Carbine Chemicals Pty Ltd and Australian Pesticides and Veterinary Medicines Authority

[2022] AATA 2157

Carbine Chemicals Pty Ltd and Australian Pesticides and Veterinary Medicines Authority [2022] AATA 2157 (8 July 2022)

Division:GENERAL DIVISION

File Number(s):      2020/5142

Re:Carbine Chemicals Pty Ltd

APPLICANT

AndAustralian Pesticides and Veterinary Medicines Authority

RESPONDENT

DECISION

Tribunal:Dr Damien Cremean, Senior Member

Date:8 July 2022

Place:Melbourne

The Tribunal affirms the decision under review.

...........................[sgd].............................................

Dr Damien Cremean, Senior Member

Catchwords

Agricultural and Veterinary Chemicals Code – recall notice – where product labels amended – whether recall notice was valid – whether products veterinary chemical products – decision affirmed

Legislation

Administrative Appeals Tribunal Act1975 (Cth)
Administrative Decisions (Judicial Review) Act 1977 (Cth)
Agricultural and VeterinaryChemicals Code Act 1994 (Cth)
Agricultural and Veterinary Code Regulations 1995 (Cth)

REASONS FOR DECISION

Dr Damien Cremean, Senior Member

8 July 2022

INTRODUCTION

1. The Applicant, Carbine Chemicals Pty Ltd (‘Carbine’), seeks review of a decision of the Respondent, the Australian Pesticides and Veterinary Medicines Authority (‘APVMA’), made on 30 July 2020 to issue a recall notice under the Agricultural and Veterinary Chemicals Code (‘Code’) scheduled to the Agricultural and VeterinaryChemicals Code Act 1994 (Cth) (‘the Act’). Under the Act are made the Agricultural and Veterinary Code Regulations 1995 (Cth) (‘the Regulations’).

2. The notice was issued on the basis that APVMA considered 23 products offered by Carbine, in a product brochure dated 16 July 2020 and on its website, were ‘veterinary chemical products’ as defined by s 5 of the Code. These products had not been registered as required under the Code.

3. The notice required Carbine to immediately stop supplying the products, to take steps within 14 days to recover existing stock of the products from retailers or distributors, and to report to APVMA upon request on the actions taken to comply with the notice.

4. Carbine, however, contends that the products in question bore old labels that had been amended prior to APVMA issuing the notice. This was despite the product brochure remaining in its unamended form on the website.

5. Carbine further contends that following the application of new labels, the products are exempt from registration and therefore the notice is one that should not have been issued.

   LEGISLATION

6. The Code defines ‘veterinary chemical product’ in s 5 as:

   (2)… a substance or mixture of substances that is represented as being suitable for, or is manufactured, supplied or used for, administration or application to an animal by any means, or consumption by an animal, as a way of directly or indirectly:

   (a)preventing, diagnosing, curing or alleviating a disease or condition in the animal or an infestation of the animal by a pest; or

   (b)curing or alleviating an injury suffered by the animal; or

   (c)modifying the physiology of the animal:

   (i)so as to alter its natural development, productivity, quality or reproductive capacity; or

   (ii)so as to make it more manageable; or

   (d)modifying the effect of another veterinary chemical product.

   (3)A veterinary chemical product includes:

   (a)a vitamin, a mineral substance, or an additive, if, and only if, the vitamin, substance or additive is used for a purpose mentioned in paragraph (2)(a), (b), (c) or (d); and

   (b)a substance or mixture of substances declared by the regulations to be a veterinary chemical product.

   (4)A veterinary chemical product does not include:

   (a)  a substance or mixture of substance that is:

   (i)prepared by a pharmacist in accordance with the instructions of a veterinary surgeon; or

   (ii)prepared by a veterinary surgeon;

   in the course of the practice, by the person preparing the substance or mixture of substances, of his or her profession as permitted by or under a law of this jurisdiction; or

   (b)  a substance or mixture of substances declared by the regulations not to be a veterinary chemical product.

7. The Regulations set out further, at Part 3 of Schedule 3AA, the substances or mixtures of substances declared not to be veterinary chemical products. This relevantly provides under Division 3.1, clause 3:

   Item                Class of substance or mixture of substances

   1         Animal feed products that incorporate an excluded nutritional or digestive product, if:

   (a)the container for the animal feed product is labelled in accordance with the instructions on the label for the container for the excluded nutritional or digestive product; and

   (b)the excluded nutritional or digestive product is incorporated at a rate of use in accordance with the label for the container for the excluded nutritional or digestive product; and

   (c)the claims made for the animal feed product do not exceed the claims made for the incorporated nutritional or digestive product.

