Federal Court of Australia

National Home Doctor Service Pty Ltd v Director of Professional Services Review [2021] FCA 1381

ORDERS

THE COURT ORDERS THAT:

1.    The originating application filed on 28 July 2021 be dismissed.

2.    The applicant pay the first respondent’s costs, as agreed or taxed.

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

REASONS FOR JUDGMENT

GRIFFITHS J:

1    In the latest of a series of legal challenges, the applicant (NHDS) seeks orders quashing or setting aside the decision of the first respondent (Director) to make a referral to a Professional Services Review Committee (Committee) pursuant to s 93(1) of the Health Insurance Act 1973 (Cth) (the Act). The Committee is composed of the second to fourth respondents. NHDS also seeks declaratory and injunctive relief to prevent the Committee from proceeding with consideration of the referral.

2    These reasons are structured as follows:

(a)    Summary of background matters.

(b)    Relevant parts of the statutory scheme summarised.

(c)    Summary of the parties’ submissions on the applicant’s claim that the Director’s decision dated 2 July 2021 to refer NHDS to a Committee (Second Referral) was not made within a reasonable time and the effect of any unreasonable delay.

(d)    Consideration and determination.

(e)    What, if any, relief is appropriate.

Summary of background matters

3    The background to the matter is set out at some length in my reasons for judgment which are reported as National Home Doctor Service Pty Ltd v Director of Professional Services Review [2020] FCA 386; 276 FCR 338 (First NHDS Judgment) at [80]-[115], and need not be repeated. That proceeding resulted in the setting aside of an earlier referral by the Director to another Committee (First Referral).

4    Additional relevant background matters are set out in my second reasons for judgment, which are reported as National Home Doctor Service Pty Ltd v Director of Professional Services Review [2020] FCA 1016; 276 FCR 382 (Second NHDS Judgment) at [2]-[3], and need not be repeated.

5    During the period 1 September 2016 to 31 August 2017 (Review Period), NHDS operated an approved medical deputising service.

Prior proceedings and Second Referral

6    On 23 July 2019, the Director first purported to refer the applicant to the Committee (First Referral).

7    As noted above, the First Referral was set aside in the First NHDS Judgment published on 24 March 2020.

8    Also on 24 March 2020, the Director confirmed by way of media release that she had decided to resume her review. She notified the applicant of this decision by letter dated 2 April 2020. No explanation was provided for the delay in notifying the applicant of the decision to resume the review, but nothing turns on that in the present proceeding.

9    On 16 April 2020, the applicant confirmed to the Director that it consented to the Director reviewing the material filed by it in the proceeding which resulted in the First NHDS Judgment (the First Proceeding). Also on 16 April 2020, the Director issued to the applicant a notice to produce documents under s 89B of the Act in relation to her review (Notice to Produce). The documents requested included clinical or practice records for 560 identified patients, as well as call centre, triage and operating records maintained by the applicant relating to those patients. The records requested represented a sample of 10 patient records for each practitioner.

10    The Director also sought additional data from the Department of Health to assist in her review. Those documents included information concerning applications made by the applicant for Medicare provider numbers under the Approved Medical Deputising Service Program and related documents for each of 56 identified practitioners associated with the applicant.

11    On 9 May 2020, the applicant commenced a second proceeding in the Court in which it sought declaratory relief that s 94 of the Act prevented the Director from resuming the review (the Second Proceeding). On 17 July 2020, that application was dismissed in the Second NHDS Judgment. The Court held that s 94 did not operate to deem the Director to have made a decision to take no further action in relation to the review in circumstances where the Director had in fact made a decision within the stipulated 12 months period, albeit that the decision was subsequently ruled to have been invalidly made.

12    On 18 May 2020, the Director extended the return date for the Notice to Produce to 5:00 pm on the 21st calendar day after the making of final orders in the Second Proceeding. Once the Court made orders on 17 July 2020, the return date became 7 August 2020.

13    On 27 July 2020, on the request of the applicant, the Director extended the time for NHDS to produce documents under the Notice to Produce to 17 August 2020.

14    On 17 August 2020, the applicant produced 548 patient records in response to the Notice to Produce.

15    On 12 November 2020, the Director’s representative informed the applicant that the Director’s decision was “imminent” but unlikely to issue before 1 December 2020.

16    On 25 February 2021, the Director provided the applicant with a report entitled “Addendum to Director’s Report Made under section 89C of the Health Insurance Act 1973” setting out the reasons why she had not made a decision to take no further action pursuant to s 89C (Addendum Report).

17    On 5 March 2021, the applicant requested access to material on which the Director relied in preparing her Addendum Report, including the documents obtained from the Department of Health.

18    On 22 March 2021, the Director unilaterally extended the time to respond to the Notice to Produce to 16 June 2021. On 24 March 2021, the Director provided the applicant with documents relied on by her for the purpose of preparing the Addendum Report.

19    On 1 April 2021, the applicant provided submissions to the Director in response to her letter of 25 February 2021. Those submissions dealt with issues including delay and prejudice.

20    By way of an instrument of referral dated 2 July 2021, which was sent to the Committee on 8 July 2021 and received by the Committee on 9 July 2021, the Director purported to refer the applicant to Committee No. 1228 and to establish PSR Committee No. 1228 under ss 93 and 95 of the Act (Second Referral). The applicant contended that the better view is that the Second Referral was “made” when it was communicated to the Committee on 9 July 2021. Under s 93, a copy of the referral is required to be given to the Chief Executive Medicare and the person under review, but there is no equivalent provision requiring a “copy” to be provided to the Committee. The applicant contended that this supports an assumption that the referral is only made when the referral is provided to the Committee. Further, the applicant submitted that the decision to refer only became irrevocable upon an externally manifested communication of an irrevocable commitment to refer. That being said, the applicant acknowledged that the difference is only 7 days.

21    On 9 July 2021, the applicant received a letter dated 2 July 2021 from the Director stating that she had decided to refer the applicant to PSR Committee No. 1228. That decision and the related referral are the subject of the present judicial review challenge. Attached to the letter was, among other things, a copy of the Second Referral.

