Holzberger v Secretary, Department of Health & Ageing

BACKGROUND 5 In early 2001, the applicant purchased a pharmacy known as the "Highgate Hilltop Pharmacy" and was approved pursuant to subs 90(1) of the Act in connection with it. The financial performance of that pharmacy was deteriorating. The applicant intended to close it, cancel its approval and use that cancellation to support an application for approval in connection with other premises at a more viable location. In prosecution of that plan, she subsequently commenced trading from premises in the newly established West-End Markets Shopping Centre. We will refer to those premises as the "West End Markets Pharmacy". As the applicant had no approval pursuant to subr 90(1) in connection with those premises, each prescription was taken to the Highgate Hilltop Pharmacy where it was filled. The relevant medication was then either taken to West End Markets Pharmacy for supply to the patient or delivered directly to him or her. It seems that for reasons associated with maintaining the viability of other pharmacies in the area, the respondent could not, or would not, have granted an approval pursuant to subr 90(1) in connection with the West End Markets Pharmacy. On 27 January 2006, the respondent granted an approval pursuant to subr 90(1) in connection with premises described as 'Shop 1.02, 119 Melbourne Street, South Brisbane' (the "West End Dispensary"). We will refer to those premises as the "West End Dispensary". Upon receipt of such approval, the applicant vacated the Highgate Hilltop Pharmacy and thereafter filled prescriptions, presented at the West End Markets Pharmacy, at the West End Dispensary.

THE WEST END DISPENSARY 6 The Tribunal described the West End Dispensary and its use by the applicant (at paras 15 to 21 of its reasons) as follows: '15. The building where the West End Dispensary is situated is a two storey building in a commercial area. Within the building are tenancies occupied by, at least, an architect and a firm of solicitors. 16. The West End Dispensary is on the ground floor of the building, at the rear of the premises. There are two means of access. One may enter the building from Melbourne Street, ascend a set of stairs to the first floor, walk along a corridor, descend another flight of stairs back to the ground floor and the West End Dispensary is to be found within an enclosed area near the foot of the stairs. 17. The area occupied by the West End Dispensary was formerly a storeroom and, in part of it at least, there remain files from the solicitor's practice…. 18. The West End Dispensary occupies an area of some three metres by three metres. It is furnished with a table, chairs and shelves. There are two computers, two printers and quantities of drugs. I find that the area, as at 28 June 2006, satisfied the requirements of Reg 23 (1) of the Health Regulations 1996 (Qld). So far as I was able to tell when I inspected the premises with the parties and their representatives they met the standards prescribed by Reg 24 of those Regulations. I infer from the evidence of Mrs Holzberger that that was the case as at 28 June 2006. 19. There is a sign in the West End Dispensary that proclaims that its opening hours are 11am to 3pm Mondays to Fridays but the sign is not visible to anyone not inside the West End Pharmacy. By and large during those times Mrs Holzberger is on the premises or making collections from, or deliveries to, the West End Markets Pharmacy. There is a distance of approximately 375 metres between the West End Dispensary and the West End Markets Pharmacy. It takes between 41/2 and 51/2 minutes to walk from one to the other depending upon traffic and traffic lights. 20. West End Dispensary can, at least in theory, be accessed from Fish Lane which is at the rear of the building but the back door is permanently locked and can be accessed only by tenants with keys. The West End Dispensary is not visible from Melbourne Street and is barely visible from outside the building at the rear. There is no external indication of the presence of the West End Dispensary. 21. As it seems to me I should proceed upon the footing that Mrs Holzberger does not intend to interact with the public at the West End Dispensary. She may, on exceptional occasions, deal with another tenant as a patient but that is truly an exception.'

