Singh v Australian Community Pharmacy Authority

[1999] AATA 532

Falcon Grove Pharmacy Pty Ltd and Australian Community Pharmacy Authority [2016] AATA 978 (25 November 2016)

Division

GENERAL DIVISION

File Number

2016/0994

Re

Falcon Grove Pharmacy Pty Ltd

APPLICANT

And

Australian Community Pharmacy Authority

RESPONDENT

And

Edwin Masi

Noel Fosbery

OTHER PARTIES

Decision

Tribunal	Senior Member CR Walsh
Date	25 November 2016
Place	Perth

The Tribunal sets aside the decision under review and remits the matter to the Respondent for reconsideration in accordance with the Tribunal’s recommendation that the Respondent recommend to the Department of Human Services that the Applicant’s application to supply pharmaceutical benefits at the proposed premises be approved under s 90 of the National Health Act 1953.

.......(Sgd)..................................................

Senior Member CR Walsh

Catchwords

PHARMACEUTICAL – respondent recommended to the Department of Human Services (“Department”) that the applicant’s application to supply pharmaceutical benefits not be approved - whether proposed premises (pharmacy) is “in” a “large medical centre” – whether medical centre is under “single management” – whether, at all relevant times, the number of “PBS prescribers” at the medical centre are the equivalent of at least 8 full-time “PBS prescribers”, of which at least 7 are “prescribing medical practitioners” - decision under review set aside and remitted

Legislation

Determination No PB 8 of 2000

Health Insurance Act 1973 - s 3(1)

National Health Act 1953 – s 90 – s 90(3A) – s 99J – s 99L

National Health (Australian Community Pharmacy Authority Rules) Determination 2011 – s 5(1) - Item 136 of Part 2 of Schedule 1 – Item 136(1) – Item 136(4) – Item 136(5)

Cases

Attia v Australian Community Pharmacy Authority [2005] FCA 1523

R v Australian Broadcasting Tribunal; Ex parte Hardiman (1980) 144 CLR 13

Singh v Australian Community Pharmacy Authority [1999] AATA 532

Secondary Materials

Fifth Community Pharmacy Agreement

Macquarie Dictionary

Oxford English Dictionary

REASONS FOR DECISION

Senior Member CR Walsh

25 November 2016

introduction

1. On 6 November 2015, Falcon Grove Pharmacy Pty Ltd (Falcon Grove) applied to the Department of Human Services (the Department) under s 90 of the National Health Act 1953 (the NHA) for approval to supply pharmaceutical benefits at the premises situated at Shop 14, Falcon Grove Shopping Centre, 609-617 Old Coast Road, Falcon, Western Australia (the Proposed Premises) (the Application):  refer to the floor plan in Attachments 1 and 2 to these Reasons for Decision.

2. Falcon Grove sought approval, in accordance with Item 136 of Part 2 of Schedule 1 of the National Health (Australian Community Pharmacy Authority Rules) Determination 2011 (the Rules)[1], which concerns “New pharmacy in a facility (large medical centre)”. 

   [1] The Rules are made under s 99L of the NHA.

3. The Application was received by the Department on 9 November 2015 and registered on 11 November 2015.

4. On 11 November 2015, the Department referred the Application to the Australian Community Pharmacy Authority (the Authority)[2], under s 90(3A) of the NHA, for the purpose of obtaining a recommendation as to whether or not the Application should be approved.

   [2] The Authority was established under s 99J of the NHA.

5. By letter dated 22 December 2015, the Authority wrote to Falcon Grove advising it of the following:

   On 11 December 2015 the Australian Community Pharmacy Authority (the Authority) considered the application against the requirements of the National Health (Australian Community Pharmacy Authority Rules) Determination 2011 made under subsection 99L(1) of the Act by the then Minister for Health and Ageing on 13 September 2011 (PB 65 of 2011).

   Decision

   The Authority was not satisfied that the application met the requirements of Rule 136 and recommended under subsection 99K(1) of the Act that the application not be approved.

   Specifically, the Authority was not satisfied that:

   ·     The proposed premises are in a large medical centre (Item 136(1)); and

   ·     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 (Item 136(3))

   (the Decision)[3].

   [3] The Rules were amended, with effect from 10 November 2015 (the Amended Rules). However, the version of the Rules, as in force immediately before the amendment, is the version which is relevant to this application because the Application was received by the Department on 9 November 2015:  s 4 of the Amended Rules. The Authority acknowledges that it inadvertently stated at paragraph 16 of its statement of reasons that the Rules as in force on 11 November 2015 was the version of the Rules which it applied in making the Decision.

6. On 4 January 2016, Falcon Grove emailed the Authority requesting a statement of reasons for the Decision and, on 28 January 2016, the Authority provided Falcon Grove with a statement of reasons, as requested, which includes the following:

   DECISION

   75.The Authority was not satisfied that the proposed premises are in a large medical centre and therefore found that the requirement of Item 136(1) was not met.

   76.The Authority was not satisfied that, the proposed premises are at least 500m, 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 (Item 136(3)).

   77.Accordingly, the Authority recommended that the Applicant not be approved under section 90 of the Act to supply pharmaceutical benefits at the proposed premises.

7. On 24 February 2016, Falcon Grove applied to the Administrative Appeals Tribunal (the Tribunal) for a review of the Decision.  The stated “Reasons for the Application” are as follows:

   1.The Australian Community Pharmacy Authority (“Authority”) erred in finding that the proposed premises are not in a large medical centre.

   Particulars

   (a)The Authority erred in finding that the proposed premises are adjacent to a medical centre but not part of the medical centre (but not part of the medical centre) (paragraph 34).

