JUDGMENT No. 215.788. CATCHWORDS ADMINISTRATIVE LAW - whether decision by Health Insurance Commission to defer payment of medical benefit to applicant involved error of law. HEALTH - INSURANCE - medical practitioner assignee of medical benefits in respect of services provided in NSW while unregistered in NSW - NSW legislation prevents action for fees for such services - whether such fees were "amounts payable in respect of a professional service" within Health Insurance Act 1973 if practitioner continuously registered in another State. PRIVATE INTERNATIONAL =: - statutory defence applicable to action in a State - whether provision procedural or substantive - full faith and credit. STATUTES = INTERPRETATION = Statute providing for deregistration of medical practitioner upon notice being given personally - whether informal notice sufficient. Medical Practitioners Act 1938 (NSW) Health Insurance Act 1973 Administrative Decisions (Judicial Review) Act 1977 Australia Act 1986 Koop v Bebb (1951) 84 CLR 629 Myer eae Ltd. v Commissioner of Stamp Duties [1967] NSWR Peate v Federal Commissioner of Taxation (1964) 111 CLR 443 Clyne v Deputy Commissioner of Taxation (1981) 150 CLR l Leroux v Brown CB 801; 138 ER 1119 Waung v Subbotovsky [1968] 3 NSWR 499 Mackender v Feldia AG [1967] 2 QB 590 ———— oe McFee Engineerin Pty. Ltd. (In Liquidation) vy CBS Constructions Pty. Ltd. (1980) 44 FLR 340 Hodge v Club Motor Insurance Agency Pty. Ltd. (1974) 22 FLR 473 Borg Warner (Aust.) Ltd. v cupan riseat VR 437 more Marine Pty. Ltd. v IAC (Finance) Pty. Ltd. (1964) 110 CLR Prowse v McIntyre (1961) 111 CLR 264 GEOFFREY WALTER EDELSTEN v HEALTH INSURANCE COMMISSION G861l of 1988 RECEIVED CORAM: | GUMMOW J. PLACE: SYDNEY. 5 DATE: 25 JULY 1988. 22 NOV 1989 FEDERAL COURT OF AUSTRALIA PRINCIPAL REGISTRY IN THE FEDERAL COURT OF AUSTRALIA ) ) NEW SOUTH WALES DISTRICT REGISTRY ) No. G881 of 1988 ) ) GENERAL DIVISION BETWEEN: GEOFFREY WALTER EDELSTEN Applicant AND: HEALTH INSURANCE COMMISSION Respondent CORAM: GUMMOW J. PLACE: SYDNEY. DATE: 25 JULY 1988. REASONS FOR JUDGMENT This is an application for review under the provisions of the Administrative Decisions (Judicial Review) Act 1977 ("the ADJR Act"). The facts are not in controversy, the dispute concerning questions of interpretation of provisions of the Health Insurance Act 1973 ("the Health Insurance Act") and the Medical Practitioners Act 1938 (NSW) ("the State Act"). At all material times, the applicant has been a registered medical practitioner within the meaning of the Victorian legislation. From 1968 and until earlier this year, he had also been registered in New South Wales without interruption. Section 23B of the State Act provides that a registered medical practitioner "May practise medicine". In my view, as a necessary implication from the apparent object of the statute, this is to be understood as meaning "practise medicine in New South Wales": Koop v Bebb (1951) 84 CLR 629 at 640-641; Myer Emporium Ltd. v Commissioner of Stamp Duties [1967] 2 NSWR 230 at 239-240; cf. Australia Act 1986, Si: 2% Section 24 of the State Act provides for the payment by each registered medical practitioner of what is described as "the annual roll fee" and the New South Wales Medical Board ("the Board") is empowered to remove from the Register maintained pursuant to the Act the name of any registered medical practitioner who fails to pay the annual roll fee. On 3 February 1988, the Board had ordered the removal from the Register of those medical practitioners who had failed to pay their annual renewal fee for 1987/88 by the due date of 30 September 1987. The applicant was one of the Practitioners, the removal of whose name was so ordered. Shortly thereafter, the applicant's solicitor notified him of what had happened. The solicitor then contacted the Board on behalf of the applicant and was told by the Board that the applicant might continue to practise but that he should complete an application for re-registration. Subject to a qualification not presently material, sub-s. 23 (1) states: . . . [A] registered person ceases to be registered when the Board has caused him to be given notice, personally or by post, that his name has been removed from the Register. One of the subsidiary issues in the present case is when notice within the meaning of sub-s. 23 (1) was given the applicant of his removal from the Register. On 12 February 1988, the applicant's secretary attended the offices of the Board and collected what is apparently a standard form of letter setting out the procedures for re-registration. The form