[2011] NSWCA 107
Altz Pty Limited v Shellharbour City Council [2014] NSWLEC 1228
Bardsley-Smith v Penrith City Council (2013) 195 LGERA 34
Mr M Fozzard (Respondent)
Source
Original judgment source is linked above.
Catchwords
[2011] NSWCA 107
Altz Pty Limited v Shellharbour City Council [2014] NSWLEC 1228
Bardsley-Smith v Penrith City Council (2013) 195 LGERA 34Mr M Fozzard (Respondent)
Judgment (20 paragraphs)
[1]
Background
Unless otherwise stated, the following facts are either common ground or the subject of findings made by the primary judge that are not the subject of challenge.
The pharmacy conducted by the respondent occupies Lot 1 DP 1136897, Unit 101 (or "Tenancy 7") in the Greenway Plaza shopping complex ("Greenway Plaza") in Wetherill Park. The pharmacy is part of a medical complex within the Greenway Plaza (the "Greenway Medical Hub"), which contains offices and suites for a variety of health professionals. [2] The health services offered at the Greenway Medical Hub include dental, sleep assessments, pathology, radiology, pharmacy, sports medicine, physiotherapy, exercise physiology, podiatry, dietetics, NDIS, and counselling services. [3]
The plans for the pharmacy indicate that escalators connect the first floor of the Greenway Plaza to the floor containing the Greenway Medical Hub. On that floor, the escalators terminate adjacent to a sliding door entrance to a small rectangular space. Within that space is a smaller rectangular "counter island". As one moves through that area, the space opens up into a larger space which contains rows of shelving. This space is the pharmacy within the Greenway Medical Hub. The dispensary is located at the rear of this space. According to the primary judge, one entrance to the doctors' suites is located outside the Greenway Medical Hub. Bifold doors are located to the right of the reception desk in the doctors' suites which lead into the area of the pharmacy. [4]
Approval to operate a pharmacy at the Greenway Plaza was granted by the Pharmacy Council of New South Wales on 17 February 2020. [5] A lease was entered into on or about 1 April 2020. [6]
A complying development certificate ("CDC") for a fit out for a medical centre was issued on 30 September 2019. It described the "building classification/s" as "5" and described the scope of building works covered by the certificate as "[f]it out of existing tenancy 7 for new medical centre".
On 25 June 2020, an occupation certificate ("OC") was issued. [7] It also described the "building classification/s" as "5" and described the scope of building works covered by the certificate as "[f]it out of existing tenancy 7 for new medical Centre". In addition, against the description "Exclusions" the OC stated "Retail Pharmacy (not including Medical Pharmacy)". The primary judge noted the Building Code of Australia defines a "Class 5 Building" as "an office building used for professional or commercial purposes". [8] A "Class 6 building" is defined as "a shop or other building used for the sale of goods by retail or the supply or services directly to the public". [9]
Although it is not clear, it seems that the pharmacy commenced operations by no later than 17 November 2020. [10] It was not disputed that any member of the public could purchase items from the pharmacy; i.e. its sales were not restricted to persons who were patients of health care professionals at the Greenway Medical Hub.
The primary judge accepted the evidence of a Director of the respondent, Mr Yousef, who identified six categories of items sold in the pharmacy: (a) prescription or controlled medicines, (b) pharmacist only substances, (c) over the counter ("OTC") pharmaceuticals, (d) therapeutic goods, complementary or alternative medicines, (e) occupational therapy, mobility and physiotherapy products, and (f) items "described as complementary and ancillary to the maintenance or improvement of human health or the prevention of disease in humans". [11]
The category (f) items assumed some importance in the primary judge's reasoning. Although Mr Yousef said that various retail items commonly sold in pharmacies such as perfumes and sunglasses were not sold from the subject premises, [12] the primary judge also found that "members of the public can visit the pharmacy and purchase prescription and non-prescription medicines and other general items", the latter of which includes "prescription medicines, OTC pharmaceuticals… chewing gum, toothpaste, a hairbrush, hair ties and lip gloss" as well as "hand sanitiser, baby formula and baby wipes, and other food items such as mints and jellybeans". [13] Nevertheless, the primary judge found that the sale of category (f) items was "minor in the overall operation of the pharmacy business" and "complementary to other categories" of products sold. [14] Her Honour accepted Mr Yousef's evidence that category (f) items comprised around 4% of total sales, sales of medicines comprised 76%, sales of therapeutic goods, complementary and alternative medicines comprised 11% and sales of occupational therapy, physiotherapy and mobility goods comprised 9%. [15]
Three further findings of the primary judge should be noted.
First, the primary judge accepted Mr Yousef's evidence to the effect that the pharmacy operates as part of the Greenway Medical Hub in that "the pharmacists and the other health professionals... work together and consult each other regularly" about such matters as pharmacy stock and advice in relation to the use of medicines. [16]
Second, the primary judge noted that Mr Yousef agreed that the pharmacy's practice of selling to the public "could be stopped in a straightforward way by instructing the pharmacists not to". [17] However, a pharmacist who works in the pharmacy, Mr Alpeto, expressed concern about whether restricting sales to patients of other health care professionals in the Greenway Medical Hub was consistent with his ethical duties. [18] He said he was concerned about whether he could ethically refuse to supply a product when other pharmacists were out of stock of that product. [19] He was also concerned about refusing to supply a patient or customer who needed stock in an emergency. [20]
Third, the primary judge also referred to and accepted Mr Yousef's evidence about the advice given by pharmacists as follows: [21]
"It is the practice of Greenway Medical Hub that every patient receives advice on medicines their doctor has prescribed, notwithstanding where their prescription originated, as that is the pharmacist's duty of care to their patients. That health advice includes warnings, conditions or requirements relating to the medicine. Persons often visit the pharmacy initially as a first point of call, then decide to visit or are referred to a doctor or other health practitioner at the Greenway Medical Hub."
