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Federal Court of Australia |
Last Updated: 19 July 2010
FEDERAL COURT OF AUSTRALIA
Pharm-a-Care Laboratories Pty Ltd v Commonwealth of Australia (No 4) [2010] FCA 749
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Citation:
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Pharm-a-Care Laboratories Pty Ltd v Commonwealth of Australia (No 4) [2010]
FCA 749
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Parties:
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File number:
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NSD 1991 of 2008
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Judge:
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FLICK J
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Date of judgment:
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Catchwords:
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Legislation:
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Cases cited:
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Australian Competition and Consumer Commission
v Chats House Investments Pty Limited (1996) 71 FCR 250,
cited
Courtney v Medtel Pty Ltd [2001] FCA 1037, followed Crawford v Bank of Western Australia Ltd [2005] FCA 949, cited Guglielmin v Trescowthick (No 2) [2005] FCA 138, 220 ALR 515, cited Jarra Creek Central Packing Shed Pty Ltd v Amcor Limited [2008] FCA 575, cited Johnstone v HIH Ltd [2004] FCA 190, cited King v GIO Australia Holdings Ltd [2000] FCA 1869, cited King v GIO Australia Holdings Ltd [2001] FCA 270, followed Pharm-a-Care Laboratories Pty Ltd v Commonwealth of Australia (No 3) [2010] FCA 361, cited Vernon v Village Life Ltd [2009] FCA 516, cited Williams v FAI Home Security Pty Ltd (No. 3) [2000] FCA 1438, followed |
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Date of hearing:
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15 July 2010
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Place:
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Sydney
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Division:
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GENERAL DIVISION
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Category:
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Catchwords
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Number of paragraphs:
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39
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Counsel for the Applicant:
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Mr M Darke
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Solicitor for the Applicant:
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McLachlan Thorpe Partners
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Counsel for the First Respondent:
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Mr P Brereton SC
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Solicitor for the First Respondent:
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Corrs Chambers Westgarth
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Counsel for the Second to Sixth Respondents:
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Mr D H Mitchell
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Solicitor for the Second to Sixth Respondents:
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Moray & Agnew Solicitors
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AND:
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TERRY SLATER
Second Respondent RITA MACLACHLAN
Third Respondent PIO CESARIN
Fourth Respondent ROBERT TRIBE
Fifth Respondent NOEL FRASER
Sixth Respondent |
THE COURT ORDERS THAT:
(i) the proceeding has been set down for hearing for a period of three months commencing on 7 March 2011;
(ii) the Individual Respondents were each officers of the Therapeutic Goods Administration;
(iii) it is the Commonwealth acting through the Therapeutic Goods Administration which is alleged to have acted negligently;
(iv) the sources at which relevant documents may be obtained being separately identified in the manner set forth in the “sample form” annexed to Practice Note CM 17;
(v) the sources themselves being separately identified as set forth in that “sample form”; and
(vi) subject to the form including the dates now fixed pursuant to these orders
the form and content of that notice is approved for the purposes of s 33Y(2) of the Federal Court of Australia Act 1976 (Cth).
(i) cause to be posted on the Federal Court website; and
(ii) cause to be available for inspection at the District Registry of the Federal Court in Sydney, Canberra, Melbourne, Brisbane, Adelaide, Perth, Hobart and Darwin
the Amended Application, the Further Amended Statement of Claim and Defences as filed in this proceeding.
Note: Settlement and entry of orders is dealt with in
Order 36 of the Federal Court Rules.
The text of entered orders can be
located using Federal Law Search on the Court’s website.
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BETWEEN:
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PHARM-A-CARE LABORATORIES PTY LTD (ACN 003 468
219)
Applicant |
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AND:
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COMMONWEALTH OF AUSTRALIA
First Respondent TERRY SLATER
Second Respondent RITA MACLACHLAN
Third Respondent PIO CESARIN
Fourth Respondent ROBERT TRIBE
Fifth Respondent NOEL FRASER
Sixth Respondent |
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JUDGE:
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FLICK J
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DATE:
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15 JULY 2010
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PLACE:
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SYDNEY
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REASONS FOR JUDGMENT
THE REPRESENTATIVE PROCEEDING — THE EVENTS TO DATE
PART IVA — THE FORM AND CONTENT OF AN OPT-OUT NOTICE
Right of group member to opt out
(1) The Court must fix a date before which a group member may opt out of a representative proceeding.
