Pharmacy Guild sees proceedings against Ramsay Health Care dismissed as court rules it cannot determine whether there has been criminal conduct in a civil suit
Proceedings brought by the Pharmacy Guild of Australia against Ramsay Health Care to test the application of pharmacy ownership laws have been summarily dismissed by the Supreme Court of NSW.
The action was brought by the Guild and three other plaintiffs, who are the pharmacist owners of Priceline Pharmacy Nowra, Southside Pharmacy and Masen’s Pharmacy in South Grafton, and Coady’s Pharmacy in Caringbah, all in NSW.
They were seeking a declaration that Ramsay Health Care and Ramsay Pharmacy Retail Services hold a financial interest in five specific Ramsay-branded NSW pharmacies (owned by the third and fourth defendants—Pharmire and Lekarna, respectively).
This would amount to declarations of criminality of conduct, as contravention of the National Law is a criminal offence which may give rise to penalties.
The third defendant, Pharmire is the owner of business names associated with three Ramsay-branded pharmacy community businesses in NSW at Grafton and Shoalhaven. It is alleged that Pharmire is the owner of business names associated with a total of eight pharmacy businesses around Australia.
The fourth defendant, Lekarna is the owner of business names associated with two Ramsay-branded pharmacy businesses in NSW at East Albury and Caringbah. It is alleged Lekarna is the owner of business names associated with a total of 14 pharmacy businesses around Australia.
At a 29 April hearing, Guild legal representatives said the Guild had brought proceedings based on the potential impact on its members “if publicly listed companies are allowed to amass significant networks of pharmacy businesses”.
The Guild alleged that payments payable under franchise arrangements were such that Pharmire and Lekarna were not likely to make any, or any ordinary, commercial profit from the said pharmacy businesses, and that payments under those arrangements had the effect of diverting all or substantially all of the profits of the businesses to the Ramsay defendants.
They also alleged that the Ramsay-branded pharmacies had caused “actual or apprehended financial damage” to the plaintiffs.
In a decision handed down on Friday, Justice Julie Ward, Chief Judge of the Supreme Court NSW Equity Division, found it was “not appropriate” for the proceedings to be brought in the context of a civil suit, especially having been commenced by an industry body, as opposed to the regulator, and by three competitors.
Justice Ward said her court was the wrong place to determine whether there has been conduct amounting to the commission of a criminal offence.
“There is jurisdiction for a civil court to make a declaration in relation to criminality … however the making of such a declaration is a matter of discretion and, as the case law suggests, is only in ‘exceptional cases’.”
She added that the three pharmacist plaintiffs “clearly have a personal interest in eliminating competition as much as they might also be said to have an interest in enforcing compliance by other pharmacists with the National Law.”
Justice Ward was not persuaded that the Pharmacy Guild has a special interest to seek declaratory relief beyond that of the general public, and said the complaint as to impact on its commercial income was “largely speculative”.
“Its role as a representative of the community pharmacy members it represents does not persuade me otherwise,” she said.
A spokesperson for the Guild said that the Guild has received the judgement and is considering it.
Ramsay Health Care did not wish to comment.
The question of costs has been reserved.