Timing of orders setting aside the decision
32 The second difficult question is the timing of the order setting aside the Minister's decision and, as a consequence, the timing of a remitter order.
33 The evidence before the Court in relation to final orders, on behalf of the second respondent, relevantly establishes that the second respondent commenced operating a pharmacy under the banner "TerryWhite Chemmart" at 58-60 Pinewood Drive, Mount Waverley on 5 March 2018, and that it operates as a 24-hour seven day a week pharmacy within the Waverley Family HealthCare Medical Centre.
34 The evidence to which I refer below under the heading "Discretionary considerations as to the timing of the Court's orders" includes evidence about the contended financial impact on the second respondent if the Minister's decision is set aside with effect from the date of the Court's orders, with the consequence that the second respondent would not have operative approval to dispense Pharmaceutical Benefits Scheme (PBS) medicines pursuant to the scheme contained in the National Health Act. That evidence sets out the contended consequences of such a situation for those operating the Waverley Family HealthCare Medical Centre, and for members of the public currently using the services of both the pharmacy and the Medical Centre.
35 The solution proposed on behalf of the second respondent is that the Court should remit the matter immediately to the Minister but, pursuant to s 16(1)(a) of the AD(JR) Act, the Court should set a period of three months before the Minister's decision is set aside. The second respondent submits that the intervening period would give the Minister an opportunity to reconsider the request for approval while its pharmacy could continue to operate on the basis of what its counsel contended, in effect, to be a "factual" approval.
36 The second respondent submits that such a course is open to the Court, given the breadth of relief available under s 16 of the AD(JR) Act, and the terms and operation of the relevant provisions of the National Health Act. It submits the scheme of the National Health Act distinguishes between an approval "in fact" and "in law", and that the former can survive and remain in place, allowing a pharmacy to continue lawful operation, even if there is no approval in law which can be recognised because the decision granting approval has been found to be affected by legal error.
37 The various scenarios which might flow from these propositions were the subject of some discussion between the Court and counsel for the second respondent during the supplementary hearing. Counsel appeared to accept the following consequences could flow if the suggested course was adopted:
(a) If the Minister decides after two months to refuse the approval, the second respondent submits it would continue to have the benefit (through s 90E of the National Health Act) of the "in fact" approval of 1 November 2017 for another month until the Court's setting aside order takes effect.
(b) If the Minister decides after two months to grant the approval, then the second respondent accepts it has in effect two operative approvals, both of which on its contentions authorise it to dispense PBS medicines. Then, one month later, the "in fact" approval will cease to exist because the Court's setting aside order will take effect.
(c) If, after three months, the Minister has not made a new decision pursuant to the remitter order, then the "in fact" approval will be set aside and there will no basis on which the pharmacy can dispense PBS medicines attracting the subsidy.
38 The premise of the second respondent's proposal is that the Court's findings, and indeed (as I understood the argument) any finding of legal error in the Minister's decision - whether characterised as "jurisdictional" or not - do not result in the Minister's approval decision being a nullity, or invalid from the time the power was exercised, at least for "factual" purposes. The applicant appears to agree in this premise, although some of senior counsel's submissions at the supplementary hearing appeared to assume an approval is capable of being a "nullity". Of course, as I have explained above, the second respondent's submissions about the existence of a duty which was "unperformed" did to some extent rely on the proposition that the Minister's exercise of power on 1 November 2017 was "in law" a nullity.
39 The second respondent's argument rests on the approach taken by Jessup J in Yu (No 2), and the authorities to which his Honour referred in that decision. That was a case where his Honour had previously found there had been a denial of natural justice to the applicant, in the granting of an approval by the Minister under s 90A of the National Health Act. As in this case, the parties diverged on the appropriate form of final orders, especially as to the date on which the impugned approval decision should be set aside. The applicant submitted the decision should be set aside from the time the power was exercised. In contrast, the fourth respondents (who were the beneficiaries of the s 90A approval) submitted it should be set aside from a date no earlier than the date of the Court's orders. Yu (No 2) was, like this case, a proceeding invoking this Court's jurisdiction under the AD(JR) Act. There do not appear to have been any submissions made in Yu (No 2) that the Court should select a date in the future on which to set aside the s 90A approval decision. I consider it of some significance that Yu (No 2) did not appear to involve any proposal that orders be made with prospective effect. Nor did there appear to have been any debate about referral back to the Minister, or that this should occur at the same time, or technically immediately after, the s 90A approval had been set aside.
