Rust-Oleum Australia Pty Ltd and Australian Pesticides & Veterinary Medicines Authority
[2017] AATA 298
•9 March 2017
Administrative Appeals Tribunal
ADMINISTRATIVE APPEALS TRIBUNAL )
) 2016/5503
GENERAL DIVISION )Re:Rust-Oleum Australia Pty Ltd
Applicant
And:Australian Pesticides & Veterinary Medical Authority
Respondent
CORRIGENDUM TO DECISION [2017] AATA 162
The Tribunal amends its decision of 9 March 2017 as follows:
1. at [34], citing the Full Court of the Federal Court in Madafferi v Minister for Immigration and Multicultural Affairs [2001] FCA 250; (2001) 106 FCR 76; 184 ALR 473; 63 ALD 373, in the second sentence of that citation by deleting “relevant serious question” and inserting “relevant question whether there is a serious question”;
2. at [35], in the last line by deleting “Von” and inserting “von”;
3. at [42], citing the Full Court of the Federal Court in Australian Securities and Investments Commission v Administrative Appeals Tribunal [2009] FCAFC 185; (2009) 181 FCR 130, in the fourth line of that citation by deleting “time of the original decision-maker” to “time of the original decision”; and
4. at [43], at the beginning of the paragraph, by deleting “Her” and inserting “His”.
…[sgd]………..
S A FORGIE
Deputy President
Rust-Oleum Australia Pty Ltd and Australian Pesticides & Veterinary Medicines Authority [2017] AATA 298 (9 March 2017)
Division: GENERAL DIVISION
File Number: 2016/5503
Re: RUST-OLEUM AUSTRALIA PTY LTD
APPLICANT
And:AUSTRALIAN PESTICIDES & VETERINARY MEDICINES AUTHORITY
RESPONDENT
DECISION
Tribunal Deputy President S A Forgie
Date 9 March 2017
Place Melbourne
The Tribunal decides to:
(1)set aside the order made on 21 October 2016 staying the operation or implementation of the respondent’s decision dated 10 October 2016 until the Tribunal hears and determines the application for review or until further order; and
(2)substitute a decision 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 respondent to the applicant, the operation or implementation of the decision of the respondent 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 respondent to the applicant and paragraph 3 of that same Notice are NOT stayed.
…[sgd]..……….
Deputy President
CATCHWORDS – AGRICULTURAL AND VETERINARY CHEMICALS - STAY APPLICATION – notice to recall and cease supply of product containing unregistered constituent – postponement of hearing - whether decision should continue to be stayed – partial stay ordered
LEGISLATION
Administrative Appeals Tribunal Act 1975 ss 3, 29, 37, 41, 42B, 69BA
Agriculture and Veterinary Chemicals Act 1994 ss 3, 12
Agricultural and Veterinary Chemicals Code Act 1994 s 3, Schedule – Agricultural and Veterinary Chemicals Code and ss 3, 4, 5A, 89, 101, 167
Corporations Act 2001
Food Standards Australia New Zealand Act 1991 s 3
Industrial Chemicals (Notification and Assessment) Act 1989
Migration Act 1958 ss 476, 482, 501A
Therapeutic Goods Act 1989 ss 52D(2)(b), 52EAgricultural and Veterinary Chemicals Code Regulations 1995 item 6 of Part 3 of Schedule 3
Poisons Standard November 2016 Schedule 6
CASES
Australian Securities and Investments Commission v Administrative Appeals Tribunal [2009] FCAFC 185; (2009) 181 FCR 130
Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission and Others (2000) 203 CLR 194; 174 ALR 585
Drake v Minister for Immigration and Ethnic Affairs (1979) 24 ALR 577; 2 ALD 60
Madafferi v Minister for Immigration and Multicultural Affairs [2001] FCA 250; (2001) 106 FCR 76; 184 ALR 473; 63 ALD 373
Re Benjamin and Commissioner of Taxation [2017] AATA 39
Re Scott and Australian Securities and Investments Commission [2009] AATA 798; (2009) 51 AAR 114
Re Wang and Minister for Immigration and Border Protection [2016] AATA 595
Windshuttle v Commissioner of Taxation [1993] FCA 553; (1993) 46 FCR 235; 93 ATC 4992; 27 ATR 88SECONDARY MATERIAL
Macquarie Dictionary, revised 3rd edition, 2001, The Macquarie Library Pty Ltd
REASONS FOR DECISION
BACKGROUND
There is no disagreement between the parties as to the facts forming the background to this matter. In view of that, I will set out the facts on which I have relied for the purposes of making a decision on the application of the Australian Pesticides and Veterinary Medicines Authority (APVMA) to set aside the stay that is presently in force.
Zinsser Mould Stop Primer (Product) is manufactured in the United States of America (USA). Since August 2015, Rust-Oleum Australian Pty Ltd (Rust-Oleum) has distributed the Product in Australia through some 400 suppliers but with over 80% distributed through Bunnings stores.
The Product is said to “kill existing mould, mildew and odour causing bacteria” and to act as a “fungicidal protective coating”. Its 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 is a broad spectrum antifungal biocide frequently used in paints, coatings, silicone sealants, plastics and marine antifouling paints. It is also used in the preservation of wood, masonry and other masonry products. On the Product’s label, DCOIT is listed at a concentration of 1.23g/L or 1230mg/L. That level of DCOIT is more than 5,000 times the minimum inhibitory concentration (MIC) for fungus and more than 1,500 times its minimal biocidal concentration (MBC).
DCOIT is currently 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”.
In July 2016, the APVMA contacted Rust-Oleum raising a number of concerns about the Product. Among those concerns was the fact that the Product was not registered with the APVMA as an “agricultural chemical product” under the Agricultural and Veterinary Chemicals Code ( “Code”[1]). The Code is a Schedule to the Agricultural and Veterinary Chemicals Code Act 1994 (AVCC Act). In APVMA’s view, the Product should have been registered as an “agricultural chemical product” under that Code.
[1] The Code is the Agvet Code of the participating Territories as defined in the Agriculture and Veterinary Chemicals Act 1994; ss 3 and 12: Agricultural and Veterinary Chemicals Code Act 1994; s 3.
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 the Product and to retrieve existing stocks of that Product from the Australian market.
