Re Ego Pharmaceuticals Pty Ltd and Minister for Health and Ageing
[2012] AATA 113
•24 February 2012
[2012] AATA 113
Division GENERAL ADMINISTRATIVE DIVISION File Number
2008/4472
Re
Ego Pharmaceuticals Pty Ltd
APPLICANT
And
Minister for Health and Ageing
RESPONDENT
DECISION
Tribunal Justice Downes, President
Dr T Schafer, MemberDate 24 February 2012 Place Sydney Application dismissed.
..............[sgd]..........................................................
Justice Downes, President
CATCHWORDS
ADMINISTRATIVE TRIBUNALS – Administrative Appeals Tribunal – bias – apprehended bias – interest by association – interest in the outcome – part-time member – scientist – practicing lawyer – dealings with Commonwealth agency – review of decisions of that agency – no dealings relevant to review – fair-minded lay observer would not apprehend bias – no “interest that could conflict with proper performance of function” – s 14 Administrative Appeals Tribunal Act 1975 (Cth)
LEGISLATION
Administrative Appeals Tribunal Act 1975 (Cth) ss 6, 7, 11, 14, 21, 33, 42, 43
CASES
British American Tobacco Australia Services Ltd v Laurie [2011] HCA 2; (2011) 242 CLR 283
McGovern v Ku-ring-Gai [2008] NSWCA 209; (2008) 72 NSWLR 504
Ebner v Official Trustee in Bankruptcy [2000] HCA 63; (2000) 205 CLR 337
Forge v Australian Securities and Investments Commission [2006] HCA 44; (2006) 228 CLR 45
Kempe v Bailey [2003] ACTSC 13; (2003) 174 FLR 460
Liedig v Commissioner of Taxation (1994) 50 FCR 461
Michael Wilson & Partners v Nicholls [2011] HCA 48; (2011) 282 ALR 685
Minister for Immigration and Ethnic Affairs v Pochi [1980] FCA 85; (1980) 44 FLR 41
Mobil Oil Australia Pty Ltd v Federal Commissioner of Taxation (1963) 113 CLR 475
Shi v Migration Agents Registration Authority [2008] HCA 31; (2008) 235 CLR 286
Murlan Consulting Pty Ltd v Ku-ring-Gai Council [2009] NSWCA 300; (2009) 170 LGERA 162
Pacific Cinemas (Canberra) Pty Ltd v The Administrative Appeals Tribunal (ACT) [1999] ACTSC 15
Stollery v The Greyhound Racing Control Board [1972] HCA 53; (1972) 128 CLR 509The Queen v Cavit; Ex parte Rosenfield (1985) 73 FLR 385
REASONS FOR DECISION
Justice Downes, President
SUMMARY
The respondent has applied, after the substantive hearing of this matter and after the Tribunal has given substantial reasons for disposition of the matter, for one of the members of the Tribunal, a scientist and lawyer, Dr Teresa Schafer, to recuse herself from the further hearing. The ground is apprehended bias and the sole basis is that in her role as a lawyer Dr Schafer has represented clients in dealings with the Therapeutic Goods Administration (TGA) which is a Commonwealth agency within the portfolio of the Minister for Health and Ageing which has been associated with the decision-making under review in the proceedings. In this role Dr Schafer has made submissions on behalf of clients to the TGA. Some of these submissions have criticised the conduct of the TGA. I have decided that this is not a basis upon which Dr Schafer should recuse herself, because there is no basis for finding that a fair-minded lay observer might reasonably apprehend that Dr Schafer might not bring an impartial and unprejudiced mind to the resolution of this matter.
INTRODUCTION
Dr Teresa Schafer is a scientist with a PhD in organic chemistry and considerable experience in the pharmaceutical industry, particularly in regulation. She is also a lawyer. Dr Schafer is a part-time member of the Administrative Appeals Tribunal. She has been a member for nearly 6 years. Throughout that period she has heard cases involving regulation of the pharmaceutical industry. She is particularly well qualified for this role.
Dr Schafer is also a partner in a legal firm. As one would expect with someone of her expertise, she represents pharmaceutical companies from time to time in negotiations with the TGA, which is the principal Commonwealth Government agency dealing with regulation of the pharmaceutical industry.
On 25 September 2008 Ego Pharmaceuticals Pty Ltd applied to the Tribunal for review of a decision of the TGA refusing to include on the Australian Register of Therapeutic Goods a product called Zatamil to be applied topically as an ointment, a lotion and a hydrogel for the treatment of dermatitis and other skin conditions.
Dr Schafer and I constituted the Tribunal on 10 September 2009 for the hearing of an interlocutory application. We again constituted the Tribunal for the hearing of the substantive matter from 12 to 15 and on 20 April 2010. This hearing resulted in our publishing substantial reasons on 26 October 2010 which required the parties to be given the opportunity to put further submissions. On 22 November 2010, having received the submissions, we remitted the matter for reconsideration after Ego had first had the opportunity to conduct further testing. The testing involved the repetition of a vasoconstrictor assay (VCA). In our reasons for decision of 26 October 2010 we said:
4.The evidence does not presently satisfy us as to these matters to the requisite degree, although we are inclined to think that the products are both safe and efficacious. There is no issue as to their quality. We will hear the parties further on how the matter should proceed.
…
150.It follows that we cannot now approve the Zatamil products for registration. We consider, however, that if satisfactory VCAs are conducted in accordance with the VCA Guidance there would then be no reason why they should not all be registered.
Ego carried out the further testing. The remittal allowed 56 days for reconsideration after Ego lodged the results of the further testing. No decision was made within that period, which had the effect that the proceeding resumed before the Tribunal.
On the matter coming before the Tribunal for further directions on 9 December 2011, and without any prior notice, the respondent sought to make application for Dr Schafer not to take any further part in the proceedings because of apprehended bias. The application did not then proceed but I continued alone to hear the application for directions. I conducted a further telephone directions hearing on 15 December 2011. On both occasions directions were given. The matter has now been reconstituted by both Dr Schafer and myself to enable the apprehended bias application to be determined.
