Sydney Sterile Compounding Pty Ltd and Minister for Health
[2016] AATA 743
•26 September 2016
Sydney Sterile Compounding Pty Ltd and Minister for Health [2016] AATA 743 (26 September 2016)
Division
GENERAL DIVISION
File Number(s)
2016/0939
Re
Sydney Sterile Compounding Pty Ltd
APPLICANT
And
Minister for Health
RESPONDENT
DECISION
Tribunal The Hon. D Cowdroy OAM QC, Deputy President
Date 17 August 2016 Date of written reasons 26 September 2016 Place Sydney The validity of the summonses is upheld.
..................................[sgd]......................................
The Hon. D Cowdroy OAM QC, Deputy President
CATCHWORDS
PRACTICE AND PROCEDURE – application to set aside summonses issued by the Respondent – issue in substantive proceedings concerns whether director of Applicant is a fit and proper person to import cannabidiol – whether summonses could result in documents being produced which are relevant to the substantive issue – evidence of Applicant unreliable – Respondent therefore entitled to test assertion that director of Applicant is a fit and proper person – validity of summonses upheld
LEGISLATION
Customs Act (Prohibited Imports) Regulations 1956 (Cth) reg 5(7)(b)
CASES
Attorney General for New South Wales v Chidgey [2008] NSWCCA 65
Comcare v Maganga [2008] FCA 285
Commissioner for Railways v Small (1938) 38 SR (NSW) 564
General Merchandise & Apparel Group Pty Ltd and CEO of Customs and Another (2009) 114 ALD 289
ICAP Pty Ltd & Ors v Moebes & Anor [2009] NSWSC 306
Roads & Traffic Authority of New South Wales v Conolly [2003] NSWSC 327
Searle Australia Pty Ltd v Public Interest Advocacy Centre (1992) 36 FCR 111
Sullivan v Department of Transport (1978) 20 ALR 323
Trade Practices Commission v Arnotts Ltd (No. 2) (1989) 88 ALR 90
Wong & Ors v Sklavos & Anor (2014) 319 ALR 378
REASONS FOR DECISION
The Hon. D Cowdroy OAM QC, Deputy President
26 September 2016
The Applicant seeks to set aside the whole or part of six summonses, which were issued at the request of the Respondent (“the Minister”). It is necessary to firstly summarise the background to the application for review, brought by the Applicant in this Tribunal.
BACKGROUND
Sydney Sterile Compounding Pty Ltd (“Sydney Sterile”) made an application for a licence to import drugs under regulation 5 of the Customs Act (Prohibited Imports) Regulations 1956 (Cth) (the Regulations). The application related to the importation of a substance known as Cannabidiol. The application was refused on the basis that the Minister was not satisfied that the principal of the Applicant, namely Mr Ian Abrams, was a fit and proper person to be granted a licence to import drugs. Sydney Sterile has challenged such decision and seeks review of the decision.
The proceedings have been set down for hearing. Further, directions have been made for the filing and service of each party’s statement of facts and contentions on which they rely, and any evidence on which they rely. Sydney Sterile has filed a statement of its facts and contentions. The Respondent was due to file its statement but it sought an extension of time in which to do further consideration of certain documents which it seeks by way of the summonses.
THE SUMMONSES
The summonses will now be considered. A summons was issued to Mr Abrams. Sydney Sterile challenges paragraphs 7, 8 and 9 of that summons. Paragraph 7 requires production of the following:
All documents recording any decision and the reasons for that decision, or concerning any investigation by any Commonwealth, state or territory regulatory body or government agency in the period 1 January 2011 to date, about Mr Abrams’ conduct (or alleged conduct) as a pharmacist, or whether conditions should be imposed on Ian Abrams’ practice as a pharmacist.
Paragraph 8 provides:
All documents recording any decision and/or the reasons for that decision, or concerning any investigation by any Commonwealth, state or territory regulatory body or government agency in the period 1 January 2011 to date concerning Mr Abrams’ conduct (or alleged conduct) in connection with the importing, handling or storage of any chemical, compound or other substance or thing, or whether conditions should be imposed on Ian Abrams’ ability to import, handle or store any chemical, compound or other substance or thing.
