FEDERAL COURT OF AUSTRALIA

Saitta Pty Ltd v Commonwealth [2001] FCA 817

ADMINISTRATIVE LAW – judicial review – availability of merits review – whether adequate alternative remedy – allegation that report of Aged Care Standards Agency incorrect – report relied on in relation to accreditation of aged care provider – whether claim for damages for breach of statutory duty, negligence, breach of contract, or misleading and deceptive conduct available in respect of administrative decision

PRACTICE AND PROCEDURE – summary dismissal – whether no reasonable cause of action disclosed – whether proceeding an abuse of process – claims for damages for breach of statutory duty, negligence, breach of contract, defamation and misleading and deceptive conduct – whether claims clearly untenable – whether declaration of invalidity of administrative decisions could be used as basis for claims for damages – whether common law causes of action should continue when federal element of proceeding falls

STATUTES – delegated legislation – validity – statutory power to promulgate principles –table specifying principles may be made in relation to a corresponding part or section – separate parts specified in relation to accountability principles and accreditation principles – whether provisions of accreditation principles which go beyond purposes of accreditation ultra vires – whether distinction supported by statutory scheme – whether interpretation leads to an absurd or irrational result – whether declarations of invalidity could found claims for damages at common law

Aged Care Act 1997 (Cth) ss 63-1, 65-1, 66-1, 67-1, 67-5, 80-1, 85-1, 85-5, 85-8, 86-9, 96-1, Pts 4.3, 4.4, 5.4, 6.1, 6.2

Administrative Decisions (Judicial Review) Act 1977 (Cth) s 10

Judiciary Act 1903 (Cth) s 39B(1A)

Trade Practices Act 1974 (Cth) s 52

Federal Court of Australia Act 1976 (Cth) s 21

Federal Court Rules, O 20 r 2

General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125, applied

Drake v Minister for Immigration and Ethnic Affairs (1979) 24 ALR 577, cited

Saitta Pty Ltd v Commowealth [2000] FCA 1546, followed

Mallinson v Scottish Australian Investment Co Ltd (1920) 28 CLR 66, cited

Darling Island Stevedoring and Lighterage Co Ltd v Long (1956) 97 CLR 36, cited

Crimmins v Stevedoring Industry Finance Committee [1999] HCA 59, (1999) 200 CLR 1, applied

Cubillo v Commonwealth [2000] FCA 1084, (2000) 103 FCR 1, cited

Ansett Transport Industries (Operations) Pty Ltd v Commonwealth (1977) 139 CLR 54, applied

Stephens v West Australian Newspapers Ltd (1994) 182 CLR 211, cited

Burgundy Royale Investments Pty Ltd v Westpac Banking Corporation (1987) 76 ALR 173, cited

Fencott v Muller (1983) 152 CLR 570, cited

Butterworths, Halsbury’s Laws of Australia

SAITTA PTY LTD v COMMONWEALTH OF AUSTRALIA, THE HONOURABLE BRONWYN BISHOP (AS THE COMMONWEALTH MINISTER OF STATE FOR AGED CARE), ANDREW PODGER (AS THE SECRETARY OF THE COMMONWEALTH DEPARTMENT OF HEALTH AND AGED CARE) AND AGED CARE STANDARDS AND ACCREDITATION AGENCY LTD

V 622 of 2000

NEVISKIA PTY LTD v COMMONWEALTH OF AUSTRALIA, THE HONOURABLE BRONWYN BISHOP (AS THE COMMONWEALTH MINISTER OF STATE FOR AGED CARE), ANDREW PODGER (AS THE SECRETARY OF THE COMMONWEALTH DEPARTMENT OF HEALTH AND AGED CARE) AND AGED CARE STANDARDS AND ACCREDITATION AGENCY LTD

V 641 of 2000

GRAY J

29 JUNE 2001

MELBOURNE

THE COURT ORDERS THAT:

1                    The application be dismissed.

2                    The motions the subject of the applicant’s notice of motion filed on 14 February 2001 be dismissed.

3                    The applicant pay the respondents’ costs of the proceeding, including the costs of the motions.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

THE COURT ORDERS THAT:

1                    The application be dismissed.

2                    The motions the subject of the applicant’s notice of motion filed on 13 March 2001 be dismissed.

3                    The applicant pay the respondents’ costs of the proceeding, including costs of the motions.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

                                                                                                                        V 641 of 2000

REASONS FOR JUDGMENT

Introduction

1                     The applicants in these two proceedings are both approved providers of aged care under the Aged Care Act 1997 (Cth) (“the Aged Care Act”).  The first respondent is the Commonwealth of Australia.  The second respondent is the Minister for Aged Care, the minister responsible for administering the Aged Care Act.  The third respondent is the Secretary of the Department of Health and Aged Care, the department responsible for administering the Aged Care Act.  The fourth respondent is the Aged Care Standards and Accreditation Agency Ltd, a corporation which operates under the name “the Aged Care Standards Agency” and performs certain functions under the Aged Care Act.

2                     On 18 August 2000, Saitta Pty Ltd (“Saitta”) commenced proceeding V622 of 2000.  It seeks declaratory and injunctive relief, and damages, with respect to various decisions and conduct of the first, second and third respondents, which led to the imposition of sanctions against Saitta under s 65-1 of the Aged Care Act, and the refusal to certify Saitta’s residential care service under s 38-1 of the Aged Care Act.  More details of the decisions and conduct, and of the relief sought, appear later in these reasons for judgment.

3                     On 28 August 2000, Neviskia Pty Ltd (“Neviskia”) commenced proceeding V641 of 2000.  It seeks similar declaratory and injunctive relief, and damages, with respect to decisions and conduct of the first, second and third respondents, which led to the impositions of sanctions against Neviskia under s 65-1 of the Aged Care Act.  Further details of the decisions and conduct, and of the relief sought, appear later in these reasons for judgment.

4                     In each proceeding, the respondents have moved the Court on notice for orders that the proceeding be stayed or dismissed generally pursuant to O 20 r 2(1)(a) or (c) of the Federal Court Rules, on the ground that the applicant has adequate alternative remedies in terms of s 10(2)(b)(ii) of the Administrative Decisions (Judicial Review) Act 1977 (Cth) (“the ADJR Act”) or on the basis of the Court’s discretion to refuse to grant the relief sought under the Judiciary Act 1903 (Cth).

5                     The applicants share common directors and some senior management. The issues raised in each proceeding, and the relief sought, are very similar.  It seems likely that the second statement of claim has been constructed by using the computer record of the first and making the necessary changes of detail.  Both may have been based on an earlier precedent.  For these reasons, the motions were heard together on 16 March 2001.  In each proceeding, the applicant had also filed a notice of motion, seeking leave to amend the application and statement of claim generally. In addition, Neviskia’s notice of motion requested orders pursuant to s 11(1)(c) of the ADJR Act extending the time within which it could lodge an application for an order of review in respect of two further decisions, and an order pursuant to O 29 r 5 consolidating its proceeding with another proceeding in this Court, V923 of 2000.

6                     It is with these four notices of motion that these reasons for judgment are concerned.

The legislation

7                     The Aged Care Act establishes a legislative scheme for the provision of funding for aged care. It provides for the payment of subsidies for the provision of aged care (Ch 3), and the payment of grants for costs associated with aged care services (Ch 5), such as the establishment or enhancement of aged care services, assessment or approvals related to aged care, and support services associated with aged care.  Providers of aged care services must be approved before subsidies can be paid to them (Ch 2).  An approved provider has obligations under the Act in relation to the quality of the care provided, the rights of people to whom care is provided, and the provider’s accountability for that care (Ch 4).  If an approved provider is
found to have failed to meet its obligations under the Act, a sanction may be imposed by the third respondent.

8                     The imposition of sanctions is governed by Pt 4.4 of the Act.  Section 65-1 provides:

“The Secretary may impose sanctions (see Division 66) on an approved provider if:

(a)       the approved provider has not complied, or is not complying, with one
or more of its responsibilities under part 4.1, 4.2 or 4.3; and

(b)       the Secretary is satisfied that it is appropriate to impose sanctions on
the approved provider (see section 65-2); and

(c)        the Secretary complies with the requirements of Division 67.”

9                     Section 66-1 specifies the types of sanctions that may be imposed by the Secretary. These include:

“(a)     revoking or suspending the approved provider’s approval under Part
2.1 as a provider of aged care services;

(b)     restricting the approved provider’s approval under Part 2.1 as a
provider of aged care services to aged care services that are being
conducted by the approved provider at the time the sanction is imposed;

…

(d)       revoking or suspending the allocation of some or all of the places
allocated to the approved provider under Part 2.2;

(e)       varying the conditions to which the allocation of some or all of those
places is subject under section 14-5;

(f)        prohibiting the further allocation of places under Part 2.2 to the
approved provider;

…

(i)        revoking or suspending the certification of a residential care service in
respect of which the approved provider has not complied with its
            responsibilities;

…

(l)        such other sanctions as are specified in the Sanctions Principles.”

10                  Division 67 of Pt 4.4 sets out an extensive procedure for imposing sanctions.  Section 67-1 provides:

“(1)     The Secretary must not impose sanctions on an approved provider for
not complying with one or more of its responsibilities under Part 4.1,
4.2 or 4.3 unless the Secretary has completed each of the following
steps:

            (a)        giving to the approved provider a notice of non-compliance
            (see section 67-2);

            (b)        giving to the approved provider:

                        (i)         a notice of intention to impose sanctions (see section
                                    67-3); or

                                    (ii)        a notice to remedy the non-compliance (see section 67-
                        4); or

                                    (iii)       a notice of intention to impose sanctions in respect of a
                                    specified part of the non-compliance (see section 67-3)
                                    and a notice to remedy the remainder of the non-
                                    compliance (see section 67-4);

            (c)        giving to the approved provider notice of the Secretary’s
                        decision on whether to impose sanctions (see section 67-5).

(2)       However, paragraphs (1)(a) and (b) do not apply if the Secretary is
satisfied that, because of the approved provider’s non-compliance, there is an immediate and severe risk to the safety, health or well-being of care recipients to whom the approved provider is providing care.”

The remaining provisions of Div 67 provide for the content, and the manner of giving, of the various notices required.  For the purposes of these reasons for judgment, it is unnecessary to set out those provisions.

11                  Part 2.6 of the Aged Care Act makes provision for an approved provider to apply to have its residential care service certified under that Part.  Section 37-1 provides that an approved provider can only charge accommodation bonds or accommodation charges or receive concessional resident supplements in respect of a residential care service if the service has been certified under the Act.

12                  Many of the provisions of the Aged Care Act refer to principles made pursuant to the Act.  For instance, s 63-1, found in Pt 4.3, relating to accountability, provides that the responsibilities of approved providers include responsibilities specified in “the Accountability Principles”.  Section 80-1, found in Pt 5.4, which deals with accreditation grants, refers to “the Accreditation Grant Principles”.  It gives examples of matters with which those principles may deal, such as the procedures to be followed in deciding whether to accredit a residential care service, including the reconsideration of decisions on accreditation, and the matters to be taken into account in making, or reconsidering, those decisions.  The power to make such principles is found in s 96-1(1), which provides:

“The Minister may make Principles, specified in the second column of the table, providing  for matters:

(a)       required or permitted by the corresponding Part or section of this Act
specified in the third column of the table to be provided; or

(b)       necessary or convenient to be provided in order to carry out or give
effect to that Part or section.”

There follows a table with three columns.  The first column contains item numbers, the second the names of various principles and the third references to the corresponding Parts or provisions of the Aged Care Act.  It is unnecessary to set out the whole of that table.  Item 1
specifies the Accountability Principles.  The corresponding provision is Pt 4.3.  Item 2 specifies the Accreditation Grant Principles.  The corresponding provision is Pt 5.4.

13                  Part 6.1 of the Aged Care Act provides for the reconsideration and review of certain decisions specified in s 85-1 of the Act.  The third respondent may reconsider a reviewable decision on his own motion, under s 85-4, or at the request of a person whose interests are affected by the decision, under s 85-5.  Section 85-8 provides that an application may be made to the Administrative Appeals Tribunal (“the AAT”) for review of a reviewable decision that has been confirmed, varied or set aside under s 85-4 or s 85-5.  A decision to impose a sanction pursuant to s 65-1 is a reviewable decision specified in s 85-1.  A decision to reject an application for certification of a residential care service under s 38-1 is also a reviewable decision under s 85-1.  The procedural steps in Div 67 are not so specified.

