Pharm-a-Care Laboratories Pty Ltd v Commonwealth of Australia

Federal Court of Australia|2010-11-05|Before: Mr J, Mr P, Flick J

The parties are to bring in short minutes of orders to give effect to these reasons. 2. The proceeding is stood over to 9.30 am on a date to be fixed. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. The text of entered orders can be located using Federal Law Search on the Court's website.

IN THE FEDERAL COURT OF AUSTRALIA NSW DISTRICT REGISTRY GENERAL DIVISION NSD 1991 of 2008

JUDGE: FLICK J DATE: 5 november 2010 PLACE: SYDNEY

REASONS FOR JUDGMENT 1 Now before the Court are two further Notices of Motion in the current proceeding - one filed on behalf of the First Respondent and the other filed by the Second to Sixth Respondents. Both Notices of Motion were filed on 19 October 2010. 2 The factual background to the dispute has previously been set forth and need not presently be repeated: Pharm-a-Care Laboratories Pty Ltd v Commonwealth of Australia (No 3) [2010] FCA 361, 267 ALR 494. The final hearing has been set down for three months commencing on 7 March 2011. A mediation is scheduled to commence on 15 November 2010. 3 The causes of action relied upon are currently set forth in the Applicant's Further Amended Statement of Claim as filed on 28 April 2010. A principal cause of action relied upon is the tort of misfeasance in public office. The matters raised by both Motions focus attention upon a document titled "Second Amended Particulars of the Further Amended Statement of Claim" ("the Second Amended Particulars document") filed on 27 September 2010. 4 In summary form the Respondents contend that some of the particulars provided are irrelevant to the mental element necessary to establish the tort of misfeasance and further contend that they are so imprecise that the Respondents are denied a proper opportunity of knowing the case being advanced against them. Orders are sought that the particulars giving rise to these problems should be "struck out". Alternatively, further and better particulars are sought. Notwithstanding the conclusions previously reached in Pharm-a-Care (No 3), orders are again sought that particular paragraphs of the Further Amended Statement of Claim should now be struck out. 5 Given the fact that Defences have been filed by all Respondents, the Applicant expresses some misgivings as to why the Motions are now pressed. 6 Resolution of the Motions in advance of the hearing, however, will necessarily have consequences in terms of the factual issues to be pursued and the admissibility of evidence and cross-examination at the final hearing. Resolution will also have consequences in terms of further discovery and, potentially, subpoenas directed to third parties. Whatever steps will give greater certainty to the issues to be pursued at the final hearing, and which can be conveniently resolved in advance of that hearing should not be now shunned. 7 Any order in respect to particulars - such as the orders now sought - is discretionary and the discretion is to be exercised to ensure that "the case of each of the parties is adequately exposed to the other": Police & Nurses Credit Society Ltd v Burgess Rawson (WA) Pty Ltd [2006] FCA 1395. French J (as His Honour then was) there said: [16] The function of particulars was described by Gleeson CJ in Goldsmith v Sandilands (2002) 190 ALR 370 at 371, where his Honour said: The facts in issue in a civil action case emerge from the pleadings, which, in turn, are framed in the light of the legal principles governing the case. Facts relevant to facts in issue emerge from the particulars and the evidence. The function of particulars is not to expand the issues defined by the pleadings, but "to fill in the picture of the plaintiff's cause of action with information sufficiently detailed to put the defendant on his guard as to the case he has to meet and to enable him to prepare for trial." [Bruce v Odhams Press Ltd [1936] 1 KB 697 at 712-13]. [17] What are "necessary" particulars of any claim, defence or other matter pleaded is a matter of judgment. The underlying principle is that the case of each of the parties is adequately exposed to the other. It is important to maintain a sense of balance in the detail of particulars sought and ordered. The provision of particulars should not be allowed unduly to increase the cost and delay associated with litigation. In contemporary commercial litigation where, frequently, the court will direct the filing of witness statements or affidavits on either side subject to the right to cross examination, the necessity for elaborate particulars and lengthy debates about them is even more questionable. Reference may also conveniently be made to the following oft-cited observations of Isaacs J in R v The Associated Northern Collieries (1910) 11 CLR 738 at 740 to 741: I take the fundamental principle to be that the opposite party shall always be fairly apprised of the nature of the case he is called upon to meet, shall be placed in possession of its broad outlines and the constitutive facts which are said to raise his legal liability. He is to receive sufficient information to ensure a fair trial and to guard against what the law terms "surprise," but he is not entitled to be told the mode by which the case is to be proved against him. 8 The source of the power to order the Applicant to provide further particulars was unquestioned: Federal Court Rules, Order 12 r 5. But the provision of further particulars would leave extant the particulars to which objection is now taken. The source of the power to "strike out" these particulars, however, was less certain. Reference was made to Order 11 r 16 - but that power is confined to a "pleading" and a "pleading" is defined by Order 1 r 4 as "including a statement of claim". It may well be that "particulars" do not fall within the ambit of the power conferred by Order 11 r 16. But whether that is so or not, Order 10 r 1, it is considered, would confer sufficient power to make an order that a party should not be permitted to conduct a "proceeding" upon the basis of particulars that may have been provided. Given the desirability of resolving the Motions quickly, the source of the power to "strike out" particulars has largely been assumed. 9 Although it would have been preferable to resolve the detailed written submissions which have been filed by all parties with far greater care than is presently possible, it is considered that the conclusions to be reached can now be fairly simply stated. To do so may do disservice to those submissions but will (hopefully) facilitate the imminent mediation and the final preparations of the case for hearing. Counsel for the Respondents also expressed some disquiet about being required to file all evidence prior to the Motions being resolved.

