Rowe v Grünenthal
[2011] VSC 657
•19 December 2011
| IN THE SUPREME COURT OF VICTORIA | Not Restricted | |
AT MELBOURNE
COMMON LAW DIVISION
MAJOR TORTS LIST
No. S CI 2011 3527
| LYNETTE SUZANNE ROWE | Plaintiff |
| v | |
| GRÜNENTHAL GmbH THE DISTILLERS COMPANY (BIOCHEMICALS) LIMITED (00518031) DIAGEO SCOTLAND LIMITED (SC 000750) | First Defendant Second Defendant Third Defendant |
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JUDGE: | BEACH J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 12 December 2011 | |
DATE OF JUDGMENT: | 19 December 2011 | |
CASE MAY BE CITED AS: | Rowe v Grünenthal & Ors | |
MEDIUM NEUTRAL CITATION: | [2011] VSC 657 | |
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PRACTICE AND PROCEDURE – Group proceeding – Service out of Australia – Indorsement for service out of Australia – Place of commission of tort – Place where damage suffered – Application to set aside service – Application to stay proceeding – Forum non conveniens – Appropriate forum – Supreme Court (General Civil Procedure) Rules 2005, rules 2.04, 7.01, 7.02, 7.05, 8.08 and 8.09.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr D.E. Curtain QC with Mr J.R.C. Gordon and Mr A.A. Higgins | Gordon Legal |
| For the First Defendant | Mr B.F. Quinn | Clayton Utz |
| For the Second and Third Defendants | Mr T.J.P. Walker | Freehills |
HIS HONOUR:
Introduction
Lynette Suzanne Rowe, the plaintiff, was born in Victoria in March 1962 without arms or legs. The plaintiff alleges that her congenital absence of both arms and both legs, together with other injuries, were caused by her mother’s consumption of thalidomide drugs prior to the plaintiff’s birth. Pursuant to Part 4A of the Supreme Court Act 1986, the plaintiff commenced this proceeding (a group proceeding, or sometimes called a class action) on behalf of herself and others who were born in Australia between 1 January 1958 and 31 December 1970 who have suffered since birth from a congenital malformation and whose mothers, while pregnant with them, consumed and/or were administered thalidomide.[1]
[1]As currently pleaded, there are other conditions that must be satisfied to be a group member. However, at this stage it is not necessary to say anything further in relation to these other conditions.
Grünenthal GmbH, the first defendant, is a company registered in the Federal Republic of Germany. The Distillers Company (Biochemicals) Limited, the second defendant, is a company incorporated in the United Kingdom. Diageo Scotland Limited, the third defendant, asserted in the plaintiff’s statement of claim to have been previously known as Distillers Company Limited, is a company incorporated in Scotland.
By her statement of claim, the plaintiff alleges:
(a)between about 1950 and 1955, Grünenthal developed the drug, thalidomide, and patented it in a number of countries, including Australia;
(b)between about May 1957 and April 1960, Grünenthal and the second and third defendants (referred to in the statement of claim as “the Distillers defendants”) entered into a series of agreements (“the licence agreements”) whereby Grünenthal licensed the Distillers defendants and required the Distillers defendants to bring thalidomide drugs to market in a number of countries, including Australia;
(c)the manufacture, supply, distribution, marketing and promotion of thalidomide drugs in Australia pursuant to the licence agreements was at all relevant times a joint enterprise between the defendants, such that each is jointly and severally liable for any breach of duty by another that resulted from any foreseeable injury caused by the consumption of thalidomide drugs;
(d)from some time after May 1957, in accordance with the licence agreements, Grünenthal and the Distillers defendants caused thalidomide drugs to be available in Australia;
(e)from some time after May 1957 until at least December 1961, Grünenthal and the Distillers defendants caused thalidomide drugs to be marketed and promoted in Australia as safe, non-toxic, without significant side-effects, suitable for pregnant women, children and babies, an effective treatment for nausea, sleeplessness and anxiety, and on which it was impossible to overdose;
(f)on or before July 1961, each of the defendants knew or ought to have known of, amongst other things, various risks associated with the use or consumption of thalidomide;
(g)by the time thalidomide drugs became available in Australia, each of the defendants knew or ought to have known that there was a foreseeable risk of injury to consumers of thalidomide drugs and their unborn children;
(h)the defendants jointly and individually owed to Australian consumers of thalidomide drugs, and their children, including the plaintiff and the plaintiff’s mother, a duty in Australia to take reasonable care that they would not be exposed to the risk of injury from thalidomide drugs;
(i)the duty referred to in the previous sub-paragraph required the defendants to take reasonable steps commensurate with the foreseeable risk of injury to, amongst other things, publish in Australia appropriate warnings to governments, hospitals, doctors, medical practices, pharmacists and consumers;
(j)the defendants negligently breached their joint and individual duties of care in failing, among other things, to give appropriate warnings or to ensure such warnings were given in Australia; and
(k)as a consequence of the defendants’ negligence, the plaintiff and the group members have suffered loss and damage.
