Federal Court of Australia

Kippa-Ring Pharmacy Pty Ltd v Pharmaceutical Services Federal Committee of Inquiry [2026] FCA 656

ORDERS

THE COURT ORDERS THAT:

1.    The proceeding is dismissed.

2.    The applicants pay the second respondent’s costs of the proceeding.

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

ORDERS

THE COURT ORDERS THAT:

1.    The proceeding is dismissed.

2.    The applicants pay the second respondent’s costs of the proceeding.

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

REASONS FOR JUDGMENT

RANGIAH J:

1    The applicants seek judicial review of two decisions of the Secretary, Department of Health, Disability and Ageing (the Secretary) to refer the applicants to the Pharmaceutical Services Federal Committee of Inquiry (the Committee) pursuant to s 114 of the National Health Act 1953 (Cth) (the NH Act).

2    Proceeding QUD312/2025 is concerned with the first decision and QUD313/2025 is concerned with the second. As the proceedings are closely related, it is appropriate to deal with them together.

3    The Originating Application initially named the members of the Committee as the first five respondents, and they filed submitting notices. The first five respondents were later renamed as the “Pharmaceutical Services Federal Committee of Inquiry” and renumbered as the first respondent. The proceeding is defended by the second respondent, the Commonwealth of Australia.

4    The applications for review are brought pursuant to s 39B of the Judiciary Act 1903 (Cth) and s 16 of the Administrative Decisions (Judicial Review) Act 1976 (Cth) (the ADJR Act).

5    The applicants raise seven grounds of review, the first five concerning the Secretary’s decisions to make the referrals to the Committee; and the final two concerning the Committee’s conduct of the inquiry. The grounds of review may be summarised as follows:

(1)    The Secretary had no power to make a referral in respect of a person or entity that had ceased to be an approved pharmacist by the time of the referral.

(2)    The Secretary had no power to make a referral in respect of multiple parties.

(3)    The Secretary had no power to make any referral in respect of “associated parties”.

(4)    The applicants were denied procedural fairness by not being given an opportunity to make submissions to the Secretary as to why the referrals ought not be made.

(5)    The Secretary made the first referral for an improper purpose.

(6)    The Committee contravened s 125(1) of the NH Act by failing to give ten days’ notice of the inquiry.

(7)    The applicants were denied procedural fairness by the Committee failing to provide them with an opportunity to comment upon the Committee’s analysis of materials prior to notice being provided to the applicants.

6    I will proceed by summarising the relevant facts and statutory provisions before considering the parties’ submissions.

The facts

7    As at August 2024, the following applicants had been approved under s 90 of the NH Act to supply pharmaceutical benefits at the following premises in Queensland:

•    Kippa Ring Pharmacy Pty Ltd (the first applicant): Shop 72, Kippa Ring Village, 284 Anzac Avenue, Kippa Ring.

•    Clontarf Bridge Pharmacy Pty Ltd (the second applicant): Shops 19A & 19C, Clontarf Bayside Plaza, 9 Elizabeth Street, Clontarf.

•    Kedron JT Pharmacy Pty Ltd (the third applicant): 278 Gympie Road, Kedron.

•    Purga Pharmacy Pty Ltd (the fourth applicant): Suite 3, 355 Ipswich-Boonah Road, Purga.

8    John Tawadrous was the sole director of each company.

9    On 21 June 2024, the Director of the PBS Compliance Section provided the Secretary with an “Evaluation Report” which alleged that the approved pharmacies and Mr Tawadrous had breached provisions of the NH Act and recommended that Mr Tawadrous be considered for referral to a Committee.

10    On 22 August 2024, the Secretary made the following referral to the Committee:

Pursuant to section 114 of the Act, the Committee is to inquire into and report to me or the Minister of Health and Aged Care on the matters set out at Item 1.

Item 1

In connection with the supply of pharmaceuticals benefits under Part VII of the Act, the services or conduct of the approved pharmacist (or the director/s, employee/s, or agent/s, including Mr John Tawadrous) at the following premises:

•    Shop 72, Kippa Ring Village, 284 Anzac Avenue, Kippa Ring QLD 4021

•    Shops 19A & 19C, Clontarf Bayside Plaza, 9 Elizabeth Street, Clontarf QLD 4019

•    other premises with which Mr John Tawadrous is associated if any

and involving the following matters:

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

b.    Whether an approved pharmacist has supplied pharmaceutical benefits on more than one occasion where no repeats were authorised in any prescription, or in excess of the number specified in any prescription, in contravention of the National Health (Pharmaceutical Benefits) Regulations 2017 (the Regulations) and/or Part VII of the Act.

c.    Whether an approved pharmacist has supplied the maximum quantity of repeats of a pharmaceutical benefit on one occasion where the prescriber did not direct in a prescription the supply to be made on one occasion in contravention of the Regulations.

d.    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 Regulations.

e.    Any other matter that the Committee believes is reasonably incidental to the above matters.

11    Following the referral, Kippa Ring Pharmacy Pty Ltd and Clontarf Bridge Pharmacy Pty Ltd applied for changes of the approved pharmacist in respect of their respective premises. On 15 September 2024:

    The approved pharmacist in respect of the Kippa Ring premises was replaced by Kippa Ring Pharmacy Pty Ltd and Koolman Pharmacy Pty Ltd (in partnership) jointly.

