Grounds of appeal 1 to 7
72 The first seven grounds in this appeal turn on the correct construction of the phrase 'for at least 70 hours each week' where it appears in the definition of 'large medical centre' in s 5(1) of the National Health (Australian Community Pharmacy Authority Rules) Determination 2011 (Cth). For the reasons that follow I do not accept the construction advanced by the appellant, MC Pharmacy. In my view, the primary judge's construction is correct, so that in order to come within the definition of 'large medical centre', a centre must operate, and have at least one prescribing medical practitioner at the centre, for at least 70 hours in every week, whether or not the week contains a public holiday. I therefore respectfully disagree with Perry and Stewart JJ on this question. I gratefully adopt, however, their Honours' comprehensive description of the factual background, the legislative scheme and the relevant provisions, and I use their Honours' defined terms in these reasons.
73 For ease of reference I will set out the key definition here:
large medical centre means a medical centre that:
(a) is under single management; and
(b) operates for at least 70 hours each week; and
(c) has one or more prescribing medical practitioners at the centre for at least 70 hours each week.
74 MC Pharmacy submits that in this context, 'week' refers to a 'week of the centre's regular, customary, normal or usual hours of opening'. It submits that if the centre's hours of opening during such weeks add up to at least 70 hours, it will fulfil the relevant criteria in the definition. If accepted, this would mean that in order for a medical centre to meet the definition, weeks containing public holidays need not be counted among the weeks where a medical centre observes those regular, customary, normal or usual hours.
75 In my view, however, the ordinary meaning of 'for at least 70 hours each week' in the definition means that to qualify as a large medical centre, the centre must operate, and have one or more prescribing medical practitioners at the centre, for 70 hours or more during every week, including weeks containing public holidays. That is because 'each' means 'every'. Contrary to a submission by MC Pharmacy, this does not involve adding to the phrase, so that 'each' is read to be 'each and every'. The latter is sometimes used by way of emphasis, but the ordinary meaning of 'each week' refers to every week.
76 That is confirmed by dictionary definitions of 'each'. The well-known warning against making a fortress of the dictionary is a salutary one, but that does not mean that dictionaries must be shunned. They can still be useful tools provided it is always understood that a word defined in a dictionary is a word defined out of its context in the legislative instrument under consideration. The Shorter Oxford English Dictionary (6th ed) defines 'each', when used as an adjective, as:
Used before a sing. noun to give the same sense in relation to individuals as does both or all before the pl. noun in relation to the category or aggregate of them (almost = EVERY, but with reference rather to the separate members).
Similarly, the Macquarie Dictionary (8th ed) defines 'each' as:
every, of two or more considered individually or one by one: each stone in the building.
In my view, these definitions confirm the understanding of the meaning of the word which a reasonable speaker of English would have, when used in its context in the definition of 'large medical centre', in the place which that definition in turn occupies in the 2011 Rules.
77 In oral submissions, senior counsel for MC Pharmacy acknowledged that 'each' and 'every' could be synonyms. But she went on to submit that it is also necessary to understand what group of things the word 'each' is being applied to. Her submission was that here, it is necessary to identify 'which kind of week one is speaking of'. The difficulty I have with that submission is that in the absence of any contrary indication in the text, there is no need to identify any particular kind of 'week' to which the definition refers. The adjective used gives the answer already: it is speaking of each week, that is, every week. While a qualification to the ordinary meaning of 'week' could appear in the text expressly, or from the text by implication, here such qualification is not only absent, it is contradicted by the use of the word 'each'.
78 As a result I do not consider that the phrase 'for at least 70 hours each week' is reasonably capable of more than one meaning. That is so when the phrase is understood, as it must be, in its context in the 2011 Rules and the legislative scheme as a whole, and by reference to the purpose of the 2011 Rules, including as discerned from admissible extrinsic material.
79 This is not to deny that there may be constructional choices in the definition, considered in context and as a whole. For example there may be room for doubt about what 'operates' means in the context of the definition. That is reflected in the primary judge's acceptance (at Choice Pharmacy (No 1) at [63]) that the phrase 'operates at least 70 hours each week' is capable of bearing more than one meaning. There may also be room for doubt about what a 'week' means: does it mean a period of Monday to Sunday, or Sunday to Saturday, or any seven day period? But no such questions arise in this appeal. MC Pharmacy's position was that, whatever the answers to those questions were, the phrase 'for at least 70 hours each week' only captures a regular, ordinary or normal week, not being a week in which there were one or more public holidays.