This proceeding is at a very early stage. The defendants have been served, and each has entered a conditional appearance.[2] By summons filed 5 September 2011, Grünenthal seeks orders pursuant to rules 8.08(3) and/or 8.09(c) and/or 7.05(2)(b) of the Supreme Court (General Civil Procedure) Rules 2005 (“the Rules”) that the Court stay the proceeding against Grünenthal on the ground that the Supreme Court of Victoria is not a convenient forum for the trial of this proceeding. In argument, I was told that this order was also sought pursuant to the inherent jurisdiction of the Court. By summons filed 14 September 2011, the Distillers defendants seek orders pursuant to rule 8.08(3) and/or 7.05(1), 7.05(2)(a) and 8.09(a) of the Rules and/or the inherent jurisdiction of the Court that service upon the Distillers defendants be set aside, and the proceeding be stayed as against the Distillers defendants. In response to the Distillers defendants’ summons, by summons filed 19 October 2011, the plaintiff seeks, if necessary, an order pursuant to rule 2.04 of the Rules that the Court dispense with compliance with rule 7.02(1). This is the hearing of the three summonses to which I have just referred.
[2]Cf rule 8.08(2) of the Supreme Court (General Civil Procedure) Rules 2005 (“the Rules”).
Grünenthal’s inappropriate forum application
Summary of Grünenthal’s submissions
Grünenthal contends that the proceeding should be stayed against it on the grounds that the Supreme Court of Victoria is not a convenient forum for the trial of the proceeding.[3]
[3]In support of its application, Grünenthal relies upon affidavits affirmed by Yehudah Zef New on 5 September and 2 December 2011.
Grünenthal contends that the forum application falls to be determined by application of the principles enunciated in Voth v Manildra Flour Mills Pty Ltd.[4] The plaintiff does not contest that Voth has application in this case. The contest between the parties concerns what Voth stands for and the application of the principles to be applied.
[4](1990) 171 CLR 538.
Grünenthal submits that when one looks at the usual connecting factors in this case, Victoria is a clearly inappropriate forum. It submits that in conducting the relevant analysis, the claims of all group members and the particular features of the group proceeding need to be considered. Additionally, it submits that there are three further factors that should be taken into account in determining the application against the plaintiff:
(a)First, it submits that this proceeding has evolved from an earlier proceeding, Robbins & Ors v Grünenthal,[5] which “bespeaks a concern by the plaintiffs[6] to formulate the case in Rowe as a device substantially for the purpose of resisting a forum challenge”. This context, it is submitted, “should inform the Court’s consideration of the arguments advanced [by Grünenthal] and encourage an approach which looks beyond the carefully crafted allegations to the substance of the true case in negligence which the group members wish to advance”.
(b)Secondly, Grünenthal submits that “One of the pleading devices employed by the plaintiff is a joint tortfeasance plea the apparent purpose of which is to characterise, for legal purposes, any conduct engaged in by the Distillers defendants in Australia as conduct also by Grünenthal”. It is then submitted that this plea is both embarrassing and an abuse of process and a further reason for resolving Grünenthal’s application against the plaintiff.
(c)Thirdly, Grünenthal submits that the plaintiff’s claim and all group members’ claims are statute barred. It is then submitted:
“This is a powerful consideration suggestive of vexation and oppression in the Voth sense. The absence of a viable cause of action under Australian law robs group members of one critical connecting factor upon which they rely. Further, if all or many group members’ claims are bound to fail in an Australian court, then the Part 4A proceeding is vexatious and oppressive such that Grünenthal ought not to be put to the trouble and expense of defending it.”
[5]Number S CI 2010 5845.
[6]Presumably plaintiffs in this proceeding and Robbins, as there is only one plaintiff in this proceeding.
Voth v Manildra Flour Mills Pty Ltd
The plurality in Henry v Henry[7] summarised Voth in the following terms:[8]
“In Voth, this Court adopted for Australia the test propounded by Deane J in Oceanic Sun, namely, that a stay should be granted if the local court is a clearly inappropriate forum, which will be the case if continuation of the proceedings in that court would be oppressive, in the sense of ‘seriously and unfairly burdensome, prejudicial or damaging’, or, vexatious, in the sense of ‘productive of serious and unjustified trouble and harassment’. It was also held in Voth that, in determining whether the local court is a clearly inappropriate forum, ‘the discussion by Lord Goff in Spiliada of relevant “connecting factors” and “a legitimate personal or juridical advantage” provides valuable assistance’. In this last regard, Lord Goff of Chieveley expressed the view that legitimate personal or juridical advantage is a relevant but not decisive consideration, the fundamental question being ‘where the case may be tried “suitably for the interests of all the parties and for the ends of justice”’.”[9]
[7](1996) 185 CLR 571 (Dawson, Gaudron, McHugh and Gummow JJ).
[8]Ibid, 587.
[9]Footnotes omitted.
In Voth,[10] the plurality[11] said:[12]
“It follows that, subject to the question of onus discussed in the preceding paragraph, the principles to be applied in applications to set aside service and in applications for a stay on inappropriate forum grounds are those stated by Deane J in Oceanic Sun. In the application of those principles the discussion by Lord Goff in Spiliada of relevant ‘connecting factors’ and ‘a legitimate personal or juridical advantage’ provides valuable assistance.
The fact that the onus of proof will differ according to whether the application is an application to set aside service effected outside the jurisdiction pursuant to leave or an application to stay the proceedings is inevitable: this flows from the issue to which the test is relevant. In one case, should the court assume jurisdiction? In the other, should the court decline jurisdiction? As Spiliada recognises there will be a difference in onus regardless of the precise content of what is seen as the appropriate test. The question whether the local court is a clearly inappropriate forum focuses, on both kinds of application, upon the inappropriateness of the local court and not the appropriateness or comparative appropriateness of the suggested foreign forum. In practice, the differing onus should raise no real difficulty.”[13]
[10](1990) 171 CLR 538.
[11]Mason CJ, Deane, Dawson and Gaudron JJ.
[12]171 CLR 564-5.
[13]Footnotes omitted.
