Federal Court of Australia

Secretary, Department of Health v Evolution Supplements Australia Pty Ltd [2021] FCA 74

ORDERS

PENAL NOTICE

TO: EVOLUTION SUPPLEMENTS AUSTRALIA PTY LTD ACN 620 247 878 AND CUMHUR KESKIN

IF YOU (BEING THE PERSONS BOUND BY THIS ORDER):

(A) REFUSE OR NEGLECT TO DO ANY ACT WITHIN THE TIME SPECIFIED IN THIS ORDER FOR THE DOING OF THE ACT; OR

(B) DISOBEY THE ORDER BY DOING AN ACT WHICH THE ORDER REQUIRES YOU NOT TO DO,

YOU WILL BE LIABLE TO IMPRISONMENT, SEQUESTRATION OF PROPERTY OR OTHER PUNISHMENT.

ANY OTHER PERSON WHO KNOWS OF THIS ORDER AND DOES ANYTHING WHICH HELPS OR PERMITS YOU TO BREACH THE TERMS OF THIS ORDER MAY BE SIMILARLY PUNISHED.

UPON THE ADMISSIONS WHICH THE FIRST AND SECOND RESPONDENTS ARE TAKEN TO HAVE MADE, CONSEQUENT UPON THEIR NON-COMPLIANCE WITH ORDERS OF THE COURT, THE COURT DECLARES THAT:

1.    From 6 March 2019 to 2 March 2020 inclusive, the First Respondent contravened s 42DLB(1) of the Therapeutic Goods Act 1989 (Cth) (TG Act) by advertising therapeutic goods on its website located at Uniform Resource Locator (URL) www.evolutionspplements.com.au (Website) in circumstances where s 42DLB(9) of the TG Act applied to the advertisements, on the basis that the therapeutic goods referred to by the advertisements:

(a)    are not, and were not during the period the subject of this declaration, entered in the Australian Register of Therapeutic Goods (Register); and

(b)    are, and were during the period the subject of this declaration, prescribed by s 7(i) of the Therapeutic Goods Regulations 1990 (Cth) (TG Regulations).

2.    From 6 March 2019 to 2 March 2020 inclusive, the First Respondent contravened s 42DLB(1) of the TG Act by advertising therapeutic goods on the Website, such advertisements containing references to substances, or goods containing substances, which are and were, during the period the subject of this declaration, included in Schedule 4 to the current Poisons Standard with the result that s 42DLB(7) of the TG Act applied.

3.    From 6 March 2019 to 2 March 2020 inclusive, the Second Respondent contravened s 54B(3) of the TG Act by failing to take all reasonable steps to prevent the First Respondent from contravening s 42DLB(1) of the TG Act in the manner described in paragraphs 1(a) and 1(b), in circumstances where the Second Respondent knew that the contraventions would occur and was in a position to influence the conduct of the First Respondent in relation to the contraventions.

4.    Between 31 January 2019 and at least 2 March 2020 inclusive, the Second Respondent contravened s 42DX of the TG Act by failing to cause the First Respondent to cease advertising all therapeutic goods not entered on the Register via the Website; and failing to cause the First Respondent to cease the advertising of, and the publication of references to, all substances entered on Schedule 4 to the Poisons Standard on the Website.

THE COURT ORDERS THAT:

Injunctions

5.    Pursuant to s 42YN(1) of the TG Act, the First Respondent be restrained, for a period of five years from the date of this order, whether by itself, its servants or agents, from advertising or causing to be advertised therapeutic goods if such advertisements refer to:

(a)    therapeutic goods which are not entered in the Register, and are prescribed by r 7(i) of the TG Regulations; or

(b)    substances, or goods containing substances, included in Schedule 4 of the current Poisons Standard as in force at the relevant time,

unless s 42AA, s 42AB or s 42AC of the TG Act applies.

