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Macquarie Hospital Services Pty Ltd and Secretary, Department of Health and Ageing [2004] AATA 1149 (4 November 2004)

Last Updated: 10 November 2004

Administrative

Appeals

Tribunal

DECISION AND REASONS FOR DECISION [2004] AATA 1149

ADMINISTRATIVE APPEALS TRIBUNAL )

) No N2003/1891

GENERAL ADMINISTRATIVE DIVISION		)
	Re		MACQUARIE HOSPITAL SERVICES PTY LTD

Applicant

And

SECRETARY, DEPARTMENT OF HEALTH & AGEING

Respondent

DECISION

Tribunal

The Hon R N J Purvis Q.C., Deputy President
Dr Ion Alexander, Member

Date 4 November 2004
Place Sydney

Decision

The decision under review is set aside. The application of the Applicant to become an approved provider of residential aged care under the Act should be and is granted.

..............................................
[sgd] R N J Purvis
Deputy President

CATCHWORDS

AGED CARE – application to become approved provider for residential aged care – suitability of key personnel – management of a facility of needs of people in aged care –financial management expertise – character assessment – litigation and adverse findings – legislative requirement and principles – decision under review set aside – approved provider of residential aged care under the Act is granted

Aged Care Act 1997 section 8

Sandtara Pty Ltd & Abigroup Limited, SCNSW, 25 September 1997, 50057/95

Abignano and Anor v Wenkart and Anor, SCNSW, 27 November 1998, 2522/1998

Abignano: in the matter of Abignano v Wenkart [1999] FCA 1695 (29 October 1999)

REASONS FOR DECISION

October 2004	The Hon R N J Purvis Q.C., Deputy President Dr Ion Alexander, Member

THE APPLICATION

1. On 15 January 2003 a delegate of the Secretary, Department of Health and Ageing ("the Respondent") advised Macquarie Hospital Services Pty Ltd ("the Applicant") of a decision to reject an application made by the Applicant on 23 August 2002 to become an approved provider of residential aged care pursuant to section 8-2 of the Aged Care Act 1997 ("the Act"). Following a request being made for the Respondent to review its original decision the Respondent on 4 November 2003 decided to confirm the rejection of the application.
2. The Applicant on 2 December 2003 applied to the Tribunal for review of the Respondent’s decision of 4 November 2003.

ISSUES ARISING FOR DETERMINATION

3. The issues arising for determination in the present application for review are not identical with matters of concern initially raised by the Respondent. Matters of principal concern that are now raised are:

(1) The suitability of the key personnel meaning thereby Dr Thomas Wenkart, to provide aged care; this concern including questions as to the honesty of Dr Wenkart; and
(2) The extent to which the application for approval and the evidence before the Tribunal discloses a sufficient appreciation by Dr Wenkart and those likely to be involved in the management of a facility of the needs of people in aged care.

4. Matters of lesser concern relate to the ability of the Applicant to provide appropriate financial management expertise and the interaction between the hospital activities presently under the control of Dr Wenkart and any aged care facility that might be established by him.

THE HEARING

5. At the hearing of the application before the Tribunal the Applicant was represented by Mr D P Studdy of Counsel and the Respondent by Mr K P Smark and Ms S T Chrysantou of Counsel.
6. There was introduced into evidence the documents lodged by the Respondent with the Tribunal pursuant to section 37 of the Administrative Appeals Tribunal Act 1975 marked T1 to T24. Written material tendered by the parties was admitted as exhibits and marked accordingly:

EXHIBIT NO	DESCRIPTION	DATE
A	Certificate of Prof Gregory Falk re Geoffrey Holden	24 September 2004
B	ASIC Historical Company Extract re Applicant
C	Affidavit Dr Martyn John Baker	29 July 2004
D	Affidavit Dr Milana Vortrubec	28 July 2004
E	Affidavit Kerry Jones	28 July 2004
F	Affidavit Peter Bowman	28 July 2004
G	Affidavit Dr Thomas Wenkart	5 August 2004
H	Affidavit Linda Huxley together with annexure 1-14	29 July 2004
J	Affidavit Robert Gorczyca	30 July 2004
K	Article "Aged Care Hospitals crucial to AC provision"
L	Respondent’s Report "Investing in Australia’s Aged Care – Review of Pricing Arrangements in Residential Aged Care"
1	Statement of Jane Olivia Bailey together with annexure	29 August 2004
2	Bundle of decision TABS marked 1-12

7. Oral evidence was given by Dr T Wenkart, Ms Linda Huxley, Hospital Director Manly Waters Private Hospital, Ms Jane Oliva Bailey, Assistant Secretary Quality Outcomes Branch Ageing and Care Division, Department of Health and Ageing and Mr Robert Gorczyca, solicitor upon which they were cross-examined.

RELEVANT LEGISLATIVE PROVISIONS

8. So far as relevant to this application the Act provides:

"SECT 2-1 The objects of this Act
(1) The objects of this Act are as follows:
(a) to provide for funding of *aged care that takes account of:

(i) the quality of the care; and
(ii) the *type of care and level of care provided; and

(iii) the need to ensure access to care that is affordable by, and appropriate to the needs of, people who require it; and

(iv) appropriate outcomes for recipients of the care; and

(v) accountability of the providers of the care for the funding and for the outcomes for recipients;

(b) to promote a high quality of care and accommodation for the recipients of *aged care services that meets the needs of individuals;

(c) to protect the health and well-being of the recipients of aged care services;

(d) to ensure that aged care services are targeted towards the people with the greatest needs for those services;

(e) to facilitate access to aged care services by those who need them, regardless of race, culture, language, gender, economic circumstance or geographic location;

(f) to provide respite for families, and others, who care for older people;
(g) to encourage diverse, flexible and responsive aged care services that:

(i) are appropriate to meet the needs of the recipients of those services and the carers of those recipients; and

(ii) facilitate the independence of, and choice available to, those recipients and carers;

(h) to help those recipients to enjoy the same rights as all other people in Australia;

(i) to plan effectively for the delivery of aged care services that:

(i) promote the targeting of services to areas of the greatest need and people with the greatest need; and

(ii) avoid duplication of those services; and

(iii) improve the integration of the planning and delivery of aged care services with the planning and delivery of related health and community services;

(j) to promote ageing in place through the linking of care and support services to the places where older people prefer to live.

2...

SECT 8-1 Approval as a provider of aged care
(1) The Secretary must, in writing, approve a person as a provider of *aged care if:
(a) the person (the applicant) makes an application under section 8-2; and

(b) the Secretary is satisfied that the applicant is a *corporation; and

(c) the Secretary is satisfied that the applicant is suitable to provide aged care (see section 8-3); and

(d) the Secretary is satisfied that none of the applicant's *key personnel is a *disqualified individual.

Note 1: Under Part 4.4, the Secretary may restrict a person's approval as a provider of *aged care to certain *aged care services, or to certain care recipients.
Note 2: Rejections of applications are reviewable under Part 6.1.

(2) The approval is in respect of all types of *aged care, unless the Secretary specifies in the instrument of approval that the approval is limited to:

(a) one or more specified types of aged care; or
(b) one or more specified *aged care services; or

(c) one or more specified types of aged care and one or more specified aged care services.

A decision to limit the approval must comply with any requirements set out in the Approved Provider Principles relating to the grounds on which such a limitation may be imposed.

(3) The approval is not subject to any limitation relating to the period for which it is in force, unless the instrument of approval is limited to a specified period.

SECT 8-2 Applications for approval

(1) A person may apply in writing to the Secretary to be approved as a provider of *aged care.

(2 The application must be in a form approved by the Secretary, and must be accompanied by:

(a) any documents that are required by the Secretary to be provided; and

(b) the application fee (if any) specified in, or worked out in accordance with, the Approved Provider Principles.

(3) The amount of any application fee:

(a) must be reasonably related to the expenses incurred or to be incurred by the Commonwealth in relation to the application; and

(b) must not be such as to amount to taxation.

(4) An application that contains information that is, to the applicant's knowledge, false or misleading in a material particular is taken not to be an application under this section.

SECT 8-3 Suitability of people to provide aged care

(1) In deciding whether the applicant is suitable to provide *aged care, the Secretary must consider:

(a) the suitability and experience of the applicant's *key personnel; and

(b) the applicant's ability to provide, and its experience (if any) in providing, aged care; and

(c) the applicant's ability to meet (and, if the applicant has been a provider of aged care, its record of meeting) relevant standards for the provision of aged care (see Part 4.1); and

(d) the applicant's commitment to (and, if the applicant has been a provider of aged care, its record of commitment to) the rights of the recipients of aged care; and

(e) the applicant's record of financial management, and the methods that the applicant uses, or proposes to use, in order to ensure sound financial management; and

(f) if the applicant has been a provider of aged care--its record of financial management relating to the provision of that aged care; and

(g) if the applicant has been a provider of aged care--its conduct as a provider, and its compliance with its responsibilities as a provider and its obligations arising from the receipt of any payments from the Commonwealth for providing that aged care; and

(h) any other matters specified in the Approved Provider Principles.

(2) In considering a matter referred to in paragraphs (1)(b) to (h), the Secretary may also consider the matter in relation to any or all of the applicant's *key personnel.

