HIGH COURT OF AUSTRALIA

Barwick C.J., Gibbs, Stephen, Mason, Murphy, Aickin and Wilson JJ.

 

 

 

GENERAL PRACTITIONERS SOCIETY v. THE COMMONWEALTH

(1980) 145 CLR 532

2 September 1980

 

 

Constitutional Law (Cth)

Constitutional Law (Cth)—Powers of the Commonwealth Parliament—Provision of sickness and hospital benefits, medical and dental services (but not so as to authorise any form of civil conscription)—Provision of medical benefits—Conditions to be satisfied before benefits payable for pathology services rendered by medical practitioners—Undertakings to be given by persons wishing to become approved pathology practitioners—Whether civil conscription—The Constitution (63 &64 Vict. c. 12), s. 51 (xxiiiA)—Health Insurance Act 1973 (Cth), ss. 16A, 16B, 16C. Constitutional Law (Cth)—Taxation—Law imposing taxation to deal with no other matter—Provisions dealing with other matters to be of no effect—Medical benefits—Conditions to be satisfied before benefits payable for pathology services rendered by medical practitioners—Undertakings to be given by persons wishing to become approved pathology practitioners—Fee of $10 or other prescribed amount payable by eligible medical practitioner wishing to become approved pathology practitioner—Minister to accept undertaking or refer to Medical Services Committee—Whether fee a tax or payment for services to be rendered—The Constitution (63 &64 Vict. c. 12), s. 55—Health Insurance Act 1973 (Cth), s. 16C(2).

Decisions


September 2.
The following written judgments were delivered: -
BARWICK C.J. In this matter I have had the advantage of reading the reasons for judgment prepared by my brother Gibbs. He there sets out the statutory provisions under challenge and expresses his view that none of the impugned provisions offends the limitation placed upon s. 51 (xxiiiA) by the bracketed words "but not so as to authorise any form of civil conscription". I agree with my brother's conclusion. (at p536)

2. In order to dispose of this matter I have no need finally to resolve the question whether the words in brackets qualify all of the matters for the provision of which by the Commonwealth the paragraph affords legislative power. If it were necessary for me now to decide that question, the inclination of my mind is distinctly in favour of the view adopted by Sir Owen Dixon and not in favour of the view adopted by Sir John Latham in British Medical Association v. The Commonwealth (1949) 79 CLR 201 , though undoubtedly there is much to be said in point of policy as distinct from mere construction for thinking that the limitation ought to have applied over the whole range of the permitted legislation, or at any rate over more than the words "medical and dental services" might authorize. (at p537)

3. I do not regard the Court as having decided in the British Medical Association Case that if the statute provided no more than that, if a benefit were to be obtained by the patient under the statute, the requirement that the relevant prescription must be written by the medical practitioner on the form provided by the Commonwealth amounted to the imposition of civil conscription. What it decided, in my opinion, was that because s. 7A of the Act as it then stood did not limit itself to the use of the form for the purposes of obtaining or providing for the Commonwealth benefit, it was invalid: it was the generality or universality of the command of s. 7A and the lack of any conforming relationship of the prescription to the scheme of benefit under the Act which brought that section into invalidity. This, it seems to me, is said plainly enough by Sir John Latham (1949) 79 CLR, at pp 247, 251 . (at p537)

4. I am inclined to think that Sir Owen Dixon in his dissent treated s. 7A as being no more than an incidental provision within the scheme providing for Commonwealth benefits and therefore not applicable if a medical practitioner wanted to go outside that scheme when prescribing a drug or appliance which might happen to fall within the Commonwealth formulary or the addendum thereto. Reading s. 7A as Sir John Latham did read it (1949) 79 CLR, at p 247 , it was capable, in my opinion, of bringing the provision within the limitation of the bracketed words in s. 51 (xxiiiA). Whether it should have been read to have done so need not now be reconsidered. (at p537)

5. Consequently, I do not read the decision of the majority in the British Medical Association Case as deciding that, without legal complusion either by direct command or the imposition of penalties, civil conscription could result from practical or economic considerations. In that case, there was legal compulsion directly applied in relation to the act to be performed. But that is not to say that, in my opinion, civil conscription could not in any case result from the coercive force of circumstance: but, in my opinion, to make out such a case would need an extremely strong set of circumstances which, in real terms, left the individual with no choice but to submit to what the statute required, though it did not command it. (at p538)

6. It is apparent to my mind from the analysis of the provisions of the statute which my brother Gibbs makes, and with which I agree, that the statute does not impose upon any medical practitioner the obligation to perform for a patient any service, pharmaceutical, medical or otherwise. In my opinion, the statute does no more than provide that if the patient is to receive the prescribed Commonwealth benefit he may only do so if the practitioner has aided him by following the incidental provisions of the statute. (at p538)

7. Further, I agree with my brother's conclusion that the amount of $10 required to be paid by s. 16C (2) is no more than a fee for services rendered or to be rendered and that whilst it might amount to an exaction it does not amount to a tax. (at p538)

8. Consequently, the attacks on the validity of the statute by reference to s. 51 (xxiiiA) and s. 55 of the Constitution should each fail. (at p538)

GIBBS J. This stated case raises for decision the question of the validity of ss. 16A, 16B and 16C of the Health Insurance Act 1973 (Cth), as amended ("the Act") and of certain regulations made under the Act. The challenged sections were inserted in the Act by the Health Insurance Amendment Act 1977 and are contained in Pt II, which deals with what are called "medical benefits". By s. 10, subject to qualifications which need not be mentioned, where medical expenses are incurred in respect of a professional service rendered in Australia to an eligible person a medical benefit is payable in respect of that service. Since, by s. 3, "eligible person" "means an Australian resident", the class of persons eligible to receive medical benefits is a very wide one. A "professional service" includes a medical service specified in an item in the table set out in Schedule I that is rendered by or on behalf of a medical practitioner (see s. 3). The table can be amended by regulations (s.4) and has been so amended; it is lengthy and covers a very wide range of medical services. (at p538)

