COURT
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
Spender J(1)

CWDS
  Administrative Law - judicial review - decision of Pharmacy Restructuring
Authority not to recommend that approval be given to supply pharmaceutical
benefits from particular premises - Minister's determination concerning
applications for approval to supply pharmaceutical benefits - whether
guidelines valid - ordinary meaning of 'cancel' not retrospective - meaning of
'change of ownership arrangements of the premises'.
  National Health Act 1953 ss. 89, 90, 98, 99L

HRNG
SYDNEY, 2 and 3 November 1992
#DATE 23:4:1993, BRISBANE
  Counsel for the applicants:         Mr J. W. Shaw QC
                                      with Mr A. Hughes
  Instructed by:                      Elizabeth Johnstone
  Counsel for the first,
second, third, and
sixth respondents:                    Miss M. J. Beazley QC with Miss
                                      R. M. Henderson
  Instructed by:                      Australian Government Solicitor
  Counsel for the fifth
respondent:                           Mr G. C. Lindsay
  Instructed by:                      Michell Sillar McPhee Meyer

ORDER
THE COURT ORDERS THAT:   1.   The decision of the first respondent of 29 April
1992 not to recommend that an approval be given to the second applicant, Gary
Ian Smoker, to supply pharmaceutical benefits from the premises at 85 Burwood
Road, Burwood, New South Wales, be set aside.
  2.   The matter be remitted to the Pharmacy Restructuring Authority for
further consideration, with or without further evidence, according to law.
NOTE: Settlement and entry of orders is dealt with in Order 36 of the Federal
Court Rules.

JUDGE1
SPENDER J  This is an application for an order of review pursuant to the
Administrative Decisions (Judicial Review) Act 1977 ('the ADJR Act') of a
decision of the Pharmacy Restructuring Authority ('PRA') not to recommend that
an approval be given to Mr Gary Ian Smoker under the provisions of the
National Health Act 1953 ('the Act') to supply pharmaceutical benefits with
respect to premises at 85 Burwood Road, Burwood N.S.W.
2.  Associated with that application is a claim by the applicants seeking to
have a decision by the delegate of the Secretary of the Department of Health,
Housing and Community Services made on 18 April 1991 to cancel the approval of
Ms Robin Allan, the fourth respondent, with respect to the premises at 85
Burwood Road, Burwood N.S.W. quashed.
3.  The attack on these two primary decisions, as argued, had four elements.
4.  First, the applicants seek a declaration that determinations made by the
Honourable Peter Staples, the Minister of State for Aged, Family and Health
Services, purporting to promulgate 'guidelines' which the PRA was obliged to
follow in considering whether to recommend approval of a registered pharmacist
in respect of particular premises, and which determinations purported to be
made pursuant to s. 99L of the Act on 9 January 1991 and 16 May 1991 are void
ab initio.
5.  Secondly, and alternatively, if the guidelines embodied in the
determinations are valid exercises of the power conferred on the Minister, it
was submitted that Mr Smoker was within the guideline 3(f) and as a
consequence approval should have been given to him to supply pharmaceutical
benefits from the premises at 85 Burwood Road, Burwood.
6.  Thirdly, the applicants submitted that the decision of the delegate of the
Secretary on 18 April 1991 purporting to cancel the approval of Robin Allan
for and on behalf of L. C. Allan, as from 31 March 1991 was of no effect,
there being no power pursuant to s. 98 of the Act to cancel an approval with
retrospective effect.
7.  Finally, it was submitted on behalf of the applicants that the applicants
were denied natural justice.
8.  The first applicant, Cenrin Pty Limited ('Cenrin') is a company which
operates a 24 hour medical centre at 85 Burwood Road, Burwood and at other
places in New South Wales and Queensland.  The second applicant, Mr Smoker, is
a pharmacist who at all material times was registered in New South Wales.  The
PRA is an administrative body set up pursuant to Division 4B of the Act and
its functions include the making of recommendations whether or not registered
pharmacists should be approved in respect of particular premises for the
purpose of supplying pharmaceutical benefits at or from those premises.
9.  Ms Allan, the fourth respondent, is a pharmacist registered in New South
Wales who was the pharmacist approved up until 18 April 1991, holding approval
No. 2181T, in respect of the premises at 85 Burwood Road.  A 24 hour medical
centre was provided at those premises, having provision for general
practitioners, specialists, radiographers and so on and included a
pharmaceutical dispensary.  The Pharmacy Guild of Australia ('P.G.A.) is an
organisation of employers registered pursuant to the provisions of the
Industrial Relations Act 1988.
