Pharmacy rejection quashed

The Federal Court of Australia has ordered the Australian Community Pharmacy Authority to reconsider a pharmacy’s application for approval

A company has successfully contended a 26 June decision made by the Australian Community Pharmacy Authority (ACPA) to recommend to the Secretary to the Department of Health that an application to supply pharmaceutical benefits at certain premises not be approved.

Debate over the application surrounded the correct interpretation of the word “supermarket” in the relevant national legislation, which sets out the rules for pharmacy applications.

Within the rules, a “supermarket means a retail store the primary business of which is the sale of a range of food, beverages, groceries and other domestic goods”.

On 19 March this year, the company had applied for approval to establish a new pharmacy at a premises in Logan, Queensland. The proposed premises were located in close proximity to a Coles supermarket within 500m by straight line—one of the requirements for the application.

This supermarket was reportedly to open from 7am on 21 March, a few days following the pharmacy approval application.

Supporting material included evidence that the Coles supermarket had been “fitted out and stocking and merchandising” had commenced; there were “trucks at the site, presumably to deliver goods, as well as marketing signs, price signs and weighing scales displayed and hanging in the supermarket area”. There was also “evidence of workers arriving at the site”.

On 26 June, the ACPA determined that the application not be approved after finding that the Coles supermarket was not trading on the day the application was made.

The applicant contended that ACPA erred in its conclusion that the relevant supermarket was not a “supermarket” for the purposes of the Rules. In seeking judicial review before the Federal Court of Australia, the applicant argued that the supermarket’s trading status was an “irrelevant consideration” and not a requirement of the Rules.

It also argued that the decision involved an error of law.

A second respondent that joined the proceedings, being a business with existing applications before the ACPA, submitted that the definition of “supermarket” in the Rules, being in the current tense, requires the store “to be selling the relevant range of goods at the date that the application is made”.

It contended that the words “not trading”, as used in the Decision, unambiguously “meant that the supermarket was not yet open and selling its range of products”.

ACPA agreed with the second respondent’s contention in this respect, further submitting that the Location Rules envisage that the primary business referred to is the act of selling the relevant goods.

However Honourable Justice Sarah Derrington, a Federal Court judge, found the definition of a retail store “does not require that, on that day, the retail store must be selling, or that sales must be taking place,” they said (emphasis theirs).

“In my view, the definition does not impose any requirement that a supermarket be open and selling goods in order that it be a supermarket for the purposes of the Rules.

“Whether or not the supermarket is ‘open to the public’ or ‘trading’ at particular points in time is irrelevant to its existence,” found Justice Derrington.

“In the face of the evidence of the commercial activities that the Coles Supermarket was clearly already undertaking, it would have been surprising for the Authority to have found, in an unqualified sense, that the Coles Supermarket ‘was not trading’.”

The judge quashed the 26 June decision by ACPA and remitted the application back to the Authority to consider it and make a recommendation according to law.

ACPA was ordered to pay the applicant’s costs.

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