Section 74B
931 Relevantly to the present case, s 74B of the Trade Practices Act provides as follows:
(1) Where:
(a) a corporation, in trade or commerce, supplies goods manufactured by the corporation to another person who acquires the goods for re‑supply;
(b) a person (whether or not the person who acquired the goods from the corporation) supplies the goods (otherwise than by way of sale by auction) to a consumer;
(c) the goods are acquired by the consumer for a particular purpose that was, expressly or by implication, made known to the corporation, either directly, or through the person from whom the consumer acquired the goods or a person by whom any antecedent negotiations in connexion with the acquisition of the goods were conducted;
(d) the goods are not reasonably fit for that purpose, whether or not that is a purpose for which such goods are commonly supplied; and
(e) the consumer or a person who acquires the goods from, or derives title to the goods through or under, the consumer suffers loss or damage by reason that the goods are not reasonably fit for that purpose;
the corporation is liable to compensate the consumer or that other person for the loss or damage and the consumer or that other person may recover the amount of the compensation by action against the corporation in a court of competent jurisdiction.
(2) Subsection (1) does not apply:
(a) …
(b) where the circumstances show that the consumer did not rely, or that it was unreasonable for the consumer to rely, on the skill or judgment of the corporation.
932 The applicant's submissions under this section were brief. He submitted as follows:
· MSDA supplied Vioxx to pharmacies which acquired it for re‑supply;
· Vioxx was supplied to group members including the applicant by pharmacies;
· Vioxx was acquired by the applicant for the particular purpose of consumption as a non‑steroidal anti‑inflammatory drug the consumption of which would not lead to a material increase in the risk of suffering life‑threatening conditions …;
· the purpose of acquisition of Vioxx by the applicant (and all group members) was known to MSDA - the very purpose for which Vioxx was developed was to provide an arthritis medication without the potentially serious gastrointestinal side effects of traditional NSAIDs and MSDA's marketing campaign promoted Vioxx as having a gastrointestinal and overall safety profile which was superior to traditional NSAIDS;
· because Vioxx materially increased the risk of experiencing life‑threatening cardiovascular conditions, Vioxx tablets were not reasonably fit for their purpose of acquisition;
· the applicant suffered his heart attack because Vioxx materially increased the risk of suffering that cardiovascular condition.
933 The respondents' first submission in response to the applicant's case under s 74B was one which they made also in relation to s 74D. They submitted that neither section applied to prescription medicines. They submitted that the remedies created by ss 74B and 74D were not "apt to be applied to circumstances [which] are quite remote from the ordinary supply and acquisition of consumer goods". According to the respondents, the sections imposed norms of conduct which were not "apt to be applied to a case about the inherent properties of a prescription medicine". That was said to be so because "such goods carry with them inherent risks of side‑effects" and because "their supply is mediated by learned intermediaries, that is, the prescribing doctor and the dispensing pharmacist". If these general submissions were intended to be anything more than an introduction to the respondents' case under ss 74B and 74D, they were not developed for that purpose. Indeed, at that general level, the respondents made no submission in addition to those which I have briefly summarised in this paragraph. However, the fact that the goods in question may only be supplied on prescription has the potential to be an important consideration, both under s 74B and under s 74D. I shall return to that consideration in due course.
934 The respondents' first point under s 74B specifically related to what was said to be the intrinsic inappropriateness of the section to the context of a representative proceeding. The respondents referred to the "individualised nature of the inquiry involved", relying in this respect on the judgment of Wilcox J in Ryan v Great Lakes Council [1999] FCA 177. That case concerned oysters which had been contaminated by the presence of a foreign substance in the water in which they were grown. In a representative proceeding, the applicant succeeded under both s 74B and s 74D in relation to his personal claims, but Wilcox J held over the claims of the represented parties. As to the application of s 74B in the circumstances, his Honour said (at [368]):
The applicant is entitled to succeed under s 74B as against Barclay Oysters in respect of his personal claim. I cannot make any concluded finding in relation to the applicant's representative claim under s 74B against Barclay Oysters; it is conceivable - although, perhaps, unlikely - that something was said or done, at the time of the supply of oysters to a particular consumer, to make it unreasonable for that consumer to rely on the skill or judgment of Barclay Oysters. The application of s 74B to group members must be left for future determination, if that should prove necessary.
