Hanna v Australian Community Pharmacy Authority

BLACK CJ & VON DOUSSA J: 1 This is an appeal from a decision of O'Loughlin J which dismissed an appeal from a decision of the Administrative Appeals Tribunal (AAT) given on 27 May 1997. 2 The matter has a long history. The appellant is a pharmacist who desires to carry on a pharmacy business in premises at Honeypot Shopping Centre, Honeypot Road, Hackham West, South Australia (the premises). To obtain the necessary permission to do so, on 8 May 1995 the appellant applied under s 90(1) of the National Health Act 1953 (Cth) (the Act) for approval as an approved pharmacist in respect of the premises. Section 90(1) provides: "Subject to this section, the Secretary may, upon application by a pharmacist who is willing to supply pharmaceutical benefits on demand at particular premises, approve that pharmacist for the purpose of supplying pharmaceutical benefits at or from those premises." 3 Pursuant to the requirement of s 90(3A) the application was referred to the respondent, the Australian Community Pharmacy Authority (the Authority). Subsection 90(3B) provides that approval may be granted under s 90 in respect of an application referred under s 90(3A) only if the Authority has recommended the grant of the approval, but the Secretary, Department of Health & Family Services may refuse to grant an approval even if the grant has been recommended by the Authority. 4 Section 99K(1) lists the functions of the Authority which includes the consideration of applications under s 90, and the making of a recommendation whether or not the application under that section should be approved. Section 99L imposes upon the Minister the obligation, among others, to determine: "…the rules subject to which the Authority is to make recommendations under subsection 99K(1);…" 5 It is common ground between the parties that the rules that are relevant for the purposes of these proceedings are those contained in Determination number PB 6 of 1995 made on 2 May 1995 with effect from 10 May 1995 (the 1995 rules). That Determination replaced the Determination number PB 9 of 1993, and has, in turn, been replaced by Determination number PB 18 of 1995 which came into effect on 1 January 1996. 6 The 1995 rules specify the circumstances and conditions under which the Authority may or may not recommend approval. It is sufficient for the purposes of this appeal to refer to sub-para (a)(i) and (ii) of r 5 which provides: "5. Approval of a pharmacist under section 90 of the Act in respect of particular premises must be recommended if: (a) (i) those premises are situated at least two kilometres, measured door to door by the shortest lawful access route, from the nearest other premises in respect of which a pharmacist is approved under section 90 of the Act; and (ii) the Authority is satisfied that there is a definite community need for pharmaceutical services in the area in which those premises are situated; and (iii) … (not relevant)" 7 The expression "definite community need" is defined in r 2 as follows: "'definite community need' in relation to the catchment area serviced or proposed to be serviced by a pharmacy, means that none of the following conditions applies to the area: (a) that the catchment area has a population of less than 3,000 for most of the year; (b) that the proportion of disadvantaged persons (aged persons and persons who are unemployed or receive pensions) is less than 10 per cent and can be reasonably serviced by other means; (c) that the catchment area does not have the equivalent of a full-time medical practitioner; (d) that the catchment area is being adequately serviced by other approved pharmacists; (e) that the total number of claimable PBS prescriptions and RPBS prescriptions claimed by approved pharmacists in respect of the catchment area in the last 12 months is less than 3,000; (f) that isolation from, or a poor, public transport system to adequate shopping does not hinder the bulk of the population; (g) that the population is mobile and contains a high proportion of commuting workers; (h) that the catchment area has no general shopping facilities;…" 8 On 6 September 1995 the Authority decided to recommend that the appellant's application not be approved because the requirements of r 5(a)(ii) were not met. The appellant applied to the AAT for a review of that decision. On 7 November 1996 the AAT set aside the Authority's decision and ordered that the matter be remitted to the Authority with a direction that the Authority recommend to the Secretary that the appellant's application be approved. It is convenient to refer to this decision as the AAT's "first decision". The Authority appealed to the Federal Court of Australia against the first decision pursuant to s 44 of the Administrative Appeals Tribunal Act 1975 (the AAT Act). The appeal was heard by Mansfield J who on 6 February 1997 ordered that the appeal be allowed and that the matter be referred back to the AAT for further consideration of its conclusion in relation to r 5(a)(i) of the 1995 rules in accordance with the reasons for decision. 9 Mansfield J held that the Tribunal misdirected itself in formulating the test of an "access route" for the purposes of r 5(a)(i). The effect of the decision of Mansfield J was otherwise to uphold the AAT's first decision that the appellant's application fulfilled the requirements of r 5(a)(ii), namely that there existed a definite community need for pharmaceutical services in the area in which the premises are situated. The outstanding issue for reconsideration by the AAT was whether the premises are situated at least two kilometres, measured door to door "by the shortest lawful access route" from the nearest other premises in respect of which a pharmacy is approved. 