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[2024] FCA 642
Federal Court of Australia
2024-06-20
Button J
Original judgment source is linked above.
(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.
THE COURT ORDERS THAT:
BETWEEN: AUSTRALIAN PESTICIDES AND VETERINARY MEDICINES AUTHORITY Applicant
AND: BONNIE AND I PTY LTD First Respondent
order made by: BUTTON J DATE OF ORDER: 20 JUNE 2024
THE COURT DECLARES THAT:
THE COURT ORDERS THAT: 8. Pursuant to s 145A of the AgVet Code, the First Respondent pay to the Commonwealth of Australia pecuniary penalties: (a) in the sum of $300,000 for contravention of s 78 of the AgVet Code; (b) in the sum of $250,000 for contravention of s 88 of the AgVet Code; and (c) in the sum of $300,000 for contravention of s 105 of the AgVet Code. 9. Pursuant to s 145A of the AgVet Code, the Second Respondent pay to the Commonwealth of Australia pecuniary penalties: (a) in the sum of $90,000 for contravention of s 78 of the AgVet Code; and (b) in the sum of $45,000 for contravention of s 88 of the AgVet Code. 10. The Respondents must pay the Applicant's costs of the proceeding, on a lump sum basis, in the amount of $61,233.18. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
BUTTON J: 1 The Applicant is the Australian Pesticides and Veterinary Medicines Authority (APVMA). The APVMA was continued in existence by s 6 of the Agricultural and Veterinary Chemicals (Administration) Act 1992 (Cth) (the Administration Act). The Agricultural and Veterinary Chemicals Code (the Commonwealth Code) is enacted as the Schedule to the Agricultural and Veterinary Chemicals Code Act 1994 (Cth) (the Commonwealth Act). The Commonwealth Act and the Commonwealth Code (as enacted by the Commonwealth) apply directly to certain Territories. By uniform legislation, the Commonwealth Code has been adopted by the various States of the Commonwealth. In Victoria, the Code is applied as a law of Victoria pursuant to s 5 of the Agricultural and Veterinary Chemicals (Victoria) Act 1994 (Vic) (the Victorian Act) and is to be cited as the "AgVet Code of Victoria" (s 5, Victorian Act) although I will refer to it as the Code for simplicity. The uniform legislative scheme is administered and enforced by the Applicant. 2 The Applicant has brought the present proceeding against the Respondents, alleging contraventions of provisions of the Code prohibiting the supply of unregistered chemical products and the publishing of notices offering to sell or invite the making of offers to buy unregistered chemical products, and failing to comply with a recall notice. 3 The Second Respondent (Ms Lewis) is the sole director and secretary of the First Respondent (the company). The company operated an online store selling various products, which the Applicant contends are unregistered agricultural chemical products or unregistered veterinary chemical products. The company's registered office and principal place of business is an address in Wantirna South, Victoria, which is also the address of Ms Lewis that has been registered with ASIC. It appears that the business selling these products is a small business that Ms Lewis has run from her home. 4 Although the Respondents participated in some early case management hearings and mediation, they have not filed any evidence or submissions and did not appear at trial. Accordingly, the matter proceeded to trial undefended. The only point communicated by the Respondents, which was conveyed by an email to chambers and to the Applicant from Ms Lewis on 31 May 2024 and 2 June 2024, was that "As I have stated several times, I do not produce or manufacture the products that are readily available for purchase by individuals & businesses alike therefore, whatever the nature of the APVMA's claim, it squarely rests elsewhere" (emphasis in original). However, as is set out below, the legislative regime regulates the supply of unregistered chemical products, and the publication of notices offering unregistered chemical products for sale; it is not confined to the production or manufacture of such products. 5 The Applicant relied on the following affidavits: (1) affidavit of Phillip Maxwell Maria, dated 19 September 2023; (2) affidavit of Damian Peter Mare, dated 18 September 2023; (3) affidavit of Damian Peter Mare, dated 20 February 2024; (4) affidavit of Donald Ray Sibanda, dated 19 April 2024; (5) affidavit of Hugh Roy Dearnley Dawick, dated 22 April 2024; and (6) affidavit of Michael John Palfrey, dated 10 May 2024.
