DARNELL and AUSTRALIAN COMMUNITY PHARMACY AUTHORITY
[2011] AATA 382
•3 June 2011
Administrative Appeals Tribunal
DECISION AND REASONS FOR DECISION [2011] AATA 382
ADMINISTRATIVE APPEALS TRIBUNAL )
) No 2010/3957
GENERAL ADMINISTRATIVE DIVISION ) Re ROSS DARNELL Applicant
And
AUSTRALIAN COMMUNITY PHARMACY AUTHORITY
Respondent
DECISION
Tribunal M J Carstairs, Senior Member Date3 June 2011
PlaceBrisbane
Decision The Tribunal affirms the decision under review.
..............................................
Senior Member
HEALTH & COMMUNITY SERVICES – pharmaceutical benefits – approval for supply of pharmaceutical benefits – catchment area – decision under review affirmed
National Health Act 1953 (Cth), ss 90, 99L
Dundson and Australian Community Pharmacy Authority [2011] AATA 82
Elkhishin and Australian Community Pharmacy Authority [2008] AATA 1134
REASONS FOR DECISION
3 June 2011 M J Carstairs, Senior Member 1. Ross Darnell is a pharmacist who has applied for approval to supply pharmaceutical benefits from premises located at a shopping centre called Airport Central adjacent to the Coolangatta Airport on the Gold Coast.
2. To obtain approval, Mr Darnell had to satisfy the requirements of the National Health (Australian Community Pharmacy Authority Rules) Determination 2006 (“the Rules”). The respondent decided that Mr Darnell’s application could not be recommended to the Secretary, Department of Health and Ageing because, despite satisfying other requirements, the catchment area for the proposed pharmacy had a resident population of less than 3000, thereby not satisfying the requirement set out in Item 113(3)(a) of the Rules. Mr Darnell disagrees.
THE LEGISLATIVE SCHEME
3. Pursuant to s 90 of the National Health Act 1953 (Cth) (“the Act”) the Secretary, Department of Health and Ageing may approve a pharmacist for the purposes of supplying pharmaceutical benefits at nominated premises. Applications are referred to the Authority which makes a recommendation to the Secretary whether or not the applicant should be approved in respect of the particular premises. In considering whether or not to make that recommendation the Authority, and the Tribunal on review, must comply with the Rules determined by the Minister for Health and Ageing under s 99L of the Act.
4. Under Item 9 of the Rules, the Authority must recommend that an applicant be approved if the application satisfies the requirements set out in Schedules 1-3 to the Rules. By virtue of Item 10 of the Rules, the Authority must recommend that an applicant not be approved if any of the requirements of Item 9 are not satisfied.
5. It is common ground that in the circumstances of Mr Darnell’s application, Item 113 of Schedule 1 and Item 201 of Schedule 2 specify the requirements to be satisfied. They provide as follows:
Item 113
1.The proposed premises are not in a rural locality.
2.The proposed premises are at least 1.5 km, in a straight line, from the nearest approved premises.
3.The Authority is satisfied that-:
a. The resident population of the catchment area for the proposed premises is, for most of the year, at least 3 000; and
b. The number of prescribing medical practitioners practising in the catchment area for the proposed premises is equivalent to at least 1 full‑time prescribing medical practitioner.
Item 201
The authority is satisfied that:
a.the applicant had, on the date of the application, and has, on the date on which the Authority makes a recommendation in respect of the application, a legal right to occupy the proposed premises; and
b.the proposed premises, on the date of the application and on the date on which the Authority makes a recommendation in respect of the application:
i.Could be used for the operation of a pharmacy under applicable local government and State or Territory laws relating to land development; and
ii.Would be accessible by members of the public at large; and
c.within six months after the date on which the Authority makes a recommendation in respect of the application, the applicant will be able to begin operating a pharmacy at the proposed premises; and
d.the proposed premises are not directly accessible by the public from within a supermarket.
6. The parties agree now that all requirements of Item 113 are satisfied, except for item 113(3)(a) relating to the size of the resident population of the catchment area. The claim initially failed on the additional ground that Item 113(3)(b) was not satisfied but there is now no dispute that there is at least one full-time medical practitioner in the catchment area.