    The approved pharmacist in respect of the Clontarf premises was replaced by Clontarf Bridge Pharmacy Pty Ltd and Koolman Pharmacy Pty Ltd (in partnership) jointly.

12    The sole director of Koolman Pharmacy Pty Ltd was Dylan Koolman.

13    The evidence does not explain why the applications for changes of the approved pharmacist was made. However counsel for the applicant drew my attention to Nguyen v Minister for Health and Ageing (2002) 71 ALD 529 where the approved pharmacists were two sisters who were jointly approved and conducted their business in partnership. After one sister was convicted of a criminal offence, the Minister cancelled the approval in respect of both sisters. Justice Weinberg held at [81] that the Minister’s power under s 133(2)(b) of the NH Act to revoke a joint approval required the Minister to engage in a separate consideration of whether the approval of each of the partners should be revoked. It was not a binary choice between revoking and not revoking, and a partial revocation was within the Minister’s discretion.

14    On 4 December 2024, a recommendation was made by the Director of the PBS Compliance Section that Mr Tawadrous and Mr Koolman be considered for referral to the Committee.

15    On 15 January 2025, a delegate of the Secretary made a further referral to the Committee in the following terms:

Pursuant to section 114 of the Act, the Committee is to inquire into and report to me or the Minister of Health and Aged Care on the matters set out at Item 1.

Item 1

In connection with the supply of pharmaceuticals benefits under Part VII of the Act, the services or conduct of the approved pharmacist (or the director/s, employee/s, or agent/s, including Mr John Tawadrous and Mr Dylan Koolman) at the following premises:

•    Shop 72, Kippa Ring Village, 284 Anzac Avenue, Kippa Ring OLD 4021

•    Shops 19A & 19C, Clontarf Bayside Plaza, 9 Elizabeth Street, Clontarf QLD 4019

•    other premises with which Mr John Tawadrous and Mr Dylan Koolman are associated, if any

and involving the following matters:

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

b.    Whether an approved pharmacist has supplied pharmaceutical benefits on more than one occasion where no repeats were authorised in any prescription, or in excess of the number specified in any prescription, in contravention of the National Health (Pharmaceutical Benefits) Regulations 2017 (the Regulations) and/or Part VII of the Act.

c.    Whether an approved pharmacist has supplied the maximum quantity of repeats of a pharmaceutical benefit on one occasion where the prescriber did not direct in a prescription the supply to be made on one occasion in contravention of the Regulations.

d.    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 Regulations.

e.    Any other matter that the Committee believes is reasonably incidental to the above matters.

16    On 20 March 2025, the Secretariat of the Committee notified the approved pharmacists in respect of the first referral that it intended to list the inquiry for hearing on 20 August 2025. On 11 April 2025, the Secretariat of the Committee notified the approved pharmacists in respect of the second referral that it intended to list the inquiry for hearing on 21 August 2025.

17    On 21 May 2025, the applicants commenced proceedings seeking various declarations and seeking interlocutory injunctions restraining the respondents from taking any further step in connection with the referrals.

18    The applications for interlocutory injunctions were heard on 4 June 2025 by the duty judge, with the Commonwealth being joined to the proceeding. The applications were resolved upon the applicants’ undertaking to retain all materials in their current possession and control that might be required to be produced, and the respondents’ undertaking not to exercise powers under ss 126 and 127 of the NH Act pending the determination of these proceedings.

19    The hearing of the substantive proceedings took place on 23 and 24 July 2025 and a series of supplementary submissions were filed after the hearing.

20    There were then three important developments. First, on 28 August 2025, Perry J delivered judgment in NTMA Pharmaceuticals Pty Ltd v Beardmore [2025] FCA 1036 (NTMA (First Instance)), which considered grounds that were the same as or similar to several of the grounds relied on by the present applicants. The parties have filed supplementary submissions dealing with the effect of that case.

21    Second, on 27 October 2025, Stellios J delivered judgment in Pharmacy O2342 Pty Ltd v Secretary, Department of Health, Disability and Ageing [2025] FCA 1307 (Pharmacy O2342) and, on 26 November 2025, Bromwich J delivered judgment in Ho v Pharmaceutical Services Federal Committee of Inquiry [2025] FCA 1458 (Ho), which also affect some of the applicants’ grounds.

22    Third, on 19 March 2026, the Full Court delivered its judgment dismissing the appeal in NTMA Pharmaceuticals Pty Ltd v Beardmore [2026] FCAFC 23 (NTMA (Full Court)). The parties have not sought a further opportunity to make submissions in the wake of the Full Court’s decision.

The legislative scheme

23    Part VII of the NH Act enacts the pharmaceutical benefits scheme. The primary purpose of the scheme is to subsidise the supply of certain drugs and medicines to the public by approved pharmacists and medical practitioners.

24    In NTMA (Full Court), the key provisions of Part VII, Div 2 were summarised at [3] as follows:

•    A pharmacist may apply to the Secretary for approval to supply pharmaceutical benefits at particular premises (s 90).

•    By s 86, 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 [s] 87”.

