FEDERAL COURT OF AUSTRALIA

Nguyen v Minister for Health & Ageing [2002] FCA 1462

PRACTICE AND PROCEDURE – application to vary order prior to entry – whether order setting aside decision of Minister operated from date of judgment or date of decision – s 16(1)(a) of the Administrative Decisions (Judicial Review) Act 1977 (Cth) – discretion to make order nullifying decision capable of operating retrospectively – factors relevant to exercise of discretion

Administrative Decisions (Judicial Review) Act 1977 (Cth) s 16(1)(a)

National Health Act 1953 (Cth)

Wattmaster Alco Pty Ltd v Button (1986) 13 FCR 253 at 256-258 applied

BHP Direct Reduced Iron Pty Ltd v Chief Executive Officer, Australian Customs Service (1998) 55 ALD 665 applied

Minister for Immigration and Multicultural Affairs v Bhardwaj (2002) 187 ALR 117 pars [46], [51], [53], [63] and [132] followed

Craig v South Australia (1995) 184 CLR 163 referred to

Minister for Health and Family Services v Jadwan Pty Ltd (1998) 89 FCR 478 referred to

Jadwan Pty Ltd v Secretary, Commonwealth Department of Health & Aged Care [2002] FCA 1052 referred to

KIMBERLEY NGUYEN v MINISTER FOR HEALTH AND AGEING

V580 of 2002

WEINBERG J

4 DECEMBER 2002

MELBOURNE

THE COURT ORDERS THAT:

1.         The orders of the Court made on 10 October 2002 be varied by adding a new order 1A which is in the following terms:

1A.      That order 1 take effect from 4 September 2002.

2.         There be no order as to the costs of the application to vary those orders.

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

REASONS FOR JUDGMENT

1                     On 10 October 2002 I delivered judgment in this matter: Nguyen v Minister for Health and Ageing [2002] FCA 1241.  On that occasion I made orders in the following terms:

“1.      The decision of the Minister for Health and Ageing on 30 August 2002, made pursuant to s 133(2)(b) of the National Health Act 1953 (Cth), to revoke the approval numbered 20689X granted jointly to Tina Trinh Nguyen and Helena Huong Nguyen (now known as Kimberley Nguyen) in relation to premises at 270 Hampshire Road, Sunshine, Victoria, be set aside. 

2.         The respondent pay the applicant’s costs.”

2                     At the time I delivered my reasons for judgment I did not appreciate that it was a matter of some importance to the parties as to whether the order to set aside the decision of the Minister for Health and Ageing (“the Minister”) applied retrospectively, as from 4 September 2002 (the date on which the applicant was notified of that decision) or whether it applied prospectively, as from the date of my judgment.  Shortly after I published my reasons for judgment, it became clear that the parties disagreed as to the effect of my order. 

3                     Order 35 r 7(1) of the Federal Court Rules provides that the Court may “vary or set aside a judgment or order before it has been entered”.  There is authority for the proposition that the Court will exercise great caution before it varies an order.  Indeed, it has been suggested that it is only in exceptional circumstances that the power will be exercised. 

4                     It transpires that during the period between 4 September 2002 and 10 October 2002 the applicant, Ms Nguyen, who is a qualified pharmacist, conducted the business at the pharmacy though she was not, at that stage, at least according to the Minister, an approved pharmacist in relation to the relevant premises.  This meant that she was dispensing pharmaceuticals, without being able to recoup from the Commonwealth the amounts to which she would otherwise be entitled, her approval having been purportedly revoked. 

5                     The applicant claims that because I found that the Minister’s discretion had miscarried when she purported to revoke the approval, the act of revocation was a nullity, and therefore should be set aside as though it had never been made.  The effect of such an order would be to enable the applicant to apply to the Commonwealth for payment of pharmaceutical benefits under the National Health Act 1953 (Cth), and to recover the amount which she herself had met during the period between the purported revocation, and its having been set aside. 

6                     It should be noted that the applicant sought, in her written submissions filed prior to the hearing of the primary proceeding, to have the Minister’s decision to revoke the approval set aside as from 4 September 2002, a matter that escaped my attention when I ultimately prepared my judgment.  The Minister did not address this issue in her written submissions and the matter was not raised by either party in oral submissions. 