7. In past cases, the interpretation of a “catchment area” under the Rules had been the subject of debate. It now seems to be accepted however that earlier expressions of the test can be reconciled with the more recent expressions of the test as set out in Elkhishin and Australian Community Pharmacy Authority [2008] AATA 1134 and Dunsdon and Australian Community Pharmacy Authority [2011] AATA 82 namely:
whether the ordinary resident of an area would regard a particular pharmacy as a reasonable and practical option in all the circumstances.[1]
[1] Elkhishin and Australian Community Pharmacy Authority [2008] AATA 1134 at [22]
The test, it is agreed, is an objective one.
THE PROPOSED PHARMACY
8. Where the proposed pharmacy would be situated, if approved, is in a small shopping area called Airport Central on Eastern Avenue, Bilinga, adjacent to the Gold Coast Airport, at the intersection of Terminal Drive and the Gold Coast Highway. This set of shops and businesses is on the western side of the highway. Airport Central contains a rather mixed occupancy, including takeaway food shops, a fitness centre, surf-wear shop, real estate agency, car rental, and cosmetic surgery, as well as a large floor space occupied by the Australian Federal Police and by Westpac Business Bank. There is also a tavern there, and a service station at the northern end of the complex which sells some food stuffs and household supplies. To the south of the area, Southern Cross University is located. There is ample parking at Airport Central both at the front and rear of the shops, the parking at the rear being divided off by fencing from Airport parking.
9. I had the opportunity to inspect the proposed site and surrounding areas on the first day of the hearing, and took in the features of other nearby shopping centres, in particular, those where other chemists and medical practitioners were situated. These comprised:
· Coolangatta retail and commercial sector, located in the heart of Coolangatta on Griffith St and about 2.1kms away from the proposed pharmacy site. There are presently 4 pharmacies in this area. The “Showcase on the Beach” shopping complex featuring many shops and eateries, a cinema, and an Aldi supermarket also fronts onto Griffith St and has ample off-street parking. On the ocean side of the complex, restaurants feature. There are 14 doctors in the area in 4 medical centres, as well as a practice specialising in skin and travel medicine.[2]
· Tugun Town Centre, north of the proposed pharmacy by about 2.4kms, is situated on the beach side of the Gold Coast Highway, but also readily accessible by an alternative, much quieter road, Golden Four Drive, running parallel to the highway. This is an older area of strip-style shopping with street parking which is adequate to meet the needs of the area. There is a Foodworks and a medical centre which has 5 doctors, and there is one dedicated pharmacy. There is also a “chemmart” which has chemist lines but is not a dedicated pharmacy.
· Centro-Tweed sub-regional centre some 4.6kms south is anchored by a Coles and a Woolworths supermarket, Target, and some 79 speciality shops. It is a modern, vibrant centre, clearly the most attractive and modern of the centres we inspected, containing a medical centre and a large Terry White Chemist, and having over one thousand car parks.
[2] Exhibit R2 p 11
THE CATCHMENT AREA
10. The initial application had been accompanied by a report prepared by Insitu Planning and Design,[3] which ventured the opinion that the entire Gold Coast population was the “catchment” in view of the proximity of the Gold Coast airport with its throughput of local travellers. That contention is not now made. The three reports relied upon by the parties were those of :
· Foresight Partners, whose consultant Mike McCracken has relevant qualifications in geography and market research, as well as twenty eight years’ experience in economic impact assessment, location/site analysis, and commercial feasibility; and
· MacroPlan Australia whose senior consultant James Turnbull has relevant qualifications in commerce and economics and some six years’ experience in retail economics, demographic modelling, and location analysis.
11.The discussion in their three reports was based on data from census collection districts (CCD’s). The parties’ contentions regarding the CCD’s can be conveniently set out as follows.
[3] Document T10
CCD
APPLICANT POPULATION
RESPONDENT POPULATION
3171410 (partial)
130
Nil
3171412
653
653
3171413
351
351
3171414
272
272
3171415
259
259
3171601
357
Nil
3171610
454
Nil
3171611 (partial)
900
Nil
TOTALS
3376
1535
12. So it can readily be seen from this table, that Foresight Partners were presenting a wider base as to the potential catchment area, although it needs to be noted that Mr McCracken proposed that only parts where residents were located close to Airport Central would be included (in CCD 317410 and CCD 3171611).
13. Mr McCracken stated in his report that the catchment was defined based on the location of existing pharmacies, the road network, and any natural barriers to movement. His report took into account factors such as traffic flows, distance to the premises, geographic features and proximity to other services and attractions.
14. Like Mr McCracken, Mr Turnbull acknowledged that catchment areas can overlap but it is relevant to take into account road networks, traffic flows, walkability, co-location with higher order retail facilities and services, and population distribution and its proximity to the proposed pharmacy.
