Freedom Pharmaceutical Pty Ltd v Minister for Health (No 2)

• Jurisdiction: Australia Federal only
• Judgment Date: 15 October 2021
• Neutral Citation: [2021] FCA 1250
• Court: Federal Court
• Date: 15 October 2021

Federal Court of Australia

Freedom Pharmaceutical Pty Ltd v Minister for Health (No 2) [2021] FCA 1250

File number:	NSD 118 of 2020
Judgment of:	BURLEY J
Date of judgment:	15 October 2021
Catchwords:	COSTS – appropriate orders as to costs – where applicant unsuccessful in applying for judicial review of Minister’s decision under s 90A(2) of the National Health Act 1953 (Cth) to approve the supply of pharmaceutical benefits at a premises operated by second respondent – where second respondent filed a submitting notice – where Minister opposed application – whether principle in R v Australian Broadcasting Tribunal; Ex parte Hardiman [1980] HCA 13; (1980) 144 CLR 13 disentitles Minister from order for costs following the event – applicant to pay Minister’s costs
Legislation:	National Health Act 1953 (Cth) s 90A(2) Federal Court of Australia Act 1976 (Cth) s 43
Cases cited:	Capricornia Credit Union Ltd v Australian Securities and Investments Commission [2007] FCAFC 112 Fagan v Crimes Compensation Tribunal [1982] HCA 49; 150 CLR 666 Freedom Pharmaceutical Pty Ltd v Minister for Health [2021] FCA 213 Huon Aquaculture Group Ltd v Minister for the Environment (No 2) [2018] FCA 1938 Lo v Australian Community Pharmacy Authority [2013] FCA 639 Lucas v Secretary, Department of Health [2020] FCA 1603 Masu Financial Management Pty Ltd v Financial Industry Complaints Service Ltd [2005] NSWSC 596 Minister for Immigration v Jia Legeng [2001] HCA 17; 205 CLR 507 Ogawa v Australian Information Commissioner [2014] FCA 229 R v Australian Broadcasting Tribunal; Ex parte Hardiman [1980] HCA 13; 144 CLR 13
Division:	General Division
Registry:	New South Wales
National Practice Area:	Administrative and Constitutional Law and Human Rights
Number of paragraphs:	14
Date of last submission:	21 May 2021
Date of hearing:	Determined on the papers
Counsel for the Applicant:	Mr C Gunson SC with Ms R Howe
Solicitor for the Applicant:	Robert James Lawyers
Counsel for the First Respondent:	Mr S Free SC with Ms R McEwen
Solicitor for the First Respondent:	Australian Government Solicitor
Counsel for the Second Respondent:	The second respondent filed a submitting notice

ORDERS

		NSD 118 of 2020
BETWEEN:	FREEDOM PHARMACEUTICAL PTY LTD Applicant
AND:	MINISTER FOR HEALTH First Respondent ; MAGGIE ROUCHDI Second Respondent

order made by:	BURLEY J
DATE OF ORDER:	15 october 2021

THE COURT ORDERS THAT:

1. The applicant pay the first respondent’s costs of the proceedings.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

BURLEY J:

1. In Freedom Pharmaceutical Pty Ltd v Minister for Health [2021] FCA 213 (judgment) I ordered that an application brought by Freedom Pharmaceutical Pty Ltd for judicial review of a decision of the Minister for Health, approving an application to supply pharmaceutical benefits from certain premises located in Blacktown Mega Centre under s 90A(2) of the National Health Act 1953 (Cth), be dismissed. I directed that the parties make submissions as to costs, which they have now done. These reasons assume familiarity with the judgment.

2. The Minister submits that costs should follow the event, with the consequence that Freedom be ordered to pay his costs. Freedom submits that the following principle set out in R v Australian Broadcasting Tribunal; Ex parte Hardiman [1980] HCA 13; 144 CLR 13 at 35-36 (Gibbs, Stephen, Mason, Aickin and Wilson JJ) applies, with the consequence that there should be no order as to costs:

… In cases of this kind the usual course is for a tribunal to submit to such order as the court may make. The course which was adopted by the Tribunal in this Court is not one which we would wish to encourage. If a tribunal becomes a protagonist in this Court there is the risk that by so doing it endangers the impartiality which it is expected to maintain in subsequent proceedings which take place if and when relief is granted. The presentation of a case in this Court by a tribunal should be regarded as exceptional and, where it occurs should, in general, be limited to submissions going to the powers and procedures of the Tribunal.

3. Freedom accepts that s 43 of the Federal Court of Australia Act 1976 (Cth) confers on the Court a broad discretion regarding the making of costs orders. It submits, however, that a departure from the ordinary principle that costs follow the event is warranted on the basis of the operation of the principle in Hardiman. It submits that the Hardiman principle can apply to a decision-maker who exercises administrative decision making powers and regulatory functions both inter partes and in so-called “one party” cases where no contradictor exists to a review application, citing, amongst other cases, Huon Aquaculture Group Ltd v Minister for the Environment (No 2) [2018] FCA 1938 at [47]-[53] (Kerr J). It submits that the importance of the Minister maintaining neutrality is heightened in this case because it is the Minister personally who must exercise the discretionary power under s 90A(2) of the National Health Act and because, had the challenge been successful, the result would have been to set aside the decision and require the Minister to reconsider the application of the second respondent, Ms Rouchdi. Despite this, the Minister took an active role in the litigation and became a protagonist in the proceedings in circumstances where there was a natural protagonist in the form of Ms Rouchdi, the operator of the relevant pharmacy, who was properly joined and who was in a position to defend the legality of the impugned decision. In such a circumstance, Freedom submits that the Minister was obliged to assume a passive role and Freedom should not have to pay the Minister’s costs of placing himself in the position of a protagonist.

4. Freedom submits that the fact that Ms Rouchdi filed a submitting appearance, and did not participate in the proceedings, does not negate the desirability of the Minister maintaining a neutral position, citing Lucas v Secretary, Department of Health [2020] FCA 1603 at [66]-[67] (Rares J) and Masu Financial Management Pty Ltd v Financial Industry Complaints Service Ltd [2005] NSWSC 596 (Grove J).

5. Freedom submits that even if it were considered that this case is exceptional in the sense contemplated in Hardiman, the Minister’s submissions went beyond what was appropriate in seeking to defend the legality of the decision by responding to each of Freedom’s review grounds. Freedom submits that the Minister should have confined his arguments to elucidating the powers and procedures under Division 2 of Part VII of the National Health Act rather than arguing for a particular outcome. Instead, Freedom contends that the Minister, in taking the position that he did, compromised his impartiality to determine the request for the approval in the event that the decision was set aside.

6. The principle in Hardiman reflects the concern that if a tribunal becomes a protagonist in litigation in this Court, there is a risk that, by so doing, it endangers the impartiality which it is expected to maintain in any subsequent proceedings taking place if and when relief is granted. That principle is not of unvarying application. As Brennan J noted in Fagan v Crimes Compensation Tribunal [1982] HCA 49; 150 CLR 666 at 681-682, the principle does not necessarily apply to proceedings arising out of a dispute that was not inter partes where “it may be desirable...