FEDERAL COURT OF AUSTRALIA Nguyen v Secretary, Department of Health and Ageing [2002] FCA 1441 ADMINISTRATIVE LAW - application for judicial review - first applicant requested cancellation by the Secretary to the Department of Health and Ageing approval as an "approved pharmacist" under s 98(1) of the National Health Act 1953 (Cth) - approval granted jointly to first applicant and her sister who was later convicted of fraud against Commonwealth and retired from partnership with first applicant - first applicant sells pharmacy to second applicant who requests an approval to operate the pharmacy under s 90(3AA)(a) of the National Health Act - Secretary refusing to process second applicant's request until first applicant's request has been dealt with - whether cancellation upon request under s 98(1) is mandatory - whether Secretary entitled to defer consideration of cancellation pending decision by Minister under s 133 - whether request for cancellation conditional - whether obligation to cancel arises immediately on request - whether second applicant entitled to interlocutory injunction. National Health Act 1953 (Cth)ss 90, 98, 133, 134A Crimes Act 1914 (Cth)s 29D Administrative Decisions (Judicial Review) Act 1977 (Cth)ss 5, 6 and 7 Judiciary Act 1903 (Cth)s 39B(1A) Federal Court of Australia Act (Cth)s 23 Grunwick Processing Laboratories Ltd v Advisory Conciliation and Arbitration Service [1978] AC 655 Grech v Heffey (1991) 106 ALR 570 Director of Public Prosecutions v Hiep Huu Le (1998) 156 ALR 110 Soul Pattinson & Co Ltd v Secretary, Department of Health and Family Services (1997) 74 FCR 339 Shaffer v Secretary, Department of Health and Aged Care [2002] FCA 1028 Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 Cummins v Pharmacy Restructuring Authority (1992) 107 ALR 316 General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 125 CLR 125 KIMBERLEY NGUYEN -v- THE SECRETARY TO THE DEPARTMENT OF HEALTH AND AGEING and THE MINISTER FOR HEALTH AND AGEING V772 of 2002 And ARTHUR HON-WAN CHAN -v- THE SECRETARY OF THE DEPARTMENT OF HEALTH AND AGEING V780 of 2002 RYAN J 22 NOVEMBER 2002 MELBOURNE IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY V772 of 2002 BETWEEN: KIMBERLEY NGUYEN Applicant AND: THE SECRETARY TO THE DEPARTMENT OF HEALTH AND AGEING First Respondent AND: MINISTER FOR HEALTH AND AGEING Second Respondent JUDGE: RYAN J DATE OF ORDER: 22 NOVEMBER 2002 WHERE MADE: MELBOURNE THE COURT ORDERS: 1. THAT the first respondent forthwith cancel the approval of the applicant and Tina Trina Nguyen (also known as Teresa Phan) pursuant to s 90 of the National Health Act 1953 in respect of the premises situate at 270 Hampshire Road, Sunshine. 2. THAT the respondents pay the applicant's costs of the application, such costs to be taxed in default of agreement. 3. THAT the operation of paragraph 1 of this Order be stayed until 4.15 pm on 26 November 2002 or further order. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY V780 of 2002 BETWEEN: ARTHUR HON-WAN CHAN Applicant AND: THE SECRETARY OF THE DEPARTMENT OF HEALTH AND AGEING Respondent JUDGE: RYAN J DATE OF ORDER: 22 NOVEMBER 2002 WHERE MADE: MELBOURNE THE COURT ORDERS: 1. THAT the application herein and the motion on notice dated 14 November 2002 be adjourned to 10.15 am on 2 December 2002. 2. THAT the respondents file and serve by 28 November 2002 any further affidavit or affidavits on which they intend to rely in opposition to the said motion on notice. 3. THAT the costs of all parties of the hearing on 21 November 2002 be reserved. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY V772 of 2002 BETWEEN: KIMBERLEY NGUYEN Applicant AND: THE SECRETARY OF THE DEPARTMENT OF HEALTH AND AGEING First Respondent AND: MINISTER FOR HEALTH AND AGEING Second Respondent and V780 of 2002 BETWEEN: ARTHUR HON-WAN CHAN Applicant AND: THE SECRETARY OF THE DEPARTMENT OF HEALTH AND AGEING Respondent JUDGE: RYAN J DATE: 22 NOVEMBER 2002 PLACE: MELBOURNE REASONS FOR JUDGMENT 1 The applicant in proceedings No V722 of 2002, Helena Huong Nguyen now Kimberley Nguyen ("Nguyen") has, since 26 November 1997 held, in conjunction with her sister, Tina Trinh Nguyen, also known as Theresa Phan ("Phan"), an approval No 20689X under s 90 of the National Health Act 1953 ("the Act") in respect of premises at 270 Hampshire Road Sunshine ("the premises"). So far as is relevant, s 90 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) Subject to subsection (3AA), an application under this section must be referred to the Authority. (3AA) Subsection (3A) does not apply to an application for an approval arising out of a change in the ownership of a pharmacy situated at particular premises if the change results or resulted from: (a) the sale of the pharmacy; or (b) the death of the owner or one of the owners of the pharmacy; or (c) a change in the constitution of a partnership that owned the pharmacy; if the pharmacy is to continue to operate at the same premises. (3AB) In subsection (3AA): pharmacy means a business in the course of the carrying on of which pharmaceutical benefits are supplied. (3B) An approval may be granted under this section in respect of an application to which subsection (3A) applies 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), (3AA), (3AB) and (3B) cease to have effect at the end of 30 June 2005. (4) Nothing in this section authorizes the Secretary to grant approval to a pharmacist in respect of premises at which that pharmacist is not permitted, under the law of the State or Territory in which the premises are situated, to carry on business. (5) Where the Secretary makes a decision granting or rejecting an application made by a pharmacist under this section, the Secretary shall cause to be served on the pharmacist, notice in writing of that decision. … … … … (6) For the purposes of this section, a reference to a pharmacist is taken to include a reference to a person who owns, or is about to own, a business for the supply of pharmaceutical benefits at or from particular premises." 2 On 13 June 2001, Phan was convicted of an offence under s 29D of the Crimes Act 1914. Subsequently, the then Minister for Health revoked, with effect from 4 December 2001, the approval in respect of the premises. That revocation was purportedly pursuant to s 133 of the Act which provides, again so far as is relevant; "(1) Where a medical practitioner, a participating dental practitioner or an approved pharmacist is charged before a court with having committed an offence against this Act or the regulations or against another law of the Commonwealth, of a State, of an internal Territory, of the Territory of Cocos (Keeling) Islands or of the Territory of Christmas Island, being an offence that arises out of or is connected with the supply of pharmaceutical benefits under Part VII, the Secretary may, if the Secretary thinks fit, by notice in writing: (a) in the case of a medical practitioner - suspend: (i) the authority to write a prescription for the supply of pharmaceutical benefits conferred upon that medical practitioner by section 88; (ii) any approval of that medical practitioner under section 92; or (iii) the authority to supply prescribed pharmaceutical benefits conferred upon that medical practitioner by section 93; (b) in the case of a participating dental practitioner - suspend the approval of that dental practitioner as a participating dental practitioner under section 84A; or (c) in the case of an approved pharmacist - suspend the approval of that pharmacist under section 90. (2) If a medical practitioner, dental practitioner or pharmacist is convicted of an offence referred to in subsection (1), the Minister may, by notice in writing: (a) where the Secretary has, under subsection (1), suspended an authority or approval that relates to the medical practitioner, dental practitioner or pharmacist - remove that suspension; and (b) suspend, or further suspend, for such period as the Minister specifies in the notice, or revoke, any authority or approval referred to in a paragraph of subsection (1), being an authority or approval that relates to the medical practitioner, dental practitioner or pharmacist. … … … (4) The Minister may, at any time, by notice in writing: (a) remove a suspension, or further suspension, imposed under subsection (2); or (b) restore any approval or authority revoked under subsection (2). (5) If, upon the hearing of a charge for an offence referred to in subsection (1), the medical practitioner, dental practitioner or pharmacist is acquitted, any suspension under subsection (1) in relation to him or her ceases to have effect. (6) If a medical practitioner, a dental practitioner or a pharmacist is charged before a court with an offence referred to in subsection (1): (a) any act or conduct to which the charge relates shall not be referred for investigation or report by a Committee of Inquiry; and (b) any investigation by a Committee of Inquiry into any such act or conduct shall cease. (7) In this section: approved pharmacist has the same meaning as in Part VII. pharmacist includes a person to whom subsection 90(6) applies." 3 In the meantime, on 29 November 2001, the applicant Nguyen had applied for approval as sole proprietor of the pharmacy conducted at the premises and had applied under s 98 of the Act for the existing approval in respect of the premises to be cancelled. On 28 November 2001 the Health Insurance Commission ("HIC") wrote to Nguyen and Phan advising that the request for cancellation could not be approved because of the revocation. In December 2001 an order was made in this Court staying the operation of the revocation. Subsequently, in June 2002 the Minister restored the approval which had originally been granted in respect of the premises and shortly afterwards the HIC invited submissions as to why that approval should not be revoked under s 133(2). 4 In the meantime, Nguyen and Phan had agreed to dissolve their partnership. The steps taken to give effect to that agreement have been described in these terms in an affidavit sworn by Nguyen on 12 November 2002; "As a result of a verbal agreement between Tina and myself to dissolve the partnership to allow me to continue the business as a sole proprietor, on 21 November 2001, I lodged an application for approval as a pharmacist under s.90 of the National Health Act 1953. At the same time, my sister and I lodged a request pursuant to s.98 of the National Health Act 1953 for the cancellation of the current approval number 20689X, requesting that the cancellation take effect immediately prior to the granting of approval to me as the new owner of the pharmacy. ….. The purpose of doing this was to have an approval in respect of the premises in my own name, which would reflect the change in the ownership of the business. … … … On 4 December 2001, I formally dissolved the partnership between my sister and I by Notice, which is now in the course of being wound up." 5 Submissions in response to the HIC's invitation were forwarded by Nguyen but not by Phan. On 30 August 2002 the Minister notified a decision, purportedly under s 133(2)(b) of the Act, to revoke the approval in respect of the premises with effect from the end of 4 September 2002. Because the HIC took the view that the revocation of the original approval precluded the grant of a new approval to Nguyen as a sole proprietor it refused on 5 September 2002 an application by Nguyen and Phan which had been framed to achieve that result. On the same day, the Pharmacy Board of Victoria suspended for three months' Nguyen's registration as a pharmacist after she pleaded guilty to failing properly to supervise the pharmacy at the premises. 6 On 10 October 2002, Weinberg J in this Court ordered that the Minister's decision of 30 August 2002 be set aside. In the course of his reasons for that order, his Honour observed; "55. It follows that the conviction of the applicant's sister triggered the revocation of the approval which had been granted jointly to the applicant and her sister. That is not, however, the end of the matter. It will be recalled that the primary submission advanced by counsel for the applicant was that there were separate and distinct approvals given to each of the applicant and her sister. In the alternative it was submitted that even a single approval required "severance" if one of the "approved pharmacists" was innocent. That meant that, insofar as the approval applied to the applicant's sister, the Minister had the power to revoke it. However, insofar as it applied to the applicant, there was no power of revocation. In substance the submission was that the Minister had both the power and the duty to "sever" the approval or, in other words, to partially revoke it. ……… 67. I can see no reason, in principle, why the power to grant a permission or approval should not be construed as containing within it the implicit power to sever, or partially revoke that permission or approval. If an owner of particular premises grants permission to several persons to enter those premises, as bare licensees, it seems plain that he may revoke that permission in relation to one or more of those persons without revoking it in its entirety. If one of those persons is a contractual licensee, while the other is a bare licensee, there is little doubt that although equity might assist the contractual licensee to remain on the premises (see Hurst v Picture Theatres Ltd [1915] 1 KB 1), the bare licensee will be a trespasser if he remains on the premises after the license granted to him has been revoked. … … … 71. There is nothing in the Act to suggest that the power of revocation conferred upon the Minister by s 133(2)(b) should be restricted to a power of total revocation, or none at all. Rather, s 133 when read in its entirety, implicitly suggests that the power to revoke may be exercised in whole, or in part. 72. It will be recalled that s 133(2)(b), as well as providing for revocation, provides that the Minister may, by notice in writing, suspend, for such period as the Minister specifies in the notice, an approval. Suspension of an approval is obviously a less draconian measure than revocation. The plain intent of the sub-section is to confer upon the Minister a wide range of powers, capable of being used in a flexible manner, to further the objectives of the Act. If the Minister can suspend an approval for any period that she regards as appropriate, rather than revoking it, it is difficult to see why, assuming that revocation is warranted, it must be total, rather than partial. … … … 82. Whether the applicant's approval should be revoked is, at the end of the day, a matter for the Minister. However, the discretion vested in the Minister by s 133(2)(b) must be exercised in a lawful manner. The Minister must have regard to all relevant considerations which she is required by the Act to take into account. Conversely, she must disregard all irrelevant considerations. 83. For the reasons set out above, I consider that in the present case the Minister exercised her discretion upon an erroneous basis. She approached the task of balancing the competing interests by assuming that her powers under the Act were constrained to revoking the approval in its entirety, or not at all. In fact her powers were not so constrained, and were significantly wider than she was apparently advised. In truth, it was open to the Minister to revoke the approval in its application to the applicant's sister, but not in its application to the applicant. The Minister did not turn her mind to the possibility that the approval should not be revoked in its entirety. Her failure to consider that possibility meant that her discretion miscarried. Her decision to revoke the approval must, therefore, be set aside." 7 On the same day on which the last order in this Court was made, 10 October 2002, Nguyen entered into an agreement to sell the business conducted at the premises to Arthur Hon-Wan Chan ("Chan") who is the applicant in proceeding No V780 of 2002. That agreement was arranged through a broker of pharmacy businesses and there is nothing to suggest that it has not been entered into at arm's length. However, it contained the following clauses which are called "Conditions Precedent to Completion"; "5.1 The obligations of the parties to complete the sale and purchase of the Business and the Assets are subject to and do not become binding unless: 5.1.1. the Purchaser has applied for and received approval from HIC pursuant to section 90 of the National Health Act 1953 for approval as a pharmacist to own and operate the Business from the Premises ("the Approval"); 5.1.2 the Vendor has filed a Request for Cancellation of Approval pursuant to Section 98 of the National Health Act 1953 and the request has been approved; 5.1.3 the Purchaser has offered employment to the Employees in accordance with clause 18 herein: 5.1.4 the Vendor has provided the Purchaser with a copy of the Lease document and has obtained the consent of the Lessor to the assignment of the lease in accordance with clause 16 herein. 5.2 The Purchaser agrees and undertakes to do everything necessary to give effect to HIC and or the Secretary for the Department of Health and or the Minister for the Department of Health ("the parties") granting an Approval to the Purchaser including, if required by the Vendor at its election, the taking of legal proceedings against the parties in order to exhaust all avenues to grant the Approval. 5.3 In the event that the Vendor, at its election, requires the Purchaser to take legal proceedings against the parties pursuant to clause 5.2, the Vendor shall indemnify the Purchaser, and hold it harmless from and against any and all losses claims liabilities costs and expenses (including legal fees) which may be asserted against, suffered or incurred by the Purchaser to the extent that the same arise out of or result from or relate to the taking of legal proceedings pursuant to clause 5.2. 5.4 The Purchaser will not have the right to terminate this Agreement on the basis that the condition pursuant to clause 5.1.1 has not been satisfied until such time as all avenues for obtaining the Approval have been exhausted and unsuccessful including the taking of legal proceedings against the parties pursuant to clause 5.2. 5.5 On or before the effective date the value of the stock which is determined by STOCK CLAUSE 4.2 is $85,000 or above." 8 Also on 10 October 2002, Chan applied for approval under s 90 of the Act in respect of the premises. On the same day, Nguyen applied for cancellation of the current approval 20689X. That application was on a standard form document issued by the HIC but not prescribed by the Act or any regulations made thereunder. It gave as the reason for cancellation; "Change of ownership to Arthur Hon-Wan Chan" and included in the proforma text this statement; "I request that this cancellation take effect immediately prior to granting of approval to the above owners." 9 On 11 October 2002 Phan forwarded this "authority" to the HIC; "I, TINA TRINH NGUYEN, acknowledge the following: 1. On 10/10/2002, Kimberley (Huong) Nguyen made an application pursuant to s.98 of the National Health Act 1953 requesting that approval number 20689X be cancelled. 2. Kimberley Nguyen made and executed that application with authority to do so on her behalf as well as mine. 3. I wish for the approval as it relates to Kimberley and myself be cancelled pursuant to the application described above. 4. The s.98 application has been faxed to HIC, but the original has yet to be filed." 10 On 14 November 2002, the solicitors for Nguyen wrote a letter to the General Counsel for the HIC which included these paragraphs; "On 10 October 2002, our client made a request pursuant to s.98(1)(a) of the NHA that the Secretary for the Department of Health cancel our client's approval for the premises situate at 270 Hampshire Road Sunshine, Victoria. On 11 October 2002 we wrote to you enclosing this document as well as an authority signed by Tina Nguyen that the cancellation request was executed by our client with the authority of Tina. The Secretary has failed to process our client's s.98 request. You are aware that our client has sold her business to a Mr Arthur Chan. Mr Chan has made application pursuant to s.90(1) for an approval to be granted to him. This application has also not been processed. Mr Chan has forwarded us a copy of a letter he wrote to HIC confirming they had not and would not consider his application until "the issue between the HIC and the current PBS number holder has been resolved". Enclosed is a copy of that letter for your attention. Our client requests that her request made pursuant to s.98 be processed forthwith. There is no power given to the Secretary to refuse to cancel upon request. Nor is there any scope for delay. … … … We put you on notice that in the event that the s.98 application is not processed by 5.00 pm 6 November 2002, we have instructions to issue proceedings in the Federal Court to compel the Secretary to act. This letter will be tendered to the Court on the question of costs." 11 The solicitors for the HIC replied by letter dated 6 November 2002 which, omitting formal and irrelevant parts, was in these terms; "Your client's request for cancellation is conditional on there be approval under section 90 of the National Health Act 1953 (NHA) for Mr Chan in relation to the pharmacy. Mr Chan's application for s90 approval has not been granted. There are a number of considerations which can be taken into account in deciding whether or not to grant an approval section 90. Our client will be corresponding directly with Mr Chan about his application. As for your client's application - as noted above, it is conditional on Mr Chan's application being approved. But in any case, there has been extensive consideration of whether or not it is appropriate to grant your client's application for a cancellation under section 98. At this stage no decision has been made. The following matters are relevant to that decision. Following collapse of attempts to resolve the matters in dispute by agreement between the parties, HIC is presently considering making a recommendation to the Minister about the possible exercise of section 133 of the National Health Act 1953 (NHA) taking into account - amongst other relevant material - the fact that your client's sister and former partner has been convicted of offences which provide a basis for revocation of the approval under section 133 the guidance on the interpretation of the provision provided by the recent decision of Weinberg J the report of the Victorian Pharmacy Board on the inquiry into your client's conduct the findings in that report in relation to your client including: The sixth allegation which the Board has found proven was that: between 1 August 1998 and 9 November 2000 ("the relevant period") you were a partner in a pharmacy practice situated at 270 Hampshire Road, Sunshine trading as Trinh Nguyen Pharmacy ("the pharmacy"); … 27 claims were made to the Health Insurance Commission on behalf of the pharmacy during the relevant period, for the payment of Pharmaceutical Benefits ("the claims") … 18,796 of the items or benefits in respect of which the claims had been made, were not in fact supplied and the claims that they had been supplied were false; … during the relevant period, the pharmacy received payments totalling approximately $1,111,673.14 in respect of the items and benefits which had not in fact been supplied and in respect of which false claims had been made; and …. The Board found you guilty of conduct discreditable to a pharmacist, in that you failed to take reasonable precautions to ensure: (i) that the pharmacy was entitled to make the claims which were submitted on behalf of the pharmacy; (ii) that benefits purportedly supplied had in fact been supplied; and (iii) that the payments received in respect of the claims were payments to which the pharmacy was lawfully entitled." The HIC takes the view that section 98 of the National Health Act 1953 must be construed in its statutory context and, in particular, in light of the provisions in section 133. The judgment of Weinberg J confirmed the power of the Minister to revoke your client's current approval. The purpose of section 133 could be frustrated if any approved pharmacist at risk of action being taken under section 133 could avoid that impact by requiring a cancellation under section 98." 12 On 15 November 2002 the HIC wrote to Nguyen a "show cause" letter which recited that; "HIC is presently minded to recommend to the Minister that she exercise the power under section 133(2)(b) of the NHA to revoke the approval to both of you [Nguyen and Phan]." 13 The show cause letter then detailed voluminous documentary material which it said the HIC would take into account in deciding "whether or not to make a recommendation to the Minister for an exercise of section 133(2)(b) of the NHA to suspend or revoke the Approval in relation to either or both of you." That material included the application by Chan for approval under s 90 of the Act in relation to the premises and a letter from Chan to the HIC dated 25 October 2002. The show cause letter also asserted by par 7; "HIC believes that the Minister has power under section 133(2)(b) of the NHA to revoke the Approval either entirely or only in relation to one of you. HIC also believes that the Minister has power under section 133(2)(b) of the NHA to suspend the Approval either entirely or only in relation to one of you." 14 The show cause letter then set out in considerable detail HIC's reasons for believing that the Minister had the powers asserted in par 7 and detailed in par 44 the findings of fact which "HIC is minded to recommend to the Minister that she make." The author next indicated some other factors which were said to be relevant to the exercise of discretion including; "The possible adverse effect on Mr Arthur Chan who has purchased the pharmacy and who is seeking approval under section 90 is also relevant. It seems, however, that Arthur Chan is aware of the problems surrounding the sale of the pharmacy and there is no reason to think that he does not have in place appropriate contractual arrangements to allow him to withdraw from the transaction. … … … It is HIC's view that a revocation of the Approval entirely will: provide a strong condemnation both of the serious criminality of Teresa Phan and of the gross negligence of Kimberley Nguyen act as a deterrent to similar behaviour send an important message to pharmacists and others about the importance of reliance on the integrity of the professions in the Pharmaceutical Benefits Scheme." 15 Nguyen has applied to this Court under ss 5, 6 and 7 of the Administrative Decisions (Judicial Review) Act 1977 ("the AD(JR) Act") and s 39B(1A) of the Judiciary Act 1903 to review; "(a) the failure or alternatively the refusal of the first respondent to cancel under s.98 of the National Health Act 1953 (Cth) )("the National Health Act') the applicant's approval as a pharmacist for the purpose of supplying pharmaceutical benefits at or from premises situated at 270 Hampshire Road, Sunshine ("the Premises"); and (b) the failure of the first respondent to make a decision under s.90 of the National Health Act 1953 (Cth) ('the National Health Act') to approve Arthur Hon Wan Chan ("Mr Chan") as a pharmacist for the purpose of supplying pharmaceutical benefits at or from the Premises; and (c) conduct engaged in by the first respondent for the purpose of making a decision under s.90 of the National Health Act." 16 The grounds of Nguyen's application assert errors of law being the belief that s 98 of the Act is subject to s 133 and the belief that s 98 confers a discretion to cancel, rather than a duty to do so as soon as a request for cancellation is made. It is also asserted that the respondents have unreasonably delayed in deciding Chan's application under s 90 in respect of the premises. By motion on notice dated 12 November 2002, Nguyen seeks the following relief; "1. That pursuant to O 20 of the Federal Court Rules an order in the nature of mandamus requiring the first respondent to cancel the applicant's approval as an approved pharmacist in respect of the Premises at 270 Hampshire Road Sunshine forthwith. 2. Alternatively, pursuant to s.15 of the Administrative Decisions (Judicial Review) Act 1977 (Cth) and/or s.23 of the Federal Court of Australia Act 1976 (Cth), an order pending the hearing and determination of these proceedings: (a) restraining the Second Respondent from taking any steps pursuant to s.133 of the National Health Act 1953 (Cth) ('the National Health Act') to revoke the approval of the applicant as an approved pharmacist for the purposes of Part VII of the National Health Act ('the decision')." 17 By a separate application under ss 6 and 7 of the AD(JR) Act, Chan seeks to review the failure of the Secretary of the Department of Health and Ageing ("the Secretary") to approve Chan as a pharmacist for the purpose of supplying pharmaceutical benefits at or from the premises and to review conduct engaged in by the Secretary for the purpose of making a decision under s 90 of the Act. By way of grounds of his application, Chan asserts that there has been unreasonable delay in making the decision under s 90 or that either or both the Secretary and the HIC are engaging in conduct by reason of which the making of a decision to refuse Chan's application would be an improper exercise of the power conferred by s 90. Chan, by his application, claims the following relief; "1. An order directing the respondent to approve the applicant under s.90 of the National Health Act for the purpose of supplying pharmaceutical benefits at or from the Premises. 2. Alternatively, an order directing the respondent to make a decision on the application by the applicant for approval under s.90 of the National Health Act for the purpose of supplying pharmaceutical benefits at or from the Premises. 3. A declaration that s.90(3A) does not apply to the applicant's application for approval under s.90 of the National Health Act, being an application for an approval arising out of a change in the ownership of a pharmacy situated at particular premises which results from the sale of the pharmacy within the meaning of s.90(3AA) of the National Health Act. 4. An order directing the respondent, pending the hearing and determination of these proceedings, to accept and process claims made by the applicant under Division 3 of Part VII of the National Health Act for payment in respect of the supply of pharmaceutical benefits as if the applicant were an approved pharmacist for the purposes of the Act. 5. Costs. 6. Such further or other relief as the Court deems appropriate." 18 Like Nguyen, Chan has also sought summary judgment under O 20 r 1 of the Rules of this Court. His motion on notice dated 14 November 2002 seeks; "1. Pursuant to Order 20 rule 1, an order directing the respondent to approve the applicant under s.90 of the National Health Act for the purpose of supplying pharmaceutical benefits at or from the Premises. 2. Alternatively, pursuant to Order 20 rule 1: (a) an order directing the respondent to make a decision on the application by the applicant for approval under s.90 of the National Health Act for the purpose of supplying pharmaceutical benefits at or from the Premises; (b) a declaration that s.90(3A) does not apply to the applicant's application for approval under s.90 of the National Health Act, being an application for an approval arising out of a change in the ownership of a pharmacy situated at particular premises which results from the sale of the pharmacy within the meaning of s.90(3AA) of the National Health Act. 3. Alternatively, pursuant to s.23 of the Federal Court of Australia Act 1976 (Cth), an order directing the respondent, pending the hearing and determination of these proceedings, to accept and process claims made by the applicant under Division 3 of Part VII of the National Health Act for payment in respect of the supply of pharmaceutical benefits as if the applicant were an approved pharmacist for the purposes of the Act." 19 Section 98 appears in Div 2 of Pt VII of the Act which governs pharmaceutical benefits. Division 2 regulates the supply of pharmaceutical benefits by limiting the charges which approved pharmacists, medical practitioners or approved hospital authorities may make for the supply of a pharmaceutical benefit which is defined by s 84 to mean "a drug or medicinal preparation in relation to which by virtue of s 85" Pt VII applies. The scheme of Pt VII contemplates that, except for a small dispensing charge (or in some cases a "special patient contribution charge" applying to certain drugs under s 85B), an approved pharmacists shall not make any charge to the person to whom the pharmaceutical benefit is supplied but shall recover from the Commonwealth, the "Commonwealth price" determined by the Pharmaceutical Benefits Remuneration Tribunal established pursuant to s 98A of the Act. 20 Section 98 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 is not carrying 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 90. (3A) Where the Secretary is satisfied that an approved medical practitioner is not practising in the area in respect of which the medical practitioner is approved, the Secretary may, by notice in writing to the medical practitioner, cancel the approval of the medical practitioner under section 92. (4) If a person becomes an approved pharmacist in respect of premises in an area in respect of which a medical practitioner is approved under section 92, the Secretary shall cancel the approval of the medical practitioner in respect of that area or of that part of the area in relation to which that section no longer applies. (4A) If a pharmacist: (a) before 18 December 1990, was granted an approval to supply pharmaceutical benefits at or from particular premises; and (b) because of the operation of subsection 90(5A), is taken to have been granted such an approval in respect of other premises; the Secretary is taken, immediately after the commencement of section 20 of the Health and Community Services Legislation Amendment Act (No. 2) 1993, to have cancelled the approval in respect of the premises referred to in paragraph (a). (5) A reference in this section to an approved pharmacist carrying on business as a pharmacist at premises is a reference, in the case of an approved pharmacist to whom subsection 90(6) applies, to an approved pharmacist carrying on a business for the supply of pharmaceutical benefits at or from the premises." 21 In my view, the differential use of "shall" in s 98(1) and (4) and of "may" in sub-ss (2), (3) and (3A) signifies that the two first-mentioned sub-sections impose a duty on the Secretary, whereas the other three sub-sections confer a discretion. It is notorious that the word "may" can ambiguously connote either the imposition of a duty or the conferral of a discretion but "shall" prima facie suggests that it is mandatory; see eg Grunwick Processing Laboratories Ltd v Advisory Conciliation and Arbitration Service [1978] AC 655 per Lord Salmon at 698. Where the two words are used in contradistinction to each other in such close proximity as is afforded by different sub-sections of the same section the conclusion that "shall" is mandatory is almost irresistible; see eg Grech v Heffey (1991) 106 ALR 570 at 575 and Director of Public Prosecutions v Hiep Huu Le (1998) 156 ALR 110 at 115 - 117. 22 It is significant that the same difference was relied on by the Secretary to what was then the Department of Health and Family Services in endeavouring, unsuccessfully, to persuade Beaumont J that s 98(3) does not impose a duty to cancel the approval once the Secretary is satisfied that a pharmacist is not carrying on business at the specified premises; see Soul Pattinson & Co Ltd v Secretary, Department of Health and Family Services (1997) 74 FCR 339 at 364. In Shaffer v Secretary, Department of Health and Aged Care [2002] FCA 1028, Whitlam J disagreed with Beaumont J's conclusion that s 98(3) imposed a duty, rather than conferred a discretion, but his Honour emphasised the distinction between "may" and "shall" which I consider intractably governs the construction of s 98 as a whole. 23 His Honour, after referring at [20] to the respondent's reliance on that distinction in Soul Pattinson, continued; "(Section 95 is concerned with the suspension or revocation of an approval under s90 of the Act pending or following investigation and report by a Committee of Inquiry established under Pt VIII of the Act. Beaumont J had earlier observed (at 356) that the Act appears to permit suspension of an approval only in the circumstances specified in s95.) 21. In Soul Pattinson his Honour acknowledged (at 370) that s98(3) uses the word "may", not "shall". However, he was of the view that Windeyer J's further observations in Finance Facilities [Pty Limited v Commissioner of Taxation (1971) 127 CLR 106] at 134-135 about circumstances in which "may" means "must" resolved the construction point. 22. It is unfortunate that Beaumont J does not appear to have been referred to the legislative history of s98. It was amended by s24 of the Health Legislation Amendment (No 2) Act 1986. The power to cancel under s98(2), where notice is given by an approved pharmacist, became permissive. The word "may" was substituted for "shall". S98(3) was inserted in order to allow a cancellation where no notice was given, but the decision-maker had to be satisfied that the pharmacist had ceased to carry on business for a period of 6 months. (That qualification was removed in 1992 when s98(3) was re-cast in its current language.) The Health Legislation Amendment (No 2) Act 1986 also provided for a right of review by the Tribunal of a decision under the new s98(3) to cancel an approval." 24 The same construction was given obiter to s 98(1) by Weinberg J in Nguyen (supra) when his Honour said at [18]; "Section 98(1) provides that an approved pharmacist may request that his or her approval under s90 in respect of all or any of the premises in respect of which he or she is approved be cancelled, and requires the Secretary, in those circumstances, to cancel that approval. Section 98(3) provides that where the Secretary is satisfied that an approved pharmacist is not carrying on business as a pharmacist at premises in respect of which the pharmacist is approved, the Secretary may, by notice in writing, cancel the approval of the pharmacist under s90." (emphasis added) 25 Ms Hampel SC, who appeared with Ms Kennedy for the respondent, did not advance any alternative construction of s 98, but contended, as I understood her, that the Secretary is entitled to defer performance of the duty imposed by s 98(1) if the Minister is considering revocation or suspension of the subject approval pursuant to s 133(2). However, the Act contains no mechanism for what the Minister is contemplating from time to time to be brought to the notice of the Secretary. Distinct persons are the respective repositories of the duty imposed by s 98(1) and the discretion conferred by s 133(2). Moreover, the power to suspend, further suspend or revoke conferred on the Minister by s 133(2) is predicated on an approval under s 90 subsisting at the time of the Minister's decision to exercise the power. To use Weinberg J's expression in Nguyen (supra) at [72] revocation is the most draconian of the measures which the Minister can take under s 133(2). It can do no more than bring the approval to an end as does cancellation by the Secretary under s 98. 26 Ms Hampel was driven to refer to s 134A as indicating why the Act it should be regarded as enabling the Secretary to defer cancellation under s 98 to keep alive a prospective action by the Minister under s 133. Section 134A provides; "(1) The Minister may, if the Minister thinks fit, cause to be published in the Gazette particulars of or relating to any action that the Minister or the Secretary has taken under section 34, 35, 95 or 133, including a statement of the reason for that action, which may take the form of, or include, a reference to, or an abstract from, any relevant report by a Committee of Inquiry. (2) A publication in the Gazette shall not be made in pursuance of subsection (1) until: (a) the period within which an appeal may be brought against the action referred to in that subsection has expired; and (b) if such an appeal is brought, judgment has been given on that appeal. (3) The Minister or the Secretary may, in any report or statement on or relating to the administration of this Act or the operation of this Act or a part of this Act, publish such particulars of, or comments on, cases or matters referred to in subsection (1) as he or she considers necessary or desirable in the public interest, and for that purpose the public interest shall be taken to extend to the prevention or discouragement of conduct that involves contravention of any provision of this Act or the regulations or an abuse of those provisions or failure to discharge conscientiously duties or obligations under those provisions. (4) An action or proceeding, civil or criminal, does not lie against a person for publishing in good faith a copy of, or a fair extract from, or a fair abstract of, a publication made in accordance with the preceding provisions of this section. (5) A publication shall be deemed to be made in good faith if the person by whom it is made is not actuated by ill will to the person affected by the publication or by any other improper motive. (6) Nothing in this section authorizes publication of the name of a patient or particulars that would enable a patient to be identified." 27 However, that section was enacted at least two years after s 98 had emerged in its present form and relation to both s 95 (which is also mentioned in s 134A) and s 133. There is no warrant for regarding the conferral of an incidental power of publication like that in s 134A as impliedly qualifying the clear and peremptory imposition of a duty effected by s 98. The imposition of that duty does not conflict with, or take place lower in the hierarchy of provisions, than s 133 which is essentially intended to protect the revenue; cf. Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at 382. 28 Nor do I consider that the form of request for Nguyen's cancellation, stipulating that it take effect immediately prior to the granting of approval to Chan, relieved the Secretary of the duty imposed by s 98. That stipulation was contained in a pro forma document emanating from the HIC and was no more than a "request" as to when the cancellation should take place. In any event, subsequent correspondence made it clear that Nguyen was insisting unconditionally on cancellation of the original Approval No 20689X. Once it is appreciated that a request for cancellation has been made under s 98(1), the Secretary immediately comes under a duty to effect the cancellation. That is the effect of the word "whenever" which introduces s98(1); see Cummins v Pharmacy Restructuring Authority (1992) 107 ALR 316 at 322. 29 For these reasons, I consider that this is a case where, despite the fact that extensive argument and analysis has been necessary to demonstrate that the respondents cannot mount an arguable defence to Nguyen's claim, that defence is so clearly untenable that it cannot succeed; see General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 125 CLR 125 at 130. I shall therefore order pursuant to O 20 r 1 that the Secretary forthwith cancel Approval No 20689X in respect of the premises. The respondents must pay Nguyen's costs of the application. 30 It is not so clear that Chan has a present entitlement to relief either under O 20 r 1 or by way of an interlocutory injunction. It is clear from the consistent use of the word "may" in sub-ss 90(1) and (3) of the Act that the Secretary has a discretion whether or not to grant approval under those sub-sections. As well, the need to refer an application to the Authority depends on whether the application answers the description in s 90(3AA). As I perceive it, the Secretary has not considered those discretionary and factual questions because of his or her belief that any such consideration should await a decision of the Minister pursuant to s 133 in respect of Approval No 20689X. Now that the Secretary has been disabused of the notion that performance of the obligation imposed by s 98(1) can be deferred for that reason, I assume, in light of the evidence of departmental practice, that the factual investigations and exercise of discretion necessary to grant or refuse Chan's application can be completed within a few days. I shall therefore adjourn Chan's application and motion on notice to 2 December and direct that the respondents file and serve by 28 November 2002 any affidavits on which they intend to rely in opposition to the said motion on notice. 31 I have not overlooked Chan's motion for an interlocutory injunction. However, I consider that there are real obstacles to an exercise of the Court's discretion to make a mandatory interlocutory order effectively requiring payment out of Consolidated Revenue of moneys on the basis that the applicant is deemed to be the holder of an approval under s 90 of the Act. There are also difficulties in framing an appropriate undertaking as to damages which might be suffered by the respondents should the Court eventually be persuaded to dismiss Chan's application. When those matters are taken into account in conjunction with the Court's ability to resume the hearing of that application within a relatively short time, the factors militating against the grant of interlocutory relief at this stage become decisive. I certify that the preceding thirty-one (31) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Ryan. Associate: Dated: 22 November 2002 Counsel for the Applicant in V772 of 2002: Mr R Niall Solicitor for the Applicant in V772 of 2002: Wisewoulds Counsel for the Applicant in V780 of 2002: Mr C Horan Solicitor for the Applicant in V780 of 2002: Fitzpatrick Teale Counsel for the Respondent in V772 of 2002 and V780 of 2002: Mrs F Hampel SC with Ms M Kennedy Solicitor for the Respondent in V772 of 2002 and V780 of 2002: Phillips Fox Date of Hearing: 21 November 2002 Date of Judgment: 22 November 2002