Paragraph 9 provides:
9. All documents concerning any investigation by any Commonwealth, state or territory regulatory body or government agency in the period 1 January 2011 to date, concerning the
(a) importation (or alleged importation); and/or
(b) supply (or alleged supply)
of a Drug or Drugs by Maroubra Pharmacy, including but not limited to, any investigation into the
(c) diversion/misuse or (alleged diversion/misuse); or
(d) abuse (or alleged abuse)
of a Drug or Drugs imported (or allegedly imported) into Australia and/or supplied (or allegedly supplied) by Maroubra Pharmacy.
Maroubra Pharmacy is defined in the summons as a partnership between Ian Abrams and George Confos, trading as Maroubra Pharmacy (ABN 83 272 811 486).
A summons has been issued to Sydney Sterile, the company of which Mr Abrams is the sole director and shareholder. Sydney Sterile challenges paragraphs 4 and 5 which provide:
4. All documents recording any decision, and the reasons for that decision, or concerning any investigation by any Commonwealth, state or territory regulatory body or government agency in the period 1 January 2011 to date, about whether any conditions should be imposed on:
(a) [Sydney Sterile’s] registration on the New South Wales Register of Pharmacies; or
(b)approval of [Sydney Sterile’s] premises as suitable for carrying on a pharmacy business by a pharmacist.
5. All documents recording any decision, and the reasons for that decision, or concerning any investigation by any Commonwealth, state or territory regulatory body or government agency in the period 1 January 2011 to date, about [Sydney Sterile’s] conduct in connection with the importing, handling or storage of any chemical, compound or other substance or thing, or whether conditions should be imposed on [Sydney Sterile’s] ability to import, handle or store any chemical, compound or other substance or thing.
Summonses have been issued to several companies in which Mr Abrams has an association, namely Medical Cannabis Clinic Pty Ltd and Peptide Clinics Pty Ltd (“Peptide Clinics”). The summons issued to the former company is no longer in issue. The Applicant has objected to paragraph 4 of the summons issued to Peptide Clinics. That paragraph requires production of the following:
4.All documents concerning any investigation by any Commonwealth, state or territory regulatory body or government agency in the period 1 January 2011 to date, concerning the
(a) importation (or alleged importation); and/or,
(b) supply (or alleged supply)
of a Drug or Drugs by [Peptide Clinics Pty Ltd], including but not limited to an investigation into the
(c) diversion/misuse (or alleged diversion/misuse); or
(d) abuse (or alleged abuse)
of a Drug or Drugs imported (or allegedly imported) into Australia and/or supplied (or allegedly supplied) by Peptide Clinics Pty Ltd.
The term Drug is further defined in the summons.
Summonses were issued to three regulatory authorities, namely the Pharmaceutical Regulatory Unit in the New South Wales Ministry of Health (PRU), the Pharmacy Council of New South Wales (PCNSW) and the Australian Health Practitioner Regulation Agency (AHPRA) requiring in each case such body to produce:
1. All documents relating to past or current complaints made to, or referred to, or investigations conducted by, [the relevant body] regarding:
a.Mr Ian Abrams;
b.Sydney Sterile Compounding Pty Ltd;
c.Maroubra Pharmacy;
d.Discount Compound Pharmacy;
e.Peptide Clinics Pty Ltd.
2. All documents recording the reasons for the imposition of any conditions on the registration of Mr Ian Abrams as a Health Practitioner.
3. All documents recording the reasons for the imposition of any conditions on the registration of any of the following:
a.Sydney Sterile Compounding Pty Ltd;
b.Maroubra Pharmacy;
c.Discount Compound Pharmacy;
d.Peptides Council Pty Ltd;
on the register of pharmacies and the terms of such conditions.
It should be noted that in respect of these three summonses, unlike the earlier summonses where the summonses are sought to be set aside in part, application is made to set aside the whole of the summons.
