Federal Court of Australia

Director, Professional Services Review v Yoong [2025] FCAFC 95

ORDERS

THE COURT ORDERS THAT:

1.    The appeal be allowed.

2.    Order 2 of the orders made by the Court on 6 October 2023 and orders 1, 2 and 5 of the orders made by the Court on 31 October 2023 in proceeding QUD377/2021 be set aside.

3.    The respondent’s application for judicial review in proceeding QUD377/2021 be dismissed.

4.    Subject to orders 5 and 6, the respondent pay the appellant’s costs of the appeal and the proceeding below (proceeding QUD377/2021).

5.    Within 14 days of the date of these orders, either party may apply to vary order 4 by filing and serving a written submission of no more than 3 pages in support of the variation.

6.    If a party files and serves a written submission in accordance with order 5:

(a)    the other party may file and serve a written submission in response within 28 days of the date of these orders; and

(b)    the Court may determine the application to vary order 4 on the papers.

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

REASONS FOR JUDGMENT

THE COURT:

1    This appeal arises from a review undertaken under Pt VAA of the Health Insurance Act 1973 (Cth) (HI Act) by the appellant, the Director of Professional Services Review, into the provision by the respondent, Dr Matthew Yoong, of services in respect of which medicare benefits were paid. The central question in the appeal concerns the validity of a notice issued by the Director under s 89B of the HI Act that required the respondent to produce “complete clinical records” in respect of a representative sample of his patients who had received services during the period covered by the review (the Notice). The respondent’s failure to comply with the Notice in turn led to a further notice being given by the Director under s 106ZPM of the HI Act which prevents medicare benefits being paid in respect of services rendered or initiated by the respondent.

2    The respondent brought a proceeding seeking judicial review of the Director’s decisions under ss 89B and 106ZPM of the HI Act. The primary judge upheld the respondent’s challenge to the validity of the Notice on the basis that it was not confined to seeking documents that were “relevant to the review”: Yoong v Director, Professional Services Review [2023] FCA 1186 (J). As a consequence, the primary judge also set aside the notice given to the respondent under s 106ZPM.

3    The Director submits that the primary judge erred in holding that the Notice was not authorised by s 89B of the HI Act and was therefore invalid. The grounds of appeal challenge the primary judge’s findings that the Notice was not confined to requiring the production of “relevant documents” within the meaning of s 89B(1) of the HI Act, and that the Notice was invalid on its face. The Director submits that these findings were based on a misconstruction or misapplication of the statutory definition of “relevant documents” and the requirements for a valid notice under s 89B.

4    We consider that the grounds of appeal should be upheld, for the reasons set out below. The documents required by the Notice to be produced, being complete clinical records for identified patients to whom the respondent provided services during the review period, were relevant to the review within the meaning of s 89B(1) of the HI Act, properly construed. It cannot be said that those documents have no conceivable relevance or no bearing whatever on the review of the provision of services by the respondent during the review period. The documents are likely to assist the Director in the performance of investigative functions under Pt VAA of the HI Act. Further, the form and content of the Notice were sufficient to comply with the requirements of s 89B. In particular, the documents sought were identified with sufficient clarity to enable the respondent to understand what he was required to produce in order to comply with the Notice, and to show that the Director was authorised to require the respondent to produce the documents.

Legislative scheme

5    The relevant statutory context was summarised by the primary judge at J [61]–[83].

6    The HI Act governs the payment of medicare benefits relating to medical expenses incurred in respect of professional services rendered to Australian residents, in accordance with a Schedule of fees (the Medicare Benefits Schedule or MBS) by reference to which such benefits are payable. Consistently with the approach adopted by the primary judge, references to the HI Act in these reasons are to the version that was in force at the time of the Director’s decision to issue the s 89B notice on 21 May 2019.

7    Part VAA of the HI Act deals with the Professional Services Review Scheme (PSR Scheme), the object of which is “to protect the integrity of the Commonwealth medicare benefits, dental benefits and pharmaceutical benefits programs” and, in doing so, both “protect patients and the community in general from the risks associated with inappropriate practice” and “protect the Commonwealth from having to meet the cost of services provided as a result of inappropriate practice”: s 79A.

8    The PSR Scheme is comprised of four “tiers” — the Chief Executive Medicare (CEM), the Director, Professional Services Review Committees, and the Determining Authority — each of which has different powers and functions directed to investigating and determining whether a practitioner has engaged in inappropriate practice: see generally National Home Doctor Service Pty Ltd v Director, Professional Services Review (2020) 276 FCR 338 at [20]–[65] (Griffiths J).

9    In summarising its main features, s 80(2) of the HI Act describes the PSR Scheme as “a scheme for reviewing and investigating the provision of services by a person to determine whether the person has engaged in inappropriate practice”. On a request by the CEM, the Director can undertake a review of the provision of services by a person during a specific period, following which the Director must either decide to take no further action, enter into an agreement with the person under review, or make a referral to a Committee for an investigation into the provision of the services specified in the referral. If the Committee finds the person under review has engaged in inappropriate practice, the finding is reported to the Determining Authority, which then makes a decision on what action to take.

10    “Service” is defined in s 81(1) as meaning a service that has been rendered or initiated in respect of which a medicare benefit or dental benefit was or would have been payable. In relation to a pathology service or a diagnostic imaging service, the service is “initiated” by making the decision by reason of which the service is rendered: s 3(1).

11    “Inappropriate practice” is defined by s 82 of the HI Act, which encompasses “unacceptable conduct” in connection with rendering or initiating services (being conduct that would be unacceptable to the general body of relevant practitioners), and rendering or initiating services that constitute a “prescribed pattern of services” under the regulations, which may include the rendering or initiation of more than a specified number of services on each of more than a specified number of days during a period of a specified duration (see s 82A).

12    Section 86 confers power on the CEM to request the Director to review the provision of services by a person during a specified period, being within the two-year period immediately preceding the request. Within one month after receiving such a request, the Director must decide whether or not to undertake the review: s 88A(1). A review must be undertaken if it appears to the Director that there is a possibility that the person has engaged in inappropriate practice in providing services during the review period: s 88A(2). If the Director decides to undertake the review, he or she may review any or all of the services provided by the person under review during the review period, in such manner as he or she thinks appropriate: s 88B. In undertaking the review, the Director is not limited by the reasons given by the CEM for requesting the review: s 88B(3). The “review period” is the period specified in the initial request by the CEM: s 81(1).

13    Section 89B of the HI Act, which is of central importance to the present appeal, confers power on the Director to require the production of documents or the giving of information, including from the person under review:

89B Power of Director to require the production of documents or the giving of information

(1)    In this section:

relevant documents means documents that are relevant to the review and includes clinical or practice records of services rendered or initiated during the review period by:

(a)    the person under review; or

(b)    a practitioner employed or otherwise engaged by the person under review; or

(c)    a practitioner employed or otherwise engaged by a body corporate of which the person under review is an officer.

(2)    For the purpose of undertaking a review, the Director may, by written notice given to:

(a)    the person under review; or

(b)    any other person whom the Director believes to have possession, custody or control of, or to be able to obtain, relevant documents;

require the person to whom the notice is given:

(c)    to produce to the Director, or to a person nominated by the Director, such relevant documents as are referred to in the notice; and

(d)    if the person does not have possession, custody or control of, and cannot obtain, any of those documents:

(i)    to inform the Director or a person nominated by the Director of that fact; and

(ii)    if the person knows, or can readily find out, the name and address of a person who has possession, custody or control of, or can obtain, any of the documents—to give that name and address to the Director or to a person nominated by the Director.

(3)    The notice must state:

(a)    the period within which, and the place at which, the documents are to be produced; and

(b)    the period within which a name and address referred to in subparagraph (2)(d)(ii) are to be given.

(4)    The period to be stated in the notice must be a period ending at least 14 days after the day on which the notice is given.

(5)    The notice is to set out the terms of section 106ZPM or 106ZPN, whichever is applicable to contraventions of the notice. However, a failure to comply with this subsection does not affect the validity of the notice.

(6)    If a document is produced in response to the notice, the Director or a person nominated by the Director:

(a)    may inspect the document; and

(b)    may retain the document in his or her possession for such reasonable period as he or she thinks fit; and

(c)    may make copies of, or take extracts from, the document.

14    Following a review of the provision of services by a person, the Director must either make a decision under s 91 to take no further action in relation to the review, or give to the person a written report setting out the reasons why the Director has not made such a decision together with an invitation to make submissions to the Director about the action that should be taken in relation to the review: s 89C(1). Under s 89C(2), as soon as practicable after taking into account any such submissions, the Director must do one of three things:

(a)    decide to take no further action in relation to the review in accordance with s 91;

(b)    enter into an agreement with the person under review under s 92; or

(c)    make a referral to a Committee under s 93.

