FEDERAL COURT OF AUSTRALIA
Orthotech Pty Ltd v Minister for Health [2013] FCA 230
IN THE FEDERAL COURT OF AUSTRALIA | |
ORTHOTECH PTY LTD (ACN 134 812 507) Applicant | |
AND: | First Respondent FIFINE CAHILL Second Respondent |
DATE OF ORDER: | |
WHERE MADE: |
THE COURT ORDERS THAT:
The amended originating application for judicial review filed 18 February 2013 be dismissed with costs.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
QUEENSLAND DISTRICT REGISTRY | |
GENERAL DIVISION | QUD 58 of 2013 |
BETWEEN: | ORTHOTECH PTY LTD (ACN 134 812 507) Applicant
|
AND: | MINISTER FOR HEALTH First Respondent FIFINE CAHILL Second Respondent
|
JUDGE: | COLLIER J |
DATE: | 18 MARCH 2013 |
PLACE: | BRISBANE |
REASONS FOR JUDGMENT
1 Before me for urgent determination is an amended originating application for judicial review filed on 18 February 2013 by Orthotech Pty Ltd (“Orthotech”). Pursuant to section 5 of the Administrative Decisions (Judicial Review) Act 1977 (Cth) (“ADJR Act”), Orthotech seeks judicial review of a decision (“the Decision”) of the second respondent Ms Fifine Cahill (“the Delegate”) as delegate of the Minister for Health (“the Minister”). The Decision was, in summary, to revoke the listing of the components of the VAIOS Shoulder System (“the Device”) in the Prostheses List forming part of the Private Health Insurance (Prostheses) Rules 2012 (No 2) (Cth) (“the Prostheses Rules”).
2 The complaints of Orthotech in relation to the Decision can be summarised as follows:
surgical procedures where the Device is used are commonly performed in circumstances where patients have private health insurance;
the Device was included on the Prostheses List on 5 January 2011 and has remained on that list since that time;
the inclusion of the Device on the Prostheses List allows patients to claim on private health insurance in respect of the cost of the Device;
the removal of the Device from the Prostheses List means that patients would be unable to claim on private health insurance in respect of the cost of the Device, and therefore surgeons are unlikely to use the Device in surgical operations;
the business of Orthotech in distributing the Device will, in effect, cease.
3 specifically, Orthotech seeks:
an order setting aside the Decision;
an order declaring that Orthotech is entitled, on payment of the ongoing listing fee, to have the Device included in the Prostheses List; and
costs.
BACKGROUND
4 Orthotech distributes orthopaedic implants for shoulders, hips and knees for use in surgical procedures in Australia. It also provides technical assistance to surgeons and other medical professionals in relation to procedures involving implants. At all material times Orthotech has been the distributor of the Device in Australia.
5 The Device comprises a number of components and can be described as a mechanical shoulder replacement device. It is manufactured by JRI Limited, a British company. Orthotech distributes JRI Limited products in Australia.
6 According to evidence of Mr Adrian Rowan, the general manager of Orthotech, in his affidavit sworn 5 February 2013, Orthotech has 154 prosthetic products on the Prostheses List, but distributes in Australia only one shoulder replacement device (namely, the Device).
7 A delegate of the Minister made a decision on 5 January 2011 pursuant to section 72-10(5) of the Private Health Insurance Act 2007 (Cth) (“Private Health Insurance Act”) approving the inclusion of the Device on the Prostheses List. It is not in dispute that this decision was made following recommendations to the Minister that the Device be approved by the Specialist Orthopaedic Clinical Advisory Group (“SOCAG”) and the Prostheses List Advisory Committee (“PLAC”). SOCAG is a specialist advisory committee which provides advice and recommendations to PLAC, a higher level advisory committee established in October 2010 by the Minister to replace the Prostheses and Devices Committee (“PDC”). As explained by the departmental level guide “Prostheses List: Guide to listing and setting benefits for prostheses” (“the Guide”) published by the Department of Health and Ageing in July 2010, PLAC makes recommendations to the Minister on appropriate listing, and benefits, of prostheses on the Prostheses List.
8 It appears that SOCAG recommended the Device be listed following a process of clinical evaluation of the Device by expert doctors in 2010. The expert doctors who assessed the Device were identified in correspondence as being (or including) Dr Graeme MacDougal and Dr Christopher Blenkin.
9 Copies of extracts from documents marked “February 2011” and “PDC-in-confidence” are annexed to the affidavit of Ms Alexandra McVay, solicitor for Orthotech, sworn 25 February 2013. These documents relate to Orthotech’s applications pursuant to section 72-10(2) of the Private Health Insurance Act for approval of components of the Device. Annexure AKM-12 to Ms McVay’s affidavit records the clinical evaluation of one of the doctors prior to the final SOCAG recommendations in 2010 in relation to one of the components of the Device. The opinion of the doctor in respect of the component was:
Suitable for listing
Equivalent to comparators – based on the clinical information provided, this product is equivalent to the comparator(s) currently listed in the Prostheses List
10 The evaluation also includes the following comment:
Comparators Reasonable and no reason to believe it will not perform similar to comparators.
Suitable
11 Similar evaluations were made in respect of all components of the Device, although in a number of cases with qualifications.
12 The components of the Device were listed in the Prostheses Rules in February 2011.
13 It appears that in early 2011, at the time that Orthotech obtained approval for the Device under section 72-10 of the Private Health Insurance Act, other distributors with prosthetic shoulder systems were refused approval for listing of their systems in the Prostheses Rules. It appears that as a result of concerns raised by those other distributors, on 4 April 2011 Mr David O’Neill, the Director, Prostheses Section, Private Health Insurance Branch in the Department of Health and Ageing wrote to four expert doctors, including Dr MacDougal and Dr Blenkin, requesting them to review their evaluations of shoulder systems (including their evaluations of the Device) made as part of the 2010 SOCAG process.
14 Responses from Dr MacDougall, Dr Blenkin and another expert (Dr Rowan) are in evidence. It is not in dispute that Dr MacDougall and Dr Blenkin confirmed their earlier assessments of the Device on the basis of substantial comparability with prostheses already listed, and that Dr Rowan agreed with those assessments.
15 A SOCAG meeting was subsequently held on 13 May 2011 where the earlier recommendations concerning the various shoulder system prostheses – including the Device – were re-examined. The minutes of the meeting noted that two prostheses “sponsors” (other than Orthotech) had raised concerns that their shoulder systems were declined for listing on the February 2011 Prostheses List, while the Device – being a comparator product – was included. Those two sponsors claimed that they believed they had provided similar evidence to that provided by Orthotech in its application. Materially, the minutes of the meeting provided:
Members discussed and agreed the VAIOS Shoulder System (Applications 388-397 – Orthotech) had insufficient data and should not have been recommended to be listed on the February 2011 Prostheses List. While the SOCAG believed at the time of assessment the evidence supplied satisfied the evidence criteria for listing, on further assessment of the supplied evidence, the SOCAG agreed the application contained insufficient clinical data specific to this device, and therefore recommends that the VAIOS Shoulder System be removed from the Prostheses List.
16 At a meeting held on 4 November 2011 SOCAG subsequently recommended to PLAC that the Device be removed from the Prostheses List.
17 By letter dated 15 December 2011 the chairman of PLAC informed Orthotech that PLAC had considered SOCAG’s advice and had determined to recommend to the Minister that the Device be removed from the Prostheses List. Subsequent correspondence ensued between Orthotech and the Department.
18 On or about 7 May 2012 Dr John Batten, the Chairman of SOCAG, provided “feedback” to the Department in relation to questions posed about the Device application. This was as follows:
SOCAG Assessment of the VAIOS Shoulder Application
1. Did any facts, that were pertinent to the original recommendation to list, change? (NB – A change of mind is not a change of fact). If yes, what changed?
No, nothing really changed. The VAIOS Shoulder was assessed as similar to comparators. Two other shoulder system applications were also considered in the same cycle, although they were both recommended to be declined for listing. One was considered to be new technology (novel) due to a large polycarbonate head. The other product had changed dimensions and geometry of the head and it was considered that it needed to be treated as a new product, not simply as an addition to its size range.
Because the VAIOS Shoulder was considered to be substantially clinically equivalent (SCE), it was recommended for listing whereas the other two applications were recommended to be declined due to a lack of the required minimum two years clinical evidence. A minimum of two years evidence was required for high risk products that were not assessed as SCE. It was also required for devices that were assessed as being novel.
2. Alternatively, were some facts recorded incorrectly or not at all, at the time of the original recommendation?
No.
3. If yes to either of the above, in what way are those facts critical (to the extent of changing a recommendation for listing)?
Not applicable.
4. If no to questions 1 or 2, what reasons caused a change of recommendation? In what way were those reasons sufficient weight to cause a change of recommendation?
When the VAIOS shoulder system was first considered by the SOCAG, it was recommended for listing based on it being substantially clinically equivalent (SCE) to other listed comparators. If a product was determined to be SCE, it could be listed on the Prostheses List, without necessarily requiring clinical evidence specific to the product being newly listed. These were the clinical evidence requirements, as understood and applied by the SOCAG, at the time of the initial assessment.
The clinical evidence requirements changed and when the VAIOS shoulder was reconsidered by the SOCAG, it recommended that when assessed against the new clinical evidence requirements, that it should be declined. This was because the new clinical requirements categorised all weight bearing joint replacement prostheses as high risk. The clinical evidence requirements no longer allowed for substantial clinical equivalence (SCE) to be sufficient grounds to recommend high risk devices for listing. Instead, a minimum of two years clinical evidence was required, specific to the device, regardless of whether it was substantially clinically equivalent or not.
5. What would be the outcome if the VAIOS shoulder system remained listed? Is it dangerous or sub-standard compared to comparator products?
