CATCHWORDS Administrative law ~- judicial review - application for approval of premises as an approved nursing home - meaning of 'deemed approval' and 'proprietor of premises, being an approved nursing home' - proposal to make application for approval of premises as an approved nursing home - transferability - power of Minister to review decision of Permanent Head - power of Minister to direct Permanent Head. Administrative Decisions (Judicial Review) Act 1977 s.5(1)(b), (c), (dad), Ce), (C&) and Ch) National Health Act 1953 ss.4(1), 40AA, 45 and 138 Health Act 1958 (Vic.) ss.179 and 182 ZAYEN NOMINEES PTY. LTD. v. MINISTER FOR HEALTH V.G. No. 137 of 1981 Northrop J. Melbourne 25 March 1983. IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY V.G. No. 137 of 198P GENERAL DIVISION ' eee we ay BETWEEN: ZAYEN NOMINEES PTY. LTD. Applicant ~ and MINISTER FOR HEALTH Respondent ORDER CORAM: Northrop J. DATE: 25 March 1983 PLACE: Melbourne THE COURT ORDERS THAT: 1. The decision of the Minister for Health notified in his letter dated 29 June 1981 viz., "to uphold the Department's decision not to grant approval in principle for (the applicant's) nursing home proposal at North Fitzroy" be quashed and set aside. Leave granted to each party to move for an order for costs. IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY V.G. No. 137 of 198! GENERAL DIVISION eee we t BETWEEN: ZAYEN NOMINEES PTY. LTD. Applicant and MINISTER FOR HEALTH Respondent NORTHROP J. REASONS FOR JUDGMENT 25 MARCH 1983 Zayen Nominees Pty. Ltd., "Zayen", brings these proceedings under the Administrative Decisions (Judicial Review) Act 1977, "the Judicial Review Act", seeking an order of review of a decision of the Minister for Health, "the Minister", expressed in a letter dated 29 June 1981. Zayen claims that the decision was of an administrative character made under an enactment, namely the National Health Act 1953, and in particular under either s.45 or s.138 of that Act. The proceedings relate to whether Zayen is entitled to have a proposed nursing home approved under Part V (sections 39-45B inclusive) of the National Health Act. Before turning to the facts of the case, it is helpful to make some reference to some of the statutory provisions applicable to nursing homes in the State of Victoria. The control and administration of nursing homes within Victoria are regulated pursuant to the provisions of the Health Act 1958 (Vic.), "the Health Act (Vic.}", and in particular pursuant to Division 3 of Part X (sections 178-186 inclusive) of that Act. Under the National Health Act, persons carrying on the business of a private nursing home receive the benefit of certain Commonwealth funding if the nursing home is approved under Part V of that Act; see also Parts VA, VB and VC of that Act. It follows that from a commercial aspect, a person is loath to commence to conduct the business of a private nursing home unless that person is assured that approval will be granted under the National Health Act. It follows also that there must be co-operation between the Commonwealth and the Victorian administrations concerning the whole matter of nursing homes within Victoria. Under the Health Act (Vic.) a nursing home is a private hospital classed by the Health Commission of Victoria, "the Commission", as a nursing home; see s.178(1). The Commission was established under the Health Commission Act 1977. The Commission is empowered to class a private hospital as a nursing home if "it is of the opinion that the age, senility, infirmity, chronic ill-health or other condition of the persons generally received or lodged there -3-+ is such that they require the exercise of nursing supervision and care with occasional attention by a medical practitioner", s.179(3), and each nursing home must be registered with the Commission; generally see s.179. Upon any application for registration of-a nursing home, the Commission is required to inquire into and take into consideration, inter alia, whether or not "in the opinion of the Commission there already exist or are planned adequate facilities in the locality of the [nursing home] seeking registration to satisfy the purpose of that [nursing home]" and "the character of the applicant and the fitness of the applicant to carry on a [nursing home] and where the applicant is a corporation the character and fitness of those persons who in the opinion of the Commission have the effective management and control of the corporation", s.179(8)({aa) and (b). It is necessary to set out the relevant parts of s.182 which deal with the power of the Commission to approve the building of nursing homes: "182.(1) Before commencing the erection building or rebuilding of any [nursing home] or any .-- alteration ... of ... any existing building with the view of using the same as a [nursing home] the proprietor shall - (a) submit to the Commission plans and specifications of the proposed works together with such other particulars as are prescribed or as_ the Commission requires; and (b) obtain the Commission's approval of such plans and specifications. | (2) Subject to sub-section (4), the Commission may approve of the plans and specifications with or without modifications or conditions; or may disapprove of the same. > (3) No such works shall be undertaken or carried out except in accordance with the ' plans and specifications as so approved or as modified by the Commission from time to time. (4) Where in the opinion of the Commission, the proposed works would be likely \ to increase the facilities for patient care in , a locality beyond the needs of that locality, the Commission shall not approve the plans and specifications for the proposed works." Section 179(8)(aa) and s.182(4) of the Health Act (Vic.) came into operation on 6 December 1978. In s.182 the "proprietor" of a nursing home includes the owner, the occupier or any person having the management or control thereof, s.178(1). A more detailed reference is made to the National Health Act. For present purposes it is necessary to set out the meanings to be given to the following words and phrases, unless the contrary intention appears, by s.4{1): ""tapproved', in relation to a nursing home, means approved, or deemed to be approved, under Part V, and 'approval' has a corresponding meaning; " nursing home' means premises - (a) that are fitted, furnished and staffed for the purpose of providing accommodation and nursing care for patients who, by reason of infirmity or iliness, disease, incapacity or disability, have a continuing need for nursing care; and (b) in which patients of that kind are received and lodged exclusively for the purpose of providing them with accommodation and nursing care, , " "nursing home care' means accommodation and nursing care of a kind provided in a nursing home, and includes any prescribed service of a kind provided in a nursing home." [Note, the words 'and includes any prescribed service of a kind provided in a nursing home' were inserted by Act No. 118 of 1981.] "'Permanent Head' means the Permanent Head of the Department of Health;" f premises' includes a part of premises;" "'proprietor' means — (b) in relation to a private nursing home - the owner of the business or undertaking carried on at the nursing home;" Section 40AA is of crucial importance and relevant parts are set out: "40AA. (1) The proprietor of premises, being a nursing home, may apply, in the authorized form, for approval of the premises as an approved nursing home. (2) Subject to this section, where the Permanent Head is satisfied that the premises in respect of which an application is made are a nursing home, the Permanent Head shall the approve the premises as an approved nursing home for the purposes of this Act. (3) Where - (a) application is made for approval of premises (not being a Government nursing home) as an approved nursing home, not being an application made before the commencement of this section by virtue of sub-section (2) of section thirty-nine of the National Health Act 1972; and (b) the Permanent Head is of the opinion that approved nursing homes (including premises proposed to be approved as ~ nursing homes) in the locality in which the premises to which the application relates are situated make adequate provision for nursing home care in that locality, being an opinion that, where the premises are in a State, is formed by the Permanent Head after consulting with the authority in that State responsible for the administration of nursing homes in that State, he may refuse the application unless the applicant has, within the period of twelve months, or within such longer period as the Permanent Head allows, before the application is made, informed the Permanent Head, in writing, that the applicant proposes to make the application and the Permanent Head has informed the applicant, in writing, that the application will not be refused under this sub-section. It is noted that in Part V the word "authorized" means "authorized in writing by the Permanent Head", s.39, but the words "in writing" were inserted by Act No. 118 of 1981. In s.40AA(3) the words "(not being a Government nursing home)" were deleted by Act No. 118 of 1981. There are a number of other sub-sections to s.40AA but they need not be set out. Under sub-section (4) the Permanent Head has a power to refuse an application for approval in circumstances where an existing approval of the premises as a nursing home has been revoked under s.44(2).. Under sub-section (5), if the Permanent Head does not grant an approval, he shall refuse the application and notify the applicant in writing accordingly. An approval of premises as an approved nursing home is subject to a number of specified conditions; see sub-section (5A} as in force prior to Act No. 118 of 1981 coming into operation and as substituted by that Act, and sub-section (6). -For present purposes the relevant parts of s.45 are set out: "AS. aes (2) The proprietor of premises in respect of which - (a) an application for approval as an approved nursing home has not been granted by the Permanent Head; or may, by writing signed by him, request the Minister to review the matter. (3) Upon receipt of a request under sub-section (1) or (2), the Minister shall, after such investigation of the matter as he considers necessary, either confirm the decision of the Permanent Head or take such other action with respect to the approval of the nursing home as he considers justified in the circumstances of the case." - eee ee ee Section 138 provides: "138. The exercise of a power by the Permanent Head under this Act is subject to the directions (if any) of the Minister." At the hearing of the application under the Judicial Review Act, the parties relied upon three affidavits sworn by Brian William Hobson, a director of Zayen, and the exhibits thereto, three affidavits sworn by Peter Johnstone, an Assistant Director-General in the Nursing Home Care and Benefits Branch in the Department of Health, and the exhibits thereto, and a number of exhibits tendered by consent during the course of the submissions. Each of the affidavits contained material which was inadmissible as evidence. In addition, a number of ambiguities are contained in the affidavits and exhibits and there is no evidence concerning matters which normally would be expected to be within the knowledge of one or other or both of the deponents or of other officers of the Department or of Zayen. Unfortunately, neither deponent was cross-examined and as a result the evidence before the Court is neither as full nor as explicit as it could have been. Further, the material before the Court illustrates that persons acting for or on behalf of Zayen, as well as officers of the Department, used imprecise and misleading words and phrases in correspondence and other documents which illustrate a remarkable lack of understanding of the provisions of the National Health Act and which led to confusion and misunderstanding arising between Zayen and the Department. In addition, Zayen was not always as frank as it should have been in its dealings with the Department. Notwithstanding