Koutsouroupas v Minister for Health and Aged Care [2026] FCAFC 13

pharmaceutical benefit means the following:

(a) if a declaration under subsection 85(2) is in force in relation to a drug or medicinal preparation (the drug) and paragraph (b), (c) and (d) do not apply - the drug;

(b) if a determination under subsection 85(3) is in force in relation to a form of the drug and paragraph (c) and (d) do not apply - the drug in that form;

(c) if a determination under subsection 85(5) is in force in relation to a manner of administration of that form of the drug and paragraph (d) does not apply - the drug in that form with that manner of administration;

(d) if a determination under subsection 85(6) is in force in relation to a brand of a pharmaceutical item that is the drug in that form with that manner of administration - that brand of the drug in that form with that manner of administration.

1. Upon application by a pharmacist, s 90 of the Act enables the Secretary to approve a pharmacist to supply pharmaceutical benefits at particular premises, and s 92A of the Act enables the approval of an approved pharmacist to be made subject to conditions. More specifically, s 92A(1)(f) allows such approvals to be made subject to conditions (including conditions relating to premises) determined by the Minister pursuant to s 92A(1A) of the Act, which permits the Minister to determine conditions by way of legislative instrument. Section 90(5AA) of the Act provides that "[i]f, under this section, a pharmacist is granted approval to supply pharmaceutical benefits at particular premises, the pharmacist may also supply pharmaceutical benefits from those premises".
2. Pt VII of the Act also establishes, in Div 4B, the Australian Community Pharmacy Authority. The Minister is required to determine rules to which the Authority (as established in s 99J of the Act) is subject when making recommendations under s 99K(1) of the Act: see ss 99K(2) and 99L of the Act. Under s 99K(1) of the Act, the Authority may make recommendations as to whether an applicant under s 90 of the Act ought to be approved, and if so, any conditions to which the approval ought be subject.
3. The relevant legislative instrument is the National Health Legislation Amendment (Conditions of Approval for Approved Pharmacists) Instrument 2023 (Cth). The Instrument gives effect to various amendments to the National Health (Pharmaceutical Benefits) (Conditions for approved pharmacists) Determination 2017 (Cth): See Sch 1 to the Instrument.
4. The explanatory statement to the Instrument sets out its purpose as follows:

Purpose and operation

The National Health Legislation Amendment (Conditions of Approval for Approved Pharmacists) Instrument 2023 (the Amending Instrument) amends the National Health (Pharmaceutical Benefits) (Conditions of approval for approved pharmacists) Determination 2017 (the Determination) to set out the conditions for which approved pharmacists must comply in supplying pharmaceutical benefits, in addition to the conditions specified in subsection 92A(1). The purpose of the Amending Instrument is to clarify the policy intent that an approved pharmacist should not be involved in the supply of pharmaceutical benefits at premises which are not approved, or make a claim for payment or a claim for an advance payment in respect of pharmaceutical benefits supplied at or from premises which are not the approved premises, unless the Secretary of the Department of Health and Aged Care (the Secretary) has granted permission to the pharmacist in respect of those other premises, following disaster or exceptional circumstances.

(Emphasis in original.)

1. The effect of Item 18 of Sch 1 to the Instrument is to repeal the former ss 8 and 9 of the Determination and substitute those sections with new ss 8 - 15. There is also a new s 16 setting out the saving and transitional provisions in relation to the Instrument. Item 5 of Sch 1 to the Instrument inserts further definitions into the Act. Item 10 of Sch 1 to the Instrument outlines the application of the Determination.
2. The relevant items of the Instrument are extracted below.

18 Sections 8 and 9

8 Ensuring other pharmacists at approved premises comply with conditions

An approved pharmacist that is approved in respect of particular premises must ensure that a registered pharmacist:

(a) who is not an approved pharmacist in respect of those premises; and

(b) who dispenses pharmaceutical benefits at those premises;

complies with the conditions set out in this Determination.

9 No purported supply of pharmaceutical benefits at or from unapproved premises

Purported supply at unapproved premises

(1) An approved pharmacist must not purport to supply a pharmaceutical benefit at premises that are not approved premises for the pharmacist.

Note: A reference to the supply of pharmaceutical benefits at premises is a reference to the supply of pharmaceutical benefits to people who are at the premises when the supply is made (see subsection 4(3) of the Act).

Purported supply from unapproved premises

(2) An approved pharmacist must not purport to supply a pharmaceutical benefit from premises that are not approved premises for the pharmacist.

10 Requirements for supply of pharmaceutical benefits at or from approved premises - dispensing steps

(1) An approved pharmacist must not supply a pharmaceutical benefit at or from approved premises for the pharmacist if a requirement in this section is not met in relation to the dispensing of the benefit.

Benefit must be at approved premises when dispensing steps performed

(2) The benefit must be at the approved premises when each dispensing step in the dispensing of the benefit is performed.

Registered pharmacist must dispense or supervise dispensing

(3) A registered pharmacist must dispense, or directly supervise the dispensing of, the benefit.

Registered pharmacist must be physically present at approved premises when dispensing steps performed

(4) The registered pharmacist dispensing, or directly supervising the dispensing of, the benefit must be physically present at the approved premises when each dispensing step in the dispensing of the benefit is performed.

11 Requirements for supply of pharmaceutical benefits at or from approved premises - prescriptions other than medication chart prescriptions

(1) An approved pharmacist must not supply a pharmaceutical benefit at or from approved premises for the pharmacist if:

(a) the benefit is supplied on the basis of a prescription that is not a medication chart prescription; and

(b) the requirement in subsection (2) is not met in relation to the dispensing of the benefit.

(2) The registered pharmacist dispensing, or directly supervising the dispensing of, the benefit must, when the step mentioned in paragraph (a) of the definition of dispensing step in section 5 is performed, see the prescription at the approved premises.

