Ranallo v The Australian Community Pharmacy Authority [2009] FCA 113 (19 February 2009)

Last Updated: 19 February 2009

FEDERAL COURT OF AUSTRALIA

Ranallo v The Australian Community Pharmacy Authority [2009] FCA 113

ADMINISTRATIVE LAW – application for review of decision of Australian Community Pharmacy Authority – Authority recommended that the applicant not be approved to supply pharmaceutical benefits from proposed premises – approval denied because premises did not have the ‘equivalent of at least 8 full-time prescribing medical practitioners’ practising at the Centre – error of law alleged – interpretation of terms ‘equivalent’ and ‘full-time’ – terms held to be directed at hours worked not output

Held: the application be dismissed.

Acts Interpretation Act 1901 (Cth) s 15AA
Administrative Decisions (Judicial Review) Act 1977 (Cth) s 5(1)(f)
National Health Act 1953 (Cth) ss 90, 99K, 99L

Acts Interpretation Act 1987 (NSW) s 33

National Health (Australian Community Pharmacy Authority Rules) Determination 2006 ss 6, 9, 10

Amalgamated Society of Engineers v Adelaide Steamship Co Ltd [1920] HCA 54; (1920) 28 CLR 129
Amber-Jane Ranallo v Australian Community Pharmacy Authority [2008] AATA 533
Australian Broadcasting Tribunal v Bond [1990] HCA 33; (1990) 170 CLR 321
CIC Insurance Ltd v Bankstown Football Club [1997] HCA 2; (1997) 187 CLR 384
Cody v J H Nelson Pty Ltd [1947] HCA 17; (1947) 74 CLR 629
Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation [1981] HCA 26; (1981) 147 CLR 297
Forsythe v Deputy Commissioner of Taxation [2007] HCA 8; (2007) 231 CLR 531
Harradine v Secretary, Department of Social Security [1989] FCA 200; (1989) 25 FCR 35
Lane and Others v Arrowcrest Group Pty Limited (t/a ROH Alloy Wheels) (1990) 27 FCR 427
Marshall v Director-General, Department of Transport [2001] HCA 37; (2001) 205 CLR 603
Miller v The Commonwealth [1904] HCA 34; (1904) 1 CLR 668
Mills v Meeking [1990] HCA 6; (1990) 169 CLR 214
Minister Administering the Crown Lands Act v NSW Aboriginal Land Council [2008] HCA 48; (2008) 249 ALR 602
Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355
Re Higham (1986) 5 ACLC 352
Saraswati v The Queen [1991] HCA 21; (1991) 172 CLR 1
Thompson and James v Australian Community Pharmacy Authority [1996] AATA 367
Thompson v Judge Byrne [1999] HCA 16; (1999) 196 CLR 141
Wacal Developments Pty Ltd v Realty Developments Pty Ltd [1978] HCA 30; (1978) 140 CLR 503

AMBER-JANE RANALLO v THE AUSTRALIAN COMMUNITY PHARMACY AUTHORITY
WAD 197 of 2008

MCKERRACHER J
19 FEBRUARY 2009
PERTH

IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY	WAD 197 of 2008

BETWEEN:

AMBER-JANE RANALLO Applicant

AND:	THE AUSTRALIAN COMMUNITY PHARMACY AUTHORITY Respondent

JUDGE:	MCKERRACHER J
DATE OF ORDER:	19 FEBRUARY 2009
WHERE MADE:	PERTH

THE COURT ORDERS THAT:

1. The application be dismissed.
2. The applicant is to pay the respondent’s costs to be taxed if not agreed.
   

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using eSearch on the Court’s website.

IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY	WAD 197 of 2008

BETWEEN:

AMBER-JANE RANALLO Applicant

AND:	THE AUSTRALIAN COMMUNITY PHARMACY AUTHORITY Respondent

JUDGE:	MCKERRACHER J
DATE:	19 FEBRUARY 2009
PLACE:	PERTH

REASONS FOR JUDGMENT

INTRODUCTION

1. The applicant (Ms Ranallo) seeks judicial review of a decision of the respondent (the Authority).
2. Ms Ranallo is a pharmacist. On 20 August 2007 she applied to the Authority for approval to supply pharmaceutical benefits at proposed premises at the Tandara Medical Centre in Gosnells, Western Australia (the Centre). On 28 September 2007 the Authority recommended that the application not be approved. On 13 February 2008, Ms Ranallo made a second application for approval under s 90 of the National Health Act 1953 (Cth) (the Act). On 25 July 2008, the Authority on consideration of the second application by Ms Ranallo, recommended that it be not approved under s 99K of the Act.
3. Ms Ranallo’s application required the cancellation of an existing approval in force in respect of other pharmacy premises and a relocation of the pharmacy to the Centre. On this application Ms Ranallo contended, but the Authority was not satisfied, that on the date of the application and for the preceding six months ‘the equivalent of at least 8 full-time prescribing medical practitioners’ were practising at the Centre.
4. Ms Ranallo applies pursuant to s 5(1)(f) of the Administrative Decisions (Judicial Review) Act 1977 (Cth) (the ADJR Act) which relevantly provides:

5 Applications for review of decisions

(1) A person who is aggrieved by a decision to which this Act applies that is made after the commencement of this Act may apply to the Federal Court or the Federal Magistrates Court for an order of review in respect of the decision on any one or more of the following grounds:

...