2. Sections 16A, 16B and 16C enact special conditions which must be satisfied before a medical benefit will be payable in respect of a pathology service, and impose obligations on some, at least, of the persons who provide those services. The sections are as follows:
"16A. (1) A medical benefit is not payable in respect of a pathology service unless a practitioner determined that the service was necessary, the provisions of sub-section (2) were complied with in respect of the service, and -
(a) in the case of a pathology service (other than a prescribed pathology service or a service to which paragraph (b) applies) - the service was rendered by or on behalf of an approved pathology practitioner in pursuance of a request addressed to that approved pathology practitioner -
(i) by the practitioner who determined that the service was necessary; or
(ii) by another approved pathology practitioner who is not the practitioner who determined that the service was necessary,
being a request made in writing as prescribed or, if made otherwise than in writing, subsequently confirmed in writing as prescribed;
(b) in the case of a pathology service, other than a prescribed pathology service, determined to be necessary by an approved pathology practitioner (being a medical practitioner) or by the employee (being a medical practitioner) of an approved pathology practitioner in the course of that employment - the service was rendered by or on behalf of that approved pathology practitioner; or
(c) in the case of a prescribed pathology service - the service was rendered by or on behalf of a medical practitioner other than an approved pathology practitioner (in this paragraph referred to as 'the firstmentioned practitioner') and -
(i) the service was determined to be necessary by the first-mentioned practitioner; or
(ii) the service was rendered in pursuance of a request made by the person who determined that the service was necessary, being a medical practitioner (other than an approved pathology practitioner) who, at the time the request was made, was a member of a group of practitioners of which the first-mentioned practitioner was then a member.
(2) There shall be recorded on the account, or on the receipt, for fees in respect of the service or, if an agreement has been entered into under sub-section 20 (3) in relation to the medical benefit in respect of the service, on the form of agreement, such particulars as are prescribed.
(3) Where a pathology service has been rendered by or on behalf of an approved pathology practitioner in pursuance of a request made or confirmed as described in paragraph (1) (a), then -
(a) if the approved pathology practitioner fails to retain the written request or the written confirmation of the request for a period of 18 months after the date on which the service was rendered; or
(b) if, on being served as prescribed, at any time within 18 months after the date on which the service was rendered, with a notice in writing signed by the Minister requiring the approved pathology practitioner to produce the written request or the written confirmation of the request to an officer of the Department of Health specified in the notice, the approved pathology practitioner fails to comply with the requirement within 14 days after being served with the notice,
the approved pathology practitioner is guilty of an offence and is punishable on conviction by a fine not exceeding $1,000.
(4) In any proceedings for an offence against sub-section (3), an averment of the prosecutor, contained in the information or complaint, that a specified pathology service was rendered by or on behalf of a specified approved pathology practitioner on a specified date is prima facie evidence of the matters averred.
(5) For the purposes of this section -
(a) where a service is rendered by a person (in this paragraph referred to as 'the employee') in the course of his employment by another person, then, except in a case to which paragraph (b) applies, it shall be deemed to be rendered by that other person, and not by the employee;
(b) where a person (in this paragraph referred to as 'the employee') is employed by two or more persons jointly and a service is rendered by the employee in the course of that employment, it shall be deemed to be rendered by the employer principally responsible for the matter being dealt with by the employee, and not by the employee;
(c) a service shall be taken to be rendered on behalf of a person if, and only if, it is rendered by another person, not being an approved pathology practitioner, by arrangement with that person;
(d) a member of, or a member of the staff of, an authority (being a corporation) established by a law of the Commonwealth or of a State or internal Territory shall be taken to be employed by that authority;
(e) where two or more practitioners -
(i) provide professional services as partners; or
(ii) share amongst them all, or a substantial part of, the income from providing professional services, those practitioners shall be deemed to constitute a group of practitioners; and
(f) a reference to determining a service to be necessary is a reference to determining that the service is reasonably necessary for the adequate medical care of the patient concerned.
(6) This section does not apply in relation to a service in relation to which section 21 applies.
16B. (1) The Minister may draw up forms of undertaking to be given by persons who wish to become approved pathology practitioners.
(2) A form of undertaking shall make provision for and in relation to such matters as the Minister considers appropriate.
(3) The Minister may at any time refer to the Medical Benefits Advisory Committee, for its consideration and recommendations, proposals for the variation of a form of undertaking.
(4) Where the Medical Benefits Advisory Committee makes a recommendation to the Minister under sub-section (3) with respect to a proposal, the Minister -
(a) if the recommendation is that the proposal be adopted without amendment - shall vary the form of undertaking concerned in accordance with the recommendation; or
(b) if the recommendation is that the proposal be adopted with amendments specified in the recommendation - may vary the form of undertaking concerned in accordance with the recommendation.
(5) The Minister shall forward to the Medical Benefits Advisory Committee a copy of each form of undertaking drawn up under this section and a copy of any variation of such a form.
16C. (1) In this section -
'authority' means an authority (being a corporation) established by a law of a State or of an internal Territory; 'eligible applicant' means -
(a) a medical practitioner;
(b) a person (other than a State or an authority) who employs a medical practitioner or medical practitioners to render pathology services;
(c) a State or authority, being a State or authority specified by the Minister in writing for the purposes of this definition: or
(d) a person (other than a State, an authority or a person referred to paragraph (a) or (b)) who, immediately before the date of commencement of this section, was carrying on the business of rendering pathology services at the request of medical practitioners, where -
(i) in accordance with an approval granted by the Permanent Head of the Department of Health, that person issued to the person who incurred the medical expenses in respect of a pathology service so rendered (not being the practitioner who requested the rendering of the service) an account or receipt for his fees in respect of the service; and
(ii) medical benefit was paid before that date in respect of the service;
'form of undertaking' means a form of undertaking drawn up under section 16B.
(2) Subject to sub-section (3), where an eligible applicant gives, as prescribed, an undertaking in writing in accordance with the appropriate form of undertaking, signed by or on behalf of the applicant as required by the form, together with a fee of $10 or of such other amount as is prescribed, the Minister shall -
(a) if the eligible applicant previously gave an undertaking that was accepted under this section and the acceptance was subsequently revoked under section 106 - refer to a Medical Services Committee of Inquiry for inquiry and report the question whether the undertaking should be accepted or refused; or
(b) in any other case, either -
(i) on behalf of the Commonwealth, accept the undertaking; or
(ii) refer to a Medical Services Committee of Inquiry for inquiry and report the question whether he would be justified in refusing to accept the undertaking.
(3) An eligible applicant as defined by paragraph (d) of the definition of 'eligible applicant' in sub-section (1) is not entitled to give an undertaking under sub-section (2) if a previous undertaking given by the applicant was accepted under this section and the acceptance was subsequently revoked under section 106.
(4) As soon as practicable after the Minister receives the report and recommendation of the Committee upon a reference under sub-section (2), he shall, in accordance with the recommendation, either, on behalf of the Commonwealth, accept the undertaking or refuse to accept the undertaking.
(5) The Minister shall serve, either personally or by post, on the person concerned notification of acceptance or refusal of acceptance of an undertaking under this section.
(6) Where a refusal by the Minister under sub-section (4) to accept an undertaking given by a person who wishes to become an approved pathology practitioner does not take effect by reason of being set aside on review or in accordance with a judgment or order on appeal, the Minister shall be deemed, for the purposes of this Act, to have accepted that undertaking on behalf of the Commonwealth under that sub-section on the date on which the undertaking was originally received by the Minister or on such earlier date (not being a date earlier than the date on which it was signed) as is fixed by the Minister.
(7) Where a form of undertaking is varied by the Minister under sub-section 16B (4), an undertaking given under this section in accordance with that form of undertaking shall be deemed, for the purposes of this Act, to have been varied to accord with that form of undertaking as so varied by the Minister.
(8) An approved pathology practitioner may, at any time, terminate an undertaking given by him by serving, as prescribed, a notice of termination specifying a date of termination not earlier than 30 days after the day on which the notice is served.
(9) For the purposes of this Act, an undertaking given by a person under this section comes into force when accepted by the Minister or on such earlier date (not being a date earlier than the date on which the undertaking was signed) as is fixed by the Minister and ceases to be in force if -
(a) the undertaking is terminated by the person under subsection (8);
(b) the Minister's acceptance of the undertaking is revoked under section 106; or
(c) in the case of a person who was, when he gave the undertaking, an eligible applicant as defined by paragraph (a), (b) or (c) of the definition of 'eligible applicant' in sub-section (1)-the person ceases to be an eligible applicant as defined by that paragraph." (at p543)

3. The expression "approved pathology practitioner" is defined by s. 3(as amended by the Health Insurance Amendment Act 1977) to mean -
"(a)the Commonwealth;
(b)a person in respect of whom there is in force an undertaking given by him and accepted by the Minister under section 16C; or
(c) an authority (being a corporation) established by a law of the Commonwealth and specified by the Minister in writing for the purposes of this definition."
"Pathology service" is defined by the same section to mean "a medical service to which an item in Part 7 of the table relates", and "prescribed pathology service" means "a pathology service specified, or falling within a class of pathology services specified, by the regulations for the purposes of this definition". The effect of the other provisions of the Acts to which reference is made in ss. 16A, 16B and 16C may be sufficiently stated for present purposes as follows: Section 20 (3) permits a person to whom a medical benefit is payable in respect of a professional service rendered in Australia to make with the medical practitioner or other person by whom or on whose behalf the service was rendered an agreement under which the first-mentioned person assigns his right to the payment to the medical practitioner or other person, and the latter accepts the assignment in full payment of the medical expenses incurred in respect of that service. Section 21 deals with medical services rendered outside Australia. Under s. 106 the Minister may make a determination in accordance with the recommendation of a Medical Services Committee of Inquiry, which may, in relation to a question referred under s. 16C, recommend that the Minister accept or refuse to accept the undertaking concerned (s. 105(1)), and which may, where in a report it expresses the opinion that a practitioner has failed to comply with an undertaking given by him and accepted by the Minister under s. 16C, recommend, inter alia, that the Minister revoke his acceptance of the undertaking, and that a medical benefit payable or paid to a practitioner in respect of a pathology service in relation to which the practitioner failed to comply with the undertaking cease to be payable or be refunded as the case may be (s. 105 (3)). Another section, upon which the plaintiffs placed some reliance in argument, is s. 129AA, which provides, inter alia, as follows:
"(1) A person who -
(a) not being the patient concerned, invites, or does any act or thing with a view to, or likely to have the effect of, encouraging, any practitioner to request the rendering of a pathology service or pathology services;
(b) being a practitioner, without reasonable excuse, asks, receives or obtains, or agrees to receive or obtain, any property, benefit or advantage of any kind for himself or any other person, from a person carrying on the business of rendering pathology services or from a person acting on behalf of such a person, is guilty of an offence against this section.
. . .
(4) A person who is convicted of an offence against this section is punishable by a fine not exceeding $10,000 or imprisonment for a period not exceeding 5 years." (at p544)


4. A form of undertaking has been drawn up by the Minister for Health under s. 16B. Its provisions, so far as is necessary to refer to them, are as follows:
"Undertaking
The abovenamed Applicant ('the Practitioner') in accordance with the provisions of the Health Insurance Act 1973, as amended, and of the regulations made thereunder ('the Act' and the 'Regulations' respectively) HEREBY UNDERTAKES to THE COMMONWEALTH OF AUSTRALIA ('the Commonwealth') as follows:
. . .

Application

2. The medical services to which this undertaking relates and is applicable ('applicable pathology services') are pathology services in respect of which, when the services are rendered by an approved pathology practitioner, medical benefits are payable in accordance with the Act.

Compliance with Act

3. The Practitioner will -
(a) comply with the provisions in relation to applicable pathology services of the Act as from time to time amended and of the Regulations as for the time being in force; and
(b) take appropriate action from time to time to ensure that persons who in the course of their employment carry out, or by arrangement perform, for or on behalf of the Practitioner duties or services in relation to applicable pathology services, in carrying out those duties or performing those services act in accordance with the said provisions of the Act and Regulations and in conformity with this undertaking.
Code of Conduct (at p545)

4.1 The Practitioner shall conduct his/her practice(s) in relation to the rendering of applicable pathology services in conformity with the Code of Conduct set out in the Schedule to this undertaking ('the Code of Conduct').
. . .

