FEDERAL COURT OF AUSTRALIA
Bioprospect Ltd v Solagran Ltd [2010] FCA 1081
Citation: Bioprospect Ltd v Solagran Ltd [2010] FCA 1081 Parties: BIOPROSPECT LTD ACN 008 130 336 v SOLAGRAN LTD ACN 002 592 396, VAGIF SOULTANOVICH SOULTANOV, DENIS BERTRAM KILROY, NOVA VITA PTY LTD ACN 109 436 508 and COMPUTERSHARE INVESTOR SERVICES PTY LTD ACN 078 279 277 File number: WAD 234 of 2010 Judge: MCKERRACHER J Date of judgment: 1 October 2010 Catchwords: TRADE PRACTICES - return of injunction - whether the injunction should be extended until trial - whether there is a serious question to be tried - where damages would be adequate compensation - where the balance of convenience does not favour an extension of the injunction
Held: application dismissed
PRACTICE AND PROCEDURE - application to amend application and statement of claim - amendments to be refined
Held: application granted with conditions
Legislation: Corporations Act 2001 (Cth) ss 254Y, 259A, 563A, 608
Federal Court Act of Australia 1975 (Cth) s 23
Trade Practices Act 1974 (Cth) ss 52, 53(f), 75B, 82, 87Federal Court Rules r 25A
Cases cited: Accounting Systems 2000 (Developments) Pty Ltd v CCH Australia Ltd (1993) 42 FCR 470
Australian Broadcasting Corporation v O'Neill (2006) 227 CLR 57
Castlemaine Tooheys Ltd v South Australia (1986) 161 CLR 148
Houldsworth v City of Glasgow Bank (1880) 5 App Cas 317
Kizbeau Pty Ltd v WG & B Pty Ltd (1995) 184 CLR 281
Makita (Aust) Pty Ltd v Sprowles (2001) 52 NSWLR 705
Marks v GIO Australia Holdings Ltd (1998) 196 CLR 494
Patterson v BTR Engineering (Aust) Ltd (1989) 18 NSWLR 319
Trevor v Whitworth (1887) LR 12 App Cas 409
Webb Distributors (Australia) Pty Ltd v Victoria (1993) 179 CLR 15Dates of hearing: 22 September 2010 Place: Perth Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 76 Counsel for the Applicant: T Coyle with W Zappia Solicitor for the Applicant: Lavan Legal Counsel for the First and Second Respondents: MD Wyles SC with B Murphy Solicitor for the First and Second Respondents: Foster Nicholson Legal
IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY
GENERAL DIVISION
WAD 234 of 2010
BETWEEN: BIOPROSPECT LTD ACN 008 130 336
Applicant
AND: SOLAGRAN LTD ACN 002 592 396
First RespondentVAGIF SOULTANOVICH SOULTANOV
Second RespondentDENIS BERTRAM KILROY
Third RespondentNOVA VITA PTY LTD ACN 109 436 508
Fourth RespondentCOMPUTERSHARE INVESTOR SERVICES PTY LTD
ACN 078 279 277
Fifth Respondent
JUDGE:
MCKERRACHER J
DATE OF ORDER:
1 OCTOBER 2010
WHERE MADE:
PERTH
THE COURT ORDERS THAT:
1.The application for an interlocutory injunction be dismissed.
2.The application to amend the applicant’s application be allowed on condition that further particulars are supplied within 7 days to clarify either the terms which would apply to the transactions contemplated in each of the amended paragraphs, or alternatively, a mechanism by which those terms would be assessed.
3.Costs of this application and of the initial return of the interim injunction on 15 September 2010 be…
Continue reading Bioprospect Ltd v Solagran Ltd
Sign in free to access the full text
Details
- AGLC
- Bioprospect Ltd v Solagran Ltd [2010] FCA 1081
- Case
- [2010] FCA 1081
- Decision Date
CaseChat Overview and Summary
Bioprospect Ltd sought relief from the Federal Court of Australia against Solagran Ltd, alleging misleading conduct in relation to a commercial agreement. The case centred around Bioprospect's claims that Solagran misled it regarding the sourcing and commercial exploitation of galenical extracts known as Bioeffectives. Bioprospect alleged that Solagran, through its representatives, made false statements about the exclusivity of sourcing Bioeffectives, either through Solagran itself or a licensed third party. The court was required to determine whether the alleged misrepresentations constituted misleading conduct under sections 52 and 53(f) of the Trade Practices Act 1974, and if so, whether Solagran was liable for the loss and damage suffered by Bioprospect.
In considering the legal issues, the court had to assess the veracity of Bioprospect's claims and the nature of the misrepresentations. The court had to determine whether the alleged statements were misleading in the context of the commercial relationship between the parties. Additionally, the court needed to address the applicability of the provisions of the Trade Practices Act and the extent of Solagran's liability. The court also had to consider the application for interlocutory injunction and the appropriate legal basis for such an application.
