Health Care Complaints Commission v Kennedy

Reliability of Mr Kennedy's evidence

1. Many of the facts on which the Complaints rest are agreed. However, a number of key factual matters in dispute are, in our opinion, especially relevant to the assessment of the veracity of Mr Kennedy's evidence. They include the explanations given by Mr Kennedy for: 1. The Pharmacy possessing Diamond Stanozolol. 2. The Pharmacy ordering 400g of Stanozolol in March 2014. 3. His failure to disclose until the hearing, the fact that the Pharmacy had in its possession the "missing" 200g of Stanozolol. 4. Compounding Clenbuterol without prescription.

Mr Kennedy's explanation for the Pharmacy possessing Diamond Stanozolol

1. As noted above, on his inspection of the Pharmacy on 8 April 2014, Mr Smith found five bottles marked "Diamond Stanozolol 200 capsules" and one bottle marked "Diamond Dianabol 200 capsules" in the compounding room of the Pharmacy.
2. In his report of 11 April 2014, Mr Smith recorded being told by Mr Kennedy during the inspection that he did not know who owned them and suggested it may have been the previous compounding pharmacist, Peter Kest.
3. In answer to a request for particulars from the Pharmacy Council dated 28 April 2014, Mr Kennedy's solicitors wrote that Mr Kennedy denied supplying Diamond Stanozolol product and gave this explanation for it being present in the Pharmacy: Mr Kennedy recalls that a woman brought the Diamond Stanozolol into the premises at which [the Pharmacy] was previously located, indicating that she had found the medication in her son's bedroom and wanted to know what it was. Mr Kennedy briefly spoke to her and indicated that he would attempt to ascertain what it was. The woman did not return to the Pharmacy. Mr Kennedy denies any suggestion of supply of Diamond Stanozolol or Diamond Dianabol but acknowledges that he was in possession of the drugs referred to in [Mr Smith's report of 11 April 2014].
4. When interviewed by the Commission on 4 September 2014 and asked about the Diamond Stanozolol, Mr Kennedy stated : Yes, and that was confirmed by my staff member because the staff member - the way with a pharmacy is, they talk to the front shop ladies first and then, if it's something that needs to be counselled by me, they'll bring them to me. So that was confirmed by the staff member that she actually saw the mother bring in the products and bring the mother to do, because she was really concerned. Her son was only 16 and she was concerned, "Why has he got these products? What's it for?" She consulted with me and I said "Look, on the label it says it's for anabolic purposes," and I said, "Look, this is what it's probably being used for. He's a teenager. He's probably being influenced in" - you know, there's a lot of body issues at the moment and a lot of pressure to look a certain way. I consulted with her for a bit and she was meant to come back and take those products. She left them in my possession. She said, "Look, I'm going to talk to my son. Can you just hang on to them?" I said, "No problem." I said, "I'll put them away," which they were put away. In our old shop they were left, but to be honest, because half - everyone was moving products. It wasn't -I wasn't the only one moving. When my staff member was questioned by Paul Smith, the dispense tech said, "Yes, I actually unpacked it. It was in our old shop in a box and, when we moved across, I was just put them straight into the shelf." She was oblivious as to what it was.
5. Mr Kennedy told the interviewers that the woman who brought in the Stanozolol was not a customer and did not leave her name. Mr Kennedy conceded when she did not return to pick up the Stanozolol, he should have "done something about it".
6. In that interview, Mr Kennedy claimed that during the inspection on 8 April 2014, Mr Smith and Senior Constable Oxley questioned dispensing technician, Michaela Camden, about the Diamond Stanozolol and she confirmed that it had been taken from the old shop "because they looked like stock". (Six weeks before the inspection the Pharmacy relocated from a few doors away.) He said the Stanozolol was not hidden but "in plain sight" and Ms Camden had simply "chucked it on to a shelf".
7. In evidence given in these proceedings, Mr Kennedy stated that the reason he did not tell Mr Smith during the inspection about the mother bringing in the Diamond Stanozolol was because it was only when reminded by the staff member who initially spoke to the mother (not Michaela Camden), whose name he can no longer recall and who no longer works at the Pharmacy, that the Diamond Stanozolol had been brought into the Pharmacy by a mother.
8. In evidence given in these proceedings, Mr Smith said that he found the Diamond Stanozolol in a cardboard box on a shelf in the corner in the compounding room. He said he recalled there being a female technician at the Pharmacy but did not recall having a conversation with her about the circumstances in which the Stanozolol came to be in the possession of the Pharmacy. He pointed out that the note he made on the day of the inspection made no reference to that claim but conceded that it had not been possible to record everything that occurred during the inspection in his notes. The notes read: Mr Kennedy claimed he came across these [the containers of Diamond Stanozolol] a "few days ago", but wasn't sure who owned them.
9. In evidence, Mr Smith stated he recalled Mr Kennedy saying a mother had brought in Cialis (a drug used to treat erectile dysfunction). He disagreed that he may have confused Cialis for Stanozolol. There is no reference in Mr Smith's notes to that account.
10. In the letter to the Pharmacy Council dated 28 April 2014, Mr Kennedy's solicitors wrote that according to Mr Kennedy the bottle of Cialis found during the April 2014 inspection had been brought in by a customer who asked whether it could be prescribed in Australia and when told by Mr Kennedy it was "fake" and "rubbish", left it at the Pharmacy. Mr Kennedy claimed that there was no intention to supply the Cialis but admitted it should have been destroyed.

Consideration

1. While, of course, the onus of proof lies at all times on the Commission, the credibility of Mr Kennedy's evidence is a critical issue in these proceedings. Because so much was made of this, before addressing the particulars of the Complaints we here outline our approach to the question of credibility and demeanour evidence in relation to each of the particulars.
2. The Commission submits that Mr Kennedy's evidence appeared rehearsed and that at times it was difficult to determine where the truth lay.
3. Counsel for Mr Kennedy contends that throughout the investigation of both Complaints and the hearing in these proceedings, Mr Kennedy adopted a frank, humble, and cooperative approach. She submits that throughout the proceedings, the evidence Mr Kennedy gave was candid and complete and wherever he could, conceded errors and demonstrated insight.
4. These conflicting characterisations of Mr Kennedy's evidence highlight, as the authorities consistently warn, the dangers of relying of demeanour alone to assess a witness's credibility: see for example, State Rail Authority v Earthline Constructions [1999] HCA 3; (1999) 160 ALR 588; (1999) 73 ALJR 306 and Fox v Percy [2003] HCA 22; 214 CLR 118.
5. While Mr Kennedy has an interest in portraying himself as a truthful witness, contrite for the transgressions to which he admits, we did not form the impression that Mr Kennedy was a witness whose evidence was rehearsed. Nor, on the other hand, did we form the impression that his evidence was unimpeachable. Concerning demeanour evidence, it is always worth bearing in mind the famous dicta of Lord Atkin in Société d'Avances Commerciales (Société Anonyme Egyptienne) v Merchants' Marine Insurance Co (The "Palitana") (1924) 20 Ll L Rep 140 at 152: [I] think that an ounce of intrinsic merit or demerit in the evidence, that is to say, the value of the comparison of evidence with known facts, is worth pounds of demeanour.
6. While we have taken into account his demeanour, in assessing the veracity of Mr Kennedy's evidence we have not made our assessment on that basis. Rather, we have placed weight on factors such as the inherent consistency, or lack of it, in the version of events given by Mr Kennedy; the consistency of those accounts with undisputed or incontrovertible facts; the consistency of the accounts given by Mr Kennedy with the evidence of other witnesses, especially independent witnesses; the inherent probability or improbability of the evidence, and Mr Kennedy's willingness and that of other witnesses to make reasonable concessions.
7. Although, of course, these are not criminal proceedings, character evidence was raised by Mr Kennedy. It has been held for many years that in criminal proceedings evidence of good character may be taken into account in assessing both the likelihood of a person committing an alleged offence or act of misconduct and their credibility when giving their version of events: see, for example, Attwood v The Queen (1960) 102 CLR 353 at 359; Eastman v R (1997) 76 FCR 9 at 147; TKWJ v The Queen [2002] HCA 46 at [94]. Given the nature of these proceedings, it is appropriate to apply these principles in this case. These remarks concerning credibility apply generally in our consideration of the evidence in relation to each of the particulars.
8. The Commission criticised Mr Kennedy in respect of his evidence concerning the provenance of the Diamond Stanozolol and suggests that, because it was a substance that he had previously ordered and in the context of other suspicious circumstances, his account of the drugs being brought to the Pharmacy should be considered dishonest.
9. It is, naturally, troubling that a pharmacist would have possession of banned anabolic steroids, especially when in possession of large quantities of other legal anabolic steroids and unsatisfactory records concerning them. On the other hand, it is notorious that these banned substances are circulating in the community. It is not implausible that a concerned parent would bring steroids she has found, apparently belonging to her son, to a pharmacy for analysis and disposal. Many parents, perhaps most, would be reluctant to report their children to police but would wish to take action to protect their children by (a) finding out what the drugs were, and their effects and (b) disposing of them safely.
10. A second factor in Mr Kennedy's favour is that he had ready and legal access to anabolic steroids through a genuine supplier. There was no need for him to obtain Stanazolol illegally.
11. Thirdly, there is no fundamental inconsistency in the evidence concerning where the Diamond Stanozolol was found. Mr Kennedy said it was on a shelf. The PSU evidence is that it was in a box on a shelf. Nothing can be deduced from this minor inconsistency.
12. Fourthly, given the disorganisation of his practice, having drugs not properly accounted for, is not such an incongruous event that it suggests of itself that his version is false. It is possible that the general disorganisation of the practice may disguise illegal conduct but the evidence does not rise above the level of suspicion. Evidence of good character is a relevant consideration here, although perhaps not an especially weighty one.
13. Finally, whatever concerns may be felt about Mr Kennedy's account of receiving the Diamond Stanozolol, it remains uncontradicted by other evidence.
14. For these reasons, the Complainant has failed to discharge its onus of proof in relation to this particular.