The SOCAG has no particular concerns about the VAIOS shoulder system. Any general concerns would be the same as for other similar products. The product has been on the market for some time now and the outcome appears to be OK. The SOCAG is not aware of any particular issues in relation to the device.
6. Should all the “mandatory” requirements for a prosthesis to be listed apply in all the circumstances? Why? (nb because they are listed as “mandatory” is not a sufficient response.)
Yes, for consistency purposes, although clinicians also need to be able to exercise a certain level of discretion when considering applications and making recommendations to the PLAC.
19 SOCAG considered a further Orthotech submission at its meeting of 28 September 2012. At the PLAC meeting on 11 October 2012 members endorsed SOCAG’s recommendation, and agreed to recommend to the Minister that the Device be removed from the Prostheses List due to insufficient clinical evidence.
The Decision
20 The Decision was communicated in a letter dated 30 January 2013, signed by Mr David O’Neill of the Department. Materially the letter provided as follows:
ORTHOTECH – VAIOS SHOULDER SYSTEM – PROSTHESES LIST
I am writing to inform you that a decision has been made in relation to the prostheses that make up the VAIOS Shoulder System (specified below) and its continued listings in the Private Health Insurance (Prostheses) Rules 2012 (No 2) (the Rules). The decision was made by Fifine Cahill, Acting First Assistant Secretary, Medical Benefits Division.
Ms Cahill has made the following decisions:
To revoke, in accordance with section 330-20 of the Private Health Insurance Act 2007 (the Act) …. The listings in the Private Health Insurance (Prostheses) Rules 2012 (No 2) of the prostheses specified below by revoking, under subsection 72-10 of the Act …. The grants of the listings for those prostheses on 5 January 2011.
Specified Prostheses
Orthotech Pty Ltd
OH 386 VAOIS Humeral Head Humeral Head 42-54 mm
Orthotech Pty Ltd
OH390 VAOIS Reverse Humeral Insert Reverse Humeral Insert +0/6mm
Orthotech Pty Ltd
OH387 VAIOS humeral neck Humeral Neck one size
Orthotech Pty Ltd
OH388 VAIOS Humeral Stem Humeral Stem 8-16mm
Orthotech Pty Ltd
OH385 VAIOS Cemented Glenoid Cemented Glenoid Sm&Lg
Orthotech Pty Ltd
OH383 VAIOS Glenoid Metal Back Glenoid Metal Back Sm&Lg
Orthotech Pty Ltd
OH389 VAIOS Humeral Metal Back Reverse Humeral Metal Back one size
Orthotech Pty Ltd
OH384 VAIOS Glenoid Insert Glenoid insert Sm&Lg
Orthotech Pty Ltd
OH391 VAIOS Glenoid Dome Glenoid Dome 0,1.5mm
Orthotech Pty Ltd
OH392 VAIOS Locking screw Locking screw one size
In anticipation of a request from you, a statement of reasons for this decision will be provided shortly.
21 Detailed reasons for the Decision were provided by the Delegate on 8 February 2013. After identifying the material on which findings of fact were based, as well as those findings, Ms Cahill set out her Reasons for Decision as follows:
55. In making my decision, I have considered:
(a) The circumstances concerning the original recommendation and decision to grant the application to include the VAIOS Shoulder System on the list;
(b) The review of that decision by the PLAC and the SOCAG and the expert advice from subsequent recommendation to revoke the original decision;
(c) The Guide and the weight of expert opinion regarding high risk prostheses;
(d) The submissions by or on behalf of Orthotech, including supporting documentation to those submissions, regarding the VAIOS Shoulder System; and
(e) The expert analysis of the material contained in the Orthotech submissions and supporting documentation.
56. The SOCAG initially assessed that the VAIOS Shoulder System was substantially clinically equivalent to a comparator. At the time, a clinical assessor had noted that there was no data provided specific to the VAIOS system such as two-year follow-up data, saying the sponsor used success of the comparator to justify listing.
57. The SOCAG advises the PLAC that the VAIOS Shoulder System should be listed on the basis that it was equivalent to comparators, the PLAC recommended that the Minister list the VAIOS system components, and, after considering that advice, the delegate granted Orthotech’s application for listing.
58. Subsequently, after reviewing that advice and recommendation, the SOCAG and the PLAC concluded, in essence, that the original recommendation was erroneous because it was inconsistent with important recommendations in the Guide. Specifically, the Guide contemplated that the device was of a type that is “high risk” and that the company should provide clinical proof of comparative efficacy and safety, with a minimum two-year follow-up.
59. In that respect, I note that the Guide specifically sets a higher standard for evaluations for listing of high-risk devices and arthroplasties. This is the case even if those devices are otherwise substantially clinically equivalent to a comparator device. In particular, the Guide states that a device is to be treated as substantially clinically equivalent if, in comparison to comparators, it is not a high-risk prosthesis (eg, load bearing, articulating and/or a mobile implant). All arthroplasties are characterised as high-risk in the Guide.
60. The Guide provides for evaluation of applications for listing of a prosthesis against two specific criteria, which can be summarised as follows:
If the device is substantially clinically equivalent to a device already on the prostheses list, whether the comparator has demonstrated in clinical studies that the product is safe and effective over a period of time commensurate with its intended use, risk and likelihood of failure;
If the device requires durability, is a high risk device, mobile load-bearing devices (arthroplasties) or new device using novel technology or design, whether there is clinical proof of efficacy and safety with a minimum two year follow-up for that device (page 32 of the Guide).
I have taken account that the SOCAG and the PLAC make their recommendations based on the considerations set out in the Guide. The Guide was prepared with the input of experts in the field, including in the orthopaedic speciality, and contains relevant policy considerations which guide the exercise of my statutory discretion. However, I appreciate that the considerations in the Guide must not be inflexibly applied. I must be willing to depart from the Guide if the circumstances of the case require it. I have considered all of the submissions provided by or on behalf of Orthotech and am satisfied that it is appropriate to be guided by the provisions of the Guide.
61. I accept and give weight to the expert opinion that all arthroplasties are “high risk” and therefore should be listed only when there is at least two years of follow-up data to demonstrate clinical efficiency and safety. I also accept expert advice from the SOCAG and the PLAC that the VAIOS device should be considered high risk. I have weighed this information against the information provided by Orthotech, including:
Orthotech’s belief that the VAIOS Shoulder System demonstrates clinical safety and efficacy from both a product viewpoint and from patient results achieved by surgeons;
The number of VAIOS surgeries since its introduction to the UK in April 2010. I note that Orthotech stated the system had been on the list for many months and had been used successfully by many doctors since that time. I have also noted that the VAIOS Shoulder System has been on the list since February 2011 and I am not aware of any particular safety or efficacy issues in relation to the device.
Orthotech considers that it has demonstrated ‘clinical proof of efficacy and safety, with a minimum of two years follow up’, providing a document titled Review of the Ongoing Listing of the VAIOS Shoulder System on the Prostheses List that includes a document titled ‘Clinical data … The 2 year Results – 30 August 2012’, prepared by Professor Wallace and a colleague, JRI test reports dated in 2009, articles or ‘project reports’ dated 2007 and 2008, a poster presentation for the EFORT Congress in May 2012 and an earlier version of the Review of the Ongoing Listing of the VAIOS Shoulder System on the Prostheses List, provided in September 2011.
The VAIOS device has been registered by the Therapeutic Goods Administration (a precondition to listing in the Rules).
That Orthotech considers it has provided extensive product details, design analysis, testing reports, clinical data including a poster presentation by Professor Wallace at the British Orthopaedic Association in September 2011 and that in its view, the VAIOS system had been “peer-reviewed”.
That Orthotech had claimed substantial clinical equivalence and provided the reasoning behind its claim, in its application for listing.
References from several surgeons who have used the device in Australia, stating there would have been more references but for the short timeframe for its submission.
62. I note, however, that the PLAC also considered the additional information provided by Orthotech in August 2012. I accept the PLAC’s advice that the information provided does not demonstrate the comparative safety or efficacy of the VAIOS Shoulder System.
63. I accept the advice from the PLAC and from SOCAG that the information provided by Orthotech does not include at least two years follow up data.
64. I accept the PLAC’s advice that the information included literature on the Nottingham shoulder system and comparisons of it with the VAIOS Shoulder System and these comparisons only provided longer-term follow-up for the Nottingham system.
65. I accept the PLAC’s advice that the two-year follow-up was conducted by the designer surgeon and the cohort (16) in the follow-up was small for a high-volume prosthesis. The prosthesis was used for several pathologies, making any analysis impossible.
66. I also accept that the PLAC took into account in its evaluation that no peer-reviewed published data was provided by Orthotech.
67. On balance, having regard to the PLAC’s advice, and the information provided by Orthotech, I am not satisfied that the VAIOS Shoulder System should continue to be listed in the Rules.
68. I accept Orthotech’s advice that it would not have proceeded with the introduction of the VAIOS Shoulder System, and spent money doing so, if it had not been listed in the Rules in February 2011.
69. I note I have no evidence regarding what benefit Orthotech may have gained from having the VAIOS Shoulder System listed for the past two years.
70. I do not consider the expenditure incurred by Orthotech to be a sufficient reason to continue to list a high-risk prosthesis in the Rules.
71. I note there is a potential detriment to patients (who could potentially face complications, leading to further surgery, and who would in turn make a subsequent claim on private health insurance) and private health insurers if the prostheses list includes high risk devices and those requiring long term durability with insufficient evidence of their comparable safety and efficacy. If prostheses are less safe or efficacious, this has the potential for a higher rate of revision surgery, which in turn places a greater financial demand on the private health industry as a result of the listing.