THE WEST END MARKETS PHARMACY 7 At paras 22 to 27 of its reasons the Tribunal said: '22. The West End Markets Pharmacy has about it all the appearance of a conventional pharmacy in a shopping centre. The front of the shop has displays of the myriad of items that are sold in pharmacies - non-prescription medicines, hair products, soaps, perfumes, items of clothing and the like. At the rear of the shop is a counter and behind that a bench where some stocks of drugs are held. 23. Leaving aside the exceptional prescription dispensed to another tenant of 119 Melbourne Street, prescriptions that are dispensed at the West End Dispensary come from two sources. 24. Some are presented by patients at the West End Markets Pharmacy. During the "trading hours" of the West End Dispensary those patients are told that there will be a delay of 10 to 15 minutes. Outside those hours they will be informed of a much greater wait, perhaps overnight. Some are unconcerned by that, others go elsewhere. The prescriptions are taken to the West End Dispensary, dispensed by Mrs Holzberger and returned to the West End Markets Pharmacy for delivery to the patients and completion of the transaction. 25. Importantly, there is always a pharmacist on hand at the West End Markets Pharmacy to deal with those patients who want, or need, assistance from a qualified pharmacist. 26. The other group of prescriptions that are dispensed are those where Mrs Holzberger holds the prescriptions of the patients. The patients are predominately older patients who live in the vicinity of the old Highgate Hilltop Pharmacy. Mrs Holzberger has a number of patients who answer this description. The prescriptions of these patients are held at the West End Dispensary and are dispensed as required and delivered to the patients' homes by Mrs Holzberger. 27. In looking, in an overall sense, at the way in which the two premises operate it seems to me that the situation is analogous to a conventional pharmacy layout where the dispensing is undertaken in a back area or room, an area or room not ordinarily accessible to the public. But, in this case, the dispensary is separated from the other part of the shop by a distance of some 375 metres.'

THE LEGISLATION 8 Subsection 98(3) of the Act provides that: 'Where the Secretary is satisfied that an approved pharmacist is not carrying on business as a pharmacist at premises in respect of which the pharmacist is approved, the Secretary may (at his or her discretion), by notice in writing to the pharmacist, cancel the approval of the pharmacist under section 90.'

