FEDERAL COURT OF AUSTRALIA Lee v Professional Services Review Committee No 292 (No 2) [2010] FCA 1490 Citation: Lee v Professional Services Review Committee No 292 (No 2) [2010] FCA 1490 Parties: IL-SONG LEE v PROFESSIONAL SERVICES REVIEW COMMITTEE NO 292, CHIEF EXECUTIVE OFFICER OF MEDICARE AUSTRALIA and DETERMINING AUTHORITY IL-SONG LEE v PROFESSIONAL SERVICES REVIEW COMMITTEE NO 348, CHIEF EXECUTIVE OFFICER OF MEDICARE AUSTRALIA and DETERMINING AUTHORITY File number(s): NSD 989 of 2010 NSD 1112 of 2010 Judge: KATZMANN J Date of judgment: 22 December 2010 Catchwords: PRACTICE AND PROCEDURE – whether applicant should be granted leave to reopen his case after judgment reserved and amend his application for an order of review Legislation: Federal Court Rules 1979 O 6 r 8, O 13 r 2 Health Insurance Act 1973 (Cth) ss 84 and 85 Cases cited: Bing! Software Pty Ltd v Bing Technologies Pty Ltd (No 2) [2008] FCA 1761 Date of hearing: 22 December 2010 Place: Sydney Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 24 Counsel for the Applicant: Mr M Robinson with Ms B Tronson Solicitor for the Applicant: Unsworth Legal Pty Ltd Counsel for the Respondents: Ms R Henderson Solicitor for the Respondents: Sparke Helmore IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 989 of 2010 BETWEEN: IL-SONG LEE Applicant AND: PROFESSIONAL SERVICES REVIEW COMMITTEE NO 292 First Respondent CHIEF EXECUTIVE OFFICER OF MEDICARE AUSTRALIA Second Respondent DETERMINING AUTHORITY Third Respondent JUDGE: KATZMANN J DATE OF ORDER: 22 DECEMBER 2010 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The applicant has leave to file and serve his further amended application for an order of review in the form marked MFI-1 and to reopen his case. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. The text of entered orders can be located using Federal Law Search on the Court's website. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 1112 of 2010 BETWEEN: IL-SONG LEE Applicant AND: PROFESSIONAL SERVICES REVIEW COMMITTEE NO 348 First Respondent CHIEF EXECUTIVE OFFICER OF MEDICARE AUSTRALIA Second Respondent DETERMINING AUTHORITY Third Respondent JUDGE: KATZMANN J DATE OF ORDER: 22 DECEMBER 2010 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The applicant has leave to file and serve his further amended application for an order of review in the form marked MFI-2 and to reopen his case. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. The text of entered orders can be located using Federal Law Search on the Court's website. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 989 of 2010 BETWEEN: IL-SONG LEE Applicant AND: PROFESSIONAL SERVICES REVIEW COMMITTEE NO 292 First Respondent CHIEF EXECUTIVE OFFICER OF MEDICARE AUSTRALIA Second Respondent DETERMINING AUTHORITY Third Respondent IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 1112 of 2010 BETWEEN: IL-SONG LEE Applicant AND: PROFESSIONAL SERVICES REVIEW COMMITTEE NO 348 First Respondent CHIEF EXECUTIVE OFFICER OF MEDICARE AUSTRALIA Second Respondent DETERMINING AUTHORITY Third Respondent JUDGE: KATZMANN J DATE: 22 DECEMBER 2010 PLACE: SYDNEY REASONS FOR JUDGMENT 1 On 8 December 2010, I reserved judgment in these two matters involving challenges to decisions of two Professional Services Review Committees: Professional Services Review Committee No. 292 and Professional Services Review Committee No. 348. Today, the applicant seeks leave to reopen the hearing of both cases to contend that the chair and members of the Professional Services Review Committees were not validly appointed under ss 84 and 85 of the Health Insurance Act 1973 (Cth) ("the Act"). In order to do so, he also seeks leave to add two respondents to the proceedings. They are the Director of Professional Services Review and the Commonwealth of Australia. 2 The background to the applications and the evidence in support of them appear from two affidavits filed in the two proceedings. The deponent of those affidavits is Andrew Davey, a solicitor employed by Unsworth Legal, the applicant's solicitors. Mr Davey deposed that on 30 November 2010 he read an article published in The Australian newspaper the same day. The article, he said, caused him to question whether the members purportedly constituting Professional Services Review Committee No 292 and Professional Services Review Committee No 348 had been "appropriately appointed". That led Mr Davey to issue two notices to produce in each matter, which he caused to be served on the solicitors for the respondents in these proceedings. 3 One of the notices to produce issued in each matter required the respondents to produce: the instruments of appointment by the Minister of the members of the two Professional Services Review Committees; the documents and files that evidenced consultation of the Minister with the AMA – that is, the Australian Medical Association – that occurred before their appointments; all documents and files that evidenced an arrangement or arrangements of the Minister with the AMA under which the AMA would consult other specified organisations and associations before advising the Minister on the appointments of the committee members, and that occurred before those members sat in the various Professional Services Review Committee meetings or deliberations; and all documents evidencing the AMA's advice to the Minister on the appointments of the members before the appointment and that occurred before those members sat in the Professional Services Review Committees at the relevant times. 