Sharing Arrangements

7. The Practitioner will not -
(a) make an arrangement with a practitioner who requests the Practitioner to render an applicable pathology service; or
(b) make an arrangement with a practitioner who is requested by the Practitioner to render an applicable pathology service,
whereby the Practitioner, directly or indirectly, receives from any person other than the person who incurs the medical expense or the insurer of that person, or pays as remuneration to any person, any part of the fees that are payable by the person who incurs the medical expense, or of the benefits that are payable by the insurer of that person, in respect of the applicable pathology service.
8.1 The Practitioner will not knowingly enter into an arrangement with a person whereby -
(a) that person is induced or encouraged to request the rendering of an applicable pathology service by the Practitioner; or
(b) The Practitioner, without reasonable excuse, will be accorded any incentive to request, or will receive or obtain directly or indirectly any benefit, profit or advantage from requesting, the rendering of an applicable pathology service by the person.
8.2. The Practitioner shall not be taken to be in breach of sub-paragraph 8.1 (b) by reason of making an arrangement which provides for the obligation-free provision to or by the Practitioner of a disposable type of blood collection equipment or other specimen collection equipment or of slides, containers or other basic materials for the collection or transportation of specimens such as blood or urine or other biological specimens.
Excessive Services



9. The Practitioner will not render, or request to be rendered, an applicable pathology service that would constitute excessive services as referred to in Division 3 of Part V of the Act. (Sub-section 79 (1B) (a) of the Act provides that a reference to excessive services is a reference to professional services, being services in respect of which medical benefit has become or may become payable, that are not reasonably necessary for the adequate medical care of the patient concerned.)

. Supply of Information

. 10. The Practitioner will furnish to the Minister such information relating to the requesting or rendering by or on behalf of the Practitioner of applicable pathology services as is from time to time reasonably requested by the Minister." (at p546)



5. The Code of Conduct which is set out in the Schedule to the undertaking is as follows:
"CODE OF CONDUCT
i. Fees or benefits in respect of pathology services shall not be shared by, or be the subject of a sharing arrangement between, the practitioner who orders tests and the pathology practitioner who performs the tests.
ii. A pathology practitioner shall not -
(a) provide free services or payments as incentives to a practitioner to order tests;
(b) make payments to a practitioner for illusory services;
(c) make payment beyond normal commercial rates for services provided to the pathology practitioner by a practitioner.
iii. A pathology practitioner shall not advertise or detail to stimulate the ordering of pathology tests except in a manner or to an extent in or to which advertising or detailing may legally be done by a medical practitioner under the legislation controlling the practice of medicine in the State or Territory in which the pathology practitioner carries on practice.
iv. The pathology practitioner to whom pathology tests on private patients (including subsequent referrals) are referred and who performs the tests shall bill the patient or relevant insurer according to the principle that fees for pathology tests are payable by the patient or insurer directly to the pathology practitioner and the patient is not to be billed by the practitioner who makes the request for the tests." (at p546)


6. The regulations which are challenged - regs. 5 (2), (3), (4), (5), (7), (8), (9), (10), 6, 7 and 8 of the Health Insurance (Pathology Services) Regulations - were made under the Act on 28th July, 1977. Regulation 5 (2) requires that, subject to sub-reg. (7), an instrument, i.e. a request in writing, or a confirmation in writing of a request, referred to in s. 16A (1)(a) of the Act shall contain the particulars required by sub-regs. (3), (4), (5) and (6). By subregs. (3) and (4), and instrument is required to specify the names and addresses of the persons by whom and to whom the request or confirmation is made or given. Sub-regulation (5) provides as follows:
"An instrument shall specify -
(a) the surname, and the initials of the given names, of the person in respect of whom the service is to be, or was, rendered and the address of that person;
(b) whether the person is, or was, at the time that the request was made a private patient in a recognized hospital;
(c) whether the request is being made, or was made, in the course of the provision of an out-patient service at a recognized hospital;
(d) each service to which the instrument relates; and
(e) the date on which each such service was determined to be necessary."
Regulation 5 (7) deals with the case where a practitioner determines that a service is necessary and makes a request to an approved pathology practitioner who in turn makes a request to another approved pathology practitioner, and provides in effect that the instrument relating to the latter request need not contain the particulars specified in sub-regs. (5) and (6) if the instrument that relates to the former request is annexed to the firstmentioned instrument and relates only to the service to which that instrument relates. Regulation 5 (8) provides as follows:
"Where an instrument is required by this regulation to specify any particulars of the kind referred to in paragraph (5) (d), those particulars shall be specified in the handwriting of the person signing the instrument." (at p547)


7. Regulation 6 prescribes the particulars which, in accordance with s. 16A (2), must be recorded on an account, receipt or form of agreement. In a case to which s. 16A (1) (a) of the Act applies, the document must set out the name and address or "provider number" (i.e. an identification number allocated for administrative purposes) of the practitioner who determined that the service was necessary, the date of the determination, the number of the item that relates to the service and, if the service was rendered by or under the supervision of an employee (being a medical practitioner) of an approved pathology practitioner in the course of his employment by the approved pathology practitioner, the name and provider number of the employee. A document relating to a service in respect of which ss. 16A (1) (b) applies must set out the date on which the service was determined to be necessary and, if the service was determined to be necessary by an employee (being a medical practitioner) of the approved pathology practitioner by whom or on whose behalf the service was rendered, the name and provider number of that employee. Where the document relates to a service to which para. 16A (1) (c) applies, it must set out the date on which the service was determined to be necessary and, if the service was rendered in pursuance of a request of the kind referred to in s. 16A (1) (c) (ii), the date on which the request was made, and the name of the medical practitioner who determined that the service was necessary. Regulation 7 provides for the manner of service of the notice in writing referred to in s. 16A (3) (b). Regulation 8 is in the following terms:
"(1) A person shall -
(a) give an undertaking in writing under sub-section 16C (2) of the Act; or
(b) serve a notice of termination under sub-section 16C (8) of the Act,
by delivering it to the Director of Health for the State or Territory in which the prescribed place in relation to the person is situated or by sending it by pre-paid post to that Director of Health.
(2) In sub-regulation (1), 'prescribed place', in relation to a person, means the address specified in the undertaking signed by the person as the person's address for notices." (at p548)


8. The contention of the plaintiffs was that the sections and regulations whose validity is in question impose a form of civil conscription withing the meaning of s. 51 (xxiiiA.) of the Constitution, and are for that reason invalid. Further, it was submitted that the Health Insurance Amendment Act 1977 is a law imposing taxation within s. 55 of the Constitution, and that the provisions of ss. 16A, 16B and 16C which deal with other matters are therefore of no effect. (at p548)

9. The legislative power conferred on the Parliament by s. 51 of the Constitution includes power to make laws with respect to:
"(xxiiiA) The provision of maternity allowances, widows' pensions, child endowment, unemployment, pharmaceutical, sickness and hospital benefits, medical and dental services (but not so as to authorize any form of civil conscription), benefits to students and family allowances."
It was held by the majority of the Court in British Medical Association v. The Commonwealth (1949) 79 CLR 201 that the bracketed words in par. (xxiiiA) qualify only "medical and dental services", and that the other heads of power in the paragraph are not subject to those words: see per Rich J. (1949) 79 CLR, at p 255 , per Dixon J. (1949) 79 CLR, at pp 261, 269, 277 , per McTiernan J. (1949) 79 CLR, at pp 281-282 , and per Williams J. (1949) 79 CLR, at pp 286-287 ; contra, per Latham C.J. (1949) 79 CLR, at pp 250-251 . In the present case, the provisions of Pt II of the Act appear plainly enough to have been enacted in intended exercise of the power to provide sickness benefits, and the purpose of the impugned provisions appears to be to protect the public revenue against abuses of the system under which such benefits are provided. This is done by placing conditions on the entitlement to benefits payable in respect of pathology services, in an endeavour to deter medical practitioners from either requesting or rendering services which are unnecessary or excessive. However, I do not consider that the plaintiffs' challenge can be disposed of on the short ground that the legislation as a whole may properly be characterized as a law with respect to the provision of sickness benefits. I agree with the statement of Williams J. in British Medical Association v. The Commonwealth (1949) 79 CLR, at p 287 that "whenever such" (i.e., medical or dental) "services are provided whether as services exclusively or in the course of providing some other benefit, the law must not authorize any form of civil conscription of such services". Dixon J. appears to have expressed, although tentatively, a similar view (1949) 79 CLR, at p 277 . It is therefore necessary, notwithstanding the general character of the legislation now in question, to proceed to consider whether it does authorize any form of civil conscription in relation to medical services. (at p549)

