The Pharmacy Guild of Australia v Ramsay Health Care Ltd

The parties

1. The first plaintiff, the Pharmacy Guild of Australia (to which I will refer as the Pharmacy Guild) is an organisation of employers registered under s 26 of the Fair Work (Registered Organisations) Act 2009 (Cth) (statement of claim at [1]) and describes itself as the national peak body representing the majority of community pharmacies Australia wide, with approximately 1,400 members that are community pharmacies based in NSW (statement of claim at [2]).
2. The second, third and fourth plaintiffs are owners and operators of pharmacies in the Nowra, Grafton and Caringbah areas: the second plaintiff (Mr George Parker) owns and operates Priceline Pharmacy Nowra; the third plaintiff (South Grafton Pharmacy Pty Ltd), as the trustee of the South Grafton Pharmacy Trust, operates two pharmacy businesses in Grafton (Southside Pharmacy and Masen's Pharmacy); and the fourth plaintiff (Ms Jennifer Nelson) owns and operates Coady's Pharmacy in Caringbah (see statement of claim at [5], [7]-[8], [11]).

The impugned franchise arrangements

1. The first defendant, Ramsay Health Care Limited (Ramsay Health), is said by the plaintiffs to operate a "global hospital business" comprising a large number of hospitals and day-surgery facilities in Australia and elsewhere(statement of claim at [13]). It is alleged that, since 2013, the "ongoing growth strategy" of Ramsay Health within Australia has included establishing a franchise network of community pharmacies known as the "Ramsay Retail Franchise Network" (statement of claim at [16]). (The content of this allegation mirrors statements made by Ramsay Health in its own published reports.)
2. The second defendant, Ramsay Pharmacy Retail Services Pty Ltd (Ramsay Retail), is a wholly owned subsidiary of Ramsay Health and is described by the plaintiffs as the franchisor for all "Ramsay Retail" branded community pharmacies established in Australia since 2013 "and continuing" (statement of claim at [18]).
3. The third defendant, Pharmire Pty Ltd (Pharmire), is the owner of business names associated with certain "Ramsay Branded pharmacy community businesses" in New South Wales at Grafton and Shoalhaven (Ramsay Pharmacy Parkside Plaza; Ramsay Pharmacy Grafton and Ramsay Pharmacy Shoalhaven) (statement of claim at [26]). It is alleged in the statement of claim that, in total (including the three to which I have just referred), Pharmire is the owner of the business names associated with eight pharmacy businesses around Australia (statement of claim at [27]).
4. The fourth defendant, Lekarna Pty Ltd (Lekarna), is the owner of business names associated with certain other "Ramsay Branded" pharmacy businesses" in New South Wales and the owner of the Ramsay Branded community pharmacy businesses in East Albury and Caringbah (Ramsay Pharmacy East Albury and Ramsay Pharmacy Caringbah)(statement of claim at [33]-[34]). It is alleged in the statement of claim that, in total (including the two to which I have just referred), Lekarna is the owner of the business names associated with 14 pharmacy businesses around Australia.

The present proceedings

1. In essence, the allegations made by the plaintiffs in the present proceedings are that: the first and second defendants (the Ramsay defendants) are not permitted to own or otherwise have a financial interest within the meaning of cl 2 of Schedule 5F to the Health Practitioner Regulation National Law (NSW) (National Law) in a pharmacy business (as defined in cl 1 of Schedule 5F) in NSW by reason of cl 5 of the said schedule) (statement of claim at [15]; [19]); in the case of each of the third and fourth defendants, the named individual who is the sole director and shareholder of that defendant, and employed by that defendant (Mr Nigel McFadden and Mr Peter Giannopoulos, respectively) is not permitted to own or otherwise have a financial interest within the meaning of cl 2 of Schedule 5F to the National Law in more than five pharmacy businesses (as defined in cl 1 of Schedule 5F to the National Law) in NSW by reason of cl 9 of the said schedule (statement of claim at [25]; [32]); and that there has been a contravention of those prohibitions by reason of the franchise arrangements here impugned. Contravention of cl 5(1) of Schedule 5F of the National Law (set out at [152] below) is an offence which may give rise to a penalty of up to a maximum of 100 penalty units.
2. Both of the individuals referred to above are employed by Ramsay Health in senior positions: Mr McFadden is the Regional Pharmacy Manager (NSW) of Ramsay Health and Mr Giannopoulos is the CEO of Ramsay Retail and the National Pharmacy Manager of Ramsay Health.
3. The plaintiffs contend that, from about 2013, the Ramsay defendants established a network of pharmacy business which operated under franchise arrangements entered into by Ramsay Retail, as franchisor, with entities owned by registered pharmacists as franchisees (statement of claim at [36]); that the pharmacy businesses established by the Ramsay defendants in Australia are under a "consistent franchise model" (the Franchise Model) (statement of claim at [38]), as there particularised; and that each of the Pharmire and Lekarna businesses was operated at all material times in accordance with franchise arrangements entered into with Ramsay Retail (statement of claim at [43]; [56]).
4. It is alleged that the payments payable under the respective franchise arrangements are such that Pharmire and Lekarna (the franchisees) are not likely to make any, or any ordinary, commercial profit from the said pharmacy businesses; and that the payments payable under those arrangements have the effect of diverting all or substantially all of the profits of the businesses to the Ramsay defendants (statement of claim at [45], [46]; [58], [59]). It is further alleged that the franchise arrangements permit the Ramsay defendants to govern the fit-out of the premises associated with the Pharmire and Lekarna businesses and give the Ramsay defendants control over the product range to be supplied from the businesses (statement of claim at [47], [48]; [60]; [61]).
5. The plaintiffs then plead (in general terms) to the existence of certain loan arrangements and a call option in relation to the said businesses (statement of claim at [49], [50]; 62], [63]).
6. The pleading culminates in the allegations that, as a result of the franchise arrangements, the profits derived by the franchisees from the respective business have been, and will be, substantially less than would ordinarily be expected to be derived from comparable businesses and that, in aggregate, the payments required by the franchise arrangements "together with the remainder of" the arrangements give the Ramsay defendants a direct or indirect monetary or financial interest in the respective pharmacy businesses within the meaning of the National Law (statement of claim at [51], [52]; [64], [65]).
7. At various points of the pleading, it is stated that further particulars will be provided following discovery. In oral submissions, as adverted to above, it was frankly conceded that without disclosure the plaintiffs cannot provide those further particulars.
8. In their statement of claim, the plaintiffs seek declaratory relief in relation to the alleged contraventions.
9. By prayer 1, they seek a declaration that Ramsay Health and/or Ramsay Retail holds a financial interest, within the meaning of cl 2 of Schedule 5F to the National Law, in the pharmacy businesses (the Ramsay branded pharmacies), the business names of which are owned by Pharmire (those being the businesses identified at [26] of the statement of claim).
10. By prayer 2, the plaintiffs seek, further or alternatively, a declaration that Ramsay Health and/or Ramsay Retail holds a financial interest, within the meaning of cl 2 of Schedule 5F to the National Law, in the Ramsay branded pharmacies, the business names of which are owned by Lekarna (those being the businesses identified at [34] of the statement of claim).