•    However, by s 89, 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” (such as a medical practitioner). As the primary judge observed, 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.

•    Section 95(1) provides for the Minister to reprimand an approved pharmacist, or suspend or revoke a pharmacist’s approval. These powers may only be exercised “after investigation and report by the appropriate Committee of Inquiry” (s 95(1)), and if the Minister is satisfied of certain matters “having regard to the evidence before the Committee of Inquiry and the report of the Committee” (s 95(8)).

•    Section 98 provides for cancellation of an approved pharmacist’s registration by the Secretary. The Secretary “shall” cancel an approved pharmacist’s approval if an approved pharmacist requests that his or her approval under s 90 in respect of all or any of the premises in respect of which he or she is approved be cancelled (s 98(1)(a)). However, by s 98(2A)(c) (added in 2025), the Secretary may refuse to cancel an approval of an approved pharmacist in respect of particular premises if “a matter referred to a Committee of Inquiry concerns the conduct of the approved pharmacist and the Committee has not concluded its inquiry into the matter”.

25    Section 114 provides:

The Pharmaceutical Services Federal Committee of Inquiry shall 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.

26    In NTMA (Full Court), the Full Court summarised the powers and procedures of the Committee as follows:

[18]    Part VIII, Div 4 sets out provisions applicable to committees generally (including the Federal Committee). A committee is not bound by legal rules of evidence but may inform itself on a matter referred to it under this Part in such manner as it thinks fit (s 122). The proceedings of a committee shall be held in private (s 123). A committee has power to summons witnesses (s 126), and to examine them on oath or affirmation (s 127). It is an offence for a witness before a committee to refuse to take an oath or affirmation, or to refuse to answer a relevant question (s 129(1)); however, any evidence given by a witness to a committee is not admissible against the witness in court proceedings, other than for perjury (s 129(2)).

[19]    Section 125 of the Act sets out the following requirements for giving notice to an approved pharmacist whose conduct is the subject of an inquiry.

•    By s 125(1), where a matter referred to a committee concerns (relevantly) the conduct of an approved pharmacist, the pharmacist must be given at least 10 days’ notice of the matter referred, and the time and place at which the committee intended to hold an inquiry into the matter.

•    By s 125(2), the committee may, before giving notice to any person, meet and examine any written evidence or allegation referred to the committee by the Minister, for the purposes of ascertaining whether the referred matter concerns (relevantly) the conduct of an approved pharmacist.

•    By s 125(4)-(5), an approved pharmacist who has been given notice pursuant to s 125(1) must generally be given an opportunity of examining witnesses, giving evidence and calling witnesses and of addressing the committee.

•    However, by s 125(7), when a matter referred to a Federal Committee concerns (relevantly) “a course of conduct of … approved pharmacists generally or in a class of cases”, the matter is deemed for the purposes of s 125 not to concern the conduct of an approved pharmacist.

[20]    The Act does not make provision for a committee to publish its report; to the contrary, a committee is prohibited from disclosing any information with respect to the affairs of a third person (such as an approved pharmacist) except in the performance of duties, or in the exercise of powers under the Act (s 135A(1)).

[21]    However, if the Minister decides to take action against an approved pharmacist under s 95 of the Act, the Minister may publish a statement of reasons in the Gazette, which may include some or all of the report by the relevant committee (s 134A(1)).

Consideration

The First Ground: That the Secretary had no power to make a referral in respect of a person or entity that had ceased to be an approved pharmacist by the time of the referral

27    The applicants submit that, as a matter of construction of s 114 of the NH Act, any referral to the Committee is limited to inquiry about the services or conduct of an entity that is an approved pharmacist at the date of the referral, not an entity that was, but is no longer, an approved pharmacist. They submit that Kippa Ring Pharmacy Pty Ltd and Clontarf Bridge Pharmacy Pty Ltd ceased to be approved pharmacists on 15 September 2024.

28    However, as the Commonwealth submits, the ground must fail because those entities were approved pharmacists at the date on the first referral on 22 August 2024.

29    Further, to the extent that the applicants’ submission is that s 114 of the NH Act does not allow the Committee to inquire into the past services or conduct of a pharmacist which is no longer an “approved pharmacist”, that argument was rejected in NTMA (Full Court) at [51]-[65] and by Bromwich J in Ho at [17] and [19]-[33].

30    The applicants’ first ground must be rejected.

The Second Ground: That the Secretary had no power to make a referral in respect of multiple parties

31    The applicants argue that an inquiry into the services or conduct of multiple parties simultaneously will result in unfairness and injustice. They submit, as I understand the argument, that s 114 should not be construed in a manner that would produce such unfairness and injustice. The applicants seek an injunction and a declaration that they may be prejudiced or embarrassed by the Committee proceeding in respect of more than one approved pharmacist in the one inquiry.

32    However, the construction arguments raised by the applicants were firmly rejected in NTMA (Full Court) at [31]-[48].

33    In addition, the Full Court held at [46] that where the appellants had merely raised the bare possibility that a joint inquiry into the relevant pharmacists and other individuals might create prejudice but had not identified any breach or pending breach of the hearing rule or any apprehension of bias, there was no basis for the grant of the injunctive and declaratory relief sought. The same reasoning is applicable in the present case.

