Damato v Holmes [1999] FCA 758

FEDERAL COURT OF AUSTRALIA

Damato v Holmes [1999] FCA 758

HILDEGARD MARIA CHRISTINA DAMATO v ALAN JOHN HOLMES & ORS

N 449 of 1999

JUDGE: WHITLAM J

DATE: 7 JUNE 1999

PLACE: SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY N 449 OF 1999

BETWEEN: HILDEGARD MARIA CHRISTINA DAMATO

Applicant

AND: ALAN JOHN HOLMES

First Respondent

WALLACE GRIGOR, ELVIRA MOREY AND PETER WONG

Second Respondents

JUDGE: WHITLAM J

DATE OF ORDER: 7 JUNE 1999

WHERE MADE: SYDNEY

THE COURT ORDERS THAT: 1. The applicant's motion, notice of which was filed on 2 June 1999, is refused with costs. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY N 449 OF 1999

BETWEEN: HILDEGARD MARIA CHRISTINA DAMATO

Applicant

AND: ALAN JOHN HOLMES

First Respondent

WALLACE GRIGOR, ELVIRA MOREY AND PETER WONG

Second Respondents

JUDGE: WHITLAM J

DATE: 7 JUNE 1999

PLACE: SYDNEY

REASONS FOR JUDGMENT 1 This application concerns the Professional Services Review Scheme created by Pt VAA of the Health Insurance Act 1973 ("the Act"). 2 On 18 March 1999 the first respondent, Dr John Holmes, who is the Director of Professional Services Review appointed under s 83 of the Act, set up Professional Services Review Committee (No. 84) consisting of the second respondents ("the Committee") to consider whether the applicant, Dr Hilda Damato, had engaged in inappropriate practice. A delegate of the Health Insurance Commission ("the Commission") had referred to Dr Holmes on 21 May 1997 the conduct of Dr Damato relating to whether she had engaged in inappropriate practice in connexion with the rendering and initiation of services during the period from 1 July 1995 to 30 June 1996 inclusive. During that period Dr Damato provided 7,917 services. In Section C of its referral, the Commission said: "C. REASONS FOR THE DECISION TO REFER The Health Insurance Commission is concerned that Dr Damato's high average number of services per patient may be excessive. In addition, the Health Insurance Commission is concerned that the high proportion of long and prolonged consultations and home visits rendered by Dr Damato may be inappropriate and may not be reasonably necessary for the care of her patients. 1. High Average Number of Services Per Patient: During the referral period Dr Damato provided 7,917 services of which 5,272 were surgery consultations and 2,622 home, hospital, institution, nursing home and emergency visits. Dr Damato has an average 6.48 services per patient, which was more than the average services per patient provided by 95% of all active vocationally registered general practitioners in Australia. The Health Insurance Commission believes that some of the services rendered by Dr Damato are excessive and may not be reasonably medically necessary for the care of her patients. 2. High Level C and D Consultations and Home Visits: In the referral period 1 July 1995 to 30 June 1996, Dr Damato provided 7,917 services of which 7,894 were consultations, including nursing home, hospital and home visits. Approximately 24.8% (1,963) of all consultations were long consultations (item 36) and 5.97% (472) were prolonged consultations (item 44). This places Dr Damato above the 95th percentile for both long and prolonged consultations when compared to other active vocationally registered practitioners in Australia. During the referral period Dr Damato provided only 2 brief consultations (item 3). Dr Damato provided 549 standard home visits (item 24), 1070 long home visits (item 37), and 290 prolonged home visits (item 47) during the referral period. This amounts to 1,909 home visits or 24.18% of all attendance items provided by Dr Damato, substantially higher than 99% of all other vocationally registered general practitioners in Australia. Dr Damato's level C home visits (1,070) and level D home visits (290) is substantially higher in proportion to her number of level B home visits (549). For these reasons the Health Insurance Commission has formed the view that Dr Damato's conduct in connection with the rendering of Medicare services may constitute inappropriate practice." 3 On 8 April 1999 Dr Damato's solicitors faxed Dr Holmes a request for a statement of reasons under s 13 of the Administrative Decisions (Judicial Review) Act 1977 ("the AD(JR) Act") in respect of his decision on the referral. By his solicitors' letter dated 14 April 1999, Dr Holmes gave Dr Damato notice to the effect that, in his opinion, she was not entitled to make such a request. 4 The Committee evidently considered the matters the subject of the referral and, on 28 April 1999, it gave Dr Damato notice that it had decided it "must hold a hearing" into those matters. The hearing was fixed for 1 June 1999. The Committee also required Dr Damato to produce certain documents, prior to the hearing, on 10 May 1999. Those documents included records relating to patients for randomly selected services for five different items of medical services rendered during the referral period. Eighty-five services were selected for item 24, ninety-six for item 36, ninety-two for item 37, eighty-three for item 44, and seventy-five for item 47. 