15    Under s 91, the Director may decide to take no further action in relation to the review if he or she is satisfied that “there are insufficient grounds on which a Committee could reasonably find that the person under review has engaged in inappropriate practice in providing services during the review period”, or “circumstances exist that would make a proper investigation by a Committee impossible”.

16    Under s 92, the Director may enter into a written agreement with a practitioner under which the latter acknowledges that he or she engaged in inappropriate practice in connection with rendering or initiating specified services during the review period, and specified action is to take effect (such as a reprimand, the repayment of medicare benefits, or suspension or disqualification for a specified period). Any such agreement must be ratified by the Determining Authority before it can take effect: s 92(3). Ratification of an agreement “avoids a Committee investigation”: s 80(5).

17    Under s 93, the Director may set up a Committee and make a referral to investigate whether the person under review engaged in inappropriate practice in providing the services specified in the referral, being “any or all of the services provided by the person under review during the review period” (see s 93(7B)). The Director must prepare a written report for the Committee in respect of the services to which the referral relates, giving reasons why the Director thinks the person under review may have engaged in inappropriate practice in providing the services: s 93(6).

18    A Committee is constituted by a Chairperson and at least two other members of the Professional Services Review Panel: s 95. The Panel is established by s 84(1) and consists of “practitioners” (as defined in s 81(1)) who are appointed by the Minister. The Director can appoint up to two additional Panel members to a Committee if he or she thinks it is desirable to do so in order to give the Committee a wider range of clinical expertise, having regard to the services specified in the referral: s 95(6), (7). The Committee must hold a hearing if it appears that the person under review may have engaged in inappropriate practice in providing the referred services: s 101. The Committee has power to give a written notice requiring the production of documents relevant to the referral (s 105A), and may also summon a person (other than the person under review) to appear at a hearing to give evidence and to produce documents (s 106B).

19    The role of the Committee is to make findings only in respect of the referred services: s 106H(1). Before making any finding of inappropriate practice, the Committee must provide the person under review with an opportunity to be heard: s 106H(4). The Committee is not required to have regard to conduct in connection with rendering or initiating all of the referred services, but may do so if it considers it appropriate in the circumstances: s 106H(2). Alternatively, the Committee may have regard only to a sample of the services included in a particular class: s 106K(1). In some circumstances, the Committee can make “generic” findings of inappropriate practice in the provision of some or all of the relevant services, without identifying or determining the number of particular services in the provision of which the person engaged in inappropriate practice: s 106KB.

20    Sections 106KD, 106KE and 106L provide for the Committee to prepare a written draft report with its preliminary findings and, after the person under review has been invited to make submissions on changes to the draft report, a final report setting out findings on whether the person under review engaged in inappropriate practice in providing some or all of the referred services. If the final report contains a finding that the person under review engaged in inappropriate practice, the Committee must give the report to the Determining Authority, with copies being provided to the person under review and the Director: s 106L(3). The Determining Authority is then required to make a determination, after giving the person under review opportunities to make submissions about the directions that should be made in a draft determination and suggesting changes to the draft determination: ss 106SA, 106T, 106TA. A determination made by the Determining Authority must contain one or more of the directions set out in s 106U, which include reprimands, counselling, the cessation or repayment of medicare benefits, or the suspension or disqualification of the practitioner for a specified period.

21    Division 7 of Pt VAA contains miscellaneous provisions. Relevantly, s 106ZPM deals with intentional refusal or failure to comply with a notice given under s 89B:

106ZPM Failure of person under review to produce documents or give information

(1)    If:

(a)    a person under review is required to produce a document or give information by a notice given under subsection 89B(2) or 105A(2); and

(b)    the person intentionally refuses or fails to comply with the requirement within the period specified in the notice;

a medicare benefit or dental benefit is not payable in respect of a service rendered or initiated by the person under review, by a person employed or otherwise engaged by the person under review, or by a person employed or otherwise engaged by a body corporate of which the person under review is an officer, at a time after the end of the period specified in the notice and before the document is produced or the information is given, as the case may be.

(2)    If the Director considers that subsection (1) prevents medicare benefits and dental benefits from being payable in respect of services rendered or initiated by the person under review, the Director must give a notice to that effect to the person.

(3)    The Director must give a copy of a notice under subsection (2) to the Chief Executive Medicare.

(4)    If:

(a)    subsection (1) prevents medicare benefits and dental benefits from being payable in respect of services rendered or initiated by the person under review at a time; and

(b)    the Director gave a notice under subsection (2) to the person before that time;

the person is taken to be:

(c)    fully disqualified at that time for the purposes of section 19D; and

(d)    a disqualified practitioner for the purposes of sections 20B to 20E of the Dental Benefits Act 2008.

22    Under s 19D of HI Act, the Minister may direct a disqualified practitioner not to render or initiate a professional service for which a medicare benefit is not payable under s 106ZPM unless, before commencing to render or initiate that professional service, the practitioner notifies or informs the person of the disqualification and its effects. Failing or refusing to comply with any such direction constitutes an offence: s 19D(2).

The proceedings below

Background

23    The factual background to the proceeding is set out in the judgment below: J [24]–[60].

24    The respondent is a specialist general practitioner who has worked full-time in a single-doctor practice in Brisbane for more than 25 years since completing his training. In the course of his practice, the respondent has provided services in respect of which medicare benefits are paid under the HI Act.

25    On 15 April 2019, under s 86 of the HI Act, a delegate of the CEM requested the Director to review the provision of services by the respondent during the period 1 May 2017 to 30 April 2018 (the Review Period), for the purpose of considering whether the respondent may have engaged in inappropriate practice. The Review Period falls within the two-year period immediately preceding the request, as required by s 86(2). The request was designated as “Request 1305”.

26    In setting out the reasons for the request in accordance with s 86(3), the delegate identified concerns arising from the respondent’s billing under the medicare benefits scheme and prescribing under the pharmaceutical benefits scheme during the Review Period in comparison with the data of all active general practitioners.

27    In broad terms, the concerns set out in the CEM’s request were that the respondent may have rendered or initiated some services that were not clinically relevant or that did not fulfil all item requirements, on the basis that the number or proportion of services rendered or initiated by the respondent was at variance to his peers on a statistical basis: see Yoong v Chief Executive of Medicare [2021] FCA 701; 177 ALD 48 at [14]–[31] (Rangiah J). The concerns related to specified MBS items, in respect of most of which the respondent was above the “95th percentile” (and in some cases in the “99th percentile”) during the Review Period, despite being in the “53rd percentile” for the number of services rendered and the “23rd percentile” for the number of patients treated during that period. The specified MBS items included consultations lasting at least 20 minutes (MBS item 36), consultations lasting at least 40 minutes (MBS item 44), after-hours consultations lasting at least 20 minutes or at least 40 minutes (MBS items 5040 and 5060); mental health consultations of at least 20 minutes (MBS item 2713), and initiating computed topography (CT) scans (MBS items 56022, 58909, 56223 and 56507).

28    On 15 April 2019, in accordance with s 87 of the HI Act, the delegate gave the respondent written notice of the request (including a copy of the request that had been given to the Director which, as noted above, included the reasons for the request).

29    On 30 April 2019, under s 88A of the HI Act, the Director decided to undertake the review, and gave written notice of that decision to both the respondent and the CEM. In her letter to the respondent, the then Director relevantly stated:

Request to Review No. 1305 – notification of decision to undertake a review

On 15 April 2019, I received a request from the Chief Executive Medicare (Medicare) to review your provision of services for the period 1 May 2017 to 30 April 2018 (Review Period).

Medicare has also provided me with a copy of its letter to you dated 15 April 2019 informing you of the request to review. …

In accordance withs 88A(2) of the Health Insurance Act 1973 (Act), I must decide to undertake a review if it appears to me that there is a possibility that you have engaged in inappropriate practice, within the meaning of the Act, in providing services during the review period. In general terms, ‘inappropriate practice’ involves conduct in connection with the services you rendered or initiated during the review period that a body of your peers could reasonably conclude was unacceptable to the general body of your profession.

Decision to undertake a review

I am writing to advise you that it does appear to me that there is a possibility that you have engaged in inappropriate practice as described above.

Accordingly, today I have decided to undertake a review into your provision of those services in accordance with the requirements of the Act. This letter constitutes written notice of that decision for the purposes of s 88A(4)(a) of the Act. Section 88A(6) also requires me to set out for you the terms of s 89B of the Act: a copy of that section is attached.