all these matters, it is necessary to state the relevant facts and to make the necessary inferences from the facts so established. ~ Zayen was incorporated on 26 July 1973. In one of his affidavits Mr. Hobson swears that Zayen purchased land and buildings situated at and known as 191 McKean Street, North Fitzroy on 14 April 1973, being a date before Zayen was incorporated. Nevertheless, at all relevant times Zayen has been registered as the proprietor in fee simple of that land, hereinafter called "McKean Street". At some unspecified time Zayen decided to use McKean Street for the purpose of conducting a nursing home thereon. Some time in November 1977, unspecified arrangements were entered into between Zayen and a Mr. and Mrs. Matthies, hereinafter referred to jointly as "the Matthies", concerning McKean Street. At that time the buildings then erected on McKean Street were not suitable for the purpose of conducting a nursing home and unspecified arrangements were made between Zayen and a firm ef architects known as Genser, Shepherd and Associates Pty. Ltd. relating to building works at McKean Street. A Mr. Genser appears to have been the person exercising authority on behalf of that firm of architects. The office of Zayen - 10 = and the office of the architects at all material times appear to have been situated at 381 Punt Road, Richmond. Whatever the arrangements between Zayen, the Matthies and the architects, a letter dated 3 October 1977 was forwarded to the Department of Health. The letter was stated to be from "K. & B. Matthies, c/- 381 Punt Road, Richmond" and appears to have been signed on their behalf by Mr. Genser. The letter was stated to be: "Re: 58 No. Bed Geriatric Private Hospital at No. 191 McKean Street, North Fitzroy." The reference in that heading to "Private Hospital" appears more appropriate to an application to the Commission under the Health Act (Vic.) rather than to the Permanent Head under the National Health Act, but the heading is an instance of the lack of precision and confusion which permeated the whole of the correspondence and dealings relating to McKean Street. The letter then stated: "We wish to make an application to the Department for Approval in Principle to build and operate a 58 No. Bed Geriatric Private Hospital at 191 McKean Street, North Fitzroy. Hoping that this application will meet the Department's approval." ~ll- At this stage it is necessary to digress from the narrative of the facts to make some comment on that letter and on the National Health Act. One thing is clear. The letter does not and it could not constitute an application under s.40AA(1), if for no other reason than because it was not in the authorized form. At the very most it was an application under the "unless" clause to s.40AA(3). The phrase "Approval in Principle" is accepted by the Department and by the applicant as referring to a notification in writing by the Permanent Head under the "unless" clause that an application under s.40AA(1), if made within the specified time, will not be refused under the power conferred by s.40AA(3). The phrase "Approval in Principle" creates its own difficulties and has a tendency to obscure the true nature of the "unless" clause. This is illustrated in the present case by the contention of counsel for Zayen that because of the defined meaning of the word "approved", notification of the information under the "unless" clause was deemed to be an approval and therefore was to be treated as an approval under s.40AA(1). This contention will be considered later in these reasons. Under s.40AA(2) the Permanent Head is obliged to grant an approval subject to two conditions precedent, namely an application in the authorized form being made under sub-section (1) and his being satisfied that the premises are a nursing home. That obligation disappears and is replaced - 12 —- by a power to refuse an application under sub-section (1) in two cases, namely under sub-section (4), which has no direct relevance to the present case, and under sub-section (3). The power conferred by sub-section (3)(b) to refuse to grant approval is itself taken away from the' Permanent Head in the circumstances described in the "unless" clause. The power is removed, however, only during the period of twelve months or during "such longer period as the Permanent Head allows". Once the specified period has expired, the power conferred by sub-section 3(b) is revived and may be exercised by the Permanent Head. The twelve months period, or the extended period, "is to be calculated from the time that the applicaticn in the authorized form is made under s.40AA(1). By way of parenthesis it is noted that even at the present time, no application has been made by Zayen under s.40AA(1) with respect to McKean Street. In fact no such application can be made since the building at McKean Street cannot be used as a nursing home. The letter of 3 October 1977 illustrates also other logical difficulties arising in the application of Part V of the National Health Act. Because of the meanings to be given to the phrases "nursing home" and "nursing home care" an application under s.40AA(1) can be made only when nursing home care is being provided in premises, or in other words where a person is carrying on the business or undertaking of providing nursing home care in a nursing home. It is clear -13- that in October 1977 neither Zayen nor the Matthies were carrying on that business or undertaking at McKean Street. In fact, the buildings were not suitable to be used for that purpose. ' r . The letter did not state what interest the Matthies had in McKean Street. The Court does not know what interest, if any, the Matthies had at that time in McKean Street. [In the letter the words "to build" suggest that the Matthies were the owners in fee simple of McKean Street, while the word "operate" suggests that they were planning to be the owners of the business or undertaking to be carried on at that site. The distinction between the owner in fee simple of premises on which a nursing home business or undertaking is carried on and the owner of that business or undertaking may be of importance; see Nagrad Nominees Pty. Ltd. v. Howells (1981) 54 F.L.R. 170 and on appeal (1982) 43 A.L.R. 283. In 54 F.L.R. at p.172 I said: "Under s-40AA the proprietor of premises, being a nursing home, may apply for approval of the premises as an approved nursing home: s.40AA(1). In this subsection the word 'proprietor' does not have the defined meaning but refers to the owner of premises. The approval sought is with respect to premises." At p.174 I said: -14- "It should be noted that approval and conditions are given and imposed with respect to premises being a nursing home. A proprietor, in the defined sense, of a nursing home need not be the proprietor of the premises in which the nursing home business is being conducted. The proprietor of an approved nursing home is the owner of the business or undertaking carried on in the nursing home. The fees to be charged are in respect of accommodation and nursing care of a kind provided in a nursing home. The fees are paid to the proprietor of that business. To ' give effect to that concept, s.40AD provides for the proprietor, namely the owner of the business carried on at the approved nursing ~ home, to make application for an alteration to the conditions applicable to the nursing home. The demarcation therefore made by the Act is between the owner of the fee simple of the site on which the nursing home is being conducted and the owner of the business being carried on at that site." é The judgments in the Nagrad cases had not been given at the time that the Matthies wrote their letter to the Department. Counsel for the Minister submitted that the Court should reconsider the opinion expressed in the passages quoted from the Nagrad case. On appeal the Full Court did not consider that matter. The matter has been reconsidered and is confirmed. The defined meaning of the word "proprietor" is to apply unless a contrary intention appears. In the present case, in my opinion, a contrary intention does appear in s.40AA(1). The relevant phrases appearing in s-40AA(1) are -15- "a proprietor of premises being a nursing home, may apply ... for approval of the premises as an approved nursing home". The emphasis is on the word "premises". Under sub-section (2) the Permanent Head shall approve "premises as an approved nursing home". Consistent phraseology is used in sub-sections (3), (4), (5A), both before and after the 1981 Act, and sub-section (6), s.41(1) and s.45(2). That phraseology is to be contrasted with that used in other sections contained in Part V, namely the phrases "the proprietor", "the proprietor of the nursing home", "the proprietor of a nursing home" or "the proprietor of an approved nursing home"; see for example sub-sections (5A), both before and after the 1981 Act, s.40AD(1), s.40AE(1i) and (2), s.40AF, s.40AG prior to its repeal in 1981, s.41{1), (3) and (4), s.43, s.43A, s.44 and s.45(1). In s.40A(1), the use of the phrase "the proprietor of premises" suggests that the owner of the fee simple on which the nursing home is being conducted should make the application. Otherwise the word "proprietor" could have been used simpliciter, or the extended phrase "proprietor of a nursing home" could have been used. In either case the statutory meaning of the word "proprietor" would have made the position clear. Further, apart from the special case where an approval has been revoked under s.44(2), (see s.40AA(4)), the qualities or activities of a proprietor, as defined, are not relevant to -~16- the granting of approval under s.40AA(2). The power conferred by s.40AA(3) is related to "premises" within which nursing home care is provided. Section 40AA contains no provisions relating to the procedures to be followed when a request is made under the "unless" clause of sub-section (3). In paragraph (3)(b) the words 'in parentheses "(including premises proposed to be approved as nursing homes)" refer to premises with respect to which the Permanent Head has notified an applicant in writing that an application under s.40AA(1} will not be refused under sub-section (3) if made within the specified period. Where a request is made under the "unless" clause, the Permanent Head, quite properly, gives consideration to it by applying the matters referred to in paragraph (b) of that sub-section. The exercise of the power conferred by sub-section (3) is accelerated and the facts existing at the time of the request are the facts relevant to be considered by the Permanent Head. To that extent, if the Permanent Head in writing informs the person making the request that an application in the authorized form, if made within the prescribed time, will not be refused under sub-section (3) it can be said truly that the premises, the subject of the request, are "premises proposed to be approved" as a nursing home. They are to be taken into account by the Permanent Head in any relevant subsequent exercise of power conferred by paragraph {b) of sub-section (3) with respect to other premises. To that -17- extent, the financial interests of the proprietor of premises are protected and expenditure can be incurred in building the nursing home in the knowledge that provided the constraints of time are satisfied, the Permanent Head is under an obligation to approve the premises as a nursing home with all the consequential benefits that follow therefrom. In Victoria, the Commission controls and administers nursing homes. The National Health Act contains provisions under which proprietors of nursing homes are entitled to receive payments from the Commonwealth. Of necessity, there must be active co-operation between the State and Commonwealth administrations. One aspect of this is illustrated by the requirement that before forming an opinion under s.40AA(3)(b), the Permanent Head is required to consult with the authority in the relevant State, in the present case the Commission, responsible for the administration of nursing homes in that State. In practical terms, that prior consultation is effected through a Federal/State Co-ordinating Committee for Nursing Home Accommodation comprising officers from the Victorian Division of the Department, an officer of the Department of Social Security and officers of the Commission. In considering requests under the "unless" clause to s.40AA(3) the same procedures are followed as in an application under s.40AA(1). wd - 18 - In the present case, the Co-ordinating Committee at a meeting held on 21 October 1977 considered the Matthies' application as contained in the letter of 3 October 1977. Some of the material before the Co-ordinating Committee was set out in a document headed "Application for Approval in Principle - Summary". That summary is set out: ' "APPLICATION FOR APPROVAL IN PRINCIPLE —- SUMMARY NAME: Mr. & Mrs. K. Mathies [sic] ADDRESS: C/- 381 Punt Road, Richmond PROPRIETOR: ~ APPROVED BED CAPACITY: - PROPOSAL: To construct a 58 Bed Nursing Home at 191 McKean Street, North Fitzroy D.U.R.D. REGION: Central Melbourne Area, Region 11, L.G.A. 20 % OF AGED POPULATION: 11% 34921 NO. OF NURSING HOME BEDS IN AREA: 1363 PRIVATE 307 RELIGIOUS /CHARITABLE 499 STATE 557 RATIO OF BEDS EXISTING: 39.03 ADDITIONAL BEDS APPROVED IN PRINCIPLE: 166 (43.78) ? RATIO OF BEDS IF APPROVED (TOGETHER WITH RICHMOND PROPOSAL): 48.02(1677) STATUS OF NURSING HOME: RECOMMENDED/NOT RECOMMENDED COMMENTS 1. Proprietors of Canterbury Nursing Home and Masada Private Hospital. TIT te STEP TI CLI RRR A, Se me - 19 - 2. Approval in principle recently granted to construct an 87 bed nursing home in Essendon. 3. Further application for approval in principle to erect a 90 bed nursing home in Richmond under consideration." By way of explanation the "D.U.R.D." region refers to groupings of Local Government Areas within regions under the now defunct Department of Urban and Regional Development. Region 11 is known as the Central Melbourne Area and comprises the eight municipalities of the Cities of Melbourne, Port Melbourne, South Melbourne, St. Kilda, Prahran, Richmond, Collingwood and Fitzroy. "L.G.A. 20" refers to the municipality of the City of Fitzroy. The percentage of aged population refers to the estimate of persons aged sixty-five years or over residing within the region or, in appropriate cases, the L.G.A. In this case that percentage, being 11%, produces the estimate of 34,921 aged persons in the Central Melbourne Area Region. The ratio is the number of nursing home beds per 1,000 aged persons and for this purpose the private nursing home beds only are considered. At that time the Matthies, again pursuant to some unspecified arrangement with Zayen, had made application under the "unless" clause with respect to proposed nursing homes in Richmond and Essendon. The Richmond proposal was for ninety beds. The Co-ordinating Committee considered the application with respect to McKean Street and the following is an extract from the minutes of that meeting: - 20 - "3. The application for approval in principle as per the attached summary sheet were considered as follows:- 3. Applicant Proposal Comments Recommendation Mr. & Mrs. K. Mathies {sic] ' c/- 381 Punt Road, Richmond. To construct a 58 bed nursing home at 191 McKean Street, North Fitzroy. North Fitzroy is in the same D.U.R.D. region as the previous proposal i.e. Central Melbourne Area, Region 11, L.G.A. 20. There are 1363 nursing home beds in the area for an aged population totalling 11% of the population for the area. The ratio of beds is currently 39.03 and additional beds approved in principle 43.78. Should this proposal and the Richmond proposal be approved, the ratio would increase to 48.02. As indicated for the previous proposal, Mr. & Mrs. Mathies Fsic] satis- factorily operate Canterbury Nursing Home and Masada Private Hospital and have gained approval in principle for an 87 bed nursing home in Essendon. There is [sic] currently no nursing home beds in North Fitzroy and in view of the need for nursing home accommodation in the area, approval in principle is recommended for this proposal." - -~ 21 - The reference to the fact that the Matthies satisfactorily operate other nursing homes may have been relevant to an application under the Health Act (Vic.) but it is difficult to know its relevance under the ""unless" clause which was made pursuant to the National Health Act. Unfortunately at the time of the meeting "approval in principle" had been granted to another proposed nursing home in the North Fitzroy locality, now Known as the "Harold McCracken", but for some reason the number of beds approved in principle for that nursing home was not included in the figures in the number of additional beds approved in principle put before the Co-ordinating Committee. From the recommendation it appears that the Co-ordinating Committee considered the North Fitzroy area as being the relevant locality for the purposes of s.40AA(3). Acting on the recommendation of the Co-ordinating Committee, the Permanent Head decided to inform the Matthies that an application under s.40AA(1), if made within the specified period of twelve months, would not be refused under s 40AA(3). The information was conveyed in writing by a letter dated 5 December 1977 signed by an officer of the Department on behalf of a Director (Victorian Division) of the Department (hereinafter called "the Director"). The letter was addressed to Mr. K. Matthies only and was as follows: - - 22 - "Re: Proposed Nursing Homes at Richmond and North Fitzroy You are advised that approval in principle has been granted for you to construct a 90 bed nursing home at 33 Bendigo Street, Richmond and a 58 bed nursing home at 191 McKean Street, North Fitzroy. Such approval is current for twelve months and is not transferable. Would you please advise this Department when construction of the nursing homes has been completed so that inspections may be arranged prior to final approval being granted for the payment of Australian Government Benefits." This letter also illustrates the reckless disregard of the provisions of Part V of the National Health Act adopted by the Department. It purports to be an approval in principle to Mr. Matthies "to construct" a 58 bed nursing home at McKean Street. It is not in the form that if an application in the authorized form is made under s.40AA(1) within the twelve months period referred to in the "unless" clause, or such longer period as the Permanent Head allows, approval will not be refused under s.40AA(3). In all the circumstances it is difficult to see how the Permanent Head has power to impose a condition under the "unless" clause of s.-40AA(3) that the approval is not transferable. The condition appears to place a restriction on a person and not upon premises and questions may arise as to its validity. Further, the final paragraph of the letter appears to be misconceived. In the absence of an application being made in the authorized form under s.40AA(1), the Permanent Head has no power to approve premises as an approved nursing home. ~ 23 - Before he is obliged to grant the approval, he must be satisfied that the premises in respect of which the application is made are a nursing home as defined. It may be, as a matter of practical consideration, that if premises are fitted out and staffed and are waiting to receive patients, they may be considered to be a nursing home so as to enable the Permanent Head to grant the approval, but even then the grant of approval is dependent upon an application in the authorized form having been made. The use of the words "final approval" illustrates the confusion arising from the use of the phrase "approval in principle". In truth, the two matters are separate and distinct. Following the letter of 5 December 1977 there developed a long, sorry and confusing saga between Zayen, Mr. Matthies and the Department. Zayen did not keep the Department fully informed of what it was doing. The arrangements between Zayen, Mr. Matthies and Mr. Genser appear to have varied and changed. Decisions within the Department were being made but not always communicated to Zayen. Zayen had to obtain town planning approval to enable McKean Street to be used as a nursing home. Zayen had to appeal to the Town Planning Appeals Tribunal from a decision of the Fitzroy City Council to refuse planning permission. At the time of the hearing of the appeal in November 1978, Zayen was proposing to construct a 44 bed nursing home on the McKean Street site, but apparently it did not notify the - 24 - Department of that alteration to its proposal. The existing building at McKean Street was subject to preservation conditions imposed by the Historic Buildings Preservation Council. A building permit was obtained in June 1979. Permission had to be obtained under the Health Act (Vic.) before the building work could be commenced, s.182(4). That approval was obtained in July 1979. Complying with all these requirements occupied considerable time and was costly. For the purpose of the application under the Judicial Review Act, it is not necessary to refer to all those matters in any detail. By letter dated 22 March 1978 Zayen wrote to the Director as follows: "Re: Proposed Nursing Home situated at 191 McKean Street, North Fitzroy The Owners of the above-mentioned property hereby request that the permit to build a Geriatric Nursing Home be issued in the name of Zayen Nominees Pty. Ltd. The previous applicant, Mr. K. Matthies, is no longer a member of this Company and it is therefore requested that the permit be ammended [sic] and issued in the name of Zayen Nominees Pty. Ltd. of 381 Punt Road, Richmond." The reference in that letter to "the permit to build" and the request that the "permit be amended" are completely misleading and erroneous in law. Further, it is_not clear what is meant by the passage "the previous applicant, Mr. K. ~ 25 - Matthies, is no longer a member of this Company". This letter, however, raised a-red herring which was pursued for some time, but the waters remained muddy as a result of the lack of understanding and compliance with the provisions of the National Health Act. By an undated letter above the name of the Director and received by Zayen on 4 April 1978, the Department acknowledged receipt of the letter of 22 March 1978 and then continued: "You are advised that approvals-in-principle granted by this Department to any individual or organisation to construct or extend Nursing Homes are not transferable. The approval-in-principle to construct a 58 bed nursing home at 191 McKean Street, North Fitzroy was granted to Mr. and Mrs. K. Matthies. If Mr. K. Matthies was acting on behalf of Zayen Nominees Pty. Ltd., the approval-in-principle will be re-issued in the company name. If this is the case please advise the nature of Mr. Matthies' involvement with the Company. If Mr. Matthies was not acting on behalf of the Company a further application lodged on behalf of Zayen Pty. Ltd. will be necessary." The errors and misconceptions contained in that letter need not be stressed. Zayen replied by letter dated 12 April 1978 as follows: "In answer to your letter of the 31.3.'78 we wish to advise you Mr. Matthies was at all times acting on behalf of Zayen Nominees Pty. ~ 26 - Ltd. in endeavouring to obtain a permit for a 60 bed Nursing Home at 191 McKean Street, Fitzroy. . Mr. Matthies was to become a director of Zayen Nominees Pty. Ltd. but this did not eventuate." The reference to "60 bed" must be a mistake. In reply, a letter dated 23 May 1978 above the name of the Director read: "Thank you for your letters of 12 May, 1978. You are advised that the approvals-in-principle granted are transferable to the company name of Zayen Nominees Pty. Ltd." On the copy of that letter retained by the Department, at some unidentified time an unidentified person had written "Reverted back to Mathies" [sic]. By letter dated 6 November 1978 the Director wrote to Zayen as follows: "Approval In Principle Dated 21.11.77 North Fitzroy - 58 bed nursing home. Recently it was agreed by Commonwealth and State Health Authorities that current approvals in principle for the construction of new nursing home accommodation should be reviewed by Commonwealth/State Co-ordinating Committees in each State. Consequently all applicants who were granted approval in principle are requested to provide the following information regarding:- -~ 27 - (a) Actions taken to commence your project? (b) Details of funds already expended on this proposal; (c) Details of the people who will operate the nursing home. It is requested that the above information is [sic] received by this Department no later than Friday, 17 November 1978." Zayen replied by letter dated 9 November 1978 as follows: "Re: Approval In Principal [sic] dated 21/11/77 North Fitzroy — 58 bed Nursing Home. OO In reply to your letter of 6th November, 1978: ae We have appealed to The Town Planning Tribunal in reference to the Council's refusal to grant a Town Planning Permit. The date set for the appeal is 27th November, 1978. b. Funds expended: (i) Land Cost $160,000 (ii) Fees & Expenses $ 25,000 ce The Nursing Home will be operated by K. & B. Matthies, Suite 3003, 3rd Floor, Westfield Shopping Tower, Doncaster. 