ISSUE IN THE SUBSTANTIVE PROCEEDINGS
The Applicant submits that the central issue arising in this application for review is whether it is a fit and proper person to be issued with the import licence it sought. The evidence which casts doubt upon Mr Abrams’ fitness to hold a licence is referred to in the decision of the decision-maker. In the decision under review the decision-maker (“the delegate”) referred to various matters for refusing the license in his “Reasons for my decision”. In those reasons the delegate referred to the fact that information provided by the Applicant was in his mind not credible, and raised a question concerning the Applicant’s honesty. Such comment appears to have been made in respect of answers of Mr Abrams to questions asked of him concerning certain information regarding prior imports into Australia of various drugs. The reasons identified three particular occasions where these incidents were alleged to have occurred, but Mr Abrams claimed that he had no recollection of such events.
The decision-maker stated, having considered the options:
The other possibility is that your client has not been honest with me. This, on the balance of probabilities, appears to be the more likely option. The following matters have led me to this view.
Thereafter the reasons were specifically stated for reaching that decision.
It is not part of this inquiry to go further than to state that the decision-maker at some length set out his reasons.
The particular regulation under which application was made for the licence to import drugs contains certain mandatory requirements. Regulations 5 of such regulations provides for the import of prohibited drugs, and regulation 5, subparagraph 7 prescribes conditions for the grant of such a license. One of the conditions is as follows:
(7) The Secretary or an authorised person shall not grant to an applicant a licence to import drugs unless:
…
(b) the applicant is a fit and proper person to be granted a licence to import drugs;
…
The delegate considered such provision. The delegate noted the assertion by the Applicant that Mr Abrams was a member of a pharmacy profession. The delegate stated:
… however, that does not resolve the substantive tension between the information provided by ABF and shared with you and your client’s response to that information.
Accordingly, I feel that the fit and proper test is applicable to this application and should be applied to the consideration of a ‘licence to import drugs’; not just a licence to import cannabidiol.
The delegate made the following findings:
I also consider that your client has probably provided false and misleading information to the Commonwealth.
As stated above, in order to effectively discharge my responsibilities in administering import licences, I must be able to rely upon any future information provided to me by a licence holder, including where a licence holder applies for import permissions in the future.
In your client’s case I am not satisfied I can do so for the reasons set out above, therefore I am not satisfied that he is a fit and proper person to hold an import licence.
In his conclusion the delegate cited as follows, relevantly:
In your client’s case I am not satisfied that he is a fit and proper person to hold an import licence.
In its Statement of Facts and Contentions the Applicant has made it clear that whilst there are three secondary issues, the critical and determinative issue is whether Mr Abrams has satisfactorily established pursuant to sub-regulation 5(7)(b) of the Regulations that he is a fit and proper person to be granted a licence to import raw cannabidiol material.
Various matters are raised in the Applicant’s Statement of Facts and Contentions. In particular the Applicant maintains in paragraph 27.2 thereof, as follows:
any concerns which may arise in that regard (i.e. Mr Abram’s credibility) are far outweighed by the fact that in the course of his practice as a registered pharmacist for more than 20 years, Mr Abrams has compounded all manner of formulations and, relevantly, has had (and continues to have) access as a matter of course to a range of substances, including Schedule 8 and Schedule 4 Appendix D substances, which are narcotic and psychotropic drugs. This evidences that Mr Abrams is a “fit and proper person” to import, possess, store, handle and dispense Schedule 4, (and for that matter, Schedule 8) drugs with far higher risk profiles than CBD and, accordingly, that he is a “fit and proper person” to import CBD. (emphasis in original)
Accordingly, the Applicant has made plain that the essential matter for determination so far as its application for a license is concerned, is his fitness to hold a licence.