6.    Pursuant to s 42YN(1) of the TG Act, the Second Respondent be restrained, for a period of five years from the date of this order, whether by himself, or by his servants or agents, from advertising or causing to be advertised therapeutic goods if such advertisements refer to:

(a)    therapeutic goods which are not entered in the Register, and are prescribed by r 7(i) of the TG Regulations; or

(b)    substances, or goods containing substances, included in Schedule 4 of the current Poisons Standard as in force at the relevant time,

unless s 42AA, s 42AB or s 42AC of the TG Act applies.

Further orders

7.    The First Respondent and Second Respondent are to pay the Applicant’s costs of and incidental to the proceedings to the date of this order, including (but not limited to) the Applicant’s costs of the Interlocutory Application filed on 6 October 2020.

8.    The proceedings be listed for case management hearing at 9.30am on 10 March 2021 in respect of the quantum of the pecuniary penalties sought in prayers 4 and 5 of the Originating Application filed on 4 March 2020.

9.    The parties have liberty to approach Burley J’s Associate by email and re-list this matter on three days’ notice.

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

REASONS FOR JUDGMENT

BURLEY J:

1.    BACKGROUND

1    On 4 March 2020 the Secretary, Department of Health, commenced proceedings by way of originating application and statement of claim, seeking declarations and injunctions restraining Evolution Supplements Australia Pty Ltd and Cumhur Keskin (the respondents) from advertising or causing to be advertised certain therapeutic goods in breach of the Therapeutic Goods Act 1989 (Cth) (TG Act). The Secretary also seeks orders that Evolution and Mr Keskin pay pecuniary penalties in respect of contraventions of the TG Act and costs of these proceedings.

2    As I detail below, the respondents have elected not to participate in the hearing. They are in default of a number of orders made for the preparation of the case.

3    The Secretary moves on an interlocutory application filed on 6 October 2020 for orders that because of the respondents’ default, orders 1, 2, 3 and 6 in the originating application be made pursuant to r 5.23(2)(c) of the Federal Court Rules 2011 (Cth) (FCR).

4    FCR 5.23(2)(c) provides:

(2) If a respondent is in default, an applicant may apply to the Court for:

…

(c) if the proceeding was started by an originating application supported by a statement of claim...an order giving judgment against the respondent for the relief claimed in the statement of claim...to which the Court is satisfied that the applicant is entitled.

5    FCR 5.22 defines when a party is in default:

A party is in default if the party fails to:

(a)    do an act required to be done, or to do an act in the time required, by these Rules; or

(b)    comply with an order of the Court; or

(c)    attend a hearing in the proceeding; or

(d)    prosecute or defend the proceeding with due diligence.

6    The interlocutory application is supported by lay and expert affidavit evidence given on behalf of the Secretary. The following affidavits were read:

(a)    Michael Kenneth Sullivan is a partner at Norton Rose Fulbright, the solicitors for the applicant. He swore two affidavits, dated 8 July 2020 and 6 October 2020.

(b)    Simon Doctor is an Assistant Director in the Regulatory Education and Compliance Branch of the Therapeutic Goods Administration (TGA) within the Commonwealth Department of Health. He affirmed an affidavit dated 26 September 2019.

(c)    Adelina Tan is a Director of the Advertising Compliance and Investigations Section in the Regulatory Education and Compliance Branch of the TGA within the Department. She affirmed an affidavit dated 26 September 2019.

(d)    Peta Maree Sanderson is a Departmental Officer in the Advertising Compliance and Investigations Section of the TGA within the Department. She swore an affidavit dated 8 July 2020.

(e)    Kieren Edward Proctor was, between June 2019 and March 2020, a Departmental Officer in the Advertising Compliance and Investigations Section of the TGA within the Department. He affirmed an affidavit dated 8 July 2020.

(f)    Virginia Temple Deigan is an Assistant Director in the Advertising Compliance and Investigations Section of the TGA within the Department. She swore and affidavit dated 8 July 2020.

(g)    Dr Lance Howard Brooker is a Senior Scientist in the Australian Sports Drug Testing Laboratory at the National Measurement Institute, which is within the Australian Government Department of Industry, Science, Energy and Resources. He affirmed an affidavit dated 8 July 2020.

(h)    Professor Louise Mary Burke OAM is a dietician with a Doctorate in Sports Nutrition, a Fellow of Sports Dieticians Australia, and Accredited Practising Dietitian, and has been awarded Fellowships of the American College of Sports Medicine and Sports Medicine Australia. From 1990 to 2018 she was the Head of Department/Discipline of Sports Nutrition at the Australian Institute of Sports, and from 2018 to July 2020 she was the Chief of Nutrition Strategy. She continues to consul to the Australian Institute of Sport, and also holds a role as the academic chair in Sports Nutrition at the Australian Catholic University, a position she has held since 2014. She affirmed an affidavit dated 2 October 2020.

(i)    Dr Paul James Brent is the Director and Principal Scientific Consultant of Global Food and Chemical Risk Assessment and Risk Management solutions. He has held that position since 2014, and was previously the Chief Scientist at Food Standards Australia New Zealand. He also held other roles in that organisation, as well as within the Department of Human Services and Health. He affirmed an affidavit dated 2 October 2020.

(j)    Talysha Sabatino is a process server. She swore several affidavits of service, dated 16 August 2020, 13 September 2020, 29 October 2020, and two dated 15 March 2020.

7    The history of the proceedings may be briefly summarised. They were listed for first case management hearing on 3 April 2020 and the respondents were represented by counsel and solicitors. On that date the respondents consented to the making of interim injunctions, the terms of which I address further below. In addition, timetabling orders were made by consent, requiring the respondents to respond to a proposed statement of agreed facts by 8 May 2020, and serve any defences and affidavit evidence in answer by 3 July 2020. An order was made pursuant to FCR 30.01(1) that questions of liability were to be heard separately and before questions of penalty. Various adjustments to the timetable were ordered by consent on 2 June 2020.

8    Since then, the respondents have effectively not participated in the proceedings. On 8 July 2020 the Secretary filed lay evidence, and by 22 July 2020 expert evidence, in support. On 15 July 2020 the solicitors representing the respondents filed a Notice of Intention to Cease to Act and on 6 August 2020 they informed the Secretary’s solicitors that they were no longer acting, but would forward correspondence to Mr Keskin. On 11 August 2020 a case management hearing was conducted, but the respondents did not appear, and it was adjourned for a week. On the same day, their former solicitors filed a Notice of Ceasing to Act. The respondents did not appear at the case management hearing held on 19 August 2020, despite being personally served with the orders of 11 August 2020. Nor did they comply with an order that they supply an address for service. I ordered that the proceedings be adjourned until 22 September 2020, and noted in the orders that prior to that date the Secretary would propose to the respondents a timetable for the preparation of a hearing for an application for default judgment. Those orders were served on the respondents.

9    On 18 September 2020 Mr Keskin sent an email to the Secretary’s solicitor, advising him that he would represent himself in the proceedings. He was subsequently provided with a proposed timetable for the preparation of the default judgment proceedings, but declined to engage with them. Instead, on 21 September 2020 he sent an email to my chambers stating that he was in no state of mind to pursue the case due to “health, legal representation and financials”. On 22 September 2020 I made directions for the preparation of the default judgment application for hearing, which was conducted on 9 December 2020. The respondents did not participate.

10    In Speedo Holdings B.V. v Evans (No 2) [2011] FCA 1227, Flick J reviewed the state of the authorities relevant to FCR 5.23 and conveniently summarised them. I extract the propositions below, without repeating his Honour’s detailed and learned recitation of authority.

11    First, the power invoked by the Applicants is discretionary. So much necessarily follows from the discretion conferred by FCR 1.32. It should be exercised cautiously (Speedo at [20]).

