Gill v Ethicon SÁRL

Case [2018] FCA 470

FEDERAL COURT OF AUSTRALIA

Gill v Ethicon SÁRL [2018] FCA 470

File number: NSD 1590 of 2012
Judge: KATZMANN J
Date of judgment: 9 April 2018
Catchwords: PRACTICE AND PROCEDURE — representative proceeding — product liability claim — application for leave to amend originating application and statement of claim after the end of the hearing — whether leave should be granted to add a claim for injunctive relief foreshadowed in closing address — where injunction sought to prevent sale of respondents’ medical devices without a detailed warning as to their alleged risks — whether leave should be granted when Therapeutic Goods Administration was not a party — whether leave should be granted when applicants alleged to have no interest in injunctive relief — application for leave to amend statement of claim to alter description of the group to incorporate persons whose causes of action had arisen after commencement of proceeding and which might not yet have arisen until date of judgment or approval of settlement — whether leave to amend at all should be granted — whether in any event cut-off date appropriate — whether leave should be granted where group members uncertain — whether leave should also be granted to amend statement of claim to add further allegations of a failure to warn where evidence to support allegations had been received
Legislation:

Competition and Consumer Act 2010 (Cth), s 80, Sch 2 (Australian Consumer Law), ss 232

Federal Court Act 1976 (Cth), ss 33C, 33H, 33J, 33K, 33X, 33ZE, 37M

Trade Practices Act 1974 (Cth), s 80

Federal Court Rules 2011 (Cth), rr 1.40, 1.41, 8.21, 16.51, 16.53, 16.54

Federal Court of Australia Amendment Bill 1991 (Cth)
Cases cited:

Aon Risk Services Australia Limited  v Australian National University (2009) 239 CLR 175

Australian Competition and Consumer Commission v 4WD Systems Pty Ltd [2003] FCA 850; (2003) 200 ALR 491; (2003) 59 IPR 435

Baldry v Jackson [1976] 2 NSWLR 415

Banque Commerciale SA (In liq) v Akhil Holdings Limited (1990) 169 CLR 279

Bray v F Hoffman-La Roche Ltd [2003] FCA 1505

Bright v Femcare Ltd [2002] FCAFC 243; (2002) 195 ALR 574

Caruso Australia Pty Ltd v Portec Australia Pty Ltd [1986] FCA 40

Cement Australia Pty Ltd v Australian Competition and Consumer Commission (2010) 187 FCR 261

City of Swan v McGraw Hill Financial Inc (2014) 223 FCR 328

Femcare Ltd v Bright (2000) 100 FCR 331

Gibson v Malaysian Airline System Berhad (No 2) [2017] FCA 701

Gloucester Shire Council v Fitch Ratings, Inc (No 3) [2017] FCA 553

Leotta v Public Transport Commission (NSW) (1976) 9 ALR 437; 50 ALJR 666

Multiplex Funds Management Ltd v P Dawson Nominees Pty Ltd (2007) 164 FCR 275

National Australia Bank Ltd v Nobile (1988) 100 ALR 227

Petrusevski v Bulldogs Rugby League Club Ltd [2003] FCA 61

Phelps v Western Mining Corporation Ltd (1978) 20 ALR 183; 33 FLR 327

Rod Investments (Vic) Pty Ltd v Clark (No 3) [2007] VSC 306

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Details
AGLC
Gill v Ethicon SÁRL [2018] FCA 470
Case
[2018] FCA 470
Decision Date

CaseChat Overview and Summary

The case of Gill v Ethicon SÁRL involved a representative proceeding on behalf of women who had been implanted with medical devices manufactured by Ethicon. The plaintiffs sought damages for alleged misleading and deceptive conduct and sought injunctive relief to prevent the sale of these devices without a detailed warning about their risks. The court was required to decide whether to grant leave to amend the originating application and statement of claim after the end of the hearing to add a claim for injunctive relief and to alter the description of the group to incorporate persons whose causes of action had arisen after the commencement of the proceeding.

The court held that considerations of justice, efficiency, and economy supported the applicants’ argument. The amendment should take effect from the commencement of the action on 15 October 2012. The court allowed the amendment to seek injunctive relief, despite the respondents' objections, as there was no good reason why leave should not be granted. The court also allowed the amendment to alter the description of the group to include women who were implanted with Ethicon devices and suffered complications after the commencement of the proceeding but before 4 July 2017. The parties were directed to confer on and agree to an appropriate form of opt-out notice.

The court granted the applicants leave to file an amended originating application and statement of claim, but required the applicants to pay 85% of the respondents' costs of the interlocutory application, including any costs thrown away. The respondents were given leave to file supplementary submissions on the proposed amendments by 31 May 2018, and the applicants were required to file any submissions in reply by 14 June 2018.

Orders

Orders of the court

1. Leave be granted to the applicants to:

(a) file an amended originating application in the form contained in annexure “A” to the amended interlocutory application dated 4 April 2018; and

(b) file an amended statement of claim in the form contained in annexure “B” to the amended interlocutory application dated 4 April 2018, save that the words “before 4 July 2017” be substituted for “(including after the commencement of these Proceedings)” in the definition of Group Members in paragraph 1(b).

2. The parties confer on and agree to an appropriate form of opt-out notice and forward it to my chambers by 4pm on 11 April 2018 for approval under s 33Y(2) of the Federal Court of Australia Act 1976 (Cth).

3. The respondents have leave to file and serve, by 31 May 2018, supplementary submissions on the proposed amendments contained in:

(a) paragraphs 23C and 48 of the Fifth Further Amended Statement of Claim; and

(b) paragraph 2A of the Fifth Further Amended Originating Application.

