Sadri v Pharmacy Council of New South Wales

1. [1]

   This is an appeal from a decision of the New South Wales Civil and Administrative Tribunal (the Tribunal) made on 26 September 2024 (Sadri v Pharmacy Council of New South Wales [2024] NSWCATOD 156). The Tribunal decision was itself an appeal from a decision of the Pharmacy Council of New South Wales (the Council), made on 11 June 2024.

2. [2]

   This appeal is restricted to a question of law. The question in this case is said to be the construction of s 150 of the Health Practitioner Regulation National Law 2009 (NSW) (the National Law). Although I agree that the questions arising in this matter are questions of law, I think they are probably better described as relating to the correct application of s 150, rather than its construction.

3. [3]

   Section 150 states:

Background

1. [4]

   The plaintiff was registered as a pharmacist in 2011. Since her registration there have been seven complaints made against her to the Council.

2. [5]

   The most recent complaint was made on 2 May 2024 by the Pharmaceutical Services Unit (the PSU). In deciding this complaint, the Council took into account three of the previous six complaints.

3. [6]

   The Council heard the PSU complaint on 20 May 2024. On 11 June 2024, the Council provided reasons for its decision, that decision being:

4. [7]

   As at 2 May 2024, the plaintiff was the proprietor of three pharmacies, situated in Blacktown, Greystanes and East Blaxland respectively. The PSU summarised the complaint in this way:

5. [8]

   ‘D’ is the most serious of the allegations because it involves fraud. The allegations were denied by the plaintiff. The allegations were described by the Council at [30]-[31]:

6. [9]

   At the time of the Council decision, the Tribunal decision and the hearing before me, the allegations of fraud remained allegations which were denied. The plaintiff emphasised that she was entitled to the presumption of innocence.

7. [10]

   The Council correctly stated, at [6]:

8. [11]

   The Council was obviously mindful of what has been described as the two limbs of s 150(1), the first limb being the “protection of the health or safety of any person or persons” and the second limb being “is otherwise in the public interest”. The Council may suspend a registration or impose conditions on a registration if it thinks it appropriate to do so having regard to the establishment of either of the two limbs.

The issues before me

1. [12]

   The questions in this case I think are the following:

   1. (1)

      Did the Council improperly include matters in the first limb which should have fallen, or were impermissibly duplicated, within the second limb?

   2. (2)

      Did the Council combine its concerns expressed in both limbs to decide that it was appropriate to suspend the plaintiff’s registration? This question assumes that if the facts had been properly placed in each limb, that those facts viewed separately under the respective limbs would not have led to a conclusion that it was appropriate to suspend the plaintiff’s registration.

   3. (3)

      Remembering that this is an appeal from the decision of the Tribunal, did the Tribunal make an error of law in rejecting the appeal from the Council?

   4. (4)

      If the Tribunal was in error, can its decision nevertheless be upheld because, on the whole of the facts, the error was not material?

2. [13]

   An issue was argued arising from the decision of the New South Wales Court of Appeal in Pridgeon v Medical Council of New South Wales [2022] NSWCA 60. This issue will be dealt with separately.

The Tribunal’s decision

1. [14]

   I will deal with the questions I have posed above in turn.

Did the Council improperly include matters in the first limb which should have fallen, or were impermissibly duplicated, within the second limb?

1. [15]

   Before looking at the detail of the decision it is necessary to acknowledge that facts behind the application of s 150(1) may overlap into both limbs. The Court of Appeal stated in Medical Council of NSW v Smithson [2021] NSWCA 53, at [20]:

2. [16]

   Ghosh refers to Ghosh v Medical Council of NSW (2020) 102 NSWLR 303; [2020] NSWCA 122. Kirby refers to Kirby v Dental Council of NSW [2020] NSWCA 91.

3. [17]

   The Council separated the two limbs in this way:

4. [18]

   It is apparent that the fraud allegations were placed within both limbs of s 150(1). This is evident from [47] and [48] of the Council’s decision. As already noted, from Smithson, facts may overlap and fall within both limbs. The suggested vice here is that while the alleged fraud could fall under both limbs, it cannot do so where the alleged wrongdoing has precisely the same elements.

5. [19]

   This point is illustrated by the description of the allegation of PBS fraud found in [47]. The final sentence of the paragraph indicates that the Council is not including the fraud under the first limb because “medications are being misused or abused” but “rather that the public is being defrauded of large sums of money”.

6. [20]

   The misuse or abuse of medications would unquestionably relate to the “protection of the health or safety of any person or persons”. Therefore, such misuse or abuse would be well placed within the first limb.

7. [21]

   When moving to [48] it can be seen that the concern to the Council is again the monetary element of the alleged fraud:

8. [22]

   I think three points arise:

   1. (1)

      If the alleged fraud had been placed within the first limb because “medications are being misused or abused” and not because of defrauding the public, then the allegations would fall squarely within the first limb.