Note: For supplies of pharmaceutical benefits without prescriptions, see the following:

(a) subsection 89A(1) of the Act and section 46 of the Regulations (supply without prescription);

(b) section 33 of the Regulations (prescriber bag supplies);

(c) section 48 of the Regulations (supply before surrender of written prescription).

13 Deferred supply authorisations to be prepared only at approved premises

(1) This section applies to the preparation by an approved pharmacist of a deferred supply authorisation.

(2) The approved pharmacist must ensure that the authorisation is prepared by, or under the direct supervision of, a registered pharmacist who is physically present at premises that are approved premises for the approved pharmacist.

14 Approval numbers not to be used in connection with unapproved premises

An approved pharmacist must not use, or allow the use of, the pharmacist's approval number in respect of particular premises in relation to:

(a) the dispensing of a pharmaceutical benefit at any other premises; or

(b) the purported supply of a pharmaceutical benefit at or from any other premises; or

(c) the preparation of a repeat authorisation at any other premises; or

(d) the preparation of a deferred supply authorisation at any other premises.

Note 1: For example (for paragraphs (a) and (b)), an approved pharmacist must not affix (or allow to be affixed) a label to a pharmaceutical benefit purportedly supplied by the approved pharmacist if:

(a) the label displays the approval number allotted in respect of premises that are approved premises for the pharmacist; and

(b) the benefit is dispensed at, or purportedly supplied at or from, premises other than those approved premises for the pharmacist.

Note 2: For example (for paragraph (c)), an approved pharmacist must not mark (or allow the marking) on a repeat authorisation the approval number allotted in respect of premises that are approved premises for the pharmacist if the repeat authorisation is prepared at premises other than those approved premises for the pharmacist.

Note 3: For example (for paragraph (d)), an approved pharmacist must not mark (or allow the marking) on a deferred supply authorisation the approval number allotted in respect of premises that are approved premises for the pharmacist if the deferred supply authorisation is prepared at premises other than those approved premises for the pharmacist.

15 Approved pharmacists not to enter into certain arrangements

An approved pharmacist must not enter into an arrangement with the owner or operator of another pharmacy business for the supply by the approved pharmacist of pharmaceutical benefits to persons presenting at that pharmacy business.

1. Item 5 of Sch 1 to the Instrument defines, amongst other things, "dispensing step" and sets out a range of activities, including reviewing the prescription, the preparation and labelling of the benefit and, if necessary, preparing a "repeat" prescription and recording the dispensing in the pharmacy system.
2. Item 10 of Sch 1 to the Instrument sets out the circumstances in which the Determination applies to the dispensing and supply of a drug or medicinal preparation.

1. The primary Judge dismissed the appellants' originating application below with costs: PJ at [50].
2. The appellants relied upon two main contentions which the primary Judge described at [21] of the PJ as follows:

The applicants advance, in substance, two contentions. They are:

(a) new ss 10, 12, 14 and 15 (and the associated definition of "dispensing steps" to be inserted into s 5) are inconsistent with the express provision in the Act permitting supply of pharmaceutical benefits "from" approved premises; and

(b) new ss 10, 11, 13 and 14 go beyond the power to impose conditions in that they seek to create a new regulatory regime going beyond the policies and purposes of the Act.

1. In response to the first contention, described by the primary Judge at [21] as '(a)', his Honour considered the evolution of s 90 of the Act, and the interaction between Holzberger v Secretary, Department of Health and Ageing (2007) 158 FCR 586; [2007] FCAFC 68 and the National Health Amendment (Pharmaceutical Benefits) Act 2007 (Cth) (Amendment Act): PJ at [22] - [26]. Holzberger was a decision of the Full Court of this Court which concluded that the inclusion of the words "at or from" in a pre-2007 version of the Act "contemplates the supply of pharmaceutical benefits away from the premises which are the subject of the approval": PJ at [23], quoting Holzberger at [20]. Subsequent to this decision, ss 90(1) - (3) of the Act were amended so that an approval is granted in relation to supply "at" approved premises: PJ at [24].
2. Based on the consideration referred to above and the extrinsic material to the Amendment Act, his Honour ultimately concluded, contrary to the appellants' submissions, that the Amendment Act had not "re-enacted the earlier wording of s 90 and thereby endorsed the construction given to that wording in Holzberger": PJ at [26].
3. His Honour concluded that s 90(5AA) of the Act needed to be understood in the context of the introduction of s 4(3): PJ at [27] - [28]. His Honour considered, and the Minister conceded, that a condition imposed pursuant to s 90(5AA) of the Act would not be valid if it purported to "prohibit the supply of pharmaceutical benefits 'from' approved premises": PJ at [28].
4. The primary Judge went on to consider that "[t]he placement of s 90(5AA) in s 90, and its genesis alongside the amendments made in 2007 to other provisions in that section (as well as s 4(3)), sheds light on the relationship between the concepts of supply of pharmaceutical benefits 'at' and 'from' premises": PJ at [29]. At [29], his Honour explained as follows:

(a) Supply of a pharmaceutical benefit "at" approved premises - which is what the pharmacist must propose to do in order to obtain approval under s 90(1), (2) or (3) - connotes the physical handing over of the pharmaceutical benefit (ie, the drugs in the form and quantity prescribed) to a customer at those premises. The definitional provision in s 4(3) confirms this. The language is agnostic as to whether anterior steps, such as those involved in "dispensing" medication in accordance with applicable laws and procedures, are also undertaken at those premises (leaving those issues, at least potentially, to be regulated by conditions under s 92A).

(b) The "supply" referred to in s 90(5AA) is supply "from" the premises in respect of which the pharmacist is approved. This was obviously conceived as something different from supply "at" those premises; however, the connection with approved premises is important. The expression connotes that the relevant pharmaceutical benefit is dispatched "from" those premises (not from a remote warehouse or depot) to the patient or to a location where the patient can collect it. Because the premises in respect of which approval is given will necessarily be a place "at" which the pharmacist supplies (or at least proposes to supply) pharmaceutical benefits, the permission granted by s 90(5AA) does not confer an entitlement to conduct business as an approved pharmacist without maintaining a shopfront where members of the public can attend in person to obtain pharmaceutical benefits.