was not addressed to any particular person, nor was it signed. It opens with the words "I acknowledge receipt of your recent enquiry concerning re-registration with the New South Wales Medical Board". On 16 February 1988, the applicant received a letter addressed to him from the Board and dated 15 February 1988. The letter stated that on 3 February 1988 the Board had ordered his removal from the Register and that his name had accordingly been removed from the Register. The letter went on to set out the procedures for re-registration. These were attended to by the applicant. The current position is that provisional registration was granted on 9 March 1988 and the determination of the applicant's application for re-registration has not yet been decided. Sub-section 24 (5) of the State Act has the effect that upon re-registration, the applicant would be deemed to have been registered on and from the day on which his name was removed from the Register or from such later day as the Board determined and notified the applicant. No question arises as to the status of the applicant in New South Wales from 9 March 1988, the date on which he was informed that provisional re-registration had been granted to him, Section 20 of the State Act establishes a system of Provisional certificates and whilst a provisional certificate is in force the holder is deemed to be a registered medical Practitioner for the purposes of the Act. However, the facts establish that either from 12 or from 16 February 1988 (the commencement date is disputed) until 9 March 1988, the applicant was not, within the meaning of the State legislation, a registered medical practitioner; this situation may be remedied only by the retroactive effect of the deeming Provision of sub-s. 24 (5) to which I have referred, upon the Board making a favourable determination as to re-registration. Section 35 of the State Act is in the following terms: 35. (1) Every registered medical practitioner shall be entitled to sue in any court of competent jurisdiction for the recovery of the charge or remuneration for any medical or surgical advice, service, attendance, or operation rendered or performed by him. (2) No action or suit for the recovery of fees or remuneration for professional services of any kind as a registered medical practitioner shall be commenced until the expiration of 6 months after a bill setting out the amount claimed and containing a brief statement, indicating the nature of the professional services in respect of which such amount is claimed, has been served personally or by post on the person to be charged with the same. Section 41B provides: 41B A person who is not a registered medical Practitioner shall not be entitled to sue Or counter-claim for or to set-off or otherwise recover any charge or remuneration for any medical or surgical advice, service, attendance or operation given or performed by him after the commencement of the Medical Practitioners (Amendment) Act 1956. In Peate v Federal Commissioner of Taxation (1964) 111 CLR 443 at 456, Menzies J. expressed the view that the language of ss. 35 and 41B, taken together, indicated the conclusion that only registered persons can sue to recover fees. Nothing said in the appeals in Peate's Case touched this point. The State Act has since been amended (e.g. by the addition of s. 39A which makes it clear that bodies corporate may not sue) but not so as to impugn the conclusion I have mentioned. The occasion for the present litigation is provided by the circumstance that in the period 12 February - 9 March 1988, the applicant continued to provide professional services to his patients in New South Wales. The question concerns the applicability for this period, in the events that have happened, of the so-called "bulk billing" provisions of the Health Insurance Act. The legislation provides for entitlement to the medicare benefit (s. 10), identification of those persons entitled to payment of the benefit (s, 20), and goes on in s. 20A to deal with assignments of the medicare benefit. Sub-section 20A (5) provides that an assignment of a medicare benefit shall not be made except in accordance with the section. The result of the operation of sub-ss. (1) and (3) of s. 20A is that the practitioner therein referred to may have assigned to him the patient's entitlement to the medicare benefit and this is accepted by the practitioner "in full payment" of the medical expenses which have been incurred. Sub-sections 20A (1) and (3) provide: 20A (1) Where a medicare benefit is payable to an eligible person in respect of a