Attia v Australian Community Pharmacy Authority

legislative framework 9 Division 2 of Part VII of the Act provides for the supply of pharmaceutical benefits. Under s 90(1) of the Act, the Secretary (as defined in s 4 of the Act) may, on application by a pharmacist, approve the pharmacist for the purpose of supplying pharmaceutical benefits at particular premises. Applications of the type made by the applicants must be referred to the respondent (s 90(3A) of the Act). 10 The Secretary may grant approval only if the respondent recommends it, but can refuse the approval even if the respondent has recommended it (s 90(3B) of the Act). 11 Section 99K(2) of the Act provides: 'In making a recommendation… the [respondent] must comply with the relevant rules determined by the Minister under section 99L', (which enables the making of rules governing recommendations by the respondent). 12 The relevant rules are contained in Determination No. PB 8 of 2000 (effective 26 July 2000), as amended by PB No. 13 of 2000, PB No. 9 of 2002 and PB No. 15 of 2002 ('the Rules'). Relevantly, the respondent must recommend approval in respect of a particular premises if the applicant has a legal right to occupy those premises for the purpose of operating a pharmacy and the following requirements under paragraph 7 of the Rules are met: (a) there is an existing approval number for a pharmacy located at other premises; (b) the applicant, or another pharmacist operating at the other premises, has agreed that the approval number will be cancelled immediately before the approval under consideration is given; (c) if the pharmacy with the existing number has ceased to carry on business at the other premises, the Secretary is aware of that fact and has decided not to cancel the approval; and (d) the premises are situated in a 'large shopping centre' (so far as is relevant for present purposes). 13 'Large shopping centre' is defined in paragraph 2 of the Rules: ' "large shopping centre" means a shopping complex, under a single management, that: (a) is an aggregation of discrete commercial establishments and associated facilities; and (b) has a total gross leasable area of not less than 5,000 square metres; and (c) includes a supermarket that occupies not less than 1,000 square metres, and not less than 30 other commercial establishments operating independently of one another; and (d) has customer parking facilities provided within the shopping complex.' (Emphasis added). 14 The legislative history of this definition may provide possible assistance in gleaning Parliament's intended construction of the current provision. The predecessor to the Rules (repealed on 26 July 2000 when the current Rules commenced) was Determination No. PB 13 of 1998, as amended by Determination No. PB 11 of 1999 ('Previous Determination'). Paragraph 2 of the Previous Determination read: ' "large shopping centre" means a shopping centre that … is a contiguous site under a single management or developer…'. (Emphasis added.)

tribunal's decision 15 There were only two matters in dispute before the Tribunal, namely what constituted the shopping complex, and whether the shopping complex was under a single management. In relation to whether the ShopSmart Centre proper and ALDI constituted a shopping complex, the Tribunal concluded that it was a shopping complex within the meaning of paragraph 2 of the Rules. That is, the criteria set out in subparagraphs (a) to (d) of the definition of large shopping centre were satisfied. 16 However, the Tribunal was not satisfied 'that the ShopSmart/ALDI shopping complex is under a single management for the purposes of the rules and the Act'. The Tribunal Member said (at [35-36]): 'It is undeniable that ALDI and ShopSmart are owned by different groups. ALDI owns its own land and Stocklands owns ShopSmart. However, it is not merely the ownership of the premises that is pertinent. Rather the management structure and its operation are critical. "Single management" should be given its ordinary meaning. The relevant definitions from the Macquarie Dictionary elucidate the plain meaning of "under a single management" "under" … subject to the rule, direction, guidance, etc., of: under supervision "single" one only; separate; individual … consisting of one part, element or member "management" … the person or persons managing an institution, business, etc. Management entails rights and responsibilities over the land, as well as supervision. Mr Davey [ShopSmart Centre Manager, employed by Knight Frank] gave evidence of how he surveyed the site and ensured that the site was safe for ShopSmart customers. He informed ALDI of any part of their land that might need attention and cooperated with them in maintaining a safe and welcoming environment. But ultimately Mr Davey agreed that there were two owners - ALDI and Stocklands -, two managements - ALDI and Knight Frank -, with mutually beneficial cooperation.' 17 The Tribunal member went on to say (at [41]-[42]): 'Maintaining single management of a shopping complex including over the supermarket may assist in ensuring that the community need is met. There may well be other policy considerations for the requirement of single management which were not brought to my attention. In any case the rules are clear on their ordinary meaning that there must be single management. No persuasive reasons were given for reading the rules other than on their ordinary meaning. The submissions and evidence before me support findings that · "under single management" means one person or group in charge of or supervising a complex · the relationship between ALDI and ShopSmart is not one of single management, but of good neighbourliness and mutual benefit · ALDI retains control over its own premises and own car park · ShopSmart has control over its premises and tenants, but not over ALDI · it is unclear what responsibilities, if any, Knight Frank has in relation to ALDI · while the ownership of their separate parcels of land by ALDI and ShopSmart is relevant to whether or not there is a single management, even if there was entire ownership of the land by Stocklands and ALDI had a lease, the management responsibilities would still be subject to the terms of the lease.' 18 Accordingly, the Tribunal affirmed the decision of the respondent to refuse the application.

