FEDERAL COURT OF AUSTRALIA

Kitchen v Director of Professional Services Review under s 83 of the Health Insurance Act 1973 (Cth) (No 2) [2019] FCA 2022

ORDERS

THE COURT ORDERS THAT:

1.    Pursuant to s. 15 (1) of the Administrative Decisions (Judicial Review) Act 1977 (Cth), the operation of the decision of the Second Respondent of 20 November 2019 to notify the First Respondent pursuant to s. 104 (2) of the Health Insurance Act 1973 (Cth) be stayed until final determination of this proceeding or other order of the Court.

2.    Pursuant to s. 15 (1) of the Administrative Decisions (Judicial Review) Act 1977 (Cth), the operation of the decision of the First Respondent of 20 November 2019 to fully disqualify the Applicant pursuant to s. 105 (1) of the Health Insurance Act 1973 (Cth) be stayed until final determination of this proceeding or other order of the Court.

3.    The First Respondent forthwith give the Chief Executive Medicare written notice of the stay of the disqualification of the Applicant pursuant to s. 105 (1) of the Health Insurance Act 1973 (Cth).

4.    By 4.00pm on 4 December 2019 the parties provide draft case management orders to take the proceedings to final hearing.

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

REASONS FOR JUDGMENT

COLLIER J:

1    Before me is an amended interlocutory application filed in Court today by the applicant, Dr David Norman Kitchen (Dr Kitchen). Dr Kitchen seeks the following orders:

1A.    Pursuant to s 15 (1) of the Administrative Decisions (Judicial Review) Act 1977 (Cth), an order suspending the operation of the decision of the Second Respondent to notify the First Respondent pursuant to s. 104 (2) of the Health Insurance Act 1973 (Cth) (the HI Act) until final determination of this proceeding or earlier order.

1.    Pursuant to s. 15 (1) of the Administrative Decisions (Judicial Review) Act 1977 (Cth), an order suspending the operation of the decision of the First Respondent to fully disqualify the Applicant pursuant to s. 105 (1) of the Health Insurance Act 1973 (Cth) (the HI Act) until final determination of this proceeding or earlier order.

2.    An order that the First Respondent forthwith give the Chief Executive Medicare written notice of the suspension of the disqualification of the Applicant pursuant to s. 105 (1) of the HI Act.

3.    Further or alternatively, that this proceeding be set down for trial with priority.

4.    Such further or other orders or directions as may be appropriate.

2    The current application for stay of the decision of the first respondent (the Director) is referable to the amended originating application filed by Dr Kitchen yesterday. In that amended originating application, Dr Kitchen sought the following relief:

1.    Review of the conduct of the Second Respondent (the Second Respondent’s Conduct), being the holding of an inquiry or investigation pursuant to a referral made to the Second Respondent by the First Respondent under s. 93 of the Health Insurance Act 1973 (the HI Act) (the Referral) for making a decision namely a report under s. 106L of the HI Act (the Report).

2.    Review of the decision by the First Respondent to make the Referral (the Decision).

3.    Review the decision of the Second Respondent on 20 November 2019 to notify the First Respondent pursuant to s. 104(2) of the HI Act (the Notification).

4.    Review the decision of the First Respondent, pursuant to s. 105(1) of the HI Act, to fully disqualify the Applicant and give the Chief Executive Medicare written notice of the disqualification (the Disqualification).

5.    A declaration that the Second Respondent’s action in giving notice pursuant to s. 104(2) of the HI Act and the First Respondent’s action in disqualifying the Applicant pursuant to s. 105 of the HI Act are invalid and of no legal effect.

3    It is clear that the interlocutory relief currently sought is particularly referable to paragraphs 3, 4 and 5 of the amended originating application.

4    Before turning to the issues before me, it is helpful to set out relevant background facts.

background

5    Dr Kitchen is an ophthalmologist who operates the CQ Eye and Central Queensland Cataract Centre in Rockhampton and Gladstone.

6    On 19 October 2017, Dr Amanda Favilla, a delegate of the Chief Executive Medicare, wrote to Dr Kitchen, advising him of concerns in relation to Medicare servicing. In that letter Dr Favilla informed Dr Kitchen that she had conducted a review based on information then available, and was reviewing his provision of services for the period 1 February 2016 to 31 January 2017.