4 Documents were produced to the applicant in Court on the first day of hearing. Nothing more was said or done about the matter at that time. The Australian article to which Mr Davey referred in his affidavits of 21 December 2010 was entitled "Medicare rorts watchdog put on hold." It read (in part): The watchdog in charge of catching doctors who rort Medicare had has its operations suspended because of "irregularities" over the appointment of its panel members, jeopardising millions of dollars in government savings. The Professional Services Review's consideration of the cases against 40 doctors has been immediately effected, but there are doubts about the enforceability of past decisions of its panels. The agency, which recouped more than $2 million in inappropriately claimed Medicare benefits from 25 doctors last year, is feared by the medical profession. PSR director, Tony Webber, told The Australian all the doctors working on panels of the PSR had been asked to resign and nominate for reappointment. "Some irregularities in the procedures relating to the appointment of a number of panel members were discovered," he said in a statement. "The PSR decided to suspend the operation of the committees whilst the implication of those irregularities was explored and remedial action taken." 5 The particular irregularities that the applicant now wishes to agitate in the proceedings are these. First, he contends that the members of the Professional Services Review Committee were appointed to be panel members although there had been no consultation between the Minister and the Australian Medical Association (AMA), contrary to s 84(3) of the Act. 6 Secondly, he argues that the instrument purporting to appoint certain persons as members of the Professional Services Review Committee, pursuant to s 84(2) of the Act, did not attach a schedule listing the practitioners to be appointed as panel members, although it purported to do so. 7 Thirdly, in proceeding number NSD 1112 of 2010, he contends that the Chairperson of the Committee was not validly appointed a Deputy Director, contrary to s 85(1) of the Act because, though he had formerly been a panel member, he was not a panel member at the time he was appointed a Deputy Director. 8 Section 84 of the Act provides: (1) The Professional Services Review Panel is established. (2) It consists of practitioners appointed by the Minister. (3) Before appointing a medical practitioner to be a Panel member, the Minister must consult the AMA. The Minister must make an arrangement with the AMA under which the AMA consults other specified organisations and associations before advising the Minister on the appointment. (4) Before appointing a practitioner other than a medical practitioner to be a Panel member, the Minister must consult such organisations and associations, representing the interests of the profession to which the practitioner belongs, as the Minister thinks appropriate. 9 Section 85 provides: (1) The Minister may appoint Panel members to be Deputy Directors of Professional Services Review. (3) Before appointing a medical practitioner to be a Deputy Director, the Minister must consult the AMA. The Minister must make an arrangement with the AMA under which the AMA consults other specified organisations and associations before advising the Minister on the appointment. 10 The evidence before me raises a real question as to whether there was any consultation with the AMA as required under ss 84(3) and 85(3). It also raises a real question as to whether or not Dr Kelly, the Chair of Professional Services Review Committee No 348, was a panel member at the time he was appointed Deputy Director and hence was lawfully appointed Deputy Director of Professional Services Review Committee No 348. 11 The current respondents to the proceedings neither consent to nor oppose the orders sought in the motion. They indicate in submissions filed on their behalf that none of the current respondents is the appropriate person or entity to respond to the contentions that the applicant seeks leave to raise. None of them has any role in the appointment either of members of the Professional Services Review Committees under s 84 of the Act or of Deputy Directors of Professional Services Review Committees under s 85 of the Act. For these reasons, the only submission the respondents make is that, if leave is granted to the applicant, it should be done on the condition that the applicant joins an appropriate respondent so that such a respondent could respond to the contentions that the applicant seeks leave to raise. 