Hendy and Secretary, Department of Health

[2019] AATA 2713

Hendy and Secretary, Department of Health [2019] AATA 2713 (31 July 2019)

Division:General Division

File Number(s):2019/3222  

Re:Sherif Mohamed Amin HENDY

APPLICANT

AndSecretary, Department of Health

FIRST RESPONDENT

Australian Community Pharmacy Authority

SECOND RESPONDENT

DECISION

Tribunal:Dr N A Manetta, Senior Member

Date of oral reasons:           31 July 2019               

Date of written reasons:        16 August 2019

Place:Adelaide

For the reasons given orally at the conclusion of the hearing of this matter, the Tribunal affirms the decision under review.

.............................[sgnd].................................

Dr N A Manetta
Senior Member

Catchwords

PHARMACIES – approval for supply of pharmaceutical benefits – decision of Australian Community Pharmacy Authority not to recommend proposed pharmacy for approval – minimum distance requirements from nearest approved pharmacies – proposed premises less than required minimum distances from other approved pharmacies – application of Pharmacy Location Rules in interpreting minimum distance requirements – decision under review affirmed.

Legislation

National Health Act 1953 (Cth)

Cases

Nil.

Secondary Materials

National Health (Australian Community Pharmacy Authority Rules) Determination 2018
Pharmacy Location Rules – Applicant’s Handbook

REASONS FOR DECISION

Dr N A Manetta, Senior Member

16 August 2019

1. At the conclusion of the hearing of this matter, I delivered my decision to affirm the decision under review and gave oral reasons for my decision.  The Applicant requested written reasons. 

2. I have reviewed the transcript of my reasons and made minor amendments to it.  I formally adopt it as a written statement of my reasons in answer to the Applicant’s request.  I attach a copy of the transcript as amended.

I certify that the following twenty-two (22) paragraphs are a true copy of the reasons for the decision herein of Dr N A Manetta, Senior Member.

.....................[sgnd]...........................

Legal and Administrative Assistant

Date of hearing:	25 July 2019
Applicant:	In person
Respondents’ Representative:	Mr M. Kochardy, Australian Government Department of Health

ORAL DECISION OF SENIOR MEMBER MANETTA

1. SENIOR MEMBER: This is an application by Mr Sherif Mohamed Armin Hendy seeking a review of a decision of the Australian Community Pharmacy Authority dated 17 May 2019, as approved by the Secretary of the Department of Health.  In the proceedings before me, the Secretary was named as respondent and by consent of both parties, the Authority was made the second respondent.  At the hearing before me, Mr Hendy represented himself; Mr Kochardy represented both respondents.  As I am giving my reasons orally this morning and as Mr Hendy is not legally represented, I shall express my reasons as plainly as possible, without quoting, in detail, from regulatory provisions.

2. Mr Hendy’s application concerns his right to receive an approval under section 90 of the National Health Act 1953 in respect of a proposed pharmacy at Number 5, Sheedy Road, Virginia, South Australia. The effect of the approval would be to guarantee to Mr Hendy a per-script subsidy from the Federal Government. The authority recommended that Mr Hendy’s application not be approved and this recommendation was followed by the Secretary. Hearing the matter afresh on the evidence before me, I must decide whether Mr Hendy’s application was, or was not, properly rejected.

3. I note that I am to reach the correct or preferable decision on the basis of the evidence adduced before me, and not simply review the Authority’s decision for error.  Before setting out the issues between the parties, I describe certain background facts that emerged in Mr Hendy’s evidence to me.  Mr Hendy is qualified as a pharmacist, both in Egypt and in Australia.  He practised pharmacy in Egypt before coming to Australia.  He provisionally qualified as a pharmacist here in 2015 and has been fully qualified from April 2016 onwards.  From April to June 2016, he practised as a locum pharmacist in Gawler with a company called Pharmacy Links and from 3 July 2017 onwards, he has been working with Priceline in Port Pirie.

