On 25 May 2012, the Federal Court handed down its decision in Swisse Vitamins Pty Ltd v The Complaints Resolution Panel,1 an appeal against the decision of the Complaints Resolution Panel (the Panel) that advertisements published by Swisse Vitamins Pty Ltd (Swisse) were in contravention of the Therapeutic Goods Advertising Code 2007 (Code). The decision revisits the requirement for decision makers to afford natural justice or procedural fairness to those who are affected by their decisions.

Background

The Panel had received two anonymous complaints in 2011 regarding television advertisements which used the slogan ‘You’ll feel better on Swisse’ and included statements that particular products were ‘clinically proven’ and ‘independently tested.’

Part 2 of the Therapeutic Goods Regulations 1990 (Cth) (Regulations) made under the Therapeutic Goods Act 1989 (Cth) (Act) regulates the advertising of therapeutic goods. Importantly, all advertising relating to therapeutic goods must comply with the Code. The Code establishes standards which must be met by the advertisements. The Secretary of the Department of Health and Ageing can direct, and the Panel can recommend that an advertisement be withdrawn.

The Panel was required to consider the complaints and decide whether they were justified. The Panel provided copies of the complaints to Swisse and requested a response with any supporting evidence. Swisse provided submissions which responded in detail to the allegations made in the two complaints and provided supporting evidence. The Panel upheld some of the claims, made some additional findings, and requested Swisse to withdraw the advertisements from further publication and to withdraw and to not repeat certain representations used in the advertising of the products.

Swisse initiated proceedings in the Federal Court to seek review of the decision of the Panel. Swisse complained that it was denied natural justice or procedural fairness under the Administrative Decisions (Judicial Review) Act 1977 (Cth) (ADJR Act). In particular, Swisse claimed that the Panel had made a series of adverse findings against Swisse without first giving it the opportunity to respond to the relevant matters. Swisse submitted that this had occurred because the complaints were not sufficiently clear to alert Swisse to the matters which the Panel was considering or because the Panel had made adverse findings despite the relevant allegations not being made in the complaints.

Judgment

Tracey J found that there had been a denial of natural justice to Swisse within the meaning of section 5(1)(a) of the ADJR Act as well as a contravention of regulation 42CAH of the Regulations. There was a denial of natural justice because of the Panel’s findings that particular statements made in an advertisement contravened the Code when those contraventions were not complained of in the original complaints. His Honour found that it is a fundamental requirement of procedural fairness ‘that a person whose interests may be prejudiced by an administrative decision is entitled to have his mind directed to the critical issue or factor on which the administrative decision is likely to turn so that he may have an opportunity of dealing with it.2 As such, it was necessary for the Panel to identify to Swisse any critical issue on which the Panel’s decision turned and to bring it to Swisse’s attention and afford Swisse a right to respond to the additional breaches of the Code identified by the Panel (which were not specified in the original complaints).

Similarly, Regulation 42CAH required the Panel to provide Swisse with notice that it had come to this decision in relation to the further contraventions and invite further submissions from Swisse. The Court ordered that the Panel’s findings which were not linked to any specific complaint be set aside.

Implications

While the decision of the Panel is important, as it can be taken as an indication of the Panel's attitude towards the advertisement of therapeutic products generally, the matter also serves as a general reminder to all administrators that before making adverse findings it is important to afford those affected by its decision the opportunity of making submissions about all of the matters being considered by the administrator.