Federal Court of Australia

Barnett v Minister for Health and Aged Care [2023] FCA 1139

ORDERS

THE COURT ORDERS THAT:

1.    The application be dismissed.

2.    The applicant pay the respondent’s costs in an amount to be assessed, in default of agreement, in accordance with the court’s costs practice note (gpn-costs).

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

REASONS FOR JUDGMENT

SNADEN J:

1    Thirty-four-and-a-half years ago, the applicant, Mr Barnett, made an application to the Commonwealth Department of Community Services and Health (the “Department”) for a capital assistance grant under what was then known as the “Small Nursing Homes Initiative”. On 19 July 1990, the then Commonwealth Minister in charge of the Department, the Hon Peter Staples MP (the “Minister”), decided not to grant that request.

2    That decision (the “Grant Rejection Decision”) was the subject of protracted litigation that then played out in multiple jurisdictions over the years that followed. More importantly (for present purposes), it was also the subject of a more recent application under what is known as the Commonwealth Scheme for Compensation for Detriment caused by Defective Administration (the “CDDA Scheme”).

3    I shall return to the specifics of that scheme shortly. For now, it suffices to note that, by correspondence dated 4 June 2020, Mr Barnett applied to the respondent for compensation under the CDDA Scheme in respect of detriment that he claims to have suffered as a result of the Grant Rejection Decision. By that claim (the “CDDA Claim”), he maintained that that decision was wrong and amounted to (or was otherwise the product of) defective administration for the purposes of the CDDA Scheme.

4    By correspondence dated 22 July 2021, the respondent (via a delegate) rejected the CDDA Claim. It is to that rejection (the “CDDA Decision”) that these reasons pertain. By a further amended originating application dated 3 November 2022, Mr Barnett moves under s 39B(1) and (1A) of the Judiciary Act 1903 (Cth) for prerogative and other relief directed to it. He maintains that it is a product of jurisdictional error, which this court should address on judicial review.

5    The application was scheduled for hearing in June 2024. For reasons that needn’t be particularised, there developed some need to expedite its resolution, as a result of which its hearing was brought forward to Friday, 15 September 2023 (a reality made possible by the cooperation of the parties and their representatives, for which I record the court’s gratitude). At that hearing, evidence was led in the form of two affidavits affirmed by the respondent’s solicitor, Ms Melanie Cameron McKean: one on 28 April 2022 and another on 25 August 2023. To those affidavits were attached a suite of documents. The court was additionally assisted by high-quality written and oral submissions.

6    For the reasons that follow, the application should (and will) be dismissed with costs.

Background

7    The relevant background facts are not in contest. Mr Barnett is the former proprietor of the Balwyn Private Nursing Home—a small, 14-bed aged care facility that was once located in Belgrove Avenue, Balwyn, Victoria. Until its closure in 1990, it operated with “approval” (as defined) under pt V of the National Health Act 1953 (Cth) (the “NH Act”).

8    In February 1986, Mr Barnett was granted a certificate of “Approval-in-Principle” under s 39A(3) of the NH Act, by which it was envisaged that he would expand the Belgrove Avenue facility from 14 to 30 beds. The certificate served to guarantee that, subject to conditions not presently relevant, the facility would be the subject of an “approval” under pt V once it assumed its expanded form.

9    That approval (“AIP-1”) expired in August 1987 without being actioned (which is to say, without any expansion taking place or any application for approval being made). On 23 September 1987, a second approval-in-principle—“AIP-2”—was granted under s 39A(2) of the NH Act, by which it was envisaged that the Balwyn Private Nursing Home facility would be folded into a new, 30-bed facility to be located in Banool Road, Balwyn. More specifically, it was envisaged that the 14 beds then existing at Belgrove Avenue would be “transferred” to the new premises, which would operate an additional 16 beds (bringing the total to 30).

10    On 21 April 1988, the Minister announced the creation of a “Small Nursing Homes Initiative”. The nature of that initiative (the “SNHI”) is explored in more detail below; but, for now, it suffices to note that small nursing homes—homes of 20 or fewer beds—that wished to expand in size were, under the SNHI, to be made eligible for Commonwealth grants of up to $4,000.00 per bed.

