Freedom Pharmaceutical Pty Ltd v Minister for Health

1. The applicant pay the first respondent's costs of the proceedings. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

BURLEY J: 1 In Freedom Pharmaceutical Pty Ltd v Minister for Health [2021] FCA 213 (judgment) I ordered that an application brought by Freedom Pharmaceutical Pty Ltd for judicial review of a decision of the Minister for Health, approving an application to supply pharmaceutical benefits from certain premises located in Blacktown Mega Centre under s 90A(2) of the National Health Act 1953 (Cth), be dismissed. I directed that the parties make submissions as to costs, which they have now done. These reasons assume familiarity with the judgment. 2 The Minister submits that costs should follow the event, with the consequence that Freedom be ordered to pay his costs. Freedom submits that the following principle set out in R v Australian Broadcasting Tribunal; Ex parte Hardiman [1980] HCA 13; 144 CLR 13 at 35-36 (Gibbs, Stephen, Mason, Aickin and Wilson JJ) applies, with the consequence that there should be no order as to costs: … In cases of this kind the usual course is for a tribunal to submit to such order as the court may make. The course which was adopted by the Tribunal in this Court is not one which we would wish to encourage. If a tribunal becomes a protagonist in this Court there is the risk that by so doing it endangers the impartiality which it is expected to maintain in subsequent proceedings which take place if and when relief is granted. The presentation of a case in this Court by a tribunal should be regarded as exceptional and, where it occurs should, in general, be limited to submissions going to the powers and procedures of the Tribunal. 3 Freedom accepts that s 43 of the Federal Court of Australia Act 1976 (Cth) confers on the Court a broad discretion regarding the making of costs orders. It submits, however, that a departure from the ordinary principle that costs follow the event is warranted on the basis of the operation of the principle in Hardiman. It submits that the Hardiman principle can apply to a decision-maker who exercises administrative decision making powers and regulatory functions both inter partes and in so-called "one party" cases where no contradictor exists to a review application, citing, amongst other cases, Huon Aquaculture Group Ltd v Minister for the Environment (No 2) [2018] FCA 1938 at [47]-[53] (Kerr J). It submits that the importance of the Minister maintaining neutrality is heightened in this case because it is the Minister personally who must exercise the discretionary power under s 90A(2) of the National Health Act and because, had the challenge been successful, the result would have been to set aside the decision and require the Minister to reconsider the application of the second respondent, Ms Rouchdi. Despite this, the Minister took an active role in the litigation and became a protagonist in the proceedings in circumstances where there was a natural protagonist in the form of Ms Rouchdi, the operator of the relevant pharmacy, who was properly joined and who was in a position to defend the legality of the impugned decision. In such a circumstance, Freedom submits that the Minister was obliged to assume a passive role and Freedom should not have to pay the Minister's costs of placing himself in the position of a protagonist. 4 Freedom submits that the fact that Ms Rouchdi filed a submitting appearance, and did not participate in the proceedings, does not negate the desirability of the Minister maintaining a neutral position, citing Lucas v Secretary, Department of Health [2020] FCA 1603 at [66]-[67] (Rares J) and Masu Financial Management Pty Ltd v Financial Industry Complaints Service Ltd [2005] NSWSC 596 (Grove J). 5 Freedom submits that even if it were considered that this case is exceptional in the sense contemplated in Hardiman, the Minister's submissions went beyond what was appropriate in seeking to defend the legality of the decision by responding to each of Freedom's review grounds. Freedom submits that the Minister should have confined his arguments to elucidating the powers and procedures under Division 2 of Part VII of the National Health Act rather than arguing for a particular outcome. Instead, Freedom contends that the Minister, in taking the position that he did, compromised his impartiality to determine the request for the approval in the event that the decision was set aside. 