FEDERAL COURT OF AUSTRALIA

Ibarcena v Huang S & W Pty Ltd t/as Woden Dental Care [2010] FCA 752

THE COURT ORDERS THAT:

1.                  The application is dismissed.

2.                  The applicant is to pay the first and second respondents’ costs of the application.

3.                  The applicant is to pay the third and fourth respondents’ costs of the application on an indemnity basis.

Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using Federal Law Search on the Court’s website.

REASONS FOR JUDGMENT

(Revised from Transcript)

1                                             On 9 February 2010, the ACT Civil and Administrative Tribunal (the Tribunal)made an order requiring the applicant, Mr Ibarcena, to pay to Huang S & W Pty Ltd trading as Woden Dental Care (WDC), the first respondent, the amount of $1,446.70 within 28 days.  The order of the Tribunal refers to “services rendered” and although the order was not accompanied by any reasons for decision, it is clear that the services referred to are dental services (which I will more fully describe later in these reasons) that were provided by or on behalf of the first respondent to the applicant in or about November 2008. 

2                                             Mr Ibarcena did not comply with the Tribunal’s order.  Presumably, it was in anticipation of the Tribunal’s order that he commenced this proceeding by application filed on 4 February 2010 against WDC (the first respondent), a director of that company, Ms Zhang (the second respondent) and Mr Mendelson (the third respondent), who was the solicitor whose company Mendelsons Lawyers Pty Ltd (Mendelsons) acted for WDC in the Tribunal.  Mendelsons is based in Victoria and it engaged an agent in the Australian Capital Territory, where WDC is based and Mr Ibarcena resides, to act in the proceeding in the Tribunal.  Mendelsons engaged Hansteins Lawyers for that purpose.  Mr Nyman (the fourth respondent) is a principal of Hansteins. 

3                                             There are various claims raised by Mr Ibarcena under the Trade Practices Act 1974(Cth) (the Act)against each of the respondents.  No statement of claim has been filed and no particulars have been provided which clearly identify the particular allegations that Mr Ibarcena makes against the various respondents.  It is clear, however, that the statutory   provisions relied upon by him are ss 51AB, 53(a), 53(bb), 53(g), 63A, 64, 75AZQ and 75AZC of the Act.  He also seeks to rely upon the cartel conduct provisions contained in Part IV, Division 1 of the Act. Mr Ibarcena claims damages from the respondents pursuant to s 82 for loss and damage he alleges he has suffered by reason of the respondents’ alleged contraventions of the Act. 

4                                             At the hearing before me there was little in the way of reasoned argument from Mr Ibarcena as to how the particular statutory provisions relied upon by him might apply in the circumstances of his case.  While it is clear that he disputes the entitlement of WDC to the sum of $1,446.70, it is not at all clear how, even if I was to accept that WDC was not entitled to that sum, this should give rise to any entitlement to the relief he claims against the various individuals who he has joined as respondents in the proceeding. 

5                                             In any event, I will take as my starting point Mr Ibarcena’s contention that he was never indebted to WDC in the amount of $1,446.70.  The claims against the respondents appear to hinge on each of them having been involved in attempts, which Mr Ibarcena from time to time describes in terms of a conspiracy, to obtain payment from him for an amount which he says he never owed and which he says the respondents had no reasonable cause to demand from him.

6                                             Mr Ibarcena had been a patient of his general practitioner, Dr Stephen Moulding for some years.  Apparently, Mr Ibarcena consulted Dr Moulding fairly regularly and Dr Moulding “bulk billed” Mr Ibarcena for medical services he provided to him.  This involved Mr Ibarcena signing forms, I infer, that had the effect of assigning to Dr Moulding any entitlement Mr Ibarcena had to a Medicare benefit in respect of Dr Moulding’s services, thereby allowing Dr Moulding to be paid by Medicare directly and avoiding the need for Mr Ibarcena to make any payment out of his own moneys to Dr Moulding. 