current appeal 19 The question of law raised on appeal is whether the Tribunal erred in finding that the ShopSmart/ALDI shopping complex was not a shopping complex 'under a single management' within the Rules. 20 There are essentially three aspects to the appeal ultimately pressed by the applicants. First, the applicants claim that in making its decision, the Tribunal exercised its power improperly by taking irrelevant considerations into account, namely: (i) that the land within the ShopSmart Centre was owned by different owners, and (ii) that shops within the ShopSmart Centre could, hypothetically, be managed by different managers. 21 Secondly, the applicants claim the Tribunal's failure to consider relevant matters in making its decision was also an improper exercise of power, the relevant considerations being: (i) that common areas of the ShopSmart Centre were managed under single management, and (ii) that in reality, the ShopSmart Centre was under a single management. 22 Thirdly, the applicants claim the Tribunal erred in law in failing to attribute the proper meaning to the phrase 'under a single management'.

Construction of 'under a single management' 23 The third argument, being crucial, in my view, to the success of the appeal, will be considered first. 24 The applicants submit that the concept of 'single management' is ineluctably linked to the determination of what are the boundaries of the ShopSmart Centre. Once the possible extent of the complex is identified, the task is then to resolve whether it is under single management (relying on Singh v Australian Community Pharmacy Authority [1999] AATA 531 ('Singh')). 25 The applicants argue that the shopping centre as a whole is to be distinguished from the separate commercial establishments within it, which are likely to each have their own internal management. The applicants drew attention to the requirement that the centre be: 'an aggregation of discrete commercial establishments and associated facilities', including 'a supermarket … and not less than 30 other commercial establishments operating independently of one another' (emphasis added). The applicants submitted that the part of ALDI's premises used as a car park was an associated facility of the supermarket, and that the wording of the definition did not preclude a discrete commercial establishment having a discrete associated facility, if the latter were discrete. 26 The applicants say the Rule requires commercial independence of each establishment from the other and that a distinction is necessary between, on the one hand, the discrete commercial establishments and their associated facilities, regardless of how those establishments are operated, and the shopping complex as a whole, on the other hand. 27 'Management' in this context is to be taken to be management of the shopping complex as a whole, so that the focus is on what happens in the areas flowing in and around the particular establishments which might go to make up the complex. The applicants argue that this is a less intrusive test and form of management than one that requires an ability to evict any particular tenant or to dictate what may be sold within the premises. If the purpose of enquiring whether there is a single management is to ascertain the extent or boundary of the complex, then that purpose is achieved by examining whether there is a single system of handling management problems. In short, the focus should be on whether there is a single regime of management. The concept of a shopping complex 'under single management' does not necessarily require that there be only one manager. 28 Accordingly, as a practical matter, the phrase 'under single management', submit the applicants, requires one single regime or system of supervision over matters such as the vehicular and pedestrian traffic flows, signage, cleaning, marketing, lighting and so forth which surround and facilitate effective trade within the centre as a retail outlet both for shoppers and for shop owners. 29 In support of this construction, the applicants drew attention to a letter dated 15 October 2003, signed by both the Property Director of ALDI and the Asset Manager for Stockland, which was part of the evidence before the Tribunal. The letter states, relevantly: '… it was clearly the intent of both parties to work collectively which is reflected in the manner which planning consent was submitted to the respective authorities, the way in which the centre has been designed, the way in which the tenancy mix is integrated. … Customers visiting the precinct do not treat a visit to each of the components as separate experiences; they are all part of the one shopping trip. This has been a deliberate strategy on the part of both Stockland and ALDI and is reflected in the way each area enjoys seamless integration courtesy of the way in which the car parks are presented uniformly. … …[T]here are numerous areas in which there is commonality of management, both as a consequence of the deliberate design and the fundamental