3.1 Construction of item 124 of Part 1 of Schedule 1 to the Rules
32 As the primary judge held, the critical finding by the Authority was on a mixed question of fact and law, namely, that the approved premises no longer formed part of a shopping centre and therefore were not in a facility for the purposes of item 124 because they had been demolished and were unavailable for occupation. We also agree that the Authority did not hold that merely because the approved premises were demolished, it followed that they could not be within the shopping centre (reasons below at [35]). While the Authority's reasons could have benefited from greater elaboration, it can fairly be inferred as did the primary judge, that the Authority applied the definition of "shopping centre" given, among other things, that the definition was attached to the Authority's statement of reasons.
33 The appellants initially contended in their written submissions that the effect of "deactivating" Mr Lin's s 90 approval with respect to his existing premises under s 98(2) was to preserve the status quo as at the time of "deactivation" in relation to the second respondent's existing approval for that period (see also grounds 1, 2 and 3, notice of appeal). As a consequence, the appellants submitted that, while the Rules must be applied as at the time of decision, the Authority must be satisfied that at the time of "deactivation" the requirement that the "existing premises are not in a facility" in item 124 was met. However, that argument had, with respect, little to commend it and was rightly abandoned at the hearing of the appeal.
34 At the hearing, counsel for the appellants contended instead that the term "existing premises" in item 124 must be read as the premises subject to an existing approval in line with the definition of that phrase in s 10 of the Rules. As earlier mentioned, it was not in dispute that those premises, at the time of approval, were within a facility. As a consequence, the appellants submitted that the Authority wrongly held that the existing premises so defined were not within a facility because that part of the facility where the premises were located had subsequently been demolished. It was the approval which was said to be important; the fact of demolition was irrelevant. As the primary judge held at [37], it is implicit in this submission that if the approved premises were within a shopping centre when the s 90 approval was granted, they must be taken to remain within a shopping centre for the purposes of determining any later application for approval under item 124 of the Rules, subject to the qualification by the appellants that there remained a shopping centre in existence. Save, however, for that qualification, the appellants' argument appears to be the same as that summarised by the primary judge at [32]-[33] of his reasons notwithstanding that ground 3 of the notice of appeal alleges that the primary judge erred in attributing that argument to the appellants.
35 The starting point in any task of statutory construction is the text of the provision which must be considered in its context including the statutory purpose: Thiess v Collector of Customs (2014) 250 CLR 664; [2014] HCA 12 at 671-672 [22]-[23] (French CJ, Hayne, Kiefel, Gageler and Keane JJ). As to the latter, their Honours explained in Thiess that:
Objective discernment of statutory purpose is integral to contextual construction. The requirement of s 15AA of the Acts Interpretation Act 1901 (Cth) that "the interpretation that would best achieve the purpose or object of [an] Act (whether or not that purpose or object is expressly stated …) is to be preferred to each other interpretation" is in that respect a particular statutory reflection of a general systemic principle. For:
"it is one of the surest indexes of a mature and developed jurisprudence not to make a fortress out of the dictionary; but to remember that statutes always have some purpose or object to accomplish, whose sympathetic and imaginative discovery is the surest guide to their meaning." [Cabell v Markham (1945) 148 F (2d) 737 at 739, quoted in Residual Assco Group Ltd v Spalvins (2000) 202 CLR 629 at 644 [27]]
36 First, both parties correctly, in our view, accepted that s 10 of the Rules defines "existing premises" to mean premises that are the subject of an approval which is in force and that the term was intended to bear the same meaning in item 124. It follows that, read in context, there may be "existing premises" notwithstanding that premises in the ordinary meaning of the word no longer exist, namely, a building or a building with the grounds belonging to it (see e.g. the definitions of "premises" in the Oxford Dictionary (online ed, at 12 January 2015) and Macquarie Dictionary (online ed, at 12 January 2015)). As the appellants submitted, "the fact that [the premises] have been demolished doesn't matter because while the approval remains on foot, they continue to be approved premises, albeit, no longer accessible."
37 Secondly, item 124 poses a question in the present tense, namely, whether the existing premises so defined "are" in a facility. As such, on its natural and ordinary meaning, item 124 directs the Authority to decide whether the criterion is met at the time of its decision and not on the basis of where the premises were located at the time that the original approval was given or any other time. In this regard, the words actually used by the legislature are the surest guide to legislative intent: Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (Northern Territory) [2009] HCA 41; (2009) 239 CLR 27 at 46-47 [47] (Hayne, Heydon, Crennan and Kiefel JJ). As the primary judge held at [37], if the intention had been for item 124 to bear the meaning for which the appellants contend, it would have been a simple matter for the legislator to have avoided the use of the present tense and prescribed instead, for example, a criterion that "the existing premises were not in a facility at the time approval was granted".
38 Thirdly, the appellants submitted that there was an illogicality in the second respondent's submission that the Authority had to have regard to the fact that the premises had been demolished. As counsel for the appellants submitted:
…if the respondent is correct in saying that demolishing a premises means there are no existing premises, then it's very difficult to see how the applicant… for an approval can make any of these applications under part 1, because on his own argument he doesn't have an existing approval, because he has no premises and one has to have premises in order to have an approval.