   2. (2)

      The placing of the alleged fraud within the second limb, to the extent that it deals with the expenditure of “large sums of public money” is a valid expression of an action that is “otherwise in the public interest” (i.e., it falls squarely within the second limb).

   3. (3)

      If the alleged fraud, as an imposition on public funds, was appropriate to fall in the first limb, then could it also have validly fallen within the second limb?

9. [23]

   Without derogating from the possibility that the same conduct may contain ingredients which allow it to overlap between both limbs, I do not think this conduct (in this case the allegations of fraud) can fall within both limbs for precisely the same reason. As I have said above, the alleged fraud could appropriately have fallen under the first limb because it amounted to the misuse or abuse of medications and also could appropriately have fallen under the second limb because of the impact on public funds.

10. [24]

    However, I do not think the alleged fraud can be placed under both limbs for the same reason, namely that relating to the use of public funds. I have endeavoured to make a distinction between overlapping, as contemplated in Smithson, and duplication. In this case the overlapping of the alleged fraud into both limbs is permissible. The duplication of the reasons for putting fraud into both limbs is not permissible.

11. [25]

    I am therefore satisfied that the Council fell into legal error.

Did the Council combine its concerns expressed in both limbs to decide that it was appropriate to suspend the plaintiff’s registration?

1. [26]

   The allegation here is that the Council did not decide to suspend the plaintiff’s registration entirely because of the matters it found relating to the first limb, nor because of the matters relating to the second limb, but rather combined the two limbs to reach a conclusion that suspension was appropriate.

2. [27]

   The submission that the Council had combined the two limbs to reach its conclusion is derived from [50]-[53] of the Council’s reasons, which state:

3. [28]

   The alleged combination I think is established, in particular from the first and last sentences of [51] and then the first sentence of [52]. It follows that if the alleged fraud should not have been included in the first limb because it was duplicated in the second limb, then the Tribunal should not have concluded that as a combination of both limbs the plaintiff’s registration should be suspended.

Did the Tribunal make an error of law in rejecting the appeal from the Council?

1. [29]

   The scope of this question is obviously limited to the questions dealt with above arising from the Council’s decision. I also repeat that I have specifically distinguished duplication from overlapping.

2. [30]

   Starting with the duplication issue, I first of all note that the plaintiff did not pursue in this court the submission made to the Tribunal that the Council could only proceed under one of the two limbs, and not under both. The plaintiff accepted this submission was untenable. The Tribunal correctly stated, at [46]:

3. [31]

   The plaintiff also did not make submissions to the Tribunal in the same terms as those made before me. The Tribunal set out the plaintiff’s argument at [35] of its reasons. This argument concentrates on whether the impact on public funds was a matter that could properly be placed within the first limb. This is different to the argument before me, which was put as follows:

4. [32]

   The second submission just quoted is the accumulation point which I will return to below. Other than in respect of the accumulation point, the defendant did not submit that the arguments put before me should not be dealt with because they had not been run before the Tribunal.

5. [33]

   The difficulty however, is that the Tribunal is now being criticised for dealing with the matter incorrectly, but it had not been subject to the same submissions on error.

6. [34]

   The Tribunal dealt with the plaintiff’s submissions under the general heading of “The Beyond Power Argument”. These submissions concentrated on whether or not it was appropriate for the Council to include in the first limb the question of fraud, noting that the fraud was denied and, separately, whether the alleged fraud properly fell within the first limb.

7. [35]

   The Tribunal dealt with what it considered was the plaintiff’s “core argument” from [48] of its reasons. Then, from [53] the Tribunal set out the reasons that it thought the alleged fraud could be the subject of consideration under either of the limbs of s 150. The Tribunal concluded, at [65]-[66]:

8. [36]

   This is not a conclusion on the question of whether the same conduct, in the manner I have outlined above, can be legitimately placed within both limbs. I can see no error in the Tribunal’s reasoning on the submissions made to it and cannot criticise the Tribunal for not making a decision on duplication.

9. [37]

   I am not prepared to find error on the part of the Tribunal in regard to the duplication point.

10. [38]

    The situation is different in respect of accumulation. This question was squarely put to the Tribunal. It was included (no.(ii)) in the submissions I have quoted above and is referred to in the Tribunal’s reasons at [43]:

11. [39]

    In addition, there was this exchange between the Tribunal and Counsel:

12. [40]

    However, other than the acknowledgement of the submission I cannot see any part of the Tribunal’s reasons which deal with the accumulation argument. I think, as I have set out above, that the accumulation point is valid. As it was raised before the Tribunal, it should have been dealt with, but that did not occur. I am satisfied that there is accordingly error on the part of the Tribunal.

