Bright v Femcare [2000] FCA 1179 (22 August 2000)

Last Updated: 22 August 2000

FEDERAL COURT OF AUSTRALIA

Bright v Femcare [2000] FCA 1179

KERRIE BRIGHT v FEMCARE LIMITED AND ENDOVASIVE PTY LIMITED

N 410 OF 1999

LEHANE J

22 AUGUST 2000

SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N 410 OF 1999

BETWEEN:	KERRIE BRIGHT APPLICANT
AND:	FEMCARE LIMITED FIRST RESPONDENT ENDOVASIVE PTY LIMITED (ACN 061 512 132) SECOND RESPONDENT
JUDGE:	LEHANE J
DATE OF ORDER:	22 AUGUST 2000
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1. The applicant file and serve, not later than 29 August 2000, draft short minutes of the orders for which she contends, consistently with these reasons.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N 410 OF 1999

BETWEEN:	KERRIE BRIGHT APPLICANT
AND:	FEMCARE LIMITED FIRST RESPONDENT ENDOVASIVE PTY LIMITED (ACN 061 512 132) SECOND RESPONDENT

JUDGE:	LEHANE J
DATE:	22 AUGUST 2000
PLACE:	SYDNEY

REASONS FOR JUDGMENT

1 This is a group proceeding commenced under Pt IVA of the Federal Court of Australia Act 1976 (Cth). Its nature, the background circumstances and the claims which the applicant has made, for herself and on behalf of certain group members, are described in two earlier judgments (Bright v Femcare Ltd (1999) 166 ALR 743 and Bright v Femcare Ltd [2000] FCA 742). It is unnecessary to undertake that task again.

2 In the second of those judgments (the June judgment) I gave reasons which resulted in orders that, among other things, the third amended statement of claim filed by the applicant be stuck out but with liberty to replead. The applicant has, in exercise of that liberty, filed a fourth amended statement of claim. That document differs substantially from its immediate and more remote predecessors. For present purposes, however, the differences do not matter. The applicant makes, for herself and for group members falling within classes similar to those described in previous pleadings, substantially similar claims to those made previously under s 52 of the Trade Practices Act 1974 (Cth) and in negligence, on the basis of pleaded facts which do not differ, in any material way, from those pleaded in the third amended statement of claim and those established (for the purposes of the strike out motion) by the evidence discussed in the June judgment.

3 Now before me are a notice of motion filed by the applicant on 23 June 2000 and aspects of a notice of motion filed in Court by the second respondent, Endovasive, on 9 August 2000 (superseding a notice of motion filed by Endovasive on 8 August 2000). The applicant seeks an order that the parties be granted access to documents produced by the Therapeutic Goods Administration (to which I shall refer as the TGA) under a subpoena for production issued to it on 7 June 1999 (to which I shall refer as the TGA subpoena). Endovasive seeks an order that the TGA subpoena be set aside or, alternatively, that access be refused to documents produced under it.

4 This proceeding was commenced by an application filed on 10 May 1999. The TGA subpoena was issued before the first directions hearing, which took place on 18 June 1999. It was made clear at the second directions hearing that the questions whether the TGA subpoena should have been issued and whether documents produced under it should be inspected were controversial. Those two questions, however, were stood over at a number of successive directions hearings and in fact were not argued until 9 August 2000. The intervening period has been occupied principally with the controversy over the applicant's pleading, culminating in the strike out motion dealt with in the June judgment, and a challenge to the constitutional validity of Pt IVA, dealt with in the earlier of the two judgments, affirmed on appeal (Femcare Ltd v Bright [2000] FCA 512; (2000) 172 ALR 713) and now the subject of an application for special leave to appeal to the High Court.

5 The documents which the TGA subpoena required to be produced were described in a schedule, as follows:

"Note: In this Subpoena the words "Filshie clip system" refer to the device manufactured by Femcare Limited (UK) (Femcare) and marketed and distributed in Australia by Endovasive Pty Ltd (Endovasive) and include Filshie sterilisation clips and Filshie sterilisation clip applicators.

1. Documents in relation to the investigation of the incident of failed sterilisations using the Filshie clip system reported to the TGA by the New South Wales Health Department in 1998 (the investigation) including but not limited to (excluding those created for the sole purpose of giving or obtaining legal advice):

(a) Correspondence together with all annexures to and from the New South Wales Health Department.

(b) Correspondence together with all annexures to and from Endovasive.