7                                             Dr Moulding saw Mr Ibarcena in September 2008.  He subsequently provided Mr Ibarcena with a referral, purportedly under the Medicare Chronic Disease Dental Scheme (CDDS).  The CDDS came into effect in late 2007.  The CDDS permits Medicare benefits to be paid for certain dental services provided in accordance with the Chronic Disease Management Scheme (CDMS) which was formerly known as the Enhanced Primary Care Scheme (EPC).  The CDDS was established by the Health Insurance (Dental Services) Determination of 2007 (the Determination) made under s 3C(1) of the Health Insurance Act 1973 (Cth).

8                                             The CDDS permits patients with chronic conditions and complex care needs to receive Medicare benefits for certain dental services.  To come within the CDDS, the patient must be referred to the dentist or dental prosthetist by a general practitioner who is managing a chronic medical condition under a CDMS plan.  The general practitioner determines the patient’s eligibility for a referral under the CDDS.  The referral is one of the preconditions to obtaining a CDDS Medicare benefit.

9                                             Paragraphs 6 and 9 of the Determination relevantly provide:

6.         Patient eligibility

            A person is an eligible patient if:

            (a)        the person has either:

                       (i)         a GP management plan and team care arrangements in place; or

                       (ii)        a multidisciplinary care plan to which item 731 of the general medical services table applies; and

            (b)        his or her oral health is impacting on, or is likely to impact on, his or her general health; and

            (c)        the person has been referred for a dental service under section 9; and

            (d)        the person is not an admitted patient of a hospital.

9.         Referral

            (1)        A general practitioner may refer an eligible patient for a dental service only to:

                       (a)        an eligible dentist; or

                       (b)        an eligible dental prosthetist, if the patient:

                                   (i)    has no natural teeth and requires only dental prosthetic services; or

                                   (ii)   requires only repairs or maintenance to an existing denture.

            (2)        A referral by a general practitioner must be made in the form published by the Department and described as ‘Referral Form for Dental Services under Medicare’, as existing on 1 November 2007, or a form that substantially complies with that form.

(3)        An eligible dentist who has provided a dental service to an eligible patient referred to the eligible dentist under this subsection or subsection (1), (4) or (5) may refer the patient to an eligible dentist, an eligible dental specialist or an eligible dental prosthetist for an additional dental service.

…

10                                          Thus, to be an eligible patient for the purposes of the Determination and the CDDS, various critera must be met. Relevantly, Medicare item number 721 (which is referred to as a GP Management Plan) and Medicare item number 723 (which is referred to as Team Care Arrangements) must be in place. 

11                                          The Determination includes a schedule of relevant dental services and fees.  The relevant items for current purposes appear to be item 85719 (complete maxillary and mandibular dentures) and item 85071 (diagnostic model).

12                                          Dr Moulding took steps to put in place a GP Management Plan (Medicare item number 721) and Team Care Arrangements (Medicare item number 723) which, if completed, would have ensured that Mr Ibarcena was an eligible patient for the purpose of the Determination.  Dr Moulding did not give evidence but included in the documents tendered by Mr Ibarcena is a letter written by Dr Moulding to Medicare Australia, dated 22 December 2008.  At this point in time, Mr Ibarcena was attempting to obtain payment from Medicare for the amount of $1,446.70 in respect of dental work for which he had been invoiced by WDC.  Relevantly, Dr Moulding’s letter stated:

This man [Mr Ibarcena] had an EPC item 721 done on the 4^th September 2008 at this surgery. However through either confusion or otherwise he refused to continue with a TCA item 723 at that time, although he qualified for team care of his chronic illnesses.

He then went and had $1400 worth of dental work, and of course there was no rebate as he did not stay for the TCA preparation on the 4^th September 2008.

Mr Ibarcena now states that Medicare has told him that if he gets a 723 done now then he will have the November 2008 dental fees rebated.

I find this hard to believe and if he has a 723 now I will only claim it on the date that it is performed.

In order to save wasting everyone’s time I am only prepared to do the 723 if Medicare can address me in writing, stating that Medicare will retrospectively pay a rebate for the November 2008 dental work if I do the 723 in say January 2009.

