Schroeder Holdings Pty Ltd v The Hon. Crimes, D.J.

[1985] FCA 562

L- 4

EETHEEN: S:r3HFOEDEIi HOLPIMGS FTY.

LTD. s n d EYTAFIS GISELLE

NOMINEE3 PTY. LTD.

(TRADING AS "BALMORAL

LODGE PRIVATE rmsnrIC;

HOME" )

'Judse Maklns Order:	S m t h e r s J.
gat? m order:	7 November 1?%5

where ',Ia,I* : Melbourne .

MINUTE C)F ORDER

U: Yet t l e rnen t and e n t r y o f orders I? dealt m t h by IQrder 36

91 the Federal ':ourt Rules.

SCH3OEDEI;. HOLDINGS PT?.

LTE. and E X T A R 1 5 GISELLE

PIOMIPIEES FTY. LTD.

1 TRAGING AS "BALMORAL

LODGE PRIVATE NURSING

HOME" )

Applicants i

-	AND :	THE
JAPES GRIMES ibIH0 I S SUED

HONOURABLE DOMALD

AS THE GjMKONNEALTH

MINISTER OF STATE FOR

HEALTH) and IYICHAEL HENRY

COIjlj I r.JH0 I S SlTED AS THE

On 15 January 1985 a de termina t lon of a s c a l e of f e e s

app l l cab l s t o t he bus lness supe r sed lng the p rev lous s ca l e of

fees was made. On L2 July L985 the dele~qak? made 3

de te rmmat lon superseding that of 15 January 1985. Subsequent

Increase ; I n r e n t have been allowed f o r m the t.ee ' z t ruc ture

Iippllcable from time t o tune. a u t t h e amount a l lowed t o the

p r e v l o u j proprltcor under the headlng of r e t u r n on lnvestrnent

was ccns lde rab ly less t han the rent o r l g l n a l l y p a y a b l e by the

applicants t o thelr Lessor. The prevlous prqpr1et#of was also

9 le5.5~~1 of the pro pert:^ on whlch the home ~d carrl+?d on. The

€ s e s t r u c t u r e of that p r o p r l e t o r dld not l nc iude prov1;lon t o r

t h e a c t u a l r e n t p a y a b l e by lt. Thl; was because the

Department took t h e view that that prclpr le tor and it3 Lessor

were n o t 3t arms Length. Accordingly, an smount consldered

appropriate i c , r r e t u r n oli investment was taken I n t o the tee

s t r u c t u r ? or that p r o p r l e t o r . I t was t h a t same amount whlch

was taken Into account I n the rlrst fee s t r u c t u r e a p p l i c a b l e

It 1 s sald also that the scale of fees determmed on 1 2

July !c185 does not prosrlde t o r ,adequate profit and that

o p e r a t l n q undlr that scale the busmess 15 not n a b l e . It 1 s

.;ad also that In the clrcumstance exlstlnq as at 1 2 July 1985

lt was mproper for the delegate to determine a new ::tale of

fees wlthout q l n n g the applicants nstlce , ~ f lntenrlon to do

so, and that the delegate gave no such nstlce. The scale 2f fees determlned on 15 January L?H5 contained provlslon for wht 1 s called a loading of $ 2 6 1 per day whlch accoraing to

the determlnatlon of 15 January L985 wa5 to be Included l n the

scale of fees untll 8 April 1395 to recoup the applicants for

past unrecouped. espendlture. The Department had contlnued

that loading untll l? July 1985 whle conslderatlon was sqlven

to ~ t , s ~ust~ficatlon. In the determlnatlon of 12 July 1985

that loadlng was rzmoved. The effect of this xas to reduce

the Incane OI the home by some $ l ~ j O , O O O .

