Da Rui and Health Insurance Commission - [2001] AATA 237

DECISION AND REASONS FOR DECISION [2001] AATA 237

ADMINISTRATIVE APPEALS TRIBUNAL )

) No A2000/285

GENERAL ADMINISTRATIVE DIVISION       )
           Re      GREGORY DA RUI
  Applicant
           And    HEALTH INSURANCE COMMISSION
  Respondent

DECISION

Tribunal Michael Sassella, Senior Member

Date23 March 2001
PlaceCanberra

Decision      1. The decision under review is set aside 2. In substitution for that decision, if the Applicant is not at the date of this decision an approved pharmacist under s 90(1) of the National Health Act 1953, the Applicant is granted an extension of approval number 50109H from the time when the decision under review took effect to the close of business on the day that falls three calendar months after the date of this decision.
  ...................(Sgd).....................
  Michael Sassella
  Senior Member
CATCHWORDS
PHARMACEUTICAL BENEFITS – decision to cancel approval number of approved pharmacist – pharmacist not carrying on business as a pharmacist at premises in respect of which the pharmacist is approved – whether decision to cancel approval number was the correct or preferable decision
LEGISLATION
National Health Act 1953
National Health Amendment Act (No 1) 2000
AUTHORITIES
Pharmacy Guild of Australia v Australian Community Pharmacy Authority (1996) 70 FCR 462
W H Soul Pattinson v Secretary, Department of Health and Family Services (1997) 155 ALR 419
Bissaker and Australian Community Pharmacy Authority (1999) 57 ALD 230

REASONS FOR DECISION

23 March 2001 Michael Sassella, Senior Member

History of application

On 15 July 1999 a delegate of the Secretary of the Department of Health and Aged Care, the State Manager of the Health Insurance Commission ("the HIC"), Western Australia, decided under s 98(3) of the National Health Act 1953 ("the Act") to cancel "approval to dispense pharmaceutical benefits" number 50109H ("the approval number"), held by the Applicant (T32). The cancellation was to take effect on 16 July 1999.
On 16 July 1999 Ms A Mihulka, a health industry consultant, wrote to the HIC requesting a delay in the implementation of the decision of 15 July 1999 as she was expecting advice from counsel and considered that Mr Da Rui would be denied natural justice if her request was refused (T33). On the same day the HIC agreed to permit "an extension for a period of seven days" (T34). This was later extended a further week (T35, T36). On 29 July a further submission on the Applicant's behalf was provided to the HIC (T38).
On 30 July 2000 the decision-maker decided to cancel the approval number (T3), again under s 98(3) of the Act. The cancellation was to take effect on 30 July 1999.
On 12 November 1999 the Applicant applied to the AAT under s 105AB(8A) of the Act for review of this decision. The application might appear to have been lodged beyond the statutory period of 28 days from the date when notice of the decision was given to the Applicant. However, the application for review (T1) suggests that a full set of reasons was provided to the Applicant only on 18 October 1999. The Respondent has not objected to the application as being beyond time. The Tribunal therefore accepts that the application was lodged within 28 days of receipt of the proper notice of the decision.
Legislation
National Health Act 1953
84 Interpretation
(1)       In this Part, unless the contrary intention appears:
…
approved pharmacist means a person for the time being approved, or deemed to be approved, under section 90;
approved supplier means an approved pharmacist, an approved medical practitioner or an approved hospital authority;
…
pharmaceutical benefit means a drug or medicinal preparation in relation to which, by virtue of section 85, this Part applies;
…
90 Approved pharmacists
(1)Subject to this section, the Secretary may, upon application by a pharmacist who is willing to supply pharmaceutical benefits on demand at particular premises, approve that pharmacist for the purpose of supplying pharmaceutical benefits at or from those premises.
…
(3AA)Subsection (3A) does not apply to an application for an approval arising out of a change in the ownership of a pharmacy situated at particular premises if the change results or resulted from:
(a)       the sale of the pharmacy; or
(b)the death of the owner or one of the owners of the pharmacy; or
(c)a change in the constitution of a partnership that owned the pharmacy;
if the pharmacy is to continue to operate at the same premises.
(3AB)   In subsection (3AA):
pharmacy means a business in the course of the carrying on of which pharmaceutical benefits are supplied.
(3B)An approval may be granted under this section in respect of an application to which subsection (3A) applies only if the Authority has recommended the grant of the approval, but the Secretary may refuse to grant an approval even if the grant has been recommended by the Authority.
…
95 Suspension or revocation of approval
(1)The Minister may, after investigation and report by the appropriate Committee of Inquiry, by notice in writing:
(a)       reprimand an approved pharmacist; or
(b)suspend or revoke the approval of the pharmacist under section 90;
and may, at any time, by notice in writing, remove that suspension or restore that approval.
(3)A suspension under subsection (1) has effect for such period as the Minister determines and specifies in the notice of suspension.
(4)If the Secretary considers that it is necessary in the public interest so to do pending investigation and report by the appropriate Committee of Inquiry, the Secretary may suspend an approval referred to in subsection (1) and the Secretary may at any time remove the suspension.
(5)Where the approval of a pharmacist is suspended under subsection (4), the Secretary shall forthwith refer the matter to the appropriate Committee of Inquiry for investigation and report to the Minister.
(6)A suspension by the Secretary under subsection (4) has effect only until the Minister has dealt with the matter in accordance with subsection (7).
(7)On receipt of a report from a Committee of Inquiry on a matter referred to it in accordance with subsection (5), the Minister may, by notice in writing, further suspend the approval for such period as the Minister specifies in the notice, revoke the approval or remove the suspension.
(8)The Minister shall not suspend, further suspend or revoke an approval under the preceding provisions of this section unless, having regard to the evidence before the Committee of Inquiry and the report of the Committee, the Minister is satisfied that the pharmacist has, in relation to or arising out of the approval, been guilty of conduct which is an abuse of that approval or is an abuse or contravention of this Act or the regulations or shows the pharmacist, as the case may be to be unfit to continue to enjoy the approval.
(9)The suspension or revocation of the approval of a pharmacist under this section may be in respect of all of the premises in respect of which the approval was granted or may be in respect of particular premises.
(10)For the purposes of this section, a reference to a pharmacist is taken to include a person to whom subsection 90(6) applies.
…
98 Cancellation by Secretary of approval of pharmacists etc.
(1)Whenever:
(a)an approved pharmacist requests that his or her approval under section 90 in respect of all or any of the premises in respect of which he or she is approved be cancelled;
…
the Secretary shall cancel that approval.
(2)Where:
(a)an approved pharmacist gives the Secretary notice in writing that the pharmacist has ceased to carry on business as a pharmacist at premises in respect of which the pharmacist is approved; or
…
the Secretary may cancel the approval.
(3)Where the Secretary is satisfied that an approved pharmacist is not carrying on business as a pharmacist at premises in respect of which the pharmacist is approved, the Secretary may, by notice in writing to the pharmacist, cancel the approval of the pharmacist under section 90.
…
(4)If a person becomes an approved pharmacist in respect of premises in an area in respect of which a medical practitioner is approved under section 92, the Secretary shall cancel the approval of the medical practitioner in respect of that area or of that part of the area in relation to which that section no longer applies.
(4A)If a pharmacist:
(a)before 18 December 1990, was granted an approval to supply pharmaceutical benefits at or from particular premises; and
(b)because of the operation of subsection 90(5A), is taken to have been granted such an approval in respect of other premises;
the Secretary is taken, immediately after the commencement of section 20 of the Health and Community Services Legislation Amendment Act (No. 2) 1993, to have cancelled the approval in respect of the premises referred to in paragraph (a).
(5)A reference in this section to an approved pharmacist carrying on business as a pharmacist at premises is a reference, in the case of an approved pharmacist to whom subsection 90(6) applies, to an approved pharmacist carrying on a business for the supply of pharmaceutical benefits at or from the premises.
…
98 Cancellation by Secretary of approval of pharmacists etc.
…
(3)Where the Secretary is satisfied that an approved pharmacist is not carrying on business as a pharmacist at premises in respect of which the pharmacist is approved, the Secretary may, by notice in writing to the pharmacist, cancel the approval of the pharmacist under section 90.
…
99K Functions
(1)       The functions of the Authority are:
  (a)       to consider applications under section 90; and
  (b)       to make, in respect of an application under section 90:
(i) a recommendation whether or not the applicant should be approved under that section in respect of particular premises; and
(ii) if an approval is recommended—recommendations as to the conditions (if any) to which the approval should be subject; and
(2)In making a recommendation under subsection (1), the Authority must comply with the relevant rules determined by the Minister under section 99L.
…
99L Determination of rules by Minister
(1)The Minister must, by writing, determine the rules subject to which the Authority is to make recommendations under subsection 99K(1).
(2)       A determination under subsection (1) is a disallowable instrument
…
105AB Application for review by Tribunal
…
(8A)An application may be made to the Tribunal for a review of a decision of the Secretary under subsection 98(3) or (3A) to revoke an approval.