(c) Correspondence together with all annexures to and from Femcare.

(d) Correspondence together with all annexures to and from John Hunter Hospital.

(e) Correspondence together with all annexures to and from Hunter Area Health Service.

(f) Correspondence together with all annexures to and from any medical defence organisation including United Medical Protection, the Medical Defence Union and the Medical Protection Society.

(g) Correspondence together with all annexures to and from the Royal Australian College of Obstetricians and Gynaecologists.

(h) Correspondence together with all annexures to and from any medical practitioners other than those whose documents fall within any of the categories above.

(i) Correspondence together with all annexures to and from any legal practitioners other than those whose documents fall within any of the categories above.

(j) Correspondence together with all annexures to and from any corporations other than those whose documents fall within any of the categories above.

(k) Correspondence together with all annexures to and from any individuals other than whose documents fall within any of the categories above.

2. File notes and memoranda made in relation to the investigation.

3. Documents relating to the incidents recorded on the IRIS Database referred to in the incident reporting database entry dated 4 August 1998 (copy attached).

4. Any internal TGA reports, including draft reports, recommending action to be taken as a result of the investigation.

5. Any documents evidencing consideration being given to a recall of the Filshie clip system.

6. Any warnings, media release or other documents which refer to problems or possible problems with the Filshie clip system arising from the investigation.

7. All product information in relation to the Filshie clip system from 1981 to date.

8. Incident reports involving the Filshie clip system from 1981 to date.

9. Documents referencing the design, manufacture or product literature of the Filshie clip system."

The "incident" referred to in par 1 of that schedule is that described in the June judgment under the heading "The John Hunter "cluster" ", commencing at par 11.

6 Discussions took place between the TGA and the applicant's solicitors concerning the basis on which documents would be produced. An officer of the TGA wrote to the solicitors recording arrangements made between them as to the way in which documents would be produced:

"I confirm our arrangement that:

1. I will remove the names and all identification relating to persons who provided information about safety concerns. It is essential to the continuing provision of such information to the TGA that the persons supplying the information can be confident their identities will not be disclosed.

2. I will include the documents supplied to the TGA by Endovasive Pty Ltd being an extensive mailing list of persons with whom Endovasive do business. These documents will be in an envelope and marked `POSSIBLE CLAIM BY ENDOVASIVE OF PRIVILEGE' and comprise some 65 folio's [sic] (folio's [sic] 131 to 196 inclusive on file C98.28332). The parties can then deal with access to these documents. You have agreed to TGA dealing with these documents in this way to protect Endovasive's possible commercial concerns. The list may contain a full list of Endovasive's clients."

7 That arrangement having been made, a bundle of documents was produced to the Court. The TGA did not seek to have the subpoena set aside, nor did it appear for the purpose of arguing that any documents not be made available for inspection. The assumption underlying the arrangement recorded in the TGA's letter is, no doubt, that if a confidence would be breached by permitting inspection it would be that of Endovasive, and Endovasive itself could (and appropriately should) argue in favour of protecting it.

8 On the hearing of Endovasive's motion, counsel appeared representing certain New South Wales public hospitals. The basis on which he appeared was that subpoenas for production had been issued to a number of those hospitals and Endovasive's notice of motion sought orders not only in relation to the TGA subpoena but also in relation to the subpoenas issued to the hospitals. Counsel indicated that he had instructions to seek to set aside the subpoenas issued to the hospitals and to resist inspection, at least by the applicant, of any document which might (if the subpoenas were not set aside) be produced. Counsel indicated also that he was instructed to support Endovasive's motion in relation to the TGA subpoena, on the footing that documents produced under it might include documents which would reveal confidential matter disclosed by the public hospitals to the TGA. That is not, however, in my view a basis upon which a stranger both to the proceeding and to the subpoena should be permitted to appear in support of a motion that a subpoena be set aside. Questions of confidence can, assuming that an order permitting inspection would otherwise be made, in my view be dealt with adequately by limiting for the present the class of those who may inspect the documents and requiring those persons not to disclose their content to any other person, unless the Court otherwise orders. No doubt the hospitals might apply to the Court for permission to inspect the documents themselves: but that may well be a matter on which not only the parties but also the TGA should be heard.