…

Medicare's request outlines concerns about your rendering of level C and D consultations (Medicare Benefits Schedule (MBS) items 36, 44, 5040 and 5060), your rendering of MBS item 2713 and your initiating of MBS items 56022, 58909, 56223 and 56507. For example, you rendered MBS items 44 and 5060 in excess of 99 percent of your peers during the review period. The request also notes that you initiated MBS items 56022 and 58909 in excess of 99 percent of your peers during the review period. The variance to your peers raises concerns as to whether all the MBS requirements were met for each service and whether each service was clinically relevant.

Scope of my review

In accordance with s 88B of the Act, you should be aware that in undertaking my review:

•    I may review any or all of the services you provided or initiated during the review period that attracted a Medicare or Pharmaceutical benefit

•    I may undertake the review in such a manner as I think appropriate – this may include arranging an initial informal meeting with you if I think it will be helpful to the process of review and

•    I am not limited by the reasons included in Medicare’s request for my review.

…

Next steps

In accordance with s 89B of the Act, I may decide to issue a formal notice requiring you to produce any documents (including clinical or practice records) that are relevant to my review. I may also issue a notice to produce to any other person whom I believe to have possession or control of relevant documents. In the event that I decide to request relevant documents from you, I will provide you with a formal notice under s 89B.

…

(Footnote omitted).

30    The letter from the Director referred to an enclosed copy of a booklet entitled “Your Guide to the PSR Process”, which was said to provide “an overview of the PSR Scheme”. However, the primary judge found that the Guide was not in fact enclosed with the letter: J [28]. The respondent subsequently accessed an online version of the Guide, although it was in a different form to the version that was referred to in the Director’s letter.

31    On 21 May 2019, the Director gave the Notice to the respondent under s 89B of the HI Act, requiring production of “complete clinical records” for 76 patients of the respondent who were identified in an attached list. In an affidavit dated 31 January 2022, the Special Counsel for Professional Services Review (PSR), Margaret Parker, deposed that the patients had been selected in accordance with the “usual process” followed by PSR for preparing notices under s 89B, as at May 2019. Consistently with that process:

(a)    the Director made a data request to the Department of Human Services for randomised samples of services rendered by the respondent during the Review Period under the MBS items referred to in the delegate’s request to the Director and the Director’s notice to the respondent (i.e. MBS items 36, 44, 2713, 5040, 5060, 56022, 56223, 56507 and 58909); and

(b)    from the data obtained from the Department, staff of the PSR then selected the patients that would be the subject of the s 89B notice, with the usual practice being to select the patients who received the first ten randomly sampled services for each MBS item.

32    The terms of the Notice are set out in the primary judge’s reasons for judgment (J [102]), but it is convenient to reproduce them here:

In accordance with section 89B of the Health Insurance Act 1973 (Act), I, Professor Julie Quinlivan, Director of Professional Services Review, hereby give notice that you are required to produce the following documents:

Complete clinical records for the patients identified on the attached list. The clinical records should include where applicable:

•    Clinical or practice records including progress notes

•    Patient health summaries

•    Pathology and diagnostic imaging reports

•    Specialist and allied health practitioner referral letters and reports

•    Hospital discharge summaries

•    Health assessment and chronic disease management documentation.

The documents must be produced to:

The Director

Professional Services Review

Level 1, 20 Brindabella Circuit

Brindabella Business Park

Canberra Airport ACT 2609

The documents must be produced by no later than: 5pm, Tuesday 11 June 2019.

If you do not have possession, custody or control of, and cannot obtain, any of the complete records for the patients identified on the attached lists, you must inform me of that fact. If you know, or can readily find out, the name and address of a person who has possession, custody or control of, or can obtain, any of the documents, you must give that name and address to me at the address above, by no later than 5pm, Tuesday 11 June 2019.

I will consider whether to issue a separate notice to produce documents to another person where you are not in possession, custody or control of the documents.

…

(Emphasis in original.)

33    The attached list set out the details (name, address, sex and date of birth) of 76 individual persons. Read together with the Notice, those individual persons were identified in their capacity as “patients” of the respondent. The Notice did not state how the patients had been selected, nor that the patients had received medical services from the respondent during the Review Period. Nevertheless, as explained above, the evidence showed that the listed patients were selected on the basis that they had received medical services from the respondent during the Review Period, and that fact was not in dispute. It may be noted in passing that the Director later agreed to exclude one of the 76 patients from the scope of the Notice: J [103].

34    In an affidavit sworn 24 February 2022, the respondent relevantly deposed as follows:

20.    Of the 76 patients in the list attached to the Notice to Produce:

(a)     20 have been a patient of mine for over 25 years;

(b)     3 have been a patient of mine for between 20 and 25 years;

(c)     10 have been a patient of mine for between 15 and 20 years;

(d)     20 have been a patient of mine for between 10 and 15 years; and

(e)     23 have been a patient of mine for between 5 and 10 years.

21.    Over time, I have seen these patients for a variety of discrete, different, and unrelated conditions.

35    The foregoing evidence was adduced in support of the respondent’s contention, discussed below, that the Notice was beyond power because it was not confined to requiring the production of documents that are relevant to the review. However, it was not suggested that the facts to which the respondent deposed were known by the Director at the time when the Notice was issued, nor that the Director had any particular knowledge about the profile of the respondent’s patients and medical practice. Further, the evidence was stated at a very high level of generality.

36    The respondent’s understanding, informed by reading the version of the Guide that he had accessed online, was that the Notice required the production of clinical records for services rendered to or initiated for the identified patients during the Review Period. He endeavoured to comply with the Notice based on this understanding, seeking and obtaining several extensions of time for compliance. In the course of the correspondence exchanged between the parties, the Director accepted that the respondent only needed to produce records that were held by him or his practice (as opposed to documents that he could obtain which were in the possession, custody or control of other persons). Ultimately, however, the Director refused any further extension of time, and warned the respondent that non-compliance proceedings may be commenced if he did not produce the records by the revised deadline.

37    The respondent ultimately produced 9,103 pages of clinical records for services rendered or initiated during the Review Period for patients on the list attached to the Notice.

38    After it became apparent that the respondent had a different understanding of the scope of the Notice, the PSR’s Special Counsel advised the respondent’s solicitors that the Notice required production of “the complete clinical records for the patient (as at the date of the [Notice]), not just the records from the review period”, and that records of services provided to patients before the commencement of the Review Period were not outside the scope of the Notice. The Director insisted that “[t]he complete clinical record for a patient is relevant to the review of a particular service provided to a patient, because it allows that service to be properly understood in the context of the patient’s medical history as available to the medical practitioner, and the course of treatment”. The Director was nevertheless prepared to “narrow the scope of the Notice so that Dr Yoong is only required to provide records from five years prior to the Review Period up until the date of the Notice” (emphasis in original), i.e. the period between 1 May 2012 to 21 May 2019, “in the interests of assisting Dr Yoong and proceeding the matter without any further unnecessary delay”, stating that once such records were produced she would “consider the Notice has been complied with and would not proceed to take action for non-compliance”.

39    The respondent’s solicitors maintained that there was “no proper basis on the face of the Notice to require the production of clinical records for a period of 5 years prior to, and more than a year after, the review period”. In response, the Director advised the respondent’s solicitors by letters dated 14 October 2021 and 21 October 2021 that all of the clinical records held by the respondent for each of the identified patients were “relevant documents” as defined in s 89B(1) of the HI Act, repeating the explanation that had been advanced in the previous correspondence. The Director stated that she did not consider the production of the documents that had been provided by the respondent to date constituted compliance with the Notice to Produce.

40    On 8 November 2021, the Director gave the respondent a notice under s 106ZPM(2) of the HI Act in respect of his intentional refusal or failure to comply with the Notice, with the effect that medicare benefits would cease to be payable in respect of services rendered or initiated by him from midnight on that day.

41    The respondent commenced proceedings seeking judicial review of the Director’s decisions under ss 89B and 106ZPM of the HI Act. An interlocutory order was made to stay or suspend the operation of the disqualification decision under s 106ZPM until the final determination of the proceeding.

The primary judge’s decision

42    The primary judge upheld the respondent’s application for judicial review, and made orders that each of the Notice given under s 89B and the notice given under s 106ZPM was invalid and of no legal force and effect.

43    Before the primary judge, the respondent challenged the validity of the Notice on the ground that it was “not confined to requiring production of documents which met the statutory description of ‘relevant documents’ under s 89B(1) of the HI Act”, such that the decision was affected by jurisdictional error and not a lawful exercise of the power conferred by s 89B of the HI Act: J [84]–[85].