(3) For the purposes of this Act, each of the following is one of the applicant's key personnel:

(a) a member of the group of people who are responsible for the executive decisions of the applicant;

(b) any other person who is concerned in, or takes part in, the management of the applicant;

(c) any person who is responsible for the nursing services provided, or to be provided, by the *aged care service conducted, or to be conducted, by the applicant;

(d) any person who is responsible for the day-to-day operations of an *aged care service conducted by the applicant, whether or not the person is employed by the applicant;

(e) any person who is likely to be responsible for the day-to-day operations of an *aged care service that the applicant proposes to conduct, whether or not the person is employed by the applicant.

...

(5) The Approved Provider Principles may specify the matters to which the Secretary must have regard in considering any of the matters set out in paragraphs (1)(a) to (h).

(6) The references in paragraphs (1)(b), (c), (d), (f) and (g) to aged care include references to any care for the aged, whether provided before or after the commencement of this section, in respect of which any payment was or is payable under a law of the Commonwealth.

(7) Paragraph 8-1(1) (d) and sections 10A-2, 10A-3 and 63-1A do not limit this section.

..."

9. The Approved Provider Principles further provide (Exhibit 1):

"Part 2 Suitability of people to provide aged care

Division 1 Other matter to be considered by Secretary

6.4 Purpose of Division (Act, s8-3)

This Division specifies another matter that the Secretary must consider in deciding whether an Applicant is suitable to provide aged care.
6.5 Other matter
The Secretary must consider the conduct and experience of the applicant other than as a provider of aged care.
Division 2 Matters to which Secretary must have regard
...

6.7 Suitability of key personnel

(1) In considering, under paragraph 8-3 (1) (a) of the Act, the suitability and experience of each of the applicant’s key personnel, the Secretary must have regard to the following matters:

(a) whether a person is at least 18 years;
(b) the honesty of the person, and, in particular:

(i) any claims by the person, or by a corporation with which the person has been associated, for benefits and subsidies from the Commonwealth or a State, Territory or local government authority; and
(ii) whether the person, or a corporation with which the person has been associated, has met its obligations to Commonwealth, State, Territory and local government authorities; and
(iii) whether the person, or a corporation with which the person has been associated, has been refused a licence or approval, or had a licence or approval revoked, under commonwealth, State, Territory or local government law for any reason that involved an act of dishonesty; and
(iv) whether the person, or a corporation with which the person has been associated, has levied, or attempted to levy any charge for services where there was no entitlement to do so;

(c) whether, because of serious misconduct involving the person, the person or someone else (including a corporation) with which the person was associated, has had:

(i) is or has been a bankrupt, has applied to take the benefit of a law for the relief of bankrupt or insolvent debtors, or has compounded with his or her creditors; or

(ii) has been associated in a management capacity with a corporation that is or has been under the control of a receiver.

(2) However, the Secretary may also have regard to any other relevant matter.

6.8 Applicant’s ability and experience

(1) The Secretary must have regard to the matters set out in subsection (2) in considering:

(a) under paragraph 8-3 (1) (b) of the Act, the applicant’s ability to provide, and its experience (if any) in providing, aged care; and

(b) under paragraph 8-3 (1) (c) of the Act, the applicant’s ability to meet (and, if the applicant has been a provider of aged care, its record of meeting) relevant standards for the provision of aged care; and

(c) under paragraph 8-3 (1) (d) of the Act, the applicant’s commitment to (and, if the Applicant has been a provider of aged care, its record of commitment to) the rights of the recipients of aged care.

(2) The matters are:

(a) the applicant’s demonstrated experience in the provision of care to aged or disabled persons, or care provided in other supported environments, or in any other relevant area that the Secretary considers appropriate; and

(b) the applicant’s record of paid or voluntary involvement in residential or community services for aged or disabled persons or persons in residential or community care environments; and

(c) the applicant’s experience and efficiency in personnel management, including:

(i) the applicant’s record of staff management; and

(ii) the staff management practices employed or proposed to be employed to manage the facility effectively and efficiently.
(3) However, the Secretary may also have regard to any other relevant matter.

6.9 Applicant’s record of financial management

(1) In considering, under paragraphs 8-3 (1) (3) and (f) of the Act, the applicant’s record of financial management, and the methods that the applicant uses, or proposes to use, in order to ensure sound financial management, the Secretary must have regard to the following matters:

(a) whether the applicant has kept appropriate books, documents and records;

(b) the applicant’s financial liabilities, including lease obligations;

(c) whether the applicant is or has been under the control of a receiver;

(d) whether the Applicant has followed recognised accounting standards.

(2) However, the Secretary may also have regard to any other relevant matter.

6.10 Applicant’s conduct as a provider

(1) In considering, under paragraph 8-3 (1) (g) of the Act, the applicant’s conduct as a provider of aged care, its compliance with its responsibilities as a provider and its obligations rising from the receipt of any payments from the Commonwealth for providing that aged care, the Secretary must have regard to the following matters:

(a) whether the applicant has assaulted or physically or mentally abused care recipients or staff, or assisted, condoned or failed to prevent such actions;
(b) whether the Applicant has treated care recipients and staff with courtesy and respect, with due regard to religious, cultural and social diversity;
(c) the management of care recipients’ finances, including management of accommodation bonds in accordance with Division 57 of the Act.

(2) However, the Secretary may also have regard to any other relevant matter.

6.11 Applicant’s conduct generally

(1) In considering, under paragraph 8-3 (1) (h) of the Act and section 6.5 of these Principles, the conduct and experience of the Applicant other than as a provider of aged care, the Secretary must have regard to the following matters:

(a) the information provided by the Applicant in support of an application for, or in the course of a review of, approved provider status;

(b) whether the Applicant has met its obligations to Commonwealth, State, Territory and local government authorities;

(c) whether the Applicant has been convicted of an indictable offence.

(2) However, the Secretary may also have regard to any other relevant matter."

THE FACTUAL SITUATION AND FINDINGS OF FACT

10. This application primarily relates to the suitability of Dr Thomas Wenkart, as the key personnel, to provide aged care to residents of an aged care facility. There were at the time the approval application was lodged with the Respondent on 23 August 2002 others identified as key personnel. This is no longer the case. One of such other persons was Mr Geoffrey Holden, accountant and a director, with Dr Wenkart of the Applicant, of no less then 70 other companies in what has been described as the Macquarie Group of Companies. Mr Holden, on account of ill health, has withdrawn from participation in the application and is to, or has, resigned from his directorial positions. The other person was Dr Wenkart’s son, Mr William Wenkart, an economics graduate and information technology specialist. He was an employee of the Applicant but has moved to a position with another employer.
11. The Tribunal’s interest is then focused on Dr Wenkart keeping in mind, if the application is granted, that he will inevitably be relying upon others to assist in managing and operating the facility. Whilst these latter people have not at this time been identified, the Tribunal will need to be satisfied that Dr Wenkart has the capacity and experience to select and appoint appropriate people to fill such positions. It is to his character, experience, and understanding of the needs of aged people in residential care and competence as an administrator that the Tribunal is required to primarily direct its attention.
12. Dr Wenkart was born on 7 February 1946, underwent secondary and tertiary education and having graduated in medicine from the University of Sydney first entered medical practice as a general practitioner in 1968. He has since obtained a masters degree in public health and is a Fellow of the Australian Institute of Management, a member of the AMA, presently or at one time a committee member of the Royal Australian College of General Practitioners, the New South Wales Private Hospital Association, the Nursing Homes Association and a member of the board of Knox Grammar School Foundation. He has involved himself in the activities of general medical bodies associated with veterans’ affairs and public health forums.
13. Dr Wenkart remained in general practice until 1982, returning in 1988 and remaining until 1992. He is not currently in practice, visiting or seeing patients but "keeps his finger on the pulse as to current developments": He has retained his VR status and registration in New South Wales and Queensland and believes that his "mature understanding of patient needs, clinical status and awareness of the plethora of support services" (Exhibit G) are such as to qualify him for a role as key personnel in the provision of aged care.
14. At an early stage of his career Dr Wenkart was in partnership building up an extensive general practice which entailed amongst other activities, attendance at nursing homes and the making of home visits. In 1976 he established the Wenkart Foundation and a welfare research institute devoted to the provision of health services and support of the arts.
15. After entering private practice Dr Wenkart became interested in the provision of health care through private hospitals. The Applicant was incorporated or acquired and over a period of time came to own and manage a number of such hospitals. Dr Wenkart also became involved in the provision of pathology services and the maintaining of medical clinics. At one time he estimates the health services the Applicant provided made contact with not less than one million patients a year in New South Wales, the Australian Capital Territory, Queensland and Victoria and employed upwards of 2000 staff with a turnover of 100 Million Dollars. Over time the operations of the Applicant and associated companies have been curtailed to an extent whereby the pathology services and medical clinics have been sold to a listed public company, the turnover and the number of employees reduced and the Applicant’s relevant operations restricted to the ownership and conduct of five private hospitals in the suburbs of Sydney, New South Wales being Delmar Private Hospital, Dee Why, Eastern Suburbs Private Hospital, Randwick, Manly Waters Private Hospital, Manly, Minchinbury Community Hospital, Rooty Hill and President Private Hospital at Kirrawee.
16. Dr Wenkart in his affidavit evidence described the infrastructure at the hospitals that are designed to meet the needs of aged patients as (Exhibit G):

"...