[2]
The Planning Instrument
Greenway Plaza is located on land zoned B5 business development under the Fairfield Local Environmental Plan 2013 ("FLEP"). The "Land Use Table" to the FLEP (the "Table") specified forms of development that were permitted without consent, permitted with consent and prohibited. For land zoned B5, item 3 of the Table specified various uses that were permitted with consent, including "[s]pecialised retail premises" and "[a]ny other development not specified in item 2 or 4". It is not necessary to describe "specialised retail premises" other than to note that other parts of Greenway Plaza include development that answers this description. Item 4 of the Table specifies numerous forms of prohibited development including agriculture, amusement centres, crematoria and residential accommodation. One form of prohibited development is "[c]ommercial premises".
The Dictionary to the FLEP (the "Dictionary") defines several relevant terms, including "commercial premises" as meaning any of "(a) business premises, (b) office premises, [or] (c) retail premises".
Business premises is defined as:
"a building or place at or on which -
(a) an occupation, profession or trade (other than an industry) is carried on for the provision of services directly to members of the public on a regular basis, or
(b) a service is provided directly to members of the public on a regular basis… but does not include… [a] medical centre." (emphasis added)
A "medical centre" is defined as:
"premises that are used for the purpose of providing health services (including preventative care, diagnosis, medical or surgical treatment, counselling or alternative therapies) to out-patients only, where such services are principally provided by health care professionals. It may include the ancillary provision of other health services." (emphasis added)
A "health care professional" is defined as "any person registered under an Act for the purpose of providing health care".
Of present relevance is the definition of "retail premises":
"retail premises means a building or place used for the purpose of selling items by retail, or hiring or displaying items for the purpose of selling them or hiring them out, whether the items are goods or materials (or whether also sold by wholesale), and includes any of the following -
…
(l) shops"
The Dictionary defines "shop" as:
"premises that sell merchandise such as groceries, personal care products, clothing, music, homewares, stationery, electrical goods or the like or that hire any such merchandise, and includes a neighbourhood shop and neighbourhood supermarket, but does not include food and drink premises or restricted premises." (emphasis added)
Thus, the use of premises as a "medical centre" is excluded from one limb of the definition of "commercial premises", being "(a) business premises". Provided it does not fall within another limb (or another prohibited use), it is a use that is permitted with consent under item 3 of the Table. The development and use of premises as "retail premises", including as a "shop", is prohibited. The appellants' principal contention, both at first instance and on appeal, is that the respondent is operating "retail premises" from the pharmacy, specifically a "shop", within the meaning of the above provisions of the FLEP.
[3]
Legislative Provisions
One complicating factor in ascertaining the legislative provisions governing the appeal concerns the significant amendments made to the Environmental Planning and Assessment Act 1979 (NSW) (the "EPA Act") by the Environmental Planning and Assessment Amendment Act 2017 (NSW) (the "Amending Act"). Most of those provisions came into effect on 1 March 2018. However, as explained below, the so-called "former building and subdivision provisions" of the EPA Act as previously in force had some continuing operation in respect of a "final occupation certificate in force under those provisions immediately before 1 December 2019" and "a development consent granted before that date" (Environmental Planning and Assessment (Savings, Transitional and Other Provisions) Regulation 2017 (NSW), regs 18 and 18A; "Transitional Regulation"). These provisions are considered below, but at this point it suffices to note that at first instance there was a dispute about whether some of the former provisions of the EPA Act were applicable. Given the view I take of reg 18A and the issues on appeal, it is only necessary to note the relevant provisions of the EPA Act as currently in force.
[4]
Restraining Prohibited Development
One basis for the relief sought by the appellants at first instance and in this Court, which was not dependent on the Transitional Regulation, was ss 4.3 and 9.45 of the EPA Act in their amended form which provide:
"4.3 Development that is prohibited
If an environmental planning instrument provides that -
(a) specified development is prohibited on land to which the provision applies, or
(b) development cannot be carried out on land with or without development consent,
a person must not carry out the development on the land.
Maximum penalty - Tier 1 monetary penalty.
…
9.45 Restraint etc of breaches of this Act
(1) Any person may bring proceedings in the Court for an order to remedy or restrain a breach of this Act, whether or not any right of that person has been or may be infringed by or as a consequence of that breach."
As noted, the appellants contended that the respondent's use of the land was prohibited by the FLEP and liable to be restrained as such.
[5]
Occupation Certificate
Another limb of the appellants' case sought to rely on the terms of the OC as a basis for prohibiting the respondent's use of the pharmacy, at least from selling items to members of the public. To that end, the appellants sought to rely on s 6.9(1)(a) of the EPA Act in its amended form which provides:
"6.9 Requirement for occupation certificate
(1) An occupation certificate is required for -
(a) the commencement of the occupation or use of the whole or any part of a new building, or
(b) the commencement of a change of building use for the whole or any part of an existing building."
At the hearing at first instance, the appellants also sought to rely on s 6.3(2) of the EPA Act in its amended form which provides, "[a] person must not, in carrying out any such work or activity, contravene a certificate under this Part that applies to the carrying out of the work or activity." A "certificate under this Part" includes a "construction certificate" and an "occupation certificate" (EPA Act, s 6.4(a) and (c)). The primary judge refused to allow the appellants to rely on this provision. A challenge to that refusal is taken up on appeal.
Relying on both ss 6.9 and 6.3, the appellants contended that the effect of the OC was to "exclude", and in effect prohibit, the respondent from conducting a "retail pharmacy" on the subject premises.
