Wodonga Pharmacy Pty Ltd and Australian Community Pharmacy Authority Annette Walkerden Dipak Sanghvi OTHER PARTIES
[2014] AATA 496
[2014] AATA 496
Division GENERAL ADMINISTRATIVE DIVISION File Number
2013/4297
Re
Wodonga Pharmacy Pty Ltd
APPLICANT
And
Australian Community Pharmacy Authority
RESPONDENT
And
Annette Walkerden
Dipak Sanghvi
OTHER PARTIES
DECISION
Tribunal Egon Fice, Senior Member
Date 18 July 2014 Place Melbourne The Tribunal sets aside the recommendation decision made by the Respondent on
26 July 2013 and in substitution recommends that Wodonga Pharmacy Pty Ltd be approved under s. 90 of the National Health Act 1953 to supply pharmaceutical benefits from Shops 4 & 5, White Box Rise Shopping Centre.........[sgd Egon Fice]................................................................
Egon Fice, Senior Member
PHARMACIES – Recommendation of Australian Community Pharmacy Authority – Approval to supply pharmaceutical benefits – New pharmacy in a small shopping centre – Legal right to occupy the proposed premises – Information to be considered by the Authority – Single management – Commercial establishment – Gross leasable area of at least 5000 m2 – At least 15 other commercial establishments – Temporary selling points – Occupied by or likely to be occupied by one business – Separate commercial establishments
PRACTICE AND PROCEDURE – Statutory interpretation – Onus of proof – Inferences
Legislation
Acts Interpretation Act 1901 (Cth) ss 15AA, 46A
Administrative Appeals Tribunal Act 1975 (Cth) ss 3, 33, 33(2A), 37, 40(1A)
Legislative Instruments Act 2003 (Cth) ss 6, 13
National Health Act 1953 (Cth) ss 90, 99K, 99L, 105AD
Rules
National Health (Australian Community Pharmacy Authority Rules) Determination 2011 (Cth)
National Health (Australian Community Pharmacy Authority Rules) Determination 2011 No. PB 65 of 2011 (Cth) Explanatory Statement
Cases
Boughey v The Queen (1986) 161 CLR 10
Collector of Customs v Agfa-Gevaert Limited (1996) 186 CLR 389
De L v Director General, New South Wales Department of Community Services and Another (1997) 143 ALR 171
Issa and Australian Community Pharmacy Authority and another (2012) 128 ALD 631
Jones v Dunkel (1959) 101 CLR 298
Kumar and Minister for Immigration and Citizenship (2009) 107 ALD 178
Lobo and Department of Immigration and Citizenship [2011] AATA 705
McDonald v Director-General of Social Security (1984) 6 ALD 6
Perri and Another v Coolangatta Investments Pty Ltd (1982) 149 CLR 537
Pioneer Concrete Services Ltd and Another v Galli and Another [1985] V.R. 675
Poignand v NZI Securities Australia Ltd and Others (1992) 37 FCR 363
R v Lao (2002) 5 VR 129
St George Bank Ltd v Federal Commissioner of Taxation (2009) 176 FCR 424
The Queen v The Australian Broadcasting Tribunal and Others; ex parte Hardiman and Others (1980) 144 CLR 13
Tillmanns Butcheries Pty Ltd v Australasian Meat Industry Employees’ Union and Others (1979) 27 ALR 367
Tisdall v Webber (2011) 193 FCR 260
Walsh v Lonsdale (1882) 21 Ch D 9
Watson v Australian Community Pharmacy Authority and Others (2012) 131 ALD 210
Secondary Materials
Bradbrook A, Moore A, MacCallum S, Grattan S, Australian Real Property Law (5th ed, Thomson Reuters, 2011)
Hattingh H L, The regulation of pharmacy ownership in Australia: The potential impact of changes to the health landscape (2011) 19 JLM 147
Pearce D and Argument S, Delegated Legislation in Australia (2nd ed, Butterworths, 1999)
Urbis Report, Review of the Pharmacy Location Rules under the Fourth Community Pharmacy Agreement (June 2010)
REASONS FOR DECISION
Egon Fice, Senior Member
18 July 2014
The supply of pharmaceutical benefits at particular premises is governed by the National Health Act 1953 (the National Health Act). Applications by pharmacists for approval to supply pharmaceutical benefits at particular premises are considered by the Australian Community Pharmacy Authority (ACPA) which may recommend whether or not an applicant should be approved in respect of particular premises. Those recommendations are then made to the Secretary of the Department of Health and Ageing (the Secretary) (or the Secretary’s delegate).
An applicant dissatisfied with the recommendation decision made by ACPA may make an application to the Administrative Appeals Tribunal (AAT) seeking review of that decision (s. 105AD(2)(a) of the National Health Act).
Wodonga Pharmacy Pty Ltd (Wodonga Pharmacy) lodged an application on 17 June 2013 for approval to supply pharmaceutical benefits from Shops 4 & 5, Woolworths White Box Rise, Corner Victoria Cross Parade and Kelliher Avenue, Wodonga, Victoria, 3690 (White Box Rise Shopping Centre).
On 26 July 2013 ACPA recommended that the application lodged by Wodonga Pharmacy not be approved. ACPA was not satisfied that:
(a)the applicant had, on the date the application was made, and on the day ACPA made the recommendation, a legal right to occupy the proposed premises on or after the date the application was made; and
(b)the proposed premises were within a small shopping centre which had at least 15 other commercial establishments.
On 28 August 2013 Gadens Lawyers, on behalf of Wodonga Pharmacy, lodged an application with the AAT seeking review of ACPA’s decision made on 26 July 2013.
On 4 September 2013 Ms Annette Walkerden, the proprietor of Elmwood Pharmacy which is located at 291 Beechworth Road, Wodonga, lodged an application with the AAT seeking leave to be joined as a party to this proceeding. On 13 September 2013 lawyers acting for ACPA (Australian Government Solicitor (AGS)) notified the Tribunal that it did not oppose Ms Walkerden’s application.
On 13 September 2013 the Tribunal received an application from Mr Dipak Sanghvi seeking to be joined as a party to this proceeding. On 18 September 2013 AGS notified the Tribunal that ACPA did not oppose Mr Sanghvi’s application.
On 3 October 2013 the Tribunal ordered that Ms Walkerden and Mr Sanghvi be joined as parties to this proceeding.
Broadly, the issues I am required to determine are:
(a)whether the applicant had a legal right to occupy the proposed premises; and
(b)whether or not the proposed premises are located in the small shopping centre.
I should also explain that at the outset of this hearing, Mr B Dean, a solicitor with the Australian Government Solicitor who appeared on behalf of ACPA, made it clear that he was present solely for the purpose of assisting the Tribunal. That is in accordance with the principle established by High Court of Australia decision in The Queen v The Australian Broadcasting Tribunal and Others; ex parte Hardiman and Others (1980) 144 CLR 13 where the Court said, at 35 – 36, regarding the Tribunal’s participation in the hearing:
In cases of this kind the usual course is for a tribunal to submit to such order as the court may make. The course which was adopted by the Tribunal in this Court is not one which we would wish to encourage. If a tribunal becomes a protagonist in this Court there is a risk that by doing so it endangers the impartiality which it is expected to maintain in subsequent proceedings which take place if and when relief is granted. The presentation of a case in this Court by a tribunal should be regarded as exceptional and, where it occurs should, in general, be limited to submissions going to the powers and procedures of the Tribunal.
THE LEGAL RIGHT TO OCCUPY THE PROPOSED PREMISES
Although this was stated to be an issue at the outset of the hearing of this matter, it seemed to me that the parties, on hearing what Mr D Favell, counsel who appeared for Wodonga Pharmacy, had to say, agreed that Wodonga Pharmacy had the legal right to occupy the proposed premises at the relevant times. In any event, given that I am required to come to the correct decision in this matter, I will briefly set out why I accept Mr Favell’s submissions.
The Secretary’s power to grant approval for the supply of pharmaceutical benefits at particular premises is set out in s. 90 of the National Health Act. In so far as it is relevant to this matter, it provides:
90 Approved pharmacists [see Note 1]
(1)Subject to this section, the Secretary may, upon application by a pharmacist for approval to supply pharmaceutical benefits at particular premises, approve that pharmacist for the purposes of supplying pharmaceutical benefits at those premises.
(3A) Subject to subsections (3AA) and (3AE), an application under this section must be referred to the Authority.
(3AB) In subsections (3AA) and (3AE):
pharmacy means a business in the course of carrying on of which pharmaceutical benefits are supplied.
(3B) An approval may be granted under this section in respect of an application that has been referred to the Authority under subsection (3A) or (3AF) only if the Authority has recommended the grant of the approval, but the Secretary may refuse to grant an approval even if the grant has been recommended by the Authority.
(3D) The Secretary must not grant approval under this section to a pharmacist in respect of particular premises if the Secretary is satisfied that on or after the day of the approval would otherwise be granted:
(a)the pharmacist would be unable to supply pharmaceutical benefits at the premises; or
(b)the premises would not be accessible by members of the public for the purpose of receiving pharmaceutical benefits at times that, in the opinion of the Secretary, are reasonable.
The functions of ACPA are set out in s. 99K of the National Health Act. It provides:
99K Functions
(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.
Section 99L provides that the Minister must, in writing, determine the rules subject to which ACPA is to make recommendations under s. 99K(1). The current rules are set out in an instrument entitled National Health (Australian Community Pharmacy Authority Rules) Determination 2011 (the Rules). Schedule 2 of the Rules sets out some general requirements, including the following:
211 The Authority is satisfied that:
(a)the applicant had, on the day the application was made, and has, on the day the authority makes a recommendation in relation to the application, a legal right to occupy the proposed premises on or after the day the application was made; and…
In its reasons for refusing to recommend Wodonga Pharmacy’s application to supply pharmaceutical benefits from premises situated in the White Box Rise Shopping Centre, ACPA noted that the agreement to lease entered into between the owners of the shopping centre (Shopping Centres Australasia Property Group RE Limited) and Wodonga Pharmacy contained a clause which stated that the agreement to lease was conditional upon Victorian Pharmacy Authority approval and all consents required by Medicare Australia; and the Victorian Pharmacy Authority granting Wodonga Pharmacy a pharmacy licensed for use within the premises by 30 September 2012. ACPA was unable to determine whether the date in the conditional clause had been extended. The Agreement for Lease was entered into on 31 October 2012 and the stated commencement date was 17 January 2013.
