Federal Court of Australia

Medical Board of Australia v Broadbent [2023] FCA 673

ORDERS

THE COURT ORDERS THAT:

1.    In so far as the respondent debtor’s application filed 15 February 2023 seeks the review of a sequestration order made by a registrar on 1 February 2023, that application be dismissed.

2.    The application filed on 15 February 2023, by the respondent debtor, otherwise be dismissed.

3.    For the avoidance of doubt, the sequestration order made by a registrar on 1 February 2023 be affirmed.

4.    The petitioning creditor’s costs of and incidental to the application filed on 15 February 2023 be taxed and paid in accordance with the Bankruptcy Act 1966 (Cth) on the footing that they form part of the petitioning creditor’s costs in respect of the creditor’s petition presented on 10 October 2022.

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

REASONS FOR JUDGMENT

(REVISED TRANSCRIPT)

LOGAN J:

1    There was a time when Mr Michael Russell Mark Broadbent (Mr Broadbent), who attained specialist qualification in surgery, might have chosen, as was once traditional in that branch of the medical profession: see Joel and Pringle, Australian Protocol and Procedures, 3rd Edition, P 430 to 431 – to have adopted the honorific “Mister” as a matter of choice. That, practice distinguished surgeons from other members of the medical profession, who as a matter of courtesy and even without the attainment of any earned doctorate, affected, and still affect, the honorific “Doctor”. As it happens and as a series of cases both in Queensland state jurisdictions and this Court reveal, Mr Broadbent chose to adopt the honorific “Doctor”.

2    These thoughts occurred in the context of reviewing, a sequestration order made by a registrar for the purpose of hearing afresh a creditor’s petition brought at the behest of the Medical Board of Australia (the Board). The material in evidence includes the result of professional conduct proceedings concerning a then Dr Broadbent before the Queensland Civil and Administrative Tribunal (QCAT). Suffice it to say, the end result of those proceedings saw Mr Broadbent deprived even of the choice of continuing the courtesy title “Doctor” because he was no longer entitled to practise as a medical practitioner.

3    That outcome has generated much litigation. The outcome, as was so very obvious in Mr Broadbent’s oral and written submissions, rankles with him to this day. He feels a sense of injustice in relation to the outcome of the proceedings before QCAT. In turn, that has for present purposes informed a basis – and it is a major basis – upon which he submits that I should exercise the discretion conferred on the court under s 52 of the Bankruptcy Act 1966 (Cth) (Bankruptcy Act) not to make a sequestration order on the Board’s petition.

4    The Board’s petition was presented on 10 October 2022. Initially, the petition was dealt with by a registrar. On 1 February 2023, a registrar ordered that Mr Broadbent’s estate be sequestrated under the Bankruptcy Act. That order noted that the date of the act of bankruptcy was 30 August 2022.

5    On 15 February 2023, Mr Broadbent filed an application by which he sought the following relief:

1.    Under Section 40(1)(g) of the Act the Applicants Counter Claim represents a valid set- off to the Creditors Judgement Debt

2.    The Claim being sufficiently arguable in monetary terms is an amount exceeding the judgement debt amount

3.    The amount claimed is mutual as between the Creditor on the Notice and the Debtor

4.    The Creditor is not the proper Creditor

5.    Review the Registrars decision of 1 February 2023

6    Appropriately, and hardly unfairly, the Board has approached the hearing of that application on the basis that the fifth of those claims should be regarded as an application under s 35A(5) of the Federal Court of Australia Act 1976 (Cth) to review the making of the sequestration order by the registrar. It will be necessary to reach some conclusions also about the other claims for relief. However, if, truly, the case were not one for the making of a sequestration order, those other claims would fall away. Further, the factual foundation of each of those other four claims overlaps with a basis upon which Mr Broadbent submitted that I should exercise a discretion not to make a sequestration order.

7    The review of a registrar’s decision is a hearing afresh on the evidence and on the law as at the time of the review: see Bechara v Bates (2021) 286 FCR 166, at [17]; see also, notably, Emmett J’s judgment in Totev v Sfar (2008) 167 FCR 193. The upshot is that it is for the Board to discharge an onus of satisfying me with proof of the matters stated in the petition, proof of the service of the petition and proof of the fact that the debt or debts on which the petitioning creditor relies is or are still owing. Further, the discretion as to whether or not to sequestrate if those proofs are present, is one which falls to be exercised afresh unaffected by whatever views may have been expressed by the registrar.