(f) that the decision involved an error of law, whether or not the error appears on the record of the decision;

...

5. The only ground for review which has been advanced is that the Authority made an error of law. If there has not been an error of law, no intervention is appropriate. Mason CJ in Australian Broadcasting Tribunal v Bond [1990] HCA 33; (1990) 170 CLR 321 emphasised that the ADJR Act was not intended to change the position of the Federal Court as having the obligation to review the legality, not the merits, of a decision. His Honour said at 341:

The Administrative Appeals Tribunal Act 1975 (Cth) (the AAT Act) provides specifically for review on the merits by the Administrative Appeals Tribunal. It is scarcely to be supposed that the Parliament, in so providing, nevertheless intended to invest the Federal Court with a similar jurisdiction under the AD(JR) Act, for that would be the effect of that Act if it were to confer jurisdiction to review findings of fact generally. Indeed, the concept of judicial review which finds literal expression in the title of the AD(JR) Act and in its operative provisions tells against the existence of such a wide jurisdiction.

THE ISSUES

6. This application raises a succinct point in relation to the relevant rules. Ms Ranallo contends that the Authority and the Tribunal adopted an interpretation of the rules which was too restrictive and that it was only that impermissibly restrictive approach that led to Ms Ranallo’s application being rejected. Determination of Ms Ranallo’s application requires analysis of a passage in the National Health (Australian Community Pharmacy Authority Rules) Determination 2006 (the Rules) in par 3(a) of item 112 in these terms:

3. The Authority is satisfied that:

(a) on the date the application is made and for the 6 months before that date, the equivalent of at least 8 full-time prescribing medical practitioners have been practising at the centre; and ...

(emphasis added)

7. In Ranallo v Australian Community Pharmacy Authority [2008] AATA 533, the Tribunal had held that the noun ‘equivalent’ bears its ordinary meaning, being that which is ‘equal in value, measure, force, effect, significance, etc’, but that the phrase ‘the equivalent of’ in par 3(a) ‘relates to full-time working hours, and does not relate to, or include consideration of, work output, including the number of patient attendances and medical services’ (at [37]).
8. It is common ground that for the whole of the relevant 6 month period there were in fact six medical practitioners practising at the Centre and each of those was a prescribing medical practitioner. The Authority applied the earlier decision of the Administrative Appeals Tribunal (the Tribunal) dealing with Ms Ranallo’s first application (Amber-Jane Ranallo [2008] AATA 533 at [36]) to the effect that the adjective ‘full-time’ was addressed to the working or practising hours of the relevant medical practitioners and not to the volume of work performed as reflected in, amongst other things, the number of patient attendances and medical services carried out by those practitioners. The Authority followed the view expressed by the Tribunal that the adjective ‘full-time’ referred to a medical practitioner who is working on a full-time (as opposed to a part-time) basis, that is, a medical practitioner who is working at least the numbers of hours comprising a normal working week. The Tribunal in Ranallo had accepted that this required a medical practitioner to be working for at least 38 hours per week spread over a normal working week of at least five days.
9. The Tribunal in Ranallo had also concluded that if the Minister had intended that the application for approval of the relocation of a pharmacy to a large medical centre be determined on the basis of the work output including the number of patient attendances, prescriptions and medical services of medical practitioners practising at the relevant medical centre, rather than on the number of hours worked by those medical practitioners, it would have been a simple matter to draft par 3(a) of item 112 in terms reflecting that intention.
10. The Authority concluded as had the Tribunal in Ranallo [2008] AATA 533, that the total number of hours worked by the six medical practitioners practising at the Centre throughout the relevant period was less than the requisite number of hours. It was on that basis that the Authority was not satisfied that on 13 February 2008, the date of the application under s 90 of the Act and for six months before that day the equivalent of at least 8 full-time prescribing medical practitioners were practising at the Centre.
11. The parties accept that the sole question is whether or not the Authority erred in concluding that the phrase ‘equivalent of’ in par 3(a) of item 112 of Sch 1 of the Rules can relate only to full-time working hours and may not relate to, or include consideration of, work output, including the number of patient attendances and medical services.
12. To understand the context of the expression, it is necessary to consider additional statutory provisions.

