Watson v Australian Community Pharmacy Authority

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FEDERAL COURT OF AUSTRALIA

Watson v Australian Community Pharmacy Authority [2011] FCA 1121

Citation: Watson v Australian Community Pharmacy Authority [2011] FCA 1121
Parties: CRAIG WATSON v AUSTRALIAN COMMUNITY PHARMACY AUTHORITY, PAUL MASON AND ROBERT BELE and SECRETARY OF THE DEPARTMENT OF HEALTH AND AGEING
File number: QUD 565 of 2010
Judge: REEVES J
Date of judgment: 29 September 2011
Catchwords:

ADMINISTRATIVE LAW – judicial review of recommendation decision – consideration of “no evidence” ground in s 5(1)(h) of the Administrative Decisions (Judicial Review) Act 1977 – consideration of s 5(3)(a) of the Administrative Decisions (Judicial Review) Act 1977 and whether a particular matter had to be established as an objective fact – whether criteria to be satisfied for recommendation constitute jurisdictional facts – consideration of s 5(3)(b) of the Administrative Decisions (Judicial Review) Act 1977 – applies to critical facts in the chain of reasoning decision based on – to succeed those critical facts must be shown not to have existed at the time of decision – consideration of ostensible authority to bind co-lessors – consideration of capacity of one co-owner to bind other co-owners

HELD – “no evidence” ground not made out – application dismissed
Legislation: National Health (Australian Community Pharmaceutical Authority Rules) Determination 2006 (Cth) s 9, Schedule 2 Item 201
National Health Act 1953 (Cth) s 90
Administrative Appeals Tribunal Act 1975 (Cth) s 42D
Administrative Decisions (Judicial Review) Act 1977 (Cth) ss 3, 5(1)(h), 5(3), 13(1)
Legislative Instruments Act 2003 (Cth)
Cases cited:

Alexander v Australian Community Pharmacy Authority [2010] FCA 189
Commonwealth of Australia v Horsfall (2010) 185 FCR 66; [2010] FCA 443
Flaherty v Secretary, Department of Health and Ageing [2010] FCA 63
Ranallo v The Australian Community Pharmacy Authority (2009) 174 FCR 457; [2009] FCA 113
Essington Investments Pty Ltd & Ors v Regency Property Pty Ltd [2004] NSWCA 375
Armagas Ltd v Mundogas SA [1986] 1 AC 717

Pola v Commonwealth Bank of Australia [1997] FCA 1476

Hedley v Roberts [1977] VR 282
Andrews v Wilcox [2008] NSWSC 280
Stenberg v Lechowics [2010] NSWSC 926
Allen Taylor & Company Pty Ltd trading as Boral Timber v Norman Leslie Harrison [2010] NSWSC 1021
Minister for Immigration and Citizenship v SZMDS (2010) 240 CLR 611; [2010] HCA 16
Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321
Minister for Immigration and Multicultural Affairs v Rajamanikkam (2002) 210 CLR 222
Australian Retailers Association v Reserve Bank of Australia (2005) 148 FCR 446; [2005] FCA 1707
Plaintiff M70/2011 v Minister for Immigration and Citizenship [2011] HCA 32
Australian Heritage Commission v Mt Isa Mines Ltd (1997) 187 CLR 297
Curragh Queensland Mining Ltd v Daniel (1992) 34 FCR 212
Sunchen Pty Ltd v Commissioner of Taxation [2010] FCA 21
Date of hearing: 8 June 2011
Place: Brisbane
Division: GENERAL DIVISION
Category: Catchwords
Number of paragraphs: 59
Counsel for the Applicant: Mr G Gibson QC with Mr D Keane
Solicitor for the Applicant: Walsh Halligan Douglas
Counsel for the First Respondent: The…
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Details
Case
[2011] FCA 1121
Decision Date

CaseChat Overview and Summary

The applicant, Mr Watson, filed an application for judicial review against the Australian Community Pharmacy Authority (Authority) under s 13 of the Administrative Decisions (Judicial Review) Act 1977 (Cth). The subject of the review was the Authority’s decision to recommend approval for the relocation of a pharmacy business owned by the second respondents from Bogangar to Mullumbimby in northern New South Wales. The primary issue before the court was whether there was no evidence to support the Authority’s conclusion that the second respondents had a legal right to occupy the proposed premises in Mullumbimby. The court examined the documentation provided by the second respondents and concluded that the Authority had indeed considered the relevant documents, namely the lease and two agreements to extend the lease, in making its decision.

