Bateley v Land

[2001] NSWSC 64

CITATION:	Bateley v Land & Anor [2001] NSWSC 64
FILE NUMBER(S):	SC 11765/90
HEARING DATE(S):	12 February 2001
JUDGMENT DATE:	21 February 2001
PARTIES :	Christopher Mark Bateley (Plaintiff) v Dr William A Land (First Defendant) Roche Products Pty Limited (Second Defendant)
JUDGMENT OF:	Davies AJ at 1

COUNSEL :	P: Mr D E Graham 1D: mentioned for 2D: Mr H J Marshall
SOLICITORS:	P: Maurice Blackburn Cashman 1D: Blake Dawson Waldron 2D: Clayton Utz
CATCHWORDS:	Practice - Amendment of Statement of Claim - no point of principle
LEGISLATION CITED:	Sale of Goods Act 1923, s 19 Trade Practices Act 1974, ss 74B, 74D Limitation Act 1969, s 14 Supreme Court Rules 1970, Pt 20 r 4
CASES CITED:	Birks - Introduction to the Law of Restitution
DECISION:	See paragraph 29.

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION
PROFESSIONAL NEGLIGENCE LIST

DAVIES AJ

WEDNESDAY, 21 FEBRUARY 2001

11765/90 - CHRISTOPHER MARK BATELEY
v
DR WILLIAM A LAND & ANOR
JUDGMENT

1    HIS HONOUR: This is an application to amend the Statement of Claim. On the motion, Mr D E Graham of counsel appeared for the plaintiff and Mr H J Marshall of counsel appeared for the second defendant. The solicitors for the first defendant have written to say that they do not wish to contest the application.

2    It appears that, for some months on and from 27 April 1984, the plaintiff was treated for cystic acne by the first defendant, Dr W A Land, involving the use of the drug Roaccutane. This drug was produced and distributed by the second defendant, Roche Products Pty Ltd (“Roche”). It is alleged that the plaintiff had a very serious adverse reaction to the drug leaving him with permanent problems.

3 In a Statement of Claim filed on 20 April 1990, almost eleven years ago, the plaintiff alleged failure by Dr Land to use due skill and care in his treatment. The plaintiff alleged that the treatment was effected pursuant to an agreement between himself and Dr Land and also between himself and Roche. The plaintiff alleged that Roche failed to exercise reasonable care not to injure him. Reliance was also placed upon the statutory provisions with respect to merchantable quality contained in s 19 of the Sale of Goods Act, 1923 and s 74B and s 74D of the Trade Practices Act, 1974 (Cth).

4    The proposed Amended Statement of Claim alleges that the drug Roaccutane was used on the plaintiff in the course of a trial of that drug conducted by the first and second defendants. The plaintiff alleges that there was an agreement between himself and the two defendants.

5    On 24 March 1982, Roche had submitted to the Department of Health an application for approval to market Roaccutane generally. This application was not finally determined until 7 March 1985 when approval was given. In the meantime, among other investigations that were undertaken, approval for the use of the drug could be obtained from the Department of Health in respect of specific patients.

6    In April 1984, on the application of a Dr J F Scattini, the Department of Health gave permission for the use of the drug on the plaintiff, but the approval noted that the clinical use of the drug must be regarded both legally and medically as experimental. The letter required, inter alia, that the principles set out in the National Health and Medical Research Council’s “Statement on Human Experimentation” be followed and that details of any suspected adverse drug reactions, predictable or otherwise, be reported as soon as possible to the Australian Drug Evaluation Committee. A copy of the approval was sent to the Managing Director of Roche for information with a note which provided that a summary of case reports received should be submitted to the Department at regular intervals.

7    It is alleged in the proposed Amended Statement of Claim that, by proceeding with the trial, the first and second defendants either impliedly or expressly entered into an agreement with the plaintiff and agreed to the terms and conditions set out in the Department’s letter of approval. If the letter of approval be looked at on its own, the matter appears to have proceeded by way of an application by a medical practitioner to the Department of Health for approval to use the drug in the course of the treatment of a patient.

8    Other material suggests, nevertheless, that Roche had at least some interest in the treatment of individual patients in this way. There is in evidence, for the purposes of this motion, a Protocol published by Roche which was designed to establish parameters for individual patient usage of Roaccutane in Australia. The Protocol stated one of its objectives as being, “To obtain experience with Roaccutane in Australia under controlled conditions”. Criteria for a patient’s selection were stated and also relevant factors with relation to clinical evaluation. The Protocol spoke of “the study” and provided that:-

“ ALL DATA MUST BE COMPLETED TO ALLOW FULL INTERPRETATION OF THE STUDY. The originals will be sent to Roche Products Pty. Limited and copies maintained in the investigator’s file.”

9    The Protocol provided that, “The study will be monitored in person and by telephone at appropriate intervals by representatives of the Sponsor”. There appears to be a dispute as to whether Roche was the relevant “Sponsor”.