   (b)The Authority erred in finding that Falcon Grove Medical Centre and the proposed premises operated as two separate commercial establishments under the single management of the Falcon Grove Shopping Centre, when Falcon Grove Medical Centre and the proposed premises in fact, operated under a “single management” as a “large medical centre” (paragraph 35).

   2.The Authority erred in finding that Miami Plaza Shopping Centre was not a “small shopping centre”.

   Particulars

   (a)Miami Plaza Shopping Centre satisfies the definition of a small shopping centre because relevantly, the supermarket in the shopping centre occupies a gross leasable area of greater than 2,500m2 excluding loading docks.  The area occupied being 3,500m2 (paragraph 43).

   3.The Applicant was entitled to, and was denied natural justice, by the Authority making findings based on submissions from two interested third parties and these submissions were not put to the Applicant for comments prior to a decision being made (paragraph 34).

   FACTUAL BACKGROUND

8. Falcon Grove, in its capacity as the trustee of the Falcon Grove Unit Trust, trades as the “Falcon Grove Pharmacy” (the Pharmacy).

9. FGMC Nominees Pty Ltd, as trustee of the FGMC Enterprises Trust, trades as the “Falcon Grove Medical Centre” (the Medical Practice).

10. At all relevant times, the following 11 doctors work worked at the Medical Practice:

    ·     Dr Padminie Kain;

    ·     Dr Mahalingham Naidoo;

    ·     Dr Nigel Farrier;

    ·     Dr Robert Watt;

    ·     Dr Vino Kariyakarawana;

    ·     Dr Julie Moon;

    ·     Dr You Yan Tan;

    ·     Dr David Obatayo;

    ·     Dr Jose Omotoso;

    ·     Dr Brian Walker; and

    ·     Dr Andrew Webster.

11. By undated commercial lease, commencing 1 July 2013, the Medical Practice leased shops 12 and 13 Falcon Grove Shopping Centre, 609 Old Coast Road, Falcon, Western Australia (the Shopping Centre) from its registered proprietors, Mr Malcolm Gould and Mr Margaret Gould (the Landlords) for a five year period, terminating on 30 June 2018:  refer to Attachments 1 and 2.  Dr Padminie Kain and Dr Mahalingham Naidoo are the “Guarantors” of this lease.

12. By undated commercial lease commencing 1 July 2013, the Medical Practice leased shop 11 in the Shopping Centre for a five year period, terminating on 30 June 2018:  refer to Attachments 1 and 2.  Dr Padminie Kain and Dr Mahalingham Naidoo are the “Guarantors” of this lease.

13. By commercial lease, dated 17 October 2013, the Pharmacy leased shop 14 in the Shopping Centre from the Landlords for a five year period, terminating on 30 September 2018:  refer to Attachments 1 and 2.  Mr William Joe Safar (Pharmacist and director and shareholder of the Pharmacy) (Mr Safar) is the “Guarantor” of this lease.

14. Ms Chelsea Reynolds (Ms Reynolds) has been employed by the Medical Practice for about nine years and has been the “Practice Manager” of the Medical Practice since about June 2014.

15. On 1 September 2015, the Medical Practice and the Pharmacy entered into a “Management Deed” (the Management Deed). 

16. The Management Deed provides, inter alia:

    1.SINGLE MANAGEMENT AGREEEMENT:

    2.1The Parties Acknowledge and confirm that for the purposes of the Pharmacy Relocation Rules they jointly manage and operate the Falcon Grove Medical Centre under single management as a whole and to that end agree the centre will be managed:

    (a)by one manager or by two managers working cooperatively pursuant to this agreement; and

    (b)to the extent necessary to encourage the use of the Falcon Grove Medical Centre as a single integrated facility; and

    (c)the Parties cooperative management of the Falcon Grove Medical Centre shall extend to but not exclusively the following matters;

    (i)        security;

    (ii)       pedestrian and vehicular access;

    (iii)       cleaning;

    (iv)      signage;

    (v)       trading hours;

    (vi)       marketing; and

    (vii)      maintenance of buildings, common areas and utilities.

    2.2Each Party must appoint a manager for the purpose of facilitating all matters referred to in clause 2.1.

    2.3The managers appointed pursuant to clause 2.2 shall have the day to day control in relation to the matters in clause 2.1.

    2.4Each Party acknowledges that the costs incurred in managing the matters in clause 2.1 will be costs incurred as a Lessee pursuant to their respective leases and agree to each pay their respective costs as they are incurred.

    ITEM 136 – NEW PHARMACY IN A FACILITY (LARGE MEDICAL CENTRE)

17. Central to this application is under Item 136 of Part 2 of Schedule 1 of the Rules, titled “New pharmacy in a facility (large medical centre)”, which provides that an applicant under this item (here, Falcon Grove), must meet all of the following requirements:

    1.The proposed premises are in a large medical centre.

    2.There are no approved pharmacies in the large medical centre.

    3.The proposed premises are at least 500m, in a straight line, from the nearest approved pharmacy other than an approved pharmacy in a small shopping centre, a large shopping centre or a 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, being the day the application was registered by the Department of Human Services; and

    (b)at all relevant times during the 2 months before the day on which the application is considered by the Authority; and

    (c)at all relevant times during the 2 months before the day on which the application is being 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 need of the patients of the medical centre.

    (Emphasis added)

    Issues

18. It is not in dispute that requirements (2), (3) and (6) of Item 136 of Part 2 of Schedule 1 of the Rules are met in this case. 

19. What is in dispute is whether requirements (1), (4) and (5) of Item 136 of Part 2 of Schedule 1 of the Rules are satisfied in this case. 