15. Mr Turnbull said that convenience and need will determine retail catchments. With pharmacies, he said, the extent of any local catchment will be determined by proximity, co-location with other retail facilities/services, or co-location with medical facilities. His opinion was that if the premises were not the closest or most convenient option, it would need to be more attractive than the alternatives before it could be suggested that a significant number would gravitate to it. [4] He considered that co-location with, and the breadth of available retail and other services at a particular location would be the most important driver affecting visitation to a pharmacy.
[4] Exhibit R2 at p10
16. Mr Turnbull identified 4 types of pharmacy trips: the initial script filling usually coupled with the doctor’s visit; the convenience purchase based on proximity; the convenience purchase coupled with weekly high order shopping; the convenience purchase coupled with daily working trips. Mr McCracken disputed this categorisation as an oversimplification. He said that there are many kinds of multipurpose trips, such as might occur if going to the gym or taking the kids to school.
17. Mr Turnbull said that it was important to take into account “worker flows”, in the sense that if a natural worker movement takes workers past a particular pharmacy you could reasonably anticipate that a significant percentage would gravitate to that pharmacy. In that regard, he considered that the availability of full- line supermarkets, higher-order retail offerings, and the presence of medical practices at the Coolangatta Business Centre, and also available (to a lesser extent) at the Tugun Business Centre, made each a much more attractive proposition than the proposed location. Mr McCracken said that a useful concept in retail analysis is that of “performance convenience” which addresses not only travel time but transaction time taken to locate car parking and park. Airport Central rated well, in his opinion, because the distance to be travelled from all the CCD’s Mr McCracken would include as part of the catchment was not great; parking at Airport Central was ample.
18. In terms of the 4 CCD’s which Mr Turnbull identified, he gave most prominence to proximity and convenience. As to CCCD 3171413, the proposed pharmacy is situated within it. Most of the CCD was within a walkable 800 m² radius of the proposed pharmacy site. He observed of this CCD that people within it may well do pharmacy shopping on weekly shopping trips elsewhere, or at the time of medical visits elsewhere, but equally, in his opinion, many would naturally gravitate to the proposed site. CCD 3171414 was on the eastern side of the Gold Coast Highway. Like CCD 3171413, a large part of it was within a walkable 800 m² radius.
19. CCD 3171412 spanned both western and eastern sides of the Gold Coast Highway however residents on the western side have a direct connection giving them access to Airport Central along Adina Avenue and Eastern Avenue, without the need to enter onto the Gold Coast Highway. The same could not be said of the part of CCD 3171412 located on the eastern side of the highway. Here, access was across a traffic-lighted intersection traversing the Gold Coast Highway. CCD 3171415 was on the eastern and western side of the highway and included the airport car rental and the university campus.
20. It appears that Mr Turnbull limited his determined catchments to these 4 CCD’s because further north, residents would be drawn to the Tugun business district because of its proximity and convenience as well as the presence of medical facilities and a pharmacy. He limited the boundary of the catchment on the eastern side because the highway here acted as a barrier, and the easy access presented by Golden Four Drive, on the other hand, suggested a natural flow for motor travel straight to the Tugun business district. Mr Turnbull's view, in contrast to that of Mr McCracken, was that for CCD’s further south, where the Gold Coast Highway becomes the Pacific Highway, gravitational effects favoured the numerous retail businesses, medical facilities and pharmacies presented in the shopping centres of the Coolangatta and Tweed areas.
21. Mr McCracken included additional CCD’s that were within a 2.5 to 3 minute drive of the proposed pharmacy.
CONCLUSIONS
22. The dispute here was where the boundaries of the catchment would be drawn.
23. The Pharmacy Location Rules – Applicant’s Handbook[5] sets out as relevant considerations in determining catchments, such matters as traffic flows, proximity to other services and attractions, geographical features, any natural barriers, and distance to the proposed premises. These can be seen as relevant to the test to be applied, of whether “the ordinary resident of an area would regard a particular pharmacy as a reasonable and practical option in all the circumstances”. In Elkhishin, Senior Member McCabe said the focus must be on the choices realistically open to all of the people in a particular area which can be affected by matters such as distance, proximity of other services, availability of parking. However, the Senior Member was clearly not suggesting that the particular set of pre-ascertained factors will be applied in all circumstances.
