Strutt & Anor v Australian Community Pharmacy Authority
[2006] FMCA 1245
•28 August 2006
FEDERAL MAGISTRATES COURT OF AUSTRALIA
STRUTT & ANOR v AUSTRALIAN COMMUNITY PHARMACY AUTHORITY & ORS [2006] FMCA 1245
ADMINISTRATIVE LAW – Administrative Decisions (Judicial Review) Act 1977 – Decision to grant pharmacy approval – whether reviewable – whether error –whether denial of natural justice by failing to give opportunity to make submissions before approval – decision remitted by Administrative Appeals Tribunal – meaning of ‘catchment area’ – whether error in identification of ‘catchment area’ – ‘definite community need’.
National Health Act 1953, ss.90, 99K, 99L, 135A
Administrative Appeals Tribunal Act 1975, s.29(1)
Administrative Decisions (Judicial Review) Act 1977, ss.5(1)(e), 5(1)(f), 5(2)(g)
Re Hargreaves and Australian Community Pharmacy (No2) 148 ALD 147
AG (NSW) v Quinn (1990) 170 CLR 1
Annetts v McGann (1990) 170 CLR 596
Haoucher v Minister for Immigration (1990) 169 CLR 648
Minister for Immigration v Teoh (1995) 183 CLR 273
Kioa v West (1985) 159 CLR 550
Wood v Australian Community Pharmacy Authority (2002) FCA 1592
Applicant VEAL of 2002 v Minister for Immigration and Multicultural and Indigenous Affairs (2005) 222 ALR 411
Pharmacy Restructuring Authority v Martin (1994) 53 FCR 589
Pharmacy Guild of Australia and Ors v the Australian Community Pharmacy Authority and Ors (1996) 46 ALD 310
Tooheys Ltd v Minister for Business and Consumer Affairs (1981) 54 FLR 421
Re Minister for Immigration and Multicultural Affairs; Ex parte Lam (2003) 214 CLR 1
Corio Bay and District Private Hospital NH Pty Ltd v Minister for Family Services and Ors (1998) 87 FCR 37
Russell v Duke of Norfolk (1949) 1 All ER 190
Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321
Re Minister for Immigration and Multicultural Affairs; Ex parte Applicant S20/2002 (2003) 198 ALR 59
Minister for Immigration and Multicultural Affairs v Eshetu (1999) 197 CLR 611
McWilliam v Civil Aviation Authority [2004] FCA 1701
Applicants: RICHARD STRUTT and HILL TUCKER
First Respondent: AUSTRALIAN COMMUNITY PHaRMACY AUTHORITY
Second Respondent: SECRETARY OF DEPARTMENT OF HEALTH AND AGEING
Third Respondent: MARISA ARENA
File number: PEG242 of 2005
Judgment of: McInnis FM
Hearing date: 15 March 2006
Delivered at: Perth
Delivered on: 28 August 2006 REPRESENTATION
Counsel for the Applicants: Mr R.M. Niall
Solicitors for the Applicants: Christensen Vaughan
Counsel for the First and Second Respondents: Mr P. McLiver
Solicitors for the First and Second Respondents: Australian Government Solicitor
Counsel for the Third Respondent: Mr S. Burley
Solicitors for the Third Respondent: Guild Legal ORDERS
The Application be dismissed with costs.
FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
PERTHPEG242 of 2005
RICHARD STRUTT AND HILTON TUCKER Applicants
And
AUSTRALIAN COMMUNITY PHARMACY AUTHORITY First Respondent
SECRETARY OF DEPARTMENT OF HEALTH AND AGEING Second Respondent
MARISA ARENA Third Respondent
REASONS FOR JUDGMENT
1.In this application, Richard Strutt and Hilton Tucker (the Applicants) seek to review a decision of Australian Community Pharmacy Authority (the Authority) made on 26 August 2005 to recommend to the Secretary of Department of Health and Ageing and/or the Health Insurance Commission as delegate of the Second Respondent that approval be given to a pharmacist to supply pharmaceutical benefits from premises at Shop 3, Helena Valley Shopping Centre, Western Australia (the new pharmacy) under the Health Act 1953. Review is also sought of a decision of the Second Respondent made on or about 2 September 2005 to grant approval to the new pharmacy under the National Health Act 1953 (the NHA).
2.Marisa Arena (the Third Respondent) was the pharmacist Applicant for approval to supply pharmaceutical benefits from the new pharmacy.
3.The Applicants have relied upon a minute of amended application for order of review. In that application, the Applicants claim to be aggrieved by the decisions because:-
“1.The Applicants are approved to supply pharmaceutical benefits under the National Health Act 1953 from Shop 2, 160 Scott Street, Helena Valley and have a special interest in the development and maintenance of an effective, efficient and well‑distributed community pharmacy service in Helena Valley;
2.The Second Respondent's decision will have an adverse commercial effect on the business of the Applicants.”
4.It will be noted from the grounds that the Applicants operate an existing pharmacy at Scott Street, Helena Valley (the existing pharmacy). Hence the Applicants claim to have an interest in the approval granted for the new pharmacy.
5.It is common ground that the existing pharmacy and the new pharmacy are both within a short distance of each other in the Helena Valley. This is shown in a map depicting the area claimed to be relevant for this application and referred to by the Authority as the appropriate catchment area. The map is Figure 5 in a report from MGA Town Planners dated July 2005 (Exhibit A1) (See Attachment 1). This was a report provided for the Third Respondent. On the map the existing pharmacy is referred to as “Scott Street” at or near the intersection of Scott Street and Helena Valley Road. The new pharmacy is referred to on the map as “Helena Valley Road” situated at the intersection of Helena Valley Road north of the Helena Valley Shopping Centre and at or near the intersection of Helena Valley Road with Torquata Boulevard.
6.It should further be noted that the MGA Town Planners report was accepted by the Authority in making its decision to approve the new pharmacy. It is clear from the plan that not only the existing and new pharmacies appear, but also other pharmacies are located in what might be described as the Helena Valley district. Some of the existing pharmacies appear to be reasonably close together. For example there appears to be a pharmacy at Centrepoint and Midland Gate in reasonably close proximity. Likewise there is a pharmacy at Darling Ridge and Swan View, both of which appear to be in close proximity. Similarly, there are pharmacies at High Wycombe and Newburn Road. However, the fact that there are examples of existing pharmacies in close proximity is not a matter of any particular relevance to this application but rather a simple observation made when viewing the map.
7.The MGA Town Planners report, provided to the Third Respondent, was accepted by the Authority in making its decision to approve the new pharmacy. It is clear from the plan that not only the existing and new pharmacies appear in the region. The new pharmacy and the existing pharmacy are both at or near the same road, namely the Helena Valley Road. The distance between the two premises was the subject of report, though is not a matter in issue before this court, save that the Applicants would appear to be aggrieved by the proximity of the new pharmacy to the existing pharmacy with consequential claimed detrimental impact.
Grounds
8.In the amended application the following grounds are relied upon where the new pharmacy is referred to as “the proposed pharmacy”:-
“1. The decision of the First Respondent involved an error of law in that the First Respondent held that ‘a catchment area serviced or proposed to be serviced’ by the proposed pharmacy as provided for in the Rules made under s.99L of the National Health Act 1953, could overlap or, alternatively substantially overlap with the catchment areas of other approved pharmacies and failed to identify a discrete catchment area for the proposed pharmacy as it was required to do.
2.The First Respondent, in determining that an area was overlapped, or substantially overlapped, by the catchment areas of other approved pharmacies was the catchment area of the proposed pharmacy, made a decision that it was an improper exercise of the power conferred on the First Respondent in that it was so unreasonable that no reasonable person could have so exercised the power.
3. The First Respondent breached the Rules of natural justice in failing to disclose to the Applicants the application and other material and information upon which it proposed to make its decision.
Particulars
(a) The First Respondent notified the Applicants on or about 24 February 2005 that it had recommended that the application for approval to supply pharmaceutical benefits from premises at Shop 3, Helena Valley Shopping Centre, Western Australia not be approved.
(b) The First Respondent failed to notify the Applicants that it would be reconsidering the application for approval at any time after 24 February 2005 in circumstances where the catchment area claimed in respect of the proposed pharmacy wholly, or substantially, overlapped with the catchment area of the applicant.
(c) The First Respondent failed to notify the Applicants as to the catchment area claimed by the proposed pharmacy.
(d) The First Respondent failed to advise the Applicants as to the nature and substance of the Third Respondent's material as to catchment.
4.In the event that the decision of the First Respondent is set aside or quashed, the decision of the Second Respondent must also be set aside on the basis that the Second Respondent did not have jurisdiction to make the decision as there was no valid recommendation of the First Respondent for the purposes of s.90(3B) of the National Health Act 1953.
5.In the alternative, the First Respondent, in finding that the catchment area had a population of more than 3000 people made a decision that was an improper exercise of the power conferred on the First Respondent in that it was so unreasonable that no reasonable person could have so exercised the power and was irrational, illogical and not based on findings or inferences of fact supported by logical grounds.
Relevant Legislation
9.There is no issue between the parties concerning the legislative framework as set out in the Applicants' submissions filed on 9 March 2006 which conveniently refer to the following:-
·By section 90(1) of the National Health Act 1953 (NHA), the Second Respondent may approve a pharmacist for the purpose of supplying pharmaceutical benefits from particular premises.
·By section 90(3A), an application must be referred to the Authority.
·By section 99K(1)(b), power is conferred upon the Authority to make recommendations to the Second Respondent whether an applicant should be approved under section 90.
·By section 90(3B), an approval may only be granted by the Second Respondent if the Authority has recommended the grant of approval.
·By section 99L(1), the Minister must determine the "Rules" subject to which the Authority is to make a recommendation under section 99K(1).
·The Minister has made a determination that contains the Rules in Determination No.8 of 2000, as amended to PB9 of 2002 (the Rules).
·The Rules control the discretion of the Authority and any decision of the Authority must be in accordance with the Rules. Smoker v Pharmacy Restructuring Authority (1994) 53 FCR 287.
·By Rule 4 of the Rules approval of a pharmacist must not be recommended except as provided by paragraphs 5 to 10 of the Rules.
10.Relevantly, Rule 5 provides as follows:-
“5.Subject to paragraph 5A, approval of a pharmacist (‘the applicant’) under section 90 of the Act in respect of particular premises must be recommended if the applicant has a legal right to occupy those premises for the purpose of operating a pharmacy and:
(a)(i)those premises are situated at least 1.5 kilometres, by straight line measurement, from the nearest other premises in respect of which a pharmacist is approved under section 90 of the Act; and
(b)(ii) the Authority is satisfied that there is a definite community need for pharmaceutical services in the area in which those premises are situated; or
…”
11.The phrase "definite community need" used in Rule 5(a)(ii) is relevantly defined in Rule 2, under the heading "Interpretation" as follows:-
"’definite community need’, in relation to the catchment area, serviced or proposed to be serviced by a pharmacy, means:
(a) that the catchment area has a population of not less than 3000 for most of the year; and
(b) that the catchment area has the equivalent of a full-time medical practitioner; and
(c) that the catchment area has general shopping facilities.”
12.It is common ground that although the definition of "definite community need" refers to the "catchment area" there does not appear to be any definition of that phrase.
13.All parties in these proceedings referred the court to a decision of the Administrative Appeals Tribunal where Forgie DP considered the issue of both "definite community need" and "catchment". The decision in the matter of Re Hargreaves v Australian Community Pharmacy (No 2) (1995) 41 ALD 147 (Re Hargreaves) whilst dealing with relevant phrases, then dealt with the old Rules under an earlier determination.
14.For reasons which will become apparent it is useful to set out the old definition of "definite community need" considered by the learned Deputy President in Re Hargreaves as follows:-
"Definite community need", in relation to the catchment area serviced by a pharmacy, means that none of the following conditions applies to the area:
(a)that the catchment area has a population of less than 3,000 for most of the year;
(b) that the proportion of disadvantaged persons (aged persons who are unemployed or receive pensions) is less than 10 per cent and can be reasonably serviced by other means;
(c) that the catchment area does not have the equivalent of a full‑time medical practitioner;
(d) that the catchment area is being adequately serviced by other approved pharmacists;
(e) that the total number of claimable PBS prescriptions claimed by approved pharmacists in respect of the catchment area in the last 12 months is less than 3,000;
(f) that isolation from, or a poor, public transport system to adequate shopping does not hinder the bulk of the population;
(g) that the population is mobile and contains a high proportion of commuting workers;
(h) that the catchment area has no general shopping facilities.”
15.It is evident upon an analysis of the new definition of "definite community need" that a decision has been made to reduce the number of factors to be taken into account from eight to three. It is relevant to note in particular that the old definition contained a reference to the catchment area "being adequately serviced by other approved pharmacists".
16.It may also be observed that the old definition varied in another respect in that reference to the catchment area was a reference made to the catchment area "serviced by a pharmacy", whereas the new definition refers to catchment area "serviced or proposed to be serviced by a pharmacy" (emphasis added).
17.It is common ground in this application that in order to properly apply the definition of ‘definite community need’, the Authority was required to determine in the first instance a catchment area serviced or proposed to be serviced by the proposed pharmacy. Once it has done so, then it was required to ascertain whether or not that area has a population of 3000 or more people for most of the year, the equivalent of a full-time medical practitioner, and has general shopping facilities.
18.In the present case there is no issue taken in relation to the question of whether the premises are situated "at least 1.5 kilometres by straight line measurement from the nearest other premises in respect of which a pharmacist is approved under s.90 of the NHA pursuant to Rule 5(a)(i) of the Rules.”
19.Again, I observe that the old Rules provided a slightly different requirement in relation to the question of distance, and it is noted that the old Rules provide that the premises be situated "at least two kilometres measured door to door by the shortest lawful access route from the nearest other premises in respect of which a pharmacist is approved under s.90 of the Act." It is perhaps not surprising that the old definition proved to be a fertile field for judicial determination and legal debate.
20.The new Rules appear to relax the requirements for approval to supply pharmaceutical benefits for new pharmacies.
Background
21.To understand the decision sought to be reviewed, it is appropriate to briefly set out the relevant background in this matter. It will be evident from the grounds relied upon and the grievance expressed by the Applicants that the Applicants are concerned to challenge the establishment of a new pharmacy near to the existing pharmacy.
22.The Authority in its decision of 4 October 2005 relevantly set out the legislation to be applied, and then considered the background and noted that the Third Respondent made an application under s.90 of the NHA on 30 November 2004 for approval to supply pharmaceutical benefits at or from the new pharmacy (Court Book page 4). The approval was sought in accordance with the provision of paragraph 5(a) of the Rules. That application was received by the Health Insurance Commission on 15 December 2004, a delegate of the Secretary of the Department of Health and Ageing, pursuant to the requirements of s.90(3A) of the NHA, for the purpose of obtaining a recommendation as to whether the application should be approved. The Authority's secretariat received the application on 17 December 2004.
23.On 20 December 2004, the secretary of the Authority wrote to pharmacists in the area surrounding the new premises to give them an opportunity to comment on the application. It is relevant to set out an extract from that correspondence, and in particular the letter forwarded to the Applicants' pharmacy dated 20 December 2004 (Court Book page 34) which contains the following:-
“I am writing to you to invite comment on an application to the Australian Community Pharmacy Authority (ACPA) to establish a new approved pharmacy at Shop 3, Helena Valley Shopping Centre, Lot 425 Torquata Boulevard, Helena Valley.
The applicant seeks to establish a new approved pharmacy under Rule 5(a) of the Ministerial Rules. Under Rule 5(a) a new approval may be established, provided that the applicant demonstrates:
· a legal right to occupy the premises for the purposes of operating a pharmacy (local Government approval is also part of legal right to premises - this particularly applies in such cases where there are new developments and/or rezoning has occurred);
· that the distance between the nearest other approved pharmacy and the proposed premises is at least 1.5 km, measured in a straight line between the mid point at floor level of the public access doors; and
· that a definite community need exists in the area of the proposed pharmacy.
To demonstrate a definite community need, the following conditions must be met:
(a) the catchment area has a population of not less than 3000 for most of the year; and
(b) the catchment area has the equivalent of a full-time medical practitioner; and
(c) the catchment area has general shopping facilities .
Under the secrecy provisions of the National Health Act 1953, the ACPA is only able to advise details of the address of the proposed premises and the type of application.”
24.In the same letter, details are provided in relation to a postal address and other information given to the recipient of the letter concerning the consequences of providing false and misleading information. It was indicated that the recipient of the letter would be informed of the Australian Community Pharmacy Association’s (ACPA) recommendation by mail approximately 10-14 working days "after the meeting at which the application is finalised".
25.Significantly the following paragraph also appeared in the letter,
“The ACPA cannot guarantee that it will write to all pharmacists who might be affected by a pending decision due to the limitation of its information. It may, therefore, be in your best interest to make sure other pharmacists who might be affected by the proposal are informed and have the opportunity to comment.”
26.The Authority received correspondence from the then representative of the Applicants for the new pharmacy dated 7 January 2005 (Court Book pages 65-93). It is be evident from the number of pages occupied in the Court Book that the material was voluminous. The Applicants referred to the area where the new pharmacy was to be established and attached a number of appendices which included a lease executed by the Applicants, a surveyor's report, statutory declarations, and other relevant material including photographs. I note that correspondence urged the Authority to make a positive recommendation for the application.
27.Further correspondence was also provided by the Third Respondent, again supporting the application for a new pharmacy dated 13 January 2005.
28.Significantly the Applicants in this application in response to the invitation from the Authority by letter of 20 December 2004 objected to the establishment of the new pharmacy. In the applicant's letter dated 12 January 2005, reference was made to the conditions required to be met in considering "definite community need" and a list of concerns and objections was provided.
29.In that list of objections, reference was made to an earlier application to establish a pharmacy by the same persons who applied to establish the new pharmacy. That application was made in 2003 and was refused. Reference is also made to the Australian Bureau of Statistics 2001 Census data and an analysis provided of the catchment area. Further reference is made to other pharmacies in the area with an attempt to analyse the population.
30.It was asserted by the Applicants that there was no definite community need for an additional pharmacy, and specifically it was stated in the response dated 12 January 2005 the following by Mr Strutt,
“10.In my opinion, there is, in the circumstances, no definite community need for an additional pharmacy which would merely be drawing on the catchment area serviced by my pharmacy and not establishing its own catchment area, having a population of not less than 3,000 for most of the year.”
31.In the same letter, reference was made to the existing pharmacy's hours of operation, and ultimately the author expressed the view that he objected to "the proposed application by the applicant" and stated, "Another pharmacy is not needed in this area."
32.The Authority considered the application for the new pharmacy at a meeting held on 21 January 2005. At that meeting, the Authority considered whether there was a definite community need for the pharmaceutical services in the area in which the new premises were situated. It purported to apply paragraph 5(a) of the Rules.
33.The secretary of the Authority wrote to the Applicants for the new pharmacy on 24 January 2005 advising that the Authority had deferred making a recommendation on the application and requesting further information regarding the claimed catchment area and in particular a scaled map of the area showing the Australian Bureau of Statistics collection centres.
34.By letter dated 10 February 2005, the representatives of the Applicants for the new pharmacy provided the additional evidence in support of the application. The Authority then further considered the application at a meeting held on 18 November 2005. In a report to the delegate of the secretary on 21 February 2005, the Authority recommended that the application not be approved on the basis that the requirements of paragraph 5(a) of the Rules were not met.
