FEDERAL COURT OF AUSTRALIA

Australian Competition & Consumer Commission v Collagen Aesthetics Australia Pty Ltd [2002] FCA 1134

PRACTICE AND PROCEDURE - Application that proceedings be referred to mediation - whether mediation should be ordered - where ACCC opposed mediation on basis that parties had attempted but failed to settle the issues in dispute - where parties likely to incur additional costs and delay - where no reasonable basis to expect progress to be made in mediation.

PRACTICE AND PROCEDURE - Proceedings - transfer of proceedings - application for transfer of proceedings within Federal Court of Australia registries - relevant test - where proceedings still in preliminary stages - determination of cost and convenience.

Trade Practices Act 1974 (Cth)

Federal Court of Australia Act 1976 (Cth)

Therapeutic Goods Act 1984 (Cth)

Truth About Motorways Pty Ltd v Macquarie Infrastructure Investment Management Ltd [2000] 74 ALJR 604 Cited

Hartnell v Sharp Corporation of Australia (1975) 5 ALR 493 Cited

National Mutual Holdings Pty Ltd v The Sentry Corporation (1988) 19 FCR 155 Appl

AUSTRALIAN COMPETITION & CONSUMER COMMISSION v COLLAGEN

AESTHETICS AUSTRALIA PTY LTD

S131 OF 2002

COOPER J

BRISBANE (HEARD IN ADELAIDE)

13 SEPTEMBER 2002

THE COURT ORDERS THAT:

1.         The proceedings be conducted and continued in Canberra in the Australian Capital Territory and that the matter be transferred to the Australian Capital Territory District Registry of the Court and that the District Registrar of the South Australian District Registry of the Court forthwith do all such acts as are necessary to carry the transfer into effect.

2.         The costs of each party to the notice of motion filed on 26 July 2002 be each party’s costs in the proceedings.

3.         Otherwise, the said notice of motion be dismissed.

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

REASONS FOR JUDGMENT

1                     On 17 May 2002, the Australian Competition and Consumer Commission (“the ACCC”) commenced proceedings against the respondent alleging contraventions of ss 52, 53(a) and 53(c) of the Trade Practices Act 1974 (Cth) (“the TPA”).  The alleged contraventions arise out of a national advertising campaign initiated by the respondent promoting the use of Collagen products and Hylagenesis products (as defined in the statement of claim) supplied by it for the treatment of lines, blemishes, wrinkles and scarring of the skin, to reverse the aging process of skin, and, for cosmetic shaping of the lips.  The products are administered by injection to the affected part of the skin or to the lips.

2                     The ACCC seeks against the respondent declarations and injunctive relief, together with corrective advertising and orders that the director and staff of the respondent attend a Trade Practices Compliance Program Seminar conducted by the ACCC.  The ACCC does not seek that a pecuniary penalty be imposed upon the respondent in respect of the alleged contraventions.

3                     The respondent, by notice of motion, seeks orders that pursuant to s 53A of the Federal Court of Australia Act 1976 (Cth), the parties be directed to mediate the matters in issue between them, and that the proceedings be transferred to the Australian Capital Territory registry of the Court in Canberra, or the New South Wales Registry of the Court in Sydney.

4                     The ACCC alleges that the respondent in its advertisements represented that :

(a)        it had sought registration of its products with the Therapeutic Goods Administration (“the TGA”) out of a concern for the safety of, and to benefit, its consumers;

(b)        the effect of registration was that the use of its products was safer than the use of competitor’s products, which were merely listed by the TGA;

(c)        registration of the products meant that the products had an endorsement or approval of the TGA which the listed cosmetic products of its competitor did not have;

(d)        the products of the respondent had been approved by the TGA as safer than the products of its competitor.

5                     The ACCC alleges that the representations were false and misleading because both the products of the respondent and its competitor were therapeutic goods which were required to be either registered or listed on the Australian Register of Therapeutic Goods (“the ARTG”) provided for in the Therapeutic Goods Act 1989 (Cth) if the respondent or its competitor wished to sell such products in Australia, unless the goods were subject to an exemption order.

6                     The ACCC alleges that the respondent’s products are required to be registered because they are therapeutic devices of animal origin.  Therapeutic goods which are not required to be registered are required to be listed.  The respondent’s competitor’s products, which are not of animal origin, do not require to be registered and are therefore required to be listed on the ARTG, which they are.  All registered goods are evaluated for safety, quality and efficacy by the TGA and quality evaluations on certain types of listed goods are also carried out.