72. Orthotech has stated that, if the VAIOS Shoulder System is removed from the prostheses list, then a person who requires subsequent revisionary surgery would not be able to have the VAIOS reverse shoulder operation and an entirely new shoulder system would have to be used.
73. However, I am satisfied that removing the prosthesis from the list would not prevent the VAIOS Shoulder System from being used. The Rules do not regulate whether a prosthesis can be used, but set out the minimum benefit a private health insurer must pay in respect of a listed prosthesis if a privately insured person with insurance covering the provision of the prosthesis is provided with the prosthesis during hospital or hospital-substitute treatment.
74. I accept that a privately insured person may be financially disadvantaged if their insurer would not pay any benefit for a prosthesis that is not listed.
75. On balance, I do not consider the financial disadvantage that some people may incur if they have to have subsequent revisionary surgery after receiving the VAIOS Shoulder System to be sufficient reason to continue the listing of this prosthesis.
THE RELEVANT LEGISLATIVE SCHEME UNDER THE PRIVATE HEALTH INSURANCE ACT
22 The objects of the Private Health Insurance Act are found in section 3-1, which provides as follows:
This Act is about private health insurance. It:
(a) provides incentives to encourage people to have private health insurance; and
(b) sets out rules governing private health insurance products; and
(c) imposes requirements about how insurers conduct health insurance business.
23 Section 3-5 and section 3-10 elaborate on incentives and “complying” health insurance products for the purposes of the Private Health Insurance Act, as follows:
Section 3-5
Incentives (Chapter 2)
Chapter 2 provides the following incentives:
(a) reductions in premiums for *complying health insurance policies;
(b) payments by the Commonwealth in relation to premiums paid for complying health insurance policies;
(c) a lifetime health cover scheme, under which premiums may rise for people who do not maintain private health insurance from an early age.
Section 3-10
Complying health insurance products (Chapter 3)
Chapter 3 requires insurers who make private health insurance available to people to do so in a non-discriminatory way, to offer products that comply with this Act, and to meet certain other obligations imposed by this Act in relation to those products.
24 Section 50-1 requires that health insurance made available to the public must meet the requirements in Chapter 3. This includes a requirement that the insurance be in the form of a “complying” health insurance product, and cross-references to Part 3-3 of the statute. Part 3-3 sets out the requirements that an insurance policy must meet in order to be a complying health insurance policy (section 60-1).
25 Materially in terms of this proceeding, section 72-1(1) provides that an insurance policy that covers hospital treatment meets the benefit requirements in Division 72 of the Private Health Insurance Act if the policy meets the requirements in the table in section 72-1(2). Item 4(b) of the table in section 72-1(2) provides (inter alia) that for a policy to cover hospital treatment it must provide a benefit for “the provision of a prosthesis, of a kind listed in the Private Health Insurance (Prostheses) Rules”.
26 Section 72-10 (“section 72-10”) regulates the listing of prostheses in the Prostheses Rules, in the following terms:
Minimum benefits for prostheses
(1) Private Health Insurance (Prostheses) Rules made for the purposes of item 4 of the table in subsection 72-1(2) must only list a kind of prosthesis if:
(a) an application has been made under subsection (2) in relation to that kind of prosthesis; and
(b) the Minister has granted the application.
(2) A person may apply to the Minister to have the Private Health Insurance (Prostheses) Rules list a prosthesis of the kind to which the application relates.
(3) The application must be:
(a) in the approved form; and
(b) accompanied by any application fee imposed under the Private Health Insurance (Prostheses Application and Listing Fees) Act 2007.
(4) The Minister must inform the applicant in writing of the Minister's decision whether or not to grant the application. If the Minister decides not to grant the application, the Minister must also inform the applicant of the reason for that decision.
(5) If:
(a) the Minister grants the application; and
(b) the applicant pays to the Commonwealth any initial listing fee imposed under the Private Health Insurance (Prostheses Application and Listing Fees) Act 2007 within 14 days of being informed of the Minister’s decision to grant the application;
the Minister must, on the next occasion when the Minister makes or varies the Private Health Insurance (Prostheses) Rules:
(c) list the kind of prosthesis to which the application relates in those Rules; and
(d) set out in those Rules a minimum benefit for the prosthesis; and
(e) if the Minister considers it appropriate--set out in those Rules a maximum benefit for the prosthesis.
(6) The Private Health Insurance (Prostheses) Rules may set out criteria (listing criteria) to be satisfied in order for an application (a listing application) made under subsection (2) to be granted. The Rules may provide for different listing criteria to apply in different circumstances.
(7) The Minister must not grant a listing application if any applicable listing criteria are not satisfied in relation to the application.
Note: The Minister may refuse to grant a listing application even if the applicable listing criteria are satisfied.
27 Once a prosthesis is approved and listed in the Prostheses Rules as a result of an application under section 72-10(2), the applicant must pay to the Commonwealth the ongoing listing fee. This requirement is found in section 72-15 (“section 72-15”) which provides:
Ongoing listing fee for prostheses
(1) This section applies if the Minister lists a kind of prosthesis in the Private Health Insurance (Prostheses) Rules as a result of an application under subsection 72-10(2).
(2) The applicant must pay to the Commonwealth the ongoing listing fee for which the applicant is liable under the Private Health Insurance (Prostheses Application and Listing Fees) Act 2007, within 28 days of each day specified under that Act as an ongoing listing fee imposition day.
(3) If the applicant fails to pay an ongoing listing fee in accordance with subsection (2), the Minister may remove the kind of prosthesis from the list in the Private Health Insurance (Prostheses) Rules.
28 It is not in dispute that, at all material times, the Minister has been empowered to make the Prostheses Rules pursuant to section 333-20 of the Private Health Insurance Act (“section 333-20”), which provides (so far as relevant):
Private Health Insurance Rules made by the Minister
(1) The Minister may, by legislative instrument, make Private Health Insurance Rules, specified in the second column of the table, providing for matters:
(a) required or permitted by the corresponding Chapter, Part or section specified in the third column of the table to be provided; or
(b) necessary or convenient to be provided in order to carry out or give effect to that Chapter, Part or section.
THE GUIDE
29 The Guide, which is dated July 2010 and was last updated 25 October 2010, is annexed to Mr Rowan’s affidavit, and is approximately 100 pages in length. The background to the current arrangements is described in the Guide as being a package of reforms to private health insurance implemented by the Australian Government after April 2003 including:
… new arrangements for listing products on the Prostheses List that provide for an evidence-based assessment of products and a centralised benefit negotiation process. These arrangements were developed to address the significantly increasing insurer expenditure on prostheses.
The arrangements were jointly developed and implemented by insurers, private hospitals, clinicians, sponsors of prostheses, and consumers. Key stakeholder organisations involved in implementation were the Australian Health Insurance Association (AHIA), the Australian Private Hospitals Association (APHA), Catholic Health Australia (CHA), the Australian Medical Association (AMA), the Medical Technology Association of Australia (MTAA) and the Consumers’ Forum of Australia (CHF).
30 Materially, the following statement is found in a section entitled “About this document”:
The Prostheses List Guide to listing and setting benefits for prostheses (“the Guide”) has been developed to provide information about the prostheses arrangements. Under these arrangements private health insurers are required to pay benefits for surgically implanted prostheses for appropriately insured persons. The guide also explains the process by which applications are assessed and listed.
The Guide is divided into two parts – Part 1 and Part 2.
Part 1 provides information on the prostheses arrangements.
Part 2 outlines the requirements for making an application to list a product. This includes new applications, duplications, expansions, compressions and the transfer of billing codes. Part 2 also outlines the processes to amend and delete items already on the Prostheses List.
Both parts of the Guide will continue to evolve over time to reflect changes to the process. This process is guided by feedback from key stakeholders.
31 The Guide provides that the Prostheses List will be released in February and August of each year, with each List commencing approximately 10 working days after its release to allow insurers to update their payment systems and hospitals their invoicing systems before the List commences (paragraph 2.4).
32 It is clear – and, indeed, not in dispute – that the Guide does not in any way mandate the manner in which the Minister or her delegate should reach a decision. It does not have the force of statute or legislative instrument. However it is relevant for the purposes of this proceeding because it provides a “guide” to the Minister and community stakeholders as to processes engaged in, relevant advisory bodies, and factors likely to be taken into consideration by the Minister, prior to the approval of a prosthesis for inclusion on the Prostheses List.
33 Section 2.2 of the Guide sets out the following criteria for listing products on the Prostheses List to be applied by SOCAG to each product assessed for listing:
1. The product must be included on the Australian Register of Therapeutic Goods; and
2. The product must be provided to a person as part of an episode of hospital treatment of hospital-substitute treatment; and
3. A Medicare benefit must be payable in respect of the professional service associated with the provision of the product (or the provision of the product is associated with podiatric treatment by an accredited podiatrist); and
4. The product should:
a. be surgically implanted in the patient and be purposely designed in order to:
i. Replace an anatomical body part; or
ii. Combat a pathological process; or
iii. Modulate a physiological process; or
b. be essential to and specifically designed as an integral single-use aid for implanting a product, described in a. i., ii., or iii. above, which is only suitable for use with the patient in whom that product is implanted; or
c. be critical to the continuing function of the surgically implanted product to achieve i., ii. or iii. above and which is only suitable for use by the patient in whom that product is implanted; and
5. The product has been compared to alternate products on the Prostheses List or alternate treatments and:
i. assessed as being, at least, of similar clinical effectiveness.
ii. the cost of the product is relative to its clinical effectiveness.
34 These criteria receive further explanation in Appendix A to the guide.
35 During the hearing last week extensive submissions were made, in particular concerning provisions in the Guide relating to:
assessment of prostheses when compared with comparators as being of “substantial clinical equivalence” (SCE);
circumstances where a prosthesis is a “high risk” product; and
the requirement for clinical proof of efficacy and safety with a minimum two year follow-up.