The order for 400g of Stanozolol in March 2014

1. On 4 September 2014, Mr Kennedy was interviewed by two officers of the Commission. During the course of that interview, which ran for just over two and half hours, when questioned about the Stanozolol powder found at the Pharmacy, Mr Kennedy claimed that the first time the Pharmacy had purchased Stanozolol was in March 2014. Subsequent enquiries made by the Commission revealed this information to be incorrect and that the Pharmacy had purchased 200g of Stanozolol from its regular supplier, Astral Scientific in February 2013. The Commission submits Mr Kennedy's failure to disclose the February 2013 purchase was deceitful and an attempt to mislead the Commission.
2. Mr Kennedy does not dispute that the information he gave the Commission's investigators was incorrect but disputes knowingly giving false information.
3. When questioned by Mr Smith during the 8 April 2014 inspection about the containers of Stanozolol found at the Pharmacy, Mr Kennedy stated that he had been asked to stock it by a doctor whose name he could not recall who wanted to prescribe it for weight loss purposes. He repeated that claim when interviewed by the Commission on 4 September 2014.
4. In these proceedings, Mr Kennedy stated that the 2013 order was made following enquiries made to the Pharmacy by "multiple doctors", who required it for weight loss purposes. The 2014 order was made following an enquiry made by Mr Steven Dank. (See [55] below) He saw this as a significant business opportunity because he understood Mr Dank operated a number of weight loss clinics.
5. When asked during the interview with the Commission why he would purchase a significant amount of Stanozolol powder on behalf of someone who was not a regular customer in the absence of a firm order, Mr Kennedy claimed the Pharmacy regularly received unsolicited requests of that type, usually following referrals from other medical practitioners. He gave as an example, an inquiry made by a doctor who specialised in digestive disorders about whether the Pharmacy could make up a prescription requiring 25 different substances. He said that while at the time the Pharmacy did not stock any of those substances, to "win the business" he ordered them in. He said this led to the Pharmacy receiving other referrals from that doctor.
6. In a statement dated 21 October 2016, tendered by Mr Kennedy, the sales manager of Astral Scientific, Denis Stapleton, wrote that in February 2014, when asked by Mr Kennedy to give a quote for 200g of Stanozolol, he found a much lower unit price was available if 400g was purchased. In oral evidence, Mr Stapleton stated it was his practice to try to "upsell", especially where, as in this case, the product had a lengthy expiry period (three years). He said it represented a "win win" for both parties: the Pharmacy secured a lower unit price and Astral made a slightly higher profit. At the request of the Tribunal, Mr Stapleton produced a copy of the email exchange between himself and Mr Kennedy, which confirmed his claim that Mr Kennedy initially made an inquiry about 200g of Stanozolol but later placed an order for 400g after being advised of its lower unit price ($US 722: 200g; $US 1288: 200g ).
7. Mr Stapleton wrote that after placing that order, Mr Kennedy told him he discovered he already had Stanozolol in stock and asked whether he could cancel the order. Mr Stapleton stated that he was unable to accede to that request as the product was en route and a condition of its import permit was that it must be supplied to the Pharmacy. Mr Stapleton added that Mr Kennedy had a history of ordering incorrect material and doubling up on orders and on occasion Astral had accepted returns from the Pharmacy. Whether Astral accepted returns depended on whether the wholesaler would accept the return and the likelihood of it being able to be resold.
8. According to Mr Stapleton, the Pharmacy established an account with Austral in 2012 and in his dealings with the Pharmacy, he found Mr Kennedy to be honest and trustworthy.
9. In cross-examination, Mr Stapleton conceded that the Pharmacy was a significant customer but denied that his account of Mr Kennedy trying to cancel the order for Stanozolol in March 2014 was a recent invention designed to help out a "decent customer".
10. In oral evidence, Mr Kennedy stated that when he placed the 2014 order, he had forgotten the Pharmacy already held 200g of Stanozolol. He stated that as a result of poor record-keeping and stock-taking practices, he sometimes over-ordered and doubled-up on product. In cross-examination, Mr Kennedy stated that the reason he did not tell the Commission about attempting to cancel the March 2014 order was because it was not until reading Mr Stapleton's statement that he recalled attempting doing so. Mr Stapleton's statement was prepared about six weeks before the hearing.

Dealings with "Dr Dank"

1. In these proceedings, Mr Kennedy announced that he now recalled the name of the person who contacted him about compounding Stanozolol and was Stephen Dank. He said he only recalled Mr Dank's name after hearing media reports. He stated that at the time he was dealing with Mr Dank, he understood he was a medical practitioner but he now knows he was mistaken.
2. It is a matter of common knowledge that Mr Dank is a controversial sports scientist. In April 2015, the AFL Anti-Doping Tribunal imposed a life ban on Mr Dank for multiple doping offences involving sports people. No evidence was adduced about when and the extent to which Mr Dank's activities was reported in the media.
3. While these proceedings were the first time that Mr Kennedy claimed that it was Mr Dank who contacted him about compounding Stanozolol and Clenbuterol, he alluded to Mr Dank during his interview by the Commission in September 2014: With reading all the Essada [sic ASADA (Australian Sports Anti-Doping Authority) cases…I saw the doctor's name. I saw the amount of things he was prescribing his football players…I was under the assumption that…the doctor got into trouble with all the football teams, he's got rejuvenation clinics. So when I spoke to this doctor I was under the impression that they do the same thing, but not with professional athletes; with everyday people, because it wasn't the first time we were asked to make [Stanozolol].
4. In evidence in these proceedings, Mr Kennedy stated he was hoping to get work from Mr Dank through his anti-ageing and weight loss clinics. He claimed he had no contact with Mr Dank since April 2014. In cross- examination, he rejected the proposition that it was implausible he had forgotten Mr Dank's name, pointing out he dealt with over with over 50 medical practitioners and could not remember all of their names.

The misplaced Stanozolol

1. In the Original Complaint, the Commission alleged that there was a 200g shortfall in the amount of Stanozolol held by the Pharmacy in April 2014.
2. In cross-examination, for the first time Mr Kennedy disclosed that an unopened container of Stanozolol was at the Pharmacy and produced it the following day at the direction of the Tribunal. He stated that the PSU must have missed it during the stocktake conducted in April 2014. When asked why, having being on notice for over two years of the allegation of missing Stanozolol, that he left it to the day of the hearing to advise the Commission and the Tribunal of its existence, Mr Kennedy said that he always knew it was there but had not been asked further about it. He pointed out that he was not involved in the stocktake undertaken by the PSU in April 2014 and given the storage area of the Pharmacy was very large, items could be overlooked.
3. When questioned in these proceedings, Mr Ashour stated that he learnt of the allegation of the missing container of Stanozolol when he read the PSU's report, probably in April or May 2014. He said he raised the issue immediately with Mr Kennedy who showed him the unopened container in the Pharmacy. He claimed that he told Mr Kennedy to hang on to it. He said he did not enter it in the drug register because the expiry date had passed. He said had it not been for this inquiry he would have thrown it into the Return of Unwanted medicines (RUM) bin. The RUM bin is a repository used by pharmacists to dispose safely of expired drugs and other medications.
4. The Commission expressed scepticism about the evidence concerning the finding of the missing Stanozolol. Given the surrounding circumstances, and the apparent thoroughness of the PSU's examination, that scepticism is not without a basis. The Stanozolol materialised at a time when it was too late for the PSU to investigate its provenance. The only evidence available is that given on behalf of Mr Kennedy. This makes its weight difficult to assess. Nevertheless, it is uncontradicted and not inherently implausible. Again, it is in such a situation that evidence of Mr Kennedy's prior good character becomes relevant and must be taken into account in his favour.

