PLCT Pty Limited v Secretary, Department of Health
[2019] FCA 2212
•16 December 2019
FEDERAL COURT OF AUSTRALIA
PLCT Pty Limited v Secretary, Department of Health [2019] FCA 2212
File number: NSD 2078 of 2019 Judge: RARES J Date of judgment: 16 December 2019 Catchwords: REMEDIES – application for interlocutory injunction to restrain Secretary of Department of Health from determining an application under s 90(1) and 90(3) of the National Health Act 1953 (Cth) – where approved pharmacist sought to relocate to and supply pharmaceutical benefits at new premises – where Australian Community Pharmacy Authority recommended to Secretary that application be approved under r 10 of Sch 1 of the National Health (Australian Community Pharmacy Authority Rules) Determination 2018 (Cth) – where delays in construction of building caused opening day of new premises for trade to be delayed – where s 90(3D) does not require Secretary to make a decision within any particular timeframe but to consider all the circumstances – Held: interlocutory injunction granted Legislation: Corporations Act 2001 (Cth) Pt 5.3A
National Health Act 1953 (Cth) ss 90, 99M, 105AB
National Health (Australian Community Pharmacy Authority Rules) Determination 2018 (Cth) r 10, item 124 of Sch 1
Cases cited: Australian Broadcasting Corporation v O’Neill (2006) 227 CLR 57
Collector of Customs (NSW) v Brian Lawlor Automotive Pty Ltd (1979) 24 ALR 307
Graham v Minister for Immigration and Border Protection (2017) 263 CLR 1
Minister for Immigration and Citizenship v Li (2013) 249 CLR 332
Date of hearing: 16 December 2019 Registry: New South Wales Division: General Division National Practice Area: Administrative and Constitutional Law and Human Rights Category: Catchwords Number of paragraphs: 32 Counsel for the Applicants: Mr T Flaherty Solicitor for the Applicants: Michael Flaherty Solicitor Counsel for the Respondent: Mr T Giugni of Australian Government Solicitor ORDERS
NSD 2078 of 2019 BETWEEN: PLCT PTY LTD ACN 605 520 901
First Applicant
PURPLE PHARMACEUTICALS PTY LTD ACN 619 041 762
Second Applicant
AND: SECRETARY, DEPARTMENT OF HEALTH
Respondent
JUDGE:
RARES J
DATE OF ORDER:
16 DECEMBER 2019
Upon the applicants, by their counsel, giving to the Court the usual undertaking as to damages:
THE COURT ORDERS THAT:
1.Unless the Court otherwise orders up to and including 2 March 2020, the respondent, by herself, her servants, delegates and agents be restrained from refusing the applicants’ application pursuant to s 90 of the National Health Act 1953 (Cth) for approval to supply pharmaceutical benefits at premises Tenancy 1 Ground Floor 283 – 285 Heaths Road, Werribee, Victoria.
2.Any party have liberty to apply on such notice as to a Judge seems fit.
3.The matter be stood over to 13 March 2020 for case management.
4.Costs be reserved.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
(REVISED FROM THE TRANSCRIPT)RARES J:
This is an application by PLCT Proprietary Limited and Purple Pharmaceuticals Proprietary Limited for an interlocutory injunction restraining the Secretary of the Department of Health from determining an application under s 90(1) and 90(3) of the National Health Act 1953 (Cth) for an approved pharmacist to relocate its premises, within up to one kilometre from the existing premises, to supply pharmaceutical benefits in Werribee, Victoria.
The statutory context
The Act provides:
90 Approved pharmacists
(1)Subject to this section, the Secretary may, upon application by a pharmacist for approval to supply pharmaceutical benefits at particular premises, approve that pharmacist for the purpose of supplying pharmaceutical benefits at those premises.
Note: There is an application fee for the application: see subsection (9).
[…]
(3)Subject to this section, where an approved pharmacist desires to supply pharmaceutical benefits at premises other than premises in respect of which approval has been granted, the Secretary may on application by the approved pharmacist, grant approval in respect of those other premises.
Note: There is an application fee for the application: see subsection (9).
(3A)Subject to subsections (3AA), (3AE) and (13), an application under this section must be referred to the Authority.
[…]
(3B)An approval may be granted under this section in respect of an application that has been referred to the Authority under subsection (3A) or (3AF) only if the Authority has recommended the grant of the approval, but the Secretary may refuse to grant an approval even if the grant has been recommended by the Authority.