The first point to make is that it has long been established that an agreement for a lease is specifically enforceable at equity and it constitutes a binding contract under common law principles (see: Australian Real Property Law, 5th ed, 2011, at [14.35]). That is commonly referred to as the rule in Walsh v Lonsdale (1882) 21 Ch D 9. I had in evidence the Agreement for Lease of shops 4 & 5 at the White Box Rise Shopping Centre dated 17 January 2013 which was executed by the lessor and the lessee on
31 October 2012. It contains the following special condition:
11 Special Conditions
(a)This Agreement and the Lease are conditional upon Victorian Pharmacy Authority approval and all consents required by Medicare Australia, and the Victorian Pharmacy Authority granting the Tenant a pharmacy licensed for use within the Premises by 30 September 2012 (“the Conditions”).
(b)The Tenant must, at its own cost and expense, use its best endeavours to satisfy the Condition as soon as possible.
Prior to the hearing of this matter, Mr Sanghvi queried whether Wodonga Pharmacy had a legal right to occupy the proposed premises at the relevant times. He expressed concern that the Special Condition set out in clause 11 of the agreement for lease constituted a condition precedent to the formation of the agreement. Although this was not pursued, I should indicate that I disagree with that contention. In my opinion, clause 11 is properly described as a condition precedent to performance rather than a condition precedent to the formation of the contract. That is in accordance with the High Court of Australia (Gibbs CJ, Stephen, Mason, Wilson and Brennan JJ) decision in Perri and Another v Coolangatta Investments Pty Ltd (1982) 149 CLR 537 where Mason J said, at 552:
Generally speaking the court will tend to favour that construction which leads to the conclusion that a particular stipulation is a condition precedent to performance as against that which leads to the conclusion that the stipulation is a condition precedent to the formation or existence of a contract. In most cases it is artificial to say, in the face of the details settled upon by the parties, that there is no binding contract unless the event in question happens. Instead, it is appropriate in conformity with the mutual intention of the parties to say that there is a binding contract which makes the stipulated event a condition precedent to the duty of one party, or perhaps of both parties, to perform.
In my opinion, this is such a case. There is nothing in the agreement for lease which states expressly or implies that no agreement should come into force unless the condition in Clause 11 is met. In fact, there is a clause in the Agreement for Lease which grants the landlord the right to terminate the Agreement where the tenant has not complied with an obligation under the Agreement and the landlord is of the opinion that the non-compliance cannot be remedied; or that the non-compliance can be remedied, but the tenant does not remedy it within 14 days after the landlord gives a tenant notice to remedy it (Clause 4.1). Such a clause would be unnecessary if the condition in Clause 11 were construed as a condition precedent to the formation of a contract. It indicates that the Agreement for Lease is binding on the parties unless the landlord exercises its right to terminate.
In his closing submissions, Mr M Hoyne of counsel, who appeared on behalf
Mr Sanghvi, directed my attention to the Full Court of the Federal Court of Australia (Lander, Jessup and Foster JJ) decision in Watson v Australian Community Pharmacy Authority and Others (2012) 131 ALD 210. Although that case was concerned with the 2006 Australian Community Pharmacy Authority Rules, the Rule at Item 201 of Schedule 2 made a similar provision to that now found at Item 211 of the current Rules. It was concerned with a legal right to occupy the proposed premises on the date of the application and on the date on which ACPA made a recommendation in respect of the application. The Court said, at 220:
Item 201(a) does not require the authority to be satisfied that the applicant owns or leases the proposed premises, and therefore does not require the authority to inquire into ownership or leasehold. Rather, item 201(a) requires the authority to be satisfied that the applicant is entitled, at the date of the application and at the date of the recommendation, to occupy the proposed premises lawfully. On the one hand the applicant might own the premises. On the other hand the applicant’s entitlement might be no greater than a licence. Indeed it might be no more than an oral agreement between the applicant and the owner, as long as the applicant has the continuing permission of the owner to occupy the proposed premises.
In any event, I had in evidence the statement made by Mr Brett Howle, who said he was the Asset Manager and Leasing Agent for the proprietor of the shopping centre.
Mr Howle testified that the agreement for lease entered into by the parties on 31 October 2012 remained on foot since that date and that neither party had taken any action to terminate it as a result of delays in obtaining the necessary approvals. I had no evidence to the contrary before me.
Accordingly, I find that Wodonga Pharmacy had, on the day the application was made, and continues to have to the present date, a legal right to occupy the proposed premises at the White Box Rise Shopping Centre. It satisfies the requirements set out in Item 211 of Schedule 2 of the Rules.
APPLICATION OF SECTION 9 OF THE RULES
Prior to embarking upon an analysis of the issues raised by Item 133 of the Rules, I need to explore the application of s. 9 of the Rules, which provides:
9 Information to be considered by Authority
The Authority may consider information provided by an applicant only if:
(a)the information was given at the time the application was made; or
(b)the Authority requested the information.
That is because in his opening statement, Mr Favell explained that there might be an issue about whether I should allow further evidence to be admitted in the course of the hearing given the decision of Logan J, sitting as a Presidential Member of the Tribunal, in Issa and Australian Community Pharmacy Authority and Another (2012) 128 ALD 631.
His Honour explored the purpose underlying the introduction of s. 9 into the Rules noting that extrinsic materials indicated its purpose was that there be some truncation of the ability of an applicant for approval in respect of particular premises to supplement material provided at the time of application. Although in that case, Logan J was concerned with whether the applicant satisfied Item 132 of the Rules, which in fact required the applicant to demonstrate it satisfied the requirements set out in that Item on the day on which the application was made as well as the day on which the application was considered by ACPA, and that the application of s. 9 by ACPA had an element of absurdity in the temporal focus, he was of the view that it should be applied on review by the Tribunal. His Honour said, at [29]:
In any event, the view which I have taken of the operation of s 43 [of the AAT Act], once jurisdiction under s 105AD of the Act [National Health Act 1953] is invoked, is that the tribunal, in exercising the powers and discretions of the authority as primary decision-maker, must likewise comply with s 9, whatever that section may mean.
Having considered his Honour’s reasons, I have formed the opinion that his conclusion was correct, although I believe there are stronger grounds for finding as he did.
Although it is frequently said that the procedures of the Tribunal are at its discretion, that statement should be qualified. Section 33 of the Administrative Appeals Tribunal Act 1975 (AAT Act), insofar as it is relevant, provides:
(1)In a proceeding before the Tribunal:
(a)the procedure of the Tribunal is, subject to this Act and the regulations and to any other enactment, within the discretion of the Tribunal;…
The word enactment is defined in the AAT Act at s. 3 in the following way:
enactment means:
(a)an Act;
(b)an Ordinance of a Territory other than the Northern Territory, the Australian Capital Territory or Norfolk Island;
(c)an instrument (including rules, regulations or bi-laws) made under an Act or under such an Ordinance;
and includes an enactment as amended by another enactment.
The instrument setting out the Rules is in fact delegated or subordinate legislation. It is, as Professor Dennis Pearce and Stephen Argument state in their text, Delegated Legislation in Australia (2nd ed, 1999) legislation made by a non-parliamentary body, acting pursuant to an Act of Parliament. The empowering provision of course is s. 99L of the National Health Act. At [1.7] the learned authors refer to the nomenclature of delegated legislation and state:
The term ‘rule’ is generally used for legislation specifying procedural formalities, particularly the procedures relating to the conduct of actions in the courts.
The Rules are nevertheless stated to be a disallowable instrument for the purposes of s. 46A of the Acts Interpretation Act 1901 (the Acts Interpretation Act)(s. 99L(2)). Although s. 46A of the Acts Interpretation Act has been repealed, Section 6(d)(i) of the Legislative Instruments Act 2003 declares instruments made in the exercise of the power delegated by the Parliament before, on or after the commencing day (1 January 2005) to be legislative instruments under the Legislative Instruments Act 2003.
A problem which sometimes arises with subordinate legislation is that it may be repugnant to the Act under which it is made or to the general law, which embodies both other Acts and the common law. Such repugnancy may result in the subordinate legislation being held to be invalid (see for example the High Court of Australia decision (Brennan CJ, Dawson, Toohey, Gaudron, McHugh, Gummow and Kirby JJ) in De L v Director General, New South Wales Department of Community Services and Another (1997) 143 ALR 171 at 180 – 181).
However, in my opinion, there is no inconsistency between the rule set out in s. 9 of the Rules and the procedural powers of the Tribunal set out in s. 33 of the AAT Act. In fact, in my opinion the requirement set out in s. 9(b) of the Rules may be met by the Tribunal making directions in accordance with s. 33(2A). It provides:
(2A) Without limiting the operation of this section, a direction as to the procedure to be followed at or in connection with the hearing of a proceeding before the Tribunal may:
(a)require any person who is a party to the proceeding to provide further information in relation to the proceeding; or
(b)require the person who made the decision to provide a statement of the grounds on which the application will be resisted at the hearing; or
(c)require any person who is a party to the proceeding to provide a statement of matters or contentions upon which reliance is intended to be placed at the hearing.
For the sake of completeness, I should also mention that the Tribunal may exercise powers under s. 37(2) requiring a person to lodge with the Tribunal other documents which may be relevant to the review of the decision the Tribunal is required to make; and it may issue a Summons pursuant to s. 40(1A) requiring a person to appear before the Tribunal to produce any books, documents or things in the custody or control of the person named in the summons.
On 30 January 2014 the Tribunal (Deputy President JW Constance) made amended directions to the effect that:
(a)on or before 7 February 2014 Ms Walkerden lodge with the Tribunal and serve on the other parties a statement of evidence proposed to be given by any witness intended to be called at the hearing; and
(b)on or before 17 February 2014 Mr Sanghvi lodge with the Tribunal and serve on the other parties a statement of evidence proposed to be given by him at the hearing, a statement of evidence proposed given by each other witness to be called and copies of all reports, records and other documents which he intended to rely at the hearing.
As far as Wodonga Pharmacy is concerned, the Tribunal (Conference Registrar L Carins) made an amended direction on 2 December 2013 which required it to lodge with the Tribunal and serve on the other parties a statement of evidence proposed to be given by it at the hearing; a statement of evidence proposed to be given by each other witness to be called at the hearing; and copies of all reports records and other documents on which the applicant intended to rely at the hearing on or before 6 December 2013. Although those directions stated: In issuing these directions the Tribunal is not requesting the information in accordance with section 9 of the National Health (Australian Community Pharmacy Authority Rules) Determination 2011, as I understand that statement, it simply clarifies the fact that the directions were made pursuant to s. 33 (2A) of the AAT Act.
In his opening address, Mr Favell sought to put into evidence:
(a)a statement made by Mr Brett Howle dated 16 December 2013;
(b)a statement made by Mr Brett Howle dated 2 May 2014;
(c)the statement made by Mr Stephen Burke dated 6 December 2013;
(d)an annexure (BH 1) to Mr Howle’s 2 May 2014 statement completed on 7 May 2014; and
(e)a number of receipts obtained by making purchases from shops in the White Box Rise Shopping Centre.
Clearly, all of the above documents were sought to be admitted into evidence outside the timeframe set down in the amended directions made by the Tribunal on 2 December 2013. The first question which arises is whether, in those circumstances, s. 9(b) of the Rules is satisfied so that I am permitted to consider that information.
In my opinion, s. 9(b) of the Rules can be satisfied by the Tribunal varying the directions previously made. The Tribunal may do so pursuant to the power set out in s. 33(3) of the AAT Act. There seems to be no reason why the Tribunal needs to vary former directions in a formal manner as, by simply allowing that material into evidence, it effectively varies the directions previously made. However, mindful of the need to ensure procedural fairness is provided to all parties, where evidentiary material is sought to be lodged at a very late stage, for example at the hearing itself, should any other party claim that it would cause them prejudice, it seems to me that it ought not be allowed into evidence unless there is good reason why that material was produced at the time it was produced, and that it is critical to a party’s case. In those circumstances, it may be appropriate to adjourn the hearing to enable other parties to properly deal with that evidence.
Except for objections raised by Mr Hoyne in respect of Mr Howle’s statement dated
16 December 2013, which went to the content of that statement rather than its admission into evidence on the grounds that it was outside the directions made by the Tribunal, there was no objection on the grounds of prejudice to either of Mr Howle’s statements or the completed annexure. However, Mr Hoyne objected to receipts being admitted into evidence which were given to him on the morning of the first hearing. I upheld that objection on the grounds that the admission of those receipts into evidence was prejudicial to the other parties as they had not had the opportunity to test that evidence and, at best, it was of limited value. There was no objection to the admission of Mr Burke’s statement into evidence on the grounds that it was outside the time for lodging that statement according to the amended directions. I allowed that statement to be admitted into evidence.
NEW PHARMACY IN A SMALL SHOPPING CENTRE
Schedule 1 of the Rules sets out the kinds of applications which may be made and the requirements which relate to those applications. Part 2, which deals with applications not involving the cancellation of an existing approval, sets out different kinds of applications including, at Item 133, a new pharmacy in a facility (small shopping centre). This is the nature of the application made by Wodonga Pharmacy. Item 133 sets out the requirements as follows:
1The proposed premises are in a small shopping centre.
2The proposed premises are at least 500 m, in a straight line, from the nearest approved premises.
3There are no approved premises in the small shopping centre.
The expression small shopping centre is defined in section 5 of the Rules in the following way:
small shopping centre means a shopping centre that:
(a)has a gross leasable area of at least 5 000 m 2; and
(b)contains a supermarket that occupies a gross leasable area of at least 2 500 m 2; and
(c)contains at least 15 other commercial establishments; and
(d)has customer parking facilities.
The expression shopping centre is also defined in section 5 of the Rules as follows:
shopping centre means a group of shops and associated facilities that is under single management.
The meaning of the expression single management is defined in s. 5 of the Rules as follows:
single management, for a shopping centre or medical centre:
(a)means management of the centre as a whole:
(i) by one manager, or by 2 or more managers working cooperatively under an agreement; and
(ii) to encourage the use of the centre as a single integrated facility; and
(iii) including management of the following matters for the centre:
(A)security;
(B)pedestrian and vehicular access;
(C)cleaning;
(D)signage;
(E)trading hours;
(F)marketing;
(G)maintenance of buildings, common areas and utilities; and
(b)does not include independent owners or tenants of premises in a building or centre that cooperate:
(i) on particular occasions; or
(ii) in relation to some, but not all, of the matters mentioned in subparagraph (a) (iii) in relation to the building or centre.
The meaning of the expression commercial establishment is set out in section 7 of the Rules. It provides:
7 Meaning of commercial establishment
(1)In this Determination, subject to subsection (2):
commercial establishment means premises:
(a)in a shopping centre; and
(b)occupied by, or likely to be occupied by:
(i) a shop where goods, food or beverages are sold retail; or
(ii) a bar, cafe, restaurant or takeaway; or
(iii) a business that provides services to customers.
(2)For subsection (1), commercial establishment does not include:
(a)commercial office space; or
(b)premises occupied by an accountant, analyst, architect, engineer, lawyer, planner, stockbroker or surveyor, unless the premises are occupied as a shopfront; or
(c)premises occupied by a real estate agent or an insurance company, agent or broker, unless the premises are occupied as a shopfront for the real estate agent or insurance company; or
(d)a council office or government or statutory corporation office or shopfront, other than an Australia Post shopfront, an Australian Broadcasting Corporation shop or a Medicare or Centrelink shopfront; or
(e)a car wash or car parking facilities; or
(f)a library; or
(g)a kindergarten or preschool; or
(h)a child care centre or child minding facility, unless the centre or facility is regularly available for use by customers of the shopping centre while the customers are at the shopping centre; or
(i)a store room or storage area; or
(j)a temporary selling point; or
(k)an automatic teller machine or automatic dispensing machine.
(3)In working out the number of commercial establishments in a shopping centre:
(a)2 or more commercial establishments occupied by, or likely to be occupied by, one business are counted as one commercial establishment; and
(b)the maximum number of shopfronts for accountants, analysts, architects, engineers, lawyers, planners, stockbrokers or surveyors that can be counted towards the total number of commercial establishments in a shopping centre is:
(i) for a small shopping centre – one; or
(ii) for a large shopping centre – 2.
Wodonga Pharmacy’s application for approval to supply pharmaceutical benefits at the particular premises, which was lodged on 17 June 2013, was said to be an application under Item 133 of the Rules. It proposed to trade under the name United Discount Chemists Wodonga.
The starting point of this analysis must be the construction of Item 133 of the Rules. There was no issue and it was accepted that the proposed premises was at least 500 m in a straight line from the nearest approved premises and there were no approved premises in the White Box Rise Shopping Centre. The only matter in issue was whether the proposed premises are in a small shopping centre.
To answer that question, I need first to examine the buildings and facilities said to constitute the White Box Rise Shopping Centre in order to determine whether they satisfy the definition of shopping centre set out in the Rules. That definition describes a shopping centre as a group of shops and associated facilities under single management.
I had the benefit of a view which was conducted on the first hearing day. I also had in evidence plans of the entire area where the shopping centre is said to be located. Unlike many suburban shopping centres in Melbourne, the shops in the White Box Rise Shopping Centre are not all housed under the one roof. The Woolworths supermarket and a number of shops are housed in one structure separated by an open mall area. There is a second smaller structure adjacent to the large structure which houses what appear to be three discrete premises. There is a large car park area adjacent to both main structures which is clearly designed to service all of the commercial facilities on that site. Also, immediately adjacent to the building housing the supermarket is a Caltex petrol station.
Mr Howle, who described himself as the Asset Manager and Leasing Agent for Shopping Centres Australasia Property Group RE Ltd (SCA), testified that SCA became the owner of White Box Rise Shopping Centre on or about 16 December 2012. He described the area of the three structures I have referred to in [47] as being 4550 m², 418 m² and 80 m² respectively. That is, a total area of 5048 m². Mr Howle testified that SCA treated all of the buildings as part of the shopping centre. He also said that while there was no on-site shopping centre manager at the shopping centre, Jones Lang La Salle (JLL) acted as SCA’s agent at the Shopping Centre. In his second witness statement Mr Howle said that SCA treated all of the buildings as part of the shopping centre because each building is located on the land which is one parcel; there were no fences or walls between the buildings enabling free access between the tenancies; the premises of each tenancy is owned by SCA and managed by JLL on behalf of SCA; and the buildings share the same road access and car-parking facilities.
In his closing submissions Mr Hoyne was critical of the fact that Wodonga Pharmacy produced no evidence whatsoever that the single manager managed the centre as a whole to encourage the use of the centre as a single integrated facility hence satisfying the requirement under that definition in (a) (ii). He submitted this was particularly relevant as far as the Caltex service station and the medical centre and pharmacy were concerned.
While I agree with Mr Hoyne’s submission that there was no evidence of managing the centre as a whole to encourage the use of it as a single integrated facility, I do not agree that is fatal to establishing that the proposed premises is in a shopping centre. In my opinion, the matters set out in (a) (ii) may become significant where the shopping centre is managed by two or more managers working under an agreement. It is less significant where the entire shopping centre is managed by one manager. Unless there was evidence to the contrary, in such a case it is logically in the interests of the manager to encourage the use of the centre as a single integrated facility. There was no evidence to the contrary.
Furthermore, the evidence of Mr Howle was not controverted in any significant way. I find that the White Box Rise Shopping Centre satisfies the definition of shopping centre in s. 5 of the Rules, being a group of shops and associated facilities under single management.
The next question which needs be answered is whether the White Box Rise Shopping Centre satisfies the definition of small shopping centre. To do so, it must meet each of the four requirements set out under the definition. There was no dispute and ACPA accepted that the Woolworths supermarket occupied a gross leasable area in excess of 2500 m² and that the shopping centre had customer parking facilities. However, the remaining two requirements were contested.
Gross leasable area of at least 5000 m²
This requirement can only be met if the Caltex service station is included as part of the shopping centre. Without it, according to Mr Howle, the gross leasable area would be 4968 m². For the purposes of this analysis, I have not taken into consideration whether the Caltex service station and the Woolworths supermarket should be regarded as one commercial establishment. I deal with that subsequently.
The first thing to note about the requirements for a shopping centre to meet the definition of small shopping centre is that the four requirements set out under that definition are cumulative. In other words, for the Caltex service station to be included as part of the shopping centre, it must also fall within the description commercial establishment, which is also a defined term.
To fit the description of commercial establishment in s. 7 of the Rules, the service station must be capable of being properly described as premises in a shopping centre. To fit that description, it must be capable of being properly described as a shop or an associated facility which is under the management of the same manager which is managing all of the shops and associated facilities in that centre.
Given that I have formed the view that to be in a shopping centre, the commercial establishment need not be under a single roof but may form part of a close-knit group of premises sharing car parking facilities, and that the uncontroverted evidence of
Mr Howle was that the service station was under the same management as the remainder of the commercial establishments in the White Box Rise Shopping Centre, I find that the Caltex service station is in a shopping centre.In addition to the above, to satisfy the definition of commercial establishment, it must be premises occupied by or likely to be occupied by a shop where goods, food or beverages are sold retail; a bar, cafe, restaurant or takeaway; or a business that provides services to customers. Although I did not have evidence of precisely the activities conducted at the service station, as Mr Hoyne said in his closing submissions, it is well understood that Caltex service stations are owned by Woolworths and it is common knowledge that in addition to selling petrol, service stations sell other goods, many of which may also be found in a Woolworths store.
In my opinion, it is also significant that section 7(2) of the Rules expressly excludes from the definition of commercial establishment a number of other commercial enterprises which might ordinarily fall under that definition. For example, a car wash or car parking facility is excluded. It seems to me that if it was intended that a service station not fall within the definition, it would have been expressly excluded. It has not.
For the reasons I have expressed above, I find that the Caltex service station is a commercial establishment in the White Box Rise Shopping Centre. It follows that the White Box Rise Shopping Centre satisfies the first element of the definition of small shopping centre in that it has a gross leasable area of at least 5000 m².
At least 15 other commercial establishments
According to Wodonga Pharmacy, there are 18 tenancies in the White Box Rise Shopping Centre, excluding the Woolworths supermarket, which are relevant. Mr Howle identified those tenancies in an annexure to his witness statement made on 2 May 2014, and subsequently he completed an annexure which was taken into evidence indicating that each of those premises were currently occupied. They are:
1Bar Sushi
2Hotbake
3DVD Warehouse
4Dorevitch Pathology
5United Medical Centre
6Wodonga Pharmacy
7BWS Liquor
8Harry’s Espresso
9Sprinkles Ice Cream Parlour
10Harry’s Pizza Palace
11Crav’N Dine In And Take Away
12Yor Medispa
13Hume Building Society
14Funky Cutz
15Cubano Facewear
16Discount Cosmetics Clearance Centre
17The Reject Shop
18Woolworths Service Station
Before entering upon a detailed analysis of the above establishments for the purposes of determining whether they fit the definition of commercial establishment in the Rules, I should deal with a preliminary issue raised by Mr Hoyne. In fact, as I understood
Mr Hoyne, there were two parts to his preliminary issue. The first part was that an applicant in the circumstances of Wodonga Pharmacy bears an evidential onus, that is, an onus to bring forward material which supports its application so that there was proper material before the Tribunal to enable it to lawfully determine the matter. The second part was a reliance on the so-called rule in Jones v Dunkel (1959) 101 CLR 298.
In order to deal with the submissions made by Mr Hoyne, I first need to examine precisely what the statutory provisions state about the application itself. ACPA is required to make its recommendation having regard to the Rules (s. 99L of the National Health Act). Part 2 of the Rules deals with recommendations by ACPA. In respect of new premises such as the one in question in this matter, ss. 10 and 11 of the Rules relevantly provide:
10 When Authority must recommend approval of applicant
The Authority must recommend that an applicant be approved under section 90 of the Act in relation to particular premises if:
(a)…
(b)for any other application:
(i) the application states that it is one of the kinds mentioned in column 2 of an item in Part 2 of Schedule 1; and
(ii) all of the requirements set out in column 3 of that item are met; and
(iii) all the requirements set out in Schedule 2 are met.
11 When Authority must recommend applicant not be approved
The Authority must recommend that an applicant not be approved under section 90 of the Act in relation to particular premises if a requirement, under paragraph 10 (a) or (b), that applies in relation to the application is not met.
There can be no dispute that, for the purposes of this review, ss. 10 and 11 apply equally to the Tribunal. What is also clear is that those sections of the Rules say nothing whatsoever about an obligation or onus, or place a requirement on an applicant to satisfy ACPA that it meets the requirements set out in Part 2 Schedule 2.
Such a situation was dealt with by the Full Court of the Federal Court (Woodward, Northrop and Jenkinson JJ) in McDonald v Director-General of Social Security (1984) 6 ALD 6. That case dealt with the cancellation of an invalid pension held by
Mr McDonald on the ground that he was not permanently incapacitated for work. The question before the primary decision maker and the Tribunal was whether there was an evidential onus of changed circumstances before cancelling Mr MacDonald’s pension. Referring to the onus of proof, Woodward J said, at 9:
The first point to be made is that the onus (or burden) of proof is a common law concept, developed with some difficulty over many years, to provide answers to certain practical problems of litigation between parties in a court of law. One of the chief difficulties of the concept has been the necessity to distinguish between its so-called “legal” and “evidential” aspects. The concept is concerned with matters such as the order of presentation of evidence and the decision a court should give when it is left in a state of uncertainty by the evidence on a particular issue.
The use outside courts of law of the legal rules governing this part of the law of evidence should be approached with great caution. This is particularly true of an administrative tribunal which, by its statute “is not bound by the rules of evidence but may inform itself on any matter in such manner as it thinks appropriate” (AAT Act s 33 (1)(c)).
Such a tribunal will still have to determine practical problems such as the sequence of receiving evidence and what to do if it is unable to reach a clear conclusion on an issue, but it is more likely to find the answer to such questions in the statutes under which it is operating, or in considerations of natural justice or common sense, than in the technical rules relating to onus of proof developed by the courts. However these may be of assistance in some cases where the legislation is silent.
Woodward J said there was certainly no legal onus of proof arising in the Tribunal unless the Act which the principal decision maker is applying places a requirement or onus on one of the parties to an issue to establish a particular state of facts on which the decision would be based. If that were so, his Honour said that the same requirement or onus would apply to the Tribunal. Therefore, in the case before him, where no such requirement was stated, his Honour said, at 10:
Obviously someone must set in motion the process which establishes the entitlement, and that will normally be done by or on behalf of the person concerned, but the Act does not create a legal onus to prove all relevant aspects of a claim of permanent incapacity such, for example, as the state of the labour market for disabled persons. Certainly if no material is available to the decision-maker, or if available material leaves the decision-maker quite uncertain whether the person is permanently incapacitated, the claim must fail. But I think it would be artificial to describe this situation in terms of the legal onus of proof.
Northrop J agreed with what Woodward J said regarding onus of proof and added this, at page 18:
In one sense it is true to say that a claimant has an onus of proof, but the use of that expression obscures the true nature of the duty imposed by the Director-General, or his delegate, to determine the matter. A pension is paid only so long as the pensioner is qualified to receive the pension. The rate of pension may vary depending upon what facts are known to the Director-General or his delegate. If a change in circumstances occurs, it is unreal to suggest that the Director-General, or his delegate, has an onus of proof, whether evidentiary or not, to be satisfied before varying a pension entitlement. The ultimate question is whether the person is qualified to receive the pension and, if so, at what rate. These questions must be decided after a consideration of all the material before the Director-General, or his delegate, when the decisions are made.…
Similar principles apply to proceedings before the AAT.
In my opinion, the Rules in question in this matter do not place an evidentiary or legal onus of any kind on an applicant for approval to supply pharmaceutical benefits in particular premises. In fact, they do not compel an applicant to produce anything at all. Therefore, I reject Mr Hoyne’s submission that there is an evidential onus on Wodonga Pharmacy in this case to establish the fact that there are 15 other commercial establishments in the White Box Rise Shopping Centre.
The second point made by Mr Hoyne, regarding the Jones v Dunkel adverse inference, arose because, according to Mr Hoyne, there was a lack of material evidence which the applicant could have given but did not. He drew my attention to the Tribunal decision (Deputy President S A Forgie) in Kumar and Minister for Immigration and Citizenship (2009) 107 ALD 178 where the Deputy President examined in some detail whether the so-called rule in Jones v Dunkel applied to the Tribunal. Deputy President Forgie said, at 213 – 214:
It follows from this view that the rule in Jones has relevance in tribunal proceedings. It is directed to assessing the probity or otherwise of the fact that a party has not produced certain material in certain circumstances. One aspect of procedural fairness requires the tribunal to act on logically probative material. Therefore the rule in Jones is relevant.…
Even if the tribunal is regarded as having inquisitorial powers of a sort that go beyond that described by the Full Court in Grant v Repatriation Commission; Grant v Repatriation Commission referred to by Merkel J in VHAU of 2002, it would seem to me that a failure to produce material in similar circumstances would also be probative. It would also allow an inference to be drawn that, if produced, the material would not support his or her claim. If the material that has not been produced is in the party’s control or requires some action by the party, the tools that the tribunal has been given to fulfil any inquisitorial functions it has are dependent upon that party and his or her compliance with any direction given by the tribunal… If there is no rational or reasonable explanation for the failure, why should it not draw the inference permitted by Jones in those circumstances? If there is no reason why it should not in those circumstances, why should the tribunal have to use its powers to attempt to obtain material before drawing the inference in circumstances in which the party has not offered a reasonable and rational explanation for refusing to produce it and makes clear that he or she will not do so?
While I have no doubt that the so-called rule in Jones v Dunkel may apply to matters before the Tribunal, I believe some care needs to be taken in its application. Before examining whether the so-called rule should be applied to the circumstances and evidence of this case, it is helpful to state the rule as expressed in more recent times, as did Buchanan JA in R v Lao (2002) 5 VR 129, where his Honour said, at 139:
… when a party appears to be able to prove the true facts and fails to do so, in the absence of explanation, an inference which is open on the facts that is favourable to the other party may be more readily drawn.
It is important to note that the rule may be invoked only if:
(a)sufficient evidence has been produced by a party (any party to a proceeding before the Tribunal) to enable a reasonable inference to be drawn from that evidence;
(b)the party against whom the evidence stands is apparently able to rebut that evidence and hence the inference by calling other witnesses or producing documents to refute that evidence;
(c)the party against whom the evidence stands chooses not to lead that evidence despite witnesses or documents apparently being available; and
(d)the party against whom the evidence stands does not provide an explanation for the failure to call those witnesses or to put into evidence documents; then
a rational inference may be drawn that the evidence which could have been produced by the party against whom the inference is sought to be drawn would not have helped that party’s case.
What is clear to me in this case is that the legislation which I am required to apply, in particular the Rules and the matters set out at Item 133, do not state that there is a requirement placed on an applicant, or any other party for that matter, to establish the requirements in Item 133. It simply states that ACPA must recommend that an application be approved if all of the requirements set out in Item 133 are met. Whether or not those requirements are met is plainly up to the applicant and any other parties who may be opposed to the application. Just how they establish the presence or absence of the requirements is simply up to them. An applicant either succeeds or fails depending upon whether the preponderance of the evidence permits the Tribunal to conclude that the requirements have been met. The Tribunal reaches a conclusion by making findings of fact based on the evidentiary material before it, and that may include the drawing of inferences from that evidentiary material. If the Tribunal seeks to draw inferences, it needs to be cautious, as was explained by the Full Court of the Federal Court (Greenwood, Tracey and Buchanan JJ), in Tisdall v Webber (2011) 193 FCR 260. Buchanan JA said, at 297:
It is important to bear in mind also that the inferential process is not one where speculation, guesswork or mere assumption is accommodated. So far as the work of courts is concerned, where the application of a judicial method is expected, the process of drawing an inference from available facts is not to be equated with conjecture, surmise or guesswork. The arbitrary selection of one possibility over others from an available number of possibilities by such a method is not merely lacking in logic; it fails to conform to the necessity that inferences be drawn as matters of legitimate deduction, based on probative values.
In Bell IXL Investments Ltd v Life Therapeutics Ltd (2008) 68 ACSR 154 Middleton J said (at [14]):
In considering the material before the Court, the trier of fact must be careful to distinguish between inference and conjecture. A conjecture may be plausible, but it is effectively still a mere guess. An inference is a deduction from the evidence, and if reasonable can be treated as part of the legal proof to be considered in making a factual determination in any particular proceeding. Whilst sometimes it may be difficult to distinguish between conjecture and inference, nevertheless the distinction is an important one.
His Honour's observations, with respect, state a fundamental principle which is authoritatively established but which is not always observed (see also Luxton v Vines (1952) 85 CLR 352 at 358, quoting Bradshaw v McEwans Pty Ltd (1951) 217 ALR 1).
Therefore, whether or not I should apply the so-called rule in Jones v Dunkel in this case will depend on the probative value of Mr Sanghvi’s evidence. I will deal with that presently.
Out of the 18 tenancies where it is said commercial establishments operated (excluding Woolworths), 7 were not in dispute. Mr Favell conveniently set out in his written submissions those establishments in dispute in accordance with the nature of the dispute identified by the other parties. In addition to those, Mr Hoyne, in his closing submissions, identified concern that Dorevitch Pathology could be described as a temporary selling point or that it may be part of the medical centre resulting in two businesses operating from the same premises. He also submitted that Woolworths and the Caltex service station should be counted as one commercial establishment. I have already dealt with whether the Caltex service station was part of the shopping centre. The remainder are as follows:
1.Temporary selling point
DVD Warehouse
Discount Cosmetics Clearance Centre
Cubano Facewear
2.In or likely to be in occupation
Dorevitch Pathology
3.Separate establishments
Harry’s Espresso and Harry’s Pizza Palace
Sprinkle’s Ice Cream Parlour and Crav’N Dine In and Take Away
Woolworths and Caltex service station
Temporary selling points
Section 7(2) of the Rules expressly excludes from the definition of commercial establishment certain premises which would likely fall within that description as it is understood in its ordinary sense. Amongst those is a temporary selling point. That expression is not defined in the Rules and therefore, as Mr Favell submitted, it should be given its ordinary and natural meaning in the context in which it appears in the Rules.
Mr Favell consulted The Shorter Oxford Dictionary and set out various definitions of the words making up the phrase in question. With respect to Mr Favell, that is not the way to approach the statutory construction of a phrase. The High Court of Australia (Brennan CJ, Dawson, Toohey, Gaudron and McHugh JJ) in Collector of Customs v Agfa-Gevaert Limited (1996) 186 CLR 389 said, at 396 – 397:
The meaning attributed to individual words in a phrase ultimately dictates the effect or construction that one gives to the phrase when taken as a whole and the approach that one adopts in determining the meaning of the individual words of that phrase is bound up in the syntactical construction of the phrase in question. In R v Brown (31), a recent House of Lords decision, Lord Hoffmann said:
“The fallacy in the Crown’s argument is, I think, one common among lawyers, namely to treat the words of an English sentence as building blocks whose meaning cannot be affected by the rest of the sentence… This is not the way language works. The unit of communication by means of language is the sentence and not the parts of which it is composed. The significance of individual words is affected by other words and the syntax of the whole.”
More recently, the correct approach to the statutory construction of a phrase was dealt with by the Full Court of the Federal Court of Australia (Emmett, Stone and Perram JJ) in St George Bank Ltd v Federal Commissioner of Taxation (2009) 176 FCR 424 where Stone J said, at 431:
The long-standing tension in the construction of statutes (and other legal documents) between giving words their “literal” meaning and construing them in the context of the document in which they appear is well-known. However, this way of articulating the problem is somewhat misleading. While words may have a stand-alone meaning or meanings which may be found in a dictionary, generally oral or verbal communication does not proceed by way of individual words by but by language; by words used in conjunction with one another to express propositions or sentiments or otherwise communicate meaning. The task of a court in construing a statute is to construe the language of the statute, not the individual words.
Mr Favell also referred me to the Explanatory Statement which accompanied the making of the Rules. In respect of s. 7 of the Rules, the Explanatory Statement said:
Section 7 makes clear that the meaning of “commercial establishment” is intended to include those premises from which businesses will provide goods and/or services to consumers. It is intended that these types of businesses would attract consumers to a shopping centre.
The Explanatory Statement then goes on to deal with s. 7(2) of the Rules. It states that
s. 7(2) specifies the types of premises which the term “commercial establishment” does not include. It then provides a series of examples which essentially enumerate the descriptions set out in the subsection, including this statement referring to temporary selling points:
… temporary selling points such as those used for sales or promotions;…
In his written submissions, Mr Favell said that a good example of a temporary selling point was a desk in a shopping centre where raffle tickets raising money for Surf Lifesaving are sold.
In his oral submissions, Mr Hoyne submitted that if an establishment had four walls, a roof etc, the premises themselves will be permanent. He pointed out that the definition of commercial establishment in the Rules expressly refers to premises. However,
Mr Hoyne then submitted that the legislation requires one to ask whether the selling point within the premises is temporary or permanent. With respect to Mr Hoyne, this appears to fall into the same error as did Mr Favell in looking at individual words within the phrase without examining a phrase as a whole and in context.
It is correct to say, as does Mr Hoyne, that the opening statement of the definition of the expression commercial establishment states: means premises:… It then goes on to provide for the location of those premises and the nature of the business which occupies or is likely to occupy those premises. The definition then sets out those premises which might meet the requirements set out in s. 7(1) of the Rules, but which are expressly excluded from the definition. Again, when one looks at those exclusions, it is plain that, perhaps except for the reference to an automatic teller machine or automatic dispensing machine, they are all offices, premises or structures such as a storage room or area. Reference is made to the occupant of those premises in some cases while in others that is self-evident from the nature of the activity described.
The focus in both subsections (1) and (2) is on premises where a variety of business activities may take place. It is, in my opinion, incorrect to focus on whether the business conducted at particular premises can properly be described as temporary. That is because the subsections deal with premises having particular characteristics. The focus should be on the premises, and whether that structure can be described as temporary or permanent. That approach also appears to be consistent with the example given in the Explanatory Statement. The fact that the phrase has the words selling point added to it simply emphasises that the definition of commercial establishment is concerned with premises which satisfy the requirements set out in s. 7(1)(b) of the Rules. It is a reference to those premises where the requisite business activity is conducted or likely to be conducted but which are expressly excluded. That construction, in my opinion, accords with what was said by the High Court in the Agfa-Gevaert case and the Full Court in the St George Bank case.
Bearing that construction in mind, I cannot accept Mr Hoyne’s submission that the issue which arises is whether the selling point within the premises is temporary or permanent. With respect, such a disaggregation of the words used in the composite phrase is precisely what the Agfa-Gevaert and St George Bank cases counselled against. The expression selling point, understood in the context of s. 7(1) of the Rules, is more likely to have been used as a broad generic description to include shops, a bar, cafe, restaurant or takeaway, or a business which provides services to customers. It follows that I disagree with Mr Hoyne’s submission that in determining whether the Discount Cosmetics Clearance Centre and Cubano Facewear satisfy the meaning of commercial establishment in s. 7 of the Rules, one examines the permanency or otherwise of the commercial operation conducted from the premises occupied by those entities. The fact that the fit-out and signage in those two premises is minimal and may well give rise to the business being described as having a temporary appearance, does not, in my opinion, make those establishments fall within the description a temporary selling point.