Explanation for compounding Clenbuterol without a prescription

1. In his initial report, Mr Smith wrote that during the inspection on 8 April 2014, he observed a number of poorly labelled containers indicating they contained a variety of performance-enhancing substances including capsules of Clenbuterol. In a report dated 2 September 2014, Mr Smith wrote that the Clenbuterol appeared to have been compounded, labelled and prepared in the absence of a valid veterinary prescription.
2. In these proceedings, Mr Kennedy admitted to inappropriately compounding Clenbuterol in circumstances where Clenbuterol is not registered in Australia for human use; no prescription for Clenbuterol had been received by the Pharmacy at the time of the compounding. Compounded Clenbuterol has a limited shelf life of six months. (Particular 8 of Complaint 1).
3. In late 2014, the Commission wrote to Mr Kennedy and asked for an explanation as to why the Pharmacy stocked Clenbuterol. Through his solicitors, Mr Kennedy replied that it was for veterinary surgeons for the treatment of respiratory disease in horses and gave the name of 10 veterinary practices for which the Pharmacy had compounded. Enquiries made by the Commission of those veterinary practices revealed that none had required the Pharmacy to compound medication containing Clenbuterol and only three had used the Pharmacy's compounding services.
4. In these proceedings, Mr Kennedy said he had been told by Mr Smith that Clenbuterol is generally used for veterinary purposes. He said he now recalled that he had ordered it following discussions with Mr Dank and he understood it was for use in one of his weight loss clinics. He said he realised that the amount ordered, 50g, was a "ridiculous amount" given the small quantities generally required but said it was the smallest quantity that could be ordered. He said he now realised it had been foolish and naive to order Clenbuterol in the absence of a firm order but he did not want to lose the business opportunity offered by Mr Dank. He said he had no reason to believe at the time that Mr Dank was not a legitimate practitioner.
5. In his report of 11 March 2015, Mr Mclnerney was highly critical of Mr Kennedy's actions in compounding Clenbuterol without a prescription. In his opinion, Mr Kennedy exhibited a degree of naivety by purchasing Clenbuterol (and Stanozolol) without "legitimate prescriptions to back them up" not only because of their high cost but because of they are known for illegal use as performance enhancers, "particularly in the body building scene".
6. Mr Mclnerney wrote that in his opinion the compounded Clenbuterol found at the Pharmacy in April 2014 was probably prepared for an "illegal use". He wrote that if, as Mr Kennedy claimed, a veterinarian had made a request by telephone for the compounded product then "standard procedure" would be for the veterinarian to provide details of the client's name and address and promise to supply the prescription, and for this information to be recorded by the pharmacist. Further, he pointed out that Clenbuterol has a shelf life of six months and without a prescription Mr Kennedy would not have known what strength of capsules to make up. In addition, he said that it was likely that Mr Kennedy knew the cost of Clenbuterol and therefore the potential financial loss if the promised prescription was not supplied. (In July 2013 the Pharmacy purchased 50g of Clenbuterol for $3892.)

Consideration

1. In our view, for several reasons, Mr Kennedy's evidence on this issue is implausible.
2. First, he gave inconsistent versions of why he had Clenbuterol in his possession.
3. Second, it was after his original version had been severely undermined by the PSU's inquiries of veterinarians that he came forward with the second version that in 2014 he been approached by Mr Dank. Given Mr Dank's notoriety due to the AFL and Rugby League doping scandals he had been involved in, and the unusual nature of the drug, and its very limited use, many would find it difficult to accept that Mr Kennedy forgot that he was the person with whom he had been dealing in relation to Clenbuterol.
4. Third, without a prescription, why would a compounding pharmacist make up capsules of the specific strength that Mr Kennedy prepared? This conduct suggests that he anticipated supplying the capsules in respect of an order he had received or thought he was likely to receive.
5. Fourth, this point is given added emphasis due to the fact that Clenbuterol has a limited shelf life once compounded.
6. Fifth, the drug is relatively expensive, a disincentive to order it until actually required.
7. And finally, Clenbuterol is notorious for illegal use as a body-building agent.
8. Mr Dank was not called by either party to give evidence. No adverse inference is drawn from this. If, as Mr Kennedy asserts, Mr Dank had discussions concerning Clenbuterol with him, it would be unlikely for Mr Dank to give evidence that could result in self-incrimination.
9. The problem with this evidence is that it is negative rather than positive. We do not think that Mr Kennedy has given a full and frank account of the real reasons for his compounding of the Clenbuterol. That inevitably gives rise to certain suspicions. But we are left without direct proof or a satisfactory explanation of Mr Kennedy's true purposes and are left with only "inexact proofs, indefinite testimony, or indirect inferences" as Sir Owen Dixon described such evidence in Briginshaw. The fact that Mr Kennedy has given an unsatisfactory account of his real purposes does not crystallise the Commission's suspicions into proof of illegal activity. The Commission did not make such a complaint because, on the evidence it had available, it could not. Whether, however, it is proof of improper or unethical conduct is an issue to which we will return below.

Did Mr Kennedy fail to report loss or theft of 30.5g of Mesterolone, and/or 0.07g of Alprazolam?

1. Particulars 14 and 15 of Complaint 1 read: 14 Between an unknown date in 2011 when the Respondent became Pharmacist in Charge of the Pharmacy and 24 April 2014, the Respondent failed to report loss or theft of prescribed restricted substances to the Secretary (Director-General) of the NSW Ministry of Health, contrary to clause 67 of the PTGR in relation to: (a) 30.5g of Mesterolone and (b) 9.83g of Stanozolol. 15 Between an unknown date in 2011 when the Respondent became Pharmacist in Charge of the Pharmacy and 24 April 2014 the Respondent failed to report loss or theft of drugs of addiction to the Secretary (Director-General) of the NSW Ministry of Health contrary to clause 124 of the PTGR in relation to: (a) 0.07g Alprazolam and (b) 39.18g of Dexamphetamine.
2. For the reasons discussed below, the Commission decided not to press paras (b) of Particulars 14 and 15.
3. Mesterolone is an anabolic steroid and a "prescribed restrictive substance": cl 61 of the PTGR. Alprazolam is a benzodiazepine and a "drug of addiction": cl 123 of the PTGR. As Pharmacist in Charge, Mr Kennedy was required to immediately report the loss or theft of any prescribed restrictive substances or drug of addiction: cll 67 and 124 of the PTGR.
4. A PSU report dated 2 September 2014 contains a table prepared by Mr Smith, which compares the amount in stock of the 13 substances audited during the inspection of the Pharmacy on 24 April 2014 (the "actual balance on hand"), with the amounts purchased and dispensed during the period, 24 April 2013 to 24 April 2014, for each substance (the "minimum theoretical balance on hand"). The figures used to calculate the minimum theoretical balance on hand were based on records produced by Mr Ashour in answer to notices issued under s 35 of the PTGA.
5. Taken from that table, the following extract reveals that for four of the 13 audited substances, the actual balance on hand was less than the minimum theoretical balance on hand. Substance Amount purchased Amount dispensed Minimum theoretical balance on hand @24/4/14 Actual theoretical balance on hand @24/4/14 Difference between actual balance and theoretical 24/4/14 -24/4/14 24/4/14 -24/4/14 Mesterolone 1206.25 56.25 1150.00 119.50 -30.50 Alprazolam 34.20 33.47 0.73 0.66 -0.07 Stanozolol 400.00 0.27 399.73 389.90 -9.83 Dexamphetamine 134.50 84.50 50.00 5.47 -39.18 (Aspen branded) Dexamphetamine (compounded) 94.65 -94.65

1. On the final day of the hearing, a calculation error was identified for the figures for Dexamphetamine. In addition, as noted above, Mr Kennedy produced to the Tribunal 200g of Stanozolol. This was basis of the Commission's decision not to press Particulars 14(b) (Stanozolol) and 15(b) (Dexamphetamine).
2. Particulars 14(a) and 15(a) require the Commission to establish that Mr Kennedy failed to report the loss or theft of 30.50g of Mesterolone and 0.07g of Alprazolam.
3. Mr Smith testified that he and Ms Dolan had carefully weighed each of the 13 substances which were the subject of the audit conducted on 24 April 2014. He explained, however, that there is generally an error margin of between five and ten per cent in the weighing of compounds.
4. With respect to Alprazolam, Mr Kennedy argues that the calculated 0.07g shortfall is a "miniscule quantity" and represents less than one dose. He submits that the fact that he cannot account for the shortfall does not establish that he was aware that 0.07g had been lost or stolen especially given the chaotic state of the Pharmacy's records at the time. The Commission rejects the contention that 0.07g is a miniscule quantity and asserts that as Alprazolam generally comes in tablets of 0.25mg, 0.5mg and 2g, a shortfall of 0.07g is equivalent to 35 x 2mg or 280 x 0.25 tablets and not less than one dose, as asserted by Mr Kennedy.
5. In a note to the Table, Mr Smith wrote that that the standard therapeutic dose for Mesterolone was 100mg and therefore the calculated shortfall of 30.50g was equivalent to 305 doses.
6. With respect to the Mesterolone, Mr Kennedy concedes he is unable to account for the shortfall. He offered as an explanation the shortcomings in the Pharmacy's labelling and bookkeeping practices.

