Queensland Teachers’ Union Health Fund Limited v; Private Health Insurance Administration Council
[2000] FCA 767
•8 JUNE 2000
FEDERAL COURT OF AUSTRALIA
Queensland Teachers’ Union Health Fund Limited v
Private Health Insurance Administration Council [2000] FCA 767ADMINISTRATIVE LAW – judicial review – whether irrelevant consideration taken into account – whether relevant consideration not taken into account – whether decision was within power of decision maker – use of policy in decision making – whether policy inconsistent with principles determined pursuant to statute – whether policy imposed arbitrary restriction on decision maker – whether decision maker was in a fiduciary relationship with the respondent.
National Health Act 1953 (Cth): s 73BC(5B), (5C) & (5E), s 73BC(6) & (8) s 73BC(12), s 82G(1)(r)
QUEENSLAND TEACHERS’ UNION HEALTH FUND LIMITED v PRIVATE HEALTH INSURANCE ADMINISTRATION COUNCIL
V 392 of 1999GOLDBERG J
MELBOURNE
8 JUNE 2000
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
V 392 of 1999
BETWEEN: QUEENSLAND TEACHERS UNION HEALTH FUND LIMITED
(ACN 085 50 376)
Applicant
AND:PRIVATE HEALTH INSURANCE ADMINISTRATION COUNCIL
Respondent
JUDGE:
GOLDBERG J
DATE OF ORDER:
8 JUNE 2000
WHERE MADE:
MELBOURNE
THE COURT ORDERS THAT:
1. The application is dismissed.
2.The applicant pay the respondent’s costs of the application including reserved costs.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules
IN THE FEDERAL COURT OF AUSTRALIA
DISTRICT REGISTRY
V 392 of 1999
BETWEEN: QUEENSLAND TEACHERS UNION HEALTH FUND LIMITED
(ACN 085 50 376)
Applicant
AND:PRIVATE HEALTH INSURANCE ADMINISTRATION COUNCIL
Respondent
JUDGE:
GOLDBERG J
DATE:
7 JUNE 2000
PLACE:
MELBOURNE
REASONS FOR JUDGMENT
Introduction
The applicant, Queensland Teachers’ Union Health Fund Limited, has applied to the Court pursuant to the provisions of the Administrative Decisions (Judicial Review) Act 1974 (Cth) to review the decision of the respondent, Private Health Insurance Administration Council (“the Council”), made on 4 November 1998, under Private Health Insurance Administration Council Rule No 4. The Council’s decision was in the following terms:
“I refer to your submission to Council requesting that an adjustment be paid to your organisation for the 1996/97 financial year.
Council has considered the submission for an adjustment of $280,014.00 for the 1996/97 year, and has decided not to make a determination under the Private Health Insurance Administration Council Rule No. 4 that an adjusting amount be paid to your organisation.
Having regard to your submission, Council did not consider that exceptional circumstances as required under Council Rule No. 4 existed.”
The effect of the decision was that the Council decided not to exercise its power pursuant to clause 4 and clause 5 of Rule No 4 to make a determination under s 73BC(12) of the National Health Act 1953 (Cth) (“the Act”) that an amount be paid out of the Health Benefits Reinsurance Trust Fund (“the Trust Fund”) to the applicant.
The application was heard at the same time as applications to review similar decisions of the Council by Australian Unity Health Limited (V 393 of 1999) Government Employees’ Health Fund Limited (V 391 of 1999) and Manchester Unity Friendly Society in NSW Limited (V 498 of 1999). The four applicants were represented by the same solicitors and counsel. The issues which are to be resolved are common to each application as in each case the Council’s decision was in the same terms save for the amount of the adjustment sought and the years to which the adjustments related.
Apart from the facts particular to the applicant, the findings of fact, reasoning and conclusions I have reached in the application by Australian Unity Health Limited ([2000] FCA 769) apply equally to this application and I incorporate those findings of fact, reasoning and conclusions in these reasons for judgment.
Background
The applicant is a registered health benefits organisation (“RHBO”) and carries on a health insurance business. Prior to 1 July 1999 the applicant operated as an RHBO under the name “Queensland Teachers Union Health Society”. The applicant converted to a company on 1 July 1999. It has been a “restricted membership” RHBO since 1972. It operates primarily in Queensland and has over 14,700 policies covering over 35,500 people. The applicant also manages the Queensland operations of Healthguard Benefits Limited (“HHB”) on behalf of the Hospital Benefits Fund (“HBF”) of Western Australia. HHB is a small “open” membership fund. The applicant customarily pays money into the Trust Fund, rather than receiving payments from it, as it has a comparatively small number of claims that are subject to reinsurance.
Returns containing data on membership and benefits to members were submitted to the Council by the applicant on a quarterly basis as required. On 1 October 1998 the applicant made an application to the Council for adjustments to its reinsurable claims for the financial year ending 30 June 1997. The adjustments to its claims sought by the applicant for the 1996/97 financial year were $280,014.00.
The request for adjustments arose out of the discovery, in May and June 1998, of problems with the applicant’s computer system which calculated the reinsurance amounts the applicant would be eligible to claim from the Trust Fund. The software is specific to the health insurance industry and is used by several other health funds. The system was supplied by Sanderson Wacher Pty Ltd (formerly Wacher Pty Ltd) (“Wacher”) and was installed in approximately October 1996 but was not in operation until 1 November 1996. The new system was used to calculate the reinsurance amounts included in quarterly returns for the quarters ending December 1996, March 1997 and June 1997.
The applicant outsources its information technology to the Australian Health Management Group (“AHMG”). It was AHMG who notified the applicant of problems in the system which lead to Wacher and AHMG making changes to the relevant programs. By 27 July 1998 testing conducted by the applicant and AHMG on the latest versions of the computer programs confirmed that the changes had corrected the problem.
The applicant first notified the Council of the errors discovered in the recording of reinsurable claims by letter dated 28 July 1998. An audit conducted by the applicant accountants confirmed that the reinsurable claims for the four quarters ending 30 June 1997 were understated by $280,014.00. The applicant sought a formal adjustment for that amount by its letter dated 1 October 1998, attaching the audit report. As noted earlier, the refusal of that request was made by letter dated 4 November 1998.
For the reasons given in the application by Australian Unity Health Limited against the Council ([2000] FCA 769) the application will be dismissed with costs.
I certify that the preceding nine (9) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Goldberg. Associate:
Dated: 8 June 2000
Counsel for the Applicant: Mr J W K Burnside QC and Mr S Senathirajah Solicitor for the Applicant: Corrs Chambers Westgarth Counsel for the Respondent: Mr R R S Tracey QC and Mr T J Ginnane Solicitor for the Respondent: Phillips Fox Date of Hearing: 20 March 2000 Date of Judgment: 8 June 2000
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