THE LEGISLATIVE REGIME 6 Under the Code (s 3), the term "chemical product" is defined to mean an "agricultural chemical product or a veterinary chemical product, or both". 7 Section 4(2) of the Code defines "agricultural chemical product" as: a substance or mixture of substances that is represented, imported, manufactured, supplied or used as a means of directly or indirectly: (a) destroying, stupefying, repelling, inhibiting the feeding of, or preventing infestation by or attacks of, any pest in relation to a plant, a place or a thing; or (b) destroying a plant; or (c) modifying the physiology of a plant or pest so as to alter its natural development, productivity, quality or reproductive capacity; or (d) modifying an effect of another agricultural chemical product; or (e) attracting a pest for the purpose of destroying it. 8 Section 5(2) of the Code defines "veterinary chemical product" as: a substance or mixture of substances that is represented as being suitable for, or is manufactured, supplied or used for, administration or application to an animal by any means, or consumption by an animal, as a way of directly or indirectly: (a) preventing, diagnosing, curing or alleviating a disease or condition in the animal or an infestation of the animal by a pest; or (b) curing or alleviating an injury suffered by the animal; or (c) modifying the physiology of the animal: (i) so as to alter its natural development, productivity, quality or reproductive capacity; or (ii) so as to make it more manageable; or (d) modifying the effect of another veterinary chemical product. 9 Section 78(1) prohibits the supply of unregistered chemical products. It provides that: A person must not supply, or cause or permit to be supplied, a chemical product that is not a registered chemical product or a reserved chemical product unless: (a) the supply is authorised by a permit; or (b) the product is exempted by the APVMA from the operation of this section. 10 Section 78(1) is a civil penalty provision and contravention of it is also an offence. 11 Section 88(2) of the Code prohibits publication of notices concerning unregistered chemical products. Relevantly, it provides: A person must not publish, or cause or permit to be published, a notice that offers to sell, or invites the making of offers to buy: (a) an active constituent for a proposed or existing chemical product if the constituent is not an approved active constituent; or (b) a chemical product that is not a registered chemical product; unless: (c) an application has been made for approval of the constituent or registration of the product, as the case may be; and (d) the notice states: (i) that the constituent is not an approved active constituent or the product is not a registered chemical product, as the case may be; and (ii) that such an application has been made. 12 Section 88(2) also is a civil penalty provision and contravention of the provision is also an offence. 13 Pursuant to s 101, the Applicant can issue recall notices and specify things that the person notified is required to do such as stop supplying the product, recover stocks, or destroy unregistered products action taken. Pursuant to s 105, a person to whom a recall notice is given must not fail to comply with the notice and, unless that person has a reasonable excuse, failure to comply constitutes the commission of an offence. Section 105 is also a civil penalty provision. 14 The Code also contains provisions for the issuing of infringement notices. An infringement notice may be issued pursuant to s 145DA(1). If a person served with an infringement notice pays the amount sought within 28 days, the person's liability for the alleged contravention is discharged and civil penalty proceedings will not be brought (s 145DE). However, pursuant to s 145DD(2), an infringement notice may be withdrawn. Where an infringement notice is withdrawn, the Applicant may proceed to other enforcement action. 15 Civil penalty orders are dealt with by Div 2 of Pt 9A. Section 145A of the Code provides: (1) The APVMA may, on behalf of the Commonwealth, apply to a court of competent jurisdiction for an order that a person, who is alleged to have contravened a civil penalty provision, pay the Commonwealth a pecuniary penalty. (2) The APVMA must make the application within 6 years of the alleged contravention. (3) If the court is satisfied that the person has contravened the civil penalty provision, the court may order the person to pay to the Commonwealth such pecuniary penalty for the contravention as the court determines to be appropriate. (4) An order under subsection (3) is a civil penalty order. (5) In determining the pecuniary penalty, the court may take into account all relevant matters, including: (a) the nature and extent of the contravention; and (b) the nature and extent of any loss or damage suffered because of the contravention; and (c) the circumstances in which the contravention took place; and (d) whether the person has previously been found by a court to have engaged in any similar conduct; and (e) the extent to which the person has cooperated with the authorities; and (f) if the person is a body corporate: (i) the level of the employees, officers or agents of the body corporate involved in the contravention; and (ii) whether the body corporate exercised due diligence to avoid the contravention; and (iii) whether the body corporate had a corporate culture conducive to compliance. 16 Section 145AA provides the maximum penalties for contravention of civil penalty provisions: (1) The pecuniary penalty for a contravention of a civil penalty provision by a body corporate must not exceed 5 times the amount of the maximum monetary penalty that could be imposed by a court if the body corporate were convicted of an offence constituted by conduct that is the same as the conduct constituting the contravention. (2) The pecuniary penalty for a contravention of a civil penalty provision by an individual must not exceed 3 times the amount of the maximum monetary penalty that could be imposed by a court if the person were convicted of an offence constituted by conduct that is the same as the conduct constituting the contravention. 17 Section 170 sets out provisions relating to offences. For the purposes of calculating the maximum monetary penalty that may be imposed against a body corporate convicted of an offence (which is required in order to calculate the maximum pecuniary penalty that may be imposed for contravention of a civil penalty provision pursuant to s 145AA(1)), s 170(5) provides that: If a body corporate is convicted of an offence against this Code, the court may, if the court thinks fit, impose a monetary penalty not greater than 5 times the amount of the maximum monetary penalty that could be imposed by the court on an individual convicted of the same offence. 