It will be noted that Wilcox J's reservation as expressed related to the question whether it was unreasonable for a particular consumer to have relied on the skill or judgment of the manufacturer. That is the second aspect of the defence arising under para (b) of s 74B(2). In the present case, MSDA pleaded that aspect of the paragraph in its Defence, but made no submission about it (in relation to the applicant). The particular respect in which Wilcox J held that the claims of the group members in Ryan were heterogeneous does not, therefore, arise on the applicant's own claim in the present case.
935 Notwithstanding that point of distinction, I accept that the claims of all group members cannot be fully resolved by reference to the case as it has been conducted to date. By the orders made on 30 March 2009 set out in Appendix A to these reasons, the court is presently confined to the resolution of questions which clearly stop a good distance short of dealing with the claims of group members other than the applicant. It is sufficient to say that, for any one group member to succeed under s 74B, he or she must establish what was his or her purpose in acquiring Vioxx and facts sufficient to show, or to give rise to an implication, that that purpose was made known to MSDA. Although, intuitively, the applicant's own circumstances look as though they might be typical, the claims of the other group members cannot be decided by intuition. Thus I accept that it will be necessary to stand those claims over to a later hearing of the proceeding.
936 The respondents then submitted that, in the context of prescription medicines, there is no "supply" of goods within the terms of s 74B(1)(b). They contended:
Rather, what has occurred is a supply of professional services with the provision of Vioxx as ancillary for these services. That is, there was a trilateral transaction whereby a doctor has prescribed and a pharmacist has dispensed a prescription medicine to a consumer.
There are indeed three parties involved in the transactions out of which a liability presumptively arises under s 74B. However, they are not the parties referred to in the respondents' submissions: they are MSDA, the pharmacist and the consumer. That a pharmacist supplied Vioxx tablets to the applicant within the meaning of para (b) of s 74B(1) does, with respect to the respondents, appear rather obvious.
937 The respondents relied on E v Australian Red Cross Society (1991) 31 FCR 299, in which the appellant was given infected blood in the course of a transfusion carried out while he was a patient in hospital. Relevantly to the present point, the question was whether the hospital had supplied goods within the meaning of s 71(1) of the Trade Practices Act. With the agreement of Sheppard and Pincus JJ, Lockhart J said (31 FCR 299 at 306):
In my opinion his Honour correctly found that there was no contract with the CSAHS for the supply of blood plasma to the appellant. The essence of the contract between the appellant and the CSAHS was one for services, namely, the provision of hospital, medical and nursing services for the purpose of treating the appellant for his medical problem and restoring him to health. To the extent that goods were provided to him such as food, sleeping tablets, antibiotics, dressings and things of this nature, they were provided as an incident to the contract for the provision of services. There was no contract for the supply of goods. The contract between the CSAHS and the appellant was one for services and is not divisible into a contract for services and for the supply of goods. I leave open, however, the question whether in an appropriate case a contract between a patient and a hospital may be divisible in other circumstances. But the provision on the facts of this case of medicines, drugs and blood cannot be severed into concepts of the provision of services on the one hand and of purchase and sale of goods on the other.
This authority is of no assistance to the respondents in the present case. The transactions with which Lockhart J was concerned related to undifferentiated treatment - which included the supply of blood - given to an inpatient in hospital. A transaction of that character, in my view, is in no sense analogous to that in which a consumer purchases medicines from a pharmacist, albeit that he or she does so on the authority of his or her prescribing doctor. I consider that the Vioxx tablets consumed by the applicant were supplied to him as goods within the meaning of s 74B(1)(b) of the Trade Practices Act.