34    The applicants’ second ground must be rejected.

The Third Ground: That the Secretary had no power to make any referral in respect of “associated parties”

35    The referrals do not only direct the Committee to inquire into and report upon the services and conduct of the approved pharmacists. The second referral, for instance, also requires the Committee to inquire and report upon the services and conduct of, “the director/s, employee/s, or agent/s including Mr John Tawadrous and Mr Dylan Koolman” in respect of identified premises; and, “other premises with which Mr John Tawadrous and Mr Dylan Koolman are associated”.

36    The applicants advance two arguments. First, they submit that s 114 of the NH Act provides only for referral of any matter in respect of or arising out of the services or conduct of “approved pharmacists”, and not any “associated parties”. It will be convenient to return to the first argument after considering the second.

37    The applicants’ second argument is that the referrals are ultra vires on the grounds of uncertainty as to the “other premises”. A similar argument was rejected in NTMA (Full Court) where the applicants contended that a referral was invalid for “uncertainty” because it directed 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 Full Court held at [75] that, “this is not a case where the text, context and purpose of the Act require that a referral under s 114 demonstrate a high degree of certainty”. The Full Court went on to find at [76] that, “the meaning of “other premises” “associated” with Mr Hesari and/or Ms Sadri could readily be determined by interpreting the Referrals, in light of surrounding circumstances known to them”, noting that the referrals listed a number of pharmacies where those persons were directors, shareholders, or owners.

38    In the present case, the second referral, for instance, is stated to be of the services or conduct of, “the approved pharmacist (or the director/s, employee/s, or agent/s, including Mr John Tawadrous and Mr Dylan Koolman)”. The referrals are, “in connection with the supply of pharmaceuticals benefits under Part VII of the [NH Act]… at the following premises…”; and then identifies the two approved premises at and from which Kippa Ring Pharmacy Pty Ltd and Koolman Pharmacy Pty Ltd (as the approved pharmacists) are approved to supply pharmaceutical benefits. In the context, it is readily discernible that the, “other premises with which Mr John Tawadrous and Mr Dylan Koolman are associated, if any”, are any other premises from which an approved pharmacist of which Mr Tawadrous or Mr Koolman is a director, employee or agent is authorised to supply pharmaceutical benefits. The applicants’ submission that there is any relevant uncertainty must be rejected.

39    The applicants’ first argument that s 114 of the NH Act provides no power for referral of any “associated parties” was not raised in NTMA (Full Court) and NTMA (First Instance). The argument relies upon s 114 of the NH Act being limited to any matter referred to the Committee in respect of or arising out of, “the services or conduct of approved pharmacists”, in connection with the supply of pharmaceutical benefits. The submission is that the language of the provision indicates that only the services and conduct of approved pharmacists themselves can be the subject of referral.

40    It may be noted that an “approved pharmacist” may be a corporation, not only an individual: see the definition of “pharmacist” in s 4(1), which picks up bodies corporate entitled to carry on business as a pharmacist under State or Territory laws. Section 134F(2) of the NH Act relevantly provides that any “conduct” engaged in on behalf of a body corporate by a director, employee or agent of the body corporate within the scope of his or her actual or apparent authority, “shall be deemed, for the purposes of this Act, to have been engaged in also by the body corporate”. Section 134F(2) recognises that a corporation engages in conduct through human actors.

41    An approved pharmacist that is a body corporate provides services and engages in conduct through its directors, employees and agents. The phrase, “the services or conduct of approved pharmacists”, encompasses the services or conduct of a body corporate provided or engaged in through its directors, employees and agents. Accordingly, s 114 cannot be construed as prohibiting referral of the services or conduct of a director, employee or agent of a corporate approved pharmacist in connection with the supply of pharmaceutical benefits.

42    The applicants’ third ground must be rejected.

The Fourth Ground: Whether the applicants were denied procedural fairness by not being given an opportunity to make submissions to the Secretary as to why the referrals ought not be made

43    The applicants submit that in the absence of clear, contrary legislative intention, administrative decision makers should assume they owe a duty of procedural fairness to those whose interests, rights and liberties will be affected by the decision. They submit that s 114 of the NH Act does not clearly preclude procedural fairness; and they were denied procedural fairness by a failure to invite them to make submissions as to why the referrals ought not be made. In particular, they submit they were denied an opportunity to provide a response to the Evaluation Reports, which contained “adverse findings”, and were also denied the opportunity to comment on the scope and lawfulness of the referral.

44    The applicants also submit that, unlike the Professional Services Review Scheme contained in Part VAA of the Health Insurance Act 1973 (Cth) (the HI Act), s 114 does not provide for any staged system of decision making where, at various stages in the process, decision makers are expressly required to provide procedural fairness. They submit that the cases that determined there is no obligation of procedural fairness at the stage of referral under s 82 of the HI Act (in earlier forms) are therefore distinguishable.

45    The Commonwealth submits that the implied power to refer a matter under s 114 of the NH Act is not conditioned upon procedural fairness. They submit the referral power is a mere administrative referral of a matter for investigation by the Committee which has no impact on the applicants’ rights or interests. The Commonwealth submits that the cases considering s 82 of the HI Act are not relevantly distinguishable.

