DHP19 v Secretary of the Department of Health
[2019] FCA 1451
•4 September 2019
FEDERAL COURT OF AUSTRALIA
DHP19 v Secretary of the Department of Health [2019] FCA 1451
File number: NSD 1379 of 2019 Judge: THAWLEY J Date of judgment: 4 September 2019 Catchwords: ADMINISTRATIVE LAW - judicial review of a decision of a delegate of the respondent to cancel the listing of the applicant’s product from the Australian Register of Therapeutic Goods pursuant to s 30(2) Therapeutic Goods Act 1989 (Cth)
PRACTICE AND PROCEDURE - application for suspension of operation of decision - whether operation of Secretary’s decision should be suspended - whether there is a serious question to be tried - consideration of the balance of convenience and prejudice to the applicant - whether interests of justice favour granting a suspension of the decision - where undertakings offered by the applicant
Legislation: Administrative Decisions (Judicial Review)Act1977 (Cth) ss 5, 6, 10, 15(1)(a)
Federal Court of Australia Act 1973 (Cth) ss 23, 37AF, 37AG(1)(a)
Judiciary Act 1903 (Cth) s 39B
Therapeutic Goods Act 1989 (Cth) ss 3, 4, 9A, 19(1), 22(3), 22(5), 26A, 30, 31, 42DM, 42DMA, 60
Therapeutic Goods Amendment (2017 Measures No 1) Act 2018 (Cth)
Therapeutic Goods Advertising Code (No 2) 2018 (Cth) cl 9
Therapeutic Goods (Permissible Indications) Determination (No 1) 2019 (Cth)
Cases cited: Australian Broadcasting Corporation v O’Neill (2006) 227 CLR 57
Australian Securities & Investments Commission v Administrative Appeals Tribunal (2009) 181 FCR 130
Bullock v The Federated Furnishing Trades Society of Australasia (No 1) (1985) 5 FCR 464
Commissioner for ACT Revenue v Alphaone Pty Ltd (1994) 49 FCR 576
Degning v Minister for Home Affairs [2019] FCAFC 67
Secretary, Department of Health and Ageing v Export Corporation (Australia) Pty Ltd (2012) 288 ALR 702
Snow v Deputy Commissioner of Taxation (1987) 14 FCR 119
SZBEL v Minister for Immigration and Multicultural and Indigenous Affairs (2006) 228 CLR 152
Date of hearing: 30 August 2019 Date of last submissions: 3 September 2019 Registry: New South Wales Division: General Division National Practice Area: Administrative and Constitutional Law and Human Rights Category: Catchwords Number of paragraphs: 100 Counsel for the Applicant: Mr KP Smark SC with Mr DTW Wong Solicitor for the Applicant: Mills Oakley Counsel for the Respondent: Mr P Knowles Solicitor for the Respondent: HWL Ebsworth Lawyers ORDERS
NSD 1379 of 2019 BETWEEN: DHP19
Applicant
AND: SECRETARY OF THE DEPARTMENT OF HEALTH
Respondent
JUDGE:
THAWLEY J
DATE OF ORDER:
4 SEPTEMBER 2019
UPON THE APPLICANT BY ITS COUNSEL GIVING THE UNDERTAKINGS IDENTIFIED BELOW, THE COURT ORDERS THAT:
1.The time for filing the Originating Application be extended to 27 August 2019.
2.Pursuant to s 15(1)(a) of the Administrative Decisions (Judicial Review) Act 1977 (Cth), the operation of the respondent’s decision dated 29 July 2019 stated to come into effect from 29 August 2019 (the Decision) be suspended until 7 days after the respondent has made a decision, or is deemed to have made a decision, on the review to be requested (in accordance with Undertaking 2 below) by the applicant pursuant to s 60(2) of the Therapeutic Goods Act 1989 (Cth), or further order.
3.Pursuant to s 37AF of the Federal Court of Australia Act 1976 (Cth), publication:
(a)in connection with these proceedings of the name of the applicant or of the product referred to in paragraph 1 of the originating application; and
(b)of the fact that the Decision was made in relation to:
(i)the product referred to in paragraph 1 of the originating application; or
(ii)a product of the applicant,
be prohibited until the determination of these proceedings, or further order.
4.The applicant file and serve any submission on costs of no longer than two pages by 4.00pm on 6 September 2019.
5.The respondent file and serve any submissions on costs of no longer than two pages by 4.00pm on 10 September 2019.
6.The question of costs be determined on the papers.
7.Reserve liberty to the parties to apply.
UNDERTAKINGS
1.The applicant provides the usual undertaking as to damages.
2.The applicant undertakes to request review under section 60 of the Therapeutic Goods Act 1989 (Cth) and to provide any further information in support of its request by 20 September 2019.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
THAWLEY J:
On 29 July 2019, a delegate of the Secretary of the Department of Health (the respondent) decided to cancel, with effect on and from 29 August 2019, the listing of the applicant’s medicine on the Australian Register of Therapeutic Goods (ARTG) (the Decision). The applicant contended the Decision was unlawful and should not have been made and requested the respondent to defer the date of effect of the cancellation decision, stating that it would be seeking internal merits review of the cancellation decision. The respondent did not defer the date the cancellation would take effect.
The applicant commenced the present proceedings by an Originating Application filed on 27 August 2019. The applicant sought relief under s 5 and s 6 of the Administrative Decisions (Judicial Review)Act1977 (Cth) (ADJR Act) and s 39B of the Judiciary Act 1903 (Cth) in relation to the cancellation decision. It sought an order setting the cancellation decision aside.
The applicant also sought interlocutory relief, which – as ultimately pressed – may be summarised in the following way:
(1)First, the applicant sought a stay or suspension of the cancellation decision until 7 days after the determination of any application for review under s 60 of the Therapeutic Goods Act 1989 (Cth) (TG Act).