On 5 September 2016, Rust-Oleum responded by claiming that the Product:
(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 the Product as a primer designed to coat over mould or mildew affected surfaces to act as a base for over-coating with a paint.[2] 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.[3]
[2] (Documents lodged under s 37 of the Administrative Appeals Tribunal Act 1975 (AAT Act)) (T documents); T16 at 88
[3] T documents; T16 at 90
After considering Rust-Oleum’s response, a delegate of the AVPMA decided on 6 October 2016 to issue the compulsory notice under s 101 of the Code to Rust-Oleum for an agricultural chemical product that is not registered (Notice).[4] In doing so, the delegate rejected Rust-Oleum’s legal arguments. In essence, she took the position that, as mould is a biological entity, it is a “pest” for the purposes of the definition of the Code. The Product is represented as a means of directly or indirectly destroying the pest that is mould in relation to a “thing” such as surfaces. Therefore, the Product is an “agricultural chemical product”.
[4] T documents; T17 at 119-125
In relation to the claim that the Product comes within the exemptions in Item 1 of Part 3 of Schedule 3, the delegate adopted the proposition that, if a product is of a higher risk (because of its active or other ingredients or because of additional claims or uses) than the product class defined at that item, the exemption cannot be relied upon. While Item 1 refers to “mould inhibitors”, the Product claims to “kill”, and so destroy, mould. There is, the delegate found, a significant difference between inhibiting and killing. The difference is of such significance that it is not covered by the exemption. The claims that have been made for the Product may be such that it should be characterised as a “pesticide”. It would not be covered by the exemption in those circumstances.
As for Item 6 of Part 3 of Schedule 3 upon which Rust-Oleum relied, the delegate of the AVPMA decided, it exempts “any disinfectant, mould inhibitor, air freshener or sanitiser … for domestic use …”. Rust-Oleum claims that the Product is a “Household Grade Disinfectant” for “Residential Use”. Although the delegate did not dispute that the Product has a disinfecting effect, she found that its end use is not properly characterised as that of a household disinfectant. The directions for its use are consistent with those given for the use of a normal paint product.
Apart from concerns about Rust-Oleum’s customers inadvertently and unknowingly exposing themselves to the risk of contravening ss 75 and 78 of the Code by possessing the Product with an intention to sell it, the delegate expressed the following concerns:
“32. The product contains an active constituent that has been previously approved by the APVMA, however the approved active constituent is not known to be linked in any way to the product.
33.The product is classified as a Schedule 6 Poison by the SUSMP. Any risks (i.e. regarding efficacy and safety) associated with the use of the product have not been considered by the APVMA. The product, in current form, may pose an unacceptable risk to people who handle and use the product and in the future may pose an unacceptable risk to humans if exposed to sanding dust from preparing surfaces previously treated with the product.
34.If the product remains on the market without being registered, it may bring the regulatory system into disrepute.”[5]
[5] T documents; T17 at 123
Rust-Oleum could have chosen to recall the Product voluntarily but did not. APVMA issued a notice under s 101 of the Code describing the Product and requiring Rust-Oleum to do two things. First, it had to stop supplying it to any person. Second and by no later than 24 October 2016, it had 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 the Product is subject to a notice under s 101 of the Code and requesting it to be returned to Rust-Oleum.[6]
[6] T documents; T18 at 228-230
On 13 October 2016, Rust-Oleum lodged an application in the Tribunal for review of the decision made under s 101 to issue the notice.[7] On 20 October 2016, the Tribunal granted a stay of the decision. APVMA consented to that stay on the basis that the Tribunal was prepared to hear and determine the matter on an expedited basis. Rust-Oleum did not comply with the timetable for lodgement of documents, to which it consented at the hearing of its stay application. A revised timetable has been put in place but the APVMA no longer consents to the stay’s remaining in place.
[7] Section 167(1)(k) provides that an application may be made to the Tribunal for review of a decision made by APVMA of a decision to issue a recall notice. A notice issued under s 101 is such a notice.
LEGISLATIVE BACKGROUND
Four separate regulatory regimes regulate chemicals used in Australia. They are the regimes created under the:
(1) Agricultural and Veterinary Chemicals Code
(a)The Preamble following the Long Title to the AVCC Act refers to the desirability of establishing a uniform regulatory system of agricultural chemical products and veterinary chemical products that is open and accountable and that gives opportunity for public input with respect to their regulation. Underpinning the desirability of such a system are the following considerations:
“(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; and
(c)that the furthering of trade and commerce between Australia and places outside Australia, and the present and future economic viability and competitiveness of primary industry and of a domestic industry for manufacturing and formulating such products, are essential for the well being of the economy and require a system for regulating such products that is cost effective, efficient, predictable, adaptive and responsive; …”
(b)The object of the Code established under the AVCC Act 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.”[8]
[8] Code; s 1
(c)An “agricultural chemical product” is defined in s 4 of the Code.
(i)Section 4(3) provides that the expression includes “… a substance or mixture of substances declared by the regulations to be an agricultural chemical product.”
(ii)Section 4(4)(b) provides that the expression does not include “…a substance or mixture of substances declared by the regulations not to be an agricultural chemical product.”
(d)Section 7 of the AVCC Regulations provides that the substance or mixture of substances that are agricultural chemical products are set out in Part 2 of Schedule 3 and those that are not are set out in Part 3 of that same Schedule.
(e)Part 3 of Schedule 3 declares the following not to be agricultural chemical products:
“Item 1
Any mould inhibitor for use in the manufacture of paper, paper pulp, glue, plywood, carpets, plastics, glass, fabrics, domestic items, bedding material, leather goods for 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 effect as a pesticide”.
“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”.
(f)Part 6 of the Code is concerned with Recall Notices. It sets out the circumstances in which the APVMA may issue recall notices requiring persons who have, or have had, stocks of chemical products in their possession to stop supplying them and to take certain action in relation to those chemicals.
(g)Section 101 of the Code provides that the APVMA may issue a Recall Notice if a chemical product, other than a reserved chemical product, is not registered under the Code or the APVMA is reconsidering its registration under that Code.
