Federal Court of Australia

Aged Care Quality and Safety Commissioner v Double Bay Aged Care Pty Ltd [2024] FCA 242

ORDERS

THE COURT ORDERS THAT:

1.    The application be allowed.

2.    The decision of the Administrative Appeals Tribunal be set aside.

3.    The matter be remitted to the Tribunal for determination according to law.

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

REASONS FOR JUDGMENT

RAPER J:

1    By way of originating application dated 1 September 2023, the applicant (Commissioner) seeks, under s 39B of the Judiciary Act 1903 (Cth), writs of certiorari quashing the decision of the second respondent (Tribunal) and mandamus requiring the Tribunal to determine the first respondent’s (Double Bay) application for review according to law.

2    On 4 August 2023, the Tribunal set aside the decision of a delegate of the Commissioner and remitted the matter for reconsideration. The delegate had decided, pursuant to s 74L(2) of the Aged Care Quality and Safety Commission Act 2018 (Cth), to affirm a decision of a different delegate not to approve Double Bay to become a provider of home care under s 63D(2) of the Act.

3    The Commissioner contends that the Tribunal made a jurisdictional error by misconstruing its power under s 43(1)(c)(ii) of the Administrative Appeals Tribunal Act 1975 (Cth), and ss 74L(2) and 63D of the Act. In so doing, the Tribunal constructively failed to exercise its jurisdiction in the conduct of the review it was required to perform.

4    Both Double Bay and the Tribunal filed submitting notices in this proceeding.

5    For the following reasons, the application must be allowed.

Background and relevant legislative provisions

6    On 8 February 2021, Double Bay applied to the Commissioner under s 63B of the Act to become an approved provider of aged care. Section 63B of the Act provides as follows:

63B Application for approval as provider of aged care

(1)     A person may apply to the Commissioner to be approved as a provider of aged care.

(2)     The application must:

(a)     be made in writing; and

(b)     be in a form approved by the Commissioner; and

(c)     be accompanied by any documents or information specified by the Commissioner; and

(d)     be accompanied by any fee specified by the Commissioner.

(3)     The person may, in writing, withdraw the application at any time before the Commissioner makes a decision on the application.

7    On 5 November 2021, a delegate of the Commissioner decided not to approve Double Bay as a provider of home care. On 19 November 2021, Double Bay sought reconsideration of the delegate’s decision under s 74K of the Act and provided further documents and submissions addressing the delegate’s decision. It is this decision which was the subject of the review before the Tribunal. The delegate of the Commissioner found that Double Bay had not satisfied the criteria under s 63D(2)(b) of the Act, namely that Double Bay “is suitable to provide aged care”.

The Tribunal’s decision

8    The Tribunal’s decision concerned the Commissioner’s refusal to approve Double Bay’s application to be an aged care provider and on internal review, the affirmation of that decision. The Commissioner was required, pursuant to s 63D of the Act, to decide whether to approve Double Bay as an aged care provider.

9    The Tribunal set out the terms of a later, but inapplicable version of s 63D, which is extracted as follows:

63D Commissioner must decide whether to approve person as provider of aged care

(1)    If a person makes an application under subsection 63B(1), the Commissioner must decide whether to approve the person as a provider of aged care within:

(a)    if a request for further information in relation to the application has been made under subsection 63C(1)—90 days after receiving the further information; or

(b)    otherwise—within 90 days after receiving the application.

Note:    See Part 8B for the reconsideration of a decision not to approve a person as a provider of aged care.

Approval as provider of aged care

(2)    The Commissioner must not approve the person as a provider of aged care unless the Commissioner is satisfied that:

(a)    the person is a corporation; and

(b)    the person is suitable to provide aged care; and

(c)    each individual who is one of the key personnel of the person is suitable to be involved in the provision of aged care.