5 By fax dated 6 May 1999 Dr Damato's solicitors sought an extension of time until 6 June 1999 to produce the documents requested. The Committee agreed to that extension and vacated the hearing date. 6 On 18 May 1999 Dr Damato commenced this proceeding challenging the decision of Dr Holmes to set up the Committee and the decision of the Committee to hold a hearing. She also sought interlocutory relief by way of an order restraining the respondents from proceeding further in relation to the referral. The hearing date of the claim for interlocutory relief was fixed for 1 July 1999. In the meantime, on 27 May 1999 the Committee wrote to Dr Damato notifying her that the documents were now required to be produced by 7 June 1999 and that the hearing would now be held on 15 June 1999. The same interlocutory relief was then sought by Dr Damato's motion presently before the Court, which was filed on 2 June 1999. 7 Dr Damato's challenge to both decisions rests on the delay by Dr Holmes after he received the referral from the Commission. Section 89 of the Act provides: "89.(1) Within 28 days after receiving the referral, the Director must: (a) dismiss the referral; or (b) set up a Committee to consider whether the practitioner has engaged in inappropriate practice. (2) The Director's decision on the referral is not rendered invalid merely because it is not made within the 28 day period." 8 Dr Damato had made written submissions to Dr Holmes on 6 June 1997 stating why he should dismiss the referral dated 21 May 1997 from the Commission. Those submissions were made in accordance with s 88 of the Act and just outside the period of fourteen days presented by s 88. Dr Damato says that, until she received the notice dated 18 March 1999, she believed that she had satisfactorily explained her conduct. Dr Damato believes that some of the records requested may no longer exist. 9 Counsel for Dr Damato presses his challenge by reference to the grounds specified in pars (1)(d) and (e) and (2)(j) of both s 5 and s 6 of the ADJR Act. He also invokes what he calls the general supervisory power of the Court: Walton v Gardiner (1993) 177 CLR 378. Counsel referred, in particular, to what Woodward J said in Freeman v McKenzie (1988) 82 ALR 461. In that case his Honour first acknowledged (at 462) the power of the Court to prevent a committee of inquiry established under an Act of Parliament from acting in an oppressive manner which amounts to an abuse of power. He then listed (at 472-473) factors which have been applied from time to time in disciplinary proceedings to avoid injustice by the grant of a permanent stay. 10 Counsel for Dr Damato points to a number of considerations in support of the contention that there is a serious question to be tried whether his client should be granted a permanent stay. These include the potentially grave consequences for his client of adverse findings by the Committee, the implication into the legislative scheme of a reasonable time within which the decision to set up a Committee must be made, the period of time that had passed since the dates of the referred services, Dr Damato's misapprehension that her explanations had been accepted, and the absence of a satisfactory explanation or justification for the delay on the part of Dr Holmes. On this last factor, I should say that Dr Holmes did give evidence of the reasons for delay, but I do not think it is necessary or appropriate to express a view about his explanation for the purpose of disposing of the present motion. 11 The scheme created by Pt VAA of the Act has been recently explained by Sundberg J in Tang v Holmes (1998) 51 ALD 121. What his Honour said in that case is relevantly unaffected by such of the amendments made by the Health Insurance Amendment Act (No 1) 1997 as apply to Dr Damato's referral. His Honour pointed out (at 123): "Section 91 requires the director to dismiss the referral if satisfied that there are insufficient grounds on which a committee could reasonably find that the person under review has engaged in inappropriate practice in connection with the referred services. Unless so satisfied, the director must set up a committee: s 93(a)." 12 His Honour rejected (at 128) the submission that s 89 implies that there must be substantial compliance with the time requirement. In Artinian v Commonwealth (1996) 43 ALD 235 Hill J had earlier remarked, obiter, that s 89(2) specifically ensured that invalidation does not result from a failure to comply with a particular time limit. 13 The role of the Director of Professional Services Review under Div 3 of Pt VAA of the Act is quite plain. He must dismiss a referral under either s 91 or s 92 or set up a Professional Services Review Committee under s 93. So much is made clear by the express words of pars (a) and (b) of s 93 of the Act. There are no other courses open to him. A referral may not simply go off into limbo. 14 Perhaps the period specified in s 89(1) may be availed of by a person under review to ground an application under s 7(2) of the AD(JR) Act. But that would depend on the answer to the "interesting question" whether the preliminary function of the Director of Professional Services Review involves a "decision" for the purposes of that Act. Like Sundberg J, I do not find it necessary for present purposes to resolve that question. 15 In my opinion, Dr Damato has not established that there is a serious question to be tried. Her motion is refused with costs. I certify that the preceding fifteen (15) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Whitlam.