10 The AAT, constituted by the member who made the first decision, in its reconsideration purported to apply the test of an "access route" formulated by Mansfield J. The AAT on 27 May 1997 determined (in its "second decision") that the shortest lawful access route between the premises and the nearest existing pharmacy is the route indicated in an exhibit numbered R14(3), being a distance of 1,880 metres. That determination, if upheld, would have the consequence that the requirements of r 5(a)(i) are not fulfilled; the Authority would be obliged to recommend against the approval of the premises; and the Secretary would be obliged to refuse the appellant's application under s 90(1). 11 The appellant appealed pursuant to s 44 of the AAT Act against the second decision of the AAT. The grounds of appeal contended that the AAT had misapplied the test of an "access route" formulated by Mansfield J. O'Loughlin J dismissed that appeal, and the matter now comes on further appeal to this Court. 12 The premises are in the suburb of Hackham West, an outer southern suburb of Adelaide. They are situated in a small collection of shops known as the Honeypot Shopping Centre. The premises are some distance from the Colonnades Shopping Centre (the Colonnades) which is a substantial regional shopping centre. There are two existing pharmacies from which the dispensation of pharmaceutical benefits is approved in the Colonnades. The distance of the premises from each of the pharmacies in the Colonnades is approximately two kilometres. The precise distance varies according to the route along which it is measured. The critical outstanding question concerns the identification of the "shortest lawful access route" measured door to door from the premises to either of the pharmacies in the Colonnades. 13 The following description of the location is taken from the judgment of Mansfield J. Honeypot Road, on which the Honeypot Shopping Centre is located, runs roughly east and west. To drive to the Colonnades, one travels along Honeypot Road initially west and then to the north as it veers north to form the stem of a "T" junction with a road called Goldsmith Drive. Goldsmith Drive runs approximately east and west and at the junction one turns left again to travel west along Goldsmith Drive. A little distance along Goldsmith Drive it is necessary to turn right to travel roughly north into a roadway giving access to the eastern end of a substantial car parking area which is part of, and is provided for users of, the Colonnades. The car parking area is laid out so that a vehicle user could not drive diagonally across it. The distance which would be travelled by car from the premises to either of the pharmacies in the Colonnades is marginally over two kilometres. To walk that route, including using designated pedestrian pathways within the Colonnades car park area is a distance of 2,077 metres. In addition to walking routes which follow made pathways, there are three informal tracks across paddocks which the Authority contends should be used for the purposes of the measurement. The use of any of these tracks for part of the journey reduces the distance to under two kilometres. The various options produces a range between 1,985 metres and 1,820 metres. Each of the routes which incorporate the informal tracks involve cutting across open land on used dirt (in one case, partly dirt) informal pathways so as to create very roughly a diagonal passage against use of the made roadways and footpaths. 14 The paddocks traversed by the informal tracks are owned either by the South Australian Housing Trust or the Urban Planning Authority. The South Australian Housing Trust is the owner of the Colonnades, and evidence before the AAT led the AAT to find that persons using the informal tracks were doing so lawfully, in the sense that they entered the land as invitees. This finding has not been challenged in either of the appeals before Mansfield J and O'Loughlin J. The parties have accepted that each of the informal tracks, if it constituted an "access route", was a lawful one. We shall consider this appeal on that basis. However, our decision should not be taken as endorsement of the view that an entrant to private land who meets the traditional description of an invitee for the purposes of the law of tort is necessarily a lawful entrant for the purposes of the rules promulgated under s 99L of the Act. We have not heard argument on that question and prefer to leave it open. 15 In its first decision the AAT held that: "The Tribunal finds that the words 'lawful access route' in their totality require that a route be not only lawful, but also accessible. The word 'access' requires that the route have an element of accessibility in the sense that it be easily accessible, safe, and there are no impediments to its use such as the existence of barriers and obstacles in the path… The Tribunal … believes that in a society which promotes access and equity for disabled people and the old and infirm, and where planning steps are taken to improve access for disabled persons and minimise discrimination the Tribunal would have to take into account the ability of such persons to use the routes in question. The Tribunal has not limited this analysis merely to disabled persons, but has considered other groups of people for whom certain routes may be unsatisfactory, including the elderly and parents with young children." 16 The AAT found that none of the informal tracks satisfied the definition of a lawful "access route". In the case of the route marked on Exhibits R14(2) and R14(3) this finding was based partly on the existence of an embankment two to three metres high at the beginning of the track close to the intersection of Goldsmith Drive and Honeypot Road. In the routes marked on Exhibits R14(3) and R14(4) each track was subject to flooding, sections of each became muddy in wet weather, each was at times covered by tall grass, each was poorly lit, and there were realistic concerns for safety by users of the path. The conclusions about the informal tracks marked on Exhibits R14(2) and R14(4) were also based on findings on the evidence that the tracks were unsafe and unsuitable at certain times of the year, particularly in winter. The AAT found that it was not sufficient for the purposes of the 1995 rules that a route only be accessible for part of the year. The AAT found that there was a reasonable number of elderly people in the catchment area, as well as a large number of people with young children and a high percentage of single parents. By inference, the AAT found the tracks were unsuitable for use by these people. 