or questioning of her? --- I believe there was a short discussion as to the standard of care that had been - that had been in existence whilst she was the administrator of the facility and that she didn't believe there had been any I think the word I used is, "decline", whilst Ms Morgan was functioning as administrator.
96. Ms Paschkow was not well when she gave her evidence. She said she had been off work with the flu for a week and a half before giving her evidence (trans, p342). But she said she was able to give evidence that day, and she did not want to come back another day as the Tribunal suggested. She appeared confused and uncomfortable. Ms Paschkow said that she would not have said that the Department had the utmost confidence in Ms Morgan. She denied that she would have said more than that Ms Morgan had previously been successful in turning serious risk around (trans, p230). Her demeanour in giving evidence was very emotional, and similar to that described by Mr Chrapot and Mr Davis.
97. We accept Mr Chrapot’s and Mr Davis’ evidence as to what occurred at that meeting. We found them to be more persuasive witnesses than Ms Paschkow. Mr Chrapot appeared to the Tribunal to be an intelligent and efficient businessman. As he explained, he had reason to have some concerns about the role Ms Morgan was playing. We accept that he wanted to clarify her standing and reputation with the Department. It was a relevant matter for him to pursue, before becoming financially involved as a creditor in efforts to save Marnotta’s bed licences. We find that Mr Chrapot and Mr Davis were told by Ms Paschkow at that meeting, in an emphatic manner, that the Department had confidence in Ms Morgan.
98. We find that Mr Chrapot’s description in his notes and in his statement of Ms Paschkow “immediately leap[ing] to Morgan’s defence … in a shocked manner” and Mr Davis’ evidence that Ms Paschkow was “trembling”, are accurate descriptions of her manner and communication at the meeting. We find that when Mr Davis raised a question at the meeting on 13 May as to whether the continuing problems at Tangerine may be partly or wholly due to Ms Morgan, Ms Paschkow was extremely defensive of her and appeared offended at any criticism or questioning of her competence.
99. Mr Chrapot said that, following that meeting on 13 May, he met with Ms Morgan at her Future Choices office. He said she seemed to know exactly what had transpired at the meeting, even before he told her. He assumed she had been told by somebody from the Department. She expressed concern about payment of her fees and showed him a report she was preparing on the removal of the serious risk issues. That was her report dated 16 May (T58) which stated that serious risk had been removed and included a 38 page Priority Action Work Plan. There was discussion as to the future sale of the business. Ms Morgan and Mr Chrapot agreed to work together for the benefit of Tangerine. We accept Mr Chrapot’s evidence as to his meeting with Ms Morgan.
100. There is further evidence showing a close relationship between Ms Morgan and the Department. On 16 May 2003, Ms Thompson faxed a letter to Ms Savage and Ms Hoskins, directors of Marnotta, requiring them to sign an undertaking to pay Ms Morgan’s fees by 2pm that day (RX, DD 47, p181).
101. Later that day, an e-mail (RX, DD49, p186) was forwarded by Ms Paschkow to 11 staff of the Department in Canberra and Melbourne, advising what follow up there had been from Ms Savage and Ms Hoskins regarding the payment of Ms Morgan’s fees, as required by Ms Thompson.
102. Two significant meetings were held on 19 May 2003. The first at 9.30am was attended by Ms Savage and Ms Hoskins and Ms Thompson, Ms Paschkow and Ms Knight (AO), and legal representatives (T59). Ms Morgan explained her view that serious risk had been addressed. Her report that serious risk had been removed (T58), together with the Priority Action Work Plan was delivered to the Department that day.
103. Ms Thompson said that she was seriously concerned about the time taken to fix serious risk, and that it was the “longest ever”. She said that if Ms Morgan’s assessment that serious risk had been addressed was not verified by the Agency that day, she would consider further sanctions within 48 hours of receiving the review reports from Ms Morgan and the Agency. As it turned out, Ms Morgan’s claim that serious risk had been removed from Tangerine was not confirmed when a Support Contact Visit was made on 19 May (T69). Ms Thompson’s diary notes (R13) show that three days earlier, on 16 May 2003, she listed AAC as one of three possible “white knights”, she was considering using to help solve whatever problems arose at Tangerine. The other two possible “white knights” declined the role. Ms Thompson referred again to AAC as the “white knight option” on 22 May.