7    In response, Dr Kitchen provided comprehensive written submissions dated 27 November 2017.

8    On 11 December 2017, the Chief Executive Medicare requested that the Director undertake a review of the provision of services by Dr Kitchen for the period February 2016 to January 2017, for the purpose of considering whether he may have engaged in inappropriate practice within the meaning of s 82 of the HI Act. Throughout 2018, the Director investigated Dr Kitchen’s provision of services, and issued a report on 16 August 2018. In that report the Director informed Dr Kitchen that she had not made a decision under s 91 of the HI Act to take no further action in relation to the review.

9    On 14 November 2018, the Director made a referral pursuant to s 93 of the HI Act. The Director’s report required by s 93 of the HI Act found that Dr Kitchen may have engaged in inappropriate practice. The Director also established the Committee to investigate whether Dr Kitchen had engaged in inappropriate practice in providing services to patients under ten items listed in the Medicare Benefits Schedule, to attract a Medicare benefit, within the meaning of s 82 of the HI Act. The Committee consists of the following members:

•    Dr Robyn Napier, as Chairperson of the Committee;

•    Dr Richard Barry; and

•    Associate Professor John Grigg.

10    I understand that, since in or around February 2019, the Committee has investigated and that this investigation has been conducted pursuant to the Professional Services Review Scheme. The Scheme is established under Part VAA of the HI Act.

11    Section 101(2) of the HI Act provides that a Committee “must hold a hearing if it appears to the Committee that the person under review may have engaged in inappropriate practice in providing the referred services.”

12    I understand that, in the course of their investigation, the Committee has:

•    Considered a sample of 30 services performed by Dr Kitchen for each of the ten MBS items specified in the Director’s referral;

•    Taken evidence from Dr Kitchen during three sets of two-day hearings in Brisbane in May, June and July 2019; and

•    Given Dr Kitchen a written statement setting out its preliminary concerns in advance of the November hearings.

13    The Committee convened hearing dates in May (4 days), June (2 days) and July 2019 (2 days) for the purposes of its investigation. On 14 May 2019, the first day of the Committee’s hearings took place. At the hearing, Dr Napier (a member of the Committee) informed Dr Kitchen that the investigation consists of ‘randomly sampled MBS item services’, namely a sample of 300 professional services provided by Dr Kitchen to patients, arranged in 10 lists, grouped by the particular service.

14    On 15 May 2019 (the second day of the Committee’s hearings), Dr Kitchen advised the Committee that he felt unwell. Dr Napier of the Committee agreed and recommended that Dr Kitchen consult a doctor. The hearing was adjourned as a result of this.

15    On 16 May 2019, Dr Kitchen consulted Dr Ghea, a psychologist, in Rockhampton. Dr Kitchen consulted Dr Ghea on 10 further occasions in 2019.

16    On 21 May 2019, Dr Kitchen requested an adjournment of eight weeks. At the Committee’s request, Dr Kitchen supplied a report of his psychiatrist in Rockhampton, Dr Peter Rofe (Dr Rofe). The report noted that Dr Kitchen was describing symptoms “consistent with recrudescence of a previously documented major depression” and that he required time to “allow for treatment and to obtain a resolution of the major depressive component to his current presentation.” Dr Kitchen continued to work full time during this period and was considered “well enough to work” by Dr Rofe.

17    On 22 May 2019, the Committee decided to adjourn the hearing scheduled for 23 and 24 May 2019, but reserved their decision in relation to the remaining hearing days (scheduled for 4-5 June 2019 and 3-4 July 2019) pending an independent assessment of Dr Kitchen by psychiatrist Dr Derek Lovell (Dr Lovell) on 27 May 2019 in accordance with s 104(5) of the HI Act. Dr Lovell opined that Dr Kitchen was fit to participate in the Committee hearing and that Dr Kitchen suffered from a mild adjustment disorder with anxiety related to distress at his marital situation, as opposed to a major depressive disorder. Dr Lovell was of the opinion that Dr Kitchen’s symptoms did not interfere or affect his capacity to work (consulting or operating) or his ability to attend and participate in a Committee hearing. On this basis, the Committee declined Dr Kitchen’s request that the hearing be adjourned for a period of 8 weeks.

18    On 4 June 2019 (the third day of Committee hearings), Dr Kitchen sought particulars of his conduct of concern to the Committee, to enable him to know what evidence he should assemble. That application was refused on the basis that the Committee had no particulars to give.