40 At [4] of his reasons, referring to both Jadwan Pty Ltd v Department of Health and Aged Care [2003] FCAFC 288; 145 FCR 1 at [42] and Minister for Immigration and Citizenship v Maman [2012] FCAFC 13; 200 FCR 30 at [44], Jessup J held (quoting from Gray and Downes JJ's reasons in Jadwan) that there is no "universal proposition that jurisdictional error on the part of a decision-maker will lead to the decision having no consequences whatsoever". As Jessup J and the Full Courts in Jadwan and Maman recognised, the statutory context in which the issue arises is important.
41 Having set out the relevant provisions of the National Health Act, Jessup J turned (from [7] of his reasons) to address the consequences of a pharmacist having obtained an approval under s 90 of the National Health Act. His Honour found that by reason of the prohibition in s 89 of the National Health Act, and the definition of "pharmaceutical benefits":
… supply by an "approved pharmacist" at or from premises in respect of which he or she is approved is the only lawful way that a person may obtain pharmaceutical benefits as defined.
42 His Honour also noted the price benefit for the individuals obtaining the pharmaceutical benefits, arising by reason of ss 86 and 87 of the National Health Act.
43 These two consequences of a pharmacist obtaining approval under the National Health Act with respect to particular premises were described by Jessup J at [9] as "far reaching":
… both in the sense of extending to numerous transactions in which ordinary patients are involved and in the sense of involving statutory authorisation for the expenditure of Commonwealth moneys.
44 His Honour then found, at the end of [9]:
My attention was drawn to no provision - in the NH Act or elsewhere - which would provide either for the recovery of such moneys or for the regularisation of the expenditure involved should it later be discovered that a ministerial act by which the pharmacist in question had been approved was invalid. As a broad matter of statutory purpose and convenience, I find it hard to imagine that the legislature might have contemplated that an approval given under s 90A of the NH Act in breach of the rules of natural justice was a nullity without any legal consequences whatsoever.
45 I note for completeness that there are provisions for the recovery of "unauthorised payments" in subss 99AA(2) and (3) of the National Health Act. However, these provisions operate in circumstances where a pharmacist knows, or ought reasonably to have known, that the subsidy amount received in respect of the supply of a pharmaceutical benefit or benefits was not payable. Although it is not necessary to decide, I doubt these provisions would be applicable to circumstances such as those in Yu (No 2), or in this proceeding, at least to the point of the Court's decision on legal error.
46 In Yu (No 2), Justice Jessup noted (at [10] of his reasons) a matter which has been emphasised by the second respondent: namely, that an approval under s 90 or s 90A is not given as a "benefit" to an individual pharmacist, but rather as part of a scheme to ensure the Australian community has convenient access to pharmacies. This led Jessup J to find (looking at the position of the applicant in Yu (No 2), as an objecting pharmacist):
The fact that the s 90A approval was not concerned with the applicant's own position, or with his rights as a pharmacist, is another reason to consider it likely that the legislature did not intend that the Minister's failure to accord natural justice to someone in the position of the applicant would produce the result that the approval ostensibly resulting therefrom would be a legal nullity.
47 I return to this below, but this factor seems to me to tend against the discretionary considerations put forward by the second respondent in support of its proposed orders. If the scheme is not concerned with benefits to individual pharmacists, it is somewhat difficult to see how any financial difficulties which may be suffered by the second respondent become relevant to the question of appropriate orders in circumstances where the Court has found an approval decision to have been made unlawfully.
48 At [11] of his reasons, Jessup J turned to examine what his Honour called the "automatic rejection provisions" in subss 90B(4) and (5). His Honour found that the consequence of an approval decision made under s 90A in breach of the rules of procedural fairness being treated as a nullity would be that the deeming effect of those provisions would be engaged. Consequently, the s 90A process would be a "closed event", unable to be reopened after judicial review, because the time limits prescribed by those provisions would have passed and there would have been a deemed refusal, and the application time limit in s 90B(3) would likely also have passed so that a new request for approval could not be made by the pharmacist. His Honour found that could not have been the outcome intended by the legislature where there was a denial of procedural fairness in the approval process.
49 His Honour then concluded with this finding (at [12]):
By reason of the considerations discussed above, which are essentially ones of statutory intent, I take the view that the Minister's failure to accord natural justice to the applicant did not produce the result that the approval she gave to the fourth respondents on 20 July 2012 was a nullity. That approval, albeit infected with legal error, was nonetheless an approval in fact for the purposes of s 90E of the NH Act.
50 To this point in his reasons, Jessup J had not dealt with the terms of s 90E, other than to set them out. Section 90E provides:
90E Effect of decision by Minister to approve pharmacist
If the Minister decides to substitute for a decision of the Secretary to which section 90A applies a decision approving a pharmacist for the purpose of supplying pharmaceutical benefits at particular premises:
(a) the pharmacist is to be treated for all purposes of this Act as if the pharmacist is approved under section 90 in respect of those premises; and
(b) references in this Act to an approval granted under section 90 include references to an approval treated as having been granted under section 90 by paragraph (a) of this section; and
(c) the conditions to which an approval granted under section 90 is subject (including any condition that is imposed by means of a determination for the purposes of paragraph 92A(1)(f)) apply also to an approval that is treated as having been granted under section 90 by paragraph (a) of this section; and
(d) the rights conferred and obligations imposed on an approved pharmacist apply to the pharmacist in his or her activities as an approved pharmacist.
