Pharmacy Care Plus Ltd., R (on the application of) v Family Health Services Appeals Unit

Under regulation 17A of the National Health Service (Pharmaceutical Services) Regulations 2005, an application must be refused where the statutory conditions are satisfied. In deciding whether proposed services form part of the same service as existing services, the decision-maker must consider all relevant information. Ownership and control are normally highly relevant, together with the nature and operational separation of the businesses and their personnel.

A material mistake of fact may justify judicial review where the fact was objectively verifiable, the claimant was not fairly responsible for the mistake, and the mistake materially influenced the decision. The court may quash the decision where fairness requires it, even if the claimant could have undertaken further investigations.

The claimant sought judicial review of a decision allowing an appeal by Medsdirect2u Limited against refusal by a primary care trust to include it on the local pharmaceutical list. The refusal had relied on regulation 17A, concluding that the proposed premises were adjacent to an existing pharmacy and that the proposed service formed part of the same service.

The appeal committee allowed the appeal after treating the two companies as separate and finding no apparent commercial connection. The claimant argued that the committee had proceeded on a material mistake of fact and on insufficient evidence. The central issues were whether the mistake-of-fact ground was established and whether the decision should be quashed.

1. Judicial review allowed. The appeal committee’s decision of 25 June 2012 was quashed. Costs were reserved for determination on paper.
2. Regulation 17A of the National Health Service (Pharmaceutical Services) Regulations 2005 imposed a mandatory prohibition where its two conditions were met. The decision-maker had to consider all information relevant to whether the proposed services should reasonably be treated as part of the same service as existing services.
3. Ownership and control of the businesses were highly relevant considerations. Depending on the circumstances, the decision-maker might also need to consider the nature of the businesses, their physical and operational separation, whether employees worked in both businesses, and other relevant matters. The relevant question was whether the applicant had a sufficiently distinct identity and would provide a distinct service.
4. The principles in E v Secretary of State for the Home Department [2004] QB 1044 applied. The requirements ordinarily included an existing factual mistake, an objectively verifiable and established fact or evidence, absence of responsibility on the claimant’s part, and material influence on the reasoning. There was also a shared interest in co-operating to achieve the correct result.
5. Those requirements were satisfied. The committee had proceeded on the mistaken basis that there was no established link between the companies apart from some coincidence of directors. Companies House information objectively demonstrated a substantial connection in ownership and management. The mistake materially influenced the decision, and it would have been unfair to hold the claimant responsible merely because it had not independently checked assertions made by the applicant company.
6. Ground 2, based on insufficient evidence or irrationality, was not required to be determined. If it had stood alone, it would probably have failed because the material before the committee could support its conclusion that it was not satisfied that the services were the same.
7. In exercising the discretion to quash, the court considered prejudice, delay and the applicant’s seriously misleading statements. The balance favoured quashing, although the applicant could make a further application.

This was a first-instance judicial review claim. Permission was granted by HHJ Pelling QC on 12 December 2012 on the mistake-of-fact and insufficient-evidence grounds. The Administrative Court quashed the defendant’s appeal decision of 25 June 2012.