(c) The Appointment of R&M
104. For the purposes of this hearing, the more significant meeting on 19 May was attended by Ms Thompson, Ms Paschkow, Ms Knight and Mr Pappas of the Department, Mr Knowles, a solicitor for the Department, and the three creditors’ representatives, Mr Arnhold, Mr Chrapot and Mr Lewis. The solicitor, Mr Davis, again attended with the creditors.
105. Ms Thompson confirmed that the Agency and Departmental officers were to attend at Tangerine to see if Ms Morgan’s report of 16 May on removal of serious risk, which the Department had received that day, was correct. She also explained what sanctions could be imposed.
106. There was discussion at the meeting about funding, and the minutes show that Mr Chrapot said he was “considering putting serious funds into business to keep it going for sale” (T61, p488).
107. There is no dispute about the fact that the reason Mr Pappas was at the meeting was to explain the steps necessary to facilitate a transfer of the business of Tangerine from Marnotta to a new approved provider, if, as the R&M and the creditors hoped, a quick sale could be arranged.
108. Mr Davis from Mills Oakley is recorded in the Minutes as having said “we will keep you advised – looking for assurance that you won’t pull the pin”. When Ms Thompson did not respond directly to that request, Mr Davis pointed out that her answer was “not what I was asking” (T61, p489).
109. Mr Chrapot said in paragraphs 66 and 67 of his statement:
When the meeting ended I told Thompson that “I want to work with you and I assure you that we will do our utmost to bring the facility to the highest possible standard for the residents”. She agreed.
As a result of what happened at both the meetings of 13 and 19 May 2003 with the Department, Lewis and I instructed Davis that we wanted to enforce our rights under the debenture charge and appoint a receiver. Davis recommended Bruno Secatore (Secatore) of Bentley’s MRI Chartered Accountants (BRMI) and we met with him and Stirling Horne (Horne) the next day.
110. Mr Secatore and Mr Horne of Bentleys met with Mr Chrapot and Mr Davis on 20 May 2003. They were appointed R&M of Marnotta on Wednesday 21 May 2003 (T79, pp559-560).It was not in dispute that Marnotta R&M was to run Tangerine in an appropriate manner, only until a sale of the assets including good will and approved places at Tangerine could be arranged.
111. The evidence of Mr Secatore was that, on 21 May, before meeting with Department staff, he had been to Tangerine and spoken with Ms Morgan and the Tangerine staff in two separate meetings, so as to cover all staff. He had, at Ms Morgan’s request, asked Ms Hoskins to leave the premises. He had told Ms Morgan that the R&M would provide her with the resources she needed to remedy the problems at Tangerine. From his discussions with Mr Chrapot the previous day, he was satisfied that the R&M would be supplied with whatever funds were required to rectify the problems. He told the staff that he was now their boss and personally liable for their future wages. He also told the staff that their past wages, totalling about $95,000 would be paid. He paid $4,403 arrears of wages in the first week (A4, paragraph 42).He said the R&M were not strictly liable for costs that had already been incurred by the business, but he had no hesitation in making those “salvage” payments because without staff the residents would be at risk.
112. Mr Juratowich, a Director of the Business Recovery and Insolvency Division of the R&M, attended Tangerine with Mr Secatore on 21 May. He said in his statement (A9, paragraph 9), that Ms Morgan told them that she was of the opinion that there were too many casual staff at Tangerine and that she had discussed with recruitment agencies the obtaining of permanent staff. Mr Juratowich said he authorised Ms Morgan to place an advertisement seeking direct recruitment. He also asked her to give him written proposals for further recruitment through recruitment agencies. She did so over the next two days (A9, DJ1). The two proposals are a faxed proposal from Mercury Health Recruitment dated May 21, faxed at 4pm, and one from Healthcare Recruitment dated 22 May 2003. Mr Juratowich spoke to the recruitment companies and was told it would take about six weeks to engage new staff as proposed. He was also told that there would be difficulties attracting permanent staff because of the receivership, a shortage of staff in the area, and because of the finding of serious risk.