51 Relying on the last sentence of Jessup J's reasons at [12] (see [49] above), the second respondent submitted the effect of s 90E was to "protect" a pharmacist in the position of the second respondent, and to enable the pharmacist to operate under an approval "in fact", even if the power which had been exercised to grant that approval had miscarried because of legal error. As I understood the submission, it extended to circumstances where the legal error could properly be described as jurisdictional. For completeness, I note the second respondent did not submit that an error of the kind identified by the Court (being non-compliance with the requirements in s 90D(3)) was anything other than an error affecting the jurisdiction of the Minister to grant an approval under s 90A(2).
52 I do not accept the second respondent's submissions about the purpose, operation or effect of s 90E. Nor do I accept that Jessup J adopted such an interpretation of s 90E in Yu (No 2). The conclusion contained in the last sentence in his Honour's reasons at [12], in circumstances where it does not appear any argument of that kind was put to his Honour, is an insufficient basis upon which to support the rather more ambitious proposition now put on behalf of the second respondent.
53 The purpose of s 90E is clear from its text and context. Referring as it does to a positive exercise of the personal power conferred on the Minister by s 90A(2), the provision then sets out four consequences which flow from that exercise of power. Each of them seeks to bring an approval under s 90A into the same legislative regime, and to give it the same status, as an approval under the ordinary approval process in s 90. The terms of s 90E apply that legislative scheme to a s 90A approval. What that does, in turn, is to make the provisions in s 90 the "lead" provisions: see Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; 194 CLR 355 at [70] (McHugh, Gummow, Kirby and Hayne JJ).
54 To say as much is not to doubt the general propositions set out by Jessup J in Yu (No 2) that the scheme of the National Health Act, insofar as it deals with approval of pharmacists to supply pharmaceutical benefits, does not intend that an exercise of power under s 90A(2), which is affected by legal error, be a nullity. As s 85 makes clear, pharmaceutical benefits may only be provided by the Commonwealth in accordance with Part VII of the National Health Act: the scheme is exclusive. The entitlement conferred by s 86 to receive pharmaceutical benefits "without payment or provision of money or other consideration other than a charge made in accordance with section 87" is the principal concern of the scheme. The approval of pharmacists to supply those benefits is a critical component, but it is facilitative towards the end of ensuring supply of pharmaceutical benefits to members of the public as contemplated by s 86, and the Commonwealth's function in s 85. Pharmacists are not the only persons permitted to supply pharmaceutical benefits; they can also be supplied, in accordance with the limitations in the legislative scheme, by approved medical practitioners and by approved hospital authorities: see s 84 and the definition of "approved supplier".
55 The restrictions on the entitlement to obtain pharmaceutical benefits through an approved pharmacist would be rendered uncertain and unworkable if the approval of a pharmacist to supply pharmaceutical benefits, having been identified as affected by legal error, was deprived of all efficacy since its grant. In that respect, I agree with the conclusions of Jessup J in Yu (No 2). Acceptance of that proposition does not involve any extended operation being given to the terms of s 90E. There are a range of effects on third parties, and on the expenditure of Commonwealth funds under this scheme, all of which contribute to the conclusion that the legislative scheme did not intend that an approval found to have been granted unlawfully, including without jurisdiction, should be treated as never having had any effect in law.
56 Rather, acceptance of that proposition is a recognition of what was said by Gray and Downes JJ in Jadwan at [42]; that the consequences of a conclusion that a power was exercised unlawfully, and in particular, without jurisdiction, will depend on the circumstances, and especially on the statutory context.
57 It is true that there are statements in Bhardwaj which are far more absolute, in particular the often quoted passage from the judgment of Gaudron and Gummow JJ at [51]:
There is, in our view, no reason in principle why the general law should treat administrative decisions involving jurisdictional error as binding or having legal effect unless and until set aside. A decision that involves jurisdictional error is a decision that lacks legal foundation and is properly regarded, in law, as no decision at all. Further, there is a certain illogicality in the notion that, although a decision involves jurisdictional error, the law requires that, until the decision is set aside, the rights of the individual to whom the decision relates are or, perhaps, are deemed to be other than as recognised by the law that will be applied if and when the decision is challenged. A fortiori in a case in which the decision in question exceeds constitutional power or infringes a constitutional prohibition.
(Footnotes omitted.)