19    The hearings continued on 5 June 2019.

20    On 27 June 2019, the Committee provided notification of four further hearing dates in September and November 2019.

21    The fifth hearing day took place on 3 July 2019. On this day, Dr Kitchen applied, under s 105A of the HI Act, for issue of a Notice to Produce to Medicare for documents showing how the samples were selected. That application was refused.

22    On 4 July 2019 (the sixth day of hearings), Dr Kitchen complained of stress and feeling bullied. He was granted a brief adjournment. Dr Kitchen became unwell, indicated that he was emotionally and physically distressed, and consulted Dr Ria Warfe (Dr Warfe). The hearing was adjourned on the basis of Dr Warfe’s medical certificate. On this occasion, Dr Napier advised ‘very strongly’ that Dr Kitchen see his doctor in Rockhampton.

23    On 10 September 2019, the Committee advised that the hearings set for 24 and 25 September 2019 had been vacated.

24     On 5 November 2019, the Committee supplied comprehensive particulars of its concerns as to the conduct of Dr Kitchen in respect of Services 24 – 30 on List 2; and all services on each of Lists 6, 8, 9 and 10.

25    On 7 November 2019, Dr Kitchen’s legal representative supplied to the Committee an expert statistician report by Dr Nan Ye regarding the lists of services which appeared to have not been randomly selected. In this letter to the Committee, Mr Russell sought an adjournment on Dr Kitchen’s behalf, to prepare a response to the comprehensive particulars.

26    On 8 November 2019, the Committee declined the adjournment, inviting Dr Kitchen to propose written responses but maintaining the need for oral hearings to continue on 20 November 2019.

27    On 13 November 2019, Dr Kitchen filed an originating application in this Court seeking review of:

    the decision of the Director to make a referral to the Committee under s 93 of the HI Act; and

    the conduct of the Committee, being the holding of an inquiry or investigation pursuant to the referral made by the Director to make a decision, namely a report under s 106L of the HI Act.

28    On 18 November 2019, the Committee adjourned the commencement of its hearings until one hour after the conclusion of Dr Kitchen’s application for an interim injunction had concluded.

29    On 19 November 2019, Dr Kitchen suffered a panic attack in the early morning (about 2.00 am). Dr Kitchen consulted Dr Rofe at 8am on 19 November 2019 and obtained a medical certificate which stated that Dr Kitchen was “unfit for work.”

30    On 20 November 2019, the parties appeared before Justice Rangiah as duty Judge. Dr Kitchen applied for an urgent interim injunction to restrain the Committee from conducting a hearing on 20 and 21 November 2019. The application was based on the Dr Kitchen’s assertion that he would be denied procedural fairness or natural justice, given that he was provided with insufficient notice of the proposed hearing (and thus was not afforded an adequate opportunity to prepare). The application for an interlocutory injunction was dismissed, on the basis that his Honour was not convinced there was a prima facie case that the applicant would be denied procedural fairness, by reason of inadequate notice of the hearing.

31    Following the hearing before Justice Rangiah, further hearings scheduled before the Committee on 21 and 22 November 2019 took place. On 20 November 2019 the lawyer for Dr Kitchen, Mr Stephen Russell, wrote to the Professional Services Review Agency (PSRA) which had day to day carriage of the operation of the Committee. The letter attached a medical certificate from Dr Rofe.

32    Relevantly the letter provided:

We refer to the proceedings before the Committee scheduled for this afternoon.

In this regard, we refer to your letter of 8 November 2019 and to the proceedings before Justice Rangiah this morning.

…

Secondly, we have just now received instructions from Dr Kitchen that he is unable to attend the hearings scheduled for this afternoon and tomorrow; he has supplied to us a certificate by Dr Rofe, which accompanies this letter.

On behalf of Dr Kitchen, we sincerely apologise for the inconvenience and disruption caused by his inability to appear before the Committee today and tomorrow. In that regard, we’re also instructed that Dr Kitchen is, in the circumstances, of course willing to provide a written response to the more general questions which the Committee wished to ask him orally.

Finally, the writer will appear before the Committee shortly, to formally seek that Dr Kitchen be excused; and also of course as a matter of courtesy.

33    The certificate of Dr Rofe provided as follows:

Doctors Certificate

This is to certify that David KITCHEN is unfit for Work from 19 November 2019 to 21 November 2019 (inclusive).

Yours Sincerely

34    I note evidence of Dr Kitchen in his affidavit dated 28 November 2019 that, following communication by Mr Russell of the decision of the duty Judge of 20 November 2019, at about 1.50pm, he was overcome by emotion, and was physically ill. Dr Kitchen also deposed that he told Mr Russell that he was unable to appear and had a medical certificate to that effect.