7                     The ACCC alleges that registration of the respondent’s products did not indicate that those products were safer than the injectable cosmetic products which are listed on the ARTG and that registration did not indicate that the TGA had approved the respondent’s products as being safer than those injectable cosmetic products which are listed on the ARTG.

8                     The respondent admits the representations were made, and save for the representations that it put the safety of consumers first and that its products were registered with the Government Health and Safety Authority, it admits that the representations were false.  However it pleads in its defence that the advertisements “were drafted at the suggestion of a senior officer of the Therapeutic Goods Administration namely Dr Graham Maynard, head of the Clinical Unit, Conformity Assessment Branch (now retired)” and that the respondent was unaware of the falsity of the representations at the time when the advertisements were drafted and placed with the relevant journals.

9                     The ACCC also alleges that the use of the words “safe”, “painless” and “natural” in the advertisements gave rise to representations which were false.  The ACCC alleges that treatment with the product carried a risk of adverse reactions of the type particularised in paragraph 8 of the statement of claim, and that the procedure involved varying degrees of pain.  It further alleges that the products were not natural because they included as an ingredient Lignocaine, a synthetically derived anaesthetic.

10                  The respondent denies that the statements were false or misleading or likely to mislead or deceive because to the relevant audience, being the consumers to whom the advertisement was addressed, the words meant, and would be understood to mean, no more than that the products were safe for their intended therapeutic use and that the products had, and were understood to have a low level of pain associated with them, notwithstanding the presence of an anaesthetic.

11                  The respondent admits that adverse reactions of the type pleaded in paragraph 8 of the statement of claim were possible, but denied that that possibility rendered the product or treatment unsafe or painful.  If the representations were false, then the respondent pleads that the making of them was innocent and de minimis.

12                  So far as the allegation that the products were not natural because of the inclusion of an anaesthetic which was synthetically derived, the respondent pleads that the representations went no further than representing that the products were substantially natural in content, without excluding the possibility that some minor part of the product may be synthetic.  If, which it denies, the representation was false, the respondent pleads that it was made innocently and was de minimis.

13                  Finally, the ACCC alleges that the advertisements represented to the public that three forms of Hylagenesis products were available to be supplied in Australia and that the three forms were registered with the TGA.  The ACCC alleges that at the time of the advertisements, only one Hylagenesis product “Hylaform Regular” was registered with the TGA, the other forms not being registered until in or about March 2002, and that only one form was available for supply at the time the advertisements were published.

14                  The respondent denies that the advertisements were false with respect to the three forms of Hylagenesis products, and pleads that the applications for registration of the further two forms of the product had been lodged at the time the advertisements were placed, and, that the respondent had reason to believe that the registration would be completed before release of the magazines.  If the representations were false, the respondent pleads they were made innocently and were de minimis.

15                  The respondent relies upon an affidavit of Jennifer Vallance, the managing director of the respondent, in support of its application.

16                  Ms Vallance in her affidavit deposes, so far as presently relevant :

“12.     These products are administered by fine needle injection into the superficial dermal layer of the skin.  The technique of serial puncture is recommended.  In some cases injections may cause transient pain.  However, for Collagen Instant Therapy products the extent of any transient pain is minimised by the inclusion in the products of a local anaesthetic, lignocaine.  As far as I am aware, no other form of similar injectable product contains an anaesthetic to minimise pain.

….

14.       It is important to note that as all these products are required to be injected into the outer layers of skin by a medical practitioner they are scheduled S4, prescription only medical devices under the Standard for the Uniform Scheduling of Drugs and Poisons (SUSDP), in accordance with Part 5B of the Therapeutic Goods Act 1989 (‘the Act’).

15.       The description of S4 goods is set out in the ‘Guidelines for National Drugs and Poisons Schedule Committee’, Australian Health Ministers’ Advisory Council, August 1997, as follows :

‘Schedule 4 poisons are substances and preparations for therapeutic use -

·        the use of which requires professional medical, veterinary or dental management or monitoring.

·        which are for ailments or symptoms that require professional medical, veterinary or dental diagnosis or management.

·        the safety or efficacy of which may require further evaluation.

·        which are new therapeutic substances.’