belief that separately each component is unlikely to prosper. In recent times the need to share management sources has resulted in discussions in relation to the pursuit of common marketing strategies. Currently the areas of common management, or more specifically where responsibilities are not allocated consistent with land boundaries include the following management functions: · Cleaning · Security · Gardening · External lighting · Car parks · Trolley return · Customer refuse · Research In contrast to the above functions which are under an agreed single management, each of the two components are metred/invoiced separately for land tax, insurance and statutory charges with these charges treated as mandatory and not subject to management discretion as per the schedule referred to above. However, from an operational viewpoint the development functions no differently from other centres which conform to the above mentioned definition of a large shopping centre. …' 30 The applicants further rely on the objectives of the Third Community Pharmacy Agreement between the Commonwealth of Australia and the Pharmacy Guild of Australia ('the Agreement'), which provides the background to the system for relocating approvals granted under the Act. Clause 4.2(a) of that Agreement states one of the objectives as follows: 'provision of a quality, personalised pharmacy service to the Australian community through a network of well distributed, accessible, and viable community pharmacies'. 31 The applicants maintain that the construction of the phrase, for which they contend, is wholly consistent with that objective. 32 The Agreement also specifically refers to changes that were intended by the Agreement, one of which was the 'clarification of the definition of a large shopping centre to simplify [the respondent's] administration of pharmacy relocations to shopping centres'. A definition of 'large shopping centre' is provided later in the Agreement. Notably, the wording of that definition is less specific than the definition ultimately settled upon in the Rules: 'Large shopping centre means a shopping complex that: (a) is an aggregation of discrete commercial establishments and associated facilities under a single management …'. The significance of this is discussed further below. 33 The applicants also rely on Re Bissaker and Australian Community Pharmacy Authority and Others (1999) 57 ALD 230, where the issue considered was whether an application to relocate a Pharmaceutical Benefits approval number to a supermarket (within the then definition of large shopping centre) could be successfully opposed because there was no definite community need for the additional pharmacy. The Tribunal found that approval for the relocation should have been granted because, on consideration of the policy objectives underlying the Previous Determination, a large supermarket constituted a 'special case' for relocation. Deputy President McMahon said (at 238): 'One must start from the proposition that the first half of r 7 intended to treat all large shopping centres as special cases, as private hospitals are treated as something special in the second half. Special considerations will therefore apply. The subparagraphs of r 7(a) divide large shopping centres into three classes. The rule contemplates that there will not be more than one approved pharmacy per 100 retail shops. From the terms of the rule itself therefore, one might almost conclude that it assumes there will ipso facto be a need or demand for approved pharmacies of that density.' 34 The applicants submit, again relying on Singh, that the rationale for the exception concerning large shopping centres is to encourage relocations: a shopping centre, having the required floor space and number of shops, is assumed to serve the demands of enough of the community to warrant approval of a Scheme pharmacy there and to further the object of the Determination to achieve an efficient and well distributed network of Scheme approved pharmacies. 35 Within the context of the policy underlying the Rule, the applicants submit that the words 'under a single management' are present to reinforce the requirement that the large shopping centre be a location that is identifiable as a discrete shopping experience, distinct from shops in the surrounding area. A group of shops that are coincidentally proximate to each other, but which are not organized as part of a unitary shopping experience, will not benefit from the exception provided in the Rules. 36 Finally, the applicants submit that the policy rationale behind the Rule is, in the present case, frustrated by the Tribunal importing into the definition of management of the shopping centre considerations relevant to the ownership and management of particular premises within the complex. The Tribunal observed that its conclusion appears to 'give rise to an anomalous result'. Consideration of the wording of the Rule and the apparent policy underlying that Rule indicates that there should not be such an anomaly.

