Hala Phcy Pty Ltd and Australian Community Pharmacy Authority - [2022] AATA 2155

Hala Phcy Pty Ltd and Australian Community Pharmacy Authority [2022] AATA 2155 (7 July 2022)
AppID:  Hala Phcy Pty Ltd and Australian Community Pharmacy Authority
Division:GENERAL DIVISION
File Number(s):      2021/8092
Re:Hala Phcy Pty Ltd
APPLICANT

AndAustralian Community Pharmacy Authority
RESPONDENT

AndBourke O’Brien Pharmacies Pty Ltd
OTHER PARTY

DECISION
Tribunal:Deputy President J W Constance
Date:7 July 2022
Place:Sydney

The decision under review, being the decision of the Australian Community Pharmacy Authority made 3 September 2021, is affirmed.
................................[SGD].................................
Deputy President J W Constance
CATCHWORDS
HEALTH – PHARMACISTS – application for approval to supply pharmaceutical benefits – whether there is a supermarket with gross leasable area of 1,000 square metres within prescribed distance of proposed premises – consideration of Pharmacy Authority Rules – construction of the definition of supermarket as defined by the Rules – meaning of "range” of foods, beverages, groceries and other domestic goods – context and purpose of Rules – decision affirmed
LEGISLATION
National Health Act 1953 (Cth)
National Health (Australian Community Pharmacy Authority Rules) Determination 2018 (Cth)
National Health (Australian Community Pharmacy Authority Rules) Determination 2006 (Cth)
CASES
Independent Commission Against Corruption and Cunneen and Others (2015) 256 CLR 1
Issa and Australian Community Pharmacy Authority and Others [2012] AATA 374
Project Blue Sky v Australian Broadcasting Authority (1998) 194 CLR 355
Stonehealth Pty Ltd and ZAA Ventures Pty Ltd as Trustee for ZAA Investment Trust and Australian Community Pharmacy Authority [2020] FCAFC 188
Vincentia MC Pharmacy Pty Ltd v Australian Community Authority [2020] FCAFC 16
Walkerden v Wodonga Pharmacy Pty Ltd [2015] FCA 273
REASONS FOR DECISION
Deputy President J W Constance
7 July 2022
INTRODUCTION

In July 2021 the Applicant lodged an application under the National Health Act 1953 (Cth) for approval to supply pharmaceutical benefits from premises in a shopping centre in Warners Bay, New South Wales.[1]
[1] Exhibit R1 at 173.
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.
On 3 September 2021, the Authority recommended to the Secretary that the Applicant’s application not be approved.[2] The delegate of the Secretary refused the application on 18 October 2021.[3]
[2] Exhibit R1 at 170.
[3] Exhibit R1 at 447.
The Applicant 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 2018 (Cth) (“Australian Community Pharmacy Authority Rules” or “Rules”).
Australian Community Pharmacy Authority Rules
The Authority recommended that the Applicant’s application not be approved on the basis that Item 130b(i) of the Australian Community Pharmacy Authority Rules was not satisfied.
Subsection 10(2) of the Rules provides:
(2) For an application that does not involve the cancellation of an existing approval, the Authority must recommend that an applicant be approved under section 90 of the Act in relation to particular premises if:
(a)the application is of a kind mentioned in column 1 of an item in Part 2 of Schedule 1; and
(b)the following requirements are met in relation to the application:
(i) the requirements in column 2 of that item;
(ii) the requirements in subsection (3).
The Applicant's application is to be considered under subsection 10(2).
Section 11 of the Rules provides, in part:
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 section 10 of this instrument that applies in relation to the application is not met …….
Schedule 1 Part 2 provides in part:

Item Application kind Requirements

130
New pharmacy

(at least 1.5km)

(a)     the proposed premises are at least 1.5 km, in a straight line, from the nearest approved premises; and

(b)     the Authority is satisfied that, at all relevant times, there is, within 500 m, in a straight line, from the proposed premises, either:

(i)       both the equivalent of at least one full-time prescribing medical practitioner and a supermarket that has a gross leasable area of at least 1,000 m2; or