[6]
Occupation Certificate as Part of the Development Consent
A further limb of the appellants' argument sought to rely on so much of s 6(4) of the EPA Act in its amended form which provides, "[w]hen issued, an occupation certificate is taken to be part of the development consent to which it relates." According to this argument, the OC issued in June 2020, including the exclusion of use as a "retail pharmacy", forms part of the CDC issued in September 2019 and is enforceable as such. This aspect of the appellants' argument is further addressed below.
[7]
The Primary Judgment
The first substantive issue addressed by the primary judge was whether the respondent's conduct of the pharmacy constituted the use of the premises as a "shop" contrary to the FLEP. The primary judge noted the statutory scheme for regulating the activities of pharmacists, [22] the ethical duties imposed on pharmacists in dealing with patients [23] and the advice they provide. [24] Her Honour observed that "[g]iven the legislative regime for pharmaceuticals… I am not inclined to find that all categories of medicines should be considered personal care products falling within the definition of shop." [25] Her Honour also found: [26]
"Given the professional obligations of pharmacists I do not agree with the Applicants' submission that a pharmacy is synonymous with a shop in relation to the sale of medicine as identified in categories (a)-(c) [described by Mr Yousef] and reflecting the operation of the pharmacy in the medical centre in relation to categories (d) and (e)."
Having dismissed those categories of products, the primary judge observed that "[w]hether a shop use is occurring also depends on how the sixth [i.e. (f)] category identified by Mr Yousef is to be characterised." [27] Her Honour concluded: [28]
"The [(f)] category sales are ancillary to the pharmacy operation in that they can be considered complementary to other categories, as well as being able to be described as personal care products. While small in volume compared to the overall trade evidence they are not de minimis or trivial as the Respondent submitted. Considering Baulkham Hills [Shire Council v O'Donnell (1990) 69 LGRA 404] at [409]-[410] whereby an ancillary use may still be regarded as an independent use, an independent use as a shop is not established given that the sales of category [(f)] items are conducted within the footprint of the pharmacy identified on the CDC plans, are low in volume compared to the other categories of what is sold and are limited in range. No independent shop use is occurring at the pharmacy. No breach of s 4.3 of the EPA Act based on a shop use has been established."
This conclusion was sufficient to dispose of prayer 1 of the relief sought by the appellants, which was a declaration that the respondent was using part of the premises for a "retail pharmacy" in breach of s 4.3 of the EPA Act as amended. Prayer 2 sought a declaration that the use of the premises as a "retail pharmacy" was in breach of the CDC. Prayer 3 sought a declaration that the premises was being used without an OC authorising that occupation contrary to s 6.9(1)(a) of the EPA Act as amended. The "particulars" to the prayer asserted that the respondent was "conducting a retail pharmacy". As noted, at the hearing at first instance the appellants sought to amend prayer 3 to include a reference to s 6.3(2) of the EPA Act as amended. Her Honour characterised this as "a substantial amendment which was made very late". [29] Her Honour addressed that application and the claim for relief under prayer 3 as follows: [30]
"242. Prayer 3 seeks a declaration that the Respondent is operating without an OC and therefore in breach of s 6.9 of the EPA Act, because a retail pharmacy is being conducted. The Applicants sought in the alternative relief pursuant to s 109N(1) of the former EPA Act if Part 4A of the former EPA Act applies, which is the equivalent provision to s 6.9(1)(b) of the current EPA Act. The Applicants also sought to amend prayer 3 by adding a breach of s 6.3 of the EPA Act in the course of the hearing, which the Respondent opposed as a substantial amendment which was made very late, as indeed it was. Such an amendment if allowed appears essential to establishing a breach of the EPA Act given that s 6.9(1) and s 109N(1) simply identify the requirement for an OC and do not provide for a breach of the EPA Act for contravening a term of an OC. As the Respondent identified, there was no failure to issue an OC… The appropriate breach provision would be s 6.3 of the EPA Act, of which there was no equivalent in Part 4A of the former EPA Act. Even if Part 6 of the current EPA Act had applied I would not have formally allowed the amendment given its lateness for the reasons given by the Respondent.
243 Given prayer 2 (assuming that s 6.4 of the current EPA Act applies and the OC is incorporated into the CDC), prayer 3 (assuming that s 6.3 of the current EPA Act can be relied on contrary to my finding immediately above) and the alternative pleading relying on s 109N(1) (assuming that breach of the terms of an OC can arise under that provision) all rise and fall on whether a retail pharmacy is being conducted at the Greenway Medical Hub, I will consider that issue by construing the terms of the OC." (emphasis added)
Her Honour then addressed the second substantive issue, namely, whether the appellants had established that the respondent was conducting a "retail pharmacy" (as opposed to a "medical pharmacy") which was an excluded use in the OC. Her Honour construed the phrase "medical pharmacy" as a pharmacy "which largely, not necessarily exclusively, sells medicines to anyone" and contrasted it "with a 'full service' retail pharmacy which could conceivably sell all the items identified by Mr Yousef as not being sold in the pharmacy". [31] The primary judge rejected any distinction between the two terms being based on who the items could be sold to. Her Honour could not discern "any obvious planning purpose" which would restrict "the permissible use… [to] serving a limited group of people, the patients of the medical centre, and not any member of the public". [32] Her Honour concluded that, even if the conditions of the OC formed part of the CDC, no retail pharmacy was being conducted. [33]
Otherwise, the primary judge observed that, other than the terms of the OC and the CDC, "no constructional basis for finding that the pharmacy must operate solely to serve the needs of patients of other health practitioners and allied health professionals in the medical centre has been identified" and, as "no independent shop use, or retail pharmacy use, has been established", the appellants' amended summons had to be dismissed. [34]
[8]
Grounds 1−6 of the Appeal - Use as a "shop"
Grounds 1−6 of the appeal all concern the primary judge's approach in concluding that the respondent was not engaged in the prohibited use of the premises as a "shop" contrary to the FLEP and s 4.3 of the EPA Act.
