Staltari A.m v Pharmacy Restructuring Authority
[1995] FCA 10
•20 JANUARY 1995
CATCHWORDS
ADMINISTRATIVE LAW - judicial review - decision of Pharmacy Restructuring Authority - construction of ministerial guidelines.
Acts Interpretation Act 1901 s.46A
Administrative Appeals Tribunal Act 1975 s.44
National Health Act 1953 Pt.VII, Divisions 4B, 4C; ss.85, 89, 90, 98, 99K, 99L; sub-ss.90(3B), 99K(1), 99K(2), 99L(2);paras.99K(1)(a) and (b), 105AD(2)(a)
The International Webster Dictionary
Agfa-Gavaert Ltd. v. Collector of Customs (1994) 124 A.L.R. 645
Australian Lighting and Hardware (Falkner) Pty. Ltd. v. Brilight Nominees Pty. Ltd. [1994] 1 V.R. 553
Herbert Adams Pty. Ltd. v. F.C.T. (1932) 47 C.L.R. 222
Marine Power Australia Pty. Ltd. v. Controller-General of Customs (1989) 89 A.L.R. 561
Ness Security Products Pty. Ltd. v. Collector of Customs, Unreported (Federal Court of Australia, Gummow J., 20 September 1994)
ADRIAN MAURICE STALTARI AND SHERRI LOUISE STALTARI V. PHARMACY RESTRUCTURING AUTHORITY AND SECRETARY, DEPARTMENT OF HUMAN SERVICES AND HEALTH
NO. WAG60 OF 1994
LEE J.
PERTH
20 JANUARY 1995
IN THE FEDERAL COURT )
OF AUSTRALIA )
WESTERN AUSTRALIA )
DISTRICT REGISTRY )
GENERAL DIVISION ) NO. WAG60 OF 1994
ON APPEAL from the General Administrative Division of the Administrative Appeals Tribunal
B E T W E E N: ADRIAN MAURICE STALTARI AND SHERRI LOUISE STALTARI
Applicants
and
PHARMACY RESTRUCTURING AUTHORITY
First Respondent
and
SECRETARY, DEPARTMENT OF HUMAN SERVICES AND HEALTH
Second Respondent
MINUTE OF ORDER
JUDGE MAKING ORDER: LEE J.
DATE OF ORDER: 20 JANUARY 1995
WHERE MADE: PERTH
THE COURT ORDERS THAT:
The appeal be dismissed.
The applicants pay the respondents' costs of the appeal.
Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT )
OF AUSTRALIA )
WESTERN AUSTRALIA )
DISTRICT REGISTRY )
GENERAL DIVISION ) NO. WAG60 OF 1994
ON APPEAL from the General Administrative Division of the Administrative Appeals Tribunal
B E T W E E N: ADRIAN MAURICE STALTARI AND SHERRI LOUISE STALTARI
Applicants
and
PHARMACY RESTRUCTURING AUTHORITY
First Respondent
and
SECRETARY, DEPARTMENT OF HUMAN SERVICES AND HEALTH
Second Respondent
CORAM: LEE J.
PLACE: PERTH
DATE : 20 JANUARY 1995
REASONS FOR JUDGMENT
This is an "appeal" from a decision of the Administrative Appeals Tribunal ("the Tribunal") which affirmed the decision of the Pharmacy Restructuring Authority ("the Authority") to recommend to the Secretary of the Department of Health ("the Secretary") that pursuant to s.90 of the National Health Act 1953 ("the Act") the Secretary not approve the applicants and one Grapsas, as pharmacists entitled to supply pharmaceutical benefits at, or from,
premises in the Belmont Forum Shopping Centre ("the Belmont Forum"). The Belmont Forum is situated in an established inner suburb in the city of Perth.
The obligation of the Authority to consider and make a recommendation in respect of an application under s.90 of the Act is set out in paras.99K(1)(a) and (b) of the Act. Pursuant to para.105AD(2)(a) of the Act a recommendation of the Authority made under para.99K(1)(b) of the Act is a decision that may be reviewed by the Tribunal.
The question of law relied upon to ground the jurisdiction of this Court to hear the appeal from the Tribunal pursuant to s.44 of the Administrative Appeals Tribunal Act 1975 is the determination of the proper construction of s.99L of the Act.