10.  In 1990 there were discussions between officers of the Commonwealth and
the P.G.A., and a number of agreements were reached, one of the purposes of
the agreements being to rationalise the number of pharmacies.  On 30 October
1991 assent was given to s. 98BAA of the Act, requiring the Pharmaceutical
Benefits Remuneration Tribunal to give effect to an agreement reached between
the Minister and the P.G.A.
11.  After events not presently relevant, on 6 December 1990, an agreement
relating to remuneration for approved pharmacists and an agreement relating to
a restructuring of the community pharmacy industry until 1995 were reached
between the Minister and the P.G.A.  On 18 December 1990, assent was given to
Division 4B of the Act, establishing the PRA and introducing provisions into
the Act which are of direct relevance to the present proceedings.
12.  Under the Act, "pharmacist" is defined in s. 4 to mean:-
    "a person registered as a pharmacist or pharmaceutical
    chemist under a law of a State or Territory providing for
    the registration of pharmacists or pharmaceutical
    chemists, and includes:
    (a)   a friendly society or other body of persons
          (whether corporate or unincorporate) carrying on
          business as a pharmacist; and
    (b)   the legal personal representative of a deceased
          pharmacist carrying on the business of that
          deceased pharmacist; "
13.  By s. 4, "Secretary", where the expression is used in a provision that is
administered solely by the Minister for Health, means the Secretary to the
Department of Health.
14.  Section 6(5) provides:
    "The Secretary (to the Department of Health) may, either
    generally or as otherwise provided by the instrument of
    delegation, by writing signed by the Secretary, delegate
    to a person all or any of the Secretary's powers under
    this Act...  ...other than:
    (a)   this power of delegation; or
    (b)   the Secretary's powers under section 95."
15.  Section 6(6) provides:
    "A power so delegated under subsection (5), when exercised
    by the delegate, shall, for the purposes of this Act or
    the regulations, be deemed to have been exercised by the
    Secretary. "
16.  Part VII of the Act deals with "Pharmaceutical Benefits". By s. 84, a
pharmaceutical benefit means a drug or medicinal preparation in relation to
which, by virtue of s. 85, Part VII applies.  Section 85 specifies the drugs
and medicinal preparations in relation to which Part VII applies.
17.  Section 89 relevantly provides:
    "A person is not entitled to receive a pharmaceutical
    benefit unless it is supplied:
    (a)   by an approved pharmacist, at or from premises in
          respect of which the pharmacist is for the time
          being approved, on presentation of a prescription
          written by a medical practitioner or a
          participating dental practitioner in accordance
          with this Act and the regulations, or, in such
          circumstances as are prescribed, on communication
          to that pharmacist, in the prescribed manner, of a
          prescription of a medical practitioner or a
          participating dental practitioner;... "
18.  Section 90 is central to the present proceedings.  It provides:
    "(1) Subject to this section, the Secretary may, upon
    application by a pharmacist who is willing to supply
    pharmaceutical benefits on demand at particular premises,
    approve that pharmacist for the purpose of supplying
    pharmaceutical benefits at or from those premises.
    (2) Where a pharmacist desires to supply pharmaceutical
    benefits at or from several premises (being premises at
    which he or she carries on, or is about to carry on,
    business as a pharmacist) a separate application shall be
    made in respect of each of the premises and, where
    approval is granted in respect of 2 or more premises, a
    separate approval shall be granted in respect of each of
    the premises.
    (3) Subject to this section, where an approved pharmacist
    desires to supply pharmaceutical benefits at or from
    premises (being premises at which the pharmacist carries
    on, or is about to carry on, business as a pharmacist)
    other than premises in respect of which approval has been
    granted, the Secretary may on application by the approved
    pharmacist, grant approval in respect of those other
    premises.
    (3A) An application under this section must be referred
    to the Authority.
    (3B) An approval may be granted under this section only
    if the Authority has recommended the grant of the
    approval, but the Secretary may refuse to grant an
    approval even if the grant has been recommended by the
    Authority.
    (3C) Unless sooner repealed, subsections (3A) and (3B)
    cease to have effect at the end of 31 March 1995.
    ... "
19.  Cancellation of the approval provided for by s. 90 is dealt with by s.
98, which relevantly provides:
    "(1)    Whenever:
    (a) an approved pharmacist requests that his or her
        approval under section 90 in respect of all or any of
        the premises in respect of which he or she is
        approved be cancelled;
    (aa)  a participating dental practitioner requests that
          his or her approval as a participating dental
          practitioner under section 84A be cancelled; or
    (b) an approved medical practitioner requests that his or
        her approval in respect of an area under section 92
        be cancelled;
    the Secretary shall cancel that approval.
    (2) Where:
    (a) an approved pharmacist gives the Secretary notice in
        writing that the pharmacist has ceased to carry on
        business as a pharmacist at premises in respect of
        which the pharmacist is approved; or
    (b) an approved medical practitioner gives the Secretary
        notice in writing that the medical practitioner has
        ceased to practise in the area in respect of which
        the medical practitioner is approved;
    the Secretary may cancel the approval.
    (3) Where the Secretary is satisfied that an approved
    pharmacist has, for a period of not less than 6 months,
    ceased to carry on business as a pharmacist at premises
    in respect of which the pharmacist is approved, the
    Secretary may, by notice in writing to the pharmacist,
    cancel the approval of the pharmacist under section 92.
    ... "
20.  In Division IVB, the Pharmacy Restructuring Authority is established by
s. 99J, and by s. 99K(1) the functions of the Authority are, inter alia:
    "(a)   to consider applications made by pharmacists under
    section 90...; and
    (b)   to make, in the case of an application under section
    90, a recommendation whether or not the applicant
    should be approved under that section in respect of
    particular premises;
    ... "
21.  Sub-sections 99K(2) and (3) provide:
    "(2) In making a recommendation under subsection (1), the
    Authority must comply with the relevant guidelines
    determined by the Minister under section 99L.
    (3) All recommendations of the Authority under subsection
    (1) are to be made to the Secretary. "
22.  Section 99L, also crucial to these proceedings, provides:
    "(1) The Minister must determine in writing the guidelines
    subject to which the Authority is to make recommendations
    under subsection 99K(1).
    (2) A determination under subsection (1) is a
    disallowable instrument for the purposes of section 46A
    of the Acts Interpretation Act 1901. "
23.  By s. 99N, the PRA is to consist of a chairperson, two persons who are to
be chosen from four persons nominated by the Pharmacy Guild of Australia, one
person (other than the two persons chosen from those nominated by the P.G.A.)
having experience in matters relating to the pharmacy industry, and three
other persons.  All members are to be appointed by the Minister on a part-time
basis.
24.  On or about 15 January 1988, Cenrin entered into an agreement with Mr
Colin Bova to lease the pharmaceutical dispensary within the Cenrin Burwood
Medical Centre at 85 Burwood Road, Burwood. It appears from a letter dated 15
January 1988 to Mr. Bova that Cenrin was the lessee of the premises pursuant
to a five year lease which commenced on 22 May 1985 with a five year option,
and that Mr. Bova, in essence, was a sub-lessee on terms contained in that
letter.
25.  The evidence concerning the tenure of the fourth respondent, Ms Allan, is
less than complete but Mr. Allan Pitman, the Managing Director of Cenrin, says
that on about 29 May 1989, Ms Allan acquired Mr Bova's interest in the
pharmaceutical dispensary and Cenrin agreed to the change.  On 25 October 1989
the Department of Community Services and Health received an application dated
25 October 1989 for approval as a pharmacist by Robin Elizabeth Allan "for and
on behalf of Lindsay Charles Allan" for approval as a pharmacist in respect of
the premises situated at 85 Burwood Road.
26.  On or about 22 November 1989 approval was granted to Robin Elizabeth
Allan "for and on behalf of L. C. Allan" for the purpose of supplying
pharmaceutical benefits on demand at and from the premises at 85 Burwood Road,
Burwood.  No party to these proceedings took any point as to what an approval
"for and on behalf" of another person might mean.
27.  On 25 January 1991 Ms Allan wrote to Mr Pitman concerning the Health 24
Medical Centre dispensary, Burwood, indicating that she had been notified by
the Pharmacy Board of New South Wales of new regulations relating to the
minimum size of a dispensary within any pharmacy and pointing to the
inadequacy in the size of the present dispensary.  In the course of that
letter Ms Allan said:
    "In considering possible solutions please remember that
    with the recent implementation of a 10% margin on NHS
    prescriptions, the dispensary area would need to be
    supplemented with a substantial retail area to make the
    pharmacy commercially viable.  Should this dispensary
    close, the Pharmacy Board will not issue a new approval
    to the premises while there is a pharmacy located within
    5 kilometres.  Therefore it is essential that we move
    quickly.
    If we are unable to find a mutually acceptable solution
    to this problem, I will have no option but to close the
    dispensary at the end of March, 1991. "
28.  It would be unrealistic to consider the content of this letter without
appreciating that Ms Allan had a direct interest in other pharmacies in the
immediate vicinity.