(ii)      a supermarket that has a gross leasable area of at least 2,500 m2

Section 5 of the Rules provides a number of definitions, including the following:
supermarket means a retail store, the primary business of which is the sale of a range of food, beverages, groceries and other domestic goods.
In its application for approval, the Applicant stated that:
On the day of the application and on the day the Authority considers the application, there is, within 500 m in a straight line from the proposed premises:
(i)at least 1 full-time/equivalent doctor (38 hours per week);
and
one supermarket with a total GLA of at least 1,000 m2 (excluding loading docks and car parks): ….
…
Bibina is a supermarket by definition, being a retail store the primary business of which is the sale of a range of food, beverages, groceries and other domestic goods. Bibina stock a full Grocery Line. Details of their product offering can be found at Exhibit R1 at 174 and 334.

THE ISSUE FOR DETERMINATION

The only issue for determination is whether there is a supermarket that has a gross leasable area of at least 1,000 square metres within the prescribed distance from the proposed premises.

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 information provided by the Applicant and taken into evidence at the hearing (other than evidence provided at the time of the application to the Authority) was the following:

(a)a copy of a Product Catalogue published by Bibina on its website on or about 1 February 2022 (exhibit A1).
(b)a series of photographs of products held on the shelves in the store known as Bibina Food Warehouse (Bibina) on 4 February 2022 (exhibit A2).
(c)a series of screenshots of posts on the Bibina Foods Facebook page dated from 9 July 2021 to 2 June 2022 (exhibit A3).

In Issa and Australian Community Pharmacy Authority and Others,[5] 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.
[5] [2012] AATA 374 at paras 31-34.

In the circumstances of this case, particularly as the range of items offered for sale by Bibina is in issue, I considered that it was appropriate that further information be sought.

Prior to the commencement of the hearing, the Applicant had provided to the Tribunal, the Respondent and the Other Party, a copy of a Statutory Declaration made on 4 February 2022 by the Managing Director of the company which operates the Bibina store. Despite a request by the Other Party that the maker of the Statutory Declaration be available for cross-examination at the hearing, I was informed after the hearing commenced that he “declined” to attend.

I was not provided with a satisfactory explanation why the Applicant had not requested a summons be issued to require the Managing Director to attend to give evidence. In these circumstances I refused to take the Statutory Declaration into evidence. The Applicant did not apply for an adjournment of the hearing.

Evidence and Findings of Fact

I am satisfied that the business operating under the name Bibina Food Warehouse[6] is being conducted within 500 metres of the proposed premises. Based on exhibits A1 and A2, I am satisfied also that the business is a store which offers for sale a large number of different items of food, beverages and groceries. These facts are not in dispute.

[6] Exhibit R1 at 369.

Evidence of Mr O’Brien, Pharmacist

Mr O’Brien provided a Statutory Declaration made 28 July 2021[7] and an affidavit sworn 14 April 2022.[8] He did not give evidence at the hearing.

[7] Exhibit R1 at 369-371.

[8] Exhibit OP1.

On 22 July 2021 Mr O’Brien attended the Bibina store. He walked along every aisle in the store and observed the items for sale.

The items Mr O’Brien observed to be available for sale included:

(a)frozen poultry, seafood and vegetables;
(b)cheeses and deli style meats;
(c)unrefrigerated long-life food products;
(d)a small section of cleaning products, many of which were available in bulk.

Mr O’Brien observed that the following products were not available for sale;

(a)fresh (unfrozen) fruit, vegetables, meat, poultry and fish;
(b)fresh bread and all other fresh bakery products;
(c)grocery items such as personal care products (toothbrushes, deodorant, sanitary products, haircare products, moisturisers);
(d)baby products such as nappies, baby wipes, baby foods or topical creams;
(e)stationery products, magazines or toys; electrical products such as batteries;
(f)pest control and gardening products;
(g)pet supplies including pet food.

Mr O’Brien attended the Bibina store again on 8 April 2022. The types of products for sale had not changed from the observations he made on 22 July 2021.[9]

[9] Exhibit OP1.

As Mr O’Brien’s evidence was unchallenged and as it is consistent with other evidence before me, I accept his evidence and find accordingly.

