Newman and Australian Community Pharmacy Authority

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2010] AATA 1055

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No  2010/0287

GENERAL ADMINISTRATIVE DIVISION		)
Re		MATTHEW NEWMAN

Applicant

And  TERRY FOOTE

Applicant

And AUSTRALIAN COMMUNITY PHARMACY AUTHORITY

Respondent

DECISION

Tribunal  Senior Member Bernard J McCabe

Date23 December 2010

PlaceBrisbane

Decision The Tribunal sets aside the decision under review and decides in substitution that a recommendation be made for the application to be approved.

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Senior Member

7.      Significantly, the Tribunal concluded in Hargreaves that more than one pharmacy might operate within a catchment area (at [101]). The potential for overlapping catchments was confirmed in Strutt v Australian Community Pharmacy Authority [2006] FMCA 1245 at [146] per McInnis FM. That conclusion is obviously correct – but it does call into question whether the expression “gravitate” is the best one in the circumstances. My difficulty with the word “gravitate’ in the analysis of a catchment area is that it carries with it an implication that residents are guided by unseen, inexorable forces akin to gravity. That approach may not do enough to focus attention on the choices that are practically open to the residents of a particular area who consume pharmaceutical benefits.

8.      I note that the Explanatory Statement issued by the Minister to accompany the Rules (exhibit one at pp 35-59) uses the word “gravitate” (at p 46). For better or worse, the word has become a feature of the process.

9.      DP Hack used the word ‘gravitate’ in the course of his reasons in Re Fraser Coast Pharmacy Pty Ltd andAustralian Community Pharmacy Authority but emphasised the importance of looking at what residents are likely to do in the face of a choice. The learned Deputy President also accepted the distinction made in Hargreaves between analysing a catchment area and the market definition process. That makes sense. Defining a market for the purposes of Part IV of the Trade Practices Act 1974 is a more sophisticated inquiry directed to a different end – although the two processes have enough in common that the market definition process might hold some lessons for those inquiring into catchment areas. DP Hack also acknowledged that difficulties would arise if too much regard was had to subjective factors that affected individual choices.

10.     Subsequently, DP Hack and Member Kenny refined the analysis in Re Maryborough/Hervey Bay Friendly Society Chemists Ltd andAustralian Community Pharmacy Authority. In that case, the Tribunal put the question like this (at [14]):

“[I]s it likely that a significant number of people from within the area in dispute will naturally and reasonably gravitate or flow to the proposed premises?

11.     I acknowledged that test in the course of my reasons in Elkhishin although I added (at [22]):

I do not need to identify each and every factor that might figure in a resident’s decision to choose a pharmacy, or allocate a weight to that preference. I must merely decide whether the ordinary resident of an area would regard a…