3108. Hoping that they are in order." Even though this letter was written about the time of the appeal being heard before the Town Planning Appeals Tribunal, no reference was made to the change in proposal from a 58 bed - 28 - nursing home to a 44 bed nursing home. The heading of the letter is misleading. It should be noted that with respect to McKean Street, the period of twelve months. referred to in the "unless" clause of s.40AA(3) expired on 5 December 1978, being twelve months after the date of the letter informing Mr. Matthies of the "approval in principle". It is not clear where the date 21 November 1977, being the date of approval in principle referred to in those two letters, was obtained. By letter dated 23 November 1978 the Director wrote to Mr. Matthies seeking information relating to a number of proposed nursing homes including three in which Zayen had an interest, namely McKean Street, Richmond and Essendon. By letter dated 29 November 1978 Mr. Matthies replied, but there is no evidence that Zayen knew of the contents of that letter. The relevant parts of that letter are set out: "Further to your letter dated the 23rd November, 1978, you are advised as follows - 3) The Nursing Home in Essendon will be conducted by my son Mr. John Matthies of 205 Bridport Street, Albert Park. 4) The Nursing Home at Richmond will be operated hy myself K. M. Matthies of 52 Simpson Street, East Melbourne. 5) The Nursing Home in Fitzroy has been reduced to 44 beds and approval for this has just been obtained from the Town and ~ 29 = Country Planning Authority. This Nursing Home will be operated by Sister Betty Matthies of 52 Simpson Street, East Melbourne. Details of the three remaining Nursing Homes referred to in your letter, could be obtained by writing to Mr. A. Genzer [sic] of 381 Punt Road, Richmond. I was the original Applicant for Richmond and Fitzroy." ' It should be noted that in paragraph 5 reference is made to the proposed reduction in the number of beds to 44. There is a slight difference between the contents of that paragraph and the letter from Zayen with respect to the proposed "operator" of the nursing home. t On any view, after 5 December 1978 the power conferred upon the Permanent Head by s.40AA(3)(b) was operative with respect to McKean Street, the prohibition on that power being exercised under the "unless" clause having expired. In the present case what happened after the letter of 29 November 1978 discloses confusion and uncertainties. Grave concern must be expressed as to the level of competence of the administration in Victoria by the Department in relation to Part V of the National Health Act. Ac the same time grave suspicions arise with respect to the motives of Zayen. In the absence of evidence, however, no. concluded opinion can be expressed on these matters. - 30 - For the purposes of the application under the Judicial Review Act it is sufficient to say that during the months following November 1978 the correspondence and evidence disclose that confusion reigned as to whether there was to be a 44 or 58 bed nursing home at McKean Street, the basis of recommendations made by the Co-ordinating Committee purporting to act under s.40AA(3) and the slavish adherence to D.U.R.D. regions and Local Government Areas. There was a failure to consider what was the "locality" for the purposes of s.40AA(3)({b) of the National Health Act and whether in that locality approved nursing homes, including premises proposed to be approved as nursing homes, made adequate provision for nursing home care. There was failure also to consider properly what was adequate provision for nursing home care in that locality. There was confusion relating to legal advice received and apparent confusion between the Department and the Commission. There are obvious differences in the wording of s.40AA(3)(b) of the National Health Act and sS-179(8) (aa) and s.182(4) of the Health Act (Vic.), but when the Commission has approved plans and specifications for proposed works, as it did with respect to McKean Street, thereby being of the opinion that the proposed nursing home at McKean Street would not be likely to increase the facilities for patient care in the locality beyond the needs of that locality, it is difficult to see how existing approved nursing homes, including premises proposed to be - 31 - approved as nursing homes in the same locality, made adequate provision for nursing home care in that locality. However, it is not for this Court to express an opinion on those matters. The material before the Court is sufficient to justify grave doubts as to the competence of the Government departments administering nursing home legislation in Victoria. ~ It must be remembered that much of what was being done within the Department was not known to Zayen. There is no evidence of what consultation, if any, was taking place between Zayen and the Matthies, but as late as January 1979 Mr. Matthies, as proprietor, was writing to the Department with respect to the proposed 44 bed nursing home at McKean Street. In April 1979, Mr. Matthies was interviewed by the Co-ordinating Committee concerning the extension of the period referred to in the "unless" clause of s.40AA(3). Following that interview and on the recommendation of the Committee, the Permanent Head, by means of a letter dated 10 April 1979 above the name of the Acting Director (Victorian Division) informed Mr. Matthies that "approval in principle" in relation to a 44 bed nursing home at 191 McKean Street had been renewed to 30 September 1979. The letter stated that the approval was not transferable. ~ 32 - By letter dated 23 July 1979 above the name of the Director, the Department wrote to Zayen outlining the position as seen by the Department. The letter contained the following paragraphs: "It is understood that the site at 191 McKean Street, North Fitzroy has been cleared presumably to commence construction of a nursing home. Consequently, I think you should be made fully aware of the conditions pertaining to approvals in principle to establish nursing home accommodation. Section 40AA(3) of the National Health Act 1953 provides that the proprietor who applies for approval of premises as an approved nursing home, may be refused approval unless the applicant has, within 12 months, been advised by this Department that the application for approval as a nursing home will not be refused. 'Proprietor' is defined in this Act as the owner of the business or undertaking carried on at the nursing home. To assess applications for approval in principle for premises to be approved as nursing homes, a Federal/State Co-ordinating Committee for Nursing Home Accommodation has been established. The approvals in principle in respect of the proposed nursing home accommodation at 191 McKean Street, North Fitzroy and 10 Fletcher Street, Essendon are in the name of Mr. & Mrs. K. Matthies on the basis that they will apply for approval of the nursing homes as the proprietors of the premises. There is no guarantee that these proposed nursing homes will be approved unless an application for approval is received from Mr. & Mrs. K. Matthies as proprietors of the premises. ty ' eee ~ 33 - As will appear later, 'Zayen is seeking a declaration that the letter from the Department dated 23 May 1978 constituted information given by the Permanent Head that an application for approval under s.40AA(1), if made by Zayen, would not be refused under s-40AA(3). Even if the Court had power to make such a declaration under s.16(1)(c) Judicial Review Act, no such declaration would be made. That letter stated: "Approvals-in-principle granted are transferable to the company name of Zayen Nominees Pty. Ltd." Even if it is possible in law to transfer any benefit or privilege arising under the "unless" clause of s.40AA(3) the subsequent facts confirm that no transfer took place. The words of the letter cannot in their ordinary meaning constitute a transfer. They do not state that the approval was transferred. The subsequent expiration of the period within which the application under s.40AA(1) could have been made without being capable of being refused under sub-section (3), was granted to and apparently accepted by Mr. Matthies. Its non-applicability to Zayen was made abundantly clear. Further, the word "application" in the "unless" clause must refer to an application under s.40AA(1) and the word "applicant" must refer to the person who subsequently makes the application under s.40AA(1). The question of transferability arises only because of the failure of the - 34 - Permanent Head to give information to an applicant in the form stated in the "unless" clause. By letter dated 6 September 1979, the solicitors for Zayen wrote to the Director concerning "Nursing Home at 191 McKean Street, North Fitzroy". Enclosed with the letter was a copy of the certificate of title to McKean Street showing Zayen as the registered proprietor of the land and a copy of the plans and specifications of the proposed nursing home in the name of Zayen. In all probability those plans showed a 44 bed nursing home. The letter stated also that an application "For Approval of Premises" was enclosed, but in fact no such application was enclosed. It stated that "the clearing of the site has been completed and a contract has been let" for the construction of the building. It stated that negotiations had taken place with the Matthies but had proved to be fruitless, that Zayen was the owner of the site and would "own the business of conducting a 44 bed nursing home on" the site and requested that Zayen "be recognised as the proprietor of the undertaking to be carried on at the nursing home under the National Health Act". The Department treated this letter as an application under the "unless" clause of s.40AA(3) but for some unexplained reason considered it referred to a 58 bed nursing home. ~ 35 - The further period allowed to Mr. Matthies under the "unless" clause expired on 30 September 1979. There is no evidence that Mr. Matthies made an application under s.40AA(1) before that date. The request contained in the letter of 6 September 1979 was considered at a meeting of the Co-ordinating Committee held on 18 September 1979. The Committee considered the existing "approval in principle" under the heading "B.J. & K.M. Matthies" and the relevant part of the minutes is set out: "191 McKean Street North Fitzroy: ({A.I.P. expires 30.9.79) As the approval-in-principle was due to expire, and that B.J. & K.M. Matthies had made no progress, on the above sites the Committee recommended that the applications for renewal of approval not be granted." The Committee considered the request by Zayen under the heading "Zayen Nominees Pty. Ltd." and the relevant part of the minutes is set out: "(b) Construct a 44 Bed Nursing Home at 191 McKean Street Fitzroy The Committee regarded this as a new application for approval in principle. The Commonwealth Department of Health was advised that little progress had been made. It was noted that this is the same proposal for which B.J. and