Federal Court of Australia

Jele Chemists Pty Ltd v Australian Community Pharmacy Authority [2025] FCAFC 54

ORDERS

THE COURT ORDERS THAT:

1.    The appeal be dismissed.

2.    The appellant pay the costs of the third respondent of and incidental to the appeal, to be taxed if not otherwise agreed.

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

REASONS FOR JUDGMENT

COLLIER ACJ AND ROFE J:

1    Before the Court is a notice of appeal filed 2 February 2024 (notice of appeal) from the whole of the judgment of the Federal Court of Australia in Jele Chemists Pty Ltd v Australian Community Pharmacy Authority [2023] FCA 1652.

2    Relevantly, the proceedings at first instance concerned a further amended originating application filed by the now appellant, Jele Chemists Pty Ltd, seeking judicial review of the following two decisions:

(1)    a decision of the Australian Community Pharmacy Authority (ACPA) to recommend that the Secretary of the Department of Health and Aged Care (Secretary) approve an application made by Glenvale Pharmacy Pty Ltd (Glenvale Pharmacy) under sch 1, pt 2, item 130 of the National Health (Australian Community Pharmacy Authority Rules) Determination 2018 (Cth) (National Health Rules) to supply pharmaceutical benefits from its proposed premises at 662-670 Greenwattle Street, Harristown, Queensland 4350 (proposed premises); and

(2)    a decision of a delegate of the Secretary to approve Glenvale Pharmacy’s application to supply pharmaceutical benefits from the proposed premises made pursuant to s 90 of the National Health Act 1953 (Cth) (National Health Act).

3    The primary Judge dismissed the further amended originating application.

Background

4    The primary Judge helpfully summarised relevant background to the proceedings as follows:

22    On 24 August 2021, a development application was lodged with the Toowoomba Regional Council for a Material Change of Use – Health Care Services (Medical Centre) and Shop (Pharmacy) in connection with the Glenvale Premises (Development Application).

23    In November 2021, submissions were made to the Council as part of the public notification phase of the Development Application.

24    On 1 April 2022, the Council issued a Decision Notice approving the Development Application, and on 14 April 2022 it issued letters to those who made submissions to it during the public notification phase advising of the decision and providing details of appeal rights.

25    On 12 April 2022, the applicant lodged an application with the Minister for Health and Aged Care to exercise his power pursuant to s 90A(2) of the [National Health Act] to approve the supply of pharmaceutical benefits (Applicant’s Application) at the property located at Shop 2, Glenvale Shopping Centre, Toowoomba Queensland 4350 (Applicant’s Premises). The background to this application is a preceding application made by the applicant on 16 December 2021 pursuant to Sch 1, Pt 2, Item 30 of the Rules for approval to supply pharmaceutical benefits from the Applicant’s Premises, which was rejected on 17 February 2022 as the Authority was not satisfied that the Applicant’s Premises were located at least 1.5 km, in a straight line, from the nearest approved premises.

26    On 20 April 2022, Glenvale Pharmacy lodged an application pursuant to Sch 1, Pt 2, Item 130 of the Rules for approval to supply pharmaceutical benefits from the Glenvale Premises (Glenvale Pharmacy’s Application). The Glenvale Premises are located within 300 metres in a straight line from the Applicant’s Premises.

27    On 28 April 2022, solicitors for the applicant sent an email to the “Ministerial Discretion Team” of the Department of Health asking to be notified of any application to establish a new pharmacy and/or to relocate an existing pharmacy within 5 kilometres of the Glenvale Premises for the purposes of making comments on such applications as an interested party.

28    On 2 May 2022, the applicant was notified of Glenvale Pharmacy’s Application.

29    On 10 May 2022, an appeal was lodged by Stokes Lawyers, who acted for the applicant some time prior to these proceedings, with the Planning and Environment Court against the Council’s approval of the Development Application. Final orders were made on 9 June 2022 granting leave to discontinue the appeal.

30    On 11 May 2022 the applicant objected to Glenvale Pharmacy’s Application to the Authority on the basis that, at all relevant times, the Glenvale Premises could not be used to operate a pharmacy under applicable local government and State and Territory laws relating to land development, because the Council's decision to approve the Development Applicant [sic] had been the subject of an appeal to the Planning and Environment Court.

31    On 15 July 2022, the Authority recommended that Glenvale Pharmacy’s Application be approved. Notification of that was sent to Glenvale Pharmacy on 18 July 2022, and to the applicant on 1 August 2022. On 3 August 2022, the applicant requested a statement of reasons from the Authority.

32    On 10 August 2022, the applicant wrote to the Secretary seeking written confirmation, within 10 days of the date of its letter, that the Secretary had decided to reject the Authority’s recommendation on the basis of their “irrefutable contention” that Glenvale Premises at all relevant times could not be used for the operation of a pharmacy pursuant to r 10(3) of the Rules.

33    On 19 August 2022, the Secretary responded to the applicant advising that he would consider the matters raised in its objection when making a decision as to whether or not approval would be granted to Glenvale Pharmacy, and otherwise stated that if it was dissatisfied with the Authority’s recommendation, it was a matter for the applicant as to whether it commenced judicial review proceedings.

34    On 29 August 2022, the applicant commenced this proceeding.

35    The Authority provided its statement of reasons on 31 August 2022 which stated, inter alia, that it was satisfied at all relevant times that Glenvale Premises could be used to operate a pharmacy under applicable local government and State and Territory laws relating to land development.

36    The applicant then, on 6 September 2022, sought an undertaking from the Secretary that he would refrain from making a decision with respect to Glenvale Pharmacy’s Application while proceedings were before the Court. The Secretary declined to provide such an undertaking but agreed to give the applicant seven days' notice prior to making a decision with respect to Glenvale Pharmacy's Application.

37    On 11 October 2022, the Applicant’s Application was approved by the Minister, effective from 4 October 2022.

38    On 21 November 2022, the applicant was advised by the Secretary that he would be considering Glenvale Pharmacy’s Application on or after 1 December 2022. The applicant sought an undertaking from Glenvale Pharmacy that it would refrain from opening the pharmacy on the Glenvale Premises while these proceedings were on foot, and that it would refrain from seeking approval from the Secretary for the Glenvale Premises, which undertaking Glenvale Pharmacy refused to provide.

39    On 25 November 2022, the applicant filed an interlocutory application in this proceeding seeking that the Secretary be restrained from approving Glenvale Pharmacy’s Application. The Court dismissed the application, finding that ground 1(a) (defined below) did not constitute a serious question to be tried and sought to conflate merits review with judicial review and that, in any event, the balance of convenience did not weigh in favour of the applicant: Jele Chemists Pty Ltd v Australian Community Pharmacy Authority [2022] FCA 1445 at [19], [29] (Collier J).

40    On 8 December 2022, a delegate of the Secretary approved Glenvale Pharmacy’s Application.

41    Thereafter, Glenvale Pharmacy commenced trading from the Glenvale Premises around 15 December 2022 and the applicant commenced trading from the Applicant’s Premises on 6 February 2023…

(emphasis in original)

5    No dispute has been raised as to the accuracy of this summary of events.

Notice of Appeal

6    In appealing the decision of the primary Judge, the appellant relied on the following grounds:

Grounds of appeal

1.    The learned primary judge erred in failing to find that the first respondent (Authority) made an error of law by finding that the third respondent’s (Glenvale’s) proposed premises “at all relevant times could be used for the operation of a pharmacy under applicable local government and State or Territory laws relating to land development” for the purpose of r 10(3)(c) of the National Health (Australian Community Pharmacy Authority Rules) Determination 2018 (Cth).

Particulars

(a)    Sections 71 and 72 of the Planning Act 2016 (Qld) provide that a development approval has effect only once an appeal period has ended, or if an appeal is on foot, once the appeal has ended.