Relevant parts of the statutory scheme summarised

22    Part VAA of the Act sets out the Professional Services Review Scheme (PSR Scheme). Section 80 of the Act summarises its key features. The four tiers of the PSR Scheme are summarised in the First NHDS Judgment at [20]-[65]. I will not repeat that summary here, but will now highlight some of the key relevant provisions in the context of the present proceeding.

23    Pursuant to the PSR Scheme, the Chief Executive Medicare may request the Director to review the provision of services by a person (s 86). In this case, the Chief Executive Medicare made such a request on 28 June 2018 in relation to services provided in the Review Period.

24    The Director is then required to decide whether to undertake a review (s 88A). The Director first decided to do so in this case on 24 July 2018.

25    Following such a review, the Director has two options: to decide to take no further action, or to give the person under review a written report setting out the reasons why the Director has not made a decision to take no further action, and inviting the person to make written submissions to the Director (s 89C).

26    After receiving the submissions of the person under review, the Director again has two options: to decide to take no further action pursuant to s 91, or to refer the person under review to a Committee pursuant to s 93 (s 89C(2)). Section 93 provides:

93 Referral to a Committee

(1)    The Director may, by writing, set up a Committee in accordance with Division 4, and make a referral to the Committee to investigate whether the person under review engaged in inappropriate practice in providing the services specified in the referral.

(2)    If the referral arises from a request made by a Committee to the Director under subsection 106J(1), the Director may, instead of setting up a Committee under subsection (1), make the referral to the Committee that made the request.

(3)    Subject to this section, the content and form of a referral must comply with any guidelines made under subsection (4).

(4)    The Minister may, by legislative instrument, make guidelines about the content and form of referrals.

 (6)    If the Director makes a referral, the Director must:

(a)    prepare a written report for the Committee, in respect of the services to which the referral relates, giving reasons why the Director thinks the person under review may have engaged in inappropriate practice in providing the services; and

  (b)    attach the report to the referral.

Note:    The reasons given by the Director may relate solely to the services being rendered or initiated in circumstances that constitute a prescribed pattern of services.

(7)    Within 7 days after making the referral, the Director must give a copy of the referral and report to the Chief Executive Medicare and the person under review.

(7A)    The copy given to the person under review must be accompanied by a written notice setting out the terms of sections 102, 106H and 106K.

(7B)    The services that may be specified in the referral are any or all of the services provided by the person under review during the review period.

(7C)    Subsection (7B) is not limited by the terms of the Director's report under subparagraph 89C(1)(b)(i).

(7D)    Failure to comply with subsection (7) or (7A) does not affect the validity of the referral.

(8)    If, in the course of the review that gave rise to the referral:

(a)    the Director formed an opinion that any conduct by the person under review caused, was causing, or was likely to cause, a significant threat to the life or health of any person and sent a statement of his or her concerns to a person or body under section 106XA; or

(b)    the Director formed an opinion that the person under review failed to comply with professional standards and sent a statement of his or her concerns to an appropriate body or bodies under section 106XB;

the referral must contain a statement that the Director formed that opinion and set out the terms of the statement sent to the person, body or bodies.

(9)    The Director must disregard any opinion formed as mentioned in subsection (8) when making the referral.

27    Of central importance to the present application is s 94 of the Act. Section 94(1) states:

94 Director taken to have made a decision after 12 months

(1)    If:

(a)    the Director decides to review the provision of services by a person; and

(b)    before the end of the period of 12 months after making the decision, the Director has not:

(i)    made a decision under section 91 to take no further action in relation to the review; or

(ii)    entered into an agreement with the person under section 92 (whether or not the agreement has been ratified by the Determining Authority); or

(iii)    referred the provision of one or more of the services to a Committee;

then, the Director is taken to have made a decision at the end of that period to take no further in relation to the review.

(It may be interpolated that the Director took the view that it was not possible to enter into an agreement with NHDS under s 92 of the Act because it, as the person under review, is not a “practitioner”.)

28    Subsections 94(2) and (3) set out only three circumstances in which the Director may determine to grant an exception to the period specified in s 94(1). Those circumstances are:

(a)    if the review is suspended under s 89A(2)(b), which involves the referral of material to the Chief Executive Medicare if certain offences or civil contraventions are suspected;

(b)    because of an injunction or other court order; or

(c)    if a person fails to comply with a notice to produce (but such extension may not be longer than the period during which the person fails to comply with the requirement).

In each case, the Director must determine in writing to extend the 12 month period. There are no other discretionary reasons to extend time.

29    The Act includes numerous additional provisions which impose short and strict time limits within which particular steps have to be taken. Examples include:

(a)    if the Chief Executive Medicare requests the Director to review the provision of services during the period specified in the request, the period must fall within the two year period immediately preceding that request (s 86(2));

(b)    where the Director has received a request from the Chief Executive Medicare to review the provision of services, the Director must within one month after receiving the request decide whether or not to undertake the review (s 88A(1)), and if no such decision is made within that period, the Director is taken to have decided, at the end of that one month period, to undertake the review (s 88A(3));

(c)    following a review, the Director must either make a decision under s 91 to take no further action in relation to the review or, alternatively, provide the person under review with a written report which sets out the Director’s reasons for not making a decision under s 91 and invites the person under review to make written submissions to the Director within one month as to the action which the Director should now take (s 89C(1));

(d)    where such submissions are received by the Director, the Director must, as soon as practicable thereafter, decide which of the three options specified in s 89C(2) will be taken (s 89C(2));

(e)    if the Director decides under s 91 to take no further action in relation to a review, written notice of that decision and a written report setting out the grounds for the decision must be given by the Director to the Chief Executive Medicare and the person under review within seven days of that decision being made (s 91(2)); and

(f)    time limits are also imposed upon other relevant decision-makers under the legislative scheme, including:

(i)    a duty on the Committee to whom a referral has been made to give a final report to the Determining Authority generally within six months after the day on which the referral was received from the Director, subject to some express exceptions (s 106G(2)); and

(ii)    a duty on the Determining Authority to make a draft determination in accordance with s 106U within one month of the last day on which the person under review may make submissions in accordance with s 106SA.