12    Secondly, the rule must be administered sensibly and with an appreciation both of the fact that some delays are unavoidable, and unpredictable, by even the most conscientious parties and their lawyers, and of the likely serious consequences to an applicant of staying or dismissing a claim (Speedo at [21]).

13    Cases in which the history of non-compliance by an applicant is such as to indicate an inability or unwillingness to cooperate with the Court and the other party or parties in having the matter ready for trial within an acceptable period provide an example where the exercise of the discretion may be appropriate (Speedo at [21]).

14    Thirdly, the requirement imposed by FCR 5.23 is not that an applicant prove by way of evidence the claim sought to be advanced; the requirement is that the Court needs to be “satisfied” on the face of the statement of claim that the applicant is entitled to the “relief” claimed (Speedo at [23]). In this regard, the authorities indicate that FCR 5.23 will be met upon the Court being satisfied that relief could be granted on the face of the pleading, although in addition to the facts alleged in a statement of claim, the Court may have recourse to limited further evidence, but not if that evidence would alter the case as pleaded (Speedo at [25]).

15    Fourthly, to be satisfied that an applicant “is entitled” to the relief claimed in the statement of claim, the Court needs to be satisfied that “each element of the relevant civil wrong involved is properly and discretely pleaded in the statement of claim” (Speedo at [24]).

2.    CONSIDERATION

2.1    Are the respondents in default?

16    The evidence demonstrates that there has been default within FCR 5.22. In this respect it is apparent from the background of events that I have recited above that the respondents have failed to:

(a)    serve any defences or evidence in accordance with the Court’s orders;

(b)    notify the applicant of their agreement or disagreement with the proposed statement of agreed facts;

(c)    file any notice of address for service; and

(d)    appear at several case management hearings.

These matters are all supported by the affidavit evidence filed by the Secretary, which include affidavits of personal service of documents upon Mr Keskin.

17    I accept that the respondents initially participated in the proceedings, including by agreeing to submit to an interim injunction that was made on 3 April 2020 in the following form:

1. By consent, until further order of the Court, the First Respondent be restrained, pursuant to s 42YO(1) of the Therapeutic Goods Act 1989 (Cth) (TG Act), whether by itself, or by its servants or agents, from advertising or causing to be advertised therapeutic goods if such advertisements refer to:

a. therapeutic goods which are not entered in the Australian Register of Therapeutic Goods (Register), and are prescribed by r 7(i) of the Therapeutic Goods Regulations 1990 (Cth) (TG Regulations); or

b. substances, or goods containing substances, included in Schedule 4 of the current Poisons Standard as in force at the relevant time,

unless s 42AA, s 42AB or s 42AC of the TG Act applies.

2. By consent, until further order of the Court, the Second Respondent be restrained, pursuant to s 42YO(1) of the TG Act, whether by himself, or by his servants or agents from advertising or causing to be advertised therapeutic goods if such advertisements refer to:

a. therapeutic goods which are not entered in the Register, and are prescribed by r 7(i) of the TG Regulations; or

b. substances, or goods containing substances, included in Schedule 4 of the current Poisons Standard as in force at the relevant time,

unless s 42AA, s 42AB or s 42AC of the TG Act applies.

18    That consent was given at a time when the respondents had legal representation and they were participating in the proceedings before the Court. However, the events since that date demonstrate that the respondents have consistently failed to comply with orders of the Court, failed to attend hearings in the proceedings and failed to defend the proceedings with due diligence within FCR 5.22. I have no confidence that the respondents have any intention at all to participate in the proceedings. The communication received from Mr Keskin on 21 September 2020 indicates that he has no intention of doing so. Furthermore, the proceedings concern allegations that goods have been advertised in contravention of the TG Act. Public interest and safety considerations warrant the expeditious consideration of such claims.