44    Alternatively, the respondent challenged the decision to issue the Notice as an improper exercise of power “because the result of the exercise of the power is uncertain or in the alternative so unreasonable that no reasonable person could have exercised the power”: J [114].

45    The primary judge identified a threshold issue as to the proper construction of the Notice, namely, whether the Notice required the respondent to produce all clinical records which he held or could obtain in respect of each of the listed patients, regardless of whether those records concerned services rendered or initiated by the respondent during the Review Period: see J [6(1)]. That was the construction for which the Director contended below. In so far as the respondent advanced a contention to the contrary, namely that the Notice should be construed as being limited to documents produced during the Review Period, this was rejected by the primary judge at J [103]. In reaching this conclusion, the primary judge observed that it was “clear from the evidence that the Director (and PSR) intended that the Notice would extend to all clinical records irrespective of when they were produced, and this intention is reflected in the plain words of the Notice to Produce itself”: J [103]. We note that, in relation to the construction of the Notice, the relevant intention is that manifested in the text of the Notice as opposed to any evidence subsequently adduced as to the subjective state of mind of the Director or PSR in drafting or issuing the Notice. Nevertheless, there is no challenge to this finding on the appeal. Nor has the respondent filed any notice of contention to the effect that the Notice should be given a narrower construction in order to refute the non-compliance on which the notice given to the respondent under s 106ZPM was based.

46    Accordingly, the primary judge proceeded on the basis that the reference to “complete clinical records” for the listed patients was to be construed as meaning all clinical records for those patients, including in respect of services provided by the respondent before (or after) the Review Period. It did not mean “complete” clinical records for services that were provided during the Review Period. In substance, the grounds on which the respondent challenged the validity of the Notice were premised on the broader construction of the Notice advanced by the Director and accepted by the primary judge, placing emphasis on the absence in the Notice of any temporal limitation or any reference to the content of the clinical records or their connection to services provided during the Review Period. The parties therefore joined issue below on whether a notice in such terms was validly authorised by s 89B of the HI Act.

47    The primary judge upheld the first basis on which the validity of the Notice was challenged by the respondent, concluding that the Notice was invalid because it was “not, on its face, confined to seeking documents which fall within the statutory authority to require production of documents which are ‘relevant to the review’”: J [104]. The Notice was therefore not authorised by s 89B because it was not confined to requiring the production of “relevant documents”: J [113]. There was no question of severance because the Notice sought “a single category of documents”, being all (or complete) clinical records of the patients listed: J [113].

48    The principal reason given by the primary judge for reaching that conclusion was that the Notice “manifestly” failed to comply with the implied requirement that a notice “must identify the documents which the practitioner is required to provide with sufficient clarity such that it is patent on the face of the notice that it is lawfully issued under s 89B”: J [105]–[106]. In other words, the primary judge considered that “it should be apparent from the notice to produce that the documents sought are reasonably related to the investigative purpose which s 89B is intended to serve and lie within the express constraints on the statutory power”, including that the documents must be “relevant to the review”: J [105].

49    The primary judge considered that the Notice “simply requires production of the complete clinical records for a list of patients without even identifying whether all or any of the patients listed were provided with any services by the [respondent] during the Review Period”, and that the only “criterion of relevance” that could be inferred from the Notice was that the respondent had rendered medical service to the identified persons at some time: J [106]. The primary judge accepted the respondent’s contention that the Notice did not attempt to “link” the documents sought to the services rendered or initiated by him during the Review Period.

50    In this regard, the primary judge observed that “there was no evidence that the Director turned her mind to whether the entirety of the [respondent]’s clinical records ‘is reasonably related to that for which that power is granted’ under s 89B of the HI Act”, nor evidence of “any attempt to draft a notice targeting relevant clinical records or categories of clinical records outside the Review Period”: J [107], referring to Finlayson v Legal Practitioners Conduct Board (2012) 112 SASR 549 at [53] (White J). Her Honour inferred that the Director had issued the Notice in accordance with a practice under which notices given under s 89B “always ask for all clinical records” of named patients, and “without turning her mind to the question of what documents or classes of documents were reasonably capable, in a broad investigative context, of being relevant to the review of services provided or initiated by [the respondent] during the Review Period”: J [107]. In so doing, the Director had “thereby proceeded on a misconstruction of the scope of the statutory power”: J [107].

51    It was accepted by the primary judge that “clinical records created before or after the Review Period may be relevant to the appropriateness of a service provided to a patient during the Review Period”: J [109]. Further, the primary judge did not accept that s 89B is limited to documents that are known to be directly or demonstrably relevant to the review at the time that a notice is issued: J [108]. Accordingly, her Honour rejected the basis of the Director’s contention that the statutory object of protecting the integrity of the medicare benefits scheme would be compromised if the Director were unable to require the production of all documents that would be of assistance in understanding and evaluating the provision of services by the practitioner in the review period: J [108].

52    Similarly, it was accepted that a notice under s 89B can cover documents that are not ultimately relevant to the investigation, and that a notice will be valid so long as the documents are “capable, in a broad investigative context, of being properly regarded as relevant to the review”: J [111], using language drawn from Pyneboard Pty Ltd v Trade Practices Commission [1982] FCA 18; 39 ALR 565 at 571–572 (Northrop, Deane and Fisher JJ).

53    Critically, however, the primary judge accepted the respondent’s submission that a clinical record for a service provided outside the review period has no necessary connection with a service provided during a review period, in circumstances where “the relevant question posed for the Director in considering the scope of a s 89B Notice is what documents or classes of documents are reasonably capable of being relevant to the review of services provided during the Review Period, in the context of the broad investigative function being undertaken by the Director under the PSR Scheme”: J [109]. On the premise that it would not be impossible for the Director “to fashion a Notice to Produce so as to define classes of documents outside the Review Period to be produced which are or may be relevant to services provided during the Review Period”, the primary judge concluded that s 89B does not permit the Director “to seek in an indiscriminate manner all clinical records for patients outside the Review Period (both before and after) without any attempt apparent on the face of the Notice to identify why they are relevant to the review”: J [110] (emphasis in original). Otherwise, the words “relevant to the review” in s 89B would be rendered “otiose”.

54    In respect of the offers made by the Director to narrow the scope of the Notice, the primary judge stated that such concessions could not displace “the express legal requirement for the [respondent] to comply with the Notice which flows from the HI Act itself” nor the requirements for the issue of a valid notice to produce: at J [112]. The primary judge stated that a fresh notice to produce would be required in order to give effect to any intention to narrow the scope of the Notice.

55    Although it was not strictly necessary to do so, the primary judge rejected the alternative basis on which the respondent challenged the decision to issue the Notice, finding the Notice was not uncertain and did not involve a disproportionate or unreasonable exercise of the power conferred by s 89B: J [114]–[126].

56    It was common ground that, if the Notice was not authorised by s 89B and was beyond power, the decision to issue the notice under s 106ZPM was invalid as a consequence: J [7], [128]. The primary judge otherwise dismissed an independent challenge by the respondent to the exercise of power under s 106ZPM (J [158]–[181]), and that conclusion is not in issue on the appeal.

The notice of appeal

57    Ground 1 of the Director’s notice of appeal challenges the primary judge’s holding that the Notice was not authorised by s 89B of the HI Act on two bases:

(a)    first, that the primary judge erroneously found that the Notice was not confined to requiring the production of “relevant documents” within the meaning of s 89B(1) because the primary judge misconstrued, or alternatively misapplied, the statutory definition of that term (Ground 1(a));

(b)    second, that the primary judge erroneously found that the Notice was invalid on its face because the primary judge misconstrued, or alternatively misapplied, the requirements in s 89B for a valid notice (Ground 1(b)).

58    Grounds 1(a) and 1(b) proceed on the basis that the primary judge held that the Notice was invalid on two alternative bases: first, because it was not confined to seeking “relevant documents”; and secondly, that the form or content of the Notice did not satisfy the requirements for a notice to be valid under s 89B. The Director (at the time of the appeal) accepted in his written submissions that he must succeed on both limbs of Ground 1 in order to uphold the validity of the Notice.

59    By Ground 2, the Director challenges the primary judge’s finding that the notice given under s 106ZPM(2) of the HI Act was invalid as a consequence of the invalidity of the Notice. Thus, this ground of appeal stands or falls on the Director’s success or failure on Ground 1.

