A recent Federal Court decision is a timely reminder that Ministers should not rely entirely on briefing notes before making decisions – and when the decision is defended, it is the Minister who is expected to give evidence.
The Federal Court recently found that a Minister had failed to “consider any comments, information or documents” received in response to “an invitation from the Minister” issued pursuant to section 90D(3) of the National Health Act 1953 (Cth). The evidence available to the Court did not disclose that the Minister gave “proper, genuine and realistic consideration” of that material.
The case is a reminder that there are likely to be “forensic consequences” for Ministers relying entirely on briefing notes prepared by their staff which may fail to fully and/or accurately set out or summarise the information, comments and documents to which a Minister is legally required to have regard in his or her exercise of discretion.
In the Judicial Review Proceeding:
The dispute was about whether YL Health should be allowed to operate its pharmacy in close proximity to those operated by Mr Stambe.
The National Health Act 1953 (Cth) (the Act) confers a power on both the Australian Consumer Pharmacy Authority (the Authority) and the Minister to approve or otherwise the operation of pharmacies at specific premises.
The National Health (Australian Community Pharmacy Authority Rules) Determination 2011 (Cth) are made pursuant to section 99L of the Act (the Rules).
The Authority can recommend rejection of an application on the basis that the proposed pharmacy does not meet the requirements set out in the Rules.
Section 6 of the Act provides that the Minister may delegate their powers to a person, including the Secretary of the Department of Health (Secretary), subject to certain exclusions.
Section 90 of the Act provides that the Secretary may approve an application for a pharmacist to supply pharmaceutical benefits at a particular premises.
Section 90A(2) of the Act provides the Minister may, in certain circumstances, substitute for a Secretary’s decision not to approve an application, a decision approving the application if the Minister is satisfied that:
Section 90(3) defines the terms “community” and “reasonable access” for the purposes of s90A(2) as being what “in the opinion of the Minister…constitutes a community” and “access that, in the opinion of the Minister, is reasonable“.
Section 90B of the Act provides that the pharmacist whose application has been rejected by the Secretary may request that the Minister exercise his or her powers under section 90A(2) (a Request).
Section 90D provides that the Minister may, by notice in writing given to a person, require that person to “provide such further information or produce such further documents, to the Minister as the Minister specified, within the period specified in the notice“.
Section 5 of the Administrative Decisions (Judicial Review) Act 1977 (Cth) (the ADJR Act) provides that any person “who is aggrieved by a decision to which this Act applies…may apply to the Federal Court…for an order of review in respect of the decision on any one of more of the following grounds…”. The list of grounds are set out in subsections 5(1)(a) – (j).
YL Health had received approval from the Australian Consumer Pharmacy Authority (the Authority) to supply pharmaceuticals from the 24 Hour Pharmacy.
That decision was the subject of proceedings brought by Mr Stambe in the Federal Court of Australia in 2016 in which the Court set aside the decision of the Authority and remitted the approval application back to the Authority.
Upon the application being remitted to the Authority, the Authority rejected the application for the 24 Hour Pharmacy on the basis that it did not comply with the Rules. That is “it was less than 500 metres from the nearest approved pharmacy premises” (being Mr Stambe’s pharmacies) and the “premises were not in a shopping centre that met the definition of a large shopping centre“. Stambe’s pharmacies were respectively, 136m and 239m from the proposed premises. This decision was made on 9 May 2017.
On 17 May 2017, YL Health made a Request for the Minister to exercise the power to substitute his decision for that of the Secretary pursuant to section 90A(2) of the Act, that is, that YL Health’s 24 Hour Pharmacy should be approved.
On 8 August 2017, the Minister elected to consider the Request.
The Minister sent a notice to Mr Stambe pursuant to section 90D(b)(ii) of the Act requesting further information. In response to that notice, further comments, information and documents were provided to the Minister (Mr Stambe’s Material).
On 1 November 2017, the Minister approved YL’s Request (and approved the pharmacy) and subsequently, after a request from Mr Stambe, gave reasons for his decision on 21 November 2017 (the Reasons).
In the Reasons, the Minister listed correspondence from Mr Stambe and Mr Stambe’s Material as being documents to which he had regard in reaching his decision. However, none of the issues raised in Mr Stambe’s Material were addressed in the Reasons.
On 15 December 2017 the Proceeding was commenced seeking judicial review of the Minister’s decision.
Mr Stambe successfully argued pursuant to section 5(1)(b) of the ADJR Act that “procedures that were required by law to be observed in connection with the making of the decision were not observed“.
Mortimer J, went into great detail regarding the applicable law including the principles set out by the Full Court in Bat Advocacy NSW Inc v Minister for Environment Protection, Heritage and the Arts  FCAFC 59 at  –  including:
Her Honour noted the evidence of the Minister’s conduct and the observance of procedures was scant and various inferences were drawn from the facts available to the Court. Her Honour noted how careful the Court must be in drawing inferences to avoid speculating as to various matters.
The evidence indicated that the Minister relied entirely upon a briefing note prepared by his staff.
Further, it was noted that the briefing note included inaccurate and/or inadequate summaries of matters set out in Mr Stambe’s Material and failed to mention material facts highly relevant to the decision set out in Mr Stambe’s Material, including, for example, the pharmacy to population ratio for Mt Waverley (which was significantly below the Victorian average).
The Minister produced no evidence to the Court. An “officer of the Department” swore what Mortimer J described as “institutional affidavits“. Her Honour made it clear that the Court expected any evidence about the decision-making process to be proffered by the Minister himself.
Her Honour declined to draw a number of inferences YL Health invited her to make. Her Honour held the Minister’s Reasons were “drafted by departmental officers and lawyers well after the exercise of the power and in anticipation of legal proceedings and the connection with the Minister’s actual reasoning process is an ex post facto adoption of a document as drafted“.
Further, Her Honour opined that she does not “suggest there is anything improper with the method chosen by the Minister, but there may well be forensic consequences for the use of that method“.
Her Honour ultimately found that:
“…there was no active intellectual engagement by the minister with what the applicant had said. These matters may also establish there was no active intellectual engagement by those advising the minister but this is beside the point. I am satisfied the applicant has established that the minister did not consider his response, as the law required him to do so”.
As to the outcome, her Honour left it to the parties to agree appropriate orders. On 10 April 2019, the Court ordered that:
Any person exercising a discretion which may be subject to judicial review should:
Scott Couper, Partner
Judith Hishon, Senior Associate
 Stambe v Minister for Health  FCA 43 and Stambe v Minister for Health (No 2)  FCA 479