Dib Elhelwe and Australian Community Pharmacy Authority Robert Harrison OTHER PARTY David Tich OTHER PARTY
[2015] AATA 219
•14 April 2015
[2015] AATA 219
Division GENERAL ADMINISTRATIVE DIVISION File Number(s)
2014/4185
Re
Dib Elhelwe
APPLICANT
And
Australian Community Pharmacy Authority
RESPONDENT
Robert Harrison
OTHER PARTY
David Tich
OTHER PARTY
Decision
Tribunal Deputy President J W Constance
Date 14 April 2015 Place Sydney The recommendation of the Australian Community Pharmacy Authority, that Mr Elhelwe’s application to supply pharmaceutical benefits from particular premises not be approved, is affirmed.
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Deputy President J W Constance
Catchwords
PHARMACISTS – application to supply pharmaceutical benefits from particular premises – small shopping centre – whether supermarket with gross leasable area of 2,500 square metres – construction of supermarket – meaning of market – decision affirmed
Legislation
National Health Act 1953 (Cth) ss 90, 99K
National Health (Australian Community Pharmacy Authority Rules) Determination 2011National Health (Australian Community Pharmacy Authority Rules) Determination 2006
Cases
Australian Hotels Association (Tasmanian Branch) v Licensing Board [2006] TASSC 91
Douglas Shire Council and Another v Fabcot Pty Ltd and Others (1999)103 LGERA 195
Fabcot Pty Ltd v Douglas Shire Council [1999] QPELR 124
Issa and Australian Community Pharmacy Authority and Others [2012] AATA 374
Maryland Development Co Pty Ltd v Penrith City Council [2002] NSWLEC 135
Shi v Migration Agents Registration Authority (2008) 235 CLR 286Walkerden v Wodonga Pharmacy Pty Ltd [2015] FCA 273
Secondary Materials
Australian Competition and Consumer Commission, Report of the ACCC inquiry into the competitiveness of retail prices for standard groceries (July 2008)
REASONS FOR DECISION
Deputy President J W Constance
introduction
In May 2014 Mr Elhelwe lodged an application under the National Health Act 1953 (Cth) for approval to supply pharmaceutical benefits from premises in a shopping centre in Casula, New South Wales.
In accordance with procedures set out in the Act, the application was referred to the Australian Community Pharmacy Authority. The role of the Authority is to recommend to the Secretary of the Department of Health whether an application to supply pharmaceutical benefits should, or should not, be approved.
In July 2014, the Authority recommended to the Secretary that Mr Elhelwe’s application not be approved.
Mr Elhelwe has applied to this Tribunal to review the Authority’s decision. For the reasons which follow, the decision under review will be affirmed.
the legislative scheme
Applications for approval to supply pharmaceutical benefits are determined by the Secretary of the Department of Health under section 90 of the National Health Act 1953. Subject to a few limited exceptions, an application must be referred to the Australian Community Pharmacy Authority for a recommendation. Subsection 90(3B) states:
(3B) An approval may be granted under this section in respect of an application that has been referred to the Authority under subsection (3A) or (3AF) 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.
In making its recommendation, section 99K of the Act provides that the Authority must comply with relevant rules determined by the Minister. These are relevantly contained in the National Health (Australian Community Pharmacy Authority Rules) Determination 2011.
Australian Community Pharmacy Authority Rules
The Authority recommended that Mr Elhelwe’s application not be approved on the basis that Item 133 and Item 211 of the Australian Community Pharmacy Authority Rules were not satisfied.
Section 10 of the Rules provides, in part:
The Authority must recommend that an applicant be approved under section 90 of the Act in relation to particular premises if:
……
(b) for any other application:
(i)the application states that it is one of the kinds mentioned in column 2 of an item in Part 2 of Schedule 1: and
(ii)all the requirements set out in column 3 of that item are met; and
(iii)all the requirements set out in Schedule 2 are met.
Mr Elhelwe's application is to be considered under subsection 10(b).