THE TRIBUNAL'S REASONS 9 The Tribunal identified the issues for its determination as: '(1) what is the proper construction of s 98(3)? (2) what is required to carry on business as a pharmacist? (3) if Mrs Holzberger was not carrying on business, should the discretion be exercised favourably to her?' 10 At paras 40 to 44 of its reasons the Tribunal considered 'what then is involved in carrying on business as a pharmacist', observing that: '41. It may be useful, at the outset, to put aside that which it is not. It is not, in this statutory context, the other retail activities commonly undertaken at pharmacies - the sale of cosmetics, soaps, clothing and the like. And it is not the sale of medicines as such. In the context of the National Health Act, and having regard to the constitutional limitations upon the Commonwealth, the business of a pharmacist must be the business of providing pharmaceutical benefits to those entitled to receive them. 42. That involves, undoubtedly, the preparation and dispensing of drugs and medicinal preparations. Dispense, in this sense, I take to mean making up medicine according to a prescribed formula although, as Mrs Holzberger points out in her evidence, that art is rarely practiced these days by pharmacists. Instead, medicines are already compounded, the task of the pharmacist, so far as dispensing is concerned, seems generally to be limited to one of selecting the appropriate pre-packed container of medicine and applying a label to it in accordance with the prescription. 43. But to regard that task as the only task of the pharmacist would be to relegate the role of the pharmacist to that of clerk. In my opinion the business of a pharmacist is much more than the mere mechanical process of selecting and labeling a container of appropriate medicine. Given the nature of the task of providing medicines the ambit of the task must, I consider, involve interaction with the patient (or the patient's agent) at the start of the process when the prescription is handed in and at the end of the process when the medicines are given to the patient and any necessary payment made. 44. I do not, however, suggest that the interactions with the patient at the start and end of the process need necessarily be with a qualified pharmacist. Frequently, I imagine, it would be with a sales assistant with training in pharmacy matters. But that would be done under the overall supervision of a qualified pharmacist.' 11 The expression 'carrying on business as a pharmacist' (the "expression") is not defined in the Act, although the word "pharmacist" is defined by reference to the registration provisions of state and territory legislation. The meaning of the expression might be established by reference to such legislation, but it is at least theoretically possible that such an approach would lead to there being different effective definitions in different states and territories. It is more likely that the expression uses the word "pharmacist"in a generic sense. The Shorter Oxford Dictionary defines that word to mean 'a person who prepares or dispenses medicines'. For present purposes, it is likely that such a business would include the supply of pharmaceutical benefits pursuant to the Act. In this context the expression 'pharmaceutical benefits' has the meaning attributed to it by s 84 of the Act, in effect a drug or medical preparation supplied pursuant to Pt VII of the Act. Although the respondent was a little equivocal on the subject, we understood both parties to assert that the expression had its ordinary meaning, including such supply. Other provisions of the Act support this approach to the meaning of the expression. See subss 90(2), 90(3), 90(3AB) and 90(4). 12 We do not accept the Tribunal's view that the business of a pharmacist is 'the business of providing pharmaceutical benefits to those entitled to receive them'. Such an interpretation places an unjustified gloss on the section. Further, the words 'a business for the supply of pharmaceutical benefits' are used in subr 90(6) and subs 98(5) of the Act. Those subsections were apparently inserted to deal with certain non-pharmacists who owned and operated pharmacies pursuant to repealed state legislation. See the second reading speech in connection with the introduction of the Health and Community Services Legislation Amendment Bill 1992 at Parliamentary Debates Vol H of R 184 for 25 June 1992 at 4002. See also the explanatory memorandum at cl 41. The second reading speech and the explanatory memorandum also appear to throw some light upon the meaning of s 98(3). At the same page in the second reading speech it was said that: 'The Bill also makes provision to allow for the approval of suppliers to supply pharmaceutical benefits to be cancelled where it is clear that the supplier has ceased to supply pharmaceutical benefits, without having to wait for the approval to be inactive for six months before it can be cancelled. The other existing provisions which safeguard against inappropriate cancellation remain in place.' 13 This statement may offer support for the Tribunal's approach but it is, to some extent, contradicted at cl 44 in the explanatory memorandum where it was said that: 'This clause amends section 98 of the Principal Act to enable the Secretary of the Department to cancel the approval of an approved pharmacist where the Secretary is satisfied that the pharmacist is not carrying on business as a pharmacist at the premises in respect of which the pharmacist is approved, or to cancel the approval of an approved medical practitioner where the Secretary is satisfied that the medical practitioner is not practising in the area in respect of which the medical practitioner is approved without having to wait for the approval to be inactive for six months.' 14 Both statements are consistent with the view that the expression has its ordinary meaning, understood as including the supply of pharmaceutical benefits. 15 The Act uses the expression 'business as a pharmacist' in connection with businesses carried on by registered pharmacists, but the expression 'a business for the supply of pharmaceutical benefits' in subs 90(6) to describe the business of a non-qualified pharmacist. Similarly, in subs 98(5) the Act refers to a person who is an approved pharmacist pursuant to subs 90(6) 'carrying on a business for the supply of pharmaceutical benefits'. It may have been thought inappropriate to describe a non-pharmacist as carrying on business as a pharmacist. Whatever the reason, the Act appears to distinguish between the two types of business. It would, we consider, be inappropriate in those circumstances to read the expression 'carrying on business as a pharmacist' as meaning 'carrying on a business for the supply of pharmaceutical benefits' or, using the wording adopted by the Tribunal in para 41 of its reasons, carrying on 'the business of providing pharmaceutical benefits to those entitled to receive them'. 16 The Tribunal's narrowing of the expression 'carrying on business as a pharmacist' appears to have led it to focus unduly upon the mechanics of receiving a prescription and delivering the prescribed medication to the relevant customer. It also led the Tribunal to consider information contained in a handbook The Australian Pharmaceutical Formulary and Handbook (15th Edition) published by the Pharmaceutical Society of Australia. This document seems to fix standards of practice, particularly in connection with the dispensing of medicines. The use made by the Tribunal of this material appears at para 48 of the reasons as follows: 'This material enables me to conclude that the business of a pharmacist encompasses both the initial and concluding dealings with the patient or the patient's agent as well as the purely dispensing process that occurs between those dealings. It matters not that a sales assistant may undertake those dealings. Where that happens, it happens under the supervision of the pharmacist.' 17 At paras 49 and 50 the Tribunal observed: '49. It is plain that, except in the most unusual case of another tenant wanting a prescription filled, patients did not attend upon the West End Dispensary. Other than in instances where the prescriptions are held at the West End Dispensary patients attend at the West End Markets Pharmacy. The dealings with patients when the prescription is handed over to the sales assistant or pharmacist and when it is collected are undertaken at the West End Markets Pharmacy. Only the purely dispensing function is undertaken at the West End Dispensary. 50. It follows that, on the view that I take as to the ambit of what is meant by the expression carrying on business as a pharmacist Mrs Holzberger was not carrying on business as a pharmacist at the West End Dispensary on 28 June 2006.' 18 The Tribunal then considered another argument advanced on behalf of the respondent, namely that in order that a pharmacist be carrying on business at particular premises it was necessary that: · a reasonable stock of pharmaceutical products should be kept on the premises; · the premises ought to be open to the public during normal business hours; and · it should be apparent from the outside of the premises, including by signs indicating normal opening hours, that a pharmacy is being conducted. 19 The Tribunal considered that the applicant had reasonable stocks on hand but in any event, it considered that this matter went to the efficiency of the business rather than to whether a business was being conducted. For similar reasons, the Tribunal rejected the proposition concerning signage. As to the question of public access the Tribunal said at para 54: 'The fact that the premises were not open to members of the public during normal business hours does not, in my view, add anything to my conclusion that, in reality, it was not intended that members of the public have access to the West End Dispensary. The way in which Mrs Holzberger carried on business as a pharmacist involved the performance of the dispensing part of that business at the West End Dispensary and the performance of that part which involved interaction with the public at the West End Markets Pharmacy.'