36 Of particular relevance are the following extracts from the Guide:
Two objectives of the arrangements for prostheses are to ensure prostheses on the Prostheses List are clinically effective, and that products of similar clinical effectiveness have similar benefits. (section 4.1)
Independent clinicians undertake clinical assessment of applications. (section 4.1)
Clinicians assess a product to determine its level of clinical effectiveness when compared with comparators – ie the product of treatment or therapy most likely to be replaced by the introduction of the product for which listing is sought. In most instances, the comparator is a prosthesis listed on the Prostheses List. (section 4.1)
In assessing applications and formulating their advice and recommendations to the advisory committee, clinicians draw on their expertise, knowledge and experience as experts in their specialty area to critically appraise the evidence sponsors provide to demonstrate the clinical effectiveness of their products.
Assessment of the clinical effectiveness of a product ideally should be based on all available relevant data, including, on occasion, unpublished studies. An application must include the best available clinical evidence to demonstrate that the product is safe and clinically effective. At the very least, evidence must demonstrate that the product is equal in clinical effectiveness to the nominated comparator – that is substantially clinically equivalent. (section 4.2)
CAG clinicians and clinicians on the PoCE advising the advisory committee, require information satisfying the following criteria to allow timely and appropriate assessment of products at the time of application to the Prostheses List, and to assist with subsequent review of benefits.
Sponsors are required to submit the following information with their new prostheses applications:
a clear explanation of the clinical indications/inclusions and contra-indications/exclusions for the use of the prosthesis;
evidence of the safety and efficacy of the device/prosthesis. Published evidence pertaining to the actual device to be listed (as opposed to similar technology).
However the level of evidence required is relevant to the level of perceived risk of major complications associated with the use of the product and its potential failure points. For those products with a relatively short intended life (less than 12 months) the length of clinical follow up must be at least equivalent to the intended product life. Major complications are those likely to have a significant adverse effect on the health and function of the recipient. Prostheses that would be considered as high risk and those requiring long-term durability need clinical proof of efficacy and safety, with a minimum two year follow-up. (section 4.2)
Substantial Clinical Equivalence (SCE)
Some new prostheses may be very similar in design and function to comparators on the Prosthesis List. The similarity may be such that the prosthesis could be deemed to be substantially equivalent to the predicated device. If this were the case then similar performance and complication rates with the comparator might be assumed in the absence of clinical trial information.
…
Substantial clinical equivalence means that the new device demonstrates essentially the same function and design characteristics of a device with proven clinical outcomes which is already listed in the prostheses list.
A device is substantially clinically equivalent if, in comparison to comparators it:
has the same intended use as the comparator;
has the same or very similar technological characteristics as the comparator;
does not raise new questions of safety and effectiveness;
and effective over a period of time commensurate with its intended use, risk and likelihood of failure;
is not a high risk prosthesis (eg load bearing, articulating and/or a mobile implant); and
is not new or novel in design.
A claim of SCE does not mean that the new and predicate prostheses must be identical …
It should be noted that clinical proof of efficacy and safety with a minimum two year follow-up is required for devices requiring durability, all high risk devices, mobile load-bearing devices (arthroplasties) or new devices using novel technology or design.
(section 4.2)
37 Part 7 of the Guide contemplates circumstances where an application by a sponsor to list a product on the Prostheses List is (inter alia) refused. In those circumstances the unsuccessful sponsor of the prosthesis may seek an internal review of the processes that led to SOCAG making its recommendations. Section 7.1 sets out the internal review process followed by SOCAG.
GROUNDS OF THE APPLICATION FOR JUDICIAL REVIEW
38 The grounds of the application for judicial review are as follows:
1. The decision was not authorised by the enactment in pursuance of which it was purported to be made (s 5(1)(d))
2. The making of the decision was an improper exercise of the power conferred by the enactment in pursuance of which it was purported to be made (s5(1)(e)) because
a. The Respondent failed to take relevant considerations into account in the exercise of a power, namely:
i. At the time when it was decided to include the Device on the Prostheses List in February 2011, the supporting material that was submitted by the Applicant satisfied all criteria, including all statutory requirements specified by Division 72 of the Private Health Insurance Act 2007 (Cth), then required for inclusion of a therapeutic device on the Prostheses List;
ii. That the Device had been successfully used in numerous cases in Australia (and overseas) since February 2011 without any adverse incident occurring;
iii. The Device had been chosen to be used by numerous specialist orthopaedic surgeons in Australia;
iv. There was no evidence, clinical or otherwise, to justify revoking the listing of the Device;
v. That there would a [sic] detriment to patients, already implanted with the Device if it was removed from the Prostheses List.
b. The Respondent made the Decision in accordance with a rule or policy adopted by the Prostheses List Advisory Committee after September 2011, namely that two years’ of clinical data would be a mandatory requirement for inclusion of a therapeutic device on the Prostheses List, without regard to the merits of the particular case
c. The Respondent erroneously took into account that the Prostheses List Advisory Committee and Specialist Orthopaedic Clinical Advisory Group concluded that the recommendations of those committees made prior to the Respondent’s February 2011 decision was erroneous.
3. The decision involved an error of law in that the Second Respondent:
a. [deleted from amended application]
b. Insofar as the listing of the Device on 5 January 2011 was revoked:
i. Considered the wrong question (i.e. whether the Device ought to have been listed in the first place, rather than whether the Device should remain listed);
ii. Was beyond power, as that decision had already been made and acted upon.
CONSIDERATION
39 The grounds of review advanced by Orthotech fall into two broad categories.
40 First, Orthotech claims, in summary, that the Delegate was not empowered by the Private Health Insurance Act (with or without reading relevant provisions of that Act with the Acts Interpretation Act 1901 (Cth) (“Acts Interpretation Act”)) to make the Decision revoking the listing of the Device in the Prosthesis Rules in the absence of a change in the facts upon which the original decision to list was made. This is apparent from ground of review 1.
41 Second, Orthotech claims, in summary, that the manner in which Ms Cahill made the Decision was such that it should be set aside. This is apparent from grounds of review 2 and 3.
42 I will consider each ground of review in turn.
GROUND 1
The position of the Minister
43 In summary, the Minister’s case in respect of the issue of power to revoke the Decision is in two parts:
1. Section 333-20 Private Health Insurance Act and section 33(3) Acts Interpretation Act
The power conferred under section 333-20 of the Private Health Insurance Act is a power to make an instrument, namely the Prostheses Rules, registered as a legislative instrument.
Section 33(3) of the Acts Interpretation Act (“section 33(3)”) provides as follows:
Power to make instrument includes power to vary or revoke etc. instrument
(1) Where an Act confers a power to make, grant or issue any instrument of a legislative or administrative character (including rules, regulations or by-laws) the power shall be construed as including a power exercisable in the like manner and subject to the like conditions (if any) to repeal, rescind, revoke, amend, or vary any such instrument.
The application of section 33(3) is subject to any contrary intention in the empowering statute (section 2(2) Acts Interpretation Act).
Section 33(3) is applicable to the power given to the Minister in section 333-20. The application of section 33(3) in these circumstances is not excluded by any contrary intention.
The power under section 333-20 will be exercised from time to time as required, permitted or as necessary under Part 3-3, including pursuant to section 72-10.
By virtue of section 33(3), the power to revoke the instrument will be exercised in the same manner and subject to the same conditions as the power to make the instrument. It is in that context that the decision under section 72-10 is to be reviewed.
2. Section 72-10 Private Health Insurance Act and section 33(1) Acts Interpretation Act
Reading section 333-20 with section 33(3), it is clear that there is a power in the Minister to revoke the listing of the Device in the Prostheses Rules.
The powers and functions conferred under section 72-10 are to be construed in the context of the broad power under section 333-20 to make, revoke, amend or vary the Prostheses Rules.
It follows that, in revoking approval of a listing given under section 72-10, the delegate will have regard to the matters governing the delegate’s exercise of discretion to grant approval in the first place under section 72-10.
Section 33(1) of the Acts Interpretation Act (“section 33(1)”) applies to the power or function conferred on the Minister in section 72-10.
Section 33(1) provides as follows:
Powers, functions and duties may be exercised or must be performed as the occasion requires
(1) Where an Act confers a power or function or imposes a duty, then the power may be exercised and the function or duty must be performed from time to time as occasion requires.
The application of section 33(1) in these circumstances is not excluded by any contrary intention.
The scheme of the Act does not suggest finality in respect of the exercise of power and functions under section 72-10.
The application of section 33(1) to section 72-10 requires that the power under section 72-10 be exercised “as occasion requires”. This power is not invoked arbitrarily – rather the power under section 72-10 can be invoked:
on the next occasion the Prostheses Rules are made or varied;
when the delegate becomes aware of circumstances which challenge the original correctness or the currency of the initial approval, in accordance with general principles that a decision that proceeded on a wrong factual basis should be capable of revocation.
Alternatively – the Minister submits that, reading section 333-20 and section 72-10 together and having regard to the general purpose and policy of the Private Health Insurance Act, there is an implied power to review the grant of applications as and when the Prostheses Rules are remade or varied in accordance with the Private Health Insurance Act.
Orthotech’s position
44 Not surprisingly, Orthotech vigorously disputes the Minister’s approach. In summary, the proper interpretation of the relevant legislation submitted by Orthotech is as follows:
Section 33(1) is not available to review or revoke the original decision to list the Device on the Prostheses List. Section 72-10 grants power to consider an application for listing in the Prostheses Rules, in exercise of a discretion. Section 33(1) cannot widen this power or allow it to be exercised more often than the purpose of the section permits.
