Re Metropolitan Health Service Board;

[2003] WASCA 123

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

TITLE OF COURT : THE FULL COURT (WA)

CITATION : RE METROPOLITAN HEALTH SERVICE BOARD;
EX PARTE REED [2003] WASCA 123

CORAM	: MALCOLM CJ WALLWORK J MURRAY J
HEARD	: 8 AUGUST 2002
DELIVERED	: 18 JUNE 2003
FILE NO/S	:  CIV 1120 of 2001
MATTER	:  Application for Writ of certiorari against the Metropolitan Health Service Board

EX PARTE

WILLIAM DALY REED

Applicant

AND

METROPOLITAN HEALTH SERVICE BOARD

Respondent

Catchwords:

Administrative law - Certiorari - Decision to revoke clinical privileges attached to clinical status of medical practitioner at teaching hospital - Whether jurisdictional error - Whether denial of procedural fairness - Legitimate expectation discussed - Meaning of "Wednesbury unreasonableness" discussed

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Legislation:

Financial Administration and Audit Act 1985 (WA)
Hospital and Health Services Act 1927, s 7, s 15(2), s 18(1)(a)(i), s 18(1a)

University Medical School, Teaching Hospitals, Act 1955, s 4(1)(c)(iv)

Result:

Order nisi discharged

Category: B

Representation:

Counsel:

Applicant	:	Mr M J McCusker QC & Mr A D Gill
Respondent	:	Mr R M Mitchell & Ms K E McDonald

Solicitors:

Applicant	:	Slater & Gordon
Respondent	:	State Crown Solicitor

Case(s) referred to in judgment(s):

Ainsworth v Criminal Justice Commission (1992) 175 CLR 564
Annetts v McCann (1990) 170 CLR 596

Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1

KB 223

Craig v State of South Australia (1995) 184 CLR 163
Hot Holdings Pty Ltd v Creasy (1996) 185 CLR 149
Kioa v West (1985) 159 CLR 550
Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24
Minister for Immigration and Multicultural Affairs v Eshetu (1999) 197 CLR

611 Re Minister for Immigration and Multicultural Affairs; Ex parte Lam (2003) 77

ALJR 699

Re Minister for Immigration and Multicultural Affairs; Ex parte Miah (2001)

206 CLR 57

[2003] WASCA 123

Re Refugee Review Tribunal; Ex parte Aala (2000) 204 CLR 82

Vidyodaya University of Ceylon v Silva [1964] 3 All ER 865

Case(s) also cited:

Ackroyd v Whitehouse (Director of National Parks and Wildlife Service) (1985)

2 NSWLR 239

Amerasinghe v Minister for Immigration, Local Government & Ethnic Affairs

(1991) 33 FCR 30

Anisminic Ltd v Foreign Compensation Commission [1969] 2 AC 147

Bond Corporation Holdings Ltd v Australian Broadcasting Tribunal

(1988) 84 ALR 669

Bond v Australian Broadcasting Tribunal (No 2) (1988) 19 FCR 494

Bromley London Borough City Council v Greater London Council

[1983] 1 AC 768

Carroll v Sydney City Council (1989) 15 NSWLR 541
Chan Yee Kin v Minister for Immigration & Ethnic Affairs (1989) 169 CLR 379
Edelsten v Wilcox & Federal Commissioner of Taxation (1988) 83 ALR 99
Ex parte Wurth; Re Tully & Craig (1954) 55 SR (NSW) 47

Friends of Hinchinbrook Society Inc v Minister for Environment (No 2)

(1997) 69 FCR 28

Galea v Galea (1990) 19 NSWLR 263
Haoucher v Minister for Immigration & Ethnic Affairs (1990) 169 CLR 648
Luu v Renevier (1989) 91 ALR 39

Minister for Immigration, Local Government & Ethnic Affairs v Kurtovic

(1990) 21 FCR 193

National Companies & Securities Commission v News Corporation Ltd

(1984) 156 CLR 296

Prasad v Minister for Immigration & Ethnic Affairs (1985) 6 FCR 155

R v Barnsley Metropolitan Borough Council; Ex parte Hook

[1976] 3 All ER 452

R v Blakeley; Ex parte Association of Architects, Engineers, Surveyors and

Draughtsmen of Australia (1950) 82 CLR 54

Re Global Finance Group Pty Ltd (2002) 26 WAR 385
Russell v Duke of Norfolk [1949] 1 All ER 109
Schmidt v Secretary of State for Home Affairs [1969] 2 Ch 149
Sinnathamby v Minister for Immigration & Ethnic Affairs (1986) 66 ALR 502

Somaghi v Minister for Immigration, Local Government & Ethnic Affairs

(1991) 31 FCR 100

Taveli v Minister for Immigration, Local Government & Ethnic Affairs

(1989) 86 ALR 435

[2003] WASCA 123

Videto v Minister for Immigration & Ethnic Affairs (1985) 8 FCR 167
Yung v Adams (1997) 80 FCR 453

[2003] WASCA 123

MALCOLM CJ

1. MALCOLM CJ: This is an application for a writ of certiorari by Professor William Daly Reed, a professor of medicine at the University of Western Australia, against the Metropolitan Health Service Board ("the Board"). Until the decision of the Board on 22 September 2000 to revoke them, the applicant had been granted, and enjoyed, clinical privileges, the subject of clinical status conferred on him which permitted him to practise medicine at Sir Charles Gairdner Hospital. The purpose of his application is to obtain an order absolute for the issue of a writ of certiorari quashing the decision of the Board.

2              In general terms, the reason for the decision of the Board was that

over a period of some years, the applicant made improper withdrawals from various accounts established within the Hospital administration to which were credited donations by various persons for various purposes associated with the work of the applicant at the Hospital.

1. In summary, the grounds of the application were:

(a)

the Board failed to accord the applicant procedural fairness in deciding to revoke his clinical privileges in that:

(i)	without giving the applicant any prior notice that it proposed to do so; and
(ii)	failed to give the applicant any prior opportunity to give evidence or make submissions on the question whether his clinical privileges should be revoked;

(b)

having regard to the factors in (c) below, no reasonable Board could have concluded that, by making the subject withdrawals, the applicant acted with any impropriety, or with such impropriety that it was appropriate to revoke his clinical privileges;

(c)

the Board erred in revoking such privileges in that it failed to take into account, or give due weight to, the following evidence:

(i)	the funds paid into the accounts from which the alleged improper withdrawals were made, were funds provided by donors, including the applicant, and not the Hospital;
(ii)	one of the donors of substantial funds (Schering- Plough Pty Ltd) had stated that the payment of legal expenses from the funds (the largest of the allegedly improper withdrawals) was "entirely

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consistent with the purpose" of the grant of the
funds;

(iii)      all withdrawals were made openly without concealment of their purpose in the reasonable and bona fide belief that the expenditure was appropriate and within the purpose designated for the relevant account.

(iv)       the Hospital administration, which knew the stated purpose of the accounts, had accepted that the withdrawals were within that purpose;

(v)        the applicant had opened the accounts, stated their respective purposes and listed the types of withdrawals which could be made, without such list being exhaustive;

(vi)       it was at least fairly arguable that the withdrawals in question fell within the broad purpose of the accounts from which such withdrawals were made;

(d)	the Board erred in law in failing to give adequate or any weight to the findings of recommendations of the Clinical Privileges Committee and, in particular, the recommendations that the applicant's privileges should be reinstated and that the Board approve the reinstatement without undue delay;
(e)	the Board erred in law in its decision to revoke the applicant's clinical privileges on the ground of improper withdrawals from the accounts because the relevant funds were not provided by the Hospital, not the property of the Hospital and were beyond the jurisdiction of the Board with the consequence that it was beyond the jurisdiction of the Board to revoke the applicant's clinical privileges by reason of alleged impropriety in dealing with funds which were not the funds of the Hospital;
(f)	the Board had no jurisdiction under the University Medical School Teaching Hospital Act 1955 or the Agreement made between the Board and the University pursuant to that Act, to revoke the applicant's clinical privileges.

4              An order nisi was granted on those grounds on 9 April 2001. This was the return of the order nisi. There seems to have been considerable delay between the obtaining of the order nisi and the hearing by the Full

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Court on the return of the order in August 2002. The reasons for this were not explained. In the meantime, the applicant's position in respect of his clinical privileges at the Hospital has been protected by interlocutory injunctions until the determination of the application for the writ. These have restrained the Board "from making any appointment of a liver transplant Hepatologist which will have the effect of permanently replacing the applicant at the Sir Charles Gairdner Hospital".

5              The application is to be determined on the basis of the statement of

agreed facts which are set out in full in the reasons to be published by Murray J. There is no reason for me to repeat them. Suffice it to say that by a letter to the applicant dated 30 November 1998, he was notified by Dr Diane Davies, Executive Director of Medical Services at the Hospital, that an audit "had found what appear to be significant irregularities" in the expenditure of funds from certain Research and Special Purpose Account numbers 2148, 2205 and 2680. Dr Davies said in the letter that:

"Expenditure on items contrary to the express terms of the establishment of Special Purpose Accounts, may be found to be a misappropriation of funds. If this is found to be the case this could lead to the removal of your clinical privileges."

6              The letter went on to say that expenditure on items contrary to the

express terms of Special Purpose Accounts may be found to be a
misappropriation of funds. It was specifically stated that:

"If this is found to be the case, this could lead to the removal of
your clinical privileges."

7              It was also said that unless the applicant provided a satisfactory

explanation of the items of expenditure set out in the attached schedule, the Hospital intended to apply the process in accordance with cl 4.4-4.6 of the Guidelines for Medical Staff. It was explained that:

"You have 7 days (8 December 1998) in which to show cause as to why this process should not be implemented. Unless you provide a reasonable explanation to justify the reasons for the expenditure of the funds then I will consider whether your privileges should be temporarily suspended in accordance with Clause 4.4, pending a review by the Metropolitan Health Service Board. If so, you will be advised of that decision and you will be entitled to make a request within 7 days to the Chief Executive to convene a Review Committee in accordance with Clause 4.5."

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1. A copy of the Guidelines for Medical Staff was attached together with a schedule.

9              By a letter dated 8 December 1998, the applicant responded to

Dr Davies at some length. Dr Davies replied by letter dated 15 December 1998 to the effect that the allegations were "extremely serious" and that the applicant's response had not explained or justified the expenditure or provided any information or grounds to remove Dr Davies' obligation to proceed with the process under the Guidelines. The result was, as Dr Davies put it:

"I am temporarily suspending your clinical privileges in this Hospital pending the Metropolitan Health Service Board's (MHSB) determination of this matter, as I have formed the view that your actions are inimical to the interests, good name and standing of the Hospital. Accordingly, I am referring this matter to the [Board] for consideration. This suspension of clinical privileges relates to all clinical, teaching, research and administrative functions in this Hospital and is effective from midnight 15 December 1998."

10             Pursuant to cl 4.5 of the Guidelines to Medical Staff, the solicitors for the applicant requested the Chief Executive Officer of the Hospital to convene a Review Committee to assist the Board in making its determination.