The application concerns provisions of the Act inserted in December 1990 to provide for the restructuring, or rationalisation, of pharmacy businesses throughout Australia. The relevant provisions, inserted as Divisions 4B and 4C of Pt.VII of the Act, are intended to operate until on or about 31 March 1995. They are designed to restrict the commencement of new pharmacy businesses and to provide financial incentives for the closure, amalgamation or transfer of existing pharmacies. The provisions give effect to an agreement made
between the Pharmacy Guild of Australia and the Minister for Aged, Family and Health Services on 6 December 1990. According to submissions made to the Tribunal, the mischief sought to be addressed by the restructuring of the pharmacy "industry" was the unbridled escalation of payments from Commonwealth revenue to meet the cost of pharmaceutical benefits provided under s.85 of the Act. The apparent assumption underlying the restructuring scheme was that a reduction in pharmacy businesses would lead to the reduction of payments for pharmaceutical benefits.
By s.89 of the Act a person is not entitled to receive a pharmaceutical benefit unless it is supplied, inter alia, by an approved pharmacist at, or from, premises in respect of which the pharmacist is approved. Under s.90 of the Act the Secretary may approve a pharmacist for the purpose of supplying pharmaceutical benefits from particular premises. Since the introduction of Division 4B of the Act the Authority has been established and pursuant to s.99K of the Act one of the functions of the Authority is to recommend to the Secretary whether or not an applicant under s.90 of the Act should be approved. Under s.99L of the Act the Minister must determine the guidelines pursuant to which the Authority makes recommendations under sub-s.99K(1). By sub-s.99L(2) a determination of guidelines by the Minister is a disallowable
instrument for the purposes of s.46A of the Acts
Interpretation Act 1901. The relevant guidelines in this matter were determined by the Minister on 8 July 1993. Sub-section 99K(2) provides that in making a recommendation under sub-s.99K(1) the Authority must comply with the relevant guidelines determined by the Minister under s.99L.
The "relevant guidelines" read as follows:
"Applications for Approval to Supply Pharmaceutical Benefits
3.For the purposes of paragraph 99K(1)(b) of the Act, the following are guidelines with which the Authority must comply in making a recommendation on an application by a pharmacist under section 90 of the Act:
(a)subject to subparagraphs (d) to (h), approval of a pharmacist shall not be recommended in respect of premises located within 5 kilometres by normal access routes from other premises in respect of which a pharmacist is already approved;
(b)subject to subparagraphs (d) to (h), approval of a pharmacist in respect of particular premises shall not be recommended unless the pharmacist demonstrates to the Authority that there is a definite unmet public need for that approval;
(c)subject to subparagraphs (d) to (h), approval of a pharmacist in respect of particular premises shall not be recommended if those premises are situated within 5 kilometres by normal access routes of other premises in respect of which there has been granted financial assistance under section 99ZC or 99ZD of the Act;
(d)notwithstanding anything contained in subparagraphs (a), (b) and (c), approval of a pharmacist in respect of particular premises shall be recommended where those premises are located not more than 500 metres by normal access routes from other premises in respect of which that pharmacist is already approved under section 90 of the Act and from which the pharmacist proposes to cease supplying pharmaceutical benefits;
(e)notwithstanding anything contained in subparagraphs (a) and (c), approval of a pharmacist in respect of particular premises shall be recommended where those premises are located more than 500 metres but not more than 5 kilometres by normal access routes from other premises in respect of which that pharmacist is already approved under section 90 of the Act and from which the pharmacist proposes to cease supplying pharmaceutical benefits, provided that -
(i)there has been no grant of financial assistance made under section 99ZC or 99ZD of the Act in respect of any other premises situated within 5 kilometres by normal access routes from the first-named premises; and
(ii)the pharmacist demonstrates to the Authority that there is a definite unmet public need for that approval;
(eaa)notwithstanding anything
contained in subparagraphs (a), (b), (c) and (e), approval of a pharmacist under section 90 of the Act may be recommended in respect of premises situated in either a regional centre or a community centre, where those premises are located not more than 5 kilometres by normal access routes from other premises in respect of which that pharmacist is already approved under section 90 of the Act and from which the pharmacist proposes to cease supplying pharmaceutical benefits, provided that there are no premises in that community centre or regional centre in respect of which a pharmacist is approved under section 90 of the Act;
(eab)notwithstanding anything contained in subparagraphs (a), (b), (c) and (e), approval of a pharmacist under section 90 of the Act may be recommended in respect of premises situated in a regional centre, where those premises are located not more than 5 kilometres by normal access routes from other premises in respect of which that pharmacist is already approved under section 90 of the Act and from which the pharmacist proposes to cease supplying pharmaceutical benefits, provided that there is not more than 1 premises in that regional centre in respect of which a pharmacist is approved under section 90 of the Act;
