FEDERAL COURT OF AUSTRALIA

Regis Aged Care Pty Ltd v Secretary, Department of Health (No 2) [2018] FCA 454

ORDERS

THE COURT DECLARES THAT:

1.    The Asset Replacement Charge, provided for by cl 7 of the Regis Residential Care and Accommodation Agreement (in the form set out at Tab A to the Amended Agreed Statement of Facts filed on 10 October 2017), is a charge prohibited by s 56-1(e) of the Aged Care Act 1997 (Cth).

THE COURT ORDERS THAT:

1.    The applicants pay the respondent’s costs of the proceeding up to and including 9 March 2018 fixed in the sum of $172,000.

2.    The parties bear their own costs in relation to the additional submissions on the appropriate form of relief in light of the Court’s reasons, incurred after 9 March 2018.

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

REASONS FOR JUDGMENT

MORTIMER J:

1    On 2 March 2018, I handed down reasons for judgment in this proceeding, together with orders requiring the parties to attempt to agree on appropriate relief, given the conclusions reached by the Court: Regis Aged Care Pty Ltd v Secretary, Department of Health [2018] FCA 177. I will refer to those as the principal reasons.

2    Orders were also made directing the parties to attempt to agree on the question of costs and, in the absence of agreement, for submissions to be made on costs as well as relief.

3    The parties agreed on the appropriate costs orders for the proceeding, given the Court’s conclusions, up to and including the date set in the orders made on 2 March 2018 for the parties to provide a joint minute of proposed orders on appropriate relief. Accordingly, those orders will be made.

4    The parties have not been able to agree on appropriate relief, nor on the costs associated with determining that relief after 9 March 2018. In accordance with the Court’s orders the parties made written submissions, which I have carefully considered.

5    I have concluded it is appropriate to grant declaratory relief, and to grant relief in terms more consistent with those submitted by Regis than the Secretary. It will be recalled there are three applicants, and I use the term Regis to cover them all: see [5] of the principal reasons.

Should any declaratory relief be granted?

6    Regis made a submission that it would be sufficient if the application were dismissed, rather than have the Court make the form of declaratory relief for which the Secretary contends. That form, Regis submits, is affected by ambiguities which render it inappropriate, and in conflict with established authority.

7    The Secretary submits that the very existence of a dispute between the parties over the appropriate form of declaratory relief illustrates why declaratory relief is necessary. She also submits that in order properly to reflect the Court’s reasoning, the declaration should refer to the Asset Replacement Charge being inconsistent with the scheme of the Aged Care Act 1997 (Cth).

8    I accept declaratory relief should be granted. Both parties contended in substance that it should be, with Regis’ secondary submission being responsive to what it saw as the difficulties with the form proposed by the Secretary.

9    The parties contend for different descriptions of what the Court has decided. It is appropriate for it to be clear what the Court has decided, and that clarity can be provided by declaratory relief.

10    Further, declaratory relief is appropriate given the administrative steps taken against Regis, to which I referred in the principal reasons at [3], and [15]-[16]. Regis having elected to bring this proceeding, and to seek declaratory relief, that relief should be granted so that the rights of the parties are clear in relation to whether the Asset Replacement Charge can be charged by Regis while it remains an approved provider under the Aged Care Act.

11    The entry on the Secretary’s website, to which I referred at [15] of the principal reasons, implies there are other approved providers who may have levied similar charges, and therefore there is also a public interest in the Court stating by way of declaratory relief what the legal position is about Regis’ charge, while it remains an approved provider.

What form should the declaratory relief take?

12    Regis submits the following form of declaratory relief is appropriate:

the Asset Replacement Charge, provided for by clause 7 of the form of Regis Residential Care and Accommodation Agreement (in the form of agreement set out as Exhibit RJJ-1 to the Affidavit of Ross James Johnston made on 28 April 2017), is prohibited by s 56-1(e) of the Aged Care Act 1997 (Cth).

13    The Secretary contends the declaration should provide:

The Court declares that the charging, by the Applicants, of the Asset Replacement Charge referred to in Clause 7 of the Regis Residential Care and Accommodation Agreement to a care recipient is inconsistent with the scheme of regulation of an approved provider’s fees and charges under the Aged Care Act 1997 (Cth) and is prohibited by the terms of s 56-1 of that Act.

14    I accept, as Regis submits by reference to the Full Court’s decision in Warramunda Village Inc v Pryde [2001] FCA 61; 105 FCR 437 at [8], that a declaration should not simply record the Court’s conclusions in summary form.

15    I also accept Regis’ submissions, by reference to two decisions of Gray J (Mees v Roads Corporation [2003] FCA 410 at [8] and Australian Competition and Consumer Commission v Francis [2004] FCA 487; 142 FCR 1 at [108]) that a declaration should not be granted so as to clarify or interpret the Court’s reasons for judgment; nor should a declaration only be comprehensible by recourse to the reasons for judgment.