The parties’ submissions summarised on the effect of unreasonable delay and whether the Second Referral was made within a reasonable time

(a) The applicant’s submissions summarised

30    It was common ground between the parties that the Director’s power to refer in s 93 was subject to an implied “reasonable time” requirement (see Second NHDS Judgment at [53]). On this basis, the applicant’s primary argument was that Director had failed to make the Second Referral under s 93 in a reasonable time, which the applicant contended vitiated the Director’s Second Referral. In the alternative, the applicant contended that the Second Referral was an unreasonable exercise of the Director’s discretion under s 93 because it was beyond a reasonable time and therefore beyond any “decisional freedom afforded by the statute”.

31    The applicant acknowledged the effect of the central finding in the Second NHDS Judgment, but it made a formal submission that, after 12 months had lapsed, the Director is deemed pursuant to s 94 of the Act to have decided to take no further action in relation to the Review.

(i) The notion of a reasonable time

32    The applicant’s submissions on this issue may be summarised as follows. What constitutes a “reasonable time” is to be determined objectively in the circumstances and will depend on all the facts and any relevant aspects of the statutory scheme (citing Thornton v Repatriation Commission (1981) 35 ALR 485 at 490-491 per Fisher J and Koon Wing Lau v Calwell [1949] HCA 65; 80 CLR 533 at 574 per Dixon J). The test is generally accepted to be whether “there are circumstances which a reasonable man might consider render this delay justified and not capricious” (Thornton at 492 and see ASP15 v Commonwealth [2016] FCAFC 145; 248 FCR 372 at [21]-[23] per Robertson, Griffiths and Bromwich JJ). If the applicant establishes a delay which calls for explanation, the persuasive onus shift to the Director to establish what that explanation was, given that those are matters within her knowledge and control (citing AQM18 v Minister for Immigration and Border Protection [2019] FCAFC 27; 268 FCR 424 at [58]-[59] per Besanko and Thawley JJ). The test effectively casts an evidentiary burden on the Director to explain why the delay was not unreasonable in the relevant sense (see ASP15 at [48]).

33    What is reasonable (and what is unreasonable) will be informed by the scope, subject and purpose of the relevant statutory provisions, so submitted the applicant.

34    The applicant’s written contentions regarding the implied requirement for the Director to make a decision under s 94(1) within a reasonable time relied heavily on caselaw relating to “legal reasonableness” in the exercise of statutory discretionary powers. It contended that legal reasonableness, or an absence of legal unreasonableness, is an essential element in the lawfulness of decision-making. The duty to make a not unreasonable decision is an implied condition on the exercise of statutory powers unless there is an affirmative basis for its exclusion or modification (citing Minister for Immigration and Citizenship v Li [2013] HCA 18; 249 CLR 332 at [88]-[92] per Gageler J and Minister for Immigration and Border Protection v SZVFW [2018] HCA 30; 264 CLR 541 at [53]-[54] per Gageler J, at [80] per Nettle and Gordon JJ and at [131]-[135] per Edelman J). There is no basis for any such exclusion here. The legal standard of reasonableness is the standard indicated by the true construction of the statute. The implication of reasonableness as a condition of the exercise of a discretionary power conferred by statute is a manifestation of the general and deeply rooted common law principle of construction that such decision-making authority as is conferred must be exercised according to law and to reason within limits set by the subject matter, scope and purposes of the statute, so submitted the applicant.

35    The applicant’s counsel (Mr J Kirk SC who appeared with Ms J Taylor) gave less emphasis to the doctrine of legal unreasonableness in oral address, perhaps recognising the limited utility of that doctrine with reference to an implied condition to make a decision within a reasonable time, as opposed to the exercise of a statutory discretionary power.

36    In oral address, Mr Kirk SC clarified that the applicant sought to use caselaw on legal unreasonableness as an illustration of a statutory implication which leads to invalidity if the condition is not met. Citing SZVFW, the applicant submitted that a decision made or action taken in purported exercise of that statutory power in breach of the standard of legal reasonableness is a decision or action which lies beyond the scope of the authority conferred by the power. The ultimate question is thus whether or not the Director’s decision was within the scope of the statutory authority conferred on her. How that abuse of statutory power manifests itself is not closed or limited by particular categories of conduct, process or outcome (see SZVFW at [81] per Nettle and Gordon JJ). Legal unreasonableness is invariably fact dependent and requires a careful evaluation of the evidence (see SZVFW at [84] per Nettle and Gordon JJ).

37    The applicant submitted that, while a legislative scheme may not specify a time limit, it may nevertheless throw light on what was intended as a reasonable time for the performance of the statutory duty in question. Factors that are likely to be relevant to what, in the context of the particular legislative scheme, was intended as a reasonable time for the performance of the duty include the following: the subject matter of the power; its statutory purpose; the importance of its exercise both to the public and to the interests of the persons it is directed to address; the nature of those interests and the likely prejudicial impact upon interest-holders of any delay; as well as the practical limitations which attend the particular exercise of the power by reason of the nature of the decision required and the preparation, investigation and considerations called for (see BMF16 v Minister for Immigration and Border Protection [2016] FCA 1530 at [23]-[25] per Bromberg J).

38    The applicant submitted that reasoning by analogy from other time limits, whether in the same statute or in analogous statutes, is a technique the Courts adopt in other contexts. For example, in the context of equitable causes of action with no statutorily defined limitation periods, Courts of Equity will, where appropriate, apply statutes of limitation for equivalent common law causes of action by analogy. In such cases, by applying the statute by analogy, the Court “must be taken also to be giving effect to the legislature’s judgment in fixing the relevant limitation period and in allowing for any exceptions to its application” (see Gerace v Auzhair Supplies Pty Ltd [2014] NSWCA 181; 87 NSWLR 435 at [70]-[71] per Meagher JA, Beazley P and Emmett JA agreeing).

39    Similarly, where injunctive or other ancillary relief is sought under various legislative provisions to which no limitation period applies, such as ss 80 or 87 of the Competition and Consumer Act 2010 (Cth), the applicant contended that the Court will apply the same limitation period (if any) as in the primary proceeding (see, for example, Mayne Nickless Ltd v Multigroup Distribution Services Pty Ltd [2001] FCA 1620; 114 FCR 108 at [53]-[55] per Wilcox, French and Drummond JJ).