35    On or about 2.50 pm that day, Mr Russell arrived at the hearing before the Committee. The Committee convened at approximately 3.25 pm and Mr Russell appeared before them on behalf of Dr Kitchen. Mr Russell tendered the certificate issued by Dr Rofe and his letter dated 20 November 2019.

36    The transcript of proceedings before the Committee on 20 November 2019 included the following exchanges between Mr Russell, and Dr Napier (the Chair of the Committee):

[3.30 PM]

DR NAPIER: I declare the hearing of Professional Services Review Committee number 1157 is resumed at 3.30 pm on Wednesday, 20 November 2019. I note the persons present are the same as prior to the adjournment with the exception, we have also with us Mr Bruce Topperwien from PSR and Dr Kitchen is not present. What I note, thank you, Mr Russell, is that we've been provided with a certificate saying, "This is to certify that David Kitchen is unfit for work from 19 November 2019 to 21 November 2019 inclusive." Signed by Dr Peter Rofe, consultant psychiatrist. I will tender that in to evidence.

EXHIBIT #77 - MEDICAL CERTIFICATE BY DR PETER ROFE

DR NAPIER: We'd just like to know when did you receive notice that your client would not be attending today?

MR RUSSELL: Thank you, Dr Napier. In the circumstances can I answer that question in this way: firstly, I would also like to table the letter which I wrote to Ms Neville just before - - -

DR NAPIER: I'm sorry, Mr Russell, could you just say when did you receive actual notice that he would not be attending today?

MR RUSSELL: Yes. I'll be very brief, but please let me the answer the question in this way: I wish to tender that letter and repeat what's in it, that is I'm here today as a matter of courtesy and out of respect to the committee. I've apologised to Ms Neville and I apologise to the committee for this regrettable turn of events. Because however of the potential consequences in the act for non-appearance I would prefer not to answer any questions of that kind, Dr Napier.

DR NAPIER: You're not prepared to answer that question?

MR RUSSELL: No, thank you, I won't.

DR NAPIER: Thank you. When did you receive the certificate?

MR RUSSELL: I can say generally that I and my firm have acted with the utmost professionalism, but really in Dr Kitchen's interests I shouldn't say any more. Although I do refer in my letter, which I do have instructions to say, which is that we have just now received instructions from Dr Kitchen and so I acted immediately, but beyond saying what's in the letter, with great respect, I should not say any more I don't think.

DR NAPIER: Thank you. I note that the injunction application was dismissed by the Court today. Was the Court made aware of Dr Kitchen's non-appearance or inability to appear?

MR RUSSELL: No.

DR NAPIER: 1 thank you. As I understand there were discussions about reconvening this hearing this afternoon with the Court?

MR RUSSELL: Those discussions were not on the record, so again with respect I should not answer that question.

DR NAPIER: Okay. We’re going to continue the hearing this afternoon and on the basis that part of the act says that the person should notify the committee that he or she has a medical condition preventing him or her from appearing or from giving evidence or answering questions and we're not satisfied that the certificate fulfils the requirement, so the hearing is continuing and I would also like to put in to evidence the second notice of hearing which was dated 27 June 2019.

EXHIBIT #78 - SECOND NOTICE OF HEARING DATED 27/06/19

DR NAPIER: Also I would like to put in to evidence our letter dated 18 November 2019 advising the resumption of a hearing one hour after the injunction application was heard and the requirement to attend this hearing at that time.

EXHIBIT #79 - LETTER DATED 18/11/19

DR NAPIER: I don't think we have anything further to consider at this time and unless you've got something further that you would like to add, Mr Russell, I think we will adjourn this hearing until a date to be set.

MR RUSSELL: Yes. Thank you very much.

DR NAPIER: Do you have anything further that you would like to add?

MR RUSSELL: Only to repeat my apology for the inconvenience and dislocation that my client's non-appearance has caused. I'm really very sorry about it.

MATTER ADJOURNED AT 3.34 PM ACCORDINGLY

37    By letter dated 20 November 2019 the Committee formally gave notice to the Director under s 104(2) of the HI Act that Dr Kitchen did not appear, by letter signed by Dr Napier in the following terms:

On 27 June 2019, Dr Kitchen was sent a 'Notice of Hearing' under section 102 of the Health Insurance Act 1973 (the Act) requiring his attendance at the hearing of PSRC 1157 at 9am on 20 November 2019.