The exercise of an unlimited power to review a decision made under section 72-10 does not sit comfortably with that provision. If the interpretation submitted by the Minister is the correct one, presumably the Minister would also have unlimited power to reconsider an application the Minister has refused – this is inconsistent with the statutory purpose of section 72-10.
The Private Health Insurance Act contemplates a single exercise of the section 72-10 power.
Once a decision has been made to approve a prosthesis for listing, the power of the Minister under section 72-10 to make a decision is discharged. Upon payment of the listing fee section 72-10 provides that the Minister must list the prosthesis in the Prostheses Rules upon the next occasion the rules are published.
The Minister relies upon no new fact in making the Decision.
The Minister cannot review or re-open the original decision approving the Device for listing.
Section 33(3) does not apply to a decision of the Minister under section 72-10 to grant an application for listing, because section 72-10 does not confer a power to make, grant or issue any instrument within the meaning of section 33(3). The power under section 72-10 is a power to consider an application for listing in the Prostheses Rules in the exercise of a discretion.
Further, the power under section 333-20 – read with section 33(3) – is not a power which enables the Minister to revoke the listing under the Prostheses Rules. The original decision of the Minister to list the Device was made in the exercise of a discretionary power under section 72-10, not under a legislative instrument (to which section 33(3) would be relevant).
The power given by section 33(3) to vary the Prostheses Rules operates only within the limits provided by section 333-20. It is not a power (with section 33(3)) to (inter alia) revoke the operation of another part of the Private Health Insurance Act unless specifically provided for by that part.
In support of this position Orthotech also refers to subsections 13(1) and (2) of the Legislative Instruments Act 2003 (Cth) which provide:
13 Construction of legislative instruments
(1) If enabling legislation confers on a rule maker the power to make a legislative instrument, then, unless the contrary intention appears:
(a) the Acts Interpretation Act 1901 applies to any legislative instrument so made as if it were an Act and as if each provision of the legislative instrument were a section of an Act; and
(b) expressions used in any legislative instrument so made have the same meaning as in the enabling legislation as in force from time to time; and
(c) any legislative instrument so made is to be read and construed subject to the enabling legislation as in force from time to time, and so as not to exceed the power of the rule maker.
(2) If any legislative instrument would, but for this subsection, be construed as being in excess of the rule maker’s power, it is to be taken to be a valid instrument to the extent to which it is not in excess of that power.
Further, section 33(3) does not “apply” to provide for a power to revoke the listing of a prosthesis in the same manner and subject to the same conditions as applicable to the grant of an application to list under section 72-10.
Section 72-10 contains mandatory requirements in that:
section 72-10(1) provides that the Prostheses Rules must only list a prosthesis if an application has been made and the Minister has granted the application; and
section 72-10(5) provides the circumstances in which a prosthesis must be listed in the Prostheses Rules.
In any event, a “contrary intention” (as contemplated by section 2(2) Acts Interpretation Act) is evinced by the legislative scheme in the Private Health Insurance Act because (inter alia):
the power to review decisions in an unlimited fashion would cause uncertainty;
finality is a powerful consideration tending against any such power;
applicants make investments founded upon listing in the Prostheses Rules;
third parties are clearly affected by exercise of the power, including patients who have received the prosthesis;
there is no right to seek review in the Administrative Appeals Tribunal.
Ground 1 – consideration
45 It is apparent from a review of relevant provisions of the Private Health Insurance Act that Parliament has legislated a manner in which an applicant can seek approval of a prosthesis for the purposes of that Act, to permit listing of the prosthesis on the Prostheses List. However, there is an unfortunate absence of clarity with respect to the appropriate procedure where subsequently the Minister seeks to remove a prosthesis from the Prostheses List. That this is so is not, in substance, disputed by the Minister. Indeed, the case of the Minister and Ms Cahill is predicated upon a somewhat torturous reading of the Private Health Insurance Act, the Acts Interpretation Act and the Legislative Instruments Act. In summary, the primary approach submitted by the Minister is to the effect that the Minister is empowered to revoke the grant of an application for listing (after approval has been granted pursuant to section 72-10 of the Private Health Insurance Act) because of the proper statutory construction of section 72-10 read with section 333-20 and subsections 33(1) and (3).
46 In this case it is not in dispute that:
the Prostheses List constitutes a part of Prostheses Rules;
the Prostheses Rules constitute an “instrument of a legislative….character” within the meaning of section 33(3);
the Minister is empowered to make the Prostheses Rules pursuant to item 4 of the table in section 333-20;
the Minister can vary or revoke the Prostheses List and make a substituted legislative instrument including a newer version of the Prostheses List;
Orthotech is entitled to seek review of the Decision, and that the Decision was made pursuant to section 72-10.
47 In dispute however is whether, in making a new version of the Prostheses List, the Minister is entitled to remove an approved prosthesis from the Prostheses List. It follows that the key question is whether, in making the Decision to remove the Device from the Prostheses List, the exercise of power by the Minister constituted “mak[ing] Private Health Insurance Rules, specified in the second column of the table” in section 333-20, and such that section 33(3) applies. The reason I so conclude is that unless the Decision can, by statutory construction, satisfy this description, there appears to be no basis upon which the Minister can make a decision revoking an existing approval of a listing made under section 72-10.
48 This is a difficult question. However in my view the correct answer must be that submitted by the Minister. I take this view in light of what I consider to be the intention of the legislature, based on construction of the Private Health Insurance Act. I have taken this view for the following reasons.
Section 333-20 is the leading provision
49 First, and primarily, I accept the submission by Ms Brennan for the Minister that section 72-10 is subordinate to 333-20 for the purposes of construing the relevant legislative scheme in the Private Health Insurance Act. Section 333-20 empowers the Minister to make relevant legislative instruments, including the Prostheses Rules. It is not section 72-10 which so empowers the Minister. The primacy of section 333-20 is recognised at the commencement of Chapter 3 of the Private Health Insurance Act, specifically at section 50-5 which provides:
Private Health Insurance Rules relevant to this Chapter
Matters relating to complying health insurance products are also dealt with in the Private Health Insurance (Complying Product) Rules, the Private Health Insurance (Benefit Requirements) Rules, the Private Health Insurance (Prostheses) Rules and the Private Health Insurance (Accreditation) Rules. The provisions of this Chapter indicate when a particular matter is or may be dealt with in these Rules.
Note: These Rules are all made by the Minister under section 333-20.
50 The work of section 72-10 in the Private Health Insurance Act is to provide a supportive structure for the Minister to make the relevant legislative instrument, with other sections in Division 72 of the Private Health Insurance Act (for example, section 72-1). So, for example, section 72-10 permits the Minister, on application of an applicant, to either grant or not grant the application for listing of the relevant prosthesis. It is clear that the sole purpose of the Minister in assessing the application, as required by section 72-10, is to determine whether the relevant prosthesis should be included in the Prostheses List made by the Minister pursuant to section 333-20. It is not in dispute that when the Minister approves applications for new prostheses for listing on the Prostheses List, a new legislative instrument must be made by the Minister pursuant to section 333-20 (namely a “new” version of the Prostheses Rules), and that generally this occurs twice every year in February and August.
51 Mr McQuade for Orthotech made powerful submissions to the effect that section 33(3) does not apply to the Decision because it is not in dispute that the Decision was made pursuant to section 72-10, and section 72-10 does not confer a power to make, grant or issue any instrument within the meaning of section 33(3). While there is force in these submissions, I consider that they attribute too narrow a reading to the legislative scheme comprising sections 72-10 and 333-20. To isolate a decision made pursuant to section 72-10 from its fundamental purpose in relation to making the Prostheses Rules pursuant to section 333-20 would be, in my view, an artificial construction of this legislation.
Interaction of section 333-20 and section 33(3)
52 Second, section 333-20 empowers the Minister to make (inter alia) the provisions in the Prostheses Rules providing for matters:
(a) required or permitted by the corresponding Chapter, Part or section specified in the third column of the table to be provided; or
(b) necessary or convenient to be provided in order to carry out or give effect to that Chapter, Part or section.
53 In this case the relevant Chapter is Chapter 3 of the Private Health Insurance Act, and in particular Part 3-3 which deals with Complying Health Insurance Products.
54 Terms similar to those found in section 333-20 are ubiquitous in statute. While broad, they do not confer unlimited power. As explained by Barwick CJ in Esmonds Motors Pty Ltd v Commonwealth (1970) 120 CLR 463 at 466-467 in relation to an Ordinance of the Australian Capital Territory containing similar provision:
Among the questions raised in this appeal is the important question whether the Minister for the Interior is authorized by s. 38 of the Ordinance to make a regulation appointing himself to be the prescribed authority within and for the purposes of s. 25(1) of that Ordinance. If the Minister is not so authorized, there was no valid reappraisement of the unimproved value of the land leased to the appellant to satisfy the terms of s. 25(1) and the terms of what is referred to in the learned primary judge’s judgment as “the substituted lease” to the applicant bearing the date of 10th March 1957. The further consequence would be that the appellant is entitled to the first three declarations which it has sought of the Supreme Court, the first declaration being limited to the situation existing at the date of the determination of these proceedings.
The answer to the question whether the Minister is so authorized is to be found upon a full consideration of the Ordinance read as a whole with the object of finding in its expressions the intention with which it was made and, in particular, the intended extent of the regulation making-power given to the Minister: and an examination of the ambit of the regulations considered in relation to the scope and purpose of the Ordinance so ascertained: see Morton v Union Steamship Co. of New Zealand Ltd (1951) 83 CLR 402 . (at p466)
The regulation-making power given by s. 38 is so far as presently concerned a power to make regulations not inconsistent with the Ordinance, prescribing all matters which are required or permitted to be prescribed, or which are necessary or convenient to be prescribed for carrying out or giving effect to the Ordinance. The regulations must be not merely consistent with the provisions of the Ordinance but must in their substance be also such as are by the Ordinance upon its true construction required or permitted to be made or be, again, in their substance, such as may reasonably be thought to be necessary or convenient for carrying out or giving effect to the Ordinance. The nature and purpose of the Ordinance and of its substantial provisions thus set the limits to the Minister’s power to make regulations. The power is limited to making regulations which, in their substance, are capable of being regarded as required or necessary or convenient for giving effect to or carrying out the Ordinance. Consequently in the present case it is necessary to relate the nomination of the Minister as prescribed authority to the Ordinance and the effectuation of its purposes.