(2) A group member may opt out of the representative proceeding by written notice given under the Rules of Court before the date so fixed.
(3) The Court, on the application of a group member, the representative party or the respondent in the proceeding, may fix another date so as to extend the period during which a group member may opt out of the representative proceeding.
(4) Except with the leave of the Court, the hearing of a representative proceeding must not commence earlier than the date before which a group member may opt out of the proceeding.
Notice must be given to group members of the following matters in relation to a representative proceeding:
(a) the commencement of the proceeding and the right of the group members to opt out of the proceeding before a specified date, being the date fixed under subsection 33J(1); ...
The remaining provisions of s 33X(1) deal with applications for dismissal of a proceeding for want of prosecution and an application to withdraw under s 33W. Those provisions are of no present relevance. Of relevance, however, are the terms of s 33Y which provides as follows:
Notices – ancillary provisions
(1) This section is concerned with notices under section 33X.
(2) The form and content of a notice must be as approved by the Court.
(3) The Court must, by order, specify:
(a) who is to give the notice; and
(b) the way in which the notice is to be given;
and the order may include provision:
(c) directing a party to provide information relevant to the giving of the notice; and
(d) relating to the costs of notice.
(4) An order under subsection (3) may require that notice be given by means of press advertisement, radio or television broadcast, or by any other means.
(5) The Court may not order that notice be given personally to each group member unless it is satisfied that it is reasonably practicable, and not unduly expensive, to do so.
(6) A notice that concerns a matter for which the Court’s leave or approval is required must specify the period within which a group member or other person may apply to the Court, or take some other step, in relation to the matter.
(7) A notice that includes or concerns conditions must specify the conditions and the period, if any, for compliance.
(8) The failure of a group member to receive or respond to a notice does not affect a step taken, an order made, or a judgment given, in a proceeding.
On 28 June 2010 the current Chief Justice of this Court issued Practice Note CM 17. It commenced on 5 July 2010 and applies, as far as circumstances permit, to both existing representative proceedings and future such proceedings. That Practice Note usefully sets forth a “sample form” of notice.
[14] In our opinion, the notice in its current form is capable of creating a misleading impression in group members who receive it. In particular, they may be led to believe that MBC will act on behalf of the applicant, insofar as he seeks damages and other relief on behalf of group members, to the point of judgment. This impression would not be accurate, since MBC will act on behalf of a group member to establish the individual elements of his or her cause of action (notably reliance, causation and loss or damages) only if that group member enters into a Fee and Retainer Agreement. In other words, in the absence of a global settlement approved by the Court, an individual group member cannot obtain a favourable judgment without engaging a lawyer or representing himself or herself.
[15] This misleading impression might well affect the decision of a group member whether or not to opt out of the proceedings. The principal purpose of the notice given under s33X(1)(a) and s33Y(2) is to ensure that group members can make an informed decision concerning their rights: see Law Reform Commission, Grouped Proceedings in the Federal Court (Report No 46, 1988), para188, para190; Femcare Ltd v Bright [2000] FCA 512; (2000) 100 FCR 331, at 336-337, 349. We do not think it is an answer, as Mr Burnside QC (who appeared with Ms Hanscombe for the applicant) suggested it was, that a group member who is misled by the form of notice approved by the Court could apply for and expect to receive an extension of the period during which he or she can opt out of the representative proceeding: s33J(3). The represented group is large and group members are likely to have widely varying degrees of understanding of the claims made on their behalf and the possible outcomes of representative proceedings. It is important that any decision they make concerning opting out of the proceedings not be based on a notice that is apt to mislead them.
[16] We agree with the primary Judge that clarity and simplicity are essential if a notice is to have its intended effect. We also agree that an attempt to provide detailed information is likely to create more difficulties than it resolves. Nonetheless, we think that, in order to remove the misleading impression to which we have referred, group members should be informed that, unless the proceedings are settled, MBC will not represent them to the point of judgment unless they assume a responsibility for their own legal fees.
It is “imperative that any communications made to group members, ... be accurate”: Williams v FAI Home Security Pty Ltd (No. 3) [2000] FCA 1438 at [24] per Goldberg J.