1. His Honour considered the relationship between s 4(3) of the Act and the new s 9 included in Item 18 of Sch 1 to the Instrument: PJ at [31] - [35]. Citing Kelly v The Queen (2004) 218 CLR 216; [2004] HCA 12 at [103], his Honour considered that the "usual approach to applying a definition" cannot be applied "in any mechanical way in the case of a provision such as s 4(3) that does not simply supply text that can stand in the place of a defined term": PJ at [33]. The primary Judge construed s 4(3) by reference to its context, stating that it was clearly intended to better clarify the connection between supplies made "at" approved premises and supplies made "from" approved premises: PJ at [34]. Ultimately, his Honour concluded at [35] of the PJ that:
   • The "supply" of pharmaceutical benefits is treated "as an activity engaged in by the pharmacist" under ss 4(3) and 90 of the Act;
   • If pharmaceutical benefits are supplied "from" approved premises by way of "postal service or a courier" to a patient, the pharmacist ceases to have a role at that stage, and consequently, there is "no relevant supply 'at' the place where the patient receives the delivery"; and
   • The new s 9, contained within Item 18 of Sch 1 to the Act, is intended to prevent a pharmacist, their employee or agent, from "physically handing over pharmaceutical benefits to patients who attend premises in person, where those premises are not approved".
2. His Honour then considered the addition of the new s 10 included in Item 18 to Sch 1 of the Instrument and the definition of "dispensing steps" contained in the new s 5 as per Item 5 to Sch 1 of the Instrument: PJ at [36]. His Honour characterised the requirements imposed by these amendments as "the administrative steps involved in lawfully dispensing medication to be performed at approved premises, by a registered pharmacist physically present, and for the relevant pharmaceutical benefit to be at the approved premises while those steps are performed": PJ at [36]. His Honour did not consider these requirements to be "inconsistent with the pharmaceutical benefit then being sent to a patient who is at another location": PJ at [36].
3. The primary Judge did not consider that s 10 is an attempt to regulate the conduct of registered pharmacists but instead, considered that it simply imposed "a condition on the continuation of a pharmacist's status as an 'approved pharmacist' under the Act": PJ at [37]. This conclusion was borne out by the condition having been made in "overt reliance only on s 92A(1A)": PJ at [37]. His Honour distinguished the effect of the section on registered pharmacists and approved pharmacists, insofar as it may condition an approved pharmacist's ability to "claim and receive payments under the Act" and lead to "suspension or revocation if breached" but does not impact "the lawfulness of any particular dispensing or supply of any drug" by a registered pharmacist: PJ at [37].
4. The primary Judge considered that the new ss 9, 10 and 11 included in Item 18 of Sch 1 to the Instrument applied "to a supply by an approved pharmacist whether or not the pharmacist claims an advance or payments from the Commonwealth in respect of that supply": PJ at [38]. At [38] of the PJ, his Honour did not consider this to be inconsistent with the Act for the following reasons:
   • Section 92A operates to impose conditions on "a pharmacist's approval" but not on "claims for payment for individual supplies";
   • A pharmacist's compliance with such conditions, including those made pursuant to ss 92A(1)(f) and (1A) of the Act, is the "price of avoiding potential suspension or revocation of approval under s 95" of the Act;
   • Section 92A(1)(f) of the Act is framed broadly and clearly contemplates conditions in respect of premises; and
   • The "statutory language" leaves room for the Minister to "pursue policies that encourage or discourage particular behaviours or business models by imposing conditions that control a pharmacist's continued access to payments under the pharmaceutical benefits scheme".
5. As to the second contention, described by the primary Judge at [21] as '(b)', his Honour characterised the power in s 90 of the Act as the power to approve a pharmacist in order to supply pharmaceutical benefits at particular premises, rather than to approve the premises themselves. The primary Judge noted that the exercise of the power in s 90 of the Act is "implicitly allowed, if not required, to take into account recommendations by the Authority, which must consider applications for approval in accordance with rules prescribed under s 99L": PJ at [41].
6. The primary Judge also noted that "the rules made under s 99L have at various times reflected agreements reached between the Government and the Pharmacy Guild of Australia", as identified in Wood v Australian Community Pharmacy Authority [2002] FCA 1592: PJ at [42]. His Honour also referred to Walkerden v Wodonga Pharmacy Pty Ltd (2015) 230 FCR 243; [2015] FCA 273 and Jele Chemists Pty Ltd v Australian Community Pharmacy Authority [2023] FCA 1652, amongst other authorities: PJ at [42] - [43].
7. Relevantly, at [44] of the PJ, his Honour concluded:
   • "The power to approve or deny approval to a pharmacist in relation to particular premises is not shaped or constrained by any provision in the Act except, arguably, that by implication the Secretary must have regard to the recommendation of the Authority";
   • "Consideration of the subject matter, scope and purpose of Part VII of the Act is similarly unproductive from the applicants' point of view. Part VII creates a regime for the provision of pharmaceutical benefits at public expense";
   • "Within that regime, s 90 makes plain that not every person who is entitled to practise as a pharmacist is to be allowed to supply pharmaceutical benefits and claim payments therefor under the Act. It is only those who are approved; yet no criteria are supplied by the Act for approval"; and
   • "The establishment of the Authority to advise the Secretary on applications for approval, with provision in s 99L for rules which the Authority is to apply, is consistent with the understanding that the power of approval in s 90 is otherwise not limited as to the kinds of policies that can legitimately shape its exercise".
8. The primary Judge considered ss 92A(1A), 92A(1)(f) and 90 of the Act at [45] of the PJ, as follows:

The power conferred by s 92A(1A) to impose conditions for the purpose of s 92A(1)(f) (breach of which potentially leads to the revocation of approval) is the obverse of the power under s 90 to decide whether approval should be granted. The inclusion of that express power indicates that the Minister was intended to have a measure of control over the composition from time to time of the cohort of "approved pharmacists". The power mirrors s 90 in that it is also not constrained by any express criteria. As with s 90, its anodyne language leaves room for a range of policies to be pursued concerning who is to be permitted to provide pharmaceutical benefits under the Act (and to receive payments from the Commonwealth) and the practices they must follow in order to retain that permission.

