Holzberger and Secretary, Department of Health and Ageing

[2006] AATA 621

Administrative

Appeals

Tribunal

 

ORDER AND REASONS FOR DECISION [2006] AATA 621

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No Q2006/435

GENERAL ADMINISTRATIVE DIVISION		)
Re		SUSANN HOLZBERGER

Applicant

And SECRETARY, DEPARTMENT OF HEALTH AND AGEING

Respondent

ORDER

Tribunal Deputy President P E Hack SC

Date13 July 2006

PlaceBrisbane

THE TRIBUNAL ORDERS, pursuant to s 41(2) of the Administrative Appeals Tribunal Act1975, that the implementation of the respondent’s decision to cancel the applicant’s registration not take effect until the hearing and determination of this application, or earlier order.
AND THE TRIBUNAL DIRECTS THAT:

1.The respondent lodge with the Tribunal by 21 July 2006 and serve on the solicitors for the applicant the material required by s 37 of the Administrative Appeals Tribunal Act 1975.

2.The applicant lodge with the Tribunal by 21 July 2006 and serve on the respondent a statement of facts, issues and contentions and statements of witnesses intended to be relied on at the hearing.

3.The respondent lodge with the Tribunal by 7 August 2006 and serve on the solicitors for the applicant a statement of facts, issues and contentions and statements of witnesses intended to be relied on at the hearing. 

4.The applicant lodge with the Tribunal by 10 August 2006 any statements of witnesses in reply intended to be relied on at the hearing.

5.The application is set down for hearing at Brisbane at 10 a.m. on 14 August 2006. 

6.There is liberty to apply to both parties.

...................Signed...................

Deputy President

CATCHWORDS

HEALTH AND COMMUNITY SERVICES – pharmaceutical benefits scheme – cancellation of approval with effect from 30 June 2006 – not carrying on a business as a pharmacist from approved premises – application for stay of the implementation of decision – Tribunal orders to extend the date of implementation of decision until the hearing and determination

Administrative Appeals Tribunal Act 1975 s 26(1)(b), s 41(2)

National Health Act 1953 Part VII, s 85, s 89, s 99(2)(3)

Civil Aviation Safety Authority v Hotop & anor [2005] FCA 1023; (2005) 145 FCR 232;

REASONS FOR DECISION

13 July 2006 Deputy President P E Hack SC    

Introduction

1.Mrs Susann Holzberger is a pharmacist. Earlier this year the Secretary of the Department of Health and Ageing approved Mrs Holzberger for the purposes of supplying pharmaceutical benefits at or from premises described as Shop 1.02, 119 Melbourne Street, South Brisbane, Queensland. 

2.On 28 June 2006 the delegate of the Secretary cancelled the approval with effect from the close of business on 30 June 2006. Notice of that cancellation was given to Mrs Holzberger by letter of the same date. The stated basis of the decision to cancel was that Mrs Holzberger was not carrying on business as a pharmacist from the approved premises.

3.On 29 June 2006 Mrs Holzberger made application to the Tribunal for a review of the decision to cancel. On the same day she lodged an application for a stay of the implementation of the decision pending the hearing and determination of the substantive proceedings. The matter is urgent and it is proposed that a hearing commence on 14 August 2006.

4.On 30 June 2006, and with the consent of the parties, I made an order pursuant to s 26(1)(b) of the Administrative Appeals Tribunal Act 1975 altering the decision such that the date of effect of the cancellation was 14 July 2006. The purpose of that order was to preserve the status quo pending the hearing of the merits of the application for a stay.

The legislative framework

5.The scheme for the provision of pharmaceutical benefits appears in Part VII of the National Health Act 1953. It is to be noted, having regard to an argument advanced by the Secretary, that s 85 of that Act states the general policy that benefits shall be provided by the Commonwealth in respect of the drugs and medicinal preparations in relation to which Part VII applies. It does so by the mechanism of approving pharmacists, willing to supply pharmaceutical benefits on demand at particular premises, for the purposes “of supplying pharmaceutical benefits at or from those premises”.