4. The applicants file any submissions in reply by 14 June 2018.

5. The applicants pay 85% of the respondents’ costs of the interlocutory application, including any costs thrown away.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Having given careful consideration to the points raised by both parties, I am not satisfied that the amendments would cause any injustice to the respondents.Conclusion It follows that the applicants should have leave to amend the Fourth Further Amended Statement of Claim by:(a)altering the description of the group but not in the terms proposed;(b)adding to para 23C:(d)that the chronic inflammatory response to the Mesh Implants may be affected by conditions which affect the immune response and healing, including autoimmune and connective tissue disorders.and(c)adding to para 48:(d)that the chronic inflammatory response to the Tape Implants may be affected by conditions which affect the immune response and healing, including autoimmune and connective tissue disorders. The description of the group should be altered so as to expressly include in the group those women who were implanted with one or more of the nine Ethicon devices and who suffered complications as a result after the commencement of the proceeding but before 4 July 2017. The parties should agree to the form of the opt-out notice, having regard to these reasons. The respondents should have leave to make further submissions on the questions relating to the allegations concerning autoimmune disorders and injunctive relief. Those submissions should be filed by 31 May 2018 and any submissions in reply filed within 14 days thereafter. Costs The applicants did not apply for costs. The respondents asked for costs even if they were unsuccessful. The discretion as to costs is at large. Nevertheless, in circumstances such as these, where the applicants were seeking an indulgence, it is customary for the Court to order that the party applying for the amendments pay the costs of the application, including costs thrown away, unless the opposition was unreasonable — in other words, unless the opponent, acting reasonably, would have consented to appropriate orders: Stanley v Layne Christensen Company [2006] WASCA 56 at [52] (Wheeler JA); Gloucester Shire Council v Fitch Ratings, Inc (No 3) [2017] FCA 553 at [14]. Although I was not persuaded by the respondents’ submissions and have been critical of some of them, only in one respect do I think their opposition was truly unreasonable: that is the opposition to the application to amend to seek an injunction. In that instance only do I consider that a party, acting reasonably, would have consented to the application to amend. In truth, their objections were to the merits, if not merely the form, of the proposed relief, not to the grant of an amendment to claim it. In contrast, the application to amend the description of the group was fundamentally flawed for the reasons I have indicated. That I have decided to grant an amendment is beside the point as it was not only an amendment the applicants did not seek but it was one they positively resisted. The applicants argued that the application to amend the class was not an indulgence but the argument was not supported by any reasoning or reference to case law and I am at a loss to understand it. As for the application relating to the immune response issue, while I have allowed the amendment I am not satisfied that the respondents’ opposition was unreasonable. Indeed, the applicants did not contend that it was. They accepted that they should pay the respondents’ costs thrown away by the interlocutory application.

Ratio Decidendi

Legal Principle Established

In my opinion considerations of justice, efficiency and economy support the applicants’ argument. The amendment should take effect from the commencement of the action on 15 October 2012. This was also the approach taken by Perram J in Gibson at [18] where his Honour applied the principle from Baldry v Jackson [1976] 2 NSWLR 415 at 419 that the usual position is that an amendment to a pleading or originating process takes effect from the commencement of the proceeding.The declaration and injunction issue The proposed amendments seek:(a)declarations that by marketing, promoting, distributing and supplying the devices without providing “the proper warning set out in CRT.010.021.0001” (annexed to these reasons and marked “A”), Ethicon engaged in conduct that was misleading or deceptive or was likely to mislead or deceive the group members; and(b)injunctions pursuant to s 80 of the Trade Practices Act or s 232 of the Australian Consumer Law (Sch 2 of the Competition and Consumer Act) restraining the respondents from supplying, distributing, marketing or promoting the devices without providing the proper warning. None of the earlier versions of the originating application included a claim for injunctive relief. But the final order sought from the outset was for “[s]uch further or other orders as the Court thinks fit” and both matters were flagged by the applicants during their final submissions, both in writing and during oral argument. Rule 8.21 of the FCR provides that an applicant may apply to the Court for leave to amend an originating application for any reason including, amongst other things, to add a new claim for relief or a new foundation for relief that arises out of the same, or substantially the same, facts as those already pleaded to support an existing claim for relief (see para (1)(g)). The application may be made even if any relevant period of limitation has lapsed: FCR r 8.21(2). If an application is made, the Court may grant it: FCR 1.41. There is no good reason why leave should not be granted to the applicants to make these amendments. No submissions were made against the application for the additional declaration. The respondents’ objections to the application for leave to amend to seek injunctive relief are as follows:(a)the proposed form of injunction purports to usurp the role of the Therapeutic Goods Administration (TGA) in regulating the provision of medical devices in Australia;(b)if relief is pressed the Commonwealth would have been a necessary party and should have been joined at the outset;(c)the TGA is better placed to supervise the content of warnings necessary to accompany the sale of a medical device and is already doing so;(d)the form and content of the proposed warning is a “lawyers’ construct based on the applicants’ pleaded case” and should not be the basis on which sales of the devices are permitted;(e)it would be futile to grant the application because the pre-conditions for the making of the order have not been established and, in the context of a detailed regulatory regime enforced by the TGA, the injunction could not be said to have “the character of enforcing present compliance or inducing future compliance”: Truth About Motorways Pty Limited v Macquarie Infrastructure Investment Management Limited (2000) 200 CLR 591 at [79]-[80] (Gummow J), adopted by the Full Court in Australian Competition and Consumer Commission v Dataline.Net.Au Pty Ltd(In liq) (2007) 161 FCR 513 at [98] (Moore, Dowsett and Greenwood JJ); and(f)the proposed relief would not be for the benefit of the applicants or the group members, actual or prospective.