35.It is significant to note that on the same date, the Applicants for the new pharmacy were advised through their agent of the decision of the Authority not to recommend approval of the new pharmacy. It is also significant to note that by letter dated 24 February 2005 (Court Book page 132) the Authority notified Mr Strutt, the first applicant, of its recommendation in the following terms:-
“Thank you for your comments and correspondence, on behalf of Robert Prineas and Peter Aitkens, regarding an application to establish a new pharmacy at premises located at Shop 3, Helena Valley Shopping Centre, Lot 425 Torquata Boulevard, Helena Valley.
The application was considered by the Australian Community Pharmacy Authority at its meeting of 18 February 2005 and was recommended to not be approved, as it did not meet the relevant criteria.
I point out that the applicant has the right of appeal to the Administrative Appeals Tribunal for an independent review of this decision. The rejection of this application in no way sterilises this site and the current applicant or any other pharmacist may make a fresh application for the same site in the future.”
36.It will be observed from that letter that a number of options are referred to, including the right of appeal to the Administrative Appeals Tribunal and/or the option of a fresh application for the same site being lodged in the future. As it happens, on 14 March 2005, the Applicants for the new pharmacy applied to the Administrative Appeals Tribunal (the Tribunal) for review of the Authority's decision under s.29(1) of the Administrative Appeals Tribunal Act 1975 (the AAT Act).
37.It appears to be common ground that after a preliminary Tribunal teleconference, a representative of the Applicants for the new pharmacy provided additional evidence in support of the application in the form of a report, and set out a revised catchment area. On 10 May 2005, the Tribunal made a decision (Court Book page 217) in the following terms:-
“Pursuant to section 42D(1) of the Administrative Appeals Tribunal Act 1975, the Tribunal remits the decision under review to the Respondent for reconsideration.”
38.There is no dispute that that decision of the Tribunal was by consent, and appears to have followed the provision by the Applicants for the new pharmacy of additional material which persuaded those representing the Authority to consent to remittal of the decision for reconsideration by the Authority.
39.At a meeting of the Authority held on 20 May 2005, it was agreed to defer the application for the new pharmacy until a meeting scheduled for July of that year. The Authority noted then that the claimed catchment area had been revised from that presented to the Authority when the application had previously been considered on 18 February 2005. But the Authority apparently also noted that the Applicants for the new pharmacy had stated that ABS population estimate figures for 2004 would be available in July 2005, and accordingly the Authority requested the Applicants for the new pharmacy to provide population estimate figures for 2004 for the revised claimed catchment area.
40.Other issues were sought to be addressed, including the issue of what is described as claimed catchment area and population numbers in ABS Census collection districts of 5070301, 5070309, and 5112015, particularly in relation to other nearby approved pharmacies. Correspondence was forwarded from the Authority to the Applicants for the new pharmacy requesting the details.
41.On 10 and 17 June 2005, the Applicants for the new pharmacy by their representative provided additional evidence in support of the application as requested by the Authority. Although the parties have not referred to this particular correspondence, it is clear that a letter dated 6 July 2005 was forwarded to the Authority by the proprietor of the Midland Plaza Pharmacy and Swan View Pharmacy. That letter dated 6 July 2005 (Court Book page 351) states in part the following:-
“I apologise for the delay in sending you this letter. I am the proprietor of 2 pharmacies in the 6056 postcode, namely Midland Plaza Pharmacy and Swan View Pharmacy. I was approached by the owner of a neighbouring pharmacy months ago to voice my objection against this approval. I feel that this was unfair and not in the best interests of the community.
I have been the proprietor of pharmacies in this area for well over 20 years. I have watched both Midland and the surrounding areas develop. I do not believe that the establishment of a new pharmacy in this area will impact my business in any way. The reasons for this is that, in my experience, I have found that people shop locally for their pharmaceuticals.
The area of Helena Valley has definitely grown over the years and the development is still continuing. A Commercial Shopping Centre has now been developed in Helena Valley. The neighbourhood shopping centre, apart from having a supermarket and a liquor store, also has a doctor's surgery which, in turn, needs a pharmacy.
Pharmaceuticals are essential items required for day to day living. Without a pharmacy the community’s neighbourhood shopping centre will not be complete, and it is the residents who will be inconvenienced.
...”
42.I refer to that correspondence simply because it appears to at least be correspondence from a neighbouring pharmacist, and it is otherwise common ground that the Applicants before this court were not aware of the further consideration of the application for the new pharmacy upon remittal from the Tribunal. It is not clear from the correspondence set out above from the other neighbouring pharmacy whether that correspondence was generated at the request of the Applicants for the new pharmacy or whether it was a delayed response to the earlier request for responses forwarded by the Authority referred to earlier in this judgment.
43.In any event, it is common ground that the Applicants for the new pharmacy through their representative provided a further detailed submission to the Authority and did so by letter dated 26 July 2005. The Authority held a meeting on 29 July 2005 and then deferred the application until its next meeting. The Authority further considered the application for the new pharmacy at a meeting held on 26 August 2005. It found that the requirement of paragraph 5(a) of the Rules had been met, and accordingly recommended that the application be approved.
44.From this background information it will be evident that prior to the initial adverse decision of the Authority in relation to the application for a new pharmacy, comments were invited from existing pharmacies including the pharmacy operated by the Applicants. It is further observed that on the material before the court, the Applicants did not provide any further information to the Authority after the application for the new pharmacy had been remitted by the Tribunal. So much is clear from the affidavit of the first applicant sworn 3 November 2005 where after referring to the request to comment and the provision of a comment, the deponent otherwise refers to the letter set out earlier in this judgment from the Authority dated 24 February 2005 advising the Authority had recommended not to approve the application for the new pharmacy.
45.The deponent in the affidavit sworn 3 November 2005 then states,
“8 After I received this letter I did not receive any further communication from the First Respondent until on or about 31 August 2005 when I received a letter from the First Respondent advising that a recommendation had been made by the First Respondent to approve the New Pharmacy. …”
46.The letter received on 31 August 2005 dated 29 August 2005 (Court Book page 404) provides,
“Thank you for your correspondence and comments regarding an application to relocate an existing pharmacy to premises located at Shop 3, Helena Valley Shopping Centre, Lot 425 Torquata Boulevard, Helena Valley.
The application was considered by the Australian Community Pharmacy Authority at its meeting of 26 August 2005. As the applicant satisfied all the relevant criteria, it was recommended for approval.”
47.Perhaps not surprisingly, that letter generated an almost immediate response from the Applicants' representatives expressing concern and otherwise notifying the Authority that the Applicants were aggrieved by the decision. In simple terms it may be noted from the background and the correspondence that the Applicants failed to monitor the progress of the application by the Applicants for the new pharmacy to the Tribunal and otherwise to not appear to be informed or seek information concerning what might occur to the application for the new pharmacy upon remittal.
48.It is relevant to set out that background in relation to the grounds sought to be relied upon by the Applicants in this application. In general terms however, the court notes that it is hardly surprising that in the absence of receiving any further information, after responding to a request to provide comments other than that the application had not been approved, that the Applicants had perhaps, albeit unwisely, considered the matter to be at an end.
49.It is noted that at the very least, the Applicants were put on notice that a possibility existed for the Applicants for the new pharmacy to seek review before the Tribunal or make a new application. In any event, the first applicant in his affidavit sworn 3 November 2005, after reciting the chronology of correspondence, goes on to state the following,
“9In the event that I had been notified that the application for approval for the New Pharmacy had been resubmitted to the First Respondent, I would have prepared a more detailed submission than that set out in my letter of 12 January 2005. I would have engaged a town planner to prepare a report on the catchment area of our pharmacy and New Pharmacy.
I would also have supplied the ACPA with aerial photographs of the area and other information.”
50.The deponent then refers to instructing solicitors who act for and on behalf of the Applicants and produces further information in support of the objection to the application for a new pharmacy.
51.It is also noted that the Applicants before this court have relied upon an affidavit of Paul Anthony Sheiner sworn 13 March 2006. Mr Sheiner is the solicitor for the Applicants, and annexed to his affidavit a number of items of correspondence, though significantly for the present purposes, has annexed what is described as a revised plan for the area of the Helena Valley pharmacy which has marked on it existing pharmacies and the new pharmacy, and has otherwise shaded areas consistent with the ABS CD areas claimed to be relevant.
52.The affidavit of Mr Sheiner also attaches as exhibit PAS2 the "Third Community Pharmacy Agreement between the Commonwealth of Australia and the Pharmacy Guild of Australia". Reference will be made to that agreement further in this judgment as it was the subject of submissions by the parties and is an agreement which I note has also been referred to by other courts in other proceedings dealing with similar issues.
53.The Applicants before this court provided an aerial photograph which was tendered as exhibit A2. A further exhibit marked for convenience as A1 was simply a colour version and original of the report from MGA Town Planners dated July 2005 which had been accepted by the Authority and which appears in the Court Book (pages 263-350).
The Authority Decision
54.In its decision, the Authority refers to the material it considered in making its decision and also the evidence it received which apparently included other correspondence and various reports. Under the heading "Definitive Community Need", the following appears,
“Catchment:
37. The Authority considered the applicant’s submissions that included several scaled maps identifying the catchment area claimed by the applicant. The claimed catchment area set out in the MGA Town Planner’s report of July 2005 comprised the following:
All of ABS Collection Districts 5112025, 5110314, 5110303 and 5112012;
All of the residential area of ABS Collection Districts 5110307 and 5110305;
Virtually all of ABS Collection District 5110302; and
Parts of ABS Collection Districts 5070301, 5070309 and 5112015.
38. The Authority noted the location on these maps and nearby approved pharmacies at Shop 2, 160Scott Street, Helena Valley and at 492 Kalamunda Road, High Wycombe.
39. The Authority considered the ABS Census Collection Districts claimed by the applicant, and concluded that there would be overlap with the catchments of other approved pharmacies and that no Census Collection District would be wholly attributable to the applicant’s claimed catchment area.
40. Noting the above, the Authority accepted the applicant’s claimed catchment area as set out in the MGA Town Planner’s report of July 2005.