The Tort of Misfeasance and the Particulars Provided 10 The elements which must be made out to establish the tort of misfeasance have already been sufficiently addressed for present purposes: Pharm-a-Care (No 3) [2010] FCA 361 at [57] to [64], 267 ALR 494 at 508 to 511. It was there noted that the reach of the tort may be "undefined" but that it is well-established that the tort is "a deliberate tort in the sense that there is no liability unless either there is an intention to cause harm or the officer concerned knowingly acts in excess of his or her power …" (citing Northern Territory of Australia v Mengel (1996) 185 CLR 307 at 345 per Mason CJ, Dawson, Toohey, Gaudron and McHugh JJ). 11 In the present proceeding, it is alleged that one or other of the individual Respondents did not act "honestly or bona fide". Thus, for instance, one paragraph of the Further Amended Statement of Claim provides as follows: [81] In purporting to make the Pan Suspension, MacLachlan: (a) Did not honestly or bona fide consider or hold the belief that failure to suspend the Pan Licence immediately would create an imminent risk of death, serious illness or serious injury;'… … … It is thereafter alleged: [83] In the premises, the Pan Suspension was purportedly made by MacLachlan, not for a proper purpose, but for an ulterior purpose with the intent that harm be caused to the Injured Persons, or in reckless disregard of whether or not harm would be caused to the Injured Persons. 12 The Second Amended Particulars document contains detailed particulars (inter alia) in respect to paragraph [81(a)]. 13 One set of the particulars now provided addresses what is there termed "inconsistent treatment". One way in which the Applicant seeks to contend that the individual Respondents did not act "honestly or bona fide" is by establishing that they treated the Applicant in a manner very different to the manner in which other companies had been treated. The particulars provided to support this contention are as follows within paragraph 2 of the Second Amended Particulars document: Inconsistent Treatment JJ. The TGA had dealt with many other It was standard TGA policy for companies that had been the subject of audit reports containing multiple critical deficiencies, including laboratory fraud, and in one case leading to deaths from release of the product and in such cases:that: (i) They be Aallowed the submission of to submit a remediation work plan to rectify deficiencies. (ii) The work plans took could take many months or even years to be completed. (iii) The companies were allowed to continue to trade while the work plans were in train. (iv) The TGA did not issue a notice of intention to suspend with notice to such companies. (v) The TGA did not take multiple regulatory action against such companies. JJA The standard TGA policy in particular JJ above was applied to the following companies at least: … There are thereafter set forth some 19 named companies. 14 Another set of particulars provided in respect to paragraph [81(a)] seeks to contend that a further way in which it will be sought to establish that the individual Respondents did not act "honestly or bona fide" is by establishing that they either had actual knowledge of particular information or had access to that information. These particulars are as follows: OO. The Applicant alleges actual knowledge by Maclachlan of the matters particularised in each of the paragraphs above, save as to the matters in particulars F(i), (iii) and (iv), G(ii), H, I, J and JJA. PP. With respect to paragraphs F(i), (iii) and (iv), G(ii), H, I, J and JJA, and in the alternative to particular OO in respect of all paragraphs, the Applicant alleges Maclachlan had the means to know : (i) By making enquiry of relevant TGA personnel including GMP Auditors, doctors, scientists, staff of TGAL and each of the other Individual Respondents. (ii) By making enquiry of the records of the TGA with respect to Pan. (iii) By interrogating the "Task Nap" drive created within the TGA. (iv) By making enquiry of the audits of, and TGA responses to, other manufacturers. (v) By making enquiry of the practice and procedure (both written and unwritten) applied by the TGA. (vi) By reason of her position as director of the office of Devices, Blood and Tissues and as a delegate of the Secretary under Section 41 of the Act. 15 Although these particular instances are provided in respect to only one Respondent, they are repeated in much the same format for each of the other individual Respondents.