6 The principle in Hardiman reflects the concern that if a tribunal becomes a protagonist in litigation in this Court, there is a risk that, by so doing, it endangers the impartiality which it is expected to maintain in any subsequent proceedings taking place if and when relief is granted. That principle is not of unvarying application. As Brennan J noted in Fagan v Crimes Compensation Tribunal [1982] HCA 49; 150 CLR 666 at 681-682, the principle does not necessarily apply to proceedings arising out of a dispute that was not inter partes where "it may be desirable that the tribunal should appear by counsel to make such submissions as it thinks calculated to assist the court and, in an appropriate case, to argue against the applicant's case". 7 Whilst I accept that the principle in Hardiman may apply in certain cases where a Minister seeks to defend one of his or her decisions, I consider that the following factors militate against the conclusion that it should be applied in the present case. 8 First, whilst the natural contradictor to the case advanced by Freedom was, at least on one view, Ms Rouchdi, she elected to file a submitting appearance. In these circumstances, in my view, it was desirable that the Minister should appear by counsel to assist the Court: see Fagan at 681-682; Ogawa v Australian Information Commissioner [2014] FCA 229 at [22]-[25] (Greenwood J); Huon at [18]; Lo v Australian Community Pharmacy Authority [2013] FCA 639 at [73] (Katzmann J). 9 Secondly, Freedom raised seven grounds of review. These grounds included allegations of legal unreasonableness and taking into account an irrelevant consideration, and going to the construction of particular words and phrases within the National Health Act. I do not consider that the Minister could have provided proper assistance to the Court by merely elucidating the powers and procedures under Division 2 of Part VII of the National Health Act, rather than arguing for a particular outcome, as Freedom contends. I consider that the role taken by the Minister was, in all of the circumstances, appropriate having regard to the absence of any other contradictor. 10 Thirdly, as Callinan J noted in Minister for Immigration v Jia Legeng [2001] HCA 17; 205 CLR 507 at [244]-[245], the position of a Minister is not directly analogous to that of a tribunal and, by reason of that distinction, concerns about the perception of bias on remitter from a Court which underlie the principle in Hardiman are somewhat diminished. 11 Fourthly, Freedom did not take the point during the course of the proceedings that the Minister's participation ought to be more limited or non-existent. Although not an absolute bar to obtaining the costs that it seeks, it somewhat weakens Freedom's current position: Capricornia Credit Union Ltd v Australian Securities and Investments Commission [2007] FCAFC 112 at [14] (Dowsett, Edmonds and Besanko JJ). Whilst I accept that the Minister should have been aware of the principle in Hardiman in any event, this consideration must be balanced against the Minister's submission that had Freedom taken the point now raised at an early stage of the proceedings, the Minister could have sought the intervention of the Attorney-General to act as an alternative contradictor outside of any Hardiman constraints. 12 Finally, I do not consider that either Masu or Lucas provide a basis for reaching a different conclusion. In Masu, the decision-maker was seeking to avoid an order that it pay costs despite unsuccessfully taking an active role in defending its position. Consequently, it may be readily distinguished on its facts. In Lucas, the Court took the view that where a natural contradictor chooses not to participate, the person in the position of the Minister should not play an active role in the proceedings. That should be seen as a decision arising on the facts of the case before the Court where the applicant for review took the point that the Secretary of the Department of Health had trespassed beyond her position of neutrality in opposing the application: Lucas at [65]. Additionally, I note that, having regard to Callinan J's observations in Jia Legeng at [244]-[245], different considerations may apply where, as here, the contradictor is a Minister as opposed to a Secretary of a Department as was the case in Lucas. As I have noted, in Fagan, Ogawa, Lo and Huon the absence of a contradictor was seen to be a factor engaging an exception to the principle in Hardiman. Each case concerning the exercise of discretion will, of course, depend on its own facts. 13 In the present case, having regard to the matters set out above, I do not consider that the principle in Hardiman applies such as to disentitle the Minister from the usual order for costs following the event. 14 Accordingly, Freedom must pay the Minister's costs of the proceedings. I certify that the preceding fourteen (14) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Burley.