[…]
(3D)The Secretary must not grant approval under this section to a pharmacist in respect of particular premises if the Secretary is satisfied that on or after the day the approval would otherwise be granted:
(a)the pharmacist would be unable to supply pharmaceutical benefits at the premises; or
(b)the premises would not be accessible by members of the public for the purpose of receiving pharmaceutical benefits at times that, in the opinion of the Secretary, are reasonable.
[…]
(6)For the purposes of this section, a reference to a pharmacist is taken to include a reference to a person who owns, or is about to own, a business for the supply of pharmaceutical benefits at particular premises.
99MPowers
The Authority has power to do all things necessary or convenient to be done for, or in connection with, the performance of its functions.
(emphasis added)
Background
The applicants applied to the Secretary for her approval of the relocation under s 90(3) in about early April 2019. The application referred to a new building being constructed in Werribee to which the applicants proposed to move their existing pharmacy once it was completed. On 17 May 2019, the Australian Community Pharmacy Authority recommended to the Secretary that she approve the application. On 22 May 2019, the Department wrote to the applicants advising them of the Secretary’s recommendation and imposing a condition that 20 business days before the anticipated (but unstated) opening date, the applicants confirm with the Department that the premises met the requirements of the Victorian Pharmacy Authority and that they would be ready to open and supply pharmaceutical benefits from that opening day.
In making its recommendation, the Authority acted in accordance with the provisions of item 124 of Sch 1 to, and r 10(3)(e) of, the National Health (Australian Community Pharmacy Authority Rules) Determination 2018 (Cth) made by the Minister for Health under the Act. The Authority had to be satisfied in making a recommendation that, under r 10(3)(e), within six months of it doing so, an applicant would be able to begin operating a pharmacy at the proposed premises.
During the period between the making of the application and October 2019, a number of delays occurred in the construction work, including due to significant periods of inclement weather and the difficulties that the relevant local electricity distributor experienced in seeking to connect power to the proposed premises.
The applicants have continued to supply pharmaceutical benefits from their approved premises in nearby Hoppers Crossing, enabling persons in the area to receive pharmaceutical benefits as contemplated by the Act. There is no suggestion that any third party has made, or is interested in making, any application to supply pharmaceutical benefits under s 90 of the Act that could affect the consideration of the applicants’ application.
On 25 October 2019, the senior property manager of the My Chemist, or Chemist Warehouse, Group, as agent for the applicants, wrote to the Department to inform it of the construction delays. The property manager attached a letter from the project’s builder dated 18 October 2019 to support its claims for extensions of time under the building contract, which included copies of the daily weather observations of the Australian Bureau of Meteorology for the period between April and September 2019.
The property manager’s email provoked a response from the delegate of the Secretary dated 1 November 2019. The delegate invited the agent to make submissions in relation to the delegate’s proposed decision not to grant approval under s 90. The letter relied on the provisions of s 90(3D). The delegate noted at that stage that the original date of 14 October 2019 when the new pharmacy was supposed to be ready and open to trade had passed and noted that the applicant had revised the anticipated opening date to 2 March 2020. The delegate said that, “[b]ased on the material before me”, she had made findings of fact that when the Authority made its “decision”, it was satisfied that the applicants would be able to supply pharmaceutical benefits at the proposed premises by 14 October 2019. The delegate said that it had been over five months since the Authority had made that “decision” and the applicants had not yet been approved to supply pharmaceutical benefits at the proposed premises. The delegate said that she was “not prepared to delay making my decision, under section 90 of the Act, to 2 March 2020” and that she was minded to reject the application.
On 15 November 2019, the applicants’ solicitors wrote a detailed submission noting that the delegate’s letter had made no reference to any of the material that the agent had supplied on 25 October 2019 or considered their circumstances. The letter attached the builder’s updated construction program. It noted that the delays that had occurred represented “unexceptional incidents” in commercial construction, particularly given the inclement weather, difficulties with infrastructure services provided by third parties and the anticipated, normal, delays that would occur during the Christmas/New Year holiday period. The applicants again sought that the Secretary not determine their application but allow the matters to progress in the ordinary course. They sought an undertaking that, if the Secretary were not minded to do so, the applicants be given seven days’ notice of her intention to make a determination.