10    It is clear that a principal issue in the case will be whether the treatment of the plaintiff should be considered as merely the individual treatment of a patient by his doctor or whether the treatment was part of an ongoing trial of the new drug, Roaccutane, in which the plaintiff and the two defendants all took part with others. This was an issue which was raised by the 1990 Statement of Claim although it is expressed more clearly in the proposed Amended Statement of Claim.

11    One new issue of fact which is sought to be raised concerns the treatment by another medical practitioner of another patient, Justin Abrahams, in the middle of 1983. Mr Abrahams had adverse reactions to the drug Roaccutane which were similar to those later suffered by the plaintiff. The allegation which is sought to be raised is that, although Roche did not become aware of the adverse reactions of Justin Abrahams until about July 1984, about the time when the plaintiff’s treatment was concluding, Roche failed in its duty to the plaintiff by failing to monitor Mr Abrahams’ response to the drug.

12    It seems to me that, although this allegation raises an additional issue of fact, it falls within the ambit of the allegations made in the 1990 Statement of Claim and that the amendment should be allowed. Roche should not be prejudiced by the delay which has occurred as Roche was, until recently, a defendant to legal proceedings instituted by Mr Abrahams. Roche should be well aware of the facts surrounding the treatment of Mr Abrahams.

13    A more important allegation made in the proposed Amended Statement of Claim is that the circumstances were such that each of the first and second defendants had a fiduciary duty to the plaintiff. No purpose would be served by discussing the law on fiduciary duty or by forming any view about the prospects of success of this allegation. In my opinion, the amendments sought in this respect should be allowed. It will be incumbent upon the Court to determine the nature of the relationship, if any, which existed between the plaintiff and each of the defendants and it will be necessary for the Court to determine the duties, if any, which each defendant owed to the plaintiff. Accordingly, to add an allegation of breach of fiduciary duty adds little to the claims already made. The 1990 Statement of Claim already makes relevant the circumstances under which the treatment of the plaintiff was carried out.

14    Paragraph 13 of the proposed Amended Statement of Claim alleges fiduciary relationships. So far as Roche is concerned, it alleges breach of fiduciary duty in paragraph 47. Paragraph 47 sets out the following two allegations of breach:-

“(a) permitted a conflict, or the possibility of a conflict, to develop between its own interest and its duty to the plaintiff.

(b) failed to disclose material facts prior to the plaintiff agreeing to undergo the IPU trial and enter the IPU agreement.”

15    Both allegations are then followed by the heading “Particulars” and paragraphs (a) to (f). So far as I can see, the only particulars given of the above breaches are the following:-

“…

(c) The second defendant failed to monitor the IPU trials of Justin Abrahams and the plaintiff;

(d) The second defendant failed to advise the Commonwealth Department of Health of the adverse reactions to Roaccutane of Justin Abrahams and the plaintiff;

…

(f) the second defendant did not disclose the fact that it would not follow the protocol and the NHMRC statement or that it had not adequately monitored the IPU trial of Justin Abrahams.”

16    Of the other paragraphs under the heading “Particulars”, (a) and (b) allege facts which may be relevant to the existence of a fiduciary duty but they do not set out particulars of breach. Particular (e) is also not a particular of breach. It may allege a further ground of breach of duty. However, it does not raise any particular matter of fact and would not seem to advance the plaintiff’s case.

17    Particulars (c), (d) and (f) do not expressly say so but probably they infer that Roche did not inform the plaintiff or Dr Land of the adverse reactions to Roaccutane of Justin Abrahams. Presumably, the particulars are intended to encompass an allegation that Roche did not monitor the treatment of Justin Abrahams and that, if Roche had done so and had reported his adverse reaction to the Department of Health as soon as possible, approval of the treatment of the plaintiff with Roaccutane may have been refused. I consider that these allegations are relevant and that Roche would not be unduly prejudiced by having to meet them.

18    I shall permit paragraph 47 to be redrawn so as to make these allegations clear. Particulars (a), (b) and (e) should be omitted.

19    The proposed new paragraphs 49-52 raise an allegation of a different type alleging, in substance, that Roche would be unjustly enriched by the plaintiff’s participation in the trial if the plaintiff was not compensated for the loss of damage suffered through such participation. The allegation is complicated by the following particular given of the pecuniary and commercial benefits alleged to have been obtained by Roche:-

“(a) The plaintiff’s participation in the IPU Trial was known and recorded by the second defendant and the Commonwealth Department of Health. Without notification of the plaintiff’s adverse reaction from the second defendant, the Department of Health was likely to have considered that Roaccutane was safe and efficacious, thereby granting general marketing approval to the second defendant;”

20    This appears to make an allegation of a wrongful failure on the part of Roche to disclose the adverse reaction to the Roaccutane which the plaintiff suffered. It appears the allegation is that Roche was unjustly enriched by obtaining approval for general marketing of the drug Roaccutane which it would not have obtained had the plaintiff’s adverse reactions been disclosed to the proper authorities and that it would be unfair for Roche to retain that benefit without compensating the plaintiff for his sufferings.