58 See also McHugh J at [63] and [67], and Hayne J at [152]-[155].
59 The statements made by members of the High Court in Bhardwaj concerning the consequences of a finding of jurisdictional error need to be understood in the context of the nature of the decision under consideration in that case. The relevant factual circumstances concerned, as Gleeson CJ recounted at the beginning of his reasons, the respondent's review application to the Immigration Review Tribunal which was initially determined on 16 September 1998 after a hearing on 15 September 1998 which the respondent did not attend. The decision was adverse to the respondent, and the particular reason given for the rejection of the review application was that the respondent had not provided any information suggesting his visa cancellation was unfair or inappropriate. However, the Tribunal had, by administrative oversight, overlooked an adjournment request sent by the respondent's agent the day before the hearing, which thus explained why the respondent had not appeared at the hearing on 15 September. When that adjournment request was drawn to the Tribunal's attention, the Tribunal arranged for a new hearing to be conducted, and ultimately accepted the respondent's explanation of the conduct which led to the cancellation of his visa, and revoked that cancellation. The Minister sought judicial review of that decision, on the basis the Tribunal was functus officio after the first decision and had no power to alter its initial decision. On an appeal by way of the grant of special leave from the Full Federal Court's decision, a majority of the High Court rejected that argument, for reasons expressed in differing ways and on differing bases. However, it is the reasons of Gaudron and Gummow JJ (and in particular the passage from their Honours' reasons at [51], which I have quoted above) which have endured and been subsequently applied, including by the High Court itself.
60 Bhardwaj was decided before Plaintiff S157/2002 v Commonwealth of Australia [2003] HCA 2; 211 CLR 476. In Plaintiff S157, in the context of determining the scope and interpretation of a privative clause in the Migration Act, the plurality at [76] endorsed the principal proposition in Bhardwaj:
Once it is accepted, as it must be, that s 474 is to be construed conformably with Ch III of the Constitution, specifically, s 75, the expression "decision[s] ... made under this Act" must be read so as to refer to decisions which involve neither a failure to exercise jurisdiction nor an excess of the jurisdiction conferred by the Act. Indeed so much is required as a matter of general principle. This Court has clearly held that an administrative decision which involves jurisdictional error is "regarded, in law, as no decision at all". Thus, if there has been jurisdictional error because, for example, of a failure to discharge "imperative duties" or to observe "inviolable limitations or restraints", the decision in question cannot properly be described in the terms used in s 474(2) as "a decision ... made under this Act" and is, thus, not a "privative clause decision" as defined in s 474(2) and (3) of the Act.
(Footnotes omitted.)
61 However, these statements in Bhardwaj were made, as Gaudron and Gummow JJ in particular emphasised at [44]-[46] of their reasons, by also rejecting the use of terms such as "nullity" and "invalidity" or "void" on the basis that such terminology is unhelpful:
To say that the September decision was not a "decision on review" for the purposes of ss 367 and 368 of the Act is simply to say that it clearly involved a failure to exercise jurisdiction, and not merely jurisdictional error constituted by the denial of procedural fairness. Either of these grounds would entitle Mr Bhardwaj to have the September decision quashed by this Court as an incident of relief by way of mandamus or prohibition under s 75(v) of the Constitution. This notwithstanding, the question whether the Tribunal could disregard its September decision depends on the scheme of Pts 5 and 8 of the Act. To understand that scheme, it is necessary to say something as to the nature of an administrative decision.
The nature of administrative decisions
It is sometimes convenient to ask whether administrative decisions which involve reviewable error are either void or voidable, the former signifying that the decision is "ineffective for all purposes" and the latter that it is "valid and operative unless and until duly challenged but ... deemed to have been void ab initio." The tendency to conceptualise erroneous administrative decisions as voidable rather than void may be the result of the need to treat a decision as having at least sufficient effect to ground an "appeal" or other legal proceedings. Thus, it was said by Lord Wilberforce in Calvin v Carr that:
"Their Lordships' opinion would be, if it became necessary to fix upon one or other of [the] expressions ['void' or 'voidable'], that a decision made contrary to natural justice is void, but that, until it is so declared by a competent body or court, it may have some effect, or existence, in law. This condition might be better expressed by saying that the decision is invalid or vitiated. In the present context, where the question is whether an appeal lies, the impugned decision cannot be considered as totally void, in the sense of being legally non-existent."
In our view, it is neither necessary nor helpful to describe erroneous administrative decisions as "void", "voidable", "invalid", "vitiated" or, even, as "nullities". To categorise decisions in that way tends to ignore the fact that the real issue is whether the rights and liabilities of the individual to whom the decision relates are as specified in that decision. And, perhaps more importantly, it overlooks the fact that an administrative decision has only such force and effect as is given to it by the law pursuant to which it was made.