46    It is well established that a person whose rights and interests may be adversely affected by an administrative decision made under a statutory power is entitled to procedural fairness unless there is a clear contrary legislative intention. In Annetts v McCann (1990) 170 CLR 596, Mason CJ, Deane and McHugh JJ held at 598:

It can now be taken as settled that, when a statute confers power upon a public official to destroy, defeat or prejudice a person’s rights, interests or legitimate expectations, the rules of natural justice regulate the exercise of that power unless they are excluded by plain words of necessary intendment.

(Affirmed in Plaintiff M61/2010E v Commonwealth (2010) 243 CLR 319 at [74].)

47    To similar effect, in Minister for Immigration and Border Protection v WZARH (2015) 256 CLR 326 (WZARH), Kiefel, Bell and Keane JJ held at [30]:

[I]n the absence of a clear, contrary legislative intention, administrative decision-makers must accord procedural fairness to those affected by their decisions.

48    The NH Act does not expressly require, nor expressly exclude, an obligation on the part of the Secretary to provide procedural fairness when considering whether to make a referral pursuant to s 114 to the Committee. An issue that arises is whether a referral by the Secretary under s 114 of the NH Act “affects” the approved pharmacist’s rights or interests, such that a clear legislative intention is necessary to exclude procedural fairness. But even if the approved pharmacist’s rights or interests are not relevantly affected, it will be necessary to consider whether any legislative intention can be discerned that the pharmacist is nevertheless to be afforded procedural fairness.

49    It is relevant to observe that s 114 of the NH Act is concerned with the initiating step in a sequential, staged process that may or may not ultimately lead to disciplinary action. At the first stage, the Secretary makes a referral to the Committee (s 114). At the second stage, the Committee inquires into and reports upon the matter referred to the Committee (s 116). At the third stage, the Minister may determine whether the approved pharmacist should be reprimanded or have their approval suspended or revoked (s 95).

50    In a statutory scheme that involves a staged process before a final outcome, the requirements of procedural fairness may not necessarily apply at an early stage of the process. In Re Minister for Immigration and Multicultural Affairs; Ex parte Miah (2001) 206 CLR 57 (Miah), McHugh J observed at [146]:

…Natural justice requirements are less likely to attach to decisions that are preliminary in nature. Examples are decisions to lay charges or commence disciplinary proceedings. The closer a decision is to having finality and immediate consequences for the individual, however, the more likely it is that natural justice requirements apply. …

51    Similarly, in Ainsworth v Criminal Justice Commission (1992) 175 CLR 564, Mason CJ, Dawson, Toohey and Gaudron JJ observed at 578:

It is not in doubt that, where a decision-making process involves different steps or stages before a final decision is made, the requirements of natural justice are satisfied if “the decision-making process, viewed in its entirety, entails procedural fairness”. …

52    Accordingly, in considering whether or not procedural fairness is required before the Secretary makes a referral under s 114 of the NH Act, it is necessary to consider whether the decision-making process, viewed in its entirety, will be procedurally fair. If procedural fairness is required at the second and third stages, that may provide an indication that it was not the legislative intention that procedural fairness also be provided at the first stage.

53    The NH Act contains a number of provisions governing the Committee’s conduct of the inquiry. The regulations may make provision for and in relation to procedure (s 121). The Committee is not bound by legal rules of evidence but may inform itself in such manner as it thinks fit (s 122). The proceedings shall be held in private (s 123). At least ten days’ notice in writing of the matter referred and the time and place at which the Committee intends to hold its inquiry must be given to the approved pharmacist (s 125(1)). A person may be summonsed to attend the Committee and to give evidence and produce books, documents and writings in the person’s custody or control (s 126). The Committee may examine a person appearing as a witness (s 127).

54    In NTMA (Full Court), the Full Court held at [19] that, “an approved pharmacist who has been given notice pursuant to s 125(1) must generally be given an opportunity of examining witnesses, giving evidence and calling witnesses and of addressing the committee”. There is no doubt that procedural fairness is required when the Committee is engaged in the inquiry at the second stage.

55    In my opinion, procedural fairness is also required at the third stage when the Minister, after the investigation and report by the Committee, may consider, pursuant to s 95 of the NH Act, whether the approved pharmacist should be reprimanded or have their approval suspended or revoked. Procedural fairness is required because those consequences would affect the approved pharmacist’s rights and interests.

56    Accordingly, the approved pharmacist is entitled to a reasonable opportunity at the second stage to persuade the Committee that no adverse finding should be made; and at the third stage to persuade the Minister that there should be no reprimand, suspension or revocation. These opportunities make it unlikely that the approved pharmacist is intended to also have an anterior entitlement to persuade the Secretary not to make any referral to the Committee. An approved pharmacist given such an opportunity might present very substantial material to persuade the Secretary that there should be no referral because the allegations are not made out. Such a procedure would be administratively cumbersome and significantly repetitious since the same factual matters could be required to also be considered by the Committee (particularly since the Secretary is a member of the Committee: s 113(1) of the NH Act) and is unlikely to have been intended: cf. Yoong v Chief Executive of Medicare (2021) 177 ALD 48 (Yoong) at [95]-[97].