Section 11 of the Rules provides:
The Authority must recommend that an applicant not be approved under section 90 of the Act in relation to particular premises if a requirement, under paragraph 10(a) or (b), that applies in relation to the application is not met.
Schedule 1 Part 2 provides in part:
Item Kind of Application Requirements
133 New pharmacy in a 1. The proposed premises are in a small
facility (small shopping shopping centre.
2. The proposed premises are at least centre) 500m, in a straight line, from the nearest approved premises.
3. There are no approved premises in
the small shopping centre.
Section 5 of the Rules provides a number of definitions, including the following:
shopping centre means a group of shops and associated facilities that is under single management.
small shopping centre means a shopping centre that:
(a) has a gross leasable area of at least 5 000m2; and
(b) contains a supermarket that occupies a gross leasable area of at least 2 500 m2; and
(c) contains at least 15 other commercial establishments; and
(d) has customer parking facilities.
supermarket means a retail store or market the primary business of which is the sale of a range of food, beverages, groceries and other domestic goods.
In his application for approval, Mr Elhelwe stated that “I am applying under rule 133 – New pharmacy in a facility (small shopping centre).”[1]
[1] Exhibit A3
the issue for determination
Several issues were considered in argument, the first of which was whether Mr Elhelwe's application met the first requirement of Item 133 that “the proposed premises are in a small shopping centre”. I have decided that the application does not meet this requirement. It is therefore unnecessary to consider the further issues.
The Authority argued that the application did not meet the requirements of item 133 as the shopping centre in which the proposed premises are located does not contain a supermarket. It was argued further that even if it does, the supermarket does not occupy a gross leasable area of at least 2,500 sq. meters.
The issues for determination are as follows.
(1) Does the shopping centre in which the proposed premises are located contain a supermarket?
(2) If so, does the supermarket contain a gross leasable area of at least 2,500 sq. meters?
evidence and findings of fact
The application of section 9 of the Rules
In determining the relevant facts in this matter it is necessary to consider section 9 of the Rules, which provides:
The Authority may consider information provided by an applicant only if:
(a) the information was given at the time the application was made; or
(b) the Authority requested the information.
The only oral evidence given at the hearing was by Mr Kotzmanek, the sole director of the company which owns and manages the shopping centre.
Some of the evidence given was not information which was provided at the time the application was made. However, I decided that it was appropriate that I request the additional information to clarify the information which had been given.
In Issa and Australian Community Pharmacy Authority and Others,[2] Justice Logan considered the application of this section:
I do not read s 9, as the other parties would contend, as imposing what one might term an “evidential straitjacket” on the applicant, confining the applicant in the review proceeding in the Tribunal to that which the applicant gave at the time of the application or that which the Authority requested of the applicant prior to making its decision. Such a construction would be completely at odds with the merits review function consigned to the Tribunal. The Tribunal’s role is to consider the matter afresh, not just to consider in some truncated way making a decision on the merits based on that which was before the primary decision maker.
That said, s 9 has to be given some meaning, and that meaning in its application to the Tribunal does, in my opinion, mean that an applicant does not have an unrestricted ability to introduce on a review hearing material that was not in the initial application. ...
...
... There can be no hard and fast rule as to whether, if at all, in relation to the position as at that time, such a request ought to be made by the Tribunal. Doubtless, it will be relevant as to whether, having regard to all of the material before the Authority, there is a factual controversy, about whether, as at that time, a particular criterion was met, and if so, the nature of that controversy. ...
In other words, it may be in a particular case that the Tribunal would form the view that an application devoid of supporting material ought to remain in that form with all the attendant consequences. On the other hand, it may be that in order to review the position as at the time of the application as well as at the time of consideration, that the only way of reviewing on the merits the position as at the time of the application, having regard to a controversy evident at Authority decision stage, is to request the applicant to furnish further information and then also to permit further information to be provided by other interested parties or, perhaps, the Authority itself.
[2] [2012] AATA 374 at paras 31-34.
