SmithKline Beecham (Australia) Pty Ltd v Chipman

REASONS FOR JUDGMENT 1 The fourth respondent, Synthon AU Pty Ltd ("Synthon"), seeks leave to appeal from a decision of a judge of the Court made on 31 July 2003 whereby his Honour dismissed Synthon's notice of motion filed 27 June 2003. That motion sought orders that Professor William N Charman was not an independent expert for the purposes of cl 6 and cl 8 of the schedule to the orders made by his honour on 6 March 2003 and sought further orders that Synthon's confidential documents and confidential information, as defined in the schedule to those orders, should not be disclosed to, or inspected by, Professor Charman. 2 The background to the dispute between the parties is set out in an earlier interlocutory judgment of the primary judge: SmithKline Beecham (Australia) Pty Ltd v Chipman [2002] FCA 674 and also in his honour's judgment in respect of which leave to appeal is being sought; SmithKline Beecham (Australia) Pty Ltd v Chipman [2003] FCA 796. In short, SmithKline Beecham (Australia) Pty Ltd ("SmithKline") has sought to review a number of decisions relating to a request by Synthon for registration or approval of its product "Arrox", subsequently renamed "Ausrox", on the Australian Register of Therapeutic Goods pursuant to s 25 of the Therapeutic Goods Act 1989 (Cth). 3 On 16 October 2002 the primary judge made orders for discovery and inspection which orders set out in a schedule a regime or protocol for the discovery and inspection of confidential documents. In short, the parties' confidential documents were only to be disclosed to the respective solicitors and counsel for the parties and any "independent expert" nominated by them. 4 That regime or protocol was amended by a further order of his Honour on 6 March 2003, but not in any material respect relevant for present purposes. 5 SmithKline has nominated Professor Charman as an independent expert for the purposes of inspection on its behalf of Synthon's confidential documents. Evidence was led before the primary judge to the effect that Professor Charman had a number of associations relating to SmithKline which resulted in him not being an independent expert for the purposes of his Honour's orders. The evidence related to the following matters: · Professor Charman has been a non‑executive director of Sigma Company Limited ("Sigma"), a large publicly listed pharmaceutical company from whom he receives annual director's fees; · Sigma has a contract manufacturing relationship and other business links with the SmithKline group of companies; · There is a strategic alliance agreement between Sigma and the SmithKline group of companies; · Sigma currently manufactures on behalf of the SmithKline group a number of its products; · Approximately 12% of Professor Charman's research activities within the past five years are, or have been, funded by SmithKline or companies within its group; · Professor Charman held some 12,833 shares in Sigma. 6 Synthon's primary submission before his Honour was that the evidence demonstrated that Professor Charman was not in any sense "independent". 7 His Honour rejected that submission and dismissed the motion with the result that, unless there is a successful appeal in respect of that order, Professor Charman will have access to Synthon's confidential documents. Whether or not he is ultimately called as a witness in the substantive proceeding remains to be seen. 8 Synthon submitted that leave should be granted because, in accordance with accepted principles, the decision was attended by sufficient doubt to warrant its reconsideration by a Full Court and substantial injustice would result if leave were refused supposing the decision to be wrong: Décor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397. 9 Although that is the test to be applied in considering whether leave should be granted in respect of an interlocutory decision, the High Court has made it clear that in matters of practice and procedure a court ought to be reluctant to grant leave because of the consequences for the proper administration of justice of interference with orders on practice and procedure matters of judges at first instance: Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc (1981) 148 CLR 170 at 177. 10 Synthon submitted that the judgment was not one as to a mere point of practice and procedure because, if it stood, it would permit an expert witness closely involved with trade rivals of Synthon to have access to Synthon's secret, scientific information. To that extent it was submitted that Synthon's substantive rights were affected by his Honour's decision in which circumstances leave would be granted more readily: Décor Corporation Pty Ltd v Dart Industries Inc (supra) at 400; Minogue v Williams (2000) 60 ALD 366 at [19]; Johnson v Cameron (2002) 195 ALR 300 at 302. 11 I am satisfied that the judgment sought to be appealed from is one in respect of a matter of practice and procedure as it clearly relates to an interlocutory matter of procedure. However, I take into account the consequences of the order if left undisturbed. 12 Synthon submitted that his Honour's reasons contained two errors, the first being that the relevant documents were deemed to be confidential documents by the orders made on 16 October 2002 and 6 March 2003 and they were to be accessed only by relevant legal advisers and "independent experts". It was submitted that the confidentiality of the documents should have been treated by his Honour as given and not being the subject of analysis as to their nature in the manner in which his Honour did so analyse them. The confidential information was "commercially sensitive" in that Synthon's trade rivals could benefit from secret, scientific and technical information to Synthon's detriment. 13 His Honour appeared to draw a distinction between "commercially sensitive" material such as marketing strategies, business plans, financial data and any prospective customer base and information of a scientific or technical nature which had been provided to the authority by Synthon in relation to Ausrox (see [2003] FCA 796 at [22]). For the purposes of the argument, I am prepared to accept that, to the extent to which his Honour appeared to be forming a judgment that the information to be disclosed to Professor Charman might not in fact be properly described as "confidential", this approach gives rise to an issue which is of sufficient doubt to warrant reconsideration by a Full Court. Having regard to the order which his Honour had made, there were to be discovered documents that were not confidential and discovered documents which were confidential. If they were not confidential no issue arose. If they were confidential then his Honour's order provided for limited access to relevant legal advisers and "independent experts". 