Sections 99K(1) and (2) as quoted above are different to the s 99K which existed at the time the decision under review was made. Section 99K of the Act was amended by Schedule 1 of the National Health Amendment Act (No. 1) 2000 (the "Amendment Act"). The Amendment Act repealed s 99K(1)(a) by omitting all references to applications under the then sections 99ZA, 99ZAA and 99ZDA (Division 4C of Part VII, where those sections appeared, was repealed by the Amendment Act, Schedule 1) none of which is relevant to the decision under review. The Amendment Act also repealed ss 99K(1)(c), (da), (db) and (c), which are also not relevant to the decision under review. The decision under review relates to an application under section 90.
The Amendment Act also revoked the previous s 99L(1)(a) and substituted the current s 99L(1), which is quoted above. The previous s 99L(1)(a) is the provision that existed at the time of the cancellation under review, but which read in the same as way as s 99L(1) now does.
Ministerial Determinations
COMMONWEALTH OF AUSTRALIA
National Health Act 1953
PHARMACEUTICAL BENEFITS
DETERMINATION UNDER SUBSECTION 99(L)(1)
No. PB 13 of 1998
…
6.Subject to paragraph 8, approval of a pharmacist ("the applicant") under section 90 of the Act in respect of particular premises must be recommended if the applicant has a legal right to occupy those premises for the purpose of operating a pharmacy, and either:
(aaa)the applicant is already approved under section 90 of the Act in respect of other premises from which the applicant proposes to cease supplying pharmaceutical benefits immediately before the granting of the approval; or
(aa)another pharmacist ("the vendor") is already approved under section 90 of the Act in respect of other premises from which the vendor proposes to cease supplying pharmaceutical benefits immediately before the granting of the approval to the applicant, and the vendor has specified that it is in favour of the applicant that he or she proposes to cease supplying pharmaceutical benefits;
and one of the following circumstances applies:
(a)the premises in respect of which approval is sought are situated not more than 1 kilometre, measured door to door by the shortest lawful access route, from the premises from which pharmaceutical benefits are to cease being supplied; or
(b)the premises in respect of which approval is sought are situated not more than 2 kilometres, measured door to door by the shortest lawful access route, from the premises from which pharmaceutical benefits are to cease being supplied, and the Authority is satisfied that:
(i)there are no other suitable commercial premises available which are situated not more than one 1 kilometre, measured door to door by the shortest lawful access route, from the premises from which pharmaceutical benefits are to cease being supplied; and
(ii)the application for approval results from exceptional circumstances pertaining to the premises from which pharmaceutical benefits are to cease being supplied, including:
(A)damage caused by fire, water, storm or earthquake; or
(B)health condemnation;
(C)changes to occupancy provisions; or
(D)      redevelopment for public works; or
(c)the premises in respect of which approval is sought are to be situated not less than 2 kilometres, measured door to door by the shortest lawful access route, from the nearest other premises in respect of which a pharmacist is approved under section 90 of the Act, provided that:
(i)there are other premises in respect of which a pharmacist is approved under section 90 of the Act which are situated not more than 5 kilometres, measured door to door by the shortest lawful access route, from the premises from which pharmaceutical benefits are to cease being supplied; or
(ii)the Authority is satisfied that there will not be a definite community need for pharmaceutical services in the area of the premises from which pharmaceutical benefits are to cease being supplied; or
(d)the premises are premises at or from which the applicant has, since before 18 December 1990 (being the date on which legislation for pharmacy restructuring came into effect) been supplying pharmaceutical benefits in lieu of other premises in respect of which the applicant is approved under section 90 of the Act.
COMMONWEALTH OF AUSTRALIA
National Health Act 1953
PHARMACEUTICAL BENEFITS
DETERMINATION UNDER SUBSECTION 99(L)(1)
No. PB 11 of 1999
…
3.Paragraph 6 of the Principal Determination is amended by omitting paragraphs (aaa) and (aa) and substituting the following:
"(aa)the applicant is approved under section 90 of the Act in respect of other premises and the applicant has agreed that that approval will be cancelled immediately before the approval under consideration, if granted, takes effect; or
(ab)another pharmacist:
(i)is approved under section 90 of the Act in respect of other premises and that pharmacist has agreed that that approval will be cancelled immediately before the approval under consideration, if granted, takes effect; and
(ii)has indicated, in writing, that the cancellation is intended to enable recommendation, under these rules, of approval of the applicant; and
in either case, if the approved pharmacist has ceased to carry on business as a pharmacist at the other premises, the Secretary:
(ac)     is aware of the cessation and the reasons for it; and
(ad)has decided, under section 98 of the Act, not to cancel the approval concerned;"
COMMONWEALTH OF AUSTRALIA
National Health Act 1953
PHARMACEUTICAL BENEFITS
DETERMINATION UNDER SUBSECTION 99(L)(1)
No. PB 8 of 2000
…
Approval to Supply Pharmaceutical Benefits – Relocation of Existing Pharmacies
6.Subject to paragraphs 8 and 9, approval of a pharmacist ("the applicant") under section 90 of the Act in respect of particular premises must be recommended if the applicant has a legal right to occupy those premises for the purpose of operating a pharmacy, and either:
(aa)the applicant is approved under section 90 of the Act in respect of other premises and the applicant has agreed that that approval will be cancelled immediately before the approval under consideration, if granted, takes effect; and
(ab)another pharmacist:
(i)is approved under section 90 of the Act in respect of other premises and that pharmacist has agreed that that approval will be cancelled immediately before the approval under consideration, if granted, takes effect; and
(ii)has indicated, in writing, that the cancellation is intended to enable recommendation, under these rules, of approval of the applicant; and
in either case, if the approved pharmacist has ceased to carry on business as a pharmacist at the other premises, the Secretary:
(ac)     is aware of the cessation and the reasons for it; and
(ad) has decided, under section 98 of the Act, not to cancel the approval concerned;
and one of the following circumstances applies:
(a)the premises in respect of which approval is sought are situated not more than 1 kilometre, measured door to door by the shortest lawful access route, from the premises from which pharmaceutical benefits are to cease being supplied; or
(b) the premises in respect of which approval is sought are situated not more than 2 kilometres, measured door to door by the shortest lawful access route, from the premises from which pharmaceutical benefits are to cease being supplied, and the Authority is satisfied that:
(i)there are no other suitable commercial premises available which are situated not more than one 1 kilometre, measured door to door by the shortest lawful access route, from the premises from which pharmaceutical benefits are to cease being supplied; and
(ii)the application for approval results from exceptional circumstances pertaining to the premises from which pharmaceutical benefits are to cease being supplied, including:
(A)damage caused by fire, water, storm or earthquake; or
(B)health condemnation;
(C)changes to occupancy provisions; or
(D)      redevelopment for public works; or
(c)the premises in respect of which approval is sought are to be situated not less than 2 kilometres, measured door to door by the shortest lawful access route, from the nearest other premises in respect of which a pharmacist is approved under section 90 of the Act

Factual chronology

There is a chronology from the Respondent in the reviewable decision (T3), one from Ms Mihulka in T28 at folio 67, and another from the Applicant provided at the hearing of the matter. They are largely similar. The summary following draws from all three and presents the situation as the Tribunal accepts it to be.
On 3 March 1995 (T4) a letter was sent to the Applicant advising that his approval for operating his pharmacy from the premises at 89 Hampton Rd, Fremantle, Western Australia, had been approved under s 90(1) of the Act. He had applied under s 90(1) of the Act for approval on 22 November 1994.

