Stambe v Minister for Health

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FEDERAL COURT OF AUSTRALIA

Stambe v Minister for Health [2019] FCA 43

File number: VID 1399 of 2017
Judge: MORTIMER J
Date of judgment: 29 January 2019
Catchwords:

ADMINISTRATIVE LAW – application for review of exercise of Ministerial discretion pursuant to s 90A(2) of the National Health Act 1953 (Cth) granting approval to supply pharmaceutical benefits at particular premises – whether procedures required by law to be observed were not observed – whether Minister failed to consider comments, information and documents provided by applicant pursuant to invitation by Minister to do so – where Minister’s consideration informed by Ministerial briefing note – where Minister adopted draft reasons prepared by departmental staff subsequent to exercise of discretion – consideration of availability of inferences concerning which materials read by Minister – in the circumstances, Minister failed to consider materials provided by applicant – application allowed on ground one

ADMINISTRATIVE LAW – application for review of exercise of Ministerial discretion pursuant to s 90A(2) of the National Health Act 1953 (Cth) granting approval to supply pharmaceutical benefits at particular premises – whether Minister failed to take into consideration relevant considerations or took into account irrelevant considerations – matters raised by applicant were neither irrelevant nor mandatory considerations – whether Minister’s decision involved an error of law in definition of “community” adopted – no error in definition adopted by Minister – grounds two and three dismissed

STATUTORY INTERPRETATION – consideration of scope of Ministerial discretion pursuant to s 90A(2) of the National Health Act 1953 (Cth) – interpretation of scope of Minister’s obligation under s 90D(3) of the National Health Act 1953 (Cth) to consider comments, information or documents provided by a person at Minister’s invitation

Legislation:

Constitution

Aboriginal and Torres Strait Islander Heritage Protection Act 1984 (Cth)

Administrative Decisions (Judicial Review) Act 1977 (Cth) ss 5(1)(b), 5(1)(e), 5(1)(f), 5(2)(a), 5(2)(b), 13

Environment Protection and Biodiversity Conservation Act 1999 (Cth)

Federal Court of Australia Act 1976 (Cth) s 37N

Migration Act 1958 (Cth) ss 501(3), 501G(1)(e)

National Health Act 1953 (Cth) ss 90, 90A, 90B, s 90D, 99L, Part VII

Trade Practices Act 1974 (Cth) Part IIIA
Cases cited:

Anderson v Director-General of the Department of Environmental and Climate Change [2008] NSWCA 337; 251 ALR 633

Angelos v Minister for Health [2014] FCA 706; 226 FCR 275

Assarapin v Australian Community Pharmacy Authority [2016] FCAFC 9; 239 FCR 161

Australian Securities and Investments Commission v Hellicar [2012] HCA 17; 247 CLR 345

Ayoub v Minister for Immigration and Border Protection [2015] FCAFC 83; 231 FCR 513

Bat Advocacy NSW Inc v Minister for Environment Protection, Heritage and the Arts [2011] FCAFC 59

Carrascalao v Minister for Immigration and Border Protection [2017] FCAFC 107; 252 FCR 352

Caswell v Powell Duffryn Associated Collieries Ltd [1940] AC 152; [1939] 3 All ER 722

Chetcuti v Minister for Immigration and Border Protection [2018] FCA 477

CRI026 v Republic of Nauru [2018] HCA 19; 355 ALR 216

Folau v Minister…

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Details
Case
[2019] FCA 43
Decision Date

CaseChat Overview and Summary

The matter before the court was an application for review of a decision by the Minister for Health, pursuant to s 90A(2) of the National Health Act 1953 (Cth), granting approval to YL Health Group to supply pharmaceutical benefits at particular premises. The applicant, Mt Stambe, who owns two pharmacies close to the proposed pharmacy, challenged the Minister’s decision on several grounds, including whether the Minister failed to observe procedures required by law, failed to consider comments, information, and documents provided by the applicant, and took into account irrelevant considerations or failed to take into account relevant considerations. The court was also required to consider the scope of the Minister’s discretion under s 90A(2) and the interpretation of the Minister’s obligation under s 90D(3) of the Act to consider comments, information, or documents provided by a person at the Minister’s invitation.