11             Murray J has set out the material which was provided to the Review

Committee on behalf of the Hospital. All disputed transactions from the accounts were initiated in writing by the applicant and, in most instances, accompanied by details of the proposed expenditure and its purpose including any invoices or other supporting documents. His Honour has set out the details relating to account 2148 and the transactions which were involved. The same has been done in respect of account 2680 and account 2205.

12             The Review Committee was provided with information regarding

procedures, a report from the Director of Finance and Corporate Information Services on the establishment of research accounts at the Hospital, an audit report and other relevant documents.

13             The applicant was the principal or a co-signatory on a number of

accounts, including those which I have mentioned. In the case of each, the applicant had drawn up the categories of allowable expenditure. The Hospital did not inform the applicant of any objection to those categories.

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All disputed transactions from the accounts had been initiated by the applicant and, in most cases, accompanied by details of the proposed expenditure and its purpose, including any invoices or other supporting documents.

14             Murray J has set out in his reasons the details of the accounts in

question and the subject transactions involving accounts 2148, 2680 and 2205. These accounts were opened on 29 June 1989, 23 September 1997 and 8 September 1992 respectively. There were some other accounts which were University Research Accounts, which were "rationalised" into two accounts, Nos. 408787 and 5383054. These were University Research Accounts in respect of which the University alleged irregularities. There were also allegations of irregularities for which the applicant was said to be responsible in relation to sales tax exemptions under the University Staff Purchase Scheme.

15             In relation to these matters, the University made findings against the

applicant and suspended him without pay for a period of 15 months expiring on 19 September 2001. The applicant appealed against this decision by way of a petition to His Excellency the Governor in his capacity as Visitor to the University. His Excellency appointed Mr Alan Barblett AO as Assessor of the Petition. After a hearing which commenced on 12 June 2001, the decision of the Assessor was delivered on 28 September 2001. So far as is presently relevant, there was a complaint by the Hospital to the University regarding the appointment by the applicant of a Dr Ashley Brown as a temporary lecturer in medicine at the University for a fixed term of 12 months. As part of this appointment, Dr Brown was to perform clinical work as an Honorary Senior Registrar at the Hospital.

16             The Hospital complained to the University that the applicant had

failed to obtain the necessary approval from the Hospital for the appointment which it considered inappropriate and unnecessary. Without an endorsement from the Hospital, Dr Brown would not be entitled to function within the Hospital or be indemnified for the practice there. The Deputy Vice-Chancellor of the University raised a number of "concerns" about which a response was required from the applicant, namely, an approach for approval to use Hepatitis C infrastructure funding to fund the employment of Dr Brown on a basis which would involve misuse of Commonwealth funds; an allegation of failure to consult with Dr Hoffman, the Head of the Department of Gastroenterology, concerning the proposed appointment; the view of the Hospital that Dr Brown was not qualified as a Specialist or Senior Registrar and the appropriate

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requests had not been made to endorse him to practise within the Hospital; that the applicant had made a request and submission for registration with the Medical Board for Dr Brown without reasonable consultation regarding the status of Dr Brown's position in the Hospital; the use by the applicant of the "Department of Hepatology" on Sir Charles Gairdner letterhead when there was no such department; and that the applicant's actions indicated that he was not an appropriate University representative on the Hospital Appointments Committee; and called upon the applicant to provide reasons which should be considered by the University in determining whether or not to continue to endorse him as a University representative on the Appointments Committee.

17             It appears that by a letter dated 12 January 1998, the petitioner

provided a detailed response to Professor Robson as Acting Vice-Chancellor in which he concluded that the Department of Medicine had observed all of the correct processes in the appointment of Dr Brown. The Acting Vice-Chancellor sought and received comment from various persons regarding the allegations. By a letter dated 6 May 1998, the Vice-Chancellor formally censured the applicant in relation to these matters. The Vice-Chancellor also requested that the applicant provide him with reasons why he should remain as a representative of the University on the Hospital Appointments Committee. The applicant did so by letter, but by a letter dated 10 June 1998, the Vice-Chancellor withdrew the applicant's nomination as the University's representative on the Hospital Appointments Committee.

18             Allegations were also made against the applicant regarding the

withdrawal of money from a research account entitled "Liver Research Account RG148". The allegations were communicated to the applicant by letter from the Vice-Chancellor dated 15 December 1998. The substance of the allegations were as follows:

1.          The research account was maintained by the Hospital and contained moneys of the University;

2.          The research account was established for the purpose of "research into various aspects of the immuno pathology of hepatobiliary disorders – journal and professional subscriptions, travel and entertainment expenses, and printing and associated charges"; and

3.          The applicant, on two occasions, withdrew moneys totalling $4762.95 for the payment of personal legal costs

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in connection with a dispute between the applicant and the
Hospital.

19             By the same letter, the Vice-Chancellor informed the applicant that

he was suspended without pay "until further resolution of the matter"
pursuant to cl 12(c) of the relevant award.

20             The applicant denied the allegations and requested that they be

referred to a Misconduct Investigation Committee ("MIC"). The allegations were so referred and first considered by the Committee on 8 January 1999. The Committee determined that the suspension without pay should be revoked from the date of its effect on condition that the applicant undertake that he would not authorise further payments from the trust account in question. The Vice-Chancellor implemented that decision by letter to the applicant dated 11 January 1999 and the applicant provided the necessary undertaking in writing on 13 January 1999.

21             By a letter dated 16 February 1999, the Vice-Chancellor informed

the applicant of amendments to the allegations regarding the relevant research account to the effect that the research account contained moneys "of the University of Western Australia and/or moneys of Sir Charles Gairdner Hospital that you had access to and use of in the course of your employment". The applicant objected to the amendments, but agreed to co-operate with the Committee in order to resolve the matter quickly on the understanding that there would be no further amendments or fresh allegations. It was contended that the moneys in question were used properly. In a report dated 16 April 1999, the Committee concluded that the two payments to Clayton Utz from the account were made and were authorised by the applicant, but were not an appropriate use of the funds in that they did not fall within the terms of the account and were primarily in defence of the applicant's own interests. The Committee also found that there were mitigating circumstances, namely, the significant history of unresolved disputation about, and the management of the relevant accounts, which provided "some foundation" for the applicant's contention that his actions were reasonable. It was stated by the Committee, however, that:

"We are not of the opinion that the circumstances justify the [applicant's] action. An experienced Professor of high standing should have asked the question, 'Is this an appropriate use of money from the research account?' We believe that had this question been asked, then an answer in the negative should and would have been reached. It was not appropriate to use research fund money for these particular purposes. As we have

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indicated above, we doubt whether this crucial question was
asked. We believe, however, it should have been.

We note again that the allegation before us relates to just two occasions where money from a research trust account has been used for personal purposes. We are of the opinion that [the applicant's] actions in relation to these two payments, although conduct which was unsatisfactory, was not of the kind which of itself constitutes a serious impediment to the carrying out of his academic duties. There was no attempt to cover up the payments (which might imply deceitful intent). There is apparently no question as to the [applicant's] abilities as a medical academic. We believe that these are factors which should be taken into account when the University considers what action it should take."

22             The Vice-Chancellor invited the applicant to comment upon the

Committee's report which he did through his advocate, Associate Professor Fayle. By a letter dated 12 May 1999, the Vice-Chancellor informed the petitioner that his actions constituted misconduct. He also informed the petitioner of his determination that the appropriate penalty was suspension without pay for a period of three months. The period of the suspension commenced from the beginning of the first pay period after the date of the letter.

23             Reference is made in the materials concerning a letter to the

Committee for Human Rights of the University informing the Committee that two research projects had been suspended following the observation of possible drug-related tumours in rodents. It was a condition of approval of the studies by the Committee that it be advised of such events within 72 hours. The letter was on University letterhead and the applicant described himself as a Professor of Medicine. By a letter to the applicant dated 17 March 1999, the Vice-Chancellor alleged that the applicant had breached his suspension by writing that letter on University letterhead and signing it as a "Professor of the University". The applicant responded rejecting the Vice-Chancellor's allegations that his actions contravened his suspension. He requested that the matter be referred to a Misconduct Investigation Committee if the Vice-Chancellor was not satisfied with his response. By a letter dated 21 April 1999, the Vice-Chancellor informed the applicant that he had decided to formally censure him for having written the letter to the Committee for Human Rights.

[2003] WASCA 123

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1. There were a number of other allegations regarding six transactions on two trust accounts between 22 August 1996 and 2 December 1997 relating to parking fees, the subject of trust account 2148 and trust fund/endorsed research project for the Liver Research Foundation of Western Australia, account number 35205 relating to a series of transactions. As a result of a report from the Committee and after giving the applicant's representative the opportunity to comment, the Vice-Chancellor informed the petitioner that his actions constituted misconduct in a letter dated 31 August 1999. The applicant was suspended without pay for three months. There was a further allegation that the applicant had breached his suspension by his acceptance of an invitation to speak at an international conference by a letter written on University letterhead in which he described himself as a Professor of Medicine. This letter was sent by a University fax machine. The applicant was censured by the Vice-Chancellor in respect of this matter.

25             There were also allegations that between 22 January 1998 and

8 December 1998, the applicant inappropriately used the University's sales tax exemption certificate in relation to the purchase of computer equipment, which was not for University use but a private purchase for a third party; a further purchase of equipment supplied to the applicant's private rooms at the Hollywood Specialist Centre; and on two other occasions the applicant had taken advantage of the exemption in respect of office equipment and furniture purchased and delivered to his private rooms. The allegations were referred to a Misconduct Investigation Committee.

26             The Committee deferred its investigation on the basis that the

University's solicitor had referred the same allegations to the Australian Federal Police for investigation in May 1999. In the result, the Commonwealth Director of Public Prosecutions decided not to prosecute the applicant for alleged evasion of sales tax. The University decided to proceed with the hearing of the allegations by the Misconduct Investigation Committee. Adverse findings were made to the effect that the applicant had engaged in transactions which were unauthorised by the University. As far as the fourth allegation was concerned, it was found that the applicant benefited from the purchase of the office furniture and photocopier without the payment of sales tax and was then able to use them for purposes other than University-related work. The Committee was unable to reliably ascertain the extent to which the items were used for non-University purposes.

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27             In the meantime, the sales tax in relation to the office furniture had

been paid and the applicant had made an offer to pay whatever sales tax was due on the photocopier. The applicant maintained that he believed that there was a University staff purchase scheme which permitted such tax exempt purchases. The Committee found that the applicant had a clear obligation to exercise more care and give greater attention to comply with the University's financial procedures in making or authorising these purchases. In the result, the Vice-Chancellor concluded that the applicant's actions constituted "a severe form of misconduct" though not amounting to serious misconduct. Submissions regarding the penalty were invited. After submissions had been taken into account, the Vice-Chancellor determined that the applicant should be suspended without pay for nine months from 19 December 2000.

28             Finally, allegations concerning the respondent's actions in providing

the names and addresses of patients to the Australian Medical Association for the purpose of raising money for the applicant's "legal defence fund" resulted in further allegations of misconduct. Contributions were sought for the applicant's defence against the Hospital's removal of his clinical privileges and the University's suspension of him for nine months without pay, including pursuing "legal avenues, including an appeal to the Supreme Court of Western Australia". Action was taken in the Supreme Court by the applicant against the Metropolitan Health Board in relation to the withdrawal of clinical privileges by the Hospital.