Facebook page published in respect of the Bibina store (exhibit OP3)

The Facebook page is headed:

BIBINA Bibina Foods
SHOP WHERE THE CHEFS SHOP @bibina.foods Speciality Grocery Store

The following appears on the “About” section of the page:

Shop Where The Chefs Shop!
Bibina is a leading premium foods warehouse, open to the public in Warners Bay. We offer a huge range of products from all around the world as well as an extensive distribution service for the hospitality industry.
Bibina’s objective is to supply our customers with a diversified product range of high quality goods at competitive pricing, ensuring guaranteed accountable and efficient service. We are able to supply our customers with an ever increasing range of imported and Australian specialty lines, as well as high demand foodservice dry, perishable and frozen goods.
Bibina has a warehouse at 355 Hillsborough Rd, Warners Bay designated especially for the public. Trading hours are Monday to Friday 8.00am to 5.00pm and Saturdays 8.30am to 4.00pm.
Bibina also services the trade, offering delivery to all local areas of Newcastle, Central Coast and north as far as Port Stephens and Nelson Bay.

Product Catalogue (exhibit A1), Photographs of products (exhibit A2) and Screenshots of posts on the Bibina Foods Facebook page (exhibit A3) and exhibit R1 at T13

I am satisfied these exhibits show that the Bibina store sells many products normally sold in a supermarket and in sizes likely to be purchased by a consumer of those products. I am satisfied also many products for sale are offered in bulk amounts which are more likely to be purchased by businesses in the catering industry, such as restaurants. On the evidence before me I am unable to determine the proportion of the total items offered for sale that are sold in bulk form.

REASONING

Based on the evidence of Mr O’Brien and Bibina’s Facebook page, I am satisfied that the Bibina store is a retail store in the sense that it offers its products for sale to members of the public that directly consume those products. Although it markets itself as being a store where chefs shop, and therefore a supplier to the hospitality industry, I am satisfied that there is no restriction on the individuals or organisations to which it sells.

It is not necessary that I decide whether Bibina’s sales to the hospitality industry should be classified as retail or wholesale as I have concluded that the store does not sell a “range” of food, beverages, groceries and other domestic goods within the meaning of the word “range” as used in the definition of “supermarket” in section 5 of the Rules. My reasons for reaching this conclusion follows.

Relevant principles of statutory interpretation

The words of a legislative instrument are to be interpreted in the context in which they are used

In Independent Commission Against Corruption and Cunneen and Others [10], the High Court considered the meaning of the words “adversely affect” in the Independent Commission Against Corruption Act 1988 (NSW).

[10] (2015) 256 CLR 1.

In the majority judgement, the Court said, in part:

As was said in Project Blue Sky v Australian Broadcasting Authority:[11]
“The primary object of statutory construction is to construe the relevant provision so that it is consistent with the language and purpose of all the provisions of the statute. The meaning of the provision must be determined ‘by reference to the language of the instrument viewed as a whole’ …… A legislative instrument must be construed on the prima facie basis that its provisions are intended to give effect to harmonious goals. Where conflict appears to arise from the language of particular provisions, the conflict must be alleviated, so far as possible, by adjusting the meaning of the competing provisions to achieve that result which will best give effect to the purpose and language of those provisions while maintaining the unity of all the statutory provisions.”

………………..
The best that can be done is to reason in terms of relative consistency – internal logical consistency and overall consistency in accordance with the principles of statutory interpretation adumbrated in Project Blue Sky – to determine which of the two competing constructions of “adversely affect” is more harmonious overall.[12]
[11] At paragraph 31, citing (1998) 194 CLR 355 at 381-382 [69]-[70] per McHugh, Gummow, Kirby and Hayne JJ.
[12] At paragraph 35.

In Vincentia MC Pharmacy Pty Ltd v Australian Community Pharmacy Authority[13] the Full Court of the Federal Court summarised the principles of statutory interpretation relevant to interpreting the Rules relating to the location of pharmacies:

[13] [2020] FCAFC 163 at paras 46–48.

………. the relevant principles of statutory construction are well-established. In Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 335 (Project Blue Sky), McHugh, Gummow, Kirby and Hayne JJ explained that:
“69. The primary object of statutory construction is to construe the relevant provision so that it is consistent with the language and purpose of all the provisions of the statute. The meaning of the provision must be determined “by reference to the language of the instrument viewed as a whole”. In Commissioner for Railways (NSW) v Agalianos [(1955) 92 CLR 390 at 397], Dixon CJ pointed out that “the context, the general purpose and policy of a provision and its consistency and fairness are surer guides to its meaning than the logic with which it is constructed”. Thus, the process of construction must always begin by examining the context of the provision that is being construed.”