12 There seems to be little doubt that the proper respondents in this case are the two additional respondents the applicant wishes to add. The current respondents submit that the Commonwealth of Australia is the proper respondent. The applicant says that it is also necessary to add the Director of Professional Services Review because he is the person who constituted the particular committees. The committee members, I should say, are drawn from the Professional Services Review Panel. It was submitted that he is able to give evidence about what he did; able to defend what he did, should he wish to; and, if there is any relevant information bearing upon the issues, then he is in a position to produce it. 13 I referred earlier to the publication of an article in The Australian which is the genesis of this application. It referred to "PSR Director, Tony Webber" and attributed some statements to him. The acronym "PSR" is a reference to Professional Services Review. 14 Mr Robinson, counsel for the applicant, submitted that Mr Webber's comments, if accurately reported, could be relied upon as admissions. That depends on the nature of the irregularities to which he is apparently referring, but it is a fair inference from the other material annexed to Mr Davey's affidavits that there is real concern at the validity of appointments made to the Professional Services Review Panel and therefore to the Committees constituted from amongst its members. Ms Henderson, who appears for the existing respondents, informed the Court that Dr Webber did not speak to The Australian for the purpose of the article, but the only evidence I have to work on at the moment is the evidence of the article itself and what flowed from it. 15 This is not the only matter pending before the Court in which issues of this kind have been raised. Indeed, it appears that there are at least four other matters where the same or similar issues arise. In one of them, Condoleon v Professional Services Review Committee No 580 (QUD 297/2010), Logan J heard argument on 25 and 26 October 2010 and reserved his decision. His Honour was due to give judgment on 3 December 2010. Before he did so the applicant in that matter urgently sought leave by way of notice of motion filed in Court on 3 December to reopen his case for the purpose of investigating whether the comments attributed to Mr Webber by The Australian applied to the appointments of members of the particular Professional Services Review Committee which was a respondent in that proceeding. 16 The same day, Logan J made orders, amongst other things, adjourning the delivery of his judgment and allowing the applicant discovery of documents relating to the validity of the appointments of the members of the second respondent. On 17 December 2010, his Honour made orders, amongst other things, granting leave to the applicant to reopen his case and to join the Honourable Nicola Roxon MP in her capacity as the Minister of State for Health and Ageing and set the matter down for further mention on 4 February 2011. 17 On 14 December 2010 Rares J granted another applicant, Dr Robert Clarke, leave to file and serve an amended application for an order of review joining the Commonwealth of Australia as fourth respondent in his proceedings: Clarke v Professional Services Review Committee No 631 (NSD 745/2010). He also proposed that a separate question for determination pursuant to O 29 r 2 of the Federal Court Rules 1979, being a question or issue in the proceeding, whether of fact or law or partly so, should be drafted, to be separately heard from any other question in the proceeding, and he made ancillary orders. I understand that it is proposed, in that matter and any other related matters where the same point is involved, that a Full Court hear and deal with the question. 18 There is no doubt that I have the power to grant the applicant the leave he seeks. Equally, there is no doubt that I have the power to grant him leave to amend his pleadings so as to make the allegations he wishes to make and to add the proposed fourth and fifth respondents. The amendment power itself is wide. Order 13 r 2 provides: (1) Subject to the following provisions of this rule, the Court may, at any stage of any proceeding, order that any document in the proceeding be amended, or that any party have leave to amend any document in the proceeding, in either case in such manner as the Court thinks fit. ... (7) An amendment may be made even if the effect of the amendment is to add a new claim for relief or foundation in law for a claim for relief (whether by way of substitution for an existing claim for relief or foundation in law or not) if the new claim for relief or foundation in law: (a) arises out of the same facts or substantially the same facts as those already pleaded to support an existing claim for relief by the party applying for leave to make the amendment; or (b) subject to subrule (9), arises, in whole or in part, out of facts or matters that have occurred or arisen since the commencement of the proceeding. 