Earlier proceedings

1. Relevant to the second of the bases on which the defendants seek the relief set out in their amended notice of motion (i.e., that the proceedings are an abuse of process by reference to the unlawful use of the defendants' confidential information) is the chronology of events relating to the circumstances in which, prior to the commencement of the present proceedings, the Pharmacy Guild obtained certain information in relation to the franchise arrangements in respect of Pharmire and Lekarna.
2. That chronology relevantly commences with an application by Pharmire in about December 2016 to the Pharmacy Registration Board of Western Australia (WA Board) seeking registration in Western Australia of premises in Claremont, WA, as a pharmacy under s 42 of the Pharmacy Act 2010 (WA) (WA Pharmacy Act). That application was refused on 21 June 2017 (though reasons for the decision - the WA Decision - were not published until 20 July 2017; see below).
3. In the period from about April to June 2017, various applications were made by the Pharmacy Guild in New South Wales, Queensland and Victoria for access to documents in relation to the Ramsay defendants: from the Pharmacy Council of New South Wales (Pharmacy Council) (see Exhibit 1, p 175ff); from the Department of Health in Queensland (see Exhibit 1, p 206) and from the Victorian Pharmacy Authority (VPA), respectively.
4. So, for example, in April 2017 the Pharmacy Guild made an access application pursuant to the Government Information (Public Access) Act 2009 (NSW) to the Pharmacy Council requesting, inter alia, records relating to any application made to the Pharmacy Council that included the names Ramsay, Lekarna, Peter Giannopoulos, Pharmire and Nigel McFadden (the GIPA Application). Also on or about 19 June 2017, the Pharmacy Guild lodged a freedom of information request with the VPA, seeking documents concerning the Ramsay defendants and Lekarna (Victorian FOI Request).
5. In relation to each of those applications, objection was made by Ramsay Retail to the disclosure of the documents sought (see below in relation to the Victorian FOI Request). (The relevance of this, in general terms, goes to whether the Pharmacy Guild, if not the plaintiffs as a whole, was or ought to have been aware of the confidentiality of information provided to it under a similar freedom of information request in WA to which I refer below.)
6. The relevant application, for present purposes, was an application made on 19 June 2017. The Pharmacy Guild lodged with the WA Board a freedom of information request under the Freedom of Information Act 1992 (WA) (WA FOI Act), seeking documents relating to the Ramsay defendants and Pharmire (Guild FOI Request). The Ramsay defendants were not informed of the Guild FOI Request at the time (nor, relevantly, were they informed of the provision in about October 2017 of documents to the Pharmacy Guild pursuant to the Guild FOI Request - see below - until some time after that occurred).
7. On 20 July 2017, the WA Board published its reasons for refusing Pharmire's application for registration (the WA Decision). Those reasons were not publicly available (nor were they in evidence on the present application - see T 70.29).
8. On 10 August 2017, the VPA advised the Pharmacy Guild of its decision in relation to the Victorian FOI Request, namely to grant access to a limited number of documents. On the same day, the VPA wrote to Lekarna, advising Lekarna of the Victorian FOI Request and of its decision, and seeking Lekarna's views as to whether the documents VPA did not propose to disclose contained trade secrets or other commercially sensitive information. On 31 August 2017, Lekarna provided a response to VPA's letter of 10 August 2017.
9. Meanwhile, on 17 August 2017, Pharmire sought review of the WA Decision in the State Administrative Tribunal of Western Australia (WA Tribunal), pursuant to ss 67 and 68 of the WA Pharmacy Act (the WA Tribunal proceedings). In compliance with the relevant Practice Note (see further below), Pharmire filed a copy of the WA Decision with its application for review to the WA Tribunal.
10. On 6 October 2017, the WA Board gave the Pharmacy Guild notice of its decision in respect of the Guild FOI Request (Guild FOI Decision). The notice stated that it had decided to grant "limited access to documents fulfilling the scope of [the Pharmacy Guild's] request" (the scope of which had apparently been amended by agreement of the Pharmacy Guild after the initial application was lodged) (see Exhibit 1, p 216).
11. Pursuant to the Guild FOI Decision, the WA Board released to the Pharmacy Guild a number of volumes of documents, including a copy of the WA Decision (see the affidavit sworn 31 October 2018 of the defendants' solicitor, Mr David Cowling at [25]). The Guild FOI Decision stated that access was provided "subject to redaction of exempt matter" and that three categories of exempt matter were identified in the documents, namely: personal information; trade secrets, commercial and business information; and legal professional privilege. (The Pharmacy Guild emphasises that the documents were heavily redacted. It is not disputed that various of the documents were redacted but as those documents were not in evidence on the present occasion it is not possible to form any view as to the scope of the redactions. The plaintiffs had served a notice to produce seeking production of the Released Documents but, after objection thereto, did not press the notice to produce at this stage. Nothing, however, here turns on the degree of redaction of the documents to which the plaintiffs were given access.) Relevantly, the Ramsay defendants were not made aware of the Guild FOI Decision at this time (nor was Pharmire).
12. The solicitors acting for the Pharmacy Guild (Bartley Cohen) subsequently confirmed to the Ramsay defendants' solicitors that the initiating application by Pharmire for a review of the WA Decision (which attached the unredacted WA Decision) was provided to their firm by the WA Tribunal on 1 December 2017 (see the letter dated 28 May 2018 from Bartley Cohen to Swaab Attorneys (the 28 May 2018 letter) - Exhibit 1, p 140; referred to at [42] below).
13. On 12 December 2017, the Pharmacy Guild made an interim application seeking leave to intervene in the WA Tribunal proceedings (Exhibit 1, p 132). By reference to the chronology set out in the 28 May 2018 letter referred to above, it is said that directions were made for the Pharmacy Guild to serve submissions and an affidavit in support of it obtaining leave to intervene, which it did on 21 December 2017.
14. On 20 December 2017, the VPA sent the Pharmacy Guild a further decision in respect of the Victorian FOI Request, again proposing to release some documents but not others (Victorian FOI Decision).
15. Again according to the 28 May 2018 letter, a directions hearing in relation to the Pharmacy Guild's interim application for intervention in the WA Tribunal proceedings was held on 16 January 2018. It is said that the legal advisers for Pharmire were present on that occasion.
16. On 2 February 2018, the solicitors acting for Ramsay Retail in WA (Swaab Attorneys) wrote to the WA Board stating that Ramsay Retail (there described as the intended franchisor of Pharmire in relation to the Claremont pharmacy) had become aware of orders made on 30 January 2018 in relation to the interim application of the Pharmacy Guild to intervene in the proceedings (and that the intervention application would be heard with the substantive hearing on 23-24 April 2018 and that the Pharmacy Guild would be provided with documents relating to the proceedings). The letter stated that "many of the documents provided to … the Board contain confidential and commercially sensitive information of [Ramsay Retail] and its pharmacy franchise system" and sought confirmation that the WA Board would not "hand over" any documents to the Pharmacy Guild relating to the WA Tribunal proceedings "pending resolution of these matters or further order [of the WA Tribunal]" (a request there said to be made in order to maintain the status quo while Ramsay Retail considered its position and obtained advice). At this stage, the Ramsay defendants were still not aware of the making of the Guild FOI Request nor that documents had already been provided to the Pharmacy Guild pursuant to the Guild FOI Decision.
17. On 16 February 2018, the Pharmacy Guild sought review of the Victorian FOI Decision in the Victorian Civil and Administrative Tribunal (VCAT).
18. On 6 March 2018, Pharmire withdrew its application in the WA Tribunal proceedings (the costs of those proceedings not being determined until September 2018 - see [58] below).
19. On 20 April 2018, King & Wood Mallesons, acting for the Ramsay defendants, applied under the WA FOI Act for access to documents dated on or after 1 January 2015 including in relation to any application by any Ramsay Franchisees (defined to include Lekarna and Pharmire) or compliance with the WA Pharmacy Act by Ramsay (defined to include Ramsay Health and its wholly owned subsidiaries) or any of its franchisees; and communications between the WA Board and the Pharmacy Guild containing any reference to various matters or topics (including Ramsay, any of the Ramsay Franchisees; franchise pharmacies or structures; and any "complex structures") (Exhibit 1, p 172).
20. In May 2018, the Ramsay defendants first became aware that the Pharmacy Guild had obtained a copy of the WA Decision from the WA Board. On 25 May 2018 (Exhibit 1 p 137), Swaab Attorneys wrote to the Pharmacy Guild, asserting that a copy of the WA Decision had been "illegally obtained"; that it had been used for purposes other than the WA Tribunal proceedings (namely, "for the preparation of legal advice about their client's franchise system in states other than Western Australia"); asserting that the Pharmacy Guild (as a third party who received the documents aware that they had come from legal proceedings) was bound by the Harman undertaking (Harman v Secretary of State for the Home Department [1983] 1 AC 280); requesting that the Pharmacy Guild explain how it had obtained a copy of the WA Decision or any other documents related to the above proceedings; and demanding the immediate return of all hard copies of documents in connection with the said proceedings and the destruction of all electronic copies of the same (and provision of certification of such destruction) by 5pm (Sydney time) on 28 May 2018. A similar demand was made by letter dated 28 May 2018 to the solicitors advising the Pharmacy Guild (Bartley Cohen) (Exhibit 1, p 139).
21. By letter dated 28 May 2018 (Exhibit 1, p 140) (the 28 May 2018 letter to which I have referred above), the Pharmacy Guild's solicitors responded to the Ramsay defendants' solicitors, disclosing (among other things) that the Pharmacy Guild had obtained a copy of the WA Decision from the WA Tribunal on 1 December 2017 and had been provided by the solicitors for the WA Board on 19 January 2018 with a copy of the WA Board's Statement of Facts Issues and Contentions filed 1 December 2017. The letter also stated that, on 19 January 2018, a copy of Pharmire's submission and an affidavit opposing the Pharmacy Guild's application for leave to intervene had been served (pursuant to an order made on 30 January 2018) and that, on 5 February 2018, at the solicitors' request, the associate to the President of the WA Tribunal had provided copies "of seven various orders [sic] and correspondence listed as documents relating to the Proceedings on the [WA Tribunal] website". (The Ramsay defendants contend that these additional documents contained confidential information of the Ramsay defendants.)
22. In the letter dated 28 May 2018, the Pharmacy Guild's solicitors stated that: The Guild has not used the Decision or any other documents relating to the Proceedings [i.e., the WA Tribunal proceedings] obtained during the course of the Proceedings for the preparation of advice by our firm about "your client's franchise system in States other than Western Australia". The only documents relating to Western Australia which have ever been used for the purpose of legal advice outside of Western Australia have been heavily redacted documents obtained as a result of an earlier freedom of information application. There has never been any consideration or use of documents obtained as a result of the Proceedings.
23. Without conceding an obligation so to do, and said to be "as a matter of abundant caution and to avoid any possible further misunderstanding on [the solicitors' or their client's part]", the letter stated that the Pharmacy Guild would proceed to "destroy all hard and electronic copies of documents obtained by the Guild during the course of the Proceedings", as too would the solicitors and Counsel briefed in the proceedings.
24. This letter was the first notification to the Ramsay defendants of the fact of the making of the Guild FOI Request (and that documents had been provided to the Pharmacy Guild pursuant to that application).
25. The Ramsay defendants say that the documents provided pursuant to the Guild FOI Request to the plaintiffs were documents given to the WA Tribunal by Pharmire under the compulsion provided by the relevant Practice Notes; and that, in those circumstances, the Pharmacy Guild may not use the documents without leave of the WA Tribunal (citing Hearne v Street (2008) 235 CLR 125; [2008] HCA 36 at [96]). The Ramsay defendants say that no such leave has been sought; and they argue that it is implicit in the Pharmacy Guild's later agreement to destroy the relevant documents that it accepted that such documents are not available for use. (The Pharmacy Guild does not accept that such a concession is implicit in its agreement not to use, and to destroy, the documents, which, as noted above, was expressed to be in the absence of any obligation to do so.)
26. There was further correspondence between the respective solicitors as to the demands that had been made in relation to the Guild FOI Request (see the letter dated 8 June 2018 from the Ramsay defendants' solicitors to Bartley Cohen (8 June 2018 letter) and the letter dated 12 June 2018 responding thereto - Exhibit 1, p 167; 169). (Pausing here, the 8 June 2018 letter assumed some significance in the course of argument, as going to the issue as to that to which it had alerted the Pharmacy Guild at a time prior to commencement of the present proceedings. In reviewing that letter, it must be noted that there is reference made to two categories of documents in that letter: first, in points 1-4 of the letter, documents obtained by the Pharmacy Guild in the course of the WA Tribunal proceedings (i.e., the proceedings in which Pharmire had sought the review of the WA Decision), said by Swaab Attorneys to have been obtained by an ex parte communication with the WA Tribunal in breach of the relevant solicitors' and legal profession conduct rules; and, second, in point 5 of the letter, copies of the Guild FOI Request, correspondence with the "disclosing party" and all documents received as a result of that application. Only the latter category of documents was the subject of the reference in the Pharmacy Guild's lawyers' 28 May 2018 letter (see above at [43]) (i.e., the reference in that letter to the "heavily redacted documents obtained as the result of an earlier freedom of information application" said to have been the only information used for the purpose of any legal advice outside WA).)
27. On 13 June 2018, Swaab Attorneys wrote to the WA Board, requesting urgent advice as to: any documents concerning the Ramsay defendants, and/or Ramsay franchisees, released by the WA Board pursuant to freedom of information requests made by the Pharmacy Guild (including details of the date(s) of release and full copies of the documents released in the exact form in which they were released); and the steps taken by the WA Board to comply with s 33(2) of the WA FOI Act prior to the release of any such documents (Exhibit 1, p 170).
28. On 27 June 2018, the WA Board responded to the FOI request made by the Ramsay defendants (the Ramsay FOI Decision). With the Ramsay FOI Decision, the Ramsay defendants were provided with: a redacted copy of the freedom of information request dated 19 June 2017 which had been submitted by the Pharmacy Guild (i.e. the Guild FOI Request); a notice of the WA Board's decision in respect of the Guild FOI Request dated 6 October 2017 (the Guild FOI Decision); and four or five volumes of documents (the exact number of which is inconsistently described in the material before me) (the Released Documents) (see Exhibit 1, p 210). The Ramsay defendants say that the Released Documents were substantially similar to those provided to the Pharmacy Guild in the WA Tribunal proceedings.
29. The Ramsay defendants emphasise that they were not informed by the WA Board of the Guild FOI Request in June 2017 nor of the Guild FOI Decision in October 2017 (nor was Pharmire so informed) until the Ramsay FOI Decision in June 2018.
30. Following receipt of the Ramsay FOI Decision, on 28 July 2018 the Ramsay defendants sought internal review of the Guild FOI Decision (Exhibit 1, p 225), seeking, inter alia, the setting aside of the Guild FOI Decision.
31. On 13 August 2018, the plaintiffs commenced these proceedings by way of summons, seeking declarations in the same terms as those now sought in the statement of claim (i.e., to the effect that the Ramsay defendants held financial interests, within the meaning of cl 2 of Schedule 5F of the National Law, in pharmacies owned by Pharmire and Lekarna).
32. On the same day (13 August 2018), the Pharmacy Guild filed an application to withdraw its application to VCAT, stating its reason for applying to withdraw as being that: [a]s of this week, the Guild is pursuing other legal avenues in another jurisdiction which has now overtaken the utility of these VCAT proceedings. Accordingly, the Guild does not wish for the parties or the Tribunal to expend any further time on this proceeding.
33. On 17 August 2018, the solicitors for the Ramsay defendants wrote to the Pharmacy Guild (Exhibit 1, p 233): informing it that the Released Documents were confidential; putting the Pharmacy Guild on notice that the Ramsay defendants considered the Pharmacy Guild owed them a duty of confidence in respect of the Released Documents; and demanding that the Pharmacy Guild undertake not to make further use of the Released Documents.
34. The Pharmacy Guild's solicitors responded on 23 August 2018 (Exhibit 1, p 236), stating that, as far as they knew, the Ramsay defendants had not sought review of the Guild FOI Decision and, as such, it could not be said that the Pharmacy Guild ought to have known that the documents (i.e., the Released Documents) "are now apparently confidential in nature and should not have been released, when your own client did not consider that to be the case or allege that to be the case until now, some ten months after the decision". The letter stated that whether the Ramsay defendants intended to pursue the WA Board to have the Guild FOI Decision overturned was a matter between them and the WA Board and that "we will await any direction from the [WA Board] or otherwise accordingly". (In my opinion, the letter did not respond in any meaningful way to the demands that had been made as to use of the Released Documents. Moreover, to the extent that complaint is made as to a ten month delay in the making of an allegation of confidentiality, this assumes, incorrectly, that the Ramsay defendants became aware of the Guild FOI decision at or about the time it was made.)
35. By letter dated 27 August 2018 (Exhibit 1, p 237), the Ramsay defendants' solicitors informed the Pharmacy Guild's solicitors that the Ramsay defendants had not been provided with notice either directly or indirectly of the WA Decision in October 2017 and that notice of the decision was first received by the Ramsay defendants on 28 June 2018. The letter confirmed that an urgent application for internal review of that decision had been lodged with the WA Board. The letter asserted that the Pharmacy Guild knew or ought to have known upon receipt of the WA Decision and the documents disclosed by the WA Board that the documents were and remained confidential (but that, even if that were not accepted, the Pharmacy Guild had clearly been put on notice of the asserted obligations of confidence by the letter dated 17 August 2018). The letter reiterated the demand that the Pharmacy Guild undertake not to make further use of the Released Documents.
36. On 3 September 2018 (Exhibit 1, p 239), the Pharmacy Guild agreed not to make any further use of the Released Documents until the outcome of the internal review, or the provision of three business days' notice of its intention to do so. (Pausing here, it is implicit in this that the documents had not already been destroyed, as the Pharmacy Guild had stated it would proceed to do back in May 2018 - see [44] above.)
37. On 5 September 2018, the WA Tribunal handed down its decision on the issue of costs of the review proceedings that had been withdrawn by Pharmire - Pharmire Pty Ltd and the Pharmacy Registration Board of Western Australia [2018] WASAT 88 (the costs decision). The relevance of this is that the costs decision was accessible by and hence available to the public and contained certain information as to the franchise arrangements (see further below).
38. On 13 September 2018, the defendants requested that the plaintiffs serve a statement of claim in these proceedings. By letter dated 24 September 2018, the plaintiffs declined to agree to serve a statement of claim and instead proposed that the defendants give disclosure of certain documents. On 5 October 2018, the defendants responded to the proposal that they provide disclosure in these proceedings, noting that the documents the Pharmacy Guild sought to have disclosed were similar to the Released Documents. On 9 October 2018, the plaintiffs responded, enclosing a copy of the notice of motion they proposed to file seeking such disclosure.
39. In October 2018, the WA Board rejected the Ramsay defendants' application for internal review of the Guild FOI Decision. On 12 October 2018, the Ramsay defendants wrote to the Pharmacy Guild's solicitors (Exhibit 1, p 240), informing them of the internal review decision and requesting that the Pharmacy Guild extend its agreement not to make further use of the Released Documents until 19 October 2018, while the Ramsay defendants considered their options.
40. On 15 October 2018 (Exhibit 1, p 242), the Pharmacy Guild declined to extend its agreement not to make further use of the Released Documents. On the same day, the plaintiffs filed their notice of motion in the present proceedings seeking discovery of documents from the defendants, including: sale agreements, franchise agreements, loan agreements and options.
41. On 16 October 2018, the Ramsay defendants' solicitors wrote to the Pharmacy Guild (Exhibit 1, p 243) foreshadowing the commencement of proceedings in the Supreme Court of Western Australia to seek: orders directing the Pharmacy Guild to deliver up documents containing, or produced using, the Ramsay defendants' confidential information; injunctions restraining the Pharmacy Guild from using the Ramsay defendants' confidential information; and judicial review of the Guild FOI Decision. In the letter of 16 October 2018, the Ramsay defendants also requested undertakings not to use the Released Documents, or any documents containing or produced using information obtained from those documents. The Pharmacy Guild did not provide those undertakings on 16 October 2018.
42. The Ramsay defendants then commenced proceedings in the Supreme Court of Western Australia (the WA proceedings) on 16 October 2018 against the Pharmacy Guild, seeking relief for breach of confidence; seeking judicial review of the Guild FOI Decision; and, by way of Chamber Summons, seeking an interlocutory injunction restraining the Pharmacy Guild from using or disclosing the Released Documents or any documents containing information obtained from a Released Document.
43. On 24 October 2018, the plaintiffs in the proceedings in this Court were ordered to file a statement of claim.
44. On 25 October 2018, the Pharmacy Guild wrote to the Ramsay defendants in relation to the WA proceedings that had been commenced by the Ramsay defendants, proposing that the proceedings be resolved by it destroying the Released Documents and any documents produced using those documents. The Pharmacy Guild also offered to "extend its agreement of 3 September 2018" until 29 October 2018.
45. On 29 October 2018, the Ramsay defendants responded to the letter dated 25 October 2018 from the Pharmacy Guild. By this letter, the Ramsay defendants proposed that the WA proceedings be resolved by the Pharmacy Guild undertaking to the Court that it had destroyed all copies of the Released Documents and any documents produced using the Released Documents, other than those in the public domain. In addition, the Ramsay defendants proposed that the Pharmacy Guild undertake that it had procured the destruction of such documents disclosed by the Pharmacy Guild to third parties. The Ramsay defendants indicated that the parties ought to agree that the only documents said to be in the public domain by reason of the WA Tribunal proceedings were the hearing transcript and the WA Tribunal's published reasons.
46. On 30 October 2018, the Pharmacy Guild's solicitors responded, proposing limited amendments and setting out a form of the undertaking the Pharmacy Guild was prepared to proffer. One of the amendments proposed by the Pharmacy Guild was that it would not request public authorities to destroy documents provided to them by the Pharmacy Guild.
47. On 31 October 2018, the Ramsay defendants' solicitors responded to the Pharmacy Guild's letter of 30 October 2018, requesting the Pharmacy Guild's solicitors to inform them of the names of any authorities to which the Pharmacy Guild had provided documents that would be within the scope of the undertaking, as well as details of what was disclosed.
48. On 31 October 2018, the defendants filed their notice of motion (now superseded by the amended notice of motion) in the proceedings in this Court, seeking orders: dismissing the proceedings under r 13.4 of the UCPR; or staying the proceedings pending the resolution of the WA Proceedings.
49. On 1 November 2018, the Pharmacy Guild's solicitors responded to the letter of 31 October 2018, stating that the Pharmacy Guild had not provided the Released Documents to anyone except its legal advisers. The letter stated that the Pharmacy Guild had communicated its views, by reference to those documents, "at a ministerial/departmental or authority level" in NSW. The letter confirmed that the Pharmacy Guild was content with the Ramsay defendants' definition of the documents said to be in the public domain by reason of the WA Tribunal proceedings.
50. On 2 November 2018, the Ramsay defendant's solicitors responded to the Pharmacy Guild's letter of 1 November 2018. Relevantly, in respect of the resolution of the WA proceedings, the Ramsay defendants proposed a limitation to the undertaking, such that the Pharmacy Guild would not be required to procure the destruction of documents by the NSW Pharmacy Council and other NSW Ministers, Departments or Authorities.
51. On 6 November 2018, in correspondence to the Ramsay defendants' solicitors, the Pharmacy Guild's solicitors set out the terms of the undertaking the Pharmacy Guild would give to the Court.
52. On 7 November 2018, the Ramsay defendants responded to the Pharmacy Guild's letter of 6 November 2018, proposing that the Pharmacy Guild write to the relevant third parties notifying them of the confidentiality of the documents and requesting their destruction or marking as confidential. There followed correspondence between the parties as to the appropriate communication to third parties, on 8 November 2018 and 9 November 2018.
53. On 12 November 2018, the Pharmacy Guild provided an undertaking to the Ramsay defendants (and the Supreme Court of Western Australia) that it had: destroyed all copies of documents released to the Pharmacy Guild by the WA Board on 6 October 2017; destroyed all copies of documents produced in reference to or otherwise disclosing the contents of the Released Documents; and procured the destruction of any such documents disclosed to third parties, other than the NSW Pharmacy Council, NSW Minister for Health, the Hon. Brad Hazzard MP, and the NSW Department of Health.
54. The plaintiffs filed their statement of claim in the present proceedings on 26 November 2018.
55. On 30 November 2018, the proceedings commenced by the Ramsay defendants against the Pharmacy Guild in Western Australia were dismissed by consent.
56. On 3 December 2018, the defendants filed their amended notice of motion in these proceedings, seeking an order that the statement of claim be struck out, in addition to the same orders as the original notice of motion.
57. On 20 February 2019, the Supreme Court of Western Australia made orders by consent quashing the decision of the WA Board to give the Pharmacy Guild access to the documents. (The plaintiffs emphasised in the course of oral argument that this involved no hearing on the merits; the defendants say that it is not open to the plaintiffs to seek to go behind those orders. Little turns in my opinion on the fact that ultimately the Guild FOI Decision was quashed. Relevantly, the decision was on foot at the time that the documents were provided to (and used, to the extent that they were in fact used, by) the Pharmacy Guild.)