K.M. Matthies were granted approval in principle on 21 November 1977. - 36 - Zayen Nominees Pty. Ltd. have the legal right to proprietorship on the property. The Committee considered that in view of the moratorium on new applications explained in the minutes of the meeting 31 July 1979, and the fact that the L.G.A. is adequately serviced by the Mount Royal Nursing Home, this application is not recommended. Zayen Nominees Pty. Ltd. were advised in letter dated 20 July 1979 (copy enclosed) that they had no guarantee under Section 40AA3 of the National Health Act 1953 in respect of this proposal." With respect to each of those matters the Committee had before it a summary in a form similar to that set out earlier in these reasons. In the Matthies' summary the proposal was stated as "To renew approval for 44-bed Nursing Home at 191 McKean Street, North Fitzroy". In the Zayen summary, the proposal was stated as "To conduct a 44-bed Nursing Home at 191 McKean Street, North Fitzroy". In each summary the details of numbers were the same: "D.U.R.D. REGION : Region 1l (Central Melbourne) % OF AGED POPULATION : 12.0 NO. OF NURSING HOME BEDS IN AREA: PRIVATE 344 RELIGIOUS/CHARITABLE 524 STATE 519 RATIO OF EXISTING BEDS : 44.4 NUMBER OF ADDITIONAL BEDS APPROVED IN PRINCIPLE : 282 RATIO OF EXISTING AND A.I.P. BEDS : 53.4 RATIO IF PROPOSAL APPROVED : 54.8 MUNICIPAL AREA : L.G.A. 20 (Fitzroy) % OF AGED POPULATION: 9.7 -~ 37 - NO. OF NURSING HOME BEDS IN AREA : PRIVATE RELIGIOUS/ CHARITABLE STATE TOTAL Nil RATIO OF EXISTING BEDS NUMBER OF ADDITIONAL BEDS APPROVED IN PRINCIPLE : 54 RATIO OF EXISTING BEDS AND A.I.P. BEDS : 27.3 RATIO IF PROPOSAL APPROVED : 49.5" Comments were made in each summary, namely in the Matthies' summary, "This approval was originally granted on 21 November 1977 and is due to expire on 30 September 1979", and in the Zayen summary, "This approval had been granted to K. & B. Matthies and expires on 30 September 1979". It is not clear whether the additional beds approved in principle in the local government area of Fitzroy refers to McKean Street or to the proposed Harold McCracken Home which had been overlooked in 1977. In the recommendation relating to Zayen, reference is made to the Mount Royal Nursing Home. There is no evidence of its type, its location or the number of beds provided in it or whether it had been taken into account when the first McKean Street request was made. It is not within the municipality of the City of Fitzroy, but from the bar table it was stated to be situated at Poplar Road, Parkville. The reference to "the moratorium" is to a decision taken by the Co-ordinating Committee at its meeting held on 31 July 1979: - 38 - "... 'that a moratorium be established in relation to new applications to provide nursing home accommodation in Victoria, due to the ratio of nursing home beds in the State of Victoria now having exceeded 50 beds per thousand aged 65 and over, and because the Health Commission is continuing its review of hospital beds throughout the State'." The moratorium was to apply for a period of three months. By letter dated 26 October 1979, being almost at the end of the moratorium period, the First Assistant Director-General, Insurance, Hospitals and Nursing Home Division, at Canberra wrote to the Director, who at all relevant times has been a member of the Co~ordinating Committee, informing him in substance that the moratorium was not authorized under the National Health Act and that each individual application for approval should be considered on its merits: " eee As you are aware the Commonwealth/State Co-ordinating Committees were established in each State by agreement between the Commonwealth Minister for Health and each of the State Health Ministers. These Co-ordinating Committees were established for the purpose of advising the Permanent Head and enabling him to assess each individual application for approval in accordance with the requirements of section 40AA of the National Health Act and section 4 of the Nursing Homes Assistance Act. - 39 - The relevant sections of the Acts concerned specifically require the Permanent Head to assess applications on the basis of need for additional nursing home beds in the locality in which the premises to which the application relates are to be located. In these circumstances it is considered that a moratorium cannot be declared on applications to provide nursing home accommodation simply because the average ratio of nursing home beds per 1 000 persons aged 65 years and over for a state as a whole exceeds the statistical guideline of 50 beds per 1 000 aged. There May still be regions within the State where additional nursing home beds are required. There may also be cases, such as those involving continuity of care, in which applications in areas with more than 50 beds per 1 000 aged merit the support of the Committee. An application for additional nursing home beds should not therefore be refused under Commonwealth legislation purely on the basis of a moratorium on the provision of new nursing homes, imposed by the Co-ordinating Committee. If the Co-ordinating Committee wishes to make a negative recommendation on an individual proposal it must be based on an assessment of the need for the nursing home beds in accordance with the current guidelines issued for the assistance of the Co-ordinating Committees. In this regard it is noted that your Committee is still using the 1976 Census population figures in determining bed ratios, and does not appear to be taking account of excess recognised hospital beds available for the accommodation of nursing home type patients or existing long stay patients in approved hospitals. It is pointed out that the revised guidelines issued in late 1978 provide for current population estimates to be used and for Committees to take into account available recognised hospital beds as well as nursing home type patients currently accommodated in approved hospitals. Accordingly, it would be appreciated if the individual proposals listed in the attached schedule could be referred back to the Committee for further consideration in the light of the current guidelines with emphasis -~ 40 - on the specific comments made in respect of each proposal. In this connection it is important that the views of the parties on the Committees are clearly set out, particularly if there are various views expressed. If this is not included, all parties must accept that the views expressed are unanimous. u r eee Zayen was not informed of what was being done within the Department. By letter dated 19 December 1979, the solicitors for Zayen wrote to the Director regarding the nursing home at 191 McKean Street, North Fitzroy. Reference was made to previous correspondence and telephone conversations between a member of the firm of solicitors and Mr. Hede, an Assistant Director, Victorian Division, of the Department at Melbourne and the fact that further consideration was being given by the Department to the approval of the application by Zayen. The letter contained a summary of the history of the matter set out in nine numbered paragraphs. Three of those paragraphs are set out: "7. It would appear that the only change in the situation or circumstances since the Department's letter of April 10, 1979 is the cessation of Mr. and Mrs. Matthies to have any involvement in the above project and the change in the identity of the applicant from Mr. and Mrs. Matthies to our client. 8. Having regard to the fact that the Department has approved our client's application with reference to the ~Al- proposed nursing home at 33 Bendigo Street, Richmond (now in actual operation) and has very recently approved our client's application with reference to the proposed nursing home at 10 Fletcher Street, Essendon, it would appear that the change in the identity of the applicant should not meet with the disapproval of the Department and cause it to refuse or fail to approve our client's application under Section 40AA of the National Health Act in respect of the proposed nursing home at the above premises. 9. Our client is prepared (and indeed has ~ been prepared for some considerable time) to continue with the construction of the nursing home immediately upon the approval of its application with a view to having the home in operation and admitting people as residents to the home upon completion of construction and registration by the State Authorities." The letter then concluded: "We now respectfully request on behalf of our client that the Department give sympathetic consideration to its application and await your advice herein." By another letter dated 29 January 1980, the solicitors wrote to the Director referring to McKean Street and a further telephone conversation with Mr. Hede and gave details of expenditure incurred by Zayen with respect to McKean Street. By another letter dated 4 February 1980, the solicitors wrote to the Director regarding McKean Street enclosing a testimonial in favour of Zayen. - 42 = By letter dated 6 February 1980 above the name of the Director, receipt of the letter of 4 February 1980 was acknowledged. The letter then stated: "Your application on behalf of your client Zayen Nominees Pty. Ltd., to construct a 58 bed nursing home at 191 McKean Street North Fitzroy will be considered at the next meeting of the Federal/State Co-ordinating Committee on Nursing Home Accommodation and you will be notified when a decision is made." Zayen's application was considered at a meeting of the Co-ordinating Committee held on 7 February 1980. The Director and Mr. Hede were present as members. The Committee expressed concern at the delays occurring within the Department with respect to confirmation of recommendations made by the Committee and in particular that confirmation of the recommendations made at meetings held on 25 October 1979 and 13 December 1979 had not then been received. Under the heading "Zayen Nominees Pty. Ltd." the minutes stated: "The applicant's proposal to construct a 58 ped nursing home, at 191 McKean Street, North Fitzroy was reviewed by the Committee. The Approval in Principle, originally held for a 44 bed Nursing Home by B.J. and K.M. Matthies at this address, was not recommended for reapproval at the 18 September 1979 meeting, as little progress had been made. Health Commission representatives mentioned that they had passed plans for the 58 bed nursing home proposal. Department of Health representatives stated that as the original approval in principle was -~ 43 - granted to B.J. and K.M. Matthies this proposal should be treated as a new application. The Committee considered that in view of the L.G.A. being adequately serviced by the Mount Royal Nursing Home and that no additional information to the original application has been supplied this application is not recommended for approval." The minutes in evidence do not include a summary of the application by Zayen. In view of the history of the matter and particularly the letters from Zayen's solicitors of 6 September 1979, 19 December 1979 and 29 January 1980, and the telephone conversations between Mr. Hede and a solicitor for Zayen, the statement set out in the minutes that no additional information had been supplied can only be said to be remarkable. Some three months after the meeting, the Department, by letter dated 12 May 1980, wrote to Zayen's solicitors as follows: "I refer to your letter of 6 September 1979, on behalf of Zayen Nominees Pty. Ltd., which detailed a proposal to establish a nursing home of 44 beds at 191 McKean Street, North Fitzroy. The National Health Act requires that, in considering an application for approval for the construction or acquisition of new nursing home accommodation or for the provision of any additional nursing home accommodation at an existing nursing home, regard shall be had to the adequacy of the existing accommodation available (including premises proposed to be approved as nursing homes) in the area in - 44 - which the additional accommodation is to be provided. It is also necessary under that legislation to consult with the State authority responsible for the