FEDERAL COURT OF AUSTRALIA

Hanna v Minister for Health [2013] FCA 303

THE COURT ORDERS THAT:

1.    The originating application as amended be dismissed.

2.    The applicants pay the respondent’s costs of the proceeding, as agreed or taxed.

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

REASONS FOR JUDGMENT

THE PROCEEDING

1    This proceeding concerns the capacity to review and, if reviewable, the validity of a decision or decisions of the Minister for Health under ss 90A and/or 90B of the National Health Act 1953 (Cth) (the National Health Act), as well as the question of the relief, if any, which may or should be granted in the circumstances.

2    Sections 90A and 90B of the National Health Act concern the power of the Minister for Health to approve a pharmacist supplying pharmaceutical benefits at particular premises despite the Australian Community Pharmacy Authority established under s 99J (the Authority) having recommended that an approval not be granted and the Secretary of the Department of Health having decided not to grant such an approval as required by s 90(3B) in those circumstances.

3    In the present case the application for approval was required to be referred to the Authority as specified in s 90(3A) of the National Health Act. By s 99K(2) the Authority, in making its recommendation, was bound to comply with the relevant rules determined by the Minister under s 99L. These rules are a disallowable instrument under s 99L(2). The rules applicable in the present case are those contained in the National Health (Australian Community Pharmacy Authority Rules) Determination 2006 (the Rules). The application did not comply with the Rules as the premises are located within 150m, measured in a straight line, of another approved premises (item 113 in the Rules). Accordingly, by s 99K(2) the Authority was bound to recommend against the granting of an approval. By s 90(3B) the Secretary was also bound to decide not to grant the approval. For these reasons the rights of review granted to the applicants by ss 105AB(7) in respect of the Secretary’s decision and 105AD(2) in respect of the Authority’s recommendation were of very limited utility, the relevant review body, the Administrative Appeals Tribunal, being in no different position on review from that of the Authority and the Secretary.

4    The applicants thus decided to seek to invoke the powers of the Minister under s 90A(2) of the National Health Act. Section 90A is in these terms:

(1)    This section applies in relation to a decision of the Secretary under section 90 rejecting an application by a pharmacist for approval to supply pharmaceutical benefits at particular premises, if:

(a)    the application was made on or after 1 July 2006; and

(b)    the decision was made on the basis that the application did not comply with the requirements of the relevant rules determined by the Minister under section 99L.

(2)    The Minister may substitute for the Secretary's decision a decision approving the pharmacist for the purpose of supplying pharmaceutical benefits at the particular premises if the Minister is satisfied that:

(a)    the Secretary's decision will result in a community being left without reasonable access to pharmaceutical benefits supplied by an approved pharmacist; and

(b)    it is in the public interest to approve the pharmacist.

(3)    For the purposes of subsection (2):

"community" means a group of people that, in the opinion of the Minister, constitutes a community.

"reasonable access" , in relation to pharmaceutical benefits supplied by an approved pharmacist, means access that, in the opinion of the Minister, is reasonable.

(4)    The power under subsection (2) may only be exercised:

(a)    on request by the pharmacist made under section 90B; and

(b)    by the Minister personally.

(5)    Subject to subsection 90B(5), the Minister does not have a duty to consider whether to exercise the power under subsection (2) in respect of the Secretary's decision.

(6)    The power under subsection (2) does not authorise the Minister to approve a pharmacist for the purpose of supplying pharmaceutical benefits at particular premises at which the pharmacist is not permitted, under the law of the State or Territory in which the premises are situated, to carry on business.

(7)    A decision by the Minister not to exercise the power under subsection (2) in respect of the Secretary's decision does not prevent the pharmacist from making an application to the Administrative Appeals Tribunal under subsection 105AB(7) for review of the Secretary's decision.

(8)    For the purposes of this section (other than subsection (7)):

(a)    a reference to a decision of the Secretary includes a reference to a decision of the Secretary that has been affirmed by a decision of the Administrative Appeals Tribunal or an order of a federal court; and

(b)    a reference to a decision of the Administrative Appeals Tribunal includes a reference to a decision of the Administrative Appeals Tribunal that has been affirmed by an order of a federal court.

5    Section 90B is also relevant and provides as follows:

(1)    If section 90A applies to a decision of the Secretary under section 90 rejecting an application by a pharmacist, the pharmacist may, in writing, request the Minister to exercise the Minister's power under subsection 90A(2) in respect of the Secretary's decision.

(2)    The Minister may determine the form in which a request under subsection (1) must be made and, if the Minister does so, such a request must be made in that form.

(3)    A request under subsection (1) must be made:

(a)    within 30 days after the pharmacist is notified of the Secretary's decision; or

(b)    if the pharmacist has applied to the Administrative Appeals Tribunal for review of the Secretary's decision--within 30 days after:

(i)    the pharmacist is given a copy of the Administrative Appeals Tribunal's decision affirming the Secretary's decision; or

(ii)    the application has been discontinued, withdrawn or dismissed; or

(c)    if the pharmacist has sought an order from a federal court in respect of the Secretary's decision or a decision of the Administrative Appeals Tribunal affirming the Secretary's decision--within 30 days after:

(i)    the court has made an order affirming the Secretary's decision or the Administrative Appeals Tribunal's decision, as the case requires; or

(ii)    the court proceeding has been discontinued, withdrawn or dismissed.

(4)    The Minister must, within 3 months after receiving a request under subsection (1), personally decide whether to consider the request. If the Minister has not made a decision within this period, the Minister is taken to have decided not to consider the request.

(5)    If the Minister decides to consider a request under subsection (1), the Minister must, within 3 months after making that decision, personally decide whether to exercise the power under subsection 90A(2) in respect of the Secretary's decision. If the Minister has not made a decision within this period, the Minister is taken to have decided not to exercise the power under subsection 90A(2) in respect of the Secretary's decision.

(6)    The Secretary must, by notice in writing, advise the pharmacist of:

(a)    the decision made, or taken to have been made, by the Minister under subsection (4); and

(b)    if applicable, the decision made, or taken to have been made, by the Minister under subsection (5).

6    Without presently becoming embroiled in what decision the Minister actually made, it is sufficient to note that the Minister did not accede to the applicants’ request. It is the decision or decisions which the Minister made in so doing that the applicants now seek to challenge by way of judicial review.

7    As will become apparent the real problems with resolution of the issues to which the proceeding gives rise are a result of the way in which the statutory provisions dissect the Minister’s decision-making process into at least two, and possibly three, stages.

8    In the first stage, fixed by s 90B(4), the Minister must, within 3 months after receiving the request, personally decide whether to consider the request. Hence, for the period of 3 months as specified the Minister is subject to a statutory duty to make a decision whether or not to consider the request. After the expiry of the 3 months the Minister is no longer subject to that duty. Further, if the Minister does not make a decision within the 3 months the Minister is deemed to have decided not to consider the request.

9    In the present case, the request (which the Minister accepted to be valid) was made on 27 April 2012. It follows that, for the purposes of s 90B(4), the relevant 3 month period expired on 27 July 2012. After 27 July 2012 the Minister was no longer subject to any duty to decide whether or not to consider the request.

10    In the second stage, fixed by s 90B(5), the Minister must, “within 3 months after making [a decision to consider a request under subsection (1)] personally decide whether to exercise the power under subsection 90A(2) in respect of the Secretary's decision.” Hence, if the Minister has decided to consider a request under s 90B(4), then for the period of 3 months from the making of that decision, the Minister is subject to a statutory duty to make another decision whether to exercise the power under s 90A(2). After the expiry of the 3 months the Minister is no longer subject to that duty. Further, if the Minister does not make a decision within this further period of 3 months the Minister is deemed to have decided not to exercise the power under s 90A(2). In the case of the applicants, the Minister decided to consider the request on 14 July 2012. It follows, that, for the purposes of s 90B(5), the further period of three months expired on 14 October 2012. After 14 October 2012 the Minister was no longer subject to any duty to decide whether or not to exercise the power under s 90A(2).

11    In the third stage, fixed by s 90A(2), if the Minister has decided to exercise the power under s 90A(2) as contemplated by s 90B(5) then the Minister may substitute for the Secretary’s decision a decision approving the pharmacist for the purpose of supplying pharmaceutical benefits at the particular premises if the Minister is satisfied about the two nominated matters. But as s 90A(5) discloses the Minister does not have a duty to consider whether to exercise the power under s 90A(2) in respect of the Secretary's decision. In other words, the power in s 90A(2) is both discretionary and non-compellable. The Minister was thus never under a duty to consider whether to exercise the power under s 90A(2).

12    As the facts of the present case disclose the statutory division of the decision-making process into three potential stages is highly artificial and bears no resemblance to any form of practical decision-making in the real world. In the real world, decision-makers do not divide decisions up in the way the statute contemplates and the things a decision-maker is most likely to be consider to be relevant to a decision under ss 90B(4) or 90B(5) are the same things about which the Minister must be satisfied under s 90A(2). Yet this obvious likelihood, realised in the present case, prompts a person in the position of the applicants to contend that, whatever she might say to the contrary, the Minister must have decided to consider the request under s 90B(4) and arguably must have decided to exercise the power under s 90B(5) and thus was deciding whether or to exercise the discretion in s 90A(2), which exercise of discretion miscarried. Confusion and the potential for argument is thereby created as to what the Minister actually decided and the consequences, if any, of such a decision having miscarried.

13    To understand how this confusion arises in the present case it is necessary to make findings of fact and I turn now to the documents evidencing the decision-making process.

THE FACTS

14    On the face of things at least, the Minister made a single decision on 14 July 2012. On that day the Minister signed a document which had two options below the place for her signature, being:

R1 AGREE NOT TO CONSIDER

DECIDE TO CONSIDER

15    The statement “R1 AGREE NOT TO CONSIDER” is circled. Above the Minister’s signature appears a recommendation in these terms:

RECOMMENDATION

R1 That you AGREE NOT TO CONSIDER this request…to exercise your discretionary power under section 90A…

16    It might be thought from this that the Minister decided on 14 July 2012 not to consider the applicants’ request. This is the position of the Minister. The applicants contend to the contrary. They rely on the paper to which the recommendation was attached which was put before the Minister and a subsequent statement of reasons under s 13 of the Administrative Decisions (Judicial Review) Act 1977 (Cth) (the ADJR Act), as well as the letter notifying the applicants of the decision.

17    The paper which was put before the Minister includes the following information before the recommendation page which the Minister signed as set out above.

STAGE 1 – MINISTERIAL DISCRETION REQUEST                

PURPOSE: For your decision as to whether or not you will agree to consider a request to exercise your discretionary power under section 90A of the National Health Act 1953 (the Act) to approve a pharmacy to supply pharmaceutical benefits at … .

…

Legislative Power

9.    When the delegate’s decision, on a recommendation from the Authority, is to reject an application, you have the discretion to override that decision and approve the application, particularly in circumstances where there is an unintended consequence of the Rules. However, the Act only permits you to exercise this discretion if you are satisfied that:

1.    the delegate’s decision will result in a community being left without reasonable access to pharmaceutical benefits supplied by an approved pharmacist; and

2.    it is in the public interest to approve the pharmacists to supply pharmaceutical benefits.

Stage 1 decision

10.    If you decide to consider the request, you will then have a further three months in which to decide whether or not to exercise your discretion to approve a pharmacy (Stage 2 decision). An extract from the Guidelines for Ministerial Discretion (the Guidelines), including a flow chart setting out the process for exercising your discretion under the Act is at Attachment D.

Factors that you may consider

11.    You may take a range of factors into account in deciding whether a community has reasonable access to the supply of pharmaceutical benefits by an approved pharmacist and if it is in the public interest to approve the application. These factors include the objectives of the Rules, the reason(s) the application did not meet the criteria of the Rules, the relevant community’s characteristics, current level of access and any other factors you consider relevant.

….

15.    On 27 April 2012, the Department received a valid request from the pharmacists, seeking that you exercise your discretion and approve the proposed premises at … NSW.

16.    The key factors supporting the pharmacists’ request are:

a.    the proposed pharmacy has been trading since December 2010;

b.    the proposed pharmacy is located directly across the road from Canterbury Hospital, an after-hours GP clinic and Canterbury Dental Centre;

c.    some patients of the after-hours GP clinic (based in the Canterbury Hospital), will not have access to an approved pharmacy upon leaving the clinic;

d.    the proposed pharmacy provides the longest trading hours of all pharmacies in the Campsie community, providing services until 1.00am; and

e.    a pharmacy has traded on or near the site of the proposed pharmacy for approximately 54 years.

17.    In considering whether the community of Campsie will be left without reasonable access to pharmaceutical benefits supplied by an approved pharmacist; and approving the application is in the public interest, these factors need to be balanced against the counter arguments of:

a.    the nearest approved pharmacy to the proposed premises is Bassam’s Pharmacy… Campsie, which is approximately 477 metres north east of the proposed premises by straight line (see Attachment F);

b.    there are 13 approved pharmacies within 1.5 km (by straight line) of the proposed premises (nine within 1 km) (see Attachment E), with some of these trading for extended hours, weekends and public holidays. Two are open until 10.00pm, seven days per week;

c.    there are no physical barriers between the proposed premises and any of the nearby existing approved pharmacies;

d.    the previous pharmacy approval at the same location was relocated under Rule 106: Long Distance Relocation, in November 2009;

e.    the after-hours GP clinic based in the Canterbury Hospital closes at 10.30pm, Monday to Friday and 10.00pm on Saturday and Sunday, which means that only a small number of patients would not have access to an approved pharmacy upon leaving the clinic;

f.    the patients of the Canterbury Hospital would be supplied with pharmaceuticals as per the usual arrangements for Public Hospitals, i.e. the state government is responsible for the provision of pharmaceuticals to patients in the hospital.

18.    The pharmacists have claimed that the proposed pharmacy provides the longest trading hours of all pharmacies in the local Campsie community, providing services until 1.00am. Research by the Department has found that the proposed pharmacy currently trades from 12.00 noon until 1.00am, seven days a week.

19.    In taking all the above information into consideration, the Department considers that the pharmacists have not provided a sufficiently convincing case for you to consider exercising your discretionary power to approve them to supply pharmaceutical benefits from … NSW. The Department’s detailed summary of the facts and evidence of this request is presented at Attachment B.

20.    The Department considers that there is no unintended consequence of the application of the (previous) Rules in this case, and the delegate’s rejection of the pharmacists’ original application will not leave the community of Campsie without reasonable access to pharmaceutical benefits.

21.    The Department considers that the residents of Campsie have reasonable access to the supply of PBS medicine through the 13 existing pharmacies within 1.5 km of the proposed premises (as identified on the map at Attachment E).

22.    Comments from nearby pharmacists provided to the Authority at the time of the pharmacists’ original application are at Attachment G which in short claimed that the proposed premises were not at least 1.5 km from the nearest approved pharmacy.

23.    The Department has also received information from a surrounding pharmacist claiming that the owners of the proposed pharmacy are processing PBS prescriptions from their approved pharmacy in Bellevue Hill, for PBS medicines supplied from the proposed pharmacy (Attachment G). This information has been forwarded to the Department of Human Services (Medicare) for investigation.

24.    If you decide not to consider the request, the decision made by the delegate to not approve the application under the Act will stand.

25.    The pharmacists and affected third parties may be entitled to request a Statement of Reasons for your decision. If the stated reasons for your decision do not satisfy the parties, they may choose to exercise further legal options such as making an application under the Administrative Decisions (Judicial Review) Act 1977 (AD (JR) Act) for a review of your decision by the Federal Court.

26.    An application for a new pharmacy under the amended Rules that commenced on 18 October 2011 would be unlikely to succeed as the 1.5 km distance criteria was retained for the equivalent new pharmacy Rule (Rule 130).

Sensitivity

27.    The Pharmacy Guild of Australia (the Guild) holds the view that your discretion should only be used in exceptional circumstances. Of the 55 valid applications referred for ministerial consideration since the power was introduced on 1 July 2006, 12 applications have been approved.

…

Timing/Handling:

31.    You have until 27 July 2012 to decide whether or not to consider the request. If no decision is made by this date, you will be taken to have decided not to consider this request. If you decide to consider the request, you have a further three months in which to decide whether or not to exercise your discretion.

…

18    The statement of reasons provided to the applicants and dated 30 August 2012 includes these statements:

This statement is made in relation to a decision I made on 14 July 2012, as Minister for Health, under section 90A of the National Health Act 1953 (the Act), not to consider a request by the pharmacists to approve them to supply pharmaceutical benefits at …

Background

…

5.    On 27 April 2012, the Department of Health and Ageing (the Department) received a request from the pharmacists for me to exercise my discretion under subsection 90A(2) of the Act in respect of a decision of the Secretary’s delegate not to approve their application under section 90 of the Act to supply pharmaceutical benefits at Shop 3, 571-573 Canterbury Road, Campsie, NSW.

6.    On 14 July 2012, I decided not to consider the request, in accordance with subsection 90B(4) of the Act.

…

Evidence

10.    I considered the ‘Minute to the Minister’, from Beryl Janz, Assistant Secretary, Pharmaceutical Programs and Support Branch, Pharmaceutical Benefits Division, dated 3 July 2012, which included the following attachments:

•    Summary of the Australian Community Pharmacy Authority, Pharmacy Location Rules and Ministerial Discretion process (Attachment A);

•    Summary of Facts and Evidence for this Ministerial Discretion request (Attachment B);

•    Request for Ministerial Discretion (Attachment C);

•    Extract from Ministerial Discretion Guidelines (Attachment D);

•    Map of proposed premises and surrounding approved pharmacies (Attachment E);

•    Map of proposed premises and nearest approved pharmacy by straight line (Attachment F); and

•    Comments from nearby pharmacists (Attachment G).

Findings on material questions of fact

…

17.    I found that, based on the evidence in the ‘Minute to the Minister’ and Attachment B, most of these existing approved pharmacies provide a free home delivery service.

18.    I found that based on the evidence in the ‘Minute to the Minister’ and Attachment B, the pharmacists’ claim to operate the proposed pharmacy from 9:00am – 1:00am, seven days a week, in line with the hours of the After Hours Southern Suburbs Medical Centre at Canterbury Hospital. I noted that these documents contained evidence that the proposed pharmacy currently operates seven days a week from 12:00noon – 1:00am.

19.    I found that, based on the evidence in the ‘Minute to the Minister’ and Attachment B the after-hours GP clinic based in the Canterbury Hospital closes at 10:30pm, Monday to Friday and 10:00pm on Saturday and Sunday.

20.    I found that, based on the evidence in the ‘Minute to the Minister’ and Attachment B, the patients of the Canterbury Hospital would be supplied with pharmaceuticals in accordance with usual arrangements for Public Hospitals. That is, generally the state government is responsible for the provision of pharmaceuticals to patients in the hospital.

21.    I found that, based on the evidence in the ‘Minute to the Minister’ and Attachment B, Campsie has a census population of 21,218 persons in 2011.

22.    I accepted the Department’s analysis in the ‘Minute to the Minister’ that there were no unintended consequences of the application of the Pharmacy Location Rules in this particular case and the decision of the Secretary’s delegate will not result in a community being left without reasonable access to pharmaceutical benefits supplied by an approved pharmacist.

Decision

23.    In accordance with subsection 90B(4) of the Act, I decided not to consider the pharmacists’ request against the second-stage decision criteria (see Attachment A) under subsection 90A(2) of the Act.

Reason for decision

24.    On the basis of my findings regarding the location of existing approved pharmacies and community access to pharmaceutical benefits, I was not satisfied that the decision of the Secretary’s delegate would leave the community of Campsie without reasonable access to pharmaceutical benefits.

25.    Accordingly, I was not satisfied that the request had a reasonable prospect of meeting the criteria for me to exercise my discretion to approve the request at the second stage. I note that, in making a second-stage decision, I could only exercise my discretionary power if I was satisfied that both the ‘reasonable access’ and ‘public interest’ criteria of the Act were met.

26.    Therefore, I decided that the request did not warrant further consideration because it did not appear to be one for which I could exercise my discretion.

19    The notification letter to the applicants dated 23 July 2012 in part says:

On 14 July 2012, after considering the request and other relevant documentation, the Minister for Health, the Hon Tanya Plibersek MP, decided not to exercise her discretion under subsection 90A(2) of the Act. Therefore, the decision of the Secretary to the Department of Health and Ageing (made by a delegated officer in the Department of Human Services) to reject your initial application stands.

20    The references to findings about the considerations in s 90A(2) and otherwise, as well as the terms of the letter, caused the applicants to submit that the Minister must have decided to consider the request under s 90B(4) and decided to exercise the power under s 90A(2) as set out in s 90B(5) but then decided that she was not satisfied in terms of s 90A(2)(a) (the Secretary's decision will result in a community being left without reasonable access to pharmaceutical benefits supplied by an approved pharmacist) and, accordingly, considered that she could not and thus did not exercise her discretion in the applicants’ favour under s 90A(2). The Minister submitted that the only decision she made was not to consider the request under s 90B(4).

21    As explained below it does not seem to me that the legal consequences of this dispute are material. Nevertheless, it is necessary to identify the decision which the Minister made, a process vexed by the artificiality of the statutory provisions.

22    This is not a case where, as in Plaintiff M61/2010E v Commonwealth of Australia; Plaintiff M69 of 2010 v Commonwealth of Australia (2010) 243 CLR 319; [2010] HCA 41 (the Offshore Processing case), the Minister announced that all requests under s 90 would be considered. The applicants’ case appears to assume that in deciding whether or not to consider the request under s 90B(4) the Minister is prohibited from taking into account any fact, matter or circumstance which might be relevant to the subsequent decision whether or not to grant an approval under s 90A(2). Alternatively, the applicants’ case appears to assume that if the Minister takes into account any fact, matter or circumstance other than perhaps the fact of the request itself, the Minister has necessarily decided to consider the request under s 90b(4). Neither assumption is sound. Section 90B(4) does not specify any matters that the Minister must, must not or may consider in deciding whether to consider the request. Accordingly, the relevant principle is that stated by Mason J in Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24; [1986] HCA 40 (Peko-Wallsend ) at 40:

In the context of judicial review on the ground of taking into account irrelevant considerations, this Court has held that, where a statute confers a discretion which in its terms is unconfined, the factors that may be taken into account in the exercise of the discretion are similarly unconfined, except in so far as there may be found in the subject-matter, scope and purpose of the statute some implied limitation on the factors to which the decision-maker may legitimately have regard.

23    I am unable to discern any implied limitation from the subject-matter, scope and purpose of the National Health Act which would prohibit the Minister from considering the matters relevant to the decision under s 90A(2) in deciding whether or not consider a request under s 90B(4). The fact that the statute creates up to three decision-making points does not itself impose any such implied limitation.

24    The real question, accordingly, is whether in considering those matters the Minister necessarily decided to consider the request under s 90B(4), despite having said she decided to the contrary. In my view, the answer to this question must be “no”. The contemporaneous record of the Minister’s decision is the signature page referred to above. The Minister unequivocally describes her decision as a decision not to consider the request. The recommendation which the minister may be inferred to have accepted is a recommendation not to consider the request. The paper which precedes the recommendation makes plain that the matters are addressed for the purpose of the Minister deciding whether or not to consider the request. The statement of reasons is to the same effect. The notification letter can be read differently, but it is a letter from the Department and cannot alter the effect of the other records of the decision, all of which support the finding that the Minister considered a wide range of matters in deciding whether or not to consider the request and thereafter decided not to consider the request.

25    For these reasons I find that the Minister made one decision on 14 July 2012, being a decision not to consider the applicants’ request under s 90B(4) of the National Health Act.

IS THE DECIsion reviewable?