60    On 5 December 2023, Burley J made orders to suspend the review of the provision of services by the respondent until the final determination of this proceeding, so as to preserve the Director’s opportunity to conduct the review with the benefit of the documents produced in accordance with the Notice if the appeal succeeds: see Director, Professional Services Review v Yoong [2023] FCA 1525. This followed similar suspensions pursuant to orders made in the proceedings below. Section 94(2) of the HI Act relevantly provides that, if the review is suspended because of an injunction or other court order, the Director may determine that the 12-month period within which the review must otherwise be completed is extended by a specified period that is not longer than the period of the suspension.

Consideration

Ground 1(a)

61    The construction of the power conferred by s 89B of the HI Act is governed by established principles, most of which are not in issue on this appeal.

62    As a general observation, Pt VAA of the HI Act has a “public protective” purpose, which is reflected in the statutory objects in s 79A, and as such its provisions should not be narrowly interpreted: see Health Insurance Commission v Grey (2002) 120 FCR 470 at [173] (Beaumont, Sundberg and Allsop JJ). More specifically, a broad approach is often adopted to the construction of powers conferred in aid of investigative functions, where “it is not possible to define a priori the limits of an investigation which might properly be made”: see Melbourne Home of Ford Pty Ltd v Trade Practices Commission (No 3) [1980] FCA 94; 31 ALR 519 at 529–530 (Brennan, Keely and Fisher JJ).

63    Of course, the scope of any investigative power to compel the production of documents turns on the particular statutory language and context, applied to the particular facts of each case. Thus, in I-MED Radiology Network Ltd v Director, Professional Services Review [2020] FCA 1645, Logan J observed (at [68]) that, while he had been taken to “numerous authorities concerning the exercise, and validity of exercise, of information gathering or document production powers conferred by various statutes”, each of those authorities “ultimately turned on the terms of the notice requiring the giving of information or production of documents and the authority conferred by the statute concerned”.

64    In the present case, the respondent seeks to distinguish previous authorities on investigative powers under other statutory regimes, placing emphasis on the terms of s 89B which expressly impose an objective requirement of relevance and a temporal constraint by reference to the specified review period.

65    The power to give a notice under s 89B must be exercised by the Director “[f]or the purpose of undertaking a review”, being a review under Div 3A: see s 89B(2). The Director’s decision to undertake the review will have been made on the basis that it appears to the Director that there is a possibility that the person has engaged in inappropriate practice in providing services during the review period — that is, based on “the appearance of a possibility” of inappropriate practice (see I-MED at [75] (Logan J)) — after having considered the request from the CEM and any other relevant information. The outcome to which the review is directed is a decision by the Director as contemplated by s 89C, being either to decide to take no further action in relation to the review (s 91), to enter into an agreement with the person under review (s 92), or to make a referral to a Committee (s 93). Thus, if the person under review does not enter into a written agreement involving an acknowledgment of inappropriate practice, the Director must form an evaluative judgment about whether or not there are sufficient grounds on which a Committee could reasonably find that the person under review has engaged in inappropriate practice in providing services during the review period and, if so, may make a referral to the Committee to investigate that question in relation to the services specified in the referral.

66    The Director is therefore not given the function of making a determination that the person under review has engaged in inappropriate practice in providing services during the review period. Having formed an initial view as to the appearance of a possibility of inappropriate practice, the function of the Director in undertaking the review is to address only whether or not there are sufficient grounds for referral to a Committee. The power conferred by s 89B is intended to assist the Director in the performance of that investigative function, which has been described as in the nature of a “roving review” of any or all of the services provided by the person under review during the review period: I-MED at [66] (Logan J).

67    A notice given under s 89B requires the production of “such relevant documents as are referred to in the notice”, assuming that the person has possession, custody or control of the documents, or is able to obtain them. Otherwise, the person to whom the notice is given is required to give the name and address of any other person who has possession, custody or control of, or can obtain, any of the documents, where the former person knows or can readily find out those details. The documents referred to in a notice under s 89B must be “relevant documents”, which are defined as documents that are “relevant to the review”: s 89B(1). This is an objective test of relevance, based on the description of the documents referred to in the notice, rather than a test expressed by reference to any subjective belief of the Director. The statutory condition of relevance is directed to the review, being the investigative task the Director is authorised to undertake to assess whether or not there are sufficient grounds on which a Committee could reasonably find that the person under review has engaged in inappropriate practice in providing services during the review period.

68    The express inclusion in s 89B(1) of “clinical or practice records of services rendered or initiated during the review period” does not directly constrain the class of “relevant documents” — thus, it is common ground that some documents are capable of being “relevant to the review” even if they were created before or after the review period. So much was accepted by the primary judge: J [109]. A possible explanation for the addition of these words in s 89B(1) is to ensure that the definition covers clinical or practice records of practitioners employed or engaged by the person under review or by a body corporate of which the person under review is an officer: see the Explanatory Memorandum to the Health Insurance Amendment (Professional Services Review) Bill 1999 (Cth), p 8. In any event, no inference arises that the definition of “relevant documents” excludes clinical or practice records in relation to services rendered or initiated outside the review period, if such documents are otherwise “relevant to the review” of services provided by the person under review during the review period.

69    It is also common ground that the documents the subject of a notice under s 89B can be relevant to the review in the requisite sense even if some of the documents produced might ultimately turn out to be irrelevant to the Director’s decision on the review. This was acknowledged by the primary judge at J [96], noting that the Director is not required to have “foreknowledge of the relevance in fact of all documents which might be covered by the Notice”.

70    In A v Independent Commission Against Corruption (2014) 88 NSWLR 240 (A v ICAC), in the context of a summons issued under the Independent Commission Against Corruption Act 1988 (NSW), Basten JA (at [34]) stated that “it is well established that the possibility, even the certainty, that the summons will cover documents which are not relevant to the investigation is not a basis for setting aside the summons”, referring to Melbourne Home of Ford at 529–531 (Brennan, Keely and Fisher JJ); see also Australian Securities and Investments Commission v Maxi EFX Global AU Pty Ltd [2020] FCA 1263; 148 ACSR 123 at [95] (Wigney J); Federal Commissioner of Taxation v Australia and New Zealand Banking Group Ltd (1979) 143 CLR 499 at 524 (Gibbs ACJ) (FCT v ANZ). Similarly, Ward JA noted in A v ICAC (at [148]) that, “[t]he fact that not all documents within those categories [i.e. the specific categories to which the summons was directed] may ultimately prove to be of relevance in ICAC’s investigation or at a compulsory hearing” did not warrant a finding that the discretion to issue the summons had miscarried. Although the statutory scheme considered in A v ICAC allowed a person to object to production on the ground of relevance, that is not itself a reason to adopt a different approach to the scope of the power conferred by s 89B of the HI Act.

71    In addition, as the primary judge accepted at J [101] and [121], a notice under s 89B is not invalid merely because compliance with the notice will be burdensome or oppressive: see Melbourne Home of Ford at 529; I-MED at [76] (Logan J), Maxi EFX at [101] (Wigney J).

72    Accordingly, documents may be regarded as relevant to the review if their production will assist the Director in the performance of his investigative functions under Div 3A of Pt VAA. The Director is required to investigate, and not to prove, inappropriate practice: cf. Mosaic Brands Ltd v Australian Communications and Media Authority (2022) 294 FCR 119 at [96] (Collier, Abraham and Cheeseman JJ). As Jenkinson J stated in MF1 v National Crime Authority (1991) 33 FCR 449 at 461, in relation to the power to issue a summons under s 28 of the National Crime Authority Act 1984 (Cth), “it follows … from the nature of a power to compel disclosure of information, by evidence and the production of documents, in aid of an investigative function that the evaluation of probabilities concerning the usefulness of the information is, within limits, for the investigator, and certainly not for the persons from whom disclosure is sought”. Further, the concept of relevance “does not denote a narrowly confined connection” between the document and the subject matter of the investigation: MF1 at 461 (Jenkinson J); see also at 471 (Ryan J).

73    It can be accepted that the power under s 89B does not extend to requiring the production of documents that have no possible bearing upon or connection to the matters being investigated by the Director, viz the possibility that the person under review has engaged in inappropriate practice in providing services during the review period. However, the question whether there is such a connection is “not to be approached in an over-technical or hypercritical way”, and the relevant question is whether the documents “are capable, in a broad investigative context, of being properly regarded” as related to the review: see Pyneboard at 571–572 (Northrop, Deane and Fisher JJ); see also J [89].

74    If a notice under s 89B is so wide as to cover or extend to documents that have no conceivable relevance to the review, and that are incapable of assisting the Director in carrying out his investigative functions, such a notice would exceed power and be invalid, subject to the possibility of severance or reading down. In Deveson v Australian Broadcasting Tribunal (1991) 32 FCR 124, Davies J held invalid summonses that were purportedly issued under s 21(2) of the Broadcasting Act 1942 (Cth), in circumstances where the relevant paragraph of the summonses “would be likely to include documents which had no relevance whatever to the matters the subject of the inquiry”: at 127–128. It appeared from the transcript of the Tribunal proceedings that such an outcome had been by design, and that “the Tribunal had in mind that the summonses were so wide that they would cover some documents which were not relevant to the inquiry and it intended, once all the documents had been produced, to go through them and return those documents which did not assist the inquiry”: ibid. at 129. Observing that the relevant power was conferred “for the purposes of proceedings before the Tribunal”, Davies J stated (at 129) that it was “a necessary implication … that any document required to be produced be a document which may assist the Tribunal in its inquiry”, and continued:

The Tribunal does not have power to compel the production of other documents, that is to say, documents other than those which may assist the Tribunal in its inquiry, simply because the production of documents of a certain type may be a convenient way of getting to documents relevant to the Tribunal's task. The Tribunal has no power to compel the production of documents which have no relevance whatever to its inquiry.

75    Thus, it was necessary “that there be an apparent relevance between the documents sought and the administrative task being performed” by the Tribunal: ibid. at 129. However, the relevant paragraph of the summonses considered in Deveson was “so wide as to include documents some of which will have no bearing whatever upon the issues the subject of the inquiry and will be documents the production of which the Tribunal is not empowered to compel”: ibid. at 131–132. As the summonses could not be read subject to a limitation that was both unexpressed and unintended, the paragraph in the summonses was beyond power and invalid: ibid. at 132.

76    The respondent places particular reliance on Deveson in submitting that the Notice given to him was invalid because it was not limited to requiring the production of documents that are “relevant to the review” within the meaning of s 89B(1), characterising the exercise of power by the Director as “an obvious administrative overreach”. However, the circumstances in Deveson were concerned with a broad description which captured documents that could have no possible connection with the subject matter of the Tribunal’s inquiry. That inquiry was concerned with the proposed acquisition of broadcasting licences by certain companies with the support of various banks, as part of the corporate reconstruction of “The Seven Network”. The summonses were given to directors or shareholders of the companies, requiring them to produce “[d]ocuments, correspondence, memoranda, agreements, file notes, working papers and facsimile transmissions” for a specified period relating to or between the person and a list of named persons, banks and law firms. It was in those circumstances that the summons sought to require production of documents that were “totally unrelated” to the subject of the inquiry (i.e. The Seven Network and the proposed acquisition of interests in the broadcasting licences), extending to personal arrangements and banking facilities: ibid. at 128. The summons was consciously drafted to cast an overly wide net, with a view to whittling down the documents to what the Tribunal considered to be relevant for the purposes of its inquiry (as the Chairman put it during the course of the hearing (ibid. at 128–129), “it’s part of the inquiry that we want to see all of that and the seeing of it will determine the relevance of it”). That approach was found to be objectionable by this Court on judicial review.

77    The decision in Deveson can be distinguished from the present case. The Notice required the production of “complete clinical records” of the identified patients, each of whom was a person to whom the respondent provided services during the Review Period. It may be that some of those records turn out to have little or no bearing upon the question whether or not there are sufficient grounds on which a Committee could reasonably find that the respondent has engaged in inappropriate practice in providing services during the Review Period. But it cannot be said that the category or class of documents covers or extends to documents that have no bearing on or “no relevance whatever” to the review. A closer analogy to Deveson might perhaps be drawn if the Notice were to include the clinical records of persons to whom the respondent did not provide services during the Review Period. But that is not the present case.

78    In seeking to illustrate the alleged “overreach” involved in the terms of the Notice, the respondent submitted that it would require him to produce all clinical records for a patient who was seen once during the Review Period, and who had been consulted by the respondent many years earlier for an entirely unrelated medical condition. Thus, the respondent provided a hypothetical example of a patient who was seen by the respondent during the Review Period for bronchitis, and who had previously been seen by him “20 years earlier for a sexually transmitted disease, five years earlier for a bone fracture and then a year after the [Review Period] for a mental health issue”. The respondent argued that the production of clinical records for such earlier unrelated conditions could have “no possible relevance to reviewing the service that [he] provided to the patient during the Review Period”.

79    There are two principal difficulties with the respondent’s argument.

80    First, as noted earlier, the Director had no knowledge of the profile of the respondent’s patients or medical practice at the time that the Notice was issued. Having selected patients from MBS data sourced from the Department, the Director had no other knowledge about the patient’s history of treatment either by the respondent or by any other doctor.

81    Second, it is not self-evident that a patient’s medical history is necessarily irrelevant to an assessment of whether medical services rendered or initiated by the respondent during the Review Period could constitute inappropriate practice. In challenging the validity of the Notice, the respondent had the burden of demonstrating that the documents required to be produced were not relevant to the review, in the sense that those documents could have no conceivable relevance to the assessment required to be undertaken by the Director. The respondent adduced no evidence on that issue beyond the high-level evidence concerning the 76 patients referred to earlier in these reasons. Although that evidence was admitted by the primary judge, it has little if any bearing upon the issue to be determined, as it was not information that was known to the Director when deciding to undertake the review or when giving the Notice. The question is whether there is a sufficient prospect that a patient’s medical history with the respondent may assist the Director in determining whether or not it is possible that medical services provided by the respondent to that patient during the Review Period involved inappropriate practice. If there is such a prospect, documents concerning the patient’s medical history are relevant to the review, whether they assist in establishing inappropriate practice or whether they assist in establishing the opposite (i.e. that the respondent has not engaged in inappropriate practice). Further, the possibility (or even the likelihood) that some of the documents required to be produced may ultimately turn out to have no material bearing upon that issue does not render the Notice invalid — the relevant question concerns the apparent relevance of the documents sought by the Notice and the requisite connection between those documents and the review.

82    The respondent essentially submits that it is necessary to find that all of the documents required to be produced are relevant to the review and that, in the absence of evidence adduced by the Director that was capable of establishing such a connection in the present case, it remained a matter of speculation as to whether the “complete clinical records” of the listed patients would be relevant to the review in the requisite sense.

83    As set out above, in correspondence with the respondent, the Director supported the Notice on the basis that “[t]he complete clinical record for a patient is relevant to the review of a particular service provided to a patient, because it allows that service to be properly understood in the context of the patient’s medical history as available to the medical practitioner, and the course of treatment”. There was evidence before the primary judge to similar effect, namely, the view expressed by Dr Rankin that “historic records are required to understand the services provided during the review period”: J [109]. In effect, when assessing the grounds on which the respondent may have engaged in inappropriate practice, the Director may need to stand in the shoes of the respondent by examining the clinical information that was available to him when he rendered or initiated services to the identified patients during the review period. The category of “complete clinical records” is agnostic as to the length of the period for which the person might have previously been a patient of the respondent, in circumstances where the Director did not have that knowledge prior to issuing the Notice.

84    The same rationale would not necessarily apply to clinical records in relation to services that were subsequently provided to the patients after the end of the Review Period. Nevertheless, it is not disputed that documents after the Review Period are capable of being relevant to the review of services provided during the Review Period. The ground of review on which the respondent relied below was that the Notice purported to require the production of complete clinical records for particular patients “without reference to the content of those records or whether they related to any service rendered during the Review Period”. There was no discrete ground of challenge to the validity of the Notice on the basis that it was not limited to clinical records prior to the end of the Review Period, and this is not itself a basis on which to conclude that the Notice is invalid. Moreover, any challenge on such a basis would give rise to questions of severability or reading down.

85    The evidence given by Dr Rankin is important. The Director performs a statutory task of investigating inappropriate practice, which requires an assessment of whether the practitioner’s conduct in connection with rendering or initiating services is such that a Committee could reasonably conclude that the conduct would be unacceptable to the general body of general practitioners. The facts and considerations that may bear upon that assessment are not matters of which the Court can take judicial notice. They are matters involving knowledge and expertise within the medical profession.

86    The primary judge dismissed Dr Rankin’s evidence on the basis that “there is no necessary connection between a clinical record for a service provided before (or after) the Review Period, and a service provided during the Review Period”: J [109] (emphasis in original). Respectfully, her Honour erred in reasoning in that manner. The test of relevance does not depend on showing that every document produced will necessarily have a material bearing upon the Director’s assessment whether it appears that there is a possibility that the person has engaged in inappropriate practice. Rather, the test is whether there is a sufficient prospect that the documents required to be produced may do so.