29.  On 22 February 1991 Mr Pitman replied, indicating that there had been
discussions with the Pharmacy Board and expressing his belief that the
requirements of the Board could be satisfied.  Mr Pitman raised the question
of the hours at which the pharmacy was open and the letter concluded by
stating:
    "Could I suggest to you that one of the problems might be
    the fact that you own all three pharmacies within 100
    yards of one another, could be contributed to your loss
    situation and is also a conflict of interest, which
    doesn't help your Pharmacy in the Medical Centre. The
    Medical Centre, I would have thought, is a more valuable
    Pharmacy for you because it has a captive audience and
    stands little chance of leakage, particularly if we set
    it up correctly. "
30.  On 28 February 1991 Ms Allan, on a letterhead of "Allans Burwood Road
Pharmacy, 138 Burwood Road, Burwood N.S.W. 2134", wrote to Mr Pitman at the
Burwood Medical Centre, tersely stating:
    "We hereby give you notice that the lease of the premises
    will terminate on 31st March, 1991.
    We will vacate the premises on or by this date. "
31.  On 8 March 1991 a solicitor on behalf of Health 24 Medical Centres wrote
to Ms Allan.  The letter commenced:
    "We acknowledge receipt of your letter dated 28th February
    1991 which purports to terminate the lease on the
    pharmacy premises on 31st March next and advises that the
    premises will be vacated by that date. "
Reference is then made to the question of the size of the pharmacy and then
stated:
    "As a result your comments in your letter of 25th January
    do not represent a valid reason to suggest the closing of
    the dispensary.
    Your indication that you intend to close the dispensary
    can therefore only be seen by this Company as an
    endeavour to close the pharmacy within the centre for the
    benefit of your other pharmacies in the area.  In our
    view what you propose is a restrictive trade practice and
    will not be countenanced by the Company.  If you still
    intend to cease operating the Centre pharmacy at the end
    of March then we require that you apply for approval for
    transfer of the pharmacy to an incoming pharmacist of our
    choice. "
32.  Meanwhile the Minister in the Commonwealth of Australia Gazette of 23
January 1991 published a determination pursuant to s. 99L of the Act.
33.  In the Commonwealth of Australia Gazette of 29 May 1991 the Minister made
a further determination which came into operation and by that determination
revoked the determination under s. 99L of the Act which appeared in the
Gazette of 23 January 1991.  The determination of 29 May 1991, so far as is
presently relevant, provided in substantially identical terms to the earlier
determination concerning applications for approval to supply pharmaceutical
benefits.  In that respect the determination of 29 May 1991 read as follows:
   "3.   For the purposes of paragraph 99K(1)(b) of the Act, the
      following are guidelines with which the Authority must comply in
      making a recommendation on an application by a pharmacist under
      section 90 of the Act:
      (a)  approval of a pharmacist shall not be recommended in respect
       of premises located within 5 kilometres by normal access
       routes from other premises in respect of which a pharmacist
       is already approved;
      (b)  approval of a pharmacist in respect of particular premises
       shall not be recommended unless the pharmacist demonstrates
       to the Authority that there is a definite unmet public need
       for that approval;
      (c)  approval of a pharmacist in respect of particular premises
       shall not be recommended (except in the circumstances
       provided for in subparagraph (d)) if those premises are
       situated within 5 kilometres by normal access routes of other
       premises in respect of which there has been granted financial
       assistance under section 99ZC or 99ZD of the Act;
      (d)  approval of a pharmacist in respect of particular premises
       shall be recommended where those premises are located not
       more than 500 metres from other premises in respect of which
       that pharmacist is already approved under section 90 of the
       Act and from which the pharmacist proposes to cease supplying
       pharmaceutical benefits;
      (e)  approval of a pharmacist in respect of particular premises
       shall be recommended where those premises are located more
       than 500 metres but not more than 5 kilometres by normal
       access routes from other premises in respect of which that
       pharmacist is already approved under section 90 of the Act
       and from which the pharmacist proposes to cease supplying
       pharmaceutical benefits, provided that:-
       (i) there has been no grant of financial assistance made
       under section 99ZC or 99ZD of the Act in respect of
       any other premises situated within 5 kilometres by
       normal access routes from the first-named premises;
       and
       (ii)  the pharmacist demonstrates to the Authority that
       there is a definite unmet public need for that
       approval;
      (f)  approval of a pharmacist in respect of particular premises
       shall be recommended where a pharmacist is approved under
       section 90 of the Act in respect of those premises and where
       that approval is to be cancelled immediately prior to the
       granting of the first-named approval, as a consequence of a
       change of ownership arrangements of the premises;
      (g)  notwithstanding anything contained in subparagraphs (a) to
       (f), approval of a pharmacist in respect of particular
       premises shall be recommended where the pharmacist entered
       into a financial commitment prior to 9 August 1990 (being the
       date on which the granting by the Secretary of approvals to
       pharmacies under section 90 of the Act was restricted pending
       the passage of legislation for pharmacy restructuring) in the
       expectation that an approval would be granted in respect of
       those premises, provided that the Authority is satisfied that
       there was such a prior commitment and the pharmacist produces
       to the Authority either -
       (i) a bank statement, supported if necessary by an
       affidavit by the pharmacist's solicitor or
       accountant; or
       (ii)  details of any contractual arrangements together
       with an affidavit by the pharmacist's solicitor or
       accountant attesting to the correctness of the date
       that commitment was entered into.
