FEDERAL COURT OF AUSTRALIA

Grey v Health Insurance Commission [2001] FCA 1257

ADMINISTRATIVE LAW – judicial review - medical practitioner – inappropriate practice – Professional Services Review Committee – form of referral – jurisdiction of Committee – whether proposed findings in excess of jurisdiction – apprehension of bias – waiver of bias – duty to act fairly – whether delay is breach of duty

Health Insurance Act 1973 (Cth) ss 82, 86, 87, 101, 102, 103, 106L

Adams v Yung (1998) 83 FCR 248 - followed

Etherton v Public Service Board of New South Wales [1983] 3 NSWLR 297 – referred to

Gill v Walton (1991) 25 NSWLR 190 - considered

Goktas v Government Insurance Office of NSW (1993) 31 NSWLR 684 – not followed

Holmes v Mercado [2000] FCA 1848 - discussed

Jago v District Court (NSW) (1989) 168 CLR 23 - considered

Mercado v Holmes [2000] FCA 620 - discussed

R v Australian Stevedoring Industry Board (1953) 88 CLR 100 – referred to

R v Clarkson [1987] VR 962 – referred to

Tankey v Adams (2000) 104 FCR 152 - followed

Vakauta v Kelly (1988) 13 NSWLR 502 – referred to

Vakauta v Kelly (1989) 167 CLR 568 - followed

DR JOHN HOWARD GREY v HEALTH INSURANCE COMMISSION and ORS

V 914 of 2000

FINKELSTEIN J

MELBOURNE

17 SEPTEMBER 2001

REASONS FOR JUDGMENT

1                     The Health Insurance Act 1973 (Cth) establishes a scheme for the payment of medical benefits, known as medicare benefits, in respect of medical, dental and optometrical services.  Speaking generally, the benefit is an amount equal to either 75 per cent or 85 per cent of the fee specified in respect of a particular service.  The fees are to be found in one of three tables (see the definition of table in s 3), and each fee is referred to as a scheduled fee.  The Health Insurance Act also creates a scheme under which a practitioner’s conduct can be examined to ascertain whether there has been “inappropriate practice”.  It provides for action to be taken in response to a finding of inappropriate practice.  In that event, a person may be directed to repay medicare benefits to the Health Insurance Commission, or may be disqualified for up to two years from providing services in respect of which a medicare benefit is payable.

2                     Dr Grey is a medical practitioner.  He conducts a general practice from his surgery at Karingal Drive, Frankston.  A Committee set up under s 93 of the Health Insurance Act is presently considering whether Dr Grey has engaged in inappropriate practice in connection with the rendering of certain services for which medicare benefits were payable.  Relevantly, a practitioner engages in inappropriate practice “if the practitioner’s conduct in connection with rendering or initiating services is such that [the] Committee could reasonably conclude that … the conduct would be unacceptable to the general body of general practitioners”:  see the definition of “inappropriate practice” in s 82.  Dr Grey says that the Committee does not have jurisdiction to consider whether he has engaged in inappropriate practice.  Alternatively if the Committee does have jurisdiction, Dr Grey contends that it has exceeded it.  He asks for a declaration that the Committee is not lawfully entitled to continue with its inquiry, and seeks a writ of prohibition to prevent its continuation.

3                     Having regard to the nature of the issues raised by this proceeding, it is necessary to examine the statutory scheme under which conduct may be examined to determine whether inappropriate practice is involved.  The scheme has been described in some detail in a number of cases, including Adams v Yung (1998) 83 FCR 248 and Mercado v Holmes [2000] FCA 620 (on appeal, [2000] FCA 1848).  I will only mention those aspects of the scheme that are relevant to the present proceeding.

4                     The Health Insurance Commission may, in writing, refer to the Director of Professional Services Review the conduct of a person relating to one or both of (a) whether the person has engaged in inappropriate practice in connection with the rendering of services; or (b) whether the person has engaged in inappropriate practice in connection with the initiation of services:  s 86(1).  The referred services must have been rendered or initiated, as the case may be, during the two years preceding the referral:  s 86(2) and (3).  Section 87 deals with the content and form of the referral.  For the purposes of this proceeding it is necessary to note s 87(1), which provides that the referral must specify whether it relates to one or both of (a) specified services; and (b) services of a specified class, services provided to a specified class of persons, services provided within a specified location or services provided within a specified period.  Upon receipt of a referral, the Director must either dismiss the referral or set up a Committee to consider whether the practitioner has engaged in inappropriate practice:  s 89.  The Director must then give written notice of his decision to the person under review and to the Health Insurance Commission:  s 94(1).