(2)Secondly, the applicant sought a non-publication order under s 37AF of the Federal Court of Australia Act 1973 (Cth) (Federal Court Act) on the grounds identified in s 37AG(1)(a).
These reasons deal with the application for that interlocutory relief.
STATUTORY BACKGROUND
The express statutory objects of the TG Act are set out in s 4. They include provision for the establishment and maintenance of a national system of controls relating to the quality, safety, efficacy and timely availability of therapeutic goods that are used in, or exported from, Australia.
Section 9A in Chapter 2 requires the Secretary to “cause to be maintained a register, to be known as the Australian Register of Therapeutic Goods, for the purpose of compiling information in relation to, and providing for evaluation of, therapeutic goods for use in humans”.
The definition of “therapeutic goods” includes goods “that are represented in any way to be, or that are, whether because of the way in which the goods are presented or for any other reason, likely to be taken to be … for therapeutic use”: s 3(i).
A “medicine” is a “therapeutic good”. The word is defined in the following way:
medicine means:
(a)therapeutic goods (other than biologicals) that are represented to achieve, or are likely to achieve, their principal intended action by pharmacological, chemical, immunological or metabolic means in or on the body of a human; and
(b)any other therapeutic goods declared by the Secretary, for the purpose of the definition of therapeutic device, not to be therapeutic devices.
The definition of “therapeutic use” is “use in or in connection with” a number of matters including “(a) preventing, diagnosing, curing or alleviating a disease, ailment, defect or injury in persons” and “(b) influencing, inhibiting or modifying a physiological process in persons”.
The ARTG is divided into five parts: s 9A(3). It is sufficient to note two of those parts here: “registered goods” and “listed goods”. The different regulatory approach between “registered goods” and “listed goods” was noted and summarised by Perram J in Secretary, Department of Health and Ageing v Export Corporation (Australia) Pty Ltd (2012) 288 ALR 702 at [7] to [9]. As indicated below, it has since changed. At the time of his Honour’s decision:
(1)Registered goods: had to be evaluated by the Secretary before registration. This remains the case. The process is rigorous, complex, costly and lengthy. As Perram J observed at [9]:
Applications for the registration of a medicine are evaluated by the secretary having regard to a range of matters including the quality, safety and efficacy of the goods, the presentation of the goods, whether the goods conform to any relevant standard and whether the goods have been manufactured in accordance with applicable requirements.
(2)Listed goods: there was no pre-condition of prior evaluation by the Secretary. As Perram J observed at [7], an application for listing a medicine had to:
[C]ertify that: the medicine is eligible for listing; it is safe for the purposes for which it is to be used; its presentation is not unacceptable; prescribed safety and quality standards have been complied with; the information included in the application is correct; and the applicant holds information or evidence to support the claims made in the application”.
His Honour further observed (emphasis in original):
If the application meets the requirements in s 26A(1) (which include the applicant’s certifications in s 26A(2)), the secretary must list the medicine. It will be seen that the secretary’s only inquiry is into whether the appropriate matters have been certified. She is not concerned with whether the certifications are correct.
The legislative regime has since changed. There is now what the parties referred to as an ‘assessed listed medicine’. An ‘assessed listed medicine’ involves the respondent making a pre-market assessment of the efficacy of the relevant therapeutic goods.
For present purposes, it is sufficient to note that, at the time the applicant’s medicine was listed, there was no requirement for evaluation before listing, but the application had to certify a number of matters including that the applicant held information or evidence to support the claims made in the application.
Section 30 of the TG Act provides for cancellation of registration or listing. Subsection 30(2) includes:
30 Cancellation of registration or listing
…
(2)Subject to subsection (3), the Secretary may, by notice in writing given to a person in relation to whom therapeutic goods are included in the Register, cancel the registration or listing of the goods if:
(a)it appears to the Secretary that the quality, safety or efficacy of the goods is unacceptable; or
(aa) it appears to the Secretary that the presentation of the goods:
(i) in the case of registered goods – is not acceptable; or
(ii) in the case of listed goods – is unacceptable; or
…
(ba)in the case of a medicine listed under section 26A, it appears to the Secretary that any of the certifications under paragraph 26A(2)(b), (c), (d), (da), (f), (fa), (fb), (fc), (h), (i), (j), (ja) or (k) or subsection 26A(2A) are incorrect; or
…
The cancellation decision in the present case was taken under paragraphs (ba) and (aa) of s 30(2) of the TG Act.
Subsection 30(3) provides:
(3)Where the Secretary proposes to cancel the registration or listing of goods in relation to a person under subsection (2), the Secretary must:
(a)inform the person in writing that the Secretary proposes to cancel that registration or listing and set out the reasons for that proposed action; and
(b)give the person a reasonable opportunity to make submissions to the Secretary in relation to the proposed action.
Subsection 30(5) addresses the time at which a cancellation decision comes into effect. It provides:
(5)Where the Secretary cancels the registration or listing of goods in relation to a person, the goods cease to be registered or listed:
(a)if the cancellation is effected under subsection (1), (1A), (1C) or (1D) – on the day on which the notice of cancellation is given to the person; or
(b)in any other case – on the day specified in the notice, which must be at least 20 working days after the notice is given to the person.
Section 31 of the TG Act empowers the Secretary, by notice in writing, to require certain persons to give information or documents to the Secretary relating to various matters identified in the section, including “the safety and efficacy of the goods for the purposes for which they are to be used”.