STATUTORY FRAMEWORK

13. The Authority is required to recommend to Medicare its approval of the provision of pharmaceutical services throughout Australia. Permission required to operate a pharmacy is dependent on a number of factors including the perceived community need for the particular pharmacy services. The Authority is bound by rules in considering such applications. The rules are said to be designed to achieve the perceived optimum community access to such services. In some geographic areas the number of pharmacies is higher than others, depending on community need. While access by all Australians to Pharmaceutical Benefit Scheme (PBS) medicines through pharmacies is said to be a high priority, so also is the availability of a commercially viable and flexible network of competing pharmacies. These principles are reflected in the statutory and regulatory materials to which I will refer.
14. Part 7 of the Act deals with pharmaceutical benefits which are defined in s 84. Section 85 of the Act provides that the benefits must be provided by the Commonwealth in accordance with the Part in respect of drugs and medicine preparations in relation to which the Part applies. This has become known as the PBS under which the Commonwealth subsidises the supply of certain drugs and medicines that are on the PBS list. Section 90 indicates the requirements for an approved pharmacist to nominate premises in respect of which it is desired to supply pharmaceutical benefit drugs.
15. The Authority’s powers are found predominantly in s 99K of the Act. The Authority’s recommendation is made pursuant to the Rules which are in turn, determined by the Minister under s 99L of the Act.
16. The recommendation of the Authority is then considered by the delegate of the Secretary which is currently Medicare Australia. This is provided for under s 90 of the Act.
17. Extracts from those provisions, relevantly, are as follows:
18. Section 90(1) reads:

90 Approved pharmacists

(1) Subject to this section, the Secretary may, upon application by a pharmacist for approval to supply pharmaceutical benefits at particular premises, approve that pharmacist for the purpose of supplying pharmaceutical benefits at those premises.
...

19. Section 99K of the Act provides:

99K Functions

(1) The functions of the Authority are:

(a) to consider applications under section 90; and

(b) to make, in respect of an application under section 90:

(i) a recommendation whether or not the applicant should be approved under that section in respect of particular premises; and

(ii) if an approval is recommended—recommendations as to the conditions (if any) to which the approval should be subject; and

(2) In making a recommendation under subsection (1), the Authority must comply with the relevant rules determined by the Minister under section 99L.

(3) All recommendations of the Authority under subsection (1) are to be made to the Secretary.

20. Section 99L of the Act reads:

99L Determination of rules by Minister

(1) The Minister must, by writing, determine the rules subject to which the Authority is to make recommendations under subsection 99K(1).
...

The Rules

21. Under s 9 of the Rules, it is provided:

9 When Authority must recommend approval of applicant

The Authority must recommend that an applicant be approved under section 90 of the Act in respect of particular premises if:

(a) for an application that involves the cancellation of an approval (the existing approval) that is in force in respect of approved premises (the existing premises):

(i) the application states that it is of a kind mentioned in column 2 of an item of Part 1 of Schedule 1; and

(ii) the requirements set out in column 3 of that item are met; and

(iii) the requirements set out in Schedule 2 and Part 1 of Schedule 3 are met; and

(iv) for an application described in column 2 of an item of Part 2 of Schedule 3 — the requirement set out in column 3 of that item is met; and

(b) for an application to which paragraph (a) does not apply:

(i) the application states that it is of a kind mentioned in column 2 of an item of Part 2 of Schedule 1; and

(ii) the requirements set out in column 3 of that item are met; and

(iii) the requirements set out in Schedule 2 are met.

22. The combined effect of ss 9 and 10 of the Rules is that, relevantly, if the Authority is not satisfied as to the following circumstances, it must recommend approval not be given:

112	Relocation to large medical centre	1. The proposed premises are in a large medical centre. ...
		3. The Authority is satisfied that: (a) on the date the application is made and for the 6 months before that date, the equivalent of at least 8 full-time prescribing medical practitioners have been practising at the centre; and (b) the applicant will make all reasonable attempts to ensure that the operating hours of the proposed premises will meet the needs of the patients of the medical centre. (emphasis added)

THE CONSTRUCTION ARGUMENT

23. The argument for Ms Ranallo was that the particular practice was so active that its output was the equivalent of at least 8 full-time prescribing medical practitioners. It was argued that output is clearly relevant to the consideration of whether or not approval should be given for a pharmacy to be established in a large medical centre as the ‘output’ will have a bearing on the need for pharmaceutical benefits.
24. The starting point for statutory construction is to give the words of the statute their natural and ordinary meaning. As Gaudron J observed in Marshall v Director-General, Department of Transport [2001] HCA 37; (2001) 205 CLR 603 at [37]:

It is a basic rule of statutory construction that legislative provisions are to be construed according to their natural and ordinary meaning unless that would lead to a result that the legislature must be taken not to have intended. The rule serves the important purpose of ensuring that those who are subject to the law understand the nature and extent of their rights and obligations. And because it serves that purpose, good reason must be shown before it will be concluded that the legislature did not intend the consequences that would flow if the provision in question were given its natural and ordinary meaning.