14                  Section 44 of the Administrative Appeals Tribunal Act 1975 (Cth) provides for a right of appeal from a decision of the AAT to this Court, on a question of law.

The facts

15                  So far as I state facts in these reasons for judgment, they are facts alleged in the statement of claim in the relevant proceeding or contained in affidavits filed in relation to the notices of motion.

16                  Saitta is the proprietor of a residential care service conducted at 1 Profita Avenue, Sydenham under the name “Belvedere Park Nursing Home”.  Its application relates to the following decisions and conduct under the Aged Care Act:

(a)                the preparation, use, disclosure and publication by the fourth respondent of a Review Audit Report dated 11 April 2000 in relation to Belvedere Park Nursing Home;

(b)               a decision made on 21 July 2000 that Saitta had not complied with its responsibilities under s 63-1 of the Act (“the non-compliance decision”) which followed the issuing of a notice of non-compliance dated 18 May 2000;

(c)                the issuing of a notice of intention to impose sanctions dated 21 July 2000 (“the sanctions notice”);

(d)               a decision to impose sanctions under s 67-5 made on 16 August 2000 (“the sanctions decision”); and

(e)                a decision made on 4 August 2000 to refuse an application for the certification of Saitta’s residential service under Pt 2.6 (“the certification decision”).           

17                  Neviskia is the proprietor of a residential care service conducted at 3 Kenilworth Parade, Ivanhoe under the name “Kenilworth Nursing Home”.  Its application relates to the following decisions and conduct under the Aged Care Act:

(a)        the preparation, use, disclosure and publication by the fourth respondent of
            Review Audit Report dated 22 December 1999 in relation to Kenilworth
            Nursing Home (“the first Review Audit Report”);

(b)       the preparation, use, disclosure and publication by the fourth respondent of a Review
Audit Report dated 31 January 2000 in relation to Kenilworth Nursing Home (“the second Review Audit Report”);

(c)        the preparation, use, disclosure and publication by the fourth respondent of a Serious Risk Report dated 9 March 2000 in relation to Kenilworth Nursing Home (“the Serious Risk Report”);

(d)       the issuing of a notice of intention to impose sanctions dated 10 March 2000 (“the first sanctions notice”) which followed the issuing of notices of non-compliance dated
11 January 2000 and February 2000, and a decision that Neviskia had not complied with its responsibilities under s 63-1 of the Act;

(e)        a decision to impose sanctions under s 67-5 made on 24 March 2000 (“the first sanctions decision”);

(f)        the issuing of a further notice of intention to impose sanctions dated 20 April 2000 (“the second sanctions notice”); and

(g)        a decision to impose further sanctions under s 67-5 made on 24 May 2000 (“the second sanctions decision”).

18                  Both applicants have exercised their rights of review under Pt 6.1 of the Aged Care Act in respect of those decisions which are amenable to that review.

19                  On 4 September 2000, at the request of Saitta, the third respondent made reconsideration decisions under s 85-5, which confirmed both the certification decision and the sanctions decision.  On 7 September 2000 Saitta applied to the AAT for review of those decisions.  The Tribunal delivered its decision and reasons for decision in respect of both reviewable decisions on 22 December 2000.  The decision of the AAT was to set aside the certification decision and the sanctions decision.

20                  Neviskia has also successfully sought merits review under Pt 6.1.  On 25 July 2000 and 11 September 2000, at the request of Neviskia, the third respondent made reconsideration decisions under s 85-5, which confirmed the first and second sanctions decisions.  On 5 September 2000 and 12 September 2000 respectively, Neviskia applied to the AAT for review of each of those decisions.  On 22 December 2000, the Tribunal delivered its decision and reasons for decision in respect of both reviewable decisions.  The decision of the Tribunal was to set aside the first sanctions decision and vary the second sanctions decision so that the sanctions were imposed only for the period 31 January 2000 to 2 March 2000.

