Federal Court of Australia

Jele Chemists Pty Ltd v Australian Community Pharmacy Authority [2022] FCA 1445

ORDERS

THE COURT ORDERS THAT:

1.    The interlocutory application, filed by the applicants on 25 November 2022, be dismissed.

2.    The applicants pay the costs of the second respondent and the Secretary, Department of Health, of and incidental to the interlocutory application, such costs to be taxed if not otherwise agreed.

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

REASONS FOR JUDGMENT

COLLIER J

1    Before the Court is an interlocutory application filed by the first and second applicants (applicants) on 25 November 2022. By that interlocutory application, the applicants seek the following relief:

1.    The Secretary, Department of Health, be joined as a respondent to this proceeding.

2.    That until further order, the Secretary, Department of Health, be restrained from approving the second respondent’s application made pursuant to s90 of the National Health Act 1953 (Cth) dated 20 April 2022 for approval to supply pharmaceutical benefits from premises situated at Tenancy 1, 662-670 Greenwattle Street, Harristown Queensland 4350.

3.    That the second respondent and the Secretary, Department of Health, pay the applicants’ costs of and incidental to this application.

4.    Such orders the Court deems fit.

background

2    The substantive proceeding was commenced by the applicants’ originating application filed on 29 August 2022. In that originating application, the applicants sought review under s 5 of the Administrative Decision (Judicial Review) Act 1977 (Cth) (ADJR Act) of the decision of the first respondent made on 15 July 2022. In that decision, the first respondent resolved to recommend the approval to the Secretary, Department of Health (Secretary) of an application under Item 130 of Schedule 1 to the National Health (Australian Community Pharmacy Authority Rules) Determination 2018 (Cth) (Rules) to supply pharmaceutical benefits at Tenancy 1, 662-670 Greenwattle Street, Harristown Queensland 4350. The application to supply pharmaceutical benefits at this address was made by the second respondent.

3    On 11 October 2022, the Federal Minister for Health approved the first applicant’s application to supply pharmaceutical benefits at Shop 2, Glenvale Shopping Centre, Toowoomba Queensland 4350.

4    The applicants asserted, at the time of filing of their interlocutory application, that a decision by the Secretary referable to the approval of the second respondent’s application to provide to supply pharmaceutical benefits at Tenancy 1, 662-670 Greenwattle Street was imminent. Consequently, this interlocutory application was referred to me in my capacity as Duty Judge for the week commencing 28 November 2022.

5    Although the originating application for judicial review pleads numerous grounds, the only ground of review on which the applicants relied for the purposes of the present interlocutory application was the following:

1.    The Decision involved an error of law (ADJR Act, s5(1)(f)), in that that:

a.    at all relevant times the Proposed Premises could not be used for the operation of a pharmacy under applicable local government and State or Territory laws relating to land development in accordance with the requirements of s10(3)(c) the Rules;

6    I note that, although in their interlocutory application the applicants sought joinder of the Secretary, it was common ground that should the interlocutory application be granted the Secretary should be joined, and equally if it were refused the Secretary should not be joined.

7    It follows that the only issue of substance for determination as matters presently stand is whether the interlocutory injunction should be granted.

Applicants’ submisisons

8    In support of their interlocutory application, the applicants relied on the affidavits of Mr Jason Arash Tavakol and Mr Navin Bakshi sworn on 24 November 2022 and 25 November 2022 respectively. Mr Tavakol is a director of the first applicant, and Mr Bakshi is a director of the second applicant.

9    Mr Tavakol gives evidence of his belief that approval by the Secretary of the second respondent’s application to supply pharmaceutical benefits is imminent, and that the shopping centre in which the second respondent intends to do so will shortly open. Mr Tavakol’s concerns referable to this state of affairs, which he raises in support of the interlocutory application, are as follows:

26.    I believe that if Glenvale commences trading at the Glenvale Premises with PBS approval the impact on Jele and Jele’s Premises will be immediate and significant for the following reasons:

a.    The suburb of Glenvale currently has no pharmacy;

b.    If Glenvale is allowed to open the Glenvale Premises with PBS approval, Glenvale will have the opportunity to secure and lock in patients prior to Jele opening the Jele Premises;

c.    The Glenvale Premises is within 200 metres in a straight line (as determined in accordance with the Rules) to the Jele Premises; and

d.    I estimate that Jele would experience a 50% reduction to sales and bottom line if Glenvale is entitled to open the Glenvale Premises with PBS approval.