5                     Members of the Committee set up under s 93 must be practitioners who belong to the profession of the practitioner who is under review:  s 95(2).  The Committee may regulate its own proceedings (s 98(1)) and may, for the purposes of its inquiry, inform itself in any manner it thinks fit (s 98(3)).  The Committee must hold a hearing if it appears that the person under review may have engaged in inappropriate practice:  s 101(2).  If there is to be a hearing, the Committee must give to the person under review written notice of the hearing:  s 102(1).  The notice “must give particulars of the matter to which the hearing relates”:  s 102(3).  The person under review is entitled to attend the hearing with a lawyer or other adviser, but is not entitled to be represented:  s 103(1).  However, the Committee may allow the person under review or their adviser (but not the lawyer) to question any witness and address the Committee:  s 103(2) and (3).  The conduct of the hearing is at the discretion of the presiding member:  s 106(1).  The Committee is not bound by the rules of evidence but may inform itself on any matter in any way it thinks appropriate:  s 106(2).

6                     At the conclusion of the hearing, the Committee must give the Determining Officer a written report setting out its findings on whether the person under review engaged in inappropriate practice in connection with the referred services:  s 106L(1).  The report must be given to the Determining Officer within 120 days after the Committee has been set up (s 106M(1)), though there is power to extend the time:  s 106M(3).  Upon receipt of the report, the Determining Officer must decide what action should be taken in the event of a finding of inappropriate practice:  s 106S and 106T.  In that regard the Determining Officer must make one or more of the determinations mentioned in s 106U, including that the person under review be reprimanded, counselled, repay to the Commonwealth the whole or a part of the medicare benefit that was paid in respect of the referred services, or be disqualified.

7                     This description of the functions and powers of the Committee brings me to Dr Grey’s first submission, which is that s 94 to s 106F vest the exercise of judicial power in the Committee when it has no jurisdiction to exercise that power because it is not a court constituted under Chapter III of the Constitution.  To make good this submission, Dr Grey must show that the Committee is exercising judicial and not administrative power, and that it is exercising the judicial power “of the Commonwealth”.

8                     A similar issue has already been considered by the Full Court.  In Tankey v Adams (2000) 104 FCR 152, the Full Court was required to determine whether the Professional Services Review Tribunal, in exercising its power to review decisions of the Determining Officer, was exercising judicial power.  The Full Court held that the tribunal was exercising administrative power.  The Full Court identified a number of factors that led to that conclusion.  First, it found that the tribunal was not concerned with the ascertainment of legal rights and obligations.  Second, it said that the determination whether a practitioner has engaged in “inappropriate practice” is not a traditional judicial inquiry.  “[I]t is a concept which depends for its application on peer review which is, of its nature, a delegated administrative function of government rather than the exercise of judicial power”:  Tankey v Adams at 162.  Third, the Full Court drew attention to the fact that any determination by the tribunal was not directly enforceable by it.

9                     These observations apply with equal, if not greater, force to the findings of the Committee.  The Committee makes no determination of any kind, its function being limited to making findings and reporting them to the Determining Officer.  It is the Determining Officer who decides what directions should be given to the practitioner.  On the authority of Tankey v Adams, the sections under attack are a valid exercise of Commonwealth legislative power.

10                  For the sake of completeness I should mention that Dr Grey also contends that ss 93 and 106M-121 invalidly confer the judicial power of the Commonwealth on the Determining Officer.  For this argument to succeed, it would be necessary for Dr Grey to have Tankey v Adams overturned.  He appreciates that I cannot overturn a decision of the Full Court.  I understand he merely wishes to preserve his position.

11                  Turning now to Dr Grey’s allegation that the Committee does not have jurisdiction to inquire into his conduct, it is appropriate to make some preliminary observations about the powers of the Director and the Committee.  First, the power of the Director to establish a Committee to consider whether a practitioner has engaged in inappropriate practice depends upon the existence of a lawful referral.  Thus, if on the face of a referral the Commission raises for consideration conduct which could not amount to inappropriate practice as defined, the Director would not have jurisdiction to set up a Committee to inquire into the matter.  Other conditions for the validity of a referral may include compliance with provisions such as s 87 and s 102(3):  see generally Project Blue Sky Inc v Australian Broadcasting Association (1998) 194 CLR 355, 388-391.  The parties have argued this case on the assumption that if the Commission’s referral does not comply with s 87 or s 102(3), it will be invalid.  It is possible that their assumption is correct, so I will not depart from the parties’ common position. 