18 A penalty unit is defined in s 3 of the Code as having the same meaning as in s 4AA of the Crimes Act 1914 (Cth) (Crimes Act). A penalty unit had the following value over the period that is relevant to this proceeding: (a) $222 prior to 1 January 2023; (b) $275 between 1 January 2023 and 30 June 2023; and (c) $313 from 1 July 2023. 19 On the Applicant's calculations, the maximum penalty for a civil contravention of s 78(1) (supply) is 7,500 penalty units for a corporation and 900 penalty units for an individual. In dollar terms, that equates to a maximum penalty from $1,665,000 to $2,347,500 for the company, and from $199,800 to $281,700 for Ms Lewis. 20 The maximum penalty for a civil contravention of s 88(2) (publishing a notice offering to supply) is 1,250 penalty units for a corporation and 150 penalty units for an individual, and accordingly during the relevant period varied from $277,500 to $391,250 for the company, and from $33,300 to $46,950 for Ms Lewis. 21 The maximum penalty for a civil contravention of s 105 (failure to comply with a recall notice) is 3,000 penalty units for a corporation, in dollar terms from $666,000 to $939,000. 22 The Code also contains specific provisions providing that a court of competent jurisdiction may make "restraining injunctions" or "performance injunctions" in respect of offences against the Code or contraventions of civil penalty provisions of the Code (s 145F). Both injunction provisions are in addition to, and do not derogate from, any other powers of the Court in respect of the grant of injunctions (s 145FC).
FACTUAL BACKGROUND 23 From 8 April 2019, Ms Lewis and the Trustee for the AE & KL Lewis Family Trust (the Trustee) traded under the name "Back to Nature for Canines". 24 On 20 March 2020, the Applicant issued recall notices under s 101 of the Code to both Ms Lewis and the Trustee in relation to the alleged supply of unregistered agricultural and veterinary chemical products. 25 On 5 June 2020, the Applicant sent two emails to info@backtonatureforcanines.com.au, one marked for the attention of Ms Lewis and the other for the Trustee. Attached to those emails were cease and desist letters requesting a response from Ms Lewis and the Trustee by 19 June 2020 and explaining the action that had been taken in accordance with the 20 March 2020 recall notices. The letters explained that non-compliance with a recall notice constitutes contravention of s 105 of the Code. 26 The Applicant received confirmation of the delivery of both emails, but no delivery receipt was provided from the destination server. The Applicant has not received any response to the recall notices or the cease and desist letters from Ms Lewis or the Trustee. 27 From at least 17 September 2021, the Back to Nature for Canines website began displaying the "Bonnie & I" logo in the website banner. Sometime between 18 November 2021 and 9 December 2021, the URL of the Back to Nature for Canines website automatically redirected to www.bonnieandi.com.au (the company website). 28 Bonnie and I Pty Ltd is an Australian proprietary company, limited by shares. As noted above, the company's registered office and principal place of business is an address in Wantirna South, Victoria. Ms Lewis has been the sole director and secretary of the company since 2 August 2021.
The Applicant's investigations 29 The Applicant took steps to monitor the Back to Nature for Canines website and subsequently the company website between May 2021 and September 2022. In that period, the Applicant observed that the website was actively advertising products that appeared to meet the definition of agricultural and veterinary chemical products. 30 On 22 September 2021, Mr Maria (who was employed by the Applicant as the Acting Assistant Director, Records and Knowledge Management), consulted the company website and prepared a spreadsheet containing a list of 42 products advertised for sale that appeared to meet the definition of agricultural and veterinary chemical products. Mr Maria emailed that spreadsheet to the Applicant's Agricultural Administration team and to the Veterinary Medicines team and requested their advice as to whether the products contained in the spreadsheet were agricultural or veterinary chemical products that were required to be registered. 31 On 6 October 2021, Mr Maria received confirmation from the Assistant Director of Pesticides, Registration, Management and Evaluation, that three of the products on the list were required to be registered as they appeared to be substances which were supplied or used to directly or indirectly repel or prevent the infestation by or attacks of, any pest in relation to a plant, a place or a thing (that is, meeting the definition of agricultural chemical products provided in s 4(2) of the Code). 32 On 15 November 2021, Mr Maria received confirmation from the Risk Manager, Veterinary Medicines, that 39 of the 42 products listed in the spreadsheet were required to be registered as veterinary chemical products. 33 Between 19 November 2021 and 10 December 2021, the Applicant made multiple attempts to contact Ms Lewis and the company to invite their comment on the advertisement of unregistered agricultural and veterinary chemical products on the company website. Neither Ms Lewis nor the company provided any response to those attempts at contact. 34 In October 2022, carriage of the investigation into Ms Lewis and the company was handed over to Mr Mair who was the Applicant's Assistant Director, Investigation Manager, Assessment, Investigation and Monitoring. 35 The Applicant continued to monitor the company website and, as at 3 November 2022, the Applicant observed that the website was actively advertising 74 products that appeared to be unregistered agricultural and veterinary chemical products. Screenshots of the website as at 3 November 2022 were in evidence. 36 On 3 November 2022, Mr Mair emailed a list containing details of those 74 products advertised on the company website to the Applicant's Pesticides Registration Management team and Veterinary Medicines team, and requested their advice as to which of the products were required to be registered. 37 On 17 November 2022, Mr Mair received confirmation from the Assistant Director of Pesticides, Registration, Management and Evaluation, that three of the 74 products identified met the definition of an agricultural chemical product and were required to be registered. 38 On 6 January 2023, Mr Mair received an email from the Veterinary Medicines team that attached a spreadsheet confirming that 71 of the 74 products identified met the description of a veterinary chemical product and were therefore required to be registered with the Applicant. 39 The Applicant read the affidavits of Donald Ray Sibanda (the Director of Veterinary Medicines at the APVMA) and Hugh Roy Dearnley Dawick (the Director of Pesticides at the APVMA) deposing to their assessment of the products requiring registration.