The relief sought

21                  Each applicant seeks declarations that certain sections of the Accreditation Grant Principles 1999 made by the second respondent, pursuant to s 96-1 of the Act, are invalid and of no effect.  Saitta seeks declarations in relation to the Review Audit Report, the sanctions notice, the sanctions decision and the certification decision.  It also seeks orders quashing the non-compliance decision, the sanctions decision, and the certification decision.  Neviskia seeks declarations in relation to the first Review Audit Report, the second Review Audit Report, the Serious Risk Report, the first sanctions notice, the second sanctions notice, the first sanctions decision and the second sanctions decision.  It also seeks orders quashing the first sanctions decision and the second sanctions decision.  Both parties claim damages for breach of statutory duty and negligence against each respondent.  Saitta’s application includes a claim for damages for breach of contract.  Both applicants seek in addition damages for defamation, and for misleading and deceptive conduct in contravention of s 52 of the Trade Practices Act 1974 (Cth).

The Court’s powers

22                  Section 10(1)(a) of the ADJR Act provides that the rights conferred by that Act in respect of decisions and conduct are in addition to, and not in derogation of, any other rights to seek a review by the Court, any other court, or any tribunal, authority or person.  By subs (2)(b), notwithstanding subs (1):

“the Court may, in its discretion, refuse to grant an application under section 5, 6, or 7 that was made to the Court in respect of a decision, in respect of conduct engaged in for the purpose of making a decision, or in respect of a failure to make a decision, for the reason:

            …

(ii)       that adequate provision  is made by any law other than this Act
under which the applicant is entitled to seek a review by the
Court, by another court, or by another tribunal, authority or
person, of that decision, conduct or failure.”

23                  Order 20 r 2 of the Federal Court Rules relevantly provides:

“(1)     Where in any proceeding it appears to the Court that in relation to the
            proceeding generally or in relation to any claim for relief in the
            proceeding – 

            (a)        no reasonable cause of action is disclosed;

            …

            (c)        the proceeding is an abuse of the process of the Court,

            the Court may order that the proceeding be stayed or dismissed
            generally or in relation to any claim for relief in the proceeding.”

24                  It is well established that the Court should not exercise the power given by this provision unless the proceeding or claim concerned is “so clearly untenable that it cannot possibly succeed”.  See General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 at 130.

The availability of merits review

25                  The Aged Care Act contains a detailed procedural scheme, which must be followed before sanctions are imposed.  Section 67-1 sets out the steps that must be taken.  At each stage of the process, the approved provider is given an opportunity to make submissions about the proposed decision or conduct, and the third respondent is obliged to consider those submissions.  Part 6.1 of the Act provides rights of reconsideration and review by the AAT.  The scope of the reconsideration decision is not limited by reference to any particular grounds.  It is full merits review, encompassing law and fact, with the possibility of an appeal to this Court on a question of law.  The task of the AAT is to stand in the shoes of the third respondent and make the “correct and preferable” decision on the material before the AAT: Drake v Minister for Immigration and Ethnic Affairs (1979) 24 ALR 577.

26                  The Aged Care Act also provides procedures for the review of other decisions under the Aged Care Act, such as the decision to refuse certification of Saitta’s residential care service under s 38-1.  Those procedures also involve access to a re-hearing before the AAT.

27                  The steps taken pursuant to the procedures laid down in the Aged Care Act are taken for the purpose of determining whether a decision will be made to impose sanctions, or to refuse certification, as the case may be.  Although it might be correct to view each decision and each episode of conduct separately for some purposes, the fact that each is part of a chain leading to an ultimate decision cannot be ignored.  See Saitta Pty Ltd v Commowealth [2000] FCA 1546 at [90].  The powers of the AAT therefore extend to reconsidering all of the steps taken to reach the ultimate decision.  The proper conduct of a review by the AAT will cure defects in the process that led to the ultimate decisions complained of, if there were such defects.

28                  For these reasons, the availability of full merits review in the AAT constitutes an adequate alternative remedy for the purposes of s 10(2)(b)(ii) of the ADJR Act.  In my view, it is appropriate to exercise the discretion reposed in the Court by that section to decline to hear so much of these proceedings as challenges the validity of the decisions and conduct concerned.