Consideration

1. There are any number of possible explanations for the shortfall in Alprazolam and Mesterolone revealed by the table. As suggested by Mr Smith, it may be that throughout the audit period the Pharmacy was compounding on behalf of other pharmacies "in breach of its legislative obligations". Another possibility is that the identified shortfall is the result of the usual error margin in the weighing of compounds. A further possibility, as suggested by Mr Kennedy, is that the shortfall was not identified because of poor labelling, bookkeeping, and stock-taking practices. Another possibility is that Mr Kennedy was aware of but failed to report the shortfalls.
2. The Commission must establish that 30.50g of Mesterolone and/or 0.07g of Alprazolam was lost or stolen at some point during the audit period and that Mr Kennedy was aware of that fact. The identified shortfall for both substances was within or close to the error margin for the weighing of compounds explained by Mr Smith. (The alleged 0.07g shortfall of Alprazolam represents 10.61 per cent of the 0.66g actual balance on hand. The 30.50g shortfall of Mesterolone represents 2.7 per cent of the 1119.5g actual balance on hand.) Even if it is assumed that these amounts were missing at some point in the 12 month period to April 2014, having regard to what has been described as the chaotic state of the Pharmacy, we could not be satisfied that Mr Kennedy had knowledge of that fact.
3. Particular 14 and 15 are not established.

Was a prescription dispensed or permitted to be dispensed by Mr Kennedy on 27 December 2013, that been defaced or appeared to be altered other than by the medical practitioner by whom it was issued?

1. 16 Particular 16 reads: On 27 December 2013 the Respondent dispensed or permitted to be dispensed, contrary to clause 40 of the PTGR medication under a prescription for Patient I issued by a medical practitioner that had been defaced or appeared to be altered otherwise than by the authorised practitioner by whom it was issued.
2. During the inspection on 8 April 2014, Mr Smith discovered a prescription dated 27 December 2013 which had been altered by hand. The prescription, which was in electronic form, was for 50 tablets of the restricted substance, Mogadon. Immediately above the typed date of the prescription were the handwritten entries "early" and "?". In addition, the typed date appears to have been altered from 27/12/13 to 21/12/13. A circle drawn by hand appears around the date.
3. Clause 40 of the PTGR states: 40 Certain prescriptions not to be filled (1) A pharmacist must not supply a restricted substance on prescription: … (d) if the prescription is illegible or defaced, or (f) if the prescription appears to have been altered otherwise than by the authorised practitioner by whom it was issued, or …
4. The Commission complains that in contravention of cll 40(1)(d) and 40(1)(e), Mr Kennedy supplied Mogadon in circumstances where the prescription was defaced and/ or appeared to have been altered otherwise than by the authorised practitioner by whom it was issued.
5. In these proceedings, Mr Kennedy testified that he had no recollection of the subject script but conceded he was responsible for it being dispensed. He stated that, based on his experience, the word "early" written on a prescription is generally a "flag" from one pharmacist to another that the customer had attempted to present it before the date of the prescription. He gave a similar explanation when interviewed by the PSU in September 2014. In cross-examination, he agreed that an attempt appeared to have been made to change the date from "27 to 21 [December]". He said he could not recall whether he had contacted the authorising practitioner but thought it unlikely given his workload at the time.
6. Mr Kennedy stated that when a customer presented a prescription that he suspected had been forged, it was his practice to contact the authorising practitioner and inquire whether they had in fact issued or altered the prescription. He said that on a number of occasions he had alerted police and local pharmacists when presented with what he suspected to be forged prescription. He gave as an example an email sent to a colleague in 2013, alerting them to a syndicate that had been presenting pharmacies forged prescriptions for OxyContin (an Opioid). (See R1, Tab 3).

Consideration

1. There can be no argument that the subject prescription appears to have been altered by the entry in hand of the word "early" and "?". In addition, as conceded by Mr Kennedy, it also appears that an amateurish attempt was made to change the date of the prescription. The question is whether those alterations appeared to have been made "otherwise than by the authorised practitioner".
2. Mr Kennedy suggested that the most likely explanation for the alteration to the prescription was that it was made by a pharmacist, seeking to alert colleagues of an attempt to present the prescription "early".
3. While we accept that the practice described by Mr Kennedy is not uncommon among pharmacists, to fall within cl 40(1)(f) of the PTGR provision it is enough that the prescription appears to have been altered "otherwise than by the authorised practitioner". There is no additional requirement, as Mr Kennedy appears to believe, that the pharmacist formed the view that the prescription is a forgery.
4. We are satisfied that Mr Kennedy dispensed or permitted the subject prescription to be dispensed in circumstances where it appeared to have been altered otherwise than by the authorised practitioner by whom it was issued.
5. Particular 16 is established.

Did Mr Kennedy knowingly give false information to the Commission concerning the Pharmacy's purchase of Stanozolol?

1. Particular 1 of Complaint 2 reads: On 4 September 2014 the Respondent informed the Health Care Complaints Commission that the purchase of 400 grams of Stanozolol around 31 March 2014 was the first time the Pharmacy had purchased Stanozolol which was false in that the Pharmacy had purchased 200 grams of Stanozolol around 18 February 2013.
2. The circumstances surrounding this particular are set out above. Mr Kennedy admits the facts of this particular. The issue in dispute is whether he knowingly gave information he knew to be false. If yes, it appears to be agreed that that conduct would amount to improper and unethical within the meaning of s 139B(1)(l) of the National Law.
3. The Commission contends that it is implausible that when interviewed in September 2014, Mr Kennedy had forgotten ordering 200g of Stanozolol in February 2013 and attempting to cancel the subsequent March 2014 order. The Commission points out that when interviewed, Mr Kennedy had been on notice for some time that he was the subject of an investigation by the PSU about various matters including the circumstances surrounding Stanozolol being in the possession the Pharmacy. Equally implausible, contends the Commission, is Mr Kennedy's claim of having no recollection of attempting to cancel the March 2014 order until prompted by Mr Stapleton's statement made shortly before the hearing in these proceedings.
4. Mr Kennedy contends that in circumstances where he was under considerable pressure having being interviewed by the PSU for over two and half hours, not having access to the Pharmacy's records and in light of the history of the Pharmacy's poor record-keeping and stocktaking practices, it is entirely plausible that when interviewed by the Commission, he had forgotten about the February 2013 purchase and his attempts to cancel the March 2014 order.
5. Stanozolol is an anabolic steroid, rarely prescribed in Australia and known to be abused by body builders. It is subject to strict regulatory controls and requires a permit to be imported into Australia. It is against this background that Mr Kennedy's claim of having forgotten about the February 2013 order must be assessed.
6. The Commission makes a powerful argument that in circumstances where Mr Kennedy was on notice that his practices as a pharmacist were under investigation, including the possession of large amounts of Stanozolol, it is implausible that he had simply forgotten about the 2013 order and having attempted to cancel an order placed 12 months later.
7. Mr Stapleton's evidence neither proves nor disproves Mr Kennedy's claim that when questioned by investigators he held the honest belief that the Pharmacy's first purchase of Stanozolol was made in March 2014. If accepted, his evidence at best demonstrates that on occasion Mr Kennedy over-ordered and doubled up on stock and did not have a good command of the purchase history of the stock at hand.
8. Mr Stapleton is not an independent witness. He readily conceded that the Pharmacy was one of Austral's better customers. While this is a factor to be taken into account in evaluating Mr Stapleton's evidence, it does not follow that his evidence is unreliable. We found Mr Stapleton to be a credible witness. His evidence was internally consistent and supported by the chain of emails he subsequently produced at the request of the Tribunal of his attempt to persuade Mr Kennedy to order a larger quantity of Stanozolol.
9. While it is possible that Mr Kennedy knowingly gave the Commission false information, on the available material we are not satisfied of this to the requisite standard. If it was a deliberate attempt to deceive, it was a feeble one. Mr Kennedy would in all likelihood have known that the PSU had the capacity to check his supplier's records. In reaching our conclusion, we believe the following to be relevant.
10. First, the uncontroversial evidence of Mr Kennedy's grossly inadequate record-keeping practices. Second, Mr Stapleton's evidence of Mr Kennedy's poor grasp of stock on hand, as illustrated by the history of him over ordering and doubling up on stock. Third, although when interviewed in September 2014, Mr Kennedy was on notice that his practices as a pharmacist were under investigation, including having possession of Stanozolol without a prescription or any firm order, it puts it too high to suggest that he was squarely on notice that the purchasing history of Stanozolol was under review. The exchange of correspondence between the Council and Mr Kennedy's solicitor suggests that the focus of concern was Mr Kennedy's understanding of the purpose for which it was being prescribed.
11. In reaching this conclusion, we have had regard to the fact as discussed of a number of unsatisfactory aspects of Mr Kennedy's evidence. They include his failure to disclose until the day of the hearing that 200gms of Stanozolol was at the Pharmacy and his explanation for dispensing compounded Clenbuterol without a prescription. While these raise concerns about the reliability of Mr Kennedy's evidence, nonetheless on the available material we cannot be satisfied that he deliberately sought to mislead the Commission's investigators or knowingly gave information to them that he knew to be false.
12. Particular 1 of Complaint 2 is not established.