The court held that the Minister failed to consider the materials provided by the applicant, as required by s 90D(3) of the Act. The Minister had prepared draft reasons for his decision, which were subsequently adopted by him, but there was no evidence to suggest that the Minister had read the materials provided by the applicant before making his decision. The court found that the Minister’s consideration was informed by a Ministerial briefing note, which did not include the applicant’s submissions. The court rejected the argument that the Minister was not legally obliged to read any source material submitted to him before exercising the power under s 90A(2), as the obligation to consider the material was mandatory. The court also dismissed the other two grounds of review, finding that the matters raised by the applicant were neither irrelevant nor mandatory considerations, and that there was no error in the definition of “community” adopted by the Minister.

In conclusion, the court allowed the applicant’s first ground of judicial review, finding that the Minister failed to consider the materials provided by the applicant. The court will allow the parties an opportunity to agree upon appropriate relief, or failing agreement, make submissions on that matter. The court will determine the question of appropriate final orders on the papers.

Orders

Orders of the court

1. The parties are to confer and attempt to agree appropriate final orders reflecting the Court’s decision, including as to costs.

2. Any agreed proposed orders are to be filed and served on or before 4 pm on 5 February 2019.

3. In the absence of any agreed proposed orders:

(a) the applicant is to file and serve submissions on appropriate final orders and any further affidavit evidence relevant to the orders sought, together with a proposed form of final order on or before 4 pm on 12 February 2019; and

(b) the second respondent is to file and serve submissions on appropriate final orders and any further affidavit evidence relevant to the orders sought, together with a proposed form of final order on or before 4 pm on 19 February 2019.

4. Subject to any further order, the question of appropriate final orders will be determined on the papers.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

For the reasons set out below, I have upheld the applicant’s first ground of judicial review, and not upheld his two other grounds. The parties will be given an opportunity to agree upon appropriate relief, or failing agreement, make submissions on that matter.Background The dispute about YL Health Group’s pharmacy is of long standing, and has already been the subject of proceedings in this Court in 2016, which resulted in the setting aside of an earlier decision of the Australian Consumer Pharmacy Authority to recommend YL Health Group be approved to supply pharmaceuticals from its Mount Waverley premises. The approval application was remitted to the Authority for reconsideration. On reconsideration, the Authority recommended the rejection of YL Health Group’s application, on the basis that the proposed pharmacy did not meet the requirements in the applicable pharmacy rules because it was less than 500 metres from the nearest approved pharmacy premises, being the applicant’s two pharmacies, and those premises were not in a shopping centre that met the definition of a “large shopping centre”. The distance requirement that there be at least 500 metres between approved pharmacies, and the “large shopping centre” requirement, were imposed under the applicable rules at the relevant time: the National Health (Australian Community Pharmacy Authority Rules) Determination 2011 (Cth), which I will call “the Rules”. The Rules were made under s 99L of the National Health Act. There is no dispute between the parties in the present proceeding that the pharmacy now operated by YL Health Group would in fact be, and in fact is, considerably less than 500 metres from the applicant’s pharmacies. The decision to reject YL Health Group’s application was made by a delegate of the Secretary on 9 May 2017. On 7 June 2017, YL Health Group made a request under s 90B(1) of the National Health Act for the Minister to exercise the power reposed in him under s 90A(2) of the Act. Section 90A relevantly provides:90A Minister may substitute decision approving pharmacist(1)This section applies in relation to a decision of the Secretary under section 90 rejecting an application by a pharmacist for approval to supply pharmaceutical benefits at particular premises, if:(a)the application was made on or after 1 July 2006; and(b)the decision was made on the basis that the application did not comply with the requirements of the relevant rules determined by the Minister under section 99L.(2)The Minister may substitute for the Secretary’s decision a decision approving the pharmacist for the purpose of supplying pharmaceutical benefits at the particular premises if the Minister is satisfied that:(a)the Secretary’s decision will result in a community being left without reasonable access to pharmaceutical benefits supplied by an approved pharmacist; and(b)it is in the public interest to approve the pharmacist.(3)For the purposes of subsection (2):community means a group of people that, in the opinion of the Minister, constitutes a community.reasonable access, in relation to pharmaceutical benefits supplied by an approved pharmacist, means access that, in the opinion of the Minister, is reasonable.(4) The power under subsection (2) may only be exercised:(a) on request by the pharmacist made under section 90B; and(b) by the Minister personally.(5)Subject to subsection 90B(5), the Minister does not have a duty to consider whether to exercise the power under subsection (2) in respect of the Secretary’s decision.

