Pro Teeth Whitening (Aust) Pty Ltd v Parliamentary Secretary to the Treasurer, David Bradbury MP
[2013] FCCA 188
•9 May 2013
FEDERAL CIRCUIT COURT OF AUSTRALIA
| PRO TEETH WHITENING (AUST) PTY LTD v PARLIAMENTARY SECRETARY TO THE TREASURER, DAVID BRADBURY MP | [2013] FCCA 188 |
| Catchwords: ADMINISTRATIVE LAW – Decision to certify that compulsory recall notice be issued without delay – whether decision of an administrative character – with legislative act – whether rules of natural justice apply to making of decision to certify – whether irrelevant consideration taken into account – whether relevant considerations ignored – whether open to respondent to be satisfied that it appeared that the applicant’s products create an imminent risk of death, serious illness or serious injury. |
| Legislation: Australian Consumer Law, ss.2, 122, 123, 127(1) |
| Annetts v McCann (1990) 170 CLR 596 Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 Century Metals and Mining NL v Robert J Yeomans (1989) 100 ALR 383 Commonwealth v Grunseit (1943) 67 CLR 58 Kioa v West (1985) 159 CLR 550 Marine Hill and Liability Insurance Co Ltd v Hurford (1985) 10 FCR 234 Minister for Immigration and Citizenship v SZMDS (2010) 240 CLR 61 RG Capital Radio v Australian Broadcasting Authority (2001) 113 FCR 185 Roche Products Pty Ltd v National Drugs and Poisons Schedule Committee (2007) 163 FCR 451 Sean Investments v Mackellar (1981) 38 ALR 363 SZOOR v Minister for Immigration and Citizenship [2012] FCAFC 58 |
| Applicant: | PRO TEETH WHITENING (AUST) PTY LTD |
| Respondent: | PARLIAMENTARY SECRETARY TO THE TREASURER, DAVID BRADBURY MP |
| File Number: | BRG 335 of 2012 |
| Judgment of: | Judge Jarrett |
| Hearing date: | 25 July, 2012 |
| Date of Last Submission: | 25 July, 2012 |
| Delivered at: | Brisbane |
| Delivered on: | 9 May 2013 |
REPRESENTATION
| The Applicant appeared by its director Mr G Harrison |
| Counsel for the Respondent: | Mr Del Villar |
| Solicitors for the Respondent: | Australian Government Solicitor |
ORDERS
The amended application filed on 12 July, 2012 be dismissed.
Any application for costs should be made in writing, filed and served within 21 days of the delivery of these orders.
The respondent to any costs application should file and serve a written response to the application for costs 21 days after service of any application for costs.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT BRISBANE |
BRG 335 of 2012
| PRO TEETH WHITENING (AUST) PTY LTD |
Applicant
And
| PARLIAMENTARY SECRETARY TO THE TREASURER, DAVID BRADBURY MP |
Respondent
REASONS FOR JUDGMENT
Pro Teeth Whitening (Aust) Pty Ltd carried on a business of retailing, mostly via the internet, teeth whitening products. For all intents and purposes that business was brought to a halt when, on 6 February, 2012 the respondent certified that compulsory recall notices in respect of two of the products sold by the applicant should be issued without delay. The certification was made pursuant to s.132J(1) of the Competition and Consumer Act 2004 (Cth) and the compulsory recall notices were issued pursuant to s.122 of the Australian Consumer Law.
In these proceedings the applicant challenges the respondent’s decision to certify that the compulsory recall notices should be issued without delay. If the challenge succeeds, the applicant contends that the compulsory recall notices should be set aside or quashed. It seeks orders pursuant to s.16 of the Administrative Decisions (Judicial Review) Act1977 to “Review and Quash/Set Aside the decisions of the respondent which resulted in issuance of Consumer Protection Notices 1 and 2 of 2012” and an order for “Compulsory Recall (attached to original) of the applicant’s products”. It also seeks an order to “Revoke Consumer Protection Notices No.1 of 2012 and No.2 of 2012 and related Compulsory Recall notices”.
In the alternative, the applicant “makes application under jurisdiction of the Judiciary Act1903, SECT 39B for equitable remedies under common law should any ground fail under the ADJR”.
The respondent submits that the application should be dismissed because:
a)the making of the recall notice under s.122 of the Australian Consumer Law is not a decision of an administrative character within the meaning of the ADJR Act;
b)the certification under s.132J of the Competition and Consumer Act is neither a decision of an administrative character nor conduct for the purpose of making a decision to which the ADJR Act applies; and
c)accordingly, the application under the ADJR Act is incompetent.
The respondent further argues that even if the application under the ADJR Act was competent, it should be dismissed because the applicant has failed to establish any of the grounds upon which it relies.
Legislative Scheme
It is necessary to understand something of the legislative framework within which the respondent made the decisions now sought to be impugned.
Part XI of the Competition and Consumer Act deals with the application of the Australian Consumer Law (set out in Schedule 2 to the Act) as a law of the Commonwealth. Division 3 of that Part contains provisions that provide for conferences for proposed bans and recall notices that might be issued pursuant to s.122 of the Australian Consumer Law.