(b)    Glenvale did not have effective development approval at “all relevant times” as defined in the Rules.

(c)    It followed that Glenvale’s proposed premises could not be used for the operation of a pharmacy under applicable State laws relating to land development at all relevant times.

(d)    The primary judge erred in the construction of r 10(3)(c) of the Rules and its relationship to the Planning Act.

2.    The learned primary judge erred in failing to find that the Authority lacked jurisdiction to make its purported decision because at the time of Glenvale’s application to the Authority, and at the time of the Authority’s purported decision, there were no particular premises from which Glenvale could be approved to supply pharmaceutical benefits.

Particulars

The primary judge erred in the construction of the Rules, together with s 90 of the National Health Act 1953 (Cth), in concluding that the premises to which the approval relates need not physically exist at the time of the application or the time of the Authority’s decision.

3.    The learned primary judge erred by failing to hold that the second respondent (Secretary) did not have jurisdiction to make a decision under s 90 of the National Health Act 1953 (Cth) because the Authority had not made a valid decision to recommend approval of Glenvale’s application, by reason of the matters in either or both of grounds 1 and 2 hereof, which is a statutory precondition to the exercise of the Secretary’s powers under s 90 of the National Health Act.

7    The appellant sought the following orders:

Orders sought

1.    That the appeal be allowed.

2.    That the decision of the first respondent dated 15 July 2022 be set aside.

3.    That the decision of the second respondent dated 8 December 2022 be set aside.

4.    That the third respondent’s application to the first respondent dated 20 April 2022 be referred to the first respondent for further consideration in accordance with law.

5.    That the respondents pay the appellant’s costs of and incidental to the primary proceedings.

6.    That the respondents pay the appellant’s costs of and incidental to this appeal.

7.    Such further and other order as this Court thinks fit.

Relevant Legislation

8    The present appeal concerns the construction and application of the National Health Act and National Health Rules by ACPA (in recommending) and the Secretary (in approving) an application for a pharmacist to supply pharmaceutical benefits from a particular premises.

9    Section 90 of the National Health Act relevantly provides:

90    Approved pharmacists

(1)    Subject to this section, the Secretary may, upon application by a pharmacist for approval to supply pharmaceutical benefits at particular premises, approve that pharmacist for the purpose of supplying pharmaceutical benefits at those premises.

Note: There is an application fee for the application: see subsection (9).

…

(3A)    Subject to subsections (3AA), (3AE) and (13), an application under this section must be referred to the Authority.

…

(3B)    An approval may be granted under this section in respect of an application that has been referred to the Authority under subsection (3A) or (3AF) only if the Authority has recommended the grant of the approval, but the Secretary may refuse to grant an approval even if the grant has been recommended by the Authority.

(3D)    The Secretary must not grant approval under this section to a pharmacist in respect of particular premises if the Secretary is satisfied that on or after the day the approval would otherwise be granted:

(a)    the pharmacist would be unable to supply pharmaceutical benefits at the premises; or

(b)    the premises would not be accessible by members of the public for the purpose of receiving pharmaceutical benefits at times that, in the opinion of the Secretary, are reasonable.

(4)    Nothing in this section authorizes the Secretary to grant approval to a pharmacist in respect of premises at which that pharmacist is not permitted, under the law of the State or Territory in which the premises are situated, to carry on business.

…

10    Relevantly, s 10(3)(c) of the National Health Rules reads:

10    When Authority must recommend applicant be approved

…

General requirements

(3)    For the purposes of subparagraphs (1)(b)(ii) and (2)(b)(ii), the requirements are that the Authority is satisfied that:

…

(c)    at all relevant times the proposed premises could be used for the operation of a pharmacy under applicable local government and State or Territory laws relating to land development; and

…

Note:     The requirement in paragraph (3)(c) would be satisfied if, for example, planning approval for the proposed pharmacy has been obtained or, if this is not necessary in the State or Territory where the pharmacy would be located, the proposed premises are on land that is zoned so as to enable the operation of a pharmacy. An application to obtain a building works approval or a certificate of occupancy, or similar, is not needed to satisfy this requirement. However, it may be needed for compliance with the requirement in paragraph (3)(e), depending on the operation of applicable State or Territory land development laws.

11    Sections 10(1)(b)(ii) and 10(2)(b)(ii) of the National Health Rules concern the requirement for applications to meet the requirements of s 10(3). Section 10(1)(b)(ii) is not relevant for the purposes of the appeal as it does not concern the cancellation of an approval. Rather the present appeal concerns the application of ss 10(2)(b)(ii) and 10(3)(c).

12    For the purposes of the words “applicable local government and State or Territory laws” in s 10(3)(c) of the National Health Rules, the appellant relies on s 71 of the Planning Act 2016 (Qld) (Planning Act), which reads:

71    When development approval has effect

(1)    Generally, a development approval starts to have effect when the approval is given, or taken to have been given, to the applicant.

(2)    However—

(a)    if an appeal about the approval is started, and subject to the outcome of the appeal—the approval starts to have effect when the appeal ends; or

(b)    if no appeal about the approval is started, but there was a submitter for the development application who had not given the assessment manager a notice withdrawing the submitter’s submission before the application was decided—the approval starts to have effect on the day after the first of the following happens—

(i)    the last submitter gives the assessment manager notice that the submitter will not be appealing the decision;

(ii)    the last appeal period for the development approval ends.

(3)    If a submitter for the development application gives the assessment manager notice that the submitter will not be appealing the decision on the application, the assessment manager must give the applicant a copy of the notice.

(4)    Despite subsections (1) and (2), if land that is the subject of an acquisition approval is taken or acquired under this Act, the Acquisition Act or the State Development Act after the approval would otherwise take effect under subsection (1) or (2), the approval starts to have effect when the land is taken or acquired.

(5)    The part of a variation approval that is a categorising instrument applies instead of a local planning instrument, to the extent of any inconsistency, until—

(a)    the development is completed; or

(b)    the variation approval lapses under section 88(2).

(6)    In this section—

acquisition approval, for acquisition land, means a development approval that relates to the purpose for which the land is to be taken or acquired.

submitter includes an advice agency that, in its referral agency’s response, has told the assessment manager to treat the response as a properly made submission.

Appellant’s Submissions

13    The submissions of the appellant in relation to ground of appeal 1 take issue with the following reasoning of the primary Judge:

81    First, as submitted by the Authority, the meaning of r 10(3)(c) of the Rules is informed by the note to the section. All material in a Commonwealth Act, including its notes, form part of the Act: s 13 Acts Interpretation Act. The note to r 10(3) of the Rules makes it clear that there is no express requirement that there be a final development approval. All that the Rules require is that at the relevant times planning approval has been obtained – not that it has taken effect. To adopt a different approach would mean that a development approval with conditions attached would similarly not suffice.

82    Importantly, r 10(3)(c) uses the words “could be”, which is concerned with possibility and indicates a lesser degree of certainty is required to reach that state of satisfaction, as opposed to a matter of fact. The lack of an explicit requirement that planning approval be in full effect, or that the Rules do not prescribe the requirement as a “can” or “must” as opposed to “could”, indicates that the narrow interpretation pressed by the applicant is not consistent with the purpose of the Rule.

83    Second, the Act is not concerned with the intricacies of local government and State and Territory planning legislation, and beyond providing approval to pharmacists, any subsidiary question about the practical reality of such approval is not a matter with which the Authority is necessarily concerned. According to the Authority, relying on s 15AA of the Acts Interpretation Act, the Rules should be interpreted in a manner consistent with the purpose and objects of the Act, which relevantly for this matter relate to the supply of designated drugs prescribed by a health practitioner to persons, not local government and State and Territory planning laws.

84    As the Authority submitted such an interpretation is clear from Terry White Chemists Australia Fair v Secretary to the Department of Health and Ageing (2009) 178 FCR 161 at [20] and [22] (Gray, Greenwood and Tracey JJ):

The preferable construction is to regard s 90(4) of the National Health Act as not so much a limitation on the power of the Secretary to grant an approval pursuant to s 90(1), as a limitation on the extent of the approval that the Secretary grants. Viewed in this way, s 90(4) makes it clear that an approval granted by the Secretary pursuant to s 90(1) is not to be regarded as extending beyond the purposes of the scheme set up by Pt VII of the National Health Act, the Pharmaceutical Benefits Scheme. The approval is not to be regarded as overriding any provision of State or Territory laws under which the carrying on of the business of a pharmacy at the relevant premises by the particular pharmacist would not be permitted. On this construction, the Secretary would not be concerned with the operation of any laws of any State or Territory, but only with the granting or refusal of approval to a particular pharmacist to supply pharmaceutical benefits at particular premises, for the purposes of the Pharmaceutical Benefits Scheme. A pharmacist to whom such approval is granted would still need to be permitted by the laws of the relevant State or Territory to carry on the business of a pharmacist at the premises in respect of which the approval has been granted. The Secretary cannot grant the pharmacist an approval that would oust the effect of those State and Territory laws, but only an approval for the purposes of the Pharmaceutical Benefits Scheme. It would be for the authorities of the relevant State or Territory to apply and enforce the laws of that State or Territory. Accordingly, s 90(4) of the National Health Act is a declaratory provision that seeks to put beyond doubt that, although a pharmacist might be approved under s 90(1) for the purpose of supplying pharmaceutical benefits at or from particular premises, he or she being willing to do so on demand at particular premises, such an approval does not cover the field of all permits, licences or approvals a pharmacist may be required to obtain in order to comply with a law of a State or Territory in which the premises are situated, in order to carry on the business of a pharmacist.

        ….

The adoption of a purposive construction of s 90(4) of the National Health Act leads to the conclusion that, when considering an application for approval under s 90(1), the Secretary is not concerned with provisions of State or Territory laws, but only with the functioning of the Pharmaceutical Benefits Scheme. To the extent to which it stated that town planning and land use laws are irrelevant to the Secretary’s function, what the Full Court said in Kaderbhai (quoted at [11] above) is consistent with that conclusion. Not all of the reasoning of the Full Court in Kaderbhai is consistent with the reasoning based on a purposive construction, however. Whether a purposive construction is adopted, or whether what was said in Kaderbhai is followed, the proper conclusion is that s 90(4) of the National Health Act does not require the Secretary to consider laws of a State or Territory relating to town planning or land use. On either view, the appellant cannot establish that the Secretary’s grant of approval to [the second respondent] to supply pharmaceutical benefits from the premises in respect of which he applied for approval was invalid. In our view, the purposive construction is to be preferred to the reasoning in Kaderbhai. The primary judge was correct to dismiss the application to set aside the Secretary’s decision. The appeal must be dismissed. No reason was advanced, and none appears, why the usual principle, that costs follow the event, should not be applied. Accordingly, the appellant will be ordered to pay the costs of the appeal of the Secretary and [the second respondent].

85     The applicant contended both that Terry White is distinguishable on its facts, as it was concerned with the interpretation of s 90(4) of the Act rather than the proper interpretation of the Rules, and that it was in fact supportive of the applicant’s case. Section 90(4) of the Act provides:

(1)     Nothing in this section authorizes the Secretary to grant approval to a pharmacist in respect of premises at which that pharmacist is not permitted, under the law of the State or Territory in which the premises are situated, to carry on business.

86     It is clear that Terry White is directed at an approval granted by the Secretary. In my view that does not make Terry White distinguishable. The decision being made by the Authority is for the purpose of the supply of pharmaceutical benefits, not for the purpose of enforcing planning law. It is also true that Terry White at [19] states that “[t]o the extent to which it might be considered that State or Territory laws are relevant, it is open to the Minister to make rules pursuant to s 99L of the National Health Act, requiring the Authority to apply those laws as part of its consideration of an application for approval referred to it under s 90(3A) of the National Health Act”. According to the applicant, therefore the Authority is required to determine whether “premises could operate under the laws of a state or territory relating to land development”. The applicant also took issue with the proposition advanced by Glenvale Pharmacy that the use of the words “could be used as a pharmacy” indicate a broad interpretation should be applied, such that the word “could” is read as “possibly could”. Those submissions are rejected.

87    The weight of authority makes it clear that the Authority is not concerned with local government and State and Territory planning laws. Support for this approach is also found by recourse to r 10(3)(e) of the Rules which makes it plain that the premises will be operating as a pharmacy six months after the Authority makes its recommendation. Further, the use of the words “could be used” in r 10(3)(c) is not to be taken as meaning “are able to be used”. “Could” is defined in the Macquarie Dictionary as “referring to a potential event or situation”. Therefore, in context, the requirement that “at all relevant times the proposed premises could be used for the operation of a pharmacy under applicable local government or State or Territory laws relating to land development” is concerned with a potential, or possibility, that the proposed premiss could be used, as opposed to a certainty.

14    In relation to ground of appeal 1, the appellant submitted, in summary, that:

    By operation of s 71(2) of the Planning Act, the appeal period and lodgement of an appeal against Glenvale Pharmacy’s development approval within that period provide that the proposed premises could not be used “at all relevant times” for the operation of a pharmacy as the approval only came into effect when the appeal ended.

    The words “could be” in s 10(3)(c) of the National Health Rules are used to refer to specific times in the past (namely “all relevant times”), requiring that it would be possible, in compliance with the applicable State and local planning laws, to operate a pharmacy at each of those times.

    Until Glenvale Pharmacy’s development application for a material change of use was granted and in effect, the proposed premises could not operate as a pharmacy.

    The primary Judge’s construction of s 10(3)(c) of the National Health Rules at [87] in effect meant “that the proposed premises could be used for the operation of a pharmacy, whether or not that was permitted under State planning law at the relevant time”.

    The decision in Terry White Chemists Australia Fair v Secretary to the Department of Health and Ageing (2009) 178 FCR 161; [2009] FCAFC 74 (Terry White Chemists) is distinguishable from the present case as:

•    the Secretary’s consideration of the development application in Terry White Chemists was premised on ACPA having already considered the applicable State and local planning laws;

•    no party in Terry White Chemists had challenged the recommendation of ACPA for the Secretary to approve the development application; and

•    the National Health Rules subject to the present appeal are more prescriptive than the provisions in Terry White Chemists.

15    The submissions of the appellant in relation to ground of appeal 2 focus on the following reasons of the primary Judge:

93    By ground 1A, the applicant contended that on its proper construction, the Rules are predicated on the assumption that the premises are in a “built form” as opposed to a hypothetical premises. The applicant submitted that on reading the Rules as a whole, it is evident that they are concerned with built premises, based on the use of the current tense and the presumption that precise locations can be ascertained, for example with respect to the distances between premises. The applicant submitted that it would be impossible to obtain accurate measurements if the premises were not in a built form, and therefore to construe the Rules in such a way would lead to uncertainty and could lead to pharmacists undermining the Rules by seeking to obtain approval over hypothetical premises that may never be built, thereby effectively preventing other applicants from obtaining approvals to supply pharmaceutical benefits in that area.

94    These submissions must be rejected.

95    When looking at the words used in the text of r 10(3) of the Rules, as well as Sch 1 of the Rules to which regard must be had pursuant to r 10(2)(a), there is the repeated use of the words “proposed premises”. “Proposed premises” is defined in r 5 of the Rules as “in relation to an application, means the premises at which the applicant proposes to supply pharmaceutical benefits”. There is no indication in the Rules that the premises are required to be built or established.

96    When considering r 10(3)(b) of the Rules, the right to occupy the premises can arise once an application is made, therefore it is unlikely that it is intended that there be physical premises in existence capable of being occupied when the application is made. Furthermore, the use of the words “land development” in r 10(3)(c) of the Rules would be nonsensical if the intention is that only physically built premises are capable of being subject to approval.

97    Further, r 10(3)(e) of the Rules states that Authority must be satisfied that the applicant will be able to commence operating the pharmacy at the proposed premises within 6 months of the date approval is recommended. This particular subsection suggests that the premises are not required to be fully established at the date approval is recommended. This point is reinforced by the note to r 10(3) of the Rules which refers to the provision of “building works approval” which may be necessary to satisfy the Authority in some circumstances. It would also be nonsensical for the Rules to be drafted in this manner if the premises were required to be built at the point at which the Authority makes a recommendation.

98    In Assarapin, the Full Court at [36] acknowledged that even the words “existing premises” do not necessarily mean there must be a physical building:

First, both parties correctly, in our view, accepted that s 10 of the Rules defines “existing premises“ to mean premises that are the subject of an approval which is in force and that the term was intended to bear the same meaning in item 124. It follows that, read in context, there may be “existing premises” notwithstanding that premises in the ordinary meaning of the word no longer exist, namely, a building or a building with the grounds belonging to it (see e.g. the definitions of “premises“ in the Oxford Dictionary (online ed, at 12 January 2015) and Macquarie Dictionary (online ed, at 12 January 2015)). As the appellants submitted, “the fact that [the premises] have been demolished doesn’t matter because while the approval remains on foot, they continue to be approved premises, albeit, no longer accessible.”

(Emphasis in original)

99    If the term “existing premises” is accepted as an approved premises under the Rules notwithstanding they are not in physical existence, I am of the view that the same applies to the term “proposed premises”.

100     With respect to the applicant’s argument that uncertainty may be caused by an inability to precisely and accurately measure distances in the absence of a constructed building, a Full Court of this Court previously held that an unbuilt shopping centre was a “particular premises” within the meaning of s 90(4) of the Act: Secretary, Dept of Housing, Local Government and Community Services v Kaderbhai (1994) 51 FCR 416 (Foster, Cooper and Whitlam JJ). Furthermore, in Garozzo & Pharmacy Restructuring Authority (1992) 28 ALD 424 at [38] (O’Connor J), which is a decision from a Tribunal but constituted by a justice of this Court and cited in Kaderbhai, his Honour stated that the fact that a premises is yet to be constructed is “not to the point”.

101     The Handbook, which provides a general guide for applicants seeking to establish new pharmacies under s 90 of the Act, provides detailed instructions regarding evidence that may be provided to establish distance requirements for proposed premises, including maps, plans, photographs and survey reports. In my view, it is clear that the Act and Rules do not intend that every application be met with actual physically built premises when seeking approval under s 90 of the Act, and specifically in order to comply with r 10 of the Rules.

102     I note that a contention was raised by the applicant as to the applicability of the Handbook, in the sense that the Handbook contains a disclaimer that it ought not be used “as a basis for legal interpretations or as a definitive reference to the roles and responsibilities of all parties”. The Authority submitted, and I accept, that the Handbook is a lawful policy such as those contemplated in Drake and Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634 at 644-645 (Brennan J):

If consistency in decision making is sought, as it ought to be, the standards and values which a Minister expresses in a statement of lawful policy can be a constant reference point for each of the presidential members of the Tribunal in exercising the discretion in particular cases. Ministerial policy can be an aid to consistency among Tribunal decisions, and to consistency between the decisions of the Tribunal and those of the Minister. Decisions made under a statutory power and reviewed by the Tribunal are but a proportion of the decisions made under that power, and it would be a regrettable anomaly if the decisions which were not reviewed revealed different standards and values from those made on review.

These considerations warrant the Tribunal’s adoption of a practice of applying lawful ministerial policy, unless there are cogent reasons to the contrary. If it were shown that the application of ministerial policy would work an injustice in a particular case, a cogent reason would be shown, for consistency is not preferable to justice.

…

The general practice of the Tribunal will not preclude the Tribunal from making appropriate observations on ministerial policy, and thus contributing the benefit of its experience to the growth or modification of general policy; but the practice is intended to leave to the Minister the political responsibility for broad policy, to permit the Tribunal to function as an adjudicative tribunal rather than as a political policy-maker, and to facilitate the making of consistent decisions in the exercise of the same discretionary power.

103    Accordingly, I am of the view that when considering the Rules, the term “proposed premises” ought not be narrowly interpreted to mean “proposed premises which have been built”, but rather to mean a premises in which the applicant proposes to operate their pharmacy, regardless of its actual physical existence at the time of the Authority’s recommendation. Such a view is consistent with the objects of the Act, findings of other justices of this Court and is clearly contemplated by the Handbook.

104    Finally, the applicant’s submission that pharmacists may “game” the system by seeking to have “hypothetical premises” approved is merely speculative, and with respect, difficult to understand. In my view, the requirement that a proposed premises be able to be operated as a pharmacy within six months of the recommendation of the Approval pursuant to r 10(3)(e) of the Rules prevents any gaming as the Minister has the power to revoke approval pursuant to s 95 of the Act.

105    Ground 1A does not succeed.

16    In relation to ground 2 of appeal, the appellant submitted, in summary, that:

    The term “proposed premises” under the National Health Rules refers to existing premises that are proposed for approval to supply pharmaceutical benefits, not premises that are proposed to exist at some future time.

    The natural and proper construction of the National Health Rules requires that physical premises must exist before being approved as a place from which pharmaceutical benefits may be supplied.

    Section 8 of the National Health Rules, which requires precise measurements to be taken from the public entrance of the proposed premises, implies strict adherence to physical features of a proposed premises. Such measurements could not be taken in relation to a hypothetical premises as, for example, the public entrance may move between the submission of the plan and the completion of construction.

    Where proposed premises do not physically exist, the premises could not lawfully be used for the operation of a pharmacy as required by s 10(3)(c) of the National Health Rules.

    The decision in Assarapin v Australian Community Pharmacy Authority (2016) 239 FCR 161; [2016] FCAFC 9 (Assarapin) is distinguishable. The approval in the present case concerned a premises not yet built, unlike Assarapin which concerned an approval over a physical premises which was later demolished.

17    Ground of appeal 3 rests on the success of either or both grounds of appeal 1 and 2, specifically the requirement of ACPA to recommend an application for approval by the Secretary, prior to such approval being granted: s 90(3B) of the National Health Act.

First Respondent’s Submissions

18    In relation to ground of appeal 1, the first respondent submitted, in summary, that:

    The note to s 10(3) of the National Health Rules references a development approval being “obtained”. It follows that s 10(3)(c) is only concerned with the approval being obtained rather than being in effect.

    As there is no requirement under s 99N of the National Health Act for ACPA to appoint a lawyer to ACPA, it need only be satisfied that a development approval has been obtained, and is not required to identify when a development approval comes into effect by reference to relevant local council, State or Territory planning laws.

    Provided that approval has been obtained, any question as to the effect of that approval at a practical level is not a matter for ACPA. If ACPA was required to engage with the operation of, and compliance with, the relevant planning laws beyond approval being obtained, ACPA would likely be required to resolve mixed questions of fact and law.

    By way of example, if an appeal of a development application is allowed to frustrate the “at all relevant times” requirement under s 10(3)(c) of the National Health Rules, a commercial competitor could simply appeal an application to prevent ACPA making a recommendation for approval to the Secretary.

19    In relation to ground of appeal 2, the first respondent submitted, in summary, that:

    Use of the phrase “land development” in s 10(3)(c) of the National Health Rules anticipates that land may be developed in a way that includes construction of a premises.

    It would not be consistent with the statutory purpose of the National Health Rules to require that pharmacists must fully construct a premises before knowing whether the premises is approved to be used as a pharmacy.

Third Respondent’s Submissions

20    There is significant overlap between the submissions of the first and third respondents.

21    In relation to ground of appeal 1, the third respondent further submitted, in summary that:

    If the submissions of the appellant were to be accepted, an approval subject to conditions would also not satisfy s 10(3)(c) of the National Health Rules.

    The note to s 10(3) of the National Health Rules provides an opportunity for an applicant to obtain a recommendation from ACPA, without embarking upon a final development approval for a premises.

    ACPA need only be satisfied of the realistic possibility that the proposed premises could be used for the operation of a pharmacy, not that development approval in full and final effect and free from challenge had been granted.

    The pharmaceutical benefits scheme under the National Health Act is not concerned with the lawfulness or enforcement of State and Territory planning laws, but rather the supply of pharmaceutical benefits to the public.

22    In relation to ground of appeal 2, the third respondent further submitted, in summary that:

    The use of the modifier “proposed” with respect to premises indicates that premises can be under construction or planned to be built, provided that their proposed location is readily ascertainable.

    In any event, proposed premises, whether unbuilt, partially constructed or built could not “lawfully be used” as a pharmacy without full and final development approval, as well as having been stocked, fitted out and obtained the approval of the relevant State pharmacy bodies.

Consideration

23    We have already set out in some detail relevant legislative provisions, and the primary Judge’s reasons for judgment interpreting those provisions. Importantly, for the purposes of this appeal, pursuant to s 90 of the National Health Act (where a pharmacist applies for approval to supply pharmaceutical benefits from particular premises) the Secretary must refer the application to ACPA. In considering an application referred to it by the Secretary, ACPA must comply with the National Health Rules: s 99K of the National Health Act. The Secretary may only approve an application if ACPA has recommended the application for approval: s 90(3B) of the National Health Act.

24    In our view, the primary Judge correctly construed the provisions of the National Health Act and the National Health Rules. Her Honour’s decision should be upheld. We have formed this view for the following reasons.

25    First, as the primary Judge correctly found, there is no requirement that a final development approval for the operation of a pharmacy at the proposed premises be in effect before ACPA can make a recommendation for approval by the Secretary. Section 10(3)(c) of the National Health Rules plainly provides that a recommendation can be made if (inter alia) at all relevant times a proposed premises could be used for the operation of a pharmacy under applicable planning laws. In the present case, as ACPA noted in its decision, a Development Application Decision Notice dated 1 April 2022 was issued by the Toowoomba Regional Council approving the Material Change of Use of the proposed premises to “Health Care Service and Shop”.

26    As the primary Judge further observed, the Note to s 10(3) of the National Health Rules makes clear that final effective development approval is unnecessary. In particular, reference should be made to the statement in the Note that s 10(3)(c) would be satisfied if “the proposed premises are on land that is zoned so as to enable the operation of a pharmacy”.

27    The interpretation of s 10(3)(c) applied by the primary Judge is consistent with earlier authority. It is not in doubt that compliance with relevant local government and State or Territory planning laws is a factor for consideration, by both ACPA and ultimately the Secretary, in respect of pharmacy approvals. However, as the Full Court observed in Terry White Chemists in respect of an earlier (but comparable) iteration of s 90(1) of the National Health Act, the object of the legislation in respect of applications for approval to conduct the operation of a pharmacy at proposed premises:

19.    …is to establish and regulate the provision of drugs and medicinal preparations to members of the public for whom they are prescribed, on a subsidised basis. It is unlikely that, in the pursuit of a purpose associated with that scheme, Parliament would have intended to require the Secretary to search for and consider every provision of the law of the State or Territory in which the relevant premises were situated that might bear on the legality of the person applying for approval conducting the business of a pharmacist at those premises. Not only would the task of ascertaining what were the relevant provisions be onerous, the process of applying them would involve duplication of functions that are already committed to the authorities of the State or Territory concerned. It is unlikely that Parliament intended that such duplication should occur. The rights and wrongs of the conduct of particular activities at particular premises are matters for the concern of State and Territory authorities, and not for the concern of the Secretary. A construction that requires the Secretary to engage in an onerous procedure, involving duplication of functions, should not be adopted if there is an alternative construction that promotes the purpose or object of the provisions. To the extent to which it might be considered that State or Territory laws are relevant, it is open to the Minister to make rules pursuant to s 99L of the National Health Act, requiring the Authority to apply those laws as part of its consideration of an application for approval referred to it under s 90(3A) of the National Health Act.

(emphasis added)

28    As their Honours in Terry White Chemists continued:

20.    …The approval is not to be regarded as overriding any provision of State or Territory laws under which the carrying on of the business of a pharmacy at the relevant premises by the particular pharmacist would not be permitted. On this construction, the Secretary would not be concerned with the operation of any laws of any State or Territory, but only with the granting or refusal of approval to a particular pharmacist to supply pharmaceutical benefits at particular premises, for the purposes of the Pharmaceutical Benefits Scheme. A pharmacist to whom such approval is granted would still need to be permitted by the laws of the relevant State or Territory to carry on the business of a pharmacist at the premises in respect of which the approval has been granted. The Secretary cannot grant the pharmacist an approval that would oust the effect of those State and Territory laws, but only an approval for the purposes of the Pharmaceutical Benefits Scheme. It would be for the authorities of the relevant State or Territory to apply and enforce the laws of that State or Territory. Accordingly, s 90(4) of the National Health Act is a declaratory provision that seeks to put beyond doubt that, although a pharmacist might be approved under s 90(1) for the purpose of supplying pharmaceutical benefits at or from particular premises, he or she being willing to do so on demand at particular premises, such an approval does not cover the field of all permits, licences or approvals a pharmacist may be required to obtain in order to comply with a law of a State or Territory in which the premises are situated, in order to carry on the business of a pharmacist…

(emphasis added)

29    The statutory scheme as now established by the National Health Act and National Health Rules contemplates a recommendation by ACPA and an approval by the Secretary in circumstances where the conduct of a pharmacy from proposed premises is possible under applicable local government and State or Territory law relating to land development—in other words the proposed premises “could be” used for the operation of a pharmacy. The principles explained in Terry White Chemists are equally applicable to that approval by ACPA, against the background of the ongoing purpose and object of the legislation.

30    Importantly, the simple institution of an appeal of a development approval does not undermine the validity of an otherwise validly granted development approval under local government and State or Territory law. As also explained in Terry White Chemists at [19]-[20], the recommendation by ACPA and approval of the Secretary of proposed premises for the supply of pharmaceutical benefits is separate from, and not determinative of, any subsequent developments in respect of the status of a development approval. It is accordingly irrelevant that a development approval does not “take effect” formally under s 71 of the Planning Act until, subject to the outcome of an appeal, the appeal ends.

31    Practically, of course, as pointed out in Terry White Chemists, if an appeal against a development approval is successful at a State, Territory or local government level, any approval by the Secretary under the National Health Act would be ultimately unenforceable such that a pharmacy could not be operated at the proposed premises.

32    In our view, ground of appeal 1 is not substantiated.

33    Second, we are not persuaded that physical premises are required to be built or established at the time that ACPA—under s 10 of the National Health Rules—recommends proposed premises for approval.

34    As her Honour observed at [95], “proposed premises” is defined in s 5 of the National Health Rules as being simply “in relation to an application … the premises at which the applicant proposes to supply pharmaceutical benefits”, with no indication that the relevant premises were required to be built or established.

35    “Proposed premises” can be distinguished from “existing premises” as further defined in s 10(1) of the National Health Rules. Her Honour accurately noted that the Full Court found in Assarapin at [36] that there may be “existing premises” notwithstanding that premises in the ordinary meaning of the word no longer exist following demolition. As their Honours observed in Assarapin:

39    …More fundamentally, it is not correct to say that the existence of premises in the sense of a building is essential to maintain approval under the Act…

36    While Assarapin concerned physical premises which had earlier been approved under s 90 of the National Health Act, but subsequently demolished, we are not persuaded that the principles explained by the Full Court in that case rested on the premises having physically existed at an earlier point in time. Indeed, at [40] their Honours noted that the existing approval related to a physical location notwithstanding that the actual premises in the ordinary sense had ceased to exist.

37    The primary Judge observed:

99.    If the term “existing premises” is accepted as an approved premises under the Rules notwithstanding they are not in physical existence, I am of the view that the same applies to the term “proposed premises”.

38    We agree.

39    The case of the appellant in respect of its argument that physical premises are required under the National Health Rules is not assisted by its reliance on s 8. In particular, the appellant contended that the requirement of measurement between two premises under s 8 of the National Health Rules has broader ramifications, namely that physical premises must exist for the purposes of a recommendation by ACPA pursuant to s 10. We are not satisfied that this is an appropriate construction of the National Health Rules.

40    Plainly, the National Health Rules must be read as a whole, and applied consistently. In particular, item 130 of sch 1 to the National Health Rules requires that proposed premises are at least 1.5 kilometres in a straight line from the nearest approved premises, with the measurement to be conducted in accordance with s 8 of the National Health Rules. However, as was raised at the hearing of the appeal, the relevant measurement as mandated by item 130 of sch 1 and s 8 of the National Health Rules could equally be conducted by reference to planning documents as distinct from physical premises. There is no requirement under s 8 that the measurement be taken between two physical premises—indeed the nature of the “premises” to which s 8 refers is not qualified in any way.

41    We note the appellant’s submission that planning documents can be subject to change, such that a public entrance could be altered on plans. However, as also raised at the hearing, a public entrance of physical premises can be similarly altered.

42    Ground of appeal 2 is not substantiated.

43    The first and third respondents submitted, and the appellant accepted at the hearing, that ground of appeal 3 falls away in the event that neither grounds of appeal 1 or 2 are made out.

44    It follows that the appeal should be dismissed.

45    ACPA has not sought its costs of the appeal. However, the third respondent has sought its costs. It is appropriate that the appellant pay the costs of the third respondent of and incidental to the appeal, such costs to be taxed if not otherwise agreed.

Associate:

Dated:    15 April 2025

REASONS FOR JUDGMENT

HORAN J:

46    I have had the advantage of reading the draft reasons for judgment of Collier ACJ and Rofe J. For the reasons set out below, I agree that the appeal should be dismissed.

47    Section 90 of the National Health Act 1953 (Cth) provides that, subject to exceptions that are not presently relevant, an application for approval to supply pharmaceutical benefits at particular premises must be referred to the Authority, and an approval may be granted only if the Authority has recommended the grant of the approval: s 90(3A), (3B). Section 99K(2) provides that, in making a recommendation whether or not an applicant should be approved under s 90 in respect of particular premises, the Authority is required to comply with the relevant rules determined by the Minister under s 99L. For present purposes, those rules are contained in the National Health (Australian Community Pharmacy Authority Rules) Determination 2018 (Cth) (the Rules).

48    Under the Rules, the “general requirements” that must be met in relation to an application for approval relevantly include “that the Authority is satisfied that … at all relevant times the proposed premises could be used for the operation of a pharmacy under applicable local government and State or Territory laws relating to land development”: ss 10(2)(b)(ii) and 10(3)(c) of the Rules. For such purposes, “all relevant times” means, in relation to an application, the day on which the application was made and the day on which the application is considered by the Authority: s 5 of the Rules.

49    The issue in the present appeal arises because the third respondent, Glenvale Pharmacy Pty Ltd, applied for approval to supply pharmaceutical benefits from its proposed premises (the Glenvale Premises) after it had been given a development approval by the Toowoomba Regional Council under the Planning Act 2016 (Qld), but before the appeal period in respect of that approval had ended. After having been notified of Glenvale’s application for approval to supply pharmaceutical benefits from the Glenvale Premises, the appellant proceeded to file an appeal in the Planning and Environment Court of Queensland against the Council’s decision to grant the development approval. The appellant then made submissions to the Authority that the development approval in respect of the Glenvale Premises had not started to have effect under s 71 of the Planning Act, such that those premises could not be used for the operation of a pharmacy and the requirement in s 10(3)(c) of the Rules was not met. Although the appellant discontinued its appeal in the Planning and Environment Court shortly afterwards, it nevertheless argues that the development approval granted by the Council to Glenvale was not in effect at “all relevant times” for the purposes of s 10(3)(c) of the Rules.

50    Section 10 of the Rules is a law of the Commonwealth. As a Full Court of this Court has previously observed, “[t]he proper construction of Commonwealth legislation cannot be determined by a State enactment unless the Commonwealth law incorporates by reference the provisions of the State legislation”: Te v Minister for Immigration and Ethnic Affairs (1999) 88 FCR 264 at [31] (Sackville, North and Merkel JJ). In particular contexts, a Commonwealth law may pick up and apply the laws of a State or Territory in defining rights and liabilities or conferring powers and functions under the Commonwealth law: see e.g. Judiciary Act 1903 (Cth) s 79. In my view, however, that is not how s 10(3)(c) of the Rules is intended to operate.

51    The requirement in s 10(3)(c) turns on the satisfaction of the Authority. That satisfaction must be formed reasonably and on a correct understanding and application of the applicable law: see R v Connell; Ex parte Hetton Bellbird Collieries Ltd (1944) 69 CLR 407 at 430 (Latham CJ); Graham v Minister for Immigration and Border Protection (2017) 263 CLR 1 at [57] (Kiefel CJ, Bell, Gageler, Keane, Nettle and Gordon JJ); Hossain v Minister for Immigration and Border Protection (2018) 264 CLR 123 at [34] (Kiefel CJ, Gageler and Keane JJ); Shrestha v Minister for Immigration and Border Protection (2018) 264 CLR 151 at [2] (Kiefel CJ, Gageler and Keane JJ). For such purposes, the law to be applied by the Authority is s 10(3)(c) of the Rules, as opposed to the “applicable local government and State or Territory laws relating to land development”.

52    On its proper construction, s 10(3)(c) does not operate to render the Authority as a specialist planning tribunal tasked with the proper construction and application of local planning legislation. It is notorious that the content and operation of planning laws governing the development and use of land can raise matters of some complexity, including zoning, approvals, conditions, secondary consents or permits, and the characterisation of the purposes for which land or buildings are used. Such laws may vary considerably between and within different States and Territories in which pharmacies are operated. As the primary judge observed, the Act and the Rules are “not concerned with the intricacies of local government and State and Territory planning legislation”: J [83]. Among other things, apart from the Chairperson, the Authority is constituted by part-time members comprising pharmacists nominated by the Pharmacy Guild of Australia or the Pharmaceutical Society of Australia, an officer of the Department appointed by the Secretary, and a consumer representative: s 99N. There is no requirement for the Authority to include any member with specialist expertise in State or Territory planning law: see J [89]–[90]; c.f. Watson v Australian Community Pharmacy Authority (2012) 206 FCR 365 at [73] (Lander, Jessup and Foster JJ).

53    The Authority must consider whether, on the material before it, it is satisfied that the proposed premises could be used for the operation of a pharmacy under applicable local government and State or Territory laws relating to land development. This does not necessarily require that there is an existing building which is capable of immediate occupation and use as a pharmacy. As the Note to s 10(3) indicates, it may be sufficient that the applicant has obtained planning approval for the proposed pharmacy, or even that the operation of a pharmacy is consistent with the zoning of the land without the need for any planning approval.

54    In the present case, the Authority had regard to the Development Application Decision Notice dated 1 April 2022 issued by the Council, “approving the Material Change of Use of the premises to ‘Health Care Service and Shop’”. The development approval contained 20 pages of detailed conditions to which the development was subject, including requirements for further permits and approvals to be obtained in carrying out the development. The Authority considered submissions that the development approval took effect “subject to the appeal provisions in the relevant planning legislation”, together with submissions made in response by Glenvale. The Authority found that an appeal from the Council’s decision had been commenced in the Planning and Environment Court on 10 May 2022, and that the appeal was discontinued on 9 June 2022. The Authority concluded that it “was satisfied that, based on the information and documents specified above, at all relevant times the proposed premises could be used for the operation of a pharmacy under applicable local government and State or Territory laws relating to land development”.

55    The relevant ground of review relied on by the appellant in its amended originating application was that the Authority’s decision “involved an error of law” within s 5(1)(f) of the Administrative Decisions (Judicial Review) Act 1977 (Cth) (AJDR Act), on the basis that “at all relevant times the Proposed Premises could not be used for the operation of a pharmacy under applicable local government and State or Territory laws relating to land development in accordance with the requirements of s 10(3)(c) of the Rules”: see J [42]. The appellant did not challenge the Authority’s satisfaction on any other administrative law grounds, whether under the ADJR Act or under the general law. While a “no evidence” ground under s 5(1)(h) of the ADJR Act was contained in the originating application initially filed by the appellant, that ground was subsequently removed in the amended originating application.

56    The relevant ground of review in the amended originating application alleged simply that “at all relevant times the Proposed Premises could not be used for the operation of a pharmacy under applicable local government and State or Territory laws relating to land development in accordance with the requirements of s 10(3)(c) the Rules”. The primary judge accepted that this ground of review was directed at whether the state of satisfaction reached by the Authority was tainted by an error of law, and was not “simply an attempt at impermissible merits review” of the Authority’s factual findings: J [75]–[76]. Nevertheless, the precise error of law that was alleged to have been made by the Authority is difficult to identify with precision. While the error was framed in the notice of appeal in terms of an “error in the construction of s 10(3)(c) of the Rules and its relationship to the Planning Act”, the tenor of the appellant’s submission appears to be that the Authority erred by misconstruing or misapplying the provisions of the Planning Act. Thus, the premise of the argument advanced by the appellant on the appeal was that the Rules “specifically direct attention to the applicable State laws and require that the Authority be satisfied, on a correct legal construction, that the applicable State laws permitted the proposed premises, at all relevant times, to be used for the operation of a pharmacy” (emphasis added). The reason why, in the appellant’s submission, the Glenvale Premises could not be used as a pharmacy was that the development approval given by the Council was not “in effect” under s 71 of the Planning Act at all relevant times. Thus, the argument was essentially that the Authority misapplied s 10(3)(c) of the Rules by adopting an incorrect legal construction of s 71 of the Planning Act.

57    In Terry White Chemists Australia Fair v Secretary to the Department of Health and Ageing (2009) 178 FCR 161 at [22], the Full Court (Gray, Greenwood and Tracey JJ) held that the Secretary is not required to consider the laws of a State or Territory relating to town planning or land use when deciding whether to grant approval to a pharmacist to supply pharmaceutical benefits at particular premises under s 90 of the Act. The Court regarded s 90(4) of the Act as a “declaratory” or “explanatory” provision which put beyond doubt that an approval under s 90 “does not cover the field of all permits, licences or approvals required to comply with State or Territory laws in order to carry on business as a pharmacist”: at [20]. In other words, the pharmacist “would still need to be permitted by the laws of the relevant State or Territory to carry on the business of a pharmacist at the premises in respect of which approval has been granted”, but it was “for the authorities of the relevant State or Territory to apply and enforce the laws of that State or Territory”: ibid. In this way, s 90(4) of the Act was treated “as not so much a limitation on the power of the Secretary to grant an approval pursuant to s 90(1), as a limitation on the extent of the approval that the Secretary grants”: ibid.

58    The Full Court in Terry White Chemists considered that it was unlikely that the Parliament “would have intended to require the Secretary to search for and consider every provision of the law of the State or Territory in which the relevant premises were situated that might bear on the legality of the person applying for approval conducting the business of a pharmacist at those premises”, on the basis that this would be unduly onerous and would involve a duplication of functions committed to the authorities of the State or Territory concerned: at [19]. Rather, the Court stated that “[t]he rights and wrongs of the conduct of particular activities at particular premises are matters for the concern of State and Territory authorities, and not for the concern of the Secretary”, who is concerned only with the functioning of the Pharmaceutical Benefits Scheme: at [19], see also [22].

59    Nevertheless, in Terry White Chemists, the Full Court distinguished the position of the Authority, which may be required by the rules made under s 99L of the Act “to take into account the land use requirements of State, Territory and local laws if the Minister should consider that to be appropriate”: at [17]. Accordingly, the Court considered (at [19]) that:

To the extent to which it might be considered that State or Territory laws are relevant, it is open to the Minister to make rules pursuant to s 99L of the National Health Act, requiring the Authority to apply those laws as part of its consideration of an application for approval referred to it under s 90(3A) of the National Health Act …

(Emphasis added.)

60    These obiter comments made by the Full Court in Terry White Chemists do not determine the proper construction of s 10(3)(c) of the Rules. While it is clear that s 10(3)(c) directs attention to the applicable local government and State or Territory laws relating to land development, it is another matter whether the provision incorporates those laws as legal constraints on the Authority’s power to make a recommendation, so as to require it not just to consider, but correctly to apply those laws. For the reasons set out above, s 10(3)(c) should not be given such an operation, which would be similarly onerous, inapt and potentially duplicative of the functions of State or Territory authorities. Rather, the Authority is required to satisfy itself, as a matter of fact and on the material available to it, that the proposed premises at which the applicant seeks to supply pharmaceutical benefits could be used at all relevant times for the operation of a pharmacy under applicable local government and State or Territory laws relating to land development.

61    The appellant submitted that the decision notice issued by the Council was “ineffective and contingent” and did not constitute an approval until the end of the appeal period or the end of any appeal, relying on Hayes v Walker (2004) 134 LGERA 290; [2004] QCA 288. In that case, a contract for the sale of vacant land was subject to a condition requiring the seller to obtain council approval to develop the land on terms that were satisfactory to the buyer. The question was whether that condition was met in circumstances where an appeal had been lodged against the council’s decision to grant development approval, and the appeal remained unresolved. The Queensland Court of Appeal rejected an argument that the relevant provision of the contract referred to an approval that had in fact been obtained, whether or not that approval was in effect. Referring to s 3.5.19 of the Integrated Planning Act 1997 (Qld), de Jersey CJ concluded (at [14]–[15]) that the council’s decision notice did not take on the character of a development approval until the dismissal of the appeal, and that it was “not a case where an ‘approval’, though inchoate or incipient, is nevertheless an approval”. Similarly, Jerrard JA held (at [24]–[25]) that, on its proper construction, the contract was an agreement to receive a development approval the conditions of which were in force, and MacKenzie J held (at [38]) that the references in the contract could only reasonably refer to an approval that had effect, which did not occur “until finality under s 3.5.19 [was] reached”.

62    In my view, the decision in Hayes can be distinguished from the issues raised in the present appeal. The Court of Appeal was there dealing with the construction of a reference to development “approval” in a provision of a contract for the sale of land, which does not necessarily govern the meaning of s 10(3)(c) of the Rules. Further, the Court’s decision turned on the wording of s 3.5.19 of the Integrated Planning Act, the terms of which were not identical to s 71 of the Planning Act — in particular, the former dealt with the time at which a decision notice was “taken to be the development approval” and to have effect, whereas s 71 refers to when “a development approval starts to have effect”. There might be a stronger argument that a development approval under the Planning Act is in existence from the time that it is given, even if has not yet started to have effect. It is unnecessary to resolve such questions as a matter of State law, however, as the present case is concerned with the proper construction of the Act and the Rules.

63    Many of the requirements of which the Authority must be satisfied under s 10(3) of the Rules have a forward-looking aspect. The Authority must be satisfied that the proposed premises would be accessible by the public (s 10(3)(d)), that the applicant will be able to begin operating a pharmacy at the proposed premises within six months after the Authority’s recommendation (s 10(3)(e)), and that the proposed premises will not be directly accessible by the public from within a supermarket (s 10(3)(f)). Even in respect of those requirements that must be met “at all relevant times”, being the day on which the application is made and the day on which the application is considered by the Authority, the context of s 10(3) of the Rules is addressed to the future operation of a proposed pharmacy once approval has been granted under s 90 of the Act. Thus, while the applicant must have at all relevant times a legal right to occupy the proposed premises, this can be a right to occupy the premises after the day on which the application was made: s 10(3)(b).

64    It is in this context that s 10(3)(c) of the Rules must be construed. The question of whether the proposed premises “could be used for the operation of a pharmacy” under applicable local government, State or Territory laws is directed to whether those laws permit or enable the premises to be used for such purposes, both when the application is made and when it is considered by the Authority. The actual use of the proposed premises as a pharmacy need not be immediate, as is implicit both in s 10(3)(e), which contemplates that the applicant may not be able to begin operating a pharmacy within six months after the Authority’s recommendation; and in the Note to s 10(3), which contemplates that the applicant may not yet have obtained a necessary building works approval or a certificate of occupancy in respect of the proposed premises. But such a use of the proposed premises must be permissible as at the relevant times. What is sufficient to establish that requirement to the satisfaction of the Authority in any particular case may depend on the applicable local government and State or Territory laws relating to land development, and on the material that is before the Authority when making its recommendation. However, as discussed above, an alleged error by the Authority in the identification or construction of the applicable local government, State or Territory laws does not itself amount to an error of law that vitiates the satisfaction of the Authority, if it was otherwise open to the Authority to reach that state of satisfaction on the material before it. That alone may be sufficient to dispose of ground 1 of the appeal.

65    In the present case, the material before the Authority established that the Council had assessed and approved Glenvale’s application for a development permit in respect of the use of the Glenvale Premises for “Health Care Service and Shop”, and had given a decision notice in respect of that approval dated 1 April 2022. It may be accepted that the development approval would not start to “have effect” until the end of the last appeal period, or the end of any appeal. Nevertheless, this did not dictate a conclusion that, for the purposes of s 10(3)(c), the Glenvale Premises could not be used for the operation of a pharmacy under applicable local government and State or Territory laws relating to land development on either the day on which the application was made or the day on which the application was considered by the Authority.

66    The statement of reasons given by the Authority for its recommendation was not particularly informative as to its process of reasoning in relation to the requirement under s 10(3)(c). The Authority made findings that the appeal proceedings in the Planning and Environment Court had been discontinued by the appellant. This had the consequence that the development approval was effective as at the date of the Authority’s recommendation, but this did not itself deal with the position at the time that the application was made by Glenvale. Indeed, in seeking consent orders for the appeal proceedings to be discontinued, Glenvale had itself indicated to the Planning and Environment Court that it wished “to have the benefit of an effective development approval immediately” following the making of those orders. However, this does not itself establish an error of law in the application of s 10(3)(c). Having had regard to the provisions of the Planning Act together with the submissions and material provided by the appellant and Glenvale respectively, it was open to the Authority to be satisfied that at all relevant times the Glenvale Premises could be used for the operation of a pharmacy under the applicable State laws relating to land development, for example, on the basis that the Council had given a development approval in respect of the premises, irrespective of when that approval would start to have effect.

67    The appellant submitted that such an approach to s 10(3)(c) could give rise to a possibility that a development approval might ultimately be set aside on appeal and therefore never start to have effect, in which case the proposed premises would never be able to be used for a pharmacy. It may be noted that, in such a situation, neither a recommendation made by the Authority nor an approval granted by the Secretary under s 90 of the Act would relieve the pharmacist of the need to comply with applicable requirements under State or Territory law: see Terry White Chemists at [20]. Further, it remains necessary for the Authority to be satisfied under s 10(3)(e) that the pharmacist will be able to begin operating a pharmacy at the premises within six months of its recommendation. In any event, such a situation did not arise in this case. There is no dispute that the development approval given in respect of the Glenvale Premises was effective when the Authority considered the application and made its recommendation. The appellant’s complaint is essentially that, in order to satisfy s 10(3)(c), Glenvale ought to have waited until the end of the appeal period under the Planning Act before making an application for approval to supply pharmaceutical benefits at the Glenvale Premises. The Authority did not accept that contention. It is not apparent that the Authority’s conclusion that at all relevant times the proposed premises could be used for the operation of a pharmacy under applicable State laws relating to land development was affected by an error of law as alleged by the appellant.

68    Ground 2 of the appeal, which was described by the appellant as the “built form” ground, can be dealt with more briefly. The appellant submits that the Authority lacked jurisdiction to make the recommendation under ss 90 and 99K of the Act, because the particular premises at which Glenvale proposed to supply pharmaceutical benefits did not physically exist on the day on which the application was made nor on the day on which the application was considered by the Authority. The short answer to this argument is that s 10(3) of the Rules contemplates that the proposed premises which are the subject of a recommendation might not be in their final built form when the Authority considers the application and makes its recommendation.

69    Thus, the general requirements can apply to premises that are under development, provided that those premises would be accessible by the public, that the applicant will be able to begin operating a pharmacy at the proposed premises within six months, and the proposed premises will not be directly accessible by the public from within a supermarket: s 10(3)(d), (e), (f). As recognised in the Note to s 10(3)(c), the requirement that the proposed premises could be used for the operation of a pharmacy under applicable local government and State or Territory laws relating to land development is capable of being satisfied by the zoning of the land or by obtaining planning approval for the proposed pharmacy, and does not require the approval of building works or the issue of a certificate of occupancy. While item 130 of Part 2 of Schedule 1 to the Act prescribes requirements relating to the minimum distance between the proposed premises and the nearest approved premises, and the proximity between the proposed premises and a full-time prescribing medical practitioner or a supermarket, such requirements are capable of application by reference to relevant plans and drawings, including the location of the centre of the ground level public entrance of the proposed premises (see s 8(1) of the Rules).

70    In my view, such a construction is consistent with the decision in Assarapin v Australian Community Pharmacy Authority (2016) 239 FCR 161, albeit that decision was concerned with the meaning of “existing premises” in a different provision of the Rules and addressed a situation in which the relevant premises had been demolished and were no longer in existence, as opposed to premises that did not yet exist in their final built form.

71    The appellant accepts that ground 3 of the appeal, which is directed to the jurisdiction of the Secretary to make a decision under s 90 of the Act to approve Glenvale for the purpose of supplying pharmaceutical benefits at the Glenvale Premises, is dependent on either or both grounds 1 and 2 being upheld. As those grounds have not been made out, ground 3 must also be dismissed.

72    I agree with the orders proposed by Collier ACJ and Rofe J.

Associate:

Dated:    15 April 2025