The appellants contended that the primary judge erred in failing to apply the definition of "shop" to all of the items sold by the pharmacy rather than just those falling within category (f). They further contended that, even if the pharmacy's "shop" use was considered to be ancillary to its "medical centre" use, it was nevertheless an independent, and thus prohibited, use. The appellants contended that her Honour erroneously treated the professional obligations of pharmacists as having the consequence that a sale of pharmaceuticals and medicines is "not to be equated with a retail sale transaction for the purposes of selling personal care products in a shop". [35] The appellants contended that the primary judge's findings about the range of products sold and consideration that they were available to anyone who entered the pharmacy meant that an independent use of the subject premises as a "shop" was established.
The respondent's submissions supported the primary judge's reasoning. They also contended that the conduct of the pharmacy fell within the definition of a "medical centre". Further, the respondent contended that, having regard to the validity of the CDC not being challenged and the appellants' concession that the sale of medicines and pharmaceuticals to out-patients of the Greenway Medical Hub was permissible, the primary judge was correct to focus on the significance of the sale of category (f) items.
[9]
Prohibited Uses
The characterisation of the use of premises involves ascertaining the purpose for which the various physical acts are being conducted on the land (Council of the City of Newcastle v Royal Newcastle Hospital (1957) 96 CLR 493; [1957] HCA 15 at 508; Abret Pty Limited v Wingecarribee Shire Council (2011) 180 LGERA 343; [2011] NSWCA 107 at [51]; "Abret"). Such uses are characterised liberally and are not confined to the precise activity on the land (North Sydney Municipal Council v Boyts Radio & Electrical Pty Ltd (1989) 16 NSWLR 50 at 59E; "Boyts"). The test is to determine the appropriate genus and not the species (ibid at 59E−F).
The use of land can be characterised as having more than one purpose, with each purpose relevantly separate to the other and characterised in accordance with established principles (Royal Agricultural Society of New South Wales v Sydney City Council (1987) 61 LGRA 305 at 311 per McHugh JA). However, where one purpose is subservient to the other, in the sense of being subordinate, incidental or ancillary, it is to be disregarded (Foodbarn Pty Ltd v Solicitor-General (1975) 32 LGRA 157 at 160−161 per Glass JA; "Foodbarn"). That said, "[w]here the whole of premises is used for two or more purposes none of which subserves the other, it is… irrelevant to inquire which of the multiple purposes is dominant"; if any one purpose is prohibited, it is "immaterial that it may be overshadowed by the others whether in terms of income generated, space occupied or ratio of staff engaged" (Foodbarn at 161). Further, even if one use can be said to be ancillary to another, it does not necessarily follow that it cannot be an independent use of the land; "[i]t is a question of fact and degree in all the circumstances of the case whether such a result ensues or not" (Baulkham Hills Shire Council v O'Donnell (1990) 69 LGRA 404 at 409−410 per Meagher JA; "O'Donnell").
Where a planning instrument is drafted such that certain defined uses are prohibited, the fact that the use might also fall within another defined term that is not expressly prohibited does not mean that the prohibited uses are limited by that definition (Egan v Hawkesbury City Council (1993) 79 LGERA 321 at 328−329; Hawkesbury City Council v Sammut (2002) 119 LGERA 171; [2002] NSWCA 18 at [23], approved in Abret). If the use of the land satisfies the definition of both the permitted and prohibited use, it is nevertheless prohibited. In such cases, "it is necessary to characterise the use, so that, if the purpose of the use is otherwise controlled under the [relevant planning instrument], the proposed use is controlled by that provision" (Abret at [62]).
The circumstances of Bardsley-Smith and Another v Penrith City Council and Ors (2013) 195 LGERA 34; [2013] NSWCA 200 ("Bardsley-Smith") have a number of similarities to these proceedings. The respondents were granted development consent for the use of premises in a shopping centre as a "Chemist Warehouse". A condition of the consent expressly contemplated that the premises could be used for retail sales, provided that the sales were "ancillary to the primary use of the premises as a distribution centre" (at [75]). A relevant Local Environment Plan ("LEP") enacted in 1996 (the "1996 LEP") provided that the use of the premises as a "shop" was prohibited, with the term "shop" relevantly defined as "a building or place used for the purposes of selling, exposing or offering for sale by retail goods, merchandise or materials" (at [17]; emphasis added). Another LEP enacted in 2010 (the "2010 LEP") permitted the use of the premises as "warehouse or distribution centres" with consent but again prohibited its use as a "shop"; "shop" was relevantly defined as "retail premises that sell groceries, personal care products, clothing, music, homewares, stationery, electrical goods or other items of general merchandise" (at [20]; emphasis added).
Sackville AJA, with whom McColl and Barrett JJA agreed, construed the development consent as permitting the use of the premises "as a retail pharmacy only for the supply to members of the public of PBS [i.e. pharmaceutical benefit scheme items] and OTC drugs" (at [87]). Adopting that construction, his Honour found that the development consent did not impermissibly purport to grant consent to the use of the premises as a "shop" because Commonwealth law mandated that to conduct an "ePharmacy" (which fell within a permitted use as distribution centre), it was obligatory to supply PBS items to members of the public (at [91]−[94]). Thus, the sale of those products was ancillary to the distribution purpose (at [92]).