It 1 s claimed that tkls determlnatlon of 1 2 July 1385

was lnva l ld and the appllcants seek to have set aslde so

that the determlnatlon of 1 5 January L985 v111 contlnue In

4 .

aperat.cn. i t 575s clalmed t h e , d e c x l o n t o makt t h a t

determlnatlon vas u-mAli i I n sc' far as I t .;mltte,l t!..? loadin7

of $ 2 6 1 per day vhich had bce:~ allC'ried betzeeE 2 A p k l l 1%5

and 1: J u l y 1995. A po in t t a X m was tha t the respondent

cemoved the l oad ing no twl ths t snd lng t ha t I t %ss known t o h i n

that t h e r e had been a r ecen t 2.6% r i s e i n award wages. I t i s

clear, however, t h a t p e n d i n g , c l a r i f i c a t i o n as t o t h e a c t u a l

wages m c u r r e d the rlscl 1 s l n I t s e l f n o t s1gn1f1sant as

evidence t h a t t h e d e t e r m l n a t i o n was unreasonable . Ar i s ing out

these a l l e g a t l o n s lt i s submi t t ed t ha t I t 1 s e s t a b l i s h e d

t h l t t he aFpllcants a r e e n t l t l e d to r e l i e f 3n var lous grounds

s p e c l i i e d i n S. 5 of t h e AEJR Act.

The iscues have been argued before me on t h e basls t h a t

t h e p r m c i p l e s a p p l i c a b l e t o the matter of i n t e r l o c u t o r y

r e l i e f are t h o s e o r d l n a r l i y applicable I n an a p p l l c s t l o n f o r

r e l i e f i n t h e n a t u r e of a n m t e r l o c u t o r y 1 n ) u n c t l u n . For t h e

purposes of t h i s c a s e 1 accep t t h i s view.

I t 1s now c l e a r l y e s t a b l l s h e d that t h e t e s t t o be

a p p l i e d m t h i s C o u r t when de te rmln lng vhe the r t o issue an

m t e r l o c u t o r y 1 n ) u n c t i a n 1 s that approved by memb?rs of the

Hlgh Cour t and a r t l cu la t ed by the Flu11 Court of thls Court In

E p l t o m a F t v . L t d . v . Australasian Meat Cndustry Employees

rJnlon (1434) 3 FCP S 5 and h ~ l l o c k h Ors v . Cedersted

Furn lsh lnq Trades Soc le t7 of Auztrs las la C Orz (1985) 60 .LT,

L J J , 7 -c namely, thst t he fq ran t ing of a n m t e r l o c u t o r y injunction

1: cont ingent u p : ? f i n d i n g , f i r s t , the e x i s t r n c e of a s e r 1 . 3 ~ ~

ques t lon t o be t r i e d and second, t h a t the balance of

=, ..

The lssues have been the sub~ect of argument before me

and although I am satisfied that there is a serlous question

to be tried, I have come to the conclusion that 1 should refrsin from qrantmg interlocutory relief. M 7 reasms are as

€allows. The real ob~ect of interlocutory r?llef is to

restore the ioadinq of $ 2 6 1 per day 3 s from 1 2 July 1995. If lnterlocutory rellef in the nature of an lnjunction r-qulring the respondent to proceed on the basls that the determlnatlon

of 1 2 July 1965 be s e t aslde were granted that would restore

the determlnatlon of January 1985. That would avail the

applicants nothinq because the $261 loading In that

determlnation was made In respect of past expenditure of the

applicants slhlch was calculated to be reimbursed to the

appllcsnts by contlnulny that loadlny until 8 A p r l l 1985 when the loadlng was to cease. The lcading was In fact continued

by way of informal cxet'clce of admlnistrative dijcretlon from

that date 111 antlcipation that on th? relevant facts being

,ascertained It would ai)pear that it w a s ~ustified by recent

and current expenditure. If the Department was Yatisfied on

6.

recelvlnq ~nf~~rmar~o:? ccjnflrming the antlcipat?d facts, then,

no doLbt, that ioadlng would have been contmued and lncluded

In the next fc,rmai deterainatlon. But 3uch an Informal

continuation was. ~n my opmion, necessarllg suo~ect t o revlew

if upon elucldatlm of the facts upon which it was based the real facts were found to be other than were antlclpated, or if

wlthin a reasonable time the applicants failed to provlde

informatlon confirmlng the anticipated facts In a form

satisfactory to the Department o r which the Department ought

to have regarded as satlsfactcry.

