FEDERAL COURT OF AUSTRALIA
Hope v Australian Community Pharmacy Authority [2017] FCA 669
ORDERS
DATE OF ORDER: |
THE COURT ORDERS THAT:
1. The decision of the First Respondent made on 4 November 2016 to recommend that the Second Respondent grant approval under s 90(1) of the National Health Act 1953 for the Third Respondent to supply pharmaceutical benefits at Tenancy T19, Cove Hill Shopping Centre, 11 Cove Hill Road Bridgewater in the State of Tasmania be set aside.
2. The Third Respondent’s application to supply pharmaceutical benefits be remitted to the First Respondent for reconsideration according to law.
3. The Third Respondent to pay the First and Second Applicants’ costs as assessed or agreed.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
KERR J:
1 The First Respondent, the Australian Community Pharmacy Authority (the Authority) has purported to recommend to the Secretary, Department of Health that the Third Respondent, Slopen Main Pty Ltd as Trustee for Slopen Main Discretionary Trust (Slopen Main) be approved to supply pharmaceutical benefits at premises at Tenancy T19 Cove Hill Shopping Centre, Bridgewater, Tasmania.
2 The Court has concluded that by reason of misleading information supplied to it by the Third Respondent, the Authority was disabled from the due discharge of its imperative statutory functions. In consequence the decision made by the Authority is properly to be regarded, in law, as no decision at all. This is because, in the sense of the authorities referred to by the High Court in SZFDE v Minister for Immigration and Citizenship [2007] HCA 35; (2007) 232 CLR 189 (SZFDE) the jurisdiction conferred upon the Authority pursuant to the National Health Act 1953 (Cth) (the Act) remains constructively unexercised.
3 Accordingly, in the exercise of the court’s supervisory jurisdiction conferred upon it by s 39B of the Judiciary Act 1903 (Cth), that decision is set aside and the Secretary’s reference of the Third Respondent’s application is remitted to the Authority for reconsideration according to law.
4 Reasons for the Court continuing an interlocutory injunction in these proceedings were published on 22 December 2016: Hope v Australian Community Pharmacy Authority [2016] FCA 1597 (Hope No.1). Those reasons identify the parties and the facts as then in dispute. To avoid unnecessary repetition I incorporate those reasons by reference.
The dispute in summary
5 Slopen Main applied to the Secretary for approval to supply pharmaceutical benefits from premises in a small shopping centre at T19 Cove Hill Shopping Centre, 11 Cove Hill Rd, Bridgewater in Tasmania (T19 Cove Hill). On 24 July 2016 its application was received on the Secretary’s behalf. Slopen Main’s application was for a new pharmacy in a facility (small shopping centre) within the meaning of the provisions of Item 133 of Part 2 of Schedule 1 of the National Health (Australian Community Pharmacy Authority Rules) Determination 2011 (PB 65 of 2011) (the Rules) made under s 99L of the Act.
6 It is not in dispute that at all material times the First and Second Applicants held existing approvals to supply pharmaceutical benefits from premises at, respectively, Shop 5 Green Point Plaza, 26-28 Green Point Rd, Bridgewater in Tasmania (Green Point Plaza) and 172 Brighton Rd, Brighton in Tasmania (Brighton Pharmacy).
7 Section 90 of the Act empowers the Secretary of the Department administering the Act to grant approval for the supply of pharmaceutical benefits at particular premises if, but only if, the Secretary has received a recommendation supporting the application from the Authority. On 26 July 2016 the application was referred to the Authority for the purpose of obtaining a recommendation as to whether or not it should be approved. On 4 November the Authority decided to recommend that the Secretary approve the application.
8 The Applicants have claimed that two essential requirements for the Authority to validly make such a recommendation do not exist. Paraphrasing and summarising their Further Amended Statement of Claim (at [10]-[15]), the Applicants assert that (a) the premises the Authority purported to recommend for approval for the supply of pharmaceutical benefits was neither “in” a small shopping centre, nor were the premises (b) at least 500m in a straight line from the nearest other “approved premises”; that is the pharmacy at Green Point Plaza operated by the First Applicant.
9 The Applicants submit that those requirements are jurisdictional facts rather than matters for the opinion of the Authority. In the trial of these proceedings they led evidence on that premise.
10 Additionally or alternatively the Applicant’s Further Amended Statement of Claim pleads that the application considered by the Authority was not a bona fide application to supply pharmaceutical benefits from T19 Cove Hill and that the application must be set aside on the basis that the Authority’s decision was induced or affected by misrepresentations on the part of the Third Respondent. They submit the proven conduct of the Third Respondent falls within the meaning of fraud on the Authority as that concept applies in the public law context. The Applicants claim that the Third Respondent’s application was not a bona fide application and was merely part of a scheme for it to obtain approval for it to operate a pharmacy from different premises in respect of which approval was prohibited. The Applicants claim the Third Respondent submitted misleading information to the Authority and in so doing disabled it from making a true assessment of the nature of the application before it.
11 As the Court has accepted the additional or alternative argument pressed by the Applicants it is unnecessary for it to decide whether the two specific requirements under the Rules that the Applicants pleaded were not met were jurisdictional facts. The Court need not address Mr Chesterman’s submission that Davies J decision in Kastrinakis v Australian Community Pharmacy Authority [2013] FCA 995 (2 October 2013) was plainly wrong.
Legal framework
12 Although it involves some repetition of what appears in Hope No.1 it is appropriate to restate the applicable law governing approval for the supply of pharmaceutical benefits as is relevant in this instance.
13 Section 90 of the Act permits an approved pharmacist to apply to the Secretary for the supply of pharmaceutical benefits at particular premises.
14 The provisions of the Act that empower the Secretary to grant such approvals are as follows:
90(3) Subject to this section, where an approved pharmacist desires to supply pharmaceutical benefits at premises other than premises in respect of which approval has been granted, the Secretary may on application by the approved pharmacist, grant approval in respect of those other premises.
90(3A) Subject to subsections (3AA) and (3AE), [neither of which are relevant] an application under this section must be referred to the Authority.
…
90(3B) An approval may be granted under this section in respect of an application that has been referred to the Authority under subsection (3A)…only if the Authority has recommended the grant of the approval, but the Secretary may refuse to grant an approval even if the grant has been recommended by the Authority.
15 The duty of the Authority then is to consider applications referred to it under the Act by the Secretary and to decide whether to recommend they be approved or that they not be approved. The Authority however is, and clearly is intended to be, highly constrained in what it must take into account in exercising that duty.
16 Section 99K(2) of the Act requires the Authority to “comply with the relevant rules determined by the Minister under section 99L.”
17 The Rules in the iterations that have been determined from time to time by the Minister under s 99L have been shaped in large measure by the terms of successive agreements struck between the Pharmacy Guild of Australia and the Federal Government.
18 In Walkerden v Wodonga Pharmacy Pty Ltd [2015] FCA 273; (2015) 230 FCR 243 (Walkerden) Mortimer J cited the introductory paragraphs of Part 1 of the most recent of those agreements, concluding [at 62]:
Clearly the objectives of the 2011 Rules, as set out in cl 1.2(d)(vi) of the fifth [Community Pharmacy] Agreement, are of principal relevance to the construction issues on this application. Those objectives have twin themes: a sustainable and viable community pharmacy network (which focuses at least as much on the interests of pharmacy owners as on the community) and access to pharmaceutical benefits (with a focus only on the community’s interests). In that sense, the location rules are an attempt to balance community access with commercial sustainability.
19 I drew on those observations in Hope No.1 in support of the conclusion that the Act and the Rules made thereunder were intended to provide for a qualified, limited and bounded protection for the interests of existing providers of pharmaceutical products while at the same time ensuring there was convenient community access to those products.
20 The Rules determined by the Minister under s 99L that have applied to these proceedings at all material times are the National Health (Australian Community Pharmacy Authority Rules) Determination 2011 as registered in the Federal Register of Legislative Instruments on 3 December 2015.
21 The Rules prescribe mutually exclusive circumstances in which the Authority must recommend an application be approved and when it must not. As relevant to this proceeding the Rules are as follows:
10 When Authority must recommend approval of applicant
The Authority must recommend that an applicant be approved under section 90 of the Act in relation to particular premises if:
(a) [not presently relevant]
(b) for any other application:
(i) the application states that it is one of the kinds mentioned in column 2 of an item in Part 2 of Schedule 1; and
(ii) all the requirements set out in column 3 of that item are met; and
(iii) all the requirements set out in Schedule 2 are met.
11 When Authority must recommend applicant not be approved
The Authority must recommend that an applicant not be approved under section 90 of the Act in relation to particular premises if a requirement, under paragraph 10(a) or (b), that applies in relation to the application is not met.
22 Because it is not in dispute that the application submitted by Slopen Main was for a “new pharmacy in a facility (small shopping centre)” it was, for the purposes of the Rules, “one of the kinds” of applications mentioned in column 2, Item 133 in Part 2 of Schedule 1.
23 There were three specific requirements set out in column 3 of that Item applying to such an application. All three were required to be met for the Authority to lawfully to recommend approval, viz:
1. The proposed premises are in a small shopping centre.
2. The proposed premises are at least 500 m, in a straight line, from the nearest approved premises.
3. There are no approved premises in the small shopping centre.
24 While what is conveyed by those requirements may appear to lack complexity, that is far from the case. For the purposes of the Rules, the expression “small shopping centre” has a defined meaning.
25 Rule 5 Interpretation provides that “in this Determination”:
small shopping centre means a shopping centre that:
(a) has a gross leasable area of at least 5 000 m2; and
(b) contains a supermarket that occupies a gross leasable area of at least 2 500 m2; and
(c) contains at least 15 other commercial establishments; and
(d) has customer parking facilities.
26 The terms ‘shopping centre’, ‘gross leasable area’ and ‘single management’ as found within that interpretation provision are themselves further defined. Rule 5 provides that for the purpose of the Rules:
a. shopping centre means a group of shops and associated facilities that is under single management
b. gross leasable area means:
(a) for a shopping centre — the total floor area of the shopping centre excluding loading docks and car parks; and
(b) for a supermarket — the total floor area of the supermarket excluding loading docks.
c. single management, for a shopping centre…:
(a) means management for the centre as a whole:
(i) by one manager, or by 2 or more managers working cooperatively under an agreement; and
(ii) to encourage the use of the centre as a single integrated facility; and
(iii) including management of the following matters for the centre:
(A) security;
(B) pedestrian and vehicular access;
(C) cleaning;
(D) signage;
(E) trading hours;
(F) marketing;
(G) maintenance of buildings, common areas and utilities; and
(b) does not include independent owners or tenants of premises in a building or centre that cooperate:
(i) on particular occasions; or
(ii) in relation to some, but not all, of the matters mentioned in subparagraph (a)(iii) in relation to the building or centre.
27 Rule 7(1) further provides that for the purposes of the Rules, subject to subsection (2) the expression “commercial establishment” means premises:
(a) in a shopping centre; and
(b) occupied by, or likely to be occupied by:
(i) a shop where goods, food or beverages are sold retail; or
(ii) a bar, café, restaurant or takeaway; or
(iii) a business that provides services to customers.
28 Rule 7(2) however expressly excludes from that definition certain businesses including some that might ordinarily be understood to fall within the language of that defined term. Those relevantly include a “commercial office space”; “premises occupied by an accountant, analyst, architect, engineer, lawyer, planner, stockbroker or surveyor, unless the premises are occupied as a shopfront”; “a council office or government or statutory corporation office or shopfront other than an Australia Post shopfront, an Australian Broadcasting Commission shop or a Medicare or Centrelink shopfront” and “a temporary selling point.”
29 Rule 7(3) then provides that that in working out the number of commercial establishments in a small shopping centre:
(a) 2 or more commercial establishments occupied by, or likely to be occupied by, one business are counted as one commercial establishment; and
(b) the maximum number of shopfronts for accountants, analysts, architects, engineers, lawyers, planners, stockbrokers or surveyors that can be counted towards the total number of commercial establishments in a shopping centre is:
(i) for a small shopping centre – one; or
(ii) …
30 With respect to the provision in column 3 that the proposed premises must be at least 500 m, in a straight line, from the nearest approved premises, r 8(1) defines how the distance between two premises is to be measured. It is to be measured in a straight line, from the centre at ground level, of the public entrance of the first premises to the centre at ground level, of the public entrance of the second premises.
31 Rule 8(3) requires that “[i]f either premises has more than one public entrance, a reference to the distance between the 2 premises is a reference to the shortest such measurement that can be made in relation to the 2 premises.”
32 Moreover, in addition to the three requirements in column 3 that are specific to an application for a new pharmacy in a facility (small shopping centre), r 10(b)(iii) required the Authority to be satisfied that all of the provisions of Schedule 2 General Requirements had been met.
33 Schedule 2 required the Authority to be satisfied that:
(a) the applicant had, on the day the application was made, and has, on the day the Authority makes a recommendation in relation to the application, a legal right to occupy the proposed premises on or after the day the application was made; and
(b) the proposed premises, on the day the application was made and on the day the Authority makes a recommendation in relation to the application:
(i) could be used for the operation of a pharmacy under applicable local government and State or Territory laws relating to land development; and
(ii) would be accessible by members of the public at large; and
(c) within 6 months after the day on which the Authority makes a recommendation in relation to the application, the applicant will be able to begin operating a pharmacy at the proposed premises; and
(d) the proposed premises are not directly accessible by the public from within a supermarket.
34 It is an agreed fact that the “General Requirements” set out in Schedule 2 were met in the case of the premises proposed for the supply of pharmaceutical benefits by Slopen Main.
The applicant’s undisclosed intention
35 In Hope No.1 the Applicants submitted that the Court should have regard to an unsigned deed of lease between Slopen Main and the owner of the Cove Hill Shopping Centre that had been discovered in the course of that hearing as a factor that should incline the Court to continue the injunction it had originally granted ex parte.
36 Mr Walker submitted that the contents of the draft lease clearly showed that the Third Respondent intended, if approved for the supply of pharmaceutical benefits from T19, subsequently to relocate its pharmacy to tenancy T4 within the main building of Cove Hill Shopping Centre.
37 Counsel for Slopen Main, Ms Sorbello, did not dispute that it would be open to the Court to infer that it was Slopen Main’s intention, if approved to supply pharmaceutical products from T19, subsequently to apply to relocate to T4 for the same purpose.
38 It is uncontentious that T4 is not at least 500 m in a straight line from the nearest approved premises. Therefore it is not in dispute that the Authority would have been required to recommend that Slopen Main not be approved to supply pharmaceutical benefits from T4 had that been its application.
39 Nor is it in dispute that, assuming Slopen Main were to be granted approval for the supply of pharmaceutical benefits from T19 and then applied to relocate, under different provisions of the Rules (Sch 1 Part 1 Item 122), the Authority would be required to recommend any application it submitted to relocate “within a facility” (that is within the small shopping centre to T4), be approved.
40 Mr Walker submitted that because the Authority would have had to reject an application from Slopen Main for the supply of pharmaceutical benefits from T4 had that been its application, if it was established by evidence that the Applicant’s underlying true intention was to supply pharmaceutical benefits from premises at T4 rather from T19 its application must also be rejected. In those circumstances, to approve T19 as a premise for the supply of pharmaceutical benefits would allow Slopen Main indirectly to achieve an outcome that is directly prohibited by the Rules. Mr Walker submitted that the approval Slopen Main had sought was merely a step in a contrivance to get around a prohibition rather than a bona fide application. The contents of the draft lease were evidence of that being the case.
41 For the purposes of deciding the interlocutory matter I declined to treat Slopen Main’s ultimate intention as a relevant consideration. I accepted the Third Respondent’s submission that the issues raised by Mr Walker appeared to address Slopen Main’s future intentions rather than the relevant statutory tests. I doubted that the Court could restrain the Authority from dealing on its merits with a facially lawful application simply because there was evidence to establish that if that application complied with the Rules and was approved, the applicant intended to make a subsequent application under different provisions of the Rules to obtain the further benefit of a relocation which would be then permitted.
42 In expressing those reservations I had in mind the conclusion reached by Jessup J in Yu v Minister for Health [2013] FCA 261; (2013) 216 FCR 168 (Yu).
43 In Yu, despite the Applicant’s own counsel having conceded that what his client had done might be regarded as “sharp practice”, his Honour concluded at [51] that the notion of bad faith had no application to circumstances in which a pharmacist had requested a cancellation under s 98 of the Act notwithstanding his unrevealed intention of withdrawing his request at a later, more convenient, date.
44 However I added:
My rejection of the Applicants’ argument in these interlocutory proceedings does not, of course, foreclose this issue being reconsidered after full argument in the substantive proceedings.
The Pleadings
45 The Applicants (pursuant to leave) subsequently filed a Further Amended Statement of Claim in which they asserted, inter-alia, the following:
17. Further, or in the alternative, at all material times the third respondent:
(a) intended to not supply pharmaceutical benefits at the premises for anything other than a short time;
(b) intended to supply pharmaceutical benefits from different premises, which are not the premises, being tenancy T4 within the Cove Hill Shopping Centre, which is significantly less than 500m from the nearest approved premises;
(c) only had planning approval to operate a pharmacy at the premises on a temporary basis for a short period; and
(d) intended to transfer any approval granted for tenancy T19 to tenancy T4, thereby avoiding the distance restriction contained in Item 133 of the Rules.
18. In the circumstances described in paragraph 17, the application considered by the first respondent was not a bona fide application to supply pharmaceutical benefits from the premises.
19. Further, or in the alternative, in the circumstances described in paragraph 17, the second respondent could not be satisfied, for the purposes of s 90(3D) and (4) that the third respondent will be able to supply pharmaceutical benefits at the premises.
46 On 23 January Slopen Main filed a defence to the Further Amended Statement of Claim. As relevant it has pleaded:
7. As to the allegations in paragraph 17 of the amended statement of claim, the third respondent:
(a.) denies the allegations therein;
(b.) says that the allegations are irrelevant to the grounds of review raised in this proceeding.
8. The third respondent denies the allegation in paragraph 18 in the amended statement of claim.
9. The third respondent denies the allegations in paragraph 19 of the amended statement of claim.
47 While the pleadings do not expressly assert fraud within the meaning of that concept in public law, the conduct of the parties, the hearing and the submissions all proceeded on the premise that that issue was in contest and findings on that account were open to be made by the Court.
What conduct, if any, by or on behalf of an applicant will vitiate an administrative decision?
48 In SZFDE the High Court (Gleeson CJ, Gummow, Kirby, Hayne, Callinan, Haydon and Crennan JJ) at [11]-[22] analysed in some depth what is comprehended by, and the legal consequences of, “fraud” in Australian public law.
49 The Court commenced its discussion of this subject at [15] citing a passage from Denning LJ reasons in Lazarus Estates Ltd v Beasley [1956] 1 QB 702 at 712-713. That passage contains his Lordship’s much repeated observation; “Fraud unravels everything.” Their Honours then observed at [16]:
The vitiating effect of fraud is not universal throughout the law. The equitable doctrine protecting bona fide purchases for value and without notice is an important exception. Further, particular principles, or at least practices, have been developed with respect to collateral attacks in later litigation upon the outcome in earlier litigation where this was alleged to have been vitiated by fraud. It has been said in this Court that, except in very exceptional cases, fraud constituted by perjury by a witness or witnesses acting in concert is not a sufficient ground for setting aside a judgment. The precept engaged here has been identified as that favouring the finality of litigation (footnotes omitted).
50 However, at [17], and by way of contrast with adjudication of civil actions and suits their Honours observed:
A rather different trend has appeared in public law, particularly respecting the administration by superior courts of certiorari to supervise the exercise of jurisdiction by inferior courts and tribunals. In Craig v South Australia, Brennan, Deane, Toohey, Gaudron and McHugh JJ said of the scope of certiorari:
Where available, certiorari is a process by which a superior court, in the exercise of original jurisdiction, supervises the acts of an inferior court or other tribunal. It is not an appellate procedure enabling either a general review of the order or decision of the inferior court or tribunal or a substitution of the order or decision which the superior court thinks should have been made. Where the writ runs, it merely enables the quashing of the impugned order or decision upon one or more of a number of distinct established grounds, most importantly, jurisdictional error, failure to observe some applicable requirement of procedural fairness, fraud and 'error of law on the face of the record'. Where the writ is sought on the ground of jurisdictional error, breach of procedural fairness or fraud, the superior court entertaining an application for certiorari can, subject to applicable procedural and evidentiary rules, take account of any relevant material placed before it (footnotes omitted in original).
Their Honours noted that in this context "fraud" was used in a broad sense which encompasses "bad faith" (footnotes omitted).
51 At [21] the High Court in SZFDE cited with approval what Lord Goddard CJ had said in R v Fulham, Hammersmith and Kensington Rent Tribunal; Ex parte Gormly [1951] 2 All ER 1030 at 1034:
If some collusive proceedings were taken, it would amount to a fraud on the tribunal, and where a fraud was proved I have little doubt that this court could intervene if necessary by an order of certiorari to get rid of a decision which the tribunal had been misled into making.
52 Their Honours added:
In Australia, the constitutional considerations referred to earlier in these reasons place due administration of federal law within the field in which the superintendence of Ch III operates.
53 At [22] the Court stated:
There is another practical aspect of fraud in public law that may tend in a particular case to set it apart from fraud in relation to civil suits in general. It is that often a victim of it will have no useful remedy except to have the fraudulently affected result set aside and a fresh untainted hearing conducted. Ainsworth v Criminal Justice Commission is an example of the inadequacy of a conventional remedy such as damages. There they would, even if a cause of action arguably giving rise to them had been available, not only have been probably unquantifiable, but also not a useful remedy. The same may apply to some proceedings before administrative tribunals, for example, an application under the Freedom of Information Act 1982 (Cth). In the present case, the only remedy that would be of real utility to the appellants is an order that provides them with the opportunity to press their claims to a protection visa in a fair hearing conducted according to law (citation omitted).
54 Their Honours held at [29]:
…the present appeal should be resolved after close attention to the nature, scope and purpose of the particular system of review by the Tribunal which the Act establishes and the place in that system of registered migration agents. Any application of a principle that "fraud unravels everything", requires consideration first of that which is to be "unravelled", and secondly of what amounts to "fraud" in the particular context. It then is necessary to identify the available curial remedy to effect the "unravelling".
The present context
55 Subject to what amounts to “fraud” in this context, no submission was advanced that would throw doubt on the immediately evident proposition that what may be required to be “unravelled” would be the decision of the Authority to recommend to the Secretary that the Secretary approve Slopen Main’s application to supply pharmaceutical benefits at Tenancy T19, Cove Hill Shopping Centre, 11 Cove Hill Rd, Bridgewater, TAS 7030. It is therefore to the second of those questions; that is what amounts to ‘fraud’ in this specific public law context that I now turn.
56 It is convenient to commence that analysis by recalling the observations of Mortimer J in Walkerden (cited above) that the Rules, as determined by the Minister pursuant to s 99L of the Act, were drafted following consultation with the Pharmacy Guild of Australia. Her Honour held at [62] that they had as their objective:
Twin themes: a sustainable and viable community pharmacy network (which focuses at least as much on the interests of pharmacy owners as on the community) and access to pharmaceutical benefits (with a focus only on the community’s interests).
57 I respectfully adopt her Honour’s observations in that regard. Given the discussion by Mortimer J at [63] I am satisfied this Court is entitled to take into account that historic background as to extrinsic evidence relevant to assist it to identify the objectives of the Rules.
58 However, lest that statement be misunderstood, the Court should express its opinion that it is strictly unnecessary to resort to extrinsic materials to reach a conclusion that the Rules have the twin themes her Honour identified—so much arises by necessary implication from the terms of the Rules themselves.
59 What is at issue when an application is made under the Rules is not the right to operate a pharmacy—the regulation of that right remains governed by State and Territory law. Rather what is involved is the commercially valuable right to supply certain pharmaceuticals at a price subsidised by the Commonwealth.
60 As Jessup J recognised in Yu v Minister for Health (No 2) [2013] FCA 367 (Yu No 2):
…approvals under s 90 or 90A are not given as benefits or emoluments to particular pharmacists. Rather the scheme of the NH Act, relevantly, is to ensure that the community is provided with convenient access to pharmacies, conducted by appropriately qualified professionals, for the purpose of obtaining drugs and medicinal preparations which are beneficial in the treatment of sickness or disease, but which may, at the same time, be harmful if not properly prescribed and dispensed.
61 The Rules apply in circumstances in which the commercial interests of those already approved to supply pharmaceutical benefits from “existing premises” potentially may conflict with the interests of an additional provider who seeks approval for a new pharmacy.
62 The Rules provide in detail what is required for the Authority to make a recommendation to approve an application to the Secretary. Some criteria are expressed by the Rules in objective terms (relied on by the Applicants as indicia that those are jurisdictional facts); other in terms of the Authority’s being satisfied of their existence. For the present the potential significance of that distinction may be put to one side. It is only if all of the criteria prescribed by the Rules for an application of a particular kind have been met that the Authority must recommend an application be approved. If any criterion has not been met the Authority must recommend the application not be approved.
63 The Rules thus provide a strict legal framework to govern and limit when the commercial sustainability of existing providers must yield to the public interests referred to by Jessup J. The rigour of the protection provided by the Rules for existing providers is reinforced by the terms of the Act. Although expressed as a ‘recommendation’, it is only a recommendation made by the Authority to approve an application that may be rejected by the Secretary. The Secretary has no power to grant an application when he or she has received a recommendation from the Authority that the application not be approved: s 90(3B). Only the Minister acting personally can approve an application that does not comply with the Rules—and then only in limited instances. The Minister must be satisfied that the decision to refuse the application will result in a community being left without reasonable access to pharmaceutical benefits supplied by an approved pharmacist, and that it is in the public interest to approve the pharmacist: s 90A(2).
64 Given the significance of the Rules in providing not only for the public interest in the availability of pharmaceutical benefits to the public but also for a limited and bounded protection of the commercial interests of existing providers, there must be some point at which the entitlement of an applicant to pursue his or her own interests will pass beyond what was in Yu accepted to be permissible sharp practice.
65 In my opinion that point is reached and the dividing line is crossed if an applicant knowingly provides information in support of their application that is materially false or misleading with respect to any of the criteria mandated by the Rules relevantly required to exist if the Authority is to recommend approval—and the Authority is disabled because of its reliance thereon from fulfilling its function.
66 It is implicit in the Rules that an applicant must provide factually accurate information to the Secretary and the Authority.
67 Rule 9 obliges an applicant to provide the information necessary to substantiate its application at the time it is submitted. An application submitted to the Secretary is automatically referred to the Authority for its consideration. Unless the Authority asks for further information that is the only information from the applicant the Authority is entitled to take into account.
68 The Authority itself has only a limited capacity to test the accuracy of the information an applicant provides. While the Authority has “power to do all things necessary or convenient to be done for, or in connection with, the performance of its functions” pursuant to s 99M of the Act, a general power of that type does not confer authority to make compulsive orders. It has no power to subpoena documents or to summons witnesses.
69 The Authority necessarily must rely primarily upon the integrity of information provided to it by an applicant. Yet large matters of public and private interest turn on its conclusions. Having regard to the guidance given by the High Court in SZFDE, I am satisfied that, in this specific public law context, the provision of false and materially misleading information by an applicant to the Authority relevant to a mandatory criterion in the Rules, where that information might affect its findings, can amount to “fraud” within the understanding of that term in public law on each of the Secretary and the Authority.
70 In this instance (and, I am prepared to assume, by routine practice) the Authority wrote to each of the Applicants as existing providers whose interests might be affected. They were advised that an application “for approval to supply pharmaceutical benefits at T19 Cove Hill Shopping Centre, 11 Cove Hill Rd, Bridgewater, TAS 7030” had been received from the Secretary by the Authority. They were advised that if they considered “that the application may not satisfy one or more of the requirements of Rule 133 (sic)” they could provide evidence and make comments or submissions to the Authority. However, that was the extent of the notification they received (correspondence from the Authority to the Applicants dated 27 July). They were not provided with the details of Slopen Main’s application.
71 A practice by the Authority of inviting comment and submissions in that circumstance cannot be accepted as having cut down the duty of an applicant to not materially mislead the Secretary and the Authority with respect to the relevant criteria which must be satisfied. An existing provider responding to such an invitation, in the absence of knowledge of the detail of the application often will have no means to identify whether or not a material misrepresentation has been made by an applicant.
72 The potential shortcomings of that procedure were evident in this proceeding—see Hope No.1 at [75]-[81]. The Applicants put forward their submissions to the Authority on the premise that the “Cove Hill Shopping Centre, 11 Cove Hill Rd, Bridgewater, TAS 7030” referred to in the Authority’s letter to them was the Cove Hill Shopping Centre as bounded by Hurst Rd. There had been nothing in the Authority’s correspondence to them to alert them that a strip of shops on the other side of Hurst Rd had been put forward as a constituent part of the “group of shops and associated facilities” Slopen Main contended was the “small shopping centre” “in” which T19, if approved, would be located.
73 Thus a fundamental question of the characterisation in fact and law of what was the relevant “small shopping centre” from the outset, was differently apprehended by those having access to that relevant information (the applicant and the Authority) and the existing providers. The latter remained unaware of the basis upon which Slopen Main’s application had been advanced until after these proceedings were commenced.
74 There is no inconsistency between the reasoning of Jessup J in Yu and the reasoning necessary for a conclusion that the provision of false or materially misleading information by an applicant, if found to have been relied upon by the Authority, may be held to have disabled the Authority from fulfilling its statutory duty.
75 Mr Yu was a pharmacist who applied to the Secretary to relocate his premises from 20 Sydney St in Kilmore to 92 Sydney St in the same suburb. He did so with an undisclosed intention of taking advantage of what he hoped would be delays in that process. In the event his hopes were realised. After the Authority had recommend approval of his application there was a period, during which, because Mr Yu’s new premises had been approved but his existing approval to supply pharmaceutical benefits from 20 Sydney St had not been cancelled by the Secretary, there were notionally two approved premises in Kilmore both in Mr Yu’s name. Having persuaded the Authority on that premise that it must reject an application by a rival pharmacist to supply pharmaceutical benefits from a third premises in Kilmore and before the Secretary finally cancelled his approval for 20 Sydney St, Mr Yu withdrew his relocation application and at the same time applied for approval for a pharmacy at 92 Sydney St, Kilmore, in addition to, rather than by way of relocation of his existing pharmacy business.
76 His aim in taking those steps was, as Jessup J held, to achieve a second pharmacy approval for himself in Kilmore, and the exclusion to the extent possible, of other pharmacists from securing that approval.
77 It is unnecessary to set out in any detail how that stratagem disadvantaged his potential rivals—it is sufficient to indicate that Jessup J rejected a contention that Mr Yu’s application to relocate could be set aside on judicial review on the basis that he had made it in “bad faith”.
78 Critically, Jessup J held that “strictly” it could not be said that Mr Yu had provided misleading information or made a false statement in connection with his application [at 50].
79 As I understand His Honour’s reasoning, it is implicit that had Mr Yu made a false statement in his application to the Secretary, a quite different conclusion would have been required. But not having done so, Mr Yu was otherwise entitled to pursue his own best interests.
80 Jessup J rejected at [51] the submission that what Mr Yu had undertaken merited the description of a sham. Mr Yu’s application to the Secretary to relocate was a valid act under the Rules. Mr Yu had been at risk that the Secretary would not only have accepted the Authority’s recommendation that his application be approved but also immediately cancelled his existing approval to supply pharmaceutical benefits at 20 Sydney St. Had that occurred Mr Yu’s stratagem would have come to nothing.
81 It was the Secretary’s unexplained delay in cancelling Mr Yu’s approval to supply pharmaceutical benefits at premises at 20 Sydney St not Mr Yu’s misleading of the Authority that had been responsible for Mr Yu’s “sharp practice” being capable of implementation.
The relevant evidence in these proceedings
82 The documentation supporting the Third Respondent’s application to supply pharmaceutical benefits from T19 stated that the applicant was “Slopen Main Pty Ltd as Trustee for the Slopen Main Discretionary Trust”. Mr Darnell was named in that application as the person authorised to act on behalf of Slopen Main. His contact details were provided for that purpose. A solicitor, Mr Hannan of Bennett & Philp Lawyers was also named as authorised to act on behalf of the applicant.
83 In his covering letter for that application dated 21 July 2016 Mr Hannan wrote that he had “been instructed by the Applicants (sic)” to make an application for the establishment of a new pharmacy in a facility, being a small shopping centre at premises situated at Tenancy T19, Cove Hill Shopping Centre, 11 Cove Hill Rd, Bridgewater, Tasmania 7030. He enclosed with his letter a copy of ASIC’s Current Organisation Extract dated 25 April 2016 “confirming that Ross David Darnell is the Sole Director and shareholder of the Applicant”.
84 As its sole director and shareholder I am satisfied that for all purposes Mr Darnell was and is the controlling mind of Slopen Main.
85 I am further satisfied that the evidence given by Mr Darnell in these proceedings requires the Court to record a finding that all of the matters pleaded by the Applicants in paragraph 17 of their Further Amended Statement of Claim were made out.
86 In cross-examination Mr Darnell assented to the following propositions:
(a) that Slopen Main intended to not supply pharmaceutical benefits at the premises which is T19 for anything other than a short time (P 119 lines 40-47);
(b) that Slopen Main intended to supply pharmaceutical benefits from different premises which are not the premises [T19], being T4 within the Cove Hill Shopping Centre, which is significantly less than 500 metres from the nearest approved premises (P 120 lines 30-44);
(c) that Slopen Main only had planning approval to operate a pharmacy at T19 on a temporary basis for a short period (P 121 lines 1-4); and
(d) that Slopen Main intended to transfer any approval granted for tenancy T19 to tenancy T4 (P 121 lines 6-10).
87 Although Mr Darnell cavilled at assenting to the additional proposition pleaded in paragraph 17(d) of the Applicants’ Further Amended Statement of Claim that Slopen Main intended “thereby to avoid the distance restriction contained in item 133 of the Rules”, I am satisfied that such a finding also should be made.
88 It was Mr Darnell who had explained to Ms Bowkett (representing Kalis Properties) that, notwithstanding she had originally expressed a view that there were only ten tenancies in the Cove Hill Shopping Centre, that the “tenancies she had ownership of that were across the road” [Hurst St] might be considered by the Authority as all being under one shopping centre (P 125 lines 13-22). It was Mr Darnell who asked Ms Bowkett “to modify the two tenancy plans [previously showing the Hurst St shops as separate to the Cove Hill Shopping Centre] to show them together on one so that it could more easily be shown to the [Authority]”(P 126 lines 38-40)
89 Mr Darnell gave evidence that he had been the “only one smart enough to have picked that up and moved it forward” (P 125 lines 5-6).
90 Mr Darnell had arranged for Slopen Main to lease ground in the carpark of Cove Hill Shopping Centre as T19 (P 131 lines 39-40). The planning permit he had obtained for T19 had been for a temporary use. It had been initially granted only until 1 September 2016, but had been extended to 1 January 2017, then 1 April 2017 and then until 1 July 2017. It was a condition of Slopen Main’s planning approval that when its permit expired the temporary use must cease immediately. Within three months Slopen Main would then be required to remove all buildings and structures and make the site good (P 122 lines 6-24).
91 The demountable building on the site [proposed by Slopen Main as its premises for the supply of pharmaceutical benefits] was merely rented by Slopen Main on a month to month basis from a third party company (P 131 lines 28-34).
92 Mr Darnell conceded that he had intended Slopen Main to only operate from T19, if approval was granted, for the shortest period of time (P 116 lines 27-29).
93 By contrast, he had entered into a long term agreement to lease T4 for a period of ten years “subject to the approval of the ACPA [the Authority] for the relocation of Cove Hill car park pharmacy T11 to T4”. (I interpolate that the Court is satisfied that “T11” is referred to in error – it is the tenancy later renamed T19).
94 There was evidence that Slopen Main had made an agreement to lease T4 for ten years with options to renew. Slopen Main’s agreement to lease T4 was executed on 27 September 2016, subject to that condition (Evidence of Ms Bowkett P 111 lines 28-38).
95 Mr Darnell had obtained approval from the Pharmacy Board of Tasmania (the Board) on Slopen Main’s behalf to operate a pharmacy not only at T19 but also at T4.
96 Slopen Main held both approvals concurrently. Unsurprisingly, the Board had initially misunderstood Mr Darnell’s intentions. When he had applied for approval to open a pharmacy at T4 the Board had refunded Slopen Main’s application fee for T19 assuming it no longer required that approval. Mr Darnell had had to correct that misunderstanding. He had advised the Board (P 130 lines 25-35) as follows:
The plan is to open T19 Cove Hill Shopping Centre next week. Once I have the pharmacy open, I then apply to ACPA to relocate it to T4, which you have recently approved.
97 In the light of all of those circumstances, I give no weight to Mr Darnell’s evidence that if a subsequent relocation application was not approved by the Secretary Slopen Main would continue to operate from T19 because Cove Hill was a very good shopping centre and he could make a profit out of it (P 121 lines 36-37). On the evidence before me there were no means available to Mr Darnell to achieve that objective. Slopen Main only had a temporary use permit for T19. When that permit expired he was required to remove the demountable buildings from which Slopen Main would be supplying pharmaceutical benefits and make the site good. Nor is it plausible that continuing to operate a pharmacy from T19 was Mr Darnell’s intention.
98 The complexity of what Mr Darnell undertook by way of preparation and planning as set out above makes sense as a commercial reality only if it is to be inferred that Mr Darnell’s true intention, as the controlling mind of Slopen Main, was to transfer any approval granted for tenancy T19 to tenancy T4, thereby avoiding the restriction contained in Item 133 of the Rules. I draw that inference.
99 Mr Darnell conceded that his application to the Secretary for approval for the supply of pharmaceutical benefits at T19 had made no reference at all to Slopen Main’s intention to subsequently relocate after the shortest possible period of time, if its application was approved, to T4. Notwithstanding he had already commenced the process of preparing Slopen Main’s application for relocation from T19 to T4 (P 116 line 34).
100 Despite his knowing that the Secretary had discretion in relation to whether or not to approve premises (P 122 lines 40-41), Mr Darnell’s evidence was that no information about any future intentions should be included in an application, there was no need to include it, and that the Authority did not deal with such matters (P 122 lines 25-38). That was despite him being well aware that Slopen Main could not have met the distance requirements of the Rules if it had directly applied for approval to supply pharmaceutical benefits at T4.
101 Let it be assumed (without deciding) that all of what Mr Darnell undertook as referred to above in order to take advantage of the Rules in those circumstances falls within what Jessup J in Yu would have accepted as permissible sharp practice by a pharmacist seeking to advance his own interests—the matters that the Court now turns to transgressed beyond that point.
102 There is nothing before the Court to identify what prompted it to do so, but on 2 September 2016 [a specific date does not appear on the letter but is referred to in Mr Hannan’s reply] the Authority wrote to Mr Hannan (as the solicitor acting for Slopen Main and as authorised to act on its behalf). The Authority’s letter advised Mr Hannan that the Authority was required to be satisfied “that the shopping centre contains at least 15 other commercial establishments in addition to a supermarket”. The letter continued:
The Authority considered the Statutory Declaration made on 21 April 2016 by Jillian Ann Bowkett, Property Manager of the Shopping Centre known as Cove Hill Shopping Centre, and the accompanying tenancy listing as at April 2016. The Authority agreed that it required an updated tenancy list and floor plan of the centre to allow it to determine the leasing and trading status of each tenancy and therefore the number of commercial establishments in the Centre.
The Authority requested that you provide:
• an updated tenancy listing be provided showing the leasing, type and trading status of each tenancy at the Cove Hill Shopping Centre; and
• a site plan of the Cove Hill Shopping Centre to clearly identify the location of each of the tenancies.
103 Mr Hannan then had correspondence with Ms Bowkett by e-mail.
104 He asked Ms Bowkett to “advise the name of the tenant in shop 4, as this has not been included in the tenancy list”. She replied to him “Shop 4 is where the chemist hopes to relocate” (Evidence of Ms Bowkett P 112 lines 16-23).
105 Mr Hannan asked Ms Bowkett if T4 was vacant. She replied that it currently was vacant but that Kalis Properties had a signed heads of agreement with Slopen Main and the lease was with him or Mr Darnell for signing and return (Evidence of Ms Bowkett P 112 lines 27-33).
106 Mr Hannan then sent Ms Bowkett a statutory declaration for her signature (P 112 lines 34-35). Ms Bowkett made that statutory declaration on 9 September (P 113 lines 3-4). Included in her statutory declaration was a tenancy listing (Annexure B) (Evidence of Ms Bowkett P 113 line 40).
107 None of Ms Bowkett’s evidence as referred to above was the subject of re-examination. For the purposes of these proceedings I accept what Mr Bowkett asserted.
108 The tenancy list that formed part of Ms Bowkett’s statutory declaration describes T4 as “open and operating” (P 113 lines 5-6). It describes the tenant usage of T4 as “retail goods” (P 113 line 9). It did not identify who the tenant was (P 113 line 12).
109 Ms Bowkett conceded in cross-examination that, contrary to what she had represented in her statutory declaration, T4 had not been open and operating. It was vacant. It was the subject of a signed heads of agreement for it to be leased to Slopen Main. The lease had been with Mr Darnell for his signature (P 113 line 19).
110 On 9 September 2016 Mr Hannan wrote to the Authority enclosing:
Copy of Statutory Declaration dated 9 September 2016 from Jillian Bowkett, Centre Manager, of the Cove Hill Shopping Centre with a Tenancy List as at the date of the Statutory Declaration attached thereto.
111 Under cover of his letter Mr Hannan also sent the Authority copies of the site plan of the shopping centre and “copies of enlargements of each of the building (sic) making up the shopping centre…detailing the location of each of the tenancies in the relevant building.”
112 He wrote:
We submit that based on the above information and the information previously provided to the Authority in the original application that the shopping centre has at all times and still complies with the requirements under Item 133(1) for a small shopping centre and accordingly the proposed premises are located within ‘a facility’ as defined in the Location Rules….as it is clear that the shopping (sic) has at all times and continues to comply with the requirements under Rule 133 (sic) we seek the Authority’s assistance in requesting that this application be reconsidered prior to the next schedule (sic) meeting by way of an out of session meeting to allow the matter to be determined expeditiously.
113 Mr Hannan did not give evidence in these proceedings. He did not have the opportunity to controvert Ms Bowkett’s evidence or to address the inferences that appear to be open having regard to it. In the light of that, it would be inappropriate for this Court to make adverse findings having any consequence beyond these proceedings. However, the Court must determine the issues before it. On the evidence before it, Mr Hannan’s conduct in forwarding Ms Bowkett’s statutory declaration to the Authority under cover of the letter he wrote appears explicable only on one of three possible bases;
(a) the false and misleading information contained in Ms Bowkett’s statutory declaration he sent to the Authority was the product of his own drafting;
(b) he became aware that the statutory declaration he had drafted and sent to Ms Bowkett had been modified such that its revised content was false and misleading but he sent it to the Authority nonetheless; or,
(c) despite being aware of facts that would have required him to conclude that the content of Ms Bowkett’s statutory declaration had been altered such that it was relevantly false and misleading he had sent it to the Authority and had requested the Authority to rely upon it without reading it and giving attention to the changes Ms Bowkett had made.
114 The evidence in these proceedings that Mr Hannan had sent the statutory declaration to Ms Bowkett entitles the Court, on the balance of probability, to find that the first of those possible explanations is the fact. There is nothing implausible about Ms Bowkett having signed a statutory declaration drafted by Mr Hannan, the lawyer acting for Slopen Main, after their discussion by e-mail. Ms Bowkett had previously accepted Slopen Main’s advice that she was legally entitled to include the shops on the other side of Hurst Rd within her description of the Cove Hill Shopping Centre despite her initial view to the contrary (see at [88] above).
115 One particular aspect of Mr Darnell’s evidence (P 132 lines 37-45) reinforces the Court’s confidence in drawing that conclusion.
116 Mr Darnell gave evidence that the trading name of T4 was left blank to convey to the Authority that that retail premise was not intended to be counted. The inference that the Court draws, given that evidence, is that the terms of Ms Bowkett’s statutory declaration had been the subject of discussion and design on Slopen Main’s behalf prior to it being signed by Ms Bowkett and submitted to the Authority by Mr Hannan.
117 However, even if the relevant terms of Ms Bowkett’s statutory declaration were not of that design as the Court on the balance of probabilities is satisfied that they were, Mr Hannan’s sending of Ms Bowkett’s statutory declaration on behalf of Slopen Main as its response to the Authority’s enquiries was, in any event, an act undertaken on behalf of Slopen Main that was reckless as to the truth of its representations.
118 Mr Hannan was Slopen Main’s solicitor. In Slopen Main’s application to the Secretary for approval to supply pharmaceutical benefits at T19, Mr Hannan was named as a person authorised to act its behalf. There can be no question that Mr Hannan’s representations are to be attributed to Slopen Main.
119 The materiality of the misleading information conveyed under cover of Mr Hannan’s letter in Ms Bowkett’s statutory declaration to the decision making processes undertaken by the Authority becomes obvious when attention is directed to the reason for the Authority’s request for further information. The Authority had informed Mr Hannan that it required updated information because it needed to satisfy itself “that the shopping centre contains at least 15 other commercial establishments in addition to a supermarket.”
120 Paragraph 14 of Ms Bowkett’s statutory declaration had summarised the position she asserted to exist as follows:
The Centre is now comprised of a total of 19 shops which include:
(a) 1 x Coles Supermarket
(b) 15 x retail/service establishments (including the proposed pharmacy)
(c) 2 x vacant shops
(d) 1 x Office for Member of Parliament
121 The logical reading of that paragraph is that it contains the assertion that the Cove Hill Shopping Centre included 15 retail establishments as can be inferred would meet the description of a “commercial establishment” for the purpose of the Rules. However it did so only if the proposed pharmacy was included within that number.
122 Had Annexure B of Ms Bowkett’s statutory declaration provided an accurate statement of the leasing, type and trading status of each tenancy at the Cove Hill Shopping Centre as requested by the Authority, it would have revealed that T4 was not leased and open and operating to supply retail goods, but was subject to a signed heads of agreement for a lease to Slopen Main for a pharmacy.
123 Had Ms Bowkett’s statutory declaration not been misleading, that information must have alerted the Authority to that hitherto undisclosed circumstance. In turn that may well have, and certainly should have, led the Authority to make further enquiries of Slopen Main. Had those enquiries truthfully been responded to, the Authority would have learnt that Slopen Main not only held a ground lease for T19, but also had concurrently entered into a signed heads of agreement for a ten year lease with options for renewal for premises at T4, on condition that it be permitted to relocate from T19 to T4.
124 In those circumstances the Authority would have had to consider whether T19 should count as one of the required 15 commercial establishments in the centre, having regard to Rule 7(2) that excludes a “temporary selling point” from within that number.
125 What the Authority might have decided had it not been misled by the materially false and misleading information provided to it on behalf of Slopen Main as to the leasing, type and trading status of the tenancies in Cove Hill Shopping Centre in those circumstances is unknown.
126 In Walkerden, Mortimer J considered the meaning of the expression “temporary selling point” for the purposes of the Rules. As Mr Chesterman submitted (Supplementary Submissions on behalf of the Third Respondent at [8]-[12]), her Honour acknowledged that there were inherent difficulties with the application of that expression.
127 However, one premise of Mr Chesterman’s submissions that T19 could not be regarded as a “temporary selling point” was that if Slopen Main had obtained approval to supply pharmaceutical benefits from that premises and a subsequent application for it to relocate to T4 was not approved, Slopen Main would continue to operate a pharmacy from T19. The Court has previously given its reasons for discounting Mr Darnell’s evidence in that respect.
128 Notwithstanding that judges are frequently warned of the dangers of substituting judicial exposition for the plain words of the text, Mortimer J’s observations at [78] might be thought to support the conclusion that in the true facts of this case, T19 may have been excluded by reason of Rule 7(2) from being counted as one of the 15 commercial establishments, in addition to a supermarket, required to satisfy Item 133. It is thus far from inconceivable that, had the Authority been aware of the true facts, it might have concluded that T19 was a “temporary selling point”.
129 It is not necessary for the Court to be satisfied the Authority would have so decided—it is sufficient that the question would have been one of substance which would have been required to be addressed by the Authority. I am satisfied that it well meets that threshold.
130 There are other curiosities regarding the information supplied to the Authority under cover of Mr Hannan’s 9 September letter. While the text of Ms Bowkett’s statutory declaration refers to the Cove Hill Shopping Centre as including 15 retail establishments (including the proposed pharmacy), Annexure B lists 16 such premises, if both T19 and T4 are to be included. That circumstance may suggest that the drafter (whoever in the result that may have been) took into account Rule 7(3) but was unwilling to disclose to the Authority the reason for its relevance. Rule 7(3) requires two or more commercial establishments occupied by a single business to be counted as only one commercial establishment for the purposes of Item 133.
131 It might be suggested that because Ms Bowkett asserted in the text of her statutory declaration that the Cove Hill Shopping Centre contained 15 retail premises, no harm could have been occasioned by that oddity. Indeed that appears to have been the crux of Mr Darnell’s evidence to the Court (P 132 lines 37-45). Leaving the trading name of T4 blank was done, he gave evidence, to convey to the Authority that that retail premise was not intended to be counted.
132 However, there are difficulties with that proposition.
133 Absent disclosure of the material circumstances laying behind the omission of the trading name for T4, on one view the Authority would have been entitled to conclude that Ms Bowkett had simply made an error when she had added up the list of tenancies. The Authority could have accepted the details as Ms Bowkett provided in Annexure B on their face value and counted T4 as a 16th commercial establishment “open and operating” and supplying “retail goods”. T4 would therefore be eligible to be counted within the number of commercial establishments in the Cove Hill Shopping Centre—giving the Authority additional (unwarranted) confidence that the required number of commercial establishments for a “small shopping centre” as defined by the Rules existed.
134 Why that possibility is significant is because if a bare 15 commercial establishments were potentially eligible, and the Authority had concluded that any one of those claimed premises could not be included under the Rules, there would have been no possibility that Slopen Main’s application could be approved.
135 And that is why a yet further misleading representation in the information supplied to the Authority under cover of Mr Hannan’s letter is also material.
136 Under the column headed “Trading Name” in Annexure B of Ms Bowkett’s statutory declaration, the trading name for shop 6a is stated as “Gift Shop” and the trading name for shop 7 is stated as “Cove Hill Newsagency”.
137 Having regard to the evidence of Mr Slater (P 91-98), the lessee of both premises, the Court is satisfied that although “Cove Hill Newsagency” is a plausible approximation of the trading name for shop 7 (its registered business name is “Cove Hill Newsagency and Tobacco Station” and its signage is “Cove Hill News”), the trading name of the shop at 6a was not “Gift Shop”. Nor was “Gift Shop” a plausible approximation of that shop’s trading name. It traded under the name “Cove Hill News Gift Shop” (Evidence of Mr Slater P 93 line 23).
138 In this context, Ms Bowkett’s abbreviation of the trading name for the premises at 6a was both false and materially misleading. Had the Authority been alerted to the fact that two closely co-located premises were trading under very similar names (“Cove Hill News” and “Cove Hill News Gift Shop” respectively), the Authority would have been alerted to the possibility that, as the evidence in these proceedings suggests was the fact, both were operated by a single owner using a single banking account and single billing system for both premises (Evidence of Mr Slater P 93-95).
139 In turn that would have focussed the Authority’s mind on Rule 7(3) which requires two or more commercial establishments occupied by one business to be counted only as one. And, assuming that to have been the Authority’s conclusion, there would have been one less than the 15 commercial establishments required for a small shopping centre as defined by the Rules. The Authority would have been required to have recommended that Slopen Main’s application not be approved. However none of that came to light.
140 Given the materially false and misleading information provided on Slopen Main’s behalf under cover of Mr Hannan’s letter of 9 September, there was nothing to alert the Authority to those several considerations.
141 Instead, relying on the veracity of what had been provided to it on Slopen Main’s behalf, the Authority wrote to Mr Hannan on 7 October 2016 as follows:
In considering this application, the Authority found that it had previously deferred making a recommendation on the application at its meeting on 26 August 2016. The Authority noted that at that meeting, it had determined that it could not be satisfied that the proposed premises are in a small shopping centre, Item 133(1) of the National Health (Australian Community Pharmacy Authority Rules) Determination 2011 (PB 65 of 2011) and had therefore requested that you provide:
• an updated tenancy listing be provided (sic) showing the leasing, type, and trading status of each tenancy at the Cove Hill Shopping Centre; and
• a site plan of the Cove Hill Shopping Centre to clearly identify the location of each of the tenancies.
The Authority considered the additional information that was provided in response to this request and determined that it was satisfied that the application met the requirements of Item 133(1) of PB 65 of 2011, that being that the proposed premises is in a small shopping centre.
142 Neither in its 7 October letter, nor in its statement of reasons later provided following a request made pursuant to s 13 of the Administrative Decisions (Judicial Review) Act 1977 (the ADJR Act) did the Authority offer any basis other than the above for that conclusion.
143 Thus the Authority’s statement of reasons do not specify which of the tenancies listed in Ms Bowkett’s statutory declaration it had found to be “commercial establishments.” Nonetheless, the only plausible inference open to the Court given the Authority’s letter of 7 October is that whatever might have been the Authority’s reasoning, its conclusions relied on it having had regard to the materially false and misleading representations contained in Ms Bowkett’s statutory declaration.
144 In his evidence Mr Darnell conceded that the statements that had been conveyed to the Authority on Slopen Main’s behalf under cover of Mr Hannan’s letter of 9 September had included the incorrect statements that T4 was open and operating and that the use of that tenancy was supplying “retail goods” (P 136 lines 28-46). Despite those concessions, Mr Darnell disputed that what had been put forward on Slopen Main’s behalf had misleadingly conveyed the impression that the premises at T4 had been leased, were open and operating and were supplying retail goods. His evidence was that that was “just as an error (sic)” (P 137 lines 31-34).
145 The Court has rejected that explanation (see above at [110] – [117]). The Court is satisfied that those statements and the statement that the trading name of the Cove Hill News Gift Shop was a “Gift Shop” were all materially false and misleading having regard to the context of their having been made in response to a request from the Authority for information about the leasing, type, and trading status of each tenancy at the Cove Hill Shopping Centre.
146 It is not credible that Slopen Main could have been unaware of the significance of the Authority’s request. The Authority had advised Slopen Main that it had deferred making its decision to enable further information to be sought. Ms Bowkett’s statutory declaration was provided to the Authority by Slopen Main in response to that request. It was provided under cover of a letter from Mr Hannan that asserted that the information contained in it satisfied the provisions of Item 133 of the Rules. Mr Hannan had gone so far as to urge that the position was so clear that the Authority could decide in Slopen Main’s favour by a resolution out of session without waiting for its next scheduled meeting.
147 Mr Chesterman for Slopen Main submitted that there is no evidence at all that the Authority was actually misled. That proposition cannot be sustained.
148 As discussed above, it is not open to suggest that the Authority did not have regard to that misleading information. Slopen Main’s response was cited by the Authority in its letter to Mr Hannan as the basis of its decision on that issue.
149 Mr Chesterman further submitted that “if there was some furtive scheme to mislead the ACPA it was incompetently and unsuccessfully, executed”. He submitted that that could be illustrated by the fact that Mr Targett, the Second Applicant, had made representations to the Authority to the effect that if an application was successful, the Authority “should expect at your subsequent meeting to see this same applicant apply under Rule 122 for a ‘Relocation within a Facility’.” He submitted Mr Hope had made similar representations.
150 Those submissions fail to address the central and most critical point. As Yu establishes, Slopen Main was entitled to pursue a “stratagem”. However, Slopen Main was not entitled to provide false and misleading information to the Authority in respect of matters requiring the decision of the Authority to aid it in the execution of that stratagem.
151 It is not to the point that the Authority may have been alerted by Mr Targett and Mr Hope to the possibility that, if approved for the supply of pharmaceutical benefits at T19, Slopen Main might subsequently seek to relocate within the Shopping Centre. For my part I remain doubtful of the general proposition that the Authority could decline to consider and decide on its merits a facially lawful application put forward under one set of provisions of the Rules simply because there was evidence that if that application were to be recommended for approval and subsequently approved by the Secretary, the successful applicant might then make a further application under different provisions of the Rules. Given the highly prescriptive nature of the Rules as they apply to the Authority, any contention that an application should be refused for that reason may be capable of being considered only by the Secretary.
152 In any event it is unnecessary to decide that question.
153 The Court has proceeded in this matter on the basis that what is in issue is the validity of the Authority’s decision to recommend Slopen Main’s application for approval to supply pharmaceutical benefits at T19 under the Rules as provided for in Item 133. In that regard the criteria prescribed by the Rules, all of which were required to be satisfied if the Authority was to recommend to the Secretary that Slopen Main’s application be approved for the supply of pharmaceutical benefits in a small shopping centre, at least potentially required consideration of Slopen Main’s future intentions with respect to T19. If Slopen Main had no intention or capacity to trade at T19 for other than a very short period of time the issue of whether those premises were a “temporary selling point” needed to be determined.
154 The representations that Mr Chesterman referred to in his submissions were made by Mr Targett on 18 August 2016 and by Mr Hope on 19 August 2016. Whether prompted by those representations or for other reasons, at its meeting of 28 August the Authority decided to seek further information from Slopen Main. It requested an updated tenancy list showing the leasing, type, and trading status of each tenancy at the Cove Hill Shopping Centre.
155 The response provided by Slopen Main to that request obscured rather than revealed the true picture that then existed from the Authority.
156 In respect of whether T19 might have been found by the Authority to be a “temporary selling point”, Slopen Main provided false and misleading information to avoid it being discovered that at the same time as its application for T19 was being processed, it had finalised arrangements for a ten year renewable lease for T4. It had also secured licencing approval from the Tasmanian Pharmacy Board to use T4 as a pharmacy in the Cove Hill Shopping Centre pharmacy.
157 In Yu, Mr Yu had put forward a legally effective application to relocate. It was not a sham. He had provided no false or misleading information to the Authority. Mr Yu accepted the risk that the Secretary might cancel his existing approval at the same time or without delay thereafter. Had that happened Mr Yu would not only have not secured his objective, but would also have incurred the costs of having to relocate his pharmacy.
158 By contrast, Slopen Main provided false and misleading information to the Authority avoiding the risk that the Authority, advised of the true facts, might have rejected its application.
159 The Court is satisfied that the proven conduct of the Third Respondent is within the meaning of ‘fraud’ as that concept applies in this specific public law context. The Court’s findings as to the motivation of Slopen Main as to be attributed to it in consequence of those who acted on its behalf are set out at [116]-[119].
160 Slopen Main by its authorised representative submitted misleading information to the Authority and in so doing disabled the Authority from making a true assessment of the application Slopen Main had before it.
161 The decision made by the Authority to recommend to the Secretary that Slopen Main’s application to supply pharmaceutical benefits at premises at Tenancy T19 Cove Hill Shopping Centre, Bridgewater, Tasmania be approved must be quashed. Slopen Main’s application is remitted to the Authority for consideration according to law.
162 Such a remittal is on all grounds, unless otherwise limited. No reason to impose any such limitation has been shown. For that reason it is inexpedient to say anything as to the merits of the other issues which were in contest during the hearing.
I certify that the preceding one hundred and sixty-two (162) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Kerr. |
