Walsh, David Jonathon v Health Insurance Commission [1998] FCA 1227

IN THE FEDERAL COURT OF AUSTRALIA

AUSTRALIAN CAPITAL TERRITORY DISTRICT REGISTRY ACT G 46 of 1998

BETWEEN: DAVID JONATHAN WALSH

Applicant

AND: HEALTH INSURANCE COMMISSION

Respondent

JUDGE: FINN J

DATE OF ORDER: 28 September 1998

WHERE MADE: CANBERRA

THE COURT ORDERS THAT: 1. there be no order as to costs. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA

AUSTRALIAN CAPITAL TERRITORY DISTRICT REGISTRY ACT G 46 of 1998

BETWEEN: DAVID JONATHAN WALSH

Applicant

AND: HEALTH INSURANCE COMMISSION

Respondent

JUDGE: FINN J

DATE: 28 September 1998

PLACE: CANBERRA

REASONS FOR JUDGMENT There is a regrettably long and, it would seem, increasingly adversarial history to the matter in which this proceeding takes its place. The present application comes before me only on the issue of costs, the application itself having been dismissed on 9 July 1998 on the giving of certain undertakings by the respondent. On 6 May 1998 in a related proceeding (Walsh v Garrett and Kelly, AG 22 of 1998, unreported) I delivered reasons for judgment in which I indicated that the then – and present – applicant, Mr Walsh, had been denied procedural fairness in the making of the decision to transfer his employment from the Health Insurance Commission ("the HIC") – the present respondent – to Medicare Private Ltd ("MP Ltd") under s 21 of the Health Insurance Commission (Reform and Separation of Functions) Act 1997 (Cth) ("the Separation Act") consequent upon the corporatisation of the Medibank Private function of the HIC. On 11 June 1998 orders were made in that matter setting aside that transfer decision and from that date the HIC treated Mr Walsh as an unattached officer of the HIC. Mr Walsh had for some time made plain his desire to stay with the HIC. He had in consequence applied for several positions in the HIC one of which (of present relevance) was that of Manager, Parliamentary, Privacy and Freedom of Information ("the FOI position"). In the period between 6 May and 11 June there had been no resolution of the question as to the substantive position, if any, that Mr Walsh would occupy in the HIC on his return. I would note, though, that in that period Mr Walsh had ascertained from apparently appropriate sources that a short-list of persons had been prepared for the FOI position. He had in consequence caused his solicitors to write to the HIC's solicitors asserting that as an employee of the HIC he was "entitled to be appointed to the [FOI] position". The solicitors' letter went on: "We have been instructed to make an application to the Federal Court to restrain the Health Insurance Commission from appointing any person other than our client." No written reply was ever received to this letter notwithstanding that a further letter of 11 June to the HIC's solicitors noted the lack of a reply. On 11 June at the hearing at which I made orders in AG 22 of 1998, counsel for the then respondents (senior officers of the HIC) advised that Mr Walsh was still under consideration for the FOI position. In consequence Mr Walsh instructed his solicitors to withhold filing the proposed application. Nonetheless on 12 June 1998 his solicitors were asserting by letter (for reasons I need not explore here) that "a complete lack of bona fides" had been demonstrated by the HIC towards Mr Walsh. Mr Walsh was informed by a letter of 12 June that, on his return to work with the HIC on 15 June 1998, he should report to Mr Kelly (who was, coincidentally, a respondent in AG 22 of 1998). I would note in passing that Mr Walsh has deposed that, by the date of that meeting, he had consulted the provisions of the relevant Enterprise Agreement and had sought legal advice thereon. In light of that advice he took the view that the Health Insurance Commission Enterprise Agreement (Efficiency and Productivity Component) 1994, cl 2 (Staff Selection Procedures) ("the Agreement") did not require a formal interview or similar process for a direct transfer to be made. That clause provided: "2. DIRECT TRANSFER 2.1 A direct transfer may occur if it would assist in the efficient functioning of the Commission (e.g. some positions may best be filled by someone already experienced at the level). 2.2 A direct transfer may also occur if an officer: (a) is excess to needs; (b) is unattached; or (c) would benefit for developmental reasons." The 15 June meeting with Mr Kelly was attended as well by a Mr Mien, Human Resources Manager of the HIC. While there is some disagreement as to what transpired at that meeting, it seems clear that Mr Walsh was informed (as recorded in a record of Mr Mien) that: (i) "Your solicitors' letter of 12 June requesting your immediate direct transfer to the Manager, Parliamentary job will be answered solicitors to solicitor later today." (ii) "The Commission's position is that the 1994 Enterprise Agreement does not compel a direct transfer in a situation such as yours but permits an appropriate management discretion to do so to ensure the overall efficient functioning of the Commission and the relative suitability of an employee for any position as required by Condition 11 of the HIC Terms and Conditions of Employment." (iii) "In order to meet your situation as an unattached officer, however, we propose to convene a panel to consider your suitability for the Manager, Parliamentary, Privacy and Freedom of Information position. Thus, there will be no merit selection process unless you are found not to be suitable for the position. We expect to be able to convene the panel before the end of this week." (iv) "Mr Walsh was still subject to the application of the National Staffing Policy process ("the NSP") (on which see generally my reasons of 8 May 1998 in AG 22 of 1998) the outcome of which could be his transfer to MP Ltd." I would again note in passing that the importance to Mr Walsh of his remaining in the HIC was the advantage it gave of being able to be a beneficiary of the "Direct Transfer" provision I have earlier set out. I should add that at the 15 June meeting Mr Walsh was