      (h)  notwithstanding anything contained in subparagraphs (a) to
       (g), approval of a pharmacist in respect of particular
       premises shall be recommended where the application for
       approval of the pharmacist in respect of those premises was
       made prior to 9 August 1990 (being the date on which the
       granting by the Secretary of approvals to pharmacists under
       section 90 of the Act was restricted pending the passage of
       legislation for pharmacy restructuring). "
34.  It is apparent that as a result of the agreement between the Commonwealth
and the P.G.A., these guidelines confer a valuable benefit on existing
pharmacies, and create significant statutory barriers to entry to new
entrants. Guidelines (a) and (b) are cumulative, so that irrespective of
public need, over time each pharmacist would have a monopoly over
approximately 75 square kilometres.
35.  In ordinary circumstances, having regard to the Commonwealth payments
associated with pharmaceutical benefits, a pharmacy would not be able to be
profitably operated without a registered pharmacist being approved in respect
of the provision of pharmaceutical benefits at the premises of that pharmacy.
36.  On 11 April 1991, the Pharmaceuticals Benefits Branch of the Commonwealth
Health Insurance Commission received a document headed "National Health Act -
Section 98" and signed by Ms Allan.  The document bears date 31.3.91 and in
term states:
    "With effect from 31/3/91 I/We Robin Elizabeth Allan with
    to cancel the approval granted to me/us to supply
    Pharmaceutical Benefits under the National Health Act,
    1953 in respect of the pharmacy situated at:
    85 Burwood Rd Burwood
    The said business having (X) closed.
    (in handwriting) amalgated (sic) with John Cumming
    Chemist."
37.  Earlier, on 5 April 1991, Mr Smoker had telephoned the Health Insurance
Commission in New South Wales and spoke with Ms Dallas Judith Wong, a Pharmacy
Approvals Clerk employed by the Health Insurance Commission.  Ms Wong says
that on that day, Mr Smoker advised her of his intention to:
    "reopen a pharmacy situated at 85 Burwood Road, Burwood in
    the State of New South Wales after closure of the
    pharmacy already on that sight (sic) currently operating
    under approval number 2181T. "
Ms Wong says that:
        "As at 5 April 1991 the approval for the pharmacy situated
    at 85 Burwood Road, Burwood was still current although
    the approved pharmacist operating at those premises being
    (Robin Allan) had advised the Commission on 29 January
    1991 that the pharmacy was going to close though a date
    of closure had not yet been decided. "
The reference to "approval for this pharmacy" is noted.  The approval under s.
90 is personal, but one that relates to particular premises. The "advice of 29
January 1991" sits awkwardly with the correspondence from Ms Allan to Cenrin.
38.  Ms Wong says that she sent an application form for approval as a
pharmacist to Mr Smoker on 5 April 1991.  Mr Smoker says that he already had a
form, but in any event a completed form dated 8 April 1991 was received by the
Health Insurance Commission on 18 April 1991 nominating Mary Colleen Smoker,
Mr Smoker's wife, as the applicant. That application form indicates that the
nature of the arrangements was to be a "transfer" and that Mrs Smoker would be
the sole proprietor of the pharmacy.  It was stated on the application form
"change of ownership immediate to cancellation of prior approved pharmacist".