10    Mr Tavakol’s primary concern appears to be that the second applicant, in the event approval is granted, will commence trading in mid-December 2022 once they have completed a fit-out of the relevant premises. In contrast, the first applicant will be unable to commence trading until February 2023, when the fit-out of its proposed premises is likely to be completed. It is from this inability to trade until February 2023 that the second applicant contends the impact outlined above will stem.

11    Mr Tavakol also indicated, in his affidavit, that he is willing to give the relevant undertaking as to damages in the event that the interlocutory application is successful.

12    Mr Bakshi’s affidavit consisted of four paragraphs. In that affidavit, he broadly supported the evidence of Mr Tavakol.

13    In the context of whether or not there is a serious question to be tried in these proceedings, the applicants submitted the second respondent’s application to provide pharmaceutical benefits did not adhere to r 10(3)(c) of the Rules, on the following basis:

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

(b)     Between 1 November 2021 and 19 November 2021, the Development Application was impact assessable and public notification of the Development Application was undertaken.

(c)    Four submissions were made to the Council during the public notification phase objecting to the Development Application (each of these submitters being referred to as a Principal Submitter).

(d)    On 1 April 2022, the Council issued its Decision Notice approving the Development Application, subject to conditions. We refer to section 22.2(a) of the Development Assessment Rules which provides that this approval does not constitute a development permit that permits the use of Glenvale’s Premises for the proposed medical centre and pharmacy.

(e)     On 14 April 2022, the Council issued letters to each of the principal submitters attaching a copy of the Decision Notice and advising of the appeal rights.

(f)    Section 229(3)(g) of the Planning Act 2016 (Qld) states that certain applicants (e.g. a Principal Submitter) can appeal the decision made by the Council to approve the Development Application. The appeal period is 20 business days after a Decision Notice is served on that party. The appeal period in respect of the Council’s decision to approve the Development Application ended on 17 May 2022.

(g)     Section 71 of the Planning Act 2016 (Qld) sets out when a development approval has effect and provides that:

"(1) Generally, a development approval starts to have effect when the approval is given, or taken to have been given, to the applicant. (2) However— (a) if an appeal about the approval is started, and subject to the outcome of the appeal—the approval starts to have effect when the appeal ends; …”

(h)     On 10 May 2022, an appeal was lodged by a Principal Submitter with the Planning and Environment Court against the Council’s decision to approve the Development Application (Appeal).

(i)     The Appeal concluded on 9 June 2022, being the date on which His Honour Judge Williamson made final orders in the Appeal.

(j)     For the reasons set out above, the Council’s decision to approve the Development Application could not and did not come into effect until 9 June 2022 and, as such, Application QA2773 did not comply with rule 10(3)(c) at all relevant times.

14    In the context of these submissions, the applicants contend that an approval may only be recommended by the first respondent in the event that the conditions in r 10(3)(c) of the Rules are satisfied. As this has not occurred, in the sequence of events as provided by the applicant and to which I have already referred, the applicants contend that the first respondent erred as a matter of law by making a recommendation to the Secretary to approve the second respondent’s application.

15    The applicants further submitted that the balance of convenience favoured them, in summary for reasons to which Mr Tavakol adverted in his evidence.

Second respondent’s submissions

16    The second respondent submitted that, in the context of ground 1(a) of the originating application, the applicants did not demonstrate a prima facie against the respondents supporting the interlocutory relief sought. This was because, in summary, the applicants conflate judicial review with merits review. More specifically, under r 10(3)(c) of the Rules the first respondent need only be satisfied that the proposed premises could be used for the operation of a pharmacy under relevant regulations. Satisfaction in these sense is a highly subjective concept, and cannot easily be disproved: Hallgath v Australian Community Pharmacy Authority [2011] FCA 1062.

17    Turning to the balance of convenience, the second respondent submitted that it weighed in favour of dismissing the interlocutory application. In particular the second respondent submitted that the applicants had been aware of the second respondent’s application and intention to open a pharmacy for some time, yet had been slow to commence proceedings. The second respondent further submitted, in summary :

    The damage the first applicant asserts it will suffer in the event an injunction is not granted is highly speculative, and it was fanciful to suggest customers would be “locked in”. The first applicant’s proposed premises was currently operating as a hairdresser, and therefore the “estimated 50% decline” in its business could not be calculated referable to a business that had not commenced trading;

    The approval granted to the first applicant occurred in full knowledge of the recommendation that the second respondent’s application would similarly be approved; and

