Crime or competition?


In the next instalment of the Guild-Ramsay legal saga, the two sides have battled it out over pharmacy ownership and business competition in the courtroom

The Pharmacy Guild of Australia and Ramsay Health Care legal teams presented their arguments over the validity of Ramsay ownership arrangements in the Supreme Court of NSW in Sydney on Monday.

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.

They are 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): Ramsay Pharmacy Parkside Plaza, Ramsay Pharmacy Grafton, Ramsay Pharmacy Shoalhaven, Ramsay Pharmacy East Albury, and Ramsay Pharmacy Caringbah.

Guild legal counsel alleged that the Ramsay-branded pharmacies had caused “actual or apprehended financial damage” to the plaintiffs.

In an affidavit submitted to the court, a South Grafton pharmacy owner shared how their business had lost staff and was forced to increase wages and marketing expenses following the entrance of the Ramsay-branded pharmacy into their small town.

“We say these expenses amount to significant detriment,” said Guild counsel.

They said these expenses also extend to the owner of Coady’s Pharmacy in Caringbah, who stated in her affidavit that Ramsay Pharmacy Caringbah had opened just 190 metres away from her pharmacy.

While she had an interest in purchasing the pharmacy before it had been sold to Ramsay, Ramsay had reportedly outbid her by making an offer “well over” what the market price would have been.

Guild counsel argued the Ramsay acquisition had caused her harm through loss of opportunity to purchase.

“The future potential detriment is enough to seek declarations and relief,” Guild legal representatives argued as part of their Notice of Motion before Justice Julie Ward, Chief Judge of the Supreme Court NSW Equity Division.

They 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”.

“What the Court can ask is – are these arrangements consistent with legislation that does restrict competition?” they said, referring to Schedule 5F of the Health Practitioner Regulation National Law (NSW), which lays out restrictions on who may have financial interest in a pharmacy business in the state.

Meanwhile Ramsay counsel argued that based on that legislation – which provides penalties for its contravention – the Guild and its plaintiffs were alleging “the commission of a historical and continuing criminal offence” by Ramsay.

“There is no merit whatsoever in that which the Guild has advanced, that these are not proceedings concerning the commission of a criminal offence.”

It was “striking” that the pharmacy regulators in NSW were not a party to the proceedings, they added, labelling the pleading both “utterly speculative” and “embarrassing”.

Ramsay counsel also alleged the proceedings had been commenced based on confidential documents that had been unlawfully obtained under Freedom of Information in WA – a claim that the Guild parties denied.

Ramsay said that the matter was really about competition.

“Guild pharmacists are saying ‘but for this I would not be facing the threat of competition’.

“It can’t be that every pharmacy in competition with each other thereby gets standings and takes over the job of the regulator,” said the defendants.

“Pharmacies get local protections that you wouldn’t be able to justify in any other trade.”

Justice Ward queried the Guild’s call for a declaration.

“Has there been conduct that amounts to a criminal offence?” she asked, calling on them to persuade her that what they were seeking was not a declaration of commission of a criminal offence, or that relief should be commenced in the equity division of the court.

“Leave aside the Guild, I am troubled that individual pharmacists want declaration of criminal conduct against competitors or competitive arrangements,” she said.

Guild counsel emphasised that they are not intending to bring criminal proceedings, and said the matter is not likely to end up in criminal court “as the regulator is not opposing what is occurring”.

“We’re seeking a declaration that there is a financial interest,” they said.

“This is not an anti-competitive fight, it is to preserve the community pharmacy situation. We would submit the Guild has standing to raise that.”

They pointed out that individual Guild members are subject to restrictions regarding who can own a pharmacy, location and number of pharmacies.

“They do have an interest that everyone else complies with the same rules and statutory regime,” said Guild representatives.

Justice Ward reserved her judgement, with a substantive hearing to be held at a future date.

You may be interested in reading:

‘This is clearly going to be a hotly contested case.’

The fight is on

See you in court

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