FEDERAL COURT OF AUSTRALIA

Secretary, Department of Health and Ageing v Prime Nature Prize Pty Ltd (in liquidation) [2010] FCA 597

THE COURT ORDERS THAT:

1.         Pursuant to s 471B of the Corporations Act 2001 (Cth) the applicant has leave, nunc pro tunc, to begin and proceed with this proceeding against the first respondent on condition that the applicant does not take any step to enforce against the first respondent any order for the payment of any amount of money, whether by way of penalty, costs or otherwise, without the further leave of the Court.

2.         The first respondent pay to the Commonwealth of Australia pecuniary penalties in respect of the contraventions of the Therapeutic Goods Act 1989 (Cth) described in declarations 1 to 8 below in the amount of $7,250,500.

3.         The second respondent pay to the Commonwealth of Australia pecuniary penalties in respect of the contraventions of the Therapeutic Goods Act 1989 (Cth) described in declarations 9 to 14 below in the amount of $575,250.

4.         Pursuant to s 54(3) of the Therapeutic Goods Act 1989 (Cth) the first and second respondents forfeit all supplies of the therapeutic goods, OsteoMax-7 and Plamax to the Commonwealth to be disposed of in accordance with s 54(5).

THE COURT DECLARES THAT:

1.         In the period 31 May 2006 to 13 December 2006 the First Respondent contravened s 42EA of the Therapeutic Goods Act 1989 (Cth) by supplying in Australia ‘OsteoMax-7’, being a counterfeit therapeutic good in that its packaging included the text ‘AustL 122296’ which represented, falsely, that OsteoMax-7 was included on the Australian Register of Therapeutic Goods.

2.         In the period 31 May 2006 to 13 December 2006 the First Respondent contravened s 19D(1)(a)(iv) of the Therapeutic Goods Act 1989 (Cth) by supplying in Australia ‘OsteoMax-7’, a therapeutic good for use in humans, in circumstances where the therapeutic good was not listed on the Australian Register of Therapeutic Goods and none of the subparagraphs in s 19D(1)(b) applied.

3.         In the period 31 May 2006 to 13 December 2006 the First Respondent contravened s 42EA of the Therapeutic Goods Act 1989 (Cth) by manufacturing in Australia ‘OsteoMax-7’, being a counterfeit therapeutic good in that its packaging included the text ‘Aust L 122296’ which represented, falsely, that it was included on the Australian Register of Therapeutic Goods.

4.         In the period 31 May 2006 to 13 December 2006 the First Respondent contravened s 19D(1)(a)(iii) of the Therapeutic Goods Act 1989 (Cth) by manufacturing in Australia ‘OsteoMax-7’, a therapeutic good for use in humans, in circumstances where the therapeutic good was not listed on the Australian Register of Therapeutic Goods and none of the subparagraphs in s 19D(1)(b) applied.

5.         In the period 31 May 2006 to 4 January 2007 the First Respondent contravened s 19D(1)(a)(iv) of the Therapeutic Goods Act 1989 (Cth) by supplying in Australia ‘Plamax’, a therapeutic good for use in humans, in circumstances where the therapeutic good was not listed on the Australian Register of Therapeutic Goods and none of the subparagraphs in s 19D(1)(b) applied.

6.         In the period 31 May 2006 to 13 December 2006 the First Respondent contravened s 21B(3) of the Therapeutic Goods Act 1989 (Cth) by causing ‘Aust L 122296’ to be displayed on the packaging of ‘OsteoMax-7’, thereby representing that a therapeutic good was included in the Australian Register of Therapeutic Goods when the therapeutic good was not so included.

7.         On 1 December 2006 the First Respondent contravened s 21B(3) of the Therapeutic Goods Act 1989 (Cth) by providing officers of the Therapeutic Goods Administration with a fabricated Certificate of Medicine Listing which purported to certify that ‘Plamax’ was listed on the Australian Register of Therapeutic Goods, thereby representing that a therapeutic good which was not included in the Australian Register of Therapeutic Goods was so included.

8.         The First Respondent contravened s 54AC of the Therapeutic Goods Act 1989 (Cth), by, falsifying a Certificate of Medicine Listing for the therapeutic good, ‘Plamax’, being a document that was purportedly created for purposes that included the purposes of the Therapeutic Goods Act 1989 (Cth), which falsification was likely to interfere with the proper administration of the Therapeutic Goods Act 1989 (Cth).

9.         In the period 31 May 2006 to 13 December 2006 the Second Respondent pursuant to s 42YC contravened s 42EA of the Therapeutic Goods Act 1989 (Cth) by aiding, abetting, counselling or procuring the First Respondent’s contraventions of that section (by supplying the counterfeit therapeutic good ‘OsteoMax-7’) as set out in declaration 1 above.

10.       In the period 31 May 2006 to 13 December 2006 the Second Respondent pursuant to s 42YC contravened s 19D(1)(a)(iv) of the Therapeutic Goods Act 1989 (Cth) by aiding, abetting, counselling or procuring the First Respondent’s contraventions of that section (by supplying  ‘OsteoMax-7’ in circumstances where the therapeutic good was not listed on the Australian Register of Therapeutic Goods) as set out in declaration 2 above.

11.       In the period 31 May 2006 to 13 December 2006 the Second Respondent pursuant to s 42YC contravened s 42EA of the Therapeutic Goods Act 1989 (Cth), by aiding, abetting, counselling or procuring the First Respondent’s contraventions of that section (by manufacturing the counterfeit therapeutic good ‘OsteoMax-7’) as set out in declaration 3 above.

12.       In the period 31 May 2006 to 13 December 2006 the Second Respondent pursuant to s 42YC contravened s 19D(1)(a)(iii) of the Therapeutic Goods Act 1989 (Cth) by aiding, abetting, counselling or procuring the First Respondent’s contraventions of that section (by manufacturing ‘OsteoMax-7’ in circumstances where the therapeutic good was not listed on the Australian Register of Therapeutic Goods) as set out in declaration 4 above.

13.       In the period 31 May 2006 to 4 January 2007 the Second Respondent pursuant to s 42YC contravened s 19D(1)(a)(iv) of the Therapeutic Goods Act 1989 (Cth) by aiding, abetting, counselling or procuring the First Respondent’s contraventions of that section (by supplying ‘Plamax’ in circumstances where the therapeutic good was not listed on the Australian Register of Therapeutic Goods) as set out in declaration 5 above.