40    The applicant contended that it is appropriate to adopt this approach here. It said that, in this case, s 94 provides the relevant guidance as to the outer boundary of a reasonable time in the present case, particularly when read in a statutory context which provides for various other time limitations. Unlike in ASP15, for example, in which a statutory time limit had been repealed and the Full Court found that no fixed time limit applied by analogy because the statutory time limit no longer applied, here there was no repeal of the relevant timing provisions. Rather, the Second NHDS Judgment held that s 94 does not apply because of a quirk in how the PSR Scheme operates in circumstances where the Director makes a referral in fact which is not valid in law, so submitted the applicant.

41    The applicant said that the clear purpose of s 94(1) is to encourage the Director, having decided to undertake a review, not to be dilatory in taking action of the kind referred to in s 94(1)(b). Section 94(1) encourages the Director “to act with all appropriate speed” by providing that, if none of the possible actions specified in s 94(1)(b) has been taken at the end of the relevant 12 months period, the matter “is removed from the Director’s hands altogether”: Second NHDS Judgment at [56].

42    Where s 94 applies, the Director simply cannot make a referral to a Committee after the 12 month period specified in s 94 has expired, subject to limited and tightly circumscribed exceptions. These exceptions are beyond the Director’s control: Second NHDS Judgment at [58]. Neither the Director nor the Court has a choice or a discretion to extend the time for making a referral outside of these circumstances. It does not matter if the Director has acted promptly and diligently if she does not finish her review within the 12 month period.

43    The statutory predecessor of s 94 was s 93C of the Act, which was inserted by the Health Insurance Amendment (Professional Review) Act 1999 (Cth). The applicant referred to the acceptance in the Second NHDS Judgment at [45] of their submission that concerns underlying the insertion of time limits appeared to relate to delays by the Director, as opposed to any delays created by persons under review.

44    The applicant acknowledged that various examples of time limits in the Act are set out in the Second NHDS Judgment at [45]. It submitted that the primary purpose of those time limit provisions is to encourage decision-makers, including the Director, to avoid unreasonable or unnecessary delays (Second NHDS Judgment at [46]). It can be reasonably inferred that the Parliament accepted that there are good reasons to avoid such delays and prejudice that practitioners and those employing practitioners are likely to suffer if such delays occur, so submitted the applicant.

45    For example, the applicant contended that delays in referring services provided by a person to a Committee is likely to occasion prejudice to the person and cause practical limitations in their ability to defend themselves. The effluxion of time may hamper a practitioner from recollecting and explaining the services under review. Where a corporate entity is under investigation, such as here, the effluxion of time may also hamper the entity’s ability to defend itself with respect to matters such as personnel, both because of general difficulties in recollection and because there may be personnel turnover. Some examples of the prejudice caused by delay in this case were set out in applicant’s submissions to the Director.

46    The applicant contended that the Parliamentary intent manifest in the deeming provision in section 94 would be substantially undermined if the Director is able to make a referral which is valid in fact but not in law, and is then able to take a second period of time for review which is itself longer than the statutorily prescribed limit. The statutory context includes all the provisions designed to ensure the avoidance of unreasonable delay and, in particular, should be guided by s 94.

47    Accordingly, the applicant submitted that the outer boundary for a “reasonable time” here is 12 months from the date of the resumption of the review. Even if s 94 is understood as striking a balance between competing interests (see Second NHDS Judgment at [46]), that balance was determined to be met by prescribing a limit of no more than 12 months, and quite possibly less, depending on all the circumstances. The Director exceeded that time period of time, even if a pause for the Second Proceedings is factored in. However, and in any event, a “reasonable time” was substantially less than 12 months in the present circumstances for the reasons that follow, so submitted the applicant.

48    In support of its contention that, where there has been unreasonable delay before a decision is ultimately made, that decision is invalid and vitiated, the applicant contended that the High Court has accepted that delay may vitiate a decision, even if such an outcome is rare (citing NAIS v Minister for Immigration and Multicultural Affairs [2005] HCA 77; 228 CLR 470 at [5] per Gleeson CJ and at [156] per Callinan and Heydon JJ). In that case, the Minister had contended that a breach of the duty to decide within a reasonable time attracted only the possibility of correction by mandamus and did not amount to jurisdictional error. Chief Justice Gleeson noted that the context in which delay occurs will affect any legal consequences that may flow (at [6]). Justices Callinan and Heydon similarly noted that whether delay has vitiated an administration decision depends upon various matters including the statutory framework under which the decision was to be made and the scope, objects and purposes of the relevant enactment (at [156]). It is therefore possible for delay to vitiate a decision. Mandamus is not always the only available remedy, so submitted the applicant.

49    In oral address, the applicant sought to emphasise that the legal effect of the Director’s preferred construction, namely that breach of the “reasonable time” requirement does not lead to invalidity (discussed below), was that the timing of any referral under s 93 was left entirely to the Director’s discretion, subject to a “hurry-on” from the Court by way of mandamus or injunction. The applicant submitted that it was “disharmonious” with the statutory scheme for a failure to adhere to the “reasonable time” requirement not to result in a loss of jurisdiction, which otherwise contains a “series of very careful time provisions not left to the discretion” of the statutory decision-makers including the Director.

(ii) Had a “reasonable time” passed when the Second Referral was made?

50    The applicant submitted that the Director’s actions must be considered in the context of the First Referral. The Director took the entire 12 month period allowed to make the First Referral, making the First Referral on the very last day. The applicant claimed that the Director had ample time to make inquiries and compel production of any documents that she considered she required during that initial 12 month period.

51    The applicant contended that the Director was not starting afresh after the First NHDS Judgment was handed down. The Director had the benefit of the work she had done throughout the full year prior to the First Referral. The Director also had the benefit of her involvement in the First Proceeding and her familiarisation with the materials in that proceeding (including both those materials filed by NHDS and those obtained by the Director for the purposes of that proceeding).