(a) At Delmar Private Hospital there is available a hydrotherapy pool, a well-equipped physiotherapy gymnasium, an occupational therapy assessment area and a therapy room;

(b) At Eastern Suburbs Private Hospital there is a unit purely focused on rehabilitation;

(c) At President Private Hospital there is a large and well-equipped physiotherapy gymnasium, an occupational therapy assessment area, therapy, psychology and speech therapy rooms and external mobility exercise areas;

(d) Minchinbury Community Hospital is increasingly being used for rehabilitation as well as for standard medical patients. In keeping with current demographic trends, many of these are elderly and are often referred by ATAC staff or by Community nurses from as far away as the Blue Mountains, due to a lack of suitable services in those areas;

(e) Manly Waters is unique in the case mix of persons it caters for. A large number of its patients at any given time emanate from nursing homes or would normally be classified as similar to members of that group of patients. They are regularly suffering from acute and/or chronic medical conditions. A number of the members of staff at Manly Waters’ have come to us with a background of extensive professional caring experience within nursing homes for the aged; and

(f) A special project has been the "Independent Living Program" which has been developed with the goal of physical reconditioning and giving assisted training to suitable patients. The program endeavours to afford aged persons the opportunity of continuing life in their own homes in preference to being resigned to the acceptance of a position in a nursing home.

8. All of Macquarie’s hospitals have a close affiliation wit various community services in their district such a Meals-on-Wheels, home nursing services and community aid. Many patients require assistance with arranging these and other support services. Hospital staff work with guidance from GP’s prior to discharge and aim to facilitate a stress free patient return to their private home or aged care facility as the case may be. Discharge Planners and, in some Macquarie facilities, social workers, are part of the permanent staff trained to aid in these activities.

Staffing Aspects

9. At Macquarie hospitals, staff are carefully chosen and are highly skilled and caring professionals, consciously working together to create an ambience of home away from home for patients. Our staff includes registered nurses, rehabilitation and geriatric specialists, physiotherapist, occupational therapists and dieticians..."

17. He maintains that the Applicant is "well placed to be able to provide quality aged care services", having operated hospitals in New South Wales for 26 years. He says that in all of the hospitals:

"...the delivery of quality care, including long term care to the frail aged, is implemented through a comprehensive quality management program. This highlights and measures professional clinical care, the achievement of best practice in wound, pain and behaviour management, mobility and rehabilitation, nourishment and hydration, pharmaceutical, medical and allied health requirements. Macquarie’s sophisticated quality management systems, manuals, policies and procedures can be easily modified to fully comply with the requirements of the Act to meet all the necessary aged care standards applicable to the development and management of residential care and accreditation standards. This can be achieved utilising my knowledge and that of senior staff already employed by Macquarie and possessing experience in the provision of aged care services.
15. I believe that Macquarie’s history of the delivery of care to a broad range of health care services reflects its ability to meet the relevant aged care standards under section 8.3(1)(c) of the Act. In its dealings with a substantial number of frail aged patients, Macquarie has acquired a significant expertise and understanding of the issues involved with the provision of care to the aged."

18. Manly Hospital he said in his oral evidence is renowned for its aged care and Delmar has hydrotherapy and aged care facilities. He expressed an awareness of the needs of the aged and the desirability of the ambience being "homelike". The application for approval he said focused on the strength of the Applicant in running hospital businesses, in its experience in the hospital setting with acute patient care and relating this to an aged care facility. The Applicant is well established as being the largest private hospital network outside the charitable hospitals in New South Wales and in its application relies heavily on experience obtained in hospital administration.
19. It was acknowledged by Dr Wenkart that in its original application the Applicant may not have drawn a distinction between residential and acute care. In light of the evidence given by him before the Tribunal we are satisfied that in fact he is well aware of the requirements of a low care aged facility, an essential ingredient being that it is a home to residents.
20. Ms Linda Huxley is the director of the Manly Waters Hospital where she has been employed for 24 years. She has known Dr Wenkart for 20 years. She gave evidence as to the facilities available to patients and laid emphasis upon the attention given to the provision of care to older people. It was stated that 88.5 per cent of all day beds at the hospital consist of medical rehabilitation care including that of aged patients. The hospital employs a diversional therapist, a position that may well be warranted with an aged care facility. She spoke of assessments being made and inspections conducted weekly by members of the Aged Care Assistance Team, a government authority, and of the internal systems put in place and utilised by the Applicant to effectively and properly record financial information and of the reporting and monitoring procedures that are utilised. As the result of an accreditation exercise conducted by the team in May 2004 the Applicant was "afforded a highly recommended" status.
21. The Tribunal had the benefit of having access to the Quality Management Manual, Quality Specification Report, Nursing Services Manual, Infection Control Manual, Pharmacy Manual, Catering Manual, Cleaning Services Manual and Patients’ and Visitors’ Information Directory and Patients’ Rights and Responsibilities all in use by the Applicant at Manly Waters Hospital.
22. Ms Huxley was asked questions in cross-examination as to the differences between hospitals and aged care residences. She displayed a realistic awareness of the roles of the two establishments when she instanced therapy being available for longer hours, the greater use of volunteers, the ratio of nursing staff being less, the need to make the environment more homely, extended visiting hours, provision of complaint procedures, the need to enable residents to feel that they are fulfilling their lives, a sense of security for residents in their rooms, provision of appropriate furniture, community services, transport and access to picnics and sport, a dispute resolution process being available and the need for some person to be in attendance in order to watch out for and be conscious of the physical and emotional condition of the aged person. She concluded her evidence by indicating that she had not been told that she would be personally involved but said that she did anticipate on an aged care facility being established that there would be regular meetings of hospital and facility staff each interacting with the other. Expertise and knowledge would be shared.
23. Ms Jane Bailey, Assistant Secretary Quality Outcomes Branch, Ageing and Care Division of the Respondent, the only witness called by the Respondent, and an officer who had not been involved in the subject refusal decision, gave evidence as to the differences as she saw them between a hospital and an aged care facility. She emphasised the changing address concept where life is to continue but at a different location with residents managing their own finances, having their views respected and with a holistic assessment made of their needs. It is necessary to ensure she said that residents are consenting parties to arrangements made for their accommodation. However, an aged care facility is not a retirement village.
24. Ms Bailey had not herself worked in a hospital or with aged care people but said that with approximately 3000 funded aged care facilities in Australia she had experience with the requirements of the homes and their residents. The occupant was generally over 70 years of age, experiencing some restriction on physical activities. But each individual needed to be separately assessed. She was taken through the Applicant’s Quality Management System Manual and the Manly Waters Hospital Mission Statement and recognised the similarities as well as the differences between a hospital and a residential aged care facility. The difference with residential care she emphasised is that it is the resident’s right to have quality management, attention and services more than encouraging the acceptance of the same. The choices and expectations in a hospital are episodic and not the issues of long term residence. The rights of residents of an aged care facility are stronger she said than those of a patient in a hospital and in making a decision one had to be mindful of the objects of the Act and the welfare of the person. She emphasised the responsibilities of providers in ensuring the quality of care, the preservation of user rights, the accountability for care and the need for there to be suitable key personnel. She identified the principles determined by the Minister as they relate to grant of accreditation, approval of care recipients, approved providers, quality of care, subsidy and user rights including the payment of a bond.

FINANCIAL MANAGEMENT SKILLS

25. It was emphasised by Ms Bailey and recognised by Dr Wenkart and Ms Huxley, there is a requirement for a provider, and the key personnel of a provider, to exhibit good financial management skills as well as being persons of integrity. Honesty and bankruptcy status are also relevant considerations. Ms Bailey was concerned about the potential for a provider seeking "to defraud the Commonwealth" by submitting appraisals of care recipients care needs that are inaccurate in order to attract a higher level of subsidy and of falsifying records to make detection more difficult. The system she said relies on providers being honest in making assessments and keeping records. She would be concerned if there happened to be doubt as to a key personnel’s honesty.
26. An allied concern relates to the provision of accommodation bonds and the monies being put to a use not related to aged care. There may be a failure to repay a bond. Poor financial skills of key personnel could lead to a provider being placed into liquidation with the resultant adverse impact on residents from their financial as well as residential point of view. There is the consequential need for a decision-maker, such as the Tribunal, to place measurable weight upon the requirement of probity and sound financial management skills on the part of a prospective provider such as the Applicant and its key personnel.
27. The Tribunal is satisfied on the basis of the evidence placed before it as to the financial standing of the Applicant and the profitability of its hospital activities coupled with the evidence as to the procedures put in place to record and monitor the transactions of the Applicant, that the Applicant and its key personnel are competent in financial management. Further, and subject to that which appears below as to the character of Dr Wenkart, there is not any evidence as to the Applicant or Dr Wenkart being involved in commercial dishonesty, fraud or the falsifying of records.
28. We are satisfied from the evidence of Ms Huxley and Dr Wenkart that they are each aware of the responsibility assumed by a provider on the receipt of bond monies. Dr Wenkart emphasised his recognition of the need for steps to be put in place to ensure protection of bond monies entailing disclosure, transparency and due diligence protocols.
29. The Tribunal is satisfied that the Applicant and Dr Wenkart have exhibited appropriate management skills and that there is no reasonable concern as to their financial competence.