(ea)notwithstanding anything contained in subparagraphs (c) and (e), approval of a pharmacist shall be recommended in respect of premises situated not less
than 10 kilometres by normal access routes from the nearest other premises in respect of which a pharmacist is approved, provided that the pharmacist demonstrates to the Authority that there is a definite unmet public need for that approval;
(eb)notwithstanding anything contained in subparagraphs (a) to (ea), approval of a pharmacist shall be recommended in respect of premises at or from which the pharmacist has, since before 18 December 1990 (being the date on which legislation for pharmacy restructuring came into effect), been supplying pharmaceutical benefits in lieu of other premises in respect of which the pharmacist is approved under section 90 of the Act;
(f)notwithstanding anything contained in subparagraphs (a) to (ea), approval of a pharmacist in respect of particular premises shall be recommended where a pharmacist is approved under section 90 of the Act in respect of those premises and where that approval is to be cancelled immediately prior to the granting of the first-named approval, as a consequence of a change of ownership arrangements of the pharmacy business conducted at those premises;
(g)notwithstanding anything contained in subparagraphs (a) to (f), approval of a pharmacist in respect of particular premises shall be recommended where the pharmacist entered into a financial commitment prior to 9 August 1990 (being the date on which the granting by the Secretary of approvals to pharmacists
under section 90 of the Act was restricted pending the passage of legislation for pharmacy restructuring) in the expectation that an approval would be granted in respect of those premises, provided that the Authority is satisfied that there was such a prior commitment and the pharmacist produces to the Authority either -
(i)a bank statement, supported if necessary by an affidavit by the pharmacist's solicitor or accountant; or
(ii)details of any contractual arrangements together with an affidavit by the pharmacist's solicitor or accountant attesting to the correctness of the date that commitment was entered into.
(h)notwithstanding anything contained in subparagraphs (a) to (g), approval of a pharmacist in respect of particular premises shall be recommended where the application for approval of the pharmacist in respect of those premises was made prior to 9 August 1990 (being the date on which the granting by the Secretary of approvals to pharmacists under section 90 of the Act was restricted pending the passage of legislation for pharmacy restructuring)."
At the time of the application the applicants and Grapsas were approved under the Act as pharmacists entitled to
supply pharmaceutical benefits at, or from, the Belmont Forum premises.
Other pharmacists had been approved to supply pharmaceutical benefits from other premises situated in the Belmont Forum. In addition to the pharmacies at the Belmont Forum six other pharmacy businesses were operated within five kilometres of the Belmont Forum. In 1992 a property developer established a medical centre opposite the Belmont Forum. The medical centre was located less than 500 metres from the applicants' pharmacy in the Belmont Forum. Ten medical practitioners provided medical and pathology services at that centre. The developer desired to include a pharmacy in the development. Several pharmacists operating in the area were invited by the developer to establish a pharmacy at the medical centre. The applicants and Grapsas were among the pharmacists approached by the developer. The applicants and Grapsas were keen to establish such a pharmacy but not at the expense of relinquishing their pharmacy at the Belmont Forum.
Amendments made to the guidelines in July 1993 encouraged the applicants and Grapsas to devise a scheme which they considered would achieve the object of establishing a pharmacy at the medical centre and retaining the pharmacy at the Belmont Forum. In broad terms the scheme was as follows:- the applicants would purchase one of the pharmacy businesses
operated within five kilometres of the Belmont Forum, ("the Love Street Pharmacy"), transfer the Belmont Forum pharmacy to the medical centre and transfer the Love Street Pharmacy to the Belmont Forum premises. In respect of the establishment of a pharmacy at the medical centre, the applicants intended to rely on guideline 3(d) and for the continuation of a pharmacy at the Belmont Forum premises the applicants intended to rely on guideline 3(eab).
The applicants and Grapsas carried on business as pharmacists at the Belmont Forum in partnership and made the contract to purchase the business of the Love Street pharmacy as partners. It was proposed that the pharmacy business to be transferred to the medical centre be taken over and conducted by the male applicant Staltari as sole practitioner. The pharmacy business conducted at the Belmont Forum premises was to continue to be a business operated by the partners.
Accordingly, four applications (W203, W204, W205, W206) were lodged on 1 November 1993 seeking the grant of approvals under s.90 of the Act. In respect of application W203 the Authority recommended that the partners' application to be approved as pharmacists to supply pharmaceutical benefits at the Love Street pharmacy be granted pursuant to guideline 3(f), the partners being the new owners of the pharmacy business conducted at those premises.