87    In the present case, the respondent adduced evidence to the effect that he had been treating the patients listed in the Notice for significant periods, in some cases more than 20 years. The evidence was adduced in support of the argument that there is no possibility that a patient’s 20-year medical history could have a bearing upon the question whether services rendered to the patient during the Review Period involved inappropriate practice. However, the argument suffers from the same difficulties. First, when issuing the Notice, the Director will usually not have information about each patient’s medical history with the practitioner the subject of the investigation. Second, and more importantly, the Court is unable to draw the conclusion urged by the respondent. The Court is not entrusted with the investigative function that is given to the Director, and has no expertise with respect to medical practice. It is not implausible that patients’ medical histories, even over periods of more than 20 years, might bear upon the issues that must be assessed by the Director.

88    By way of example, one of the concerns to which the review is directed is that the respondent treated one out of every four of his patients for mental disorder. The clinical records of those patients over time might show a history of mental health issues which negatives any conclusion of inappropriate practice. Another of the concerns being investigated relates to a statistically high incidence of lengthy consultations during the Review Period. Again, the medical history of those patients might have a bearing on whether or not those services might be regarded as unacceptable by the general body of general practitioners, either by suggesting that the length of the consultations was unnecessary or by revealing medical issues that might explain the need for longer consultations. These matters are for the Director to assess. On the evidence before the primary judge, a conclusion could not be reached that there was no prospect that the documents sought by the Notice would bear upon the required assessment.

89    Accordingly, we do not accept the respondent’s characterisation of the Notice as an “indiscriminate fishing expedition”. First, it is inaccurate to describe the terms of the Notice as indiscriminate, in circumstances where they are directed to the records of particular patients to whom the respondent provided services during the Review Period. The Notice did not extend to patients irrespective of whether or not they were treated during the Review Period, nor was it directed to a patient’s medical history in general beyond the clinical records held or able to be obtained by the respondent. The implicit suggestion is that the Notice was required to “discriminate” among the clinical records of a patient in order to demonstrate their relevance to the review, but it is unclear on what basis that would have been practicable. Secondly, the use of the term “fishing expedition” is inapt in the present investigative context: see e.g. Maxi EFX at [25], [99] (Wigney J). A notice under s 89B is designed for the purpose of obtaining documents and information that might assist the Director in the review, which forms one “tier” of the broader investigation into whether the practitioner has engaged in inappropriate practice during the review period.

90    It is nevertheless clear that a review under the PRS Scheme is focused on the services provided during the review period, being the period specified in the initial request by the CEM under s 86 of the HI Act. Further, that period must fall within the two-year period immediately preceding the request, meaning that the period can be no more than two years in duration and must be relatively contemporaneous to the review. Any records or other documents from outside that period, including historical records, are not themselves the subject of the review. Rather, they may assist the Director in reviewing the services provided during the review period, in order to reach a decision in relation to the action (if any) that should be taken following that review.

91    Accordingly, we respectfully disagree with the primary judge’s conclusion that the Notice was invalid because it was not confined to requiring the production of documents which are “relevant to the review” within the meaning of s 89B, and that there was no necessary connection between clinical records for services provided before (or after) the Review Period and services provided during the Review Period. For the reasons set out above, the “complete clinical records” of the identified patients to whom the respondent had provided services during the Review Period were relevant to the review by the Director of the provision of those services.

92    In so far as the primary judge relied on the absence of any indication in the terms of the Notice that the listed patients were provided services by the respondent during the Review Period (J [106]), there does not appear to be any factual dispute about that issue, which is capable of being established (and was sufficiently established) by the evidence. Putting to one side any question as to the form or content of the Notice, this does not provide a basis on which to conclude that the complete clinical records of the patients have no apparent relevance to the review. Further, for the reasons set out above, there was no requirement for the Notice to articulate any further “criterion of relevance” by which the clinical records of each patient could be linked to the services rendered or initiated by the respondent to that patient during the Review Period. It was sufficient that the clinical records related to patients to whom the respondent had provided services during that period.

93    The question whether the Notice was within the authority conferred by s 89B of the HI Act did not turn on the subjective thought processes of the Director, including whether the Director had “turned her mind” to whether complete clinical records were relevant to the review or had attempted to draft a notice in narrower terms so as to target specific categories of clinical records outside the Review Period: cf. J [107]. The ground of review upheld below was in substance directed to whether the Notice exceeded the limits of the authority conferred by s 89B, as opposed to challenging the Director’s decision to exercise the power to give the Notice (cf. the unreasonableness ground rejected by the primary judge at J [114]–[127]). Thus, the observations made by the primary judge at J [107] and [109] are perhaps best taken as an elaboration of her Honour’s view that the Notice was impermissibly wide in its scope, and that it might have been possible to frame a notice in narrower terms that was within the power conferred by s 89B. In other words, this provided a possible basis on which to draw a conclusion regarding objective relevance.

94    In circumstances where the function of the Director is to review the provision of services by the respondent during the Review Period, the absence of any temporal limit on the records required to be produced may invite scrutiny as to whether the documents can be regarded as relevant to the review within the meaning of s 89B(1). However, for the reasons set out above, the complete clinical records in relation to services provided by the respondent to the listed patients may conceivably have some relevance to the review, and therefore assist the Director in carrying out his investigative functions. While the Notice might be regarded as pushing the boundaries of the power conferred by s 89B, this Court is not in a position to say that any such records are necessarily irrelevant, in the sense of having no conceivable relevance or no bearing whatever on the conduct of the review.

95    The primary judge proceeded on the basis that it would not be impossible “to fashion a Notice to Produce so as to as to define classes of documents outside the Review Period to be produced which are or may be relevant to services provided during the Review Period”, rather than seeking all clinical records “in an indiscriminate manner”: J [110]. In circumstances where the Director might not have available information about the nature of the services that were provided to the identified patients by the respondent during the Review Period, nor about what other services might have been provided by the respondent to that patient before or after the Review Period, it is not easy to formulate any basis on which the category of documents sought could be narrowed. The suggestion advanced in the respondent’s submissions, namely “any clinical records concerning treatment of [the condition for which the patient was treated during the Review Period] or any related condition [within] a reasonable period before and after the [Review Period]” would be potentially ambiguous or uncertain in its application, and would leave it to the respondent to determine whether or not conditions are “related” and what is a “reasonable period”.

96    More significantly, the reasoning below suggests a non sequitur that, because it would not be impossible to draft a notice in narrower or more specific terms, “it cannot be inferred that the Parliament could not have intended that the [Director] do so”: J [110]. However, this is not the correct question. Section 89B confers a power to require the production of relevant documents, and the question is whether the documents sought are reasonably capable of being regarded as relevant to the review, not whether some other form of notice would satisfy that requirement. In particular, as discussed above, s 89B does not require a notice to be limited so as to ensure that all documents produced will necessarily be relevant: see A v ICAC at [34]. In the present case, it cannot be said that the documents the subject of the Notice have no bearing whatever on the review of the provision of services by the respondent during the Review Period. Accordingly, the Notice is within the limits of the authority conferred by s 89B of the HI Act.

97    Ground 1(a) of the notice of appeal is therefore upheld.

Ground 1(b)

98    Ground 1(b) is directed to the primary judge’s findings in so far as they can be regarded as going to the form of the Notice. In particular, the Director challenges the conclusion that the Notice was invalid because it was not on its face confined to “relevant documents” within the meaning of s 89B(1), and that the Notice failed to comply with the requirement that it should be “apparent from the notice” that the documents sought were reasonably related to the investigative purpose and within the express constraints on the power conferred by s 89B: see J [98], [104]–[106], [110].

99    The Director submits that the primary judge misapplied this requirement, particularly in having regard to the “principle of legality” in circumstances where s 89B does not authorise conduct which would otherwise constitute a tort, but rather is a coercive power that is conferred in aid of the Director’s review and should be construed broadly. Further, in circumstances where the Notice was directed to the respondent as the person under review, it was sufficient to identify the complete clinical records of the listed patients as documents that were relevant to the review: cf. FCT v ANZ at 525 (Gibbs ACJ).

100    The requirement that a notice to produce must not only specify the documents or information sought with sufficient clarity to enable its recipient to know what is required, but must do so in a manner that discloses that the person giving the notice is entitled to require the recipient to produce the documents or to furnish the information, has been described in some cases as the “entitlement disclosure condition”: see SA Brewing Holdings Ltd v Baxt (1989) 23 FCR 357 at 369–370 (Fisher and French JJ); Commissioner of Taxation v Pilnara (1999) 96 FCR 82 at [27] (Wilcox, Hill and Carr JJ).