7                     The application to this Court was brought pursuant to the Administrative Decisions (Judicial Review) Act 1977 (Cth) (“the ADJR Act”).  Section 16(1)(a) of that Act provides:

“16(1)     On an application for an order of review in respect of a decision, the Federal Court or the Federal Magistrates Court may, in its discretion, make all or any of the following orders:

(a)      an order quashing or setting aside the decision, or a part of the decision, with effect from the date of the order or from such earlier or later date as the court specifies.”

8                     Section 16(1)(a) expressly empowers this Court to set an operative date for an order quashing or setting aside a decision.  In Wattmaster Alco Pty Ltd v Button (1986) 13 FCR 253 it was held that there was no presumption either for, or against, the date being set under par (a) as at the time the impugned decision was made, or the time judgment was given.  However, as Aronson and Dyer, Judicial Review of Administrative Action (2^nd ed, 2000) observe at 508:

“… Having said that … the criteria considered relevant for setting the date seemed skewed in favour of what was taken to be the common law approach, namely, that invalidity operates from the date of the impugned decision.” (emphasis added)

9                     It is clear from the language of s 16(1)(a) that the Court has a wide discretion to select the date from which a decision is to be quashed or set aside.  In BHP Direct Reduced Iron Pty Ltd v Chief Executive Officer, Australian Customs Service (1998) 55 ALD 665 Carr J noted at 695 that the section confers “a considerable degree of flexibility on the court when it comes to framing orders”.  His Honour also observed at 695 that the date from which a particular decision should be quashed should be “that which will best do justice as between the parties and any other affected persons”: see also Wattmaster (supra) at 257-258 and the cases referred to therein. 

10                  It was submitted by Mr Niall, on behalf of the applicant, that the present case was one where the Minister had acted unlawfully in seeking to revoke the applicant’s approval.  It was submitted that she should not, therefore, suffer the consequences of such unlawful conduct and that the revocation should be set aside retrospectively. 

11                  Mr Niall relied upon certain passages in the recent decision of the High Court in Minister for Immigration and Multicultural Affairs v Bhardwaj (2002) 187 ALR 117, and in particular the observations of their Honours Gaudron and Gummow JJ at pars [46], [51] and [53].  These observations were said to be supported by the views of McHugh J at [63] and Hayne J at [132]. 

12                  In Bhardwaj Gaudron and Gummow JJ, in a joint judgment, expressed the view that it is neither necessary nor helpful to describe erroneous administrative decisions as “void”, “voidable”, “invalid”, “vitiated” or even as “nullities”.  Their Honours went on to say that there is no reason in principle why the general law should treat administrative decisions involving “jurisdictional error” as binding or having legal effect unless and until set aside.  A decision that involves “jurisdictional error” is a decision that lacks legal foundation, and is properly regarded, in law, as no decision at all. 

13                  Mr Niall submitted that the basis upon which I had set aside the Minister’s decision, that she had taken into account irrelevant considerations, was a matter that classically involved jurisdictional error:  Craig v South Australia (1995) 184 CLR 163.  Accordingly, Bhardwaj dictated that the discretion vested in the Court pursuant to s 16(1)(a) of the ADJR Act should be exercised in favour of retrospective rather than prospective nullification.

14                  Ms Kennedy, on behalf of the Minister, submitted that the starting point was that by making the order which I did, on 10 October 2002, I must be taken to have intended that the decision would be set aside prospectively and not retrospectively.  She referred to a passage in the joint judgment of Sheppard and Wilcox JJ in Wattmaster (supra) at 256 in support of that conclusion.  She also relied upon both the course taken by the Full Court in Minister for Health and Family Services v Jadwan Pty Ltd (1998) 89 FCR 478, and the subsequent judgment of North J in Jadwan Pty Ltd v Secretary, Commonwealth Department of Health & Aged Care [2002] FCA 1052 in support of that contention.

15                  During the course of argument, Ms Kennedy acknowledged that these cases were not directly in point as they dealt with the construction of orders which had been entered, and not with the powers of the Court to vary orders which were not yet final and binding.  She conceded that I had the power to vary the orders pronounced on 10 October 2002 in the manner sought by the applicant, but submitted that I should not, in the exercise of my discretion, do so. 