In respect of application W204 the Authority recommended that the application by the partners to be approved as pharmacists supplying pharmaceutical benefits at the medical clinic opposite the Belmont Forum be approved in that the terms of guideline 3(d) relied upon by the partners had been satisfied. Pursuant to guideline 3(d) an application for approval shall be recommended where the premises in respect of which a pharmacist seeks to be approved is located not more than five hundred metres "from other premises in respect of which the pharmacist is already approved under s.90 of the Act and from which the pharmacist proposes to cease supplying pharmaceutical benefits". [emphasis added]
In application W206, the Authority recommended that an application by A.M. Staltari to be the pharmacist approved to supply pharmaceutical benefits to the medical centre be granted in that the terms of guideline 3(f) had been met, in that the partners had applied under s.98 of the Act for the approval granted under application W204 in respect of those premises to be cancelled upon transfer of the ownership of that business from the partners to Staltari.
With regard to application W205, the Authority recommended that the application by the partners to be approved as pharmacists to supply pharmaceutical benefits at the Belmont Forum be rejected in that guideline 3(eab) relied
upon by the partners was not satisfied, the Belmont Forum not being a "regional centre" within the meaning of that term as used in guideline 3(eab).
The applicants before the Tribunal and in this proceeding did not include Grapsas. That omission was not explained.
It is obvious from the facts recited above that the proposed scheme could not succeed. Notwithstanding that the Authority recommended that the partners be approved as pharmacists entitled to supply pharmaceutical benefits at the medical centre, it was plain on the face of the applications lodged with the Authority that the partners were unable to satisfy the terms of guideline 3(d) in respect of that application. The partners did not propose to cease supplying pharmaceutical benefits at the Belmont Forum. The partners proposed to continue supplying pharmaceutical benefits at the Belmont Forum and to continue a pharmacy business in partnership at the Belmont Forum premises. On those facts, if the partners were to be approved under s.90 as pharmacists entitled to supply pharmaceutical benefits at the medical centre, they had to meet the requirements of guideline 3(e). The partners did not attempt to meet the terms of that guideline in presenting their application to the Authority.
It appears that in recommending that the Secretary approve application W204 the Authority considered that the requirements of guideline 3(d) would be satisfied if an approved pharmacist intended to have that approval cancelled under s.98 of the Act notwithstanding that the pharmacist may also intend to apply forthwith to be re-approved as the pharmacist entitled to supply pharmaceutical benefits from those premises. Plainly, the guideline is directed to the intention of a pharmacist to cease to supply pharmaceutical beneifts from approved premises and is not coterminous in effect with the cancellation of an approval granted under s.90. Contrary to the terms of the guideline the partners, at all times, intended to continue to supply pharmaceutical benefits at the Belmont Forum premises.
The Court was not informed whether the Secretary had granted an approval to the partners under s.90(3B) of the Act. If the approval was not granted the point sought to be raised on this appeal was moot. In the absence of any submission to the contrary it will be assumed that it is necessary to determine the question raised on the appeal.
The term "regional centre" as used in guideline 3(eab) is defined in cl.2 of the guidelines as follows:
"'regional centre' means a shopping centre with
total gross leasable retail area of at least 20,000 square metres, incorporating at least 60 specialty shops and at least 1 supermarket and at least 1 full-line department store;"
The term "full-line department store" is not defined.
The Belmont Forum contains a gross leasable retail area of 35,000 square metres, 105 specialty shops and 2 supermarkets. It also contains 2 stores described to the Tribunal as "large discount department stores". The term "discount department store" is used in the guidelines in the definition of a community centre which reads as follows:
"'community centre' means a shopping centre, not being a regional centre, with total gross leasable retail area of at least 5,000 square metres, incorporating at least 30 specialty shops and at least 1 supermarket and either a junior department store or a discount department store;"
It was not in issue that the stores known as "K-mart" and "Big W" situated at the Belmont Forum may be described as "large discount department stores". Counsel for the applicants submitted that the ordinary meaning of the term "full-line department store" included a retail store conducted as a discount department store and that the Tribunal had erred when it found that the term did not have a common English usage and that the meaning of the term as used in the guidelines was a particular meaning attributed to the term by persons concerned
with the operation of shopping centres and the business of retailing.
The questions raised by the appeal are whether the term "full-line department store" has an ordinary meaning and, if so, whether the maker of the guidelines intended to displace that ordinary meaning and supplant it with a specialised meaning commonly used in the retail trade.