The plaintiff submits that in considering Grünenthal’s application, the Court should be principally concerned with the relevant “connecting factors”. So much might be suggested by the reference in the judgment of the plurality in Voth to the judge in an ordinary case being furnished with “any necessary assistance by a short, written (preferably agreed) summary identification of relevant connecting factors and by oral submissions measured in minutes rather than hours”.[14]
[14]Voth at p 565.
However, Grünenthal contends that in addition to looking at relevant connecting factors, the Court should consider matters that show that the plaintiff’s claim is not maintainable generally or matters that disclose oppression or that the proceeding would be vexatious or an abuse of process. Specifically, Grünenthal relies upon the following passage in the judgment of the plurality in Voth:[15]
“Before we refer to the judgments of the majority in Oceanic Sun, we should state very briefly what we take to be the common ground between them. First, a plaintiff who has regularly invoked the jurisdiction of a court has a prima facie right to insist upon its exercise. Secondly, the traditional power to stay proceedings which have been regularly commenced, on inappropriate forum grounds, is to be exercised in accordance with the general principle empowering a court to dismiss or stay proceedings which are oppressive, vexatious or an abuse of process and the rationale for the exercise of the power to stay is the avoidance of injustice between parties in the particular case. Thirdly, the mere fact that the balance of convenience favours another jurisdiction or that some other jurisdiction would provide a more appropriate forum does not justify the dismissal of the action or the grant of a stay. Finally, the jurisdiction to grant a stay or dismiss the action is to be exercised ‘with great care’ or ‘extreme caution’.”[16]
[15]Voth at p 554.
[16]Footnotes omitted.
In reliance upon the second of what the plurality took to be the agreed propositions between the parties in Voth, Grünenthal submits that matters such as insufficiency of prospects of success or other abuse of process can be taken into account in determining an inappropriate forum application against a plaintiff.[17] In my view, there can be little doubt that when there is an obvious abuse of process identified in an inconvenient forum application, then it is within the power of the court to stay the proceeding. Further, subject to procedural fairness being accorded to the parties, the same may be said if the court is satisfied that the plaintiff’s claim is demonstrated to be hopeless or bound to fail. For present purposes, Grünenthal’s submissions on this issue can be accepted.
[17]See further, Agar v Hyde (2000) 201 CLR 552, 560 [9] (Gleeson CJ) and 575 [55] (Gaudron, McHugh, Gummow and Hayne JJ) and Barach v University of New South Wales (2011) NSWSC 431, [116], [118] and [119] (Garling J).
Rule 7.05(2)(b)
The principal rule relied upon by Grünenthal is rule 7.05(2)(b) of the Rules. That rule provides that the Court may exercise its jurisdiction to stay a proceeding on the ground “that Victoria is not a convenient forum for the trial of the proceeding”.
In Regie Nationale des Usines Renault SA & Anor v Zhang,[18] the High Court had to consider the equivalent New South Wales rule. Part 10, rule 6A of the Supreme Court Rules 1970 (NSW) permitted a defendant to apply to have a proceeding stayed on the ground that the New South Wales Supreme Court was an inappropriate forum for the trial. In Zhang, the plurality said:[19]
“Because a court’s power to stay proceedings is an aspect of its inherent or implied power to prevent its own processes being used to bring about injustice, the same concepts and considerations necessarily inform the test of ‘inappropriate forum’ in [the rule] as inform the ‘clearly inappropriate forum’ test adopted in Voth. And because the ultimate consideration is the prevention of injustice, they inform it in the same way.”[20]
[18](2002) 210 CLR 491.
[19]Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ at 210 CLR 503 [25].
[20]See further Agar v Hyde (2000) 201 CLR 552, 575 [55].
In the result, the parties were agreed before me that in this application, Grünenthal bears the onus of establishing that Victoria is a clearly inappropriate forum.
Relevant connecting factors
The parties filed a body of affidavit evidence concerning relevant connecting factors. In summary, the plaintiff’s evidence is that she is in Victoria; her lay witnesses live in Australia and almost all are in Victoria; and her expert witnesses are almost all in Australia. Further, she suffered injury in Victoria and all of the evidence concerning the consequences of her injuries is in Australia, if not in Victoria.
The defendant’s evidence is to the effect that all of the relevant facts concerning the development of thalidomide occurred in Germany. All of the documents are in Germany[21] and most (if not all) of them are in German. Further, all of the witnesses Grünenthal would want to call come from outside Australia – again, the bulk (if not all) currently being located in Germany. That said, the material does not disclose with any precision the number of witnesses Grünenthal might call in defence of the plaintiff’s claim. Whilst there is reference in the material to 119 lay witnesses and 56 experts who testified before a criminal court in Germany in a trial that was discontinued in December 1970, the present material does not enable one to draw any conclusion as to how many (if any) of these witnesses might ultimately be called in the present proceeding.[22]
[21]There are said to be, amongst other things, an archive in Germany of some 1,800,000 pages, the physical quality of which is said to be “poor”.
[22]See further, Grünenthal’s connecting factor analysis set out in section F on p 15 of its written submissions dated 2 December 2011 (noting that during the hearing paragraph 39(f) was abandoned). Indeed, during the hearing, Grünenthal (whilst maintaining that the proper law of the licensing agreements was not Australian law and the law governing any claims or rights that might exist between defendants was not Australian law) abandoned for the purpose of this application its written submissions that the law governing the plaintiffs and group members’ claims was or might not be Australian.