12                  The second observation is that if the Director decides to set up a Committee to consider whether a practitioner has engaged in inappropriate practice, the referral will define the jurisdiction of the Committee.  In Adams v Yung the Full Court said (at 298) of a reference under s 86 that it “is not intended to open for consideration by a committee ultimately convened any aspect at all of the referred person’s conduct in the referral period.  What is contemplated is that it be an inquiry into specified conduct as dealt with in the reference rather than conduct at large.”  In a later passage the Full Court said (at 299):  “The function of the Committee therefore and the hearing it is required to undertake on the evidence given and documents produced, is limited to considering the matters that are the subject of the referral.”

13                  The initial step that led to the establishment of the Committee to consider whether Dr Grey had engaged in inappropriate practice is the Commission’s referral dated 20 November 1997.  That referred to the Director “the conduct of Dr John Howard Grey relating to whether he has engaged in inappropriate practice within the meaning of section 82 of the Act in connection with rendering and initiation of services.”  The referred services were those “rendered and initiated by Dr John Howard Grey … during the two year period preceding the date of [the] referral [being] the services provided [at] … 196 Karingal Drive, Frankston within [the] specified period … 1 January 1996 to 31 December 1996.”  The referral noted: “Relevant information is attached”.  The attached information amounted to some 69 pages, the first page of which was headed “Summary of Health Insurance Commission Concerns”.  It is important that this section be set out:

“High Volume of Rendered Services

In the referral period 1 January 1996 to 31 December 1996, Dr Grey provided 24,774 services of which 54 were level A consultations (item 3), 22,230 were level B consultations (item 23) and 946 were level C consultations (item 36).  Dr Grey’s services are above the 99th percentile of all active vocationally registered general practitioners in Australia (16,042 services).  The Health Insurance Commission data shows that Dr Grey practised for 49 weeks of the referral year.  During this period Dr Grey provided between 61 and 80 services per day on 67 occasions, between 81 and 100 services per day on 78 occasions, between 101 and 120 services per day on 60 occasions, between 121 and 140 services on 27 occasions and between 141 and 160 services per day on 2 occasions (see table 7) in his apparent average surgery working day.  Time calculations based on the Entry Standards of the Royal Australian College of General Practitioners (RACGP) suggest that Dr Grey would have needed to spend between 10.2 and 26.7 hours of direct patient contact per surgery working day to provide quality care at a standard acceptable to the RACGP.  The Health Insurance Commission believes that the appropriate level of clinical input may not be able to be maintained at this high servicing rate on a regular and continuing basis (see F).”

14                  The summary is followed by background information about Dr Grey, statistical information concerning the servicing patterns of general practitioners, notes of an interview with Dr Grey, correspondence from Dr Grey and details of medical services provided by Dr Grey.  There is a section headed “Details of Health Insurance Commission Concern”.  It notes that Dr Grey had been presented with statistics suggesting that he had “rendered more services than 99% of all active vocationally registered general practitioners in Australia”.  It also notes that “during the referral period, Dr Grey rendered more than 60 services per day on 234 days.”  Based on the time it would take to provide so many services the Commission asserts that “Dr Grey would have needed to have spent between 10.2 and 26.7 hours per day in direct patient contact.”  Then there is a summary of the Commission’s assessment of Dr Grey’s practice, followed by various tables, graphs, reports and the like.

15                  Dr Grey argues that the referral is invalid because it does not refer for consideration any conduct that is capable of being characterised as “inappropriate practice”.  In dealing with this submission it is necessary to bear in mind that the referral comprises not only its formal part, it includes all the attached material.  So much was not in dispute.  Even if it be disputed, the point is established by the authorities, including Retnaraja v Morauta (1999) 93 FCR 397 where von Doussa J treated the “attached material” as part of the referral and Mercado v Holmes, at first instance, where Heerey J expressly held that the “attached material” constitutes part of the referral.

16                  In my opinion the referral does identify conduct which, if it has occurred, could amount to inappropriate practice for the purposes of s 82.  The referral identifies the Commission’s concern about the high volume of rendered services, and the possibility that by rendering so many services Dr Grey could not provide an appropriate level of “clinical input”.  The question is whether Dr Grey was providing adequate treatment to his patients in view of his high workload.  There can be no doubt that if Dr Grey was not providing proper treatment to his patients that would amount to inappropriate practice. 

17                  It is interesting to note that the referral in this case is similar to that considered in Mercado v Holmes.  Neither Heerey J nor the Full Court expressed any doubt about the validity of that referral.  The referral is also similar to that in Adams v Yung, which satisfied the statutory requirements:  see Adams v Yung at 279. 