80 I simply cannot identify that limitation anywhere in the text of the 2011 Rules. It is not express, implied or otherwise dictated by context. It is unlikely to have been the legislative intention, because if the appellant's construction is accepted, and the phrase 'for at least 70 hours each week' is taken only to capture a 'week of the centre's regular, customary, normal or usual hours of opening', then any week which contained one or more public holidays would be excluded from that definition. If so, then even a medical centre which closes for a whole week when the week contains a public holiday, and so may be closed for seven or more weeks a year, would still be a 'large medical centre'. If that is not the legislative intention, then some way of determining the minimum hours of opening in such 'non-regular' weeks must be ascertained. That no such minimum can be derived from the 2011 Rules suggests that the qualification to the meaning of 'each week' for which MC Pharmacy contends is also not inherent in the 2011 Rules.
81 Nor does the limitation emerge after consideration of the purpose of the 2011 Rules as a whole or the purpose of item 136 itself. In Walkerden v Wodonga Pharmacy Pty Ltd [2015] FCA 273; (2015) 230 FCR 243 at [62], Mortimer J identified the twin themes of the objectives of the 2011 Rules as being 'a sustainable and viable community pharmacy network (which focuses at least as much on the interests of pharmacy owners as on the community) and access to pharmaceutical benefits (with a focus only on the community's interests)'. But as Mortimer J went on to observe (at [62]-[63]), the 2011 Rules attempt to balance community access with commercial sustainability. They are objectives which, at least sometimes, may be in tension. To permit many pharmacies to open near to each other in a particular area may by itself improve the community's access to pharmaceutical benefits. But to permit too many pharmacies to open in an area may adversely affect the commercial viability of some or all of those pharmacies and so jeopardise the continuity of supply of pharmaceutical benefits.
82 That tension is reflected in the text of the 2011 Rules. I agree with Perry and Stewart JJ that the definition of 'large medical centre' has a substantive operation. Its place in the 2011 Rules must be considered to ascertain what purpose or purposes it serves. It derives its operation from item 136. Part 2 of Sch 1 to the 2011 Rules, in which that item is found, contains various other items which set out how proposed premises can comply with what Mortimer J in Walkerden referred to as the location rules. The simplest of the requirements applicable to applications not involving cancellation of an existing approval, item 131, effectively means that proposed premises comply with the location rules, without more, if they are 10 km away by the shortest lawful access route from the nearest approved premises. The other items in Part 2 of Schedule 1 permit proposed premises to be approved even though they are closer to approved premises, if additional criteria are met.
83 It may be inferred from this that one purpose of the 2011 Rules is to support the commercial viability of suppliers of pharmaceutical benefits by ensuring a minimum distance between approved premises, thus avoiding what could be viewed as an excessive concentration of pharmacies in a given area. But there are various criteria which, if fulfilled, permit the reduction of the distance requirements as between two pharmacies, or lifting them altogether. The 70 hours each week criteria found in paragraphs (b) and (c) of the definition read with item 136 are instances of this. For example, if those criteria and all others are met, then the proposed premises may be approved regardless of how far away they are from approved premises in a small shopping centre (that being the situation here).
84 It follows that while the 70 hours per week criteria may be present in the 2011 Rules in order to promote community access to pharmaceutical benefits, in context the decision to set the threshold at 70 hours reflects a legislative choice about the balance to be struck between that and potentially competing purposes. The text thus confirms what Mortimer J also found in the extrinsic material relevant to the 2011 Rules, that 'the location rules are an attempt to balance community access with commercial sustainability' (Walkerden at [62]). This reflects the reality that legislation will often seek to balance competing purposes. In New South Wales Aboriginal Land Council v Minister Administering the Crown Lands Act [2016] HCA 50; (2016) 260 CLR 232 at [92]-[93] Gageler J observed (most citations removed):
The principle that beneficial legislation is to be construed beneficially is a manifestation of the more general principle that all legislation is to be construed purposively. Application of that more general principle to New South Wales legislation is mandated by the requirement of s 33 of the Interpretation Act 1987 (NSW) that a construction that would promote the purpose or object underlying the Act is to be preferred to a construction that would not. Neither in its general application nor in its particular manifestation can that principle be applied other than on the understanding that legislation 'rarely pursues a single purpose at all costs' and that '[u]ltimately, it is the text, construed according to such principles of interpretation as provide rational assistance in the circumstances of the particular case, that is controlling'.
