The State of Western Australia v Kuan
[2016] WADC 176
•16 DECEMBER 2016
JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CRIMINAL
LOCATION: PERTH
CITATION: THE STATE OF WESTERN AUSTRALIA -v- KUAN [2016] WADC 176
CORAM: TROY DCJ
HEARD: 24 & 25 OCTOBER 2016
DELIVERED : 16 DECEMBER 2016
FILE NO/S: IND 170 of 2016
BETWEEN: THE STATE OF WESTERN AUSTRALIA
AND
RICHARD HWAI SENG KUAN
Catchwords:
Obtaining benefit and/or causing detriment by deceit or fraudulent means - Fraud by medical practitioner - Trial of issues - Construing industrial agreements in context of criminal law - Obligation to pay a facility fee
Legislation:
Nil
Result:
Offender to be sentenced on the basis that the benefit obtained was in the amount of $1,497,889 rather than $1,927,184
Representation:
Counsel:
The State of Western Australia : Mr J Whalley
Accused: Mr H C Quail & Mr S M Denman
Solicitors:
The State of Western Australia : State Director of Public Prosecutions
Accused: Denman Popperwell Lawyers
Case(s) referred to in judgment(s):
Amcor Ltd v Construction, Forestry, Mining and Energy Union (2005) 222 CLR 241
Bolitho v Western Australia (2007) 34 WAR 215
City of Wanneroo v Holmes (1989) 30 IR 362
Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337
Director General, Department of Education v United Voice WA [2013] WASCA 287
Health Services Union of Western Australia v The Director General of Health [2012] WAIRC 01117
Kucks v CSR Ltd (1996) 66 IR 182
Law v The State of Western Australia [2009] WASCA 193
Seamen's Union of Australia v Adelaide Steamship Co Ltd (1976) 46 FLR 444
Technomin Australia Pty Ltd v Xstrata Nickel Australasia Operations Pty Ltd (2014) 48 WAR 261
TROY DCJ:
Introduction
On 24 October 2016 the offender, Dr Kuan, pleaded guilty to all eight counts on an indictment dated 31 March 2016. Dr Kuan was not required to formally plead at an earlier appearance on 10 June 2016. Judgments of conviction were entered. A trial of issues was conducted before me on 24 and 25 October 2016, with 16 December 2016 set down as date of sentence. This judgment sets out my reasons for the basis upon which I intend to proceed to sentence.
By his pleas Dr Kuan accepted that on eight occasions between on or about 19 October 2007 (count 1), and during the period 4 November 2013 to 14 January 2014 (count 8) he, with intent to defraud, by deceit or fraudulent means, gained a benefit for himself or caused a detriment to his former employer, the Department of Health contrary to s 409(c) of the Criminal Code.
Dr Kuan is a medical practitioner. In July 1995 he took up a position as a radiation oncologist consultant at Sir Charles Gairdner Hospital (SCGH).
The relevant industrial agreements
Dr Kuan's employment was governed by successive Department of Health Medical Practitioners (Metropolitan Health Services) AMA industrial agreements.
For counts 1 and 2 the 2004 agreement applied. In respect of count 2, that is because the statement of earnings applicable to that count covered the period 1 July 2007 to 6 February 2008.
The 2007 agreement applied to count 3 (covering the period 7 February 2008 to 30 June 2008) and counts 4 and 5. That agreement was registered on 7 February 2008.
For counts 6 ‑ 8 the 2011 agreement applied. That agreement was registered on 28 January 2011.
The introduction of a Facility Fee
In written submissions dated 1 June 2016 the defence contend that in 1998, Dr Kuan and his fellow radiation oncologists were asked to voluntarily pay a 25% hospital Facility Fee (the term 'Facilities Fee' appears to be used inter-changeably) for the use of certain hospital facilities. In 1999, it was decided that this voluntary Facility Fee would be progressively increased to 50%.
In the 2004 Agreement, cl 24(8)(b) provided that:
As at the date of this agreement, the Minister has determined that (arrangement B practitioners) shall be required to contribute a percentage of net earnings from private practice within the hospital for the use of certain specified hospital facilities.
Radiation oncology was not included in the table set out at cl 24(8)(b).
Clause 24(8)(c) provided that:
payment of facility charges shall, at the direction of the hospital, be made either to the hospital or an approved a (sic) Special Purposes Account.
Clause 26(3)(b) then provided that after the deduction of facility charges a further payment of 50% would be made to an approved Special Purpose Account for Hospital/departmental purposes .
Clause 26(3)(e) provided that Special Purposes Account payments:
shall be made on receipt of a Tax Invoice from the hospital.
In an example statement of earnings then appearing in cl 26(4)(c), reference was made in sub-paragraph (v) to the provision of a tax invoice for both types of payment by the hospital. The 2004 Agreement therefore contained express separate payment mechanisms for the Facilities Fee and Special Purposes Account (SPA) payments, specifying when and where the respective payments were to be made.
The circumstances of Dr Kuan's offending
By his certified entries in statements of earnings that he provided from October 2007 onwards, Dr Kuan offended as acknowledged by his pleas.
Because of concerns about the lack of equity (as he perceived it to be) in the application of the Facility Fee, on 20 September 2006 Dr Kuan lodged his statement of earnings for the 2005/2006 financial year (the 2006 statement of earnings) without any Facility Fee being specified as being payable. This led to a dispute with, in particular, his superior Dr David Joseph.
Dr Kuan's relevant deceit or fraudulent means was his failure, thereafter, to declare all of the income received from the treatment of private patients at SCGH. That deceit or fraudulent means commenced with his 2007 statement of earnings.
The statements of earnings
Throughout his employment Dr Kuan conducted his private practice under what was referred to as arrangement B, which placed upon him the requirements I will shortly describe. In essence he was required to submit a statement of earnings which he signed so as to certify its accuracy. The Department of Health then used this document to determine the amount Dr Kuan was required to pay to them, out of his private income for the previous financial year.
Each of the counts on the indictment arises from Dr Kuan's certification, by his signature, on the relevant Statement of Earnings. These statements of earnings are to be found at pages 423A ‑ 423H of the prosecution brief, the brief having been tendered by consent during the trial of issues.
The statements of earnings document would be issued, partly pre‑populated, to an arrangement B practitioner such as Dr Kuan in or around September each year. The document would relate to the previous financial year.
During the trial of issues that was conducted before me on 24 and 25 October 2016, I accepted the tender of exhibits 2.1 and 2.2, being two spreadsheets agreed between the parties as representing the competing positions as to the quantum of Dr Kuan's fraud on each count.