An application was made to the Federal Court seeking a permanent injunction to prevent PSRC 1157 from continuing its investigation, and an application for an urgent temporary injunction to prevent PSRC 1157 holding its hearing on 20 and 21 November 2019. The application for the urgent temporary injunction was scheduled to be heard by the Court on 20 November 2019 at 9am.

In light of the Federal Court hearing scheduled for 9am on 20 November 2019, a Professional Services Review Case Manager, sent a further letter informing Dr Kitchen that the PSRC 1157 hearing would commence one hour after the court hearing of the application for an urgent temporary injunction concluded.

On 20 November 2019 the Federal Court dismissed the application for a temporary injunction and that hearing closed at 1:50pm. At 3:25pm, the hearing for PSRC 1157 recommenced. Dr Kitchen's legal advisers attended the hearing but Dr Kitchen failed to appear at the hearing as required by the section 102 Notice of Hearing given to him.

In accordance with section 104(2) of the Act, I am notifying you, as Director of Professional Services Review, that Dr Kitchen has failed to appear at the hearing.

38    By letter dated 20 November 2019 the Director wrote to Dr Kitchen in the following terms:

Professional Services Review Committee No. 1157 (PSRC 1157) - Failure to Attend

On 27 June 2019, you were sent a Notice of Hearing under section 102 of the Health Insurance Act 1973 (the Act) requiring your attendance at the hearing of PSRC 1157 at 9am on 20 November 2019.

An application was made to the Federal Court seeking a permanent injunction to prevent PSRC 1157 from continuing its investigation, and an application for an urgent temporary injunction to prevent PSRC 1157 holding its hearing on 20 and 21 November 2019. The application for the urgent temporary injunction was scheduled to be heard by the Court on 20 November 2019 at 9am.

In light of the Federal Court hearing scheduled for 9am on 20 November 2019, a Professional Services Review Case Manager, sent a further letter informing you that the PSRC 1157 hearing would commence one hour after the court hearing of the application for an urgent temporary injunction concluded.

On 20 November 2019 the Federal Court dismissed the application for a temporary injunction and that hearing closed at 1:50pm. At 3:25pm, the hearing for PSRC 1157 recommenced. Your legal advisers attended the hearing but you failed to appear at the hearing as required by the section 102 Notice of Hearing given to you.

I was notified of this by the Chair of PSRC 1157, Dr Robyn Napier, on 20 November 2019, as per section 104(2) of the Act.

In accordance with section 105(1) of the Act, I have notified Medicare of your failure to attend and instructed that as of midnight today, all Medicare benefits cease to be payable for services rendered or initiated by you until such time as section 104(4)(e) of the Act has occurred.

If you have any other questions regarding this matter these may be emailed to

Kylie Neville …

39    Mr Russell deposed that he received no further communication from the Committee or any representative until the receipt of an email from Ms Margaret Parker from the PSRA attaching a Notice of Disqualification from Ms Julie Quinlivan. The Notice of Disqualification fully disqualifies Dr Kitchen for the purposes of s 105 of the HI Act, disqualifying him from access to the Medicare Benefits Scheme.

40    On 21 November 2019, Russells provided a letter to Ms Kylie Neville, the lawyer representing the Committee, providing a more detailed certificate of Dr Rofe and requesting reasons for the decision to give notice, whilst objecting to same.

41    Russells provided a second letter to Ms Neville of the Committee on 21 November 2019.

42    On 25 November 2019, Dr Kitchen received a notice from the Minister of Health directing him to give a notice to parties to whom he provides provisional services. The practical effect of this direction and the Notice of Disqualification is that:

    Medicare benefits are no longer payable in respect of professional services he provides;

    Before commencing rendering any service, Dr Kitchen must give patients a copy of a notice informing them that they cannot claim a Medicare benefit in respect of the service; and

    Patients must privately pay for any services Dr Kitchen is to provide to them.

43    On the same day (25 November 2019), in a letter from Mr Bruce Topperwien (General Counsel, Professional Services Review) to Dr Kitchen’s lawyers, the Committee advised Dr Kitchen that it “is not presently minded to revoke its decision.” In particular Mr Topperwien wrote as follows:

3.    The Committee has considered the contents of your letters and the submissions you make in relation to the appropriateness of the Committee's action in notifying the Director (pursuant to s 104(2) of the Act) of Dr Kitchen's non-attendance. Having regard to the material that was before the Committee on 20 November 2019 as well as information subsequently provided, the Committee is not presently minded to revoke its decision.

