Australian Medic-Care Company Ltd v Hamilton Pharmaceutical Pty Limited

[2008] FCA 924

FEDERAL COURT OF AUSTRALIA

Australian Medic-Care Company Ltd v Hamilton Pharmaceutical Pty Limited
ACN 008 204 635  (No 2) [2008] FCA 924

AUSTRALIAN MEDIC-CARE COMPANY LTD v HAMILTON PHARMACEUTICAL PTY LIMITED ACN 008 204 635

SAD 17 OF 2007

BESANKO J
13 JUNE 2008
ADELAIDE

IN THE FEDERAL COURT OF AUSTRALIA
SOUTH AUSTRALIA DISTRICT REGISTRY	SAD 17 of 2007

BETWEEN:

AUSTRALIAN MEDIC-CARE COMPANY LTD
Applicant

AND:

HAMILTON PHARMACEUTICAL PTY LIMITED
ACN 008 204 635
Respondent

AND:

HAMILTON PHARMACEUTICAL PTY LIMITED
ACN 008 204 635
Cross-Claimant

AND:

AUSTRALIAN MEDIC-CARE COMPANY LTD
First Cross-Respondent

KENNETH KIN WAH KEUNG
Second Cross-Respondent

JUDGE:	BESANKO J
DATE:	13 JUNE 2008
PLACE:	ADELAIDE

REASONS FOR RULING

1. The applicant and first cross-respondent to this proceeding, Australian Medic-Care Company Ltd, and the second cross-respondent, Dr Keung, have applied for orders under O 15, r 8 of the Federal Court Rules in relation to various classes of documents. I ruled that an order should not be made in relation to the first class of documents, namely, “[f]inancial and management accounts from 1997 to present.”

   The accounts referred to in this description are those of Hamilton Pharmaceutical Pty Ltd. I have been asked to give reasons for my ruling. These are my reasons.

2. The applicant submits that the financial and management accounts from 1997 to the present of Hamilton Pharmaceutical relate to two matters in question in the proceeding. First, it contends that by a cross claim Hamilton Pharmaceutical has made a claim for breach of confidence against it (and Dr Keung) and the documents would be relevant to any damages Hamilton Pharmaceutical has suffered as a result of the breach of confidence, assuming such a breach is established. The applicant’s submission encounters three difficulties. First, Hamilton Pharmaceutical does not claim damages against the applicant for breach of confidence. Hamilton Pharmaceutical claims an account of profits in relation to the alleged breach of confidence. The applicant’s response to this difficulty was to say that when it files its defence to the breach of confidence claim it will plead that if Hamilton Pharmaceutical is entitled to relief (which is denied) it is by way of an award of damages. It is not clear to me how this in turn would lead to Hamilton Pharmaceutical making a claim for damages. Secondly, insofar as the claim against the applicant Dr Keung is based on an equitable obligation of confidence, it is not clear to me, despite the applicant’s reference to Seager v Copydex Ltd [1967] 2 All ER 415 that an award of damages is a remedy available to Hamilton Pharmaceutical. (See Meagher, Gummow and Lehane’s Equity Doctrine and Remedies, Meagher, Heydon and Leeming (4^th ed, Butterworth’s LexisNexis Australia 2002) at [41-135]. Thirdly, even if the difficulties previously referred to are overcome it is not clear whether, should a claim for damages be brought by Hamilton Pharmaceutical, the claim would be formulated in a way which would mean that the documents sought are relevant.

3. The second basis upon which the application was brought was an assertion that the profitability of the relationship between the applicant and Hamilton Pharmaceutical was relevant. It was said by the applicant that in the evidence so far filed by Hamilton Pharmaceutical that company has raised the profitability of its relationship with the applicant. I asked counsel for the applicant how this matter was relevant to the issues in the action. Counsel indicated that it was relevant to the clause in the agreement dealing with the circumstances in which it could be brought to an end. I was referred to the relevant passages in the evidence filed by Hamilton Pharmaceutical. It seemed to me that the evidence to which I was referred related to the circumstances as they were before the parties entered into the distribution agreement. Documents relating to the period 1997 onwards cannot be relevant in those circumstances. Even if the evidence related to the period from 1997 onwards, I cannot see how that is relevant to a clause in the distribution agreement dealing with the circumstances in which it could be brought to an end.

4. It was for these reasons that I refused to make an order under O 15, r 8 in relation to the class of documents described as “[f]inancial and management accounts from 1997 to present”.

I certify that the preceding four (4) numbered paragraphs are a true copy of the Reasons for Ruling herein of the Honourable Justice Besanko.

Associate:

Dated:        13 June 2008

Counsel for the Applicant/First Cross-Respondent and Second Cross-Respondent:	Ms A Barnett
Solicitor for the Applicant/ First Cross-Respondent and Second Cross-Respondent:	Piper Alderman
Counsel for the Respondent/ Cross-Claimant:	Mr T Cox
Solicitor for the Respondent/Cross-Claimant:	Crawford Legal

Date of Hearing:	6 June 2008
Date of Ruling:	13 June 2008