29             The University informed Professor Reed's solicitors that a

Mr Walton had received a fundraising letter from the applicant. He had one consultation with the applicant as a private patient. The Acting Vice-Chancellor indicated to the applicant in a letter dated 26 October 1999 that he had been advised that the use of patient information in a call for funds for any purpose by a medical practitioner is unprofessional and that the University did not regard it as "proper behaviour for its clinical medical staff".

30             The applicant denied the allegation and requested the matter be

referred to the Misconduct Investigation Committee. The Vice-Chancellor informed the applicant on 30 November 1999 of his decision to refer the allegations to the Misconduct Investigation Committee. On the basis of further inquiries and consideration, the Vice-Chancellor later decided not to refer the allegations. However, on 17 February 2000, he informed the applicant that he remained of the view that the applicant's actions in using private patient information for

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soliciting funds were inappropriate and not regarded as proper behaviour
for a University employee.

31             There was then an appeal by the applicant to the Visitor of the

University which was referred to an Assessor. With one exception, the Assessor concluded on 28 September 2001 that the decisions of the Vice-Chancellor should stand and the applicant's claims for relief should be denied. The exception was in relation to the penalty imposed in respect of the last of the allegations to which I referred, namely, the allegations of misconduct related to the misuse of the University's sales tax exemption status. All of the other findings were upheld.

32             In the meantime, the Review Committee conducted hearings on

12 January and 29 March 2000 and submitted a report to the Board dated 7 June 2000. The applicant was represented at the hearings by Senior Counsel. The ultimate question for the Review Committee was whether the applicant was a "fit and proper person" to hold clinical privileges at the Hospital. The report of the Committee noted that all of the allegations against the applicant related to expenditure he authorised from the various research or trust accounts which were said to be "under the control of" the Hospital. In all cases, there was no dispute that the expenditure was incurred and authorised by the applicant. The Committee considered that the issue before them was the appropriateness of the expenditure. Witnesses were called and the proceedings were recorded on transcript. The proceedings of the Review Committee have been detailed in the reasons to be published by Murray J. In the result, the Review Committee recommended to the Board that the applicant's clinical privileges be reinstated "without any undue delay", but with conditions in relation to the use of the particular accounts involved and generally in respect of such accounts, described as being "research and trust accounts". It reached this conclusion notwithstanding that the Committee was of the view that in relation to the accounts, a number of items of expenditure were inappropriately authorised. These were as follows:

Research Account 2148: Liver Research Account

(1)	1997 parking fees at Sir Charles Gairdner Hospital - $221 paid in December 1996;
(2)	a farewell gift for Dr Alison Brind - $800 paid on
26 April 1997;
(3)	farewell drinks for Ms Fran Geste - $185.15 paid on 22 October 1997;

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(4)	a gift for Ms Fran Geste - $190 paid on 2 December 1997;
(5)	legal fees and disbursements - $2609.70 on 30 April 1998;
(6)	legal fees and disbursements - $2153.25 on 14 August 1998.

33             So far as the legal fees were concerned, the Review Committee

regarded that expenditure as completely inappropriate and without any justification. It also regarded the use of research funds for personal legal expenses, relating to a case initiated by Professor Reed against the Metropolitan Health Services Board in relation to a decision that was made at Sir Charles Gairdner Hospital ("SCGH") "as a very serious matter".

Trust Fund 2680: University Department of Medicine Teaching Account

34             The purpose of this account was to facilitate "contract payments for

clinical teaching and other departmental expenditure". Allowable items of expenditure were contract payments, payments for teaching, research and services as well as for travel and entertainment. The Review Committee concluded that the following items of expenditure from this account were inappropriate and inconsistent with the purpose of the trust fund, namely:

(1) wines, etcetera, for a farewell function for Mrs Judy Featherstone on 29 September 1997 for an amount of $357.76;

(2) a farewell function at a local restaurant for Mrs Featherstone on 26 September 1997 for an amount of $312; and

(3) a gift for Mrs Featherstone on 26 September 1997 for an
amount of $139.15.

Research Account 2205 (formerly 35205): Liver Research Foundation of
Western Australia

35             This trust account was opened in 1992 at the applicant's request. It

was established to receive donations for the purpose of liver research from the friends and the family of a former patient of the applicant. The purpose of the account was to "promote liver research, in particular research into liver transplantation". Allowable items of expenditure were the employment of research staff, the purchase of equipment and consumables and other capital expenditures related to research. The findings of the Committee were as follows:

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(1) expenditure on a dinner at the applicant's house for Professor and Mrs Juan Rhodes on 5 August 1996 in an amount of $1278 was inappropriate and inconsistent with the purpose of the research account.

Professor Rhodes was a distinguished Spanish hepatologist visiting Perth. He gave a series of lectures and seminars at the Hospital on 5 August 1996. The expenditure exceeded relevant Hospital guidelines and the applicant did not seek approval from the appropriate Clinical Service Unit co-directors.

(2)	Expenditure on a lunch for Professor and Mrs Juan Rhodes on 6 August 1996 for an amount of $122.35.
The Committee regarded this expenditure as inappropriate and inconsistent with the purpose of the research account.
(3)	Funeral costs for the funeral of Mrs Anne Newing on 7 February 1997 for an amount of $2665.
The Committee considered this expenditure inappropriate. Mrs Newing was a patient of the Liver Transplant Unit who died in January 1997 in the course of re-transplantation. The applicant told the Review Committee that it was agreed that the Liver Foundation of Western Australia (Inc) would assist in the expenses of Mrs Newing's funeral. The applicant did not draw any distinction between the funds held in this account and the funds of the Liver Foundation, despite the fact that the Liver Foundation was incorporated some time after the funds were donated and the trust funds were not held in the Foundation's bank account in accordance with the Rules of the Foundation.

36             While the Review Committee considered this expenditure was

inappropriate, it was not of the view that it necessarily constituted a serious breach of the expenditure guidelines. It was noted that the documentation of the sequence of events was, regrettably, not clear. In that case, the Committee merely noted the "inappropriateness" of the expenditure.

37             The Committee concluded that the allegations against the applicant

were "extremely serious", but acknowledged that none of them reflected
on his clinical competence.

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38             The Committee went on to consider whether the applicant was a "fit

and proper" person to hold clinical privileges at the Hospital. It considered that the temporary suspension of the applicant's clinical privileges had been in the spirit of cl 4.4 of the Hospital's Guidelines for Medical Staff which required those holding clinical privileges at the Hospital to protect the interests of " … patients, staff or the interests, good name and standing of the Hospital". The Committee found that the applicant's behaviour "did not meet the spirit of this requirement". It found that all of the expenditure to which I have referred were inappropriate and inconsistent with the purpose of the research and trust accounts. Further, it was found that by authorising all of the expenditure, other than the expenditure on legal fees and disbursements to Clayton Utz, the applicant's behaviour constituted misconduct. In respect of the expenditure on legal fees and disbursements, the Committee found that his behaviour constituted serious misconduct. In determining what action should be recommended, the Committee then went on to balance the matters against the applicant with those in his favour. As the Committee saw the various considerations to be weighed were:

"On the one hand, the Review Committee has had to consider:

· the seriousness of the allegations and, in particular, the Review Committee's view that [the applicant's] behaviour constitutes either misconduct or serious misconduct.

· [the applicant's] reluctance at either of the two hearings conducted by the Review Committee to admit or concede that he had done anything wrong.

· the very clear evidence which the Review Committee agreed with, provided by Clinical Professor Peter Thompson about what he understood to be authorised and non-authorised expenditure from research and trust accounts controlled by SCGH.

· the history of disputation (over many years) between Professor Reed and senior clinical and non-clinical managers at SCGH.

On the other hand, the Review Committee acknowledges that:

· [the applicant's] clinical privileges have been
suspended from midnight on Tuesday, 15 December

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1998 – a period of approximately 18 months. The delays in resolving this matter have not been the fault of the Review Committee, which has always been anxious to resolve these matters as quickly as possible.

· despite strenuous efforts by the Hospital to maintain confidentiality, there has been some media comment about these issues which the Review Committee acknowledges has affected [the applicant's] reputation.

· these allegations against [the applicant] are the first to have been documented in such a thorough way and therefore the history of previous long-standing disputation must be regarded as a secondary rather than a primary concern to the Review Committee.

· SCGH, the University Department of Medicine and [the applicant] must, in the spirit of professional behaviour and collegiate good will, go forward rather than dwell on matters of history.

· [the applicant] has been disciplined by UWA in respect of these allegations and has repaid some of the money, including the legal fees and disbursements.

Taking all of these matters into consideration, the Review Committee is therefore of the view that [the applicant's] clinical privileges at SCGH should be reinstated, albeit with a number of specific qualifications. These qualifications are designed to reflect the seriousness of the matters considered by the Review Committee and to ensure that [the applicant's] future behaviour is consistent with the mission and values of SCGH.

There are many lessons to be learned, on both sides from this experience over the past 18 months or so. Both SCGH and [the applicant] will have to strive to make sure that these lessons are learned."

1. The Committee then made a series of recommendations to the respondent Board, namely, that the Board:

"(1) Note this report and, in particular, the findings as outlined
in Section 8.

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(2)	Approve the reinstatement of [the applicant's] clinical privileges at Sir Charles Gairdner Hospital, without any undue delay.
(3)	Recommend to the Chief Executive of SCGH that [the applicant] be precluded from exercising any influence or control over any research or trust account under the control of SCGH.
(4)	Recommend to the Chief Executive of SCGH that he put in place a series of regular, ongoing audits of procedures, policies and transactions of all SCGH research and trust account funds.
(5)	Recommend to the Chief Executive of SCGH that six monthly performance reviews (in a format to be specified and agreed by both parties) be conducted with [the applicant] for a period of 2 years after instatement of his clinical privileges at the Hospital. If any issues of significance emerge from these six monthly performance reviews, the Chief Executive of SCGH is to prepare a report for consideration by the Metropolitan Health Service Board without undue delay.

(6) Request that the detailed findings of this Clinical Privileges Review Committee be confidential to both parties. However, if Professor Reed chooses to enter into or allow detailed public comment on these matters, the Metropolitan Health Service Board should consider releasing this report in full.

(7)

Recommend to the Chief Executive of SCGH that he request the Hospital Executive Committee and the Clinical Association Executive of the Hospital to conduct a review of the existing guidelines for medical staff. The review should pay particular attention to clarifying, making more rigorous and separating the way in which clinical issues of concern, as opposed to non-clinical issues of concern, are dealt with under the guidelines. The review should be completed by 31 December 2000.

(8)

Recommend to the Chief Executive of SCGH that he put in place an appropriate regime for evaluating the performance of all clinical staff, including clinical

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academics, by 31 December 2000. The Metropolitan Health Service Board should note that this work has already commenced; it may also have implications or relevance for all facilities under the jurisdiction of the Metropolitan Health Service Board."