11    A few months later, on 27 July 1988, Mr Barnett was granted a third relevant approval in principle—“AIP-3”—under s 39B(5) of the NH Act. That instrument contemplated the creation of a 30-bed nursing home in High Street Road, Glen Waverley, Victoria; and certified (in effect, if not in terms) that there would be no refusal of any application for approval that might be made in respect of such a home within the period of 12 months from 14 July 1988. That certification was subject to conditions, one of which was that the Balwyn Private Nursing Home located in Belgrove Avenue would cease to operate once the High Street Road facility began.

12    On 6 February 1989, Mr Barnett made the application that would later become the subject of the Grant Refusal Decision. He sought Commonwealth funding of $120,000.00 (or $4,000.00 for each of the 30 beds that were to be operated from the then-proposed Glen Waverley premises).

13    The Glen Waverley premises were established as planned and began to operate (with approval under the NH Act) in mid-1990. The Grant Refusal Decision was made on 19 July 1990—a matter of weeks after the Glen Waverley premises commenced operation.

14    I turn to the CDDA Claim. By that claim, Mr Barnett invited the respondent to make a finding that the Grant Refusal Decision amounted to, or was otherwise a product of, defective administration (within the meaning contemplated of that term by the CDDA Scheme). He identified three reasons why that was said to be so.

15    First, Mr Barnett relied upon advice that was given to the Minister ahead of the Grant Refusal Decision by the Department’s Canberra office. That advice concerned the interrelationship between AIP-2 and AIP-3. The Minister was told that AIP-3 was directed to the “relocat[ion]” of nursing home beds that were the subject of AIP-2; rather than to the expansion of what was then the Belgrove Ave facility. On that analysis, it was said that AIP-3 did not pertain to the development of a “small nursing home”, as it was concerned with more than 20 beds, all of which had been in contemplation since before the SNHI was announced. Mr Barnett maintained that that analysis was wrong and, therefore, that it qualified as “defective administration” for the purposes of the CDDA Scheme.

16    Second, Mr Barnett maintained that the advice that the then Minister received ahead of the Grant Refusal Decision was wrong because AIP-3 was, at the time, the only approval-in-principle that existed in connection with the Balwyn Private Nursing Home facility. The others—AIP-1 and AIP-2 had, he said, both expired. Mr Barnett maintained that, to the extent that it proceeded upon the contrary contention, the advice that was given to the Minister in 1990 was wrong and, therefore, qualified as “defective administration” for the purposes of the CDDA Scheme.

17    Third, Mr Barnett relied upon overtures apparently made by the Department’s Melbourne office about the correctness of the Canberra office advice that is referred to above. It was said that the Melbourne office had called for some reconsideration of Mr Barnett’s request for funding under the SNHI; and that the ensuing failure so to reconsider ahead of the making of the Grant Refusal decision was unreasonable and, therefore, should qualify as “defective administration” for the purposes of the CDDA Scheme.

18    The CDDA Claim identified the detriment to which Mr Barnett was subjected in consequence of the defective administration so particularised. It was said that, as a consequence of the Grant Refusal Decision, he was “…unable to fulfil the [Glen Waverley] nursing home’s financial obligations, resulting in [his] bankruptcy”. The CDDA Claim did not otherwise particularise the amount of compensation sought; instead, it proposed that the respondent should make a finding as to whether there had been defective administration and, in the event that it was found that there had, that the claim should proceed separately to consider what compensation might be afforded.

19    Mr Barnett’s CDDA Claim was the subject of a written “preliminary assessment”, which assumed the form of correspondence dated 22 March 2021. That correspondence and its attachments run to nearly 300 pages. It was the subject of response from Mr Barnett (via his solicitors), which was made in the form of correspondence dated 3 May 2021. The CDDA Decision then followed. It took the form of correspondence dated 22 July 2021, which, together with its attachments, ran to more than 350 pages in length.

20    As is by now apparent, the CDDA Decision did not accept the central contentions that Mr Barnett advanced. Instead, the respondent (through the agency of a delegate) concluded that there was no defective administration inherent in or related to the Grant Refusal Decision. By the present application, that is the subject of challenge.

21    Before outlining the bases upon which the CDDA Decision proceeded, some investment should be made in describing the CDDA Scheme and this court’s jurisdiction to entertain an action of the type now pursued.

The CDDA Scheme

22    The CDDA Scheme is a non-statutory device of executive policy, which has been adopted, or is otherwise respected, by various agencies of the Commonwealth (including the present-day manifestation of the Department). Its foundational provenance or machinery inheres in a document published by the Commonwealth Department of Finance that bears the description “Resource Management Guide No. 409”.