APPREHENDED BIAS CLAIMED
The case of apprehension of bias is said to arise from correspondence between Dr Schafer and the TGA relating to clients which Dr Schafer represents as a solicitor. It is said that submissions made by Dr Schafer on behalf of clients demonstrate that a fair-minded lay observer might reasonably apprehend that Dr Schafer might not bring an impartial and unprejudiced mind to the resolution of the proceedings. Two categories of apprehended bias are relied upon, namely, interest in the outcome and interest by association.
This is quite an unusual application. The respondent making this application is the Commonwealth Minister for Health and Ageing. The Tribunal is, of course, a statutory Tribunal exercising the administrative power of the Commonwealth. The Minister, the TGA and the Tribunal all exercise the administrative power of the Commonwealth. When the Tribunal makes a decision on review of a decision of a Commonwealth agency it exercises the same administrative power of the Commonwealth which the decision-maker whose decision it is reviewing has exercised. Section 43(6) of the Administrative Appeals Tribunal Act 1975 (Cth) provides that a decision of the Tribunal “shall… be deemed to be a decision” of the person whose decision was being reviewed. The closeness of the relationship between the Tribunal and the person whose decision is being reviewed is further emphasised by s 33(1AA) of the Act which requires the “person who made the decision [to] use his or her best endeavours to assist the Tribunal to make its decision…”.
It is unusual, therefore, to find the Commonwealth complaining about the composition of one of its agencies, the Tribunal, which is effectively empowered to make a final decision on behalf of the Commonwealth. As the cases show, it is generally third parties whose rights are affected by the first decision-maker who are likely to complain about the constitution of the final decision-maker.
Before further considering the application it is appropriate to say something about the conduct which the respondent complains about.
It is necessary to begin by noting that no complaint is made about anything to do with these proceedings. Nothing is relied upon from the much that has been said and written in three substantial decisions and the hearings which preceded them.
It can also be noted that the 2010 decisions of the Tribunal disclose much of the thinking of the Tribunal in connection with its review. The reasons of 26 October 2010, particularly the passages set out above, disclosed to the parties the thinking of the Tribunal about how the application should be resolved. Two conclusions follow. First, there is nothing about the conduct of the Tribunal during the main hearing, nor about the tentative conclusion of the Tribunal, which either party considers goes to apprehended bias. Secondly, the decision to make this application must have been made with a reasonably clear understanding of the tendency of the thinking of the Tribunal on the evidence before it at the time of giving its major reasons. That tendency was against the submissions of the respondent.
The conduct relied upon by the respondent is largely confined to written communications drafted by Dr Schafer as a partner of her firm on behalf of clients of the firm. None of this correspondence refers to, or relates to, proceedings in the Tribunal, let alone the present proceedings. What it does is to put the case of clients to the TGA. It does so forcefully, but it never departs from the issue of the correctness of the TGA’s conduct in performance of its statutory obligations. The respondent also relies on some recent correspondence from Dr Schafer’s firm.
From its landmark decisions beginning in the 1970’s, by enacting the Administrative Appeals Tribunal Act 1975 (Cth), the Federal Court of Australia Act 1976 (Cth), the Ombudsman Act 1976 (Cth), the Administrative Decisions (Judicial Review) Act 1977 (Cth), and the Freedom of Information Act 1982 (Cth), until now, including by the recent establishment of the Office of the Australian Information Commissioner, the Commonwealth has shown a resolve to provide the people of Australia with a system to ensure that Australia has an administration which is second to none. It is axiomatic that the Parliament and the Government have recognised that not all Government agencies always make the best decisions, or have the best procedures for making them, although all of them, no doubt, aspire to this. The Administrative Review Council, established by the Administrative Appeals Tribunal Act 1975 (Cth), has as one of its roles to assist in this endeavour. The Administrative Review Council publishes monographs especially to assist Government departments and agencies to improve the quality of their processes and decisions. In the result, it is Commonwealth policy that there should, in Australia, be rights to challenge administrative conduct. These rights have their sources, of course, in the immutable rights to review administrative decisions conferred upon the High Court by the Constitution itself.
In these circumstances it can hardly be surprising to find a solicitor who represents a client dealing with a Commonwealth agency, urging upon the agency the highest quality of decision-making and drawing attention to perceived failures to do so. That would seem to be consistent with Government policy. It is even less surprising that a solicitor, on behalf of a client, should take advantage of rights conferred by the Parliament.
Of course, whether or not such conduct is consistent with Government policy is not to the point. What is to the point is whether “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” (Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337 at 344 [6]). When the test was recently restated in Michael Wilson & Partners v Nicholls (2011) 282 ALR 685 at 692 [31] the requirement for “an impartial mind” was extended to “an impartial and unprejudiced mind”. The court went on to explain how the test should be applied (at 698 [63]):
In Ebner, the plurality pointed out (Ebner at [8]) that application of the apprehension of bias principle requires two steps. First, it requires the identification of what it is said might lead the judge to decide a case other than on its legal and factual merits. And second, there must be an articulation of the logical connection between that matter and the feared deviation from the course of deciding the case on its merits. The plurality in Ebner went on to say (Ebner at [8]) that “[t]he bare assertion that a judge (or juror) has an ‘interest’ in litigation, or an interest in a party to it, will be of no assistance until the nature of the interest, and the asserted connection with the possibility of departure from impartial decision-making, is articulated”.
THE CLAIMS ENUNCIATED
It is accordingly necessary to identify the “logical connection” and the “feared deviation” with respect to each of the grounds, namely “interest in the outcome of the proceeding and interest by association”, which are relied upon. So far as the first is concerned, the respondent’s written submissions assert no more than this:
Dr Schafer is closely associated professionally with a party to the proceedings, namely the TGA, in the sense that she is regularly acting as legal representative of its opponents, and so may be seen to have an interest of an adverse nature in a party to the proceedings.
That statement does not seem to me to satisfy the requirements of the two step approach mandated in Wilson.
The assertion in the respondent’s written submissions relating to the second ground is more specific. It is that:
Dr Schafer might have something to gain, in terms of her practice in representing pharmaceutical companies against the TGA, by reaching a conclusion adverse to the TGA and favourable to Ego.