DR WENKART AND HIS CHARACTER

30. It is maintained by the Respondent that Dr Wenkart and hence the Applicant is not an honest person and by reason of this defect in his character, is not a suitable key personnel to provide, or play a controlling role in the providing of, aged care. This assessment of his character is largely dependent on findings said to have been made adverse to him in litigation concerning his financial affairs and his consequent bankruptcy on 28 October 1999.
31. As has been earlier set forth in these reasons, paragraph 6.7 of the principles under the heading of "Suitability of Key Personnel", stipulates that in considering the suitability and experience of an applicant’s personnel, regard is to be had amongst other factors to the honesty of the person or persons citing instances where dishonesty is particularly important (paragraph 6.7(1)(b)), not one of which is relevant to Dr Wenkart. Nevertheless honesty in a general sense remains a relevant factor. The decision-maker is also required to have regard to a persons bankruptcy (paragraph 6.7(1) (d)) and "to any other relevant matter".
32. The Respondent maintains that the findings made against Dr Wenkart in the various proceedings referred to here under are relevant as to his honesty and to "any other relevant matter" as are the fact of his bankruptcy and the circumstances in which he became a bankrupt.

- THE LITIGATION AND ADVERSE FINDINGS

33. The Tribunal does not regard it as necessary for there to be a detailed analysis in these reasons of each of the proceedings or the deficiency or otherwise in the evidence which led to any adverse findings being made. It is however necessary for us to be cautious in visiting the opinions expressed by judicial officers of a litigant or witness, upon such a person generally, where such opinions were at first instance directly related to the facts and circumstances of the particular litigation. So also is it to be kept in mind that findings of fact including that as to a persons character are very dependent upon the view the judicial officer takes of the whole of the evidence, including the recollection, faulty or otherwise, of witnesses. A judicial officer can well prefer the evidence of one witness to that of another without the need to make a finding as to honesty. Faulty recollection may well explain a difference in evidence.
34. In the present matter as instanced in principle 6.7(1) (b) the honesty relates to dealings with departmental officers, with residents and in relation to claims and charges. The Tribunal is to ascertain whether there is a defect in Dr Wenkart’s character such as might put a governmental (local, state or federal) authority or a resident at risk of deceitful conduct or fraudulent behaviour.
35. As has been said the Respondent relies upon various Supreme Court and Federal Court decisions and opinions of judicial officers expressed in such decisions for its assessment of Dr Wenkart’s character.
36. Initially the Respondent cited 12 cases upon which it relied. In his closing submissions Mr Smark, appearing for the Respondent, indicated that it was the cases in Exhibit 2 TABS 1, 3 and 4 that where then relied upon. The cases in Exhibit 2, TABS 5, 7 and 8, whilst still to be considered, were said to be now of limited relevance. It is apparent that not anything said in the cases other than those in TABS 1, 3 and 4 adds to the strength of the Respondent’s contentions. The Tribunal considers it necessary, if the contention as to defect of character and of dishonesty is to be maintained, that such defects be seen in the reasons for decision in cases TABS 1, 3 and 4 or not at all.

- THE LITIGATION

SANDTARA PTY LTD V ABIGROUP LIMITED, SCNSW, 25 SEPTEMBER 1997, 500057/95 (EXHIBIT 2 TAB 1)

37. The reasons for decision in the above mentioned litigation detail the factual situation which is not relevant to this application. However, it is relevant to consider the findings and observations of the Trial Judge which bear upon Dr Wenkart’s honesty. He and a Mr Pitman were the principal participants. The reasons inter alia state:

"The approach I have adopted to the evidence of Pitman is to be cautious in accepting the accuracy of his evidence...Pitman had shown a willingness in Family Court proceedings to which he was a party to distort the truth of his financial affairs in order to safeguard his financial interests against claims made by his former wife...Notwithstanding that need for caution in considering the accuracy of Pitman’s evidence I was satisfied as to the truth of a number of matters which I think were central to his case against Wenkart having regard to the circumstances which I think the evidence clearly disclosed governed the commercial relationship between Wenkart and Pitman.
In the case of Wenkart I regarded him as a witness who was less than frank in ways that are particularised later in these reasons... (page 45)
...there is not the slightest doubt that Wenkart’s conduct was malicious [i.e. damage to property] and intended to reduce the benefit of the Mosman premises for use as a medical centre (page 46) ...
...he [Dr Wenkart] was at pains to conceal that involvement from third parties [page 47}
...I think that evidence [of Dr Wenkart] is quite incredible. Indeed Pitman was closely cross-examined on the basis that his copying of those documents concerning Altonmere was an act of dishonesty on his part as he had no legitimate interest in those records [page 52].
... I think it is quite incredible that Wenkart’s role was that of one "assisting" Pitman "as a friend to get started in the medical business" and I find it incredible that the question of Pitman’s exposure under the Pitman indemnity and for that matter other guarantees was not the subject of discussion between them.
Generally speaking I did not regard the evidence of Wenkart in cross-examination as forthcoming (page 62)."

38. In his evidence before us Dr Wenkart stated that he did not "accept the judges findings" and "the judgement sticks in my throat". He says that he "was caught in a verbal. I still to this day deny I lied. I have lived the decision. I told the truth and the judge interpreted it as he did. He selected Pitman’s evidence over mine."
39. Although the findings are not favourable to him or his evidence, it is clear that in a conflict of testimony the judge, with hesitation, preferred that of Mr Pitman. Legal issues went on appeal. The decision was instrumental in Dr Wenkart’s subsequent bankruptcy.
40. The Respondent contends that the adverse findings and expressions of opinion by the trial judge indicate characteristics of being "less than frank" and being prepared to engage in malicious conduct this not the indicia of a person who is suitable "to manage an aged care facility". It is said that Dr Wenkart did not in his evidence before the Tribunal "grapple with the significance of the events that had entrapped him".
41. The Tribunal is not aware of what else Dr Wenkart could say or do. He has denied that he lied. There was clearly a conflict of evidence and the Judge was required to make a decision as to who he accepted as narrating the situation as close as possible to what he believed occurred. The "malicious damage" reference was no doubt a description of what was found to have occurred at the time and in the context of the then dispute.

ABIGNANO AND ANOR V WENKART AND ANOR, SCNSW, 27NOVEMBER 1998, 2522/1999 (EXHIBIT 2 TAB 3)

42. The issue raised in these proceedings was whether a mortgage of land executed by Dr Wenkart was voidable as being an alienation of property with intent to defraud creditors. The proceedings were in due course dismissed with costs. There was again a conflict of evidence and factual issues had to be determined, the Judge balancing the evidence of one witness against that of another.
43. In the course of the reasons for decision the Judge observed:

"...In my opinion the facts of the case are sufficient for me to draw an inference that Dr Wenkart intended to thwart the prospects of the plaintiffs in recovering the amount of their judgement, and that in giving the mortgage to Hapday he intended to deprive the plaintiffs of an opportunity to enforce their claim...I am not satisfied that his explanations for the giving of the mortgage displace the strong inference. The conversation with the bank officer was somewhat equivocal in its description and it indicated as much a suggestion for the protection of Dr Wenkart as that of his company...
...In my opinion therefore he had the intent he [Dr Wenkart] had the intention of disposing of all of his assets in order to avoid making payments to the plaintiffs. He claimed that he had been advised that he would be successful in the appeal but he acknowledge that he did not accept this as being a certainty...Notwithstanding my views as to the intentions of Dr Wenkart I have to consider whether Hapday was a creditor at the time and whether the effect of the mortgage was to give that company preferential treatment which would prevent the operation of section 37A.
...There was no acceptance by Dr Wenkart that the payments made by Hapday were in fact gifts or a form of income and there was no other evidence to cast doubt on the fact that these were loan moneys. There is no evidence which would enable me to make a finding that the amounts claimed to be due by Hapday were in fact not loans to Dr Wenkart...Although I am satisfied that the first defendant [Dr Wenkart] has taken these steps to avoid paying the plaintiffs as his creditors, I am bound by the authorities to which I have referred to find that the transaction cannot be avoided."

44. It is said on behalf of the Respondent that the findings in this case against Dr Wenkart were findings "substantially tending against" his honesty. However, there was not a finding of illegality, or that a transaction was unlawful, this even though Dr Wenkart was found to have taken a course of action, which he says was on legal advice, to avoid making payment to his creditors and to maintain legal obligations to protect company assets.

ABIGNANO; IN THE MATTER OF ABIGNANO V WENKART [1999] FCA 1695 (29 OCTOBER 1999) (EXHIBIT 2 TAB 4)

45. Dr Wenkart did not give evidence in these proceedings and any findings against him were made solely on the basis of written material placed before the court. The application here made was for an adjournment of the hearing of a creditor’s petition seeking his bankruptcy. The trial judge made the following observations in the course of his reasons for refusing such adjournment:

• He referred to the reason for decision in Sandtara Pty Ltd v Abigroup (supra) saying:

"13. More fundamentally, the creditors, challenged the bone fides of the initiation of the processes of Part X of the Act. They point to firstly, the unexplained delays and the other factors to which I have referred and the unexplained absence of the debtor from the witness box; secondly, serious findings were made by Hunter J that on their face show that the debtor has been prepared to go to extreme lengths to thwart the exercise by others, of their legal rights, and has concealed his involvement in commercial transactions in which he was vitally interested, by the use of other persons and/or corporations as "fronts" and; thirdly, the judgement indicates that the debtor has been guilty of dishonesty."

We are not satisfied that the trial judge accurately set forth the findings made by Hunter J, nor are we satisfied that his conclusions are in accord with the decision to which he referred.

