Federal Court of Australia

NTMA Pharmaceuticals Pty Ltd v Beardmore [2025] FCA 1036

ORDERS

THE COURT ORDERS THAT:

1.    The further amended originating application is dismissed.

2.    The applicants are to pay the sixth respondent’s costs as agreed or assessed.

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

REASONS FOR JUDGMENT

PERRY J:

1.    INTRODUCTION

1    This is an application for judicial review made under s 39B(1) and (1A) of the Judiciary Act 1903 (Cth). The first to fifth respondents are members of the Pharmaceutical Services Federal Committee of Inquiry, which is a committee established by the Minister under s 113 of the National Health Act 1953 (Cth). They did not play any active role in the proceeding, submitting to any order of the Court including as to costs. As s 114 of the Act stipulates, the functions of the Committee are to inquire into, and report on, the conduct of pharmacists approved to supply medicines under the Pharmaceutical Benefits Scheme (PBS). The sixth respondent is the Commonwealth of Australia.

2    The applicants, NTMA Pharmaceuticals Pty Ltd, United Wellness Pty Ltd, PL Pharmaceuticals Pty Ltd, and DDS Greystanes Pty Ltd, are corporations registered as pharmaceutical chemists, and therefore “pharmacist[s]” for the purposes of s 4(1) of the Act.

3    On 26 February 2024, the Secretary of the Department of Health and Aged Care issued a single referral pursuant to s 114 of the Act to the Committee to inquire into, and report on, various matters in connection with the supply of pharmaceutical benefits under Part VII of the Act at specific premises where NTMA, United and PL then traded and other premises with which named individuals were associated (the February Referral). On the same day, the Secretary purportedly terminated or revoked separate referrals previously made on 13 July 2023 with respect to the supply of pharmaceutical benefits from the premises operated by United and PL (the 2023 United and PL Referrals). Subsequently, on or about 19 November 2024, NTMA, United and PL were each served with a copy of the February Referral.

4    Relevantly, at the time of the February Referral, the applicants operated pharmacies which held approvals under s 90 of the Act as follows:

(1)    NTMA trading as “Priceline Pharmacy Blacktown” at Shop 1007, Westpoint Shopping Centre, Patrick Street Blacktown, NSW 2148 (Blacktown Pharmacy) which held, and continues to hold, the pharmacist approval no. 16420R for these premises;

(2)    United trading as “Priceline Pharmacy Merrylands” at Shop 1090, Stockland Merrylands, 1 McFarlane Street, Merrylands NSW 2160 (Merrylands Pharmacy) which held, and continues to hold, approval no. 16157J for these premises; and

(3)    PL trading as “Discount Pharmacy Greystanes” at Shop 20A, Woolworths Greystanes, 665-669 Merrylands Road, Greystanes, NSW, 2145 (Greystanes Pharmacy) which then held approval no. 16493C for these premises.

5    The February Referral arose from concerns that NTMA, United and PL may have been “utilising common patients to process PBS claims without supply and showing other serious compliance behaviours such as swapping and excessive discounting”. The February Referral was issued in accordance with recommendations made in Pharmacy Compliance Evaluation Reports prepared by the Department in relation to: Blacktown Pharmacy on 3 March 2023; Merrylands Pharmacy on 26 May 2023; and Greystanes Pharmacy on 17 March 2023. Relevantly for present purposes, although NTMA and United continue to hold an approval under the Act, PL has not possessed an approval since around 17 May 2024 when PL cancelled its approval.

6    DDS is the subject of a separate but related referral to the Committee. Specifically, on 19 August 2024, the Secretary issued a similar referral pursuant to s 114 of the Act to investigate matters concerning DDS following the transfer of the Greystanes Pharmacy from PL to DDS (the August Referral). The August Referral was issued in accordance with recommendations made in a separate Evaluation Report of 18 July 2024. DDS continues to hold an approval number.

7    Subsequently, on 6 June 2025, the solicitors for the Committee wrote to the applicants’ solicitors, advising that:

The Committee’s inquiry will examine [DDS’s] conduct from 17 May 2024 onwards, being the date [DDS] became approved to supply PBS subsidised medicines under the National Health Act 1953 (Cth). We are instructed that no other approved pharmacists are the subject of this inquiry.

Further, in response to the concerns raised in your letter, we are instructed to confirm that the Committee does not intend to examine any earlier conduct that has occurred at the relevant premises before 17 May 2024, unless such conduct has a bearing on the conduct of the Approved Pharmacist. You will be notified if any earlier conduct does become relevant.

8    Against this background, the further amended originating application raises four issues:

(1)    whether the February Referral (described by the applicants as an “omnibus” investigation) is void or invalid because it concerns the services or conduct of NTMA, PL and United, as opposed to the conduct of a single approved pharmacist;

(2)    whether the Committee can continue to inquire into the past services or conduct of PL, even though PL ceased to hold an approval to supply medicines under the PBS after the February Referral was made;

(3)    whether the February and August Referrals are void for uncertainty because, in addition to referring to the applicants’ pharmacies, they refer more generally to “Other premises” with which specified persons are “associated, if any”; and

(4)    whether there was power to revoke or terminate the earlier, separate 2023 United and PL Referrals.

9    In terms of relief, the applicants seek an injunction restraining the respondents “from taking any further step in connection with, or in reliance upon, the February Referral and the August Referral”. The applicants also seek declarations that:

a.    one or more of the Applicants may be prejudiced or embarrassed by the Committee proceeding in respect of more than one Approved Pharmacist in the One Inquiry in connection with the February Referral;

b.    the Committee has no power to proceed in respect of Greystanes Pharmacy in respect of the February Referral, the Approved Pharmacist identified in connection with it (and having been served with that Referral), having ceased to be such;

…

d.    the February Referral and the August Referral are beyond power being void for uncertainty;

e.    the Termination or Revocation Decisions are invalid and of no effect;

10    It is common ground that in order to succeed, the applicants must establish jurisdictional error and that the onus to do so lies upon them.