1. His Honour found that the Act did not convey "a policy that any particular aspect of a pharmacist's practice or business model is immunised from becoming the subject of a condition potentially affecting their ongoing approval": PJ at [46]. Nor did the primary Judge consider that the Act evinced a specific approach to "approvals and conditions of approval" upon which the new sections enlarged: PJ at [46].
2. The primary Judge did not consider that the case law to which the appellants had referred his Honour, with respect to the scope of powers to make regulations which prescribe "necessary or convenient matters", or matters which are "necessary or expedient for the administration of this Act", was of any use: PJ at [47], referring to Morton v Union Steamship Company of New Zealand Ltd (1951) 83 CLR 402; [1951] HCA 42 at 410 and Shanahan v Scott (1957) 96 CLR 245; [1957] HCA 4.
3. His Honour concluded that there was "[n]o express limit" conveyed by s 92A(1A) of the Act upon the sorts of conditions which could be imposed: PJ at [47]. The scheme of Pt VII of the Act did not support "the implication of any limits that might be transgressed by the impugned provisions of the Instrument", either: PJ at [47].
4. Ultimately, his Honour concluded at [48] that:

This does not mean that there is no limit on the conditions that may be imposed under s 92A(1A). A condition that was frivolous or imposed for purposes having no rational connection with the disposition of Commonwealth funds in the public interest (to use the canonical example, a condition that a pharmaceutical benefit may not be dispensed by a person with red hair) would not constitute a valid exercise of the power. There may be other limits as well. However, the impugned provisions of the Instrument do not approach such limits.

1. The appellants rely upon the following materials:
   • Written submissions dated 13 February 2025;
   • Written submissions in reply dated 5 March 2025; and
   • Written post-hearing submissions dated 9 May 2025, responsive to the Court's Orders dated 17 March 2025.
2. At the hearing, the appellants also handed up, and relied upon, the Explanatory Memorandum to the National Health Amendment (Pharmaceutical Benefits) Bill 2007 (Cth).
3. The Minister relies upon the following materials:
   • Written submissions dated 26 February 2025; and
   • Written post-hearing submissions dated 11 April 2025, responsive to the Court's Orders dated 17 March 2025.
4. The appellants made written submissions which challenged the constitutional validity of the condition-making power under the Act, but they were ultimately not pressed.

1. I do not consider that ss 10, 11, 13 and 14 of Item 18 of Sch 1 to the Instrument exceed the condition-making power in the Act by virtue of regulating the "dispensing" of pharmaceutical benefits in detail, nor that the text, purpose and scope of the Act support the appellants' contention that it is only concerned with the "supply" of pharmaceutical benefits.
2. Ultimately, the Court must engage in statutory construction, which turns upon the "text, context and evident purpose" of the Act in question: see Independent Liquor & Gaming Authority v Whitebull HTL Pty Ltd [2023] NSWCA 224 at [75] - [77], [107] - [109]. The parties agree that the Acts Interpretation Act 1901 (Cth) applies wholescale: s 13(1)(a) of the Legislation Act 2003 (Cth). However, the parties differ as to the consequences of s 13(1)(c) of the Legislation Act, which requires that the Instrument be interpreted within the parameters of the enabling legislation, such that it does not exceed the power by which it was made. Although the parties do not dispute this accepted approach to statutory interpretation, they seek to rely upon different aspects of the text, context and purpose of the Act to ground their contentions.
3. The appellants argue that the Act is only concerned with the supply of pharmaceutical benefits, relying upon:

(a) Section 4 of the Act, which details its interpretation;

(b) Pt VII, Divs 3 and 3AA of the Act, which deal with, respectively, the "[p]ayment for supply of pharmaceutical benefits" and "[r]ecovery of payments for the supply of pharmaceutical benefits";

(c) Pt VIII of the Act, which deals with "[c]ommittees of Inquiry" with respect to abuses of the pharmaceutical benefits scheme;

(d) The second reading speech with respect to the National Health Bill 1953 (Cth); and

(e) The apparent distinction between "supply" and "dispensing" within various provisions of the Act.

1. I accept that (a) - (c) above support that the PBS may be characterised as "a monetary scheme that entitles the pharmacist to receive a payment for the 'supply' of certain pharmaceutical benefits ... to members of the public". However, I do not consider those references to the Act to be determinative of its scope and purpose.
2. The appellants also rely upon the second reading speech at 157 for the proposition that the Act was "introduced to establish the Pharmaceutical Benefits Scheme (PBS), with the co-objectives of wide community coverage and controlled costs". The second reading speech relevantly states:

Four features are indispensable to the permanence of the scheme. They are -

The quality of medical service must be kept high.

The coverage of the people must be very wide.

The costs of the scheme must be controlled.

Hospital administration must be kept solvent.