There is a paucity of material concerning the relevant connecting factors between other group members and Victoria. That said, the group is defined by, amongst others, a condition that a group member must have been born in Australia. To the extent that it is relevant to consider group members, it seems likely that group members (and witnesses that may be called in individual trials) are likely to have closer connections with Victoria than Germany.
There can be no doubt that there are substantial connecting factors between this proceeding and Germany. However, in my view, the proceeding also has a substantial connection with Victoria. I accept that significant inconvenience will be caused to Grünenthal in being required to defend this proceeding in Victoria.[23] On the other hand, it seems to me that equally significant inconvenience would be suffered by the plaintiff if she was required to litigate the proceeding outside Australia. Having considered all the relevant connecting factors, I am unable to conclude that Victoria is a clearly inappropriate forum. It remains to consider Grünenthal’s three additional arguments.[24]
The Robbins proceeding
[23]See further, McGregor v Potts & Ors (2005) 68 NSWLR 109, 120-122 [46], [48], [50] and [51].
[24]See paragraph [7] above.
Grünenthal asserts that the present proceeding has evolved from the Robbins proceeding. It asserts that the “evolution” of the Robbins proceeding into the present proceeding occurred “substantially for the purpose of resisting a forum challenge”. Further, complaint is made that the present proceeding is an abuse of process because the groups are defined in each proceeding in a way that means there will be individuals who are group members in both proceedings.
The issue of group definitions has been the subject of correspondence between the parties and submissions in Court. The plaintiffs in Robbins have foreshadowed that they will seek leave to amend the group definition in Robbins so as to exclude any person who is a group member in Rowe. However, this has not yet been done. It is at least arguable that whilst two group proceedings remain on foot where individuals may be group members in both proceedings there is an abuse of process. Accepting for present purposes that this is so, the question becomes, should the current inconvenient forum application succeed because of this abuse?
I am not persuaded that the current inconvenient forum application should succeed on the basis of overlapping group definitions for three reasons. First, in any event, it is far from clear without detailed argument from the plaintiffs in each proceeding as to which proceeding might constitute the abuse. Secondly, in my view, in circumstances where the plaintiffs in the Robbins proceeding have foreshadowed an amendment to overcome the present problem, it would not be just to stay Ms Rowe’s proceeding on a forum non conveniens application. Thirdly, if either the Robbins proceeding or the present proceeding should be stayed, it is far from clear at this stage whether it should be the Robbins proceeding on the one hand or the present proceeding on the other hand.[25]
[25]Cf McHenry v Lewis (1882) 22 ChD 397; Lidden v Composite Buyers Limited (1996) 67 FCR 560 and Henry v Henry (1996) 185 CLR 571, 590-591.
Grünenthal submits that I should infer that the present proceeding has been constituted “substantially for the purpose of resisting a forum challenge”. Three points may be made. First, I see no reason for drawing any such inference. Grünenthal submits that three matters should be noted in respect of the Robbins proceeding:
(1)unlike the present proceeding, in Robbins, Grünenthal is the only defendant – notwithstanding that it did not supply thalidomide products directly to the Australian market;
(2)many of the alleged negligent acts and omissions pleaded in Robbins relate to conduct that could only have been engaged in by Grünenthal outside Australia; and
(3)the group members in Robbins include people born in New Zealand and whose mothers presumably consumed thalidomide in New Zealand (and in respect of those persons it is submitted “none of the alleged negligent acts and omissions are, on a conventional view of choice of law principles, likely to be held to be wrongs committed in Australia”).
Grünenthal then submits that, having issued a forum application in the Robbins proceeding, “it may reasonably be inferred that recognition of these three matters contributed to the commencement of [the present proceeding] in an effort to mould a proceeding less susceptible to being stayed in the event of a forum application”. It is then submitted by Grünenthal that “this purpose is confirmed” by a letter from Gordon Legal to Clayton Utz.[26] The letter relied upon notes the commencement of the present proceeding, foreshadows an amendment of the group description in the Robbins proceeding and proposes that the Robbins proceeding be adjourned or timed as to abide the outcome of common questions in the present proceeding. The letter goes on to note that some categories of claimants in the Robbins proceeding enliven issues of law such as jurisdiction and choice of law which may take substantial time to traverse. Further, it is noted in the letter that “the majority of thalidomide survivors who have contacted [the plaintiff’s solicitors] are members of the Rowe group and we [the solicitors] believe that the most efficacious disposition of the rights of the parties generally is by prioritising the adjudication of the [present proceeding]”. Finally, there is a statement in the letter “We have used our best endeavours to particularise the Rowe [present] statement of claim in a way which addresses the matters which have been legitimately raised by you in the request for further and better particulars sought of the Robbins proceeding”. Nothing in this letter leads me to conclude, as was asserted by Grünenthal, that the purpose of the present proceeding was to “mould” or create a proceeding less susceptible to being stayed in the event of a forum application.
[26]Dated 8 July 2011 (Exhibit “YZN1” to the affidavit of Yehudah Zev New sworn 5 September 2011).
Secondly, even if those who commenced the Robbins proceeding had a concern about forum challenges and issued the present proceeding in an attempt to avoid the problem they perceived existed, it does not seem to me why such complaint as could be made about this should be laid at the feet of the plaintiff in the present proceeding. Thirdly, it seems to me that the real question in this application is whether or not Victoria (on the material) is in fact a clearly inappropriate forum. That question falls to be answered either in the affirmative or the negative. In answering the question, one would of course take into account any artifice that might be demonstrated as having been engaged in to conceal the true answer to the question. But in the absence of any such artifice, the question falls to be answered by an appropriate consideration of the material in accordance with settled principle.
