Secretary, Department of Health & Ageing v Pagasa Australia Pty Ltd

• Jurisdiction: Australia Federal only
• Court: Federal Court (Australia)
• Judgment Date: 17 October 2008
• Neutral Citation: [2008] FCA 1545
• Date: 17 October 2008

FEDERAL COURT OF AUSTRALIA

Secretary, Department of Health & Ageing v Pagasa Australia Pty Ltd

[2008] FCA 1545

THERAPEUTIC GOODS –civil penalties – relevant matters to be considered – agreement as to facts and penalty – need to ensure a penalty is “appropriate” – scrutiny given to agreements – forfeiture – discretion – declaratory relief

Environment Protection and Biodiversity Conservation Act 1999 (Cth)
Spam Act 2003 (Cth), s 24(2)
Therapeutic Goods Act 1989 (Cth), ss 42Y, 54, 54B
Trade Practices Act 1974 (Cth), s 76

Ainsworth v Criminal Justice Commission (1992) 175 CLR 564 followed
Australian Communications and Media Authority v Clarity1 Pty Ltd (No 2) [2006] FCA 1399, 155 FCR 377 applied
Australian Competition & Consumer Commission v Admiral Mechanical Services Pty Ltd [2007] FCA 1085 cited
Australian Competition & Consumer Commission v Australian Abalone Pty Ltd [2007] FCA 1834 followed
Australian Competition & Consumer Commission v Australian Safeway Stores Pty Ltd (No 4) [2006] FCA 21 cited
Australian Competition & Consumer Commission v Construction, Forestry, Mining & Energy Union [2008] FCA 678 cited
Australian Competition & Consumer Commission v D M Faulkner Pty Ltd [2004] FCA 1666 cited
Australian Competition and Consumer Commission v Dataline.Net.Au Pty Ltd [2006] FCA 1427, 236 ALR 665 followed
Australian Competition and Consumer Commission v Dataline.Net.Au Pty Ltd [2007] FCAFC 146, 244 ALR 300 cited
Australian Competition & Consumer Commission v Econovite Pty Ltd [2003] FCA 964 applied
Australian Competition & Consumer Commission v EDirect Pty Ltd [2008] FCA 65 followed
Australian Competition & Consumer Commission v FChem (Aust) Ltd [2008] FCA 344 cited
Australian Competition and Consumer Commission v Goldy Motors Pty Ltd [2000] FCA 1885, ATPR 41-801 followed
Australian Competition & Consumer Commission v Gullyside Pty Ltd [2005] FCA 1727 cited
Australian Competition & Consumer Commission v High Adventure Pty Ltd [2005] FCAFC 247 followed
Australian Competition & Consumer Commission v Hobie Cat Australasia Pty Ltd [2008] FCA 402 followed
Australian Competition & Consumer Commission v Info4PC.com Pty Ltd [2006] FCA 1534 cited
Australian Competition & Consumer Commission v Ithaca Ice Works Pty Ltd [2001] FCA 1716 followed
Australian Competition and Consumer Commission v Midland Brick Co Pty Ltd [2004] FCA 693, 207 ALR 329 cited
Australian Competition & Consumer Commission v Oobi Baby Pty Ltd [2008] FCA 1488 followed
Australian Competition and Consumer Commission v Real Estate Institute of Western Australia Inc [1999] FCA 18, 161 ALR 79 followed
Australian Prudential Regulation Authority v Derstepanian [2005] FCA 1121, 60 ATR 518 cited
Australian Prudential Regulation Authority v Holloway [2000] FCA 1245, 45 ATR 278 cited
Bank of Kuwait and the Middle East v Ship MV ‘Mawashi Al Gasseem’ (No 2) [2007] FCA 815, 240 ALR 120 followed
Briginshaw v Briginshaw (1938) 60 CLR 336 followed
Burton v Honan (1952) 86 CLR 169 cited
Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Australian Competition and Consumer Commission [2007] FCAFC 132, 162 FCR 466 applied
Director of Public Prosecutions (Cth) v Mylecharane [2007] NSWSC 1174, 215 FLR 18 cited
Director of Public Prosecutions (Vic) v Nikolaou [2008] VSC 111 cited
Employment Advocate v Williamson [2001] FCA 1164, 111 FCR 20 cited
Greentree v Minister for Environment and Heritage [2005] FCAFC 128, 144 FCR 388 cited
McGrath v Australian Naturalcare Products Pty Ltd [2008] FCAFC 2, 165 FCR 230 cited
Minister for the Environment and Heritage v Greentree (No 3) [2004] FCA 1317, 136 LGERA 89 applied
Minister for Industry, Tourism & Resources v Mobil Oil Australia Pty Ltd [2004] FCAFC 72 applied
Murphy v Farmer (1988) 165 CLR 19 cited
NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission (1996) 71 FCR 285 applied
Pellegrino v Director of Public Prosecutions (Cth) [2008] NSWCCA 17, 243 ALR 556 cited
Trade Practices Commission v CSR Ltd (1991) ATPR 41-076 cited
Trade Practices Commission v ICI Australia Operations Pty Ltd (1991) 105 ALR 115 applied
Tran v Commonwealth [2008] FCA 901, 103 ALD 290 cited
Vivian v Fitzgeralds [2007] FCA 1602 applied
Wallersteiner v Moir [1974] 1 WLR 991 distinguished

Beaton-Wells C, ‘Judicial Scrutiny of Penalty Agreements to Increase’ (2005) 13 TPLJ 59
Beaton-Wells C, ‘Recent corporate penalty assessment under the Trade Practices Act and the rise of general deterrence’ (2006) 14 CCLJ 65
Commonwealth, Parliamentary Debates, House of Representatives, 17 August 2005, 3
Gillooly M and Wallace-Bruce N I, ‘Civil Penalties in Australian Legislation’ (1994) 13 Univ Tas L Rev 269
Spender P, ‘Negotiating the third way: Developing effective process in civil penalty litigation’ (2008) 26 C&SLJ 249
Yeung K, ‘Quantifying Regulatory Penalties: Australian Competition Law Penalties in Perspective’ (1999) 23 Melb Univ L Rev 440

SECRETARY, DEPARTMENT OF HEALTH AND AGEING v PAGASA AUSTRALIA PTY LTD (ABN 47 073 406 658) AND ANOR

NSD 2508 of 2007

FLICK J

17 OCTOBER 2008

SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA
NSW DISTRICT REGISTRY	NSD 2508 of 2007

BETWEEN:	SECRETARY, DEPARTMENT OF HEALTH AND AGEING Applicant
AND:	PAGASA AUSTRALIA PTY LTD (ABN 47 073 406 658) First Respondent SUSAN JONES Second Respondent

JUDGE:	FLICK J
DATE OF ORDER:	17 OCTOBER 2008
WHERE MADE:	SYDNEY

The Court declares that:

1. On or about 9 February 2007 the First Respondent and Second Respondent contravened s 19D(1)(a)(i) of the Therapeutic Goods Act 1989 (Cth) (the Act) by importing into Australia the following therapeutic goods for use in humans (the Relevant Goods):

1.1. C.Y. Gabriel Medicated Genuine Bleaching Beauty Soap (288 items);

1.2. Eskinol Naturals Papaya Facial Scrub (480 items);

1.3. Eskinol Classic Whitening Cream SPF-15 (120 items);

1.4. Block and White Radiance SPF 20 Whitening Lotion (120 items);

1.5. Chin Chun Su Face Cream (480 items);

1.6. Master Anti-Bacterial Facial Cleanser (432 items); and

1.7. Green Cross Isopropyl Alcohol (720 items);

in circumstances where none of the Relevant Goods were:

1.8. ‘registered goods’ or ‘listed goods’ (within the meaning of the Act) in relation to the First Respondent, any officer or agent of the First Respondent, or the Second Respondent;

1.9. ‘exempt goods’ (within the meaning of the Act);

1.10. exempt under s 18A of the Act;

1.11. the subject of an approval or authority under s 19 of the Act; or

1.12. the subject of an approval under s 19A of the Act.

The orders of the Court are:

2. The First and Second Respondents are to pay to the Commonwealth a penalty in the amount of $130,000 within 42 days.

3. The First and Second Respondents are to pay to the Applicant within 42 days indemnity costs in the amount of $68,242.75.

4. The First and Second Respondents are jointly and severally liable to pay the said amounts referred to in Orders 2 and 3 above.

5. The Relevant Goods are to be forfeited to the Commonwealth pursuant to s 54(3) of the Act.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
NSW DISTRICT REGISTRY	NSD 2508 of 2007

BETWEEN:	SECRETARY, DEPARTMENT OF HEALTH AND AGEING Applicant
AND:	PAGASA AUSTRALIA PTY LTD (ABN 47 073 406 658) First Respondent SUSAN JONES Second Respondent

JUDGE:	FLICK J
DATE:	17 OCTOBER 2008
PLACE:	SYDNEY

REASONS FOR JUDGMENT

1 This is an Application for declaratory relief under s 21 of the Federal Court of Australia Act 1976 (Cth); for orders that a pecuniary penalty be paid pursuant to s 42Y(2) of the Therapeutic Goods Act 1989 (Cth); and for an order for forfeiture pursuant to s 54(3) of the 1989 Act.

2 Section 42Y(1) provides that such an application may be made, as in the present proceeding, by “the Secretary … on behalf of the Commonwealth to the Federal Court”.

3 The First Respondent, Pagasa Australia Pty Ltd, is a body corporate incorporated and registered under the Corporations Act 2001 (Cth) and an importer of goods into Australia. The Second Respondent, Ms Susan Jones, is a director and shareholder of the First Respondent and is its managing director.

4 It is claimed that both Respondents have contravened the 1989 Act.

The Therapeutic Goods Act

5 The objects of the Therapeutic Goods Act include the establishment and maintenance of a national system of controls relating to the quality, safety, efficacy and timely availability of therapeutic goods: s 4(1)(a). A useful overview of some of the provisions of the Act has been provided by Emmett J in McGrath v Australian Naturalcare Products Pty Ltd [2008] FCAFC 2, 165 FCR 230.

6 For present purposes it is sufficient to make reference to but a few provisions.

7 Chapter 2 of the Act provides for the maintenance of a register known as the Australian Register of Therapeutic Goods. Part 3-2 of Chapter 3 further provides for the registration and listing of therapeutic goods and provides for exemptions to be granted in respect to certain therapeutic goods which are not registered. Contained within that Part is s 19D which relevantly provides as follows:

Civil penalties relating to registration or listing etc. of imported, exported, manufactured and supplied therapeutic goods

Civil penalty relating to importing, exporting, manufacturing or supplying goods for use in humans

(1) A person contravenes this subsection if:

(a) the person does any of the following:

(i) imports into Australia therapeutic goods for use in humans;

… and

(b) none of the following subparagraphs applies in relation to the goods:

(i) the goods are registered goods or listed goods in relation to the person;

(ii) the goods are exempt goods;

(iii) the goods are exempt under section 18A;

(iv) the goods are the subject of an approval or authority under section 19;

(v) the goods are the subject of an...