On 19 November 2019, the delegate’s, or the Secretary’s, solicitors conveyed their instructions not to give any undertaking to refrain from making a decision until 2 March 2020 and suggested that an application of the present kind to the Court would be premature in circumstances where, should the Secretary or delegate refuse the application, the applicants could apply to the Administrative Appeals Tribunal for merits review of the refusal under s 105AB(7) of the Act.
The solicitor for the applicants responded on the same day, noting that, once again, there had been no engagement, on the Secretary’s or delegate’s part, with the substantive matters that the applicants had raised about the factual basis on which they needed further time while the building work was completed.
On 22 November 2019, the Secretary’s solicitors responded, saying that they were instructed that although the Secretary (or her delegate) had considered the material provided on the applicants’ behalf, that person was concerned that the evidence suggested that the construction works were substantially incomplete. The letter asserted that “it is difficult to conclude that construction of the proposed premises has meaningfully progressed”. The letter reiterated the opportunity to seek merits review and asserted that the Secretary may have grounds to refuse the application under s 90(3D)(a).
On 28 November 2019, the applicants’ solicitors responded, attaching further material from the builder who stated that the car park of the basement area was then complete with all services installed, the building had been erected, was secure, the retail pharmacy fit-out had commenced, and the main switchboard had been installed and energised. The letter attached photographs of the state of some of the construction work, which supported the builder’s observations.
On 6 December 2019, the solicitors for the Secretary responded, saying that she was still not minded to defer making any decision until 2 March 2020 or to provide an undertaking that before making a decision she would give the applicants seven days’ notice. The solicitors warned that the Secretary may proceed to make a decision at any time.
On 9 December 2019, the Secretary’s solicitors formalised her position by asserting that the word “may” in s 90(1) of the Act imposed a duty on the Secretary to exercise her power one way or another. The Secretary asserted that once the Authority had made a recommendation to her, she came under a duty to deal with an application by exercising her power whether or not to approve it and that s 90(3D) required her not to approve an application if satisfied that either of the conditions in that provision had occurred. The letter noted that the Act was silent as to the time within which the Secretary had to make a decision, but asserted that she was bound to do so without unreasonable delay. The Secretary’s solicitors also asserted that she was being asked to delay making a decision by several months from the point at which the statutory processes for the purpose of obtaining the Authority’s recommendation under rr 10(1) and 10(3)(e), that the application be approved, ought to have been completed. However, the solicitors acknowledged that r 10 did not establish a time limit. The letter asserted that it was not in the public interest to allow lengthy periods of inactivity in the processing of an application under legislation or allow an application simply “to sit around waiting to be processed”. It said that “Even allowing, as suggested above, a measure of latitude, the Secretary would be in derogation of her duty to decide under s 90(1) if she accepted requests by applicants to delay her consideration for months at a time based on the vagaries of commercial matters such as building timeframes and the like”. The letter, again, referred to the right to merits review in the Tribunal and gave an undertaking not to make a decision until on or after 17 December 2019.
On 13 December 2019, the applicants filed their originating application in this Court and sought interlocutory relief restraining the Secretary from determining their application until further order.
The Secretary has appeared today to oppose the making of the order.
Consideration
The process, in s 90(3), for the approval of alternate premises from which an approved pharmacist may supply pharmaceutical benefits contemplates that such an approval may be sought in a variety of situations. For example, these can be, such as in the present case, where the approved pharmacist desires to move to new premises that are under construction, or are to be constructed, but wishes to ascertain whether there would be any impediment under the Act in doing so before embarking on the commercial venture of arranging, or becoming involved in a project, to construct new premises. Not only can such a situation involve an applicant buying or leasing the new premises, but it can also involve raising finance for the new premises and their fit out. All that r 10(3)(e) requires is that the Authority be satisfied, at the date of its recommendation, that, if matters go to plan, the new premises will be able to open within six months of that recommendation. In other instances, it may be that the approved pharmacist wishes to move to an area quite remote from the community in which he, she or it currently operates its approved premises, and there may well be other situations in which the approved pharmacist seeking to move to new premises would then be competing for approval with other persons applying to supply pharmaceutical benefits in the same area, creating situations in which more than one commercial interest could or would be involved in the approval process.
As I have noted, there is no suggestion in the present case that there is any other person who may be affected by the consideration of the current application or the timing of when the new premises will be able to operate.
