whether mr wong was entitled to BE HEARD
38 Mr Wong contended that he was entitled, as an incident of procedural fairness, to be given a chance to be heard and make submissions in relation to the material considered by the Authority on the relevant catchment area. Mr Wong said that he was denied that opportunity and that, accordingly, the recommendation of the Authority should be set aside because there had been a failure to accord him procedural fairness.
39 Mr Wong contended that his entitlement to be accorded procedural fairness was founded upon the fact that his economic interest would be affected by the Authority's decision because it would lead to another pharmacist operating in competition with Mr Wong in Pinjarra. The introduction of another pharmacist in Pinjarra, said Mr Wong, would have the effect of reducing the revenue earned from his existing pharmacy in Pinjarra. Mr Wong deposed that he estimated that 50% of his business turnover would be lost because of the high number of pensioners, veterans and concession card holders in Pinjarra. Mr Wong also contended that this interest was sufficient to give rise to a right to be heard as an incident of an entitlement to procedural fairness, at common law. The statutory framework, on its proper construction, said Mr Wong, did not provide otherwise.
40 The question of whether a pharmacist whose economic interest may be affected, is entitled to an opportunity to be heard in opposition to the Authority recommending the approval of an application made under s 90 of the National Health Act, as an incident of an entitlement to procedural fairness, has been the subject of a number of decisions in this Court.
41 In the case of Martin v Pharmacy Restructuring Authority (1994) 34 ALD 534, the third respondents carried on business as pharmacists at the corner of Bridge and Joseph Streets in Lidcombe, New South Wales. There were other pharmacists, Ms Martin and Ms Ridgeway who also carried on business in Lidcombe. Their premises were located in John Street. Joseph Street and John Street were adjacent streets which were connected by a railway footbridge. The third respondents applied to the Authority under s 90 of the National Health Act for approval to provide pharmaceutical benefits from premises two doors away from the John Street premises where Ms Martin and Ms Ridgeway carried on business as pharmacists. In effect, the third respondents applied to relocate from premises in Joseph Street to premises in John Street.
42 The guideline which the Authority was required to apply at the time, namely, guideline 3(d), permitted a pharmacist to relocate to premises which were not more than 500 metres "by normal access routes" from their existing premises. The evidence was to the effect that the John Street premises to which the third respondents sought to relocate, were 318.7 metres from their existing Joseph Street premises if measured by walking down the street and over a footbridge, but were more than 600 metres by road from the third respondents' existing premises in Joseph Street. The Authority recommended the approval of the third respondents' application and a delegate of the Secretary approved the application.
43 Ms Martin and Ms Ridgeway applied for judicial review of the Authority's decision under the ADJR Act. They contended that by reason of their economic interest in the Authority's decision, they were entitled to procedural fairness in relation to the making of the decision to approve the third respondents' application, and the Authority had failed to accord them procedural fairness. Davies J, at first instance, upheld Ms Martin's and Ms Ridgeway's contention, finding that they were persons who were likely to be affected by the decision of the Authority.
44 The Authority appealed to the Full Court. The Full Court (Pharmacy Restructuring Authority v Martin (1994) 53 FCR 589 (Martin)) upheld the Authority's appeal. In doing so, it set aside the finding of Davies J that Ms Martin and Ms Ridgeway were entitled to procedural fairness in relation to the making of the Authority's recommendation. At 597, Wilcox J (with whom Foster and Whitlam JJ agreed) observed as follows:
Procedural fairness
Counsel for the first respondents argued that procedural fairness required the Authority to afford their clients a right of hearing before deciding to recommend approval of the application. They cited no authority in support of that submission. Alphapharm Pty Ltd v SmithKline Beecham (Australia) Pty Ltd (1994) 49 FCR 250 suggests the contrary.
There are cases where a statutory authority, charged with the duty of considering an application to use premises for a particular purpose, is expressly obliged to publicise the receipt of the application and to consider objections. Liquor legislation is a well known example. There are cases where such an obligation is implied by the scope and purpose of the legislation. But we do not know of any general principle to the effect that a statutory authority charged with the duty of considering an application is obliged by the principles of procedural fairness to notify and hear everybody whose economic interests may be damaged by an approval. To promulgate a general rule imposing such an obligation would be to visit upon statutory decision-makers a potentially massive task of indeterminate reference. In the present case, nothing is to be implied from the scope and purpose of the Act. The relevant provisions are not concerned with minimising competition in the pharmaceutical industry but with reducing the Commonwealth's financial burden in providing pharmaceutical benefits while maintaining an acceptable level of community service. In the absence of authority, we are not prepared to hold that, if it had a discretion about its decision, the Authority had any obligation to notify or hear pharmacists, non-parties to the application for approval, merely because an approval might commercially damage them.
45 In the case of Loveridge v Pharmacy Restructuring Authority (1995) 39 ALD 103 (Loveridge), Mr John Loveridge and his wife, Mrs Pam Loveridge, were the owners of a pharmacy business in a shopping complex called Penrith Plaza. Mr and Mrs Loveridge carried on the only pharmacy business in this shopping complex. Mr Loveridge was an approved pharmacist within the meaning of s 84(1) of the National Health Act.
46 The shopping complex was expanded at the end of 1993 and in 1994 a medical centre was opened as part of the complex. In September 1994, another pharmacist, Mr Terry Hill, applied under s 90 of the National Health Act for approval to supply pharmaceutical benefits, with a view to relocating to premises in the new medical centre forming part of Penrith Plaza shopping complex. The relevant guideline which the Authority was required to apply was guideline 3(d), the same guideline which was the subject of consideration in the Martin case.
47 The evidence before the Authority was that the relocation distance between the two relevant premises was 490 metres. The Authority recommended that Mr Hill's application be approved and a delegate of the Secretary granted Mr Hill's application.
48 Mr and Mrs Loveridge sought an order for review under the ADJR Act in respect of the Authority's recommendation and the decision of the delegate of the Secretary. An issue before the primary judge, Whitlam J, was whether Mr and Mrs Loveridge had standing to complain and to bring an application under the ADJR Act. The primary judge held that they did have standing. In making that finding, Whitlam J, at 106, observed:
They have been subjected to competition in the shopping complex, where formerly there was none. The Authority's recommendation and the Secretary's decision thus result in a real grievance.
49 Mr and Mrs Loveridge also contended that they had been denied natural justice. Whitlam J observed, at 106, that that submission could not succeed in light of the Full Court's decision in Martin, which had been handed down two days before the proceeding had begun.
50 The next case which considered the decision in Martin is the case of The Pharmacy Guild of Australia v Australian Community Pharmacy Authority (1996) 46 ALD 310 (Pharmacy Guild). In that case, the applicant pharmacists applied under s 90 of the National Health Act, for approval to relocate to premises in the Kareela shopping centre. The relevant rule (which superseded the guidelines), which the Authority was bound to apply, provided:
6. approval of a pharmacist under s 90 of that Act in respect of particular premises must be recommended if the pharmacist is already approved under section 90 of the Act in respect of other premises from which the pharmacist proposes to cease supplying pharmaceutical benefits immediately before the granting of the approval if:
…
(c) the premises in respect of which approval is sought are not less than two km, measured door to door by the shortest lawful access route, from the nearest other premises in respect of which a pharmacist is approved under s 90 of the Act...
51 The applicant pharmacists, by their agent, forwarded to the Authority evidence from a surveyor which stated that the distance from the Oyster Bay pharmacy was 2,058 metres travelling in one direction and 2,130 metres travelling in the opposite direction. Mr David Pay, an approved pharmacist, who operated a pharmacy within the vicinity of the Kareela shopping centre, wrote a letter to the Authority stating that amongst other things, there were at least 19 pharmacies operating within a radius of two kilometres of the Kareela shopping centre.
52 The Authority determined to recommend approval of the application for relocation, subject to clarification that the Oyster Bay pharmacy was the closest pharmacy to the proposed pharmacy premises in the Kareela shopping centre. The applicant pharmacists' agent confirmed in response to an inquiry from the Authority, that the Oyster Bay pharmacy was the closest pharmacy to the proposed premises in the shopping centre.
53 The Authority recommended that the application for approval to relocate be approved; and, subsequently, a delegate of the Secretary approved the application to relocate.
54 An application to review the Authority's recommendation and the delegate's decision under the ADJR Act, was made by the Guild of Pharmacists and 10 pharmacists with pharmacy businesses located in the vicinity of the Kareela shopping centre. It was not in dispute that, four of the 10 pharmacists had pharmacies which were located within two kilometres walking distance of the Kareela shopping centre. All of the pharmacists deposed that their economic interests were adversely affected by the decisions.
55 Branson J found that the four pharmacists whose premises were within a two kilometre walking distance of the Kareela shopping centre, had a sufficient interest to afford them standing to bring the application under the ADJR Act. It was unnecessary for Branson J to determine whether the other pharmacists whose premises were more remote, also had standing to seek review of the decisions. Further, Branson J declined to determine whether the Guild of Pharmacists had standing.
56 One of the grounds of review relied upon by the aggrieved pharmacists was that the procedure adopted by the Authority involved a denial of natural justice to the pharmacists in the vicinity, which included Mr Pay, by not providing them with an opportunity to be heard on the question of distance. Branson J observed at 320:
It was contended on behalf of the applicants that the procedure adopted by the authority involved a denial of natural justice to Mr Pay, whose letter of 10 May 1994 was before the authority, and to the second to fifth applicants, or alternatively to the second to eleventh applicants. It seems to me that the approach of the full court in Pharmacy Restructuring Authority v Martin to the issue of procedural fairness makes it impossible for me to accept this contention.
In Pharmacy Restructuring Authority v Martin the full court determined that since the guidelines (now the rules) give the authority no discretion, no purpose would have been served by the authority giving a hearing to the respondents. Here it is suggested that had the respondents been given a hearing, particularly once the authority sought clarification of the distance issue, further evidence would have been placed before the authority on that issue. In every case of this kind, the provision of a hearing to other pharmacists carrying on business in the relevant area may provide additional evidence of distance. It might well have done so in the case of Pharmacy Restructuring Authority v Martin. Yet the full court did not accept that there had been any denial of procedural fairness in that case.
Since the decision of the full court in Pharmacy Restructuring Authority v Martin, the agreement has been executed. As is mentioned above, cl 6.5 of the agreement records an agreement between the guild and the minister that the authority "be entitled to seek and note information from people likely to be directly affected by a recommendation, taking into account the secrecy provision of the Act and the Privacy Guidelines". This agreement as to the entitlement of the authority to note information from sources other than the applicant does not, in my view, give rise to an obligation in the authority to give a hearing to any person. Nor, in my view, does the fact that the authority circulated a newsletter on or about 14 July 1995, which indicated that in respect of applications for relocation the authority would write, without identifying the applicant, to all other pharmacists in the area of the application identifying the proposed site of the relocation. The authority had determined on 9 June 1995 to recommend approval of the third respondents' application subject to clarification of the issue of distance. It appears that the process of clarification undertaken by Mr Candy was completed before 14 July 1995. The newsletter cannot, in my view, have given rise to any legitimate expectation of consultation in respect of consideration by the authority of the third respondents' application.
I do not consider that the circumstances of this case can be satisfactorily distinguished from those considered by the full court in Pharmacy Restructuring Authority v Martin so far as the issue of procedural fairness is concerned.
So far as the secretary is concerned, if procedural fairness did not require the authority to give a hearing to any party other than the third respondents on the issue of distance, it necessarily follows, in my view, that no such duty fell on the secretary.
57 Mr Wong, however, sought to distinguish his case from the binding effect of the decision in Martin.
58 First, Mr Wong contended that the observations of the Full Court in Martin denying persons whose economic interests may be affected, an entitlement to procedural fairness, are to be taken as referring only to persons with a more remote economic interest in the outcome of the decision to be made by the Authority, than that of a person in the position of Mr Wong. Mr Wong said that he was the only existing pharmacist in Pinjarra and, therefore, his economic interest was likely to be directly and immediately affected by the decision of the Authority. This contention cannot be accepted. In Martin and in the cases of Loveridge and Pharmacy Guild, the applicants for judicial review were also pharmacists whose economic interests were likely to be directly and immediately affected by the introduction of a competing pharmacist.
59 In the Martin case itself, the new pharmacy was only two doors away from the pharmacy conducted by Ms Martin and Ms Ridgeway, the affected pharmacists. However, notwithstanding, the immediacy of the threat to their economic interest arising from the proximity of the new pharmacy, the Full Court held that relevant statutory provisions were not to be read as conferring upon Ms Martin and Ms Ridgeway an entitlement to be accorded procedural fairness by the Authority in the making of the recommendation.
60 Further, in Loveridge, the affected pharmacists were the only existing pharmacists in the Penrith Plaza shopping complex, who like Mr Wong, had not, prior to the impugned decision of the delegate of the Secretary, been subject to competition.
61 Notwithstanding this circumstance, Whitlam J found that the Full Court decision in Martin applied to deny Mr and Mrs Loveridge an entitlement to be accorded procedural fairness by the Authority.
62 Also, in Pharmacy Guild, all of the affected pharmacists deposed that their economic interests had been adversely affected by the recommendation and subsequent approval in respect of the relocation of the applicant pharmacist to the Kareela shopping centre. Branson J held that Martin applied in those circumstances.
63 The nature of the interest which the affected pharmacists in all three of the abovementioned cases, unsuccessfully asserted as entitling them to be heard in opposition to the competing pharmacist's application for approval, is not, in my view, distinguishable from the interest asserted by Mr Wong, namely, the potential diminution in revenue arising from the introduction of the competing pharmacist.
64 Secondly, Mr Wong contended that the statutory scheme in operation at the time of the decision in Martin, was different to the current statutory scheme. In particular, Mr Wong said that the previous scheme directed attention to the restructuring of pharmacies and was not concerned with competition. However, the current scheme, said Mr Wong, is concerned with competition. It was said that an object of the fourth Pharmacy Guild agreement is to improve efficiency through increased competition between pharmacies.
65 In my view, this contention does not assist Mr Wong, because his claim to be entitled to be heard is founded on a claim that his economic interest will be adversely affected by increased competition from a pharmacy operated by Mr Pearson. The Full Court in Martin found that, even under the previous statutory scheme, this interest was not a sufficient interest to afford an affected existing pharmacist, a right to be heard in opposition to the approval of an application to provide pharmaceutical benefits by an applicant who is likely to compete with the business operated by the existing pharmacist.
66 As Wilcox J (with whom Foster and Whitlam JJ agreed) observed in Martin, the "relevant provisions were not concerned with minimising competition". The position would be a fortiori under the existing statutory regime which is said to be intended to give effect to a policy of increasing competition.
67 Mr Wong also referred to the case of Wood v Australian Community Pharmacy Authority [2002] FCA 1592 (Wood) in support of his contention that he was entitled to be heard by the Authority on the question of the catchment area, as an incident of an entitlement to procedural fairness.
68 In Wood, Mr MacKenzie, a pharmacist, made an application to supply pharmaceutical benefits at particular premises in Karratha in the Pilbara region of Western Australia. The application was made pursuant to rule 6A of the Pharmacy Rules. In short, this rule provided the Authority with a discretion to recommend the approval of an application to supply pharmaceutical benefits, where the following circumstances applied: the proposed premises were in a remote location, there was an existing pharmacist who supplied pharmaceutical benefits in that location, and the Authority was satisfied that the provision of the pharmaceutical benefits by that pharmacist in that location was substantially inadequate. The Authority recommended that Mr MacKenzie's application be granted and the delegate of the Secretary granted the application. The existing pharmacist, Ms Wood, brought an application for judicial review.
69 Lee J found that, in those circumstances, the existing pharmacist whose performance was being impugned by the pharmacist making the application, was entitled to be heard by the Authority in relation to whether the provision of services by the existing pharmacy was substantially inadequate.
70 At [43], Lee J observed:
The provisions of r 6A expressly direct the Authority to examine the provision of pharmaceutical benefits by a pharmacist by having regard to the criteria specified in the rule, and determining whether the pharmacist has met obligations under the regulations and whether, as a result, the provision of pharmaceutical benefits by that pharmacist is "substantially inadequate". A fair procedure for the determination by the Authority in those circumstances required the Authority to put to a pharmacist whose professional conduct is thereby impugned, any material presented by an applicant that reflected adversely on the adequacy of the provision of pharmaceutical benefits by the existing pharmacist and offered the existing pharmacist the opportunity to comment thereon. The content of the legislation clearly implied such an obligation. (See: Pharmacy Restructuring Authority v Martin at 597; Cenrin Pty Ltd v Lamb (1993) 42 FCR 167 per Spender J at 178.)
71 At [44], Lee J observed:
The terms of r 6A make it apparent that a fair procedure required the pharmacist, whose conduct the Authority was directed to examine, to be given the opportunity to respond to allegations that the provision of pharmaceutical benefits by the pharmacist was "substantially inadequate". As noted above, the matters to be considered under subr 6A(b)(iv) may lead to findings which could suggest that the pharmacist had committed offences by breach of the specified regulations and, plainly, it was apprehended in the rule that adverse material which may, as in this case, be based on hearsay, would be put to the pharmacist for response.
72 In my view, Wood is distinguishable from this case. In Wood, the relevant rule required the Authority to examine the professional performance of the existing pharmacist and assess the adequacy of that performance. By contrast, rule 107 of the Pharmacy Rules does not call for consideration of the performance of the existing pharmacist. The relevant matter in respect of which the Authority was required to be satisfied in this case, namely, whether the population in the catchment area of the proposed premises is at least 8,000 persons for most of the year, is an objective criterion which does not entail the impugning of the professional performance or conduct of the existing pharmacist. The criterion in issue in this case, is similar in character, therefore, to the distance criteria which were in issue in the Martin, Loveridge and Pharmacy Guild cases.
73 Further, Lee J referred to Martin, in support of his finding that rule 6A implicitly provided the affected pharmacist with a right to be heard in respect of the impugned conduct. It follows that, on the question of whether the relevant provision of the statutory framework at issue in each case, implied a right to an affected pharmacist to be heard, Lee J considered that the effect of the guideline applied in Martin, was distinguishable from the effect of rule 6A of the Pharmacy Rules. As mentioned, the guideline in Martin, as in this case, required the Authority to be satisfied as to an objection criterion - namely, distance - albeit that the question of how the distance was to be measured, was the subject of the controversy in that case.
74 Accordingly, in my view, the Court is bound by the Full Court's decision in Martin. It follows that Mr Wong's contention that the recommendation of the Authority was unlawful because he was denied an opportunity to be heard in relation to the material provided by Mr Pearson on the catchment area, as an incident of an entitlement to procedural fairness, is dismissed.
75 Mr Wong also referred to cases where it has been held that objectors under different statutory schemes, had been entitled to be accorded procedural fairness in relation to the decision-making process. However, these cases provided no assistance, because as was recognised by the Full Court in Martin, each statutory scheme must be assessed by reference to its own terms.