   2       Medicated stockfoods and medicated premixes

   (a)any veterinary chemical product that is incorporated in the medicated stockfood or medicated premix:

   (i)is a registered chemical product; and

   (ii)is incorporated at a rate of use in accordance with the approved label for containers for that registered chemical product, and

   (b)the container for the medicated stockfood or medicated premix is labelled in accordance with the instructions on the approved label for that registered chemical product.

   3      Excluded nutritional or digestive products…

   …

8. Division 3.2 of schedule 3AA of the Regulations outlines the requirements for excluded nutritional or digestive products:

   4 Excluded nutritional or digestive products

   (1)A substance or mixture of substances is an excluded nutritional or digestive product if:

   (a)the substance or mixture is intended for consumption by an animal; and

   (b)the following requirements are met in relation to the substance or mixture:

   (i)the ingredient requirements under clause 5;

   (ii)the claims requirements under clause 6;

   (iii)the labelling requirements under clause 7;

   (iv)the manufacturing requirements under clause 8.

   (2)Subparagraph (1)(b)(iv) does not apply if the substance or mixture is a block or lick that only contains one or more of the following:

   (a)vitamins;

   (b)minerals;

   (c)amino acids;

   (d)binders.

   (3)Despite subclause (1), none of the following is an excluded nutritional or digestive product:

   (a)a substance or mixture of substances included in a class of substances or mixtures of substances set out in the table in clause 2 (substances or mixtures declared to be veterinary chemical products);

   (b)an intraruminal bolus;

   (c)a substance or mixture of substances intended for direct application by a person to an animal’s digestive tract.

9. The Code provides in s 101 that:

   Recall of products that are not registered or whose registration is being reconsidered

   (1)If:

   (a)a chemical product (other than a reserved chemical product) is not registered under the Agvet Code of this jurisdiction; or

   (b)the APVMA is reconsidering the registration of a chemical product under Division 4 of Part 2 of that Code;

   the APVMA may give written notice to any person (the notified person) who has, or has had, possession or custody of stocks of the product, or of a particular batch of the product, in this jurisdiction, requiring the notified person to do any one or more of the things mentioned in subsection (2).

   (2)The things that the notified person may be required to do under subsection (1) are as follows:

   (a)not to supply, or to stop supplying, the product, or that batch, in this jurisdiction either immediately or within a stated period;

   (b)to take any action stated in the notice that the notified person is reasonably capable of taking to recover stocks of the product or of that batch from any other person in this jurisdiction:

   (i)to whom the product or that batch has been supplied by the notified person; or

   (ii)who has possession or custody of any such stocks directly or indirectly because of a supply by the notified person;

   (c)if the product is not registered – to destroy, as stated in the notice, stocks of the product or of that batch in the possession or custody of, or recovered by, the notified person in this jurisdiction or to deal with them as stated in the notice;

   (d)to report to the APVMA within a stated period on the action taken by the notified person under the notice.

   HEARING

10. The hearing in this matter took place by video over four days, commencing on 1 February 2022, resuming on 2 and 3 February, and concluding on 17 March 2022.

11. The Applicant was represented by Mr J Gottschall of Counsel and the Respondent by Ms R Sion, also of Counsel. Mr J Otis, solicitor from Otislegal, was in attendance for the Applicant, and Ms S Hardie and Mr M Palfrey, solicitors from HWL Ebsworth, were also in attendance for the Respondent.

12. At the hearing, Mr J Baker (who was also recalled) and Dr F Smart gave affirmed evidence on behalf of the Applicant, and Ms L Weston and Dr D Sibanda gave affirmed evidence on behalf of the Respondent.

13. Each witness was cross-examined – the cross-examination of Dr Sibanda being of inordinate length, and in my view, not achieving anything of substance.

14. At the conclusion of the hearing, I reserved my decision.

    ISSUES AND CONTENTIONS

15. It was not easy to discern the issues and contentions of the Applicant.

16. Throughout the hearing, the Applicant was of the view that this was a review of a finalised decision. This notion was opposed by the Respondent, which contended that the Applicant’s application for review was ‘misconceived’ at the outset, in that it was embarked upon at a time when the Respondent was mid-way through a process of an internal review based on the amended labels.