The recall notice 40 On 20 February 2023, an authorised delegate of the Applicant signed and endorsed Recall Notice No 1 of 2023 pursuant to s 101 of the Code (the Recall Notice). The Recall Notice concerned the supply of unregistered agricultural and veterinary chemical products by the company. Annexed to the notice was a list of the 71 veterinary chemical products, and three agricultural chemical products that were the subject of the notice. 41 On 6 March 2023, a copy of the Recall Notice was sent to the company by email to hello@bonnieandi.com.au, being the email address published on the company website. 42 On 28 February 2023, the Applicant engaged the services of a process server to serve the Recall Notice on the company. On 7 March 2023, the Applicant received confirmation that the process server had effected service of the Recall Notice on the company by placing the document into a sealed addressed envelope, and placing the envelope into the mailbox at the company's principal place of business (being the Wantirna South address). 43 Following service of the Recall Notice on the company, the Applicant made several, unsuccessful attempts to contact Ms Lewis and the company in order to discuss the notice.
Supply 44 On 6 April 2023, Mr Mair accessed the company website and, using an alias, placed an order for a product called "Bladder Infection", which featured in the list of products annexed to the Recall Notice. 45 On 7 April 2023, the Applicant received a shipping confirmation email. The product was delivered to the Applicant on 21 April 2023. Attached to the parcel was an Australia Post paid postage slip that recorded the product having been sent from the company and Ms Lewis at the Wantirna South address.
The infringement notice 46 As of 3 July 2023, the company had not responded to the Applicant's attempts to contact Ms Lewis. Nor had it complied with the Recall Notice. 47 On 7 July 2023, the Applicant issued an infringement notice to the company pursuant to s 145AD of the Code (the Infringement Notice). The Infringement Notice required the company to pay $82,500 within 28 days, for non-compliance with the Recall Notice in contravention of s 105 of the Code. The Recall Notice relevantly stated: If you choose not to pay the amount payable under this infringement notice court proceedings seeking a civil penalty order may be brought against you in relation to the alleged contravention. … The APVMA may at any time withdraw this infringement notice in accordance with s 145DD of the Schedule to the Agricultural and Veterinary Chemicals Code Act 1994 and court proceedings seeking a civil penalty order may be brought against you in relation to the alleged contravention. 48 Also on 7 July 2023, the Applicant engaged a process server to serve the Infringement Notice on the company. On 14 July 2023, the Applicant received confirmation that a copy of the Infringement Notice had been served on the company by placing the document into a sealed addressed envelope and placing the envelope into the mailbox at the company's principal place of business (being the Wantirna South address). 49 The company did not respond to the Infringement Notice, nor did it pay the amount stated in the notice within the required 28 days. On 14 September 2023, the Applicant withdrew the notice. On 27 September 2023, the Applicant commenced this proceeding.