14.       In the period 31 May 2006 to 13 December 2006 the Second Respondent pursuant to s 42YC contravened s 21B(3) of the Therapeutic Goods Act 1989 (Cth) by aiding, abetting, counselling or procuring the First Respondent’s contraventions of that section (by falsely representing that ‘OsteoMax-7’ was included in the Australian Register of Therapeutic Goods) as set out in declaration 6 above.

Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using Federal Law Search on the Court’s website.

REASONS FOR JUDGMENT

Introduction

1                          By application filed on 10 September 2009 the Secretary of the Department of Health and Ageing seeks declarations under s 21 of the Federal Court of Australia Act 1976 (Cth); pecuniary penalties under s 42Y of the Therapeutic Goods Act 1989 (Cth) (TGA) in relation to contraventions of the TGA by the first and second respondents; and orders for the forfeiture of therapeutic goods under s 54 of the TGA.  

2                          The statement of claim filed on 10 September 2009 pleads contraventions by both respondents of ss 19D(1)(a)(iii), 19D(1)(a)(iv), 21B(3)(a) and 42EA of the TGA.  In addition it is pleaded that the first respondent (PNP) contravened s 54AC of the TGA.  The contraventions of the second respondent, Mr Kim, are alleged to arise from the second respondent’s involvement in contraventions by the first respondent, within the meaning of s 42YC of the TGA. 

3                          Both respondents admit the contraventions that are pleaded against them.  The only issue in dispute between them is the amount of any civil penalty to be imposed on each respondent pursuant to Part 5A-1 of the TGA.  The second respondent did not appear at the hearing.  The applicant tendered an email dated 1 April 2010 from the second respondent’s solicitors to the solicitors for the applicant.  The email advised that the second respondent would not be appearing at the hearing and that he understood that it would proceed in his absence.  Other correspondence and documentation relevant to the second respondent’s ability to pay penalties, including a draft debtor’s petition, were also annexed to the affidavit.  That material is discussed below in relation to the determination of penalties.

EVIDENCE

4                          The evidence in this proceeding comprised a statement of agreed facts, documents annexed to the statement and referred to in it as attachments, and two affidavits of Mr Loganathan Sinnathurai, a solicitor employed by the Australian Government Solicitor who acts for the applicant.  Mr Sinnathurai’s affidavits were affirmed on 31 March 2010 and 7 April 2010 respectively.

Statement of agreed facts

5                          The Secretary of the Department of Health and Ageing, the applicant in this proceeding, has tendered as Exhibit A, a statement of agreed facts signed by the solicitor for the applicant and the official liquidator of PNP.  Exhibit B was an identical statement signed by the solicitor for Mr Kim.  Pursuant to s 191 of the Evidence Act 1995 (Cth) evidence is not required to prove the existence of the facts in the statement and they may not be contradicted or qualified by evidence adduced for that purpose without the leave of the court.  Section 191 does not prescribe the weight that is to be given to that evidence.

6                          As it happened, the document tendered as a statement of agreed facts included not only statements of facts, but also statements of argument and conclusion.  The distinction is important as s 191 only applies to facts.  While I must accept those facts as evidence in the proceeding, I am not obliged to accept the parties’ submissions even if agreed between them and contained in the s 191 statement.  At the request of the Court, on 16 April 2010, the applicant filed a marked up version of the statement distinguishing between the factual and the non-factual statements.  The non-factual statements generally related to the legal analysis to be applied to the agreed facts.  I have accepted the evidence of the agreed facts and have treated the non-factual statements as agreed submissions.  The applicant filed separate (unilateral) submissions in support of the relief sought in this proceeding.  

Documents attached to the statement of agreed facts

7                          There were 10 annexures to the statement of agreed facts, being letters or other documents relevant to claims made in the proceeding and to the facts set out in the statement of agreed facts.  After I expressed concern about the evidentiary status of the annexures, in particular in the context of s 191 of the Evidence Act, the applicant tendered those documents separately.  The annexures are referred to in the statement of agreed facts signed on behalf of all parties and therefore, although formally tendered by the applicant, I am satisfied that the respondents had consented to them being adduced in evidence.  The documents provided additional evidence supporting the applicant’s claims. 

Sinnathurai  affidavit of 31 March 2010

8                          This affidavit was sworn in support of the application for leave to proceed against the second respondent, being a company in liquidation.  It annexes documents and correspondence relevant to that application which is discussed below at [11]-[19].

Sinnathurai  affidavit of 7 April 2010

9                          This affidavit was sworn in support of the main application.  It annexes correspondence and documentation relating to Mr Kim’s financial position.  Where relevant, those documents are referred to below. 

THE THERAPEUTIC GOODS ACT 1989 (CTH)

10                        The objects of the TGA are set out in s 4 of the Act.  Section 4(1) provides that within the bounds of the Constitution, its objects are 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; or

(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.

11                        The applicant is responsible for the regulation of therapeutic goods in accordance with the TGA.  Pursuant to s 42Y(1) of the Act, the Secretary, on behalf of the Commonwealth, may apply to this Court for penalties to be imposed in respect of contraventions of the civil penalty provisions.

12                        It is the responsibility of the Secretary to maintain the Australian Register of Therapeutic Goods (Register); s 9A.  The Register’s purpose is to compile information in relation to therapeutic goods for use in humans and to provide for their evaluation.  Section 9A(3) provides for the Register to contain 3 parts being respectively, for registered goods, for listed goods and for medical devices.  For present purposes only the part for listed goods is of interest.  According to the statement of agreed facts:

Listed goods are generally considered to be of lower risk to humans than registered goods.  Listed goods commonly only contain well known established ingredients, usually with a long history of use, such as vitamin and mineral products or sunscreens.  Most complementary medicines (eg herbal, vitamin and mineral products) are listed goods.

13                        Section 19D(1)(iii) and (iv) of the TGA provides that it is a contravention of the section if, relevantly, a person manufactures or supplies in Australia “therapeutic goods for use in humans” and none of the following subparagraphs of s 19D(1)(b) applies:

(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 approval under section 19A.

