Sydney X-Ray Pty Ltd v Health Insurance Commission [2004] FCA 1276

FEDERAL COURT OF AUSTRALIA

Sydney X-Ray Pty Ltd v Health Insurance Commission [2004] FCA 1276

CONTRACT – formation of contract – whether agreement in writing – where terms of delivery uncertain – where contracting parties subsequently agreed to substitute different product.

ADMINISTRATIVE LAW – exercise of statutory discretion – where decision-maker reconsidered decision with adverse result – whether power to exercise discretion spent – applicability of estoppel to administrative law.

WORDS & PHRASES - meaning of 'purchase'. Health Insurance Act 1973 (Cth) Health Insurance (Diagnostic Imaging Services Table) Regulations 2003 Health Insurance (Diagnostic Imaging Services Table) Regulations 2000 GR Securities Pty Ltd v Baulkham Hills Private Hospital Pty Ltd (1986) 40 NSWLR 631, applied Hick v Raymond & Reid [1892] AC 22, applied Minister for Immigration and Ethnic Affairs v Kurtovic (1990) 21 FCR 193, followed

Macquarie Dictionary(3rd ed) SYDNEY X-RAY PTY LTD v HEALTH INSURANCE COMMISSION N641 of 2003 MADGWICK J 1 OCTOBER 2004 SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY N641 of 2003

BETWEEN: SYDNEY X-RAY PTY LIMITED

APPLICANT

AND: HEALTH INSURANCE COMMISSION

RESPONDENT

JUDGE: MADGWICK J.

DATE: 1 OCTOBER 2004

PLACE: SYDNEY

REASONS FOR JUDGMENT HIS HONOUR:

BACKGROUND 1 By its amended claims, the applicant in these proceedings seeks judicial review pursuant to the Administrative Decisions (Judicial Review Act) 1977 ('the ADJR Act') and/or declaratory relief in respect of a decision made by the respondent, on 2 February 2004. 2 The proceedings concern whether the use of a Magnetic Resonance Imaging ('MRI') machine operated by the applicant from October 1998 to September 1999 at one of its premises, located at Randwick, would have attracted Medicare benefits. Under the Health Insurance Act 1973 (Cth) ('the Act'), Medicare benefits are payable in respect of services, among others, performed by certain medical practitioners using eligible equipment. The legislative framework is set out in more detail below. The issues for determination in these proceedings are primarily whether the MRI machine was eligible equipment and, accordingly, whether one of the practitioners using replacement equipment for that machine was an eligible provider. The legislation allows replacement equipment to qualify. 3 By way of history, until 7 February 2003 (when it sold its business) the applicant's operation included a medical practice at Randwick, undertaking diagnostic imaging services, including MRI scans and CT scans. (It was not disputed, however, that the applicant retains a commercial interest in the outcome of the questions finally agitated before me.) In the second half of 1997, the applicant made arrangements to buy from Australian Medical Imaging Pty Limited ('AMI') an Elscint Esteem 1.5 Tesla MRI system ('the Esteem') and also a CT scanner. It did not take delivery of the Esteem because in early 1998 it was offered and accepted a more advanced machine; the Elscint Prima 1.0 ('the Prima') which was installed in late 1998. Subsequently, the Prima was replaced with a General Electric machine ('the GE'). 4 The principal question concerns whether, within the meaning of a regulation the Esteem was, before 10 February 1998, 'purchased … (under a contract in writing …)'.