Yoong v Director, Professional Services Review

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FEDERAL COURT OF AUSTRALIA

Yoong v Director, Professional Services Review [2023] FCA 1186

File number(s): QUD 377 of 2021
Judgment of: PERRY J
Date of judgment: 6 October 2023
Catchwords:

ADMINISTRATIVE LAW – where the Director of the Professional Services Review issued a notice to produce under s 89B of the Health Insurance Act 1973 (Cth) (the HI Act) in the course of a review of the provision of services by the applicant during the review period – where s 89B of the HI Act authorises the Director to issue a notice requiring production of “documents that are relevant to the review” including clinical records of services rendered or initiated during the review period – where the notice to produce required production of “complete clinical records” for 76 patients – where the applicant produced clinical records for services rendered or initiated within the review period only – whether inference should be drawn that the Director did not turn her mind to whether the complete clinical records of the listed patients were relevant to review – where the Director subsequently purported to narrow the temporal scope of the notice to produce in correspondence – proper construction of s 89B, HI Act – consideration of general principles with respect to the construction of powers to issue notices to produce documents or information in aid of an investigatory function – where relevant question for the Director in determining the scope of a s 89B notice is what documents or classes of documents are reasonably capable in a broad investigative context of being relevant to the review of services provided during the review period – held: the notice to produce was not authorised by s 89B because it was not confined to requiring production of relevant documents and is invalid

ADMINISTRATIVE LAW – whether decision to issue notice to produce was legally unreasonable – admissibility of evidence not before the decision-maker to establish legal unreasonableness

EVIDENCE – consideration of principles governing the drawing of inferences where there is no direct evidence of a fact in issue

ADMINISTRATIVE LAW – notice under s 106ZPM of the HI Act (s 106ZPM notice) given to the applicant that s 106ZPM(1) prevents Medicare benefits being payable for services rendered by the applicant pending compliance with the notice to produce – where it is a precondition to the issue of a s 106ZPM notice that the Director personally forms the view that the applicant has intentionally failed to comply with the notice to produce – whether the Acting Director improperly exercised the power to issue a s 106ZPM notice by acting under the dictation of the Director – where a draft s 106ZPM notice was prepared prior to the Acting Director reviewing the documents – where issues of credibility arose with respect to the evidence given by the Acting Director – finding that the Acting Director was not acting under dictation

Legislation:

Administrative Decisions (Judicial Review) Act 1977 (Cth) ss 11(1)(c), 16(1)(a)

Australian…

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Details
Case
[2023] FCA 1186
Decision Date

CaseChat Overview and Summary

In Yoong v Director, Professional Services Review, the applicant, a medical practitioner, challenged the validity of a notice to produce issued by the Director of the Professional Services Review under section 89B of the Health Insurance Act 1973 (Cth) (the HI Act) during a review of the provision of services by the applicant. The notice required the production of complete clinical records for 76 patients, although the applicant produced only the records for services rendered or initiated within the review period. The applicant argued that the Director did not consider whether the complete clinical records were relevant to the review. The court had to determine whether the notice was authorised by section 89B and whether it was legally unreasonable for the Director to issue the notice. The court also had to consider the admissibility of evidence not before the decision-maker to establish legal unreasonableness.

The court held that the notice to produce was not authorised by section 89B because it was not confined to requiring the production of relevant documents and was therefore invalid. The relevant question for the Director in determining the scope of a section 89B notice is what documents or classes of documents are reasonably capable in a broad investigative context of being relevant to the review of services provided during the review period. The court also held that the decision to issue the notice to produce was legally unreasonable because the Acting Director improperly exercised the power to issue a section 106ZPM notice by acting under the dictation of the Director. Although issues of credibility arose with respect to the evidence given by the Acting Director, the court found that the Acting Director was not acting under dictation.

The court further considered the principles governing the drawing of inferences where there is no direct evidence of a fact in issue. The court held that the well-established principle that the prospective merits of the grounds of review are relevant to the exercise of the discretion to grant an extension of time was not in issue. The court also held that, in the circumstances of this case, it was appropriate for the Court to hear full argument on the merits before determining the application for an extension of time. Given the significant merit of grounds 1(a) and 1(b), the application for an extension of time should be granted.