16.       Each of my company’s products have a ‘Product Information’ approved by the TGA for the guidance of medical practitioners.  The Product Information (PI) is a document which contains information sufficient to ensure the safe and effective use of the product under nearly all circumstances.  It is to present a scientific, objective account of the product’s usefulness and limitations as shown by the data supporting the application.

17.       The PI can also contain contraindications, warnings, precautions and details of possible adverse reactions as indicated by available data.  This is to alert medical practitioners on the possible side effects that may be experienced when treating individual patients with the product.  The PI for all my company’s products contain appropriate sections under some or all of these headings for the guidance of medical practitioners.

18.       The products used in the Collagen Instant Therapy and Hylagenesis treatments are not free from potential side effects.  This is obvious from the PI brochures and the instructions for use which accompany the products.  My company distributes this information to doctors and prospective patients and it clearly explains these possible risks.  In particular, these papers encourage patient disclosure by including in the brochure an acknowledgement for patients to sign and give to their doctor to the effect that they have read the brochure, discussed it with their doctor and understand the information in it.  The brochure also includes a sticker which doctors are asked to remove and place on each patient’s medical card when they give this pamphlet to a patient.  Consequently prospective patients have no choice but to discuss the full implications of the treatment, including possible treatment responses and adverse reactions, with their medical practitioner prior to treatment.

19.       In addition, all our Collagen Instant Therapy products are subject to allergy testing in each patient prior to treatment.  A test dose is administered intradermally into the forearm to screen out individuals who might develop [sic] hypersensitivity to inectable bovine dermal collagen.  If the test implantation response is positive, the patient must not be treated with inectable collagen implants.

20.       The Adverse Drug Reactions Advisory Committee Section of the TGA advised on 14 June 2002 that there are no reports in Australia of any adverse reactions associated with the substances collagen and hyaluronic acid, (Annexure JCV1).  Adverse reactions to this form of treatment tend to arise not from the substances used but from the method of administration by fine needle injection into the superficial dermal layer of the skin.”

17                  Ms Vallance deposes to an advertisement being placed by a competitor of her company :

“28.     In June 2001 I approached the Sydney Office of the ACCC, Castlereagh St. Sydney to lodge a formal complaint about false advertising carried out by Q-Med which inferred that our products could cause Mad Cow Disease or Avian (Hong Kong) Flu as both collagen instant therapy and hyaluronic acid are animal sourced, ie bovine and bird respectively.  The advertisements also claimed that Restylane was a ‘natural treatment’.

29.       Advertisements had been placed by Q-med in Harpers Bazaar (March 2001 issue, Annexure JCV3) and Good Medicine (July 2001 issue but available for sale first week of June).  These advertisements then formed part of the marketing material used to promote Q-med’s product Restylane (Hyaluronic acid) to doctors throughout Australia.  I personally received a number of telephone calls from the general public looking for reassurance of our products safety and also from doctors who expressed surprise at the ‘scare tactics’ being used by Q-Med and who, said they, were receiving telephone calls from existing patients who were anxious after reading the advertisement.  I did not keep a record of each call.  The potential commercial damage to our Company regarding new customers/patients and to our Company’s reputation was enormous.

30.       I was advised by the male officer at the ACCC in words to the effect ‘as your products are under the jurisdiction of the TGA you should refer your complaint to them’.  He further said, ‘It is not our role to become involved in anti-competitive behaviour even if it does cause stress to consumers’.

31.       In July 2001 I then arranged a meeting with the TGA in Canberra.  Those present were the following officers from the Chemicals and Non-Prescription Medicines Branch, Mr Pio Cesarin, Ag Head, Dr Graham Maynard, Clinical Unit, and Ms Linda Punyer, Advertising Unit.  At the meeting I reiterated our complaint about the Q-med advertisements.  They each expressed their sympathy with our problem and made certain comments about their experience with Q-Med and then promised to submit the complaint to the Complaints Resolution Panel (CRP).

32.       At the end of the meeting I was escorted from the TGA premises by Dr Maynard.  Dr Maynard said ‘I am concerned about the behaviour of Q-Med’.  We then talked about the different safety requirements for registered products compared to listed products and the fact that the general public was not aware of the extensive data requirements that we were required to submit to satisfy registration approval.  Dr Maynard then said, ‘Perhaps you should make more people aware of this fact to address the situation.’  I interpreted his suggestion to mean through advertising so as to properly inform the public.”