8    The debt concerned is an amalgam of two amounts which are the subject of certificates of taxation. In total, the debt is $79,468.73. The Board has proved by evidence which is not contradicted that that sum remains owing as at today. That total comprises the following:

(a)    the amount as certified owing pursuant to a costs order made in the Board’s favour by the then Federal Circuit Court of Australia on 22 May 2018 in proceeding BRG192/2014 in the amount of $43,772.96; and

(b)    an amount of $18,298.58, being the amount as certified owed by Mr Broadbent pursuant to an order for costs made in this Court in proceeding QUD287/2014 on 1 June 2018 also in favour of the Board.

9    The respective certificates of taxation have the same force and effect as an order of the court. They are within the meaning of s 40(1)(g) of the Bankruptcy Act final judgments or final orders: see Linke v TT Builders Pty Ltd (No 3) [2015] FCA 1054, at [1].

10    The occasion for those costs orders emerges from a challenge which Mr Broadbent made to a judgment of the Federal Circuit Court in the proceeding mentioned, whereby that court had refused to set aside an earlier bankruptcy notice. In the subsequent appeal, Mr Broadbent was successful: see Broadbent v Medical Board of Australia (2015) 241 FCR 419.

11    Notwithstanding that forensic success, the judge who heard and determined Mr Broadbent’s appeal, Rangiah J, determined that the costs order made in the Board’s favour by the Federal Circuit Court should not be disturbed. Further, his Honour made, in respect of the appeal, an order partially in favour of the Board, notwithstanding its ultimately unsuccessful response to the appeal.

12    Occasion for each of these orders is to be found at [100] and [101] of his Honour’s judgment. It is not necessary to set out his Honour’s reasons, only to appreciate that the proceedings concerned were as between the Board and Mr Broadbent. That is so, notwithstanding that, Rangiah J’s judgment highlights, a deficiency in an earlier costs order made by QCAT in favour of the Medical Board of Queensland which had through mishap become registered in the District Court of Queensland as a judgment in favour of the Board, ie, the Medical Board of Australia. Ultimately that mishap was corrected under the slip rule by the District Court. A subsequent appeal by Mr Broadbent against that corrective order failed: see Broadbent v Medical Board of Australia [2022] QCA 046.

13    The point for present purposes is that the saga concerning that mishap with respect to the earlier costs order is of no moment in relation to the debts upon which the Board grounded its bankruptcy notice and upon which it claims to be a creditor. There is just no doubt at all that the costs orders respectively made and subsequently certified by the Federal Circuit Court and this Court were costs orders in favour of the Board. They remain unpaid to this day. So much as to the existence of debts owed to the Board by Mr Broadbent is proved by the affidavit of Ms Monique Platt, filed on 20 October 2022, read in conjunction with a more recent affidavit made by her and filed on 28 April 2023.

14    I am satisfied also that the Board’s petition and affidavits in support thereof were served on Mr Broadbent in accordance with a substituted service order made on 23 November 2022. This is proved by reference to affidavits of Mr Dean Andrew Sawyer and Adrien Peter Robins each filed on 16 January 2023. It should be recorded in fairness to Mr Broadbent that he did not contest the subject of service. The basis of his contesting the making of a sequestration order was much more profound.

15    I am satisfied also that Mr Broadbent committed an act of bankruptcy. He failed to comply, within the time allowed, with the bankruptcy notice served on him. He did not apply to set aside that bankruptcy notice. Such an application must be made “before the expiration of the time fixed for compliance”: see s 41(6A)(b) of the Bankruptcy Act. Section 33(1)(c) of the Bankruptcy Act excludes expressly a power to extend time for compliance with a bankruptcy notice. The metes and bounds of the power to extend time are found only in s 41(6A): see as to this Winn v Boss Lawyers Pty Ltd [2021] FCA 1652.

16    Mr Broadbent has not instituted proceedings to set aside either of the costs orders upon which the bankruptcy notice was issued. He has not, therefore, engaged s 41(6A)(a). Neither, as noted, has he applied to the court within the time limited to set aside the bankruptcy notice. He has not, therefore, engaged s 41(6A)(b) of the Bankruptcy Act. It is proved that he did not comply with the bankruptcy notice.

17    In light of the foregoing, and taking into account the fresh affidavit of search, I am satisfied that the Board has made the formal proofs necessary to make a sequestration order under s 52 of the Bankruptcy Act.

18    The real question in the present case is whether, that notwithstanding, a discretion not to sequestrate should be exercised in Mr Broadbent’s favour.