4.    The Committee considers that the appropriate course of action is for Dr Kitchen to undergo a medical examination. The purpose of the medical examination is to ascertain whether Dr Kitchen is or was suffering from a medical condition which prevented him from appearing or from giving evidence or answering questions on 20 and 21 November 2019 or is likely to prevent him from appearing or giving evidence or answering questions on any future dates scheduled.

5.    The Committee has arranged for Dr Kitchen to attend an independent medical examination, the details of which are as follows:

…

10.    The Committee will consider the report from the independent medical examination in deciding whether it is appropriate for the Committee's notice under s 104(2) should be revoked.

11.    The Committee would be grateful if Dr Kitchen could please provide an affidavit which answers the following questions:

   a.    When did you contact Dr Rofe for an appointment?

   b.    How was that contact made? Are there any records of that contact?

c.    Where and when did you attend Dr Rofe? Please specify the date and time.

d.    How and in what form was the medical certificate which was provided by your    solicitors to the Committee on 20 November 2019 provided to you?

e.    When did you tell your solicitors that you had attended Dr Rofe? Please specify the date and time.

f.    When did you tell your solicitors that you had received a medical certificate from Dr Rofe? Please specify the date and time.

g.    How was the medical certificate provided to your solicitors? What was the date and time on which it was provided?

12.    The Committee will consider Dr Kitchen's affidavit in deciding whether it is appropriate for the Committee's notice under s 104(2) should be revoked.

…

44    The Committee also proposed four further hearing days, on 25-26 February 2020 and 24-25 March 2020.

consideration

45    Section 5 of the ADJR Act, pursuant to which the amended originating application has been instituted, relevantly provides:

5 Applications for review of decisions

(1)    A person who is aggrieved by a decision to which this Act applies that is made after the commencement of this Act may apply to the Federal Court or the Federal Circuit Court for an order of review in respect of the decision on any one or more of the following grounds:

(a)    that a breach of the rules of natural justice occurred in connection with the making of the decision;

…

(d)    that the decision was not authorized by the enactment in pursuance of which it was purported to be made;

…

46    Further, s 15 of the ADJR Act provides:

15 Stay of proceedings—Federal Court

(1)    The making of an application to the Federal Court under section 5 in relation to a decision does not affect the operation of the decision or prevent the taking of action to implement the decision but:

(a)    the Court or a Judge may, by order, on such conditions (if any) as it or he or she thinks fit, suspend the operation of the decision; and

…

47    Very detailed submissions were made to the Court today by the respective Counsel for the applicant and both respondents. However, at the conclusion of the hearing earlier this afternoon I put it to Counsel, and I understand all Counsel accepted, that the purpose of this judgment is to determine whether there should be a stay on decisions of the Director and the Committee made on 20 November 2019. I further understand it was common ground at the hearing that the principles to be considered on an application pursuant to s 15(1) of the ADJR Act are similar to those on an application for an interlocutory injunction, namely whether there is a serious question to be tried and, if so, the balance of convenience: see Faingold v Zammit (1984) 1 FCR 87 at 93.

48    To that extent, it is premature at this stage for me to form any conclusive views about the merits of the applicant’s case, except to the extent that it is necessary for me to do so for the purposes of the current interlocutory application for a stay.

49    I note that the evidence before the Court is, at this stage, somewhat unsatisfactory. Counsel for both the applicant and the respondents identified flaws in each other’s evidence before me. I further note, however, that the Court may accept evidence at an interlocutory level as forming a proper basis for interlocutory relief: Director, Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union [2016] FCA 1225 at [72] and authorities cited in DB Marketing Solutions Pty Ltd (formerly known as Auto Xtreme Electronics Pty Ltd) v Cause [2014] FCA 1026 at [11].

50    In summary, the balance of convenience in this case appears to require assessment of the competing interests of:

    On the one hand: Dr Kitchen, his patients and practice on the one hand, and

    On the other hand: the public interest in maintaining the integrity of the Medicare system under the HI Act.