administration of nursing homes. For this purpose a Commonwealth/State Co-ordinating Committee on Nursing Home Accommodation has been established in Victoria. This Committee has examined your application and made its report to the Director-General of Health. Your application has been considered in ' accordance with Section 40AA of the National Health Act but I have to inform you that the application has not been approved. The reason for reaching this decision is that, in the area in which North Fitzroy is located, it is considered that an adequate number of nursing home beds already exists or has already been approved to be established to cater for the needs of the aged population. I must advise that, if you were to proceed with the construction of this nursing home, patients accommodated in the nursing home would not be eligible to attract Commonweaith Government financial assistance. With reference to your letters of 19 December 1979 and 4 February 1980, it is advised that the proposal has now been reconsidered and you will be further advised when a decision has been made." It is not clear whether the letter was written with reference to the decision made by the Permanent Head following the recommendation of the 'Co-ordinating Committee meeting held on 18 September 1979. The minutes of the meeting held on 7 February 1980 and in evidence, do not contain, on their face, a recommendation. The letter in its first paragraph refers to the letter from Zayen's solicitors of 6 September 1979 only. The last paragraph refers to two of the three ee SER NI ES FETAL IE Aaa ArmA eC PL mm ~ 45 - subsequent letters and states that the proposal has now been reconsidered and advice will be given when a decision has been made, presumably at some time in the future, by the Permanent Head. The minutes of the meeting of the Committee held on 7 February 1980 make no reference to these letters. By letter dated 16 May 1980 the solicitors for Zayen acknowledged receipt of the letter of 12 May 1980 and stated that since it contained no reference to their letter of 29 January 1980, they enclosed a copy thereof and looked forward to receiving advice when a decision had been made. The matter came before the meeting of the Co-ordinating Committee heid on 29 May 1980. The Director and Mr. Hede were at the meeting. The format of the minutes and the summaries of applications had been altered from those previously used. The letter of 16 May 1980 was treated as a new proposal with respect to McKean Street. It was given Application No. 20 and a Registration No. vV56. Under the heading "Application and Proposals" the following appears: "Application for Reapproval of 44 beds previously not approved. Additional information now provided in support of 58 bed nursing home." Under the heading "No. of beds" appears the number "58" and under the heading "Recommendation" appear the words "Not Approved". The detailed information concerning Zayen was set out in an attachment. It included the proposal number, V56, ~ 46 - and date of application, 16 May 1980. It gave details of other "Nursing Homes owned/operated" by Zayen. The proposal was stated to be for a new nursing home of 58 beds and the purpose of the proposal was stated to be the need for additional beds in the area based on beds to aged population ratio. It was stated further that the home was to be privately financed and that finance was available. Another comment made was that a previous application for 44 beds at the site had not been approved. The Committee's comments are set out: "Department of Health representatives advised that the application was being reconsidered due to a letter from Macpherson and Kelley Solicitors acting on behalf of Zayen Nominees Pty. Ltd., dated 29.1.80 not being considered in conjunction with Zayen Nominees Pty. Ltd. application at the 7.2.80 Meeting. An inspection of the site by departmental officers ascertained that the site has not been cleared." The reference in these comments to the failure to clear the site is misleading. The existing building is subject to restrictions by the Historic Buildings Preservation Council on its demolition. Parts of the building had to be incorporated in the 'new nursing home to be erected on the site. This should have been made clear from a consideration of the plans and specifications supplied to the Health Commission and which formed part of the material before the Commission prior to it agreeing to the construction of the nursing home. The site had been "cleared" preparatory to ~A7 ~- construction work being commenced, but the existing building had not been completely demolished. It could not be so demolished. This gave rise to misunderstanding because persons who inspected the site did not know fully the facts relating to the proposed nursing home when they reported to the Committee the result of their inspections. The recommendation of the Committee is set out: ~ "The committee reaffirmed it fsic] previous decision not to recommend approval in principle because of lack of progress with the proposal." In reality, there was "lack of progress" because "approval in principle" had not been given. Before the Committee also was a page listing bed/population statistics. These were based on an estimation of persons aged 65 and over as at June 1979 and were calculated pursuant to an undisclosed formula on figures taken from the June 1976 Census. The Committee did not base its recommendation on these numbers. In the' L.G.A. of Fitzroy, the estimated aged population was 1748, existing beds (Harold McCracken Home) 50 being a ratio of 28.6, no approvals in principle had been granted, the current application for 58 beds constituted a ratio of 33.2, and if granted, then a combined figure of 108 beds with a ratio of 61.8 would result. Similar figures were given with respect to the D.U.R.D. region of Melbourne and with respect to - 48 - Fitzroy and the surrounding L.G.A.'s of the Cities of Melbourne, Brunswick, Northcote and Collingwood individually and collectively. By letter dated 4 June 1980, Zayen wrote to the Permanent Head in Canberra. The letter referred to the long delay in deciding the request and asked that the matter be expedited. The letter contained also a summary of the history of the matter. No reply having been received, the solicitors for Zayen by letter dated 22 September 1980 wrote again to the Permanent Head. The letter referred to a telephone conversation held on 18 September 1980 between a member of the firm of solicitors and a Mr. Corcoran in Canberra concerning the clearing of the site and confirmed details of expenditure and the effect of the direction by the Historic Buildings Preservation Council. The letter set out also a more detailed history of the matter which was substantially correct insofar as the solicitors had knowledge of what had eccurred and did not have knowledge of the machinations within the Department and the Co-ordinating Committee. The last paragraph of the letter is set out: "We are at a loss to understand the difficulty of the Department in granting approval to our client's application having regard to the fact that there has been no change in circumstances since the application made by Mr. Matthies other than an alteration in the proprietor. = - 49 — Accordingly, for the reasons set out in our letters of December 19, 1979, January 29, 1980 and in this letter, we earnestly request that the Department give sympathetic and speedy consideration to our client's application for approval under the National Health Act." By letter dated 17 November 1980, the Director advised the solicitors that the Permanent Head had directed the Co-ordinating Committee to reconsider the application "re: zayen Nominees Pty. Ltd., 58 bed nursing home proposal" at McKean Street "in view of additional information which had been submitted to the Department" and that the matter would be included in the agenda of the meeting scheduled for December 1980. > The Committee met on 19 December 1980. The Director and Mr. Hede attended. Under "New Proposals", appeared V155, ""Zayen Nominees Pty. Ltd. Resubmission. Construct a 58 bed nursing home at North Fitzroy", a 58 bed proposal and a recommendation "not approved". The detailed information given was similar to that given to the Committee on 29 May 1980 except the date of the application was stated to be "14 November 1980". It is not clear how that date was ascertained. The following comments appear: "*29.5.80 Meeting - This case not recommended for approval. Central office wants Committee to reconsider matter due to additional information." "Department of Health representatives explained the history of this case. The ~ 50 ~ Committee noted that Zayen Nominees Pty. Ltd. has never been granted approval to establish nursing home accommodation at 191 McKean Street, North Fitzroy. The Committee was informed that the digging of foundation trenches had commenced the day before the Committee meeting which would indicate that some funds were being spent by the applicant. Representatives of the Health Commission advised that plans for the building had been approved in 1979 and that the matter is to be further examined by the State Crown ' Solicitor." ~ The recommendation was: "The Committee members were unanimous in their recommendation that this proposal not be approved due to the bed ratio exceeding 50/1000 in the DURD Region and due to the adequacy of beds in the L.G.A. and surrounding areas." The decision of the Permanent Head was conveyed to the solicitors by letter dated 12 January 1981 above the name of the Director. The letter is set out: "I refer to your letter of 22 September 1980 which detailed a proposal by 4Zayen Nominees Pty. Ltd. to establish a nursing home of 58 beds at 191 McKean Street, North Fitzroy. The National Health Act requires that, in considering an application for approval for the construction or acquisition of new nursing home accommodation or for the provision of any additional nursing home accommodation at an existing nursing home, regard shall be had to the adequacy of the existing accommodation available (including premises proposed to be approved as nursing homes) in the area in which the additional accommodation is to be provided. - 51 - It is also necessary under that legislation to consult with the State authority responsible for the administration of nursing homes. For this purpose a Commonwealth/State Co-ordinating Committee on Nursing Home Accommodation has been established in Victoria. This Committee has examined your application and made its report to the Director-General of Health. Your application has been considered in accordance with Section 40AA of the National Health Act but I have to inform you that the application has not been approved. ~ The reason for reaching this decision is that, in the area in which North Fitzroy is located, it is considered that an adequate number of nursing home beds already exists or has already been approved to be established to cater for the needs of the aged population. I must advise that, if you were to proceed with the construction of this nursing home, patients accommodated in the nursing home would not be eligible to attract Commonwealth Government financial assistance." The stated reason for the refusal to grant the "approval in principle" is set out in the penultimate paragraph of that letter. The contents of the letter disclose a number of misconceptions held by the Department concerning the application of the "unless" clause of s.40AA(3). The Judicial Review Act had come into operation on 1 October 1980. In all probability Zayen could have sought under that Act an order of review of that decision of the Permanent Head. However, Zayen decided to seek a review of that decision under s.45 of the National Health Act. By ~ 52 - letter dated 27 June 1981, the solicitors wrote to the Minister, "pursuant to the provisions of section 45 of the National Health Act, we write for the purpose of requesting a review of the decision not to approve the above premises as an approved nursing home". The letter set out in some detail a history of the whole matter