FEDERAL COURT OF AUSTRALIA

Watson v Australian Community Pharmacy Authority [2012] FCAFC 142

FEDERAL COURT OF AUSTRALIA

Watson v Australian Community Pharmacy Authority [2012] FCAFC 142

CORRIGENDUM

1    In the appearance for Counsel for the Second Respondents on the cover page of the Reasons for Judgment, the names should read “Mr P Flanagan SC with Mr D Favell”.

Associate:

Dated:    18 October 2012

THE COURT ORDERS THAT:

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

2.    The appeal be dismissed.

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

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

REASONS FOR JUDGMENT

THE COURT:

1    This is an appeal from an order of a judge of this Court dismissing an application brought by the appellant under the Administrative Decisions (Judicial Review) Act 1977 (Cth) (ADJR Act) for judicial review. No application was made under s 39B of the Judiciary Act 1903 (Cth).

2    The first and third respondents were not represented on the appeal, but were content to submit to any orders of the Court, except those relating to costs. The second respondents acted as contradictors.

3    For the reasons that follow, the appeal must be dismissed.

Facts and Legislation

4    For about the last 12 years the appellant has conducted a pharmacy business under the name of Health Care Chemist from premises at 60 Burringbar Street, Mullumbimby in New South Wales.

5    On or about 6 March 2010 the second respondents, who are also pharmacists, applied under s 90 of the National Health Act 1953 (Cth) (the Act) for approval to supply pharmaceutical benefits at premises at 107 Dalley Street, Mullumbimby (the proposed premises). The application was to relocate the second respondents’ existing pharmacy business which is carried on at Bogangar to the proposed premises. The proposed premises are located near the appellant’s premises.

6    Part 7 of the Act provides for the provision of pharmaceutical benefits by the Commonwealth. The scheme provides for the provision of designated drugs and medical preparations to persons for whom they are prescribed by a medical practitioner at the expense of the Australian Government, subject to financial contribution by those persons. It does so by providing for pharmaceutical benefits. Relevantly, for the purpose of this appeal, a person is not entitled to receive a pharmaceutical benefit unless it is supplied by an approved pharmacist, at or from premises in respect of which the pharmacist is for the time being approved, and subject to other conditions which are not relevant: s 89 of the Act. The National Health (Australian Community Pharmacy Authority Rules) Determination 2006 (the Rules) supplements the legislative scheme by regulating the location of approved pharmacies.

7    It is necessary, therefore, that a pharmacist, who wishes to dispense pharmaceutical benefits in accordance with the Act, applies for the approval of the supply of pharmaceutical benefits at or from particular premises.

8    Section 90(1) authorises the third respondent, the Secretary of the Department of Health and Ageing (the Secretary), to approve a pharmacist’s application for the purpose of supplying pharmaceutical benefits at or from particular premises. However, before the Secretary is entitled to do that, the application made by the pharmacist must be referred to the first respondent, the Australian Community Pharmacy Authority (the Authority): s 90(3A).

9    The Authority is established by Division 4B of the Act, and in particular s 99J. The membership of the Authority is provided for in s 99N. Pursuant to s 99N, the Authority comprises a Chairperson, two pharmacists nominated by the Pharmacy Guild of Australia, one pharmacist nominated by the Pharmaceutical Society of Australia, an officer of the Department of Health and Ageing nominated by the third respondent, and a person who, in the relevant Minister’s opinion, is an appropriate person to represent the interests of consumers.

10    The functions of the Authority are provided for in s 99K:

(1)    The functions of the Authority are:

(a)    to consider applications under section 90; and

(b)    to make, in respect of an application under section 90:

(i)    a recommendation whether or not the applicant should be approved under that section in respect of particular premises; and

(ii)    if an approval is recommended—recommendations as to the conditions (if any) to which the approval should be subject; and

(2)    In making a recommendation under subsection (1), the Authority must comply with the relevant rules determined by the Minister under section 99L.

(3)    All recommendations of the Authority under subsection (1) are to be made to the Secretary.

11    The Authority is given power to do all things necessary or convenient to be done for and in connection with the performance of its functions: s 99M.

12    The rules which are referred to in s 99K(2) must be made by the Minister: s 99L. The relevant rules are contained in the Rules.

13    Section 9 of the Rules requires the Authority to recommend that an application by a pharmacist for approval to supply pharmaceutical benefits at particular premises be approved if the Authority is satisfied, in a case such as this, that the requirements set out in Schedule 2 to the Rules are met. It provides:

The Authority must recommend that an applicant be approved under section 90 of the Act in respect of particular premises if:

(a)    for an application that involves the cancellation of an approval (the existing approval) that is in force in respect of approved premises (the existing premises):

(i)    the application states that it is of a kind mentioned in column 2 of an item of Part 1 of Schedule 1; and

(ii)    the requirements set out in column 3 of that item are met; and

(iii)    the requirements set out in Schedule 2 and Part 1 of Schedule 3 are met; and

(iv)    for an application described in column 2 of an item of Part 2 of Schedule 3 — the requirement set out in column 3 of that item is met; and

(b)    for an application to which paragraph (a) does not apply:

(i)    the application states that it is of a kind mentioned in column 2 of an item of Part 2 of Schedule 1; and

(ii)    the requirements set out in column 3 of that item are met; and

(iii)    the requirements set out in Schedule 2 are met.

14    Section 10 provides:

The Authority must recommend that an applicant not be approved under section 90 of the Act in respect of particular premises if a requirement that, under paragraph 9(a) or (b), applies in relation to the application is not met.