Evidence

Evidence Before The Court

YL Health Group contends the Minister discharged his statutory obligation in s 90D(3) of the Act. It submits the decision briefing note demonstrates clearly that the applicant’s submissions were drawn to the Minister’s attention, and were attached. Further, a summary was given in the decision briefing note itself. YL Health Group submits the Court should infer the Minister read the decision briefing note. It further submits that the following statements in the reasons are probative of the factual proposition that the Minister “considered” the applicant’s submissions. At [22] of his reasons, the Minister states:Evidence22.I considered the second Ministerial Submission from Mr Simon Cotterell, First Assistant Secretary, Provider Benefits Integrity Division of my Department, including the following:•The first Ministerial Submission.•Department’s letter dated 10 August 2017 advising the Applicant of my decision to consider the request and the Applicant’s response.•Department’s letters, dated 10 August 2017, to the owner of the two existing pharmacies in Mount Waverley and the response from Ms McGrath.•Summary of the Ministerial discretionary process and the Location Rules.•Map of the proposed pharmacy, nearest approved pharmacies and medical centres.•Correspondence sent to me and my Department relating to the request to exercise my personal power. At [54], the Minister states:I found that, based on a letter to me dated 10 August 2017, from Mt Stambe, owner of the two closest approved pharmacies, Mr Stambe opposed the approval of the proposed pharmacy. YL Health Group goes further, and submits the Court should infer that when the Minister endorsed the first page of the reasons briefing note, thus adopting the entirety of the reasons as his own, he had read the submissions from Ms McGrath on behalf of the applicant, and had also considered the submissions from Ms McGrath as summarised in the decision briefing note. YL Health Group goes even further, and submits that where the Minister states in his findings of fact that he finds a fact “on the basis of research” by his Department, that he read the research before making the finding. I understand the reference to “research” to be to material attached to the reasons briefing note, and attached to or contained in the decision briefing note. YL Health Group further submits, on the basis of the Full Court’s decision in Carrascalao v Minister for Immigration and Border Protection [2017] FCAFC 107; 252 FCR 352, that the Minister was not legally obliged to read any source material submitted to him before exercising the power under s 90A(2). I deal with Carrascalao below: it concerned a personal Ministerial discretionary power in s 501(3) of the Migration Act 1958 (Cth). The particular “procedure” the applicant contends the Minister was required to follow, but did not, was what the applicant contends is the mandatory obligation in s 90D(3) that the Minister “consider” the comments, information or documents provided in response to a notice issued under s 90D(1). Factual findings