23    That document (“RMG 409”) contains the following description of the scheme:

The CDDA Scheme is a discretionary mechanism available to non-corporate Commonwealth entities. It allows an entity to pay compensation when a person or organisation has suffered detriment as a result of the entity’s defective administration, when there is no legal requirement to make a payment.

24    The CDDA Scheme purports to operate “…on the basis of authority provided to individual portfolio ministers under the executive power of sections 61 and 64 of the Constitution”. The following extract from RMG 409 appears under the heading, “What does the CDDA Scheme do?”:

17.    The CDDA Scheme provides that if a minister or an official authorised by the minister forms an opinion that an official of the entity, acting, or purporting to act, in the course of duty, has directly caused a claimant to suffer detriment, or, conversely, prevented the claimant from avoiding detriment, due to:

•    a specific and unreasonable lapse in complying with existing administrative procedures that would normally have applied to the claimant’s circumstances

•    an unreasonable failure to institute appropriate administrative procedures to cover a claimant’s circumstances

•    giving advice to (or for) a claimant that was, in all circumstances, incorrect or ambiguous

•    an unreasonable failure to give to (or for) a claimant, the proper advice that was within the official’s power and knowledge to give (or was reasonably capable of being obtained by the official to give)

the minister or the authorised official may authorise a payment to the claimant.

18.    The CDDA Scheme is permissive, in that it does not oblige the decision-maker to approve a payment in any particular case. However, the decision to approve or refuse a payment must be publicly defensible, having regard to all the circumstances of the matter.

25    Later, under the heading “Determining defective administration”, RMG 409 makes the following observations:

46.     An unreasonable lapse or failure is one where the actions of the official(s) involved are considered to be contrary to the standards of diligence that the entity expects to be applied by reasonable officers acting in the same circumstances with the same powers and access to resources.

47.     Cases may arise where individual instances of administrative omissions or errors may not be regarded as unreasonable when considered in isolation from each other, but may constitute defective administration when considered in totality and in the context of the combined impact of the omissions or errors on the claimant.

48.     Where advice or information given to a claimant was incorrect or ambiguous, it is not necessary for an element of unreasonableness to be present for the action to fall within the definition of defective administration.

26    There is at least some reason to query whether decisions made under the CDDA Scheme are amenable to prerogative relief. As has been noted, the scheme operates at the discretion of those whom it authorises to make decisions. Save for the aspiration that such decisions “…must be publicly defensible”, the discretion to grant compensation in respect of defective administration appears otherwise to be unconstrained. The scheme operates wholly as a function of executive discretion, untethered from statutory or regulatory decree (and, therefore, on one view, unconstrained by any limits of a conferred jurisdiction).

27    Nonetheless, there is reason to suppose that decisions made under the CDDA Scheme might be amenable to prerogative relief. Under the heading “Judicial Review”, RMG 409 makes the following observation:

93.     As CDDA Scheme decisions are not made under an enactment or law, decisions are not amenable to judicial review under the Administrative Decisions (Judicial Review) Act 1977. However, they may be subject to judicial review under section 75 of the Constitution or section 39B(1) of the Judiciary Act 1903.

28    Whether or not the exercise of non-statutory executive power is amenable to prerogative relief is “a very large question”: Davis v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs (2023) 97 ALJR 214, 223 [7] (Kiefel CJ, Gageler and Gleeson JJ). Fortunately, it is not one upon which the court need here venture an opinion. Although maintaining, as a matter of formality, that that question should be answered in the negative (at least insofar as concerns decisions made about claims brought under the CDDA Scheme), the respondent accepts that the court as presently constituted will find otherwise on the strength of the full court’s reasoning in Davis v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs (2021) 288 FCR 23 (Kenny, Besanko, Griffiths, Mortimer, Charlesworth JJ).

29    Nothing more need be said, then, on the court’s jurisdiction to entertain Mr Barnett’s application. If it is the case that the CDDA Decision was tainted in ways warranting prerogative relief, the court may proceed on the basis that it has jurisdiction to grant it under s 39B of the Judiciary Act 1903 (Cth).

Principles to be applied

30    Mr Barnett seeks prerogative relief to set aside the CDDA Decision and to compel its re-determination according to law. He also seeks related declaratory relief.

31    At issue for the consideration of the court is whether the CDDA Decision was a product of jurisdictional error. As Hayne J observed in Re Refugee Review Tribunal; Ex parte Aala (2000) 204 CLR 82, 140 [160]:

The inquiry is not about whether a decision which was made in exercise of [an] authority was right or wrong on its merits. It is an inquiry about the boundaries of the power conferred.

32    By his further amended statement of claim dated 3 November 2022, Mr Barnett alleges that the CDDA Decision was tainted by jurisdictional error in two regards: specifically, that it was made without regard, or proper regard, to a number of matters that ought to have been considered; and that it gave effect to a conclusion (namely, that the Grant Refusal Decision was not a consequence of defective administration) that no decision maker, acting reasonably, could reach.

33    At the hearing of the application, senior counsel for Mr Barnett abandoned the second (and alternative) “legal unreasonableness” contention. Respectfully, that was an appropriate concession about which I needn’t say anything further.

34    As to the first species of jurisdictional error that is alleged, Mr Barnett maintains that the CDDA Decision was made without regard or proper regard to the following considerations, namely:

(1)    the object and purpose of the SNHI;

(2)    whether Mr Barnett’s application for grant funding under the SNHI met that object and that purpose;

(3)    the “intent and effect of [AIP-3], being to increase Mr Barnett’s approval from 14 beds at Belgrove Avenue to 30 bed places at High Street [Road, Glen Waverley]”;

(4)    whether the “SNHI circular” (to which attention will shortly turn) was binding upon the Minister at the time of the Grant Refusal Decision;

(5)    the object and purpose of the CDDA Scheme; and

(6)    whether the Grant Refusal Decision amounted to defective administration for the purposes of the CDDA Scheme.

35    Mr Barnett contends that the respondent’s failure to take account of those matters in the making of the CDDA Decision amounts to a constructive failure to exercise the jurisdiction conferred upon him under the CDDA Scheme.

The SNHI, the NH Act and the Grant Refusal Decision

36    Before considering the CDDA Decision, some investment should be made in understanding the nature and operation of the SNHI.

37    The SNHI was the subject of public announcement in April 1988. More than a year later—in July 1989—the Department published a “circular” bearing “[r]egistration number[ ]CNH (NG) 89009 PE” and entitled, “New Funding Arrangements for Small Nursing Homes” (hereafter, the “Circular”). It purported to give some documentary structure to the SNHI. Relevantly for present purposes, it contained the following representations:

[1.]     In April 1988, the Government announced new arrangements for funding nursing and personal care staff in nursing homes. The announcement included, in broad terms, the arrangements for small homes. While a significant number of small nursing homes (that is, those with 20 beds or fewer) currently operate in conjunction with hospitals and other facilities and do not suffer major problems from their small scale, the Government recognised that the new nursing and personal care arrangements may have created difficulties for some small homes because of their scale of operation. For this reason, small homes were not required to come under the new funding arrangements until options to assist small homes were considered.

2.     Following extensive consultations with industry, union and consumer groups, arrangements were developed to assist small homes. The major elements of these arrangements were announced by the Government on 3 May 1989, and took effect from 1 July 1989.

3.     Under these arrangements, various forms of financial assistance, both capital and recurrent - will be available to small nursing homes to help them to redevelop. Redevelopment could include amalgamation of small homes into larger facilities, or the expansion of small homes through approval of additional new beds or through purchase of beds from other homes.

38    The Circular also made reference to the difficulties that some small nursing homes were experiencing at the time with “nursing and personal care funding arrangements”. To alleviate those difficulties, the Circular recorded an intention to facilitate the expansion or amalgamation of small homes. To that end, it observed:

B15     It is recognised that operators of small homes who choose to redevelop the home will need time to organise and implement redevelopment proposals. To assist in this process, various forms of additional financial assistance, both capital and recurrent, will be made available by the Government to redeveloping small homes. Details on this assistance are given in paragraphs B22 to B31 (recurrent assistance) and paragraphs B32 to B46 (capital assistance).

39    Under the heading “Approvals-in-Principle to Transfer Beds”, the Circular recognised as follows:

B17     Under normal arrangements, strict criteria relating to nursing home bed distribution would apply for approval of transfers of nursing home beds. However, applications for transfer of beds which would result in the expansion of a small home will be treated in a more lenient manner with regard to this issue. Nevertheless, other criteria for approval, such as measures intended to be taken to ensure any relocation of residents is adequately addressed will still be taken into account in considering applications for AIPs for transfer of beds under the small homes initiative.