18                  Dr Grey’s next complaint concerns the notice of hearing that he was given under s 102.  The notice was required to provide particulars of the matter to which the hearing relates.  In purported satisfaction of this obligation, the following particulars were provided:

“This hearing concerns your conduct in relation to services rendered by you during the Referral Period, from your practice location in the State of Victoria.  The issue to be determined is whether you have engaged in inappropriate practice in connection with the rendering of some or all of these services.

Particulars of the Committee’s concerns as at the date of this notice are:

·        whether you were able to provide an appropriate level of clinical input into the services rendered during the Referral Period with particular reference to your rendering of the services covered by Medicare Benefits Schedule items 23, 36 and 44; and

·        whether the services that you rendered during the Referral Period were clinically relevant, that is, necessary for the appropriate treatment of the patients to whom they were rendered.

Further concerns may emerge during the hearing.  You will be made aware of any other concerns that arise and will be given adequate opportunity to address them.”

19                  Dr Grey says that these particulars are too wide and general.  He points out that the “fundamental principle is that ‘a party must be made aware of the nature of the case he is called upon to meet’”, relying on cases such as Etherton v Public Service Board of New South Wales [1983] 3 NSWLR 297 and R v Pharmacy Board of Victoria; Ex parte Broberg [1983] 1 VR 211.  This obligation has not been satisfied, so the argument goes.

20                  Once again the cases are against Dr Grey.  I have looked at the notice of hearing that was considered in Adams v Yung.  It is in similar terms to the notice given to Dr Grey.  In Adams v Yung Beaumont J said of the notice (at 280):

“Did the present notice of hearing give particulars of the subject matter of the Referral?  In my opinion, it did.  It specified the relevant services as those rendered at the Kirrawee Medical Centre in the year commencing 1 January 1994.  They were particulars of the matter for the purposes of s 102(3), so that its provisions were complied with.”

Although the remaining members of the Full Court did not deal with the validity of the notice, I should follow Beaumont J’s ruling.  Therefore I must find that the notice given to Dr Grey is valid.

21                  I now come to the fourth complaint.  It arises in the following circumstances.  There has been a hearing before the Committee.  The hearing commenced on 7 May 1999, but was suspended because the Committee was concerned that there may have been fraud in respect of some of the referred services.  That matter was resolved and the hearing resumed on 25 May 2000 and continued on 9 and 23 June 2000.  During the hearing the Committee considered the treatment Dr Grey provided to 30 randomly selected patients, being patients who had been charged for either item 36 services or item 44 services.  The general medical service table describes these items in the following terms:

“Item 36 – Level C surgery consultation

Professional attendance involving taking a detailed history, an examination of multiple systems, arranging any necessary investigations and implementing a management plan in relation to one or more problems, and lasting at least 20 minutes, or a professional attendance of at least 40 minutes duration involving components of the service to which items 44, 47, 50 or 51 applies.

Item 44 – Level D surgery consultation

Professional attendance involving taking an exhaustive history, a comprehensive examination of multiple systems, arranging any necessary investigations and implementing a management plan in relation to one or more complex problems, and lasting at least 40 minutes or a professional attendance of at least 40 minutes duration for implementation of a management plan.”

22                  Following the hearing the Committee prepared a draft report setting out its proposed findings.  On 25 October 2000 Dr Grey was provided with a copy of the draft.  He was advised that he could make submissions on the proposed findings.  He was told to lodge those submissions within a specified period and they would be appended to the Committee’s final report.

23                  The draft report records the following proposed finding:  “[T]hat the practitioner under review, Dr John Howard Grey, has engaged in inappropriate practice in connection with the rendering of some of the services that were the subject of a referral from the Health Insurance Commission”.  The draft report notes that:

“At the conclusion of the hearing on 23 June 2000, Dr Grey was informed that, unless he had further evidence to convince it to do otherwise, the Committee was likely to find that he had engaged in inappropriate practice in the rendering of his item 36 and item 44 services during the Referral Period.  In this regard, the Committee indicated that, in its opinion, the available evidence pointed to a level of clinical input into the rendering of these services that was insufficient to meet the requirements of the relevant item descriptions.” 