938 The respondents next submitted that prescription medicines were not "acquired" within the meaning of s 74B(1)(c). Here the presumptive acquisition of goods was that by which the applicant, for example, obtained his Vioxx tablets from a pharmacist. The respondents invoked s 4C(a) of the Trade Practices Act, which provides that "a reference to the acquisition of goods includes a reference to the acquisition of property in, or rights in relation to, goods in pursuance of a supply of the goods". The respondents submitted that this "definition" (as s 4C(a) was described) was not satisfied because, first, there was no "acquisition of property in or rights in relation to Vioxx" and, secondly, there had been no "supply" of Vioxx as contemplated by the Trade Practices Act. I need say nothing further about the second of these points, as I have already held that the transaction by which the applicant obtained Vioxx tablets from his pharmacist was a "supply" in the relevant sense.
939 The provisions of s 4C(a) of the Trade Practices Act do not affect the ordinary meaning of the word "acquire". Their only effect is to incorporate into the connotation of that word, where used in the Act, the additional meanings referred to. In the facts of the present case, it is as clear as may be that the applicant acquired Vioxx tablets from his pharmacist, according to the ordinary sense of the word "acquire". In the circumstances, the applicant has no need to rely (and, indeed, does not seek to rely) on s 4C(a). The respondents' submissions about that paragraph are, therefore, no answer to the applicant's case to the extent that it relies upon the provisions of para (c) of s 74B(1).
940 The respondents' next point was that the purpose for which the applicant alleges that he acquired Vioxx tablets does not reflect his actual purpose at the time, as disclosed by the evidence. As to the latter, the respondents referred to the following passage in the applicant's witness statement:
I would always take anti‑inflammatory drugs as directed. In consulting with my doctor about taking a drug, I would try to find a balance between a good anti‑inflammatory effect and a low level of gastric discomfort.
They referred also to the following evidence given by the applicant under cross‑examination:
Can I suggest to you that as you over time took anti‑inflammatory drugs you saw yourself as really engaging in a process of taking the drugs because the benefit of them outweighed the identified and known disadvantages to you?---Yes.
Can you tell me this. Did any of the range of doctors who prescribed to you an anti‑inflammatory drug ever tell you, either because they volunteered it or because you asked, what risk, if any, these drugs had with respect to your cardiovascular system?---No.
None at all?---Not that I can remember, no.
If it was said it didn't cause you to retain it?---I can't remember it being said.
And the issue of whether there was any cardiovascular risk with respect to your taking of these anti‑inflammatories was therefore never an issue for you to weigh up?---I can't remember ever having that as a consideration, no.
So you were weighing up pain on the one hand as against no pain and gastrointestinal difficulties on the other?---Basically, yes.
And of course ability to work and do your work without interruption. Is that right?---Yes.
Notwithstanding their reference to these passages, the respondents did not identify the "particular purpose" for which, in their submission, the applicant did acquire Vioxx.
941 The terms of s 74B(1)(c) of the Trade Practices Act allow for a situation in which the acquirer makes known his or her purpose by implication. The implied purpose may be so made known either directly or through the intermediaries referred to in para (c) of subs (1). That such possibilities are allowed under the section introduces scope for the ex‑post formulation of purpose by reference to the needs of the particular litigation in which the remedy is being pursued. According to the respondents, that is exactly what the applicant is attempting to do in the present case. They submit that he has crafted an allegation of his own purpose tendentiously with an astute eye upon the outcome which he seeks in the case. They point out that the identification of purpose in s 74B(1)(c) is necessarily a subjective matter (see Rasell v Cavalier Marketing (Australia) Pty Ltd [1991] 2 Qd R 323, 330), and the applicant's evidence, set out above, provides no support for the notion that he had in his conscious thoughts the need to obtain a drug "the consumption of which would not lead to a material increase in the risk of suffering life‑threatening conditions".