not provided with the criteria to be applied in the assessment to be made of him by the selection panel – a matter of which he was to complain in this proceeding. He was, in any event, of the view that the assessment was unnecessary in light of what others had told him was usual HIC practice and this in turn aroused his suspicions as to his likely fate in his application. He did not believe he was to be transferred to the FOI position, and that the NSP would be used to transfer him to MP Ltd. His apprehension, he deposes, was strengthened by his experience of being transferred to MP Ltd in February 1998 and its circumstances. On 15 June, after this meeting, the present application was filed. I will note its terms below. Two days later Mr Walsh was provided with a memorandum advising him of the arrangements for the interview "to consider your competency" for the FOI position. That memorandum stated (inter alia): "2. The Staff Selection Procedures, as detailed in the Enterprise Agreement of 9 June 1994, state: 12.2 The selection committee will comprise two members: (a) a personnel representative with a knowledge of EEO principles who will act as a Chairperson; and (b) a representative with a thorough knowledge of the subject matter area. 12.3 Where it is impractical for a personnel representative to participate in the selection process (e.g. country branch offices) the Chairperson must possess a thorough knowledge of EEO principles. 3. The interview has now been arranged for 10am Tuesday 23 June 1998. The interview is to be held in the Commissioner's Lounge on the third floor of the Millar Building. The proposed selection committee is: Ms Anne Stumpf (Chairperson) Mr Doug Hall … 5. You are to be considered in isolation from, and not in competition with, other applicants for the advertised vacancy. If you are rated competent against all of the selection criteria, you will be appointed to the position." Mr Walsh did not attend this meeting. His disagreement with the manner of his treatment was growing and this was reflected in correspondence with the HIC and its solicitors. On 29 June 1998 Mr Kelly sent Mr Walsh the following memorandum (omitting formal parts): "Subject: Competency Assessment for position of Manager, Parliamentary, Privacy and Freedom of Information I refer to previous correspondence and, in particular, your memorandum to me dated 23 June 1998 and a letter from Sneddon Hall & Gallop to the HIC's solicitors dated 22 June 1998 a copy of which has been passed to me. I note that you did not attend the interview with the selection committee to determine your competency for the above position which was arranged for 10.00 am, Tuesday 23 June 1998. Under Attachment D to the Health Insurance Commission Enterprise Agreement (Efficiency and Productivity Component) 1994 ("the 1994 EBA") paragraph 2 of the policy and clause 2 of the staff selection procedures make it clear that direct transfers are subject to an assessment of the competency of officers to carry out the functions of a relevant position. The selection committee is tasked with determining that precondition and, as was made clear, in George Mein's memorandum of 17 June 1998, there will be no merit selection process unless you are not found competent. I note in this context that you have on several occasions (eg paragraph 5 of your memorandum of 23 June 1998) asserted that you have been "proved suitable" to undertake the functions of the position. The HIC does not accept that you have been proved suitable to carry out the functions of this particular position or that you have participated in any process to determine that fact. It is for this reason, that I now wish to set out the steps that the HIC proposes to take in order to determine whether, I, as the appropriate delegate, should approve your transfer to the position under subclause 2.3 of the Staff Selection Procedures in Attachment D to the 1994 EBA. 1. The selection committee will reconvene to consider your competency for the position on Wednesday, 1 July 1998 at 10.00am in the Commissioner's Lounge, 3rd Floor Millar Building. You are invited to attend that meeting to demonstrate your competency and to make any further submissions you wish as to your claim for the position. The Committee will also question you about your claims that you are competent and seek such further appropriate information as it sees fit. 2. Given the view expressed by your solicitors in their letter of 22 June 1998, we understand that you may see attendance at such an interview as detrimental to your present legal proceedings. The HIC, however, must be able to fill the position at the earliest opportunity. Accordingly, the HIC wishes to determine whether to transfer you to the position so that either the proceedings on 9 July 1998 will be resolved if you are transferred to the position or, alternatively, a merit selection procedure can occur immediately thereafter if you are not transferred and are not successful in obtaining an injunction. Accordingly, if you do not attend, the Committee will consider whatever material you have submitted to it in the light of the selection criteria and the job description. Moreover, the Committee will be obliged to make such further inquiries as it considers appropriate in order to assess your claims of competency for the position. I would expect this to include an inspection of your personnel file, contact with your referees and contact with further persons in accordance with clause 15.2(b) and (c) of Attachment D to the 1994 EBA. The Committee will then produce a report in draft form and supply you with a copy. You will have 3 working days in which to comment on the draft. The Committee will consider your comments (if any) and make its final report to me as the appropriate delegate. 3. If the report recommends that you be transferred to the position, I will then proceed in accordance with the transfer provisions of Clause 2 of Attachment D of the 1994 EBA. If you are not transferred to the position, subject to the current legal proceedings, the merit selection process will proceed."