FEDERAL COURT OF AUSTRALIA

Stambe v Minister for Health (No 2) [2019] FCA 479

ORDERS

THE COURT ORDERS THAT:

1.    Pursuant to s 16(1)(a) of the Administrative Decisions (Judicial Review) Act 1977 (Cth), with effect from 9 am on 11 June 2019, set aside the decision of the first respondent made on 1 November 2017 approving the supply of pharmaceutical benefits by the second respondent from premises located at 58 and 60 Pinewood Drive and 399, 401 and 403 Blackburn Road, Mount Waverley in the State of Victoria.

2.    Pursuant to s 16(1)(b) of the Administrative Decisions (Judicial Review) Act 1977 (Cth), with effect from 11 June 2019 and immediately after the order in paragraph 1 coming into force, the matter of the second respondent’s application dated 7 June 2017 for Ministerial approval under s 90A(2) of the National Health Act 1953 (Cth) to supply pharmaceutical benefits be remitted to the first respondent for further consideration according to law.

3.    After the remitter pursuant to paragraph 2 and before deciding whether to substitute the Secretary’s decision not to grant approval to the second respondent to supply pharmaceutical benefits, the first respondent is to advise the applicant of that request conformably with s 90D(1)(b) of the National Health Act 1953 (Cth), and invite him to provide comments on, or information or documents relevant to, the request within such period as the first respondent may specify.

4.    The first respondent pay the applicant’s costs fixed in the amount of $35,093.33.

5.    The second respondent pay the applicant’s costs fixed in the amount of $28,906.67.

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

REASONS FOR JUDGMENT

MORTIMER J:

1    On 29 January 2019, I handed down reasons for judgment in this proceeding: see Stambe v Minister for Health [2019] FCA 43. No orders were made at that time because the parties had sought an opportunity to be heard on the question of relief, and on the question of costs. Accordingly, orders were made on that day for the parties to attempt to agree to appropriate final orders reflecting the Court’s decision, including as to costs, and in the event no agreement could be reached, the parties were ordered to file and serve submissions and any further affidavit material in relation to those matters. That material was due from the applicant on 12 February 2019, and from the second respondent on 19 February 2019. The Minister chose not to participate in this aspect of the proceeding. Therefore, where I refer to “the parties” in these reasons, that is a reference to the applicant and the second respondent.

2    The timetable set out in the Court’s orders was not adhered to by the applicant, and an extension of time was sought. An extension shorter than that sought was granted to the applicant, and a commensurate extension was granted to the second respondent. The parties’ material was subsequently filed in accordance with the Court’s orders.

3    In addition to submissions, the parties filed the following affidavit material:

(a)    The applicant filed an affidavit sworn by him on 15 February 2019;

(b)    The second respondent filed an affidavit of Dr Alan Cunneen (the owner of the 24-hour Waverley Family HealthCare Medical Centre) sworn on 20 February 2019, and an affidavit of Yen Kin Yab (the director of the second respondent) sworn on 21 February 2019.

4    The parties have not been able to agree on the question of final orders. After the filing of the submissions and affidavit material, the parties managed to reach agreement on costs: see [101]-[102] below.

5    After some initial consideration of the parties’ submissions and affidavit material, the Court notified the parties that it wished to convene a short oral hearing to address, in particular, one issue. That issue arose from the second respondent’s position that the appropriate orders for the Court to make were to refer the matter back to the Minister, but not to set aside the Minister’s decision until a date three months after that referral. The Court informed the parties it wished to hear submissions about how it could, in law, refer the matter back to the Minister without first setting aside the decision he had made. On 6 March 2019, the Court re-convened to hear further submissions from the parties, which were of considerable assistance.

6    Having considered the submissions made on behalf of the parties, and the additional affidavit material, it is my view that neither the final orders proposed by the applicant, nor those proposed by the second respondent, are appropriate. However, the flexibility inherent in s 16 of the Administrative Decisions (Judicial Review) Act 1977 (Cth) allows for some accommodation to be given to the second respondent’s circumstances, while adhering to what I consider to be the correct approach in principle. The orders made today reflect what I consider to be an appropriate accommodation. I turn to explain my reasons for those conclusions.

The applicant’s position

7    The applicant sought orders in the following form:

1.    That the decision of the first respondent made on 1 November 2017 purportedly pursuant to ss90A(2) and (90B(5) of the National Health Act 1953 (Cth) to substitute a decision of the Secretary of the Department of Health made under s90 of the National Health Act to refuse an application by the second respondent for approval to supply pharmaceutical benefits at particular premises, namely 58 and 60 Pinewood Drive and 399, 401 and 403 Blackburn Road, Mount Waverley in the State of Victoria (premises), with a decision to approve the second respondent to supply pharmaceutical benefits at the premises (Minister’s decision), is set aside.

2.    That the first respondent and the second respondent pay the applicant’s costs of and incidental to the originating application.

(Original emphasis.)

8    The applicant accepted it was appropriate for the Minister’s decision to be set aside from the date of the Court’s orders, and not from any time prior to this, such as from the date of the decision itself. The applicant accepts it would be unfair to the second respondent to put the status of payments already made to it by the Commonwealth pursuant to the National Health Act 1953 (Cth) “in question” by setting aside the Minister’s decision from a date earlier than the date of the order, or by declaring the Minister’s decision to be void. The applicant accepts the second respondent has operated its pharmacy under the impugned approval since 5 March 2018.

9    However, the applicant submits that there should be no remitter of the matter back to the Minister. He submits:

Noting the process by which the Minister’s decision was made (by the adoption of briefing notes and reasons for decision that had been prepared by Departmental officers and lawyers) and the requirement for the Minister to exercise his power under s90A(2) personally (s90A(4)(b)) it would be undesirable to remit the matter to the Minister and allow Departmental officers and lawyers to simply ‘fix’ the briefing notes and subsequent reasons for the Minister to adopt. Setting aside the Minister’s decision would also eliminate any risk of an unconscious attempt to justify the decision that has been made and found to have not complied with the legal requirements applicable to making that decision because a new application would need to be considered afresh.

10    The applicant also submits that the information which would be before the Minister on any remitter would not be up-to-date, and therefore it would not be appropriate for the Minister to embark on a further consideration of the exercise of his powers on the basis of material that was provided to him by the applicant over 18 months ago.

11    In the alternative, the applicant submits that if the Court decides remitter is appropriate, it should make the following orders:

3. That pursuant to s16(1)(b) of the Administrative Decisions (Judicial Review) Act 1977 (Cth) the second respondent’s application dated 7 June 2017 to the first respondent for Ministerial approval under s90A(2) of the National Health Act for approval to supply pharmaceutical benefits at the premises is referred back to the first respondent for further consideration in accordance with law.

4. That before deciding whether to substitute the Secretary’s decision not to grant approval to the second respondent to supply pharmaceutical benefits at the premises with a decision approving the first respondent for the purpose of supplying pharmaceutical benefits at the premises at the second respondent’s request, the first respondent is to advise the applicant of that request conformably with s90D(1)(b) of the National Health Act, and invite him to provide comments on, or information or documents relevant to, the request within such period as the first respondent may specify.

12     The applicant submits that similar orders were made by Jessup J in Yu v Minister for Health (No 2) [2013] FCA 367; 216 FCR 188.

13    The applicant opposes any deferral of the date for setting aside the Minister’s decision, which is one of the orders proposed on behalf of the second respondent. The applicant’s submissions note the following chronology:

(a)    these proceedings were commenced within time on 15 December 2017;

(b)    the second respondent was joined by consent on 25 January 2018;

(c)    the first case management conference occurred in April 2018 (noting the applicant states that this hearing took place on 19 April 2018, when in fact it took place on 12 April 2018); and

(d)    the matter was listed for hearing on 2 August 2018.

14    The applicant submits, in light of that chronology, that the second respondent “took no steps to have the hearing of the application expedited and instead took the commercial risk that it may lose its approval to supply pharmaceutical benefits by opening its pharmacy”. He further submits that “[the second respondent] should not, in light of those matters, continue to benefit at Commonwealth expense”.

