SUDGNIET No AG. Zeman CATCHWORDS ADMINISTRATIVE LAW - reasons for decision under s.13, Judicial Review Act - whether sufficient statement of reasons - whether operation of s.13 excluded by provisions of s.13(11) and Sch. 2(e) - whether decision is a decision "relating to the administration of criminal justice" or "in connection with the investigation ... of persons for any offences against a law of the Commonwealth" WORDS AND PHRASES - "in relation to" - "in connection with" Administrative Decisions (Judicial Review) Act 1977 (Cth) SS.5,6, 13(1),(1l1), 13A, Sch. 2(e),(£) Administrative Appeals Tribunal Act 1975 (Cth) s.28 Director of Public Prosecutions Act 1983 (Cth) s.6 Health Insurance Act 1973 (Cth) s.16A, item 793 in Sch.l. SAMUEL BOLAN HATFIELD v. HEALTH INSURANCE COMMISSION NO. G563 of 1986 Davies J. 27 August 1987 Sydney IN THE FEDERAL COURT OF AUSTRALIA ) NEW SOUTH WALES DISTRICT REGISTRY ) No. G563 of 1986 GENERAL DIVISION ) BETWEEN: SAMUEL BOLAN HATFIELD Applicant AND: HEALTH INSURANCE COMMISSION Respondent CORAM: Davies J. DATE: 27 August 1987 PLACE: Sydney MINUTES OF ORDER THE COURT DECLARES THAT: The applicant was entitled to request the respondent to furnish a statement in writing in accordance with the provisions of s.13(1) of the Administrative Decisions (Judicial Review) Act 1977 (Cth) in respect of the decision, communicated by letter dated 28 April 1986, that no further item 793 benefits would be paid to the applicant for services performed on referral from practitioners within the Edelsten Group until the respondent was satisfied that the pre-requisites of item 793 claims were being met. THE COURT ORDERS THAT: The applicant's costs of the application be paid by the respondent. Notes: Settlement and entry of orders 1s dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA ) NEW SOUTH WALES DISTRICT REGISTRY ) No. G563 of 1986 GENERAL DIVISION ) BETWEEN: SAMUEL BOLAN HATFIELD Applicant AND: HEALTH INSURANCE COMMISSION Respondent CORAM: Davies J. DATE: 27 August 1987 PLACE: Sydney REASONS FOR JUDGMENT In this proceeding, brought under s.13 of the Administrative Decisions (Judicial Review) Act 1977 (Cth) ("the Act"), the applicant, Dr Samuel Bolan Hatfield, seeks a declaration declaring that he was entitled to request the respondent, the Health Insurance Commission ("the Commission") to furnish to him a statement in writing in accordance with the provisions of s.13(1) of the Act. Section 13(1) of the Act provides:- "Where a person makes a decision to which this section applies, any person who is entitled to make an application to the Court under section 5 in relation to the decision may, by notice in writing given to the person who made the decision, request him to furnish a statement in writing setting out the findings on material questions of fact, referring to the evidence or other material on which those findings were based and giving the reasons for the decision." -2- The decision in question was a decision of a Mr Shane McAnulty, Senior Investigation Officer with the respondent. On 24 December 1985 Dr Hatfield had been advised that payment to him for assigned Medicare benefits for 1tem 793 in Schedule 1 of the Health Insurance Act 1973 (Cth) was being withheld by the Commission pending further enquiries. Thereafter, further enquiries were made by the Commission, Dr Hatfield was interviewed on two occasions and certain documents of Dr Hatfield and of other persons were seized pursuant to warrants issued under the Crimes Act 1903 (Cth) and were inspected. A letter of 28 April 1986 on the letterhead of the Commission and signed by Mr McAnulty advised inter alia:- "The reason of non payment of some monies to your client, which he has claimed under the Medicare system from this Commission, 1s as follows: your client submits to the Health Insurance Commission a number of direct bill claims for services performed and categorised under item 793 of the Medical Benefits Schedule. A large number of the claims submitted are matters which have been referred by practitioners working within the Edelsten Group of Surgeries. From our understanding, following two interviews with your client in December, 1985 and February, 1986, he then interprets the material, reports on his findings and submits a claim for a benefit payable under the item 793. I would now seek to draw your attention to the pre-requisites that appear as part of the item 793. One of those 1s that the referring practitioner and the practitioner to whom the patient is referred are not to be within the same "group of practitioners". The term "group of practitioners" is defined, by reference to the Health Insurance (Variation of Fees and Medical Services) (No 35.) 