101    In FCT v ANZ, Gibbs ACJ (at 525) expressed the requirement in fairly broad terms, namely, that a notice under s 264(1)(b) of the Income Tax Assessment Act 1936 (Cth) (ITAA) “must show the person to whom it is addressed that any document which he is required to produce is one whose production the Commissioner is entitled to require”. In particular, where such a notice is addressed to a person other than the taxpayer, the notice must show that the documents relate to the income or assessment of a named or identified person, as “a notice requiring the production of documents not so related is beyond the scope of the power”: ibid. at 525. To similar effect, Mason J (at 537) stated that a notice that specifies the documents to be produced, “if correctly drawn, will make it clear that the requirement extends to the particular documents because they are included in the class of documents of which the Commissioner is authorized to require production”. Thus, the notice “must in terms conform to the statutory limitations if it is to be valid”, and “[i]t will … conform to those limitations only if it clearly confines the documents to be produced to the class of which the Commissioner is authorized to require production”, so that the limitation on the Commissioner’s authority is “drawn to the attention of the recipient”: ibid. at 537–538 (Mason J).

102    The requirement articulated in FCT v ANZ was that the notices must on their face conform to the limits of the Commissioner’s statutory power to require the production of documents relating to the income or assessment of an identified person. Accordingly, notices that had been drafted in the “short form” requiring a bank to produce all books, documents and papers stored in certain safe deposit boxes, without stating that such documents related to the income or assessment of any particular person, were held to be defective. However, “long form” notices requiring the production of documents in the safe deposit boxes relating to the income or assessment of named persons were valid. Further, in respect of notices addressed to a taxpayer requiring the production of documents which related to his own income or assessment, Gibbs ACJ suggested that “the very description of the documents (for example, ‘your books of account’) may be enough to show that the notice is within the power conferred by the section”: ibid. at 525.

103    Where an entitlement disclosure condition applies, it is a requirement that arises by implication from the terms and context of the relevant statute. In Pyneboard and SA Brewing, such a requirement was found to exist in s 155 of the Trade Practices Act 1974 (Cth), now the Competition and Consumer Act 2010 (Cth). In Mosaic Brands, an entitlement disclosure condition was implied in s 522 of the Telecommunications Act 1997 (Cth). However, as the decision in Pilnara illustrates in relation to s 264A of the ITAA, such a condition is not universally implied into all statutory powers to require the production of documents.

104    In Pilnara, the Full Court distinguished s 264A of the ITAA from provisions such as s 155 of the Trade Practices Act, noting that the former was “only concerned with information and documents ‘relevant to the assessment of a taxpayer’”: Pilnara at [37]. With reference to statements made by Gibbs ACJ and Mason J in FCT v ANZ, Wilcox, Hill and Carr JJ observed that “it is sufficient for the purposes of a notice issued under s 264 [of the ITAA] that the notice refer to a person’s income or assessment to show that the notice is within the power conferred by that section”: ibid. at [40]. Accordingly, their Honours held that it was sufficient for the purposes of s 264A of the ITAA “simply to identify the taxation assessment of a party served with a notice under that section”: ibid. at [40].

105    Having regard to the terms and context of s 89B of the HI Act, it is doubtful that an entitlement disclosure condition or requirement can be implied in relation to a notice given under that section. The power conferred by s 89B arises in the context of a review undertaken by the Director under Div 3A of Part VAA of the HI Act. The review process is initiated by a request made to the Director by the CEM, who must provide reasons and give written notice of the request to the person the subject of the proposed review. If the Director decides to undertake the review, having formed a view that it appears that there is a possibility that the person has engaged in inappropriate practice in providing services during the review period, the person must be given written notice of the decision, and that notice must set out the terms of s 89B. Further, s 88B makes clear that the scope of the review extends to any or all of the services provided by the person under review during the review period, and is not limited by the reasons of the CEM in requesting a review.

106    Having regard to the statutory regime, the person under review will have been informed prior to being given any notice under s 89B:

(a)    that the Director has decided to undertake a review of the services provided by the person during the review period specified in the CEM’s request; and

(b)    the reasons for the CEM’s request to the Director to review the provision of services by the person during that period.

The person must also be taken to know that, as a matter of law, the Director may review any and all of the services provided by them during the review period, and is not limited by the reasons set out in the CEM’s request.

107    In such circumstances, in our view, there is limited scope for any implication that a notice given under s 89B must confine the documents sought in such a way as to disclose to the person to whom the notice is addressed that the Director is entitled to require the production of the documents. At least where the notice is given to the person under review, the entitlement of the Director to require the person to produce the documents will be ascertainable from the prior notices given to that person, which will have identified the subject of the review, the review period and (so far as relevant) the reasons for the CEM’s request to the Director. Against that background, the relevant matter to which a notice under s 89B is directed will be supplied by the applicable provisions of the HI Act: see I-MED at [66] (Logan J).

108    The respondent’s written submissions did not squarely put the alleged error affecting the Notice in terms of a failure to comply with an “entitlement disclosure condition” as such. Rather, the respondent submitted that the Notice was required to use some “criterion of relevance” that was capable of linking the clinical records sought to the services rendered or initiated by the respondent during the Review Period. The Notice was said to be defective because it did not reveal any such link, and did not refer to the Review Period or to services provided during the Review Period at all.

109    Ultimately, in the course of oral submissions, senior counsel for the respondent clarified that, while his primary submission was that the primary judge’s reasoning went beyond dealing with the Notice on its face and was not based on non-compliance with an implied entitlement disclosure condition, it would be possible to uphold the decision below on an application of those principles. In particular, senior counsel for the respondent disputed that the judgment of Gibbs ACJ in FCT v ANZ provided support for any general principle that, where a notice is given to the subject of an investigation as opposed to a third party, it is unnecessary for the notice to disclose the relevant connection to the power. In his submission, the problem in the present case was that the description of the documents in the Notice did not disclose an obvious connection to the subject of the review, so that the entitlement to require the production of those documents was not self-explanatory.

110    In the present case, the Notice explicitly referred to the relevant request made by the CEM (“Request to Review No 1035”), notice of which had previously been given to the respondent, together with the CEM’s reasons setting out detailed concerns in relation to services provided by the respondent during the Review Period. The Notice required the production of complete clinical records for identified patients of the respondent in respect of whom, as discussed earlier in these reasons, he had rendered or initiated services during the Review Period. The respondent had previously been provided with a written notice of the decision to undertake the review, which explained the nature and scope of the review and reproduced the terms of s 89B. In our view, nothing further was required in order to disclose to the respondent the Director’s entitlement to require the production of relevant documents within the meaning of s 89B. This is either because the power conferred by s 89B is not subject to any implied entitlement disclosure condition, or because any such requirement in the present context would be satisfied by the identification in the Notice of the review arising from the CEM’s request (“Request to Review No 1035”), together with the matters that had already been disclosed to the respondent as part of the statutory process. The respondent could be under no misapprehension with regard to the nature and scope of the review — see in particular the letter from the Director to the respondent dated 30 April 2019. In this regard, the Notice must be evaluated according to the meaning which it conveyed to the respondent: Melbourne Home of Ford at 531.

111    The fact that the Notice did not itself expressly refer to the Review Period is not fatal to its validity, in circumstances where it was not in dispute that the patients identified in the attached list were in fact provided services by the respondent during the Review Period, and evidence was adduced to that effect. For the reasons set out above in relation to Ground 1(a), the terms of the Notice identified documents that were relevant to the review, with sufficient clarity for the respondent to understand what documents he was required to produce and the Director’s authority to require the production of those documents.

112    Accordingly, in so far as the primary judge concluded that the form or content of the Notice did not satisfy the requirements of s 89B, that conclusion was in error. Ground 1(b) of the notice of appeal is therefore upheld.

Ground 2

113    It was common ground between the parties that, if the primary judge’s conclusions in relation to the validity of the Notice were overturned, there was no basis on which to support any relief in relation to the notice given under s 106ZPM of the HI Act.

Conclusion

114    The appeal should be allowed. The orders of the primary judge should be set aside, and in lieu thereof it should be ordered that the application be dismissed. It is tolerably clear from the Director’s notice of appeal and written outline of submissions that the Director seeks orders that the respondent pay the costs of the proceeding below and the appeal. As there does not appear to be any reason why costs should not follow the event, orders to that effect should be made. However, the parties should be given an opportunity to seek a variation to the usual orders as to costs if they consider that there is any basis on which to do so.

Associate:

Dated:    25 July 2025