11    For the reasons set out below, no error has been established and the application must be dismissed with costs.

2.    LEGISLATIVE CONTEXT AND PRINCIPLES OF STATUTORY CONSTRUCTION

12    The issues raised in the application for judicial review largely turn upon questions of statutory construction. The relevant principles are well-established and were not in issue. As McHugh, Gummow, Kirby and Hayne JJ explained in Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355 at [69]:

The primary object of statutory construction is to construe the relevant provision so that it is consistent with the language and purpose of all the provisions of the statute. The meaning of the provision must be determined “by reference to the language of the instrument viewed as a whole”. In Commissioner for Railways (NSW) v Agalianos [(1955) 92 CLR 390 at 397], Dixon CJ pointed out that “the context, the general purpose and policy of a provision and its consistency and fairness are surer guides to its meaning than the logic with which it is constructed”. Thus, the process of construction must always begin by examining the context of the provision that is being construed.

(Citations omitted.)

13    The importance of commencing with the text in its statutory context was also emphasised by Kiefel CJ, Nettle and Gordon JJ in SZTAL v Minister for Immigration and Border Protection [2017] HCA 34; (2017) 262 CLR 362 in the following passage (at [14]):

The starting point for the ascertainment of the meaning of a statutory provision is the text of the statute whilst, at the same time, regard is had to its context and purpose [citing Project Blue Sky with approval]. Context should be regarded at this first stage and not at some later stage and it should be regarded in its widest sense. This is not to deny the importance of the natural and ordinary meaning of a word, namely how it is ordinarily understood in discourse, to the process of construction. Considerations of context and purpose simply recognise that, understood in its statutory, historical or other context, some other meaning of a word may be suggested, and so too, if its ordinary meaning is not consistent with the statutory purpose, that meaning must be rejected.

(Citations omitted.)

14    Turning then to the relevant statutory scheme, Division 2 (ss 85-98AC) of Pt VII of the Act deals with the “Supply of pharmaceutical benefits”. Section 90(1) of the Act confers power on the Secretary, upon application by a pharmacist, to grant approval for the pharmacist to supply pharmaceutical benefits at particular premises. A pharmacist is defined in s 4(1) of the Act to include a corporation carrying on business as a pharmacist such as the applicants. An approval requires the pharmacist to supply certain drugs at set prices to consumers offset by a Commonwealth subsidy. (I note, however, that while an approval is necessary for a pharmacist to supply medicines and receive the subsidy payments under the PBS, an approval is not necessary for a person to carry on business as a pharmacist.)

15    Thus, s 86 of the Act provides that a person receiving certain kinds of medical treatment is entitled to receive pharmaceutical benefits “without the payment or provision of money or other consideration other than a charge made in accordance with section 87”. Section 89 in turn provides that a person is not entitled to receive a pharmaceutical benefit unless, relevantly, it is supplied by an “approved pharmacist” at or from premises in respect of which the pharmacist is for the time being approved, on presentation of a prescription from a PBS prescriber. Subject to certain conditions, s 99 in Div 3 of Part VII relevantly provides that an approved pharmacist who supplies pharmaceutical benefits is entitled to be paid by the Commonwealth by reference to the price of the pharmaceutical benefit. In short, as explained in Choice Pharmacy Vincentia Pty Ltd v Australian Community Pharmacy Authority [2020] FCA 93 at [19] (in a passage approved by Perry and Stewart JJ on appeal in Vincentia MC Pharmacy Pty Ltd v Australian Community Pharmacy Authority [2020] FCAFC 163; (2020) 280 FCR 397 at [7]):

[P]harmaceutical benefits facilitate the supply of pharmaceutical products to consumers at a reduced price, subsidised under the Pharmaceutical Benefits Scheme (PBS). While a pharmacist (and therefore a pharmacy) can supply pharmaceutical products without approval by the Secretary, a pharmacy cannot supply pharmaceutical benefits without that approval.

16    Part VIII of the Act concerns “Committees of Inquiry”. Relevantly, s 113 of the Act empowers the Minister to establish a committee and provides that the Committee “shall consist” of the Secretary (or an officer of the Department who is a medical practitioner or pharmacist appointed in their stead) and four pharmacists appointed by the Minister. Members of the Committee do not hold their appointments for a term, but subject to “the Minister’s pleasure”: see s 113 read together with s 119(1) of the Act. The principal function of the Committee is identified in s 114 of the Act, namely, that the Committee:

inquire into and report to the Minister or the Secretary on any matter referred to the Committee by the Minister or the Secretary in respect of or arising out of the services or conduct of approved pharmacists in connection with the supply of pharmaceutical benefits under Part VII.

17    Importantly, as I later explain, s 114 confers a broad power to make a referral and does not limit the subject matter of a referral to the Committee to disciplinary matters.

18    Save (by reason of s 125(7)) in cases where the matter referred to the Committee concerns the conduct of approved pharmacists “generally or in a class of cases”, s 125 of the Act provides that the Committee must give at least 10 days’ notice of its intention to hold an inquiry, and afford the pharmacist concerned an opportunity to call evidence, examine witnesses, and make submissions. In this regard, I consider that the word “inquiry” in s 125 is clearly intended to refer to a process commenced by a hearing, as opposed to the start of an investigation which may precede the inquiry. Textual and contextual considerations supporting this construction are:

(1)    s 125(1) of the Act refers to notice of “an inquiry” to be held at a “time and place”;

(2)    s 125(2) empowers the Committee to “meet and examine any written evidence or allegation” before causing notice of the “inquiry” to be given to any person;

(3)    sub-ss 125(4) and 125(5) provide an approved pharmacist with an opportunity to give evidence and make submissions unless they fail to attend at the “time and place” of the inquiry; and

(4)    s 125(6) extends the meaning of “inquiry” in s 125 to certain meetings under s 124(4) involving the hearing of evidence.