1984, No 310, Regulations at Section (sic) 26, which in turn refers to Section 16A of the Health Insurance Act. I will not seek to reiterate -3- those sections in this letter, however, should you have any difficulty please advise. Further to this, a number of Search Warrants were executed by Officers attached to the Australian Federal Police. Those warrants were relative to Bank accounts operated in your client's name at various Banks and documents seized indicated that your client and practitioners working within the Edelsten Group were sharing income derived from professional services. As such we would contend that your client is not eligible to claim item 793, and more properly should claim item 791 for referral work performed on behalf of the Edelsten Group. We have further sought legal advice on this matter and the facts are currently being reviewed by the office of the Director of Public Prosecutions. The Legal officer having knowledge of this matter is Mr Waddick, Sydney Office, and should you have further inquiries you should contact that officer. I would also seek to remind you that in the two interviews conducted with your client by officers at this Branch, he was shown a number of documents, cheques, vouchers, claims and other material which explained and substantiated the position we have adopted on this issue. I would also seek to advise that no further item 793 benefits will be paid to your client for services performed on referral from practitioners within the Edelsten Group until the office of the Director of Public Prosecutions has expressed an opinion on this matter and we are satisfied the pre-requisites of item 793 claims are being met. We will, however, continue to process all other claims submitted by your client." I read that letter as conveying, inter alia, a decision "that no further item 793 benefits will be paid to your client for services performed on referral from practitioners within the Edelsten Group until ..... we are satisfied the pre-requisites of item 793 claims are being met". That is the decision with respect to which the s.13 statement is sought. The letter also conveyed advice that the matter of past claims had been referred to the Director of Public Prosecutions, impliedly for the purpose -4- of his considering whether criminal proceedings against Dr Hatfield should be instituted and whether monies previously paid to Dr Hatfield with respect to such claims should be recovered, both matters within the purview of the Director of Public Prosecutions pursuant to s.6 of the Director of Public Prosecutions Act 1983 (Cth). At the hearing before this Court it was submitted that the letter of 28 April 1986 satisfied the requirements of s.13(1) of the Act. However, although the letter gave written notice of the decision and briefly stated the reasons for the decision, it did not set out "the findings on material questions of fact, referring to the evidence or other material on which those findings were based". The nature of the obligation imposed by s.13(1) has been considered on many occasions. See Re Palmer and Minister for the Capital Territory (1978) 23 A.L.R. 196, Ansett Transport Industries (Operations) Pty Ltd & Another v. Wraith & Others (1983) 48 A.L.R. 500, ARM Constructions Pty Ltd v. Deputy Commissioner of Taxation (1986) 65 A.L.R. 343 and Ansett Transport Industries (Operations) Limited v. Taylor (Federal Court of Australia, 10 April 1987). It 1s necessary that the statement be sufficiently explicit to enable the recipient to determine whether "the making of the decision was an improper exercise of the power conferred by the enactment", "the decision involved an error of law", the decision-maker took into account -5- an irrelevant consideration or failed to take into account a relevant consideration and like matters referred to in ss.5 and 6 of the Act. The letter of 28 April 1986 does not do that. It states the decision that has been made and briefly the reasons for the decision but it does not enable Dr Hatfield to determine whether there has been an error of law or whether any relevant consideration has not been taken into account or whether any irrelevant consideration has been taken into account. The statement does not identify the income of a group of practitioners as specified in s.16A of the Health Insurance Act 1973 (Cth) or the facts upon which Dr Hatfield's connection with that income or with that group of practitioners has been decided. It is not sufficient to refer to warrants