Suitability to provide aged care

(3)    In deciding whether the person is suitable to provide aged care, the Commissioner must consider the following matters:

(a)    the person’s experience in providing, at any time, aged care or other relevant forms of care;

(b)    the person’s demonstrated understanding of the person’s responsibilities as a provider of the type of aged care for which approval is sought;

(c)    the systems that the person has, or proposes to have, in place to meet the person’s responsibilities as a provider of the type of aged care for which approval is sought;

(d)    the person’s record of financial management and the methods that the person uses, or proposes to use, in order to ensure sound financial management;

(e)    if, at any time, the person has been a provider of aged care or other relevant forms of care—the person’s conduct as such a provider and the person’s compliance with:

(i)    the person’s responsibilities as a provider of that care; and

(ii)    the person’s obligations arising from the receipt of any payments from the Commonwealth for providing that care;

(ea)    whether the person has at any time been convicted of an indictable offence;

(eb)    whether a civil penalty order against the person has been made at any time;

(f)    any other matters specified in the rules.

(4)    In considering a matter referred to in paragraph (3)(a), (b), (d), (e) or (f), the Commissioner may also consider the matter in relation to any or all of the key personnel of the person.

(5)    The rules may specify the matters to which the Commissioner must have regard in considering any of the matters set out in paragraphs (3)(a) to (f).

(6)    Subsection (3) does not limit the matters the Commissioner may consider in deciding whether the person is suitable to provide aged care.

Suitability of key personnel

(7)    In deciding whether an individual who is one of the key personnel of the applicant is suitable to be involved in the provision of aged care, the Commissioner must consider the suitability matters in relation to the individual.

(8)    Subsection (7) does not limit the matters the Commissioner may consider in deciding the matter mentioned in that subsection.

10    The applicable, earlier version of the Act was Compilation No 4, dated 1 September 2021. The applicable version was different in two material respects (and is extracted at [23] below).

11    First, the circumstances in which the Commissioner “must not” approve the person were materially different, and are set out as follows:

Approval as provider of aged care

(2)     The Commissioner must not approve the person as a provider of aged care unless the Commissioner is satisfied that:

(a)     the person is a corporation; and

(b)     the person is suitable to provide aged care; and

(c)     none of the key personnel of the person is a disqualified person individual.

12    Secondly, the applicable version did not contain subsections (6) and (7) under the heading “Suitability of key personnel”.

13    Part 1 of Sch of the Aged Care and Other Legislation Amendment (Royal Commission Response) Act 2022 (Cth) (Amending Act) repealed and substituted s 63D(2)(c) and inserted s 63D(3)(ea) and (be) and s 63D(7) and (8); item 39 of pt 1 of sch 5 provides as follows:

39 Application – new applications for approval of person as provider of aged care

The amendments of section 63D of the Commission Act made by Part 1 of this Schedule apply in relation to an application that is made on or after the commencement day.

14    By operation of s 2 of the Amending Act, the above amendments commenced on 1 December 2022. Consequently, the said amendments were not applicable to Double Bay’s application by reason of it having been received by the Commissioner on 8 February 2021.

15    In its reasons, the Tribunal referred to the meaning of “key personnel” in s 8D of the Act: T[6]. The Tribunal then identified the four key personnel nominated in the papers before the Tribunal being members of its managing committee, Mr Ambrat Panjwani (to be the CEO), Mr Vinesh Kumar Valecha (to be the CFO), Mr Arish Taree (to be the General Manager of Operations) and Mr Adam Mohammad (to be a member of the management committee and employed as a consultant): T[7]-[8].

16    As is apparent from the above, pursuant to the applicable version of the Act, the Commissioner must not approve such an application unless, inter alia, the Commissioner is satisfied that ‘the person is suitable to provide aged care’: s 63D(2)(b). However, the Tribunal referred erroneously to a later version of the Act and consequently a different state of satisfaction, namely, that the Tribunal must be satisfied that each individual identified as key personnel is suitable, at T[10]:

10.    In order to give approval under s 63D(2)(c) the respondent (and therefore this Tribunal) must be satisfied that each individual who is one of the key personnel is suitable to be involved in the provision of aged care. However, Mr Valecha will no longer be involved in the company’s affairs, and has moved to Canberra where he is now working in some unknown employment: Mr Panjwani at Transcript page 166. He was not called in the case. That presents a difficulty because the provisions of s 63B(2)(c) are not subject to any exception, but are mandatory. The Tribunal could not grant an approval to the applicant on the present evidence, even if it was minded to do so.