39.  In a letter dated 18 April 1991 addressed to "R. E. Allan, Allan's
Burwood Road Pharmacy, 138 Burwood Road, Burwood", Mr. Hickey, the Manager of
the Pharmaceutical Benefits Branch and a delegate of the Secretary, Department
of Community Services and Health, wrote:
    "I hereby cancel as from 31 March 1991 the approval (no
    2181T) which was granted to you for and on behalf of L C
    Allan to supply pharmaceutical benefits at the pharmacy
    situated at 85 Burwood Road, Burwood, 2134. "
There is the suggestion in the material that Ms Allan applied for what is
termed "closure or amalgam funding" under the arrangements of the agreement to
rationalise the number of pharmacies but that she was ineligible.  It is a
possibility that she sought to enhance the competitive position of her other
pharmacies by having the approval in respect of a pharmacist at the premises
leased from Cenrin cancelled, but as well attempted to be paid for the
exercise.
40.  The Commission received a photocopy of an application for approval as a
pharmacist form completed by Mr Smoker and bearing date 8 April 1991.  This
appears to be a photocopy of the altered application form submitted in the
name of Mrs Smoker.  With that application is a handwritten letter signed by
Mr Smoker dated 30 May 1991 addressed to Ms Wong, the body of which reads:
    "Please change application for approval as Pharmacist
    received on 18th April 1991 from Mary Smoker to Gary
    Smoker in respect of premises at 85 Burwood Rd Burwood.
    My new application is enclosed.  You may need to provide
    me with a cancellation form for Mary. "
41.  After various delays, not relevant to the issues that fall to be decided
in these proceedings and being accepted by senior counsel for the respondents
as not constituting disqualifying latches, at least so far as the period after
early June 1991, Mr Smoker was advised by letter bearing date 29 April 1992
from one Stephen Dawson, the Manager of the Policy and Compliance Section of
the Pharmaceutical Benefits Branch, in these terms:
    "I refer to your application for approval to supply
    pharmaceutical benefits from proposed premises at 85
    Burwood Road, Burwood, NSW.
    The Authority applied the guidelines, which have been
    determined, to your application.  The Authority was of
    the view that your application did not meet Guideline
    3(a), in that there are other pharmacies within 5kms, nor
    Guideline 3(f), in that there is not a pharmacy approved
    at the site, and has recommended the rejection of your
    application.
    Accordingly, the delegate of the Secretary to the
    Department of Health, Housing and Community Services has
    rejected your application to supply pharmaceutical
    benefits from the proposed location."
42.  Guideline 3(f) is said not to have been met because "there is not a
pharmacy approved at the site".
43.  It seems to me unusual that an officer of the Health Insurance
Commission, which is an independent corporation set up under the Health
Insurance Commission Act 1973, should be writing to Mr Smoker telling him of
the results of the deliberations of another independent body, the PRA.
44.  Mr Smoker through his solicitor requested reasons for the decision and a
statement of reasons pursuant to s. 28 of the Administrative Appeals Tribunal
Act 1982, signed by R G Candy (who describes himself as Secretary to the PRA)
and dated 16 June 1992) was forwarded to Mr Smoker.
45.  The gravamen of those reasons appears in paragraphs 19, 20 and 21 of the
reasons as follows:
    "19. The PRA considered the relevant material provided by
    the Applicant and agreed that the application could
    not be recommended under Guideline 3(a) as there are
    other pharmacies within 5 kilometres.
    20. While the PRA did not have to make a decision with
    respect to Guidelines 3(b), because of the number of
    other pharmacists within 5 kilometres, the PRA noted
    that on the evidence before it there was not an
    established "unmet public need".  It was noted that
    there is no provision in the Guidelines to take
    account of special circumstances.
    21. The PRA noted that Guideline 3(f) was not applicable
    because the previous approval of a pharmacist in
    respect of the subject premises was not sought to be
    cancelled immediately prior to the granting of an
    approval to the applicant in consequence of a change
    of ownership arrangements of the premises. "
46.  Under the heading "Findings on Material Questions of Fact", the following
appears:
     "1.   On 5 April 1991 the applicant telephoned the Health
      Insurance Commission in NSW and spoke to Ms Dallas
      Wong.  Ms Wong recorded a file note as follows:
      ' On 5.4.91 Gary Smoker advised of his intention to
      'continue' the pharmacy known as Burwood Medical
      Centre Pharmacy.  I advised that, as the phcy was
      not being sold to him his application for an
      approval would be considered as a 'new phcy'.  Mr
      Smoker stated that the Medical Centre's owners
      would like to contest paragraph 3(f) of the
      Guidelines.
      (paragraph 3f) of the Guidelines refers to the
      granting of an approval where it involved the
      purchase of an existing phcy)
      As the approval number of the phcy (2181T) had not yet
      been cancelled by the Commission an application was
      sent to Mr Smoker that day (5.4.91).
      ..."