9 It is important, I think, to bear in mind some particular aspects of the context in which issues concerning the TGA subpoena are to be decided. First, the subpoena was issued at an extremely early stage in the proceeding. Secondly, although the proceeding has been on foot for over fifteen months, the fourth amended statement of claim was filed only on 2 August 2000 and, although orders have recently been made for the filing and service of defences, the period within which that was directed to be done has not expired and no defences have yet been filed. Consequently, although the applicant's claims are known, the respondents' defences are not, so that precisely what is in issue and what is not await definition. Thirdly, however, the nature of the case which the applicant seeks to make, for herself and on behalf of group members, is reasonably clear and it may safely be taken, I think, that its essential elements, as pleaded, will be denied or, at least, not admitted. Fourthly, though the applicant claims that the applicator used in her operation was out of calibration, the particulars appended to the relevant paragraphs of the fourth amended statement of claim state that the operation was performed by a registrar (whose identity is not stated and, it may be taken, is not at present known to the applicant) and that particulars of the serial number of the applicator are unknown to the applicant. Fifthly, the claims made on behalf of group members are pleaded at a high level of generality (in the June judgment I held, following Philip Morris (Australia) Ltd v Nixon (2000) 170 ALR 487, that, speaking generally, this was permissible) so that, among other things, the pleading does not disclose the identity of any of the group members, the date on which any group member underwent an operation, the hospital at which the operation was performed or the name of the doctor who performed it. Sixthly, however, as the June judgment makes clear, the applicant already has a good deal of material, including documentary material, concerning the John Hunter cluster and it has for a long time been clear - and the fourth amended statement of claim makes it explicit - that that event and its sequel provide a significant element in the factual basis on which the applicant makes her claims, both for herself and for group members.

10 One aspect of the matter can, and though I think it is not controversial should, be disposed of before considering the arguments advanced by the parties. I would not now set the TGA subpoena aside merely on the basis that, had objection been taken to it at the time it was served, it would then have been set aside. I have formed no view - I have heard no argument - about whether there were circumstances justifying the issue of the TGA subpoena at the very early stage at which it was issued. It would be futile to consider that now if any problem could properly be met by issuing a new subpoena in the same terms. The question to be answered, therefore, is whether in the present circumstances the TGA subpoena should be set aside and, if not, whether and on what terms inspection should be permitted of documents produced by the TGA.

11 It is unusual, at least, that the Court should be required to consider whether a subpoena should be set aside many months after the party to whom it was addressed has produced to the Court the documents called for, having agreed with the party causing its issue as to an appropriate basis on which it would do so. In those circumstances, a submission by Endovasive that the subpoena ought now be set aside on the ground that it was oppressive must have scant prospects of success. In any case, each of the categories of documents required to be produced is discrete and limited and, on its face, appears to be a category of documents which the TGA might be expected readily to identify. That impression is confirmed by the fact that the TGA was able to identify and produce the documents - I have seen the bundle and it does not look particularly voluminous - within a relatively short period. That ground of attack on the TGA subpoena must fail.

12 The other substantial ground on which Endovasive submitted that the subpoena should be set aside was that it amounted to an attempt by the applicant to use the process of subpoena as an alternative to preliminary discovery; that is to say, in an endeavour, not to obtain evidence to support the applicant's case but to discover whether she has a case at all (Commissioner for Railways v Small (1938) 38 SR (NSW) 564 at 575). Senior counsel for Endovasive relied on Small and on a number of cases in this Court which have applied the proposition that a subpoena should not be used to discover whether an applicant has a case or for the purpose of circumventing limitations imposed by the Rules or by order on the obligation of a party to give discovery: Kizon v Palmer (1997) 75 FCR 261; Diddams v Commonwealth Bank of Australia (Branson J, 12 May 1998, unreported); Australian Competition and Consumer Commission v Shell Co of Aust Ltd (1999) 161 ALR 686; Pasini v Vanstone [1999] FCA 1271. All of those cases in this Court, however, concerned the issue of a subpoena to a party to a proceeding for the purposes of that proceeding, and the observations of Jordan CJ in Small, to which I have referred, were directed also to the case where a party to the proceeding served a subpoena on another party to the same proceeding. As the authorities make clear, particular considerations, relating to the exercise of control by the Court over the process of discovery, apply in cases of that kind. Nevertheless, it may be accepted for present purposes that there is a general principle that the compulsory process of the Court ought not be used in substitution for preliminary discovery against a third party, in order to ascertain whether an applicant has a case rather than to obtain evidence in support of a case.