942 The authorities show, however, that the putative acquirer does not need to have freedom from the particular defect consciously in his or her mind at the time of acquisition. Thus, for example, Dr Grant was not required to prove that he had in mind purchasing a pair of underpants that would not give him dermatitis: see Grant v Australian Knitting Mills Ltd [1936] AC 85. The fact that he contracted dermatitis from a chemical contained in the material of the garment which he wore justified the conclusion that the garment was not fit for the purpose of being worn as intended (ie against the skin). In the present case, if the applicant's purpose were no more than to obtain relief from the pain associated with arthritis (and for present purposes it does not matter whether it be osteo or rheumatoid), he need not also demonstrate that he had it in mind that Vioxx would not cause heart attacks. The debate would then move to the question whether, by reason of the association of Vioxx with heart attacks, Vioxx was unfit for the applicant's purpose. I consider that it is as clear, and as uncontroversial, as may be that the applicant's purpose in taking Vioxx was to obtain relief from his back pain without (so far as possible) gastrointestinal side‑effects. I am satisfied that his pleading fairly reflected the case which he ran in this regard, and that the respondents were left in no doubt as to the purpose for which he would contend (in his final submissions) that he consumed Vioxx.
943 On the other hand, I do accept the respondents' submissions that the applicant's allegation that his purpose was to consume Vioxx as an anti‑inflammatory drug the consumption of which would not lead to a material increase in the risk of suffering life‑threatening conditions is altogether too tendentious an identification of his purpose in taking Vioxx. He gave no evidence that he had such a purpose in that period. It may be said, I suppose, that the purpose of avoiding life‑threatening conditions may be assumed, but this would be, in my view, to make a statement about the applicant's unstated assumptions, rather than about his purpose. In point of fact, therefore, I reject the applicant's case that his purpose was to have a drug that did not give rise to a material increase in the risk of suffering life‑threatening conditions.
944 In my view, in a case such as the present where there is no express or clearly implicit expression of purpose that the consumer requires a product that is free of risk (or of increased risk, or materially increased risk, etc), the point at which the absence of risk becomes relevant is where the existence of the presumptively dangerous tendency of the goods in question compromises their fitness for the purpose in fact made known to the manufacturer. For example, a sunscreen lotion that was coincidentally attractive to wasps would be unfit for purpose as a sunscreen lotion. It would be quite artificial to enquire whether the consumer made it implicitly known to the manufacturer that he or she entertained the purpose of using a wasp‑free lotion. On the facts of the present case, the applicant's point must be that the tendency of Vioxx to contribute to the onset of cardiovascular disease justifies the conclusion that it was not reasonably fit for the purpose of providing relief from arthritic pain.
945 The respondents also submitted that the applicant's purpose was not "made known" to MSDA, as required by s 74B(1)(c). However, the only submission directly made on this subject was the following:
In these proceedings, there is no evidence that the Applicant's particular purpose for obtaining Vioxx (let along any Group Member's) was made known to the First Respondent. For example, Vioxx was at various times approved for the treatment of two indications, the symptomatic treatment of osteoarthritis and rheumatoid arthritis in December 1999 and January 2002 and there is no evidence whatsoever that it was ever made known to MSDA, in respect of any Group Member, for which approved indication Vioxx was prescribed.
This submission, contained in the respondents' final written submissions, was the subject of neither elaboration nor comment in oral submissions made on their behalf. If the respondents are to be understood as proposing that the applicant's purpose could not have been made known to MSDA under s 74B(1)(c) unless it knew that he was suffering from osteoarthritis or rheumatoid arthritis, I would have no hesitation in rejecting it. Relevantly to the context of the present case, the particular form of inflammatory disease for which the applicant required Vioxx was quite irrelevant to the kind of unfitness for purpose which he alleges. Vioxx was sold as a product to be consumed with a view to obtaining relief from the pain associated with arthritis. That purpose was inherent and self‑evident. It could not but have been made known implicitly to MSDA that the purpose of every person who was prescribed, and subsequently purchased, Vioxx was that purpose, much as the purpose of a householder who purchases milk is to consume it: Frost v Aylesbury Dairy Company Ltd [1905] 1 KB 608, 612, 614. It is true that (at least after January 2002) it may not have been known to MSDA whether a particular patient was suffering from osteoarthritis or rheumatoid arthritis but, for the reasons I have attempted to explain, that would be neither here nor there (much as the defendant in Frost need not have known the particular purpose to which the contaminated milk was to be put - drinking, cooking etc).