In the circumstances of this case, particularly as the occupation of the area said to form the supermarket has changed, I consider that it is appropriate that further information be sought.
Facts
Unless stated otherwise the following findings of fact are based on the evidence of Mr Kotzmanek.
The shopping centre consists of 20 separate units, excluding office suites. The units are contained in five separate buildings separated by 222 car parking spaces provided for the sole use of customers and tenants. The entire site has an area of approximately 21,000 sq. meters and the buildings occupy approximately 10,200 sq. meters.
The list of tenants provided by Mr Kotzmanek[3] is as follows:
[3] Exhibit A4.
Bulky Goods/Retail
Unit 1 Unit 1 The Wattyl (Paint) Group
Unit 6 Unit 6 Aussie Lounges
Retail Food/Supermarket
Unit 3 Casula Fruitland
Unit 4 HD Lucky- Retail Butcher, Deli, Fresh Chicken and Frozen Seafood
Unit 5A Chambers Cellars (Retail Liquor Outlet)
Unit 10 Shakuns Indian Mart
Unit 12B Retail Vitamin Store
Unit 13 Sara Lee Australia- Retail Outlet
Retail Other
Unit 2 Just Lights- Retail lights
Unit 7 and 17 Genesis Gymnasium
Unit 8 Beauty Salon
Unit 9 Sandy’s on Pine Cafe
Unit 12A Pasta Italia- Retail sale of pasta/Restaurant
Unit 16 Oporto
Unit 15 Perfect Catch Seafood & Grill – Fish &Chips/Milk Bar
Other
Unit 11A The Crossroads Christian Centre (Church)
Medical
Unit 12 C South West Kids Clinic
Unit18 Suite 3 Chatabout Speech Pathology Services
Unit 18 Suite 5 & 6 Northcott Disability Services
Unit 18 Suit 7 Physio Essentials
Educational
Unit 18 Suite 4 Kumon
Offices
Unit 18 Suite 1 & 2 H & R Block
At the time Mr Elhelwe lodged his application in May 2014, the tenant of unit 3 was operating a greengrocery. When Mr Kotzmanek gave evidence at the hearing, unit 3 was not leased, however he was negotiating with a prospective tenant who would sell fruit and vegetables and operate a salad bar and a hot bread shop.
Further, at the date of the hearing the businesses in unit 4 (the butchers shop) and unit 5A (the liquor store) were not operating. The premises in which these businesses are to operate were severely damaged by fire in June 2014. The businesses are expected to commence trading by the end of April 2015.
When it opens in April 2015, the butcher’s shop in unit 4 is expected to sell meat, delicatessen items, fresh chicken and frozen seafood. The business operated in unit 5A will be a retail liquor outlet.
The Indian Mart (unit 10) presently sells groceries from the Pacific Islands, India and Asia. It is a relatively small store occupying 79 sq. meters. In comparison the butcher’s shop occupied 956 sq. meters.
The Retail Vitamin Store (unit 12B) sells vitamins and some products associated with gymnasiums. In unit 13 Sara Lee Australia operates a retail outlet selling cakes and ice- cream products.
The last mentioned three businesses are presently operating, although it is expected that the tenant in unit 13 may change in the near future. It is expected that it will continue to sell similar products. Mr Kotzmanek was unable to be more precise as to the merchandise sold in the various shops. I formed the view that he had no detailed knowledge of the range of merchandise sold in any of the stores referred to.
Consideration
Issue 1: Does the shopping centre contain a supermarket as defined in section 5 of the Rules?
Mr Elhelwe argues that the businesses conducted in units 3, 4, 5A 10 12B and 13 together form a supermarket as defined. These units are outlined in bold on the plan of the shopping centre[4] which is schedule 1 to these reasons.
[4] Exhibit A1.
The businesses which presently operate out of these units sell a range of Indian groceries, vitamins and “some products associated with gymnasiums” and cakes and ice-cream products. The businesses not operating at present will sell fruit and vegetables, meat, chicken, frozen fish and liquor.