10. The argument that the sections and regulations now challenged, considered together with the undertaking and code of conduct, impose and form of civil conscription upon medical practitioners, was advanced in two ways. First, it was said that the laws positively require a practitioner to perform services of a medical kind. Secondly, it was said, the laws, by prohibiting practitioners from carrying on practice in what was formerly the normal way, compel them to carry on practice in a different way. It had to be conceded that the challenged provisions have no application to a medical practitioner who is prepared to render pathology services for which no medical benefit will be payable. No one is under any legal compulsion to seek to become an approved pathology practitioner or to give the undertaking which is required of a person who wishes to become an approved pathology practitioner. No one who is not an approved pathology practitioner is under any legal compulsion to conduct his practice in any particular way. However, it was argued for the plaintiffs that few practitioners would be able to attract patients, or to make a living from their profession, if medical benefits were not payable in respect of their services, and that therefore, if ss. 16A, 16B and 16C are valid, a practitioner who intends to render pathology services (whether as a specialist or as a general practitioner) is compelled by practical considerations to apply to become an approved pathology practitioner. The facts stated in pars. 48 and 49 of the stated case provide a foundation for this argument. Paragraph 48 states:
"A pathologist who does not become an approved pathologist and whose patients as a result do not receive benefits under the said Act for pathology services, would be likely to lose a substantial portion of his practice."
Paragraph 49 states:
"It is possible that a general practitioner who as a matter of course refused to comply with Section 16A of the said Act and the Regulations under the Act and whose patients for that reason did not receive benefits under the said Act for pathology services requested by or carried out by or on behalf of that general practitioner could lose a substantial number of his patients."
The facts thus stated establish that the provisions in question leave some medical practitioners with no real choice; to preserve their practices, they must seek to become approved pathology practitioners, and for that purpose must submit themselves to the obligations which are cast upon approved pathology practitioners by the sections, the undertaking and the regulations. The question whether a law imposes civil conscription cannot be answered in the negative simply because the law does not create any legal liability to perform any medical or dental service; the effect of the law in the economic and other circumstances must be considered, and practical compulsion is enough: see British Medical Association v. The Commonwealth, per Latham C.J. (1949) 79 CLR, at pp 252-253 , per Rich J. (1949) 79 CLR, at pp 255-256 , and per Webb J. (1949) 79 CLR, at pp 292-293 ; contra per McTiernan J. (1949) 79 CLR, at pp 283-284 . In my opinion the circumstance that no medical practitioner is legally obliged to become an approved pathology practitioner is not decisive of the question whether the provisions in question impose a form of civil conscription within s. 51 (xxiiiA). (at p550)

11. It then becomes necessary to consider the effect of the challenged legislation upon medical practitioners, and there arises a question as to the proper construction of s. 16A (1). On behalf of the plaintiffs it was submitted that the words "the practitioner" in s. 16A (1) (a) (i) mean a practitioner other than an approved pathology practitioner, and it was upon this construction that counsel for the plaintiffs particularly relied in advancing the argument that the sub-section prevents medical practitioners from carrying on practice in the ordinary way and compels them, in some instances, to render services which they would not otherwise have performed. For example, it was said that the effect of the sub-section was to prevent an approved pathology practitioner who determined that a pathology service was necessary from requesting any other medical practitioner to perform that service - that is, of course, if a medical benefit were to be payable in respect of it. This would mean that a practitioner could not have the service performed by a specialist, or by his own partner, as he might otherwise have done, but would in effect be compelled to perform the service himself. I need not consider whether, if this were so, the sub-section would impose a form of civil conscription, for in my opinion the suggested construction is erroneous. The draftsman has throughout the sub-section preserved a distinction between a practitioner who is an approved pathology practitioner and one who is not. The former is expressly so described; the latter is referred to as "a medical practitioner other than an approved pathology practitioner". Where the word "practitioner" alone appears, it is intended to cover both classes. This is clearly so in the introductory words of the sub-section; if those words did not extend to approved pathology practitioners, as well as to other practitioners, they could not be read sensibly with s. 16A (1) (b), which applies where the service was determined to be necessary by an approved pathology practitioner. There is no justification for giving "practitioner" in s. 16A (1) (a) (i) any narrower meaning than the ordinary meaning in which the word is used in the introductory words of the sub-section. So understood, s. 16A (1) (a) (i) takes effect harmoniously with the rest of the subsection, and there does not arise any inconsistency, repugnancy or incongruity which might justify reading into the subparagraph words which do not appear there. The effect of s. 16A (1) (a) is that a medical benefit will be payable in respect of a pathology service, other than a prescribed pathology service, which is rendered by or on behalf of an approved pathology practitioner in pursuance of a request addressed to that practitioner by a practitioner, whether an approved pathology practitioner or not, who had determined that the service was necessary, or by an approved pathology practitioner who had not himself determined that the service was necessary. The lastmentioned case, provided for by s. 16A (1) (a) (ii), was no doubt intended to allow an approved pathology practitioner who had been requested to perform a service, but who was unable or unwilling to do so, to request another approved pathology practitioner to perform the service, without first determining that the service was necessary. Put shortly, the effect of pars. (a) and (b) is that any practitioner, whether an approved pathology practitioner or not, may determine that a pathology service is necessary; if the practitioner who so determines is an approved pathology practitioner he may perform the service himself or by his employee (s. 16A (1) (b)) or may request another approved pathology practitioner to perform it (s. 16A (1) (a) (i)), and an approved pathology practitioner so requested may in turn request another approved pathology practitioner to perform it (s. 16A (1) (a) (ii)) and in all these cases a medical benefit will be payable. If, however the practitioner who so determines is not an approved pathology practitioner, he must, if a medical benefit is to be payable, request an approved pathology practitioner to perform the service (s. 16A (1) (a) (i)). Properly understood, the provisions of s. 16A (1) (a) and (b) do not compel an approved pathology practitioner to do anything except that, as has been indicated, those provisions will as a matter of practicality compel some medical practitioners to seek to become approved pathology practitioners. (at p552)

12. Section 16A (1) (c) on the other hand has the effect that medical benefits will only be payable in respect of a prescribed pathology service if that service was rendered by or on behalf of a medical practitioner who was not an approved pathology practitioner. At first sight it seems strange that it should have been intended to deny a patient an entitlement to medical benefits in respect of a prescribed pathology service which was rendered by an approved pathology practitioner, but the intended operation of the paragraph is revealed by the regulations made to give effect to it. By reg. 4 of the Health Insurance (Pathology Services) Regulations, each pathology service to which Div. 9 of Pt 7 of the table relates is specified for the purposes of the definition of "prescribed pathology service" in s. 3 of the Act. The services set out in Div. 9 are described in the table as "Simple Basic Pathology Tests", and these are the only pathology services which may be rendered by medical practitioners who are not approved pathology practitioners if benefits are to be payable. Most, if not all, of the same services are listed in Divs 1 to 8 of Pt 7; in other words, a particular service may be both a prescribed pathology service and a pathology service other than a prescribed pathology service, so that if it is performed by a practitioner who is not an approved pathology practitioner benefits will be payable under Div. 9 and if it is performed by an approved pathology practitioner benefits will be payable under one of the other divisions of Pt 7. No doubt the general intention, somewhat obscurely expressed and indirectly achieved, was to permit medical benefits to be paid in respect of simple basic services, which were not likely to be the subject of abuse, whether they were rendered by an approved pathology practitioner or by a practitioner who was not an approved pathology practitioner, but to allow no benefits to be paid in respect of other pathology services unless rendered by an approved pathology practitioner. (at p553)

13. Of course, as was argued on behalf of the plaintiffs, the regulations might be amended, and the class of services specified as prescribed pathology services might be greatly enlarged. This possibility, which as I shall show is exceedingly remote, does not assist the plaintiffs' arguments. If the regulations enlarged the scope of prescribed pathology services so that most or even all pathology services became included in that category, it might become impossible for an approved pathology practitioner to carry on practice as a pathologist, but no medical practitioner would be compelled to do anything, except perhaps terminate his undertaking. The Act and regulations would not, by reason of such an amendment, impose any form of civil conscription. However, to amend the regulations in that way would render the scheme of s. 16A unworkable. To make the class of prescribed pathology services a very wide one would render it pointless for a practitioner to seek to become an approved pathology practitioner, and would destroy the incentive which s. 16A is intended to provide. (at p553)

14. On behalf of the plaintiffs it was also submitted that the effect of cll. 7 and 8 of the undertaking and cl. (i) of the Code of Conduct is to prevent one approved pathology practitioner who is in partnership with another from requesting the latter to render a pathology service in respect of which a medical benefit is payable. This, it was said, would mean that in some cases, for example the case of practitioners in partnership in a small country town, a practitioner would be compelled either to dissolve the partnership or to render the service himself, although he wished to request his partner to render it. However, in my opinion, the provisions of cll. 7 and 8 of the undertaking and cl. (i) of the Code of Conduct do not extend to ordinary medical partnerships, and do not prevent one partner from referring a patient to another partner for pathology tests. The arrangements to which those clauses, on their proper construction, refer are arrangements specifically directed to the sharing of fees or benefits derived from the performance of pathology services, or to providing an inducement to request, or a benefit from requesting, the performance of a pathology service. Properly understood these clauses do not have the effect of compelling any practitioner to perform any medical service. Section 129AA (1), upon which reliance was also placed, does not provide any support for the plaintiffs' contention. It is true that s. 129AA (1) (a) is so widely drawn that, if literally construed, it would prevent a spouse or relative of a patient from urging the doctor treating that patient to arrange for further pathology tests to be conducted, but even if the paragraph did have so absurd an effec, that would not mean that it imposed any form of civil conscription. Paragraph (b) of s. 129AA (1) applies only where a practitioner acts "without reasonable excuse" and so does not have any effect on ordinary reasonable partnership or business relationships. (at p554)

15. With respect to the matters so far discussed, the Act and regulations do not on their proper construction have an operation which could on any view be held to amount to the imposition of any form of civil conscription. However, some of the provisions of the Act, regulations and undertaking do have the effect - legal or practical - of compelling medical practitioners to observe certain positive requirements, and I now proceed to consider the nature of the things which those provisions compel medical practitioners to do in the course of carrying on their practices, and whether a law which compels a medical practitioner to do those things is a law which imposes any form of civil conscription. (at p554)

