Pharmacy Guild of Australia v Ramsay Health Care Ltd

[2019] NSWSC 1045

Supreme Court

New South Wales

• Summary available

Medium Neutral Citation:	The Pharmacy Guild of Australia v Ramsay Health Care Ltd [2019] NSWSC 1045
Hearing dates:	29 April 2019
Date of orders:	16 August 2019
Decision date:	16 August 2019
Jurisdiction:	Equity
Before:	Ward CJ in Eq
Decision:	1. Pursuant to r 13.4 of the Uniform Civil Procedure Rules 2005 (NSW), order that the proceedings be dismissed. 2.   Reserve the question of costs to be dealt with, if possible, on the papers.
Catchwords:	CIVIL PROCEDURE — application for dismissal of proceedings – r 13.4 of the Uniform Civil Procedure Rules 2005 (NSW) – application for strike out of the statement of claim – r 14.28 of the Uniform Civil Procedure Rules 2005 (NSW) – whether the plaintiffs lack a special interest sufficient to give them standing to seek the relief claimed – whether the plaintiffs are seeking declarations that the defendants committed a criminal offence – whether the commencement of the proceedings was an abuse of process – whether the commencement of the proceedings was based on confidential information of the defendants   CIVIL PROCEDURE — Discovery — Practice Note SC Eq 11 — Exceptional circumstances warranting early disclosure – whether preliminary discovery application more appropriate
Legislation Cited:	Civil Procedure Act 2005 (NSW), ss 56, 57, 67 Fair Work (Registered Organisations) Act 2009 (Cth), s 26 Freedom of Information Act 1992 (WA), ss 24, 33, 34 Government Information (Public Access) Act 2009 (NSW) Health Practitioner Regulation National Law (NSW), sch 5F, ss 23, 41B, Pharmacy Act 2010 (WA), ss 42, 67, 68 State Administrative Tribunal Rules 2004 (WA), r 4(2) Uniform Civil Procedure Rules 2005 (NSW), rr 5.3, 13.4, 14.28, 21.2
Cases Cited:	Ainsworth v Criminal Justice Commission (1992) 175 CLR 564; [1992] HCA 10 Australian Conservation Foundation Inc v Commonwealth (1980) 146 CLR 493; [1980] HCA 53 Australian Securities and Investments Commission v Fuelbanc Australia Ltd (2007) 162 FCR 174; [2007] FCA 960 Australian Securities and Investments Commission v HLP Financial Planning (Aust) Pty Ltd (2007) 164 FCR 487; [2007] FCA 1868 Bateman’s Bay Local Aboriginal Land Council v Community Benefit Fund Pty Ltd (1998) 194 CLR 247; [1998] HCA Bauen Constructions Pty Limited v New South Wales Land and Housing Corporation [2014] NSWSC 684 Blatch v Archer (1774) 1 Cowp 63; 98 ER 969 Bourns Inc v Raychem Corporation [1999] 1 All ER 908 Bourns Inc v Raychem Corporation [1999] 3 All ER 154 Brightwater Care Group (Inc) v Rossiter (2009) 40 WAR 84; [2009] WASC 229 British American Tobacco Australia Ltd v Gordon [2007] NSWSC 230 Commercial Union Assurance Co of Australia Ltd v Ferrcom Pty Ltd (1991) 22 NSWLR 389 Commonwealth v John Fairfax & Sons Ltd (1980) 147 CLR 39; [1980] HCA 44 Commonwealth v Sterling Nicholas Duty Free Pty Ltd (1972) 126 CLR 297; [1972] HCA 19 Contour Building and Construction Pty Ltd v Kerr [2008] NSWSC 883 Corrs Pavey Whiting & Byrne v Collector of Customs (Vic) (1987) 14 FCR 434; [1987] FCA 266 Crane v Gething (2000) 97 FCR 9; [2000] FCA 45 CrownBet Pty Ltd v State of New South Wales [2017] NSWSC 1470 Danihel v Manning [2012] NSWSC 556 Edwards v Santos Limited (2011) 242 CLR 421; [2011] HCA 8 General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125; [1964] HCA 69 Harman v Secretary of State for the Home Department [1983] 1 AC 280 Hearne v Street (2008) 235 CLR 125; [2008] HCA 36 Helicopter Aerial Surveys Pty Ltd v Garry Robertson [2015] NSWSC 2104 Imperial Tobacco Ltd v Attorney General [1981] AC 718 Johns v Australian Securities Commission (1993) 178 CLR 408; [1993] HCA 56 Leda Manorstead Pty Ltd v Chief Commissioner of State Revenue [2012] NSWSC 913; (2012) 89 ATR 102 Lord Ashburton v Pape [1913] 2 Ch 469 McGuirk v The University of New South Wales [2009] NSWSC 1424 Meckiff v Simpson [1968] VR 62 Michael Wilson & Partners Limited v Nicholls (2011) 244 CLR 427; [2011] HCA 48 Moorgate Tobacco Co Ltd v Philip Morris Ltd (No 2) (1984) 156 CLR 414; [1984] HCA 73 Murray v Wheeler [2013] NSWSC 137 North Australian Aboriginal Legal Aid Service v Bradley [2001] FCA 1728; (2001) 192 ALR 625 Onus v Alcoa of Australia Ltd (1981) 149 CLR 27; [1981] HCA 50 Optiver Australia Pty Ltd v Tibra Trading Pty Ltd (2008) 196 FCR 435; [2008] FCAFC 133 Pharmacy Guild of Australia v Australian Community Pharmacy Authority (1996) 70 FCR 462 Pharmire Pty Ltd and the Pharmacy Registration Board of Western Australia [2018] WASAT 88 R (Pretty) v Director of Public Prosecutions (Secretary of State for the Home Department intervening) [2002] 1 AC 800 R (Rusbridger) v Attorney General [2004] 1 AC 357 R v Director of Public Prosecutions, Ex p Kebeline [2000] R v DPP Ex p, Camelot Group Plc  (1997) 10 Admin L Rep 93 Re Metal Storm Ltd (subject to a deed of company arrangement) [2016] NSWSC 306 Riddick v Thames Board Mills Ltd [1977] QB 881 RSA (Moorevale Station) Pty Ltd v VDM CCE Pty Ltd [2013] NSWSC 534 Sapphire (SA) Pty Ltd (trading as River City Grain) v Barry Smith Grains Pty Ltd (in liq) [2011] NSWSC 1451 Shop Distributive & Allied Employees Association v Minister for Industrial Affairs (1995) 183 CLR 552; [1995] HCA 11 Smith Kline & French Laboratories (Aust) Limited v Secretary, Department of Community Services and Health (1990) 22 FCR 73 St George Bank Ltd v Rabo Australia Ltd [2004] FCA 1360; (2004) 211 ALR 147 Sullivan v Sclanders (2000) 77 SASR 419; [2000] SASC 273 Tom & Bill Waterhouse Pty Ltd v Racing New South Wales (2008) 72 NSWLR 577; [2008] NSWSC 1013
Texts Cited:	Practice Note SATWA 2 Practice Note SC Eq 11 Ritchie’s Uniform Civil Procedure NSW J Woolf, The Declaratory Judgment (4 ed, 2011, Thomson Reuters)
Category:	Principal judgment
Parties:	The Pharmacy Guild of Australia (First Plaintiff) George Parker t/as Priceline Pharmacy Nowra (Second Plaintiff) South Grafton Pharmacy Pty Ltd atf the South Grafton Pharmacy Trust Trading as Southside Pharmacy and Masen’s Pharmacy (Third Plaintiff) Jennifer Anne Nelson t/as Coady’s Pharmacy (Fourth Plaintiff) Ramsay Health Care Limited (First Defendant) Ramsay Pharmacy Retail Services Pty Ltd (Second Defendant) Pharmire Pty Ltd (Third Defendant) Lekarna Pty Ltd (Fourth Defendant)
Representation:	Counsel: IE Davidson SC with JE Curtin and A Mykkeltvedt (Plaintiffs) B Walker SC with D Sulan and B Hancock (Defendants)   Solicitors: Bartley Cohen (Plaintiffs) King & Wood Mallesons (Defendants)
File Number(s):	2018/00248569
Publication restriction:	Nil

Judgment

1. HER HONOUR: Before me for hearing on 29 April 2019 were two interlocutory applications: an application brought by the defendants, by amended notice of motion filed 3 December 2018, seeking orders dismissing the proceedings pursuant to r 13.4 of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR) or, in the alternative, striking out the plaintiffs’ statement of claim filed 26 November 2018 pursuant to r 14.28 of the UCPR; and an earlier application by the plaintiffs, by notice of motion filed 15 October 2018, seeking early disclosure from the defendants of various documents recording the franchise arrangements between the respective defendants. (The defendants’ amended notice of motion also sought an order, in the alternative, pursuant to s 67 of the Civil Procedure Act 2005 (NSW) (Civil Procedure Act) that the proceedings be permanently stayed pending final determination of certain other proceedings in Western Australia but as I understand it those proceedings are no longer on foot.)

2. The defendants (various entities alleged by the plaintiffs to hold financial interests in, or otherwise to own, certain pharmacies in New South Wales) seek the orders in their amended notice of motion on various bases: first, a lack of standing on the part of the plaintiffs; second, that the proceedings are an abuse of process (by reason of the fact that, it is alleged, the plaintiffs unlawfully used the confidential information of the defendants in commencing these proceedings); and, third, that the statement of claim does not disclose a reasonable cause of action and is vague and embarrassing. In oral submissions, emphasis was placed on the asserted inappropriateness of the claims for declaratory relief (in substance amounting to declarations as to the criminality of conduct in which it is alleged the defendants have engaged and are continuing to engage) and the inadequacy of the pleading (particularly when seen through the prism of a pleading raising allegations of conduct that would amount to a criminal offence).

3. The plaintiffs seek orders for early disclosure of the documents on the basis that there are exceptional circumstances requiring disclosure, namely that the documents sought (going to the franchise arrangements between the relevant defendants) are solely within the defendants’ knowledge and that the plaintiffs’ case “cannot be put without the disclosure”. It is submitted that early disclosure is necessary for the resolution of the real issues between the parties to the proceedings and that such an order would be consistent with the overriding purpose set out in s 56 of the Civil Procedure Act, as well as the objects set out in s 57 of the Civil Procedure Act.

4. Logically, the defendants’ motion should be considered first, since if the defendants are successful on the principal relief claimed (i.e., dismissal of the proceedings) it is accepted that the question of early disclosure of documents will not arise (see T 53.12). For the reasons that follow, I am of the view that the proceedings should be dismissed with costs.

Background

5. The following summary of the background leading up to the present application is drawn from the pleading filed by the plaintiffs in these proceedings and the material put before the Court on the present application. I make no findings as to any disputed questions of fact in relation to the underlying dispute between the parties.

The parties

6. The first plaintiff, the Pharmacy Guild of Australia (to which I will refer as the Pharmacy Guild) is an organisation of employers registered under s 26 of the Fair Work (Registered Organisations) Act 2009 (Cth) (statement of claim at [1]) and describes itself as the national peak body representing the majority of community pharmacies Australia wide, with approximately 1,400 members that are community pharmacies based in NSW (statement of claim at [2]).

7. The second, third and fourth plaintiffs are owners and operators of pharmacies in the Nowra, Grafton and Caringbah areas: the second plaintiff (Mr George Parker) owns and operates Priceline Pharmacy Nowra; the third plaintiff (South Grafton Pharmacy Pty Ltd), as the trustee of the South Grafton Pharmacy Trust, operates two pharmacy businesses in Grafton (Southside Pharmacy and Masen’s Pharmacy); and the fourth plaintiff (Ms Jennifer Nelson) owns and operates Coady’s Pharmacy in Caringbah (see statement of claim at [5], [7]-[8], [11]).