For these reasons, Grünenthal’s complaints concerning the existence of, and so called evolution from, the Robbins proceeding are without merit. I turn now to consider Grünenthal’s complaints concerning the pleas in the statement of claim that Grünenthal and the Distillers are joint tortfeasors.
Joint tortfeasor allegations
Considerable attention was given by Grünenthal to the allegations in the statement of claim that it and the Distillers defendants are joint tortfeasors. There can be no doubt that the statement of claim contains allegations that Grünenthal and the Distillers defendants are joint tortfeasors. However, the statement of claim also contains allegations that each defendant individually and separately breached the duty of care it is alleged to have owed.
In support of its submissions on this issue, Grünenthal relied upon the English Court of Appeal’s decision in The Koursk.[27] In that case, Bankes LJ said:[28]
“It is no doubt quite common to speak of each of two separate tortfeasors as joint tortfeasors in the sense that where each has contributed to the injury complained of, each is liable for the whole of the damage done. In my opinion, the use of the expression under such circumstances is inaccurate and misleading.
…
It is easy to put instances the mere mention of which indicate that the law must require something more than the single damnum to convert two quite separate and distinct torts into a joint tort. For instance, A, who wishes to approach B’s house in order to commit a burglary, trespasses on his land and crosses a brook by an already damaged bridge, which he seriously weakens by his weight. Next day C, wishing to approach the same house mistaking it for that of a friend, trespasses on B’s land and in crossing the same bridge breaks it completely down by his weight. Can it possibly be said that the damage to the bridge was caused by a joint tort, or that A and C are joint tortfeasors? I think not; and if this view is correct it follows that in order to constitute a joint tort there must be some connection between the act of the one alleged tortfeasor and that of the other. It would be unwise to attempt to define the necessary amount of connection. Each case must depend upon its own circumstances.”
[27][1924] P 140.
[28]Ibid, 150.
Whilst there was support in all three judgments in The Koursk for a passage in the then current edition of Clerk and Lindsell on Torts that “Persons are said to be joint tortfeasors when their respective shares in the commission of the tort are done in furtherance of a common design”, Bankes LJ expressed the view that the rule as stated in Clerk and Lindsell may not have been stated sufficiently widely to cover every possible case.
In Thompson v Australian Capital Television Pty Limited & Ors,[29] the majority (Brennan CJ and Dawson and Toohey JJ) said:[30]
“The difference between joint tortfeasors and several tortfeasors is that the former are responsible for the same tort whereas the latter are responsible only for the same damage. As was said in The Koursk, for there to be joint tortfeasors ‘there must be a concurrence in the act or acts causing damage, not merely a coincidence of separate acts which by their conjoined effect cause damage’. Principal and agent may be joint tortfeasors where the agent commits a tort on behalf of the principal, as master and servant may be where the servant commits a tort in the course of employment. Persons who breach a joint duty may also be joint tortfeasors. Otherwise, to constitute joint tortfeasors two or more persons must act in concert in committing the tort. Torts of all kinds may be joint and defamation is no exception.”[31]
[29](1996) 186 CLR 574.
[30]Ibid, 580.
[31]Footnotes omitted.
In her statement of claim, the plaintiff contends that the manufacture, supply, distribution, marketing and promotion of thalidomide drugs in Australia pursuant to the licence agreements was a joint enterprise between Grünenthal and the Distillers defendants. This proposition may be difficult to prove at trial. At this stage, it is not possible to say what (if any) prospects the plaintiff has in establishing this allegation. The short point is that the question of whether or not the plaintiff can establish that the defendants acted in concert in supplying thalidomide in Australia or in promoting thalidomide is, in the absence of further material, a matter of evidence and a matter for trial.
Whilst there may be some force in Grünenthal’s submissions that the allegations that it and the Distillers defendants are joint tortfeasors is not without difficulty, two further points may be made. First, I am not persuaded that the point is so clear that it is untenable for the plaintiff to make the case she pleads. Remembering that this is a common law pleading, much may depend on the evidence ultimately led. Secondly, even if it could be said that the joint tortfeasor allegations are foredoomed to fail, their maintenance at this stage does not lead me to conclude that the proceeding is oppressive, vexatious or an abuse of process so as to justify preventing the plaintiff from litigating this proceeding (or any part of it) in Victoria.
In reliance upon its submission that the plaintiff’s pleas that the defendants were joint tortfeasors were hopeless, Grünenthal went on to submit that the joint tortfeasor pleas were a “device employed by the plaintiff … the evident purpose of which [was] to characterise, for legal purposes, any conduct engaged in by the Distillers defendants in Australia as conduct also by Grünenthal”. It was then submitted by Grünenthal that “as a consequence, the conduct of the Distillers defendants alleged by the plaintiff cannot properly be considered a ‘connecting factor’ in the plaintiff’s favour in the forum application”. As will be apparent from what I have already said, I have not regarded the conduct of the Distillers defendants alleged by the plaintiff to be a relevant connecting factor in the plaintiff’s favour in Grünenthal’s application. This part of Grünenthal’s submission[32] fails because the premise upon which it is based is not made out.
[32]First defendant’s submissions on forum non conveniens application, 26 [66].
For these reasons, Grünenthal’s complaints concerning the joint tortfeasor pleas are without merit. I turn now to consider the statute of limitation issues.
The plaintiff’s and group members’ claims are statute barred
Grünenthal contends that because the plaintiff and all group members’ claims are statute barred, the proceeding is an abuse of process. Counsel for the plaintiff did not seek to contend that the plaintiff or any group members’ claim was not statute barred.[33] However, he contended that the plaintiff and group members had rights to make extension of time applications at an appropriate time.
[33]Insofar as the plaintiff’s claim, and the claims of group members to which Victorian law applies, are concerned, cf ss 27E(2)(b) and 27N of the Limitation of Actions Act 1958. But, in respect of such claims, cf s 27J of that Act.
In essence, Grünenthal contends that all claims being statute barred “is a powerful consideration suggestive of vexation and oppression in the Voth sense”. The plaintiff counters this submission by saying that the Court is in no position to know at this stage the likely prospects of success of the plaintiff and group members obtaining extensions of time within which to bring their claims. The plaintiff pleads in the statement of claim that she became aware in or after February 2011 that her injuries were probably caused by thalidomide; her injuries were caused by the negligence of the defendants; the defendants were possessed of the knowledge particularised in paragraphs 25 to 29 (Grünenthal) and 31 to 34 (the Distillers defendants) of the statement of claim; and the defendants had engaged in the conduct described in paragraphs 15 to 24 of the statement of claim (which included the matters referred to in sub-paragraphs (b) to (e) of paragraph [3] above). Further, one of the qualifications for group membership is being similarly unaware before 29 October 2010 of one or more of the matters in respect of which the plaintiff pleads her lack of awareness.[34] In the circumstances, absence of awareness of one or some of these matters is likely to tell as a factor in favour of the granting of an extension of time by a relevant group member - although I accept that it is not possible in any case (including the plaintiff’s case) to say at this stage what the prospects of an extension of time being granted might be.
[34]See paragraph 1.4 of the statement of claim.
The short answer to the point made by Grünenthal is that merely because the plaintiff and group members each have a live statute of limitations problem does not mean that there is vexation or oppression or an abuse of process in the Voth sense justifying the staying of this proceeding.[35] To the contrary, there is simply a contested issue upon which, amongst others, the plaintiff must succeed before she can recover damages. Similarly, each group member will have to obtain an extension of time before they can recover damages. The existence of contested issues of this kind is not unknown in group proceedings. Further, outside the group proceeding context, it is not unknown for a plaintiff to issue a common law proceeding in which an extension of time might be needed before damages can be recovered. Such cases are not ordinarily regarded as vexatious, oppressive or an abuse of process.
[35]See further, Palmdale Insurance Co (in liquidation) v L. Grollo & Co Pty Ltd & Ors [1986] VR 408 and Doundoulakis v Antony Sdrinis & Co [1989] VR 781, 782.
In further elaboration of his submissions on this point, counsel for Grünenthal asserted that once limitation defences are raised, this Court could not know whether or not the provisions of s 33C of the Supreme Court Act 1986 were satisfied. Section 33C is the provision allowing seven or more people in the circumstances set out therein to commence a group proceeding. In my view, the fact that at some time in the future it might be shown that there are less than seven people who have a claim against Grünenthal (the others having failed on a limitation defence) is not to the point. A group proceeding (subject to s 33N) may be permitted to proceed even if, at the end of the day, less than seven people ultimately succeed in recovering damages or establishing a cause of action. The fact that the material does not enable the Court to know whether or not there are more than seven people who are likely to succeed in a claim against Grünenthal is not a matter that tells in favour of staying the proceeding on the ground that the Supreme Court of Victoria is not a convenient forum (that being the current application).
Inconvenient forum application: conclusion
When one looks at all of the relevant connecting factors in relation to the proceeding and each of the considerations which Grünenthal asserts constitutes vexation, oppression and an abuse of process, it cannot be said that Victoria is a clearly inappropriate forum or that the proceeding should be stayed. Grünenthal’s application for a stay must be dismissed.
The Distillers defendants’ application to set aside service and/or stay the proceeding
Summary of the Distillers defendants’ submissions
The Distillers defendants seek to set aside service on them and/or to stay the proceeding on the basis that rule 7.02 of the Rules has not been complied with. The writ was served together with an indorsement headed “Indorsement for service out of Australia”, which provided:
“This writ is to be served on the defendants under rules 7.01(i) and 7.01(j) of the Supreme Court Rules as it is:
(a) founded on a tort committed within Victoria; and/or
(b) brought in respect of damage suffered wholly or partly in Victoria and caused by a tortious act or omission wherever occurring,
as pleaded and particularised in the accompanying statement of claim”.
Rule 7.01(1) relevantly provides:
“Originating process may be served out of Australia without order of the court where –
…
(i) the proceeding is founded on a tort committed within Victoria;
(j) the proceeding is brought in respect of damage suffered wholly or partly in Victoria and caused by a tortious act or omission wherever occurring;
…”
Rule 7.02 relevantly provides:
“(1) Originating process served on any defendant out of Australia in accordance with this Order shall, at the time of service on that defendant, contain an indorsement stating the facts and the particular paragraph of rule 7.01 relied upon in support of such service.
(1.1) The indorsement under paragraph (1) shall be distinct from the endorsement of claim on the originating process, but any fact in support of service out of Australia which is a fact alleged by the indorsement of claim may be incorporated by specific reference in the indorsement under paragraph (1).
…”
In summary, the Distillers defendants contend that the service indorsement does not identify any facts to establish the circumstances of paragraphs (i) and (j) of rule 7.01(1). Further, they contend that the general reference to matters pleaded and particularised in the statement of claim does not constitute incorporation “by specific reference” as permitted by rule 7.02(1.1) so as to comply with rule 7.02.