professional service rendered to the eligible person or to another eligible person, the first-mentioned eligible person and the person by whom, or on whose behalf, the professional service is rendered (in this sub-section referred to as "the practitioner") may enter into an agreement, in accordance with the approved form, under which - (a) the first-mentioned eligible person assigns his right to the Payment of the medicare benefit to the practitioner; and (b) the practitioner accepts the assignment in full payment of the medical expenses incurred in respect of the professional service by the first-mentioned eligible person. .. (3) Where an assignment under this section takes effect, or an agreement under this section is entered into, with respect to a medicare benefit, the medicare benefit is, subject to section 20B, payable in accordance with the assignment or the agreemenl, as the case may be. In respect of the medical services rendered by him in the period 12 February - 9 March 1988, the applicant submitted to the respondent a claim for assigned benefits that otherwise complied with the Health Insurance Act. However, on 11 April 1988, the solicitors for the Commission notified the applicant that payment would be withheld in respect of the period 12 February 1988 - 9 March 1988, until the Board had determined the application for full registration. Reliance was placed on 12 February rather than 3 February because, it was said, the applicant ceased to be registered (within the meaning of the State Act) on 12 February. The applicant challenges that decision of the Commission to defer payment, and asserts a present entitlement. He complains of errors of law in construing the legislation (sub-s. 5 (1) (£) of the ADJR Act) and of the absence of evidence or other material to justify the making of the decision (sub-s. 5 (1) (b) and sub-s. 5 (3) of the ADJR Act). Declaratory relief is sought under sub-s. 16 (1) (c) of the ADJR Act. Against that background, I return to the terms of the legislation. Part II of the Health Insurance Act, comprising ss. 8 - 23D, deals with the provision of what are described as "medicare benefits". Section 8 provides that for the purposes of that Part an internal Territory of the Commonwealth shall be deemed to form part of the State of New South Wales. Sub-section 10 (1) provides: 10 (1) Where, on or after 1 February 1984, medical expenses are incurred in respect of a professional service rendered in Australia to an_ eligible person, medicare benefit calculated in accordance with sub-section (2) is payable, subject to and in accordance with this Act, in respect of that professional service. Sub-section (2) defines the amounts payable by reference to tables which differentiate on a State by State basis between the services provided. The expression in sub-s. (1) "medical expenses" is defined in sub-s. 3 (1) as meaning "an amount payable in respect of a professional service" [emphasis supplied]. In order to fall within the definition of "medical expenses", the amount in question not only must be "payable", but payable "in respect of a professional service". The term "professional service" is also defined in sub-s. 3 (1). Relevantly, the the expression is defined as meaning "a medical service to which an item relates, being a service that is rendered by or on behalf of a medical practitioner" [emphasis supplied]. The expression "item" means an item in the General Medical Services Table or Pathology Services Table set out in Schedule 1 and Schedule 1A respectively to the Health Insurance Act. The definition of "medical expenses" thus leads one to the term "medical practitioner". This is defined as follows: "Medical practitioner" means a _ person registered or licensed as a_ medical practitioner under a law of a State or Territory that provides for the registration or licensing of medical practitioners. The applicant submits that there were, in the period 12 February - 9 March 1988, in respect of the services performed by the applicant in New South Wales, amounts in respect of professional services being medical services rendered by the applicant as a person registered or licensed under a law of Victoria that provides for the registration or L0:. licensing of medical practitioners, even though there was not a current registration in the State in which the services were performed, namely New South Wales. The applicant submitted that any contrary interpretation would defy the plain words in the definition of "medical practitioner" which is picked up by the definitions of "professional service" and "medical