The Applicant was an unregistered provider of supports and services under the NDIS. It sought action against the National Disability Insurance Agency (the Agency) for unpaid invoices totalling $343,246.73. The Agency had received complaints and tip-offs alleging that the Applicant had over-utilised NDIS participant plans or that it had claimed invoices for services not provided to NDIS participants. The Agency decided to not pay the invoices and issued a Request for Information to investigate the Applicant’s records. The FCA found that the Applicant was not owed restitutionary relief and that it was in the Agency’s power to issue the Request for Information.

Key Takeaways

• The Agency can request invoices be substantiated and/or “freeze” payments – invoices are only payable after the Agency CEO (or their delegate) is satisfied the claim meets the requirement of ss45 and 45A of the NDIS Act. If these requirements are not met, then the Applicant is not entitled to the amount.
• The Agency has broad investigative powers – The Agency’s functions and powers include doing anything incidental or necessary for the performance of its functions under the NDIS Act (see ss118(1)(h) and 119(1)). Its powers are not confined to ss53, 55 and 56 as argued by the Applicant.

Background

The Applicant was an unregistered provider of supports and services under NDIS. It provides supports to two main types of participants under the NDIS: plan managers and self-managed participants. The Applicant also acted as support coordinator for 60% of its participants. The Applicant had provided invoices for payment to the Agency for services it stated had been provided to participants totalling $343,246.73.

The Agency received nine complaints and tip-offs concerning allegations that the Applicant was over-utilising participant plans and issuing invoices for services it did not provide. The CEO of the Agency determined it appropriate to manually review and validate all claims submitted in relation to the Applicant. A ‘payment lock’ was activated, ceasing all automated payments of all claims relating to the Applicant. The Agency issued a Request for Information (described internally as ‘RTPs’) requesting that the Applicant produce documents to substantiate payment claims. The Applicant sought:

• Declarations that the Agency pay the Applicant the sum from the payment claims where no RTP was issued;
• That the Agency’s decision to “freeze” or “withhold” funds from the Applicant was of no legal effect; and
• That the RTP sent to the Applicant on 16 September 2024 (RTP0811) was of no legal effect.

The Applicant deposed it would have taken it 12 weeks to compile the documentation requested under RTP0811 and sought urgent relief on the basis that it would likely become insolvent by the end of November 2024.

Principle issues

The principal issues for determination were:

1. Whether the Applicant is entitled to restitutionary relief, and the Agency is required to pay the applicant’s claims, on a quantum meruit basis?
2. Whether the decision to “freeze” or “withhold” funds from the applicant (Freezing Decision) was a decision that the Agency was empowered to make, or an improper exercise of power or otherwise contrary to law?
3. Whether Agency’s decision to issue RTP0811 on 16 September 2024 was a “decision” and, if so, whether the decision was a decision that the Agency was not empowered to make, was an improper exercise of power or otherwise contrary to law?

Decision

The FCA found in favour of the NDIA on all three issues. Neskovcin J found the Applicant held no entitlement for the money from the unpaid invoices because an entitlement to funding arises from the approval of the participant’s plan by the Agency CEO (or their delegate) (see ss45 and 45A of the NDIS Act). His Honour found that there were no funds belonging to the Applicant which the Agency could have decided to “freeze” or “withhold”.

The Applicant made an alternative claim for relief under a quantum meruit basis, which is the principle that a reasonable sum of money should be paid for work completed even if the amount due is not stipulated in a legally enforceable contract. Under this principle, the Applicant needed to show that the Agency was unjustly enriched at the Applicant’s expense. Neskovcin J found that the Applicant’s claim on this basis was incorrect because:

1. The Agency did not retain a “benefit” from the Applicant’s services. Supports and services are provided directly from the Applicant to the Participant.
2. The Agency is not “unjustly enriched” at the expense of the Applicant because it does not retain “funds” the Applicant is entitled to.

Lastly, his Honour found that “the Agency’s functions and powers include doing anything incidental or necessary for the performance of its functions under the NDIS Act” ([67], see ss118(1)(h) and 119(1)). Its powers are not confined to ss53, 55 and 56 as argued by the Applicant. His Honour stated that “in determining whether an amount is payable in respect of a participant’s plan, there is no reason why the CEO (or a delegate) cannot require documentation to substantiate a payment claim that relates to an amount payable under the NDIS in respect to a participant’s plan” [67].

For context, section 53 of the NDIS Act relates to the Agency’s power to obtain information from Participants, section 55 relates to the Agency’s power to obtain information from other persons, and section 56 sets out the requirement for written notices if the Agency requests information under section 55. The aim of these three sections is to maintain the integrity of the NDIS.

The Agency has very broad investigatory powers under the NDIS Act. It can choose to investigate and request invoices be substantiated further before paying a provider. There is no entitlement of payment to the provider while the investigation is pending.