Rust-Oleum Australia Pty Ltd and Australian Pesticides and Veterinary Medicines Authority - [2017] AATA 2180

Rust-Oleum Australia Pty Ltd and Australian Pesticides and Veterinary Medicines Authority [2017] AATA 2180 (10 November 2017)

Division:General Division
File Number(s): 2016/5503
Re:Rust-Oleum Australia Pty Ltd
APPLICANT

AndAustralian Pesticides and Veterinary Medicines Authority
RESPONDENT

DECISION

Tribunal:Deputy President S A Forgie
Date:10 November 2017
Place:Melbourne

The Tribunal decides:

to affirm the decision of the respondent dated 10 October 2016.

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

Deputy President S A Forgie

Catchwords

AGRICULTURAL AND VETERINARY CHEMICALS – notice to recall product – agricultural chemical product - whether mould inhibitor - whether mould killer – whether disinfectant – residential use not domestic use - decision affirmed

PRACTICE AND PROCEDURE – whether decision could be reviewed on the basis that the product had a label different from that which it currently has and with which it is distributed

Legislation

Acts Interpretation Act 1901 s 15AA

Administrative Appeals Tribunal Act 1975 ss 25, 37, 41, 43

Administrative Decisions (Judicial Review) Act 1977

Agricultural and Veterinary Chemicals Act 1994 ss 4, 12

Agricultural and Veterinary Chemicals Code Act 1994 ss 1, 3, 4, 6; and Agricultural and Veterinary Chemicals Code Schedule ss 1, 3, 4, 9, 9A, 10, 14, 15, 16, 17, 18, 19, 20, 21, 23, 72, 73, 74, 75, 76, 77, 78, 79, 79B, 80, 81, 84, 101, 167

Australian Securities and Investments Commission Act 2001 s 93AA

Corporations Act 2001 ss 829, 830, 831, 998

Ombudsman Act 1976

Therapeutic Goods Act 1989 s 52D

Agricultural and Veterinary Chemicals Code Regulations 1995 rr 7; and Part 3 of Sch 3

Poisons Standard November 2016; and Standard for the Uniform Scheduling of Medicines and Poisons No. 15 Sch 6

Cases

Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (Northern Territory) [2009] HCA 41; (2009) 239 CLR 27; 260 ALR 1

Australian Securities and Investments Commission v Donald [2003] FCAFC 318; (2003) 136 FCR 7; 203 ALR 566; 38 AAR 288; 77 ALD 449

Cabell v Markham (1945) 148 F(2d) 737

CIC Insurance Ltd v Bankstown Football Club Ltd [1997] HCA 2; (1997) 187 CLR 384; (1997) 141 ALR 618

Freeman v Secretary, Department of Social Security [1988] FCA 294; (1988) 19 FCR 342; 87 ALR 506; 15 ALD 671; 9 AAR 255

Hospital Benefit Fund of Western Australia Inc v Minister for Health, Housing and Community Services (1992) 39 FCR 225; 111 ALR 1; 28 ALD 50; 16 AAR 566

Lansell House Pty Ltd v Federal Commissioner of Taxation [2010] FCA 329; (2010) ATC 20-173

Lansell House Pty Ltd v Commissioner of Taxation [2011] FCAFC 6; 190 FCR 354

Lend Lease Real Estate Investments Ltd & v GPT RE Ltd [2006] NSWCA 207

Perpetual Trustee Company (Canberra) Limited v Commissioner of Australian Capital Territory Revenue [1994] FCA 1150; (1994) 50 FCR 405; 28 ATR 307; 94 ATC 4403

Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355; 72 ALJR 841; 153 ALR 490

Re Donald and Australian Securities and Investments Commission [2001] AATA 622; (2001) 64 ALD 717

Re Rust-Oleum Australia Pty Ltd and Australian Pesticides & Veterinary Medicines Authority [2017] AATA 298

Residual Assco Group Ltd v Spalvins [2000] HCA 33; (2000) 202 CLR 629

Sea Shepherd Australia Limited v Commissioner of Taxation [2013] FCAFC 68; (2013) 212 FCR 252

Shi v Migration Agents Registration Authority [2008] HCA 31; (2008) 235 CLR 286; 248 ALR 390; 48 AAR 345; 103 ALD 467

Thiess v Collector of Customs [2014] HCA 12; (2014) 250 CLR 664; 306 ALR 594

Secondary Materials

Chambers 21st Century Dictionary (1999, reprinted 2004)

REASONS FOR DECISION

Deputy President S A Forgie

On 20 January 2017, Rust-Oleum Australia Pty Ltd (Rust-Oleum) applied for review of a decision made by a delegate of the Australian Pesticides and Veterinary Medical Authority (APVMA) dated 10 October 2016 to issue a compulsory notice (Notice) under s 101 of the Agricultural and Veterinary Chemicals Code (Code), which is a Schedule to the Agricultural and Veterinary Chemicals Code Act 1994 (AVCC Act).[1] The Notice required Rust-Oleum to stop the supply of a product known as Zinsser Mould Stop Primer (ZMSP) immediately and, by no later than 24 October 2016, to prepare and issue a letter to all of its distributors and retailers who have, or have had, possession or custody of stocks of the product in Australia, advising that ZMSP is subject to a notice under s 101 of the Code and requesting it to be returned to Rust-Oleum.[2] It also required Rust-Oleum to report on its actions to comply with the Notice if asked by the APVMA to do so.
[1] The Code is the Agvet Code of the participating Territories as defined in the Agricultural and Veterinary Chemicals Act 1994; ss 4 and 12 and see also AVCC Act; s 3.
[2] Documents lodged under s 37 of the Administrative Appeals Tribunal Act 1975 (T documents); T18 at 228-230

On 21 October 2016, I stayed the operation or implementation of the APVMA’s decision under s 41 of the Administrative Appeals Tribunal Act 1975 (AAT Act) until the Tribunal heard and determined Rust Oleum’s application for review. On 9 March 2017, I set aside my earlier decision under s 41 of the AAT Act and substituted a decision that, in essence, operated as a partial stay of the APVMA’s decision.[3] The effect of that stay was that Rust-Oleum continued to be prevented from distributing ZMSP in Australia but was not required to recover ZMSP it had already distributed to retailers and suppliers in Australia.
[3] In Re Rust-Oleum Australia Pty Ltd and Australian Pesticides & Veterinary Medicines Authority [2017] AATA 298, I ordered that:
(a)except in relation to the description of the product in paragraph 1 and paragraph 3 of the Notice dated 10 October 2016 and given by the APVMA to Rust-Oleum, the operation or implementation of the decision of the APVMA dated 10 October 2016 be stayed until the Tribunal hears and determines the application for review or until further order; and
(b)in so far as it describes the product the operation or implementation of paragraph 1 of the Notice dated 10 October 2016 and given by the APVMA to Rust-Oleum and paragraph 3 of that same Notice are NOT stayed.

The APVMA had issued the Notice on the basis that it considered ZMSP to be an “agricultural chemical product” as defined by s 4 of the Code. Therefore ZMSP should have been registered as an agricultural chemical product under the Code. Rust-Oleum contends that ZMSP is not an agricultural chemical product under the Code because it is a substance, or mixture of substances, declared not to be an “agricultural chemical product” under Part 3 of Schedule 3 to the Agricultural and Veterinary Chemicals Code Regulations 1995 (AVCC Regulations). I have decided that ZMSP is an agricultural chemical product and is not excluded from that description by reference to Part 3 of Schedule 3. Therefore, I have decided to affirm the AVMPA’s decision.

BACKGROUND
The Product

The Product is a water-based paint primer manufactured in the United States of America and designed for interior or exterior use. Rust-Oleum distributes ZMSP to approximately 400 suppliers and retailers, including Bunnings Warehouse, in Australia. The Product is supplied in 1 litre, 3.78 litre and 10 litre containers. The label fixed to each container shows general statements on what would be the front of a container and further information in small print on the back.

On the front it bears the word “Poison” and a warning to keep ZMSP out of reach of children and to read the safety directions before opening or using. As well as showing the litres in the container, that it is for interior or exterior use and is water-based, white and tintable, the label shows pictures of a surface before and after the use of ZMSP. At the top of the picture of the surface before use are the words: “Fungicidal Protective Coating”. The remainder of what would be front of the label states that it:
“Kills Existing Mould, Mildew
and Odour Causing Bacteria
Paint directly over existing mould, mildew, odour causing bacteria and any other fungal organisms
Binds to chalky surfaces, masonry & metal
Great for use under wallcoverings
Household Grade Disinfectant
This contains 4,5-Dichloro-2-N-octyl-4-isothiazolin 1.23 g/L”

The small print on the label states that ZMSP:
“… is a water-based fungicidal protective coating that can be painted over and kill existing mould, mildew and odour causing bacteria and any other fungal organisms. The Mould Stop Primer contains an antimocrobial to prevent the growth of mould, mildew and other fungal organisms on the paint film. Additional information is listed in the safety data sheet. The Mould Stop Primer also aides in covering residual microbiological and fungal stains. See Product Data and Safety Data sheet before application at Mould Stop Primer is for use on non-porous interior and exterior, residential attics, basements, window frames, bathrooms, wall cavities, baseboards, sub-floors and table tops. Mould Stop Primer can be used with any top coat.
DIRECTIONS FOR USE
…
Mould, Mildew, Fungi, Moss and Odour Causing Bacteria Control: The Mould Stop Primer will kill existing mould, mildew and fungal organisms. Apply the Mould Stop Primer generously and uniformly, ensuring that the surface is completely coated. Allow to air dry.
…”[4]
[4] Documents lodged under s 37 of the AAT Act (T documents); T16 at 114
The label also states that ZMSP’s active ingredient is 4,5-Dichloro-2-N-octyl-3(2H)-isothiazolone (DCOIT), which is also known as 4,5-Dichloro-2-N-octyl-4-isothiazolin. DCOIT was shown as present in ZMSP in a concentration of 1.23g/L or 1230mg/L. DCOIT is listed in Schedule 6 to the Standard for the Uniform Scheduling of Medicines and Poisons No. 15 (SUSMP 15 or the Poisons Standard November 2016). The Poisons Standard is prepared by the Secretary of the Department of Health (Secretary) for the purposes of s 52D(2)(b) of the Therapeutic Goods Act 1989 (TG Act). Drugs and poisons listed in Schedule 6 are substances and preparations that have moderate to high toxicity and may cause death or severe injury if ingested, inhaled or in contact with skin or eyes. Any product that contains a chemical listed in Schedule 6 is required to carry a label header bearing the word “Poison”. The ZMSP displays that word on its label.