4. He is clearly a very determined and hardworking man, as he worked for some seven years as a forklift driver in Australia before being able to return to his preferred vocation of pharmacy.  He has decided that at this point in his life, he wishes to set up on his own account.  He would like to move closer to Adelaide for personal reasons.  He has done a great deal of research, given the restrictive rules that control the establishment of pharmacies by those hoping for a government subsidy in respect of the scripts they fill.  I shall refer to one of these restrictive rules in due course. 

5. Mr Hendy settled upon Virginia, which is a small township north of Adelaide.  He explained in his evidence, that in order to receive government funding in respect of any proposed pharmacy practice, the practice must be established in conformity with certain rules.  Mr Hendy was aware of the rules when he did his research and decided that Virginia offered a potentially, suitable opportunity for him.  I shall not explain how Mr Hendy came to settle upon particular premises in Virginia.  It is sufficient to say that he found a former solicitor’s office available for rent. 

6. Using an online distance calculator, he discovered that the former solicitor’s office was estimated to be located some 210 metres from the nearest pharmacy.  For reasons that will become clear, this made the premises appear promising.  Mr Hendy entered into an arrangement with the landlord to take over the premises and partially rebuild them to accommodate his proposed pharmacy venture.  He has sought and received development approval for a change of use of the premises, as well as building approval in respect of the structural modifications he wishes to make.  The proposed premises are located, as I have said, at Number 5 Sheedy Road, Virginia. 

7. The parties are agreed that the sole issue, before me, involves the application of item 132 of certain rules, to which I now refer.  These rules are known as the National Health Australian Community Pharmacy Authority Rules and they are contained within a determination issued in 2018.  Item 132 of the rules, provides in respect of new, additional pharmacies, that is, where a pharmacy, or pharmacies, already exists, or exist, that the proposed pharmacy must be located at least 200 metres, measured in a straight line, from the nearest approved premises.  It must also be located at least 10 kilometres, by the shortest lawful access route, from any other approved premises; that is, from other premises, excluding the nearest approved premises.

8. It was agreed between the parties that Mr Hendy’s proposed premises do not meet either criterion.  In respect of the first criterion, Mr Hendy obtained a surveyor’s report that was in evidence before me that indicated the Sheedy Road premises were only 186 metres from the nearest approved premises.  The Sheedy Road premises are also agreed to be situated 9.5 kilometres only, and not at least 10 kilometres, from other approved premises, measured by the shortest route.  Mr Hendy’s application to the authority was rejected because of the failure to meet these two criteria. 

9. Given that Mr Hendy’s application did not meet these two criteria, the authority decided not to consider other aspects of Mr Hendy’s application.  A recommendation was made to the Secretary to reject the application and that recommendation was adopted and followed.  Before me, Mr Hendy submitted that he obtained a surveyor’s report only because it was required of him by a handbook, to which I shall refer.  He said that had he not obtained that report, he might legitimately have presented to the authority the calculation drawn from the computer mapping program which I have mentioned that showed the Sheedy Road premises were 210 metres from the nearest approved premises.  He queries why he should be penalised.

10. The answer to that query is that, so far as this tribunal is concerned, it does not matter how Mr Hendy came to obtain a surveyor’s report.  The fact of the matter remains that according to the best and most reliable information before the tribunal, Mr Hendy’s practice is proposed to be located 186 metres from the nearest approved premises.  Indeed, this was agreed between the parties, as I have already said.  It follows, therefore, that the tribunal will act on the basis that Mr Hendy’s proposed premises are 186 metres away from the nearest approved premises. 

11. If the distance requirements in item 132 are mandatory, it must follow that the authority had no choice but to reject Mr Hendy’s application.  Much of the argument before me concerned the question of whether the distance requirements were intended to be mandatory, or whether there was an overriding discretion in the authority to recommend approval of an application when the 200-metre and 10-kilometre distance requirement rules were not met.  This involves the question of interpretation of the rules.  The interpretation question is a straightforward one, in my opinion. 