Inconsistent Treatment 16 It is considered that the particulars provided in such paragraphs as "JJ" and "JJA" should be struck out. 17 Some of the deficiencies relied upon by the Respondents, with respect, have greater merit than others. 18 Although it may be a mistake to focus too much attention upon the phrase "standard TGA policy" or even the word "policy" itself, there nevertheless remains an unacceptable uncertainty as to whether the Applicant is truly referring to an administrative policy or merely an administrative practice. Departure from a formally adopted policy, for no relevant reason, may assist the Applicant's case more than a mere departure from an administrative practice as to how officers of the Therapeutic Goods Administration may conduct themselves in some circumstances. The Respondents, however, should be informed as to such basic matters as: if the "standard TGA policy" is indeed a formally adopted policy that has some administrative force, where such a policy is to be found and any administrative "imprimatur" that has been given to it; whatever may be the status of the "standard TGA policy", when and in what circumstances it is applied and whether all officers or only some of the officers of the Therapeutic Goods Administration apply the policy; and in the event that it is not uniformly applied, the facts and circumstances taken into account when not applying it. 19 Further deficiencies which it is considered warrant paragraph "JJ' being struck out are the failure to identify: the terms of the "policy" or the circumstances in which the "policy" was applied; the facts or circumstances which brought other companies within the reach of the "policy"; and the facts or circumstances that brought the Applicant within the terms of the "policy". What has to be made clear is the manner in which it is alleged that: a failure to apply this "policy" to the Applicant, in circumstances where it has been applied to others, assists in a resolution of the honesty or bona fides of the individual Respondents. So much, it is considered, is not assisted by the provision of the existing particulars in respect to paragraph [81(a)]. The existence of a "policy" and a departure from that "policy" - without more - says nothing of relevance to the tort of misfeasance in public office. A "policy" that does not apply to the Applicant, without more, provides little (if any) assistance in resolving any fact relevant to the tort of misfeasance. A departure from a policy which has been applied to other companies in a like position to that occupied by the Applicant, may - if properly pleaded - go some way to making out the "intentional" element of the tort. But as presently particularised, they remain irrelevant. 20 By reason of the failure to give content to these matters, paragraph "JJ" should be struck out. The Applicant should nevertheless be given leave to provide such further particulars as it sees fit. 21 A separate reason for concluding that paragraph "JJ" should be struck out is a disturbing lack of certainty as to the case sought to be advanced. That uncertainty emerges from a number of different sources and is not answered by the terms of "JJ" itself. 22 Senior Counsel on behalf of the Applicant thus maintained that the practice or policy referred to in "JJ" was consistent with the approach taken in the policy referred to in paragraph [27] of the Further Amended Statement of Claim. That paragraph states as follows: 27. From at least 2000 to April 2003 the TGA had established practices and standard operating procedures under SOP 401.8 with respect to various matters including the conduct of audits, the identification and rectification of deficiencies in Good Manufacturing Practice ('GMP') and the exercise of powers under the TG Act, which provided, inter alia, (TGA Practice): (a) to conduct audits in accordance with the 1990 GMP Code: (b) to notify the subject of the results of the audit at the conclusion of the audit (including where necessary by written report within about 14 days of completion of the audit); (c) to invite explanation or justification of, or response to, any deficiency (including any critical deficiency) in GMP from the subject of the audit; (d) to consider any such explanation, justification or response; (e) to provide an opportunity to rectify or redress any deficiency (including any critical deficiency), in GMP unless the relevant TGA Member formed the view that there was an imminent risk of death, serious illness or serious injury. Of present importance is the qualification in paragraph [27(e)] that notice was to be given "unless the relevant TGA Member formed the view that there was an imminent risk of death, serious illness or serious injury". That qualification is itself mirrored in s 41(2) of the Therapeutic Goods Act 1989 (Cth). 23 But paragraph "JJ" does not contain a like qualification. The qualification is of importance. Any practice that may be followed in different circumstances may say little as to the mental element of the tort of misfeasance to be established in the present case. 24 Moreover, the case as particularised in "JJ" does not seem to sit comfortably with the case as articulated during the course of submissions. Thus, in part, it was then submitted on behalf of the Applicant: Then roman (iv), why do we need to say any more than, in those circumstances, "The TGA did not issue a notice to suspend without giving notice to companies"? Reference was then made to a part of the cross-examination of Ms MacLachlan in different proceedings before another Judge of this Court. That part of the cross-examination concluded: You wanted to deny Pan the chance to exercise its legal right to argue, successfully or unsuccessfully, for a stay on your proposed suspension; is that accurate? … Yes. Any practice or policy referred to in that part of the cross-examination also does not sit comfortably with the policy or practice referred to in "JJ". 25 Paragraph "JJA" warrants separate attention. There are two difficulties with that paragraph, namely: the number of companies already identified; and the reference to the policy being applied to those companies "at least". 26 Whatever merit may ultimately be found in this part of the Applicant's case obviously remains a matter for the final hearing. But it is respectfully considered that any merit the point has could (in all probability) be resolved by reference to significantly fewer companies than those already identified. To leave this particular as it is, without confinement as to the number of companies to which reference should be permitted to be made, would be oppressive. That oppression is only exacerbated by leaving the reference to "at least". 27 This further uncertainty is such as to provide only a further reason for striking out paragraph "JJA". 28 Separate from any conclusion as to paragraph "JJ", paragraph "JJA" should thus be struck out as oppressive. Again, leave is given to the Applicant to provide further particulars identifying significantly fewer companies than those presently identified. During an exchange with Senior Counsel for the Applicant during the hearing of the Motions, a potential number of 5 or 6 was suggested as perhaps being appropriate. Even that number may be greater than is necessary for the Applicant to advance this part of its case. 29 Unless this area of factual inquiry is tightly controlled, it is stating the obvious to acknowledge that any inquiry may prolong the final hearing set down to commence in March 2011 and have marginal relevance to the more fundamental issues to be resolved with respect to misfeasance and other claims. Even reference by the Applicant to a limited number of instances where it maintains the "standard TGA policy" was applied may only be productive of the Respondents instancing other cases where the "policy" was not applied. 30 Although the Applicant is thus not being precluded from seeking to advance its allegation that the individual Respondents did not act "honestly or bona fide" by reason of adopting a different approach to the Applicant than they did to other companies, such an allegation has a very real potential to unnecessarily lengthen an already lengthy hearing. "Trials within trial", to use the expression of the Respondents, are to be avoided. "Efficiency" in the resolution of the claims, in a manner which remains fair to all parties, is now a statutorily recognised "purpose" to be pursued by the Court and the parties alike: Federal Court of Australia Act 1976 (Cth), ss 37M and 37N.

The Means to Know 31 It is also considered that the particulars provided in such paragraphs as "PP" which assert that the individual Respondents had "the means to know" should also be struck out. 32 At present it is not possible to discern from either paragraph [81(a)] of the Further Amended Statement of Claim or the particulars now provided in paragraph "PP" how these particulars support an allegation as to lack of honesty or bona fides. A failure on the part of a respondent to avail himself of information readily available may, potentially, go to making out the mental element necessary for the tort of misfeasance. But speculation as to how such particulars may assume potential significance is not the task of either the Court or an opponent. It is neither the function of the Court nor an opponent to either draft or settle particulars provided: Gunns Ltd v Marr [2005] VSC 251. Bongiorno J there helpfully observed: [57] It is not the function of the Court to draw or settle a party's pleading. The Court is confined to the function of ensuring that pleadings are within the rules and fulfil the functions for which they exist. In particular, it must ensure that one party is not placed at a disadvantage by the failure of another to provide a proper, coherent, and intelligible statement of its case. … Not only must the pleading inform the defendants of the case they must meet now, but it must clearly set out the facts which the plaintiffs must assert to make good their claim with sufficient particularity to enable any eventual trial to be conducted fairly to all parties. Vague allegations on very significant matters may conceal claims which are merely speculative. If this be not the case, the plaintiffs must put their allegations clearly. Finally, the trial judge must, in due course, have some firm basis for making rulings on relevance. This is a very substantial set of claims and any trial will be a very complex one. The Court must ensure that the only claims which go to trial are those which the plaintiffs are able to set out in a coherent and detailed form. Concurrence is expressed with these observations. 33 In the present proceeding, one fundamental difficulty with the particulars provided in paragraph "PP", it is respectfully considered, is that they fail to: identify what it is said that the individual Respondents "had the means to know"; and identify such matters as the "TGA personnel", the "records" or the "TGA responses to other manufacturers" to which reference is made. These instances are not intended as an exhaustive statement of that which is missing from the particulars as presently framed. Reference in the written submissions filed on behalf of the Applicant to the other detailed and extensive particulars which have been provided in respect to paragraph [81(a)], with respect, only serves to divert attention away from what is not particularised in paragraph "PP" to that which is particularised elsewhere. The complaint of the Respondents is not directed to the other particulars which have been provided; the complaint is directed to that which is said to be missing from paragraph "PP". But the context in which the particulars as to "means to know" appear cannot be totally ignored. 34 In submissions, Senior Counsel on behalf of the Applicant maintained that that which it was said the Third Respondent had the "means to know" were all those matters previously set forth in the particulars. The submission then advanced was as follows: In the alternative to OO, the applicant alleges that MacLachlan had the means to know, but failed to find out each of the matters identified in paragraphs A to NN. That information could have been obtained by … So much, however, is not apparent from a mere reading of the particulars themselves. It should be made clear. 35 But it is considered that the Applicant should be given leave to provide such further particulars which address these deficiencies. 36 A further submission of the Respondents is not presently resolved. That submission went to the very core of the elements that need to be established to make out the tort of misfeasance. All Respondents contended that any allegation merely as to what the Respondents had the "means to know" is irrelevant to the tort of misfeasance. An allegation that a person has the "means to know" a particular matter is said to be simply irrelevant to the mental element of the tort of misfeasance. Upon this approach, such an allegation may be relevant to a case advanced in negligence - but not misfeasance. 37 And negligence alone is not sufficient to make out the tort of misfeasance. The "impermissibility" of intermixing concepts from the tort of negligence and that of misfeasance is said to be evident from the following observations of Brennan J in Northern Territory of Australia v Mengel (1995) 185 CLR 307 at 358: The plaintiffs submit that the requisite elements of the cause of action are satisfied by "constructive knowledge" of the absence of power to engage in particular conduct and foreseeability of the injury suffered by the plaintiff. This submission carries concepts familiar in the law of negligence into the tort of misfeasance in public office to which, in my opinion, those concepts are foreign. A public officer is appointed to his or her office in order to perform functions in the public interest. If liability were imposed upon public officers who, though honestly assuming the availability of powers to perform their functions, were found to fall short of curial standards of reasonable care in ascertaining the existence of those powers, there would be a chilling effect on the performance of their functions by public officers. The avoidance of damage to persons who might be affected by the exercise of the authority or powers of the office rather than the advancing of the public interest would be the focus of concern. Foreseeability of damage to another by one's own conduct is the factor which warrants the imposition of a duty of care to the other when engaging in the conduct. But the tort of misfeasance in public office is not concerned with the imposition of duties of care. It is concerned with conduct which is properly to be characterised as an abuse of office and with the results of that conduct. Causation of damage is relevant; foreseeability of damage is not. 38 And the importance of properly pleading a case involving an allegation of dishonesty, and the fact that such matters are not matters of mere pleading but matters of substance, was also adverted to by Lord Millett in Three Rivers DC v Bank of England (No 3) [2003] 2 AC 1 ("Three Rivers") at 291 where it was said: [184] It is well established that fraud or dishonesty (and the same must go for the present tort) must be distinctly alleged and as distinctly proved; that it must be sufficiently particularised; and that it is not sufficiently particularised if the facts pleaded are consistent with innocence: … This means that a plaintiff who alleges dishonesty must plead the facts, matters and circumstances relied on to show that the defendant was dishonest and not merely negligent, and that facts, matters and circumstances which are consistent with negligence do not do so. Thereafter it was further said at 291 to 292: [186] The second principle, which is quite distinct, is that an allegation of fraud or dishonesty must be sufficiently particularised, and that particulars of facts which are consistent with honesty are not sufficient. This is only partly a matter of pleading. It is also a matter of substance. As I have said, the defendant is entitled to know the case he has to meet. But since dishonesty is usually a matter of inference from primary facts, this involves knowing not only that he is alleged to have acted dishonestly, but also the primary facts which will be relied upon at trial to justify the inference. At trial the court will not normally allow proof of primary facts which have not been pleaded, and will not do so in a case of fraud. It is not open to the court to infer dishonesty from facts which have not been pleaded, or from facts which have been pleaded but are consistent with honesty. There must be some fact which tilts the balance and justifies an inference of dishonesty, and this fact must be both pleaded and proved. The observations of Lord Millett (at para [186]) have previously been cited with approval: Pharm-a-Care (No 3), supra, at [69]. Emphasis was thus rightly placed by the Respondents on those observations that stressed the need for particulars to be provided which are not merely consistent with honesty. 39 Notwithstanding the fact that the provision of further particulars going to this issue as to what the Respondents had the "means to know" may lengthen the hearing, the preferable course is to permit the opportunity to the Applicant to present all such evidence as may be directed to a properly particularised claim as to "means to know" and for the Applicant to then advance final submissions based on such evidence at the conclusion of the proceeding. It is not considered at this stage of the proceeding that a view can be formed with such certainty that the Applicant should be shut out from pursuing the factual issues sought to be raised by the particulars now in issue. But how such further particulars as may be provided go to the mental element of the tort of misfeasance should be made clear in any further particulars now to be provided. 40 Although the Applicant should not be shut out, the submissions of the Respondents as to the irrelevance of "means to know" are not without some force. An allegation alone that a person has the "means to know" is self-evidently not an allegation that a person has actual knowledge. Nor may an allegation that a person has the "means to know" of itself be sufficient to establish "reckless indifference": Roberts v Bass [2002] HCA 57, 212 CLR 1. In the context of a defamation case and qualified privilege, Gleeson CJ there observed: [13] … Acting (with the reservations earlier expressed) upon the common assumption that there are two categories of qualified privilege in relation to political communications, and that the present cases can and should be decided according to the law that applies to the category that existed before Lange, the test of malice must be whether the matter in question was published for the purpose that was said in Braddock v Bevins to attract the privilege, that is to say, the honest expression of views about a candidate for election. The fact that such views might be wrong-headed, or prejudiced, or carelessly formed, or even irrational, would not constitute, or demonstrate, malice. But it would be inconsistent with the purpose of the privilege to use the occasion, not for the honest expression of views, but for the publication of defamatory matter, knowing it to be false, or not caring whether it was true or false. Recklessness is a word sometimes used to describe the last-mentioned state of mind; but it does not simply mean carelessness, even in a high degree. It means "indifference to its truth or falsity". These are all matters which should be left to the Applicant to address. 41 Particulars as to what a party may have the "means to know" may be of assistance in resolving a claim as to negligence or an allegation of reckless indifference. But it is not considered that at this stage a view can be formed with such certainty that properly drafted particulars may not also go to an allegation of lack of honesty or a want of bona fides. Although the observations in particular of Lord Millett in Three Rivers are heeded, it is not considered that the particulars as to the "means to know" can properly be assessed divorced from such other particulars as have been provided in respect to paragraph [81(a)] of the Further Amended Statement of Claim. 42 It remains a matter for the Applicant whether it wishes to pursue this factual allegation as a particular of paragraph [81(a)] or whether it wishes to (perhaps) provide it as a particular to [83]. 43 Considerable care should in any event be exercised by the Applicant in re-casting its particulars. It may not be a sufficient response to simply assert that the individual Respondents had the "means to know" all of the matters previously particularised. Such a response may expose the Applicant to a future submission that such particulars would be oppressive. The duty cast by s 37N of the Federal Court of Australia Act 1976 (Cth) should be borne in mind such that only those matters which most immediately bear upon a lack of honesty or bona fides and only those matters of most immediate relevance to the action taken against the Applicant should be identified. 44 Counsel on behalf of the Second to Sixth Respondents, it should also be noted, repeatedly asserted that he did not advance any submission denying that "reckless indifference" may (if properly pleaded) make out the tort of misfeasance. But, in his submissions, "reckless indifference" had not been pleaded and - if such an allegation was to be made - it should be pleaded expressly. 45 It was not understood that the Applicant disagreed with the fundamental proposition that its claims to relief would ultimately be resolved by reference to such causes of action as may be made out by reference to the statements of material fact - and not by reference to the particulars.