However, the appeal in Bardsley-Smith was upheld as Sackville AJA found that the use of the premises to conduct a "large scale retail pharmacy" was "for the purposes of a shop" (at [100]). The pharmacy advertised itself as open to the public, PBS and OTC drugs accounted for only a small proportion of its sales and the "retail pharmacy" was conducted by a separate legal entity to the ePharmacy (at [104]−[105]). His Honour concluded (at [118]−[119]):
"On the evidence, the Premises are used for at least two different purposes. One purpose is as a distribution centre, including the ePharmacy. The second purpose is as a 'shop' as that term is defined both in the 1996 LEP and the 2010 LEP. The Premises are and have been
a building or place used for the purpose of selling, exposing or offering for sale by retail goods, merchandise or materials (1996 LEP).
The Premises are and have also been used as:
retail premises that sell ... personal care products ... or other items of general merchandise (2010 LEP).
For the reasons that have been given, the use of the Premises as a retail pharmacy cannot be characterised as subordinate or subservient to use as a distribution centre. Use as a retail pharmacy is for an independent purpose - that is, the large-scale retailing of pharmaceutical and related products. This use is for the purpose of a 'shop' as that term is defined in both the 1996 LEP and the 2010 LEP and is therefore unlawful.
The position would be different if the retail pharmacy supplied only PBS items and OTC drugs to members of the public. There may be an issue, not addressed in argument, as to whether such a limited retail activity is within the definition of a 'shop' in the 2010 LEP. But even if it is, the limited use would have been subordinate to use of the Premises for the purpose of a distribution centre authorised by the Consent granted under the 1996 LEP."
The premise of this passage and the balance of Bardsley-Smith is that the sale of all forms of pharmaceutical items, including medicines and pharmaceuticals, amounted to the sale of "merchandise" within the meaning of the 1996 LEP and, with the possible exception of PBS items and OTC drugs, the sale of "general merchandise" within the meaning of the 2010 LEP.
[10]
Use as a "Shop"
The prohibited use relevant to this case is "shop", which extends to selling "merchandise" including "personal care products" (see above at [23]). "Shop" is a form of retail premises, being a building or place used for the purpose of selling "items by retail" (see above at [22]). The definition of "medical centre" operates as an exception to the definition of "business premises", which is itself a prohibited use (see above at [20]). Consistent with Abret (see above at [42]), the definition of "medical centre" does not limit the meaning of "shop" or "retail premises".
The primary judge's approach was first to reject the suggestion that the sale of items in categories (a)−(e) (noted above at [11]) constituted the sale of "personal care products", especially when having regard to the professional obligations of pharmacists. With respect, this approach was erroneous. Regardless of whether the sale of medicines and the like can be described as "personal care products" (cf Altz Pty Limited v Shellharbour City Council [2014] NSWLEC 1228 at [23]), they certainly constituted "merchandise" and "items sold by retail" (Bardsley-Smith at [100]−[101] and [118]−[119]). Further, the fact that, in selling the products, the pharmacists were subject to professional obligations does not alter the proper characterisation of the transactions conducted at the subject premises as being the sale of "merchandise" or "items". The obligations of the pharmacists only attach to the sale of medical products in a similar way that those who sell, say, pesticides or even hardware might proffer advice in connection with their sale of products.
From this erroneous premise, the primary judge reasoned that the sale of items in category (f) was "ancillary to the pharmacy operation" such that they could supposedly be ignored by applying Foodbarn (at 160−161). This aspect of her Honour's reasoning assumed that a "pharmacy operation" was a permitted use, a conclusion which could only be reached if the pharmacy's operations did not answer the descriptions "retail premises" and "shop", which they did.
This does not complete the analysis that the pharmacy's operations formed part of a "medical centre". Both at first instance and in this Court the appellants were prepared to accept that, to the extent that the pharmacy engaged in the sale of medicines, pharmaceuticals and medical items to patients of other health care professionals working within the Greenway Medical Hub, then its activities could be "fairly characterised as incidental, non-independent and ancillary to the medical centre". I see no reason not to act on that concession and, in light of the primary judge's findings (see [12]), extend it to the small number of category (f) items that may be sold to those patients.
However, this still leaves the sale of medicines and pharmaceutical items to persons who are not patients of other health care professionals at the Greenway Medical Hub. Such sales are independent of any use of the pharmacy that is ancillary to the conduct of a medical centre at the Greenway Medical Hub. As noted, Mr Yousef agreed that it was relatively straightforward to cease supplying products to members of the public who walked into the pharmacy. The only matter suggesting that undertaking such sales to members of the public was somehow connected to the conduct of the pharmacy for Greenway Medical Hub patients was the evidence of one pharmacist who raised a concern about refusing to supply a medicine or pharmaceutical to a customer when other pharmacists were out of stock or in the case of an emergency. The short answer to that submission is that, in those rare cases, the pharmacists' ethical concerns can be addressed by supplying the product without charge to the customer. If the pharmacists need to discharge their ethical duty by supplying the product to a customer who walks in off the street without charging, they can do so. The definitions of "retail premises" and "shop" are only engaged if items or merchandise are sold, not given away.
In written and oral argument, counsel for the respondent submitted that the operation of the pharmacy answered the description of "medical centre" in that pharmacists were providing "health services" to "out-patients" and that such "services… [were] principally provided by health care professionals", being pharmacists said to be persons registered under an Act, [36] for the purpose of providing health care. Counsel relied on the evidence and findings noted above concerning the professional obligations of pharmacists and the advice they provide to customers. As noted, those obligations and advice all attach to the sale of items or merchandise by the pharmacy; they are ancillary to those sales and not vice-versa. I do not accept that the provision of advice in relation to the sale of medicines and pharmaceutical items to customers who enter the pharmacy from Greenway Plaza could be characterised as the provision of "health services" to "out-patients" such as to satisfy the definition of "medical centre". The phrase "out-patient" connotes a relationship constituted by more than just the sale of a medicine or pharmaceutical. However, it does not matter. Even if the conduct of the pharmacy might answer the description "medical centre" in its own right that
does not mean that it cannot also answer the descriptions "retail premises" and "shop". It is that use which is prohibited by the FLEP and "controlled by that provision" (Abret at [62]).