    There was doubt as to whether the applicants would actually open pharmacies in the event the substantive proceeding was dismissed.

consideration

18    The law regarding a grant of an interlocutory injunction is well-settled. In Australian Broadcasting Corporation v O’Neill [2006] HCA 46; (2006) 227 CLR 57, Gleeson CJ and Crennan J observed at [19] that

…In all applications for an interlocutory injunction, a court will ask whether the plaintiff has shown that there is a serious question to be tried as to the plaintiff’s entitlement to relief, has shown that the plaintiff is likely to suffer injury for which damages will not be an adequate remedy, and has shown that the balance of convenience favours the granting of an injunction.

(see also Gummow and Hayne JJ at [65])

19    I am not satisfied that the interlocutory injunctive relief sought by the applicants should be granted. This is primarily because I am not satisfied that, in ground 1(a) as pleaded by the applicants, the applicants have demonstrated that there is a serious question to be tried. As the second respondent correctly identified, that ground seeks to conflate merits review with judicial review, the former being impermissible.

20    That this is so is plainly demonstrated by reference to r 10(3) of the Rules. Under r 10(3)(c) the first respondent need only be satisfied that proposed premises could be used for the operation of a pharmacy under relevant regulations. Satisfaction in this sense is a highly subjective concept, and cannot easily be disproved.

21    The relevant regulations in this case were, as the applicant submitted, under the Planning Act 2016 (Qld)(Planning Act), in particular s 71 which relevantly provides:

When development approval has effect

71 WHEN DEVELOPMENT APPROVAL HAS EFFECT

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

(2)    However –

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

22    Notwithstanding the submission of the applicants that the decision of the first respondent was affected by error of law because of some alleged failure of the first respondent to take into account s 71 of the Planning Act, this does not mean that the decision of the first respondent was affected by an “error of law” within the meaning of s 5(1)(f) of the ADJR Act.

23    As Logan J noted in Hallgath at [9]:

That does not mean that such decisions which are made by reference to such a criterion are unexaminable on judicial review. It does though mean that the grounds of review which relate to this particular aspect of the Authority's recommendation decision will not be met if there was some evidence before the Authority which was reasonably probative of the state of satisfaction which the Authority voiced in its reasons.

(emphasis added)

24    The applicants were not able to point to any evidence to demonstrate that the first respondent, in being satisfied for the purposes of r 10(3)(c) of the Rules, did not give proper consideration to all of the materials before it, or that those materials were not probative.

25    At the hearing Mr Gunson SC for the applicants further submitted that s 5(1)(f) of the ADJR Act encompassed a broader range of errors of law than those which gave rise to jurisdictional error. However, even if there were errors of fact in the decision of the first respondent, this does not necessarily mean that such alleged errors were errors of law as distinct from errors of fact such as to enliven s 5(1)(f) of the ADJR Act. As Jagot J explained in Rawson Finances Pty Ltd v Commissioner of Taxation [2013] FCAFC 26:

84.    The distinction between evidence or material which could support a factual finding and evidence or material which should or should not have supported such a finding is fundamental to the exercise of jurisdiction which is limited to questions of law. When courts refer to there being “no probative” evidence to support a finding or a finding not being “reasonably open” or “open” on the evidence (as in Australian Broadcasting Tribunal v Bond at 359-360) or it being necessary that a finding be based on “some probative material or logical grounds” and that a finding not be “completely arbitrary” (as in Australian Broadcasting Tribunal v Bond at 366 and 367, Kostas v HIA Insurance Services Pty Ltd at [16], Minister for Immigration and Multicultural Affairs v Eshetu (1999) 197 CLR 611; [1999] HCA 21 at [145] and Minister for Immigration and Multicultural and Indigenous Affairs v SGLB (2004) 78 ALD 224; [2004] HCA 32 at [38]) the courts are not inviting consideration of whether a finding should or should not have been made. They are considering the anterior question whether the evidence reasonably admitted the making of the finding; that is, whether the evidence could support the finding. Hence, if there is no probative evidence of a fact and no logical grounds to support the fact, the finding of that fact will involve error of law. But where there is some probative evidence of a fact and some logical ground to support the fact, the finding of that fact will not involve error of law. The formula “some probative material or logical grounds” does not convert questions of fact into questions of law.

(emphasis added)

26    (See also for example Foster J in SPI Electricity Pty Ltd v Australian Energy Regulator [2014] FCA 1012 at [72]).