25. See also Amalgamated Society of Engineers v Adelaide Steamship Co Ltd [1920] HCA 54; (1920) 28 CLR 129 at 161-162, per Higgins J; Cody v J H Nelson Pty Ltd [1947] HCA 17; (1947) 74 CLR 629 at 648, per Dixon J; Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation [1981] HCA 26; (1981) 147 CLR 297 at 305, per Gibbs CJ; Mills v Meeking [1990] HCA 6; (1990) 169 CLR 214 at 223, per Mason CJ and Toohey J; cf at 235, per Dawson J; Thompson v Judge Byrne [1999] HCA 16; (1999) 196 CLR 141 at 149 [19], per Gleeson CJ, Gummow, Kirby and Callinan JJ; at 158 [45], per Gaudron J.
26. McHugh J, with whom Toohey J agreed, said in Saraswati v The Queen [1991] HCA 21; (1991) 172 CLR 1 at 22, except in such a case of manifest absurdity or unreasonableness:

... where the text of a legislative provision is grammatically capable of only one meaning and neither the context nor any purpose of the Act throws any real doubt on that meaning, the grammatical meaning is "the ordinary meaning" to be applied. A court cannot depart from "the ordinary meaning" of a legislative provision simply because that meaning produces anomalies

27. Section 33 of the Acts Interpretation Act 1987 (NSW) provides:

33. Regard to be had to purposes or objects of Acts and statutory rules

In the interpretation of a provision of an Act or statutory rule, a construction that would promote the purpose or object underlying the Act or statutory rule (whether or not that purpose or object is expressly stated in the Act or statutory rule or, in the case of a statutory rule, in the Act under which the rule was made) shall be preferred to a construction that would not promote that purpose or object.

28. Gibbs CJ in Cooper Brookes [1981] HCA 26; 147 CLR 297 at 305 said:

... if the language of a statutory provision is clear and unambiguous, and is consistent and harmonious with the other provisions of the enactment, and can be intelligibly applied to the subject matter with which it deals, it must be given its ordinary and grammatical meaning, even if it leads to a result that may seem inconvenient or unjust. ...

On the other hand, if two constructions are open, the court will obviously prefer that which will avoid what it considers to be inconvenience or injustice.

29. Mason and Wilson JJ in the same case observed at 321:

Quite obviously questions of degree arise. If the choice is between two strongly competing interpretations, as we have said, the advantage may lie with that which produces the fairer and more convenient operation so long as it conforms to the legislative intention. If, however, one interpretation has a powerful advantage in ordinary meaning and grammatical sense, it will only be displaced if its operation is perceived to be unintended.

30. The corresponding Commonwealth provision is s 15AA of the Acts Interpretation Act 1901 (Cth). The requirement that a court look to the purpose or object of the Act is no longer dependent on ambiguity. The mischief or purpose rule required an ambiguity or inconsistency before a court could have regard to purpose: Miller v The Commonwealth [1904] HCA 34; (1904) 1 CLR 668 at 674; Wacal Developments Pty Ltd v Realty Developments Pty Ltd [1978] HCA 30; (1978) 140 CLR 503 at 513 and see Judge Byrne [1999] HCA 16; 196 CLR 141 at [48] per Gaudron J.
31. In Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 McHugh, Gummow, Kirby and Hayne JJ at [69] said:

The primary object of statutory construction is to construe the relevant provision so that it is consistent with the language and purpose of all the provisions of the statute [See Taylor v Public Service Board (NSW) [1976] HCA 36; (1976) 137 CLR 208 at 213, per Barwick CJ.]. The meaning of the provision must be determined "by reference to the language of the instrument viewed as a whole" [Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation [1981] HCA 26; (1981) 147 CLR 297 at 320, per Mason and Wilson JJ. See also South West Water Authority v Rumble's [1985] AC 609 at 617, per Lord Scarman, "in the context of the legislation read as a whole".]. In Commissioner for Railways (NSW) v Agalianos [1955] HCA 27; [(1955) 92 CLR 390 at 397], Dixon CJ pointed out that "the context, the general purpose and policy of a provision and its consistency and fairness are surer guides to its meaning than the logic with which it is constructed". Thus, the process of construction must always begin by examining the context of the provision that is being construed [Toronto Suburban Railway Co v Toronto Corporation [1915] AC 590 at 597; Minister for Lands (NSW) v Jeremias [1917] HCA 41; (1917) 23 CLR 322 at 332; K & S Lake City Freighters Pty Ltd v Gordon & Gotch Ltd [1985] HCA 48; (1985) 157 CLR 309 at 312, per Gibbs CJ; at 315, per Mason J; at 321, per Deane J].