1. The appellants contend that reliance on the extrinsic materials to the Act from the time it was originally enacted is not precluded by s 11B of the Acts Interpretation Act, especially when construing the context of a "supply", which they say "has not been relevantly altered by amendments" to the Act.
2. However, the second reading speech to the National Health Bill 1953 (Cth) does not assist the appellants in the manner that they advance. First, there was no power to make conditions in the Act as it was originally drafted. Second, the Court must interpret the Act "as a single statute in its present, amended form": Commissioner of Stamps (SA) v Telegraph Investment Co Pty Ltd [1995] HCA 44; (1995) 184 CLR 453 at 463 and 479. Third, the use to which the second reading speech for the National Health Bill 1953 (Cth) can be put is limited to informing the Court of the original intention of Parliament with respect to the Bill in the form that existed at that time. Finally, I accept the Minister's contention that the various amendments to the Act over time and the associated extrinsic materials are pertinent to the question of the Act's scope and purpose, such that it is not limited in the manner contended for by the appellants.
3. To that end, the Minister relies upon the second reading speech to the National Health Amendment Bill 1995 (Cth), contained in the Official Hansard of 30 March 1995 at 2549 which states:

... The bill will permit the secretary to apply conditions for holding an approval to supply pharmaceutical benefits, primarily applying standards of practice developed by pharmacy itself. The bill also introduced the ability of the minister to agree to professional allowances for specific professional pharmacy activities outside the pharmaceutical benefits supply functions. ...

1. The appellants' response to that submission is that the second reading speech with respect to the National Health Amendment Bill 1995 (Cth) must "be understood by reference to the purpose of the Act", which they characterise as being "the supply of pharmaceutical benefits from the pharmacist to the customer to ensure the efficient operation of the monetary scheme (the PBS), and with the appropriate carveout for State and Territory regulation" (original emphasis). Notwithstanding that the Act's purpose may be so characterised, nothing in this purpose or the materials relied upon by the appellants supports a conclusion that the text, purpose and scope of the Act draw a clear delineation between "supply" and "dispensing", such that conditions relating to "dispensing" are beyond the condition-making power provided for in s 92A(1A) of the Act.
2. The appellants argue that at [46] - [48], the primary Judge "set the boundary too wide". They argue that the only specific limitations on the condition-making power to which the primary Judge referred were in relation to "a condition that was frivolous or imposed for purposes having no rational connection with the disposition of Commonwealth funds in the public interest".
3. Although I accept the appellants' proposition that a condition-making power cannot exceed the boundaries of the Act which grants the power to condition, I do not accept the appellants' contentions in relation to the boundaries themselves in this case. I reject their submission as in my view the Act does not preclude the making of conditions regarding the administration of the pharmaceutical benefits scheme, and in particular, the dispensing of pharmaceutical benefits, that is drugs. The appellants' contention that the condition making power cannot exceed the "scope, purpose and object of the relevant part of the Act" (emphasis added) frames the relevant inquiry too narrowly. Rather, the condition-making power cannot exceed the scope, purpose and object of the Act as a whole.
4. Relatedly, I reject the appellants' submissions as to the alleged error arising from the primary Judge's focus on s 99L of the Act at PJ [41] - [43]. The appellants submit that the primary Judge erred on the basis that the "width of the condition-making power in the Act is not to be understood by reference to subordinate legislation": ss 99J - 99L of the Act. In respect of this, the appellants rely upon Shanahan v Scott at 250 as follows:

The result is to show that such a power does not enable the authority by regulations to extend the scope or general operation of the enactment but is strictly ancillary. It will authorise the provision of subsidiary means of carrying into effect what is enacted in the statute itself and will cover what is incidental to the execution of its specific provisions. But such a power will not support attempts to widen the purposes of the Act, to add new and different means of carrying them out or to depart from or vary the plan which the legislature has adopted to attain its ends.

1. In that regard the appellants also contend that the existence of rules to ensure an even geographical spread of pharmacies does not provide a basis for regulating dispensing practices.
2. Those submissions are rejected. Section 99L of the Act deals with the Minister's obligation to determine rules, by way of legislative instrument, to which the Authority is subject when making recommendations. As the primary judge stated, in the context of the scope of policies within the purview of the Act, it has long been recognised that the Minister has the power to impose conditions as to the location of pharmacies: see Wood, Smoker v Pharmacy Restructuring Authority [1994] FCA 1487; (1994) 53 FCR 287, Walkerden and Jele Chemists. See also [43] of the PJ and the cases cited therein.
3. I am also not compelled by the appellants' contention that the condition-making power is somehow confined to "conditions in respect of the supply of pharmaceutical benefits from the pharmacist to the customer to ensure the efficient operation of the monetary scheme (the PBS)".
4. The appellants further submit that the conditions "apply whether or not an approved pharmacist claims an advance or payment for the supply", and that, in seeking to regulate the "private" supply of pharmaceutical benefits, those conditions undoubtedly exceed "even the outer limits" of the regulation-making power.
5. Those submissions are not accepted. I agree with the conclusions of the primary Judge at PJ [37] - [38], summarised above at [88] - [89]. Although the conditions only purport to regulate the conduct of approved pharmacists in relation to supplies of pharmaceutical benefits, the practical effect of those conditions extends to registered and approved pharmacists who wish to maintain their approval to supply pharmaceutical benefits and access the payments thereunder, irrespective of whether those payments are claimed.
6. The appellants' remaining contentions focus upon the apparent distinction between the "supply" and "dispensing" of pharmaceutical benefits under the Act, which in their submission, supports their ultimate contention that the impugned conditions exceed the condition-making power under the Act because they do not fall within the scope of the "supply" of pharmaceutical benefits to which the Act is directed.
7. The appellants submit that the meaning of the word "supply" is dependent upon its legislative context, relying upon Symes v Stewart [1920] HCA 73; (1920) 28 CLR 386 at 389, and that it must be construed consistently with the scope, purpose and objects of the Act: s 15AA of the Acts Interpretation Act.
8. As "supply" is not a statutorily defined term, the appellants submit that it properly means "the provision of pharmaceutical benefits ... to the customer", which is a step subsequent to dispensing. Further, the appellants contend that the phrase "supply pharmaceutical benefits" in s 90(1) of the Act means "transactions by which the prescribed pharmaceutical benefit ... is sold to the customer in a manner that attracts the subsidy payable under s 99".
9. To that end, the appellants rely upon Kong v Minister for Health (2014) 227 FCR 215; [2014] FCAFC 149 at [184] for the proposition that the Act is intended to achieve the "orderly supply of pharmaceutical benefits attracting the subsidy paid by the Commonwealth". They also point to Terry White Chemists Australia Fair v Secretary, Department of Health and Ageing (2009) 178 FCR 161; [2009] FCAFC 74 at [19] as follows:

The purpose of s 90(1) of the National Health Act is ascertainable from its context in Pt VII of the National Health Act. Approval of a pharmacist to dispense pharmaceutical benefits at particular premises is part of a scheme the object of which is to establish and regulate the provision of drugs and medicinal preparations to members of the public for whom they are prescribed, on a subsidised basis. ...