40             Finally, the Committee made it clear that nothing in the findings or

recommendations of the Committees should be used by the applicant to appeal against the disciplinary processes and findings of the University of Western Australia Misconduct Investigation Committee in respect of allegations that had been made against the applicant and which had been investigated by those Committees. It was made clear that in reaching its conclusion, the Review Committee had already taken into consideration the disciplinary processes undertaken by the University of Western Australia and the penalties imposed on the applicant. The report was signed by all five members of the Committee.

41             In a document dated 26 June 2000, the applicant responded to the

Report and Recommendations of the Review Committee. This response was put before the Board. The applicant contended in the response that:

(1)	The matter should have been dealt with under the University of Western Australia and Western Australian Teaching Hospital Clinical Academics Supplementation of Salary Agreement, 1996, which required the University and the Hospital to agree on a process for the involvement of the Hospital in a disciplinary procedure.
(2)	All of the applicant's requests in relation to membership of the Review Committee had been denied.
(3)	Crucial evidence on the role of the Hospital's accounting officers was withheld from the Committee to the prejudice of the applicant because of its decision not to hear evidence from the financial witnesses nominated by the applicant.
(4)	The Committee failed to attach due weight to the evidence of the applicant and two other witnesses as to their reliance on the Hospital's accounting officers to advise them whether any application might fall outside the guidelines of a particular trust account.

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(5)	There were serious inconsistencies in the evidence of Mr A Marshall concerning justification for his unauthorised search of Professor Reed's trust accounts. These inconsistencies were overlooked by the Committee and critical evidence from the Finance Officer to the Gastro/Renal CSU was withheld from the Committee (and to the prejudice of Professor Reed) because of this.
(6)	The Committee refused discovery of the other 200-odd trust accounts.
(7)	The Committee misinterpreted the evidence of Clinical Professor P L Thompson which referred only to Departmental or Institute trust accounts administered on behalf of several members.
(8)	The Committee failed to attach due weight to the written statement of the Director of the principal donor of funds to the Liver Research Account concerning his intentions as to how the funds could and should be used.
(9)	The Committee failed to appreciate the impact of the restriction on the applicant's endoscopic facilities in 1997, including evidence contained in statements from several expert medical witnesses.
(10)	The Committee failed to provide adequate reasons as to why it considered the temporary suspension of the applicant's clinical privileges was justified, why it regarded these allegations as extremely serious and its grounds for finding that the expenditure on legal fees constituted serious misconduct.
(11)	With respect to the recommendations of the Committee, it was requested that the reinstatement of the applicant's clinical privileges be comprehensive, that he be allowed to use the SCGH research accounts for the purpose of conducting clinical research, subject to appropriate controls, and that the proposed six-monthly performance reviews be confined to matters which are the subject of the allegations.

(12) We have expressed concern at the reference to reinstatement, albeit with a number of specific qualifications, in the absence of any detail of such qualifications.

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(13)	We have expressed concern at the implication that the history of disputation may have been used against the applicant by the Committee in arriving at its recommendations, and the suggestion that there may have been other allegations against the applicant which had not been thoroughly documented.
(14)	Concern was expressed that in considering the allegations against the applicant and any circumstances in mitigation, the Committee had made no reference in its report to his previous service to the Hospital and the University, or to his clinical academic standing or to the reports of referees.
(15)	Finally, it was submitted that, if the Board was of the view that further action should be taken in relation to the background context of long-standing and ongoing conflict and hostility between, on the one hand, some Hospital-employed Luminal gastroenterologists and, on the other hand, some University-employed hepatologists at the Hospital, these matters should be the subject of a separate, independent inquiry.

42             The applicant, his counsel and solicitors and counsel assisting the

Board met on 26 June 2000. The Chairman, the Hon Ian McCall, referred to the guidelines for the granting of clinical privileges at the Hospital and drew attention to the provision entitling parties in dispute to appear before the Board to make a submission if they so wished. The applicant's Response to the Report of the Committee was then tabled. Members of the Board said they had not been provided with the Response in sufficient time to read it. The applicant and his lawyers were then welcomed to the meeting. In the end, it was decided to reconvene the meeting at a future time to give the Board the opportunity to read the Report prior to its discussion. The meeting was adjourned to reconvene at 4.15 pm on 27 June. By that time, there was a time problem as the term of office of the Chairman of the Board was due to end on 30 June. The proceedings were then adjourned pending the reappointment of the Chairman or the appointment of a new Chairman. The proceedings were resumed on 15 August 2000. Those members of the Board who had participated in the proceedings of the Review Committee did not participate in the Board proceedings. Mr Buss addressed the meeting and emphasised the recommendation that the applicant's clinical privileges be reinstated without any due delay. Some 80 testimonials regarding the applicant from "various eminent health professionals which all gave favourable comment on his character, standing and achievements" were tabled.

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Attention was drawn to the responses of the applicant containing his submissions to the Board.

43             The applicant and his lawyers left the meeting at the conclusion of

submissions. The Board discussed the matter of reinstatement at length and members expressed preliminary views. The solicitor advising the Board was then instructed to prepare draft reasons for discussion in light of the preliminary views. A draft was considered on 5 September 2000 and a number of amendments were agreed upon. The Board met again on 18 September 2000 to make a final decision and to complete the reasons for the decision. The clinical members of the Board who had participated in the Review Committee were disqualified and did not attend the meeting. In the result, it was unanimously resolved that the clinical privileges of the applicant at the Hospital be revoked for the reasons stated in the draft reasons prepared by Mr Andretich, who was authorised to release a copy of the reasons and the decision to the applicant's solicitors.

44             The Board noted that the position of clinical academics within the

Hospital was governed by two documents. The first was the University of WA and WA Government Teaching Hospitals Clinical Academics Supplementation of Salary Agreement. The second was the Sir Charles Gairdner Hospital Guidelines for Medical Staff. The Supplementation of Salary Agreement provided that the University is the employer of all clinical academics, for relevant purposes. Clause 3.2(f) of the agreement provides that Clinical Academics will comply with such clinical practices, protocols and standing orders as the Heads of Department may from time to time determine, after consultation with them, and where appropriate, the Medical Advisory Committee. Clause 3.2(g) requires that Clinical Academics comply with any service policy, administrative and management practices and other requirements which the Hospital or the health service may from time to time determine, after consultation with the Medical Advisory Committee, where appropriate. By cl 19.1.1 of the Guidelines, it is provided that medical staff are bound by Hospital policies. Hence, Professor Reed was bound by Hospital policies in respect of clinical privileges conferred upon him. The test, whether clinical privileges should be suspended, is whether such action is necessary "to protect the interests of patients, staff or the interest, good name and standing of the Hospital". The same test was to be applied by the Board.

45             In the result, the Board agreed with the views expressed by the

Review Committee in respect of each of the items of expenditure. The

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Board concluded that the findings of the Review Committee that the expenditures concerned were inappropriate and inconsistent with the purpose of the accounts should be upheld. In doing so, it held that primary responsibility for ensuring the appropriateness of expenditure lay with the authorising officer. The Board also concluded that there was no evidence that the applicant had been singled out for special treatment, as a result of disputation and antagonism between him and senior practitioners and administrators at the Hospital. It was concluded that the suspension of the applicant's clinical privileges was justified and in accordance with the Guidelines. Furthermore, having regard to cl 4.4 of the Guidelines, the Executive Director of Medical Services was empowered to suspend clinical privileges "to protect the interests of patients, staff or the interest, good name and standing of the Hospital". On this basis, the Board agreed with the Committee. It concluded that the temporary suspension of the applicant's clinical privileges was justified as being necessary to protect the interests and good name of the Hospital.

46             The Board went on to say that the characterisation by the Committee

of the applicant's conduct in respect of the accounts was not determinative. It was for the Board to determine the nature of the relevant conduct and to make its own decision whether this should affect the clinical privileges of the applicant. The Board regarded the irregularities as "serious" and not merely "a minor concern". Expenditure by Professor Reed on legal expenses not authorised was regarded as a very serious matter. The Board rejected a submission which implied that the history of disputation involving the applicant may have been taken into account by the Committee in arriving at its recommendations. The Board also rejected a contention that there had been a long-standing background context of ongoing conflict and hostility between some Hospital-employed practitioners and some University-employed practitioners and that these matters should be the subject of a separate, independent inquiry. Both the Board and the Committee were of the view that that issue was irrelevant to the task of the Committee and the Board.

47             Applying the test previously formulated, it was clear to the Board

that it could entail a consideration of matters other than clinical competence. It was acknowledged that the applicant enjoyed high regard as a clinician in his area of specialty at national and international level. The Board went on to say:

"However, as stated earlier, the Board is of the view that it must be able to trust those clinicians who are granted clinical privileges to exercise proper judgment in their use of Hospital

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facilities and services and that they will abide by the Hospital's policies, protocols and guidelines, the latter being a requirement of all clinical staff. The Board regards the failure of clinicians to operate trust accounts in accordance with their conditions to be a serious matter. It calls into question the trust that the Hospital and indeed the public must have and is entitled to receive from practitioners granted clinical privileges. The consequences to the interests and the good name of the Hospital are obvious when trust funds are used for unauthorised purposes. The Board, for the reasons stated above, can no longer have that trust in [the applicant]. An isolated incident is one thing but here 12 items of expenditure have been identified as being irregular in the period December 1996 to August 1998."

48             It was for these reasons that the Board determined to revoke the

applicant's privileges within the Hospital. It was acknowledged that the testimonial material submitted on the applicant's behalf was extensive and that the applicant was of high standing among his colleagues, but this did not dissuade the Board from its decision. As the Board itself put it:

"Such material could be persuasive in an isolated instance but not where, as here, there is a number of incidents, including payment of personal legal fees which the Board regards as very serious, and involves unauthorised expenditure taking place over a period of more than 12 months.

The Board should only add that its decision in no way is a reflection on [the applicant's] clinical competence. As stated previously, this is not an issue.

It remains then for the Board to say something about the recommendations made by the Committee. Those recommendations made in relation to [the applicant's] continued enjoyment of clinical privileges within Sir Charles Gairdner Hospital are irrelevant. While the Board has noted recommendations 4, 7 and 8, they are outside the scope of the Review Committee's task and do not have any bearing on the Board's decision in relation to [the applicant]. Accordingly, it is not necessary for the Board to address them."

49             In my opinion, the Board applied the correct test in relation to the

issue whether the applicant's clinical privileges should be restored or

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withdrawn. The question was whether suspension or cessation of such privileges was "necessary to protect the interests of patients, staff or the interests, good name and standing of the Hospital". The decision was not one in the exercise of a disciplinary power, as the applicant was employed not by the Hospital but by the University.

50             In my opinion, the Board did not fail to accord the applicant

procedural fairness in deciding to revoke his clinical privileges. It must have been apparent to all concerned that a possible outcome of the proceedings before the Board was the revocation of such privileges. While the Review Committee suspended the applicant's clinical privileges, they recommended their reinstatement. In the circumstances, it ought to have been fully appreciated by the applicant and his advisors that his clinical privileges were at risk of being revoked, having regard to the adverse findings of fact made by the Review Committee.

51             The applicant contended, however, that on the basis of the findings

and recommendations of the Review Committee, the applicant had a legitimate expectation, when he was before the Board, that his clinical privileges would be reinstated "without any undue delay". It was also contended that at no time during the substantive meeting with the Board on 15 August 2000, or at any earlier meeting before the Board, was he informed that his clinical privileges might be revoked and no submissions were made to the Board by the applicant on that question.

52             While the circumstances were such that the applicant may have had

an expectation, even a "legitimate expectation", that the Board may accept the recommendation of the Review Committee, the concept of "legitimate expectation" relates only to procedure and not to substantive rights: Re Minister for Immigration and Multicultural Affairs; Ex parte Lam (2003) 77 ALJR 699 per Gleeson CJ at [28], McHugh and Gummow JJ at [82] – [83], Hayne J at [121] – [122] and Callinan J at [148].

53             The issue of suspension of clinical privileges was fully canvassed

before the Review Committee with the result that I have mentioned. In the context as I have outlined, it ought to have been obvious that the Board would not necessarily accept the recommendation for the reinstatement of clinical privileges in light of the findings of the Review Committee regarding the misapplication of trust funds. The applicant's legitimate expectation went no further than an expectation that the Board would give him a reasonable opportunity to be heard in relation to any

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aspect of the case he wished to address, in a context where the procedure adopted would be consistent with the requirements of procedural fairness.

54             In my opinion, the Board did extend the applicant procedural fairness

and ground (a) necessarily fails. There were two possible outcomes in relation to the restoration of clinical privileges. The first was that instead of being temporarily suspended, they would be revoked. The second was that they may be restored. The thrust of the applicant's case was to secure the restoration of his clinical privileges on the ground that all of the impugned expenditure was properly and lawfully made.

55             So far as grounds (b), (c) and (d) are concerned, I agree entirely with

the reasons to be published by Murray J and cannot usefully add anything. For these reasons, I would discharge the order nisi for certiorari and the interlocutory injunction originally granted on 26 February 2001 and extended upon the grant of the order nisi on 9 April 2001.

1. WALLWORK J: I agree with the reasons for judgment and the conclusions of Malcolm CJ and Murray J. There is nothing I wish to add to his Honour's reasons.

2. MURRAY J:

The Application for Certiorari

58             This is an application for certiorari against the respondent, the Metropolitan Health Service Board (the Board). The applicant is a distinguished medical practitioner. He is a professor of medicine at the University of Western Australia. This case concerns a decision of the Board made on 22 September 2000 to revoke what are described as the applicant's clinical privileges attendant upon the conferral upon him of clinical status permitting him to practise at Sir Charles Gairdner Hospital. The applicant seeks an order absolute for certiorari so as to quash that decision. He does so on the following grounds:

(a)	the Board failed to accord procedural fairness to the applicant in relation to its decision to revoke the applicant's clinical privileges in that:
(i) the Board failed to give the applicant any prior notice of its proposal to revoke the applicant's clinical privileges; and

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(ii)         the Board failed to give the applicant any prior opportunity to give evidence or make submissions relating to its proposal to revoke the applicant's clinical privileges;

(b)

having regard to the factors particularised in (c) below, no reasonable Board could have concluded that in making the withdrawals in question the applicant acted with any impropriety, or with such impropriety that it was appropriate to revoke his clinical privileges;

(c)

the Board erred in law in making its decision to revoke the applicant's clinical privileges in that it failed to take into account, or to give due weight to, the following evidence:

(i)	the funds which were paid into the accounts from which the allegedly improper withdrawals were made, were funds provided by donors, including the applicant, and not the hospital;
(ii)	one of the providers of substantial funds (Schering-Plough Pty Ltd) had stated that the payment of legal expenses from the funds (the largest of the allegedly improper withdrawals) was "entirely consistent with the purpose" of the grant of the funds;
(iii)	all withdrawals from the accounts were made openly, without concealment of their purpose and in the reasonable and bona fide belief that the expenditure was appropriate and within the purpose designated for the relevant account;
(iv)	the hospital administration, which knew the stated purpose of the accounts, had accepted that the withdrawals in question were within that purpose;
(v)	it was the applicant who had opened the accounts, stated their purpose, and listed the types of withdrawals which might be made from them, without such list being exhaustive;

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(vi)        it was at last fairly arguable that the withdrawals in question fell within the broad purpose of the accounts from which such withdrawals were made.

(d)	The Board further erred in law in that it failed to give adequate or any weight to the findings and recommendations of the Clinical Privileges Review Committee, and in particular the recommendation that the applicant's clinical privileges should be reinstated and the recommendation that the Board approve the reinstatement of the applicant's clinical privileges without undue delay.
(e)	The Board erred in law in its decision to revoke the applicant's clinical privileges at the hospital on the ground of improper withdrawal from accounts since the funds in question, which were not provided by the hospital and were not the property of the hospital, were beyond the jurisdiction of the Board, and it was beyond the jurisdiction of the Board to revoke the applicant's clinical privileges by reason of an alleged impropriety in dealing with funds which were not funds of the hospital.
(f)	Furthermore, the Board had no jurisdiction, under the University Medical School Teaching Hospitals Act 1955 or the Agreement made between the Board and the University pursuant to that Act, to revoke the applicant's clinical privileges.

59             The order nisi for certiorari was granted upon those grounds on 9 April 2001. As I understand the position, since 26 February 2001 the applicant's position in respect of the exercise of clinical privileges at the hospital has been protected by interim injunctions operative until the determination of the application for the writ of certiorari, restraining the Board "from making any appointment of a liver transplant hepatologist which will have the effect of permanently replacing the applicant at the Sir Charles Gairdner Hospital."

60             My consideration of this matter has been delayed much longer than I

would have wished, not only by the need to give attention to other matters, deemed to be of more pressing character, but also because of the voluminous nature of the book of documents, the content of which I take to be the result of discussions between the parties, which was prepared in

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support of the application and a statement of agreed facts. In view particularly of the terms of grounds (b) – (d) inclusive I have thought it necessary to read and endeavour to absorb all that material. It runs to over 1400 pages of documents. I shall go to that material only so far as it appears to be necessary when dealing with the grounds upon which the application is pressed.

The Facts of the Matter

61             In the meantime, a convenient method of coming to a broad

understanding of the circumstances giving rise to the application is to set
out the parties' statement of agreed facts:

"1.

The applicant was at all material times:

(a)	registered as a medical practitioner under the Medical Act 1894;
(b)	employed by the University of Western Australia ("the University") as Professor of Medicine in the Eric Saint Chair in Medicine within the Faculty of Medicine and Dentistry of the University; and
(c)	suspended from his employment by the University for three months on 12 May 1999, a further three months on 31 August 1999 and a further nine months on 19 December 2000 (see letters of Vice-Chancellor of the University dated 12 May 1999, 31 August 1999 and 19 December 1999, respectively Document 11 at p882, Document 11 at p929 and Document 37 at p1538 in the Book of Documents).

2.

The Metropolitan Health Service Board ("Board") was a body corporate constituted under section 15(3) of the Hospitals and Health Services Act 1927 ("Hospitals Act").

3.

By section 18(1) of the Hospitals Act, the Board was responsible for the control, management and maintenance of the Sir Charles Gairdner Hospital ("Hospital").

4.

Pursuant to the Hospitals and Health Services (Metropolitan Health Service Board) Abolition Notice

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2001 published in the Government Gazette on 9 March 2001 the Board was abolished. By virtue of section 7 of the Hospitals Act management and control of the Hospital is now vested in the Minister for Health ("Minister") who is deemed to be the Board.

5.        The appointment referred to in paragraph 1(b) came into effect from 1 April 1991.

6.        On 21 February 1974 the then Board of Management of the Hospital resolved that the Vice-Chancellor of the University be advised that upon the applicant's appointment as a Senior Lecturer in the University Department of Medicine, the applicant would be granted clinical staff status, and be admitted to the Hospital's practice for the period of his appointment with the University. The Board, by agreement with the University, conferred on the applicant in 1974 clinical status and all attendant clinical privileges. On his appointment to the chair on 1 April 1991 the applicant's clinical status and privileges continued uninterrupted (see Minutes of the Appointment Committee dated 19 February 1974 and Minutes of the Board of Management of the Hospital dated 21 February 1974, respectively Document 21 at p1493 and Document 22 at p1494 in the Book of Documents).

7.        On 29 March 1990 the then Board of Management of the Hospital approved "Guidelines for Medical Staff" (Document 1 at p24 in the Book of Documents).

The University of Western Australia and Western Australian Government Teaching Hospitals Clinical Academic Supplementation of Salary Agreement was signed on behalf of the University, Australian Medical Association and the Hospital in November 1996. The "Agreed Sir Charles Gairdner Hospital and University of Western Australia Interpretations" were inserted into that document in September 1997 but the amended document was not formally executed by the parties.

8.        By letter dated 30 November 1998 (Document 1 at p35 in the Book of Documents) the applicant was notified by

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Dr Diane Davies, Executive Director of Medical Services of the Hospital, that an audit had found alleged irregularities in the expenditure of funds from Research and Special Purpose accounts numbered 2148, 2205 and 2680. In that letter Dr Davies stated –

"Expenditure on items contrary to the express terms of the establishment of Special Purpose Accounts may be found to be a misappropriation of funds. If this is found to be the case this could lead to the removal of your clinical privileges."

By letter dated 8 December 1998 the applicant responded to the allegations contained in Dr Davies' letter dated 30 November 1998 (Document 1 at p82 in the Book of Documents).

9.        By letter dated 15 December 1998 Dr Davies notified the applicant that his clinical privileges at the Hospital would be temporarily suspended, effective from midnight 15 December 1998, pending determination of the matter by the Board (Document1 at p88 in the Book of Documents).

10.      At the time of the applicant's temporary suspension on 15 December 1998 his clinical privileges covered clinical work in hepatology and liver transplantation at the Hospital. In addition, the applicant held the position of Chairman, Western Australian Liver Transplant

Assessment Panel.

11.      Pursuant to clause 4.5 of the Guidelines to Medical Staff the applicant's solicitors requested the Chief Executive Officer of the Hospital to convene a review committee to assist the Board to make its determination.

12.      The Hospital provided the Review Committee with details of the procedures of the Review Committee, details of the process, a report from the Director of Finance and Corporate Information Services on the establishment and management of research accounts at the Hospital, the audit report, and other relevant documents (Document 1 in the Book of Documents).

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13.      The applicant has been principal or co-signatory on a number of Hospital accounts, in particular accounts numbered 2148, 2680 and 2205.

In the case of each account, categories of allowable expenditure were drawn up by the applicant and the Hospital did not advise the applicant of any objection to those categories.

All disputed transactions from the accounts were initiated in writing by the applicant and in most instances accompanied by details of the proposed expenditure and its purpose, including any invoices or other supporting documents.

14.      Account 2148

Account number 2148 was opened by the Hospital at the applicant's request on 29 June 1989. The applicant stated that the purpose of the account was to hold funds for "Research into various aspects of the immunopathology of hepatobiliary disorders". The applicant drew up a lis t of allowable items of expenditure, being "Employment of research staff, purchase of equipment and consumables, maintenance of laboratory animals and computing costs."