52    The applicant submitted that the reasons for which the First Referral was set aside — and thus the context for the further decision being required — are relevant. The First Referral was set aside because the Director failed to provide NHDS with procedural fairness. What was required after the First NHDS Judgment was for the Director to prepare a revised preliminary report under s 89C, remedying the defects identified by the Court in the First NHDS Judgment; namely, properly identifying that services provided by 56 practitioners was the focus of the review and providing information about the 15 practitioners which had been the subject of prior review by the Director. The Court in the First NHDS Judgment found (contrary to the applicant’s submissions) that it was not legally unreasonable for the Director to make a referral of 136,000 services by 56 practitioners without the Director conducting any review or investigation of any of those services or any of those practitioners (First NHDS Judgment at [120]-[123]). Yet the delay in making the Second Referral seems also to have been at least partly caused by the Director’s decision to undertake what was essentially a new inquiry and a new investigative process in circumstances where she had already taken a full twelve month period to investigate before making the First Referral. If the Director had desired to examine those patient records, she had ample opportunity to do so prior to the First Referral.

53    More generally, the applicant submitted that the delay in this case seems in significant part to be caused by inactivity and/or dilatoriness: e.g. it claimed that there are presently unexplained delays, including a six month delay from September 2020 to February 2021 and a further delay in April to June 2021.

54    The applicant accepted that it would have been appropriate for the Director to allow it the opportunity to provide her with responsive submissions within one month pursuant to s 89C(1). The Director would then have been required to make a decision as soon as practicable in accordance with s 89C(2). Allowing for time for the Director to prepare a revised preliminary report under s 89C to remedy the defects identified by the Court in the First NHDS Judgment, and allowing the Director the opportunity to provide responsive submissions within 1 month, a reasonable time here was accordingly considerably less than twelve months, so submitted the applicant.

55    The Director decided to resume her review on 24 March 2020. It was not until 26 February 2021, however, that the applicant received a letter from the Director stating that a decision had not been made under s 91 to take no further action in relation to the review, and attaching the a report setting out the reasons why. That was a delay of 11 months (or approximately 9 months if any delay caused by the Second Proceedings is factored in).

56    The Director then took over three months to make the Second Referral. The applicant submitted that there is no explanation for this delay. It urged the Court to find that that further delay was also unreasonable in the circumstances.

57    The Second Referral was made 1,107 days after the Chief Executive Medicare first requested the Director to review the provision of services by the applicant, almost three years after the Director had first decided to undertake a review of the applicant, and 472 days after the Director decided to resume her review after the First NHDS Judgment (or 405 days if a pause is allowed for the Second Proceeding). On any view, the Director took more than 12 months to make the Second Referral after the resumption of her review, so submitted the applicant.

58    The applicant submitted that the Director’s decision to refer was unreasonable if her specific actions are analysed. It added, however, that such an analysis is not necessary to reach that conclusion. Legal unreasonableness can be outcome focused. Here, it is sufficient to observe that a referral over 12 months after the First NHDS Judgment in July 2021, in respect of services rendered by practitioners between 1 September 2016 and 31 August 2017, is so unreasonable that it could not have been reached if proper reasoning had been applied in the exercise of the statutory power in the circumstances (citing Li at [85] per Hayne, Kiefel and Bell JJ and SZVFW at [81]-[82] per Nettle and Gordon JJ), so submitted the applicant.

(b) Director’s submissions summarised

59    To avoid adding unduly to the length of these reasons for judgment, I will not summarise the Director’s submissions at length. Rather, I will highlight in brief terms the Director’s primary submissions.

60    The Director acknowledged that a distinctive feature of the statutory scheme set out in Pt VAA of the Act is that it identifies several express time constraints and times within which decisions to proceed to a new stage must be made, failing which a decision not to proceed to the next stage or tier will be deemed to have been made. In addition to the provisions identified by the applicant (see [29] above), the Director drew attention to ss 106R(1) and (2), which deem the Determining Authority to have made a decision ratifying an agreement between the Director and a person under review if the Determining Authority fails to make a decision on whether to ratify (or refuse to ratify) the agreement within one month of receiving the proposed agreement.

61    The Director emphasised that s 94(1) speaks directly to the making of a referral decision under s 93(1), being the power in issue in these proceedings.

62    The Director emphasised that the effect of the Second NHDS Judgment is that the deeming provision in s 94(1) is not engaged if the Director has as a matter of fact referred the provision of one or more of the services to a Committee, even if that referral was not a valid referral under s 93(1).

63    The Director contended that a central proposition advanced by the applicant is that, where there is delay, the Act deprives the Director of jurisdiction to make a decision under s 93(1), even though that result does not follow from the express provisions dealing with delay (viz, s 94(1)). In other words, the applicant claims that the Act impliedly achieves the result that would not follow from the express provisions addressing that very topic.

64    I will not summarise the Director’s submissions as to why the Court should reject the applicant’s central proposition. They are substantially reflected in my reasons for dismissing the judicial review challenge.

65    The Director acknowledged that her review functions should be “exercised within a reasonable time”: Second NHDS Judgment at [53]. The Director added, however, that the primary submission was that the issue is not whether she is under an obligation to exercise her functions within a reasonable time; it is whether breach of that obligation is jurisdictional in the sense that, once breached, the Director loses her jurisdiction under s 93(1).

66    The Director stressed that the identification of a duty is only the first step in the analysis. The real question is whether compliance with that duty was intended to be a condition for the valid exercise of the relevant power, citing Wei v Minister for Immigration and Border Protection [2015] HCA 51; 257 CLR 22 at [24]-[26] per Gageler and Keane JJ; Hossain v Minister for Immigration and Border Protection [2018] HCA 34; 264 CLR 123 at [23]-[27] per Kiefel CJ, Gageler and Keane JJ and Maxcon Constructions Pty Ltd v Vadasz [2018] HCA 5; 264 CLR 46 at [35]-[37] per Gageler J (Edelman J agreeing at [41]).

67    The Director also submitted that the applicant had failed to establish that a reasonable time had passed before she made the Second Referral.