The impugned franchise arrangements

8. The first defendant, Ramsay Health Care Limited (Ramsay Health), is said by the plaintiffs to operate a “global hospital business” comprising a large number of hospitals and day-surgery facilities in Australia and elsewhere(statement of claim at [13]). It is alleged that, since 2013, the “ongoing growth strategy” of Ramsay Health within Australia has included establishing a franchise network of community pharmacies known as the “Ramsay Retail Franchise Network” (statement of claim at [16]). (The content of this allegation mirrors statements made by Ramsay Health in its own published reports.)

9. The second defendant, Ramsay Pharmacy Retail Services Pty Ltd (Ramsay Retail), is a wholly owned subsidiary of Ramsay Health and is described by the plaintiffs as the franchisor for all “Ramsay Retail” branded community pharmacies established in Australia since 2013 “and continuing” (statement of claim at [18]).

10. The third defendant, Pharmire Pty Ltd (Pharmire), is the owner of business names associated with certain “Ramsay Branded pharmacy community businesses” in New South Wales at Grafton and Shoalhaven (Ramsay Pharmacy Parkside Plaza; Ramsay Pharmacy Grafton and Ramsay Pharmacy Shoalhaven) (statement of claim at [26]). It is alleged in the statement of claim that, in total (including the three to which I have just referred), Pharmire is the owner of the business names associated with eight pharmacy businesses around Australia (statement of claim at [27]).

11. The fourth defendant, Lekarna Pty Ltd (Lekarna), is the owner of business names associated with certain other “Ramsay Branded” pharmacy businesses” in New South Wales and the owner of the Ramsay Branded community pharmacy businesses in East Albury and Caringbah (Ramsay Pharmacy East Albury and Ramsay Pharmacy Caringbah)(statement of claim at [33]-[34]). It is alleged in the statement of claim that, in total (including the two to which I have just referred), Lekarna is the owner of the business names associated with 14 pharmacy businesses around Australia.

The present proceedings

12. In essence, the allegations made by the plaintiffs in the present proceedings are that: the first and second defendants (the Ramsay defendants) are not permitted to own or otherwise have a financial interest within the meaning of cl 2 of Schedule 5F to the Health Practitioner Regulation National Law (NSW) (National Law) in a pharmacy business (as defined in cl 1 of Schedule 5F) in NSW by reason of cl 5 of the said schedule) (statement of claim at [15]; [19]); in the case of each of the third and fourth defendants, the named individual who is the sole director and shareholder of that defendant, and employed by that defendant (Mr Nigel McFadden and Mr Peter Giannopoulos, respectively) is not permitted to own or otherwise have a financial interest within the meaning of cl 2 of Schedule 5F to the National Law in more than five pharmacy businesses (as defined in cl 1 of Schedule 5F to the National Law) in NSW by reason of cl 9 of the said schedule (statement of claim at [25]; [32]); and that there has been a contravention of those prohibitions by reason of the franchise arrangements here impugned. Contravention of cl 5(1) of Schedule 5F of the National Law (set out at [152] below) is an offence which may give rise to a penalty of up to a maximum of 100 penalty units.

13. Both of the individuals referred to above are employed by Ramsay Health in senior positions: Mr McFadden is the Regional Pharmacy Manager (NSW) of Ramsay Health and Mr Giannopoulos is the CEO of Ramsay Retail and the National Pharmacy Manager of Ramsay Health.

14. The plaintiffs contend that, from about 2013, the Ramsay defendants established a network of pharmacy business which operated under franchise arrangements entered into by Ramsay Retail, as franchisor, with entities owned by registered pharmacists as franchisees (statement of claim at [36]); that the pharmacy businesses established by the Ramsay defendants in Australia are under a “consistent franchise model” (the Franchise Model) (statement of claim at [38]), as there particularised; and that each of the Pharmire and Lekarna businesses was operated at all material times in accordance with franchise arrangements entered into with Ramsay Retail (statement of claim at [43]; [56]).

15. It is alleged that the payments payable under the respective franchise arrangements are such that Pharmire and Lekarna (the franchisees) are not likely to make any, or any ordinary, commercial profit from the said pharmacy businesses; and that the payments payable under those arrangements have the effect of diverting all or substantially all of the profits of the businesses to the Ramsay defendants (statement of claim at [45], [46]; [58], [59]). It is further alleged that the franchise arrangements permit the Ramsay defendants to govern the fit-out of the premises associated with the Pharmire and Lekarna businesses and give the Ramsay defendants control over the product range to be supplied from the businesses (statement of claim at [47], [48]; [60]; [61]).

16. The plaintiffs then plead (in general terms) to the existence of certain loan arrangements and a call option in relation to the said businesses (statement of claim at [49], [50]; 62], [63]).

17. The pleading culminates in the allegations that, as a result of the franchise arrangements, the profits derived by the franchisees from the respective business have been, and will be, substantially less than would ordinarily be expected to be derived from comparable businesses and that, in aggregate, the payments required by the franchise arrangements “together with the remainder of” the arrangements give the Ramsay defendants a direct or indirect monetary or financial interest in the respective pharmacy businesses within the meaning of the National Law (statement of claim at [51], [52]; [64], [65]).

18. At various points of the pleading, it is stated that further particulars will be provided following discovery. In oral submissions, as adverted to above, it was frankly conceded that without disclosure the plaintiffs cannot provide those further particulars.

19. In their statement of claim, the plaintiffs seek declaratory relief in relation to the alleged contraventions.

20. By prayer 1, they seek a declaration that Ramsay Health and/or Ramsay Retail holds a financial interest, within the meaning of cl 2 of Schedule 5F to the National Law, in the pharmacy businesses (the Ramsay branded pharmacies), the business names of which are owned by Pharmire (those being the businesses identified at [26] of the statement of claim).

21. By prayer 2, the plaintiffs seek, further or alternatively, a declaration that Ramsay Health and/or Ramsay Retail holds a financial interest, within the meaning of cl 2 of Schedule 5F to the National Law, in the Ramsay branded pharmacies, the business names of which are owned by Lekarna (those being the businesses identified at [34] of the statement of claim).

Earlier proceedings

22. Relevant to the second of the bases on which the defendants seek the relief set out in their amended notice of motion (i.e., that the proceedings are an abuse of process by reference to the unlawful use of the defendants’ confidential information) is the chronology of events relating to the circumstances in which, prior to the commencement of the present proceedings, the Pharmacy Guild obtained certain information in relation to the franchise arrangements in respect of Pharmire and Lekarna.

23. That chronology relevantly commences with an application by Pharmire in about December 2016 to the Pharmacy Registration Board of Western Australia (WA Board) seeking registration in Western Australia of premises in Claremont, WA, as a pharmacy under s 42 of the Pharmacy Act 2010 (WA) (WA Pharmacy Act). That application was refused on 21 June 2017 (though reasons for the decision – the WA Decision – were not published until 20 July 2017; see below).

24. In the period from about April to June 2017, various applications were made by the Pharmacy Guild in New South Wales, Queensland and Victoria for access to documents in relation to the Ramsay defendants: from the Pharmacy Council of New South Wales (Pharmacy Council) (see Exhibit 1, p 175ff); from the Department of Health in Queensland (see Exhibit 1, p 206) and from the Victorian Pharmacy Authority (VPA), respectively.

25. So, for example, in April 2017 the Pharmacy Guild made an access application pursuant to the Government Information (Public Access) Act 2009 (NSW) to the Pharmacy Council requesting, inter alia, records relating to any application made to the Pharmacy Council that included the names Ramsay, Lekarna, Peter Giannopoulos, Pharmire and Nigel McFadden (the GIPA Application). Also on or about 19 June 2017, the Pharmacy Guild lodged a freedom of information request with the VPA, seeking documents concerning the Ramsay defendants and Lekarna (Victorian FOI Request).

22. In relation to each of those applications, objection was made by Ramsay Retail to the disclosure of the documents sought (see below in relation to the Victorian FOI Request). (The relevance of this, in general terms, goes to whether the Pharmacy Guild, if not the plaintiffs as a whole, was or ought to have been aware of the confidentiality of information provided to it under a similar freedom of information request in WA to which I refer below.)

23. The relevant application, for present purposes, was an application made on 19 June 2017. The Pharmacy Guild lodged with the WA Board a freedom of information request under the Freedom of Information Act 1992 (WA) (WA FOI Act), seeking documents relating to the Ramsay defendants and Pharmire (Guild FOI Request). The Ramsay defendants were not informed of the Guild FOI Request at the time (nor, relevantly, were they informed of the provision in about October 2017 of documents to the Pharmacy Guild pursuant to the Guild FOI Request – see below – until some time after that occurred).

24. On 20 July 2017, the WA Board published its reasons for refusing Pharmire’s application for registration (the WA Decision). Those reasons were not publicly available (nor were they in evidence on the present application – see T 70.29).

25. On 10 August 2017, the VPA advised the Pharmacy Guild of its decision in relation to the Victorian FOI Request, namely to grant access to a limited number of documents. On the same day, the VPA wrote to Lekarna, advising Lekarna of the Victorian FOI Request and of its decision, and seeking Lekarna’s views as to whether the documents VPA did not propose to disclose contained trade secrets or other commercially sensitive information. On 31 August 2017, Lekarna provided a response to VPA’s letter of 10 August 2017.

26. Meanwhile, on 17 August 2017, Pharmire sought review of the WA Decision in the State Administrative Tribunal of Western Australia (WA Tribunal), pursuant to ss 67 and 68 of the WA Pharmacy Act (the WA Tribunal proceedings). In compliance with the relevant Practice Note (see further below), Pharmire filed a copy of the WA Decision with its application for review to the WA Tribunal.

27. On 6 October 2017, the WA Board gave the Pharmacy Guild notice of its decision in respect of the Guild FOI Request (Guild FOI Decision). The notice stated that it had decided to grant “limited access to documents fulfilling the scope of [the Pharmacy Guild’s] request” (the scope of which had apparently been amended by agreement of the Pharmacy Guild after the initial application was lodged) (see Exhibit 1, p 216).

28. Pursuant to the Guild FOI Decision, the WA Board released to the Pharmacy Guild a number of volumes of documents, including a copy of the WA Decision (see the affidavit sworn 31 October 2018 of the defendants’ solicitor, Mr David Cowling at [25]). The Guild FOI Decision stated that access was provided “subject to redaction of exempt matter” and that three categories of exempt matter were identified in the documents, namely: personal information; trade secrets, commercial and business information; and legal professional privilege. (The Pharmacy Guild emphasises that the documents were heavily redacted. It is not disputed that various of the documents were redacted but as those documents were not in evidence on the present occasion it is not possible to form any view as to the scope of the redactions. The plaintiffs had served a notice to produce seeking production of the Released Documents but, after objection thereto, did not press the notice to produce at this stage. Nothing, however, here turns on the degree of redaction of the documents to which the plaintiffs were given access.) Relevantly, the Ramsay defendants were not made aware of the Guild FOI Decision at this time (nor was Pharmire).

29. The solicitors acting for the Pharmacy Guild (Bartley Cohen) subsequently confirmed to the Ramsay defendants’ solicitors that the initiating application by Pharmire for a review of the WA Decision (which attached the unredacted WA Decision) was provided to their firm by the WA Tribunal on 1 December 2017 (see the letter dated 28 May 2018 from Bartley Cohen to Swaab Attorneys (the 28 May 2018 letter) – Exhibit 1, p 140; referred to at [42] below).

30. On 12 December 2017, the Pharmacy Guild made an interim application seeking leave to intervene in the WA Tribunal proceedings (Exhibit 1, p 132). By reference to the chronology set out in the 28 May 2018 letter referred to above, it is said that directions were made for the Pharmacy Guild to serve submissions and an affidavit in support of it obtaining leave to intervene, which it did on 21 December 2017.