16    There are many authorities emphasising the need for precision in the form used, and for a tight correlation between the impugned conduct and the language of the declaration. An example to which Regis referred is the decision of Dowsett J in Australian Competition and Consumer Commission v Danoz Direct Pty Ltd [2003] FCA 881; 60 IPR 296 at [260].

17    The approach in Warramunda was affirmed by Greenwood, Logan and Yates JJ in Australian Competition and Consumer Commission v MSY Technology Pty Ltd [2012] FCAFC 56; 201 FCR 378 at [35]. That decision also referred to Rural Press Ltd v Australian Competition and Consumer Commission [2003] HCA 75; 216 CLR 53, where Gummow, Hayne and Heydon JJ noted at [90] the close attention that should be paid to the form of proposed declarations by primary judges.

18    These cautionary statements tend against the form of declaration suggested by the Secretary. To include a bare assertion of inconsistency would be in part to summarise the Court’s conclusions, and would only be comprehensible by reference to the Court’s reasons. It is also pitched at a level of generality beyond that contemplated by the authorities.

19    How, and why, the Asset Replacement Charge is inconsistent with the scheme of the Aged Care Act and its various component parts, as explained in the principal reasons, is integral to the Court’s construction of s 56-1(e) and forms part of the Court’s analysis of the Secretary’s contention that the Asset Replacement Charge is prohibited by s 56-1(e). The analysis concerning inconsistency with the scheme supports the finding, implicit if not express in the principal reasons (see for example at [128]), that the Secretary is correct to contend that s 56-1, and s 56-1(e) in particular, impliedly prohibits the Asset Replacement Charge. It would not be possible to construe a provision as an implied prohibition of certain conduct without assessing whether that conduct would be inconsistent with the legislative scheme. If the conduct were not inconsistent with the legislative scheme, the case for any implied prohibition would be substantially weakened.

20    It is true, as Regis submits, that the Court has found the text of s 56-1(e) can be construed as expressly prohibiting the Asset Replacement Charge. Ultimately, it matters not whether the prohibition is said to be implied or express, save that for the former in my opinion a more complete level of inconsistency with the legislative scheme is required than for the latter. Otherwise, it would be difficult to draw the implication.

21    For these reasons I consider that, although the analysis of how and why the Asset Replacement Charge is inconsistent with the scheme of the Aged Care Act forms an integral part of the Court’s reasoning process, it is no more than that, and no statement about inconsistency should be included in any declaratory relief.

22    Accordingly, there will be a declaration broadly in the form proposed by Regis. I have made some minor alterations to make it more compact. It was also necessary to replace the reference to Mr Johnston’s affidavit with a reference to cl 7 as it appears in the version of the agreement annexed to the Amended Agreed Statement of Facts which was tendered under s 191 of the Evidence Act 1995 (Cth), since Exhibit RJJ-1 to the affidavit of Ross James Johnston affirmed on 28 April 2017 was not the part of Mr Johnston’s affidavit that was read into evidence.

Costs

23    Regis sought an order that the costs of its submissions on relief be paid by the Secretary, in the lump sum of $5,150.00 (including GST). I infer Regis made this submission on the basis that if its position on declaratory relief was accepted the usual principles about costs would be applied, because there had been a contest about the form of relief.

24    In contrast, the Secretary sought her costs on the basis that the failure of the parties to agree, and the consequent requirement to file submissions, was a cost that was “incidental to the Court’s disposition of the proceedings”. Therefore, irrespective of the form of orders chosen, the Secretary submitted Regis should pay her reasonable party/party costs of addressing this issue.

25    I am not prepared to uphold either of the parties’ submissions. The first step the Court required the parties to take was to attempt to reach an agreed position. That may have involved some compromise, but compromise is one of the approaches inherent in parties’ duties under s 37N(1) of the Federal Court of Australia Act 1976 (Cth), and the duties of their legal representative under s 37N(2). The Court does not make a positive finding that the parties, or their legal representatives, failed in their duties under s 37N(1) or (2), so that the duty in s 37N(4) is enlivened. Nevertheless, although it cannot be said that any party has put an unreasonable or untenable position about the appropriate form of relief, it is difficult to understand why agreement could not have been reached, other than that the parties were too entrenched in their own positions in the litigation to consider compromise on the form of orders. They are entitled to take that approach, but I see no basis for any party to be required to compensate the other, if that is the approach they elected to take. The just and appropriate order is that the parties bear their own costs of the additional submissions on the appropriate form of relief.

Associate:

Dated:    6 April 2018