13 Endovasive placed, in that context, particular reliance on circumstances concerning the case which the applicant seeks to make on behalf of group members. That case is still, as I have mentioned, pleaded at a high level of generality. Motions have been foreshadowed by both respondents, seeking orders under s 33N of the Federal Court of Australia Act that the proceeding no longer continue under Pt IVA; and directions have been made for the filing and service of notices of motion for that purpose and for their hearing. Additionally, senior counsel for Endovasive relied on a letter from the applicant's solicitors to Endovasive's solicitors dated 22 November 1999 in which, among other things, the applicant's solicitors confirmed that the applicant was unable to specify the names of any patients other than the applicant whose operations failed because an applicator which was out of calibration was used, the names of any hospitals where that happened or the names of any hospitals where it was known that an applicator at any particular time was out of calibration. The exchange of correspondence is referred to in pars 23 to 25 of the June judgment. The letter indicated, it was said, that the proceeding had been improperly commenced under Pt IVA because the requirement of s 33C(1)(a), that seven or more persons have claims against the same person, was not met.

14 The last point may be dealt with quickly. First, I am not convinced that it is clear that a failure to comply with s 33C(1)(a), at the time a proceeding is commenced, is necessarily fatal to its continuance as a proceeding under Pt IVA: Finance Sector Union of Australia v Commonwealth Bank of Australia [1999] FCA 59; (1999) 89 FCR 417. Secondly, the letter of 22 November 1999 may be evidence of the circumstances at that date but there is no reason to infer that the position remains unchanged (in this respect, I see no reason why I should disregard matters referred to in the June judgment, particularly the existence of the Queensland proceedings referred to in par 17). Thirdly, the question asked of the applicant's solicitors, to which they responded, did not exhaust the categories of group members as then defined or, as I read it, as defined in the fourth amended statement of claim. That basis for attack on the TGA subpoena accordingly fails. For reasons which will appear, I think the prospect of motions seeking orders under s 33N goes to questions of inspection rather than to the question whether the TGA subpoena should be set aside and I shall defer consideration of the submission based on that prospect.

15 The documents which the TGA subpoena required to be produced fall, in general terms, into two categories. One relates to the John Hunter cluster, the investigation of that incident by the TGA and its sequel. The other comprises product information about the Filshie system, incident reports concerning its use and documents concerning its design or manufacture. Again, there is no reason why I need disregard uncontroversial matters which were the subject of findings in the June judgment. It is evident that the applicant has a good deal of information about the John Hunter cluster and what happened as a result of it and also some product literature relating to the Filshie system. It cannot be said that there is no support in the material referred to in the June judgment for, by way of example, the propositions that applicators are finely calibrated when manufactured; that they may cease to be properly calibrated as a result of a number of causes, one being use for an extended period without servicing; and that use of an applicator which is out of calibration may lead to failure of an operation performed using the Filshie system. In those circumstances, I do not think that it can be said that the applicant has sought, by the TGA subpoena, to ascertain whether, as to those aspects of her pleading to which documents produced are likely to relate, she has a case. And the aspects of the pleading to which the documents are likely to relate are relevant as much to her own claims as to those which she makes on behalf of group members. There is no suggestion that, if an order were made under s 33N, the applicant's own case would not proceed: it is the professed wish of the respondents that that case proceed without delay. Nor, I think, does it matter for present purposes that defences have not yet been filed: it must be the case that, if the matter proceeds in any form, matters which the documents may be expected to reveal will be relevant to significant matters in controversy between the parties.

16 For those reasons, which I believe are consistent with the discussion of the principles by Moffitt P (with whom Hutley and Glass JJA agreed) in Waind v Hill [1978] 1 NSWLR 372 at 381, 382, I decline to set the TGA subpoena aside.

17 There remains the question whether, and on what basis, inspection of the documents produced to the Court by the TGA should be permitted. The Court of Appeal in Waind treated the question whether the Court will permit inspection of documents produced by a stranger, in accordance with a valid subpoena, as involving principally the rights of the stranger, whose documents they are. Moffitt P, however, added this, at 385, 386:

"The discretion [to permit inspection] is one concerning the invasion by the subpoena procedure of the rights of a stranger by the party who seeks inspection in aid of the presentation of his case to the court. No right of the opposing party is involved in making an order permitting inspection of a stranger's documents. It is difficult to see on what basis he can object. His right is to have only admissible evidence adduced. The exercise of the discretion does not involve the determination of an issue between the parties as to the relevance or admissibility of the document. It may well be, however, that the judge may hear, or indeed invite, comment from an opposing party, if the documents are such that elucidation of the truth may best be served by delaying inspection, or because the documents reveal matter private to such party or his associates and is irrelevant to the proceedings. This may well be the case where the documents are produced ... by some public authority and contain private matter, but the authority raises no specific objection on the presumed basis that it is the court's responsibility to permit or refuse inspection. It follows that a party ... has no right to object to the judge allowing the other party ... to inspect a stranger's documents, or to appeal if the judge allows inspection.