(h)Part 2 of the Code is concerned with approval of active constituents for proposed or existing chemical products, registration of chemical products and approval for labels for containers for chemical products. Section 14 provides that the APVMA must approve the active constituent if, among other criteria, it meets the safety criteria, the trade criteria and the efficacy criteria or complies with the established standard for the product.
(2) Therapeutic Goods Act 1989
(a)The object of the Therapeutic Goods Act 1989 (TG Act) is, so far as the Constitution permits, to:
“(a) provide for the establishment and maintenance of a national system of controls relating to the quality, safety, efficacy and timely availability of therapeutic goods that are:
(i) used in Australia, whether produced in Australia or elsewhere;
(ii) exported from Australia;
(b) to provide a framework for the States and Territories to adopt a uniform approach to control the availability and accessibility, and ensure the safe handling, of poisons in Australia.”[9]
[9] TG Act; s 4(1)
(b)Subject to exceptions set out in paragraphs (c) to (h) of the definition, the expression “therapeutic goods” is defined in s 3(1) to mean goods:
“(a) that are represented in any way to be, or that are, whether because of the way in which the goods are presented or for any other reason, likely to be taken to be:
(i) for therapeutic use; or
(ii) for use as an ingredient or component in the manufacture of therapeutic goods; or
(iii) for use as a container or part of a container for goods of the kind referred to in subparagraph (i) or (ii); or
(b) included in a class of goods the sole or principal use of which is, or ordinarily is, a therapeutic use or a use of a kind referred to in subparagraph (a)(ii) or (iii);
and includes biologicals, medical devices and goods declared to be therapeutic goods under an order in force under section 7 …”
(b)The Poisons Standard has been made under s 52D(2)(b) of the TG Act by the Secretary and is a legislative instrument. In exercising the power under s 52D(2), the Secretary is required to comply with guidelines specified by certain bodies and have regard to recommendations of others. The Secretary may seek advice from others[10] but, in making the Poisons Standard must take into account, if relevant:
[10] TG Act; ss 52E(2)-(5)
“(a) the risks and benefits of the use of a substance;
(b) the purposes for which a substance is to be used and the extent of use of a substance;
(c)the toxicity of a substance;
(d) the dosage, formulation, labelling, packaging and presentation of a substance;
(e) the potential for abuse of a substance;
(f) any other matters that the Secretary considers necessary to protect public health.”[11]
[11] TG Act; s 52E(1)
(c)The Poisons Standard comprises the Standard for the Uniform Scheduling of Medicines and Poisons (SUSMP) with the particular version of that Standard changing from time to time. With effect from 1 November 2016, the version was SUSMP15.
(d)The Introduction to the SUSMP states that:
“… poisons are classified according to the Schedules in which they are included.”
A “poison” is defined in cl 1(1) of the SUSMP to mean “any substance or preparation included in a Schedule” and the Classification in the Introduction provides a general description of poison with respect to Schedule 6:
“Poison – Substances with a moderate potential for causing harm, the extent of which can be reduced through the use of distinctive packaging with strong warnings and safety directions on the label.”
(e)Poisons are categorised and allocated to one or other of, effectively, seven schedules with the “Principles of Scheduling” providing:[12]
[12] Schedule 1 is left blank in the SUSMP
“Poisons are not scheduled on the basis of a universal scale of toxicity. Although toxicity is one of the factors considered, and is itself a complex of factors, the decision to include a substance in a particular Schedule also takes into account many other criteria such as the purpose of use, potential for abuse, safety in use and the need for the substance.
This Standard lists poisons in ten Schedules according to the degree of control recommended to be exercised over their availability to the public.
Poisons for therapeutic use (medicines) are mostly included in Schedules 2, 3, 4 and 8 with progression through these Schedules signifying increasingly restrictive regulatory controls.
For some medicines and agricultural, domestic and industrial poisons, Schedules 5, 6 and 7 represent increasingly stricter container and labelling requirements with special regulatory controls over the availability of the poisons listed in Schedule 7. Products for domestic use must not include poisons listed in Schedule 7.
…”
(f)The SUSMP sets out standards to be met for all poisons for matters such as strength, quantities, packaging, labelling, distribution, sale and so on. Poisons classified to Schedule 6 must be labelled with the word “Poison”.[13] They must have warnings and safety directions as specified by cl 1.3 of the SUSMP.
[13] SUSMP; cl 1.3(1)(a)
(g)DCOIT is listed in Schedule 6 to the SUSMP.
(h)The general description of the poisons classified to Schedule 7 to the SUSMP is:
“Dangerous Poison – Substances with a high potential for causing harm at low exposure and which require special precautions during manufacture, handling or use. These poisons should be available only to specialised or authorised users who have the skills necessary to handle them safely. Special regulations restricting their availability, possession, storage or use may apply.”
(i)The general description of the poisons classified to Schedule 10 to the SUSMP is:
“Substances of such danger to health as to warrant prohibition of sale, supply and use - Substances which are prohibited for the purpose or purposes listed for each poison.”
(3)Industrial Chemicals (Notification and Assessment) Act 1989
(a)The object of the Industrial Chemicals (Notification and Assessment) Act 1989 (ICNA Act) include the provision of:
“(a) a national system of notification and assessment of industrial chemicals for the purposes of:
(i) aiding in the protection of the Australian people and the environment by finding out the risks to occupational health and safety, to public health and to the environment that could be associated with the importation, manufacture or use of the chemicals; and
(ii)-(iv) …;
being a system under which information about the properties and effects of the chemicals is obtained from importers and manufacturers of the chemicals; and
(b) national standards for cosmetics imported into, or manufactured in, Australia and the enforcement of those standards.”[14]
[14] ICNA Act; s 3
(4)Food Standards Australia New Zealand Act 1991
(a)The Food Standards Australia and New Zealand Act 1991 (FSANZ Act) establishes a joint body known as Food Standards Australia New Zealand:
“The object of this Act is to ensure a high standard of public health protection throughout Australia and New Zealand by means of the establishment and operation of a joint body to be known as Food Standards Australia New Zealand to achieve the following goals:
(a) a high degree of consumer confidence in the quality and safety of food produced, processed, sold or exported from Australia and New Zealand;
(b) an effective, transparent and accountable regulatory framework within which the food industry can work efficiently;
(c) the provision of adequate information relating to food to enable consumers to make informed choices;
(d) the establishment of common rules for both countries and the promotion of consistency between domestic and international food regulatory measures without reducing the safeguards applying to public health and consumer protection.”