17 On appeal, Mansfield J noted that the challenge to the AAT's decision addressed the meaning of "access" and that no question was raised about the lawfulness of the use of the tracks by members of the public. At his Honour's invitation, the Authority proposed a formulation of a legal test for the expression "access route" as: "A route generally available to be taken between approved premises and the proposed premises that could hypothetically be used by ordinary persons travelling that route." Mansfield J considered that the notion of "shortest lawful access route" measured door to door: "… provides a specific and inevitably somewhat arbitrary rule of thumb which must be met, irrespective of the community structure or its need, before a new approval under s 90 may be granted. It is, in a sense, going behind the function of such a rule of thumb to approach it in a way which has regard to the composition of or peculiar vulnerabilities, of one or some (it is unclear as to what number) of the members of the community. Such factors are more appropriately addressed, to the extent the definition of r 2 admits, under r 5(a)(ii)." Mansfield went on to observe: "It is hard to see why all access routes must be available to all members of a community, whatever their strength or frailty. A set of steps may provide access to a building or premise, even though there may be a not insignificant group in a community who may be unable to use it…That approach does not ignore the position of the elderly, the frail, or the disabled in a community; their position may be considered in having regard to the factors relevant under r 5(a)(ii). It avoids the consequence that a common expression, used in a practical day-to-day sense, has a particular and special meaning in r 5(a)(i). There are no indications in the 1995 Rules, nor from the history giving rise to the legislation or in the earlier Guidelines to support such a conclusion." 18 Subject to one possible reservation, Mansfield J considered that the meaning of "lawful access route" in its normal every day sense, was encompassed in the formulation of the test put forward by the Authority. The possible reservation was simply the need for permanency. His Honour did not think that a route would be an access route if it could only be used for a short period each year, but on the other hand the fact that a route - even a major roadway - is subject to occasional flooding would not have been intended to be excluded as an access route. 19 Mansfield J expressed his conclusions in the following terms: "It then becomes simply a question of fact whether a particular suggested route provides 'access' between the premises in question. There will be suggested routes which, as a matter of practical common sense, do not meet the description: steepness, danger, obstacles and the like will provide obvious examples. There will come a point at which such impediments will be of such a nature as not to destroy the quality of the route as an access route. Generally, where that line is crossed is a question of fact. A route is not an access route for the purposes of the Rules if only the fittest and strongest can use it, any more than it may be an access route even if a particular person or persons by reason of age or disability cannot use it. For the reasons expressed above, in my view the focus should be on the physical characteristics and features of the suggested route, rather than upon the persons or categories of person who might choose to use it but for age, or frailty, or for other reasons, or upon those who do use it." 20 His Honour concluded that the AAT in its first decision erred in applying an inappropriate test because it assessed the impediments which existed to the use of each of the access tracks "not in a generally understood way but having regard to the ability of the elderly, the disabled and parents with small children to use those routes". His Honour therefore referred the matter back to the AAT for further consideration, but noted that the findings of fact which led the AAT in the first decision to conclude that the informal tracks were not "access routes" might, on the application of the appropriate tests as formulated by his Honour, lead again to the conclusion that the informal tracks did not constitute "access routes" for the purposes of r 5(a)(i). 21 Upon its reconsideration, the AAT concluded that the informal tracks did constitute "access routes". The reasoning of the AAT is sufficiently encompassed in paragraph 11 of the second decision which reads: "11. The Tribunal's reasoning on the ability of all categories of the community to use the routes was crucial to its finding [in the first decision] that the routes were not lawful access routes. The Federal Court has however ruled that these are not considerations which can be taken into account. The Tribunal found in its original decision that the route contained in Exhibit R14(3) was not a lawful access route because of the existence of the embankment at the beginning of the informal path at the intersection of Goldsmith Drive and Honeypot Road. However now using the same tests that it used to make its original finding, but excluding a consideration of the members of the public who must use this route to access pharmaceutical services, must find that the route satisfies the test for a lawful access route. The Tribunal is now precluded from considering the particular difficulties which people such as the elderly and the disabled may face in using this route, but instead must focus on the physical characteristics and features of the routes." 