The September 2010 Orders 46 On 8 September 2010 orders were made, including an order that the Applicant was to: "file and serve by 24 September 2010 amendments to the document entitled "Amended Particulars of the Further Amended Statement of Claim pursuant to Order 12 Rule 2, 3 and 5" (the Amended Particulars Document) identifying: … (e) the particulars requested in paragraphs 17 to 22 of the letter from Moray & Agnew to McLachlan Thorpe dated 30 August 2010." 47 The particulars sought in the 30 August 2010 letter may be broadly summarised as follows: Paragraph Number in Further Amended Statement of Claim & allegation Particulars sought [72] … Cesarin also agreed on the New Strategy. With whom did Cesarin agree on the New Strategy, when and how… [86(b)], [94(b)], [104(b)] and [112(b)] When the direction(s) were made and if made orally, the substance of what was said, by whom and when; and if made in writing, copies of relevant documents were sought. E.g., "In purporting to make the Pan Cancellation, Cesarin was … (b) acting at the direction of Slater and/or MacLachlan …". [130] In the alternative, in the premises: When did each of the Respondents named aid, counsel, direct or join in Misfeasances… (a) each of Slater, Tribe, Fraser and Cesarin aided, counselled, directed or joined in the Suspension Misfeasance; The facts, materials and circumstances which constitute the aiding, counselling, directing or joining by each of the Respondents named. (b) each of Slater, Tribe, Fraser and MacLachlan aided, counselled, directed or joined in …; and (c) each of Slater, MacLachlan, Tribe, Fraser and Cesarin aided, counselled, directed or joined in the Pan Warnings Direction Misfeasance. [133] Each of Slater, MacLachlan, Tribe and Fraser joined in formulating, recommending to, and/or instructing Cesarin ... When and how did each of Slater, MacLachlan, Tribe and Fraser join in formulating, recommending to and/or instructing Cesarin…

