iNova Pharmaceuticals (Australia) Pty Ltd and Secretary, Dept of Health and Ageing - [2011] AATA 196

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2011] AATA 196

ADMINISTRATIVE APPEALS TRIBUNAL )

) No: 2010/0912

GENERAL ADMINISTRATIVE DIVISION ) No: 2010/1097
ReiNova Pharmaceuticals (Australia) Pty Ltd

Applicant

AndSecretary, Department of Health and Ageing

Respondent

DECISION

TribunalMr RP Handley, Deputy President
Ms AK Britton, Senior Member

Date25 March 2011
PlaceSydney
DecisionThe Respondent’s application for the disqualification of the presently constituted Tribunal is refused.

....................[sgd].......................
Mr RP Handley
Deputy President

CATCHWORDS

PRACTICE AND PROCEDURE – Natural justice – decision on remittal from Federal Court – application for disqualification of originally constituted Tribunal on basis of apprehended bias - no order from Federal Court as to constitution of Tribunal on remittal – constitution by the President – application refused

RELEVANT ACTS

Freedom of Information Act 1982 (Cth): s 33, 37

Administrative Appeals Tribunal Act 1975 (Cth): ss 2A, 20B, 44

CITATIONS

Re iNova Pharmaceuticals Pty Ltd and Secretary, Department of Health and Ageing (2010) 116 ALD 448; [2010] AATA 542

Secretary, Department of Health and Ageing v iNova Pharmaceuticals Pty Ltd [2010] FCA 1442

Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337; (2000) 63 ALD 577; (2000) 176 ALR 644; (2000) 75 ALJR 277; (2000) 21(20) Leg Rep 13; [2000] HCA 63;

Re PMMC/WJPJ and Australian Prudential Regulation Authority (2009) 112 ALD 210; (2009) 50 AAR 512; [2009] AATA 801

Re Mellor and Australian Postal Corporation (2010) 51 AAR 498; [2010] AATA 288

Northern Rivers FM Radio Limited v Australian Broadcasting Tribunal (1990) 25 FCR 266; (1990) 21 ALD 272

REASONS FOR DECISION

25 March 2011	Mr RP Handley, Deputy President
Ms AK Britton, Senior Member

The Secretary of the Department of Health and Ageing (the Secretary) has applied for the Tribunal as presently constituted to disqualify itself on the ground of apprehended bias. The application is resisted by iNova Pharmaceuticals Pty Ltd (iNova).

Background

The Tribunal as presently constituted made a decision in this matter on 22 July 2010: Re iNova Pharmaceuticals Pty Ltd and Secretary, Department of Health and Ageing (2010) 116 ALD 448; [2010] AATA 542. That decision was the subject of a successful appeal to the Federal Court by the Secretary: Secretary, Department of Health and Ageing v iNova Pharmaceuticals Pty Ltd [2010] FCA 1442. Justice Emmett set aside the Tribunal’s decision on the ground that it had made the following errors of law in its decision:
(1)In its decision, the Tribunal directed the Secretary to inform iNova whether the documents sought in its freedom of information applications exist. Such a direction was beyond the power of the Tribunal:
Section 43 of the AAT Act gives the Tribunal all the powers and discretions conferred on the decision maker whose decision is being reviewed. However, the FOI Act does no more than confer a legally enforceable right to be provided with documents. There is no entitlement to be furnished with information. That is the effect of s 11(1) and s 18(1). A decision maker in respect of a question arising under the FOI Act would not be required to provide information, but would have a duty to provide access to documents. I consider, therefore, that a direction to the Secretary to provide information, rather than provision of access to a document or documents in accordance with the FOI Act, is beyond the powers of the Tribunal. On the other hand, it would have been open to the Tribunal to direct the Secretary to respond to iNova’s requests in a manner that complies with the FOI Act, as properly construed and as explained by the Tribunal. [at 50]
(2)The Tribunal erred in concluding that the Secretary could not make a decision declining to say whether or not the documents of the categories requested by iNova exist:
… it was open to the Secretary, or her delegate, in giving a notice under s 26(1), to decline to state whether a document existed if to do so would cause the notice of the decision to be an exempt document by reason of the operation of any of the provisions in Part IV of the FOI Act. [at 65]
(3)The Tribunal misdirected itself when considering whether a statement of reasons would itself become an exempt document under s 37(1)(a) of the Freedom of Information Act 1982 (the FOI Act) if it included information about the existence of documents sought by iNova. Section 37(1)(a) requires the application of an objective test: in this case, whether the disclosure of the document “would, or could reasonably be expected to”, relevantly, “prejudice the … proper administration of the law in a particular instance”. Rather than applying an objective test, the Tribunal considered whether iNova would be able to identify an applicant for registration from the statement of reasons and whether it would then be able to take action that would prejudice the proper administration of the law.
The Court remitted the matter to the Tribunal “for reconsideration and decision according to law”. It made no order as to the constitution of the Tribunal.
On 21 December 2010, iNova requested a Directions Hearing “for argument in relation to the Tribunal’s reconsideration of its decision”. This was conducted by Deputy President Handley on 4 February 2011. At that Directions Hearing, the Secretary made an application for the Tribunal as presently constituted to disqualify itself on the ground of apprehended bias. The Deputy President made directions for the parties to lodge written submissions on this issue with which they duly complied.