expenses" and thus finds its way into the provision in ss. 10, 20 and 20A as to the medicare benefit. There is, however, a threshold difficulty in this argument, even granted it is sufficient that there have been professional services rendered by a person registered or licensed as a medical practitioner under a law of any State or Territory. For it will be recalled that the definition of "medical expenses" only operates in respect of amounts "payable" in respect of those professional services. Counsel for the respondent submitted that the expression "an amount payable" referred to amounts in respect of which under an applicable law (including, in this case, federal law and New South Wales law) action might be taken to recover payment; in the present case, it was submitted, the operation of the State Act means that in respect of those services provided in the period 12 February - 9 March 1988, there are no "amounts payable" in respect of professional services and therefore no medical expenses within the meaning of sub-s. 10 (1) of the Health Insurance Act. Ld Counsel for the applicant submitted that the expression "an amount payable" in the definition of "medical expenses" served merely for identification and the definition was to be construed as if "medical expenses" meant "an amount incurred in respect of a professional service". I accept the contrary submission. If medical services are performed in New South Wales by a person who by reason of the State Act cannot sue for fees, then I agree with the submission for the respondent, that within the meaning of the definition of "medical expenses", there is no amount payable in the necessary sense. Therefore, there is no medicare benefit payable in respect of those professional services, within the meaning of s. U0 ; Accordingly, there is no medicare benefit payable by the Health Insurance Commission on behalf of the Commonwealth to the person who has incurred the medical expenses in respect of the professional service, within the meaning of s. 20. Thus, there is no foundation for the operation of the assignment provisions of s. 20A. My conclusion is that an amount in respect of an action to the recovery of which ss. 35 and 41B of the State Act applies, is not "payable", not only as a matter of ordinary language, but also within the meaning of the definition of "medical expenses" in sub-s. 3 (1) of the Health Insurance Act (cf. Clyne v Deputy Commissioner of Taxation (1981) 150 CLR 1). 12. It may be that an amount is not "payable" within the meaning of the federal legislation merely because it cannot be sued for in the State in which the medical services in question were rendered. In argument, there was some discussion as to the position if action were brought not in a New South Wales Court but in the Courts of another State or an internal or external Territory, or in a federal Court which did not "pick up" New South Wales law. Doubts dissipate upon examination of the relevant conflict of laws rules. I accept the submission of the respondent that the effect of the provisions of the State Act, as explained by Menzies J. in Peate's Case (supra), is substantive and not merely a procedural matter. If procedural in character, the effect of the provisions would be felt only in a New South Wales Court, or in a federal Court which "picked up" New South Wales procedural law. It would be without significance in any other forum: cf. Leroux v Brown (1852) 12 CB 801; 138 ER 1119; Waung v Subbotovsky [1968] 3 NSWR 499 at 505. The probabilities are that New South Wales is, in respect of contractual arrangements between the applicant and his patients, the lex loci contractus, the lex loci solutionis and, most importantly, the proper law. In those circumstances, it is unreal to Suggest that other Courts in Australia would not accept a defence flowing from the New South Wales statute in question. See Mackender v Feldia AG [1967] 2 13. QB 590 at 601; Cheshire and North's "Private International Law', llth Ed., pp. 482-489. The same result would follow if the applicant were to sue outside New South Wales ona quantum Meruit where no fee had been agreed: McFee Engineering Pty. Ltd. (In Liquidation) v CBS Constructions Pty. Ltd. (1980) 44 FLR 340 at 348-349, Leflar, "American Conflicts Law", 3d Ed., §156. Further, although it is unnecessary to decide the point, my view is that as between the States, full faith and credit in a substantive sense would be given the New South Wales law, at least provided there was no conflict with the domestic law of the second State: Hodge v Club Motor Insurance Agency