27    Earlier, in Minister for Immigration & Ethnic Affairs v Guo (1997) 191 CLR 559; [1997] HCA 22, a decision of the High Court examining an application pursuant to s 5(1)(f) of the ADJR Act, their Honours relevantly observed at 594-595:

In this way, both on the Minister's appeal and the respondents' defence of the Full Court's decision, the matter eventually comes down to the question whether an error of law is shown in the approach of the Tribunal to the performance of its statutory function. This was the way that Beaumont J approached the matter. He upheld the contention.

The applicable principles are not in doubt. The question whether facts, as accepted by a primary decision-maker, fall within or outside a statutory provision is itself a question of law. Whether a primary decision-maker has accurately considered and applied the relevant law may also present a question of law. If it appears that a donee of statutory powers is labouring under a misapprehension as to the requirements attaching to their exercise, it is the reality, and not the appearances, which matters. In Sinclair v Maryborough Mining Warden, Gibbs J explained:

"[It] appears from these reasons that in making his recommendation the warden was labouring under a misconception as to his duty, so that he did not apply himself to all the matters that the regulations required him to consider. There was thus a purported but not a real exercise of his functions and he has failed to perform his duty according to law".

Such questions are usually expressed in terms of whether the decision-maker "really" or "genuinely" or "truly" considered the matters essential to the exercise of the power invoked. But such adverbs add little or nothing to the legal requirement unless they help to emphasise that the judge, reviewing the decision which is impugned, must look beyond the inclusion in the reasons of the decision-maker of the relevant statutory provisions, the citation of relevant authority or the assertion that these have been taken into account. The judge must assess whether a real, as distinct from a purported, exercise of the power has occurred. Where it has not, there is a constructive failure to exercise jurisdiction which will constitute an error of law authorising the provision of relief.

In the present case, Beaumont J asked himself "Did the Tribunal really address the correct legal question?" He considered that the issue was "a difficult one". He concluded:

"[To] adopt the language used in Sinclair, although the Tribunal may have purported to address this question, it did not really do so, with the consequence, I think, that there was a constructive failure by the Tribunal to exercise its jurisdiction".

(footnotes omitted, emphasis added)

28    In summary, for the purposes of the interlocutory relief sought by the applicants, any alleged error of the first respondent as pleaded in ground 1(a) could not be said to be an error of law such as to give rise to a serious question to be tried at this interlocutory stage.

29    However, even if I am wrong in finding that a serious question to be tried did not arise, I am not satisfied that the balance of convenience favours the applicants. Evidence currently before the Court, in particular in the affidavits of Ms Kristine Hall, sworn on 28 November 2022, and the affidavit of Mr Tavakol shows that, inter alia:

    The relevant premises of the first and second applicants presently operate as a hairdresser and a pizza shop respectively (in other words, plainly not pharmacies);

    It would appear that minimal fit-out of the applicants’ premises has occurred to date;

    As matters stand, it is unlikely that the applicants would be in a position to commence trading until February 2023; and

    In contrast, the fit-out of the premises of the second respondent is well-advanced such that it would apparently experience detriment in the event that it was restrained from trading.

30    Further, I am not persuaded that, as the applicant’s contended, allowing the second respondent to begin trading would somehow “lock up” 50 per cent of its potential client base. It is also impossible to quantify the damage to the first applicant’s business, which is not yet trading as a pharmacy.

conclusion

31    The applicants’ interlocutory application should be dismissed.

32    The remaining issue concerns costs. Ordinarily, costs follow the event. There appears to be no dispute concerning the prospect of the applicants being liable for the costs of the second respondent in the event that the applicants were unsuccessful. At the hearing however, dispute emerged between the parties in respect of any costs order against the applicants for the costs of the Secretary, in summary because the Secretary had made a submitting appearance and the applicants conceded that they would not be in a position to seek costs against the Secretary if their interlocutory application was successful.

33    I am satisfied that the Secretary is entitled to their costs. Although the Secretary in substance made a submitting appearance, they also were essentially required to participate in and instruct lawyers in respect of this interlocutory proceeding, which has been dismissed. I also consider that the participation of the Secretary was of assistance to the parties (as made plain by submissions of the applicants at the hearing) as well as the Court. In such circumstances, I consider s 43 of the Federal Court of Australia Act 1976 (Cth) supports an exercise of discretion by the Court to order costs against the applicants in favour of the Secretary.

Associate:

Dated:    30 November 2022