In my opinion, on the material presently before me, bearing in mind that this is an interlocutory matter and I have not heard final submissions or argument, there is a sufficiently cogent, prima facie case that s 90(3D) does not operate to require the Secretary to make a decision with more haste than in all of the circumstances is reasonable.
In Graham v Minister for Immigration and Border Protection (2017) 263 CLR 1 at 30 [57], Kiefel CJ, Bell, Gageler, Keane, Nettle and Gordon JJ said of a statutory discretion in that case:
the statutory discretion enlivened on fulfilment of those statutory conditions must in each case be exercised by the Minister “according to the rules of reason and justice, not according to private opinion; according to law, and not humour, and within those limits within which an honest man, competent to discharge the duties of his office, ought to confine himself” [R v Anderson; Ex parte Ipec-Air Pty Ltd (1965) 113 CLR 177 at 189, citing Sharp v Wakefield [1891] AC 173 at 179. See Minister for Immigration and Border Protection v Stretton (2016) 237 FCR 1; Minister for Immigration and Border Protection v Eden (2016) 240 FCR 158].
(emphasis added)
In Minister for Immigration and Citizenship v Li (2013) 249 CLR 332 at 362 [63] and 365 [71] (see also at 363 [65]), Hayne, Kiefel and Bell JJ said that:
The legislature is taken to intend that a discretionary power, statutorily conferred, will be exercised reasonably [Attorney-General (NSW) v Quin (1990) 170 CLR 1 at 36; Kruger v The Commonwealth (1997) 190 CLR 1 at 36; Minister for Immigration and Multicultural Affairs v Eshetu (1999) 197 CLR 611 at 650 [126]; Minister for Immigration and Citizenship v SZIAI (2009) 83 ALJR 1123 at 1127 [15]; 259 ALR 429 at 433].
[…]
In Secretary of State for Education and Science v Tameside Metropolitan Borough Council [[1977] AC 1014 at 1064], Lord Diplock opined that unreasonableness would be shown where “no sensible authority acting with due appreciation of its responsibilities” would have so decided. This reflects the requirement of the law that a decision-maker understand his or her statutory powers and obligations. It is evident in the more specific errors, going to jurisdiction, which the law recognises and to which Lord Greene MR referred in Wednesbury [[1948] 1 KB 223 at 228], such as misdirecting oneself as to the operation of the statute, taking into account irrelevant considerations or failing to take into account relevant considerations.
(emphasis added)
In Li 249 CLR 332, the High Court quashed the decision of the Migration Review Tribunal that had refused the respondent an adjournment for a short time. She had requested the adjournment so as to enable her to obtain an educational qualification that she needed as a requirement of a favourable decision. Hayne, Kiefel and Bell JJ said (at 368-369 [82]-[83]):
It cannot be suggested that the Tribunal is under an obligation to afford every opportunity to an applicant for review to present his or her best possible case and to improve upon the evidence. Of course it may decide, in an appropriate case, that “enough is enough”, but it is not apparent how that conclusion was reached in the present case, having regard to the facts and to the statutory purpose to which the discretion to adjourn is directed.
The purpose of s 360(1) has already been referred to. It is to provide an applicant for review the opportunity to present evidence and arguments “relating to the issues arising in relation to the decision under review”. The question which remained in issue when the Tribunal made its decision was the satisfaction of a visa criterion by a complying skills assessment. Although the Tribunal could not be expected to assume that the second skills assessment, when reviewed, would favour Ms Li, it did not suggest that there was no prospect of the second skills assessment being obtained, or that the outcome could not be known, in the near future. In these circumstances it is not apparent why the Tribunal decided, abruptly, to conclude the review.
(emphasis added)
In the present case, the material before the Secretary demonstrated that, through no fault of their own, the applicants had experienced delays in the construction and building work for the proposed new premises and that those delays were expected to push out, until early March 2020, the date when the premises were anticipated to be ready for occupation and use as a pharmacy. The material gave what appeared to be a detailed and reasonable explanation for the delays that had been experienced. No material identified by the Secretary, the delegate or their solicitors suggested that the applicants’ explanation was not supported by what they had submitted. Nor did the Secretary, the delegate or their solicitors point to any actual or potential prejudice to any third party, the public or the administration of the Act such as could, or would, justify refusing the application in the circumstances.
