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[2015] FCA 273
Federal Court of Australia
2015-03-27
Mortimer J
Original judgment source is linked above.
Counsel for the Applicants: Mr M J Hoyne
Solicitor for the Applicants: Best Hooper Solicitors
Counsel for the First Respondent: Mr D M Favell
Solicitor for the Second Respondents: Australian Government Solicitor
IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY GENERAL DIVISION VID 470 of 2014
JUDGE: MORTIMER J DATE OF ORDER: 27 MARCH 2015 WHERE MADE: MELBOURNE
JUDGE: MORTIMER J DATE OF ORDER: 27 MARCH 2015 WHERE MADE: MELBOURNE
THE COURT ORDERS THAT:
IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY GENERAL DIVISION VID 470 of 2014
JUDGE: MORTIMER J DATE: 27 March 2015 PLACE: MELBOURNE
INTRODUCTION AND SUMMARY 1 For reasons which are explained below, these two proceedings were heard and determined together. The applicants operate pharmacies close to the premises on which the first respondent, Wodonga Pharmacy, sought and received approval to open its pharmacy. At their request, the applicants were joined as parties to the first respondent's review application before the Administrative Appeals Tribunal. The second respondent in proceeding VID 470 of 2014, the Australian Community Pharmacy Authority, was the contradicting party before the Tribunal. Following the first respondent's success before the Tribunal, Ms Walkerden and Mr Sanghvi appealed to this Court pursuant to s 44 of the Administrative Appeals Tribunal Act 1975 (Cth) (proceeding VID 470 of 2014). After the s 44 appeal was commenced, they sought and were granted leave to make an application out of time under the Administrative Decisions (Judicial Review) Act 1977 (Cth) (proceeding VID 542 of 2014) to challenge a subsequent decision made by the Secretary to the Department of Health, the second respondent in the latter proceeding, under s 90 of the National Health Act 1953 (Cth) to approve Wodonga Pharmacy to supply pharmaceutical benefits. 2 Thus, even if the applicants succeed on their s 44 appeal, this will be but a pyrrhic victory for them unless they succeed in proceeding VID 542 of 2014 in having the Secretary's subsequent approval set aside. 3 For the reasons which follow the s 44 appeal should be dismissed. The dismissal of that appeal means there is no basis for the relief claimed under the AD(JR) Act.
BACKGROUND FACTS AND PROCEDURAL HISTORY 4 Wodonga Pharmacy made an application to the Secretary for an approval under s 90 of the National Health Act 1953 (Cth) to supply pharmaceutical benefits from particular premises in the White Box Rise Shopping Centre in Wodonga. The Secretary referred the application to the Authority, as required under s 90(3A). The Authority's statutory task, under s 99K of the Act, was to make a recommendation to the Secretary whether an approval under s 90 of the Act to conduct a pharmacy should or should not be granted. 5 Section 10 of the National Health (Australian Community Pharmacy Authority Rules) Determination 2011 (Cth) imposed a duty on the Authority to recommend that an applicant be approved where particular requirements are met. The presently relevant requirements are those in Item 133 of Pt 2 of Sch 1 to the 2011 Rules, which deals with an application for a new pharmacy to be operated from a "small shopping centre". The proper construction of the phrase "small shopping centre" and its application in the Tribunal's decision on review are two of the issues arising in the s 44 appeal. 6 On 26 July 2013, the Authority recommended that Wodonga Pharmacy's application not be approved. Wodonga Pharmacy applied for review to the Tribunal under s 105AD(2)(a) of the National Health Act. On 18 July 2014, the Tribunal set aside the decision of the Authority and, in its place, recommended that Wodonga Pharmacy be approved under s 90. The Secretary subsequently granted an approval under s 90 to Wodonga Pharmacy on 30 July 2014. 7 On 14 August 2014, the applicants lodged an appeal under s 44 of the AAT Act to this Court, in respect of the Tribunal's decision. Having recognised that any success in the s 44 appeal would be insufficient given the Secretary had granted an approval under s 90, the applicants then issued proceedings under the AD(JR) Act to have the Secretary's approval decision set aside. Those proceedings were issued on 17 September 2014 and were out of time under s 11 of the AD(JR) Act. There was no opposition to an extension of time being granted to the applicants, nor to that application being heard and determined together with the s 44 appeal. 8 Both Wodonga Pharmacy and (jointly) the Authority and the Secretary filed written submissions in advance of the hearing and their respective counsel developed those orally at the hearing. The Authority and the Secretary appeared, noting the restraints imposed by R v Australian Broadcasting Tribunal; Ex parte Hardiman (1980) 144 CLR 13 at 35-36, to assist the Court in terms of the operation of the legislative scheme and to make submissions about the proper construction of those aspects of it in issue. None of the parties objected to the Authority or the Secretary's participation in that way, and indeed the Authority and the Secretary's joint submissions were helpful. I have considered the written and oral submissions, and refer to them in these reasons where necessary.
RELEVANT LEGISLATIVE PROVISIONS 9 Section 90 of the National Health Act empowers the Secretary to grant approvals to a pharmacy, but in most circumstances only after a positive recommendation from the Authority. Section 90 relevantly provides: 90 Approved pharmacists (1) Subject to this section, the Secretary may, upon application by a pharmacist for approval to supply pharmaceutical benefits at particular premises, approve that pharmacist for the purpose of supplying pharmaceutical benefits at those premises. … (3A) Subject to subsections (3AA) and (3AE), an application under this section must be referred to the Authority. (3AA) Subsection (3A) does not apply to an application for an approval arising out of a change in the ownership of a pharmacy situated at particular premises if the change results or resulted from: (a) the sale of the pharmacy; or (b) the acquisition, following the death of a person who was the owner or one of the owners of the pharmacy, of that person's interest in the business of the pharmacy; or (c) a change in the constitution of a partnership that owned the pharmacy; if the pharmacy is to continue to operate at the same premises. … (3AE) Subsection (3A) does not apply to an application for an approval if: (a) the application arises out of an expansion or contraction of particular premises (the original premises) at which a pharmacy is situated; and (b) the expanded or contracted premises occupy any of the space occupied by the original premises. … (3B) An approval may be granted under this section in respect of an application that has been referred to the Authority under subsection (3A) … only if the Authority has recommended the grant of the approval, but the Secretary may refuse to grant an approval even if the grant has been recommended by the Authority. … (3D) The Secretary must not grant approval under this section to a pharmacist in respect of particular premises if the Secretary is satisfied that on or after the day the approval would otherwise be granted: (a) the pharmacist would be unable to supply pharmaceutical benefits at the premises; or (b) the premises would not be accessible by members of the public for the purpose of receiving pharmaceutical benefits at times that, in the opinion of the Secretary, are reasonable. … (5AA) If, under this section, a pharmacist is granted approval to supply pharmaceutical benefits at particular premises, the pharmacist may also supply pharmaceutical benefits from those premises. … 10 The Authority's functions are set out in s 99K(1) and are described thus: 99K Functions (1) The functions of the Authority are: (a) to consider applications under section 90; and (b) to make, in respect of an application under section 90: (i) a recommendation whether or not the applicant should be approved under that section in respect of particular premises; and (ii) if an approval is recommended - recommendations as to the conditions (if any) to which the approval should be subject … 11 Section 99K(2) requires the Authority, in making a recommendation, to "comply with the relevant rules determined by the Minister under section 99L". 12 Thus, much of the substantive content governing the approval and non-approval of applications to supply pharmaceutical benefits from particular premises is left by the legislative scheme to be done in the 2011 Rules. What is apparent from the terms of s 90 to which I have referred is that the scheme is location-based. This point was made, for different reasons and in a different context admittedly, by Jessup J in Yu v Minister for Health (No 2) [2013] FCA 367; (2013) 216 FCR 188 where his Honour said at 194 ([10]): … approvals under s 90 or s 90A are not given as benefits or emoluments to particular pharmacists. Rather, the scheme of the NH Act, relevantly, is to ensure that the community is provided with convenient access to pharmacies, conducted by appropriately qualified professionals, for the purpose of obtaining drugs and medicinal preparations which are beneficial in the treatment of sickness or disease but which may, at the same time, be harmful if not properly prescribed and dispensed. 13 Thus, in accordance with the content of the scheme as filled out by the 2011 Rules, it is the appropriateness of a new pharmacy in the particular location which is the focus of the decision-making process. As part of that focus, consideration is given to the location of other pharmacies. But the principal focus, in my opinion, is on the community's need for adequate and sustainable access to pharmaceutical benefits and a new application is to be assessed according to criteria designed to advance that objective. The terms of s 90(3D) support this view, as do the Community Pharmacy Agreements, to which I refer in more detail below. 