6.By virtue of s 89 a person is not entitled to receive a pharmaceutical benefit unless, relevantly, it is supplied by an approved pharmacist, at or from premises in respect of which the pharmacist is for the time being approved. And, by virtue of s 99(2), an approved pharmacist who has supplied a pharmaceutical benefit is entitled to be paid by the Commonwealth a prescribed amount called “the Commonwealth price”. The Secretary also relies upon s 99(3). It provides,

Nothing in this section shall be deemed to authorize payment in respect of the supply of a drug or medicinal preparation:

…

(b) By an approved pharmacist at or from premises in respect of which he or    she is not approved …

…   

7.Mr Stephenson of Counsel who appeared for the Secretary on the application submitted, in my view correctly, that the effect of ss 89 and 99(3) is that a pharmacist who supplied pharmaceutical benefits from premises that were not approved would not be entitled to be paid by the Commonwealth in relation to those benefits.

8.It is now necessary to notice s 41(2) of the Administrative Appeals Tribunal Act. It is in these terms,

The Tribunal may, on request being made, as prescribed, by a party to a proceeding before the Tribunal (in this section referred to as the relevant proceeding), if the Tribunal is of the opinion that it is desirable to do so after taking into account the interests of any persons who may be affected by the review, make such order or orders staying or otherwise affecting the operation or implementation of the decision to which the relevant proceeding relates or a part of that decision as the Tribunal considers appropriate for the purpose of securing the effectiveness of the hearing and determination of the application for review.           

The arguments of the parties

9.Mr Logan S.C., who appeared for Mrs Holzberger, submitted that, as a matter of discretion, the case was a proper case for the making of an order under s 41(2). He submitted however that an order simply staying the operation of the decision would not suffice. That was so, he submitted, because if the decision was ultimately affirmed, Mrs Holzberger might be obliged to refund to the Commonwealth amounts paid to her between the date of effect of the original decision and the date of the Tribunal’s decision. Thus, it was submitted, the power in s 41(2) ought to be utilized by means of an order extending the date of implementation of the decision until the hearing and determination of the application.

10.In that regard it was the submission of Mr Stephenson that if the original decision were to be affirmed monies paid by the Commonwealth to Mrs Holzberger by way of benefits would be recoverable and the Commonwealth would be obliged to recover those monies. As to the substance of the matter, Mr Stephenson submitted that the merits did not favour Mrs Holzberger, that s 41(2) did not authorise the making of an order in the terms sought and that, in any event, the order should be refused as a matter of discretion in order to protect the revenue.

The merits

11.The material filed in this matter demonstrates that there is a clear contest of fact that will need to be determined at the hearing on the issue of whether Mrs Holzberger was carrying on a business at the premises. The evidence that she gives is capable, on one view of the law, of demonstrating that she is carrying on business. Some of that evidence is disputed by the affidavit of Ms Murphy the respondent’s deponent. There are, undoubtedly, curiosities about the manner in which Mrs Holzberger has conducted the business. Necessarily an application for a stay is not the forum for determining disputed questions of fact.

12.It is sufficient for me to conclude that I am satisfied on the material filed that there are significant factual issues to be determined at the hearing.

13.A hearing has been set down for some six weeks hence. But if Mrs Holzberger is unable to trade even for a period of six weeks the effect she says “would be ruinous”. She would lose income, and, perhaps more importantly, goodwill, perhaps irretrievably. It is not open to doubt that without an effective stay Mrs Holzberger would suffer very great harm if ultimately she were to have the decision set aside.

14.There is, as well, in Mrs Holzberger’s favour the fact that the Secretary does not point to any prejudice that would be suffered by the Secretary or the public if a stay were to be granted beyond the prejudice said to arise from the fact that the Commonwealth could not recover payments made in the interim. I deal with that argument in paragraph 22 below.

15.I am unable to see how, except in a most technical sense that could represent a prejudice to the Commonwealth.

16.In my view the merits clearly favour the grant of a stay, provided an effective form of order can be formulated.