Mr Elhelwe argues that as the definition of supermarket refers to “a retail store or market” [emphasis added], a supermarket can be comprised of six separate businesses operating from separately leased premises in the one shopping centre, although not all in the same building.
The Rules are registered as a legislative instrument and therefore must be construed accordingly.[5] Construction must begin with the text. As stated by the High Court in Australian Education Union v Department of Education and Children’s Services:
The process of construction begins with a consideration of the ordinary and grammatical meaning of the words of the provision having regard to their context and legislative purpose.
[5] Legislative Instruments Act 2003 (Cth) ss 6, 13,
The inclusion of the word “market” in the definition is significant. The common understanding of a supermarket is that it is found within a store, being an area contained within walls, ceiling and shopfront. The additional words upon which Mr Elhelwe relies must therefore have some meaning. All the words used by Parliament must be interpreted. In my view, the inclusion of the words “or market”, read in context as an alternative to a “store”, suggest that a supermarket may exist outside the usual concept of a store. This could encompass a series of stalls in an open area within a large shopping centre.
It is not necessary that I decide upon an exhaustive list of the type of facilities which are included by these words. I do not intend to attempt to do so. What I have to determine is whether the group of shops proposed by Mr Elhelwe and the businesses conducted within them, come within the definition of supermarket.
The meaning of “market”
As noted above, the use of the term market takes the definition of a supermarket beyond what would ordinarily be understood to constitute a supermarket (ie. that contained within a store). Beyond this, a precise formulation of the term “market” is difficult.
In ascertaining the ordinary meaning of a word, it is useful to consider the dictionary. The Macquarie Dictionary provides several definitions of “market”. The relevant definitions are:
1. a meeting of people for selling and buying.
2. the assemblage of people at such a meeting.
3. an open space or a covered building where such meetings are held, especially for the sale of food, etc.
4. a store for the sale of food.
The first three of the above definitions imply that those involved in the market come together for the purpose of trading. This is consistent with market being the alternative form of supermarket in the definition i.e. opposed to that contained within a store. The fourth definition provided by the Macquarie Dictionary encompasses the usual form of supermarket.
The group of 6 stores which Mr Elhelwe maintains form a supermarket in this case have nothing in common other than that they are located in the same shopping centre. Only three of the six are adjacent to each other. The remaining three are located in two separate buildings. Each of the six is operated as a completely separate business, selling distinct merchandise. There is no evidence of a coming together as implied by the various definitions to which I have referred.
The development of the Rules
It is instructive to consider the development of the Rules so far as they relate to the determination of the location of a pharmacy from which it is proposed to provide pharmaceutical benefits.
In the National Health (Australian Community Pharmacy Authority Rules) Determination 2006 the requirements which had to be met for the approval of a new pharmacy (general) included that “the resident population of the catchment area for the proposed premises is, for most of the year, at least 3 000”.[6] The determination of the catchment area for particular premises was often difficult. A factor which was commonly taken into account was whether there was a supermarket in the immediate vicinity of the proposed premises. This was taken as an indicator that a significant number of people would come to the area in which the supermarket and the proposed premises were located.
[6] Schedule 1 Part 2.
As can be seen from the provisions of the current Rules, the concept of a catchment area has been abandoned. In its place is the requirement, in relation to a new pharmacy in a facility (small shopping centre), that there be a supermarket. It is clear that in replacing the requirement for a catchment area of a specified size by the requirement that there be a supermarket, the Minister has relied on its presence to give some assurance that there be a sufficient customer base for the new pharmacy to be viable.
The supermarket is central in the determination of the locality of pharmacies providing pharmaceutical benefits. It is the only specific type of business which must be shown to exist in the shopping centre in which the proposed premises are located. There is no reason to infer that when the current Rules were drafted the Minister intended that a supermarket could be composed of six independently operating businesses within a particular shopping centre.
Judicial interpretations
As the word supermarket is a common expression and one in everyday use, in interpreting the words used in the definition it is also of assistance to consider how the Courts have interpreted the word, albeit in other jurisdictions. I am indebted to Counsel for the Respondent in referring me to the following judgments.