Continued monitoring of the company 50 The Applicant has continued to monitor the company website for products meeting the description of unregistered agricultural or veterinary chemical products. 51 On 5 September 2023, the Applicant observed that the company had updated the products listed on the website. Of the 74 products listed in the Recall Notice, 49 were still advertised for sale, but the names of some products had been amended to include an asterisk in place of certain letters (for example, the product advertised as "Castor Oil" at the time of the Recall Notice being issued, had been renamed to "C*aster Oil"). Screenshots of the company website as at 5 September 2023 were in evidence. 52 On 10 October 2023, a further review of the company website revealed that the company had replaced the "Bonnie & I" logo with a logo that read "Plant Base Solutions". The Applicant observed that the company website continued to advertise five of the 74 products listed in the Recall Notice, and had introduced an additional 16 products that appeared to meet the definition of veterinary chemical products. 53 On 31 October 2023, the Applicant identified an eBay store sharing the company's name and advertising for sale products bearing the company logo. A search of the eBay enforcement portal revealed that the store was registered to Ms Lewis at the Wantirna South address, and that the email address associated with the store was the same email address advertised on the company website. 54 The Applicant identified 15 products which had been listed in the Recall Notice, and a further nine products that met the description of a veterinary chemical product, were advertised on the eBay store. Those products remained available for purchase via the eBay store as at 14 November 2023. 55 The Applicant also reviewed the "Feedback profile" attached to the company's eBay store. The Feedback profile contained six posts left by various users in the past month, detailing their experience making a purchase from the store. Each post also included the name of the product that was purchased. 56 The Applicant undertook a further review of the company website on 14 November 2023. The Applicant observed that 38 products meeting the description of agricultural or veterinary chemical products were advertised for sale, none of which had been the subject of the Recall Notice.
Jurisdiction 57 As was made clear during the hearing, the Applicant brought this proceeding under the Code, as it applies as a law of Victoria. In Australian Pesticides and Veterinary Medicines Authority v Arnica Pty Ltd (No 2) (2022) 293 FCR 533; [2022] FCA 815 (Arnica), Jackson J - there dealing with the Code as it applied as a law of Western Australia - explained the basis upon which the Federal Court has jurisdiction: Arnica at [14]-[15], [32]-[37]. 58 As Jackson J explained in Arnica, the Federal Court has jurisdiction pursuant to s 39B(1A)(a) of the Judiciary Act 1903 (Cth) on the basis that the APVMA is an emanation of the Commonwealth and must therefore be taken to be "the Commonwealth" for the purposes of s 39B(1A)(a): citing Australian Securities and Investments Commission v Edensor Nominees Pty Ltd (2001) 204 CLR 559; [2001] HCA 1 at [39]-[43] (Gleeson CJ, Gaudron and Gummow JJ); Austral Pacific Group Ltd (in liq) v Airservices Australia (2000) 203 CLR 136; [2000] HCA 39 at [10] (Gleeson CJ, Gummow and Hayne JJ), [48] (McHugh J) and other cases referred to in Arnica at [34]. Section 39B(1A)(a) provides that the Federal Court has jurisdiction in any matter "in which the Commonwealth is seeking an injunction or a declaration". In this case, as in Arnica, the Applicant is seeking injunctions. In this case, it is also seeking declarations.
Products requiring registration 59 I am satisfied, based on the affidavit of Mr Dawick, the Director of Pesticides of the Applicant, that products numbered 2 and 3 in Table 1 in the Annexure to the Originating Application, are agricultural chemical products. Those products were required to be registered, but were not registered. These products were among the products listed in the Recall Notice. 60 However, while "Animal Repellent Shavings" is listed as a product in the Annexure to the Originating Application, Mr Dawick did not list it as one of the products he identified as an agricultural chemical product. Accordingly, I am not satisfied that that product required registration. As there is no evidence this product is an agricultural chemical product (and therefore a chemical product within the meaning of the Code), it follows that the Recall Notice was ineffective in relation to this product. Following the hearing, the Applicant refined the orders it sought to omit this product from the list of products in respect of which orders were sought. 61 I am satisfied, based on the affidavit of Mr Sibanda, the Director of Veterinary Medicines of the Applicant, that the 71 products listed in Table 2 in the Annexure to the Originating Application, are veterinary chemical products. Those products were required to be registered, but were not registered. These products were among the products listed in the Recall Notice.