As noted, the respondent's written submissions also sought to place some reliance on the CDC. However, the present context concerns the appellants' reliance on s 4.3 of the EPA Act and the proposition that the respondent is conducting an activity on the subject premises, the purpose of which is prohibited. Nothing concerning this limb of the case turns upon the terms of any development consent.
[11]
Conclusion on Grounds 1−6
I would uphold grounds 1−6. The appellants have established that the subject premises was used to conduct a "shop" contrary to the FLEP. Given the appellants' concession, the appropriate relief is to restrain the respondent from making retail sales to persons who are not patients of other health care professionals at the Greenway Medical Hub. The form of relief is further addressed below.
[12]
Grounds 9−12: The Occupation Certificate
It is convenient to deal with grounds 9−12 next. Three of these grounds address the primary judge's approach to prayer 3 of the relief sought at first instance, which related to enforcement of the OC. Ground 9 contends that her Honour erred in not finding that the subject premises was being used as a "retail pharmacy". Ground 10 is related and contends that her Honour should have found that the premises was being used "contrary to either s6.9(1)(a) and/or s6.3(2) of the [EPA Act as amended], or in the alternative, s 109N(1) of the repealed Part 4A". Implicit in that ground is the contention that her Honour erred in refusing leave to rely on s 6.3(2) of the EPA Act. Ground 11 contends that the primary judge erred in not applying the provisions of Pt 6 of the EPA Act as amended as opposed to the earlier provisions. Ground 12 is addressed below.
[13]
Regulation 18A
The starting point is the issue raised by ground 11, namely, the application of regs 18 and 18A of the Transitional Regulation which provide:
"18 Postponement of revised building and subdivision certification provisions
…
(2) Until 1 December 2019, Part 6 of the Act (as inserted by the amending Act), other than Division 6.7, does not apply and the former building and subdivision provisions continue to apply in respect of a matter (whether or not the matter was pending on the repeal of those provisions).
…
18A Continuation of matters arising under former building and subdivision certification provisions
The former building and subdivision provisions continue to apply, despite their repeal, to or in respect of the following -
(a) an interim occupation certificate or final occupation certificate in force under those provisions immediately before 1 December 2019,
(b) a development consent granted before that date."
The phrase "former building and subdivision provisions" is defined by reg 4 of the Transitional Regulation to mean:
"(a) sections 81A(2)-(6) and 86 of the Act, as in force immediately before the substitution of those provisions by the amending Act, and
(b) Part 4A of the Act, as in force immediately before the repeal of that Part by the amending Act, and the regulations made under that Part as so in force."
The only provision that is potentially relevant to this aspect of the appellants' case is reg 18A. Regulation 18 is irrelevant as 1 December 2019 has passed. Regulation 18A does not expressly state that Pt 6 of the EPA Act as amended does not apply where the former building and subdivisions provisions do apply. The primary judge regarded it as implicit that, where reg 18A is engaged, Pt 6 of the EPA Act as amended does not apply. [37] (Sections 6.3(2) and 6.9 form part of Pt 6). Leaving that aside, this aspect of the appellants' case concerned the enforcement of an OC issued on 25 June 2020. It follows that reg 18A is not engaged as no OC was in force under those provisions immediately before 1 December 2019. At the hearing of the appeal, counsel for the respondent accepted that was so.
The primary judge concluded that sub-reg 18A(b) was engaged in respect of the CDC because it was issued prior to 1 December 2019, with the consequence that "former Part 4A continues to apply to the CDC and consequently to the OC issued after 1 December 2019" (emphasis added). [38] With respect, I do not accept that the latter follows from the former. As just noted, this aspect of the case involves the enforcement of the OC, not the CDC. Even if s 6(4) of the EPA Act as amended had the effect of making the conditions of the OC a condition of the CDC, the reverse does not apply. I would uphold ground 11.
[14]
Reliance on s 6.3(2) of the EPA Act
The next issue concerns the primary judge's refusal to allow the appellants to rely on s 6.3(2) of the EPA Act. In the passage set out above (at [34]), her Honour rejected the application to rely on s 6.3(2) because of her Honour's conclusion that reg 18A rendered the provision inapplicable. I have just rejected that construction. However, her Honour added, "[e]ven if Part 6 of the current EPA Act had applied I would not have formally allowed the amendment given its lateness for the reasons given by the Respondent." [39] With respect, I do not accept that was a proper basis for rejecting an attempt to amend a prayer for relief to invoke s 6.3(2) of the EPA Act. As the balance of her Honour's reasons demonstrate, the (only) substantive issue that would have arisen if the amendment had been allowed was whether the respondent was conducting a "retail pharmacy". That issue arose anyway and her Honour addressed it. Reliance on s 6.3(2) of the EPA Act caused no difficulty for the respondent at first instance. The primary judgment recounts the respondent's submissions addressing its application. [40] The proposed amendment only concerned a statutory provision referred to in a declaration. It added no "cause of action" and did not raise any additional issue for the parties. The "amendment" should have been allowed.
[15]
Retail Pharmacy?
The OC authorised a fit out for a new medical centre and excluded the conduct of a "[r]etail pharmacy (not including [a] [m]edical [p]harmacy)". It was not disputed that its effect was to restrict the carrying out of work or activity that constituted a "retail pharmacy". Like the primary judge, I do not derive any assistance in construing the restrictions and exclusions in the OC from the classification of the building as class 5 or class 6.