CARRYING ON BUSINESS AS A PHARMACIST 20 The Tribunal accepted that the applicant was carrying on business as a pharmacist, performing certain aspects at the West End Dispensary and other aspects at the West End Markets Pharmacy. That conclusion, in our view, led inevitably to the conclusion that the applicant was carrying on business at two locations. There was another aspect to her business. As the Tribunal found, she was also dispensing medication at the West End Dispensary for direct delivery to patients, a practice which she had previously followed at the Highgate Hilltop Pharmacy. There was no suggestion that this practice was inconsistent with the terms of her approval. Indeed, s 90 contemplates the supply of pharmaceutical benefits away from the premises which are the subject of the approval. Each of subss (1), (2) and (3) refers to supply 'at or from' the premises in question, indicating that the supply of pharmaceutical benefits need not necessarily occur "at" the approved premises. It is sufficient if such supply is made "from" those premises. The Tribunal's decision necessarily assumed that a pharmacist could only carry on business at the site at which prescriptions are received and medications physically delivered. Given the aspect of s 90 to which we have referred, it seems unlikely that this was Parliament's intention. 21 The law has long recognised that a person may carry on business at more than one location. See the discussion of the question in Davies v British Geon Ltd [1956] 1 WLR 769 at 777 to 778. See also the decision in Wright v Edwards [1961] SASR 267, per Ross J at first instance at 279 and on appeal, per Napier CJ at 283 and Mayo J at 284-285, Brazel J concurring in the reasons of the Chief Justice. The facts in that case were somewhat similar to those in the present case, but in the end, the case is of little assistance save to the extent that it recognises that general proposition. 22 In our view, the Tribunal was correct in concluding that the applicant was carrying on business as a pharmacist, performing some functions at the West End Dispensary and others at the West End Markets Pharmacy. However it made an error of law which led to the erroneous conclusion that she was not carrying on business at the West End Dispensary. The error was to treat the expression 'carrying on business as a pharmacist' as meaning 'carrying on the business of supplying pharmaceutical benefits to those entitled to receive them'. This led the Tribunal to focus on the physical request for, and supply of, the benefits to the exclusion of another aspect, equally important to the overall conduct of the business. That was the storage of stock and preparation of it for supply to patients. As a result the Tribunal found that the applicant was carrying on business only at the West End Markets Pharmacy where prescriptions were presented and relevant medication delivered. This finding was inconsistent with the recognition contained in the Act that such medication might be delivered from the relevant premises rather than at them. 23 We should note an alternative submission advanced by the respondent. It was that the overall statutory regime, including rules made pursuant to subs 99L(1) of the Act, evinced an intention to regulate approvals having regard to existing approvals concerning premises in the same general area. Presumably, the intention was to protect the viability of existing pharmacies. The respondent did not identify any aspect of the rules which might directly assist in interpreting the expression 'carrying on business as a pharmacist'. She rather submitted that the construction adopted by the Tribunal would better serve the apparent purpose of the scheme established pursuant to the Act and rules. 24 We have some difficulty with this approach. In construing legislation, only limited use may be made of subordinate legislation. In Pearce DC and Geddes RS, Statutory Interpretation in Australia (6th ed, Lexis Nexis, Australia, 2006) at 3.41, the learned authors observe that: 'In Australia the general rule has been that delegated legislation made under an Act should not be taken into account for the purposes of interpretation of the Act itself.' 25 There is said to be an exception to that general rule where the relevant delegated legislation forms part of a legislative scheme. In that case it may be 'useful to refer to [the delegated legislation] to ascertain the nature of the scheme.' In the course of argument in Brayson Motors Pty Ltd (In Liquidation) v Commissioner of Taxation for the Commonwealth (1984-1985) 156 CLR 651 at 652, Mason J made an observation to that effect. We accept that a purpose of the approval process is to rationalize the location of competing pharmacies. However the general purpose of the legislative scheme is certainly wider than that. In any event it does not follow that we should construe the expression 'carrying on business as a pharmacist' in a way which will best serve the statutory purpose when its meaning is otherwise clear. There is no real suggestion that our preferred construction would frustrate that purpose.