The 2007 statement of earnings – count (1)
The statement of earnings at 423A is dated 18 September 2007 and gives rise to count 1. At pt (ii) Dr Kuan was required to insert the total amount of accounts (exclusive of GST) collected for the previous financial year. Dr Kuan inserted the figure $687,170. By his plea of guilty he accepted that the figure he should actually have inserted was $774,916.
Before any deductions are applied, 17.5% of the 'amount collected' figure is set aside to reflect administration and collection costs incurred by the practitioner. Also set aside is the figure, in this year $6,555, for the medical defence premium.
The resultant figure is referred to as the NET amount for distribution. According to the figure inserted by Dr Kuan it was $560,360 whereas it should have been $632,751.
A certain amount was then retained by the practitioner. Of the remaining balance, 50% was payable to an approved SPA for Hospital/department purposes as relevantly provided, for this statement of earnings, by cl 26 (3)(b) of the 2004 agreement.
Dr Kuan's acknowledged fraud arising from the 2007 statement of earnings amounted to $36,195. As was the case with all eight statements of earnings that he submitted to the Department of Health, he understated the extent of his receipts from private practice. As a consequence he deliberately understated the money that he was required to pay to the Department of Health for each financial year. That is the primary deceit/fraudulent means.
There was no compulsory Facility Fee payable at that time.
The 2008 statement of earnings – counts 2 and 3
Without repeating the exercise, the same type of deceit and fraudulent means arises from the statement of earnings for 2008 which (as explained at [5] ‑ [6] above) comprise two statements of earnings at 423B and 423C, each signed and certified by Dr Kuan on 22 September 2008. His acknowledged fraud for this financial year (counts 2 and 3) was $137,749.
There is no dispute between the prosecution and the defence arising from the statements of earnings required by the 2004 agreement, giving rise as they do to counts 1 and 2.
As I have noted, on 7 February 2008 the 2007 AMA Industrial Agreement came into effect. Significantly it included the addition of Radiation Oncology hospital facilities to the specified hospital facilities that attracted an obligation to pay a 50% Facility Fee.
The relevant clauses of the 2007 agreement
28.PRIVATE PRACTICE GENERALLY
'Private practice' means those services provided, in or using the hospital's facilities, and for which fees are charged by or on behalf of the practitioner.
…
(4) the Minister for health may from time to time prescribe the terms and conditions, including the payment of charges, under which facilities shall be made available to practitioners for the purposes of engaging in private practice within any public teaching hospital or in any other public sector health care facility. It is a condition of the granting right of private practice that practitioners comply with any such terms and conditions.
…
(11)Use of Hospital Facilities
Practitioners granted rights of private practice except practitioners under arrangement A, shall contribute a percentage of net earnings from private practice within the hospital for the use of hospital facilities as follows:
EMG
50%
Radiation oncology
50%
Pathology
50%
Nuclear medicine
50%
Ultrasound (except if done in a radiology department)
50%
Pulmonary Physiology
50%
Audiology
50%
EEG
50%
30. PRIVATE PRACTICE – ARRANGEMENT B
…
(2)A practitioner who elects to retain all private practice income shall:
(a)take personal responsibility for billing private patients seen in the course of duty;
(b)pay any facilities charge according to such terms and conditions as are determined from time to time by the Minister: and
(c)account for private practice billings as prescribed hereunder.
…
(4)Distribution of Nett Earnings after Deduction of Facility Charges
…
(b)in the case of practitioners, who are not pathologists or nuclear physicians, fees received from private practice within the hospital, in excess of the amount authorised under paragraph (a), shall be distributed as follows:
(i)50% to an approved special purpose account for hospital/departmental purposes; (exclusive of GST)
…
(e)the distribution of funds to an approved special‑purpose account under paragraphs (b), (c) or (d) and GST applicable shall be made on receipt of a tax invoice from the hospital.
(5)Statement of Earnings to be Provided
(a)The practitioner shall provide to the hospital by 30 September each year a statement for the year to 30 June prepared and certified by a certified practising accountant or chartered accountant in the following form together with cheques for the amounts to be paid to the hospital and into the approved special-purpose account respectively: (details of the form are then provided)
…
(c)Example of Statement of Earnings to be Provided (example assumes all accounts rendered are for services for which a facilities fee is payable, in practice they may apply to none or only a proportion of services provided).
…
(iv) (A)To the hospital – payment (exclusive of GST) for the use of hospital facilities.
(v) From the Statement, payments to be made by the practitioner to the hospital (tax invoice to be provided by the hospital):-
(B)To approved Special Purpose Account
The purpose of cl 30(2)(b)
In the 2007 Agreement, the primary change to the payment mechanism was the deletion of a provision equivalent to what had appeared in cl 24(8)(c) of the 2004 Agreement. However, the 2007 Agreement added cl 30(2)(b), which imposed the obligation to:
pay any facilities charge according to such terms and conditions as are determined from time to time by the Minister.
I accept that this provision constitutes the intended payment mechanism for the Facilities Fee. The payment mechanism for the SPA remained unchanged (in cl 30(4)(e) of the 2007 Agreement), as did the reference to provision of a tax invoice for the Facilities Fees and SPA payments in the example statement of earnings in cl 30(5)(c)(v).
On Dr Kuan's behalf, the defence accept that proper construction of the entire 2007 Agreement, and in particular cl 30(5)(c)(v), meant that the Facilities Fee became payable on receipt of a tax invoice from the Hospital.
The 2009 statement of earnings – count (4)
The introduction of a compulsory Facility Fee in the 2007 agreement caused the statement of earnings for 2009 to differ from 2007 and 2008. This statement of earnings is found at 423D and gives rise to count 4.
The obligation to provide a certified Statement of Earnings is imposed by cl 30(5)(a) of the 2007 Agreement.
At pt (ii) Dr Kuan was required to insert the total amount of accounts (exclusive of GST) collected for the previous financial year. Dr Kuan inserted the figure $649,847. By his plea of guilty he accepted that the figure he should actually have inserted was $1,015,760.
As was the case previously, before any deductions are applied 17.5% of the 'amount collected' figure is set aside to reflect administration and collection costs incurred by the practitioner. The sum of $7,232 was set aside for the medical defence premium.
The resultant figure is referred to as the NETT amount for distribution. According to this statement of earnings it was $528,892 but it should have been $830,770.
Part (iv) A - payment for use of facilities
The form then requires the practitioner to then insert a figure at pt (iv)A. That figure is 50% of the NETT amount for distribution. It is payable to the hospital for what is described as a Facility Fee.