113. On 21 May at 4.30pm, Mr Secatore and Mr Horne met with Department staff, Ms Thompson, Ms Paschkow, Mr Pappas and legal representatives. Ms Thompson told Mr Secatore and Mr Horne that there was still serious risk at Tangerine. Mr Secatore said (trans, p1704):
Well, that hit us like a bombshell. Said that a report had been lodged by Elizabeth Morgan. And we said at the time - that must have been the report she was referring to this morning - and they said, serious risk has not been removed. So we were floored and said, well, okay, serious risk hasn't been removed, what does that mean? So we went, then, through the consequences of what it could mean and the time constraints that we had. So we were keen to get out of that meeting actually so that we could call the troops and tell them that we had a serious issue at Marnotta.
114. We accept that evidence from Mr Juratowich and Mr Secatore. We find that, before the R&M were appointed by Mr Chrapot, Ms Morgan had reported to him that serious risk had been removed. Marnotta had tabled her report to that effect with the Department on 19 May 2003. Although Ms Thompson received a verbal report contradicting Ms Morgan’s report on 20 May, she did not pass that on to Mr Chrapot. So far as he knew Ms Morgan’s report was accurate. Mr Secatore said that, if the creditors had been aware that it would probably take about one month to address the serious risk, there may have been no receivership.
115. Mr Secatore said that he remembered being told at the meeting on 21 May that there could be further sanctions. He said that he and Mr Horne were saying to the Department representatives (trans, p1783-4):
[D]on't beat us over the head about what has happened in the past right, we are here to rectify that. But we were getting put in the same category as the previous operators of the provider.
…
The thing is that the biggest concern the government had was the operators of the facility, right, the people running it. So we said with us coming in, those people are gone, we have got the backing of the debenture holder, if we have got to put the resources in, we have got the backing to do it, and the residents care will be - the residents will be looked after. And if things need to be improved they will be improved, but the residents will be looked after. The operators who [you] have had an issue with are gone, we are in there now, we have got the backing of the debenture holder, so that is what differentiates the receivers going in. So the only issues about not being able to talk to the directors before, or not getting reports back or whatever, that will be different now with us being here because (a) we have to look after the residents and (b) we have to protect the investment of the debenture holder. [emphasis added]
116. On 22 May, Mr Juratowich again attended Tangerine and had further discussions with Ms Morgan about staffing issues and the need for more permanent RNs. Mr Juratowich said, at paragraphs 21-24 of his statement (A9), and confirmed in evidence:
21.I had discussions on and off throughout the day with Morgan about various matters and commenced investigating the asset and liability position of Marnotta, the trouble with the cleaners, determined what bank accounts were used, reviewed the wages positions and everything else that I would normally be required to do in entering a new business under administration.
22.Morgan again raised staffing issues and the need for more permanent RN1s. She also wanted an immediate replacement for Claire Button (Button). It wasn’t clear to me what Button’s role was. Morgan said that she was responsible for the development of care plans and Morgan was of the opinion that she was not good enough and had not done her job. Morgan wanted to bring in a consultant that she had previously worked with from Sydney to prepare care plans.
. . .
24.We also discussed some building changes that were needed to the kitchen to put in a servery and arranged for those changes to be made straight away.
117. On 23 May, Mr Secatore and Mr Juratowich were occupied with a meeting at the Department until they left the city at about 7.00pm. At some stage during the afternoon they were advised by Mr Bushrod of the Agency that the Agency was proposing to conduct an Audit of Tangerine the following week from 28-30 May. That Audit was a response to Tangerine’s request for reconsideration of a decision made 6 May, not to reaccredit Tangerine after 20 June.
118. Mr Vrsecky, a consultant with the R&M, who had been given the task of focussing on addressing serious risk issues attended Tangerine at 9.00am on 23 May. Ms Morgan did not arrive until 12.00 – 12.30pm.
119. Mr Vrsecky said in his statement (A6) at paragraphs 12 – 19 and 24 – 27, and confirmed in evidence:
·“Residents with swallowing problems are at risk of aspirating or choking on food or fluids.”