40    The Circular also set out the financial assistance that would be afforded to proprietors who sought to redevelop their small nursing homes, as well as the eligibility criteria that would inform their access to that assistance:

Capital Assistance for Redevelopment

Introduction

B32    Capital assistance is available to proprietors of nursing home[s]…where they are seeking to redevelop small nursing homes. The capital assistance involves grants of $4,000 per bed to assist with the costs of construction and/or borrowings for new beds which will be built. In addition, in some circumstances a $2,000 per bed grant is available to assist with the costs of altering an existing small home which is expanding.

The $4,000/$2,000 per Bed Grants

(a)    Eligibility

B33    Homes are eligible for the $4000/$2000 per bed grants if their Approval-in-Principle for new beds or their Approval-in-Principle to transfer beds was granted on or after 21 April 1988…

41    The reference to 21 April 1988 is a reference to the date on which the SNHI was publicly announced. Eligibility for the funding that was the subject of the Circular was to be back-dated so as to cover redevelopments that were set in train after that announcement.

42    From the above, it may be surmised—at least at the level of potential—that Mr Barnett’s access to grant funding under the SNHI (or under the Circular that purportedly gave effect to it) turned upon whether or not he was the proprietor of a “small nursing home” in respect of which there existed a redevelopment approval-in-principle that was given after the SNHI was announced.

43    The Grant Refusal Decision proceeded on the basis that he was not. AIP-2—which approved, in principle, the expansion of the Balwyn Private Nursing Home from 14 beds to 30 beds (and its transfer from Belgrove Avenue to Banool Road)—pre-dated April 1988. It was slated to expire in September 1988. AIP-3 was given after the SNHI was announced; but, by its terms, contemplated that the same number of beds (that is to say, the 30 beds that AIP-2 foreshadowed at Banool Road) would instead be operated at the new facility in Glen Waverley. Thus, in rejecting Mr Barnett’s application for grant funding under the SNHI, the Department favoured the view that it did not pertain to a small nursing home in respect of which Mr Barnett had secured a relevant approval-in-principle after April 1988.

The CDDA decision

44    The bases upon which Mr Barnett’s CDDA Claim was made have already been rehearsed. At the core of each sits a relatively simple proposition: namely, that Mr Barnett was, in truth, eligible for grant funding under the SNHI (or the Circular that gave effect to it) and that, to the extent that the Minister was advised or came to the view otherwise, that occurred as a consequence (or was otherwise reflective) of defective administration.

45    By the CDDA Decision, the respondent (via a delegate—but it is convenient to refer, hereafter, just to the respondent) concluded that no such defective administration had occurred. At the core of that conclusion sat an equally simple proposition: namely, that the Minister’s conclusion (that Mr Barnett’s application for funding under the SNHI should be rejected for want of eligibility) was one that was reasonably open to it; indeed, “was correct”.

46    The CDDA Decision assumes an orthodox appearance. It begins by way of formalities, following which is set out a summary of the decision that was reached. There is then a comprehensive restatement of the relevant background facts and the bases upon which Mr Barnett asserted that that Grant Refusal Decision was a product of defective administration. To that point, very little of what is recorded is controversial or open to criticism.

47    The CDDA Decision then progresses to outline the nature of the CDDA Scheme. Reference is made to the guidelines that are recorded in RMG 409—including to the four circumstances that they identify as potential hallmarks of defective administration (above, [24]).

48    Later, the CDDA Decision turns to address the specific claims advanced by Mr Barnett. It is convenient to replicate the more salient passages of that analysis:

36.     Mr Barnett's First Contention takes issue with the conclusion of the advice (being the then Minister's characterisation of the Third AIP…), rather than whether the advice was ultimately provided by the Canberra or Melbourne office.

37.     In this regard, it is noted that Mr Barnett refers to a letter dated 14 May 1990 from the Melbourne office to the Canberra office…which asks the Canberra office to reconsider the issue of Mr Barnett's eligibility for the grant and prepare a reply to Mr Barnett for the then Minister's signature.

