Neviskia Pty Ltd v Podger, the Secretary of the Commonwealth Department of Health and Aged Care

[2000] FCA 1791

FEDERAL COURT OF AUSTRALIA

Neviskia Pty Ltd v Podger, The Secretary of the Commonwealth Department of Health & Aged Care [2000] FCA 1791

NEVISKIA PTY LTD v ANDREW PODGER (AS THE SECRETARY OF THE COMMONWEALTH DEPARTMENT OF HEALTH AND AGED CARE)
V 923 OF 2000

SUNDBERG J
11 DECEMBER 2000
MELBOURNE

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	V 923 OF 2000

BETWEEN:	NEVISKIA PTY LTD (ACN 006 552 763) APPLICANT
AND:	ANDREW PODGER (AS THE SECRETARY OF THE COMMONWEALTH DEPARTMENT OF HEALTH AND AGED CARE) RESPONDENT

JUDGE:	SUNDBERG J
DATE OF ORDER:	11 DECEMBER 2000
WHERE MADE:	MELBOURNE

THE COURT ORDERS THAT:

1.The motion, notice of which is dated 28 November 2000, be dismissed.

2.The applicant pay the respondent’s costs of the motion.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	V 923 OF 2000

BETWEEN:	NEVISKIA PTY LTD (ACN 006 552 763) APPLICANT
AND:	ANDREW PODGER (AS THE SECRETARY OF THE COMMONWEALTH DEPARTMENT OF HEALTH AND AGED CARE) RESPONDENT

JUDGE:	SUNDBERG J
DATE:	11 DECEMBER 2000
PLACE:	MELBOURNE

REASONS FOR JUDGMENT

1. By its Application the applicant alleges that decisions made by the respondent under ss 65 and 67 of the Aged Care Act 1997 (“the Act”) were in three respects an improper exercise of power for the purposes of s 6(1)(e) of the Administrative Decisions (Judicial Review) Act 1977 (“the ADJR Act”). The first is that each was an exercise of power for a purpose other than that for which the power is conferred. The second is that the exercise of power was in each case so unreasonable that no reasonable person could have so exercised the power. The third is that there was an abuse of power. The particulars of this ground are as follows:

   ·when the respondent made the decisions he knew or ought to have known that the findings on which it was based were the subject of proceedings before the Administrative Appeals Tribunal (“the AAT”) fixed for hearing on 20 November 2000

   ·the respondent knew or ought to have known that the AAT hearing had been expedited so that the issues before the Tribunal might be determined before 1 January 2001, being the date by which the applicant was required to be accredited under the Act: ss 41 and 42 of the Act

   ·when the respondent made the decisions he intended to enforce them regardless of the outcome of the AAT proceedings

   ·when the respondent made the decisions he knew or ought to have known that the applicant had no course available to it under the Act to have the decisions reviewed before 1 January 2001

   ·when the respondent made the decisions he knew or ought to have known that they would defeat the applicant’s objective of obtaining the AAT’s decision on the issues before it.

   The decisions in question are

   ·a decision dated 3 November 2000 made under s 67‑1(2) of the Act that the applicant was guilty of non‑compliance with its responsibilities under s 54‑3 of the Act by not complying with the Residential Care Standards

   ·a decision of the same date made under s 67‑1(2) that by reason of the non‑compliance there is an immediate and severe risk to the health, safety and well‑being of the persons to whom the applicant is providing care at its nursing home

   ·a decision of the same date made under ss 65‑1 and 66‑1(d) to impose sanctions by revoking the allocation of five places allocated to the applicant

   ·a decision dated 10 November 2000 made under s 67‑3 that the applicant has been guilty of non‑compliance with its responsibilities under s 54‑1(e) by not complying with the Residential Care Standards as notified to the applicant by a notice of intention to impose sanctions.

2. By motion on notice the applicant seeks an order under s 15(1)(a) of the ADJR Act suspending the operation of the decisions, an order under s 15(1)(b) of the ADJR Act staying all proceedings under the decisions, and an order restraining the respondent until the determination of the Application from taking any action against the applicant in reliance on the decisions or any of the findings contained therein, or using or publishing any of the decisions or findings.

3. Counsel for the applicant submitted that it was arguable that an unfair exercise of power can amount to an abuse of power or an exercise of power for a purpose other than that for which the power is conferred.  Reference was made to Sunshine Coast Broadcasting Ltd v Duncan (1988) 83 ALR 121 at 130 where Pincus J referred to two decisions of the House of Lords that support this view. His Honour did not need to decide whether those decisions should be followed in dealing with allegations of abuse of power under the ADJR Act. But he did say they were persuasive authority. It was then submitted that there was a serious question to be tried, or a point of substance to be argued, as to whether the respondent’s conduct in making repetitive decisions adverse to the applicant was oppressive and unfair, and produced manifest injustice, so as to be an abuse of power, the exercise of power for a purpose other than that for which it was conferred or behaviour that no reasonable person could engage in. For the purpose of the present application for interlocutory relief I am prepared to accept that an unfair exercise of power can amount to an abuse of power for the purpose of s 6(2)(j) of the ADJR Act.