395. This matter has been covered in our discussion of standard 2.10 nutrition and hydration. All dieticians’ and speech pathologists’ recommendations had been implemented, save for the one resident who refused to comply with the recommendations. On 5 June, the dietician was at Tangerine doing reviews and further assessments, and arrangements had been made for a further speech pathologist’s visit on 13 June. Ms Richer gave evidence that residents were watched in the dining room.
396. Concern was expressed about residents with swallowing problems being at risk of aspirating or choking on food and fluids in the Serious Risk Report dated 28 March 2003 (T4, p102). There was no evidence that the situation had deteriorated in any way in the period of more than two months since that report was written. In fact, we have found that the serious risk in respect of nutrition and hydration had been removed by 5 June 2003. There was no reason given as to why an item which had not been characterised as “immediate and severe risk” in March 2003 should have changed to become “immediate and severe risk” in the report dated 2 June 2003, particularly when there had been many improvements reducing the risk, in particular by ensuring that dietician and speech pathologist recommendations were implemented. We find that there was no “immediate and severe risk” of residents aspirating or choking on food as at 5 June 2003.
397. The issue of the resident who would not eat the food recommended for her was being competently attended to by Ms Harver, in a way which recognised, as well as the safety issue, the resident’s dignity and right to participate in decisions about, and exercise choice and control over, her lifestyle.
398. We find that none of the matters set out by Ms Bowman as evidence that there was an “immediate and severe risk” to the safety, health or well-being of care recipients at Tangerine did, as at 5 June, constitute “immediate and severe risk to the safety, health or well-being of care recipients”. We also find that none of those matters show that there was an emergency at Tangerine as at 5 June 2003.
399. Another clinical care issue which was not referred to by Ms Bowman, but to which Ms Cowling drew attention concerned the resident she described as Resident 1. Ms Cowling said that when attending to her mouth care, the care staff noted that she had her dentures in and her mouth was “full of ulcers”. Ms Cowling commented that the ulcers indicated that her dentures would have been left in her mouth for a while without being removed, “longer than several days at any rate” (R31, paragraph 28(c)). Ms Cowling said that the resident had been losing weight, but after AAC gave her thickened fluids and high protein supplements and implemented proper mouth care, the resident improved and “she began eating and drinking”.
400. The evidence of Ms Richer was that some of the residents who had been losing weight had started to gain weight, even in the eight days RAS had been at Tangerine. The evidence did not allow us to follow through the full history of this resident, or in fact of any of the residents. Many resident files were incomplete or could not be obtained for the hearing (A22). Difficulties were also caused by the form of report writing of both the Agency and the Department which, no doubt for privacy reasons, does not identify residents by name. We wonder whether this precaution is really necessary. There was some question on the evidence as to whether there might have been other reasons for Resident 1 not eating and drinking. That evidence was not such as to allow us to make any findings on the matter.
401. Ms Richer said that a normal part of her day was to go around and check all the residents “to make sure that their teeth were clean, their dentures were in, their hair was brushed, they were looking neat and tidy”. She said, “it is very easy to tell when residents’ dentures are not clean because dentures clog up fairly quickly” (trans, p2724).
402. Ms Richer said that usually if a resident’s denture is left in overnight, the staff coming in for the next shift would pass on the information. Ms Richer explained that mouth ulcers can develop overnight if the resident’s mouth is left unattended, particularly if the resident is debilitated. She said (trans, 2725):
One meal can coat a denture - dentures in food. So if a resident had been left all day and they had had their meals and they hadn't had the dentures taken out and cleaned that night by the next morning they would be coated in food, quite often underneath and around their teeth as well.
403. Ms Richer said she was confident that if there had been a resident not eating because of mouth ulcers while she was at Tangerine, she would have known about it. She left the premises after the sanctions decision was delivered on 5 June, at around midday with the rest of the RAS team, apart from Ms Harver (A14, paragraph 114). We find that the ulcers noticed by Ms Cowling could well have developed between the morning of 5 June and the late afternoon of 6 June when they could first have been brought to Ms Cowling’s attention. We have already set out the evidence as to the chaos and disruption of usual routines which followed the making of the sanctions decision on 5 June 2003.