relative to bank accounts operated in Dr Hatfield's name and documents seized which "indicated that your client and practitioners working within the Edelsten Group were sharing income". There must be greater information than this 1f Dr Hatfield 1s to be able to ascertain "whether there 1s in law a fault in his [the decision-maker's] process of reasoning so that he may attack the decision". (Iveagh (Earl of) v.Minister of Housing and Local Government [1964] 1 Q.B. 395 at 405). As the letter of 28 April did not satisfy the requirements of s.13(1) of the Act and as Dr Hatfield 1s a person interested in the decision expressed in that letter, I turn to -6- the question whether the respondent was bound to furnish a statement, on request, which complied with the requirements of s.13(1) of the Act. Section 13(11) of the Act provides that the section does not apply to a decision included in any of the classes of decision set out in Schedule 2 of the Act. Schedule 2 (e) specifies:- "(e) decisions relating to the administration of criminal justice, and, in particular - (i) (11) (111) (iv) decisions in connection with the investigation or prosecution of persons for any offences against a law of the Commonwealth or of a Territory; decisions in connection with the appointment of investigators or inspectors for the purposes of such investigations; decisions in connection with the issue of search warrants under a law of the Commonwealth or of a Territory; decisions in connection with the issue of Writs of Assistance, or Customs Warrants, under the Customs Act 1901; and decisions under a law of the Commonwealth or of a Territory requiring the production of documents, the giving of information or the summoning of persons as witnesses", The effect of s.13(11) of the Act and of para.(e) of the Second Schedule to the Act is to exclude from the operation of s.13 of the Act the following decisions, inter alia, namely "decisions relating to the administration of criminal justice" and "decisions in connection with the investigation, or -7- prosecution of persons for any offences against a law of the Commonwealth". Expressions such as "relating to", "in relation to", "in connection with" and "in respect of" are commonly found in legislation but invariably raise problems of statutory interpretation. They are terms which fluctuate in operation from statute to statute. As was said by Blackburn, Gallop & Neaves JJ. in Butler v. Johnston & Others (1984) 55 A.L.R. 265 at 268:- "It is clear that the words "1n respect of" can convey a meaning of wide import, but their exact width will depend upon the context in which they appear. Reference to individual cases on different statutes is of little assistance in determining their particular meaning. The court has to construe the meaning of the words with reference to the purpose or object underlying the legislation in which they appear (s 15AA of the Acts Interpretation Act 1901)." The terms may have a very wide operation but they do not usually carry the widest possible ambit for they are subject to the context in which they are used, to the words with which they are associated and to the object or purpose of the statutory provision in which they appear. In Ausfield Pty Ltd v. Leyland Motor Corporation of Australia Ltd (No 2)(1977) 14 A.L.R. 457 it was said at p.460 by Bowen C.J., with whom Northrop J. agreed, that the words "in relation to" in s.51(2)(a) of the Trade Practices Act 1974 require a direct relationship and by Deane J. at p.462 that the words require a relationship which is direct -8- and immediate. In Perlman v. Perlman (1984) 51 A.L.R. 317 at p.321 Gibbs C.J. said of the words "in relation to" in the definition of "matrimonial cause" in s.4 of the Family Law Act 1975 (Cth) :- "The words 'in relation to' import the existence of a connection or association between the two proceedings, or, in other words, that the proceedings in question must bear an appropriate relationship to completed proceedings of the requisite kind: See R v Ross-Jones; Ex parte Beaumont (1979) 23 ALR 179 at 183-4; 141 CLR 504 at 510. An appropriate relationship may exist if the order sought in the proceedings in question is consequential on or incidental to a decree made in the completed proceedings ....". In Johnson v. Johnson [1952] P.47 at 50-51, Somervell L.J. found helpful the discussion by McFarlane J. in In re Nanaimo Community Hotel Ltd [1944] 4 D.L.R. 638 of the term "in connexion with" including His Honour's remark that "The phrase 'having to do with' perhaps gives as good a suggestion of the meaning as could be had." It is