16                  Ms Kennedy submitted that the applicant had not demonstrated the existence of any exceptional circumstances which might warrant these orders being varied.  Moreover, she submitted that there were a number of factors which militated against a retrospective order in this case.  She noted that the scheme provided for under the Act was regulatory, and not just a scheme for the payment of monies.  Upon notice of the revocation being given, Ms Nguyen was no longer regarded by the Health Insurance Commission (“the HIC”) as an approved pharmacist.  This meant that as from 4 September 2002 she was no longer subject to a number of important provisions which regulated the conduct of approved pharmacists.  In addition, she submitted that it would be administratively difficult for the HIC to now ascertain whether the applicant had complied with those obligations under the Act in the event that a retrospective order was made.  She reminded me that the applicant’s sister had been convicted of having defrauded the Commonwealth in connection with the supply of pharmaceutical benefits at the premises, and that the applicant herself had been found guilty by the Victorian Pharmacy Board of grossly negligent behaviour in relation to her failure to supervise the running of the pharmacy. 

17                  It followed, so it was submitted, that the making of retrospective orders, in a scheme such as the present, was undesirable as it undermined the important supervisory role of the HIC.  In addition it was submitted that the making of an order with retrospective effect might serve to encourage other pharmacists who had had their approvals revoked into continuing to operate those pharmacies as though they were still approved, pending any application for judicial review.

18                  Finally, Ms Kennedy noted that the applicant had not pressed for interlocutory relief, which may have been granted, had such relief been sought, subject to the imposition of appropriate conditions.  Nor had she made the present application at the time the orders of 10 October 2002 were pronounced, a matter that was at least relevant to the issue of costs. 

19                  In my opinion, the question to be determined involves a balancing of the factors in favour of, and against, setting aside the Minister’s decision retrospectively.  As noted earlier, the discretion which s 16(1)(a) confers upon the Court is a wide one.  Among the factors which tell most strongly in favour of retrospective nullification is that the Minister’s decision involved not merely an error of law (which would still render it reviewable under the ADJR Act) but what would classically be regarded, under the general law, as jurisdictional error. 

20                  I accept that in Jadwan the Full Court chose not to set aside retrospectively a decision which was tainted because it involved the decision-maker in taking into account irrelevant considerations.  I also accept that merely because jurisdictional error has been established does not of itself lead to the making of orders having retrospective effect.  Nonetheless, the fact that jurisdictional error has been demonstrated is, in my view, a relevant matter when determining whether to nullify a decision from the date that it was purportedly made: Bhardwaj (supra). 

21                  Other factors in favour of retrospective nullification include the fact that the applicant sought an order in these terms in her written submissions, and the fact that she could have sought injunctive relief, had she wished to do so, and could thereby have achieved that objective.  Because the Court was able to provide an expedited final hearing, the issue of interlocutory relief did not arise. 

22                  I am not persuaded by any of the matters raised on behalf of the Minister in opposition to retrospective nullification.  The period during which the applicant operated the pharmacy, supposedly without an approval, but only because the Minister had unlawfully revoked it, was relatively short.  There was little risk that such regulatory supervision as the HIC might have sought to impose was in any way frustrated.  Even if there was some such risk, that was the product of the Minister’s own error.  I can see no reason why the applicant should be deprived of her right to seek to recoup from the HIC the monies that she expended in running the pharmacy during the relevant period given that the revocation of her approval was done without legal foundation.  In accordance with the principles stated in Bhardwaj, that revocation should be properly regarded, in law, as no revocation at all.

23                  I propose therefore to vary the orders which I made on 10 October 2002 to reflect these reasons for judgment. 

24                  Each party sought the costs of this application.  It was submitted on behalf of the Minister that the applicant could have raised the difficulty regarding the form of my orders at the time that I pronounced them, thereby obviating the need for a further hearing.  It was submitted on behalf of the applicant that the Minister could have consented to a variation of those orders, thereby also obviating the need for such a hearing.  There is merit in both submissions.  In my view, the justice of the case requires that each party bear their own costs.

Associate:

Dated:              4 December 2002