946 At this point it is convenient to return to the circumstance that Vioxx was a prescription‑only medicine upon which the respondents rely. In my view, this does put a particular complexion on the matter of "purpose" under s 74B(1)(c). In a case in which the consumer's purpose is to be implied by reason of the nature of the goods, the implication must, in my view, take account of the prescription which authorises supply of the goods, and of the fact that it has been written by a medical practitioner. The consumer's implicit purpose, in such a case, is not merely the achievement of the beneficial effect of the medicine. It is the achievement of that effect in accordance with the terms of the prescription and any advice or instructions that may be assumed to have been given by the doctor, consistently with the prescription. In a clear case, for example, if the doctor had informed the patient that the consumption of a particular medicine carried the real risk of stomach cramp, and if the patient nonetheless decided to take the medicine, his or her implied purpose would be to achieve the conventional beneficial effect of the medicine subject to that risk. It could not then be said that the medicine was not reasonably fit for the purpose as implicitly made known by the consumer.
947 The next point of significance in this respect is that it is the manufacturer to whom the consumer's purpose must be made known under s 74B(1)(c). In most cases, there will be no direct transaction as between the consumer and the manufacturer, and therefore no communication of the consumer's actual purpose. Such purpose as is implicit in the nature of the goods will, therefore, be the basis of the consumer's case. The question will be: considering all relevant circumstances, what communication of purpose as between the consumer and the manufacturer should be implied? In the case of a prescription medicine, those circumstances include those to which I referred in the previous paragraph. So far as the manufacturer's implied understanding of the consumer's purpose is concerned, it would, in my opinion, be wrong to omit consideration of any communication made by it to the doctor with respect to the purpose for which the medicine might be fit, or with respect to any adverse consequences of taking the medicine. Again to take a clear case, if the manufacturer had informed the doctor that the medicine carried the real risk of stomach cramp, it could not be implied as between the manufacturer and one of the doctor's patients (for whom a prescription had been written) that the latter's purpose was not qualified by reference to that risk.
948 As a matter of principle, it seems that what I have just said should be applicable as much in a case in which the doctor had not in fact advised the patient of the risk that would compromise the medicine's fitness for purpose as in a case where such advice had been given. That is because we are here concerned with the matter of implication. The question is not what the consumer said to the doctor, but what he or she implicitly "made known" to the manufacturer. It could not, in my view, be held that a manufacturer implicitly received a communication from a consumer save by reference to facts actually or constructively known to the manufacturer at the time. If the manufacturer had advised the doctor of the risk involved in the taking of a particular medicine, that the consumer's purpose was to derive the beneficial effect of the medicine unaffected by that risk could not, in my view, be implied by the circumstance that the consumer presented the doctor's prescription to a pharmacist in order to acquire the medicine.
949 The approach which I take to this question is, I think, similar to that taken by Kiefel J in Carey‑Hazell. In that case, a mechanical valve had been surgically inserted into the heart of the patient concerned. It was known that mechanical valves gave rise to the risk of thromboembolisms. Notwithstanding the administration of anti‑coagulants to counter that tendency, the patient did suffer thromboembolic events, and sued the Australian importer of the valve. Kiefel J rejected her case under s 74B. Her Honour said:
212 … The … valve cannot however be regarded as unfit for that purpose because there was a known risk that thromboembolisms might develop and cause injury of the kind the applicant suffered. The applicant has identified only that she fell within the category of persons who develop such a complication. The question whether goods which have a use are reasonably fit for it must be assessed not only by reference to the fact that they failed to accomplish their purpose, but also by reference to what a consumer could reasonably expect from the goods.
213 The evidence here clearly establishes that the risk in question was well known to medical practitioners. The applicant was advised of this risk, as I later discuss. In my view, for the reasons I give later it could not therefore have been reasonable for the applicant to expect that there was no prospect that the valve would cause the development of thrombi. This claim is not made out.
The essence of this passage, in my respectful view, is that the purpose which the consumer implicitly makes known to the manufacturer will necessarily take account of risks that were known to medical practitioners generally.
950 That brings me to the question whether the increased risk of myocardial infarction which I have held to be associated with the consumption of Vioxx was known to medical practitioners generally, or was known to Dr Dickman, either actually or by reference to communications made by MSDA to them or to him. The literal answer to all these questions must be no. MSDA did not know that Vioxx increased the risk of myocardial infarction by a factor of about 2, and it conveyed no information to Dr Dickman, or to the profession generally, about a risk of that order or of anything like that order.