31. On 20 December 2017, the VPA sent the Pharmacy Guild a further decision in respect of the Victorian FOI Request, again proposing to release some documents but not others (Victorian FOI Decision).

32. Again according to the 28 May 2018 letter, a directions hearing in relation to the Pharmacy Guild’s interim application for intervention in the WA Tribunal proceedings was held on 16 January 2018. It is said that the legal advisers for Pharmire were present on that occasion.

33. On 2 February 2018, the solicitors acting for Ramsay Retail in WA (Swaab Attorneys) wrote to the WA Board stating that Ramsay Retail (there described as the intended franchisor of Pharmire in relation to the Claremont pharmacy) had become aware of orders made on 30 January 2018 in relation to the interim application of the Pharmacy Guild to intervene in the proceedings (and that the intervention application would be heard with the substantive hearing on 23-24 April 2018 and that the Pharmacy Guild would be provided with documents relating to the proceedings). The letter stated that “many of the documents provided to … the Board contain confidential and commercially sensitive information of [Ramsay Retail] and its pharmacy franchise system” and sought confirmation that the WA Board would not “hand over” any documents to the Pharmacy Guild relating to the WA Tribunal proceedings “pending resolution of these matters or further order [of the WA Tribunal]” (a request there said to be made in order to maintain the status quo while Ramsay Retail considered its position and obtained advice). At this stage, the Ramsay defendants were still not aware of the making of the Guild FOI Request nor that documents had already been provided to the Pharmacy Guild pursuant to the Guild FOI Decision.

34. On 16 February 2018, the Pharmacy Guild sought review of the Victorian FOI Decision in the Victorian Civil and Administrative Tribunal (VCAT).

35. On 6 March 2018, Pharmire withdrew its application in the WA Tribunal proceedings (the costs of those proceedings not being determined until September 2018 – see [58] below).

36. On 20 April 2018, King & Wood Mallesons, acting for the Ramsay defendants, applied under the WA FOI Act for access to documents dated on or after 1 January 2015 including in relation to any application by any Ramsay Franchisees (defined to include Lekarna and Pharmire) or compliance with the WA Pharmacy Act by Ramsay (defined to include Ramsay Health and its wholly owned subsidiaries) or any of its franchisees; and communications between the WA Board and the Pharmacy Guild containing any reference to various matters or topics (including Ramsay, any of the Ramsay Franchisees; franchise pharmacies or structures; and any “complex structures”) (Exhibit 1, p 172).

37. In May 2018, the Ramsay defendants first became aware that the Pharmacy Guild had obtained a copy of the WA Decision from the WA Board. On 25 May 2018 (Exhibit 1 p 137), Swaab Attorneys wrote to the Pharmacy Guild, asserting that a copy of the WA Decision had been “illegally obtained”; that it had been used for purposes other than the WA Tribunal proceedings (namely, “for the preparation of legal advice about their client’s franchise system in states other than Western Australia”); asserting that the Pharmacy Guild (as a third party who received the documents aware that they had come from legal proceedings) was bound by the Harman undertaking (Harman v Secretary of State for the Home Department [1983] 1 AC 280); requesting that the Pharmacy Guild explain how it had obtained a copy of the WA Decision or any other documents related to the above proceedings; and demanding the immediate return of all hard copies of documents in connection with the said proceedings and the destruction of all electronic copies of the same (and provision of certification of such destruction) by 5pm (Sydney time) on 28 May 2018. A similar demand was made by letter dated 28 May 2018 to the solicitors advising the Pharmacy Guild (Bartley Cohen) (Exhibit 1, p 139).

38. By letter dated 28 May 2018 (Exhibit 1, p 140) (the 28 May 2018 letter to which I have referred above), the Pharmacy Guild’s solicitors responded to the Ramsay defendants’ solicitors, disclosing (among other things) that the Pharmacy Guild had obtained a copy of the WA Decision from the WA Tribunal on 1 December 2017 and had been provided by the solicitors for the WA Board on 19 January 2018 with a copy of the WA Board’s Statement of Facts Issues and Contentions filed 1 December 2017. The letter also stated that, on 19 January 2018, a copy of Pharmire’s submission and an affidavit opposing the Pharmacy Guild’s application for leave to intervene had been served (pursuant to an order made on 30 January 2018) and that, on 5 February 2018, at the solicitors’ request, the associate to the President of the WA Tribunal had provided copies “of seven various orders [sic] and correspondence listed as documents relating to the Proceedings on the [WA Tribunal] website”. (The Ramsay defendants contend that these additional documents contained confidential information of the Ramsay defendants.)

39. In the letter dated 28 May 2018, the Pharmacy Guild’s solicitors stated that:

The Guild has not used the Decision or any other documents relating to the Proceedings [i.e., the WA Tribunal proceedings] obtained during the course of the Proceedings for the preparation of advice by our firm about “your client’s franchise system in States other than Western Australia”. The only documents relating to Western Australia which have ever been used for the purpose of legal advice outside of Western Australia have been heavily redacted documents obtained as a result of an earlier freedom of information application. There has never been any consideration or use of documents obtained as a result of the Proceedings.

44. Without conceding an obligation so to do, and said to be “as a matter of abundant caution and to avoid any possible further misunderstanding on [the solicitors’ or their client’s part]”, the letter stated that the Pharmacy Guild would proceed to “destroy all hard and electronic copies of documents obtained by the Guild during the course of the Proceedings”, as too would the solicitors and Counsel briefed in the proceedings.

45. This letter was the first notification to the Ramsay defendants of the fact of the making of the Guild FOI Request (and that documents had been provided to the Pharmacy Guild pursuant to that application).

46. The Ramsay defendants say that the documents provided pursuant to the Guild FOI Request to the plaintiffs were documents given to the WA Tribunal by Pharmire under the compulsion provided by the relevant Practice Notes; and that, in those circumstances, the Pharmacy Guild may not use the documents without leave of the WA Tribunal (citing Hearne v Street (2008) 235 CLR 125; [2008] HCA 36 at [96]). The Ramsay defendants say that no such leave has been sought; and they argue that it is implicit in the Pharmacy Guild’s later agreement to destroy the relevant documents that it accepted that such documents are not available for use. (The Pharmacy Guild does not accept that such a concession is implicit in its agreement not to use, and to destroy, the documents, which, as noted above, was expressed to be in the absence of any obligation to do so.)

47. There was further correspondence between the respective solicitors as to the demands that had been made in relation to the Guild FOI Request (see the letter dated 8 June 2018 from the Ramsay defendants’ solicitors to Bartley Cohen (8 June 2018 letter) and the letter dated 12 June 2018 responding thereto – Exhibit 1, p 167; 169). (Pausing here, the 8 June 2018 letter assumed some significance in the course of argument, as going to the issue as to that to which it had alerted the Pharmacy Guild at a time prior to commencement of the present proceedings. In reviewing that letter, it must be noted that there is reference made to two categories of documents in that letter: first, in points 1-4 of the letter, documents obtained by the Pharmacy Guild in the course of the WA Tribunal proceedings (i.e., the proceedings in which Pharmire had sought the review of the WA Decision), said by Swaab Attorneys to have been obtained by an ex parte communication with the WA Tribunal in breach of the relevant solicitors’ and legal profession conduct rules; and, second, in point 5 of the letter, copies of the Guild FOI Request, correspondence with the “disclosing party” and all documents received as a result of that application. Only the latter category of documents was the subject of the reference in the Pharmacy Guild’s lawyers’ 28 May 2018 letter (see above at [43]) (i.e., the reference in that letter to the “heavily redacted documents obtained as the result of an earlier freedom of information application” said to have been the only information used for the purpose of any legal advice outside WA).)

48. On 13 June 2018, Swaab Attorneys wrote to the WA Board, requesting urgent advice as to: any documents concerning the Ramsay defendants, and/or Ramsay franchisees, released by the WA Board pursuant to freedom of information requests made by the Pharmacy Guild (including details of the date(s) of release and full copies of the documents released in the exact form in which they were released); and the steps taken by the WA Board to comply with s 33(2) of the WA FOI Act prior to the release of any such documents (Exhibit 1, p 170).

49. On 27 June 2018, the WA Board responded to the FOI request made by the Ramsay defendants (the Ramsay FOI Decision). With the Ramsay FOI Decision, the Ramsay defendants were provided with: a redacted copy of the freedom of information request dated 19 June 2017 which had been submitted by the Pharmacy Guild (i.e. the Guild FOI Request); a notice of the WA Board’s decision in respect of the Guild FOI Request dated 6 October 2017 (the Guild FOI Decision); and four or five volumes of documents (the exact number of which is inconsistently described in the material before me) (the Released Documents) (see Exhibit 1, p 210). The Ramsay defendants say that the Released Documents were substantially similar to those provided to the Pharmacy Guild in the WA Tribunal proceedings.

50. The Ramsay defendants emphasise that they were not informed by the WA Board of the Guild FOI Request in June 2017 nor of the Guild FOI Decision in October 2017 (nor was Pharmire so informed) until the Ramsay FOI Decision in June 2018.

51. Following receipt of the Ramsay FOI Decision, on 28 July 2018 the Ramsay defendants sought internal review of the Guild FOI Decision (Exhibit 1, p 225), seeking, inter alia, the setting aside of the Guild FOI Decision.

52. On 13 August 2018, the plaintiffs commenced these proceedings by way of summons, seeking declarations in the same terms as those now sought in the statement of claim (i.e., to the effect that the Ramsay defendants held financial interests, within the meaning of cl 2 of Schedule 5F of the National Law, in pharmacies owned by Pharmire and Lekarna).

53. On the same day (13 August 2018), the Pharmacy Guild filed an application to withdraw its application to VCAT, stating its reason for applying to withdraw as being that:

[a]s of this week, the Guild is pursuing other legal avenues in another jurisdiction which has now overtaken the utility of these VCAT proceedings. Accordingly, the Guild does not wish for the parties or the Tribunal to expend any further time on this proceeding.

54. On 17 August 2018, the solicitors for the Ramsay defendants wrote to the Pharmacy Guild (Exhibit 1, p 233): informing it that the Released Documents were confidential; putting the Pharmacy Guild on notice that the Ramsay defendants considered the Pharmacy Guild owed them a duty of confidence in respect of the Released Documents; and demanding that the Pharmacy Guild undertake not to make further use of the Released Documents.

55. The Pharmacy Guild’s solicitors responded on 23 August 2018 (Exhibit 1, p 236), stating that, as far as they knew, the Ramsay defendants had not sought review of the Guild FOI Decision and, as such, it could not be said that the Pharmacy Guild ought to have known that the documents (i.e., the Released Documents) “are now apparently confidential in nature and should not have been released, when your own client did not consider that to be the case or allege that to be the case until now, some ten months after the decision”. The letter stated that whether the Ramsay defendants intended to pursue the WA Board to have the Guild FOI Decision overturned was a matter between them and the WA Board and that “we will await any direction from the [WA Board] or otherwise accordingly”. (In my opinion, the letter did not respond in any meaningful way to the demands that had been made as to use of the Released Documents. Moreover, to the extent that complaint is made as to a ten month delay in the making of an allegation of confidentiality, this assumes, incorrectly, that the Ramsay defendants became aware of the Guild FOI decision at or about the time it was made.)

56. By letter dated 27 August 2018 (Exhibit 1, p 237), the Ramsay defendants’ solicitors informed the Pharmacy Guild’s solicitors that the Ramsay defendants had not been provided with notice either directly or indirectly of the WA Decision in October 2017 and that notice of the decision was first received by the Ramsay defendants on 28 June 2018. The letter confirmed that an urgent application for internal review of that decision had been lodged with the WA Board. The letter asserted that the Pharmacy Guild knew or ought to have known upon receipt of the WA Decision and the documents disclosed by the WA Board that the documents were and remained confidential (but that, even if that were not accepted, the Pharmacy Guild had clearly been put on notice of the asserted obligations of confidence by the letter dated 17 August 2018). The letter reiterated the demand that the Pharmacy Guild undertake not to make further use of the Released Documents.