The APVMA’s concerns and response

In July 2016, the APVMA contacted Rust-Oleum raising a number of concerns about ZMSP. Among those concerns was the fact that ZMSP was not registered with the APVMA as an “agricultural chemical product” under the Code. On 22 August 2016, the APVMA invited Rust-Oleum to show cause why a compulsory notice should not be issued requiring it to stop the supply of ZMSP and to retrieve existing stocks of that Product from the Australian market.[5]
[5] T documents; T15 at 76-77

On 5 September 2016, Rust-Oleum responded by claiming that ZMSP:
(1)did not fall within the definition of an “agricultural chemical product” under s 4 of the Code and, more particularly, under s 4(2) on the basis that mould is neither a pest nor an animal; and
(2)even if it came within the definition, it was excluded by virtue of Item 6 of Part 3 of Schedule 3 to the Agricultural and Veterinary Chemicals Code Regulations 1995 (AVCC Regulations) which declares certain products, including a “disinfectant” and a “mould inhibitor”, not to be an agricultural chemical product for the purposes of the that code. Rust-Oleum described ZMSP as a primer designed to coat over mould or mildew affected surfaces to act as a base for over-coating with a paint.[6] It is promoted and sold through retailers to consumers for domestic use. It has a disinfectant effect of surfaces and target organisms and inhibits the growth of mould.[7]
[6] (Documents lodged under s 37 of the Administrative Appeals Tribunal Act 1975 (AAT Act)) (T documents); T16 at 88
[7] T documents; T16 at 89-90
After considering Rust-Oleum’s response, a delegate of the APVMA decided on 6 October 2016 to issue the Notice to Rust-Oleum.[8]
[8] T documents; T17 at 119-125

LEGISLATIVE BACKGROUND
The purpose of the Act and Code

In my earlier reasons, I referred to the four separate regulatory regimes regulating chemicals used in Australia.[9] I will not repeat it but adopt it in these reasons. Beginning with the AVCC Act, its Long Title describes it as:
“An Act to make provision for the evaluation, registration and control of agricultural and veterinary chemical products, and for related matters, for the purposes of the Agricultural and Veterinary Chemicals Act 1994”

As such, it is part of a national scheme of regulation recognising a number of ambitions. The first two are:
“(a) that the protection of the health and safety of human beings, animals and the environment is essential to the well-being of society and can be enhanced by putting in place a system to regulate agricultural chemical products and veterinary chemical products; and
(b)that the principle of ecologically sustainable development requires a regulatory system that is designed to ensure that the use of such products at the present time will not impair the prospects of future generations; …”

[9] Re Rust-Oleum Australia Pty Ltd and Australian Pesticides and Veterinary Medicines Authority [2017] AATA 298; at [14]

The object of the Code:
“… is to make provision for and in relation to:
(a)the evaluation, approval, and control of the supply, of active constituents for proposed or existing agricultural chemical products or veterinary chemical products; and
(b)the evaluation, registration and control of the manufacture and supply, of agricultural chemical products and veterinary chemical products.”[10]
[10] Code; s 1

The Code establishes a system of approval and registration

Part 2 of the Code contains provisions relating to:
“(a) approval of active constituents for proposed or existing chemical products; and
(b)registration of chemical products; and
(c)approval of labels for containers for chemical products.”[11]
[11] Code; s 9(1)

The expression “active constituent” is defined in s 3:
“active constituent, in relation to a proposed or existing agricultural chemical product or veterinary chemical product, means the substance that is, or one of the substances that is, or one of the substances that together are, primarily responsible for the biological or other effect identifying the product as an agricultural chemical product, as the case may be.”
A “chemical product” is … “an agricultural chemical product or a veterinary chemical product, or both.”[12] I am concerned only with the definition of an “agricultural chemical product”. It is defined in s 4:
[12] Code; s 3
“(1) This section defines what is meant by an agricultural chemical product for the purposes of this Code.
(2)Subject to subsections (3) and (4), an agricultural chemical product is a substance or mixture of substances that is represented, imported, manufactured, supplied or used as a means of directly or indirectly:
(a)destroying, stupefying, repelling, inhibiting the feeding of, or preventing infestation by or attacks of, any pest in relation to a plant, a place or a thing; or
(b)destroying a plant; or
(c)modifying the physiology of a plant or pest so as to alter its natural development, productivity, quality or reproductive capacity; or
(d)attracting a pest for the purpose of destroying it.
(3)An agricultural chemical product includes a substance or mixture of substances declared by the regulations to be an agricultural chemical product.
(4)An agricultural chemical product does not include:
(a)a veterinary chemical product; or
(b)a substance or mixture of substances declared by the regulations not to be an agricultural chemical product.”

The words “pest”, “plant” and “substance” used in the definition of “agricultural chemical product” are themselves defined in s 3 of the Code:
“pest means:
(a)in relation to an animal, plant or thing – any animal, plant or other biological entity that injuriously affects the physical condition, worth or utility of the first-mentioned animal, plant or of that thing; or
(b)in relation to a place – an animal, plant or other biological entity that injuriously affects the use or enjoyment of that place.”

“plant means any vegetation or fungus and includes a seed or cutting of a plant, or any other part or product of a plant.”
“substance” includes:
(a)any gas, liquid, mixture or compound of gases, or mixture or compound of liquids; and
(b)an organism or part of an organism, including a genetically manipulated organism or part of a genetically manipulated organism; and
(c)material that is produced from an organism; and
(d)matter whose production involves the use of an organism;

but does not include an excluded organism or part of an excluded organism, or material that is produced from, or matter whose production involves the use of, an excluded organism.”

Under the regulation-making power conferred by s 6 of the AVCC Act and as required by ss 4(3) and 4(4)(b) of the Code, r 7 of the AVCC Regulations provides:
“(1) For subsection 4(3) of the Code, a substance or mixture of substances included in a class of substances or mixtures of substances listed in Part 2 of Schedule 3 is declared to be an agricultural chemical product.
(2)For paragraph 4(4)(b) of the Code, a substance or mixture of substances included in a class of substances or mixtures of substances listed in Part 3 of Schedule 3 is declared not to be an agricultural chemical product.”

Part 3 of Schedule 3 to the AVCC Regulations lists 24 classes of substance or mixture of substances. Only Items 1 and 6 are relevant. Item 1 lists the following class of substance or mixture of substances:
“Any mould inhibitor for use in the manufacture of paper, pulp, glue, plywood, carpets, plastics, glass, fabrics, domestic items, bedding material, leather goods or surface coatings (including paint but excluding antifouling paint), if:
(a)the mould inhibitor is incorporated into the product during manufacture for the protection of the goods; and
(b)the mould inhibitor is not released into the environment from the manufactured product; and
(c)the manufactured product is not claimed to have any effect as a pesticide.”

Item 6 lists the following class of substance or mixture of substances:
“Any disinfectant, mould inhibitor, air freshener or sanitiser sold by retailers, or presented or promoted primarily through retailers, to consumers for domestic use, except any sanitiser for use in swimming pool or spa water.”

Approval of active constituents for chemical products, registration of chemical products and approval of labels for containers for chemical products

Section 9A of Division 2 of Part 2 of the Code provides for the approval of active constituents for chemical products, registration of chemical products and approval of labels for containers for chemical products. Provision is made for applications to be made for approval or registration as required. The APVMA must complete a preliminary assessment of an application. If the application passes the assessment, the APVMA must notify the applicant and take certain steps including the publication of a notice inviting public submissions. The APVMA must approve an active constituent or label or register a chemical product, as the case, may be, if the relevant criteria are met.

Section 14 of the Code provides:
“(1) The APVMA must approve the active constituent or label, or register the chemical product, if it is satisfied:
(a)that the application meets the application requirements: and
(b)for an active constituent – that the constituent meets the safety criteria; and
(c)for a chemical product – that the product:
(i)meets the safety criteria, the trade criteria and the efficacy criteria; or
(ii)complies with the established standard for the product; and
(d)for a label for a chemical product – that the label:
(i)meets the labelling criteria; or
(ii)complies with an established standard for the product.
Note:For notice of approval or registration, see section 8F.
(2)Otherwise, the APVMA must refuse the application.
Note:For notice of refusal, see section 8G.”

Section 15 places restrictions on APVMA’s power to register products and approve labels:
“(1) Subject to subsection (2), the APVMA must not:
(a)register a chemical product unless:
(i)the APVMA also approves each active constituent for the product; and
(ii)the APVMA also approves a label for containers of the product; or
(b)approve a label for containers for a chemical product unless it also registers the product.
(2)Subparagraph (1)(a)(i) does not apply in relation to:
(a)an active constituent that is exempted by the APVMA from the operation of that subparagraph; or
(b)an active constituent for a listed chemical product.”

Section 16 provides that the APVMA may approve an active constituent or register a chemical product on multiple occasions:
“(1) The approval of an active constituent does not preclude the approval of the same constituent on the application of another person.
(2)The registration of a chemical product on the application of a person does not preclude the registration on the application of another person of another chemical product that has the same or similar constituents.
(3)The approval of a label for containers for a chemical product does not preclude the approval of another label or other labels for containers for that product.”

The way in which approval of an active constituent or a label takes place and the way in which registration of an active constituent, a chemical product and of a label takes place are the subject of ss 19, 21 and 20 respectively. Approval of an active constituent takes place when the APVMA enters the following in the Record of Approved Active Constituents for Chemical Products under section 17 (Record):
“(a)the name of the person who applied for the approval as the holder of the approval;
(b)the name of any nominated agent for the approval;
(c)the relevant particulars, which are the distinguishing number, any instructions for the use of the constituent and any other particulars prescribed by the regulations;
(d)any conditions of the approval imposed by the APVMA.”

Registration of a chemical product takes place when the APVMA enters the following in the Register of Agricultural and Veterinary Chemical Products kept under s 18:
“(a) the name of the person who applied for the registration as the holder of the registration;
(b)the name of any nominated agent for the registration;
(c)the relevant particulars, which are the distinguishing number, any instructions for the use of the product and any other particulars prescribed by the regulations;
(d)if the product is a listed chemical product – a notation to that effect;
(e)any conditions of the registration imposed by the APVMA;
(f)the date the registration ends.”[13]
[13] Code; s 20(1)

Approval or registration, as the case might be, is subject to the conditions prescribed by the regulations and any conditions imposed on the approval or registration as the APVMA thinks appropriate.[14]
[14] Code; s 23(1)

Control of chemical products

Part 4 of the Code regulates the supply of active constituents for chemical products and the supply of chemical products. Veterinary surgeons are excluded from the scope of its operation.[15] Apart from them, Part 4 restricts:
“(a)the supply of unapproved active constituents for chemical products and unregistered chemical products; and
(b)their possession for the purposes of supply; and
(c)the supply of active constituents for chemical products that have been approved and the supply of chemical products that have been registered or reserved in contravention of the conditions of their approval, registration or reservation.”[16]
[15] Code; s 73
[16] Code; s 72(2)

Sections 74 and 75 deal separately with the possession or custody of unapproved constituents with the intention of supply and possession or custody of chemical products, other than registered or reserved products, with the intention of supply. Section 76 provides for the supply of unapproved active constituents and s 77 with the supply of approved active constituents in contravention of conditions of approval.