4. Division 2 of Part 3 of the Accreditation Grant Principles 1999 made under s 96‑1(1) of the Act provides for a process of continuous improvement of non‑accredited residential care services before 1 January 2001. The accreditation body is empowered to carry out regular supervision of a residential care service to ensure compliance with residential care standards: s 3.3. The accreditation body may arrange for a review audit if it believes that residential care standards are not being complied with: s 3.4(1). The assessment team must give the accreditation body and the approved provider a written report about the review audit: s 3.5. The report must include a recommendation about any matters in respect of which improvements would be necessary: s 3.6. If the accreditation body is not satisfied that the level of care provided by a service complies with the standards, it must notify the Secretary of the Department and the approved provider and give particulars of the way in which the level of care is not satisfactory. If as a result of an audit the accreditation body finds evidence of a serious risk to the health, safety or well‑being of a person receiving care, s 4.2 (which is in Part 4 of Division 2) requires it to inform the Secretary. The report must include specific information about the reasons for the risk, recommendations about whether sanctions should be imposed, a statement of any standards that have not been complied with, and any “improvements outline” the accreditation body considers appropriate. See also s 4.3.

5. The decisions complained of were made under ss 65 and 67 of the Act. Section 65‑1 empowers the respondent to impose sanctions on an approved provider if the provider has not complied, or is not complying, with one or more of its responsibilities under the Residential Care Standards for which s 54‑3 provides. Section 66 lists the sanctions that can be imposed. They include revocation of places allocated to a provider. Section 67 deals with the procedure for imposing sanctions. Section 67‑1(1) requires the respondent to give the approved provider certain notices before imposing sanctions ‑ notice of non‑compliance (s 67‑2) and notice of intention to impose sanctions or to remedy non‑compliance (ss 67‑3 and 67‑4). However, sub‑s (2) provides that those notices need not be given if the respondent 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”. Section 67‑2(1) empowers the respondent, if satisfied that an approved provider has not complied with, or is not complying with, one or more of its responsibilities under the quality of care provisions, to give the provider a notice of non‑compliance. The notice must, amongst other things, set out what sanctions can be imposed on the provider in respect of the non‑compliance, and invite the provider to make submissions on the matter. Section 67‑3(1) empowers the Secretary to give the approved provider a notice of intention to impose sanctions in respect of non‑compliance with a provider’s responsibilities under the quality of care provisions if the provider has not made any submissions, or whose submissions are not considered satisfactory. Sub‑section (2) prescribes the contents of the notice. Section 67‑5 requires the respondent to notify the provider of a decision to impose a sanction in respect of non‑compliance with the provider’s responsibilities.

6. The material before me discloses that on several occasions the Secretary has exercised his powers under ss 65 and 67 as a result of audits and reports carried out under the Principles. All that appears is that those responsible for the process of continuous improvement, regular supervision and auditing have assiduously carried out their duties under the Principles, and that the respondent has similarly carried out his duties and exercised his powers under ss 65 and 67 of the Act. The proper discharge of those duties and exercise of those powers will necessarily involve a series of decisions in relation to a provider who is found be non‑compliant. The applicant has not satisfied me that there is a serious question to be tried, or a point of substance to be argued, as to whether the decisions complained of were so oppressive and unfair as to amount to an abuse of the respondent’s powers, the exercise of those powers for an impermissible purpose, or the exercise of those powers in so unreasonable a manner that no reasonable person could have so exercised them.

7. I accept that the applicant will suffer hardship and economic loss if the decisions complained of remain on foot, including the specific disadvantage that the decisions will subsist when its accreditation application is determined.  But this is not a case in which hardship or potential loss can make it unnecessary for an applicant to establish a serious question or a point of substance.  It is true that the respondent will suffer no loss in the ordinary sense if the orders sought are made.  But there is a very strong public interest in ensuring that nursing home standards are complied with, that appropriate monitoring and auditing takes place, and that sanctions are imposed on those who fail to comply with the required standards.  The applicant must be held to the general requirement that it show a serious question or point of substance, even though it will suffer hardship or loss or damage if the relief sought is not granted, before it is appropriate to restrain the respondent from carrying out his duties and exercising his powers or staying or suspending his decisions.  I note in passing that there have been instances of successful accreditation notwithstanding the subsistence of sanctions against applicants.

8. The application must be dismissed with costs.

I certify that the preceding eight (8) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Sundberg.

Associate:

Dated:             11 December 2000

Counsel for the Applicant:	B Monotti
Solicitor for the Applicant:	C R Lloyd
Counsel for the Respondent:	F Hampel QC and D Murphy
Solicitors for the Respondent:	Clayton Utz
Date of Hearing:	5 December
Date of Judgment:	11 December