Population:
41. The Authority considered the applicant’s submission regarding population estimates of the ABS Census Collection Districts for 2004 in the claimed catchment area.
42. Due to the road networks, population densities and existing nearby pharmacies, the Authority accepted the population estimates submitted by the applicant in relation to all but 3 of the Collection Districts (5070301, 5060309 and 5112015). The Authority considered that whilst the applicant had claimed 100% of the population of those parts of these 3 Collection Districts that all within the claimed catchment area there would be some overlap with nearby pharmacies.”
55.It is not necessary to set out other matters considered by the Authority as they do not appear to be in issue. They include the presence of a full-time medical practitioner and general shopping facilities.
56.In its conclusion, the Authority states,
“48. The Authority accepted the applicant’s claimed catchment area as set out in the MGA Town Planner’s report of July 2005. The Authority accepted the population estimates sourced from the ABS for 2004 and the proportion of claimed population for all but 3 of the Collection Districts. The Authority was satisfied that the evidence provided by the applicant indicated that the population for the catchment area would exceed 3,000 persons for most of the year.
49. The Authority found that the applicant had satisfied the requirements of paragraph 5(a) of the Rules, and accordingly decided to recommend that the applicant be approved to supply pharmaceutical benefits at or from the proposed premises.”
The Applicants' Submissions
57.The Applicants relied upon submissions filed 9 March 2006, and in addition to making oral submissions to the court further relied upon "submissions of Applicants in reply" filed in court. It is convenient to set out those submissions in order, having regard to the grounds relied upon.
Ground 1 - Error of Law - The Catchment Area
58.The Applicants submitted that in the Authority's decision, and in particular paragraphs 37 to 49 as set out above, it accepted the "claimed catchment area as set out in the MGA Town Planners' report of July 2005". It was submitted that by doing so, it appears to have defined the catchment area in terms of Australian Bureau of Statistics Collector Districts (CDs). It included within the catchment area a totality of a number of CDs including those from which only a proportion of the population might choose out of convenience to go to the proposed pharmacy.
59.It was submitted the Authority accepted there was overlapping between the catchment area and the proposed pharmacy and the existing pharmacy occupied by the Applicants. It was noted that having identified the catchment area by reference to CDs and having acknowledged that not all of the population within the CDs would use the proposed pharmacy as opposed to the existing pharmacies, the Authority accepted the report of the Third Respondent's town planner and sought to apportion the population within the catchment area.
60.It was argued that instead of having regard to the total population within the catchment area as required by the Rules, the Authority adopted the approach set out in the MGA Town Planners' report of July 2005 which was to count only a percentage of the population within the catchment area. The Authority, it was argued, accepted that only a percentage of the population within the catchment area should be counted for the purposes of determining the population of the catchment area.
61.It was submitted that this was an incorrect approach, and that the court, when considering catchment area, not defined in the Rules, should consider its meaning by deriving it from the language used and the context in which it appears.
62.At present it is not necessary to further refer in detail to the submissions concerning "catchment area", though it is relevant to note that the respondents readily and appropriately concede that by adopting the report dated July 2005 from MGA Town Planners, insofar as it related to an apportionment of population, was impermissible. It is common ground that that approach taken by the Authority in relation to population was erroneous.
63.On that issue, the question remains as to whether or not that erroneous approach affected the outcome. The Applicants submitted that the difficulty in considering whether the erroneous approach affected the outcome is that there is an interconnection between the catchment area and the population and the reasoning of the Authority. It was submitted that "the need to reduce the population was a function of the fact that the Authority had defined catchment area too broadly so as to include any area in which the person might on occasions use the proposed pharmacy. The error, it was argued, "is independent of an argument further agitated as to whether the catchment areas can overlap."
64.As I understand the submissions on behalf of the Applicants, it is argued that the Authority had wrongly held that it was possible to have overlapping catchment areas. To do so, it is argued, effectively removes any connection with need. During the course of submissions, the Applicants accepted that under the old Rules, there could be two or more pharmacies in the one catchment area (see Re Hargreaves). However, it was argued the new Rules are different, and that the decision in Re Hargreaves referring to the possibility there could be two or more pharmacies in the one catchment area was a function of the form of the old Rules then under consideration.
65.It was submitted that if a proposed pharmacy could tack on to an existing catchment area, then the "definite community need" requirement would be "useless". It was argued this was not the case under the old Rules, because it was then necessary amongst other things to show that the existing pharmacy was not adequately servicing the area.
66.Further error was claimed to arise in the Tribunal wrongly defining the catchment area by reference to CDs. By using the CDs boundaries, it was argued, the Authority must be seen as assuming that the catchment area has some existence outside of the NHA. It was argued that was not the case. It was further asserted that the Authority regarded a catchment area as including all the areas which a person might find convenient to travel to the proposed site. By accepting the approach of the town planner, the Authority defined the catchment area by reference to convenience rather than need.
67.It was argued by reference to maps produced, one of which is set out earlier in this judgment, that this criticism can be easily demonstrated by the fact that the Authority included in the catchment area homes of persons who have to drive past the existing pharmacy to get to the new pharmacy. Further criticism was made of the Authority calculating population not by reference to catchment area, but by reference to subject of intentions of the persons within the catchment area. That criticism appears to be conceded as valid to the extent that there was an attempt to adopt a proportionate approach to the material referred to earlier in this judgment.
Grounds 2 and 5 – Improper Exercise of Power – Unreasonable Exercise of Power
68.It was further sought to be argued in relation to the determination of the catchment area that in any event, the finding that Collection Districts 5110317, 5112012, 5110303 and 5110305 was unreasonable in a Wednesbury sense as it was not possible for persons in those areas to access the proposed pharmacy without first driving past the existing pharmacy.
Ground 3 - Breach of Natural Justice
69.The Applicants recited the chronology of events and correspondence set out earlier in this judgment and it referred to what is described as standard practice of applications involving new approvals in the ACPA handbook whereby it is usual to write to other pharmacies in the surrounding area offering them an opportunity to comment.
70.Arising from that chronology, it was submitted that the Applicants in this instance could properly be regarded as having a legitimate expectation that they would be invited to make further comment upon the matter being remitted by the Tribunal to the Authority, and upon the Authority further considering the application for the new pharmacy. Reference was made to the High Court decision in Kioa v West (1985) 159 CLR 550 (Kioa) and Wood v Australian Community Pharmacy Authority (2002) FCA 1592 (Wood). It is convenient to note that in Wood the following relevant paragraphs appear in the decision of Lee J,
“42 At the outset it may said that the scope of the obligation to accord procedural fairness and the nature of the steps to be taken, depend upon construction of the relevant statutory provisions which provide the Authority with Authority to act under the Act. As Mason J explained in Kioa v West (1985) 159 CLR 550 at 584-585:
"The law has now developed to a point where it may be accepted that there is a common law duty to act fairly, in the sense of according procedural fairness, in the making of administrative decisions which affect rights, interests and legitimate expectations subject only to the clear manifestation of a contrary statutory intention. It seems that as early as 1911 Lord Loreburn L.C. understood that this was the law when he spoke of the obligation to `fairly listen to both sides' being `a duty lying upon every one who decides anything': Board of Education v Rice [[1911] AC 179 at 182]. But the duty does not attach to every decision of an administrative character. Many such decisions do not affect the rights, interests and expectations of the individual citizen in a direct and immediate way. Thus a decision to impose a rate or a decision to impose a general charge for services rendered to ratepayers, each of which indirectly affects the rights, interests or expectations of citizens generally does not attract this duty to act fairly. This is because the act or decision which attracts the duty is an act or decision:
`...which directly affects the person (or corporation) individually and not simply as a member of the public or a class of the public. An executive or administrative decision of the latter kind is truly a `policy' or `political' decision and is not subject to judicial review.'
(Salemi [v MacKellar [No. 2] (1977) 137 CLR 396 per Jacobs J at 452])
Where the decision in question is one for which provision is made by statute, the application and content of the doctrine of natural justice or the duty to act fairly depends to a large extent on the construction of the statute. In Mobil Oil Australia Pty. Ltd v Federal Commissioner of Taxation [(1963) 113 CLR 475 at 503-504] Kitto J. pointed out that the obligation to give a fair opportunity to parties in controversy to correct or contradict statements prejudicial to their view depends on `the particular statutory framework'. What is appropriate in terms of natural justice depends on the circumstances of the case and they will include, inter alia, the nature of the inquiry, the subject-matter, and the Rules under which the decision-maker is acting: Reg. v. Commonwealth Conciliation and Arbitration Commission; Ex parte Angliss Group [(1969) 122 CLR 546 at 552-553]; National Companies and Securities Commission v. News Corporation Ltd [(1984) 156 CLR 296 at 311, 319-321].
In this respect the expression `procedural fairness' more aptly conveys the notion of a flexible obligation to adopt fair procedures which are appropriate and adapted to the circumstances of the particular case. The statutory power must be exercised fairly, i.e., in accordance with procedures that are fair to the individual considered in the light of the statutory requirements, the interests of the individual and the interests and purposes, whether public or private, which the statute seeks to advance or protect or permits to be taken into account as legitimate considerations: cf. Salemi [No 2], per Jacobs J [at 451].
When the doctrine of natural justice or the duty to act fairly in its application to administrative decision-making is so understood, the need for a strong manifestation of contrary statutory intention in order for it to be excluded becomes apparent. The critical question in most cases is not whether the principles of natural justice apply. It is: what does the duty to act fairly require in the circumstances of the particular case? It will be convenient to consider at the outset whether the statute displaces the duty when the statute contains a specific provision to that effect, for then it will be pointless to inquire what the duty requires in the circumstances of the case, unless there are circumstances not contemplated by the statutory provision that may give rise to a legitimate expectation. However, in general, it will be a matter of determining what the duty to act fairly requires in the way of procedural fairness in the circumstances of the case. A resolution of that question calls for an examination of the statutory provisions and the interests which I have already mentioned."