18                  Ms Vallance concludes :

“54.     Although I have no factual basis on which to form this view, I suspect that Q-Med lodged the complaint in Adelaide with the ACCC for the purpose of using the ACCC to take the action they have in the belief that such action with the accompanying negative press coverage traditionally instigated by the ACCC would inflict commercial harm on our business and thus give Q-Med a commercial advantage.  For example, Q-Med appear to have been aware of the ACCC action against my company’s advertising and I understand that their Australian Head Office in Sydney forwarded a copy of the ACCC Press Release listing the alleged misleading advertisements to doctors throughout the world within hours of the ACCC press release in Australia.  I was informed by some doctors that they had received such an e-mail from Q-med.  This e-mail was followed up by a letter dated 30 May 2002, Annexure JCV15.

55.       The cosmetics industry is quite distinct from normal health services delivery where diagnosis by a medical practitioner is followed by an appropriate treatment regime.  The initiation of treatment in most cases is at the instigation of the patient and is highly discretionary.  The extent to which a company can advertise the type of cosmetic treatment available is therefore crucial to commercial success.”

19                  It is an offence under Reg 6(1)(e) of the Therapeutic Goods Regulations to publish an advertisement about goods for therapeutic use that refers to goods or substances or preparations containing goods included in Schedules 3, 4 or 8 to the Poisons Standard, except goods or substances or preparations mentioned in Appendix H of the Standard.  Consequently, Reg 6(1)(e) prohibited the use of advertisements of products containing Collagen.

20                  On 26 October 2001, by letter of that date, the TGA advised the respondent that it had received complaints concerning advertisements of Collagen products in “Australian Cosmetic Surgery Magazine”, “Cosmetic Beauty”, “Harpers Bazaar” and “Vogue Australia”.  It was alleged that the advertisements contravened Reg 6(1)(e) of the Therapeutic Goods Regulations and requested the respondent to cease advertising products containing Schedule 4 ingredients immediately.  A written response to the letter was requested within ten working days.  The advertisements the subject of this letter are the advertisements the subject of the proceedings initiated by the ACCC.

21                  The respondent also filed an affidavit of Daniel Steiner, solicitor of Capital Lawyers, Canberra ACT in support of the motion.  He deposes as follows :

“3.       A Notice of Grounds of Defence has been filed in this matter.  In the Defence the Respondent admits to certain breaches of section 52 Trade Practices Act 1975 (TPA) pleaded in paragraph 6 of the Statement of Claim but maintains that the breaches were both innocent and, to the degree indicated in the Defence, carried out at the suggestion of a senior officer of the Therapeutic Goods Administration.  These breaches related to the Respondent’s misrepresentation of the legal effect of ‘registration’ as opposed to ‘listing’ under the Therapeutic Goods Act 1989.

4.         The Respondent has put to the Applicant a draft copy of a corrective advertisement going to the above matters, albeit that the Respondent considers that such a remedy is beyond anything the public interest requires in the present case.  A copy of the advertisement and covering letter to the Applicant’s solicitors forms annexures DDS-1 and DDS-2 respectively.

5.         In the Defence the Respondent denies the remaining allegations, which it contends are either not fairly based in fact or are de minimis.

6.         The Respondent contends that the representations in the advertisements are attacked in paragraphs 7-10 of the Statement of Claim, going to the issues of ‘painlessness’, ‘safety’, ‘natural’, are each substantially true as per the paragraphs 7-10 of the Defence.  To the extent that they are not totally and absolutely true is de minimus.  In the alternative any misleading of the public would be non-existent and the public interest does not demand either the penalty the Applicant seeks to impose on the Respondent for these alleged breaches and does not warrant the public expense of a trial on these issues.

7.         The Respondent contends that the allegations contained in the Statement of Claim going to the issue of whether there were three forms of the Respondent’s product on the market at the time the advertisements were placed or only one form, is again an allegation of no substance.  As per paragraphs 11-13 of the Defence, at the time the advertisements were placed the approval for the further two forms of the Respondent’s product had been sought from the Therapeutic Goods Administration and the Respondent had good reason to believe that it would be granted expeditiously per Affidavit of Jennifer Vallance sworn 16 July 2002.  The approval was granted but only after a delay on the part of the Therapeutic Goods Administration, and the further two products were on the market shortly after the advertisements were published.  The advertisements were published some three months after they were placed with the magazines in question.  The Respondent contends that if there is any breach of section 52 then it is de minimis and the public interest does not warrant the Penalty the Applicant seeks to impose on the Respondent, and does not warrant the expense of a trial on these issues.

8.         The Respondent contends that even if all of the allegations in the Statement of Claim were found to be proven, it was not ever possible for any member of the public within the relevant audience to suffer any harm from the advertisements.  The relevant audience is mature aged women.  The products are categorised S4 under the Therapeutic Goods Act 1989 per Affidavit of Jennifer Vallance sworn 16 July 2002, and therefore cannot be accessed without a prescription from a general practitioner.  At this point any women seeking to access the treatment would be fully informed by the general practitioner of the nature of the treatment and such risks as there are.  The Respondent’s product contains, by law, what is known as a Product Information which accompanies the product to the medical practitioners.  The product information puts the doctor on notice of any risk factors associated with the use of the product and therapy.  The customer is at this point fully informed that the product is administered by needle therapy with consequent transient pain associated with the injections prior to the anaesthetic taking effect, and is aware of any possible adverse reactions.  The Respondent maintains that women seeking the treatment would be aware of these facts before attending the general practitioner and that the Applicant’s assumptions concerning the lack of common sense and general knowledge of these women is altogether demeaning of women in general.

9.         However, even if the women within the relevant audience were still not aware of the nature of the product and treatment after reading the relevant advertisements, making their own enquires [sic] and being informed by their general practitioner, the therapy itself must be administered by a cosmetic surgeon or physician.  The surgeon is required to satisfy him/herself that the patient understands the nature of the treatment and risks.  There are thus four separate levels of information and two levels of safeguards built into the regime.

10.       For the above reasons the Respondent contends that :

(a)       The extent of any breach alleged by the Applicant is de minimis at best;

(b)       The extent of any risk to the public is negligible and in fact there is no record of any significant adverse reaction to the products reported in Australia.

Accordingly, this is not an appropriate matter for trial and is one which should be settled via mediation.”

22                  This material, counsel for the respondent submits, demonstrates that :

(a)        the allegations made involve trivial contraventions, if indeed any contravention of the relevant sections of the TPA exist;

(b)        there is no public interest in prosecuting the proceedings because any contravention was de minimus, trivial, innocently made and encouraged or approved by the conduct of the TGA having regard to the conduct of Dr Maynard as deposed to in paragraph 32 of Ms Vallance’s affidavit;

(c)        there is no public interest in prosecuting the proceedings because there is no evidence that anyone was misled, or is likely to be misled, by the misrepresentations.  This is, or would be, because the medical profession would, in the ordinary course of events, ensure that the consumer had a full understanding of the risks of pain, contraindications, and adverse side effects, prior to administration of the treatment using the product, and, would protect consumers from adverse reactions by appropriate testing before administering treatment.  That is, there was no need to qualify the original advertisements by reference to the matters provided to medical practitioners by way of product information and product warnings because it could reasonably be expected that that would be done by the medical practitioner before a prescription for the product was given to the consumer;

(d)        the nature of the contraventions, as demonstrated by the materials, was not sufficiently serious to put the respondent to further cost and expense beyond the substantial costs it had already incurred, having regard to a press release made by the ACCC at the time of the initiation of the proceedings;

(e)        the advertisement of three forms of product when only one was registered was due to delay on the part of the TGA in completing the registration process, and was in any event of no significance because the remaining products were in fact registered shortly after the advertisements appeared.

23                  The ACCC opposes the making of an order that the matter proceed to mediation, not because it is in principle opposed to mediation in the discharge of its functions under the TPA, but because it submits the present case is not a suitable case to send to mediation.

24                  The ACCC submits that :

(a)        the parties have tried to settle the matter between themselves and have failed;

(b)        it is unlikely that the matter will settle because there is a fundamental divide between the ACCC and the respondent as to whether the contravention is trivial and not worth pursuing in the public interest;

(c)        there are certain aspects of the present case which in the view of the ACCC justify, in the public interest, the further prosecution of the matter in the Court.  They are :

(i)         as Ms Vallance deposed, this advertising is directed to the promotion of medical products to consumers for discretionary use rather than for medical need.  It is a particular market where the consumer chooses a particular product for use in a medical procedure initiated by the consumer.  Advertising is crucial to commercial success in that market;

(ii)        the advertising relies upon medical practitioners to qualify, limit or explain the representations contained in the advertising material relating to the safety and constituents of the products, pain levels associated with the procedures using the products, and any adverse reactions to the products or the treatment;

(iii)       whether, as the respondent contends, reliance on medical practitioners in the manner indicated is a circumstance exonerating, or ameliorating, any conduct of the respondent in contravention  of s 52 or s 53 of the TPA.

25                  In my view, it is not appropriate on the material presently before the Court for it to determine whether or not the matters complained of are trivial and not worth pursuing in the public interest by the ACCC.  The record is incomplete and the falsity of certain of the representations is denied.  However, if the material remained as it is, it would be open to infer that :

(a)        safety, pain and the source of the materials from which the products were made were commonly matters of concern to potential customers, or a particular source of concern induced by the conduct of the respondent’s competitor, which the respondent sought specifically to allay by the content of the advertisements the subject of the proceedings;

(b)        a conscious decision was made to promote the product as a safer product than that of the competitor by seeking to use the credibility of the TGA as the public registering authority to allay any fears as to the safety of the respondent’s products in comparison to the competitor’s products induced by the competitor’s advertising which raised the spectra of infection from, or reaction to, products made from bovine or bird materials;

(c)        a conscious decision was made to make representations as to the safe and painless use of the products without any qualification or limitation as to those matters in order to induce consumers to make discretionary choices to seek to obtain the products, the respondent relying upon the medical profession to correct any misconceptions as to the use of the products induced by the advertisements and to identify and protect from harm any consumer for whom the product would be unsuitable or would involve an unacceptable level of risk;

(d)        the advertisements were placed in journals and magazines with a wide circulation to cover previous advertising of the respondent’s competitor which the respondent regarded as having had an adverse effect upon the respondent’s commercial interests.

26                  These circumstances would, in my view, make it difficult to characterise the conduct engaged in as trivial in nature, innocently engaged in without a true comprehension of what was said and intended by the statements, and without a true comprehension of what they meant, and were intended to mean, to the category of consumer to whom they were directed.  It must not be forgotten that the purpose of Part V of the TPA is to create new norms of conduct and to provide for the observance of the provisions contained in the Part by those who engage in the supply of goods and services in the market place:  Truth About Motorways Pty Ltd v Macquarie Infrastructure Investment Management Ltd [2000] 74 ALJR 604 at [17], [35], [79] and [141].  The legislative purpose was to modify unacceptable conduct which had the potential to mislead and deceive whether or not it did in fact have such an effect.  Damage to a consumer is not the gist of actionability for a contravention of Part V of the TPA.  The use of product endorsements or approvals to deal with issues of product safety which are false and misleading are treated by the Court as serious matters:  see for example, Hartnell v Sharp Corporation of Australia (1975) 5 ALR 493.

27                  There is nothing in the material of the respondent or in the submissions made by counsel on its behalf to indicate that there is any likelihood that the respondent will move from its position that it has done nothing wrong, or, if some breach has occurred, it is other than immaterial or the consequence of the conduct of some other person or agency.  A mediator is sought by the respondent to apply pressure on the ACCC to abandon its position, to accept or substantially accept the position adopted by the respondent, and to abandon the proceedings or to accept some form of remedial advertising that will not further adversely affect the commercial interests of the respondent.  On the material before the Court, and having heard counsel on behalf of the ACCC, I am satisfied that there is no reasonable prospect of that happening.

28                  To order the parties to mediation would, in my view, simply incur additional cost and delay without any reasonable prospect that the parties would by mutual agreement resolve the matters in dispute between them.  Although I have been referred to statements of a number of Judges of this Court and other courts in favour of and against a reference to mediation in the face of objection from one of the parties, it is, in the end, a matter in each case for the Court to make an assessment of the utility of mediation in the particular circumstances of the case in question, rather than the adoption of some rule or principle applicable to categories of cases.  In my view, there is no utility in the circumstances of this case ordering that the matter be referred to mediation. 

29                  Accordingly, I decline to make such an order.

30                  I turn now to the application to transfer the proceeding to Canberra or Sydney.

31                  The applicable test to be applied to such an application was determined by a Full Court of this Court (Bowen CJ, Woodward and Lockhart JJ) in National Mutual Holdings Pty Ltd v The Sentry Corporation (1988) 19 FCR 155.  Their Honours said (at 162) :

“... Ultimately the test is:  where can the case be conducted or continued most suitably bearing in mind the interests of all the parties, the ends of justice in the determination of the issues between them, and the most efficient administration of the Court.  It cannot and should not, in our opinion, be defined more closely or precisely.”