19    As can be seen, the meaning of the noun “inquiry” in s 125 of the Act differs from its meaning when used in the form of a verb in s 114 (i.e. “[the Committee] shall inquire into…”), as well as the word “investigation” in s 95 (the Minister’s power to suspend or revoke approval “after investigation and report by [the Committee]”), each of which apparently embrace the overall investigation process undertaken by the Committee as opposed simply to the hearing process provided for by s 125.

20    Relevantly also, the Committee is not bound by the rules of evidence and may inform itself on a matter referred to it under Part VIII in such manner as it thinks fit (s 122). Furthermore, its proceedings must be held in private (s 123). The Committee also has power to summons witnesses to give evidence and produce documents (s 126).

21    The Committee does not have any disciplinary powers and is not able to publish or otherwise disclose its findings (s 135A(1)). Rather, relevantly in the present context, receipt of a report from the Committee is a precondition to the exercise of the Minister’s powers under s 95(1) of the Act to take adverse action including by revoking an approval in circumstances where the Minister is satisfied of certain matters. Specifically, sub-ss 95(1) and (8) provide that:

(1)    The Minister may, after investigation and report by the appropriate Committee of Inquiry, by notice in writing:

(a)    reprimand an approved pharmacist; or

(b)    suspend or revoke the approval of the pharmacist under section 90;

and may, at any time, by notice in writing, remove that suspension or restore that approval.

…

(8)    The Minister shall not suspend, further suspend or revoke an approval under the preceding provisions of this section unless, having regard to the evidence before the Committee of Inquiry and the report of the Committee, the Minister is satisfied that the pharmacist has, in relation to or arising out of the approval, been guilty of conduct which is an abuse of that approval or is an abuse or contravention of this Act or the regulations or shows the pharmacist, as the case may be to be unfit to continue to enjoy the approval.

(Emphasis added.)

22    As the Act stipulates, the Minister’s power to take adverse action against a pharmacist is not limited to cases where the Minister is satisfied that there has been a contravention of the Act or regulations. The width of the Minister’s power to refer “any matter … in respect of or arising out of the services or conduct of approved pharmacists in connection with the supply of pharmaceutical benefits” to the Committee contrasts with the strict criteria in s 95(8) of which the Minister must be satisfied before revoking or suspending an approval.

23    Relevantly, if the Minister exercises the power under s 95 of the Act, the Minister also has a discretion under s 134A(1) to publish a statement of reasons for the exercise of power which may include any relevant report by the Committee. Section 134A(1) in this regard provides that:

The Minister may, if the Minister thinks fit, cause to be published in the Gazette particulars of or relating to any action that the Minister or the Secretary has taken under section 34, 35, 95 or 133, including a statement of the reason for that action, which may take the form of, or include, a reference to, or an abstract from, any relevant report by a Committee of Inquiry.

24    Finally, s 105AB(8) of the Act provides that an application may be made to the Administrative Review Tribunal for merits review of a decision under s 95 suspending, further suspending or revoking the approval of a pharmacist. The Minister is precluded from publishing any report of the Committee until any such merits review process has been completed (s 134A(2)).

3.    IS THE REFERRAL INVALID BECAUSE IT IS A JOINT REFERRAL?

25    As earlier mentioned, NTMA, United and PL were each the subject of an Evaluation Report prepared by the Department before the February Referral. These reports identified potential breaches of the Act by the pharmacy concerned, including claiming prescriptions in exchange for cash and/or products, misappropriating medicines, and claiming pharmaceutical benefits after the patient’s date of death. The Evaluation Reports recommended that the Secretary consider a referral to the Committee for investigation. The Evaluation Reports and other materials were included in the bundle of relevant documents provided to the applicants when they were each notified of the February Referral in November 2024.

26    The February Referral was in the following terms:

In connection with the supply of pharmaceuticals benefits under Part VII of the Act, the services or conduct of approved pharmacists (or their directors, employees or agents, including Mr Taimor Reza Hesari and/or Ms Negina Sadri) at the following premises:

•    Shop 1007, Westpoint Shopping Centre, Patrick Street Blacktown, NSW, 2148

•    Shop 1090, Stockland Merrylands, 1 McFarlane Street, Merrylands NSW 2160

•    Shop 20A, Woolworths Greystanes, 665-669 Merrylands Road, Greystanes, NSW, 2145

•    Other premises with which Mr Taimor Hesari and/or Ms Negina Sadri are associated, if any

and involving the following matters:

•    claims for the supply of pharmaceutical benefits where there was no supply, in contravention of Part VII of the Act.

•    whether an approved pharmacist has promised or offered a gift, rebate or reward as an inducement to a person to present, or in consideration of a person's presenting, a prescription for the supply of a pharmaceutical benefit.

•    whether an approved pharmacist has supplied anything other than the pharmaceutical benefit to the person presenting the prescription, in exchange for the prescription.

•    the supply of any pharmaceutical benefits to any persons without charge or for a charge other than in accordance with Part VII of the Act.

•    whether an approved pharmacist has supplied or purportedly supplied pharmaceutical benefits a number of times greater than the number specified in any prescription, in contravention of the National Health (Pharmaceutical Benefits) Regulations 2017.

•    any other matter that the Committee believes is reasonably incidental to the above matters.

27    The Commonwealth admitted that the facts or matters into which the Committee is inquiring pursuant to the February Referral include facts or matters that might, if established, amount to contraventions of the Act by NTMA, United, PL, Ms Sadri and/or Mr Hesari.