THE SUBMISSIONS AND EVIDENCE
On behalf of Rust-Oleum, Mr Gottschall of counsel submitted that the APVMA has no authority to require registration in respect of the Product. Even if it were to have that authority, the APVMA’s functions in respect of public health and safety would simply be duplicating the functions already exercised by the Secretary of Health under the TG Act. Relying on the statement of Mr Jagdish Bhatt dated 21 October 2016, Mr Gottschall submitted that there have been no reported issues with the Product. Unlike the Secretary under the TG Act, the APVMA has not considered safety issues. The APVMA’s concerns are, he continued, based on nothing more than speculation about the possibility of safety issues that might occur in the absence of a safety assessment. Even if the APVMA were in a position to offer a level of protection to public health and safety that has not been provided under the scheme of regulation set out in the TG Act, a stay of its decision would only have a small effect on the overall sale of the Product. The Product has been available for sale in the Australian market since August 2015. Given that the revised hearing date is a date in April 2017, any effect on public safety in the meantime would be small at best.
Mr Gottschall referred to an affidavit by Dr Utz Meuller, who is a Principal Scientist at the APVMA and holds a PhD in Pharmacology. In his position, he has over 20 years’ experience as regulatory toxicologist undertaking risk assessments for pesticides and veterinary medicines, human therapeutic drugs and natural contaminants in food. He has provided expert toxicological advice on health risk assessments undertaken by the APVMA. In the course of his affidavit, Dr Meuller noted that DCOIT was first approved by the APVMA as an active constituent in agricultural chemical products in 1995. He referred to there currently being three marine anti-fouling paint products which contain DCOIT as the active constituent and that have been registered by the APVMA. The concentration of DCOIT ranges from 13.8 g/L for one of those anti-fouling paint products to 35-38 g/L for the other two. All three anti-fouling paint products are organic solvent based and all three carry more stringent safety directions than are currently listed for the Product. They include one of the variations reflected in this passage:
“… when opening the container, preparing product for use and using the product, wear cotton overalls buttoned to the neck and wrist, a washable hat, elbow length [‘chemical resistant’ or ‘rubber’] gloves and full facepiece respirator with combined dust and gas cartridge [or caniser].”[15]
The APVMA, Dr Meuller deposed, has never registered any chemical product containing DCOIT for use in a domestic setting.
[15] Affidavit of Dr Meuller at [21] and see also Annexure UM-3
Mr Gottschall countered the contents of Dr Meuller’s affidavit by reference to an affidavit by Mr John Franceschini sworn on 3 February 2017. Mr Franceschini has a Bachelor of Science with Honours in Chemistry and over 30 years’ experience in chemical analysis. He is a Director of Sharp & Howells Pty Ltd, chemical consultants and analysts, and has worked for that firm since 1984. Before becoming a Director, he has held positions in that company of Analytical Chemist and Materials Scientist, Principal Consultant and Laboratory Manager.
In summary, in relation to the three anti-fouling paint products to which Dr Meuller referred, Mr Franceschini made, in essence, the following points in reaching his conclusion that the three anti-fouling paint products are not comparable with the Product with regard to their intended applications or with regard to the safety and handling precautions applicable to them:
(1)The three anti-fouling paint products are not comparable with the Product because their concentration of DCOIT is between approximately 11 and 30 times greater than that contained in the Product. Greater concentration of a constituent generally leads to greater exposure but whether one is proportionate to the other depends upon other factors;
(2)The three anti-fouling paint products are solvent based (mostly hydrocarbon solvents) and the Product is water based. Chemicals in solvent based media are commonly absorbed into the skin to differing degrees and at different rates when compared with chemicals in aqueous media. It cannot be assumed that the potential for disclosure to DCOIT in solvent based paints will be comparable to that for water based paint.
(3)In addition to DCOIT, the three anti-fouling paint products contain solvents such as naptha, xylene, aromatic hydrocarbons and ketones. Those solvents require handling and safety precautions that are not applicable to water based paints, such as the Product. There are concerns about the potential carcinogenic qualities of these solvents but none has been classified as carcinogenic as such. Hydrocarbons liquid aroma, which are contained in one of the three anti-fouling paint products, commonly contain xylene but may contain benzene. Benzene is a known carcinogenic.
Putting aside potential damage to the market for the Product and for Rust-Oleum products generally as well as for Rust-Oleum’s business relationships, Mr Gotschall referred to the evidence of Mr Jagdish Bhatt, who estimated the cost of recalling the products to be in the order of $104,350. Mr Bhatt is the Managing Director of Rust-Oleum. Mr Bhatt wrote, in part, in a letter dated 21 October 2016:
“The negative impact surrounding this potential recall would have a serious impact on Rust-Oleum Australia, both financially and in terms of reputational damage to the Zinsser and Rust-Oleum brands which would extend well beyond the duration of the recall.
…
With regard to the immediate direct financial impact:
·…
·The turnover of Zinsser branded products to Rust-Oleum Australia represents in excess of 50% to the annual turnover in the market of all Rust-Oleum products.
·We currently have $180,000-$200,000 of inventory in the market and the estimated cost of a recall is approximately $104,350.
Product recalls involve substantial effort and resourcing both for the manufacturer undertaking the recall and for the suppliers and retailers involved in a product recall. This involves disruption to ordinary business operation and associated labour and management resources.
·After a product recall, suppliers and retailers are commonly reluctant to continue trading in the product when they are invited to take further supply of product after a recall. Supply and sale of the product in question is commonly replaced by the sale of an alternative product. Rust-Oleum Australia does not have an alternative product to offer in place of the Primer and sales of the Primer would likely be replaced by a competitor product. If the Primer is replaced by sale of a competitor product, it will be difficult to persuade retailers and suppliers to replace the competitor product with a new supply of the Primer (after a review of the decision or whatever change is necessary to make the Primer compliant). The Primer would need to replace an incumbent product with the disadvantage of the recent product recall. It is reasonable to expect that it would take a few years, possibly several years, to regain the level of acceptance of suppliers and sellers that the Primer currently enjoys.