FURTHER FINDINGS OF FACT 26 Subsection 44(7) of the AAT Act provides relevantly as follows: 'If a party to a proceeding before the Tribunal appeals to the Federal Court of Australia under subs (1), the Court may make findings of fact if: (a) The findings of fact are not inconsistent with findings of fact made by the Tribunal (other than findings made by the Tribunal as a result of an error of law); and (b) It appears to the Court that it is convenient for the Court to make the findings of fact, having regard to: (i) The extent (if any) to which it is necessary for facts to be found; and (ii) The means by which those facts might be established; and (iii) The expeditious and efficient resolution of the whole of the matter to which the proceeding before the Tribunal relates; and (iv) The relevant expense to the parties of the Court, rather than the Tribunal, making the findings of fact; and (v) The relative delay to the parties of the Court, rather than the Tribunal, making the findings of fact; and (vi) Whether any of the parties considers that it is appropriate for the Court, rather than the Tribunal, to make the findings of fact; and (vii) Such other matters (if any) as the Court considers relevant.' 27 We consider that the Tribunal's finding that the applicant was not carrying on her business at the West End Dispensary was based upon the error of law which we have identified. Our jurisdiction to make a contrary finding is enlivened pursuant to subs 44(7)(a). In the course of submissions the applicant submitted that we should make all appropriate findings pursuant to subs 44(7). We did not understand the respondent to oppose that course. We therefore find that at the relevant time the applicant was carrying on business as a pharmacist at Shop 1.02, 199 Melbourne Street, South Brisbane.

ORDERS 28 We order that: 1. the appeal be allowed; 2. the order of the Tribunal made on 8 September 2006 affirming the respondent's decision pursuant to s 98(3) of the National Health Act 1953 (Cth), made on 28 June 2006, be set aside; 3. the respondent's said decision be set aside; and 4. the respondent pay the applicant's costs of the appeal, including reserved costs. I certify that the preceding twenty-eight (28) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices Dowsett, Greenwood and Collier.

Associate: Dated: 18 May 2007 Counsel for the Applicant: Mr J Logan SC

Solicitor for the Applicant: McCarthy Holzberger Solicitors

Solicitor for the Respondent: Australian Government Solicitor