Seed and Australian Community Pharmacy Authority

[2017] AATA 575

Seed and Australian Community Pharmacy Authority [2017] AATA 575 (27 April 2017)

Division:GENERAL DIVISION

File Number(s):      2016/3393

Re:Geoff Seed

APPLICANT

Australian Community Pharmacy AuthorityAnd  

RESPONDENT

DECISION

Tribunal:Deputy President Bernard J McCabe

Date:27 April 2017

Place:Sydney

The decision under review is set aside. The Tribunal decides in substitution to recommend to the Secretary of the Department of Health that the application to supply pharmaceutical benefits under the National Health Act 1953 from the proposed premises situated in Erina on the Central Coast of New South Wales be approved.

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Deputy President Bernard J McCabe

CATCHWORDS

HEALTH AND COMMUNITY SERVICES – pharmaceutical benefits – application for approval to supply pharmaceutical benefits – whether the proposed premises ‘are not directly accessible by the public from within a supermarket’ – whether the proposed premises is a supermarket – statutory interpretation – primary business – decision under review is set aside and the Tribunal decides in substitution to recommend to the Secretary of the Department of Health that approval to supply pharmaceutical benefits from the proposed premises be granted

LEGISLATION

National Health Act 1953 s 99K

CASES

Nidigal and Australian Community Pharmacy Authority [2007] AATA 1987

SECONDARY MATERIALS

Explanatory Memorandum, National Health (Australian Community Pharmacy Authority Rules) Determination 2011 (No. PB 65 of 2011)

Gosford Local Environmental Plan 2014

National Health (Australian Community Pharmacy Authority Rules) Determination 2011 sch 2, item 211; item 212(b)

REASONS FOR DECISION

Deputy President Bernard J McCabe

27 April 2017

1. The applicant sought approval to supply pharmaceutical benefits from premises located in Erina on the central coast of New South Wales. The premises are located in a free-standing house. The applicant proposes running a pharmacy from the location as part of a larger business supplying groceries and other domestic items. The Australian Community Pharmacy Authority (the Authority) recommended the application not be approved. The reviewable decision to that effect is dated 10 June 2016. On 28 June 2016 the applicant sought review of that decision.

2. The Authority is required to assess applications for approval to supply pharmaceutical benefits against the National Health (Australian Community Pharmacy Authority Rules) Determination 2011 (the Rules) and make a recommendation to the Secretary of the Department of Health under s 99K of the National Health Act 1953. The dispute in this case revolves around the interpretation of expressions used in the Rules.

3. In particular, I must consider whether the proposed premises ‘are not directly accessible by the public from within a supermarket’ within the meaning of item 212(b) of the Rules. A further issue that arose under item 211(c)(i) of the Rules – namely, whether the proposed premises ‘could be used for the operation of a pharmacy under applicable local government and state or territory laws relating to land development…’ fell away at the outset of the hearing.

   THE PROPOSED PREMISES

4. The proposed premises are located in a freestanding house with parking spaces in Erina. There are no other structures on the site. The site is located adjacent to a shopping centre. No other businesses are to be conducted from the location in question apart from the business proposed by the applicant.

5. The applicant proposes the pharmacy would operate from within the remodelled house. The dispensary is to form part of a larger retail business that would be carried on by the applicant from the premises. To that end the applicant has obtained development approval to conduct a ‘neighbourhood shop with an ancillary dispensary’. Therein lies the issue: item 212(b) of the Rules says pharmacy premises must not be ‘directly accessible by the public from within a supermarket.’

6. I was supplied with floor plans for the proposed premises. They are reproduced in exhibit one at p 120. They show the dispensary area within the retail premises. The plan indicates the dispensary occupies 10.78m² of space within the premises. The retail component (excluding the dispensary) occupies 68m².

7. To access the dispensary, a customer will walk through the front door of the premises, past the checkout on the left and the ‘General Grocery’ section on the right, and past shelves of ‘General Merchandise’. The shelves containing ‘Personal Care’ items – the kind of items one often finds for sale in a pharmacy – are located behind the checkout, away from the thoroughfare between the front door and the dispensary.

8. The applicant says he does not intend to operate the dispensary as a discreet business or as a concession within a business. He is planning to operate a single integrated business from the one location, and that business will occupy the whole of the premises: Statement of Issues, Facts and Contentions of the Applicant, dated 5 October 2016, at [31].