20. More specifically, the issues for determination by the Tribunal in this case are whether:

    (i)the Proposed Premises (i.e. the Pharmacy) is “in” a “large medical centre” for the purpose of Item 136(1) of Part 2 of Schedule 1 of the Rules.  (As discussed below, this requires the Tribunal to determine whether the medical centre is under “single management”, as defined in s 5(1) of the Rules); and

    (ii)“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” for the purpose of Item 136(4) of Part 2 of Schedule 1 of the Rules.

21. Each of these issues is considered, in turn, below.

    THE ROLE OF THE AUTHORITY

22. In R v Australian Broadcasting Tribunal; Ex parte Hardiman (1980) 144 CLR 13 (Hardiman), the Court noted (at pp35-36):

    In cases of this kind the usual course is for a tribunal to submit to such order as the court may make. The course which was adopted by the Tribunal in this Court is not one which we would wish to encourage. If a tribunal becomes a protagonist in this Court there is a risk that by so doing it endangers the impartiality which it is expected to maintain in subsequent proceedings which take place if and when relief is granted. The presentation of a case in this Court by a tribunal should be regarded as exceptional and, where it occurs should, in general, be limited to submissions going to the powers and procedures of the Tribunal.

23. Given there are active contradictors in the form of “Other Parties” in these proceedings, namely Mr Edwin Masi and Mr Noel Fosbery (the Other Parties), the Authority adopted a passive role, consistent with the approach articulated by the Court in Hardiman.  That is, the Authority did not make any submissions in relation to how the Tribunal should dispose of this application.

    consideration

    (i)        Is the Proposed Premises “in” a “large medical centre”?

    “in” a “large medical centre”

24. Item 136(1) of the Rules requires that the Proposed Premises be “in” a “large medical centre”. 

25. “In” is not defined in the NHA or the Rules and, therefore, takes its ordinary meaning.

26. The Macquarie Dictionary[4] defines “in” as follows:

    1.inclusion within space or limits, a whole, material or immaterial surroundings, etc.: in the city, in the army, in politics.

    [4] >

    “Large medical centre” is defined in s 5(1) of the Rules, for the purposes of Item 136(1) of the Rules, as follows:

    a medical centre that:

    (a)       is under single management; and

    (b)       operates for at least 70 hours a week; and

    (c)has one or more prescribing medical practitioners at the centre for at least 70 hours per week.

    (Emphasis added)[5]

    [5] Paragraphs (b) and (c) of the definition of “large medical centre” in s 5(1) of the Rules are not in dispute in these proceedings. 

27. “Medical centre”, is not defined in the NHA or the Rules (for the purpose of the definition of “large medical centre” in s 5(1) of the Rules) and, accordingly, takes its ordinary meaning.

28. “Medical” is defined in the Macquarie Dictionary[6] as:

    1.        of or relating to the science or practice of medicine.  

    [6] >

    “Centre” is defined in the Macquarie Dictionary[7] as:

    3.a building or building complex which houses a number of related specified services:  a shopping centre, a sports centre, a medical centre.

    [7] >

    Similarly, “medical” is defined in the Oxford English Dictionary[8] as:

    [8] en.oxforddictionaries.com

    2.Relating to the science or practice of medicine:

    ‘a medical centre’

    ‘the medical profession’

    1.1      Relating to medicine, as distinguished from surgery, psychology etc.

    and “centre” is defined in the Oxford English Dictionary[9] as:

    3.        A place or group of buildings where a specified activity is concentrated:

    ‘a conference centre’.

    [9] en.oxforddictionaries.com

29. The Other Parties’ position on this issue, as set out in the “Other Parties’ Statement of Issues, Facts and Contentions, dated 1 September 2016 (the Other Parties’ Statement), is a follows:

    6.        The Other Parties…deny…:

    (b)that the Pharmacy and the [Medical] Practice together constitute a “large medical centre” as defined in the Rules.

    …

    10.…Staff must exit the Pharmacy in shop 14, in order to enter [the Medical Practice] in shop 12.

    …

    11.The Other Parties deny that the Pharmacy is part of a “medical centre” as defined in the Rules…, because:

    (a)shop 11 is alleged by the Applicant to be part of the [Medical] Practice, which is defined as the “Falcon Grove Medical Centre”, but is in a different building to that in which shops 12, 13 and 14 are located;

    (b)neither of the two buildings are capable of constituting a “medical centre”, because neither building forms a central point or main site for the provision of medical services, in that each building contains retail shops and offices unrelated to the provision of medical services;

    (c)on the Applicant’s own case, shop 11 is not alleged to be part of the “centre” because it is not part of a singular continuous space, nor is it contiguous with shops 12, 13 and 14.

    …

    23.      The Other Parties… [contend]:

    (a)       the Pharmacy is in a shopping centre, not a “large medical centre”

30. The evidence before the Tribunal is that Shop 14 (the Pharmacy and the Proposed Premises) is located directly next to Shop 13 and that Shop 13 is, in turn, located directly next to Shop 12, all in the same building under the same roof.  Shop 14 is separated from Shop 13 and, it follows from Shop 12, by a glass door in the wall which separates Shop 14 from Shop 13.  This glass door is secure, but can be opened if necessary:  refer to Attachment 1 to these Reasons for Decision.  Shops 11, 12 and 13 constitute the Medical Practice.  Shop 11 (the Clinipath pathology) is housed in a separate building to Shops 12, 13 (and 14) which is located in close proximity to Shops 12, 13 and 14, separated only by a driveway:  refer to Attachments 1 and 2 to these Reasons for Decision. 