951 The respondents, however, rely on the terms of the Product Information in this context. As to the situation before November 2001 (when the Product Information was amended), there was a note in the "Precautions" section to the effect that, in some trials, myocardial infarctions had been observed to occur (from any cause) in fewer than 0.1% of the patients taking Vioxx. This was not, in my view, the equivalent of a statement that Vioxx should be regarded as itself associated with a risk of myocardial infarction. The respondents did not submit otherwise. Down to November 2001, therefore, there is no way that the purpose implicitly made known to MSDA by the applicant could be regarded as subject to a proviso that a doubling of the risk of heart attack was acceptable.
952 The Product Information as amended in November 2001 provided two further, arguably relevant, pieces of information to medical practitioners who read it: (1) that a trial of Vioxx had shown a lower rate of serious cardiovascular thromboembolic adverse events for patients taking naproxen than for those taking Vioxx; and (2) that, in other trials, spontaneous reports of such events were similar as between Vioxx and non‑selective NSAIDs. The reader was advised to give consideration to those data in the case of an individual patient at risk for such events. Nothing was said here about the risks associated with the consumption of Vioxx as such (ie by reference to a situation in which the notional comparator was placebo). There was nothing to suggest that the consumption of Vioxx, as such, almost doubled the risk of myocardial infarction. Indeed, the earlier reference to which I have referred in the previous paragraph remained in the Product Information. I do not consider that the amended Product Information provided any basis for saying that the purpose of acquiring Vioxx implicitly made known by the applicant to MSDA was subject to a qualification that a doubling of that risk was acceptable.
953 Thus, although I reject the applicant's point that the purpose which he implicitly made known to MSDA was the consumption of a drug which did not lead to a material increase in the risk of suffering life‑threatening conditions, I also reject the respondents' point that his purpose, as so communicated, was qualified to an extent that made acceptable anything like a twofold increase in the risk of suffering a myocardial infarction.
954 The respondents' next point under s 74B called up the defence arising under para (b) of subs (2). They submitted that the applicant did not rely on MSDA's skill or judgment. Rather, he was said to have relied wholly on the skill or judgment of his treating practitioner, Dr Dickman. I note in this context that MSDA did not advance a defence under the second limb of subs (2)(b) (ie that it was unreasonable of the applicant to have relied on its skill or judgment).
955 Undoubtedly the applicant relied on the skill or judgment of Dr Dickman. But that is not the end of the matter. Neither is it the question posited by para (b) of subs (2). A consumer will often rely on the skill or judgment of a specialised retailer in deciding, for example, which brand or model of particular goods to purchase, but that circumstance is not inconsistent with the consumer at the same time implicitly relying on the skill or judgment of the manufacturer.
956 The requirement of s 74B(2)(b) is not that the consumer did not rely on the skill or judgment of the manufacturer, but that the circumstances show that he or she did not so rely. This proposes a highly objective approach to the matter of reliance. It is almost as though the legislature contemplated that a consumer might, ex‑post, give very self‑serving evidence about the matter. However, the paragraph operates by way of a defence. The applicant does not have to establish that he relied on MSDA's skill or judgment: see Vines v Djordjevitch (1955) 91 CLR 512, 519‑520; Chugg v Pacific Dunlop Ltd (1990) 170 CLR 249. At the core of the defence is the consumer's own state of mind at the relevant time. It would, in my view, be an unusual case in which a court would uphold the defence by reference to a matrix of circumstances which had not been put to the consumer in cross‑examination, or where it had not been put to the consumer that he or she did not in fact rely on the manufacturer's skill or judgment.
957 In the present case, the applicant was not, in cross‑examination, confronted with the circumstances said to justify the conclusion that he did not rely on MSDA's skill or judgment. Neither was it put to him that he did not so rely. Indeed, it is hard to see how the defence now sought to be advanced by MSDA is consistent with the flow of the following cross‑examination of the applicant:
It's right to say, isn't it, that as you understood it in May 2001 that Vioxx was a prescription medication that would, just like your anti‑inflammatories, relieve the pain from which you were suffering?---Correct.
