Pharmacy Restructuring Authority & Anor v Martin & Ors - [1996] FCA 1007 - FCA 1996 case summary — Zoe

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Pharmacy Restructuring Authority & Anor v Martin & Ors

[1996] FCA 1007

Federal Court of Australia|1996-11-20|Before: Branson J

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Source facts

Court

Federal Court of Australia

Decision date

1996-11-20

Before

Branson J

Source

Original judgment source is linked above.

Judgment (31 paragraphs)

[1]

The decision of the first respondent whereby the first respondent made a recommendation to the second respondent that the third respondents be granted approval to supply pharmaceutical benefits from premises located at the Kareela Shopping Centre, Kareela in the State of New South Wales ("the Kareela premises") is set aside.
The decision of the second respondent whereby approval was granted to the third respondents to supply pharmaceutical benefits from the Kareela premises is set aside.
The application of the third respondents for approval to supply pharmaceutical benefits from the Kareela premises is referred to the first and second respondents respectively for further consideration according to law. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

[2]

IN THE FEDERAL COURT OF AUSTRALIA) NEW SOUTH WALES DISTRICT REGISTRY) No. NG 806 of 1995 GENERAL DIVISION ) BETWEEN: THE PHARMACY GUILD OF AUSTRALIA First Applicant BRIAN JOHN DALY Second Applicant DAVID HICKEY and ANNEMARIE HICKEY Third Applicants DOUGLAS PARDEY Fourth Applicant EDMUND SMITH and ELSIE SMITH Fifth Applicants MICHELE FREER Sixth Applicant DAVID PAY Seventh Applicant DAVID HAWORTH Eighth Applicant VIREN KHEITA Ninth Applicant DAVID WILSON Tenth Applicant JOHN KALAF Eleventh Applicant AND: AUSTRALIAN COMMUNITY PHARMACY AUTHORITY First Respondent THE SECRETARY FOR THE DEPARTMENT OF HUMAN SERVICES AND HEALTH Second Respondent DANIEL ARMSTRONG, GRAHAM DONALD LEVIS and DENIS LEE Third Respondents CORAM: BRANSON J PLACE: SYDNEY DATE: 20 NOVEMBER 1996

[6]

Part VII of the Act is concerned with pharmaceutical benefits. "Pharmaceutical benefit", within the meaning of Part VII of the Act, "means a drug or medicinal preparation in relation to which, by virtue of s85, this Part applies". Section 85 of the Act provides, in effect, that Part VII of the Act applies to drugs and medicinal preparations declared by the Minister to be drugs and medicinal preparations to which the Part applies. Section 90(1) of the Act enables the second respondent ("the Secretary"), upon application by a pharmacist, to approve that pharmacist for the purpose of supplying pharmaceutical benefits from a particular premises. The Secretary is required to refer an application under s90 of the Act to the first respondent ("the Authority") (s90(3A)). An approval under s90 may be granted only if the Authority has recommended the grant of the approval, but the Secretary may refuse to grant an approval even if the grant has been recommended by the Authority (s90(3B)). The Authority is established by s99J of the Act. One of its functions is to consider applications under s90 of the Act and to make a recommendation to the Secretary whether or not the applicant should be approved under that section in respect of particular premises (s99K(1)). Section 99L(1) of the Act provides, so far as is here relevant, as follows: "99L(1) The Minister must, by writing: (a) determine the rules subject to which the Authority is to make recommendations under subsection 99K(1); ..." Section 99N(1) of the Act provides that the Authority consists of the following part-time members: "99N(1) (a) a Chairperson; (b) 2 pharmacists who are to be chosen from 4 pharmacists nominated by the Pharmacy Guild of Australia; (c) one pharmacist who is to be chosen from 2 pharmacists nominated by the Pharmaceutical Society of Australia; (d) an officer of the Department." On 2 May 1995, the Minister for Human Services and Health made a determination pursuant to s99L(1) of the Act ("the determination"). The determination was published in the Commonwealth of Australia Gazette on 10 May 1995 and came into operation on that day. Paragraphs 3 and 4 of the determination are in the following terms: "3. For the purposes of paragraph 99K(1)(b) of the Act, the rules with which the Authority must comply in making a recommendation on an application by a pharmacist for approval under section 90 of the Act in respect of particular premises are set out in paragraphs 4 to 9. 4. Approval of a pharmacist under section 90 of the Act in respect of particular premises must not be recommended except as provided for in paragraphs 5 to 8." For the purposes of this case, the relevant rules made by the determination ("the rules") are those set out in par4 (set out above) and par6(c). So far as is here relevant, par6(c) is in the following terms: "6. ... approval of a pharmacist under section 90 of the Act in respect of particular premises must be recommended if the pharmacist is already approved under section 90 of the Act in respect of other premises from which the pharmacist proposes to cease supplying pharmaceutical benefits immediately before the granting of the approval, if: ... (c) the premises in respect of which approval is sought are not less than 2 kilometres, measured door to door by the shortest lawful access route, from the nearest other premises in respect of which a pharmacist is approved under section 90 of the Act ..."