The importance of starting with the statutory context and text was recently emphasised by Kiefel CJ, Nettle and Gordon JJ in SZTAL v Minister for Immigration and Border Protection [2017] HCA 34; (2017) 262 CLR 362 in the following passage:
“14. The starting point for the ascertainment of the meaning of a statutory provision is the text of the statute whilst, at the same time, regard is had to its context and purpose [citing Project Blue Sky with approval]. Context should be regarded at this first stage and not at some later stage and it should be regarded in its widest sense. This is not to deny the importance of the natural and ordinary meaning of a word, namely how it is ordinarily understood in discourse, to the process of construction. Considerations of context and purpose simply recognise that, understood in its statutory, historical or other context, some other meaning of a word may be suggested, and so too, if its ordinary meaning is not consistent with the statutory purpose, that meaning must be rejected.”

Context “in its widest sense”, as referred to in this passage, includes “such things as the existing state of the law and the mischief which … one may discern the statute was intended to remedy” CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384 at 408 (Brennan CJ, Dawson, Toohey and Gummow JJ) (cited with approach in SZTAL at [14]). To have regard to context in this sense, as integral to the process of statutory construction irrespective of whether ambiguity or inconsistency exists in the literal text, accords with the mandate in s 15AA of the Acts Interpretation Act that the interpretation which best gives effect to the legislative purpose must be preferred to any other interpretation: Mills v Meeking [1990] HCA 6 (1990) 169 CLR 214 at 235 (Dawson J). As a result, as Dawson J also explained with respect to Victoria’s equivalent to s 15AA, the approach required by interpretive provisions of this kind “allows a court to consider the purposes of an Act in determining whether there is more than one possible construction” (ibid); see also the discussion in Pearce D, Statutory Interpretation in Australia (9th ed, LexisNexis Butterworths, 2019) (Pearce, Statutory Interpretation) at [2.17]-[2.20]; Herzfeld P and Prince T, Interpretation (2nd ed, LawBook, 2020) (Herzfeld and Prince, Interpretation) at [7.20]-[7.30]. That said, it must also be borne steadily in mind that, as Hayne, Heydon, Crennan and Kiefel JJ cautioned in Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (Northern Territory) [2009] HCA 41; (2009) 239 CLR 27, “[h]istorical considerations and extrinsic materials cannot be relied on to displace the clear meaning of the text. The language which has actually been employed in the text of legislation is the surest guide to legislative intention”.

What is the meaning of “range of food, beverages, groceries and other domestic goods” in Item 130 of the Rules?