32. It follows that context must be considered in the first instance, not merely after ‘ambiguity’ is identified.
33. In the High Court’s reconsideration of the correctness of Mills v Meeking [1990] HCA 6; 169 CLR 214 in Judge Byrne [1999] HCA 16; 196 CLR 141 in which the authority of Mills v Meeking was upheld, Gaudron J held:

It is a fundamental rule of construction that, where the words of a stature are clear, they should be given their natural and ordinary meaning unless that would result in absurdity, conflict with some other provision of the statue or lead to a ‘result which cannot reasonably be supposed to have been the intention of the legislature’.

34. The purposive approach taken by Ms Ranallo is one aspect of the argument in support of a broader construction of the expression than that which has been adopted by the Authority. It was argued that the construction contended for by Ms Ranallo was preferable because such a construction accorded with the context of the Rule in its widest sense (CIC Insurance Ltd v Bankstown Football Club [1997] HCA 2; (1997) 187 CLR 384 at 408). Reliance was also placed on Forsythe v Deputy Commissioner of Taxation [2007] HCA 8; (2007) 231 CLR 531 at [39] and Minister Administering the Crown Lands Act v NSW Aboriginal Land Council [2008] HCA 48; (2008) 249 ALR 602 per Kirby J at [2]. Ms Ranallo also argued that the Authority’s narrow construction fails to pay close attention to the actual text itself and in this regard relies on the passage at [68] in NSW Aboriginal Land Council per Hayne, Heydon, Crennan and Kiefel JJ.
35. The context may include extrinsic material such as the history under which the rule was developed. The need for the Rule in its current form was first identified by the National Competition Review of Pharmacy in 2000. That review concluded that the then rules did not adequately allow for the fact that medical centres at large shopping centres may create sufficient and specialised demand to sustain a viable pharmaceutical benefits service. The review noted that submissions to it suggested that this demand could be measured by the number of patient consultations at a centre. However, and importantly, the review did not adopt those submissions.
36. At 93 it said:

There is a case for taking into account projections of the demand for pharmacy services arising from the medical centre, private hospital or aged care facility as a substitute for other criteria. Some parties to the Review suggested that this could, in the case of a medical centre, be based on the number of general practitioner consultations of that centre in a given period.

The paragraph went on to say:

Similarly, eligibility criteria could take into account the number of projected admissions (private hospitals) or residents and care recipients by category of care, (aged care facilities). Volumes of prescriptions per patient or resident could also be taken into account.

Then in the following paragraph the report continued:

The Review believes such empirical measures merely impose undue bureaucracy and red tape. It would be preferable for the Commonwealth, in consultation with other jurisdictions, the community pharmacy industry and profession and other relevant health and aged care providers, to adopt agreed definitions of eligible facilities. If a facility then satisfies an agreed statutory definition, it should simply be eligible to be a site for a new or relocated pharmacy or dispensary.

37. The relevant Rules were inserted as a part of a series of amendments that arose out of the Fourth Community Pharmacy Agreement Compilation. Relevantly, the operative parts of that Agreement emphasised the need for location rules that properly and fully responded to community need for pharmacist services. It was stressed that examples of those are Rules 24.1, 25.1 and 26.2 which respectively provide as follows:

24.1. The amendments to the Location Rules as set out in Attachment 1 are intended to provide greater flexibility to respond to community need for pharmacy services and to improve access to pharmacy services. These arrangements also aim to address those difficulties and anomalies in the Location Rules identified in the joint review of the Location Rules undertaken by the Commonwealth and the Guild in 2005.

25.1. The objectives of the Location Rules are to ensure:

1. all Australians have access to PBS medicines;
2. a commercially viable and sustainable network of community pharmacies dispensing PBS medicines;

100. improved efficiency through increased competition between pharmacies;

4. improved flexibility to respond to the community need for pharmacy services;
5. increased local access to community pharmacies for persons in rural and remote regions of Australia; and
6. continued development of an effective, efficient and well-distributed community pharmacy network in Australia.
   

26.2. The amendments to the Location Rules include relaxation of the Rules in the following three key areas:

a. large medical centres;

b. smaller shopping centres with a large supermarket; and

c. large single pharmacy rural towns.

