Australia: Full Federal Court puts spotlight on Professional Services Review Scheme

Last Updated: 15 October 2011
Article by John Carroll and Cain Sibley

Key Points:

The Full Federal Court has handed down two important administrative law decisions relating to the Professional Services Review scheme.

The Full Federal Court has handed down two important administrative law decisions relating to the Professional Services Review (or PSR) scheme.

The invalid appointment: Kutlu v Director of PSR

In Kutlu v Director of PSR [2011] FCAFC 94, the Full Federal Court considered whether a failure to follow a legislated consultation step prior to making a statutory appointment invalidated the appointment. The Court found that it did, and that the actions of the purported appointee were also invalid.

Section 84 of the Health Insurance Act 1973 required the Minister for Health and Ageing to consult with the Australian Medical Association (or AMA) before making appointments to the PSR Panel. The members of the PSR Panel are drawn upon to constitute to PSR committees to investigate inappropriate practice by medical practitioners. Kutlu concerned five separate PSR committees, each of which was constituted by members of the PSR Panel who were appointed by two successive Ministers without consulting the AMA.

The Court considered whether the requirement in the Health Insurance Act to consult was a mandatory requirement, or merely direction which would not result in invalidity if not followed. The Court found that it was a mandatory requirement – the requirements to consult

"are essential preliminaries to the Minister's exercise of the power of appointment. They have a rule-like quality that is easily identified and applied. The sections do not direct the Minister to carry out his or her powers of appointment in accordance with matters of policy. Instead, the confer a discretion to appoint after the preconditions of consultation with, and advice by, the AMA have been fulfilled and the Minister has had regard to that advice."

It followed that all the investigative steps carried out by the five PSR committees were also invalid. The Commonwealth argued that such a finding of invalidity would create significant public inconvenience. The Court gave short shrift to that argument, saying that

"the scale of the Ministers' failure to obey simple legislative commands to consult the AMA before making the appointments is not likely to have been a matter that the Parliament anticipated. If the appointments were treated as valid, the unlawfulness of the Ministers' conduct in making them would attract no remedy. And, if that were so, the appointees would hold offices to which the Minister had unlawfully appointed them and they could not be prevented by injunction or other orders of a court from exercising the powers of those offices."

The Commonwealth also argued that the de facto officers doctrine operated to prevent a challenge to the PSR committees decisions and investigations. The Court also rejected that argument, saying that the de facto officers doctrine has no application where the Parliament has authorised only properly appointed officers to have particular powers. The de facto officers doctrine had no operation in this case because the Parliament did not authorise officers other than PSR Panel to be constituted as a committee and exercise the statutory powers of a PSR committee under the Health Insurance Act.

Kutlu is an important reminder for agencies to check that delegations and appointments comply with statutory procedures, and a warning that the de facto officers doctrine may not cure defects.

Facts, evidence and inference: Tisdall v Webber

The other case, Tisdall v Webber [2011] FCAFC 76, concerned an investigation by a PSR committee into a Dr Tisdall who had rendered 80 or more services on 20 or more days (the so-called "80/20 rule").

Section 106KA of the Health Insurance Act and the Health Insurance (Professional Services Review) Regulations 1999 has the effect that a doctor who breaches the 80/20 rule is taken to have engaged in "inappropriate practice". However, the Regulations provided that if a doctor satisfied a PSR committee that "exceptional circumstances" existed, then the doctor would not have engaged in inappropriate practice. A number of matters were prescribed in the Regulations as constituting exceptional circumstances, including a lack of medical services for patients of the doctor.

Dr Tisdall argued before the PSR committee that exceptional circumstances existed because there was a chronic shortage of doctors in the area in which he practised, and other doctors refused to see his patients. Dr Tisdall supplied material to the Committee which supported his contentions. The Committee decided that it was not satisfied that exceptional circumstances existed, and made a number of findings which it used to support that conclusion, including:

  • The number of services rendered by other practitioners in Dr Tisdall's area indicated that other practices "likely had capacity to see additional patients".
  • The Committee "did not accept that other practitioners would have refused to see Dr Tisdall's patients".
  • The Committee found "that there were services available for these patients."

The Full Federal Court (Justices Greenwood, Tracey and Buchanan) was highly critical of the way in which the PSR committee went about making its findings. Justice Buchanan said that the evidence Dr Tisdall provided to the committee went "unanswered", and went on to say:

"The Committee appears to have dealt with Dr Tisdall's case in large measure by making a speculative assumption... that other practitioners had the capacity to see additional patients and would have been prepared to do so. How those findings were reconciled with the argument advanced for Dr Tisdall... was not explained. The Committee simply declared... that it did not accept that other practitioners would have refused to see Dr Tisdall's patients."

Justice Greenwood was similarly critical of the PSR committee's findings, saying:

"The Committee members are not entitled to make findings of fact... based upon assumptions of likely capacity and likely disposition to see patients, unsupported by actual evidence, or simply based on inferences drawn from statistics which do not reveal facts about the reasons for statistical rates of attendance."

The Tisdall case highlights the importance of considering submissions made to a decision-maker, and being careful about making findings of fact which are based on evidence. It also sounds a cautionary note about using statistical information to draw inferences: decision-makers should be careful that the statistics actually support the inferences being drawn.

You might also be interested in...

Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this bulletin. Persons listed may not be admitted in all states and territories.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Mondaq Advice Centre (MACs)
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.