1. The appellants also refer to [22] of Terry White Chemists and [4] of Slopen Main v Hope Pty Ltd (2017) 256 FCR 156; [2017] FCAFC 203 to the same effect.
2. The appellants identify several instances of the word "supply" and its derived terms throughout the Act in support of their submission that this term "refers to the transaction by way of which an approved pharmacist makes available a PBS drug to an eligible customer enlivening the entitlement for the pharmacist to claim the subsidy". With respect to the meaning of "dispensing", by their oral submissions, the appellants contend that they are "the professional acts of a pharmacist in the pharmacy in discharging their professional responsibilities ... to prepare the drug ready for supply".
3. The appellants submit that the Act itself, by reference to ss 94(5) and 103(3), makes the distinction between "dispense" and "supply".
4. Section 94(5) of the Act reads:

(5) A hospital authority shall not be approved under this section in respect of a hospital unless the dispensing of drugs and medicinal preparations at that hospital is performed by or under the direct supervision of a medical practitioner or pharmacist.

1. Section 103(3) reads:

(3) An approved pharmacist, approved medical practitioner or approved hospital authority shall not permit a person other than a medical practitioner or pharmacist to dispense a pharmaceutical benefit except under the direct supervision of a medical practitioner or pharmacist.

Penalty: Imprisonment for 12 months or 20 penalty units, or both.

1. In the appellants' submission, "dispensing" is not associated with the PBS, because the PBS is "exclusively about supply and the making of claims in respect of that supply". Resultingly, dispensing cannot be considered "a reasonably or closely enough connected incident of supply". In the appellants' submission, regulations related to dispensing are therefore outside the scope of the Act which is concerned with the provision of approvals for pharmacists to supply pharmaceutical benefits at approved premises. On the appellants' argument, ss 10, 11, 13 and 14 are not sufficiently related to the approval being granted and instead focus on the minutiae of pharmacists' practice which are intended to be the subject of State regulations.
2. The appellants' submissions are not accepted.
3. First, the power to grant approvals as per s 90 of the Act, and the power to impose conditions as per s 92A(1)(f) and (1A) are "broad and unfettered", thus enabling the implementation of various policies.
4. Second, it is not clear how the appellants' submission that ss 94(5) and 103(3) support that the Act itself makes a distinction between "dispensing" and "supply" advances their case. That legislation uses different words for different processes is not by itself indicative that the processes are separate and unrelated. Although the Minister made submissions to the effect that the distinction between "supply" and "dispensing" was illusory and artificial, the more compelling submission, and the submission which I accept, is that the Act uses the term "dispense" (and various forms thereof) in such a way as to bind it up with "supply", including in ss 94(5) and 103(3) of Act. The mere fact that a "supply" is preceded by "dispensing" does not mean that these concepts are unconnected; rather, dispensing must be an essential component of, or related to, supply. There is nothing in the Act nor its scope, context or purpose to suggest that "dispense" (or some subset thereof) could not also be a part of supply or some aspects of "supply". As pointed to by the Minister, an example of the extent to which the Act enables the regulation of dispensing is found in s 103(3) of the Act, which obliges an approved pharmacist (amongst others) to ensure that a pharmaceutical benefit is dispensed by a pharmacist or medical practitioner, or under his or her direct supervision.
5. Third, even if "supply" can be defined narrowly such that it does not overlap with "dispensing" and "dispensing steps", this does not result in the success of the appellants. The Minister correctly contends that ss 92A(1)(f) and 92(1A) of the Act confer broad powers on the Minister to make any other condition, including but not limited to, a condition relating to premises and/or in relation to a medical practitioner supplying pharmaceutical benefits. There is no requirement that conditions be related to supply.
6. Fourth, I respectfully agree with the primary Judge's characterisation of the "dispensing steps" at [17] of the PJ, namely that they are "administrative steps associated with the supply of medication by a pharmacist". "Dispensing steps" are inextricably linked with the supply of drugs under the pharmaceutical benefits scheme. Further, some of the "dispensing steps" relate to express requirements under the Act, for example those contained in ss 89 and 89A.This approach is bolstered by authorities which, while not directed specifically to the definition of "dispense", but dealing with "approvals" pursuant to s 90 of the Act, interchange the terms "dispense" and "supply": see Kong at [34] - [37], Terry White Chemists at [19] and Yu v Minister for Health (2013) 216 FCR 168; [2013] FCA 261 at [3] and [18]. This proposition also finds some support in Kong at [147] - [150], which considered that the Act incorporated "the essential features of the scheme" established by the Pharmaceutical Benefits Act 1947 (Cth), which had equated "dispense" with "supply". Given that dispensing is part of supply, in my view there is no doubt that conditions may be made in relation thereto.
7. Fifth, were the appellants' submissions to be accepted, the Commonwealth would be unable to impose eligibility conditions in relation to "payment of a subsidy for the supply of pharmaceutical benefits on anything related to the manner and circumstances in which those benefits are dispensed", contrary to the clear intention of the Act.
8. At the hearing, the appellants relied upon the test in Allen Commercial Constructions Pty Ltd v North Sydney Municipal Council (1970) 123 CLR 490; [1970] HCA 42 at 499, regarding whether a condition made pursuant to a condition-making power is valid, to support their contention that the impugned conditions exceeded the condition-making power in the Act. In their post-hearing submissions, both parties agreed that the approach adopted in that case is not the approach applied by the High Court to determine whether a provision of a legislative instrument strays outside the scope of the legislative power which authorises its existence. Nonetheless, the appellants argue for its usefulness on the basis that the relevant power in these circumstances is a power to make conditions, not a power to make routine regulations. Thus, the appellants submit that the question of whether a condition made pursuant to a condition-making power is valid depends upon whether the condition is "reasonably capable of being regarded as related to the purpose for which the function of the authority is being exercised, as ascertained from a consideration of the scheme and of the Act under which it is made": Allen Commercial at 499.
9. Allen Commercial does not assist the appellants as it is distinguishable from the present circumstances, in that it does not concern the validity of a legislative instrument. As the Minister contends, and as has been referred to above, "[t]here is no principle of general application that is used by the High Court to determine whether a provision of a legislative instrument is within or beyond the scope of the power under which it is purportedly made", relying upon Footscray Corporation v Maize Products Pty Ltd (1943) 67 CLR 301; [1943] HCA 15 at 308. While Footscray concerned a by-law, as Australian Maritime Officers' Union v Assistant Minister for Immigration and Border Protection (2015) 230 FCR 523; [2015] FCAFC 45 at [56] and Kassam v Hazzard (2021) 102 NSWLR 520; [2021] NSWCA 299 at [147] - [151] make plain, Rich J's observations apply to any subordinate legislative instrument.
10. The appellants also rely upon Western Australian Planning Commission v Temwood Holdings Pty Ltd (2004) 221 CLR 30; [2004] HCA 63 at [57], wherein the plurality of the High Court endorsed the test in Newbury District Council v Secretary of State for the Environment [1981] AC 578, as follows:

The commission also does not dispute that a condition attached to a consent must reasonably and fairly relate to the development permitted. A condition attached to a grant of planning permission will not be valid therefore unless:

(1) The condition is for a planning purpose and not for any ulterior purpose. A planning purpose is one that implements a planning policy whose scope is ascertained by reference to the legislation that confers planning functions on the authority, not by reference to some preconceived general notion of what constitutes planning.

(2) The condition reasonably and fairly relates to the development permitted.

(3) The condition is not so unreasonable that no reasonable planning authority could have imposed it.

1. In oral submissions, the appellants also relied upon Mixnam's Properties v Chertsey Urban District Council [1965] AC 735 at 751 - 752 (per Lord Reid) to establish that these principles are of general application. The relevant extracts of Mixnam's Properties are as follows:

I think that the general effect of the authorities is properly stated in Maxwell on Interpretation of Statutes 11th ed., p. 79: "General words and phrases, therefore, however wide and comprehensive they may be in their literal sense, must, usually, be construed as being limited to the actual objects of the Act." Further, I think that there is force in the observation of Diplock L.J. in the present case: "If this presumption applies, as it does where Parliament is itself making changes in the law by the direct exercise of its own sovereign powers, it applies a fortiori to the construction of clauses by which Parliament delegates its sovereign powers to persons over whose exercise of the delegated powers Parliament itself retains no direct control."

In the present case there appears to me to be a fundamental difference between prescribing what must or must not be done on a site and restricting the site owner's ordinary freedom to contract with his licensees on matters which do not relate to the manner of use of the site. Conditions can make the site owner responsible for the proper use of the site and it is then for him to make such contracts with his licensees as the general law permits. I can find nothing in the Act of 1960 suggesting any intention to authorise local authorities to go beyond laying down conditions relating to the use of sites, and in my opinion the general words in section 5 cannot be read as entitling them to do so. I would therefore dismiss this appeal.

(Footnotes omitted.)

1. The appellants submit that "the power to set conditions is one which, at common law, and by reason of the nature of the character of the power itself, carries the boundaries articulated in these cases". They maintain that the "planning law context is one manifestation" of these principles, although that approach was rejected by the primary Judge. His Honour considered that the planning cases arose in a different context, namely that "powers to make regulations prescribing 'necessary or convenient' matters ... or matters 'necessary or expedient for the administration of this Act'" are confined to the specific context of the respective cases in which they arise, and thus saw little utility in authorities relevant to regulation-making: PJ at [47].
2. I respectfully agree with the primary judge that planning law decisions, such as Shanahan v Scott referred to at [95] and [113] above, are of little assistance. Contrary to the appellants' submissions, those cases do not contain "common law" statements of general application in relation to the power to impose a condition. They involve grants of power, which to adopt the words of the Minister, are "in very different terms".
3. Consequently, the appellants' appeal, as it relates to the grounds 1 and 2 of the Notice of Appeal, must fail.

