Permanence - NDIA v Davis [2022] FCA 1002

Key Points

In NDIA v Davis [2022] FCA 1002 [opens in new window], the Federal Court has interpreted the NDIS Rules in a way that requires the NDIA and the Tribunal to take into account, among other things, a participant’s financial circumstances in determining whether a treatment is ‘available’. This is part of the NDIS Rules that deal with ‘permanence’.

Facts

Ms Davis suffers from a number of conditions, including spondylarthrosis, degenerative impingement of both shoulders, bilateral knee osteoarthritis, ulcerative colitis, obstructive sleep apnoea and morbid obesity. She applied to become a participant in the NDIA.

The NDIA declined her application, finding that she did not meet the disability requirements under s 24 of the NDIS Act [opens in new window]. Ms Davis sought review of this decision in the Tribunal. On 14 January 2022, the Tribunal decided to set aside the NDIA’s decision and find that Ms Davis should be admitted as a participant: [2022] AATA 40 [opens in new window]. Among other things, the Tribunal found that Ms Davis’s impairments required closely supervised, intensive and sustained dietary control and exercise programs. However, because of Ms Davis’s constrained financial circumstances meant that dietary control and exercise programs, although appropriate, were not available to Ms Davis for the purposes of r 5.4 of the National Disability Insurance Scheme (Becoming a Participant) Rules 2016 (Becoming a Participant Rules).

The NDIA appealed the Tribunal’s decision to the Federal Court of Australia. The Federal Court’s decision of 29 August 2022 contains a number of key statements about interpretation of the NDIS Act and the Becoming a Participant Rules. That is the focus of this blog post.

The Federal Court’s decision

Focus on impairments rather than conditions

Justice Mortimer referred to her earlier decision in Mulligan v NDIA [2015] FCA 544 [opens in new window]; (2015) 233 FCR 201. After reviewing passages from that decision, her Honour stated at [69] of the decision in Davis [opens in new window]:

[…] What the legislative scheme focuses on is not the name of a person’s disability, nor the diagnosis given to a person – but rather what are the impairments experienced by a person which may require supports so that the person can participate in all aspects of personal and community life. It is the impairment which the scheme contemplates may affect the “functional capacity” of a person.

At [113]-[114] of the decision in Davis, her Honour approved the Tribunal’s statements that it is not necessary for the decision-maker (i.e. the NDIA or the Tribunal in the NDIA’s position) to make findings about, or to identify, the conditions that the person has, in order to determine the impairments that the person might have. The decision-maker must satisfy themselves on the basis of the evidence that the person has one or more impairments that involve the loss of, or damage to, their physical, sensory or mental functioning. The focus is on the person’s impairments, not their conditions.

The meaning of permanent

Her Honour next considered the meaning of “permanent” in s24(1)(b) of the NDIS Act [opens in new window]. The NDIA argued that the word meant “irreversible” or “untreatable”. Ms Davis’s morbid obesity was not irreversible or untreatable, and therefore she did not meet this criterion on the basis of morbid obesity. Ms Davis’s lawyers argued that the word meant “long term”.

Her Honour found that neither of these meanings was the correct meaning of permanent. At [81] her Honour considered that the NDIA's definition was too narrow. At [84] she considered that the concept of “irreversible” was unhelpful to the understanding of the meaning of permanent. At [86] her Honour stated [opens in new window]:

The critical point is that “permanent” is used as an adjective in s 24(1) to the noun “impairment” (or in the plural, “impairments”). The focus of the text, consistently with the purposes of the scheme, is on whether the impairments experienced by individuals (rather than the cause of the impairments or the specific diagnoses which might be applied to a medical condition) have an enduring quality so as to fit within the conceptual emphasis of the scheme.

Interpretation of r 5.4 of the Becoming a Participant Rules

Rule 5.4 of the Becoming a Participant Rules states:

An impairment is, or is likely to be, permanent (see paragraph 5.1(b)) only if there are no known, available and appropriate evidence-based clinical, medical or other treatments that would be likely to remedy the impairment.