57    In addition, a referral under s 114 does not of itself affect an approved pharmacist’s rights and interests even though it may eventually lead to downstream consequences affecting such rights and interests. As McHugh J observed in Miah, procedural fairness requirements are less likely to attach to decisions that are preliminary in nature and the closer a decision is to having finality and immediate consequences, the more likely it is that natural justice requirements apply. A referral to a Committee to inquire and report is a merely preliminary step and remote from decisions in the process that produce any immediate consequences.

58    Further, the inclusion of an express requirement for the Committee to notify an approved pharmacist of the fact that the referral has been made (see s 125(1)) supports the view that there is no implied anterior obligation to give the approved pharmacist notice that the Secretary is considering making a referral to the Committee.

59    The Commonwealth also submits that the authorities that have determined there is no requirement of procedural fairness in respect of a decision under s 82 of the HI Act in its original form assist in demonstrating there is no such requirement under s 114 of the NH Act. Section 82 originally provided that a, “Committee shall inquire into, and submit to the Minister its report and recommendations on any matter referred to the Committee by the Minister… that… arises out of or relates to the rendering of a professional service…”.

60    In Edelsten v Health Insurance Commission (1990) 27 FCR 56 (Edelsten), Northrop and Lockhart JJ held at 69-70 that a decision to make a referral under s 82 was not reviewable under the ADJR Act because it “lack[ed] any quality of finality” and was not a “substantive [determination]”. Their Honours so held because, “the reference… under s 82 has no effect whatsoever on Dr Edelsten’s rights, privileges or liabilities unless and until the Committee makes a decision under s 94(c) of the HI Act that Dr Edelsten may have rendered excessive services”. Justice Davies, writing separately, held at 73 that a reference under s 82, “merely initiated an inquiry; it did not decide or formally recommend anything”, and that it would be inconsistent with the HI Act, which laid down a complex investigative procedure for the Committee, to imply a requirement that the Minister or his delegate should, at the initiating stage, be required to afford procedural fairness to Dr Edelsten.

61    Subsequent cases applied Edelsten in respect of early iterations of the Professional Services Review Scheme which replaced the regime under the HI Act considered in Edelsten: Yung v Adams (1997) 80 FCR 453 at 461 (Davies J), not challenged on appeal in Adams v Yung (1998) 83 FCR 248; Phan v Kelly (2007) 158 FCR 75 at [44], [46] (Tamberlin J).

62    In Kelly v Daniel (2004) 134 FCR 64, the Full Court stated at [82] that in respect of s 86 of the HI Act in its extant form, the Commission, “is obliged to take into account any explanation offered by the practitioner”, which seems to suggest that procedural fairness was required to be provided in the exercise of the power to make a referral. However, as I explained in Yoong at [86], it had been conceded at first instance in Daniel v Kelly (2003) 200 ALR 379 that s 86(1) imposed obligations of procedural fairness, and the question does not seem to have been argued on appeal. Accordingly, the view expressed by the Full Court was obiter dicta.

63    Edelsten was distinguished in National Home Doctor Service Pty Ltd v Director of Professional Services Review (2020) 276 FCR 338 at [147] where Griffiths J considered the second and third “tiers” of the Professional Services Review Scheme, which take place after a referral has been made: see also [20]-[65]. However, in Yoong, I applied Edelsten to hold that procedural fairness obligations were not owed in relation to a decision at the first tier, being a decision under s 86(1) of the HI Act to request the Director to consider reviewing the provision of services.

64    The analysis in Edelsten supports the conclusion that procedural fairness is not a condition of the exercise of the referral power in s 114 of the NH Act. A referral under s 114 has no effect of itself on the approved pharmacist’s rights or interests. As Stellios J explained in Pharmacy O2342 at [50]:

…[I]t is clear that a report of the Committee does not directly or immediately affect rights under the NH Act: (a) its only legal operation relates to s 95; (b) for action under s 95(1)(a), a report merely operates as the temporal precondition for action by the Minister; and (c) even though the Minister must have regard to the report before action is taken under s 95(1)(b), it is the Minister’s satisfaction of guilt of the conduct specified in s 95(8) which is the statutory condition for a suspension or revocation — not the Committee’s findings or conclusions.

65    It may be noted that in Pharmacy O2342 at [52] and [67], Stellios J also rejected submissions that an approved pharmacist’s rights and interests are affected by the Committee’s inquiry and report at the second stage. His Honour stated at [52] that, “it is difficult to accept the applicant’s argument that the Committee undertakes an adjudicative function that affects rights”, and, “the impact on rights arises from the Minister’s satisfaction of the proscribed conduct, not the findings or conclusions of the Committee”.

66    Section 114 of the NH Act does not, in my opinion, confer any power upon the Secretary to “destroy, defeat or prejudice” or “affect” an approved pharmacist’s rights or interests: cf. Annetts v McCann at 598; WZARH at [30]. Accordingly, there is no scope for the application of the principle that procedural fairness is not excluded in the absence of a clear legislative intention. In any event, there is a clear legislative intention to exclude procedural fairness for the reasons I have given.