16. In the first place, it may be agreed that some medical practitioners, who request an approved pathology practitioner to render a pathology service, will be compelled to make the request in a written form that complies with reg. 5, or, if the request was not made in writing, to give written confirmation in accordance with reg. 5. The complusion in such a case will be not legal but practical, resulting from the fact that the provisions of s. 16A (1) make the payment of medical benefits depend upon the making of a written request or confirmation as prescribed. The request or confirmation, to satisfy reg. 5, must specify the matters detailed in that regulation, and one of those matters - "each service to which the instrument relates" - must be specified in the handwriting of the person signing the instrument (reg. 5 (8)). This means that it is no longer possible to follow the practice, which was formerly widely adopted, of marking (perhaps only with a tick) the appropriate part of a printed request form which set out a list of available pathology services. Secondly, it appears to be intended that there shall be recorded on an account, or receipt, for fees in respect of a service to which s. 16A (1) applies, or, if an agreement has been entered into under s. 20 (3) in relation to the medical benefit in respect of the service, on the form of agreement, the particulars described by reg. 6. It is not made clear by s. 16A (2) on whom this duty lies, or what is the sanction for a failure to perform it, but an approved pathology practitioner may be obliged, by virtue of cl. 3 of the undertaking, to ensure that the duty is carried out. Thirdly, an approved pathology practitioner who has rendered a pathology service in pursuance of a request made or confirmed in accordance with s. 16A (1) must retain for eighteen months the written request or written confirmation, and must produce the same on being given proper notice within that period (s. 16A (3)). Fourthly, an approved pathology practitioner must, in accordance with the undertaking, take appropriate action to ensure that his employees, and other persons who by arrangement perform duties or services for him, act in accordance with the relevant provisions of the Act, regulations and undertaking (cl. 3) and must also furnish to the Minister such information relating to the requesting or rendering by or on behalf of the practitioner of applicable pathology services as is from time to time reasonably requested by the Minister (cl. 10). (at p555)

17. The word "conscription", in the sense that seems to be most apposite for present purposes, means the compulsory enlistment of men (or women) for military (including naval or air force) service. The expression "civil conscription" appears to mean the calling up of persons for compulsory service other than military service. The meaning of the words "but not so as to authorize any form of civil conscription" in s. 51 (xxiiiA) was considered in British Medical Association v. The Commonwealth (1949) 79 CLR 201 . In that case the Court had to decide upon the validity of the Pharmaceutical Benefits Act 1947-1949 (Cth), which established a scheme under which members of the public were entitled on compliance with certain conditions to obtain, free of charge, the medicines specified in a formulary and the appliances specified in an addendum. One of the conditions of entitlement was that the medicine or appliance must be prescribed by a medical practitioner on a prescription form supplied by the Commonwealth. The statement of claim, to which the defendants demurred, alleged that a very large number of ordinary prescriptions and appliances were contained in the formulary and addendum, and that a medical practitioner could not carry on his practice without writing prescriptions for such medicines and appliances. Section 7A of that Act was in the following terms:
"(1) Subject to this section, a medical practitioner shall not write, in respect of a person entitled to receive pharmaceutical benefits, a prescription for -
(a) an uncompounded medicine the name of which, or a medicinal compound the formula of which, is contained, or is deemed to be included, in the Commonwealth Pharmaceutical Formulary; or
(b) a material or appliance the name of which is contained in the prescribed addendum to the Commonwealth Pharmaceutical Formulary,
otherwise than on a prescription form supplied by the Commonwealth for the purposes of this Act.
Penalty: Fifty pounds.
(2) The last preceding sub-section shall not apply -
(a) in any case in which the person in respect of whom, or at whose request, the prescription is written requests the medical practitioner not to write the prescription on a prescription form supplied by the Commonwealth for the purposes of this Act; or
(b) in such other cases or circumstances as are prescribed." It was held by a majority that s. 7A imposed a form of civil conscription and was invalid. (at p556)

18. I have already said that a majority of the Court in that case held that the relevant words of s. 51 (xxiiiA) qualify "medical and dental services", and it follows that the compulsory service which cannot be imposed is service of a medical or dental kind. It was further held that the expression "civil conscription" in the paragraph is not limited to compulsory service which is performed full-time, or regularly, and that the relevant words are intended to prevent any form of compulsion to perform particular services (1949) 79 CLR, at pp 249-250, 278, 287, 293-294 . However, some members of the majority went further and held that a law which compels people to perform services in a particular manner is a law which imposes civil conscription. Latham C.J. said (1949) 79 CLR, at p 249 that the term "civil conscription" "could properly be applied to any compulsion of law requiring that men should engage in a particular occupation, perform particular work, or perform work in a particular way". Williams J. (1949) 79 CLR, at p 290 said that a submission that "a law which merely compels medical practitioners to act in some particular manner in the course of or as incidental to the carrying on of their profession does not authorize any form of civil conscription" would unduly narrow the effect of the wide words "any form of" in the expression in parenthesis. Webb J. seems to have been of a similar opinion (1949) 79 CLR, at p 294 . The other member of the majority, Rich J., who was content to say (1949) 79 CLR, at p 255 that the phrase "civil conscription" means "compulsion in connection with 'medical and dental services'", perhaps did not intend to go so far. The dissentients, Dixon and McTiernan JJ., did not agree with the wide view of the majority. (at p557)

19. With the greatest respect, I am unable to agree with those observations by Latham C.J. and Williams and Webb JJ. as to the meaning and effect of the expression "any form of civil conscription". That expression, used in its natural meaning, and applied, as the context of par. (xxiiiA) requires, to medical and dental services, refers to any sort of compulsion to engage in practice as a doctor or a dentist or to perform particular medical or dental services. However, in its natural meaning it does not refer to compulsion to do, in a particular way, some act in the course of carrying on practice or performing a service, when there is no compulsion to carry on the practice or perform the service. It would be an abuse of language to say that a soldier who has voluntarily enlisted in the army becomes a conscript because he is obliged to obey orders as to the manner in which he performs his military duties. Similarly it could not properly be said that it would be a form of civil conscription to require a person who had voluntarily engaged in civilian employment to perform the duties of that employment in accordance with the instructions given to him by his employers. For example, a clerk who was instructed to write out orders for goods or services only on a specified form could not be said to be thereby subjected to a form of civil conscription. There is nothing in the Constitution that would indicate that the expression "any form of civil conscription" where it appears in s. 51 (xxiiiA) should be given an enlarged meaning which its words do not naturally bear. The words "any form of" do not, in my opinion, extend the meaning of "conscription", and that word connotes compulsion to serve rather than regulation of the manner in which a service is performed. Of course no express power is conferred on the Parliament to make laws to regulate the manner of performance of medical or dental services, but it appears clearly necessary to the effective exercise of the power conferred by s. 51 (xxiiiA) that the Parliament should be able to make laws as to the way in which medical and dental services provided by the Commonwealth under the authority of that paragraph are performed, and laws annexing conditions to the entitlement to any of the benefits provided under that authority even if those conditions may have the result that a medical or dental service must be rendered in a particular way if the benefit is to be obtained. I find it impossible to discern in the words in parenthesis in par. (xxiiiA) any intention to prevent the Parliament from making laws of that kind, provided that no compulsion to serve is imposed. I respectfully agree with the opinion expressed by Dixon J. in British Medical Association v. The Commonwealth (1949) 79 CLR, at p 278 that "a wide distinction exists between on the one hand a regulation of the manner in which an incident of medical practice is carried out, if and when it is done, and on the other hand the compulsion to serve medically or to render medical services"; the latter is within the prohibition but the former is not. If the incident of practice which is regulated is not medical or dental, but financial and administrative, it is clearly outside the prohibition. (at p558)

20. Latham C.J. and Webb J. were influenced in reaching this conclusion by the opinion that if the bracketed words of par. (xxiiiA) did not have the effect which they attributed to them, the Parliament would be able to legislate so as to bring about a complete control of medical and dental practices (1949) 79 CLR, at pp 251, 294 . Williams J. (1949) 79 CLR, at p 290 expressed a similar opinion, although the examples he gave suggest that he thought that the sort of control which might be exerted would be rather more limited. No doubt their Honours had in mind the principle of interpretation under which a statutory provision, if ambiguous, may be construed so as to avoid inconvenience and injustice. However, it would seem to me impermissible to give to the words of a constitutional prohibition a meaning wider than that which they naturally convey out of an apprehension that the legislative powers, if not heavily fettered, might be used to effect a wide control of professional activities. In any case, it does not in my opinion necessarily follow, as Latham C.J. and Webb J. feared, that if the construction which those Justices adopted is rejected, it would be possible for the Parliament, without infringing the prohibition of civil conscription, to provide that a doctor or dentist should carry on his practice at a particular place, or at a particular time, or only for a particular class of patients. In some circumstances, at least, provisions having that result might well be regarded as imposing a form of civil conscription. It is necessary in every case to consider the true meaning and effect of the challenged provisions, in order to determine whether they do compel doctors or dentists to perform services generally as such, or to perform particular medical or dental services; if so, they will be invalid. (at p558)

21. It follows from what I have said that if the ratio decidendi of British Medical Association v. The Commonwealth was expressed in the observations with which I have disagreed, I should regard the case as wrongly decided. However, I consider that the decision may be supported on narrower grounds and that those observations may be treated as dicta. In the first place it may be observed that s. 7A of the Pharmaceutical Benefits Act 1947-1949 required that a doctor should write any prescriptions for any medicines included in the formulary on the form supplied by the Commonwealth, whether or not the medicines were to be obtained free. Therefore the section had no necessary relationship with any pharmaceutical benefit or medical services provided by the Commonwealth: see per Latham C.J. (1949) 79 CLR, at p 247 . It is noteworthy that s. 8 of that Act, which provided that a person should not be entitled to receive pharmaceutical benefits from an approved pharmaceutical chemist, except, inter alia, on presentation of a prescription written and signed by the medical practioner and, except as prescribed, written on a prescription form supplied by the Commonwealth, was upheld as valid. Unlike s. 7A, s. 8 did no more than prescribe a condition of giving a pharmaceutical benefit. Latham C.J. said: "But it is one thing to provide as a condition of giving a pharmaceutical benefit that a prescription shall be written on a particular form, and another thing to provide that a doctor shall write any prescription for medicines which are included within a formulary upon a particular form, whether or not such medicines are to be supplied free under the Act. Section 7A (1) is a provision of the latter description." Secondly, the majority of the Court appear to have considered that, in the light of the history of the earlier legislation, and having regard to the scheme of the Pharmaceutical Benefits Act considered as a whole, s. 7A could be seen to have the intention to compel medical practioners to join in the Commonwealth scheme for the provision of free pharmaceutical benefits, and to provide, against their will, a medical service for the Commonwealth. This view was clearly expressed by Williams J. (1949) 79 CLR, at pp 289-290 , and by Webb J. (1949) 79 CLR, at pp 293-294 , and Latham C.J. and Rich J. appear to have been of a similar opinion (1949) 79 CLR, at pp 253, 256 . In both these respects that case is distinguishable from the present. (at p559)

22. The provisions in question in these proceedings do compel medical practitioners to perform certain duties in the course of carrying out their medical practices, but they do not go beyond regulating the manner in which some of the incidents of those practices are carried out, and they do not compel any medical practitioner to perform any medical services. Most of the duties imposed relate only to things done incidentally in the course of practice, rather than to a medical service itself. The only possible exception is s. 16A (1), which requires that a request by a medical practitioner to an approved pathology practitioner to render a pathology service shall be made or confirmed in writing as prescribed. A request of that kind may be regarded as a medical service. However, s. 16A (1) does not compel any medical practitioner to make such a request. What it requires is that the request, if made, be made or confirmed by a written instrument which satisfies reg. 5. There is nothing in that regulation which affects in the slightest the performance by a medical practitioner of his medical duties and functions. The statutory requirements may impose on him more administrative work. In particular he is required to specify, in his own handwriting, the services to which the instrument relates, and cannot simply mark a form on which is printed a list of possible services. The reason why a condition of this kind is attached to the entitlement to medical benefits is no doubt that the use of the printed form might reasonably be regarded as likely to contribute to laxity and to facilitate fraud. However that may be, to require a practitioner to write out particulars of the service which he has decided to request another practitioner to perform is not to compel the practitioner making the request to perform a medical service. Even more clearly, the requirements of s. 16A (2) with regard to accounts and receipts, and those of s. 16A (3) with regard to the retention and production of any written request or confirmation, do not compel any medical practitioner to perform any medical service. Clause 3 (b) of the undertaking, which obliges a medical practitioner to exercise some supervision over his servants and agents, and cl. 10, which requires a medical practitioner to furnish such information as is reasonably requested with regard to the requesting or rendering of pathology services in respect of which medical benefits are payable, are also no more than a regulation of the incidents of medical practice and do not compel a medical practitioner to perform any medical service. (at p560)

23. For these reasons none of the provisions in question imposes any form of civil conscription contrary to s. 51 (xxiiiA) of the Constitution. (at p560)

24. The alternative submission made on behalf of the plaintiffs was that the Health Insurance Amendment Act 1977 is a law imposing taxation within s. 55 of the Constitution. The provision which is said to impose taxation is s. 16C (2), which provides that where an elegible person who wishes to become an approved pathology practitioner gives the appropriate written undertaking together with a fee of $10 or of such other amount as is prescribed, the Minister shall either accept the undertaking, or refer the question to a Medical Services Committee of Inquiry as the case may be. The fee when paid is not required to be used for any particular purpose of the Act; it is not paid into the Health Insurance Fund under s. 126 of the Act, but is paid into Consolidated Revenue. (at p561)

25. In Matthews v. Chicory Marketing Board (Vict.) (1938) 60 CLR 263, at p 276 , Latham C.J. described a tax in words which have been frequently cited with approval: "The levy is, in my opinion, plainly a tax. It is a compulsory exaction of money by a public authority for public purposes, enforceable by law, and is not a payment for services rendered." Of course, the word "rendered" in this passage must have been intended to include "to be rendered". In any case a guide to the construction of s. 55 is provided by s. 53 of the Constitution which provides, inter alia, as follows:
"Proposed laws appropriating revenue or moneys, or imposing taxation, shall not originate in the Senate. But a proposed law shall not be taken to appropriate revenue or moneys, or to impose taxation, by reason only of its containing provisions for the imposition or appropriation of fines or other pecuniary penalties, or for the demand or payment or appropriation of fees for licences, or fees for services under the proposed law.
The Senate may not amend proposed laws imposing taxation. ..."
The expression "laws imposing taxation" must be intended to have the same meaning in those two related sections, as Isaacs J. appears to have recognized in Federal Commissioner of Taxation v. Munro (1926) 38 CLR 153, at p 190 . Therefore the fact that a law contains provisions for the payment of fees for licences or fees for services does not mean that it is a law imposing taxation within s. 55. I have already held that the Act exerts a practical compulsion upon some medical practitioners to become approved pathology practitioners, and this of course means that those persons are practically compelled to pay the fee to which s. 16C (2) refers. I shall assume, without deciding, that practical, as distinct from legal, compulsion is enough to constitute a charge a tax, just as it is sufficient for the purposes of s. 51 (xxiiiA). I therefore may accept that the fee is a compulsory exaction by a public authority for public purposes. However, in my opinion, it is a fee for services. It is the price which a medical practitioner, who seeks to become an approved pathology practitioner, must pay for the purpose of having his undertaking considered by the Minister, and either accepted or referred for inquiry and report to a Medical Services Committee of Inquiry. In other words, it is a charge for the services performed in dealing with the application. The fact that it is paid into Consolidated Revenue does not prevent it from being a fee for services. The nature of such a payment is not determined by what is done with it after its receipt. Further, the fact that the service for which the fee is charged is one which the practitioner is in effect compelled to obtain does not in my opinion alter the character of the fee or convert it into a tax. An exaction may properly be characterized as a licence fee notwithstanding that the licence is one that must necessarily be obtained and the same is in my opinion true of a fee for services; fees charged for compulsory licences, or for holding plants or animals in quarantine, might provide examples. (at p562)

26. The amount of an exaction may, I think, be relevant to the question whether it is a fee for services, since an exaction may be so large that it could not reasonably be regarded as a fee. My brother Aickin, in his judgment in the present case, draws attention to the difficulties that may arise under s. 55 of the Constitution when a Statute gives power to make regulations prescribing the amount of a fee but does not expressly impose any limit on the amount that may be prescribed. As at present advised, I consider that an Act which gave power by regulation to impose a tax would itself be an Act imposing taxation. If s. 16c (2) were construed as meaning that there was no limit to the amount of the fee that might be prescribed, it might well follow that the Health Insurance Amendment Act 1977 would be an Act imposing taxation and that the remaining provisions of that Act would be invalid. What is to be prescribed under s. 16c (2) is clearly the amount of a fee - the section expressly so indicates - and unless the words of the section were unambiguous the Court would not ascribe to them a meaning which enabled so large an amount to be prescribed that the exaction could properly be described as a tax with the consequence that the other provisions of the amending statute became invalid. The Parliament cannot possibly have intended such a result, and the maxim ut res magis valeat quam pereat should be applied. In my opinion the intention that can be gleaned from the provisions of s. 16c (2) is that the amount to be prescribed shall be such that the amount payable remains a fee. In the present case no amount has been prescribed, and the amount of $10 is not so large as to give the exaction the character of a tax. (at p562)

27. For these reasons the presence of s. 16c (2) in the Health Insurance Amendment Act 1977 does not have the effect that that statute is a law imposing taxation. (at p563)

28. In my opinion, therefore, the challenge to the Act and to the Regulations should fail. (at p563)

29. The stated case contained, in Pt B, a statement of certain facts which the Commonwealth asserted to be relevant, but whose relevance the plaintiffs disputed. In the view that I take it is unnecessary to consider the question whether any of those facts are relevant. (at p563)