17    Further, one sees that the Tribunal was troubled as to the suitability of Mr Valecha given he was no longer involved in the company’s affairs: T[10]. Such a difficulty was compounded, as the Tribunal observed, by the fact that the position of CFO is important given the evidence concerning the financial projections and affairs of Double Bay, including anomalies in its financial records identified in the evidence: T[11]. The Tribunal thereafter expressed a concern that Mr Panjwani did not appear to have any experience as a CEO: T[12]. Further, the Tribunal noted that the only evidence before the Tribunal concerning Mr Tareen was that he was a claims manager for an insurance company and that experience was “unlikely to make him suitable to be a General Manager or to be involved in aged care”: T[13].

18    However, rather than finding that Double Bay’s application for review must fail, given the evident deficiencies in its application, from which the Commissioner had a mandatory obligation to be satisfied, the Tribunal determined, at T[14]-[15]:

14.     I think it is necessary for the Commissioner to be given more information about Mr Panjwani s suitability to be the CEO of this company, about Mr Tareen’s suitability to be the General Manger and about the CFO yet to be appointed, as well as some further and better prepared information about the financial circumstances of the company so that the respondent can perform its duty under s 63D of the Aged Care Quality and Safety Commission Act 2018.

15.    It therefore seems to me that the decision of the respondent must be set aside and the matter remitted to the respondent for redetermination.

19    In addition, the Tribunal determined, at T[16]-[17]:

16.    Mr Mohammed’s preparation of a document sent to the respondent for the purposes of the application was not good. During Mr Panjwani’s cross examination, it emerged that one of the documents sent by the applicant to the respondent related to one of Mr Mohammed’s own companies, not the applicant. That document should be revisited by the applicant to make it accurate for the purposes of the re determination by the respondent.

17.    Mr Mohammed is a retired Consul General for Pakistan. He apparently has experience in handling compliance matters for two aged care companies for which he no longer works. He would negotiate his remuneration for each compliance matter ad hoc. He has no written contract of employment, specifying duties and salary. He said in evidence that all members of the management committee would not make a charge for their services until the company was established for several years. He said that he himself would make no charge for his services for the initial two to three years. No employment contracts have been prepared to be entered into by the applicant at this stage. That also should be reconsidered if the applicant is to seek to persuade the respondent to grant approval.

20    However, despite this, the Tribunal further determined that the reviewable decision be set aside and remitted to the Commissioner for reconsideration.

The application for review

21    The originating application incorporates the ground for review deposed in the accompanying Affidavit of Aaron Taverniti affirmed 1 September 2023 (amended at hearing) namely that the Tribunal misconstrued its power under s 43(1)(c)(ii) of the AAT Act and sections 74L(2) and 64D of the Act and thereby constructively failed to exercise its jurisdiction in conducting the review it was required to perform.

Consideration

22    When the Tribunal attends to its task of merits review under s 74N of the Act, it “stands in the shoes” of the Commissioner’s delegate and is to make the correct or preferable decision, at the time of the Tribunal’s decision, on the material before it: see Frugtniet v ASIC [2019] HCA 16; 266 CLR 250 at [51] (Bell, Gageler, Gordon and Edelman JJ); Shi v Migration Agents Registration Authority [2008] HCA 31; 235 CLR 286 at [96]-[98] (Hayne and Heydon JJ).

23    Accordingly, the Tribunal was required, under the terms of the AAT Act and s 63D of the Act, to consider the evidence before it, and to determine whether it should affirm, vary, or set aside and substitute the decision under review by reference to the matters set out in ss 63D(3) and (4). The correct version of s 63D is extracted as follows:

63D Commissioner must decide whether to approve person as provider of aged care

(1)     If a person makes an application under subsection 63B(1), the Commissioner must decide whether to approve the person as a provider of aged care within:

(a)     if a request for further information in relation to the application has been made under subsection 63C(1)—90 days after receiving the further information; or

(b)     otherwise—within 90 days after receiving the application.

Note:     See Part 8B for the reconsideration of a decision not to approve a person as a provider of aged care.