[5] Document T8 at 139
24. From my site inspection of Airport Central, I would agree with the parties that the businesses there could only be described as an unusual collection of outlets, not well-targeted at satisfying household shopping needs. The two experts used terms such as “higher order retail” about certain desirable businesses for a pharmacy to be co-located with. Neither expert suggested that the tenancies at Airport Central were of that kind. It seemed to me that the existing tenancies did not suggest themselves as useful co-location for a pharmacy, certainly not in the way that would be apparent had there been a medical practice there, or even a dedicated supermarket, where it is recognised that local people would combine pharmacy related shopping in multi-purpose trips.
25. With respect to this aspect, I accept Mr Turnbull's evidence that the existing tenancies at Airport Central would tend to attract the local workforce (there are on Mr McCracken’s figures 1200 workers at the Gold Coast Airport and it operates 16 hours per day), and the passing traffic of visitors or passengers attending the Airport, as well as students at the adjoining University. What was noticeably absent from the tenancies was a supermarket, or a well-stocked local convenience store – something that offered more than the limited range of goods available at the service station. As has been commented in other cases, banks, post offices, and newsagencies can act as a magnet, drawing in customers. Without those kinds of businesses it is unlikely that the proposed pharmacy would attract regular visits from residents in the area.
26. It is also important to note with regard to the population using Airport Central‘s outlets that it is likely to include a significant component of people who are en route to the airport, either taking flights themselves or take passengers there. These people are not necessarily the local residents of the “catchment” contemplated by the Rules. There was no evidence enabling me to ascertain the size of that group but it seems inevitably to be the case, once it is understood that the figures for the number of inbound and outbound travellers at the airport in 2009/2010 was 368,015 (average) monthly.[6] I accept the evidence of Mr Turnbull that with this very large number, the home residence of customers using the facilities at Airport Central would be likely to be highly dispersed.
[6] Document T10 at 157
27. The applicant submitted that the proposed pharmacy admittedly would not do nearly as well as would those in the bigger shopping centres nearby, but this did not detract from the fact the pharmacy would yet serve a purpose. A pharmacy in a location such as this would provide, as he described it, another reasonable option. However, I am not satisfied that this is enough. The evident mix of outlet does not suggest that Airport Central is a shopping centre that caters well for locals. Apart from the 4 CCD’s recognised in Mr Turnbull's analysis and included in the catchment on the basis of proximity, once a person is using a car to travel to a centre, it makes more sense to travel to a centre that has greater drawing power, one that is has supermarkets, medical facilities, and more higher-order shopping than is available at the proposed site.
28. I accept that this area of the Gold Coast is a car-oriented area, where people are used to driving. But it seemed to me also relevant that in the area under review, the Gold Coast Highway dominates, bisecting the CCD’s to the east and west around it. There are traffic-lighted crossings at regular intervals, but the width of, and the general business of traffic on the Highway is a barrier to easy movement, at least for travel that entails stops. Residents in this area would tend to gravitate to the centres such as those at Coolangatta and at Tugun that do not take their access from this busy highway.
29. In terms of accessibility, with regard to the areas to the south-east, which Foresight includes but MacroPlan does not, the network of roads does not suggest that people would gravitate to Airport Central in preference to the Coolangatta and Tweed shopping areas, to the south. There are intersections to be negotiated and the size of the highway and speed of traffic does not make for ease of access. Poor visibility from the road would not promote usage.
30. Taking all matters into account, I accept the respondent’s submission that the people who would visit Airport Central would be a wide group, but chiefly they would not be locals, as the proposed site is not one that suits the regular needs of local people and so does not provide the advantages of co-location. The respondent’s reports, those of MacroPlan, reflected a better balancing of the facts to be considered as set out in the Handbook. Accordingly, I prefer the evidence of Mr Turnbull as to the catchment area in this case. The 4 CCD’s contemplated by Mr Turnbull correctly identify, in my opinion, the catchment here, on the basis of where the ordinary resident would regard a particular pharmacy as a reasonable and practical option. Where the resident population of the catchment is less than 3000, Item 113(3)(a) is not satisfied.
31. I affirm the decision under review.
I certify that the 31 preceding paragraphs are a true copy of the reasons for the decision herein of M J Carstairs, Senior Member
Signed: .....................................................................................
Dominique Mayo, AssociateDate of Hearing 29 March 2011
Date of Decision 3 June 2011
Solicitor for the Applicant Australian Government Solicitor
Solicitor for the Respondent Gadens Lawyers
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