Section 60 of the TG Act provides for a form of ‘internal review’ of certain decisions. The phrase ‘internal review’ is not used, but it is a convenient shorthand expression. The Decision was an “initial decision” within the meaning of s 60(1). Subsection 60(2) allows for the applicant to “request the Minister to reconsider” an “initial decision” within 90 days after notice was given. Subsection 60(2A) provides that such a request “may be accompanied by information in support of the request”.
Subsection 60(3) provides, so far as is presently relevant, that the Minister must, as soon as practicable after receiving a request under subsection (2), reconsider the initial decision. He may then confirm or revoke the initial decision or revoke it and make a decision in substitution for the initial decision. A decision made by the Minister under s 60(3) is a “reviewable decision” as defined by s 60(1).
Subsection 60(4) provides, so far is presently relevant, that if a notice of the Minister’s decision on reconsideration under s 60 is not received within 60 days of the request for reconsideration, the Minister is taken to have confirmed under subsection (3) the initial decision.
An application may be made to the Administrative Appeals Tribunal (AAT) for review of a reviewable decision: s 60(8). This is referred to below as ‘external review’.
FACTUAL BACKGROUND
The applicant’s product was listed on the ARTG on 1 July 2016 for the following indications:
[Redacted]
It follows from the statutory regime as it existed at the time the product was listed that the product was not evaluated by the Secretary. Rather, the Secretary had to list the product upon the applicant satisfying the various statutory requirements, including the applicant certifying that it held “information or evidence to support the claims made in the application”.
On 16 August 2017, the respondent made a request for information under s 31 of the TGAct. The applicant responded to this request for information by letter from its solicitors dated 20 September 2017. The letter included various attachments and stated:
Having considered the TGA’s Request, and following discussions with us, our client proposes to amend the listed indications for xxxxxxxxxx to more precisely reflect the supporting evidence for, and intended use of, xxxxxxxxxx.
In particular, xxxxxxxx proposes to adopt the following specific indications for the product:
[Redacted].
…
Xxxxxxxx is open to engaging in discussions with the TGA about the terms of the above indications, and their evidentiary justification, in the context of the present audit. Once the audit is finalised, our client will proceed with the above amendments (or amendments as otherwise agreed with the TGA) and, if necessary, make corresponding changes to the product label.
On 16 August 2018, the Secretary sent a “Proposal to Cancel Notice” which set out the reasons for the decision to issue that notice. The notice indicated that the applicant had an opportunity to make a submission in response which would be taken into account before a decision was made in relation to the listing. The reasons identified two bases for cancellation of the listing. First, the Secretary considered that the certification under s 26A(2)(ja) of the TG Act was incorrect, which provided a basis for cancellation under s 30(2)(ba). A number of reasons were provided in this regard. Secondly, the Secretary considered that the presentation of the goods was unacceptable, which provided a basis for cancellation under s 30(2)(aa) of the TG Act. The second basis for cancellation necessarily followed the first in the sense that the presentation of the goods was unacceptable (see s 3(5)(a)) because the product did not have characteristics which the presentation stated or suggested it did have.
The applicant responded to the “Proposal to Cancel Notice” on 25 September 2018, by way of letter from its solicitors, which included a number of enclosures. The respondent sent to the applicant a letter dated 13 December 2018 identifying certain further issues not identified in its “Proposal to Cancel Notice”. The applicant responded on 15 February 2019. The applicant wrote again on 28 February 2019 in a letter which proposed a face-to-face meeting. The respondent said in an email of 1 March 2019 that it was not apparent that a face-to-face meeting would assist at that stage. The applicant wrote again on 3 April 2019. On 23 April 2019, the respondent wrote to the applicant identifying a further issue which had arisen in the course of its evaluation of the material provided by the applicant and invited further submissions. The applicant provided a further submission by letter from its solicitor dated 20 May 2019.
The “Cancellation Notice” the subject of these proceedings was dated 29 July 2019 and stated that the respondent had decided to cancel the listing of the applicant’s medicine with effect on and from 29 August 2019. The Decision set out reasons for the cancellation.
The applicant made a number of requests for the respondent to delay further the date at which the cancellation would take effect, indicating it intended to seek review of the Decision in accordance with s 60 of the TG Act. The respondent did not accede to any of these requests.
The applicant commenced these proceedings on 27 August 2019 when the matter came before me as duty judge. On that day, the respondent consented to an order under s 15(1)(a) of the ADJR Act suspending the operation of the Decision until determination of the applicant’s interlocutory application.
At the request of the parties, the application for interlocutory relief was listed for hearing on Friday, 30 August 2019. At the conclusion of the hearing, the applicant indicated that it might seek to change the listed indications on the ARTG to those which it had proposed in its solicitor’s letter of 20 September 2017 (see [24] above) and that it would give other undertakings in relation to advertising. The applicant was provided an opportunity to indicate what undertakings it proposed to give. An order was also made for the respondent to make any submission in response by Tuesday, 3 September 2019.
EXTENSION OF TIME
The Originating Application was filed one day out of time. The respondent did not submit that an extension of time should not be granted. The Court is satisfied it is appropriate to make an order that the applicant be granted an extension of time within which to file its Originating Application.
APPLICATION FOR A STAY
Subsection 15(1) of the ADJR Act provides:
(1)The making of an application to the Federal Court under section 5 in relation to a decision does not affect the operation of the decision or prevent the taking of action to implement the decision but:
(a)the Court or a Judge may, by order, on such conditions (if any) as it or he or she thinks fit, suspend the operation of the decision; and
(b)the Court or a Judge may order, on such conditions (if any) as it or he or she thinks fit, a stay of all or any proceedings under the decision.
An alternative source of power to grant a stay or suspension of a decision such as the present is provided by s 23 of the Federal Court Act.