Evidence

1. I do not propose here to outline in any detail the evidence relied upon by each side in support of, or resisting, the respective applications; save to note that there was one document that I provisionally admitted (Exhibit F), indicating that I would rule on the document in my final reasons. Tender of that document (the WA Board's decision of 10 October 2018 rejecting the Ramsay defendants' application for internal review of the Guild FOI decision) (the October 2018 decision) by the plaintiffs was objected to by the defendants on the basis of relevance (that decision having been, admittedly, superseded by the February 2019 consent orders).
2. The relevance ascribed to that document by the plaintiffs was that it gave some description of the level of redactions that had been made to the documents released to the plaintiffs (in circumstances where the defendants had not themselves put in evidence on the present application the Released Documents, other than some 15 pages annexed to the 31 October 2018 affidavit of their solicitor, which material contained the confidentiality provisions of the relevant agreements said to be or to contain the defendants' confidential information). The plaintiffs submitted that the level of redactions made to the Released Documents is supportive of the fact that there was no basis for the Pharmacy Guild at the time it received the documents to have notice of anything untoward having occurred (see T 42-43) or that the Pharmacy Guild was receiving documents that it ought not to have received. The plaintiffs also pointed to the redactions as indicating that there was no obligation for the WA Board to consult with the Ramsay defendants before releasing the documents (based on the operation of s 24 and s 33 of the WA FOI Act).
3. The position of the defendants was that, whatever views the Registrar of the WA Board may have expressed in the October 2018 decision as to the propriety of the release of the information in the first place, they are not the views that informed the formal ultimate step concerning the propriety of the administrative action in question (i.e. the quashing of that decision); and, in any event, this was not a document that the plaintiffs had when commencing these proceedings so it cannot go to the state of mind the plaintiffs had at that time concerning the propriety of their access to documents.
4. It is obvious that the document provisionally admitted as Exhibit F, by its very date if nothing else, did not come to the plaintiffs' attention (and thus could not have any relevance on the question as to the knowledge of the plaintiffs, or their legal representatives at the time that the Released Documents were received; nor, indeed, at the time these proceedings were commenced). Moreover, the issue before me is not whether the WA Board complied with its obligations in relation to the release of the said documents (or had an obligation to consult with the Ramsay defendants in circumstances where the documents had been redacted - a submission that in any event could have been made by reference to the legislation alone). Rather, the issue as to the plaintiffs' access to the redacted Released Documents is whether there was an impermissible use of the documents in the commencement (or continuation) of the present proceedings so as to constitute an abuse of process warranting the dismissal of the proceedings. Insofar as that turns on what the plaintiffs knew (or ought to have known) at the time of commencement of the proceedings, Exhibit F does not assist in that regard. Accordingly, I consider the relevance objection to be well-founded and I reject the tender of Exhibit F.

Defendants' dismissal/strike out motion

1. As indicated above, I will deal first with the defendants' dismissal/strike out motion.

Standing

1. The first basis on which the defendants seek the dismissal of the proceedings (or alternatively the striking out of the statement of claim) is the contention that the plaintiffs lack a special interest sufficient to give them standing to seek the relief claimed. However, that submission was largely subsumed in oral argument by the submission that it is inappropriate for the Court here to entertain an application for declaratory relief as to the criminality of alleged conduct (and, if that be accepted, not necessary and perhaps not desirable for the issue of standing to be determined); and I propose to deal with that issue first (because, in my view, it is determinative of the present application).
2. The defendants say that in these proceedings what the plaintiffs are seeking are declarations that the Ramsay defendants have committed an offence under the National Law (that being the prism through which the adequacy of the pleading is to be assessed) and the defendants point to the recognised reluctance of courts to grant such relief on the application of private entities, other than in exceptional circumstances (and will not do so unless the facts are clear and undisputed) (see R (Rusbridger) v Attorney General [2004] 1 AC 357 (Rusbridger) at [19]; [23]; Brightwater Care Group (Inc) v Rossiter (2009) 40 WAR 84; [2009] WASC 229 (Brightwater) at [18]-[19]; Australian Securities and Investments Commission v HLP Financial Planning (Aust) Pty Ltd (2007) 164 FCR 487; [2007] FCA 1868 at [30]; and CrownBet Pty Ltd v State of New South Wales [2017] NSWSC 1470, including at [89]-[91]; [129]-[138] (CrownBet v NSW); cf Tom & Bill Waterhouse Pty Ltd v Racing New South Wales (2008) 72 NSWLR 577; [2008] NSWSC 1013 (Waterhouse v Racing NSW) at [74]).
3. The defendants point to the regulation of the pharmacy industry under the National Law and emphasise that the Pharmacy Guild is not a regulator and that it does not have any statutory role in enforcing pharmacy regulation; nor does it have a role in administering the National Law or in maintaining the registry of pharmacies (that role being performed in New South Wales by the Pharmacy Council, which is established under s 41B of the National Law, and the Australian Health Practitioners Regulation Agency (AHPRA), which is established under s 23 of the National Law).
4. Reference is made to CrownBet v NSW (at [128]) for the proposition that, where there is a regulator apprised of the situation, that has registered the pharmacies the subject of these proceedings and has otherwise not taken steps to restrain the practices of the Ramsay defendants, it would be inappropriate for the Court to intervene and do so.
5. Further, it is submitted that the Pharmacy Guild and the second to fourth plaintiffs have not established any interest in the proceedings beyond other members of the public, such as to give them standing to bring this case. It is submitted that there is no private right of the plaintiffs which is interfered with, nor will they suffer a disadvantage beyond a grievance if the action fails (see Onus v Alcoa of Australia Ltd (1981) 149 CLR 27 at 35-36; [1981] HCA 50 (Onus v Alcoa); Australian Conservation Foundation Inc v Commonwealth (1980) 146 CLR 493 at 530; [1980] HCA 53 (ACF v Commonwealth)); and that the Pharmacy Guild does not have a real commercial interest in the relief sought (citing Edwards v Santos Limited (2011) 242 CLR 421; [2011] HCA 8 (Edwards v Santos) at [38]). Nor, it is said, does the fact that the resolution of the proceedings may be relevant to, or consistent with, the objectives of the Pharmacy Guild constitute a real commercial interest or an interest sufficient to confer standing (see ACF v Commonwealth at 531). It is submitted that the interests of the Pharmacy Guild's members cannot confer standing on the Pharmacy Guild (see ACF v Commonwealth at 531).
6. As to the second to fourth plaintiffs, the defendants note that standing is sought to be established by reference to the geographical distance between the relevant plaintiff and the Ramsay branded pharmacy (referring to the statement of claim at [6]; [9]-[10] and [12], respectively). The defendants argue that this is not a suit brought to enforce geographical restrictions (where they accept proximity to a new pharmacy might afford a pharmacist standing) (referring to Pharmacy Guild of Australia v Australian Community Pharmacy Authority (1996) 70 FCR 462 (Pharmacy Guild v ACPA) at 473-474). The defendants point out that the restriction the subject of the declarations sought is as to the identity of persons with financial interests in particular pharmacies, not their location; and say that geographical proximity does not give the plaintiffs standing to seek declarations as to the identities of persons who hold financial interests in other pharmacies.
7. The defendants also complain that the third and fourth plaintiffs here seek to go beyond their existing pleadings by adducing (in the affidavits relied upon to resist the defendants' notice of motion) hearsay evidence as to the potential financial impacts being caused by the ownership of the competing Ramsay branded pharmacies. It is noted that each of the relevant Ramsay branded pharmacies was a pre-existing business which has been acquired (by Pharmire or Lekarna as the case may be). The defendants argue that the third and fourth plaintiffs cannot establish standing by complaining about a change in the ownership structure of a pre-existing competing pharmacy business. The defendants further submit that the alleged financial impacts of the change to Ramsay branded pharmacies are "too remote to give standing" (referring to Pharmacy Guild v ACPA at 467 and 474).

Nature of the declarations sought

1. As to the nature of the declarations here sought, the plaintiffs in both their written and oral submissions (see for example T 50.6, T 50.40) were adamant that the summons does not seek a declaration that an offence has been committed and that they have not asked for a finding of criminal conduct. Though they accept that the National Law provides, in general terms, that it is an offence for an entity that is not a pharmacist to hold a financial interest in a pharmacy, they say that they are concerned "not with whether the conduct of the Ramsay defendants ought be the subject of prosecution but with whether Pharmire and Lekarna ought to have been permitted to acquire and register interests in pharmacies to be operated pursuant to the Franchise Arrangements".
2. It is submitted that, in view of Ramsay Health's stated intention greatly to expand its pharmacy network, the answers to the questions posed in the summons are of great importance not only in respect of conduct in which the defendants have already engaged but also in respect of conduct that the defendants "have evinced an intention to pursue vigorously in the future". It is further submitted that the present case is likely to give rise to important questions of construction of the National Law, the determination of which will give certainty to the plaintiffs, the defendants, the Pharmacy Council and the owners of community pharmacies generally.
3. As noted, the plaintiffs say that they do not seek any declarations that a criminal offence has been or will be committed but they further say that, even if they did, such declarations can be made in appropriate cases, citing Waterhouse v Racing NSW where Palmer J noted that: The Court is less reluctant to make a declaration involving questions of criminal law where the facts are clear and undisputed, there are no criminal proceedings pending, and there is a pure question of law to be decided.
4. The plaintiffs say that the present matter is one in which no criminal proceedings are pending (or even threatened) and that the extent of any factual dispute (though not yet able to be determined) is likely to be "of relatively narrow compass" (i.e., whether the franchise arrangements give rise to a "financial interest" within the meaning of the National Law).
5. As to the defendants' submission as to the inappropriateness of curial intervention (in circumstances where there is a regulator, apprised of a situation, that has not sought to restrain the practices of the Ramsay defendants), the plaintiffs say that there is no general stipulation that declarations cannot be sought in matters falling within the sphere of a regulator's influence and they argue that the position contended for by the defendants "would be a substantial departure from the weight of authority and would very substantially narrow the range of cases in which the Court could make equitable declarations".
6. The plaintiffs submit that, if the franchise arrangements operate in a way that effectively vests the true beneficial interests in a series of pharmacies not in the purported owner of those pharmacies, then this subverts the terms and clear intent of the National Law and that "[t]he fact that the First and/or Second Defendants may have, so far, successfully persuaded the regulator otherwise, does not detract from the clear public interest in the true position being ascertained".
7. The plaintiffs accept that, to establish standing, they are required to show that they have a special interest in the subject matter of the proceedings but they place emphasis on the approach to standing requirements as "enabling" (see Bateman's Bay Local Aboriginal Land Council v Community Benefit Fund Pty Ltd (1998) 194 CLR 247 at 267; [1998] HCA 49 (Bateman's Bay), where Gaudron, Gummow and Kirby J said that "[r]easons of history and the exigencies of present times indicate that [the special interest] criterion is to be construed as an enabling, not a restrictive, procedural stipulation").
8. The Pharmacy Guild submits that it has a special interest in the subject matter of the proceedings on account of: its status and function as the "national peak representative body" of community pharmacies; the actual and apprehended impact of the Ramsay franchise arrangements on both the community pharmacy model and the individual members of the Pharmacy Guild; and the apprehended impact of the defendants' actions, both to date and as proposed to continue, on the commercial interests of the Pharmacy Guild.
9. As to the first of these matters, it is noted that the Rules of the Pharmacy Guild of Australia (Rules) provide (at cl 5) that the objects of the Pharmacy Guild are to represent the interests of members in industrial matters and to further, and protect, the interests of, and generally to do anything which may be considered beneficial for, its members. The Pharmacy Guild says that its objects (while not determinative of whether it has standing) are relevant in that they emphasise the core representative functions of the Pharmacy Guild in relation to matters of importance to the owners of community pharmacies. The Pharmacy Guild also points to the nature of its membership (namely operators of community pharmacies) in this regard. In the present case the plaintiffs emphasise their concern as to the maintenance of the "community pharmacy model" as the preferred means of ensuring individual pharmacist accountability and equitable access to medications.
10. The Pharmacy Guild says that its claim to standing is significantly greater than that of most environmental advocacy groups, emphasising that it represents a "relatively homogenous group" in the context of a matter of specific concern to a narrow group of persons.
11. As to its representative role, that the Pharmacy Guild points to matters such as the fact that it is the counter party to the Commonwealth Government in the making of various Community Pharmacy Agreements (addressing the pricing of medications under pharmaceutical benefits scheme) and has served as the employer representative in negotiations relating to employment conditions, including in respect of the Pharmacy Industry Award 2010 and as representative for members in industrial disputes before the Fair Work Commission. It says it has a long history of making representations to government in connection with various matters of interest to its members (such as, the making of submissions in September 2018 before the Queensland Parliament's Health, Communities, Disability Services and Domestic and Family Violence Prevention Committee in relation to the Inquiry into the establishment of a pharmacy council and pharmacy ownership in Queensland, which addressed the regulation of pharmacy business ownership).
12. In this regard, the plaintiffs refer to cases in which representative bodies have had standing on the basis of their members' interests (Shop Distributive & Allied Employees Association v Minister for Industrial Affairs (1995) 183 CLR 552; [1995] HCA 11 (SDA), in the case of a union; and North Australian Aboriginal Legal Aid Service v Bradley [2001] FCA 1728; (2001) 192 ALR 625 (Weinberg J) in the case of the North Australian Aboriginal Legal Service (NAALAS)). It is submitted that the Pharmacy Guild is a representative body governed by an elected Council and a registered organisation; and that its position is analogous to that of the Shop Distributive & Allied Employees Association considered in SDA.
13. The plaintiffs submit that the application of the statutory requirements regarding pharmacy ownership is of fundamental importance to the Pharmacy Guild's members and the marketplace in which they operate. It is said that the Pharmacy Guild's members are subject to a restrictive regime in relation to the manner in which their businesses are held, carried on, and transferred on sale and, as such, have an interest in ensuring that regime is applied consistently, which extends well beyond the interest of the public generally.
14. The plaintiffs argue that the Ramsay defendants' acquisition of a financial interest in competitor pharmacies (in the context of evidence of its intention to expand the network of pharmacies) is likely to cause real financial detriment to many of the Pharmacy Guild's members, noting that a potential future commercial detriment can accord a plaintiff standing to seek declaratory relief (see Bateman's Bay).
15. The plaintiffs also point to the observations of Mason J, as his Honour then was, in ACF v Commonwealth (at 547): Depending on the nature of the relief which he seeks, a plaintiff will in general have a locus standi when he can show actual or apprehended injury or damage to his property or proprietary rights, to his business or economic interests, and perhaps to his social or political interests.
16. They submit that, even apart from the Pharmacy Guild's own special interest on the basis of its status and functions, the Pharmacy Guild has standing because of its members' interests.
17. As to the defendants' contention (citing Edwards v Santos) that the Pharmacy Guild does not possess a "real commercial interest" in the relief sought and therefore lacks standing, the plaintiffs say that the possession of a real commercial interest in the relief sought is not required to establish standing referring to the acceptance by Heydon J in Edwards v Santos (with whom French CJ, Gummow, Crennan, Kiefel and Bell JJ agreed) that native title claimants had standing because they had an interest in the question as to the validity of the Authority to Prospect which was greater than that of other members of the public. In any event, the plaintiffs say that, while the Pharmacy Guild's direct commercial interests may not be immediately adversely affected by the defendants' activities, the subject matter of these proceedings bears a real connection with the prospective commercial interests of the Pharmacy Guild, insofar as the expansion of the Ramsay network of pharmacies may affect the Pharmacy Guild's provision of "support services" for the owners of community pharmacies (from which it derives income).
18. The Pharmacy Guild says that the pharmacy ownership rules contained in the National Law seek to preserve the community pharmacy model as the model by which pharmaceutical services are delivered in NSW and that if those ownership rules "are permitted to be circumvented in a way that allows large publicly listed multinationals such as the First Defendant to develop significant agglomerations of pharmacy businesses", the number of community pharmacies in NSW will reduce significantly; as will, correspondingly, the market for the support services provided on a commercial basis by the Pharmacy Guild and "its capacity to provide those services to its community pharmacy members". It is submitted that that is sufficient to give the Pharmacy Guild a special interest in the subject matter of the proceedings.
19. As to the second, third and fourth plaintiffs, it is submitted that each possesses an interest in the subject matter of the proceedings that extends "well beyond" that of members of the public generally because of the commercial detriment they have suffered, or may suffer, as a result of the defendants' actions. Their interests are identified as the interests of as the owners or operators of a pharmacy or pharmacies in close proximity to a pharmacy business "purportedly owned" only by the third or fourth defendant. It is submitted that each of those plaintiffs has a special interest in ensuring that direct competitors comply with provisions in the National Law concerning pharmacy ownership.
20. The plaintiffs argue that, in a general sense, the concern that a pharmacist operating a pharmacy business has in its close competitor's adherence to rules to which he or she is subject is significantly greater than the interest of members of the public generally (whether or not direct pecuniary damage can be shown). In addition, it is submitted that each of the second, third and fourth plaintiffs either has been, or is likely to be, impacted in a "business or economic" sense. It is said that, while each of the pharmacies acquired by the third and fourth defendants was an existing pharmacy business, breaches of the ownership provisions of the National Law may fundamentally and detrimentally shift the nature of the competition faced by the second to fourth plaintiffs. It is said that this possibility is particularly acute in circumstances where, as the operator of a network of hospitals and of pharmacies (not the subject of these proceedings) located in those hospitals, Ramsay Health has developed an existing relationship with hospital patients returning to the community who may require access to medications from pharmacists. It is submitted that it is plainly the expectation of Ramsay Health that its pharmacy network (which is branded "Part of Ramsay Health Care") will attract and secure patronage as a result of the apparent identity between its hospital and pharmacy networks.
21. The plaintiffs argue that close geographical proximity (while not necessarily determinative of standing) is a relevant and important factor (citing by way of example the decision in Pharmacy Guild v ACPA). The plaintiffs, in their written submissions, outline the particular factors in relation to each of the first to fourth plaintiffs in that regard. It is not necessary here to set those out.

