Rogers, Alan v Australian Community Pharmacy Authority

[1996] FCA 750

CATCHWORDS

ADMINISTRATIVE LAW - Australian Community Pharmacy Authority - approval for relocation of pharmacy - delay in making decision as to recommendation - whether reasonable

National Health Act 1953 (Cth): s 90

Thornton v Repatriation Commission (1981) 35 ALR 485

Alan Rogers & Ors v Australian Community Pharmacy Authority
(No. QG 70 of 1996)

Judge:    Heerey J
Date:        2 August 1996
Place:    Brisbane

IN THE FEDERAL COURT OF AUSTRALIA )
  )
QUEENSLAND DISTRICT REGISTRY     )        No. QG 70 of 1996
  )
GENERAL DIVISION                 )

B E T W E E N:

ALAN ROGERS
  ANTHONY PROUT
  DAVID KENNEDY
                   CLARE FRANCES ROGERS
  Applicants
  - and -

AUSTRALIAN COMMUNITY PHARMACY AUTHORITY

Respondent

JUDGE:    Heerey J

DATE:        2 August 1996

PLACE:    Brisbane

MINUTES OF ORDER

The Court orders that:

1. The application is dismissed with costs, including reserved costs.

NOTE: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules

IN THE FEDERAL COURT OF AUSTRALIA )
  )
QUEENSLAND DISTRICT REGISTRY     )        No. QG 70 of 1996
  )
GENERAL DIVISION                 )

B E T W E E N:

ALAN ROGERS
  ANTHONY PROUT
  DAVID KENNEDY
                   CLARE FRANCES ROGERS
  Applicants
  - and -

AUSTRALIAN COMMUNITY PHARMACY AUTHORITY

Respondent

JUDGE:    Heerey J

DATE:          2 August 1996

PLACE:    Brisbane

REASONS FOR JUDGMENT

This application under the Administrative Decisions (Judicial Review) Act 1977 (Cth) seeks review of what is said to be the failure of the Australian Community Pharmacy Authority (the Authority) to make a decision to recommend to the Secretary, Department of Health and Family Services (the Department) an application by the first three applicants for approval for the relocation of a pharmacy to premises at the corner of Moggill Road and Marshall Lane, Kenmore. There was also a linked application by the fourth applicant to relocate her pharmacy to the premises which will be vacated by the first three applicants if their application to the Secretary is successful. For convenience I use the term "applicants" as meaning, unless the context otherwise indicates, the first three applicants.

The application for review alleges that there has been an unreasonable delay by the Authority in making a decision whether to recommend.  As the argument developed however, the applicants' case was more that the reason given by the Authority for declining to make a decision was legally irrelevant.

Scheme of Legislation
Section 90 of the National Health Act 1953 (Cth) requires approval by the Secretary to the Department for the supply of pharmaceutical benefits on demand at particular premises. Under s 90(1) approval may be given for a pharmacist for the supply of benefits at or from those premises. Under s 90(c) where an approved pharmacist desires to supply benefits at or from premises other than premises in respect of which approval has been granted, the Secretary may grant an approval in respect of such other premises. In other words, s 90(c) is applicable where an approved pharmacist wishes to move to other premises.

By s90(3A) an application for approval must be referred to the Authority. Section 90(3A) provides that an approval may be granted under the section only if the Authority has recommended the grant of the approval, but the Secretary may still refuse to grant an approval even if the grant has been recommended by the Authority. By s 99L(1)(a) the Minister must, by writing, determine the rules subject to which the Authority is to make such recommendations.

The Minister made rules (No. PB 6 of 1995) on 2 May 1995. These rules provide by para 4 that approval of a pharmacist under s 90 of the Act in respect of particular premises must not be recommended except as provided for in paras 5 to 8. Paragraph 5 deals with what I might call new premises and provides that approval "must be recommended" if the applicant has "a legal right to occupy those premises" and a number of other requirements are met, including being at least two kilometres from the nearest other premises in respect of which a pharmacist is approved and the Authority being satisfied that there is a "definite community need for pharmaceutical services in the area in which those premises are situated". By para 2 "definite community need" is defined by reference to various specified conditions in the catchment area such as population, proportion of disadvantaged persons, adequate service by other approved pharmacists, public transport system etc. Paragraphs 6 and 7 both deal with the situation where an applicant proposes to cease supplying pharmaceutical benefits in respect of "other premises", that is to say the case contemplated by s 90(3). Paragraph 7 has special provisions for premises in a "large shopping centre". In both paras of 6 and 7 it is again an essential requirement that the applicant has a "legal right to occupy" the premises for which approval is sought.

Paragraph 8 imposes some conditions relating to the time for which approval has been held. Paragraph 9 provides that where the Authority recommends approval of a pharmacist under s 90 in respect of particular premises, the recommendation for approval will lapse (unless the Authority has granted an extension) if the pharmacist has not been granted approval within six months.

Finally, s 99M of the National Health Act provides that the Authority has the power "to do all things necessary or convenient to be done for, or in connection with, the performance of its functions".

