Watson v Australian Community Pharmacy Authority

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FEDERAL COURT OF AUSTRALIA

Watson v Australian Community Pharmacy Authority [2012] FCAFC 142

Citation: Watson v Australian Community Pharmacy Authority [2012] FCAFC 142
Appeal from: Watson v Australian Community Pharmacy Authority [2011] FCA 1121
Parties: CRAIG WATSON v AUSTRALIAN COMMUNITY PHARMACY AUTHORITY, PAUL MASON AND ROBERT BELE and THE SECRETARY OF THE DEPARTMENT OF HEALTH AND AGEING
File number: QUD 386 of 2011
Judges: LANDER, JESSUP AND FOSTER JJ
Date of judgment: 12 October 2012
Corrigendum: 18 October 2012
Catchwords:

ADMINISTRATIVE LAW – appeal – appeal from a decision of the Court dismissing an application for judicial review under s 5(1)(h) of the Administrative Decisions (Judicial Review) Act 1977 (Cth) – second respondents made application under s 90 of the National Health Act 1953 (Cth) for approval to supply pharmaceutical benefits – application referred to Australian Community Pharmacy Authority for recommendation to the Secretary of the Department of Health and Ageing – application opposed by appellant – positive recommendation made – appellant sought judicial review of recommendation – consideration of the National Health (Australian Community Pharmacy Authority Rules) Determination 2006 – consideration of the requirement that an applicant had on the date of the application, and has on the date on which a recommendation is made, a legal right to occupy the proposed premises on which approval for supply of pharmaceutical benefits is sought – consideration of legislation empowering, and role and composition of, Australian Community Pharmacy Authority

PRACTICE AND PROCEDURE – application to reopen appeal to amend notice of appeal – application to adduce further evidence for the purpose of remitting the proceeding for rehearing – hearing concluded and judgment reserved – relevant principles


Legislation:

Administrative Appeals Tribunal Act 1975 (Cth) s 42D
Administrative Decisions (Judicial Review) Act 1977 (Cth) ss 5(1)(f), 5(1)(h), 5(3), 13(1)
Conveyancing Act 1919 (NSW) ss 23C(1)(a), 23D
Federal Court Act 1976 (Cth) s 27
National Health Act 1953 (Cth) ss 89, 90, 99J, 99K, 99L, 99M, 99N

National Health (Australian Community Pharmacy Authority Rules) Determination 2006 (Cth) ss 9, 10, sch 1 item 107, sch 2 item 201

Cases cited:

Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 cited
Broadbridge v Stammers (1987) 16 FCR 296 cited
Corporation of the City of Enfield v Development Assessment Commission (2000) 199 CLR 135 cited
Parisienne Basket Shoes Pty Ltd v Whyte (1938) 59 CLR 369 cited
Smith v NSW Bar Association (1992) 176 CLR 256 cited

The Australian Heritage Commission v Mount Isa Mines Ltd (1997) 187 CLR 297 cited

Date of hearing: 22 May 2012
Place: Adelaide (heard in Brisbane)
Division: GENERAL DIVISION
Category: Catchwords
Number of paragraphs: 122
Counsel for the Appellant: Mr M Stewart with Mr D Keane
Solicitor for the Appellant: Walsh Halligan Douglas
Counsel for the First Respondent: The First Respondent did not appear
Counsel for the Second Respondents: Mr P Flanagan SC with Mr D O’Farrell
Solicitor for the Second Respondents: Gadens Lawyers
Counsel for the Third Respondent: The Third Respondent did not appear

FEDERAL COURT OF AUSTRALIA

Watson…

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Details
Case
[2012] FCAFC 142
Decision Date

CaseChat Overview and Summary

The appellant, who operates a pharmacy business, challenged a decision of the Australian Community Pharmacy Authority (the Authority) that recommended approval of an application by the second respondents to supply pharmaceutical benefits from proposed premises. The appellant argued that the second respondents did not have a legal right to occupy the proposed premises, as required by the National Health (Australian Community Pharmacy Authority Rules) Determination 2006. The appellant sought judicial review of the Authority's recommendation. The primary judge dismissed the application, and the appellant appealed. The appellant also made an interlocutory application to adduce further evidence to support the appeal. The appellant contended that the Authority was not satisfied, as required by Item 201(a) of the Determination, that the second respondents had a legal right to occupy the proposed premises, and that the Authority could not make a positive recommendation in the absence of such satisfaction. The court held that the Authority was entitled to be satisfied, based on evidence before it, that the second respondents had a legal right to occupy the proposed premises. The interlocutory application was dismissed. The appeal was dismissed, and the appellant was ordered to pay the second respondents' costs.