30. I would therefore answer the questions asked in the stated case as follows:
1. Whether, upon the facts set out in pars 1 to 50 of this Case ss. 16A, 16B and 16C of the Health Insurance Act 1973 as amended, are or any of them are invalid and void?
Answer: No.
2. Whether, upon the facts set out in pars 1 to 50 of this Case, the regs 5 (2), (3), (4), (5), (7), (8), (9), (10), 6, 7 and 8 made under the Act on 28th July 1977, and called the Health Insurance (Pathology Services) Regulations are or any of them are invalid and of no effect.
Answer: No.
3. Are any of the facts set out in Pt B relevant to the resolution of either of the preceding questions?
Answer: Unnecessary to answer. (at p563)

STEPHEN J. I am in entire agreement with the reasons for judgment of Gibbs J. I add only the following, in affirmation of what was said by Williams J. in the B.M.A. Case (1949) 79 CLR, at p 287 , concerning one aspect of s. 51 (XXiiiA). (at p563)

2. When that sub-section was inserted in the Constitution in 1946, the grant of legislative power which it conferred was, in one respect, made subject to "a qualification of an unexampled kind", as Dixon J. pointed out in the B.M.A. Case (1949) 79 CLR, at p 259 . That qualification, expressed in the phrase "but not so as to authorize any form of civil conscription", applies only to the provision of medical and dental services. It has no application to the provision of the other allowances, pensions, endowment and benefits, including "sickness benefits", to which the sub-section also refers. Let it then be supposed that a law for the provision of "sickness benefits" may include the provision of medical or dental services: such a law may not disregard the qualification which sub-s. (XXiiiA) expressly attaches to the provision of such services. That qualification restricts the permitted modes in which those services may be provided. To disregard part of the law's content, treating the whole as an exercise of the unqualified power to provide sickness benefits and failing to recognize the character of those parts which provide medical and dental services, is to ignore the specific restriction imposed by Parliament and People when the Constitution was amended by the insertion of sub-s (XXiiiA). (at p564)

3. I would answer the questions asked in the stated case in the manner proposed by Gibbs J. (at p564)

MASON J. Subject to the reservations stated below, I agree with the reasons for judgment of Gibbs J. and with the answers which he proposes to the questions asked in the case stated. (at p564)

2. I find it unnecessary to decide conclusively whether Williams J. was correct in British Medical Association v. The Commonwealth (1949) 79 CLR, at p 287 when he said that "the express inclusion of medical and dental services" in s. 51 (XXiiiA) "clearly indicates to my mind that whenever such services", viz. medical and dental services, "are provided whether as services exclusively or in the course of providing some other benefit, the law must not authorize any form of civil conscription of such services". Likewise, I would leave open the question whether practical compulsion, as distinct from legal compulsion, is enough to satisfy the constitutional conception of "civil conscription" in s. 51 (XXiiiA). (at p564)

3. The conclusion that there is no practical compulsion is enough to dispose of the plaintiffs' case to the extent to which it is based on the civil conscription argument. (at p564)

MURPHY J. The question is whether certain parts of the Health Insurance Act 1973 (Cth), as amended, and certain regulations made under that Act are invalid because they imposed a form of civil conscription in contravention of s. 51 (XXiiiA) of the Constitution. Section 51 authorizes the Parliament:
". . . to make laws for the peace, order, and good government of the Commonwealth with respect to:
. . .
(XXiiiA) The provision of maternity allowances, widows' pensions, child endowment, unemployment, pharmaceutical, sickness and hospital benefits, medical and dental services (but not so as to authorize any form of civil conscription), benefits to students and family allowances:
. . . "
As a matter of grammatical construction, the words in brackets qualify only the phrase, "medical and dental services". The prohibition on imposing any form of civil conscription in laws with respect to the provision of medical and dental services is not confined to protecting medical or dental practitioners. It was introduced to give a specific protection in regard to the provision of medical and dental services. Even without it, the Constitution would not, in my opinion, authorize Parliament to make laws providing for civil conscription (in general, or other than in very limited circumstances). (at p565)

2. The Constitution makes no reference to different classes of society and its terms are inconsistent with slavery, serfdom or similar vestiges of a feudal society. It contains an implication of a free society which limits Parliament's authority to impose civil conscription. Some forms of civil conscription (for example, in emergencies) may be consistent with the notion of a free society. (at p565)

3. I do not find it necessary to decide whether the provision of any form of civil conscription applies whenever such services "are provided whether as services exclusively or in the course of providing some other benefit". In my opinion, practical compulsion, as distinct from legal compulsion, is enough to satisfy the concept of "civil conscription". (at p565)

4. Subject to these observations, I agree with Gibbs J.'s judgment and the answers he proposes. (at p565)

AICKIN J. The legislative provisions, the validity of which is challenged in these proceedings, are quoted in full in the reasons for judgment of my brother Gibbs, as are the material regulations. On the question of the validity of ss. 16A and 16B of the Health Insurance Act 1973 (Cth), as amended ("the Act") and of the challenged regulations, I agree generally with those reasons but there are some further observations which I wish to add. (at p565)

2. I agree that the limitation embodied in the grant of power in s. 51 (xxiiiA) of the Constitution extends to practical as well as legal compulsion. It is clear enough that the words "but not so as to authorize any form of civil conscription" are designed to impose an important limitation of the new legislative power conferred by the constitutional amendment which inserted par. (xxiiiA) into s. 51. No doubt a legal obligation to perform particular medical or dental services, or to perform medical or dental services at a particular place, or to perform such services only as an employee of the Commonwealth would be clear examples of civil conscription. An equally clear example would be the prohibition of the performance of medical or dental services by particular qualified practitioners other than in some designated place, though no punishment was attached to failure to practise in that place. Other forms of "practical compulsion" are easy enough to imagine, particularly those which impose economic pressure such that it would be unreasonable to suppose that it.could be resisted. The imposition of such pressure by legislation would be just as effective as legal compulsion, and would, like legal compulsion, be a form of civil conscription. To regard such practical compulsion as outside the restriction placed on this legislative power would be to turn what was obviously intended as a constitutional prohibition into an empty formula, a hollow mockery of its constitutional purpose. (at p566)

3. In the present case however the reasons given by Gibbs J. demonstrate that the challenged sections do not bear the construction put upon them by those who attack the legislation. The argument that civil conscription was imposed by the legislation depended primarily upon the operation of s. 16A (1) (a) (i) of the Act, the critical words being "the practitioner". I agree with Gibbs J.'s reasons for construing those words as not referring exclusively to "practitioners other than approved pathology practitioners" but as including also "approved pathology practitioners", i.e. they include all practitioners. (at p566)

4. I agree with Gibbs J. that the effect of s. 16A (1) (a) and (b) is in a practical sense to compel some medical practitioners to become "approved pathology practitioners" but there is no compulsion in relation to the provision of any medical service, nor does it operate to exclude a pathology practitioner from a field of practice in which he is duly qualified, unless the requirement of approval has that effect. A pathology practitioner must be "approved" before a medical benefit will be payable in respect of a pathology service rendered by him. There is however a class of pathology services, i.e. "prescribed pathology services" for which no benefit is payable unless rendered by a person who is not an approved pathology practitioner; such pathology services are to be prescribed by regulation. The exercise of this power could have the effect of making it impossible or impracticable to practise as a specialist pathologist if the range of "prescribed pathology services" were made wide enough. With due respect I am unable to derive assistance as to the intended operation of par. (c) of s. 16A (1) or of the power to make regulations for the purpose of the definition of "prescribed pathology service" (see definition of that term in s. 3 (1) of the Act) from the regulations already made. The power is on its face unlimited in extent and could be exercised so as to drive specialist pathologists out of practice. Such an exercise of the regulation-making power would in my opinion be outside constitutional power. Whether any regulation did exceed that power would depend on the particular circumstances, including the extent of the area of practice from which specialist pathologists would be excluded. In the present case there is nothing to suggest that the existing regulations have any such effect. (at p567)

5. I respectfully agree with the reasons given by Gibbs J. for concluding that cll. 7 and 8 of the undertaking and cl. (i) of the Code of Conduct do not have the effect for which the plaintiffs contended and that those provisions do not apply to "ordinary medical partnerships". (at p567)

6. A further question arises concerning s. 16B and its relation to s. 16C. It authorizes the Minister to draw up and vary the undertaking which under s. 16C must be given by persons seeking to become approved pathology practitioners. No express limits are placed on what matters may be included in such an undertaking, either originally or by variation. Moreover when the power to vary the undertaking in exercised, undertakings previously accepted by the Minister are deemed by s. 16C (7) "to have been varied to accord with that form of undertaking as so varied by the Minister." No criteria are prescribed by reference to which the Minister is to draw up the terms of the undertaking or of variations thereto. No doubt by implication they are required to be relevant to the subject matter but no express limits are prescribed by the Act. An undertaking so varied binds the approved practitioner and he cannot escape the effect of the new provisions save by giving not less than thirty days notice of termination of his undertaking. I think it clear that the power to prescribe and vary the contents of the undertaking must be read so as not to extend to anything which would be beyond constitutional power, including provisions which would amount to civil conscription, whether enforced by "practical compulsion" or some other form of conscription. (at p567)

7. The plaintiffs also sought a declaration that, save for s. 16C (2), the whole of the Health Insurance Amendment Act 1977 was invalid. This claim was based on the contention that s. 16C (2) was a "law imposing taxation" within s. 55 of the Constitution. That sub-section provides that an eligible practitioner who wishes to become an "approved pathology practitioner" must, on giving the required written undertaking, pay a fee of $10 or "such other amount as is prescribed". The fee is to be paid into Consolidated Revenue. The Minister must thereafter either accept the undertaking or refer it to a Medical Services Committee of Inquiry. (at p568)