Approval as provider of aged care

(2)    The Commissioner must not approve the person as a provider of aged care unless the Commissioner is satisfied that:

(a)     the person is a corporation; and

(b)     the person is suitable to provide aged care; and

(c)     none of the key personnel of the person is a disqualified individual.

Suitability to provide aged care

(3)    In deciding whether the person is suitable to provide aged care, the Commissioner must consider the following matters:

(a)     the person’s experience in providing, at any time, aged care or other relevant forms of care;

(b)     the person’s demonstrated understanding of the person’s responsibilities as a provider of the type of aged care for which approval is sought;

(c)     the systems that the person has, or proposes to have, in place to meet the person’s responsibilities as a provider of the type of aged care for which approval is sought;

(d)     the person’s record of financial management and the methods that the person uses, or proposes to use, in order to ensure sound financial management;

(e)     if, at any time, the person has been a provider of aged care or other relevant forms of care—the person’s conduct as such a provider and the person’s compliance with:

(i)     the person’s responsibilities as a provider of that care; and

(ii)     the person’s obligations arising from the receipt of any payments from the Commonwealth for providing that care;

(f)     any other matters specified in the rules.

(4)     In considering a matter referred to in paragraph (3)(a), (b), (d), (e) or (f), the Commissioner may also consider the matter in relation to any or all of the key personnel of the person.

(5)     The rules may specify the matters to which the Commissioner must have regard in considering any of the matters set out in paragraphs (3)(a) to (f).

(6)     Subsection (3) does not limit the matters the Commissioner may consider in deciding whether the person is suitable to provide aged care.

24    The Commissioner submitted that the Tribunal failed to do attend to its statutory task. Its conclusions at T[10] were in respect of inapplicable legislation. The Tribunal did not engage at all with the relevant statutory framework that it was required to take into account though it is clear that the Tribunal did consider the evidence.

25    The error arose where the Tribunal understood, at the commencement of T[10], that it was for “this Tribunal” to be satisfied as to the suitability of the corporation (through its key personnel). Putting aside the fact of the inapplicable legislation, the Tribunal did not go on, consistently with the deficiencies it identified in Double Bay’s application (at T[10]-[13]) and find that it was not able to approve the application. Rather, it found that it “could not grant an approval to the applicant on the present evidence, even if it was minded to do so” (at T[10]); and then, rather than discharge its statutory function and not approve Double Bay’s application, gave Double Bay an opportunity to put on more information and erroneously sought for the Commissioner, rather than itself, to perform “its duty under s 63D” of the Act: T[14].

26    I accept the Commissioner’s submission that the Tribunal misunderstood the nature of its review function and failed to carry out the review required of it under the AAT Act.

27    The reasoning in Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs v ZRTY [2022] FCA 1529 is apposite to this case. ZRTY concerned judicial review of a decision of the Tribunal where the Tribunal was required to review a decision of a delegate of the Minister for Immigration who had refused, under s 501CA(4) of the Migration Act 1958 (Cth), to revoke the cancellation of the review applicant’s visa. The Tribunal in that case decided to set aside the delegate’s non-revocation decision and to remit the matter by reason of having identified problems with the review applicant’s evidence and other shortcomings in the materials which might have enabled the Tribunal to find that there was “another reason why the original decision should be revoked” (s 501CA(4)(b)(ii)). As Katzmann J observed in ZRTY at [43], the Tribunal had “proceeded on the basis that it had insufficient material before it to engage in the exercise required of it by the [Ministerial] Direction [issued under s 499 of the Migration Act]”. Her Honour held at [41] that the Tribunal had failed to undertake the task required of it because it had fallen into the kind of error expressed in Re Minister for Immigration and Multicultural Affairs; Ex parte Miah [2001] HCA 22; 206 CLR 57 at [80]:

41    It is plain on the face of the reasons (read fairly and as a whole) that the Tribunal did not undertake the task required of it. Rather, it remitted that task to the Minister’s Department. That amounted to a constructive failure to exercise jurisdiction. As Gaurdron J observed in Minister for Immigration and Multicultural Affairs; Ex parte Miah (2001) 206 CLR 57 at [80] (footnotes omitted):