If a legislative provision does not convey an intention to displace the ordinary meaning of particular words or expressions used, it is not permissible to receive evidence of a specialised meaning attributed to that term by members of a particular trade or division of business. (See: Australian Lighting and Hardware (Falkner) Pty. Ltd. v. Brilight Nominees Pty. Ltd. [1994] 1 V.R. 553 at 556)
If the legislature does intend a technical meaning or a specialised or trade sense to be applied to words used, then evidence may be received to establish that meaning providing that the evidence shows that meaning to be commonly used in a defined class of trade or business. (See: Marine Power Australia Pty. Ltd. v. Controller-General of Customs (1989) 89 A.L.R. 561 per Lockhart J. at 572; Herbert Adams Pty. Ltd. v. F.C.T. (1932) 47 C.L.R. 222 per Dixon J. at 228-229; Agfa-Gavaert Ltd. v. Collector of Customs (1994) 124
A.L.R. 645.) If the expression is not uniformly understood in a specialised sense in the relevant class of trade or business then a special meaning will not be established and the ordinary meaning will apply. (See: Ness Security Products Pty. Ltd. v. Collector of Customs, Unreported (Gummow J., 20 September 1994 at 11).)
The expression "department store" had its origin in the United States but has been a commonly used in this country for many years and is an expression of settled meaning. The common understanding conveyed by the term is not far removed from the definition found in The International Webster Dictionary "a large retail establishment in which many different lines of merchandise are carried in separate departments under one general management". Do the words "full-line", if added to the term "department store", create another expression with a new meaning or are the words merely an adjectival reinforcement of the ordinary meaning of that term.
Although the expression "full-line department store" cannot be said to be part of common parlance in Australia the natural meaning of the term is not difficult to define. It is a department store in which all lines of merchandise likely to be carried in such a store may be found.
If the context in which the expression is used in the guidelines is then considered it tends to reinforce that ordinary meaning rather than negate it, although it may be said that a regional centre defined as a shopping centre with a gross leasable retail area of at least 20,000 square metres and 60 specialty shops is not a centre of such a size, according to those minimum dimensions, likely to include a department store, full-line or otherwise. To that extent the context does raise the question whether a department store referred to in the definition of regional centre may bear a meaning other than the ordinary meaning of that term. However, the definition of community centre which distinguishes a "junior department store" and a "discount department store" shows that the maker of the guidelines and, therefore, the legislature, did not intend to depart from the ordinary meaning of the term department store when the term "full line department store" was used in the definition of a regional centre. It is obvious from those definitions that it is not intended that either a junior department store or a discount department store be regarded as the equivalent of a full-line department store. Counsel suggested that a "full-line discount department store" may be so regarded but it is not an expression used in the guidelines and reference to such a term really begs the issue to be decided.
Counsel further submitted that it may be assumed
that it was the intention of the delegated legislation, inter alia, to rationalise the distribution of pharmacies by reference to the number of customers attracted to a shopping centre. That is, the larger the number of customers served by a shopping centre the greater would be the public need for pharmacy services at that centre.
So much may be accepted but the fact remains that the legislature chose to stratify shopping centres for the purpose of the guidelines not by reference to the number of customers using a shopping centre but by reference to shopping centres which contain a full-line department store. Although other elements of the definition of regional centre, namely, 20,000 square metres of gross leasable retail area and 60 specialty shops would be at the lower end of the scale of regional centres, the need for there to be a full-line department store shows a clear intention that the centre be one of a truly regional character.
The Tribunal found that the term full-line department store did not have a common English usage and received evidence that the term, when used by shopping centre managers, owners or developers, meant a multi-level store that was purpose built and of at least 10,000 square metres of gross leasable area with a complete range of merchandise, including "white" and "brown" goods and furniture.
Although the Tribunal erred in the manner in which it derived the meaning of that term and, therefore, in the manner in which it determined the construction of guideline 3(eab), it was still the case that the Tribunal correctly determined that the Belmont Forum was not a regional centre within the meaning of that guideline and, therefore, the decision of the Tribunal that the partners' application to transfer the Love Street pharmacy to the Belmont Forum premises could not be approved contained no error.
The "appeal" must be dismissed. A further submission of the applicants that the Court is empowered, and should, direct the Secretary to grant the applicants' application for approval if the criteria specified in cl.3(eab) were satisfied does not fall for consideration.
There will be an order that the applicants pay the respondents' costs of the application.
I certify that this and the preceding eighteen (18)
pages are a true copy of the Reasons for Judgment of his Honour Justice Lee.
Associate:
Date:
APPEARANCES
Counsel for the Applicants: C.L Zelestis Q.C.
S. Bhojani
Solicitors for the Applicants: Messrs Smith Williamson Singh
Counsel for the First
and Second Respondents: C. Pullin Q.C.
M. Sokolich
Solicitor for the First
and Second Respondents: Australian Government Solicitor
Date of Hearing : 18 August 1994
Date of Judgment: 20 January 1995
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