The Supreme Court allowed the Minister for Health and Children’s appeal and set aside the High Court judgment and order in a dispute over advance payments to pharmacists under the General Medical Services scheme.
The appeal concerned whether a 1971 memorandum between the Irish Pharmaceutical Union (IPU) and the Minister, which provided for advance payments, had become part of individual pharmacists’ 1996 contracts with Health Boards. The High Court had ruled that the pharmacists were entitled to those payments and that the Minister’s decision to discontinue them was an unlawful variation of their contracts.
The Supreme Court held that the High Court judge was wrong in law to find that the 1971 terms had been incorporated into the 1996 pharmacy contracts through Clause 19(3). That clause made the contracts contingent on terms agreed or to be agreed between the Minister and the Pharmaceutical Contractors’ Committee about arrangements for pharmaceutical services. The Court concluded that it did not incorporate the advance payment terms from the earlier memorandum.
The judgment noted that neither the 1996 memorandum nor the 1996 pharmacy contract expressly referred to advance payments. The 1996 arrangements replaced the 1971 arrangements, and the Court found no clear intention or legal route by which the earlier payment terms were carried forward. Evidence that payments continued after the 1996 contracts began did not establish that they were contractual entitlements; the practice was also consistent with an administrative scheme.
The Court also considered Clause 19(5), which provided for review and possible changes to the arrangements. It said the Minister could negotiate changes on the State’s behalf, but the IPU retained equivalent control over whether a change was agreed. The clause did not support the pharmacists’ claim that the Minister had breached their contracts.
Having decided the contract issue, the Supreme Court said it did not need to consider the separate issues of privity of contract or public law in detail. The judgment was delivered by Macken J on 29 April 2010. The IPU had not appealed the High Court’s dismissal of its own contractual claim against the Minister.