15    The Authority has no discretion. It must recommend that an application be approved if satisfied of the matters in section 9, and it must recommend that an application not be approved if not so satisfied.

16    Item 201 of Schedule 2 addresses the “General Requirements” which must be met. It provides:

The Authority is satisfied that:

(a)    the applicant had, on the date of the application, and has, on the date on which the Authority makes a recommendation in respect of the application, a legal right to occupy the proposed premises; and

(b)    the proposed premises, on the date of the application and on the date on which the Authority makes a recommendation in respect of 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 date on which the Authority makes a recommendation in respect of 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.

17    The approval that was sought by the second respondents relied upon the provisions of Item 107 of Part 1, Schedule 1 of the Rules.

18    Medicare Australia, as a delegate for the third respondent, received the application on 8 March 2010. On 10 March 2010 Medicare Australia referred the application to the Authority for the purpose of obtaining a recommendation as to whether or not the application should be approved.

19    On 15 March 2010 the Authority received the application. On 31 March 2010 the Authority wrote to the appellant, who objected to the application, seeking comments on whether the application met the relevant requirements contained in the Rules.

20    On 16 April 2010 submissions and accompanying documents in opposition to the application for approval were provided by the appellant’s solicitor.

21    On 30 April 2010 the Authority met and decided to recommend that the second respondents’ application be refused on the ground that the Authority was not satisfied that the proposed premises were at least 200 metres by straight line from the nearest approved pharmacy. Paragraph 2 of column 3 of Item 107 in Schedule 1, Part 1 of the Rules provided that in order to satisfy Item 107 the proposed premises had to be at least 200 metres from the nearest approved premises. The nearest approved pharmacy was not the appellant’s pharmacy, but was a pharmacy which had been recently recommended for approval, which premises were approximately 110 metres by straight line from the proposed premises.

22    In June 2010 the second respondents applied to the Administrative Appeals Tribunal (AAT) for a review of the Authority’s decision. After that application was made the application for the other premises was withdrawn and, as a consequence, on 21 October 2010 the AAT remitted the second respondents’ application for further consideration by the Authority pursuant to s 42D of the Administrative Appeals Tribunal Act 1975 (Cth).

23    On 22 October 2010 further submissions and documents were provided to the Authority by the appellant’s solicitor in opposition to the application.

24    On 29 October 2010 the Authority considered the application at its meeting and on the same day recommended to Medicare Australia that the application be approved on the basis that the requirements of Items 107, 201, 301 and 302 of the Rules had been met. Item 201(a) required the Authority to be satisfied that the application met all the relevant requirements of the Rules, which included a requirement that the second respondents had a legal right to occupy the proposed premises both on the date of the application, and on the date when the Authority makes a recommendation in respect of the application.

25    On 8 November 2010 the Authority received a request under s 13(1) of the ADJR Act from Mr Hannan, solicitor for the appellant, seeking a statement of reasons regarding the decision it made on 29 October 2010.

26    On 1 December 2010 the Authority published its reasons for recommending to Medicare Australia on behalf of the Secretary that approval be granted for the supply of pharmaceutical benefits at the proposed premises.

27    As we have said, in order for the Authority to make the decision to recommend that the second respondents’ application be approved it needed to be satisfied that the second respondent had a legal right to occupy the proposed premises.

28    On 25 March 2009 the second respondents entered into a lease with Paul Haselgrove, Anne Haselgrove, Alexandra Evans and Lionel Evans to lease the proposed premises for a period of nine months from 9 March 2009 to 8 December 2009.

29    The lease provided in clause 4 for four options for renewal of three years each commencing on 9 December 2009 and culminating on 8 December 2021.

30    On 25 October 2010, four days before the Authority made its decision, the second respondents’ solicitors, Maunsell Pennington, wrote to the Authority in the following terms:

We refer to previous correspondence. We attach copies of Agreements between our client and the landlord of the premises which are the subject of the application to extend the lease beyond the expiry date, the first date of 8th December 2009 and the second the 28th February 2011.

Item 201 requires our client to satisfy the Authority of its legal right to occupy the premises at the date of the Application and at the date the Authority the [sic] considers the Application.

The lease of the premises which accompanied the Application expired on 8th December 2009, the first of the attached documents extends the term to 8th May 2010. Our client’s application was received by Medicare on 8th March 2010.

Assuming that the Authority considers our client’s Application at its meeting on 29th October 2010 the second document confirms the extension of the Lease until 28th February 2011.

In each of these cases the agreements for extension relate to periods of less than three (3) years. Accordingly to be enforceable the agreements are not required to be in any particular format, nor in fact are they required to be in writing.

It is submitted that the documents attached establish the Applicant’s right to occupy the premises both at the time of Application and on the date of its consideration by the Authority.

(Emphasis in original)

31    The documents which were attached are dated 9 December 2009 and 22 October 2010. They are in the following terms:

9/12/2009

On behalf of Paul Victor Haselgrove, Anne Maree Haselgrove, Alexandra Gay Evans and myself, Lionel Scott Evans, we agree to extend the lease on 107 Dalley Street, Mullumbimby NSW 2482 by a further 6 months from the option renewal date from 8 December 2009 to 8 May 2010.

We further agree to extend the options to renew dates by 6 months each.

Signed

Lionel Scott Evans [signed]

Accepted

22/10/10

On behalf of Paul Victor Haselgrove, Anne Maree Haselgrove, Alexandra Gay Evans and myself, Lionel Scott Evans, we confirm our agreement to extend the lease on 107 Dalley Street, Mullumbimby NSW 2482 to 28th February 2011.

    We further agree to extend the options to renew dates by 6 months each.

Signed

Accepted

32    The first extension was signed by Mr Evans, one of the four lessors. The second extension was signed by Mr Haselgrove, another of the four lessors. Although his name appears on the second document, Mr Evans did not sign the document. Both documents contained the signatures of the second respondents.

The Appellant’s Complaint

33    The appellant sought judicial review of the Authority’s decision under the ADJR Act.

34    The appellant claimed that there was no evidence before the Authority that on the date of the application the second respondents had a legal right to occupy the proposed premises as required under Item 201(a) of Schedule 2 to the Rules, and that in those circumstances the granting of the “approval” by the Authority was an improper exercise of power and the Authority did not have jurisdiction to make the decision.

35    In the Authority’s reasons, the Authority said in relation to the question of whether the Authority was satisfied the second respondents had a legal right to occupy the proposed premises:

201(a) – The applicant had, on the date of application, and has, on the date on which the Authority makes a recommendation in respect of the application, a legal right to occupy the proposed premises.

31.    The Authority considered the signed Lease between the lessors and the lessees, and the two agreements to extend the lease, signed by both parties.

32.    On the basis of this evidence, the Authority was satisfied that the Applicants had, on the date of application, and on the date on which the Authority makes a recommendation in respect of the application, a legal right to occupy the proposed premises a legal right to occupy the proposed premises [sic].

36    The appellant claimed that the lease which commenced on 9 March 2009 had expired, and that the two documents of 9 December 2009 and 22 October 2010 purporting to extend the lease had no effect. The appellant claimed that in those circumstances, as at the date of the decision, 29 October 2010, the second respondents did not have a legal right to occupy the proposed premises.

37    In support of that claim the appellant argued that there was no evidence that the two lessors who signed the two separate documents had actual or ostensible authority to act as agents on behalf of the other three co-owners, and that no such authority could be implied from the representation made in signing the two documents.

38    The second respondents argued that there was ample evidence before the Authority in the form of the lease agreement and the two documents dated 9 December 2009 and 22 October 2010 upon which the Authority could be satisfied that the second respondents had a legal right to occupy the proposed premises.

The Primary Judge’s Reasons

39    The primary judge considered the interaction of s 5(1)(h) of the ADJR Act and s 5(3), and whether s 5(3) of the ADJR Act limits or expands the operation of s 5(1)(h). In the end he said that he did not need to decide that matter, because on any interpretation of s 5(3) the application had to fail.

40    The primary judge was of the opinion that the state of satisfaction required of the Authority on the application by the second respondents was that described by the High Court in The Australian Heritage Commission v Mount Isa Mines Ltd (1997) 187 CLR 297; [1997] HCA 10. In that case the High Court held that the provision under consideration was of a kind where the decision is made conditional upon the opinion or satisfaction of certain matters of a public authority with the consequence that the merits of the matter are not examinable on judicial review.

41    The primary judge found that it was for the Authority to determine whether it was satisfied as to whether the second respondents had a legal right to occupy the proposed premises, and it followed that regardless of whether s 5(3)(a) of the ADJR Act restricted or expanded the operation of s 5(1)(h), the subsection did not apply to the decision that the Authority was required to make.

42    In the alternative, the primary judge found that there was evidence before the Authority which supported the Authority’s decision, including the lease document and the two documents dated 9 December 2009 and 22 October 2010, and the material included in the information and submissions made by the second respondents’ solicitor in the letter dated 25 October 2010. He said that the provisions of s 5(3)(b) required the appellant to show that there was no evidence before the Authority, which the appellant was unable to do.

Grounds of Appeal

43    The appellant has identified seven separate grounds of appeal, which are:

1.    The learned trial judge erred in holding that the appellant failed to show that there was no evidence upon which the first respondent could be satisfied that, at the relevant dates, the second respondents had a legal right to occupy premises situated at 107 Dalley Street, Mullumbimby (“the Dalley Street Premises”) as required by the National Health (Australian Community Pharmaceutical Authority Rules) Determination Schedule 2, Item 201(a).

2.    In so holding, his Honour erred in concluding that it was not open to the Court to go behind the statement of the first respondent, in deciding to recommend approval of the second respondents’ application to supply pharmaceutical benefits at or from the Dalley Street Premises, that it was satisfied that, as at the relevant dates, the second respondent[s] had a legal right to occupy the Dalley Street Premises.

3.    In so holding, his Honour erred in concluding that s.5(3)(a) of the Administrative Decisions (Judicial Review) Act 1977 (Cth) did not apply to the decision the first respondent was required to make under Schedule 2, Item 201(a) because that decision required only that the first respondent be satisfied “in its own mind” that the second respondents had a legal right to occupy the Dalley Street Premises, not whether that fact existed as an objective fact.

4.    In so holding, his Honour erred in concluding, alternatively, that the first respondent had before it evidence and material from which it could be satisfied that the second respondents had a legal right to occupy the Dalley Street Premises at the relevant dates.

5.    In so holding, his Honour erred in concluding that the first respondent could be so satisfied when, as a matter of law, it could not have been so satisfied.

6.    In so holding, his Honour erred in concluding that, on the facts of this case, Mr Evans (by whom agreements were signed purporting to extend a lease of the Dalley Street Premises to the second respondents) had the legal capacity to bind his co-owners to those agreements.

7.    His Honour erred in failing to hold that there was no evidence or other material before the first respondent from which, as a matter of law, it could be satisfied that the second respondents had a legal right to occupy the Dalley Street Premises at the relevant dates.