Contraventions 62 The evidence establishes that the company published, or caused to be published, notices offering to sell all the products listed in the Annexure to the Originating Application and the Recall Notice. As those products, other than "Animal Repellent Shavings" were required to be registered, the company contravened s 88 of the Code. 63 The evidence demonstrates that all the products listed in the Annexure to the Originating Application and which were the subject of the Recall Notice were offered for sale on the company's website on 3 November 2022. By its Originating Application, the Applicant sought declarations that the company and Ms Lewis contravened s 88 in respect of all of those products from 3 November 2022 to 5 September 2023. However, the evidence as to what was still advertised as being for sale on 5 September 2023 was limited to a sub-set of 49 of the products. 64 Recognising that the declarations as framed in the Originating Application could not be sustained, after the hearing, the Applicant submitted a revised form of order that sought declarations in respect of the wider list of 73 products as at 3 November 2022 and the narrower list of 49 products between 3 November 2022 and 5 September 2023. While there is no direct evidence of the continued offering for sale of the 49 products on dates between 3 November 2022 and 5 September 2023, I consider that it is open to infer, and I do infer, that at least that group of 49 products was offered for sale over that period. 65 The products listed in the Annexure to the Originating Application were the subject of the Recall Notice. The evidence establishes that the Recall Notice was not complied with, and no reasonable excuse has been advanced for that failure. Consequently, the company contravened s 105 of the Code in respect of those products (other than to the extent the Recall Notice included "Animal Repellent Shavings" which, as already stated, has not been established to be a chemical product requiring registration). 66 By its Originating Application, the Applicant sought a declaration that the company contravened s 78 of the Code by supplying, or causing or permitting to be supplied, all the products listed in the Annexure to the Originating Application and the Recall Notice. However, the evidence only establishes that one product was sold. That single instance of sale is the supply of the "Bladder Infection" product to Mr Mair when he placed his incognito order with the company. 67 Recognising this issue, and following discussion at the hearing, the Applicant narrowed the declarations sought so that a declaration concerning contravention of s 78 of the Code was only sought in respect of the one established sale of a product. 68 The Applicant has established a single contravention of s 78 of the Code in relation to the supply of the "Bladder Infection" product on 7 April 2023 (being the date that dispatch of the product ordered was confirmed). 69 Section 78 provides that "a person must not ... cause or permit [unregistered chemical products] to be supplied". Similarly, s 88 provides that "a person must not ... cause or permit [a notice offering to (inter alia) sell unregistered chemical products] to be published". As Ms Lewis is - and was when the company's contravening conduct occurred - the sole director and controller of the company, I am satisfied that she also contravened ss 78 and 88 by the conduct referred to. 70 The Recall Notice was issued on 20 February 2023. Section 105 only obliges the "person to whom a recall notice is given" to comply with it. As the Recall Notice was issued only to the company, only the company contravened s 105. While the Originating Application as framed sought a declaration that Ms Lewis also contravened s 105, this was not pursued following discussion at the hearing.
Declaratory relief 71 It is appropriate to grant declaratory relief as to the established contraventions. Such declarations serve to vindicate the Applicant's claim (to the extent it was established): Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (2017) 254 FCR 68; [2017] FCAFC 113 at [93] (Dowsett, Greenwood and Wigney JJ). Further, the questions in respect of which declaratory relief has been sought are real and not hypothetical, are matters which the Applicant had a real interest in raising, and there was a proper contradictor (even though the company and Ms Lewis elected not to participate): Forster v Jododex Australia Pty Ltd (1972) 127 CLR 421 at 437-438; Australian Competition and Consumer Commission v MSY Technology Pty Ltd (2012) 201 FCR 378; [2012] FCAFC 56 at [30]-[33] (Greenwood, Logan and Yates JJ).
Injunctions 72 I am satisfied that it is appropriate to enjoin the company and Ms Lewis from engaging in the conduct that has given rise to the contraventions. The evidence discloses that the company and Ms Lewis have not been responsive to the enforcement activities of the Applicant or its attempts to engage with them. There is, in my assessment, a material risk that they will continue to engage in conduct contravening the Code. It is also, as the Applicant submitted, appropriate to grant injunctive relief to mark the Court's disapproval of the contravening conduct: see, eg, Australian Competition and Consumer Commission v Oscar Wylee Pty Ltd [2020] FCA 1340 at [86] (Katzmann J). Injunctions serve a public purpose by furthering the prevention and deterrence of unlawful conduct: Ethicon Sàrl v Gill (2021) 288 FCR 338; [2021] FCAFC 29 at [919] (Jagot, Murphy and Lee JJ). 73 That said, I do not consider it appropriate to frame injunctions in terms that enjoin the Respondents from supplying, or causing to permit or be supplied, unregistered agricultural or veterinary chemical products contrary to s 78 of the Code - or a similarly framed injunction in respect of s 88 - as the Applicant sought. In my view, injunctions framed in those terms require the person subject to the injunction to obey the law. The Respondents are already required to comply with the Code. Moreover, the Code sets out the enforcement mechanisms that are available in the event of non-compliance with the Code. I do not consider it appropriate effectively to depart from the statutory regime in respect of any future instances of non-compliance that differ from the non-compliance that is the subject of this proceeding, by replacing (or supplementing) that regime with enforcement by contempt of court proceedings. 74 Another reason for not granting injunctive relief in the form sought is that injunctions need to be framed so that the person subject to them knows what is required of them in the future: eg, Secretary, Department of Health and Aged Care v Vapor Kings Pty Ltd [2023] FCA 1297 at [48] (Abraham J). Injunctions that are framed in the terms sought by the Applicant, which embed the words "contrary to s 78", and "contrary to s 88", may not be clear as the Respondents may not know in a given case whether a product other than those the subject of this proceeding requires registration such that they may fall foul of the injunctions if the product is not registered.
Civil penalties 75 Each of ss 78, 88 and 105 are civil penalty provisions, contravention of which constitute offences. Accordingly, pursuant to s 145A(3) the Court may order the contravening person to pay "such pecuniary penalty for the contravention as the court determines to be appropriate". 76 Each of ss 78, 88 and 105 specifies that contravention of the provision constitutes an offence and specifies the number of penalty units. 77 The maximum civil penalties that may be imposed for a contravention of ss 78, 88 and 105 are set as multiples of the maximum penalty that may be imposed for an offence: three times that maximum for an individual, and five times that maximum for a body corporate: s 145AA. However, the maximum penalty for an offence committed by a body corporate is itself five times the penalty that may be imposed for an individual: s 170(5). Accordingly, and as the Explanatory Memorandum to the Agricultural and Veterinary Chemicals Legislation Amendment Bill 2013 (Cth) confirms, the maximum civil penalty for a body corporate will be 5 x (penalty for offence for an individual x 5) so that, for example, contravention of a provision which specifies 300 penalty units for an offence will result in the maximum civil penalty for a body corporate being 7,500 penalty units (5 x (300 x 5)). 78 Pursuant to s 78(2A) the penalty for an offence constituted by contravening s 78(1) is 300 penalty units. The maximum civil penalty for the company in respect of the sole established contravention of s 78(1) is therefore 7,500 penalty units and the maximum civil penalty for Ms Lewis is therefore 900 penalty units. On 7 April 2023 (being the date of the contravention) a penalty unit had a value of $275. Therefore, the maximum penalty against the company is $2,062,500 and the maximum penalty against Ms Lewis is $247,500. 79 Pursuant to s 88(2A) the penalty for an offence constituted by contravening s 88(2) is 50 penalty units. The maximum civil penalty for the company for a single contravention of s 88(2) is 1,250 penalty units and the maximum civil penalty for Ms Lewis in respect of a single contravention of s 88(2) is 150 units. 80 The Applicant asserts breaches of s 88(2) over the period 3 November 2022 to 5 September 2023. During that period the value of penalty units varied from $222 (prior to 1 January 2023) to $275 (from 1 January 2023 to 30 June 2023) and $313 (from 1 July 2023). Accordingly, the maximum civil penalty for the company for a single contravention of s 88(2) is between $277,500 and $391,250, and between $33,300 and $46,950 for Ms Lewis. 81 The penalty for the offence of contravening s 105(1) is 120 penalty units. As the Recall Notice was issued on 20 February 2023, and required some steps be taken "immediately" and destruction of stocks within 28 days, the penalty unit value of $275 is the appropriate value to refer to. On that basis, the maximum civil penalty against the company for contravening s 105(1) is 3000 penalty units, equivalent to $825,000. 82 The Applicant initially submitted that a total penalty should be imposed on the company in the range of $1,000,000 to $1,200,000 and on Ms Lewis in the range $100,000 to $150,000. After the hearing, it submitted the penalty for the company should be $1,200,000 and the penalty for Ms Lewis should be $150,000. 83 Section 145AD(1) provides that: A court may make a single civil penalty order against a person for multiple contraventions of a civil penalty provision if proceedings for the contraventions are founded on the same facts, or if the contraventions form, or are part of, a series of contraventions of the same or a similar character. 84 The evidence establishes that the company and Ms Lewis contravened s 88(2) in respect of the wider set of products on 3 November 2022, and in respect of the narrower set of 49 products in the period through to 5 September 2023. I accept that it is appropriate to impose a single total penalty against each of the Respondents in respect of the contraventions of s 88(2). 85 However, as only a single contravention of s 78, and a single contravention of s 105 have been established, I consider it more appropriate to order separate penalties in respect of each of those contraventions. They are also qualitatively different kinds of contraventions from the contraventions of s 88(2) (actual supply and failure to comply with a recall notice, cf publishing notices that unregistered products are available for sale). 86 In determining the amount of appropriate penalties, deterrence is a significant factor, as it always is in civil penalty cases: eg, Australian Building and Construction Commissioner v Pattinson (2022) 274 CLR 459; [2022] HCA 13 (Pattinson) at [9] (Keifel CJ, Gageler, Keane, Gordon, Steward and Gleeson JJ). The regime established by the Code seeks to protect the health and safety of humans, animals and the environment through the regulation of agricultural and veterinary chemical products. That is an important public good. Specific and general deterrence necessitate penalties that serve as meaningful deterrents. 