BLOG

On 29 January 2019, the Federal Court of Australia ordered that the Minister for Health, The Honourable Greg Hunt, had failed to actively intellectually engage with submissions by a party challenging the exercise of ministerial discretion to grant approval for the supply of pharmaceutical benefits from 24 hour pharmacy attached to a large medical centre.

The Applicant, Dominic Stambe, challenged the Minister’s decision on three grounds. He was successful on one.  This article summarises the ground on which Mr Stambe was successful and the reason for his success.

In mid-2017, following a rejection from the Australian Community Pharmacy Authority, YL Health Group Pty Ltd (“YL Health Group”) made an application to the Minister for Health for exercise of the Ministerial Discretion provided to him pursuant to the National Health Act in relation to a pharmacy premises attached to a large medical centre in Waverley, Victoria. The Minister decided to consider the request and subsequently invited submissions from nearby existing approved pharmacies. Mr Stambe made submissions to the Minister opposing the application by YL Health Group.

On 1 November 2017, the Minister exercised his discretion to approve YL Health Group’s request.

Mr Stambe sought reasons for the Minister’s decision. The reasons, although drafted by others, were endorsed by the Minister on 21 November 2017.  The evidence indicated the reasons had been prepared by officers of the Department of Health and following receipt of a briefing note on the same day, the Minister endorsed the statement of reasons provided by the Department personnel. Among other things, the briefing note briefly summarised Mr Stambe’s submissions in opposition of the application.

Mr Stambe commenced proceedings against the Minister on three grounds:

1.     The procedures that were required by law to be observed in connection with the making of the Minister’s decision were not observed;
2.     The Minister took an irrelevant consideration into account and failed to take other relevant considerations into account; and
3.     The Minister’s decision involved an error of law.

Mr Stambe was successful on ground 1 only.

Procedures required by law to be observed were not observed

Mr Stambe challenged the Minister’s consideration of his submissions by reference to the statement of reasons. 

Mr Stambe argued that his submissions contained at least three matters of significance which were not addressed or “considered” at all by the Minister in his submissions, namely:

1.     How the relevant “community” should be identified (to determine if a community would be left without reasonable access to pharmaceutical benefits);
2.     The saturation of pharmacies in the area; and
3.     The importance of considering the application in light of the fact that YL Health Group’s pharmacy, although proposed to be 24 hours, was not 24 hours at the time the application was made and was not intended to shift to a 24 hour service unless approved.

YL Health Group submitted that the reference to the applicant’s submissions in the briefing note demonstrated the submissions were brought to the Minister’s attention and that the Minister was not legally obliged to read any material submitted to him before exercising his discretionary power.

The Court noted that there was no evidence from the Department of Health on what the Minister did in making his decision, how he approached the task or indeed, how long he took to make the decision, and that the Court should be cautious about the inferences it draws from the absence of information in relation to those matters. The Court also considered the inferences submitted by YL Health Group to be “mere speculation”, in which the Court does not engage.

In scrutinising the context of the word “consider” in section 90D(3) of the National Health Act, it was held that the section imposed an obligation on the Minister to consider any “comments, information or documents” received in response to a request for submissions.  

Accordingly, the Minister was required to “engage in an active intellectual process” with the response provided to him by Mr Stambe and to give Mr Stambe’s response “genuine consideration”.

The statement of reasons provided by the Department of Health referred to the applicant’s submissions and his opposition to the application. Aside from this, and a brief reference to opening hours of nearby pharmacies, there is no other express reference to Mr Stambe’s response.    

YL Health Group submitted that none of the matters raised by Mr Stambe in his submissions to the Minister were “so important” so as to require the Minister to deal with them expressly.   The Court disagreed. The Court’s view was that the absence of information in the Minister’s reasons evidenced lack of consideration of what Mr Stambe had submitted. 

The Court also identified that where reference was made to Mr Stambe’s submission, it was an “inaccurate summary of what the submission actually said”. Therefore, the Minister could not have considered the applicant’s submission because the briefing note supporting the statement of reasons was inaccurate. 

Justice Mortimer accepted Mr Stambe’s submission that three short references to Mr Stambe’s submission in the briefing note did not adequately or properly represent the submission made by him.

Accordingly, the Court held that there was no active intellectual engagement by the Minister with what Mr Stambe had said. The Court was satisfied that Mr Stambe had established that the Minister did not consider his response as the law required him to do. 

It was noted that whilst the Minister did not have to accept what Mr Stambe had submitted, he did have to consider it.  In the briefing note provided, there was no summary of the competing positions of the parties. That is, there was no attempt to draw the Minister’s attention to these matters which the Court considered to be central to the exercise of the discretionary power.

The parties have been asked by the Court to attempt to reach agreement on final orders to reflect the Court’s decision. Failing agreement, submissions as to final orders are to be made and the final orders will be determined by the Court. We will endeavour to provide an update on the final orders made.

Should you require assistance with a pharmacy matter, including advice on an application or objection to an application submitted to the Australian Community Pharmacy Authority or Federal Minister for Health, please contact Sarah Stoddart on (07) 2140 0522 or sarah@vitalitylawaustralia.com