·The recall would also have a detrimental effect on the Zinsser and Rust-Oleum brand image and the reputation in the Australian market. Traders and consumers would not necessarily appreciate the reason for the recall and in at least some cases will incorrectly assume that was a consequence of product faults such as problems with efficacy or safety. This would harm brand reputation in the Australian market. A recall of the Primer could therefore have a negative impact on other products supplied by Rust-Oleum Australia.
·There is high competition for shelf space at key retailers. If Rust-Oleum loses shelf space at a major retailer, such as Bunnings, it is not guaranteed that it will regain the shelf space. There is also the risk that Bunnings will be less likely to supply a broader range of products offered by Rust-Oleum Australia at its stores and will instead choose alternative products from competitors to make up the range of product types it offers.”
While not accepting that the Notice was validly issued, Mr Gottschall stated at the hearing that Rust-Oleum has ceased supplying the Product to its distributors and retailers.
Mr Gottschall submitted the Rust-Oleum relies on Item 6 of Part 3 of Schedule 3 of the AVCC Regulations as excluding the Product from the definition of an “agricultural chemical product”. The Product is mould inhibitor. What is meant by the term “mould inhibitor” is understood when regard is had to Item 1 of Part 3 of Schedule 3. On APVMA’s interpretation, a “mould inhibitor” does not kill mould; only inhibits mould. If that is so, a claim that it has effect as a pesticide would be prohibited by s 89(1)(a) of the Code[16] and by consumer law generally. If a product were to bear a false claim, its sale would be unlawful. Therefore, to limit the meaning of “mould inhibitor” to a product that does not kill mould makes nonsense of the requirement in (c) of Item 1 of Part 3 of Schedule 3 to the AVCC Regulations that the manufactured product is not claimed to have any effect as a pesticide i.e. to kill mould. Furthermore, to claim that a “mould inhibitor” does not kill mould but merely inhibits it is nonsensical in practical terms. Mould agents can be either depending on their concentration and a range of other conditions.
[16] Section 89(1)(a) of the Code states that “A person must not do, or cause or permit to be done, any of the following: (a) publish or communicate any false or misleading information about a chemical product; …”
In conclusion, Mr Gottschall submitted, there is no reason to suppose that the Secretary has failed to safeguard public safety in relation to DCOIT or in relation to the Product. Lifting the stay could do no more than shorten the availability for sale of the Product from about 20 months to about 18 months. The harm to Rust-Oleum of lifting the stay before a final determination could not be remedied and would make a successful outcome nugatory. There is substantially no justification for lifting the stay and the APVMA’s application to do so is unwarranted. Halting supply of the Product to retailers and distributors is also unnecessary as this is already being done.
On behalf of the APVMA, Mr Rebikoff submitted that it is appropriate to vary or revoke the stay as there are genuine prima facie concerns about the safety of the Product due to DCOIT’s being its active constituent. As Rust-Oleum has not applied for registration of the Product, the APVMA has not had an opportunity to assess whether the Product meets the safety criteria as set out in s 5A of the Code. The public interest in the protection of the health and safety of members of the public outweighs any adverse commercial effects on Rust-Oleum’s business that are likely to follow from implementation of the Notice. The ten week delay in the listing of the hearing will permit there to be a significant increase in the volume of untested and unregulated Product that is released for sale on the Australian market.
There are clear prima facie concerns about the safety of the active constituent in the Product. That constituent is a Schedule 6 poison and has not previously been approved by the APVMA for use in a domestic context and which ordinarily requires special equipment to ensure safe handling and application. Mr Rebikoff relied on the affidavit of Dr Meuller at [11]-[22] on this point. In the absence of a detailed examination of the toxicology of the Product and the safety and first aid instructions adopted for its use, neither the APVMA nor the Tribunal can be satisfied that the instructions printed on the Product’s label are appropriate and sufficient to allow it to be used safely in a domestic setting. The evidence of Dr Meuller regarding the nature of DCOIT supports the view that the Product contains a constituent that is potentially very harmful to human beings and which requires stringent safety directions in order to minimise the chance of severe injury.
Commercial considerations cannot outweigh those of public safety. At worst, the effect of lifting the stay will involve a loss of revenue for Rust-Oleum and a relatively minor disruption to its operations and associated labour and management resources. Any suggestion of broader impacts on its future sales of Zinsser products and impact on Rust-Oleum is purely speculative. Failure to leave the stay in place will not render the subject matter of the application nugatory. The balance of convenience clearly favours the suspension of sales of the Product pending the hearing and determination of the proceeding. That is particularly so given that it is Rust-Oleum’s delay in gathering its evidentiary material that is the reason for vacating the hearing dates originally fixed for 6 and 7 February 2017.
THE TRIBUNAL’S POWER TO MAKE A STAY ORDER
Unless altered by the enactment that provides for an application to be made to the Tribunal for review of a decision, the mere fact that such an application has been made neither affects the operation of the decision nor prevents the decision-maker from implementing it.[17] A party to a “proceeding”[18] may request that the Tribunal make an order affecting the operation or implementation of the decision. Section 41(2) sets out the circumstances in which the Tribunal has power to make an order of this kind:
“… if the Tribunal is of the opinion that it is desirable to do so after taking into account the interests of any persons who may be affected by the review, make such order or orders staying or otherwise affecting the operation or implementation of the decision to which the relevant proceeding relates or a part of that decision as the Tribunal considers appropriate for the purpose of securing the effectiveness of the hearing and determination of the application for review.
Note:…”
[17] AAT Act; s 41(1)(b)
[18] The word “proceeding” is widely defined in the AAT Act but includes an application for review (AAT Act; s 3(1)) but not a proceeding in the Social Services and Child Support Division: AAT Act; Note to s 41(1).
Once it has made an order under s 41(2) and a party to the particular proceeding when the order was made has requested a variation or revocation of the order, the Tribunal may make such an order.[19] Unless reasons of urgency or otherwise satisfy that it should act otherwise, the Tribunal must give the decision-maker a reasonable opportunity to make submissions in relation to the matter.[20]
[19] AAT Act; s 41(3)
[20] AAT Act; ss 41(4) and (5)
An order that has been made under s 41(2) or varied under s 41(3):
“(a) is subject to such conditions as are specified in the order; and
(b)has effect until:
(i)where a period for the operation of the order is specified in the order – the expiration of that period or, if the application for review is decided by the Tribunal before the expiration of that period, the decision of the Tribunal on the application for review comes into operation; or
(ii)if no period is so specified – the decision of the Tribunal on the application for review comes into operation.”[21]
[21] AAT Act; s 41(6) If an order is made without giving that opportunity, it does not come into operation until a notice setting out the terms of the order is given to that person: AAT Act; s 41(6).