Even so, the submission does not say what Dr Schafer might have to gain.
I have difficulty in seeing how the labels “interest in the outcome of the proceeding and interest by association” could be attracted in the present case. On any normal meaning of “interest in the outcome” Dr Schafer has none. So far as “interest by association” is concerned, the allegation seems to have more to do with disassociation than association.
The real question, however, seems to me to be whether the Ebner/Wilson apprehension test, as required to be applied by Ebner/Wilson, is satisfied.
The respondent’s allegation under its “association” claim is its most specific enunciation of the apprehension. However, even that requires further elucidation. It was never fully elucidated in argument. It needs to say what it is that Dr Schafer might be thought to gain from deciding the matter adversely to the Minister. Doing the best I can to spell out a possibility, it is that Dr Schafer might decide the case adversely to the respondent so that clients might think that she had some authority over the TGA and seek to retain her. There are, however, immediate problems with this formulation. First, she would never have any actual authority because she would never hear an application for review of a decision relating to a matter in which she has represented the applicant. Secondly, even if there were such a potential apprehension it would come merely from the fact alone that Dr Schafer is a member of the Tribunal and not from any decision she made as a member of the Tribunal. In any event the complaint is not linked to Dr Schafer’s conduct as a member, but her conduct as a legal representative.
Any suggestion that there might be an apprehension that Dr Schafer might decide this matter adversely to the respondent for the purpose of pressuring the respondent to favour her clients is more a potential reflection on the conduct of the TGA which is, of course, itself an administrative decision-matter subject to the same requirements of natural justice or procedural fairness as the Tribunal. Such a claim would also have no connection with the actual conduct of Dr Schafer as a Tribunal member but would, again, flow merely from her membership of the Tribunal. More importantly, what Dr Schafer is alleged to have been doing is forcefully putting forth the case of her clients in representations to the TGA about the exercise by them of the administrative power of the Commonwealth. No criticism is made of how she decides cases. None of the representations do more than urge the TGA to carry out its obligations properly. To my mind this background would cause the fair-minded lay observer to apprehend that Dr Schafer would bring precisely an impartial and unprejudiced mind to the role of decision-making in the Tribunal because of the importance she obviously attaches to proper administrative decision-making.
If the TGA is concerned that the additional role of Dr Schafer places an added burden on its officers to behave with propriety when dealing with her on behalf of clients, that has nothing to do with any apprehension relating to her decision-making and may even lead to an adverse apprehension relating to the TGA. Administrative decision-makers in the Commonwealth Public Service are constantly required to perform their functions in a way which properly satisfies those to whom they report in the public service – indeed that is a strength of the system. Senior officers must frequently require employees to act in accordance with instructions when the employee might consider it better to act differently. It is not as though there must always be agreement within the TGA. The fair-minded lay observer must even see the bringing of this application, disturbingly, rather as an attempt by the TGA, as a body exercising the administrative power of the Commonwealth, to put pressure on a member of the Tribunal not to fully put the case of clients she represents in her dealings with the TGA as a solicitor.
THE EVIDENCE
On the evidence, Dr Schafer has been dealing with the TGA since at least early 2000. Initially she did so as an officer of a corporation carrying on business in the pharmaceutical industry. Then she did so as a regulatory affairs consultant before becoming a solicitor employed successively by two firms. She is now a partner of the second firm. A bundle of correspondence put before the Tribunal includes correspondence from these periods.
The respondent does not complain about correspondence prior to 1 April 2011. A letter of that date relates, in part, to a topic first addressed in correspondence on 21 December 2010; that is, shortly after the matter was remitted for reconsideration.
Although the correspondence put in evidence by the respondent from the end of 2010 is extensive, surprisingly, there is no correspondence included between May 2006 and December 2010 except four communications in 2009 and one in July 2010. There is much correspondence prior to May 2006. The period for which there is little correspondence roughly begins at the time Dr Schafer became a member of the Tribunal.
The correspondence was put before the Tribunal through an affidavit of Michael Will, the solicitor for the respondent. The affidavit was made on information and belief. It deposes that the documents exhibited to the affidavit are “letters and emails… received by the recipients indicated in… [a] table… on or about the dates that the letters and emails bear”. It does not state that the correspondence is exhaustive or even that it is all the correspondence that could be found, although the respondents written submissions describe the material as “responsive to the Tribunal’s direction… to file all correspondence between Dr Schafer and the TGA”.
The respondent says that the correspondence covers 10 topics as follows:
(1)FOI Request.
(2)Post-marketing and proposed cancellation of registration of a device.
(3)Post-marketing and proposed cancellation of registration of a device.
(4)FOI Request.
(5)Advertising complaint and recommendation by Complaints Resolution Panel.
(6)Objection to TGA publication of AusPAR.
(7)FOI Request.
(8)Supply of therapeutic good not on ARTG.
(9)Approval under s 19A of the Therapeutic Goods Act.
(10)Advertising and regulatory compliance complaint.
(1)FOI Request
This matter related to a proposal by the TGA to cancel the registration on the Australian Register of Therapeutic Goods of a medical device. The request was made on 21 December 2010. It sought in unremarkable terms “access to information about the identity and qualifications of the clinical assessor who reviewed our client’s expert report”. By letter dated 29 March 2011 a decision was communicated “to deny access to the documents as the documents cannot be found and/or do not exist”. The first letter complained of (Dr Schafer’s letter of 1 April 2011) contained the following:
…
It is important that the TGA understands the significance of this FOI decision for our client. In our view, the TGA cannot rely on the assessment by its “expert” as the basis for a proposal to cancel the entries of the Devices from the ARTG, in circumstances where the TGA is unable to provide our client with information which establishes that the expert was appropriately qualified to conduct the assessment in the first place.
In our view, the TGA’s denial of access to the information sought in our FOI request breaches the rules of procedural fairness. Alternatively, in the absence of any information about the qualifications and expertise of the expert, if the TGA proceeds to make a decision which relies on the opinion of that expert and which adversely affects our client, it would constitute a gross failure of due process.