I find further support for the construction of s. 7 of the Rules from the fact that commercial establishment means premises occupied by, or likely to be occupied by the various types of business operations described therein. In other words, the premises may be vacant but nevertheless fit within the definition. It may be that a business operated from one of the premises in the shopping centre is closing down. However, that would not result in that particular premises being excluded from the definition. That is not to say that the use of the word likely does not raise its own difficulties. Deputy President SA Forgie in Phillip Lobo and Department of Immigration and Citizenship [2011] AATA 705 canvassed the authorities which had considered the word likely. As her detailed analysis discloses, it is difficult to find consistency and it appears that its meaning has been very much coloured by the context in which it has arisen.
In Tillmanns Butcheries Pty Ltd v Australasian Meat Industry Employees’ Union and Others (1979) 27 ALR 367 the Full Court of the Federal Court (Bowen CJ, Evatt and Deane JJ), a trade practices case, was required to determine whether certain conduct had the likely effect of causing substantial loss or damage. Deane J said, at 382:
The conclusion which I have reached is that, in the context of s 45D(1), the preferable view is that the word ‘likely’ is not synonymous with “more likely than not” and that if relevant conduct is engaged in for the purposes of causing loss or damage to the business of the relevant corporation, it will suffice, for the purposes of the sub-section, if that conduct is, in the circumstances, such that there is a real chance or possibility that it will, if pursued, cause such loss or damage.
The Tillmanns Butcheries case was referred to by the High Court of Australia in Boughey v The Queen (1986) 161 CLR 10. Gibbs CJ said, at 14:
It is trite to say that the meaning of a word will be influenced by the context in which it appears. In my opinion the word ‘likely’ in ss. 156 and 157 of the Criminal Code Act means ‘probable’ and not ‘possible’. That is its natural meaning.
However, Mason, Wilson and Deane JJ said, when referring to Tillmanns Butcheries, at 21:
… apprehend to be its ordinary meaning, namely, to convey the notion of a substantial – a “real and not remote” – chance regardless of whether it is less or more than 50 per cent…
In an interlocutory decision dealing with the Trade Practices Act 1974, the Federal Court of Australia (Gummow J) in Poignand v NZI Securities Australia Ltd and Others (1992) 37 FCR 363 said, at 371:
The phrase ‘likely to’ is susceptible of various meanings, and takes its colour from the statutory context. It may indicate a degree of contingency falling short of probability.…
As matters stand on the present motion, I accept the submission by the applicant that there is a real chance or possibility that the unit holders are likely to suffer loss or damage by the conduct complained of against the respondents. It may be that some lesser degree of contingency will suffice for s 87(1A) and for s 45(D). But that is a question for another day.
In this case, use of the word likely in the context in which it appears in s. 7 (1) of the Rules, appears to me to have been used to convey the notion of a substantial and a real and not remote chance that the premises will be occupied by the kind of businesses described therein. That is because, given the evolving nature of a shopping centre; the fact that the Rules are concerned with new shopping centres as well as existing shopping centres; that no timeframe is envisaged by the Rules within which the premises are required to be occupied; and that it is always likely in new shopping centres that they will open with vacant tenancies, it could not have been intended to convey the stronger meaning, that is, probable or more likely than not.
Although Mr Hoyne submitted that I should look at the long-term business intentions of the entities in question in order to determine whether they were of a temporary or permanent nature, with respect, even if that were possible in a practical sense, which I seriously doubt, there is no reason why the entities currently operating a business from those premises would suggest otherwise than their intentions were to remain permanently. I could of course examine the leases held by those entities but, once again, I cannot see how that would answer the question. In fact, to satisfy the definition of commercial establishment in s. 7 of the Rules, the entity merely needs to occupy the premises or be likely to occupy it if it is not already in occupation. That may be by way of licence, sublease or some other means. It may be a short-term or long-term arrangement. Either way, it does not necessarily disclose the entity’s intention. Furthermore, even if one of these businesses does not intend to stay if the application were approved, there is no evidence before me that suggests the premises would not then be occupied by another business. Because the applicant claimed that all of the available premises in the shopping centre were occupied, no evidence was led regarding the intention of any other businesses that might be interested in occupation should an existing tenant leave. To fall within the definition all that is required is occupation or likely occupation.
Mr Hoyne also attempted to make much of the fact that there was a commercial link between Discount Cosmetics Clearance Centre, Cubano Facewear and the Scaffidi Group, which appears to be behind United Discount Chemists. The application for approval in this case was made on behalf of Wodonga Pharmacy by Mr Salvatore Scaffidi-Muta. I had in evidence a current company extract for United Discount Chemists Pty Ltd which discloses Mr Scaffidi-Muta is the sole director and secretary of that company. I also had in evidence details from the ASIC business names register for Discount Cosmetics Clearance Centre and Cubano Facewear. Both of those entities list their address for service of documents as 7 Comley Street Export Park SA 5950. That address is also listed as the principal place of business for United Discount Chemists Pty Ltd.
Having put into evidence materials disclosing the connection between Wodonga Pharmacy and both Discount Cosmetics Clearance Centre and Cubano Facewear,
Mr Hoyne submitted that the inference I should draw from that evidence is that were the application by Wodonga Pharmacy granted, those two businesses would be shut down. In other words, those businesses were operating on a temporary basis to satisfy the requirement for 15 commercial establishments in the shopping centre for the purposes of its application. Furthermore, Mr Hoyne submitted that Mr Scaffidi-Muta could have been called to clarify whether it was intended those two entities would continue to operate and, the failure of Wodonga Pharmacy to call him permitted an adverse inference to be drawn in accordance with Jones v Dunkel.
I have no doubt that Mr Hoyne would be correct about that if it were also correct that to satisfy the requirements in s. 7 of the Rules, the evidence needed to disclose, on the balance of probabilities, that those businesses were not being operated on a temporary basis. However, as I have attempted to explain above, I do not believe that is the correct test. In any event, the Rules say nothing about whether the business activities conducted at the relevant premises need be ongoing or that an applicant needs to produce evidence to establish that fact.
Because of the view I have taken of the construction of s. 7 of the Rules, I find that Discount Cosmetics Clearance Centre and Cubano Facewear are not temporary selling points. They are commercial establishments in accordance with the meaning given to that expression in s. 7 of the Rules because they conduct their business activities from premises in a shopping centre which are shops where goods are sold retail.
The entity which describes itself as DVD Warehouse is a little more difficult to categorise. It operates from a kiosk in the small mall area between the supermarket and the other shops under that roof. Although the word premises has a somewhat fluid meaning, and it is not defined in the Rules, for the present purposes it seems to me satisfactory to adopt its ordinary meaning which is a building or structure and its surrounds. The kiosk appears to be constructed from timber with shelving on its outside and a reasonably large built-in sign at its front. It has access to power via a cable which runs along the floor of the mall, for approximately 3 m to a power point in the floor. The cable is covered by masking tape, presumably to ensure that persons walking across it do not trip. The power point itself appears to rise from the floor in the mall area and it is covered by an advertising sign, again I presume for safety reasons. (T documents, pages 310-311) It occupies floor space in the shopping centre and, according to Mr Howle, was leased between 1 May 2013 and 30 April 2014. On expiry of the lease, the entity operating that business, Easel Holdings Pty Ltd, continued to occupy that space on a month to month tenancy.
While the kiosk housing the DVD Warehouse appears to have been constructed at minimal expense and has a rather plain appearance, it is nevertheless a structure occupying leasable floor space in the shopping centre. Furthermore, it appears to be occupied and goods appear to be sold or rented from the kiosk. While it may not have the permanent appearance of the other shops in the shopping centre which are partitioned structures within the large building or discrete shops in the second building, it would, in my opinion, be wrong to classify it as a temporary selling point. It is not a structure which can be readily folded up and put away or removed readily. It has a degree of permanency. I find that it satisfies the description of a commercial establishment for the purposes of s. 7 of the rules.
Occupied by or likely to be occupied by
It should be apparent from what I have said above that I find Dorevitch Pathology is not a temporary selling point. Whether or not the business is currently operating on a commercial basis is not to the point. It is housed in premises which form part of the shopping centre and which are likely to be occupied by a business which provides services to customers. The premises at present may be vacant and intending customers are apparently directed to the medical centre. Mr Hamish Heads, a local pharmacist, gave evidence that approximately 2 weeks prior to hearing this matter he took photographs of the premises which Dorevitch Pathology appears to occupy. That photograph discloses that the premises had a CLOSED sign on it indicating that it would be closed until further notice. Nevertheless, according to Mr Howle’s evidence, the premises are sublet to a company called Specialist Diagnostic Services Pty Ltd. The sublease commenced on 15 April 2013 for a term of three years. That is sufficient evidence to establish that the premises are likely to be occupied.
Although Mr Hoyne, in his written submissions, also submitted there was no evidence that a pharmacy business was or was likely to be in occupation in any part of the shopping centre, I did not understand him to be pursuing that submission in his closing remarks. If I am mistaken, I would find that there is clear evidence that a pharmacy business is likely to be in occupation in the shopping centre. I have already referred to the agreement for lease which Mr Howle said in evidence remained on foot. He also said that Wodonga Pharmacy was in possession of the premises prior to SCA becoming the owner of the White Box Rise Shopping Centre. In the course his cross-examination
Mr Howle was asked how he knew it was that Wodonga Pharmacy was occupying the premises which had signage referring to the pharmacy. He said: Because it was fitted out, ready for stock for a pharmacy.
Separate commercial establishments
Rule 7(3) sets out rules for working out the number of commercial establishments in a shopping centre. Of concern in this case is the Rule in subsection (3)(a) which provides that where two or more commercial establishments are occupied by or likely to be occupied by one business, they are counted as one commercial establishment.
Of particular concern was the meaning of the expression: occupied by, or likely to be occupied by, one business. I need to establish what is intended by the rule and, in particular, in this context, what is meant by one business.
The noun business has a variety of meanings. A brief glance at a dictionary will attest to that. As the Full Court of the Supreme Court of Victoria (Crockett, Murphy and Ormiston JJ) said in Pioneer Concrete Services Ltd and Another v Galli and Another [1985] V.R. 675, at 705: The word “business” frequently poses difficulties for the courts. In the context of Rule 7(3), it could be a reference to a business entity or to a business activity. It is not unusual when referring to the entity or to the activity to simply use the word “business”.
When considering the meaning of the words one business in the context in which they appear in the Rules, and applying a literal construction, the expression may appear to be a reference to a business entity. That is because the Rules refer to premises occupied by or likely to be occupied by one business. Also, Rule 7(1)(b)(iii) refers to premises occupied by, or likely to be occupied by a business. One might not ordinarily speak of a business activity as occupying or likely to occupy premises. However, s. 7(1) in fact refers to premises in a shopping centre occupied by, or likely to be occupied by a shop, a bar, cafe, restaurant or takeaway, or a business providing services to customers; each of them conducting particular business activities. When the expression one business in subsection (3)(a) is read in that context, that is, taking into account what is said in subsection (1), it becomes readily apparent that the expression is referring to the business activities described in that subsection. It is not a reference to a business entity.
If one then examines the Explanatory Statement accompanying the Rules, the following is said about s. 7 (3):
Paragraph (a) provides that multiple premises occupied (or likely to be occupied) by the same business are only counted as one commercial establishment. That is, each commercial establishment must be independent of another.
Example of how subsection 7(3)(a) operates:
If a mobile phone business operates (or is likely to operate) from Shop 12 on the ground floor of a shopping centre, and the same business also operates (or is likely to operate) from Kiosk 2C on the 2nd floor, this will only be considered to be one commercial establishment.
Alternatively, two separate coffee shops of the same company that are operated separately (by different franchisees) would be considered to be independent and therefore be counted as two commercial establishments.
Simplified, the first example refers to a mobile phone business operating from two discrete outlets. It makes no reference to a business entity but only to the business activity. The second example involves two discrete business operators conducting the same business activities from different outlets. However it commences with the word alternatively which appears to suggest that where the same business activities are carried on from two discrete establishments, they can nevertheless be independent provided that they are conducted by different business entities.
The problem is that neither of the examples deals with the matters in issue in this case. Here we have the same operator conducting two discrete business activities from two discrete outlets, albeit each outlet providing physical access to the other outlet. In these circumstances, it seems to me that the only way to make sense of the examples and s. 7 in its entirety is to determine the object or purpose of the Rule. The Acts Interpretation Act applies to legislative instruments made under enabling legislation (Legislative Instruments Act, s. 13). Section 15AA of the Acts Interpretation Act provides:
15AA Interpretation best achieving Act’s purpose or object
In interpreting a provision of an Act, the interpretation that would best achieve the purpose or object of the Act (whether or not that purpose or object is expressly stated in the Act) is to be preferred to each other interpretation.
Simply reading the rule set out in s. 7(3) does not assist in determining the purpose or object of the Rules. The Explanatory Statement accompanying the Rules states that the Department of Health and Ageing commissioned a review of the then existing rules in early 2010. That review was conducted by Urbis Pty Ltd. Following the publishing of the Urbis report in June 2010, the Department consulted with the Pharmacy Guild of Australia, ACPA and Medicare Australia as a result of which the current Rules were formulated.
The Urbis report (Review of the Pharmacy Location Rules under the Fourth Community Pharmacy Agreement), in its introduction, sets out the objectives of the Rules under the Fourth Community Pharmacy Agreement as follows:
·all Australians have access to PBS medicines
·existence of a commercially viable and sustainable network of community pharmacies dispensing PBS medicines
·improved efficiency through increased competition between pharmacies
·improve flexibility to respond to the community need for pharmacy services
·increased local access to community pharmacies for persons in rural and remote regions of Australia and
·continued development of an effective, efficient and well-distributed community pharmacy network in Australia.
In an article published in the Journal of Law and Medicine by H Laetitia Hattingh entitled: The regulation of pharmacy ownership in Australia: The potential impact of changes to the health landscape (2011) 19 JLM 147, the author said, at page 153:
Given that PBS sales and dispensing remuneration form the most significant parts of a pharmacy’s overall turnover, the Rules are indeed central to operating a financially viable pharmacy, and also provide some security to owners in assisting to shield pharmacies from new competitors in their catchment areas.
PBS prescription medicines are mainly supplied through pharmacies by “approved pharmacists” who are approved to carry on business from a designated location and to supply pharmaceutical benefits only from that particular pharmacy. An approved pharmacist is entitled to be paid an amount determined by the Minister for the provision of the pharmaceutical benefits. While it is technically possible to operate a non-PBS pharmacy, almost all community pharmacies are approved to dispense PBS medicines as this is the backbone of community pharmacy business.
In brief submissions made in the course of the hearing, Mr Brooks, who appeared on behalf of Ms Walkerden, echoed what was said in the article I have referred to above. Mr Brooks also confirmed that the location rules were all about attracting traffic or customers.
It is undoubtedly this background which gives rise to the statements made in the Explanatory Statement regarding the meaning of the expression commercial establishment. In particular, I refer to the following statement: It is intended that these types of businesses would attract consumers to a shopping centre. I am also mindful of this statement regarding the operation of s. 7(3): That is, each commercial establishment must be independent of another.
Bearing in mind the objects of the location rules which appear from the above extrinsic material, I need to examine more carefully the words used in the Explanatory Statement in order to give effect to those objects.
While it appears that the Explanatory Statement focuses on the independence of each commercial establishment, use of the word independent raises questions about the sense in which that should be understood in the context of the Explanatory Statement. It could be used in the sense of financial independence, operational independence or it could go to the business activity itself. Given the stated objects of ensuring a commercially viable and sustainable network of community pharmacies, improved efficiency and improved flexibility to respond to community needs, when that is coupled with the need to attract as many consumers as possible to the shopping centre in which the intended pharmacy is to operate, it appears to me that the requirement that there be independent commercial establishments is directed towards attracting the maximum number of consumers possible. If that is correct, then it follows logically that while the operating entity may influence the number of consumers attracted to a particular shopping centre (such as Coles, Woolworths or David Jones), the nature and number of commercial outlets will also be significant.
The two examples provided in the Explanatory Statement are both directed towards the objects I have identified above. The first example is of the same business operator conducting the same business activity at two discrete outlets in the one shopping centre. Logically, that will not tend to increase the number of consumers likely to go to that shopping centre. The second example indicates that, irrespective of an entity whose product is sold at two discrete outlets in a shopping centre, if those outlets are operated by different entities under franchise or some other arrangement, they are to be treated as independent establishments. Again, logically, this example discloses a link to attracting more consumers to the shopping centre. Having retail outlets supplying the same or essentially similar products at two different outlets may attract additional consumers due to the way in which those establishments are operated.
The difficult problem of course is following those examples and applying the objects of the Rules in the circumstances presented by this case.
The first point I should make is that simply because two discrete premises have internal access to each other does not necessarily destroy their independence. The fact that those premises are occupied under discrete lease agreements is, in my opinion, of some significance. It perhaps becomes more significant when the business activities conducted in each of those premises are of a different nature. Where the business activities themselves are different, one can more readily accept that they will attract additional consumers to the shopping centre. Were they conducting the same business activities as is given in the first example of the Explanatory Statement, then that clearly would not be the case. The fact that each of two adjoining businesses has the same business operator does not necessarily indicate that those businesses are not independently operated. While such a case is not the subject of an example given in the Explanatory Statement, the reason may be that, in focusing on whether the arrangement might attract additional consumers to the shopping centre, that fact alone may not have a significant impact.
Applying the general propositions I have set out in the preceding paragraph, I have formed the view that Harry’s Espresso and Harry’s Pizza Palace are independent commercial establishments for the purposes of the Rules. I have formed the same view about Sprinkles Ice Cream Parlour and Crav’N Dine In And Take Away. There are a number of reasons for this.
To begin with, as Mr Howle testified in his second witness statement, each of those premises is the subject of a discrete lease. Each of those premises falls within the definition of commercial establishment set out in s. 7(1) of the rules. The only issue is whether one business occupies each of the two premises in question. To give effect to the object of the Rules, my focus should be on the business activity conducted at each premises. That is because it is the diverse nature of the business activities which will attract more consumers to the shopping centre. Those activities are set out in
Mr Howle’s second statement where he explained what the Permitted Use was under each lease. They are as follows:
1.Harry’s Espresso
Retail sale and preparation of coffee, tea, chai, milkshakes, ice teas and coffee, cakes, banana bread, muffins and biscuits. Sale of small meals including sausage rolls, pastries, quiche, pre-made sandwiches and wraps and pre-packaged soft drinks and fruit juice trading as “Harry’s Cafe”; and in respect of the Landlord’s Property means the intended use of that Property.
2.Harry’s Pizza Palace
The sale and preparation of Italian cuisine including pasta based dishes, pizza, lasagne, foccacia and panini based sandwiches, traditional Italian dishes, bruschetta, garlic bread, frittata and salads. Sale of Italian deserts, gelati and cakes hot and cold beverages and pre packaged soft drinks and juices. The tenant will also be permitted to sell souvlaki wraps (beef, chicken and fish) and chips, trading as Harry’s Pizza Palace; and in respect of the Landlord’s Property means the intended use of that Property.
3.Sprinkles Ice Cream Parlour
The Premises will be used for the sale of hand and soft serve ice-cream, slurpies, sundaes with toppings, fresh fruit salad and yoghurt, milkshakes, smoothies, popcorn, hot dogs, kids lollies and soft drinks trading as “Sprinkles Ice Cream Parlour”; and in respect of the Landlord’s Property means the intended use of that Property.
4.Crav’N Dine In Takeaway
Sale and preparation of fired (sic), grilled or baked seafood including fish, calamari, squid, muscles, prawns, shellfish and oysters. Sale of potato chips, wedges, roast (chicken, lamb, beef) burgers, wraps, soups, fresh juice, baked dishes and salads (including chicken, potato and coleslaw) and an accompaniment and the sale of pre-packaged soft drinks and fruit juices. Sale and preparation of Indian cuisine including meat and vegetarian curries, rice, naan bread, roti, pappadums, samosa, curry puffs, and Indian influenced Chinese dishes as supplied trading as “Crav’n Dining and Takeaway” and in respect of the Landlord’s Property means the intended use of that Property.
It should be apparent that customers seeking a particular kind of meal or drink are likely to be attracted to a particular commercial outlet. While there is some overlap between the food and drinks provided from each of the outlets, each also has its own distinct cuisine, no doubt designed to attract particular customers. While in a broad sense, they may each be described as providing food and beverages, as the second example in the Explanatory Statement discloses, that is not necessarily a factor which precludes a finding of independent commercial establishments. Closer attention to the detail of the business activities at each premises is required in order to arrive at a meaningful response to the question.
Although Mr Hoyne submitted that adjoining premises with common access which operates only a single cash register cannot be described as independent businesses, respectfully, I disagree. Again, to answer the question posed by the Rule one needs to examine whether the commercial establishments in question are likely to attract customers to the shopping centre because of the variety of goods or services which they sell or supply. The way in which those commercial establishments are operated from an internal viewpoint is unlikely to have any bearing on that question. Furthermore, it seems unrealistic to expect an applicant for the provision of pharmaceutical benefits from particular premises to make enquiries into the internal operations of other business entities, whether they are corporate, individual or a partnership. That could not have been intended by the Rules. Nor, in my opinion, would it be realistic to have summonses issued to those entities seeking such information. It is foreseeable that any such applications would be resisted on the grounds of privacy or commercially sensitive information.
Mr Hoyne also submitted that an applicant was unable to obtain any benefit from an assertion that, because there were two discrete leases over the property, it could not be said to constitute one commercial establishment. He pointed out that the leases are for the same term and that the tenants are the same. That is undoubtedly correct. However, Mr Hoyne failed to mention that the permitted use to which each tenancy is subject is not identical. In fact, the primary significance of the leases is the Permitted Use stated in those documents. The Rules simply refer to occupation or intended occupation which need not be on the basis of a lease or any other formal arrangement.
Mr Hoyne submitted that I should treat the Woolworths supermarket and the Caltex service station as one commercial establishment. In his closing submissions, Mr Hoyne said that the premises are separate but because one business was occupying the two premises, it only counts as a single commercial establishment. That is, of course, assuming that the petrol station is regarded as being in the White Box Rise Shopping Centre.
Mr Hoyne contended that while the petrol station may be distinguished from the supermarket because it sold petrol and the supermarket did not, the petrol station sold other products in common with the supermarket. In his second witness statement
Mr Howle described the Permitted Use under the lease applicable to the Woolworths Petrol Site as:
Sale or hire of petroleum products and oils, LPG, ATM machines, cigarettes, soft drinks, confectionery, magazines and other retail or automotive products and services, automobile maintenance and repairs, car wash and any ancillary sales, services.
Mr Howle also explained that the Woolworths Service Station operated in conjunction with the supermarket by offering discounted fuel for customers of the supermarket. This is via the well-known shopper docket system.
I cannot accept Mr Hoyne’s submission regarding these two business activities. That is because of the significantly different mainstream operations which they conduct. Those operations are each likely to attract different customers to the shopping centre as well as those who are attracted to the shopping centre by both operations. Persons using the supermarket will not necessarily also use the service station and vice versa. It is foreseeable that customers attracted to the service station simply because they need fuel may also avail themselves of the opportunity to shop at retail outlets other than the supermarket.
In his closing submissions Mr Hoyne referred briefly to Dorevitch Pathology and the medical centre suggesting that there could be two businesses operating from the same premises even though there was insufficient evidence to disclose that. While I did have evidence that the pathology business was closed for a period of time, there was also evidence that persons wishing to utilise pathology services were directed to the medical centre.
The first point to note about these commercial establishments is that they provide discrete services. They do of course complement each other in the sense that practitioners from the medical centre may refer patients to pathology services and those patients are likely, for convenience, to simply attend the premises next door. However, logically, there are also likely to be patients who attend the medical centre and do not use the pathology services next door and there are persons who would use the pathology services at Dorevitch Pathology having been referred by other medical practices. It may simply be a matter of convenience. Regardless, it is foreseeable that each establishment is likely to attract additional consumers to the White Box Rise Shopping Centre.
I had in evidence a witness statement from Mr Stephen Burke, who described himself as a director, shareholder and manager of United Medical Centres Pty Ltd (UMC).
Mr Burke testified that UMC owned and operated the medical centre which was situated at shop’s 2 and 3 of the White Box Rise Shopping Centre. He stated that the medical centre was open and trading.
In the course of his cross-examination, Mr Burke agreed that United Discount Chemists and United Medical Centres were operated jointly as part of the Scaffidi group. He also agreed that a company called UPC Pathology Pty Ltd formed part of that group. However, in his witness statement, Mr Burke said that neither the pathology business nor the proposed pharmacy business was owned or operated by UMC.
In his second witness statement Mr Howle testified there was a lease between SCA and UPC Pathology Pty Ltd. However, on 12 February 2013 UPC Pathology Pty Ltd entered into a sublease with Specialist Diagnostic Services Pty Ltd. I did not have any further information about this corporate entity.
In my opinion, the operation of the pathology business and the medical centre, while complimentary, nevertheless are discrete business activities and are likely to attract additional customers to the shopping centre. Because the purpose of requiring there to be at least 15 other commercial establishments in the shopping centre is to attract consumers to that centre, and the business activities of each of those establishments is independent of the other, I find that they are two discrete commercial establishments for the purposes of the Rules.
CONCLUSION
Although all of the parties who appeared before me on the hearing of this matter agreed that Wodonga Pharmacy had a legal right to occupy the proposed premises at the relevant time, in order to properly fulfil the role which I am required to play in reviewing ACPA’s decision, I examined that issue. I have found that the Wodonga Pharmacy had, on the day the application was made, and at the date of hearing this matter, a legal right to occupy the proposed premises situated in the White Box Rise Shopping Centre.
In the course of the hearing an issue also arose regarding the evidence which I could consider at that time, given the constraints imposed on ACPA by s. 9 of the Rules. I have found that the Tribunal’s procedures on reviewing decisions of ACPA made under the Rules are subject to the restrictions set out in s. 9. However, I have found that the making of Directions under s. 33(2A), by the Tribunal is, in effect, a request to parties to provide further information, hence satisfying s. 9(b) of the Rules. Therefore, subject to ensuring procedural fairness was provided to all parties, I allowed additional information or evidence to be tendered in the course of the hearing.
The application made by Wodonga Pharmacy was made under Item 133 of Schedule 1, Part 2 of the Rules. I have found that the White Box Rise Shopping Centre is a shopping centre as that expression is defined in the Rules. The proposed premises are at least
500 m in a straight line from the nearest approved premises and there are no approved premises in that shopping centre. I have also found that the shopping centre meets the requirements to satisfy the definition of small shopping centre in the Rules. That is because I have found that the Caltex service station is part of the shopping centre and hence the gross leasable area of the shopping centre exceeds 5000 m². It contains a Woolworths supermarket with a gross leasable area exceeding 2500 m² and it has customer parking facilities.
The most contentious issue in this case was the question whether the shopping centre contained at least 15 other commercial establishments. I have found that it does meet that requirement. I have found that the expression temporary selling point is a reference to premises where the requisite business activity is conducted or likely to be conducted but which is expressly excluded by reason of s. 7(2)(j) of the Rules. It is not a reference to the business activity conducted at particular premises. I have found that Discount Cosmetics Clearance Centre, Cubano Facewear and Dorevitch Pathology are not temporary selling points. Nor is the kiosk from which DVD Warehouse operates a temporary selling point.
The most difficult aspect of the Rules is the application of s. 7(3)(a). By applying what I understand to be the purpose or object of this particular subsection, I have found that Harry’s Espresso and Harry’s Pizza Palace are independent commercial establishments for the purpose of the Rules. So too are Sprinkles Ice Cream Parlour and Crav’N Dine In And Take Away. I have also found that the Woolworths supermarket and the Caltex service station should not be treated as one commercial establishment, but rather, they are independent commercial establishments.
Although Mr Hoyne submitted that Dorevitch Pathology and the medical centre could be two businesses operating from the same premises, I disagree. I have found that they are discrete business activities and hence each falls within the definition of commercial establishment for the purposes of the Rules. Therefore, I have found that the White Box Rise Shopping Centre contains at least 15 commercial establishments other than the supermarket and accordingly, the shopping centre satisfies the definition of small shopping centre in the Rules.
It follows that I do not agree with the recommendation decision made by ACPA on
26 July 2013. I have found that Wodonga Pharmacy’s application for approval to supply pharmaceutical benefits from the identified premises in White Box Rise Shopping Centre under s. 90 of the National Health Act meets all of the requirements set out in Item 133 which is found in Schedule 1 Part 2 of the Rules. Therefore, I set aside ACPA’s recommendation decision and in substitution recommend that Wodonga Pharmacy be approved under s. 90 of the National Health Act to supply pharmaceutical benefits from Shops 4 & 5, White Box Rise Shopping Centre.
I certify that the preceding 137 (one hundred and thirty-seven) paragraphs are a true copy of the reasons for the decision herein of Senior Member Egon Fice ...[sgd].....................................................................
Associate
Dated 18 July 2014
Dates of hearing 8-9 May 2014 Counsel for the Applicant Mr D Favell Solicitors for the Applicant Gadens Lawyers Advocate for the Respondent Mr B Dean Solicitors for the Respondent Australian Government Solicitor Advocate for the
first named other party
Mr G Brooks, Geoffrey Brooks & Associates Counsel for the
second named other party
Mr M J Hoyne Solicitors for the
second named other partyAnn Mihulka & Associates
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