14 The second error was said to be the principle applied by his Honour in considering whether access should be given to those documents agreed to be confidential. SmithKline had submitted before his Honour that the matters of affiliation and identification in relation to Professor Charman went to the weight to be accorded to such evidence he might give, and not to his testimonial competence. His Honour placed reliance upon the judgment of the Victorian Court of Appeal in FGT Custodians Pty Ltd v Fagenblat [2003] VSCA 33 in which it was held that an expert witness called on behalf of the respondent, who was his brother‑in‑law, was not disqualified from giving evidence. 15 His Honour said at [35]‑[37]: "[35] The question to be addressed in relation to the notice of motion which is before this Court is not, in terms, whether Professor Charman should be permitted to give evidence at the trial of this proceeding. It is rather whether he should be given access to Synthon's confidential material. Nonetheless, as I have indicated, and as the parties all accepted, the answer to that question effectively determines the issue of his testimonial competence. [36] In my opinion, Professor Charman should be permitted access to Synthon's confidential material. I do not accept Mr Maryniak's contention that there is a significant risk that, were he to see that material, he would subconsciously, or inadvertently, misuse it. [37] The links between Mr Borsky, the expert witness, and Mr Fagenblat, his brother-in-law, in FGT Custodians Pty Ltd were significantly greater than those between Professor Charman and SmithKline. The fact that the Court of Appeal accepted Mr Borsky as a competent witness (though querying the wisdom, in that case, of calling him) strongly suggests, to my mind, that Professor Charman should not be precluded from seeing the Synthon material." 16 His Honour then concluded in pars [39] and [40]: "[39] He has significant links to Sigma, and that company has significant links to SmithKline. He also has some direct links to SmithKline, although they might be thought to be relatively inconsequential. Nonetheless, the evidence as a whole does not persuade me that there is any basis for denying SmithKline the opportunity to call Professor Charman as its expert in the trial of this proceeding. He is not, by reason of those links, a person who cannot be trusted. Nor is he a person likely to make inadvertent use of technical data. [40] In substance, the matters raised by Mr Maryniak go to weight, and not to the potential admissibility of his evidence. There is nothing in the Evidence Act 1995 (Cth) to suggest that he should be precluded from giving expert evidence in this proceeding. If his giving evidence requires him to see confidential material, upon appropriate undertakings, then that course should be followed. For these reasons the notice of motion must be dismissed." 17 For the purposes of the argument I am prepared to accept that his Honour's approach in these passages is attended by sufficient doubt to warrant reconsideration by a Full Court. The issue before his Honour was whether Professor Charman was an "independent expert" for the purposes of the confidentiality regime and protocol laid down in his Honour's earlier orders. It is arguable that it was premature to consider the testimonial competence of Professor Charman, which was the issue in FGT Custodians Pty Ltd v Fagenblat (supra). 18 It was also put on behalf of Synthon that his Honour did not address what was described by counsel as a commonsense issue that when confidential information is obtained by a person it is difficult to put it out of the person's mind and that, in the passages to which I have referred, his Honour's findings do not take those matters into account. I am satisfied that his Honour did address that issue and that it does not give rise to any issue of sufficient doubt so as to warrant reconsideration. 19 However I consider that the test laid down in Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc (supra) and Décor Corporation Pty Ltd v Dart Industries Inc (supra) and in subsequent cases is cumulative, so that it is not enough to find that the decision is attended with sufficient doubt to warrant reconsideration by a Full Court. In order for leave to be granted I have to be satisfied that substantial injustice will result if the matter is left as it is; particularly on matters of practice and procedure, albeit matters affecting substantive rights. 20 The injustice relied upon by Synthon is that its confidential information will be made available to, and might be used by, a trade rival. However, the likelihood of that situation actually arising to Synthon's disadvantage is speculative and remote. Counsel for Synthon made it clear before his Honour that he was not suggesting that Professor Charman would deliberately misuse Synthon's confidential material in breach of his undertaking to the Court. Rather the submission was put on the basis that the risk was that he would subconsciously or inadvertently misuse that material. 21 However, his Honour did not accept that there was any appreciable risk of Professor Charman subconsciously misusing Synthon's scientific data, see par [16] above. 22 I do not accept Synthon's submission that his Honour's findings and reasoning as to there being no appreciable risk of Professor Charman subconsciously or inadvertently misusing the information he might obtain from confidential documents was adversely affected by the apparent distinction it was submitted his Honour drew between information which was commercial and material which was technical and scientific. His Honour's reasoning was based substantially on the links between Professor Charman and Sigma and between Sigma and SmithKline to which I have referred in the earlier passage quoted. 23 I am therefore not satisfied that substantial injustice would result if leave were refused, supposing his Honour's decision to be wrong. 24 The application for leave to appeal will be refused. I certify that the preceding twenty‑four (24) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Goldberg.