The court made several orders. First, the time for filing the application with respect to the decision made on 21 May 2019 to issue the Notice to Produce Documents and the Notice to Produce Documents itself was extended to 16 November 2021. Second, the application for judicial review was granted. Third, the parties were required to file and serve written submissions on the proposed orders and costs. Finally, the court noted that the parties should endeavour to agree to orders that otherwise give effect to these reasons and as to costs.

Orders

Orders of the court

1. Pursuant to s 11(1)(c) of the Administrative Decisions (Judicial Review) Act 1977 (Cth), the time for the filing of the application with respect to the decision made on 21 May 2019 to issue the Notice to Produce Documents pursuant to s 89B of the Health Insurance Act 1973 (Cth) and the Notice to Produce Documents itself be extended to 16 November 2021.

2. The application for judicial review is granted.

3. In the absence of agreement as to the orders otherwise required to give effect to these reasons and/or as to costs:

(a) on or before 4pm on Friday 20 October 2023, the respondent is to file and serve an outline of written submissions not exceeding 5 pages in length in support of her proposed orders;

(b) on or before 4pm on Friday 27 October 2023, the applicant is to file and serve an outline of written submissions not exceeding 5 pages in length in response;

(c) on or before 4pm on Wednesday 1 November 2023, the respondent is to file and serve any submissions in reply not exceeding 3 pages in length; and

(d) final orders will be determined on the papers without a further oral hearing.

THE COURT NOTES THAT:

4. The parties are to endeavour in the first instance to agree to orders which otherwise give effect to these reasons and as to costs.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

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Evidence

Evidence Before The Court

The well-‍established principle that the prospective merits of the grounds of review are relevant to the exercise of the discretion to grant an extension of time was not in issue: see, e.g., Hunter Valley Developments Pty Ltd v Cohen [1984] FCA 176; (1984) 3 FCR 344 at 349 (Wilcox J); Norouzi at [22]. It was also common ground that, in the circumstances of this case it was appropriate for the Court to hear full argument on the merits before determining the application for an extension of time. Given the significant merit of grounds 1(a) and 1(b) (which I have ultimately decided must be upheld), the application for an extension of time should be granted.3. EVIDENCE3.1 Evidence relied upon by the parties In support of the application, the applicant relies upon the affidavits of Michael Thomas Fletcher sworn on 15 November 2021 (first Fletcher affidavit) and 24 February 2022, and the affidavit of the applicant sworn on 24 February 2022 (the applicant’s affidavit). The first Fletcher affidavit was read subject to certain paragraphs not being read as agreed by the parties prior to the hearing of evidence. With respect to the applicant’s affidavit, the respondent objected to certain paragraphs ([2]–‍[12] and [20]–‍[21]) on the basis that this evidence was not part of the factual material before the decision-‍maker at the time of the decision. Those paragraphs of the applicant’s affidavit, which were pressed as relevant to background (the applicant’s qualifications, experience, and details of his practice at the Riverside Medical Centre) and to certain particulars relied upon in the application, were admitted provisionally, subject to relevance. As to the latter, at [20]–‍[21] of his affidavit, the applicant explains that many of the 76 patients listed in the Notice to Produce have been patients of his from between 5 to 25 years and have been seen by him for a variety of discrete, different and unrelated conditions. In my view, these paragraphs are relevant and admissible. That affidavit was otherwise read save for the third and fourth sentences of [19], [39] and Annexure MY05. The respondent relies upon the affidavits of David Rankin affirmed on 31 January 2022 and affirmed on 1 April 2022 (second Rankin affidavit). Dr Rankin made the Second Decision in his capacity as the Acting Director of the PSR. The respondent also relies upon the affidavits of Margaret Parker, Special Counsel, PSR, affirmed on 31 January 2022 and 1 April 2022 save for the second sentence of [16]. Both Dr Rankin and Ms Parker were cross-‍examined. The bundle of material before the decision-‍maker for the First Decision and the bundle of material before the decision-‍maker for the Second Decision were received into evidence as Exhibit R1 and Exhibit R2 respectively. Finally, a document containing a chain of internal email correspondence at the PSR on 8 November 2021 was tendered during the cross-‍examination of Ms Parker and received into evidence as Exhibit A1. That document had been provided to the applicant prior to the hearing by way of informal discovery by the respondent.3.2 Credibility of Dr Rankin

Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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