On 23 September 1997 (T5) the Applicant applied to the HIC for approval to relocate his pharmacy away from the approved premises to 14 Forrestfield Marketplace Shopping Centre, Centre Hale Road, Forrestfield, Western Australia. This was an application said to be made under paragraph 7(a) of Ministerial Determination PB 21 of 1996. Enclosed were forms requesting cancellation of the existing approval and an application for approval as a pharmacist in the new location.
The application was referred to the Australian Community Pharmacy Authority ("the ACPA") for consideration in accordance with s 90(3B) of the Act and on 18 December 1997 (T8) the ACPA recommended that the application not be approved because of the leasing of too few shops in the Forrestfield shopping centre.
On 22 December 1997 (T9) a delegate of the Secretary, Department of Health and Family Services rejected the application pursuant to section 90(3) of the Act.
In May 1998 Mr Da Rui was given notice to quit by his landlord at the premises at 89 Hampton Rd (T28, folio 67).
On 7 May 1998 (T10) Ms Mihulka, acting for the Applicant, requested that the approval number 50109H be "suspended" for two reasons:

The Applicant had been on a monthly tenancy for some time at 89 Hampton Rd, Fremantle and had been required to quit the premises and to relocate to a newsagency in the nearby shopping centre.
The Applicant did not wish to move his business into the newsagency as he would be relocating in the next three to four months.

Also on 7 May 1998 (T11) the delegate wrote to the Applicant advising that she was empowered, under section 98(3) of the Act, to cancel an existing approval where she was satisfied that an approved pharmacist is not carrying on business at the approved premises.
The Applicant was led to believe at this stage by the owner of the centre that the Forrestfield application would proceed in the near future (T28, folio 67).
In September 1998 approaches were made to Mr Da Rui by a local pharmacist to relocate Mr Da Rui's number between one and two kilometres away under an exceptional circumstance clause to a new medical centre (T28, folio 67). This did not proceed largely because of lack of council approval to establish the medical centre in which the pharmacy was intended to operate.
On 9 October 1998 (T12) Ms Mihulka wrote again and indicated the Applicant's intention to relocate to a shopping centre, but the Forrestfield Marketplace Shopping Centre had leased two fewer shops than the 30 that would define it as a "large shopping centre" under Ministerial Determination PB 13 of 1998 (issued under section 99L(1)(a), as it then was, of the Act). A further six months extension of time for implementation of the suspension of the application was requested.
On 16 October 1998 (T13) the delegate in the HIC wrote to the Applicant granting a three months extension of operation of approval number 50109H, with the Applicant having to forward s 90 and s 98 forms and proof of the Applicant's legal right to the proposed site. This was to indicate the Applicant's intention to relocate.
On 6 January 1999 (T14) Ms Mihulka indicated that an application was being made by Ms Rhonda Warne and Ms Susan Ashcroft to relocate the approval number to Lady Davidson Hospital in Turramurra, NSW. A further extension of time was sought to allow the application to be considered at the 24 February 1999 ACPA meeting.
On 7 January 1999 (T15) an extension of time for operation of the suspension was granted until 28 February 1999.
On 27 January 1999 (T16), the HIC received a request from the Applicant to relocate his pharmacy to the NSW address and to change ownership of the pharmacy to Ms Warne and Ms Ashcroft. This application was referred to the ACPA.
On 24 February 1999 (T17) the ACPA did not recommend approval of the application on the grounds that it did not meet rule 6(aa) of Ministerial Determination PB 13.
On 25 February the Secretary to the ACPA, Mr Ross, informed Ms Mihulka that the ACPA has just received legal advice which changed its position on relocation applications where a pharmacist is not trading from the donor premises (Applicant's chronology provided at hearing). This was why the application by Warne and Ashcroft had been rejected. It was intended that the Ministerial Determination be amended.
On 2 March 1999 (T18) the HIC received advice that the relocation and change of ownership application number NA375 had been opposed by the ACPA.
On 5 March 1999 (T19) a senior executive in the HIC was asked by Ms Mihulka to "hold off" until a legal position was clarified. She said there may have been a denial of natural justice.
On 22 March 1999 (T20) Ms Mihulka wrote to the delegate requesting a further extension in relation to cancellation of the approval number to allow her to obtain legal advice.
On 31 March 1999 (T21) the HIC State Manager wrote to Ms Mihulka advising that an extension had been granted for two months.
On 16 April 1999 (T22) Ms Mihulka wrote to Mr Ross, Secretary of the ACPA, and outlined a chronology of the events the Applicant had experienced. She explained the financial hardship confronting Mr Da Rui if the approval number were cancelled. He stood to lose $50,000 if his number were cancelled. He had had to give up his original lease in Fremantle under duress by the lessor who wanted him to relocate into smaller premises in the same centre. His business had deteriorated because of doctors relocating. Mr Da Rui had tried at all times to relocate his approval number. He had kept the HIC informed at all times. The Ministerial Determination was said to preclude the approvals required for a relocation where the pharmacist applying has ceased supplying benefits in the existing approved location. Mr Da Rui's case was special for two reasons. First, his approval number had been suspended rather than cancelled. Second, he had been forced to cease operation. He had not done so voluntarily. She sought changes to the Ministerial Determination to protect the interests of pharmacists whose approval numbers had been suspended rather than cancelled.
On 27 May 1999 (T23) Ms Mihulka discussed the "parking" issue with a senior executive in the HIC and suggested she speak with Mr Ross in the ACPA for further insight. The parking issue presumably refers to Ms Mihulka's overtures to the ACPA on 16 April 1999 seeking particular treatment for suspended approval numbers pending possible amendment of the Ministerial Determination.
On 1 June 1999 (T24) Mr T Rowland, pharmaceutical adviser in the HIC, wrote to the HIC senior executive to whom Ms Mihulka had spoken on 27 May 1999. He said that the ACPA had discussed cases where a non-trading pharmacist had sought a relocation of an approval number. The ACPA had thought there were some circumstances where, due to circumstances beyond the control of the approved person, the approved person could not operate a pharmacy from the approved premises and would wish to relocate the approval. In such cases, provided the approved pharmacist had kept the HIC fully and honestly informed of their actions and the circumstances surrounding the approval there may be a case for amending the Ministerial Determination. However, while the ACPA wanted legal work done on whether relocation by a non-trading pharmacist could be approved in exceptional circumstances, Mr Da Rui's case was not considered appropriate for special treatment. His "circumstances appear to be of his own making and not due to exceptional circumstances outside his control." He had also had more than 12 months since he ceased trading in which to provide the HIC with clarification of his plans. He was unwilling to provide the HIC with any indication of whether he proposes to "supply pharmaceutical benefits on demand" to the public while wishing to "hold onto" his approval. There appeared nothing to prevent the HIC delegate from considering the Applicant's approval under her powers in s 98(3) of the Act. This suggested that the HIC could cancel Mr Da Rui's approval number.
On 4 June 1999 (T25) the HIC wrote to Ms Mihulka indicating that the ACPA did not believe that an amendment to Ministerial Determination PB 13 would cover the Applicant's approval as it considered his circumstances did not fit the reason for seeking amendment. She was asked to give reasons by 18 June 1999 why the Applicant's approval should not be cancelled.
On 9 June 1999 (T26) Ms Mihulka wrote to Mr Rowland, pharmaceutical adviser in the HIC, requesting that the Applicant's case be urgently looked at. It was submitted that the Applicant had made every effort to have his approval number relocated but for reasons outside of his control this had not happened.
On 16 June 1999 (T27) Ms Mihulka requested that no decision be made until 25 June 1999 as she would be out of town. The HIC agreed to this date.
On 24 June 1999 (T28) Ms Mihulka sent the HIC State Manager all documentation relating to the suspension of the Applicant's approval number.
On 25 June 1999 (T29) Ms Mihulka wrote to the HIC State Manager indicating the Applicant's intention to lodge an application to relocate the approval number by 29 June 1999.
On 29 June (T30) Ms Mihulka submitted documentation to relocate the approval number to 101 South Terrace, Fremantle.
On 1 July 1999 (T31) the HIC delegate wrote to Ms Mihulka stating that any decision would have to be made under current and not proposed legislation. She indicated that she would review the situation as regards the approval number.
On 15 July 1999 (T32) the HIC delegate cancelled the approval number with the date of effect being close of business 16 July 1999.
On 16 July 1999 (T33) Ms Mihulka requested an extension of seven days until 23 July 1999 and asked that the approval number not be cancelled. The delegate agreed to that request (T34).
On 21 July 1999 (T35, T36) Ms Mihulka requested and was granted a further extension of seven days until 30 July 1999, as her husband was ill.
On 22 July 1999 (T37) Ms Mihulka wrote to the delegate suggesting that the Ministerial Determination PB 13 would be amended within six weeks.
On 29 July 1999 (T38) Mr P Baker of Ebsworth and Ebsworth solicitors, on behalf of the Applicant, wrote to the HIC delegate asking her to look at their client's position in view of his having located appropriate premises for a relocation and the imminent amendment of the Ministerial Determination. It was suggested that other pharmacists in positions similar to Mr Da Rui were being treated more sympathetically. Their suspensions were being extended pending the amendment of the Determination.
On 30 July 1999, the delegate wrote to Mr Baker, cancelling the approval number to supply pharmaceutical benefits at 89 Hampton Rd, Fremantle. The decision had immediate effect.
The reasons for the decision (T3) were essentially that