28    With respect to the individuals named in the February Referral, the following matters were not in issue:

(1)    Ms Sadri is, and at all relevant times was, the sole director and shareholder of NTMA;

(2)    Mr Hesari is, and at all relevant times was, the sole director and shareholder of United;

(3)    Until 19 May 2024, Ms Sadri and Mr Hesari were both directors and shareholders of PL, with each holding 50% of the issued share capital in PL. However, Mr Hesari ceased to be a director and shareholder of PL around 17 May 2024 when the Greystanes Pharmacy was transferred to DDS and PL’s approval in relation to the Greystanes Pharmacy was cancelled;

(4)    Ms Sadri is now the sole owner and director of DDS; and

(5)    Neither Ms Sadri nor Mr Hesari are, or at any time since the date of the February Referral were, approved pharmacists for the purposes of Part VII of the Act.

29    The applicants do not contend that the Secretary lacked power to make a referral in relation to the conduct of more than one approved pharmacist. The applicants’ concession is rightly made given s 114 of the Act permits the referral of any matter “arising out of the … conduct of approved pharmacists” (emphasis added). Further support is lent to that construction by s 125(7) of the Act which envisages that a referral may concern the conduct of approved pharmacists “generally” or “in a class of cases”. Rather, the applicants contend that the Secretary did not have the power to make a joint referral in this case as the February Referral was issued on the basis of errors of fact, and the February Referral “poses an unacceptable risk of positive injustice to the [a]pplicants” by reason of its “omnibus” nature.

30    First, the applicants submit that the Evaluation Reports were mistaken in assuming that “the premises were connected and/or in common ownership”, and that the February Referral was, therefore, issued on “a fundamental misunderstanding of the facts”. Thus, the applicants emphasised that the Evaluation Reports preceding the February Referral stated that:

It was suspected that there are several presumed and known connected approved pharmacies acting in similar anomalous behaviour with common ownership structures. These approved pharmacies appear to be utilising common patients to process PBS claims without supply and showing other serious compliance behaviours such as swapping and excessive discounting.

(Emphasis added by the applicants.)

31    However, in the applicants’ contention, there is no such connection, at least as between the groups of pharmacists owned or controlled by the two individuals named in the February Referral, Ms Sadri and Mr Hesari. According to the applicants, “[t]he only possible connection is an historical one”, namely that, between 25 September 2020 and 19 May 2024, Ms Sadri and Mr Hesari were both directors and shareholders of PL.

32    The applicants also contend that the “other premises” referred to in the February Referral (and subsequently identified in the Commonwealth’s Concise Statement at [14] as being involved with the “matters” referred) are not “associated” with NTMA, PL or United. Rather, they emphasise that the “other premises” in question are neither presently owned nor controlled by any of the applicants.

33    The applicants’ submissions must be rejected.

34    First, no explanation is given by the applicants as to why any such “misunderstanding” of the facts, even if established, would amount to jurisdictional error. In any event, no issue was taken by the applicants with the description of the directors and shareholders of NTMA, United and PL as explained in the Evaluation Reports. That being so, as the Commonwealth correctly submits, the proposition underlying the applicants’ submissions, namely, that there is no connection between the applicants, is unsustainable: there plainly was a connection between Ms Sadri and Mr Hesari at the time (and indeed after) the February Referral was made because they were co-owners and co-directors of PL until 19 May 2024. Both NTMA and United therefore shared a shareholder and a director with PL.

35    Furthermore, with respect to the “[o]ther premises” (as identified in the Commonwealth’s Concise Statement), save for the applicants rejecting the Commonwealth’s claim with respect to “Easy Script Compounding Pharmacy”, the applicants otherwise admitted that those premises identified by the Commonwealth were indeed once owned or operated by an entity in respect of which either Ms Sadri or Mr Hesari was a shareholder or director. The fact that those pharmacies are not presently owned or controlled by an applicant does not mean that the February Referral cannot extend to require that the Committee undertake an investigation into the services or conduct of those pharmacies. As I shortly explain, there is nothing in s 114 of the Act which suggests that the power conferred on the Minister to require the Committee to undertake an investigation is subject to any such limitation.

36    Secondly, the applicants submit that the February Referral assumes “similar anomalous behaviour” as a basis for jointly referring the pharmacies, and that this assumption “highlights a real unfairness … to proceed in omnibus fashion”. However, in circumstances where NTMA, United and PL had shared common shareholders and directors, it was plainly open to the authors of the Evaluation Reports, and in turn the Minister, to attribute significance in this early investigatory stage to similar anomalies in PBS claims data for these applicants. As stated in the passage from the Evaluation Reports earlier referred to, NTMA, United and PL “appear[ed] to be utilising common patients to process PBS claims without supply and showing other serious compliance behaviours such as swapping and excessive discounting”.

37    Unusual patterns and anomalies identified in the data analysed in the Evaluation Reports include instances where certain of the applicants made “an identical claim … for the same Pharmaceutical Benefits Scheme (PBS) medicine” supplied to the same patient. For example, a claim was made at the Blacktown Pharmacy on 8 December 2022, and another claim was made for the same pharmaceutical benefit at the Greystanes Pharmacy on 9 December 2022. Similarly, in the November 2024 letter from the Committee advising United of the February Referral, the Committee identified five instances in which identical claims were made.

38    As the Commonwealth accepts, it may well be that the Committee ultimately finds that Ms Sadri and Mr Hesari did not have any involvement in or connection with each other’s pharmacies, as they depose, and that there is an innocent explanation for the unusual patterns in data and other issues identified in the Evaluation Reports. The short point, however, is that these will ultimately be matters for the Committee to consider in preparing its report to the Minister. This is especially so in circumstances where the applicants do not, and in light of the evidence to which I have referred, could not, put a legal unreasonableness case on the basis that a so-called “omnibus” referral was made with respect to NTMA, United and PL.

39    To the contrary, it was not only open to the Minister in light of the evidence contained in the Evaluation Reports to issue the February Referral as a joint referral, but on its face it was a perfectly understandable course of action. Ultimately, the applicants’ complaint with the February Referral is with the weight given to particular information as reflected in the scope of the referral. This, in turn, is a complaint which, absent an allegation of legal unreasonableness, illogicality or irrationality, the Court lacks power to consider on an application for judicial review: Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24 at 41 (Mason J); Federal Commissioner of Taxation v Primary Health Care Ltd [2017] FCAFC 131; (2017) 252 FCR 496 at [21] (the Court).