31. Based on the ordinary meaning of the word “in” (refer to paragraph 26 above) and the ordinary meaning of the words “medical” and “centre” (refer to paragraphs 28-31 above), the Tribunal is satisfied that the Medical Practice (comprising Shops 11, 12 and 13) is a “medical centre” and that the Proposed Premises (i.e. the Pharmacy/Shop 14) is “in” a “medical centre” for the purpose of Item 136(1) of the Rules.  That is, the ordinary meaning of the word “medical” (refer to paragraphs 29 and 31) is sufficiently broad to include the services provided in Shop 11 (being pathology services), Shops 12 and 13 (being general medical practitioner services) and Shop 14 (being the provision of pharmaceutical benefits) in that they all “relate to the science or practice of medicine”.

32. The Tribunal considers that Shops 11, 12, 13 and 14 are all located in one “centre”, within the broad ordinary meaning of that word, which contains a number of related “medical” services.  The ordinary meaning of the words “in” and “centre” (refer to paragraphs 25, 30 and 31 above), are sufficiently broad to include shops which are separated by a glass sliding door (in the way that Shop 14 is separated from Shop 13 and, it follows, Shop 12) and shops which are housed in different buildings, under different roofs, and separated by a driveway (in the way that Shop 11 is separated from Shops 12, 13 and 14).  That is, the two buildings which house Shops 14, 13 and 12 and Shop 11, respectively, constitute a building complex or group of buildings relating to the science or  practice of medicine and, it follows, together constitute a “medical centre” within the ordinary meaning of that expression.  The geographical separation of Shop 11 from Shops 12, 13 and 14 by a driveway does not, in the Tribunals view (and contrary to the contention of the Other Parties), prevent the four shops from together constituting a “centre” for the purpose of definition of “large medical centre” in s 5(1) of the Rules and, it follows, for the purpose of Item 136 of the Rules.  Further, in the Tribunal’s view, the fact that Shops 11, 12, 13 and 14 also form part of the Falcon Grove Shopping Centre (which contains other shops which provide different goods and/or services) does not prevent them from together constituting a “medical centre” or from the Proposed Premises (the Pharmacy/Shop 14) from being “in” a “medical centre” according to the ordinary, broad, meaning of the words “in”, “medical” and “centre”. 

    Under “single management”

1. The next issue to be decided by the Tribunal is whether the Falcon Grove Medical Centre is a “medical centre” which is under “single management” for the purpose of the definition of “large medical centre” in s 5(1)(a) of the Rules and, it follows, for the purpose of Item 136(1) of the Rules.

2. “Single management” is defined in s 5(1) the Rules as follows:

   single management, for a shopping centre or medical centre:

   (a)       means management of the centre as a whole:

   (i)by one manager, or by two or more managers working cooperatively under an agreement; and

   (ii)to encourage the use of the centre as a single integrated facility; and

   (iii)including management of the following matters for the following matters for the centre:

   (A)security;

   (B)pedestrian and vehicular access;

   (C)cleaning;

   (D)signage;

   (E)trading hours;

   (F)marketing;

   (G)maintenance of buildings, common areas and utilities; and

   (b)does not include independent owners or tenants of premises in a building or centre that cooperate:

   (i)        on particular occasions; or

   (ii)in relation to some, but not all, of the matters mentioned in subparagraph (a)(iii) in relation to the building or centre.

   [Emphasis added]

3. In summary, the Other Parties’ contention is that the Falcon Grove Medical Centre is not under “single management” (as defined in s 5(1) of the Rules) for the purpose of the definition of “large medical centre” in s 5(1) of the Rules and, it follows, for the purpose of Item 136(1) of the Rules.

4. More specifically, the Other Parties’ Statement provides:

   11.      … the Other Parties:

   (a)admit that a Deed was entered into as alleged on or about the date pleaded (“the Deed”);

   (b)denies that, by so doing, the Deed establishes any basis for “single management” so as to satisfy the requirements of the Rules, in that:

   (i)the Rules require legally enforceable obligations regarding the categories of matters required to be managed;

   (ii)there is no provision in the Deed by which the rights and obligations of FGMC under its leases are interdependent upon or connected with the rights and obligations of the Applicant under its Lease, such that:

   (A)each party is free to exercise its options for renewal of terms under their respective leases without regard to the other; and

   (B)a party to the Deed unable or unwilling to perform a lease obligation or exercise a right cannot be compelled by another party to the Deed to perform the lease obligation or exercise the right;

   (iii)the term of the FGMC Leases is different to that under the Applicant’s Lease, in that the former is for five years, with two five year options, from 1 July 2013, whereas the latter provides for a five year term, with two five year options, from 1 October 2013; and

   (iv)under all of the Leases, the Landlords have management responsibility and control over:

   (A)Security (clause 7.7(a));

   (B)Car-parking and vehicular access (clause 2.7);

   (C)Cleaning (clause 7.6(b) and 7.7(a));

   (D)Signage (clause 6.9 and 6.10);

   (E)Trading hours (clause 8.1 (a)); and

   (F)Maintenance of buildings, common areas and utilities (clause 7.6);

   of the shopping centre, with no such management of matters within the definition of “single management” because there is no other “centre” requiring such management; and

   (v)the footpath outside the building of shops 12 to 14 are Common Areas under all the Leases of FGMC and the Application but are managed by the Landlords, not FGMC or the Applicant. Shops alleged by the Applicant to be part of and “in” the “medical centre” require those areas to be traversed from one shop (14 or 11) to another (12 or 13), such that there must be two levels of management within the purported “medical centre”.