Did Mr Kennedy breach the Conditions by dispensing Schedule 4D substances, on 28 October 2015, 8 March 2016, and/or 23 May 2016?

1. The Particulars of Complaint 1 of the Second Complaint read: On 28 October 2015 the practitioner breached condition 5 in that he dispensed a Schedule 4D substance, namely 100 Temazepam 10mg tablets to Patient J. 2 On 8 March 2016 the Respondent breached condition 5 in that he dispensed a Schedule 4D substance, namely 50 Valpam 5mg tablets to Patient K. 3 On 23 May 2016 the Respondent breached condition 5 in that he dispensed a Schedule 4D substance, namely 25 Nitrazepam 5mg tablets to Patient L.
2. Condition 5 of the Condition imposed by the Council on 15 May 2014 states: 5 [Mr Kennedy] must not possess, handle, supply, dispense, administer, compound or manufacture any substance detailed in Schedule 8 or Schedule 4D or any substance detailed in an equivalent list of any other Australian State or Territory. 6 [Mr Kennedy] must not possess, handle, supply, dispense, administer, compound or manufacture any pharmaceutical products containing any of the following: (a) Stanozolol (b) Methandrostenolone (c) Clenbuterol (d) Trilostane (e) N-Acetyl-L-Cysteine (f) Clomiphene (g) Tadalafil (h) Dehydroepiandrosterone (DHEA)
3. The Commission alleges that in breach of Condition 5, Mr Kennedy dispensed Schedule 4D medication namely, Temazepam, Diazepam, and Nitrazepam on 28 October 2015, 8 March 2016, and 23 May 2016, respectively.
4. "Schedule 8" and "S 8" are shorthand terms used interchangeably to refer to medication listed on the Poisons List proclaimed under s 8 of the PTGA. "Schedule 4D" and "S 4D" are shorthand terms used to describe "prescribed listed substances" specified in Appendix D to the PTGR. "Schedule 4B" or "S 4B" is used to refer to "special restricted substances", which are listed in Appendix B to the PTGR. The medication listed in Appendix B is a subset of that listed in Appendix D. The drugs listed in Schedule 8 are drugs of addiction and include methadone. Those listed in Appendix D are also drugs of addiction but are generally considered to have lesser addictive potential. Those listed in Appendix B include anabolic steroids. In the interests of clarity, we will adopt the terminology used by the witnesses in these proceedings, and use the terms "Schedule 8", "Schedule 4B", and "Schedule 4D".
5. In a report dated 27 May 2016, Ms Dolan wrote that during her inspection of the Pharmacy on 19 May 2016, Mr Kennedy informed her that he now mainly deals with "front of shop" and dispenses some prescriptions but ensures none are "S 8s, S 4Ds or from the list specified on the condition of his APHRA conditions". She wrote: I queried Mr Kennedy's assumption that only his S4B authority had been withdrawn as I was of the opinion that he had his full S4D authority withdrawn, but assured me I was wrong.
6. On returning to her office, Ms Dolan checked the APRHA website which confirmed her understanding that Mr Kennedy's "full Sch 4D authority" had been withdrawn. She said she then rang Nabil Tamer, the Pharmacist in Charge, and advised that Mr Kennedy was under the mistaken belief that only his Schedule 4B authority had been withdrawn. Soon after that conversation, Mr Kennedy contacted Ms Dolan and claimed he had always been aware that his Schedule 4D authority was withdrawn.
7. In oral evidence, Mr Kennedy denied saying to Ms Dolan on the day of the inspection that only his Schedule 4B authority had been withdrawn. He claims when he learnt of Ms Dolan's "mistaken belief" he rang her immediately to correct it.
8. Following receipt of Ms Dolan's report of 27 May 2016, the Commission issued Mr Ashour a notice under the Health Care Complaints Act 1993 (NSW), directing him to produce "complete dispensing records" for all Schedule 4D medication from 6 June 2014 until 6 August 2016. In answer to that notice, Mr Ashour produced the records of over 160,000 prescriptions filled by the Pharmacy during the requested period (the Dispensing Report). The report lists next to each prescription dispensed by the Pharmacy: the name of the customer, the drug prescribed, the date the prescription was filled, and the log-in details of the staff member who dispensed the prescription. Contained in the Dispensing Report are entries for the prescriptions which are the subject of Complaint 1 of the Second Complaint (the subject prescriptions). "AK" was the log-in details of each entry. "AK" was and is the log-in used by Mr Kennedy on the Pharmacy's dispensing system.
9. On 12 September 2015, the Commission wrote to Mr Kennedy and invited him to comment on the Dispensing Report. In a letter prepared by his solicitors dated 10 October 2016, Mr Kennedy denied dispensing the subject prescriptions. He claimed each of the subject prescriptions had been issued by one of the other pharmacists working at the Pharmacy, using his log in details. He claimed: 1. The prescription for Temazepam, had been dispensed by either Mr Tamer, or the dispensing technician, Nyssa Scully, using a computer he had been using but failed to log out from. In support, he pointed to the Dispensing Report which he asserts reveals that shortly before the Temazepam was dispensed (eight scripts before), a prescription had been dispensed under his log-in. 2. With respect to the prescription for Diazepam, the above error made in was repeated. He pointed out that the Dispensing Report reveal that 14 scripts earlier, he had filled a prescription on behalf of another customer. In addition, he pointed out that the Diazepam was dispensed at 6:53 pm and it was his practice to leave work before 6:00 pm to drop off the mail. 3. The prescription for Nitrazepam was one of four prescriptions filled at the request of the same customer on 23 May 2016. His log-in details appeared on the Dispensing Report for that prescription because Mr Tamer had not logged out of the computer he had been using, and did not realise his mistake until he was about to issue a fourth prescription for Endone, a Schedule 8 drug.
10. Mr Kennedy claimed that when a prescription is dispensed in the Pharmacy the dispensing pharmacist is required to enter into the computer certain information including the patient's details. Unless they had logged out of the computer, the details of the pharmacist to last use the computer is automatically filled into the relevant data fields. Where this occurs the log-in details of the previous pharmacist must be changed manually.
11. In a statement prepared at the request of the Commission dated 13 September 2016, Mr Tamer wrote that when he commenced at the Pharmacy in September 2014 he was made aware of the conditions imposed on Mr Kennedy's registration. He stated as Pharmacist in Charge he took steps to ensure the conditions were displayed "everywhere". He stated that all staff were aware that under no circumstances was Mr Kennedy to handle or dispense Schedule 4D or Schedule 8 drugs.
12. In a supplementary statement dated 1 December 2016, Mr Tamer wrote that when the "dispensing issues" occurred, the three computers in the dispensing area of the Pharmacy were not allocated to any particular member of staff and he, Ms Scully and Mr Kennedy used whichever of the computers were available. In oral evidence, he resiled from that claim and stated that while "for some time" each staff member had been allocated a particular computer, he only strictly enforced that system when the breaches were brought to his attention.
13. Mr Tamer stated that while he was at work on the days when the subject prescriptions for Temazepam and Diazepam were filled, he could not recall whether he had filled those prescriptions. He wrote that, based on the practice adopted by the Pharmacy, he thought either he or Ms Sully probably dispensed the medication, but had failed to change the log-in details. He stated that he recalled dispensing the Nitrazepam on 23 May 2016 and neglecting to change Mr Kennedy's log in details.
14. He stated that the practice within the Pharmacy is that if Mr Kennedy is given a prescription by a client for a Schedule 4D or 8 drug, Mr Kennedy notifies him and he takes over dispensing that prescription. He claimed that he has never heard of Mr Kennedy accidentally dispensing Schedule 4D or 8 medication.
15. Ms Sully confirmed Mr Tamer's claim that all staff were aware of the restrictions on Mr Kennedy's authority to dispense and handle drugs. She agreed with Mr Tamer that the most likely explanation for Mr Kennedy's log-in details appearing in the entries in Dispensing Report for the subject prescriptions, was that he had not logged out of the computer and the next staff member to use the computer failed to manually correct the record. She stated that while she and Messrs Tamil and Kennedy were each allocated computers, sometimes they would "jump on" the other's computer if it was more convenient to do so. As she recalled, before October 2015 the three computers in the dispensing area were not allocated to any particular member of staff, but from then on, each were allocated their own computer "but not 100%".
16. Pursuant to the Conditions of Mr Kennedy's registration, John North was appointed by the Council to audit the Pharmacy. He conducted audits in June 2014, July 2014, October 2014, January 2015, and April 2015. In reports of each inspection, he wrote that based on his discussions with Mr Kennedy, Mr Le (the Pharmacist in Charge to September 2014 ) and later, Mr Tamer together with his review of the Pharmacy's records, in his opinion Mr Kennedy had a clear understanding of, and was complying with Condition 5.
17. In a report dated 2 October 2014, Mr North wrote that he had examined the report of the drugs dispensed by the Pharmacy for the period 6 August 2014 to 2 October 2014 and noted three Schedule 8 drugs with Mr Kennedy's log-in details. He wrote that after discussing the matter with Mr Tamer, he was left with "no doubt", as claimed by Mr Tamer, that he had dispensed the drugs and inadvertently used Mr Kennedy's log-in details.
18. In a statement prepared at the request of the Commission, dated 24 September 2016, Ms Dolan stated that when she inspected the Pharmacy on 19 May 2016, she noticed a list of Schedule 4D drug list was taped to the door of the methadone safe and only the Schedule 4B drugs appeared to be highlighted. She wrote that when she questioned Mr Kennedy about why only the Schedule 4B drugs were highlighted, Mr Kennedy replied that they were the drugs he cannot dispense. Ms Dolan claimed that when Mr Kennedy rang her soon after the inspection and asserted that he was "always aware" that his Schedule 4D authority had been withdrawn, she asked him why only the Schedule 4Bs were highlighted on the notice fixed to the door of the methadone safe and he replied "I don't know".
19. In oral evidence, Mr Tamer stated that he was the only member of staff authorised to dispense Schedule 8 drugs on weekdays. He agreed with Ms Dolan that some of the drugs on the list taped to the door of the methadone safe, were highlighted. He claimed he had prepared the list and the highlighted drugs were Schedule 4D drugs he was unfamiliar with, and not necessarily Schedule 4B drugs.