24                  In a section of the draft report headed “Consideration of the Evidence” the Committee said that it “considered…thirty randomly selected services from items 36 and 44”.  It then explained how it approached its assessment of the treatment of those patients:

“Item 36 – Level C surgery consultation

Firstly, the Committee considered the content of the service.  It then went on to consider whether the content of the service satisfied the item description in the Medicare benefits Schedule as it was at the time the service was rendered.  It also considered qualitative aspects of the service in regard to the specific patient problem.  These included whether:

·        an appropriate history had been taken;

·        an appropriate examination had been made;

·        an acceptable management plan had been formulated;

·        any investigations ordered had been necessary and appropriate to the patient’s problem; and

·        any treatment given had been appropriate for the patient’s condition.

Item 44 – Level D surgery consultation

In its examination of Dr Grey’s item 44 services the Committee considered the similar criteria to that for item 36.”

25                  It is apparent that as a result of its investigation the Committee has serious concerns about the lack of information appearing in Dr Grey’s medical records.  In its draft report the Committee makes the following observations about these records:

“Clinical Notes

A recurring issue throughout the hearing was the standard of Dr Grey’s record keeping.  Indicative of the problems the Committee had in endeavouring to ascertain what had been involved in the rendering of particular services was the following exchange:

DR GREY: …. Now, if that went down as an item 44 and if I charged that as an item [44] was an item 44.  I won’t entertain that any more.  That is an item 44.

DR GARNER:   Dr Grey, the evidence before us is that you haven’t recorded anything of what you have just said and I think that is really the evidence that we have …

DR GREY:   As I said before, my histories are an aide memoir.  They’re my notes, in my style, along the way that I do things.  Now, this is four odd years ago.  If I put down item 44 that item fulfils exactly what it is.  And I just reiterate that I regard our practice is certainly ethical and honest, and if these items are struck up, well, that’s what they are.  They depict exactly what was done.

DR INGRAM:   Why did you question whether it might have been an item 36 when we first started this conversation, and now you’re adamant it’s an item 44?

DR GREY:   Well, I’m not.  If it’s an item 44 I could easily justify that.  It could easily be an item 36.  It could be a long item 36 or just over the border into an item 44.  There’s no significance to that.  I’m going to question all these statistics; I’ve got a lot of reason to question the statistics.

…

While the Committee accepts that it is unrealistic to expect a general practitioner to record everything that occurs during a consultation, it considers that Dr Grey omitted from most of his records a considerable amount of relevant clinical information.  The fact that, during much of the hearing, Dr Grey was forced to resort to explain his rendering of particular services with an introductory “I would have” statement simply underscored the Committee’s belief that his record keeping was inadequate.”

26                  The draft report also contains the Committee’s proposed findings in relation to each of the thirty randomly selected patients whose cases were examined.  Each patient is identified by a service number.  It is necessary to consider the nature of findings the Committee proposes to make.  In some instances the Committee intends to make a finding that Dr Grey charged a fee that was not justified in the circumstances.  For example in relation to services no. 1 and 12, the Committee has indicated that it will make the following findings:

“Service No. 1

The clinical record for this service showed ‘See CT chest’ and that Dr Grey had requested ‘sputum M/C/S cytology x 3’ after which the patient was to ‘start tetracycline’ (which the patient thought she could take) and to have extensive ‘physiotherapy’.  The record also showed that Dr Grey had examined the patient’s chest and found a small band of fine creps in her lower right anterior lung.  There had been no change on coughing and no pleural rubs.  Air entry was quite acceptable.

…

Committee finding:  As the Committee was not satisfied that Dr Grey had provided the clinical input required under the description of item 36, it considered that Dr Grey’s conduct in connection with the rendering of this service would unacceptable (sic) to the general body of general practitioners practising in Australia.  This was a follow up consultation which did not require the taking of a detailed history or an examination of multiple systems.  Dr Grey merely ordered a sputum examination and prescribed an antibiotic.

…

Service No. 12

The clinical record for this patient showed that she had recently been discharged from Monash Medical Centre after the excision of cysts from the left lung and that Dr Grey had redressed her wound.

Committee finding:  The Committee noted that Dr Grey had essentially done no more than redress a wound.  In light of their (sic) being no written evidence that Dr Grey had provided the level of clinical input required under the description of item 36, the Committee considered that Dr Grey’s conduct in connection with the rendering of this service would be unacceptable to the general body of general practitioners practising in Australia.”

In other cases, the Committee proposes to find that Dr Grey did not provide any services to the patient, yet charged a fee.  The following is an example:

“Service No. 2

The clinical record for this patient showed ‘HIV negative.  Still complaining of lower central abdominal soreness.  Needs barium enema’.