An application for the listing of therapeutic goods that are medicines must comply with s 26A.  The definition of medicine in s 3 of the TGA includes therapeutic goods “that are represented to achieve their principal intended action by pharmacological, chemical, immunological or metabolic means in or on the body of a human”.  Section 26A(2) provides, inter alia, that an applicant must certify that: the medicine is eligible for listing; that it is safe for the purposes for which it is to be used; that its presentation is not unacceptable; that all prescribed safety and quality standards referred to in the section have been complied with; that the information included in the application is correct; and that the applicant holds information or evidence to support the claims made in the application

APPLICATION FOR LEAVE – CORPORATIONS ACT S 471B

14                        Prime Nature Prize Pty Ltd (PNP) is currently in liquidation.  Pursuant to s 471B of the Corporations Act 2001 (Cth) the applicant requires leave to proceed against PNP.  The application for leave was made by notice of motion filed on 31 March 2010 and was supported by the Sinnathurai affidavit of 31 March 2010.

15                        The discretion to grant leave under s 471B is unconfined, however, in considering the issues the Court will be guided by previous decisions as to the relevant factors to be considered and the purpose of the statutory restriction.  The purpose behind the statutory requirement for leave was explained by Lee J in Executive Director of the Department of Conservation and Land Management v Ringfab Environmental Structures Pty Ltd [1997] FCA 1484 (Ringfab) at 2, where his Honour said of a predecessor to s 471B:

Section 500(2) of the Corporations Law requires the leave of the Court to be obtained before an action may be commenced against a company in liquidation. The purpose of such a provision is to prevent a company in liquidation being subjected to actions that are expensive and, therefore, carried on at the expense of the creditors of the company and, perhaps, unnecessarily: Fielding v Vagrand Pty Ltd (In Liquidation) (1993) 11 ACLC 172 at 174; Ogilvie Grant v East (1983) 1 ACLC 742 at 744; Maher v Taylor (1984) 8 ACLR 931 at 934; Re A J Benjamin Ltd (In Liquidation) (1969) 90 WN (Pt 1) (NSW) 107 at 110.

In determining whether leave should be granted, the Court considers whether the balance of convenience lies in allowing the applicant to proceed by way of action to judgment, or whether the applicant should be left to pursue his claim by lodging a proof of debt with the liquidator.  The matter is one of discretion and the onus is on the applicant to demonstrate why it is more appropriate, in respect of a particular claim, to proceed by way of action: Fielding v Vagrand at 174; Ogilvie Grant v East at 744; Stewart v Intercity Distributors Limited (1960) NZLR 944 at 946.

16                        In Ringfab Lee J emphasised that there must be “a serious or substantial question to be tried” and the claim must not be futile.  In Oceanic Life Ltd v Insurance and Retirement Services Pty Ltd (in liq) (1993) 11 ACSR 516 Zeeman J said, at 520:

Questions relevant to the exercise of my discretion as to whether leave ought to be granted at all include the following:

1.         Whether there is a substantial question to be tried.

2.         Whether the action would interfere with the orderly winding up of the respondent.

3.         Whether the action would serve any sufficient purpose.

4.         Whether the action would have any adverse effect upon the respondent and its shareholders.

17                        In Swaby v Lift Capital Partners Pty Ltd [2009] FCA 749 at [29] Gilmour J gave an expanded list of factors that may be relevant to the exercise of the court’s discretion under s 471B including:

(a)        the amount and seriousness of the claim;

(b)        the degree and complexity of the legal and factual issues involved;

…

(f)        whether the claim has arguable merit;

…

(h)        whether the proceedings will result in prejudice to the creditors;

(i)         whether the claim is in the nature of a test case for the interest of a large class of potential claimants;

(j)         whether the grant of leave will unleash an 'avalanche of litigation';

…

18                        His Honour helpfully listed the following relevant authorities: Re Gordon Grant and Grant Pty Ltd [1983] 2 Qd R 314 at 317; Commonwealth v Davis Samuel Pty Ltd (No 5) [2008] ACTSC 124 at [30], [32]; Lawless v Mackendrick (No 2) [2008] WASC 15 at [35];Altinova Nominees Pty Ltd v Leveraged Capital Pty Ltd (Receivers and Managers Appointed) (in liq) (No 2) [2009] FCA 42; Ingot Capital Investments Pty Ltd and Ors v Macquarie Equity Capital Markets Pty Ltd and Ors [2004] NSWSC 406.  

19                        It can be seen that there is general agreement as to the relevant factors.  Having considered these I have concluded that leave should be granted.  The considerations that have led me to this conclusion are explained below.

A serious question and a sound case

20                        Given that both respondents have admitted the contraventions there is undoubtedly, in relation to the questions of penalties, a sound case and a serious question for the court.  Evidence will not be required to prove the facts that are included in the statement of agreed facts.  These facts provide a basis for determining the appropriate penalties. 

Effect on creditors 

21                        The official liquidator of PNP, Mr Murray Godfrey, has stated in a letter dated 16 October 2009, that he was not aware of any other intended litigation against the company; that the winding up of the company is complete except for deregistration; and that as there would not be any payment to creditors, the proceedings would not adversely affect creditors.  The liquidator does not oppose the grant of leave and has entered a submitting appearance except as to costs.  The applicant does not seek a costs order in respect of the proceeding.

Public interest

22                        It is evident from the objects of the TGA that the Act is an important public health and safety measure.  As such, there is a significant public interest in declarations of contravening conduct and the imposition of penalties being on the public record.   The penalties are directed to ensuring compliance with the Act not only in the future conduct of the contravenor but also by others.  This deterrent function is not defeated by the fact that the company is in liquidation and unable to pay penalties; Australian Competition and Consumer Commission v SIP Australia Pty Ltd [2003] FCA 336 at [59]; see also Australian Competition and Consumer Commission v Leahy Petroleum Pty Ltd (No 2) (2005) 215 ALR 281 at [9] and [11]. 

23                        Apart from the important deterrent effect, the independent public interest in there being a public record of contraventions and penalties supports the granting of leave to proceed against a company in liquidation.  The written submissions in support of the application for leave assert that “the desirability of making declarations may, itself, be sufficient to justify the grant of such leave”.  The applicant also argued that declarations “are an appropriate vehicle to record the Court’s and the community’s disapproval of the contravening conduct”; they “serve to vindicate the regulator’s claim that the respondents contravened the relevant legislation”; and they “may inform the public of the dangers arising from a respondent’s contravening conduct”.  