The plaintiff contends there has been no non-compliance with order 7 on her part. However, in the alternative, if there is any non-compliance, she seeks an order pursuant to rule 2.04 dispensing with compliance under rule 7.02(1). The Distillers defendants say that no such dispensation should be given in circumstances where they are not able to determine whether the Court has jurisdiction, by reason of the proceeding having been served within one of the grounds provided for by rule 7.01(1).
Purpose of rule 7.02(1)
As was stated by Beach J in Whinnen v Cussons (International) Limited:[36]
“The purpose of the [service] indorsement is to give a defendant notice of the grounds on which a plaintiff claims to be entitled to serve the originating process out of the jurisdiction. To do that the indorsement must identify not only the paragraph or paragraphs of rule 7.01 the plaintiff relies upon, but must also state the facts which bring the case within that rule. In this way a defendant is given an appropriate opportunity to determine whether to object that the court ought not to hear and determine the proceeding on the ground that the proceeding is not within rule 7.01(1) before filing an appearance or conditional appearance in the proceeding”.
[36]Unreported Supreme Court of Victoria, delivered 24 February 1998.
In that case, Beach J went on to state that the defect, which was conceded, could not be cured by amendment made after service of the writ. The conceded defect was that no facts were identified in the indorsement.[37]
[37]See further, Schweitzer v Kronen Verwaltungs GmbH & Ors [1998] VSC 190, [45] (McDonald J); Fujitsu Australia Limited v Dewar Electronics Pty Ltd [2001] VSC 222, [32] (Gillard J); Victorian WorkCover Authority v Orientstar Shipping Corporation [2003] VSC 111, [16] (Balmford J) and Transfield Philippines Inc v Pacific Hydro Limited [2006] VSC 175, [45] (Hollingworth J).
Whilst there used to be some controversy as to whether a combination of the service indorsement and the indorsement of claim (be it a general indorsement or a statement of claim) may fill gaps in the service indorsement, this was addressed by the introduction of paragraph (1.1) of rule 7.02 in May 2007. As the terms of paragraph (1.1) demonstrate, the controversy was resolved by permitting any fact in support of service out of Australia which is alleged in the indorsement of claim to be incorporated “by specific reference” in the service indorsement.
The resolution of the Distillers defendant’s application
The service indorsement identifies the paragraphs of rule 7.01 which the plaintiff relies upon. To that extent, it complies with rule 7.02(1). However, the Distillers defendants contend that the service indorsement does not state the facts relied upon to support service under the particular paragraphs of rule 7.01 relied upon by the plaintiff. In response to this, the plaintiff asserts that the requisite facts are incorporated by specific reference pursuant to paragraph (1.1) of rule 7.02 by the statement in the service indorsement that the proceeding is founded on a tort committed within Victoria (rule 7.01(i)) and/or brought in respect of damage suffered wholly or partly in Victoria and caused by a tortious act or omission wherever occurring (rule 7.01(j)) “as pleaded and particularised in the accompanying statement of claim”.
The statement of claim pleads tortious acts and omissions on the part of the Distillers defendants. Further, it pleads a tort committed within Victoria by the Distillers defendants. Additionally, the statement of claim also pleads the facts constituting the tort committed within Victoria alleged against the Distillers defendants and the facts constituting damage suffered by the plaintiff wholly in Victoria.
There are many ways the plaintiff could have drawn the service indorsement in this case. For example, instead of the six line indorsement actually drawn, the plaintiff could have drawn a six page document setting out every conceivable fact, sub-fact, nuance and characterisation of the facts referred to. Such an indorsement may look similar to the document annexed as Annexure A to the plaintiff’s submissions in response to the Distillers defendants’ outline of submissions on their rule 7.02 application.[38] The fact that one is capable of drawing an indorsement in great detail does not mean that a less detailed document which incorporates the facts in the statement of claim is not also capable of amounting to compliance with the rules. As I have said above, the purpose of the service indorsement is to give a defendant notice of the grounds on which a plaintiff claims to be entitled to serve originating process out of the jurisdiction. The rules are not an end in themselves. Much less is it their function to create disputes for no productive purpose.
[38]Dated 9 December 2011.
In my view, the service indorsement complies with rule 7.02 by identifying the paragraphs of rule 7.01 relied upon and by incorporating by specific reference the relevant facts from the statement of claim.[39] Without setting out every fact pleaded against the Distillers defendants in the statement of claim, the statement of claim pleads (in respect of the Distillers defendants):
[39]As to authorities before the introduction of rule 7.02(1.1) holding that the combination of a service indorsement and a statement of claim disclosed sufficient facts to give a defendant notice of the grounds on which a plaintiff claimed to be entitled to serve the originating process out of the jurisdiction, see Pivot v Hoechst [2000] VSC 262 and Victorian WorkCover Authority v Orientstar Shipping Corporation [2003] VSC 311, [16] (reversed on a different point in Victorian WorkCover Authority v Orientstar Shipping Corporation [2004] VSCA 237).