(emphasis added.)
55 In Morton v Union Steamship Company of New Zealand Ltd (1951) 83 CLR 402 at 410 the Full Bench of the High Court observed:
There is no provision in the Act prescribing any matter or expressly permitting any matter to be prescribed to which the regulation would be relevant. The validity of the regulation, therefore, depends upon the words “all matters . . . as may be necessary or convenient to be prescribed for giving effect to this Act or for the conduct of any business relating to the Excise”. A statutory power of this description has been considered by this Court in Carbines v. Powell (1925) 36 CLR 88; Gibson v. Mitchell (1928) 41 CLR 275; Broadcasting Co. of Australia Pty. Ltd. v. The Commonwealth (1935) 52 CLR 52.
A power expressed in such terms to make regulations enables the Governor-General in Council to make regulations incidental to the administration of the Act. Regulations may be adopted for the more effective administration of the provisions actually contained in the Act, but not regulations which vary or depart from the positive provisions made by the Act or regulations which go outside the field of operation which the Act marks out for itself. The ambit of the power must be ascertained by the character of the statute and the nature of the provisions it contains. An important consideration is the degree to which the legislature has disclosed an intention of dealing with the subject with which the statute is concerned.
In an Act of Parliament which lays down only the main outlines of policy and indicates an intention of leaving it to the Governor-General to work out that policy by specific regulation, a power to make regulations may have a wide ambit. Its ambit may be very different in an Act of Parliament which deals specifically and in detail with the subject matter to which the statute is addressed. In the case of a statute of the latter kind an incidental power of the description contained in s. 164 cannot be supposed to express an intention that the Governor-General should deal with the same matters in another way.
56 Importantly, in Carbines v Powell (1925) 36 CLR 88 Isaac J observed:
To “carry out” the Act means to enforce its provisions. To “give effect” to an Act is to enable its provisions to be effectively administered. There is little, if any, difference between the two expressions. They both connote that the Governor-General’s regulations are to be confined to the same field of operations as that marked out by the Act itself. It cannot be supposed that Parliament gave permission to the Executive to enlarge legislatively that field at discretion.
57 Orthotech does not dispute that section 33(3) permits the variation of the Prostheses Rules, but submits that the power granted by section 33(3) operates only within the limits provided by section 333-20, and that this did not include the Decision to remove the listing of the Device following approval by the delegate on 5 January 2011 pursuant to section 72-10. Orthotech submitted that a contrary intention was clear from the Private Health Insurance Act, and relied on section 13(1) and (2) of the Legislative Instruments Act 2003 (Cth) to this effect.
58 In my view, however, on construction of the Private Health Insurance Act as a whole, Orthotech’s submission cannot be sustained. I do not consider a contrary intention as submitted by Orthotech is manifested on construction of the Private Health Insurance Act. I take this view for the following reasons:
1. Necessarily, the power under section 333-20 will be exercised from time to time as is required, permitted or necessary under Part 3-3 of the Private Health Insurance Act: section 33(1).
2. While the Guide does not have the force of statute, it includes a statement that:
The arrangements for including products on the Prostheses List help to ensure that benefits paid by insurers are relative to clinical effectiveness (section 1.1).
In my view this statement reflects a clear intention of the Private Health Insurance Act in relation to the power of the Minister to make rules listing prostheses which are within the scope of operation of that Act – namely to ensure that prostheses which are approved by the Minister are clinically effective and safe. To the extent that Orthotech submits that this is not a purpose of the Private Health Insurance Act, I reject that submission. The purpose of Part 3-3 of the Private Health Insurance Act is to set out the requirements that a private health insurance policy must meet in order to be a complying health insurance policy (section 60-1). More fundamentally, it is clear from section 3-1 that the intention of Parliament is that the Act regulate private health insurance in Australia and provide incentives to members of the public to contribute to private health (section 3-1). While the statute deals specifically with the machinery of the private health insurance system, there is an important balance to be struck between premiums, benefits payable to insureds, and the quality of products provided under private health insurance. Public policy and the health concerns of patients are entwined with the exercise of the Minister’s power under section 333-20 to make rules relating to the listing of prostheses (including the approval of the Minister to prostheses to be listed in the Prostheses Rules). In this respect, there is a strong policy dynamic in ensuring that the Minister has power to revoke or rescind decisions concerning prostheses on the Prostheses List. In my view any proposition to the contrary poses a risk that the Minister would be forced to continue to list outdated prostheses, resulting in potential harm to both patients and insurers, and ineffective administration of the private health insurance system under the legislation. I do not consider such a proposition is supported by the structure of the Private Health Insurance Act.
3. I am not persuaded by the submission of Orthotech that the mandatory requirement in section 72-10, that the Prostheses Rules must only list a prosthesis if an application has been made and the Minister has granted the application, are distinguishable from other provisions of the Private Health Insurance Act which specifically provide that the relevant rules may specify criteria and which rules may be (inter alia) revoked. In my view this approach is based on an unduly narrow interpretation of the power of the Minister in section 72-10. It is clear that the Minister is not required to approve an application for listing of a prosthesis in the Prostheses Rules. The proper construction of the Private Health Insurance Act, is that it is only once the Minister has approved an application for listing that a prosthesis can be listed in the Prostheses List (section 72-10(1)).
4. As I have already noted, it is not in dispute that, from time to time, the Prostheses Rules will be varied by the addition of prostheses previously unlisted. Indeed this is specifically contemplated by section 72-10, and the fact that both subsections 72-10(2) and 72-10(4) anticipate applications to be made from time to time by sponsors of prostheses for the approval of relevant prostheses, and the addition of those prostheses to the Prostheses List. The fact that the Prostheses List (and Rules) can and do change following such an application refutes any suggestion of entrenchment of the Prostheses List or fetter on the Minister in respect of the alteration of the Prostheses Rules. The fact that the Prostheses List is, in fact, dynamic, supports a finding that the legislation contemplates extensive powers in the Minister to both add and remove prostheses from the relevant rules.
5. While Orthotech concedes that the Prostheses Rules and List can be varied by the addition of a prostheses following approval of an application by the Minister, Orthotech argued persuasively that the scheme of the legislation dictates finality in a decision of the Minister approving a prosthesis. This is because a proper construction of the legislation dictates the importance of certainty for prostheses sponsors, insurers, health providers and private patients. While there is force to this submission, in my view a proper interpretation of the legislation is that the power of the Minister in relation to a decision approving a prosthesis is not spent when a decision is made. So, for example, it is clear from the terms of section 72-10(5) that the Minister will from time to time “vary” the Prostheses Rules. “Vary” is distinguished from “make” in terms of that section, and presumably includes a variation to the details of currently listed prostheses. I accept the submission of Ms Brennan for the respondents that, on Orthotech’s case, if the power or functions of the Minister under section 72-10 were to be spent on the initial exercise there would be no power to vary any details of a listed prosthesis, including setting minimum and maximum benefits, and that this restriction would be inconsistent with section 72-10 and with the nature of the Prostheses Rules as a legislative instrument subject to parliamentary control.
6. Further to this point, a power conferred on a Minister by statute for the exercise of a public discretion cannot, as a general proposition, be the subject of any form of estoppel to preclude the Minister or any successor to the office from exercising it at all, or in a particular way, in the future: Ansett Transport Industries (Operations) Pty Ltd v Commonwealth (1977) 139 CLR 54 at 74, Minister for Immigration and Ethnic Affairs v Kurtovic (1990) 21 FCR 193 at 200, 215. While the more likely context for judicial consideration of this principle is the circumstance where an act of the office holder appears to fetter the exercise of his or her discretion, the general principle that the exercise of a public duty cannot be the subject of administrative estoppel is relevant in this context.
7. By way of analogy I note the decision of the Court of Appeal of Queensland in Pfeiffer v Stevens (2000) 106 LGERA 461; [2000] QCA 090, affirmed by the High Court in Pfeiffer v Stevens (2001) 209 CLR 57, in which the Court of Appeal upheld a decision of the relevant Minister to, on multiple occasions, extend a “sunset provision” dictating expiry of a local law under the Local Government Act 1993 (Qld). The empowering provision was section 860 of the Local Government Act 1993 (Qld) which provided:
(2) The proposed local law must include a sunset provision stating the law will expire
(a) 6 months after its commencement; or
(b) at the end of a longer period gazetted by the Minister.
The applicant in Pfeiffer submitted that the relevant local law had included a sunset provision identified pursuant to section 860(2)(a) as six months from 14 March to 14 September 1997, and that once the method contemplated in s860(1)(a) was adopted, there was no power to resort to the alternative of a longer period contemplated in s860(1)(b). The Court observed:
The essence of the applicant’s submission is, however, directed to another point altogether. It is that the power, if any, of the Minister to extend the interim local law is limited to doing so on one occasion, and does not contemplate its being exercised by means of what the applicant described as “multiple gazettals”. This, however, is to ignore the impact of s23(1) of the Acts Interpretation Act 1954, which provides:
23(1). If an Act confers a function or power on a person or body, the function may be performed, or the power may be exercised, as occasion requires.
The Court of Appeal concluded that the Local Government Act read with the Acts Interpretation Act permitted the Minister to extend the date on which the local law was due to expire and that the Acts Interpretation Act 1954 (Qld) permitted the relevant power to be exercised “as occasion required”.