CONSIDERATION
The Tribunal will now deal with the particular summonses. In respect of the summons issued to Mr Abrams personally, the Applicant submits that the Minister must be able to show that the documents sought will shed light on the issue which is to be determined. The Applicant maintains that the matters referred to in paragraph 7 of the summons are remote from any issue of fitness. Further, with respect to paragraph 8, it is said that the documents relating to any investigation is so broad as to have little or no connection with the issue for determination before the Tribunal.
As to paragraph 9, which requires production of documents which include those of Maroubra Pharmacy, it is submitted that Mr Abrams no longer has any connection with such pharmacy. The affidavit of James Nicholas Lawrence, sworn on 1 August 2016, in support of the application, states that Mr Abrams’ involvement in the day to day conduct of the pharmacy has now ceased.
As to the summons issued to Sydney Sterile, it is submitted that the documents for which production is sought extend well beyond any issues of fitness, when they relate to matters such as the conduct of Sydney Sterile in relation to importing, handling or storing chemicals. The same submission is made in respect of a summons issued to Peptide Clinics. It is submitted, in respect of this company, that Mr Abrams is only a 25 per cent shareholder in that company, the other shareholders being a Dr Hart holding 25 per cent, and a Mr Miller, holding 60 per cent, via a company known as Marden Pty Ltd.
In respect of the summons issued to the regulatory bodies, the submission is made that the summons are too broad when they refer to matters such as complaints and investigations. The Applicant says that such summons would require production of documents relating to trivial matters, such as customer complaints.
The Tribunal has heard both detailed oral and written submissions from both the Applicant and the Respondent. As I have mentioned, the affidavit of Mr Lawrence contains certain corporate information regarding the companies with which Mr Abrams is associated. The critical matter for determination is the question of Mr Abrams’ fitness as a principal of the Applicant, to hold a license. The test for whether a summons or a subpoena is too broad is well established. I shall state the established principles.
CASE LAW
As has been said in the decision of General Merchandise & Apparel Group Pty Ltd and CEO of Customs and Another (2009) 114 ALD 289 (General Merchandise) in considering whether to set aside a summons, it must be determined whether the documents sought could “reasonably be expected to throw light on some of the issues in the principal proceedings”.
The test was stated specifically by Bennett J in Comcare v Maganga [2008] FCA 285. In that decision her Honour stated:
… the test of relevance is whether the documents relate to the proceedings such that there is a real possibility that they may assist in the resolution of the issues in the proceedings.
It has also been well established that production of documents on a summons will not be required unless the party has a legitimate forensic purpose in seeing those documents: ICAP Pty Ltd & Ors v Moebes & Anor [2009] NSWSC 306; Trade Practices Commission v Arnotts Ltd (No. 2) (1989) 88 ALR 90 at 102.
It must be shown that it is likely that the documents will materially assist on an identified issue. The Tribunal needs to be satisfied that the documents, books or things could satisfy the test in General Merchandise, namely that it could reasonably be expected to throw light on the issues.
It is well established also that a summons cannot be used by a party for the purposes of a ‘fishing expedition’, that is, it is impermissible to use a summons to try to establish whether there is a case at all. The process can only be utilised to obtain evidence to support a party’s contentions: Commissioner for Railways v Small (1938) 38 SR (NSW) 564 and General Merchandise at [233] – [235].
However, it must be borne in mind that it is not necessary that it be established on the balance of probabilities that the documents sought would be relevant to the issues to be determined. Instead, it is sufficient that there is the real possibility that they may assist, that is, that the documents could be expected, not that they would be expected to assist in the issues.
There are other well-known authorities touching on this issue which I shall refer to, namely Sullivan v Department of Transport (1978) 20 ALR 323 (Sullivan) and also Searle Australia Pty Ltd v Public Interest Advocacy Centre (1992) 36 FCR 111. The significance of the last decision lies in the fact that the Tribunal is not confined to the material before the Respondent: it may extend to other issues beyond the known material. I mention the Court of Criminal Appeal of New South Wales in the matter of Attorney General for New South Wales v Chidgey [2008] NSWCCA 65, has also referred to this subject matter. At [72], Beazley P referred to and adopted the words of Adams J in Roads & Traffic Authority of New South Wales v Conolly [2003] NSWSC 327; 57 NSWLR 310 (Conolly) where his Honour said at 12:
If it is reasonable to infer that the material sought exists and that it is relevant to an issue, though its content is unknown, it will almost invariably be logically be the case (as it seems to me) that such a chance exists, even though it might be thought to be unlikely. Seeking that material therefore seems to be a legitimate forensic purpose, providing of course that the factual issues and the character of the material sought are precisely identified.