47.  The primary submission by the applicants is that the guidelines said to
be made pursuant to s. 90L of the Act absolutely dictate the result in each
particular case.  That is to say they do not 'guide', they 'require' a
particular result in relation to an application coming before the PRA.
48.  The sub-paragraphs of clause 3 of the determination dated 29 May 1991 by
the Minister are each cast in mandatory terms either prohibiting the grant of
a recommendation for approval or requiring the recommendation of approval.
49.  In some circumstances it would be necessary for the PRA to exercise a
judgment, for instance, as to whether there is an "unmet public need", but
generally speaking, the PRA is mechanically directed by the guidelines to the
result it should reach concerning its recommendation.
50.  As the PRA acknowledged in the reasons given in para. 20, it was not able
to look at special circumstances in any particular case. On the view it took
of the determination, it would seem that, even if the criterion in 3(b) were
met, i.e. that an unmet public need could be demonstrated, the PRA would be
unable to recommend approval of a new applicant if there was in fact an
approved pharmacy within 5 kilometres.
51.  The submission of the applicant is that when the Act conferred on the
Minister the power to determine the guidelines subject to which the authority
make recommendations, it did not permit him to dictate the circumstances in
which approval should or should not be granted and, to the extent that the
guidelines of the Minister amounted to directions, they were ultra vires.
This submission depends on an understanding of what is a "guideline".  The
applicant submits that where there is a complete absence of discretion, the
direction by the Minister was not properly to be characterised as a
"guideline" but was a command or a mandatory direction.
52.  According to the Macquarie Dictionary, a guideline is "a line drawn as a
guide for further writing, drawing etc." or "a statement which defines policy
or the area in which a policy is operative". According to the same dictionary,
"to direct" is "to guide with advice; regulate the course of; conduct; manage;
control" or "to give authoritative instructions to; command; order or ordain
(something)".
53.  There is no doubt that the matters the subject of the Minister's
determination published in The Commonwealth Gazette leave little room for
discretion to the authority.  However, in my view, a guideline does not cease
to be a guideline simply because of the degree of control inherent in it.  I
am not here concerned with the wisdom or sense of the guidelines but with
their validity, and in my opinion they are not invalid.
54.  As to the purported cancellation of the approval as a pharmacist to Ms
Allan, the word "cancel" means to "obliterate or cross out, annul or make
void, abolish".  In my opinion, in its ordinary connotation, a cancellation
cannot be retrospective.  In my view, an authorisation can be cancelled from
the time of cancellation or from some future point in time.
55.  As to the effect of the decision contained in the letter by Mr Hickey,
the Manager of the Pharmaceutical Benefits Branch and delegate of the
Secretary, Department of Community Services and Health, of 18 April 1991 ,
purporting to cancel as and from 31 March 1991 the approval which had been
granted to Ms Allan for and on behalf of L. C. Allan, it was submitted by Mr
Shaw QC, senior counsel for Cenrin, that there had in fact been no
cancellation of the approval because of the purported backdating of operation
of the cancellation.  I think the better view is that, notwithstanding that Mr
Hickey purported to cancel the approval as from 31 March 1991, the approval
was in fact cancelled on 18 April 1991.
56.  It is admitted by the first, second, third and sixth respondents that
prior to 18 April 1991 the applicants were not advised by the sixth respondent
of the application to cancel Ms Allan's approval number.  Having regard to the
mandatory nature of s. 98(1), there is no question in my view that as a matter
of procedural fairness, either Cenrin or Mr Smoker was entitled to notice of
Ms Allan's application prior to any cancellation of her approval.
57.  There seems to be, in various areas in which this matter has been
considered, confusion between approval of a person and approval of premises.
There seems further to be confusion between change of ownership of a pharmacy
business with change of ownership arrangements of the premises on which a
pharmacy is conducted.  The reasons of the Authority are deficient as to its
view in relation to the application or otherwise of guideline 3(f).  The mere
recitation of the guideline is hardly sufficient, particularly in the light of
the detailed application relying on guideline 3(f) that was made to it.  It
seems to be implicit in its recitation of the advice by Ms Wong on 5 April
1991 that it accepted that it was only on a sale of a pharmacy that guideline
3(f) would have any application, reinforced by her statement which the
Authority incorporated in its reasons:
     "Paragraph 3(f) of the Guidelines refers to the granting of
     an approval where it involves the purchase of an existing
     pharmacy. "
58.  I note that in a letter of 21 December 1990 by the Secretary of the
Authority which was sent to every pharmacist, the Authority stated:
     "Pharmacists are reminded that with these new arrangements
     approval of applications cannot be given until the Pharmacy
     Restructuring Authority has considered the application and
     made its recommendation.  This has particular implications
     in matters such as the sale of pharmacies, where the
     guidelines are not applicable but the application for
     approval of the new owner(s) has to go to the Authority for
     recommendation. "
59.  The agreement made on 6 December 1990 between the Minister and the P.G.A.
contained in clauses 8.1 to 8.6, guidelines relating to the granting of an
approval pursuant to s. 90 of the Act.  Clause 8.5 (a) and (b) provided:
      "(a)   a new approval will not be granted where there is an
       existing approved pharmacy operating within 5
       kilometres by normal access routes from the proposed
       site;
       (b)   a new approval will require the demonstration of a
       definite unmet public need; "
60.  Clause 8.6 stated:
     "Nothing in this Agreement will prevent the granting of a new
     approval number to a pharmacy which continues to operate on
     the occasion of or following its sale, amalgamation or
     change in ownership arrangements. "
This clause again speaks of an "approval number to a pharmacy".
     Cenrin, as the operator of a medical centre, has a real
interest in the operation of a pharmacy on the premises it leases. Prior to
the cancellation of the approval to Ms Allan, Mr Smoker had made it plain that
he wished to carry on a pharmacy business in the premises from which Ms Allan
was conducting her pharmacy business.  It is a clear inference from all the
material that Cenrin was willing to grant to Mr Smoker a lease of the premises
from which Ms Allan was conducting her pharmacy business.
61.  It seems to me to have been a matter for the Authority to consider
whether the cessation of occupation by Ms Allan of the pharmacy premises at 85
Burwood Road, the cessation of the pharmacy business conducted by her on those
premises, and the proposed leasing of those premises and the conduct of the
pharmacy business on those premises by Mr Smoker, would constitute "a change
of ownership arrangements of the premises".  The contemporaneity, or
otherwise, of approaches by Mr Smoker concerning approval, including the
approaches recorded by Ms Wong, as well as the entirety of the written
communications, would be relevant in the context of such a consideration of
the proper application of guideline 3(f).
62.  It is not to be doubted that there are difficulties in the manner in
which guideline 3(f) is expressed, but its clear intent was to permit
continuity of the conduct of a pharmacy business from premises from which a
pharmacy business had previously been conducted.  It clearly encompasses
having an operation in circumstances of the sale of a pharmacy business but,
in my view, it is not restricted to that circumstance.  The unwieldy phrase
"change of ownership arrangements of the premises" clearly focuses on a change
in the right to occupy the premises.
63.  In Stroud's Judicial Dictionary (4th ed.) under the entry "owner" the
following appears:
     "(1) The 'owner' or 'PROPRIETOR' of a property is the person
     in whom (with his or her assent) it is for the time being
     beneficially vested, and who has the occupation, or control,
     or usufruct, of it; e.g. a lessee is, during the term, the
     owner of the property demised (see judgment of Bramwell LJ,
     Eglinton v. Norman, 46 LJQB 559; see also Chauntler v.
     Robinson, 4 Ex 163; Russell v. Shenton, 3 QB 449; Lister
     v. Lobley, 6 LJKB 200). "
64.  In my opinion, the Authority did not properly consider the application of
guideline 3(f) to the circumstances of the application by Mr Smoker.  I am
reinforced in this view by what appears in the reasons in respect of the
decision of the delegate of the Secretary not to approve the applicant's
application.  The delegate had on 28 April 1992 rejected the application under
s. 90 of the Act and the reasons make it plain that the Secretary is able to
grant an approval only when the P.R.A. has recommended such approval.
However, the delegate's reasons, which are dated 2 June 1992, state:
     "The P.R.A. considered the Applicant's application at its
     meeting on 22 April 1992.  In its notification to the H.I.C.
     of 27 April 1992, the P.R.A. recommended that the
     application be rejected as it did not meet Guideline 3(a) or
     Guideline 3(b). "
65.  Each of those guidelines is in fact a prohibition. The significance of
this statement is considerable.  It reinforces my view that there was never a
proper consideration by the Authority of whether guideline 3(f) applied in all
the circumstances of Mr Smoker's application.  The notification was on 27
April 1992; the reasons which make the reference to guideline 3(f), even if in
its terms, are dated 16 June 1992.  Reasons were requested on 21 May 1992.
66.  I propose to make an order in terms of paragraph (c) of the application
for order of review filed 1 July 1992 and remit the matter to the Pharmacy
Restructuring Authority for further consideration, with or without further
evidence, according to law.  I will hear the parties as to any further orders
I should make and as to costs.