19 The power to add a party to proceedings appears in O 6 r 8, which relevantly provides: (1) Where a person who is not a party: (a) ought to have been joined as a party; or (b) is a person whose joinder as a party is necessary to ensure that all matters in dispute in the proceeding may be effectually and completely determined and adjudicated upon; the Court may order that the person be added as a party and make orders for the further conduct of the proceeding. 20 In Bing! Software Pty Ltd v Bing Technologies Pty Ltd (No 2) [2008] FCA 1761 Collier J found herself in a similar position to me in that she had reserved judgment in proceedings, after which one of the parties or some of the parties sought leave to adduce further evidence. The proceedings before her Honour concerned an issue relating to the infringement or the alleged infringement of the applicant's registered trademark and alleged misleading and deceptive conduct and matters of that kind. On the question of the principles governing the question of whether or not leave to reopen should be granted, her Honour said: 12 It is not in dispute that the Court has the power to grant leave for further evidence-in-chief to be adduced after the trial of the proceeding has concluded and judgment reserved. Indeed this jurisdiction is well recognised: Murray v Figge (1974) 4 ALR 612, Gulf Pacific Pty Ltd v Londish [1992] FCA 502, Urban Transport Authority of New South Wales v Nweiser (1992) 28 NSWLR 471, Smith v New South Wales Bar Association (1992) 176 CLR 256, McCarthy v McIntyre [2000] FCA 1250, Inspector-General in Bankruptcy v Bradshaw [2006] FCA 22, Hawthorn Glen Pty Ltd v Aconex Pty Ltd (No 1) [2007] FCA 2010. 13 In Bradshaw [2006] FCA 22, Kenny J conveniently summarised the circumstances in which the Court will permit further evidence to be adduced between conclusion of the hearing and delivery of judgment as follows: [24] The authorities indicate that, broadly speaking, there are four recognised classes of case in which a court may grant leave to re-open, although these classes overlap and are not exhaustive. These four classes are (1) fresh evidence (Hughes v Hill [1937] SASR 285 at 287; Smith v New South Wales Bar Assn [No 2] (1992) 108 ALR 55 at 61–2); (2) inadvertent error (Brown v Petranker (1991) 22 NSWLR 717 at 728 (application to recall a witness); Murray v Figge (1974) 4 ALR 612 at 614 (application to tender answers to interrogatories); Henning v Lynch [1974] 2 NSWLR 254 at 259 (application to re-open); (3) mistaken apprehension of the facts (Urban Transport Authority of NSW v NWEISER (1992) 28 NSWLR 471 ("UTA") at 478; and (4) mistaken apprehension of the law (UTA at 478). In every case the overriding principle to be applied is whether the interests of justice are better served by allowing or rejecting the application for leave to re-open: see UTA at 478; also The Silver Fox Co Pty Ltd as Trustee for the Baker Family Trust v Lenard's Pty Ltd (No 2) [2004] FCA 1310 ("Silver Fox") at [22] and [25]. 14 With respect to fresh evidence, Muirhead J held in Murray v Figge 4 ALR 612 that fresh evidence should be admitted only when: (a) it is so material that the interests of justice require it; (b) the evidence if believed would most probably affect the result; (c) the evidence could not by reasonable diligence have been discovered before; (d) inadvertence was established; and (e) no prejudice was suffered by the other party by reason of its introduction at a late point of time. 21 Collier J added to the list two matters: the evidence sought to be adduced needs to be relevant within the meaning of s 56 of the Evidence Act 1995 (Cth) and of probative value, and the Court must be conscious of the principle of finality of litigation in deciding whether to exercise the discretion to allow evidence after the conclusion of the trial. 22 Mr Robinson argued that the material tendered on the present application amounted to fresh evidence. I have my doubts about that. Nevertheless, the categories of cases in which the Court can grant leave to reopen are not closed and I am satisfied that the interests of justice are better served by allowing the application for leave to reopen, in circumstances where it seems likely that at least two similar cases will be referred to the Full Court for a decision on the questions that the applicant now wishes to raise in the proceedings before me. 23 It seems to me that the better course is to enable the Full Court to consider the issues of law and fact, if necessary, that obtain in all the proceedings that are currently pending rather than in a select number of them. I am satisfied that the two additional respondents the applicant wishes to join should be added in order to ensure that all matters in dispute in the proceeding may be effectually and completely determined and adjudicated upon. 24 Accordingly, I grant the applicant leave to file and serve the further amended applications for orders of review in each of matters number NSD 989 of 2010 and NSD 1112 of 2010 which are marked MFI 1 and MFI 2. I also grant the applicant leave to reopen his case in each of those matters. I certify that the preceding twenty-four (24) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Katzmann. Associate: Dated: 12 January 2011