Evidently employing 'legislative intent' as an orthodox expression of the constitutional relationship that exists between an enacting legislature and a court doing its best to extract and articulate the meaning of an enacted text, the Supreme Court of the United States warned of the danger of overzealous or insufficiently nuanced purposive construction when it stated in Rodriguez v United States (1987) 480 US 522 at 526 (emphasis in original):
Deciding what competing values will or will not be sacrificed to the achievement of a particular objective is the very essence of legislative choice - and it frustrates rather than effectuates legislative intent simplistically to assume that whatever furthers the statute's primary objective must be the law.
85 Even if the principal focus of the 2011 Rules is on 'the community's need for adequate and sustainable access to pharmaceutical benefits' (see Walkerden at [13]), it does not follow that anything that increases access promotes achievement of the objectives of the rules considered as a whole. I therefore consider that the ordinary meaning of the text of s 5 is a surer guide to the legislative purpose than any one of the twin themes, considered at a higher level of generality.
86 The prescriptive nature of the provisions of the NHA which give effect to the 2011 Rules, and of the 2011 Rules themselves, lend further support to the primary judge's construction. Section 90(3A) of the NHA provides that, subject to certain exceptions which are not relevant, an application to the Secretary under s 90 for approval to supply pharmaceutical benefits at particular premises must be referred to the Authority. Section 90(3B) gives the Secretary no discretion in favour of granting approval, as it provides that approval may be granted in respect of an application that has been referred to the Authority only if the Authority has recommended the grant of the approval. The Secretary may, however, refuse to grant an approval even if the grant has been recommended by the Authority.
87 In making a recommendation, the Authority must comply with the 2011 Rules: s 99K(2). The 2011 Rules themselves provide little apparent scope for the Authority to exercise discretion. Under s 10, the Authority must recommend that an applicant be approved if, relevantly, all the requirements of the relevant item in Sch 1 are met (and other requirements are met as well). Conversely, the Authority must recommend that an applicant not be approved if any such requirement is not met: s 11. If the Authority does recommend approval, however, it may also recommend conditions to which the approval should be subject: s 99K(1)(b)(ii).
88 The items in Sch 1 contain numerous specific requirements. For some of the requirements, the Authority need only be 'satisfied' of them, but for others the requirement is stated categorically. Item 136, the one in issue here, is an example: item 136(4) requires the Authority to be satisfied as to the number of PBS prescribers at the medical centre, whereas item 136(1) requires categorically that the premises are to be in a large medical centre.
89 There are many other instances in Sch 1 of such specific and categorical requirements. For example, if an applicant relies on item 134, which relates to proposed premises in a large shopping centre, it will be necessary to establish, among other things, that the centre has a gross leasable area of at least 5,000 m2 and that it contains at least 50 other commercial establishments: see the definition of 'large shopping centre' in s 5. While one may wonder why it would promote the purpose of access to pharmaceutical benefits to require the Authority not to approve an application for proposed premises in a shopping centre with a gross leasable area of 4,999 m2 and 49 other commercial establishments, the text leaves no room to permit such a minor departure from the criterion. There are also specific rules about what is, and is not, a 'commercial establishment' for the purposes of the definitions of 'small shopping centre' and 'large shopping centre' as used in items 133 and 134: s 7. So, for example, a 'bar, café, restaurant or takeaway' is a commercial establishment but a 'car wash or car parking facilities' are not.
90 There is no need to multiply the examples further. The prescriptive nature of the 2011 Rules does not, of course, determine the content of the definition of 'large medical centre'. But it does suggest that there is no intention to build flexibility into the definition. A construction of the definition of 'large medical centre' which requires 70 hours each week to be ascertained by the simple reckoning of standard measures of time, namely the hour and the week, is consistent with the approach reflected in the 2011 Rules as a whole.
91 The countervailing argument, that the apparent strictness of the 2011 Rules requires them to be read flexibly in order to avoid unreasonable consequences, cannot accommodate provisions like the shopping centre criteria described above. In my view there is much to be said for a submission advanced on behalf of the Choice Pharmacy that it is the discretion conferred on the Minister by s 90A of the NHA which provides for amelioration of the prescriptive rules if they operate harshly or lead to absurdity in particular cases.