Re Scott and Australian Securities and Investments Commission
In Re Scott and Australian Securities and Investments Commission[22] (Scott), Downes J as President of the Tribunal outlined matters to which he considered that the Tribunal needs to have regard in considering an application under s 41(2). They include:
[22] [2009] AATA 798; (2009) 51 AAR 114
“… In considering the application, it is appropriate for me to consider a range of matters, including:
1. The prospects of success.
2. The consequence for the applicant of the refusal of a stay.
3. The public interest.
4.The consequences for the respondent in carrying out its functions depending upon whether a stay is granted or not.
5.Whether the application for review would be rendered nugatory if a stay were not granted.
6.Other matters that are relevant, amongst which I would include the length of time that the ban has already been in place and the gap between today and the hearing of the application.”[23]
[23] [2009] AATA 798; (2009) 51 AAR 114 at [4]; 115
While these are relevant matters, I respectfully suggest that care must be taken not to take the six categories of matter, including the examples in the sixth, as an exhaustive checklist of all that is relevant in coming to a decision whether or not to make an order under s 41(2). To do so would, I respectfully suggest, be to run the risk that matters pertinent to the subject matter of the particular decision or particular regulatory scheme may be disregarded. While regard must be had to matters of the sort identified by Downes J, it is important not to lose sight of the question that s 41(2) requires the Tribunal to answer after taking into account the interests of any persons who may be affected by the review. The question is whether the Tribunal is:
“… of the opinion that it is desirable to … make such order or orders staying or otherwise affecting the operation or implementation of the decision to which the relevant proceeding relates or a part of the decision as the Tribunal considers appropriate for the purpose of securing the effectiveness of the hearing and determination of the application for review.”
Consideration: interests of any persons who may be affected by the review
The Tribunal is specifically required by s 41(2) to have regard to the interests of “any persons who may be affected by the review”. The description necessarily draws in the parties to the proceeding. Therefore, Rust-Oleum and the APVMA are clearly persons whose interests may be affected in this case. Rust-Oleum is affected as it is the supplier of the Product to other suppliers in the Australian market. As the regulatory body, the APVMA is affected. The way in which their interests may be affected by granting, or not granting, the stay needs to be explored. It is in this context that considerations such as whether or not the application for review would be considered to be nugatory would be explored.
Section 41(2), however, goes beyond the parties to the application for review for it requires consideration to be given to the interests of “any persons whose interests may be affected by the review”. Those persons will be identified by reference to the enactment under which the decision is made and to its underpinning policy. When that is done in this case, the class of persons is widened to include, in general terms, those who use, or who wish to use, the Product or who are affected by its use. That leads to the inclusion of those who supply, or who would wish to supply, the Product to them. This is an indicative list and I do not presume to set out a comprehensive list of those whose interests may be affected.
Consideration: prospects of success
The authorities establish that a consideration of the prospects of success of an application and so the merits of the substantive application must not involve the Tribunal in a full consideration of those merits. The issue arises in various interim or interlocutory proceedings such as an application for an extension of time within which to lodge an application for review of a decision. It did so when Mrs Windshuttle sought such an extension. Von Doussa J explained the relevance of issues relating to the merits of the substantial application in Windshuttle v Commissioner of Taxation[24] (Windshuttle). In essence, when prospects of success are being considered:
“… It is sufficient for that purpose, if the parties chose to so argue their case, to merely identify the factual assertions which the applicant made in the objection, and then to consider whether the application of the law to those assertions would bring about the result for which the applicant contends. In other words the assertions can, if the parties so choose, be treated as pleadings are treated where an application is made to strike out an action on the ground that the pleadings disclose no cause of action. On an application of that kind the true existence of the facts alleged in the pleadings is not explored by evidence. … [W]here the issue is whether leave should be given to extend time it is inappropriate for the tribunal concerned to embark on a full scale trial of the merits of the underlying question which will be agitated only if time is extended. …”[25]
[24] [1993] FCA 553; (1993) 46 FCR 235; 93 ATC 4992; 27 ATR 88
[25] [1993] FCA 553; (1993) 46 FCR 235; 93 ATC 4992; 27 ATR 88 at [26]; 243-244; 4999 and 95 and approved by Federal Commissioner of Taxation v Brown [1999] FCA 1198 at [12] per Drummond, Sackville and Hely JJ
Having said that, there is a very real question whether the prospects of success are a relevant consideration. No mention is made of them in s 41(2) just as there was no mention made of them in s 482 of the Migration Act 1958 (Migration Act) when the Full Court of the Federal Court decided the case of Madafferi v Minister for Immigration and Multicultural Affairs[26] (Madafferi). I will return to that case below[27] but, for the moment, note that the Full Court was of the view that:
“… For the purpose of s 482, however, it is not a relevant serious question to be tried. Under s 482, there is no requirement that there be a serious question to be tried. There has been no suggestion that the substantive proceeding is an abuse of process or that it should otherwise be dismissed summarily. The only question that arises under s 482 is whether an order is appropriate for the purpose of securing the effectiveness of the hearing and the determination of the appeal.”[28]
[26] [2001] FCA 250; (2001) 106 FCR 76; 184 ALR 473; 63 ALD 373; Heerey, Emmett and Conti JJ
[27] See [44]-[45] below
[28] [2001] FCA 250; (2001) 106 FCR 76; 184 ALR 473; 63 ALD 373 at [27]; 81-82; 479; 378
It seems to me that the principle is equally applicable to s 41(2) of the AAT Act where no mention is made of the prospects of success. Like s 482(2) of the Migration Act, the focus of the order that may be made is entirely on what the Tribunal considers appropriate for the purpose of securing the effectiveness of the hearing and determination of the application for review. The Tribunal may make such an order if it thinks it desirable to do so having regard to the interests of any persons affected by the review just as the Court could under s 482(2). Both of those provisions can be distinguished from the more general power given under s 29(7) of the AAT Act and considered in Windshuttle. Provided a written application for an extension of time has been made by a person seeking to lodge an application for review, the Tribunal may grant the extension if it “is satisfied that it is reasonable in all the circumstances to do so.” What is, or is not, reasonable may encompass a number of factors but it is clear that it will not be “reasonable” to do so if the application has no prospects of success of the sort discussed by Von Doussa J in Windshuttle.