2.2    Exercise of discretion under FCR 5.23

19    The question then arises as to whether I am satisfied that each element of the relevant civil wrong involved has been properly and discreetly pleaded. In this regard I have considered the statement of claim, the allegations in which I consider for present purposes to have been admitted. Ms Davidson, who appeared for the Secretary, by her written and oral submissions helpfully explained the allegations pleaded by reference to the terms of the TG Act and Therapeutic Goods Regulations 1990 (Cth), and by reference to the evidence read on the default judgment application which provides support for the principal allegations set out in the statement of claim.

20    I first consider the allegations against Evolution.

21    The statement of claim pleads that between January 2019 and 2 March 2020, Evolution maintained a website located at URL www.evolutionsupplements.com.au (Website) which displayed advertisements in relation to numerous different goods, which are listed in schedule 2 to the statement of claim. The statement of claim also pleads that between 28 October 2019 and 9 January 2020, Evolution maintained a version of the website, located at the same URL, after hours, being between 8pm and 4am on weekdays and all day on Saturdays and Sundays (After Hours Website) on which it displayed advertisements in relation to goods which are listed in schedule 4 of the statement of claim.

22    All of the goods in schedule 2 and schedule 4 are pleaded to be “therapeutic goods” within the meaning of s 3(1) of the TG Act. There is some complexity about that definition, but for present purposes it is sufficient to note that the definition will be met if goods are represented in any way to be, or that are, whether because of the way in which the goods are presented or for any other reason, likely to be “for therapeutic use”: s 3(1), definition of “therapeutic goods” para (a). A good is defined to be for “therapeutic use” if it is used “in or in connection with” amongst other things, “influencing, inhibiting or modifying a physiological process in persons”: s 3(1), definition of “therapeutic use” para (b).

23    I am satisfied that on the face of the statement of claim the representations made on the Website and After Hours Website, and which are set out in schedules 3 and 5 to the statement of claim, are statements that represent the product identified as capable of influencing, inhibiting or modifying a physiological process in persons, thereby satisfying the definition of “therapeutic use”. Schedule 3 quotes the salient parts of the numerous advertisements which appear to meet that requirement.

24    The definition of “therapeutic goods” also includes “biologicals, medical devices and goods declared to be therapeutic goods under an order in force under section 7” (not presently relevant) but does not include the following six categories of goods:

therapeutic goods means goods:

…

(c)  goods declared not to be therapeutic goods under an order in force under section 7; or

(d)  goods in respect of which such an order is in force, being an order that declares the goods not to be therapeutic goods when used, advertised, or presented for supply in the way specified in the order where the goods are used, advertised, or presented for supply in that way; or

(e)  goods (other than goods declared to be therapeutic goods under an order in force under section 7) for which there is a standard (within the meaning of subsection 4(1) of the Food Standards Australia New Zealand Act 1991); or

(f)  goods (other than goods declared to be therapeutic goods under an order in force under section 7) which, in Australia or New Zealand, have a tradition of use as foods for humans in the form in which they are presented; or

(g)  goods covered by a determination under subsection 7AA(1) (excluded goods); or

(h)  goods covered by a determination under subsection 7AA(2) (excluded goods), if the goods are used, advertised, or presented for supply in the way specified in the determination.

25    The statement of claim pleads that the schedule 2 and schedule 4 goods fall within the meaning of s 3(1) of the TG Act, and provides particulars to the effect that none of the exclusions in paras (c)-(h) of the definition of “therapeutic goods” apply. For present purposes I take the point to be admitted.

26    The statement of claim next alleges that certain of the advertisements pleaded refer to substances or goods containing substances included in schedule 4 to the then current Poisons Standard, but not in Annexure H of that standard (the Poisons Standards Goods).

27    The statement of claim then pleads that by reason of these matters, Evolution contravened s 42DLB(1) of the TG Act in causing the Website and the After Hours Website:

(a)    to display the advertisements listed in schedule 2 and schedule 4, in circumstances where s 42DLB(9) applied; and

(b)    to display the advertisements o the Poisons Standards Goods in circumstances where s 42DLB(7) applied.

28    Section 42DLB (1), (7) and (9) provide:

42DLB  Civil penalty relating to advertisements—general

(1)  A person contravenes this subsection if:

(a)  the person:

(i)  advertises, by any means, therapeutic goods; or

(ii)  causes the advertising, by any means, of therapeutic goods; and

(b)  subsection (2), (3), (4), (5), (6), (7), (8) or (9) applies to the advertisement.

Maximum civil penalty:

(a)  for an individual—5,000 penalty units; and

(b)  for a body corporate—50,000 penalty units.

…

(7)  This subsection applies to the advertisement if it refers to substances, or goods containing substances, included in Schedule 3, 4 or 8 to the current Poisons Standard but not in Appendix H of the current Poisons Standard, other than a reference authorised or required by a government or government authority (not including a foreign government or foreign government authority).

(9)  This subsection applies to the advertisement if it refers to therapeutic goods that are not entered in the Register and that are prescribed by the regulations for the purposes of this subsection, other than a reference authorised or required by a government or government authority (not including a foreign government or foreign government authority).

29    Each of the elements of the contravention of s 42DLB(1) is pleaded in the statement of claim, and may be taken to be admitted. The evidence relied upon by the Secretary to which I was taken serves to confirm, and does not depart from, the pleaded case. Having regard to these matters, I am satisfied for the purposes of the present application that it is appropriate to grant relief to the Secretary in respect of the conduct of Evolution.

30    The case pleaded against Mr Keskin arises from the proposition that he may be personally liable as an executive officer of Evolution.

31    The statement of claim pleads that Mr Keskin was, during the period of the contravening advertisements (January 2019 to 2 March 2020), a person responsible for and who took part in the management of Evolution as its sole director. Furthermore, it pleads that Mr Keskin was aware of the contraventions of s 42DLB(1) were occurring or would occur. The particulars provided identify a series of warning letters and conversations between representatives of the Secretary and Mr Keskin, on behalf of Evolution, each of which is also included in evidence on the application. These include:

(1)    a letter dated 24 December 2018 requiring Mr Keskin to remove from the Website all references to products included in schedule 4 to the then current Poisons Standard and to therapeutic goods not entered in the Register of Therapeutic Goods;

(2)    a telephone conversation with Mr Doctor on 17 January 2019, during which Mr Keskin confirmed he had received the 24 December 2018 letter;

(3)    a letter dated 18 January 2019 indicating an intention on the part of the Secretary to issue Mr Keskin with a direction under s 42DV of the TG Act to cease advertising via the Website goods not entered in the Register and goods containing substances included in schedule 4 of the Poisons Standard;

(4)    a direction issued on 23 January 2019 by a delegate of the Secretary under s 42DV of the TG Act (the s 42DV direction) requiring Mr Keskin to cease advertising on the Website therapeutic goods not entered on the Register and substances entered in schedule 4 to the Poisons Standard;

(5)    a letter dated 4 October 2019 informing Mr Keskin that advertising on the Website continued to contravene the TG Act and the s 42DV direction; and

(6)    an exchange of correspondence in October 2019 between the solicitors retained on behalf of the Secretary and Mr Keskin concerning the removal from the website of contravening advertisements, including:

(a)    an email dated 9 October 2019 from Mr Keskin to the Secretary’s solicitors, in which Mr Keskin states “I am willing to comply 100% with the TGA on the products that needs to be removed can you please list me all the products that needs to be removed so I can forward your email on to our website developer” (errors in original). The sign off for the email is “Jimmy Keskin”. I infer that the email address provided is that of Mr Keskin; and

(b)    an email dated 23 October 2019 from the email address jimmy@evolutionsupplements.com.au. That email is pleaded to have been sent to Evolution’s email subscribers, stating that “SARMS [Selective Androgen Receptor Modulators] are now only available online from 8pm until 4am”. Thereafter, the After Hours Website advertisements appeared on the After Hours Website.