commencing with the original "approval in principle" notified in the letter to Mr. Matthies dated 5 December 1977. The letter concluded: "In summary, we are at a loss to understand the failure of the Department to grant its approval of our client's application having regard to the fact that there has been no change in circumstances since the initial approval was granted to Mr. & Mrs. Matthies and renewed by the Department on April 10, 1979 other than an alteration in the identity of the applicant. For all of the foregoing reasons, we ask you to review the decision of the Department. We have attempted to summarize the history of the site, the time effort and monies expended by our client to date, and the reasons why it feels that the failure of the Department to grant approval are not justified. We would be prepared and indeed request an opportunity to meet with you for the purpose of answering any queries you may have and expounding on the items contained in this letter. We now await your decision herein." Officers of the Department prepared for the Minister a summary of the matter described as "Appeal under Section 45 of the National Health Act - Ministerial representations by Macpherson & Kelley, Solicitors, on behalf of Zayen Nominees Pty. Ltd.". The summary had an attachment - 53 - to it setting out the background to the matter. These were lengthy documents. It is not necessary to quote them. It is sufficient to say that they contained a number of misconceptions and errors which are made apparent from the facts already set out relating to reports on the work done on the site as discovered on inspection and were confused by lack of understanding of the requirements of the Historic Buildings Preservation Council. The following paragraphs are taken from the attachment: "The Committee after reconsidering the proposal reaffirmed its previous recommendation that approval-in-principle not be granted on the basis that the area is adequately serviced for nursing home accommodation. The relevant bed/population statistics advised by the Committee are:- Without 58 Bed With 58 Bed Proposal Proposal Beds Ratio Beds Ratio L.G.A. 50 28.6 108 61.8 L.G.A. and Environs 1078 57.6 1282 68.5 Region 1541 53.6 1838 63.9" The following paragraphs are taken from the summary: "5. A complication in this proposal is that the Health Commission of Victoria have advised that their Crown Solicitor has stated the Commission's approval of the Matthies' plans on 25 June 1979 remains valid for Zayen Nominees. As a result, the Commission has stated, on legal advice, that it must stand by its decision to approve registration and has - 54 - requested that 'earnest consideration be given to the approval-in-principle' by this Department. However, the question of State registration is quite separate from Commonwealth approval-in~-principle for nursing home benefit purposes. There are already adequate beds in the North Fitzroy area and the recurrent cost to the Commonwealth of each bed in Victoria is some $12 000 per annum. 6. The Department has supported the Committee's recommendations in this case and after further examination of the case, the decision not to grant approval-in-principle to Zayen Nominees is endorsed. In light of the circumstances outlined it is recommended that the Department's decision be upheld and that you disallow the appeal under Section 45 of the National Health Act. 7. An appropriate response to the Solicitors, Macpherson and Kelley is attached for your signature should you concur." By letter dated 29 June 1981, the Minister replied to the request for review under s.45 of the National Health Act as follows: "I refer to your recent letters on behalf of Zayen Nominees Pty. Ltd., concerning their application for approval in principle to construct a nursing home at 191 McKean Street, North Fitzroy, Victoria. I regret the delay in finalising this matter but you will appreciate that the detailed matters raised by you necessitated careful examination of the facts and obtaining reports within my Department. The National Health Act provides that in considering an application for approval of proposed new nursing home accommodation, regard shall be had to the adequacy of the existing accommodation available (including premises proposed to be approved as nursing homes) in the area in which the additional accommodation is to be provided. Provision is also made for consultation with the State -~ 55 - Government authority responsible for the administration of nursing homes. For this purpose a Commonwealth/State Co-ordinating Committee on Nursing Home Accommodation has been established in each State consisting of representatives of my Department, the Commonwealth Department of Social Security and the relevant State Government health authorities. ° These Co-ordinating Committees consider applications and submit a report and recommendation to my Department for final decision on each individual proposal. While the Committees operate with a considerable degree of flexibility it has been necessary to issue broad guidelines to be followed by each Committee, in order that a uniform approach may be achieved throughout the Commonwealth. In assessing the need for proposed new nursing home accommodation, the Committees have regard to the situation existing in the relevant region and where appropriate the local Government area or surrounding areas. Another important factor, and one that is used by the Co-ordinating Committees as the main guideline in assessing the need for additional nursing home beds in a particular locality, is that where the ratio of existing beds (including those that have previously received approval in principle) exceeds 50 per thousand persons aged 65 years and over, approval in principle should not be recommended unless there are special circumstances. This ratio is recognised as one of the highest in the world. My Department informs me that an approval in principle was originally granted to Mr. and Mrs. B.J. Matthies in November 1977 in respect of a nursing home proposal involving 58 beds at the North Fitzroy address. Upon review in March, 1979, the approval in principle for this proposal was extended with a reduced number of beds (44). However, following the severing of the business arrangements between the Matthies and your clients, Zayen Nominees Pty. Ltd., in mid 1979, the approval in principle granted to the Matthies was not renewed in September. 1979 after consideration by the Co-ordinating Committee. - 56 - I am also informed that on 20 July 1979, the Victorian Divisional Office of my Department advised your clients that in terms of the relevant Commonwealth legislation, approvals in principle are not transferable and that any application by them (Zayen Nominees) for approval in principle in respect of a nursing home proposal on the North Fitzroy site, would need to be considered separately on its merits. In other words, there could be no guarantee that an application by them for approval in principle of such a proposal would be granted. Accordingly, your clients, through your office, submitted an application for approval in principle for a proposed 58 bed nursing home on the North Fitzroy site. The Victorian Co-ordinating Committee considered the application and following its recommendation, approval was not granted on the basis that an adequate number of nursing home beds already existed in the area to cater for the needs of the aged population. Formal advice of this decision was conveyed by the Victorian Divisional Office of my Department on 12 May 1980. A further application for approval in principle submitted by your office on behalf of Zayen Nominees was received by my Department on 16 May 1980. Additional information in support of the application was also forwarded by your office in September 1980. This detailed information together with the relevant facts of this proposal were closely considered by the Victorian Co-ordinating Committee. However, approval was not granted, again on the basis of adequacy of beds in the area. It was noted that should the proposal be approved, the ratio of beds to the aged population in the local government area of Fitzroy and surrounding areas would be well in excess of the guideline ratio of 50 per 1000 aged population. In view of your representations to me on this matter, I have examined carefully all the relevant facts of the case. However, I consider that the existing beds in the locality are now adequate to meet the needs of - 57 = the aged population and that the circumstances of the case do not justify the granting of an approval in principle. Consequently, I must uphold the Department's decision not to grant approval in principle for the Zayen Nominees' nursing home proposal at North Fitzroy. Finally, I have noted your request for an opportunity to personally discuss this matter with me, however, due to the pressures of parliamentary business, I am unable to accede to your request. I regret therefore that I am unable to be of further assistance to you and your clients, Zayen Nominees Pty. Ltd., in regard to this proposal." This letter reflects much of what appeared in the summary and its attachments. : Fa The application under the Judicial Review Act its original form was as follows: "Application to review the decision of the respondent dated 29th June, 1981 pursuant to s.45(3) of the National Health Act 1953 confirming the decision of the Permanent Head of the Department of Health to refuse the application of the applicant made pursuant to s.40AA of the National Health Act 1953 seeking approval of the premises of the applicant situate at 191 McKean Street, Fitzroy North as an approved nursing home pursuant' to sub-section (3) of s.40AA of the said Act." in During the course of the hearing and as the issues became clearer, leave was granted to Zayen to amend the application to read as follows: -~ 58 - "APPLICATION to review the decision of the Respondent dated 29th June 1981 under the National Health Act 1953 - (a) confirming the decision of the Permanent Head of the Department of Health refusing to inform the applicant that if it made an application under S. 40AA(1) for approval of premises known as 191 McKean Street, Fitzroy North as an approved nursing home it would not be refused under S. 40AA(3); and (b) refusing to direct the Permanent Head so to inform the Applicant." It was not disputed that the decision of the Minister set out in his letter of 29 June 1981 was a decision of an "administrative character" made under an enactment and thus could be made the subject of an order of review under s.5 of the Judicial Review Act. During the course of the hearing the question arose whether the Minister had jurisdiction to make a decision under s.45(3) of the National Health Act. This matter has been adverted to already. Counsel for Zayen contended that in s.45(2)(a) the words "an application for approval as an approved nursing home" were, on their proper construction, sufficiently wide to include the case where a person has informed the Permanent Head in writing that he proposes to make an application, i.e. under s.40AA(1), and requests the Permanent Head to inform him, in writing, that the application will not be refused under s.40AA(3) if made within twelve months of that notification by the Permanent Pera ~ 59 - Head or within such longer period as the Permanent Head allows (the "unless" clause of s.40AA(3)). That contention is not accepted. Section 40AA has been analysed earlier in these reasons. The provisions of the "unless" clause of sub-section (3) are designed to grant a benefit to a person who proposes to conduct a nursing home. If the Permanent Head gives the required information, the power conferred by that sub-section to refuse to grant an application under sub-section (1) is suspended during the relevant period referred to in the "unless" clause. The power to refuse to grant the application conferred by sub-section (4) remains. The true position is illustrated by the opening phrases of paragraph (b) of sub-section (3) where a distinction is drawn between "approved nursing homes" and "premises proposed to be approved as nursing homes". In my opinion, it cannot be said that the words "an application for approval as an approved nursing home" in s.45(2)(a), which mirror the words of s.40AA(1), include a request under the "unless" clause of s.40AA(3). In law, a person proposing to make an application under s.40AA(1) is free to construct a nursing home, provided the consent of the Commission under the Health Act (Vic.) is first obtained, and then make the application. If granted, he obtains the benefit of receiving Commonwealth funding. If not granted, he may request a review under s.45(2), but in law there is nothing to prevent - 60 - him from carrying on the nursing home business or undertaking ' without an approval under the National Health Act. Counsel for Zayen next contended that the "approval in principle" contained in the letter of 5 December 1977 constituted McKean Street an approved nursing home within the extended definition of the word "approved" since it was then "deemed to be approved" as a nursing home and that "approval in principle" under the "unless" clause of s.40AA(3) was a deemed approval. It followed, so it was contended, that a refusal to give the information under the "unless" clause was a refusal to grant an approval under s.45(2)(a) since it amounted to a refusal to grant an application for approval, albeit a "deemed" approval. That contention is not accepted. A reference to other provisions in the National Health Act and to the history of those provisions illustrates that "deemed" approvals refer to those nursing homes which by the National Health Act itself are expressly deemed to be approved nursing homes. This is made clear by reference to the National Health Act 1962, s.4, which first inserted the definition of "approved", and s.12 which inserted Part V into the National Health Act. In particular s.40(5) as contained in Part V provided that a certain type of nursing home "shall ... be deemed to be an approved nursing home" even though not approved under the provisions of s.40, which in form was - 61 = similar to the present s.40AA although at that time the provisions relating to "approvals in principle" had not been included. Those provisions were inserted into the National Health Act with operation from 1 January 1973; see s.8 National Health Act 1972. Sections 39 and 40 of the 1972 Act also made provision that certain types of nursing homes "shall ... be deemed to have been approved". Special reference is made to those provisions by s-40AA(3)(a) of the National Health Act. In my opinion the extended definition of the word "approved" is directed to include those nursing homes which by the Act are expressiy deemed to be approved. Further, reference has been made to the consequences which flow from an approval being granted. Those consequences do not flow from the granting of an "approval in principle". Similarly, if the contention was correct, the words in parentheses in s.40AA(3)({b) would be unnecessary. The difficulty of treating an "approval in principle" as an approval under s.40AA(2) is illustrated further by a consideration of the orders sought by Zayen. At the request of the Court, counsel for Zayen formulated those orders as follows: "A. DECLARATION that on 23rd May 1978 the Applicant was informed by the Permanent Head of the Department of Health that if it made an application under S. 40AA of ~ 62 = the said Act for approval of premises situate at and known as 191 McKean Street, Fitzroy North such application would not be refused under S. 40AA(3). B. ORDER that the decision of the respondent dated 29th June 1981 be quashed and the matter be remitted to the said respondent to be dealt with according to law and subject to the following directions: 1. That the applicant's Application be treated before the Respondent as a proposal in respect of a 44 bed nursing home. ~ 2. That the Respondent have regard in deciding the relevant locality for the purpose of S. 40AA(3)(b) of the National Health Act 1953 to the area from which the nursing home described in the said Application, when in operation, is likely to attract at any one time, the substantial proportions of its ' patients. 3. The Respondent have regard to the 1981 Census population figures when considering whether approved nursing homes (including premises proposed to be provided as nursing homes) in the locality in which the said premises are situated make adequate provision for nursing home care in that locality within the meaning of S. 40AA(3)(b) of the said Act. 4. The Respondent have regard in considering the applicant's Application to Exhibit H dated 23rd May 1978 and to the applicant's actions after that date in reliance thereon." A perusal of those proposed orders, the provisions of s.45(3) and the provisions of s.40AAmakes it clear that the substance of the complaint by Zayen is directed to the - 63 - "approval in principle" not being given and not to the refusal to grant an approval under s.40AA(2). Alternatively, counsel for Zayen contended that the decision of the Minister was made under s.138 of the National Health Act. Counsel for the Minister did not dispute that contention but that does not end the matter. ~ It is clear that the Minister purported to exercise the power conferred by s.45 of the National Heaith Act. Although nothing in the body of the letter dated 29 June 1981 from the Minister refers to s.45, all materials placed before the Minister specifically adverted to a review under s.45. In making his decision, he did not turn his mind to s.138. That section does not confer a direct power on the Minister to review a decision already made by the Permanent Head pursuant to the exercise of a power conferred upon him under the National Health Act. If the section had that meaning, s.45 would be unnecessary. For another example of a related power which would be unnecessary see s.58F as contained in Part VB of the National Health Act. In my opinion, the power conferred by s.138 does not authorize the Minister to review the decision of the Permanent Head. Section 138 enables the Minister to impose restrictions on the exercise of a power conferred upon the Permanent Head. A donee of a power may have an unfettered ar oer FAO RNR CO LY SNe a Ane een reat mee A ee - 64 - discretion conferred upon him by legislation. The legislation may impose express restrictions on the exercise of a power. An illustration of a restriction on the exercise of a power is contained in s.40AA(6)(c)(i) and (7) of the National Health Act. See also R. v. Hunt; Ex parte Sean Investments Pty. Ltd. (1979) 53 A.L.J.R. 552 and the two Nagrad cases already referred to. Restrictions on the exercise of a power may be imposed by implication. The power conferred by s-138 enables the Minister to impose restrictions on the exercise of a power by the Permanent Head under the National Health Act. That exercise of power is made subject to the lawful directions, if any, of the Minister. — Of necessity, those directions must have been given before the Permanent Head exercises the power conferred upon him. The directions may have general application. It is possible, even if improbable in relation to s.40AA(3), that the directions may be limited to a specific matter involving a specific nursing home. The directions, however, cannot remove a discretion conferred upon the Permanent Head. The power to give directions does not authorize the Minister to substitute his opinion for the opinion of the Permanent Head. At the very most, the directions are to be treated as guidelines to be considered by the Permanent Head in the exercise of the power conferred upon him. Reference was made in the Nagrad cases to the nature of guidelines and the fact that they should not be followed blindly. In the present case, guidelines were issued to the Co-ordinating Committee, LP in pi - 65 - but there is no evidence that they were directions given by the Minister under s.138. In the context of that section, the word "directions" is to be construed as meaning "an instruction how to proceed; an order; a precept" (Shorter Oxford Dictionary). It connotes an instruction how to proceed when, in the future, the Permanent Head exercises a power conferred upon him by the National Health Act. ~ In the present case there is no evidence that the Minister considered the power conferred upon him by 5.138 National Health Act. There is no evidence that prior to 12 January 1981, being the date on which the Permanent Head notified Zayen, in the exercise of the power conferred upon him by the "unless" clause of s.40AA(3), he refused the request by Zayen for "approval in principle", the Minister had given any relevant directions to the Permanent Head. There is no evidence that thereafter the Minister gave relevant directions under s.138. Rather, it appears that he has purported to exercise the power conferred by s.45 and has upheld "the Department's decision not to grant approval in principle for the Zayen Nominees' nursing home proposal at North Fitzroy". The Minister had no jurisdiction to make that decision. Likewise, the decision was not authorized by the National Health Act (see s.5{1)(c} and (da) Judicial Review Act). Accordingly, that decision must be quashed and set aside, s.16(1)(a) Judicial Review Act. - 66 - In its application Zayen sought the order of review on a number of grounds specified in s.5(1) Judicial Review Act, namely those appearing in paragraphs (b), (c), (d), (e), (£) and (h). The quashing of the decision by the Minister, of itself, does not assist Zayen. For that reason, the proposed orders were sought under s.16(1)(b) and (c) of the Judicial Review Act. To some extent Zayen is placed in a quandary. It desires to have the benefit of a decision under the "unless" clause as if that decision had been made in 1978 and, presumably, as if the Permanent Head had allowed longer periods within which to make an application under s.40AA(1) National Health Act. At the same time Zayen desires its application to be considered on the basis that there are now a greater number of aged persons living in the Fitzroy locality as disclosed in the 1981 Census figures. The Court has held that the Minister has no jurisdiction to make the decision he did and that that decision by him was not authorized by the National Health Act. It follows that the Court should not, in those circumstances, remit the matter to the Minister to be dealt with according to law. The declaration by Zayen relates to matters which occurred long before the Judicial Review Act had come into operation. The Permanent Head is not a party to these proceedings. Even if -~ 67 = the Court has power to make the declaration sought, in the exercise of its discretion, the Court should refrain from making that declaration. In the result, the only order made will be to quash the decision of the Minister. This is very unfortunate. Difficult questions of law have arisen and have been discussed at length. Nice questions have arisen concerning the true construction of the relevant provisions of the National Health Act and the Health Act (Vic.) and the inter- relationship of some of those provisions, how s.40AA(3)(b) is to be applied, the true nature of the "unless" clause, the method by which the locality in which a proposed nursing home is to be located is to be determined, the method of determining what is adequate provision for nursing home care in that locality and a number of ancillary matters. It is undesirable that the Court should express its views on any of these matters since at the most they would be obiter and in the nature of advisory opinions. Nevertheless, it should be noted that the evidence in this application discloses incompetence and delays which give rise to grave concern and disquiet in relation to the administration of the Department. rs Leave is granted twreath=paereye for costs. ceitity that this and the sixhy-six (46) oecedig pages are a true copy of the Reasons icr Judgment herein of the Honourable kir. Justice Nerthrep . a" Associate 7}.¢- torn" Dated: 25 March (1 F3 RAISER FR he he, i i Re seca eee oe a ented fe Ti Papa Lite eer bala oe