38.     Departmental files contain legal advices obtained by the Department or the office of the Commonwealth Ombudsman, prepared in the early to mid-1990s. Mr Barnett provided the Department with copies of these advices (dated 25 June 1990, 26 August 1991, 11 May 1994 and 29 July 1994) generally in the form of exhibits to affidavits in earlier court proceedings.

39.     It is likely that the 25 June 1990 advice was taken into account by the Canberra office in preparing the draft letter to Mr Barnett on or around 9 July 1990. While the legal advice differed to the understanding of the Melbourne office, it was reasonable for and open to the Canberra office to rely on the advice in forming its own view in relation to how the Third AIP operated.

40.     I find that the advice (as set out in the draft letter to Mr Barnett provided to the Melbourne office on 9 July 1990 and the letter ultimately sent to Mr Barnett on 19 July 1990), was correct because:

a.     the Third AIP was issued under section 39B(5) – the purpose being to ultimately transfer the beds the subject of the Second AIP to a new location under the Third AIP; and

b.     the Third AIP was not an AIP to expand a small nursing home because the bed places the subject of the Third AIP were not "new beds". They were bed places already allocated via the Second AIP prior to 21 April 1988 (the relevant date for the purposes of the Circular applicable to the capital assistance grant), that were then transferred to another location.

49    There is then some consideration given to the interrelationship between AIP-2 and AIP-3. The following observations are made (references omitted):

47.     The status of the Second AIP is more complex. The Second AIP was valid to 23 September 1988 and had not expired when the Third AIP was granted on 27 July 1988. Mr Barnett claims that the Second AIP was revoked and, as a result, he was eligible for the grant under the SNHI.

48.     Despite many searches undertaken in connection with legal proceedings, Ombudsman investigations and freedom of information requests, no instrument or note of a delegate recording a decision to revoke the Second AIP has been located. Both the Third AIP certificate and the cover letter do not refer to the Second AIP being revoked. This is unlike the cover letter to the Second AIP which had earlier stated that the First AIP had been revoked.

49.     The only available evidence is an inter-departmental telex dated 14 July 1988 from the Department's Canberra office to the Melbourne office, which noted that the delegate had approved an AIP for Glen Waverley and had revoked the Second AIP... The telex noted that the approval for 14 operational beds at Belgrove Avenue should also be revoked once the premises at Glen Waverley open.

50.     Mr Barnett's Response contends that the telex shows the then Minister intended for the Third AIP to incorporate two distinct revocations, being to revoke the existing approval of 14 beds at Belgrove Avenue, and additionally to revoke the Second AIP.

51.     While the telex does refer to the Second AIP having been revoked at the time the Third AIP was granted, it is likely that the telex mistakenly reflects an earlier statutory process for granting a new AIP under section 39A, rather than the process under section 39B then in effect under the Act.

52.     I find the mistaken reference in the telex does not amount to a specific and unreasonable lapse in complying with existing administrative procedures, such that it would constitute defective administration.

53.     The Third AIP was granted under a newly established process set out in the Act (section 39B(5) – (8)), which had only taken effect approximately four months prior. The new legislative process provided for the transfer of AIPs between sites, where:

a.     an AIP had already been obtained for the expanded nursing home to be located at a site different to the existing operational nursing home (site B), to

b.     change the new site to a different location (from site B to site C).

54.     The Third AIP was expressed to be issued under section 39B(5). That is, the Third AIP was not expressed to be a new AIP (under section 39A). In effect, it was a transfer of the Second AIP to the new proposed premises at Glen Waverley.

50    Later, the CDDA Decision proceeds to address Mr Barnett’s contention that the Department’s Canberra office had failed to reconsider its position after doubts as to its correctness were raised (specifically, by the Department’s Melbourne office). It is noted that (emphasis original):

72.     In light of the materials referred to, and the fact that the 19 July 1990 letter notes the Minister's decision to maintain the position that Mr Barnett was not eligible for the grant, it appears that the Minister (or a delegate) most likely reconsidered the decision to refuse Mr Barnett the capital assistance grant at the time (but remained of the same position).

73.     There is no evidence that the Canberra office disregarded the advice from the Melbourne office. While the letter from the Melbourne office articulated a different understanding of the AIPs, it simply suggested a reconsideration of the issues before a draft reply was prepared for the then Minister.

74.     It was reasonable and open to the then Minister (or delegate) to remain of the same position after taking into account all of the relevant and available information. This resulted in Mr Barnett's application for a grant being refused under the SNHI. While the outcome may have been disappointing for Mr Barnett, this does not amount to defective administration.