It is this concept that constitutes the controversy between the prosecution and the defence necessitating the trial of issues. According to this statement of earnings the amount payable to the hospital for the Facility Fee was $264,446. The defence admit it should have been $290,696 but according to the prosecution it should have been higher still, namely $415,385.
The payment to a special purpose account
As well as the controversial Facility Fee payment at (iv)(A), there is a further payment that Dr Kuan was required to make to the Department, and which he accepts was less than it should have been, as a consequence of his deliberately understated receipts.
Once the 50% Facility Fee payment had been made, a balance would be segregated from any further deduction. In Dr Kuan's case that was 25% of his base salary. The further payment would then be 50% of that sub‑total to an approved special purpose account. By his pleas of guilty Dr Kuan accepts that for each of the statement of earnings that figure was understated.
Each statement of earnings corresponding to counts 1 ‑ 5 contained a certification by Dr Kuan which read:
I certify that all monies due to the hospital have been accounted for.
The respective positions on the Facility Fee payment issue
The defence position, as developed during the hearing before me is that for certain aspects of Dr Kuan's private practice income, SGCH was not entitled to a Facility fee. Accordingly it is not appropriate to apply a blanket 50% to the NET amount for distribution.
The prosecution accepted that it was required to prove beyond reasonable doubt that the Facility Fee was payable on all of Dr Kuan's private practice income. In particular the prosecution case is that this fee was payable on both income received for treatment at SCGH involving the use of a piece of equipment called a linear accelerator and income derived from services provided by the SCGH Radiation Oncology department in a course of treatment for a radiation oncology patient.
It is the latter component, referred to by the prosecution in the hearing as ancillary services, that is the point in dispute and results in the difference in the amounts contended for by the parties.
Accordingly, the primary issue that I am required to resolve is whether the prosecution have established beyond reasonable doubt that Dr Kuan was obliged to pay a Facilities Fee on all private practice income or whether that fee was only demonstrably payable on private practice treatment income, namely the use of the linear accelerator.
I must determine if on the plain construction of cl 28(11) and its 2011 equivalent I am satisfied beyond reasonable doubt that Dr Kuan was required to contribute 50% of all of his net earnings from private practice within the hospital for the use of hospital facilities by way of a Facility Fee.
The statements of earnings under the 2011 agreement
The statements of earnings that are governed by the 2011 agreement begin with the statement of earnings dated 23 September 2011 (423F ‑ count 6) and conclude with the statement of earnings dated 23 September 2013 (423H – count 8).
Under the 2011 Agreement the position remained effectively the same as under the 2007 Agreement. Clause 27(10) of the 2011 Agreement on its face obliged Dr Kuan to pay a Facilities Fee of 50% on his net earnings calculated according to the Statement of Earnings set out in cl 29(5) of that Agreement. The only relevant difference is that in 2011 the example statement of earnings was removed.
This therefore meant that, whilst cl 29(4)(e) specified that the SPA payment was payable on receipt of a tax invoice from the hospital, the Agreement was silent on the issue of when and to where the Facilities Fee was required to be paid.
Again on Dr Kuan's behalf the defence accept that, even after the 2011 Agreement came into effect, Dr Kuan continued the practice of paying the Facilities Fees to the Department of Health in accordance with, and on receipt of, a tax invoice. Likewise, he concedes that if he had disclosed the full extent of his private practice income to the Department of Health, he would have continued paying the Facilities Fee on all Treatment Income in accordance with any such tax invoice.
In respect of counts 6 ‑ 8, the statement read:
I certify that this statement is submitted in compliance with the Private Practice provisions of the (2011) Industrial Agreement. At the date of signing I am not aware of any circumstances which would render the particulars misleading or inaccurate.
Secondary aspect of deceit/fraudulent means
I note that in addition to understating the extent of his receipts from private practice in each of the eight annual statements of earnings, for those billings that Dr Kuan accepted did attract a Facility Fee, he delegated the billing of that component of his private practice income to the Hospital Billings Clerk. Dr Kuan would then receive an Excel spreadsheet each calendar year detailing the invoices issued, and receipts recorded, by the Billings Clerk for the financial year. Although he knew that some receipts were not recorded by the Billings Clerk, Dr Kuan relied on the Billings Clerk's figures, knowing they understated his receipts, for the purposes of preparing his statements of earnings for each financial year.
Initially such discrepancies would normally be rectified through a follow up process undertaken by the Billings Clerk. To Dr Kuan's knowledge there came a time when the system stopped working so that the discrepancies were no longer identified. Dr Kuan knowingly failed to correct the discrepancies and as a result provided inaccurate statements of earnings. This constitutes the secondary deceit/fraudulent means.
The difference between the prosecution and the defence on quantum
The difference between the respective positions for each count is as follows:
Count Quantum of Fraud per State
$
Quantum of Fraud per Defence
$
1
36,195
36,195
2
84,835
84,835
3
76,055
52,752
4
226,409
164,064
5
322,318
242,649
6
363,063
272,774
7
422,450
332,673
8
395,859
311,947
Total
1,927,184
1,497,889
Accordingly, the total difference between the parties is $429,295. The dispute arises in respect of each of counts 3 ‑ 8 inclusive and so for these purposes it is not necessary to consider counts 1 and 2 further.
The applicable legal principles
The applicable principles are well known. A plea of guilty to an offence necessarily involves an admission by the offender of each of the elements of the offence, including all of the essential facts necessary to constitute the offence and also negatives all defences. A plea of guilty does not, however, constitute an admission of all of the facts stated in the State's depositions or witness statements. It is necessary for the sentencing judge to evaluate the facts, consistently with the plea, to determine the offender's culpability and decide upon an appropriate sentence: Law v The State of Western Australia [2009] WASCA 193 [27].
It is accepted that the position contended for by the prosecution is an aggravating circumstance, that is a fact or circumstance likely to result in a more severe sentence than would otherwise be the case: Law [28].
Accordingly it is for the State to prove that the position is as they contend for beyond reasonable doubt. Although by s 15 of the Sentencing Act 1995 (WA), in deciding on the proper sentence to be imposed, I may inform myself in any way I think fit, it is of course imperative that I keep that burden steadily in mind.
The witnesses called at the trial of issues
In order to discharge that burden the state formally tendered the prosecution brief and on 25 October 2016 called three witnesses who were cross-examined on behalf of Dr Kuan.