The Tribunal will also refer to another recent authority, Wong & Ors v Sklavos & Anor (2014) 319 ALR 378 (Wong v Sklavos), a decision of the Full Court of the Federal Court of Australia. At [12] to [16] of this decision, the Full Court referred to the requirements for a successful application to set aside a subpoena. Effectively, the Full Court, in [12], restated the principles in Sullivan, namely where there is an apparent relevance to an issue, and where the party issuing the subpoena establishes the onus that there is a legitimate forensic purpose, the subpoenas (or summonses) will be upheld.
Their Honours referred in [12] to the fact that there have been statements which test the outer limits. The Court said:
Other cases have used different terminology, but with essentially the same effect, for example, by requiring that, viewed realistically, the documents sought have a bearing on an issue which is not unreal, fanciful or speculative (R v Barton (1981) 2 NSWLR 414 at 420), or that the material sought is reasonably likely to add in some way to the relevant evidence in the case (Spencer Motors Pty Ltd v LNC Industries Ltd (1982) 2 NSWLR 921 at 927), or that it be “on the cards” that the documents sought will materially assist the party at whose request the subpoena has been issued: Allister v R (1984) 154 CLR 404 at 414; 51 ALR 480 at 481; Tamawood Ltd v Habitare Developments Pty Ltd [2009] FCA 364 at [13] and [35] – [38].
In that particular case documents were sought from the practices of dermatologists by a dermatologist who was seeking damages, and who sought to establish his loss of income and wages by reference to the income and wages of other dermatologists. The Full Court dismissed the appeals and upheld the validity of the subpoenas.
Applying these various principles the question now is, firstly, to identify the issue, and secondly, to determine whether the summonses bear upon that issue, or could have a relevance to that issue: that is, is it “on the cards” (Wong v Sklavos) that the information sought could be of relevance.
SUMMONSES ISSUED ON THE APPLICANT AND RELATED ENTITIES
The Applicant has advanced a positive case, namely that Mr Abrams is a person of integrity and is a fit and proper person to hold a licence. In the Statement of Facts and Contentions it is put at [28]:
No suggestion has been made that Mr Abrams is not a fit and proper person to compound medicines and to store, handle and dispense, control substances which pose a legitimate risk to the public. In particular Mr Abrams has never had any finding against him that he is not a fit and proper person to hold a pharmacy licence or to practise as a pharmacist.
That is the critical issue advanced by the Applicant, and one which the Respondent seeks to test. The question is whether, by issuing the summonses, those summonses could result in documents being produced which are relevant to that issue.
The Respondent is in a difficult position in the sense that no evidence has been placed before the Tribunal by Mr Abrams personally. In accordance with the directions made for the preparation of the proceedings for hearing next month, the Applicant has filed its Statement of Facts and Contentions and its evidence and there is no evidence from Mr Abrams. What was known to the delegate when he made the decision was that there were certain conditions attached to Mr Abrams’ licence to practise as a pharmacist.
Secondly, the delegate, by virtue of the matters set out in his decision, concluded that Mr Abrams had been less than frank. The evidence advanced by Mr Abrams’ solicitor is at least vague. At paragraph 4 of Mr Lawrence’s affidavit it is stated:
“Discount Compound Pharmacy” (DCP) (referred to in the Summonses issued to AHPRA, the Pharmacy Council of NSW and PRU) is a business that operated from Maroubra Pharmacy premises. At no time did Mr Abrams have any involvement in the day to day conduct of the DCP business. Mr Abrams was, but is no longer, a co-owner of the Maroubra Pharmacy business.