1. The appellants submit that the PJ's finding at [35] "distinguishes between certain forms of supply 'from', permitting some but not others, whereas s 90(5AA) contains no words of limitation that would justify the reading down of supply 'from'". The appellants contend that s 90(5AA) of the Act enables an approved pharmacist to choose the manner in which they supply away from the approved premises.
2. The consequence of upholding the PJ's reasoning, in the appellants' submission, would be to render unlawful "longstanding services", such as pharmacy depots, remote collection and mail order.
3. In the appellants' submission, "supply 'from' an approved premises necessarily entails a supply 'at' an unapproved premises". They argue that s 9(1) (read by reference to s 4(3) of the Act to which the note under s 9 refers) is invalid because it contradicts, in words and effect, s 90(5AA) of the Act. The appellants deploy the same argument with respect to s 15 and to s 10 when read with the definition of "dispensing steps" in s 5.
4. In reliance upon ss 90(2) and 90(5AA) of the Act, the appellants argue that the requirement for an approved pharmacist to hold an approval for each separate premises where they supply pharmaceutical benefits necessarily incorporates both "at" and "from" in regard to "supply".
5. The appellants submit that the PJ erred in his Honour's application of s 4(3) of the Act, which when read to give it its "full effect and strict effect" means that whenever a person is at a premises and a supply is made, there must be an approval. On that basis, the appellants argue that s 4(3) was given, by the PJ, an effect contrary to s 90(5AA), that is, that it must be read down to avoid the practical consequence that any "premises", whether pharmacy or not, requires an approval. They also point to the removal of the concept of "premises at which the pharmacist carries on [sic] is about to carry on business as a pharmacist" from the Act by the Amendment Act. The appellants contend that this removed the "logical distinction" between premises and premises which were of the character of a pharmacy, such that the provisions now extend to all premises irrespective of their character. The appellants also submit that, if s 4(3) is given too much work to do, it would effectively remove from a practical standpoint any circumstances where there is a "supply from" in situations where any "premises" of any kind are involved.
6. Therefore, to the extent that s 4(3) of the Act is a definitional provision, the appellants contend that it cannot be interpreted in such a way as to "cut away the rights" granted by s 90(5AA).
7. As to the Minister's contention, which describes the appellants' submission as reading '"from" to include "ultimately from" or "indirectly from'", the appellants contend that the "ordinary meaning of supply 'from' is apt to encapsulate supplies made directly or indirectly from the approved premises". Thus, the appellants submit, the Minister "mischaracterises" their submissions as "seeking to read words into s 90(5AA).
8. The appellants' submissions are not accepted.
9. First, a construction of supply "from" which necessarily involves a supply "at" other (unapproved) premises makes s 90(5AA) inconsistent with s 90(2) in that s 90(5AA) contemplates that an approval to supply at particular premises includes an approval to supply from particular premises, and s 90(2) requires a pharmacist to hold a separate approval for each premises at which they supply pharmaceutical benefits. On that basis, and as the Minister submits, it "would create an inconsistency between the permission in s 90(5AA) to make supplies 'from' approved premises and the requirement in s 90(2) for a pharmacist to hold a separate approval for each premises 'at' which they supply pharmaceutical benefits". By such an approach the Court is adopting a construction which reads s 90(5AA) "consistently and harmoniously" with s 90(1), (2) and (3) of the Act.
10. Second, and contrary to the appellants' submissions, there is no requirement in the legislation that supply be made at unapproved premises. The definition in s 4(3) of the Act relevantly reads as follows:

4 Interpretation

...

(3) A reference in this Act to the supply of pharmaceutical benefits at premises is a reference to the supply of pharmaceutical benefits to people who are at the premises when the supply is made.

1. While "supply from" is not defined under the Act, the explanatory memorandum to the National Health Amendment (Pharmaceutical Benefits) Bill 2007 (Cth) states in relation to the introduction of s 90(5AA) into the Act in its form at that time:

Item 8 - After subsection 90(5)

This item inserts a new subsection 90(5AA) to provide that pharmacists who are approved under section 90 of the Act to supply pharmaceutical benefits "at" particular premises may also supply pharmaceutical benefits "from" those premises.

The term "from" in this context is intended to convey that supply of pharmaceutical benefits is made from the particular premises to a person or persons who are located away from the premises, for example, to a resident of an aged care facility, a person in their home, or by a mail order facility. While many approved pharmacists currently (and will continue to) supply pharmaceutical benefits "from" approved premises, this amendment makes clear that the supply of pharmaceutical benefits from approved premises is not mandatory.

1. Accordingly, there is no inconsistency.
2. Third, as to the appellants' contentions with respect to s 9 of Item 18 of Sch 1 to the Instrument, and that s 90(2) and s 90(5AA) of the Act are inconsistent, this is at odds with the balance of s 90 and the extrinsic material relevant to s 90(5AA).
3. Fourth, in any case, and as the Minister submits, even if the appellants' premise were accepted, it does not necessarily result in the invalidity of s 9 of Item 18 of Sch 1 to the Instrument. As the Minister accepts, if that were the approach, it would be unlawful for the Minister to impose conditions which entirely prohibit supply "from" approved premises, but the Minister could nonetheless impose a condition which simply limits the circumstances in which supply "from" approved premises can be made. Conditions which impose "restrictions" can, on the Minister's case, be valid. Consequently, the Minister also submits that the authorities which concern "power to 'regulate' by subordinate legislation are to the same effect". It necessarily involves the continuation of an activity, subject to its regulation: Brunswick Corporation v Stewart (1941) 65 CLR 88; [1941] HCA 7 at 95, Melbourne Corporation v Barry (1922) 31 CLR 174; [1922] HCA 56 at 188 - 189, Goldberg v Law Institute of Victoria [1972] VicRp 69; [1972] VR 605 at 607 and Slattery v Naylor (1888) 13 App Cas 446 (PC).
4. Fifth, with respect to ss 10 and 15 of Item 18 of Sch 1 to the Instrument, the appellants' argument is weaker still. In relation to s 10, the Minister correctly submits that the imposition of administrative steps in lawfully dispensing medication, which steps are to be undertaken at approved premises and by a registered pharmacist, does not interfere with the pharmaceutical benefit being supplied from the approved premises to elsewhere. Section 15 simply focuses on prohibiting entering into ongoing arrangements for the supply of pharmaceutical benefits to patients at other pharmacies, irrespective of the manner in which those supplies are undertaken.
5. Ultimately, in order to lawfully dispense medication, s 10 of Item 18 of Sch 1 to the Instrument requires:

(a) The administrative steps be performed at approved premises;

(b) The administrative steps be undertaken by a registered pharmacist who is physically present at those approved premises; and

(c) The pharmaceutical benefit, the subject of the administrative steps, be present at the approved premises during the administrative steps.

1. As the Minister submits, there is no inconsistency between ss 9, 10 and 15 of Item 18 of Sch 1 to the Instrument and s 90(5AA) of the Act.
2. Therefore, the appellants' appeal, as it relates to grounds 3 and 4 of the Notice of Appeal, must fail.

1. The appeal is dismissed. Costs should follow the event.

I certify that the preceding ninety-five (95) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Meagher.