57. On 3 September 2018 (Exhibit 1, p 239), the Pharmacy Guild agreed not to make any further use of the Released Documents until the outcome of the internal review, or the provision of three business days’ notice of its intention to do so. (Pausing here, it is implicit in this that the documents had not already been destroyed, as the Pharmacy Guild had stated it would proceed to do back in May 2018 – see [44] above.)

58. On 5 September 2018, the WA Tribunal handed down its decision on the issue of costs of the review proceedings that had been withdrawn by Pharmire – Pharmire Pty Ltd and the Pharmacy Registration Board of Western Australia [2018] WASAT 88 (the costs decision). The relevance of this is that the costs decision was accessible by and hence available to the public and contained certain information as to the franchise arrangements (see further below).

59. On 13 September 2018, the defendants requested that the plaintiffs serve a statement of claim in these proceedings. By letter dated 24 September 2018, the plaintiffs declined to agree to serve a statement of claim and instead proposed that the defendants give disclosure of certain documents. On 5 October 2018, the defendants responded to the proposal that they provide disclosure in these proceedings, noting that the documents the Pharmacy Guild sought to have disclosed were similar to the Released Documents. On 9 October 2018, the plaintiffs responded, enclosing a copy of the notice of motion they proposed to file seeking such disclosure.

54. In October 2018, the WA Board rejected the Ramsay defendants’ application for internal review of the Guild FOI Decision. On 12 October 2018, the Ramsay defendants wrote to the Pharmacy Guild’s solicitors (Exhibit 1, p 240), informing them of the internal review decision and requesting that the Pharmacy Guild extend its agreement not to make further use of the Released Documents until 19 October 2018, while the Ramsay defendants considered their options.

55. On 15 October 2018 (Exhibit 1, p 242), the Pharmacy Guild declined to extend its agreement not to make further use of the Released Documents. On the same day, the plaintiffs filed their notice of motion in the present proceedings seeking discovery of documents from the defendants, including: sale agreements, franchise agreements, loan agreements and options.

56. On 16 October 2018, the Ramsay defendants’ solicitors wrote to the Pharmacy Guild (Exhibit 1, p 243) foreshadowing the commencement of proceedings in the Supreme Court of Western Australia to seek: orders directing the Pharmacy Guild to deliver up documents containing, or produced using, the Ramsay defendants’ confidential information; injunctions restraining the Pharmacy Guild from using the Ramsay defendants’ confidential information; and judicial review of the Guild FOI Decision. In the letter of 16 October 2018, the Ramsay defendants also requested undertakings not to use the Released Documents, or any documents containing or produced using information obtained from those documents. The Pharmacy Guild did not provide those undertakings on 16 October 2018.

57. The Ramsay defendants then commenced proceedings in the Supreme Court of Western Australia (the WA proceedings) on 16 October 2018 against the Pharmacy Guild, seeking relief for breach of confidence; seeking judicial review of the Guild FOI Decision; and, by way of Chamber Summons, seeking an interlocutory injunction restraining the Pharmacy Guild from using or disclosing the Released Documents or any documents containing information obtained from a Released Document.

58. On 24 October 2018, the plaintiffs in the proceedings in this Court were ordered to file a statement of claim.

59. On 25 October 2018, the Pharmacy Guild wrote to the Ramsay defendants in relation to the WA proceedings that had been commenced by the Ramsay defendants, proposing that the proceedings be resolved by it destroying the Released Documents and any documents produced using those documents. The Pharmacy Guild also offered to “extend its agreement of 3 September 2018” until 29 October 2018.

60. On 29 October 2018, the Ramsay defendants responded to the letter dated 25 October 2018 from the Pharmacy Guild. By this letter, the Ramsay defendants proposed that the WA proceedings be resolved by the Pharmacy Guild undertaking to the Court that it had destroyed all copies of the Released Documents and any documents produced using the Released Documents, other than those in the public domain. In addition, the Ramsay defendants proposed that the Pharmacy Guild undertake that it had procured the destruction of such documents disclosed by the Pharmacy Guild to third parties. The Ramsay defendants indicated that the parties ought to agree that the only documents said to be in the public domain by reason of the WA Tribunal proceedings were the hearing transcript and the WA Tribunal’s published reasons.

61. On 30 October 2018, the Pharmacy Guild’s solicitors responded, proposing limited amendments and setting out a form of the undertaking the Pharmacy Guild was prepared to proffer. One of the amendments proposed by the Pharmacy Guild was that it would not request public authorities to destroy documents provided to them by the Pharmacy Guild.

62. On 31 October 2018, the Ramsay defendants’ solicitors responded to the Pharmacy Guild’s letter of 30 October 2018, requesting the Pharmacy Guild’s solicitors to inform them of the names of any authorities to which the Pharmacy Guild had provided documents that would be within the scope of the undertaking, as well as details of what was disclosed.

63. On 31 October 2018, the defendants filed their notice of motion (now superseded by the amended notice of motion) in the proceedings in this Court, seeking orders: dismissing the proceedings under r 13.4 of the UCPR; or staying the proceedings pending the resolution of the WA Proceedings.

64. On 1 November 2018, the Pharmacy Guild’s solicitors responded to the letter of 31 October 2018, stating that the Pharmacy Guild had not provided the Released Documents to anyone except its legal advisers. The letter stated that the Pharmacy Guild had communicated its views, by reference to those documents, “at a ministerial/departmental or authority level” in NSW. The letter confirmed that the Pharmacy Guild was content with the Ramsay defendants’ definition of the documents said to be in the public domain by reason of the WA Tribunal proceedings.

65. On 2 November 2018, the Ramsay defendant’s solicitors responded to the Pharmacy Guild’s letter of 1 November 2018. Relevantly, in respect of the resolution of the WA proceedings, the Ramsay defendants proposed a limitation to the undertaking, such that the Pharmacy Guild would not be required to procure the destruction of documents by the NSW Pharmacy Council and other NSW Ministers, Departments or Authorities.

66. On 6 November 2018, in correspondence to the Ramsay defendants’ solicitors, the Pharmacy Guild’s solicitors set out the terms of the undertaking the Pharmacy Guild would give to the Court.

67. On 7 November 2018, the Ramsay defendants responded to the Pharmacy Guild’s letter of 6 November 2018, proposing that the Pharmacy Guild write to the relevant third parties notifying them of the confidentiality of the documents and requesting their destruction or marking as confidential. There followed correspondence between the parties as to the appropriate communication to third parties, on 8 November 2018 and 9 November 2018.

68. On 12 November 2018, the Pharmacy Guild provided an undertaking to the Ramsay defendants (and the Supreme Court of Western Australia) that it had: destroyed all copies of documents released to the Pharmacy Guild by the WA Board on 6 October 2017; destroyed all copies of documents produced in reference to or otherwise disclosing the contents of the Released Documents; and procured the destruction of any such documents disclosed to third parties, other than the NSW Pharmacy Council, NSW Minister for Health, the Hon. Brad Hazzard MP, and the NSW Department of Health.

69. The plaintiffs filed their statement of claim in the present proceedings on 26 November 2018.

70. On 30 November 2018, the proceedings commenced by the Ramsay defendants against the Pharmacy Guild in Western Australia were dismissed by consent.

71. On 3 December 2018, the defendants filed their amended notice of motion in these proceedings, seeking an order that the statement of claim be struck out, in addition to the same orders as the original notice of motion.

72. On 20 February 2019, the Supreme Court of Western Australia made orders by consent quashing the decision of the WA Board to give the Pharmacy Guild access to the documents. (The plaintiffs emphasised in the course of oral argument that this involved no hearing on the merits; the defendants say that it is not open to the plaintiffs to seek to go behind those orders. Little turns in my opinion on the fact that ultimately the Guild FOI Decision was quashed. Relevantly, the decision was on foot at the time that the documents were provided to (and used, to the extent that they were in fact used, by) the Pharmacy Guild.)

Evidence

79. I do not propose here to outline in any detail the evidence relied upon by each side in support of, or resisting, the respective applications; save to note that there was one document that I provisionally admitted (Exhibit F), indicating that I would rule on the document in my final reasons. Tender of that document (the WA Board’s decision of 10 October 2018 rejecting the Ramsay defendants’ application for internal review of the Guild FOI decision) (the October 2018 decision) by the plaintiffs was objected to by the defendants on the basis of relevance (that decision having been, admittedly, superseded by the February 2019 consent orders).

80. The relevance ascribed to that document by the plaintiffs was that it gave some description of the level of redactions that had been made to the documents released to the plaintiffs (in circumstances where the defendants had not themselves put in evidence on the present application the Released Documents, other than some 15 pages annexed to the 31 October 2018 affidavit of their solicitor, which material contained the confidentiality provisions of the relevant agreements said to be or to contain the defendants’ confidential information). The plaintiffs submitted that the level of redactions made to the Released Documents is supportive of the fact that there was no basis for the Pharmacy Guild at the time it received the documents to have notice of anything untoward having occurred (see T 42-43) or that the Pharmacy Guild was receiving documents that it ought not to have received. The plaintiffs also pointed to the redactions as indicating that there was no obligation for the WA Board to consult with the Ramsay defendants before releasing the documents (based on the operation of s 24 and s 33 of the WA FOI Act).

81. The position of the defendants was that, whatever views the Registrar of the WA Board may have expressed in the October 2018 decision as to the propriety of the release of the information in the first place, they are not the views that informed the formal ultimate step concerning the propriety of the administrative action in question (i.e. the quashing of that decision); and, in any event, this was not a document that the plaintiffs had when commencing these proceedings so it cannot go to the state of mind the plaintiffs had at that time concerning the propriety of their access to documents.

82. It is obvious that the document provisionally admitted as Exhibit F, by its very date if nothing else, did not come to the plaintiffs’ attention (and thus could not have any relevance on the question as to the knowledge of the plaintiffs, or their legal representatives at the time that the Released Documents were received; nor, indeed, at the time these proceedings were commenced). Moreover, the issue before me is not whether the WA Board complied with its obligations in relation to the release of the said documents (or had an obligation to consult with the Ramsay defendants in circumstances where the documents had been redacted – a submission that in any event could have been made by reference to the legislation alone). Rather, the issue as to the plaintiffs’ access to the redacted Released Documents is whether there was an impermissible use of the documents in the commencement (or continuation) of the present proceedings so as to constitute an abuse of process warranting the dismissal of the proceedings. Insofar as that turns on what the plaintiffs knew (or ought to have known) at the time of commencement of the proceedings, Exhibit F does not assist in that regard. Accordingly, I consider the relevance objection to be well-founded and I reject the tender of Exhibit F.

Defendants’ dismissal/strike out motion

83. As indicated above, I will deal first with the defendants’ dismissal/strike out motion.

Standing

84. The first basis on which the defendants seek the dismissal of the proceedings (or alternatively the striking out of the statement of claim) is the contention that the plaintiffs lack a special interest sufficient to give them standing to seek the relief claimed. However, that submission was largely subsumed in oral argument by the submission that it is inappropriate for the Court here to entertain an application for declaratory relief as to the criminality of alleged conduct (and, if that be accepted, not necessary and perhaps not desirable for the issue of standing to be determined); and I propose to deal with that issue first (because, in my view, it is determinative of the present application).