(Footnotes omitted.)
62 Some consequences of the more absolute statements in Bhardwaj came to the fore in Jadwan. In Jadwan, the exercise of power under consideration was the revocation by the Minister of an approval for an aged care facility in Hobart, Tasmania. The revocation power was exercised under the National Health Act. The date on which the appellant held an approval for its aged care facility (and therefore the date on which the approval was revoked) was critical to the operation of transitional provisions introduced into the new regulatory regime contained in the Aged Care Act 1997 (Cth): if the appellant could not obtain the benefit of the transitional provisions contained in that Act, its approval (and its subsidised aged care bed places) would not be transferred to it, and it would not be able to operate its facility. Furthermore, it would lose a valuable asset, as aged care places were a tradeable commodity. A key issue the Full Court was required to determine was the effect, in law, of an earlier Full Court decision which found the Minister's revocation decision to be unlawful: was the revocation decision a "nullity", in the sense explained in Bhardwaj, so there had been no revocation and the appellant thereby had the approval it needed to take advantage of the transitional provisions in the Aged Care Act?
63 Justices Gray and Downes began their answer to this question by referring to the reasons of Gleeson CJ in Bhardwaj at [11], where his Honour said:
To say that a tribunal has considered an application, reached a conclusion, and informed affected parties of its decision, is to make a statement of fact. But the legal consequences of that fact depend upon the Act; and the answer to a question about those consequences may depend upon the purpose for which the question is asked. The answer to the question whether a legally effective decision has been made may depend upon the kind of legal effect that is under consideration, and upon further facts as to what was done, or not done, following the communication of the decision.
64 Having then worked through the reasons of the remainder of the members of the High Court in Bhardwaj, Gray and Downes JJ concluded (at [40]):
This analysis shows that the judgment in Bhardwaj rested clearly upon the proposition that the relevant legislation did not give the first decision of the IRT force and effect such as to require the IRT to treat that decision as precluding it from exercising its statutory function. All six judges who formed the majority did so on that basis. Only Gaudron and Gummow JJ, with the agreement of McHugh J, as part of their reasoning, relied on the proposition that jurisdictional error on the part of the decision-maker causes an administrative decision to be of no legal effect. Gleeson CJ, Hayne J and Callinan J do not appear to have embraced that proposition. Kirby J in his dissenting judgment clearly did not. Gaudron and Gummow JJ did not explain in detail the consequences of the proposition that a decision has no legal effect. They did not deal with issues such as the status of the first decision of the IRT if the IRT had not chosen to ignore it and make another. Indeed, their Honours did not discuss what might be the factual, as distinct from the legal, consequences attaching to an administrative decision if no challenge to its validity is ever made, or if any challenge to its validity is made out of time, or is made in proceedings to which someone bound or otherwise affected by the decision is not a party. Nor did their Honours say anything about the possible effect of an administrative decision after a court proceeding in which a party has made out a case of jurisdictional error on the part of the decision-maker, but the Court has declined to grant relief in relation to the decision by reason of discretionary considerations. The facts of Bhardwaj did not call for pronouncement upon these issues. The IRT had itself chosen to ignore its previous decision. The validity of that decision was in issue in the very proceeding with which the High Court was dealing.
65 At [41], Gray and Downes JJ then referred to the plurality reasons in Plaintiff S157, and the reference there to Bhardwaj, observing:
…
As was the case in Bhardwaj itself, their Honours did not deal in S157 with the possible status of an administrative decision affected by jurisdictional error in the absence of a challenge to its validity, or after a court has found such error to have existed, but has declined to treat the decision as a nullity.
66 Then, at [42], their Honours said:
In our view, Bhardwaj cannot be taken to be authority for a universal proposition that jurisdictional error on the part of a decision-maker will lead to the decision having no consequences whatsoever. All that it shows is that the legal and factual consequences of the decision, if any, will depend upon the particular statute. As McHugh, Gummow, Kirby and Hayne JJ said in Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at 388 - 389:
'An act done in breach of a condition regulating the exercise of a statutory power is not necessarily invalid and of no effect. Whether it is depends upon whether there can be discerned a legislative purpose to invalidate any act that fails to comply with the condition. The existence of the purpose is ascertained by reference to the language of the statute, its subject matter and objects, and the consequences for the parties of holding void every act done in breach of the condition.'
(Original emphasis.)