43 There is nothing in the provisions of the Act or the Rules which suggest that it was the intention of Parliament to permit the Authority to act in a manner that was procedurally unfair. The provisions of r 6A expressly direct the Authority to examine the provision of pharmaceutical benefits by a pharmacist by having regard to the criteria specified in the Rule, and determining whether the pharmacist has met obligations under the regulations and whether, as a result, the provision of pharmaceutical benefits by that pharmacist is "substantially inadequate". A fair procedure for a determination by the Authority in those circumstances required the Authority to put to a pharmacist whose professional conduct is thereby impugned, any material presented by an applicant that reflected adversely on the adequacy of the provision of pharmaceutical benefits by the existing pharmacist and offer the existing pharmacist the opportunity to comment thereon. The content of the legislation clearly implied such an obligation. (See: Pharmacy Restructuring Authority v Martin at 597; Cenrin Pty Ltd v Lamb (1993) 42 FCR 167 per Spender J at 178.)”
71.It is argued on behalf of the Applicants that they had an entitlement to be told the substance of the matters going to identification of the catchment area and be given an opportunity to respond. That obligation, it was argued, existed notwithstanding any privacy considerations including any found in s.135A of the NHA. Reference was made to the High Court decision in Applicant VEAL of 2002 v Minister for Immigration and Multicultural and Indigenous Affairs (2005) 222 ALR 411 (VEAL). In particular, reference was made to the court's decision in paragraphs 22 and 23 as follows:-
“[22] The fact that the author of the letter asked the department to keep it secret did not mean that equitable principles about confidential information were to be engaged in deciding what course the Tribunal took. Rather, the nature and extent of the Tribunal’s obligation to disclose the information were regulated by the Act and the obligation to accord the appellant procedural fairness.
[23] In this case, the particular content of the obligation to accord procedural fairness was to be identified having regard not only to the particular provisions of the Act that regulated the Tribunal’s work but also to the scope and objects of the Act as a whole. In that latter regard, it is necessary to keep two propositions at the forefront of consideration. First, the Act required that those entitled to a particular visa be granted the visa they sought, and that those not entitled be refused. Secondly, the Act committed the decision to grant or refuse a visa to the executive government and the Tribunal was likewise exercising executive power, not judicial power.”
72.It is appropriate to set out paragraphs 27 and 29 in VEAL where the Court states,
“[27] The information which was contained in the letter was relevant to that inquiry and it could not be ignored by the Tribunal. The Tribunal was able to put the information aside from consideration in its reasons only because it reached the conclusion, on other bases, that the appellant was not entitled to a visa. But that step, of putting the information in the letter aside from consideration, could not be taken before reaching the conclusion that the application should be refused. It follows that to conduct the review with procedural fairness, the appellant had at least to know the substance of what was said against him in the letter. Only then could he attempt to answer the suggestions made by the author of the letter that the appellant had reasons other than Convention reasons to absent himself from Eritrea and that he did not have a well-founded fear of persecution for a Convention reason.
…
[29] So much may readily be accepted. But it by no means follows that the Tribunal was bound to give the appellant a copy of the letter, or tell him who had sent it, or even tell him that the information had been sent in written form. To give the appellant a copy of the letter or tell him who wrote it would give no significance to the public interest in the proper administration of the Act which, as pointed out earlier, required that those entitled to a visa be granted one and those not entitled be refused. It is in aid of that important public interest that, so far as possible, there should be no impediment to the giving of information to authorities about claims that are made for visas. That public interest, and the need to accord procedural fairness to the appellant, could be accommodated. They were to be accommodated, in this case, by the Tribunal telling the appellant what was the substance of the allegations made in the letter and asking him to respond to those allegations. How the allegations had been given to the Tribunal was not important. No doubt the appellant’s response to the allegations would then have had to be considered by the Tribunal in light of the fact that the credibility of the person who made the allegations could not be tested. And that may well leave the Tribunal in a position where it could not decide whether the allegations made had substance. But the procedure outlined would be fair to the appellant and it would be a procedure which accommodated what Brennan J described in Kioa19 as the “problem of confidentiality”. Although it may be accepted that the Tribunal sought to act fairly, the procedure it in fact adopted was not fair.”
73.The Applicants submitted that a decision relied upon by the respondents, namely Pharmacy Restructuring Authority v Martin (1994) 53 FCR 589 (Martin) can be distinguished from the present application. That case, it was argued, held that in considering an application under s.90 of the NHA, there was no duty to notify and hear everybody, as economic interests may be damaged by an approval. It was submitted the interests of the Applicants in the present case are different to those considered in the Martin decision.
74.It was submitted that in another decision, Branson J in the Pharmacy Guild of Australia and Ors v the Australian Community Pharmacy Authority and Ors (1996) 46 ALD 310 (the Pharmacy Guild case) had left open a possibility that a representation by policy could give rise to a legitimate expectation. It was argued that it was significant that in Martin the only issue was the distance between the pharmacies.
75.In the present case it was submitted the issue for the Authority was qualitative and concerned identification of the catchment area. Fairness dictated that the Applicants should at least have been told that the application was again the subject of consideration by the Authority. It was submitted the obligation to act fairly required the Applicants to be told precisely the basis upon which the catchment area was to be defined, and to be given an opportunity to comment.
76.It is perhaps useful to note that in the Pharmacy Guild case of Branson J, the second to fifth Applicants were approved pharmacists in respect of premises alleged to be less than two kilometres measured door to door by the shortest lawful access route from a proposed new pharmacy, and each gave evidence they had suffered commercial harm by reason of the decision sought to be reviewed by Branson J.
77.In her decision, Branson J in the Pharmacy Guild case under the heading "Standing" made reference to an often-cited passage from a decision of Ellicot J in Tooheys Ltd v Minister for Business and Consumer Affairs (1981) 54 FLR 421 at 437-438 where His Honour in that case stated the following:-
"The words 'a person who is aggrieved' should not in my view be given a narrow construction. They should not, therefore, be confined to persons who can establish that they have a legal interest at stake in the making of the decision. It is unnecessary and undesirable to discuss the full import of the phrase. I am satisfied from the broad nature of the directions which are subject to review and from the fact that the procedures are clearly intended in part to be a substitution for the more complex prerogative writ procedures that a narrow meaning was not intended. This does not mean that any member of the public can seek an order of review. I am satisfied, however, that it at least covers a person who can show a grievance which will be suffered as a result of the decision complained of beyond that which he or she has as an ordinary member of the public. In many cases that grievance will be shown because the decision directly affects his or her existing or future legal rights. In some cases, however, the effect may be less direct. It may affect him or her in the conduct of a business or may, as I think is the case here, affect his or her rights against third parties ..."
78.After referring to that extract from the decision of Ellicot J, Branson J then relevantly states the following:-
“It seems to me that the second to fifth Applicants have, by reason of par6(c) of the determination, an interest which rises above that of an ordinary member of the public in the development and maintenance of "an effective, efficient and well distributed community pharmacy service" in that small portion of Australia in the near vicinity of the Kareela premises. Their interest is, in my view, an interest which is relevant to the process which the Act establishes and to the decision here challenged, and it is not in conflict with the interests which the Act promotes …”
79.In the same decision under the heading "Denial of Natural Justice", Branson J states the following:-
“Since the decision of the Full Court in Pharmacy Restructuring Authority v Martin, the agreement has been executed. As is mentioned above, clause 6.5 of the agreement records an agreement between the Guild and the Minister that the Authority "be entitled to seek and note information from people likely to be directly affected by a recommendation, taking into account the secrecy provision of the Act and the Privacy Guidelines". This agreement as to the entitlement of the Authority to note information from sources other than the applicant does not, in my view, give rise to an obligation in the Authority to give a hearing to any person. Nor, in my view, does the fact that the Authority circulated a newsletter on or about 14 July 1995, which indicated that in respect of applications for relocation the Authority would write, without identifying the applicant, to all other pharmacists in the area of the application identifying the proposed site of the relocation. The Authority had determined on 9 June 1995 to recommend approval of the Third Respondents' application subject to clarification of the issue of distance. It appears that the process of clarification undertaken by Mr Candy was completed before 14 July 1995. The newsletter cannot, in my view, have given rise to any legitimate expectation of consultation in respect of consideration by the Authority of the Third Respondents' application.
I do not consider that the circumstances of this case can be satisfactorily distinguished from those considered by the Full Court in Pharmacy Restructuring Authority v Martin so far as the issue of procedural fairness is concerned.”
80.It is perhaps convenient to note that Her Honour Branson J in referring to the object of the system to be the maintenance of effective, efficient and well-distributed community pharmacy service appears to refer to the principles set out in the Third Community Pharmacy Agreement or, as I understand it, any earlier agreement. It is noted the principles in the Third Agreement include the following:-
a)providing consumers with reasonable equality of access to quality pharmacy services in their local community;
b)ensuring that consumers receive quality patient care and outcomes;
c)expanding community pharmacy’s professional roles;
d)providing a table and predictable environment for community pharmacy;
e)extending the cooperative approach evident in the first two Agreements between the Guild and the Commonwealth; and
f)maximising the value to the taxpayer by encouraging an effective and efficient community pharmacy network.
81.The third agreement recites the matters now picked up in the Rules when considering definite community need, and otherwise relevantly includes the following in clause 36.3:-
“36.3. Comments from Surrounding Approved Pharmacists
The parties agree to develop agreed procedures, within 3 months of the commencement of the Agreement, for the ACPA to consult with those approved pharmacists in the area surrounding the proposed premises who, in the Authority’s opinion, may be able to provide information relevant to the application of the particular Rule in question.”
82.In the present case, the Applicants also noted, as indicated earlier, the standard practice of the Authority involving new applications is to write to other pharmacists. That standard practice appears to be derived from material annexed to the affidavit of Mr Sheiner and is not in dispute.