In Fabcot Pty Ltd v Douglas Shire Council[7] the Planning and Environment Court of Queensland said:
The concept of a shopping centre does not necessarily include the presence of a supermarket. A supermarket is a particular type of shop. Neither the definitions in the present scheme, authority, other usages in the scheme, or common experience, compel the conclusion that the presence of a supermarket is essential to the existence of a shopping centre. [Emphasis added].
This decision was overturned on appeal on an unrelated issue.
[7] [1999] QPELR 124 at p.126.
Again, the Court was dealing with planning laws in Douglas Shire Council and Another v Fabcot Pty Ltd and Others [8] when the Supreme Court of Queensland said:
on the ordinary meaning of the words, a supermarket is something that would be taken as a normal and acceptable unit in a shopping centre, and unless such a development is excluded on the proper construction of the scheme as a whole, a supermarket would be a permitted development .[Emphasis added].
[8] (1999)103 LGERA 195 at para.27.
The Land and Environment Court of New South Wales referred to a supermarket as follows: [9]
Where a large “general store” sells a general range of merchandise, including foodstuffs and homewares, it may be referred to colloquially as a supermarket. “Supermarket” is not a planning term; labelling the proposed development as a “supermarket” is irrelevant; a supermarket is a shop, and may be a “general store”. [Emphasis added].
[9] Maryland Development Co Pty Ltd v Penrith City Council [2002] NSWLEC 135 at para.117.
In interpreting the Liquor Licensing Act 1990 (Tas) the Full Court of the Supreme Court of Tasmania considered the word “supermarket” as follows” [10]
The Act does not define “supermarket”. The meaning ascribed to that noun by the Macquarie dictionary, 2nd edn,, is:
“A large, usu [sic], self-service, retail store or market selling food and other domestic goods.”
I find it instructive that the activity that identifies a large store or market as a supermarket is the retail sale of food and other domestic goods; this is a core, in fact defining, activity of the supermarket as without it a premises could not be so described. Obviously enough, many incidental activities undertaken in the course of operating a supermarket such as employing staff, transporting stock, banking, providing credit facilities, advertising, providing parking facilities, maintaining including the premises in obtaining power, light and water to the premises. Many businesses beside supermarkets undertake incidental activities such as these. [Emphasis added].
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[10] Australian Hotels Association (Tasmanian Branch) v Licensing Board [2006] TASSC 91 at para.25.
These decisions were given in relation to laws regarding the granting of permission to undertake certain activities from specified premises, not unlike the law applicable in this matter. In each of these decisions the Court refers to the operation of a supermarket as a unit or operating on discrete premises. There is nothing to suggest that a supermarket could exist as a combination of separate businesses operating on separate premises, some of which are physically separate and all of which operate behind separate shopfronts.
The Report of the Australian Competition & Consumer Commission inquiry into the competiveness of retail prices for standard groceries July 2008
This report is of assistance in considering the issue in this matter as it contrasts supermarkets with speciality stores as follows:
In addition to rival supermarkets and convenience stores, supermarkets face competition from an array of specialty stores. These include butchers, fishmongers, bakeries, greengrocers, produce markets, pharmacies and Asian grocers. There are approximately 22 000 specialty retail grocery stores operating in Australia.
Specialty stores range from large chains to independently owned and operated stores. Supply methods range from producing products themselves (e.g. bakeries), purchasing direct from suppliers or through wholesalers or markets.
In this case, the stores which Mr Elhelwe argues together form a supermarket, are in fact a group of specialty stores which the report contrasts with the type of store generally regarded as a supermarket.
In taking this report into account, I am mindful of what Mortimer J described in Walkerden v Wodonga Pharmacy Pty Ltd,[11] as the “danger where constructional choices are made by reference to such material rather than to the legislative provision itself”. I have not given the report great weight, although it does support a construction of “supermarket” that excludes that argued for by Mr Elhelwe.
[11] [2015] FCA 273, at para [59].