At [136] of the decision in Davis, her Honour explained that the requirement “would be likely to remedy the impairment” should be understood as involving more than just relieve or improve; rather, it should be understood as something approaching a removal or cure of the impairment.

At [137] and [139], her Honour stated:

In r 5.4, the word “known” connotes a treatment which can be identified by Australian medical practitioners as a suitable treatment for the person’s particular impairment. The word “appropriate” connotes a treatment which has a capacity to “remedy” the impairment and is suitable for the particular individual concerned to undergo. The capacity of individuals with an impairment to undergo certain treatments may vary depending on their physical and psychological capabilities, other aspects of their physical and mental health, on their personal circumstances in terms of where they live and who they live with, and who cares for them.

[…] Assuming as I do the validity of r 5.4, and on the premise any given treatment is “known” and “appropriate” as I have explained those terms, in my opinion the adjective “available” should be understood as directed at what treatments an individual can, in reality, access. Whether a person can afford a treatment will form part of the factual circumstances a decision-maker may need to examine in deciding if a treatment is one that an individual can in reality access.

At [140], her Honour observed that affordability is not the only thing that might affect an individual's ability to access a treatment, other matters such as e.g. their geographic location or the effect of other conditions that they have might also be relevant.

Therefore, her Honour decided at [146] that the Tribunal did not make a mistake in its interpretation of r 5.4 of the Becoming a Participant Rules. The Tribunal was correct to take into account, among other things, Ms Davis’s financial circumstances in deciding whether treatment for her morbid obesity was available for her.

Procedural fairness

Ultimately, the NDIA succeeded on its appeal, because the Court found that the Tribunal did not give the NDIA procedural fairness, because it did not provide the NDIA with an opportunity to make submissions about the appropriate interpretation of r 5.4 of the Becoming a Participant Rules. The Court ordered that the matter had to be heard by a new Tribunal. However, the new Tribunal will have to follow the law as explained in the Court’s decision in Davis, including in relation to the interpretation of the Becoming a Participant Rules and the NDIS Act.

Discussion

This is a very significant decision. In particular, the Court’s interpretation of permanence for the purpose of the Becoming a Participant Rules represents a much more favourable interpretation for potential NDIA participants. In particular, the requirement to consider, among other things, a person’s financial circumstances in order to determine whether a potential treatment is available to them, is likely to lead to a larger number of participants being admitted to the NDIS. That is because, obviously enough, disability frequently reduces a person’s income and increases a person’s expenses. If these matters are taken into account, then treatments that involve a significant financial cost might, depending on the person’s circumstances, be considered to not be available for the purposes of r 5.4 of the Becoming a Participant Rules. Decisions such as Schwass and NDIA [2019] AATA 28; (2019) 167 ALD 104 (Schwass) (see my post here [opens in new window]), which state that a person’s financial capacity should not be taken into account in determining whether treatment is available, are currently not good law and should not be followed.

Importantly, as the Court makes clear, availability is not just a question of financial resources. It depends on other aspects of the person’s situation, including other conditions they might have. For example, if a condition might be resolved by surgery, but that surgery carries with it a significant period of incapacity and recovery, then a single parent or a person with care responsibilities might be able to establish that the surgery is not available to them for the purposes of r 5.4 of the Becoming a Participant Rules.

The decision is also important for morbid obesity specifically. Decisions such as Schwass consider that morbid obesity is unlikely to be a permanent condition, in part because of the various treatment methodologies that are available (e.g. dietician support or bariatric surgery), and because morbid obesity simply describes a person having a weight greater than a particular limit, and this of itself does not reflect any loss or damage to a person’s functional capacity. The Court’s decision in Davis seems to take a more permissive approach to morbid obesity. However, as always, it will depend on the specific circumstances of the participant.