Abuse of process

1. The second basis on which the present orders are sought is that they amount to an abuse of process, in that the commencement of the proceedings was based on the Ramsay defendants' confidential information (that had either been unlawfully obtained or was obtained or held in circumstances importing an equitable obligation of confidence).
2. In particular, the Ramsay defendants maintain that the information obtained by the Pharmacy Guild pursuant to the Guild FOI Request was confidential information of the Ramsay defendants; and say that the circumstances in which the Pharmacy Guild obtained the Released Documents were such that it was under an obligation of confidence to the Ramsay defendants and Pharmire (citing Moorgate Tobacco Co Ltd v Philip Morris Ltd (No 2) (1984) 156 CLR 414 at 438; [1984] HCA 73 (Deane J)); noting that the circumstances will give rise to an obligation of confidence where confidential information is "improperly obtained" (see Lord Ashburton v Pape [1913] 2 Ch 469 (Lord Ashburton v Pape) at 475, approved in Commonwealth v John Fairfax & Sons Ltd (1980) 147 CLR 39 at 50; [1980] HCA 44 (Mason J) (Cth v Fairfax); Smith Kline & French Laboratories (Aust) Limited v Secretary, Department of Community Services and Health (1990) 22 FCR 73 at 86 (Gummow J)).
3. The Ramsay defendants submit that, on receipt of the Guild FOI Decision, the Pharmacy Guild ought to have been aware that the Released Documents were being provided to it in circumstances where the WA Board had failed to comply with its statutory obligation not to give access to a document that contains commercially sensitive information of the Ramsay defendants or Pharmire until it had taken steps to obtain the views of those entities as to whether the document contained "exempt matter" within the meaning of cl 4 of Schedule 1, namely commercially sensitive information (s 33 of the WA FOI Act) and that it would be unconscientious for the Pharmacy Guild to take advantage of that failure by using the Released Documents in a manner contrary to the interests of the Ramsay defendants and/or Pharmire.
4. It is said that the nature of the information contained in the Released Documents was such that the Ramsay defendants and Pharmire, had they known of the Guild FOI Request, would have informed the Board that they considered the documents contained "exempt matter". It is said that this is established by the fact that, when the Ramsay defendants and Pharmire learnt about the Guild FOI Request, they informed the Pharmacy Guild and the WA Board of their position that the material was confidential.
5. The defendants say that, had the Ramsay defendants and Pharmire been afforded the opportunity to protest, the WA Board would have been obliged to defer giving access to the documents until its decision became final (see s 34(1)(e) of the WA FOI Act); and would also have been obliged to give the Pharmacy Guild notice that a third party considered the documents contained "exempt matter" and that access would be deferred until the WA Board's decision was final (see s 34(3)). It is noted that the Guild FOI Decision did not contain such a notice and that access to the Released Documents was not deferred.
6. It is submitted that a reasonable person in the position of the Pharmacy Guild would have realised that there was a real likelihood the WA Board had not complied with its obligation under s 34 of the WA FOI Act; and thus that the Pharmacy Guild ought to have been aware that the Released Documents had been "improperly obtained". In this regard, the defendants point out that the Pharmacy Guild was already on notice that a similar FOI request in Victoria had been deferred by the VPA on the grounds that s 34 may apply and that the Ramsay defendants were to be given the opportunity to provide their view in accordance with s 34(3) of the WA FOI Act.
7. The defendants rely on the proposition that a third party who comes by information innocently may be restrained from making use of it once that third party learns that it was obtained in circumstances involving a breach of confidence (referring to Johns v Australian Securities Commission (1993) 178 CLR 408 at 460; [1993] HCA 56 (Johns v ASC) (Gaudron J) and the cases there cited); and that the question whether the duty of confidence will be imposed on the third party will depend on the extent to which the information is generally known or available (Johns v ASC at 460) (pointing out that the Ramsay documents were not generally known or available).
8. The defendants submit that it should be inferred that the Pharmacy Guild used information obtained from the Released Documents for the purposes of commencing these proceedings; and that the plaintiffs have, at the very least, made continued use of their knowledge of the existence of and information contained in the Released Documents. Finally, the defendants argue that the plaintiffs have not adduced any evidence to rebut the inference that they relied upon the Released Documents in commencing these proceedings (it being solely within their power to call such evidence, see Blatch v Archer (1774) 1 Cowp 63 at 65; 98 ER 969 at 970) and that the failure to do so gives rise to a Jones v Dunkel inference (see Commercial Union Assurance Co of Australia Ltd v Ferrcom Pty Ltd (1991) 22 NSWLR 389 at 418-419).
9. The defendants argue that, at the very least from 27 August 2018, the Pharmacy Guild was on specific and express notice from the Ramsay defendants that the WA Board had provided the Released Documents in circumstances in which it had not complied with the requirements of the WA FOI Act; and that, from that time (if not before), the Pharmacy Guild was under an obligation of confidence not to use the Released Documents. It is submitted that this is implicitly acknowledged by the Pharmacy Guild's agreement not to use the Released Documents (both by the letter on 3 September 2018 and by the undertaking given by the Pharmacy Guild).
10. It is submitted that the use of the Ramsay defendants' confidential information provides an improper basis on which to bring proceedings and, as a result, the proceedings should be dismissed as an abuse of process (citing British American Tobacco Australia Ltd v Gordon [2007] NSWSC 230 (BATA v Gordon) at [28] (per Brereton J, as his Honour then was)).
11. Further, it is said that in a case where pleadings were prepared by plaintiffs in possession of relevant information obtained in breach of confidence, the pleadings should be struck out (citing Sullivan v Sclanders (2000) 77 SASR 419 at 431; [2000] SASC 273) and that use of confidential information to institute proceedings in which the same information might subsequently be obtained on compulsory process is an abuse and will be restrained by the Court (see BATA v Gordon at [28]).

Plaintiff's submissions in response as to abuse of process

1. The plaintiffs submit that the proceedings are not an abuse of process. They do not deny use of the Released Documents at the time the summons was filed but say that the information used in commencing these proceedings on 13 August 2018 was limited to information available in and accessed from the public domain, and documents provided in response to the Guild FOI Request (i.e., the Released Documents) before any complaint was made by the defendants about the release of the said documents. It is submitted that that information provided a proper basis for the commencement of these proceedings.
2. The plaintiffs maintain that the defendants have not established that an equitable obligation of confidence has arisen because the defendants have failed to identify with specificity that information within the Released Documents which is said to be confidential; and have not shown that the Released Documents possess the necessary quality of confidence; and because the plaintiffs did not receive the Released Documents in such a way as to import an obligation of confidence.
3. In that regard, the plaintiffs (who emphasise that they no longer have access to the Released Documents) prove to the fact that documents were (they say heavily) redacted by the WA Board, so as to withhold personal information, "trade secrets, commercial and business information" and information subject to legal professional privilege. They say that, at the time the proceedings were commenced, the plaintiffs had not been informed and did not know that the WA Board may not have adhered to all requirements of the WA FOI Act in releasing the Released Documents. It is noted that there was no indication in the Notice of Decision that notice of the release application was not provided to Pharmire. It is submitted that, having regard to the nature of the application, the terms of the Notice of Decision and the fact that almost four months elapsed between the Pharmacy Guild's application for access to documents and the Notice of Decision, it was reasonable for the Pharmacy Guild to proceed on the basis that the WA Board had adhered to the requirements of the WA FOI Act.
4. Further, the plaintiffs say that key aspects of the information regarding the implications of the arrangements in place between Ramsay Retail and Pharmire in Western Australia are already in the public domain by reason of the WA Tribunal's costs decision.
5. It is said that the defendants have not established that there has been actual (or threatened) misuse of the information said to be confidential. It is submitted that the plaintiffs were not made aware of the defendants' complaints in relation to the process surrounding the release of the Released Documents until after the commencement of proceedings; and that, having been made aware of the defendants' complaints, the plaintiffs determined (without admission and in order to avoid further litigation and unnecessary costs on the subject) to make no further use of the Released Documents.
6. The plaintiffs say that as at the time that they commenced proceedings, they had formed the view based on, or reinforced by, consideration of: public statements Ramsay Health had made in relation to its "pharmacy network" and as to the consistency of its franchise model as between different states; information regarding the employment status of the directors of Pharmire and Lekarna; documents released to the Pharmacy Guild in April 2017 pursuant to the GIPA Application; the fact of the WA Board's refusal of Pharmire's application for registration of a pharmacy in WA; and the Released Documents, that it was likely that the franchise arrangements gave the Ramsay defendants a financial interest in the pharmacies purportedly owned by Pharmire and Lekarna.
7. The plaintiffs say that no document provided to the Pharmacy Guild by the WA Tribunal was used in connection with these proceedings and say that there is no evidence to the contrary. It is submitted that the mere fact that the Released Documents were at one stage lawfully held by the Pharmacy Guild cannot lead to a conclusion that the present proceedings are an abuse of process and that such an outcome would be absurd; since the Pharmacy Guild would effectively be disqualified from seeking relief in respect of the same or similar subject matter irrespective of what material later came to light.
8. The plaintiffs argue that the defendants have not established that an equitable obligation of confidence has arisen in connection with the Released Documents, noting the requirements set out in Corrs Pavey Whiting & Byrne v Collector of Customs (Vic) (1987) 14 FCR 434 at 443; [1987] FCA 266 (Corrs Pavey Whiting) by Gummow J that: It is now settled that in order to make out a case for protection in equity of allegedly confidential information, a plaintiff must satisfy certain criteria. The plaintiff (i) must be able to identify with specificity, and not merely in global terms, that which is said to be the information in question: and must also be able to show that (ii) the information has the necessary quality of confidentiality (and is not, for example, common or public knowledge): (iii) the information was received by the defendant in such circumstances as to import an obligation of confidence: and (iv) there is actual or threatened misuse of that information: Saltman Engineering Co Ltd v Campbell Engineering Co (1948) 65 RPC 203 at 215; Commonwealth v John Fairfax & Sons Ltd (1980) 147 CLR 39 at 50-1; O 'Brien v Komesaroff (1982) 150 CLR 310 at 326-8. It may also be necessary, as Megarry thought probably was the case (Coco v Clark (AN) (Engineers) Ltd [1969] RPC 41 at 48), and as Mason J (as he then was) accepted in the Fairfax decision was the case (at least for confidences reposed within government), that unauthorised use would be to the detriment of the plaintiff.
9. The plaintiffs point to the fact that the 28 July 2018 letter stated that the Released Documents contain material "of a highly commercially sensitive character (e.g. a template Franchise Agreement, Disclosure Document, Operations Manual and Agency Agreement)" and correspondence between the defendants' solicitors and the WA Board as to "sensitive legal and commercial matters". They say this does not identify with sufficient the relevant confidential information.
10. It is accepted that the Released Documents are not themselves in the public domain but it is said that key aspects of the contents of those documents and their effect have been canvassed at length in public both in open court proceedings before the WA Tribunal (see transcript) and in the WA Tribunal's costs decision. It is noted that those public documents refer to: the terms of a call option providing for the relevant franchise agreement; the terms of various payments required to be made under the franchise agreement by Pharmire to Ramsay Retail, (namely, the interest payment on the relevant loan facility, the lease rental, and the establishment and ongoing fees); the fact that the arrangement in place created the possibility that all profits of Pharmire's pharmacy business would be diverted to Ramsay Retail via various expenses, (including, inter alia, establishment costs, the franchise fee, occupancy costs, staff expenses and the core services fee).
11. The plaintiffs emphasise that the Released Documents were provided in response to an application made under the WA FOI Act and were "heavily" redacted; and the correspondence provided in advance of the release of the documents indicated that the categories of information that might be expected to have been confidential had been redacted. It is said that the Pharmacy Guild had not received notice of anything to impugn the decision to release the Released Documents as at the commencement of proceedings and was not informed of the defendants' contention that they had not received notice of the release application until 27 August 2018 (two weeks after these proceedings had commenced and almost three months after the Pharmacy Guild had made reference to the Released Documents in correspondence with the Ramsay defendants' solicitors). It is noted and subsequent to the commencement of these proceedings, it became apparent that the determination on 11 October 2018 of the FOI Review Officer at the WA Board was that the Released Documents had been properly released.
12. Insofar as the defendants refer in their submissions to the principle in Lord Ashburton v Pape at 475 (cited in Cth v Fairfax at 50 by Mason CJ) it is said that there is no basis for any suggestion in the present case that the Released Documents were "improperly or surreptitiously" obtained. Rather, it is said that the circumstances of the disclosure were such as to convey to the Pharmacy Guild that it had every right to make use of the Released Documents. The Pharmacy Guild thus cavils with the proposition that it "ought to have been aware that the Released Documents were being provided to it in circumstances where the WA Board had failed to comply with its statutory obligations".
13. It is said that it is not for the applicant for the release of documents under freedom of information legislation independently to verify whether or not the relevant authority has complied with its obligations under the legislation. It is further noted that the consultation process in s 33 of the WA FOI Act does not apply if access is given to a document from which exempt information has been redacted in accordance with s 24(1) and, in any event, does not provide for the applicant to be provided notice of any such consultation. It is said that the fact that a different process may have been undertaken by the regulator in response to an FOI application in Victoria does not change this position.
14. The plaintiffs invoke the observation of Jenkinson J in Corrs Pavey Whiting at 436, namely his Honour's doubt as to: … whether the communication of information inherently confidential in pursuance of the Act could, without more, result in the imposition, on the person receiving the information in response to his request, of an obligation of confidence. The imposition of such an obligation would seem to constitute a fetter, not expressed in the Act, on "the right of the Australian community to information" which is declared in s 3(2) to be the object of the Act.
15. As to the submission by the defendants, by reference to Johns v ASC at 460 per Gaudron J, that a third party who obtains information innocently may be restrained from making use of it after learning it was obtained in circumstances involving a breach of confidence, the plaintiffs maintain that this submission could not properly underpin a finding that the current proceedings are an abuse of process for the following reasons.
16. First, that it has not been established that the Released Documents were "obtained in circumstances involving a breach of confidence" (noting that the WA Tribunal proceedings were resolved by consent (and without the involvement of the Pharmacy Guild) without any determination on the merits); second, that the principle is limited to restraint of the third party "once he or she learns that it was obtained in circumstances involving a breach of confidence"; and that the plaintiffs did not first learn of the defendants' complaints in relation to the release of the Released Documents until after these proceedings were commenced and that the fact say that, for abundant caution, the Member did not, in fact, make use of the Released Documents subsequent to receiving the defendants' correspondence does not convey any implicit acknowledgment that the Pharmacy Guild was under an obligation of confidence not to use the documents (that being expressly disavowed by the terms of the letter).
17. Third, reference is made to the observation by Gaudron J in Johns v ASC that "the question whether there is or should be a duty on third parties must depend, at least in part, on the extent to which the information in question is generally known or available". It is submitted that while the Released Documents are not in the public domain, information contained within them is in fact generally available.
18. Finally, the plaintiffs say that the defendants have not identified how, in commencing proceedings, the plaintiffs have misused any information in the Released Documents that may have been confidential, in a manner that would be to the Defendants' detriment. It is submitted that the inferences which the defendants argue should be drawn even if available, do not satisfy the requirement that there be an actual or threatened misuse of confidential information. The plaintiffs refer in this regard to what was said in Michael Wilson & Partners Limited v Nicholls (2011) 244 CLR 427; [2011] HCA 48 at [89] (by Gummow ACJ, Hayne, Crennan and Bell JJ) and argue that there is no evidence that the Court's procedures have here been invoked for an illegitimate purpose, nor can it be said that the use of the Court's procedures is unjustifiably oppressive. It is submitted that the use of the Court's procedures in this case would not bring the administration of justice into disrepute, rather that there is clearly a real issue to be tried in these proceedings.
19. The plaintiffs submit that this is not a case in which the only information on which proceedings could be maintained derives from documents said to have been provided to the Pharmacy Guild by the WA Board in breach of confidence. It is said that, subsequent to the Pharmacy Guild becoming aware of the defendants' complaint about the provision of the Released Documents, further material has become available in the public domain as a result of the costs dispute between Pharmire and the WA Board (a decision not involving the Pharmacy Guild). In particular, it is said that the key question raised by the Released Documents (namely whether the franchise arrangements impermissibly give Ramsay Retail a financial interest in the pharmacy businesses to which they relate) arises equally on publicly available material, including the costs decision of the WA Tribunal.