The court rejected the applicant’s argument that the Authority’s decision was based on an error of law or an arbitrary conclusion. The Authority’s decision was made based on the existence of a signed lease and two agreements to extend the lease, signed by both parties. The court found no evidence of misinterpretation of the statutory requirements or any indication that the Authority misconstrued the meaning of the expression “a legal right to occupy.” Furthermore, the court did not consider the constitution of the Authority to be significant in this case, as it was not a specialist tribunal making a discretionary decision.

Ultimately, the court held that the “no evidence” ground was not made out, and the application for judicial review was dismissed. The court found that the Authority had properly considered the relevant evidence and made a rational decision based on the existence of a signed lease and two agreements to extend the lease. The court did not find any errors of law or arbitrary conclusions in the Authority’s decision-making process. Consequently, the application for judicial review was unsuccessful, and the Authority’s decision to recommend approval for the relocation of the pharmacy business was upheld.

Orders

Orders of the court

1. The application filed on 17 December 2010 be dismissed.

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

Background

Background to the litigation

In particular, it will be noted that the need for an applicant to have “a legal right to occupy the proposed premises” as at the date of the application; and as at the date the Authority makes its recommendation on the application, is one of the critical requirements of Item 201(a).FACTUAL BACKGROUND The second respondents initially applied to the Authority by an application dated 6 March 2010. That application was received by the Secretary on 8 March 2010. It is common ground between the parties that nothing turns on whether the application was made on 6 or 8 March. As I have already mentioned, the application sought a recommendation by the Authority to the Secretary to approve the relocation of the second respondents’ pharmacy business from Bogangar to Mullumbimby in northern New South Wales. In Mullumbimby, the pharmacy business was to be located at 107 Dalley Street (“the Dalley Street premises”). On 30 April 2010, the Authority met and decided to recommend that the second respondents’ application not be approved. Its stated reason for this decision was that the Authority was not satisfied that the Dalley Street premises were at least 200m by straight line from the nearest approved pharmacy. This was a requirement under Item 107(2) of the Rules. In its decision, the Authority noted that it had recently recommended an application for approval of another pharmacy business at premises located at Shop 2, Cnr Dalley and Burringbar Streets, Mullumbimby, which premises were approximately 110m by straight line from the Dalley Street premises. In June 2010, the second respondents applied to the Administrative Appeals Tribunal for a review of this first decision of the Authority. Sometime thereafter, it appears that the application for the other pharmacy businesses close to the Dalley Street premises was withdrawn. As a consequence, on 21 October 2010, the Administrative Appeals Tribunal remitted the second respondents’ application to the Authority to be reconsidered pursuant to s 42D of the Administrative Appeals Tribunal Act 1975 (Cth). On 29 October 2010, following its reconsideration of the application, the Authority decided to recommend to the Secretary that approval be granted for the proposed relocation. As I have noted above, the Authority was obliged to make this recommendation once it was satisfied that the second respondents met all the relevant requirements of the Rules. That, of course, included being satisfied the second respondents had a legal right to occupy the Dalley Street premises. To establish this, the second respondents’ solicitors provided certain documentation to the Authority which, they claimed, showed the second respondents had a lease over the Dalley Street premises. That arose in the circumstances set out immediately hereunder. In March 2009, about a year prior to their initial application to the Authority, the second respondents entered into an agreement to lease the Dalley Street premises for a term of nine months commencing on 9 March 2009 and expiring on 8 December 2009. The lease agreement provided for four consecutive options to renew the lease for periods of three years each. It is common ground between the parties that none of these options was ever exercised. Instead, the second respondents claim to have entered into two agreements to extend that lease, the first on 9 December 2009 to extend it from 8 December 2009 to 8 May 2010, and the second on 22 October 2010 to extend it from that date to 28 February 2011: see at [15]–[17] below. It will be noted that the first of these extensions covered the period of the second respondents’ initial application (see [9] above) and the second covered the period of the Authority’s reconsideration of their application (see [12] above).