Pty. Ltd. (1974) 22 FLR 473 at 489-490; Borg Warner (Aust.) Ltd. v Zupan [1982] vR 437 at 461. It follows that the respondent succeeds on the first branch of the argument. As a "fall-back" position, the applicant argued that even if the respondent would otherwise succeed, the de-registration had effect only from 16 February 1988, the date of receipt of the letter of 15 February from the Board. As I have said, by dint of sub-s. 23 (1) of the State Act, the applicant ceased to be registered (with consequent effect upon the operation of the federal Act) only "when the Board has caused him to be given notice, personally or by post, that his 14. name has been removed from the Register". The respondent says notice within the meaning of the State Act was given the applicant personally in the course of 12 February 1988. The respondent submitted that the "notice" in question need not be written if given personally, and may be informal. The State Act contains a number of provisions for the giving of notice. In some (e.g. sub-s. 20 (5) and sub-s. 21 (7), in addition to sub-s. 23 (1) in question here) what is to be given is "notice, personally or by post"; in others (e.g. sub-s. 23A (1), sub-s. 31 (5)) a requirement is made known "by notice in writing [emphasis supplied] served personally or by post". This points to the conclusion that the requirement of sub-s. 23 (1) is met by notice which is not necessarily in writing provided it is given "personally"; cf. Motel Marine Pty. Ltd. v IAC (Finance) Pty. Ltd. (1964) 110 CLR 9 at 13-14. However, what has to be communicated is the information that the name of the registered person has been removed from the Register kept under the State Act. I have detailed the evidence, so far as it goes, of what happened on and before 12 February 1988. Certainly, there were dealings between the Board or its staff and the applicant's solicitor and secretary and it was apparent to the applicant that he needed to apply for re-registration. But the evidence falls short of establishing that on 12 February 1988 the Board caused the applicant to be given notice personally that his name had LS. been removed from the Register. In my view, the first notice in terms of sub-s. 23 (1) of the State Act came with the letter of 15 February, received on 16 February. Accordingly, the applicant has succeeded in showing that he did not cease to be registered under the State Act before 16 February. The period in respect of which the respondent succeeds commenced on 16 February and ended on 9 March 1988. There was some discussion in address as to the authorities concerning the legal significance of parts of a day. The question is not answered by any universal rule, depending on context and circumstances: Prowse v McIntyre (1961) 111 CLR 264 at 280. The applicant ceased to be registered "when" the Board caused him to be given notice. IT infer that this was at the commencement of business hours on 16 February. In my view, the notice is effective as and when it is given in the statutory sense and that this does not involve relation back to the start of the day in question or looking forward to the start of the next day. The nature of the State Act and the consequences of de-registration are such as to indicate that "when" is used to indicate a precise time of occurrence; see Halsbury, "Laws of England", 4th Ed., Vol. 45, title "Time", §1144. The result in respect of the period 16 February - 9 March 1988 is, of course, liable to displacement upon the retroactive effect of a favourable final decision by the Board 16. given by sub-s. 24 (5). Thus, in a sense, the giving of relief in the present application may not finally dispose of the rights of the parties under the Health Insurance Act in respect of that period. However, the power to give declaratory relief under sub-s. 16 (1) (c) of the ADJR Act is discretionary, and in all the circumstances, the preferable course is to make an order declaring the rights of the parties. I direct the applicant to bring in short minutes of any declaration it seeks in the light of these reasons and I will hear the parties on costs. I certify that this and the fifteen (15) preceding pages are a true copy of the Reasons for Judgment of his Honour Mr. Justice Gummow. iP 4 Associate: Pibtan Kee. Date: 25 July 1988. Counsel and Solicitors for Mr. A.R. Emmett Q.C. with Applicant: Mr. K. Lindgren instructed by Shenker and Associates. Counsel and Solicitors for Mr. K.R. Handley Q.C. with Respondent: Mr. M. Pembroke instructed by Minter Ellison. Date of Hearing: 18 July 1988. Date of Judgment: 25 July 1988.