[10] It is also important to bear in mind that, as was said by Wilcox J in McMullin v ICI Australia Operations Pty Ltd (1998) 156 ALR 257, at 260:
“Any notice that is to be issued to members of the public in connection with a representative proceeding must be readily comprehensible by non-lawyers. It should be written in plain English.”
[11] I would add a further observation. Any opt-out notice should be framed so as not to cause unnecessary alarm or distress to intended recipients. Practising lawyers, and for that matter judges, may tend to underestimate the impact that publication or service of a Court ordered notice may have on members of the represented group. The recipients of a notice under s33X of the Federal Court Act may become anxious when they learn for the first time of legal proceedings which may affect their legal rights and in respect of which they must decide whether or not to participate. They may be concerned by technical language that is difficult to understand. The notice may also alert them, particularly in personal injury cases, to the possibility that they are at risk of future harm. People who are at risk of harm or who are otherwise vulnerable, such as elderly persons, may be particularly susceptible to anxiety or distress. Notices must be accurate but should be drafted with sensitivity to these considerations.
It is, accordingly, of importance to ensure that a notice does not contain unnecessary information which may simply have the potential to either confuse or intimidate the persons to whom it is addressed. The nature of the information being communicated may well depend upon the issues being advanced for resolution in the representative proceeding itself – the more complex a proceeding may be, the greater may be the need to include more rather than less information. Inevitably a balance may have to be struck when approval is sought in respect to each individual proceeding.
When fixing a date pursuant to s 33J(1), the task of the Court is to
[105] The Court has an important and continuing role in managing representative proceedings in the public interest to rectify any potentially misleading communications to class members or potential class members, in order to ensure that there is no misunderstanding engendered by such communications, particularly when they emanate from legal advisers, as to rights and obligations and procedures to be followed by recipients of such communications.
In an appropriate case, an order may thus be made that a correcting notice may be issued to remedy any misstatements that may be made during the course of a proceeding: Jarra Creek Central Packing Shed Pty Ltd v Amcor Limited [2008] FCA 575.
THE FORM AND CONTENT OF THE OPT-OUT NOTICE
The sample form of notice set forth in Practice Note CM 17, it may be noted, variously refers to a “class member” and a “group member”. The form of proposed notice annexed to the Notice of Motion refers throughout to “group member”, but nothing presently turns upon any difference in terminology.
This proceeding has been set down for hearing for a period of up to three months commencing on 7 March 2011.
In some – perhaps many representative proceedings – it may not be possible in the notice forwarded to group members to notify them of the date a hearing is set down to commence. But where a proceeding has been set down for hearing, group members should be notified of that fact. It is a proceeding, after all, being pursued by an Applicant on its own behalf and on behalf of group members. They may wish to attend.
The Pharm-a-care class action
The class action, Federal Court proceeding NSD 1991/2008, is brought by Pharm-a-care (the Applicant) on its own behalf and on behalf of all persons who are group members as defined in the Amended Application. (That definition is referred to below under the heading “Are you a group member?”.)
The Respondents to the class action are the Commonwealth of Australia (the Commonwealth), Terry Slater, Rita MacLachlan, Pio Cesarin, Robert Tribe and Noel Fraser (the Individual Respondents).
The Applicant’s claim centres on the decisions of one or more of the Individual Respondents to:
• suspend Pan’s licence under the Therapeutic Goods Act 1989 (Cth) (TG Act) without giving notice to Pan (Pan Suspension);
• cancel from the register of therapeutic goods all products manufactured by Pan under section 30(1)(a) of the TG Act without giving notice to Pan (Pan Cancellation);
• require Pan, under section 30(6) of the TG Act, to undertake a mandatory safety related consumer level recall of all products manufactured by Pan “since 1 May 2002” which were registered with the TGA against Pan’s name as a sponsor (Pan Recall);
• impose a condition, under sub section 28(3) and 28(4)(a) of the TG Act, on the registration or listing of all products manufactured by Pan that Pan Sponsors cease supply of all products manufactured by Pan since 1 May 2002 (Sponsor Prohibition on Supply); and
• “strongly encourage” all Pan Sponsors to immediately undertake a voluntary safety related recall of all batches of products manufactured by Pan since 1 May 2002 (Sponsor Voluntary Recall),
and the subsequent implementation of those decisions, as well as the publication of advertisements and warnings to the public in newspapers and on the TGA website advising consumers that Pan’s products were unsafe (Pan Consumer Warnings).