85. The defendants say that in these proceedings what the plaintiffs are seeking are declarations that the Ramsay defendants have committed an offence under the National Law (that being the prism through which the adequacy of the pleading is to be assessed) and the defendants point to the recognised reluctance of courts to grant such relief on the application of private entities, other than in exceptional circumstances (and will not do so unless the facts are clear and undisputed) (see R (Rusbridger) v Attorney General [2004] 1 AC 357 (Rusbridger) at [19]; [23]; Brightwater Care Group (Inc) v Rossiter (2009) 40 WAR 84; [2009] WASC 229 (Brightwater) at [18]-[19]; Australian Securities and Investments Commission v HLP Financial Planning (Aust) Pty Ltd (2007) 164 FCR 487; [2007] FCA 1868 at [30]; and CrownBet Pty Ltd v State of New South Wales [2017] NSWSC 1470, including at [89]-[91]; [129]-[138] (CrownBet v NSW); cf Tom & Bill Waterhouse Pty Ltd v Racing New South Wales (2008) 72 NSWLR 577; [2008] NSWSC 1013 (Waterhouse v Racing NSW) at [74]).

86. The defendants point to the regulation of the pharmacy industry under the National Law and emphasise that the Pharmacy Guild is not a regulator and that it does not have any statutory role in enforcing pharmacy regulation; nor does it have a role in administering the National Law or in maintaining the registry of pharmacies (that role being performed in New South Wales by the Pharmacy Council, which is established under s 41B of the National Law, and the Australian Health Practitioners Regulation Agency (AHPRA), which is established under s 23 of the National Law).

87. Reference is made to CrownBet v NSW (at [128]) for the proposition that, where there is a regulator apprised of the situation, that has registered the pharmacies the subject of these proceedings and has otherwise not taken steps to restrain the practices of the Ramsay defendants, it would be inappropriate for the Court to intervene and do so.

88. Further, it is submitted that the Pharmacy Guild and the second to fourth plaintiffs have not established any interest in the proceedings beyond other members of the public, such as to give them standing to bring this case. It is submitted that there is no private right of the plaintiffs which is interfered with, nor will they suffer a disadvantage beyond a grievance if the action fails (see Onus v Alcoa of Australia Ltd (1981) 149 CLR 27 at 35-36; [1981] HCA 50 (Onus v Alcoa); Australian Conservation Foundation Inc v Commonwealth (1980) 146 CLR 493 at 530; [1980] HCA 53 (ACF v Commonwealth)); and that the Pharmacy Guild does not have a real commercial interest in the relief sought (citing Edwards v Santos Limited (2011) 242 CLR 421; [2011] HCA 8 (Edwards v Santos) at [38]). Nor, it is said, does the fact that the resolution of the proceedings may be relevant to, or consistent with, the objectives of the Pharmacy Guild constitute a real commercial interest or an interest sufficient to confer standing (see ACF v Commonwealth at 531). It is submitted that the interests of the Pharmacy Guild’s members cannot confer standing on the Pharmacy Guild (see ACF v Commonwealth at 531).

89. As to the second to fourth plaintiffs, the defendants note that standing is sought to be established by reference to the geographical distance between the relevant plaintiff and the Ramsay branded pharmacy (referring to the statement of claim at [6]; [9]-[10] and [12], respectively). The defendants argue that this is not a suit brought to enforce geographical restrictions (where they accept proximity to a new pharmacy might afford a pharmacist standing) (referring to Pharmacy Guild of Australia v Australian Community Pharmacy Authority (1996) 70 FCR 462 (Pharmacy Guild v ACPA) at 473-474). The defendants point out that the restriction the subject of the declarations sought is as to the identity of persons with financial interests in particular pharmacies, not their location; and say that geographical proximity does not give the plaintiffs standing to seek declarations as to the identities of persons who hold financial interests in other pharmacies.

90. The defendants also complain that the third and fourth plaintiffs here seek to go beyond their existing pleadings by adducing (in the affidavits relied upon to resist the defendants’ notice of motion) hearsay evidence as to the potential financial impacts being caused by the ownership of the competing Ramsay branded pharmacies. It is noted that each of the relevant Ramsay branded pharmacies was a pre-existing business which has been acquired (by Pharmire or Lekarna as the case may be). The defendants argue that the third and fourth plaintiffs cannot establish standing by complaining about a change in the ownership structure of a pre-existing competing pharmacy business. The defendants further submit that the alleged financial impacts of the change to Ramsay branded pharmacies are “too remote to give standing” (referring to Pharmacy Guild v ACPA at 467 and 474).

Plaintiffs’ submissions in response as to standing

Nature of the declarations sought

91. As to the nature of the declarations here sought, the plaintiffs in both their written and oral submissions (see for example T 50.6, T 50.40) were adamant that the summons does not seek a declaration that an offence has been committed and that they have not asked for a finding of criminal conduct. Though they accept that the National Law provides, in general terms, that it is an offence for an entity that is not a pharmacist to hold a financial interest in a pharmacy, they say that they are concerned “not with whether the conduct of the Ramsay defendants ought be the subject of prosecution but with whether Pharmire and Lekarna ought to have been permitted to acquire and register interests in pharmacies to be operated pursuant to the Franchise Arrangements”.

92. It is submitted that, in view of Ramsay Health’s stated intention greatly to expand its pharmacy network, the answers to the questions posed in the summons are of great importance not only in respect of conduct in which the defendants have already engaged but also in respect of conduct that the defendants “have evinced an intention to pursue vigorously in the future”. It is further submitted that the present case is likely to give rise to important questions of construction of the National Law, the determination of which will give certainty to the plaintiffs, the defendants, the Pharmacy Council and the owners of community pharmacies generally.

93. As noted, the plaintiffs say that they do not seek any declarations that a criminal offence has been or will be committed but they further say that, even if they did, such declarations can be made in appropriate cases, citing Waterhouse v Racing NSW where Palmer J noted that:

The Court is less reluctant to make a declaration involving questions of criminal law where the facts are clear and undisputed, there are no criminal proceedings pending, and there is a pure question of law to be decided.

94. The plaintiffs say that the present matter is one in which no criminal proceedings are pending (or even threatened) and that the extent of any factual dispute (though not yet able to be determined) is likely to be “of relatively narrow compass” (i.e., whether the franchise arrangements give rise to a “financial interest” within the meaning of the National Law).

95. As to the defendants’ submission as to the inappropriateness of curial intervention (in circumstances where there is a regulator, apprised of a situation, that has not sought to restrain the practices of the Ramsay defendants), the plaintiffs say that there is no general stipulation that declarations cannot be sought in matters falling within the sphere of a regulator’s influence and they argue that the position contended for by the defendants “would be a substantial departure from the weight of authority and would very substantially narrow the range of cases in which the Court could make equitable declarations”.

94. The plaintiffs submit that, if the franchise arrangements operate in a way that effectively vests the true beneficial interests in a series of pharmacies not in the purported owner of those pharmacies, then this subverts the terms and clear intent of the National Law and that “[t]he fact that the First and/or Second Defendants may have, so far, successfully persuaded the regulator otherwise, does not detract from the clear public interest in the true position being ascertained”.

95. The plaintiffs accept that, to establish standing, they are required to show that they have a special interest in the subject matter of the proceedings but they place emphasis on the approach to standing requirements as “enabling” (see Bateman’s Bay Local Aboriginal Land Council v Community Benefit Fund Pty Ltd (1998) 194 CLR 247 at 267; [1998] HCA 49 (Bateman’s Bay), where Gaudron, Gummow and Kirby J said that “[r]easons of history and the exigencies of present times indicate that [the special interest] criterion is to be construed as an enabling, not a restrictive, procedural stipulation”).

96. The Pharmacy Guild submits that it has a special interest in the subject matter of the proceedings on account of: its status and function as the “national peak representative body” of community pharmacies; the actual and apprehended impact of the Ramsay franchise arrangements on both the community pharmacy model and the individual members of the Pharmacy Guild; and the apprehended impact of the defendants’ actions, both to date and as proposed to continue, on the commercial interests of the Pharmacy Guild.

97. As to the first of these matters, it is noted that the Rules of the Pharmacy Guild of Australia (Rules) provide (at cl 5) that the objects of the Pharmacy Guild are to represent the interests of members in industrial matters and to further, and protect, the interests of, and generally to do anything which may be considered beneficial for, its members. The Pharmacy Guild says that its objects (while not determinative of whether it has standing) are relevant in that they emphasise the core representative functions of the Pharmacy Guild in relation to matters of importance to the owners of community pharmacies. The Pharmacy Guild also points to the nature of its membership (namely operators of community pharmacies) in this regard. In the present case the plaintiffs emphasise their concern as to the maintenance of the “community pharmacy model” as the preferred means of ensuring individual pharmacist accountability and equitable access to medications.

98. The Pharmacy Guild says that its claim to standing is significantly greater than that of most environmental advocacy groups, emphasising that it represents a “relatively homogenous group” in the context of a matter of specific concern to a narrow group of persons.

99. As to its representative role, that the Pharmacy Guild points to matters such as the fact that it is the counter party to the Commonwealth Government in the making of various Community Pharmacy Agreements (addressing the pricing of medications under pharmaceutical benefits scheme) and has served as the employer representative in negotiations relating to employment conditions, including in respect of the Pharmacy Industry Award 2010 and as representative for members in industrial disputes before the Fair Work Commission. It says it has a long history of making representations to government in connection with various matters of interest to its members (such as, the making of submissions in September 2018 before the Queensland Parliament’s Health, Communities, Disability Services and Domestic and Family Violence Prevention Committee in relation to the Inquiry into the establishment of a pharmacy council and pharmacy ownership in Queensland, which addressed the regulation of pharmacy business ownership).

100. In this regard, the plaintiffs refer to cases in which representative bodies have had standing on the basis of their members’ interests (Shop Distributive & Allied Employees Association v Minister for Industrial Affairs (1995) 183 CLR 552; [1995] HCA 11 (SDA), in the case of a union; and North Australian Aboriginal Legal Aid Service v Bradley [2001] FCA 1728; (2001) 192 ALR 625 (Weinberg J) in the case of the North Australian Aboriginal Legal Service (NAALAS)). It is submitted that the Pharmacy Guild is a representative body governed by an elected Council and a registered organisation; and that its position is analogous to that of the Shop Distributive & Allied Employees Association considered in SDA.

101. The plaintiffs submit that the application of the statutory requirements regarding pharmacy ownership is of fundamental importance to the Pharmacy Guild’s members and the marketplace in which they operate. It is said that the Pharmacy Guild’s members are subject to a restrictive regime in relation to the manner in which their businesses are held, carried on, and transferred on sale and, as such, have an interest in ensuring that regime is applied consistently, which extends well beyond the interest of the public generally.

102. The plaintiffs argue that the Ramsay defendants’ acquisition of a financial interest in competitor pharmacies (in the context of evidence of its intention to expand the network of pharmacies) is likely to cause real financial detriment to many of the Pharmacy Guild’s members, noting that a potential future commercial detriment can accord a plaintiff standing to seek declaratory relief (see Bateman’s Bay).

103. The plaintiffs also point to the observations of Mason J, as his Honour then was, in ACF v Commonwealth (at 547):

Depending on the nature of the relief which he seeks, a plaintiff will in general have a locus standi when he can show actual or apprehended injury or damage to his property or proprietary rights, to his business or economic interests, and perhaps to his social or political interests.

106. They submit that, even apart from the Pharmacy Guild’s own special interest on the basis of its status and functions, the Pharmacy Guild has standing because of its members’ interests.

107. As to the defendants’ contention (citing Edwards v Santos) that the Pharmacy Guild does not possess a “real commercial interest” in the relief sought and therefore lacks standing, the plaintiffs say that the possession of a real commercial interest in the relief sought is not required to establish standing referring to the acceptance by Heydon J in Edwards v Santos (with whom French CJ, Gummow, Crennan, Kiefel and Bell JJ agreed) that native title claimants had standing because they had an interest in the question as to the validity of the Authority to Prospect which was greater than that of other members of the public. In any event, the plaintiffs say that, while the Pharmacy Guild’s direct commercial interests may not be immediately adversely affected by the defendants’ activities, the subject matter of these proceedings bears a real connection with the prospective commercial interests of the Pharmacy Guild, insofar as the expansion of the Ramsay network of pharmacies may affect the Pharmacy Guild’s provision of “support services” for the owners of community pharmacies (from which it derives income).