26    The Minister submitted that the decision could not be the subject of judicial review under the ADJR Act because the decision lacks the requisite qualities of finality and substance (Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321; 1990 HCA 33 at 337). Alternatively, there is no “matter” founding the court’s jurisdiction under s 39B of the Judiciary Act 1903 (Cth) the Judiciary Act) because the ultimate power of the Minister involves a non-compellable discretion.

27    I do not accept either submission. Leaving aside the fact that any such issue should have been raised by way of a notice of objection as to competency rather than in submissions for the hearing, the Minister’s decision under s 90B(4) (in common with decisions under s 90B(5) and s 90A(2) if the Minister had made them) is a final decision which had a direct practical impact on the applicants. By her decision the Minister finally and substantively dealt with the applicants’ request. In so doing the Minister discharged the duty imposed on her under s 90B(4), a duty which continued until the expiry of the period of 3 months from the request having been made. The duty was discharged by the Minister under federal law and the decision was made under federal law. The fact that a power is discretionary and non-compellable does not mean there is no “matter” as the Offshore Processing case discloses, although it may mean that the relief which can be granted is confined.

28    It follows that the court has before it a proper claim for judicial review under the ADJR Act and a “matter” in accordance with s 39B of the Judiciary Act.

GROUNDS OF Challenge

Constructive jurisdictional error (ground 1)

29    This ground depends on the notion that the Minister was confused about what she was doing. It proposes that although the Minister said she was deciding not to consider the request she in fact considered the request and decided to exercise the power under s 90A(2) but, when she came to exercise that power, she failed to do what was required of her, namely: - (i) to ask herself and thus form an opinion about what the community was for the purposes of s 90A(2), and (ii) to find that she was satisfied that “the Secretary's decision will result in a community being left without reasonable access to pharmaceutical benefits supplied by an approved pharmacist” because the contrary finding would be irrational and illogical.

30    This ground fails at the outset on the basis that the Minister decided only not to consider the applicants’ request under s 90B(4). Nevertheless, for the purpose of resolving this issue and all of the subsequent issues, it may be assumed either that because of the way in which she made that decision the Minister was engaging with s 90A(2) or, as the applicants would have it, the Minister was in fact exercising the power under s 90A(2). Either way, the result is the same.

31    The only basis upon which it can be said that the Minister’s state of non-satisfaction about s 90A(2)(a) miscarried is that the Minister did not adopt the applicants’ argument, as set out in the request, to the effect that the patients and employees of, and visitors to, the Canterbury Hospital, GP Clinic and Dental Care across the road from the premises constituted a “community”. Instead the Minister noted (in the statement of reasons) that patients of the Canterbury Hospital are provided with pharmaceuticals by the hospital and said (also in the statement of reasons) that she was not satisfied that the Secretary’s decision would leave the “community of Campsie” without reasonable access to pharmaceutical benefits. It must be inferred from this that the Minister did not simply ignore the applicants’ argument. The Minister simply did not agree with the applicants’ identification of the community. In the Minister’s view the community to be considered was the community of Campsie as a whole. The fact that a hospital pharmacy only gives patients starter packs, a point made in the applicants’ request, did not mean that the Minister was bound to accept the applicants’ identification of the community. As s 90A(3) makes clear, the identification of the community is a question for the opinion of the Minister. Refusing to adopt the applicants’ opinion as what constituted a community is not evidence of a failure to ask the right question. Nor is it evidence of an irrational or illogical decision of non-satisfaction.

32    The applicants identified a series of matters said to render the Minister’s state of non-satisfaction irrational and illogical. The thrust of these matters was that the nearest pharmacy was 478m away and the Minister did not know the trading hours. Further, on weekdays, there was no approved pharmacy open between 10.00 pm and 1.00 am whereas the applicants’ pharmacy which had operated on the premises for many years (before the approval was lost) was open during these hours. It should be apparent that, in substance, the challenge is to the merits of the Minister’s state of non-satisfaction. The observation in Parramatta City Council v Pestell (1972) 128 CLR 305 at 323 remains apt:

There is, however, a world of difference between justifiable opinion and sound opinion. The former is one open to a reasonable man; the latter is one that is not merely defensible – it is right.

33    Other difficulties are apparent. First, the challenge assumes that the Canterbury Hospital, GP Clinic and Dental Care, and not Campsie as a whole, constitutes the relevant community. On the Minister’s opinion about the relevant community the facts on which the applicants rely have little, if any, persuasive force even on the merits. There was no obligation on the Minister to expressly refute the applicants’ proposition about the relevant community. The Minister identified the relevant community, Campsie, for herself as she was entitled to do. Second, even assuming that the Minister was bound to accept the applicants’ proposition that the Canterbury Hospital, GP Clinic and Dental Care are a community (which the Minister plainly was not), the challenge is still nothing more than a complaint about the merits dressed up as errors of law. Why, it might be asked, was the Minister bound to be satisfied that this community would be without reasonable access to pharmaceutical benefits merely because there was no pharmacies offering services after 10.00pm? Why was it irrational or illogical for the Minister not to be concerned about the patients (given that they obtain supplies from the hospital pharmacy even if for a limited period) and not to be concerned about the capacity of visitors, staff and employees to fulfil their needs before 10.00pm at one of the other pharmacies in Campsie? The answer is that it was reasonably open to the Minister to reach the view she did and the legal challenge on this ground is without foundation.

34    For these reasons ground 1 cannot be sustained.

Asking the wrong question about the Guidelines (ground 2)

35    Ground 2 concerns the Guidelines for Ministerial Discretion June 2006 (the Guidelines). The applicants contend that the Guidelines state that the Minister may only exercise her discretion to approve a request in unique circumstances that are not covered by the Rules, to address unintended consequences of the Rules and to take into account the objectives of the fourth Community Pharmacy Agreement. According to the applicants these requirements illegitimately circumscribe the discretion in s 90A(2) because they limit the exercise of the discretion in a manner inconsistent with the statute.

36    The difficulty with this argument is that the Guidelines do not do what the applicants say they do. The Guidelines do not purport to confine the Minister’s consideration at all. They say only that the aim of the discretionary power vested in the Minister is to address unintended consequences of the application of the Rules. They then explain how this aim should be understood by reference to the precise terms of s 90A(2) itself. After explaining that the determination of the community that is relevant to the request and what is reasonable access are matters for the Minister, the Guidelines identify matters to which the minister may have regard in deciding whether a community has reasonable access to the supply of pharmaceutical benefits by an approved pharmacist which includes “any other factors the Minister considers relevant”. What the Guidelines do not do is state that the Minister may only exercise her discretion to approve a request in unique circumstances that are not covered by the Rules, to address unintended consequences of the Rules and to take into account the objectives of the fourth Community Pharmacy Agreement.

37    Nor do any of the documents evidencing the Minister’s decision suggest that the Minister applied the Guidelines in any manner inconsistent with the powers vested by the statute. The Guidelines are referred to in terms consistent with their content which makes plain that the Minister was free to consider any matter she considered relevant. The only constraint the Guidelines imposed was to note that the commercial interests of the pharmacist making the request or of any other party are not generally considered to be relevant to the question whether a community has reasonable access to the supply of pharmaceutical benefits by an approved pharmacist and the public interest. No complaint is made about that constraint by the applicants. The constraint about which they do complain simply does not exist.

38    For these reasons ground 2 should not be accepted.

Asking the wrong question about unintended consequences (ground 3)

39    Ground 3 is a variant of ground 2. The applicants contend that the Minister treated the absence of unintended consequences as a bar to a favourable exercise of discretion.

40    No inference should be drawn that the Minister treated the absence of unintended consequences as a bar to a favourable exercise of discretion, whether the discretion be that under ss 90B(4), 90B(5) or 90A(2). In the paper given to the Minister the Guidelines were referred to and an extract provided. Amongst other things, the paper said that the Minister had a discretion to overturn the Secretary’s decision and approve the request “particularly in circumstances where there is an unintended consequence of the Rules”. It also said that in deciding whether a community has reasonable access to the supply of pharmaceutical benefits by an approved pharmacist and the public interest the Minister “may take a range of factors into account” including the objectives of the Rules, the reasons the application did not meet the criteria of the Rules, the relevant community’s characteristics, current level of access and “any other factors you consider relevant”. The paper then said that the Department “considers that there is no unintended consequence of the application of the (previous) Rules in this case, and the delegate’s rejection of the pharmacists’ original application will not leave the community of Campsie without reasonable access to pharmaceutical benefits”. The statement of reasons said only that the Minister accepted this analysis of the Department.

41    Read fairly and in context it cannot be inferred that the Minister treated her finding of the lack of unintended consequence of the application of the Rules as a bar to a favourable exercise of discretion. The Minister may be inferred to have taken that finding into account in reaching her decision (in my view, a decision under s 90B(4) only) but, whether under ss 90B(4), 90B(5) or 90A(2), nothing in the statute prohibited the Minister from taking that consideration into account. Considering whether the application of the Rules had unintended consequences could hardly be said to be an irrelevant consideration for the Minister. Nor can it be accepted that this consideration inevitably denies the discretion because it leads to application of the Rules rather than an exercise of discretion if there are no unintended consequences. The finding about no unintended consequences was one of a series of findings the Minister made. But it is clear from the paper and the statement of reasons that the Minister never lost sight of the terms of s 90A(2) or, for that matter, s 90B(4). Unless it can be said that the Minister was prohibited from taking into account the question whether the application of the Rules had unintended consequences, which it cannot, this ground of challenge must fail.

Irrelevant considerations (ground 5)

42    Ground 5 alleges that the Minister considered irrelevant matters, being view of the Pharmacy Guild of Australia and statistics about how many requests under s 90A had been made to and approved by the Minister.

43    The views of the Pharmacy Guild of Australia and the statistics are contained in the paper which was put before the Minister. The views of the Pharmacy Guild of Australia were that that power in s 90A(2) should only be used in exceptional circumstances. The statistics were that the Minister had received 55 applications or requests under s 90A and approved 12 of them. According to the applicants the Minister was prohibited from taking these matters into account because they are irrelevant considerations.

44    I disagree. Consistent with the reasoning in Peko-Wallsend at p 40 the Minister’s discretions under ss 90B(4), 90B(5) and 90A(2) were unconfined in terms of matters that may not be considered “except in so far as there may be found in the subject-matter, scope and purpose of the statute some implied limitation on the factors to which the decision-maker may legitimately have regard”. Nothing in the subject-matter, scope and purpose of the statute suggests that the Minister is prohibited from having regard to the view of the Pharmacy Guild of Australia and statistics about how many requests under s 90A had been made to and approved by the Minister when exercising a power under ss 90B(4), 90B(5) or 90A(2) of the National Health Act. If the Minister had done something other than merely take these matters into account, such as accepting that the discretion may only be exercised in exceptional circumstances or deciding that this application should not be considered because 12 had already been approved or only 12 had been approved, then there might be scope for a valid challenge to the decision. In such a case, the Minister would have illegitimately confined the discretion. But it cannot be that the statute prohibits the Minister from considering these matters.

45    For these reasons ground 5 must fail.

Procedural fairness (ground 4)

46    The procedural fairness grounds cannot be dealt with so readily.

47    The first issue is whether the powers in ss 90B(4), 90B(5) and/or s 90A(2) are conditioned on the observance of procedural fairness. The Minister submitted that they were not but I find the submission unconvincing. Each of the sections involves the exercise of a power which might potentially defeat the interest of the person making the request for approval. The statutory circumstances are not sufficiently similar to those in Plaintiff S10/2011 v Minister for Immigration and Citizenship (2012) 290 ALR 616; [2012] HCA 31 (Plaintiff S10/2011) to enable a contrary conclusion to be reached. In terms of the factors which were significant to the conclusion that the power in Plaintiff S10/2011 was not conditioned on the observance of procedural fairness as set out at [99], s 90A(2) (and thus the sections which lead up to it, ss 90B(4) and (5)) might be characterised as a dispensing provision which may be exercised by the Minister personally but the Minister is not otherwise accountable for the decisions she makes. Moreover, the exercise of the powers is pre-conditioned by the making of a request by a pharmacist, and, if a request be made there is a requirement to consider it. Also, the power in s 90A(2) is not merely pre-conditioned on a view about the nebulous concept of the public interest. The Minister has to consider a question within fairly narrow confines, being the reasonable access of the community to pharmaceutical benefits from an approved pharmacy. All of these factors provide a basis for distinguishing Plaintiff S10/2011.

48    It is also apparent that in Yu v Minister for Health [2013] FCA 261 (Yu v Minister for Health) Jessup J found that the power in s 90A(2) was conditioned on the observance of procedural fairness. The applicants relied on a statement his Honour made at [40] as follows:

It was, clearly, a significant aspect of their Honours’ reasons in Plaintiff S10 that they were dealing with “a situation … where a senior official standing at the peak of the administration of the statute is not required to give an opportunity for a hearing in every case affecting an individual who has had an opportunity of a merits review in the course of the administrative process”. That is not the present case. It might be in the case of a disappointed applicant under s 90, for whose circumstances the provisions of s 90A are intended to provide a potential avenue of amelioration. But it could not be regarded as the situation where another person’s interests would be adversely affected by a positive outcome under s 90A, but where that person had had no involvement in the previous proceedings under s 90 which had presumptively taken place.

49    Given that Jessup J found that there had been a denial of procedural fairness (at [42] – [44]) the statement at [40] must be understood as an observation about the content of the obligation to give procedural fairness and not its existence. His Honour was distinguishing the case before him, which involved a third party competitor, from that of an applicant, but having found the power to be conditioned on giving procedural fairness it can only be the content and not the existence of the obligation which may vary. It follows that Yu v Minister for Health is authority for the proposition that the power in s 90A(2) is conditioned on the observance of procedural fairness. Consistent with the principles of comity, unless persuaded the decision is wrong the reasoning should be applied in the present case. I am not persuaded the decision is wrong and it seems to me the reasoning is equally applicable to ss 90B(4) and 90B(5) as s 90A(2).

50    What then was the content of the obligation in the present case? The applicants contend three denials of procedural fairness.

51    The first alleged denial of procedural fairness relates to the Guidelines. It is said that the Minister failed to disclose the Guidelines to the applicants before the decision was made, as confirmed by the fact that the applicants’ request makes no reference to the Guidelines. However, it is apparent that the form which the applicants signed on 29 April 2012 contained a declaration immediately above the signature panels which, amongst other things, said:

I/we have attached the following required information in support of this request (please refer to Chapter 4 of the Guidelines for more details about the required information):

…

52    After the signatures of the applicants a note appears as follows:

For a copy of the Guidelines contact the Department on #### [phone number] or go to #### [internet address which refers to “ministerial discretion”].

53    Given that Chapter 4 of the Guidelines does set out the required information and the Guidelines are called “Guidelines for Ministerial Discretion” I infer that the form which the applicants signed not only identified the Guidelines and explained how the applicants could obtain them but also that the applicants declared that they had attached the required information, the required information being the information in Chapter 4 of the Guidelines. On these facts the alleged denial of procedural fairness on this basis is doomed. Whatever else might have been the content of the obligation it was no part of it to ensure that the applicants had read the form they signed which expressly directed their attention to the relevance of the Guidelines and how to obtain a copy.

54    The second alleged denial of procedural fairness relates to so-called adverse information the Department obtained and informed the Minister about in the paper. The applicants said in their request that the current and proposed trading hours were 9.00am to 1.00am seven days per week. The paper put before the Minister said that research by the Department has found that the proposed pharmacy currently trades from 12 noon until 1.00am seven days per week. The paper says nothing about the proposed trading hours in the future.

55    The basic principle is that “in the ordinary case ... an opportunity should be given to deal with adverse information that is credible, relevant and significant to the decision to be made” (Kioa v West (1985) 159 CLR 550; [1985] HCA 81 at 629 cited in Re Minister for Immigration and Multicultural Affairs; Ex parte Miah (2001) 206 CLR 57; [2001] HCA 22 at [140]). It is difficult to accept that this information, which related only to the current and not the proposed hours of the pharmacy, was of any significance to the decision made. There was no suggestion, for example, that the pharmacy was not open between 10.00pm and 1.00am, a matter which the applicants did regard as important and supportive of their case on the basis that other pharmacies in the area did not trade in these extended evening hours. Nor was there any suggestion that, if approved, the pharmacy would not trade in accordance with the proposed hours. The mere fact that the matter is referred to in the paper does not make it significant to the decision. It is apparent from reading the paper as a whole that this matter had no real significance at all. Moreover, it is referred to in the Minister’s statement of reasons merely as something the Minister noted, which supports its lack of significance. Given the nature of the application I am not persuaded that the Minister was obliged to inform the applicants about the Department’s research having shown that the pharmacy currently traded from 12 midday to 1.00am so that they could be given an opportunity to deal with that information. The information was of marginal relevance at best and there is no suggestion that the Minister did other than treat it as such.

56    The third alleged denial of procedural fairness relates to so-called adverse information submitted by third parties. Examination of that material also discloses its lack of significance. A number of pharmacists pointed out that the premises were within 1.5km of another pharmacy, which is the very reason that the Authority recommended that the application not be approved and the Secretary was thereby bound not to approve it. In this sense, the fact being pointed out by the other pharmacists was not only one of which the applicants were fully aware, it was the reason that the only way the applicants could ever obtain the approval they sought was by the exercise of the Ministerial discretion under s 90A(2). To the extent that the submissions from third parties did this and no more the Minister cannot be found to have had any obligation to inform the applicants to this effect and given them an opportunity to deal with that information.

57    Other than submissions to this effect there were two letters from Campsie Discount Drug Stores to the Minister. The first letter from Campsie Discount Drug Stores is dated 4 November 2011. It thus must have been lodged in response to the application to the Secretary. The second is dated 28 January 2012. Consideration of the content of those letters undermines the applicants’ submission that they contain anything of significance to the decision.

58    The first letter says that the premises are within 1.5km of other pharmacies including the Campsie Discount Drug Store. The applicants in their request identified the pharmacies within a 1.5km radius of the premises. It is not surprising that the applicants did so given that the issue the Minister had to be satisfied about under s 90A(2) was whether the Secretary's decision would result in a community being left without reasonable access to pharmaceutical benefits supplied by an approved pharmacist. Given the nature of the issue which was before the Minister the question of other pharmacies servicing the community was obviously one the Minister would have to take into account under s 90A(2) and thus was entitled also to consider under ss 90B(4) and (5). It follows that this information must have been (and as their request shows, was) recognised by the applicants as of obvious relevance to the Minister’s discretion. Consistent with the reasoning in Commissioner for ACT Revenue v Alphaone Pty Ltd (1994) 49 FCR 576 at 592 there could be no obligation to inform the applicants about such material. From the very nature of the decision they sought the applicants knew from the outset and thus had ample opportunity to deal with the question of other pharmacies in the area and particularly within 1.5km of the premises and how that might impact upon the relevant state of satisfaction.

59    The first letter also refers to the premises being the site of a pharmacy which had relocated a couple of years ago. The statement seems to be wrong and to have been recognised by the Minister as such. The Minister clearly proceeded on the basis that there was a pharmacy operating on the premises. As such, the statement was not significant and, in any event, the long-standing use of the premises as a pharmacy was obviously relevant and understood as such by the applicants who made this point in their request.

60    The first letter then refers to there being ten pharmacies in the nearby retail centre at Campsie and that they offer and provide adequate services to the catchment area opening late at night, weekends and public holidays, so that there would be no additional community benefit from an eleventh pharmacy in this postcode. Again, these matters are the same as those the applicants addressed in their request. The location of other pharmacies was a matter so obvious to the Minister’s discretion that the applicants dealt with it in their own request and, indeed, sought to minimise its significance by identifying the Canterbury Hospital as its own community. No further opportunity to deal with this matter was required merely because the Minister had put before her a letter from a competing pharmacist which I infer had been made available to the Secretary.

61    The second letter is to the FOI Coordinator. The letter confirms that the author (the same author as the first letter) has no objection to the “supply of his submitted documentation under the FOI Act”. The context of the letter thus has nothing to do with the request under s 90A(2). The second letter then says:

And if it is at all possible, attention should be brought to you of the fact the pharmacy to which this failed application applies is still processing PBS subsidised medications from their APPROVED Bellevue Hill premises for medications supplied from their UNAPPROVED Campsie premises in contravention of the former’s PBS Agreement with Medicare. Much has been made of this illegal process in pharmacy circles recently but little seems to be being done by the Department to curtail the process.

62    The applicants described this as “plainly adverse to the applicants and to any favourable response to” their request. I disagree. Even from the terms of the letter it is clear that the author considered the issue to be separate from the question of the approval of the premises. It is true that the matter is referred to in the paper which was put before the Minister but from the terms of the reference it is also apparent that the Department considered this to be a matter requiring separate investigation. Hence, the Department noted the issue and said only that the information had been forwarded to the Department of Human Services (Medicare) for investigation. There is no suggestion that the Department considered the matter in any way relevant to the resolution of the request. There is no basis to infer that the Minister thought it relevant. Indeed, the Minister does not refer to the matter at all in her statement of reasons. The fact that she considered the submissions by the other pharmacists does not mean that they all were material, let alone, significant to her decision. To the extent that they were material, in that they identified other pharmacies in the same area, the issue was obvious given the statutory provisions and was known to be such by the applicants who in fact dealt with the issue extensively in their request. Otherwise, the submissions, specifically the allegation in the second letter, was not material to the decision which had to be made, was not treated by the Department as material, and other than that the Minister considered all of the submissions by pharmacists should be inferred to have had no significance whatsoever to the decision the Minister made.

63    For these reasons I do not accept that the decision was made in contravention of any requirement of procedural fairness.

Failure to give reasons (ground 6)

64    The applicants contend that the statement of reasons furnished by the Minister does not disclose the true reasons for the decision because it omits some of the material referred to in the paper that was put before the Minister. There is no basis for inferring from that or any other circumstance that the Minister’s statement of reasons does other than disclose her actual reasons. The difference between the statement of reasons and the paper is far more likely to be a result of the Minister not having considered certain matters in the paper to have been material to her decision as opposed to the Minister having provided an inaccurate account of her reasons. This ground of challenge also fails.

CONCLUSIONs

65    The applicants have not made out any ground for relief. The application should be dismissed with costs. If any ground had been made out then difficult questions about the available relief would have arisen. This is because the 3 months specified in each of ss 90B(4) and 90B(5) as the period during which the Minister is subject to a duty of consideration has expired and s 90A(5) specifies that, subject to s 90B(5), the Minister does not have a duty to consider whether to exercise the power under s 90A(2) in respect of the Secretary's decision. It follows that whether the Minister made a decision under ss 90B(4) (as I have concluded), 90B(5) or 90A(2) the Minister is under no duty to do anything with the request at this time. It follows that there is nothing to remit to the Minister. Moreover, while the remedies of a declaration and an order quashing the decision are available at least two further questions arise. The first is whether “decision” in ss 90B(4) and 90B(5) means a decision in law or fact. If the former then the deeming provision in each section will operate and the Minister will be taken to have refused the request. If the latter (the better view in my opinion having regard to Re Brian Lawlor Automotive Pty Ltd & Collector of Customs (1978) 1 ALD 167) the Minister nevertheless has no duty to do anything with the request, the position being the same with respect to s 90A(2) having regard to s 90A(5). The second is the question of utility given not only the Minister’s lack of any duty to do anything but also the inability to re-enliven any duty on the Minister’s part given the expiry of the two periods of 3 months without the process starting over (see s 90A(1)). The facts are so far removed from the Offshore Processing Case that it provides no meaningful analogy or basis for being satisfied about the utility of any order even if a ground of challenge had been made out.

Associate:

Dated: 5 April 2013