Consideration

1. For the reasons that follow, we find the evidence taken as a whole does not support a finding that in breach of Condition 5, Mr Kennedy dispensed Schedule 4D drugs on the three dates as alleged.
2. First, a plausible explanation has been provided for Mr Kennedy's log-in details appearing in the Dispensing Report for each of the subject prescriptions.
3. Second, Mr Kennedy's claim of not dispensing Schedule 4D medication on the dates as alleged is supported by the evidence given by his colleagues. While we accept as pointed out by the Commission, that neither Ms Scully nor Mr Tamer was independent witnesses and there were inconsistencies in their respective accounts about when each staff member was allocated their own computer terminal, their respective evidence was otherwise materially consistent. We accept their claim that the practice within the Pharmacy was to adhere to the dispensing restrictions imposed on Mr Kennedy.
4. Third, Ms Dolan's account of only drugs highlighted on the list taped to the methadone safe being Schedule 4B drugs, is unsupported and contradicted by Mr Tamer's evidence.
5. Fourth, the assertion that Mr Kennedy misunderstood the scope of his restrictions is inconsistent with the reports prepared by Mr North over a period of 12 month period, in which he recorded that saw no evidence of Condition 5 not being complied with, and Mr Kennedy and his colleagues, appeared to fully understand the scope of his dispensing restrictions. While it is possible that Mr Kennedy said to Ms Dolan during her inspection of the Pharmacy in May 2016 that Condition 5 only applied to Schedule 4B drugs, it seems unlikely that he in fact misunderstood the scope of his dispensing authority given Mr North's reports which indicate that on each occasion he attended the Pharmacy between June 2014 and April 2015, Mr Kennedy demonstrated a clear understanding of the nature of the restrictions. But more significantly, if, as the Commission alleges, Mr Kennedy misunderstood the nature of his dispensing restrictions, it is improbable that the Dispensing Report would reveal that only three of the 163,000 prescriptions dispensed by the Pharmacy throughout the period 6 June 2014 to 6 August 2016 were dispensed by Mr Kennedy for Schedule 4D medication.
6. Particular 1 of the Second Complaint is not established.

Summary

1. Particulars 14 and 15 of Complaint 1 of the Original Complaint are not established. The balance of the particulars in Complaint 1 and Complaint 2 are established.
2. Particular 1 of the Second Complaint is not established.

Does each admitted or proven particular in Complaint 1 of the Original Complaint, individually or in combination amount to conduct significantly below the relevant standard?

1. Mr Kennedy concedes that the admitted particulars of Complaint 1 constitutes unsatisfactory professional misconduct within the meaning of s 139B(1)(a) of the National Law, that is conduct significantly below the relevant standard. He did not address whether the conduct described in Particular 17 of Complaint 1 of the Original Complaint (which he denies) also constitutes conduct significantly below the relevant standard unsatisfactory professional conduct.
2. While not the most egregious of the conduct particularised in Complaint 1, nonetheless we find dispensing a prescription in the circumstances outlined in Particular 17, demonstrates the judgement possessed and care exercised by Mr Kennedy, fell "significantly below" the standard reasonably expected of a practitioner of Mr Kennedy's level of training or experience and therefore constitutes unsatisfactory professional misconduct within the meaning of s 139B(1)(a) of the National Law.
3. Each of the established particulars of Complaint 1 of the Original Complaint amounts to unsatisfactory professional misconduct within the meaning of s 139B(1)(a) of the National Law.

Does each admitted or proven particular in Complaint 1 of the Original Complaint, individually or in combination amount to conduct "improper or unethical conduct"?

1. A key issue in dispute between the parties is whether in addition to amounting to conduct significantly below the relevant standard, each established particular (the impugned conduct) of itself, or in combination with one or more particular, also amounts to improper or unethical conduct within the meaning of s 139B(1)(l) of the National Law.
2. The Commission in its submissions did not expressly address the basis for its contention that each established particular constitutes improper or unethical conduct. We understand the Commission to suggest that the conduct was improper or unethical because the explanation given by Mr Kennedy for the conduct to which he admits cannot be accepted. As we understand it, the Commission contends that the impugned conduct was attributable to some nefarious purpose.
3. The difficulty we have with this submission is that the Commission has not articulated the basis for its contention that each established particular constitutes improper or unethical conduct and nor has it proved the conduct which it suspects underlies the impugned conduct.
4. Decisions in which this Tribunal has found the conduct of health practitioners to constitute improper or unethical conduct involve such matters as proven cases of inappropriate sexual relations between health practitioners and patients (see, for example, Health Care Complaints Commission v Black (No 2) [2015] NSWCATOD 5), deliberate financial misconduct such as charging fees inappropriately (see, for example, Health Care Complaints Commission v Flekser [2016] NSWCATOD 1) and improperly prescribing drugs of addiction to addicted persons related to a health professional (see, for example, Health Care Complaints Commission v Do [2014] NSWCA 307). It is unnecessary to survey the entire body of the Tribunal's decisions in relation to this issue to conclude that where conduct is proven to breach ethical standards of a profession, it will also constitute improper or unethical conduct for the purposes of the National Law.
5. But this is a different case. The Commission urges that finding on the Tribunal on the basis of an inference or inferences it wishes us to draw without ever having alleged it in its Complaints, namely that the evidence points towards, but does not prove, that Mr Kennedy may have been involved in the irregular or illegal supply of anabolic steroids to body builders or for some other improper purpose to which he has not admitted.
6. There is no question that some of the particulars proven in this case raise that suspicion. If that inference could reasonably be drawn, and the suggestion of improper dealing with anabolic steroids proven circumstantially to the requisite level, there can be no question that Mr Kennedy could be found to have acted improperly and unethically. It would be a gross breach of the ethical standards applying to pharmacists' practice to do this.
7. The Commission has not specified in what way or ways the proven particulars prove improper or unethical conduct. In effect it says, "There is a lot of smoke." So there may be, but it falls to them to identify the seat of the fire. Given the gravity of the consequences of a finding of improper or unethical conduct, this is insufficient in our view. In our opinion, the phrase "improper or unethical", which is not defined in the National Law, connotes a deliberate or reckless violation of moral and professional norms to a significant degree. Carelessness, mistakes, disorganisation, even negligence will generally not be sufficient to constitute impropriety or unethical conduct.
8. In our view, Mr Kennedy's compounding of the Clenbuterol capsules is the closest the Commission gets to proving improper or unethical conduct. It is highly suspicious conduct, especially given his unsatisfactory explanation. Nevertheless, due to the paucity of other evidence surrounding this conduct, we cannot be satisfied to the requisite standard that Mr Kennedy's conduct, although very ill-advised, was improper or unethical.
9. Nor, taking all the proven particulars together, and applying the same standard of proof, can we be so satisfied.
10. With respect to Complaint 2 of the Original Complaint given that we are not satisfied that Mr Kennedy knowingly gave false information, we are not satisfied it amounts to improper and unethical conduct.