Conclusion in relation to Issue 1
Having considered the various matters to which I have referred I have come to the conclusion that five or six businesses, operating independently from separate premises in the manner of the nominated businesses, do not come within the definition of a supermarket as defined in the Rules. They do not have a common business and they do not operate from common premises.
In this regard it is to be noted that the definition refers to a retail store or market the primary business of which is as set out. Clearly the Rules contemplate the operation of a single entity when they refer to “the primary business” and, if the supermarket is said to consist of a store, that it be a single store. It cannot be said that each store identified by Mr Elhelwe pursues a single, unified primary business. Each operates independently from the others.
The definition of “small shopping centre” also suggests that the legislative concept of a “supermarket” excludes that argued for by Mr Elhelwe. The definition requires that there be a supermarket with a minimum leasable area and at least 15 other commercial establishments. The term “other” suggests that a supermarket is in itself a commercial establishment. A commercial establishment includes a “shop”, a “bar”, and a “restaurant”, among others. Such references, contained in section 7 of the Rules, suggest that a commercial establishment does not include a conglomeration of a number of disparate shops, which are separately owned and operated.
The six stores advanced by Mr Elhelwe cannot properly be regarded as a supermarket in accordance with the Rules. For these reasons alone, Mr Elhelwe’s application does not satisfy the requirements of item 133 of the Rules.
Issue 2: Does the claimed supermarket have a gross leasable area of at least 2 500 sq. meters?
Although the conclusion I have reached on the first issue makes it unnecessary to consider the second, I will do so briefly. On the facts established by the evidence of Mr Kotzmanek, Mr Elhelwe’s application cannot succeed. This is so, even had I decided that there was a supermarket at the Casula shopping centre.
The application of some of the Rules require determination taking into account the situation as at the time of the initial application for approval. However, there is nothing in the rules with respect to an application for approval in a small shopping centre that requires determination on the facts as they stood as at the date of the application. As stated by their Honours Hayne and Heydon JJ in Shiv Migration Agents Registration Authority:[12]
Unless there is some statutory basis for confining that further material to such as would bear upon circumstances as they existed at the time of the initial decision, the material before the Tribunal will include information about conduct and events that occurred after the decision under review. If there is any such statutory limitation, it would be found in the legislation which empowered the primary decision‑maker to act; there is nothing in the AAT Act which would provide such a limitation.
The Rules under consideration in this matter properly fall to be determined on the basis of the facts presently before the Tribunal. This is consistent with the role of the Tribunal to provide merits review.
[12] (2008) 235 CLR 286, at para [99]; see also Issa and Australian Community Pharmacy Authority and Others [2012] AATA 37, at para[39].
Mr Elhelwe argues that the businesses operating from the nominated units together form a supermarket within the meaning of the Rules. However, on the evidence before me, at present there is no business operating from unit 3 and that unit is not the subject of a lease.
In section 5 of the Rules, gross leasable area for a supermarket means the total floor area excluding loading docks. There is nothing to suggest that the area of any of the six units includes a loading dock.
On the basis of the information in the plan,[13] unit 3 has an area of 1,021 sq. meters. The total area of the six units said to be the premises from which the supermarket operates is 2,782 sq. meters. When the area of unit 3 is deducted from the total there remains only 1,761 sq. meters. This is less than the gross leasable area of 2,500 sq. meters required for a supermarket referred to in the definition of small shopping centre.
[13] Exhibit A1.
decision
The decision under review, being the decision of the Australian Community Pharmacy Authority made 25 July 2014, will be affirmed.
63. I certify that the preceding 62 (sixty -two) paragraphs are a true copy of the reasons for the decision herein of Deputy President J W Constance.
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Associate
Dated 14 April 2015
Date(s) of hearing 23 March 2015 Date final submissions received 23 March 2015 Advocate for the Applicant A Tolic Counsel for the Respondent A Dillon Solicitors for the Respondent B Dean; Australian Government Solicitor Advocate for the Other Parties G Brooks Schedule 1
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