24                        I accept all these factors as indicating that leave should be granted in the present circumstances.  Section 471B contemplates that the court may impose terms upon the grant of leave under the section.  The applicant’s notice of motion envisages a condition that the applicant must not take any step to enforce any order for payment of money against the first respondent “whether by way of penalty, costs or otherwise, without the further leave of the Court”.  There is precedent for such a condition; see Commonwealth v Davis Samuel Pty Ltd (No 5) [2008] ACTSC 124 and Australian Competition and Consumer Commission v Link Solutions Pty Ltd [2008] FCA 1790.  In my view it is appropriate here.  I will therefore grant leave subject to the condition as formulated by the applicant.  

PNP’S BUSINESS ACTIVITIES

25                        PNP was incorporated on 18 January 2000.  The second respondent, Mr Kim was the sole shareholder, the sole director and the secretary of PNP.  On 20 May 2008 the Supreme Court of NSW ordered the winding up of the company and appointed Mr Murray Roderick Godfrey, of RMG Partners Chartered Accountants, as the official liquidator.  The deregistration of the company has been deferred pending the conclusion of this proceeding.

26                        PNP was engaged in the business of selling health food products, therapeutic products and other goods to customers in Australia.  It conducted its business from premises in Pyrmont in Sydney.  More than 95% of its sales were to Korean visitors to Australia.  In order to increase its sales PNP entered into contracts with travel agents whereby the agents would bring the tourists to PNP’s premises to purchase its products.  PNP had arrangements with about 15 agents who brought, on average, 1,600 to 2,000 tourists to its premises every month.  Many of the tourists made large purchases and the average amount spent by each tourist was between $400 and $500.  PNP’s gross monthly sales were in the order of $700,000-$800,000.  In November 2004 they peaked at $1.8 million.  The company’s annual turnover was approximately $14 million.  The agents received commissions on all sales.  In total, commissions to agents represented up to 70% of the company’s turnover.

27                        During 2007 the business declined and PNP lost many of its travel agents to competitors.  The number of tourists visiting PNP’s premises dropped to less than 1,000 per month.  Mr Kim decided that despite the company still returning a small profit, the business was no longer viable.

Manufacture and sale of OsteoMax-7

28                        OsteoMax-7 was a herbal product sold by PNP for use in humans.  The statement of agreed facts includes the following in relation to OsteoMax-7:

At all times between 31 May 2006 and 13 December 2006, the packaging for OsteoMax-7 included, inter alia, the following claim:

OsteoMax-7 helps to reduce pain and may improve joint mobility for osteoarthritis.

…

OsteoMax-7 had not, at any time, been the subject of an application (whether by PNP or any other person) for inclusion on the [Register].  Furthermore … OsteoMax-7 … was not at any time:

·      included on the [Register] as either a listed good or a registered good;

·      an exempt good (as defined in s 3 of the Act);

·      an exempt good under s 18A of the Act;

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

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

Notwithstanding the matters described in the preceding paragraph, at all times between 31 May 2006 and 13 December 2006 the packaging for OsteoMax-7 included the text ‘Aust L 122296’.

29                        The significance of ‘Aust L 122296’ appearing on the packaging for OsteoMax 7 is that it represents that the product is listed on the Register, which was not the case.  In fact Aust L 122296 was the listing number for a product known as “Four in One Joint” manufactured by GMP Pharmaceuticals Pty Ltd (GMP) and sponsored by an associated company, Health Sharing Group Pty Ltd.  The tablets sold as OsteoMax-7 were the same as those sold under the name, Four in One Joint.  The only difference was that for OsteoMax-7, GMP packaged the tablets in blister trays. 

30                        The blister trays supplied by GMP were boxed and presented by PNP under the name, OsteoMax-7.  The packaging, which was designed by the second respondent, included the claims that the product helped relieve pain and improved joint mobility as well as the listing number, Aust L 122296.  The packaging was printed in Korea by arrangements with the second respondent’s brother.  The blister trays delivered to PNP by GMP were boxed by PNP’s staff.

31                        Between 31 May and 13 December 2006, PNP purchased approximately 42,978 blister trays of OsteoMax-7 from GMP.  All except 360 blister trays were sold by PNP from its premises in Pyrmont in the period between 31 May and 13 December 2006. 

Manufacture and sale of Plamax

32                        Plamax was a herbal product sold by PNP for use in humans.  It was manufactured using sheep placenta.  The statement of agreed facts includes the following in relation to Plamax:

At all times between 31 May 2006 and 4 January 2007, the packaging for Plamax included, inter alia, the following claims:

Helps to maintain hormone balance, reduce a melanin pigment, increase stamina and ensure a healthy future.

Supplementary product for Good Health and Longer Liv[ing] (sic).  Sheep placenta is a rich source of nutrients and bioactive ingredients.  Prime Nature Prize sheep placenta is manufactured in compliance with the strictest standards and procedures using only the best young sheep placenta.

…

Plamax had not, at any time, been the subject of an application (whether by PNP or any other person) for inclusion on the [Register].  Furthermore … Plamax … was not at any time:

·      included on the [Register] as either a listed good or a registered good;

·      an exempt good (as defined in s 3 of the Act);

·      an exempt good under s 18A of the Act;

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

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

33                        Plamax was also produced by GMP.  In the period between 31 May 2006 and 4 January 2007 PNP purchased approximately 10,820 bottles of Plamax from GMP for packaging and supply by PNP.  On 13 December 2006, TGA investigators  executed a search warrant at PNP’s premises.  In the course of their search the investigators located approximately 50 bottles of Plamax.  Despite this search PNP continued to supply Plamax and the last batch from GMP was delivered on 4 January 2007.  Allowing for the 50 bottles seized by the TGA investigators during their search on 13 December 2006, and the final batch delivered on 4 January 2007, the statement of agreed facts concludes that PNP sold approximately 8,774 bottles of Plamax to its customers in the period under consideration.

34                        The statement of agreed facts records an incident that occurred on 1 December 2006 when a senior investigator with the Therapeutic Goods Administration attended PNP’s premises to investigate suspected breaches of the TGA.  The statement says:

Mr Wise spoke with Mr Yu [the general manager of PNP] about whether Plamax was included on the [Register].  Mr Yu handed to Mr Wise a document … which, on its face, appeared to be a certificate of medicine listing issued by the [TG Administration] in relation to Plamax.

The [Register] Listing Number which appeared on the document (Aust L 95448) was in fact related to a different product sponsored by PNP, namely Propolis capsules.  The … Certificate of Medicine Listing for Propolis was identical in every respect to the purported Plamax certificate, save for the different Listing Names.

The Propolis certificate was confirmed by the [TG Administration] to be genuine.