The s 41(2) power

17.The decision of Siopis J in Civil Aviation Safety Authority v Hotop & anor [2005] FCA 1023; (2005) 145 FCR 232 is authority for the proposition that the s 41(2) power extends to making an order having positive effect. In that case CASA determined on 14 January 2005 to cancel an Air Operator’s Certificate once it had expired through the effluxion of time. The Tribunal, at first instance, had used the s 41(2) power not only to stay the cancellation decision but also to extend the certificate until the hearing of the application for review. Siopis J rejected a submission advanced by CASA that the s 41(2) was to be construed so as to preclude the Tribunal from making orders that have a positive effect.

18.As I understand the argument advanced by Mr Stephenson he accepts the proposition that the Tribunal can make orders having positive effect. His argument is that,

the power does not extend to making an order which has a positive effect and which in addition requires the payment by the Commonwealth of monies beyond the date of the original decision in circumstances where those payments are not recoverable in the event that the decision is upheld and where the payment would be inconsistent with the provisions of the National Health Act 1953.

19.I am unable to accept that argument. The power in s 41(2) is to be exercised for the purpose of securing the effective hearing and determination of the review hearing: CASA v Hotop (supra) at [40]. If the power is not exercised at all the applicant will suffer a significant loss if the decision is set aside. In my view the argument advanced does not go to the power in s 41(2). At best, it might go to the exercise of the discretion. The sub-section gives power, relevantly, to make such order … affecting the … implementation of the decision to which the relevant proceeding relates. In my view it is within power to make an order that the date of implementation of the decision be the date of hearing and determination of the relevant proceeding.

20.There is no question of any genuine conflict between the s 41(2) power and ss 89 and 99(3) of the National Health Act. The power to grant a stay or make an order otherwise affecting the operation or implementation of a decision carries with it, necessarily, the power to affect the manner in which that statute will operate in a particular circumstance. The submission, in my view, confuses the task of the Tribunal which is to undertake merits review. An applicant may satisfy the Tribunal that, after taking into account the interests of persons who may be affected by the review, it is appropriate for the purpose of securing the effectiveness of the review application to exercise the stay power. Where the Tribunal is so satisfied it is empowered to make orders that stay or otherwise affect the operation or implementation of the decision. It does so exercising the administrative power of the Commonwealth and does so in the shoes of the decision-maker.

The need to protect the revenue

21.The Secretary’s final argument is that if there was power to make the order sought it ought to be refused as a matter of discretion because,

The protection of the public revenue and the ability of the Commonwealth to recover any funds which are paid out to Ms Holzberger in the event that the decision is upheld is a very important factor when determining whether to make an order under section 41(2) of the [Administrative Appeals Tribunal] Act.

22.I must say that I find the submission unattractive. Let it be assumed that a stay were granted and between now and the determination of the application Mrs Holzberger fills prescriptions for customers presenting valid prescriptions. As I understand the position the customers would pay to Mrs Holzberger the amounts of patient contribution and Mrs Holzberger would incur liabilities to pay her supplier (or would reduce her assets by way of stock on hand). The Commonwealth would have a liability to pay Mrs Holzberger the amount of the Commonwealth contribution to those benefits. The argument advanced by the Secretary is that if the cancellation decision were to be affirmed Mrs Holzberger would be regarded as having been unapproved in the period from 14 July 2006 to hearing and thus not entitled to be paid, or to retain, benefits even though she has incurred a liability or decreased an asset of hers in providing a benefit that the Commonwealth has a statutory liability to meet.

23.In my view the argument does not tell against a stay, as a matter of discretion. I do not see it as a prejudice to the Commonwealth except in a most technical sense since Mrs Holzberger will have given value for money for the payments she receives from the Commonwealth.

Conclusion

24.It is my view that the case is one where it is proper to make an order affecting the implementation of the decision under review. I propose to order in the terms sought by the applicant. I will, as well, make directions in terms discussed with counsel at the hearing.

I certify that the 24 preceding paragraphs are a true copy of the reasons for the decision herein of Deputy President P E Hack SC

Signed: .............Signed.....................................................
  Leisa Pendle, Associate

Date of Hearing of Stay            7 July 2006
Date of Decision  13 July 2006
Counsel for the Applicant         Mr J A Logan SC
Solicitor for the Applicant          McCarthy Holzberger     
Counsel for the Respondent     Mr J Stephenson
Solicitor for the Respondent     Ms S Janiec, Medicare Australia