• He referred to the reasons for decision in Abignano and ANOR v Wenkart ANOR (supra) saying:

"14. The next matter pointed to was raised in the course of proceedings in an action between the petitioning creditors (and/or persons in the same interest as they are) and the debtor, heard in the Supreme Court by Cohen J, in respect of which he gave judgment on 27 November 1998. The petitioning creditor’s interests, as I shall call them, were seeking orders that a mortgage of certain land executed by the debtor, was voidable under s 37A of the Conveyancing Act 1919 (NSW) as an alienation of property with intent to defraud creditors. The plaintiffs failed, but they failed for technical reasons. The plaintiffs failed, but they failed for technical legal reasons. His Honour found in substance, that the debtor had a dishonest intent to defeat the petitioning creditor’s interest in what he had done."

Again the Tribunal is of the view that the conclusions reached by the judge, with reference to the Abignano case, cannot be easily drawn from the decision to which he referred. The relevant observations made by Cohen J in the Abignano case are as set forth above.

• He finally stated:

"16. Next, the petitioning creditors showed that there was an artificial and prima facie dishonest attempt by the debtor to frustrate the anticipated issuing he might have of a bankruptcy notice against him after Hunter J had delivered his reasons on 25 September 1997. The matters before his Honour were extremely complex and, his Honour having delivered lengthy reasons on that date, it was left for the parties to bring in minutes of appropriate orders. On the day of delivery of his Honour’s reasons the debtor executed a deed whereby certain debts of the petitioning creditors were purportedly assigned by another entity to the debtor. The deed was drafted so that that assignment would take effect immediately prior to the making of formal orders by his Honour. The material before me shows that this was, as I have said, an artificial and prima facie dishonest method of defeating a likely bankruptcy notice and there was no evidentiary or other effort by the debtor to cast a different light on the matter. I draw that inference against him."

46. The finding of "prima facie dishonest" was made without hearing any oral evidence. It was based on the judges’ reading of the earlier decisions and submissions of Counsel.
47. It is maintained on behalf of Dr Wenkart that the judge in the bankruptcy proceedings overstated or was not correct in his opinion as to the adverse effect of the findings in the earlier decision. There is merit, with respect to the learned judge, in this submission. There was not in the Abignano (TAB 3) decision a finding of "dishonest intent" or in the Sandtara (TAB 1) decision a finding that "the debtor has been guilty of dishonesty".
48. Nevertheless the reasons in the bankruptcy (TAB 4) case, based as they were on the earlier reasons for decision and submissions do not take the issue of Dr Wenkart’s honesty or otherwise any further.

OTHER LITIGATION

49. Other litigation involving the financial interests of Dr Wenkart, and companies of which he was a director, was referred to on behalf of the Respondent particularly as they appear in Exhibit 2 TABS 5, 7 and 8. Dr Wenkart did not give evidence in anyone of these proceedings and whilst findings were made adverse to Mr Holden, he is, as we have earlier mentioned, now no longer a prospective key personnel of the Applicant. No adverse inference other than by association should be drawn against Dr Wenkart who was at all times acting on legal and accounting advice. There is not a finding of dishonesty against Dr Wenkart, nor could there be, in any one of these cases.
50. The litigation does reveal a series of commercial disputes being dealt with by the legal process. The findings in each reflected the application of legal principals to the facts as they were determined to be by the particular courts. It may be as it was in the Exhibit 2 TAB 5 case, that there was a finding as to a "sham transaction". But as Mr Smark of Counsel conceded on behalf of the Respondent the transactions were entered into on legal/accounting advice and cannot be said thereby to reflect on the honesty of Dr Wenkart. The cases in Exhibit 2 TABS 7 and 8 did contain findings against Mr Holden but not Dr Wenkart.

THE BANKRUPTCY

51. Dr Wenkart became bankrupt upon the making of a sequestration order on 28 October 1999. He had objected to the order being made and had been unsuccessful in obtaining an adjournment of the proceedings. The bankruptcy arose out of a dispute he had with a Mr Abignano as evidenced in the litigation in Exhibit 2 TAB 1. In due course the bankruptcy was annulled and no person or company other than those associated with Dr Wenkart lost any money. The proposal to his creditors and the payments to the creditors were arranged at the instigation of Dr Wenkart and not his trustee. The delay in implementing the scheme being put to the creditors and in obtaining the annulment was attributable to litigation initiated by another and outside of his control.
52. According to Dr Wenkart his bankruptcy resulted from his not accepting earlier offers to settle the dispute. He took a position "on principle", he said, which he subsequently regretted.
53. The Respondent does not now place great reliance on the fact of the bankruptcy having occurred. It does raise the question as to why Dr Wenkart allowed a sequestration order to be made at all when it could have been avoided by he using company funds that seemingly were available to satisfy his debts. It was at one time submitted on behalf of the Respondent that Dr Wenkart went bankrupt because "he did not want to pay" even though this suggestion was not put to Dr Wenkart during the course of his cross examination. We do not place any weight on this submission. Dr Wenkart says his refusal to initially satisfy his primary creditor was a matter of principle.
54. On the basis of the evidence before the Tribunal we do not draw any inference adverse to the character of Dr Wenkart resulting from his bankruptcy.

OTHER EVIDENCE AS TO CHARACTER

55. Mr Robert Gorczyca, a solicitor of the Supreme Court of New South Wales had acted for the protagonists of Dr Wenkart in the Sandtara v Abignano litigation relating to the original debt and bankruptcy proceedings that ensued. In his affidavit and oral evidence before the Tribunal Mr Gorczyca demonstrated an intimate knowledge of the financial affairs of Dr Wenkart and of the litigation in which he and/or companies under his control had been involved. He is aware of the various observations made by judges in the reasons for decision in the cases: Exhibit 2 TABS 1, 3 and 4. He is now acting for Dr Wenkart in current litigation relating to payment of fees etc to the ex trustee in his bankruptcy.
56. Mr Gorczyca says in his experience of dealing with Dr Wenkart that there is nothing in his character that has demonstrated to him a lack of probity or fairness that would in any way adversely impact on his ability to be a key personnel of an aged care facility within his understanding of the Act. He is not aware from his personal dealings acting for and against Dr Wenkart of any reason to doubt his honesty.

DR WENKART – AWARENESS OF NEEDS OF AGED CARE FACILITY AND RESIDENTS AND ABILITY TO PROVIDE SUCH NEEDS

57. Dr Wenkart has had the experience earlier discussed in these reasons as it relates to the practice of a general practitioner as well as that associated with his management and control of the private hospitals owned by the Applicant. There is no question arising as to his financial competence.
58. Dr Martyn Baker commenced practice as a general practitioner with Dr Wenkart in 1976. In due course he acquired the interest of Dr Wenkart in the practice. In his affidavit evidence he said:

"4. Dr Wenkart has never lost his sentimental attachment to his origins in general practice and he has always played a supportive and encouraging role in the ongoing success of my practice.

5. When I joined Dr Wenkart in practice, I was impressed with his skills as a general practitioner and his holistic approach to patients. Dr Wenkart is always interest in the whole person and not only in the presenting problem. The practice has a large geriatric population and many patients in nursing homes in the area. The practice also has a strong tradition of visiting the sick and aged in their homes and in nursing homes and hostels. That tradition has been maintained and nursing home residents are still regularly visited.

6. In my opinion, Dr Wenkart is still a very good general practitioner when he gets the opportunity. His entrepreneurial inclination has drawn him away from his general practice origins, but his real vocation to benefit the sick and promote health has never changed. Dr Wenkart has never lost sight of the rights of the individual in sickness and in health.

...

8. My personal judgment is that it is in Dr Wenkart’s nature to care for the individual and, in that sense, I can see no reason not to support his ability to become an approved provider of aged care under the terms of the Aged Care Act 1997."

Dr Baker was not required to attend for cross-examination.

59. Dr Milana Votrubec is a pain consultant and has known Dr Wenkart personally and professionally for over 25 years. She is currently clinical director of the Wellness Centre at Delmar Private Hospital. She has been a committee member with Dr Wenkart of the Medical Graduates Association of the University of Sydney. She says:

"From this longstanding clinical and personal association, I would have no reservation in recommending Dr Wenkart for the role of an approved provider for aged care. Especially in view of my personal understanding of the running of nursing homes (my father owned and operated the 60-bed Parkview Nursing Home in Five Dock for 40 years), I believe that Dr Wenkart has both the skills and competence to be an approved provider of residential aged care."

Dr Votrubec was not required to attend for cross-examination.

60. Ms Kerry Jones one time chief executive officer of the National Association of Nursing Homes and Private Hospitals gave evidence as to the role of the association and of Dr Wenkart, he having been one of its directors from 1989 to 1993. In that time she:

"formed the view that he [Dr Wenkart} was familiar with a very wide variety of issues affecting the overall running and management of residential aged care facilities. I found his knowledge in this area to be a valuable contribution to NANHPH and to its members.
...
Based on my previous relationship with Dr Wenkart, I have no hesitation in supporting his application to become an approved provider under the terms of the Aged Care Act 1997."

Ms Jones was not required to be present for cross-examination.

61. Mr Peter Bowman, general manager, corporate services with the Australian Nursing Homes & Extended Care Association believes that there is a:

"...correlation between a number of the management principles applied to the competent administration and provision of aged care services and the competent administration and provision of private hospital, general medical and rehabilitation services to aged patients."

Mr Bowman sighted the affidavit of Ms Linda Huxley, the hospital director of Manly Waters Hospital and the annexure to it. He says that:

"Being familiar with the aged care accreditation requirements, (as outlined by the Aged Care Standards and Accreditation Agency and being applicable to residential aged care facilities in Australia), I believe that modified versions of these existing management competencies can be applied to the competent provision of aged care services."