The respondent's position 37 The respondent submits that there was no error on the part of the Tribunal in the construction it favoured of the definition of large shopping centre. Counsel argued that on the material before the Tribunal and the way the argument was there put, the Tribunal was not prompted to enquire whether there was a single regime of management. In any case, even if the Rules had been understood in another way, on the material before the Tribunal, the result would have been the same. 38 The respondent contends that there is no authority to support a 'less intrusive' or broader approach to the construction of 'single management', and that to accept such a construction would be to import into the definition new words, namely: 'a shopping complex, the common areas of which are under a single management'. As 'management' is not restricted under the Rules to the management of operations in and around the discrete commercial establishments, there is no warrant to take such a restricted approach to assessment of the management arrangements of a shopping centre. 39 'Management' of a shopping centre envisages a greater degree of control, such as dictating appropriate standards of behaviour for tenants or shop owners. That aspect, too, must be considered in any assessment of whether a complex is under single management. 40 In any event, the respondent points out that, on the evidence before the Tribunal, Stocklands and ALDI have no 'common areas' or 'common property'. Stocklands owns buildings and a car park. ALDI owns a building and a carpark. The two corporations may have agreed to the creation of easements for access but that does not convert the land burdened with the easement(s) into common property. 41 In response to a suggestion that there might be something akin to a joint venture to provide a single management (so as to constitute a single regime of management), the respondent submitted that such a notion is one of joint management, rather than single management. 42 Even if the legislative provisions are interpreted as envisaging only a single regime of management, the respondent argues that there is no evidence of a cooperative management venture between the two entities in the present case. Rather, there were, at best, cooperative managements; the factual substratum did not support a suggestion of a single regime of management. 43 Further, the respondent submitted that if the purpose of the enquiry into the management arrangements, required by the Rules, is to enable a boundary to be drawn around a shopping complex, the boundary in the present case could not, on the evidence before the Tribunal, be drawn so as to include ALDI.

consideration 44 It seems to me that there will be an operative error of law if there is a way in which the applicants might have satisfied the criteria of the Determination which the Tribunal did not perceive and, had the Tribunal appreciated that, the result of the case might possibly have been different. In the present case, I think that there were ways in which the key expression 'under a single management' might be understood, which it appears were not debated before the Tribunal. 45 The issue is whether 'under a single management' should be construed not so as to require primary enquiry as to how many persons or entities participate in managing, but in order to ascertain whether there is only one unified regime of management of the complex or more than one. That is, of course, bound up with the question: what constitutes 'management' for the purpose of the Rules? 46 It seems to me that the answers to those questions favour the applicant. 47 Pursuant to s 15AA of the Acts Interpretation Act 1901 (Cth), a construction that would promote that purpose or object is to be preferred to a construction that would not promote that purpose or object. The statutory purpose must be taken into account 'not only where those provisions on their face offer more than one construction, but also in determining whether more than one construction is open': Mills v Meeking (1990) 169 CLR 214 at 235 per Dawson J. The well-known passage from CIC Insurance Limited v Bankstown Football Club Limited (1997) 187 CLR 384 at 408 is also in point: '…[T]he modern approach to statutory interpretation (a) insists that the context be considered in the first instance, not merely at some later stage when ambiguity might be thought to arise, and (b) uses "context" in its widest sense to include such things as the existing state of the law and the mischief which … one may discern the statute was intended to remedy.' (Footnotes omitted.) 48 Recently in Stevens v Kabushiki Kaisha Sony Computer Entertainment [2005] HCA 58 (6 October 2005), McHugh J remarked at [124] on the width of available sources to discover the legislative 'purpose': 'In determining issues of statutory construction, the text of the relevant statutory provision must be evaluated not only by reference to its literal meaning but also by reference to the purpose and context of the provision. And context is not limited to the text of the rest of the statute. For purposes of statutory construction, context includes the state of the law when the statute was enacted, its known or supposed defects at that time and the history of the relevant branch of the law, including the legislative history of the statute itself. It also includes in appropriate cases "extrinsic materials" such as reports of statutory bodies or commissions and parliamentary speeches - indeed any material that may throw light on the meaning that the enacting legislature intended to give to the provision. This is the process required by the modern approach of the common law to statutory