It was because the Department considered that the

applicants had failed to supply confirmatlnn of the assumed

facts wlthin a reasonable time and desplt? request to do so

that It renewed the fee by removmg the loading. For the

purpose of the intsrlocutory rellef sought by the applicants

it 1s necessary to set aslde the determlnation of 12 July 1985

sa fa r as It ,operates a s a review (2f the continuation of the

loading and to restram the respondent from reviewing the

informal tentatlve declsion continue to the load1n.j

rettospectlveiy m d f o r the future. I am far frotn satisfied

khat the basis of the continuation of the loading was not

undermined by the f a i lu re of the sppllcants to confirm the

3,- a-su~t~:>tlans - of fact or! which it was nladc. Accordingly, the

bacls for disturblng that revlew	by interlocutory order 1 s not
establlshed.

The substance of what is being sought 1s. to my mind, in

the nature of a new determination on facts, which for that

purpo:?, a:? not rse.lb11.jhed. It -Jol.lld invc.lve an c:der by

the Court turnlng thak which was In substance condltlgnal Into

something whlct? 1 s unconditlonal and whlch could o n l y be bajed

on a f-lndicg that t!w fact: were such that the exetclse of

dizcretlon to renew the mfotnal declslon was unreasonable

snd un~ust. Or. the wldence at present before me I am not

satisfled that this is s o .

So far as balance of convenience 1 s concerned, the

inconvenience Involved in qrantlnq such rellsf materially

exceeds, I thlnk, that o f postponlng the granting of rellef

until it 1 s established that the applicants are entitled

thereto. If an order were made at this stage the applicants

would be entltled to recover lmmedlately from the Commonwealt?~

and patlents rces based on the inclusion in the fee structure

of $261 per day from 12 July 1985. If the applicants fail at

the hearlng that sum wculd be recoverable by the Commonwealth

and the patlents. The payment by the patlents of the sums

involved would be in the nature of a retrospective charge

which would involve hardship to them which they will never

suffer If the applicants fall at the hearing. A s to the

repayment of the sum whlch would be repayable by the

applicants to the Commonwealth if the applicants fail It is

sald that 1t wmld be difficult f o r the Commonwealth	to
recover the same lf the spplicants j e l l the buslness before	It

1 s recovered. If the appllcants wln there will be no

difficulty in recovering the amount due to It by ths

Commonwealth. The prGblem l ? f collection of the additicnal

amounts payable by patlent5 lf the appllcants succeed In thls

srnceelilng 7111 na t!.auJt be a dlfflcult cne but It wll? Se of the same order a5 tnat xhich would exlst in recovering amounts vhich vculd hecome payable by t h e patle2ts at thi? Etage under

an lnterlocutory mrder. And gf cour3e recovery Sy the

patlent5 trom the applicants cf amounts unnecessarlly removed

from them as a consequence of an lnterlocutory order xould in

the event that the applicants fail in this Sroceediny inv.2lve

obvlous problems. especially if the appllcants were to sell

the business. These problems would be greatly magfilfied If

lnterlocutory rellef extended so far as to requlre the scale of fees applicable slnce 15 July 1985 to include an additional Tomponent In respect of the difference between return on

Investment and additions for increases in rent and the actual

rent payable by the applicants. Finally, lt is within the

autimrlty of the deletgate to fix a future scale of fees whlch

wlll provlde for the recoupment over a perlod of any sum3 of Iunrecouped expenditure whlch ought to hayre been provlded for In the ?:clsting scale of fees.

The significance of these comments 1 s supported by the

slrcumstance khat the hearing of this appllcation	has been set
dovn for 11 December 1985.

The 3ppIicatlon for interlocutory relief should be

refused and the costs thereof reserved.

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