13                                          According to Dr Moulding, the steps necessary to establish a Team Care Arrangement were not completed on 4 September 2008 for the reasons he mentions in his letter.  This is confirmed by evidence from Mr Ibarcena who says that he was not prepared to complete an interview with the nurse working in Dr Moulding’s practice. 

14                                          The interview apparently involved Mr Ibarcena providing the nurse with a fairly detailed account of his medical and lifestyle history.  It was something Mr Ibarcena needed to complete if he was to be eligible for the Medicare benefit under the CDDS which he was attempting to obtain about the time Dr Moulding sent the letter of 22 December 2008.

15                                          I find that Mr Ibarcena was not eligible to receive Medicare benefits under the CDDS but that this was something not known to WDC at the time it provided dental services to Mr Ibarcena.  Mr Ibarcena’s ineligibility appears to have been a direct consequence of his refusal to do what was required of him if a Team Care Arrangement was to be put in place as recommended by Dr Moulding.  It may be that there are other reasons why Mr Ibarcena was not eligible to receive a Medicare benefit under the CDDS.  If there were any other reasons, they are not clear from the evidence.  What is clear is that Medicare Australia has declined to pay any benefit in respect of the dental services provided by WDC to Mr Ibarcena. 

16                                          That brings me to Mr Ibarcena’s dealings with WDC.  Mr Ibarcena first visited WDC in late October 2008.  There was a disagreement about the date upon which he did so, but nothing turns on this.  Mr Ibarcena gave evidence that he was first seen by Dr Chakka who is one of the dentists who worked at WDC.  He provided Mr Ibarcena with some relief for gum problems and some advice concerning Mr Ibarcena’s dentures, which Dr Chakka told him were “very poor fitting”.  Dr Chakka told Mr Ibarcena that he may need new dentures and he suggested that Mr Ibarcena consult with Mr McGuinness, a dental prosthetist, who also worked at WDC.

17                                          Dr Stephen Huang is the partner of Ms Zhang and he is also a director of WDC.  According to Mr McGuinness, Dr Huang spoke to him in relation to Mr Ibarcena shortly before Mr McGuinness’s first consultation with Mr Ibarcena, which took place the day after the initial consultation with Dr Chakka.  I accept the evidence of Mr McGuinness but, so far as the conversation I am about to relate, I received it only as evidence of an instruction given by Dr Huang to Mr McGuinness.  Mr McGuinness says that Dr Huang told him that Mr Ibarcena had brought in an EPC referral form from Dr Moulding but that as WDC did not bulk bill, Mr McGuinness needed to make Mr Ibarcena aware that he had to pay for the services and then make a claim from Medicare himself.  Mr Huang asked Mr McGuinness to explain this to Mr Ibarcena.

18                                          Mr McGuinness then saw Mr Ibarcena.  He removed and examined Mr Ibarcena’s existing dentures and advised Mr Ibarcena that he needed new upper and lower dentures.  He told Mr Ibarcena that it would be necessary for Mr Ibarcena to see him on three further occasions if Mr Ibarcena wanted him to prepare a new set of dentures.  Mr McGuinness says that he told Mr Ibarcena that Medicare do provide rebates for dentures under the EPC scheme and that he also told Mr Ibarcena that he would charge a fee that was the same as the fee set by Medicare so “… if you are able to claim back you will not be out of pocket.”  He says that he told Mr Ibarcena that he proposed to charge Mr Ibarcena $1,446.70 for his services.  Mr McGuinness also says, and I accept, that he said to Mr Ibarcena that WDC does not bulk bill and that Mr Ibarcena would need to pay the account for $1,446.70 when he was given the new dentures at the final appointment. 

19                                          When Mr Ibarcena eventually met with Mr McGuinness to collect his new dentures, he tested them and indicated to Mr McGuinness that they were a good fit and that he was happy with the feel and look of them.  Mr Ibarcena retained his old dentures.  Mr McGuinness says that he then asked Mr Ibarcena to pay for the new dentures to which Mr Ibarcena replied that he did not have any money to pay and that he needed an account to take to Medicare.  Mr McGuinness says that he reminded Mr Ibarcena that he had told Mr Ibarcena previously that he would need to pay when the new dentures were given to him but that Mr Ibarcena merely repeated that he did not have any money with which to pay for them.  Mr McGuinness says that he then arranged for Mr Ibarcena to be given an account to take to Medicare.  An invoice dated 7 November 2008 in the amount of $1,496.70 was issued by WDC reception staff.  This represented the figure mentioned by Mr McGuinness plus $50.00 in relation to Dr Chakka’s initial examination. 

20                                          Mr Ibarcena disputes Mr McGuinness’ account of their discussions but I accept that Mr McGuinness’ evidence is substantially correct. 

21                                          This brings me to Mr Ibarcena’s dealings with the receptionist at WDC whose name is Catherine Dungganon.  Her evidence was that Mr Ibarcena handed her an EPC referral form.  She says that she gave Mr Ibarcena a registration form to sign.  The registration form is in evidence.  It is signed by Mr Ibarcena and dated 30 October 2008.  That was, it would appear, the day before Mr Ibarcena first saw Mr McGuinness.  The registration form includes the following statement:

I acknowledge my responsibility for the full payment of dental care on the day of service.

22                                          Mr Ibarcena says that Ms Dungganon asked him to provide her with his Medicare card and his pension card and that she told him that WDC would “bulk bill” Medicare.  Ms Dungganon denied that she asked for Mr Ibarcena’s Medicare card or his pension card. She also denied that she told him that WDC would bulk bill Medicare.  She said that to the best of her knowledge, WDC did not bulk bill.

23                                          I do not accept Mr Ibarcena’s evidence of his conversation with Ms Dungganon.  It is not only inconsistent with the evidence of Ms Dungganon, but also the evidence of Mr McGuinness who told Mr Ibarcena that WDC would not bulk bill for their services and that he would have to pay for them himself and then lodge a claim with Medicare. 

24                                          Moreover, Mr Ibarcena says that he was issued with an invoice which he then took to Medicare to pay.  I regard this as significant.  It seems to be quite inconsistent with an understanding on his part that WDC would bulk bill Medicare for the dental services which were provided to him.  It is quite consistent with an arrangement under which he would seek payment from Medicare either before or after he had paid WDC.

25                                          Accordingly, I am satisfied that Mr Ibarcena did not receive any dental services on the basis that WDC would bulk bill Medicare.  I am satisfied that he utilised the services of WDC and obtained his new set of dentures on the basis that he would be responsible for the payment of WDC’s invoice, even though he expected that he would be able to obtain a payment from Medicare by way of reimbursement.  I am also satisfied that Mr Ibarcena is and was, at all relevant times, liable to WDC in the amount of $1,446.70, being the amount which Mr McGuinness indicated to Mr Ibarcena at their first meeting that Mr McGuinness would charge for his services.  I should note that a fresh invoice dated 11 December 2008 was given to Mr Ibarcena in lieu of the 7 November 2008 invoice for $1,496.70.  It was for the slightly reduced amount of $,1446.70 and in line with the amount referred to in the conversation between Mr McGuinness and Mr Ibarcena to which I have previously referred. 

26                                          While this proceeding is not an appeal from the Tribunal’s decision, nor an application for any form of administrative review of that decision, it necessarily involves what is in substance a collateral attack upon the validity of the Tribunal’s decision.  While I have made my own findings concerning the arrangements that were made between WDC and Mr Ibarcena, I should add that I consider that the Tribunal’s decision gave rise to an estoppel that precludes Mr Ibarcena from asserting, as against WDC, that he was not indebted to WDC for the relevant amount of $1,446.70:  see Cachia v Isaacs (1985) 3 NSWLR 366 and s 22(1) of ACT Civil and Administrative Tribunal Act 2008 (ACT). 

27                                          It follows from the findings that I have made that, whatever else may be said concerning the legal basis of Mr Ibarcena’s claims, every one of them must fail.  For completeness, however, I shall refer to a number of other matters relevant to some of the specific provisions that are referred to in the application filed by Mr Ibarcena. 