construction. In many jurisdictions, the common law principles have been incorporated, extended or modified by statute. Section 15AA of the Acts Interpretation Act 1901 (Cth) requires a court construing federal legislation to have regard to its purpose. Section 15AB of that Act authorises the use of various forms of extrinsic material to determine the meaning of that legislation. Section 15AB(3), however, has probably modified the common law position. It requires the court, when considering extrinsic material or its weight, to take into account "the desirability of persons being able to rely on the ordinary meaning conveyed by the text of the provision" and "the need to avoid prolonging legal or other proceedings without compensating advantage." ' 49 The relevant objectives of the Act and reason for amending the definition of 'large shopping centre' have been set out above, and the specific mischief to be addressed is tolerably clear from the Agreement. One reason for amending the definition was to clarify it in order to simplify the administrative process for the respondent of pharmacy relocations to shopping centres. The changes that were made to the definition of a 'large shopping centre' were relevantly these: · The apparently more inclusive term 'complex' was chosen instead of the term 'centre'; · The requirement of a 'contiguous site' was jettisoned. The primary meaning of the word contiguous in a context such as that in question is: actually adjoining ('touching' as the dictionaries have it); and · The ability of a facility to qualify by reason of its having had a single developer regardless of the number of 'managements' was removed. 50 Taken alone, the last of these three changes might appear to favour the respondent's argument: emphasis on a single management has come to the fore. However, granting so much, that simply begs the question of the meaning of the phrase 'under a single management'. 51 The continued use of the word 'under' which had been thought apposite to the expression 'under a single…developer' as well as to 'under a single management', suggests that it should have a meaning like 'dependent on the efforts of'. 52 The other two changes suggest that the extent of the complex, that is its boundaries (which need no longer be contiguous, provided that the centre constitutes a single 'complex'), are to be determined by looking to the singularity or unity of its mode of management. 53 Quite apart from the history of the Rule, when one searches to understand the policy behind the terms of the Rule, that purpose of the qualifier 'under a single management' is, it seems to me, the most likely one. Ordinary observation of the development of shopping facilities in this country suggests that something that might itself be identifiable as a 'shopping complex' may adjoin or may nearly adjoin other shops and commercial premises. In such cases, for the purposes of the Rule in question, some notion is necessary to fix the boundaries of the aggregation that comprises the complex. This suggests that the idea of a single management was to serve such a delimiting purpose. There is no other legislative criterion that would fulfil that necessary function: the word 'complex' in the context of the real variety of shopping centres itself provides little help. 54 It is logically possible that, when the Rule was redrawn, the framers of it discarded the sufficiency of a site that had had a single developer but multiple 'managements' for some reason other than boundary-setting. However, neither counsel could, nor can I, suggest any such reason. It is therefore more likely that the drafters of the Rule sought to make more concrete the size requirements for a qualifying shopping centre and to emphasize the present circumstances of the complex rather than historical factors concerning its creation. 55 All of this, in my opinion, is supported by the Rule's somewhat ungainly use of the term 'under a single management' rather than something simpler like 'having a single manager'. The expression 'a management' might, with at least equal ability, refer to a system, manner or, as I prefer, regime, of managing, as to the person or entity doing the managing. If the latter had been intended, a reference to 'a manager' would have been simpler, more natural and unmistakeable. 56 If so much be granted, then it is of no moment whether there is one manager, two or more managers in partnership, or two or more managers informally cooperating, provided that the actual management, purposes and practices are so significantly commonly focused, mutually alike and interdependent that one can see that there is a single regime of management. If multiple managers agree on and carry through - (i) a single object of management, such as to entice potential customers of any shop in the complex into the complex as a whole in the hope that one or more of the other shops will also benefit from such customers' presence; (ii) a common regime of managing such matters as pedestrian or vehicular traffic, cleanliness, security and so on, so as to facilitate customers' use of all shopping facilities of the complex; and (iii) a mode of management that identifies the complex as a whole as the place of a discrete and convenient or comprehensive shopping experience; then it seems to me that the purposes of the Rule are fulfilled. 57 It is a simple enough administrative question to ask (a) who is/are the manager(s), and (b) if more than one, do they together so manage the complex? That the answer to the second of these questions may require judgment or assessment of subordinate facts is neither surprising nor untoward in a complex society. 