12. Subsection 10(2) of the rules makes the 200-metre and 10-kilometre distance requirements mandatory preconditions before the authority may recommend an approval to the Secretary.  It follows, therefore, that the rules themselves do not allow any discretion in respect of this matter.  Equally, as the Secretary may only grant approval in respect of an application, if the authority has recommended the grant of an approval, the Secretary properly rejected Mr Hendy’s application.  Mr Hendy pressed me with an argument that a handbook, published by the authority and which required him to obtain a surveyor’s report, introduced an overriding discretion into the authority’s decision-making.

13. I believe Mr Hendy has misunderstood the effect of the handbook in this regard.  The handbook addresses what evidence must be presented to the authority by an applicant to satisfy the 200-metre and 10-kilometre rules referred to in item 132.  So far as the 200-metre rule is concerned, the handbook says that:

    If the distance separating the nearest approved pharmacy and the proposed premises is substantially greater than 200 metres, it may be sufficient to provide a scaled map highlighting and clearly identifying the location and addresses of the two premises and the approximate straight-line distance using the scale on the map.

14. Pausing here, I note that the intention of this paragraph is to indicate when it may be sufficient to use a scaled map, as opposed to some other and more exact form of evidence, to prove the minimum distance.  A scaled map is regarded as sufficient where there can be little doubt that the 200-metre rule is satisfied; that is, where the 200-metre minimum is substantially exceeded.  On the other hand, when the 200-metre rule would not be clearly satisfied by reference to a map, a different and more exact form of evidence is recommended. 

15. The text goes on to provide that:

    If the distance between the closest approved pharmacy and the proposed premises is near to - - -

    And I quote, “Near to”:

    The required distance of 200 metres the applicant should provide a report from a licensed or registered surveyor of the measurement of the straight-line distance between the two premises.

16. Mr Hendy put to me that this second aspect of the rule conferred a discretion on the Authority so that the authority could approve premises where the distance requirement of 200 metres was nearly satisfied.  This reading of the text is not open, in my opinion.  It is clear that the handbook merely intends to specify when a licensed or registered surveyor’s report needs to be obtained, as opposed to a scaled map.  At the risk of labouring the point, a scaled map may not provide the authority with a clear enough demonstration that the 200-metre distance requirement has been satisfied, where the distance between the two premises is close to or near to 200 metres.

17. It is for that reason that applicants are asked to provide a licensed or registered surveyor’s report; that is, when the distance between the two premises is close to 200 metres.  I am satisfied that there is nothing in the wording of the handbook that purports to grant the authority any overriding discretion.  Exactly the same evidence specifications appear in respect of the 10-kilometre rule and so, what I have just said applies in that regard as well.

18. It follows, in my opinion, that the handbook does not seek to modify item 132.  On the contrary, the handbook seeks to implement item 132 because the handbook makes it clear that when the 200-metre or 10-kilometre minimum distance is close to being reached, evidence more exact than a scaled map is required from an applicant to demonstrate compliance with the minimum distance requirements in item 132.  It follows in my view, that the authority properly rejected the application.

19. During the course of the hearing it became clear that there may be another avenue for Mr Hendy to pursue. Mr Hendy’s attention was drawn to section 90A of the National Health Act 1953, which allows the Minister to substitute for the Secretary’s decision a decision approving the pharmacist for the purposes of supplying pharmaceuticals. Accordingly, Mr Hendy may wish to approach the Minister directly in respect of his application. Mr Hendy may wish to consider putting to the Minister what he put to me; namely, that the township of Virginia has only one pharmacy at the moment and that his proposed premises, nearly, but not quite, satisfy the minimum distance requirements.

20. He also referred in his evidence before me to the unusually high prices that customers must pay in Virginia and that his premises would introduce a welcome element of competition, which would be healthy and beneficial to the community.  These are not matters that concern the tribunal, however.  The tribunal is concerned only with the decision reached by the Authority, as approved by the Secretary.

21. The formal decision of the tribunal will be, therefore, to affirm the decision under review and a formal order to this effect will be drawn up and forwarded to the parties.

22. That concludes my reasons.

    END OF ORAL DECISION