They were:
•Mr. Marshall Kingsley Warner, the executive director of workforce at the WA Country Health Service but previously the director of the health, industrial service for the Department of Health in Western Australia;
•Dr David John Joseph the head of Sir Charles Gairdner Hospital radiation oncology department from April 2006 until about July 2009;
•Dr Victor Bon Een Cheng the executive director of the Sir Charles Gairdner Osborne Park Health Group.
Although Dr Kuan bears no onus in this regard, he also nonetheless chose to give evidence and was accordingly cross-examined by counsel for the State.
The basis upon which the State contend for Facility Fee entitlement
The State is content for the primary issue to be resolved on the basis that if the Department of Health was not entitled to the Facilities Fee on a proper construction of the Agreement, however it was implemented in practice, then they have not been, relevant to these s 409 offences, deprived of anything nor has Dr Kuan gained a benefit.
In Bolitho v Western Australia (2007) 34 WAR 215 [174] Buss JA noted that an accused will have an 'intent to defraud', within s 409(1), if he or she intends (a) to cause or induce loss, detriment or prejudice (including the risk of loss, detriment or prejudice).
The State do not, however, contend that the benefit or detriment with respect to the Facility Fee is the deprivation of the Department's ability to litigate its contention of the proper interpretation of these agreements based upon a true understanding of Dr Kuan's actual income. Rather, they accept the responsibility of proving beyond reasonable doubt an actual entitlement to the Facilities Fee on all income as opposed to a potential entitlement.
The State contend that the primary issue is reduced to whether the reference to 'Radiation Oncology' in cl 28(11) of the 2007 Agreement (and its 2011 equivalent) refers to the use of the linear accelerator only or whether it refers to all patient treatment services provided by the Radiation Oncology Department.
The State's final position is that if the Department of Health was not entitled to the Facilities Fee on a proper construction of the agreements, however they were implemented in practice, then it has not suffered any detriment nor has Dr Kuan gained a benefit.
Applicable principles in construing industrial agreements
In construing the Agreement the State submit that I must endeavour to ascertain what a reasonable person would have understood the parties to the Agreement to mean. Further, that the language of the agreement should be understood in the light of its industrial context and purpose: Amcor Ltd v Construction, Forestry, Mining and Energy Union (2005) 222 CLR 241 [2] per Gleeson CJ and McHugh J.
Further, the State contend, citing the judgment of Madgwick J in Kucks v CSR Ltd (1996) 66 IR 182, 184, that a narrow or pedantic approach to the interpretation of an award is misplaced. The search is for the meaning intended by the framer(s) of the document, bearing in mind that such framer(s) were likely of a ' practical bent of mind.'
The framers, it is said, may well have been more concerned with expressing an intention in ways likely to have been understood in the context of the relevant industry and industrial relations environment than with legal niceties. It is justifiable to read the award to give effect to its evident purposes, having regard to such context, despite mere inconsistencies or infelicities of expression which might tend to some other reading. Meanings which avoid inconvenience or injustice may reasonably be strained for.
Relying upon the judgment of Buss JA in Director General, Department of Education v United Voice WA [2013] WASCA 287 [83] the State submit that the words of a clause in a written agreement are to be given the most appropriate meaning which they can legitimately bear. A court, it is said, must have regard to all of the provisions of the agreement with a view to achieving harmony among them.
I accept that these authorities explain the approach in construing an award in the context of an industrial relations dispute. They do not, in my view, dictate the approach to be taken by judge in a criminal context, when a particular interpretation of an industrial agreement is relied upon by the State to establish circumstances that aggravate the acknowledged offending and which accordingly must be proved beyond reasonable doubt.
As I will endeavour to set out, there are a number of challenges for the State in establishing their contention.
Lack of definition of key terms
The fundamental difficulty is that neither 'hospital facilities' nor 'Radiation Oncology' are defined in either the 2007 nor the 2011 Agreement.
I accept that that Industrial Agreements are not always framed with the same precision as statutory instruments and as held in Health Services Union of Western Australia v The Director General of Health [2012] WAIRC 01117 per Beech CC and Smith P:
… are not to be regarded as drafted by persons skilled in the drafting of legislation or other instruments.
To my mind that is not to the point. The State has figuratively nailed its colours to the mast by contending that the only permissible construction of the agreements is that Dr Kuan derived the actual benefit/caused the actual detriment contended for, thereby giving rise to the higher figure which must be established beyond reasonable doubt. I am not at liberty to excuse any infelicitous expressions. I have to determine whether the wording in these agreements is sufficiently clear so that I can reach the necessary conclusions asked of me by the State beyond reasonable doubt.
Evidence of the purposes for the Facilities Fee was payable
The State submits that inclusion of all services is consistent with the purposes for which the Facilities Fee was payable.
The State draws my attention to Mr Warner's evidence (ts 90) that the term 'facilities' in cl 28(11):
… is intended to and was intended by the parties when the agreement was negotiated to contemplate everything that – every resource the hospital puts towards the provision of that service including staff costs and utilities costs ...
Further, the State relies on Dr Cheng's evidence (ts 119) that the purpose of Facilities Fee was to defray costs involved in the use of facilities provided by the Hospital from the use of which practitioners derived a private practice income.
In the Radiation Oncology Department those facilities included CAT scan equipment, computers, software and multiple salaried staff involved in treatment planning and the operation and maintenance of linear accelerators, CAT scans and other equipment.
The State submits that the Facilities Fee payment from private practitioners was the only income that SCGH could obtain in respect of the services which involved the use of these facilities.
The State also rely on the observation of the then acting chief executive North Metropolitan Health Service, a Mr Wayne Salvage, on 19 October 2015 in a letter to the acting principal financial investigator at the Corruption and Crime Commission, included in the prosecution brief (PB) at 3877-2 that:
Facility fees are an integral part of the financing of expenditure at Sir Charles Gairdner Hospital.
Mr Salvage qualified his observations to an extent in a letter dated 11 October 2016 at PB 4043 ‑ 4044, having seemingly not appreciated that he was being asked to comment on how SCGH dealt with revenue generated from arrangement B between 2006 and 2013 as opposed to as of 19 October 2015.
Mr Salvage stated that revenue generated from arrangement B including facility fees and distribution of residuum earnings was paid into a special purpose account. Mr Salvage stated what that fund was used to pay for and made the comment that a failure on the part of the practitioner to properly declare his earnings would have reduced the funds available to improve radiation oncology patient care.
The State submit that it is illogical that cl 28(11) would oblige a practitioner make a contribution from the income received from the use of just one of the Department facilities, the linear accelerator, and not any of the other facilities.