19    In a sense, the foundation for his claiming the discretion should be exercised in his favour overlaps with whether the proceedings are in any event an abuse of process. The reason for that, as is put at length in argumentative passages in affidavits filed by him in the present proceeding, is that he alleges the outcome before QCAT and the subsequent prosecution of proceedings in this Court, be they the present proceedings or earlier proceedings in the Federal Circuit Court and in later appeal to this Court, is the result of what he terms corrupt conduct or a conspiracy by various persons concerned with the regulation of the medical profession in Queensland. To record as much in terms of the allegation is to highlight, necessarily, the quality of the proofs which, even prima facie, Mr Broadbent would need to demonstrate by evidence in terms of a counter-claim against the Board sufficient to warrant an exercise of a discretion not to sequestrate.

20    Mr Broadbent's task is not to prove presently that his claim will succeed. Rather, “he must establish that he has a real claim against the creditor that is likely to succeed”: see St George Bank Ltd v Helfenbaum [1999] FCA 1337, at 13. He does have a proceeding in the Supreme Court against the State of Queensland in which he claims damages in an amount of $39 million, latterly foreshadowed to be amended in an amount of $5 million, for breaches of duty. Those proceedings have lingered unprosecuted in the Supreme Court for the better part of a decade.

21    One submission made on behalf of the Board was, even assuming that there was any evidenced real chance that the proceeding was likely to succeed, the resultant judgment debt would not be a mutual one. Reference was made to the status of the Board as an incorporated body. The Board’s existence is the result of what one might term cooperative federalism. By s 4(1) of the Health Practitioner Regulation National Law Act 2009 (Qld), the Health Practitioner Regulation National Law, as set out in the schedule to that Act and as modified by Pt 4 of that Act, applies as a law of Queensland and as so applying may be referred to as the Health Practitioner Regulation National Law (Qld).

22    Regard to s 31A of the schedule, ie, the Health Practitioner Regulation National Law (Qld), discloses that the Board is a body corporate with perpetual succession: see s 31A(1)(a). However, it also discloses, significantly for present purposes, by s 31A(2) that the Board represents the State. That being so, there is no substance, in my view, in the Board’s submission as to an absence of mutuality. Mr Broadbent has a claim against the State in the Supreme Court. An emanation of the State, namely, the Board, is the petitioning creditor.

23    The real vice in relation to Mr Broadbent’s asserted counter-claim is that it does not rise beyond the level of mere allegation. In order to make good his asserted counter-claim at trial in the Supreme Court, he would, given the gravity of the allegations he makes, have to prove the case on the balance of probabilities but nonetheless taking into account observations made by Sir Owen Dixon in Briginshaw v Briginshaw (1938) 60 CLR 336. Of course, he does not need so to prove his counter-claim for present purposes in bankruptcy, but he does need, in my view, to point to evidence which, at least prima facie, would make out such a case at trial. Absent so doing, he will not have demonstrated that he has a real chance that his claim is likely to succeed.

24    Mr Broadbent's written submissions, on analysis, amounted to a rehearsal of submissions that either were, or could have been, put to QCAT in relation to the unsatisfactory professional conduct conclusions reached by QCAT. Yet further, those conclusions did not pass unchallenged in the Queensland judicial system. In evidence is the judgment of the Court of Appeal in respect of a challenge which Mr Broadbent made to QCAT’s decision in 2010: see Broadbent v Medical Board of Queensland [2010] QCA 352.

25    There were two aspects to that proceeding before the Queensland Court of Appeal. One aspect was whether or not there had been as between Mr Broadbent, by his counsel, and the Queensland Board a compromise of the proceeding insofar as it touched on penalty by an agreement on Mr Broadbent’s part to give an undertaking in the following terms:

“The Registrant having, pursuant to section 241(2)(d) of the Health Practitioners (Professional Standards) Act 1999, given an undertaking to the Tribunal in the following terms:-

‘I, Michael Russell Mark Broadbent, undertake that, the Tribunal having found that grounds for disciplinary action are established in the respects referred to by the Tribunal in its judgment delivered on 10 June 2010

(i)    I will retire permanently from medical practice;

(ii)    I will never reapply to the National Board for the Health Profession for registration in Australia as practising medical practitioner:

(iii)    I will not seek to be relieved of this undertaking

details of the undertaking be recorded in the Board’s register for the period for which the undertaking is in force pursuant to section 242(1)(b) of the Health Practitioners (Professional Standards) Act 1999.”

26    The other aspect of the case was whether or not pursuant to s 149(2) of the Queensland Civil and Administrative Tribunal Act 2009 (Qld), the Court of Appeal should grant Mr Broadbent leave to appeal against the Tribunal’s decision.