29                  These are not cases in which the adequate alternative remedy is theoretical.  By the time the Court came to deal with the applications by the respondents to have the proceedings dismissed or stayed, the applicants had exercised their rights.  In the case of Saitta, it had been wholly successful.  In the case of Neviskia, it had been largely successful.  Its lack of success was limited to the imposition of sanctions for a period already past.

30                  For these reasons, I propose to dismiss the claims for relief based on the ADJR Act.

The other causes of action

31                  The applicants seek declarations as to the invalidity of the decisions and conduct to which their claims relate.  They wish to rely on declarations as to the invalidity of those decisions and conduct to found claims for damages, based on alleged breaches of statutory duties and common law duties of care.

32                  The applicants seek to persuade the Court that the Accreditation Grant Principles 1999, made pursuant to s 96-1 of the Aged Care Act are beyond the power conferred by that section, because they deal with matters that go beyond accreditation.  They give to the fourth respondent powers of enforcement which extend beyond matters of accreditation under Pt 5.4 of the Aged Care Act.  Alternatively, the applicants claim that the use of material gathered under powers contained in the Accreditation Grant Principles 1999 for purposes of accountability is unlawful.  Both arguments are based on the form of s 96-1.  It is said that, because of the arrangement of the table in that section, with separate items specified for accountability principles and accreditation grant principles, each set of principles must be entirely self-contained and segregated from any other set of principles, both in their terms and in the uses made of them.

33                  This argument is bound to fail.  There is nothing about the arrangement of the table in s 96-1 that suggests that the legislative intent was that such an irrational result would follow from the manner in which the section is set out.  From the scheme of the Aged Care Act, it is clear that the dichotomy suggested by counsel for the applicants is a false one.  The Act clearly envisages that accreditation bodies will play a role in relation to accountability.  Section 63-1(l), which relates to accountability, specifies that one of the responsibilities of approved providers is to allow people acting for accreditation bodies to have such access to the residential care service as is specified in the Accountability Principles.  It would be an absurd result if an accreditation body could not be authorised to accredit by reference to the accountability standards, or to report breaches of those standards.

34                  The decisions and conduct of which the applicants complain all rest on the exercise of powers in the Aged Care Act.  No ground was advanced to impugn them.  The provisions containing the powers all support the powers exercised.  There is therefore no basis for the grant of any declaration.  Further, declarations would be futile, because they could not form the basis of claims for breach of statutory duty or negligence at common law in the circumstances of the present cases.

35                  For the applicants to succeed in a claim for breach of statutory duty, they would have to rely on a provision of a statute giving rise to a duty on the part of one or more of the respondents to act in relation to the applicants in a particular way.  They would have to persuade the Court that the provision disclosed an intention on the part of the legislature that a failure to act in that way was to give rise to an action for damages on the part of a person affected adversely by a failure to act in the prescribed way.  In this respect, it is relevant to enquire whether the legislation is designed to benefit a particular class of persons.  See Mallinson v Scottish Australian Investment Co Ltd (1920) 28 CLR 66 at 70 - 71 and Darling Island Stevedoring and Lighterage Co Ltd v Long (1956) 97 CLR 36 at 49.  Counsel for the applicants was unable to point to any such provision.

36                  At its best, the argument on behalf of the applicants is that the duty was to make the correct decision at each stage of a process.  Such a duty could not give rise to a right to sue for breach of statutory duty.  The argument put on behalf of the applicants seemed to assume that the object of the Aged Care Act is to confer on approved providers of aged care the right to conduct profitable businesses.  An examination of the Aged Care Act dispels such a notion very quickly.  The objects set out in 2-1 mention providers only in relation to their accountability.  It is plain that the Aged Care Act is directed to the benefit of those receiving and requiring care.  The use of private businesses to provide care is incidental to the purpose of the legislation and subordinate to it.  The applicants could not succeed in claims for breach of statutory duty.

37                  The declarations the applicants seek would also not assist them to sue for negligence at common law.  In Crimmins v Stevedoring Industry Finance Committee [1999] HCA 59, (1999) 200 CLR 1, McHugh J observed at [82]:

“Public law concepts of duty and private law notions of duty are informed by differing rationales. On the current state of the authorities, the negligent exercise of a statutory power is not immune from liability simply because it was within power, nor is it actionable in negligence simply because it is ultra vires.”