17. I sought to make it clear that the Tribunal was established to review factual matters and not to decide matters that should properly be the subject of challenge under the Administrative Decisions (Judicial Review) Act 1977 (Cth) (‘ADJR Act’). It was evident to me that some of the Applicant’s submissions, or positions advanced, were really directed to matters arising under the ADJR Act.

18. Nonetheless, I am prepared to assume, in accordance with authority and for the purpose of this exercise, that I should treat any identifiable decision of the Respondent, as one apparently authorised by the Act. I shall say no more about that aspect of the matter.

19. Further, I say nothing about the question of whether the Respondent, in giving its decision and reasons in support, has complied with s 37(1) of the Administrative Appeals Tribunal Act1975 (Cth). No attempt was made before the hearing to ventilate this as an issue which was the appropriate time to do so. It is too late to raise this as an issue by the hearing stage where evidence is being given.

20. The Applicant contends that the Respondent’s recall notice in respect of the Applicant’s products listed in such notice are, or include, products that are ‘veterinary chemical products’ within the meaning of s 5 of the Code. It is argued that if the products, or any of them, are not products of that kind then such notice was issued ‘in error’.

21. I assume from this that the Applicant is submitting not that the power to issue the notice was lacking but that the decision to issue the notice was wholly or partly erroneous such that it should be wholly or partly set aside.

22. The Respondent submits that the application for review is ‘misconceived’, referencing a concession by the Applicant that the 23 products which were the subject of the notice required registration. It further submits that, in any event, the decision under review is the correct or preferable one which should be affirmed.

23. The Respondent terms these the ‘original’ products but says the 21 ‘amended’ products require no further decision to be made by it.

    CONSIDERATION

24. In the somewhat odd and confusing circumstances of this application, I proceed as I have said that I am asked to review the decision leading to the issue of the recall notice.

25. In doing so I shall only review aspects of the evidence as I go.

26. As I have pointed out, that does not extend to reviewing whether the notice was in any way statutorily valid. The submission by Counsel for the Applicant that the decision “proceeded from an incorrect fact-finding exercise and indeed inadequate application of the law to the …facts found” can therefore only be considered by the Tribunal to the extent that it raises a review matter under s 25 of the Administrative Appeals Tribunal Act 1975 (Cth) (‘AAT Act’).

27. The question for the Tribunal is simply whether the facts make the decision to issue the notice the correct or preferable one. That said, an enormous amount of time was simply wasted on incorrect submissions and unnecessary cross-examination by the Applicant’s Counsel. The Tribunal has, as part of its objectives, provision of a mechanism of review that inter alia is informal and quick. The parties must assist in this.

28. In summary, the Applicant contends that none of the 23 products listed in the notice are ‘chemical products’ under s 101 of the Code. The products appear to be equine supplements in the form of vitamins or similar.

29. The affirmed evidence of Mr Baker confirmed the contents of his two affidavits as being true and correct. The earlier was sworn on 15 March 2021 and the latter on 13 May 2021.

30. I have read both affidavits and noted their contents. I note with interest paragraph 7 of the former, that in “about early February 2019 Carbine engaged Dr Geoffrey Smart…as a consultant to assist it generally and with regard to all APVMA related matters”.

31. The oral evidence given by Mr Baker was mostly uninformative and cross-examination of him uneventful. 

32. He was unable to offer any scientific evaluations of the products except for what he had been told by his late father. His father died in 2014 and it was his father who had started Carbine. He did clarify, however, that the Applicant did not sell products to the public directly and merely supplied products to wholesalers.

33. In cross-examination, he reiterated his position that the Respondent’s decision to issue the recall notice was premature because insufficient investigations had been undertaken; and had proper assessments been made, products with amended labels (‘amended products’) would have been discovered. He also agreed that some three months expired after the Respondent issued a letter calling on the Applicant, by its lawyer, to respond to advice regarding the registration process. Having heard nothing, the Respondent issued the recall notice.

34. Mr Baker agreed that he and Dr Smart had together undertaken an ‘extensive analysis and review’ of the Applicant’s entire product range, including to determine whether any of the products required registration with the Respondent.

35. Mr Baker agreed that a catalogue downloaded in January 2020 still showed that products subject to the recall notice were available for sale in the market. But he agreed these were products still being investigated to see if they needed registration.

36. In re-examination, Mr Baker confirmed he did not know any science that might bear on modifying the physiology of an animal.

37. I was therefore concerned to learn what Dr Smart had to say in the matter.

38. Dr Smart gave affirmed evidence he was a qualified agricultural scientist with a Doctor of Philosophy (‘PhD’). Mr Gottschall informed the Tribunal that this PhD was in genetics.

39. Dr Smart agreed that the contents of a report dated 10 March 2021 and a supplementary report dated 15 March 2021 prepared by him were true and correct. He also affirmed the contents of his affidavit as true and correct on 14 May 2021. There was also a confidential annexure to his affidavit.

40. I have read and considered each of these documents – the affidavit, in particular, containing complex details.

41. Dr Smart is obviously a highly qualified individual who said that his background is in plant genetics. He agreed he had previously worked for the Respondent and left in August 2006. For the last 10 years he has been self-employed.

42. Dr Smart’s evidence was to the effect that he had worked with Mr Baker for a period of time addressing concerns of the Respondent. He said he had considered the labels on each of the products in question and denied he had adopted a ‘broad-brush’ approach.

43. This was so even though he could not recall the contents of his report, despite it being prepared less than a year ago. Indeed, Dr Smart seemed to lack an up-to-date recollection of many critical events at the hearing, including the letter of instruction sent to him by Mr Otis for the Applicant. In that regard, he claimed to have had ‘a fairly demanding last 12 months’ including his sister’s diagnosis of bowel cancer.

44. The complexities in the detail of his evidence make it difficult to state its net effect. However, based on his later affidavit, and except as specified, it is a fair summary of his evidence as I see it. It appears that in respect of each of the products in question, no scientific or logical basis is disclosed for a conclusion that registration is required, other than the fact that the products met the exception under clause 4(3)(c) of Division 3.2 of Schedule 3AA of the Regulations.

45. Under cross-examination, Dr Smart agreed that the Respondent had indicated that 12 of the 22 (or 23) amended products are most likely acceptable to the Respondent without registration because they contain exceptional nutritional messages. In respect of the others, he agreed the Respondent had not yet made a decision, but that in the view of Dr Sibanda they ‘might’ require registration. He also agreed that he was, in effect, asked to comment on comments.

46. The affirmed evidence of Ms Weston was to the effect of her affidavit, affirmed on 20 April 2021, which she said was true and correct with some minor changes. She is employed as a legal officer by the Respondent.

47. In the detailed circumstances set out in her affidavit, Ms Weston maintains that the recall notice of 30 July 2020 issued under s 101 of the Code was validly issued and that the Tribunal ought to affirm the Respondent’s decision.

48. The evidence of Ms Weston was in the nature of formal, and not scientific, evidence. Cross- examination of her, although amorphous and unfocused, was uneventful.

49. The affirmed evidence of Dr Sibanda was that he was a veterinarian, with a master’s degree in Veterinary Tropical Diseases, employed by the Respondent as a Director for Veterinary Medicines.

50. Dr Sibanda affirmed that the contents of his affidavit, affirmed on 19 April 2021, were true and correct.

51. In the course of his affidavit, he said he had assessed the Applicant’s product brochure relating to 23 products and set out the results of his assessment in tabular form in respect of each. His assessments were carried out on the labels for the 23 products set out in the brochure of the Applicant provided on 30 January 2020. He noted that all of the labels required the products to be administered ‘directly into the horse’s mouth’.

52. Dr Sibanda also confirmed as true and correct the contents of a further truncated affidavit affirmed by him on 12 November 2021.

53. In cross-examination, Dr Sibanda said that when he read labels, he would read ‘all’ the information set out. He said it was his job to examine labels “to make sure they are clear”. As to the label he was being asked about, he said it would be “easy” for users to misinterpret it. He said it was “not clear” based on his experience of assessing labels “over many years”. He denied this was an answer given only because it was favourable to his employer. Rather, he said he was giving it as a veterinarian.

1. Dr Sibanda denied he was “merely speculating about what a label could theoretically or possibly be understood to mean” and said he was reading “exactly” what the label or labels concerned said.

2. When asked, Dr Sibanda said that Dr Smart was giving evidence “as a matter of defence” and “not a matter of being a scientist”. Mr Gottschall put it to him, however, that he had “impugned the independence of Dr Smart” but was “hardly independent himself”, and indeed was “less independent” than Dr Smart.

3. In my view, the cross-examination of Dr Sibanda was otherwise uneventful in terms of what it produced by way of relevant evidence, except as I have set out. Large areas of it were simply unnecessary or ill-focused.

ANALYSIS

1. During the course of the hearing, I was left to wonder what Mr Gottschall and his instructor saw as their mission in seeking review of the decision.

2. Subsequent to the decision, agreeable amendments had already been made to some of the labelling. I was left trying to understand the remaining issues in dispute. I was not assisted by the confusing submissions by Mr Gottschall, whose cross-examination of Dr Sibanda caused the case to expand beyond a reasonable duration.

3. The Outline of Submissions provided by Mr Gottschall seems to also traverse a range of irrelevant issues and makes a number of inconsequential points. For example, he says the Respondent “failed to adduce evidence in chief that might substantiate Dr Sibanda as a person with specialised knowledge” and “the vague evidence [Dr Sibanda] provided at the invitation of the Tribunal does not substantiate his training, study or experience”. He then says in the following sentence that the Respondent “failed to lead” evidence about Dr Sibanda’s qualifications. Mr Gottschall is evidently unable to see the shortcomings of his own formulation. Of course, there was evidence of Dr Sibanda’s expertise, and that evidence substantiated the views he expressed. I am unable to see the point being made, unless the key lies in the word ‘lead’, or the point sought to be made is that it was the Respondent that failed to do this. But his outline overlooks the fact that the Tribunal does not conduct an adversarial process and is entitled to inform itself with respect to matters.

4. Regarding Dr Sibanda’s evidence, I accept he has the necessary expertise but was called as an employee of the Respondent and nothing more. However, his evidence is clearly preferred over that of Dr Smart. I accept that Dr Smart has highly regarded qualifications, although Mr Gottschall did not explain how the evidence of a plant geneticist is relevant to the labels and how they read in this case. However, Dr Smart is most assuredly not an independent witness. He has worked with the Applicant on this particular matter before it was before the Tribunal and is paid by the Applicant.

5. The difference being that Dr Sibanda was giving, what I regard as, expert evidence on behalf of – and as an employee of – the Respondent. The Respondent can only be heard by its representatives, one of whom is Dr Sibanda, given his position in the organisation. In contrast, Dr Smart is brought into the proceedings as an outside person claiming relevant expertise.

6. I am doubtful about the relevance of Dr Smart’s expertise in this matter and it is plausible to suggest that, in any event, he is in part of the Applicant's cause as a paid consultant.

7. In light of the above, I consider Dr Sibanda’s evidence particularly reliable. Having largely withstood cross-examination, he was an impressive witness. On the other hand, Dr Smart seemed reticent or forgetful to a point where I did not feel I could place much reliance upon his testimony.

8. Regarding the decision under review, I cannot see that the decision was not the correct or preferable one on the occasion it was made.

9. I thoroughly accept the evidence of Dr Sibanda and find that the decision was made on a basis justified in law under the Code. The products in question were ‘veterinary chemical products’ as defined by s 5 of that Code and were required to be registered at that time.

10. In particular, I rely upon the evidence in that regard of Dr Sibanda.

11. This leaves the issue of events that have taken place after that decision.

12. The parties appear to have gone through some sort of negotiation or conciliation process and produced an outcome where some labels have been amended for as many as 12 or more products. But I do not see these changes as matters which mean the decision under review must be viewed in a roving way to take into account later developments.

13. Indeed, I regard these later developments not as a prolongation of the decision under review, but as fresh decisions which are not the subject of this review.

14. It would be helpful to the parties if their representatives could continue on the path of resolution instead of resorting to the Tribunal, as in this case, where it was made known to the Applicant, but evidently disregarded, that the Respondent was in the process of reconsidering its decision or aspects of it. That step has been an expensive one for all concerned, especially the Applicant.

CONCLUSION

1. The above leads me to inevitably affirm the decision under review.

DECISION

1. The Tribunal accordingly affirms the decision under review.

I certify that the preceding 72 (seventy two) paragraphs are a true copy of the reasons for the decision herein of

........................[sgd].........................................

Associate

Dated: 8 July 2022

Date(s) of hearing:	1, 2, 3 February and 17 March 2022
Counsel for the Applicant:	Mr Jon Gottschall
Solicitors for the Applicant:	Otislegal
Counsel for the Respondent:	Ms Renee Sion
Solicitors for the Respondent:	HWL Ebsworth Lawyers