38. Ms Ranallo argued that the Australian Community Pharmacy Authority Applications Handbook published by the Authority also suggests that the concept of equivalency is focussed on services provided by medical practitioners at the Centre and did not refer to hours worked. At p 59 of that Handbook it is said:

The pharmacy location rules do not specify what constitutes the equivalent of full-time so the ACPA have some flexibility in considering this. It may include a number of part time medical practitioners that, together, provide the same level of service that a full-time medical practitioner provides. Alternatively, a single medical practitioner may provide the same level of service that more than one full-time medical practitioner provides.

39. Once again it seems to me that these observations are quite capable of referring only to hours worked rather than productivity or output.
40. What was stressed by counsel for Ms Ranallo was that the actual work output of medical practitioners in terms of patients seen has an ‘obvious and strong correlation’ to prescription volumes and therefore the need for pharmacy services. This presumption was not accepted by the Authority. The Authority contended, correctly in my view, that while that presumption may be so for some practices, other practices may adopt different styles of medical service provision which does not necessarily require a significant number of or volume of prescriptions for pharmacy services. The assumption therefore that a higher number of patients will always produce a higher number of prescriptions was an assumption for which there was no evidentiary basis. As counsel for the Authority observed:

... a medical practice or centre having a large number of patients, may because of the nature of the practice and the location where the practice is, may in fact, have a smaller number of pharmaceutical benefits than a practice which has a much smaller number of patients.

Equivalent

41. Ms Ranallo submits that the word ‘equivalent’ is not directed, as it is suggested the Deputy President concluded in the Tribunal, solely to the adjective ‘full-time’. Rather, it was contended, ‘equivalent’ was directed to the composite expression ‘full-time prescribing medical practitioner’.
42. There are various dictionary definitions for the word ‘equivalent’: such as being ‘equal in value, function or meaning’ as defined in The New Oxford Dictionary 1998, Oxford University, New York or ‘equal in power, efficacy or import having equal or corresponding significance’ or ‘something equal in value or worth; also, something tantamount’ as in the Shorter Oxford English Dictionary on Historical Principles, Clarendon Press, 1980 (ed). In particular, these definitions were in contrast, it was said, to meaning ‘the same as’. In particular, it was argued that what is ‘equal’ does not necessarily mean what is ‘identical to’: Re Higham (1986) 5 ACLC 352.
43. To support this contention it was argued that the use of the word ‘prescribing’ suggests that the activity or work output is a relevant matter for the Authority to consider in determining equivalency. This, it is said, is supported in the definition of ‘prescribing medical practitioner’ to be found in the Rules which expressly refers to the issuing of prescriptions for pharmaceutical benefits. The argument is that it is not just the time spent by the medical practitioner but what the practitioner does in that time. However, in my view, ‘prescribing’ where it appears in the Rules is simply a descriptive qualifier to distinguish a prescribing medical practitioner from one who for whatever reason, may not prescribe pharmaceutical benefits.
44. Ms Ranallo contends that to simply compute the number of hours practitioners were working, would not be an appropriate discharge of the discretionary deliberations which the Rules required. To do so would just be a mechanical mathematical calculation. In contrast, it was argued for Ms Ranallo that as the Rule required the Authority to ‘be satisfied’, an element of discretion was reposed in the Authority in determining what was equivalent (Re Higham 5 ACLC 352 at [370]). Ms Ranallo contends that the Rule was not limited to that simple mathematical exercise and if that was what was intended, the Rules could simply have specified the minimum number of doctor hours at a centre. In this regard, it was submitted that it was relevant to note that the terminology used in the Rule was in contrast to par 3(a) or par 3(b) of item 112 of the Rules and item (b) of the definition of large medical centre which both expressly referred to hours.
45. Although this approach may be arguable, I prefer the submission of the Authority that:

There is, ..., some discretion so that if there are a number of doctors who might be regarded as full-time in practice and a number of doctors who might be considered part-time and their total hours of practice at the centre was, for argument’s sake, 300 rather than the mathematical 304, which is eight times 38, then it would be, nevertheless, within the authority’s discretion to be satisfied that there was the equivalent of at least eight full-time medical practitioners. Thirty-eight hours, ..., is simply used as a guideline, as a benchmark - as was set out in Ms Prstec’s affidavit – on the basis that it’s a generally accepted community standard.

