Sadri v Pharmacy Council of New South Wales

Supreme Court of NSW|2024-11-29|Before: Elkaim AJ

JUDGMENT

This is an appeal from a decision of the New South Wales Civil and Administrative Tribunal (the Tribunal) made on 26 September 2024 (Sadri v Pharmacy Council of New South Wales [2024] NSWCATOD 156). The Tribunal decision was itself an appeal from a decision of the Pharmacy Council of New South Wales (the Council), made on 11 June 2024.
This appeal is restricted to a question of law. The question in this case is said to be the construction of s 150 of the Health Practitioner Regulation National Law 2009 (NSW) (the National Law). Although I agree that the questions arising in this matter are questions of law, I think they are probably better described as relating to the correct application of s 150, rather than its construction.
Section 150 states: 150 Suspension or conditions of registration to protect public [NSW] (1) A Council must, if at any time it is satisfied it is appropriate to do so for the protection of the health or safety of any person or persons (whether or not a particular person or persons) or if satisfied the action is otherwise in the public interest - (a) by order suspend a registered health practitioner's or student's registration; or (b) by order impose on a registered health practitioner's registration the conditions relating to the practitioner's practising the health profession the Council considers appropriate; or (c) by order impose on a student's registration the conditions the Council considers appropriate. (2) A suspension of a registered health practitioner's or student's registration under subsection (1) has effect until the first of the following happens - (a) the complaint about the practitioner or student is disposed of; (b) the suspension is ended by the Council. (3) If a Council for a health profession is satisfied a health practitioner or student registered in the profession has contravened a critical compliance order or condition, the Council must - (a) suspend the practitioner's or student's registration until a complaint concerning the matter is dealt with by the Tribunal; and (b) refer the matter to the Tribunal as a complaint. (4) A Council for a health profession may take action under this section - (a) whether or not a complaint has been made or referred to the Council about the practitioner or student; and (b) whether or not proceedings in respect of a complaint about the practitioner or student are before a Committee or the Tribunal. (5) Without limiting the conditions that may be imposed under subsection (1)(b), a Council may impose a condition requiring the registered health practitioner to undergo a performance assessment, but the condition has no effect unless the Commission agrees with the imposition of the condition. (6) If a Council takes action under this section in relation to a registered health practitioner or student, the Council must give written notice of the following to the practitioner or student - (a) the action taken under this section; (b) the reasons for the action. (6A) A written notice under subsection (6)(b) about the reasons for action taken under this section is not admissible in evidence in - (a) civil or criminal proceedings in a court of law, other than proceedings under this Law; or (b) an inquest or inquiry under the Coroners Act 2009. (7) If a Council delegates any function of the Council under this section to a group of 2 or more persons, at least one of those persons must be a person who - (a) is not a registered health practitioner or student in the health profession for which the Council is established; and (b) has not at any time been registered as a health practitioner or student in that health profession under this Law or a corresponding prior Act.

Background

The plaintiff was registered as a pharmacist in 2011. Since her registration there have been seven complaints made against her to the Council.
The most recent complaint was made on 2 May 2024 by the Pharmaceutical Services Unit (the PSU). In deciding this complaint, the Council took into account three of the previous six complaints.
The Council heard the PSU complaint on 20 May 2024. On 11 June 2024, the Council provided reasons for its decision, that decision being: "That under section 150(1)(a) the Council was satisfied that it is appropriate that Ms Negina Sadri's registration is suspended."
As at 2 May 2024, the plaintiff was the proprietor of three pharmacies, situated in Blacktown, Greystanes and East Blaxland respectively. The PSU summarised the complaint in this way: "2 Summary of findings A. Keys to the drug safe were kept in a drawer in the dispensary, contrary to clause 76 of the PTGR. B. The Schedule 8 drug tapentadol was supplied on a prescription that did not contain a patient's address. The person 'HD' who was attributed to this dispensing is a dispensary technician, not a registered pharmacist, contrary to clause 85 of the PTGR. C. Dispensary technicians were attributed to the dispensing of Schedule 4 and Schedule 8 drugs in the dispensing records, contrary to clause 55 and clause 113 of the PTGR. D. Bundles of dispensing labels and repeats of high-cost PBS drugs were found in a drawer in the dispensary where it is indicative that dispensing had occurred, but there were no records of supply observed from your FRED dispensing system and there were no purchase records of these medicines from the wholesale suppliers API and Sigma, in contravention of clause 55, 176 and 177 of the PTGR. E. Pharmacists had made alterations to the records in the methadone drug register and subsidiary drug register, contrary to clause 177 of the PTGR. F. Pharmacist's signatures were missing from the methadone drug register records, in breach of clause 112 of the PTGR. G. More methadone takeaway doses had been supplied to a patient, contrary to the directions on the prescription and clause 85 of the PTGR. H. The methadone takeaway dispensing label did not meet the requirements of section 5.2.7 of TG201/6. I. Multiple prescriptions were observed in the patient's file. Some superseded or expired prescriptions issued for ODT has not been marked 'CANCELLED', contrary to clause 88 of the PTGR. J. The non-receipt of original copy of methadone prescription issued for Troy Weyland had not been reported to PSU, in contravention of clause 96 of the PTGR. K. The original copy of signed receipt of Schedule 8 drugs had not been returned to the wholesaler API as required by the provisions of clause 95 of the PTGR. L. A prescription for a Schedule 4 drug was stored with the prescriptions of Schedule 8 drugs, in contravention of clause 89 of the PTGR. M. Staff who are not pharmacist have keys to the pharmacy."
'D' is the most serious of the allegations because it involves fraud. The allegations were denied by the plaintiff. The allegations were described by the Council at [30]-[31]: "30. The PSU is alleging that Ms Sadri has defrauded the PBS by making numerous claims to the PBS for high-cost medications that were not purchased by the Pharmacy and dispensed but not supplied to patients. The PSU alleges that this has occurred in collaboration with patients who are persuaded to attend a doctor to get a prescription for high-cost medications and then present that prescription to the Pharmacy. The medication is dispensed and payment from PBS is claimed but medication is not supplied to the patient. 31. Ms Sadri allegedly uses the prescriptions to claim the costs of the medications from the PBS. The patients are allegedly rewarded by being given 25 percent of the PBS payment to the Pharmacy, with Ms Sadri keeping the other 75%. The PSE estimates that the financial gain to the Pharmacy from 9 patients over 14 days was almost $65,000 and notes there are many more examples that it was impractical to outline."
At the time of the Council decision, the Tribunal decision and the hearing before me, the allegations of fraud remained allegations which were denied. The plaintiff emphasised that she was entitled to the presumption of innocence.
The Council correctly stated, at [6]: "The central issue for us to consider is whether it is appropriate to take action under s. 150 of the National Law (NSW) in respect of Ms Sadri for the protection of the safety or health of the public or otherwise in the public interest."
The Council was obviously mindful of what has been described as the two limbs of s 150(1), the first limb being the "protection of the health or safety of any person or persons" and the second limb being "is otherwise in the public interest". The Council may suspend a registration or impose conditions on a registration if it thinks it appropriate to do so having regard to the establishment of either of the two limbs.

The issues before me

The questions in this case I think are the following: 1. Did the Council improperly include matters in the first limb which should have fallen, or were impermissibly duplicated, within the second limb? 2. Did the Council combine its concerns expressed in both limbs to decide that it was appropriate to suspend the plaintiff's registration? This question assumes that if the facts had been properly placed in each limb, that those facts viewed separately under the respective limbs would not have led to a conclusion that it was appropriate to suspend the plaintiff's registration. 3. Remembering that this is an appeal from the decision of the Tribunal, did the Tribunal make an error of law in rejecting the appeal from the Council? 4. If the Tribunal was in error, can its decision nevertheless be upheld because, on the whole of the facts, the error was not material?
An issue was argued arising from the decision of the New South Wales Court of Appeal in Pridgeon v Medical Council of New South Wales [2022] NSWCA 60. This issue will be dealt with separately.

The Tribunal's decision

I will deal with the questions I have posed above in turn.

Did the Council improperly include matters in the first limb which should have fallen, or were impermissibly duplicated, within the second limb?

Before looking at the detail of the decision it is necessary to acknowledge that facts behind the application of s 150(1) may overlap into both limbs. The Court of Appeal stated in Medical Council of NSW v Smithson [2021] NSWCA 53, at [20]: "The subject matter, scope and purpose of s 150 makes clear that it is a protective provision with two independent limbs. The touchstone for the exercise of the Council's role under s 150(1) to make an order suspending the practitioner's registration or imposing conditions on it is that the Council be satisfied that it is appropriate to do so for (i) the protection of the health or safety of any person or persons (the first limb), or (ii) that the action is otherwise in the public interest (the second limb): Kirby at [15]; Ghosh at [5]. The two limbs may overlap but the public interest is not subsumed in the first limb: see Pharmacy Council of NSW v Ibrahim [2020] NSWSC 708 at [35]. The two limbs are disjunctive; satisfaction of either will suffice to trigger the obligation imposed by s 150."
Ghosh refers to Ghosh v Medical Council of NSW (2020) 102 NSWLR 303; [2020] NSWCA 122. Kirby refers to Kirby v Dental Council of NSW [2020] NSWCA 91.
The Council separated the two limbs in this way: "Does the practitioner's practice pose a risk to the health or safety of the public? 41. For the reasons discussed above, the panel formed the view that Ms Sadri's practice does pose a risk to the health or safety of the public. In summary, these reasons are: A - Failure to exercise responsibilities as a proprietor 42. Ms Sadri has, by her own admission and in the view of the panel, failed to exercise her responsibilities as a proprietor. We note that Ms Sadri does not dispute the concerns raised by the PSU in items A - M (excluding D) and acknowledges that she is responsible for the errors made by her employees. In our view, these errors have in large part occurred because Ms Sadi failed to adequately train her staff and failed to audit her pharmacies to ensure that policies and procedures were implemented and followed through correctly. This lack of training and auditing has directly resulted in a risk to the health or safety of the public by mistakes being made that could have been avoided. 43. We note with concern that Ms Sadri repeatedly referred to 'one-off' mistakes. It is a contradiction in terms to claim that there has been a series of one-off mistakes. It is clear that the mistakes were systemic and occurred because of Ms Sadri's failures as a proprietor. B- Failure to improve following counselling 44. As noted above, a 2019 complaint resulted in a Council counselling session regarding conduct. The Council expects that when a practitioner is counselled they will listen to the concerns expressed by the Council in relation to the complaint and take action to improve their practice. At the very least, action taken by a proprietor should include ensuring that sound policies and procedures are in place, staff training is adequate and ongoing, and there are good audit processes in place to ensure that policies are implemented. Unfortunately, Ms Sadri has clearly not heeded the lessons of the complaint that resulted in counselling. The failures of proprietorial oversight would be concerning.in a practitioner before the Council for the first time. For a practitioner such as Ms Sadri, with a history of complaints and a 'counselling regarding conduct' on her record, they are an indication of a practitioner unwilling to take seriously her responsibility to minimise any risk to the public. 45. We note that even though Ms Sadri must have been reminded of her proprietorial obligations by the PSU inspection she did not take immediate action. She is obviously aware of her history of complaints and we are surprised that she was not immediately jolted into taking urgent action to address the PSU concerns. Instead, it appears from the dates on the documentation that she has provided that she only acted when she received the notice of the section 150 hearing. 46. The lack of action following the counselling and the lack of immediate action following the PSU inspection give us no confidence that Ms Sadri will follow through on her assurances that she will address the PSU concerns. C - Allegations of PBS fraud 47. We note that it is our role to assess the risk to the public. It is not our role to investigate the allegations of fraud. We did not find Ms Sadri's explanations convincing and therefore we believe the allegations need to be investigated by the appropriate authorities. In the meantime, we believe there is a clear risk that systematic PBS fraud may have been taking place at the Pharmacy. The risk to the public in this case is not that medications are being misused or abused but rather that the public is being defrauded of large sums of money. Are the circumstances such that it is otherwise in the public Interest that action be taken that affects the practitioner's practice? 48. The public has an overriding expectation that pharmacists will always maintain a high level of professional competence, accountability and conduct which includes observing and practicing the principles of ethical conduct and adhering to the applicable legislation and the accepted policies, procedures and guidelines of the profession. This expectation relates to the fact that pharmacists have been entrusted with the possession of high-risk drugs and the associated risk to the public, and also entrusted with participation in the PBS and the large sums of public money involved in that scheme. A pharmacist that does not meet these high expectations places the public at risk of the misuse and abuse of high-risk drugs and/or the misuse of scarce public funding."
It is apparent that the fraud allegations were placed within both limbs of s 150(1). This is evident from [47] and [48] of the Council's decision. As already noted, from Smithson, facts may overlap and fall within both limbs. The suggested vice here is that while the alleged fraud could fall under both limbs, it cannot do so where the alleged wrongdoing has precisely the same elements.
This point is illustrated by the description of the allegation of PBS fraud found in [47]. The final sentence of the paragraph indicates that the Council is not including the fraud under the first limb because "medications are being misused or abused" but "rather that the public is being defrauded of large sums of money".
The misuse or abuse of medications would unquestionably relate to the "protection of the health or safety of any person or persons". Therefore, such misuse or abuse would be well placed within the first limb.
When moving to [48] it can be seen that the concern to the Council is again the monetary element of the alleged fraud: "This expectation relates to the fact that pharmacists have been entrusted with the possession of high-risk drugs and the associated risk to the public, and also entrusted with participation in the PBS and the large sums of public money involved in that scheme. (underlining added)
I think three points arise: 1. If the alleged fraud had been placed within the first limb because "medications are being misused or abused" and not because of defrauding the public, then the allegations would fall squarely within the first limb. 2. The placing of the alleged fraud within the second limb, to the extent that it deals with the expenditure of "large sums of public money" is a valid expression of an action that is "otherwise in the public interest" (i.e., it falls squarely within the second limb). 3. If the alleged fraud, as an imposition on public funds, was appropriate to fall in the first limb, then could it also have validly fallen within the second limb?
Without derogating from the possibility that the same conduct may contain ingredients which allow it to overlap between both limbs, I do not think this conduct (in this case the allegations of fraud) can fall within both limbs for precisely the same reason. As I have said above, the alleged fraud could appropriately have fallen under the first limb because it amounted to the misuse or abuse of medications and also could appropriately have fallen under the second limb because of the impact on public funds.
However, I do not think the alleged fraud can be placed under both limbs for the same reason, namely that relating to the use of public funds. I have endeavoured to make a distinction between overlapping, as contemplated in Smithson, and duplication. In this case the overlapping of the alleged fraud into both limbs is permissible. The duplication of the reasons for putting fraud into both limbs is not permissible.
I am therefore satisfied that the Council fell into legal error.

Did the Council combine its concerns expressed in both limbs to decide that it was appropriate to suspend the plaintiff's registration?

The allegation here is that the Council did not decide to suspend the plaintiff's registration entirely because of the matters it found relating to the first limb, nor because of the matters relating to the second limb, but rather combined the two limbs to reach a conclusion that suspension was appropriate.
The submission that the Council had combined the two limbs to reach its conclusion is derived from [50]-[53] of the Council's reasons, which state: "Are there conditions that could be imposed on the practitioner's registration that would sufficiently mitigate any identified risks to the health or safety of the public? 50. We carefully considered whether there are conditions that would sufficiently mitigate the risks to the public that we have identified. To be clear, we have three major areas of concern: • Ms Sadri has by her own admission failed to exercise her responsibilities as a proprietor. This failure has resulted in avoidable errors by her employees and consequent risk to the public. • Ms Sadri has a history of complaints against her, including a complaint that resulted in counselling regarding conduct. Despite this, she has failed to take action to ensure that her conduct as a proprietor is, to the greatest extent possible, beyond reproach. • There is a serious allegation of PBS fraud which Ms Sadri did not adequately address at the hearing, nor did she give any indication that she has taken any meaningful action to investigate the concerns raised. 51. Putting aside the PBS fraud allegation for a moment, we believe that this is a conduct matter, rather than performance, because of the fact that these proprietorial problems are ongoing following counselling in 2019, and because Ms Sadri was able to demonstrate during the hearing that her knowledge and understanding of her obligations is adequate. Therefore, we formed the view that Ms Sadri has chosen not to act in accordance with her obligations, as opposed to being unaware of her obligations. In these circumstances, there would need to be strict conditions to mitigate the risk to the public. 52. When we considered the PBS fraud allegation in addition to the other concerns, we formed the-view that the risks to the public cannot be sufficiently mitigated by conditions. The number of previous complaints, the absence of improvement following counselling in 2019 and the serious allegation of PBS fraud following a similar allegation in 2021 indicate that Ms Sadri is unwilling to improve her practice despite multiple serious concerns being raised over many years. We have little confidence that conditions would be sufficient to protect the public. If it is not considered appropriate that conditions be imposed, is it appropriate that the practitioner's registration be suspended? 53. For the reasons outlined above, we believe it is appropriate to suspend Ms Sadri's registration in order to mitigate the risks to the public."
The alleged combination I think is established, in particular from the first and last sentences of [51] and then the first sentence of [52]. It follows that if the alleged fraud should not have been included in the first limb because it was duplicated in the second limb, then the Tribunal should not have concluded that as a combination of both limbs the plaintiff's registration should be suspended.

Did the Tribunal make an error of law in rejecting the appeal from the Council?

The scope of this question is obviously limited to the questions dealt with above arising from the Council's decision. I also repeat that I have specifically distinguished duplication from overlapping.
Starting with the duplication issue, I first of all note that the plaintiff did not pursue in this court the submission made to the Tribunal that the Council could only proceed under one of the two limbs, and not under both. The plaintiff accepted this submission was untenable. The Tribunal correctly stated, at [46]: "If there are two independent bases on which the decision rests, then an appellant will fail unless both are set aside (Reimers v Medical Board of Australia [2024] NSWCA 164 at [82]."
The plaintiff also did not make submissions to the Tribunal in the same terms as those made before me. The Tribunal set out the plaintiff's argument at [35] of its reasons. This argument concentrates on whether the impact on public funds was a matter that could properly be placed within the first limb. This is different to the argument before me, which was put as follows: "(i) Does s150 of the National Law, when properly construed, permit a Council to take into consideration matters said to be relevant to the protection of the health and safety of the public (the first limb) and then also take into consideration matters of the public interest (the second limb), to reach a single decision of suspension upon both limbs; (Grounds 1(a)) (ii) On the proper construction of s150 of the National Law, is the Council able to reach its requisite state of satisfaction to take action, by a consideration of both limbs cumulatively, rather than any action being only referable to either limb;(Grounds 1(c)) (iii) Did the Tribunal err in failing to properly consider and find the Council Decision to suspend was made under the first limb, due to an allegation of PBS fraud, which was incapable of constituting a 'risk to the health or safety of the public', as that term in s150 of the National Law is properly construed; (Ground 2) (iv) Did the Tribunal fall into error and constructively fail to exercise its jurisdiction, in failing to make the necessary findings of fact, as to firstly the exact basis for the Council Decision, and then subsequently determining its lawfulness; and (Ground 2) (v) Did the Tribunal err in failing to apply Pridgeon v Medical Council of New South Wales [2022] NSWCA 60; 108 NSWLR 263 (Pridgeon) and thereby finding the "public interest' in s150 referrable to matters beyond the public interest in the health and safety of the public, being an unproven allegation of PBS fraud. (Grounds 3 and 4)"
The second submission just quoted is the accumulation point which I will return to below. Other than in respect of the accumulation point, the defendant did not submit that the arguments put before me should not be dealt with because they had not been run before the Tribunal.
The difficulty however, is that the Tribunal is now being criticised for dealing with the matter incorrectly, but it had not been subject to the same submissions on error.
The Tribunal dealt with the plaintiff's submissions under the general heading of "The Beyond Power Argument". These submissions concentrated on whether or not it was appropriate for the Council to include in the first limb the question of fraud, noting that the fraud was denied and, separately, whether the alleged fraud properly fell within the first limb.
The Tribunal dealt with what it considered was the plaintiff's "core argument" from [48] of its reasons. Then, from [53] the Tribunal set out the reasons that it thought the alleged fraud could be the subject of consideration under either of the limbs of s 150. The Tribunal concluded, at [65]-[66]: "65. In my view, for the reasons set out above, the references in the Decision to PBS fraud when considered in their proper context cannot lead to a conclusion that the conduct relating to that issue was outside of the scope of s 150 of the National Law as claimed by the Appellant. 66. The Council was entitled to proceed on each limb of s 150. The Appellant has failed to establish any error and, importantly, no error by the Council in respect of any point of law."
This is not a conclusion on the question of whether the same conduct, in the manner I have outlined above, can be legitimately placed within both limbs. I can see no error in the Tribunal's reasoning on the submissions made to it and cannot criticise the Tribunal for not making a decision on duplication.
I am not prepared to find error on the part of the Tribunal in regard to the duplication point.
The situation is different in respect of accumulation. This question was squarely put to the Tribunal. It was included (no.(ii)) in the submissions I have quoted above and is referred to in the Tribunal's reasons at [43]: "The Appellant also contended that s 150 did not permit the Council to rely on both of the limbs in s 150(1)(a). It was argued, that because of the disjunction or, if it was appropriate to take action under the first limb it was not open to the Council to act under the second limb. As I understood the further argument it was that the Council could not combine the two limbs in its consideration of the issues." (underlining added).
In addition, there was this exchange between the Tribunal and Counsel: "Now I think I might focus on that aspect now that I've mentioned it. So I think - I don't want to leave that other point if there's any other concerns about the proper construction of 'or'. The reason - and I think that there was - and the appellant appreciates the Tribunal's interchange on this issue. I gave it a moment of thinking while I was making that other submission, and the difficulty of having a finding under both limbs is the impossibility of knowing upon what basis the orders were made. SENIOR MEMBER DIXON: Well the decision has got to expose that. FLAHERTY: And it could be that the respondent has this position and I'll wait for the respondent to make the point. But say it's - it can't be 'Oh well it's 60 - and we got to almost 60% satisfaction under the first limb, 40% under the second, so there's 100% therefore we should suspend'. Now that's unworkable. It can't flow because there's no nexus between the decision and the state of satisfaction that must - that's mandatory for the body that has the power to take that action."
However, other than the acknowledgement of the submission I cannot see any part of the Tribunal's reasons which deal with the accumulation argument. I think, as I have set out above, that the accumulation point is valid. As it was raised before the Tribunal, it should have been dealt with, but that did not occur. I am satisfied that there is accordingly error on the part of the Tribunal.

Materiality

The defendant submitted that if I should find error, the suspension should not be set aside because on the whole of the allegations that were before the Council and the Tribunal, a suspension of the plaintiff's registration was inevitable. Not only was there the alleged fraud but, as stated by the Tribunal at [60]: "… the Decision of the Council separately identified risk to the health or safety of the public by the numerous mistakes in dispensing identified by the PSU Report and the delegates …"
It was pointed out that a number of the criticisms in the PSU report were conceded by the plaintiff so that their combination with the alleged fraud justified the suspension. The defendant submitted: "If I can just repeat, just to touch upon, I do press, if your Honour was against me on all the various limbs that I have identified, we then do emphasise the materiality of any alleged error, and in those circumstances there is no realistic possibility that the decision that was made by the council, or the tribunal, could have been different, and that is particularly so when one looks at the facts before the council and the tribunal and the circumstances in which the complaint was made, the content of the PSU report. Even ignoring altogether the allegations of PBS fraud, the numerous examples of dispensing mistakes and the circumstances around them are such that it was open to the council to determine to be satisfied under the first limb simply taking those matters into account and, as I have submitted, that's exactly what the tribunal found the council had done."
My initial reaction to the defendant's materiality point was that it should fail because: 1. The Council thought that, but for the alleged fraud, the plaintiff could be dealt with by the imposition of conditions (Council's reasons from [50]-[53], quoted above). 2. Allowing the alleged fraud to dictate the result would be to ignore the presumption of innocence. The plaintiff, up to and including the hearing before me, denied the allegations and they have yet to be proved.
In relation to the first point, although I have found that the accumulation between the two limbs was not permissible, that does not take away the seriousness of the fraud allegations.
The Council made it clear, at [47], that even ignoring the misuse of the medications there was a risk to the public of being "defrauded of large sums of money". Then at [49], the Council said: "PBS fraud is a clear breach of the trust that the public places in the pharmacy profession. We believe that the seriousness of the allegations against Ms Sadri mean that it is in the public interest that action be taken that affects the practitioner's practice."
Although not addressing the issues as relating to materiality, the Tribunal also took an essentially 'overall' approach, from [52]-[60]: "52. I do not accept the Appellant's arguments that the Decision impermissibly included a consideration of the alleged PBS fraud for the following reasons. 53. First, the Decision must be read as a whole and the consideration of the alleged PBS fraud in its proper context. The Appellant fails to come to grips with the precise nature of the allegation. Dispensing of medicines and claims for dispensing is, as accepted by the Appellant, a core part of the practice of pharmacy. Pharmacists have an important role to play in the integrity of the system. 54. The conduct giving rise to allegations of fraud is detailed in the PSU Report before the Council. At pages 7 to 15 of the Report there is a detailed analysis of conduct which potentially constitutes 'PBS fraud'. That phrase is a shorthand way of describing the Appellant's conduct. 55. The conduct is within the summary of findings in D. It is not there described as 'PBS fraud', but the detailed analysis of the conduct referred to gives rise to the allegation. 56. However, the conduct concerned the treatment by the Pharmacy of prescriptions for a range of patients, the question of whether the drugs prescribed were in fact supplied, and reimbursed by PBS for drugs which may not have been physically supplied to the patient. 57. The PSU Report also records allegations of a 'kick-back' to customers of 25% while the Pharmacy may have potentially received 75% of financial gain by processing prescriptions without the provision of the medication to the patients. 58. The basis for the description of alleged 'PBS fraud' was identified and recorded in the Decision at [25] to [40] set out above. These paragraphs clearly analyse the issues of concern to the delegates. They are not matters unrelated to, or beyond, proper consideration in s 150 proceedings. 59. Secondly, it is clear that the allegations concerning this conduct, according to the PBS Report, potentially contravened clauses 55, 176 and 177 of the PTGR. It is not possible to isolate the alleged conduct from the practice of pharmacy. Those clauses are directly relevant to the practice of pharmacy and the duties of pharmacists. The alleged conduct cannot be equated to a motor vehicle infringement or tax fraud. 60. Thirdly, the Decision of the Council separately identified risk to the health or safety of the public by the numerous mistakes in dispensing identified by the PSU Report and the delegates (paragraph [42] of the Decision). The first limb of s 150(1) could therefore be engaged.
In Kirby Payne JA said, at [15]: "In the context of a provision headed 'Suspension or conditions of registration to protect public', and the objective and guiding principle stated in s 3A, the touchstone for the exercise of the Council's power under s 150(1) to make an order suspending the practitioner's registration or imposing conditions on it is that the Council be satisfied that it is appropriate to do so for the protection of the health or safety of any person or persons, or that the action is otherwise in the public interest. If so satisfied - regardless of how the matter comes to its attention - it must act. The power is conferred purely for the protection of the public, and thus the Council's sole concern is what if any action is required for the protection of the health and safety of any relevant persons and/or the public interest. This is not a professional disciplinary power, but purely protective. Although disciplinary proceedings may flow from s 150 action (as a result of the referral to the HCCC under s 150D), they are dealt with separately, under other provisions of the National Law which provide for dealing with complaints. As NCAT in its decision rightly observed, the role of a Council in undertaking a s 150 inquiry is to protect the public, and in a case such as the present, where serious allegations have been made which, if true, could lead to suspension or cancellation of the practitioner's registration but the evidence is incomplete and further investigation is needed, the issue for the Council is not whether the allegations are proved, but whether the evidence establishes a risk to the public requiring suspension, or imposition of a condition, for protection of the public."
The just quoted passage suggests that the presumption of innocence has a limited role to play if the Council is satisfied that there is "a risk to the public requiring suspension, or imposition of a condition, for protection of the public", notwithstanding that "the evidence is incomplete and further investigation is needed."
This theme was reiterated in Smithson, at [20]: … (5) Because the circumstances in which action under s 150 may be taken include that there may be a continuing dispute as to the relevant facts and that investigations into complaints concerning the practitioner by bodies such as the HCCC may not have been completed or even commenced, the Tribunal is not required to make conclusive findings of fact based on the material before it. The s 159 hearing does not involve determination of the merits of a claim: Kirby at [14], [139]; Ghosh at [9]. (6) The role of the Tribunal is to make an assessment of the evidence and determine whether it is satisfied that it is appropriate to make one of the orders referred to in s 150(1). The s 159 hearing is not the occasion to consider, let alone determine, whether a practitioner is currently a fit and proper person to carry on the role: Ghosh at [9]. (7) The 'protection of the health and safety of any person or persons' does not require there be actual harm suffered by any person. Because s 150 is concerned with protection, it is sufficient if it can be demonstrated that there is a potential for harm: Ghosh at [9]. The Tribunal's role in this case was to make an assessment of the evidence and determine whether it was appropriate, on either of the bases for which s 150 provides, that an order be made under s 150 for the protection of the health or safety of any person or persons or otherwise in the public interest."
Both Kirby and Smithson endorse the following: 1. The decision of a Council is not dictated by the presumption of innocence, the incomplete state of investigation or a final hearing on whether the alleged misconduct has been proved. 2. The Council may act to impose conditions or suspend a registration where it believes it appropriate to fulfil its obligation of protection.
When one looks at the allegations, the attitude of the Council towards them and its comments on their seriousness, then the appropriateness of the suspension becomes apparent. The fact that the Council expressed itself in a way that suggests an accumulation of factors between the two limbs does not affect the overall attitude of the Council towards the conduct of the plaintiff and its level of seriousness, in turn giving rise to a need for protection of the public.
The plaintiff urged caution in dealing with materiality, pointing out the test set out by the High Court in LPDT v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs & Anor [2024] HCA 12, referring to this sentence from [15]: "Importantly, a court called upon to determine whether the threshold has been met must be careful not to assume the function of the decision-maker: the point at which the line between judicial review and merits review is crossed may not always be clear, but the line must be maintained."
My decision is more encompassed within [16], and in particular my opinion that "it can be affirmatively concluded that the outcome would inevitably have been the same had the error not been made."
Accordingly, although I have identified error in essentially the technical manner in which the Council expressed its conclusions, and I have agreed that the accumulation issue was not dealt with by the Tribunal, I nevertheless am of the view that the errors are not material to the ultimate decision.

Pridgeon v Medical Council of New South Wales [2022] NSWCA 60

The argument on Pridgeon was dealt with by the Tribunal as part of dealing with the plaintiff's primary submissions. The Tribunal summarised the argument at [40]: "The Appellant then argued that if the Tribunal finds the Decision is grounded in the second option, the 'public interest', it must approach the matter on the basis that it is a reference to the public interest in the protection of the health and safety of the public, and the Appellant's alleged conduct is not capable of falling within 'public interest' as dealt with in the decision by the Court of Appeal in Pridgeon v Medical Council of New South Wales (2022) 108 NSWLR 263."
The argument before me concentrated on whether the Tribunal had properly construed the term "public interest" which exists in the second limb. The Tribunal stated, at [62]: "The Court in Pridgeon did not eliminate a consideration of the public interest in the second limb of s 150. The Court held at [68] that the content to be given to that protection must take its meaning from the conduct of the practice in respect of which a practitioner's professional registration is granted. The broader consideration of the administration of justice or undermining the rule of law which was at issue in that case was beyond the reach of the public interest with which s 150 is concerned."
Paragraph 68 in Pridgeon states: "First, in the context of Pt 8 Div 3 subdiv 7, the reference to the 'public interest' should be understood as a reference to the public interest in the protection of the public's health and safety. The content to be given to that protection must take its meaning from the conduct of the practice of medicine in respect of which a medical practitioner's registration is granted. In the present case, the relevant public interest must be in the conduct by Dr Pridgeon of his profession as a medical practitioner. There may, arguably, be some wider, unspecified public interest in limiting the potential for the rule of law to be undermined by conduct of a medical practitioner that is said to be in defiance of an order of the court, but which is unrelated to the practice of medicine which the National Law regulates. However, the honourable reputation of the medical profession that is said possibly to be affected by conduct of that description is not a concern that relevantly informs the particular public interest in the protection of the public with which s 150 is concerned."
The plaintiff submitted: "Properly understood, the Court in Pridgeon formed the view, the 'public interest' is referable to the public interest in the protection of the public's health and safety. The second sentence narrowed the focus to conduct in the practice of a profession which was such that it concerned the protection of the public's health and safety."
The plaintiff continued: "For completeness, the plaintiff submits, logically and in accordance with the Pridgeon, if an unproven allegation of PBS fraud is not a risk to the health or safety of the public, then it is not a matter that can inform the public interest, as the content to be given to the 'public interest' is absent."
I agree with the defendant with respect to the application of Pridgeon. Taken from the headnote the facts in Pridgeon were: "The appellant, Dr Pridgeon, was a registered medical practitioner. On 29 October 2018, the respondent, the Medical Council of New South Wales, determined pursuant to s 150 of the Health Practitioner Regulation National Law (NSW) to suspend Dr Pridgeon's registration, after he was charged by the Australian Federal Police and later the Queensland Police with offences against the respective criminal codes of the Commonwealth and Queensland. The charges related to Dr Pridgeon's role in harbouring and/or supporting a woman and her twin daughters. The children had been removed by their mother from a place in Queensland and not returned to the custody of their father, who was named as a residential parent by order of the Family Court of Australia and the parent with whom the Family Court had ordered the children to live. At the time when the mother took and secreted the children, she only had a right of supervised contact with them. Dr Pridgeon maintained that she had informed him that the children's father had sexually abused them."
The facts in the present matter are obviously very different. The fundamental area of difference is that in Pridgeon the criminal conduct had nothing to do with the practice of medicine by the doctor. This led the Court of Appeal, in [68], to say: "In the present case, the relevant public interest must be in the conduct by Dr Pridgeon of his profession as a medical practitioner."
I first of all note that the decision in Pridgeon is limited to its own facts. It cannot be applied to the present case because the complaints against the plaintiff are unquestionably related to her profession as a pharmacist. As the defendant has stated in its written submissions: "Therefore, at most, Pridgeon at [68] should be understood as confining the types of 'public interest' capable of invoking the second limb of s 150 to interests that are connected to the practitioner's practice."
In summary, there is nothing in the decision in Pridgeon that would have made me reach a decision favourable to the plaintiff.

Costs

The defendant has succeeded and in the normal course would be entitled to an order for costs in its favour. The plaintiff did however succeed on the accumulation point and may wish to make a submission ameliorating the normal costs order.
I will make the 'usual' costs order but give the parties leave to make further submissions, should they wish on costs.

Orders

I make the following orders: 1. The Summons filed on 15 October 2024 is dismissed. 2. The plaintiff is to pay the defendant's costs of the proceedings. 3. The parties have leave to make submissions in respect of the costs order.

Amendments 17 December 2024 - para 62 'two' changed to 'to' DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 17 December 2024

(2020) 102 NSWLR 303

(2022) 108 NSWLR 263

At a glance

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Cases Cited (10)