40    Thirdly, the applicants (correctly) do not contend that the Secretary lacks power to make a referral in relation to the conduct of more than one approved pharmacist, as I have earlier mentioned. Their contention is only that the Secretary lacked power to make a joint referral in the present case because of an alleged risk of unfairness in the conduct of the investigation by the Committee by reason of the February Referral being a joint one.

41    In alleging unfairness, the applicants submitted that:

(1)    The Committee is “an integral part of the process of … adjudicating on conduct by producing a report” upon which the Minister may revoke or suspend an approval under s 95(1) of the Act, and/or which the Minister may ultimately publish under s 134A, causing serious reputational damage. Given, therefore, the significance of the Committee’s task, it is incumbent on the Committee to observe “procedural fairness to avoid practical injustice” to those the subject of the joint referral.

(2)    Relatedly, although the allegations “are serious, including fraud” and “[s]ome, if proven, might constitute criminality”, “[t]here is no probation in the Act against reliance upon the Committee’s work in civil or criminal proceedings”.

(3)    With respect to the February Referral, procedural unfairness arises “from the joinder of three unrelated entities in a single inquiry, where evidence against one may affect the assessment of another, whether consciously or otherwise”. Specifically, there is a real risk that the fact of the February Referral being a joint one will result in the fact-finding process being contaminated by inadmissible or irrelevant material given that:

(a)    “the Committee is not a judicial body and lacks the institutional safeguards available in criminal trials”;

(b)    “the Committee is made up of non-legally trained persons who … are not equipped to disentangle prejudicial evidence against one entity from its relevance to another”; and

(c)    there is “no mechanism for the Committee to produce separate reports” where a joint referral has been made; and

(d)    the strong policy reasons which may exist in support of a joint criminal trial, such as avoiding inconsistent verdicts and minimising delay, have no application to a joint inquiry into the pharmacists, who are unrelated corporate entities: cf Webb v The Queen (1994) 181 CLR 41 at 88-89 (Toohey J, with whom Mason CJ and McHugh J agreed); and R v Belford & Bound (2011) 208 A Crim 256 at [104] (Fraser JA).

42    With respect, the applicants’ submissions should be rejected.

43    In the first place, it can be accepted that the Committee is subject to the rules of procedural fairness and therefore will, at any inquiry under s 125(1), be bound to afford the applicants an opportunity to make submissions and be heard prior to the Committee reaching its conclusions and making its report. This requires, as the Full Court explained in Commissioner for Australian Capital Territory Revenue v Alphaone Pty Ltd [1994] FCA 293; (1994) 49 FCR 576 at 591–592, that:

Where the exercise of a statutory power attracts the requirement for procedural fairness, a person likely to be affected by the decision is entitled to put information and submissions to the decision-maker in support of an outcome that supports his or her interests. That entitlement extends to the right to rebut or qualify by further information, and comment by way of submission, upon adverse material from other sources which is put before the decision-maker. It also extends to require the decision-maker to identify to the person affected any issue critical to the decision which is not apparent from its nature or the terms of the statute under which it is made. The decision-maker is required to advise of any adverse conclusion which has been arrived at which would not obviously be open on the known material.

44    However, no allegation is made of a breach or pending breach of any such entitlements. Nor is any allegation made on the basis of actual or apprehended bias by the Committee or any Committee member. Rather, the applicants’ submission reduces to the novel proposition that the power of the Minister or Secretary to refer a matter under s 114 of the Act may be invalid because of a possible “risk” of procedural unfairness in the manner in which a different entity, being the Committee, may undertake its investigation pursuant to the referral. With respect, this proposition would involve a significant departure from existing and well-established administrative law principles. Yet, with respect, no authority is identified, nor any analysis engaged in, by the applicants which might support recognition of a sui generis obligation of procedural fairness of this kind.

45    Moreover, the authorities with respect to the principles governing the trial of co-defendants in criminal proceedings are not helpful in the present context. This case does not involve any proceeding remotely analogous to a criminal trial. The task of the Committee is not to consider whether a criminal offence has been committed; nor is that the task of the Minister or Secretary to whom the Committee must ultimately provide its report. Furthermore, by virtue of s 122 of the Act, the Committee is not bound by the rules of evidence but may inform itself in such manner as it thinks fit. It is also entirely speculative as to whether the Committee may consider that it is necessary to disentangle evidence against one of the applicants from that against any of the other applicants because of its potentially prejudicial character or whether at the hearing stage, the applicants raise any such issue.

46    Furthermore, as the Commonwealth submits, there are established principles of administrative law which already address cases where irrelevant or prejudicial material has been taken into account including the rules against actual and apprehended bias, the implied statutory requirement of legal reasonableness, and the obligation not to have regard to irrelevant considerations: see e.g. CNY17 v Minister for Immigration and Border Protection (2019) 268 CLR 76 at [51] (Nettle and Gordon JJ), [110] (Edelman J); Minister for Immigration and Citizenship v Li [2013] HCA 18; (2013) 249 CLR 332 at [26], [29] (French CJ); and Peko-Wallsend at 40 (Mason J) respectively. Yet there is no evidence here to suggest that the Committee will not consider the evidence in accordance with these principles. To the contrary, the applicants’ submission as to the allegedly prejudicial character of the evidence being gathered fails to grapple with the historical connection between NTMA, United and PL (which is not challenged by the applicants) and would mean that the Committee would be precluded from investigating the unusual patterns in the applicants’ conduct which may be suggestive of collaboration between them. For example, it is not inherently illogical to conclude that, when determining “whether an approved pharmacist has supplied … pharmaceutical benefits a number of times greater than the number specified in any prescription”, it may be useful to consider claims made by “associated” pharmacies with respect to specific clients and their prescriptions. Similarly, when investigating claims which were made close to expiry, it is not inherently illogical or irrational to approach the task by assuming that it may be useful to consider claims made by “associated” pharmacies in order to determine how many claims were made in total close to expiry.