Consideration and determination

68    Although I accept that the Director is obliged to make a decision under s 93 within a reasonable time (see [53] of the Second NHDS Judgment), I reject the applicant’s two primary claims that:

(a)    the reasonable time limit had passed when the Director made the Second Referral; and

(b)    a failure to make a decision within a reasonable time vitiated the Director’s decision when it was ultimately made.

69    It is convenient to address those claims in reverse order.

(a) Is the Director’s ultimate decision vitiated if a reasonable time has lapsed?

70    My reasons for concluding that breach of the Director’s obligation to make a decision within a reasonable time does not result in a loss of jurisdiction under s 93(1) are as follows.

71    As the parties agreed, the issue falls to be determined with reference to ordinary principles of statutory construction, which requires appropriate consideration to be given to the text, context and purpose of the relevant statutory provisions.

72    Applying that approach, I make the following findings, which largely accord with the Director’s submissions:

(a)    Nothing in the text of the Act explicitly stipulates that a referral decision must, on pain of invalidity, be made within a reasonable time. Rather, the critical question is whether the implied requirement for the Director to make a decision under s 93 within a reasonable period of time is accompanied by an additional statutory implication that the Director loses jurisdiction to make such a decision after a reasonable time has lapsed.

(b)    The absence of express text to that effect contrasts with the express provisions of the Act stipulating specific timeframes (e.g. one month, 12 months), following expiry of which statutory consequences follow: see, for example, ss 86(2), 88A(3), 94(1) and 106R(1) and (2).

(c)    I consider that there is no warrant to imply into the Act a condition to the effect that, upon the expiry of a reasonable time, jurisdiction to refer under s 93(1) is lost. Such an implication cannot be justified where the Parliament has chosen expressly to regulate the circumstances in which jurisdiction is lost by reason of delay in this heavily regulated statutory scheme, which includes not only s 94(1) but also other express provisions which make clear whether non-compliance with a time requirement produces invalidity (see, for example, ss 106G(5) and 106TA(2)). The applicant does not suggest that the express circumstances in s 94 apply here. I accept the Director’s submissions that the applicant’s case is undermined by s 94(1), not assisted by it.

(d)    I also accept the Director’s submission that an improbable consequence of the applicant’s proposition is that she could lose jurisdiction because, although the express 12 month timeframe in s 94(1) was not reached, a “reasonable time” had nevertheless expired. Such an unlikely outcome could scarcely have been intended. In its outline of written submissions in chief, the applicant contended that the outer boundary for a reasonable time in the circumstance of this case is 12 months from the date of the resumption of the review (see [47]). Accordingly, the applicant seemed to accept that, depending upon the facts and circumstances of a particular case, the “reasonable time” might be a period less than that outer boundary. This serves to highlight the force of the Director’s submission that jurisdiction to make a referral is not lost simply because a “reasonable time” has lapsed. I do not accept that submission.

(e)    Nor is there room for such an implication to be drawn in the face of the scheme of Div 3A of Pt 7AA, which allows for only three outcomes following a review. First, the Director may decide to take no further action under s 91, if satisfied of the matters set out in that section. (The Director may also be deemed to have made such a decision by force of s 94, but the Second NHDS Judgment establishes that that provision does not apply here). Secondly, the Director may enter into an agreement with the person under review, of the kind referred to in s 92 (albeit that is the end of the matter only if the agreement is ratified (s 92A), and s 92 has no operation here because it applies only where the person under review is a “practitioner”). Thirdly, the Director may make a referral under s 93. I accept the Director’s submission that the review cannot be left unresolved. The review can result in no further action being taken only if the Director decides (or is deemed to decide) upon that course in accordance with s 91.

(f)    I accept the Director’s submission that the statutory scheme here is quite different from the scheme described in Calwell at 573-574, where an officer was empowered to do something of his or her own motion upon the occurrence of some event (i.e. without a request or application), and the position may be that that thing can only be done within a reasonable time. The statutory regime here requires the Director to decide, one way or another, on a matter raised before her. Similarly, in Plaintiff S297/2013 v Minister for Immigration and Border Protection [2014] HCA 24; 255 CLR 179, the statutory process of decision-making was enlivened by the fact that a person had made a visa application. Here, the decision-making processes required of the Director are triggered by a request made by the Chief Executive Medicare. In such cases, I consider that the obligation to decide within a reasonable time is capable of being enforced by mandamus or an injunction. It is not to the point that NHDS itself had no interest in seeking any such relief in the present circumstances. It is inapt to describe the result of the Director’s construction as leaving the timing of a referral under s 93 as entirely at the Director’s discretion. The issue is one of statutory construction, which should not be driven by the facts and circumstances of any particular case, as emphasised in the Second NHDS Judgment at [50]. Here, outside the circumstances that the Parliament has expressly covered in s 94, I accept the Director’s submission that there is no sensible reason to infer a legislative intention that delay would dictate the substantive outcome of the review (by making s 93 unavailable).

(g)    Nothing in the extrinsic materials indicates any contemplation by the Parliament that, upon expiry of a reasonable time, the Director would lose jurisdiction to make a referral decision.

(h)    It may be accepted that the task of determining whether or not there should be implied into this statutory regime a condition to the effect that jurisdiction to make a decision under s 93 is lost where a reasonable time has passed necessarily requires consideration of all relevant provisions in the statutory scheme. However, I consider that the applicant has overstated the significance of statutory provisions whose purpose is to protect the interests of persons such as itself who are regulated by the statutory scheme. True it is that those provisions are not irrelevant to the task, but they should not be overstated. In particular, it is notable that the express object of Pt VAA of the Act, as stated in s 79A, focuses upon protecting the Commonwealth and the community from misuse of the Medicare scheme, as opposed to giving primacy to protecting the rights and interests of practitioners and others who benefit professionally from the Medicare scheme.

(i)    Nor is there any reason of statutory purpose why the suggested implication should be made. It can be accepted that (as with most statutory schemes involving inquiry and decision-making) it is good policy to make decisions as soon as practicable. To make that observation does not, however, indicate whether there is also a statutory purpose that decisions not made within that time are a priori invalid. As stated in the Second NHDS Judgment at [46], there is always a question as to how far the Parliament has chosen to go in pursuing an identified purpose. I accept the Director’s submission that the policy that decisions be made within a reasonable is sufficiently achieved by the power of the Director to take into account delay as a discretionary reason not to refer, and the potential for a person under review to obtain injunctive relief or mandamus to require the Director to fulfil any duty she has to act expeditiously (see Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; 194 CLR 355 at [100] per McHugh, Gummow, Kirby and Hayne JJ). The potential availability of those remedies to compel the Director to make a decision within a reasonable time is inconsistent with the applicant’s contention that the implied time limit must have a “hard edge” because otherwise the timing of a referral under s 93 would be left entirely to the discretion of the Director.

(j)    I also accept the Director’s contention that the applicant, at least in its written submissions, has elided two quite distinct legal propositions. At [30] of its written submissions in chief, the applicant suggested that the issue of “reasonable time” is an objective fact, presumably akin to a jurisdictional fact. However, at [32]-[33] of that outline, it introduced the quite distinct area of principle relating to the exercise of statutory discretionary powers. The legal and practical distinction between the two principles is reflected in the significance of the material before the decision-maker (which is generally irrelevant in the former case, and highly relevant in the latter case) and the standard of review (in the former, the matter is generally for the Court, whereas in the latter, matters are generally for the decision-maker subject to error). The importance of maintaining the distinction between jurisdictional facts and matters going to legal unreasonableness was emphasised by Gummow ACJ and Kiefel J in Minister for Immigration and Citizenship v SZMDS [2010] HCA 16; 240 CLR 611 at [39] (in a passage referred to by French CJ in Li at [22]).

(k)    I consider that there is some force in the Director’s contention that the applicant’s motive in attempting to grasp onto legal unreasonableness cases is presumably to attempt to bring itself within the general presumption that functions must not, on pain of invalidity, be exercised in a legally unreasonable way, in circumstances where every other textual and structural indication in the Act points against delay being jurisdictional. In my view, the label of “legal unreasonableness” is of minimal utility in the particular circumstances here. It provides limited guidance in determining whether, in the exercise of statutory construction, there is an implication that jurisdiction to make a decision under s 93 evaporates if the Director does not act within a reasonable time.

73    I also accept that the Director’s submission that the applicant’s reliance on a line of authority which includes NAIS is a distraction. That line of authority is concerned with the circumstances in which delay by a judge or tribunal in giving judgment or a decision may evidence appealable error. Importantly, however, as Gleeson CJ explained at [5], “the ground of appellate intervention is the error, or the infirmity of the decision, not the delay itself”. Here, the only basis on which the decision is impugned is delay, not error said to be caused or contributed to by delay.

(b) Was there unreasonable delay before the Second Referral was made?

74    In any event, I am not persuaded the applicant has discharged its onus to demonstrate unreasonable delay on behalf of the Director in the particular circumstances here. This finding also necessarily means the applicant’s alternative argument that the referral was an unreasonable exercise of Director’s discretion under s 93 must fail.

75    The applicant carries the legal onus of establishing error: MZAPC v Minister for Immigration and Border Protection [2021] HCA 17; 95 ALJR 441 at [39] per Kiefel CJ, Gageler, Keane and Gleeson JJ and Plaintiff M64/2015 v Minister for Immigration and Border Protection [2015] HCA 50; 258 CLR 173 at [24] per French CJ, Bell, Keane and Gordon JJ.

76    While it may be accepted that, as a statement of general principle, an evidentiary onus may be enlivened on the part of the decision-maker where an applicant has provided material which suggests that there has been unreasonable delay, there is no unqualified rule to that effect (AQM18 at [59] per Besanko and Thawley JJ). In some cases, there is an “evidentiary burden” or “tactical burden” on the party who does not bear the legal onus “to adduce further evidence if the party wants to prevent an inference of fact actually being drawn in the circumstances of the case”: see Henderson v State of Queensland [2014] HCA 52; 255 CLR 1 at [90] per Gageler J. I accept, however, the Director’s contention that the mere fact that she did not provide affidavit evidence explaining the delays in this case is not necessarily fatal in circumstances where the issue of delay is adequately addressed in her reasons for making the Second Referral. Those reasons, coupled with the objective circumstances, explain the timing of the Second Referral.

77    Consistently with cases such as Thornton and ASP15, the test of unreasonableness is whether “there are circumstances which a reasonable man might consider render this delay justified and not capricious” (emphasis added). It is notable that the test is expressed as requiring the objective assessment to be conducted through the prism of a reasonable person, as opposed to the Court itself. A broad analogy might be drawn with the test for apprehended bias. Thus, in applying the test of unreasonable delay, the reasonable person should be imputed with a knowledge of all relevant matters, including the statutory context within which the delay has occurred as well as all the relevant facts and circumstances.

78    Applying the test in Thornton and ASP15, I am not satisfied that a reasonable person would conclude that the Second Referral was made at a time outside the bounds of a “reasonable” time.

79    The Director’s report under s 93(6)(b) in respect of the Second Referral explains the steps she took and the timing of the Second Referral. The following matters are referred to in the report, which a reasonable person would take into account in assessing whether the delay was justified and not capricious:

(a)    the volume of the material considered ([24], [29]-[31]);

(b)    the previous two Court proceedings ([27]-[28]), during which the review was paused (and noting that the material produced in the First Proceeding included 150 pages of affidavit evidence filed by the applicant, together with approximately 500 documents exhibited to those affidavits, including contracts, manuals, financial spreadsheets, rosters and correspondence all of which exceeded 14 ring-binder volumes of material);

(c)    more than 1300 documents produced by the Department of Health and the Australian Health Practitioner Regulation Agency ([30]); and

(d)    the broader context in which this occurred, which included the pandemic ([31]).

80    Having regard to the following matters, I consider that a reasonable person would also take into account the history and context in which the Director’s decision-making occurred which warranted her giving careful consideration to the volume of material before her:

(a)    The Director’s findings included a statement of opinion by her on a serious matter which was adverse to the applicant’s reputation, namely that a Committee could reasonably find that the applicant had knowingly, recklessly or negligently caused or permitted inappropriate practice.

(b)    The Director’s findings included a conclusion on a complex issue of law and fact, namely whether there was a possible employer-employee relationship between the applicant and its doctors, which had been the subject of extensive legal submissions in this Court, to the Director and even more extensive affidavit evidence.