In general terms, the Applicant claims that each of the Pan Suspension, the Pan Cancellation, the Pan Recall, the Sponsor Prohibition on Supply, the Sponsor Voluntary Recall and a direction to make the Pan Consumer Warnings, was an invalid or unauthorised act or omission, done knowingly or maliciously in abuse of power by a public officer (being one or other of the Individual Respondents) in the purported discharge of their public duties, which caused loss or harm to the Applicant and the group members. The Applicant claims that such conduct constitutes the tort of misfeasance in public office and that each of the Individual Respondents is liable directly or as a joint tortfeasor in respect of those torts, and that the Commonwealth is liable vicariously for the conduct of the Individual Respondents.
The Applicant also claims that the Commonwealth acted:
The Applicant claims that this conduct constitutes the tort of negligence and that the Commonwealth is liable in respect of those torts.
The Respondents deny the allegations and are defending the class action.
The specific allegations made by the Applicant in the class action are set out in the Further Amended Statement of Claim. Relevant documents also include the Amended Application and the Defences. Copies of these documents may be obtained by inspecting them on the Federal Court website: www.fedcourt.gov.au or by visiting a District Registry of the Federal Court in Sydney, Canberra, Melbourne, Brisbane, Adelaide, Perth, Hobart or Darwin: the addresses for these registries are available at www.fedcourt.gov.au or by calling the District Registry of the Federal Court of Australia. You can also inspect these documents, by appointment, between 9am and 5pm at the offices of McLachlan Thorpe Partners, the Applicant’s solicitor, at level 21, 1 Castlereagh Street, Sydney, NSW, 2000 (see the contact details below).
The Respondents to the class action are the Commonwealth of Australia (the Commonwealth), Terry Slater, Rita MacLachlan, Pio Cesarin, Robert Tribe and Noel Fraser (the Individual Respondents). The Individual Respondents were each officers of the Therapeutic Goods Administration.
A related amendment is addressed to that part of the notice which sets forth the fact that the Applicant “claims that the Commonwealth acted: ... negligently”. Although the Further Amended Statement of Claim identifies the Therapeutic Goods Administration as the entity which owed the various duties of care and which is alleged to have breached those duties, paragraphs [7] and [8] of the Further Amended Statement of Claim earlier plead the involvement of the Commonwealth as follows:
Notwithstanding paragraphs [7] and [8], and an accepted objective of keeping the proposed notice as simple and as concise as possible, it is nevertheless considered that the statement “that the Commonwealth acted: ... negligently” should be amended such that the following italicised words be inserted:
The Applicant also claims that the Commonwealth acting through the Therapeutic Goods Administration acted: ...
This amendment simply attempts to summarise the allegations as presently set forth in the Further Amended Statement of Claim.
(i) deleted from where it presently appears in the form of proposed notice and relocated under the separate heading – i.e., “Where can you obtain copies of relevant documents?” – in accordance with the sample form annexed to Practice Note CM 17;
and that:
(ii) each of the separate “sources” from which relevant documents may be obtained should also be separately identified, again as set forth in Practice Note CM 17.
CONCLUSIONS
ORDERS
(i) the proceeding has been set down for hearing for a period of three months commencing on 7 March 2011;
(ii) the Individual Respondents were each officers of the Therapeutic Goods Administration;
(iii) it is the Commonwealth acting through the Therapeutic Goods Administration which is alleged to have acted negligently;
(iv) the sources at which relevant documents may be obtained being separately identified in the manner set forth in the “sample form” annexed to Practice Note CM 17;
(v) the sources themselves being separately identified as set forth in that “sample form”; and
(vi) subject to the form including the dates now fixed pursuant to these orders
the form and content of that notice is approved for the purposes of s 33Y(2) of the Federal Court of Australia Act 1976 (Cth).
(i) cause to be posted on the Federal Court website; and
(ii) cause to be available for inspection at the District Registry of the Federal Court in Sydney, Canberra, Melbourne, Brisbane, Adelaide, Perth, Hobart and Darwin
the Amended Application, the Further Amended Statement of Claim and Defences as filed in this proceeding.
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I certify that the preceding thirty-nine (39) numbered paragraphs are a
true copy of the Reasons for Judgment herein of the Honourable
Justice
Flick.
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Dated: 19 July 2010
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