The court found that Bioprospect's evidence, while untested, was sufficient to outline the factual basis of the claims. However, the court dismissed the application for an interlocutory injunction as it was not satisfied that the necessary criteria were met. The court allowed the application to amend the pleadings on the condition that further particulars were provided to clarify the terms of the transactions or the mechanism for assessing them. The court also reserved the costs of the application and the initial return of the interim injunction for later determination.
In considering the legal issues, the court had to assess the veracity of Bioprospect's claims and the nature of the misrepresentations. The court had to determine whether the alleged statements were misleading in the context of the commercial relationship between the parties. Additionally, the court needed to address the applicability of the provisions of the Trade Practices Act and the extent of Solagran's liability. The court also had to consider the application for interlocutory injunction and the appropriate legal basis for such an application.
The court found that Bioprospect's evidence, while untested, was sufficient to outline the factual basis of the claims. However, the court dismissed the application for an interlocutory injunction as it was not satisfied that the necessary criteria were met. The court allowed the application to amend the pleadings on the condition that further particulars were provided to clarify the terms of the transactions or the mechanism for assessing them. The court also reserved the costs of the application and the initial return of the interim injunction for later determination.
Orders
Orders of the court
Full text does not contain this section.
Background
Background to the litigation
Solagran also initiated a motion to transfer the proceedings to the Victoria District Registry. This was displaced by a request by Bioprospect that the matter be heard in that Registry, each of the parties agreeing that all of the witnesses would now be Victorian based. There being no Victoria District Registry Judge available on an urgent basis for the hearing of a 10 day trial, I acceded to a request from the parties that I hear the trial in the Victoria District Registry to accommodate the convenience of all of the witnesses. The trial will commence on 29 October 2010. BACKGROUND The factual material developed in these reasons is derived almost exclusively from the evidence adduced by Bioprospect. At this stage such evidence has been untested, but subject to recording that qualification and in light of my intended disposition of the application, it is convenient to set out the facts relied upon by Bioprospect. Bioprospect carries on the business of research, development and early stage commercialisation of natural plant extracts. The second respondent (Mr Soultanov) is the Executive Chairman and Founder of Solagran. He holds doctoral qualifications in both organic chemistry and biochemistry and is a registered medical practitioner in Russia. The third respondent (Mr Kilroy) was a Director of Solagran between 25 August 2003 and 6 February 2009. Since about 2003, Solagran has been involved in the development of a range of galenical extracts. ‘Galenical’ is defined in the Oxford Dictionary as:Of or pertaining to Galen, to his followers, to his principles and practice; esp. pertaining to vegetable preparations, as distinguished from chemical remedies’ and Galen as ‘A celebrated physician of the 2nd century A.D., born at Pergamus in Asia Minor’. These particular galenical extracts are derived from green conifer needles. Being trade marked as Bioeffectives, they are obtained from ‘live elements’ of trees. Amongst others, the products are marketed as Bioeffectives A, K, X, S and I (BE products). Mr Soultanov has been directly involved in the development of Bioeffectives and is named as the inventor of various extraction process patents relating to them. Bioprospect and Solagran entered into a commercial agreement known as the Development Agreement (DA). Bioprospect contends that it was induced by misleading representations in contravention of s 52 and s 53(f) of the Trade Practices Act 1974 (Cth) (TPA) to enter into the DA on 22 August 2007 with Solagran and with the fourth respondent (Nova Vita). The misrepresentations are said to have been engaged in by Solagran through Messrs Soultanov and Kilroy. Bioprospect contends that both those persons are accessorily liable pursuant to s 75B and s 82 TPA for any loss and damage suffered by Bioprospect. The interlocutory relief however was pursued only against Solagran and Computershare. Computershare simply provides share registry services to Bioprospect (amongst others). Bioprospect contends that the misrepresentations were in the form of written and oral statements and falsely conveyed to Bioprospect that it could only source BE products directly from Solagran or a third party licensed by Solagran to manufacture BE products or, alternatively, required a licence from Solagran in order to commercially exploit BE products.
Evidence
Evidence Before The Court
Full text does not contain this section.
Decision
Reasons for decision
As a postscript I note that there was debate between the parties as to whether the application for the injunction should be based on O 25 or f 25A of the Federal Court Rules or some other provision. In light of my reasons for dismissing the injunction application, in the end nothing turns on this point.CONCLUSION In those circumstances the orders that will be made are:1.The application for an interlocutory injunction be dismissed.2.The application to amend the applicant’s application be allowed on condition that further particulars are supplied within 7 days to clarify either the terms which would apply to the transactions contemplated in each of the amended paragraphs, or alternatively, a mechanism by which those terms would be assessed.3.Costs of this application and of the initial return of the interim injunction on 15 September 2010 be reserved.
Ratio Decidendi
Legal Principle Established
Full text does not contain this section.