Lo v Australian Community Pharmacy Authority

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FEDERAL COURT OF AUSTRALIA

Lo v Australian Community Pharmacy Authority [2013] FCA 639

Citation: Lo v Australian Community Pharmacy Authority [2013] FCA 639
Parties: WINSTON LO and JULIE LE v AUSTRALIAN COMMUNITY PHARMACY AUTHORITY, SECRETARY DEPARTMENT OF HEALTH AND AGEING, ANDREW STONE and DUC DUNG BANH
File number: NSD 307 of 2013
Judge: KATZMANN J
Date of judgment: 28 June 2013
Catchwords: COSTS – application discontinued by leave – supervening event – whether applicants bound to succeed – whether conduct of all parties reasonable
Legislation:

Federal Court of Australia Act 1976 (Cth) ss 37M, 37N, 43
Federal Court Rules 2011 (Cth), r 26.12(7)
National Health Act 1953 (Cth) ss 90, 99K

National Health (Australian Community Pharmacy Authority Rules) Determination 2011, Sch 1 Pt 2 item 133, Sch 2 item 211
Cases cited:

Armstrong v Australian Community Pharmacy Authority [2012] FCA 577
Australian Securities Commission v Aust-Home Investments Ltd (1994) 44 FCR 194
Australiawide Airlines Ltd v Aspirion Pty Ltd [2006] NSWCA 365
Bitannia Pty Ltd v Parkline Constructions Pty Ltd [2009] NSWCA 32

Fabre v Arenales (1992) 27 NSWLR 437

Foukkare v Angreb Pty Ltd [2006] NSWCA 335
Gribbles Pathology Pty Ltd v Health Insurance Commission (1997) 80 FCR 284
One Tel Ltd v Commissioner of Taxation (2000) 101 FCR 548
The Queen v Australian Broadcasting Tribunal; ex parte Hardiman (1980) 144 CLR 13
Date of hearing: 20 June 2013
Place: Sydney
Division: GENERAL DIVISION
Category: Catchwords
Number of paragraphs: 91
Counsel for the Applicants: Mr H Woods
Solicitor for the Applicants: Michael Flaherty
Counsel for the First and Second Respondents: Mr A Dillon
Solicitor for the First and Second Respondents: Australian Government Solicitor
Counsel for the Third and Fourth Respondents: Mr C O’Neill
Solicitor for the Third and Fourth Respondents: Esplins Solicitors

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

GENERAL DIVISION

NSD 307 of 2013
BETWEEN:

WINSTON LO
First Applicant

JULIE LE
Second Applicant
AND:

AUSTRALIAN COMMUNITY PHARMACY AUTHORITY
First Respondent

SECRETARY DEPARTMENT OF HEALTH AND AGEING
Second Respondent

ANDREW STONE
Third Respondent

DUC DUNG BANH
Fourth Respondent

JUDGE:

KATZMANN J

DATE OF ORDER:

28 JUNE 2013

WHERE MADE:

SYDNEY

THE COURT ORDERS THAT:

1.Leave be granted to the applicants to file a notice of discontinuance within seven (7) days.

2.The third and fourth respondents pay the applicants’ costs from 24 April 2013 until 17 May 2013.

3.The interlocutory application filed by the first and second respondents on 21 May 2013 be dismissed with costs.

4.The third and fourth respondents pay the costs of their interlocutory application filed on 18 April 2013.

5.Otherwise, there be no order as to costs.

THE COURT NOTES:

6.The undertaking provided to the Court on behalf of the third and fourth respondents that they will not seek either merits or judicial review of the second respondent’s decision of 17 May 2013.

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


IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

GENERAL DIVISION

NSD…

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Details
Case
[2013] FCA 639
Decision Date

CaseChat Overview and Summary

In the case of Lo v Australian Community Pharmacy Authority, the applicants, Mr Stone and Mr Banh, sought judicial review of the decision by the Secretary of the Department of Health to reject their application for approval to supply pharmaceutical benefits from shop 10 in Fletcher Village. The applicants argued that Fletcher Village qualified as a small shopping centre under the relevant provisions of the National Health (Australian Community Pharmacy Authority Rules) Determination 2011. The Authority had recommended approval of the application, but the Secretary declined to approve it. The applicants commenced proceedings seeking judicial review and, after the Secretary decided not to grant approval, they discontinued the proceedings. The Commonwealth subsequently applied for costs.