47    In short, I accept the Commonwealth’s submission that there are essentially four reasons why the applicants’ “omnibus” referral ground should be rejected:

First, the factual premise (that there is no connection or possible connection that could merit a joint inquiry) is false. Secondly, in general, joint referrals are clearly authorised by s 114 of the Act. The applicants have not identified a recognised juridical basis for invalidating the referral in this case. Absent such a basis, whether there are “compelling reasons” (AS [42]) for not holding a joint inquiry is irrelevant. Thirdly, there is no reason to accept the submission that holding a joint inquiry into potential misconduct by two parties is procedurally unfair. Finally, if the applicants are correct, it is impossible for the Committee to investigate the applicants’ conduct jointly, even though there is a reasonable basis for considering that they may have engaged in the same kinds of misconduct in relation to common patients. The unlikelihood of that outcome is a powerful reason to reject the applicants’ case.

4.    DOES THE COMMITTEE HAVE POWER TO INVESTIGATE PL DESPITE PL’S CANCELLATION OF ITS APPROVAL?

48    By their further amended originating application, the applicants seek a declaration that the Committee cannot continue to inquire into the past conduct of PL because PL ceased to hold an approval under s 90 of the Act on or around 17 May 2024, being after the February Referral was made. As a consequence, the applicants allege that “PL no longer possesses the statutory character that is the condition precedent to the Committee’s jurisdiction to inquire”. It follows then that, while the applicants accept, for the purposes of this ground, that the February Referral was valid when made, they contend that the February Referral ceased to be valid when PL cancelled its approval and was therefore no longer an approved pharmacist.

49    In support of this construction, the applicants submit first that the phrase “in respect of or arising out of the services or conduct of approved pharmacists” in s 114 of the Act is expressed in the present tense and thus speaks to the present status of a pharmacist, confining the Committee’s jurisdiction to those who presently hold an approval.

50    Secondly, the applicants submit that:

The concern of Part VII of the Act is that those who supply of pharmaceutical benefits within the framework of the PBS are held accountable to its standards. The inquiry and reporting function of the Committee is a procedural step that may trigger serious consequences under s 95(1), such as suspension or revocation of approval. Where no such approval exists, there is nothing to suspend, revoke or cancel. Even the lowest form of sanction (a reprimand) is designed to be against an approved pharmacist. For what would be the point of reprimanding a person or entity who once was (but is no longer) approved to supply pharmaceutical benefit? What deterrent or other effect could it have?

51    The applicants’ construction must be rejected for the following reasons.

52    First, the applicants’ submissions are premised on the assumption that s 114 of the Act empowers the Minister to refer a matter to the Committee for the sole purpose of determining whether adverse action should be taken against a currently approved pharmacist. However, that construction must be rejected. Rather, it is apparent from the text and context of s 114 that Parliament intended to confer a broad power on the Minister and the Secretary to refer matters to the Committee which is not limited in these respects. In particular:

(1)    There is nothing in the language or context of s 114 which suggests that the power to refer matters to the Committee is limited such that it can be exercised only in relation to conduct which may lead to potential adverse action against an approved pharmacist. To the contrary, the use of the phrase “any matter” is sufficiently broad to include the making of a referral for an inquiry into, and report by, the Committee to assist the Minister and Department in many other respects, such as identifying systemic risks in respect of, or arising out of, the services or conduct of approved pharmacists, areas for reform, emerging patterns of misconduct, and a need for greater education on aspects of the PBS scheme. Consistently with this, there is nothing in the language or context of s 114 which supports the proposition that a referral to the Committee in relation to conduct allegedly by an approved pharmacist will cease to be valid if the approved pharmacist ceases to be an approved pharmacist.

(2)    The words “in respect of” may have a broad meaning depending on their context: Technical Products Pty Ltd v State Government Insurance Office Qld (1989) 167 CLR 45 at 47-8 (Brennan, Deane and Gaudron JJ), 51 (Dawson J). The words “or arising out of” expand the scope of the power, making it clear that it suffices if there is a causal, and not merely immediate or direct, relationship of some kind between a “matter” and the services or conduct in question: Government Insurance Office of New South Wales v RJ Green and Lloyd Pty Ltd (1966) 114 CLR 437 at 442-3 (Barwick CJ, McTiernan and Taylor JJ agreeing), 445 (Menzies J), 447 (Windeyer J). In turn, the fact that the Parliament has seen fit to use the combined phrase, “in respect of or arising out of”, is a clear indication in my view that the Parliament intended the nexus between a “matter” referred to the Committee and the services or conduct in question to be a broad one.

(3)    The intention to confer a broad power promotes the purpose of the provision being, relevantly in the context of potential adverse action, to confer power to authorise an investigation and inquiry. Specifically, at the time that a referral is made, the circumstances which may be uncovered, and lines of inquiry which may arise, during the course of the investigation are unknown.

53    It follows that Parliament has expressed the power in the broadest possible terms limited only by reference to a central aspect of the PBS established by Part VII of the Act.

54    Secondly, contrary to the applicants’ submissions, it is not correct to say that the concern of Part VII of the Act is to hold those who supply pharmaceutical benefits within the framework of the PBS accountable to certain standards. While this is an aspect of Part VII, the primary object of Part VII is to create a scheme whereby patients are afforded access to medicines at a government-subsidised price from pharmacists who are approved (and thus regulated) under the Act. It follows that there is nothing in the objects of Part VII which suggests that the power to make a referral under s 114 should be read down in the manner suggested by the applicants.