22 Before O'Loughlin J, and before this Court, the appellant argued that the AAT again fell into error in its second decision because it went from finding that the inability to use the informal tracks and the difficulties facing the elderly, the infirm and persons with children were decisive, to finding that they were irrelevant and would not be considered at all. O'Loughlin J rejected this submission, saying that whilst he agreed with the argument of counsel for the appellant that Mansfield J did not say that community usage and difficulties confronting users were to be ignored, he considered that the AAT had not ignored them in reaching its conclusion. 23 Counsel for both parties submitted before this Court that Mansfield J correctly formulated the test of an "access route". Although we have not heard argument as to the correctness of that test, we are prepared to accept it for the purposes of resolving this appeal if (and we did not understand the parties to submit otherwise) a common sense, wide meaning is given to the words "ordinary persons" in the expression "could hypothetically be used by ordinary persons travelling that route". 24 Whilst the structure of the rules supports the view that the focus of r 5(a)(i) is on the physical characteristics and features of the suggested route, the importance of physical features which impede the use of a route, such as steepness, danger, obstacles and the like, must be assessed having regard to the degree to which those features are likely to affect the reasonable use of the route by the members of the public whose interests are in contemplation in the Act. The relevant provisions of the Act are concerned with the provision of pharmaceutical benefits to members of the community who require them. It is those members of the community who must constitute "ordinary persons" for the purposes of the test formulated by the Authority, and accepted by Mansfield J. 25 In the passages from the reasons for judgment of Mansfield J which are set out above his Honour twice refers to r 5(a)(ii) as a rule that addresses, to an extent, the position of the elderly, the frail, or the disabled in a community. Whilst r 5(a)(ii), through the definition of "definite community need", requires consideration of various aspects of the demographics of the relevant community, the definition is not directed to the characteristics which a route must have to be a "lawful access route" for the purpose of r 5(a)(i). Although the peculiar vulnerabilities of members of the community are relevant to issues which arise under r 5(a)(ii) that sub-rule does not address the extent to which their vulnerabilities impact on their ability to use a particular route as a means of access to a pharmacy. Since the range of people who may seek to obtain pharmaceutical benefits will be almost as diverse as the community itself, and will include people with various limitations, the limitations which some people have cannot be excluded from consideration in determining if a suggested route is an "access route" within the meaning of r 5(a)(i). 26 The test of an "access route" formulated by the Authority inevitably involves matters of fact and degree. Plainly, an "access route" for the purpose of r 5(a)(i) need not be a route that can be traversed by every member of the community however old or frail, nor need it be necessarily open for use on every day of every year. At the other extreme, it is equally plain that proof that an agile, courageous teenager can negotiate the route is not sufficient to establish that it comes within the ordinary concept of an access route. We do not understand Mansfield J to suggest otherwise. We understand his Honour's identification of error in the first decision of the AAT to be that too great an emphasis was given to the requirements of the elderly, the disabled, and parents with small children. 27 We agree with O'Loughlin J that nothing in the judgment of Mansfield J stated that community usage and difficulties confronting users are to be ignored. However, we are unable to agree that the AAT did not ignore these factors in its second decision. Although the proper interpretation of the AAT's second decision is not without difficulty, the interpretation that we place on paragraph 11 of that decision, set out above, is that the AAT put aside altogether the considerations which had earlier led it to the conclusion that the informal tracks did not relevantly constitute "access routes". In doing so we consider that the AAT again fell into error of law in that it applied the wrong test to the facts. In consequence, the second decision of the AAT must be set aside, and the matter again referred back to the AAT. 28 The AAT must apply the correct test, and reach its own conclusion on the facts as found by it. However, as the matter has already been subject to two decisions of the AAT, two decisions by single Judges of this Court, and now by this Court, we think it is appropriate that we indicate that on the findings of fact made by the AAT we think it is inevitable that upon a proper application of the test, the conclusion must be that each of the informal tracks does not constitute an "access route" for the purposes of r 5(a)(i). If it is recognised that an "access route" is one that could hypothetically be used by people who include the elderly and parents with young children, then the physical characteristics of the tracks indicate that for substantial periods of the year, and in times of poor lighting none of them provide a reasonable access route for a substantial portion of the members of the public, particularly those members likely to be seeking the provision of pharmaceutical benefits. 29 The appeal should be allowed. The second decision of the AAT and the decision of O'Loughlin J should be set aside. The matter must be remitted to the AAT for further consideration of its conclusion in relation to r 5(a)(i) of the 1995 rules in accordance with these reasons. 30 The respondent should pay the appellant's costs both of the application before O'Loughlin J and of this appeal. I certify that the preceding thirty (30) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Chief Justice Black and the Honourable Justice von Doussa .