51    Under the heading “Conclusion”, the CDDA Decision records as follows:

87.     For the reasons set out above, I conclude that the Department did not fail to give proper advice to the then Minister (or a delegate) in respect of Mr Barnett's application for the capital assistance grant. I find that the actions of the Department in respect of Mr Barnett's application for the capital assistance grant, or that the actions of the Department in respect of his application for the grant, did not amount to defective administration.

52    The CDDA Decision then concludes with a discussion of Mr Barnett’s rights of review; and, specifically, reference is made to the potential review of the decision by the Commonwealth Ombudsman. It is not apparent whether Mr Barnett has availed himself of that course; but nor is it put against him that any failure to do so might sound against the grant of prerogative relief on judicial review. Nothing further need be said on that front.

Was the CDDA decision vitiated by jurisdictional error?

53    It must be borne in mind that the court’s task presently is to judicially review the CDDA Decision. Relief will be appropriate only insofar as that decision might be thought to have been vitiated by jurisdictional error in the form that Mr Barnett alleges.

54    At the hearing of the application, senior counsel for Mr Barnett sought to emphasise the contention that jurisdictional error lay in the respondent’s having assessed whether the Grant Refusal Decision amounted to or involved defective administration without considering the objects and purpose of the SNHI. It was put that, by proceeding to determine that the Minister had correctly assessed Mr Barnett’s ineligibility for capital assistance funding under the SNHI without first considering the objects and purpose that had animated that initiative, the respondent had in fact turned his mind to something other than the question of whether the Grant Refusal Decision had involved defective administration. Doing so, it was said, amounted to a constructive failure to exercise jurisdiction under the CDDA Scheme.

55    Respectfully, that submission cannot be accepted for one or both of two reasons.

56    First, I am not persuaded that the court should infer that the respondent made the CDDA Decision unconscious of the objects and purpose of the SNHI. The decision is replete with references to the Circular and it is of course, in that document, that the objects and purpose of the SNHI are to be divined. That no specific reference to any object or purpose is made throughout the CDDA Decision may be accepted; but it should not necessarily follow that the court should infer a relevant want of consideration of the Circular or its content.

57    Whether an administrative decision maker, en route to making a decision, turns his or her mind to something is a question of fact. A failure specifically to advert to a particular matter in reasons given for a decision may be a basis upon which to infer that that matter was not considered: Minister for Immigration and Multicultural Affairs v Yusuf (2001) 206 CLR 323, 346 [69] (McHugh, Gummow and Hayne JJ)); Faulkner v Conwell (1989) 21 FCR 41, 47 (Jenkinson J, with whom Woodward and Ryan JJ agreed); Bat Advocacy NSW Inc v Minister for Environment Protection, Heritage and the Arts (2011) 180 LGERA 99, 113 [46]-[47] (Emmett, McKerracher and Foster JJ); Soliman v University of Technology, Sydney (2012) 207 FCR 277, 294-295 [54] (Marshall, North and Flick JJ). But the court should be slow to draw such an inference when the reasons for the decision are comprehensive and contain at least some reference to the document or thing in question: Applicant WAEE v Minister for Immigration and Multicultural and Indigenous Affairs (2003) 236 FCR 593, 604-605 [47] (French, Sackville and Hely JJ).

58    Equivalent observations may be made about the other matters that Mr Barnett complains went relevantly unconsidered (above, [34]). As the passages replicated above make clear, the respondent gave express consideration to the guidelines contained within RMG 409 and to the circumstances in which defective administration might be discerned. It is simply not the case that the respondent’s analysis was confined to whether or not the Grant Refusal Decision was correct. The correctness of that decision was the very issue that was said to demonstrate defective administration. Naturally, the respondent devoted some energy to it; but very much in the context of addressing the central (if not only) issue that he was called upon to address, namely whether or not there had been defective administration as Mr Barnett had alleged.

59    Factually, then, there is reason to doubt Mr Barnett’s contention that the respondent proceeded to make the CDDA Decision without regard to the matters that he complains went relevantly unconsidered.

60    But there is a bigger (second) problem. The matters that Mr Barnett contends went unconsidered are not matters of which the proper exercise of power under the CDDA Scheme required that account be taken. The CDDA Scheme is, of course, entirely independent of the SNHI. Whether or not a decision made in purported reliance upon the latter was a product of (or otherwise involved) defective administration turns only upon what that concept is intended to mean under the CDDA Scheme. No part of the Circular serves as a mandatory relevant consideration upon which the exercise of power under the CDDA Scheme is, in that context, conditioned.