In my view, s 41(2) does not allow for a consideration of what is “reasonable” and, for the reasons I give below,[29] is much more confined to a consideration of whether an order is, or is not, desirable to secure the effectiveness of the hearing and determination of the application for review. Prospects of success have no place in that consideration.[30]
[29] See See [37]-[45] below
[30] If an applicant’s prospects of success were seriously in question to the point where there were thought to be none, it is always open to the Tribunal, either on the application or a party or on its own initiative, to consider the matter under s 42B of the AAT Act. If, after giving the applicant an opportunity to make submissions, the Tribunal is satisfied that an application for review is frivolous, vexatious, misconceived or lacking in substance, has no reasonable prospects of success or is otherwise an abuse of the process of the Tribunal, it may dismiss that application at any stage of the proceeding. Section 42B refers specifically to “an application for review of a decision” and it might be thought, as I did in Re Benjamin and Commissioner of Taxation [2017] AATA 39, that it is confined to an application of that type. I was wrong in thinking that and so wrong in disagreeing with Member Taglieri when she used the power in Re Wang and Minister for Immigration and Border Protection [2016] AATA 595 to dismiss an application for an extension of time. Why I was wrong is because I overlooked s 69BA, which is found in Part VI of the AAT Act under the heading “Miscellaneous”. Section 42B is found in Part IV, which is headed “Reviews by the Tribunal of decisions”. More particularly, it appears in Division 5 which has the general heading of “Procedural powers of the Tribunal”. Questioning the location of s 69BA far from ss 42A and 42B, to which it relates, and without a Note in either to draw attention to it remains a mystery to me but so be it. What is important is that the effect of s 69BA is that it gives the Tribunal power to dismiss an application coming within paragraphs (b), (c), (d), (e), (f) or (h) of the definition of “proceeding” in s 3(1) of the AAT Act as they do to an application for review.
Consideration: public interest
Item 3 in the list from the reasons for decision of Downes J in Scott refers to the public interest. In a joint judgment, Downes and Jagot JJ said in Australian Securities and Investments Commission v Administrative Appeals Tribunal[31] in relation to the exercise of the power under s 41(2) in relation to a decision made under the Corporations Act 2001:
“… [C]areful consideration … must be given by the AAT in any exercise of power under s 41(2) of the AAT Act to the balance of competing rights and interests struck by Parliament as embodied in the terms of the Corporations Act, particularly the balance between the rights and interests of the recipient of the banning order and of the public including existing and potential future clients of the recipient of the banning order. As we have said the scheme which the provisions of the Corporations Act embody – with the potential making of a banning order to remain private unless and until the ASIC decides to make such an order after having given the recipient an opportunity to be heard – is not mere statutory background or a neutral factor in the process of the formation of the required opinion about what is desirable under s 41(2) of the AAT Act. The scheme which Parliament has established in the Corporations Act, and the public interest in the right of the market to know relevant information as soon as practicable, must be treated as a fundamental element in the decision-making process required under s 41(2) of the AAT Act.”[32]
[31] [2009] FCAFC 185; (2009) 181 FCR 130; Moore, Downes and Jagot JJ
[32] 2009] FCAFC 185; (2009) 181 FCR 130 at [71]; 147-148
Given the careful way in which Parliament has drafted s 41(2) and the approach taken by the Full Court in Madafferi to a similarly drafted provision in the form of s 482(2) of the Migration Act, I think that care must be taken as to the way in which regard is had to the public interest. The sorts of matters identified by Downes and Jagot JJ are those that are of concern to the regulator and to those who might deal with the person who was the subject of the banning order. It seems to me that, in keeping with the language used in s 41(2), that these are interests that are more properly addressed as “interests of any persons who may be affected by the review”.
What is desirable?
What is “desirable” is that which is “advisable”[33] having regard to the interests of those affected by the review of the decision. It is a discretionary decision. Identification of the particular legislative context in which a discretionary power is conferred and is to be exercised is important in order to identify the boundaries within which the power may be exercised.[34]
[33] Macquarie Dictionary, revised 3rd edition, 2001, The Macquarie Library Pty Ltd
[34] Coal and Allied Operations Pty Limited v Australian Industrial Relations Commission and Others (2000) 203 CLR 194; 174 ALR 585 at 204-205; 591-592 and see also Drake v Minister for Immigration and Ethnic Affairs (1979) 24 ALR 577; 2 ALD 60 at 590; 70 per Bowen CJ and Deane J and 602; 80 per Smithers J
Items 1, 3, 5 and 6 of the list in Scott are, in my view, more directly relevant to the broader issue relating to the exercise of the discretion. So too are the objects of the scheme of regulation provided for in the enactment under which the decision under review has been made.
The nature of the orders that may be made under s 41(2)
The order that the Tribunal may make under s 41(2) is an “… order or orders staying or otherwise affecting the operation or implementation of the decision to which the relevant proceeding relates or a part of that decision for the purpose of securing the effectiveness of the hearing and determination of the application for review.” I have added emphasis to two elements of the Tribunal’s power as prescribed and will consider each a little further.
A. Operation or implementation of the decision
In Australian Securities and Investments Commission v Administrative Appeals Tribunal, the Full Court of the Federal Court held that the Tribunal’s power extended to staying or otherwise affecting the operation of acts or events that are ancillary to, or consequential upon, the decision under review. As Moore J said after referring to the scheme of the Corporations Act:
“… The context, in its broadest sense … is a legislative scheme which permits the AAT to review decisions on their merits made under enactments and make a decision in substitution of that of the primary decision-maker, operative (unless the AAT otherwise orders) from the time of the original decision-maker: s 43(6), which may involve setting aside the original decision (see s 43(1)(c)). If the decision of the primary decision-maker enlivens statutory provisions creating consequences of the type I have been discussing, it would be an entirely natural and obvious part of the statutory scheme for the AAT to have power to modify or prevent those consequences in circumstances where the decision of the primary decision-maker might later be set aside.”[35]
[35] [2009] FCAFC 185; (2009) 181 FCR 130 at [5]; 133
Her Honour’s conclusion is, I respectfully suggest, reflective of the principle in s 41(1) that the making of an application to the Tribunal for a review of a decision does not affect “… the operation of the decision or prevent the taking of action to implement the decision” (emphasis added). The word “operation” is replicated in s 41(2) but the words “taking of action to implement” the decision are concertinaed into the one word “implementation”.
B.Securing the effectiveness of the hearing and determination of the application for review
The language used in s 41(2) is mirrored in similar provisions in other legislation. An example is found in the Migration Act 1958 (Migration Act) as it was previously drafted. Mr Madafferi had applied to the Federal Court under s 476 for review of a decision made by the Minister for Immigration and Multicultural Affairs (Minister) under s 501A of that legislation refusing him a permanent resident visa. He also sought orders that the operation and implementation of that decision be stayed and that the Minister be restrained from treating him as a non-citizen or as a person other than the holder of a visa. His application was refused and Mr Madafferi appealed to the Full Court of the Federal Court. At the relevant time, s 482(2) of the Migration Act provided that:
“If an application is made to the Federal Court under section 476 … a Judge of the Federal Court may make such orders of the kind referred to in subsection (3) as that … Judge considers appropriate for the purpose of securing the effectiveness of the hearing and determination of the appeal.”[36]
[36] The word “appeal” should have read as “application”: Madafferi v Minister for Immigration and Multicultural Affairs [2001] FCA 250; (2001) 106 FCR 76; 184 ALR 473; 63 ALD 373 at [9]; 78-79; 476; 375; Heerey, Emmett and Conti JJ
In an affidavit, Mr Madafferi had referred to the severe financial punishment that would be inflicted on him and his family were he to be detained pending the resolution of his application for review. He referred to his business that met all of its taxation, workers’ compensation and other obligations and to his obligations to meet the mortgage payments on his family home and on another property. The Full Court said of this evidence:
“… There does not appear to have been any suggestion that any financial ‘punishment’ would interfere in any way with the capacity of the applicant to prosecute the substantive proceeding. Nor is there any explicit suggestion that being in custody would impede the ability of the applicant to give instructions in connection with the substantive proceeding. There is certainly no finding in relation to either of these matters.
It is difficult to see how s 482(2) is attracted in the circumstances of the evidence before the primary judge. His Honour does not appear to have addressed the question of whether the detention of the applicant will impact in any way on the effectiveness of the hearing and determination of the appeal. That is the primary question that arises under s 482(2). …”[37]
[37] [2001] FCA 250; (2001) 106 FCR 76; 184 ALR 473; 63 ALD 373 at [23]-[24]; 81; 478; 377-378
CONSIDERATION
The starting point of my consideration is the principle that, subject only to s 41 of the AAT Act, the making of an application to the Tribunal for review of a decision does not affect the operation of the decision or prevent the taking of action to implement that decision. Having said that, the starting point can be varied but only if the Tribunal considers it desirable to do so after taking into account the interests of the person affected by the decision. Even then, the variation can only be to the extent necessary to secure the effectiveness of the hearing and determination of the application for review. These matters are considered against the backdrop of the AVCC Act under which the decision under review has been made.
I have already identified those who use, or who wish to use, the Product or who are affected by its use and those who supply, or who would wish to supply, the Product to them. As I said, this is an indicative list of persons whose interests might be affected by the decision under review. By reason of the underpinning principles of the AVCC Act, the persons affected by the particular decision to issue a Notice must include the general community. The interests of the general community are those relating to the health and safety of themselves and the ecologically sustainable development of their environment. That is clear from the recitation following the Long Title to the AVCC Act.
A stay application is not the context in which I should begin to attempt to resolve the issues that are in dispute between the parties. Rust-Oleum clearly has its commercial interests in mind and has a legitimate interest in protecting them. To be fair, it is not unmindful of the need to protect public health and safety and ecologically sustainable development but it puts forward its case that the Product is a threat to neither. The APVMA, on the other hand, is charged with ensuring, among its other responsibilities, the protection of public health and safety and of ecologically sustainable development are maintained. Its decision to issue the Notice under s 101 because the Product is not registered under the Code is consistent with its role. As the Product is not registered, the APVMA has not had an opportunity to assess whether the Product meets the safety criteria for registration.
On their face, the concerns of each party are legitimate and it is not possible to say in the context of a stay hearing that they are unfounded. Stated at its highest, the impact on Rust-Oleum’s business will be considerable if the Product is recalled and its predictions regarding the loss of its place in the market come to pass. It may not be able to recover from that position even if its application in these proceedings is successful. Against that are the APVMA’s concerns that public safety is at risk. Those concerns will not be alleviated if the Notice is not issued but the APVMA is ultimately successful in these proceedings. The effectiveness of the hearing and of the outcome of the application for review will be secured for neither Rust-Oleum nor the APVMA.
It seems to me that the solution lies in adopting Mr Gottschall’s statement that Rust-Oleum has already ceased supplying the Product to its distributors and retailers. That is a position that the APVMA put forward as an alternative position. The Notice would be a suspension of Rust-Oleum’s ongoing supply of the Product to the market. The potential risk to public safety would be limited and Rust-Oleum is able to confine its commercial damage.
Therefore, for the reasons I have given, I:
(1)set aside the order made on 21 October 2016 staying the operation or implementation of APVMA’s decision dated 10 October 2016 until the Tribunal hears and determines the application for review or until further order; and
(2)substitute a decision 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.
I certify that the fifty-one preceding paragraphs are a true copy of the reasons for the decision herein of
Deputy President S A Forgie.
Signed: ……[sgd].....................................
Associate
Date of Hearing 6 February 2017
Date of Decision 9 March 2017
Counsel for the Applicant Mr Jonathan Gottschall
Solicitors for the Applicant Ms Heather Richardson
Kalus Kenny Intelex
Counsel for the Respondent Mr Stephen Rebikoff
Solicitor for the Respondent Mr Michael Palfrey
HWL Ebsworth Lawyers
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