27    The leading judgment in relation to the question as to whether the court should grant leave to Mr Broadbent to pursue his leave to appeal application, notwithstanding the alleged compromise, is that of Fraser JA, with whom Chesterman JA and McMurdo J agreed. Suffice it to say, after an extensive review of authority, Fraser JA concluded that, exceptional though the granting of leave was, the interests of justice required that leave be granted to Mr Broadbent in the particular circumstances.

28    The leading judgment in respect of the leave to appeal question is that of Chesterman JA, with whom Fraser JA and McMurdo J agreed. Given the basis upon which Mr Broadbent asserts corrupt conduct or conspiracy on the part of medical regulators, it should be recorded that the reasons for judgment of Chesterman JA, contain a detailed analysis of whether or not the findings of unprofessional conduct made by QCAT were reasonably open. His Honour found that Mr Broadbent had not made out any arguable case of error of fact in the Tribunal’s findings. The end result was that leave to appeal was refused.

29    That outcome after a hearing on the merits and unsuccessful leave to appeal application in the State system, does not mean, axiomatically, that Mr Broadbent’s claim should be dismissed out of hand in this Court in the exercise of bankruptcy jurisdiction. As Downes J recently observed in Thompson v Lane (Trustee) [2023] FCAFC 32 at [145], with reference in particular to Ramsay Health Care Australia Pty Ltd v Compton (2017) 261 CLR 132 and Lowbeer v De Varda (2018) 264 FCR 228:

Where a question is raised as to whether a judgment or order establishes the amount truly owing to the petitioning creditor, there are two separate questions: first, whether there is a proper basis to exercise the discretion to go behind the judgment, and second, if there is, whether there is in truth and reality no debt.

Her Honour added, and, with respect, the position is, at [146]:

The discretion may be exercised where the judgment or order which comprises the debt was reached with fraud, collusion or a miscarriage of justice: Corney v Brien [1951] 84 CLR 343. However, as also recognised by the primary judge at [69] J, the circumstances in which a court may go behind a judgment are not limited to fraud, collusion or miscarriages of justice. A bankruptcy court should go behind a judgment where sufficient reason is shown for questioning whether behind the judgment there is in truth and reality a debt due to the petitioning creditor.

30    Here, the position is somewhat nuanced. On the face of things, there are debts owed to the Board as a result of the respective costs orders. Mr Broadbent’s claim is that those debts were secured by a process tainted by, as he alleges, corrupt conduct or conspiracy. Thus, if those claims were evidenced at least prima facie, the occasion would exist to exercise a discretion not to sequestrate so as not to further what was, in effect, an abuse of process. However, there is just no evidence which would raise, even prima facies, such a case.

31    Once again, the grievance which Mr Broadbent has is a grievance as to outcomes of a professional regulatory process which occurred within the then prevailing system for regulation of the medical profession in this State. Mr Broadbent and I engaged in quite a philosophical discussion as to the way in which, both by Federal provision as well as State provision, the conduct of the medical profession has been the subject of intense prescription in the post-Second World War era. Some of that prescription, as found notably in the Health Insurance Act 1973 (Cth) (Health Insurance Act), is the price the medical profession has paid for access to public funds in respect of services provided by the profession. Other aspects of regulation at State level have seen laypersons introduced as members of tribunals assessing whether alleged conduct has fallen short of satisfactory professional conduct.

32    Yet further, Mr Broadbent raised an interrogative note as to whether, truly, he had had peer review before QCAT. But the composition of the Tribunal was a subject upon which he could have sought judicial review in the State courts in the event that the Tribunal was unlawfully constituted. It is a notable feature of his application for leave to appeal to the Court of Appeal that no such argument was pressed before the Court of Appeal. Instead, what was pressed was whether the findings made as to unsatisfactory professional conduct were open.

33    I am not persuaded that Mr Broadbent has established any factual foundation sufficient to demonstrate that he has a real chance of pursuing successfully his counter-claim. I have already noted that the counter-claim has not been prosecuted in the Supreme Court for a very long time indeed.

34    Mr Broadbent also raised what he alleged to be a federal constitutional issue. If only out of an abundance of caution, I directed at an interlocutory stage that the registrar give notices to each of the Attorney-Generals for the States and self-governing Territories and the Commonwealth of the issue. No Attorney has chosen to intervene. Whilst it was difficult on the face of Mr Broadbent’s initial notice to discern a federal constitutional issue, in the course of oral submissions, he stated that his deprivation of his right to practise amounted to an acquisition of property not on just terms. I took from that that he asserted that the order made by which his registration ceased was unlawful having regard to s 51(xxxiii) of the Constitution (Cth).