55    Thirdly, it is not correct to say that the phrase “in respect of or arising out of the services or conduct of approved pharmacists” in s 114 of the Act supports the view that only presently approved pharmacists can be the subject of a referral or, more accurately for present purposes, an ongoing valid referral. Read in context, the phrase is equally apt to refer to services or conduct of approved pharmacists in connection with the supply of pharmaceutical benefits under Part VII in the past. Indeed, as the Commonwealth submits, it would be a surprising and unlikely regulatory outcome if a pharmacist could prevent the Committee from continuing with an investigation and/or providing a report to the Minister simply by cancelling their approval.

56    Fourthly, it is clear from s 125(7) of the Act that an investigation need not specifically concern any individual approved pharmacist but may concern “a course of conduct of PBS prescribers or approved pharmacists generally” which is “deemed”, by virtue of s 125(7), “not to concern the conduct of a PBS prescriber or an approved pharmacist”. This lends strong support to the view that the subject matter of referrals is not limited to investigating and reporting on conduct which may provide a basis on which the Minister or Secretary ultimately decides to take adverse action against an approved pharmacist.

57    Finally, this construction is also supported by the fact that a matter concerning the services and conduct of a pharmacist may be referred to the Committee to inquire into, and report on, a matter after the pharmacist’s approval has been suspended despite the fact that a pharmacist who is suspended is no longer an approved pharmacist for the purposes of the Act: see s 95(4) and (5), and the definition of “approved pharmacist” in s 84 of the Act.

5.    ARE THE FEBRUARY AND AUGUST REFERRALS VOID FOR UNCERTAINTY?

58    The terms of the February Referral were set out earlier at [26]. The terms of the August Referral are similar, save that the August Referral only refers to DDS and extends to “other premises with which Ms Negina Sadri is associated”. The August Referral was issued on the basis of a separate Evaluation Report (dated 18 July 2024) which expressed the view that DDS “is showing the same concerning behaviour as [PL] and there is prima facie evidence that [DDS] is breaching the NH Act and conditions of approval”.

59    The applicants contend that the February Referral is invalid for “uncertainty” because it directs the Committee to conduct an investigation with respect to “[O]ther premises with which Mr Taimor Hesari and/or Ms Negina Sadri are associated, if any”. The same contention is made with respect to the August Referral which refers to other premises with which Ms Negina Sadri is associated, if any. Specifically, the applicants contend that the “Other premises” the subject of the referral are not identified; nor is the nature of the “associat[ion]” alleged between Mr Hesari and Ms Sadri with “Other premises”. As a result, the applicants submit that it is unclear which other pharmacies are the subject of investigation by the Committee.

60    The applicants’ submissions in support of this ground can be summarised as follows.

(1)    If, as a matter of statutory construction, the exercise of a statutory power requires certainty but “some matter or estimation, assessment, or discretionary allocation or apportionment requiring judgment or further determination” is left unclear, the exercise of the power is beyond power or ultra vires.

(2)    It is well established that instruments issued in exercise of coercive powers must be clearly expressed and strictly construed: citing George v Rockett (1990) 170 CLR 104 at 110-111 (Mason CJ, Brennan, Deane, Dawson, Toohey, Gaudron and McHugh JJ); and R v Tillet; Ex Parte Newton (1969) 14 FLR 101 at 108 (Fox J).

(3)    In the present case, it can be inferred that a referral under s 114 of the Act must “be certain in scope in terms of what is referred” because the making of a referral is a precondition to the Minister exercising coercive powers against approved pharmacists.

(4)    The February and August Referrals fall short of the requirement for certainty because:

(a)    the “[o]ther premises” referred to in the referrals are not identified with specificity in that “[n]o address, approval number, pharmacist, or pharmacy business is given”;

(b)    the Referrals fail to identify what kind of “association” is required; and

(c)    the Referrals seek to investigate premises with which non-approved pharmacists (such as PL) might be or have been “associated” and thereby go beyond the scope of what the Act permits the Committee to do, namely, to inquire into and report on matters in respect of or arising “out of the services or conduct or approved pharmacists” (emphasis added).

61    The applicants’ submissions should be rejected. There is nothing in the text or context of s 114 which requires that a referral must meet conditions of strict precision, and that a referral cannot therefore accommodate factual uncertainties when it is made or allow for flexibility as the Committee’s investigation progresses. Rather, the stage at which a greater degree of precision may be required as a matter of procedural fairness is when an investigation proceeds to an inquiry and a hearing is held. This is because it is at this stage that the Committee must identify the critical matters in respect of which a pharmacist must be afforded an opportunity to respond under s 125 of the Act.

62    First, as Dixon J held in Cann’s Pty Ltd v Commonwealth (1946) 71 CLR 210, the mere fact that a written document may need to be interpreted, or that ambiguities and uncertainties need to be resolved, does not mean that it is invalid. Rather, “unless the power under which a legislative or administrative order is made is read as requiring certainty of expression as a condition of its valid exercise [as was the case with respect to the order in Cann’s] … the meaning of the order must be ascertained according to the rules of construction and the principles of interpretation as with any other document”: Cann’s at 227-228. Thus, in Comcare v Lilley [2013] FCAFC 121; (2013) 216 FCR 214, the Full Court at [87] held that:

[U]ncertainty (which may often be a synonym for lack of precision) is not some kind of freestanding criterion for invalidity. Uncertainty will only invalidate [an exercise of power where] one can derive from the text, context and purpose of the statute an intention by Parliament that the power be confined in a way which requires a high level of certainty (or precision).

(Emphasis added.)

63    As the Commonwealth submits, the decision in Director, Professional Services Review v Yoong [2025] FCAFC 95 illustrates that the degree of precision or certainty required in the exercise of statutory power (to issue in that case a notice requiring production of clinical records in the performance of investigative functions) will turn on the proper construction of the power having regard to its context and purpose: Yoong at [4] and [105]-[107] (the Court).