REASONING

46. As a starting point, I consider that the determination of whether a person is engaged in a particular activity, occupation or employment on a ‘full-time’ basis will be determined by reference to the amount of time which a person devotes to that activity, occupation or employment. In Lane and Others v Arrowcrest Group Pty Limited (t/a ROH Alloy Wheels) (1990) 27 FCR 427 at 452-453 von Doussa J said:

In a particular case, the decision whether the hours worked in the manner laid down are such that the employee is working "on a full-time basis" will take into account the pattern of the rosters under which the employee works, and the number of hours overall worked each week. In ordinary parlance can the commitment required of the employee to the employment fairly be described as full-time according to current community standards? Viewed broadly this construction in my opinion more closely accords with the general intention of the parties as disclosed by the whole award than the construction contended for by the respondent. The respondent's argument that an employee who regularly works the same shifts as weekly employees and who works between 45 and 60 hours per weekly work cycle, is nevertheless to be treated as other than in "full-time" employment because once each week a shift is deliberately cut short by six minutes to disqualify the employee from the benefit which cl 6(e)(i) is intended to bestow, is, at the least, unreasonable. I have no hesitation in concluding that the scope for artificial practices like this was not within the contemplation of the parties.

47. See also Harradine v Secretary, Department of Social Security [1989] FCA 200; (1989) 25 FCR 35 at 47 per von Doussa J and at 42 per French J.
48. It is necessary to consider the meaning of the expression ‘full-time’ in the full context of ‘at least 8 full-time prescribing medical practitioners’. It is not possible to determine what constitutes ‘the equivalent of’ until the meaning of the full expression is first determined. ‘Full-time’ is defined in the Macquarie Dictionary Online Website as being as follows:

adjective 1. of, or relating to, or taking all the normal working hours (opposed to part-time) 2. of, or relating to, something which occupies a person all the time. 3. Sport of or relating to the time at which play is to end: the full-time whistle – adverb 4. during all normal working hours. – noun 5. Sport the time at which play is to end.

49. It follows in my view that the expression ‘full-time prescribing medical practitioners’ is referring to medical practitioners who are engaged in providing general practice services on a full-time basis as opposed to providing them on a part-time basis. The expression, therefore, is concerned with the number of hours worked by prescribing medical practitioners over a normal working week so as to determine who may be classed as being full-time. A ‘full-time’ prescribing medical practitioner for the purpose of par 3(a) is one who works at least 38 hours per week over a normal working week of at least five days.
50. It does not appear to me that this approach results in any absurdity. Further I consider it is consistent with the purpose of ensuring reasonable public access to viable pharmacies. Given the ordinary meaning of full-time in relation to a person’s occupation or employment, I am unable to identify any error of law in the Authority’s conclusion.

Does ‘the equivalent of’ affect the approach?

51. Although in this case the evidence demonstrated that a measure other than hours worked may be obtained, there was no clear indication that this would always be so. Paragraph 3(a) of item 112 of the Rules could have been expressed such that it required the large medical centre in question to have the equivalent of at least 8 full-time workload equivalent (FWE) general practitioners (as that term is used by Medicare) practising at the Centre. See the evidence of Ms Angela Mikalauskas. That the Rules do not refer to the measure of output tends to leave the conventional meaning of the expression ‘full-time’ as the appropriate yardstick.
52. Ms Mikalauskas affidavit evidence confirmed that:

...

6. A simple headcount of GPs based upon as little as one Medicare service processed during the year does not provide the most accurate indication of GP workforce activity or supply. A simple headcount on this basis treats all GPs equally, though there is significant variation in the hours worked and the number and type of services provided by GPs.
7. Measures used in other industries to calculate workforce activity or supply are usually based on the number of hours worked. The Medicare system does not record the actual hours worked by general practitioners. However, a wealth of information about the services provided to patients by GPs is captured. The vast majority of work undertaken by most GPs involves consultations. More than 85% of GP activity is represented by standard and long consultations, being Medicare Items 23 and 36 respectively.
8. The main difference between the standard and long consultations relates mostly to the time taken to perform the service rather than any other factors. A standard consultation is one that lasts less than 20 minutes, and a long consultation is one that lasts between 20 and less than 40 minutes.

...

12. FWE is a measure of medical workforce activity or supply that takes into account the differing working patterns of doctors. FWE is calculated by dividing each doctor’s Medicare billing for the previous 12 months by the average billing of full-time doctors for the year. Medicare billing is defined as the total schedule fee value of all Medicare items claimed by the general practitioner (GP), excluding Bulk Billing Incentive items 10990-10992.
13. The threshold income which defines full-time doctors is indexed on an annual basis in accordance with CPI figures published by the Australian Bureau of Statistics. When a GP provides services in more than one practice location, their FWE is calculated based on the share of the total schedule fee billing provided at each location. (emphasis added)

...