87 Specific deterrence also looms large given the evidence which establishes that: (1) Ms Lewis earlier offered such products for sale through another trading name - "Back to Nature for Canines" - and, despite being issued with recall notices in 2020, continued to sell such products on a website www.backtonatureforcanines.com.au through to December 2021, when that website automatically redirected to the company's website, www.bonnieandi.com.au. (2) Ms Lewis has failed to engage with the Applicant over several years in respect of the sale of unregistered chemical products, despite multiple approaches by the Applicant and attempts to have Ms Lewis engage. (3) it appears Ms Lewis attempted to side-step the Applicant's enforcement and infringement actions by effecting slight name changes to some products, often involving the insertion of symbols such as * in place of letters in product names. (4) Ms Lewis continued to operate an "eBay" store (www.ebay.com.au/usr/bonnieandi) offering for sale a sub-set of the products that were the subject of the Recall Notice, as well as other products the Applicant considers require registration. 88 In short, Ms Lewis has been entirely recalcitrant and uncooperative, paying little (if any) regard to compliance with the legislative regime. The same can be said of the company, under Ms Lewis's control. Prior, and subsequent, misconduct is a relevant consideration in assessing the need for specific deterrence: eg, Australian Building and Construction Commissioner v McDermott (No 3) [2018] FCA 1105 at [18]-[19] (Charlesworth J). 89 Turning to the non-exhaustive factors set out in s 145A(5): (1) The nature and extent of the contravention: the contraventions of s 88 took place over a sustained period of time and involved a wholesale disregard of the legislative prohibition on publishing notices offering to sell unregistered chemical products. That conduct also had a wide "reach" as the notices offering the unregistered products for sale could be viewed by anyone with an internet connection. While the company's failure to comply with the Recall Notice was an isolated event (as only one notice is presently in issue), it is a serious matter not to comply with a recall notice issued by an authority charged with enforcement of Commonwealth legislation. Only an isolated instance of the actual supply of a product has been established. (2) Any loss or damage suffered because of the contravention: no pecuniary loss or damage has been established by reason of the contravening conduct. (3) Circumstances in which the contravention took place: the contravening conduct was not the result of inadvertence or any innocent mistake. Rather, the contraventions were the product of Ms Lewis and the company thumbing their noses at the regulatory regime and the Applicant as the statutory enforcement authority. (4) Previous court findings as to similar conduct: there are no previous court findings of relevance. (5) The extent to which the person has cooperated with the authorities: Ms Lewis and the company have not cooperated at all. To the contrary, they have failed to engage and have been non-cooperative. (6) In relation to the company, the level of employees, officers or agents involved, whether the company exercised due diligence to avoid the contraventions and whether the company had a corporate culture conducive with compliance: the contravening conduct involved Ms Lewis, the sole director and controller of the company; there is no evidence of any due diligence to avoid contravening conduct; and there is no evidence of a corporate culture of compliance (rather, the converse is established as the evidence demonstrates a corporate culture that was indifferent to the regulatory regime and the need to comply with it). 90 Another relevant matter is the size and financial position of the contraveners. The company is a small company with only one director (Ms Lewis). Ms Lewis is also the sole shareholder. The registered office and principal place of business are both Ms Lewis' address. There is no evidence of the financial capacity of Ms Lewis or the company. 91 Taking these matters into account in the instinctive synthesis of relevant matters in setting the appropriate penalty (Australian Competition and Consumer Commission v Employsure Ltd (2023) 164 ACSR 103; [2023] FCAFC 5 at [42], [50], [53] (Rares, Stewart and Abraham JJ)), I have determined to fix penalties as follows: (1) For the company's single contravention of s 78, a penalty of $300,000 (against a maximum penalty of $2,062,500). (2) For Ms Lewis's single contravention of s 78, a penalty of $90,000 (against a maximum penalty of $247,500). (3) For the company's contraventions of s 88, a penalty of $250,000 (against a maximum penalty of $391,250 having regard to the value of penalty units from 1 July 2023). (4) For Ms Lewis's contraventions of s 88, a penalty of $45,000 (against a maximum penalty of $46,950 having regard to the value of penalty units from 1 July 2023). (5) For the company's contravention of s 105, a penalty of $300,000 (against a maximum penalty of $825,000). 92 Looking at the total penalties, a total penalty of $850,000 for the company and $135,000 for Ms Lewis is sufficiently high to serve the ends of deterrence and to reflect the Court's opprobrium of the Respondents' conduct. As there is no evidence of the Respondents' assets or wherewithal, there is no basis upon which to consider whether the total penalties ought to be reduced on the basis that they would be "crushing" (Pattinson at [110] (Edelman J)). 93 I will make a lump sum costs order in favour of the Applicant in the amount of $61,233.18. That sum reflects calculations undertaken by the Applicant's solicitor, Mr Michael John Palfrey, to which Mr Palfrey deposed in his affidavit dated 10 May 2024. I certify that the preceding ninety-three (93) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Button.
Australian Pesticides and Veterinary Medicines Authority
Bonnie and I Pty Ltd
[1972] HCA 61
(2000) 203 CLR 136
(2017) 254 FCR 68
(2022) 274 CLR 459
(2012) 201 FCR 378
(2022) 293 FCR 533
(2001) 204 CLR 559
(2021) 288 FCR 338
(1972) 127 CLR 421