   …

   19.      The Other Parties…contend:

   (a)a proper construction of the phrase “single management” under the Rules requires consideration of the “centre” as a whole, and:

   (i)neither the Applicant nor FGMC leases the whole of the alleged “medical centre” so as to bring them under “single management”;

   (ii)the Deed makes no provision compelling either the Applicant or FGMC to exercise rights under their respective Leases or perform their obligations under their respective Lease in a consistent manner so the requisite degree of control in order to manage a matter does not reside with either the Applicant or FGMC;

   (iii)shop 11, which is located in a separate building from shops 12, 13 and 14, but is alleged to be part of the medical centre, is not in a “single integrated facility” as required to be a “centre”; and

   (iv)the footpaths and paved areas outside the building in which the “medical centre” is alleged to be, over which employees or invitees must traverse to access one part of the “medical centre” from another, are common areas of the shopping centre, in respect of which the Landlords have management and control;

   (b)the inclusive definition of “single management’⁵ requires management “of the following matters for the centre”, which includes relevantly security, pedestrian and vehicular access, cleaning, signage and maintenance of buildings, common areas, and utilities, all of which are matters under the management of the Landlords, and none of which are under the management in any respect of either the Applicant or FGMC; and

   (c)the definition expressly excludes tenants of premises that co-operate in relation to some but not all of such matters. Despite the Deed purporting to require “co­operation” in respect of such matters, the obligation is illusory if the only management responsibility or power for such matters resides in point of law with the Landlord under the Leases, not the Applicant or FGMC; and

   (d)the failure by FGMC or the Applicant to negotiate a term of their leases conferring exclusive parking rights, or to have rights conferred under clause 12.7 of their Leases is a further reason why it cannot be said that the “medical centre”, which requires such parking, is under “single management”.

   20.      ...the Other Parties:

   (a)deny that the level of co-operation alleged by the Applicant was sufficient for the purposes of the Rules to constitute “single management”, for the reasons pleaded above;

   (b)contend that had the parties intended to co-operate as a single integrated facility, the medical centre as pleaded should have been located in one building and leased by one entity (whether or not that entity, such as FGMC, would sub-lease any part of the alleged medical centre to, for example the Applicant), so that there would not have been different Leases in different buildings with different terms unenforceable in law by any co-operating party; and

   (c)contend that, properly understood, shops 11 to 14 do not constitute a “medical centre” under “single management”, but rather are premises in a shopping centre, which operate together with an insufficient degree of co-operation.

5. The evidence before the Tribunal is that Ms Reynolds (the Practice Manager for the Medical Practice) and Dr Kain and Dr Naidoo (two Doctors who work in the Medical Practice) act as the “representatives” or the managers of the Medical Practice and that Mr Safar (a Pharmacist in the Pharmacy and director and shareholder of Falcon Grove) acts as the “representative” or manager of the Pharmacy.  According to Falcon Grove, the representatives (managers) of the Medical Practice and the representative (manager) of the Pharmacy together constitute the “management team” of the Falcon Grove Medical Centre (comprising Shops 11, 12, 13 and 14).

6. The Tribunal is satisfied on the evidence before it[10] that the Falcon Grove Medical Centre (which the Tribunal finds comprises the Medical Practice and the Pharmacy) satisfy paragraph (a)(i) and (ii) of the s 5(1) definition of “single management”.  That is, the Tribunal is satisfied that at all relevant times the Falcon Grove Medical Centre has been managed as a whole: (i) by two or more managers working cooperatively under an agreement (being initially by way of a verbal agreement and later the Management Agreement); and (ii) to encourage the use of the Falcon Grove Medical Centre as a single integrated facility.

   [10] In particular, see Exhibits 2, 3, 5 and 9.

7. In a Statutory Declaration, dated 31 May 2016[11], Ms Reynolds states:

   10.In summary, we have in place a system where any decisions about the management, administration and marketing of the Centre (apart from day-to-day operational matters) are first brought up for discussion among Dr Kain, Dr Naidoo and Will [i.e. Mr Safar], then a decision will be made and implemented.  I am involved in those discussions most of the time in my capacity as the manager of the Practice as I am often required to oversee the implementation of those decisions.

   [11] Exhibit 5.

8. In a Statutory Declaration, dated 31 May 2016[12], Mr Safar states:

   25.As a single management unit, we wanted an “all for one and one for all” teamwork culture.  The net result is that we aim to make decisions in the interest of and for the benefit of the business model rather than the individual entity.

   [12] Exhibit 9.

9. In his Statutory Declaration[13], Mr Safar also identifies the following matters which the “management team” for the Falcon Grove Medical Centre (i.e. the Pharmacy and the Medical Practice) have worked cooperatively on and implemented:

   ·     matters relating to the Medical Practice and the Pharmacy generally;

   ·     matter relating to the premises at which both the Medical practice and the Pharmacy are located (e.g. fit-out);

   ·     matters relating to internal traffic;

   ·     marketing matters;

   ·     signage; and

   ·     maintenance of the premises and plant and equipment.

   [13] Exhibit 9.

10. The Tribunal finds that the evidence before it establishes that the representative (manager) of the Pharmacy and the representatives (managers) of the Medical Practice:

    ·     have agreed since about early 2013 to work cooperatively to establish and manage Falcon Grove Medical Centre as a whole (i.e. as a “single integrated facility”).  Initially the agreement was made orally, but was subsequently documented in the Management Deed:  refer to paragraph 16 above;

    ·     between 2013 to August 2015, worked cooperatively to fit-out the Falcon Grove Medical Centre to present it as a single integrated facility;

    ·     encouraged the use of the Falcon Grove Medical Centre as a single integrated facility; and

    ·     collectively managed the matters set out in the s 5(1)(iii)(A)-(G) definition of “single management”, to the extent that those matters are relevant to the management of the Falcon Grove Medical Centre;

    such that the Falcon Grove Medical Centre is under “single management”, as defined s 5(1) of the Rules:  refer to paragraph 36 above.

