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April 2002 issue Pharmacy Today magazine


  • Pharmaceutical Society will test ownership law in court
  • Does 'holding an interest' include managing and consulting?

The "one pharmacist, one pharmacy" ownership principle may be put to the test in the Dunedin High Court, even as the Pharmacy Act is about to be laid to rest.

Pharmacy Today understands the case will examine a tangle of companies and debentures placed on several Otago pharmacies and one in Canterbury.

The Pharmaceutical Society is expected to file court proceedings shortly to seek a declaratory judgment following a complaint from Wanaka pharmacist Aaron Heath.

Aaron Heath says the complaint centres on the involvement of Otago University School of Pharmacy lecturer and pharmacist/proprietor Peter Barron and other pharmacists.

Because of the nature of the case, both Peter Barron and Aaron Heath are expected to be named as defendants.

The court will examine the definition of "holding an interest" in a pharmacy under the Pharmacy Act, and whether this includes a management or consultancy role.

It will then question whether Peter Barron holds an interest in more than one pharmacy in terms of the Pharmacy Act.

Peter Barron's relationships with several pharmacies and companies holding debentures over them will likely come under scrutiny.

A search of Companies Office records reveals he is a director and holds shares in Central Otago Pharmacy Ltd which owns Alexandra Pharmacy. He is also a director and sole shareholder in the Mackenzie Group which holds debentures over at least one Otago pharmacy.

Peter Barron is also listed as sole director and a shareholder in The Otago Group Limited. A number of Otago Pharmacy School faculty members and a family trust are also shareholders. This company holds a debenture over one Dunedin pharmacy.

Although two of the pharmacies at the centre of the complaint are not owned or directed by Peter Barron, the companies give their registered office as Peter Barron's home address, according to Companies Office records.

Peter Barron says while he believes it is inappropriate to comment on the case in detail, he says the Pharmaceutical Society has been given little choice other than taking the issue to court.

"There are conflicting legal opinions as to the definition of holding an interest (in a pharmacy) and the only place to get a definitive solution is in court.

"Given the government's intention to change ownership, it seems an unnecessary use of the profession's resources at a time when major issues are facing pharmacy," he says.

The society's lawyers KPMG Legal wrote to the society last year with their view of ownership under the Act.

This letter is posted on the society's website and states a person may hold an interest if they or their nominee is able to affect ownership, management or control of the pharmacy to any extent.

This can be through any charges, loans, guarantees or indemnities.

One of the exceptions is that if holding security for a loan is in good faith, or in the normal course of business.

According to companies office records, a Dunedin-based pharmaceutical wholesaler, as well as a number of other companies, holds debentures over some of the pharmacies. Because of this, questions may be raised within the profession over non-pharmacist ownership.

Another company registered to a Dunedin accountant's home address, holds debentures over two of the pharmacies in question and one over the Mackenzie Group.

The Pharmaceutical Society is saying little about the case although chief executive Dr Joan Baas says it will legally clarify what holding an interest means.

Pharmacy Today understands the society has received another complaint over multiple pharmacy ownership by an Auckland pharmacist.

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