Strike out on the basis of the deficiencies in the statement of claim

1. The third (and alternate) basis on which the relief is sought relates to perceived difficulties in the pleading. Tthe defendants invoke the principle that a pleading that is "unintelligible, ambiguous, vague or too general, so as to embarrass the opposite party who does not know what is alleged" is embarrassing and liable to be struck out under r 14.28 of the UCPR (see Meckiff v Simpson [1968] VR 62 at 70, quoted with approval in McGuirk v The University of New South Wales [2009] NSWSC 1424 at [30]).
2. Complaint is made that the plaintiffs have not pleaded with specificity the details of the arrangements that are central to the plaintiffs' case, i.e, the subject of the allegation that the Ramsay defendants established a network of pharmacy businesses operating under franchise agreements. It is submitted that the precise scope of those arrangements is critical to a determination of whether the Ramsay defendants have a financial interest in Lekarna and Pharmire's pharmacies.
3. In particular, it is noted that a critical allegation made in the statement of claim that Pharmire's pharmacies were operated in accordance with franchise arrangements entered into between the Ramsay defendants and Pharmire but that the plaintiffs have not pleaded: what those "arrangements" are; nor that Pharmire and the Ramsay defendants are party to any agreements. Complaint is made as to the adequacy of the particulars provided of that allegation: insofar as it is said that the "arrangements" include certain agreements and "finance arrangements" and that the "arrangements" are "likely to include at least" a franchise agreement, "call option arrangements" and "agreements setting out" various matters. It is said that some of the particularised "arrangements" clearly extend beyond "franchise arrangements" referred to in the allegation. The pleading is said to rest on no more than an assumption that the franchise agreements in relation to the pharmacies the subject of the present proceedings mirror the terms of the franchise agreement in WA.
4. Complaint is made as to what is meant by a "consistent" franchise model.
5. Similarly, the defendants say that the allegation as to the payments that it is alleged Pharmire is required to make under the arrangements, is vague and embarrassing; that the plaintiffs would be required to plead with particularity the payments required to be made by Pharmire; and that it is inadequate for the plaintiffs to refer to a non-exhaustive list of payments that Pharmire may be required to make (particularly as the plaintiffs plead that the payments are such that Pharmire is not "likely" to make an "ordinary commercial profit"). The defendants say that they are entitled to know what payments the plaintiffs say have that effect and what the plaintiffs allege is an "ordinary commercial profit".
6. As to the allegation (at [46]) that the payments have the effect of diverting all or substantially all of the profits of the Pharmire businesses to the Ramsay defendants, it is said that the defendants are entitled to know how, and by what payments, this is said to occur. Complaint is made as to what is contended by the particulars to [46] insofar as it is there stated that the obligations of Mr McFadden "as a full time employee of the first defendant [Ramsay Health] are consistent with Pharmire entering into arrangements whereby all or substantially all of the profits of the Pharmire Business profits revert to Ramsay". (The explanation for this in the course of oral argument was a reference to the existence of fiduciary obligations on the part of an employee to his or her employer. However, that does not explain how it is that an employee in Mr McFadden's position would have some kind of obligation to divert "all, or substantially all" of the Pharmire business profits to his employer. Moreover, the statement that the obligations are "consistent" with the entry into particular kinds of arrangements begs the question as to what is in fact alleged about those arrangements.) The reference to the determination of the WA Board that payments proposed to be payable are "liable to variation" (also in the particulars to [46]) illustrates the hypothetical nature of the allegation here made.
7. As to the allegations at [48] to [51], complaint is made as to their vagueness: as to what is meant by "control over the product range"; on what terms it is said that the Ramsay defendants lends funds to Pharmire; what is meant by the term "contemplate"; what is the nature of the call option; and how it is said that the arrangements cause the profits derived by Pharmire to be substantially less than ordinarily expected. It is noted that the same issues arise in the allegations concerning Lekarna.
8. The defendants submit that, although in many cases it may be appropriate to grant plaintiffs leave to amend deficient pleadings, in the present case such leave should not be given because that the plaintiffs acknowledge that they are not in a position to plead their case properly without using documents which they have undertaken not so to use. The numerous references to the provision of particulars after discovery is said to be illustrative of the plaintiffs' present inability properly to plead their case. It is submitted that granting the plaintiffs leave would be futile, as it would either result in a similarly deficient amended statement of claim or an amended statement of claim that would be liable to be struck out as an abuse of process if prepared using those documents. In the circumstances, the defendants argue the plaintiffs' early disclosure application (seen as a way of curing these defective proceedings) should not be countenanced. Rather, it is submitted that the statement of claim should be struck out without leave to replead.

Plaintiff's submissions as to pleading deficiencies

1. In the event that there are found to be deficiencies in the pleading, the plaintiffs say that the appropriate order in the circumstances is to grant leave to the plaintiffs to amend their statement of claim following disclosure by the defendants of the documents sought in the plaintiffs' notice of motion filed on 15 October 2018 and that the defendants should pay the plaintiffs' costs thrown away in preparing the statement of claim prior to obtaining the disclosure sought by the plaintiffs in their motion.
2. The plaintiffs accept that they have not pleaded the precise scope of the franchise arrangements. They say that, as foreshadowed at a directions hearing on 24 October 2018, it will not be possible to do so prior to the receipt of the documents sought in the plaintiffs' notice of motion.

Determination

1. At the outset, it is relevant to note that cl 5(1) Schedule 5F of the National Law provides as follows: 5 Restrictions on who may have financial interest in pharmacy business [NSW] (1) A person must not own or otherwise have a financial interest in a pharmacy business (including as a partner or member of a firm) unless as one of the following- (a) a pharmacist, (b) a partner in a pharmacists' partnership, (c) a pharmacists' body corporate or a member of a pharmacists' body corporate. Maximum penalty-100 penalty units.
2. Clause 2 defines the term "financial interest". Relevantly, cl 2 includes the following: (1) A financial interest means a direct or indirect monetary or financial interest and includes- (a) a proprietary interest, including a proprietary interest as a sole proprietor, partner, director, member or shareholder, or trustee or beneficiary; and …
3. The only relief sought in the statement of claim (other than costs) is declaratory relief. Significantly, the declaratory relief that is sought in prayers 1 and 2 of the statement of claim (as was sought in the earlier summons) amounts to a declaration that the respective defendants have committed (and are continuing to commit) a criminal offence.
4. The plaintiffs argue that they are not seeking a declaration as to criminality as the proceedings do not concern the commission of a criminal offence. However, in the present case there can be no doubt that what is being sought is a declaration as to the (past and continuing) commission of a criminal offence (albeit that the declaration is not framed in such terms).
5. It is recognised that there is jurisdiction for a civil court to make a declaration in relation to criminality (Rusbridger at [16]; J Woolf, The Declaratory Judgment (4 ed, 2011, Thomson Reuters) (The Declaratory Judgment) at [4-184]ff; Imperial Tobacco Ltd v Attorney General [1981] AC 718 (Imperial Tobacco) at 750; CrownBet v NSW at [24]).
6. However, the making of such a declaration is a matter of discretion and, as the case law suggests, is only in "exceptional cases" (Imperial Tobacco; R (Pretty) v Director of Public Prosecutions (Secretary of State for the Home Department intervening) [2002] 1 AC 800 (Pretty) at [116]; R v Director of Public Prosecutions, Ex p Kebeline [2000] 2 AC 326 at 371). In Rusbridger, Lord Steyn said (at [19]): … Normally, the seeking of a declaration in a civil case about the lawfulness of future conduct will not be permitted. But in truly exceptional cases the court may allow such a claim to proceed.
7. As stated in The Declaratory Judgment (at [4-184]) "the civil courts are reluctant to grant declaratory relief when this involves determining whether particular conduct amounts to a crime because the grant of a declaration could result in conflict between the civil and criminal courts, with the civil courts usurping the proper role of the criminal courts".
8. The case law indicates that a number of factors are relevant to whether or not such a declaration is granted. These include, but are not limited to: whether there is a real dispute between the parties (Rusbridger); whether there are facts (actual or hypothetical) in dispute or a pure question of law (Rusbridger; Pretty); whether there is any public or private interest in granting the declaration (Rusbridger); whether the declaration relates to past or future conduct (Brightwater; Australian Securities and Investments Commission v HLP Financial Planning (Aust) Pty Ltd (2007) 164 FCR 487; [2007] FCA 1868 (ASIC v HLP)); whether there are criminal proceedings pending or threatened (ASIC v HLP); whether the declaration seeks to make certain conduct criminal or not criminal; and whether there are other more appropriate remedies available such as an injunction.
9. Simon Brown LJ in R v DPP Ex p, Camelot Group Plc (1997) 10 Admin L Rep 93 stated that the approach adopted should be "essentially flexible" (cited in The Declaratory Judgment at [4-190]): … The only rigid rule is following Imperial Tobacco, that once criminal proceedings have begun, the civil courts should not intervene. That said, other things being equal, criminal disputes, even upon pure issues of law, are best decided in criminal courts and between the parties most directly affected by their outcome. The civil courts should, moreover, be the warier of embarking on this jurisdiction (i) otherwise than at the suit of the Attorney General (not least where he has refused his fiat for relator proceedings), (ii) when it involves existing, and not merely prospective future, conduct and (iii) when what is sought is a declaration of criminality rather than non-criminality (iv) … when facts are in issue.
10. In Rusbridger, counsel for the Attorney General (at 359 and 360) outlined a number of factors that may lend to a suggestion that the case is "exceptional", as applied by Lord Steyn in his Honour's reasoning. These were: firstly; that there is a real dispute between the parties; secondly, how fact sensitive the case is; and, thirdly, any public or private interest in granting the relief. Lord Steyn (at [23]) stated that whether the case is fact sensitive or not is "a factor of great importance and most claims for a declaration that particular conduct is unlawful will founder on this ground … It is clear as a pikestaff that there can be no issue of fact …".
11. The court will normally, in exercising its discretion to grant a declaration, "refuse to rule upon hypothetical facts" (Pretty at [116]). As stated in Ainsworth v Criminal Justice Commission (1992) 175 CLR 564 at 582; [1992] HCA 10 (and cited in CrownBet v NSW) "declaratory relief must be directed to the determination of legal controversies and not to answering abstract or hypothetical questions".
12. It has been said that if the court is asked to rule on a question of law, it will be more likely to intervene (ASIC v HLP at [30]; Crane v Gething (2000) 97 FCR 9; [2000] FCA 45 (per French J)). In Waterhouse v Racing NSW it was thus said, at [74]: The Court is less reluctant to make a declaration involving questions of criminal law where the facts are clear and undisputed, there are no criminal proceedings pending, and there is a pure question of the law to be decided: see, for example, Crane v Gething (2000) 97 FCR 9 at 22 [30]; Australian Securities and Investments Commission v HLP Financial Planning (Aust) Pty Ltd (2007) 164 FCR 487 at 504 [58].
13. In ASIC v HLP it was said at [30] that: [The] House of Lords cases show that whether or not a court will intervene may depend on whether the court is asked to consider past or future conduct. If the court is asked to rule on future conduct and the issue involved is simply a question of law, the court is more likely to intervene. On the other hand, it is less likely to act in relation to past conduct, especially if the facts are in dispute. Moreover, if criminal proceedings are pending, the court will not intervene at all: R v Director of Public Prosecutions; Ex parte Camelot plc (1998) 10 Admin LR 93. The position is likely to be the same if criminal proceedings have not begun but are threatened: Rusbridger [2004] 1 AC 357 at 367.
14. In Brightwater, Martin CJ at [50] similarly acknowledged that "while declarations are sometimes given in respect of the criminality of proposed future conduct, declarations are not generally made in respect of the criminality of conduct which has taken place. To do so would entirely usurp the criminal process and the possible role of a jury". His Honour also said at [19] that: Declarations in respect of proposed future conduct add to the practical utility of this jurisdiction, but a declaration in respect of conduct which has occurred has little practical utility and would usurp the jurisdiction and role of the criminal courts, and for those reasons, will not be made: Commonwealth v Sterling Nicholas Duty Free Pty Ltd (1972) 126 CLR 297 at 305; [1972] HCA 19.
15. The authors of The Declaratory Judgment (at [4-194]) observe that "[e]specially when the application relates to proposed future conduct, the Australian courts have accepted that it may be more appropriate to grant declarations when they relate to regulatory requirements" (citing by way of example, Australian Securities and Investments Commission v Fuelbanc Australia Ltd (2007) 162 FCR 174; [2007] FCA 960 at [52]-[61]; Commonwealth v Sterling Nicholas Duty Free Pty Ltd (1972) 126 CLR 297 at 305; [1972] HCA 19; Crane v Gething at [27]). It is, however, recognised that courts will be more cautious about granting declaratory relief that establishes that conduct is criminal, as opposed to not criminal (The Declaratory Judgment at [4-192])).
16. I am firmly of the view that it is not appropriate for an application for such declaratory relief to be entertained in the context of the present proceedings - a civil suit and one commenced by an industry body (not the regulator) and three competitors of the entities said to be in breach of the National Law (who clearly have a personal interest in eliminating competition as much as they might also be said to have an interest in enforcing compliance by other pharmacists with the National Law). I accept that there is a high standard to be met for an order summarily dismissing proceedings (see, among others, General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125; [1964] HCA 69). However, it is difficult to see how the position would be any different if the matter were permitted to proceed to close of pleadings and I do not accept that it is appropriate to wait until then in order to ascertain whether (as seems to me almost inevitable given the stance adopted by the defendants in these and other proceedings to date) the defendants dispute the alleged contraventions (or the facts relied upon as giving rise to them), particularly given the deficiencies in the existing pleading to which the defendants have pointed.
17. The authorities considered above point to the undesirability of the Court embarking in the present proceedings on a determination as to whether there is or has been conduct which would amount to the commission of a criminal offence. The conclusion I have reached in that regard leads me to conclude that the proceedings should be summarily dismissed (without the need to consider the issues raised in relation to standing, abuse of process and the deficiencies identified in the pleading). However, for completeness, I address those briefly below.
18. As to the question of standing, what amounts to a special interest will vary according to the nature and subject matter of the litigation; and the question, essentially, is one of fact and degree (involving "in each case a curial assessment of the importance of the concern which a plaintiff has with a particular subject matter and of the closeness of that plaintiffs' relationship to that subject matter" (see Stephen J in Onus v Alcoa).
19. At 530-531, in ACF v Commonwealth, Gibbs J (as his Honour then was) said: I would not deny that a person might have a special interest in the preservation of a particular environment. However, an interest, for present purposes, does not mean a mere intellectual or emotional concern. A person is not interested within the meaning of the rule, unless he is likely to gain some advantage, other than the satisfaction of righting a wrong, upholding a principle or winning a contest, if his action succeeds or to suffer some disadvantage, other than a sense of grievance or a debt for costs if his action fails. A belief, however strongly felt, that the law generally, or a particular law, should be observed, or that conduct of a particular kind should be prevented, does not suffice to give its possessor locus standi. If that were not so, the rule requiring special interest would be meaningless. Any plaintiff who felt strongly enough to bring an action could maintain it.
20. In Onus v Alcoa, Gibbs CJ further said (at 35-36): A plaintiff has no standing to bring an action to prevent the violation of a public right if he has no interest in the subject matter beyond that of any other member of the public; if no private right of his is interfered with he has standing to sue only if he has a special interest in the subject matter of the action.
21. Brennan J in Onus v Alcoa said (at 23): A special interest in the subject matter of an action being neither a legal nor equitable right, nor a proprietary or pecuniary interest, will ordinarily be found to arise from modern legislation enacted to protect or enhance non-material interests - interests in the environment, in historical heritage, in culture. Where such a statute imposes a public duty to protect or enhance a non-material interest a breach of the duty is apt to affect a non-material interest, and it would be vain to search for proprietary or pecuniary damage suffered by a plaintiff. A plaintiff in such a case, though he may be able to show a special interest in what the statute seeks to protect or enhance, would be unable to show a private right or to prove that he has suffered proprietary or pecuniary damage. To deny standing would deny to an important category of modern public statutory duties an effective procedure for curial enforcement.
22. I am not persuaded (though I do not here finally determine the issue) that the Pharmacy Guild has a special interest beyond that of the general public in seeking declaratory relief of the kind it has sought sufficient to confer standing on it. The complaint as to impact on its commercial income was in general terms and was largely speculative. Its role as a representative of the community pharmacy members it represents does not persuade me otherwise.
23. Although there was objection (on hearsay grounds) to some of the evidence relied upon by the remaining plaintiffs in support of the claimed special interest on their part (and it did largely turn on geographical proximity and general assertions in effect as to belief as to a competitive advantage enjoyed by the Ramsay defendants, such as perceived undercutting on prices or the superior ability to obtain discounted products, or overbidding in terms of the acquisition of other pharmacy businesses), I am inclined to the view that the individual plaintiffs would have standing based on the apprehended impact on their commercial interests of the existence of competitors operating in close proximity in (alleged) contravention of the National Law and I would not have been inclined to dismiss the proceedings brought by them on this ground. (That said, I consider there is force to the submission for the defendants that "it would be bordering on the perverse for a court to say that a person has such an interest by wishing to preserve with less competition than would otherwise be the case a capacity to charge members of the public more than what would otherwise be charged" i.e., to suppress competition (see T 41.3ff). However, as noted, it is not necessary here to determine that issue.)
24. As to the question of the abuse of process, that is a more difficult issue.
25. I have already set out in detail the relevant chronology of events. It is important to bear in mind a number of critical dates, there being: the publication (only to the parties, not to the public generally, and not therefore to any of the plaintiffs) by the WA Board of its reasons for the refusal of Pharmire's application for registration on 20 July 2017 (the WA Decision); the filing by Pharmire of its application for review of the WA Decision on 17 August 2017 (that application including a copy of the WA Decision); the provision to the Pharmacy Guild's solicitors on 1 December 2017 of a copy of the WA Decision; the provision to the Pharmacy Guild's solicitors on 19 January 2018 and 5 February 2008 of other redacted documents relating to the application by Pharmire for a review of the WA Decision; the complaint made on 25 May 2018 that a copy of the WA Decision and been "illegally obtained" and seeking the destruction or return of any documents obtained in connection with the WA Tribunal proceedings; the letter dated 8 June 2018 making similar demands (albeit seemingly treating any documents received in accordance with the Guild FOI Request in a somewhat different manner to the documents obtained ex parte from the associate to the President of the WA Tribunal); and the commencement of the present proceedings by way of summons on 13 August 2018, followed by the filing of affidavit evidence for the plaintiffs on 15 October 2018; and the filing of the statement of claim on 26 November 2018 (after which further affidavit evidence was filed).
26. The plaintiffs contend that the information used in commencing these proceedings was limited to information available in and accessed from the public domain, and documents provided in response to the Guild FOI request before any complaint was made by the defendants about the release of the Released Documents. The plaintiffs do not deny that they made use of the Released Documents at the time of the filing of the summons.
27. The first question that arises in this regard is as to whether the relevant documents were produced to the WA Tribunal by compulsion in the sense that has been said to give rise to the Harman undertaking. This was not the subject of any real dispute by the plaintiffs.
28. In Helicopter Aerial Surveys Pty Ltd v Garry Robertson [2015] NSWSC 2104 (Helicopter Aerial v Robertson) Brereton J, as his Honour then was, described (at [10]) the "touchstone" of the obligation arising under the implied Harman undertaking as "that of compulsion".
29. In Riddick v Thames Board Mills Ltd [1977] QB 881, Lord Denning reasoned that the restriction on the use of documents utilised or produced during legal proceedings was due to the compulsion under which those documents were obtained. His Lordship explained (at 896) that: Compulsion is an invasion of a private right to keep one's documents to oneself. The public interest in privacy and confidence demands that this compulsion should not be pressed further than the course of justice requires. The court should, therefore, not allow the other party - or anyone else - to use the documents for any ulterior or alien purpose. Otherwise the courts themselves would be doing injustice. ... In order to encourage openness and fairness, the public interest requires that documents disclosed on discovery are not to be made use of except for the purposes of the action in which they are disclosed. They are not to be made a ground for comments in the newspapers, nor for bringing a libel action, or for any other alien purpose.
30. The defendants argue (see their submissions at [39]) that the documents provided by the WA Tribunal to the plaintiffs were given to the WA Tribunal by Pharmire under the compulsion provided by the WA Tribunal's Practice Notes. Practice Note 2 ('Review Proceedings') (the WA Practice Note) at par 6 (under the heading '[w]hat documents should be included with the application?') states that: 6. The applicant should, as a minimum, include the written notice of the decision sought to be reviewed and any written reasons of the decision-maker relating to that decision. If the decision relates to an application to the original decision-maker, copies of that application and any supporting documents should be included.
31. Rule 4(2) ('[f]iling applications and other documents') of the State Administrative Tribunal Rules 2004 (WA) (the SATWA Rules) states that: An application must be accompanied by any documents required to accompany the application under the Act, the enabling Act, these rules, a practice note or the approved application form.
32. It was not contended before me that the language of the WA Practice Note did not relevantly compel the production of the WA Decision (say because of the use of the word 'should' in the WA Practice Note at par 6 instead of the word 'must'; the latter making the production of the WA Decision mandatory (and thus to enliven r 4(2) of the SATWA Rules)).
33. In Helicopter Aerial v Robertson, in the course of the proceedings, the defendant requested that the plaintiff produce, effectively by way of disclosure, various documents; and the plaintiff, without any formal order for disclosure being made, did so. An issue for resolution when the matter came before Brereton J was whether the implied undertaking attached or should attach to such documents produced by way of disclosure under informal arrangements for disclosure in the absence of an order for discovery or other compulsory process. His Honour noted (at [11]) that there was "no current or immediate compulsion in the sense of an order for discovery or notice to produce invoking the rules of Court requiring the plaintiff to produce the documents in question", but that it was open to the defendant to have compelled disclosure by, for example, a notice or applying for an order of discovery under the UCPR, or by issuing a subpoena for production of documents.
34. His Honour (at [12]) stated: In principle, a party who voluntarily produces documents by way of disclosure for the purpose of proceedings in response to an informal request to do so, and thereby obviates the need for the additional costs, expense and time involved in an application for disclosure pursuant to compulsory process, ought not be disadvantaged in terms of the use that can be made of the documents by having adopted that course. Indeed, such a cooperative approach should be encouraged and facilitated, rather than discouraged.
35. His Honour also referred to the judgment of Laddie J in Bourns Inc v Raychem Corporation [1999] 1 All ER 908 (Bourns v Raychem) (which was affirmed in the Court of Appeal - Bourns Inc v Raychem Corporation [1999] 3 All ER 154) (and was cited in Hearne v Street (2008) 235 CLR 125; [2008] HCA 36). In Bourns v Raychem, the question was whether the implied undertaking extended to documents that were produced voluntarily by a party to a taxing officer.
36. Laddie J said that while the documents were produced "voluntarily", the context in which the production occurred, meant that to say compliance with such a request was voluntary was "misconceived" because "the payee must effectively elect between complying with the request or withdrawing reliance on the documents" (see Helicopter Aerial v Robertson at [14]). Laddie J continued: On the same hypothesis it could be said that discovery given by a plaintiff in the action is voluntary since he could always avoid the necessity for doing so by abandoning his claims. In my view any payee attempting to enforce an order for costs in his favour by embarking on a taxation is compelled to produce his documents to the taxing master and where the payer demands a view of them is effectively compelled to produce to him as well. Although the handover is not automatic, it is no less a compulsory disclosure of private documents for the purposes of the taxation.
37. At [17] of Helicopter Aerial v Robertson, in light of Bourns v Raychem (which his Honour felt was analogous), Brereton J concluded: In my view, that case and circumstances are closely analogous to the present. Although an immediate legal obligation to produce the documents for inspection may not have crystallised, they were produced in the context where disclosure could have been obtained if it were not provided voluntarily by one of the various processes to which I have referred. The documents should be treated in that context as having been produced under compulsion and subject to the implied undertaking. The implied undertaking should in principle be regarded as attaching not only to documents produced as a result of the actual invocation of compulsory process, but equally to documents produced in response to an informal request for disclosure in the context of proceedings in which, but for informal disclosure, a formal order could have been obtained.
38. In Sapphire (SA) Pty Ltd (trading as River City Grain) v Barry Smith Grains Pty Ltd (in liq) [2011] NSWSC 1451, I considered a not dissimilar issue (though it was not there necessary to reach a concluded view on the issue). At [181], I said: [181] It is suggested that the requirement of compulsion also explains those cases in which the implied undertaking has been held not to apply (by reference to Hanneybel v Uniflex (Australia) Pty Ltd [2002] WASCA 349, where documents provided voluntarily in the course of proceedings for a Mareva injunction were not treated as subject to such an undertaking. … [188] The finding in Esso suggests that process for the production and creation of documents and their use in private arbitrations is sufficiently similar to that in legal proceedings so as to warrant an extension of the implied undertaking to arbitrations. On the above principles, an implied undertaking would therefore be likely to apply to the material put before the Tribunal from the other arbitration proceedings at least if the statutory declaration had been made under some form of compulsory process or in an equivalent situation (such as by reason of a direction of the tribunal in that other arbitration) (see also Cross on Evidence (online edn) at [25055]).
39. Providing the documents voluntarily in Bourns v Raychem to the taxation officer is in one sense analogous to the present situation. Whilst the language of the Practice Note does not expressly require production of the WA Board's reasons, the use of the phrase "as a minimum" suggests that an application will not progress unless disclosure of at least this document is made. It appears that the only way to avoid production of this document would be to abandon the application for review. In a practical sense, therefore, Pharmire was compelled to produce the document if it wished to proceed with its application for review of that decision. Accordingly, had this been a contentious issue in the present proceeding (which it was not) I would have concluded that the Harman undertaking did apply in the present circumstances.
40. The Pharmacy Guild is thus in the position of a third party in receipt of documents to which a Harman undertaking may apply. It was not involved in the application the subject of the WA Decision and it was not (when it received the Released Documents) a party to the WA Tribunal proceedings (although it did later seek to intervene in those proceedings). It made the FOI application regularly, as it was entitled under the Legislation to do; and there is nothing to suggest that it was responsible for the failure of the WA Board to notify Pharmire or the Ramsay defendants of the fact that an application had been made or the decision that was in due course made to release the documents. That failure to comply with the legislative requirements in relation to such applications is left wholly unexplained but does not lie at the door of any of the parties to the present proceedings.
41. Thus, in my opinion there could be no complaint made as to the propriety of the Pharmacy Guild's conduct in applying for the documents or in receiving the documents and making at least some use of them (say for the purposes of obtaining legal advice at the time) before it became aware of the complaint as to that use.
42. I do not accept that it can be concluded that the Pharmacy Guild knew or ought to have known, at the time it received the documents from the WA Board, that there had been a failure by the WA Board to follow the requisite notification and consultation process. The documents were redacted and there was a statement in the notice of decision that indicated that there had been a redaction of exempt material. It is not inconceivable that the redaction could have resulted from submissions made by Pharmire or the Ramsay defendants to the WA Board in advance of the notice of decision being issued and the release of the documents.
43. True it is that it might well have been thought to be surprising that the Ramsay defendants (who at or about this time appear to have consistently taken objection to the release of similar information in response to a myriad of other applications made by the Pharmacy Guild around the country) did not appear to have resisted the application made in Western Australia (and, indeed, it is hard to resist the conclusion that the Pharmacy Guild and its legal representatives may have been surprised by the relative ease of obtaining these documents from the WA Board, albeit after a delay of a few months) but that is not to the point. I am not persuaded that there was anything in the circumstances of the provision of the redacted Released Documents to the Pharmacy Guild that did or should have put it on notice that Pharmire and/or the Ramsay defendants had not been given an opportunity to object to the release of the Released Documents or were not aware of the making of the application.
44. By 25 May 2018, the Pharmacy Guild was well and truly on notice that the Ramsay defendants were contending that some of the documents obtained by it (namely, the documents obtained from the associate to the President of the WA Tribunal) were not documents it was free to use (indeed the Ramsay defendants were asserting that they had been "illegally obtained") and, in particular, that the Ramsay defendants were contending that the Pharmacy Guild (as a third party who had received documents in connection with the WA Tribunal proceedings and was aware that they had come from legal proceedings) was bound by the Harman undertaking. However, it is not clear that the Pharmacy Guild at that stage appreciated that there was an issue as to the ability to use the WA Decision itself (which had been obtained not from the WA Tribunal but from the WA Board in response to the GUILD FOI Request).
45. At that point, the Pharmacy Guild (while it may not have accepted the correctness of what was being asserted - and it clearly did not accept it) was on notice of the Ramsay defendants' objection to the use of what they maintained was their confidential information and it is not unreasonable to conclude that any use by the Pharmacy Guild of the WA Decision might be said to have been at its own risk even if it had not been specifically identified in correspondence.
46. The demand for the immediate return of all hard copies of documents in connection with the WA proceedings and the destruction of all electronic copies of the same (and provision of certification of such destruction) (repeated in the letter dated 28 May 2018 to the solicitors advising the Pharmacy Guild (Bartley Cohen)) must have made clear to the Pharmacy Guild that the Ramsay defendants were not consenting to the use of documents of the kind that the Pharmacy Guild had obtained (even if, as was the case, the Ramsay defendants were not then aware of the extent of the disclosure that had been made to the Pharmacy Guild under the FOI application).
47. I do not regard the agreement to delete documents about which complaint was made as an implicit admission of any wrongdoing (nor even an admission that the Pharmacy Guild would not have been entitled thereafter to make use of the documents), since it is equally possible that the Pharmacy Guild was simply seeking to avoid a contentious argument about the issue (and out of more abundant caution, as its solicitors said at the time).
48. As to the claim that there was an equitable obligation of confidence, the difficulty I have with that is that the nature of the confidential information has not been identified with the specificity required by the authorities referred to above. As a general observation at the very least, I would accept that the franchise agreements (containing as they do express confidentiality clauses) would be likely to be regarded by the Ramsay defendants as confidential or commercially sensitive and that this would likely to have been understood by the Pharmacy Guild (particularly given the resistance it had encountered in obtaining such information elsewhere in the country). However, that does not lead to the conclusion that the provision of such documents (in redacted form) in response to a regularly issued FOI application was in circumstances importing an equitable obligation of confidence in relation to those documents. Once they were apprised of the confidentiality claim, however, it was incumbent on the plaintiffs not to use the documents.
49. That gives rise to the question as to what use if any was made of the documents in the context of the present proceedings. In 28 May 2018 letter, as noted earlier, the Pharmacy Guild's solicitors stated (in the context of the WA proceedings) that "[t]he only documents relating to Western Australia which have ever been used for the purpose of legal advice outside of Western Australia have been heavily redacted documents as a result of an earlier freedom of information application". In that regard it points to the advice obtained from Senior Counsel in September 2017, which proceeds on a stated assumption as to the existence of a direct or indirect financial interest in the community pharmacies (see at [19]) and makes clear that Counsel did not have access to the precise terms of the relevant franchise agreements. (A further opinion of April 2018 by Mr Tam clearly did have regard to the redacted Released Documents, as well as the documents issued by the WA Tribunal.)
50. The question as to what use if any of the Released Documents can be inferred from the documents filed in the proceedings must be assessed at two relevant times: first, when the summons was filed (13 August 2018) and, second, when the statement of claim was filed (26 November 2018).
51. At the time that the summons was filed, the costs decision of the WA Tribunal had not been published (that did not occur until 5 September 2018 - see the costs decision) and thus it was not then publicly available. However, there is in evidence a copy of the transcript of the hearing before the WA Tribunal and, if the Tribunal proceedings were open to the public, it may have been available at that time. (A copy of the transcript is exhibited to the affidavit affirmed 13 December 2018 of Ashleigh Poole (Exhibit B in these proceedings).)
52. Relevantly, in the transcript of the hearing before the WA Tribunal, the references below were made to the WA Decision. According to the transcript, Mr Pettit (Counsel appearing for the WA Board) stated that: … [T]he board refused registration of certain premises known as Michael's - I think Michael's healthcare chemist in Claremont on Stirling Highway on the application of a company, Pharmire Proprietary Limited … [and] the board's position about all this was that the application by the company Pharmire was dressed up to appear as if Mr McFadden [said in the application to be the pharmacist in control] … or Pharmire was to own Michael's Chemist when the board says, in reality, the beneficial ownership and actual control of the business would like [sic] with Ramsay healthcare.
53. I note that the pharmacy in Claremont called 'Michael's healthcare chemist' is not outlined in the relief claimed in the summons as one of the relevant pharmacy businesses (nor is it identified later in the statement of claim).
54. Mr Pettit drew the WA Tribunal's attention to the fact that the WA Board considered several different contracts (approximately seven) and Mr Pettit referred in more detail to four (namely, a business loan agreement; franchise agreement; lease agreement; and put and call option): There was a business loan agreement between Ramsay and Pharmire under which the entire amount of the purchase price of the pharmacy was leant. Some more money was leant as well. But for our purposes, the entire acquisition cost of Michael's Chemist was leant by Ramsay to Pharmire. The conditions of that loan were they didn't have to be repaid until the end of the term. But in the meantime, it attracted 10 per cent per annum interest. The second aspect is that there was a collection of requirements as between Ramsay on the one hand and Pharmire and McFadden on the other. These were generally in the document called the franchise agreement, but also in the lease agreement. The next effect of all this, the board said, was that Pharmire, when it acquired Michael's, could by one means or another be obliged to pay to Ramsay 100 per cent of the profits generated by Michael's chemist in the hands of the new owner. Now, it's not expressed like that, but these provisions were - the board says - were framed in a way that allowed that to happen. The third of the relevant provisions is that certain of the fees that were so payable were in - were fixed at a rate - and I will come to that in a minute - but they could be adjusted according to a formula. The two fees in question are mentioned in the submissions. One is the core services fee of $125,000 per annum, and the other is the franchise free of $75,000 per annum. Can I just pause there to point out that this is $200,000 together when Michael's last set of accounts indicated a profit per annum of 500. So those fees were already 40 per cent of the previous year's profit under different management. But the important point is that both of those fees were set out in the arrangements in a matter that allowed their adjustment upward, according to various formulas - but in the result, they could be adjusted upward according to profitability. And the fourth and perhaps most important - I shouldn't - I withdraw that. They all work hand in hand. The fourth was called a put and call option, but it's only the call that's of any relevance to us. Under the call option agreement between Ramsay and Pharmire, Ramsay could at any time call upon Pharmire to transfer the business to Ramsay … And the purchase price of that call option is the same price that was paid for the business in the first place. This is articulated by reference to the loan, not by reference to the actual purchase price. But the two things are the same thing - same amount. So the net result of that - the call option - is that if, at any time, in the term of the business arrangement Mr McFadden or Pharmire which he controlled were in any degree uncooperative with the desires of Ramsay - purchase would be simply with the stroke of the pen - acquired by Ramsay and one presumes another arrangement with a more cooperative employee could have been put in place. In other words, this was the means of control of Mr McFadden. This is the board's submission. I'm not suggesting that the tribunal should so find. So all of this, the board said - and again, I paraphrase and perhaps imperfectly but it doesn't matter for the time being - the board, in essence, said that all of this was a subterfuge and in reality, beneficially speaking, Ramsay owned the business, not Mr McFadden or Pharmire.
55. Mr Pettit noted that it was of importance to the WA Board that "likeminded large companies [like the Ramsay defendants] could acquire a hundred pharmacies" thereby defeating an object of the WA Pharmacy Act.
56. Mr Pettit made reference to a letter from "Ramsay" (presumably, from the description of its contents, a letter from Ramsay Retail) to the WA Board which he said contained the following extract: [W]e are instructed by both the applicant and the franchisor, Ramsay Pharmacy Retail Services Proprietary Limited are willing to amend the franchise agreement and other documents submitted to the board as negotiated and agreed between the applicants, the franchisor and the board. This will lead to an agreement being reached between the parties. In light of the above, we are instructed to invite the board to provide us with the details of any amendments they may wish to seek to the relevant documents.
57. Reference was also made to the WA Board's reply which included the statement that: The board does not consider that its position can readily be made any clearer than set out in its reasons.
58. Mr Pettit stated that, in the WA Board's reasons, emphasis was placed on the fact that Ramsay defendants' way of controlling Pharmire and Mr McFadden was that it could "sack" them (using the put and call option) and have "the whole business taken back formally under Pharmire".
59. The summons seeks a declaration that the first defendant and second defendant hold a financial interest in a pharmacy business within the meaning of cl 2 of Sch 5F of the National Law. As adverted to above, while reference was not made on record by counsel to the specific Ramsay branded pharmacies included in the summons, Mr Pettit did refer in some detail to the WA Decision and its conclusion that the Ramsay defendants invalidly had a financial interest in pharmacy businesses in Australia.
60. While the Pharmacy Guild argues that it only made use of publicly available documents when it commenced these proceedings (and, thus, did not breach any implied undertaking or confidentiality obligations; and the proceedings are not an abuse of process), it does not deny that it made use of the WA Decision itself when commencing the present proceedings.
61. As at the time the statement of claim was filed (26 November 2018), the costs decision had been published (on 5 September 2018) and, thus, was publicly available. (A copy of the judgment is included in Exhibit A in these proceedings.) Thus, the plaintiffs would have had access (theoretically), by this point, to both the transcript and the published reasons.
62. The costs decision summarises parts of the WA Decision as follows: 20. In section 5 of the Reasons, the Board [i.e., the WA Board] sets out the basis for its refusal of the application. A number of those reasons overlap. In summary the substance of the Board's concerns was as follows: 20.1 the Board considered that the arrangement amounted to a beneficial interest of Ramsay Pharmacy Retail Services (RPRS) in the pharmacy business by reason of: (a) the call option which amounted to a contingent equitable interest by providing an option to become the legal owner: Reasons at [6.11]; (b) the terms of the various payments payable by Pharmire to RPRS, namely, the interest payment on the loan facility, the lease rental, establishment and ongoing fees and the terms of the option to purchase, in aggregate, amounted to an impermissible proprietary interest; Reasons at [6.12]; 20.2 the Board considered that the arrangements created the possibility that all profits could be diverted to RPRS and thus the arrangement was impermissible because it gave RPRS the profits or a share of the profits in the pharmacy business. In this regard, that [sic] Board was concerned with the range of the establishment costs, the franchise fee, the core services fee, the occupancy costs, staff expenses, the percentage increase to the franchise fee, and the core services fee and other listed expenses, which when added up produced a sum (in the aggregate upper limit) in excess of the historical revenue of the pharmacy business: Reasons at [6.14]-[6.19]. The Board further considered that the arrangements were so objectively uncommercial that it could not credibly be inferred that Mr McFadden or Pharmire stood to derive any profit from the pharmacy business which gave rise to the contrary inference - that the beneficial interest was to be held by RPRS: Reasons at [6.20]-[6.25]; 20.3 the Board considered that the arrangements were such that the consideration payable to RPRS varied with the income of the pharmacy business. As the upper limit of the aggregate costs payable by Pharmire to RPRS exceeded the revenue of the pharmacy business, it suggested that the amount payable to RPRS would be tailored in accordance with Pharmire's revenue. 21. The Reasons indicate that the Board also refused the application because, in breach of the statutory requirements, the application failed to include all information required by the Regulations and was misleading in material particulars. However, it is plain that these matters themselves turned on the Board's characterisation of the arrangements. The substance of the Board's decision was based on its firm view that the arrangements offended the prohibitions in section 54 of the Pharmacy Act.
63. In light of the transcript and the costs decision, the following statements in the statement of claim, by way of example, appear to have been information within the public domain at the time the statement of claim was filed: the reference (at [20]) that Ramsay Retail has entered into franchise arrangements with Pharmire; the particulars outlined (at [38]) relating to the costs decision and the transcript of the hearing; the statement (at [39]) that "Ramsay enters into a franchise agreement with each franchisee, using a collection of standard-form documents" is arguably based on information in the public domain (especially because of Mr Pettit's references to the contractual arrangements in the transcript); the assertion (at [41]) that "Pharmire purchased the Pharmire Businesses using funds loaned to it by Ramsay", which is supported by the reference to the franchise arrangements in the transcript (though reference is made at [41] to a letter that would not, as far as I can tell, have been available within the public domain); the particulars (at [43(b)]) discussing what the arrangements of Pharmire are "likely" to include; the assertion (at [44]) that Pharmire is required to make a number of payments to the Ramsay defendants; the assertion (at [46]) that all payments payable under the arrangements between the Ramsay defendants and Pharmire have the effect of diverting all, or substantially all, of the profits of the Pharmire businesses to the Ramsay defendants (at least at a general level because of what was alluded to by Mr Pettit as captured in the transcript); the statements at [47] and [48] of the statement of claim which, according to the particulars, are supported by Annexure 1 to the costs decision; and (despite the particulars at [49] referring to a letter which would not be publicly available as far as I can tell) the proposition that "Ramsay loans funds to Pharmire to assist financially with the operation of the Pharmire Businesses" is an assertion that was publicly available based on the transcript and the costs decision.
64. There is also information in the statement of claim that would have been publicly available from, for example, by undertaking a company search (such as when business names were registered or businesses were purchased). In this regard, I note that the September 2017 Counsels' opinion includes reference to examples of public statements reported in the media (including results briefings for the year ended 30 June 2016 that referred to Ramsay Health being in the process of establishing strategically located community pharmacies across Australia; results briefing for the half year ended 30 December 2016 as to the commencement of a retail pharmacy strategy in Australia and places to establish extensive network of franchised pharmacies throughout the country; and an ASX announcement dated 30 August 2007 by Ramsay Health's managing director) ( see at [11]). Reference is also made to reports in various industry publications (see at [12]) and to ASIC and internet searches (see at [13]). The content of those releases and reports is evidently what has informed much of the drafting of the pleading (for example, the references to a "consistent franchise model" and the "network" of franchised pharmacies).
65. The following information and paragraphs in the statement of claim, however, appear to include information that is not obviously in the public domain: see [43] which refers to information that would not be publicly available; and, in particular, the information about the franchise agreements between Ramsay and the fourth defendant (i.e., Lekarna) ([53] onwards in the statement of claim). As I read them, the transcript and the WA Tribunal costs decision do not discuss the position of Lekarna. (That said, insofar as the pleading in relation to Lekarna largely mirrors that in relation to Pharmire it might be inferred that it was at least to some extent based on the assumption that the relevant agreements or arrangements were the same in its case.)
66. The generality (or put less charitably, vagueness) of a number of the allegations in the pleading about which complaint is here made supports in my view the conclusion that the plaintiffs have not impermissibly had resort to the material obtained from the WA Board; rather that the plaintiffs have largely, if not wholly, made use of information that was publicly available (hence the need for them now to obtain early disclosure so as to articulate their case with particularity).
67. Were it necessary to determine I would have concluded that it had not been established on the balance of probabilities that the commencement or continuation of the proceedings to date is or has been an abuse of process by reference to any impermissible use of the Released Documents. The Guild FOI Request was the seemingly orderly or regular invocation of the legislative provisions entitling such an application. I am not persuaded that there was anything in the notice of decision to alert the plaintiffs to the fact (as it transpired) that the WA Board had not notified the Ramsay defendants and/or Pharmire of the application. The (perhaps, surprising in light of their attitude to other such applications) lack of objection by the Ramsay defendants does not amount to knowledge (or even constructive knowledge if that be relevant) of the fact that the Ramsay defendants were unaware of the application or release of the documents. (That said, the 8 June 2018 letter, requesting particulars of the FOI application must have put the Pharmacy Guild or notice that the Ramsay defendants did not have the details of that application.)
68. Finally, as to the complaints made as to deficiencies in the pleading, I consider them to be well-founded. The vagueness of expressions such as "consistent franchise made", "likely to include" and "ordinary commercial profit" make the pleading embarrassing. The defendants are entitled to know with precision the case that they are required to meet, particularly where there are serious allegations amounting to allegations of criminality put against them.
69. The plaintiffs accept that the scope of the franchise agreements has not been pleaded and that cannot be done without the documents (see T 63.18 and T 70.12).
70. That said, in light of my conclusion that the claim for declaratory relief as to criminal conduct should not be entertained, I consider that the appropriate order is not simply to strike out the statement of claim but to dismiss the proceedings. If and when the plaintiffs consider that there is a proper basis to commence proceedings (seeking relief that is not problematic in that regard), then it would be a question of the plaintiffs obtaining advice as to whether fresh proceedings can be instituted based on the publicly available material then to hand. It was not suggested for the defendants that dismissal of the proceedings should be on a with prejudice basis (quite the contrary).

Plaintiffs' Notice of Motion for Disclosure

1. Having regard to the conclusion I have reached as to the defendants' dismissal/strike-out motion, this issue does not arise. However, lest I be wrong (and for completeness), I here address the plaintiffs' motion for disclosure of documents relating to the franchise agreements between the Ramsay defendants and the third and fourth defendants in respect of the relevant pharmacy businesses.
2. The plaintiffs submit that disclosure should be ordered in advance of the parties serving their evidence in circumstances where the plaintiffs seek documents that are solely, or largely, in the possession of the defendants and it is said that there cannot be any doubt that the information contained within them will be necessary for the resolution of the real issues in dispute.
3. As adverted to above, it is the plaintiffs' contention that (consistent, they say with the decision of the WA Board, although that decision was not before me) the franchise system implemented by Ramsay Health and/or Ramsay Retail gives the Ramsay defendants a financial interest (as that term is defined in cl 2 of the Regulation) in the pharmacy businesses claimed to be owned by Pharmire and Lekarna.
4. The plaintiffs accept that the WA Decision related to the arrangements that had been put in place between Pharmire and Ramsay Retail in WA (where the legal requirements under the WA Pharmacy Act are slightly different to those imposed by the National Law). However, the plaintiffs contend (based, they say, on "their own investigations" and information put on the public record by the Ramsay defendants) that the franchise arrangements being implemented by the Ramsay defendants with respect to the Ramsay-branded pharmacies are, at the very least, similar, if not the same, Australia-wide.
5. The plaintiffs do not hold copies of the "suite of documents" underpinning the franchise arrangements in NSW between Ramsay Health and/or Ramsay Retail as franchisor and Pharmire and Lekarna as franchisees. However, they say that, based on the heavily redacted documents released to the Pharmacy Guild in response to the GIPA Application in NSW, it appears that at least a proportion of the suite of documents underpinning the franchise arrangements for the Ramsay-branded pharmacies were provided to the Pharmacy Council in support of the registration applications made to the Pharmacy Council by Pharmire and Lekarna, including Sale/Purchase Agreements, Lease and License Agreements and Finance Arrangements. The plaintiffs say that these documents were not provided to the Pharmacy Guild in response to the GIPA Application.
6. The plaintiffs seek early disclosure of documents falling into the following categories as listed in Schedule A to their notice of motion: (a) Any sale agreement relating to the purchase of the pharmacy businesses referred to in paragraphs 1 and 2 of the summons filed in these proceedings. (b) Franchise agreements entered into between the first and/or defendant and the third or fourth defendant. (c) Any disclosure documents provided by the first and/or second defendant to the third or fourth defendant in connection with the franchise agreements. (d) Any offer letters provided by the first and/or second defendant to the third or fourth defendant in connection with the franchise agreements. (e) Any loan agreement, guarantee or other security agreement entered into, or proposed to be entered into between the first and/second defendant and the third and/or the fourth defendant and/or associated guarantors (including but not limited to its directors, being Nigel McFadden and Peter Giannopolous respectively). (f) Any other deeds, agreements or options (including but not limited to any call option) entered into pursuant to, or contemplated by, the franchise agreements. (g) Any manuals prepared by or on behalf of the first and/or second defendant governing the operation of the relevant pharmacy businesses by the third or fourth defendant. (h) Any power of attorney between the first and/or second defendant and the third or the fourth defendant. (i) The currently applicable Employment Contract between the first and/or second defendant and the sole director of each of the third and fourth defendants, being Nigel McFadden and Peter Giannopolous respectively. (j) Any financial statements, including but not limited to income statements, balance sheets, and/or cash flow statements prepared by or on behalf of the defendants, in relation to the following: (i) the Ramsay Pharmacy Parkside Plaza from 25 October 2016 onwards, (ii) the Ramsay Pharmacy Grafton from 24 February 2017 onwards; (iii) the Ramsay Pharmacy Shoalhaven from 29 May 2017 onwards; (iv) the Ramsay Pharmacy East Albury from 18 November 2015 onwards; and (v) Ramsay Retail Pharmacy from 22 September 2015 onwards
7. Rule 21.2 of the UCPR confers a discretion in relation to discovery. However, an order for discovery may not be made in respect of a document unless the document is "relevant to a fact in issue" in the proceedings r 21.2(4). Moreover, Practice Note SC Eq 11 (the Practice Note) provides, relevantly that: 4. The Court will not make an order for disclosure of documents (disclosure) until the parties to the proceedings have served their evidence, unless there are exceptional circumstances necessitating disclosure. 5. There will be no order for disclosure in any proceedings in the Equity Division unless it is necessary for the resolution of the real issues in dispute in the proceedings.
8. It has been noted in various decisions on disclosure since the Practice Note was introduced that a party seeking disclosure prior to the service of evidence must establish: that there are exceptional circumstances necessitating disclosure; and that disclosure is necessary for the resolution of the real issues in dispute in the proceedings (see, for example, Bauen Constructions Pty Limited v New South Wales Land and Housing Corporation [2014] NSWSC 684 at [17] per Ball J).
9. "Exceptional" has been construed as requiring circumstances that are out of the ordinary or unusual (see Leda Manorstead Pty Ltd v Chief Commissioner of State Revenue [2012] NSWSC 913; (2012) 89 ATR 102 at [15]-[17] (per Gzell J).
10. The test of "necessity" requires that the disclosure sought be shown to be reasonably necessary for disposing of the matter fairly or in the interests of a fair trial. In Re Metal Storm Ltd (subject to a deed of company arrangement) [2016] NSWSC 306, Brereton J, as his Honour then was, said (at [17]): In that context, it is necessary to remember the purposes of discovery. While it is a common use of discovery to obtain evidence of Party B's knowledge or conduct, that is far from its sole use or purpose. The purposes of discovery include not only obtaining relevant evidence, but also reducing surprise and promoting fairness by putting parties in an equal position at trial, so that the parties are "playing with all the cards face up on the table". Discovery has the consequence that Party B cannot adduce documentary evidence at trial which takes Party A by surprise. Thus, simply ascertaining what documents relevant to a fact in issue are in the possession of Party B and may be deployed at trial by that party, or may aid Party A's case or harm Party B's case, is a relevant and proper purpose of discovery. It is a means of a party ascertaining what the other party has in its hand, and thereby avoiding surprise.
11. As to the necessity of disclosure at this stage of the proceedings, the plaintiffs say that it will be necessary to consider the precise terms of the franchise agreements in place between Ramsay Health and/or Ramsay Retail on the one hand, and Pharmire and Lekarna on the other; and to have regard to associated documents, and the way those documents are implemented in practice. They accept that they do not have those documents. It is submitted that, to a significant extent, both the documents setting out the franchise arrangements and information regarding how those arrangements are implemented in practice are solely within the knowledge of the defendants. It is said that essentially, the plaintiffs' case "cannot be put without the disclosure". Thus, it is submitted that the circumstances are "exceptional" in the sense required by the Practice Note, in that they are not "routinely, regularly or normally encountered", and because, plainly, they necessitate disclosure.
12. The plaintiffs argue that the disclosure sought is necessary for the resolution of the real issues in the proceedings. It is noted that the material available to the plaintiffs, including public announcements by Ramsay Health and the costs decision of the WA Tribunal, indicates that one or both of the Ramsay Defendants has begun "rolling out" a consistent franchise system throughout Australia, and it is said that certain features of that system (including, inter alia, the finance arrangements, various payments from franchisee to franchisor, option agreements, operational manuals and staffing arrangements) appear to give the Ramsay defendants a financial interest in the pharmacy businesses owned by Pharmire and/or Lekarna.
13. The plaintiffs say that the precise characteristics of the franchise arrangements in place in relation to the relevant pharmacy businesses are not within their knowledge (and peculiarly within the knowledge of the defendants); and that, while the issues between the parties are likely to be of relatively narrow compass, their resolution will be influenced heavily by the contents of the documents sought. It is said that this extends to the financial statements sought in category "(j)" of Schedule A to the notice of motion as it is the plaintiffs' contention that "the revenue of the relevant pharmacy businesses may prove to be a crucial lens through which to view the franchise arrangements that are in place". In those circumstances, It is said that it would not be possible for the plaintiffs fairly to prepare their case in the absence of disclosure and hence early disclosure is necessary in the relevant sense.
14. The plaintiffs point out that they have suggested an appropriate confidentiality regime and that, while the defendants have not to date suggested any problems with the particular regime proposed, the plaintiffs are prepared to consider any refinements that might reasonably be thought necessary to satisfy any confidentiality concerns.
15. Further, it is submitted that the exercise of discretion in favour of an order for disclosure would be consistent with the overriding purpose set out in s 56 of the Civil Procedure Act to facilitate "the just, quick and cheap resolution of the real issues in the proceedings", as well as the objects set out in s 57 of that Act. In particular, it is submitted that an order for disclosure at this juncture of the proceedings would: assist in the efficient disposal of the litigation by reducing, if not eliminating, the need for the plaintiffs to supplement their evidence following service of the defendants' evidence and subsequent disclosure; and to allow for the issues between the parties to be defined as clearly as possible without further delay and would best allow for the plaintiffs to put their case fairly.
16. It is submitted that the scope of the documents sought at this stage is tailored and confined; and that any costs associated with the disclosure are likely to be, relative to the significance of the subject matter of the proceedings, very minimal. It is further said that, the bulk of the documents sought are likely to have been collated by the defendants in the context of the applications to the Pharmacy Council for registration of the relevant pharmacy businesses.
17. The plaintiffs argue that this is not a case where the plaintiffs are seeking a "carte blanche gathering of every document the respective clients have generated … for 'review' by teams of lawyers and students in the absence of any knowledge of the proposed evidence". The plaintiffs say, rather, that they seek only a confined number of documents that go to the heart of the dispute in these proceedings and are very likely to form the foundation of the evidence on which the matter is determined. Thus, it is said that the grant of the relief sought by the plaintiffs would be consistent not only with the overriding purpose of the Civil Procedure Act but also the underlying purpose of the Practice Note.
18. The defendants in response maintain that this is not a case where the plaintiffs need discovery before evidence in order to fill an evidentiary gap in their case; rather, that the plaintiffs are in substance seeking early discovery to determine whether they have a case, pointing to the concession by the plaintiffs (in their submissions at [31]) that their case cannot be put without disclosure.
19. It is said that the plaintiffs' difficulties are reflected in the manner in which the current statement of claim has been prepared; repeating the complaint that the allegations are made at a high level of abstraction by use of impermissible phrases such as that the relevant arrangements "are likely to include at least" certain contracts and obligations (see, for example, the statement of claim at [43(b)]).
20. It is submitted that the plaintiffs' attempt to seek early discovery is "even more egregious" in the light of the matters raised in the defendants' application concerning the use of confidential information obtained from the WA FOI requests.
21. The defendants say that exceptional circumstances have not been established by the plaintiffs; that this is not a case where the plaintiffs have demonstrated that they are unable to serve their evidence without certain documents (see Danihel v Manning [2012] NSWSC 556 per Bergin CJ in Eq at [16]) or where early discovery is necessary in order to enable an expert to produce an expert report (see RSA (Moorevale Station) Pty Ltd v VDM CCE Pty Ltd [2013] NSWSC 534 per Stevenson J at [35]-[37]). Rather, the plaintiffs are impermissibly seeking to use the discovery procedure to determine whether they have a case and to enable them properly to plead and particularise a cause of action.
22. It is submitted that to allow early discovery and to find "exceptional circumstances" in the present case would render the operation of the Practice Note obsolete and would "sanction the practice of commencing proceedings on disparate information in the knowledge that discovery could then be obtained in order to determine whether a case exists and properly to formulate that case".
23. Furthermore, the plaintiffs maintain that the categories of discovery sought are too broad. In particular, it is noted that the documents sought by (b)-(h) of Schedule A to the notice of motion are not limited to the relevant businesses the subject of these proceedings (i.e., the pharmacy businesses in Nowra, Grafton, and Shoalhaven (for Pharmire) and East Albury and Caringbah (for Lekarna)); rather, as presently drafted, the categories would encompass agreements and documents which are beyond the scope of the proceedings and concern businesses conducted in other states.
24. In the event that the plaintiffs are successful, the defendants wish to be heard on the appropriate confidentiality regime that ought to apply to the discovery provided.

Conclusion as to the early disclosure motion

1. In my opinion, had there not been the difficulty as to the ambit of the relief sought, there would have been much to be said for the view that (assuming that there had been a proper basis to commence the proceedings in the first place - based on the public statements that had been made and submissions in the course of the hearing leading up to the costs decision) this would be an appropriate case for the making of an early disclosure order. The terms of the franchise agreements are clearly relevant to the matters the subject of complaint, for example, and those documents are peculiarly within the knowledge of the defendants. There might have been issues as to the breadth of what was sought but an application for disclosure at this stage would not have seemed inappropriate in those circumstances.
2. I accept that there would be difficulties in pursuing a preliminary discovery application in circumstances where the plaintiffs have already formed the decision that they have (and wish to present) a cause of action (T 52.7), although there is in my mind some doubt as to how that view could properly be formed based without insight into the terms of the relevant transaction documents (and if there were doubt in this regard then a preliminary discovery application might well not be inappropriate).
3. Senior Counsel for the plaintiffs (at T 70.11ff) identified the dilemma in this regard as follows: With the strike‑out application we concede that the scope of the franchise arrangements have not been pleaded and we can't do it without the documents, but the suggestion that we should have done this as a preliminary discovery application ‑ well, you can't bring a preliminary discovery application under UCPR 5.3 as we understand the position to build up a case where you have already decided to bring proceedings, so, having decided to bring proceedings, and in light of those opinions, it would be fairly hard to bring a UCPR application. [my emphasis] "An applicant must identify what information is lacking. Preliminary discovery can't be brought to build up a case which an applicant has decided or could decide to bring." There is a reference to that at paragraph 5.3.15 in Ritchie. We do say that this is the quintessential situation for early disclosure.
4. Rule 5.3 ('[d]iscovery of documents from prospective defendant') of the UCPR provides that: (1) If it appears to the court that: (a) the applicant may be entitled to make a claim for relief from the court against a person (the prospective defendant) but, having made reasonable inquiries, is unable to obtain sufficient information to decide whether or not to commence proceedings against the prospective defendant, and (b) the prospective defendant may have or have had possession of a document or thing that can assist in determining whether or not the applicant is entitled to make such a claim for relief, and (c) inspection of such a document would assist the applicant to make the decision concerned, the court may order that the prospective defendant must give discovery to the applicant of all documents that are or have been in the person's possession and that relate to the question of whether or not the applicant is entitled to make a claim for relief. (2) An order under this rule with respect to any document held by a corporation may be addressed to any officer or former officer of the corporation. (3) Unless the court orders otherwise, an application for an order under this rule: (a) must be supported by an affidavit stating the facts on which the applicant relies and specifying the kinds of documents in respect of which the order is sought, and (b) must, together with a copy of the supporting affidavit, be served personally on the person to whom it is addressed. (4) This rule applies, with any necessary modification, where the applicant, being a party to proceedings, wishes to decide whether or not to claim or cross-claim against a person who is not a party to the proceedings.
5. In the commentary in Ritchie's Uniform Civil Procedure NSW, vol 1 (Ritchie's) at [5.3.2] it is said that, amongst other factors, an order for preliminary discovery can only be made if it appears to the Court that, the applicant has made reasonable enquiries and "notwithstanding the reasonable enquiries, the applicant has been unable to obtain sufficient information to decide whether or not to commence proceedings against the prospective defendant". Relevantly, it is this requirement that the plaintiffs argue mean they would not be eligible to apply for or receive such an order.
6. The case law indicates that a preliminary discovery application can only be used to obtain sufficient information to decide to commence proceedings and not to "build up a case which an application has already decided, or could decide to bring" (see Ritchie's at [5.3.15] and the cases there cited, including St George Bank Ltd v Rabo Australia Ltd [2004] FCA 1360; (2004) 211 ALR 147 - cited with approval in Optiver Australia Pty Ltd v Tibra Trading Pty Ltd (2008) 196 FCR 435; [2008] FCAFC 133 at [36])
7. In Murray v Wheeler [2013] NSWSC 137 (Murray v Wheeler), Bergin CJ in Eq dismissed a summons seeking an order pursuant to r 5.3 of the UCPR that the respondents discover to the applicants documents which included banking statements, records of general accounting, receipts, and documents containing certain communications between the respondents. Bergin CJ in Eq found that correspondence prior to the filing of the summons from the applicants' solicitors to the respondents' solicitors stating that the applicants had made a decision to sue the first respondent in district court proceedings was sufficient evidence to establish that the applicants had sufficient information to decide whether or not to commence proceedings.
8. Similarly, it was held by Barrett J, as his Honour then was (at [11]) in Contour Building and Construction Pty Ltd v Kerr [2008] NSWSC 883 (Contour v Kerr), that letters sent from the applicant's solicitors to the respondents' solicitors indicated that "the plaintiff has already made a decision to commence proceedings against both the first defendant and the second defendant" (see [10]). Emphasis was placed on the fact that there was "no indication of doubt or uncertainty" in the letters (see [13]).
9. Certainly, the decisions in Murray v Wheeler and Contour v Kerr (where the correspondence in question was sufficient to evidence an intention to commence proceedings) would support the conclusion that in the present case the filing of a summons and (verified) statement of claim would be sufficient evidence of such an intention. To adopt the language of Barrett J in Contour v Kerr there could be "no indication of doubt or uncertainty" that the plaintiffs in these proceedings intended to bring the proceedings. That said, there is an abundance in the pleadings of statements indicating the need for further particulars. It may be that, on further consideration, it would be determined that, absent such material, it could not be concluded that there was a reasonable basis on which to institute the proceedings and therefore that a preliminary discovery application could be pursued.
10. In any event, it is not necessary here to determine this issue.

Costs

1. As the defendants in their submissions indicated that they wished to be heard on the appropriate orders as to costs, I do not address that issue at this stage.

Orders

1. For the reasons set out above I make the following orders: 1. Pursuant to r 13.4 of the Uniform Civil Procedure Rules 2005 (NSW), order that the proceedings be dismissed. 2. Reserve the question of costs to be dealt with, if possible, on the papers.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 16 August 2019