11. As contended by Falcon Grove, although s 5(1)((b)(ii) of the definition of “single management” might be thought to require the Pharmacy and the Medical Practice to cooperatively manage all of the matters identified in s 5(1)(a)(iii)(A)-(G) of the definition of “single management” in s 5(1) of the Rules, common sense dictates that the definition should be construed to limit the operation of (b)(ii) to those matters which, in fact, require cooperative management.  Not all matters listed in s 5(1)(a)(iii)(A)-(G) of the Rules will necessarily be relevant in all cases.

12. In the case of the Falcon Grove Medical Centre, the management of vehicular access (contained in s 5(1)(a)(iii)(B) of the definition of “single management”) is not a relevant matter which requires cooperation between the Pharmacy and the Medical Practice because there is no parking exclusive to the Falcon Grove Medical Centre.  However, based on the evidence before the Tribunal (including, in particular, the evidence of Ms Reynolds and Mr Safar), if this matter were relevant to the Falcon Grove Medical Centre, the “management team” would cooperate in relation to this matter, as they do in relation to all other matters relevant to the management of the Falcon Grove Medical Centre.  In this regard, the Tribunal notes that clause 2.1 of the Management Deed contemplates cooperation by the Pharmacy and the Medical Practice on all of the matters identified in s 5(1)(a)(iii)(A)-(G) of the definition of “single management” in s 5(1) of the Rules:  refer to paragraph 16 above.

13. In support of their contention that the Pharmacy and the Medical Practice are not under “single management” (and, in particular, that they are not a “single integrated entity”) the Other Parties referred to a number of case authorities, including, in particular, the Federal Court’s decision in Attia v Australian Community Pharmacy Authority [2005] FCA 1523 (Attia) and the Tribunal’s decision in Singh v Australian Community Pharmacy Authority [1999] AATA 532 (Singh).  The Other Parties contend that in this case the Pharmacy and the Medical Practice are not under “single management” because no one party has power, control or the right of veto (i.e. the “final say”).  That is, according to the Other Parties, for the Pharmacy and the Medical Practice to be under “single management” there must be some level of interdependence which must rise higher than them “just getting on”.  In support of this contention, the Other Parties point to the fact that the Pharmacy and the Medical Practice are lessees under different leases with different conditions (albeit they share the same lessor) and that there is nothing to prevent each of them from assigning their lease or selling their business.

14. The Tribunal does not accept this contention.  The definition of “single management” in s 5(1) requires only that the managers of the Pharmacy and the Medical Practice manage the Falcon Grove Medical Centre to work “cooperatively under an agreement“ (which, based on the evidence before the Tribunal, they do) and “to encourage the use of the centre as a single integrated facility” (which, based on the evidence before the Tribunal, they do).  The definition of “single management” does not require the type of power, control, a right of veto or level of interdependence as contended by the Other Parties.  It requires only that there be “cooperation” by the relevant managers working under an agreement.  In the Tribunal’s view this is satisfied in this case, where we have Ms Reynolds and two doctors (as the managers for the Medical Practice) working cooperatively with, Mr Safar (the manager of the Pharmacy) under the Management Deed to encourage the use of the Falcon Grove Medical Centre as a single integrated entity.  The definition of “single management” in s 5(1) of the Rules contemplates more than one manager working cooperatively under an agreement (s5(1)(a)(i)), it contemplates that a large medical centre an comprise more than one building (s5(1)(a)(iii)(G)) and it contemplates multiple tenants of premises  (s5(1)(b)).

15. In relation to the cases relied upon by the Other Parties, namely Attia and Singh, the Tribunal notes that both of these decisions concern the definition of “large shopping centre” (as opposed to a “large medical centre”) and whether a “shopping complex” is “under a single management” for the purpose of the rules contained in Determination No PB 8 of 2000 (effective 26 July 2000), as amended by PB No 13 of 2000, PB No 9 of 2002 and PB No 15 of 2002.  These rules are not relevant to the present application.  Moreover, the rules which applied at the time of the decisions in Attia and Singh did not contain a definition of “single management” as the current Rules do.  To reiterate, it is clear from the current definition of “single management” in s 5(1) of the Rules all that is requires is that the managers (if more than one exists) work cooperatively under an agreement to encourage the use of the medical centre concerned as a single integrated entity.  The power, control, a right of veto, the level of interdependence, which the Other Parties contend must exist, simply does not arise from the plain text of the definition of “single management” in s 5(1) of the Rules.

    (iii)Whether, “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”

16. As set out above (in paragraph 17), to satisfy Item 136(4) of Part 2 of Schedule 1 of the Rules “at all relevant times”, the number of “PBS prescribers” at the medical centre must be equivalent to at least 8 “full-time” “PBS prescribers”, of which at least 7 “PBS prescribers” must be “prescribing medical practitioners”.

17. To reiterate, Item 136(5) of the Rules provides that for the purpose of Item 136 of the Rules “all relevant times” means:

    (a)on the day on which the application was made, being the day the application was registered by the Department of Human Services; and

    (b)at all relevant times during the 2 months before the day on which the application is considered by the Authority; and

    (c)at all relevant times during the 2 months before the day on which the application is being considered by the Authority.

