Ross Darnell and Australian Community Pharmacy Authority Dean Sammut OTHER PARTY
[2015] AATA 263
•28 April 2015
[2015] AATA 263
Division GENERAL ADMINISTRATIVE DIVISION File Number
2014/3511
Re
Ross Darnell
APPLICANT
And
Australian Community Pharmacy Authority
RESPONDENT
And
Dean Sammut
OTHER PARTY
DECISION
Tribunal Deputy President P E Hack SC
Date 28 April 2015 Place Brisbane The decision under review is affirmed.
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Deputy President P E Hack SC
CATCHWORDS
PHARMACEUTICAL BENEFITS – application for approval to supply pharmaceutical benefits – “new additional pharmacy” – at least 200 m in a straight line from nearest approved premises – whether located in the same town – interpretation of “town” – ordinary and accepted meaning – does not have attributes of town – decision under review affirmed
LEGISLATION
National Health Act 1953 (Cth), ss 90, 99K
CASES
Walkerden v Wodonga Pharmacy Pty Ltd [2015] FCA 273
Yu v Minister for Health [2013] FCA 261; (2013) 216 FCR 168
SECONDARY MATERIALS
National Health (Australian Community Pharmacy Authority Rules) Determination 2011 (Cth)
REASONS FOR DECISION
Deputy President P E Hack SC
28 April 2015
Introduction
The issue in this case is whether Logan Village, to the south of Brisbane, is a “town”. The issue arises in the context of the National Health (Australian Community Pharmacy Authority Rules) Determination 2011 (Cth) (the 2011 Rules). Those Rules bestow a favourable outcome on the applicant, Mr Ross Darnell, if, relevantly, the pharmacy premises proposed by him are “located in the same town” as, and “at least 200 m, in a straight line” from, approved pharmacy premises operated by the other party in these proceedings, Mr Dean Sammut.
The respondent, the Australian Community Pharmacy Authority, concluded that Logan Village, where Mr Sammut’s pharmacy is situated, and where Mr Darnell seeks to locate his pharmacy, was not a town, with the result that they could not be “located in the same town”.
Mr Darnell, most capably represented by Mr Horton QC, seeks a review of the Authority’s decision.
For the reasons that follow I am of the view that the Authority’s decision was correct. It will be affirmed.
The legislative framework
The Commonwealth Parliament does not directly exercise legislative control over pharmacies; it does so by regulating the supply of “pharmaceutical benefits” by means of the National Health Act 1953 (Cth). By virtue of s 90 of that Act, the Secretary of the Department of Health, upon application by a pharmacist for approval to supply pharmaceutical benefits at particular premises, may approve that pharmacist for the purpose of supplying pharmaceutical benefits at those premises. An application for approval must be referred to the Authority[1] which has the task, by virtue of s 99K of the Act, of considering applications for approval and making a recommendation to the Secretary. In performing that task the Authority is required to comply with rules determined by the Minister; that is, in the present case, the 2011 Rules.
[1]See s 90(3A), National Health Act 1953 (Cth).
Section 10 of the 2011 Rules obliges the Authority to recommend that an application be approved, in the case of an application that does not involve the cancellation of an existing approval, if particular requirements, set out in Schedules to the 2011 Rules, are met. Part 2 of Schedule 1 sets out seven different kinds of application. Given the arguments of the parties it is relevant to set out Part 2 in its entirety. It is in these terms:
Item
Kind of application
Requirements
130 New pharmacy (at least 1.5 km) 1. The proposed premises are at least 1.5 km, in a straight line, from the nearest approved premises.
2. The Authority is satisfied that, at all relevant times, there is:
(a) within 500 m, in a straight line, from the proposed premises:
(i) at least the equivalent of one full-time prescribing medical practitioner; and
(ii) a supermarket with a gross leasable area of at least 1 000 m2; or
(b) within 500 m, in a straight line, from the proposed premises a supermarket with a gross leasable area of at least 2 500 m2.