In affirming the decision of the Court of Appeal the majority of the High Court dismissed the contention that the power of the Minister to extend the expiry of the local law “an indefinite number” of times was incongruous. Gleeson CJ and Hayne J at 64-65 accepted that there could be reasons why a further extension of the time could be desired, and that this was the intention of Parliament in enacting the legislation. McHugh J specifically found that section 23(1) of the Acts Interpretation Act 1954 (Qld) authorised the Minister to extend the sunset period of a local law beyond six months whenever the circumstances of the case required it to be done provided the Minister did so for the purpose of carrying out the objects of the legislation (at 66, 74).
In my view section 33(1), being in the same terms as section 23(1) of the Acts Interpretation Act 1954 (Qld), when read with section 72-10, is equally applicable to negate the implication of finality of decision-making urged on the Court by Orthotech in this case, and to permit the Minister to reconsider approvals given in relation to prostheses “from time to time as occasion requires”.
8. In submitting that the Minister is functus officio once the decision is made to approve an application for the listing of a prosthesis, Orthotech relies on the decision of the Full Court in Minister for Immigration and Indigenous Affairs v Watson (2005) 145 FCR 542. In that case the Minister had cancelled Mr Watson’s visa on character grounds pursuant to section 501(2) of the Migration Act 1958 (Cth) (“Migration Act”), but then wrote informing him that the Minister had revoked that decision. Mr Watson sought (inter alia) a declaration that the Minister had made a decision revoking the cancellation of his visa. In the Full Court the Minister submitted that there was no power under section 501(2) of the Migration Act to revoke a decision to cancel a person’s visa. Section 501(2) provided:
The Minister may cancel a visa that has been granted to a person if:
(a) the Minister reasonably suspects that the person does not pass the character test; and
(b) the person does not satisfy the Minister that the person passes the character test.
Lander J, with whom Dowsett and Hely JJ agreed, found that an intention was expressed in the Migration Act contrary to the proposition that the Minister might revoke her own decision under section 501(2). In particular, his Honour referred to section 501F of the Migration Act, which provided, inter alia, that a decision of the Minister to cancel a visa was not reviewable (section 501F(5)). Further, and critically, Lander J observed at 563:
However there are other reasons for concluding that a contrary intention to that expressed in s 33(1) appears. The effect of s 501F is to deal with all applications and all visas as they exist at the time that the Minister makes his or her decision under s 501(1) or 501(2). A person is not allowed to bring another application where the Minister has made a decision under s 501 to refuse to grant a visa to the person or to cancel a visa that has been granted to the person: s 501E(1). The exception in s 501E(2) is not relevant for the purpose of construing the section. That shows that the purpose of the legislation is that the power given the Minister in the sections mentioned will only be exercised once. In those circumstances, the occasion for the exercise of the power on more than one occasion will never arise.
Because of the provisions of 501E, no further application for the grant of a visa can be made by the person affected. Because the person cannot thereafter obtain a visa, that person’s status has been determined for all time. That person is an unlawful non-citizen liable to detention and removal from Australia.
All the provisions of the Act to which I have referred indicate a contrary intention to that expressed in s 33 of the Acts Interpretation Act.
Placing to one side the fact that different legislation from that before me was under consideration, the situation in Watson is clearly distinguishable from that in this proceeding. Notwithstanding the removal of the Device from the Prostheses List, there is no embargo in the legislation on Orthotech applying for approval of the Device under section 72-10 in the future. The Decision of the Delegate is not, in the context explained in Watson, “final”. To that extent, the statutory construction of the Migration Act identified by the Full Court in Watson is not applicable to the legislative provisions under consideration in this case.
9. Section 72-15 specifically contemplates removal of a prosthesis in circumstances where the ongoing listing fee is not paid by the prosthesis sponsor. I am not satisfied on construction of the legislation that the mere payment of a fee is the sole determinant of listing of a prosthesis in the Prostheses List, particularly in light of the important policy considerations to which I have already adverted in this judgment.
Interaction of section 33(1) and section 72-10 – “change of mind”
59 Finally, Orthotech claims that the Decision was not authorised by the Private Health Insurance Act because, in summary, the Delegate had simply “changed her mind” in relation to the listing of the Device in the Prostheses Rules.
60 It is not controversial that a decision made arbitrarily and without foundation - including merely by a change of mind of the decision-maker without factual or evidentiary basis - is beyond power and reviewable under the ADJR Act. That this is so was reiterated by the High Court in Minister for Immigration & Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259 at 276.
61 In this case however I am not satisfied that the Delegate arbitrarily “changed her mind” in respect of the listing of the Device. At all material times the Guide stated that an application for listing of a high risk prosthesis should be supported by two years clinical data. Clearly, and notwithstanding the views expressed by the expert clinicians in assessing the Device, the basis upon which SOCAG and PLAC had made their earlier recommendations to the Minister concerning the listing of the Device, namely by equating substantial clinical equivalence to the existence of two years clinical evidence, was wrong in light of the principles set out in the Guide. The Delegate had become aware of this error. The Delegate in the Decision at paragraphs 58 and 59 recognised the correct interpretation of the Guide, and the errors attendant upon the earlier Committee recommendations.
62 Section 33(1) permits a power to be exercised from time to time “as occasion requires”. In this case:
the “occasion” identified by the Delegate to exercise the relevant power was the next date the Prostheses Rules were made or varied;
the occasion required the exercise of the power because the Delegate had become aware of circumstances which challenged the correctness of the original approval. There is clear authority to support an exercise of power to correct an original decision which proceeded on a wrong factual basis: Dallikavak v Minister of State for Immigration and Ethnic Affairs (1985) 9 FCR 98 at 103-104, Minister for Immigration and Ethnic Affairs v Kurtovic (1990) 21 FCR 193 at 218-219, Minister for Immigration & Multicultural & Indigenous Affairs v Craig (2004) 141 FCR 157 at [17]-[18];
the Decision sought to remedy the original incorrect decision which had been to approve the Device for listing;
the Decision was made to give effect to the purposes of the Private Health Insurance Act, including to ensure that prostheses on the Prostheses List were clinically effective and safe.
Conclusion
63 It follows from these reasons that ground 1 is not substantiated.
GROUND 2
Ground 2(a)
64 In ground 2(a) of the amended originating application Orthotech claims that the Delegate failed to take into account relevant considerations in the exercise of the power to remove the Device from the Prostheses List. In this respect Orthotech relies on section 5(1)(e) and section 5(2)(b) of the ADJR Act.
65 Specifically, Orthotech contends that the Delegate failed to take into account, in exercising her power, the following relevant considerations:
(i) that at the time when it was decided to include the Device on the Prostheses List on 30 January 2011, the supporting material that was submitted by Orthotech satisfied all criteria then required for inclusion of a therapeutic device on the Prostheses List;
(ii) that the Device had been successfully used in numerous cases in Australia and elsewhere since 30 January 2011;
(iii) that the Device had been chosen to be used by numerous specialist orthopaedic surgeons in Australia;
(iv) that there was no evidence, clinical or otherwise, to justify revoking the listing of the Device;
(v) that there would be a detriment to patients already implanted with the device if it was removed from the Prostheses List.
66 In my view this ground cannot be substantiated, for the following reasons.
67 First, it is difficult to see how the assertion in ground 2(a)(i) is a relevant consideration. Not only is it an assertion of fact, ground 2(a)(i) seeks review by the Court of the supporting material which was before the Delegate in January 2011 compared with the material upon which the Delegate made her decision in January 2013. Challenging the weight to be given to matters of fact is the subject of a merits, not judicial, review: Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259.
68 Second, both grounds 2(a)(ii) and 2(a)(iii) are assertions of fact relating to the safety and popularity of the Device. Contrary to the claim of Orthotech, it is clear from the Delegate’s Reasons for Decision that she did have regard to these matters – I note in particular paragraph 61.
69 Third, I do not accept Orthotech’s claim in ground 2(a)(iv) that there was no evidence to justify revoking the listing of the Device. The basis on which the Delegate made her decision to remove the Device from the Prostheses List was made clear in her Reasons for Decision – namely that the Device was high risk, should have been supported by two years of clinical data, and – fundamentally – should not have been approved for listing on the Prostheses List on the first occasion in January 2011. The Delegate explains in detail the basis for this conclusion at paragraphs 56-66. Furthermore, the evidence or lack thereof of new evidence concerning the clinical effectiveness and safety of the Device is not, in my view, a prerequisite to the enlivening of the power of the Delegate to remove the Device from the Prostheses List. Rather, the Delegate can exercise the power to remove the Device from the Prostheses List in accordance with the purposes of the Private health Insurance Act as I have discussed in detail earlier in this judgment.
70 Fourth, Orthotech’s claim in ground 2(a)(v) that the Delegate failed to take into consideration the possibility of detriment to patients is negated by the specific consideration of this issue by the Delegate at paragraphs 72-75 of her Reasons for Decision.
Ground 2(b)
71 In relation to this ground of review Orthotech claims that the Delegate erred in treating a particular element of the Guide as mandatory. The relevant element was the provision of clinical evidence of a two year follow up of the Device to establish the comparative efficacy and safety of the product. Accordingly, Orthotech claims that the Delegate erred in not considering the merits genuinely and realistically. This ground of review is directly referable to section 5(1)(e) and section 5(2)(f) of the ADJR Act, namely that there has been:
an exercise of a discretionary power in accordance with a rule or policy without regard to the merits of the particular case.
72 Orthotech also relies on the decision of Gummow J in Khan v Minister for Immigration and Ethnic Affairs [1987] FCA 713.