Section 122 of the Australian Consumer Law gives a responsible Minister the power to issue a recall notice for consumer goods if it appears to the Minister that:
a)the goods will or may cause injury to any person; or
b)it is reasonably foreseeable that the goods will or may cause injury to any person; or
c)the goods do not comply with current safety standards; or
d)an interim or permanent ban on such goods is in force; and
it appears that suppliers of such goods have not taken satisfactory action to prevent the goods causing injury to the public even if the identity of such suppliers are not known to the Minister.
Section 123 of the Australian Consumer Law stipulates the information that may be contained in a recall notice which is made by legislative instrument: s.131E(1)(h) of the Competition and Consumer Act.
Before a recall notice can be issued pursuant to s.122 the Minister must first issue a proposed recall notice pursuant to s.132A of the Competition and Consumer Act. This proposed notice must be in writing, published on the internet, set out a draft of the recall notice, summarise the reasons why the Minister proposes to issue the recall notice and invite suppliers of goods affected by the notice to notify the Australian Competition and Consumer Commission in writing and within a certain period of time if they would like the ACCC to hold a conference in relation to the issuing of a recall notice: s.132A(3). If a request for conference is received by the ACCC it must appoint a day and time for such conference to take place and notify the Minister and relevant suppliers of the day, time and place of the conference: s.132C. The ACCC is then required to provide written recommendations to the Minister and the Minister must have regard to those recommendations when coming to a decision about issuing a notice: s.132D.
The requirement for a Minister to issue a proposed recall notice is however negated if the Minister certifies that a recall notice should be issued without delay pursuant to s.132J(1)(b). The Minister can certify that the notice be issued without delay if it appears to the Minister that consumer goods of a particular kind create an imminent risk of death, serious illness or serious injury: s.132J(1).
If a proposed recall notice has been issued and a conference has taken place, the Minister may still certify that the recall notice should issue without delay provided that no recommendations have been made by the ACCC: s.132J(3). A notice of recall of goods without delay is not a legislative instrument: s.132J(4).
Background Facts
Against that legislative scheme, it is necessary to turn to the facts. Before doing so, I should record two matters. The first is that both parties took objection to some of the evidence relied upon by the other party. I heard the objections and admitted the evidence the subject of the objections provisionally. It seems to me that most of the objections were well taken by each party but much of the evidence is of marginal relevance in any event. I do not propose to rule on each of the objections, because it is, in my view unnecessary to do so.
The second matter is that Mr Harrison was permitted to give some short oral evidence at the commencement of the hearing to cure a defect in the applicant’s evidence and he was asked one question in cross-examination about that evidence. Otherwise, there was no cross-examination of any witnesses.
The applicant conducted a business whereby it supplied teeth whitening products directly to consumers. Two of the products sold by the applicant contained more than 6% hydrogen peroxide or 18% carbamide peroxide.
In December, 2011 and January, 2012 the ACCC and the applicant’s director, Mr Gavin Harrison, engaged in negotiations over a voluntary product recall for those products. The ACCC took the view that the products were unsafe for consumers because they contained more than 6% hydrogen peroxide or 18% carbamide peroxide and were for home use by consumers. The applicant disagreed with the ACCC. I will refer to these exchanges in more detail later in these reasons.
Mr Harrison, for the applicant, has made it clear that the applicant is not seeking to have the Court review the validity of the ACCC’s position (or resulting actions) that teeth whitening products containing over 6% hydrogen peroxide or 18% carbamide peroxide are unsafe for consumer use at home. The applicant was very careful to point out that its argument in this case was with the Minister’s certification that the compulsory recall notices should be issued without delay. He did not cavil with the decision to issue the notices themselves (a decision made pursuant to s.122 of the Australian Consumer Law.). So much appears from the applicant’s submissions filed on 8 June, 2012 at paragraph 1.1 and its submissions of 24 July, 2012:
3 This case is not questioning the validity or merits of the ACCC and respondent’s policy regarding teeth whitening products. It is also not questioning the respondent’s view that the applicant’s products should be Compulsorily Recalled. It is however about the illegal use of an inappropriate section of the Competition and Consumer Act 2010 (CCA) to achieve his objective, resulting in the denial of procedural fairness and natural justice for the applicant by issuing a Compulsory Recall without Delay.
While the applicant disagrees with the ACCC about its assessments of the safety of the applicant’s products, Mr Harrison, for the applicant, accepts that the ACCC position and the related evidence used to support its position is not relevant to this Application, except to the extent that the ACCC advised the respondent and the respondent relied upon that information.
The negotiations between the ACCC and Mr Harrison between December, 2011 and January, 2012 about the voluntary recall proved to be unsuccessful. Consistent with the statutory scheme discussed above, during those negotiations and communications the applicant requested a conference with the responsible Minister. Mr Harrison took the view that a conference was required under s.132A and 132C of the Competition and Consumer Act before the applicant could be required to issue a compulsory recall notice in respect of its products.
However, on 6 February, 2012 the applicant was served with orders signed by the respondent, following a recommendation from the ACCC, requiring compulsory recall of two of the applicant’s products without delay. Mr Harrison was told that no conference was required because the respondent considered that the products represented an “imminent risk of serious injury” to consumers. The respondent took action pursuant to s.122 of the Australian Consumer Law. At the same time, the respondent certified that the recall notice should be issued without delay. This was done pursuant to s.132J of the Competition and Consumer Act.
The applicant commenced these proceedings in the Federal Court on 24 February, 2012. They were transferred to this Court. Despite mediation in the proceedings, the parties were unable to resolve their differences.
A decision of an administrative character?
Only a person who is aggrieved by a decision to which the ADJR Act applies may apply for review of the decision in either the Federal Court or this Court. A decision to which the ADJR Act applies is relevantly defined in s.3(1) of the ADJR Act. The Act applies to decisions of an administrative character made, proposed to be made, or required to be made under an enactment referred to in paragraph (a), (b), (c) or (d) of the definition of enactment in the ADJR Act. If the impugned decision is not a decision of an administrative character, it cannot be challenged under the ADJR Act.
Whilst the respondent concedes that there a two operative decisions – the decision to issue the recall notices pursuant to s.122 of the Australian Consumer Law and the decision to certify that they be issued without delay pursuant to s.132J of the Competition and Consumer Act, it argues that neither decision is a decision of an administrative character.
The respondent argues that the decision to recall the applicant’s products under s.122 of the Australian Consumer Law was a legislative action. In that respect, the respondent points to several matters when, taken together, support that conclusion. In particular, he suggests that:
a)The issue of a recall notice is subject to parliamentary control. It is an instrument that is subject to disallowance by Parliament: s.131E(h) of the Competition and Consumer Act and ss.38 and 42 of the Legislative Instruments Act2003). Parliamentary control is a hallmark of legislative actions rather than administrative actions.
b)A recall notice creates a rule of law and does not apply an existing rule to particular circumstances. Section 127(1) of the Australian Consumer Law requires a person who is required by the notice to do something to comply with the notice. It creates new obligations and thereby “determines the content of a law as a rule of conduct or a declaration as to ... duty”: Commonwealth v Grunseit (1943) 67 CLR 58 at 82 (Latham CJ).
c)Although the recall notice here does not create a rule of general application but concerns only two of the applicant’s products, the authorities recognise that “‘individual norms” which apply only to the action of a single person on a single occasion may still be classed as laws: RG Capital Radio v Australian Broadcasting Authority (2001) 113 FCR 185 at 195.
d)The recall notice has a binding legal effect and once made, it enlivens several statutory provisions which impose obligations upon a supplier to repair or replace consumer goods if the supplier has given an undertaking to do so.
e)There is no provision for merits review of a recall notice. This suggests that it is not a decision of an administrative character: Roche Products Pty Ltd v National Drugs and Poisons Schedule Committee (2007) 163 FCR 451 at [36].
f)Subject to the application of s.132J of the Competition and Consumer Act, as discussed above, there are detailed requirements for consultation with suppliers before recall notices under s.122 can be issued. Moreover, the respondent points out that because recall notices are legislative instruments, there is an independent requirement for consultation under s.17 of the Legislative Instruments Act.
g)Although the decision in this case relates to two products of a single supplier, the power in s.122 of the Australian Consumer Law can be exercised irrespective of whether the Minister knows the identity of any supplier and a notice can relate to an entire class of products. The respondent’s argue that this reinforces that a recall notice under s.122 creates a rule of conduct and is legislative as opposed to administrative in character.
Each of the above matters is relevant to the consideration of the nature of the decision made pursuant to s.122 of the Australian Consumer Law to issue a recall notice. Matters of a similar nature were considered by the Full Court of the Federal Court of Australia to be relevant indicia of a legislative action rather than an administrative action: RG Capital Radio v Australian Broadcasting Authority (above) at 194 – 202. I accept that those matters tend towards the conclusion that the decision to issue a recall notice pursuant to s.122 of the Australian Consumer Law is a legislative decision rather than a decision of an administrative character.
For the purposes of this application, I am prepared to assume that the issue of such notices was a legislative action rather than an administrative action.
The respondent’s argument is developed further by suggesting that the decision to certify that the compulsory recall notice be issued without delay is not a decision of an administrative character for the purposes of the Act.
The respondent argued that in Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321, Mason CJ (with whose reasons Brennan and Deane JJ agreed) distinguished between ‘decisions’ that were reviewable under s.5 of the ADJR Act and ‘conduct’ that was reviewable under s.6. The former entailed decisions that were final, operative and substantive; the latter was essentially procedural. In particular the respondent relied upon the following passage from his Honour’s judgment:
[O]nce it is accepted that “decision” connotes a determination for which provision is made by or under a statute, one that generally is substantive, final and operative, the place of “conduct” in the statutory scheme of things becomes reasonably clear. In its setting in s.6 the word “conduct” points to action taken, rather than a decision made, for the purpose of making a reviewable decision. In other words, the concept of conduct looks to the way in which the proceedings have been conducted, the conduct of the proceedings, rather than decisions made along the way with a view to the making of a final determination. Thus, conduct is essentially procedural and not substantive in character. Accordingly, s.3(5) refers to two examples of conduct which are clearly of that class, namely, “the taking of evidence or the holding of an inquiry or investigation”. It would be strange indeed if “conduct” were to extend generally to unreviewable decisions which are in themselves no more than steps in the deliberative or reasoning process.
The respondent argues that the Court should consider that the action of certifying that a recall notice should be issued without delay does not amount to a ‘decision’ under s.5 of the ADJR Act. Rather than determine a substantive question, the respondent argues, it does nothing more than determine a question of procedure: whether or not the conference process must be followed before a recall notice is made under s.122 of the Australian Consumer Law.
The respondent further argues that “if the ADJR Act permits direct review of the certification under s.132J, it would only be as ‘conduct for the purpose of making a decision to which the ADJR Act applies” under s.6 of that Act. However, because the issue of the recall notices is not a decision of an administrative character, the certification under s.132J does not fall within s.6 of the Act because there is no ‘decision’ to which the ADJR Act applies.
I reject the respondent’s arguments on this point because, in my view, the decision to certify that the recall notices be issued without delay is a decision of an administrative character rather than a legislative act. I reach that conclusion because:
a)Section 132J(4) expressly provides that a notice issued under s.132J(1) or (2) is not a legislative instrument. The issue of such a notice is not subject to Parliamentary control.
b)The decision to certify is not a step in the deliberative or reasoning process to issue the s.122 notices. It is a decision of substance because it removes from the target of the notice, the benefits otherwise conferred by subdivision A of Division 3 of Part XI of the Competition and Consumer Act and in particular the entitlement to request a conference with the ACCC about the proposed recall notices. Were it not for the s.132J decision, a decision quite separate to a decision to issue a recall notice pursuant to s.122 of the Australian Consumer Law, the compulsory recall notice could not be issued until after the applicant had the opportunity to engage in the processes provided in s.132A of the Competition and Consumer Act.
c)A notice issued under s.132J(1) or (2) of the Competition and Consumer Act does not create a rule of law. It applies an existing law (s.132J) to the particular circumstances of the case before the Minister. It creates no new obligations upon the applicant.
d)A notice issued under s.132J(1) or (2) of the Competition and Consumer Act does not have any “binding legal effect” in the sense that it does not enliven any statutory provisions which impose obligations upon a supplier of the relevant products to do anything.
In my view the application is competent. The target of the applicant’s claims is the decision of the Minister made pursuant to s.132J(1)(b) to certify that the recall notices issued pursuant to s.122 of the Australian Consumer Law be issued without delay. In my view that is a decision of an administrative character under an enactment and is properly reviewable under the ADJR.
The grounds of review
The applicant summarised its claims in the following way in its submissions filed on 24 July, 2012:
5 The respondent’s decision against the applicant was erroneous due to an error of law in abuse of his power to invoke s 132J of the Competition and Consumer Act. Simply put, the applicant’s products did not, and could not, represent an “imminent risk of serious injury” as the legal test requires for exercise of this power. By any reasonable definition or interpretation of the evidence provided, the products are incapable of causing a serious injury. Even by the Competition and Consumer Act’s broad definition the products are only capable of causing an “ailment” which is specifically excluded from the “serious injury” definition. In addition, the risk was not “imminent” so the exercise of a “Compulsory Recall without Delay”, thereby bypassing the legislated procedural fairness process, was illegal. When interpreted as required by a reasonable decision maker, the Competition and Consumer Act intentionally and specifically provides a process in s132A through s132D which must be followed when there is consideration for issuance of a Compulsory Recall. Legislators created these requirements to ensure fairness, due process and the legal rights of affected businesses are preserved.
The applicant identifies s.5(1)(a), (1)(b), (1)(e), (1)(h) and (1)(j) of the ADJR Act as giving him an entitlement to relief.
Natural Justice
Mr Harrison argues that the rules of natural justice apply to a decision of the Minister to certify under s.132J that a notice under s.122 of the Australian Consumer Law should be issued without delay.
The respondent argues that the power to certify would not normally be subject to the requirements of natural justice. Similar powers that are meant to be exercised in cases of urgency or emergency have been held not to be subject to a requirement of natural justice (Marine Hill and Liability Insurance Co Ltd v Hurford (1985) 10 FCR 234 at 241).
Section 5(1)(a) of the ADJR Act does not itself render the rules of natural justice applicable in a case where they would not otherwise apply. In Kioa v West (1985) 159 CLR 550 Mason CJ explained the position in the following terms (at 582 – 583):
It is a fundamental rule of the common law doctrine of natural justice expressed in traditional terms that, generally speaking, when an order is to be made which will deprive a person of some right or interest or the legitimate expectation of a benefit, he is entitled to know the case sought to be made against him and to be given an opportunity of replying to it:… The reference to ‘right or interest’ in this formulation must be understood as relating to personal liberty, status, preservation of livelihood and reputation, as well as to proprietary rights and interests.
The reference to ‘legitimate expectation’ makes it clear that the doctrine applies in circumstances where the order will not result in the deprivation of a legal right or interest. Take, for example, an application for a renewal of a licence where the applicant, though he has no legal right or interest, may nevertheless have a legitimate expectation which will attract the rules of natural justice. In Salemi v MacKellar (No 2) (1977) 137 CLR 396 ; 14 ALR 1 Barwick CJ expressed the view that the expression ‘legitimate expectation’ adds little, if anything, to the concept of a right. However, later decisions demonstrate that the concept of ‘legitimate expectation’ extends to expectations which go beyond enforceable legal rights provided that they are reasonably based: Heatley v Tasmanian Racing and Gaming Commission (1977) 137 CLR 487 ; 14 ALR 519; FAI Insurances Ltd v Winneke (1982) 151 CLR 342 ; 41 ALR 1 Attorney-General (Hong Kong) v Ng Yuen Shiu [1983] 2 AC 62.
“…[U]nless there is some relevant statutory exclusion…procedural fairness applies”: Century Metals and Mining NL v Robert J Yeomans (1989) 100 ALR 383 at 409.
The application of the rules of procedural fairness depend to a large extent on the construction of the statute under consideration – Courts will only allow for the modification of natural justice rights when expressed in the clearest terms: Annetts v McCann (1990) 170 CLR 596.
In my view, the rules of natural justice applied to the decision of the Minister to make the certification pursuant to s.132J of the Competition and Consumer Act. Upon the certification, the applicant was deprived of its right, or at least a legitimate expectation of the benefit of the procedures mandated by Part XI Div 3 of the Competition and Consumer Act. It was entitled to know the case sought to be made against it and to be given an opportunity to reply to it. The certification by the Minister was the very type of act, in my view, that was identified by Mason CJ in the passage set out above.
Mr Harrison argues that the natural justice rules required that he be given the opportunity to participate in a conference in accordance with the process established in Division 3 Part XI of the Competition and Consumer Act before the Minister decided to issue the certification under s.132J(1)(b) of the Competition and Consumer Act. However, in my view, the very existence of s.132J(3) must indicate that in the circumstances prescribed by s.132J(1)(b), the natural justice rules did not require that a conference or an opportunity to meet and put further material be afforded to the applicant before the Minister made the impugned decision. If that was not the case, s.132J(3) would have no work to do and would be otiose.
In any event, if the content of the natural justice requirement in this case required that the applicant be afforded the opportunity to put his case to the ACCC (short of the conference process required by Part XI, Div. 3 of the Competition and Consumer Act) the evidence demonstrates that it was given that opportunity.
The evidence reveals that the ACCC was in contact with Mr Harrison on several occasions in December, 2011 and January, 2012. The initial email correspondence of 12 December, 2011 set out the ACCC’s concerns and carried a request that the applicant cease supplying any products that contained the offending compounds in concentrations greater than that stated in the email. It requested certain details from the applicant. It set out the information upon which the ACCC’s concerns were based and included internet links to the relevant information.
Mr Harrison, on behalf of the applicant, responded to the ACCC’s email and raised issue with the information upon which the ACCC had based its view that products containing more than 6% hydrogen peroxide or 18% carbamide peroxide were unsafe for consumers to use at home. He specifically took issue with:
a)the use of information from the Australian Dental Association;
b)the use of the European Union Scientific Committee Opinion of 2007;
c)the ACCC’s interpretation and use of the Poisons Standard 2011.
He also requested evidence of complaints from consumers concerning the use of the applicant’s products.
In an email which appears to be dated 12 December, 2011, Mr Harrison referred to Division 3 of Part XI of the Competition and Consumer Act and said:
I therefore request, if it is the intention of the Minister and ACCC to impose a Ban of any type on consumer products for cosmetic teeth whitening use containing greater than 6% Hydrogen Peroxide, that I am invited to meet with the Minster or participate in a conference prior to issue of any such ban.
He repeated his request by an email sent on 15 December, 2011.
By an email dated 16 December, 2011, the ACCC indicated that if it had not received a response to certain of its requests by 19 December, 2011, it would consider the options available under the Australian Consumer Law “including a possible recommendation to the Parliamentary Secretary to the Treasurer to consider a compulsory product safety recall. Any such action would of course take account of the legislative requirements relevant to opportunities to hold a conference in relation to the matter.”
That email clearly put the applicant on notice that a possible recommendation to the Parliamentary Secretary to the Treasurer to consider a compulsory product safety recall might be made.
Further email correspondence ensued between the applicant (by Mr Harrison) and the ACCC in January, 2012. Both proposed meetings (although the ACCC proposed a meeting by telephone). Mr Harrison supplied his own evidence about the safety of the applicant’s products, including a clinical study which he said refuted the opinion relied upon by the ACCC from the Australian Dental Association and the EU Scientific Committee.
The correspondence from the ACCC gave clear and adequate notice of the case that was put against the applicant’s products. The applicant had, and took up, the opportunity to respond. The material placed before the Minister in the briefing notes prepared by the ACCC included Mr Harrison’s arguments about the safety of the applicant’s products.
Mr Harrison argues that the applicant was not provided any formal opportunity to present its case or evidence or “particular fact” in support of its case before a decision was made. If by formal opportunity, Mr Harrison refers to an oral hearing, such a hearing was not mandated by the Competition and Consumer Act or by the rules of natural justice. The content of the natural justice rules in the context of this case did not require that the applicant be given the opportunity to complete the processes mandated by s.132A of the Competition and Consumer Act and to confer and put to either the ACCC or the Minister the further evidence and other matters that he wished to ventilate.
Mr Harrison argues that the fact the submission of material and evidence to the ACCC is neutral. The material was submitted voluntarily and incomplete. The material was not requested by the ACCC as “they were only making demands of the applicant, rather than conducting a review or considering the merits of the applicant’s case before a policy was formed”. He argues that the ACCC communications with the applicant were for enforcement of a predetermined policy only and there was no “negotiation” between the applicant and the ACCC. Moreover, the policy that the ACCC was seeking to enforce was “outside existing laws, without industry consultation and the respondent acted to effectively bypass existing legislation by utilizing Parliamentary Instruments to create new laws against only the applicant, without any consultation or negotiation process”.
As a result, Mr Harrison argues that the applicant did not have the formal opportunity to submit all the relevant evidence he wished to submit and make a “formal case” against the proposed recall actions. However, as I identified above, the applicant takes no issue with the validity or merits of the ACCC’s or the respondent’s policy regarding teeth whitening products. It is also not questioning the respondent’s view that the applicant’s products should be compulsorily recalled.
In my view, the applicant’s claim pursuant to s.5(1)(a) of the ADJR Act is not made out because even if the rule of natural justice required that the applicant be given the opportunity to put its case to the Minister before he exercised his powers under s.132J(1) of the Competition and Consumer Act, it was given that opportunity. No formal conference or interview process was necessary for it to make its position clear.
Procedures required by law not observed
Mr Harrison argues that the respondent did not follow procedures required by law to be followed before he certified that the recall notices should be issued without delay.
Section 132J(1) requires that certain matters must appear to be the case before the Commonwealth Minister can act. I accept the respondent’s argument that those requirements do not constitute ‘procedures’ in any sense of that term as used in s.5(1)(b)of the ADJR Act.
This ground overlaps with the first ground set out above. For the reasons I have given above, I do not consider that this ground has any merit.
Improper exercise of the power
Mr Harrison challenges the respondent’s decision on the basis that the making of the decision was an improper exercise of the power conferred by the enactment in pursuance of which it was purported to be made: s.5(1)(e) of the ADJR Act. He argues that there is evidence of bad faith on the part of the respondent. He says that the fact that despite the respondent’s claim that the applicant’s class of products represented “an imminent risk of serious injury” to consumers, he took no further action requiring any product recalls on grounds of safety (or other grounds) for similar non-compliant products against any other supplier despite being aware of many other suppliers of non-compliant products. Mr Harrison argues that this is evidence that the respondent did not believe this class of products represented “an imminent risk of serious injury” and therefore acted in bad faith against the applicant.
Mr Harrison argues that s.132J(1)(b) is intended to be utilised only in circumstances where a specific (unique to one vendor) product is highly likely to cause death or serious permanent injury to consumers. It is not intended to be utilised to single out one supplier's products which are essentially the same as many other suppliers’ products in the market. He suggests that by electing to single out the applicant products when the respondent was aware there are many other non-compliant products which are essentially the same, was discriminatory toward the Applicant, unfair and did not serve the Competition and Consumer Act’s objective of consumer protection.
He further claims that the respondent’s actions were intentionally damaging to the applicant.
However, the action against the applicant was taken after it had failed to voluntarily recall its products that the ACCC and the respondent regarded as unsafe. The evidence reveals that other companies approached by the ACCC had recalled their offending products voluntarily. So much appears from the briefing minute given to the respondent by the ACCC on 9 December, 2011. There is also evidence before me that the ACCC contacted known suppliers of do‑it‑yourself teeth whiteners and eight suppliers had voluntarily recalled 22 do‑it‑yourself teeth whitening products that contained unsafe concentrations of hydrogen peroxide. The factual basis upon which the applicant advances its submission about bad faith is not made out. The compulsory recall system is in place to take account of circumstances where suppliers will not voluntarily recall their products.
Moreover, given that the applicant does not challenge the validity or merits of the ACCC’s policy regarding teeth whitening products nor is questioning the respondent’s view that the applicant’s products should be compulsorily recalled, it is of little moment that the respondent took no similar steps to have other suppliers effect a compulsory recall.
There was evidence before the Minister (discussed below) that could have engaged the requirements of s.132J(1)(b). I was taken to nothing which would lead to the conclusion that the exercise by the Minister of the power conferred by that section was improper, or that it was exercised for an improper purpose. The briefing note dated 3 February, 2012 provided by the ACCC to the respondent reveals no improper purpose. There is no requirement in the Competition and Consumer Act that, in the event that the Minister determines to certify that a recall notice should be issued without delay, recall notices must be issued against all suppliers of that product or class of product.
Nor does the fact that there might have been other options taken by the respondent such as a mandatory standard or total ban for the relevant types of products which would have resulted in all suppliers having to effect a compulsory recall mean that the exercise of the power in this case was improper.
Allied to this ground is the claim by the applicant that the respondent took into account an irrelevant consideration, namely that the applicant had volunteered to effect a recall of its offending products. That fact was not accepted by the respondent and although Mr Harrison gave oral evidence of that fact at the hearing, cross-examination revealed that he had never told the ACCC or the respondent that the applicant had voluntarily ceased selling the offending products. The fact that s.122 provides, among other things, that it must appear to the responsible Minister that the supplier has not taken ‘satisfactory action’ to prevent the goods causing injury to any person suggests that the failure to initiate a voluntary recall of the offending products is a relevant consideration.
Mr Harrison argues that the applicant was discriminated against by the Minister’s decision under s.136J, but I accept the respondent’s argument that the mere fact that the applicant did not voluntarily recall its products meant that it was treated differently. That does not amount to any unlawful discrimination and nor does it amount to bad faith or an abuse of power.
The provisions for compulsory recalls (s.122 of the ACL) contain different prescriptions than the provisions for voluntary recalls (s.128 of the ACL) and so the fact that there were different conditions imposed on the applicant flows from the very structure of the Act.
This ground of review is not made out.
Taking account of irrelevant considerations and ignoring relevant considerations
The applicant argues that the respondent took into account irrelevant considerations, namely:
a)certain Poison Standards requirements;
b)injury reports referred to in the briefing notes to the respondent;
c)an email from the Australian Dental Association suggesting that there had been injuries associated with the use of do-it-yourself tooth whitening products; and
d)risk assessments from the European Union Scientific Committee.
The Competition and Consumer Act does not specify what matters are relevant considerations for the exercise of the power set out in s.132J save that it must appear to the Minister that consumer goods of a particular kind create an imminent risk of death, serious illness or serious injury. The relevant principle is that stated by Deane J in Sean Investments v Mackellar (1981) 38 ALR 363 at p.375:
…where relevant considerations are not specified, it is largely for the decision-maker, in the light of matters placed before him by the parties, to determine which matters he regards as relevant and the comparative importance to be accorded to matters which he so regards. The ground of failure to take into account a relevant consideration will only be made good if it is shown that the decision-maker has failed to take into account a consideration which he was, in the circumstances, bound to take into account for there to be a valid exercise of the power to decide.
Just as there is nothing in s.132J or the Competition and Consumer Act generally that would prescribe these matters that were relevant for consideration when exercising the power granted by s.132J, there is nothing that prescribes what is irrelevant.
There is nothing in the statute which expressly, or by implication, prevents the respondent for the purpose of acting under s.132J from taking into account poison standards, the policy of the Australian Dental Association, the injury reports referred to in the briefing notes to the respondent, and the risk assessments from the European Union Scientific Committee. I accept the respondent’s submission that it would be highly anomalous to regard the respondent as prohibited from considering such matters as how a substance has been classified for the purposes of the poison standards, reports on whether or not the substance may have caused injury, what the relevant dental bodies or other professional bodies may make of the substance and risk assessments from other jurisdictions.
The respondent did not fail to take a relevant consideration into account. The applicant has not identified any failure by the respondent to take into account a factor, the consideration of which was mandated by the Competition and Consumer Act.
This ground of review is not made out.
No evidence to justify the making of the decision
To make the decision that the applicant now seeks to attack, it had to appear to the respondent Minister that the applicant’s product’s created an imminent risk of death, serious illness or serious injury: s.132J(1) of the CCA. By a combination of s.130A of the Competition and Consumer Act and the definitions in s.2 of the Australian Consumer Law serious injury or illness means an acute physical injury or illness that requires medical or surgical treatment by, or under the supervision of, a medical practitioner or a nurse (whether or not in a hospital, clinic or similar place), but does not include:
a)an ailment, disorder, defect or morbid condition (whether of sudden onset or gradual development); or
b)the recurrence, or aggravation, of such an ailment, disorder, defect or morbid condition.
To meet the description of “serious illness” or “serious injury” for the purposes of s.132J(1) of the CCA, the injury does not need to be permanent or life threatening. Mr Harrison’s submissions were predicated upon the basis that the injury or illness caused or likely to be caused by the offending products needed to be permanent. But that is not so.
The words of the section “if it appears to the Commonwealth Minister” are important because they make it clear that the Minister is not required to demonstrate that there is in fact an imminent risk of serious injury or serious illness. It is the appearance of those things that is relevant.
Once it is appreciated that it is the appearance of those matters to the Minister that is important for the purposes of ss.132J(1) of the CCA, it is clear that Mr Harrison’s arguments about the veracity of the information placed before the respondent by the ACCC have no merit. There was certainly information placed before the respondent that established that products containing more than 6% hydrogen peroxide or 18% carbamide peroxide had caused serious injury or serious illness. The applicant’s submissions acknowledge that that is so.
Mr Harrison points out that the respondent was informed by the ACCC that the applicant had no injury complaints in "Minute 4 of 2012” from the ACCC to the respondent when recommending the respondent enacts the compulsory recall without delay. He also points out that the respondent was provided with “the Legal Test and Definitions from the Competition and Consumer Act in the same Minute”. He was also supplied with a draft "Safety Recall Notice" which described the "Hazard" to consumers as: " .. may suffer irritation or inflammation .. ". Thus, it is clear that the Minister was aware of all of these things.
The applicant’s submissions acknowledge that the ACCC provided the respondent with not just the information gathered by the ACCC but also the information provided by the applicant. He submits: “The inconsistencies and conflicting information provided to the respondent by the ACCC should have prompted the respondent as a person discharging his responsibilities correctly, to question the recommendation of the ACCC and elect not to invoke an inappropriate section of the CCA. The respondent did not request any evidence from the ACCC to verify any of their claims, including the claimed "at least 58 reports of injuries" cited in Minute 4 of 20l2 which was used in part to justify the ACCC recommendation and used by the respondent in his Media Release, although he was informed no injuries were related to the Applicant.”
His submission goes on:
3.7 Had the respondent performed adequate due diligence (as is required of his role) and reviewed the evidence, or undertaken a conference with the applicant as was legally required under the Competition and Consumer Act before acting against the Applicant, he would have become aware that the vast majority of "injury reports" were either anecdotal, unrelated to the scope of the ACCC Recall actions, related to in-office Dentist treatments or inflicted using large supplier's products such as Colgate and Philips (which are not associated with the Applicant) and which the respondent and ACCC have taken no action against to date.
3.8 The respondent elected to take a path of extreme prejudice against the applicant by utilizing a power under the Competition and Consumer Act which is intended only for situations of grave urgency which would likely result in permanent severe injury or death, thus bypassing the usual process where the applicant could receive natural justice by being fairly heard and potentially avoiding the resulting legal action.
In my view, these submissions make it clear that the applicant accepts that there was evidence before the respondent from which he might have concluded that it appeared that the applicant’s product’s created an imminent risk of serious illness or serious injury.
There was no error of fact, in my view, in the respondent concluding on the material before him that it appeared that the applicant’s product’s created an imminent risk of serious illness or serious injury, let alone an error as to a jurisdictional fact.
In my view, this ground of review has no merit.
Otherwise contrary to law
The further amended application of the applicant added a claim for relief pursuant to s.39B of the Judiciary Act 1903. Mr Harrison sought to agitate that relief ought to be granted under that section if the applicant’s claims under the ADJR Act failed. Many of the claims overlap and to the extent that they do so, I have dealt with them above.
The only ground that was not dealt with above is the applicant’s claim that the respondent’s decision to certify that a compulsory recall notice be issued without delay was so unreasonable and illogical that no reasonable decision maker could have arrived at it.
Where a decision is one on which reasonable minds can differ, it cannot be set aside on the ground of Wednesbury unreasonableness or illogicality: Minister for Immigration and Citizenship v SZMDS (2010) 240 CLR 61; SZOOR v Minister for Immigration and Citizenship [2012] FCAFC 58. Unless it can be said that there is essentially only one conclusion open on the material, any argument based on illogicality or Wednesbury unreasonableness must fail.
There is no dispute between the parties about the material that was before the respondent when the certification was made. I accept the respondent’s submission that when one has regard to all of this material before the respondent, it could reasonably appear to the respondent that products containing more than 6% hydrogen peroxide or 18% carbamide peroxide posed an imminent risk of serious injury if used in an uncontrolled way.
It was not the applicant’s case that its products were different from other teeth whitening products on the market. At paragraph 9 of the applicant’s submission for hearing, it is said of other products that the chemical composition is not unique to the applicant.
I accept the respondent’s argument that that is why evidence about injuries associated with other products are directly relevant to determining whether or not the applicant’s products pose a risk.
In my view, the conclusion reached by the respondent, namely that it appeared that the applicant’s product’s created an imminent risk of serious illness or serious injury was open on the material before the respondent and his conclusion in that regard was not irrational nor illogical in the Wednesbury sense.
Conclusion
In my view, none of the grounds of review agitated by the applicant have been made out. The application must be dismissed.
The respondent has sought his costs of the proceedings, but no argument has been addressed to the question of costs. Any application for costs should be made in writing, filed and served within 21 days of the delivery of these orders. The respondent to any costs application should file and serve a written response to the application for costs 21 days thereafter.
I certify that the preceding ninety-three (93) paragraphs are a true copy of the reasons for judgment of Judge Jarrett
Date: 9 May 2013
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