3. For this item, all relevant times means:
(a) on the day on which the application was made; and
(b) the day on which the application is considered by the Authority.
131 New pharmacy (at least 10 km) The proposed premises are at least 10 km, by the shortest lawful access route, from the nearest approved premises. 132 New additional pharmacy (at least 10 km) 1. The proposed premises are:
(a) located in the same town as an approved premises; and
(b) at least 200 m, in a straight line, from the nearest approved premises; and
(c) at least 10 km, by the shortest lawful access route, from any approved premises other than the approved premises mentioned in paragraph (b).
2. The Authority is satisfied that, at all relevant times, located in the same town as the proposed premises are:
(a) at least the equivalent of 4 full-time prescribing medical practitioners practising; and
(b) one or 2 supermarkets which occupy a combined total gross leasable area of at least 2 500 m2.
3. For this item, all relevant times means:
(a) on the day on which the application was made; and
(b) the day on which the application is considered by the Authority.
133 New pharmacy in a facility (small shopping centre) 1. The proposed premises are in a small shopping centre.
2. The proposed premises are at least 500 m, in a straight line, from the nearest approved premises.
3. There are no approved premises in the small shopping centre.
134 New pharmacy in a facility (large shopping centre) 1. The proposed premises are in a large shopping centre.
2. There are:
(a) for a shopping centre that contains at least 50, but fewer than 100, commercial establishments — no approved premises in the shopping centre; or
(b) for a shopping centre that contains at least 100, but fewer than 200, commercial establishments — no more than one approved premises in the shopping centre; or
(c) for a shopping centre that contains at least 200 commercial establishments — no more than 2 approved premises in the shopping centre.
135 New pharmacy in a facility (private hospital) 1. The proposed premises are in a private hospital.
2. There are no approved premises in the private hospital.
3. The hospital authority for the private hospital is not approved under section 94 of the Act.
4. The private hospital is registered or licensed, under the law of the State or Territory in which the private hospital is located:
(a) to contain at least 150 beds to provide health services to patients; or
(b) to treat, accommodate or lodge at least 150 patients at any one time.
136 New pharmacy in a facility (large medical centre) 1. The proposed premises are in a large medical centre.
2. There are no approved premises in the large medical centre.
3. The proposed premises are at least 500 m, in a straight line, from the nearest approved premises other than an approved premises in a small shopping centre, large shopping centre or private hospital.
4. The Authority is satisfied that, at all relevant times, the number of PBS prescribers at the medical centre is equivalent to at least 8 full-time PBS prescribers, of which at least 7 PBS prescribers must be prescribing medical practitioners.
5. For this item, all relevant times means:
(a) on the day on which the application was made; and
(b) at all times during the 2 months before the day on which the application was made; and
(c) at all times during the 2 months before the day on which the application is considered by the Authority.
6. The Authority is satisfied that the applicant will make all reasonable attempts to ensure that the operating hours of the proposed premises will meet the needs of the patients of the medical centre.
The expression “same town” is not defined in the 2011 Rules however some content is given to the expression by s 5(2) which provides:
(2)If proposed premises are required to be in the same town as an approved premises, the proposed premises are taken to be in the same town if they are located in the same town and postcode as the approved premises.
There are further general requirements set out in Schedule 2 however it is common ground that those requirements were satisfied by Mr Darnell’s application.
If all of the requirements are not met that Authority is bound to recommend that an application not be approved.
The controversial evidence
Mr Sammut relied on evidence from two expert witnesses, Mr Gavin Duane, an economist, and Mr Gregory Vann, a town planner. Mr Horton objected to their evidence in its entirety on the grounds of relevance. His objection, in part at least is well taken however the reports and evidence of Mr Duane in particular are of some assistance in understanding the geographical features of the locality, both as to the built and the natural environment. The report of Mr Duane concludes, by a process of reasoning that need not be considered, that a second pharmacy in the locality would not be viable. Mr Horton’s argument is that such an opinion is entirely irrelevant. I agree. The 2011 Rules are a code of the requirements for a favourable recommendation. If the matters specified in the 2011 Rules are satisfied, the Authority is bound to recommend approval; if they are not, the Authority is bound to recommend that the application not be approved. Nothing in Item 132, or in the general requirements of Schedule 2, requires the Authority to be satisfied of the viability of the proposed pharmacy or the continuing viability of the existing approved premises. The 2011 Rules test the viability by reference to other objective criteria – the number of prescribing medical practitioners, the presence of supermarkets and the like. The opinions of viability are not relevant.
In the result, I pay no regard to the evidence of viability. Mr Duane’s evidence does not assist me.
Other evidence of Mr Duane and the evidence of Mr Vann, to which objection was also taken, included opinions on the meaning to be given to the expression “town”. The evidence is interesting but ultimately of no real assistance. No party submitted that “town”, when used in the 2011 Rules, was to be given other than as ordinary everyday meaning.
Consideration
In Walkerden v Wodonga Pharmacy Pty Ltd,[2] Mortimer J described the scheme created by the Act as “location-based”. Her Honour’s observations thereafter warrant setting out in full:
[12]… This point was made, for different reasons and in a different context admittedly, by Jessup J in Yu v Minister for Health (No 2) [2013] FCA 367; (2013) 216 FCR 188 where his Honour said at 194 ([10]):
… approvals under s 90 or s 90A are not given as benefits or emoluments to particular pharmacists. Rather, the scheme of the NH Act, relevantly, is to ensure that the community is provided with convenient access to pharmacies, conducted by appropriately qualified professionals, for the purpose of obtaining drugs and medicinal preparations which are beneficial in the treatment of sickness or disease but which may, at the same time, be harmful if not properly prescribed and dispensed.
[13]Thus, in accordance with the content of the scheme as filled out by the 2011 Rules, it is the appropriateness of a new pharmacy in a particular location which is the focus of the decision-making process. As part of that focus, consideration is given to the location of other pharmacies. But the principal focus, in my opinion, is on the community’s need for adequate and sustainable access to pharmaceutical benefits and a new application is to be assessed according to criteria designed to advance that objective. The terms of s 90(3D) support this view, as do the Community Pharmacy Agreements, to which I refer in more detail below.
[2][2015] FCA 273 at [12].
Mr Gore QC, who led Mr Batty for Mr Sammut, submitted that, in its context, “same town” in Item 132 meant town in the sense of a distinct locality. That construction is supported by the framework of Part 2 of Schedule 1 to the 2011 Rules.
For a new pharmacy (as distinct from one replacing an existing approval) the basic rule is set out in Item 131 – the proposed premises must be at least 10 km from the nearest approved premises. The remaining items in Part 2 provide exceptions to that general rule in the particular factual circumstances postulated. Thus, a new pharmacy may be recommended for approval as close as 1.5 km from an existing approved premises provided the proposed premises have either a 2500 m² supermarket, or a 1000 m² supermarket and one prescribing medical practitioner within 500 m of the proposed premises. Rule 130, on its face, caters for urban and suburban areas, that is, areas within the boundaries of cities and towns.
Item 132 complements this structure for towns. Within the same town a second premises may be approved provided the town has the supermarket and prescribing medical practitioner characteristics in clause 2 of the Item, the proposed premises are at least 200 m from the existing approved premises and at least 10 km from any other approved premises.
Items 130, 131 and 132 have a generally geographic content. They are supplemented by Items 133, 134, 135 and 136 that set out the criteria to be satisfied for approval within a small shopping centre, a large shopping centre, a private hospital and a large medical centre.
In my opinion, “town” in Item 132 is to be given a meaning that requires it to be a distinct locality. I do not accept that Rule 132 has room to operate in an area like Logan City. Town, in the present context, is to be given this meaning from the Oxford Dictionary:
4.An inhabited place which is larger than a village, contains more businesses and amenities, and typically has more complete and independent local government; now esp. one smaller than, or not officially designated, a city
That accords with what I would regard to be the ordinary and accepted meaning of the term. I accept, as Mr Sammut submits, that the policy intent of the 2011 Rules is not that the Item would apply in well-established urban areas but, rather, that it would be engaged in circumstances involving country towns or other separate locations which have only one approved premises.