In July 1995 the applicant reviewed the account and amended the list by including as items of allowable expenditure "Journal and professional subscriptions, travel and entertainment expenses, printing and associated charges." The Hospital did not advise the applicant of any objections to those amendments.

15       The sources of funds for account 2148 on and after 8 October 1996 are set out below:

DATE	SOURCE	AMOUNT
08/10/96	Transfer from UWA Research Account	$ 5,000
408787 (Liver Research Account)
11/03/97	Transfer from UWA Research Account	$ 2,500
408787 (Liver Research Account)

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22/04/97	Transfer from UWA Research Account	$ 2,500
408787 (Liver Research Account)
04/07/97	Transfer from UWA Research Account	$10,000

583054	(Raine	Foundation	Grant
Account)

12/02/98 Transfer from Challenge Bank $ 3,864

(Medicine – G Block Sundries Account)

27/02/98	Transfer from UWA Research Account	$10,000
408787 (Liver Research Account)
15/04/98	Donation from Schering-Plough Pty Ltd	$ 1,000
(Sponsorship of Trainees)
15/04/98	Donation from Smith Kline Beecham	$ 350
(Sponsorship of Trainees)
15/04/98	Donation from Astra Pharmaceutical	$ 1,750
(Sponsorship of Trainees)

15/04/98 Donation from Novartis $ 1,050

Pharmaceuticals	(Sponsorship	of
Trainees)

15/04/98 Donation from Roche Products $ 500

(Sponsorship of Trainees)

15/04/98 Donation from Roche Products $ 500

(Sponsorship of Trainees)

15/04/98 Donation from Glaxo-Wellcome $ 500

(Sponsorship of Trainees)

15/04/98	Donation from Ledele Laboratories	$ 500
(MSVA) (Sponsorship of Trainees)
14/09/98	Transfer from UWA account 121501	$10,000
(SCGH Unit Holding Account) See Note 2 below

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1.          On 4/07/97 there was a transfer from the Raine Foundation Grant Account 583084 to SCGH Account 2148 in the sum of $10,000. The money was stated to be for Hepatitis C Research. This amount was subsequently recouped from UWA Account 408787 to UWA Account 583054 in February 1998 (Letter from Professor W D Reed to Ms Nola Dirkson, 12 February 1998. Document 5 at p435 in the Book of Documents).

2.          On 4/09/98 the applicant authorised transfer of $10,000 from UWA Account 121501 (SCGH Unit Holding Account) to SCGH Trust Account No 2680 (UDM Teaching Account). On 14/09/98 this amount was inadvertently credited by the Hospital Accounting Department to Trust Account No 2148 (Liver Research Account). This transaction was eventually reversed and the amount credited to Account 2680 (UDM Teaching Account) in April 1999 (Letter from Professor W D Reed to Ms Nola Dirkson, Accounting Services, UWA 4 September 1998 and subsequent correspondence Documents 24 go 29 at pp1497-1502 in the Book of Documents). Although this $10,000 was ultimately debited from Account No 2148, from 14/09/98 until April 1999 one of the sources of funds from Account No 2148 was $10,000 from UWA Account No 121501.

16.     Account 2148 is administered by the Hospital. Expenditure of funds may only be authorised by the applicant or his co-signatory, Dr Gary Peter Jeffrey. Set out below are the allegedly inappropriate payments made from account 2148, showing the date, the purpose of the payment and (in the third column) reference to the relevant documentation:

Date Purpose Reference

(a) 27 December $221 for parking fees the Document 1 at

1996 Hospital pp40-41 in the Book of Documents

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Book of Documents

(b) 26 April 1997 $800 for a farewell gift Document 1 at

for Dr A Brind pp43-46 in the Book of Documents

(c) 22 October $185.15 for a farewell Document 1 at

1997 function for Ms F Geste pp47-49 in the Book of Documents

(d) 2 December $190 for a gift for Document 1 at

1997 Ms Geste pp47-48 in the Book of Documents

(e) 30 April 1998 $2,609.70 for legal fees Document 1 at

and disbursements pp54-55 in the Book of Documents

(f) 14 August $2,153.25 for legal fees Document 1 at

1998 and disbursements pp80-81 in the Book of Documents

17.      Account 2680

Account 2680 was opened by the Hospital at the applicant's request on 23 September 1997. The stated purpose of the account was to hold funds for "contract payments for clinical teaching and other departmental expenditure". The applicant listed as allowable items of expenditure "contract payments, teaching and research and services, travel and entertainment".

18.      The sources of funds for Account 2680 are set out below:

Date Source Amount

20/10/97 Transfer from UWA $10,000

Account 121501 (SCGH

Unit Holding Account)

27/02/98 Transfer from UWA $10,000

Account 121501 (SCGH

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Unit Holding Account)

12/02/98	Sale of surplus UWA	$ 160
equipment
12/02/98	Sale of surplus UWA	$ 500
computing equipment
12/02/98	Sale of surplus UWA	$ 180
furniture
20/04/98	Sale of surplus UWA	$ 385
furniture
20/04/98	Sale of surplus UWA	$ 40
furniture
13/05/98	Kings Park Board Trust	$ 1,500
April 1999	Transfer from Account	$10,000
2148

1.          Interest payments on account balances have not been shown.

2.          On 04/09/98 the applicant authorised transfer of $10,000 from UWA Account 121501. (SCGH Unit Holding Account) on SCGH Trust Account No 2680 (UDM Teaching Account). On 14/09/98 this amount was inadvertently credited by the Hospital Accounting Department to Trust Account No 2148 (Liver Research Account). This transaction was eventually reversed and the amount credited to Account 2680 (UDM Teaching Account) in April 1999 (Letter from Professor W D Reed to Ms Nola Dirkson, Accounting Services, UWA 4 September 1998 and subsequent correspondence Documents 24-29 at pp1497-1502 in the Book of Documents).

19.     Account 2680 is administered by the Hospital. Authorisation of expenditure may only be made by the applicant or Professor F L Mastaglia.

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Set out below are the allegedly inappropriate payments made from account 2680, showing the date, the purpose of the payment, and (in the third column) reference to the relevant documentation:

Date Purpose Reference

(a) 27 September $357.76 for a farewell Document 1 at

1997 function for Mrs J pp74-77 in the

Featherston Book of Documents

(b) September $312 for a farewell Document 1 at

1997	function	for	pp74-75 and p78 in
Mrs Featherston	the Book of
Documents

(c) 26 September $149.15 for a gift for Mrs Document 1 at

1997	Featherston	pp74-75 and p79 in
the Book of
Documents

20.      Account 2205

Account 2205 (initially 35205) was opened by the Hospital at the request of the applicant (by letter addressed to the Director of Financial Services of the Hospital dated 8 September 1992) and Professor Anthony Keith House on 8 September 1992 to receive donations from the friends and relatives of the late Mr Brian Treasure to be used for any form of liver research conducted at the Hospital, in particular towards the establishment of liver transplantation.

The stated purpose of the account was to hold funds for "Liver Research; in particular research into liver transplantation". The applicant listed allowable items of expenditure as "Employment of research staff, purchase of research equipment and consumables and other capital expenditures related to research".

21.      The sources of funds for Account 2205 on or after 20 September 1996 are set out below:

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Date Source Amount

20/09/96	Fund Raising by Nursing	$ 1,165
Staff (Conference Transplant Nurses Association)
23/09/96	Donation: Sandos Australia	$ 750
Pty Ltd (Conference Travel)
06/02/97	Donation: L & J Watkins	$ 1,000

20/10/97 Fund Raising (Patient $ 1,748

Support Group)

16/02/98	Fund Raising (Staff Raffle)	$ 246
10/07/98	Donation: L & J Watkins	$ 5,000

1.          Interest payments on account balances have not been shown.

2.          The sums credited on 06/02/97, 20/10/97 and 16/02/98 were to defray funeral expenses for the late Mrs Anne Newing.

Refer to the letter of the Applicant to Mr Hebbard dated 26/03/97, the letter of Mr Hebbard dated 22/09/97 and the letter of Mr Hebbard dated 15/10/97 (Document 6 at pp576-578).

1. I turn then to the grounds of the application with which I propose to deal in order of their statement.

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The Question of Procedural Fairness

72             Ground (a) complains of the respondent's failure to accord

procedural fairness to the applicant because the Board, it is said, failed to give him any prior notice of the proposal to revoke the applicant's clinical privileges and failed to give him a prior opportunity to give evidence or make submissions in respect of any such proposal. This is not a challenge to the processes employed, as such. The terms of the contract between the UWA and the Hospital include provision for disciplinary action "where there is misconduct or unsatisfactory performance on the part of the clinical academic, in relation to their provision of service at the Hospital." Various disciplinary processes are provided, including, but not limited to, suspension of clinical privileges by the decision of nominated officers of both institutions.

73             Guidelines for medical staff were agreed to. They include a power

of the Executive Director of Medical Services of the Hospital to "temporarily suspend the clinical privileges of any member of the medical staff where he considers that action necessary to protect … the interests, good name and standing of the Hospital." The agreed facts show that that occurred in this case. The guidelines provide that where a person has been suspended he or she is to be advised of the board meeting at which the matter is to be considered and shall be entitled to appear before the Board if he or she so requests.

74             There is no question that that advice was given, but there was a

variation to the process in this case because the guidelines provide that in a case where privileges have been suspended the staff member concerned, the applicant, may request the Chief Executive Officer of the Hospital "to convene a review committee to assist the Board in making its determination." If that request is made the Committee is to be convened. The guidelines specify the persons who are to constitute the Committee. Again, that took place and the statement of agreed facts sets out the process involved.

75             The various accounts, the operation of which were matters of

concern to the Executive Director of Medical Services were the subject of reports and relevant documents detailing permissible categories of expenditure and the operation of the accounts which were provided to the Committee. The relevant matters are detailed in the statement of agreed facts.

76             The Review Committee conducted hearings. Counsel had been

appointed to assist the Committee. The applicant was represented by

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senior counsel. The Committee took the evidence of witnesses, including the applicant. Witnesses were cross-examined. It was undoubtedly an eminent body, chaired by the Chief Executive Officer of the Hospital and otherwise comprising the medically qualified members of the respondent Board and a senior hospital clinician.

77             In its report to the Board, the Committee noted that its work had been

delayed because the applicant was, as the agreed facts show, involved in disciplinary processes of a related kind within the University and he had asked that the Committee delay its investigations until the UWA had completed its processes. The report of the Committee is a comprehensive document. It details the various matters of concern in the accounts in question, before concluding that the particular matters of concern were all "inappropriate and inconsistent with the purpose of the research and trust accounts", concluding that the applicant's behaviour constitutes misconduct and, in the case of the expenditure on legal fees and disbursements to the applicant's solicitors, that the behaviour constitutes serious misconduct.

78             The Review Committee then referred to a number of matters,

including the seriousness of the misbehaviour, the applicant's reluctance to concede error, a history of disputation over many years between the applicant and senior clinical and non-clinical managers at the Hospital, the length of the suspension, a period of about 18 months, media comment affecting the applicant's reputation, the need for all involved to look to the future "in a spirit of professional behaviour and collegiate goodwill", the disciplinary processes of the UWA and the repayment of some of the money disbursed improperly including the legal fees and disbursements.