108. The Pharmacy Guild says that the pharmacy ownership rules contained in the National Law seek to preserve the community pharmacy model as the model by which pharmaceutical services are delivered in NSW and that if those ownership rules “are permitted to be circumvented in a way that allows large publicly listed multinationals such as the First Defendant to develop significant agglomerations of pharmacy businesses”, the number of community pharmacies in NSW will reduce significantly; as will, correspondingly, the market for the support services provided on a commercial basis by the Pharmacy Guild and “its capacity to provide those services to its community pharmacy members”. It is submitted that that is sufficient to give the Pharmacy Guild a special interest in the subject matter of the proceedings.

109. As to the second, third and fourth plaintiffs, it is submitted that each possesses an interest in the subject matter of the proceedings that extends “well beyond” that of members of the public generally because of the commercial detriment they have suffered, or may suffer, as a result of the defendants’ actions. Their interests are identified as the interests of as the owners or operators of a pharmacy or pharmacies in close proximity to a pharmacy business “purportedly owned” only by the third or fourth defendant. It is submitted that each of those plaintiffs has a special interest in ensuring that direct competitors comply with provisions in the National Law concerning pharmacy ownership.

110. The plaintiffs argue that, in a general sense, the concern that a pharmacist operating a pharmacy business has in its close competitor’s adherence to rules to which he or she is subject is significantly greater than the interest of members of the public generally (whether or not direct pecuniary damage can be shown). In addition, it is submitted that each of the second, third and fourth plaintiffs either has been, or is likely to be, impacted in a “business or economic” sense. It is said that, while each of the pharmacies acquired by the third and fourth defendants was an existing pharmacy business, breaches of the ownership provisions of the National Law may fundamentally and detrimentally shift the nature of the competition faced by the second to fourth plaintiffs. It is said that this possibility is particularly acute in circumstances where, as the operator of a network of hospitals and of pharmacies (not the subject of these proceedings) located in those hospitals, Ramsay Health has developed an existing relationship with hospital patients returning to the community who may require access to medications from pharmacists. It is submitted that it is plainly the expectation of Ramsay Health that its pharmacy network (which is branded “Part of Ramsay Health Care”) will attract and secure patronage as a result of the apparent identity between its hospital and pharmacy networks.

111. The plaintiffs argue that close geographical proximity (while not necessarily determinative of standing) is a relevant and important factor (citing by way of example the decision in Pharmacy Guild v ACPA). The plaintiffs, in their written submissions, outline the particular factors in relation to each of the first to fourth plaintiffs in that regard. It is not necessary here to set those out.

Abuse of process

112. The second basis on which the present orders are sought is that they amount to an abuse of process, in that the commencement of the proceedings was based on the Ramsay defendants’ confidential information (that had either been unlawfully obtained or was obtained or held in circumstances importing an equitable obligation of confidence).

113. In particular, the Ramsay defendants maintain that the information obtained by the Pharmacy Guild pursuant to the Guild FOI Request was confidential information of the Ramsay defendants; and say that the circumstances in which the Pharmacy Guild obtained the Released Documents were such that it was under an obligation of confidence to the Ramsay defendants and Pharmire (citing Moorgate Tobacco Co Ltd v Philip Morris Ltd (No 2) (1984) 156 CLR 414 at 438; [1984] HCA 73 (Deane J)); noting that the circumstances will give rise to an obligation of confidence where confidential information is “improperly obtained” (see Lord Ashburton v Pape [1913] 2 Ch 469 (Lord Ashburton v Pape) at 475, approved in Commonwealth v John Fairfax & Sons Ltd (1980) 147 CLR 39 at 50; [1980] HCA 44 (Mason J) (Cth v Fairfax); Smith Kline & French Laboratories (Aust) Limited v Secretary, Department of Community Services and Health (1990) 22 FCR 73 at 86 (Gummow J)).

114. The Ramsay defendants submit that, on receipt of the Guild FOI Decision, the Pharmacy Guild ought to have been aware that the Released Documents were being provided to it in circumstances where the WA Board had failed to comply with its statutory obligation not to give access to a document that contains commercially sensitive information of the Ramsay defendants or Pharmire until it had taken steps to obtain the views of those entities as to whether the document contained “exempt matter” within the meaning of cl 4 of Schedule 1, namely commercially sensitive information (s 33 of the WA FOI Act) and that it would be unconscientious for the Pharmacy Guild to take advantage of that failure by using the Released Documents in a manner contrary to the interests of the Ramsay defendants and/or Pharmire.

115. It is said that the nature of the information contained in the Released Documents was such that the Ramsay defendants and Pharmire, had they known of the Guild FOI Request, would have informed the Board that they considered the documents contained “exempt matter”. It is said that this is established by the fact that, when the Ramsay defendants and Pharmire learnt about the Guild FOI Request, they informed the Pharmacy Guild and the WA Board of their position that the material was confidential.

116. The defendants say that, had the Ramsay defendants and Pharmire been afforded the opportunity to protest, the WA Board would have been obliged to defer giving access to the documents until its decision became final (see s 34(1)(e) of the WA FOI Act); and would also have been obliged to give the Pharmacy Guild notice that a third party considered the documents contained “exempt matter” and that access would be deferred until the WA Board’s decision was final (see s 34(3)). It is noted that the Guild FOI Decision did not contain such a notice and that access to the Released Documents was not deferred.

117. It is submitted that a reasonable person in the position of the Pharmacy Guild would have realised that there was a real likelihood the WA Board had not complied with its obligation under s 34 of the WA FOI Act; and thus that the Pharmacy Guild ought to have been aware that the Released Documents had been “improperly obtained”. In this regard, the defendants point out that the Pharmacy Guild was already on notice that a similar FOI request in Victoria had been deferred by the VPA on the grounds that s 34 may apply and that the Ramsay defendants were to be given the opportunity to provide their view in accordance with s 34(3) of the WA FOI Act.

118. The defendants rely on the proposition that a third party who comes by information innocently may be restrained from making use of it once that third party learns that it was obtained in circumstances involving a breach of confidence (referring to Johns v Australian Securities Commission (1993) 178 CLR 408 at 460; [1993] HCA 56 (Johns v ASC) (Gaudron J) and the cases there cited); and that the question whether the duty of confidence will be imposed on the third party will depend on the extent to which the information is generally known or available (Johns v ASC at 460) (pointing out that the Ramsay documents were not generally known or available).

119. The defendants submit that it should be inferred that the Pharmacy Guild used information obtained from the Released Documents for the purposes of commencing these proceedings; and that the plaintiffs have, at the very least, made continued use of their knowledge of the existence of and information contained in the Released Documents. Finally, the defendants argue that the plaintiffs have not adduced any evidence to rebut the inference that they relied upon the Released Documents in commencing these proceedings (it being solely within their power to call such evidence, see Blatch v Archer (1774) 1 Cowp 63 at 65; 98 ER 969 at 970) and that the failure to do so gives rise to a Jones v Dunkel inference (see Commercial Union Assurance Co of Australia Ltd v Ferrcom Pty Ltd (1991) 22 NSWLR 389 at 418-419).

120. The defendants argue that, at the very least from 27 August 2018, the Pharmacy Guild was on specific and express notice from the Ramsay defendants that the WA Board had provided the Released Documents in circumstances in which it had not complied with the requirements of the WA FOI Act; and that, from that time (if not before), the Pharmacy Guild was under an obligation of confidence not to use the Released Documents. It is submitted that this is implicitly acknowledged by the Pharmacy Guild’s agreement not to use the Released Documents (both by the letter on 3 September 2018 and by the undertaking given by the Pharmacy Guild).

121. It is submitted that the use of the Ramsay defendants’ confidential information provides an improper basis on which to bring proceedings and, as a result, the proceedings should be dismissed as an abuse of process (citing British American Tobacco Australia Ltd v Gordon [2007] NSWSC 230 (BATA v Gordon) at [28] (per Brereton J, as his Honour then was)).

122. Further, it is said that in a case where pleadings were prepared by plaintiffs in possession of relevant information obtained in breach of confidence, the pleadings should be struck out (citing Sullivan v Sclanders (2000) 77 SASR 419 at 431; [2000] SASC 273) and that use of confidential information to institute proceedings in which the same information might subsequently be obtained on compulsory process is an abuse and will be restrained by the Court (see BATA v Gordon at [28]).

Plaintiff’s submissions in response as to abuse of process

123. The plaintiffs submit that the proceedings are not an abuse of process. They do not deny use of the Released Documents at the time the summons was filed but say that the information used in commencing these proceedings on 13 August 2018 was limited to information available in and accessed from the public domain, and documents provided in response to the Guild FOI Request (i.e., the Released Documents) before any complaint was made by the defendants about the release of the said documents. It is submitted that that information provided a proper basis for the commencement of these proceedings.

124. The plaintiffs maintain that the defendants have not established that an equitable obligation of confidence has arisen because the defendants have failed to identify with specificity that information within the Released Documents which is said to be confidential; and have not shown that the Released Documents possess the necessary quality of confidence; and because the plaintiffs did not receive the Released Documents in such a way as to import an obligation of confidence.

125. In that regard, the plaintiffs (who emphasise that they no longer have access to the Released Documents) prove to the fact that documents were (they say heavily) redacted by the WA Board, so as to withhold personal information, “trade secrets, commercial and business information” and information subject to legal professional privilege. They say that, at the time the proceedings were commenced, the plaintiffs had not been informed and did not know that the WA Board may not have adhered to all requirements of the WA FOI Act in releasing the Released Documents. It is noted that there was no indication in the Notice of Decision that notice of the release application was not provided to Pharmire. It is submitted that, having regard to the nature of the application, the terms of the Notice of Decision and the fact that almost four months elapsed between the Pharmacy Guild’s application for access to documents and the Notice of Decision, it was reasonable for the Pharmacy Guild to proceed on the basis that the WA Board had adhered to the requirements of the WA FOI Act.

126. Further, the plaintiffs say that key aspects of the information regarding the implications of the arrangements in place between Ramsay Retail and Pharmire in Western Australia are already in the public domain by reason of the WA Tribunal’s costs decision.

127. It is said that the defendants have not established that there has been actual (or threatened) misuse of the information said to be confidential. It is submitted that the plaintiffs were not made aware of the defendants’ complaints in relation to the process surrounding the release of the Released Documents until after the commencement of proceedings; and that, having been made aware of the defendants’ complaints, the plaintiffs determined (without admission and in order to avoid further litigation and unnecessary costs on the subject) to make no further use of the Released Documents.

20.3    the Board considered that the arrangements were such that the consideration payable to RPRS varied with the income of the pharmacy business. As the upper limit of the aggregate costs payable by Pharmire to RPRS exceeded the revenue of the pharmacy business, it suggested that the amount payable to RPRS would be tailored in accordance with Pharmire's revenue.

21. The Reasons indicate that the Board also refused the application because, in breach of the statutory requirements, the application failed to include all information required by the Regulations and was misleading in material particulars. However, it is plain that these matters themselves turned on the Board's characterisation of the arrangements. The substance of the Board's decision was based on its firm view that the arrangements offended the prohibitions in section 54 of the Pharmacy Act.