The Act in s 98(3) gives the Secretary of the Department of Health and Aged Care a discretion to cancel an approval where the Secretary or a delegate is satisfied that an approved pharmacist is not carrying on business at the premises in respect of which approval has been granted.
Having regard to the scope and purposes of the Act a delegate may reasonably take the view that a central consideration bearing on the exercise of the discretion to cancel an approval under s 98(3) is the question whether an affected person is continuing or has continued to carry on business as a pharmacist from the approved premises.
Mr Da Rui has not carried on business as a pharmacist from 89 Hampton Road, Fremantle since at least May 1998.
Mr Da Rui has had the benefit of many deferrals of a decision under s 98(3) of the Act since May 1998.
Despite repeated assurances by the Applicant that he would relocate to another site or that he would sell his approval to persons in another State none of these events had come to pass and he still carried on no business in Fremantle.
It is not appropriate that a delegate exercise powers on an assumption that the law, here the Ministerial Determination, will change.

On 12 November 1999 the Applicant lodged an application for review of this decision with the Tribunal.
Oral and documentary evidence
A hearing was held in Canberra on 6 November 2000. The Applicant was represented by Mr Burley of Counsel, the Respondent by Mr Gath, Counsel in the HIC.
The Applicant's case
Mr Burley opened the Applicant's case by arguing as follows.
Section 98(3) of the Act says that the Secretary may cancel the approval of a pharmacist under s 90 if an approved pharmacist is not carrying on business as a pharmacist at premises in respect of which the pharmacist is approved. The power is discretionary. The Secretary may choose not to cancel.
Section 90 of the Act provides the basis for granting a pharmacist an approval number. It permits the Secretary, upon application by a pharmacist who is willing to supply pharmaceutical benefits on demand at particular premises, to approve that pharmacist for the purpose of supplying pharmaceutical benefits at or from those premises. Section 90(3A) requires that an application is to be referred to the ACPA for its recommendation (s90(3B)). The ACPA, in making its recommendation, is bound by any relevant Ministerial Determination (s 99L).
There is a definition of "pharmacy" in s 90(3AB) of the Act but it simply says it is a business in the course of the carrying on of which pharmaceutical benefits are supplied. Section 84(1) in turn defines "pharmaceutical benefit" to mean in effect a drug or medicinal preparation recognised under s 85 of the Act. Section 85 provides for the identification of drugs and medical preparations that attract support under the Pharmaceutical Benefits Scheme (PBS).
Section 90 does not mention an approval number system. Approval numbers are provided to an approved pharmacist as an administrative measure to aid in their identification.
Part VII of the Act, which includes s 90, sets up a scheme for the provision of pharmaceutical benefits.
Mr Da Rui was in difficulty with his pharmacy because of circumstances beyond his control. He had asked the delegate to use her discretion under s 98(3) not to cancel his approval. He received favourable determinations for some time. The first was for six months given in May 1998 (T11). A three-month suspension was agreed on 16 October 1998 (T13) and the Applicant was requested to submit documents required for approving a relocation. An extension was granted from 7 January 1998 to 28 February 1998 (T15). An extension was granted on 31 March 1999 to 31 May 1999 (T21). A form of extension was then granted to 18 June 1999 (T25). On 16 July 1999 (T34) and 21 July 1999 (T36) extensions were granted effective to 30 July 1999.
What counsel described as a calamitous event for Mr Da Rui occurred on 25 February 1999 (T17) when the ACPA wrote to the HIC stating that it was recommending that the proposal to transfer the approval to NSW be rejected because paragraph 6(aa) of Ministerial Determination PB 13 of 1998 (effective from 1 July 1988) was not met. This was because other premises were not supplying pharmaceutical benefits on demand. The relevant determination is Exhibit R5. The ACPA believed that paragraph 6(aa) precluded it from supporting an application for approval by any pharmacist whose approval was contingent on cancellation of another pharmacist's application number which had been suspended under s 98(3) of the Act.
From February 1999 the thrust of the Applicant's actions was to have his suspension prolonged until the Ministerial Determination could be amended. The Commonwealth and the Pharmacy Guild were said by counsel to be negotiating to achieve this at the time. An amended determination was gazetted on 17 September 1999 (Exhibit R6). Before that, on 30 July 1999, the HIC delegate had cancelled Mr Da Rui's approval number.
The Applicant's case was that his approval should not have been cancelled. The decision should have been deferred until the Ministerial Determination was amended. In all the circumstances the suspended application would have achieved relocation. Counsel stressed that the decision-maker was not bound by the determination. Only the ACPA was so bound in making its recommendation.
The Respondent's case
Mr Gath opened the Respondent's case by observing that it was correct and appropriate for the HIC delegate to have regard to the legislation as it existed at the date of the decision when making her decision on 30 July 1999.
The HIC requires a relocation application to include formal applications for cancellation and relocation because of the sensitivity surrounding the granting of approvals. The HIC engages in consultations with many parties and this process is assisted by the formal documentation. The ACPA has a role in the process for like reasons. It is essentially constituted by pharmacy industry representatives and can reflect the interests of those caught up in the processes.
The Applicant changed his mind several times. First, he wanted to relocate and keep his approval number as a pharmacist operating in different approved premises. When that proposal struck problems he decided to sell his number to the NSW applicants. Mr Gath explained that this is not provided for in the Act but it occurs anyway. A market value has grown up around an approval number and the number can in appropriate circumstances be transferred with approval. The transferor pharmacist who holds the number applies for cancellation of that number. The cancellation is contingent on a second application by the transferee pharmacist for an approval number being granted a number. The two pharmacists queue over a single application, as counsel described it. The approval number given to the transferee pharmacist will be different numerically from the number that has been cancelled.
The Applicant then decided to try and relocate in Perth. The decision-maker considered that too much time had elapsed and too many opportunities had been accorded Mr D Rui to address the issues drawn to his attention with no result.
Mr Gath referred to the reported views of the ACPA in T24, described in the chronology earlier. The ACPA was reported to have concluded that Mr Da Rui's circumstances would not be appropriate to attract a beneficial interpretation in the proposed amended Ministerial Determination. His circumstances appeared to be of his own making and not due to exceptional circumstances outside his control. Mr Gath said that this was the language of policy that existed within the HIC. This was to the effect that where an entity has ceased to carry on business and there is a physical manifestation of an inability to continue to supply pharmaceuticals there should be an expectation, in the absence of something unusual or extraordinary, that the approval will be cancelled.
Mr Gath provided internal HIC policy documents. One if these was Exhibit 7, "Policy on exercise of power of cancellation where pharmacy seeks to close temporarily". This is in two forms, the first dated 4 May 1995; the second dated 7 July 1995. Exhibit 8 was a recent document, "Deactivation of Pharmacist Approvals Made under s 90 of the National Health Act 1953 – Guidelines" (undated). The 1995 documents embody policy with the following main features:
1.Where a pharmacist desires to relocate and there will be a period before the pharmacy can open approval should be given for inactivity only where evidence is provided that the pharmacy will reopen and transact business within six months.
2.There could be a further extension of up to six months because of delay outside the pharmacist's control (not including obtaining finance or disposing of old premises).
The recent document (Exhibit R8) also speaks of a maximum of six months of closure as permissible if approval to deactivate an approval number is to occur. Deactivation can be contemplated in a number of situations, eg:

for up to six months for reasons beyond the control of the pharmacist (eg renovation of the shopping centre);
compelling and demonstrated personal reasons (eg going interstate attending to a sick relative); or
an unavoidable delay in transfer of ownership of the business where the current holder has contracted to sell the business.

There can be a second period allowed of up to six months for the reopening to occur if approval was originally granted and the new circumstances warrant a further extension.
Mr Gath pointed out that from 7 May 1998 (T11) the Respondent's delegates had warned that the matter was dragging on too long and as at May 1998 it was hoped that closure of the Fremantle premises would not extend beyond six months.
Mr Gath considered that the Tribunal could look at the law as it stands at the date of the decision. This might give the Tribunal more flexibility than the delegate enjoyed.
The Applicant's final submissions
Mr Burley argued, as had Mr Gath, that the Tribunal can apply the Ministerial Determination in its form as at the date of the Tribunal's decision. However, the Tribunal, like the HIC delegate, is not bound by the determination in any event. The Tribunal is not limited to applying the law as it stood at the date of the decision under review. Drake v Minister for Immigration and Ethnic Affairs (1979) 2 ALD 60 is authority for this proposition at page 68 of the full Federal Court decision (per Bowen CJ and Deane J).
Ministerial Determination PB 13 of 1998 (Exhibit R5), operating from 1 July 1998, relevantly provides in paragraph 6 that the ACPA must approve in relation to particular premises the application by a pharmacist to supply pharmaceutical benefits if the pharmacist has a legal right to occupy the particular premises for the purposes of operating a pharmacy and, amongst other things, either (i) the pharmacist is already approved under s 90 in respect of other premises from which he or she proposes to cease supplying pharmaceutical benefits immediately before the granting of the approval, or (ii) another pharmacist (the vendor) is already approved under s 90 in respect of other premises from which he or she proposes to cease supplying pharmaceutical benefits immediately before the granting of the approval to him or her, and the vendor has specified that it is in favour of the applicant (the transferee pharmacist) that he or she proposes to cease supplying pharmaceutical benefits. (Ministerial Determination PB 13 of 1998, paragraph 6(aaa) and (aa).)
On 17 September 1999 the Parliamentary Secretary to the Minister for Health and Aged Care signed into effect Ministerial Determination PB 11 of 1999 (Exhibit R6), operative from the date of gazettal, 17 September 1999. Paragraph 6 of PB 13 of 1998 was amended by deletion of paragraphs 6(aa) and 6(aaa). They were replaced by new paragraphs 6(aa) and 6(ab). The new paragraphs are similar to the deleted paragraphs but new paragraphs 6(ac) and (ad) have been inserted to deal with deactivated approvals. The result is that where the approved pharmacist proposes to cease supplying pharmaceutical benefits in a particular premises and to commence supplying them in new premises, or to cease supplying them in a particular premises in favour of an application by another pharmacist (as in Mr Da Rui's situation), a positive recommendation must be made by the ACPA, if, amongst other things, the Secretary is aware of the cessation and the reasons for it, and the Secretary has decided, under s 98 of the Act, not to cancel the approval concerned.
A third Ministerial Determination, PB 8 of 2000 (Exhibit R3), was signed by the Parliamentary Secretary to the Minister for Health and Aged Care on 11 July 2000. The version of paragraph 6 in this determination represents a consolidation of the changes in PB 11 of 1999 as they affect PB 13 of 1998.
When the ACPA refused to support the Applicant's application to relocate the approval to NSW (T17) (25 February 1999) he was in an invidious position as he had already ceased trading in Fremantle. The legal interpretation of the Ministerial Determination accepted by the ACPA meant that he could never satisfy the requirements of the HIC as laid down in T13 (16 October 1998) that he had to succeed in an application to relocate the approval number to approved premises in a timely manner. Because of the restrictions on the ACPA resulting from the Ministerial Determination that bound it, but not the HIC, the ACPA would never be able to support the Applicant's application.
Mr Burley provided evidence, effectively from the Bar table, that negotiations ensued between the Commonwealth and the Pharmacy Guild of Australia (the Guild) to resolve the problem as it affected the Applicant and a number of other pharmacists. He referred to the Federal Court decision in Pharmacy Guild of Australia v Australian Community Pharmacy Authority (1996) 70 FCR 462 in which Branson J explained the relationship between the Guild and the ACPA. At pages 466-477 of that decision it is said that the ACPA was established at the time of the government decision to restructure the pharmacy industry to produce a more efficient community pharmacy structure in Australia. The Guild already existed to represent the interests of pharmacists who are employers. Successive agreements between the Guild and the Minister have been signed. Justice Branson discusses the 1995 agreement. It records agreement between the Minister and the Guild as regards the outcomes anticipated from the pharmacy industry restructure. The terms commit the Minister to including some of the considerations in the agreement in his or her Ministerial Determinations, such as those discussed above. The inference is that the Guild has standing to negotiate to amend an existing agreement between it and the Minister to bring about a change in a Ministerial Determination. Of course, the Minister could, if he or she wished, agree to such a change as a result of discussion even if no new agreement is recorded formally.
The HIC delegate's reasoning was flawed in several respects:
1.The Applicant had been unable to relocate for reasons entirely beyond his control. First, the lessor at Forrestfield had failed to secure sufficient retail leases for his development to qualify as a "large shopping centre", a concept recognised in clause 23 of Exhibit R2, the "Third Pharmacy Agreement between the Commonwealth of Australia and the Pharmacy Guild of Australia" (the Third Pharmacy Agreement). (The copy provided to the Tribunal was undated but was drafted to cover the period 1 July 2000 to 30 June 2005.) Second, the ACPA's interpretation of Ministerial Determination PB 13 of 1998 had changed to the detriment of the Applicant. He had had nothing to do with that.
2.The Applicant had consistently indicated that his intention was to relocate his approval number. The extensions granted to Mr Da Rui in October 1998 and January 1999 were apparently given without any reference to written policy, as judged by the Respondent's reasons in the Section 37 Statement. The HIC appeared prepared to grant extensions in furtherance of the relocation provided Mr Da Rui kept the process moving to ensure a timely outcome. Had the ACPA supported Mr Da Rui's application in February 1999 there is nothing to suggest that the HIC would have regarded his conduct as dilatory.
3.At worst, the Applicant's problems could be said to be "of his own making" only up to February 1999 when the ACPA adopted its new interpretation of the Ministerial Determination. Thus, on the most pejorative interpretation of events, the Applicant could be held responsible for only nine months of the delay in relocating.
4.After February 1999 it was impossible for the Applicant to make any successful relocation application.
5.There is no apparent policy basis for the requirement of "exceptional circumstances" as stated in the letter of 15 July 1999 sent by the decision maker (T32).
Mr Burley submitted that the Applicant was in difficulties beyond his control as far as his premises at 89 Hampton Rd, Fremantle, were concerned, and requested the delegate of the Health Insurance Commission to exercise a discretion under section 98(3) of the Act not to cancel the approval, and this discretion was exercised in his favour.
Mr Burley then submitted that the policy of the Act is in favour of the Secretary not exercising the discretion to cancel. Instead the policy is to permit an approval to remain valid provided that steps are taken to relocate in a proper and timely manner.
He referred to the Pharmacy Guild case (supra) and Re Bissaker and ACPA (1999) 57 ALD 230 as authorities where the Court and Tribunal had each considered the relationship that exists between private pharmacies and the Commonwealth in relation to the distribution of pharmaceutical benefits under the national health scheme. The objectives set out in the agreements between the Guild and the Minister include that the parties intend to "continue to enhance the development of an effective, efficient and well-distributed community pharmacy service in Australia" (Re Bissaker, supra, 235, paragraph 13). The policy was to encourage relocations to ensure a "well distributed community pharmacy service in Australia" (Re Bissaker, supra, 235, paragraph 14). The Third Pharmacy Agreement (R2) lists objectives that are consistent with those cited in the Bissaker case (supra).
Mr Burley said that the policy underlying s 98(3) of the Act is intimately related to that concerning the grant of pharmacy approvals and their relocation. Clearly the Secretary is obliged to make a decision whether or not to cancel an approval under s 98(3) if a pharmacy is not operating from approved premises. However, the policy favours continuation of the approval, albeit suspended, provided proper steps are taken to achieve relocation.
As regards the policy documents contained in Exhibits 7 and 8, Mr Burley said they were not really policy documents related to the underlying policy of the Act. Rather they indicate some circumstances where the discretion to cancel or not to cancel might be exercised. Counsel noted that the guidelines permitted extensions of up to 12 months but also noted that the guidelines were not comprehensive. They did not refer to relocations involving a transfer of approval to a new pharmacist, as was in issue here as regards the NSW option.
Mr Burley considered that the policy expressed in the new paragraphs of Ministerial Determination PB 11 of 1999 reflects the Government's policy preference. He cited Drake, supra, 640-641, where Brennan J supported decision-making occurring in accordance with "an adopted policy". The Tribunal notes that the Drake cases also attributed particular importance to policy promulgated by the Minister and said that cogent reasons should exist before departing from that policy (Drake v Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634, 644-645).
In summary the Applicant's representative said that the delegate at first recognised the correct policy and granted extensions. However, after the ACPA decision in February 1999 the delegate failed to note that the Applicant's ability to relocate was entirely thwarted by the ACPA's changed position. And that this was nothing to do with the Applicant and was outside his control.
Further, it was apparent in July 1999 that the Ministerial Determination would be amended, as it was in September 1999, to overcome the restrictive interpretation required of and by the ACPA. The delegate did not consider this to be relevant.
It would be entirely consistent with the purposes of the Act for the Tribunal to set aside the decision under review and substitute a decision to suspend the Applicant's approval number to enable it to be relocated to alternative premises.