35                        Both certificates referred to in the statement above were tendered by the applicant.  It was submitted that a comparison of the two documents reveals that the purported Plamax certificate had been fabricated by changing the Propolis certificate or a copy of it.  This submission is contained in the statement of agreed facts signed on behalf of all parties.  The respondents have not opposed the submission.  In the circumstances the conclusion drawn appears reasonable and I accept the submission.   The inference must be that the falsification was the responsibility of the respondents. 

CONTRAVENTIONS OF THE TGA

Supply of unlisted goods contrary to s 19D(1)(a)(iv)

36                        The submissions in the statement of agreed facts (see [6] above) state that both OsteoMax-7 and Plamax were represented to be “for use in, or in connection with, (i) preventing, curing or alleviating a disease, ailment, defect or injury in persons and/or (ii) influencing, inhibiting or modifying a physiological process in persons”.  Given the above evidence I accept that submission and accordingly find that both products were therapeutic goods within the meaning of the definition in s 3 of the TGA.

37                        As the facts set out at [28] and [32] above show, none of the exceptions to s 19D(1) (iii) and (iv) set out in s 19D(1)(b) applies to OsteoMax-7 or Plamax.   It was therefore necessary for these products to be listed on the Register and their supply and manufacture in the absence of listing were contraventions of the TGA.  It is an agreed fact that they were no listed on the Register.

38                        The definition of “medicine” in s 3 applies to both OsteoMax-7 and Plamax which are therefore ‘medicines’ for the purposes of the Act.  Consequently both products must be certified as required by s 26A(2); see [13] above.  The falsification of the certificate of medicine listing involved a representation that Plamax was listed on the Register when it was not so registered.  Similarly, the inclusion of the text ‘Aust L 122296’ on the packaging of OsteoMax-7 falsely represented that the product was listed on the Register.

Manufacture and supply of counterfeit goods contrary to s 42EA

39                        The inclusion of the text ‘Aust L 122296’ on the packaging of OsteoMax-7 was also a false representation as to the identity of the goods and therefore the goods are counterfeit goods within the meaning of s 42E(2)(a).  Pursuant to s 42EA of the TGA it is an offence to manufacture or supply counterfeit therapeutic goods in Australia.   Civil penalties are proscribed for such an offence. 

40                        Section 3 of the TGA contains a definition of ‘manufacture’.  Relevantly, it includes engaging in “any part of the process of producing the goods or of bringing the goods to their final state, including engaging in the processing, assembling, packaging, labelling … or releasing for supply of the goods”.  The activities in which PNP engaged in packaging the OsteoMax-7 blister trays delivered by GMP fall within that definition. 

41                        The sales of Osteo-Max-7 referred to at [31] above support the conclusion that the counterfeit product was supplied contrary to s 42EA.  The evidence also shows that, within the meaning of the TGA, OsteoMax-7 was also manufactured in Australia contrary to s 42EA.

Offences under s 21B(3)(a) and s 54AC of the TGA

42                        The inclusion of the text ‘Aust L 122296’ on the packaging of OsteoMax-7 falsely represented that the product was listed on the Register when, in fact, it was not so registered.  This is an offence under s 21B(3)(a) of the TGA.  Similarly the representation that Plamax was listed on the Register (see [35] above) is also an offence under s 21B(3)(a).  These offences attract pecuniary penalties for both corporations and individuals.

43                        The falsification of the certificate in relation to Plamax is also an offence under s 54AC of the TGA.  Section 54AC provides:

A person contravenes this section if:

(a)       the person damages, destroys, alters, conceals or falsifies a document; and

(b)       the document is created, retained or issued for the purposes of this Act, or for purposes that include the purposes of this Act; and

(c)       the damage, destruction, alteration, concealment or falsification is likely to interfere with the proper administration of this Act or the regulations.

44                        In my view, the falsification of a document so that it represents that a product is listed on the Register when this is not so, is self-evidently likely to interfere with the proper administration of this Act or the regulations.  Accordingly, I find that there has been a contravention of s 54AC.

THE SECOND RESPONDENT’S ROLE IN PNP’S BUSINESS

45                        It is clear from the statement of agreed facts and from the admissions made in his defence filed on 1 December 2009, that Mr Kim’s role in PNP’s business was detailed and intimate.  He was responsible for all its business activities and directed all of its employees and contractors.  He had daily discussions with PNP’s general manager, was responsible for deciding which goods to order and in what quantities.  He negotiated the contracts with the travel agents.  In particular, he directed the purchase, packing, marketing and sales of the two therapeutic goods, OsteoMax-7 and Plamax, which were the products in respect of which the contraventions of the TGA occurred.  Mr Kim estimates that OsteoMax-7 and Plamax respectively accounted for approximately 15% and 35% of the company’s gross monthly sales. 

46                        Mr Kim also directed the contractors who prepared the packaging for OsteoMax-7 and Plamax.  These products were manufactured by GMP Pharmceuticals Pty Ltd (GMP).  PNP’s supplies of OsteoMax-7 and Plamax were purchased through an intermediary company, Lissi Trading Pty Ltd, which was created by Mr Kim for the purpose of splitting the revenue generated by PNP’s business activities.  Mr Kim’s wife, Ms Meong Ok Kim, was the sole director of Lissi however the evidence was that all Lissi’s activities were controlled exclusively by Mr Kim and were undertaken as agent for PNP.

The second respondent’s knowledge of listing requirements

47                        At all relevant times Mr Kim knew that the TGA required therapeutic goods to be listed on the Register and that it was unlawful to manufacture or supply therapeutic goods which were not registered.  In fact, Mr Kim’s familiarity with the registration requirements of the TGA is clear not only from his agreement to the statement of agreed facts that he had such knowledge, but also from the agreed fact that, in the period between April 2001 and September 2004, he had sponsored 7 products for listing on the Register.  In particular, PNP had sponsored a listed product called OsteoMax, which was listed on 30 September 2004.   The listing was cancelled by PNP on 3 April 2006 because sales had decreased as a result of some negative media publicity in Korea.

48                        By letter dated 10 May 2006, the Therapeutic Goods Administration (TG Administration) wrote to Mr Kim, in his capacity as director of PNP, advising as follows:

Under Section 20(1) of the Therapeutic Goods Act 1989, it is an offence for a person who is a sponsor of therapeutic goods, including therapeutic devices, to intentionally import, export, manufacture or supply the goods in Australia for use in humans unless those goods are listed or registered in the [Register] or are exempt goods or a subject of an approval under Section (19) or (19A) of the Act.