51    The alleged prejudice Dr Kitchen, his patients and his practice will suffer if the interlocutory relief is not granted is summarised in Dr Kitchen’s affidavit of 28 November 2019, and the affidavit of his accountant Mr Alan MacKenzie (also dated 28 November 2019). This prejudice includes:

    Reference to the large number patients of Dr Kitchen’s practice (in the sum of around 3,500 in 2015 and 2016, and estimated by Dr Kitchen as being 8,000 to 10,000 per year in his affidavit filed on 14 November 2019);

    The potential effect of Dr Kitchen’s disqualification on those patients, in particular that no Medicare benefit would be payable for any professional services that he could provide, or any services that Dr Kitchen “initiates”. I note in particular Dr Kitchen’s claim that patients would not be able to claim any Medicare benefit for a hospital in which the surgery was performed by Dr Kitchen; for the anaesthetist or other practitioner who assists in the surgery; in respect of any practitioner to whom Dr Kitchen referred a patient; and for any pathology or diagnostics requested by Dr Kitchen including MRI scans and biopsies;

    The majority of Dr Kitchen’s patients are those who claim on Medicare and rely on the safety net arrangements Medicare offers to afford care, meaning patients who cannot obtain Medicare benefits will therefore be disadvantaged;

    The cancellation of surgery of Dr Kitchen’s patients following his disqualification. Dr Kitchen gave evidence that, following his disqualification, he had cancelled 30 surgeries booked for Wednesday 27 November 2019 (29 cataracts and one other procedure) and 25 surgeries booked for Thursday 28 November 2019 (all cataracts) indefinitely;

    Evidence of Dr Kitchen that one of his patients risks permanent irreversible vision loss if he does not receive surgical treatment practically immediately, and delaying the surgery of other patients increases risks or complications during surgery, loss of quality of life, and related risks;

    Evidence of Dr Kitchen that he had anticipated performing 250 eye injections between now and Christmas;

    Evidence of Dr Kitchen of the difficulty involved in accommodating all of Dr Kitchen’s patients in other practices which are accessible to his patients in central Queensland. I accept evidence of Dr Kitchen that some of his some patients are unable to travel such distances, due to age, poor vision and the costs of travel and accommodation;

    Evidence of Dr Kitchen that he was the only ophthalmologist in central Queensland who treats children’s eye conditions;

    Evidence of Dr Kitchen that other doctors may not bulk-bill patients, noting that Dr Kitchen provided services on bulk-billing terms;

    the significant financial implications of Dr Kitchen’s disqualification, on both his personal financial obligations and his company, CQ Eye Pty Ltd.

52    Counsel for the second respondent submitted that despite disruptions caused by the disqualification of Dr Kitchen, these disruptions constituted a sanction for failing to participate in the professional services review process which formed a crucial part of protecting the integrity of the publicly funded Medicare system. Mr Del Villar submitted that whilst ‘parts of Dr Kitchen’s evidence may suggest that the balance of convenience tilts in his favour’, the disruptions were not as significant nor as extensive as Dr Kitchen had alleged, and that the Court should evaluate Dr Kitchen’s evidence with some scepticism.

53    Counsel for the second respondent submitted that Dr Kitchen’s personal financial circumstances and the impact of any disqualification should be given little weight.

54    While the respondents invited me to be cautious in accepting Dr Kitchen’s evidence, at this stage I am satisfied that the potential prejudice to Dr Kitchen, his patients in Central Queensland, and his practice is such that the balance of convenience warrants a grant of relief in terms sought by Dr Kitchen. In particular, and considering the evidence as a whole, I am satisfied that there are a significant number of patients who would be adversely affected in the immediate future if Dr Kitchen remains disqualified pending resolution of his current originating application, and that irremediable prejudice could be suffered by Dr Kitchen, his patients and his practice if the stay currently sought is not granted.

55    Indeed, and notwithstanding the submissions of the respondents, I do not understand there to strong dispute of the conclusion as to where the balance of convenience lies in this case.

56    Rather, the primary case of the respondents resisting a stay is their contention that there is no serious question to be tried which supports the grant of a stay. In particular, the respondents submit that the terms of ss 104 and 105 of the HI Act do not support the construction currently advanced by Dr Kitchen in support of this application.

57    Section 104 of the HI Act provides:

Consequences of failing to appear, give evidence or answer a question when required

(1)     This section has effect if:

(a)     the notice under section 102 requires the person under review to appear at the hearing and give evidence to the Committee; and

(b)    the person under review:

(i)    fails to appear at the hearing; or

(ii)    appears at the hearing but refuses or fails to give evidence or to answer a question that the person is asked by a Committee member in the course of the hearing.

(2)     If the person under review is a practitioner, the Committee may notify the Director of the person’s failure to appear at the hearing or refusal or failure to give the evidence or to answer the question.

