Medibank Private Ltd v Cassidy

Case [2002] FCAFC 290

FEDERAL COURT OF AUSTRALIA

Medibank Private Ltd v Cassidy [2002] FCAFC 290

COURTS & JURISDICTION – Appeal from a decision refusing a motion seeking summary dismissal of orders sought pursuant to s 12GD Australian Securities and Investment Commission Act 1989 (Cth) (equivalent of s 80 Trade Practices Act 1974 (Cth)) – nature of s 12GM of Australian Securities and Investment Commission Act 1989 (Cth) (equivalent of s 87 Trade Practices Act 1974 (Cth)) – the extent to which s 12GM limits the power granted by s 12GD – power of the Court to order compensation to non-parties to a proceeding – legislative history of relevant sections considered.

Acts Interpretation Act 1901 (Cth) s 15AA
Trade Practices Act 1974 (Cth) ss 80, 80A, 82, 86, 87

Securities Industry Act 1980 (Cth) s 149
Companies Act 1981 (Cth) s 574
Australian Securities and Investment Commission Act 1989 (Cth) ss 12DA, 12GD, 12GE, 12GF, 12GJ, 12GM
Corporations Law 1989 (Cth) s 1324
Corporations Act 2001 (Cth) s 1324

Supreme Court Act 1970 (NSW) s 68

Chancery Amendment Act 1858 (UK)

Leon Fink Holdings Pty Limited v Australian Film Commission (1979) 141 CLR 672, followed
Mills v Meeking (1990) 169 CLR 214, cited
Mayne Nickless Ltd v Multigroup Distribution Services Pty Ltd (2001) 114 FCR 168, cited
ACCC v On Clinic Australia Pty Ltd (1996) ATPR 41-517, considered
ACCC v MHG Plastic Industries Pty Ltd [1999] FCA 970, considered
ACCC v Purple Harmony Plates Pty Ltd [2001] FCA 1062, cited

MEDIBANK PRIVATE LIMITED v BRIAN CASSIDY CHIEF EXECUTIVE OFFICER AUSTRALIAN COMPETITION & CONSUMER COMMISSION

V 836 OF 2000

SUNDBERG, EMMETT & CONTI JJ
13 SEPTEMBER 2002
MELBOURNE


IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY

V 836 OF 2000

ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA

BETWEEN:

MEDIBANK PRIVATE LIMITED
ACN 080 890 259
APPELLANT

AND:

BRIAN CASSIDY
CHIEF EXECUTIVE OFFICER
AUSTRALIAN COMPETITION & CONSUMER COMMISSION
RESPONDENT

JUDGES:

SUNDBERG, EMMETT & CONTI JJ

DATE OF ORDER:

13 SEPTEMBER 2002

WHERE MADE:

MELBOURNE

THE COURT ORDERS THAT:

  1. Medibank Private Limited (“Medibank”) have leave to appeal from the order made by Justice Ryan on 21 March 2002 (“the primary order”);
  2. upon Medibank filing a notice of appeal in the form of the draft notice of appeal annexed to the affidavit of John Bede Weber sworn 10 April 2002 the following orders be made:
    1. the appeal be upheld;
    2. the primary order be set aside and, in lieu thereof, there be orders that:

i.the proceeding be dismissed in relation to the claims for relief made in paragraphs 10, 11 and 12 of the further amended application; and

ii.the applicant in the proceeding (“Mr Cassidy”) pay Medibank’s costs of the notice of motion filed on 15 February 2001, and

    1. Mr Cassidy pay Medibank’s costs of the appeal.
  1. the parties’ costs of the application for leave to appeal be their respective costs of the appeal.

Note:   Settlement and entry of orders is dealt with in Order 36 of…

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AGLC
Medibank Private Ltd v Cassidy [2002] FCAFC 290
Case
[2002] FCAFC 290
Decision Date

CaseChat Overview and Summary

Medibank Private Ltd sought leave to appeal a decision made by Justice Ryan in the Federal Court of Australia, which pertained to a claim brought by the Australian Competition and Consumer Commission (ACCC) against Medibank. The dispute involved allegations of misleading and deceptive conduct by Medibank in relation to health insurance products and services. The primary judge had denied Medibank's application to stay or dismiss certain claims in the proceeding. Specifically, Medibank contested orders that would require it to inform policyholders of misleading representations and provide compensation, as well as to provide detailed information about affected policyholders to the ACCC. The central legal issues before the court were whether the Federal Court had the jurisdiction to make the orders sought by the ACCC under section 80 of the Trade Practices Act 1974 (Cth), and if the orders were appropriate in this context.

The Full Court of the Federal Court, in considering the appeal, noted that the orders in question had been set aside in a similar case, ACCC v MHG Plastic Industries Pty Ltd, due to a lack of contravention. The court emphasized the flexible nature of orders that can be made under section 80 of the Trade Practices Act but did not address the applicability of such orders to non-parties. The Full Court concluded that the primary judge's orders were not warranted, given the circumstances of this case. The court held that the orders sought by the ACCC were not appropriate, as they imposed obligations on Medibank that extended beyond what is typically required under the Trade Practices Act. Consequently, the appeal was upheld, and the primary order was set aside. Instead, the proceeding was dismissed in relation to the contested claims, and Medibank was awarded its costs for the appeal and the motion.

The final orders of the court were that Medibank had leave to appeal the primary order, and upon the filing of a notice of appeal, the appeal would be upheld. The primary order was to be set aside, and the proceeding dismissed in relation to the claims for relief made in paragraphs 10, 11, and 12 of the further amended application. Furthermore, the respondent in the proceeding, Mr. Cassidy, was ordered to pay Medibank's costs of the notice of motion and the appeal.