Section 78(1) of the Code provides that a person must not supply, or cause to be supplied, a chemical product that is not a registered chemical product or a reserved chemical product unless it is excluded by ss 78(1)(a), (b) or (c). Of relevance are s 78(1)(a), which excludes from the prohibition a supply that is authorised by a permit and s 78(1)(b), which excludes a product exempted by the APVMA from the operation of s 78. A person who contravenes s 78(1) commits an offence.[17]
[17] Code; s 78(2A)

Section 79 prohibits the supply of registered chemical products in contravention of conditions of registration. A person may only supply, or cause to be supplied, a reserved chemical product if the supply is in accordance with the conditions specified in the regulations or the supply is authorised by a permit.[18] Section 80(1) provides that a person must not supply, or cause or permit to be supplied, a chemical product in a container that does not have a label attached to it unless the supply is authorised by a permit. A person may only supply, or cause or permit to be supplied, a registered chemical product in a container either if the label attached to the container states the relevant particulars and does not contain information contrary to the relevant particulars or the supply is authorised by a permit.[19] The expression “relevant particulars” means:
“(a) in relation to the approval of an active constituent – the distinguishing number, any instructions for use and any other particulars required by paragraph 19(c) to be entered in the Record; and
(b)in relation to the registration of a chemical product – the distinguishing number, any instructions for use and any other particulars required by paragraph 20(1)(c) to be entered in the Register; and
(c)in relation to the approval of a label – the information required to be recorded in the relevant APVMA file by subparagraphs 21(c)(i) to (iva);
and includes particulars of variations of relevant particulars made under section 26, 26AC, 26C, 29, 29A, 34A or 34AF.”[20]
[18] Code; s 79B(1)
[19] Code; s 81(1)
[20] Code; s 3

Division 2 of Part 4 of the Code continues with other prohibitions in relation to the supply of chemical products and their labelling. I will take only one example. A person must not make any claim, or cause or permit any claim to be made in respect of a registered chemical product that is inconsistent with any of the instructions on any approved label for containers for the registered chemical product or inconsistent with any instruction required by an established standard to be included on a label.[21]
[21] Code; s 84

Section 101(1)(a) of the Code provides that, if a chemical product, other than a reserved chemical product,[22] is not registered under the Code, the APVMA may give written notice to the person who has, or has had, possession or custody of stocks of the product, in this jurisdiction, requiring the person to do one or more of the following things, which are specified in s 101(2):
[22] A “reserved chemical product” is a “… a chemical product that is, or is included in a class of chemical products that is, specified in the Reserved Schedule.”: Code; s 3. The “Reserved Schedule” is “… the schedule contained in the regulations under section 56ZU.”: Code; s 3.
“(a) not to supply, or to stop supplying, the product, or that batch, in this jurisdiction either immediately or within a stated period;
(b)to take any action stated in the notice that the notified person is reasonably capable of taking to recover stocks of the product or of that batch from any other person in this jurisdiction:
(i)to whom the product or that batch has been supplied by the notified person; or
(ii)who has possession or custody of any such stocks directly or indirectly because of a supply by the notified person;
(c)if the product is not registered – to destroy, as stated in the notice, stocks of the product or of that batch in the possession or custody of, or recovered by, the notified person in this jurisdiction or to deal with them as stated in the notice;
(d)to report to the APVMA within a stated period on the action taken by the notified person under the notice.”

THE ISSUES

There is no question between the parties that ZMSP satisfies the definition of an “agricultural chemical product” within the meaning of s 4(2) of the Code. What Rust-Oleum contends is that ZMSP is excluded from that definition under s 4(4) of the Code because it is included in a class of substances or mixtures of substances listed in either Item 1 or Item 6 of Part 3 of Schedule 3 to the AVCC Regulations. A further issue arises if ZMSP were to be presented in a different way i.e. by removing any claims that it has to have effect as a pesticide.

JURISDICTIONAL ISSUE

The submissions

Rust-Oleum contends that it should have been given the opportunity to change its claims for ZMSP before any Notice was issued. Had it been given that opportunity and had it done so, ZMSP would have come within the exemption in Item 1. Provision of that opportunity is part of the decision-making process that precedes any final decision to issue a Notice. The APVMA decided to issue the Notice on an incorrect supposition that it was not able to offer that opportunity to Rust-Oleum. This raises the issue of whether the Tribunal’s jurisdiction permits me to review the decision on the basis that Rust-Oleum should have been invited to alter its product labelling.

On behalf of the APVMA, Mr Rebikoff of counsel submitted that the Tribunal’s function is to review the decision that was made about a product as it exists in the market. It is not to consider a product as it might exist at a future time. He referred to cases such as Hospital Benefit Fund of Western Australia Inc v Minister for Health, Housing and Community Services,[23] Freeman v Secretary, Department of Social Security[24] and Shi v Migration Agents Registration Authority[25] (Shi).
[23] (1992) 39 FCR 225; 111 ALR 1; 28 ALD 50; 16 AAR 566 at 234; 11; 59; 575
[24] [1988] FCA 294; (1988) 19 FCR 342; 87 ALR 506; 15 ALD 671; 9 AAR 255 at 345; 509; 268 per Davies J
[25] [2008] HCA 31; (2008) 235 CLR 286; 248 ALR 390; 48 AAR 345; 103 ALD 467at [142]-[147]; 327-329; 423-424; 380-381; 500-501 per Kiefel J in dissent but not on this issue

Consideration

If I were to review the APVMA’s decision on the basis that the claims made for ZMSP are different from what they were, I would be doing so on the basis of a factual matrix that did not exist at the time that the decision was made and that does not exist now. There are instances in which the Tribunal may have regard to facts that it has not found after hearing evidence. They may, for example, be facts agreed between the parties and, provided they are adequate to decide the case and are not hypothetical, the Tribunal may proceed on the basis of them.[26] This is apparent from the passage from the judgment of Wilcox J, who agreed with Davies J that the procedure that had been adopted by the Administrative Appeals Tribunal of the Australian Capital Territory (ACT) in deciding the case wholly on the basis of agreed facts had not been appropriate in the circumstances:
“… The Tribunal agreed to determine the critical question in the case on the basis of a statement of agreed facts that was patently inadequate. If we were concerned with a decision of a court, made on the basis of issues framed by the parties’ pleadings, there would be much force in an argument that, the case having been fought on those issues, the unsuccessful party should not be allowed a second chance. However, we are not concerned with such a decision, but with the decision of a body whose function was ‘to review the administrative decision that is under attack before it’. Those words were used by Bowen CJ and Deane J in Drake v Minister for Immigration and Ethnic Affairs (1979) 24 ALR 577 at 589 in relation to the Commonwealth Administrative Appeals Tribunal, but they apply equally to its Australian Capital Territory counterpart. The statutory function of the Tribunal requires that it form its own view about the matter in issue. In approaching that task, it is legitimate for the Tribunal to be guided by the parties as to the salient issues and to accept relevant admissions of fact, but the Tribunal should never permit parties to place it in the position of deciding a case on an artificial or inadequate factual basis.”[27]
[26] See, for example, Perpetual Trustee Company (Canberra) Limited v Commissioner of Australian Capital Territory Revenue [1994] FCA 1150; (1994) 50 FCR 405; 28 ATR 307; 94 ATC 4403; Davies, Neaves and Wilcox JJ
[27] [1994] FCA 1150; (1994) 50 FCR; 405; 28 ATR 307; 94 ATC 4403 at 418-419; 3194 and 414

This passage refers to the essential feature of the Tribunal’s jurisdiction or functions i.e. to review the administrative decision that is “under attack” as Bowen CJ and Deane J described it or, in more pedestrian terms, is the subject of an application for review made to the Tribunal. This is consistent with the principles established by the High Court in Shi where Kiefel J, in dissent but not on this point, said that “The Tribunal must address the same question as the original decision-maker was required to address.”[28] The Tribunal only has the power to review a decision if an application is made to it for review of a decision and follows from the provisions of Division 1 of Part IV of the AAT Act. Section 25(1) provides:
“An enactment may provide that applications may be made to the Tribunal:
(a)for review of decisions made in the exercise of powers conferred by that enactment; or
(b)for the review of decisions made in the exercise of powers conferred, or that may be conferred, by another enactment having effect under that enactment.”[29]
[28] [2008] HCA 31; (2008) 235 CLR 286; 248 ALR 390; 48 AAR 345; 103 ALD 467; 82 ALJR 1147 at [142]; 327; 423; 380; 500; 1173 citing Hospital Benefit Fund of WA Inc v Minister for Health, Housing and Community Services [1992] FCA 599; (1992) 39 FCR 225 at 234 per Wilcox, Burchett and French JJ. I refer also to my summary in Re Frugtniet and Migration Agents Registration Authority [2016] AATA 299 at [75] of the principles established by the High Court in Shi.
[29] Given the definition of “enactment” in s 3(1) of the AAT Act, s 25(1)(b) would allow provision to be made in, for example, regulations for review of decisions by the Tribunal.

When an enactment makes provision for review of a decision, it must specify the person or persons to whose decisions the provision applies. It may be stated to apply to all of the decisions made by the person or only to a class of decisions. Finally, it may specify the conditions subject to which applications may be made to the Tribunal for review of the decisions specified in this way. These are the parameters set by s 25(3). The effect of ss 25(1) and (3) is that, on every occasion, the next step is to look for the particular enactment giving a person an entitlement to make an application to the Tribunal. The AAT Act merely sets out the parameters within which the entitlement in the further enactment must be drafted.

In this case, the relevant provision is s 167(1)(k) of the Code:
“An application may be made to the Administrative Appeals Tribunal for review of the following decisions of the APVMA:
(a)-(j)   …
(k)       a decision to issue a recall notice;
(l)-(y)   …”

A “recall notice” means a notice issued under either ss 101, 102 or 103.[30]

[30] AVCC Act; s 3

Rust-Oleum’s application for review lodged in the Tribunal seeks review of the APVMA’s decision to issue a recall notice under s 101. Putting aside the time limits and criteria with which an application must comply and which are set out in the AAT Act,[31] s167 of the Code does not place any limits on the circumstances in which Rust-Oleum was permitted to make such an application.

[31] Section 167(3) of the AVCC Act expressly states that s 167 is subject to the AAT Act.

The power to make that decision may be implied from s 25(1) of the AAT Act. That is to say, as s 25(1) of the AAT Act sets out the circumstances in which a person has an entitlement or right to make an application to the Tribunal, and in turn, the Tribunal must have the correlating obligation or duty to determine that application. The implication is supported by the powers that the Tribunal is given under s 43(1) of the AAT Act:
“For the purpose of reviewing a decision, the Tribunal may exercise all the powers and discretions that are conferred by any relevant enactment on the person who made the decision and shall make a decision in writing:
(a)       affirming the decision under review;
(b)       varying the decision under review; or
(c)       setting aside the decision under review and:
(i)        making a decision in substitution for the decision so set aside; or
(ii)remitting the matter for reconsideration in accordance with any directions or recommendations of the Tribunal.”[32]
[32] Before the enactment of the Tribunals Amalgamation Act 2015 (Tribunals Amalgamation Act), which came into effect from 1 July 2015, implications were unnecessary for the Tribunal’s power was the subject of an express provision. Section 25(4 ) of the AAT Act provided that the Tribunal had power to review any decision in respect of which an application was made to it under any enactment. Section 25(4) was, however, repealed by s 3 and Schedule 1, Item 40 of the Tribunals Amalgamation Act.

The powers of the Tribunal are those of the decision-maker who made the decision under review. In this case, they are APVMA’s powers to issue a recall notice under s 101. That provision is found in Part 6 of the Code and neither it nor Part 6 generally confers any power upon the APVMA to require a variation of a label. The APVMA’s powers in relation to labels is found in Part 2 of the Code. Part 2 provides for the approval of active constituents for proposed or existing chemical products, registration of chemical products and approval of labels for containers for chemical products. A decision to approve a label is a decision different from a decision to issue a recall notice both in its characterisation and in the path taken to reach that decision. In deciding whether to approve a label, the APVMA must follow the steps set out in Division 2 of Part 2 of the Code. Those steps start with an application’s being made to the APVMA in accordance with s 10 and the APVMA’s making a preliminary assessment. No such requirements are set out in relation to a decision to issue a recall notice under Part 6. Parliament has treated the two decisions quite separately. Parliament has not established a scheme whereby the APVMA can resolve any dilemma it might have about issuing a recall notice by requiring a person to change the label on the container. Therefore, the Tribunal cannot do so either for it is limited to the powers of the decision-maker.

This is not always the case but, whether it is or not, depends upon the particular statutory scheme enacted by Parliament. I refer, for example to the statutory scheme established by ss 829, 830, 831 and 998 of the Corporations Law as it was then incorporated in the Corporations Act 1989 (Corporations Law) and s 93AA of the Australian Securities and Investments Commission Act 1989 (ASIC Act) then in force.[33] On review of a decision made by a delegate of the Australian Securities and Investments Commission (ASIC) to impose a banning order, the Tribunal of which I was a member decided to set aside that banning order and substituted a banning order for a reduced period if the applicant entered an enforceable undertaking under s 93AA of the ASIC Act. That was a power that had been available to ASIC in the circumstances but it had preferred to use its power to make a banning order.[34] Our power to do so was challenged.

