England and Wales High Court (Administrative Court) Decisions

1. MR JUSTICE HARRISON: This is an application for judicial review to quash a decision of the respondent, The Family Health Services Appeal Authority ("the FHSAA") dated 21st November 1995, when it dismissed an appeal brought by the second applicant, Mr Sharma, against a decision of the Essex Family Health Services Authority ("the FHSA") not to grant his application to include him on the pharmaceutical list for their area to supply services from premises at Tesco's supermarket, High View Avenue, Laindon, Basildon.

2. Before referring to the history of this matter, I should first refer to the relevant statutory framework which is contained in the National Health Service (Pharmaceutical Services) Regulations 1992, which were made under the National Health Service Act 1977. Part 2 of the regulations is concerned with the provision of pharmaceutical services by chemists. Under regulation 4(2)(b) a chemist who is already included in the pharmaceutical list must apply to the FHSA if he wants, firstly, under regulation 4(2)(b)(i), to open additional premises within the FHSA's area from which to supply the same or different pharmaceutical services; or, secondly, under regulation 4(2)(b)(ii), to change the premises from which he provides pharmaceutical services to other premises within that locality from which he wishes to provide the same or different pharmaceutical services; or, thirdly, under regulation 4(2)(b)(iii), to provide different pharmaceutical services from his existing premises.

3. In the case of an application under regulation 4(2)(b)(ii) to change premises within the neighbourhood from which to provide the same pharmaceutical services, the FHSA must grant the application if they are satisfied that the change is a minor relocation. If it is not a minor relocation, regulation 4(4) provides that it shall be granted by the FHSA only if:

4. As will become clear, that is the relevant test applicable to Mr Sharma's application, which was the subject of the appeal to which this application for judicial review relates.

5. Finally, I should just mention that regulation 4(9) effectively provides that, when an application is granted, the pharmacy must open within six months unless the FHSA agree to an extension of time.

6. Having referred to the statutory framework, I turn to the relevant history of this matter. In 1993 Tesco Stores Limited, the first applicant, applied to open a pharmacy at their superstore at Laindon, which was then under construction. Mr Sharma, the second applicant, applied to open a pharmacy at the neighbourhood centre, Great Berry, Langdon Hill, Basildon, which is about a quarter of a mile from the site of the Tesco superstore. That neighbourhood centre includes within it a doctors' surgery.

7. In July 1993 the relevant subcommittee of the FHSA refused the Tesco application but granted Mr Sharma's application. It is stated in the representations subsequently made by the FHSA to the FHSAA on Mr Sharma's appeal, which is the subject of these proceedings, that Mr Sharma had put forward a very convincing case for a pharmacy in the neighbourhood centre which had much support from local organisations. However, Mr Sharma did not open his pharmacy at the neighbourhood centre in 1993 or 1994, because, he said, of his concern about its viability. As a result of negotiations with Tesco, in December 1993 he applied to the FHSA to relocate to the Tesco superstore on the basis that it was a minor relocation. That application was refused by the FHSA in January 1994. He appealed to the FHSAA, who dismissed his appeal in July 1994. They concluded that the extra distance would deter residents on foot from using the pharmacy in the superstore and that the population served in the new location would not be essentially the same as that which would be served in the neighbourhood centre. They referred to the fact that the original grant to Mr Sharma was based on the fact that it would be serving those who used the neighbourhood centre together with those who used the doctors' surgery. They concluded that the proposal was not a minor relocation and they dismissed the appeal.

8. In November 1994 Mr Sharma made a full application for inclusion on the pharmaceutical list for a pharmacy at the superstore, that is to say on the basis that it was not a minor relocation. He made that application on the basis of it being an additional premises rather than a change of premises because he had other pharmacies within the FHSA area, but he still had not yet opened the pharmacy at the neighbourhood centre. However, in his application he made it clear that if his application were granted he would surrender his pharmacy at the neighbourhood centre, which, as I have said, at that time remained unopened. In a document accompanying his application he stated:

9. In a further letter to the FHSA in April 1995 he

10. An ESP payment is an essential small pharmacy payment, which is a form of Government subsidy.

11. On 26th July 1995 the FHSA refused his application and he appealed to the FHSAA. Before his appeal was determined he opened his pharmacy at the neighbourhood centre on 18th August 1995. Apparently the FHSA had thus far been granting him the necessary extensions to the six month period. Thus it was that the FHSAA came to treat his application as being for a change of premises under regulation 4(2)(b)(ii), because he was by then providing services at the pharmacy from which he wanted to change, although that had not been the position at the time when his application was made.

12. In a letter to the FHSAA dated 22nd August 1995, that is to say shortly after he had opened the pharmacy, he made it clear that he would surrender his existing pharmacy if his application was granted. He stated:

13. I was told that Mr Sharma's pharmacy at the neighbourhood centre is only open for about 30 hours a week from Monday to Friday, not including Tuesday afternoons and not including Saturdays or Sundays. Its hours are from 9 to 12 and 2:45 to 6:30 pm. However, none of that information was given to the FHSAA, who were not provided with any information about the opening hours of the neighbourhood centre pharmacy. They were, however, given information that the proposed pharmacy at the superstore would be open for over 70 hours a week, including Saturdays and Sundays and late night opening.

14. The FHSAA issued its decision letter on 21st November 1995 dismissing Mr Sharma's appeal. In that letter they made it clear that they took into account that Mr Sharma would relinquish his NHS contract at the neighbourhood centre if permission were given for the pharmacy at the superstore. They set out in the decision letter the relevant test under regulation 4(4), namely whether it was necessary or desirable to grant the application in order to secure adequate provision of pharmaceutical services in the neighbourhood in which the proposed pharmacy at the superstore was to be located.

15. There is no dispute over the FHSAA's definition of the neighbourhood. Having referred to the fact that Mr Sharma's pharmacy at the neighbourhood centre, a quarter of a mile away, had opened in August 1995, the decision letter continued as follows:

16. That is the decision that is attacked in these proceedings. It is attacked on two grounds. The first ground is that the FHSA erred in law by applying the wrong test in considering which of the two pharmacies was preferable, rather than the test under regulation 4(4) of whether the proposed pharmacy was necessary or desirable to secure adequate pharmaceutical services. The second ground is that the decision was Wednesbury unreasonable in that no reasonable FHSAA could have reached that decision.

17. In elaborating on the first ground of appeal, Miss Booth QC, who appeared on behalf of the applicants, submitted that the FHSAA had simply focused on the existence of the neighbourhood centre pharmacy as a matter of geography without looking at the wider picture of the desirability of the Tesco proposal, which included the merits of serving a greater number of people over a greater number of hours and which would not depend on Government subsidy for its economic viability.

18. She also submitted that the FHSAA had failed to take account of a number of considerations set out in paragraph 29 of the Department's guidelines contained in a document entitled "Pharmaceutical services revised arrangements for considering applications to dispense". The considerations referred to in that paragraph relied on by the applicant included such matters as the normal fabric of people's lives, the number of prescriptions dispensed, the probability of people shopping using the pharmacy and the perceived unwillingness of existing contractors, ie Mr Sharma, to meet a stated need. Those matters came under the heading of "Information likely to be needed when considering an application". It was accepted that the guidelines did not have any binding force.

19. In elaboration of the second ground of appeal, Miss Booth submitted that no reasonable FHSAA could conclude that it was not desirable to grant the application for the pharmacy at Tesco to secure adequate pharmaceutical services in circumstances where the proposed pharmacy would serve more people for longer hours and would be commercially viable and when the existing pharmacy would serve less people for less hours and would depend on Government grant for its commercial viability.

20. Dealing with the first ground of appeal, I consider that the FHSAA were perfectly entitled to take into account the existence of the pharmacy at the neighbourhood centre. Mr Sharma had argued strongly for it when his application was granted in 1993, and although he had expressed concern about its viability subsequently, he had nevertheless gone ahead and opened it and it apparently still remains open today. At no time had he suggested to the FHSAA that he would close it if his application for the superstore pharmacy was not granted. He only said that he would close it if his application for the superstore pharmacy was granted. As Miss Carrs-Frisk, who appeared for the FHSAA, pointed out, he could close his existing pharmacy tomorrow if it were not viable and apply afresh for the superstore pharmacy.

21. The FHSAA concluded that only one pharmacy was needed to serve the defined neighbourhood. A pharmacy already existed at the neighbourhood centre and in practical terms, the FHSAA were considering whether it was desirable that the pharmacy should be in the Tesco superstore or at the neighbourhood centre in order to secure adequate provision of pharmaceutical services. It was therefore inevitable that they would express a preference between the two. I accept Miss Carrs-Frisk's submission that the FHSAA's expression of a preference for the neighbourhood centre pharmacy was simply another way of applying the regulation 4(4) test. That test was expressly set out in the decision letter, and the conclusion was in terms that it was neither necessary nor desirable to grant the application in order to secure adequate provision of pharmaceutical services in the neighbourhood.

22. I do not accept that the way in which the FHSAA approached the matter involved an error of law. Nor do I accept that it involved a failure to take into account the wider picture, including such matters as the number of people served, the length of opening hours, commercial viability, or the various considerations mentioned in paragraph 29 of the guidelines.

23. Firstly, it is clear from the affidavit of Mr Harrow, the chairman of the Appeal Committee of the FHSAA which considered this application, that the FHSAA did take into consideration the greater number of people who would come from a wider area to the superstore to shop, to whom the pharmacy would be an additional convenience, but they also took into account that those people would have access to services elsewhere.

24. Secondly, as Miss Carrs-Frisk pointed out, no argument had been addressed to the FHSAA that the superstore would be open for a greater number of hours than the existing pharmacy. There was no evidence at all adduced before the FHSAA as to the opening hours of the pharmacy at the neighbourhood centre. Furthermore, this particular point was not mentioned in the Form 86A or in the applicants' skeleton argument. Whilst I suppose it could be said that it may be inferred that the superstore pharmacy was likely to be open for longer periods than the neighbourhood centre pharmacy, it was for the applicant to make their case, and the FHSAA cannot be blamed for failing to take into account a point which was not made to them at all on behalf of the applicants.

25. Thirdly, Mr Harrow expressly states in his affidavit that the FHSAA had in mind the applicants' concern about commercial viability, but they did not feel that it swayed their decision under regulation 4(4). That evidence is not disputed and I have no reason to doubt it. I do not therefore consider that the FHSAA failed to take into account the relevance, if any, of the commercial viability.

26. Fourthly, Mr Harrow expressly states in his affidavit that the FHSAA had regard to a subparagraph of paragraph 29 of the guidelines which deals with ease of access and travelling distance to the pharmacy. That was a matter which was particularly in issue. I do not accept that it can be inferred that the FHSAA did not take into account the other matters mentioned in paragraph 29 of the guidelines simply because they were not expressly mentioned in Mr Harrow's affidavit. This alleged failure was not a matter raised in the Form 86A. It was raised for the first time in the applicants' skeleton. It was not therefore possible for Mr Harrow to deal with it in his affidavit. Despite the fact that it had not been raised, Mr Harrow does in fact refer in his affidavit to the normal fabric of people's lives and to the probability of people shopping using the pharmacy, which are two of the matters in paragraph 29 of the guidelines to which the applicants referred. In fact I was told by Miss Carrs-Frisk that her instructions were that the other matters raised by the applicants were taken into account, save one matter which related to Mr Sharma's alleged stated intention to close the existing pharmacy which rightly, in my view, was not taken into account by the FHSAA because Mr Sharma had only said that he would close the pharmacy if his application were granted; he had not said that he would close it if his application were refused.

27. I do not therefore consider that there is any substance in the submission that the FHSAA failed to take into account any relevant considerations in the guidelines, which in any event do not have the force of law.

28. It follows from what I have said that I do not accept either of the two grounds of appeal relied on by the applicants. In my judgment, the FHSAA did not err in law in the way in which they decided this application. There was no failure by them to take into account matters that they should have taken into account and the decision cannot be said to be Wednesbury unreasonable.

29. In my view Miss Carrs-Frisk is right when she says that this application is, in reality, a challenge on the merits. The applicants have, in my judgment, failed to establish an error of law and this application must therefore be dismissed.

30. MISS CARRS-FRISK: My Lord, in those circumstances of course I would ask for our costs of the application.

31. MR JUSTICE HARRISON: Can you resist that?

32. MR HUNT (for Miss Booth): My Lord, no, I cannot resist that. I have no other application.

33. MR JUSTICE HARRISON: Then the respondents shall have their costs.