That evidence is to be contrasted with the evidence provided in the affidavit of Mark Joseph Cessario sworn 9 August 2016. On 2 August 2016, Mr Cessario conducted an internet search of Discount Compound Pharmacy website. The name, Maroubra Pharmacy, appeared. By further links on the website it was established that there is a clear link between that pharmacy and the Maroubra Pharmacy.
Further, a search conducted on 3 August 2016 of Maroubra Pharmacy with the Australian Securities and Investments Commission revealed that as at 1 April 2015, Maroubra Pharmacy was conducted in partnership between Mr Abrams and Mr Confos.
The affidavit states that Mr Abrams is no longer a co-owner of Maroubra Pharmacy business, but it does not state whether there is any ongoing relationship, nor is there any statement concerning any relationship with the DCP business, despite the fact that the affidavit states that Mr Abrams had no involvement in the “day to day” conduct of that business. The day to day conduct might be irrelevant to a continuing further involvement in the business.
Further, it is suggested that there is no involvement in the day to day running of Peptide Clinics; however the searches indicate that the name and address of Peptide Clinics is in fact identical to that of the Maroubra Pharmacy. That information is contained in an application for an import licence made by Peptide Clinics on 14 October 2013.
The Tribunal therefore draws the inference that there is a close association, and a continuing association with Mr Abrams with his businesses, namely Maroubra Pharmacy and DCP, despite the assertion of no longer having any involvement in the day to day conduct.
In the absence of any evidence from Mr Abrams, the only way that the Respondent can test the assertions of the unblemished record and assertions of compliance is by obtaining documentary evidence. In relation to the summons to Mr Abrams, if there has been any decision or any investigations concerning him personally, the Respondent is entitled to test such assertion. This necessarily involves the Maroubra Pharmacy and other businesses in which Mr Abrams has an interest.
The evidence adduced for Mr Abrams is far from conclusive, and the contrary evidence establishes that it cannot be relied upon. In such circumstances, the Tribunal finds as follows.
The Tribunal considers that the summons issued to Mr Abrams should be upheld. Secondly, in respect of the summons issued to Sydney Sterile, since Mr Abrams is the sole director and shareholder, the same finding is made.
Thirdly, insofar as the summons issued to Peptide Clinics is concerned, because Mr Abrams is a director and shareholder of that company, and the address of that company is provided in official documents as Maroubra Pharmacy, the same conclusion arises.
SUMMONS ISSUED ON REGULATORY BODIES
I now turn to the summons issued to the regulatory bodies. It is submitted by the Applicant that those summonses could produce trivial matters such as complaints concerning the cleanliness of a pharmacy or lack of supply of a range of products. The Respondent, in reply, has said that such bodies would not deal with such matters and only deal with matters of a regulatory nature.
The Applicant has asserted that he has complied with conditions, that there are no matters of any kind taken against him. In view of the fact that this is raised by the Applicant, the Respondent is entitled to test such issues. The summonses are not, in the Tribunal’s view, so fanciful as to be unrelated to the issues. The Tribunal is satisfied that it is, to use the expression, “on the cards”, that there might be documents relevant to the inquiry before the Tribunal.
Accordingly, the summonses are relevant to those matters. The summonses are limited in time for the production and limited in scope on any plain reading of the summonses. Accordingly, the Tribunal considers that the summonses to the regulatory bodies should also be upheld.
DECISION
It follows that in each case the objection to the issue of the summons fails and the validity of the summonses are upheld.
I certify that the preceding 56 (fifty -six) paragraphs are a true copy of the reasons for the decision herein of The Hon. D Cowdroy OAM QC, Deputy President ................................[sgd]........................................
Associate
Dated 26 September 2016
Date(s) of hearing 15 August 2016 Counsel for the Applicant H El-Hage Solicitors for the Applicant Piper Alderman Counsel for the Respondent C Lenehan Solicitors for the Respondent Corrs Chambers Westgarth
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