That is all the more so, the State argue, when one considers Dr Joseph's evidence at ts 105 that the cost of the linear accelerator was retrospectively reimbursed via the Commonwealth Health Program Grants (HPG) scheme whereas, as Dr Cheng testified at ts 119 and 124, the cost of all other facilities was not reimbursed from any other source.
The State submit that a reading of the words ' Radiation Oncology' within cl 28(11) as encompassing all services is consistent with the purposes for which the Facilities Fee was payable. A narrow reading of the term to include only the use of the linear accelerator is inconsistent with those purposes.
At par 65 of its written submissions dated 30 October 2016 the State also placed reliance on the fact that all other Radiation Oncologists subject to the 'Arrangement B' provision of the 2007 and 2011 Agreements paid a Facilities Fee in relation to all services and not just to income derived from the use of the linear accelerator:
(i)Evidence of Dr David JOSEPH in the trial of issues at ts 101;
(ii)Evidence of Dr Victor CHENG in the trial of issues at ts 125 ‑ 126;
(iii)Statement of Dr Sean BYDDER par 26 (BP 350);
(iv)Statement of Dr Nigel SPRY par 38 (BP 392 - 393); and
(v)Evidence of Richard KUAN in the trial of issues at ts 172.
Such an argument is superficially attractive. There is a tension in that argument however, because at par 20 of its written submissions the State declined to rely upon how the agreement was implemented in practice, for the purposes of resolving the issue of whether a Facilities Fee was payable on all private patient income.
The State accepts that in construing an Industrial Agreement for the purposes of civil proceedings the court will not generally have regard to the subsequent conduct of parties to determine the intention of the parties at the time of the drafting of an Agreement: Seamen's Union of Australia v Adelaide Steamship Co Ltd (1976) 46 FLR 444, 446 per Sweeney J.
The State relies upon s 15 of the Sentencing Act to submit that the Court can inform itself in any way it sees fit and is not bound by strict rules of evidence. My capacity to inform myself as I see fit, however, cannot be exercised capriciously. It is not an unconditional power but is constrained by the principles for construction of industrial agreements and the rules of evidence.
The State submit that the fact that all other Radiation Oncologists paid a Facilities Fee in respect of all private patient income (and believed that it was so payable,) is consistent with the intention of the parties, when drafting the Agreement, that the Facilities Fee was to be payable in respect of all private patient income and not just treatment income.
Put another way, it is submitted that if it was the case that the intention of the parties to the Agreements was that the Facilities Fee was payable only in relation to treatment income and if the reference to 'Radiation Oncology' in cl 28(11) was intended to refer only to the use of a linear accelerator, then it is highly improbable that Radiation Oncologists subject to that clause, would have consistently paid a substantially higher compulsory Facilities Fee in respect of income not covered by the clause in question.
The State point to Mr Warner's evidence at ts 78 that the term 'facilities' as used in those Agreements was not well defined in the agreement but it is commonly held to be any costs or any private practice for which a bill can be raised by a doctor within the fabric of the hospital, a prescribed fee is payable so a share of the revenue collected.
Defence submissions on admissibility of evidence going to the construction of the agreements
The defence position is that only evidence of witnesses who were actual parties to the Agreements can be received and even then only as to their pre-contractual communications or other evidence of intent. As the parties to the Agreements were the AMA and the Minister for Health, the only such witnesses who can provide evidence as to apparent ambiguities are representatives of the AMA and/or the Department of Health who were involved in the negotiation of the particular clauses.
I agree that the only witness to come close to this category is Mr Warner.
As I have noted, Mr Warner, was formerly Director of the Health Industrial Service of the Department of Health. Mr Warner's duties included the execution of industrial Agreements on behalf of WA Government Health Services. He was a signatory to the 2011 Agreement.
Although Mr Warner purported to give evidence of his involvement in negotiations preceding the 2004, 2007 and 2011 Agreements, he acknowledged in cross-examination that he had only signed the 2011 Agreement. Further he had not been asked previously to provide details of the negotiations and/or to review his records for that purpose.
The State did not, through the evidence it adduced, establish when the obligation to pay a Facilities Fee was first introduced into the Agreements for hospital facilities other than Radiation Oncology. The State did not adduce evidence of any involvement of Mr Warner in the process at that time. The State did not establish whether the Facilities Fee clauses were incorporated into the 2004, 2007 and 2011 Agreements without discussion, or whether they were the subject of negotiations.
Where there is ambiguity or uncertainty assistance can be gleaned from prior negotiations and matters in common contemplation is admissible as extrinsic evidence to resolve ambiguity: see Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337, Technomin Australia Pty Ltd v Xstrata Nickel Australasia Operations Pty Ltd (2014) 48 WAR 261 and Director General, Department of Education v United Voice (WA) [19] (United Voice).
Evidence of post contractual understanding, even by the parties to the Agreements, is not relevant to the task of construction: see United Voice [19] and City of Wanneroo v Holmes (1989) 30 IR 362, 378 ‑ 379.
I find that the evidence given by Mr Warner and the other two witnesses called by the State, as to what was intended to be covered by a Facilities Fee generally is inadmissible.
Although Mr Warner may have been involved in the negotiation of the 2007 Agreement in the course of which Radiation Oncology was added to the list of specified hospital facilities, he did not give any evidence of negotiations around this specific issue. I accept that Mr Warner's evidence was to the effect that, whilst he now accepts that the concept of a 'hospital facility' is ill-defined, at the time of the relevant negotiations there was no discussion about what it meant. I find the reason for that is because it was assumed that all parties had the same common understanding that he had of that term.
Mr Warner gave evidence as to what could have been done had the issue been identified earlier, giving rise to an inference that it was not discussed at the time.
In my view there is no evidence before the court from Mr Warner, or anyone else on behalf of the State, about discussions between the negotiating parties that might assist in elucidating what was intended by the parties in listing Radiation Oncology in the 2007 Agreement as being one of the specified hospital facilities.
I accept the defence argument that the practice or understanding of other radiation oncologists, as well as other Hospital and/or Department of Health representatives, is not relevant given the way the State has put its case.
Was the Facilities Fee the sole source of revenue for the SCGH?
The defence submit that leaving to one side the relatively modest deductions for medical defence premium, the formulae appearing in cl 30 of the 2007 Agreement and cl 29 of the 2011 Agreement meant that, at a minimum, Arrangement B practitioners such as Dr Kuan effectively paid 41.25% (being 50% of the 82.5% residual after deduction of the 17.5% administration and collection costs) of all private practice income received by them (in excess of 25% of their base salary) by way of SPA payments.
Any obligation to pay a Facilities Fee was in addition to that obligation albeit that the money was then paid into the same account and used for the same purposes: letter from Mr Salvage at PB 4043.
