Woodhaven Lodge Pty Ltd v Secretary, Department of Health and Ageing
[2013] FCA 917
FEDERAL COURT OF AUSTRALIA
Woodhaven Lodge Pty Ltd v Secretary, Department of Health and Ageing [2013] FCA 917
Citation: Woodhaven Lodge Pty Ltd v Secretary, Department of Health and Ageing [2013] FCA 917 Parties: WOODHAVEN LODGE PTY LTD (ACN 115 149 909) v SECRETARY, DEPARTMENT OF HEALTH AND AGEING
KALINDA CRAFT PTY LTD (ACN 007 350 236) v SECRETARY, DEPARTMENT OF HEALTH AND AGEING
File numbers: VID 854 of 2013
VID 855 of 2013Judge: NORTH J Date of judgment: 22 August 2013 Date of hearing: 22 August 2013 Place: Melbourne Division: GENERAL DIVISION Category: No catchwords Number of paragraphs: 22 Counsel for the Applicant: Mr B J Murphy Solicitor for the Applicant: D. E. Phillips Counsel for the Respondent: Mr S M Rebikoff Solicitor for the Respondent: Sparke Helmore Lawyers
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
GENERAL DIVISION
VID 854 of 2013
BETWEEN: WOODHAVEN LODGE PTY LTD (ACN 115 149 909)
ApplicantAND: SECRETARY, DEPARTMENT OF HEALTH AND AGEING
Respondent
JUDGE:
NORTH J
DATE OF ORDER:
22 AUGUST 2013
WHERE MADE:
MELBOURNE
THE COURT ORDERS THAT:
1.The application for interlocutory relief is dismissed.
2.The applicant file and serve a statement of claim and amended application by 20 September 2013.
3.In the event that the applicant does not file and serve a statement of claim and an amended application in accordance with paragraph 2, the application stand dismissed.
4.The applicant pays the respondent’s costs of the interlocutory application.
Note:Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
GENERAL DIVISION
VID 855 of 2013
BETWEEN: KALINDA CRAFT PTY LTD (ACN 007 350 236)
ApplicantAND: SECRETARY, DEPARTMENT OF HEALTH AND AGEING
Respondent
JUDGE:
NORTH J
DATE OF ORDER:
22 AUGUST 2013
WHERE MADE:
MELBOURNE
THE COURT ORDERS THAT:
1.The application for interlocutory relief is dismissed.
2.The applicant file and serve a statement of claim and amended application by 20 September 2013.
3.In the event that the applicant does not file and serve a statement of claim and an amended application in accordance with paragraph 2, the application stand dismissed.
4.The applicant pays the respondent’s costs of the interlocutory application.
Note:Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
GENERAL DIVISION
VID 854 of 2013
BETWEEN: WOODHAVEN LODGE PTY LTD (ACN 115 149 909)
ApplicantAND: SECRETARY, DEPARTMENT OF HEALTH AND AGEING
Respondent
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
GENERAL DIVISION
VID 855 of 2013
BETWEEN: KALINDA CRAFT PTY LTD (ACN 007 350 236)
ApplicantAND: SECRETARY, DEPARTMENT OF HEALTH AND AGEING
Respondent
JUDGE:
NORTH J
DATE:
22 AUGUST 2013
PLACE:
MELBOURNE
REASONS FOR JUDGMENT
Before the Court are two applications in separate proceedings. The applicant in the first matter is Woodhaven Lodge Pty Ltd (Woodhaven Lodge). The applicant in the second matter is Kalinda Craft Pty Ltd (Kalinda Craft). Each applicant seeks to restrain the respondent, the Secretary of the Commonwealth Department of Health and Ageing from revoking their approval as a provider of aged care services. Each applicant operates an aged care facility. The facilities, in total, accommodate 60 aged care residents. The applicants are owned by the same company.
The applications have been brought on as a matter of urgency as the revocation of the approval of Woodhaven Lodge as an approved aged care service provider takes effect, from midnight on 22 August 2013, which is the day of this hearing. In the case of Kalinda Craft the revocation takes effect from midnight on 23 August 2013. The consequence to the applicants of the revocation of their approved provider status is that they would no longer receive Commonwealth funding.
The applicants were advised of the decision to impose the revocation by notices issued under s 67-5 of the Aged Care Act 1997 (Cth) (the Act) by a delegate of the respondent on 15 August 2013 and 16 August 2013 respectively. The notices were issued on the basis that the delegate in each case was “satisfied that there is an immediate and severe risk to the safety, health or well-being of care recipients to whom you are providing care”.
Whether the injunction restraining the imposition of sanctions set out in the notices should be granted depends upon whether there is a serious issue to be tried and whether the balance of convenience favours the grant of the injunction.