(3)    The Committee may, in any case:

(a)     proceed with the hearing, despite section 103, even though the person under review fails to appear or appears but refuses or fails to give evidence or to answer a question; or

(b)    propose to hold another hearing in accordance with section 102.

(4)    If the person under review subsequently:

(a)    appears at a hearing; and

(b)    gives evidence as required; and

(c)    answers every question that the person is asked by a Committee member in the course of the hearing;

then:

(d)    paragraph (3)(a) ceases to apply; and

(e)    the Committee must inform the Director that the person has appeared and given evidence and answered questions (as required).

(5)    Subsection (2) and paragraph (3)(a) do not apply if:

(a)    before the hearing takes place, the person notifies the Committee that he or she has a medical condition preventing him or her from appearing or from giving evidence or answering questions; and

(b)    the person has complied with any reasonable requirements of the Committee that he or she undergo medical examination to establish the existence and extent of the medical condition; and

(c)    the results of the medical examination indicate that the person has a medical condition preventing him or her from appearing or from giving evidence or answering questions.

(6)    Subsection (2) and paragraphs (3)(b) and (4)(c) do not apply in relation to a question if:

(a)    the person under review refuses to answer the question on the ground that the answer to the question might tend to incriminate him or her; and

(b)    the Committee believes that the answer might tend to do so.

58    Section 105 of the HI Act relevantly provides:

105 Disqualification for failing to appear, give evidence or answer a question when required

(1)    As soon as practicable after receiving a notice under subsection 104(2), the Director must:

(a)    fully disqualify the person under review; and

(b)    give the Chief Executive Medicare written notice of the disqualification.

(2)    As soon as practicable after being informed under paragraph 104(4)(e), the Director must:

(a)    revoke the disqualification; and

(b)    give the Chief Executive Medicare written notice of the revocation.

(3)    If the person under review is disqualified under subsection (1), the person may request the Committee, in writing, to hold another hearing in accordance with section 102. The Committee must comply with the request as soon as practicable.

(4)    A request under subsection (3) must be made no later than 1 month after the day on which a copy of a draft report is given to the person under subsection 106KD(3).

59    In my view there are serious questions to be tried in this case. I note in passing that argument on the part of the parties required in excess of half a Court day to be heard. Determination of the issues the subject of the amended originating application will require interpretation of ss 104 and 105 of the HI Act, and consideration of such issues as the intention of Parliament in respect of this legislation. Notwithstanding their vigorous opposition to the current interlocutory proceedings, I note that the respondents themselves recognised in their arguments that such issues as legislative intention in the terms of the HI Act will require consideration. Determination of such issues is beyond the scope of the present interlocutory proceedings. Indeed, from the submissions of the parties today, serious issues to be tried potentially include:

    The extent to which it is necessary for a person under review to be given notice that the Committee intends to notify the Director of the person’s failure to appear at the hearing or refusal or failure to give the evidence or to answer the question;

    Whether there was a breach of the rules of natural justice by the Committee in respect of the events of 20 November 2019 and the subsequent notification by the Committee to the Director;

    Whether a notification by the Committee to the Director is a “notification” if it is infected by breach of the rules of natural justice;

    Whether it is sufficient for a person under review to notify the Committee pursuant to s 104 (5)(a) of the HI Act, including orally or in writing, and in any form, at any time prior to the relevant hearing that he or she has a medical condition preventing him or her from appearing or from giving evidence or answering questions, and if so whether that enlivens s 104 (5) of the HI Act;

    The nature of the interaction between ss 104 (2), 104 (3) and 104 (5) of the HI Act; and

    Whether the letter from Mr Topperwien dated 25 November 2019 was an exercise of the power of the Committee pursuant to s 104 (5)(b), such that the power of the Committee to notify the Director pursuant to s 104 (2) had not been enlivened.

60    I am satisfied that there are both serious questions to be tried and that the balance of convenience favours Dr Kitchen, and accordingly a stay in the terms sought by Dr Kitchen is warranted.

conclusion

61    Notwithstanding their opposition to the stay sought by Dr Kitchen, the respondents did not cavil with the terms of the stay sought. In my view it is appropriate to make orders in those terms. I will also direct the parties to liaise with my Chambers in respect of a date for hearing of the amended originating application, and to provide draft case management orders for my consideration in respect of that hearing.

62    I note that no submissions were made in respect of costs. I will hear the parties in relation to this issue.

Associate:

Dated:    29 November 2019