Hope v Australian Community Pharmacy Authority

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FEDERAL COURT OF AUSTRALIA

Hope v Australian Community Pharmacy Authority [2017] FCA 669

File number(s): TAD 53 of 2016
Judge(s): KERR J
Date of judgment: 23 June 2017
Catchwords: ADMINISTRATIVE LAW – objection to new pharmacy – approval of new pharmacy location – interpretation of rules for pharmacy approval – false and misleading information provided by applicant to the Australian Community Pharmacy Authority – ‘fraud’ in Australian public law – fraud on the Authority – jurisdiction of Authority constructively unexercised – Authority’s recommendation vitiated – application remitted
Legislation:

Administrative Decisions (Judicial Review) Act 1977

Judiciary Act 1903 (Cth)

National Health Act 1953 (Cth)

National Health (Australian Community Pharmacy Authority Rules) Determination 2011

Cases cited:

Ainsworth v Criminal Justice Commission [1992] HCA 10; (1992) 175 CLR 564

Craig v South Australia [1995] HCA 58; (1995) 184 CLR 163

Hope v Australian Community Pharmacy Authority [2016] FCA 1597

Kastrinakis v Australian Community Pharmacy Authority [2013] FCA 995

Lazarus Estates Ltd v Beasely [1956] 1QB 702

R v Fulham, Hammersmith and Kensington Rent Tribunal; Ex parte Gormly [1951] 2 All ER 1030

SZFDE v Minister for Immigration and Citizenship [2007] HCA 35; (2007) 232 CLR 189

Walkerden v Wodonga Pharmacy Pty Ltd [2015] FCA 273; (2015) 230 FCR 243

Yu v Minister for Health [2013] FCA 261; (2013) 216 FCR 168

Yu v Minister for Health (No 2) [2013] FCA 367
Date of hearing: 27 and 28 February 2017, 1 March 2017
Registry: Tasmania
Division: General Division
National Practice Area: Administrative and Constitutional Law and Human Rights
Category: Catchwords
Number of paragraphs: 162
Counsel for the Applicants: Mr C Gunson SC and Mr A Walker
Solicitor for the Applicants: Robert James Lawyers
Counsel for the First Respondent: The First Respondent filed a submitting notice
Counsel for the Second Respondent: The Second Respondent filed a submitting notice
Counsel for the Third Respondent: Mr D Chesterman
Solicitor for the Third Respondent: Bennett & Philp Lawyers

ORDERS

TAD 53 of 2016
BETWEEN:

GEOFFREY PETER SPRINGFORD HOPE & ELIZABETH JANE HOPE TRADING AS ELIZABETH HOPE PRICELINE PHARMACY

First Applicant

ROHAN TARGETT TRADING AS BRIGHTON PHARMACY

Second Applicant
AND:

AUSTRALIAN COMMUNITY PHARMACY AUTHORITY

First Respondent

SECRETARY OF THE DEPARTMENT OF HEALTH

Second Respondent

SLOPEN MAIN PTY LTD AS TRUSTEE FOR SLOPEN MAIN DISCRETIONARY TRUST

Third Respondent

JUDGE:

KERR J

DATE OF ORDER:

23 JUNE 2017

THE COURT ORDERS THAT:

1.The decision of the First Respondent made on 4 November 2016 to recommend that the Second Respondent grant approval under s 90(1) of the National Health Act 1953 for the Third Respondent to supply pharmaceutical benefits at Tenancy T19, Cove Hill Shopping Centre, 11 Cove Hill Road Bridgewater in the State of Tasmania be set aside.

2.The Third Respondent’s application to supply pharmaceutical benefits be remitted to the First Respondent for reconsideration according to law.  

3.The Third Respondent to pay the First and Second Applicants’ costs as assessed or agreed.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court…

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Details
Case
[2017] FCA 669
Decision Date

CaseChat Overview and Summary

The Federal Court of Australia heard an appeal from the decision of the Australian Community Pharmacy Authority (the Authority) to approve a new pharmacy location. The applicants, represented by their solicitors, challenged the decision on the basis that the applicant, Slopen Main, provided false and misleading information to the Authority. The Authority had recommended to the Minister for Health that approval be granted to the applicant to supply pharmaceutical benefits at a particular location. The applicants argued that the Authority’s decision should be set aside due to fraud, or at least bad faith conduct, by the applicant.

The court had to determine if the conduct of the applicant amounted to fraud or bad faith, and if so, whether this conduct could vitiate the Authority’s decision. The court considered the High Court’s decision in SZFDE v Minister for Immigration and Citizenship, which held that fraud in public law encompasses bad faith. The court found that the applicant’s conduct amounted to bad faith as they intended to transfer any approval granted for the approved location to a different location that was closer to another approved pharmacy. This conduct was deliberately misleading to the Authority and demonstrated a lack of honesty and integrity.

The court concluded that the Authority’s decision was vitiated by the applicant’s bad faith conduct. The court set aside the Authority’s decision and remitted the application to the Authority for reconsideration according to law. The court also ordered the applicant to pay the applicants’ costs.

Orders

Orders of the court

1. The decision of the First Respondent made on 4 November 2016 to recommend that the Second Respondent grant approval under s 90(1) of the National Health Act 1953 for the Third Respondent to supply pharmaceutical benefits at Tenancy T19, Cove Hill Shopping Centre, 11 Cove Hill Road Bridgewater in the State of Tasmania be set aside.

2. The Third Respondent’s application to supply pharmaceutical benefits be remitted to the First Respondent for reconsideration according to law.

3. The Third Respondent to pay the First and Second Applicants’ costs as assessed or agreed.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

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Evidence

Evidence Before The Court

It was the Secretary’s unexplained delay in cancelling Mr Yu’s approval to supply pharmaceutical benefits at premises at 20 Sydney St not Mr Yu’s misleading of the Authority that had been responsible for Mr Yu’s “sharp practice” being capable of implementation.The relevant evidence in these proceedings The documentation supporting the Third Respondent’s application to supply pharmaceutical benefits from T19 stated that the applicant was “Slopen Main Pty Ltd as Trustee for the Slopen Main Discretionary Trust”. Mr Darnell was named in that application as the person authorised to act on behalf of Slopen Main. His contact details were provided for that purpose. A solicitor, Mr Hannan of Bennett & Philp Lawyers was also named as authorised to act on behalf of the applicant. In his covering letter for that application dated 21 July 2016 Mr Hannan wrote that he had “been instructed by the Applicants (sic)” to make an application for the establishment of a new pharmacy in a facility, being a small shopping centre at premises situated at Tenancy T19, Cove Hill Shopping Centre, 11 Cove Hill Rd, Bridgewater, Tasmania 7030. He enclosed with his letter a copy of ASIC’s Current Organisation Extract dated 25 April 2016 “confirming that Ross David Darnell is the Sole Director and shareholder of the Applicant”. As its sole director and shareholder I am satisfied that for all purposes Mr Darnell was and is the controlling mind of Slopen Main. I am further satisfied that the evidence given by Mr Darnell in these proceedings requires the Court to record a finding that all of the matters pleaded by the Applicants in paragraph 17 of their Further Amended Statement of Claim were made out. In cross-examination Mr Darnell assented to the following propositions: (a)that Slopen Main intended to not supply pharmaceutical benefits at the premises which is T19 for anything other than a short time (P 119 lines 40-47);(b)that Slopen Main intended to supply pharmaceutical benefits from different premises which are not the premises [T19], being T4 within the Cove Hill Shopping Centre, which is significantly less than 500 metres from the nearest approved premises (P 120 lines 30-44);(c)that Slopen Main only had planning approval to operate a pharmacy at T19 on a temporary basis for a short period (P 121 lines 1-4); and(d)that Slopen Main intended to transfer any approval granted for tenancy T19 to tenancy T4 (P 121 lines 6-10). Although Mr Darnell cavilled at assenting to the additional proposition pleaded in paragraph 17(d) of the Applicants’ Further Amended Statement of Claim that Slopen Main intended “thereby to avoid the distance restriction contained in item 133 of the Rules”, I am satisfied that such a finding also should be made. It was Mr Darnell who had explained to Ms Bowkett (representing Kalis Properties) that, notwithstanding she had originally expressed a view that there were only ten tenancies in the Cove Hill Shopping Centre, that the “tenancies she had ownership of that were across the road” [Hurst St] might be considered by the Authority as all being under one shopping centre (P 125 lines 13-22). It was Mr Darnell who asked Ms Bowkett “to modify the two tenancy plans [previously showing the Hurst St shops as separate to the Cove Hill Shopping Centre] to show them together on one so that it could more easily be shown to the [Authority]”(P 126 lines 38-40)

Decision

Reasons for decision

While the pleadings do not expressly assert fraud within the meaning of that concept in public law, the conduct of the parties, the hearing and the submissions all proceeded on the premise that that issue was in contest and findings on that account were open to be made by the Court. What conduct, if any, by or on behalf of an applicant will vitiate an administrative decision? In SZFDE the High Court (Gleeson CJ, Gummow, Kirby, Hayne, Callinan, Haydon and Crennan JJ) at [11]-[22] analysed in some depth what is comprehended by, and the legal consequences of, “fraud” in Australian public law. The Court commenced its discussion of this subject at [15] citing a passage from Denning LJ reasons in Lazarus Estates Ltd v Beasley [1956] 1 QB 702 at 712-713. That passage contains his Lordship’s much repeated observation; “Fraud unravels everything.” Their Honours then observed at [16]:The vitiating effect of fraud is not universal throughout the law. The equitable doctrine protecting bona fide purchases for value and without notice is an important exception. Further, particular principles, or at least practices, have been developed with respect to collateral attacks in later litigation upon the outcome in earlier litigation where this was alleged to have been vitiated by fraud. It has been said in this Court that, except in very exceptional cases, fraud constituted by perjury by a witness or witnesses acting in concert is not a sufficient ground for setting aside a judgment. The precept engaged here has been identified as that favouring the finality of litigation (footnotes omitted). However, at [17], and by way of contrast with adjudication of civil actions and suits their Honours observed:A rather different trend has appeared in public law, particularly respecting the administration by superior courts of certiorari to supervise the exercise of jurisdiction by inferior courts and tribunals. In Craig v South Australia, Brennan, Deane, Toohey, Gaudron and McHugh JJ said of the scope of certiorari:Where available, certiorari is a process by which a superior court, in the exercise of original jurisdiction, supervises the acts of an inferior court or other tribunal. It is not an appellate procedure enabling either a general review of the order or decision of the inferior court or tribunal or a substitution of the order or decision which the superior court thinks should have been made. Where the writ runs, it merely enables the quashing of the impugned order or decision upon one or more of a number of distinct established grounds, most importantly, jurisdictional error, failure to observe some applicable requirement of procedural fairness, fraud and 'error of law on the face of the record'. Where the writ is sought on the ground of jurisdictional error, breach of procedural fairness or fraud, the superior court entertaining an application for certiorari can, subject to applicable procedural and evidentiary rules, take account of any relevant material placed before it (footnotes omitted in original).Their Honours noted that in this context "fraud" was used in a broad sense which encompasses "bad faith" (footnotes omitted).

Ratio Decidendi

Legal Principle Established

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