Collooney Pharmacy Ltd v North Western Health Board
| Jurisdiction | Ireland |
| Judge | Mr. Justice Aindrias Ó Caoimh |
| Judgment Date | 14 May 2004 |
| Neutral Citation | [2004] IEHC 92 |
| Date | 14 May 2004 |
| Docket Number | [No. 301 J.R./1996] |
| Court | High Court |
[2004] IEHC 92
THE HIGH COURT
BETWEEN
AND
and
BETWEEN
AND
Citations:
HEALTH ACT 1970 S59
PHARMACY ACT 1962 S2
TREATY OF ROME ART 6
TREATY OF ROME ART 48
HEALTH (COMMUNITY PHARMACY CONTRACTOR AGREEMENT) REGS 1996 SI 152/1996 ART 3
HEALTH ACT 1970 S59(4)
HEALTH (COMMUNITY PHARMACY CONTRACTOR AGREEMENT) REGS 1996 (REVOCATION) REGS 2002 SI 28/2002
HEALTH (COMMUNITY PHARMACY CONTRACTOR AGREEMENT) REGS 1996 SI 152/1996 ART 5
TRADE UNION ACT 1871
TRADE UNION ACT 1935
TRADE UNION ACT 1941
TRADE UNION ACT 1947
TRADE UNION ACT 1952
TRADE UNION ACT 1971
TRADE UNION ACT 1975
HEALTH ACT 1972 S59(2)
HEALTH ACT 1970 S58
MCCORD V ELECTRICITY SUPPLY BOARD (ESB) 1980 ILRM 153
PHARMACY ACT 1962 S2(3)
O'NEILL V MIN AGRICULTURE & FOOD 1998 1 IR 539
HEALTH ACT 1970 S59(1)
PHARMACY ACT 1962 S2(1)(C)
DOYLE V AN TAOISEACH 1986 ILRM 693
HEALTH ACT 1970 S26
ASSOCIATION OF GENERAL PRACTITIONERS LTD V MIN HEALTH 1995 1 IR 382 1995 2 ILRM 481
DEANE V VOLUNTARY HEALTH INSURANCE BOARD (VHI) 1992 2 IR 319
ZOCKOLL GROUP LTD & ORS V TELECOM EIREANN 1998 3 IR 287 1998/10/3239
HEALTH ACT 1970 S59(3)
HEALTH ACT 1970 S53
HEALTH (MISCELLANEOUS PROVISIONS) ACT 2001 S1
Judicial Review - Medical law - Contract - Pharmaceutical contract - Provision of medicine - Whether imposition of new contractual terms ultra vires - Whether agreement contrary to European law - Health Act, 1970 - Pharmacy Act, 1962.
Facts: The applicants brought judicial review proceedings regarding the imposition of a new community pharmacy contractor agreement ('the agreement') relating to the supply of drugs and medicines to eligible persons. The applicants sought orders of certiorari against the decision to impose the new terms claiming that the decision to impose same was ultra vires the Health Act, 1970 and that certain provisions of the new agreement were themselves ultra vires. In particular it was submitted that a provision relating to the automatic cessation of the agreement upon the change of ownership of a participating pharmacy. It was also submitted that certain terms of the agreement could be altered without the consent of the applicants which was an unreasonable provision and uncertain in law. It was also contended that a provision of the agreement relating to having necessary experience in 'community pharmacy' discriminated against other pharmacists from other member States within the EU. On behalf of the respondent it was contended that the terms of the agreement derived from comprehensive negotiations carried out between the Department of Health and the Irish Pharmaceutical Union. The terms of the agreement were intra vires the Health Act, 1970, were reasonable and valid and would contribute to an improvement in pharmacy services.
Held by Ó Caoimh J in refusing the relief sought. The terms at issue could not be said to unreasonable and were necessary to ensure the provision of high quality services to eligible persons. While there was a difficulty with some of the language in the provisions relating to the termination of the agreement in certain circumstances, the same provisions must be construed in a reasonable manner. It had not been demonstrated by the applicants that they had been significantly prejudiced by reason of the particular clauses in question.
Reporter: R.F.
Judgment of Mr. Justice Aindrias Ó Caoimh delivered the 14th day of May, 2004
By orders of this Court made 14 th October, 1996 and the 6 th November, 1996 (Kelly J.) the first and second applicants were given leave to institute these applications for the following relief:
(a) An order of certiorari quashing a decision of the respondent made in or about the month of August, 1996 to unilaterally impose the terms of a new community pharmacy contractor agreement ("the agreement") on the applicant herein as a condition of the applicant continuing to fully participate in the arrangements made by the respondent pursuant to s. 59 of the Health Act, 1970for the supply of drugs, medicines and medical and surgical appliances to eligible persons.
(b) A declaration that in purporting unilaterally to impose all the provisions of the agreement on the applicant, the respondent has acted ultra vires s. 59 of the Health Act, 1970.
(c) A declaration that the imposition of the provisions of clause 6 (2) of the agreement is ultra vires the powers of the respondent under s. 59 of the Health Act, 1970and/or void as being inconsistent with s. 2 of the Pharmacy Act, 1962.
(d) A declaration that in particular clauses 19 (1), 19 (3), 19 (5), 20 (1), 22 (3) and 22 (6) and 23 (1) of the agreement are ultra vires the powers of the respondent under s. 59 of the Health Act, 1970.
(e) If necessary, a declaration that clause 6 (2) of the agreement is contrary to Articles 6 and 48 of the EC Treaty.
By further order of this Court made 29 th April, 2002 (McKechnie J.) the applicants were further given leave to amend their statements of grounds by the inclusion of fresh grounds.
The grounds upon which this relief is sought is a follows:
1. Section 59 of the Health Act 1970imposes on the health boards, including the respondent, an obligation to make arrangements for the supply, without charge, of drugs, medicines and medical and surgical appliances to eligible persons. In pursuance of this obligation, the respondents have entered into contracts with the owners of pharmacies whereby such persons are obliged to supply drugs, medicines, medical and surgical appliances to eligible persons and entitled to reimbursement and certain fees in consideration therefor.
2. The applicants entered into such a contract with the respondents on or about the 1 st day of September 1995 ("the existing contract").
3. The Minister for Health is authorised to make regulations, with the consent of the Minister for Finance, for the purposes of s. 59 of the Health Act, 1970. In May, 1996 the Minister made the first such regulations, the Health (Community Pharmacy Contractor Agreement) Regulations, 1996 ("the 1996 Regulations"). Article 3 of the Regulations purports to exclude their application to any community pharmacy which was open and providing services under the Health Act, 1970on or immediately before the coming into force of the 1996 Regulations. The pharmacy owned by the applicant was such a community pharmacy.
4. By letter dated the 8th. day of August, 1996, the respondent sought to require the applicant to enter into a new community pharmacy contractor agreement ("the new agreement") within one week.
5. The applicant objects to the inclusion of certain clauses in the new agreement as hereinafter appears. The applicant sought to enter into negotiations in relation to the said clauses with the respondent. The respondent has indicated an unwillingness to enter into any negotiations in relation to the terms of the new agreement.
6. Community pharmacy contractor agreements in identical terms to the terms of the new agreement are being imposed by all health boards upon the owners of all community pharmacies in Ireland. The new agreement is stated by the respondent to have been drawn up pursuant to an agreement to be entered into by representatives of the Department of Health, health boards, General Medical Services (Payments) Board and the Irish Pharmaceutical Union on the future provision and improvement of community pharmacy services under the Health Act, 1970.
7. The continued full participation by the applicant in the arrangements for the provision of pharmacy services under the Health Act 1970is an economic necessity for the commercial viability of the applicant's pharmacy. Thus, in order to preserve its position, the applicant has executed the new agreement subject to its contention that certain of the clauses are ultra vires and void and upon the stated objection to challenge the imposition of same in an application for judicial review.
8. Clause 6 (2) of the new agreement requires that the pharmacy contractor ensures, inter alia, that the nominated supervising pharmacist has at least three years experience in the practice of community pharmacy. This clause is ultra vires s. 59 of the Health Act, 1970and is contrary to the terms of s. 2 of the Pharmacy Act, 1962which enables a body corporate to keep open a pharmacy provided it is personally supervised by a qualified pharmacist.
9. Clause 19 (1) of the new agreement provides that the agreement is to automatically terminate in the case of a body corporate where the supervising pharmacist either ceases to be entitled to practise or ceases to keep open the pharmacy. The severity of this clause is irrational and unreasonable in law and represents a disproportionate interference with the property rights of the applicant. Whilst the applicant accepts that the pharmacy must at all times be supervised by a qualified pharmacist it ought in fairness be entitled to provide a replacement supervising pharmacist upon an existing supervising pharmacist ceasing to so act.
10. Clauses 19 (3) and 19 (5) effectively permit the terms of the agreement to be altered without the consent of the applicant in the absence of any regulations made by the Minister under s. 59 of the Health Act, 1970. Such provisions are unreasonable and uncertain in law and represent a potential disproportionate interference with the applicant's property rights. They are accordingly ultra vires s. 59 of the Health Act, 1970.
11. Clause 20 (1) provides that where a supervising pharmacist ceases to act in that capacity, the...
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