38                  It is well established that a breach of a public law right by itselfgives rise to no claim for damages; a damages claim must be based on a private cause of action: Cubillo v Commonwealth [2000] FCA 1084, (2000) 103 FCR 1, at [1205].  The applicant’s claim in negligence is based solely on the alleged invalidity of decisions and conduct of the respondents.  No allegation of want of care is pleaded with any particularity.  The claim in negligence is unlikely to succeed.

39                  In Saitta’s application, there is expressed a claim for damages for breach of contract.  In the statement of claim, there is an allegation that the review audit was conducted pursuant to an agreement between the applicant and the respondents.  The alleged terms of the agreement are: that the review audit would be conducted in a fair and impartial manner; that the fourth respondent would conduct the review audit in an open and frank way; that at the conclusion of the review audit the fourth respondent’s assessors would conduct an exit interview at which they would discuss with Saitta’s representative any concerns they had about any non-compliance by Saitta with the Aged Care Standards; that the fourth respondent would prepare and submit to the third respondent a review audit report as to any non-compliance by Saitta with the Aged Care Standards for the purposes of the third respondent considering a proposed fresh application by Saitta for certification under the Aged Care Act in place of an earlier application which had been refused by the third respondent and was the subject of a request for reconsideration under s 85-5 of the Aged Care Act; and that the third respondent would consider and take into account the report on the review audit for the purposes of deciding on the proposed certification application.

40                  Breach of each of these terms is alleged.  In the case of the first three terms, the breach is alleged in the barest possible terms, ie. that the audit review was not conducted in a fair and impartial manner, or in an open and frank way, and that the assessors did not conduct the contemplated exit review.  Breach of the fourth term is pleaded in a different way.  It is alleged that the fourth respondent did not prepare and submit the review audit report for the purpose contemplated, but submitted a report which it knew or ought to have known was incomplete and incapable of being used for any such purpose.  Breach of the fifth term is put on the basis that the third respondent proceeded to consider and determine the certification application without taking into account a review audit report in accordance with the agreement when he knew or ought to have known that the review audit report submitted to him was incomplete and could not be relied on for the purposes of the certification application.  The manner in which these breaches are pleaded makes it clear that it is the content or quality of the report about which Saitta complains, not any failure to comply with the alleged agreement by failing to prepare a report, or by failing to take such a report into account in the making of a decision on the certification application.  Potentially, the allegations go further than just the inaccuracy of the review audit report.  The pleading could be taken to suggest that there was some standard that the report was required to reach, to fulfil a contractual obligation to Saitta.

41                  The respondents had a public duty under the Aged Care Act to perform the functions required by that Act in accordance with the requirements of the Act.  A promise to perform an existing public duty is not enforceable as a contract, because it is not a sufficient consideration, at least where the performance of the duty would confer no benefit on the promisee.  See Butterworths, Halsbury’s Laws of Australia, vol 6, ‘Contract’ at [110-715].  Further, as Mason J said in Ansett Transport Industries (Operations) Pty Ltd v Commonwealth (1977) 139 CLR 54 at 74 - 5:

“[T]he public interest requires that neither the government nor a public authority can by a contract disable itself or its officer from performing a statutory duty or from exercising a discretionary power conferred by or under a statute by binding itself or its officer not to perform the duty or to exercise the discretion in a particular way in the future.”

42                  The conduct of a review audit is a matter of statutory duty.  A promise to perform it, or to perform it in a particular manner, could not be enforceable as a matter of public policy.  Saitta could not therefore succeed in making out a case of breach of contract.

43                  It follows that there is neither ground nor reason to make declarations in respect of the decisions and conduct of which the applicants complain.  A declaration of right is a remedy the Court can grant pursuant to s 21 of the Federal Court of Australia Act 1976 (Cth) in relation to matters within its original jurisdiction.  The Court is empowered to make such declarations whether or not any consequential relief is or could be claimed and a declaration may be the only relief sought in a proceeding.  For the Court to entertain an application for a declaration, however, there must be some right sought to be vindicated.  If the applicants cannot raise a viable cause of action on the basis of which a declaration could be granted, they cannot maintain a proceeding in which only a declaration is sought.  The remedy of a declaration is also a discretionary one, which will not be granted where there is no purpose in granting it.  If the applicants could not use a declaration of right to found some other remedy, it will not be granted.