39 However, the premise for this submission is not made out as the second respondent accepts the appellants' construction of "existing premises". More fundamentally, it is not correct to say that the existence of premises in the sense of a building is essential to maintain approval under the Act. In this regard, it is true that the Secretary cannot grant approval under s 90 if she or he is satisfied that on or after the day on which the approval is granted, the pharmacist would be unable to supply pharmaceutical benefits at the premises (s 90(3D)). However, s 98 envisages that the Secretary may decide not to cancel an approval even though the pharmacist has ceased to carry on business as a pharmacist at the approved premises and therefore notwithstanding that the criteria for a grant of approval would not be met. Thus, as the appellants accepted, the Secretary might exercise the discretion not to cancel under s 98(2) in order, for example, to enable a pharmacist to re-establish or relocate her or his business after the premises in which the pharmacy was located were destroyed or damaged in a natural disaster without losing her or his s 90 approval with respect to those premises in the interim. The construction of "existing premises" in item 124 which both parties accept, and with which we agree, is therefore consistent with the scheme of the Act.
40 That being so, while premises in the ordinary sense may no longer physically exist, the approval which is still in existence nonetheless relates to a physical location and an assessment can be made of whether that physical location is or is not within a facility. In this regard, as the second respondent contends, the approval for which s 90 makes provision is an approval to supply pharmaceutical benefits from premises simpliciter, and not from premises in a facility or shopping centre. It follows, in our view, that there is no illogicality in the proposition that an assessment can be made of whether "existing premises" as defined are located within a facility despite the fact that the premises and the building in which they were contained have been wholly demolished.
41 In the fourth place, the focus in the requirements prescribed by the Rules upon the proximity of a proposed approved pharmacy to other approved pharmacies further supports the primary judge's construction of item 124. The origin of the proximity requirements lies in amendments made to the Act by the Community Services and Health Legislation Amendment Act 1990 (Cth) (the 1990 Amendments). Those amendments were directed to reducing the number of existing pharmacies and regulating the approval of new pharmacies so as to reduce the cost of dispensing prescriptions by increasing the average output per pharmacy with consequential savings for the Commonwealth: Pharmacy Restructuring Authority v Chatfield (1993) 43 FCR 418 (Chatfield) at 420 (Davies and Lee JJ); see also at 433-434 (French J). As the Full Court held in Pharmacy Restructuring Authority v Martin (1994) 53 FCR 589 (Martin) at 597:
The relevant provisions are not concerned with minimising competition in the pharmaceutical industry but with reducing the Commonwealth's financial burden in providing pharmaceutical benefits while maintaining an acceptable level of community service.
42 Thus an agreement in December 1990 between the Minister for Aged, Family and Health Services and the Pharmacy Guild of Australia provided in line with these goals that, subject to "guidelines" issued under the Act not being disallowed, the Authority would consider applications for approval based on "guidelines" imposing restrictions on the proximity of new approvals (Martin at 594-595). The first such Determination was made on 9 January 1991 (Martin at 595). (We note that, while described initially as guidelines, nonetheless they were binding upon the Authority in making recommendations, as are the current Rules: Smoker v Pharmacy Restructuring Authority (1994) 53 FCR 287; Chatfield at 421 (Davies and Lee JJ) and 436 (French J)).
43 The same goals are evident in The Fifth Community Pharmacy Agreement between The Commonwealth and The Pharmacy Guild of Australia dated 3 May 2010 (the 2010 Agreement) which preceded the making of the Rules applicable to this case. In common with the earlier such agreements, the 2010 Agreement sets out, for the purposes of s 98BAA of the Act, the parties' agreement in relation to the manner in which the Commonwealth price is to be ascertained for the purposes of payments to approved pharmacists in respect of the supply by them of pharmaceutical benefits. In particular, clause 1(d) states that the principles and objectives of the Agreement include to:
i. ensure a fair Commonwealth price is paid to Approved Pharmacists for providing pharmaceutical benefits while maximising the value to taxpayers by encouraging an effective and efficient community pharmacy network;
…
vi. ensure the Location Rules work for the benefit of the Australian community including increased access to community pharmacies for the population of rural and remote areas. The specific objectives of the Location Rules are to ensure:
• all Australians have access to PBS medicine;
• a commercially viable and sustainable network of community pharmacies dispensing PBS medicines;
• improved efficiency through increased competition between pharmacies;
• improved flexibility to respond to the community need for pharmacy services;
• increased local access to community pharmacies for persons in rural and remote regions of Australia; and
• continued development of an effective efficient and well-distributed community pharmacy network in Australia.
44 The reference in clause 1(d) to the "Location Rules" is a reference to the Rules determined by the Minister under s 99L of the Act (clause 2.1, 2010 Agreement).
45 The achievement of the objects evident in the 1990 Amendments and underpinning the centrality of proximity and/or location in a facility in the Rules strongly suggests in our view that the criteria prescribed by Schedule 1, including item 124, were intended to be applied at the time that the Authority makes its recommendation rather than on the basis of circumstances which no longer pertain.
46 Finally, it is true that in a particular case this construction may mean that the Authority is bound to recommend that a proposed pharmacy which is not in a facility be approved at premises which are, for example, immediately adjacent to another approved pharmacy and that this construction might thereby appear to undermine the object of the proximity rules. However, in our view, the Parliament provided for such possibilities to be addressed by the Secretary in the exercise of discretion under s 90 as to whether or not to approve the application notwithstanding a recommendation.
47 It follows in our view that the Authority was correct to ask whether the "existing premises" were not in a facility for the purposes of item 124 at the time that it made its decision. The Authority's finding that the premises were no longer in a shopping centre and therefore not in a facility was open on the evidence before it, if not inevitable. In this regard, we emphasise that what was critical was the complete demolition of the premises and that they were incapable of occupation. This was not merely a case where, for example, the walls of the shop where the approved pharmacy had previously been located had been removed but the premises remained within the physical confines of a shopping centre as defined by the Rules.