   DOES THE PROPOSAL SATISFY THE RULES?

9. Two issues potentially arise under item 212(b). The first deals with the question of access. The applicant says he is not operating a pharmacy within a supermarket. He says he is operating a single integrated business supplying (amongst other things) pharmaceutical benefits and that the entire, integrated business - including the pharmacy - is accessed from outside the building through a single entrance. The second issue is the meaning of the word supermarket. If the applicant’s business which includes a dispensary is not properly described as a supermarket, item 212(b) has no application.

10. I will deal with the second issue – the interpretation of the expression supermarket – first. My decision in relation to that issue means it is unnecessary to deal with the other issue.

    Is the proposed business a supermarket?

11. The term ‘supermarket’ is defined in the Rules (at s 5(1)) as:

    …a retail store or market the primary business of which is the sale of a range of food, beverages, groceries and other domestic goods.

12. The Authority says that definition extends to a ‘neighbourhood shop’. The Authority referred me to a list of product lines that would be carried in the applicant’s business. The list is included as an annexure to the consent orders made in relation to the premises by the NSW Land and Environment Court: exhibit one at pp 135-6. The list says the store will stock ‘General Merchandise’ which includes the following sub-categories of products:

    ·Baby care (e.g. disposable nappies);

    ·Household (e.g. cleaning products, toilet paper);

    ·Oral care (e.g. toothpaste);

    ·Personal Hygiene (e.g. deodorants, razors);

    ·Grocery (e.g. milk, juices, margarine, selected canned foods, cereals, newspapers);

    ·Skin care (e.g. vitamin E creams);

    ·Sun Care (e.g. sunscreen, lip balm);

    ·First aid (e.g. band-aids, antiseptic creams);

    ·Confectionary (e.g. chocolate bars, lollies);

    ·Snack Foods (e.g. chips and nuts);

    ·General Medicinal Products (e.g. analgesic products); and

    ·Vitamins (albeit a limited range).

13. The Authority says those lines are characteristic of a supermarket as defined in the Rules. On that approach, the primary business of the outlet is that of a supermarket.

14. The applicant said the definition of supermarket should be read down so it only extends to larger stores like those operated by Coles, Woolworths and Aldi, or perhaps IGA. (Some of those outlets might incorporate other lines or functions, like a liquor department, that are not necessarily characteristic of a supermarket – at least not in all states – but which do not change the nature of the primary business.) The applicant anticipates the proposed premises would be more modest and different in kind from a ‘large format’ supermarket. To that end, the applicant referred me to the explanatory memorandum which accompanied the Rules. The notes elaborate on the definition of supermarket in the Rules as follows:

    “supermarket” – means a retail store or market the primary business of which is the sale of a range of food, beverages, groceries and other domestic goods. Reference to a range of food, beverages, groceries and domestic goods means that is it the type of store in a person could do their weekly shopping from fresh food (e.g. dairy, meat, bread), pantry items, cleaning products, personal care items and other household staples (e.g. laundry pegs, plastic food wrap). Reference to the primary business means that the definition would not extend to a department or variety store that has a deli or café section, nor does it include a farmer’s market selling a range of produce. [Emphasis supplied in original]

15. The applicant says the reference to ‘weekly shopping’ assumes some significance. The applicant says most consumers would not do their weekly shopping at a smaller outlet like the one proposed in this case. The distinction between weekly shopping and the sort of shopping contemplated here is captured in the definition of ‘neighbourhood shop’ in the Gosford Local Environmental Plan 2014 (the LEP). The LEP is the applicable planning instrument. It defines a neighbourhood shop in these terms (at p 138):

    neighbourhood shop means premises used for the purpose of selling general merchandise such as foodstuffs, personal care products, newspapers and the like to provide for the day-to-day needs of people who live or work in the local area, and may include ancillary services such as a post office, bank or dry cleaning, but does not include restricted premises. [Emphasis added]

16. That definition was presumably adopted in the consent orders in the Land and Environment Court. The applicant says the reference in that definition to ‘day-to-day needs’ points to a distinction between neighbourhood shops, like the one proposed here, and larger retail outlets called ‘supermarkets’ where consumers undertake their weekly shop. Mr Flahrety, the applicant’s representative, argued in oral submissions that the distinction accorded with the common sense understanding of the two terms.