53. In my view there does remain a discretionary component by varying the combinations so that some practitioners may work longer than 38 hours per week, some may work fewer but as long as the aggregate can equate to, on a mathematical computation, practitioners each working a 38 hour week, the requirements of the Rule would be satisfied.
54. Support for this approach may be found from two other sources.
55. In Thompson and James v Australian Community Pharmacy Authority [1996] AATA 367 which dealt with the former 1995 Rules, the same argument presently being advanced was considered.
56. In that decision of the Tribunal at [47]-[51] inclusive the learned Senior Member said:
    47. In a document which is Annexure D to Exibit (sic) A1, it is stated on behalf of the Kable Street Practice that it sees 70 patients a week in the Glossodia surgery and visits patients at home twice a week on average. Of the patients, one half require prescriptions to be written. In addition 50 patients a week, who are residents of Glossodia, Freemans Reach or East Kurrajong, visit the Kable Street practice in Windsor in the morning and at least 50 Glossodia patients a week attend the Kable Street surgery in the afternoons and evening when the Glossodia surgery is unattended.
        
    48. At present the medical practice has no commitment to opening for longer hours at Glossodia .
        
    49. The Applicants argue that on the bases of the number of patients from the catchment area seen both at Glossodia and at Windsor, the Kable Street practice is effectively the "equivalent" of a full-time medical practitioner at Glossodia.
        
    50. The word "equivalent is defined in the Macquarie Dictionary as: "1. Equal in value, measure, force, effect, significance, etc. ..."
        
    51. In my opinion the reference to the equivalent of a full-time medical practitioner involves the notion of a medical practice conducted on the basis of a morning surgery, a period spent away from the surgery, then a late afternoon or evening surgery. This may be undertaken either alone or in conjunction with other practitioners or practices. It may be a neat question whether an after hours locum service would qualify but, whatever permutations may be suggested in future cases, I cannot see how a medical practice which, within the catchment area, is available for consultations only between the hours of 9am to 1pm Monday to Friday qualifies as the equivalent of a full- time medical practitioner.
57. Finally, in the Explanatory Statement issued by the Minister at p 16 it is said:

Relocation to large medical centre

Item 112 applies to the relocation of an approval into a large medical centre. It aims to facilitate timely and convenient access to the supply of pharmaceutical benefits for patients of large medical centres that operate extended hours.

Sub-item 1 requires that the proposed premises are situated in a large medical. Large medical centre is defined at subsection 6(1) of Part 1 as a medical centre that is under single management and operates for at least 55 hours each week. (emphasis added)

58. At p 17 the Minister said:

Paragraph 3(a) requires that, on the date the application is made and for the proceeding six months, the equivalent of at least eight full-time prescribing medical practitioners that provide general practice services in that centre and issue prescriptions for pharmaceutical benefits, have been practising in that medical centre. (emphasis added)

59. The Authority has mirrored this approach. In the Authority’s Handbook, the Authority provides some guidance in relation to an application saying at p 59:

The pharmacy location rules do not specify what constitutes the equivalent of full-time so the ACPA has some flexibility in considering this. It may include a number of part-time medical practitioners that, together, provide the same level of service that a full-time medical practitioner provides. Alternatively, a single medical practitioner may provide the same level of service that more than one full-time medical practitioner provides.

Evidence addressing this requirement may include a statement or statutory declaration from the management of the medical centre regarding the hours that the centre operates and the hours that each medical practitioner practices, copies of any advertisements regarding the hours that the practice operates, a practice information sheet and the provider numbers for the medical practitioners. (emphasis added)

CONCLUSION

60. In my view the natural and ordinary meaning of the expression ‘full-time prescribing medical practitioners’ (emphasis added) is a meaning which relates to the time that those practitioners spend in carrying out their duties or being available to carry out their duties. In my view, both the Tribunal’s original interpretation and the Authority’s adoption of that interpretation in the second application were correct.
61. To measure ‘full-time’ by reference to productivity or output rather than to hours in attendance, could introduce any number of arguments as to how productivity in the context of this legislation scheme should be measured. I do not consider that anything in the scheme itself or references to it in the secondary materials, would support the introduction of potentially subjective and possibly vague concepts in considering whether or not the equivalent of at least 8 full-time prescribing medical practitioners have been practising at the Centre at the date of the application and for six months before that date. Accordingly, I am unable to conclude that the Authority was in error.
62. I will order:
    1. The application be dismissed.
    2. The applicant is to pay the respondent’s costs to be taxed if not agreed.
       

I certify that the preceding sixty-two (62) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice McKerracher.

Associate:

Dated: 19 February 2009

Counsel for the Applicant:	PA Sheiner
Solicitor for the Applicant:	Christensen Vaughan
Counsel for the Respondent:	P Macliver
Solicitor for the Respondent:	Australian Government Solicitor

Date of Hearing:	13 November 2008
Date of Judgment:	19 February 2009