48 The Second Amended Particulars document provides a response to the requests made - but the Respondents contend those responses are inadequate. 49 One objection is that the Applicant has repeatedly provided in its response that it "will provide further particulars as appropriate prior to trial". Such a response is quite frequently provided by applicants, including a response that a party will seek to "rely upon any other matters which may emerge … at the trial which are relevant": Sims v Wran [1984] 1 NSWLR 317 at 329 per Hunt J. The reservation which the Applicant seeks to express in the answers it has provided is unexceptional. The real substance of the criticism advanced on behalf of the Respondents is more directed to the adequacy of the particulars that have been provided. If a further particular emerges which occasions prejudice to the Respondents, that is a matter which can be addressed if and when it emerges. 50 A second objection is directed to the response to the particulars provided in respect to paragraph [72] of the Further Amended Statement of Claim. This paragraph has previously been the subject of consideration: Pharm-a-Care (No 3). There rejected was a submission that that paragraph of the then Amended Statement of Claim was "at least as defective" as the pleading in Charlie Carter Pty Ltd v The Shop, Distributive and Allied Employees' Association of Western Australia) (1987) 13 FCR 413. The reasons then went on to state: [100] ….when paragraph [72] is read in the context of the entirety of the pleading - or at least so much of it as is specifically referred to or incorporated in paragraphs [127] to [131] - it is considered that Mr Cesarin is adequately put on notice as to the case being advanced against him. To so conclude is not to say anything about the need for further particulars to be provided. [101] Taken in the context of the Amended Statement of Claim, it is considered that material facts are set forth such that paragraph [72] cannot be said to be either a conclusion (as opposed to a statement of material facts) or a statement so general in nature as to fail to inform Mr Cesarin of the case he has to meet. A conclusion that an identified paragraph of a pleading should not be struck out, it is considered, does not necessarily say anything as to whether particulars provided at a later date in support of such a pleading are adequate or whether further particulars should be ordered. Nor does it say anything as to whether such particulars as may be provided thereafter establish a deficiency in a pleading such that it should be struck out - a statement of material fact which is susceptible of being properly particularised may become (for example) an abuse of process if the only particulars provided expose the irrelevance of the allegation to the cause of action being advanced. The conclusion previously reached in Pharm-a-Care (No 3) thus says little as to the issue now before the Court. 51 The response to the request for particulars in respect to paragraph [72] that was made now states that Mr Cesarin is said to have "agreed on the New Strategy with the other Individual Respondents between about March and 28 April 2008" and that the agreement was "oral" and made in person. But left unstated is (for instance) what was said. Notwithstanding the fact that the Respondents have been provided with some detail as to the allegation being made sufficient to inform them in part as to the case to be advanced, it is nevertheless considered that further particulars should be provided as to the content of the oral agreement, being particulars as to "the substance of what was said, by whom and when". Given the importance that the pursuit of the "New Strategy" assumes in the case being advanced by the Applicant, and the seriousness of the allegations being made, it is considered that the Respondents should be provided with as much certainty as possible as to the case against them. Difficulty is also expressed as to the particular that Mr Cesarin is said to have made the agreement "with the other individual Respondents." Given the different roles played by one or other of the individual Respondents at different times, it is of importance that the time and manner in which agreement is said to have been reached with each Respondent should be particularised. 52 An objection to such particulars as have been provided in respect to paragraphs [86(b)], [94(b)], [104(b)] and [112(b)] raises a different concern. In attempting to provide particulars in furtherance of the allegations made, the Applicant has identified an email dated 28 March 2003. The Respondents maintain, however, that the reference to that email "is simply mistaken". Whether that is so or not can be resolved later. If that email is thus left at present to one side, there has been no proper response to the particulars sought in respect to these paragraphs. There has been no identification of the time when the directions were said to have been given, other than to say that they occurred "at times and dates presently unknown". The response provided, it is respectfully considered, is not adequate. Further particulars should be provided as sought by the individual Respondents on 30 August 2010. The time at which the directions are alleged to have been given cannot be left at large; nor can the manner in which the directions were given and the substance of those directions. 53 Paragraph [130] is an allegation made in the alternative to paragraph [129] that (inter alia) "each of Slater, Tribe Fraser and Cesarin aided, counselled, directed or joined in …" various conduct. There is considered to be no objection to a response to a request for particulars which simply seeks to incorporate or make reference to particulars provided elsewhere. But the difficulty with the response as now provided is that there is a deficiency in the particulars purportedly provided elsewhere. Particulars should be provided as sought on 30 August 2010. 54 Paragraph [133] attracts the same conclusion as has been reached in respect to paragraph [130]. The further particulars which are sought should be provided.