8. The fee of $10 may perhaps in present times be regarded as almost nominal, but it may be altered by regulation, there being no expressed limit on the power to increase it. I respectfully agree with Gibbs J. that the words "laws imposing taxation" must be given the same meaning in s. 55 of the Constitution as they have in s. 53, which excludes from the ambit of that phrase laws "for the demand or payment . . . of fees for licences, or fees for services under the proposed law". I also agree that there is a practical compulsion on some medical practitioners (in particular, specialist pathologists) to become "approved pathology practitioners", and that such practical compulsion extends to the payment of the fee referred to in s. 16C (2). If an exaction is properly characterized as a tax, I see no reason why it should be deprived of that character by virtue of the fact that the sanction for failure to pay is practical compulsion rather than legal compulsion. As a regular means of raising revenue practical compulsion has not been used since the seventeenth century, cp. the forced loans and "free" gifts in the early Stuart period, as to which see e.g. Holdsworth, History of English Law, vol. VI, pp. 40-41. It would be somewhat surprising to find in the late twentieth century legislation which purports to authorize the executive government to do that. However no legislative limit is imposed upon the amount of the "fee" which may be prescribed. (at p568)

9. It was submitted however that this charge is not a tax but is a fee for a service, the relevant service being the consideration by the Minister of the application for approval. It is however not enough that the exaction is called a "fee". The "service" is one which the practitioner is, in practical terms, compelled to obtain. No criteria for acceptance of the undertaking are prescribed, whether acceptance by the Minister or by the Medical Services Committee. On the face of the legislation the discretion appears unlimited. (at p568)

10. It was suggested that, although the $10 charge may be a fee for a service, the amount of the exaction prescribed by regulation might be so large that it could not be regarded as a fee for a service. The absence of any limit to the fee which may be so prescribed would appear to make such an exaction possible, though presumably not probable. The apparent extent of this power raises a novel constitutional question to which no ready answer appears. There would be no absence of constitutional power to impose such a tax; indeed, if it mattered, it would not be a new form of tax for what may be called "franchise" taxes have often been imposed, and this could well be regarded as such a tax. Moreover the tax power is not limited to old or well-known taxes but extends to any form of tax which ingenuity may devise. There would thus be no basis for "reading down" s. 16C so as to limit it to "fees for service" in order to confine it within constitutional power. The consequence of the power to prescribe charges extending to those so large that they could not be regarded as fees would not be to make such grant of power extend beyond constitutional limits. There would thus be no basis for reading down the statutory provision pursuant to s. 15A of the Acts Interpretation Act 1901 (Cth) so as to confine it within constitutional power. The consequence of an Act being one which imposes a tax and also deals with other matters is not that the taxing provision fails; it is that all the other provisions fail. It may perhaps be said that an Act which may be regarded as doing no more than to authorize the making of regulations which will impose a tax does not fall within the scope of s. 55 of the Constitution. If however the regulation-making power is exercised then the Act itself must be seen to be one which imposes the tax and accordingly all the other provisions of the Act must be regarded as being of "no effect" pursuant to s. 55. Whether such invalidity would operate retrospectively is a question which has never arisen. Section 55 does not appear to contemplate the possibility that other provisions in an Act imposing taxation may become void otherwise than from the very moment of an Act coming into operation. Three possible views (not necessarily mutually exclusive) as to the consequences may follow from that situation. The first is that the Constitution may impliedly prohibit the imposition of a tax by regulation made under an Act authorizing such a regulation. The difficulty about that proposition is that there seems to be no rational basis for denying validity to an Act which does no more than authorize the imposition of a tax by regulation, e.g., a customs duty on specified goods and such other goods as may be prescribed by regulation. Such a provision would not contravene the second part of s. 55 as dealing with more than one subject of taxation. The view has never been taken that the Customs Tariff Acts may be invalid because they impose customs duty on more than one category of goods, and there are in those Acts some powers to vary the items by the exercise of delegated legislative power. Customs duties constitute a single subject of taxation, just as excise duties and income tax are single subjects of taxation. I can see no constitutional basis for denying validity to legislation authorizing the imposition of a tax by regulation so long as it did not contravene the second paragraph of s. 55. (at p570)

11. The second possibility is that an Act authorizing the imposition of a tax by regulation should itself be regarded as an Act imposing a tax within the meaning of s. 55. If the first possible view is rejected the conclusion would seem to follow that an Act authorizing the imposition of a tax by regulation and which did not contravene the second part of s. 55 should itself be characterized as an Act imposing taxation. The contrary view seems to be in conflict with the constitutional principle underlying s. 55 and moreover to involve difficulties about retrospective invalidation which cannot have been intended. If what is authorized is a tax, i.e., if the Act is therefore an Act imposing a tax, it must follow that the whole of the balance of the Health Insurance Amendment Act 1977 is invalid. (at p570)

12. The third possible view is that the consequences which may flow from this particular regulation-making power being construed as extending to the imposition of a tax are so curious and uncertain as to warrant the conclusion, as a matter of ordinary construction (not by reference to s. 15A), that the provision should not be construed as authorizing the imposition of a charge of a magnitude such that it must be characterized as a tax and not a fee. On that view the power to prescribe "such other amount" would be read as extending only to such amounts as were no more than fees for a service. (at p570)

13. Of these three views the third seems most likely to accord with the intention of the Parliament. Section 16C (2) requires the payment of "a fee of $10 or of such other amount as is prescribed". The ordinary meaning of those words is that what may be prescribed is "a fee of such other amount as is prescribed". So read it would not authorize the prescribing of any amount which was not properly characterized as a fee. That consideration assists in characterizing the exaction authorized as being no more than a fee. The nature of the task to be performed by the Minister is such as to indicate that only a very small sum could be properly characterized as a fee. His task would appear to be to ascertain, or to have some officer of his Department ascertain, that the undertaking was in the currently prescribed form and that the applicant was not a person in respect of whom an earlier acceptance had been revoked. No criteria are specified by reference to which he may, or should, refer to the Committee of Inquiry the question whether he is justified in refusing to accept the undertaking. It would not be a proper construction of the Act to regard the Minister as authorized to refer every application to the Committee. Even if it were legitimate to impose a fee which would recoup the estimated cost of examining each application, as to which I express no opinion, it is apparent that the "cost" so ascertained could not be a substantial figure. It is not necessary for present purposes to investigate what would be the proper basis for estimating such a figure. (at p571)

14. It is enough to say that the power to prescribe the fee is limited to such sums as may be properly so described and does not extend to anything which could be called a tax. The present charge of $10 is, as I have said, "almost nominal" and as such falls within the concept of a fee rather than a tax. Accordingly the balance of the 1977 Act is valid, and any prescribed sum which was large enough to constitute a tax would be outside the power to prescribe "fees". (at p571)

15. In relation to the discussion of the British Medical Association Case (1949) 79 CLR 201 , I do not read the passages in the judgments of Latham C.J., Rich and Williams JJ. which are discussed by Gibbs J. in quite the same way as he has suggested. The expressions "to perform particular work" or "to perform particular work in a particular way" and similar expressions used in those judgments are no doubt imprecise but their Honours did not regard them as covering the compulsory use of a particular prescription form when a medical practitioner prescribed some medicament under a Commonwealth scheme for pharmaceutical benefits. It is however easy enough to think of examples of requirements to do particular acts in the course of medical practice or to do them in a particular way which would amount to a "form of civil conscription". It would depend in every case on the nature of the act in question. "Civil conscription" is not a technical expression with a settled historical meaning. It is no doubt used by way of analogy to military conscription but the use of the words "any form of civil conscription" indicates to my mind an intention to give the term a wide rather than a narrow meaning, the precise extent of which cannot be determined in advance. (at p571)

16. In the result therefore I agree with the answers which Gibbs J. has set out in his reasons for judgment to the questions in the stated case. (at p571)

WILSON J. In this case, like Mason J., I would leave open the question whether practical compulsion, as distinct from legal compulsion, is capable of satisfying the constitutional conception of "civil conscription" in s. 51 (xxiiiA). In other respects, I agree with the reasons for judgment of Gibbs J. and would answer the questions asked in the stated case in the way proposed by him. (at p572)

Orders


Order that the questions asked in the Stated Case be answered as follows:
Question 1 Whether, upon the facts set out in pars 1 to 50 of this Case, ss. 16A, 16B and 16C of the Health Insurance Act, 1973 as amended, are or any of them are invalid and void?
Answer: No.
Question 2 Whether, upon the facts set out in pars 1 to 50 of this Case, the regs 5(2), (3), (4), (5), (7), (8), (9), (10), 6, 7 and 8 made under the Act on 28th July 1977, and called the Health Insurance (Pathology Services) Regulations are or any of them are invalid and of no effect?
Answer: No.
Question 3 Are any of the facts set out in Pt B relevant to the resolution of either of the preceding questions?
Answer: Unnecessary to answer.

Order that the Plaintiffs pay to the Defendants their costs of and incidental to this Stated Case to be taxed.

Remit to a Justice for any further action that may be necessary.