(a)the entering into of the licence agreements requiring the Distillers defendants to bring thalidomide drugs to market in Australia;
(b)the existence of a joint enterprise between the Distillers defendants and Grünenthal in relation to the manufacture, supply, distribution, marketing and promotion of thalidomide drugs in Australia, including a particular of this allegation that the Distillers defendants repeated in Australia Grünenthal’s assurances as to the safety of thalidomide drugs and their suitability for consumption by pregnant women;
(c)the fact that after May 1957 the Distillers defendants caused thalidomide drugs to be available in Australia;
(d)the fact that the Distillers defendants caused thalidomide drugs to be marketed and promoted in Australia as safe, non-toxic, without significant side-effects and suitable for pregnant women, children and babies;
(e)the knowledge of the Distillers defendants before 1 April 1959 that, amongst other things, thalidomide drugs had caused neurological injury; that thalidomide was neuro-toxic; and that care should be taken to ensure a drug with a proven neuro-toxic effect should not be taken by pregnant women, particularly during the first trimester, and especially in the absence of a compelling reason to do so;
(f)as a consequence of the facts pleaded in the statement of claim, the Distillers defendants knew or ought to have known that there was a foreseeable risk of injury to consumers of thalidomide drugs and their unborn children and they owed to Australian consumers of the drugs and their children a duty in Australia to take reasonable care that such people would not be exposed to a risk of injury from thalidomide drugs;
(g)breaches of duty by the Distillers defendants in, amongst other things, failing to give appropriate warnings in Australia;
(h)the fact that the plaintiff’s mother consumed thalidomide drugs distributed in Australia whilst pregnant with the plaintiff;
(i)the fact that the plaintiff was born in Victoria and suffered her injuries wholly in Victoria; and
(j)the assertion that the plaintiff’s injuries were caused by the pleaded negligence of the Distillers defendants.
During the course of his submissions, counsel for the Distillers defendants made complaint about the plaintiff’s plea (or what was said to be a lack of a plea) on the issue of causation. I reject these complaints. It cannot be seriously doubted that the plaintiff’s principal case is that, had her mother and/or her mother’s medical practitioners (and, in the cases of other group members, their mothers and/or their mothers’ medical practitioners) been appropriately warned, the plaintiff’s mother (and, in the cases of other group members, their mothers) would not have consumed thalidomide drugs and the plaintiff (and group members) would not have suffered her (their) injuries.[40]
[40]Cf Hriba v Wells (1995) 64 SASR 129, 141 (Bollen J, with whom King CJ and Duggan J agreed) where the Court dealt with an objection taken at trial in a medical negligence case to the plaintiff being asked whether she would have proceeded with the surgery if she had been given certain advice about a risk. The objection was based on what was said to be a failure to plead “causation”. Bollen J said:
“But I think that there was no need to plead that the plaintiff in a case like this would not have had the operation if a warning had been given. Perhaps it is a point of law. Perhaps it is inherent in the allegation of loss sustained.”
In advancing his submissions with respect to causation, counsel for the Distillers defendants submitted that the authorities that deal with product liability involving a negligent omission in respect of the distribution of a dangerous product mandated an approach that requires the Court “to look at the damage said to have been incurred, and then to look back up the chain of causation and see what acts can be identified which give legal significance to what is alleged to be the actual negligent omission”. So much may be accepted. It was then submitted:
“Here, if one does that, what you do, starting with Ms Rowe’s mother as the consumer, is to look back up the chain of causation. We have the supply, because it’s pleaded in the statement of claim, to various medical service providers, hospitals, doctors, pharmacies, and so on.
The next link in the chain is DCBA,[41] a subsidiary of DCBL,[42] as the Australian distributor of, amongst other things, distaval, and then you look further back up the chain to DCBL and then DSL.[43] But those last two steps … as pleaded in the statement of claim, are not necessary causal links. They appear as links in the corporate relations between DCBA on [the] one hand, DCBL and DSL on the other hand.”
[41]The Distillers Co Biochemicals (Australia) Pty Ltd.
[42]The second defendant.
[43]The third defendant.
It was then submitted that what one observed in the statement of claim was “a matter of relations as between various corporations”. From there, it was submitted that this caused problems “of identifying exactly what the facts are that are said to constitute the cause of action”.
I reject these submissions. They involve a selective reading of the statement of claim and ignore the actual facts pleaded against the Distillers defendants. Properly understood, and as I have already set out above, the allegations in the statement of claim against the Distillers defendants are more than simply being the parent companies of Australian or other entities.
For the reasons given above, the Distillers defendants’ application to set aside service and/or stay the proceeding must be dismissed. In the circumstances, it is not necessary to deal with the plaintiff’s additional argument that service out of Australia is now also permitted pursuant to rule 7.01(1)(l).[44]
[44]Rule 7.01(1)(l) permits service out of Australia where “the proceeding is properly brought against a person duly served within or out of Victoria and another person out of Australia is a necessary or proper party to the proceeding”.
If, contrary to the view I have formed, I had concluded that the plaintiff had not adequately complied with rule 7.02, then I would in any event have acceded to her application for a dispensation with compliance with rule 7.02. In my view, contrary to the submissions made by the Distillers defendants, the material discloses that the Distillers defendants have and have had adequate notice of the grounds on which the plaintiff claims to be entitled to have served the writ out of the jurisdiction. I do not accept that any deficiency in the service indorsement (or, incorporated by reference, the statement of claim) has caused any prejudice to the Distillers defendants. If it was necessary, I would have dispensed with compliance with rule 7.02 as being in the interests of justice to all parties.[45] In my view, it would not be in the interests of any party to delay this proceeding further or to have further costs incurred by setting aside service in circumstances where subsequent service of an amended writ and service indorsement would be unlikely to be any more productive of the efficient and just resolution of this proceeding than the service that has already occurred.
[45]Fujitsu Australia Limited v Dewar Electronics Pty Limited [2001] VSC 222, [35] (Gillard J); Schib Packaging Sri v Emrich Industries Pty Ltd (2005) 12 VR 268. See further, rule 1.14(1)(a) of the Rules and s 7(1) of the Civil Procedure Act 2010.
Conclusion
Grünenthal’s summons filed 5 September 2001 and the Distillers defendants’ summons filed 14 September 2011 will be dismissed.
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