17. There is some risk in using the definition of neighbourhood shop in the LEP to read down the definition of supermarket in the Rules. They are different instruments established for different purposes, albeit the Rules also operate as planning documents of a sort and refer to local planning regimes.

18. But the two definitions – the one in the explanatory memorandum and the one in the LEP – can usefully sit alongside each other in that they appear to describe different concepts that would be recognised by most lay persons. While I have no direct evidence before me on this point, it is almost certainly true that most shoppers do their weekly shopping at a larger outlet operated by Coles, Woolworths, Aldi or IGA, whereas they duck down to the local convenience store to buy milk, bread or other items in between less frequent trips to one of the larger stores.

19. I note the distinction between the two types of retail outlet appears to be recognised in most dictionary definitions of the word supermarket. The Macquarie Dictionary, for example, refers to ‘a large, usually self-service, retail store or market selling food and other domestic goods’. The qualifier ‘large’ also appears in the Oxford English Dictionary, which refers to: ‘A large store, typically one of a chain, selling a wide range of food and groceries, as well as household goods and other products’. (The Oxford English Dictionary also refers within that definition to a hypermarket, which is an even larger retail establishment.) Those definitions suggest size does matter.

20. The Authority, for its part, says there is no need to go beyond the bare definition of supermarket contained in the Rules. It says the words of the definition are clear enough on their face – and they clearly comprehend convenience stores and neighbourhood stores. There is no need to resort to extrinsic aids to interpretation that might suggest a narrower view. Indeed, in the absence of ambiguity, the Authority says it would be improper to have regard to the explanatory memorandum.

21. The Authority also referred me to the Tribunal’s decision in Nidigal and Australian Community Pharmacy Authority [2007] AATA 1987. That case involved similar facts: a pharmacist acquired a general store that operated out of leased premises. The lease permitted the establishment of a pharmacy within that business provided that the pharmacy was not ‘the predominant use’ of the premises. The Authority was concerned the pharmacist was unable to satisfy the same rule in question here. After analysing the definition in the Rules and referring to the explanatory memorandum, Senior Member Allen concluded the Authority was right. He accepted a convenience store was covered by the definition of supermarket. While SM Allen acknowledged modern pharmacies tended to supply a wide range of goods (and increasingly services, one might interpolate),he concluded the range of products in the general store were such that it could not be considered a pharmacy – the alternative being that it was a supermarket.

22. I am satisfied the definition of supermarket in the Rules is sufficiently uncertain that it is appropriate to refer to extrinsic materials, including the explanatory memorandum. The uncertainty arises out of the very generality of the definition in the Rules. The definition appears to be so general that it raises a question as to whether it was intended to be read as widely as the bare words would suggest. Reference to the explanatory memorandum confirms the definition is not intended to apply that widely. The explanatory memorandum appears to be focused on the mischief of (large) supermarkets becoming involved too closely with the supply of pharmaceutical benefits – perhaps out of a fear the pharmacy will become subsumed into the larger entity and lose its focus. The language in the definition appears to evidence a more relaxed attitude to smaller businesses being involved. A smaller business that includes a pharmacy component is unlikely to lose its focus, particularly in circumstances where pharmacists are more likely to own or operate the small business.

23. I am conscious I have departed (on this point, at least) from the view expressed in Nidigal. I do so reluctantly. While the Tribunal is not bound by its earlier decisions, predictability and consistency are core values of justice and good government. But my ultimate obligation is to reach the correct or preferable decision. I have had the benefit of careful argument from both parties on this point; those arguments have led me to a different conclusion.

24. I am not satisfied the applicant’s business is properly characterised as a supermarket. Item 212 is not an obstacle to approval. Having reached that view, I am not required to make a finding on what I have described as the ‘access issue’ – specifically, whether the proposed premises are not directly accessible by the public from within a supermarket.

    CONCLUSION

25. Given the parties conceded the issue that arose under item 211 appears to have fallen away, the reviewable decision must be set aside. The Tribunal decides in substitution to recommend to the Secretary of the Department of Health that the application to supply pharmaceutical benefits from the proposed premises be approved.

I certify that the preceding 25 (twenty-five) paragraphs are a true copy of the reasons for the decision herein of Deputy President Bernard J McCabe

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Associate

Dated:  27 April 2017

Date of hearing:	14 November 2016
Counsel for the Applicant:	Mr T Flaherty
Solicitors for the Applicant:	Norton Rose Fulbright
Solicitors for the Respondent:	Australian Government Solicitor