58 Accordingly, the correct question for the Tribunal to ask, in my opinion, was whether there is a single regime of management - a system of management that is sufficiently integrated so as to allow a clear definition of the extent of one shopping complex. 59 That is not to say, however, that the importance of satisfying the respondent of an actual single management regime is diminished in any way. It will not be sufficient, for example, for a pharmacist to claim that a more or less adjacent group of shops operates as a 'large shopping centre' if the reality is that there is no actual and single regime of management. 60 No unduly narrow approach should be taken as to what constitutes 'management'. The matters to be taken into account will depend entirely on the individual circumstances of the case. It may be relevant to examine any of a number of factors, including but of course not limited to ownership, control over tenants, security, traffic control, signage (including any single colour etc., or common theme in decoration), marketing, maintenance of common areas, and engagement of contractors or otherwise. However, consideration of any such factors should always be with a view to answering the key question of whether the degree of cooperation in those management arrangements is sufficiently singular so as to enable the extent of the shopping centre to be established. 61 It is important to note that the relevant concept is management of the shopping complex rather than of individual shops that are part of it. The complex includes common areas including means of access. A relevant question therefore appears to be: is there a single (regime of) management insofar as there can be for a complex comprised of shops that may be individually owned and/or controlled? 62 This was not the approach taken by the Tribunal. Instead, the physical limits of what might be the relevant shopping complex were common ground and the question of single management was addressed separately. In addition, the Tribunal felt obliged to apply a narrow construction of 'single management' so as to require that there be one manager over the entire complex. Had the Tribunal approached the criteria by asking a different question and had the Tribunal's attention been drawn to the possibility of an alternative construction of the Rules that would promote their object, rather than produce what the Tribunal itself regarded as an anomalous result, a different result may well have occurred. Accordingly, there has been an operative error of law. 63 Both parties agreed before this Court that the ShopSmart/ALDI complex was a shopping complex and the Tribunal found to this effect. The requisite leasable space, supermarket and car park elements were also not in dispute. However, it was not conceded by the respondent that, assuming that a single regime of management constituted by independent managers acting co-operatively, whether through formal or express arrangements or not, might constitute 'a single management', there was, on the facts, such a regime. That issue must therefore be addressed. 64 Counsel for the applicants submitted that there was sufficient material before the Court to enable a finding that there was a single regime of management within the boundaries found by the Tribunal. 65 The Tribunal decision itself also referred to a letter dated 13 June 2003, in which Mr Marsh, centre Manager of ShopSmart for CB Richard Ellis stated: '[T]he property, ShopSmart Outlet Centre, Mt. Druitt, is registered as a freehold title; as is the adjacent site containing the Aldi Supermarket. The precinct is managed as a coordinated development with separately owned but shared car parks and access ramps between buildings. The Aldi Supermarket was considered as part of the overall development and is considered as an essential part of the retail offer of the precinct.' 66 The respondent maintains that the points outlined in the joint letter from Stockland and ALDI (set out at [29] above), taken collectively, do not evidence a single management of a shopping centre. At best, the arrangement was one of disparate regimes of management undertaken by different managers who cooperated on some matters. 67 These, in my opinion, are submissions of some significance as to how I should dispose of the case. I have concluded that the Tribunal did not apply the correct legal tests. But, I am sorry - as to cost and time - to say that that conclusion does not, in my view, carry with it the necessary result that the Tribunal's final conclusion was wrong. In my opinion, on the material before the Tribunal, it might have rationally come to a view either that the complex was 'under a single management' or that it was not. It is a matter for assessment. When two views are possible, my own perhaps evident preference is irrelevant. The Tribunal might (even though exceptionally, as the parties were capably legally represented) have decided to seek more information, pursuant to its power under the Administrative Appeals Tribunal Act 1975 (Cth) (ss 37 and 38) to inform itself as it might think fit. 68 It seems to me that there is no fair alternative to remitting this matter to the Tribunal for reconsideration in the light of these reasons. 69 Given the conclusion I have reached, it is not necessary to determine the first and second grounds raised by the applicants.

DISPOSITION 70 The appeal will be upheld and the matter remitted to the Tribunal for reconsideration. The respondent will be ordered to pay the applicant's costs of the appeal. I certify that the preceding seventy (70) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Madgwick.

Solicitor for the Respondent: Australian Government Solicitor

Date of Hearing: 8 February 2005, 7 March 2005