32    The statement of claim further pleads that Mr Keskin was in a position to influence the conduct of Evolution in relation to the contraventions of s 42DLB(1) because: (a) he is the sole director of Evolution; (b) he was the addressee for invoices from BigCommerce Pty Ltd in respect of the provision of services relating to the Website; (c) he is the contact person for requests made to BigCommerce relating to the operation of the Website; and (d) he corresponded with the Secretary’s solicitors, as detailed above.

33    The statement of claim pleads that by reason of the matters which I have summarised in [30] to [32] above, Mr Keskin failed to prevent, or to take all reasonable steps to prevent, the contraventions by Evolution of s 42DLB(1), and was in contravention of s 54B(3), which provides:

54B  Personal liability of an executive officer of a body corporate—general

…

(3)  An executive officer of a body corporate contravenes this subsection if:

(a)  the body corporate contravenes a civil penalty provision; and

(b)  the officer knew that the contravention would occur; and

(c)  the officer was in a position to influence the conduct of the body in relation to the contravention; and

(d)  the officer failed to take all reasonable steps to prevent the contravention.

34    The statement of claim further pleads that: Mr Keskin failed to comply with the s 42DV direction within 7 days of it being given because at no time prior to the commencement of these proceedings did Mr Keskin cause Evolution to cease advertising therapeutic goods via the Website; and that at least between 31 January 2019 and 2 March 2020 Mr Keskin did not cause Evolution to cease advertising of and publication of references to substances entered on schedule 4 of the Poisons Standard. Accordingly, it is pleaded that Mr Keskin contravened s 42DX of the TG Act.

35    Section 42DV provides:

42DV  Directions about advertisements or generic information

Advertisements

(1)  If, in relation to the advertising of therapeutic goods, the Secretary is satisfied that there has been a contravention of this Act or the regulations, the Secretary may, in writing, direct a person apparently responsible for advertising the therapeutic goods, or for causing the advertising of the therapeutic goods, to do one or more of the following:

(a)  cease the advertisement;

(b)  make a retraction;

(c)  make a correction;

(d)  recover any advertisement that is still in circulation;

(e)  destroy the advertisement;

(f)  cease making a particular claim or representation made by the advertisement.

Generic information

(2)  If, in relation to the dissemination of generic information about therapeutic goods to the public or a section of the public, the Secretary is satisfied that there has been a contravention of this Act or the regulations, the Secretary may, in writing, direct a person apparently responsible for the dissemination, or for causing the dissemination, to do one or more of the following:

(a)  withdraw the generic information;

(b)  make a retraction;

(c)  make a correction;

(d)  recover any generic information that is still in circulation;

(e)  destroy the generic information;

(f)  cease making a particular claim or representation made by the generic information.

Conditions

(3)  A direction under subsection (1) or (2) may be subject to conditions specified in the direction.

(4)  Without limiting subsection (3), the conditions may relate to one or more of the following:

(a)  the period for doing a thing the subject of the direction;

(b)  in relation to the making of a retraction or correction, either or both of the following:

(i)  the form and manner of the retraction or correction;

(ii)  the period for which the retraction or correction must be made publicly available;

(c)  the reporting to the Secretary of compliance with the direction.

Direction not a legislative instrument

(5)  A direction under subsection (1) or (2) is not a legislative instrument.

Publication

(6)  As soon as practicable after giving a direction under subsection (1) or (2), the Secretary must cause the direction to be published on the Department’s website.

36    Section 42DX provides:

42DX  Civil penalty for contravening direction under section 42DV

A person contravenes this section if:

(a)  the Secretary has given a direction to the person under subsection 42DV(1) or (2); and

(b)  the person does an act or omits to do an act; and

(c)  the act or omission contravenes the direction or a condition of the direction.

Maximum civil penalty:

(a)  for an individual—5,000 penalty units; and

(b)  for a body corporate—50,000 penalty units.

37    Each of the elements of s 54B(3) and s 42DX of the TG Act is pleaded and may be taken for present purposes to be admitted. Having regard to the pleading, and the correspondence to which I have referred, I am satisfied that the elements of each contravention is made out.