44                  There remain the applicants’ claims in defamation and for misleading and deceptive conduct in contravention of s 52 of the Trade Practices Act 1974 (Cth).  These claims rest on the inclusion in the various Review Audit Reports of statements that are alleged to be untrue and damaging to the reputations and businesses of the applicants.  With respect to the latter, it is plain that any conduct of the fourth respondent in including information in such a report was not in trade or commerce, but in the exercise of a statutory power.  With respect to the claim for defamation, Pt 6.2 of the Aged Care Act contains detailed provisions for the protection and, in some circumstances, publication of information relating to the affairs of an approved provider.  Section 86-9(1)(l) expressly permits the third respondent to publish:

“information about the approved provider’s performance in relation to responsibilities and standards under this Act”.

This provision, and the duty of the fourth respondent to report to the third respondent, would give rise at least to a defence of qualified privilege in any action for defamation.  See Stephens v West Australian Newspapers Ltd (1994) 182 CLR 211 at 238 – 240 per Brennan J.  The applicants plead that the information was published “maliciously”.  Such an allegation requires proof that the publisher of a statement did not honestly believe the statement to be true.  Whether the applicants could succeed in establishing such a state of mind cannot be known.

45                  In relation to the claims in defamation, however, the applicants cannot proceed in this Court without reliance upon the accrued jurisdiction of the Court, in circumstances in which the claims based on federal law cannot proceed.  While accrued jurisdiction to deal with common law claims arising out of a federal matter is not lost simply because the federal matter is dismissed on the merits, the accrued jurisdiction is not attracted if the federal claim is merely colourable, trivial, insubstantial or unarguable.  See Burgundy Royale Investments Pty Ltd v Westpac Banking Corporation (1987) 76 ALR 173 at 181.

46                  The applicants rely on s 39B(1A)(c) of the Judiciary Act.  That subsection relevantly provides that the Court’s original jurisdiction includes jurisdiction in any matter:

            “(c)      arising under any laws made by the Parliament…” 

In Saitta Pty Ltd v Commonwealth [2000] FCA 1546 at [107], Weinberg J expressed the view that it was difficult for him to see the applicant’s defamation claim as forming part of the one controversy between the parties, given that many of the issues of fact it raised were wholly separate from the issues of validity which lay at the heart of the principal claim.  The applicants’ defamation claims in these proceedings are, in substance, indistinguishable from that before his Honour.  They do not form part of the same “matter” as the applicants’ claims for judicial review.  See Fencott v Muller (1983) 152 CLR 570 at 608.

47                  In Saitta Pty Ltd v Commonwealth [2000] FCA 1546 at [107], Weinberg J also said that it seemed to him that the applicants’ claims for damages, including claims for defamation had been included “largely in order to circumvent the limitations which exist upon judicial review, and the discretionary considerations which favour staying or dismissing this application.”  I am compelled to the same conclusion in the present cases, particularly as the statements of claim in these proceedings are virtual replicas of those in the proceedings which were dismissed by his Honour.  Even if there were accrued jurisdiction to hear the applicants’ common law claims, therefore, I should decline to exercise it.

The applicants’ notices of motion

48                  It follows from what I have said that the proceedings, as they stand, should be dismissed.  No case was made out for leave to amend the statement of claim in either proceeding.  There is no indication that either applicant would be able to make a valid claim, squarely within the jurisdiction of the Court, which would justify the relief sought in the relevant application.  Neviskia seeks to amend its statement of claim to raise two decisions not yet the subject of its claims.  Those two decisions are part of the chain of steps leading to an ultimate decision.  For the reasons I have given in par [27], there would be no point in allowing such an amendment.

Conclusion

49                  For the reasons I have given, the application in each proceeding must be dismissed.  In proceeding V622 of 2000, the motions the subject of the applicant’s notice of motion filed on 14 February 2001 must also be dismissed.  In proceeding V641 of 2000, the motions the subject of the applicant’s notice of motion filed on 13 March 2001 must also be dismissed.  In each proceeding, the applicant should pay the costs of the respondents of the whole proceeding, including these motions.

Associate:

Dated:              29 June 2001