67    The applicants argue that since s 125(4) provides for only limited procedural fairness entitlements, it cannot have been intended that those entitlements would be a substitute for procedural fairness when the Secretary is considering making a referral. The applicants point to their inability to compel relevant witnesses to attend the hearing if those witnesses are not summonsed by the Chairperson of the Committee. However, there may be circumstances where procedural fairness, as well as an obligation to act reasonably, does require the Chairperson to summons a witness at the request of the approved pharmacist. I do not accept that the applicants have demonstrated any gap or inadequacy in the content of procedural fairness at the second stage.

68    To adopt the language of Ainsworth v Criminal Justice Commission at 578, “the decision-making process, viewed in its entirety, entails procedural fairness”. In my opinion, the Secretary is not under any obligation of procedural fairness when considering whether to make a referral under s 114 of the NH Act.

69    The applicants’ fourth ground must be rejected.

The Fifth Ground: Whether the first referral was made for an improper purpose

70    The applicants’ fifth ground asserts that the first referral was made for an improper purpose, namely to allow recovery of a debt alleged to be owing by Mr Tawadrous in his personal capacity.

71    The Minute to the Secretary attaching the Evaluation Report that led to the first referral stated, relevantly:

The Committee process can achieve an outcome through the removal of the individual’s approvals to access PBS benefits and recovery of benefits through a civil debt assessment at the conclusion of the inquiry.

72    The applicants submit that the Secretary adopted the contents of that Minute and Evaluation Report by accepting its recommendation to make the referral to the Committee and that one of the Secretary’s purposes in making the referral was to commence a civil debt recovery, a function outside the function specified in s 114 of the NH Act.

73    The Commonwealth submits that the author of the Minute was referring to s 99AA(2) and (3) of the NH Act, which provide for the recovery of payments made by the Commonwealth in circumstances where the pharmacist knew, or ought reasonably to have known, that they were not payable, by way of notice issued by the Secretary. The Commonwealth submits that information ultimately contained in a report issued by a Committee can properly inform the Secretary’s consideration of whether to issue such a notice. The Commonwealth submits that, as such, there was no error in referring to the “Committee process” as “achieving an outcome” by, “recovery of benefits through a civil debt assessment at the conclusion of the inquiry”: it was a correct summary of the effect of s 99AA(2) and (3).

74    The applicants use the expression “improper purpose” to mean a purpose for the making of a referral that is forbidden under s 114 of the NH Act. Section 114 does not expressly prohibit the Secretary from making a referral with a purpose of having the Committee investigate whether an approved pharmacist has overcharged for the supply or purported supply of pharmaceutical benefits so that the Secretary can recover any overcharged payments pursuant to s 99AA of the NH Act. If such a prohibition is to be found, it can only be by implication from the scope, subject matter and purpose of the NH Act: cf. Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24 at 40.

75    It can be accepted that the language of s 114 does operate to prohibit the Secretary from referring “any matter” to the Committee unless the matter is, “in respect of or arising out of the services or conduct of approved pharmacists”; and, “in connection with the supply of pharmaceutical benefits under Part VII”. However, the width of the phrases describing the permissible scope of the referral (“any matter”, “in respect of or arising out of” and are “in connection with”) demonstrate that the provision is intended to confer a very broad power. In NTMA (First Instance), Perry J observed at [53] 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”.

76    It is difficult to understand the basis for the applicants’ contention that s 114 of the NH Act prohibits a referral for the purpose of investigating whether there has been overcharging so that the Secretary can recover any overcharged payments. Section 99AA demonstrates that a purpose of the power given to the Secretary under that provision is to safeguard the public interest in preventing the misuse of public funds. As the Commonwealth submits, it would be perverse if the Committee could not inquire about whether there have been overpayments of public funds that could then be recovered by the Secretary under s 99AA.

77    In NTMA (Full Court) at [58], Pharmacy O2342 at [46]-[48] and Ho at [23], submissions that the power of referral is limited to matters that might inform the exercise of power by the Minister under s 95(1) was rejected. To the extent that the applicants may have been making the same submission in the present case, the submission must also be rejected.

78    The applicants’ submission that a referral for the purpose of enabling the Secretary to ultimately recover any overpayments is outside the scope of s 114 of the NH Act cannot be accepted.

79    The applicants’ fifth ground must be rejected.

The Sixth Ground: Whether the Committee contravened s 125(1) of the NH Act by failing to give ten days’ notice of the inquiry

80    The applicants contend that the Committee infringed s 125(1) of the NH Act by failing to give ten days’ notice of the inquiry.

81    The applicants in QUD312/2015 were provided with notice of the referral on 20 March 2025 indicating that the hearing would commence on 20 August 2025. The applicants in QUD313/2015 were provided with notice of the referral on 11 April 2025 indicating that the hearing would commence on 21 August 2025.

82    The applicants submit that the word “inquiry” in s 125 refers to any action taken by the Committee pursuant to the investigation process. They submit that the Committee commenced its “inquiry” by receiving or gathering evidence in the form of the Evaluation Reports; analysing the reports and forming views as to what the issues for the inquiry were; and issuing summonses to witnesses. They submit that they were required to be provided with ten days’ notice and an opportunity to comment before any of these steps were taken.

83    Section 125(1) of the NH Act provides:

125    PBS prescriber or pharmacist affected by inquiry to be given notice

(1)    Where a matter referred to a Committee concerns the conduct of a PBS prescriber or an approved pharmacist, as the case may be, the Chairperson of 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.

