Re: JANSSEN-CILAG PTY LIMITED
And: PFIZER PTY LIMITED
No. G340 of 1990
FED No. 649
Trade Practices
(1992) 14 ATPR 41-186
(1992) 37 FCR 526
COURT
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
Lockhart J.(1)
CATCHWORDS
Trade Practices - Damages under Part V of the Trade Practices Act 1974 - whether reliance is necessary pre-condition for award of damages - whether competitor who suffers damage arising from contravention but has not relied on the contravening conduct is entitled to damages.
Trade Practices Act 1974 (Cth): s. 82.
HEARING
SYDNEY
#DATE 8:9:1992
Counsel for the Applicant and S.D. Robb and
Cross-Respondent: K. Howard
Solicitors for the Applicant and Michell Sillar McPhee and
Cross-Respondent: Meyer
Counsel for the Respondent and J.D. Heydon QC and
Cross-Claimant: I.M. Jackman
Solicitors for the Respondent and Freehill Hollingdale and
Cross-Claimant: Page
ORDER
THE COURT ORDERS THAT:
1. The question before the Court be answered as follows:
Question
Is paragraph 4 of the Defence to paragraphs 23A and 24 of the applicant's (Janssen's) further amended statement of claim a good answer in law to the claim in paragraph 16 of the application for damages?"
Answer
No.
2. Any argument on the question of costs of this hearing and any
further directions as to further conduct of a hearing on the question of damages be stood over to a date to be fixed.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
JUDGE1
The question which arises for determination by the Court is whether entitlement to recover loss or damage under s. 82 of the Trade Practices Act 1974 ("the Act") is confined to a person who relied on the representation which constituted a contravention of a provision of Part IV or V of the Act.
The question arises in the context of a recent, but active, bout of litigation in this Court between the parties. On 24 September 1991 the Court found that certain representations made by the respondent, Pfizer Pty Limited ("Pfizer"), contravened s. 52 of the Act; and on 29 October 1991 the Court granted injunctions against Pfizer to restrain the further making of these representations. The question of damages, if any, sustained by the applicant, Janssen-Cilag Pty Limited ("Janssen"), was agreed to be tried separately from the question of liability which was determined by the Court on 24 September 1991. Directions were given from time to time by the Court, after the making of the orders of 29 October 1991, for the purpose of preparing the case on damages for hearing.
On 30 April 1992 Janssen filed a further amended statement of claim in which paragraphs 23A and 24 appear in these terms:
"23A. The making by the Respondent of the representations and each of them pleaded in paragraphs 7, 10, 13, 16, 19 and 20B hereof induced members of the public and pharmacists to purchase the Respondent's drug 'Combantrin' instead of the Applicant's drug 'Vermox' thereby causing the…
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- Case
- [1992] FCA 649
- Decision Date
CaseChat Overview and Summary
The legal issues at the heart of the case were whether a competitor who has suffered damage due to a contravention of the Act but has not relied on the contravening conduct could still be entitled to damages. This issue was critical in determining the scope of liability and the extent to which a party could claim damages under the statute. The Court had to interpret the relevant provisions of the Trade Practices Act and determine if the requirement of reliance was mandatory or if the absence of reliance would preclude a competitor from recovering damages.
In its decision, the Court held that the requirement of reliance was not a necessary precondition for awarding damages under the Trade Practices Act. The Court found that the absence of reliance did not necessarily bar a competitor from claiming damages if they could demonstrate that they had suffered loss due to the contravention. The Court concluded that the provision in question did not impose such a reliance requirement, thereby allowing competitors who suffered damage to seek damages even if they had not relied on the contravening conduct.
The Court ordered that the Defence's contention regarding the reliance requirement was not a good answer in law. Any further arguments on the costs of the hearing and further directions were to be addressed at a later date. The Court's ruling clarified that competitors could claim damages under the Trade Practices Act without needing to demonstrate reliance on the contravening conduct, thereby broadening the scope of potential claimants.
Orders
Orders of the court
THE COURT ORDERS THAT:
1. The question before the Court be answered as follows:
Question
Is paragraph 4 of the Defence to paragraphs 23A and 24 of the applicant's (Janssen's) further amended statement of claim a good answer in law to the claim in paragraph 16 of the application for damages?"
Answer
No.
2. Any argument on the question of costs of this hearing and any
further directions as to further conduct of a hearing on the question of damages be stood over to a date to be fixed.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
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