Parliamentary Privilege 55 One further contention advanced primarily on behalf of the Commonwealth, but supported by all Respondents, was that evidence adduced in respect to some of the further particulars would breach the Parliamentary Privileges Act 1987 (Cth) ("Parliamentary Privileges Act"). 56 This contention may be traced back to paragraph [84] of the Further Amended Statement of Claim and the particulars provided in respect to that paragraph. 57 Paragraph [84] provides as follows: Further, or in the alternative, MacLachlan purportedly made the Pan Suspension with the knowledge that the power to make it did not exist, or in reckless disregard as to whether or not the power to make it existed. One of the particulars provided in support is expressed as follows: By at least April 2003, employees of the Commonwealth were preparing amendments to the Therapeutic Goods Act to rectify purported gaps in the regulatory powers, including to allow action against a licence or company if a person relevantly associated was not a fit or proper person. The case for the Applicant, again in very summary form, is that the individual Respondents knew that they did not have the power to take the action they did as against the Applicant. That lack of power is evidenced in part, on their case, by the steps they were taking to secure the legislative amendments to give them the power they knew they lacked. If such an allegation could be made out, that could assist their claim as to misfeasance. 58 In respect to this part of the case, the submission of the Commonwealth was that "[a]ny attempt to support the relevant particulars in this case would inevitably and necessarily give rise to unlawfulness. That is because the particulars on their face betray the relevant purpose, being a purpose that attracts section 16(3)". 59 Section 16 of the Parliamentary Privileges Act relevantly provides as follows: Parliamentary privilege in court proceedings (1) For the avoidance of doubt, it is hereby declared and enacted that the provisions of article 9 of the Bill of Rights, 1688 apply in relation to the Parliament of the Commonwealth and, as so applying, are to be taken to have, in addition to any other operation, the effect of the subsequent provisions of this section. (2) For the purposes of the provisions of article 9 of the Bill of Rights, 1688 as applying in relation to the Parliament, and for the purposes of this section, proceedings in Parliament means all words spoken and acts done in the course of, or for purposes of or incidental to, the transacting of the business of a House or of a committee, and, without limiting the generality of the foregoing, includes: (a) the giving of evidence before a House or a committee, and evidence so given; (b) the presentation or submission of a document to a House or a committee; (c) the preparation of a document for purposes of or incidental to the transacting of any such business; and (d) the formulation, making or publication of a document, including a report, by or pursuant to an order of a House or a committee and the document so formulated, made or published. (3) In proceedings in any court or tribunal, it is not lawful for evidence to be tendered or received, questions asked or statements, submissions or comments made, concerning proceedings in Parliament, by way of, or for the purpose of: (a) questioning or relying on the truth, motive, intention or good faith of anything forming part of those proceedings in Parliament; (b) otherwise questioning or establishing the credibility, motive, intention or good faith of any person; or (c) drawing, or inviting the drawing of, inferences or conclusions wholly or partly from anything forming part of those proceedings in Parliament. 60 In the absence of agreement between the parties, and in the absence of (for example) an agreed statement of facts, reluctance was expressed at the outset of the hearing of the two Motions as to the prudence of resolving this submission divorced from the factual context in which it would arise at the final hearing. The purpose being pursued by the individual Respondents in taking action against the Applicant, it is expected, will give rise to significant factual controversy. In the absence of some compelling reason to do so, it is considered best to leave the submissions as to parliamentary privilege to be resolved when more is known about that factual controversy. 61 Counsel on behalf of the Commonwealth quite properly accepted that a failure to resolve this submission in advance of the hearing would not have any real impact on the conduct of the final hearing. Compared to the other issues to be resolved, this issue would give rise to little additional evidence. 62 In such circumstances, the resolution of these submissions is best left to later. There remains, however, convenience in resolving the issue prior to the final hearing if possible. To do so would mean that there is one less issue needing to be resolved during what will already be a lengthy hearing. 63 To assist in the potential early resolution of the present submission, there should be an identification of all such documents as potentially fall within the ambit of s 16(3). Presumably such documents will be the subject of affidavit evidence to be filed. Whether it is then possible to resolve the submission by reference to that affidavit evidence and in advance of the final hearing can be later assessed.