67 Sitting as a single judge, I am bound by the ratio in Jadwan, which in my opinion includes the passage at [42] of the reasons of Gray and Downes JJ. It is an approach which has received express approval in subsequent decisions, and which is also consistent with other more recent authorities, including in the High Court, where these questions have been discussed: see Minister for Immigration and Border Protection v CLV16 [2018] FCAFC 80 at [61]-[64] (Flick, Griffiths and Perry JJ); Lewski v Australian Securities and Investments Commission [2016] FCAFC 96; 246 FCR 200 at [249] (Greenwood, Middleton and Foster JJ); BMF16 v Minister for Immigration and Border Protection [2016] FCA 1530 at [149]-[151] (Bromberg J); Maman at [44] (Flick and Foster JJ); Hossain v Minister for Immigration and Border Protection [2018] HCA 34; 359 ALR 1 at [24] (Kiefel CJ, Gageler and Keane JJ); and Minister for Immigration and Border Protection v SZMTA [2019] HCA 3 at [84] (Nettle and Gordon JJ).
68 I have found that the legislative scheme contained in Pt VII, Div 2 of the National Health Act relating to approval of pharmacists does not intend that an approval granted unlawfully is "void", or (to use different language) invalid for all purposes as and from the time of the exercise of power. Rather, the scheme intends, and assumes, that an approval can have some continuing effect, even where the legal error was of the kind that affected the jurisdiction of the repository of the power. This construction facilitates access by members of the public to their entitlements to pharmaceutical benefits without the consequence that they may have obtained those pharmaceutical benefits in contravention of s 89 of the National Health Act, and ensures those pharmacists dispensing the benefits and obtaining subsidies under the PBS are not required to repay those subsidies to the Commonwealth. That effect is not just factual; it has a legal aspect as well, given the various limitations on access to pharmaceutical benefits contained in the National Health Act.
69 On the one hand, the second respondent wishes to rely on this approach in order to preserve the factual (and to some extent legal) effect of the Minister's legally erroneous 1 November 2017 approval, so that the second respondent can continue to operate its pharmacy. Yet, on the other hand, the second respondent wishes to rely on the more absolute proposition in Bhardwaj, that a decision affected by jurisdictional error is "properly regarded, in law, as no decision at all", with the consequence that the "duty" (to exercise the relevant statutory power, where there is one) remains unperformed.
70 Counsel for the second respondent contended that the Minister was able to (re)consider the second respondent's request for approval under s 90A because, by reason of the Court's judgment, he had not done so according to law and so the duty imposed on him remained unperformed. Counsel submitted that for that situation to exist, it was not necessary that there be an order setting aside the unlawful approval. The second respondent could, on this argument, continue to have the benefit of the (legally erroneous) 1 November 2017 approval, and also have its substitution application reconsidered. For this proposition, counsel relied on the reasons of Hayne J in Bhardwaj at [148]:
No less importantly, it must be recognised that, after the September decision, the respondent would have been entitled to mandamus compelling the Tribunal to perform its duty to review the decision made by the Minister's delegate. Moreover, as the decision in R v War Pensions Entitlement Appeal Tribunal; Ex parte Bott reveals, mandamus would have been available even though no order quashing the September decision was sought or obtained. It would have been enough for the respondent to show "that the ostensible determination [of the Tribunal] is not a real performance of the duty imposed by law upon the tribunal".
(Footnotes omitted.)
71 As Hayne J indicated in that passage, his Honour relied on what was said by Rich, Dixon and McTiernan JJ in R v War Pensions Entitlement Appeal Tribunal; Ex parte Bott [1933] HCA 30; 50 CLR 228 at 242-243. In Ex parte Bott, from 242-243, their Honours discussed the different circumstances in which a writ of mandamus would issue (for a failure "to comply with some requirement essential to [the] valid or effectual performance" of a statutory duty) and the circumstances in which certiorari would issue (for "some failure to proceed in the manner directed by law, or of some collateral defect or impropriety"). I am not persuaded the dicta from the judgment of Hayne J in Bhardwaj can be used to support the second respondent's position.
72 In my opinion, the observations of Hayne J in Bhardwaj reflected the situation before the Court in that case, and were not intended to be universally or generally applicable. In Bhardwaj there had been no order setting aside the Tribunal's first decision because the Tribunal had, in effect, recalled its own decision and re-exercised the power of review of its own motion. The question was whether it was lawfully able to do so. That very particular situation framed all of the observations made by the High Court in that case.
73 In contrast, in circumstances more akin to those in this proceeding, in Re Patterson; Ex parte Taylor [2001] HCA 51; 207 CLR 391, Gummow and Hayne JJ said at [196]:
In the absence of any evidence providing a further explanation of the reasons, or the parts of the reasons, for the respondent making her cancellation decision of 30 June, it is to be taken that she exercised her discretion under s 501(3) to cancel the prosecutor's transitional (permanent) visa on an erroneous footing. This is that, if she did cancel the visa, the legislation required there then to be given to the prosecutor, in terms of par 14 of the minute, "an opportunity to make representations seeking revocation of [that] decision". The result of this misconception as to what the exercise of the statutory power entailed was that there was, in the meaning of the authorities, a purported but not a real exercise of the power conferred by s 501(3). On that footing, prohibition and certiorari properly lay.