35    An immediate and fatal difficulty with that asserted foundation for invalidity is that, even assuming that the removal of a right to practise could be regarded as an acquisition of property, the removal did not occur by or under a Commonwealth statute. That is so even though the scheme concerned is said to be a national law. As I have earlier observed, the scheme would better be described as a Federal scheme by which particular States and Territories choose to take up and adopt as their own law a scheme found in the legislation of, in this case, Queensland. The removal of Mr Broadbent’s right to practise his profession occurred pursuant to State law. That being so, section 51(xxxiii) of the Constitution (Cth) was not the source of legislative competence to enact the law or a source of a restriction on some other head of Commonwealth legislative competence. That means that it is unnecessary for present purposes to decide whether or not a right to practise medicine could be considered to be property or for that matter whether or not a removal of that right could be said to be an “acquisition”. I do no more than note that, in relation to the Federal aspect of the regulation of the medical profession, the alteration of a basis upon which a medical practitioner is entitled to receive assignments of Commonwealth benefits under the Health Insurance Act was not regarded as an acquisition of property on unjust terms: see Health Insurance Commission v Peverill (1994) 179 CLR 226.

36    It therefore only comes to this. I am satisfied that the act of bankruptcy alleged in the petition has been committed. I am further satisfied that the petition was duly served and that the debt upon which the petition is founded remains owing. I am not satisfied that Mr Broadbent has demonstrated that there is occasion grounded in a counter-claim or for that matter in conduct of the Board amounting to an abuse of process such that occasion has arisen to exercise nonetheless a discretion not to sequestrate.

37    Mr Broadbent's indisposition as at the time when the time for compliance with the bankruptcy notice was running should be mentioned for completeness. It is apparent from the earlier of Mr Broadbent’s affidavits that, unfortunately, in the latter half of 2022, he encountered ill health. The Bankruptcy Act is agnostic as to the reason for noncompliance within the time limited for compliance with a bankruptcy notice. It is possible, within that time, to apply to set aside a notice, as I have mentioned. However, and as the Board fairly conceded, even though occasion did not exist to set aside the bankruptcy notice based on ill health, that particular factor in conjunction with evidence which demonstrated a real chance of a likelihood of success in respect of a counter-claim would be persuasive in terms of exercising a discretion not to sequestrate. So I have in that sense taken into account the evidence introduced by Mr Broadbent in relation to his health in the latter part of 2022. It is just that for reasons which I have given he has not demonstrated occasion to exercise a discretion not to sequestrate.

38    A question has arisen in light of the conclusions which I have reached as to the appropriate consequential orders to make. In that regard, my attention has helpfully been drawn by Ms Davison of counsel to observations made by the Full Court in Bechara v Bates (2021) 286 FCR 166 (Bechara v Bates), at [150] to [154]. As was there stated, at [150]:

Therefore, if after concluding the de novo review the judge would otherwise make a sequestration order, that is, all the matters in s 52(1) are proved and no matter in s 52(2) arises to stand in the way of a conclusion that a sequestration order ought be made, the application for review will be dismissed and the exercise of delegated authority will remain operative. The Court may make this clear by affirming the order of the registrar. …

39    In this case, aside from the application for review dimension, there were other dimensions, misconceived as it transpires, in relation to an endeavour to set aside the bankruptcy notice. Taking into account that feature and what was said in Bechara v Bates, in my view, the orders should be:

(1)    Insofar as the respondent debtor’s application filed on 15 February 2023 seeks the review of a sequestration order made by a registrar on 1 February 2023, that application be dismissed.

(2)    The application filed on 15 February 2023 by the respondent debtor otherwise be dismissed.

(3)    For the avoidance of doubt, the sequestration order made by a registrar on 1 February 2023 be affirmed.

(4)    The petitioning creditor’s costs of and incidental to the application filed on 15 February 2023 be taxed and paid in accordance with the Bankruptcy Act on the footing that they form part of the petitioning creditor's costs in respect of the creditor’s petition presented on 10 October 2022.

40    In my view, the nature of an application for review of a sequestration order made by a registrar is such that the costs of satisfying the court on a review that the order should be affirmed should be part of the petitioning creditor's costs in respect of the proceedings commenced by the presentation of the creditor’s petition and taxed accordingly under the Bankruptcy Act.

Associate:    

Dated:    20 June 2023