…

Committee finding:  In light of their (sic) being no written evidence that Dr Grey had provided the level of clinical input required under the description of item 36, the Committee considered that Dr Grey’s conduct in connection with the rendering of this service would be unacceptable to the general body of general practitioners practising in Australia.  Dr Grey provided no evidence of having assessed this patient (sic) clinical condition and no evidence to support his ordering of a barium enema.”

The Committee also intends to make findings that on some occasions Dr Grey charged an incorrect fee.  A typical example is service no. 8:

“The clinical record for his patient showed that the patient had presented with a painful index finger.  Dr Grey stated:

            Right. …… this is one I find hard to explain – ‘20 June ’96 query fractured right index finger.  X-rayed, no fracture seen.’  At that stage we were X-raying in our own unit but I wasn’t doing X-rays.  I can’t justify that as a 36.  That would be a 23.  Just on what’s written there.  Unless something else came up at the time, but, again, June ’96.  That’s 4 years ago.  Unless he asked a lot of questions.  I know this fellow fairly well.

Committee finding:  In light of Dr Grey’s admission, the Committee considers that, in claiming an item 36, Dr Grey’s conduct in connection with the rendering of this service would be unacceptable to the general body of general practitioners practising in Australia.”

27                  The subject matter of the inquiry before the Committee is confined to whether Dr Grey had engaged in inappropriate practice by failing to provide appropriate treatment to his patients.  The Committee is not charged with the responsibility of considering whether Dr Grey had rendered medical services that were not necessary for the care of a patient (sometimes known as over-servicing), whether Dr Grey had charged for services that he did not in fact provide, or whether Dr Grey had engaged in inappropriate practice by failing to keep proper records.  It seems clear that, in inquiring into these matters, the Committee is going beyond its reference.

28                  A similar problem arose in Mercado v Holmes.  There the referral resulted from the high volume of services rendered by the practitioner.  The referral stated the Commission’s belief “that the appropriate level of clinical input may not be able to be maintained at this servicing rate on a regular and continuing basis.”  The Committee to which the matter was referred proposed to investigate whether the services rendered by the practitioner during the referral period “were reasonably medically necessary for the care of the patients to whom they were rendered”.  The practitioner alleged that the Committee did not have jurisdiction to consider that issue.  Heerey J agreed.  He said (at para 72 and 73):

“The document identified high volume of rendered services as the subject matter of enquiry.  This is a substantially different subject matter from what is colloquially referred to as overservicing – the rendering of medical services that are not reasonably medically necessary for the care of the patient.  A practitioner can engage in overservicing without an excessive throughput of patients, and vice versa.  As forms of conduct unacceptable to the general body of general practitioners they are quite distinct – albeit that a practitioner may engage in both.  Moreover, overservicing would usually suggest ethical failing in a way that high volume servicing does not.  Yet the notice of hearing of 21 December 1999 gave overservicing as one of the Committee’s ‘concerns’ and also indicated that ‘(f)urther concerns may emerge during the hearing’.  The validity of such an exercise was defended by Senior Counsel for the first respondent.  He argued that in any event overservicing was within the referral because the Committee is charged with examining the ‘referred services’ (s 106L), a ‘service’ is ‘a service for which medical benefit was payable’ (s 81(1)), only a ‘professional service’ attracts a medicare benefit (s 10) and ‘professional service’ means a ‘clinically relevant service’ (s 3(1)) which in turn is a service ‘necessary for the appropriate treatment of the patient’ (s 3(1)).  This line of reasoning is said to support the ‘fundamental premise’ of the enquiry that the referred services were ‘actual as opposed to purported services’.

The short answer is that it has never been suggested that the applicant has obtained Medicare benefit for non-existent services.  The Act requires the Committee to examine conduct in relation to ‘inappropriate practice’ as that term is defined in s 82(1)(a).  For the reasons already mentioned, high volumes of service and overservicing are different forms of conduct.  The notice of 21 December 1999 recognises this.  If both are to be examined, that should be clearly stated in the referral.”

In the result, Heerey J found that the reference was confined to high volume of services.  This finding was not challenged on appeal. 

29                  In this case, the Commission has identified as its areas of concern the high volume of services rendered by Dr Grey, and the possibility that with such a large workload he may not be able to provide proper medical treatment to his patients.  That is the only subject matter of the referral, and the only issue which the Committee has jurisdiction to determine.  The Committee is not entitled to delve into any other aspect of Dr Grey’s conduct that might constitute inappropriate practice.  Of course, other aspects of Dr Grey’s conduct may require investigation if they have a bearing on the matter that is within the Committee’s jurisdiction.  But those matters can only be examined, if at all, as an incident of the main inquiry, and not as a separate subject.  In the result, it will be necessary to make declarations defining the proper scope of the investigation by the Committee if Dr Grey is unable to convince me that the inquiry should be brought to an end by reason of the additional matters on which Dr Grey relies.