214. In light of the transcript and the costs decision, the following statements in the statement of claim, by way of example, appear to have been information within the public domain at the time the statement of claim was filed: the reference (at [20]) that Ramsay Retail has entered into franchise arrangements with Pharmire; the particulars outlined (at [38]) relating to the costs decision and the transcript of the hearing; the statement (at [39]) that “Ramsay enters into a franchise agreement with each franchisee, using a collection of standard-form documents” is arguably based on information in the public domain (especially because of Mr Pettit’s references to the contractual arrangements in the transcript); the assertion (at [41]) that “Pharmire purchased the Pharmire Businesses using funds loaned to it by Ramsay”, which is supported by the reference to the franchise arrangements in the transcript (though reference is made at [41] to a letter that would not, as far as I can tell, have been available within the public domain); the particulars (at [43(b)]) discussing what the arrangements of Pharmire are “likely” to include; the assertion (at [44]) that Pharmire is required to make a number of payments to the Ramsay defendants; the assertion (at [46]) that all payments payable under the arrangements between the Ramsay defendants and Pharmire have the effect of diverting all, or substantially all, of the profits of the Pharmire businesses to the Ramsay defendants (at least at a general level because of what was alluded to by Mr Pettit as captured in the transcript); the statements at [47] and [48] of the statement of claim which, according to the particulars, are supported by Annexure 1 to the costs decision; and (despite the particulars at [49] referring to a letter which would not be publicly available as far as I can tell) the proposition that “Ramsay loans funds to Pharmire to assist financially with the operation of the Pharmire Businesses” is an assertion that was publicly available based on the transcript and the costs decision.

215. There is also information in the statement of claim that would have been publicly available from, for example, by undertaking a company search (such as when business names were registered or businesses were purchased). In this regard, I note that the September 2017 Counsels’ opinion includes reference to examples of public statements reported in the media (including results briefings for the year ended 30 June 2016 that referred to Ramsay Health being in the process of establishing strategically located community pharmacies across Australia; results briefing for the half year ended 30 December 2016 as to the commencement of a retail pharmacy strategy in Australia and places to establish extensive network of franchised pharmacies throughout the country; and an ASX announcement dated 30 August 2007 by Ramsay Health’s managing director) ( see at [11]). Reference is also made to reports in various industry publications (see at [12]) and to ASIC and internet searches (see at [13]). The content of those releases and reports is evidently what has informed much of the drafting of the pleading (for example, the references to a “consistent franchise model” and the “network” of franchised pharmacies).

216. The following information and paragraphs in the statement of claim, however, appear to include information that is not obviously in the public domain: see [43] which refers to information that would not be publicly available; and, in particular, the information about the franchise agreements between Ramsay and the fourth defendant (i.e., Lekarna) ([53] onwards in the statement of claim). As I read them, the transcript and the WA Tribunal costs decision do not discuss the position of Lekarna. (That said, insofar as the pleading in relation to Lekarna largely mirrors that in relation to Pharmire it might be inferred that it was at least to some extent based on the assumption that the relevant agreements or arrangements were the same in its case.)

217. The generality (or put less charitably, vagueness) of a number of the allegations in the pleading about which complaint is here made supports in my view the conclusion that the plaintiffs have not impermissibly had resort to the material obtained from the WA Board; rather that the plaintiffs have largely, if not wholly, made use of information that was publicly available (hence the need for them now to obtain early disclosure so as to articulate their case with particularity).

218. Were it necessary to determine I would have concluded that it had not been established on the balance of probabilities that the commencement or continuation of the proceedings to date is or has been an abuse of process by reference to any impermissible use of the Released Documents. The Guild FOI Request was the seemingly orderly or regular invocation of the legislative provisions entitling such an application. I am not persuaded that there was anything in the notice of decision to alert the plaintiffs to the fact (as it transpired) that the WA Board had not notified the Ramsay defendants and/or Pharmire of the application. The (perhaps, surprising in light of their attitude to other such applications) lack of objection by the Ramsay defendants does not amount to knowledge (or even constructive knowledge if that be relevant) of the fact that the Ramsay defendants were unaware of the application or release of the documents. (That said, the 8 June 2018 letter, requesting particulars of the FOI application must have put the Pharmacy Guild or notice that the Ramsay defendants did not have the details of that application.)

219. Finally, as to the complaints made as to deficiencies in the pleading, I consider them to be well-founded. The vagueness of expressions such as “consistent franchise made”, “likely to include” and “ordinary commercial profit” make the pleading embarrassing. The defendants are entitled to know with precision the case that they are required to meet, particularly where there are serious allegations amounting to allegations of criminality put against them.

220. The plaintiffs accept that the scope of the franchise agreements has not been pleaded and that cannot be done without the documents (see T 63.18 and T 70.12).

221. That said, in light of my conclusion that the claim for declaratory relief as to criminal conduct should not be entertained, I consider that the appropriate order is not simply to strike out the statement of claim but to dismiss the proceedings. If and when the plaintiffs consider that there is a proper basis to commence proceedings (seeking relief that is not problematic in that regard), then it would be a question of the plaintiffs obtaining advice as to whether fresh proceedings can be instituted based on the publicly available material then to hand. It was not suggested for the defendants that dismissal of the proceedings should be on a with prejudice basis (quite the contrary).

Plaintiffs’ Notice of Motion for Disclosure

222. Having regard to the conclusion I have reached as to the defendants’ dismissal/strike-out motion, this issue does not arise. However, lest I be wrong (and for completeness), I here address the plaintiffs’ motion for disclosure of documents relating to the franchise agreements between the Ramsay defendants and the third and fourth defendants in respect of the relevant pharmacy businesses.

223. The plaintiffs submit that disclosure should be ordered in advance of the parties serving their evidence in circumstances where the plaintiffs seek documents that are solely, or largely, in the possession of the defendants and it is said that there cannot be any doubt that the information contained within them will be necessary for the resolution of the real issues in dispute.

224. As adverted to above, it is the plaintiffs’ contention that (consistent, they say with the decision of the WA Board, although that decision was not before me) the franchise system implemented by Ramsay Health and/or Ramsay Retail gives the Ramsay defendants a financial interest (as that term is defined in cl 2 of the Regulation) in the pharmacy businesses claimed to be owned by Pharmire and Lekarna.

225. The plaintiffs accept that the WA Decision related to the arrangements that had been put in place between Pharmire and Ramsay Retail in WA (where the legal requirements under the WA Pharmacy Act are slightly different to those imposed by the National Law). However, the plaintiffs contend (based, they say, on “their own investigations” and information put on the public record by the Ramsay defendants) that the franchise arrangements being implemented by the Ramsay defendants with respect to the Ramsay-branded pharmacies are, at the very least, similar, if not the same, Australia-wide.

226. The plaintiffs do not hold copies of the “suite of documents” underpinning the franchise arrangements in NSW between Ramsay Health and/or Ramsay Retail as franchisor and Pharmire and Lekarna as franchisees. However, they say that, based on the heavily redacted documents released to the Pharmacy Guild in response to the GIPA Application in NSW, it appears that at least a proportion of the suite of documents underpinning the franchise arrangements for the Ramsay-branded pharmacies were provided to the Pharmacy Council in support of the registration applications made to the Pharmacy Council by Pharmire and Lekarna, including Sale/Purchase Agreements, Lease and License Agreements and Finance Arrangements. The plaintiffs say that these documents were not provided to the Pharmacy Guild in response to the GIPA Application.

227. The plaintiffs seek early disclosure of documents falling into the following categories as listed in Schedule A to their notice of motion:

(a)   Any sale agreement relating to the purchase of the pharmacy businesses referred to in paragraphs 1 and 2 of the summons filed in these proceedings.

(b)   Franchise agreements entered into between the first and/or defendant and the third or fourth defendant.

(c)   Any disclosure documents provided by the first and/or second defendant to the third or fourth defendant in connection with the franchise agreements.

(d)   Any offer letters provided by the first and/or second defendant to the third or fourth defendant in connection with the franchise agreements.

(e)   Any loan agreement, guarantee or other security agreement entered into, or proposed to be entered into between the first and/second defendant and the third and/or the fourth defendant and/or associated guarantors (including but not limited to its directors, being Nigel McFadden and Peter Giannopolous respectively).

(f)   Any other deeds, agreements or options (including but not limited to any call option) entered into pursuant to, or contemplated by, the franchise agreements.

(g)   Any manuals prepared by or on behalf of the first and/or second defendant governing the operation of the relevant pharmacy businesses by the third or fourth defendant.

(h)   Any power of attorney between the first and/or second defendant and the third or the fourth defendant.

(i)   The currently applicable Employment Contract between the first and/or second defendant and the sole director of each of the third and fourth defendants, being Nigel McFadden and Peter Giannopolous respectively.

(j)   Any financial statements, including but not limited to income statements, balance sheets, and/or cash flow statements prepared by or on behalf of the defendants, in relation to the following:

(i)   the Ramsay Pharmacy Parkside Plaza from 25 October 2016 onwards,

(ii)   the Ramsay Pharmacy Grafton from 24 February 2017 onwards;

(iii)   the Ramsay Pharmacy Shoalhaven from 29 May 2017 onwards;

(iv)   the Ramsay Pharmacy East Albury from 18 November 2015 onwards; and

(v)   Ramsay Retail Pharmacy from 22 September 2015 onwards

228. Rule 21.2 of the UCPR confers a discretion in relation to discovery. However, an order for discovery may not be made in respect of a document unless the document is “relevant to a fact in issue” in the proceedings r 21.2(4). Moreover, Practice Note SC Eq 11 (the Practice Note) provides, relevantly that:

4.   The Court will not make an order for disclosure of documents (disclosure) until the parties to the proceedings have served their evidence, unless there are exceptional circumstances necessitating disclosure.

5.   There will be no order for disclosure in any proceedings in the Equity Division unless it is necessary for the resolution of the real issues in dispute in the proceedings.

229. It has been noted in various decisions on disclosure since the Practice Note was introduced that a party seeking disclosure prior to the service of evidence must establish: that there are exceptional circumstances necessitating disclosure; and that disclosure is necessary for the resolution of the real issues in dispute in the proceedings (see, for example, Bauen Constructions Pty Limited v New South Wales Land and Housing Corporation [2014] NSWSC 684 at [17] per Ball J).

230. “Exceptional” has been construed as requiring circumstances that are out of the ordinary or unusual (see Leda Manorstead Pty Ltd v Chief Commissionerof State Revenue [2012] NSWSC 913; (2012) 89 ATR 102 at [15]-[17] (per Gzell J).

231. The test of “necessity” requires that the disclosure sought be shown to be reasonably necessary for disposing of the matter fairly or in the interests of a fair trial. In Re Metal Storm Ltd (subject to a deed of company arrangement) [2016] NSWSC 306, Brereton J, as his Honour then was, said (at [17]):

In that context, it is necessary to remember the purposes of discovery. While it is a common use of discovery to obtain evidence of Party B’s knowledge or conduct, that is far from its sole use or purpose. The purposes of discovery include not only obtaining relevant evidence, but also reducing surprise and promoting fairness by putting parties in an equal position at trial, so that the parties are “playing with all the cards face up on the table”. Discovery has the consequence that Party B cannot adduce documentary evidence at trial which takes Party A by surprise. Thus, simply ascertaining what documents relevant to a fact in issue are in the possession of Party B and may be deployed at trial by that party, or may aid Party A’s case or harm Party B’s case, is a relevant and proper purpose of discovery. It is a means of a party ascertaining what the other party has in its hand, and thereby avoiding surprise.

232. As to the necessity of disclosure at this stage of the proceedings, the plaintiffs say that it will be necessary to consider the precise terms of the franchise agreements in place between Ramsay Health and/or Ramsay Retail on the one hand, and Pharmire and Lekarna on the other; and to have regard to associated documents, and the way those documents are implemented in practice. They accept that they do not have those documents. It is submitted that, to a significant extent, both the documents setting out the franchise arrangements and information regarding how those arrangements are implemented in practice are solely within the knowledge of the defendants. It is said that essentially, the plaintiffs’ case “cannot be put without the disclosure”. Thus, it is submitted that the circumstances are “exceptional” in the sense required by the Practice Note, in that they are not “routinely, regularly or normally encountered”, and because, plainly, they necessitate disclosure.

233. The plaintiffs argue that the disclosure sought is necessary for the resolution of the real issues in the proceedings. It is noted that the material available to the plaintiffs, including public announcements by Ramsay Health and the costs decision of the WA Tribunal, indicates that one or both of the Ramsay Defendants has begun “rolling out” a consistent franchise system throughout Australia, and it is said that certain features of that system (including, inter alia, the finance arrangements, various payments from franchisee to franchisor, option agreements, operational manuals and staffing arrangements) appear to give the Ramsay defendants a financial interest in the pharmacy businesses owned by Pharmire and/or Lekarna.

234. The plaintiffs say that the precise characteristics of the franchise arrangements in place in relation to the relevant pharmacy businesses are not within their knowledge (and peculiarly within the knowledge of the defendants); and that, while the issues between the parties are likely to be of relatively narrow compass, their resolution will be influenced heavily by the contents of the documents sought. It is said that this extends to the financial statements sought in category “(j)” of Schedule A to the notice of motion as it is the plaintiffs’ contention that “the revenue of the relevant pharmacy businesses may prove to be a crucial lens through which to view the franchise arrangements that are in place”. In those circumstances, It is said that it would not be possible for the plaintiffs fairly to prepare their case in the absence of disclosure and hence early disclosure is necessary in the relevant sense.

235. The plaintiffs point out that they have suggested an appropriate confidentiality regime and that, while the defendants have not to date suggested any problems with the particular regime proposed, the plaintiffs are prepared to consider any refinements that might reasonably be thought necessary to satisfy any confidentiality concerns.

236. Further, it is submitted that the exercise of discretion in favour of an order for disclosure would be consistent with the overriding purpose set out in s 56 of the Civil Procedure Act to facilitate “the just, quick and cheap resolution of the real issues in the proceedings”, as well as the objects set out in s 57 of that Act. In particular, it is submitted that an order for disclosure at this juncture of the proceedings would: assist in the efficient disposal of the litigation by reducing, if not eliminating, the need for the plaintiffs to supplement their evidence following service of the defendants’ evidence and subsequent disclosure; and to allow for the issues between the parties to be defined as clearly as possible without further delay and would best allow for the plaintiffs to put their case fairly.

237. It is submitted that the scope of the documents sought at this stage is tailored and confined; and that any costs associated with the disclosure are likely to be, relative to the significance of the subject matter of the proceedings, very minimal. It is further said that, the bulk of the documents sought are likely to have been collated by the defendants in the context of the applications to the Pharmacy Council for registration of the relevant pharmacy businesses.

238. The plaintiffs argue that this is not a case where the plaintiffs are seeking a “carte blanche gathering of every document the respective clients have generated … for ‘review’ by teams of lawyers and students in the absence of any knowledge of the proposed evidence”. The plaintiffs say, rather, that they seek only a confined number of documents that go to the heart of the dispute in these proceedings and are very likely to form the foundation of the evidence on which the matter is determined. Thus, it is said that the grant of the relief sought by the plaintiffs would be consistent not only with the overriding purpose of the Civil Procedure Act but also the underlying purpose of the Practice Note.

232. The defendants in response maintain that this is not a case where the plaintiffs need discovery before evidence in order to fill an evidentiary gap in their case; rather, that the plaintiffs are in substance seeking early discovery to determine whether they have a case, pointing to the concession by the plaintiffs (in their submissions at [31]) that their case cannot be put without disclosure.

233. It is said that the plaintiffs’ difficulties are reflected in the manner in which the current statement of claim has been prepared; repeating the complaint that the allegations are made at a high level of abstraction by use of impermissible phrases such as that the relevant arrangements “are likely to include at least” certain contracts and obligations (see, for example, the statement of claim at [43(b)]).

234. It is submitted that the plaintiffs’ attempt to seek early discovery is “even more egregious” in the light of the matters raised in the defendants’ application concerning the use of confidential information obtained from the WA FOI requests.

235. The defendants say that exceptional circumstances have not been established by the plaintiffs; that this is not a case where the plaintiffs have demonstrated that they are unable to serve their evidence without certain documents (see Danihel v Manning [2012] NSWSC 556 per Bergin CJ in Eq at [16]) or where early discovery is necessary in order to enable an expert to produce an expert report (see RSA (Moorevale Station) Pty Ltd v VDM CCE Pty Ltd [2013] NSWSC 534 per Stevenson J at [35]-[37]). Rather, the plaintiffs are impermissibly seeking to use the discovery procedure to determine whether they have a case and to enable them properly to plead and particularise a cause of action.

236. It is submitted that to allow early discovery and to find “exceptional circumstances” in the present case would render the operation of the Practice Note obsolete and would “sanction the practice of commencing proceedings on disparate information in the knowledge that discovery could then be obtained in order to determine whether a case exists and properly to formulate that case”.

237. Furthermore, the plaintiffs maintain that the categories of discovery sought are too broad. In particular, it is noted that the documents sought by (b)-(h) of Schedule A to the notice of motion are not limited to the relevant businesses the subject of these proceedings (i.e., the pharmacy businesses in Nowra, Grafton, and Shoalhaven (for Pharmire) and East Albury and Caringbah (for Lekarna)); rather, as presently drafted, the categories would encompass agreements and documents which are beyond the scope of the proceedings and concern businesses conducted in other states.

238. In the event that the plaintiffs are successful, the defendants wish to be heard on the appropriate confidentiality regime that ought to apply to the discovery provided.

Conclusion as to the early disclosure motion

246. In my opinion, had there not been the difficulty as to the ambit of the relief sought, there would have been much to be said for the view that (assuming that there had been a proper basis to commence the proceedings in the first place – based on the public statements that had been made and submissions in the course of the hearing leading up to the costs decision) this would be an appropriate case for the making of an early disclosure order. The terms of the franchise agreements are clearly relevant to the matters the subject of complaint, for example, and those documents are peculiarly within the knowledge of the defendants. There might have been issues as to the breadth of what was sought but an application for disclosure at this stage would not have seemed inappropriate in those circumstances.

247. I accept that there would be difficulties in pursuing a preliminary discovery application in circumstances where the plaintiffs have already formed the decision that they have (and wish to present) a cause of action (T 52.7), although there is in my mind some doubt as to how that view could properly be formed based without insight into the terms of the relevant transaction documents (and if there were doubt in this regard then a preliminary discovery application might well not be inappropriate).

248. Senior Counsel for the plaintiffs (at T 70.11ff) identified the dilemma in this regard as follows:

With the strike‑out application we concede that the scope of the franchise arrangements have not been pleaded and we can’t do it without the documents, but the suggestion that we should have done this as a preliminary discovery application ‑ well, you can’t bring a preliminary discovery application under UCPR 5.3 as we understand the position to build up a case where you have already decided to bring proceedings, so, having decided to bring proceedings, and in light of those opinions, it would be fairly hard to bring a UCPR application. [my emphasis]

“An applicant must identify what information is lacking. Preliminary discovery can’t be brought to build up a case which an applicant has decided or could decide to bring.”

There is a reference to that at paragraph 5.3.15 in Ritchie. We do say that this is the quintessential situation for early disclosure.

249. Rule 5.3 (‘[d]iscovery of documents from prospective defendant’) of the UCPR provides that:

(1)    If it appears to the court that:

(a)   the applicant may be entitled to make a claim for relief from the court against a person (the prospective defendant) but, having made reasonable inquiries, is unable to obtain sufficient information to decide whether or not to commence proceedings against the prospective defendant, and

(b)   the prospective defendant may have or have had possession of a document or thing that can assist in determining whether or not the applicant is entitled to make such a claim for relief, and

(c)   inspection of such a document would assist the applicant to make the decision concerned,

the court may order that the prospective defendant must give discovery to the applicant of all documents that are or have been in the person’s possession and that relate to the question of whether or not the applicant is entitled to make a claim for relief.

(2)    An order under this rule with respect to any document held by a corporation may be addressed to any officer or former officer of the corporation.

(3)    Unless the court orders otherwise, an application for an order under this rule:

(a)    must be supported by an affidavit stating the facts on which the applicant relies and specifying the kinds of documents in respect of which the order is sought, and

(b)   must, together with a copy of the supporting affidavit, be served personally on the person to whom it is addressed.

(4)    This rule applies, with any necessary modification, where the applicant, being a party to proceedings, wishes to decide whether or not to claim or cross-claim against a person who is not a party to the proceedings.

250. In the commentary in Ritchie’s Uniform Civil Procedure NSW, vol 1 (Ritchie’s) at [5.3.2] it is said that, amongst other factors, an order for preliminary discovery can only be made if it appears to the Court that, the applicant has made reasonable enquiries and “notwithstanding the reasonable enquiries, the applicant has been unable to obtain sufficient information to decide whether or not to commence proceedings against the prospective defendant”. Relevantly, it is this requirement that the plaintiffs argue mean they would not be eligible to apply for or receive such an order.

251. The case law indicates that a preliminary discovery application can only be used to obtain sufficient information to decide to commence proceedings and not to “build up a case which an application has already decided, or could decide to bring” (see Ritchie’s at [5.3.15] and the cases there cited, including St George Bank Ltd v Rabo Australia Ltd [2004] FCA 1360; (2004) 211 ALR 147 – cited with approval in Optiver Australia Pty Ltd v Tibra Trading Pty Ltd (2008) 196 FCR 435; [2008] FCAFC 133 at [36])

252. In Murray v Wheeler [2013] NSWSC 137 (Murray v Wheeler), Bergin CJ in Eq dismissed a summons seeking an order pursuant to r 5.3 of the UCPR that the respondents discover to the applicants documents which included banking statements, records of general accounting, receipts, and documents containing certain communications between the respondents. Bergin CJ in Eq found that correspondence prior to the filing of the summons from the applicants’ solicitors to the respondents’ solicitors stating that the applicants had made a decision to sue the first respondent in district court proceedings was sufficient evidence to establish that the applicants had sufficient information to decide whether or not to commence proceedings.

253. Similarly, it was held by Barrett J, as his Honour then was (at [11]) in Contour Building and Construction Pty Ltd v Kerr [2008] NSWSC 883 (Contour v Kerr), that letters sent from the applicant’s solicitors to the respondents’ solicitors indicated that "the plaintiff has already made a decision to commence proceedings against both the first defendant and the second defendant” (see [10]). Emphasis was placed on the fact that there was “no indication of doubt or uncertainty” in the letters (see [13]).

254. Certainly, the decisions in Murray v Wheeler and Contour v Kerr (where the correspondence in question was sufficient to evidence an intention to commence proceedings) would support the conclusion that in the present case the filing of a summons and (verified) statement of claim would be sufficient evidence of such an intention. To adopt the language of Barrett J in Contour v Kerr there could be “no indication of doubt or uncertainty” that the plaintiffs in these proceedings intended to bring the proceedings. That said, there is an abundance in the pleadings of statements indicating the need for further particulars. It may be that, on further consideration, it would be determined that, absent such material, it could not be concluded that there was a reasonable basis on which to institute the proceedings and therefore that a preliminary discovery application could be pursued.

255. In any event, it is not necessary here to determine this issue.

Costs

256. As the defendants in their submissions indicated that they wished to be heard on the appropriate orders as to costs, I do not address that issue at this stage.

Orders

257. For the reasons set out above I make the following orders:

1. Pursuant to r 13.4 of the Uniform Civil Procedure Rules 2005 (NSW), order that the proceedings be dismissed.

2. Reserve the question of costs to be dealt with, if possible, on the papers.

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Decision last updated: 16 August 2019