38    Having regard to the default by the respondents and to my view that the elements of the statement of claim satisfy each of the requirements of the contraventions alleged by the Secretary, in my view it is appropriate to grant final orders for relief. In this regard I also take into account the fact that the respondents may, if appropriate, apply or an order made under FCR 5.23 to be set aside.

2.3    The grant of relief

39    As noted above, the Secretary first seeks declaratory orders pursuant to s 21 of the Federal Court of Australia Act 1976 (Cth) (FCA Act) to the effect that each of Evolution and Mr Keskin contravened provisions of the TG Act, as well as injunctions and costs.

40    The Court has a wide discretionary power to make declarations under s 21 in cases where there is a genuine controversy that is not merely hypothetical: Australian Competition and Consumer Commission v Ford Motor Company of Australia Limited [2018] FCA 703; 360 ALR 124 (Middleton J) at [31]. That power extends to orders made pursuant to FCR 5.23, it now being established that past reticence about granting declarations in cases of default and deemed admissions was based on a practice, not a rule of law: see Australian Competition and Consumer Commission v Dataline.Net.Au Pty Ltd [2006] FCA 1427; 236 ALR 665 (Kiefel J, as her Honour then was) at [52]-[59]; Bank of Kuwait and the Middle East v Ship MV “Mawashi Al Gasseem” (No 2) [2007] FCA 815; 240 ALR 120 (Mansfield J) at [15]; Yeo v Damos Earthmoving Pty Ltd, in the matter of Beachwood Developments Pty Ltd (in liq) [2011] FCA 1129 (Gordon J) at [16]. Earlier reluctance to make declarations in such circumstances arose because it was said that said that a declaration by the Court was a judicial act, and ought not to be made on admissions of the parties (deemed or otherwise), or on consent, but only if the court was satisfied by evidence. In Dataline Kiefel J considered that the practice of not granting declarations might be seen as derived from views about litigation which pre-date more recent concerns expressed by the courts as to the costs of unnecessary litigation, the management of cases, and efficiency overall. Views expressed in older cases may not take account of the increase in the use made of declaratory orders in developing areas of law which may involve matters of public interest (at [58]). Her Honour considered that declarations are often utilised to identify for the public what conduct contributes a contravention and to make apparent that it is considered to warrant an order recognising its seriousness. Her Honour said that it is however important that there be no misunderstanding as to the basis upon which they are made. This, she considered, could be overcome in a case such as the present by a statement, preceding the declarations, that orders are made ‘upon admissions which [the respondent in question] is taken to have made, consequent upon non-compliance with orders of the Court’ (at [59]).

41    Relevant considerations for the grant of a declaration include whether it will have utility, whether the proceedings involve a matter of public interest and whether the circumstances call for the marking of the Court’s disapproval of the contravening conduct: Yeo at [17].

42    In the present case, I am satisfied that the making of declarations is warranted. The TG Act includes important provisions for the protection of public health and safety by ensuring, inter alia, that therapeutic goods are not promoted or supplied to the public without appropriate approvals in place. The contraventions established in the present application fall squarely within the remit of the TGA. The grant of declarations will have the benefit of signalling the Court’s disapproval of the misconduct of each of Evolution and Mr Keskin. The only qualification that I make is to observe that the declarations are made on the basis of deemed admissions arising from the default on the part of the respondent. That qualification was found by Kiefel J to be appropriate in Dataline at [59], and will appear in the declarations that I will make.

43    Having regard to the matters to which I have referred in section 2.2 above, I am also satisfied that the injunctions sought are appropriate and I will make orders in accordance with those sought by the Secretary.

44    The respondents also should pay the Secretary’s costs of the proceedings.

45    Finally, the proceedings should be re-listed for case management leading to a hearing of the separate question of the quantum, if any, of pecuniary penalties.

Associate:

Dated:    8 February 2021