30                  The next complaint is that the Committee did not act fairly in the manner in which it conducted the inquiry such as to give rise to an apprehension of bias.  It was not disputed that the principles of procedural fairness apply to administrative bodies as well as to courts:  Kioa v West (1985) 159 CLR 550, 584; Annetts v McCann (1990) 170 CLR 596.  Nor was it disputed that a body, such as the Committee, should not hear a reference if in all the circumstances there is a reasonable apprehension that it might not bring an impartial mind to its statutory task.  The resolution of the present case involves two questions; first, whether the Committee had so conducted itself that a suspicion of bias exists and, second, whether Dr Grey has waived any objection to the Committee continuing to hear the matter.

31                  I propose first to deal with the waiver point.  Once there was a doubt whether bias could be waived:  Goktas v Government Insurance Office of NSW (1993) 31 NSWLR 684, 687.  That doubt has now been dispelled by the High Court in Vakauta v Kelly (1989) 167 CLR 568.  The rule is that where a party is aware of his right to object to a decision-maker determining a matter on account of bias, that right will be waived if the party acquiesces in the decision-maker continuing to deal with the matter:  see generally R v Byles; Ex parte Hollidge (1912) 108 LT 270; [1913] All ER 430; Corrigan v Irish Land Commission (1977) IR 317; R v Magistrates’ Court at Lilydale; Ex parte Ciccone [1973] VR 122; Vakauta v Kelly (1988) 13 NSWLR 502, 528 et seq.  That is not to suggest that there must be an express objection requiring the Committee to withdraw.  In Vakauta v Kelly Toohey J said (at 587):  “It may be enough that counsel make clear that objection is taken to what the judge has said, by reason of the way in which the remarks will be viewed.  It will then be for the judge to determine what course to adopt, in particular whether to stand down from the case.”

32                  It was submitted that Dr Grey’s position should be viewed differently because he was not entitled to be represented by a lawyer and was therefore at a presumed disadvantage.  I do not agree.  Although s 103(1) denies to a practitioner the right to be represented before the Committee by a lawyer, the section permits the practitioner to be accompanied by a lawyer or another adviser.  The section contemplates that if a practitioner brings his lawyer, the lawyer may give legal advice to the client during the course of the hearing.  That is sufficient, in my opinion, to deny the suggestion that a practitioner is at any disadvantage, at least as regards making a complaint about bias.

33                  What is the position with regard to Dr Grey?  On each day of the hearing he was accompanied by a solicitor.  If the solicitor thought that, by its behaviour, the Committee had overstepped the mark, he could have advised his client to object.  Apparently no such advice was given.  Moreover, neither Dr Grey nor his solicitor wrote to the Committee raising the issue of bias.  If a letter of complaint had been written shortly after the hearing, it is unlikely that there would be waiver.  It was only when Dr Grey received the draft report that bias was raised.  By then it was too late to make the complaint.  It is not appropriate for a person to wait and see if his case may succeed before raising an objection on this ground. 

34                  In the result, Dr Grey has waived any right he may have had to object to the Committee on account of apprehended bias.  Because I have reached this conclusion it is not necessary for me to consider whether the conduct complained of would permit a finding of apprehended bias.  In fairness to the Committee, however, as I have formed a view on the allegation it is appropriate that I state it.

35                  The matters upon which Dr Grey relies to establish apprehended bias can be briefly summarised.  I take them from his written contentions.  The Committee embarked upon an inquiry as to matters that were not within the scope of its referral.  As a result the Committee questioned Dr Grey on matters of which he had no notice.  In particular there was extensive questioning about the extent of Dr Grey’s professional skill and knowledge.  Some of the questions related to events that had occurred more than four years earlier, in relation to which Dr Grey would be expected to have little knowledge.  The questioning was hostile, and during the course of the questioning Dr Grey’s veracity and honesty was challenged, as was his skill and ability as a medical practitioner.  It is also alleged that Dr Grey was questioned on the basis that it was necessary for all of the services to have been performed by him personally, despite Dr Grey’s contention that in allowing a trained assistant to render some parts of the services, he was acting on the oral advice of the Commission.

