Medtek P/L v the Chief Health Officer for the State of Queensland

[1997] QSC 177

IN THE SUPREME COURT

OF QUEENSLAND

No 7355 of 1997

Brisbane

Before the Hon. Justice Williams

[Medtek P/L v. The Chief Health Officer for the State of Queensland & Ors]

BETWEEN:
  MEDTEK PTY LTD
  ACN 062 077 098
  Applicant

AND:
  THE CHIEF HEALTH OFFICER
  FOR THE STATE OF QUEENSLAND
  and
  THE MINISTER FOR HEALTH OF QUEENSLAND
  and
  THE STATE OF QUEENSLAND
  and
  TOWNSVILLE DISTRICT HEALTH SERVICE

Respondents

REASONS FOR JUDGMENT - WILLIAMS J

Judgment delivered 29/09/1997

CATCHWORDS JUDICIAL REVIEW - Health Department tenders - extension of time refused - dismissed because no reasonable basis for application disclosed - ss.4, 26, 31, 48 and s.13 of Schedule 2 of Judicial Review Act 1991 considered.

Counsel:Dutney QC and Pope for applicant Medtek Pty Ltd

Hinson for respondents The Chief Health Officer for the State of Queensland and others

Solicitors:Nehmer Davenport Dean McKee for applicant

BT Dunphy, Crown Solicitor, for respondents

Hearing Date:              15 September 1997

IN THE SUPREME COURT

OF QUEENSLAND

No 7355 of 1997

Brisbane

[Medtek P/L v. The Chief Health Officer
for the State of Queensland & Ors]

BETWEEN:

MEDTEK PTY LTD
  ACN 062 077 098
  Applicant

AND:

THE CHIEF HEALTH OFFICER
  FOR THE STATE OF QUEENSLAND
  and
  THE MINISTER FOR HEALTH OF QUEENSLAND
  and
  THE STATE OF QUEENSLAND
  and
  TOWNSVILLE DISTRICT HEALTH SERVICE

Respondents

REASONS FOR JUDGMENT - WILLIAMS J

Judgment delivered 29/09/1997

By application filed 11 July 1997 Medtek Pty Ltd, the applicant, applied for statutory orders of review pursuant to Part 3 of the Judicial Review Act 1991 with respect to decisions made by or on behalf of the parties named above as respondents.

Because the first of the decisions sought to be reviewed was made in or about August 1996 it was necessary for the applicant to seek an extension of time pursuant to s.26 of the Act for making the application.  An order seeking the appropriate extension of time was sought by summons filed 11 July 1997, and that was one of the matters before me for determination.

By Notice of Motion filed 20 August 1997 the respondents sought orders pursuant to s.48 of the Act that the Application for Statutory Order of Review be dismissed primarily on the ground that no reasonable basis for the application was disclosed.  That Notice of Motion was also before me for determination.

It is convenient to continue referring to Medtek Pty Ltd as the applicant and the decision making parties as the respondents.

For a number of years prior to 30 June 1996 the applicant was the supplier of biomedical engineering services to a number of hospitals and medical institutions under the control of the respondents in the Townsville region.  The last contract was to expire on 30 June 1996.

Prior to 30 June 1996 the respondents caused to be prepared separate specifications for the calling of tenders for biomedical engineering support of the Townsville General Hospital, the Kirwan Women’s Hospital, Palm Island Hospital, Townsville Nursing Home and the Magnetic Island Health Clinic.  Each of those institutions had previously been serviced by the applicant.  In addition a specification was prepared for the provision of biomedical engineering support for the North Queensland Home Base Dialysis Service.  Tenders were then called, pursuant to the Queensland Government’s State Purchasing Policy, for each of the entities named above in accordance with those specifications; the tender was designated TDHS0101.

The applicant submitted individual tenders for all facilities and a bundled offer titled “Offer B” which took the form of a single and all inclusive offer to provide the full range of services to all entities. Other tenders were received from Biomedical North Queensland and APS Service Pty Ltd with respect to certain of the named entities. Those tenders were then subjected to an evaluation process by a committee. One of the members of that committee raised some concern as to whether or not the applicant’s “Offer B” infringed the Trade Practices Act 1974. It was decided that legal advice should be sought on that issue.