The central issue before the court was whether the applicants were entitled to costs as the prevailing party under the Federal Court of Australia Act 1976. The applicants argued that they were successful in their proceedings because the Secretary's decision not to grant approval was influenced by the applicants' litigation. The Commonwealth contended that the applicants were not entitled to costs because their decision to discontinue the proceedings was not justified and the proceedings had been an abuse of the judicial process.

The court held that the applicants were not entitled to costs as the prevailing party. The court found that the applicants' decision to discontinue the proceedings was not a response to a supervening event but rather a strategic decision made in the context of the litigation. The court further found that the applicants had not demonstrated that they were successful in their proceedings, as the Secretary's decision not to grant approval was not a result of the applicants' litigation but rather an independent exercise of discretion. The court also noted that the applicants had not adduced sufficient evidence to support their claim that they were likely to succeed on their application for judicial review.

The court ordered that the Commonwealth was entitled to costs of the proceeding. The court found that the applicants' litigation was not reasonable or justified and that the Commonwealth had acted consistently with the overarching purpose of the Federal Court of Australia Act 1976. The court also found that the applicants' decision to discontinue the proceedings was not a factor that should be taken into account in determining the costs order.

Orders

Orders of the court

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Background

Background to the litigation

The contentious issue is costs.Background The application by Mr Stone and Mr Banh was made on 17 December 2012. It was made to the Secretary under s 90 of the National Health Act 1953 (Cth) (“the Act”). In the application Mr Stone and Mr Banh sought approval to supply pharmaceutical benefits from premises known as shop 10 in Fletcher Village. They contended that Fletcher Village was a small shopping centre within the meaning of Item 133 of Part 2 of Schedule 1 of the National Health (Australian Community Pharmacy Authority Rules) Determination 2011 (“the ACPA rules”). These are rules made by the Minister for Health under s 99(1) of the Act. On 18 December 2012 a delegate of the Secretary referred the application to the Authority under s 90(3A) of the Act. The Authority’s functions under s 99K of the Act are to consider the application and make a recommendation to the Secretary. In making a recommendation, the Authority is bound to comply with the ACPA rules. Where an application is referred to the Authority, the Secretary may only grant approval if the Authority so recommends but the Secretary may refuse to grant approval even if the Authority recommends it (s 90(3B)). On 8 January 2013 the Authority informed the applicants of the application and gave them an opportunity to comment and make submissions. On 21 January 2013 the applicants submitted to the Authority that the application did not meet the criteria in item 133 as the shopping centre only contained 11 commercial establishments instead of the required 15. On 25 January 2013, however, the Authority decided that the application met the relevant criteria and so recommended to the Secretary that it be approved. The application for judicial review was listed for hearing on 28 May 2013. In the meantime the Secretary determined not to grant approval, despite the Authority’s recommendation. The applicants’ argument The applicants submitted that:(1)the conduct which “precipitated” the proceedings was the presentation to the Authority of false and misleading material;(2)the applicants acted reasonably in commencing and prosecuting the proceedings;(3)on the other hand, the respondents have not always acted reasonably nor have they always acted consistently with the overarching purpose described in s 37M of the Federal Court of Australia Act 1976 (Cth) (“FCA Act”);(4)the applicants’ decision to discontinue was not an act of surrender but a response to the supervening decision of the Secretary to reject the application by Messrs Stone and Banh;(5)that decision “only came about” because of the proceedings and the applicants’ prosecution of them;(6)the effect of the Secretary’s decision is that the applicants have been successful; and(7)it is likely, in any event, that the applicants would have succeeded on their application for judicial review. In support of these submissions the applicants read affidavits from their solicitor, Michael Flaherty, sworn on 28 February 2013, 16 April 2013, 3 May 2013 and 27 May 2013, as well as affidavits of Angelyn and Winston Lo sworn on 18 February 2013 and 7 April 2013 respectively. They also relied on documents produced by Coles Property Group on subpoena. The Commonwealth read two affidavits sworn by its solicitor, Bradley Dean on 21 May 2013 and 18 June 2013. Mr Stone and Mr Banh read an affidavit from their solicitor, Stephen Rush, sworn on 12 June 2013. They also relied on the agreements to lease the proposed premises and attached plans.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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