Rather, the Secretary took the doctrinaire, and unyielding, course of asserting that she was required to make a decision one way or the other and would not delay doing so despite the recommendation of the Authority in favour of the change of premises and the circumstances in which the delays had occurred.
In my opinion, s 90(3D) does not require the Secretary to make a decision within any particular timeframe. Rather, the section simply provides that she must not grant approval to a pharmacist under s 90 in respect of particular premises if satisfied that, on or after the day the approval “would otherwise be granted”, the pharmacist would be unable to supply pharmaceutical benefits at the premises or that those premises would not be accessible by members of the public for the purpose of receiving pharmaceutical benefits at times that, in the opinion of the Secretary, would be reasonable. The second of those conditions expressly imported the concept of reasonableness into the Secretary’s decision-making process. But that concept was also not displaced by any other provision in s 90 itself.
I am of opinion that the purpose of s 90(3D) is to allow the Secretary to consider all of the circumstances. For example, if the pharmacist were a corporation that was in administration under Pt 5.3A of the Corporations Act 2001 (Cth), the Secretary might be able to form a view one way or another as to whether the pharmacist would be able to supply pharmaceutical benefits at the new premises, on the date it was anticipated the premises would be ready in the ordinary course, or after an extension of time such as may be occasioned in a case like the present. In other words, in such a scenario, by the day that the approval “would otherwise be granted”, the pharmacist may be in liquidation or the administrators may be seeking to have the approval in favour of that pharmacist transferred to a third party. The expression “on or after the day the approval would otherwise be granted”, prima facie, appears to look to the future for the purposes of identifying a reasonable time at which the approval would be granted and whether the then circumstances are such that the pharmacist would be unable to supply pharmaceutical benefits at the premises at that time. The expression does not appear to import, at least for the purposes of this interlocutory decision, that the Secretary can impose a date with the effect of frustrating the operation of a recommendation for approval that is not otherwise objectionable simply because the Secretary feels impelled to make a decision one way or another regardless of the practical reality or the particular circumstances in which that occurs.
Section 90 seeks to deal with both the position of approved pharmacists and approved premises from the perspective of the important administrative functions of the Secretary under the Act. It deals with and accommodates the practical realities that face pharmacists in the business of supplying pharmaceutical benefits in a location and who seek to relocate to and or to operate from premises that, in some cases, are immediately ready and suitable for the purpose and, in other cases, require more or less work before that can occur in a commercial and orderly way. And, there will be occasions where other persons’ interests are affected by any delays of a particular applicant in pursuing, or being able to progress, with an application for approval.
But there are no such considerations evident in the present case where all that appears to have occurred is that, after the applicants received a favourable recommendation by the Authority, they have experienced delays outside their control in the construction of the new proposed premises. There is no material before me to suggest that the Secretary, in the circumstances of the unfortunate and unexpected delays in the building work, has any reasonable basis for considering that the Authority’s recommendation should no longer be treated as appropriate in determining whether or not to approve the application on its merits under s 90(3) in due course.
I reject the Secretary’s argument that if she had refused the application, the applicants could have proceeded to seek merits review in the Tribunal. That contention does not seem to me to be a reasonable or sensible response, reflecting the dictates of good government, which the Secretary ought to have adopted in the current circumstances: cf. Collector of Customs (NSW) v Brian Lawlor Automotive Pty Ltd (1979) 24 ALR 307 at 334-335 per Smithers J. An application to the Tribunal would be expensive and uncertain and, in my opinion, unnecessary.
I am satisfied that the applicants have established, first, a sufficient prima facie case that they are likely to succeed at a trial in obtaining an order requiring the Secretary to consider their application according to law and, secondly, that the balance of convenience is overwhelmingly in their favour: Australian Broadcasting Corporation v O’Neill (2006) 227 CLR 57 at 81-82 [65] per Gummow and Hayne JJ, with whom Gleeson CJ and Crennan J agreed (at 68 [19]).
Conclusion
For the reasons I have given, there is a prima facie case that the Secretary has not correctly understood how s 90 operates in circumstances such as this. I will order that the Secretary be restrained from exercising her power to refuse the application up to 2 March 2020, unless the Court otherwise orders (for example, if a material new fact emerges or occurs). I will reserve the costs of the interlocutory application.
I certify that the preceding thirty-two (32) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Rares. Associate:
Dated: 4 February 2020
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