I am satisfied that absent contracting out provisions (which were not relevant to Dr Kuan), the Facilities Fees could never be the sole source of revenue for SCGH.
In addition to the Facilities Fee and SPA payments, the Hospital would also receive Commonwealth grants in the form of Health Program Grants (HPG), which were unique to Radiation Oncology, were paid on every occasion the Radiation Oncology machines were used and effectively fully funded the acquisition cost of the machines retrospectively: ts 104 ‑ 105, 127 ‑ 128 and 150.
I accept that the evidence before me does not permit a conclusion that HPG payments only applied to the linear accelerator as implicitly contended at [63] and [88] of the State's final submissions.
Under cross-examination, both Dr Cheng (ts 127 - 128) and Dr Joseph (ts 104 - 105) referred to the application to equipment and machines (in the plural), without at any stage limiting it to the linear accelerator machine. Dr Kuan testified at ts 167 that the HPG payments at least applied to the CAT scanner as well.
Insofar as it is relevant to discerning the correct construction of the relevant clauses in the 2007 and 2011 agreements it is not the case that the Facilities Fee was the sole source of revenue for the Hospital.
The lack of admissible evidence on the meaning of the key undefined terms
The difficulties posed to the State by the fact that the relevant terms are not defined in either of the two relevant agreements are canvassed in some detail by the defence in its written submissions.
In respect of both the 2007 and 2011 agreements no evidence was called from one of the negotiating parties (the AMA). The AMA was the other negotiating party to all the agreements. Given that evidence of unilateral intent alone does not suffice, as the objective is to resolve the ambiguity by seeking to establish the common intention of the parties, the absence of evidence from a representative of the AMA stands in the way of the State discharging its onus.
Mr Warner's evidence with regard to the other negotiating party is confined to the 2011 agreement and even then he was unable to give evidence of anything other than his understanding of various provisions. Mr Warner did not give evidence of any discussions or other communications with the AMA that might assist in resolving what was intended when the words 'Radiation Oncology' were added in 2007 in the table in cl 28(11) of the 2007 Agreement.
Mr Warner is similarly unable to assist as to what was intended when the obligation to pay a Facilities Fee (not limited to Radiation Oncology) was first introduced into the AMA Industrial Agreements (whenever that occurred). The position, therefore, is that the key terms are undefined and there is no admissible evidence as to their construction.
What does the 50% formula in cl 28(11) and cl 27(10) relate to?
The only formula for calculation of the Facilities Fee liability appears in respectively cl 28(11) (for 2007) and cl 27(10) (for 2011). The State submits that the formula applies to all private practice income (after the relevant deductions). The defence submit that it applies to income from private practice within the hospital for the use of Radiation Oncology hospital facilities. The respective tables in these clauses, the defence argue, can only be regarded as defining the nature of the relevant hospital facilities, as some of the matters listed (EMG, Ultrasound, Pulmonary Physiology, Audiology, EEG) are inconsistent with it being a list of specialties or departments.
I take the view that I have to read the phrases in these clauses, 'net earnings from private practice' and 'for the use of hospital facilities' conjunctively.
Contributions to be determined according to discipline approach
I have considered whether it is open to me to construe cl 28(11) as providing that the contribution is to be determined according to the practitioner's discipline. This requires consideration of whether the words 'as follows' in cl 28(11) refers to the stipulated percentage contribution as opposed to hospital facilities.
The disciplines set out within the table are as follows:
•EMG (electromyography)
•radiation oncology
•pathology
•nuclear medicine
•ultrasound except if done in a radiology department
•pulmonary physiology
•audiology
•EEG.
All these categories are governed by a requirement to contribute 50%.
Accepting this argument means accepting that a Radiation Oncology hospital facility is any facility used by a radiation oncologist. Although the term 'oncologist' is not actually used in this clause I have no doubt that there is such discipline as a radiation oncologist.
The difficulty is that most of the other designated hospital facilities in this table are not amenable to the concept of delineation according to specialty, there being, for example, no such specialty as EMG (a diagnostic procedure called electromyography), Ultrasound (an imaging technique), Pulmonary Physiology, Audiology or EEG (a medical test measuring the electrical activity of the brain).
Further, as the defence correctly note, the Agreements clearly refer to particular specialties elsewhere when it was intended to impose an obligation on the particular specialty. There are, for example, references to pathologists and nuclear physicians in cl 30(4)(c) and cl 29(4)(c) respectively.
I take the view that this clause does not impose a requirement to contribute 50% according to one's discipline. Accordingly I have considered what other possible constructions of the term, 'use of (Radiation Oncology) hospital facilities' exist.
Possible constructions of the term, 'use of (Radiation Oncology) hospital facilities'
The defence point to a number of possible alternative interpretations in that regard.
The first possibility is that it applies to a facility that is solely confined to the practice of radiation oncology. If so, that would arguably exclude consultations rooms at which many of the ancillary services were provided because they were also used by other specialties such as medical oncologists, haematologists and palliative care practitioners: ts 144 and 154 ‑ 155. Further, CT scanners were also used by other specialties: ts 176 ‑ 177. The defence suggest this would mean that the Radiation Oncology hospital facility was the linear accelerator, given that it was the only facility that was unique to radiation oncology.
The defence accept an obligation to pay a Facility Fee based upon the use of the linear accelerator. On the State's case the obligation to pay a Facility Fee extends beyond payments for the use of the linear accelerator.
The second possibility is that it applies to any facility located within a Radiation Oncology Department, although though the word 'Department' is not actually used in this clause. Further, many of the other designated hospital facilities are not amenable to the concept of differentiation based on notions of departments. There is no such thing as an EMG, Ultrasound or EEG Department. These are diagnostic tests, as opposed to particular groups of specialists or individual departments. In his witness statement at PB 352 ‑ 359 at pars 21 ‑ 22 Dr Cheng groups these concepts as 'specific facilities' as opposed to 'departmental facilities' such as radiation oncology.
Dr Kuan's evidence at ts 127 was that in around 2008 after the opening of the Sir Charles Gairdner Cancer Centre there wasn't really a Radiation Oncology Department any more. Dr Joseph testified, however, that he was head of the department for Sir Charles Gairdner Hospital radiation oncology department from April 2006 until about July 2009. In any event the defence submit that this alternative raises the following difficult questions:
•What facilities would then be attributed to the Radiation Oncology Department, and what facilities should be attributed to the Sir Charles Gairdner Cancer Centre?
