FEDERAL COURT OF AUSTRALIA

Hope v Australian Community Pharmacy Authority [2016] FCA 1597

ORDERS

THE COURT ORDERS THAT:

1.    Upon each of the Applicants giving the usual undertaking as to damages Orders 1(a) and (b) made on 2 December 2016 remain in force until judgment in these proceedings or until further Order.

2.    The applicants file and serve an amended statement of claim by 10 January 2017.

3.    The respondents file and serve a defence to the amended statement of claim by 24 January 2017.

4.    The parties file any Notices to Produce by no later than 4:00pm 30 January 2017.

5.    The parties file any subpoenas by no later than 4:00pm 30 January 2017.

6.    The parties file any further Affidavit material, including expert evidence, by 6 February 2017.

7.    The parties file an agreed list of facts and issues in dispute by 17 February 2017.

8.    The parties file a final witness list by 17 February 2017.

9.    The parties file written submissions by 23 February 2017.

10.    The hearing of the matter listed for 31 January 2017 and 1 February 2017 be vacated.

11.    The hearing be listed for 27 and 28 February 2017 before Kerr J.

12.    Costs reserved.

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

REASONS FOR JUDGMENT

JUSTICE KERR:

1    This is an application to extend interim orders to restrain the Secretary of the Department of Health (the Secretary) granting an approval to a new pharmacy to supply pharmaceutical benefits. Interim orders were initially made on 2 December 2016 following an ex parte hearing. Those orders were continued until 4pm on 22 December 2016 following the Court hearing from the parties on 16 December 2016.

2    In their originating application, dated 1 December 2016, the Applicants, inter alia, sought orders under the Administrative Decisions (Judicial Review) Act 1977 (ADJR Act) (or alternatively s 39B of the Judiciary Act 1903) setting aside a decision of the Australian Community Pharmacy Authority (the Authority) (the First Respondent) in which the authority had recommended that the Secretary (the Second Respondent) grant approval under s 90(1) of the National Health Act 1953 (the Act) to a person then unknown, now known to be Slopen Main Pty Ltd ATF Slopen Main Discretionary Trust (Slopen Main), to supply pharmaceutical benefits from a new pharmacy at tenancy T19 Cove Hill Shipping (sic) Centre, 11 Cove Hill Rd, Bridgewater in Tasmania (T19 Cove Hill).

3    The grounds upon which the Applicants rely are set out in their Statement of Claim of the same date.

4    The Statement of Claim asserts that the First Applicants, Geoffrey Peter Springford Hope and Elizabeth Jane Hope T/As Elizabeth Hope Priceline Pharmacy operate a pharmacy business in the Green Point Plaza in Bridgewater. The First Applicants is approved to supply pharmaceutical benefits at premises located at Shop 5 Green Point Plaza, 26-28 Green Point Rd, Bridgewater in Tasmania (Shop 5 Green Point Plaza).

5    The Second Applicant, Rohan Bill Targett T/As Brighton Pharmacy - Alliance Pharmacy (the Brighton Pharmacy) holds approval to supply pharmaceutical benefits at premises located at 172 Brighton Rd, Brighton in Tasmania.

6    The gravamen of the Applicants’ case is that the Authority has purported, contrary to its obligations under the Act and the National Health (Australian Community Pharmacy Authority Rules) Determination 2011 (the Rules), to make a decision recommending that the Secretary approve an application from a pharmacist for a new pharmacy in a facility (small shopping centre) (the pharmacy application) at premises at T19 Cove Hill to supply pharmaceutical benefits (the proposed new pharmacy).

7    It is common ground that under s 90(3B) of the Act the Secretary may grant an approval to supply pharmaceutical benefits only if the Authority has recommended the grant of that approval.

8    It is asserted that the Rules legally bind the Authority to recommend an application not be approved if one or more of the mandatory requirements under r 10 have not been met.

9    The Applicants claim that two of those mandatory requirements were not met. Paraphrasing and summarising the Statement of Claim (at [10]-[15]) they assert, contrary to the requirements of r 10, the premises recommended for approval are neither in a small shopping centre as defined by r 5 of the Rules nor are the premises at least 500m in a straight line from the nearest other approved premises (those being the premises at Shop 5 Green Point Plaza operated by the First Applicant).

10    Their Statement of Claim (at [18]) states that:

Unless restrained, the second respondent [the Secretary] may proceed to make a decision to grant approval to supply pharmaceutical benefits from the new premises which would be contrary to the Act.

11    When the matter initially came before the Court on an ex parte basis I was informed from the bar table by Mr Gunson SC that the Applicants were unaware of the identity of the pharmacist who had sought approval from the Secretary for the supply of pharmaceutical benefits at premises T19 Cove Hill. Mr Gunson also advised that in the time available it had not been possible for his clients to serve the Originating Application or the Statement of Claim on the Authority or the Secretary. Nonetheless the Applicants’ solicitors had spoken to the solicitors acting for the Secretary and had made them aware of the proceedings. The Applicants’ solicitors had enquired whether in the circumstances the Secretary would undertake not to further consider the application pending the hearing of the matter. They had been advised that the Secretary was unwilling to so constrain his decision making.