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Each document contained the signatures of Mr Evans, Mr Mason and Mr Bele, above where their names appear on the document.THE AUTHORITY’S DECISION Soon after the Authority’s second decision, Mr Watson’s solicitors made a request under s 13(1) of the Administrative Decisions (Judicial Review) Act 1977 (Cth) (“the ADJR Act”) for a statement of the reasons for that decision. That statement of reasons (“the Reasons”) was subsequently provided. At this point it is convenient to identify a number of aspects of the Reasons that are particularly relevant in these proceedings. In the “Background” section of the Reasons, the Authority identified the requirements of Item 201 of Schedule 2 to the Rules (set out in [7] above) as requirements it had to consider in making its decision. In the section entitled “Evidence”, the Authority recorded that, among the evidence it considered in making its decision, was the lease for the Dalley Street premises dated 9 March 2009 and the letter and attachments from the second respondents’ solicitors dated 25 October 2010 (set out at [14]–[17] above). The “Findings on Material Questions of Fact” section of the Reasons included a section entitled “B. Requirements under Schedule 2, Item 201”. That section contained the following statement:201(a) – The applicant had, on the date of application, and has, on the date on which the Authority makes a recommendation in respect of the application, a legal right to occupy the proposed premises.31.The Authority considered the signed Lease between the lessors and the lessees, and the two agreements to extend the lease, signed by both parties.32.On the basis of this evidence, the Authority was satisfied that the Applicants had, on the date of application, and on the date on which the Authority makes a recommendation in respect of the application, a legal right to occupy the proposed premises a legal right to occupy the proposed premises (sic). The Reasons concluded with a paragraph wherein the Authority stated that it: “was satisfied that the Application met all the relevant requirements of the Rules and was therefore required to recommend the Applicants (sic) be approved in accordance with section 9 of the Rules”.PROCEDURAL HISTORY Shortly after receiving the Authority’s Reasons, Mr Watson filed these proceedings under the provisions of the ADJR Act. The sole ground of that application that is now being pursued, is a “no evidence” ground as follows:[T]here was no evidence before the [Authority] that on the date of the application the Second Respondents had a legal right to occupy the subject premises as required under Schedule 2 Item 201 of the National Health (Australian Community Pharmaceutical Authority Rules) Determination (as amended) made under section 99L(1) of the National Health Act 1952. It is not in dispute that the Authority’s decision was a decision under an enactment for the purposes of s 3 of the ADJR Act. This is so under s 3(3) of the ADJR Act, even though the Authority has no discretion in making a recommendation to the Secretary once it is satisfied about the requirements set out in the Rules: see [7] above.

Ratio Decidendi

Legal Principle Established

In reply, Mr Gibson submitted that the decision in SZMDS involved a purely factual issue as to whether the applicant in that case met the criteria for a protection visa and the arbitrary or capricious nature of the decision had to be viewed in that context. However, he submitted, the Authority’s decision in this matter was arbitrary in the true sense of that word because it was based on a legally insupportable conclusion of fact. Mr Gibson submitted that there was no evidence before the Authority upon which it could draw an inference that the second respondents had paid rent for the Dalley Street premises, nor that they were in occupation of the premises throughout. He submitted such inferences would be pure speculation not rational inferences. Mr Gibson pointed out that the Authority did not state in its Reasons that it had relied upon Cl 12.4 of the lease, or an implied holding over under a monthly tenancy and it must be assumed that it did not rely on these matters. In response to Mr Flanagan’s submission that the error of law did not involve the construction of the statutory requirements under which it operated, but instead involved the effect of the documents before the Authority, Mr Gibson submitted that the error of law went to the heart of the statutory requirements. He submitted that, if there was an error of law which vitiated the conclusion of fact reached by the Authority, then that conclusion of fact, ie that they were satisfied about the second respondents’ legal right to occupy the Dalley Street premises, could not stand. He submitted that this was a jurisdictional fact and the Authority therefore had no jurisdiction to make the decision.CONSIDERATION Many of these submissions can be disposed of briefly. First, the question whether the second respondents were in actual occupation of the Dalley Street premises throughout and/or had paid the rent for those premises and/or had exercised any holding over rights under the lease are all irrelevant. The Authority did not mention any of these matters in its Reasons, let alone state that they were material to its decision. Instead, it is clear from the “Findings on Material Questions of Fact” section of its Reasons that the Authority made its decision based upon the existence of a “signed Lease between the lessors and the lessees, and … two agreements to extend the lease signed by both parties”. From these documents and other materials (see at [44]–[45] below), it concluded that the second respondents had a legal right to occupy the Dalley Street premises. Secondly, there is nothing in the Authority’s Reasons to indicate that it misconstrued the meaning of the expression “a legal right to occupy”. Indeed, there is no indication from its Reasons that the Authority thought it was necessary to consider the meaning of that expression at all. It follows that the Authority did not commit an error by misconstruing the provisions of the legislation or rules under which it was operating. It follows further that it is unnecessary to consider Mr Flanagan’s detailed submissions about the meaning of the expression a “legal right to occupy”. Thirdly, I do not consider the constitution of the Authority is of any significance in this case. It may have been otherwise if it were a specialist Tribunal making a discretionary decision, but that is clearly not the case here: see at [22] above.