14 The Minister's rule-making power under s 99L was used to make the 2011 Rules, aspects of which are in issue in these proceedings. By s 99L(2) a determination of rules made under s 99L(1) is a disallowable instrument for the purposes of s 46A of the Acts Interpretation Act 1901 (Cth). I note that the current equivalent of s 46A is now s 42 of the Legislative Instruments Act 2003 (Cth), and s 99L(2) should be read accordingly. There was no dispute between the parties that such rules, including the 2011 Rules, are registered as legislative instruments and should be construed accordingly: see ss 6(d)(i) (which refers expressly to the now repealed s 46A of the Acts Interpretation Act), 13 and 24 of the Legislative Instruments Act. 15 Section 10 of the 2011 Rules imposes an obligation on the Authority to recommend that an applicant be approved if certain specified requirements are met: 10 When Authority must recommend approval of applicant The Authority must recommend that an applicant be approved under section 90 of the Act in relation to particular premises if: (a) … (b) for any other application: (i) the application states that it is one of the kinds mentioned in column 2 of an item in Part 2 of Schedule 1; and (ii) all the requirements set out in column 3 of that item are met; and (iii) all the requirements set out in Schedule 2 are met. 16 The applicable item in Pt 2 of Sch 1 is Item 133. That item identifies the kind of application as a "new pharmacy in a facility (small shopping centre)". The requirements which must be satisfied are as follows: 1. The proposed premises are in a small shopping centre. 2. The proposed premises are at least 500 m, in a straight line, from the nearest approved premises. 3. There are no approved premises in the small shopping centre. 17 Relevantly, there then follows a series of definitions within definitions within definitions which is far from the most helpful drafting technique that might have been employed. 18 The phrase "small shopping centre" is defined in s 5(1) of the 2011 Rules: small shopping centre means a shopping centre that: (a) has a gross leasable area of at least 5 000 m2; and (b) contains a supermarket that occupies a gross leasable area of at least 2 500 m2; and (c) contains at least 15 other commercial establishments; and (d) has customer parking facilities. 19 The term "shopping centre" is itself defined in s 5(1): shopping centre means a group of shops and associated facilities that is under single management. 20 The term "single management" is then also defined in s 5(1): single management, for a shopping centre or medical centre: (a) means management of the centre as a whole: (i) by one manager, or by 2 or more managers working cooperatively under an agreement; and (ii) to encourage the use of the centre as a single integrated facility; and (iii) including management of the following matters for the centre: (A) security; (B) pedestrian and vehicular access; (C) cleaning; (D) signage; (E) trading hours; (F) marketing; (G) maintenance of buildings, common areas and utilities; and (b) does not include independent owners or tenants of premises in a building or centre that cooperate: (i) on particular occasions; or (ii) in relation to some, but not all, of the matters mentioned in subparagraph (a) (iii) in relation to the building or centre. 21 The proper construction of the term "commercial establishments", as part of the definition of "small shopping centre" also arises as an issue in these proceedings. That term is defined in s 7 of the 2011 Rules: (1) In this Determination, subject to subsection (2): commercial establishment means premises: (a) in a shopping centre; and (b) occupied by, or likely to be occupied by: (i) a shop where goods, food or beverages are sold retail; or (ii) a bar, café, restaurant or takeaway; or (iii) a business that provides services to customers. (2) For subsection (1), commercial establishment does not include: (a) commercial office space; or (b) premises occupied by an accountant, analyst, architect, engineer, lawyer, planner, stockbroker or surveyor, unless the premises are occupied as a shopfront; or (c) premises occupied by a real estate agent or an insurance company, agent or broker, unless the premises are occupied as a shopfront for the real estate agent or insurance company; or (d) a council office or government or statutory corporation office or shopfront, other than an Australia Post shopfront, an Australian Broadcasting Corporation shop or a Medicare or Centrelink shopfront; or (e) a car wash or car parking facilities; or (f) a library; or (g) a kindergarten or preschool; or (h) a child care centre or child minding facility, unless the centre or facility is regularly available for use by customers of the shopping centre while the customers are at the shopping centre; or (i) a storeroom or storage area; or (j) a temporary selling point; or (k) an automatic teller machine or automatic dispensing machine. (3) In working out the number of commercial establishments in a shopping centre: (a) 2 or more commercial establishments occupied by, or likely to be occupied by, one business are counted as one commercial establishment; and (b) the maximum number of shopfronts for accountants, analysts, architects, engineers, lawyers, planners, stockbrokers or surveyors that can be counted towards the total number of commercial establishments in a shopping centre is: (i) for a small shopping centre - one; or (ii) for a large shopping centre - 2. 22 It should be noted that included in the list in s 7(2) of places that are not commercial establishments are "temporary selling points". This phrase is not defined, although the Explanatory Statement referred to "temporary selling points such as those used for sales or promotions": Explanatory Statement, National Health (Australian Community Pharmacy Authority Rules) Determination 2011 (Cth), at 7.
THE TRIBUNAL'S DECISION 23 It appears from the Tribunal's reasons that Ms Walkerden was represented by her advocate, and Mr Sanghvi was represented by counsel. It also appears from the Tribunal's reasons that the principal arguments put on behalf of the objecting and existing pharmacies were put by counsel for Mr Sanghvi. In this Court, the same counsel appeared for both Ms Walkerden and Mr Sanghvi. For ease of reference, when I describe the submissions made to the Tribunal by the objecting pharmacies I shall describe them as made by "the applicants", even if it may have been the case that the submissions were made by counsel for Mr Sanghvi and adopted or endorsed by Ms Walkerden's advocate. 24 The Tribunal noted that Wodonga Pharmacy's legal right to occupy the premises from which it proposed to operate the pharmacy had been in issue, but was no longer contested. That left for determination, as the Tribunal described it, the issue whether or not the proposed premises are located in a "small shopping centre" (at [9]). The parties agreed the Tribunal had correctly identified the issue to be determined. 25 Relying on the evidence of the witness who was the Asset Manager and Lending Agent for the owner of the shopping centre and noting his evidence was not controverted in any significant way, the Tribunal found the White Box Rise Shopping Centre met the statutory definition of a "shopping centre" under s 5(1) of the 2011 Rules as a group of shops or associated facilities under single management. The critical passage of the Tribunal's reasons is the following (at [50]): While I agree with Mr Hoyne's submission that there was no evidence of managing the centre as a whole to encourage the use of it as a single integrated facility, I do not agree that is fatal to establishing that the proposed premises is in a shopping centre. In my opinion, the matters set out in (a) (ii) may become significant where the shopping centre is managed by two or more managers working under an agreement. It is less significant where the entire shopping centre is managed by one manager. Unless there was evidence to the contrary, in such a case it is logically in the interests of the manager to encourage the use of the centre as a single integrated facility. There was no evidence to the contrary. 26 The Tribunal then considered whether the centre was a "small shopping centre". It noted of the four requirements in s 5(1) of the 2011 Rules, there was no dispute as to two of them: namely, that the Woolworths supermarket occupied a gross leasable area of at least 2,500 m², and that the shopping centre had parking facilities. The dispute between the Wodonga Pharmacy and the Authority (and the applicants) centred on the remaining two requirements: whether there were "at least 15 other commercial establishments" and whether the centre had a "gross leasable area of at least 5 000 m²". 27 The Tribunal noted the requirement of the total area of the centre could only be met if the Caltex service station was included as part of the shopping centre, relying on the evidence of the Asset Manager and Lending Agent that without it the gross leasable area would be only 4,968 m2. The Tribunal found the Caltex service station, which was situated immediately adjacent to the building housing the Woolworths supermarket, was in the shopping centre, and was a commercial establishment for the purposes of the 2011 Rules. This finding was not the subject of any challenge on this appeal. 28 The Tribunal's finding about the second disputed requirement - whether there were "at least 15 other commercial establishments" - is the critical finding for the purposes of the applicants' contentions on the s 44 appeal. 29 Wodonga Pharmacy had identified 18 tenancies which it contended were relevant to satisfy this requirement, excluding the Woolworths supermarket. The Authority and the applicants did not dispute that seven of them (aside from the Woolworths supermarket and the Caltex service station) satisfied the definition of "commercial establishment". As to the remainder, there were three objections: first, that some premises were "temporary selling points" for the purposes of the 2011 Rules and should be excluded; second, that one premises could not be said to be "occupied or likely to be occupied" as required under the definition of "commercial establishment"; and third, that several sets of premises were not separate establishments. 30 At [73] of its reasons the Tribunal noted the contention made in closing submissions by the applicants that Dorevitch Pathology might be described as a "temporary selling point", and set out the remaining premises in contention as follows: 1. Temporary selling point DVD Warehouse Discount Cosmetics Clearance Centre Cubano Facewear 2. In or likely to be in occupation Dorevitch Pathology 3. Separate establishments Harry's Espresso and Harry's Pizza Palace Sprinkle's Ice Cream Parlour and Crav'N Dine In and Take Away Woolworths and Caltex service station 31 Noting that the term "temporary selling point" is not defined in the 2011 Rules, the Tribunal did not construe the term in a way which focused on whether the business conducted at a particular premises could be described as temporary, or being conducted temporarily from the premises. Rather, it found (at [82]) that "[t]he focus should be on the premises, and whether that structure can be described as temporary or permanent." The Tribunal found (at [84]) this approach was also consistent with the requirement in the 2011 Rules that the premises be "occupied" or "likely to be occupied" by a business, because that requirement contemplates at the time of assessment of an application a premises might in fact be empty. At [89] of its reasons, the Tribunal concluded that the word "likely" in the phrase "likely to be occupied" was "used to convey the notion of a substantial and a real and not remote chance that the premises will be occupied by the kind of businesses described therein". This construction is also challenged on the appeal. 32 Having taken that approach, the Tribunal rejected (at [90] and [91]) submissions by the applicants that it should examine the "long-term business intentions" of occupiers of the premises, and commercial and ownership linkages between some of the businesses and the individuals sitting behind Wodonga Pharmacy. 33 Those findings dealt with two of the three premises said by the applicants to be ineligible as "temporary selling points". As to third, the "DVD Warehouse", which operated out of what the Tribunal described as a "kiosk", the Tribunal applied the construction it had decided was applicable and made (at [96]) the following findings of fact: While the kiosk housing the DVD Warehouse appears to have been constructed at minimal expense and has a rather plain appearance, it is nevertheless a structure occupying leasable floor space in the shopping centre. Furthermore, it appears to be occupied and goods appear to be sold or rented from the kiosk. While it may not have the permanent appearance of the other shops in the shopping centre which are partitioned structures within the large building or discrete shops in the second building, it would, in my opinion, be wrong to classify it as a temporary selling point. It is not a structure which can be readily folded up and put away or removed readily. It has a degree of permanency. I find that it satisfies the description of a commercial establishment for the purposes of s. 7 of the rules. 34 The applicants' contention about the relationship between some of the businesses in different premises flowed through to their contention whether certain premises could be considered "separate" commercial establishments for the purposes of the definition, given that subs (3)(a) provided that where two or more commercial establishments are occupied or likely to be occupied by "one business", they were to be counted as one commercial establishment. This submission was also made in relation to the Woolworths supermarket and the Caltex service station, both of which were owned by Woolworths. 35 In respect of this submission, the Tribunal first concluded (at [102]) that, read in the context of subs (1) (referring, as the Tribunal noted, to "premises in a shopping centre occupied by, or likely to be occupied by a shop, a bar, café, restaurant or takeaway, or a business providing services to customers; each of them conducting particular business activities"), the expression "one business" in subs (3)(a) is referring to business activities rather than a business entity. 36 The Tribunal then spent some considerable time examining whether the contested businesses could be considered "separate" commercial establishments in its reasons. It looked at the extrinsic material concerning the introduction of the 2011 Rules, in particular the Explanatory Statement, as well as the Urbis report produced as part of the review leading to the 2011 Rules (discussed further below). 37 The Tribunal reached several conclusions on the construction of this aspect of the 2011 Rules. At [110]-[112], it found that where the Explanatory Statement (at 7) refers to s 7(3) and states that "each commercial establishment must be independent of another", the kind of "independence" contemplated concerns identifying businesses which will attract "the maximum number of consumers possible". Placing some reliance on other aspects of the Explanatory Statement, including what it saw as the objects of the 2011 Rules as gleaned from the Explanatory Statement, it concluded (at [115]): The first point I should make is that simply because two discrete premises have internal access to each other does not necessarily destroy their independence. The fact that those premises are occupied under discrete lease agreements is, in my opinion, of some significance. It perhaps becomes more significant when the business activities conducted in each of those premises are of a different nature. Where the business activities themselves are different, one can more readily accept that they will attract additional consumers to the shopping centre. Were they conducting the same business activities as is given in the first example of the Explanatory Statement, then that clearly would not be the case. The fact that each of two adjoining businesses has the same business operator does not necessarily indicate that those businesses are not independently operated. While such a case is not the subject of an example given in the Explanatory Statement, the reason may be that, in focusing on whether the arrangement might attract additional consumers to the shopping centre, that fact alone may not have a significant impact. 38 The Tribunal then applied this approach to four of the businesses concerned, noting they had discrete leases and engaged in diverse business activities which, despite an overlap in that each concerned the supply and sale of food and drinks, involved "its own distinct cuisine, no doubt designed to attract particular customers" (at [118]). It rejected the applicants' proposition that the way the commercial establishments are operated from an "internal viewpoint" affected the characterisations. Here, the Tribunal was referring to evidence on the review that these businesses adjoined each other and had common access and that there were some commonalities in terms of the ownership or operating structures of some of the businesses. 39 The Tribunal then applied similar reasoning to the applicants' contentions about the supermarket and the service station. It said (at [124]): I cannot accept Mr Hoyne's submission regarding these two business activities. That is because of the significantly different mainstream operations which they conduct. Those operations are each likely to attract different customers to the shopping centre as well as those who are attracted to the shopping centre by both operations. Persons using the supermarket will not necessarily also use the service station and vice versa. It is foreseeable that customers attracted to the service station simply because they need fuel may also avail themselves of the opportunity to shop at retail outlets other than the supermarket. 40 The Tribunal summarised its conclusions on these contentious issues at the end of its reasons in the following way (at [134]-[135]): The most contentious issue in this case was the question whether the shopping centre contained at least 15 other commercial establishments. I have found that it does meet that requirement. I have found that the expression temporary selling point is a reference to premises where the requisite business activity is conducted or likely to be conducted but which is expressly excluded by reason of s. 7(2)(j) of the Rules. It is not a reference to the business activity conducted at particular premises. I have found that Discount Cosmetics Clearance Centre, Cubano Facewear and Dorevitch Pathology are not temporary selling points. Nor is the kiosk from which DVD Warehouse operates a temporary selling point. The most difficult aspect of the Rules is the application of s. 7(3)(a). By applying what I understand to be the purpose or object of this particular subsection, I have found that Harry's Espresso and Harry's Pizza Palace are independent commercial establishments for the purpose of the Rules. So too are Sprinkles Ice Cream Parlour and Crav'N Dine In And Take Away. I have also found that the Woolworths supermarket and the Caltex service station should not be treated as one commercial establishment, but rather, they are independent commercial establishments. 41 The one other finding of the Tribunal which bears on the issues in the appeal relates to what is described in the Notice of Appeal as an "evidentiary onus" said to be imposed on an applicant under s 90 of the National Health Act. The applicants submitted that there was an evidentiary onus on an applicant for approval to supply sufficient material to meet each of the requirements. 42 Relying on McDonald v Director-General of Social Services (1984) 1 FCR 354, the Tribunal rejected this contention, and went on to find (at [67]) that these Rules did not compel an applicant to produce anything at all (noting, I infer by its citation of an extract from Woodward J's judgment at 357 of McDonald, that this may mean an applicant might fail on review).