Does some or all of the conduct found to constitute unsatisfactory professional conduct amount to "professional misconduct"?

1. "Professional misconduct" is defined by s 139E of the National Law to mean: 139E Meaning of "professional misconduct" [NSW] For the purposes of this Law, "professional misconduct" of a registered health practitioner means- (a) unsatisfactory professional conduct of a sufficiently serious nature to justify suspension or cancellation of the practitioner's registration; or (b) more than one instance of unsatisfactory professional conduct that, when the instances are considered together, amount to conduct of a sufficiently serious nature to justify suspension or cancellation of the practitioner's registration.
2. In Complaint 3 of the Original Complaint, the Commission contends that the conduct in each established particular amounts to professional misconduct within the meaning of s 139E(a) of the National Law and, further, that in aggregate they amount to professional misconduct within the meaning of s 139E(b).
3. Mr Kennedy on the other hand submits that the impugned conduct was not of a sufficiently serious nature to justify suspension or cancellation of his registration.

Is the conduct of a sufficiently serious nature to justify suspension or cancellation of Mr Kennedy's registration?

1. In evaluating whether the conduct found to constitute unsatisfactory professional conduct is "sufficiently serious" to justify the sanction of suspension or cancellation, circumstances that bear on the objective assessment of that conduct must be taken into account. These include the nature and duration of the impugned conduct, any mitigating factors and an assessment of where the offending conduct falls on the spectrum of unsatisfactory professional conduct. Whether the degree of seriousness is sufficient to warrant suspension or cancellation is a matter of degree and judgment: Sabag v Health Care Complaints Commission [2001] NSWCA 411 at [99]. In assessing its gravity, the offending conduct is not to be measured by reference to the worst cases but by reference to the extent to which it departs from proper standards: Health Care Complaints Commission v Litchfield [1997] NSWSC 297; (1997) 41 NSWLR 630 at 638.
2. Considered as a whole the impugned conduct was objectively serious. This was not a case of an isolated technical breach of the legislative requirements governing the practice of pharmacy. Rather, as the evidence reveals, Mr Kennedy has committed multiple breaches over a long period. His conduct fell grossly short of the standard of conduct reasonably expected of members of the pharmacy profession. The careless, if not negligent, manner with which he discharged the responsibilities of his role had the potential to put customers at risk. While youth, inexperience, and lack of professional support played some role, nonetheless assessed in aggregate, the impugned constituted serious neglect of Mr Kennedy's responsibilities of a pharmacist.
3. The established particulars, considered in aggregate, are sufficiently serious to justify the suspension or cancellation of Mr Kennedy's registration.

What, if any, protective orders should be made?

1. Part 8, Division 3, Sub Division 6 of the National Law sets out the powers available to the Tribunal where a complaint is found proven. They include the power to caution, reprimand and counsel a practitioner and to impose conditions on the practitioner's registration. Where, as in this case, the practitioner is found guilty of professional misconduct, the Tribunal may decide to cancel or suspend the practitioner's registration: s 149C(1) of the National Law.
2. In exercising our functions under the National Law, the paramount consideration is the protection of the health and safety of the public: s 3A of the National Law.
3. The Commission's primary position is that the power to cancel Mr Kennedy's registration should be exercised unless we can be satisfied with each of the explanations given by Mr Kennedy for the impugned conduct. Mr Kennedy, on the other hand, contends that the more appropriate order is that his registration be subject to conditions.
4. In support of the submission that conditions are the more appropriate order, Mr Kennedy points to the following:

The circumstances under which the impugned conduct occurred

1. Mr Kennedy took over the role of Pharmacist in Charge when he was 26 years of age, shortly after being registered as a pharmacist. He asserts he was ill-equipped and provided with insufficient support to take on that role, especially given the number of customers and level of turnover in the Pharmacy. Mr Ashour concedes that he failed to provide Mr Kennedy with an adequate level of support. The Commission does not dispute that the lack of support provided to Mr Kennedy was a factor which contributed to the impugned conduct.

Evidence of steps taken to address conduct

1. Mr Kennedy's claim that he has made real, genuine efforts to improve his practice and comply with the Conditions is supported by the evidence given by Messrs Ashour and Tamil and the reports prepared by PSU auditor, Mr North. Mr North expressed the opinion that Mr Kennedy has made real, genuine efforts to learn from his errors and comply with the Conditions of his registration. In a report of 5 June 2014, Mr North wrote: At each and every stage of this audit I observed Mr Kennedy making every effort to comply with the conditions of his registration and endeavouring to put into practice the care, skill, knowledge and judgement that is expected of a pharmacist in the practice of pharmacy … … I was impressed by Mr Kennedy's sincerity and enthusiasm to meet his obligations to the Pharmacy Council and the steps he had taken to do so.
2. As the Commission points out, Mr North also identified ongoing problems in the Pharmacy, including the system used to scan prescriptions.

Claim of contrition and remorse

1. Mr Kennedy's claim of contrition and remorse is supported by his actions in admitting all but one of the particulars of the Original Complaint and the comment made by in his report of 5 June 2014: "I detected in Mr Kennedy a genuine remorsefulness for his past behaviour and a desire to rectify his conduct."

Evidence of good character

1. Messrs Stapleton, Ashour and Tamil and Ms Scully attested to Mr Kennedy's good character. Mr Stapleton and Dr James Freeman, the proprietor of Telehealth Australia, pointed to Mr Kennedy's efforts in making available a Hepatitis C treatment at reduced cost to people in the local community.
2. Mr Kennedy pointed to his involvement with local charities and assistance provided to customers in financial hardship.

Risk of reoccurrence

1. Mr Kennedy states that while it does not excuse his conduct, the stressors he faced during the period the conduct occurred were contributing factors. These include taking on the role of Pharmacist in Charge at a young age with little experience; working excessive hours; pressures resulting from assisting his wife run her business, the family's financial problems and the birth of his first child.
2. Mr Kennedy claims he has taken steps to ensure that he does not find himself again in a position where he is overwhelmed by work and unable to properly discharge the responsibilities of his role. These include reducing his hours of work, achieving a better work life balance, managing the stress associated with the investigation of his conduct by, among other things, consulting his doctor and taking regular exercise.

Consideration

1. As the Commission points out, the admissions made by Mr Kennedy were only made after the PSU identified compelling evidence of serious breaches of the legislative requirements governing the practice of pharmacy. We accept that some of the explanations given by Mr Kennedy for the admitted conduct are at best troubling. Nonetheless, given the time that has elapsed since the impugned conduct occurred, the steps taken by Mr Kennedy to remedy the identified shortcomings in his practice, his demonstrated willingness to address those shortcomings and learn from Mr North and the Pharmacists in Charge with whom he has worked since the conditions were imposed, his agreement to continue to have conditions imposed on his registration and his demonstrated remorse and insight, together with the evidence of good character we have decided not to suspend or cancel Mr Kennedy's registration. In our opinion such course is not necessary to protect the health and safety of the public. We have decided that a reprimand together with the imposition of stringent conditions on Mr Kennedy's registration are appropriate and will achieve both the protection of the public and the educative function of signalling to the public and the profession, the extent to which Mr Kennedy's conduct fell short of professional standards.

What conditions should be imposed on Mr Kennedy's registration?