Applications to the Authority for Recommendation
On 5 January 1996 the applicants applied to the Health Insurance Commission for approval to relocate an existing pharmacy to the site at the corner of Moggill Road and Marshall Lane.  That application was forwarded to the Authority where it was received a few days later.

However, the Authority had already, on 20 November 1995, recommended approval to another approved pharmacist, a Mr S M Jarden, in respect of the same premises.

The nub of the present problem is that Mr Jarden claims that he has a binding agreement for a sub-lease of the premises from the lessee Medihelp Pty Ltd.  Medihelp disputes this and has apparently entered into some arrangement with the applicants.

At its meeting on 14 February 1996 the Authority deferred the applicants' application for recommendation.

At a later meeting on 21 March the Authority again recommended that the application be deferred.  In a letter to the applicants' solicitors dated 28 March the Authority stated, amongst other things:

The ACPA were advised that as an earlier successful applicant for the same site had undertaken legal action with respect to their right to occupy the site the Authority is unable to consider your applications until these issues have been resolved.

The legal action referred to was a proceeding initiated in the Supreme Court of Queensland by Mr Jarden against Medihelp on 18 March seeking a declaration as to the existence of a valid and subsisting agreement for a sub-lease between Medihelp and himself, and an order for specific performance.

On 11 April the solicitors for the applicants wrote to the Authority asserting

There is nothing in the Act or the Rules which requires or in our submission, permits the ACPA to defer consideration of an application.  It is not the concern of the ACPA that it may previously have made favourable recommendation in respect of a particular site.  It must continue to perform its function to consider and make recommendations in respect of applications referred to it and in doing so much comply with the Rules.

The deferral of our clients' applications for what is an indefinite period will cause them significant financial and commercial damages.

The letter asked for confirmation that at the next meeting of the Authority on 30 April the application would be considered.

On 19 April the Secretary of the Authority replied to the applicants' solicitors.  He referred to Mr Jarden's application and the fact that it had been recommended in accordance with the rules.  The letter stated that Mr Jarden's recommendation had a life of only six months which would expire on 20 May unless extended under the discretion available to the Authority.  The letter continued:

It has been claimed by your clients that they have the only legal right to the site in question.  The ACPA has been requested by the first applicant [Mr Jarden] to extend that recommendation but in view of the above situation the applicant has been asked to provide evidence as to why it should extend the original recommendation.

Any evidence as to the status of the legal right to the site in question you can provide to the Authority would be most helpful.

As the original recommendation does not expire until mid May 1996 and may be extended by the ACPA, I am in no position to concede to your demands.

Conclusion
The application for an order of review was filed on 3 May 1996.  It is common ground between the parties that the lawfulness of the Authority's decision has to be considered as at that date.  It is also not in dispute that the decision is one to which the AD(JR) Act applies.

The leading authority on the question of delay in administrative decision-making is the decision of Fisher J in Thornton v Repatriation Commission (1981) 35 ALR 485. In that case the Repatriation Commission had deferred making a decision on a pension claim until the High Court had given a decision in an appeal in another case. His Honour said (at 492):

The question is whether there are circumstances which a reasonable man might consider render this delay justified and not capricious.  In the first instance it is, on the evidence, a delay for a considered reason and not in consequence of neglect, oversight or perversity.  Moreover, it is a delay for a finite and not an indefinite period.  Admittedly it is uncertain when the High Court will hand down its decision, but one is not entitled to assume that there will be any excessive delay.

Applying those principles, I am satisfied that up until 3 May 1996 the Authority acted lawfully and reasonably in the way it dealt with the applicants' application (I do not of course
suggest that its conduct was necessarily different after that date).  The Authority could not make a recommendation in favour of an applicant unless the applicant had a "legal right to occupy" the premises in question.  Up to and including 3 May, there was legitimate doubt as to whether Mr Jarden had such a right.  If he did have a right, it would follow of course that the applicants did not.  As part of its function the Authority was entitled, and I would think obliged, to make such enquiries as were necessary to enable it to consider properly the various criteria which the rules make relevant.  For example, the definition of "definite community need" covers a number of demographic and other circumstances and one can readily imagine that the Authority on occasions might want more information about some of these matters.  In the same way, when the question of legal right to occupy is an issue, the Authority can and should make appropriate enquiries.

Considered purely in terms of the period which elapsed, I do not think the time taken until 3 May is unreasonable.  It was virtually conceded by counsel for the applicants that the real question is whether the reason for the delay was one which could be lawfully taken into account.  As in Thornton, the delay taken in awaiting the outcome of Mr Jarden's position was not indefinite.  It was for a rational and considered reason and was therefore not unreasonable.

The application will be dismissed with costs, including reserved costs.

I certify that this and the preceding seven (7) pages are a true copy of the reasons for judgment of his Honour Justice Heerey.

Dated:

Associate

Appearances

Counsel for the applicants:      Mr M Daubney

Solicitor for the applicants:     McCarthy & Holzberger

Counsel for the respondent:      Mr N J Thompson

Solicitor for the respondent:     Australian Government

Solicitor

Date of hearing:                 30 July 1996