79             Having regard to all those matters, the Review Committee

recommended to the Board that the applicant's clinical privileges be reinstated "without any undue delay", but with conditions in relation to the use of the particular accounts involved and generally in respect of such accounts, described as being "research and trust accounts".

80             That report having been made, hearings of the Board were convened.

Again the applicant was represented by senior counsel. The Board had before it the report of, and all the supporting documents before, the Review Committee, together with the transcript of the hearing conducted by that Committee. Additional written material was provided by the applicant to the Board, including his response to the Committee's report. Counsel spoke to that document and made submissions orally. A further written document by way of response to the Committee's report was

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provided after the oral hearings. This document was itself also evidently taken into account by the Board. In the oral submissions, counsel submitted that the Committee's recommendation that the applicant's privileges be reinstated should be followed and specific submissions addressed the proposed restrictions and conditions in relation to the operation of these accounts. Professional testimonials were highlighted.

81             The Board then met on a number of occasions in the absence of the

applicant and his legal advisers to consider the material and its decision. On 22 September 2000, by a letter under the hand of the Board's solicitor, the applicant was advised that, for the reasons then published by the Board, it had determined that his clinical privileges should be revoked, contrary to the submissions made on the applicant's behalf, both orally and in writing, that, not only was there no basis for the temporary suspension of the applicant's clinical privileges, but, "The acts as now known cannot justify any suspension of his clinical privileges, let alone cancelling his clinical privileges." The reasons of the Board were published under the hand of its Chairman, the Hon Ian McCall AO, a distinguished retired Judge.

82             I shall need, when dealing with other grounds of the application, to

return in more detail to the reasons, but it is convenient at this stage to note that in my opinion the Board correctly appreciated the nature of its jurisdiction. It referred to the processes to which I have referred above, in making the point that its jurisdiction and powers were drawn from the terms of the contract between the Hospital and the University and the guidelines.

83             It was appropriate, in my view, that the Board concluded that in

determining whether the applicant's clinical privileges should be restored or withdrawn it should be guided by the same test as was applicable in relation to the suspension of those privileges, the justification for which under the guidelines was the formation of the view that such action was "necessary to protect the interests of patients, staff or the interests, good name and standing of the Hospital." The Board observed that its task was therefore not of a disciplinary character. That remained the province of the UWA, the applicant's employer.

1. As to the question before it, the Board's conclusion succinctly expresses its reasoning:

   "In conclusion, then, the Board finds that all of the items of the expenditure under consideration were outside of the purposes

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for which Professor Reed requested the Hospital to open the Accounts; nor did any of them constitute allowable items of expenditure in respect of those accounts. Having reached this conclusion, the next task for the Board is to determine whether Professor Reed's clinical privileges within Sir Charles Gairdner Hospital should be revoked. As previously stated, the test which the Board will apply in determining this issue is whether that action is 'necessary to protect the interests of patients, staff or the interest, good name and standing of the Hospital'. It is clear to the Board that the test can entail a consideration of matters other than clinical competence. That is not an issue here and the Board accepts that Professor Reed enjoys high regard as a clinician in his area of specialty at national and international level. However, as stated earlier, the Board is of the view that it must be able to trust those clinicians who are granted clinical privileges to exercise proper judgment in their use of hospital facilities and services and that they will abide by the Hospital's policies protocols and guidelines, the latter being a requirement of all clinical staff.

The Board regards the failure of clinicians to operate trust accounts in accordance with their conditions to be a serious matter. It calls into question the trust that the Hospital and indeed the public must have and is entitled to receive from practitioners granted clinical privileges. The consequences to the interests and the good name of the Hospital are obvious when trust funds are used for unauthorised purposes. The Board, for the reasons stated above, can no longer have that trust in Professor Reed. An isolated incident is one thing but here 12 items of expenditure have been identified as being irregular in the period December 1996 to August 1998.

For the above reasons, the Board has determined to revoke Professor Reed's clinical privileges within Sir Charles Gairdner Hospital and hereby resolves to do so. The testimonial material submitted by Professor Reed is extensive and evidence of high standing amongst his colleagues, but does not dissuade the Board from this decision. Such material could be persuasive in an isolated instance but not where, as here, there are a number of incidents, including payment of personal legal fees which the Board regards as very serious, and involves unauthorised expenditure taking place over a period of more than 12 months."

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Procedural Fairness and a Legitimate Expectation

85             The question raised by ground (a) then is the procedural fairness of

what occurred. There is, of course, no doubt that such a failure will provide a ground upon which certiorari may lie. The ambit of such a ground was extensively discussed by the High Court in Annetts v McCann (1990) 170 CLR 596 and there is nothing controversial about the manner in which the ground particularises the alleged failure, provided what is referred to as the Board's "proposal" to revoke the applicant's clinical privileges is understood as a reference to the fact that such an outcome was a live possibility, a power which in the circumstances the Board might exercise, rather than as a reference to some sort of preliminary view: Kioa v West (1985) 159 CLR 550, Re Refugee Review Tribunal; Ex parte Aala (2000) 204 CLR 82 and Re Minister for Immigration and Multicultural Affairs; Ex parte Miah (2001) 206 CLR 57.

86             In the last-mentioned case, at 69 [31], Gleeson CJ and Hayne J, in

their dissenting judgment, stated the relevant principles in the following
terms:

"In considering the scheme of legislation relating to the exercise of a particular kind of power, it is necessary to pay regard to the practical context in which the decision-maker must consider whether to exercise the power. This may be of particular importance where, as here, the complaint is of a failure by the decision-maker to communicate something to an affected person before a decision is made. It is the potential for a decision to affect rights, interests, or legitimate expectations, that attracts the requirement of procedural fairness. But decisions of that character are made in varying contexts. Here we are concerned with a decision to be made following a formal application. The nature, and extent, of communication between applicant and decision-maker that is in contemplation, in such a general context, will vary. At one extreme, an application may be made to a judicial decision-maker, in a context in which curial standards of procedural fairness will apply to the fullest extent. Even in such a case, fairness does not require a judicial officer to make a running commentary upon an applicant's prospects of success, so that there is a forewarning of all possible reasons for failure. Most administrative decisions are made in circumstances where a much less formal and extensive form of communication than that which occurs in a court is

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contemplated. In many cases, it is not contemplated that the applicant will either see, or hear anything from, the decision-maker before the decision is made."

1. One further point should be made. The applicant's outline of submissions contains the statement that:

   "On the basis of the findings and recommendations of the Review Committee, the applicant attended the meetings of the Board held on 26 June, 27 June and 15 August 2000 with the legitimate expectation that his clinical privileges would be reinstated 'without any undue delay'. At no time during the meeting held on 15 August 2000 or at any earlier meeting before the Board was the applicant informed that his clinical privileges might be revoked and no submissions were made to the Board by the applicant on that question."

88             In my opinion, the concept of a legitimate expectation is used

wrongly in this submission. It sounds as if the applicant is relying upon the proposition that he had a legitimate expectation that the substantive outcome of the Board's deliberations would be the determination recommended by the Review Committee, but the doctrine of "legitimate expectation" cannot give rise to substantive, rather than procedural, rights: Re Minister for Immigration and Multicultural Affairs; Ex parte Lam (2003) 77 ALJR 699 per Gleeson CJ at 703 [28], McHugh and Gummow JJ at 713-714 [82] – [83], Hayne J at 720 [121] – [122] and Callinan J at 726 [148]. In my view, to speak of a legitimate expectation in this context is to say no more than that the proceedings were of such a kind that they included procedural rights or obligations of procedural fairness imposed on the decision-maker of a kind identified by the applicant for relief.

89             In my opinion, ground (a) cannot be made out. As has been seen, the

applicant had and availed himself of every opportunity to put his points of view, his evidence and submissions before the Board. The proceedings were most comprehensive, more so than might have been expected even in a full curial tribunal, which the Board was not. Nothing occurred during the course of the proceedings to give rise to any expectation that the question of revocation was foreclosed to the Board. The whole purpose of the proceedings was to bring the temporary suspension of the applicant's clinical privileges to an end either by their revocation or their restoration. In my opinion, the applicant well understood this to be the case. His approach by the submissions of counsel and in his evidence to the evidently open possibility of cancellation or revocation of his

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privileges was to aggressively advocate the restoration of his rights. By and large he pursued the line that the items of expenditure relied upon to support the suspension and placed before the Board were all proper expenditures. The applicant consistently reacted strongly to any perceived suggestion of error, let alone wrongdoing on his part.

The Question of an Unreasonable Decision

90             I turn then to grounds (b), (c) and (d) which can be taken together. I

agree that care must be taken with grounds framed as these are lest the court, by reference to grounds which assert that the Board erred by its failure to take particular matters into account or to accord them sufficient weight, be drawn into a review of the merits of the decision, a capacity denied a court in the context of an application for prerogative relief.

1. It is convenient to recall the words of the High Court in Craig v State of South Australia (1995) 184 CLR 163at 175:

   "Where available, certiorari is a process by which a superior court, in the exercise of original jurisdiction, supervises the acts of an inferior court or other tribunal. It is not an appellate procedure enabling either a general review of the order or decision of the inferior court or tribunal or a substitution of the order or decision which the superior court thinks should have been made. Where the writ runs, it merely enables the quashing of the impugned order or decision upon one or more of a number of distinct established grounds, most importantly, jurisdictional error, failure to observe some applicable requirement of procedural fairness, fraud and 'error of law on the face of the record'."

92             It has long been accepted, however, that jurisdictional error may be

established if the decision of the tribunal in question is one which no reasonable tribunal, properly understanding the nature and limits of its jurisdiction, could have arrived at. In such a case it may be held that the inferior court or tribunal has misunderstood or disregarded the nature or limits of its functions and powers and so has fallen into error of a jurisdictional kind. This ground for the grant of certiorari is commonly said to have its genesis in the decision in Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1 KB 223.

1. However, it is always worth bearing in mind in such a case what was said by the High Court in Craig at 177-178:

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"Again, an inferior court will exceed its authority and fall into jurisdiction error if it misconstrues the statute or other instrument and thereby misconceives the nature of the function which it is performing or the extent of its powers in the circumstances of the particular case. In the last-mentioned category of case, the line between jurisdictional error and mere error in the exercise of jurisdiction may be particularly difficult to discern."

94             Mason J sounded the same note of caution in Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24 at 42 when his Honour said that in a case where the asserted unreasonableness is giving too much or too little weight to one consideration or another the Court should proceed with caution in case it should exceed the supervisory role by reviewing the decision on its merits.

95             In Minister for Immigration and Multicultural Affairs v Eshetu (1999) 197 CLR 611 the question before the relevant tribunal was whether the applicant was properly refused a protection visa as a refugee because he did not have a well-founded fear of being persecuted in his country of origin. At 627 [45] Gleeson CJ and McHugh J said:

"In the present case the question was whether the Tribunal was satisfied that Mr Eshetu's fear of persecution was well-founded. The Tribunal took as its commencing point his explanation of the reasons for his fear and then subjected those reasons to investigation and scrutiny. Having done that, the Tribunal expressed a lack of satisfaction. It was criticised on the ground that it gave inadequate weight to certain considerations and undue weight to others. Its ultimate decision was said to have been based upon a process of reasoning flawed in those respects. This is not a case of Wednesbury unreasonableness, … ."