Orders

Orders of the court

1. The interlocutory application filed on 3 July 2012 be dismissed.

2. The appeal be dismissed.

3. The appellant pay the second respondents’ costs to be taxed.

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

Background

Background to the litigation

For the reasons that follow, the appeal must be dismissed. Facts and Legislation For about the last 12 years the appellant has conducted a pharmacy business under the name of Health Care Chemist from premises at 60 Burringbar Street, Mullumbimby in New South Wales. On or about 6 March 2010 the second respondents, who are also pharmacists, applied under s 90 of the National Health Act 1953 (Cth) (the Act) for approval to supply pharmaceutical benefits at premises at 107 Dalley Street, Mullumbimby (the proposed premises). The application was to relocate the second respondents’ existing pharmacy business which is carried on at Bogangar to the proposed premises. The proposed premises are located near the appellant’s premises. Part 7 of the Act provides for the provision of pharmaceutical benefits by the Commonwealth. The scheme provides for the provision of designated drugs and medical preparations to persons for whom they are prescribed by a medical practitioner at the expense of the Australian Government, subject to financial contribution by those persons. It does so by providing for pharmaceutical benefits. Relevantly, for the purpose of this appeal, a person is not entitled to receive a pharmaceutical benefit unless it is supplied by an approved pharmacist, at or from premises in respect of which the pharmacist is for the time being approved, and subject to other conditions which are not relevant: s 89 of the Act. The National Health (Australian Community Pharmacy Authority Rules) Determination 2006 (the Rules) supplements the legislative scheme by regulating the location of approved pharmacies. It is necessary, therefore, that a pharmacist, who wishes to dispense pharmaceutical benefits in accordance with the Act, applies for the approval of the supply of pharmaceutical benefits at or from particular premises. Section 90(1) authorises the third respondent, the Secretary of the Department of Health and Ageing (the Secretary), to approve a pharmacist’s application for the purpose of supplying pharmaceutical benefits at or from particular premises. However, before the Secretary is entitled to do that, the application made by the pharmacist must be referred to the first respondent, the Australian Community Pharmacy Authority (the Authority): s 90(3A). The Authority is established by Division 4B of the Act, and in particular s 99J. The membership of the Authority is provided for in s 99N. Pursuant to s 99N, the Authority comprises a Chairperson, two pharmacists nominated by the Pharmacy Guild of Australia, one pharmacist nominated by the Pharmaceutical Society of Australia, an officer of the Department of Health and Ageing nominated by the third respondent, and a person who, in the relevant Minister’s opinion, is an appropriate person to represent the interests of consumers. The functions of the Authority are provided for in s 99K:(1) The functions of the Authority are:(a) to consider applications under section 90; and(b) to make, in respect of an application under section 90:(i)a recommendation whether or not the applicant should be approved under that section in respect of particular premises; and(ii)if an approval is recommended—recommendations as to the conditions (if any) to which the approval should be subject; and(2)In making a recommendation under subsection (1), the Authority must comply with the relevant rules determined by the Minister under section 99L.(3)All recommendations of the Authority under subsection (1) are to be made to the Secretary.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

We do not agree with that contention. Item 201 of Schedule 2 requires the Authority to be satisfied that the applicant has a legal right to occupy the proposed premises and the remaining matters in the Item. If the appellant’s oral submissions were correct, there would be no reason to treat paragraph (a) as a jurisdictional fact and paragraphs (b) to (d) as not jurisdictional facts. It was not contended that the other paragraphs of Item 2 had to be established objectively. The matters upon which the Authority had to be satisfied were for the Authority and, provided there was evidence to support the Authority being satisfied, not for review by the Court: Parisienne Basket Shoes Pty Ltd v Whyte (1938) 59 CLR 369 at 391 per Dixon J; Corporation of the City of Enfield v Development Assessment Commission (2000) 199 CLR 135; [2000] HCA 5; The Australian Heritage Commission v Mount Isa Mines Ltd.Conclusion The primary judge was right to dismiss the application. There was evidence before the Authority to support the finding that the second respondents had a legal right to occupy the premises, and the Authority was entitled to make that finding based on that evidence.The Appellant’s Interlocutory Application The Court reserved its judgment. On 3 July 2012, the Registry received an interlocutory application in which the following orders were sought:1.That the hearing of the appeal in proceedings QUD386 of 2011 be re-opened to:a.allow the Applicant to amend the Notice of Appeal to include a ground of review pursuant to s.5(1)(g) of the Administrative Decisions (Judicial Review) Act 1977 as the decision of the First Respondent was induced by fraud as the extension to lease dated 9 December 2009 was created after that date for the purposes of inducing the First Respondent to believe that the Lease over the Premises was validly extended; andb.allow the applicant to adduce the evidence of Mr Mark Cochrane in support of the amendment to the Notice of Appeal;2.That the re-opened appeal be remitted to the trial division for further hearing to determine the proposed further ground of appeal above.3.That the costs of and incidental to the application be costs in the cause. The application was lodged without any accompanying affidavit. On 9 July 2012, Lander J’s associate wrote to the appellant and requested the appellant file an affidavit in support of the application that addressed the reasons why the application was made so late, the evidence in support of the claim of fraud, and the evidence sought to be adduced from Mr Mark Cochrane. On 9 July 2012, the appellant filed an affidavit of Mr Mark Cochrane sworn 2 July 2012. In that affidavit, Mr Cochrane said that he is the principal real estate agent of the firm “Mark Cochrane Real Estate”. In March 2010, the appellant approached him to purchase the proposed premises. The effect of Mr Cochrane’s evidence was that he acted on behalf of the appellant in negotiating with Mr Evans (one of the co-owners of the property) to purchase the proposed premises, part of which was the subject of the lease to the second respondents.

Ratio Decidendi

Legal Principle Established

The appellant has identified seven separate grounds of appeal, which are:1.The learned trial judge erred in holding that the appellant failed to show that there was no evidence upon which the first respondent could be satisfied that, at the relevant dates, the second respondents had a legal right to occupy premises situated at 107 Dalley Street, Mullumbimby (“the Dalley Street Premises”) as required by the National Health (Australian Community Pharmaceutical Authority Rules) Determination Schedule 2, Item 201(a).2.In so holding, his Honour erred in concluding that it was not open to the Court to go behind the statement of the first respondent, in deciding to recommend approval of the second respondents’ application to supply pharmaceutical benefits at or from the Dalley Street Premises, that it was satisfied that, as at the relevant dates, the second respondent[s] had a legal right to occupy the Dalley Street Premises.3.In so holding, his Honour erred in concluding that s.5(3)(a) of the Administrative Decisions (Judicial Review) Act 1977 (Cth) did not apply to the decision the first respondent was required to make under Schedule 2, Item 201(a) because that decision required only that the first respondent be satisfied “in its own mind” that the second respondents had a legal right to occupy the Dalley Street Premises, not whether that fact existed as an objective fact.4.In so holding, his Honour erred in concluding, alternatively, that the first respondent had before it evidence and material from which it could be satisfied that the second respondents had a legal right to occupy the Dalley Street Premises at the relevant dates.5.In so holding, his Honour erred in concluding that the first respondent could be so satisfied when, as a matter of law, it could not have been so satisfied.6.In so holding, his Honour erred in concluding that, on the facts of this case, Mr Evans (by whom agreements were signed purporting to extend a lease of the Dalley Street Premises to the second respondents) had the legal capacity to bind his co-owners to those agreements.7.His Honour erred in failing to hold that there was no evidence or other material before the first respondent from which, as a matter of law, it could be satisfied that the second respondents had a legal right to occupy the Dalley Street Premises at the relevant dates.Consideration of Appeal As he did before the primary judge, the appellant argued that at the date of the application, 6 March 2010, the second respondents did not in fact have a legal right to occupy the proposed premises, and that the Authority could not be satisfied, as it had to be under Item 201(a), of that fact. Therefore, it was contended that the Authority had no discretion and had to recommend the application not be approved. The lease expired in its terms, if not renewed by the exercise of the first option, on 8 December 2009. The document dated 9 December 2009 purported to extend the term of the lease from the option renewal date, which was the date of expiry of the lease, to 8 May 2011. The document did not purport to record the exercise by the second respondents of the renewal of the lease pursuant to clause 4 of the lease. If the document operated to extend the lease, then the second respondents would have lost the benefit of the first option which had to be exercised on 7 December 2009. Item 12 in Annexure A to the lease provides that the first option must be exercised between one month and one day prior to the terminating date in the lease. The second respondents would in that circumstance also have lost the benefit of the other three options.