Section 51AB unconscionable conduct

28                                          Section 51AB of the Act relevantly provides:

51AB       Unconscionable conduct

                (1)   A corporation shall not, in trade or commerce, in connection with the supply or possible supply of goods or services to a person, engage in conduct that is, in all the circumstances, unconscionable.

                (2)   Without in any way limiting the matters to which the court may have regard for the purpose of determining whether a corporation has contravened subsection (1) in connection with the supply or possible supply of goods or services to a person (in this subsection referred to as the consumer), the court may have regard to:

                       (a)   the relative strengths of the bargaining positions of the corporation and the consumer;

                       (b)   whether, as a result of conduct engaged in by the corporation, the consumer was required to comply with conditions that were not reasonably necessary for the protection of the legitimate interests of the corporation;

                       (c)   whether the consumer was able to understand any documents relating to the supply or possible supply of the goods or services;

                       (d)   whether any undue influence or pressure was exerted on, or any unfair tactics were used against, the consumer or a person acting on behalf of the consumer by the corporation or a person acting on behalf of the corporation in relation to the supply or possible supply of the goods or services; and

                       (e)   the amount for which, and the circumstances under which, the consumer could have acquired identical or equivalent goods or services from a person other than the corporation.

                (3)   A corporation shall not be taken for the purposes of this section to engage in unconscionable conduct in connection with the supply or possible supply of goods or services to a person by reason only that the corporation institutes legal proceedings in relation to that supply or possible supply or refers a dispute or claim in relation to that supply or possible supply to arbitration.

29                                          In Australian Competition and Consumer Commission v Allphones Retail Pty Ltd (No 2) (2009) 253 ALR 324, Foster J noted that there is authority in this Court which establishes the following propositions concerning the operation of s 51AC of the Act.  His Honour’s observations are equally applicable to s 51AB.  At [113] his Honour said (citations omitted): 

(a)        The scope of s 51AC is wider than that of s 51AA. The meaning of unconscionable for the purposes of s 51AC is not limited to the meaning of the word according to established principles of common law and equity …

(b)        The ordinary or dictionary meaning of unconscionable, which involves notions of serious misconduct or something which is clearly unfair or unreasonable, is picked up by the use of the word in s 51AC. When used in that section, the expression requires that the actions of the alleged contravenor show no regard for conscience, and be irreconcilable with what is right or reasonable. Inevitably the expression imports a pejorative moral judgment …

(c)        Normally, some moral fault or moral responsibility would be involved. This would not ordinarily be present if the critical actions are merely negligent. There would ordinarily need to be a deliberate (in the sense of intentional) act or at least a reckless act …

30                                          I am satisfied in the present case that there is no basis for Mr Ibarcena’s contention that the first respondent, or any of the individual respondents for that matter, has engaged in, or been party to, unconscionable conduct of any kind. 

Section 64 of the act

31                                          Section 64(1) and (2A) of the Act relevantly provides:

64        Assertion of right to payment for unsolicited goods or services or for making entry in directory

(1)        A corporation shall not, in trade or commerce, assert a right to payment from a person for unsolicited goods unless the corporation has reasonable cause to believe that there is a right to payment.

(2A)     A corporation shall not, in trade or commerce, assert a right to payment from a person for unsolicited services unless the corporation has reasonable cause to believe that there is a right to payment.

32                                          Section 4 of the Act relevantly defines “unsolicited goods” and “unsolicited services” as goods sent, or services supplied, to a person “without any request made by him or her or on his or her behalf”.

33                                          I am not satisfied that the first respondent asserted a right to payment from Mr Ibarcena for unsolicited goods or services.  On the contrary, I am satisfied that Mr Ibarcena requested Mr McGuinness to provide him with a new set of dentures and that they agreed a price in advance of Mr McGuinness doing so. 

34                                          I am also satisfied that at all relevant times the first respondent had reasonable cause to believe that it had a right to obtain payment of $1,446.70 from Mr Ibarcena in relation to the services provided to him. 

Section 63A of the Act

35                                          Mr Ibarcena referred in his application and his submissions to s 63A of the Act.  Section 63A is concerned with “prescribed cards” which are credit cards, debit cards or articles that may be used as credit cards or debt cards.  Section 63A has nothing to do with the facts of this case. 