73 There is a substantial body of case law in which section 5(2)(f) of the ADJR Act has been considered, including recently in Sunshine Coast Broadcasters Pty Ltd v The Australian Communications & Media Authority (2012) 130 ALD 589; [2012] FCA 1205 where Kenny J observed (in dismissing an application relying on section 5(2)(f)) that:
[131] … As stated already, it is not open to the Court to second-guess the ACMA’s assessment of the weight of the various items of information on which the ACMA relied in making its decision. This part of the applicants’ challenge was also an impermissible attempt to have the Court review the merits of Sunshine’s request, by calling into question the ACMA’s assessment of the material to which it had regard, its findings of fact and its reasoning.
74 The provision also received the attention of the High Court of Australia in Neat Domestic Trading Pty Ltd v AWB Ltd (2003) 216 CLR 277, where the applicant for judicial review relied upon section 5(2)(f). I note in particular the following comments of Gleeson CJ at [17]:
The appellant’s complaint about AWBI’s withholding of approval of the bulk-export consents sought by it from the Wheat Export Authority is that AWBI was acting in accordance with a rule or policy without regard to the merits of the case. In putting its case in that way, the appellant was invoking ss 5(2)(f ) and 6(2)(f) of the Judicial Review Act. The language of those provisions reflects established principles of administrative law expressed, for example, by Lord Browne-Wilkinson in R v Secretary of State for the Home Department; Ex parte Venables:
When Parliament confers a discretionary power exercisable from time to time over a period, such power must be exercised on each occasion in the light of the circumstances at that time. In consequence, the person on whom the power is conferred cannot fetter the future exercise of his discretion by committing himself now as to the way in which he will exercise his power in the future ... By the same token, the person on whom the power has been conferred cannot fetter the way he will use that power by ruling out of consideration on the future exercise of that power factors which may then be relevant to such exercise.
These considerations do not preclude the person on whom the power is conferred from developing and applying a policy as to the approach which he will adopt in the generality of cases ... But the position is different if the policy adopted is such as to preclude the person on whom the power is conferred from departing from the policy or from taking into account circumstances which are relevant to the particular case in relation to which the discretion is being exercised. If such an inflexible and invariable policy is adopted, both the policy and the decisions taken pursuant to it will be unlawful.
75 That it is appropriate for a decision-maker to accept a general policy, developed at Ministerial level, as a guide to the exercise of a discretionary power, was explained by the Full Court in Hneidi v Minister for Immigration and Citizenship (2010) 182 FCR 115 at [48].
76 In support of its claim Orthotech contends, in summary, that the reasons of the Delegate:
identified in paragraph 58 that SOCAG and PLAC erred in the February 2011 recommendations;
failed to refer to issues including the experience and expertise of the advisory committees and the assessing expert clinicians;
failed to recognise the likely effect on patients who have received implants of a decision to revoke the listing of the Device, including risks for patients who may for varying reasons need to have components of the Device replaced;
failed to recognise the substantial clinical equivalence of the Device with other comparators; and
failed to recognise that it will not be financially viable for Orthotech to continue to provide the Device if it is removed from the Prostheses List.
77 In my view this claim cannot be substantiated.
78 First, to the extent to which the Delegate formed the view that the provision of two years clinical evidence was required to establish the comparative efficacy and safety of the Device, being a high risk product, her views are supported by the Guide. I have already observed that there is no dispute that the Guide is a document to which the Delegate ought have regard in making her decisions to approve (or not) prostheses, and that it is the product of extensive consultation with key stakeholders including insurers, private hospitals, clinicians, sponsors of prostheses, and consumers. The Guide is, indeed, the type of policy document which Lord Browne-Wilkinson described as “a policy as to the approach which [the decision-maker] will adopt in the generality of cases”.
79 Second, however, I am not persuaded that this is a case where the Delegate has inflexibly applied a policy with no regard for the merits of the circumstances before her. In this case:
the Delegate’s reasons for the Decision are detailed, including a thorough examination of the background to her decision (including the recommendations of SOCAG and PLAC), allocation of evidentiary weight, discussion of Orthotech’s claim of substantial clinical equivalence for the Device, and acknowledgment of the competing interests in retaining the Device on the Prostheses List.
the Delegate accepted and gave weight to the expert opinion that all arthroplasties are “high risk”, that she had received expert advice that the Device should be considered high risk, and that the Device (like all arthroplasties) should be listed only where there is at least two years of follow-up data to demonstrate clinical effectiveness and safety (paragraph 61 of the Reasons for Decision).
the Delegate was not satisfied that the substantial clinical equivalence of the Device was sufficient to demonstrate clinical effectiveness and safety (paragraph 61).
it is clear that the SOCAG and PLAC committees also had regard to the specific circumstances of Orthotech’s application (paragraphs 28-52).
the fact that the Decision represented a detailed review of an existing approval, including examination of previous SOCAG and PLAQ recommendations, supports a finding that the Delegate was, in fact, carefully assessing the case before her on its merits rather than inflexibly applying policy.
80 In my view, Orthotech asks the Court to “second-guess” the Decision, which is not within the purview of section 5(2)(f) of the ADJR Act. Accordingly, this claim is not substantiated.
Ground 2(c)
81 In ground 2(c) Orthotech in effect takes issue with the Delegate accepting the interpretation of the Guide by SOCAG and PLAC – specifically that SOCAG and PLAC had erred in their initial recommendations to the Minister in January 2011 and that this had contributed to the erroneous decision to list the Device in January 2011. This ground of review is referable to section 5(1)(e) and section 5(2)(a) of the ADJR Act, in that Orthotech claims that the Delegate took into account an irrelevant consideration.
82 In my view this ground of review is not substantiated.
83 First, rule 9 of the Prostheses Rules specifically provides that, in making the decision under subsection 72-10 of the Act, the Minister may have regard to a recommendation from PLAC. To that extent it was appropriate for the Delegate to take into account all recommendations of PLAC concerning the listing of the Device.
84 Second, in paragraph 55 of her Reasons for Decision Ms Cahill specifically identifies factors she has taken into account. While two of those factors concern the original recommendation of PLAC and SOCAG and the subsequent revision of that recommendation, the Delegate also identifies:
the Guide and the weight of expert opinion regarding high risk prostheses;
submissions by or on behalf of Orthotech; and
the expert analysis of the material contained in the Orthotech submissions and supporting documentation.
85 The weight given by the Delegate to these factors is a matter for the Delegate.
86 Third, while it does not appear to be in contention that the Chairman of SOCAG was in error in believing that “new” clinical evidence requirements dictated a change of recommendation with respect to the listing of the Device, this error in reasoning does not appear to have infected the Decision of Ms Cahill. There is authority to the effect that in circumstances where a decision-maker simply adopts the report and recommendation of a committee as his or her own, the decision-maker will also be taken to have adopted any errors of law which might vitiate the committee’s report and recommendation, with the consequence that the decision-maker's own decision can be attacked on the relevant ground under section 5 of the ADJR Act: Sean Investments Pty Ltd v MacKellar (1981) 38 ALR 363; [1981] FCA 191 at 371. In this case, however, the Delegate was clearly in a position where she could reach her own conclusion as to whether approval for the listing of the Device ought be given, and where in fact she did so. The Delegate was not bound by or limited to the views expressed by the Chairman of SOCAG as to the reason for the recommendations of SOCAG (cf Taylor v Public Service Board (New South Wales) [1976] 137 CLR 208 at 215, 224-225 and Sean Investments Pty Ltd v MacKellar (1981) 38 ALR 363 at 369-370). The facts demonstrate that there was no automatic and unquestioning implementation of the recommendations of the relevant committees by the Delegate in her Decision, and no adoption of the erroneous reasoning of the Chairman of SOCAG. The Delegate was entitled to adopt or reject (in whole or in part) the recommendations of SOCAG and PLAC, and she clearly formed her own views as to the appropriate Decision in the circumstances. That this is so was demonstrated by the detailed reasons of the Delegate, and the extensive correspondence between Orthotech and the Department during the time elapsing from the original decision to list until the eventual Decision of the Delegate.
87 Fourth, and in any event, the reasons why PLAC and SOCAG had changed their recommendations to the Minister concerning the listing of the Device were relevant to the exercise of the power under section 72-10, and to the weight to be given by the Delegate to the earlier recommendation in January 2011 when weighed with later information and analysis. It follows that the conclusions of PLAC and SOCAG as communicated to the Minister were not irrelevant to the exercise of the power, as contended by Orthotech.
GROUND 3
88 Ground 3(b)(i) is referable to section 5(1)(e) and section 5(1)(f) of the ADJR Act, in that Orthotech claims that the Delegate erred in considering the wrong question. Ground 3(b)(ii) appears to reprise ground 1 in its challenge to the basis upon which the Decision was made.
89 For reasons I have already given in this judgment, Ground 3(b)(ii) is not substantiated.
90 Further, in my view ground 3(b)(i) is also not substantiated, for the simple reason that while it may have been open to the Delegate to conclude, through her process of reasoning, that the Device should not have been listed in the first place, this was not the question she considered or decided. At paragraph 67 of her Reasons for Decision the Delegate specifically finds that:
On balance, having regard to the PLAC’s advice, and the information provided by Orthotech, I am not satisfied that the VAIOS Shoulder System should continue to be listed in the Rules.
91 This conclusion is reached in light of the extensive material before the Delegate, which included the advice of PLAC that, despite the additional information provided by Orthotech to PLAC in August 2012, PLAC did not consider that the information demonstrated the comparative safety or efficacy of the Device (paragraph 62). The Delegate also had regard to PLAC’s advice concerning relevant literature, clinical evidence and the absence of peer-reviewed published data concerning the Device.
CONCLUSION
92 The application should be dismissed with costs.
I certify that the preceding ninety-two (92) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Collier. |
Associate:
