FEDERAL COURT OF AUSTRALIA
Choice Pharmacy Vincentia Pty Ltd v Australian Community Pharmacy Authority (No 2) [2020] FCA 363
ORDERS
DATE OF ORDER: | 18 March 2020 |
THE COURT ORDERS THAT:
1. Grounds 1, 2 and 2A of the amended originating application for judicial review have been established.
2. Pursuant to s 16(1)(a) of the Administrative Decisions (Judicial Review) Act 1977 (Cth) (ADJR Act):
(a) the recommendation made by the first respondent to the second respondent on 9 June 2017 to approve an application made by the third respondent pursuant to s 90 of the National Health Act 1953 (Cth) to supply pharmaceutical benefits from a medical centre located at 5 Halloran Street Vincentia in New South Wales (Application), and
(b) the decision to approve the Application made by the second respondent on 4 December 2017,
are set aside with effect from 8 April 2020.
3. Pursuant to s 16(1)(b) of the ADJR Act, upon Order 2 coming into effect, the Application be referred to the first and second respondents for further consideration according to law.
4. The third respondent pay the applicant’s costs as agreed or taxed.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
FARRELL J:
Introduction
1 On 11 February 2020, the Court delivered reasons in relation to a partial hearing of an amended originating application for judicial review filed by Choice Pharmacy Vincentia Pty Ltd (amended application). Choice Pharmacy sought judicial review of a decision of the Australian Community Pharmacy Authority to recommend to the Secretary of the Department of Health to approve an Application made by Vincentia MC Pharmacy Pty Ltd pursuant to s 90 of the National Health Act 1953 (Cth) to supply pharmaceutical benefits from a medical centre located at 5 Halloran Street Vincentia in New South Wales (Medical Centre). In the amended application, Choice Pharmacy sought orders setting aside the Authority’s recommendation and the Secretary’s decision to approve the Application: see Choice Pharmacy Vincentia Pty Ltd v Australian Community Pharmacy Authority [2020] FCA 93 (Reasons).
2 The Court ordered the parties to provide draft orders reflecting the Reasons in relation to grounds 1, 2 and 2A of the amended application and with respect to relief and costs. If the orders were not agreed, each party was to provide draft orders for which they contend and submissions supporting the party’s position. When judgment was delivered, the Court told the parties that if any party considered that the matters the subject of the submissions required an oral hearing, they should say so in their submissions.
3 The parties did not agree orders.
4 Choice Pharmacy provided draft orders with respect to relief and costs but no orders reflecting the Reasons. Choice Pharmacy addressed contentions made by MC Pharmacy in its submissions.
5 MC Pharmacy provided draft orders reflecting the Reasons but not in relation to relief and costs. MC Pharmacy submitted that:
(1) It wishes to appeal the Reasons and had sought to file a notice of appeal. However, it had been advised by Registry that it could not do so until the Court has made orders. Accordingly, all that was required was for the Court to make orders reflecting the Reasons; that is, to respond to the questions posed by Grounds 1, 2 and 2A of the amended application.
(2) Rule 30.02 of the Federal Court Rules 2011 (Cth) allows a party to apply to the Court for judgment or an order dismissing proceedings, but only where the “case stated” substantially disposes of the proceeding or renders any further trial of the proceeding unnecessary. MC Pharmacy submitted that that is not the present case.
(3) Paragraphs [3]-[11] of the amended application (referred to as ground 3) contain serious allegations which, in fairness, MC Pharmacy needs to have clearly addressed and disposed of. Further, whether the validity of the Secretary’s decision to approve the Application is infected by any invalidity of the Authority’s recommendation needs to be addressed, as no discrete grounds are raised in the amended application against the Secretary’s decision. Most importantly, there is a substantial question as to whether the Court should decline relief on a discretionary basis and issues of costs will turn on whether the Court decides whether to decline relief.
(4) In the absence of an appeal, the Court should make orders for the proper disposition of the remaining matters which would allow the parties to be heard on ground 3 and on the discretion to grant relief and costs. The submissions go on to say (at [3.3]-[3.4]):
3.3 … In particular, the Third Respondent seeks a reasonable opportunity to make written and oral submissions in relation to the discretion to claim relief, on the basis of delay, acquiescence, futility, unreasonable prejudice and disproportionate inconvenience and injustice.
3.4 However, as indicated above, the Third Defendant intends to file a notice of appeal from the order made by the Court that determine the case stated. For that reason, it is inappropriate for the Third Defendant to make submissions now on the remaining issues in the proceedings including relief, the discretion to decline relief and costs. If the Third Respondent did so, it would give the erroneous appearance that the Third Respondent acquiesces in the order reflecting the Judgment in the case stated.
(5) If the Court were to make an order by way of final relief quashing the Authority’s recommendation and the Secretary’s decision to approve the Application, it should do so from a date later than the date of the Court’s order pursuant to the power conferred under s 16(1)(a) of the Administrative Decisions (Judicial Review) Act 1977 (Cth) (ADJR Act), for instance, 21 days.
6 The Authority provided draft orders and submissions. The Authority said that it had no interest in the question of whether final orders setting aside the decisions under review should be made at this point in the proceeding, nor did it have any interest in whether, if such orders were made, those orders should be stayed. It accordingly made no submissions on those points.
7 The Authority submitted that it did have an interest in the form of any final orders, should they be made, because that is a question that, potentially, affects the administration of the National Health Act and the National Health (Australian Community Pharmacy Authority Rules) Determination 2011 (Cth) (ACPA Rules).
8 In particular, the Authority supported MC Pharmacy’s submission that any orders quashing the Authority’s recommendation and the Secretary’s decision to approve the Application take effect 21 days after the orders pursuant to s 16(1)(a) of the ADJR Act are made, relying on the decision in Jadwan Pty Ltd v Secretary, Department of Health and Aged Care [2003] FCAFC 288; 145 FCR 1 and Mortimer J’s discussion in a similar legislative context in Stambe v Minister for Health (No 2) [2019] FCA 479 at [32]-[100] (especially at [78]-[83]). The Authority supported MC Pharmacy’s contention that this form of relief avoids significant practical inconvenience and legal complexity that may arise if the relief operated to render the decisions under review void ab initio. The Authority submitted that the deferral of relief appropriately reflects the reality that MC Pharmacy and third parties have acted on the basis that MC Pharmacy had in fact obtained approval to supply pharmaceutical benefits from the Medical Centre.
9 The Authority noted that, at the substantive hearing, it made the following submissions with which no party then took issue:
(1) It did not seek any order for its costs in relation to the substantive proceeding, relying on Alexander v Australian Community Pharmacy Authority (No 3) [2010] FCA 506 at [8]; Assarapin v Australian Community Pharmacy Authority [2015] FCA 268 at [49]; and
(2) For the same reason, it should not be made to pay costs in the event that the decision is found to be affected by error, relying on Our Town FM Pty Ltd v Australian Broadcasting Tribunal (No 3) [1987] FCA 393; 77 ALR 609 at 612.
10 The Authority submitted that MC Pharmacy appeared as an active contradictor and the Authority’s propositions reflect its limited role in the proceedings so that no order for costs should be made against it. The Court notes that Choice Pharmacy appears to accept that position: see Choice Pharmacy’s submissions on relief and costs at [22].
Consideration
11 The Court does not accept MC Pharmacy’s submission that it is necessary to hear ground 3 of the amended application before making final orders on the basis that grounds 1, 2 and 2A have been established. It is true that ground 3 contains serious allegations. However, at the case management hearing which preceded the making of orders for a “partial hearing” limited to grounds 1, 2 and 2A, it was acknowledged by the legal representatives of all parties that the purpose of the “partial hearing” was to avoid the cost which would follow from the requirement for evidence and cross-examination of witnesses that entertainment of ground 3 would necessarily entail. At the case management hearing, Mr McDonald, counsel for MC Pharmacy, acknowledged that his client did not oppose the idea of determining certain questions before other issues in the matter and that ground 3 would be left until later “if and when we need to get to that”. All parties agreed that there was utility in that approach. Mr Flaherty, counsel for Choice Pharmacy, stated without demur from the representative of any other party that “the parties all agree that this will provide, if we’re successful, a clear outcome, and narrow the issues if we are unsuccessful”. That could only be right if Choice Pharmacy was successful on one or more of grounds 1, 2 or 2A with the result that it became unnecessary to hear ground 3.
12 Shortly after, the following exchange occurred, which determined the course that the proceedings then took:
MR McDONALD: Your Honour, could I perhaps suggest something which might be, hopefully, a practical way through which might be, rather than stating questions to identify issues by reference to the originating application. So your Honour might say that the issues raised by paragraphs 1, 2 and [2A] – that is, assuming the amendments made of the originating application be heard and determined separately and before other issues in the action – and I think that would then leave it to the parties to formulate, really, ultimately, just an argument and orders that should follow. But that will include any question about the order of consideration as well. Just avoid having to state any particular questions.
HER HONOUR: Do you have a problem with that, Mr Flaherty?
MR FLAHERTY: No, your Honour. We’re nailing our colours to the mast on this.
HER HONOUR: Yes.
MR FLAHERTY: We’re either going to be right or wrong.
…
HER HONOUR: Okay. Mr McDonald, I’m attracted to your course. Does the [A]uthority have any views one way or the other?
MR BLENCOWE: We’re comfortable with that. Yes.
13 As noted in the Reasons at [76], in both its written submissions in relation to the hearing of grounds 1, 2 and 2A and in submissions made by counsel at the hearing, Choice Pharmacy made clear that it sought the relief claimed in its amended application if it was successful on any of grounds 1, 2 or 2A. The Authority provided submissions on costs in its submissions relating to the partial hearing. MC Pharmacy provided no submissions on either relief or costs in relation to that hearing.
14 As noted above, when delivering the Reasons, the Court indicated to the parties that if any party sought a hearing on the orders reflecting the Reasons, relief and costs, they should say so in their written submissions. Neither Choice Pharmacy nor the Authority has done so. MC Pharmacy’s submissions do state that it is appropriate to have a hearing in relation to ground 3, relief and costs, but it has indicated that in the absence of a hearing on all outstanding issues, it considers it inappropriate to make submissions as to relief and costs because “it would give the erroneous appearance that [MC Pharmacy] acquiesces in the order reflecting the Judgment in the case stated”.
15 While the Court considers that MC Pharmacy’s rationale for not providing submissions as to relief and costs is misconceived, it has had the opportunity to put its submissions on relief and costs (including as to the impact of any claimed delay, acquiescence, futility, unreasonable prejudice, disproportionate inconvenience and injustice) and it has declined to do so.
16 In the Court’s view, relief and costs should follow from the Court’s finding that Choice Pharmacy established grounds 1, 2 and 2A of its amended application. To now hear ground 3 would defeat the purpose of the partial hearing.
17 Choice Pharmacy correctly observes that MC Pharmacy has not previously raised any submission that the Secretary’s decision to grant approval of its Application could stand where the Authority’s decision to recommend approval is found not to be valid. MC Pharmacy has not cited any authority to support such a proposition. The Court notes that in Pharmacy Guild of Australia v Australian Community Pharmacy Authority [1996] FCA 1007; 70 FCR 462, Branson J made orders setting aside the Secretary’s decision after quashing the Authority’s recommendation because the Authority took into account irrelevant considerations. In Kastrinakis v Australian Community Pharmacy Authority [2013] FCA 995; 215 FCR 452, Davies J made similar orders after finding that the “minimum distance requirement” in Item 130 of Pt 2 of Sch 1 of the ACPA Rules was a jurisdictional fact. The Court considers that this is the appropriate approach, even though, as a formal matter, the amended application did not have a ground which specifically sought judicial review of the Secretary’s decision while there was a ground seeking such a review in both of these cited cases. Choice Pharmacy’s amended application did seek orders that the Secretary’s approval of MC Pharmacy’s Application be set aside, and the reasoning in both of the cited cases did not focus on the Secretary’s decision; the relief in the cited cases flowed from the error in the Authority’s decision to recommend approval which vitiated its validity. That is consistent with the scheme of s 90 of the National Health Act.
Conclusion
18 In summary, the Court finds that grounds 1, 2 and 2A of the amended application have been established on the basis set out in the Reasons, the Authority’s decision to recommend approval of MC Pharmacy’s Application to the Secretary and the Secretary’s decision to approve the Application should be set aside and the Application remitted to the Authority and the Secretary for further consideration according to law. MC Pharmacy should pay Choice Pharmacy’s costs as agreed or taxed. Having regard to submissions made by the Authority and Choice Pharmacy, no order as to costs should be made with respect to the Authority.
I certify that the preceding eighteen (18) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Farrell. |
Associate:
