Shopping centre stoush over location of chemist shops … Federal Court judge critical of dodgy plan to weave around the labyrinthine rules that apply to the location of pharmacies … False and misleading information drafted by solicitor … Peta Leigh reports
In the process HH made adverse comments about Brisbane lawyer Maurice Hannah from law shop Bennett & Philp. Maurice is a leading light in the law of chemist shops and is also a pharmacist.
Hannan was acting for Ross Darnell, sole director of Slopen Main Pty Ltd, which had successfully applied to the Australian Community Pharmacy Authority to open a new chemist shop at shop 19 at the Cove Hill centre.
Proprietors of two nearby pharmacies brought the action to have the approval set aside, having become aware of Slopen Main’s cunning intention to circumvent the Australian Community Pharmacy Authority Rules in relation to mandatory distance between pharmacies.
At the heart of the matter are the Byzantine rules that apply to the location and ownership of chemists shops.
To be recommended for approval, the proposed pharmacy must be in a “small shopping centre” of at least “15 other commercial establishments”, and at least 500 metres in a straight line from the nearest approved “supplier of pharmaceutical benefits”.
HH established that following ACPA’s approval to operate at shop 19, Darnell intended to move his pharmacy to shop 4 of the same centre, which would not have been approved at first instance as it came within 500 metres of the applicant’s Priceline Pharmacy.
Through a loophole in the rules, Darnell intended that ACPA would nonetheless be required to recommend its approval on the basis of relocation “within a facility”.
HH heard that Darnell had already executed an agreement to lease shop 4 for 10 years, with an option to renew. By contrast, he had leased shop 19 on a month-to-month tenancy in the car park of the centre, from which he conceded he had no intention of operating for any significant period.
The tenancies had previously been considered part of two separate shopping centres, until the property manager was persuaded to modify the tenancy plans, in careful anticipation of the relocation application.
Hannan’s conduct came into question as HH found that a “false and misleading” statutory declaration signed by Jillian Bowkett, the property manager of the shopping centre, was the deliberate product of Hannan’s own drafting.
In order to meet the required 15 other commercial establishments in the centre, Hannan drafted a statement for Bowkett that Shop 4 was “open and operating”, describing its usage as “retail goods”, despite failing to identify a tenant for the shop.
Email correspondence between Hannan and Bowkett revealed that both parties were aware of Darnell’s existing agreement to lease shop 19.
Kerr said:
“Mr Darnell gave evidence that the trading name of [shop 4] was left blank to convey to the authority that that retail premise was not intended to be counted. The inference that the court draws, given that evidence, is that the terms of Ms Bowkett’s statutory declaration had been the subject of discussion and design on Slopen Main’s behalf prior to it being signed by Ms Bowkett and submitted to the authority by Mr Hannan.
Ms Bowkett’s statutory declaration on behalf of Slopen Main as its response to the authority’s enquiries was, in any event, an act undertaken on behalf of Slopen Main that was reckless as to the truth of its representations.
Mr Hannan was Slopen Main’s solicitor. In Slopen Main’s application to the secretary [Department of Health] for approval to supply pharmaceutical benefits at [shop] 19, Mr Hannan was named as a person authorised to act its behalf. There can be no question that Mr Hannan’s representations are to be attributed to Slopen Main.”
Kerr said the licensing authority was further misled because the statutory declaration mislabelled two other shops to make their trading names appear less similar, so concealing that a single owner operated both outlets. Item 7(3) of the rules provides that commercial establishments operated by the same business must be treated as one establishment.
“Given the materially false and misleading information provided on Slopen Main’s behalf under cover of Mr Hannan’s letter … there was nothing to alert the authority to those several considerations.”
Kerr set aside the authority’s decision, finding that the misleading information drafted by Hannan on behalf of his client had disabled the authority from duly discharging its “imperative statutory functions”.
HH found that the deliberate misrepresentations amounted to “fraud” in the public law sense.
Hannan is no stranger to pharmacy bureaucracy. He is a qualified pharmacist who has owned and operated a number of pharmacy businesses in the past.
He was also appointed to the Pharmacy Board of Queensland, a former statutory authority that was dissolved in 2010.
Darnell should have been all too familiar with the distance requirements, having unsuccessfully challenged ACPA over a proposed pharmacy in Logan Village in 2015 AAT proceedings.
Justice Kerr said that Hannan had not given evidence so any adverse findings against him as a solicitor would be inappropriate.
Ten days after judgment was delivered Hannan was promoted at Bennett & Philip from special counsel to director.