Materiality

1. [41]

   The defendant submitted that if I should find error, the suspension should not be set aside because on the whole of the allegations that were before the Council and the Tribunal, a suspension of the plaintiff’s registration was inevitable. Not only was there the alleged fraud but, as stated by the Tribunal at [60]:

2. [42]

   It was pointed out that a number of the criticisms in the PSU report were conceded by the plaintiff so that their combination with the alleged fraud justified the suspension. The defendant submitted:

3. [43]

   My initial reaction to the defendant’s materiality point was that it should fail because:

   1. (1)

      The Council thought that, but for the alleged fraud, the plaintiff could be dealt with by the imposition of conditions (Council’s reasons from [50]-[53], quoted above).

   2. (2)

      Allowing the alleged fraud to dictate the result would be to ignore the presumption of innocence. The plaintiff, up to and including the hearing before me, denied the allegations and they have yet to be proved.

4. [44]

   In relation to the first point, although I have found that the accumulation between the two limbs was not permissible, that does not take away the seriousness of the fraud allegations.

5. [45]

   The Council made it clear, at [47], that even ignoring the misuse of the medications there was a risk to the public of being “defrauded of large sums of money”. Then at [49], the Council said:

6. [46]

   Although not addressing the issues as relating to materiality, the Tribunal also took an essentially ‘overall’ approach, from [52]-[60]:

7. [47]

   In Kirby Payne JA said, at [15]:

8. [48]

   The just quoted passage suggests that the presumption of innocence has a limited role to play if the Council is satisfied that there is “a risk to the public requiring suspension, or imposition of a condition, for protection of the public”, notwithstanding that “the evidence is incomplete and further investigation is needed.”

9. [49]

   This theme was reiterated in Smithson, at [20]:

10. [50]

    Both Kirby and Smithson endorse the following:

    1. (1)

       The decision of a Council is not dictated by the presumption of innocence, the incomplete state of investigation or a final hearing on whether the alleged misconduct has been proved.

    2. (2)

       The Council may act to impose conditions or suspend a registration where it believes it appropriate to fulfil its obligation of protection.

11. [51]

    When one looks at the allegations, the attitude of the Council towards them and its comments on their seriousness, then the appropriateness of the suspension becomes apparent. The fact that the Council expressed itself in a way that suggests an accumulation of factors between the two limbs does not affect the overall attitude of the Council towards the conduct of the plaintiff and its level of seriousness, in turn giving rise to a need for protection of the public.

12. [52]

    The plaintiff urged caution in dealing with materiality, pointing out the test set out by the High Court in LPDT v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs & Anor [2024] HCA 12, referring to this sentence from [15]:

13. [53]

    My decision is more encompassed within [16], and in particular my opinion that “it can be affirmatively concluded that the outcome would inevitably have been the same had the error not been made.”

14. [54]

    Accordingly, although I have identified error in essentially the technical manner in which the Council expressed its conclusions, and I have agreed that the accumulation issue was not dealt with by the Tribunal, I nevertheless am of the view that the errors are not material to the ultimate decision.

Pridgeon v Medical Council of New South Wales [2022] NSWCA 60

1. [55]

   The argument on Pridgeon was dealt with by the Tribunal as part of dealing with the plaintiff’s primary submissions. The Tribunal summarised the argument at [40]:

2. [56]

   The argument before me concentrated on whether the Tribunal had properly construed the term “public interest” which exists in the second limb. The Tribunal stated, at [62]:

3. [57]

   Paragraph 68 in Pridgeon states:

4. [58]

   The plaintiff submitted:

5. [59]

   The plaintiff continued:

6. [60]

   I agree with the defendant with respect to the application of Pridgeon. Taken from the headnote the facts in Pridgeon were:

7. [61]

   The facts in the present matter are obviously very different. The fundamental area of difference is that in Pridgeon the criminal conduct had nothing to do with the practice of medicine by the doctor. This led the Court of Appeal, in [68], to say:

8. [62]

   I first of all note that the decision in Pridgeon is limited to its own facts. It cannot be applied to the present case because the complaints against the plaintiff are unquestionably related to her profession as a pharmacist. As the defendant has stated in its written submissions:

9. [63]

   In summary, there is nothing in the decision in Pridgeon that would have made me reach a decision favourable to the plaintiff.

Costs

1. [64]

   The defendant has succeeded and in the normal course would be entitled to an order for costs in its favour. The plaintiff did however succeed on the accumulation point and may wish to make a submission ameliorating the normal costs order.

2. [65]

   I will make the ‘usual’ costs order but give the parties leave to make further submissions, should they wish on costs.

Orders

1. [66]

   I make the following orders:

   1. (1)

      The Summons filed on 15 October 2024 is dismissed.

   2. (2)

      The plaintiff is to pay the defendant’s costs of the proceedings.

   3. (3)

      The parties have leave to make submissions in respect of the costs order.