More significantly, if the TGA relies on the opinion of an expert who is not truly expert as the basis for making an adverse decision against our client, it would potentially constitute an abuse of power and misfeasance in public office.
Given the seriousness of this matter, we have been instructed by our client to apply to the Office of the Australian Information Commissioner (OAIC) for a review of the FOI decision. In this regard, we hereby provide notice that it would be inappropriate for the TGA to make any adverse decision in relation the Devices before our client has fully exercised his procedural rights.
…
In a reply dated 26 April 2011 the TGA stated that “TGA staff undertaking clinical evidence assessments in relation to medical devices… have medical qualifications, are experienced in the regulation of medical devices and have expertise and experience in analysing and assessing clinical evidence”.
On 23 May 2011 Dr Schafer wrote to the Information Commissioner. This was a four page letter which outlined the background to the claim. The following parts are complained of:
…
More significantly, if the TGA relies on the opinion of an expert who is not truly expert as the basis for making an adverse decision against our client, it would potentially constitute an abuse of power and misfeasance in public office.
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In our view, it is also absurd to argue that an assessor is appropriately qualified simply because that assessor is medically qualified and has general experience in the regulation of medical devices and assessment of clinical evidence. There are approximately 60,000 medical devices currently included in the ARTG, many with complex technologies, mechanisms of action and covering different therapeutic areas. A sponsor has a right to expect that a clinical assessor has expertise which is specifically relevant to the particular kind of medical device being assessed.
…
We are very concerned that there is evidence that the TGA is obstructing our client’s right to procedural fairness. The TGA’s proposal to cancel the ARTG entries of our client’s products has already seriously affected our client’s business. Given that this proposal was based on the TGA’s clinical assessment report, our client has the right to access information which establishes that the clinical assessor was appropriately qualified to conduct the assessment. We reject any assertion by the TGA that such information cannot be found or does not exist. We also reject any attempts by the TGA to indulge in semantics; if the information we seek exists in a form other than a CV, then the TGA ought to provide access to that information. To avoid ambiguity, our FOI application requested:
“[a]ccess to information about the identity and qualifications of the clinical assessor who reviewed our client’s expert report. Specifically, we seek a copy of the clinical assessor’s curriculum vitae and, in particular, information about the clinical assessor’s expertise and experience in the field of [redacted]” (our emphasis).
…
In addition, we request that the conduct of the TGA in relation to this FOI request be investigated. In our view, notwithstanding the ongoing procedural issues which our client has encountered with the TGA, the denial of access to the information requested in our FOI application (on behalf of our client) is a gross denial of our client’s right to procedural fairness.
…
The fair-minded lay observer might not see this correspondence as reflecting open government and may even respond positively to the statement: “We also reject any attempts by the TGA to indulge in semantics; if the information we seek exists in a form other than a CV, then the TGA ought to provide access to that information”.
(2)Post-Marketing and proposed cancellation of registration of a device
This correspondence relates to the same underlying matter as the first complaint. The letter of 1 April 2011 is again relied upon. The next letter relied upon is dated 19 May 2011. It continues to relate to the refusal of the TGA to disclose “the identity and qualifications of the clinical assessor”. It asserts that it is “absurd to argue that an assessor is appropriately qualified simply on the basis of general experience in the regulation of medical devices and assessment of clinical evidence”. The letter went on:
…
In this regard, it is patently clear from the clinical assessment report that the clinical assessor assigned to review our client’s clinical expert report had limited, if any, expertise in the field of [redacted]. Indeed, you ought to appreciate the seriousness of our concerns as to whether the clinical assessor had any relevant expertise whatsoever, given that 50% of the substantive part of the clinical assessment report was entirely plagiarised from Wikipedia.
Significantly, whilst the FOI decision denied access to the CV of the clinical assessor, there is no justification for the TGA to deny access to the identity of the clinical assessor, which would at least have allowed us to make our own enquiries as to whether the clinical assessor was appropriately qualified and truly “expert”. In this regard, when we questioned the FOI decision maker as to why we were not informed as to the identity of the clinical assessor, his response was: “Those were my instructions”. According to the FOI decision maker, those instructions came from the “Principal Legal Officer”.
We are very concerned that there is evidence that the TGA is obstructing our client’s right to procedural fairness. The TGA’s proposal to cancel the ARTG entries of our client’s products has already seriously affected our client’s business. Given that the TGA’s proposal is based on the TGA’s clinical assessment report, our client has the right to establish that the clinical assessor was appropriately qualified to conduct the assessment. It is on this basis that we have been instructed to pursue this matter further.
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The allegation relating to Wikipedia was subsequently admitted by the TGA in a letter dated 9 June 2011.
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I have now had an opportunity to look into the matter and the relevant clinical assessment report. The relevant appendix, which did not form part of the clinical assessment itself, was provided for information purposes only, which is consistent with the usual use of attachments and appendices in scientific publications and assessment reports. However, I can confirm that the assessor included, largely unedited, an unattributed and unreferenced extract from Wikipedia about the [redacted] in the appendix.
I am not the TGA officer responsible for making decisions about the medical devices in relation to which the report was prepared. I am not therefore in a position to comment on the assessment report itself. However, your client can be assured that the TGA is taking steps to ensure that relevant staff are aware of their responsibilities in conducting evaluation assessments, including the use of appropriate sources of information and appropriate attribution and referencing.
Thank you for bringing this matter to my attention.
…
Ten further pieces of correspondence on the topic seem unexceptionable and even friendly. For example, the last four communications we have been supplied with are as follows:
Dear Dr Schafer
please find attached a proposed agenda for our upcoming meeting. Please let me know if you wish to add to it.
Yours sincerely
Dr Larry Kelly
Coordinator, Monitoring & Compliance Group
Therapeutic Goods Administration.
Dear Dr Kelly
Thank you for the proposed agenda for the meeting with my client, [redacted] which was attached to your email below. We are happy with the agenda, and have no further additions or changes.
Yours sincerely
Teresa Schafer
Dear Teresa
Just a quick email to let you know that Larry asked me to advise that Ms Horner (Philippa) is not able to make the meeting on 14/9 at 10am. Larry said he is happy to reschedule if you wish, or go ahead without her. Please advise what you would like to do.
Regards
Fay
for Dr Larry Kelly
Coordinator, Monitoring & Compliance Group
Therapeutic Goods Administration
Thanks Fay,
We’re happy to proceed with the meeting just with Larry
Kind regards
Teresa
(3)Post-marketing and proposed cancellation of registration of a device
The material before us contains eight pieces of correspondence relating to a possible registration cancellation preceding a communication from Dr Schafer on 11 August 2011 which contained the following:
… Having now represented a number of clients in relation to the post-market review of medical devices, we are particularly concerned with inconsistent decision-making by the TGA and unreasonable requests to provide information which has already been provided to different officers of the TGA.
…
On 29 September 2011 Dr Schafer wrote this:
…
Before we respond specifically to Dr Cook’s proposal to cancel the Devices, we state at the outset that we have serious concerns about the manner in which the information and clinical evidence which our client has submitted, and which we have subsequently submitted on our client’s behalf, was reviewed by the Clinical Assessor and, particularly, with the quality of that review. …
Given that our client’s commercial interests in Australia will be destroyed if the TGA proceeds to cancel the Devices from the ARTG, our client has a fundamental right to expect that the TGA will undertake a thorough and objective scientific review of all of the clinical and scientific evidence before a proposal or decision to cancel the Devices is made. In this regard, TGA is placed on notice that our client reserves all of its rights to ensure that its interests are protected.
…
We are also concerned that the Clinical Assessor appears to have little understanding of the regulatory and procedural background to this case and, particularly, previous correspondence with TGA in relation to the Devices. In this regard, we have included in Attachment 1 our responses to specific comments made by the Clinical Assessor in relation to [redacted] clinical evidence report and our client’s compliance with TGA’s requirements. Our responses highlight a serious failure by TGA to understand the regulatory history relating to the Devices, and the Clinical Assessor’s lack of understanding of the scientific data and physiological mechanisms behind the treatment of [redacted]
…
Our client is entitled to expect that the clinical and scientific evidence we have submitted on their behalf will be thoroughly and objectively reviewed in accordance with their procedural rights. Properly reviewed, the clinical evidence, when considered as a whole, provides strong support for the safety and performance of the Devices in the treatment of [redacted].
We look forward to TGA’s review of the clinical evidence, and to receiving confirmation in due course that the clinical evidence supports the safety and performance of the Devices for their intended purpose.
…
These are parts of a long letter which have particularly attracted criticism by the respondent. The correspondence in evidence on this topic, however, contains 28 communications only five of which were subject to reference during the hearing. I have set out extracts from the two communications upon which greatest emphasis was placed.
(4)FOI Request
Three communications relating to this request are in evidence. Two of them were not the subject of specific reference. The third, an email dated 29 June 2011, contained this, which is relied upon:
…
We hereby seek access to the complete original complaint document submitted to the CRP (including the identity of the complainant) in order to ascertain whether the complainant has any association with any of the following regulatory authorities, the CRP, the Therapeutic Goods Administration (TGA) the Complementary Healthcare Council (CHC), Australian Self-Medication Industry or any other regulatory authority which may be involved in the review and approval of advertising materials, or the review and determination of advertising complaints. In our view, there is reasonable evidence from the complaint that the complainant may have some association with one or more of the aforementioned regulatory authorities, because the complainant made an unequivocal statement that our client’s advertisement was “unapproved”. In our view, it would not be possible for the complainant to know that the subject advertisement was unapproved unless the complainant had access to information about advertising approvals.
…
(5)Advertising complaint and recommendation by Complaints Resolution Panel
Nothing was particularly relied upon in the four communications which comprise the evidence on this topic. A letter of 29 July 2011 contained the following:
…
12.We have written you previously regarding our concerns about the CRP’s administration of the complaints handling procedure. Our client takes their obligations very seriously and took immediate action following the CRP’s determination to ensure that all of their advertising material complies with the Code. In this regard, it is unacceptable to our client that they are now having to revisit this complaint, when the matter should have clearly been concluded 6 months ago.
…
(6)Objection to TGA publication of AusPAR
There are four communications under this heading. They related to a complaint about a proposal by the TGA to publicly release a report on a drug. Only one communication was referred to in the hearing. A letter dated 20 September 2011 from Dr Schafer suggests that the TGA has “misunderstood our client’s objection”. It goes on to “request a written undertaking that if an internal review is conducted and the internal reviewer decides that publication of the [redacted] study should still proceed, we are provided with 5 business days’ notice before [the report] is published”.
(7)FOI Request
Only one letter on this matter is included in the evidence. It was not referred to in the submissions. Perhaps it was relied upon merely because it contained a request under the Freedom of Information Act 1982 (Cth).
(8)Supply of therapeutic good not on ARTG
Four communications are in evidence. Parts of two of the letters were referred to in the hearing. The first was a letter of 6 October 2011 which contained the following:
…
3.Before we address the issues raised in your correspondence, we would like to note that, in our view, the tone and content of your correspondence was unnecessarily severe and has caused extreme distress to our client. This is despite, we are instructed, our client explaining to you in the telephone conversation on 29 September 2011 that they had no intention of advertising, importing and supplying the [redacted] in Australia for “human therapeutic use”, and were unaware that their product is classified as a “medical device”.
…
14.Our client is now aware of their obligations with respect to the advertising, import and supply of the [redacted]. However, despite our client’s previous lack of knowledge about the boundaries between an ordinary consumer good and a therapeutic good, there is no justification for sending correspondence of such severity to our client in the first instance. In our view, such correspondence would only be warranted if the TGA established an intentional and ongoing disregard of the legislation and regulatory requirements by our client. This is clearly not the case, and you will be aware that following notification of the CRP complaint relating to the advertising of the [redacted] our client acted immediately to address the issues. You will also be aware from the telephone discussions with our client on 29 September 2011 and 30 September 2011 that our client has been very concerned to ensure that any legitimate issues relating to the [redacted] are promptly and appropriately addressed.
…
The second was an email dated 2 November 2011 which contained the following:
…
We have previously raised concerns about instances where co-ordination and communication within the TGA has been somewhat lacking. This latest instance has caused renewed distress to our client, in circumstances where our client has already addressed the issues which were raised in the TGA’s previous correspondence. The reference to possible criminal offences in Dr Wise’s letter is particularly concerning.
…
(9)Approval under s 19A of the Therapeutic Goods Act
Fourteen communications are included in the evidence. Only one was referred to in submissions. It contained this sentence:
It is important to emphasise that our letter placed the Secretary and the TGA clearly on notice that commercial supplies of [redacted] are currently available, and have been available at all material times”.
(10)Advertising and regulatory compliance complaint
Four communications are included in the evidence. One was referred to. It was a letter dated 27 October 2011 which included the following:
In our view, a number of the representatives made in the broadcast material have real potential to compromise consumer safety and therefore warrant immediate action by the TGA.
The bundle of correspondence tendered by the respondent included 132 communications in chronological order. They were not arranged by reference to subject matter. When we were taken to the correspondence during the hearing, the course adopted was simply to read passages, including the passages set out above. No attempt was made to put these passages in context or to explain what matter was being addressed. Emphasis was placed on the phrasing of the communications from Dr Schafer without examining the context in which they were used. That was left to us to discover, to the extent we thought it significant. The context in which words are written is always important. This caused me to ask the respondent to classify the correspondence, about which complaint was made, into topics and to identify the parts of the correspondence on which reliance was placed. This led to the filing of a document, after the hearing concluded, identifying the ten topics I have referred to and specifying the parts of the correspondence relied upon as relevant to each.
To some extent I have thought it necessary above to say something about the context of the matters complained of, but I have largely left the analysis of the text of the letters in accordance with the way the respondent’s submissions were put.
There are 54 pieces of correspondence prior to 1 April 2011. Most of them are from the TGA. It is not clear how complete the evidence is. I note, however, that the correspondence includes a letter dated 22 July 2009 from the first firm of solicitors Dr Schafer worked for which contains the following:
Given the nature of the change, irrespective of the assertion in your letter that the change in [redacted] supplier in 2006 was incorrectly handled by the TGA, from [redacted] and our own interpretation of the Guideline, there is no reasonable basis to conclude that the change met the criteria of a Category A change, that is, that it had a significant potential to impact on the quality and safety of the product….
Further, in our view, the explanation in your letter that the change in [redacted] in 2006 was incorrectly handled by the TGA and should have been evaluated as a Category A change only serves to highlight our client’s concerns about the procedural irregularities and inconsistences in the TGA’s evaluation of its TMF.
Further, the correspondence includes a letter dated 21 February 2000 from Dr Schafer in her capacity as a consultant, prior to joining a law firm, which contains the following:
There are some issues of great concern regarding the TGA’s actions:
·The Sponsor was not contacted by the TGA regarding their intention to split the notification into two notifications. The Sponsor received an additional invoice for $500, with no accompanying explanation as to what the invoice was for;
·When the invoice was questioned by our company representative, it took the TGA one week to work out why the invoice was sent;
·The Sponsor can find no justification for splitting the notification into two separate notifications. In particular, the change of address is a common change to all registrations and should not be invoiced twice.
In response to this letter the Head of the Coordination Unit of the Drug Safety & Evaluation Branch apologised for the inconvenience and stated ‘I have... asked that if, in future, we propose for some reason to regroup self-assessable notifications in such a way that it may impose additional costs on sponsors, then the matter should be discussed with the sponsor beforehand’.
These extracts show that going back as far as February 2000 Dr Schafer was strongly representing her client’s interests to the TGA. Yet no application has been made before this and the TGA in a written submission after the hearing on recusal said this:
The respondent is not aware of any evidence of a relevant interest of Dr Schafer’s, that could conflict with the proper performance of her functions in relation to this proceeding, having been acquired by her before 1 April 2011.
THE APPLICABLE PRINCIPLES
There is no doubt that administrative tribunals are subject to the rules of natural justice or procedural fairness. These rules include the bias rule and one of its manifestations, apprehended bias. Nor is there any doubt about the content of the apprehended bias rule or how it should be applied. It is to be observed, however, that the rule was largely developed in a curial setting as the reference to “the judge” in Ebner/Wilson confirms. The application of the rule will, of course, vary according to the statutory context which calls for its consideration and the particular circumstances of each case (see, e.g., British American Tobacco Australia Services Ltd v Laurie (2011) 242 CLR 283 at [133], McGovern v Ku-ring-Gai Council [2008] NSWCA 209; (2008) 72 NSWLR 504). Thus application of the rule in tribunal proceedings will require adaption from its traditional application in a court proceeding (Ebner at [4]).
Before turning to the application of the rule in the present case it is appropriate to look at the statutory context:
(a)The Administrative Appeals Tribunal is not a court. It does not exercise judicial power. It is part of the administration of the Commonwealth. It does not resolve issues in disputes put forward by parties for determination; it makes administrative decisions. These decisions, such as the ultimate decision in the present case, can affect the whole or a large part of the population.
(b)In almost every matter reviewed in the Tribunal the Tribunal is substituted for, or “stands in the shoes of” (Minister for Immigration and Ethnic Affairs v Pochi [1980] FCA 85; (1980) 31 ALR 606 at 671, Liedig v Commissioner of Taxation [1994] FCA 1058; (1994) 50 FCR 461 at 464, Mobil Oil Australia Pty Ltd v Federal Commissioner of Taxation (1963) 113 CLR 475 at 502 per Kitto J, Shi v Migration Agents Registration Authority [2008] HCA 31 at [134]; (2008) 235 CLR 286) a Commonwealth minister, officer, department or agency to make a decision for that minister, officer, department or agency (s 43(6)).
(c)The Parliament has provided for the Tribunal to have diverse membership. In addition to being a lawyer a person is qualified for membership who: (s 7(2))
…
(b)has had experience, for not less than 5 years, at a high level in industry, commerce, public administration, industrial relations, the practice of a profession or the service of a government or of an authority of a government; or
(c)has obtained a degree of a university, or an educational qualification of a similar standing, after studies in the field of law, economics or public administration or some other field considered by the Governor-General to have substantial relevance to the duties of such a member; or
(d)has, in the opinion of the Governor-General, special knowledge or skill in relation to any class of matters in respect of which decisions may be made in the exercise of powers conferred by an enactment, being decisions in respect of which applications may be made to the Tribunal for review.
(d)The Parliament has provided that a member may “be appointed either as a full-time or as a part-time member” (s 6(4)). Although a full-time member requires the consent of the Attorney-General to “engage in paid employment outside the duties of his or her office” this limitation does not apply to part-time members (s 11). The Parliament must be taken to have known that part-time members would undertake other employment for the very reason that their tribunal employment is part-time. It must also be taken to have known that the outside employment of a member appointed because of particular expertise would almost certainly be in a field which also made use of that expertise.
(e)The Parliament has provided that the Tribunal shall be constituted by up to three members (s 21(1)). The persons who comprise the Tribunal may be legal practitioners or persons with education, expertise or experience as set out above. For a long time it has been the practice in the Tribunal, in appropriate cases, for a presiding member to sit with a member with expertise associated with the matter for decision. Where there is disagreement between the members of a tribunal so constituted “the view of the presiding member prevails” (s 42(1)).
I see no reason why the fair-minded lay observer would not be aware of all these factors. They are fundamental to the role and function of a member of the Administrative Appeals Tribunal.
CONSIDERATION
The task I must undertake is to consider whether the fair-minded lay observer might reasonably apprehend that Dr Schafer might not bring an impartial and unprejudiced mind to the resolution of the question that Dr Schafer is required to contribute to deciding. I need to identify what it is said might lead her to decide the case other than on its legal and factual merits. I must articulate the logical connection between that matter and the feared deviation from the course of deciding the case on its merits (Ebner/Wilson).
I must say at the outset that I cannot see that any case of apprehended bias is made out in the present case. The application before the Tribunal is misconceived. However high the bar is set I can see no basis for any conclusion that Dr Schafer might not bring an impartial or unprejudiced mind to the resolution of this case. The fair-minded lay observer would be of a like mind. He or she would think that Dr Schafer was doing her job representing clients in connection with matters of administration before the TGA. As part of that process she urged upon the TGA a high standard of propriety in their performance. She would bring such a high standard to the determination of matters in the Tribunal concerning the TGA. The fair-minded lay observer would see Dr Schafer’s roles as quite separate and with no prospect that the performance of one would influence the performance of the other in any untoward sense.
In the absence of any sign or suggestion that Dr Schafer, in proceedings before her in the Tribunal, had given any cause for concern as to whether she might not bring an impartial and unprejudiced mind to their determination, including in this matter, the fair-minded lay observer would scoff at any suggestion that she might make findings against the TGA in her role as a member for the purpose of currying favour with potential clients. As I have said, Dr Schafer would never sit on an application for review of a matter in which she has represented the applicant and, in any event, this claim could equally be made of any like member of the Tribunal, including a member who had written to the TGA in the most polite of terms.
What seems to be behind the respondent’s case is an idea that because Dr Schafer had put the case of her clients strongly in a number of instances (one does not really know with what success), the fair-minded lay observer might think she will decide cases which come before her without an impartial and unprejudiced mind as a kind of pay back. I cannot see any “logical connection”, to use the words of the High Court, between the two. One has to attribute base, and frankly, illogical motives to someone when there is no basis for doing this. The polite legal representative might be as likely to undertake this step. To the extent to which it is said that the fair-minded lay observer might consider the motive to be to cause the TGA to consider her applications more favourably I can again not see the basis for such a suggestion. Why would wrong decisions pressure the TGA to give more favourable treatment to Dr Schafer? This whole unpalatable argument depends on the fair-minded lay observer attributing the basest of motives to everyone, including the TGA, and the fair-minded lay observer would not do that.
A theme of the respondent’s case was to lay emphasis on what were called the accusations of Dr Schafer. These were said to include her references to “abuse of power” and “misfeasance in public office”. I will not repeat them all here. The material is set out above. Dr Schafer was not engaged in a process of accusation or allegation. It was not a case of accuser and accused. In every case Dr Schafer was representing a client whose rights could be significantly affected by administrative decisions made by the TGA. The TGA had a duty to make the right decision in every case. Dr Schafer had a duty to her client to put matters to the TGA on behalf of her client which might lead to a decision favourable to her client. This is a regular part of the exercise of the administrative power of the Commonwealth. It is not an adversarial battle, because the decision-maker has all the power. That Dr Schafer put her case strongly, if she did and as she was entitled to do, does not change the underlying nature of the matter. As I have said, Dr Schafer was only doing what the Commonwealth administrative law system permits and even encourages.
DOCTRINE OF NECESSITY
The respondent put submissions that the doctrine of necessity, which permits a decision-maker to continue in that role, notwithstanding the presence of a perception of bias, when there is no alternative, does not apply in this case. I agree. Nevertheless, some of the facts I have outlined above as affecting apprehended bias in the Tribunal, such as the role of expert and part-time members, raise some considerations which are akin to, although falling short of, considerations of necessity. However, my assessment of the state of mind of the fair-minded lay observer does not depend upon taking any account of the doctrine of necessity.
It should be mentioned, however, that if this application had succeeded the Tribunal might have been deprived of access to expert decision-making by Dr Schafer in virtually all matters involving the TGA. A conclusion adverse to Dr Schafer’s future involvement would also have had significant ramifications throughout the Tribunal. The Tribunal relies heavily on part-time experts who also work outside the Tribunal in their expert disciplines. This brings some of them in contact with Commonwealth decision-makers and parties to proceedings in the Tribunal. It would be unfortunate for the quality of decision-making in the Tribunal, and contrary to the obvious intention of the Parliament, if the Tribunal should be denied access to a wide range of experts in its decision-making.
THE AUTHORITIES
The respondent accepted that there were few decided cases which were parallel to the circumstances of this case. This is because the bulk of cases relate to the conduct of the decision-maker in connection with the subject matter for decision or a similar subject matter (interest in the outcome) or to an association between the decision-maker and one of the parties (interest by association).
In the former category, the respondent relied upon The Queen v Cavit; Ex parte Rosenfield (1985) 73 FLR 385 which related to a crown prosecutor who took leave without pay to accept appointment as an acting magistrate and Kempe v Bailey (2003) 174 FLR 460 which related to a special magistrate who technically retained his position as a Commonwealth prosecutor. It also relied upon Stollery v The Greyhound Racing Control Board (1972) 128 CLR 509 where a Board member had complained about a greyhound owner’s possible attempt to bribe him. In the magistrate’s cases, the magistrate continued, at least theoretically, as a prosecutor who might notionally bring proceedings before the magistrate’s court. There is no parallel here. No complaint is made that Dr Schafer appears before the tribunal in TGA matters. Even less is it said that she appears for the TGA, which is the parallel. A similar comment can be made about Pacific Cinemas (Canberra) Pty Ltd v The Administrative Appeals Tribunal (ACT) [1999] ACTSC 15 in which the ACT Tribunal President had been the solicitor on the record for a party, in the matter before the Tribunal, although he had taken no active role. Finally, the complaint in this case is not a complaint by the applicant, which would also be the parallel. This case is very far removed from Stollery. The parallel there would be if Dr Schafer were in some way involved within the TGA in the decision-making under review.
In the second category, the respondent relied upon Murlan Consulting Pty Ltd v Ku-ring-Gai Council (2009) 170 LGERA 162 and, obliquely, on Forge v Australian Securities and Investments Commission (2006) 228 CLR 45. However, Murlan supports the proposition that any association should be positive. An Acting Commissioner of the Land and Environment Court was collaborating with the respondent Council in a matter. The passage relied upon in Forge (at [97], [98]) does no more than contemplate a question arising if legal practitioners were appointed temporarily to a court. The discussion is remote from the present case because it concerned judicial power and particularly, the Court’s concern that such a case might challenge the requirement that a court “be said to be composed of full-time judges having security of tenure until a fixed retirement age.” The Tribunal, which is not a court, is comprised of members virtually all of whom, by statute, fail to satisfy this test. The concern addressed by the court was the perception that such a temporary judge might so act as to enhance the prospect of permanent appointment. The reference to “adverse decision… in matters to which those to whom that person would look for work on resumption of practice…” was really an aside and was, in any event, directed to the effect of the acting judge doing his or her duty without any suggestion that apprehended bias might arise.
RECENT CORRESPONDENCE
At the time the question of apprehended bias was first raised in the Tribunal, without notice, the respondent had prepared an affidavit with the correspondence relied upon exhibited to it. This correspondence was not redacted and identified Dr Schafer’s clients and their products as well as the matter with which they were concerned. This information is, of course, highly confidential. After that hearing Dr Schafer’s firm, but not Dr Schafer, wrote to the respondents legal representatives asserting their clients’ interests and seeking undertakings of confidentiality. This correspondence was also relied upon by the respondent in this application.
I can see no basis upon which this correspondence would have any effect on the opinion of the fair-minded lay observer. Dr Schafer’s firm was only doing what it was bound to do. No lay observer would contemplate the possibility that this might affect at all whether Dr Schafer would bring an impartial or unprejudiced mind to the determination of the matter. It did not at all add to any interest or association which, contrary to my finding, she might otherwise have had. It is true that one of the letters refers to the firm acting for Dr Schafer when, in reality, it was the clients the firm was representing. Reliance on this matter is elevating form over substance in the extreme.
THE ADMINISTRATIVE APPEALS TRIBUNAL ACT
The respondent also relies, in the alternative to its common law claim, on a claim under s 14 of the Administrative Appeals Tribunal Act. That section arises for consideration where “a member… has or acquires any interest, pecuniary or otherwise, that could conflict with the proper performance of his or her function in relation to the proceedings”. Such an interest must be declared and the member cannot continue without the consent of all parties.
The respondent has informed the Tribunal that it does not submit that the existing decisions of the Tribunal are invalid by reason of any asserted non-compliance with s 14.
For the reasons I have given, no declarable interest arises in the present case. Dr Schafer has no interest which could conflict as specified. I say this applying the different, but related, test in s 14, to the facts and circumstances I have identified above.
CONCLUSION
For all these reasons the application for Dr Schafer to recuse herself in this matter must be dismissed.
REASONS FOR DECISION
Dr T Schafer, Member
I agree with his Honour’s decision and the reasons for his decision. My duties as a member of this Tribunal are distinct from my duties in representing clients as a partner in a law firm. The experience and expertise I have acquired within the pharmaceutical industry as a scientist and as a legal practitioner are precisely what qualifies me as an expert legal member of the Tribunal. In this regard, the proposition that part-time members may be disqualified from the Tribunal because they continue to practise in the same specialist area which has qualified them for appointment in the first place is unsustainable. It would undoubtedly make it difficult to attract expert members to the Tribunal, which is contrary to the intention of Parliament.
In relation to the respondent’s application for my recusal, no evidence was put forward by the respondent that any of the prior decisions relating to these proceedings have not been made with an impartial and unprejudiced mind. Instead, the respondent relies on the proposition that my contemporary representation of pharmaceutical clients in regulatory matters which are external to the Tribunal might cause the fair-minded lay observer to apprehend that I might not bring an impartial and unprejudiced mind to proceedings in the Tribunal, even though such proceedings will only ever involve parties with which I have had no prior relationship. This would appear to me to be a flimsy basis to support an application for my recusal.
I certify that the preceding fifty five (55) paragraphs are a true copy of the reasons for the decision herein of the Honourable Justice Downes, President in paragraphs one (1) to fifty three (53) and Dr Teresa Schafer, Member in paragraphs fifty four (54) to fifty five (55).
........[sgd]................................................................
Associate
Dated 24 February 2012
Date of hearing 13 February 2012 Date final submissions received 15 February 2012 Counsel for the Applicant G Furness SC Solicitors for the Applicant Thompson Eslick Solicitors Counsel for the Respondent M Allars Solicitors for the Respondent HWL Ebsworth Lawyers
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