Section 53 of the Act

36                                          Mr Ibarcena also referred in his application and submissions to s 53(a), (bb) and (g), which relevantly provide:

53             False or misleading representations

                A corporation shall not, in trade or commerce, in connexion with the supply or possible supply of goods or services or in connexion with the promotion by any means of the supply or use of goods or services:

                (a)   falsely represent that goods are of a particular standard, quality, value, grade, composition, style or model or have had a particular history or particular previous use;

                …

                (bb)falsely represent that a particular person has agreed to acquire goods or services;

                …

                (g)   make a false or misleading representation concerning the existence, exclusion or effect of any condition, warranty, guarantee, right or remedy.

37                                          The case against the respondents based upon alleged contraventions of s 53(a), (bb) and (g) was not developed by Mr Ibarcena in the evidence or argument in any coherent or intelligible form.  If it is suggested by Mr Ibarcena that it was represented to him by WDC or any person acting on its behalf that he would not be liable for the costs of the services provided by Mr McGuinness, then it must follow from the earlier findings that no such case has been made out.  And if it is suggested by Mr Ibarcena that WDC or any of the other persons acting on its behalf represented that he had agreed to acquire goods or services from WDC in circumstances where no such agreement had been made, then no such case has been made out. 

Cartel Conduct – PART IV, DIVISION 1 of the act

38                                          There is not the slightest evidence to suggest that any of the respondents have been party to any arrangement or understanding that might give rise to any arguable contravention of any provisions of Part IV, Division 1 of the Act.  While Mr Ibarcena made repeated reference to these provisions during the course of his argument, he did not direct me to any evidence which would enable me to find that there was any arguable basis for his claim that there had been a contravention of these provisions.  Strictly speaking, this claim is not part of the application before the Court.  There was an amendment application filed by Mr Ibarcena which remains undetermined.  I should simply rule that leave to make an amendment to rely on the provisions of Part IV, Division 1 of the Act is refused on the basis that any such amendment would be futile.

Sections 75AZC and 75AZQ of the act

39                                          Mr Ibarcena has also relied on ss 75AZC and 75AZQ.  These sections appear in Part VC of the Act.  They create offences which provide a basis for criminal prosecution of those who breach them.  Section 82 of the Act does not confer any right to recover damages in respect of a contravention of either of these sections.  They do, however, mirror provisions found in Part V, Division 1 of the Act (namely ss 53 and 64).  I have previously dealt with these provisions insofar as they are relevant.

Individuals

40                                          So far as the individual respondents are concerned, there are a number of additional observations to be made.  Of course, in light of my finding that WDC has not been shown to have contravened any of the provisions relied upon by Mr Ibarcena, it must follow logically that none of the individual respondents can be liable for having aided and abetted or been knowingly concerned in any such contravention. 

41                                          The case against WDC and Ms Zhang was very slender indeed, particularly in light of the fact that there had previously been a hearing in the Tribunal which resulted in an order that Mr Ibarcena pay the disputed sum to WDC. 

42                                          The case against Mr Mendelson and Mr Nyman, the solicitors, never had any serious prospect of success.  There seems to have been an assumption on Mr Ibarcena’s part that all he needed to do to obtain relief against those gentlemen was to demonstrate to me that he was not indebted to WDC because WDC had agreed to bulk bill.  Mr Ibarcena never made any serious attempt to justify the serious allegations that he made against the solicitors by reference to any evidence or reasoned argument. 

43                                          The application will be dismissed.  So far as costs are concerned, the applicant is to pay the first and second respondents’ costs of the application.  He is to pay the third and fourth respondents’ cost of the application on an indemnity basis.  So far as the latter order is concerned, I am satisfied that the case is in the category identified by Sheppard J in Colgate-Palmolive Company v Cussons Pty Ltd (1993) 46 FCR 225 at 233 at numbered paragraph 5.  The case Mr Ibarcena raised against those respondents was based upon groundless allegations that should never have been made.

Associate:

Dated:         19 July 2010