18. “Full-time” is defined in s 5(1) of the Rules as follows:

    (a)for a prescribing medical practitioner, providing the service of a prescribing medical practitioner for at least 38 hours each week

    (b)for a PBS prescriber, providing the service of a PBS prescriber for at least 38 hours each week

19. “PBS prescriber” is defined in s 5(1) of the Rules, for the purpose of Item 136(4) of the Rules, as follows:

    A medical practitioner, or a participating dental practitioner, or an authorised optometrist, or an authorised midwife, or an authorised nurse practitioner

20. “Prescribing medical practitioner” is defined in s 5(1) of the Rules, for the purpose of Item 136(4) of the Rules, as follows:

    A medical practitioner who provides general practice services[14] to the community in which he or she practises, including the issuing of prescriptions for pharmaceutical benefits. [Emphasis added]

    [14] The expression “general practice services” is not defined in the NHA or the Rules and, therefore, takes its ordinary meaning.

21. The following two “Notes” appear at the end of s 5(1) of the Rules:

    Note 1 Authority, PBS prescriber and pharmaceutical benefit are defined in subsection 84(1) of the Act.  Pharmacist and Secretary are defined in subsection 4(1) of the Act.

    Note 2  Medical practitioner and private hospital are defined in subsection 3(1) of the Health Insurance Act 1973 and have the same meaning in the Act as in the Health Insurance Act 1973 – see subsection 4(1A) of the Act.

22. “PBS prescriber” is defined in s 84(1) of the NHA to mean “a medical practitioner”.

23. “Medical practitioner” is, in turn, defined in s 3(1) of the Health Insurance Act 1973 (the HIA) to mean:

    a person registered or licensed as a medical practitioner under a law of a State or Territory that provides for the registration or licensing of medical practitioners but does not include a person so registered or licensed:

    (a)whose registration, or licence to practise, as a medical practitioner in any State or Territory has been suspended, or cancelled, following an inquiry relating to his or her conduct; and

    (b)who has not, after that suspension or cancellation, again been authorised to register or practise as a medical practitioner in that State or Territory.

24. It follows that, in order to satisfy Item 136(4) of the Rules, Falcon Grove must demonstrate (among other things) that, “at all relevant times”, there are medical practitioners at the Medical Practice who are providing services as “medical practitioners” for at least 304 hours a week, and that the services provided for at least 266 of those hours are provided by “medical practitioners” who provide “general practice services to the community in which they practise” (i.e. general practitioners).

1. In short, the position of the Other Parties is that Falcon Grove does not meet Item 136(4) of the Rules because “there are and have been at all relevant times insufficient prescribing medical practitioners within the meaning of that expression in the Rules, working full-time”:  see the Other Parties’ Statement at [25](c).

2. More specifically, the Other Parties’ Statement provides:

   13.      …the Other parties:

   (a)do not admit that all the doctors working at the [Medical] Practice are PBS prescribers,…and say

   (i)Dr Nigel Farrier conducts a practice limited to skin medicine only; and

   (ii)Dr Andrew Webster conducts a practice for respiratory and sleep ailments only and does not prescribe general practice item numbers,

   …

   24.      …

   …

   (d)requirements 4 and 5 in column 3 of item 136 require the Applicant to satisfy this Tribunal that at all times between the day in which the Application was made, and two months before the day in which the Application was made, and at all time during the two months before the day in which the Application was considered by the Tribunal the number of PBS prescribes at the (alleged) medical centre is equivalent to at least 8 full-time PBS prescribes, of which at least 7 PBS prescribes must be prescribing medical practitioners;

   (e)on its proper construction, the definition of “prescribing medical practitioners” refers to a medical practitioner who conducts a practice of providing general practice services to the community which is not limited in its scope to any particular speciality or limited to any particular type of prescriptions, because the point of a medical facility being “large” enough to justify a pharmacy dispensing pharmaceutical benefits is that it be one which is resourced enough to meet all the needs of the community, not limited in its scope to some of those needs by having less than seven medical practitioners prescribing pharmaceutical benefits in respect of all ailments of members of the public requiring medical assistance;

   (f)Dr Farrier is not one such “prescribing medical practitioner” because he will only treat patients complaining of skin conditions;

   (g)Dr Webster is not one such “prescribing medical practitioner”, because he will only treat patients with respiratory and sleep complaints;

   (h)       the explanatory memorandum for the Rules states :

   “For the purpose of this Determination, the requirements associated with a medical practitioner require that the medical practitioner provide general practice services in the relevant community and issues prescriptions for pharmaceutical benefits (see definition of ‘prescribing medical practitioner’ at subsection 5(1) of Part 1). ”

   (i)if either or both of the hours worked by Drs Farrier and Webster are excluded from the required calculations, the Applicant is unable to satisfy the Tribunal that the “medical centre” has at all times operated with an equivalent of at least eight full-time PBS prescribers or at least seven prescribing medical practitioners within the meaning of the expression under the Rules.

3. In contrast, Falcon Grove’s position is, in short, that Item 136(4) of the Rules is satisfied in this case.

4. The evidence before the Tribunal is that “at all relevant times” (as defined in Item 136(5) of the Rules):

   ·     all of the doctors working at the Medical Practice were “PBS prescribers” with provider numbers;

   ·     Dr Kain, Dr Naidoo, Dr Farrier[15], Dr Watt, Dr Kariyakarawana, Dr Moon, Dr Tan, Dr Obatayo, Dr Omotoso and Dr Walker were all “prescribing medical practitioners” and registered with the Australian Health Practitioner Regulation Authority (the AHPRA) provide “general practice services”[16].  The total number of hours these doctors work at the Medical Practice is 299[17];

   ·     Dr Webster was a “prescribing medical practitioner” registered with the AHPRA to provide “general practice services” and as a physician in the speciality of respiratory and sleep medicine.  Dr Webster works 9 hours at the Medical Practice; and

   ·     the accuracy of the rosters, which record the number of hours the doctors work, has been verified by the doctors signing the rosters (with the exception of Dr Webster)[18].

   [15] See Exhibit 4.