1. As will appear, in my opinion, that is a comment which might be made about this case.

97             Although, in a number of places in its reasons, the Board describes

the accounts in question as trust accounts, it is clear that it was using the term in a non-technical sense to refer to accounts, the object of which was to provide funds to be expended for particular purposes under the administration of the Hospital in accordance with the Financial Administration and Audit Act 1985 (WA) and the Hospital's own

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procedures. A good general description of the nature of these accounts is
that given by the Board itself in its reasons:

"In order to facilitate Prof Reed's work within the Hospital, he and other practitioners with his status have been permitted to establish accounts which are funded by them from a number of sources external to the Hospital. The accounts are shown and treated as Hospital accounts and are required to be conducted in accordance with Hospital policies and the Financial Administration and Audit Act. Expenditure from these accounts is required to be for a purpose for which the account was opened or for an item specified as an item of allowable expenditure. The authorised signatory for the account is responsible for certifying that expenditure authorised is consistent with the purpose of the account or an allowable item of expenditure specified in the establishment authority for the account."

98             All three of the accounts in question were established by the

applicant. He was in each case the sole signatory or the principal co- signatory entitled to authorise withdrawals from the account. The categories of allowable expenditure were all drawn up by the applicant and in some cases reviewed and added to by him. They were not disapproved by the Hospital management. The applicant generated the documentation which led to the withdrawals which later came to be disputed. In most instances the purpose of the withdrawal was adequately described and invoices or other supporting documents were supplied. None of the proposed withdrawals were objected to by any officer in the Hospital's accounting administration. The Board considered, in my opinion properly, however, that the applicant could not avoid responsibility in respect of the impugned withdrawals by asserting that they were processed without objection by the administrative officers of the Hospital. It was for the applicant as an authorised signatory to determine whether any expenditure was allowable.

99             The nature and purpose of the various accounts, the categories of

allowable expenditure from them and the sources of funds in them are set
out in the statement of agreed facts.

100          Account 2148 is clearly a research account containing funds

provided by the UWA and corporate donations for the purpose of liver research. The Board found that the money paid out for parking fees for the applicant at the Hospital was not sufficiently connected to the

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authorised purposes of the account to be properly regarded as "travel expenses". Dr Brind was a member of staff who was leaving. The same applied to Ms Geste. The Board concluded that these expenditures could not properly be regarded as "entertainment expenses" connected with the purpose for which the account was maintained.

101          The substantial funds paid for legal fees and disbursements were

concerned with a dispute with the Hospital over access to research capacities available in the Hospital's endoscopy suite. As the Board saw it, this expenditure was concerned primarily with a dispute between the applicant and his access to facilities in his personal capacity, and although a major corporate donor to this account thought the expenditure was justified as being directed towards research, the Board considered this was purely personal expenditure. Further, it took the view that this expenditure was "a very serious matter" on the ground that the Board did not believe that the applicant could reasonably have believed it to be otherwise than purely personal expenditure.

102          The account 2680 was opened by the applicant for the stated purpose

of "contract payments for clinical teaching and other departmental expenditure". The applicant determined that allowable expenditure would include "contract payments, teaching and research and services, travel and entertainment." The allegedly wrongful expenditure from this account was all related. Mrs Featherston was a long-standing staff member who was leaving. This account was used to pay for her farewell function and a gift. Again, the Board thought that such expenditure on Mrs Featherston's farewell was not properly to be regarded as departmental expenditure by way of "entertainment" related to the purpose of the account.

103          The account 2205 was again a liver research account. The impugned

payments out of moneys which had been provided by donors or fund- raising by nursing staff and a patient support group are of two distinct types. The expenditure for the dinner and luncheon for Prof and Mrs Rhodes was made in the context of the visit of Prof Rhodes to Perth. He is a distinguished hepatologist who was simply visiting Perth from overseas. The Board considered this to be improperly authorised expenditure and it took the same view in respect of the reimbursement of the funeral expenses for Mrs Newing, a patient who died while undergoing liver transplantation. The Board described this expenditure as "clearly altruistic" but found it to be outside the purpose for which the account was established and that it was not an item of allowable expenditure.

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104          I do not consider it necessary to comment in detail on all of the

particulars set out in ground (c). None were, in my view, overlooked by the Board, but it is fair to say that they were generally regarded as of little weight. For example, the Board considered the source of the funds to be not to the point. What was important in the Board's view was the purpose of the accounts and the items of allowable expenditure therefrom. In one sense, however, it is clear that the fact that this money was generally not provided by the Hospital, but by donors for specific purposes to which the accounts were related, heightened the importance of the reliability of the process by which the applicant undertook responsibility for the withdrawals made from the accounts. Any suggestion of breach of trust or breach of charitable purpose was clearly to be avoided and was clearly a matter which was calculated to have a negative impact upon the name and good standing of the Hospital.

105          The Board considered the view of one of the donors about the

payment of legal expenses. It regarded that view as being carefully expressed and not an express endorsement of the particular expenditure under consideration. Nonetheless, the Board properly concluded that the question whether the payments were of a kind which could properly be authorised to be made from the accounts was a matter for its determination, a matter which could not be answered by relying upon the views of others. Again, the Board clearly considered that it mattered little that the applicant had been involved in opening the accounts with stated purposes and in determining the types of expenditure which might be made from them, if it was the case that, as the Board thought, the expenditure fell outside the limits of what was proper. In my view ground (c)(vi) invites a merits review which this Court may not undertake.

106          As to ground (c)(iii), the Board was well aware of the manner in

which the withdrawals had been made. It did not find that they had been made "in the reasonable and bona fide belief that the expenditure was appropriate and within the purpose designated for the relevant account". Rather, the Board expressed a finding in terms which it presumably regarded as being as favourable to the applicant as possible. It did so as follows:

"The Board is of the view that a practitioner of Prof Reed's experience and seniority, if he turned his mind to the question of whether the items of expenditure, the subject of the allegations, were within the terms of the accounts opened by him, which was his responsibility as an authorising officer, would have concluded the items to be inappropriate. An

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authorised officer has a responsibility to consider the appropriateness of expenditure, that is whether it falls within the terms of the account and complies with all the conditions applying to it. Had Prof Reed done so, he could not have reasonably concluded that any of the expenditure was appropriate."

1. In my view, it cannot be said that this finding of inadvertence was not reasonably open to the Board.

108          Nor was it accepted as a matter of fact that, as ground (c)(iv) puts it,

the Hospital administration, knowing the stated purposes of the accounts, "accepted that the withdrawals in question were within that purpose". Indeed, on a number of occasions the Board noted that the Hospital's administrative system relied upon being able to trust clinical staff to exercise proper judgment with respect to the operation of such accounts. As the Board put it:

"It is no answer to submit that items of expenditure were processed and approved by a Hospital officer without question. It is obvious that an item of expenditure backed by the authorisation of a medical practitioner having Prof Reed's seniority would carry significant weight as being prima facie proper with those officers responsible for certifying expenditure against these accounts."

109          Finally, in relation to these grounds I note the terms in which ground

(d) is expressed. It suffices to say that the ground cannot be made out. Before the Board the applicant's case involved very considerable criticism of the Review Committee and its processes. The purpose for which that was done is a little unclear because the applicant did rely upon the Review Committee's conclusion that his clinical privileges should be restored without delay. The Board said this recommendation was "irrelevant". It noted that the Committee was established under the guidelines to assist the Board in making its determination. The Board's observation that its recommendation about the outcome of the hearing before the Board was irrelevant was, in my view, no more than the expression of the view, correctly in my opinion, that it was for the Board to determine what should be the outcome of the proceedings in respect of the applicant's clinical privileges. That was not an error of a jurisdictional kind revealing that the Board had failed to properly grasp its jurisdiction and powers.

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Other Jurisdictional Questions

110          I propose finally to take grounds (e) and (f) together. If ground (f)

was intended to add to the ambit of ground (e) it is not clear to me how it does so and the application was not argued in that way. I have discussed the statutory framework and the broad power of management and authority derived from s 4(1) of the University Medical School, Teaching Hospitals, Act in relation to the making of arrangements for staff of the UWA to practise within the Hospital. I have referred to the relevant aspects of the contract which was made in this case and to the guidelines which were adopted. It is those arrangements which endorsed the concept of clinical status and attendant clinical privileges and the processes by which they may be conferred and removed. I can see no jurisdictional point arising in this context which would preclude the Board from determining that the suspension of the applicant's clinical privileges should be resolved, not by their restoration, but by their revocation. I note that not only was that proposition, as such, not argued before us, but it does not appear to have been pursued before the Board.

111          Specifically as to ground (e) the point is of course of a much more

limited kind, although again it is a point which does not appear to have been argued for the applicant before the Board, so far as I can discern. It may be refined into the proposition that the Board lacked power, even if it found impropriety in the applicant's authorisation of expenditure from these accounts, to revoke his clinical privileges on that ground because the funds in the accounts were not the property of the Hospital but simply established under its financial administration.

112          The short answer, I think, is that in the circumstances described it

would be a matter for the Board to have regard to in the exercise of the discretion to restore or revoke the applicant's clinical privileges, in respect of which the Board undoubtedly had jurisdiction, that the applicant was established to have acted with impropriety in his employment of the processes of the Hospital's administration to withdraw funds from accounts such as these established for the pursuit of research and related purposes by the applicant within the Hospital and using its facilities. In other words, to my mind there is nothing in the sources of the Board's jurisdiction which makes the ownership of the funds absolutely determinative of the limits of the Board's jurisdiction. Nor does the applicant advance anything to support the argument beyond the bare assertion of the proposition that this is where the jurisdictional limit of the Board's powers is to be found.

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113          In any event, upon this aspect of the contention for jurisdictional

error, evidence beyond that placed before the Board is admissible before us and I would admit into evidence the affidavit sworn on 5 August 2002 of Mr Cartwright, the manager of financial services at the Hospital. Mr Cartwright explains that the Hospital's account No 2 has been established pursuant to the processes of the Financial Administration and Audit Act 1985 to receive moneys including specific purpose donations, bequests for specific purposes and research grants from private sources. The three accounts with which the evidence before the Board was concerned are in fact "cost centres", identifying related funds deposited into the account No 2. They are not of themselves separate accounts. Mr Cartwright deposed that there were 291 cost centres in relation to account No 2.

114          In those circumstances it would seem to me to be clear that at law the

property in the money deposited into this account would be that of the Hospital, although no doubt beneficial interests in the funds deposited would be held otherwise. However that may be, it seems to me to be abundantly clear that it was within the jurisdiction of the Board to deal with the applicant's clinical privileges in the way it did as a result of the findings it made as to the applicant's involvement in the use of funds deposited with the Hospital and administered by its officers.

115          For these reasons I would discharge the order nisi for certiorari. With it would go the interim injunction originally granted on 26 February 2001 and extended upon the grant of the order nisi on 9 April 2001.