15    In the affidavit filed by the applicant with his submissions on final orders, he deposed to having an intention to open one of his pharmacies to trade for 24 hours, seven days a week, in order to service the patients of the Waverley Family HealthCare Medical Centre and also other nearby residents who need access to pharmaceutical benefits after hours. There was no precise evidence provided on behalf of the applicant about when he formed this intention. The applicant deposed to estimating it would take him “two to three months to actually commence trading for 24 hours a day, seven days a week”, because of the need to make proper staffing and security arrangements. However, he made the following point clear:

I have not commenced trading at either of My Pharmacies for 24 hours a day or taken any steps towards doing so before now, as the Respondent’s Pharmacy is nearby and trades for 24 hours a day.

16    On the question of costs, the applicant’s submissions contained a single paragraph on that matter:

It appears that the parties are agreed that the applicant should receive his costs of the proceedings. Noting the Court’s preference for making lump sum costs orders, the applicant’s costs (excluding GST) are:

a.    solicitors’ fees             $38,836.75

b.    counsels’ fees             $39,254.55

c.    disbursements             $5,451.21

d.    TOTAL            $83,542.51

(Original emphasis.)

17    No affidavit material was filed by the applicant to support the figures set out in this paragraph. In particular, no affidavit material was provided to indicate whether these costs were “party/party” costs or “solicitor/client” costs.

The second respondent’s position

18    The second respondent sought the following orders:

(1)    Pursuant to s 16(1)(b) of the Administrative Decisions (Judicial Review) Act 1977 (Cth), an order that the matter be referred to the Minister for further consideration according to law.

(2)    Pursuant to s 16(1)(a) of the Administrative Decisions (Judicial Review) Act 1977 (Cth), an order that the decision of the first respondent be set aside with effect from the date that is 3 months’ from the date of this order.

(3)    The first respondent pay the applicants’ costs fixed in the amount of $35,093.33.

(4)    The second respondent pay the applicants’ costs fixed in the amount of $28,906.67.

19    Thus, the areas of debate between the active parties are, first, whether there should be a remitter to the Minister, and second, what date should be selected as the date from which the Minister’s decision should be set aside. As I have noted, the debate about the amount of costs which should be awarded to the applicant is now the subject of agreement between the parties.

RESOLUTION

The question of remitter

20    After a court has determined on judicial review that an exercise of statutory power has miscarried, an order in the nature of remitter will generally only be appropriate where there remains a statutory task or function still to be performed. If a repository of a power cannot be required, directly or indirectly, to perform again the particular statutory task or function, then it is unlikely an order in the nature of remitter would be appropriate. This issue may arise in particular where statutory powers are expressed to be personal, and may have aspects which suggest they are “non-compellable”.

21    The applicant submits remitter is not appropriate for reasons that are, in my opinion, essentially speculative. There is simply no basis for the applicant to allege that Departmental officers or lawyers might “fix” the briefing notes and the Minister’s subsequent reasons, and there is no basis on which the Court could infer that the Minister will do nothing more than seek to justify the previous decision. Nor is it to be supposed that at the time when the Minister comes to consider afresh the exercise of power under s 90A(2), the Minister will act otherwise than to ensure she or he possesses appropriately complete and up-to-date material to enable the correct decision to be made on the merits.

22    There is no basis on the evidence to suppose, contrary to the applicant’s submissions, that the Minister will not approach a fresh exercise of power objectively, and with an open mind.

23    The more difficult question is whether there remains a statutory task or function to be performed, so that an order in the nature of remitter is appropriate in that sense. The second respondent submits, relying on Minister for Immigration and Multicultural Affairs v Bhardwaj [2002] HCA 11; 209 CLR 597, that there is a “duty” which in law remains unperformed. I do not accept that submission in terms, but I do accept, for reasons I will explain, that after the Court’s conclusion that the 1 November 2017 approval was an unlawful exercise of power and should be set aside, there remains a statutory task for the Minister to perform, so that an order in the nature of remitter is appropriate.

24    Of course, these matters always depend on the text and structure of the statutory scheme in issue: see Animals’ Angels e.V. v Secretary, Department of Agriculture [2014] FCAFC 173; 228 FCR 35 at [86]-[87] (Kenny and Robertson JJ, Pagone J agreeing). In a case such as the present, where there has been a request made under s 90B(1) and it is a request which the Minister has expressly decided to consider under s 90B(4), then I accept that in those circumstances s 90B(5) imposes a duty of some kind. However, s 90B(5) is not the source of the power to grant or refuse approval for a pharmacist to supply pharmaceutical benefits at particular premises: as that provision makes clear, the source of that power is s 90A(2). Section 90B(5) is concerned with the time period in which such a decision must be made. There is some tension in seeing s 90B(5) as the source of an obligation, enforceable by an order in the nature of mandamus and amenable to the analysis in Bhardwaj.

25    Section 90B(5) conditions the power in s 90A(2). It deems the Minister to have decided not to exercise the power if it is not made within the three month period specified in subs (5). It is appropriate to set out that subsection, and the preceding subsection:

(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.

26    The applicant and the second respondent both submitted that the deeming effect of s 90B(5) was disengaged or spent after the Minister had in fact made a decision. Reliance was placed by the second respondent on Jessup J’s reasons in Yu (No 2) at [11]-[12], and White J’s reasons in Angelos v Minister for Health [2014] FCA 706; 226 FCR 275 at [85]. There is force in this analysis, in order to give the scheme an effective and practical operation in the face of challenges to the lawfulness of the exercise of power under s 90A(2). Otherwise, there could likely never be effective judicial review of the exercise of these powers, because s 90B(5) would operate to deem a refusal to have occurred before any judicial review proceeding was completed. In the context of the legislative scheme in the Migration Act 1958 (Cth), a similar approach was taken in Plaintiff S297/2013 v Minister for Immigration and Border Protection [2015] HCA 3; 255 CLR 231 at [32].

27    In earlier decisions, I have observed that caution needs to be exercised about the use of consequentialist reasoning in statutory interpretation: see DBE17 v Commonwealth [2018] FCA 1307 at [126]-[129], and the references there to my observations in Friends of Leadbeater’s Possum Inc v VicForests [2018] FCA 1307 at [227]-[231]. However, in the circumstances of this scheme, and the matters to which I refer at [54]-[56] below, an intention to impose such an impractical consequence should not be attributed to Parliament.

28    Therefore, I respectfully agree with Jessup J in Yu (No 2) and White J in Angelos that the deeming effect of s 90B(5) is disengaged or spent after the Minister has in fact made a decision, even if it is subsequently a decision which is set aside on the basis that it is affected by an error of law. On that basis, the time limit in s 90B(5) does not preclude relief being granted under s 16 of the AD(JR) Act: it does not preclude the making of an order setting aside the Minister’s decision, nor an order remitting the matter to the Minister for reconsideration.

29    Further, on this approach, s 90B(5) cannot be said to impose any ongoing duty on the Minister which remains “unperformed”, in the sense described in Bhardwaj. The duty is to decide within a particular time frame, and that has been performed. If it had not been, the deeming effect of s 90B(5) would have been engaged. It was performed otherwise in accordance with law, and the time limit is spent. The better analysis of how these provisions are intended to work is that in the circumstances, the statutory task which the Minster has, by an exercise of power under s 90B(4), decided to undertake, is incomplete.

30    Read with s 90A(2) and in the circumstances of a positive decision made by the Minister under s 90B(4) to consider a request received pursuant to s 90B(1), the appropriate interpretation is that these provisions in combination contemplate the Minister will go on to exercise the power in s 90A(2), one way or the other. That is, once the power in s 90B(4) is exercised positively, the statutory task will not be complete until the power in s 90A(2) is lawfully exercised, one way or the other. Some analogy can be found with the High Court’s reasoning in Plaintiff S4/2014 v Minister for Immigration and Border Protection [2014] HCA 34; 253 CLR 219 at [38]-[40]. Having positively decided under s 90B(4) to consider whether or not to exercise the power in s 90A(2), the Minister’s statutory task requires her or him to proceed to see that consideration through to a lawful conclusion. In other words, the Minister cannot stop after the step in s 90B(4). What would occur if the Minister refused to reconsider the exercise of power under s 90A(2) is not a matter which the Court presently needs to examine, or express any view about.

31    For these reasons, it is appropriate that the Court’s orders provide for remitter of the matter to the Minister. The second respondent does not oppose a form of orders which gives the applicant an opportunity to provide comments, information or documents to the Minister and I am satisfied that, in the circumstances, it is appropriate to make such an order.

Timing of orders setting aside the decision

32    The second difficult question is the timing of the order setting aside the Minister’s decision and, as a consequence, the timing of a remitter order.

33    The evidence before the Court in relation to final orders, on behalf of the second respondent, relevantly establishes that the second respondent commenced operating a pharmacy under the banner “TerryWhite Chemmart” at 58-60 Pinewood Drive, Mount Waverley on 5 March 2018, and that it operates as a 24-hour seven day a week pharmacy within the Waverley Family HealthCare Medical Centre.

34    The evidence to which I refer below under the heading “Discretionary considerations as to the timing of the Court’s orders” includes evidence about the contended financial impact on the second respondent if the Minister’s decision is set aside with effect from the date of the Court’s orders, with the consequence that the second respondent would not have operative approval to dispense Pharmaceutical Benefits Scheme (PBS) medicines pursuant to the scheme contained in the National Health Act. That evidence sets out the contended consequences of such a situation for those operating the Waverley Family HealthCare Medical Centre, and for members of the public currently using the services of both the pharmacy and the Medical Centre.

35    The solution proposed on behalf of the second respondent is that the Court should remit the matter immediately to the Minister but, pursuant to s 16(1)(a) of the AD(JR) Act, the Court should set a period of three months before the Minister’s decision is set aside. The second respondent submits that the intervening period would give the Minister an opportunity to reconsider the request for approval while its pharmacy could continue to operate on the basis of what its counsel contended, in effect, to be a “factual” approval.

36    The second respondent submits that such a course is open to the Court, given the breadth of relief available under s 16 of the AD(JR) Act, and the terms and operation of the relevant provisions of the National Health Act. It submits the scheme of the National Health Act distinguishes between an approval “in fact” and “in law”, and that the former can survive and remain in place, allowing a pharmacy to continue lawful operation, even if there is no approval in law which can be recognised because the decision granting approval has been found to be affected by legal error.

37    The various scenarios which might flow from these propositions were the subject of some discussion between the Court and counsel for the second respondent during the supplementary hearing. Counsel appeared to accept the following consequences could flow if the suggested course was adopted:

(a)    If the Minister decides after two months to refuse the approval, the second respondent submits it would continue to have the benefit (through s 90E of the National Health Act) of the “in fact” approval of 1 November 2017 for another month until the Court’s setting aside order takes effect.

(b)    If the Minister decides after two months to grant the approval, then the second respondent accepts it has in effect two operative approvals, both of which on its contentions authorise it to dispense PBS medicines. Then, one month later, the “in fact” approval will cease to exist because the Court’s setting aside order will take effect.

(c)    If, after three months, the Minister has not made a new decision pursuant to the remitter order, then the “in fact” approval will be set aside and there will no basis on which the pharmacy can dispense PBS medicines attracting the subsidy.

38    The premise of the second respondent’s proposal is that the Court’s findings, and indeed (as I understood the argument) any finding of legal error in the Minister’s decision – whether characterised as “jurisdictional” or not – do not result in the Minister’s approval decision being a nullity, or invalid from the time the power was exercised, at least for “factual” purposes. The applicant appears to agree in this premise, although some of senior counsel’s submissions at the supplementary hearing appeared to assume an approval is capable of being a “nullity”. Of course, as I have explained above, the second respondent’s submissions about the existence of a duty which was “unperformed” did to some extent rely on the proposition that the Minister’s exercise of power on 1 November 2017 was “in law” a nullity.

39    The second respondent’s argument rests on the approach taken by Jessup J in Yu (No 2), and the authorities to which his Honour referred in that decision. That was a case where his Honour had previously found there had been a denial of natural justice to the applicant, in the granting of an approval by the Minister under s 90A of the National Health Act. As in this case, the parties diverged on the appropriate form of final orders, especially as to the date on which the impugned approval decision should be set aside. The applicant submitted the decision should be set aside from the time the power was exercised. In contrast, the fourth respondents (who were the beneficiaries of the s 90A approval) submitted it should be set aside from a date no earlier than the date of the Court’s orders. Yu (No 2) was, like this case, a proceeding invoking this Court’s jurisdiction under the AD(JR) Act. There do not appear to have been any submissions made in Yu (No 2) that the Court should select a date in the future on which to set aside the s 90A approval decision. I consider it of some significance that Yu (No 2) did not appear to involve any proposal that orders be made with prospective effect. Nor did there appear to have been any debate about referral back to the Minister, or that this should occur at the same time, or technically immediately after, the s 90A approval had been set aside.

40    At [4] of his reasons, referring to both Jadwan Pty Ltd v Department of Health and Aged Care [2003] FCAFC 288; 145 FCR 1 at [42] and Minister for Immigration and Citizenship v Maman [2012] FCAFC 13; 200 FCR 30 at [44], Jessup J held (quoting from Gray and Downes JJ’s reasons in Jadwan) that there is no “universal proposition that jurisdictional error on the part of a decision-maker will lead to the decision having no consequences whatsoever”. As Jessup J and the Full Courts in Jadwan and Maman recognised, the statutory context in which the issue arises is important.

41    Having set out the relevant provisions of the National Health Act, Jessup J turned (from [7] of his reasons) to address the consequences of a pharmacist having obtained an approval under s 90 of the National Health Act. His Honour found that by reason of the prohibition in s 89 of the National Health Act, and the definition of “pharmaceutical benefits”:

… supply by an “approved pharmacist” at or from premises in respect of which he or she is approved is the only lawful way that a person may obtain pharmaceutical benefits as defined.

42    His Honour also noted the price benefit for the individuals obtaining the pharmaceutical benefits, arising by reason of ss 86 and 87 of the National Health Act.

43    These two consequences of a pharmacist obtaining approval under the National Health Act with respect to particular premises were described by Jessup J at [9] as “far reaching”:

… both in the sense of extending to numerous transactions in which ordinary patients are involved and in the sense of involving statutory authorisation for the expenditure of Commonwealth moneys.

44    His Honour then found, at the end of [9]:

My attention was drawn to no provision — in the NH Act or elsewhere — which would provide either for the recovery of such moneys or for the regularisation of the expenditure involved should it later be discovered that a ministerial act by which the pharmacist in question had been approved was invalid. As a broad matter of statutory purpose and convenience, I find it hard to imagine that the legislature might have contemplated that an approval given under s 90A of the NH Act in breach of the rules of natural justice was a nullity without any legal consequences whatsoever.

45    I note for completeness that there are provisions for the recovery of “unauthorised payments” in subss 99AA(2) and (3) of the National Health Act. However, these provisions operate in circumstances where a pharmacist knows, or ought reasonably to have known, that the subsidy amount received in respect of the supply of a pharmaceutical benefit or benefits was not payable. Although it is not necessary to decide, I doubt these provisions would be applicable to circumstances such as those in Yu (No 2), or in this proceeding, at least to the point of the Court’s decision on legal error.

46    In Yu (No 2), Justice Jessup noted (at [10] of his reasons) a matter which has been emphasised by the second respondent: namely, that an approval under s 90 or s 90A is not given as a “benefit” to an individual pharmacist, but rather as part of a scheme to ensure the Australian community has convenient access to pharmacies. This led Jessup J to find (looking at the position of the applicant in Yu (No 2), as an objecting pharmacist):

The fact that the s 90A approval was not concerned with the applicant’s own position, or with his rights as a pharmacist, is another reason to consider it likely that the legislature did not intend that the Minister’s failure to accord natural justice to someone in the position of the applicant would produce the result that the approval ostensibly resulting therefrom would be a legal nullity.

47    I return to this below, but this factor seems to me to tend against the discretionary considerations put forward by the second respondent in support of its proposed orders. If the scheme is not concerned with benefits to individual pharmacists, it is somewhat difficult to see how any financial difficulties which may be suffered by the second respondent become relevant to the question of appropriate orders in circumstances where the Court has found an approval decision to have been made unlawfully.

48    At [11] of his reasons, Jessup J turned to examine what his Honour called the “automatic rejection provisions” in subss 90B(4) and (5). His Honour found that the consequence of an approval decision made under s 90A in breach of the rules of procedural fairness being treated as a nullity would be that the deeming effect of those provisions would be engaged. Consequently, the s 90A process would be a “closed event”, unable to be reopened after judicial review, because the time limits prescribed by those provisions would have passed and there would have been a deemed refusal, and the application time limit in s 90B(3) would likely also have passed so that a new request for approval could not be made by the pharmacist. His Honour found that could not have been the outcome intended by the legislature where there was a denial of procedural fairness in the approval process.

49    His Honour then concluded with this finding (at [12]):

By reason of the considerations discussed above, which are essentially ones of statutory intent, I take the view that the Minister’s failure to accord natural justice to the applicant did not produce the result that the approval she gave to the fourth respondents on 20 July 2012 was a nullity. That approval, albeit infected with legal error, was nonetheless an approval in fact for the purposes of s 90E of the NH Act.

50    To this point in his reasons, Jessup J had not dealt with the terms of s 90E, other than to set them out. Section 90E provides:

90E    Effect of decision by Minister to approve pharmacist

If the Minister decides to substitute for a decision of the Secretary to which section 90A applies a decision approving a pharmacist for the purpose of supplying pharmaceutical benefits at particular premises:

(a)     the pharmacist is to be treated for all purposes of this Act as if the pharmacist is approved under section 90 in respect of those premises; and

(b)     references in this Act to an approval granted under section 90 include references to an approval treated as having been granted under section 90 by paragraph (a) of this section; and

(c)    the conditions to which an approval granted under section 90 is subject (including any condition that is imposed by means of a determination for the purposes of paragraph 92A(1)(f)) apply also to an approval that is treated as having been granted under section 90 by paragraph (a) of this section; and

(d)     the rights conferred and obligations imposed on an approved pharmacist apply to the pharmacist in his or her activities as an approved pharmacist.

51    Relying on the last sentence of Jessup J’s reasons at [12] (see [49] above), the second respondent submitted the effect of s 90E was to “protect” a pharmacist in the position of the second respondent, and to enable the pharmacist to operate under an approval “in fact”, even if the power which had been exercised to grant that approval had miscarried because of legal error. As I understood the submission, it extended to circumstances where the legal error could properly be described as jurisdictional. For completeness, I note the second respondent did not submit that an error of the kind identified by the Court (being non-compliance with the requirements in s 90D(3)) was anything other than an error affecting the jurisdiction of the Minister to grant an approval under s 90A(2).

52    I do not accept the second respondent’s submissions about the purpose, operation or effect of s 90E. Nor do I accept that Jessup J adopted such an interpretation of s 90E in Yu (No 2). The conclusion contained in the last sentence in his Honour’s reasons at [12], in circumstances where it does not appear any argument of that kind was put to his Honour, is an insufficient basis upon which to support the rather more ambitious proposition now put on behalf of the second respondent.

53    The purpose of s 90E is clear from its text and context. Referring as it does to a positive exercise of the personal power conferred on the Minister by s 90A(2), the provision then sets out four consequences which flow from that exercise of power. Each of them seeks to bring an approval under s 90A into the same legislative regime, and to give it the same status, as an approval under the ordinary approval process in s 90. The terms of s 90E apply that legislative scheme to a s 90A approval. What that does, in turn, is to make the provisions in s 90 the “lead” provisions: see Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; 194 CLR 355 at [70] (McHugh, Gummow, Kirby and Hayne JJ).

54    To say as much is not to doubt the general propositions set out by Jessup J in Yu (No 2) that the scheme of the National Health Act, insofar as it deals with approval of pharmacists to supply pharmaceutical benefits, does not intend that an exercise of power under s 90A(2), which is affected by legal error, be a nullity. As s 85 makes clear, pharmaceutical benefits may only be provided by the Commonwealth in accordance with Part VII of the National Health Act: the scheme is exclusive. The entitlement conferred by s 86 to receive pharmaceutical benefits “without payment or provision of money or other consideration other than a charge made in accordance with section 87” is the principal concern of the scheme. The approval of pharmacists to supply those benefits is a critical component, but it is facilitative towards the end of ensuring supply of pharmaceutical benefits to members of the public as contemplated by s 86, and the Commonwealth’s function in s 85. Pharmacists are not the only persons permitted to supply pharmaceutical benefits; they can also be supplied, in accordance with the limitations in the legislative scheme, by approved medical practitioners and by approved hospital authorities: see s 84 and the definition of “approved supplier”.

55    The restrictions on the entitlement to obtain pharmaceutical benefits through an approved pharmacist would be rendered uncertain and unworkable if the approval of a pharmacist to supply pharmaceutical benefits, having been identified as affected by legal error, was deprived of all efficacy since its grant. In that respect, I agree with the conclusions of Jessup J in Yu (No 2). Acceptance of that proposition does not involve any extended operation being given to the terms of s 90E. There are a range of effects on third parties, and on the expenditure of Commonwealth funds under this scheme, all of which contribute to the conclusion that the legislative scheme did not intend that an approval found to have been granted unlawfully, including without jurisdiction, should be treated as never having had any effect in law.

56    Rather, acceptance of that proposition is a recognition of what was said by Gray and Downes JJ in Jadwan at [42]; that the consequences of a conclusion that a power was exercised unlawfully, and in particular, without jurisdiction, will depend on the circumstances, and especially on the statutory context.

57    It is true that there are statements in Bhardwaj which are far more absolute, in particular the often quoted passage from the judgment of Gaudron and Gummow JJ at [51]:

There is, in our view, no reason in principle why the general law should treat administrative decisions involving jurisdictional error as binding or having legal effect unless and until set aside. A decision that involves jurisdictional error is a decision that lacks legal foundation and is properly regarded, in law, as no decision at all. Further, there is a certain illogicality in the notion that, although a decision involves jurisdictional error, the law requires that, until the decision is set aside, the rights of the individual to whom the decision relates are or, perhaps, are deemed to be other than as recognised by the law that will be applied if and when the decision is challenged. A fortiori in a case in which the decision in question exceeds constitutional power or infringes a constitutional prohibition.

(Footnotes omitted.)

58    See also McHugh J at [63] and [67], and Hayne J at [152]-[155].

59    The statements made by members of the High Court in Bhardwaj concerning the consequences of a finding of jurisdictional error need to be understood in the context of the nature of the decision under consideration in that case. The relevant factual circumstances concerned, as Gleeson CJ recounted at the beginning of his reasons, the respondent’s review application to the Immigration Review Tribunal which was initially determined on 16 September 1998 after a hearing on 15 September 1998 which the respondent did not attend. The decision was adverse to the respondent, and the particular reason given for the rejection of the review application was that the respondent had not provided any information suggesting his visa cancellation was unfair or inappropriate. However, the Tribunal had, by administrative oversight, overlooked an adjournment request sent by the respondent’s agent the day before the hearing, which thus explained why the respondent had not appeared at the hearing on 15 September. When that adjournment request was drawn to the Tribunal’s attention, the Tribunal arranged for a new hearing to be conducted, and ultimately accepted the respondent’s explanation of the conduct which led to the cancellation of his visa, and revoked that cancellation. The Minister sought judicial review of that decision, on the basis the Tribunal was functus officio after the first decision and had no power to alter its initial decision. On an appeal by way of the grant of special leave from the Full Federal Court’s decision, a majority of the High Court rejected that argument, for reasons expressed in differing ways and on differing bases. However, it is the reasons of Gaudron and Gummow JJ (and in particular the passage from their Honours’ reasons at [51], which I have quoted above) which have endured and been subsequently applied, including by the High Court itself.

60    Bhardwaj was decided before Plaintiff S157/2002 v Commonwealth of Australia [2003] HCA 2; 211 CLR 476. In Plaintiff S157, in the context of determining the scope and interpretation of a privative clause in the Migration Act, the plurality at [76] endorsed the principal proposition in Bhardwaj:

Once it is accepted, as it must be, that s 474 is to be construed conformably with Ch III of the Constitution, specifically, s 75, the expression “decision[s] ... made under this Act” must be read so as to refer to decisions which involve neither a failure to exercise jurisdiction nor an excess of the jurisdiction conferred by the Act. Indeed so much is required as a matter of general principle. This Court has clearly held that an administrative decision which involves jurisdictional error is “regarded, in law, as no decision at all”. Thus, if there has been jurisdictional error because, for example, of a failure to discharge “imperative duties” or to observe “inviolable limitations or restraints”, the decision in question cannot properly be described in the terms used in s 474(2) as “a decision ... made under this Act” and is, thus, not a “privative clause decision” as defined in s 474(2) and (3) of the Act.

(Footnotes omitted.)

61    However, these statements in Bhardwaj were made, as Gaudron and Gummow JJ in particular emphasised at [44]-[46] of their reasons, by also rejecting the use of terms such as “nullity” and “invalidity” or “void” on the basis that such terminology is unhelpful:

To say that the September decision was not a “decision on review” for the purposes of ss 367 and 368 of the Act is simply to say that it clearly involved a failure to exercise jurisdiction, and not merely jurisdictional error constituted by the denial of procedural fairness. Either of these grounds would entitle Mr Bhardwaj to have the September decision quashed by this Court as an incident of relief by way of mandamus or prohibition under s 75(v) of the Constitution. This notwithstanding, the question whether the Tribunal could disregard its September decision depends on the scheme of Pts 5 and 8 of the Act. To understand that scheme, it is necessary to say something as to the nature of an administrative decision.

The nature of administrative decisions

It is sometimes convenient to ask whether administrative decisions which involve reviewable error are either void or voidable, the former signifying that the decision is “ineffective for all purposes” and the latter that it is “valid and operative unless and until duly challenged but ... deemed to have been void ab initio.” The tendency to conceptualise erroneous administrative decisions as voidable rather than void may be the result of the need to treat a decision as having at least sufficient effect to ground an “appeal” or other legal proceedings. Thus, it was said by Lord Wilberforce in Calvin v Carr that:

“Their Lordships’ opinion would be, if it became necessary to fix upon one or other of [the] expressions [‘void’ or ‘voidable’], that a decision made contrary to natural justice is void, but that, until it is so declared by a competent body or court, it may have some effect, or existence, in law. This condition might be better expressed by saying that the decision is invalid or vitiated. In the present context, where the question is whether an appeal lies, the impugned decision cannot be considered as totally void, in the sense of being legally non-existent.”

In our view, it is neither necessary nor helpful to describe erroneous administrative decisions as “void”, “voidable”, “invalid”, “vitiated” or, even, as “nullities”. To categorise decisions in that way tends to ignore the fact that the real issue is whether the rights and liabilities of the individual to whom the decision relates are as specified in that decision. And, perhaps more importantly, it overlooks the fact that an administrative decision has only such force and effect as is given to it by the law pursuant to which it was made.

(Footnotes omitted.)

62    Some consequences of the more absolute statements in Bhardwaj came to the fore in Jadwan. In Jadwan, the exercise of power under consideration was the revocation by the Minister of an approval for an aged care facility in Hobart, Tasmania. The revocation power was exercised under the National Health Act. The date on which the appellant held an approval for its aged care facility (and therefore the date on which the approval was revoked) was critical to the operation of transitional provisions introduced into the new regulatory regime contained in the Aged Care Act 1997 (Cth): if the appellant could not obtain the benefit of the transitional provisions contained in that Act, its approval (and its subsidised aged care bed places) would not be transferred to it, and it would not be able to operate its facility. Furthermore, it would lose a valuable asset, as aged care places were a tradeable commodity. A key issue the Full Court was required to determine was the effect, in law, of an earlier Full Court decision which found the Minister’s revocation decision to be unlawful: was the revocation decision a “nullity”, in the sense explained in Bhardwaj, so there had been no revocation and the appellant thereby had the approval it needed to take advantage of the transitional provisions in the Aged Care Act?

63    Justices Gray and Downes began their answer to this question by referring to the reasons of Gleeson CJ in Bhardwaj at [11], where his Honour said:

To say that a tribunal has considered an application, reached a conclusion, and informed affected parties of its decision, is to make a statement of fact. But the legal consequences of that fact depend upon the Act; and the answer to a question about those consequences may depend upon the purpose for which the question is asked. The answer to the question whether a legally effective decision has been made may depend upon the kind of legal effect that is under consideration, and upon further facts as to what was done, or not done, following the communication of the decision.

64    Having then worked through the reasons of the remainder of the members of the High Court in Bhardwaj, Gray and Downes JJ concluded (at [40]):

This analysis shows that the judgment in Bhardwaj rested clearly upon the proposition that the relevant legislation did not give the first decision of the IRT force and effect such as to require the IRT to treat that decision as precluding it from exercising its statutory function. All six judges who formed the majority did so on that basis. Only Gaudron and Gummow JJ, with the agreement of McHugh J, as part of their reasoning, relied on the proposition that jurisdictional error on the part of the decision-maker causes an administrative decision to be of no legal effect. Gleeson CJ, Hayne J and Callinan J do not appear to have embraced that proposition. Kirby J in his dissenting judgment clearly did not. Gaudron and Gummow JJ did not explain in detail the consequences of the proposition that a decision has no legal effect. They did not deal with issues such as the status of the first decision of the IRT if the IRT had not chosen to ignore it and make another. Indeed, their Honours did not discuss what might be the factual, as distinct from the legal, consequences attaching to an administrative decision if no challenge to its validity is ever made, or if any challenge to its validity is made out of time, or is made in proceedings to which someone bound or otherwise affected by the decision is not a party. Nor did their Honours say anything about the possible effect of an administrative decision after a court proceeding in which a party has made out a case of jurisdictional error on the part of the decision-maker, but the Court has declined to grant relief in relation to the decision by reason of discretionary considerations. The facts of Bhardwaj did not call for pronouncement upon these issues. The IRT had itself chosen to ignore its previous decision. The validity of that decision was in issue in the very proceeding with which the High Court was dealing.

65    At [41], Gray and Downes JJ then referred to the plurality reasons in Plaintiff S157, and the reference there to Bhardwaj, observing:

…

As was the case in Bhardwaj itself, their Honours did not deal in S157 with the possible status of an administrative decision affected by jurisdictional error in the absence of a challenge to its validity, or after a court has found such error to have existed, but has declined to treat the decision as a nullity.

66    Then, at [42], their Honours said:

In our view, Bhardwaj cannot be taken to be authority for a universal proposition that jurisdictional error on the part of a decision-maker will lead to the decision having no consequences whatsoever. All that it shows is that the legal and factual consequences of the decision, if any, will depend upon the particular statute. As McHugh, Gummow, Kirby and Hayne JJ said in Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at 388 – 389:

‘An act done in breach of a condition regulating the exercise of a statutory power is not necessarily invalid and of no effect. Whether it is depends upon whether there can be discerned a legislative purpose to invalidate any act that fails to comply with the condition. The existence of the purpose is ascertained by reference to the language of the statute, its subject matter and objects, and the consequences for the parties of holding void every act done in breach of the condition.’

    (Original emphasis.)

67    Sitting as a single judge, I am bound by the ratio in Jadwan, which in my opinion includes the passage at [42] of the reasons of Gray and Downes JJ. It is an approach which has received express approval in subsequent decisions, and which is also consistent with other more recent authorities, including in the High Court, where these questions have been discussed: see Minister for Immigration and Border Protection v CLV16 [2018] FCAFC 80 at [61]-[64] (Flick, Griffiths and Perry JJ); Lewski v Australian Securities and Investments Commission [2016] FCAFC 96; 246 FCR 200 at [249] (Greenwood, Middleton and Foster JJ); BMF16 v Minister for Immigration and Border Protection [2016] FCA 1530 at [149]-[151] (Bromberg J); Maman at [44] (Flick and Foster JJ); Hossain v Minister for Immigration and Border Protection [2018] HCA 34; 359 ALR 1 at [24] (Kiefel CJ, Gageler and Keane JJ); and Minister for Immigration and Border Protection v SZMTA [2019] HCA 3 at [84] (Nettle and Gordon JJ).

68    I have found that the legislative scheme contained in Pt VII, Div 2 of the National Health Act relating to approval of pharmacists does not intend that an approval granted unlawfully is “void”, or (to use different language) invalid for all purposes as and from the time of the exercise of power. Rather, the scheme intends, and assumes, that an approval can have some continuing effect, even where the legal error was of the kind that affected the jurisdiction of the repository of the power. This construction facilitates access by members of the public to their entitlements to pharmaceutical benefits without the consequence that they may have obtained those pharmaceutical benefits in contravention of s 89 of the National Health Act, and ensures those pharmacists dispensing the benefits and obtaining subsidies under the PBS are not required to repay those subsidies to the Commonwealth. That effect is not just factual; it has a legal aspect as well, given the various limitations on access to pharmaceutical benefits contained in the National Health Act.

69    On the one hand, the second respondent wishes to rely on this approach in order to preserve the factual (and to some extent legal) effect of the Minister’s legally erroneous 1 November 2017 approval, so that the second respondent can continue to operate its pharmacy. Yet, on the other hand, the second respondent wishes to rely on the more absolute proposition in Bhardwaj, that a decision affected by jurisdictional error is “properly regarded, in law, as no decision at all”, with the consequence that the “duty” (to exercise the relevant statutory power, where there is one) remains unperformed.

70    Counsel for the second respondent contended that the Minister was able to (re)consider the second respondent’s request for approval under s 90A because, by reason of the Court’s judgment, he had not done so according to law and so the duty imposed on him remained unperformed. Counsel submitted that for that situation to exist, it was not necessary that there be an order setting aside the unlawful approval. The second respondent could, on this argument, continue to have the benefit of the (legally erroneous) 1 November 2017 approval, and also have its substitution application reconsidered. For this proposition, counsel relied on the reasons of Hayne J in Bhardwaj at [148]:

No less importantly, it must be recognised that, after the September decision, the respondent would have been entitled to mandamus compelling the Tribunal to perform its duty to review the decision made by the Minister’s delegate. Moreover, as the decision in R v War Pensions Entitlement Appeal Tribunal; Ex parte Bott reveals, mandamus would have been available even though no order quashing the September decision was sought or obtained. It would have been enough for the respondent to show “that the ostensible determination [of the Tribunal] is not a real performance of the duty imposed by law upon the tribunal”.

(Footnotes omitted.)

71    As Hayne J indicated in that passage, his Honour relied on what was said by Rich, Dixon and McTiernan JJ in R v War Pensions Entitlement Appeal Tribunal; Ex parte Bott [1933] HCA 30; 50 CLR 228 at 242-243. In Ex parte Bott, from 242-243, their Honours discussed the different circumstances in which a writ of mandamus would issue (for a failure “to comply with some requirement essential to [the] valid or effectual performance” of a statutory duty) and the circumstances in which certiorari would issue (for “some failure to proceed in the manner directed by law, or of some collateral defect or impropriety”). I am not persuaded the dicta from the judgment of Hayne J in Bhardwaj can be used to support the second respondent’s position.

72    In my opinion, the observations of Hayne J in Bhardwaj reflected the situation before the Court in that case, and were not intended to be universally or generally applicable. In Bhardwaj there had been no order setting aside the Tribunal’s first decision because the Tribunal had, in effect, recalled its own decision and re-exercised the power of review of its own motion. The question was whether it was lawfully able to do so. That very particular situation framed all of the observations made by the High Court in that case.

73    In contrast, in circumstances more akin to those in this proceeding, in Re Patterson; Ex parte Taylor [2001] HCA 51; 207 CLR 391, Gummow and Hayne JJ said at [196]:

In the absence of any evidence providing a further explanation of the reasons, or the parts of the reasons, for the respondent making her cancellation decision of 30 June, it is to be taken that she exercised her discretion under s 501(3) to cancel the prosecutor's transitional (permanent) visa on an erroneous footing. This is that, if she did cancel the visa, the legislation required there then to be given to the prosecutor, in terms of par 14 of the minute, “an opportunity to make representations seeking revocation of [that] decision”. The result of this misconception as to what the exercise of the statutory power entailed was that there was, in the meaning of the authorities, a purported but not a real exercise of the power conferred by s 501(3). On that footing, prohibition and certiorari properly lay.

(Emphasis added.)

74    Further, I consider the second respondent’s argument about there being no need to set aside a decision before remitting it to the repository of the power is inconsistent with its other argument that the approval has continuing effect. By this argument, the second respondent contends it is able to continue to derive all the benefits from the PBS notwithstanding the existence of an approval which is legally ineffective. Inherent in this argument must be that there has been some kind of “real performance” by the Minister of the exercise of power in s 90A(2).

75    As I have explained, how and whether the absolute propositions in Bhardwaj apply to a particular exercise of statutory power will always depend on the statutory framework involved, and the answers may well involve some complexity, including giving some legal effect to an exercise of power that is determined to have been unlawful. That is the theory of the law meeting the practice of administrative decision-making, where people rely on decision-making in a particular factual and legal context, and adjust their positions accordingly.

76    The bifurcation proposed by the second respondent between remitter and setting aside the 1 November 2017 approval is unworkable, and does not reflect the correct legal situation. The correct legal situation is that there has been an unlawful exercise of power on 1 November 2017 which, the Court has found, the scheme of the National Health Act intends will be treated as having continuing effect in fact, and some effect in law, until it is set aside by reason of the identified illegality. That may well be the basis on which the repayment provisions in s 99AA are avoided. However, there is no basis in the relevant provisions of the National Health Act, nor in the decisions to which I have referred about ascertaining the effect of unlawful exercises of a statutory power, to justify the proposition that once a Court has identified a material legal error (one which, at common law, would be characterised as jurisdictional error), the Court can or should permit the statutory power to be re-exercised notwithstanding that the factual and legal effect of the first exercise of power has not been set aside or quashed.

77    I have explained why I consider there is a sufficiently clear indication in the relevant provisions of the National Health Act that the Minister is obliged to proceed through to an exercise of the power in s 90A(2) (one way or the other), having made a positive decision under s 90B(4) to consider its exercise. That is a sufficient basis for the Court under the AD(JR) Act to make a remitter order: there remains something to be done by the Minister. Whether or not this fits neatly into the Bhardwaj language of a decision “properly regarded, in law, as no decision at all” and a duty “unperformed” does not matter for the purposes of the AD(JR) Act.

78    The AD(JR) Act addresses a variety of legal errors, some of which may affect jurisdiction and some which may not, and provides this Court with power to fashion appropriate remedies under s 16. That was, as Kenny J pointed out in Jadwan at [69]-[73], the purpose of the reforms introduced by this piece of legislation. Relevantly, her Honour stated (at [79]) that the remedies available under s 16 are “broader and more flexible than those available at common law”. Her Honour then cited an extract from the reasons of Sheppard and Wilcox JJ (Fox J agreeing) in the Full Court’s decision in Wattmaster Alco Pty Ltd v Button [1986] FCA 446; 13 FCR 253 at 256, which is worthwhile repeating:

Section 16(1) of the Administrative Decisions (Judicial Review) Act gives to the Court a wide discretion as to the orders appropriate to be made. The words “with effect from the date of the order or from such earlier or later date as the Court specifies”, in par (a), are, in our opinion, intended to do no more than to indicate that the Court has a choice from all the available possibilities: the date of the order, an earlier date or a later date. It is true that the effect of the language used is that it is unnecessary for the Court to specify a date, if it is intended that the decision will be quashed or set aside as from the date of the order, whereas specification is necessary in other cases; but specification of a particular date is, in the latter situation, in any event essential. By contrast, in the former situation, express specification is unnecessary; the relevant date appears on the face of the order itself. Neither, we think, is anything to be derived from the circumstance that “date of the order” is first mentioned; the probable explanation of that circumstance is ease of drafting.

Having in mind what is involved in “setting aside” or “quashing” (as to which see Commissioner for Railways v Cavanough (1935) 53 CLR 220 at 225) it may, at first sight, seem strange to speak of setting at naught a decision as at a particular date. However, it is consonant with the general scope and purpose of the Act and its varied application that there may be cases in which a decision is to be set aside, and, according to ordinary understanding, to become a nullity, but in which the nullifying should nevertheless take effect from some later date. The provision of such an option provides greater flexibility than is available with a writ of certiorari, which quashes a decision ab initio … The processes of the Court when granting relief under the Administrative Decisions (Judicial Review) Act are very wide and considerations going to the date as at which an order is to take effect quite naturally fit the general scheme.

79    This approach also sits comfortably with the following statement in Jadwan by Gray and Downes JJ (at [44]):

The earlier Full Court did not hold in terms that the decision to revoke Derwent Court’s approval as a nursing home was a nullity. Given that it was exercising jurisdiction under the ADJR Act, it was unnecessary for that Full Court to determine whether the error was jurisdictional or not. The grounds specified in s 5 of the ADJR Act, upon which the Court may make orders in respect of administrative decisions, are not expressed in terms of jurisdictional error. At least in some cases, those grounds include errors that are not necessarily described as jurisdictional errors. An example is the ground in s 5(1)(f), that the decision involved an error of law. See Re Minister for Immigration & Multicultural Affairs; Ex parte Applicant S20/2002 [2003] HCA 30 at [27] and [57] per McHugh and Gummow JJ. It might be thought that, in enacting s 16(1)(a) of the ADJR Act, which permits the Court to quash or set aside a decision with effect from the date of the order or from such earlier or later date as the Court specifies, parliament was acting on the assumption that even a decision tainted by jurisdictional error could have some force and effect, and leaving it to the Court to decide what force and effect should be accorded to such a decision. It must also be clear that, to the extent to which s 5 of the ADJR Act confers jurisdiction in respect of a ‘decision’, it was intended that there should be jurisdiction, whether or not the decision concerned was subject to jurisdictional error. See Australian Broadcasting Commission Staff Association v Bonner (1984) 2 FCR 561 at 566 per Morling J and Seventh Mingcourt Pty Ltd v Lawrence (1996) 64 FCR 367 at 375 per Branson J. Similar conclusions have been reached in cases concerned with merits review of a ‘decision’ for the purposes of other legislation in Collector of Customs (NSW) v Brian Lawlor Automotive Pty Ltd (1979) 24 ALR 307 at 313 – 315 per Bowen CJ and 331 – 337 per Smithers J, Secretary, Department of Social Security v Alvaro (1994) 50 FCR 213 at 218 – 219 per von Doussa J (Spender and French JJ agreeing) and, in relation to an appeal to the Court on a question of law from a ‘decision’ of the Administrative Appeals Tribunal, in Clements v Independent Advisory Committee [2003] FCAFC 143 at [36] – [40] per Gray ACJ and North J (Gyles J agreeing).

80    See also the observations made by Kenny J in Jadwan at [68].

81    Accordingly, there is no difficulty, under the AD(JR) Act, in the Court seeing it as appropriate, given the nature of the statutory scheme of the National Health Act to which I have referred above, to make orders setting aside the approval with effect from the date of the Court’s orders and not earlier, so as to preserve the efficacy in law, and not just in fact, of the 1 November 2017 approval to that point. That is precisely the kind of modification to the general law for which s 16 was intended. In my opinion, it is appropriate for the Court to expressly recognise that, notwithstanding the legal error affecting the Minister’s decision, the 1 November 2017 approval has both a factual and a legal effect until it is set aside by orders of this Court. It is only on that basis that the prohibitions and limitations in Divs 2 and 3 of Pt VII of the National Health Act concerning access to, and supply of, pharmaceutical benefits can be given effect. It is also only by giving some legal as well as factual effect to an unlawful approval until it is set aside that the repayment provisions in s 99AA may be avoided. That is so even though the error is one which would be characterised at common law as going to the jurisdiction of the Minister (and cf subss 5(1)(c) and (d) of the AD(JR) Act which identify errors of this nature in any event, and might well have been relied on here).

82    The better view in my opinion, adopting the approach in Project Blue Sky, is that Parliament intended approvals under s 90A (and also s 90) to be effective, in fact and in law, unless and until set aside by a court of competent jurisdiction. That is a premise on which the scheme set out in the National Health Act can effectively operate.

83    The power has been exercised, and an approval granted: it is one which is in force, being acted upon every day, and entitling members of the public to receive pharmaceutical benefits dispensed by the second respondent. If the Minister’s decision is affected by error, so that the approval should not stand because of that error (both of which are findings the Court has already made), then before there can be a further exercise of power, the current approval must be set aside. It must be deprived of its effect. The Court must send the question of the exercise of power back to the Minister for reconsideration, according to law. As I have noted, there may be some controversy at least in theory whether the Minister is obliged to decide how to exercise the power in 90A(2). I have decided the better view is that she or he is. The Court’s orders will not include a mandatory order against the Minister, but as these reasons have explained, they are made on the basis that, having decided to consider whether to exercise the power in s 90A(2), the Minister is obliged to see that process, lawfully, through to its conclusion. This is the kind of flexibility in the form of orders which is made available under s 16 of the AD(JR) Act: the Court is not restricted to orders in the nature of prerogative relief, nor to the legal principles governing the making of such orders.

84    Therefore, my conclusion is that the orders setting aside the Minister’s decision and remitting the matter to the Minister for further consideration should both be made in the same order, and take effect at the same time; or, technically, one immediately after the other.

Discretionary considerations as to the timing of the Court’s orders

85    Mr Yab’s affidavit evidence deposes to the considerable costs expended on establishing the pharmacy, in terms of fit-out costs, and then the considerable time it took for the pharmacy to break even after commencing trading. His evidence also goes into some detail about the way the pharmacy’s services have been accessed, such as the number of scripts filled by the pharmacy between particular hours and the number of customers who have been accessing the pharmacy outside the hours of 9am to 9pm. The affidavit evidence also sets out what are contended to be the consequences of the pharmacy having to close, referring to matters such as sales of PBS medicines in the area and access of customers to pharmaceutical benefits outside normal business hours, and the likely significant financial impact on the second respondent of having to close the pharmacy.

86    I accept that if the Minister’s approval is set aside with immediate effect on the making of the Court’s orders, the second respondent, through its principal, Mr Yab, will not be authorised to dispense the “drugs” and “medicinal preparations” which fall within the definition of “pharmaceutical benefits” in s 84 of the National Health Act from its premises, and claim a subsidy from the Commonwealth in doing so. The second respondent would not be prevented from dispensing PBS medicines, but would be prevented from claiming the subsidy, thus making them (I infer) more expensive for members of the public, as Jagot J explained in Sigma Pharmaceuticals (Australia) Pty Ltd v Wyeth [2018] FCA 1556; 136 IPR 8 at [64]:

A pharmacist may dispense products privately, that is, not through the PBS, even where the products are PBS listed. Prescription products which are not listed on the PBS are dispensed privately. If a pharmacist dispenses a product privately the patient bears the full purchase price of the product as no Commonwealth subsidy is paid under the PBS.

87    I accept that a significant proportion of the pharmacy’s revenue is obtained by the sale of PBS medicines, and therefore, as a consequence of the Minister’s approval being set aside, the second respondent may need to consider whether to continue operating the pharmacy, and if Mr Yab decides to close it, there may be significant economic loss. Although this evidence was untested, there is no objective reason to doubt it has substance. The applicant did not submit otherwise. I also accept Mr Yab’s evidence suggests there may be some loss of services in the area to the general public if the pharmacy closes, although I find the significance of the loss may be difficult to quantify because it is dependent on predictions of human behaviour. People may adapt to changed circumstances in a number of ways. I do not accept the situation would necessarily be as dire as Mr Yab’s evidence, and that of Dr Cunneen, paint it.

88    Mr Stambe’s affidavit does not suggest that his pharmacies could be an entire substitute for the services currently being provided 24 hours a day, seven days a week, by the second respondent’s pharmacy. Further, the evidence of Dr Cunneen is that he would cease to operate the Waverley Family HealthCare Medical Centre on a 24-hour basis if the second respondent were to lose its approval to supply pharmaceutical benefits. That is because, on Dr Cunneen’s evidence, the Medical Centre would not be able to provide the same level of service to its patients, nor the same level of support to local public hospitals, without access to the services of the second respondent’s pharmacy. I accept that is a possible flow-on consequence if the second respondent’s pharmacy ceases to supply pharmaceutical benefits, or closes, although I do not accept it is inevitable. For example, Dr Cunneen may choose to enter an arrangement with the applicant, so that the applicant’s pharmacies are in operation for longer hours. Again, what those who operate for commercial profit may do when faced with changed circumstances may be difficult to predict, at least without more evidence than is currently before the Court, and without that evidence being tested.

89    It would be possible to read the evidence adduced by the second respondent as doing no more than advancing the second respondent’s case for approval on remitter, or as an argumentative response to the Court’s decision, pointing out the adverse consequences of that decision at a practical level. If either of those purposes were the purposes of adducing the evidence, they would not be appropriate purposes and I would have rejected the reading of the affidavits. However, I accept the second respondent’s submission that the purpose of placing this evidence before the Court was to demonstrate that there may be real and significant consequences flowing from setting aside the Minister’s decision with immediate effect, because of the fact that the second respondent’s pharmacy has been trading since 5 March 2018. I have considered the evidence only on that basis.

90    The second respondent made a further submission that by reason of the operation of s 98(3)(a) of the National Health Act, read with s 90E, the second respondent was liable to have its approval cancelled if it did not commence trading. As I understand it, this submission was advanced to answer the applicant’s contention about the “risk” taken by the second respondent in going ahead and commencing to trade while the approval decision was subject to challenge.

91    Section 98(3) provides:

(3)    If the Secretary is satisfied that:

(a)    an approved pharmacist is not carrying on business as a pharmacist at premises in respect of which the pharmacist is approved; or

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

then the Secretary may (at his or her discretion), by notice in writing to the pharmacist, cancel the approval of the pharmacist under section 90.

92    I am not satisfied that this provision has quite the effect for which the second respondent contends. In circumstances where the Minister’s decision under s 90A(2) was under challenge by way of judicial review, it would be an unusual and somewhat unfair exercise of the discretion conferred by s 98(3) for the Secretary to cancel the newly granted approval. I doubt such conduct should be attributed to the Secretary as a likely course of conduct which would be taken in those circumstances. I give this matter no particular weight. It is correct to describe what the second respondent did as taking something of a commercial risk.

93    However, what is of more weight, in my opinion, is that the applicant did not seek a stay of the Minister’s decision to grant approval, or an injunction against the second respondent acting on the approval, at the time of issuing his judicial review application. The approval was in force and I have found it had lawful effect unless and until set aside. To that extent, even if it carried some risk, the second respondent was entitled to act on the approval. That is, I have found, how the scheme is intended to operate. It was the applicant’s responsibility to make an interlocutory application, if he sought to preserve the position of there being no approval in place to the second respondent to operate a pharmacy. Of course, the applicant would have needed to satisfy the usual tests for the grant of such interlocutory relief and establish that he had an arguable case, and where the balance of convenience lay (see, generally, in the context of applications for judicial review: Nyangatjatjara Aboriginal Corporation v Registrar of Aboriginal Corporations (No 2) [2006] FCA 675 (Besanko J); Dean-Willcocks v Companies Auditors and Liquidators Disciplinary Board [2006] FCA 555; 59 ACSR 698 (Tamberlin J); Northern Inland Council for the Environment Inc v Minister for the Environment, Heritage and Water [2013] FCA 993 (Griffiths J); Malu Lamar (Torres Strait Islander) Corporation RNTBC v Findlay (as delegate of the Protected Zone Joint Authority) [2018] FCA 801; 158 ALD 524 (Moshinsky J); Galaxy Day Care Pty Ltd v Secretary, Department of Education and Training [2018] FCA 1549 (Thawley J); Azaria Family Day Care Pty Ltd v Secretary, Department of Education and Training [2018] FCA 1640 (Wheelahan J)). The point is the applicant did not seek to do so.

94    In these circumstances, I consider it is appropriate to take into account Mr Yab’s evidence, and Dr Cunneen’s evidence, about the effects of the pharmacy losing its approval from the date of the Court’s final orders. I do not, however, accept the sense of inevitability which their evidence carries about all of the adverse consequences which would flow from the making of those orders. In my opinion, it is more appropriate to consider the adverse consequences as real possibilities, although there may well be practical and pragmatic compromises and solutions which could be found to alleviate the effect of some of those potential consequences. The Court has no evidence, for example, about the overall financial position of the second respondent, or Mr Yab as its controlling mind, or whether there may be commercial benefit, and feasibility, in allowing this particular pharmacy to operate without PBS subsidies for a short period of time while the Minister reconsiders the approval application.

95    I accept it is appropriate for the Court to consider, particularly in the circumstances of the affidavit evidence before it, how justice might best be served in the present circumstances. The applicant’s position is not prejudiced one way or another in terms of the form the Court’s orders take. The prejudice, if any, is to the second respondent, and on the evidence before the Court, possibly also to the Waverley Family HealthCare Medical Centre, its patients and those other members of the public who might seek to access the second respondent’s pharmacy outside the business hours of the other pharmacies operating in the area. However, I simply do not accept it is appropriate (or consistent with existing legal principle) for the Court to make a remitter order before it has set the decision aside.

96    Doing the best the Court can to reduce the possible adverse impacts described in the evidence of Mr Yab and Dr Cunneen, I consider it is appropriate for the Court to make orders that do not take effect for a period of two months from the date they are pronounced. On that date, the Minister’s decision will be set aside and there will be, on the same date, a remitter of the matter to the Minister for reconsideration according to law. That will give the second respondent an opportunity to prepare for a possible temporary closure of the pharmacy, or substantial adjustment to the nature of its operations, while its request for approval is reconsidered. It will give planning time to Dr Cunneen and the Waverley HealthCare Medical Centre, and it will give the second respondent and Dr Cunneen time to advise their patients of the possible lack of access to a 24-hour, seven day a week pharmacy for a period of time. It may also allow time for Dr Cunneen and the applicant to negotiate a solution to any shortage of pharmaceutical services.

97    I assume Dr Cunneen’s principal concern, based on his affidavit evidence, is access for his patients to pharmaceutical benefits, rather than from which pharmacy his patients obtain those pharmaceutical benefits.

98    The statutory scheme in s 90B of the National Health Act contemplates decisions will be made by the Minister in relatively short periods of time. The constraints in s 90D in terms of receiving information requested from persons such as the applicant, or other persons, all operate by reference to a period specified in the notice given to that person by the Minister at the time of making that request. Of course, the period specified in that notice cannot be legally unreasonable, but in circumstances such as this, I see no reason why it could not be a relatively short period. The applicant will be on notice from the time the Court makes its orders, and from a perusal of these reasons for judgment, that he needs to be astute to submit his comments, information or documents to the Minister in an efficient and timely fashion, so that a decision can be made as soon as reasonably practicable. The second respondent will be on notice about the need to efficiently participate in any reconsideration of its application for approval by the Minister.

99    It is a matter for the Minister what time frame the decision-making process should take place in, within the statutory constraints. In the present circumstances, the Minister can be taken to appreciate the need for timeliness in making a decision once the remitter order takes effect, given the affidavit evidence before the Court, but the timing of that decision-making will ultimately be for the Minister to decide.

100    Accordingly, I propose to make orders which will give all parties a two month period to make appropriate arrangements before the substantive aspects of the Court’s orders take effect. They will be as follows:

1. Pursuant to s 16(1)(a) of the Administrative Decisions (Judicial Review) Act 1977 (Cth), with effect from 9 am on 11 June 2019, set aside the decision of the first respondent made on 1 November 2017 approving the supply of pharmaceutical benefits by the second respondent from premises located at 58 and 60 Pinewood Drive and 399, 401 and 403 Blackburn Road, Mount Waverley in the State of Victoria.

2. Pursuant to s 16(1)(b) of the Administrative Decisions (Judicial Review) Act 1977 (Cth), with effect from 11 June 2019 and immediately after the order in paragraph 1 coming into force, the matter of the second respondent’s application dated 7 June 2017 for Ministerial approval under s 90A(2) of the National Health Act 1953 (Cth) to supply pharmaceutical benefits be remitted to the first respondent for further consideration according to law.

Costs

101    After the parties had put forward their respective written submissions on the form of final orders and costs, the parties filed proposed minutes of consent orders addressing the issue of costs. The proposed orders are as follows:

1. The First Respondent pay the Applicant’s costs of this proceeding fixed in the sum of $35,093.33.

2. The Second Respondent pay the Applicant’s costs of this proceeding fixed in the sum of $28,906.67.

102    As the second respondent’s written submissions noted, the division of the payment of the applicant’s costs between the Minister and the second respondent reflects an agreement made between those two parties. The amount proposed accords with the quantum of the “open offer” referred to in the second respondent’s written submissions and also appears to contain an acknowledgment on behalf of the applicant of the force of the second respondent’s submissions about the amount of costs initially sought by the applicant. It was correct for the applicant to recognise the amount of costs initially sought may have been excessive. There will be orders made in the form of the proposed minutes of consent orders as to costs.

Associate:

Dated:    10 April 2019