On whether there is a serious issue to be tried, Mr Murphy, who appeared as counsel on behalf of each applicant, contended that the operation of the notices denied the applicants procedural fairness. Under s 85-5 of the Act, there is a capacity for each of the applicants to apply to the respondent for internal review of the decision to revoke within 28 days of receiving the notice. The respondent then has 90 days within which to conduct that review. The sanctions on the other hand were to take effect within about a week from the service of the notice. Mr Murphy therefore contended that there was an inconsistency between the date of operation of the sanction as specified by the notice and the right to have an internal review. Mr Murphy submitted that the sanction should not take effect until that review process has been completed.
It is convenient to approach the applications by assuming in favour of the applicants that there is a serious issue to be tried on this point of an alleged denial of procedural fairness.
The real argument depends on an assessment of the balance of convenience. It became clear that this assessment required balancing the potential risk to the residents if the sanctions were not allowed to operate against the commercial risk to the applicants if the sanctions came into effect.
On the issue of the potential risk to the residents, the notices identified the basis on which the respondent made a determination that the applicants had failed to comply with the requirements stipulated in the provisions which govern the accreditation standards of aged care facilities.
The non-compliances were numerous and were set out in detail. For the purpose of this interlocutory hearing, it was important to seek to isolate the matters of particular concern to the respondent. What emerged was that a matter of grave concern to the respondent was the apparent history of the applicants’ non-payment of service providers, both employees and others in the operation of the facilities, such as food service providers, cleaning companies and medical suppliers. As a result, the respondent was concerned that the residents might be left without proper care. Some of the residents are high care residents.
The respondent was also worried that the applicants had failed to honour their undertaking to appoint an administrator to be responsible for ongoing care and services and to rectify the shortcomings of the services provided by the applicants.
The respondent’s concerns were exacerbated by the recent liquidation of the company which supplied labour. This company was related to the applicants. The consequence of its liquidation posed a danger that the staff who operate the facilities might not be available in the short term.
The respondent appeared at very short notice to respond to the applications. As the hearing of the applications unfolded, evidence was given by Ms Simmons on behalf of the respondent. She is the assistant State manager in Victoria of the Department of Health and Ageing. Ms Simmons has had a close connection with the issues relating to the applicants over the last 12 months.
Ms Simmons explained that the respondent has around 850 facilities of a like nature in Victoria. At present the notices issued to the applicants are the only two notices of the kind issued by the respondent in this State. This demonstrated the extreme concern which the respondent has for the welfare of the residents in these two facilities.
Ms Simmons also gave evidence that if the applicants were unable to continue to operate the facilities in the short term as a result of the refusal of an injunction, then the respondent would be in a position to assist in the transfer of all the residents on very short notice.
An affidavit in each matter was filed by Susan Therese Davies on behalf of the applicants. She is a manager employed to assist in the operation of the facilities. On the commercial risk to the applicants, Ms Davies gave evidence that the facilities only have Commonwealth funding until the end of August 2013 and that private investment could be difficult to attract without Commonwealth funding.
Mr Murphy contended that once the sanctions take effect the applicants would not be able to afford to continue to operate the aged care facilities. He said that if contingencies are put in place by the respondent to move the residents to other facilities, the applicants would not recover because their main assets were the allocated places which attract the Commonwealth funding. He said that the applicants ought to be provided with the opportunity to have an internal review prior to the sanctions being imposed.
In relation to the respondent’s concern that there was a danger that staff for the facilities might not be available in the short term, Ms Davies expressed a certain degree of confidence that the provision of labour for the facilities could be secured, but she could offer no certainty at the moment. She accepted that there was no arrangement with the liquidator of the labour supply company for the future funding of staff.
In the end, the applicants have not made out a case in favour of the grant of an injunction in these matters.
Consequently, the Court will order that the interlocutory application brought by the applicants in each case be refused. Each applicant should also pay the respondent’s costs of the respective application.
The originating application in each matter only sought interlocutory relief. The applications for interlocutory relief having been dismissed, the respondent initially sought that the originating applications be dismissed.
In response the applicants asked for a further 28 days to file and serve an amended originating application in each matter. The statement of grounds would be best achieved by requiring the applicants to file statements of claim. If they fail to do so the relevant application would stand dismissed. The respondent did not oppose this course of action.
Consequently, the Court will order in each matter that the applicant file and serve a statement of claim and amended application by 20 September 2013. In the event that the applicant in each matter does not file and serve a statement of claim and an amended application by that date, the relevant application will stand dismissed.
I certify that the preceding twenty-two (22) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice North. Associate:
Dated: 10 September 2013
0
0
0