The Applicant’s argument

The Applicant accepts that the issue for determination is the interpretation of the word “range” in the definition and that if a retail store is found not to be selling goods in accordance with the definition then it cannot be part of the store’s business.[14]
[14] Statement of Issues, Facts and Contentions of the Applicant 25 February 2022 at paras 11-14.
It is argued that “the absence of particular products as determinative of a lack of sufficient ‘range’, introduces a subjective test based on the constitution of the Respondent’s own weekly shop as informed by personal preferences, cultural contexts, financial constraints, food intolerances and general lifestyle choices. A supermarket may have, in accordance with the definition, a range of food, beverages, groceries and other domestic goods, even if the products in this range are not goods which the Respondent, or another hypothetical shopper as envisioned by the Respondent, would purchase.” [15] There is no requirement in Item 130(b)(i) that the foods sold be “fresh” as distinct from frozen or otherwise preserved.
[15] Statement of Issues, Facts and Contentions of the Applicant 25 February 2022 at para. 30.
Further, the absence of a particular item or items from the goods sold in a store does not preclude a store from meeting the definition of supermarket.
The context and purpose of the Rules
To determine the context and purpose of the Rules, it is instructive to consider their development 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 (Cth) 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”.[16] The determination of the catchment area for particular premises was often difficult. A factor which was commonly considered 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.
[16] 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, in relation to a new pharmacy within 1.5 km of an existing approved pharmacy, is a requirement that there be a supermarket of the prescribed size. A larger supermarket is required if there is not a full-time prescribing medical practitioner in the area. Clearly, 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 and for the public to have access to pharmaceutical benefits.
In 2018 the Rules were changed to exclude the presence of a market as an alternative to the requirement of a supermarket. This indicates that something more than a market was required to provide the necessary customer base.
In Stonehealth Pty Ltd and ZAA Ventures Pty Ltd as Trustee for ZAA Investment Trust and Australian Community Pharmacy Authority[17] (Stonehealth), the Full Court of the Federal Court considered whether a supermarket needed to have commenced business at the relevant time under the Rules. Justice Rangiah (with whom Justice Collier agreed) said:
…… the requirement that there be a “supermarket” appears designed to ensure that there is adequate demand for the supply of pharmaceutical benefits in a particular location. The granting of approval in circumstances where a “supermarket” may never open, or open with a smaller area than anticipated, would be inconsistent with the objects of a sustainable and viable network of community pharmacies and access of consumers to pharmaceutical benefits. Such consequences are unlikely to have been intended. [Emphasis added].
[17] [2020] FCAFC 188 at para. 69.
Discussion
I have to be satisfied that the Applicant meets the requirements of the Rules on the balance of probabilities.
Considering the development of the Rules and the reasons for judgement in Stonehealth, I proceed on the basis that the purpose of the provision of the Rules under consideration is to ensure so far as possible that there is an adequate demand for a sustainable supply of pharmaceutical benefits in the location in which a new pharmacy is proposed and that the public have access to those benefits.[18]
[18] Walkerden v Wodonga Pharmacy Pty Ltd [2015] FCA 273 at 62.
It is in this context that I turn to consider whether the goods on sale in the Bibina store meets the requirement of being “a range of food, beverages, groceries and other domestic goods.”
I am satisfied that Bibina sells a large number of goods which are properly categorised as food, beverages and groceries. I am satisfied that it sells a number of domestic goods[19], although I am unable to be satisfied of the extent of the stock of these items being offered for sale.
[19] See photographs 10, 11 and 14 annexed to exhibit OP1.
Bibina sells meat, but it does not sell meat that is not frozen or otherwise preserved. The same situation applies in relation to bread, poultry, fish, fruit and vegetables. These are staple categories of food consumed in Australia.
Bibina does sell some dairy products, but on the evidence available I cannot be satisfied that it sells more than an extremely limited quantity of milk, butter and cream from only two suppliers.[20]
[20] See photograph at 166 in exhibit A2.
Other categories of goods which I am satisfied are not sold by Bibina are:
(i)personal care;
(ii)baby care
(iii)stationery;
(iv)electrical;
(v)gardening;
(vi)pest control;
(vii)and pet supplies.
Bearing in mind that the purpose of the Rule in question is to ensure an adequate demand for pharmaceutical benefits and to ensure ready access for consumers, I am not satisfied that Bibina sells the necessary “range” of goods because it does not sell categories of goods usually associated with a store selling food, beverages, groceries and other domestic goods by retail. For this reason, I am not satisfied that it comes within the definition of supermarket read in the context of a store necessary to meet the purpose of the Rules. This is consistent with Bibina’s own description of its business as a “Specialist Grocery Store”.
The fact that a store may not sell particular goods (for example clothes pegs) does not mean that it is excluded from the definition of supermarket. In this matter it is the absence of a significant number of categories of goods which excludes the Bibina store from the definition.
CONCLUSION
The decision under review, being the decision of the Australian Community Pharmacy Authority made 3 September 2021, will be affirmed.

I certify that the preceding 51 (fifty-one) paragraphs are a true copy of the reasons for the decision herein of Deputy President J W Constance.

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Associate
Dated: 7 July 2022

Dates of hearing	15 and 16 June 2022
Counsel for the Applicant	Mr T Flaherty
Solicitors for the Applicant	Mr L Krstic, Hitch Advisory
Counsel for the Respondent	Ms C Roberts
Solicitors for the Respondent	Ms E Warner Knight, Australian Government Solicitor
Counsel for the Other Party	Mr M Hoyne
Solicitors for the Other Party	Mr M Francke, Francke Lawyers