32                  The respondent seeks to have the proceedings transferred to Sydney or Canberra because :

(a)        for reasons of internal convenience and resource allocation, the investigation of the matters in issue was carried out by the ACCC’s Adelaide office, notwithstanding that the complaint upon which the ACCC acted was lodged in Sydney;

(b)        the proceedings were commenced in Adelaide because the matter had been investigated by the South Australian office of the ACCC and for no other reason;

(c)        the respondent is a smaller and less wealthy party than the ACCC and will be put to additional and unreasonable expense and inconvenience in litigating in Adelaide rather than Sydney, where the respondent is based and carries on business, or Canberra where the respondent’s present lawyers practice and where the TGA is situated;

(d)        it is likely that witnesses from the TGA, which is situated in Canberra, will be called by the respondent on the trial of the proceeding, or, the TGA may itself be joined as a party by the respondent;

(e)        the respondent asserts that it will obtain an earlier hearing in Canberra or Sydney than it will in Adelaide;

(f)         the national character of the ACCC makes it easier for it to litigate out of its Sydney or Canberra regional offices.

33                  The ACCC opposes any transfer of the proceedings from the South Australian registry.  It submits :

(a)        the advertising campaign was national in character and included South Australia;

(b)        the investigating officers are located in Adelaide and if the matter is transferred to another registry, it may be necessary to engage new officers of the ACCC to take over the conduct of the matter and to engage new legal representation to act;

(c)        any transfer will result in the inefficient use and waste of the ACCC’s resources;

(d)        no good reason has been shown for transferring the matter from the registry of choice of the ACCC;

34                  The proceedings have only reached the stage of the filing of a statement or claim and the filing of a defence.  There have been no directions made as to the further interlocutory steps to be taken to progress the matter to trial.  There is nothing in the material to indicate that any of the interlocutory steps are likely to be contentious and unable to be disposed of by use of the Court’s video-conferencing facilities.  Because there is no significant Court history of the proceedings in Adelaide, the filing in Adelaide of the application and pleadings do not of themselves weigh heavily against transfer:  19 FCR at 162.

35                  The initiation of the proceedings in Adelaide is fortuitous in the sense that it clearly followed upon the decision to investigate the complaint received in Sydney in the Adelaide office of the ACCC because resources were not then available in Sydney.  If the matter had been investigated in Sydney, I have no doubt that the proceedings would have been commenced in the New South Wales Registry.

36                  The matter having been investigated, it seems unlikely that those carrying out the investigation will be necessary witnesses as there seems little factual dispute as to what has occurred other than, perhaps, the respondent’s dealing with the TGA in Canberra.  The likely witnesses are said to be Ms Vallance and officers of the TGA, together with documents of the TGA as to its dealings with the respondent concerning control of its advertising generally, and its involvement, if any, with the advertisements in issue and the circumstances surrounding the registration of the forms of Hylageneses products other than “Hylaform Regular”.  It is also possible that some evidence may be called as to the different regimes for registered and listed therapeutic products administered by the TGA.  If third party discovery is necessary to obtain access to the records of the TGA, those records are in Canberra.  If the TGA is to have recourse to legal advice, having regard to questions being raised as to its responsibility for any of the conduct complained of, the probability is that such advice will be sought in Canberra.

37                  The only prejudice facing the ACCC is the additional cost of having its officers and retained legal representatives travel to either Sydney or Canberra for any trial.  No cogent reason has been demonstrated to me as to why those presently handling the matter for the ACCC would have to divest themselves of it, if it is transferred to another registry of the Court.

38                  In my view, because of the likely involvement of officers of the TGA including Dr Maynard who apparently now resides in Queensland and the likely recourse to the documents of the TGA, the interests of all parties are best served by continuation of the proceedings in Canberra where the TGA is located.  The issues raised by the ACCC for determination cannot be divorced from the working relationship which existed between the respondent and the TGA as the regulator responsible for administration of the Therapeutic Goods Act 1989 (Cth).  The most efficient way to adjudicate the issues raised on the pleadings is to transfer the proceedings to the registry where the TGA is situated.

39                  In my view, having regard to the outcome on the motion, the costs of each party should be its costs in the proceedings.

Associate:

Dated:              13 September 2002