61    All the more is that so when regard is had to the CDDA Claim. Mr Barnett maintains—and has always contended—that the Grant Refusal Decision was a product of defective administration because the Minister’s conclusion about his eligibility for capital assistance funding under the SNHI was wrong. As senior counsel for Mr Barnett rightly accepted during the hearing, the defective administration in respect of which the CDDA Claim was pressed inhered in that alleged error.

62    Whether the Minister’s conclusion about Mr Barnett’s eligibility for capital assistance funding under the SNHI was wrong because it was inconsistent with the object or purpose of the SNHI doesn’t much matter. The defective administration that was (and still is) alleged lay in the binary proposition that the Minister ought to have decided the question of eligibility otherwise than as he did.

63    Whether, in truth (and contrary to the Minister’s finding in 1990), Mr Barnett was eligible for capital assistance funding in accordance with the criteria established by the Circular was precisely the contention that the CDDA Decision was concerned centrally to address. Reasonable minds might differ as to how that question should be answered. That is a reality that, no doubt (and properly), inspired the abandoning of Mr Barnett’s alternative legal unreasonableness contention. But the court’s task presently is not to gainsay the respondent’s conclusion on its merits. It is not to determine whether the conclusion made here about the correctness of the Minister’s conclusion in 1990 about Mr Barnett’s ineligibility for funding under the SNHI was itself correct. Whether it was correct or not has no bearing upon whether or not the CDDA Decision was a product of jurisdictional error.

64    The court’s only task now is to assess whether the conclusion about the correctness of the Minister’s decision was made in a manner that was authorised by the jurisdiction that the CDDA Scheme conferred. I am not satisfied that it wasn’t. As the respondent submitted (references omitted):

…the CDDA Delegate considered and assessed the terms of the SNHI scheme, assessed the reasoning process of the then Department and Minister, considered and assessed the contrary arguments and reasoning put forward by Mr Barnett as to these issues, and concluded that there was no defective administration.

65    With that conclusion stated, it is strictly unnecessary to explore the submissions that Mr Barnett advanced about the correctness of the Grant Refusal Decision (or the assessment upon which it hinged, namely that he was ineligible under the terms of the SNHI for the capital assistance funding for which he had applied). Absent some suggestion that the CDDA Decision was legally unreasonable—that is to say, that the Grant Refusal Decision was so plainly wrong that the failure here to recognise that it was tainted by defective administration was a course that no decision maker, acting reasonably under the CDDA Scheme, could follow—that issue simply doesn’t arise.

66    Nonetheless, given the efforts that were expended in addressing that question, I should wish to say something about it. It is to be borne in mind that, by September 1987, Mr Barnett had secured in-principle approval to expand the Balwyn Private Nursing Home from 14 to 30 beds. Although his plans in that regard had not taken—and, ultimately, did not take—shape in the form then contemplated, it was nonetheless the case that he was earmarked to operate a 30-bed nursing home well prior to 21 April 1988.

67    It is that reality that appears to have driven the Minister to conclude as he did about Mr Barnett’s eligibility for capital assistance funding under the SNHI. The provision of that funding was forward-looking; but was backdated to the date of the public announcement that was made in April 1988. It was not earmarked for distribution to those who, prior to April 1988, were already approved to expand or redevelop. Hence, when Mr Barnett’s application for capital assistance funding was considered, it was concluded that the only approval-in-principle that he had that post-dated the SNHI announcement was for the transfer of the beds that were already the subject of AIP-2. By then, he was already approved, in principle, to operate a nursing home that was not a small nursing home.

68    That analysis may or may not be correct. Plainly, the respondent considered that it was. The bases upon which he reached that conclusion were coherent and soundly reasoned. The worst that might be said of his analysis is that it was wrong; but that would not suffice to bespeak jurisdictional error, whether in the form of legal unreasonableness or otherwise. The conclusion to which the respondent was drawn was one that was open to be favoured.

Conclusion

69    The CDDA Decision was not a product of jurisdictional error as alleged. Mr Barnett’s application should (and will) be dismissed with the usual order as to costs.

Associate:

Dated:    26 September 2023