18 This is a case where it is said that it is inappropriate that inspection should be allowed of documents which might reveal matter presently unknown to the applicant relevant to the claims made on behalf of group members and concerning, among other things, the identity of hospitals which may have been found to have had (or to have been using) applicators which were out of calibration. There might, no doubt, be two bases for such an argument, one that inspection for such a purpose (or calculated to have such a result) should be regarded as impermissible fishing, the other that in any event the question whether this proceeding should continue under Pt IVA is controversial and is yet to be resolved, so that it is inappropriate that the applicant should have access to such information until it is clear that she can proceed on behalf of the group members.

19 I would not uphold either of those arguments. It is an inevitable aspect of proceedings under Pt IVA, I should think, that in many cases a substantial number of members of the represented group will be unknown. I do not think that to use the Court's processes, including the subpoena for production, in order to ascertain who members of the group are and relevant information concerning their claims, is necessarily improper. No doubt there must be a foundation for that use. In this case, I do not see why the John Hunter cluster, and its aftermath, should not be thought a proper foundation for it. The argument that inspection should await the outcome of any s 33N motions assumes, I think, that it would be improper to use a subpoena for the purpose of obtaining evidence of the kind contemplated for use in an application under s 33N; but I see no reason to think that that assumption is well founded.

20 It was submitted on behalf of Endovasive that inspection ought to be refused, or at least that Endovasive ought to have the right to inspect before other parties, because included among the documents sought (and, as the letter from the TGA in response to the subpoena makes clear, provided) were documents given to the TGA by Endovasive which included confidential information. Endovasive, presumably, knows what it provided to the TGA. No one on behalf of Endovasive gave evidence as to particular categories of confidential information included in any documents which it provided. The letter from the TGA indicates, of course, that there is a list of Endovasive's customers among the documents produced. It may, no doubt, be taken that that document, at least, or documents containing that information, are confidential and commercially sensitive. There was a suggestion also that the documents produced might include some in relation to which Endovasive was entitled to legal professional privilege. But, again, Endovasive must be taken to know what it provided. Certainly it does not say that it does not know. It has not attempted to establish by evidence that, among the documents produced, there may be communications in relation to which Endovasive has a claim of legal professional privilege.

21 No party has invited me to inspect the documents and in the circumstances I see no need to do so. No reason is made out, in accordance with the principles stated in Waind, to refuse inspection. Because it seems highly probable that the documents disclose confidential information of Endovasive which has commercial importance, and because it may be that they disclose other confidential information as well, inspection should, in the first instance, be limited to legal advisers (it may be appropriate to name particular legal advisers) of the parties, who will be bound not to disclose the contents of the documents to other persons without leave of the Court.

22 It may be hoped that, with that indication of my views, the parties will be in a position to agree a form of order. If not, the matter may be listed by arrangement with my associate for the purpose of settling the order. Endovasive should pay the applicant's costs of the applicant's motion and (which is no doubt substantially the same thing) those aspects of Endovasive's motion with which these reasons are concerned. The applicant seeks an order that those costs be paid on the indemnity basis. I see no reason why the usual party/party basis is not appropriate, but if the applicant seeks to press for the other basis she may do so when the matter is next before me.

I certify that the preceding twenty-two (22) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lehane.

Associate:

Dated: 22 August 2000

Counsel for the Applicant:	A J L Bannon SC J Clarke
Solicitor for the Applicant:	Maurice Blackburn Cashman
Counsel for the First Respondent:	B W Walker SC
Solicitor for the First Respondent:	Freehill Hollingdale & Page
Counsel for the Second Respondent:	P J Deakin QC I Butcher
Solicitor for the Second Respondent:	Sparke Helmore
Date of Hearing:	9 August 2000
Date of Judgment:	22 August 2000