83.Reference to the third agreement and the standard practice was relied upon by the Applicants in support of the contention that in this instance the Applicants had a legitimate expectation that they would be notified that the application for the new pharmacy was to be reconsidered by the Authority.
84.In the Applicants' reply referred to earlier in this judgment, it should also be noted that a number of submissions were made seeking to distinguish the Martin decision from the present case. It is useful to deal with those submissions during the course of the reasoning in this judgment rather than set them out in detail in this part of the judgment when considering the Applicants' submissions.
85.It is significant to note that in addition to alleging legitimate expectation and seeking to distinguish this case from the Martin decision, it was further submitted that in any event, there is a common law duty to accord procedural fairness in the making of administrative decisions affecting the rights, interests and legitimate expectations. In this case, the interests of the Applicants it was argued could properly be regarded as direct and immediate.
86.The past practice of notifications it was argued puts that issue beyond doubt. It was clearly established that the conduct of a decision‑maker in past practice may be relevant in relation to the existence and content of the obligation to afford procedural fairness. Reference was made to a number of authorities including AG (NSW) v Quinn (1990) 170 CLR 1 at 20, Annetts v McGann (1990) 170 CLR 596 at 599, Haoucher v Minister for Immigration (1990) 169 CLR 648 at 659-660, 681, Minister for Immigration v Teoh (1995) 183 CLR 273 at 312, Re Minister for Immigration & Multicultural & Indigenous Affairs Ex parte Lam (2003) 214 CLR 1 at 12 [33:37] (Lam).
87.It was submitted that either the conduct of the Authority in the implied assurance given to the Applicants vested them with a sufficient interest that is protected by procedural fairness, and by reason of a policy of past practice, the Applicants had a legitimate expectation they would be given the right to be heard in respect of the application for approval.
88.The Applicants further sought to rely upon a decision of Merkel J in Corio Bay and District Private Hospital NH Pty Ltd v Minister for Family Services and Ors (1998) 87 FCR 37 (Corio Bay) which, it should be noted, was an authority referred to and relied upon by the respondents. The Applicants in referring to that decision argued that in that case, the court acknowledged that conduct can affect the obligation to accord a hearing.
89.It is convenient to set out in this part of the judgment relevant extracts from the decision of Merkel J in Corio Bay at pp.42-45 as follows:-
“Did Corio Bay have a Right to be Heard?
As was pointed out in Annetts v McCann (1990) 170 CLR 596 at 598 per Mason CJ, Deane J and McHugh J:
"It can now be taken as settled that, when a statute confers power upon a public official to destroy, defeat or prejudice a person's rights, interest or legitimate expectations, the Rules of natural justice regulate the exercise of that power unless they are excluded by plain words of necessary intendment:..."
The power exercised by the delegate to approve the transfer of places did not destroy, defeat or prejudice any "right" or "interest" of a proprietary nature of Corio Bay. Nor could it be said that it destroyed, defeated or prejudiced any legitimate expectation of Corio Bay, as there was nothing in the statutory scheme or in the conduct of any of the parties to the proceeding that engendered a legitimate expectation on the part of Corio Bay that it would have some entitlement to be heard prior to a decision being made to approve the transfer of places. Any entitlement to be heard in the present case must be founded upon the decision destroying, defeating or prejudicing a financial interest of Corio Bay.
The application and the content of the Rules of natural justice in each case depend upon the particular statutory framework applicable to the case: see Kioa v West (1985) 159 CLR 550 at 584-585 per Mason J. The relevance of that framework was described by Brennan J in Kioa at 619 in the following terms:
"The presumption that the principles of natural justice condition the exercise of a statutory power may apply to any statutory power which is apt to affect any interest possessed by an individual whether or not the interest amounts to a legal right or is a proprietary or financial interest or relates to reputation. It is not the kind of individual interest but the manner in which it is apt to be affected that is important in determining whether the presumption is attracted.
If a power is apt to affect the interests of an individual in a way that is substantially different from the way in which it is apt to affect the interests of the public at large, the repository of the power will ordinarily be bound or entitled to have regard to the interests of the individual before he exercises the power. No doubt the matter to which the repository is bound or is entitled to have regard depend on the terms of the particular statute and, if there be no positive indications in its text, the subject-matter, scope and purpose of the statute must be looked at to determine whether the repository is bound or is entitled to have regard to individual interests: Water Conservation and Irriation Commission (N.S.W.) v Browning (1). When the repository is bound or is entitled to have regard to the interest of an individual, it may be presumed that observance of the principles of natural justice conditions the exercise of the power, for the legislature can be presumed to intend that an individual whose interests are to be regarded should be heard before the power is exercised. Therefore the presumption applies to any statutory power the exercise of which is apt to affect the interests of an individual alone or apt to affect his interests in a manner which is substantially different from the manner in which its exercise is apt to affect the interests of the public. Of course, the presumption may be displaced by the text of the statute, the nature of the power and the administrative framework created by the statute within which the power is to be exercised." (Footnotes deleted)
It is important to distinguish the circumstances in which the duty to accord natural justice arises and those relevant to determining whether there is an intention of the part of the legislature to exclude the Rules of natural justice. As was pointed out in the joint judgment of Mason CJ, Deane J and McHugh J in Annetts at 598:
"...an intention on the part of the legislature to exclude the Rules of natural justice was not to be assumed nor spelled out from `indirect references, uncertain inferences or equivocal considerations'."
In the present case it was common ground between the parties that there was nothing in the statutory scheme that displayed an intention on the part of the legislature to exclude the Rules of natural justice in respect of a decision to approve a transfer of places under the Act. Accordingly, the critical question arising is whether, under the statutory framework, the financial interest of Corio Bay is sufficient to attract the Rules of natural justice to that decision in the present case. Where a decision affects a person's financial interest in a "direct and immediate way" ( see Mason J in Kioa at 584 per Mason J) then it is likely to attract the Rules of natural justice. However, where the person's financial interest is not affected directly by the decision in question, the application of the Rules is more problematic.”
…
Notwithstanding the width of the dicta of Lord Denning in Liverpool Corporation, where a financial interest is indirect or consequential, a right to be heard is unlikely: see Pharmacy Restructuring Authority v Martin (1994) 53 FCR 589 at 597. That case concerned a recommendation to the Secretary of the Department of Community Services and Health to approve the relocation of a pharmacist for the purpose of supplying pharmaceutical benefits at or from particular premises under the National Health Act 1953 (Cth). Under the statutory scheme, a recommendation for approval was required to be made where the relocated premises was no more than five hundred metres by normal access routes from other premises in respect of which the pharmacist was already approved under the Act. At first instance, a competitor, being a rival pharmacist, obtained an order setting aside the decision to recommend the approval, on the ground that it had not been afforded an opportunity to be heard before the recommendation was made. On appeal, the Full Court (Wilcox, Foster and Whitlam JJ), in allowing the appeal, concluded that there was no general principle that obliged a statutory Authority charged with the duty of considering an application, to comply with the Rules of natural justice by notifying and hearing everybody whose economic interest could be damaged by the approval.”
90.In Corio Bay Merkel J made comments concerning the extent to which reliance can be placed upon what are described as the "standing" cases when dealing with issues of natural justice. In particular I note the following passages from His Honour's decision at pp.46-47,
“The Commonwealth respondents in this matter relied upon Alphapharm. However that case, which was based on a statutory scheme which is quite different to the Act the subject of the present case, related to standing to bring an administrative review proceeding to challenge a decision, rather than the circumstances in which a person is entitled to be heard prior to a decision being made. There are several difficulties with reliance upon standing cases. If a person has standing in respect of reviewing a decision after it is made, it does not follow that the person has an entitlement to be heard in respect of the decision before it was made. Further, standing decisions may depend upon a consideration of whether the regulatory scheme gives an exhaustive measure of judicial review at the instance of competitors or other parties, rather than consideration of the manner in which the interests of a particular person are affected by the decision: see Bateman's Bay Local Aboriginal Land Council v The Community Benefit Fund Pty Ltd (1998) HCA 49 (6 August 1998) at para 48 per Gaudron, Gummow and Kirby JJ cf; Byron Environment Centre Incorporation v The Arakwal People & Ors (1997) 78 FCR 1 at pp 5, 32-36.
Whilst I prefer to approach the right to be heard by reference to the principles developed in the natural justice cases, the standing cases, particularly in respect of commercial interests, may nevertheless be of some assistance. For example, if a person has no standing to challenge a decision, it would be difficult to conceive of circumstances in which that person would be entitled to be heard in respect of the making of the decision. The difficulties faced by a holder of a mere private or consequential commercial interest in establishing standing to challenge a decision, were considered in Big Country Developments Pty Ltd v Australian Community Pharmacy Authority (1996) 40 ALD 32. In Big Country, the facts of which are analogous to those in the present case, the applicant was the owner of premises in respect of which its tenant carried on the business of an approved pharmacy under s 90 of the National Health Act (Cth). Towards the conclusion of the lease, the tenant applied successfully to the Secretary of the Department of Human Services and Health to relocate the pharmacy business from the applicant's premises to another shopping centre about 1km away. The effect of the decision was to prevent the applicant from re-leasing its property as a pharmacy business, since the Australian Community Pharmacy Authority was only authorised to approve premises which were more than 2km apart from the nearest approved pharmacy. The applicant landlord asserted that it had standing as a person "aggrieved", as its commercial interest stood to be adversely affected by the decision.
In considering the types of interests which attract standing, Lindgren J (at 92) stated that:
"The `ripples of affection' in financial or commercial terms, arising from administrative decisions extend far and wide, and it is unthinkable that the Parliament intended by ss5(1) and 3(4) of the AD(JR)Act to accord standing to every person who has a financial or commercial interest which is adversely affected by a decision, no matter how `remote' that interest may be from the decision-making activity and no matter how minor the affection..."