404. Ms Cowling said her attention “would have been” drawn to Resident 1’s mouth ulcers the first time staff tried to give her anything to eat or drink (trans, p1337). Ms Cowling only commenced at Tangerine at about 3pm on 6 June (A31, paragraph 7). Her first task was attending a handover with Ms Harver and Ms Button. The AAC care staff did not enter Tangerine until after the handover. There was then a meeting with the AAC senior team and the care staff, before the residents were given afternoon tea. During the afternoon shift, the residents were given drinks and meals and assisted to bed.
405. We find Ms Cowling’s attention could not have been drawn to the resident’s mouth ulcers until late afternoon or evening on 6 June at the earliest. It may have been later. We find that the resident’s mouth ulcers were not evidence that there was an “immediate or severe risk” to residents or any emergency as at 5 June 2003.
(b) Staffing issues
406. There was criticism from the respondent on the ground that as at 5 June 2003, Ms Button was still working at Tangerine, and no new permanent RN1s had been engaged. It was agreed by all witnesses that Ms Button was not suitable to be the manager of clinical care and that there were some deficiencies among the RN1s, and too much reliance on agency RN1s.
407. Ms Harver explained how she managed the problems caused by Ms Button’s lack of leadership and management skills. She said (trans, p2380):
Ms Button was pleased to have us on site. Lulu and I made a very quick assessment of Claire's capabilities and competence and we closely monitored and supervised Claire and she responded quite happily. One of the changes or initiatives that I put in place with Claire was she was to commence duty at 7 o'clock in the morning to be there to take the handover from the night shift and to make sure that all - full complement of staff was in on duty at the right time and to instruct the staff before the went out to read care plans, to make sure they have got their buzzers, to make sure they were aware of any new procedures or treatment sheets that had been put in place and to make sure they read the memo communication folder. She didn't like the idea at first, her starting at 7 o'clock, but I actually insisted that she - that that be her start time and she happily conformed to that.
408. Ms Harver explained why, in spite of her reservations about Ms Button’s competence, she had kept her on staff (trans, p2380):
[O]ur opinion was she was the most senior person in Tangerine and she had a good rapport with the staff, with the residents, with the relatives. She was a very bubbly personality and, importantly for us, she had knowledge that we didn't about the facility, about the service providers, she had, for example, she knew who the pharmacist was and the medical practitioners, we had no knowledge of those issues at all. So she was valuable to us to retain for that information. Our job would have been an awful lot harder if we had lost the information that Claire had. I certainly spelled out in my statement that we supervised and monitored her closely. We gave Claire tasks to do and checked up that she had completed those tasks. One of the main tasks I gave her was the roster. She was familiar with the staff, she knew if replacements were required, she knew who - which staff member to ring who would be most likely available to come in, and all that is valuable information.
409. We find that while under Ms Harver’s management, Ms Button was not involved in assessing residents or making decisions as to clinical care (trans, p2381). We find there were good reasons for keeping her on the staff to provide some continuity, and that so long as Ms Button was well-supervised, her employment was not a problem.
410. Ms Harver said that the RN2s and personal care staff at Tangerine were “good, salt of the earth, willing – in general – workers, carers” (trans, p2382). That was confirmed by a number of AOs, as set out above.
411. We find that Ms Harver showed her management and leadership skills in the way she quickly assessed staff at Tangerine. She said she saw immediately that the head chef had to be stood down. She replaced him with the weekend chef. She said the other kitchen staff were good, especially one food services assistant, who was “extremely willing, very caring, very intimate with residents’ care needs”.
412. Ms Harver said that once she and Ms Richer came to Tangerine and provided leadership and guidance the RN2s, PCAs and kitchen staff, other than the head chef, worked with them very well and were willing to learn and very co-operative (trans, p2383). She said, “They were hungry for knowledge. They were hungry for the leadership so they were confident in what they were doing” (trans, p2383). That evidence was confirmed by Ms Kiss. We find that the staff worked very well under Ms Harver’s leadership.