•Does a consultation room in the Sir Charles Gairdner Cancer Centre become a Radiation Oncology hospital facility when it is used by a radiation oncologist, but not when the same room is used by a different specialty (sometimes to see the same patient)?
•Or does it retain the Radiation Oncology hospital facility characterisation at all times, meaning that other specialties may have to pay for using the same room even though they are not radiation oncologists?
A third possibility is that the term Radiation Oncology hospital facilities applies where there are common features with the other listed hospital facilities, all of which seem to be primarily diagnostic, but also tend to involve either the use of a very expensive piece of particular equipment or the use of considerable staff and other hospital resources. As is the case with the first possibility the defence submit that it follows in this scenario that the linear accelerator is the only Radiation Oncology hospital facility being referred to.
The fourth possibility is that the concept of a Radiation Oncology hospital facility was to be the subject of a Ministerial determination under respectively cl 28(4) and/or cl 30(2)(b) of the 2007 Agreement or cl 27(3) and/or cl 29(2)(b) of the 2011 Agreement. Given the acknowledged (ts 82) absence of such a Ministerial determination, the defence suggest that this alternative would result in a situation where there are no Radiation Oncology hospital facilities to which the obligation to pay a Facilities Fee applied at the material times.
The defence suggest that in his witness statement at 352 ‑ 359 Dr Cheng seemingly favoured the second interpretation, whereas the State's case at the trial of issues seemed to proceed on the basis that a Radiation Oncology hospital facility is any facility used by a radiation oncologist. This is despite the unexplained differential between using and practice within/in the hospital facilities in cl 28(1) and cl (11) as discussed at [138] onwards.
Hospital facilities used by radiation oncologists
The defence contend that the State have erroneously assumed that the question of Dr Kuan's obligation to pay a Facility Fee should be determined by considering what hospital facilities (applying the State's definition of that term) are used by radiation oncologists.
The defence submit that such an approach is flawed because cl 28(11) in the 2007 agreement and the identical clause in the 2011 agreement – cl 27(10), in terms impose the obligation to pay a Facilities Fee on the use of Radiation Oncology hospital facilities. Ultimately, the defence submit, it is for the court to determine from the materials before it what a Radiation Oncology hospital facility was at the relevant times.
The unexplained differential between clause 29(11) and clause 30(4)(b)
As I have noted cl 28(1) of the 2007 Agreement defines 'Private Practice' as: 'those services provided, in or using the hospital's facilities, and for which fees are charged by or on behalf of the practitioner'.
I accept that the use of the word 'or' necessarily denotes a difference between the provision of services 'in' the hospital's facilities and the provision of services ' using' the hospital's facilities.
The obligation to pay a Facilities Fee under respectively cl 28(11) and cl 27(10)) arises out of ' private practice within the hospital for the use of' the specified hospital facilities.
Dr Kuan has always accepted an obligation to pay a fee for the use of the linear accelerator.
By contrast the obligation to make a SPA payment under cl 30(4)(b) (or cl 29(4)(b)) arises from ' private practice within the hospital'.
The defence submit that the logical consequence of the State's contention that Dr Kuan's obligation to pay a Facilities Fee extended to any private practice services provided within the physical fabric of the hospital is that there would never be any difference between 'using'/use of hospital facilities' and practice 'in or within the hospital facilities' because the latter would always be subsumed in the former.
I do not accept that the fact that because Dr Kuan did not (ts 171) dispute that a Facilities Fee was payable in respect of treatment income, namely the linear accelerator it follows, as contended by the State at [14] of its submissions, that he did not dispute that a Facilities Fee was payable in respect of services. I do not, therefore, accept that accordingly all issues relating to Ministerial determinations and mechanisms of payment of Facilities Fees fall away.
I accept the defence argument that this distinction leads to the conclusion that the obligation to pay a Facilities Fee arises from use of the specified hospital facilities, relevantly radiation oncology, whilst the obligation to make SPA payments arises from practice within the hospital. The definition of ' private practice' in cl 29(1) expressly incorporates both concepts.
The distinction in terminology in cl 29(11) vis a vis cl 30(4) has not been explained by the State.
Relevance of cl 30(5)(c)
I have also had regard to the words appearing in parentheses at the beginning of cl 30(5)(c) of the 2007 Agreement:
example (of statement of earnings) assumes all accounts rendered after services for which a facilities fee is payable, in practice they may apply to none or only a proportion of services provided).'
The defence submit, and I agree, that the Mr Warner's inability to give evidence as to what was intended to be covered by a Facilities Fee generally as I have observed at [103] also applies to his evidence concerning cl 30(5)(c). Further, Mr Warner merely provided an example where he thought that a partial Facilities Fee situation might apply (in the case of orthopaedic trauma surgeons), although he was unable (ts 96) to specify which of the specified hospital facilities an orthopaedic trauma surgeon might have occasion to use and then charge the patient for.
Mr Warner testified as to his understanding that this clause contemplates subsidiary Agreements dealing with some sub-specialties where there has been an express Agreement that no Facilities Fee would apply. Mr Warner was not aware of any such subsidiary Agreement being made in relation to Radiation Oncology.
The defence submit that as the orthopaedic trauma surgeons had no reason to be paying a Facilities Fee in the first place, their situation cannot amount to a valid example to explain why the 2007 Agreement recognised the possibility of having a partial Facilities Fee situation. This is reinforced by the fact that such an example would result in a nil rather than a partial Facilities Fee outcome, and is not therefore germane to the issue.
I accept the defence argument in this regard. I further accept that by these words in parentheses it is expressly recognised that some services provided by a practitioner do not attract a Facilities Fee. In my view this underscores the difficulty in assuming that a Facility Fee applies to all practice within the 'fabric' of the hospital or to all practice conducted by persons from a particular specialty and/or Department.
I note that the same clause as cl 30(5)(c) appears in cl 26(4)(c) of the 2004 Agreement.
I accept the argument that this choice of words amounts to evidence that it was never intended that the Facilities Fee would formulaically be payable on all private practice income earned within the hospital.
Conclusion - the focus is on what facilities Dr Kuan used
Accepting this argument means that in assessing Dr Kuan's obligations the focus is on what facilities he used, not what income deriving tasks he was carrying out as a radiation oncologist at SCGH.
I adopt the suggestion of the defence to re-state cl 28(11) by incorporating into it the definition of ' private practice' from cl 28(1). If that is done cl 28(11) relevantly reads:
Practitioners … shall contribute a percentage of net earnings from those services provided, in or using the hospital's facilities, and for which fees are charged by or on behalf of the practitioner.