92 In any event, no absurdity or harshness follows from the primary judge's construction of 'at least 70 hours each week' here. MC Pharmacy sought to demonstrate absurdity by pointing to the need for a medical centre to be open for 23.3 hours a day in a week containing Easter, assuming that contains four public holidays leaving only three opening days, or 17.5 hours a day if it contains three public holidays leaving four opening days. But that difficulty arises only if it assumed that the centre does not open on public holidays. There is no basis in the 2011 Rules to make that assumption. To the contrary, the intent of the definition, which is evident from its terms and confirmed by the Explanatory Statement which Perry and Stewart JJ quote at [61] above, is to provide access to pharmaceutical benefits in a large medical centre outside the ordinary business hours of other pharmacies that may be nearby. This suggests that opening on at least some public holidays may be necessary.
93 MC Pharmacy submitted that even where a medical centre closes for one public holiday in a week, it could meet the 70 hours each week requirement by opening for the irregular time of 11.6 hours each other day. This led to a submission that the only centre that would come within the definition, construed in the way favoured by the primary judge, would be one that is open on all public holidays or is open 24 hours a day, seven days a week. But that does not follow. For example, a centre that closes one day a week (public holiday or not) and is open 12 hours on the other six days would qualify. There is nothing irregular about those hours and there is no requirement in the 2011 Rules, or common sense, that the centre operate for precisely 70 hours and no more. Many more sensible combinations are possible. I do not accept MC Pharmacy's argument as to absurd and unintended consequences.
94 MC Pharmacy submitted that if the 70 hours a week requirement applies to every week, then the construction would need to take account of circumstances where the medical centre may need to close temporarily for unforeseen contingencies, for example if a practitioner at the centre contracts the novel coronavirus. That is correct. But the primary judge's construction accommodates such contingencies, not by reading in a qualification to the term 'each week', but by a proper understanding of what it means to say that the centre 'operates' (paragraph (b) of the definition) or 'has' one or more prescribing practitioners (paragraph (c)) for 70 hours per week. Using verbs of that kind which connote continuous states of affairs, and using them in present tense, directs attention to the present practice or intentions of the centre's management. It is not necessary for the purposes of this appeal to determine over what period of time the practice or intentions need to be assessed. Whatever the correct period, departures from the practice or intention of the centre's management for unavoidable contingencies will not mean that the practice and/or intention is not there at the time the Authority determines whether the application accords with the 2011 Rules. In my view, that is what the primary judge identified when, in Choice Pharmacy (No. 1) at [67], her Honour referred to the need for the evidence before the Authority to demonstrate the 'ordinary and habitual hours in which the medical centre operates and a prescribing medical practitioner will be in attendance'.
95 MC Pharmacy also developed a submission that the reference to hours per week had a 'trade meaning' which excluded public holidays. That was based on what MC Pharmacy said was a common understanding of ordinary hours of work for individuals, as excluding public holidays. But that is a different matter. The point of a public holiday is that it will be a holiday - time not spent at work - for a large subset of the public. It is therefore inevitable that concepts of ordinary working hours for individuals will need to accommodate public holidays. In contrast, the point of requiring a large medical centre to operate and have prescribing medical practitioners present for at least 70 hours per week is to ensure that it provides pharmaceutical benefits outside standard opening hours for most other businesses, and by extension outside normal working hours for individuals. That is confirmed by the Explanatory Statement. On any view, 70 hours is a substantial increase on 'normal' business hours of, say, 9.00 am to 5.00 pm, five days a week. Whether or not there is a general or 'trade' understanding of normal working hours, it does not assist in the construction of the definition of 'large medical centre' because the subject matter and purpose of the definition is different.
96 In my view, this is a case where the text of the key phrase is grammatically capable of only one meaning, neither the context nor any purpose of the legislation throws any real doubt on that ordinary meaning, and applying that meaning does not lead to any manifestly absurd or unreasonable result: see Saraswati v The Queen (1991) 172 CLR 1 at 22 (McHugh J). I would therefore dismiss ground 1. Since, as Perry and Stewart JJ have indicated, grounds 2 to 7 depend on ground 1 being upheld, I would dismiss those too.