413. We regard the criticism about new permanent RN1s not having been engaged by 5 June, as uninformed. First, as Mr Juratowich was told by the recruiting agencies, even if approval had been given by the R&M to a recruiting agency to engage permanent staff, it would have taken about six weeks for the new staff to start on the floor. Secondly, as Mr Juratowich said, he was also told by the recruiting agency that good staff are unlikely to be quickly engaged, particularly in an area of high demand, by a facility that is under sanction, under administration, has a finding of serious risk, is in receivership and has the shadow of closure hanging over it. We find all those factors are relevant in this matter. In retrospect, it is just as well that no new permanent staff had been engaged between 28 May and 5 June.
414. Ms Stehn said that there are reasons against engaging new permanent staff when a facility is “known to be in trouble”, being under sanction, and under administration. She said that such a facility is unlikely to attract the sort of permanent staff it would be desirable to engage. Further, when a facility is in trouble, there will be a time of re-organisation. It is preferable to wait until that is achieved to define the exact permanent positions which are needed. Ms Stehn said she would have addressed the staffing issue by arranging to have repeat Agency staff for the time being. That is exactly what Ms Harver did. She said she had already arranged to have one particular agency RN1, who she knew to be competent, on a regular basis. We accept Ms Stehn’s evidence and find that it was good management practice not to engage new permanent staff at Tangerine between 28 May and 5 June 2003.
CONCLUSION AS TO FURTHER SANCTIONS DECISION OF 5 JUNE 2003
415. We find it was not appropriate to impose further sanctions on 5 June 2003. There was a further audit arranged for 10 June to check whether serious risk had been removed from standards 2.4 and 2.10. We find it would have been appropriate to wait for the result of that audit and the result of sale negotiations. We have found there was no “immediate and severe risk” which would have made a wait of 5 days inappropriate.
416. We find that while Ms Harver was at Tangerine as Administrator, she was providing the administration considered appropriate by the sanctions decision of 31 March and she, and her highly competent and very experienced team, were improving aspects of care and systems and the skills of staff all the time they were at Tangerine.
417. There was no evidence which gave us any reason to doubt that Ms Harver was an appropriate person to have responsibility for removing any risk or threat to the Tangerine residents’ health, welfare, safety, well-being or interests. We find that, while Ms Harver and her team were managing Tangerine, there was no immediate or severe risk threat to the health, welfare or interests of residents there. We find there was no risk that required the removal of the residents from the facility, or from the clinical care provided there, under the management of RAS. We find the residents’ health, welfare and interests were being better looked after on 5 June than they had been at any time since 31 March 2003.
418. We find that the deficiencies in quality of care which had been identified by the Agency were being expertly and efficiently addressed. We find that although not all serious non-compliance or threat to the residents’ health, welfare or interests had been removed in the eight days RAS had been at Tangerine, that work was well under way.
419. It is our view that moving residents from their home should be a last resort. It is disruptive to them and their relatives. That did not seem to be in issue. It was accepted by Ms Thompson, who said on 26 May, that the “last thing we want to happen is for residents to have to move” (T87, p596).
420. We find that it was not appropriate to impose any further sanction on the approved provider on 5 June 2003, because:
(i)there was no “immediate and severe risk to the safety, health or well-being of care recipients”, or emergency, on 5 June;
(ii)there were already current sanctions which had been in place since 31 March 2003, as a result of which the residents’ clinical care was being supervised by Ms Harver who was a nurse on the administrator panel established under s 66A-1 of the Act;
(iii)significant improvements in relation to standards 2.4 and 2.10 had been implemented by 5 June;
(iv)the qualifications, skills, experience and qualities of Ms Harver and the RAS senior team including Ms Stehn, should have inspired confidence in their ability to remove serious non-compliance and to safely manage and remove any threat to the health, safety or well-being of care recipients at Tangerine;
(v)morale of Tangerine staff had improved under the new leadership;
(vi)Ms Bowman had been advised in the solicitors’ faxed letter of 4 June that a transfer to a “gold class provider” could have been provided to the Department for approval by close of business on 5 June. Ms Thompson in evidence said she saw such a transfer as the preferable solution. It would have left the residents undisturbed in the facility which was their home. We find the progress towards the sale was a reason against yet another sanctions decision, which prevented that sale;
(vii)Marnotta R&M was willing to do whatever was required, as the R&M assured Ms Thompson. That had already been demonstrated by the renovations to the servery, which were requested on 21 or 22 May and completed on 26 May, and by the resources, human and financial, which had been devoted to the project;
(viii)the actions which had been planned prior to, and were being implemented on, 5 June, i.e. the dietician doing assessments, the occupational therapist visiting, Ms McCarthy and Ms Ament reviewing wounds and skin integrity, and the pan flusher being installed, showed that at last the problems at Tangerine were being competently addressed by the approved provider, Marnotta R&M;
(ix)the residents and their relatives would be disrupted and distressed by any move from their home;
(x)the close and caring relationship residents had with the PCAs, as described by Ms Kiss, Mr Kennedy and Ms Moss and a number of other witnesses, would be destroyed if those staff were terminated, or if the residents were moved from Tangerine; and
(xi)the facility was only accredited until 20 June. The situation had been allowed to continue for over two months. There was no reason to suddenly revoke the places just two weeks and one day before the accreditation ceased, when improvements were being made, as shown in the Spot Check records of June 2003.