(c)    The Director’s decision-making process had twice been challenged in the Court (once successfully) and, in that context, it was both prudent and understandable to proceed cautiously.

81    I accept the Director’s submission that the applicant’s contention that she was “not starting afresh” should not be overstated. It was appropriate — and possibly legally necessary — for the Director to consider afresh the voluminous material placed before her (much of which had come to her only after the First Referral), not the least because the time at which any obligation to consider the material was to be performed was the time of making the Second Referral, not the first one. Any proposition that the Director — compelled by two sets of proceedings to put a matter aside for almost a year — should not thereafter return to reconsider the extensive material before her (and consider new material that is provided) upon a resumed decision-making process is unsustainable.

82    In its reply submissions, the applicant appeared to accept that it was open to the Director to pursue new lines of enquiry in general, but it submitted that this did not mean that it was open to the Director to pursue any new lines of enquiry regardless of the amount of time involved. There is no evidence to suggest, however, that the Director adopted an approach that there was no time limit on any enquiry.

83    I reject the applicant’s claim that there are unexplained delays. The two periods identified by the applicant (see [53] above) followed the provision of detailed additional information by the applicant, preceded the making of significant statutory decisions under s 91(1) and then s 93(1), and occurred in the middle of a pandemic. The Director’s reasons also make it clear that in the course of the review she received and considered a very large volume of material.

84    It is unnecessary to decide whether a referral is made under s 93(1) when an instrument of referral is issued or, alternatively, when that instrument is received by the Committee. If the issue had to be determined, it may have been relevant to consider the Full Court’s reasoning on a similar issue, albeit in a different statutory context, in Stewart v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2020] FCAFC 196 (noting that applications for special leave to appeal have been filed in two recent Full Court decisions which applied Stewart: EPL20 v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2021] FCAFC 173 and Sillars v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2021] FCAFC 174). The reason why it is unnecessary to determine the issue here is because, as the applicant accepts, the difference in this case is only seven days.

85    I also accept the Director’s submission that there is no basis for discerning a prescriptive “12 month” rule from the “resumption” of a review (with “resumption” being a term of uncertain legal content). It is well settled that words should not be implied into a statute unless it is necessary and it is possible to “state with certainty” the words which would have been used (Zanardo & Rodriquez Sales & Services Pty Ltd v Tolevski [2013] NSWCA 449 at [21] per Leeming JA (with whom Beazley P and Tobias AJA agreed). Neither of these criteria is met in respect of NHDS’s proposed “12 month from resumption” rule. Further, great caution is needed before drawing an implication in an Act which has already addressed a matter in detail: Simon v Condran [2013] NSWCA 388; 85 NSWLR 768 at [29] per Leeming JA (with whom Macfarlan JA and Sackville AJA agreed). The Act says so expressly when specific time limits (e.g. one month, 12 months) are intended. I accept the Director’s submission that, as a matter of general principle, what is outside a “reasonable time” will turn on the circumstances of the particular case with due regard to the relevant statutory framework (see Thornton at 289, 290, 291, 292 and 294 per Fisher J).

86    Finally, I do not accept the applicant’s submission that no weight should be given to the reference in the Director’s report concerning the Second Referral to the fact that her work on the matter had to occur in the “context of the pandemic”. The applicant emphasised that the Director had not filed any evidence on this subject. It submitted that life “has gone on in the pandemic” and a mere reference to it does not, of itself, explain delay.

87    In support of this submission, after the respondent had finished its oral submissions, the applicant sought leave to tender and rely upon the Professional Services Review’s 2020-21 Annual Report. Leave was granted subject to relevance and consideration of any objection raised by the respondents in a short note to be filed subsequent to the hearing. Following further post-hearing discussions, orders were made by consent which noted that the applicant withdrew the tender of the Annual Report but an agreed statement of facts (agreed facts) was tendered (as well as short submissions on that agreed statement). The agreed facts were as follows:

1.    The redeployment of some medical staff within the Department of Health, for example due to the diversion of medical practitioners in the Department of Health away from compliance activities and into COVID-19 related roles, meant that there was a fall in the number of new referrals to PSR from June 2020 to July 2021 compared to recent years. The PSR does not instigate reviews into practitioners, it responds to requests to review from a delegate of the Chief Executive Medicare. This reduction in new work enabled the agency to focus on finalising existing matters, and consequentially there was a high number of finalised matters including several Committee reports.

2.    From 1 July 2020 to 30 June 2021, PSR successfully managed its workload despite the continued disruptions caused by COVID-19.

88    The applicant submitted that it was surprising that the Director pressed the pandemic as a reason explaining delay in circumstances where:

(a)    the Director did not refer to the pandemic as a reason for delay in her Concise Statement;

(b)    the Director did not produce evidence about the impact of the pandemic on the Director’s ability to conduct the review (apart from the brief reference to it in her report under s 93(6)(b)); and

(c)    the Director encouraged the Court to take judicial notice of potential delays.

Accordingly, the applicant contended that the agreed facts “makes plain that the pandemic cannot excuse the Director’s extended delay”.

89    I accept the Director’s submission that the agreed facts do not go to specifically the Second Referral, but rather are pitched at a higher level of generality relating to the Director’s activities more broadly. While the agreed facts state there was a reduction in new referrals to the PSR and allowed the Director to finalise existing matters (resulting in a high number of finalised matters), this is not inconsistent with the Director’s statement in the report accompanying the Second Referral to the effect of the pandemic on this particular matter. It is appropriate to take judicial notice of the fact that the pandemic has caused significant interruptions and challenges to a wide range of activities, including public administration, which have prolonged some normal decision-making processes.

90    In any event, this was only one of several matters to which the Director referred in explaining the time taken to make the Second Referral.

Appropriate relief

91    In circumstances where the applicant has failed to establish any reviewable error on the part of the Director, it is unnecessary to determine what, if any, relief might have been appropriate if the applicant had discharged its burden.

Conclusion

92    For these reasons, the originating application will be dismissed, with costs.

Associate:

Dated:    10 November 2021