His Honour held that the landlord's private commercial interest in the outcome of a decision relocating its tenants business to other premises, was not sufficient to render it a person aggrieved for the purposes of the ADJR Act. The decision in Big Country suggests that Corio Bay would not have standing to challenge a decision to transfer places allocated under the Act away from the premises, let alone a right to be heard in relation that decision.
Applying the above principles in the present case, it is my view that Corio Bay had no entitlement to be heard prior to a decision being made to approve the transfer of the places in respect of the Geelong premises to the Wittingham premises. The "interest" of Corio Bay was, at best, an economic interest which was only indirectly and consequentially affected by the decision under challenge. There are a number of reasons for arriving at that conclusion: …”
91.The Applicants argued that the analogy between standing and natural justice cases assists the Applicants in this instance, given the context, that standing was clearly contemplated by the Third Pharmacy Agreement. That acknowledgment provides assistance in determining whether or not the Applicants had a legitimate expectation for the purposes of supporting the ground relying upon denial of natural justice.
92.It was submitted that once it is acknowledged that fairness required the Authority to accord the Applicants procedural fairness, then at the very least, the Applicants were entitled to be told the application for approval was again under consideration. It was asserted, however, that in the present case, the content of the obligation went further and that fairness required that the Applicants have a "reasonable opportunity of presenting their case" (see Russell v Duke of Norfolk (1949) 1 All ER 190 at 188, Keoh at 659 per Gibbs CJ). As part of that entitlement, it was argued adverse information that is credible, relevant and significant to the decision under review should be disclosed. In this instance, that included the MGA July 2005 report.
93.The respondents, it was argued, cannot rely upon s.135A of the NHA to avoid the obligations to act fairly, and reference was further made to arguments relying upon the decision of VEAL referred to earlier in this decision.
The Respondents' Submissions
Ground 1 - Error of Law –Catchment Area
94.Submissions were made on behalf of the First and Second Respondents in an outline of submissions filed 13 March 2006 together with further oral submissions at the hearing. The submission on behalf of the First and Second Respondents made reference to the grounds sought to be relied upon by the Applicants, and in dealing with ground 1 it was submitted that the Applicants' arguments in support of that ground were based upon what was described as a misapprehension as to the requirements of Rule 5(a)(ii) of the Rules in conjunction with the definition of "definite community need" in Rule 2.
95.It was noted in the Respondents' submissions that the Applicants' claim that in order to properly apply the definition of ‘community need’, the Authority was required to determine in the first instance the catchment area serviced or proposed to be serviced by the proposed pharmacy was correct. The Respondents also agreed with the Applicants' submission that once the Authority has determined the catchment area, it was required to ascertain whether or not that area has a population of 3000 or more people for most of the year, at least one full-time medical practitioner and general shopping facilities.
96.It was submitted by the Respondents that it is not in dispute that the catchment area of the new pharmacy had at least one full-time medical practitioner and general shopping facilities and thereby met the requirements of paragraphs (b) and (c) of the definition of "definite community need". It was submitted that when considering whether it was satisfied that there is a definite need for community pharmaceutical services in the catchment area in which the new pharmacy is situated, the Authority must be satisfied of the matters set out in paragraphs (a), (b) and (c) of the definition of "definite community need" referred to earlier in this judgment.
97.It was acknowledged that the expression "catchment area" is not defined in the Rules. However, the Respondents challenged the Applicants' assertion that it was not possible for two pharmacies to have overlapping catchment areas and further challenged the assertion that the Authority had wrongly held that it was possible to have overlapping catchment areas. It was submitted that those assertions by the Applicants were wrong. It was submitted there is no basis for what amounts to an assertion that each pharmacy must have its own exclusive catchment area and that the catchment area of one pharmacy cannot overlap at all with the catchment area of any other pharmacy.
98.During the course of submissions, as indicated earlier in this judgment, all parties relied upon, or at least made reference to, the decision of the Administrative Appeals Tribunal in Re Hargreaves. It was submitted on behalf of the Respondents that the meaning of "catchment area" and the proper method of determining the catchment area of particular pharmacy or proposed pharmacy were properly considered in that decision of the Tribunal in Re Hargreaves. It was argued that the decision of the Tribunal in that case was equally applicable to the determination of the catchment area serviced or proposed to be serviced by a pharmacy in the current definition of "definite community need".
125.It was argued that the Authority's approach whereby it accepted overlapping catchment areas was not unreasonable by reason of its accepting a catchment area for the Third Respondent's new pharmacy that overlapped with the catchment areas of the other pharmacies. Likewise, the calculation of the population for the reasons advanced in earlier submissions could not be regarded as unreasonable.
126.The additional criticism of the Authority's decision by the Applicants concerning the apportionment of the population does not, according to the Respondents' submissions, give rise to a conclusion that the decision was unreasonable or indeed that it was an arbitrary or capricious decision. The use of terms such as "arbitrary" and "capricious" is merely an emphatic way of the Applicants submitting that they regard the reasoning as wrong (see Minister for Immigration and Multicultural Affairs v Eshetu (1999) 197 CLR 611 per Gleeson CJ and McHugh J at [40] - [41]).
127.In any event, it was submitted that the apportionment of the residential population as referred to in the earlier submissions and the acceptance of that apportionment did not have any effect on the Authority's decision. If the apportionment had not been made, the population of the catchment area of the Third Respondent's new pharmacy of 5743 would have been considerably greater than the figure actually claimed after apportionment of 3533, and accordingly the apportionment could not be the basis upon finding that the decision was unreasonable in the Wednesbury sense. It was argued there is no possibility that in the absence of such apportionment, the Authority would have made a different decision.
128.The Third Respondent appeared to support the submissions of the First and Second Respondents set out in relation to these grounds.
Ground 3 - Breach of Rules of Natural Justice
129.It was submitted there is no common law duty to accord procedural fairness in the making of administrative decisions which affect rights, interests and legitimate expectations subject only to the clear manifestation of a contrary statutory intention. Reference was made to the decision of the High Court in Kioa per Mason J at 584.
130.It was submitted that the decision of the Authority to recommend approval of the Third Respondent's new pharmacy was not a decision which affected the Applicants' "rights, interests or legitimate expectations". It was argued that the decision of the court in Martin cannot be distinguished as contended by the Applicants in their submissions. The decision of the Full Court in that case remains an Authority for the proposition that the provision of the NHA and the Rules do not give rise to an obligation to accord procedural fairness to those such as the Applicants whose economic interests may be damaged by an approval. Reference was made to an extract from the decision in Martin which appears at page 597 lines B - F as follows:
“Procedural fairness
Counsel for the first respondents argued that procedural fairness required the Authority to afford their clients a right of hearing before deciding to recommend approval of the application. They cited no authority in support of that submission. Alphapharm Pty Ltd v SmithKline Beecham (Australia) Pty Ltd (1994) 49FCR 250 suggested the contrary.
There are cases where a statutory authority, charged with the duty of considering an application to use premises for a particular purpose, is expressly obliged to publicise the receipt of the application and to consider objections. Liquor legislation is a well known example. There are cases where such an obligation is implied by the scope and purpose of the legislation. But we do not know of any general principle to the effect that a statutory authority charged with the duty of considering an application is obliged by the principles of procedural fairness to notify and hear everybody whose economic interests may be damaged by an approval. To promulgate a general rule imposing such an obligation would be to visit upon statutory decision-makers a potentially massive task of indeterminate reference. In the present case, nothing is to be implied from the scope and purpose of the Act. The relevant provisions are not concerned with minimising competition in the pharmaceutical industry but with reducing the Commonwealth’s financial burden in providing pharmaceutical benefits while maintaining an acceptable level of community service. In the absence of authority, we are not prepared to hold that, if it had a discretion about its decision, the Authority had any obligation to notify or hear pharmacists, non-parties to the application for approval, merely because an approval might commercially damage them.
However, even if we took a different view about that matter, in this case the Authority has no discretion. The guidelines govern its recommendations to the Secretary. And subpar (d) provides that ‘approval … shall be recommended’ where the new premises are located not more than 500 metres ‘by normal access routes’, from the old. If, as we have held, the term ‘by normal access routes’ means ‘by at least one normal access route’, it is clear that the premises at 20 John Street are located not more than 500 metres, by a normal access route, from the old. The Authority is bound to recommend approval. There would be no purpose in the Authority affording the first respondents a hearing.”
131.Reliance by the Respondents was also placed upon the decision in Corio Bay referred to earlier in this judgment, and in particular the passage from the Court's judgment in that case which appears at page 44 line G to page 46 line A, set out earlier in this judgment.
132.It was further argued that reliance in the submissions by the Applicants on the Federal Court in McWilliam v Civil Aviation Authority [2004] FCA 1701 should be resisted, as that case is distinguishable from the present application. In that case the Applicants carried on a parachuting business whereby persons parachute onto land comprising the Barwon Heads aerodrome. They sought to review the decision to issue two instruments, the practical effect of which was to curtail all parachute jumps at the Barwon Heads aerodrome. Those two decisions can be seen to have affected the Applicants' economic interests in a "direct and immediate way" (see Kioa per Mason J at p.584 and CorioBay at pp.43 and 44.
133.In contrast, it was submitted, the decision of the Authority and the Second Respondent in the present case had the effect that the Applicants' economic interests might be damaged but did not prevent them from carrying on their business. The financial interests of the Applicants which were affected by the decision sought to be challenged in this application should be regarded as "indirect or consequential".
134.The respondent submitted in the alternative that if the Applicants had any legitimate expectation, it was only that they would be notified by the First Respondent of any new approved application which was within a reasonable proximity of their pharmacy and the address of the proposed premises. In this case, any such legitimate expectation had been met. It was argued there is no basis for the Applicants' submission that they should have been further told that the application was to be reconsidered following remittal by the Tribunal. No legitimate expectation arises from those circumstances requiring notification of the decision by consent of the Tribunal.