421. We find that the decision under review did not provide an appropriate outcome for recipients of care at Tangerine. Nor did it protect the safety, health and well-being of the residents at Tangerine. Had the decision not been made, the residents had the opportunity of being able to stay in their chosen residence under the care of a well-qualified management team, which already managed five fully compliant aged care facilities. The team knew how to, and was already efficiently going about the task of removing serious risk, and any threat to the health, welfare and interests of Tangerine residents. The opportunity to remain at Tangerine was lost, because of Ms Thompson’s requirement that the planned audit proceed on 28-30 May 2003, in spite of the recent resignation of Ms Morgan. Those days were eminently unsuitable, because of Ms Morgan’s resignation, and because 28 May was the first day for the new team. The team members had not yet had time to orientate themselves to Tangerine. At the start of the audit, they had not had the opportunity to implement any improvements.
422. Ms Hampel asked Ms Thompson why, if she felt serious risk could not be satisfactorily addressed after Ms Morgan resigned, she did not give that opinion frankly to the R&M and discuss an exit strategy with them (trans, p581). She replied (trans, p581):
I don't know that I could have done that because that would have been an assumption that a - that some sort of sanctions decision had been made.
423. Ms Thompson was asked by Mr Gunst what she would say if it were suggested that she had been “stringing along” the R&M, until AAC “could be retained and locked in place” (trans, p425). She denied that suggestion and said that all her discussions with AAC, which commenced on 16 May 2003 (R13 Vol. 1 p29), were on the basis that it was “a contingency plan”. We would have been more ready to accept her denial, if Ms Thompson had disclosed her contingency plan, and her reasons for it, to the R&M.
424. We find that Ms Thompson was “stringing along” the R&M, from the time Ms Morgan left and AAC refused to provide an Administrator. She took action to ensure that an audit took place on 28-30 May 2003, even though that was quite premature, and it was clear that Tangerine was in crisis that day, without leadership, except from Ms Richer, who was there for the first time. Ms Thompson showed no interest in meeting with Ms Harver or in considering the compliance history of the five aged care facilities of which she was Operations Manager. She gave no weight to and did not inform Ms Bowman as to the commitment of the R&M. No reason was advanced for not accepting the offer to produce a transfer to a “gold class provider” by close of business on 5 June, and instead revoking the places.
425. Ms Thompson told the Tribunal that such a sale was the preferable outcome. She criticised the approved provider for not having a transfer “on the table”, but when the decision-maker was informed on 4 June that a signed transfer could be provided for approval by close of business on 5 June, that was ignored. Ms Thompson did not explain why she did not recommend allowing the sale to proceed, in view of the fact that no decline in care was reported to her.
426. There is evidence that on 26 and 27 May Ms Thompson discussed with AAC the details of the problems at Tangerine. She and Ms Paschkow met with Ms Kurincic on the evening of Sunday 1 June. Ms Kurincic agreed to provide a proposal as part of a contingency plan. As we have already said, the agreement was signed by AAC on 4 June. We find Ms Thompson did not disclose those negotiations to the approved provider, because she was “stringing them along”, until Ms Bowman made the decision, which had been in preparation for some time before 5 June 2003.