    The classic statement as to what constitutes constructive failure to exercise jurisdiction is that of Jordan CJ in Ex parte Hebburn Ltd; Re Kearsley Shire Council [(1947) [1947] NSWStRp 24; 47 SR (NSW) 416 at 420]. That statement, which has been approved by this Court on numerous occasions identifies a constructive failure to exercise jurisdiction as occurring when a decision-maker “misunderstand[s] the nature of the jurisdiction which [he or she] is to exercise, and ... appl[ies] ‘a wrong and inadmissible test’... or ... ‘misconceive[s his or her] duty,’ ... or ‘[fails] to apply [himself or herself] to the question which the law prescribes’ ... or ‘... misunderstand[s] the nature of the opinion which [he or she] is to form’”.

28    The Tribunal adopted a similar erroneous approach here, albeit in a different statutory context. The Tribunal in the present case, as in ZRTY, was required to conduct a review under the AAT Act, and to make a decision under s 43 of the AAT Act. The Tribunal here misconceived its duty and did not make a decision it was empowered to make. The Tribunal was required to decide whether to approve Double Bay as an aged care provider. It was unable to so approve Double Bay unless satisfied that it was a corporation which was suitable to provide aged care: s 63D(2). As stated above, the Tribunal appears to have made a finding (at T[10]) that Double Bay did not satisfy the s 63D(2)(c) criterion (by reference to the incorrect legislation), but for unknown reasons failed to exercise the power required of it having come to that conclusion, which was (under s 43(1)(a) of the AAT Act) to affirm the decision under review.

29    Similarly to the Tribunal’s decision in ZRTY, the Tribunal here appears to have considered it necessary to set aside the delegate’s decision on the basis that it was considered “necessary for the Commissioner to be given more information” about certain matters which might have supported the Double Bay’s approval as an aged care provider. As Katzmann J observed in ZRTY at [64] “the Tribunal was required to engage in a consideration of the material before it, rather than speculate about what other material might be in existence or might later be obtained.” The Tribunal was required to satisfy for itself whether Double Bay had met the requirements in s 63D(2). If it was not satisfied, the Tribunal was required, under statutory compulsion, not to approve Double Bay as an aged care provider. The Tribunal could not, by reason of insufficient information, decide to set aside the delegate’s decision and to remit for reconsideration.

30    It was not open to the Tribunal – for the reasons it gave – to decide to set aside the delegate’s decision and to remit the matter to the Commissioner. As observed by Lee J with respect to the remittal power under s 43(1)(c)(ii) of the AAT Act, in Minister for Immigration & Multicultural Affairs v Perth City Mission [2000] FCA 397 at [23]:

23.    The power of the Tribunal to set aside a decision and remit the matter for reconsideration only arises where the Tribunal is unable to make, and has not made, a decision in substitution for the decision set aside. (See: Commonwealth of Australia v Beale [1993] FCA 294; (1993) 30 ALD 68 per Neaves J at 70.) Section 43(1)(c)(ii) is directed to a circumstance where the decision under the enactment has not been made where the Tribunal is of the view that it is unable to make the decision required by the enactment, for example, where a requirement or condition must be satisfied before a decision can be made.

31    The Tribunal was required to make a decision on the basis of the information before it (which included extensive oral evidence adduced during the hearing) by reference to its power under s 43(1) of the AAT Act, informed by s 74L(2) and s 63D of the Act. The fact that it did not so decide and rather remitted the task to the Commissioner amounted to a constructive failure to exercise jurisdiction: Miah at [80].

32    As is evident from the above, here the Tribunal made no finding that it was unable to make a decision required by the enactment, nor on the evidence presented to the Tribunal. The Tribunal erred in having purported to exercise the power under s 43(1)(c)(ii) on the evidence before it.

Conclusion

33    For the abovementioned reasons, the application must be allowed.

34    I note that the Commissioner, very appropriately, no longer seeks for Double Bay to pay her costs of these proceedings and accordingly no costs orders will be made.

Associate:

Dated:    15 March 2024