1. The parties have each proposed draft conditions. While some differences in form, they agree that the conditions should include the appointment of an auditor and mentor and restrictions on Mr Kennedy's dispensing authority. They differ, however, on whether Mr Kennedy should be permitted to remain in the employ of Mr Ashour and when he should be permitted to resume the role of Pharmacist in Charge.
2. The Commission submits that Mr Kennedy should not be permitted to be employed by Mr Ashour. It contends that his older brother, Mr Ashour enjoys a position of influence. Coupled with Mr Ashour's interest as proprietor in the financial performance of the Pharmacy together with Mr Kennedy's own interest, on account of being paid, in addition to salary, a profit-based bonus, this may put Mr Kennedy in a position where his ethical responsibilities as a pharmacist conflict with his desire to maximise profits. In addition, the Commission points to the insufficient support Mr Ashour provided to Mr Kennedy in the past.
3. Mr Kennedy contends that if he were to be prohibited from working for his brother while his registration was subject to conditions, he would find it difficult, if not impossible, to secure employment as a pharmacist. The Commission accepts that Mr Kennedy may find obtaining employment more difficult than a pharmacist who is not subject to conditions but contends that the conditions it proposes, primarily the auditing of any pharmacy in which Mr Kennedy works and restrictions on his dispensing authority, are not so onerous as to render him unemployable.
4. In our view, in terms of his professional development, it probably would be in Mr Kennedy's interests at least for a period, not to be in the employ of his brother. At this early stage in his career, he would benefit from exposure to a range of practices. As Mr Kennedy acknowledges, the informal mentoring relationship with Mr North and working under the supervision of different pharmacists, has assisted him gain a better understanding of the requirements of the role of a pharmacist and obtain the skills need to meet those requirements.
5. While the employment condition proposed by the Commission may not, as Mr Kennedy fears, make him unemployable, as a matter of common sense, there is a real risk that it will make securing employment difficult. Given the changes introduced in the Pharmacy to address the shortcomings identified by the PSU and Mr North, together with the safeguards provided by the additional conditions we have decided to impose, in our view the object of the protection of the public can be achieved without the employment condition proposed by the Commission.
6. However, given, as seems likely, he will remain in the employ of Mr Ashour, we have decided it would be premature for Mr Kennedy to be permitted to be able, as he proposes to resume the role of Pharmacist in Charge in 12 months. In reaching that conclusion we have taken into account that while significant improvements have been made in the Pharmacy's procedures and steps have been taken to address the shortcomings identified by the PSU and Mr North, as Ms Dolan's report of her inspection of May 2016 reveals, problems continue. For this reason we have decided that one of the conditions of his registration should include that Mr Kennedy not work as the Pharmacist in Charge and not that he be entitled to seek review of that condition within 36 months of the date of this decision. At that point, and with the benefit of evidence about Mr Kennedy's progress during that period, the review body will be better equipped to determine whether Mr Kennedy is able to properly discharge the role of Pharmacist in Charge. For broadly the same reasons we have decided that Mr Kennedy should not be permitted to take on the role of Proprietor.
7. In addition, we have decided to impose an audit and mentoring requirement, broadly in line with that proposed by the parties.
8. For these reasons Mr Kennedy's registration is subject to these conditions: 1. Not to work in a pharmacy as the Pharmacist in Charge and not to seek review of this condition within 24 months of the date of the Tribunal's decision. 2. Not to be the proprietor of any pharmacy and not to seek review of this condition within 24 months of the date of the Tribunal's decision. 3. Must notify his employer(s) and Pharmacist in Charge at any pharmacy at which he is employed of the conditions imposed. Within five days of commencing new employment the Pharmacist must provide to the Council a statement signed by his current employer, which states that that they been provided with a copy of the conditions. 4. The practitioner must accept a mentor approved by the Pharmacy Council of NSW, to advise and assist the practitioner in the management of his pharmacy practice, focusing on legislative compliance with obligations pursuant to the Poisons and Therapeutic Goods Act (PTG Act) and the Poisons and Therapeutic Goods Regulation 2008 (PTG Regulation). 5. The practitioner must provide the mentor with a copy of the decision made by the New South Wales Civil and Administrative Tribunal which imposed these conditions (the NCAT decision) and the mentor must provide a signed copy of the decision to the Council within four weeks of being appointed as a mentor. 6. Nomination of a mentor must occur within four weeks of the NCAT decision. Such mentoring is to continue for a period of 12 months from the date of the Council's appointment or approval. The mentor shall report to the Council as and when required by it during the term or his or her appointment. 7. Must not possess, handle, supply, dispense, administer, compound or manufacture any pharmaceutical products containing any the following: 1. Stanozolol 2. Methandrostenolone 3. Clenbuterol 4. Trilostane 5. N-acetyl-L-cysteine 6. Clomiphene 7. Tadalafil 8. Dehydroepiandrosterone (DHEA) 1. To accept an auditor appointed by the Pharmacy Council of NSW, with the first audit to occur within three months of the NCAT Tribunal decision and thereafter at a frequency to be determined by the Council. To authorise the auditor to provide the Council with a report following each audit. The cost of the audit and Auditor's report to be met by the practitioner. 2. The practitioner is to meet the costs of compliance with the conditions. 3. While the practitioner's principal place of practice is New South Wales, the Pharmacy Council is the appropriate review body for the purposes of Pt 8, Div 8 of the Health Practitioner Regulation National Law (NSW) National Law. 4. Whilst the practitioner's principal place of practice is anywhere in Australia other than in New South Wales, ss 125 to 127 of the National Law are to apply, and accordingly in those circumstances a review of these conditions can be conducted by the Pharmacy Board of Australia.

Should Mr Kennedy be required to pay all of the Commission's costs?

1. The parties agree that Mr Kennedy should pay the Commission's costs but disagree about the proportion of costs he should be required to pay. The Commission submits that Mr Kennedy should be required to pay all its costs; Mr Kennedy submits that he should be required to between 60 to 70 per cent.
2. In support, Mr Kennedy argues that the Commission ought not to have pursued an allegation of dishonesty in relation to the purchase of 400g of Stanazolol in circumstances where he had provided an explanation for its purchase. Second, he contends that that there was a thin basis for the Commission's decision to pursue the allegations, which formed the basis of the Second Complaint. Third, he asserts that he sought to minimise the Commission's costs by, for example, not requiring its expert for cross examination. In contrast he points to the Commission's conduct of requiring most of his witnesses for cross-examination and pursuing an "unnecessarily adversarial approach".
3. The Commission contends that there is no basis to depart from the general rule and that it had an arguable case in relation to each of the complaints pursued. It argues that there is no foundation for the contention that it took an unnecessarily adversarial approach.

Consideration

1. In exercising the power to award costs, conferred by cl 13, Sch 5D to the National Law, the general rule is that costs follow the event: Health Care Complaints Commission v Philipiah [2013] NSWCA 342 at [42]; Qasim v Health Care Complaints Commission [2015] NSWCA 282 at [85], and Health Care Complaints Commission v Do [2014] NSWCA 307 at [51].
2. The presumption that the successful party is entitled to receive their costs is generally only displaced where there has been some "disentitling conduct" by the successful party: Oshlack v Richmond River Council [1998] HCA 11; 193 CLR 72 at [40]; Arian v Nguyen [2001] NSWCA 5 at [36].
3. Fairness dictates that the unsuccessful party typically bears the liability for costs unless it is demonstrated that some other order is appropriate: Currabubula Holdings Pty Ltd v State Bank of NSW [2002] NSWSC 232. It is for the losing party to establish a basis for any departure from the usual rule: Waterman v Gerling Australia Insurance Co Pty Ltd (No 2) [2005] NSWSC 1111 at [10]; NSW v Stanley [2007] NSWCA 330 at [24].
4. We do not accept the submission made by Mr Kennedy that it was somehow improper for the Commission to pursue the allegation concerning the purchase of the 400g of Stanazolol. Nor do we agree that the Commission took an unnecessarily adversarial approach by requiring most of his witnesses for cross examination. Credit was a live issue throughout these proceedings and it was entirely appropriate for the Commission to test the claims made by Mr Kennedy and those witnesses who gave supporting evidence.
5. Nonetheless, we have decided that it would not be appropriate for Mr Kennedy to be required to pay all of the Commission's costs. The Second Complaint was not found proven and had it been the subject of separate proceedings, on the application of the "usual rule" the Commission would be required to pay Mr Kennedy's costs. Added to the fact that Complaint 2 of the Original Complaint was also not established and Mr Kennedy's actions in admitting most of that Complaint, we have Mr Kennedy should be required to pay only 80 per cent of the Commission's costs.

I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales. Registrar 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: 16 May 2017