84    In NTMA (First Instance), Perry J at [18] considered that the word “inquiry” in s 125 was, “clearly intended to refer to a process commenced by a hearing, as opposed to the start of an investigation which may precede the inquiry”. Her Honour relied on a number of textual and contextual considerations supporting that construction, including that: s 125(1) refers to notice of “an inquiry” to be held at a “time and place”; 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; 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 s 125(6) extends the meaning of “inquiry” in s 125 to certain meetings under s 124(4) involving the hearing of evidence.

85    Justice Perry concluded at [19] that the, “meaning of the noun “inquiry” in s 125 of the [NH] Act differs from its meaning when used in the form of a verb in s 114 …, as well as the word “investigation” in s 95”, the latter two of which, “apparently embrace the overall investigation process undertaken by the Committee as opposed simply to the hearing process provided for by s 125”.

86    The Commonwealth does not dispute the applicants’ submission that Perry J’s reasons concerning the construction of s 125(1) of the NH Act are obiter dicta. The applicants submit that her Honour’s construction would provide the Committee with the power to secretly investigate and deploy the coercive powers of issuing summonses to third parties, including suppliers, staff, customers and doctors, in respect of an approved pharmacist and then being able to revoke any referral prior to being required to provide notice. They submit the notion that the Secretary can make a referral to a Committee to exercise powers the Secretary does not have to compel witnesses and the giving of evidence in secret should be rejected.

87    However, the concerns raised by the applicants with Perry J’s construction of s 125(1) of the NH Act can be addressed by existing administrative law principles, including those concerning procedural fairness (discussed below in the context of the applicants’ seventh ground) and unreasonableness: cf. NTMA (Full Court) at [43]. I find her Honour’s reasoning persuasive. I concur with her Honour’s reasons and conclude that, in s 125(1), the “inquiry” refers to the hearing. I reject the applicants’ argument to the contrary.

88    The applicants’ sixth ground must be rejected.

The Seventh Ground: Whether the applicants were denied procedural fairness by the Committee failing to provide them with an opportunity to comment upon the Committee’s analysis of materials prior to notice being provided to the applicants

89    Each letter from the Committee’s Secretariat providing notice under s 125(1) of the NH Act to the applicants included a copy of the instrument of referral and a copy of the Evaluation Report provided to the Committee. Each letter explained that its purpose was to, “[set] out the lines of inquiry arising from the material currently before the Committee”; enclosed a bundle of documents of the, “preliminary evidence provided to or gathered by the Committee”; and then each set out four “lines of inquiry” emerging from the PBS data. The lines of inquiry were said to arise from the Committee’s analysis of “data relating to the PBS claims”, which appears to refer to the approved pharmacists’ history of supplying pharmaceutical benefits. The applicants were notified that the Committee intended to list its inquiry for hearing on 20 and 21 August 2025. The applicants were also notified in the Secretariat’s letter of 2 May 2025 that the Committee was, “currently gathering materials that may be relevant to the inquiry”.

90    The applicants submit they were denied procedural fairness by not being provided with an opportunity to comment upon the materials the Committee had received and the Committee’s analysis of those materials prior to receiving the notices under s 125(1) of the NH Act. In particular, they submit that the language of the referrals was broad, whereas the Committee identified the specific issues it considered to arise from the Evaluation Reports without seeking comment from the applicants. They submit that the Committee was required to provide an opportunity to comment on the Evaluation Reports before they were analysed and “considered adversely” by the Committee in determining the scope of the inquiry.

91    I have held that s 125(1) of the NH Act requires that the Committee give notice of the matter referred and the time and place at which the Committee intends to commence the hearing at least ten days prior to the hearing. The provision does not require the Committee to give notice in advance of starting any investigation that may precede the hearing. It follows that the Committee is not under any obligation to give the approved pharmacist an opportunity to comment upon the material it receives or its identification of the issues involved in the inquiry at a preliminary stage.

92    This does not mean, of course, that the Committee is entitled to make inflexible rulings adverse to the approved pharmacist prior to providing the notice to the approved pharmacist applicants. However, there is no suggestion in the present case that the Committee has taken any inflexible position about the issues for inquiry it has identified, nor that it intends to deny the applicants an opportunity to make submissions upon any relevant aspect of procedure or substance, including the identified issues. The Committee seems to have been doing no more than applying the type of process described in Yung v Adams (1997) 80 FCR 453 at 458 in respect of the HI Act:

At the beginning of the inquiry, the Committee may well not have formulated likely or possible findings or the grounds upon which they might be made. As the inquiry proceeds, the Committee should give such further particulars or information of a like nature as is necessary to make it clear to the medical practitioner what are the matters to which he or she should respond.

93    Any allegation of denial of procedural fairness by reason of a failure to provide an opportunity to comment would be premature because it is not yet known what measures the Committee will take to afford procedural fairness: cf. Romeo v Asher (1991) 29 FCR 343 at 349; NTMA (Full Court) at [46].

94    The applicants’ seventh ground must be rejected.

Conclusion

95    The applicants have failed to establish any of their grounds of review. Both proceedings will be dismissed with costs.

Associate:    

Dated:    29 May 2026

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