But it would have an added benefit of addressing your gastrointestinal difficulties?---Correct.
You understood that it didn't have at that time - at that time your understanding was that such side effects as they had, whatever they were, would be no different to the anti‑inflammatoriesthat you had been taking?---Nodifferentotherthannogastric---
Correct but the disadvantageous side effects were no different than the anti‑inflammatory medications you had been taking and would have a particular benefit?---Yes.
As I have said, the applicant left no doubt but that he relied on the skill or judgment of Dr Dickman. If it were the respondents' case that the applicant did not, therefore, also rely on the skill or judgment of MSDA, I consider that such a proposition ought to have been put to the applicant directly; or at least the "circumstances" that would later be relied on to show that he did not so rely should have been put to him. Neither was done.
958 For the above reasons, I reject MSDA's reliance on s 74B(2)(b) of the Trade Practices Act.
959 For the sake of completeness, I observe that the respondents approached the question arising under s 74B(2)(b) as though the "consumer" there referred to was the applicant. No submission was advanced in the alternative against the prospect that I might find that the Vioxx tablets which the applicant consumed in the period immediately preceding his heart attack in December 2003 were obtained on a prescription written for his wife and that she, therefore, was, or may have been, the relevant "consumer". If so, to the extent that the applicant suffered loss or damage as a result of consuming the tablets, he would be the "other person" referred to in subs (1). The respondents did not deal with the question whether Mrs Peterson relied on the skill or judgment of MSDA.
960 Finally under s 74B, the respondents took issue with the applicant's submission that Vioxx was not reasonably fit for the purpose which he implicitly communicated to MSDA. Specifically, they proposed that, since prescription medicines notoriously had the potential to involve side-effects, Vioxx should not be regarded as unfit for purpose merely by reason of such a circumstance.
961 The applicant's case is that Vioxx was not fit for purpose because it gave rise to an increase in the risk of encountering potentially life‑threatening conditions. Objectively, I have found that Vioxx did give rise to about a doubling of the risk of suffering myocardial infarction, across a population. At the simplest level, there could be little dispute about the proposition that a drug for the relief of arthritic pain is not fit for that purpose if the consumption of it will cause the patient concerned to have a heart attack. That is not the present case, of course, but it serves as a base line for a consideration of the position of a drug which gives rise to a risk, or which increases a pre‑existing risk, of heart attack.
962 Section 74B is concerned with the objective fitness of goods for purpose, whether or not the circumstance presumptively preventing them from qualifying for that description was known at the time of supply. In Medtel Pty Ltd v Courtney (2003) 130 FCR 182, 206, [70], Branson J said (with assent of Jacobson J):
Section 74D, … calls for the quality, or fitness for purpose, of the goods to be measured against what it was reasonable to expect in that regard at the time of the supply of the goods to the consumer. That measurement must be undertaken, in my view, in the light of information concerning the goods available at the time of trial. However, the issue remains whether the goods were as fit for the relevant purpose as it was reasonable to expect at the time of their supply to the consumer.
Mutatis mutandis, the same approach is, in my view, required under s 74B. In the context of the present case, this means that the fitness of Vioxx for purpose must be assessed against the fact that it gave rise to an increase in the risk of myocardial infarction by a factor of about 2: see para 570 above.
963 I did not understand the respondents to contend that goods could not be regarded as unfit for purpose where all that was known was that they involved the risk of an adverse outcome (or an increase in a pre‑existing risk of such an outcome). Any such contention, in my view, could not stand alongside the judgment of the Full Court in Medtel, where a pacemaker which had not failed, and which was regarded by the primary judge as unlikely to fail, was held to be unfit for purpose because it had been made by a production process which was associated with an increased risk of failure. The respondents make the point, which I accept so far as it goes, that Medtel concerned a faulty product (or at least a potentially faulty product), whereas Vioxx tablets in the present case contained no manufacturing or like fault. This is, however, a distinction without a difference with respect to the point now under consideration. What Medtel demonstrates, in my view, is that the fact that goods give rise to a risk of an outcome of a seriously adverse nature is sufficient, other circumstances permitting, to justify the conclusion that the goods are not fit for purpose.