21    In my opinion, this allegation has no prospects of success. The failure to report the plaintiff’s adverse reactions played no causal part whatsoever in the injuries, pain and suffering which are the subject of the plaintiff’s claim in these proceedings. If a wrongful act having significant consequences occurred, it was a wrong constituted by a breach of a duty which Roche owed to the Department of Health. I cannot think of any form of legal reasoning which would turn a failure on the part of Roche to notify the appropriate authorities about the plaintiff’s condition into the basis of a claim by the plaintiff for compensation for his loss and suffering. The facts sought to be pleaded do not show that Roche was unjustly enriched at the expense of the plaintiff. Counsel for the plaintiff did not suggest that there was any precedent for the claim. If there was a wrong on Roche’s part which contributed causally to the plaintiff’s sufferings, that wrong will lead to compensation based on principles other than that of restitution.

22    The first reason, therefore, for rejecting this proposed amendment is that it has no basis. A second reason is that the plaintiff seeks to turn the proceedings into proceedings of an entirely different type. The new allegation would involve a full investigation into the circumstances in which Roche obtained approval for the general marketing of the drug. This would involve investigating all the information that was made available to the Department of Health and the Australian Drug Evaluation Committee and, if it be the case that information about Mr Abrahams’ adverse drug reaction and the plaintiff’s reaction was not communicated, to form a view as to what would have been the likely responses of those authorities had that information been available to them. Evidence by experts on this subject would have to be given. Evidence as to the performance of the drug after marketing approval was granted would be relevant. Such a case would introduce matters of a totally different type from those which were raised by the 1990 Statement of Claim.

23    In my opinion, having regard to the delay which has occurred, the contention should not now be raised. The raising of the issue would cause prejudice to Roche, having regard to the time which has passed, and would again further delay these proceedings which should have been finalised long ago.

24    A third reason for rejecting the amendment is that any cause of action in relation to it would seem to have expired by reason of the provisions of the Limitation Act, 1969.

25 Part 20 rule 4 of the Supreme Court Rules provides, inter alia, as follows:-

4 (1) Where any relevant period of limitation expires after the date of filing of a statement of claim and after that expiry an application is made under rule 1 for leave to amend the statement of claim by making the amendment mentioned in any of subrules (3), (4) and (5), the Court may in the circumstances mentioned in that subrule make an order giving leave accordingly, notwithstanding that that period has expired.
…
(5) Where a plaintiff, in his statement of claim, makes a claim for relief on a cause of action arising out of any facts, the Court may order that he have leave to make an amendment having the effect of adding or substituting a new cause of action arising out of the same or substantially the same facts and a claim for relief on that new cause of action.
…

26 In my opinion, the amendment would not be allowable under Part 20 rule 4(5) as the cause of action for unjust enrichment does not arise out of the facts or substantially the same facts as those which were the subject of the claim made in the 1990 Statement of Claim. Counsel for the plaintiff appeared to suggest that, as he was propounding a novel cause of action for which there was no precedent, the Limitation Act did not provide any limitation period. In my opinion, if there were a relevant cause of action for restitution in the circumstances sought to be pleaded, it would be one falling within s 14(1)(a) of the Limitation Act, which is expressed to include claims under quasi-contract. The claim would be founded upon the existence of an obligation on the part of Roche, owed to the plaintiff, to report to the appropriate authorities any adverse results flowing from the plaintiff’s treatment. As Birks states in his “Introduction to the Law of Restitution”, at p 29, two-thirds or more of the law of restitution is accounted for by quasi-contract.

27    For these reasons, I refuse to allow the amendments set out in paragraphs 49, 50, 51 and 52 of the proposed Amended Statement of Claim.

28    The proposed Amended Statement of Claim also includes a claim for aggravated and/or exemplary damages. In my opinion, the matters raised deal with matters which are relevant to the plaintiff’s claim save for those that are raised in paragraphs 66, 67, 68 and 71. Those four paragraphs seem to me to raise issues which relate to the unjust enrichment claim. I consider that those four paragraphs should not be allowed. Otherwise, it seems to me, that the adding of a claim for aggravated and/or exemplary damages will not add materially to the cost or the length of the trial and will not unduly prejudice the defendants.

29    Counsel for the plaintiff should redraw the Amended Statement of Claim in accordance with these reasons and, within five days, should submit the same to me with a note that the new draft has been shown to counsel for the second defendant and that he has no further objection to it. The plaintiff should pay the costs of the motion and any costs thrown away by reason of the amendment.

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Last Modified: 03/05/2001