I am therefore required to consider what facilities, if any, the State have established beyond reasonable doubt that Dr Kuan was using in addition to the linear accelerator.
The concept of 'net earnings from private practice' is straightforward enough. It is the concept of, relevantly, 'use of (Radiation Oncology) hospital facilities' that is not pellucidly clear.
What does the practice of Radiation Oncology involve
The State contends that the reference to 'Radiation Oncology' in cl 28(11) is a reference to all Radiation Oncology services and not merely to the use of the linear accelerator. The practice of Radiation Oncology and therefore the term '(Radiation Oncology) hospital facilities' involves more than merely the use of the linear accelerator machine: evidence of Dr Joseph at ts 97 ‑ 98 and PB 1689.
The State submits that a course of radiation oncology treatment typically involves:
•an initial consultation
•a CAT scan
•dosimetry and other treatment planning
•use of the linear accelerator
•a follow up appointment.
The State contends that the ancillary services are essential steps in a process involving the use of a linear accelerator. The linear accelerator cannot be used unless the preparatory steps have occurred: ts 109. The one cannot be artificially segregated from the other.
The defence submit that not all ancillary services are part of the course of treatment for a radiation oncology patient. In his evidence (ts 97) Dr Joseph testified that when a radiation oncologist first examined a patient who had been referred he/she would make a diagnosis, determine the appropriate treatment and only then, if it is appropriate to give radiotherapy, would the patient go for a process of having a CT planning scan or a simulation. Accordingly the initial consultation at least, forms part of the diagnostic process in order to ascertain the appropriate treatment plan.
Dr Kuan testified (ts 144 – 145) that the simulation and planning/dosimetry aspects were part of the process of planning the treatment to be delivered, and that patients would often not actually go through with treatment after they had passed those stages. Whilst the ancillary services might inevitably be required as part of the process of obtaining radiation treatment, they are not actually part of the radiation treatment itself.
There is little doubt in my mind that senior management at SCGH considered it logistically and administratively too difficult to distinguish between treatment and pre-treatment income. I acknowledge the force in an argument that the various holistic aspects of radiation treatment constitute the work conducted by a radiation oncologist such as Dr Kuan. There is a certain artificiality in seeking to compartmentalise them. All of these services are provided to a patient of a radiation oncologist and that these services are then billed to Medicare.
The State's argument that the practice of Radiation Oncology involves more than merely the use of the linear accelerator machine is persuasive but not sufficient to overcome the difficulties I have previously identified, having regard to the standard of proof.
Relevance of the formula for distribution not being broken down
The State submit that if cl 28(11) created an obligation to pay a Facilities Fee only on income derived from the use of the linear accelerator, then the formula for distribution of income provided for in cl 30(5) would not work.
Dr Kuan agreed that the application of that formula involved a deduction of 50% from the net earnings figure.
Dr Kuan accepted at ts 169 that the 'Total amount of accounts collected' in cl 30(5)(a)(ii) was the total income derived from all Radiation Oncology activities and included both treatment income and income derived from ancillary services.
Consequentially, the State submits that it would be impossible for the formula to work in practice if the Facilities Fee was only payable in respect of treatment income. It is not possible to arrive at a Facilities Fee figure relating only to treatment income. There is no provision in the Statement of Earnings to separate out treatment and non-treatment income.
The State submits that the Facilities Fee is derived from total income using the mechanical application of a mathematical formula: statement of Christine Smith PB 446-5 ‑ 446-6 at pars 13 ‑ 14 and the evidence of Dr Cheng (ts 123). There is no provision at any stage of the mathematical process to sub-divide the 'total amount of accounts collected' figure nor the 'Net amount' figure into treatment and non-treatment income prior to calculating the Facilities Fee payable.
Rather, use of the Statement of Earnings provided for in cl 30(5) results in a Facilities Fee that is derived from both treatment income and income from ancillary services, consistent with the construction of cl 28(11) contended for by the State.
There is no formula specified by respectively cl 30(5) or cl (29(5)). Whatever figure is inserted at this part as the Facilities Fee figure, that is then deducted from the NETT (as it is described in the agreement) amount for distribution, before the balance is distributed in accordance with the specified formula.
In my view it is significant that cl 30(5)(c) implicitly accepts that the provided example may well be predicated on a false premise, because it assumes all accounts rendered are for services for which a facilities fee is payable (but that) in practice they may apply to none or only a proportion of services provided.
The defence accept that there is no provision in the statements of earnings to distinguish between income using the specified hospital facilities and other income. The defence note, however, that there is likewise no provision to reflect the split envisaged by cl 30(5)(c) nor for that matter, by reference to cl 30(5)(b) any provision to reflect the spilt of medical defence premium between hospital private practice and other types of practice.
I am not satisfied that the only reasonable inference to be drawn from the fact that there is a lack of provision separating out treatment and non‑treatment income in the formula, is that the undefined concept of facility fee embraces both streams of income, given the lack of definition of the relevant terms within the agreements, the wording of cl 30(5)(c) and my earlier conclusions at [118].
Conclusion on primary issue
It is not possible, from the plain wording of the agreements or the evidence I heard, to reach a conclusion beyond reasonable doubt that the wording in cl 28(11) (and its 2011 counterpart) means that the Facilities Fee was payable on all private practice income earned by a radiation oncologist such as Dr Kuan within SCGH.
In so finding I disregard the fact that in its Unused Witness List (annexed to the defence Outline of Submissions on Sentence dated 1 June 2016), the CCC disclosed that the current Director Industrial/Legal at the AMA: 'is of the view that the applicable Agreement is ambiguous in relation to Facility Fee and how the Facility Fee should be calculated'. That observation is untested and it was necessary for me to form my own views on this matter in the context of the burden and standard of proof.
The absence of any Ministerial determinations under the 2007 and 2011 Agreements reinforces the ambiguity in the express terms of the Agreements in relation to the scope of, and mechanism for, payment of the Facilities Fee. The Agreements contemplate a wide power of determination, which, had it been exercised, was capable of resolving ambiguity.
Secondary issue
The secondary issue, namely whether if the Facilities Fee was payable on all private practice income, Dr Kuan had an intent to defraud when he deprived SCGH of the Facilities Fee does not, therefore, arise for consideration.
Overall Conclusion
Dr Kuan is accordingly to be sentenced on the basis that his total fraudulent benefit, across the eight counts, was $1,497,889. It follows that the discount to be applied pursuant to s 9AA of the Sentencing Act for Dr Kuan's guilty plea is not diminished because there has been a trial of issues. Whether those pleas were entered at the first reasonable opportunity remains, however, a live issue.
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