Because the tender evaluation process was extending beyond 30 June, the respondents entered into an agreement with the applicant for the provision of services by the latter on an agreed basis for a period of 60 days from 1 July 1996.  That arrangement did not cover the North Queensland Home Base Dialysis Service and an interim arrangement was made with Biomedical North Queensland for support of that service.

On or about 2 August 1996 the evaluation committee recommended to the respondents acceptance of the tender of Biomedical North Queensland with respect to services for the Palm Island Hospital, Magnetic Island Health Clinic, Kirwan Hospital for Women and the Townsville Nursing Home. That committee also recommended that the tender of the applicant be accepted for the provision of services to North Queensland Home Base Dialysis Service; its recommendation was that the applicant’s offer should not be accepted for the provision of services to the Townsville General Hospital, but it recommended that there be post-tender negotiations in order to establish a more realistic price. At about the same time as those recommendations were made to the respondents, legal advice was also received suggesting that there may have been a breach of the Trade Practices Act with respect to the applicant’s “Offer B”.

Faced with all of that material it was the decision of the respondents that no tender should be accepted, that the tender process initiated as TDHS 0101 should be abandoned and new tenders sought after a rewording of the specifications.

In fact new tenders were called thereafter and the applicant submitted a fresh tender.  All that need be said is that the second tender process was abandoned for reasons which are of no present relevance.

Thereafter the respondents set about revising the tender specifications and calling further for fresh tenders.  In about late November/early December 1996, a detailed draft offer document referred to as PL. 121/1/1 for the supply of biomedical engineering services to the Townsville District Health Service was prepared and it included a comprehensive specification.  Based on that the offer was publicly advertised in newspapers and tender documents made available to prospective offerors.  The offer was to close at noon on 21 January 1997 with the new contract to start as and from 1 February 1997.  Four offers, including one from the applicant, were received in accordance with the advertised offer.  The evaluation process then commenced.  Referee checks during the evaluation process resulted in a number of issues being raised with respect to some of the offerors.  There was also an audit investigation into some circumstances surrounding the prior purchase of certain equipment for the Townsville District Health Service which became relevant.  In consequence the time for making a decision with respect to the offers was first extended to 1 March 1997 and then to 1 May 1997.

There was correspondence emanating from the applicant in May 1997 requesting its immediate appointment as the successful tenderer for PL 121/1/1.  That resulted in a reply on behalf of the respondents dated 22 May 1997.  The whole of that letter is important, but the most significant passages for present purposes are the following:-

“5.Ross Pitt explained to you at the meeting of 10 April 1997 that a whole-of-North Queensland Standing Offer was under consideration.  Queensland Health would ensure that it supervised the future contract professionally and that it had several suppliers under the new Standing Offer Arrangement.  Queensland Health has now decided to move in that direction and hopes to be in a position to implement the new Standing Offer Arrangement by the end of 1997 or 31 January 1998 at the latest.  The existing interim supplier (Gammatech) has been retained until the new arrangement is implemented.  This is a legitimate decision under the State Purchasing Policy.

6.Medtek’s status as a supplier to Queensland Health must be resolved before it can be appointed as a supplier for additional businesses and I have asked Ross Pitt to expedite this assessment.  ...

7.Queensland Health’s own medical unit will not be established in North Queensland in competition with the private sector.  It will, however, be involved in supervising future contracts and other tasks associated with the management and development of services in North Queensland.

8.Medtek’s request to be reinstated as an equipment supplier is currently being negotiated with your company ...

9.Biomedical North Queensland has been awarded work on the basis of their offer to PL 121/1/1 and have been deemed most advantageous for the greater portion of such service sites on the last three invitations.”

That letter can only be construed as a decision against awarding any contract pursuant to tender PL 121/1/1 to the applicant.

It would seem that at a meeting on 2 May 1997 such advice had been given verbally to the applicant.  By letter dated 22 May 1997 solicitors for the applicant wrote to the respondents asserting that “you advised our client that it would no longer be the provider of Biomedical Engineering Services for the Townsville District Health Service” and requesting “that you provide to us within 28 days a written statement of reasons as to why our client was not successful in Tender No PL 121/1/1.”  That letter apparently crossed with the respondents’ letter of even date.  By fax of 23 May 1997 the applicant was informed that the respondents’ letter of 22 May 1997 would meet the request contained in its solicitor’s letter of 22 May 1997.