(Emphasis added.)
74 Further, I consider the second respondent's argument about there being no need to set aside a decision before remitting it to the repository of the power is inconsistent with its other argument that the approval has continuing effect. By this argument, the second respondent contends it is able to continue to derive all the benefits from the PBS notwithstanding the existence of an approval which is legally ineffective. Inherent in this argument must be that there has been some kind of "real performance" by the Minister of the exercise of power in s 90A(2).
75 As I have explained, how and whether the absolute propositions in Bhardwaj apply to a particular exercise of statutory power will always depend on the statutory framework involved, and the answers may well involve some complexity, including giving some legal effect to an exercise of power that is determined to have been unlawful. That is the theory of the law meeting the practice of administrative decision-making, where people rely on decision-making in a particular factual and legal context, and adjust their positions accordingly.
76 The bifurcation proposed by the second respondent between remitter and setting aside the 1 November 2017 approval is unworkable, and does not reflect the correct legal situation. The correct legal situation is that there has been an unlawful exercise of power on 1 November 2017 which, the Court has found, the scheme of the National Health Act intends will be treated as having continuing effect in fact, and some effect in law, until it is set aside by reason of the identified illegality. That may well be the basis on which the repayment provisions in s 99AA are avoided. However, there is no basis in the relevant provisions of the National Health Act, nor in the decisions to which I have referred about ascertaining the effect of unlawful exercises of a statutory power, to justify the proposition that once a Court has identified a material legal error (one which, at common law, would be characterised as jurisdictional error), the Court can or should permit the statutory power to be re-exercised notwithstanding that the factual and legal effect of the first exercise of power has not been set aside or quashed.
77 I have explained why I consider there is a sufficiently clear indication in the relevant provisions of the National Health Act that the Minister is obliged to proceed through to an exercise of the power in s 90A(2) (one way or the other), having made a positive decision under s 90B(4) to consider its exercise. That is a sufficient basis for the Court under the AD(JR) Act to make a remitter order: there remains something to be done by the Minister. Whether or not this fits neatly into the Bhardwaj language of a decision "properly regarded, in law, as no decision at all" and a duty "unperformed" does not matter for the purposes of the AD(JR) Act.
78 The AD(JR) Act addresses a variety of legal errors, some of which may affect jurisdiction and some which may not, and provides this Court with power to fashion appropriate remedies under s 16. That was, as Kenny J pointed out in Jadwan at [69]-[73], the purpose of the reforms introduced by this piece of legislation. Relevantly, her Honour stated (at [79]) that the remedies available under s 16 are "broader and more flexible than those available at common law". Her Honour then cited an extract from the reasons of Sheppard and Wilcox JJ (Fox J agreeing) in the Full Court's decision in Wattmaster Alco Pty Ltd v Button [1986] FCA 446; 13 FCR 253 at 256, which is worthwhile repeating:
Section 16(1) of the Administrative Decisions (Judicial Review) Act gives to the Court a wide discretion as to the orders appropriate to be made. The words "with effect from the date of the order or from such earlier or later date as the Court specifies", in par (a), are, in our opinion, intended to do no more than to indicate that the Court has a choice from all the available possibilities: the date of the order, an earlier date or a later date. It is true that the effect of the language used is that it is unnecessary for the Court to specify a date, if it is intended that the decision will be quashed or set aside as from the date of the order, whereas specification is necessary in other cases; but specification of a particular date is, in the latter situation, in any event essential. By contrast, in the former situation, express specification is unnecessary; the relevant date appears on the face of the order itself. Neither, we think, is anything to be derived from the circumstance that "date of the order" is first mentioned; the probable explanation of that circumstance is ease of drafting.
Having in mind what is involved in "setting aside" or "quashing" (as to which see Commissioner for Railways v Cavanough (1935) 53 CLR 220 at 225) it may, at first sight, seem strange to speak of setting at naught a decision as at a particular date. However, it is consonant with the general scope and purpose of the Act and its varied application that there may be cases in which a decision is to be set aside, and, according to ordinary understanding, to become a nullity, but in which the nullifying should nevertheless take effect from some later date. The provision of such an option provides greater flexibility than is available with a writ of certiorari, which quashes a decision ab initio … The processes of the Court when granting relief under the Administrative Decisions (Judicial Review) Act are very wide and considerations going to the date as at which an order is to take effect quite naturally fit the general scheme.