427. The decision of 5 June under review will be set aside.
CONCLUDING COMMENTS
428. Because this is a relatively new jurisdiction for the Tribunal, there are some further matters, not directly relevant to the decision, about which we feel some comment may be helpful. We are directing these comments to those involved in the drafting of the appropriate legislation, and in the administration of the scheme providing for accountability in aged care facilities.
429. The first issue concerns the misunderstanding as to the operation of s 42-5(3) of the Act. This meant that the avenue of seeking a deemed accreditation was overlooked in this matter. The s 42-5 application which had been lodged on 19 May (T58, p4537), was ignored by the Department. Then, no steps were taken by the approved provider Marnotta R&M after, say, 2 June, to lodge a new s 42-5 request, even after Ms Harver and her team had remedied many of the problems, so that there may well have been no “immediate and severe risk”. The situation seems to us to have been the type of situation for which s 42-5 was designed. We consider that the following combination of circumstances were likely to be considered “exceptional”:
(i) the appointment of the R&M to the approved provider; and
(ii)the approved Administrator from the administrator panel “walking off the job” without notice, leaving the approved provider without an Administrator after 7 weeks of unsuccessful work, and just two weekdays before the start of an important re-consideration audit, and
(iii)the approved Administrator delivering a report claiming that serious risk had been removed, a claim which the Agency found to be unsubstantiated on the same day; and
(iv)a new and highly skilled Administrator with a well-qualified team, including three qualified aged care assessors, and an excellent record as Operations Manager of five aged care facilities, coming in to take over the administration of Tangerine.
430. Another question to which the evidence gave rise was the procedure for removing a person from the administrator panel, established under s 66A-1 of the Act. The Tribunal asked Ms Thompson whether Ms Morgan was still on the panel. Mr Gunst informed the Tribunal, “people cannot be taken off the panel without giving them a right to be heard and there has be a written statement of reasons. It is in s 66A-1 of the Act. It is not a decision which gives rise to a right of appeal to this Tribunal but there is the general right of judicial review in the Federal Court” (trans, p642). Section 66A-1(4) and (4A) of the Act provide as follows:
(4) The Secretary may terminate a person's appointment to a panel by writing signed by the Secretary and given to the person.
(4A) A notice under subsection (4) must include a statement of reasons for the termination of the person's appointment.
Mr Gunst was mistaken. There is no reference to a right to be heard in s66A-1, before a person’s appointment to a panel is terminated.
431. From our experience, hearing this and other matters, we consider that there must be a better way to protect recipients of care and monitor expenditure of public money. The first problem is that the current system focuses too much on care documentation, rather than on the actual health, clinical care and interests of recipients of care. As the assessors include clinically qualified nurses, where there is a real concern about clinical care, there should be some clinical assessment of the recipients of care. The other problem is that the current system gives rise to far too many lengthy, duplicated and repetitive documents. They require detailed analysis and consideration by clinical managers of the approved providers, diverting many hours of their attention and resources away from issues relating to the health and well-being of the recipients of aged care services. We expect that much simpler, less repetitive and more direct reports could be produced.
432. Finally, it is our view that the work of the Agency could be more directed at advising and assisting approved providers to remedy issues of non-compliance. Ms Bateman agreed on this point, but explained that the reason why the Agency does not advise or direct is that, even where an approved provider does exactly as they advise, the problem may not be relieved (trans, p51). However, we expect that would be rare, because of the expertise of the Agency staff. Where it does occur, it is no doubt relevant to know, particularly when imposing a sanction, that, even though best practice has been implemented, the problem has remained intractable.
I certify that the 432 preceding paragraphs are a true copy of the reasons for the decision herein of Senior Member Joan Dwyer and Associate Professor John Maynard, Member
Signed: Josephine McKay
AssociateDates of Hearing 29 November - 23 December 2004; 7 - 10 February 2005; 16-17 February 2005.
Date of Decision 12 May 2005
Counsel for the Applicant Ms F Hampel SC, Ms M Kennedy SC and Ms E Brophy
Solicitor for the Applicant Mills Oakley Solicitors
Counsel for the Respondent Mr C Gunst QC and Mr P Gray
Solicitor for the Respondent Clayton Utz Lawyers
2