135.It was submitted that to the contrary, the First Respondent's letter to the Applicants dated 24 February 2005 notifying the Applicants of the Authority's decision not to recommend approval of the Third Respondent's proposed pharmacy, specifically pointed out the right of appeal to the Tribunal and did not say that the Authority would notify the Applicants of any such application to the Tribunal for review of its decision, and nor did it state it would notify the Applicants in the event of such an application. The Tribunal decided that the decision must be reconsidered by the Authority.
136.Further, it was submitted that in any event, even if the Authority notified the Applicants that the Third Respondent made application to the Tribunal and the Tribunal had remitted the matter back for reconsideration, the Authority would not then have provided the Applicants with any more information than had already been provided in a letter dated 20 December 2004. Accordingly, it was argued that any failure by the Authority to advise the Applicants of the application to the Tribunal and the Tribunal's decision could not have resulted in the Applicants making any different submissions to those which had been made in the letter of 12 January 2005 referred to earlier in this decision.
137.It was submitted that in this instance that the Applicants had not claimed that if they had been notified by the First Respondent that the Authority was going to reconsider its decision, they would have put any further information before the Authority additional to the information already provided in the correspondence dated 12 January 2005.
138.Accordingly, it was submitted, the failure of the Authority to advise the Applicants of the Third Respondent's application to the Tribunal and the decision of the Tribunal to remit the matter to the Authority had not resulted in any practical injustice or lost opportunity to make further representations to the decision-maker, depriving the Applicants of a possibility of a successful outcome. Reference was made to Lam per Gleeson CJ at [36] - [38] and McHugh and Gummow JJ at [57] - [59] and Hayne J at [115].
139.It was further submitted that the Applicants' claim that the obligation to act fairly required them to be told precisely of the basis upon which the catchment area was to be defined and to be given an opportunity to comment is without foundation. There is no basis for that obligation. It was submitted the NHA and the Rules do not give rise to any such obligation. Again reference was made to the decision of the court in Martin.
140.No statement or course of action on the part of the Authority has been identified, according to the Respondents' submissions, which could give rise to a legitimate expectation that they would be notified of the basis upon which the catchment area of the Third Respondent's new pharmacy was to be defined and would be given opportunity to comment upon that catchment area. It was specifically submitted that the Authority's letter to the Applicants dated 20 December 2004 precludes any such legitimate expectation.
141.It was submitted that the reliance by the Applicants on the decision of the court in VEAL does not provide support for any such legitimate expectation. That finding by the High Court of a breach of procedural fairness by the Refugee Review Tribunal arose in the context of a different statutory regime and, it was submitted, a totally different factual circumstance, and no issue of legitimate expectation was involved.
142.The Third Respondent whilst again supporting the submissions by the First and Second Respondents set out above in relation to the issue of breach of natural justice made specific reference to the decision of Branson J in the Pharmacy Guild case set out earlier in this judgment at paragraph 79.
Reasoning
Ground 1
143.In my view the submissions made for and on behalf of the Respondents in relation to this ground are correct. The reasoning of the learned Deputy President in Re Hargreaves applies equally to the decision in the present case.
144.It is clear in my view that there is no substance in the Applicants’ submissions concerning the manner in which the Authority dealt with the catchment area save and except that it incorrectly apportioned the population in the manner described. However, that apportionment has not led to any practical injustice and I accept the submissions made for and on behalf of the Respondents that in any event any error which occurred by an apportionment was an error in favour of the Applicants and did not ultimately provide any basis upon which the decision should be set aside.
145.The meaning of ‘catchment area’ and the method of determining the catchment area of a particular pharmacy as indicated has been appropriately set out by the Tribunal in Re Hargreaves. It is clear and logically appropriate as indicated by the learned Deputy President in Re Hargreaves that there will be circumstances where it is quite possible that two or more pharmacies may have the same catchment area.
146.I cannot see any error in the manner in which the Authority dealt with the meaning of ‘catchment area’. The expression ‘a catchment area serviced or proposed to be serviced by a pharmacy’ does not support any proposition that people living in a particular area may only flow to one pharmacy but not to two or more pharmacies. Hence, the concept of an overlap is clearly contemplated on a proper reading and understanding of catchment area.
147.I accept the Respondent’s submissions that if the Applicants contentions were correct then it would be difficult to contemplate any new pharmacy being approved as it would appear inevitable that the catchment area of a proposed pharmacy would overlap with the catchment area of an existing pharmacy from which the population in the proposed catchment area presently obtain their pharmaceutical needs.
148.The current definition of ‘definite community need’ considerably simplifies the matters to be taken into account from the old definition set out earlier in this judgment. In addition, the introduction of the phrase ‘serviced or proposed to be serviced by a pharmacy’ adds clarity to the definition of ‘definite community need’. As indicated earlier in this judgment, it is my view that the new Rules appear to relax significantly the requirements for approval to supply pharmaceutical benefits for new pharmacies. The Authority’s interpretation of the definition does not contain any error and otherwise facilitates what appears to be the relaxation of the Rule and advances as submitted by the Third Respondent, the purpose of the scheme.
149.I otherwise accept that once the matters that are required to be established in paragraphs (a), (b) and (c) of the definition of ‘definite community need’ are met then it can be concluded that there is a ‘definite community need’ within the meaning of the Rules. There is no requirement for a further investigation of a ‘need’ in relation to the catchment area and nor indeed is it necessary for the Authority to explore whether people in the proposed catchment area are already adequately serviced by existing pharmacies. Removal of paragraph (d) from the old definition of ‘definite community need’ strengthens my conclusion in relation to this matter.
150.Apart from the issue concerning apportionment of the population, I am otherwise satisfied that the Authority appropriately dealt with the ABS Collection Districts when determining the catchment area of the proposed pharmacy and did so in a manner consistent with the authority, which I accept is applicable, of Deputy President Forgie in Re Hargreaves.
151.The analysis undertaken by the town planners upon which the Authority relied is in my view consistent with the analysis undertaken by the Tribunal in Re Hargreaves and is free of error. The approach taken by the town planners adopted by the Authority clearly identified the catchment area of the proposed pharmacy in a manner consistent with the approach suggested by the Tribunal in Re Hargreaves.
152.I otherwise accept that once the catchment area has been defined the only matter for determination under paragraph (a) of the definition of ‘definite community need’ is whether or not that catchment area has a population of not less than 3,000 for most of the year. I accept the submissions made for the Respondent that the fact that some people within the catchment area may also use another pharmacy or pharmacies is irrelevant.
Grounds 2 and 5 - Improper Exercise and Reasonable Exercise of Power
153.Both in relation to the question of whether the catchment area overlapped with other catchment areas of other approved pharmacies and the finding in relation to the catchment area having a population of 3,000 people do not in my view invite any or any proper basis upon which the Court could conclude that the Authority has improperly exercised the power or made a decision that could be regarded as constituting Wednesbury unreasonableness.
154.Once the Authority followed correctly, as I have found, the procedure for establishing the catchment area and otherwise complied with the relevant definition in the Rules, then I accept as submitted by the Respondents that it did not have any discretion as to whether or not it should recommend approval of the Third Respondent’s application. Accordingly, I accept that Wednesbury unreasonableness is not available as a ground for review in this application.
155.As indicated earlier I do not accept that any error has occurred in the manner in which the Authority dealt with the prospect of overlapping catchments.
156.In the alternative I accept that any error conceded, namely the apportionment of resident population was not an error of a kind which ultimately affected the outcome of the Authority’s decision.
157.Hence, in my view these grounds fail.
Ground 3 – Breach of Rules of Natural Justice
158.In my view the decision in Martin should not be distinguished from this application. It remains an appropriate and relevant authority for the proposal that the provisions of the NHA and Rules do not give rise to an obligation to accord procedural fairness to those holding existing pharmacies albeit that their economic interest may be damaged by the approval.
159.The decision of the Authority, whilst perhaps damaging the economic interest to the Applicants, does not prevent them from carrying on their pharmacy business in the existing pharmacy. That affect upon the Applicants can properly be described as ‘indirect or consequential’. Hence, I accept the submissions of the Respondent made in relation to this ground.
160.In my view it is also clear that any legitimate expectations of the Applicants have in fact been met. It is perhaps unfortunate that in this instance the procedure which was followed included the receipt of submissions concerning the proposed pharmacy and that clear objections were made by the Applicants which appeared to be successful.
161.
The mere fact that the Tribunal ultimately decided to remit the matter, albeit by consent, does not detract from the power of the Authority properly exercised to then reconsider the matter and make a favourable decision in relation to the new pharmacy. Prudent existing pharmacy owners with an interest with any proposed new pharmacy ought properly to have made arrangements to have been kept informed about the progress of any pending proceedings in the Tribunal. In any event I am not satisfied in the circumstances that there was any further obligation upon the Authority after remittal from the Tribunal to provide further notice to the Applicants, although as a courtesy one might reasonably expect that to have occurred. However, any lack of courtesy, perceived or real, does not of itself provide a sufficient basis upon which I am prepared to impose an obligation on the Authority to provide notice of its intention to reconsider the application. Its failure to provide a notice does not in my view constitute a breach of natural justice. I further accept that in any event it is difficult to concede that the Applicants would have provided any or any further relevant information which would have altered the outcome in this matter.
I cannot see any practical injustice or lost opportunity to make further representations to the Authority depriving the Applicants in this instance of an alternative successful outcome.
162.In any event from a practical point of view the Applicants had made known their views in clear terms to the Authority and it is difficult to determine any further information which could have been provided which would have altered that outcome given that the Authority in my view has correctly applied the appropriate definition and made a decision free of error.
Conclusion
163.It follows for those reasons that the Application should be dismissed with costs. It is not necessary to consider in further detail other grounds which clearly appear to be consequential matters which need only be considered if the Applicants other grounds had succeeded.
I certify that the preceding one hundred and sixty-three (163) paragraphs and Attachment “A” are a true copy of the reasons for judgment of McInnis FM
Associate:
Date: 28 August 2006
ATTACHMENT “A”
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