79 This approach also sits comfortably with the following statement in Jadwan by Gray and Downes JJ (at [44]):
The earlier Full Court did not hold in terms that the decision to revoke Derwent Court's approval as a nursing home was a nullity. Given that it was exercising jurisdiction under the ADJR Act, it was unnecessary for that Full Court to determine whether the error was jurisdictional or not. The grounds specified in s 5 of the ADJR Act, upon which the Court may make orders in respect of administrative decisions, are not expressed in terms of jurisdictional error. At least in some cases, those grounds include errors that are not necessarily described as jurisdictional errors. An example is the ground in s 5(1)(f), that the decision involved an error of law. See Re Minister for Immigration & Multicultural Affairs; Ex parte Applicant S20/2002 [2003] HCA 30 at [27] and [57] per McHugh and Gummow JJ. It might be thought that, in enacting s 16(1)(a) of the ADJR Act, which permits the Court to quash or set aside a decision with effect from the date of the order or from such earlier or later date as the Court specifies, parliament was acting on the assumption that even a decision tainted by jurisdictional error could have some force and effect, and leaving it to the Court to decide what force and effect should be accorded to such a decision. It must also be clear that, to the extent to which s 5 of the ADJR Act confers jurisdiction in respect of a 'decision', it was intended that there should be jurisdiction, whether or not the decision concerned was subject to jurisdictional error. See Australian Broadcasting Commission Staff Association v Bonner (1984) 2 FCR 561 at 566 per Morling J and Seventh Mingcourt Pty Ltd v Lawrence (1996) 64 FCR 367 at 375 per Branson J. Similar conclusions have been reached in cases concerned with merits review of a 'decision' for the purposes of other legislation in Collector of Customs (NSW) v Brian Lawlor Automotive Pty Ltd (1979) 24 ALR 307 at 313 - 315 per Bowen CJ and 331 - 337 per Smithers J, Secretary, Department of Social Security v Alvaro (1994) 50 FCR 213 at 218 - 219 per von Doussa J (Spender and French JJ agreeing) and, in relation to an appeal to the Court on a question of law from a 'decision' of the Administrative Appeals Tribunal, in Clements v Independent Advisory Committee [2003] FCAFC 143 at [36] - [40] per Gray ACJ and North J (Gyles J agreeing).
80 See also the observations made by Kenny J in Jadwan at [68].
81 Accordingly, there is no difficulty, under the AD(JR) Act, in the Court seeing it as appropriate, given the nature of the statutory scheme of the National Health Act to which I have referred above, to make orders setting aside the approval with effect from the date of the Court's orders and not earlier, so as to preserve the efficacy in law, and not just in fact, of the 1 November 2017 approval to that point. That is precisely the kind of modification to the general law for which s 16 was intended. In my opinion, it is appropriate for the Court to expressly recognise that, notwithstanding the legal error affecting the Minister's decision, the 1 November 2017 approval has both a factual and a legal effect until it is set aside by orders of this Court. It is only on that basis that the prohibitions and limitations in Divs 2 and 3 of Pt VII of the National Health Act concerning access to, and supply of, pharmaceutical benefits can be given effect. It is also only by giving some legal as well as factual effect to an unlawful approval until it is set aside that the repayment provisions in s 99AA may be avoided. That is so even though the error is one which would be characterised at common law as going to the jurisdiction of the Minister (and cf subss 5(1)(c) and (d) of the AD(JR) Act which identify errors of this nature in any event, and might well have been relied on here).
82 The better view in my opinion, adopting the approach in Project Blue Sky, is that Parliament intended approvals under s 90A (and also s 90) to be effective, in fact and in law, unless and until set aside by a court of competent jurisdiction. That is a premise on which the scheme set out in the National Health Act can effectively operate.
83 The power has been exercised, and an approval granted: it is one which is in force, being acted upon every day, and entitling members of the public to receive pharmaceutical benefits dispensed by the second respondent. If the Minister's decision is affected by error, so that the approval should not stand because of that error (both of which are findings the Court has already made), then before there can be a further exercise of power, the current approval must be set aside. It must be deprived of its effect. The Court must send the question of the exercise of power back to the Minister for reconsideration, according to law. As I have noted, there may be some controversy at least in theory whether the Minister is obliged to decide how to exercise the power in 90A(2). I have decided the better view is that she or he is. The Court's orders will not include a mandatory order against the Minister, but as these reasons have explained, they are made on the basis that, having decided to consider whether to exercise the power in s 90A(2), the Minister is obliged to see that process, lawfully, through to its conclusion. This is the kind of flexibility in the form of orders which is made available under s 16 of the AD(JR) Act: the Court is not restricted to orders in the nature of prerogative relief, nor to the legal principles governing the making of such orders.
84 Therefore, my conclusion is that the orders setting aside the Minister's decision and remitting the matter to the Minister for further consideration should both be made in the same order, and take effect at the same time; or, technically, one immediately after the other.