   [16] As noted by the Respondent (Authority), in its “Statement of Issues, Facts and Contentions”, dated 12 September 2016, ordinarily the Authority would ascertain whether a health professional is a general practitioner or a specialist (or some other category of health practitioner) by reference to the record of the health practitioner’s registration with the AHPRA.

   [17] See Exhibits 1 (at pp513 and 517-520), 2, 3, 6, 7, 8, and 10.

   [18] Exhibit 1 at p517.

5. In relation to Dr Farrier, in a Statutory Declaration, dated 11 August 2016[19], Ms Reynolds states:

   2.Dr Farrier is registered with the Australian Health Practitioner Regulation Authority as a general practitioner.  During the hours he is at the [Medical] Practice, the [Medical] practice books Dr Farrier to take walk-in patients.  Dr Farrier also sees a group of loyal patients for general patient care issues.  Otherwise, Dr Farrier has a special interest and expertise in providing skin checks and treating skin related conditions.

   [19] Exhibit 6.

6. Further, in a Statutory Declaration, dated 11 August 2016[20], Dr Farrier states:

   [20] Exhibit 4.

   1.…I have been practising as a general practitioner for more than 30 years.  I am registered as a general practitioner with the Australian Health Practitioner Regulation Agency (“AHPRA”).  Annexed hereto and marked “NBF1”, is a copy of a search of the AHPRA register of practitioners dated 8 August 2016, which shows my registration type as general, and that my speciality is in general practice.

   2.During my consulting hours at the Falcon Grove Medical Centre, I provide general practice consultation to walk-in patients, I am the family GP for a small long standing group of patients, and I see patients for skin checks and skin related issues.

   …

   3.About 90% to 95% of patients that I see at the [Medical] Practice are booked in for skin checks or for skin related consultation (such as skin conditions).  Although these patients come in ostensibly for skin issues, for every patient that I see, I would, in carrying out my duties as a general practitioner:

   (a)       ask questions about the patient’s general health and wellbeing;

   (b)review their patient records to ascertain whether they are due for any tests, such as blood tests, pap smears, electrocardiography (ECG) and refer them for tests if required;

   (c)review their medication list and consider whether any follow up was necessary;

   (d)consider whether the patient required any prescription for repeat medication;

   (e)consider whether it was necessary to refer the patient to any specialists for further review; and

   (f)consider whether it was necessary for the patient to return for a follow up appointment with me or another GP at the [Medical] Practice for their ongoing health care.

7. Based on the evidence of Ms Reynolds[21] and Mr Farrier[22], “at all relevant times” Mr Farrier is a “prescribing medical practitioner” providing “providing general practice services” to the community in which he practices “including the issuing of prescriptions for pharmaceutical benefits”:  refer to paragraph 14 above.   

   [21] See, in particular, Exhibits 6 and 12.

   [22] Exhibit 4.

8. The Tribunal notes that the expression “general practice” is defined by the Australian Medical Association (the AMA) as follows:

   3.1General practice is the provision of primary continuing comprehensive whole-patient medical care to individuals, families and their communities.  General practice involves the ability to take responsible action on any medical problem the patient presents, whether or not it forms part of an ongoing doctor-patient relationship.  In managing the patient, the general practitioner may make appropriate referral to other doctors, health care professionals and community services.[23]

   [23] >

   Based on the evidence before it, the Tribunal also finds that “at all relevant times” the medical services provided by Dr Farrier at the Falcon Grove Medical Centre would satisfy the AMA’s definition of “general practice”, as set out above.

9. Having reached this finding, the hours that Dr Farrier works at the Falcon Grove Medical Centre may count toward the 304 hour weekly threshold mandated by the Rules.

10. Based on the evidence before it, the Tribunal is satisfied that, “at all relevant times” (within the meaning of Item 136(5) of the Rules), the number of “PBS prescribers” at the Falcon Grove Medical Centre was the equivalent of at least 8 “full-time” (as defined in s 5(1) of the Rules) “PBS prescribers”, of which at least 7 “PBS prescribers” were “prescribing medical practitioners” (as defined in s 5(1) of the Rules) or general practitioners.  Consequently, the Tribunal finds that Item 136(4) of the Rules is satisfied in this case.

    FIFTH COMMUNITY PHARMACY AGREEMENT

11. The “Fifth Community Pharmacy Agreement” between the Commonwealth and The Pharmacy Guild of Australia, dated 3 May 2010, provides that the specific objectives (the Objectives) of the Rules are to ensure:

    ·…

    ·A commercially viable and sustainable network of community pharmacies dispensing PBS medicines;

    ·Improved efficiency through increased competition between pharmacies;

12. The Tribunal considers that the Objectives favour the construction which the Tribunal has given Item 136 of the Rules, as set out above.

    decision

13. For the above reasons, the Tribunal sets aside the Decision and remits the matter to the Authority for reconsideration in accordance with the recommendation that the Authority recommend to the Department that Falcon Grove’s application to supply pharmaceutical benefits at the Proposed Premises be approved under s 90 of the NHA.

I certify that the preceding 73 (seventy three) paragraphs are a true copy of the reasons for the decision herein of Senior Member CR Walsh

....(Sgd).................................................

Administrative Assistant

Dated 25 November 2016

Dates of hearing	27-28 October 2016
Representative for the Applicant	Mr M Cobby
Solicitors for the Applicant	Ms M Chua, M 6:8 Legal
Representative for the Respondent	Mr B Dean
Solicitors for the Respondent	Australian Government Solicitor
Representative for the Joined Parties	Mr M Hotchkin
Solicitors for the Joined Parties	Hotchkin Hanly

Attachment 1

Attachment 2