The primary judge's reasons for rejecting the contention that the subject pharmacy was being used as a retail pharmacy are set out above (at [35]). One aspect of the construction of the OC is that, like a development consent, it should be construed in the context of, and consistent with, the relevant planning instrument (see, for example, Woolworths Ltd v Campbells Cash & Carry Pty Ltd (1996) 92 LGERA 244 at 245; "Woolworths"; Bardsley-Smith at [73]−[74]). In this case, the phrases "retail pharmacy" and "medical pharmacy" should be seen, in the case of the former, as reflective of the definitions of "retail premises" and "shop", and an ancillary, non-independent use of a pharmacy or dispensary for out-patients of a medical centre, in the case of latter. Considered in that way and contrary to the primary judge's approach, the "obvious planning purpose" in distinguishing between serving out-patients and other members of the public is the planning purpose reflected in the terms of the FLEP which prohibits the use of the subject land for "retail premises". Consistent with the terms of the FLEP, the distinction between a "retail pharmacy" and a "medical pharmacy" is between the sale of pharmaceuticals, medicines and medical items to the public (Woolworths at 257−258) and the dispensing of such products to out-patients of other health professionals at the Greenway Medical Hub as might occur with a medical pharmacy or dispensary in a hospital. It follows from the primary judge's findings that the subject premises has been used as a retail pharmacy, contrary to the exclusion of such use in the OC.
For the sake of completeness, I share the primary judge's doubts that, even if it were concluded that the respondent was conducting a retail pharmacy, it would mean there was a contravention of s 6.9(1) as opposed to s 6.3(2) of the EPA Act as amended. Nothing in the text of s 6.9(1) engages any condition of the OC.
Nevertheless, it follows that I would also uphold grounds 9−11.
[16]
Ground 12 - Incorporation
Ground 12 contends that the primary judge "erred in not finding that the terms of the OC, and in particular the exclusion of the use of the subject premises as a 'retail pharmacy', were incorporated into the CDC by operation of s 6.4 of the [EPA Act as amended]".
The appellants' written submissions treated ground 12 as though it were connected to so much of their case that sought to rely on the terms of the OC in support of a claim for declaratory and injunctive relief. However, during argument, counsel for the appellants accepted that s 6.4 of the EPA Act as amended was irrelevant to this aspect of their case and was only relevant to so much of their case as concerned enforcement of the CDC. I will address the balance of the grounds concerning the CDC shortly, but in short, they do not add anything to the above conclusions and need not be addressed.
[17]
Conclusion on OC grounds
I would uphold grounds 9−11 and so much of the appellants' case that rested on establishing a contravention of the OC's exclusion of a "retail pharmacy" as a use of the subject premises.
[18]
Grounds 7 and 8: The CDC
Ground 7 of the appeal contends that the primary judge "erred in not finding that, as the subject premises was a retail pharmacy or shop, they were being used contrary to [the] CDC… which authorised use as a medical centre only". Ground 8 of the appeal contends that the primary judge erred "in not finding that the CDC… only authorised use as a Class 5 building under the Building Code of Australia, rather than a Class 6 building or shop".
Ground 7 raises an issue about the application of reg 18A and effect of s 6.4 of the EPA Act as amended on the possible incorporation of the OC's exclusion of a retail pharmacy into the CDC. Even if both grounds were resolved in favour of the appellants, they would not lead to any more favourable form of relief than that which would follow from their success on the other grounds. In those circumstances, it is not necessary to consider these grounds further.
[19]
Relief Sought
The Notice of Appeal sought the following relief in the event the appeal succeeded:
"(a) Declaration that the use of the premises known as Tenancy 7 Greenway Medical Centre, Greenway Plaza at Suite 1, Level 1, Greenway Plaza, 1183-1187 The Horsley Drive, Wetherill Park, as a retail pharmacy is in breach of s4.3 of the Environmental Planning and Assessment Act 1979 being the prohibited use of a 'shop'.
(b) Declaration that the use of the premises known as Tenancy 7 Greenway Medical Centre, Greenway Plaza at Suite 1, Level 1, Greenway Plaza, 1183-1187 The Horsley Drive, Wetherill Park, as a retail pharmacy or shop is in breach of Complying Development Certificate NW 19/4387 granted on 30 September 2019.
(c) Declaration that the use of the premises known as Tenancy 7 Greenway Medical Centre, Greenway Plaza at Suite 1, Level 1, Greenway Plaza, 1183-1187 The Horsley Drive, Wetherill Park, as a retail pharmacy or shop is in breach of s6.9(1) of the Environmental Planning and Assessment Act 1979, or the former s109N if that continues to apply, as a use carried out without an occupation certificate, or in the alternative, a breach of s6.3 of that Act by reason of it being a retail pharmacy contrary to the limitation in Occupation Certificate OC NW 19/438.
(d) Order that the Respondent, and any agent, servant, employee or contractor of the Respondent not use the subject premises as a retail pharmacy or shop, and that any pharmacy or dispensary at the premises be restricted to dispensing PBS items, Prescription drugs, or OTC drugs to patients of medical practitioners in the Greenway Medical Centre." (emphasis added)
The form of the three declarations is similar to that which was sought at first instance. They are problematic and apt to confuse. Each of the declarations simply recount that the use of the subject premises as a "retail pharmacy" or "shop" is a breach of a statutory provision or relevant certificate. As such, these declarations do not purport to resolve any matter that was truly in dispute, being whether the subject premises was being used as a "shop" or "retail pharmacy". Moreover, the first proposed declaration uses the phrase "retail pharmacy" which is irrelevant to an alleged breach of s 4.3 of the EPA Act as amended. The second and third proposed declarations use the phrase "retail pharmacy or shop" when the word "shop" is not found in the OC or CDC.
The only form of declarations that might be made in such a case is to declare that some conduct engaged in by the respondent during a specified period was a breach of either ss 4.3 or 6.3(2) of the EPA Act. However, given that the declarations were only meant to be a step towards an injunctive order, I do not consider that making a declaration has any utility.
The form of injunction sought by sub-par (d) suffers from similar problems to the declarations. To purport to restrain the respondent from the use of the subject premises as a "retail pharmacy or shop" would only invite a re-agitation of many of the same issues that were dispute in these proceedings if contempt proceedings are taken for breach of the injunction. An injunctive order should specify the precise conduct the restrained party must not engage in. In this case, given the manner in which the appellants framed their case on appeal and the above findings, I propose that the Court grant an injunctive order that reflects the definition of "retail premises" and "shop" as well as the concession noted in [50]. To enable the respondent time to put in place steps to comply with the injunction, I propose that it be stayed for a period of three days.
As the appellants have substantially succeeded on the appeal, I propose that the Court make orders for the payment of their costs at first instance and on appeal.
Accordingly, I propose the following orders:
(1) Appeal allowed;
(2) The orders made by Pain J on 27 July 2022 be set aside, and in lieu thereof, order that:
(a) Pursuant to s 9.45 of the Environmental Planning and Assessment Act 1979 (NSW), the respondent, its agents, servants or employees, be restrained from making, or offering to make, any retail sale of any item from the premises known as Tenancy 7 Greenway Medical Centre, Greenway Plaza at Suite 1, Level 1, Greenway Plaza, 1183-1187 The Horsley Drive, Wetherill Park, to any person who is not an out-patient of a health care professional of the Greenway Medical Centre located within Greenway Plaza, Wetherill Park, where:
(i) "health care professional" means any person registered under an Act for the purpose of providing health care but not a pharmacist; and
(ii) "retail sale" means sale to a member of the public but does not include any wholesale supply or any sale to any other pharmacy, wholesale supplier, medical practitioner or health practitioner;
(b) The respondent pay the appellants' costs of proceedings 2021/00117816 in the Land and Environment Court; and
(c) The appellants' amended summons dated 16 November 2021 filed in proceedings 2021/00117816 in the Land and Environment Court be otherwise dismissed.
(3) The respondent pay the appellants' costs of the appeal.
(4) Order 2(a) be stayed up to 5.00pm on 25 May 2023.
MITCHELMORE JA: I agree with Beech-Jones JA.
[20]
Endnotes
Bronger v Greenway Health Centre Pty Ltd t/as Greenway Plaza Pharmacy [2022] NSWLEC 91; "Bronger".
Bronger at [2].
Bronger at [104].
Bronger at [80].
Bronger at [103].
Bronger at [103].
Bronger at [103].
Bronger at [17].
Bronger at [18].
Bronger at [97].
Bronger at [228].
Bronger at [123].
Bronger at [207].
Bronger at [236]−[237].
Bronger at [236].
Bronger at [209].
Bronger at [127].
Bronger at [135]−[136].
Bronger at [135].
Bronger at [135].
Bronger at [115].
Bronger at [226].
Bronger at [229].
Bronger at [232].
Bronger at [232].
Bronger at [233].
Bronger at [234].
Bronger at [237].
Bronger at [242].
Bronger at [242]−[243].
Bronger at [245].
Bronger at [246].
Bronger at [249].
Bronger at [250]−[251].
Bronger at [232].
Being either or both of the National Health Act 1953 (Cth) and Poisons and Therapeutic Goods Regulation 2008 (NSW).
Bronger at [65].
Bronger at [73].
Bronger at [242].
Bronger at [199]−[200].
DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.
Decision last updated: 22 May 2023
Parties
Applicant/Plaintiff:
Bronger
Respondent/Defendant:
Greenway Health Centre Pty Ltd t/as Greenway Plaza Pharmacy
Legislation Cited (7)
Environmental Planning and Assessment Amendment Act 2017(NSW)
(Environmental Planning and Assessment (Savings, Transitional and Other Provisions) Regulation 2017(NSW)
[2011] NSWCA 107
Altz Pty Limited v Shellharbour City Council [2014] NSWLEC 1228
Bardsley-Smith v Penrith City Council (2013) 195 LGERA 34; [2013] NSWCA 200
Baulkham Hills Shire Council v O'Donnell (1990) 69 LGRA 404
Bronger v Greenway Health Centre Pty Ltd t/as Greenway Plaza Pharmacy [2022] NSWLEC 91
Council of the City of Newcastle v Royal Newcastle Hospital (1957) 96 CLR 493; [1957] HCA 15
Egan v Hawkesbury City Council (1993) 79 LGERA 321
Foodbarn Pty Ltd v Solicitor-General (1975) 32 LGRA 157
Hawkesbury City Council v Sammut (2002) 119 LGERA 171; [2002] NSWCA 18
North Sydney Municipal Council v Boyts Radio & Electrical Pty Ltd (1989) 16 NSWLR 50
Royal Agricultural Society of New South Wales v Sydney City Council (1987) 61 LGRA 305
Woolworths Ltd v Campbells Cash & Carry Pty Ltd (1996) 92 LGERA 244
Category: Principal judgment
Parties: Catherine Bronger (First Appellant)
John Bronger (Second Appellant)
Greenway Health Centre Pty Ltd t/as Greenway Plaza Pharmacy (Respondent)
Representation: Counsel:
Mr C Ireland (Appellants)
Mr C Bolger; Mr M Fozzard (Respondent)
Solicitors:
McPhee Kelshaw (Appellants)
Shiba Legal (Respondent)
File Number(s): 2022/248686
Decision under appeal Court or tribunal: Land and Environment Court
Jurisdiction: Class 4
Citation: [2022] NSWLEC 91
Date of Decision: 27 July 2022
Before: Pain J
File Number(s): 2021/117816