The letter gave further advice as to the penalties applicable to individuals and to corporations in respect of each offence.  It required Mr Kim “to cease supply immediately of this product and any other unregistered or unlisted product, which is not exempted from this requirement”.  On 26 May 2006, Ms Joanne Lee, a manager with PNP, replied in accordance with Mr Kim’s instructions. 

49                        Paragraph 47 of the statement of agreed facts contains the following admission:

47.       At all times between 31 May 2006 and 13 December 2006 Mr Kim:

47.1      assisted in, authorised and directed the supply of OsteoMax-7 by PNP; and

47.2      knew that its packaging included the text ‘Aust L 122296’, notwithstanding that OsteoMax-7 was not included on the [Register].

The statement also contains a similar admission in relation to Mr Kim’s role in the supply of Plamax at all times in the period from 31 May 2006 to 4 January 2007.

50                        I am satisfied that Mr Kim’s involvement at every stage of PNP’s contravening conduct is such that the contraventions alleged by the applicant are substantiated.  He has aided and abetted PNP’s contraventions of the TGA and has thus contravened s 42YC of the TGA.

RELIEF

51                        On the basis of the statement of agreed facts and other documentary evidence and the admissions made by the respondents I have found that both respondents have contravened provisions of the TGA.  The applicant seeks relief by way of declarations, pecuniary penalties and forfeiture.  I shall address, in turn, each form of relief sought in relation to each respondent.

Declarations

52                        The applicant seeks detailed declarations in respect of each contravention by each respondent.  The court has a broad discretionary power to make declarations under s 21 of the Federal Court of Australia Act 1976 (Cth) however declaratory relief is not given at large.  In Minister for the Environment, Heritage and the Arts v PGP Developments Pty Limited [2010] FCA 58 I considered whether declarations should be made where, as here, the findings of fact depend largely on a statement of agreed facts and concessions made by the respondent(s).  I do not propose to repeat what I said in that case.  It is sufficient to note that I relied on the force given by s 191 of the Evidence Act 1995 to statements of agreed facts that conform to the requirements of s 191(3)(a).  For the reasons given in PGP Developments I remain of the opinion that declarations may be made in the circumstances that pertained in that case and, if otherwise appropriate, in the present proceeding.

53                        Earlier in these reasons I discussed the public interest reasons that supported the grant of leave under s 471B of the Corporations Act; see [22]-[23].  The reasons given there also support the making of declarations concerning the respondents’ contraventions of the TGA.  The applicant is charged with enforcing important public health and safety legislation.  Declarations may play an important part in supporting a regulatory authority in that task. 

54                        In Australian Competition and Consumer Commission v The Construction, Forestry, Mining and Energy Union [2006] FCA 1730 at [6] Nicholson J listed a number of ways in which that support might be manifested by declarations sought including the matters referred to in [23] above.  In addition his Honour referred to the deterrent effect of declarations and that they may be of assistance in clarifying the law.  Nicholson J’s list was adopted by French J in Australian Competition and Consumer Commission v Kokos International Pty Ltd (No 2) [2008] FCA 5 at [48]. 

55                        I am satisfied that the Secretary, being responsible for regulation under the TGA,  has a real interest in the declaration being granted; Australian Competition and Consumer Commission v Goldy Motors Pty Ltd [2000] FCA 1885; (2001) ATPR 41-801.   Moreover I am also satisfied that there has been a proper contradictor.  The finding that they have contravened the TGA is a serious matter for the respondents.  The fact that they have admitted the contraventions does not mean that they had no interest in opposing the allegations made by the Secretary.  Rather it connotes a realistic acceptance of the evidence against them and of the advantages of co-operating with the applicant.  In my view it is appropriate to make the declarations of contravention sought by the applicant in respect of each respondent.

Pecuniary penalties

56                        Sections 42Y(1) and (2) of the TGA provide that the Court may order a person who has contravened a civil penalty provision to pay a pecuniary penalty in an amount not exceeding the maximum penalty specified in the relevant provision.  The respondents have contravened ss 19D(1)(a)(iii), 19D(1)(a)(iv), 21B(3), 42EA and 54AC of the TGA.  Each of those provisions provides for a civil penalty of 50,000 penalty units for a corporation and 5,000 penalty units for an individual.  One civil penalty unit is $110; s 42YB TGA, s 4AA Crimes Act 1914 (Cth).  Consequently the maximum penalty prescribed for each contravention is $5,550,000 for a corporation and $550,000 for an individual.

57                        Before moving to determine the appropriate penalties to be imposed on the respondents, I should note that although the respondents have admitted the contraventions and have agreed to the facts as set out in the statement of agreed facts, no agreement has been reached in relation to penalties.  Despite this, as mentioned above, there was no appearance of the respondents at the hearing and they were aware that the hearing would go ahead without them; see [3] above.  It follows that the Court has not had the benefit of submissions from the respondents as to the appropriate level of penalties that should be imposed on them.  It may well be that, as explained below, neither respondent has any expectation of being able to pay the likely penalties.  Nevertheless, the Court has been deprived of valuable input by the respondents choosing to absent themselves from the proceeding.  The consequence is that, inevitably, the applicant’s submissions as to the appropriate level of penalty will carry more weight than would otherwise be the case.  Happily, the applicant’s submissions have been considered and thoughtful and of great assistance in determining the amount of the penalties.  The respondents have benefited by the applicant’s extremely fair approach.

The respondents’ capacity to pay penalties that may be imposed

58                        There is little likelihood of any penalty imposed on PNP being paid as the company is in liquidation and its deregistration has only been deferred to enable this proceeding to be finalised.  That is not, however, a bar to the imposition of penalties.  In Australian Competition and Consumer Commission v SIP Australia Pty Ltd [2003] FCA 336 at [59] Goldberg J considered the imposition of a company in a similar situation to PNP.  His Honour said:

The fact that SIP is in liquidation and that an order has been made for its winding up is no bar to an order being made against it for the payment of penalties. … Even though SIP is in liquidation, it is still appropriate to order that it pay penalties for its contraventions of the Act as a measure of the Court’s disapproval of the contraventions established and as a measure of the seriousness with which the Court regards those contraventions.  If the principal object of the imposition of penalties is deterrence, not only of the participants, but also others who might be influenced to contravene the Act, then it is quite appropriate to order that a company in liquidation pay pecuniary penalties for contraventions of the Act.  If general deterrence is to have any meaning, a company in liquidation which has contravened the Act must be ordered to pay an appropriate pecuniary penalty as a deterrent to others who might be tempted to engage in similar conduct.