Mr Bowman was also not required to attend for cross-examination.

62. It was submitted on behalf of the Respondent that the evidence of Drs Baker and Votrubec and Ms Jones might fairly be regarded as an endorsement, as well as evidencing an appreciation, of Dr Wenkart’s honesty but for the fact not one of them said that they were aware of the findings "as to dishonesty" and with that awareness then proceeded to make an assessment of his character. This is true. However, a problem with this submission arises from the fact that the observations made by the various judicial officers as to Dr Wenkart were so made in the context of the then proceedings. The findings, if they may be so described, as to character were dependent upon the assessment made by the judge of competing evidence. The findings were not absolute in the sense of being reflections on the character of Dr Wenkart in all situations or indeed in any other situation. It was not as if he had been found guilty of a criminal offence and had a sanction imposed upon him. The findings in the litigation earlier discussed bore no resemblance to guilt in a criminal sense. If the latter had been the case then the expression of opinion may well have reflected upon subjective assessments of his character. But this was not the case. Accordingly we do not accept this submission. The absence of awareness of the opinions expressed in the litigation does not diminish the assistance afforded by the evidence of Drs Baker and Vortrubec, Ms Jones and Mr Bowman. These observations do not bear upon the evidence of Mr Gorzcyca who was and is well aware of the nature of the findings.

FINDINGS IN RELATION TO LEGISLATIVE REQUIREMENTS AND PRINCIPLES

63. We are satisfied on the basis of the material tendered before the Tribunal that the Applicant satisfies the pre-requisites contained in the Act and the Approved Provider Principles in that the Applicant and Dr Wenkart do have a wealth of experience dealing with the needs of elderly people. We accept that Dr Wenkart "is passionate about medicine and care for the aged". We accept that he believes in the rights and dignity of aged people and that as Dr Baker evidenced he has a holistic approach to health. There is no issue as to Dr Wenkart being competent in financial management as demonstrated by the Applicant’s financial success in controlling the activities of private hospitals. The Applicant by its key personnel are further competent to maintain records appropriate to the facility and such as to ensure transparency and appropriate accounting of monies received and spent.
64. Whilst it was initially contended that there was a lack of appreciation on the part of the Applicant as to the differences between an aged care facility and hospitals, the evidence given by Ms Huxley and Dr Wenkart clearly shows an appreciation by them of such differences. The presence in the hospital structure of people such as diversional therapists and others caring for the needs of patients indicates an understanding of aged care and the responsibilities involved. The Applicant conducts its affairs in an environment where aged care awareness is apparent. Further, the Applicant has demonstrated an understanding of what would be the rights of residents and of the responsibilities that would be assumed by a provider.
65. The concerns primarily expressed on behalf of the Respondent in the course of Counsel’s final submissions related primarily to the reputation for honesty of Dr Wenkart and the ability of the Applicant to provide aged care services. We do not consider that the findings and expressions of opinion seen in the litigation earlier discussed in these reasons are negative factors such as to disqualify Dr Wenkart from being a key personnel. As earlier mentioned the observations are contained in decisions which concerned disputes between the parties to the litigation. Assessments were made as to the evidence and the persons giving the evidence in the context of the facts of the particular cases. We do not see such observations as reflecting generally upon the character of Dr Wenkart. We are mindful of the evidence of Mr Gorzcyca and the statements made by Drs Baker and Vortrubec, Ms Jones and Mr Bowman as to their assessments of Dr Wenkart. He has been a registered medical practitioner since 1968 as well as being a successful businessman having the overall management of private hospitals and medical centres. He has been responsible for the employment of up to 2000 persons at any one time, caring for the needs of up to one million patients in a year and attracting a very substantial turnover. He has never been prosecuted for any offence and there has never been any allegation of dishonesty on his part with the money of others. There is no suggestion of any impropriety on his part. Whilst the Respondent does not now overly rely upon his bankruptcy, the circumstances in which he became bankrupt and the fact of the annulment, are not such as to reflect adversely upon him.
66. The Respondent expresses concern at the fact of the Applicant and the key personnel not previously having been involved in aged care. The Applicant is aware of this and has indicated its preparedness to ensure that it is fully qualified and equipped to attend to the needs of aged people. The Tribunal is satisfied that the Applicant has the ability to cater for these needs.
67. On behalf of the Respondent it was submitted that the fact of Dr Wenkart "failing to grapple with the reality of the findings [in the discussed litigation] and its enormity" and "his lack of appreciations of the seriousness of the findings is what is lacking". We are satisfied that Dr Wenkart is fully aware of the seriousness of the findings made against him. He expressed the anguish he has experienced as a consequence of such findings which admittedly he does not accept. He has had to bear the consequence of the findings and it has caused him distress. We do not see this submission as weighing against the character of Dr Wenkart.
68. On the basis of the evidence before the Tribunal we do not consider Dr Wenkart as being a person not suitable as key personnel of the Applicant in the event of the application being granted.
69. We are satisfied further that the Applicant has displayed an ability to provide aged care, services and that its competence in this regard is as shown by the evidence of Mr Bowman as well as in the rehabilitation and other services provided by Manly Waters Hospital. The evidence of Dr Wenkart and Ms Huxley in this regard is persuasive. If granted approval the Applicant will be building upon a well established and respected system, in other words a wealth of experience in dealing with members of the public. There is no reason why the Applicant should not properly and efficiently manage an aged care facility, successfully negotiate and satisfy regularity and compliance issues and ensure that the rights of residence in such a facility are respected. We are satisfied that the Applicant has indicated its sufficient appreciation of the needs of a provider of aged care.
70. We are satisfied that the Applicant has satisfied the statutory requirements and the approved provider principles. We are satisfied that the Applicant and the key personnel are people suitable to provide aged care. The Applicant has the ability and experience to provide aged care and that its record of financial management and conduct is such as to satisfy the statutory prerequisites.

DECISION

71. For the reasons set forth above the decision under review is set aside. The application of the Applicant to become an approved provider of residential aged care under the Act should be and is granted.

I certify that the 71 preceding paragraphs are a true copy of the reasons for the decision herein of The Hon R N J Purvis Q.C., Deputy President, Dr Ion Alexander, Member

Signed: N Glaser
.....................................................................................
Associate

Date/s of Hearing 27, 28 and 29 September 2004
Date of Decision 4 November 2004
Counsel for the Applicant Mr D Studdy
Solicitor for the Applicant Dr S Moran
Counsel for the Respondent Mr K Smark, Ms S T Chrysantou
Solicitor for the Respondent Ms J Gleeson

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5.	At the hearing of the application before the Tribunal the Applicant was represented by Mr D P Studdy of Counsel and the Respondent by Mr K P Smark and Ms S T Chrysantou of Counsel.
6.	There was introduced into evidence the documents lodged by the Respondent with the Tribunal pursuant to section 37 of the Administrative Appeals Tribunal Act 1975 marked T1 to T24. Written material tendered by the parties was admitted as exhibits and marked accordingly:

10.	This application primarily relates to the suitability of Dr Thomas Wenkart, as the key personnel, to provide aged care to residents of an aged care facility. There were at the time the approval application was lodged with the Respondent on 23 August 2002 others identified as key personnel. This is no longer the case. One of such other persons was Mr Geoffrey Holden, accountant and a director, with Dr Wenkart of the Applicant, of no less then 70 other companies in what has been described as the Macquarie Group of Companies. Mr Holden, on account of ill health, has withdrawn from participation in the application and is to, or has, resigned from his directorial positions. The other person was Dr Wenkart’s son, Mr William Wenkart, an economics graduate and information technology specialist. He was an employee of the Applicant but has moved to a position with another employer.
11.	The Tribunal’s interest is then focused on Dr Wenkart keeping in mind, if the application is granted, that he will inevitably be relying upon others to assist in managing and operating the facility. Whilst these latter people have not at this time been identified, the Tribunal will need to be satisfied that Dr Wenkart has the capacity and experience to select and appoint appropriate people to fill such positions. It is to his character, experience, and understanding of the needs of aged people in residential care and competence as an administrator that the Tribunal is required to primarily direct its attention.
12.	Dr Wenkart was born on 7 February 1946, underwent secondary and tertiary education and having graduated in medicine from the University of Sydney first entered medical practice as a general practitioner in 1968. He has since obtained a masters degree in public health and is a Fellow of the Australian Institute of Management, a member of the AMA, presently or at one time a committee member of the Royal Australian College of General Practitioners, the New South Wales Private Hospital Association, the Nursing Homes Association and a member of the board of Knox Grammar School Foundation. He has involved himself in the activities of general medical bodies associated with veterans’ affairs and public health forums.
13.	Dr Wenkart remained in general practice until 1982, returning in 1988 and remaining until 1992. He is not currently in practice, visiting or seeing patients but "keeps his finger on the pulse as to current developments": He has retained his VR status and registration in New South Wales and Queensland and believes that his "mature understanding of patient needs, clinical status and awareness of the plethora of support services" (Exhibit G) are such as to qualify him for a role as key personnel in the provision of aged care.
14.	At an early stage of his career Dr Wenkart was in partnership building up an extensive general practice which entailed amongst other activities, attendance at nursing homes and the making of home visits. In 1976 he established the Wenkart Foundation and a welfare research institute devoted to the provision of health services and support of the arts.
15.	After entering private practice Dr Wenkart became interested in the provision of health care through private hospitals. The Applicant was incorporated or acquired and over a period of time came to own and manage a number of such hospitals. Dr Wenkart also became involved in the provision of pathology services and the maintaining of medical clinics. At one time he estimates the health services the Applicant provided made contact with not less than one million patients a year in New South Wales, the Australian Capital Territory, Queensland and Victoria and employed upwards of 2000 staff with a turnover of 100 Million Dollars. Over time the operations of the Applicant and associated companies have been curtailed to an extent whereby the pathology services and medical clinics have been sold to a listed public company, the turnover and the number of employees reduced and the Applicant’s relevant operations restricted to the ownership and conduct of five private hospitals in the suburbs of Sydney, New South Wales being Delmar Private Hospital, Dee Why, Eastern Suburbs Private Hospital, Randwick, Manly Waters Private Hospital, Manly, Minchinbury Community Hospital, Rooty Hill and President Private Hospital at Kirrawee.
16.	Dr Wenkart in his affidavit evidence described the infrastructure at the hospitals that are designed to meet the needs of aged patients as (Exhibit G):