64    There is no challenge to these principles by the applicants.

65    Secondly, in the present case, to the extent that there might be any doubt about what those allegedly uncertain aspects of the referrals mean, the applicants’ doubts can readily be resolved by interpretation. As the Commonwealth submits:

[T]here is nothing uncertain about the formula adopted in the referrals in this case. The word “associated” takes its colour from the context in which it is used. The impugned subparagraphs of the referrals supplement the preceding subparagraphs by identifying “Other premises” with which Ms Sadri and Mr Hesari are associated. Read against the preceding subparagraphs, the referrals contemplate an association of the same general nature as Mr Hesari “and/or” Ms Sadri’s association with the pharmacies operated by NTMA, United and PL (for the February referral) or DDS (for the August referral) — an association as an owner or director of the corporate entity who holds an approval with respect to those premises. That reading is confirmed by the chapeau to each referral, which refers to “directors, employees or agents, including” Ms Sadri and (for the [February] referral) Mr Hesari.

66    Thirdly, there is no express requirement for certainty of expression in s 114 of the Act. Nor can any such intention be inferred. To the contrary, as earlier explained, s 114 is expressed in broad and open-textured terms. As previously explored, the breadth of that power is confirmed, for example, by s 125(7) of the Act. Further, s 125(2) of the Act indicates that a referral is not required to identify all of the approved pharmacists whose conduct may be relevant to the subject matter of the referral.

67    That such a broad power to make a referral is conferred by s 114 of the Act is scarcely surprising, given that investigations of the kind contemplated by s 114 are necessarily shaped by information and evidence as they come to light in the course of the investigation. In other words, the Minister cannot, before receipt of the Committee’s report, know what evidence may be discovered and what findings the Committee may make, and frame the referral with such certainty in mind. This inherent uncertainty is recognised, in particular, in s 125(2) of the Act which contemplates that the Committee may need to meet to consider written evidence and allegations before it can ascertain “whether a matter referred to a Committee concerns the conduct of … an approved pharmacist”.

68    Fourthly, as the applicants contend, the Committee has various compulsive powers available to assist it in complying with a referral given under s 114. These include the power under s 126 of the Act to summon witnesses to attend and give evidence and produce documents. However, while the availability of such powers to the Committee is premised on the making of a referral by the Minister or the Secretary, and powers of this nature may well be conditioned on a requirement for certainty (as was the case, e.g., in Tillet), it does not follow that a condition of certainty must also attach to the terms of a referral under s 114 of the Act.

69    Finally, the applicants submit that referring to premises with which Ms Sadri and Mr Hesari, who are not approved pharmacists, might have been associated “reinforces the tangential (at best) nature of what is sought to be directed”, indicating that this part of the investigation cannot arise out of the “services or conduct of approved pharmacists”. However, as the Commonwealth submits, that submission fails to take account of the chapeau to the referrals. Rather, as the Commonwealth also submits, read as a whole, the referrals concern (relevantly) the services or conduct of approved pharmacists at premises with which Ms Sadri and Mr Hesari are associated for the reasons I have already explained and therefore fall within the terms of s 114 of the Act.

6.    VALIDITY OF THE TERMINATION DECISIONS

70    By their further amended originating application, the applicants seek a declaration that the Secretary’s decisions to terminate or revoke the 2023 United and PL Referrals (Termination Decisions) are invalid and therefore of no effect. The applicants raise the following issues with respect to the Termination Decisions.

(1)    The Committee failed to discharge its obligation to cause notice in writing to be given to the respective approved pharmacists pursuant to s 125(1) of the Act. That section provides that: “Where a matter referred to a Committee concerns the conduct of a PBS prescriber or an approved pharmacist … the Committee shall cause notice in writing of the matter so referred, and of the time and place at which the Committee intends to hold an inquiry into the matter, to be given to that PBS prescriber or an approved pharmacist at least 10 days before the date of the inquiry” (emphasis added). However, as the applicants first learned of the 2023 United and PL Referrals in July 2025, the Committee failed to comply with the obligation in s 125(1).

(2)    The Committee’s (current) position – that the Committee can continue to investigate PL even though it ceased to hold approval following the issuing of the February Referral – is inconsistent with the Committee’s (previous) position – that the Secretary ought to terminate the 2023 United and PL Referrals as those Referrals do not allow for these investigations “to continue in the event of a change of ownership of the pharmacy business”.

(3)    The Committee does not have the power to terminate an inquiry or revoke a referral.

(4)    The material suggests that the Committee is acting with “an ulterior purpose” with respect to DDS, namely “to permit action to be taken by the Minister against DDS for failings of the other purportedly connected” pharmacies.

(5)    The Committee and the Department are dealing with each other in a way that the Act does not authorise e.g., using a “pending inquiry (without any finalised report) to decide a possible application under s 90 of the Act”.

71    The short answer to these submissions is that the relief sought with respect to these grounds is a bare declaration that the Termination Decisions were invalid and of no effect. As the Commonwealth submits, “[i]t is not suggested that any consequence would follow for the February and August referrals that are otherwise in issue in these proceedings, which (in the case of the February referral) overlap entirely with the subject matter of the earlier referrals”.

72    I agree with the Commonwealth that, in circumstances where I have held that the grounds which attack the validity of the February and August Referrals must fail, this additional declaration has no utility and relief should be refused in the exercise of discretion: Ainsworth v Criminal Justice Commission (1992) 175 CLR 564 at 581-582.

73    In any event, the ground is misconceived. The power to revoke a referral is either: an implicit incident of the power to make the referral under s 114 of the Act, bearing in mind that the report itself has no independent legal consequences; or, presumed by operation of s 33(3) of the Acts Interpretation Act 1901 (Cth).

74    Finally, there is no evidence whatsoever to support the allegation of an improper purpose.

7.    CONCLUSION

75    For the reasons set out above, the application should be dismissed with costs.

Associate:

Dated:    28 August 2025