[33] The Corporations Law and the ASIC Act repealed by the Corporations (Repeals, Consequentials and Transitionals) Act 2001 (s 3 and Schedule 1, Items 1 and 2) with effect from the enactment of the Corporations Act 2001: (s 2(2))

[34] Re Donald and Australian Securities and Investments Commission [2001] AATA 622; (2001) 64 ALD 717; Deputy President SA Forgie and Mr Elsum and Mr McLean, Members

In dismissing the appeal in Australian Securities and Investments Commission v Donald[35] (Donald), there were two approaches adopted by the Full Court of the Federal Court. One was that adopted by Kenny J, with whom Gray J agreed. Counsel for ASIC had submitted that, because a person did not have a right to apply to the Tribunal to review its decision to refuse to accept an enforceable undertaking, the Tribunal could not exercise the power to permit a person to make such an enforceable undertaking when it could not review a decision relating to it. Kenny J said:
“ When the Tribunal stands in the stead of the Commission, it is no less favourably placed than the Commission. The Tribunal has all the powers and discretions that are vested in the original-decision-maker, provided that their exercise is only for the purpose of reviewing a decision that the Tribunal has power to review. For the purpose of reviewing the Commission’s decision under ss 829 and 830 of the Corporations Law, the Tribunal had, by virtue of s 43(1) of the AAT Act, the same powers and discretions as the Commission. In determining whether the Commission made the correct or preferable decision, the Tribunal was also bound to consider the powers and discretions that were exercisable by the Commission and were relevant to its consideration of the decision that should be made in respect of the Commission’s investigation. …
...
Of course, the tribunal is not entitled to exercise a power conferred on a decision-maker for some purpose unrelated to the decision under review. What this means in a given case must be determined by reference to the nature of the decision that the commission was called on to make. Although the decision under review was made under the Law, the nature of the decision that the commission was called on to make must be judged in its proper context. In this case, the commission has to decide what response it should make following its investigation into the respondent’s activities at the close of trading on 29 May 1998. As Finn J said in Comcare v Burton (at ALD 852; ALR 528):
The process of reviewing [the reviewable] decision is to occur in the setting of the question(s) that gave rise to the decision. And while in that process the Tribunal can exercise its s 43(1) powers, it nonetheless is obliged to answer the same question(s) as was (were) before the … decision-maker: Hospital Benefit Fund [of Western Australia Inc v Minister for Health, Housing and Community Services (1992) 39 FCR 225] at 234; 575.”[36]
[35] [2003] FCAFC 318; (2003) 136 FCR 7; 203 ALR 566; 38 AAR 288; 77 ALD 449; Gray, Kenny and Downes JJ
[36][2003] FCAFC 318; (2003) ) 136 FCR 7; 203 ALR 566; 38 AAR 288; 77 ALD 449 at [30]-[33]; 15-16; 573-574; 296-297; 456-457

In his judgment, Downes J developed the distinction between jurisdiction and remedy. In making the decision to issue a banning order against Mr Donald, ASIC had relied on its conclusion that he had breached s 998(1) of the Corporations Law. It had then exercised its powers under s 829 to issue the banning order. Section 998(1), Downes J said, was concerned with contravention. Once a contravention has been established, it becomes necessary to consider the response to that contravention. Section 829 of the Corporations Law is a hybrid in that it addresses both the subject-matter giving rise to ASIC’s power to respond and the nature of a response available to it. Section 93AA of the ASIC Act presents another response to that subject-matter.
“… In this matter the tribunal addressed the same subject matter as had been addressed by ASIC. The tribunal did not come to the question of undertaking as part of its examination of the subject matter but as part of its consideration of penalty. Once it is accepted that the tribunal had jurisdiction over the subject matter Burton (Lees) supports the proposition that it had available to it all the powers and discretions available to the decision-maker.”[37]
[37] [2003] FCAFC 318; (2003) ) 136 FCR 7; 203 ALR 566; 38 AAR 288; 77 ALD 449 at [60]; 22; 580; 303; 463

The case of Donald is concerned with the Tribunal’s powers once it has considered the question that was before the person who made the decision under review. Its principles are equally applicable in this case. The subject-matter of the APVMA’s decision is determined and constrained by the provisions of s 101 of the Code under which it was made. The question(s) that the APVMA must ask itself in making a decision under s 101 are determined by the terms of that section itself. It is a section that is, to use the words of Downes J in Donald, a hybrid provision in that it sets out both the subject-matter that must be determined and the response that the APVMA may make if that subject-matter is established. The subject-matter relates to a “chemical product” and so to an agricultural chemical product or a veterinary chemical product. It is apparent from the definition of those terms that neither is defined by reference, even in part, to its label. Therefore, alteration of its label could not be one of the responses that the APVMA, and so the Tribunal, could adopt in considering what it should do under s 101(1)(a) once it had decided that a chemical product is not registered under the Code. Therefore, in reviewing a decision made by the APVMA under s 101, the Tribunal has no jurisdiction to consider what the position would have been had Rust-Oleum made different claims on ZMSP’s label.

It may be that the APVMA could have decided to take a different path at the outset and to decline to use its powers under s 101 to issue a recall notice. The tribunal does not have the powers of the Federal Court under the Administrative Decisions (Judicial Review) Act 1977 or of the Ombudsman under the Ombudsman Act 1976. Whether it could, or could not, take an alternative course is not something that I have power to explore. I am limited to the subject-matter of the decision that it did make and to the powers and discretions (described by Downes J as “responses”) of the APVMA that relate to the subject-matter of that decision.
INTERPRETING THE EXPRESSION “AGRICULTURAL CHEMICAL PRODUCT”

Although Rust-Oleum did not contend that ZMSP does not satisfy the definition of an “agricultural chemical product” in s 4 of the Code, it submitted that it was important to understand the terms used in the definition of that term before interpreting Items 1 and 6 of Part 3 of Schedule 3.

Rust-Oleum’s submissions

On behalf of Rust-Oleum, Mr Gottschall of counsel submitted that an understanding of the terms used in defining the expression “agricultural chemical product” is important in understanding Items 1 and 6. When the language of the definition of “agricultural chemical product” is examined, he submitted, the terms “product”, “a substance” and a “mixture of substances” are used as though they could be interchangeable. This, however, is not generally the case for products. That is particularly so in the case for domestic products with microbial action sold by retailers. A product is not merely a substance or mixture of substances. Products sold through retail channels, such as disinfectants or mould-active products, are invariably sold in forms that include packaging. That packaging includes labelling, which provides information about the product, its uses, safety information, manufacturer’s details and the like. It may also include associated parts, such as a nozzle, to be used to apply the product.

Products of the relevant kinds are practically never sold in the form of “a substance” or “mixture of substances”. The contents of the packages cannot generally be described as “a substance”. Generally, the active ingredients are provided in some formulation. Often, packaged products may be described as a “mixture of substances” but not all products can be characterised as such. Mr Gottschall referred to Item 2 of Part 3 of Schedule 3 of the AVCC Regulations, which declares that the following is not an agricultural chemical product:
“Any fungicide, bactericide or deodorant for use in footwear and clothing”.

Footwear and clothing are composite articles constructed from multiple fabrics and materials. They are only partly defined by the chemistry of the materials from which they are constructed and cannot be defined as a “mixture of substances”. It is the geometry that makes them footwear or clothing.

As the relevant products include products that cannot be described by their chemistry, the better view, Mr Gottschall submitted, is that the expression “mixture of substances” is not a term intended to refer to the overall “product” but to the ingredients that give the products their actions or attributes relevant to their classification as agricultural chemical products.

It was further submitted on behalf of Rust-Oleum that an “agricultural chemical product” can be defined by reference to the attributes of a product. The AVCC Act and the AVCC Regulations presume that this can be done by reference to a substance or a mixture of substances. When s 4(4)(b) excludes a veterinary chemical product and a substance, or mixture of substances, declared by the regulations not to be an agricultural chemical product, it does not give a clear indication that any of these approaches is to be adopted. He set out Items 1-5 and Item 7 as illustrative of there being more than one approach being followed in Part 3 of Schedule 3. Each item needs to be considered on its own terms to identify whether it is defining substances or mixtures of substances by reference to products or, alternatively, products. Items that do not define a product by reference to substances or mixtures of substances are not a valid exercise of the power to make regulations conferred by s 4(4)(b) of the AVCC Act. Therefore, if they are to be valid, the Items must be construed as referring to substances or mixtures of substances where that construction is reasonably open.

Consideration
A. Principles of statutory interpretation

I will begin with the principles that I will follow when interpreting the terms of the AVCC Act and the AVCC Regulations. Mr Rebikoff referred to them in his submissions on behalf of the APVMA. The underlying principle is set out in the judgment of the plurality in CIC Insurance Ltd v Bankstown Football Club Ltd[38] (CIC Insurance):
“ It is well settled that at common law, apart from any reliance upon s 15AB of the Acts Interpretation Act 1901 (Cth), the court may have regard to reports of law reform bodies to ascertain the mischief which a statute is intended to cure …. Moreover, the modern approach to statutory interpretation (a) insists that the context be considered in the first instance, not merely at some later stage when ambiguity might be thought to arise, and (b) uses ‘context’ in its widest sense to include such things as the existing state of the law and the mischief which, by legitimate means such as those just mentioned, one may discern the statute was intended to remedy …. Instances of general words in a statute being so constrained by their context are numerous. In particular, as McHugh JA pointed out in Isherwood v Butler Pollnow Pty Ltd …, if the apparently plain words of a provision are read in the light of the mischief which the statute was designed to overcome and of the objects of the legislation, they may wear a very different appearance. Further, inconvenience or improbability of result may assist the court in preferring to the literal meaning an alternative construction which, by the steps identified above, is reasonably open and more closely conforms to the legislative intent ….[39]
[38] [1997] HCA 2; (1997) 187 CLR 384; (1997) 141 ALR 618; Brennan CJ; Dawson, Toohey and Gummow JJ; Gaudron J dissenting
[39] [1997] HCA 2; (1997) 187 CLR 384; (1997) 141 ALR 618 at 408; 634-635 (citations omitted)

The focus in CIC Insurance was on the context in which words are used but the High Court has made it clear that the language chosen by Parliament is no less important than its context. This is apparent in a passage from the joint judgment of Hayne, Heydon, Crennan and Kiefel JJ in Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (Northern Territory):[40]
“ This Court has stated on many occasions that the task of statutory construction must begin with a consideration of the text itself .... Historical considerations and extrinsic materials cannot be relied on to displace the clear meaning of the text .... The language which has actually been employed in the text of the legislation is the surest guide to legislative intention .... The meaning of the text may require consideration of the context, which includes the general purpose and policy of a provision ..., in particular the mischief ... it is seeking to remedy.”[41]
[40] [2009] HCA 41; (2009) 239 CLR 27; 260 ALR 1; French CJ, Hayne, Heydon, Crennan and Kiefel JJ
[41] [2009] HCA 41; (2009) 239 CLR 27; 260 ALR 1 at [47]; 46-47; 16-17 (citations omitted)

French CJ expressed the principle in this way:
“ The starting point in consideration of the first question is the ordinary and grammatical sense of the statutory words to be interpreted having regard to their context and the legislative purpose. That proposition accords with the approach to construction characterised by Gaudron J in Corporate Affairs Commission (NSW) v Yuill … as: ‘dictated by elementary considerations of fairness, for, after all, those who are subject to the law's commands are entitled to conduct themselves on the basis that those commands have meaning and effect according to ordinary grammar and usage.’ In so saying, it must be accepted that context and legislative purpose will cast light upon the sense in which the words of the statute are to be read. Context is here used in a wide sense referable, inter alia, to the existing state of the law and the mischief which the statute was intended to remedy … [CIC Insurance].”[42]
[42] [2009] HCA 41; (2009) 239 CLR 27; 260 ALR 1 at [4]; 31; 3 (citations omitted)
The necessary interweaving of the two strands of language and context are illustrated in the passage from the joint judgment of McHugh, Gummow, Kirby and Hayne JJ in Project Blue Sky Inc v Australian Broadcasting Authority:[43]
“ The primary object of statutory construction is to construe the relevant provision so that it is consistent with the language and purpose of all the provisions of the statute ... The meaning of the provision must be determined ‘by reference to the language of the instrument as a whole’ ... In Commissioner for Railways (NSW) v Agalianos ..., Dixon CJ pointed out that ‘the context, the general purpose and policy of a provision and its consistency and fairness are surer guides to its meaning than the logic with which it is constructed’. Thus, the process of construction must always begin by examining the context of the provision that is being construed ...
A legislative instrument must be construed on the prima facie basis that its provisions are intended to give effect to harmonious goals ...”[44]
[43] [1998] HCA 28; (1998) 194 CLR 355; 153 ALR 490; McHugh, Gummow, Kirby and Hayne JJ; Brennan CJ dissenting
[44] [1998] HCA 28; (1998) 194 CLR 355; 72 ALJR 841; 153 ALR 490 at [69]- [70]; 381-382; 509

The interweaving of language and context may mean that words used in a particular context may not be intended to have their literal or grammatical meaning and should not be interpreted as having that meaning. The plurality explained:
“ However, the duty of a court is to give the words of a statutory provision the meaning that the legislature is taken to have intended them to have. Ordinarily, that meaning (the legal meaning) will correspond with the grammatical meaning of the provision. But not always. The context of the words, the consequence of a literal or grammatical construction, the purpose of the statute or the canons of construction … may require the words of a legislative provision to be read in a way that does not correspond with the literal or grammatical meaning. In Statutory Interpretation …, Mr Francis Bennion points out:
‘… Unhappily, this state of being able to rely on grammatical meaning does not prevail in the realm of statute law; nor is it likely to. In some cases the grammatical meaning, when applied to the facts of the instant case, is ambiguous. Furthermore, there needs to be brought to the grammatical meaning of an enactment due consideration of the relevant matters drawn from the context (using that term in its widest sense). Consideration of the enactment in its context may raise factors that pull in different ways. For example the disability of applying the clear literal meaning may conflict with the fact that this does not remedy the mischief that Parliament intended to deal with.’ (footnotes omitted)”[45]
[45] [1998] HCA 28; (1998) 194 CLR 355; 153 ALR 490 at [78]; 384; 511 (citations omitted); French CJ, Hayne, Kiefel, Gageler and Keane JJ

In the same vein, the High Court drew upon s 15AA of the Acts Interpretation Act 1901 (AI Act) as a statutory reflection of the same principle when it decided Thiess v Collector of Customs.[46] Section 15AA provides that:
[46] [2014] HCA 12; (2014) 250 CLR 664; 306 ALR 594; French CJ, Hayne, Kiefel, Gageler and Keane JJ
“In interpreting a provision of an Act, the interpretation that would best achieve the purpose or object of the Act (whether or not that purpose or object is expressly stated in the Act) is to be preferred to each other interpretation.”

It went on to quote from Cabell v Markham,[47] which had been quoted by Kirby J in Residual Assco Group Ltd v Spalvins.[48] I will set out the full passage from Cabell v Markham as quoted by Kirby J and his reflection on it:
“… In construing a statutory provision, we should always keep in mind what Judge Learned Hand said in Cabell v Markham …:
‘Of course it is true that the words used, even in their literal sense, are the primary, and ordinarily the most reliable, source of interpreting the meaning of any writing: be it a statute, a contract, or anything else. But it is one of the surest indexes of a mature and developed jurisprudence not to make a fortress out of the dictionary; but to remember that statutes always have some purpose or object to accomplish, whose sympathetic and imaginative discovery is the surest guide to their meaning.’
Moreover, legislation ‘must not be read in a spirit of mutilating narrowness’ …. If the choice is between reading a statutory provision in a way that will invalidate it and reading it in a way that will not, a court must always choose the latter course when it is reasonably open. …”[49]

[47] (1945) 148 F(2d) 737 at 739 per Judge Learned Hand

[48] [2000] HCA 33; (2000) 202 CLR 629; Gleeson CJ, Gaudron, McHugh, Gummow, Kirby, Hayne and Callinant JJ cited at [2014] HCA 12; (2014) 250 CLR 664; 306 ALR 594 at [23]; 672; 599-600

[49] [2000] HCA 33; (2000) 202 CLR 629 at [27]; 644

A further illustration of the same principle is found in the judgment of Gordon J in Sea Shepherd Australia Limited v Commissioner of Taxation[50] (Sea Shepherd):
“2. The task is not to pull apart a provision, or composite phrase within a provision, into its constituent words, select one meaning, divorced from the context in which it appears, and then reassemble the provision … Indeed, it is rare that resort to a dictionary will be of assistance in searching for the legal meaning of a provision in a statute …
3.As Gleeson CJ said in XYZ v Commonwealth …:
There are many instances where it is misleading to construe a composite phrase simply by combining the dictionary meanings of its component parts.
…”[51]
[50] [2013] FCAFC 68; (2013) 212 FCR 252; Besanko, Gordon and Dodds-Streeton JJ
[51] [2013] FCAFC 68; (2013) 212 FCR 252 at [34]; 261

Where the issue for resolution is the proper classification of everyday items, the everyday words used to describe those items should be given their ordinary and everyday meanings. Classification in those circumstances is not a scientific question. This was explained by Sundberg J in Lansell House Pty Ltd v Federal Commissioner of Taxation. His Honour was concerned with whether Mini Ciabatte was a cracker and so whether it was subject to the Goods and Services Tax:[52]
[52] [2010] FCA 329; (2010) ATC 20-173
“57.     … In Seay v Eastwood [1976] 1 WLR 1117 the House of Lords considered the word ‘bets’ in the definition of bookmaker. Lord Wilberforce, with whom Lord Salmon agreed, said that in determining whether an activity was or was not a ‘bet’, ‘refined analytical tools’ were not appropriate. Decision-makers should use their local knowledge, experience of the world and common sense, to give a sensible interpretation of the expression. An appellate court required to review such decisions should endorse those that have been reached and confirmed in this way: Seay [1976] 1 WLR at 1121.
58.      The same approach was adopted by Kitto J to the expression ‘mining operations’ in ordinary parlance in NSW Associated Blue Metal Quarries Ltd v Federal Commissioner of Taxation [1956] HCA 80; (1955) 94 CLR 509 at 514, where his Honour said:
‘the conclusion must depend on one’s own understanding of the sense in which words are currently used, and, although Dr. Johnson in his day defined a “quarry” as a “stone mine”, it seems to me an unnatural and inapt use of language to apply the term “mining operations” to the getting of stone such as blue-metal by open excavation, and to call the land on which those activities are conducted “a mining property”.’
59.      The approach espoused in the above cases is especially appropriate where, as here, the question for decision is the proper classification of everyday food items for the purpose of the Goods and Services Tax. The everyday English words in item 32 must be given their ordinary and natural meaning – what is the reasonable view on the basis of all the facts known to the Court as to whether or not the product is one which falls within the relevant category, which here is crackers. Thus, it seems to me, it is inappropriate for the Court to apply refined analytical tools – in this case rather elusive and qualified technical distinctions – to an ordinary English word, rather than local knowledge and common sense. As Toulson LJ said in Procter & Gamble, this is not a scientific question.
60.      It is not in my view the function of an expert to give evidence about the meaning of ordinary words such as bread, biscuit and cracker. In Australian Gas Light Co v Valuer-General [1940] NSWStRp 9; (1940) 40 SR (NSW) 126 at 137 Jordan CJ said:
The question what is the meaning of an ordinary English word or phrase as used in the statute ... is to be resolved by the relevant Tribunal itself, by considering the word in its context with the assistance of dictionaries and other books, and not by expert evidence ... although evidence is receivable as to meaning of technical terms ...
See also Pepsi Seven-Up at 296.”[53]
[53] [2010] FCA 329; (2010) ATC 20-173 at [57]; 10,843-10,844 Appeal dismissed: Lansell House Pty Ltd v Commissioner of Taxation [2011] FCAFC 6; 190 FCR 354; Bennett, Edmonds and Nicholas JJ

B. The definition of “agricultural chemical product”

In essence, the submissions made on behalf of Rust-Oleum invite me to read the definition of an “agricultural chemical product” in light of the way in which such products are packaged, labelled and presented to the market. The basis of the submission is that a product is not marketed through retail outlets as a substance or mixture of substances. It is, instead, sold in forms in which it is packaged and labelled and accompanied by any necessary equipment or attachments such as a nozzle to apply the product.

In general terms, I agree that chemical products, including agricultural chemical products, are generally marketed or supplied in this way. It is apparent from the very broad outline of the Code that I have set out above that it establishes a scheme that requires both the approval of active constituents, the registration of active constituents and the approval of labels that are attached to chemical products and active constituents. The three do not stand alone for it is also apparent that, generally speaking, chemical products or active constituents that are the subject of the Code may not be supplied without an approved label or permit.

The practicalities of marketing or supply and the provisions in the Code requiring labelling of chemical products and active constituents should not, however, take me away from the words that Parliament has used in setting the framework under which APVMA has made the decision that is now under review. Those words are found in s 101 and their focus is entirely on “a chemical product (other than a reserved chemical product)”. Beyond the uses and representations that are embedded in the definition of the expression “chemical product”, the words used in s 101 have nothing to do with the labelling of a chemical product, the claims that are made for it or the manner of its supply including its packaging.

With the focus entirely on “a chemical product (other than a reserved chemical product)”, that takes me back to the definition of a “chemical product” and so, for the purposes of this case, an “agricultural chemical product”. An “agricultural chemical product” is “a substance or mixture of substances that is represented, imported, manufactured, supplied or used as a means of directly or indirectly …” having one or other of the outcomes listed in paragraphs 4(2)(a) to (e). On their face, the words require first that there be “a substance or mixture of substances”.

Second, they require that the substance or mixture of substances be “represented, imported, manufactured, supplied or used as a means of directly or indirectly …” having one of the outcomes. There is no requirement that the substance or mixture of substances actually achieves any of the listed outcomes for a representation that it does so is enough. Beyond stating them in terms of destroying, modifying, killing, attracting and so on, each outcome does not set the way in which the agricultural chemical product is to achieve that. Even when the outcome listed in s 4(2)(c) is shown as “modifying the physiology of a plant or pest so as to alter its natural development, productivity, quality or reproductive capacity”, there is nothing that requires that outcome to be achieved in a certain way. There is nothing that makes any reference to the particular active constituent in the agricultural chemical product or its particular chemical composition that enables it to have that outcome.

Other provisions in the Code and in the AVCC Regulations do not alter this meaning. Mr Gottschall drew my attention to Part 3 of Schedule 3, which is headed “Substances or mixtures declared not to be agricultural chemical products”. It sets out the “… substance or mixture of substances declared by the regulations not to be an agricultural chemical product” for the purposes of s 4(4)(b) of the Code. Part 3 prescribes 24 items, each of which is a “Class of substance or mixture of substances”. Each of the 24 items then describes a particular substance or mixture of substances. In each item, the substance or mixture of substances is described by reference to a use to which it is put or a quality that it has. An example is found in Item 16, which prescribes “Substances used to adjust the pH of swimming pool or spa water”. No reference is made to the particular features of the substances that enable them to be used for that purpose. The same is true for Item 14 when it specifies “Substances that present a physical barrier to a pest that: (a) do not contain a biocide; and (b) do not otherwise affect the pest; and (c) are not released into the environment”. Provided a substance or mixture of substances falls within the class of substances that present a physical barrier to a pest and satisfy paragraphs (a) to (c), it is of no consequence how it achieves that effect. It is of no consequence whether it contains a particular substance or ingredient that gives it that quality.

Items 7 and 17 refer to particular substances being cyanuric acid and ozone respectively but then only for particular uses. In the case of cyanuric acid, it is declared not to be an agricultural chemical product if it is for use in swimming pools as a chlorine stabiliser. Ozone is declared not to be an agricultural chemical product if generated on site for treatment of swimming pool or spa water.

In some instances, such as Item 2, the class of substance or mixture of substances is narrowed so that a substance or mixture of substances will only fall within it if it is a substance or mixture of substances that can be characterised as having two qualities: one as a fungicide, bactericide or deodorant; and two as a fungicide, bactericide or deodorant for use in footwear and clothing. Provided a substance or mixture of substances has both those qualities, it will be a substance or mixture of substances declared not to be an agricultural chemical product. No reference is made to the chemical composition of the substance or mixture of substances.

I have set out examples from the 24 Items set out in Part 3 of Schedule 3 but, in every one of the Items, the means of determining whether a particular substance or mixture of substances falls within its terms and is so declared not to be an agricultural chemical product is the same. Part 3 of Schedule 3 will only come into play if the matter under consideration is an agricultural chemical product within the meaning of s 4(2)(a) to (e) of the Code. Therefore, the initial task will always be to identify the matter as a substance or mixture of substances. The next is to identify it as a substance or mixture of substances that destroys, modifies or attracts or is represented to do so as set out in s 4(2)(a) to (e) of the Code. If so, it is an agricultural chemical product by virtue of s 4(2) and will be so for the purposes of s 4 unless excluded by s 4(4). The third task is to further characterise what has already been characterised as a “substance or mixture of substances”. The further characterisation is carried out in order to determine whether it comes within the description of one of the classes of substances or mixtures of substances listed in Part 3 of Schedule 3 of the Code. Whether it does or does not is determined by reference to the substance or mixture of substances as a whole. Except where the substance or mixture of substances is a particular substance as in the case of cyanuric acid or ozone in Items 7 and 17 respectively, there is nothing in Part 3 of Schedule 3, r 7 of the AVCC Regulations under which it is made or r 4(4)(b) of the AVCC Act suggesting that the particular ingredient that gives a substance or mixture of substances the particular quality specified in one of the 24 Items is relevant. The focus is upon the higher level of substances or mixtures of substances. It is not upon the ingredients that give the products their actions or attributes relevant to their classification as agricultural chemical products.

Although the parties agreed that ZMSP is an agricultural chemical product, I will set out why I agree with them. The word “substance” is defined in inclusionary terms in s 3 of the Code. In its context, paragraphs (a) to (d) are examples of a “substance” rather than an attempt to limit its scope. The ordinary meaning of the word “substance” is: “a particular kind of matter with a definable quality”.[54] The only ingredient in ZMSP revealed on the label is 4,5-Dichloro-2-N-octyl-4-isothiazolin. That falls within the general meaning of the word “substance”. As it is present in proportions of 1.23 grams per litre in a container containing 3.78 litres of ZMSP, it is clearly present with another substance or substances. It can, therefore, be said to be a “mixture of substances”.

[54] Chambers 21st Century Dictionary (1999, reprinted 2004) (Chambers)

My conclusion on that issue is not enough to come within s 4(2) of the definition of “agricultural chemical product”. It has to be “represented, imported, manufactured, supplied or used as a means of directly or indirectly …” having one of the consequences stipulated in ss 4(2)(a) to (e). I need only rely on the representations made on the label of ZMSP. What would be the label appearing on the front of the container states that it “Kills Existing Mould, Mildew and Odour Causing Bacteria”. That representation is made in the small print on the label that would appear on the other side of the container. The small print states that ZMSP is “… a water-based fungicidal protective coating that can be used to paint over and kill existing mould, mildew, moss, fungi, odour causing bacteria and any other fungal organisms. The Mould Stop Primer contains an antimicrobial to prevent the growth of mould, mildew and other fungal organisms on the paint film.”

In his report dated 28 February 2017, Dr Heike Neumeister-Kemp wrote:
“The term ‘mould’ is typically and commonly used to refer to a group of eukaryotic micro-organisms, of the taxonomic rank Kingdom, referred to as Fungi (Ruggerio et. al. ‘A higher level classification of all living organisms’, 2015). Thus herein, the terms ‘mould’ and ‘fungi’ are used interchangeably. The taxonomic rank Kingdom, amongst others, contains the parallel members of Plantae and Animalia. The primary consequence of this classification is that fungi is neither plant, nor animal, nor bacteria. It therefore follows that fungi/mould is a distinct and ‘different’ form of life with its own unique characteristics, strengths, susceptibilities and behaviours.”[55]
[55] Exhibit A at [4.1]

As the representation is that ZMSP will “kill”, among others, mould, mildew and other fungal organisms. Even if they cannot be classified as either plant or animal in biological terms, Dr Neumeister-Kemp’s evidence is that they are a form of life. As a form of life, they can be described as a “biological entity”. The word “biological” means “… relating to biology. 2 physiological. …”.[56] “Biology” is “the scientific study of living organisms”.[57] “Physiology” is “… the branch of biology that is concerned with the internal processes and functions of living organisms, as opposed to their structure. …”.[58] As mould, mildew and other fungal organisms are living organisms, they are a “biological entity”.

[56] Chambers

[57] Chambers

[58] Chambers

That raises the question whether “mould” comes within the definition of “pest” as defined in s 3 of the Code. I have set out the definition at [16] above. In order to be regarded as a “pest”, mould, mildew and other fungal organisms must injuriously affect “… the physical condition, worth or utility of an animal, plant or thing”. In this case, “an animal” would include humans. A “thing” would be a surface. Again based on the evidence of Dr Neumeister-Kemp, I find that mould has a deleterious effect on humans and particularly because of its proteins, exoenzymes and mycotoxins.[59] Therefore, it injuriously affects the condition of an animal being a human being. Mould, mildew and other fungal organisms also injuriously affect the condition of surfaces by contaminating or infecting them.[60]

[59] Exhibit A at [7.29]

[60] Exhibit A at [7.28]

It follows that a mould, mildew or other fungal organism is a “pest” within the meaning of the Code. Having regard to the label, I am satisfied that ZMSP is represented as destroying a pest in the sense existing mould or mildew in relation to a place or thing being surfaces. That means that ZMSP comes within s 4(2)(a) and is an agricultural chemical product.

I also note that mould, mildew and other fungal organisms come within the definition of a “plant” as that term is defined in s 3.[61] Given the representations made for ZMSP as killing mould and mildew, I find that it is represented as destroying a plant within the meaning of s 4(2)(b). That means that two paths, ss 4(2)(a) and (b), lead me to conclude that ZMSP is an agricultural chemical product within the meaning of s 4.
[61] See [16] above

IS ZMSP A MIXTURE OF SUBSTANCES DECLARED NOT TO BE AN AGRICULTURAL CHEMICAL PRODUCT?

Rust-Oleum submits that ZMSP has been declared not to be an agricultural chemical product because it comes within Item 1 or Item 6 of Part 3 of Schedule 3.

Item 1: Any mould inhibitor for use in the manufacture of various stated goods in certain circumstances

A. Rust-Oleum’s submissions

The submissions made on behalf of Rust-Oleum begin with the meaning of the expressions “mould inhibitor”, “kill” and “disinfectant”. They then move to the words of Item 1 and continue:
“31.     The term ‘mould inhibitor’ refers to a class of substances or mixtures based on an attribute of the class, as required by s 4(4) of the AgVet Act and reflected in the column heading. Sub-paragraph (a) states that the ‘mould inhibitor incorporated into the product’, which makes it clear that the mould inhibitor must be an ingredient that is incorporated into the overall product.
32.      The class of substances/mixtures referred to as ‘mould inhibitor’ is qualified by a list of products into which the substances/mixtures are incorporated, ie: ‘paper, paper pulp, glue, plywood, carpets, plastics, glass, fabrics, domestic items, bedding material, leather goods or surface coatings (including paint but excluding antifouling paint)’. These are the products declared not to be agricultural chemical products (ie because of the class of substances incorporated into them).
33.      The products listed in Item 1 cannot generally be characterised as a ‘mixture of substances’. Products like glue, plastics and glass are reasonably homogenous materials and may be characterised by the chemistry of their constituents. However, products referred to as plywood … , carpets …, domestic items… and bedding material… include goods that are composite items made of more than one material. The function, structure and nature of the goods is not determined (or capable of being described) by reference to the chemistry of any or each of the materials from which they are constructed. They are not a ‘mixture of substances’.
34.      The requirements of the sub-paragraphs of Item 1 are reasonably self-evident and appear not to be in dispute. The key issue in dispute in relation to the construction of Item 1 is the meaning of ‘mould inhibitor’ and the significance of sub-paragraph (c) in understanding its meaning.
35.      Subparagraph (c) refers to the ‘manufactured product’ (ie one of the listed products into which the mould inhibitor has been incorporated. It excludes from the operation of Item 1 such goods in respect of which a pesticide claim is made.
36. As previously submitted, sub-paragraph (c) contemplates that a product into which a ‘mould inhibitor’ is incorporated may have a pesticide effect. If the product did not have a pesticide effect, and a claim is made to that effect, the claim would be a false claim. A false claim in relation to a product is unlawful. Section 89(1)(a) of the AgVet Code prohibits the making of such a claim, as do ss 18 and others of the Australian Consumer Law. Accordingly, if the manufactured product into which a ‘mould inhibitor’ was incorporated were not capable of having effect as a pesticide, sub-paragraph (c) would describe an unlawful product that could not be sold or supplied in any event. This would make sub-paragraph (c) otiose (a provision concerning the need to register an illegal product can have no effect) or its application would lead to the nonsensical conclusion that the illegal product was one that required registration with the APVMA. It is to be assumed that the will of the legislators in drafting the provision is that the provision was intended to not to be unnecessary or nonsensical. Accordingly, it is to be supposed that the ‘manufactured product’ could have effect as a pesticide and that the claim referred to is not a false or illegal claim.
37.      The products listed in Item 1 are products that might be susceptible to mould because the mould inhibitor is incorporated ‘for the protection of the goods’ (sub-paragraph (a)). The only substance or mixture of substances referred to in Item 1 that might have effect as a pesticide is the ‘Any mould inhibitor’ referred to at the start of the provision. It follows that Item 1, on its own terms, contemplates that a substance or mixture answering to the description of ‘mould inhibitor’ might have a pesticide effect – relevantly, to kill mould.
38.      As explained below, the view that substances that answer to the description of a ‘mould inhibitor’ can have the effect of killing mould makes logical and practical sense independently of the manner in which the term is used in Item 1. This is because in most cases the substances that are ‘mould inhibitors’ are also substances that kill mould (depending on a range of conditions). A construction that treats substances that can be described as ‘mould inhibitors’ as excluding substances that can kill mould leads to a false and impossible taxonomy.
39.      The term ‘mould inhibitor’ is more inclusive than a term requiring killing of mould (ie in the less common case in which a substance may act as a mould inhibitor but not kill mould,… it, would be comprehended by the term). An inclusive term avoids ambiguity where the general case is that neither mould-active substances, nor the products containing them can reliably be classified as mould-inhibitors or mould-killers.”[62]
[62] Applicant’s Outline of Argument; footnotes omitted

B. The APVMA’s submissions

Mr Rebikoff submitted that Item 1 applies to mould inhibitors that are intended for use during the manufacturing process and are incorporated into another product during that process. A mould inhibitor that is designed as a stand-alone product would not meet that description. The mould inhibitor must be incorporated into the product for the protection of the goods. Therefore, a mould inhibitor which is incorporated into the product for another purpose, such as the elimination of existing mould outside of the product, would not satisfy this requirement. Even if the mould inhibitor is incorporated into the product for their protection, it will not be exempt from the definition of “agricultural chemical product” if the product is claimed, as ZMSP appears to do, to have any effect as a pesticide.

The central difficulty with Rust-Oleum’s contentions, Mr Rebikoff submitted, is that it ignores the distinction between “mould inhibitor” and the “manufactured product” into which it is to be incorporated. ZMSP is not a product that is intended for use during the manufacturing process in order to protect other goods. It is, instead, a stand-alone product intended to be used to eliminate existing mould, mildew and other odour-causing bacteria whether in the home or elsewhere.

Any suggestion that ZMSP would fall within the terms of Item 1 if it were not claimed to kill mould and so not claimed to be, in effect, a pesticide, must fail. The product is ZMSP. The Notice issued by the APVMA under s 101 of the Code was issued in relation to that product and not to its active ingredient, DCOIT. All relevant offences relate to the supply of products and not to the supply of active constituents. It cannot be said that DCOIT is incorporated in ZMSP for the protection of paint for that would contradict the claims made for it on its label i.e. “Paint directly over existing mould, mildew, odour causing bacteria and any other fungal organisms Binds to chalky surfaces, masonry & metal Great for use under wallcoverings Household Grade Disinfectant”.[63]
[63] See [5] above

Even if Item 1 were focused on the active ingredient and not on the product in which it is found, Item 1 would only apply if DCOIT were characterised as a “mould inhibitor”. That is a characterisation that is difficult to come to when it said of ZMSP that it “Kills Existing Mould, Mildew and Odour Causing Bacteria”. The ordinary meaning of a “mould inhibitor” is that of a substance whose primary purpose is the prevention of mould. ZMSP has been developed to have a fungicidal effect. To claim that it can act only to prevent the growth of mould would, therefore, be prima facie misleading. It is particularly so when the evidence of Mr Utz Mueller, the Principal Scientist with the APVMA, is to the effect that DCOIT is present in ZMSP in a concentration more than 1,000 times the concentration necessary to kill mould.

C. Consideration

At [15] above, I have set out how to determine whether a particular substance or mixture of substances falls within any of the Items in Part 3 of Schedule 3 and is so declared not to be an agricultural chemical product. Argument centred on whether ZMSP is a mould inhibitor or a mould killer but, for the purposes of Item 1, resolution of that argument is not necessary. It is not necessary because there is no evidence that ZMSP is “… for use in the manufacture of paper, paper pulp, glue, plywood, carpets, plastics, glass, fabrics, domestic items, bedding material, leather goods or surface coatings (including paint but excluding antifouling paint) …”. Looking at “surface coatings (including paint but excluding antifouling paint)” in particular, there is no question on the evidence that ZMSP is itself a surface coating. It is not “for use in the manufacture of … [a] surface coating”.

It follows that ZMSP does not meet the broad criteria in Item 1 but, for completeness, I note that it does not meet the qualifying words to those broad criteria. ZMSP is not incorporated into the “… paper, paper pulp, glue, plywood, carpets, plastics, glass, fabrics, domestic items, bedding material, leather goods or surface coatings (including paint but excluding antifouling paint) …” during their production for their protection. That means that it cannot meet the qualifying criterion in paragraph (a) of Item 1. As ZMSP is not incorporated into a manufactured product, it cannot meet criterion (b) that it not be released into the environment “from the manufactured product”. Whether ZMSP is claimed to have effect as a pesticide or not, it is not the “manufactured product”, to which reference is made in paragraph (c). Therefore, it is not relevant to consider whether ZMSP is, or is not, claimed to have any effect as a pesticide for it is not the “manufactured product” in question. Criterion (c) cannot be met.

Item 6: Any disinfectant, mould inhibitor, air freshener or sanitiser sold by retailers, or presented or promoted primarily through retailers, to consumers for domestic use, except any sanitiser for use in swimming pool or spa water

A. Rust-Oleum’s submissions

Mr Gottschall submitted that the key matters in interpreting Item 6 turn on the meaning of the terms “mould inhibitor” and “disinfectant”. With regard to the term “mould inhibitor”, he submitted that the term is used in Item 1 to refer to a substance or class of substances used as an ingredient in the manufacture of another product referred to in that item. It is equally used to refer to an ingredient in the context of Item 6. In particular, it is used to describe a mould-active ingredient and not the product containing it. Each of the variables identified by Dr Neumeister-Kemp in her report will alter the effect of an ingredient as a mould inhibitor or mould killer.

In her report, Dr Neumeister-Kemp was asked to comment on the following proposition:
“… For a given product containing a mould-active agent, we understand that the following conditions can effect whether it would inhibit mould or cause death of mould organisms when used in a domestic setting:
(a)       the concentration of the mould-active ingredient in the product;
(b)       the formulation of the product (ie the other ingredients in it);
(c)       the species of mould on which it is used;
(d)       the conditions in which the mould is growing (eg access to a food source);
(e)       the conditions of use, such as scrubbing or agitation;
(f)        the duration of the exposure of the mould to the mould-active agent.”[64]
[64] Exhibit A at [7.1]

Dr Neumeister-Kemp responded by summarising her position before expanding on each of the six paragraphs:
“In my opinion, and based on my experience, it is correct to say that each of the above conditions both individually and unison with others, can be expected to have a marked effect on whether a particular mould-active agent acts as a fungistat or fungicide. That is, a given mould-active ingredient can both inhibit mould or kill mould depending on the exact quantification and interplay between each of the above conditions.
The following is a brief examination of each of the above conditions, however, it should be noted that this examination is simplified and the practical situation is more complex, as a result of the interplay between the conditions. That is, in practice, the determination of whether a mould-active agent is a mould-inhibitor or mould-killer is more ‘blurred’ and non-specific than that suggested by a simple single-parameter qualitative effects-analysis.
(a)the concentration of the mould-active ingredient in the product;
Generally the greater the concentration of mould-active agent in a given formulation, the more likely it is to act a mould-killer.
(b)      the formulation of the product (i.e. the other ingredients in it);
Other ingredients in a formulation have a marked effect on the performance of a mould-active agent. For example surfactants in a formulation (e.g. cleaners) may make the mould-active agents more effective against mould species which have an associated bio-film, relative to mould spices [sic] without bio-film.
(c)      the species of mould on which it is used;
Given the number of different mould species and the diverse range of characteristics thereof, the precise mechanism of action of the mould-active agent could result in the subject agent being mould-inhibitor against one mould species and a mould-killer against another species.
(d)      the conditions in which the mould is growing (eg access to a food source);
The more favourable the conditions for mould growth the less likely a given agent will act as mould killer.
(e)      the conditions of use, such as scrubbing or agitation;
The greater the agitation the more complete the exposure to the mould-active agent to the underlying mould. Thus potentially increasing the effective concentration of mould-active agent in a micro-spatial sense. An example of this action would be the genera Chetomium due to its encapsulation.
(f)       the duration of the exposure of the mould to the mould-active agent.
The greater the duration of exposure, and the greater the availability of excess (un-reacted) mould-active agent the greater the potential for the mould-active agent to act as a mould-killer.
Given that the mould-active ingredient (agent), is but one of the variables detailed above, it would be reasonable to characterise such a mould-active ingredient (agent) as both a mould inhibitor and a mould killer, as it could reasonably be expected that, as the range of above variables changed, a given agent could have both actions.”[65]
[65] Exhibit A at [7.2]-[7.10]

To assert that the term “mould inhibitor” is to be understood by reference to the overall product is not construing the text of the AVCC Regulations but changing its meaning, Mr Gottschall submitted. Even if the term “mould inhibitor” were understood to apply to the product as a whole, it would not be possible to give a narrow meaning to it. Even if variables (a) and (b) of those identified by Dr Neumeister-Kemp and relating to the concentration of a mould-active ingredient can be controlled in the manufacture of a product, the other variables cannot. Those other variables relate to the conditions under which the product is used. Neither ZMSP nor its active ingredient could be classified as a mould inhibitor or a mould killer because the evidence of Dr Neumeister-Kemp is that, with a few exceptions, it is not possible to classify products as one or the other as they exhibit both effects under different conditions.

ZMSP is a domestic product that is a mould inhibitor as well as a disinfectant. Therefore, it comes within Item 6 and is excluded from the definition of “agricultural chemical product” in s 4 of the Code.

B. The APVMA’s submissions

On behalf of the APVMA, Mr Rebikoff submitted that, in interpreting Item 6, it is important to keep in mind that none of the terms, “disinfectant, mould inhibitor, air freshener or sanitiser”, is used in the item in isolation. They are terms qualified by the requirement that they be “sold by retailers, or presented or promoted primarily through retailers, to consumers for domestic use …” but that they may not be a “sanitiser for use in swimming pool or spa water”. These qualifying criteria indicate that the products falling within the description of a “disinfectant, mould inhibitor, air freshener or sanitiser” are not defined by reference solely to their functional effects. The products are also defined by reference to the way in which they are presented to, and perceived in, the market.

When read as a whole, the composite expression clearly suggests a class of products with a readily understood and accepted meaning among retailers and consumers i.e. products that are presented to consumers in a consistent way and which share the same essential nature and purpose. In the case of disinfectants and sanitisers, that purpose is to clean and deodorise household surfaces and domestic environments to ensure that they are hygienic and odour-free. Examples include disinfectant sprays[66] and wipes and floor and carpet sanitisers. In the case of mould inhibitors, that purpose is to prevent growth of mould on household surfaces and in domestic environments before it begins. Examples include moisture absorbers[67] and timber treatment preparations.[68] The essential nature and character of each product must be determined and the way in which each is presented to consumers in the market before a determination can be made as to whether it would be regarded by consumers and retailers as falling within what is a commonly understood and accepted class in Item 6.

[66] Examples at Exhibits 3, 4 and 5

[67] Examples at Exhibits 6 and 7

[68] Examples at Exhibits 8 and 9

In the case of ZMSP, it does not fall within that class for its essential nature is not to prevent the growth of mould on household surfaces before it begins but to kill existing mould, mildew and odour causing bacteria by application as a paint primer. That is clear from the label but it is also clear from the level of DCOIT in the ZMSP. Mr Mueller’s evidence is that DCOIT is present at a level more than 1,000 times the minimum concentration necessary to kill mould.

The fact that there are some products, which are sold to consumers for the purpose of killing or removing mould and which also claim to prevent the return of the mould once it has been eliminated, does not change the essential character of these products. The existence of such products does not change the fact that Parliament has chosen to extend the exemption from the definition of “agricultural chemical product” to goods whose essential function is that of a mould inhibitor and not that of a mould killer or eliminator. The Code is alive to the distinction between the two when it defines an “agricultural chemical product” by reference to, among other qualities, a broad range of functional outcomes including destruction and modification, repelling and attracting and so on. In Item 6 of Part 3 of Schedule 3 to the AVCC Regulations, a choice has been made to limit the functional outcome to one of them in relation to the specific target of mould i.e. inhibition and not destruction.

Mr Rebikoff submitted that limiting the term “mould inhibitor” in this way is consistent with the purpose of the exemptions set out in Part 3 of Schedule 3. That purpose is to minimise the need to register products that are unlikely to give rise to significant health, safety or environmental concerns. As Dr Neumeister-Kemp states in her report, products designed to kill mould will generally have a higher concentration of dangerous and mould-active constituents than those which are intended merely to inhibit the growth of mould. The line between a mould inhibitor and a mould killer may be difficult to draw precisely and the APVMA does not contend that a mould inhibitor can never be capable of killing mould. On the contrary, the APVMA’s contention is that, whether a product is properly characterised as a mould inhibitor depends on the essential nature and purpose of the product as it is presented and used in the market rather than its scientific effect. It is entirely consistent with the argument for Parliament to have sought to ensure that a product cannot take advantage of the exemption in Item 6 if it is presented to the market as having the effect of a pesticide.

C.Consideration

The principles set out by the plurality in Sea Shepherd are consistent with those stated in earlier authorities including Lend Lease Real Estate Investments Ltd & v GPT RE Ltd,[69] in which Spiegelman CJ, with whom McColl and Basten JJA agreed, said:
“ The general principle of the law of interpretation that the meaning of a word can be gathered from its associated words – noscitur a sociis – has a number of specific sub-principles with respect to the immediate textual context. The most frequently cited such sub-principle is the ejusdem generis rule. The relevant sub-principle for the present case is the maxim propounded by Lord Bacon: copulatio verborum indicat acceptationem in eodem sensu – the linking of words indicates that they should be understood in the same sense. As Lord Kenyon CJ once put it, where a word ‘stands with’ other words it ‘must mean something analogous to them’. (Evans v Stevens [1791] EngR 1347; (1791) 4 TR 224; 100 ER 986 at 987. See also W J Byrne (ed) Broomes Legal Maxim (9th ed) Sweet and Maxwell, London (1924) pp373-374.)
However, as Lord Diplock put it in Letang v Cooper [1964] EWCA Civ 5; [1965] 1 QB 232 at 247:
‘The maxim noscitur a sociis is always a treacherous one unless you know the sosietas to which the socii belong.’”[70]
[69] [2006] NSWCA 207; Spigelman CJ and McColl and Basten JJA
[70] [2006] NSWCA 207 at [30]-[31]

Read alone, there is no “sosietas”, to which the words “disinfectant, mould inhibitor, air freshener or sanitiser” belong. The ordinary meaning of a “disinfectant” is that of “a germ-killing substance …”[71] and, putting aside a “mould inhibitor” for the moment, it is difficult to find a common sosietas with an “air freshener”. On its face, it neither kills nor inhibits but freshens. Even a “sanitiser” does not necessarily have a close association for it is something that makes something hygienic or sanitary i.e. “it is concerned with promoting hygiene, good health and the prevention of disease. …”.[72] A sanitiser may kill germs or it may achieve its role in another way. It is in this company that the term “mould inhibitor” is used and I have come to the view that, like the other three terms used in Item 6, it does not belong in the same “sosietas”. Therefore, having regard only to the class of substance or substances themselves, nothing can be drawn from the company the term “mould inhibitor” keeps to assist me in interpreting it.
[71] Chambers
[72] Chambers

For the purposes of Item 6, however, there is a common theme that links each of disinfectant, mould inhibitor, air freshener and sanitiser with the other and that is that each is “… sold by retailers, or presented or promoted primarily through retailers, to consumers for domestic use …”. The ordinary meaning of “domestic” is that of “belonging or relating to the home, the family or private life. …”.[73] Apart from referring to “someone or something that consumes”, the ordinary meaning of the word “consumer” refers to “someone who buys goods and services for personal use or need.”[74] The word “retailer” is derived from the word “retail”, which refers to “… the sale of goods, either individually or in small quantities, to customers who will not resell them but who buy them for their own use. …”.[75] The common element that links “any disinfectant, mould inhibitor, air freshener or sanitiser” coming within Item 6 is that each is sold to those who will themselves use the relevant product in their homes or similar domestic setting.
[73] Chambers
[74] Chambers
[75] Chambers

I find that a product such as ZMSP is sold through retailers for the evidence is that it is available through Bunnings. I accept without evidence that Bunnings is a retailer and that, among the products that it sells, are those it sells to consumers for domestic use. That is a matter of common knowledge. Whether it is sold to consumers for domestic use is another matter. Its label describes it as a “household grade disinfectant” but that is not enough for me to draw the conclusion that ZMSP is sold to consumers for domestic use. Its label states: “For Residential Use”. That is not enough for me to conclude that it is for domestic use for “residential use” suggests use in relation to a residential building but, without more, that does not equate with its use in the home or for personal use in the sense of its being for “domestic use”. On its face, ZMSP would seem to be directed at a much wider target than the domestic market.

In a letter dated 21 October 2016, Mr Jagdish Bhatt, Rust-Oleum’s Managing Director, wrote:
“The product is sold primarily for domestic use. The Australian packaging states ‘The Mould Stop Primer is for use on non-porous interior and exterior, residential attics, basements, window frames, bathrooms, wall cavities, baseboards, sub-floors and tabletops.’ …”[76]

This statement does not satisfy me that ZMSP is sold to consumers for domestic use. At its highest, the evidence is that ZMSP is used in residential buildings but it does not satisfy me that it is used by consumers for domestic use as opposed to others in domestic buildings. Without further evidence, I am not satisfied that ZMSP is sold by retailers, or presented or promoted primarily through retailers, “to consumers for domestic use”.

[76] Exhibit C at 1

As to whether ZMSP is a “mould inhibitor”, I have considered whether there is a difference between a “mould inhibitor” and a killer of mould. It seems to me that the AVCC Regulations draw a distinction between killing and inhibiting. In Item 6 itself, it refers to a disinfectant, which is a killer of germs, and to a mould inhibitor but not to a mould killer. More importantly, Part 3 of Schedule 3 refers to a “mould inhibitor” in Item 1, as well as in Item 6, but to “any fungicide, bactericide or deodorant for use in footwear and clothing” in Item 2. A “fungicide” is “a chemical that kills or limits the growth of fungi …”.[77] Item 2 excludes a “fungicide” from the definition of an “agricultural chemical product” only when it is for use in footwear and clothing. The important thing to note, however, is that Part 3 of Schedule 3 recognises a difference between a killer of fungi, which includes mould,[78] and a mould inhibitor. The recognition comes in Item 2, which recognises a fungicide, even if it is only used for a particular purpose, and Items 1 and 6 refer to a “mould inhibitor”. Given the recognition given to the two, I have concluded that a “mould inhibitor” cannot be read as “mould killer” or as “mould inhibitor or mould killer”. Whether a product is a mould inhibitor depends upon the characteristics of the product.
[77] Chambers
[78] See the evidence of Dr Neumeister-Kemp at [71] above

ZMSP is promoted on its label as killing mould, mildew and odour causing bacteria. That is its claim and its claim is supported by the evidence of Dr Mueller when he states:
“‘Zinsser Mould Stop Primer’ is a ready-to-use paint containing 1.23 g/L (or 1230 mg/L) of DCOIT. According to a study conducted in 2007 on the mechanism of action of isothiazolone biocides, at this concentration, the ‘Zissner Mould Stop Primer’ product contains in the order of 2,000 to 10,000 times the minimum inhibitory concentration (MIC) of DCOIT against two different types of fungi, or between 1,500 to 5,000 times the minimum biocidal concentration (MBC). …”[79]
[79] Exhibit 2 at [16]

Mr John Franceschini is a chemical consultant and analyst and a Director of Sharp & Howells Pty Ltd. He compared ZMSP with anti-fouling paints that have a higher concentration of DCOIT but was not asked to address whether ZMSP meets its claims that it will kill existing mould when the concentration of its active ingredient is 1.23g/L.[80]

[80] Exhibit B

Dr Lakshmi Sadasivan evaluated four primer coating samples for fungicidal activity based on the EPA Glass Slide Method and reported his results on 22 December 2014. Four primer samples, including ZMSP, were brush coated on each of three clean glass slides. Spore suspensions of Aspergillus niger at 1 x 10⁸ spores per mL were counted by Haemocytometer and prepared. They were then spread uniformly over the surface of each of the glass slides and allowed to dry. Once dry, the slides were dropped in a neutralizing medium and then incubated for three days. The results showed that ZMSP had marginal efficacy as a mould inhibitor.[81] He was not asked to report on ZMSP’s efficacy as a mould killer.
[81] Exhibit 12

Even if ZMSP has some effect as a mould inhibitor, this does not detract from its being a mould killer. Dr Neumeister-Kemp’s evidence is:
“Given the range of variables and conditions in practice, in my opinion, it is not reasonable to refer to fungistatic and fungicidal in absolute terms but a matter of degree.
A mould-active ingredient (agent) may be fungistatic when applied to, for example, Alternaria spp. but be fungicidal when applied to Aspergillius spp. thus, the mould-active ingredient can be reasonably characterised as both a mould inhibitor (against Alternaria spp.) and a mould killer (against Aspergillius spp.) Given that both mould genera are relatively common moulds, the mould-active ingredient can, in practice, be characterised as having actions as both a mould-inhibitor and a mould-killer. Therefore, a single mould-active agent is both a mould inhibitor and a mould-killer.”[82]
[82] Exhibit A at [7.13]-[7.14]

Dr Neumeister-Kemp explained that, generally, the pertinent determinants of whether a particular mould-active agent acts as a fungistatic or a fungicidal are those she set out in paragraphs (a) to (f) of the question posed to her and which she expanded upon in [7.2] to [7.9] of her report. I have set that out at [85] and [86] above. Her conclusion that a given active ingredient could be reasonably expected to act both as a mould inhibitor or a mould killer depending on the particular state of the variables in play does not relieve me of the task of determining whether the essential characteristic of ZMSP is as a mould inhibitor or as a mould killer. For the reasons I have given above, Parliament has limited the meaning of a “mould inhibitor” to inhibition and not killing.

The essential character of ZMSP is that of a mould killer. Not only is that finding consistent with its presentation through its labelling, it is consistent with the presence of its active ingredient, DCOIT, at levels at which it kills mould. For that reason, ZMSP does not come within the terms of Item 6 of Part 3 of Schedule 3 but it does not come within that item for a further reason. That further reason is that, for the reasons I have given, I am not satisfied that it is sold to consumers for domestic use.

That latter reason would also lead to the conclusion that ZMSP does not meet Item 6 even if I were to find that it is a “disinfectant”. The only reference to its being a disinfectant is the claim made on the front of the label describing it as a “Household Grade Disinfectant”. Apart from that reference, there is no further reference that would suggest that ZMSP is “a germ-killing substance …” in the general sense signified by the word “disinfectant”. It, and its active ingredient, are directed to killing a fungus that is mould or mildew. Its essential characteristic is not that of a disinfectant.

Conclusion

As I have already found that ZMSP is an agricultural chemical product for the purposes of s 4(2) of the Code, my conclusion that it does not fall within Items 1 or 6 of Part 3 of Schedule 3 means that it is not excluded from that description by s 4(3). It is, therefore, a “chemical product” within the meaning of s 3. The parties were in agreement that ZMSP had not been registered under the Agvet Code. That brought into play s 101 of the Code. Rust-Oleum did not make any submissions or lead any evidence directed to a contention that the APVMA should not have given it a written notice under s 101, or a notice in the terms it did, if ZMSP were found to be an agricultural chemical product and so a chemical product that was not registered. In view of that, I have decided that the decision to issue the Notice was appropriate and have decided to affirm the decision of the APVMA dated 10 October 2016.

I certify that the preceding 107 (one hundred and seven) paragraphs are a true copy of the reasons for the decision herein of Deputy President S A Forgie

.......[sgd]..............................................................
Associate
Dated: 10 November 2017

Date of hearing:

18 April 2017

Counsel for the Applicant:

Solicitor for the Applicant:

Mr Jon Gottschall

Ms Heather Richardson
Kalus Kenny Intelex

Counsel for the Respondent:

Solicitor for the Respondent:

Mr Stephen Rebikoff

Mr Michael Palfrey
HWL Ebsworth Lawyers