Then in a fax of 26 May 1997 the solicitors for the applicant wrote to the respondents as follows:

“With respect, the general matters raised in the letter from the Director-General to our client of 22 May 1997 did not answer our request for a written statement of reasons as to why our client was not successful in the tender.

In accordance with Part 4 of the Judicial Review Act we request that such written statement of reasons be provided.”

That clearly indicates that the applicant treated either or both the oral statement of 2 May and the letter of 22 May as communicating a decision that the applicant’s tender had been rejected.

On 13 June the respondents wrote dealing with the request for reasons as to why “Medtek Pty Ltd was not successful in Tender PL 121/1/1.”  That letter stated that the Act did not require the giving of reasons for such a decision.

It is sufficient to refer in passing to the respondents’ letter to the applicant’s solicitors of 16 June 1997 which again, albeit impliedly, communicated a decision that the applicant had been unsuccessful with its tender.

The first part of the application for statutory review seeks a review of the decision not to award tender TDHS 0101 to the applicant.  There are various grounds stated, but it is not necessary to refer to them.  The relevant decision was made on or about 2 August 1996.  Thereafter further tenders have been called with respect to the same subject matter, though with somewhat different specifications.  The applicant has lodged an offer with respect to each of those later tenders.

Section 26 of the Act provides that an application for statutory order of review must be made within 28 days of the making of the decision.  It should be pointed out that this was not a situation where the decision maker had to, or could be required to, give reasons for the decision (see s.31 and s.13 of Schedule 2 of the Act).

Given the events which have occurred since August 1996, including the conduct of the applicant, I am of the view that this is not an appropriate case in which to grant an extension of time pursuant to s.26.  The subject matter of tender TDHS 0101 is now irrelevant; it has been superseded by subsequent specifications.  In those circumstances it is pointless reviewing the decision to refuse the applicant’s tender in August 1996.

If an extension of time is not granted on the applicant’s summons of 11 July 1997 then there is no viable application before the court with respect to the first part of the application.  In those circumstances the ground alleged in paragraph (a)(iv) of the Notice of Motion is established and the first application should be dismissed.

The application in so far as it relates to tender PL 121/1/1 alleges a failure by the respondents to make a decision with respect thereto.  The primary attack mounted by the respondents was that a decision whether or not to accept the applicant’s offer was not a “decision to which this Act applies” within s.4 of the Act.  Relying on the single judge decisions in Concord Data Solutions Pty Ltd v. Director-General of Education (1994) 1 Qd. R. 343 and KC Park Safe (Brisbane) Pty Ltd v. Cairns City Council (1997) 1 Qd. R. 497 counsel for the respondents submitted that this was not a decision within s.4(a) - “a decision of an administrative character made ... under an enactment”. Counsel for the applicant submitted that those decisions were incorrectly decided and that I ought not follow them. It is my understanding that the decisions referred to have been followed in a number of unreported cases. In the circumstances I am not prepared to review the correctness of those decisions; if they are to be overturned that must now be done by the Court of Appeal.

The applicant relied on an alternative submission that the decision was caught by s.4(b) - “a decision of an administrative character made ... by an officer or employee of, the State or a State authority ... under a non-statutory scheme or program involving funds that are provided or obtained ... out of amounts appropriated by Parliament.”  If that were the only issue on the motion to strike out I would be prepared to hold that the question was fairly arguable and that in consequence the application ought not be summarily dismissed.

The major problem with the second application is that is dependent upon there being a failure by the respondents to make a decision, whereas, as indicated above, there has been a clear decision made and the applicants have acknowledged that a decision rejecting the tender has been made.  Again it was not a decision for which reasons were required.

It seems clear to me that if a decision has been made then the application cannot be interpreted as an application to review that decision.  Given the material to which I have referred above, all of which can be found in affidavits filed in support of the application, there is no doubt that a decision rejecting the applicant’s offer has been made.  In those circumstances the matter comes within ground (b)(iii) of the respondents’ Notice of Motion - there has been no unreasonable delay in making a decision and there is no reasonable basis disclosed for the application.  In the circumstances the second application should also be dismissed.

My orders will therefore be:

·Dismiss the summons of 11 July 1997, no order as to costs.

On the Notice of Motion:

·Order that the application for Statutory Order of Review be dismissed with costs.