unnecessary to give further examples. The general operation of para (e) was explained in Ricegrowers Co-operative Mills Ltd v. Bannerman and Trade Practices Commission (1981) 38 A.L.R. 535 in which it was enunciated that the phrase "decisions relating to the administration of criminal justice" encompassed the decisions referred to in sub-paras. (i) to (v) and that those sub-paragraphs were not to be read down by reason of the opening words of the paragraph. As Morling J. said in Harper & Others v. Costigan (1983) 50 A.L.R. 665 at p.670 "the paragraph provides its own dictionary." Those cases do not, however, resolve the issue in the present case. The decision 1n question had some connection with the investigation of a person or persons for an offence or offences against a law of the Commonwealth. The decision arose out of an enquiry into Dr Hatfield's entitlement to the medical benefits claimed. That enquiry encompassed an enguiry into possible criminal action. In the course of that enquiry, warrants were obtained pursuant to the Crimes Act 1903 (Cth). As a result of consideration of documents obtained pursuant to those warrants as well as to other information held, Mr McAnulty decided to refer to the Director of Public Prosecutions the question of the prosecution of Dr Hatfield and possibly of other persons and of the recovery from Dr Hatfield of medical benefits previously paid. At the same time Mr McAnulty decided that the currently held claims and future claims for item 793 benefits in respect of referrals from the Edelsten Group would not be paid. Thus, the material obtained pursuant to warrants issued 1n the course of that investigation formed part of the material which Mr McAnulty took into account in arriving at his decision. Moreover, one part of the reasoning process was common to all the decisions taken and that was the crucial point that Dr Hatfield was a member of the Edelsten Group. -10- However the terms "decisions relating to the administration of criminal justice" and "decisions in connection with the investigation .... of persons for any offences against a law of the Commonwealth" are not to be interpreted as encompassing all decisions found to have any connection whatever with the administration of criminal justice or the investigation of persons for offences. In Collins and Dunn v. Minister for Immigration and Ethnic Affairs (No.3) (1982) 5 A.L.N. No. 3, Lockhart J. held that a decision by the Minister for Immigration and Ethnic Affairs on a reconsideration of his earlier decision to deport a person from Australla was not a decision in connection with the "conduct of proceedings in a civil court" (see para (f£) of Schedule 2) notwithstanding that there were proceedings on foot under the Administrative Decisions (Judicial Review) Act 1977 (Cth) challenging the Minister's earlier decision. Lockhart J. held that the nexus between the reconsideration and the Judicial Review proceedings was essentially only temporal. Likewise, 1n Murphy & Others v. K.R»M. Holdings Pty Limited (1985) 63 A.L.R. 397, Fox, Beaumont and Pincus JJ. held that the seizure by Customs officials of goods imported into Australia and believed on reasonable grounds to be forfeited was not a decision falling within paras.(e) and (£) of Schedule 2. At p.402 Pincus J., with whose reasons Beaumont J. agreed, said:- "It follows that decisions taken in connection with the investigation or prosecution of persons for offences under s 234(1) of the Customs Act are within para (e)(1) of Sch 2 of the Judicial Review Act. Nevertheless, on -ll- the particular facts of this case, the sub-paragraph should be held inapplicable, as it was by the learned primary judge. That 1s so because the most that was proved was that there would have been no seizure had the department not been satisfied that there was evidence of commission of an offence under s 234(1). No doubt a prosecution may follow on from the seizure. It was not said, however, nor is 1t necessarily the case, that the seizures had to do with the process of investigation; they may equally well have simply had the purpose of reducing into possession the goods claimed to be forfeited. It does not appear to be necessary or desirable to attempt to lay down a rule as to the sort of connection between a seizure and an investigation which is necessary to be shown in order to bring the matter within para (e)(i) of Sch 2. To dispose of the present matter, it is enough to say that there was not sufficient evidence to establish the requisite connection. In other factual situations, seizures of goods unlawfully imported may well be so connected with investigation of offences as to fall within the relevant sub-paragraph." The words of Pincus J. which are of greatest import were:- "It was not said, however, nor is it necessarily the case, that the seizures had to do with the process of investigation ..." His Honour was pointing to the fact that para.