Legal framework

12    It is convenient to set out the applicable law governing approvals for the supply of pharmaceutical products in some detail.

13    Section 90 of the Act empowers the Secretary to grant approval for the supply of pharmaceutical benefits at particular premises, but in so far as is relevant, only after receiving a recommendation to do so from the Authority.

14    The provisions of the Act empowering the Secretary to grant such approvals are as follows:

90(3) Subject to this section, where an approved pharmacist desires to supply pharmaceutical benefits at premises other than premises in respect of which approval has been granted, the Secretary may on application by the approved pharmacist, grant approval in respect of those other premises.

90(3A) Subject to subsections (3AA) and (3AE), [neither of which are relevant] an application under this section must be referred to the Authority.

…

90(3B) An approval may be granted under this section in respect of an application that has been referred to the Authority under subsection (3A)…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.

15    The Authority is not at liberty to make such recommendations at large.

16    Section 99K(2) of the Act requires the Authority to “comply with the relevant rules determined by the Minister under section 99L.”

17    The most recent version of the Rules (and applicable to these proceedings at all material times) was registered in the Federal Register of Legislative Instruments on 3 December 2015.

18    The underlying duty of the Authority is as expressed in rr 10 and 11. An applicant for new pharmacy premises whose application meets certain prescribed criteria must be recommended for approval, however if any of those criteria are not met the applicant must not be recommended for approved.

19    As is relevant to this proceeding the Rules provide as follows:

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)    [not presently relevant]

(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 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.

20    It is uncontentious that the relevant application was for a “new pharmacy in a facility (small shopping centre).” Thus under r 10(b)(i) such an application is one of the kinds of applications mentioned in column 2, Item 133 in Part 2 of Schedule 1.

21    The relevant requirements, all of which must be met if the Authority is lawfully to recommend approval, set out in column 3 are:

1.    The proposed premises are in a small shopping centre.

2.    The proposed premises are at least 500 m, in a straight line, from the nearest approved premises.

3.    There are no approved premises in the small shopping centre.

22    A number of those expressions are defined terms and/or are further explained by other provisions of the Rules.

23    Thus r 5(1) Interpretation provides that “in this Determination”:

small shopping centre means a shopping centre that:

(a)    has a gross leasable area of at least 5 000 m2; and

(b)    contains a supermarket that occupies a gross leasable area of at least 2 500 m2;

and

(c)    contains at least 15 other commercial establishments; and

(d)    has customer parking facilities.

gross leasable area means:

(a)    for a shopping centre — the total floor area of the shopping centre excluding loading docks and car parks; and

(b)    for a supermarket — the total floor area of the supermarket excluding loading docks.

single management, for a shopping centre…:

(a)    means management for 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.

24    Rule 7 explains what is meant by the expression “commercial establishment” when referred to in the Rules. Relevantly, it 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, café, restaurant or takeaway; or

(iii)    a business that provides services to customers.

25    However r 7(2) clarifies that certain businesses that might ordinarily fall within the generality of the words “commercial establishment” cannot be counted. Included in what must not be counted are temporary selling points, commercial office spaces and also “premises occupied by an accountant, analyst, architect, engineer, lawyer, planner, stockbroker or surveyor,” unless those premises are occupied as a shopfront.

26    Rule 7(3) prescribes rules for working out the number of commercial establishments in a small 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;

…

27    Rule 8(1) explains how a distance between two premises must be measured. It refers to the distance, measured in a straight line, from the centre at ground level, of the public entrance of the first premises to the centre at ground level, of the public entrance of the second premises. Rule 8(3) states that “[i]f either premises has more than one public entrance, a reference to the distance between the 2 premises is a reference to the shortest such measurement that can be made in relation to the 2 premises.”

28    Finally, r 10 requires all of the provisions of Schedule 2 General Requirements be met.

29    The Authority must be satisfied that, at all relevant times (a term defined by r 5 to mean both the day on which the application was made, and the day on which the application is considered by the Authority), the “proposed premises are not approved premises” (Item 212 and pursuant to Item 211):

(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

(b)    the proposed premises, on the day the application was made and on the day the Authority makes a recommendation in relation to the application:

(i)    could be used for the operation of a pharmacy under applicable local government and State or Territory laws relating to land development; and

(ii)    would be accessible by members of the public at large; and

(c)    within 6 months after the day on which the Authority makes a recommendation in relation to the application, the applicant will be able to begin operating a pharmacy at the proposed premises; and

(d)    the proposed premises are not directly accessible by the public from within a supermarket.

The application for interim relief

30    When the matter was before the Court on 2 December 2016 Mr Gunson, for the Applicants, read the affidavit of Mr Hope, sworn 1 December 2016, in support of the interim orders the Applicants sought.

31    In that affidavit Mr Hope deposed that he and his mother were jointly approved to supply pharmaceutical benefits from Shop 5 Green Point Plaza.

32    Mr Hope deposed that he had made submissions in response to a letter from the Authority, dated 27 July 2016, advising him of the pharmacy application. He was unaware of the identity of the applicant to that application.

33    He deposed that on 17 November 2016 he was advised by email that the Authority, by a decision made on 4 November 2016, had recommended that the pharmacy application be approved.

34    The urgency for the application to this Court, Mr Hope deposed (at [10]), was due to his concern that having received a favourable recommendation from the Authority the Secretary might, unless restrained, soon approve the proposed new pharmacy.

35    Mr Hope deposed (at [11]) that he had been informed that the Registrar of the Tasmanian Pharmacy Authority had “received an application for the conduct of a pharmacy from a demountable building at the Cove Hill Shopping Centre”. He annexed photographs to show that demountable building in the carpark of the Cove Hill Shopping Centre. He deposed that he had seen the demountable on 30 November 2016 and had “noticed works being undertaken inside and around it, which I believe to be in preparation for the commencement of trade by the New Pharmacy” (at [12]).

36    He deposed that both he and the Second Applicant did not believe that the Cove Hill Shopping Centre met the definition of a “small shopping centre” within the meaning of the Rules.

37    He deposed that as at 18 August 2016 there were only a Coles Supermarket and 7 other commercial establishments operating in the Cove Hill Shopping Centre (at [18]). He listed those that he accepted were so operating.

38    Mr Hope annexed (annexure GH3) the Second Applicant’s submissions (dated 18 August 2016 on the letterhead of Brighton Pharmacy) to the Authority opposing the approval. Those submissions had contended to the same effect.

39    Mr Targett’s letter included the following statement:

I would really challenge at the outset that as Rule number 133 firstly says “The proposed premises are in [emphasis in original] a small shopping centre” whereas this application is for a temporary structure at the far end of the centre’s car park.

40    Mr Hope deposed that he and the Second Respondent also challenged the proximity of the proposed new pharmacy under the Rules.

41    He had engaged a surveyor to provide him “with evidence of the straight line distance between the two most proximal access doors of My Pharmacy [Shop 5 Green Point Plaza] and the New Pharmacy” (at [14]). He annexed a report by John Bamford & Associates Land and Engineering Surveyors (annexure GH7). The second paragraph of that report reads:

Measurement has been taken in accordance with Rule 133 Part 2, Pharmacy Location Rules, Applicant Handbook version 1.2, November 2015 – that the measurement is a straight line distance taken from the mid point at ground level of the nearest access door.

42    Mr Hope deposed (at [14(b)]):

The surveyor’s evidence shows that the relevant distance (measured in accordance with section 8(1) of the Pharmacy Location Rules) is 489.97metres…

43    He further deposed to his belief that the trade of a new pharmacy, in the location proposed, would have an immediate and significant impact on his pharmacy. He stated he would be prepared to give an undertaking as to damages if that was required to obtain the injunction he was seeking.

44    Mr Gunson submitted that the Court had jurisdiction pursuant to the ADJR Act to review the Authority’s decision.

45    Under s 3(3) of the ADJR Act such a recommendation is deemed to be the making of a decision and is reviewable (Alexander v Australian Community Pharmacy Authority [2010] FCA 189 at [42].)

46    Mr Gunson submitted that Mr Hope’s evidence should satisfy the Court that there was a strong prima facie case that the requirement of the Rules that the proposed premises be “in” a “small shopping centre” has not been met because the shopping centre did not contain at least 15 other commercial establishments.

47    He further submitted that the Court should be satisfied that there was a strong prima facie case that the requirement was also not met because the proposed premises was a temporary demountable building located at the edge of the carpark and, accordingly, not “in” the shopping centre.

48    The requirement that the premises be “in” a “small shopping centre” was a jurisdictional fact (Watson v Australian Community Pharmacy Authority [2012] FCAFC 142; (2012) 206 FCR 365 at [85]).

49    Mr Gunson submitted there was a second mandatory requirement of the Rules that Mr Hope’s evidence should satisfy the Court had not been met. That was that the proposed premises be at least 500m in a straight line from the nearest approved premises. His instructions were that the Authority must have measured the distance between the proposed new pharmacy and Shop 5 Green Point Plaza without taking into account that Green Point Plaza had two public entrances. Where premises have two public entrances r 8(3) requires the measurement to be made to the shortest distance.

50    The shortest distance in a straight line between the rear entrance of Shop 5 Green Point Plaza and the nearest public entrance of the proposed new pharmacy, as measured by John Bamford & Associates, was 489.97m.

51    The requirement that the proposed premises be at least 500m in a straight line from the nearest approved premises (in this case the First Applicants’ premises) also was a jurisdictional fact (Kastrinakis v Australian Community Pharmacy Authority [2013] FCA 995; (2013) 215 FCR 452 at [24-26]).

52    Mr Gunson submitted the balance of convenience favoured the Court granting the orders sought on an ex parte basis to operate at least until a hearing could be held at which the still to be identified applicant for the proposed new pharmacy might be advised of the proceedings and be heard. The Secretary had declined to give an undertaking not to approve the pharmacy application. He submitted, if a new pharmacy were to open it would detrimentally affect the trading of both Applicants whom operated nearby approved premises. The Applicants were approved pharmacists who were conducting their existing businesses under a scheme established to ensure the existence of a network of accessible and viable community pharmacies throughout Australia including in rural and remote areas.

53    Mr Gunson submitted, that there would be no effect on the interests of the wider community, if an injunction was granted, in so far as access to pharmaceutical benefits were concerned as there were already approved pharmacies operating in the immediate area. There should be great weight given to maintaining the status quo until the validity of the Authority’s decision was determined.

54    Mr Gunson advised that all of the Applicants were prepared to give the usual undertakings as to damages in the terms provided for by the Federal Court of Australia’s Usual Undertaking as to Damages Practice Note (25 October 2016). If the Applicants were ultimately unsuccessful, any damages suffered in consequence of the grant of an injunction to that, as yet unidentified party or any other third party, would be adequately addressed by the terms of the undertaking.

Interim injunction granted

55    At the conclusion of the ex parte hearing I gave short oral reasons (unpublished) for orders staying, until 4pm on Friday 16 December 2016, the Authority’s decision to recommend that the Secretary grant approval for the pharmacy application. The orders restrained, until that time, the Secretary from approving that application.

56    My oral reasons referred to what Gummow and Hayne JJ (with whom Gleeson CJ and Crennan J had agreed) had stated in Australian Broadcasting Corporation v O’Neill [2006] HCA 46; (2006) 227 CLR 57 (ABC v O’Neill). Their Honours in ABC and O’Neill, at [65], reaffirmed that the relevant principles for Australia governing the grant of an interlocutory injunction were as explained in Beecham Group Ltd v Bristol Laboratories Pty Ltd [1968] HCA 1; (1968) 118 CLR 18:

The relevant principles in Australia are those explained in Beecham Group Ltd v Bristol Laboratories Pty Ltd. This Court (Kitto, Taylor, Menzies and Owen JJ) said that on such applications the court addresses itself to two main inquiries and continued:

The first is whether the plaintiff has made out a prima facie case, in the sense that if the evidence remains as it is there is a probability that at the trial of the action the plaintiff will be held entitled to relief ... The second inquiry is ... whether the inconvenience or injury which the plaintiff would be likely to suffer if an injunction were refused outweighs or is outweighed by the injury which the defendant would suffer if an injunction were granted.

By using the phrase “prima facie case”, their Honours did not mean that the plaintiff must show that it is more probable than not that at trial the plaintiff will succeed; it is sufficient that the plaintiff show a sufficient likelihood of success to justify in the circumstances the preservation of the status quo pending the trial. That this was the sense in which the Court was referring to the notion of a prima facie case is apparent from an observation to that effect made by Kitto J in the course of argument. With reference to the first inquiry, the Court continued, in a statement of central importance for this appeal:

How strong the probability needs to be depends, no doubt, upon the nature of the rights [the plaintiff] asserts and the practical consequences likely to flow from the order he seeks.

(Footnotes omitted)

57    I held that the Applicants were “persons aggrieved” for the purposes of s 3 of the ADJR Act (Assaparin v Australian Community Pharmacy Authority [2016] FCAFC 9 (Assaparin) at [48]-[54]) and the Court had jurisdiction to make the orders sought (Hallgath v Australian Community Pharmacy Authority [2011] FCA 1062 (Hallgath)).

58    While there was no contradictor, such that my conclusions were necessarily conditional, I accepted Mr Gunson’s submissions that the requirements (a) that the premises be in a shopping centre and (b) must be at least 500m in a straight line from the nearest approved premises were each jurisdictional facts, the existence of which were preconditions to the lawful exercise of the Authority’s power to recommend the approval of the proposed new pharmacy in a facility (small shopping centre).

59    Referring to what Mr Hope had deposed to at [18] of his affidavit I concluded that as the evidence stood there was a (strong) prima facie case (as explained in ABC v O’Neill) that the distance, measured in a straight line, from the second public entrance of the First Applicants’ approved premises to the entrance of the proposed new pharmacy was less than 500m. If that evidence remained unshaken there was a high probability that following a hearing the Applicants would be held entitled to relief. On that basis I considered it unnecessary to give consideration to the alternative case advanced by the Applicants premised on the proposed facility not being “in” a “small shopping centre”.

60    Once the applicant for the proposed new pharmacy became aware of the Court’s orders that person might raise other factors relating to the balance of convenience, however on the information then before the Court I accepted that the propositions advanced by Mr Gunson as to where the balance of convenience lay were persuasive.

61    However it would be inappropriate to make orders applying beyond a time when the interim orders might reasonably be expected to come to that person’s attention such that they might instruct legal advisors to represent their interests. For that reason the interim orders were to expire at 4pm on Friday 16 December 2016, unless further orders were made, and the matter was otherwise adjourned until 12 noon of that day.

Continuation of interlocutory relief?

62    On 12 December 2016 Slopen Main filed an interlocutory application seeking orders pursuant to the Federal Court Rules 2011 r 9.12 that it be joined as a respondent to the proceedings and that the interim orders made in the proceedings be set aside.

63    When the matter came before the Court on Friday 16 December 2016 Mr Walker appeared for the Applicants and Mr Dean for the Secretary. Ms Sorbello appeared for Slopen Main.

64    Ms Sorbello confirmed that Slopen Main was the entity which had sought the Secretary’s approval for the proposed new pharmacy. I ordered that it be joined as a respondent to the proceedings (the Third Respondent).

65    Mr Dean advised that the Secretary neither supported nor opposed the orders sought by the respective parties. He had been instructed that the Authority intended to make a submitting appearance, but had not yet filed its notice of address for service.

66    Mr Walker pressed the Applicants’ case for the continuation of interlocutory relief pending a decision in the substantive matter.

67    In support, and without objection, Mr Walker relied on the affidavit of Mr Hope read in the earlier proceedings and read two further affidavits filed on the Applicants’ behalf being the affidavits of Mr Targett sworn on 15 December 2016, and that of Mrs Hope sworn on 16 December 2016.

68    Ms Sorbello objected to Mr Walker reading a further affidavit of Mr Hope sworn on 16 December 2016 on the basis that it referred to matters which had not been before the Authority. I dismissed that objection on the basis that what was referred to in the affidavit was relevant to a threshold jurisdictional fact (ie the correct measurement of the distance in a straight line between the public entrances between the respective premises) and the existence of that fact was not dependent on what information had or had not been before the Authority.

69    Mr Walker accordingly read that affidavit.

70    For her part Ms Sorbello pressed the Third Respondent’s contention that the interim orders in force until 4pm that day should be set aside.

71    In support, and without objection, Ms Sorbello read the affidavit of Mr Maurice Hannan, solicitor for the Third Respondent, sworn on 15 December 2016. That affidavit substituted for an earlier affidavit, in similar terms, sworn by Mr Hannan on 12 December 2016. She did not propose to read his earlier affidavit.

72    Mr Walker however indicated that Mr Hannan’s affidavit of 12 December 2016 contained certain material (ie a draft lease), which had been provided by the Third Respondent to the Authority, that the Applicants wished to rely upon. As part of the Applicants’ case he sought to read pp 140-184 of the first affidavit. Ms Sorbello had no objection to that course being followed. Mr Walker accordingly read those pages of Mr Hannan’s affidavit of 12 December 2016.

73    The affidavits as read are the evidence in these proceedings.

Assessment of the evidence

74    It is unhelpful in interlocutory proceedings, particularly given no deponent has been required to be available for cross examination, for the Court to do otherwise than to attempt to form a conditional and preliminary view of the strengths of the respective cases. What then can be concluded, at least on an impressionistic basis (ie untested by cross examination), in respect of the evidence before the Court?

Characterisation of the premises

75    It soon became plain that there was a fundamental question of characterisation, regarding what is properly to be regarded as the geographical boundaries of the relevant “small shopping centre”, which divides the parties.

76    As is clear from the evidence of Mr Hope, and is implicit in Mr Targett’s letter, the Applicants had proceeded on the unstated assumption that the relevant “small shopping centre” is the Cove Hill Shopping Centre as bounded by Hurst Rd. It was on that basis that Mr Hope deposed that the Cove Hill Shopping Centre has far fewer than the required number of commercial establishments than is required by the Rules.

77    Ms Sorbello did not dispute that within the area that Mr Hope referred to as the “small shopping centre” there would be fewer than the required number of commercial establishments. However she submitted that while on a separate title, a number of shops on the other side of Hurst Rd were properly to be included as falling within the legal meaning of the expression “small shopping centre.” Ms Sorbello submitted that the Rules contained no requirement of proximity.

78    To establish the factual premises of that submission Ms Sorbello referred to the affidavit of Mr Hannan (15 December 2016), and the annexures thereto (pp 99-100), in particular the Statutory Declaration of Ms Jillian Ann Bowkett, dated 21 April 2016.

79    In that declaration Ms Bowkett states at [8] and [14]:

The Centre [Cove Hill Shopping Centre previously known as the Cove Hill Fair Shopping Centre] consists of two lots being Lot 1 on Diagram 34163 and Lot 1 on Plan 164326 which are both owned by the Lessor and managed by Kalis Property Management and promoted as one shopping centre known as “Cove Hill Shopping Centre [”].

…

The management of the Centre is under single management…[it] includes the control of all service providers, marketing, administration, security, landscaping, maintenance and cleaning of the Centre, promotion of the Centre, trading hours, pedestrian and vehicular access and signage within the Centre.

80    Thus Ms Sorbello submitted that the Court must proceed on the basis that the Cove Hill Shopping Centre necessarily also includes the commercial establishments on the other side of Hurst Rd applying the specific definition of a “small shopping centre” provided for in the Rules. The definition is set out at [23] above.

81    Mr Walker in response maintained the submission that some notion of proximity is implicit in the notion of a “small shopping centre”. He submitted that properly characterised there were two distinct and separate shopping centres, one on each lot and separated by a public road, albeit jointly managed.

82    Mr Walker also submitted that even if the Third Respondent’s submission were to be accepted the Cove Hill Shopping Centre would not contain at least 15 other commercial establishments. However on the materials currently before the Court, including Ms Bowkett’s statutory declaration, on my initial impressionistic basis that appears an unpromising proposition.

83    There is a second aspect to the argument as to whether or not the proposed new pharmacy is in a small shopping centre. The Applicants contend that because the proposed new pharmacy is to be in a temporary demountable located at the far edge of the carpark it is not relevantly “in” a “small shopping centre”.

84    There was little dispute about the facts underlying most of the contentions. It is the legal characterisation of those facts which divides the parties.

85    The many site plans and photographs showing the location of the proposed premises confirm that the proposed new pharmacy is located a considerable distance from any other building which comprises the Cove Hill Shopping Centre, however bounded. It is located at the far end of a carpark ordinarily used by customers. There is no dispute that a public road separates the two lots which the Third Respondent asserts comprises a single shopping centre.

86    Moreover, in so far as the Applicants refer to these premises as “demountable” Ms Sorbello accepts that description although she notes that the proposed new pharmacy is attached to the ground.

87    While Ms Sorbello did not accept that the premises were temporary she did not dispute the Planning Permit for “land described as 11 Cove Hill Rd, Bridgewater” (Hannan affidavit, 15 December 2016, pp 93-96) and the Terms of Use as set out:

The proposed use and development is approved until 1 September 2016, or until a date otherwise approved by Council’s Manager Development Services. After this time, the use must cease immediately, and within 3 months of that date, all buildings and associated structures must be removed and the site made good to its former state immediately prior to the commencement of the use and development.

88    Ms Sorbello submitted that even if the description of the proposed premises as “demountable” and “temporary” was to be accepted that did not matter because the Authority had been legally obliged to recommend any application for a new pharmacy provided it met the defined criteria. The proposed premises were within Lot 1 on Diagram 34163. That was sufficient to satisfy the criteria provided in the Rules that the premises be “in” a “small shopping centre” as therein defined.

Distance between premises

89    I now turn to the facts as they appear to me to be in respect of the distance between the proposed premises and the First Applicants’ premises.

90    In that regard the picture is more clouded than it appeared on the materials available to the Court at the time of the ex parte hearing.

91    There is no dispute on the evidence before the Court that the First Applicants’ approved premises have double doors both at the front and rear. It appears also there is no dispute that if the straight line measurement is properly to be taken from the front doors of Shop 5 Green Point Plaza to the proposed new pharmacy the distance measured exceeds 500m. Equally it appears there is no dispute that if the straight line measurement is properly to be taken from the rear doors to the proposed new pharmacy then the straight line distance is less than 500m.

92    The critical question is whether the rear doors should be characterised as a “public entrance” within the meaning of r 8(3) of the Rules.

93    What is meant as a public entrance is not defined in the Rules. I take it that those words, and no party submitted otherwise, should be understood as conveying their ordinary meaning.

94    There is some evidence to suggest that the rear entrance is not a public entrance as generally understood. Annexed to Mr Hannan’s affidavit (15 December 2016, at pp 184-185) is a Statutory Declaration of Ms Sharon Long, Business Development Manager for Terry White/Chemmart in Tasmania, dated 24 October 2016. Ms Long stated that on 11 and 12 October 2016 she visited the First Applicants’ approved premises, entered “through the main public access entrance doors at the front of the pharmacy premises from the car park area” and had (at [3]):

…walked throughout the inside of … [Shop 5 Green Point Plaza] and located only one other double door at the rear left hand side of the premises. Those doors were closed at all times during both my visits and appeared to be locked and which had a “Fire Exit” sign above the door.

95    Ms Long further deposed that “[t]here were a number of dump bins and stock in the aisle leading to the rear fire exit door…one dump bin was placed in front of and up against the double rear doors blocking any access to the doors” (at [6]).

96    Ms Long stated she had not been able to gain access to “the rear of the building…as there is one locked gate blocking the passageways to the rear of the building” (at [9]). Annexed to her statutory declaration were a number of photographs purporting to show the state of the rear doorway at those times.

97    The statutory declaration of Ms Bowkett is in similar terms (annexed to Mr Hannan’s affidavit, 15 December 2016, at pp 181-182).

98    The responsive affidavit sworn by Mr Hope dated 16 December 2016 (the affidavit I admitted against objection) asserts that the rear doors were closed on the days in question because of strong winds and weather and reduced staffing (at [11]).

99    He deposed that the second door at the rear of his premises had “been used consistently for public access, albeit not every day, since we started trading from this site in mid-2010” (at [7]). He deposed that the existence of the second door had given the pharmacy the flexibility to “[g]ive methadone patients a discreet and more private way to enter and leave the Pharmacy”, to “help manage large customer numbers”, to “provide privacy for certain customers who don’t want to be seen entering or leaving the front entrance”, to permit the pharmacy to “keep trading when our front entrance/security shutters fail”, to provide “[w]heelchair access to the dispensary” and “[i]ncrease the natural light into the Pharmacy” (at [16]). It is also a “popular access point for mothers and their children” for the Elizabeth Hope Baby Club at the pharmacy (at [17]).

Submissions

100    Ms Sorbello submitted that for injunctive orders to be granted the Applicants must establish a pre-existing right which they are entitled to have protected: Yu v Australian Community Pharmacy Authority [2013] FCA 713 (Yu). She submitted that the Applicants have not identified any such right.

101    However Ms Sorbello does not dispute that the Applicants are ‘persons aggrieved’ within the meaning of the ADJR Act. That conceded, I am satisfied that not only does the Court have jurisdiction but also that it has power to make the orders sought. Section 23 Federal Court of Australia Act 1976 confers on the Court “power, in relation to matters in which it has jurisdiction, to make orders of such kinds, including interlocutory orders, and to issue, or direct the issue of, writs of such kinds, as the Court thinks appropriate.”

102    I do not accept that Yu precludes the issue of injunctive relief in these proceedings.

103    In Yu Pagone J expressly held, at [10], that the Court in an appropriate case may grant an injunction in aid of a statutory right. By contrast to what is in issue in the present proceeding, Mr Yu was seeking an injunction the only utility of which would have been to allow him to assert priority in time over another potentially equally entitled applicant. Justice Pagone held there was nothing in the statutory scheme providing any obligation on the part of the Authority or Secretary conferring a right to preferential consideration on the basis of Mr Yu’s priority in time. Accordingly he declined to grant the injunction sought.

104    By contrast the Applicants in this matter point to specific mandatory considerations stated expressly in the Rules they assert were not complied with. In my view it is not correct to say that the Rules confer no rights relevant to persons having interests of the kind asserted by the Applicants. The Rules provide an important, if qualified, limited and bounded, statutory protection for the interests of existing providers of pharmaceutical products. As Mortimer J stated Walkerden v Wodonga Pharmacy Pty Ltd [2015] FCA 273; (2015) 230 FCR 243 at [62]:

Clearly the objectives of the 2011 Rules, as set out in cl 1.2(d)(vi) of the fifth [Community Pharmacy] Agreement, are of principal relevance to the construction issues on this application. Those objectives have twin themes: a sustainable and viable community pharmacy network (which focuses at least as much on the interests of pharmacy owners as on the community) and access to pharmaceutical benefits (with a focus only on the community’s interests). In that sense the location rules are an attempt to balance community access with commercial sustainability.

105    In my opinion Yu does not stand in the way of the grant of an injunction in a case such as the present. Justice Pagone did not refer to an earlier decision of Logan J in Hallgath in which His Honour issued an injunction in circumstances analogous to the present proceedings. I do not take it that Pagone J acted per incuriam. In my view Yu is distinguishable. It was correctly decided on very different facts.

106    The most important factors a Court must consider if requested to grant an interlocutory injunction are (a) whether the substantive application when heard would have real prospects of success and (b) the balance of convenience as between the parties.

107    I have reached the conclusion that the propositions advanced by the Applicants, to the effect that (a) the site where the premises are to be located is not a “small shopping centre” and (b) the premises are not “in” a small shopping centre as defined by the Rules, are arguable. Whether or not either or both could be said to be compelling may turn on whether or not the Court is entitled to have regard to the National Health (Australian Community Pharmacy Authority Rules) Determination 2011, No 65 of 2011, Explanatory Statement (Explanatory Statement) in construing the definition of the term “small shopping centre” in the Rules.

108    The Explanatory Statement provides:

New pharmacy in a facility (small shopping centre)

Item 133 applies to applications for a new approval in a small shopping centre. It aims to improve pharmacy access for consumers in a shopping centre that are of sufficient size and range of commercial establishments to attract a significant number of residents from the local community and surrounding areas. 

Sub-item 1 requires that the proposed premises are situated in a small shopping centre. Shopping centre is defined at subsection 5(1) of Part 1 as a group of shops and associated facilities that is under single management and small shopping centre is defined as a shopping centre, that:

(a)    has a total gross leasable area of at least 5,000 m2; and 

(b)    contains a supermarket that occupies a gross leasable area of at least 2,500 m2; and

(c)    contains at least 15 other commercial establishments; and

(d)    has customer parking facilities.

Sub-item 2 requires that the proposed premises are at least 500 m, in a straight line, from the nearest approved premises.

Sub-item 3 requires that there are no approved premises in the shopping centre.

109    On its face Item 133 sub-item 1 suggests the definition may have been intended to incorporate the ordinary meaning of the words “small shopping centre” as part of the definition.

110    The Explanatory Statement includes a note on “commercial establishments”:

In considering an application under either of the [large or small] shopping centre provisions, the Authority need not be satisfied that the requisite number of commercial establishments are operating within that centre, rather, the Authority must be satisfied that the centre is, or is likely to be, occupied by the requisite number of commercial establishments.  In considering this, the Authority will have some discretion and may consider matters such as, how much progress has been made on fitting out the relevant premises and how soon the commercial establishments will begin operating.

111    In Esso Australia Resources Ltd v Commissioner of Taxation [2011] FCAFC 154; (2011) 199 FCR a Full Court of the Federal Court of Australia held, surprising as the result appeared to be, that a defined term cannot be construed by reference to the ordinary meaning of the term so defined. However the question in this instance may be whether the definition itself may be informed by the ordinary meaning of the defined term as having regard to the Explanatory Statement.

112    With respect to the issue of distance between the two premises there may be room for doubt that Mr Hope’s use of the rear doors of his pharmacy for the purposes he asserts (even if his evidence be accepted) amounts to evidence sufficient to establish their character as a “public entrance” for the purposes of r 8(3). However I do not think the balance of the evidence, on the limited materials before me, is so clear as to exclude that possibility. That proposition also remains arguable.

113    Within the understanding of what is required for the grant of an interlocutory injunction stated in ABC v O’Neill, subject to the balance of convenience, I am satisfied the Applicants have shown a sufficient likelihood of success to justify, in the circumstances, the preservation of the status quo pending the hearing.

114    In reaching that conclusion I have not taken into account an additional matter identified by Mr Walker as a ground for potentially invalidating the Authority’s recommendation - that the Authority could not have been satisfied, as at the date of its decision that the Third Respondent had a legal right to occupy the proposed premises. That proposition is nowhere referred to either in the Originating Application or the Statement of Claim. If such a proposition is to be pressed the Statement of Claim would need to be amended.

115    As to the balance of convenience I am content that the balance remains essentially as Mr Gunson submitted it should, and as I accepted it to be, on 2 December 2016.

116    I reject Mr Walker’s submission that what is disclosed in Mr Hannan’s affidavit (12 December 2016, pp 140-184), and read as part of the Applicants’ case, adds an important factor that I should take into account when balancing those considerations. That material was a draft unsigned deed of lease. Mr Walker submitted it clearly showed (and Ms Sorbello accepted it may be inferred) that the Third Respondent (as the applicant for the proposed new pharmacy) intends, if approved, subsequently to relocate to tenancy T4 within the main building of Cove Hill Shopping Centre. There is no dispute that the distance between T4 wherever it might be located in the main building of Cove Hill Shopping Centre would be less than 500m as measured in a straight line from the First Applicants’ approved premises.

117    Mr Walker submitted that therefore the contested proposed site for the supply of pharmaceutical benefits should be viewed by the Court as a contrivance to get around the Rules. It would permit something that is directly prohibited to be achieved indirectly.

118    He submitted, as a matter of discretion, the circumstance in which the approval is sought is a mere contrivance and points strongly toward the balance of convenience tilting towards the Applicants.

119    My reason for rejecting the submission, at least at this interlocutory stage, is that it appears to address the Third Respondent’s future intentions rather than the relevant statutory tests. Provided the Rules are complied with the Authority must approve an application. If a temporary demountable building in a carpark is, as a matter of proper construction of the Rules, premises within a facility (small shopping centre) and is located not less than 500m from the closest approved premises measured in a straight line and all other requirements are met the Authority must recommend approval of the application to the Secretary. Without the benefit of further argument I am doubtful that a Court could restrain what appears to be a lawful act on the basis of a party’s intention to make a further application after the Secretary has granted approval for the first.

120    Ms Sorbello submitted that if a subsequent application for relocation is made which would bring the premises nearer than 500m to another approved premises and it is an application that the Authority must recommend for approval that is simply a consequence of the Rules. At first blush that appears to be correct. Ms Sorbello submitted that to be the purpose of the Rules, and while I would be hesitant to accept that characterisation nothing turns on it. My rejection of the Applicants’ argument in these interlocutory proceedings does not, of course, foreclose this issue being reconsidered after full argument in the substantive proceedings.

Balance of convenience

121    Ms Sorbello advised from the bar table that fit out of the premises had begun but no staff had been engaged. A pharmacist had been appointed but was working in other shops operated by the Third Respondent on relief and there was no suggestion that that employment would be in jeopardy if an extension of the injunction was to be granted. In my view, while the installation of the demountable building in the carpark may have involved some expense the Third Respondent had been told by the Authority that there had been objections to the pharmacy application. It is therefore reasonable to proceed on the basis that the Third Respondent would have been aware that there was potential for those opposing the application to seek review of any approval. There was an element of commercial risk in the Third Respondent having voluntarily embarked on that course and incurred those expenses, at least some of which appear to have been incurred prior to being advised of the Authority’s recommendation and most certainly before the time for the commencement of judicial review proceedings had expired. Moreover if the Applicants are ultimately unsuccessful, any damages suffered, in consequence of the grant of an injunction, by the Third Respondent or any other third party will be adequately addressed by the terms of the usual undertaking.

122    For those reasons the orders made on 2 December 2016 should remain in place until the hearing of the application or until further order.

123    With the concurrence of the parties I will hear the substantial application as a matter of priority in the New Year.

Associate:    

Dated:    24 February 2017