18.	Manly Hospital he said in his oral evidence is renowned for its aged care and Delmar has hydrotherapy and aged care facilities. He expressed an awareness of the needs of the aged and the desirability of the ambience being "homelike". The application for approval he said focused on the strength of the Applicant in running hospital businesses, in its experience in the hospital setting with acute patient care and relating this to an aged care facility. The Applicant is well established as being the largest private hospital network outside the charitable hospitals in New South Wales and in its application relies heavily on experience obtained in hospital administration.
19.	It was acknowledged by Dr Wenkart that in its original application the Applicant may not have drawn a distinction between residential and acute care. In light of the evidence given by him before the Tribunal we are satisfied that in fact he is well aware of the requirements of a low care aged facility, an essential ingredient being that it is a home to residents.
20.	Ms Linda Huxley is the director of the Manly Waters Hospital where she has been employed for 24 years. She has known Dr Wenkart for 20 years. She gave evidence as to the facilities available to patients and laid emphasis upon the attention given to the provision of care to older people. It was stated that 88.5 per cent of all day beds at the hospital consist of medical rehabilitation care including that of aged patients. The hospital employs a diversional therapist, a position that may well be warranted with an aged care facility. She spoke of assessments being made and inspections conducted weekly by members of the Aged Care Assistance Team, a government authority, and of the internal systems put in place and utilised by the Applicant to effectively and properly record financial information and of the reporting and monitoring procedures that are utilised. As the result of an accreditation exercise conducted by the team in May 2004 the Applicant was "afforded a highly recommended" status.
21.	The Tribunal had the benefit of having access to the Quality Management Manual, Quality Specification Report, Nursing Services Manual, Infection Control Manual, Pharmacy Manual, Catering Manual, Cleaning Services Manual and Patients’ and Visitors’ Information Directory and Patients’ Rights and Responsibilities all in use by the Applicant at Manly Waters Hospital.
22.	Ms Huxley was asked questions in cross-examination as to the differences between hospitals and aged care residences. She displayed a realistic awareness of the roles of the two establishments when she instanced therapy being available for longer hours, the greater use of volunteers, the ratio of nursing staff being less, the need to make the environment more homely, extended visiting hours, provision of complaint procedures, the need to enable residents to feel that they are fulfilling their lives, a sense of security for residents in their rooms, provision of appropriate furniture, community services, transport and access to picnics and sport, a dispute resolution process being available and the need for some person to be in attendance in order to watch out for and be conscious of the physical and emotional condition of the aged person. She concluded her evidence by indicating that she had not been told that she would be personally involved but said that she did anticipate on an aged care facility being established that there would be regular meetings of hospital and facility staff each interacting with the other. Expertise and knowledge would be shared.
23.	Ms Jane Bailey, Assistant Secretary Quality Outcomes Branch, Ageing and Care Division of the Respondent, the only witness called by the Respondent, and an officer who had not been involved in the subject refusal decision, gave evidence as to the differences as she saw them between a hospital and an aged care facility. She emphasised the changing address concept where life is to continue but at a different location with residents managing their own finances, having their views respected and with a holistic assessment made of their needs. It is necessary to ensure she said that residents are consenting parties to arrangements made for their accommodation. However, an aged care facility is not a retirement village.
24.	Ms Bailey had not herself worked in a hospital or with aged care people but said that with approximately 3000 funded aged care facilities in Australia she had experience with the requirements of the homes and their residents. The occupant was generally over 70 years of age, experiencing some restriction on physical activities. But each individual needed to be separately assessed. She was taken through the Applicant’s Quality Management System Manual and the Manly Waters Hospital Mission Statement and recognised the similarities as well as the differences between a hospital and a residential aged care facility. The difference with residential care she emphasised is that it is the resident’s right to have quality management, attention and services more than encouraging the acceptance of the same. The choices and expectations in a hospital are episodic and not the issues of long term residence. The rights of residents of an aged care facility are stronger she said than those of a patient in a hospital and in making a decision one had to be mindful of the objects of the Act and the welfare of the person. She emphasised the responsibilities of providers in ensuring the quality of care, the preservation of user rights, the accountability for care and the need for there to be suitable key personnel. She identified the principles determined by the Minister as they relate to grant of accreditation, approval of care recipients, approved providers, quality of care, subsidy and user rights including the payment of a bond.

25.	It was emphasised by Ms Bailey and recognised by Dr Wenkart and Ms Huxley, there is a requirement for a provider, and the key personnel of a provider, to exhibit good financial management skills as well as being persons of integrity. Honesty and bankruptcy status are also relevant considerations. Ms Bailey was concerned about the potential for a provider seeking "to defraud the Commonwealth" by submitting appraisals of care recipients care needs that are inaccurate in order to attract a higher level of subsidy and of falsifying records to make detection more difficult. The system she said relies on providers being honest in making assessments and keeping records. She would be concerned if there happened to be doubt as to a key personnel’s honesty.
26.	An allied concern relates to the provision of accommodation bonds and the monies being put to a use not related to aged care. There may be a failure to repay a bond. Poor financial skills of key personnel could lead to a provider being placed into liquidation with the resultant adverse impact on residents from their financial as well as residential point of view. There is the consequential need for a decision-maker, such as the Tribunal, to place measurable weight upon the requirement of probity and sound financial management skills on the part of a prospective provider such as the Applicant and its key personnel.
27.	The Tribunal is satisfied on the basis of the evidence placed before it as to the financial standing of the Applicant and the profitability of its hospital activities coupled with the evidence as to the procedures put in place to record and monitor the transactions of the Applicant, that the Applicant and its key personnel are competent in financial management. Further, and subject to that which appears below as to the character of Dr Wenkart, there is not any evidence as to the Applicant or Dr Wenkart being involved in commercial dishonesty, fraud or the falsifying of records.
28.	We are satisfied from the evidence of Ms Huxley and Dr Wenkart that they are each aware of the responsibility assumed by a provider on the receipt of bond monies. Dr Wenkart emphasised his recognition of the need for steps to be put in place to ensure protection of bond monies entailing disclosure, transparency and due diligence protocols.
29.	The Tribunal is satisfied that the Applicant and Dr Wenkart have exhibited appropriate management skills and that there is no reasonable concern as to their financial competence.

30.	It is maintained by the Respondent that Dr Wenkart and hence the Applicant is not an honest person and by reason of this defect in his character, is not a suitable key personnel to provide, or play a controlling role in the providing of, aged care. This assessment of his character is largely dependent on findings said to have been made adverse to him in litigation concerning his financial affairs and his consequent bankruptcy on 28 October 1999.
31.	As has been earlier set forth in these reasons, paragraph 6.7 of the principles under the heading of "Suitability of Key Personnel", stipulates that in considering the suitability and experience of an applicant’s personnel, regard is to be had amongst other factors to the honesty of the person or persons citing instances where dishonesty is particularly important (paragraph 6.7(1)(b)), not one of which is relevant to Dr Wenkart. Nevertheless honesty in a general sense remains a relevant factor. The decision-maker is also required to have regard to a persons bankruptcy (paragraph 6.7(1) (d)) and "to any other relevant matter".
32.	The Respondent maintains that the findings made against Dr Wenkart in the various proceedings referred to here under are relevant as to his honesty and to "any other relevant matter" as are the fact of his bankruptcy and the circumstances in which he became a bankrupt.

33.	The Tribunal does not regard it as necessary for there to be a detailed analysis in these reasons of each of the proceedings or the deficiency or otherwise in the evidence which led to any adverse findings being made. It is however necessary for us to be cautious in visiting the opinions expressed by judicial officers of a litigant or witness, upon such a person generally, where such opinions were at first instance directly related to the facts and circumstances of the particular litigation. So also is it to be kept in mind that findings of fact including that as to a persons character are very dependent upon the view the judicial officer takes of the whole of the evidence, including the recollection, faulty or otherwise, of witnesses. A judicial officer can well prefer the evidence of one witness to that of another without the need to make a finding as to honesty. Faulty recollection may well explain a difference in evidence.
34.	In the present matter as instanced in principle 6.7(1) (b) the honesty relates to dealings with departmental officers, with residents and in relation to claims and charges. The Tribunal is to ascertain whether there is a defect in Dr Wenkart’s character such as might put a governmental (local, state or federal) authority or a resident at risk of deceitful conduct or fraudulent behaviour.
35.	As has been said the Respondent relies upon various Supreme Court and Federal Court decisions and opinions of judicial officers expressed in such decisions for its assessment of Dr Wenkart’s character.
36.	Initially the Respondent cited 12 cases upon which it relied. In his closing submissions Mr Smark, appearing for the Respondent, indicated that it was the cases in Exhibit 2 TABS 1, 3 and 4 that where then relied upon. The cases in Exhibit 2, TABS 5, 7 and 8, whilst still to be considered, were said to be now of limited relevance. It is apparent that not anything said in the cases other than those in TABS 1, 3 and 4 adds to the strength of the Respondent’s contentions. The Tribunal considers it necessary, if the contention as to defect of character and of dishonesty is to be maintained, that such defects be seen in the reasons for decision in cases TABS 1, 3 and 4 or not at all.