Consideration of Appeal

44    As he did before the primary judge, the appellant argued that at the date of the application, 6 March 2010, the second respondents did not in fact have a legal right to occupy the proposed premises, and that the Authority could not be satisfied, as it had to be under Item 201(a), of that fact. Therefore, it was contended that the Authority had no discretion and had to recommend the application not be approved.

45    The lease expired in its terms, if not renewed by the exercise of the first option, on 8 December 2009. The document dated 9 December 2009 purported to extend the term of the lease from the option renewal date, which was the date of expiry of the lease, to 8 May 2011. The document did not purport to record the exercise by the second respondents of the renewal of the lease pursuant to clause 4 of the lease. If the document operated to extend the lease, then the second respondents would have lost the benefit of the first option which had to be exercised on 7 December 2009. Item 12 in Annexure A to the lease provides that the first option must be exercised between one month and one day prior to the terminating date in the lease. The second respondents would in that circumstance also have lost the benefit of the other three options.

46    However, the parties seemed to have assumed that the purport of the first document was to extend both the lease and the date upon which the first option could be exercised until 8 May 2010, which was a period of 5 months, although the document refers to 6 months. If either of the parties had contended that the effect of the document was only to renew the lease and not to extend the options, we would have agreed. The options had expired because the second respondents had not by then exercised the options in accordance with the lease. But this contention was not put or argued at first instance or on appeal.

47    On the construction the parties put upon the first document, dated 9 December 2009, the appellant argued that at law the document had no effect. The appellant relied upon s 23C(1)(a) of the Conveyancing Act 1919 (NSW) (Conveyancing Act), which provides:

(1)    Subject to the provisions of this Act with respect to the creation of interests in land by parol:

(a)    no interest in land can be created or disposed of except by writing signed by the person creating or conveying the same, or by the person’s agent thereunto lawfully authorised in writing, or by will, or by operation of law,

…

48    The appellant argued that s 23C(1)(a) meant that the second respondents could not obtain an interest in land because not all of the lessors or the lessors’ agent had signed the document. It was assumed for the argument that to extend a lease was to create an interest in land.

49    The appellant also argued that the second respondents could not rely upon s 23D of the Conveyancing Act because of the provisions of s 23D(2). Section 23D provides:

(1)    All interests in land created by parol and not put in writing and signed by the person so creating the same, or by the person’s agent thereunto lawfully authorised in writing, shall have, notwithstanding any consideration having been given for the same, the force and effect of interests at will only.

(2)    Nothing in this section or in sections 23B or 23C shall affect the creation by parol of a lease at the best rent which can reasonably be obtained without taking a fine taking effect in possession for a term not exceeding three years, with or without a right for the lessee to extend the term at the best rent which can reasonably be obtained without taking a fine for any period which with the term would not exceed three years.

50    It was argued that, because the lease was purportedly extended for a period of six months, which would allow the exercise of options for a further period of 12 years, s 23D(2) did not apply.

51    It was contended that notwithstanding the language of the document, and in particular the introductory words of the document “On behalf of …”, the document was not signed by Mr Evans as agent for his co-lessors. It was contended that Mr Evans was not able to bind his co-lessors so that in those circumstances the document did not grant the second respondents a legal right to occupy the proposed premises.

52    The appellant also argued that the second document, dated 22 October 2010, had no legal effect because in this case Mr Haselgrove could not bind his co-lessors, and therefore the lease was not extended and the second respondents did not have the legal right to occupy the premises at the date when the application was considered by the Authority. It was contended that that was a second reason that the Authority could not be satisfied of Item 201(a).

53    However, in relation to this document the appellant did not argue that s 23C of the Conveyancing Act applied. The appellant conceded that if Mr Haselgrove had authority to bind his co-lessors then the document had the effect of extending the lease from the date of the document to 28 February 2011. Because the document did not purport to extend the options to renew, the extension of the lease was for a period of four months and was protected by s 23D(2). Therefore, if Mr Haselgrove had authority to bind the co-lessors, the appellant conceded that the Authority could be satisfied that the second respondents had a legal right to occupy the premises as at the date of the Authority’s decision, namely 29 October 2010. But the appellant argued that that would not save the second respondents because they still could not satisfy the Authority that they had that legal right when they made their application on 6 March 2010, and so the Authority was bound not to recommend the application be approved.

54    There was other material before the Authority. The Authority had the letter from the second respondents’ solicitors which enclosed the two documents.

55    In that letter the second respondents’ solicitors said that the lease was extended until 8 May 2010 and the second respondents’ application was received by Medicare Australia on 8 March 2010. It also said that assuming the second respondents’ application was considered by the Authority at its meeting on 29 October 2010, the second document evidenced an extension of the lease until 28 February 2011.

56    The second respondents’ solicitors wrote:

In each of these cases the agreements for extension relate to periods of less than (3) three years. Accordingly to be enforceable the agreements are not required to be in any particular format, nor in fact are they required to be in writing.

57    The letter from the second respondents’ solicitors was to the effect that the second respondents had a legal right to occupy the proposed premises as at the date of the second respondents’ application, and would have a legal right as at the date that the Authority would consider and recommend approval.

58    The Authority was entitled to rely upon that material in its consideration of the application on 29 October 2010.

59    The appellant’s application for judicial review is made under s 5(1)(h) of the ADJR Act.

60    Section 5(1)(h) provides:

(1)    A person who is aggrieved by a decision to which this Act applies that is made after the commencement of this Act may apply to the Federal Court or the Federal Magistrates Court for an order of review in respect of the decision on any one or more of the following grounds:

…

(h)    that there was no evidence or other material to justify the making of the decision;

…

61    There was no dispute that the appellant had standing as a person who was aggrieved by the decision made by the Authority, or that the decision made by the Authority was capable of being reviewed under s 5.

62    Section 5(3) is also relevant:

(3)    The ground specified in paragraph (1)(h) shall not be taken to be made out unless:

(a)    the person who made the decision was required by law to reach that decision only if a particular matter was established, and there was no evidence or other material (including facts of which he or she was entitled to take notice) from which he or she could reasonably be satisfied that the matter was established; or

(b)    the person who made the decision based the decision on the existence of a particular fact, and that fact did not exist.

63    The first consideration on an application of this kind must be the legislation which empowers and instructs the decision maker as to the decision to be made.

64    In this case the legislation provides for a non-specialist body made up predominantly of pharmacists to consider a limited aspect of a wider application for the purpose of making a recommendation to the Secretary as to whether the Secretary should approve the application.

65    However, the Authority’s recommendation does not bind the Secretary to grant an approval because s 90(3B) of the Act allows the Secretary to refuse to grant an approval even if the grant has been recommended by the Authority.

66    Before the Authority can make its recommendation for an approval, the Authority must be satisfied of the matters in Item 201 of Schedule 2 to the Rules. The Authority must be satisfied that the proposed premises are accessible by members of the public at large, but not directly accessible by the public from within a supermarket. The Authority must also be satisfied that within six months after the date on which the Authority makes the recommendation the applicant will be able to begin operating a pharmacy at the proposed premises.

67    Relevantly, for the purposes of this appeal, the Authority must be satisfied that the applicant had on the two separate dates, being the date of the application and the date on which the Authority makes the recommendation in respect of the application, a legal right to occupy the proposed premises.

68    Section 9 of the Rules requires the Authority to make the recommendation if satisfied of the matters in Item 201.

69    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.

70    The Authority does not need to be concerned about how the legal right to occupy the proposed premises arises. It does not need to know whether the applicant has a lease that might be registered, or, if it is not in registrable form, might be enforced in a particular way. It only needs to know that the applicant has a present entitlement to occupy the proposed premises.

71    In this case the appellant made much of the casual arrangements between the lessors and the second respondents in relation to the second respondents’ rights to occupy the proposed premises. As we have said, the argument was that because the purported extensions of the lease were not legally enforceable then the Authority could not be satisfied that the appellant had a legal right to occupy the proposed premises.

72    In our opinion that argument is misconceived because, as we have said, the Authority did not need to be satisfied that the second respondents had a lease upon which they could rely for their occupation. The Authority only needed to be satisfied that they had a legal right to occupy the premises for the purpose of carrying on the business of a pharmacy as at the two relevant dates. The existence of a lease is evidence that a party to the lease has a legal right to occupy the premises the subject of the lease. However, the absence of a lease does not mean that there is no legal right to occupy the premises. As we have said, a licence or some other agreement might also demonstrate a legal right to occupy the premises for the purposes of Item 201(a) of Schedule 2 of the Rules.

73    The composition of the Authority is inconsistent with the appellant’s argument that the Authority has to be satisfied of the legal relationship between an applicant and the owner of the proposed premises before it can be satisfied that the applicant has a legal right to occupy the proposed premises. The majority of the members of the Authority are pharmacists who have no legal training and would not necessarily understand the legal differences between ownership, leasing, licensing, and other dealings in land. They are likely to have practical experience, because it is likely that they would be in business themselves, and would have obtained premises for the purpose of carrying on a business. However, it is unlikely Parliament would have expected persons unqualified in the law to have considered the issue of whether an applicant has a legal right to occupy proposed premises by reference to the vagaries of property law. The Authority’s decision to recommend approval has to be understood in this light.

74    The appellant’s argument relies solely upon the fact that there was no evidence or other material to justify the making of the decision.

75    An analysis of the interaction of s 5(1)(f) of the ADJR Act, which speaks of a review involving an error of law, and s 5(1)(h) and s 5(3) was undertaken by Mason CJ in Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321, and at 358 in that case Mason CJ said:

The better view, one which seeks to harmonize the two grounds of review, is to treat “error of law” in s. 5(1)(f) as embracing the “no evidence” ground as it was accepted and applied in Australia before the enactment of the A.D.(J.R.) Act and to treat the “no evidence” ground in s. 5(1)(h), as elucidated in s. 5(3), as expanding that ground of review in the applications for which pars (a) and (b) of s. 5(3) make provision. Within the area of operation of par. (a) it is enough to show an absence of evidence or material from which the decision-maker could reasonably be satisfied that the particular matter was established, that being a lesser burden than that of showing an absence of evidence (or material) to support the decision. This interpretation of the two grounds of review enables one to say that s. 5(1)(h) and (3)(a) have the effect of overcoming to a limited extent and in a limited area the restrictions on the traditional “no evidence” ground considered by Barwick C.J. and Gibbs J. in Sinclair v. Maryborough Mining Warden (1975) 132 C.L.R., at pp. 481, 483.

76    However, the “no evidence” ground cannot succeed if there is some evidence of a fact, or some evidence which would provide a basis for the inference of a fact. In Broadbridge v Stammers (1987) 16 FCR 296, the Full Court considered a decision made by a delegate pursuant to a delegation of power from the Australian Post Office Commission to close a post office. The Full Court, in considering the extent of the powers given by a delegation, said at 300-301:

Having regard to the general area of administration into which it is necessary to enter if one adopts the interpretation of the delegation which treats the requirements regarding policy as pre-conditions, it is useful to bear in mind the words of Lord Brightman in Puhlhofer v Hillingdon London Borough Council [1986] AC 484 at 518:

“Where the existence or non-existence of a fact is left to the judgment and discretion of a public body and that fact involves a broad spectrum ranging from the obvious to the debatable to the just conceivable, it is the duty of the court to leave the decision of that fact to the public body to whom Parliament has entrusted the decision-making power save in a case where it is obvious that the public body, consciously or unconsciously, are acting perversely.”

77    That statement was approved by Mason CJ in Australian Broadcasting Tribunal v Bond at 358-360 where his Honour said:

The Federal Court has expressed its agreement with statements made by the House of Lords to the effect that courts exercising judicial review should leave the finding of facts to the public body appointed for that purpose by the legislature except where the public body acts “perversely”: see Reg. v Hillingdon London Borough Council; Ex parte Puhlhofer; see, e.g., Broadbridge v. Stammers; Apthorpe v. Repatriation Commission. In this context, “perversely” signifies acting without any probative evidence: see Television Capricornia Pty. Ltd. v. Australian Broadcasting Tribunal; Smith v. General Motor Cab Co. Ltd. Thus, it has been held that the A.D.(J.R.) Act does not permit general review of findings of fact, in the absence of error of law: Borkovic v. Minister for Immigration. In particular, in Western Television Ltd. v. Australian Broadcasting Tribunal Pincus J. held that the presence of s. 5(1)(h) and (3) meant that an error of law within the meaning of s. 5(1)(f) could not include a mere lack of evidence, as distinct from a complete absence of evidence.

However, in several decisions it has been suggested that findings of fact which are unreasonable or arbitrary may be reviewed under s. 5(1)(e) and (2)(a) and (b): see Singh v. Minister for Immigration and Ethnic Affairs; Independent F.M. Radio Pty. Ltd. v. Australian Broadcasting Tribunal; Minister for Immigration, Local Government and Ethnic Affairs v. Pashmforoosh. In the last-mentioned case, Davies, Burchett and Lee JJ. said.

“Thus, decisions may be set aside because, being insufficiently supported by reason, they appear to be an improper exercise of the power conferred or arbitrary or because there was no evidence or other material sufficient to justify the making of the decision or the decision was so unreasonable that no reasonable person could have so exercised the power. The making of, or failure to make, a particular finding of fact in the course of the reasoning process may equally be attacked on any such ground. The taking into account of a fact found unreasonably or the failure to take into account a fact that a reasonable decision-maker would have found and taken into account provides a ground of review under ss. 5(1)(e) and 5(2)(a) and (b) of the A.D.(J.R.) Act.” (Emphasis added.)

This statement is unobjectionable to the extent that a finding of fact constitutes a “decision” such that it can be reviewed for unreasonableness and on other appropriate grounds. But if the finding does not constitute a “decision”, it is beyond review independently of such a “decision”. In accordance with what I have already said, a finding of fact will then be reviewable on the ground that there is no probative evidence to support it and an inference will be reviewable on the ground that it was not reasonably open on the facts, which amounts to the same thing.

(Footnotes omitted)

78    Section 5(3) identifies the only circumstances where a party may establish that there was no evidence or other material to justify the making of the decision.

79    A party may rely on either (a) or (b) of s 5(3). If the party relies on s 5(3)(a) the party will not succeed in a review based on s 5(1)(h) unless the party can establish two matters: first, that the decision maker was required by law to reach that decision only if a particular matter was established; and secondly, there was no evidence or other material from which the decision maker could be reasonably satisfied that the matter was established.

80    Section 5(3)(a) therefore requires the appellant on this appeal to first, identify the particular matter that needed to be established for the decision. Relevantly, in this case, it is the Authority’s satisfaction that at the two dates the second respondents had a legal right to occupy the proposed premises. Secondly, the appellant needed to establish that the Authority reached its satisfaction when there was no evidence or material on which the Authority could have reasonably been satisfied of the second respondents’ legal right to occupy the proposed premises. This is so notwithstanding only one of the lessors signed those documents. It was not necessary for the Authority to investigate in any detail whether the signatory in each case was clothed with the requisite authority to bind all lessors. In this case the Authority had evidence that the lease had been extended on 9 December 2009, and further extended on 22 October 2010. It had the representations of the second respondents’ solicitors to the same effect, together with an assertion by those solicitors that the two documents granting the extension need not be in any particular form nor in fact be in writing.

81    There was evidence to support the Authority’s conclusion that the second respondents had, at the two particular times, a legal right to occupy the proposed premises.

82    For the reasons given, the appellant has failed to establish that which he is required to establish under s 5(1)(h) and s 5(3)(a) of the ADJR Act. He has not established that there was no evidence or material upon which the Authority could reach its satisfaction. He has not established that the evidence and material upon which the Authority relied meant that the Authority could not be reasonably satisfied that the second respondents had a legal right to occupy the proposed premises.

83    If the appellant had wished to rely upon s 5(3)(b) the appellant needed to establish to this Court’s satisfaction that the Authority’s satisfaction was based upon a fact that did not exist. The appellant would have needed, if reliance was placed upon s 5(3)(b), to prove that the second respondents did not have a legal right to occupy the proposed premises. The appellant did not attempt to do so and eschewed any reliance upon s 5(3)(b).

84    Although the issue was not raised in the grounds of appeal, and only obliquely in the appellant’s written submissions, the appellant’s counsel at times contended during his oral submissions that the Authority’s satisfaction that the second respondents had a legal right to occupy the proposed premises was a jurisdictional fact.

85    We do not agree with that contention. Item 201 of Schedule 2 requires the Authority to be satisfied that the applicant has a legal right to occupy the proposed premises and the remaining matters in the Item. If the appellant’s oral submissions were correct, there would be no reason to treat paragraph (a) as a jurisdictional fact and paragraphs (b) to (d) as not jurisdictional facts. It was not contended that the other paragraphs of Item 2 had to be established objectively. The matters upon which the Authority had to be satisfied were for the Authority and, provided there was evidence to support the Authority being satisfied, not for review by the Court: Parisienne Basket Shoes Pty Ltd v Whyte (1938) 59 CLR 369 at 391 per Dixon J; Corporation of the City of Enfield v Development Assessment Commission (2000) 199 CLR 135; [2000] HCA 5; The Australian Heritage Commission v Mount Isa Mines Ltd.

Conclusion

86    The primary judge was right to dismiss the application. There was evidence before the Authority to support the finding that the second respondents had a legal right to occupy the premises, and the Authority was entitled to make that finding based on that evidence.

The Appellant’s Interlocutory Application

87    The Court reserved its judgment. On 3 July 2012, the Registry received an interlocutory application in which the following orders were sought:

1.    That the hearing of the appeal in proceedings QUD386 of 2011 be re-opened to:

a.    allow the Applicant to amend the Notice of Appeal to include a ground of review pursuant to s.5(1)(g) of the Administrative Decisions (Judicial Review) Act 1977 as the decision of the First Respondent was induced by fraud as the extension to lease dated 9 December 2009 was created after that date for the purposes of inducing the First Respondent to believe that the Lease over the Premises was validly extended; and

b.    allow the applicant to adduce the evidence of Mr Mark Cochrane in support of the amendment to the Notice of Appeal;

2.    That the re-opened appeal be remitted to the trial division for further hearing to determine the proposed further ground of appeal above.

3.    That the costs of and incidental to the application be costs in the cause.

88    The application was lodged without any accompanying affidavit.

89    On 9 July 2012, Lander J’s associate wrote to the appellant and requested the appellant file an affidavit in support of the application that addressed the reasons why the application was made so late, the evidence in support of the claim of fraud, and the evidence sought to be adduced from Mr Mark Cochrane.

90    On 9 July 2012, the appellant filed an affidavit of Mr Mark Cochrane sworn 2 July 2012. In that affidavit, Mr Cochrane said that he is the principal real estate agent of the firm “Mark Cochrane Real Estate”. In March 2010, the appellant approached him to purchase the proposed premises.

91    The effect of Mr Cochrane’s evidence was that he acted on behalf of the appellant in negotiating with Mr Evans (one of the co-owners of the property) to purchase the proposed premises, part of which was the subject of the lease to the second respondents.

92    During those negotiations, Mr Evans expressed a willingness to sell the property and in mid March indicated the owners would sell for $1.6m. The appellant was not prepared to pay that amount. During the negotiations Mr Cochrane was provided with the lease between the owners and the second respondents, and was advised by Mr Evans that the second respondents had not exercised the option in the lease and the owners were therefore able to give vacant possession. The leasing documents supplied by the owners did not contain an extension of the lease.

93    On 7 August 2010, another real estate firm auctioned the property, but it was passed in without a bid reaching the reserve of $1.5m.

94    After the auction, Mr Cochrane sought copies of the leases on the property and was provided with a lease to the second respondents with a commencing date of 1 August 2010 signed by the second respondents, but not the owners.

95    Mr Cochrane further deposed that in all his dealings with the registered proprietors of the property, he always understood that following the expiration of the second respondents’ original lease, no option had been exercised and the lease had not been extended. Notwithstanding the owners had a requirement to provide details of all leases associated with the property to facilitate a sale, at no time was he provided with a copy of a document dated 9 December 2009 that purports to extend the second respondents’ lease. Mr Cochrane states, rather remarkably for a potential witness, that this document is in direct conflict with all the statements and documents provided to him at the relevant times.

96    On 17 July 2012, an affidavit of the appellant sworn 13 July 2012 was filed.

97    In that affidavit, the appellant stated that he believed the document purporting to extend the second respondents’ lease was fraudulently created after the second respondents’ application for approval was remitted to the first respondent in October 2010. He identified three facts for his belief that the document was fraudulently created; first, Mr Cochrane had requested all of the leasing documents relevant to the property in or about April 2010; secondly, the documents provided to Mr Cochrane by Mr Evans and a real estate agent acting for Mr Haselgrove did not include the purported extension document or any other document evidencing an exercise of the option under the lease; and thirdly, when the second respondents made their application for approval, they did not include the purported extension document with their material in order to show a legal right to occupy the premises, but rather only included the expired lease. How the appellant’s belief is relevant is not clear.

98    The appellant said that since the hearing of this appeal, he instructed his solicitors to undertake further investigation into the alleged fraud. He said his subsequent conversations with Mr Cochrane convinced him that the documents purporting to extend the lease did not exist at the time the second respondents made their application. He said that Mr Cochrane’s prior relationship with the owners of the property added weight to the assertions that the extension documents did not exist at the relevant time. This “evidence” is no more than argument.

99    He said that Mr Cochrane had previously agreed to provide an affidavit in this proceeding, but that both parties agreed to exclude it. He said he filed the interlocutory application because he genuinely believed his rights are being prejudiced in circumstances where a decision in relation to his appeal may be founded in fraudulently created evidence that was put before the first respondent.

100    On 8 August 2012, Lander J’s associate again wrote to the appellant and directed that the interlocutory application that was received by the Queensland Registry on 3 July 2012 but was never filed, be filed. The application was subsequently received for filing and deemed to have been filed on 3 July 2012. The appellant was also directed to file submissions in support of the application. The appellant was informed that the Court would consider the application, affidavits, and submissions, upon the papers, and determine whether or not it would seek submissions from the respondent.

101    On 16 August 2012, the appellant filed submissions in relation to the interlocutory application. On 17 August 2012, the appellant filed an affidavit of Mr Maurice Hannan, solicitor for the appellant, sworn 16 August 2012.

102    In that affidavit, Mr Hannan stated that in addition to being a solicitor for Walsh Halligan Douglas Lawyers, the appellant’s solicitors, he is also a qualified and registered pharmacist and has been for 36 years. He said he has owned and operated pharmacies and is familiar with the requirements and processes of the first respondent.

103    Mr Hannan states that when an application for approval is made to the first respondent, an applicant must supply, at the time of its application, all relevant material that the applicant intends to rely on in support of its application. He said the first respondent does not accept piece-meal provision of such material. He referred to the Pharmacy Location Handbook and the rules within it that require all documents to be provided at the time of an application, which he said he annexed to his affidavit. The affidavit was filed without that annexure.

104    Mr Hannan said that when the second respondents lodged their objection to the first respondent’s initial rejection of their application, the second respondents also appealed the decision to the Administrative Appeals Tribunal (AAT), and the appellant was joined as a third party to that appeal. On 23 August 2010, he said, he received a letter from the Australian Government Solicitor enclosing copies of all the “T-Documents” in relation to the AAT appeal, which represented all the materials that were provided to the first respondent at the time the second respondents first applied for approval. He states that at the time of this initial application, the letters of extension dated 22 October 2010 and 9 December 2012, which purport to extend the expired lease, were not provided to the first respondent.

105    The further evidence that is sought to be tendered is that contained in Mr Cochrane’s affidavit. The appellant submitted that Mr Cochrane’s evidence supported a finding that “Mr Evans on behalf of the owners of the property offered the property for sale with vacant possession on a date after the first extension is claimed to have been made and before the extension thereby effected had expired.”

106    It was contended that “[i]t is in the interests of justice and the integrity of the first respondent’s processes that this issue be determined. As such it is appropriate to re-open the matter.”

107    This Court has power to receive “further evidence” on an appeal: s 27 of the Federal Court Act 1976 (Cth).

108    The discretion which is given in s 27 is to receive further evidence, not fresh evidence of which the common law speaks.

109    The public interest in the finality of litigation will not prevent the Court from receiving further evidence where it is necessary to correct a miscarriage of justice in the Court below, which has been occasioned through no fault of the party moving the Court to receive the evidence.

110    Usually the applicant will need to establish that the applicant was unaware of the evidence and could not have been, by exercising reasonable diligence, made aware of the evidence. Moreover, the applicant would need to establish that the evidence is credible and probative of an issue in the trial and, if accepted, likely to effect the result in the proceeding.

111    The appellant is not only seeking to have fresh evidence received by this Court on the appeal. The appellant is also seeking to have the proceeding remitted to the primary judge to raise an issue never ventilated before the primary judge and not raised in the originating application for judicial review.

112    That application is made notwithstanding that the evidence was known to the applicant at trial. Mr Cochrane had provided an affidavit, which the appellant chose not to rely upon. That was a forensic decision, which must bind the appellant.

113    On this application, the appellant says in paragraph 9 of his submissions in support of his application:

The applicant concedes that the additional evidence sought to be adduced was available to him prior to the trial before Reeves J. but it is submitted that this alone cannot be decisive of how the general discretion to allow the evidence to be re-opened should be exercised.

114    In Smith v NSW Bar Association (1992) 176 CLR 256, Brennan, Dawson, Toohey and Gaudron JJ said at 266:

If an application is made to re-open on the basis that new or additional evidence is available, it will be relevant, at that stage, to inquire why the evidence was not called at the hearing. If there was a deliberate decision not to call it, ordinarily that will tell decisively against the application.

115    The appellant has not chosen to tell the Court why this issue was not raised before the primary judge and why Mr Cochrane’s evidence was not adduced at trial.

116    For that reason alone, the application should be refused.

117    However, the evidence is also unsatisfactory. Mr Cochrane’s evidence is in some respects hearsay, which is admissible on an interlocutory application, but would not be admissible if there were to be a further trial. Some of his evidence is argumentative. The appellant’s evidence is wholly argumentative.

118    Moreover, the evidence, even if accepted, would not make out the claim of fraud. It may be that the documents to which reference has been made do not bear the date upon which the agreement was made. But that does not mean that the documents have been created fraudulently. What the second respondents had to establish was only that they had an entitlement to occupy the premises lawfully. If, at the relevant date, the owners were prepared to allow the second respondents to occupy the premises, item 201(a) was satisfied.

119    The evidence sought to be adduced is not of sufficient probative value to justify its reception.

120    The interlocutory application, supporting affidavits, and submissions, disclose no grounds sufficient to warrant the exercise of the Court’s discretionary power to reopen the appeal, to allow the appellant to amend the notice of appeal, and to adduce further evidence for the purpose of remitting the proceeding to the trial judge for rehearing on a new ground. The submissions concede the additional evidence was available prior to the trial before Reeves J, but do not address the failure to adduce that evidence.

121    It was not necessary to request submissions from the respondent. The application is dismissed.

The Orders

122    The appeal should be dismissed. The appellant should pay the second respondents’ costs.

Associate:

Dated:    12 October 2012