(e) uses the words "relating to" not primarily with respect to matters which are peripheral to the administration of criminal justice or to the investigation of persons for offences but to matters which form part of the process of the administration of justice and of the investigation of persons for offences. In my opinion para.(e) refers to decisions which are part of the administration of justice and part of the investigation of persons for offences and also, I would accept, to decisions that are ancillary or incidental thereto or made in -12- assistance thereof. The paragraph does not, however, encompass decisions which are not made in the course of the administration of justice or the investigation of persons for offences but which are simply connected in an indirect manner therewith. Decisions of the latter type do not have the necessary relationship. As in Murphy & Others v. K.R.M. Holdings Pty Limited cited above, there is in this case no evidence that the decision not to pay current and future claims for item 793 benefits in respect of referrals from the Edelsten Group was ancillary or incidental to or a part of the administration of criminal justice or the investigation of Dr Hatfield for an offence. It was not put in the affidavit that the decision was taken as a step in the prosecution of Dr Hatfield or as a step in the recovery of past claims or to assist such action. Mr McAnulty deposed, inter alia:- "During the investigation, which involved an analysis of documents obtained by search warrant from bank accounts operated in Dr Hatfield's name and which also involved an analysis of statements made by the applicant to me in an interview with him in December 1985, I formed the opinion that offences against the Health Insurance Act 1973 had been committed by the Applicant. In connection with the investigation I then decided to withhold payment of further benefits claimed by the Applicant pending further investigation and forwarding of the matter to the Office of the Director of Public Prosecutions for consideration whether offences had been committed which may result in prosecution of the Applicant." (the underlining is mine) -13- However, although Mr McAnulty used the words "in connection with", he did not depose to any relevant connection other than his reliance upon the material contained in the criminal investigation. For that matter, he did not explain why he categorised the inquiry as an inquiry into alleged offences as distinct from an inquiry into Dr Hatfield's entitlement to make and to have made the item 793 claims. I would add that the decision not to pay the item 793 benefits was not dependent upon its being established that an offence had been committed. The Commission was correct in withholding payment of the item 793 benefits 1f it was not satisfied that Dr Hatfield was entitled thereto. Whether Dr Hatfield and possibly others should be prosecuted and if so for what offence or offences was a matter for the Director of Public Prosecutions. For these reasons, therefore, there was not the requisite relationship between the subject decision and the administration of criminal justice or the investigation of a person for an offence against a law of the Commonwealth. The applicant is therefore entitled to a declaration that he was entitled to a statement under s.13(1) of the Act in respect of the decision set out in Mr McAnulty's letter of 28 April 1986 "that no further item 793 benefits will be paid to your client for services performed on referral from practitioners -14- within the Edelsten Group until ... we are satisfied the pre-requisites of item 793 claims are being met." In furnishing that statement, the respondent may rely upon the provisions of s.13A of the Act if it is appropriate to do so. The applicant's costs of the application should be paid by the respondent. I certify that this and the '3 preceding pages are a true copy of the Reasons for Judgment herein of His Honour Mr Justice Davies. Associate: Jae C-acids, Date: 27 -°% - £7 Counsel for the applicant: Mr J.J. Steele Solicitors for the applicant: H. Wilshire Webb, Son & Doyle Counsel for the respondent: Mr J.D. Heydon Solicitors for the respondent: Office of the Director of Public Prosecutions Date of hearing: 29 July 1987