THE SECTION 44 APPEAL AND THE AD(JR) ACT APPLICATION 43 The applicants' s 44 appeal identified the following seven questions of law: 1. Is there an evidentiary onus on an applicant for approval to supply pharmaceutical benefits under s 90 of the National Health Act 1953 (Act) in relation to the matters that must be satisfied under the Act and the National Health (Australian Community Pharmacy Authority Rules) Determination 2011 (Cth) (Rules)? 2. In determining whether premises are under "single management" for the purposes Rules what are the relevant factors for the decision maker to take into account and does the decision maker have to take into account the matters set out in sub-paragraphs (a)(ii) and (a)(iii) when there is one manager or is that only relevant where there are two or more managers? 3. What is the proper construction of "temporary selling point" for the purposes of the Rules? 4. What are the relevant factors to take into account in determining whether premises are a "temporary selling point" for the purposes of the Rules? 5. What is the proper constructions of "likely to be occupied" for the purposes of the Rules? 6. What are the appropriate factors to take into account in determining whether a business (or businesses) constitutes one or more "commercial establishments" for the purposes of the Rules? 7. In determining whether commercial establishments are separate, should the decision maker take into account the number of business activities or the nature of the business or the business entity? 44 No issue was taken by the respondents in proceeding VID 470 of 2014 that the questions as articulated were not questions of law as that term is to be understood in s 44 of the AAT Act. It can be seen that two of the questions dealt with construction issues: namely, the proper construction of the phrase "temporary selling point" (question 3) and the proper construction of the phrase "likely to be occupied" (question 5). Four questions dealt with what considerations were legally relevant to the determination of various aspects of the 2011 Rules: namely, the application of the phrase "single management" (question 2), the application of the phrase "temporary selling point" (question 4), and then two questions concerning the determination of whether commercial establishments are separate for the purposes of s 7(3) of the 2011 Rules (questions 6 and 7). Finally, there was a question concerning the existence of an evidentiary onus on an applicant under s 90 of the National Health Act (question 1). I am satisfied the Court has jurisdiction under s 44 of the AAT Act to deal with the appeal on this basis. 45 In the applicants' written outline of submissions, the "issues" on the appeal were identified differently: (a) Is there any requirement on an applicant under s 90 of the Act to lead evidence in support of his or her application? (b) In considering the proper construction of the definition of "single management", is there an onus on a respondent to demonstrate that the requirements are not met where there is only one manager? (c) What is the proper construction of "temporary selling point" under the Rules? (d) In calculating the number of commercial establishments, what factors are relevant in determining whether two (or more) operations are, in fact, part of the same business or commercial establishment? 46 No point was taken by the respondents in proceeding VID 470 of 2014 about these differences. In my reasons, I have attempted to deal with the issues as they arise from both the questions of law in the notice of appeal, and the "issues" as they were developed in argument. In my view, the same legal matters arise for decision in any event. 47 Although the notice of appeal sought substitution of the Tribunal's orders if successful, it is apparent that success on any of these errors as alleged would require a further decision on the merits of the application and remitter would be appropriate. 48 The application under the AD(JR) Act hinged, as I have observed, on success in the s 44 appeal such that the Tribunal's recommendation to the Secretary could be said to have been made unlawfully, or without jurisdiction (without presently embarking on a discussion about the differences between those two terms). In that case, the applicants contended, an essential precondition to the Secretary's approval would be absent, and the decision of the Secretary would need to be set aside. The legal representative of the Secretary conceded this analysis would be correct if the recommendation was unlawful, or made without jurisdiction. The parties accepted a determination would need to be made under s 16(1)(a) of the AD(JR) Act about the time at which the Secretary's decision should be set aside, given Wodonga Pharmacy had been operational in the interim, and had been supplying pharmaceutical benefits to the public. 49 All parties filed written outlines of submissions prior to the hearing, and developed those submissions orally at the hearing. I have considered the submissions made, and I refer to them below where necessary.
The purpose of the 2011 Rules 50 The 2011 Rules themselves contain no statement of purposes. There is nothing in the determination or rule-making power, s 99L of the National Health Act, which indicates any general or specific purpose to attach to the making of determinations under that provision. 51 All parties submitted the Court can and should examine the extrinsic material to which the Tribunal referred in its reasons, especially at [103]-[110]. The principal sources to which the Tribunal referred were the Explanatory Statement accompanying the 2011 Rules, and a report by private consultants, the Urbis report of June 2010 titled "Review of the Pharmacy Location Rules under the Fourth Community Pharmacy Agreement". The Urbis report was produced as part of a government review which led to the 2011 Rules. 52 The Explanatory Statement to the 2011 Rules refers to the Urbis report, and the Government's acceptance of the recommendations made in it. None of those particular recommendations has any bearing on the aspects of the 2011 Rules in dispute in the s 44 appeal. 53 The applicants did rely on what was said in the Explanatory Statement about the concept of "single management" (at 5): "single management" - for a shopping centre or medical centre means one or more managers that are cooperatively managing the centre (under an agreement) as a whole, for the purpose of encouraging the use of the centre as a single integrated facility. It would include managing the security, pedestrian and vehicular access, cleaning, signage, trading hours, marketing and maintenance of buildings, common areas and utilities, for the centre. Single management does not include owners or tenants that cooperate only on particular occasions or only in relation to some (not all) of the matters described above. For example, a group of shop owners in a shopping arcade might only cooperatively manage the promotion of the arcade over the Christmas shopping period or they may cooperatively manage the arrangements for cleaning and maintenance of the arcade, however, each owner individually manages the marketing and trading hours of their own shop. In these circumstances, the requirement of single management would not be met. 54 The applicants also relied on what was said in the Explanatory Statement about the concept of "commercial establishment" (at 6-7): Section 7 makes clear that the meaning of "commercial establishment" is intended to include those premises from which businesses will provide goods and/or services to consumers. It is intended that these types of businesses would attract consumers to a shopping centre. Subsection 7(1) describes those types of business which the term "commercial establishment" can include and that those businesses described do not need to be operating in order to be considered "commercial establishments" for the purpose of the Authority considering an application. 55 Resort to explanatory material such as this no longer requires identified ambiguity in the statutory language: see, for example, CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384 at 408 per Brennan CJ, Dawson, Toohey and Gummow JJ; as applied in Newcastle City Council v GIO General Ltd (1997) 191 CLR 85 at 99 per Toohey, Gaudron and Gummow JJ and at 112-113 per McHugh J. Nevertheless, the Executive's explanation, in different language from the legislative provision, and use of examples expanding upon that explanation, can distract, to say the least, where there is no clear link to the legislative language. 56 There is in my opinion little or no assistance to be derived from resort to the Explanatory Statement to resolve the construction issues on this application. 57 The Tribunal relied on what the Explanatory Statement said about s 7, together with the Urbis report and that report's description of the objects as set out in the fourth Community Pharmacy Agreement of the location rules made under that fourth Agreement. The Tribunal used this material to conclude that the definition of "commercial establishment" disclosed an intention to capture businesses whose operations would "attract customers" to the shopping centre. It may well be something of a gloss on the 2011 Rules to characterise them as concerned with establishments or premises that might "attract customers". No ground of appeal or review was raised concerning the Tribunal's opinion on this matter, and in any event I do not consider its approach was legally impermissible, given the Tribunal's overall approach to the matters it needed to consider. Certainly, as I set out below, the fifth Agreement and the 2011 Rules disclose an intention to facilitate sustainable and accessible supply of pharmaceutical benefits to the Australian community and therefore do look to how members of the community access and use shopping centres. The Urbis report was produced by a private corporation under contract to the Department of Health and Ageing (as it was then known). The review it conducted arose out of a requirement in cl 28 of the fourth Community Pharmacy Agreement. I refer in more detail to the role of the Community Pharmacy Agreements below. In the introduction to its report, Urbis describes the objectives of the review in the following terms: - the effectiveness and efficiency of the Rules in meeting the objectives outlined in the Fourth Agreement, including the impact of the Rules in different geographic locations, such as rural Australia - the effectiveness of the operation of the Ministerial discretionary power under subsection 90A(2) of the Act to approve a pharmacist to supply pharmaceutical benefits - whether any changes are required to the Rules to ensure that the future establishment and relocation of community pharmacies assists the Government to meet its objectives in reorientating the healthcare system, promoting better preventive care and chronic disease management - the costs of administering the current Rules, including Medicare Australia and the Australian Community Pharmacy Authority (ACPA) processes, and legal reviews of decisions of the ACPA - specific problems and anomalies with the current Rules, and - issues and/or findings resulting from the research and analysis. 58 Various references were made by the parties to what is in the Urbis report. I do not consider it is appropriate to use this document in construing the 2011 Rules. It cannot be said to represent directly the views of government and is not even in that sense a policy document. Although the Government accepted its recommendations, the language used in the report does not purport to be that of the Executive. Even if it did, courts have long expressed considerable caution about substituting the words of the Executive, or a Minister, for the words of a legislative provision: see Re Bolton; Ex parte Beane (1987) 162 CLR 514 at 518 per Mason CJ, Wilson and Dawson JJ; as applied in Dossett v TKJ Nominees Pty Ltd [2003] HCA 69; (2003) 218 CLR 1 at [10] per McHugh J and in Re Minister for Immigration and Multicultural Affairs; Ex parte Miah [2001] HCA 22; (2001) 206 CLR 57 at [132] per McHugh J; and considered in Saeed v Minister for Immigration and Citizenship [2010] HCA 23; (2010) 241 CLR 252 at [32]-[33] per French CJ, Gummow, Hayne, Crennan and Kiefel JJ. Any precise correlation, relevant to the construction issues of the 2011 Rules on this application, between the content of the Urbis report and the content of the 2011 Rules was not explained. Rather, the report was relied on in a more general way. Such reliance takes the Court too far away from the text and context of the 2011 Rules themselves. 59 There is a danger where constructional choices are made by reference to such material rather than to the legislative provision itself. In Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (NT) [2009] HCA 41; (2009) 239 CLR 27 per Hayne, Heydon, Crennan and Kiefel JJ at [47] the High Court said (footnotes omitted): This Court has stated on many occasions that the task of statutory construction must begin with a consideration of the text itself. Historical considerations and extrinsic materials cannot be relied on to displace the clear meaning of the text. The language which has actually been employed in the text of legislation is the surest guide to legislative intention. The meaning of the text may require consideration of the context, which includes the general purpose and policy of a provision, in particular the mischief it is seeking to remedy. 60 A surer guide, in my opinion, is to look at the fifth Community Pharmacy Agreement itself. The Community Pharmacy Agreements formed part of the settlement of a long-running policy dispute between the Federal Government and the Pharmacy Guild of Australia about remuneration for pharmacists dispensing prescriptions under the Pharmaceutical Benefits Scheme and the restructuring of the pharmaceutical industry in Australia: see Smoker v Pharmacy Restructuring Authority (1994) 53 FCR 287 at 293-294 and 300-301 per Hill J; Pharmacy Restructuring Authority v Chatfield (1993) 43 FCR 418 at 429, 433 per French J. A description of some of the litigation which led, eventually, to the Agreements can be found in Commonwealth v Crowe (1992) 39 FCR 435 per Neaves, Gummow and French JJ. The first of these Agreements was signed in December 1990, and there were consequential amendments to the National Health Act, including the introduction of s 99L, so that effect could be given to the terms of the Agreement whereby, amongst other matters, "location rules" for pharmacies would be promulgated. 61 The 2011 Rules are made under s 99L of the Act as a result of the conclusion of the fifth Community Pharmacy Agreement. Part 1 of the fifth Agreement, headed "Introduction", has a subsection entitled "Context". Clause 1.2 provides: This Agreement is made in the following context: a. Community pharmacy is an integral part of the infrastructure of the health care system in its role in primary health care through the delivery of the Pharmaceutical Benefits Scheme and related services. b. The Commonwealth and the Guild have a common interest in ensuring that: i. pharmacists receive fair and adequate remuneration for the pharmaceutical benefits that they supply under Part VII of the National Health Act 1953 (Cwlth) so that a stable environment is created for community pharmacy enabling it to remain viable and to participate in the continuity of care for all Australians; ii. positive health outcomes are attained by the Australian community through the efficient delivery of patient-focused professional services and programs; and iii. there is a network of accessible and viable community pharmacies throughout Australia including in rural and remote areas. c. The parties understand that the Pharmaceutical Society of Australia, whilst not a signatory to this Agreement, will be an active participant in those areas of this Agreement that are related to professional practice. d. The principles and objectives of this Agreement are to: i. ensure a fair Commonwealth price is paid to Approved Pharmacists for providing pharmaceutical benefits while maximising the value to taxpayers by encouraging an effective and efficient community pharmacy network; ii. ensure that the Programs are patient-focused and target areas of need in the community including continued improvement in community pharmacy services provided to Aboriginal and Torres Strait Islander people; iii. ensure transparency and accountability in the expenditure of the Funds; iv. promote the sustainability and efficiency of the PBS within the broader context of health reform and ensuring that community resources continue to be appropriately directed across the health system, while also supporting the sustainability and viability of an effective community pharmacy sector; v. maintain a co-operative relationship between the Commonwealth and the Guild; and vi. ensure the Location Rules work for the benefit of the Australian community including increased access to community pharmacies for the population of rural and remote areas. The specific objectives of the Location Rules are to ensure: • all Australians have access to PBS medicines; • a commercially viable and sustainable network of community pharmacies dispensing PBS medicines; • improved efficiency through increased competition between pharmacies; • improved flexibility to respond to the community need for pharmacy services; • increased local access to community pharmacies for persons in rural and remote regions of Australia; and • continued development of an effective efficient and well-distributed community pharmacy network in Australia. e. The initiatives covered by this Agreement result in $1 billion in savings over the Term of the Agreement against the Commonwealth forward estimates. Those savings have been agreed by the parties in the context of extraordinary economic and budgetary circumstances. f. The Commonwealth will deliver $15.4 billion under the Agreement as set out in the following table: … 62 Clearly the objectives of the 2011 Rules, as set out in cl 1.2(d)(vi) of the fifth Agreement, are of principal relevance to the construction issues on this application. Those objectives have twin themes: 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). In that sense, the location rules are an attempt to balance community access with commercial sustainability. 63 In my opinion, the most that can be gleaned from the objectives for the 2011 Rules as set out in the fifth Agreement is that the 2011 Rules sought to balance the commercial need for sustainable and viable pharmacies against the community's need for access to pharmaceutical benefits. The 2011 Rules recognise, in my opinion, that sustainable and viable pharmacies are also of benefit to the community, in the continuity of supply of pharmaceutical benefits. How the 2011 Rules are contemplated to operate in relation to small shopping centres must be seen in that light. 64 It is apparent, at least, from the fifth Agreement that the 2011 Rules contemplate an assessment about the sustainability and viability of a pharmacy in a small shopping centre, which will depend - in part - on the numbers of people who are moving through a shopping centre, or might choose to go to one. It might also be the case that the 2011 Rules have nominated a certain critical mass of shops, those shops having certain characteristics, with the intention of using those measures to identify where it is appropriate for there to be access by the community to a pharmacy. In other words, the assumption underlying the prescription of a certain number of "commercial establishments" is that shopping centres where enough people go to sustain a certain number of commercial establishments are shopping centres where the community ought also to be able to access pharmaceutical benefits. 65 The applicants' submission that the purpose of the 2011 Rules "is, as far as possible, to ensure that there is a sufficient population and traffic to the shopping centre to support an efficient pharmacy", tends to emphasise more the commercial sustainability aspect of the legislative scheme, read with the fifth Agreement, rather than the community access aspect. In my opinion, the approval process under the National Health Act, read in the context of the fifth Agreement and the 2011 Rules, with their emphasis on approvals given in respect of particular premises, mean that the concepts of sustainability and viability of pharmacies are relevant in their own right, but also because of their effect on community access to pharmaceutical benefits. The two objectives (sustainability of pharmacies and community access to pharmaceutical benefits) are interdependent. There is no warrant in my opinion to construe the 2011 Rules in a way which is protective of the commercial positions of objecting pharmacies. 66 In summary, it is difficult to ascertain any specific purpose of the 2011 Rules at a level which tangibly affects the contentions on this appeal about the construction and operation of particular aspects of those Rules. The most that can be said, in my opinion, is that the Tribunal's focus on the numbers of "customers" coming through the shopping centre was permissible, and was not inconsistent with the fifth Agreement and the 2011 Rules.
Question of law 1/issue (a): whether any evidentiary onus 67 At the hearing, counsel for the applicants accepted this point was in reality a "back up" point, if the applicants were correct on any of their construction arguments. In that sense, it is unnecessary to decide the question. In any event, as developed at the hearing it was put as a no evidence ground, rather than an onus ground. There is no such question in the notice of appeal. Even if I had been persuaded on the applicants' construction arguments (which I am not), given it is clearly put as a question about onus in the notice of appeal and no amendments were sought, that is the way in which it should be considered. For the reasons set out by the Tribunal, by reference to McDonald, the contention could not succeed.
Questions of law 3 and 4/issue (c): the construction and application of "temporary selling point" 68 The applicants submitted that the two questions of law about the Tribunal's approach to the "temporary selling point" exclusion from the definition of "commercial establishment" arose on the review because of the applicants' contentions that several shops in the White Box Rise Shopping Centre were established by interests associated with Wodonga Pharmacy and that those shops had been established only for so long as their presence was needed to make up the 15 commercial establishments necessary to meet the requirements of Item 133 of Pt 2 of Sch 1 to the 2011 Rules, read with ss 5(1) and 7 of those Rules, and would be closed down upon the application being approved. The Tribunal found, at a number of points, that neither the length of time a particular business might operate from one of the identified premises, nor whether there were links between the pharmacy applicant and a particular business or businesses in the shopping centre, answered the questions posed by the definition of "temporary selling point" in the 2011 Rules. 69 The applicants submitted there was no textual or contextual basis for the Tribunal to have construed the phrase "temporary selling point" as confined to the nature of the structure or premises in which the business operated. Rather they submitted, in substance, that the use of the word "temporary" indicated there was to be a temporal assessment by the decision-maker as to whether each establishment was intended to continue to operate in the shopping centre. 70 Although they appear to have few commonalities, all of the exclusions in s 7(2) have one or more of the features of the primary definitions in s 7(1). 71 Indeed, the use of the introductory phrase "[f]or subsection (1)" in subs (2) indicates that the list contains true exclusions: that is, premises which would otherwise fall within the definition in s 7(1). 72 The qualifications in s 7(2)(b), (c), (d) and (h) do however support the approach taken by the Tribunal that the focus of the definition is on activities which attract, or are likely to attract, customers to the shopping centre and to be seen by the public as part of the shopping centre. The latter may explain why legal offices or real estate agent's offices which have a shopfront are brought back into the definition of "commercial establishments" and those without a shopfront are not. Such offices are more likely to secure "walk in" customers, and with a shopfront, to be perceived to form part of the shopping centre. Logically however, a library or car wash facilities might be said to do the same, but they are also excluded. An automatic teller machine for example (see s 7(2)(k)) might be thought not to attract customers into the shopping centre, but rather be used opportunistically by those customers already there for another purpose. Although it might be said that a library provides services to customers but is not commercial and is thus excluded, similar reasoning cannot be applied to a car wash - which provides services and operates on a commercial basis. As I have observed, finding a rationale for the list in subs (2) is difficult. 73 The applicants accepted that the words "selling point" means any point from which sales are made. 74 The constructional choice might be expressed as: is it a point from which sales are made temporarily? Or, is it a "point" which is temporary and from which sales are made? That is, does the "temporary" qualify the making of sales, or the nature of the premises? Or, to put forward a construction neither the Tribunal nor the applicants adopted, but which the submissions of the Authority and the Secretary seemed to favour, might it comprehend both? 75 It is common ground, by reference to s 7(1)(b), that premises may be counted towards the 15 commercial establishments even though they are not operating at the time the recommendation is made by the Authority, so long as the premises are "likely to be occupied" by a qualifying business. There is some tension between this being a sufficient state of affairs and the applicants' contention that "temporary" involves an assessment of the continuity of the business operation currently occupying the premises. The applicants' construction would also require words to be read into the phrase "likely to be occupied" so that it read "likely to be occupied on a permanent basis". 76 A further difficulty with the applicants' construction is what is meant by "temporary", even if used in a temporal sense relating to how long a premises was to be occupied. The applicants in the present case contended that some of the businesses had been deliberately installed in the shopping centre by those associated with Wodonga Pharmacy only for so long as it took to secure approval: the suggestion being the businesses would then be withdrawn. What, for example, of the business whose model is to move into an area consciously intending to be there only for a short period of time, capitalizing as part of that model on the fact that the business can create demand by promoting itself as existing for a limited period? That, it seems to me, is part of the appeal in the comparatively recent phenomenon of "pop-up" shops. Those shops may attract large numbers of customers to a retail area, although they may only do so for a period of months, or even weeks. They may be replaced with another "pop-up" shop, but on the applicants' construction even successive "pop-up" shops would need to be excluded from the count of 15 commercial establishments. It is unclear how this sits with the overall purpose of the 2011 Rules. 77 As I have observed above, it may be that the meaning of "temporary selling point" is able to cover both premises which are occupied for limited periods of time and structures which are erected on some kind of limited basis. The focus of the 2011 Rules, in my opinion, is on some continuity of retail activity, because such continuity may provide a stable indicator about the size of the shopping centre and the number of people who may frequent it. To take an example, if a structure is erected in a shopping centre for a demonstration of a new product and the intention is to dismantle the structure and move it and the demonstration on to another shopping centre in a week or two, then there is no continuity of retail activity occurring at that "selling point" and it may be regarded as a temporary selling point. If however a tenant is permitted to erect a demountable structure (for example, to sell jewellery), not necessarily in an established retail space, but pays for permission to occupy that space for a year, then the demountable nature of the structure will not necessarily make it a temporary selling point. Likewise, a tenant who takes a three-month lease of an established retail space intending to pass it on to another tenant who will also lease the space for only three months, may also not necessarily be establishing a temporary selling point. The point of sale, for retail sales, will continue. It will be simply be occupied by different tenants. This, it seems to me, was the point the Tribunal was making at [90] of its reasons. In each case there is continuity of some kind, which tends to count towards a critical mass of retail activity and therefore (the assumption seems to be in the 2011 Rules) a critical mass of people who may choose to use the shopping centre as a place to visit for a variety of retail activities. 78 It is not necessary, in my opinion, to give the phrase "temporary selling point" a single characterisation to the exclusion of others in order for the 2011 Rules to operate consistently with their purpose. It is up to the Authority in the first instance, and the Tribunal on review, to determine as a matter of fact on the basis of all the material and evidence whether a premises has sufficient continuity that whatever retail activity or activities are carried out there are not "temporary" but will contribute in an ongoing way to the level of retail activity at the shopping centre. 79 There were three businesses in the shopping centre which the applicants identified before the Tribunal as being "temporary selling points" - Cubano Facewear, Discount Cosmetics Clearance Centre and DVD Warehouse. A fourth, Dorevitch Pathology, is considered further below. At [83] of its reasons, what the Tribunal rejected was the applicants' proposition that it must examine "the permanency or otherwise of the commercial operation" being run from the premises. The Tribunal was correct to reject this as a decisive factor in whether or not a premises was a temporary selling point. I do not consider the 2011 Rules intend, by the use of that phrase, to place any temporal limits around how long a business must be operating either at the time of the decision, or be intended to operate, before it can be counted as a "commercial establishment". If there are "premises", and they are "occupied by or likely to be occupied by" shops or businesses then the fact that tenancies and businesses change does not make those premises "temporary selling points". 80 I see no error in the Tribunal's approach of asking whether a structure was used for sales or promotions in a way which might render it a temporary selling point. That approach may not exhaust the universe of what might, in a given factual situation, be a temporary selling point, but there is no erroneous construction of the 2011 Rules involved.
Relevant factors in determining "temporary selling point" 81 For the reasons I have expressed above, there was no legal error in the matters the Tribunal took into account to determine whether any of the commercial establishments could be characterised as "temporary selling points". In any event, the applicants did not establish, in my opinion, what considerations the statute (or the statutory scheme, assuming the 2011 Rules were incorporated) required to be taken into account, or what it forbade from being taken into account: see Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24 at 39-40 per Mason J. Rather, the applicants' approach tended, impermissibly, towards the composition of a list of matters, and evidence, which they contended the Tribunal should have regarded as relevant: see Sean Investments Pty Ltd v MacKellar (1981) 38 ALR 363 at 375 per Deane J. 82 Questions of law 3 and 4 and issue (c) do not reveal any error of law by the Tribunal.
Question of law 2/issue (b): the Tribunal's construction of, and approach to, the phrase "single management" 83 The definition of "single management" in relation to a shopping centre is set out in s 5(1) of the 2011 Rules, extracted above. The significance on the material before the Tribunal of this definition was that, in order for the gross leasable area to reach the minimum of 5,000 m2, all of the three structures comprising the Woolworths supermarket and retail shops, three premises adjacent to this in another structure and then the petrol station adjacent to the supermarket needed to be counted. Accordingly, the Tribunal had to be satisfied all of these premises were under "single management". 84 In its reasons (at [48]) the Tribunal recounted the evidence given by an employee of the owner of the White Box Rise Shopping Centre: Mr Howle, who described himself as the Asset Manager and Leasing Agent for Shopping Centres Australasia Property Group RE Ltd (SCA), testified that SCA became the owner of White Box Rise Shopping Centre on or about 16 December 2012. He described the area of the three structures I have referred to in [47] as being 4550 m², 418 m² and 80 m² respectively. That is, a total area of 5048 m². Mr Howle testified that SCA treated all of the buildings as part of the shopping centre. He also said that while there was no on-site shopping centre manager at the shopping centre, Jones Lang La Salle (JLL) acted as SCA's agent at the Shopping Centre. In his second witness statement Mr Howle said that SCA treated all of the buildings as part of the shopping centre because each building is located on the land which is one parcel; there were no fences or walls between the buildings enabling free access between the tenancies; the premises of each tenancy is owned by SCA and managed by JLL on behalf of SCA; and the buildings share the same road access and car-parking facilities. 85 The parties agreed in submissions before me that Mr Howle's evidence as recorded in his paragraph was not challenged in any relevant respect, nor contradicted. That is what the Tribunal also records at [51] of its reasons. 86 The error, submit the applicants, was that the Tribunal should have but did not measure the management of the three structures of the shopping centre (and especially the Caltex service station) against the criteria in paras (ii) and (iii) of the definition. The applicants characterised what the Tribunal had done in its reasons as construing the definition in a way which made the criteria in paras (ii) and (iii) relevant only to circumstances where there were two or more managers working cooperatively under an agreement (that is, the second limb of para (i) in the definition). The submissions of the Authority and the Secretary contended it was "not obvious" that the Tribunal had satisfied itself that each component of the definition was met. 87 The applicants' written submissions described the Tribunal's approach as imposing an "onus … on an objector to lead evidence to show the centre was not used as a single integrated facility". This is not an accurate description of the Tribunal's approach. Rather the Tribunal, correctly, looked at the evidence and material before it and found there was no evidence to displace what it saw as the logical consequence of management by a single manager - namely, that the centre would be managed as an integrated facility. That was a view of the material open to it as the fact-finder. It is not a question of onus, but where an objector wishes to challenge the satisfaction of a particular criterion under the 2011 Rules, it will be a matter for the objector how it chooses to do that. It may do so by positive evidence, or challenging evidence adduced by the applicant but if it does neither of those things then as a forensic reality it risks the merits decision-maker acting on the material as it exists and drawing available inferences from that material. That is all the Tribunal did in this instance. 88 Contrary to the applicants' submissions, the Tribunal did not, as a matter of construction of the 2011 Rules, limit the operation of paras (ii) and (iii) of the definition to circumstances where there were two or more managers working cooperatively under an agreement. Nor did it fail to take the factors in paras (ii) and (iii) into account. Rather it expressed the unsurprising view that those matters "may become significant" in those circumstances, and were "less significant" where the entire shopping centre was managed by one manager. The Tribunal was in my opinion correctly seeing the activities set out in para (iii) as usual incidents of management functions of a shopping centre and inferred that if there was one manager for the entire centre, those functions would, in the absence of any evidence suggesting otherwise, be performed by the single manager. 89 The core phrase in the definition of "single management", and the one to which the applicants' submissions paid insufficient heed, is the phrase in the introductory part of the definition in para (a) - "management of the centre as a whole". It is this concept which is used in contradiction to the circumstances set out in para (b). It is clear from the Tribunal's reasons that Mr Howle's evidence had satisfied the Tribunal that the White Box Rise Shopping Centre was managed "as a whole" by Mr Howle's employer. 90 There is no inconsistency between the Tribunal's approach and what was said by Bromberg J in Alexander v Australian Community Pharmacy Authority [2010] FCA 189; (2010) 265 ALR 424 at [46] where his Honour stated: There is no dispute that the single management considerations were relevant considerations. 91 The Tribunal did not, as I have said, discount or fail to consider the matters in paras (ii) and (iii). Rather, its opinion on the evidence and material before it was that Mr Howle's evidence of the approach of the entire facility being managed by one manager meant these factors did not need to be examined in detail but could be inferred from Mr Howle's evidence. That was an approach open to the Tribunal. 92 Question of law 2 and issue (b) do not reveal any error of law by the Tribunal.
Questions of law 6 and 7/issue (d): relevant factors under s 7 of the 2011 Rules 93 The applicants contend there are errors of law in the way the Tribunal determined whether a business constitutes one or more "commercial establishments" for the purposes of the 2011 Rules, with a second but similar question relating to what should be taken into account in determining whether commercial establishments are separate. 94 The applicants' contention was that two businesses - "Harry's Espresso" and "Harry's Pizza Palace" - were not independent of one another and should not be counted as separate commercial establishments for the purpose of the 2011 Rules. The same contention was made about "Crav'n Dine In and Take Away" and "Sprinkles Ice Cream Parlour". 95 The applicants were critical of the Tribunal's reasons for not referring to as much of the evidence as the applicants submitted existed to demonstrate they were correct in their contentions. That was, correctly, not a submission pressed very hard where the Court's jurisdiction is confined to the identification of legal error, and it need not be further considered. 96 The applicants expressed their characterisation of the Tribunal's legal error in several ways, but in their written submissions stated: Ultimately, the error of the Tribunal was that it did not consider all of the evidence as a whole and determine whether the operations constituted, in reality, separate commercial establishments and independent businesses. Rather, the Tribunal changed the legislative test to one that asked whether the permitted uses under the leases were different. Again, if an applicant is able to show 15 commercial establishments by simply pointing to 15 leases, all with the same tenant and for the same term, with the only difference being slightly different (albeit complementary) permitted uses, and there being no suggestion that the requirements of the permitted uses are actually enforced, it would be very easy for an applicant and an accommodating landlord (and it will usually be in the landlord's interests to encourage an additional tenant) to overcome the requirements of the Rules. 97 The Tribunal focused, in the applicants' submission, entirely on the business activity carried out, or to be carried out, on the premises (through examination of the lease), without looking, as it should have, at the business entity carrying out that activity. The applicants contended the 2011 Rules required the Tribunal to look at the business entity as well, especially given the language of s 7(3) of the 2011 Rules refers to the "business" in general terms. There was cautious support from the Authority and the Secretary for this submission. They contended the Tribunal had misconceived the Explanatory Statement, which they note contains examples clearly referring to "business entities", and that it would be an "overly narrow approach" for a decision-maker to look only to business activities to determine whether two or more commercial establishments were occupied or likely to be occupied by one business for the purposes of the 2011 Rules. 98 To recall, Item 133 of Pt 2 of Sch 1 to the 2011 Rules requires, relevantly, that there be 15 "commercial establishments" in the shopping centre. Section 7(1) of the 2011 Rules gives a meaning of "commercial establishment" which identifies at para (b) three different kinds of commercial or retail activities which may bring premises within the concept of "commercial establishment": (i) a shop where goods, food or beverages are sold retail; or (ii) a bar, café, restaurant or takeaway; or (iii) a business that provides services to customers. 99 It can be seen that the third limb of the meaning is capable of covering the first two kinds of establishment, but the 2011 Rules have singled them out as a different kind of "commercial establishment". Whether premises within paras (i) and (ii) are to be seen as impliedly excluded from para (iii) need not be determined in this appeal. 100 The premises excluded by s 7(2) are, as I have observed, a rather disparate collection, and it is difficult to see a consistent theme running through the entire group. 101 Section 7(3)(a) was the focus for the applicants' arguments on these issues. It was not seriously contended by the applicants that the four establishments identified were outside the terms of s 7(1): they plainly were not. Rather, the applicants concentrated on the way the Tribunal should have, in their submission, applied the deeming effect of s 7(3)(a). 102 Section 7(3)(a), it will be recalled, states that in working out the number of commercial establishments in a shopping centre: 2 or more commercial establishments occupied by, or likely to be occupied by, one business are counted as one commercial establishment. 103 The phrase "one business", the applicants contended, required the decision-maker to look at the entities which sat behind the operation of each commercial establishment. If the entities were common, and the premises not physically separated, then these matters suggested s 7(3)(a) should apply. On the evidence before the Tribunal, it was common ground that although there were two separate leases in respect of "Harry's Espresso" and "Harry's Pizza Palace", and also two separate leases in respect of "Crav'n Dine In and Take Away" and "Sprinkles Ice Cream Parlour", in each case the tenant for the two leases was the same. 104 I do not accept the applicants' contentions on this issue. Section 7(1) of the 2011 Rules has a clear focus on the retail or commercial activities performed on a particular premises: it directs the decision-maker's attention towards the nature of those activities. That being the primary articulation of the concept of "commercial establishment" there is nothing in s 7(1), nor in the concept of "commercial establishment" in context in the 2011 Rules, to suggest that a decision-maker is required to analyse the ownership structure of the entity or entities involved in the operation of the premises. What the 2011 Rules are concerned with are the activities conducted on the premises, in terms of how they may be used or accessed by members of the community. The ownership structure of the entities involved is unlikely to have a bearing on the numbers of customers making use of the shopping centre at any given time. 105 That being the case, the approach taken by the Tribunal, especially at [119] of its reasons, was open to it. The Tribunal's observation (at [119]) that the way commercial establishments are operated from an internal viewpoint is unlikely to have any bearing on the matters in s 7 was, in my opinion, not affected by any legally erroneous understanding of the 2011 Rules and their operation. To the contrary, the Tribunal was correct to approach the issue from the perspective of how members of the community might be expected to use and access the goods sold or services provided by the establishments. That is what it did, for example, in relation to the service station and the supermarket (see [121]-[124] of its reasons). 106 There was nothing legally erroneous in the Tribunal's examination of the leases for the four premises, and its reliance on the permitted uses as set out in the leases. The permitted uses, as set out in [117] of the Tribunal's reasons, gave descriptions of the activities to be conducted on the premises which on their face were different from one another. Those matters were capable of being probative of whether the two premises, occupied by (relevantly) "a bar, café, restaurant or takeaway" were occupied by one business. The identity of the tenant might have suggested they were occupied by one business; the different permitted uses (including the description given by the landlord's employee Mr Howle) might suggest they were not. This was within the provenance of the fact-finding function of the Tribunal and no legal error is disclosed by its choice. 107 Further, there appears to be some implicit criticism in the applicants' submissions of the Tribunal relying on the existence of four leases to determine that there were four premises for the purposes of s 7(1) (before considering the exception in s 7(3)). I would reject that criticism. The use of the terms "premises" and "occupied by" throughout the relevant parts of the 2011 Rules plainly contemplate that the decision-maker might examine the basis for the right of an establishment to occupy the relevant part of the shopping centre, including examining what use is permitted. 108 The 2011 Rules do not use the word "business" in any particular, or defined way. It is used in a number of contexts in Pt 1 of the 2011 Rules. In the definition of "supermarket" in s 5(1) the term "primary business" is used in a way which clearly connotes business activities carried out by the store concerned. In s 6(2), dealing with when premises which have had an approval for the supply of pharmaceutical benefits are deemed to have become redundant, para (d) operates when a pharmacist has "ceased to carry on business". Again, in that context, the focus is on the business activity of being a pharmacist. Then in s 7(1) itself, the word is used in para (b)(iii). This use may be said to be slightly less clearly referable to an activity but in my opinion that remains its focus. This is confirmed by the exclusions in s 7(2), most of which would otherwise be within the terms of s 7(1)(b)(iii), and which are described - to a greater or lesser extent - by reference to the activities carried on at the premises concerned. 109 I note also that the definition of "shopping centre" in s 5(1) of the 2011 Rules is "a group of shops and associated facilities that is under single management". The focus in this definition is on the activities carried out on premises which meet the description, in the first instance of either "shops" or of "associated facilities". Those terms direct attention not to who owns the shops, or who operates them, nor any other commercial arrangements which sit behind their ownership and operation. Rather, those terms direct attention to what is found on the premises themselves, and what activities occur on those premises. 110 In the context of a shopping centre as defined in the first limb of s 7(1), the second limb (in para (b)) continues the focus of the provision on the nature of the activities occurring on the premises. 111 All those textual and contextual indicators suggest the 2011 Rules contemplate a decision-maker will identify commercial establishments by reference to the activities carried out on the premises concerned, including for the purposes of s 7(3). That is not to preclude an approach, on the facts of a given case, which might examine a "business" by reference to the identity of the persons conducting that business, especially where personal services are involved. In submitting that it might be overly narrow to look only at business activities, the submissions of the Authority and the Secretary are correct to recognise that, in a given case, the composition of the entity behind the business may be important to determine whether s 7(3)(a) is engaged. For example, where one individual hairdresser who leased, and worked in, two hairdressing salons in the same shopping centre but had additional and different assistant staff at each salon, a decision-maker might wish to consider if the two salons with the same hairdresser working in both were best described as "one business". On the other hand, there may be other indicia - separate business names, different target clientele, different supplementary services, which could lead the decision-maker to determine the two establishments were not one business, even though the same hairdresser cut different clients' hair in both of them. However these will be matters of fact and degree in particular circumstances, and do not give rise to any issues of construction of s 7 of the 2011 Rules. 112 I am reinforced in this conclusion by the terms of s 7(3)(b) of the 2011 Rules. That paragraph imposes a limit on the number of shopfronts occupied by, broadly, those providing professional services to the public (such as accountants, architects and surveyors). In my opinion the content of this provision and the imposition of such a limit recognise the limited flow of customers, or members of the community, into such premises, when compared to premises with the kinds of activities specified in s 7(1)(b). Without wishing to overwork what might be gleaned from the presence of this limit, it does tend to suggest that the focus of the 2011 Rules is on the nature of the activities conducted in each premises and the relationship between those activities and the numbers of people in the community who attend or visit the shopping centre. 113 There is no legal error, in terms of the Tribunal's construction of s 7 of the 2011 Rules, and no misunderstanding of the task to be performed in determining whether the number of "commercial establishments" in the shopping centre reached 15.
Question of law 5: the construction of "likely to be occupied" for the purposes of the 2011 Rules 114 This question of law was not covered by the "issues" on the appeal as set out in the applicants' submissions and received little attention in written and oral argument. In the grounds set out in the notice of appeal, the applicants contended that the error was disclosed at [89] of the Tribunal's reasons. This ground linked the error to the Tribunal's approach to determining whether premises were a "temporary selling point" under the 2011 Rules. 115 At [84]-[88] of its reasons, the Tribunal referred to a number of authorities about the use of the word "likely" in a number of different statutory contexts. The Tribunal referred at [88] to the observations of Gummow J in Poignand v NZI Securities Australia Ltd (1992) 37 FCR 363 at 371 that the word takes its colour from its statutory context, and in that context may indicate a degree of contingency falling short of probability. At [89], the Tribunal said the word "likely" in the 2011 Rules conveyed a notion of a real and not remote chance that premises will be occupied by the kinds of business described. The applicants contend the Tribunal could only have found that to be the case if there was evidence that occupation by such a business was actually contemplated. 116 The relevance of all this appears to relate to the Tribunal's treatment of premises occupied in fact at one time by Dorevitch Pathology, in circumstances where the evidence revealed that pathology service had closed. However at [97]-[98] the Tribunal found, again relying on the evidence of Mr Howle, that the premises were sublet to another pathology service for a term of three years. It found this was sufficient to establish the premises were likely to be occupied. The basis on which that approach was impugned for error of law was not developed. I see no error in the approach the Tribunal took to the meaning of the term "likely", and no misunderstanding in the way it applied the 2011 Rules to the premises leased by Dorevitch Pathology. 117 Question of law 5 does not reveal any error of law by the Tribunal.
CONCLUSION 118 Whether expressed in terms of the questions in the notice of appeal, or the issues distilled from these questions as formulated in the applicants' submissions, I am not satisfied the Tribunal's decision is affected by legal errors of the kind claimed. 119 That conclusion makes it unnecessary for me to consider the applicants' claim for relief under the AD(JR) Act. If orders had been made setting aside the decision of the Tribunal, then difficult questions of both law and discretion would have arisen, in my opinion, concerning the operation of s 16(1)(a) of the AD(JR) Act, some of which Jessup J dealt with in Yu (No 2). Those matters can be left for an occasion where their determination is required as a consequence of other orders of the Court. 120 In their joint written submissions in advance of the hearing, the Authority and the Secretary submitted that if the appeal and application were unsuccessful, the Court should award costs in their favour. The applicants did not make any contrary submission. The joint oral and written submissions made by the Authority and the Secretary were of assistance to the Court and, insofar as the Authority was concerned in VID 470 of 2014, and the Secretary in VID 542 of 2014, did not exceed the proper scope for submissions by a decision-maker, in accordance with the principles set out in Hardiman at 35-36. The Authority and the Secretary were however represented by a single set of legal representatives. The limited nature of their involvement, and the fact that Wodonga Pharmacy was the active contradictor, may be relevant factors in the assessment of the costs fairly and reasonably incurred by the Authority and the Secretary. In default of agreement, these will be matters for the taxing officer to consider. However, it is my view that the matters should be taxed together in default of agreement to avoid double recovery. I certify that the preceding one hundred and twenty (120) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Mortimer.
Walkerden
Wodonga Pharmacy Pty Ltd
[2014] AATA 496
[2003] HCA 69
(2009) 239 CLR 27
(2010) 265 ALR 424
(1997) 187 CLR 384
(1992) 39 FCR 435
(2003) 218 CLR 1
(1984) 1 FCR 354
(1986) 162 CLR 24
(1997) 191 CLR 85
(1993) 43 FCR 418
(1992) 37 FCR 363
(1980) 144 CLR 13
(1987) 162 CLR 514
(2001) 206 CLR 57
(2010) 241 CLR 252
(1981) 38 ALR 363
(1994) 53 FCR 287
(2013) 216 FCR 188