Two further matters support that construction. First, it could not be thought to have been the intention of the drafter to permit two pharmacies, 200 m apart, in Logan Village yet prohibit, by virtue of Item 130, the approval of premises within 1.5 km of existing approved premises in the suburbs of Brisbane.
There is, as well, some support to be found in the observations of Jessup J in Yu v Minister for Health[3]. In that case his Honour considered the changes effected by the revocation of the earlier Rules, the National Health (Australian Community Pharmacy Authority Rules) Determination 2006 (Cth) and the making of the 2011 Rules. Having set out the terms of Item 132 of the 2011 Rules, his Honour continued:
The effect of these changes brought about by the Ministerial Determination of 13 September 2011 was profound. Previously, there would be one “approved premises” only within a rural town such as Kilmore, with no possibility of approval being given to a second pharmacy within a 10 km radius. However, under the 2011 Rules, there could be two pharmacies in such a town, so long as the second approved premises were not less than 200 m from the first. The 10 km the rule then applied with respect to subsequent approved premises. These changes were significant because they meant that, for the first time, it would be possible for second pharmacy to be approved under s 90 of the NH Act in Kilmore. [4]
[3][2013] FCA 261; (2013) 216 FCR 168.
[4]Ibid, at [16].
Logan Village cannot be regarded as a town. I do not accept Mr Sammut’s argument that the enquiry begins and ends with the fact the name of the place recognises that the settlement is indeed a village. To adopt such a test would be to ignore the fact that sometimes villages grow into towns and even cities. One cannot define the nature of the locality merely by reference to its history. Logan Village was undoubtedly a village when first given its name; however, there are more compelling reasons in its present features for not regarding it as a town.
Logan Village is quite small and, as Figure 3 on Mr Vann’s report demonstrates, its settlement is sparse. There is a primary school but no high school. There is no post office, no ambulance station, no fire brigade, no swimming pool, no taxi rank, very limited public transport and none of the popular fast food franchises (in itself, it might be thought, a blessing). There is what was described as a “police beat”, a concept I understood to reflect a police presence short of a police station. There is a small shopping centre containing a solicitor’s practice, a complementary medicine outlet, a medical centre, Mr Sammut’s pharmacy and a hairdresser. There is a newer shopping centre constructed after 2012 presently containing a supermarket with a floor area of 2,800 m2, a newsagency, Mr Darnell’s proposed pharmacy, a medical centre and a takeaway food shop. There is a third area presently containing a convenience store, a dentist, a veterinary surgery, a real estate agency, a bakery and a hairdresser. There is no butcher and no coffee shop.
Mr Duane, in evidence that I regard as relevant and admissible, draws a comparison between Logan Village and two locations clearly identifiable as towns, Gatton and Maleny. Gatton, according to that evidence, has a council chambers, police, fire and ambulance service, a public transport system and a local newspaper as well as a range of retail establishments.
By comparison the development and the level and nature of the facilities in Logan Village demonstrate that it does not have the attributes of the town. If anything, I would regard it in fact, as well as in name, as a village.
I am then not satisfied that Logan Village is a town. The result is that the proposed premises are not located in the same town as Mr Sammut’s approved premises and, accordingly, the criteria for Item 132 are not satisfied. The decision under review was correct and will be affirmed.
I certify that the preceding 25 (twenty-five) paragraphs are a true copy of the reasons for the decision herein of Deputy President P E Hack SC
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Associate
Dated 28 April 2015
Date of hearing 25 March 2015 Counsel for the Applicant Mr J Horton QC Solicitors for the Applicant Bennett & Philp Counsel for the Respondent Mr A Dillon Solicitors for the Respondent Australian Government Solicitor Counsel for the Other Party Mr DR Gore QC & Mr MJ Batty Solicitors for the Other Party ACS Legal Solutions
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