964 It seems clear that Vioxx was efficacious in the relief of arthritic pain, and would remain so notwithstanding that there might be substance in the applicant's allegation of increased risk. If the notion of purpose is viewed through a narrow prism, there is a sense in which it might be said that Vioxx was fitted for purpose because it provided that relief, whatever might have been the risks associated with its consumption. That is not, however, in my view, an appropriate way to view the concepts arising under s 74B(1)(d). In each case, the basic inquiry is whether the reasonable person would regard the fitness for purpose of Vioxx as compromised by its tendency to produce the unwanted secondary adverse effect. Or, put another way, would the reasonable person reject Vioxx as a suitable drug for the relief of pain if he or she were informed that consumption of it had been found, across a population of persons not shown to be obviously atypical, to double the risk of heart attack? Subject to the other matters with which I deal in these reasons, an inquiry such as this could yield only one answer: an affirmative one.
965 As I have indicated, the respondents submitted that a medicine is not unfit for purpose merely because it carries the risk of side-effects. It was said to be notorious (and the applicant himself accepted) that prescription drugs often carry such risks, yet they are regularly used to beneficial effect without any suggestion they are unfit for purpose or the like. According to the respondents, if Vioxx did carry a cardiovascular risk, that was in the nature of a side‑effect, and it did not mean that the drug was not reasonably fit for the purpose for which it was both prescribed and acquired. The respondents relied particularly on the judgment of Kiefel J in Carey-Hazell. Here I refer to the passages from her Honour's reasons set out in para 949 above. I do not think that her Honour's words stand as any authority for the sweeping proposition that the presence of adverse side-effects associated with an otherwise efficacious drug could never be such as to render the drug less than fit for the purpose within the meaning of s 74B(1)(d). It was an essential aspect of her Honour's reasoning that the risk which came home to the patient in question was the subject of broad knowledge within the medical profession. In the present case, the increase in risk which is alleged to have been associated with the consumption of Vioxx was not generally known.
966 That does not, however, dispose of the respondents' point that Vioxx should not be regarded as unfit for purpose merely because it had, or potentially had, a side‑effect. In my view, the point is not susceptible of a categorical resolution across all possible cases by reference to the characterisation of the unwanted tendency associated with Vioxx as a "side‑effect". The question will always be whether that tendency made Vioxx less than reasonably fit for purpose. As stated earlier, the applicant alleged that Vioxx was not reasonably fit for purpose because consumption of it led to an increase in the risk of suffering life-threatening conditions. I consider that it would be no answer to a case presumptively established under s 74B to say that the risk, or the increase in risk, was proper to be regarded as a side-effect. I think it quite improbable that any reasonable person, at the time of supply, would regard as satisfactory a response from the hypothetical pharmacist to the effect, "Don't worry, it's only a side‑effect such as most medicines have".
967 Related to the reasonableness of an expectation that prescription drugs often carry side-effects is, of course, the extent of information or warnings about the side-effect in question which are brought to the attention of the consumer or of his or her doctor. While I accept that the reasonable person in the street would be unsurprised to learn that a particular medicine − any medicine − has, or has the potential for, side-effects, I likewise consider that he or she would assume that such information or warnings would be so provided. The respondents did not tie this part of their submissions, however, to the provision by MSDA of any such information or warnings. They did make a submission about the present relevance of the Vioxx Product Information, and I have dealt with that aspect above.
968 For the above reasons, I am satisfied that, because it approximately doubled the risk of heart attack, Vioxx was not reasonably fit for the purpose implicitly made known to MSDA by the applicant. I express this conclusion without regard to the base-line risk of heart attack which the applicant had at the relevant times. Whatever that risk, in my view a doubling of it would disqualify Vioxx from reasonably meeting the applicant's implicit purpose. It follows that I shall uphold the applicant's case under s 74B of the Trade Practices Act, and turn presently to a consideration of compensation as is his entitlement under subs (1) of that provision.