Certification 64 Order 11 r 1B of the Federal Court Rules provides as follows: Pleading prepared by lawyer (1) If a pleading is prepared by a lawyer representing a party, the pleading must, when filed, be accompanied by a certificate in accordance with Form 15B signed by the lawyer. (2) The certificate required by subrule (1) may be incorporated in the pleading that is being certified. Form 15B in turn provides as follows: I (name of legal practitioner) certify to the Court that, in relation to the pleading dated (insert date) filed on behalf of the (party, eg applicant, respondent), the factual and legal material available to me at present provides a proper basis for: (a) each allegation in the pleading; and (b) each denial in the pleading; and (c) each nonadmission in the pleading. Date: Lawyer representing the (party, eg, applicant, respondent) 65 Given the seriousness of the allegations being advanced by the Applicant, and also the seriousness attaching to the Respondents' defences to those allegations, it is considered that all parties should be required to certify their pleadings as required by Form 15B. 66 The Applicant, it should be noted, has already certified its Further Amended Statement of Claim. 67 At that point of time when proper particulars have been provided by the Applicant, it is considered that the Applicant should nevertheless be required to provide further certification in respect to its Further Amended Statement of Claim as then particularised. Form 15B, it is readily appreciated, is confined to a certification in respect to "each allegation in the pleading". But an "updated" certification should be provided when the "lawyer representing" the Applicant can again consider the case as then particularised. 68 The desirability of such an "updated" certification is only increased when consideration is given to whether some of the particulars that have been provided are more in the nature of a statement of "material facts", which should have been pleaded, rather than "particulars". 69 Equally, those appearing for the Respondents can then better form a view as to their responses to the allegations being made and also provide an updated certification.

Conclusions 70 Although specific reference has been made to only some paragraphs of the Second Amended Particulars document, it was common ground that the Motions could be resolved by reference to those paragraphs alone. If those paragraphs were to be struck out, other like paragraphs would suffer the same fate. But no present attempt has been made to trace through the correlation of those paragraphs which suffer the same fate. 71 It is concluded that some of the paragraphs of the Second Amended Particulars document should be struck out but that the Applicant should be extended an opportunity to re-cast those particulars if it saw fit to do so. It has also been concluded that further particulars should be provided in respect to some paragraphs. Such orders, it is concluded, would then "fill in the picture" of the Applicant's case and would put the Respondents "on … guard as to the case [they] have to meet and to enable [them] to prepare for trial". Such particulars, it is concluded, will effect a "sense of balance" between imposing upon the Applicant the discipline of now formulating the manner in which it is to advance its claims and ensuring that the Respondents know the case they have to meet and providing some structure within which the relevance of future evidence may be gauged. 72 The individual Respondents, it should be noted, opposed an opportunity being given to the Applicant to provide yet further particulars. The "state of the proceedings and the previous history of amendments to the Second Amended Particulars Document", it was submitted, counted against such an opportunity being given. Given the fact that all of the Applicant's evidence has already been filed other than an expert's report, the ability to finally provide proper particulars cannot now be questioned. Whether any further opportunity will be extended may be doubted - but that remains a matter to be resolved if and when it arises. It is hoped that there will be no necessity to resolve such a regrettable application, if indeed it is ever made. 73 No paragraph of the Further Amended Statement of Claim should be struck out. 74 No difficulty is foreseen in the parties drafting short minutes of orders to give effect to these reasons. If a particular matter has been overlooked, it can be raised when the proceeding is re-listed to make those orders. In the absence of any submission to the contrary, it is not considered that anything turns upon whether particulars are "struck out" or whether directions are made precluding the proceeding from continuing upon the basis of those particulars. 75 The short minutes of orders should also require the Applicant to provide such further particulars as it may wish to provide within a relatively short period of time, perhaps 14 days. 76 The Respondents have been substantially successful in obtaining the relief sought in their Motions. Although short submissions will be entertained if the Applicant wishes to oppose an order for costs, it is considered that the Respondents should be entitled to an order for costs of and incidental to the hearing of their Motions. The proceeding is to be stood over to 9.30 am on either 15 or 22 November 2010 - the intention being not to interfere with the mediation that is to commence on 15 November 2010. One or other date can be chosen by the parties which suits their joint convenience.

ORDERS 77 The Orders of the Court are: 1. The parties are to bring in short minutes of orders to give effect to these reasons. 2. The proceeding is stood over to 9.30 am on a date to be fixed. I certify that the preceding seventy-seven (77) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Flick.

At a glance

Court

Decision date

Before

Catchwords

Source

Catchwords

Judgment (14 paragraphs)

Parties

Legislation Cited (3)

Cases Cited (9)