[11]

Until 1990 there was a pharmacy at the Kareela premises which operated under the business name "Soul Pattinson". In that year the proprietors of this pharmacy accepted a closure package from the Commonwealth, presumably as part of the implementation of the restructure package for approved pharmacists. Thereafter until about September 1994 the Kareela premises were the site of a hardware store. In about September 1994 the hardware store operated from the Kareela premises closed and the Kareela premises became vacant. The third respondents, through Graham Donald Levis ("Mr Levis"), expressed interest to the manager of the Kareela Shopping Centre in leasing the Kareela premises for the purposes of operating a pharmacy. Their interest was, however, expressed to be subject to negotiations then current between the Minister and the Guild concerning which it was speculated that a distance between one and two kilometres between an existing pharmacy might be agreed to be sufficient to permit the transfer of an approval under s90 of the Act. In about March 1995 the third respondents learned that the business of a pharmacy operating from premises in Penrith, New South Wales ("the Tait pharmacy") was for sale. They determined to purchase the Tait pharmacy for the purpose of obtaining the benefit of the approval granted under the Act in respect of that pharmacy with the intention of applying to relocate the approval in respect of the pharmacy to the Kareela premises. As is mentioned above, an agreement was entered into on 24 April 1995 between the Minister and the Guild. It included the undertaking of the Minister to include in the rules the requirement that for the relocation of an approved pharmacy, the premises in respect of which approval is sought must not be less than 2 kilometres, measured door to door by the shortest lawful access route, from the nearest other premises in respect of which a pharmacist is approved under s90 of the Act. Mr Levis apparently formed the view that under the rules as envisaged by the agreement, the third respondents would obtain approval under s90 of the Act for the purpose of supplying pharmaceutical benefits from the Kareela premises. Some time in April 1995, Mr Levis instructed Roger Stephen Boxall ("Mr Boxall"), registered surveyor of Roger Boxall & Associates Pty Limited, to survey the shortest distance between the pharmacy operated by Brian John Daly ("Mr Daly"), the second applicant, at Oyster Bay ("the Oyster Bay pharmacy") and the Kareela premises. Each of Mr Levis and Mr Boxall gave evidence that Mr Boxall was not instructed as to the precise route which he should survey. I accept this evidence. Each of Mr Levis and Mr Boxall conceded, however, that Mr Boxall was aware of the purpose for which Mr Levis required the survey. They discussed a requirement that the distance between the Oyster Bay pharmacy and the Kareela premises be not less than two kilometres for the relocation proposed by the third respondents to go ahead. They conceded that there were telephone discussions between them as to the result of the survey prior to the preparation by Mr Boxall of his report. Mr Boxall's report was given by two separate letters each bearing the date 28 April 1995. One has the reference 5847/A and the other 5847/B. It is appropriate to set the two letters out in full. "Graham Levis, 28 April, 1995. 44 Tivoli Esplanade, COMO. N.S.W. 2226. Our Ref: 5847/A (RB:djs) Dear Sir, RE: PROPOSED PHARMACY AT KAREELA SHOPPING CENTRE AT BATES DRIVE AND FREYA STREET, KAREELA As instructed, we have made a survey and measured the distance door to door between the existing Pharmacy at the north west corner of Oyster Bay Road and Como Road at Oyster Bay and an unoccupied shop at the Kareela Shopping Centre at the corner of Bates Drive and Freya Street at Kareela, such shop having previously been occupied as a Hardware Store, and have the following to report. The distances measured are on the surface as travelled from front door to front door and the method used to obtain such distances was by a measuring wheel. The measuring wheel has been calibrated and found to be accurate to within 1 centimetre in 100 metres. As the only route available to the Public passes along a section of Bates Drive which has no facilities for Pedestrian Access, the measurements were taken along the route as travelled by a motor vehicle and the following results were obtained. Travelling from the front door of the aforesaid Pharmacy at Oyster Bay by vehicle in a generally southerly direction to the front door of the aforesaid vacant shop at the Kareela Shopping Centre via Oyster Bay Road, Georges River Road, Carvers Road, Bates Drive and Freya Street (Route A), the distance was found to be two thousand and fifty eight (2,058) metres. By travelling the same route in the opposite direction (Route B), the distance was found to be two thousand one hundred and thirty (2,130) metres. I have also prepared a sketch Ref. No. 5847/1 indicating the routes and the distances travelled for your assistance. Yours faithfully, ROGER BOXALL. M.I.S. AUST. (signed) Registered Surveyor." "Graham Levis, 28 April, 1995. 4 Tivoli Esplanade, COMO. N.S.W. 2226. Our Ref: 5847/B (RB:djs) Dear Sir, RE: PROPOSED PHARMACY AT KAREELA SHOPPING CENTRE AT BATES DRIVE AND FREYA STREET, KAREELA As instructed, we have made a survey and measured the distance door to door between the existing Pharmacy at the north west corner of Oyster Bay Road and Como Road at Oyster Bay and an unoccupied shop at the Kareela Shopping Centre at the corner of Bates Drive and Freya Street at Kareela, such shop having previously been occupied as a Hardware Store, and have the following report. The distances measured are on the surface as travelled from front door to front door and the method used to obtain such distances was by a measuring wheel. The measuring wheel has been calibrated and found to be accurate to within 1 centimetre in 100 metres.

[12]

As the only route available to the Public passes along a section of Bates Drive which has no facilities for Pedestrian Access, the measurements were taken along the route as travelled by a motor vehicle and the following results were obtained. Travelling from the front door of the aforesaid Pharmacy at Oyster Bay by vehicle in a generally southerly direction to the front door of the aforesaid vacant shop at the Kareela Shopping Centre via Oyster Bay Road, Georges River Road, Carvers Road, Bates Drive and Freya Street (Route A), the distance was found to be two thousand and fifty eight (2,058) metres. By travelling the same route in the opposite direction (Route B), the distance was found to be two thousand one hundred and thirty (2,130) metres. Further measurements were taken between the same two points as travelled on foot from Oyster Bay via the above route to Kareela (Route C) and the result of this measurement gave a distance door to door of one thousand nine hundred and eighty two (1,982) metres. As well as the above, a route was measured between the same two points from Oyster Bay to Kareela on foot via Sage Avenue, Short Street, Loves Avenue, Bates Drive and Freya Street (Route D) and the distance measured in this manner was found to be one thousand nine hundred and fifty three (1,953) metres. I have also prepared a sketch Ref. No. 5847/2 indicating the routes and the distances travelled for your assistance. Yours faithfully, ROGER BOXALL. M.I.S. AUST. Registered Surveyor." Each of Mr Levis and Mr Boxall denied that Mr Levis instructed Mr Boxall to provide a report that only referred to distances that were greater than two kilometres. I accept the literal truth of their evidence in this respect. I am satisfied, however, that Mr Levis made it clear to Mr Boxall that he was seeking a survey report to submit in support of the third respondents' application for relocation approval which showed the relevant distance as being in excess of 2 kilometres. I am further satisfied that it was for this reason that the report was submitted in two parts. On 6 May 1995 the third respondents - (a) sought approval under s90 of the Act in respect of the Tait pharmacy; (b) sought cancellation under s98 of the Act of their "approval" under s90 of the Act in respect of the Tait pharmacy; and (c) sought approval under s90 of the Act in respect of the Kareela premises, annexing to the application for approval Mr Boxall's letter 5847/A and the sketch referred to therein, but not the letter 5847/B or the sketch referred to therein. By letter dated 10 May 1995 David Charles Pay ("Mr Pay"), the seventh applicant, advised the Secretary of the Authority of speculation in Mr Pay's area that approval had been sought to open a pharmacy in the Kareela Shopping Centre. Amongst other things, the letter asserts that "[w]ithin a radius of 2 kilometres [of the Kareela Shopping Centre] there are at least 19 pharmacies operating". The third respondents' application in respect of the Kareela premises was considered at the first meeting of the Authority held on 9 June 1995. At that time, the Authority had no established procedure to consult pharmacists in the area to which a relocation was proposed. The Authority had before it, at the time that it considered the third respondents' application in respect of the Kareela premises, the third respondents' applications concerning the proposed relocation and the letter from Mr Pay dated 10 May 1995. At the meeting of 9 June 1995, the Authority determined to recommend approval of the respondents' application for relocation subject to clarification of the issue of distance. On 13 June 1995, Mr Levis spoke to Mr Candy by telephone. Mr Candy advised him that the Authority had recommended the relocation to the Kareela premises, subject to clarification that the pharmacy which was the subject of his survey (i.e. the Oyster Bay pharmacy) was the closest pharmacy to the Kareela premises. On 14 June 1995 Mr Levis sent to Mr Candy a letter by facsimile transmission. The letter includes the following paragraphs: "Further to our telephone conversation of Tuesday 13 June, I forward map of surrounds of proposed Kareela pharmacy (relocation application NA24). I have marked the portion of the proposed pharmacy and confirm that the previously submitted survey between the site (marked 'A') and the pharmacy at Oyster Bay (marked [illegible]) represents the closest pharmacy to the proposed pharmacy. The shortest distance to any pharmacy at Jannali (marked '3', '4' and '5') is 2.6 kilometres and it should be noted Box Rd is not an access route between Kareela and Jannali as the road terminates at a river without a bridge." ifth res

[16]

There was considerable debate before me as to the proper construction of the words appearing in par6(c) of the determination, namely "the shortest lawful access route, from the nearest other premises in respect of which a pharmacist is approved ...". I have not found it necessary to adjudicate upon much of that debate. Important issues are involved which, in my view, should await determination in a case which calls for their determination. I accept the submission made on behalf of the applicants and the first and second respondents that, having regard to the evolutionary history of the rules, the word "from" in subpar6(c) of the determination connotes direction. That is, that it identifies the relevant route as being one allowing for travel from the nearest other relevant premises to the premises in respect of which the approval is sought (see Pharmacy Restructuring Authority & Anor v Martin & Ors (1994) 53 FCR 589 at 596). Once it is accepted that the relevant route is one which allows for travel in a particular direction, it becomes plain that the fact that part of that route involves the use of a one-way street allowing travel in that direction has no particular relevance. The length of the return journey is immaterial. This case was conducted on the basis that a route upon which one could lawfully travel by car was necessarily a "lawful access route" within the meaning of par6(c) of the determination. I agree that this is so. An unchallenged survey report received into evidence, subject only to objection as to relevance, indicates that a route upon which one can lawfully drive from the Oyster Bay pharmacy to the Kareela premises has been measured at 1,888 metres. It is accepted that the same route was available to be driven in June and July 1995. In the circumstances it is not necessary for me to determine whether a route which requires a pedestrian to walk on a roadway, or up steep steps, or across unformed surfaces is an "access route" within the meaning of par6(c) of the determination.

[17]

Section 5 of the Administrative Decisions (Judicial Review) Act 1977 ("the ADJR Act") empowers "a person who is aggrieved" by a decision to which the ADJR Act applies to apply to the Court for an order of review in respect of the decision. Section 3(4) of the ADJR Act provides, so far as is here relevant, as follows: "3. (4) In this Act - (a) a reference to a person aggrieved by a decision includes a reference - (i) to a person whose interests are adversely affected by the decision; or (ii)in the case of a decision by way of the making of a report or a recommendation - to a person whose interests would be adversely affected if a decision were, or were not, made in accordance with the report or recommendation." The following passage from the reasons for judgment of Ellicott J in Tooheys Ltd v Minister for Business and Consumer Affairs (1981) 54 FLR 421 at 437-438 has been frequently cited with approval: "The words 'a person who is aggrieved' should not in my view be given a narrow construction. They should not, therefore, be confined to persons who can establish that they have a legal interest at stake in the making of the decision. It is unnecessary and undesirable to discuss the full import of the phrase. I am satisfied from the broad nature of the directions which are subject to review and from the fact that the procedures are clearly intended in part to be a substitution for the more complex prerogative writ procedures that a narrow meaning was not intended. This does not mean that any member of the public can seek an order of review. I am satisfied, however, that it at least covers a person who can show a grievance which will be suffered as a result of the decision complained of beyond that which he or she has as an ordinary member of the public. In many cases that grievance will be shown because the decision directly affects his or her existing or future legal rights. In some cases, however, the effect may be less direct. It may affect him or her in the conduct of a business or may, as I think is the case here, affect his or her rights against third parties ..." As Lockhart J pointed out in Right to Life Association (NSW) Inc. v Secretary, Department of Human Services and Health & Anor (1995) 128 ALR 238 at 251-252: "The meaning of 'a person aggrieved' is not encased in any technical rules; much depends upon the nature of the particular decision and the extent to which the interest of the applicant rises above that of an ordinary member of the public ... The term a 'person aggrieved' is not a restrictive one; it is of very wide import." The statutory provisions with which this case is concerned are (putting aside certain amendments which do not go to the broad purpose of the provisions) the same as those considered by the Full Court of this Court in Pharmacy Restructuring Authority v Martin. In that case at 597 the Court stated: "The relevant provisions are not concerned with minimizing competition in the pharmaceutical industry but with reducing the Commonwealth's financial burden in providing pharmaceutical benefits while maintaining an acceptable level of community service." The means by which the above objective was to be achieved is revealed by clause 3 of the agreement. Such means involve the maintenance of the benefits of restructuring in the pharmaceutical industry and the enhancement of the development of "an effective, efficient and well-distributed community pharmacy service in Australia". It seems to me that the second to fifth applicants have, by reason of par6(c) of the determination, an interest which rises above that of an ordinary member of the public in the development and maintenance of "an effective, efficient and well distributed community pharmacy service" in that small portion of Australia in the near vicinity of the Kareela premises. Their interest is, in my view, an interest which is relevant to the process which the Act establishes and to the decision here challenged, and it is not in conflict with the interests which the Act promotes (see Alphapharm Pty Limited v SmithKline Beecham (Australia) Pty Limited & Ors (1994) 49 FCR 250 per Davies J at 261). I note that this conclusion is consistent with that reached by Whitlam J in Loveridge v Pharmacy Restructuring Authority (1995) 39 ALD 103. It is also consistent with the decision of Davies J in Martin & Anor v Pharmacy Restructuring Authority & Ors (1994) 34 ALD 534 at 536. This aspect of his Honour's decision was not commented upon on appeal (see Pharmacy Restructuring Authority v Martin). The decision of Lindgren J in Big Country Developments Pty Limited v Australian Community Pharmacy Authority & Ors (1995) 60 FCR 85, with which, with respect, I am in complete agreement, deals with quite different circumstances from those which arise in this case and, for that reason, is distinguishable. My conclusion that the second to fifth applicants have standing to bring these proceedings makes it unnecessary for me to determine whether the other applicants also have standing. A determination of whether the role of the first applicant as a negotiating party on behalf of the pharmaceutical industry with the Minister, its consequential interest in monitoring the implementation of the restructuring scheme, and its broad object to further and protect the interests of its members, are sufficient to give it standing, should await a case in which such determination is necessary. As to the sixth to eleventh applicants, their respective interests are, I consider, likely too remote to give them standing in these proceedings. GROUND 1 - DENIAL OF NATURAL JUSTICE

[18]

It was contended on behalf of the applicants that the procedure adopted by the Authority involved a denial of natural justice to Mr Pay, whose letter of 10 May 1994 was before the Authority, and to the second to fifth applicants, or alternatively to the second to eleventh applicants. It seems to me that the approach of the Full Court in Pharmacy Restructuring Authority v Martin to the issue of procedural fairness makes it impossible for me to accept this contention. In Pharmacy Restructuring Authority v Martin the Full Court determined that since the guidelines (now the rules) give the Authority no discretion, no purpose would have been served by the Authority giving a hearing to the respondents. Here it is suggested that had the respondents been given a hearing, particularly once the Authority sought clarification of the distance issue, further evidence would have been placed before the Authority on that issue. In every case of this kind, the provision of a hearing to other pharmacists carrying on business in the relevant area may provide additional evidence of distance. It might well have done so in the case of Pharmacy Restructuring Authority v Martin. Yet the Full Court did not accept that there had been any denial of procedural fairness in that case. Since the decision of the Full Court in Pharmacy Restructuring Authority v Martin, the agreement has been executed. As is mentioned above, clause 6.5 of the agreement records an agreement between the Guild and the Minister that the Authority "be entitled to seek and note information from people likely to be directly affected by a recommendation, taking into account the secrecy provision of the Act and the Privacy Guidelines". This agreement as to the entitlement of the Authority to note information from sources other than the applicant does not, in my view, give rise to an obligation in the Authority to give a hearing to any person. Nor, in my view, does the fact that the Authority circulated a newsletter on or about 14 July 1995, which indicated that in respect of applications for relocation the Authority would write, without identifying the applicant, to all other pharmacists in the area of the application identifying the proposed site of the relocation. The Authority had determined on 9 June 1995 to recommend approval of the third respondents' application subject to clarification of the issue of distance. It appears that the process of clarification undertaken by Mr Candy was completed before 14 July 1995. The newsletter cannot, in my view, have given rise to any legitimate expectation of consultation in respect of consideration by the Authority of the third respondents' application. I do not consider that the circumstances of this case can be satisfactorily distinguished from those considered by the Full Court in Pharmacy Restructuring Authority v Martin so far as the issue of procedural fairness is concerned. So far as the Secretary is concerned, if procedural fairness did not require the Authority to give a hearing to any party other than the third respondents on the issue of distance, it necessarily follows, in my view, that no such duty fell upon the Secretary. GROUND 2 - PROCEDURES REQUIRED BY LAW WERE NOT OBSERVED

[19]

It was contended on behalf of the applicants that the Authority's jurisdiction to make the recommendation that it did, and the Secretary's jurisdiction to give the approval which he or she did, was dependent upon the fact of the Kareela premises being not less than 2 kilometres, measured door to door, by the shortest lawful access route, from the nearest other premises in respect of which a pharmacist was approved under s90 of the Act. As is discussed above, I am satisfied that the evidence establishes that in fact the Kareela premises are less than 2 kilometres by the appropriate measurement from the Oyster Bay pharmacy. Such evidence is necessarily relevant to the consideration of this ground of objection. On behalf of the applicants, reliance was placed on the following passage from the reasons of Black CJ in Australian Heritage Commission v Mount Isa Mines Ltd (1995) 133 ALR 353 at 361: "Subject to constitutional limitations ... an Act may commit to an administrative body the power to investigate and conclusively to determine the existence of certain facts upon which the exercise of a power to proceed further, such as a power to enter a place in the Register of the National Estate, may depend. In such circumstances, the capacity of a court to review a decision by an administrative body that the facts do exist will be limited, in accordance with the ordinary principles of judicial review, and there will be no question of the court making its own decision as to the true facts. On the other hand, the legislature may make the power to do such an act contingent upon the actual existence of a state of facts; see, for example, the discussion by Dixon J in Parisienne Basket Shoes Pty Ltd v Whyte (1938) 59 CLR 369 at 391. Where the legislature has made the exercise of a power contingent upon the actual existence of a state of facts the existence or non-existence of those facts may be determined by a court having jurisdiction to review the decision. Although in some cases it may be very difficult to decide upon which side of the line a particular provision falls, the question is one of construction ..." In this case the Act requires the Authority to consider an application under s90 and to make a recommendation whether or not the application should be approved under that section in respect of particular premises. The jurisdiction to consider an application and to make a recommendation in respect of it is not by the Act made subject to the existence of any fact other than the existence of the application. Section 99L of the Act requires the Minister to determine the rules subject to which the Authority is to make recommendations with respect to applications under s90 of the Act. Section 99L is not to be construed, in my view, as authorizing the determination of rules which detract from the jurisdiction of the Authority under s99K of the Act. Nor does the determination, in my view, disclose any intention to detract from such jurisdiction. There is, in my view, a real difficulty in seeking to construe the determination as making the power of the Authority to make a favourable recommendation contingent upon the actual existence of a state of fact, as opposed to its own determination of that state of fact. The recommendation of the Authority is necessary before the Secretary can approve an application under s90 of the Act. The Authority is established with a membership calculated to lead to substantial industry input into its decision making processes. The rules bind the Authority but have no direct relevance to the discretion of the Secretary under s90(1) of the Act. If the power of the Authority to recommend an approval under s90 of the Act is contingent upon the actual existence of the prescribed distance, measured by the prescribed route, between the two relevant sites, the Secretary would be unable to act on the recommendation of the Authority until he or she had satisfied himself or herself of the actual existence of that prescribed distance, a task by the rules given to the Authority with its industry representation. In strict theory, the validity of the recommendation would remain an outstanding question until a court or tribunal possessing power to determine the question decided that the prescribed distance did in fact exist (Parisienne Basket Shoes Pty Ltd v White per Dixon J at 391). Plainly, in my view, neither the Act nor the determination discloses an intention that the Secretary should review the work of the Authority in this way. It is true that the rules draw a distinction between matters of fact and matters in respect of which the Authority is to be "satisfied". In my view, this distinction does not reflect an intention that the Authority's power to act is contingent upon the actual existence of those matters of fact. Rather, the distinction between matters of fact and matters in respect of which the Authority is required to be satisfied reflects a distinction between matters capable of objective determination and those which involve an exercise of judgment (e.g. "a definite community need"; "suitable commercial premises"; "exceptional circumstances"). The contention that the Authority and the Secretary, who respectively purported to make the recommendation and the decision the subject of these proceedings, did not have the jurisdiction to make them must be rejected. GROUND 4 - ERROR OF LAW

[23]

Section 5(2) of the ADJR Act provides that it is an improper exercise of power within the meaning of s5(1) of the Act for a decision maker to take into account irrelevant considerations or to fail to take into account relevant considerations in the exercise of a power. The principal issue to be determined by the Authority for the purpose of determining whether to recommend the grant of the approval sought was whether "the premises in respect of which the approval [was] sought are situated not less than 2 kilometres, measured door to door by the shortest lawful access route, from the nearest other premises in respect of which a pharmacist is approved under s90 of the Act". The material before the Authority at its meeting on 9 June 1995 was constituted by the third respondents' application for approval in respect of the Kareela premises, their request for cancellation of approval in respect of the Tait pharmacy on the basis of relocation to the Kareela premises, the letter 5847/A from Mr Boxall and the sketch therein referred to and Mr Pay's letter of 10 May 1995. None of this material contained any assertion that the Oyster Bay pharmacy was the "nearest other premises in respect of which a pharmacist is approved under s90 of the Act" to the Kareela premises. Nor did any of the material disclose any awareness of the precise issue required by the rules to be examined by the Authority. No reference is made in the material to the words "shortest lawful access route" or to a measurement "from the nearest other premises in respect of which a pharmacist is approved under s90 of the Act". The sketch referred to in the letter 5847/A shows Loves Avenue as one way in the direction from the Oyster Bay pharmacy to the Kareela premises, yet the letter itself makes no reference to a route along Loves Avenue. The only route for which measurements are given in the letter 5847/A is a route on which a motor vehicle could travel both from the Oyster Bay pharmacy and to the Oyster Bay pharmacy. A careful examination of the letter 5847/A and the sketch referred to therein ought, in my view, to have alerted a person familiar with the rules to the possibility that a relevant route had been ignored by Mr Boxall on the basis that it was not open for travel between the two relevant pharmacies although open for travel from the Oyster Bay pharmacy. The Authority sought, in the words of Mr Candy, "clarification of the issue of distance". The case was contested on the basis that the Authority delegated to Mr Candy the task of obtaining such clarification. The affidavit evidence of Mr Levis, which was not challenged on behalf of the first and second respondents, was that on or about 13 June 1995 he telephoned Mr Candy and in response to a question as to the results of the first meeting of the Authority regarding the third respondents' application, Mr Candy said: "The relocation has been recommended by the Authority, subject to clarification that the pharmacy which is the subject of your survey is the closest pharmacy to the one now proposed at Kareela."

[24]

The additional material provided to Mr Candy by Mr Levis was calculated to address the issue raised by Mr Candy (i.e. the identification of the "closest pharmacy") and not the issue which the Authority was required by the determination to consider. The notion of "closeness" lacks the precision required by subpara6(c) of the determination. There is no evidence before me that any attempt was made by the Authority or Mr Candy to obtain material directly relevant to the determination of the issue before the Authority. In my view, in placing weight, as it apparently did, on material provided to it calculated to demonstrate that the Oyster Bay pharmacy was the closest relevant pharmacy to the Kareela premises, the Authority took into account an irrelevant consideration. The issue before it was not whether the Oyster Bay pharmacy was the closest relevant pharmacy to the Kareela premises but whether the distance from the nearest other relevant premises measured door to door by the shortest lawful access route to the Kareela premises was less than 2 kilometres. It is to be assumed on the evidence before the Court that the recommendation of the Authority, which was initially conditional, was communicated to the Secretary in an unconditional form, without the Authority or Mr Candy ever having before it or him any evidence or material as to whether the route surveyed by Mr Boxall referred to in his letter 5847/A was the shortest lawful access route travelling from the Oyster Bay pharmacy to the Kareela premises. In relying on evidence as to which pharmacy in the vicinity of the Kareela premises was the closest, or the "most adjacent" to the Kareela premises, the Authority, or its delegate, Mr Candy, as the case may be, took into account, in my view, irrelevant considerations. Although I note that ground 5 of the application was not pressed, it could, in my view, equally be said, in the language of s5(3)(a) of the ADJR Act, that the Authority was required by law to reach the decision which it did only if a particular matter was established, and there was no evidence or other material from which it could reasonably be satisfied that the matter was established. It is not, in view of the way in which this case was argued, necessary to give consideration to the true import of s5(3)(b) of the ADJR Act and its relationship with s5(1)(c) of that Act. Some faint weight was placed by the applicants upon the unchallenged evidence of the second applicant that on 11 July 1995 he advised Mr Candy that the distance between his pharmacy and the Kareela premises was less than 2 kilometres. If such advice came before the Authority at a time before its unconditional recommendation was conveyed to the Secretary, it would be arguable that a failure to consider it would amount to a failure to take into account a relevant consideration. However, in this case, I am unable to be satisfied that such advice did come to the attention of the Authority, or Mr Candy, before the unconditional recommendation was conveyed to the Secretary. GROUND 8 - DECISION NOT AUTHORISED BY THE ENACTMENT

[26]

It was contended on behalf of the applicants that the recommendation of the first respondent, and thus the approval of the second respondent, were induced or affected by the fraud of Mr Levis. Mr Levis gave evidence, which I accept, that at the time that he instructed Mr Boxall he had not seen the rules. There is no evidence to show when he first saw such rules. He agreed that he was aware that the relevant distance "was the shortest distance door to door by a lawful access route". There is no evidence, however, that he was aware at any relevant time that the rules import a requirement as to the direction of travel. Mr Levis agreed that the instructions which he gave to Mr Boxall were to measure "the distance door to door between the two pharmacies". It appears that Mr Boxall interpreted these instructions as requiring him to measure a route which could be travelled in both directions. I am not satisfied that Mr Levis did not have a similar understanding of the requirement of the rules, or alternatively, that he did not rely upon Mr Boxall's understanding of what was involved in measuring a distance between two premises. Mr Levis denied that he did not believe that the route described in the letter 5847/A was the shortest lawful access route between the Oyster Bay pharmacy and the Kareela premises. I am not able to be satisfied on the evidence that this answer was false. As to the advice provided by Mr Levis to Mr Candy by his facsimile transmission of 14 June 1995 that "Box Road is not an access route between Kareela and Jannali as the road terminates at the river without a bridge", I am satisfied that Mr Levis provided this advice without having visited the relevant area or being familiar with it. I accept as a fact that it is possible to walk lawfully from Jannali to Kareela by proceeding along Box Road until it terminates prior to the river, and then proceeding along a stepped path which allows access over the river by a foot bridge. Mr Levis initially gave evidence that he had examined a fairly large scale map of the Sutherland Shire at the Sutherland Library and obtained information therefrom in respect of the route from Jannali to Kareela. I accept, however, that his inspection of such maps took place after he sent to Mr Candy the facsimile transmission of 14 June 1995. Mr Levis agreed that he had never walked the Box Road route between Jannali and Kareela and had not made an inspection of the area adjacent to Box Road near the river to check if there was a bridge across the river. He did, I find, rely entirely on a street directory and his own general knowledge of the area, such as it was, in asserting to Mr Candy that Box Road "terminates at the river without a bridge". It may well be that Mr Levis's facsimile transmission of 14 June 1995 was misleading in that it suggested that Mr Levis had personal knowledge of matters in fact not known to him, but I am not able to find that Mr Levis knew the statement contained in the facsimile transmission to be false. Was he reckless, careless whether it be true or false, in the sense that he lacked an honest belief in its truth? (Derry v Peek (1889) 14 App Cas 337 per Lord Herschell at 374). I do not consider that the evidence is sufficient to support such a finding. Although I am satisfied that Mr Levis made the statement without reasonable grounds, I am not satisfied that he made it fraudulently. Ground 9 cannot be upheld. RELIEF