The discretion provided by s 15(1)(a) is not confined by the express terms of the section. The discretion may be exercised if it is just in all the circumstances to make the order, on such conditions as might be appropriate in light of those circumstances. The sorts of considerations taken into account on an application for an interlocutory injunction are typically also relevant to the exercise of the discretion under s 15(1)(a). However, it is the statutory provision which provides the source of power and it is the terms of the section which must be applied, not some other test. As French J noted in Snow v Deputy Commissioner of Taxation (1987) 14 FCR 119 at 129, there may be circumstances where, although the test for granting an interlocutory injunction is satisfied, that is insufficient to warrant an order under s 15(1)(a) for reasons particular to the operation of the ADJR Act and the particular legislative regime on which it is operating.
In this case, the parties addressed the following two enquiries relevant to the grant of an interlocutory injunction:
(1)whether the applicant has a prima facie case in the sense of a sufficient likelihood of success to justify, in the circumstances, the preservation of the status quo pending the trial – see: Australian Broadcasting Corporation v O’Neill (2006) 227 CLR 57 at [65] (Gummow and Hayne JJ). A “sufficient likelihood of success” does not mean that the applicants must establish that they are more probable than not to succeed at trial; and
(2)whether the balance of convenience or injury to the applicant outweighs the injury to the respondent if the injunction were granted: See O’Neill at [65].
These two enquiries are related in the sense that a strong prima facie case may lead a court more readily to grant an injunction where the balance of convenience is even, but a more doubtful claim which, nevertheless, raises a serious question may still attract interlocutory relief if there is a sufficient balance of convenience in favour of the applicant for interlocutory relief: Bullock v The Federated Furnishing Trades Society of Australasia (No 1) (1985) 5 FCR 464 at 468, 469 and 472.
A third enquiry is whether the applicant will suffer irreparable damage for which damages are not an adequate remedy. This is sometimes expressed as an independent third enquiry (see for example: O’Neill at [19] (Gleeson CJ and Crennnan J)) and sometimes as a component of the second inquiry, namely where the balance of convenience lies. In any event, each of the three enquiries are relevant to the application of s 15(1)(a) in the circumstances of the present case.
Also central to the grant of relief under s 15(1)(a) is a consideration of the operation of the statutory scheme upon which the ADJR Act is operating, here the TG Act. What the Court “thinks fit” in all the circumstances, and what conditions it considers might be appropriate, can only be assessed in the context of the relevant statutory scheme.
I will deal with the statutory scheme first.
The statutory scheme and power to order a stay or suspension
The respondent submitted that this Court did not have power to suspend operation of the cancellation decision under either s 15(1)(a) of the ADJR Act or s 23 of the Federal Court Act. It also relied upon its arguments in this respect on the question of the balance of convenience.
As noted earlier, the statutory scheme provides for a form of ‘internal review’ of the Secretary’s “initial decision” and for ‘external review’ of the Minister’s “reviewable decision” to the AAT. The terms ‘internal review’ and ‘external review’ are not in fact used in the TGAct. Merits review cannot be sought in the AAT until internal review has occurred: s 60(8). The AAT has the power to grant a stay, but it could not do so before an application is lodged and it is seized of jurisdiction.
If the respondent is correct that this Court cannot order a suspension or stay in these circumstances, then by the time an applicant gets to the AAT, its listing would have been cancelled and substantial damage incurred in circumstances where – if the applicant is ultimately proved correct – the decision to cancel should never have been made. This is an unattractive proposition. It is also incorrect.
The applicant indicated during the course of the hearing that it would request internal review and would do so, including providing any further material it wished to put forward, within 21 days.
The respondent submitted that there was an inconsistency between the applicant seeking both judicial review (by this Originating Application) and merits review (by the foreshadowed application for internal review). I do not accept that the applicant is behaving relevantly inconsistently. The applicant’s position is tolerably clear and entirely reasonable. It says that the current operative decision, the “initial decision”, was made in excess of jurisdiction and should be quashed. It says, amongst other things, that it was denied procedural fairness. The applicant recognises that there are two methods of potentially having the decision set aside, either through judicial review or merits review. In this case, the available merits review comprises ‘internal review’ and, if that fails, ‘external review’ by the AAT.
In the judicial review case, the merits are not to the point. In seeking merits review, the applicant can probably effectively deal with any previous procedural unfairness by putting forward further material in respect of the issues it says it was denied the opportunity of addressing. The respondent, despite a number of requests, has refused to defer the time the Decision comes into effect pending internal review. As a result, the only real option available to the applicant to obtain a suspension of the operation of the Decision was to take the course it did, namely to seek judicial review of the decision it submits ought never have been made.
At this point in the proceeding, the applicant challenges the decision which has in fact been made. It does so genuinely. In the current circumstances of this case (where the respondent has not agreed to a suspension) and in the context of this statutory regime, the Court would not refuse relief under the ADJR Act on the basis that ‘internal review’ was available and was being pursued at the same time as the application for judicial review.
Subsection 10(1) of the ADJR Act makes it clear that the applicant’s right to make an application to this Court under ss 5, 6 or 7 of the ADJR Act is “in addition to, and not in derogation of” its right to seek ‘internal review’ under the TGAct. Subsection 10(1) includes:
10 Rights conferred by this Act to be additional to other rights
(1)The rights conferred by sections 5, 6 and 7 on a person to make an application to the Federal Court or the Federal Circuit Court in respect of a decision, in respect of conduct engaged in for the purpose of making a decision or in respect of a failure to make a decision:
(a)are in addition to, and not in derogation of, any other rights that the person has to seek a review, whether by the court, by another court, or by another tribunal, authority or person, of that decision, conduct or failure; and
(b) …
Subsection 10(2)(b)(ii) of the ADJR Act contemplates that this Court could refuse to grant an application made under ss 5 and 6 of the ADJR Act if “adequate provision” for review existed under the TG Act. Subsections 10(2)(b)(ii) and 10(3) provide:
(2) Notwithstanding subsection (1):
(a) …; and
(b)the Federal Court or the Federal Circuit Court may, in its discretion, refuse to grant an application under section 5, 6 or 7 that was made to the court in respect of a decision, in respect of conduct engaged in for the purpose of making a decision, or in respect of a failure to make a decision, for the reason:
(i) …; or
(ii)that adequate provision is made by any law other than this Act under which the applicant is entitled to seek a review by the court, by another court, or by another tribunal, authority or person, of that decision, conduct or failure.
(3)In this section, review includes a review by way of reconsideration, re‑hearing, appeal, the grant of an injunction or of a prerogative or statutory writ or the making of a declaratory or other order.
At this point, it cannot be said that this Court would refuse relief under ss 5 and 6 of the ADJR Act. The applicant has a genuine grievance, which it may or may not make out. It has a right to ‘internal review’, which it proposes to exercise, but which does not provide for any suspension of the cancellation decision. That may be one reason why it has brought this proceeding “in addition” (s 10(1)(a) of the ADJR Act) to its proposed request for ‘internal review’. The fact that ‘internal review’ is conducted by the Minister rather than by an independent review body is relevant to whether ‘internal review’ is an “adequate remedy”. So too is the fact that ‘internal review’ available under the TG Act contains no mechanism for a suspension of the cancellation decision. Until internal review is completed, the applicant is affected in a substantial way by a decision which, on its case, should never have been made.
The question is then whether this Court should withhold relief under s 15(1)(a) of the ADJR Act in circumstances where the applicant seeks both judicial review and ‘internal review’ of the “initial decision”. It is the terms of s 15(1)(a), which must be read in the context of the whole of the ADJR Act, which govern the answer to this question.
The applicant is entitled to argue before this Court, as it does, that the cancellation decision was affected by jurisdictional error and should never have been made and should be suspended until that issue can be resolved. The fact that the applicant also has a right to request ‘internal review’, and that this dispute might be resolved by that ‘internal review’ in the meantime, says nothing about this Court’s power to order a suspension. Nor, in the circumstances of this case, does it provide a discretionary reason for refusing relief under s 15(1)(a) of the ADJR Act.
The respondent submitted that an early final adjudication of the proceedings would be preferable if a suspension were to be granted. The respondent acknowledged that the proceedings were not of such a nature that expedition was warranted. In an appropriate case, such a course might commend itself. In this case, however, given that expedition is not warranted, it does not presently appear likely that the judicial review proceedings would be determined before a decision on ‘internal review’.
In the context of argument on this issue, the respondent drew attention to s 30(5) of the TG Act which provides that, for a decision such as the cancellation decision, it must come into effect at least 20 working days after the notice has been given. It was said that this evinced a statutory intention that decisions of the Secretary to cancel the registration or listing of goods should not be suspended. I reject that argument. If anything, s 30(5)(b) evinces an intention, in relation to all decisions except those mentioned in s 30(5)(a), to give a person affected sufficient time to seek to deal with an impending cancellation by negotiation with the respondent or by making an application such as the present. Subsection 30(5)(a) provides for cancellation decisions to become effective on the day of cancellation if the cancellation decision was made under the provisions there identified. For example, a decision to cancel the registration or listing of a therapeutic good if it “appears to the Secretary that failure to cancel registration or listing would create an imminent risk of death, serious illness or serious injury” would come into effect on the date of the notice: s 30(1)(a) and s 30(5)(a).
Serious question to be tried
The Originating Application did not explain, by particulars or otherwise, the basis for the relief sought under ss 5 and 6 of the ADJR Act. However, the affidavit of Mr Lawrence filed in support of the Originating Application put forward two principal grounds: first, a denial of procedural fairness; and secondly, the taking into account of irrelevant considerations and the failure to take into account relevant considerations. The affidavit explained those grounds by reference to the evidence.
The procedural fairness grounds centred on the following. First, the applicant had requested a face-to-face meeting or discussion with the respondent to discuss the scientific evidence. Secondly, with the cancellation decision the applicant was provided, for the first time, with a “Final Evaluation Report” dated 12 July 2019 and written advice to the respondent from the ‘Signal Investigation Unit’ of the ‘Pharmacovigilance and Special Access Branch’. The “Final Evaluation Report” referred to a second piece of written advice to the respondent (dated 28 March 2019, also from the ‘Signal Investigation Unit’). This was first provided to the applicant on 21 August 2019. It was said that these three documents, each of which was relied upon in making the cancellation decision, raised a significant number of issues for the first time, to which the applicant was not given the opportunity to respond before the cancellation decision was made.
The respondent submitted that it had identified the critical issues at the outset, and by its further requests, and was not obliged to afford either a face-to-face meeting or an opportunity to comment on the three reports obtained and relied upon by it in making its decision. The respondent by a letter dated 21 August 2019 stated: “It is settled law that a brief to a decision-maker which evaluates material provided by an affected person in the course of a review process does not need to be disclosed to that person before a decision is made”.
In Commissioner for ACT Revenue v Alphaone Pty Ltd (1994) 49 FCR 576 at 590-591, the Full Court (Northrop, Miles and French JJ) stated (citations omitted):
It is a fundamental principle that where the rules of procedural fairness apply to a decision-making process, the party liable to be directly affected by the decision is to be given the opportunity of being heard. That would ordinarily require the party affected to be given the opportunity of ascertaining the relevant issues and to be informed of the nature and content of adverse material.
The passage set out immediately above was approved by the High Court in SZBEL v Minister for Immigration and Multicultural and Indigenous Affairs (2006) 228 CLR 152 at [32].
In Degning v Minister for Home Affairs [2019] FCAFC 67 at [12], Allsop CJ – after referring to Alphaone and SZBEL – summarised the common law position by stating that the applicant was “entitled to have his mind directed to the critical issues or facts on which the decision was likely to turn unless the recognition of the issue was, from the material with which he was provided, an obvious and natural conclusion to draw”. His Honour also stated at [13]:
… One should look at the whole of the circumstances including the documents given to [the applicant] to assess whether he had his mind directed to the critical issues or factors on which the decision was likely to turn and to be informed of the nature and content of relevant material. In that assessment, it is relevant to assess what is or is not an obvious or natural evaluation of the material which need not be the subject of particular attention being drawn. The ultimate touchstone is fairness.
What must be drawn to the attention of the party is inherently fact-dependent and can be affected by the way in which the decision-making process evolves. The fact that a person’s attention was drawn to the critical issues as they were perceived at the beginning of the process, and that some new issues were raised in the course of the decision-making process, does not answer the question whether a particular new issue not drawn to the affected person’s attention was sufficiently important and relevant such that, in the circumstances, it too ought to have been drawn to the person’s attention for comment. The respondent’s statement in its letter of 21 August 2019 was not correct in the absolute terms in which it was expressed.
The applicant submits that the material which became available to the decision-maker during the course of the decision-making process, and which was important to the decision, was not disclosed to the applicant and the applicant was denied the opportunity to comment. The Minister conceded that this argument was not so hopeless as to warrant the submission that it was unarguable or doomed to fail. The factual substratum is complex. Numerous issues have been raised. Much of the material before the decision-maker expressed opinions on matter requiring medical and pharmacological expertise and expertise in statistics.
On the material presented, the applicant has a prima facie case in respect of the procedural fairness issue in the sense of a case which is sufficiently arguable to satisfy the Court that it might be appropriate to preserve the status quo by suspending the operation of the cancellation decision, subject to considering other relevant matters, including the balance of convenience. It is not necessary, in those circumstances, to consider the case based on the alleged failure to take into account relevant considerations and taking into account irrelevant considerations.
Balance of convenience
Submissions made at the hearing
By reference to evidence given on information and belief, the applicant submitted it would suffer irreparable harm in the event that the listing of its product was cancelled. The applicant’s sole activity was the development of the product from 2003. Its funding was derived from a combination of both private and public sector investment. The Product is the only product developed and sold by the applicant and, it was submitted, the effect of the Decision would be to destroy the applicant's business.
It was said that the applicant was in the final stages of negotiating and executing a distribution agreement with an international pharmaceutical company for the supply and distribution of its product in Xxxxxx. That company had conducted extensive due diligence and had provided projections indicating substantial potential sales in the Xxxxxxxx market.
It was submitted that, if the cancellation of the product was to take effect, it would cause substantial brand and reputational damage and would likely result in the permanent abandonment of the negotiations between the applicant and its Xxxxxxxx partner.
It was said that the Food and Drugs Administration (FDA) in the United States (US) had approved claims in respect of the supply of the product in the United States as a dietary supplement. The applicant had, it was said, developed a marketing strategy with plans to launch the product in the US through retail pharmacy networks as soon as possible. It was said that this launch had stalled because of the present dispute with the TGA. It was submitted that, if the cancellation of the product was to take effect, it would likely damage the applicant’s launch efforts in the US. In particular, the publication of a cancellation decision in Australia would be likely to prompt the FDA to review the claims in relation to the product which would cause delay to the launch of the product in the US.
The applicant also pointed to an immediate financial loss of AUD$123,567.55 in retail value of unsold stock.
The respondent made the following submissions in relation to the balance of convenience.
First, there was a strong public interest in giving effect to the Secretary’s decision. The objects of the TG Act go beyond questions of safety and are directed towards questions of “the quality … efficacy and timely availability of therapeutic goods”: see s 4(1) of the TG Act. The public is entitled to expect that products listed on the ARTG are not only safe, but that they are effective in treating the indications for which they are listed. There is a clear public interest in removing from the ARTG a product that does not meet the requirements of listing, and the retention of a product on the ARTG which fails to meet those requirements would be contrary to the objects of the TG Act.
There is a public interest in giving effect to the Secretary’s decision. But that must be balanced against the public and private interest in preserving the status quo, where the circumstances otherwise suggest that is an appropriate course, in order to ensure the Secretary has in fact made a lawful decision. In this case, safety is not in issue. The product has been available for a number of years and there is no evidence of any adverse consequence. The Secretary has ample powers to act in relation to a product which is considered harmful. The Secretary has been considering the cancellation over a lengthy period of time which itself suggests a lack of urgency. As the respondent submits, the public is entitled to expect that products listed on the ARTG are not only safe, but that they are effective in treating the indications for which they are listed. The public is also entitled to expect that the listings of products are cancelled lawfully. That is what the applicant wishes to test.
Secondly, the respondent pointed to the fact that, in response to its information request, the applicant indicated that the listing could be changed “to more precisely reflect its intended use and the supporting evidence”. The proposed changes were by no means insignificant. The applicant proposed a change of real substance to the listing, at least in some respects altering the listing from one which positively asserted certain effects to a more qualified statement of possible effect. The actual listing can be found at [22] above. The proposed listing which would more accurately reflect the supporting evidence is at [24] above. The respondent submitted that the obvious inference to be drawn from the proposed amendments (especially by the inclusion of the qualifying word “may”) was that that the applicant did not hold evidence sufficient to justify the existing indications. The respondent noted, principally by reference to evidence from the applicant’s website, that the applicant continued to market the product on the basis of the existing indications. The respondent submitted that this should not be permitted if the Court were to suspend operation of the cancellation decision.
This is a matter of concern. It is to be observed, however, that the applicant also sought to engage with the respondent on amending the listed indications without success. The applicant is not now able to amend the indications without the respondent carrying out an evaluation or assessment. This is explained in more detail below in the context of the undertakings offered by the applicant. There was no suggestion that the respondent held any concern about the applicant’s advertising until this interlocutory application.
Thirdly, the respondent submitted that there was a potential for consumers to suffer loss by purchasing a product that makes therapeutic claims that are not supported by evidence.
In this regard, it is relevant to note that the applicant has given an undertaking as to damages. The potential losses in this respect were not shown to be significant. Weighing against this consideration is the potential, if the cancellation is not suspended, that consumers may be prevented from obtaining a product which was in fact efficacious and the listing of which should not have been cancelled. Again, it is relevant to note in this analysis that the product is not suggested to cause harm to consumers.
Fourthly, it was said that those consumers who wish to continue using the product could continue to access the product even if the cancellation decision were not suspended. Special Access Scheme Category B established under s 19(1)(a) of the TG Act would be available. A health practitioner could make an application for a patient to access the product.
This submission has an air of unreality about it. The product is one which can currently be purchased without the intervention of a health practitioner. The average consumer would not know about Special Access Scheme Category B and it is unlikely that many consumers would go to the expense and trouble of requesting a health practitioner to make an application for patient access.
Fifthly, the respondent observed that the applicant was given four weeks’ notice of the Decision taking effect and that proceedings were not commenced until 27 August 2019, two days before the cancellation decision was due to take effect.
The applicant was not shown to have delayed after it received notice of the Decision in a way which would count significantly against the grant of interlocutory relief. It immediately engaged with the respondent and sought, more than once, an extension to the date on which the cancellation would come into effect in order to facilitate its foreshadowed request for ‘internal review’. The respondent did not make it immediately clear that it would not countenance such an extension. In one response it stated: “Please note that the effective date of the cancellation decision has not been varied at this time”. If the respondent had made it clear that it simply would not countenance an extension, then no doubt the applicant would have brought the proceedings earlier. The respondent did not make its position clear in this respect until its letter dated 21 August 2019. I infer from the correspondence that the applicant reasonably considered, up until receipt of the letter dated 21 August 2019, that the respondent was still considering, or might, grant an extension. The applicant chose to pursue, in the first instance, requests for an extension rather than litigation. That was appropriate in the circumstances of this case.
Sixthly, the respondent submitted that the evidence of prejudice put forward by the applicant was inadequate. The respondent accepted that the applicant will suffer some loss or expense by reason of it not being able to market the product the subject of the cancellation decision in the period from the cancellation decision coming into effect to the making of any decision on internal review. However, the evidence regarding the effect of the cancellation decision on the proposed overseas launch of the product was hearsay, speculative and unsupported by any documentary evidence.
I accept that the nature of the evidence given as to the prejudice to be suffered by the applicant was in large measure hearsay and unsupported by documentary evidence. However, it is obvious that cancellation of the listing is likely to cause substantial commercial, brand and reputational damage to the applicant. It is also difficult to see that damages could be an adequate remedy and the respondent did not suggest otherwise. The extent of damage, should cancellation not be suspended, is necessarily hypothetical and dependant on future events.
Seventhly, the respondent submitted that the confidentiality order sought by the applicant in its interlocutory application was important in considering the balance of convenience, referring to the decision of Australian Securities & Investments Commission v Administrative Appeals Tribunal (2009) 181 FCR 130 at [74] to [76] (ASIC v AAT). It was said that the applicant wished to have the benefit of a stay in order to continue to sell the product, yet sought confidentiality in order that the concerns raised by the respondent regarding the efficacy of the product are not made public. It was submitted that this did not appropriately balance the public interest with the applicant’s private interests. The public interest required that the public not be “kept in the dark” about the respondent’s concerns regarding the efficacy of the product. If the cancellation decision were shrouded by confidentiality, but the cancellation decision subsequently upheld, the consumer would be “entitled to complain that all the circumstances should have been made public” whilst the product were still on the market: ASIC v AAT at [54].
I accept that the questions of balance of convenience and whether confidentiality orders should be made are, in principle, inter-related in the sense that they involve some common considerations. They are also inter-related in the sense that, if a suspension is granted, it is relevant to whether a non-publication order should be made and vice-versa. If the cancellation is not suspended and is made public, then the applicant is likely to sustain substantial harm for which damages are unlikely to be an adequate remedy. One of the reasons why a suspension is appropriate is to prevent such harm occurring by maintaining the status quo whilst the applicant’s case – in substance that the product listing should never have been cancelled – is determined. If similar harm would result through the publication of the matters via the Court process, then the administration of justice would also be prejudiced. The publication of the matters via the Court process might cause the very damage the avoidance of which is one of the principal reasons why interlocutory relief is appropriate.
It is significant in addressing this issue to appreciate that there was not suggested to be any risk of harm to consumers, at least in a direct sense. It was fairly pointed out that safety and efficacy are not binary. However, the respondent’s real point is that consumers might be “kept in the dark” about a product which might not be as efficacious as suggested. This has a different quality to being “kept in the dark” about a potentially dangerous product.
Eighthly, the respondent relied upon its arguments to the effect that this Court did not have power to grant a stay as also relevant to the question of balance of convenience. These have been addressed above.
Undertakings offered by the applicant
As mentioned, at the conclusion of the hearing on 30 August 2019, the applicant was granted time to consider and indicate whether it would seek to amend the listed indications for the product and to formulate the undertakings it would be prepared to give if interlocutory relief were granted. The respondent was given until 3 September 2019 to respond.
After the hearing, the applicant indicated, and the respondent subsequently agreed, that the effect of the Therapeutic Goods Amendment (2017 Measures No 1) Act 2018 (Cth) and the Therapeutic Goods (Permissible Indications) Determination (No 1) 2019 (Cth) was such that the applicant could not amend the existing indications of its medicine as set out in Annexure A of its proposed undertakings without seeking to relist the product as an ‘assessed listed medicine’, which would require the respondent to undertake a premarket assessment or evaluation of the efficacy of the goods.
In light of that fact, in addition to its undertaking as to damages, the applicant offered three other undertakings:
Undertaking – Advertising of therapeutic goods and approved indications
1.The applicant undertakes not to advertise the product referred to in paragraph 1 of the originating application filed in these proceedings for an indication other than the indications set out in Annexure A to this document.
2.In addition to (1) above, the applicant undertakes to advertise the product referred to in paragraph 1 of the originating application filed in these proceedings in compliance with the Therapeutic Goods Advertising Code 2013 (Cth).
Undertaking – expedition of section 60 internal review
3.The Applicant undertakes to file its application for internal review under section 60 of the Therapeutic Goods Act 1989 (Cth) within 21 days from the date of this order.
Annexure A
[Redacted].
In response to the undertakings offered by the applicant, the respondent first noted the following material differences between the proposed and listed indications (emphasis in original):
[Redacted]
The respondent then submitted:
(1)proposed indication (b) referred to the prevention of symptoms, whereas the equivalent listing indication referred to the alleviation of symptoms; and
(2)the wording of proposed indication (c) was almost entirely different to listing indication (c) and, further, appeared inconsistent, to the extent that it lacked the qualifier “may”, with proposed indication (a).
The respondent submitted that, if the applicant were to advertise its product for the indications as proposed by the first undertaking this would likely constitute an offence under ss 22(3) or 22(5) of the TG Act. Those provisions prohibit a person from advertising therapeutic goods included on the ARTG for an indication that is not accepted in relation to that inclusion.
As to the second undertaking, the respondent asked what it would achieve. A person who advertises a therapeutic good in a manner that does not comply with the Therapeutic Goods Advertising Code (No 2) 2018 (Cth) is liable for an offence or a civil penalty, referring to ss 42DM and 42DMA of the TG Act. In its form, the second undertaking was no more than an undertaking to comply with the law.
The respondent also submitted that it was doubtful any advertising of the product in respect of the proposed indications could be done consistently with the Code. Clause 9(d) of the Code requires that, if goods are included in the ARTG, advertising for those goods must be “consistent with the entry for the therapeutic goods in relation to that inclusion”. Advertising the goods for an indication which is not included in the ARTG in relation to those goods would be inconsistent with the entry for the product in the ARTG. It was submitted the Court would not accept an undertaking which contemplated unlawful conduct.
The respondent also noted that advertising which referred to the listed indication was likely not to comply with the Code. The respondent submitted that the concession made by the applicant in its letter dated 20 September 2017 concerning the listed indications placed in doubt whether advertising which included or referred to those indications would satisfy, amongst other things, cl 9(a) of the Code. That clause requires that “any claims made in the advertising are valid and accurate, and all information has been substantiated before the advertising occurs”.
As to the third undertaking, the respondent submitted that it should be 21 days from the date the undertaking was proposed, which was Friday, 30 August 2019.
My view as to the three additional undertakings is as follows. As to the first undertaking, without determining whether the proposed or existing advertising would or does amount to an offence, the fact that it arguably would or does, means the Court should not accept the undertaking. The applicant must take its own course in respect of advertising in light of what has now been raised. As to the second undertaking, the applicant proposes no more than compliance with the law which is what the applicant must in any event do. As to the third undertaking, it was indicated on 30 August 2019 that 21 days were required to make a request for ‘internal review’ and to provide further information in that regard. The only reason orders were not made on that day was to provide an opportunity to the applicant to consider its position in relation to the listed indications and to put forward further undertakings if so advised.
Conclusion on balance of convenience
Having weighed all the various matters referred to above and for the reasons given above, I conclude that the balance of convenience favours granting a suspension until shortly after the conclusion of internal review, notwithstanding that the Court would not accept two of the three additional undertakings proffered.
NON-PUBLICATION ORDER
The applicant sought the following order under s 37AF of the Federal Court Act:
Pursuant to s 37AF of the Federal Court Act 1977 (Cth), the Court orders (on the ground set out in s 37AG(1)(a)) that publication of:
a.the name of the applicant or of the product referred to in paragraph 1 of the originating application filed in these proceedings; or
b. the fact of the decision referred to in that paragraph
be prohibited until the determination of these proceedings.
In seeking that order, the applicant relied upon 37AG(1)(a) of the Federal Court Act, which provides:
(1)The Court may make a suppression order or non-publication order on one or more of the following grounds:
(a)the order is necessary to prevent prejudice to the proper administration of justice;
…
If the applicant’s name or the name of the product is published in connection with the respondent’s decision to cancel the listing of the product, then significant commercial damage could be caused. It would be caused in circumstances where the applicant claims that the decision should never have been made. It would prejudice the administration of justice if the application for suspension of the operation of the decision could not be brought and ordered without in substance causing the same or substantially the same harm as publication of the cancellation decision which the applicant says should not have been made. In my view, it is appropriate to make an order under s 37AF, although not in the precise terms requested.
CONCLUSION
The application for interlocutory relief should be allowed. The Court was asked by both parties to reserve the question of costs.
I certify that the preceding one hundred (100) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Thawley. Associate:
Dated: 4 September 2019
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