38.	In his evidence before us Dr Wenkart stated that he did not "accept the judges findings" and "the judgement sticks in my throat". He says that he "was caught in a verbal. I still to this day deny I lied. I have lived the decision. I told the truth and the judge interpreted it as he did. He selected Pitman’s evidence over mine."
39.	Although the findings are not favourable to him or his evidence, it is clear that in a conflict of testimony the judge, with hesitation, preferred that of Mr Pitman. Legal issues went on appeal. The decision was instrumental in Dr Wenkart’s subsequent bankruptcy.
40.	The Respondent contends that the adverse findings and expressions of opinion by the trial judge indicate characteristics of being "less than frank" and being prepared to engage in malicious conduct this not the indicia of a person who is suitable "to manage an aged care facility". It is said that Dr Wenkart did not in his evidence before the Tribunal "grapple with the significance of the events that had entrapped him".
41.	The Tribunal is not aware of what else Dr Wenkart could say or do. He has denied that he lied. There was clearly a conflict of evidence and the Judge was required to make a decision as to who he accepted as narrating the situation as close as possible to what he believed occurred. The "malicious damage" reference was no doubt a description of what was found to have occurred at the time and in the context of the then dispute.

42.	The issue raised in these proceedings was whether a mortgage of land executed by Dr Wenkart was voidable as being an alienation of property with intent to defraud creditors. The proceedings were in due course dismissed with costs. There was again a conflict of evidence and factual issues had to be determined, the Judge balancing the evidence of one witness against that of another.
43.	In the course of the reasons for decision the Judge observed:

46.	The finding of "prima facie dishonest" was made without hearing any oral evidence. It was based on the judges’ reading of the earlier decisions and submissions of Counsel.
47.	It is maintained on behalf of Dr Wenkart that the judge in the bankruptcy proceedings overstated or was not correct in his opinion as to the adverse effect of the findings in the earlier decision. There is merit, with respect to the learned judge, in this submission. There was not in the Abignano (TAB 3) decision a finding of "dishonest intent" or in the Sandtara (TAB 1) decision a finding that "the debtor has been guilty of dishonesty".
48.	Nevertheless the reasons in the bankruptcy (TAB 4) case, based as they were on the earlier reasons for decision and submissions do not take the issue of Dr Wenkart’s honesty or otherwise any further.

51.	Dr Wenkart became bankrupt upon the making of a sequestration order on 28 October 1999. He had objected to the order being made and had been unsuccessful in obtaining an adjournment of the proceedings. The bankruptcy arose out of a dispute he had with a Mr Abignano as evidenced in the litigation in Exhibit 2 TAB 1. In due course the bankruptcy was annulled and no person or company other than those associated with Dr Wenkart lost any money. The proposal to his creditors and the payments to the creditors were arranged at the instigation of Dr Wenkart and not his trustee. The delay in implementing the scheme being put to the creditors and in obtaining the annulment was attributable to litigation initiated by another and outside of his control.
52.	According to Dr Wenkart his bankruptcy resulted from his not accepting earlier offers to settle the dispute. He took a position "on principle", he said, which he subsequently regretted.
53.	The Respondent does not now place great reliance on the fact of the bankruptcy having occurred. It does raise the question as to why Dr Wenkart allowed a sequestration order to be made at all when it could have been avoided by he using company funds that seemingly were available to satisfy his debts. It was at one time submitted on behalf of the Respondent that Dr Wenkart went bankrupt because "he did not want to pay" even though this suggestion was not put to Dr Wenkart during the course of his cross examination. We do not place any weight on this submission. Dr Wenkart says his refusal to initially satisfy his primary creditor was a matter of principle.
54.	On the basis of the evidence before the Tribunal we do not draw any inference adverse to the character of Dr Wenkart resulting from his bankruptcy.

57.	Dr Wenkart has had the experience earlier discussed in these reasons as it relates to the practice of a general practitioner as well as that associated with his management and control of the private hospitals owned by the Applicant. There is no question arising as to his financial competence.
58.	Dr Martyn Baker commenced practice as a general practitioner with Dr Wenkart in 1976. In due course he acquired the interest of Dr Wenkart in the practice. In his affidavit evidence he said:

63.	We are satisfied on the basis of the material tendered before the Tribunal that the Applicant satisfies the pre-requisites contained in the Act and the Approved Provider Principles in that the Applicant and Dr Wenkart do have a wealth of experience dealing with the needs of elderly people. We accept that Dr Wenkart "is passionate about medicine and care for the aged". We accept that he believes in the rights and dignity of aged people and that as Dr Baker evidenced he has a holistic approach to health. There is no issue as to Dr Wenkart being competent in financial management as demonstrated by the Applicant’s financial success in controlling the activities of private hospitals. The Applicant by its key personnel are further competent to maintain records appropriate to the facility and such as to ensure transparency and appropriate accounting of monies received and spent.
64.	Whilst it was initially contended that there was a lack of appreciation on the part of the Applicant as to the differences between an aged care facility and hospitals, the evidence given by Ms Huxley and Dr Wenkart clearly shows an appreciation by them of such differences. The presence in the hospital structure of people such as diversional therapists and others caring for the needs of patients indicates an understanding of aged care and the responsibilities involved. The Applicant conducts its affairs in an environment where aged care awareness is apparent. Further, the Applicant has demonstrated an understanding of what would be the rights of residents and of the responsibilities that would be assumed by a provider.
65.	The concerns primarily expressed on behalf of the Respondent in the course of Counsel’s final submissions related primarily to the reputation for honesty of Dr Wenkart and the ability of the Applicant to provide aged care services. We do not consider that the findings and expressions of opinion seen in the litigation earlier discussed in these reasons are negative factors such as to disqualify Dr Wenkart from being a key personnel. As earlier mentioned the observations are contained in decisions which concerned disputes between the parties to the litigation. Assessments were made as to the evidence and the persons giving the evidence in the context of the facts of the particular cases. We do not see such observations as reflecting generally upon the character of Dr Wenkart. We are mindful of the evidence of Mr Gorzcyca and the statements made by Drs Baker and Vortrubec, Ms Jones and Mr Bowman as to their assessments of Dr Wenkart. He has been a registered medical practitioner since 1968 as well as being a successful businessman having the overall management of private hospitals and medical centres. He has been responsible for the employment of up to 2000 persons at any one time, caring for the needs of up to one million patients in a year and attracting a very substantial turnover. He has never been prosecuted for any offence and there has never been any allegation of dishonesty on his part with the money of others. There is no suggestion of any impropriety on his part. Whilst the Respondent does not now overly rely upon his bankruptcy, the circumstances in which he became bankrupt and the fact of the annulment, are not such as to reflect adversely upon him.
66.	The Respondent expresses concern at the fact of the Applicant and the key personnel not previously having been involved in aged care. The Applicant is aware of this and has indicated its preparedness to ensure that it is fully qualified and equipped to attend to the needs of aged people. The Tribunal is satisfied that the Applicant has the ability to cater for these needs.
67.	On behalf of the Respondent it was submitted that the fact of Dr Wenkart "failing to grapple with the reality of the findings [in the discussed litigation] and its enormity" and "his lack of appreciations of the seriousness of the findings is what is lacking". We are satisfied that Dr Wenkart is fully aware of the seriousness of the findings made against him. He expressed the anguish he has experienced as a consequence of such findings which admittedly he does not accept. He has had to bear the consequence of the findings and it has caused him distress. We do not see this submission as weighing against the character of Dr Wenkart.
68.	On the basis of the evidence before the Tribunal we do not consider Dr Wenkart as being a person not suitable as key personnel of the Applicant in the event of the application being granted.
69.	We are satisfied further that the Applicant has displayed an ability to provide aged care, services and that its competence in this regard is as shown by the evidence of Mr Bowman as well as in the rehabilitation and other services provided by Manly Waters Hospital. The evidence of Dr Wenkart and Ms Huxley in this regard is persuasive. If granted approval the Applicant will be building upon a well established and respected system, in other words a wealth of experience in dealing with members of the public. There is no reason why the Applicant should not properly and efficiently manage an aged care facility, successfully negotiate and satisfy regularity and compliance issues and ensure that the rights of residence in such a facility are respected. We are satisfied that the Applicant has indicated its sufficient appreciation of the needs of a provider of aged care.
70.	We are satisfied that the Applicant has satisfied the statutory requirements and the approved provider principles. We are satisfied that the Applicant and the key personnel are people suitable to provide aged care. The Applicant has the ability and experience to provide aged care and that its record of financial management and conduct is such as to satisfy the statutory prerequisites.