Apprehension of Bias

The test of apprehended bias was set out by the High Court (Gleeson CJ, McHugh, Gummow and Hayne JJ) in Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337, at 344:
Where, in the absence of any suggestion of actual bias, a question arises as to the independence or impartiality of a judge (or other judicial officer or juror), as here, the governing principle is that … a judge is disqualified if a fair-minded lay observer might reasonably apprehend that the judge might not bring an impartial mind to the resolution of the question the judge is required to decide. That principle gives effect to the requirement that justice should both be done and be seen to be done, a requirement which reflects the fundamental importance of the principle that the tribunal be independent and impartial. It is convenient to refer to it as the apprehension of bias principle.

The Court went on to say, at 345, that “The question is one of possibility (real and not remote), not probability.”

Thus, for the Tribunal, the test is whether a fair-minded lay observer, having knowledge of the material objective facts, might reasonably apprehend that the Tribunal might not bring an impartial and unprejudiced mind to the determining of the application before it: Re PMMC/WJPj and Australian Prudential Regulation Authority (2009) 112 ALD 210 at 213.
The application of the test where a party asks a tribunal member to recuse him or herself on the ground of reasonable apprehension of bias was discussed by the President of the Tribunal in Re Mellor and Australian Postal Corporation [2010] AATA 288. In that case, like this one, a matter had been remitted to the Tribunal by the Federal Court because the Tribunal had made an error of law. There was no challenge to the Tribunal’s findings of fact, including those relating to credit. The President referred, at [25], to the statutory requirements for the Tribunal to “pursue the objective of providing a mechanism of review that is fair, just, economical, informal, and quick” (s 2A of the Administrative Appeals Tribunal Act 1975 (the AAT Act)) and for Tribunal proceedings to be conducted “with as little formality and technicality, and with as much expedition, as the requirements of this Act and of every other relevant enactment and a proper consideration of the matters before the Tribunal permit” (s 33((1)(b)).
The President said:
27. It seems to me that although the matter is before the tribunal by remittal, afresh, for potentially a full rehearing, it would be ignoring reality to put aside the fact that a member of the tribunal, without bias or apprehended bias, has determined factual issues in the case, where those findings have in no way been displaced by the appeal to the Federal Court. There is even a possible view of an application for reconstitution of the tribunal in those circumstances, that the applicant is seeking to take advantage of a technical error of law to give the applicant an opportunity to have a re-hearing of aspects of a matter where the finding was not in error in any respect. Such an applicant would have the distinct advantage of being able to seek artificially to avoid the findings of the first tribunal. That is not an opportunity which other applicants in the tribunal have and it does not seem desirable to my mind that a mere technical error of law alone should present an opportunity of revisiting a factual matter on which the applicant was unsuccessful the first time around.
28. It accordingly seems to me that just because a member makes an observation relating to credit, a fair-minded lay observer would not apprehend that the member might not bring an impartial and unprejudiced mind to the resolution of the matter. That is not to say that the member may not come to the same conclusion as the member came to the first time, but that is far from not bringing an impartial and unprejudiced mind to the resolution of the question. It is important to note that the fact alone of coming to the same conclusion a second time, or the prospect of that, is not the test. The test relates to the mind of the member and not whether the decision might or might not be the same.
The President, having considered that part of the text of the Tribunal Member’s decision relied upon by the applicant to support the application for recusal, and having found nothing which would cause the lay observer to draw a negative conclusion, concluded that the Tribunal should be constituted by the same Member on the remittal.

Submissions and Discussion

The Secretary submits that the Tribunal should recuse itself “because the circumstances of the case give rise to a reasonable apprehension of bias” as a result of the Tribunal making findings of fact on contentious matters which were adverse to the Secretary. The Secretary pointed to findings of fact in paragraphs 58, 64, 66, 67 and 68 of the Tribunal’s statement of reasons for its decision. iNova, in its submissions, addresses each of these paragraphs in turn. We have, therefore, included the text identified by the Secretary and referred to iNova’s submissions where relevant in our discussion. First, paragraph 58:
58. … The actions Dr Lopert claims that originator sponsors might take to preserve their market position are entirely speculative: there is no basis for an originator sponsor to take injunctive action against the regulators; changing the originator product would require an application for listing of a new medicine because this would be a different therapeutic good for the purposes of the Therapeutic Goods Act; patent infringement action cannot delay the TGA’s evaluation of an application for registration of a generic product; even if covert agreements and inducements were to exist, this would not delay the TGA’s evaluation of a generic product since no application would have been lodged; and the registering of and marketing by the originator of its own bioequivalent product …
iNova points out that the above material is not a factual finding by the Tribunal. It is a description by the Tribunal of a submission made by iNova as to what findings the Tribunal should make. The first sentence of paragraph 58, omitted from the text quoted above, makes this plain. The omitted first part of the paragraph is as follows:
Ms Allars contended that there is no evidence of any prejudice to the proper administration of any law. Provisions such as s 99ACH of the National Health Act operate of their own force. The Department has provided no evidence of a ‘particular instance’ of prejudice or to explain how the claimed delay in the reduction of PBS funding would result.
We also note the text quoted omits the last part of the paragraph which is as follows:
which is not prohibited by the Therapeutic Goods Act, would not delay the operation of the 12.5 percent price reduction. By contrast, Ms Allars said Mr van Niekerk has given evidence that he does not know of any way in which action taken by an originator can affect the operation of the law.
In our view, it is clear that the whole of this paragraph is part of the Tribunal’s discussion of the parties’ submissions and does not involve any finding of fact by the Tribunal.
The second paragraph identified by the Secretary is paragraph 64:
64. Turning to our reasons for not being satisfied from the evidence that the proper administration of the law, in terms of the way in which the application of the law is managed, could reasonably be expected to be prejudiced by disclosing to iNova whether or not the documents requested in respect of imiquimod exist (the second question posed above), we are mindful of the fact that one of the objects of the FoI Act is to provide a legally enforceable right of access to documents held by government. …
We agree with iNova’s response that paragraph 64 is not a finding of fact but rather a statement by the Tribunal of its understanding of the legal test required by the expression ‘proper administration of the law’ in s 37(1)(a) of the FOI Act. The omitted last part of the paragraph makes this clear:
This is limited only by exceptions and exemptions necessary for the protection of essential public interests and the private and business affairs of persons in respect of whom information is collected and held by government (s 3(a) of the FoI Act). Moreover, it is the stated intention of the Parliament that the provisions of the FoI Act shall be interpreted so as to further the objects of the FoI Act (s 3(2)).
The third paragraph identified by the Secretary is paragraph 66:
First, we are not satisfied, as Dr Lopert contends, that iNova would be able to identify the sponsor of a bioequivalent generic product from the mere fact of knowing of an application for listing on the ARTG having been lodged. The evidence does not support the factual assumption on which Dr Lopert’s belief is based — namely that only a handful of pharmaceutical companies operating in Australia are involved in the sponsoring of generic products. Dr Lopert conceded that many pharmaceutical companies based in Australia sponsor both generic and originator products. Thus, her contention that by a process of deduction and the application of industry knowledge the generic sponsor can be identified with reasonable ease is not, in our view, established.
iNova agrees that this is a factual finding but says it is not a factual finding as to the credit of Dr Lopert: “It is a finding resulting from the lack of evidence sufficient to satisfy the Tribunal as to the capacity of the applicant to identify the sponsor of the generic product”.
We have been unable to find authority for the proposition that when considering the application of the apprehension of bias test, a distinction should be drawn between findings of fact that go the credit of a witness and those that do not. However, we note that the Federal Court decision in Northern Rivers Fm Radio Limited v Australian Broadcasting Tribunal (1990) 25 FCR 266, referred to by the Secretary, indicates that findings that go to the credibility of witnesses may be of particular significance when considering the view that the fair‑minded lay observer might form from the objective material facts of the case.
In our view, whether or not the above finding reflects on Dr Lopert’s credit, it is clear that we made our finding having properly considered the relevant evidence that was before us. We are not satisfied that a fair-minded lay observer, having knowledge of the material objective facts, might reasonably apprehend that the Tribunal might not bring an impartial and unprejudiced mind to the determination of the application on remittal, as a consequence of this finding.
The fourth paragraph identified by the Secretary is paragraph 67:
67. Second, even if iNova were able to identify the sponsor of the generic product, we are not persuaded by Dr Lopert’s evidence that iNova could take action to delay listing and thereby prejudice the proper administration of the law. We note Mr van Niekerk’s evidence that he is not aware of what action iNova could take in this instance. …
iNova comments that this is in part a factual finding but also depends upon the Tribunal’s conclusions as to the legal entitlement of persons who hold patents. It is not a finding as to the credit of Dr Lopert.
The second half of the paragraph, which is omitted, states:
We also note that where a person holds a patent for a product or the copyright in a publication, the person is entitled to bring legal action to protect the patent or copyright. In our view, instituting proceedings to protect a legal right cannot be said to prejudice the proper administration of the law since such proceedings are themselves brought in pursuit of the application of the law.
We agree with the first part of iNova’s response. In our view, the fact that we were not persuaded by Dr Lopert’s evidence (because of other evidence and of other relevant law) would not lead to a reasonable apprehension of bias: we are not satisfied that a fair-minded lay observer, having knowledge of the material objective facts, might reasonably apprehend that the Tribunal might not bring an impartial and unprejudiced mind to the determining the application on the remittal as a consequence of this finding.
The fifth paragraph identified by the Secretary is paragraph 68:
68. Third, because, according to Dr Lopert’s evidence, the TGA has a specific time frame for the handling of applications for listing on the ARTG (for example, applications for the listing of new medicines must generally be processed within 255 working days from acceptance of the application), we are not satisfied that any action taken by iNova would delay the ARTG listing of a generic product.
We agree with iNova that while this paragraph refers to Dr Lopert’s evidence, the evidence was about the existence of statutory time limits.
In conclusion, we are not satisfied that the test of reasonable apprehension of bias has been met and we therefore reject the Secretary’s application that we should disqualify ourselves from hearing this matter on the remittal.

The Constitution of the Tribunal

We note the parties’ submissions relating to the reconstitution of a Tribunal on a remittal. As stated above, the Federal Court made no order as to the constitution of the Tribunal on the remittal. Section 44(6)(a) of the AAT Act states that the Tribunal need not be reconstituted on a remittal. Thus, any reconstitution is a matter for the President. Exercising his power under s 20B of the AAT Act, the President has determined that, on the remittal, the application should be heard by the Tribunal as originally constituted in this matter.

Decision

The Secretary’s application for the disqualification of the presently constituted Tribunal is refused.

I certify that the 28 preceding paragraphs are a true copy of the reasons for the decision herein of Mr RP Handley, Deputy President, and Ms AK Britton, Senior Member.

Signed: ............[sgd]................................................................
A Veness, Associate

Date of Decision:  25 March 2011
Applicant representative:                   Middletons
Applicant counsel:  Ms M Allars
Respondent representative:              Ms M Campbell, Australian Government Solicitor