59                        The position of the second respondent is similar in that Mr Kim has indicated, through his solicitor, that he is intending to file a debtor’s petition although, at the date of the hearing, he had not yet done so.  In my view, this circumstance is of little relevance to whether penalties should be imposed.  The reasons mirror those given above in respect of PNP’s ability to pay.

Considerations relevant to the determination of penalties

60                        Subsections 3 and 5 of s 42Y give the Court some guidance in determining the amount to be paid.  These subsections  provide as follows:

(3)     In determining the pecuniary penalty, the Court must have regard to all relevant matters, including:

(a)     the nature and extent of the contravention; and

(b)     the nature and extent of any loss or damage suffered as a result of the contravention; and

(c)     the circumstances in which the contravention took place; and

(d)     whether the person has previously been found by the Court in proceedings under this Act to have engaged in any similar conduct.

…

(5)     If conduct constitutes a contravention of 2 or more civil penalty provisions, proceedings may be instituted under this Act against a person in relation to the contravention of any one or more of those provisions. However, the person is not liable to more than one pecuniary penalty under this section in respect of the same conduct.

61                        In considering the factors in s 42Y(3) and (5) it will be useful to refer to the following tabular summary of the contraventions of the TGA by each respondent:

*the applicant does not seek a penalty in respect of the contraventions referred to in rows 2, 4, 5 and 8 for reasons given below.

Multiple contraventions

62                        The principle encapsulated in s 42Y(5) is that a person (individual or corporate) should not be penalised twice for the same conduct.  The submissions made on behalf of the applicant address this issue by recognising that in the case of each respondent the same conduct is involved in supplying counterfeit therapeutic goods (OsteoMax-7) contrary to s 42EA and in supplying unlisted therapeutic goods (OsteoMax-7) contrary to s 19D(1)(a)(iv).  Consequently the applicant seeks the imposition of a penalty for such supply only in respect of s 42EA and not in respect of s 19D(1)(a)(iv).  No penalty is sought in respect of the contraventions listed in row 2 of the table above.

63                        Similarly the same conduct is involved in manufacturing counterfeit therapeutic goods (OsteoMax-7) contrary to s 42EA and in manufacturing unlisted therapeutic goods (OsteoMax-7) contrary to s 19D(1)(a)(iii).  Consequently the applicant seeks the imposition of a penalty for the manufacturing only in respect of s 42EA and not in respect of s 19D(1)(a)(iv).  The applicant also recognises that for each respondent the conduct involved in falsely representing that OsteoMax-7 was on the Register contrary to s 21B(3)(a), was the same as that in relation to the supply and manufacture of OsteoMax-7.  Therefore the applicant does not seek any additional penalty for that contravention.  In summary, no penalty is sought in respect of the contraventions listed in rows 4 and 5 of the table above.

64                        The contravention of s 19D(1)(a)(iv) involved in supplying the unregistered good, Plamax, by each respondent is conduct independent of the supply of OsteoMax-7.  The applicant submits that a penalty in respect of this conduct should be imposed on each respondent. 

65                        Finally, PNP contravened ss 21B(3)(a) and 54AC in falsely representing that Plamax was on the Register and in creating a false certificate of medicine listing for Plamax.  It was the same conduct of PNP that was in breach of both these sections and therefore only one penalty should be imposed in respect of that conduct.  Consequently, the applicant seeks the imposition of a penalty in respect of the breach of s 54AC but not in respect of the breach of s 21B(3)(a), that is the contravention in row 8 in the table above. 

66                        I accept the applicant’s submissions in this regard.  I am satisfied that the applicant’s approach is consistent with the direction in s 42Y(5) of the TGA.

Continuing course of conduct

67                        It is clear from the facts outlined above, that the supply of Plamax and the supply and manufacture of OsteoMax-7 involved multiple instances of conduct that was in contravention of the TGA.  These instances occurred over many months.  However, there is a need to ensure that the respondents are not punished twice for what is essentially the same behaviour and therefore I accept the applicant’s submission that these multiple contraventions should be viewed as a whole course of conduct. 

68                        Whether multiple instances should be seen as a single course of conduct is a matter for the discretion of the sentencing judge.  In Construction, Forestry, Mining and Energy Union v Cahill [2010] FCAFC 39, Middleton and Gordon JJ said at [39]:

The principle recognises that where there is an interrelationship between the legal and factual elements of two or more offences for which an offender has been charged, care must be taken to ensure that the offender is not punished twice for what is essentially the same criminality. That requires careful identification of what is “the same criminality” and that is necessarily a factually specific enquiry.  Bare identity of motive for commission of separate offences will seldom suffice to establish the same criminality in separate and distinct offending acts or omissions.

69                        Despite their Honours’ clear exposition, the application of the principle can be difficult.  For instance, it may be that the same or similar conduct, such as duress or bullying, through repetition becomes progressively more intimidating; see Mornington Inn Pty Ltd v Jordan (2008) 168 FCR 383 at [58] where Stone and Buchanan JJ said of such conduct:

The fact that Mr Barry persisted, in circumstances where Ms Thompson was obviously distressed gives support to the idea that the repeat contraventions could be regarded progressively more seriously rather than less seriously.

70                        In Cahill at [42] Middleton and Gordon JJ emphasised that a court is not compelled to utilise the principle and, moreover, even if the principle is applied, it does not follow that this in some way restricts the Court’s discretion as to the amount of penalty to be imposed for that course of conduct.  In this case I am satisfied that the multiple contraventions referred to in rows 1, 3, 6 and 7 of the table in [61] should be treated as each comprising a single course of conduct.   This leads me to a consideration of the each respondent’s individual position. 

The second respondent

71                        The first thing that may be said about Mr Kim is that there is no evidence that he has ever been involved in contraventions of the TGA other than those the subject of this proceeding.  An important element to be taken into account in determining the applicable penalties for both respondents is the degree to which they have cooperated with the applicant in the investigation of the contraventions of the TGA.  In relation to the second respondent the written submissions of the applicant state:

Mr Kim has provided cooperation at all stages in the investigation of the contravention, including through providing documents, participating in interviews, and making full admissions to the contravening conduct.

Furthermore, Mr Kim indicated a willingness to co-operate in the present proceedings at the earliest opportunity and the proceedings have been commenced and progressed on a fully agreed basis, save as to the submissions on penalty.  To this end Mr Kim has filed an Amended Defence admitting the contravention in full and joined with the Secretary in filing an Agreed Statement of Facts describing the facts relevant to its contravention.

Additionally, it should be noted that Mr Kim has made significant admissions that, were the matter to have proceeded to a contested hearing, [it] would have required the calling of considerable evidence.  Further, in relation to some admissions it is also likely that the Secretary would simply not have been able to obtain evidence of those matters by other means.  For example, Mr Kim made admissions relating to his personal involvement in the contraventions by PNP, his knowledge of PNP’s contravening conduct and the significant amount of money made through sales of the two products.

These admissions have assisted significantly in enabling the contraventions proved (by reason of the Statement of Agreed Facts) and also involved frank acceptance of matters which had an aggravating effect on the penalty to be imposed.  Accordingly, Mr Kim is to be given full credit for those admissions.

These matters reflect an acceptance of responsibility, a willingness to facilitate the course of justice and contrition on the part of Mr Kim.

In the circumstances, the Secretary submits that Mr Kim should be entitled to a significant discount for co-operation in the order of 25%.  .

72                        The factors that have an aggravating effect on the penalty to be imposed include Mr Kim’s contravention of the TGA which occurred despite him having full knowledge of the relevant requirements.  Moreover Mr Kim was warned in the TG Administration’s letter of 10 May 2006 that the respondents’ behaviour contravened the TGA, and despite this the behaviour persisted.  Taking those factors into consideration the applicant has submitted that the penalties imposed on Mr Kim should be determined in the following ranges:

73                        Taking into account the factors in s 42Y and those discussed above, I have determined that in respect of the contraventions, (a), (b) and (c) in the table above, Mr Kim should be ordered to pay penalties in the respective amounts of $220,250, $175,000 and $180,000 being a total of $575,250. 

The first respondent

74                        As with Mr Kim, there is no evidence that the first respondent has ever been found by the Court to have engaged in conduct contravening the TGA.  That, however, appears to be the extent of any exculpatory factor in relation to the first respondent. 

75                        The applicant submits that as the first respondent was placed in liquidation well before the present proceedings were commenced, “the question of its co-operation or contrition does not arise”.  In its written submissions the applicant adds:

The fact of its liquidator having signed a Statement of Agreed Facts is not, in this context, properly to be understood as a relevant instance of co-operation or contrition by the company itself – it is rather a reflection of its present circumstances.

76                        In support of this submission the applicant referred to the decision in Australian Competition and Consumer Commission v Fila Sport Oceania Pty Ltd (admins appointed) [2004] FCA 376.  The company had defended proceeding brought against it until shortly after it was placed in administration when it withdrew its defence.  Heerey J declined to view the withdrawal of the defence as a mitigating factor. His Honour observed at [38]:

… FILA defended this proceeding for almost eighteen months, thereby putting the ACCC to substantial expense, including a complex seventy paragraph statement of claim and twenty two affidavits.  It seems likely that FILA’s withdrawal of its defence in November last year was due to its impending financial demise rather than any late onset of remorse.  While a party is not to be penalised for defending itself (other than by an award of costs), the present case is not one for allowing any discount for co-operation

77                        In my view the position of the first respondent is quite different from that of the company in Fila Sport.   Here there is no question of the applicant being put to considerable expense to rebut a defence.  Moreover, it is equally true of the first respondent as of Mr Kim, that if PNP, albeit by its liquidator, had not consented to join the statement of agreed facts then were the matter to have proceeded to a contested hearing, it would have required the calling of considerable evidence.  While I accept that it is not appropriate to read contrition into the situation, I am of the opinion that some discount should be allowed to the first respondent for co-operating in relation to the statement of agreed facts.  In this regard I would allow a discount of 15%.  Application of that discount to the ranges suggested by the applicant would yield the following:

78                        Taking into account the factors in s 42Y and those discussed above I have determined that in respect of the contraventions, (a), (b), (c) and (d) in the table above, PNP should be ordered to pay penalties in the respective amounts of $2,900,000, $1,800,000, $2,125,500, $425,000 being a total of $7,250,500.

Forfeiture

79                        The applicant has also sought an order that the therapeutic goods Plamax and OsteoMax-7 be forfeited to the Commonwealth under s 54 of the TGA.  Section 54 of the TGA provides:

Offences and forfeiture

(3)     If a court:

(a)     convicts a person of an offence against this Act; or

(b)     orders a person to pay a pecuniary penalty for the contravention of a civil penalty provision;

in relation to any therapeutic goods, the court may order that the goods be forfeited to the Commonwealth and, if an order is made, the goods become the property of the Commonwealth.

(4)     Where goods are so forfeited, the Secretary may cause notice of the forfeiture to be published in the Gazette.

(5)     Goods forfeited under an order referred to in subsection (3) are to be disposed of in such manner as the Secretary directs.

80                        The precondition for the exercise of the power to order forfeiture has been met by the imposition on both respondents of pecuniary penalties.  In Secretary, Department of Health and Ageing v Pagasa Australia Pty Ltd [2008] FCA 1545 at [60]- [72] Flick J considered the factors relevant to the exercise of the Court’s discretion to order forfeiture in considerable detail.  His Honour accepted however, at [72], that the factors to be taken into account will vary according to the circumstances and added:

In the present proceeding there were no detailed submissions as to the manner in which s 54(3) was to be construed or applied.  It is thus prudent to express no more than tentative views as to the ambit of the discretion there conferred. It is unnecessary to go beyond reaching a state of satisfaction in the present proceeding that the occasion for the exercise of the discretion has arisen and that it would be a judicial exercise of that discretion to order forfeiture.

81                        In this proceeding also there were no detailed submissions in relation to s 54(3).  In the circumstances, I respectfully agree with his Honour that prudence dictates reticence.  However, in this case, it seems to me that the issues in regard to forfeiture are comparatively simple.  I have found that the supply of Plamax and the OsteoMax-7 was contrary to the TGA.  It follows that these products cannot be supplied in the future without further contravention of the TGA.  Forfeiture of those products that have not been supplied is the most effective means of ensuring that they do not find their way into the supply chain.  In my view, it is appropriate to order their forfeiture.

82                        I shall make orders and declarations in accordance with the above reasons.

Associate:

Dated:         15 June 2010