36                  I have read the transcript of the hearing before the Committee to determine whether it can be said that the members “have conducted [themselves such] that a high probability arises of a bias inconsistent with the fair performance of [their] duties, with the result that a substantial distrust of the result must exist in the minds of reasonable persons”:  R v Australian Stevedoring Industry Board (1953) 88 CLR 100, 116.  That is, I looked to see whether the Committee had closed its mind to the possibility that Dr Grey had not engaged in inappropriate practice. 

37                  I reject the contention that anything that was said by the Committee would suggest bias to a fair-minded observer.  The transcript shows the Committee properly conducted itself, as one would expect.  There were occasions when there was some heat in what passed between the Committee and Dr Grey, but often this occurred because of the attitude of Dr Grey.  I do not mean to be critical of Dr Grey in this respect.  He was obviously under great strain.  On occasions, this caused him to make intemperate remarks.  When that occurred the Committee members diffused the situation.  It is true that at times, during the course of asking questions, the members were critical of Dr Grey’s treatment of some patients, his lack of recollection of the treatment of others, and his poor medical records which made it difficult, if not impossible, for the Committee to ascertain what treatment had been provided to patients.  None of this amounts to bias.  First, it is no more than one would expect of a hearing before a Committee of peers, bearing in mind the task at hand.  Second, some of the comments are justified.

38                  Dr Grey also relies on these factors, together with the significant delay that has occurred in bringing the hearing to finality, to argue that any continuation of the inquiry is so harsh and oppressive that it would be an abuse of process to allow it to go on.  Accordingly, Dr Grey seeks a permanent stay of the hearing.

39                  There is no doubt that if a party is put at a significant disadvantage in a proceeding by reason of the time that has elapsed since the happening of the events in question, so that it is no longer possible to obtain a fair hearing of a matter arising from those events, it may be possible to obtain a stay:  Jago v District Court (NSW) (1989) 168 CLR 23, 33, 48 et seq, 55-56, 71, 76-78.  This principle applies as well to administrative tribunals as it does to courts of law.  The matters to be taken into account in deciding whether a person is being given a fair hearing within a reasonable time would include:  (1) the length of the delay; (2) the reason given by the instituting party to justify the delay; (3) responsibility of the person concerned for asserting his rights; (4) prejudice to the person; and (5) the public interest:  Bell v Director of Public Prosecutions [1985] AC 937 where the Privy Council adopted some of the tests laid down by the US Supreme Court in Barker v Wingo 407 US 514 (1972).  It is not clear whether the power to prevent an abuse of process extends to a power to prevent unfairness generally.  That the power does extend so far appears to have been accepted by Courts of Appeal in New South Wales and Victoria; in New South Wales see Barron v Attorney-General (NSW) (1987) 10 NSWLR 215; Gill v Walton (1991) 25 NSWLR 190; in Victoria see R v Clarkson [1987] VR 962.  On the other hand, in practice “so broad a power does not fall far short of a power which is incompatible with the rule of law.”:  Jago at 53 per Brennan J.

40                  In this case, there has been a good deal of delay, some explained (the delay caused by the investigation into whether Dr Grey had been involved in fraud), and some unexplained (why it took so long to begin the hearing in the first place and why it took nearly twelve months to resolve the fraud question).  However, I am quite satisfied that Dr Grey suffered no significant disadvantage.  I do not mean to suggest that delay without prejudice may not result in an abuse of process.  For example if there were deliberate or culpable delays on the part of the Committee, that may suffice to find an abuse of process:  Jago at 61 per Deane J; Gill v Walton at 216 per Mahoney JA, dissenting on the facts.  In this case the delay has not been adequately explained, but it was not suggested that it was deliberate.  So, bearing in mind the public interest in resolving whether Dr Grey has engaged in unacceptable practice, in the absence of significant prejudice, he would not be able to make out a case of abuse.

41                  I accept as a matter of common sense that Dr Grey has suffered some disadvantage because of the lapse of time.  Many of the questions put to him during the course of the hearing concerned the nature of the treatment provided to his patients.  Because his file notes were inadequate, Dr Grey was not able adequately to deal with those questions.  On the other hand, from the time of the referral Dr Grey was aware of the nature of the case to be put against him.  He received a copy of the referral, shortly after it was given to the Director.  It was provided to him under s 88(1).  The referral describes in some detail why it was thought Dr Grey may have engaged in inappropriate practice.  Importantly, it names the particular patients who had been selected for evaluation at any hearing before the Committee.  Dr Grey was in a position to prepare for the hearing well before it began, and the evidence does not suggest that the delay caused any significant prejudice.  Accordingly, no abuse of process has been shown.

42                  Dr Grey should bring in short minutes of order within seven days to give effect to these reasons.

Associate:

Dated:              17 September 2001