Decision

Reasons for decision

Section 90A relevantly provides:90A Minister may substitute decision approving pharmacist(1)This section applies in relation to a decision of the Secretary under section 90 rejecting an application by a pharmacist for approval to supply pharmaceutical benefits at particular premises, if:(a)the application was made on or after 1 July 2006; and(b)the decision was made on the basis that the application did not comply with the requirements of the relevant rules determined by the Minister under section 99L.(2)The Minister may substitute for the Secretary’s decision a decision approving the pharmacist for the purpose of supplying pharmaceutical benefits at the particular premises if the Minister is satisfied that:(a)the Secretary’s decision will result in a community being left without reasonable access to pharmaceutical benefits supplied by an approved pharmacist; and(b)it is in the public interest to approve the pharmacist.(3)For the purposes of subsection (2):community means a group of people that, in the opinion of the Minister, constitutes a community.reasonable access, in relation to pharmaceutical benefits supplied by an approved pharmacist, means access that, in the opinion of the Minister, is reasonable.(4) The power under subsection (2) may only be exercised:(a) on request by the pharmacist made under section 90B; and(b) by the Minister personally.(5)Subject to subsection 90B(5), the Minister does not have a duty to consider whether to exercise the power under subsection (2) in respect of the Secretary’s decision. Thus, the Minister has a personal power under this provision to substitute a decision made by the Secretary with a different decision. It can be seen that the Minister’s power to substitute a different decision is conditioned on the Minister being satisfied of the two matters set out in s 90A(2)(a) and (b). On 8 August 2017, the Minister decided to consider the request by YL Health Group for approval under s 90A. As part of the Minister’s consideration of the request by YL Health Group for a substituted decision, the Minister invited the applicant as the owner of two existing approved pharmacies close to the proposed pharmacy to provide comments, information or documents relating to YL Health Group’s request for approval. The applicant submitted material in response to this request on 30 August 2017. He submitted:(1)A 19 page written submission;(2)Some “feedback forms” from each of his two pharmacies; and(3)An email about an existing 24 hour pharmacy which he contended was accessible by the Mount Waverley community. I will return to the applicant’s submission to the Minister in considering his grounds of judicial review. The Minister decided to exercise his discretion to approve the request of YL Health Group on 1 November 2017. A “Notice of approval” was provided to YL Health Group on 3 November 2017. The Minister subsequently gave reasons for his decision, pursuant to s 13 of the Administrative Decisions (Judicial Review) Act 1977 (Cth), after a request by the applicant. The reasons were drafted by others but were endorsed by the Minister on 21 November 2017. They were provided by email to the applicant’s legal representative on 28 November 2017.

Ratio Decidendi

Legal Principle Established

Therefore, the evidence is that at some time during the day of 1 November 2017, the Minister considered the decision briefing note and decided to exercise his power. I infer from Ms Hurley’s position within the Department, and the way her evidence is expressed, that this evidence is hearsay (as are the reasons, at least as evidence of the Minister’s “consideration”). There is nothing to suggest she was present when the Minister considered the decision briefing note. Ms Hurley has been put forward as an institutional witness to provide relevant documents and an accurate chronology. That is not a criticism of her evidence in any way, but her evidence is not of the kind that could assist the Court in understanding how much time the Minister devoted to the “consideration” of the decision briefing note, or indeed if he “considered”, independently of the contents of the briefing note itself, any of its attachments. “Proper genuine and realistic consideration” The applicant puts in the alternative that the Minister failed to give “proper, genuine and realistic consideration” to his response to the Minister’s invitation. It is unclear whether this alternative also relies on the “procedure” in s 90D(3), or is more of a free standing argument about the need for the Minister to consider material the Minister has sought out, more akin to the approach taken by the Full Court in Carrascalao, which did not rely on a specific statutory provision. An argument framed by the use of this phrase has a somewhat fraught history in previous authorities of this Court. The generally agreed source for the phrase as an approach to judicial review is identified as Gummow J’s reasons for judgment in Khan v Minister for Immigration and Ethnic Affairs [1987] FCA 457; 14 ALD 291, a decision which concerned an allegation of the inflexible application of executive policy. As YL Health Group submits, a ground of review formulated in this way has been held to create a “danger” of giving courts a “general warrant” to examine the procedural and substantive merits of a decision, but by way of language characterised as “of indefinite and subjective application”: see Minister for Immigration and Multicultural Affairs v Anthonypillai [2001] FCA 274; 106 FCR 426 at 442 (Heerey, Goldberg and Weinberg JJ). Similar observations were made by the Full Court in Carrascalao, and by Basten JA of the NSW Court of Appeal (Allsop P, as his Honour then was, agreeing) in Swift v SAS Trustee Corporation [2010] NSWCA 182 at [45], quoted with apparent approval by the High Court in Minister for Immigration and Citizenship v SZJSS [2010] HCA 48; 243 CLR 164 at [30]. See also Anderson v Director-General of the Department of Environmental and Climate Change [2008] NSWCA 337; 251 ALR 633 at [54]. In Stirling v Minister for Finance [2017] FCA 874, Tracey J set out many of the relevant authorities, and concluded at [40]:The cases set out above indicate that the phrase “proper, genuine and realistic” may be used, with appropriate caution, to describe the quality of the attention required to be given, by a decision-maker, to mandatory considerations.