At the end of his submissions counsel referred the Tribunal to the decision in W H Soul Pattinson v Secretary, Department of Health and Family Services (1997) 155 ALR 419. The central issues and the specific type of action in that case differ considerably from the instant case. However, counsel read into the decision support for the continued suspension of inactive approvals because of references made by Beaumont J to a HIC policy document dated 27 April 1995 which contained paragraphs supportive of suspension rather than cancellation where the problem arises from relocation. This is differentiated from closures of convenience such as a decision to go on a lengthy holiday.
The Respondent's final submissions
Mr Gath for the Respondent addressed the underlying policy behind Part VII of the Act. He sought the aid of the Soul Pattinson case (supra). He noted that counsel for the Applicant in the instant application represented a third party in the Soul Pattinson case whose commercial interests were adversely affected by a delay of as little as two months on the part of the HIC in cancelling the relevant approval. It was interesting to note that counsel for the Applicant in the instant case was supporting a suspension that could last for 18 or more months.
Mr Gath quoted from Mr Burley's submissions to the Federal Court in the Soul Pattinson case (supra). These were to the effect that the correct construction of s 98(3) of the Act is that the Secretary is under an obligation to exercise his or her discretion and make a decision, even though the duty to do so is expressed in terms that the Secretary "may" cancel an approval (Soul Pattinson case, supra, 438). Further, that discretion should be exercised in favour of cancellation where pharmaceutical benefits are no longer being distributed (Soul Pattinson case, supra, 439-440).
In Soul Pattinson (supra) counsel for the current Applicant recognised the priority to be accorded to supply of pharmaceutical benefits. Mr Gath expanded on this to explain the underpinnings of Part VII of the Act.

Section 84 of the Act defines "approved pharmacist" as a person for the time being approved, or deemed to be approved, under s 90. "Approved supplier" is defined as an approved pharmacist, approved medical practitioner or an approved hospital authority. The term used in the Act to describe in the aggregate individuals who are eligible for approval under the Act is "approved supplier". The emphasis is on the concept of supply of benefits.
The title of Division 2 of Part VII is "Supply of Pharmaceutical Benefits". This is the division of the Act containing, amongst other things, ss 90 and 98.
Section 90(3AA) of the Act provides a mechanism whereby a party can gain an approval for a change in arrangements without having to apply to the ACPA. This is where the pharmacy will continue to operate at the same premises and the ownership must change because of death, sale or change in the constitution of the partnership that owned the pharmacy. The supply and incidence of supply of pharmaceutical benefits will be unaffected so the process can be treated concessionally.
Section 90(3AB) of the Act defines "pharmacy" as a business in the course of the carrying on of which pharmaceutical benefits are supplied. Again, the emphasis is on supply of benefits.
The concept of the actual supply of pharmaceutical benefits "is not a threshold through which one passes once on the way to being approved. It is an overarching and continuing and fundamental element of the arrangements that govern approval under the Act." (Mr Gath, transcript, 96.) This was accepted by Beaumont J in the Soul Pattinson case (supra) in his decision and the resultant orders.
The priority accorded actual supply of benefits must significantly influence the way the discretion in s 98(3) is exercised.

Counsel referred also to s 95 of the Act. That section provides for suspension or revocation of approval by the Minister. This can occur only after a formal process. Section 98 by comparison imposes no such requirements. The way is, under the Act, much clearer and more straightforward for the Secretary in cancelling an approval.
Mr Gath, correctly, reiterated that the Ministerial Determination does not bind the Secretary or the Tribunal in decision-making on cancellations of approvals. The Act requires only that the ACPA observe them (s 99K(2) of the Act). It has only an indirect relevance. The conduct of the Applicant is relevant also. His changes of direction are relevant to consider.
Mr Gath submitted that the Applicant had not done all he could to amend his unfortunate circumstances. He could have reopened his shop in Fremantle. He had been offered space in alternative accommodation, not to his liking, in Fremantle and had rejected that. (Mr Burley later objected that Mr Da Rui had been effectively ousted from the Fremantle shopping centre in question (T10, folio 25).) There may also, said Mr Gath, have been any number of other locations in the near community.
While there was no evidence that by holding onto but not using his approval number Mr Da Rui was adversely affecting the prospects of a third party obtaining an approval number, the possibility that this could occur is a relevant consideration.
Mr Gath said that Mr Da Rui had had a "fair go". This was especially so given that the HIC does not usually permit a suspension merely because of economic factors. There have been heavy commercial factors at play throughout this application. The contest was between the Applicant's private interest in continuing to search for a suitable opportunity to effect a sale acceptable to him and the public interest in ensuring the ongoing supply of pharmaceuticals in an area where it has been deemed appropriate for that supply to occur and to provide a reasonable opportunity for others to do what he now considers he no longer wishes to do
Other documentary evidence
In addition to the Section 37 Statement a number of other documents were made available to the Tribunal.
Exhibit R1 was the Applications Handbook July 2000-June 2002 published by the ACPA. This booklet assists applicants for approval numbers in making their applications. It tells them how to put an application together, depending on the type of approval being sought. The type of approval will mirror one of the approval types listed in the Ministerial Determination in force. The booklet details how the approvals process works. The Tribunal treated this as background information. It is not a policy document.
Exhibit R2 was the Third Community Pharmacy Agreement between the Commonwealth of Australia and the Pharmacy Guild of Australia of July 2000 (the Third Agreement). Its purpose in these proceedings has been canvassed already in these reasons. However, it may be worthwhile to identify some pertinent clauses not previously mentioned. The Third Agreement is said in the preamble to the part related to the community pharmacy network (clause 21) to build on earlier agreements taking into account the intention of the Competition Policy Review of Pharmacy. Part 2 also foreshadows changes to the detail of the administration and policy associated with relocations (clause 21.3). It must be said, however that, apart from a desire for clarification of the definition of a large shopping centre, the items listed would not appear to apply to Mr Da Rui's situation.
Exhibit R4 was a circular dated 11 June 2000 to members of the Pharmacy Guild of Australia written by its National President to brief members about the Third Agreement.
A controversial document, marked MFI 1, was tendered by the Applicant. It was a statement by Ms Mihulka dated 2 November 2000 containing a chronology of events affecting the Applicant but including material about the treatment accorded other pharmacists whose approvals had been suspended. The purpose of the document was partly to suggest that the HIC delegate in Western Australia had taken a less generous approach in cancelling Mr Da Rui's approval. The Respondent objected to this document because it had been provided so late as to allow the Respondent inadequate opportunity to check the facts alleged within it and to prepare a response. It was suggested that the hearing would have to be adjourned to allow the Respondent to consider the contents of the document. However, the Applicant agreed to delete references in the document to other similar cases and the document was accepted in evidence as regards uncontroversial issues of chronology. The deleted portions were all of paragraphs 12, 13 and 26 and the final sentence of each of paragraphs 14 and 15. The remaining material mainly relates to Ms Mihulka's discussions with the ACPA about progress in having the Ministerial Determination amended to deal with pharmacists in Mr Da Rui's unenviable position. The Tribunal in its deliberations has given no weight to the deleted portions.
Findings on material questions of fact and the evidence on which those facts have been found

The issues in this case are defined by s 98(3) of the Act. A simple provision, it reads:
"Where the Secretary is satisfied that an approved pharmacist is not carrying on business as a pharmacist at premises in respect of which the pharmacist is approved, the Secretary may, by notice in writing to the pharmacist, cancel the approval of the pharmacist under section 90."

In the present case all the requirements appear to have been met:

1. Mr Da Rui was an approved pharmacist in July 1999.
2. Mr Da Rui was not carrying on business as a pharmacist in July 1999.
3.Mr Da Rui was not carrying on that business at premises that had been approved.
4.The Secretary, through a delegate located in the HIC, gave written notice to Mr Da Rui cancelling his approval on 30 July 1999.

The only issue is whether the Secretary's discretion, exercised against Mr Da Rui in this case, should have been so exercised. Was the decision to cancel Mr Da Rui's approval number the correct or preferable decision?
The Tribunal appreciated the clear and comprehensive arguments put by both counsel and found them very helpful. Both counsel looked to see what indicators exist to assist the Secretary in making a decision to cancel an approval. Several were considered.
One was the Act itself. The Tribunal found Mr Gath's arguments that the Act accords considerable priority to ensuring the actual supply and provision of pharmaceutical benefits convincing. The Tribunal agrees with the Respondent that this is a value rightly accorded considerable weight by decision-makers. These indicators, springing from the Act itself, are clearly highly relevant as factors in decision making.
Another was the Ministerial Determination in its various iterations (Exhibits R3, R5 and R6). Counsel both agreed that the Ministerial Determinations bind only the ACPA and do not bind the Secretary in exercising the cancellation power. This is clearly correct from a literal reading of the Act. Likewise, although the Act prohibits the Secretary from granting an approval where the ACPA opposes the grant, there is nothing in the Act to accord the ACPA any role in a decision to cancel an approval. There is, however, material in the Ministerial Determination that relates to grant of approvals where a suspended approval is connected to the application for a grant. The parties agreed that this material may be relevant to demonstrate general government policy, given that the determination is delegated legislation promulgated by the Minister.
Another consisted of internal guidelines issued by the HIC to assist delegates making decisions on suspension of approvals (Exhibits R7 and R8). As documents dealing with a confined subject matter these have less utility than the Ministerial Determination. Also, they are not documents issued with the authority of the Minister. Their weight, in accordance with the principles laid down in the Drake case (supra) and Drake (No 2) case (supra), is thereby reduced.
This returns the Tribunal to a process of weighing the competing arguments about the desirability of the cancellation decision on its merits. The case for the Respondent was that the decision was the preferable decision because of the importance placed on the actual supply of pharmaceutical benefits by a pharmacist approved to supply those benefits. In the instant case, while it may have been appropriate to permit the Applicant some leeway in re-establishing his business, the time he was taking to achieve this had become unreasonable. The Respondent initially suspended Mr Da Rui's application number on 7 May 1998 (T11). Mr Da Rui required further periods of suspension that took his total period to almost 15 months by the time the cancellation took effect on 30 July 1999 (T3). The Respondent argues in effect that this is an excessive period for an approved pharmacist to be not supplying pharmaceutical benefits. Not only is this so on the basis of the need to ensure that benefits be supplied, it is way in excess of the six months and possible 12 months maximum periods of suspension contemplated in such policy documents as Exhibits R7 and R8. The Respondent also argues that Mr Da Rui could have taken steps to find alternative accommodation for his business, either in Fremantle or elsewhere near there.
For the Applicant the argument is that there is support for protection of the interests of holders of current approvals in such sources as the Soul Pattinson case (supra) and Exhibit R3. It is also the case that as of February 1999, only nine months after Mr Da Rui was first suspended, the chance of being granted an approval was closed to him because the ACPA believed it could not recommend in favour of an applicant not currently supplying benefits. The ACPA also said that it could not recommend an approval for an applicant whose application was contingent on cancellation of an existing approval held by another pharmacist where that other pharmacist's approval number was suspended. The delegated legislation had been altered in 1999 to resolve this problem.
The Tribunal has concluded that it should give considerable weight to the arguments put by the Respondent in this matter. As was said above, the legislation is of prime importance in indicating the policy that should be administered. The Respondent successfully argued that the legislation places a premium on ensuring that pharmaceutical benefits are actually supplied once a pharmacist has been approved to supply those benefits from a particular premises.
However, the Tribunal has also to consider the particular position of the Applicant. The Tribunal notes Mr Gath's argument for the Respondent that Mr Da Rui could have reopened in Fremantle at the shopping complex where he had earlier carried on business. He also suggested that Mr Da Rui could have looked at reopening elsewhere near Fremantle if he could not, or did not, want to reopen in his former location. Document T10 is relevant here. In a letter to the Respondent dated 7 May 1998 (T10, folio 22) Ms Mihulka wrote:
"[Mr Da Rui] has been on a monthly tenancy [in Fremantle] for sometime and on 6 April 1989 [this should read 1998] he was informed by B S Property Pty Ltd that he would be required to quit the premises and relocate into a Newsagency in this centre. He has no desire to move into the Newsagency as he will be relocating within the next 3 to 4 months as already stated. This morning he has been notified by the owners that he is to quit by close of business today unless he signs a one year lease for the Newsagency site."

In T10 at folios 24-25 there is a letter from Mileway Enterprises Pty Ltd dated 6 May 1998 along the lines suggested by Ms Mihulka. That letter proposed that Mr Da Rui stay where he was until 30 May 1998 and then assume half of the newsagency tenancy. The lease was to be executed by 15 May 1998. It was said to be open to Mr Da Rui to seek to take a separate lease over the other half of the former newsagency premises if he wanted to do so. The offer was open only until 5.00 pm on 7 May 1998. In view of this situation the Tribunal considers that the Respondent's second argument is weaker than its first.
It does appear from Ms Mihulka's letter that Mr Da Rui had decided to sever his connection with the Fremantle location regardless of the intentions of his Fremantle lessors. As Ms Mihulka says, he had already resolved to relocate. The offer made by the lessors in Fremantle was both unacceptable in itself but also unattractive because of Mr Da Rui's desire to relocate in any event.
The Forrestfield option appeared only potentially viable because the number of leased shops in that centre was too low for it to qualify as a large shopping centre. Mr Da Rui worked with the developers at Forrestfield in an attempt to have the number of shops increased (T12, T14).
Later in 1998 he pursued the other option of transferring his approval number to NSW. According to evidence in paragraph 7 of MFI 1 he also investigated taking other premises as part of a redevelopment in Fremantle in the latter part of 1998. These premises were within 600 metres of his original Fremantle premises. The development did not proceed, however. Despite that, Ms Mihulka submitted to the ACPA, on 29 June 1999, an application for Mr Da Rui to relocate 600 metres from the original Fremantle site (T30). It is unclear whether this is the site that was earlier dropped from consideration. Presumably that application was able to be considered by the ACPA in accordance with the Ministerial Determination in its amended form on or after 17 September 1999, although, given that Mr Da Rui's approval was cancelled on 30 July 1999, it may have had to be considered as a new s 90 approval under paragraph 5 of the Ministerial Determination. The Tribunal is unaware of the fate of any such application.
Thus, it seems to the Tribunal that Mr Da Rui did a reasonable amount to pursue relocation. He might have been expected to do more in the way of looking feverishly for alternative locations had he received earlier warning of the likelihood that the transfer to NSW would be rejected by the ACPA. However, it seems that he had no reason to expect that that application would not be supported.
Having arrived at that point the Tribunal finds that it prefers the arguments of the Applicant. He had acted reasonably to pursue his goal of relocation up to February 1999. In making this finding the Tribunal disagrees with the Respondent's submission that Mr Da Rui did too little to try and achieve a reopening of his business. The Tribunal notes, as Mr Burley pressed it to do, that extensions up to that time had been granted to Mr Da Rui. This is less important, in the Tribunal's view, than the evidence of positive steps Mr Da Rui took in that period to pursue relocation. That is because Mr Burley's argument relates to considerations of the time taken to finalise plans for relocation. While relevant considerations, in the Tribunal's view they are less relevant than consideration of the positive steps taken, and being taken, to achieve relocation and recommence supplying pharmaceutical benefits for the sorts of reasons put by Mr Gath.
The Tribunal accepts the logical proposition put by Mr Burley that after the ACPA decision of 25 February 1999 the Applicant had lost any standing to seek approval to relocate. His only way out was to try and retain his approval number, albeit in a suspended state, until the Ministerial Determination was amended. The Applicant's correspondence with the Respondent as shown in T29 and T37 is evidence that this was attempted. After amendment of the Ministerial Determination any application the Applicant made to the ACPA would very likely be open to consideration on its merits despite his status as a pharmacist holding a suspended approval number. There was considerable evidence that the determination would be amended as Mr Da Rui hoped it would. In the event it was so amended as Exhibits R3 and R6 demonstrate.
It should go without saying that the Tribunal's preference in this case for the arguments of the Applicant results from the particular merits of this Applicant's case. In another application it is perfectly possible that the Respondent could have the better of the argument.
Conclusion
The Tribunal has decided that it would have been preferable for the HIC delegate in this case to have permitted Mr Da Rui's approval number to remain suspended for an additional period rather than cancel it as occurred on 30 July 1999. There was discussion at the hearing about the complexities involved in framing the terms of a decision in the event that the Applicant was successful. The Tribunal has given this matter much consideration and has concluded that it should make orders designed to put the Applicant as far as possible into the position he would have occupied had the decision under review not been to cancel his approval.
This involves the following considerations:

The decision to cancel the Applicant's licence was made on 30 July 1999 and was immediately effective.
As at 30 July 1999, according to Ms Mihulka's statement in MFI 1 and her letter in T37 (which said that she was informed by the ACPA that at the worst the Minister would sign the new determination within six weeks of 22 July 1999), there was a considerable amount known about the progress of the amending determination through the bureaucratic process, and a considerable expectation that signature would occur within a few months.
A Ministerial Determination was signed and effective on 17 September 1999 which was drafted so as to allow a relocation by an applicant such as Mr Da Rui to be considered by the ACPA on its merits.
Had the HIC delegate made one or more decision or decisions to extend Mr Da Rui's suspension for a reasonable period of say three months, Mr Da Rui would have been able to apply to the ACPA for it to consider his relocation application.
As said above, it is unclear whether Mr Da Rui has returned to the ACPA, perhaps to seek a fresh approval under s 90(1) of the Act. However, assuming that he has not, it would be preferable that he be now enabled to apply to the ACPA to have his relocation proposal assessed.

The Tribunal has therefore attempted to craft a decision that will bring about that result. The decision:
1. will set aside the decision under review, and
2.will substitute for the decision so set aside a decision that suspends Mr Da Rui's application number until the day that falls three months after the date of this decision; and
3.will be expressed to operate on condition that Mr Da Rui has not in the meantime made a successful application to the ACPA for approval under s 90(1) of the Act.
A period of three months from the date of the decision has been selected for the duration of the suspension because that should give the Applicant ample opportunity to apply to the ACPA and for it to arrive at a decision to recommend or reject his application. Should this be incorrect and should further extensions be necessary it will be necessary for Mr Da Rui to apply to the HIC in the usual way.
The condition has been inserted because, if Mr Da Rui has successfully been approved under s 90(1), he will not need to seek a relocation at all or, if he still desires to relocate, he could do so as a pharmacist holding a current approval number. The decision would then be to set aside the decision under review and replace it with nothing. The cancellation would operate from close of business 30 July 1999 because there would be no decision in place to extend the suspension beyond that date.
Decision
The decision of the Tribunal is:
1.        The decision under review is set aside.
2.In substitution for that decision, if the Applicant is not at the date of this decision an approved pharmacist under s 90(1) of the National Health Act 1953, the Applicant is granted an extension of approval number 50109H from the time when the decision under review took effect to the close of business on the day that falls three calendar months after the date of this decision.
I certify that the 120 preceding paragraphs are a true copy of the reasons for the decision herein of Michael Sassella, Senior Member
Signed:         James Enderbury           .....................................................................................
  Associate
Date of Hearing  6 November 2000
Date of Decision  23 March 2001
Counsel for the Applicant        Stephen Burley
Representative for the Applicant   Ann Mihulka & Associates
Counsel for the Respondent    Shaun Gath
Solicitor for the Respondent    HIC Legal Services Unit