Orders

Orders of the court

1. Medibank Private Limited (“Medibank”) have leave to appeal from the order made by Justice Ryan on 21 March 2002 (“the primary order”);

2. upon Medibank filing a notice of appeal in the form of the draft notice of appeal annexed to the affidavit of John Bede Weber sworn 10 April 2002 the following orders be made:

1. the appeal be upheld;

2. the primary order be set aside and, in lieu thereof, there be orders that:

i. the proceeding be dismissed in relation to the claims for relief made in paragraphs 10, 11 and 12 of the further amended application; and

ii. the applicant in the proceeding (“Mr Cassidy”) pay Medibank’s costs of the notice of motion filed on 15 February 2001, and

1. Mr Cassidy pay Medibank’s costs of the appeal.

2.

Background

Background to the litigation

On 10 April 2002, Medibank applied for leave to appeal to the Full Court from that order. On 30 April 2002, orders were made that the appeal be listed for hearing at the same time as the application for leave. In its draft notice of appeal, Medibank makes clear that its application is for leave to appeal only from the order of the primary judge insofar as his Honour refused to order that the claims for relief set out in paragraphs 10, 11 and 12 of the further amended application be stayed or dismissed pursuant to Order 20, rule 2 of the Federal Court Rules. The orders sought in paragraphs 10, 11 and 12 will be set out in full later. BACKGROUND ACCC asserts that Medibank was, at all material times, a company carrying on the business of a private health insurer. That business includes the promotion and sale of financial products and the provision of financial services in connection with health insurance within the definition of “financial services” in s 12DA of the ASIC Act. In the amended statement of claim it is alleged that, at various times, Medibank, inter alia, made a number of representations defined, for the purposes of the proceeding, as follows: the waiting period representation; the thirty days free cover representation; the package plus premium representation; the call centre premium representation; the website and brochure representations;·the no‑rate increases representation.The full content of the representations is not presently relevant. Orders 10, 11 and 12 sought in the further amended application are in the following terms:“10. An order directing the Respondent to:(a)write to all persons who have transferred from another health insurance provider to the Respondent in the period between 13 August 2000 and 10 September 2000 (inclusive) informing them that:(i)the Waiting Period Representation and the 30 Days Free Cover Representation … were misleading and/or deceptive or were likely to have been misleading and/or deceptive to consumers;(ii)the Respondent will compensate those persons who were mislead and/or deceived and who suffered loss or damage by this, according to the nature of the loss or damage by:(x) waiving all waiting periods; and/or(y) granting 30 days free cover without any conditions in respect of the Respondent’s Health Insurance Products…; and(iii)such compensation will be made after confirmation of the identity of such persons and of the loss or damage by a procedure to be agreed between the Applicant and the Respondent within a time fixed by the Court, or in default the procedure to be determined by the Court;(b)upon confirmation of the identity of the persons to be compensated and of the loss or damage by a procedure to be agreed between the Applicant and the Respondent within 14 days hereof, or in default to be determined by the Court, make the waiver and/or grant the free cover referred to above.11. An order directing the Respondent to:(a)write to all persons who have entered into agreements to purchase the Respondent’s PackagePLUS Products … in the period between 1 March 2000 and 30 June 2000 (inclusive) informing them that:(i)the PackagePLUS Premium Representation, the Call Centre Premium Representation, the Website and Brochure Representations and the No Rate Increases Representation … were misleading and/or deceptive or were likely to have been misleading and/or deceptive to consumers; and(ii)all persons who purchased the PackagePLUS Products … on or before 30 June 2000 who were mislead and/or deceived and who suffered loss or damage by this will be compensated by the Respondent according to the nature of the loss or damage by receiving a refund of, or a credit for, the difference between the pre‑1 July 2000 premium or rate and the post‑1 July 2000 premium or the rate for the period 1 July 2000 up to 31 December 2000; and(iii)such compensation will be made after confirmation of the identity of such persons and of the loss or damage by a procedure to be agreed between the Applicant and the Respondent within a time fixed by the Court, or in default the procedure to be determined by the Court;(b)upon confirmation of the identity of the persons to be compensated and of the loss or damage by a procedure to be agreed between the Applicant and the Respondent within 14 days hereof, or in default to be determined by the Court, make the payment of the refund or give the credit referred to above.12. The Respondent provide forthwith to the Applicant particulars of each person who:(a)transferred from another health insurance provider to the Respondent in the period between 13 August 2000 and 10 September 2000 (inclusive);(b)entered into an agreement to purchase the Respondent’s PackagePLUS Products … in the period between 1 March 2000 and 30 June 2000 (inclusive)such particulars to include:(i)the name and address of each person;(ii)the date the person transferred or purchased as referred to above;(iii)the type of health insurance product selected;(iv)the method of payment for the product selected;(v)the amount and date of each payment made by each person up to 31 December 2000;(vi)whether the person applied to the Respondent for the transfer or purchase:(x) by means of the Respondent’s website;(y) after telephoning a Call Centre operated by or on behalf of the Respondent;(z) after visiting a business premises operated by the Respondent.”

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

In ACCC v MHG Plastic Industries Pty Ltd, the orders in question were set aside by the Full Court. The Full Court concluded that there had been no contravention, although it made no comment about the nature of the orders. On the other hand, the question of the Court’s power was not raised as an issue in the proceeding. Although Emmett J made reference within the reasons for judgment to the flexible nature of the orders which could be made under s.80 of the TP Act, his Honour made no comment on the application of such orders to non‑parties.CONCLUSION The appeal should be upheld. In lieu of the order made by the primary judge, there should be an order on the motion that the proceeding be dismissed in relation to the claims for relief made in paragraphs 10, 11 and 12 of the amended application. Medibank should be given its costs of the appeal and of the motion.

Ratio Decidendi

Legal Principle Established

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